                                    COURT OF CHANCERY
                                            OF THE
                                    STATE OF DELAWARE

ANDRE G. BOUCHARD                                                  New Castle County Courthouse
   CHANCELLOR                                                      500 N. King Street, Suite 11400
                                                                  Wilmington, Delaware 19801-3734

                                Date Submitted: June 3, 2015
                               Date Decided: August 14, 2015


  Kevin R. Shannon, Esquire                          Paul D. Brown, Esquire
  Berton W. Ashman, Jr., Esquire                     Chipman Brown Cicero & Cole, LLP
  Potter Anderson & Corroon LLP                      1007 N Orange, Suite 1110
  1313 North Market Street                           Wilmington, DE 19801
  Wilmington, DE 19899
                                                     Peter B. Ladig, Esquire
  Kurt M. Heyman, Esquire                            Brett M. McCartney, Esquire
  Melissa N. Donimirsky, Esquire                     Morris James LLP
  Proctor Heyman Enerio LLP                          500 Delaware Avenue, Suite 1500
  300 Delaware Avenue, Suite 200                     Wilmington, DE 19801
  Wilmington, DE 19801
                                                     Susan Wood Waesco, Esquire
  Gregory P. Williams, Esquire                       Morris, Nichols, Arsht & Tunnell LLP
  Lisa A. Schmidt, Esquire                           1201 North Market Street
  Richards, Layton & Finger, P.A.                    Wilmington, DE 19899
  One Rodney Square
  920 North King Street
  Wilmington, DE 19801

        RE:     In re: Shawe & Elting LLC
                Civil Action No. 9661-CB

                Philip R. Shawe v. Elizabeth Elting, et al.
                Civil Action No. 9686-CB

                In re: TransPerfect Global, Inc.
                Civil Action No. 9700-CB

  Dear Counsel:

        This letter opinion resolves one of the two pending motions for sanctions in the

  lawsuits that Elizabeth Elting and Philip R. Shawe have filed against each other.
In re: Shawe & Elting LLC, et al.
C.A. Nos. 9661, 9686, 9700-CB
August 14, 2015
Page 2 of 5

       On March 6, 2015, Shawe moved under Court of Chancery Rule 30(d) for

monetary sanctions against Elting and the law firm of Kramer Levin Naftalis & Frankel

LLP (“Kramer Levin”) for the conduct of Kramer Levin attorney Philip Kaufman in

defending the deposition of Ronald Greenberg, another Kramer Levin attorney, on

February 6, 2015. The basis for Shawe’s motion is that Mr. Kaufman inappropriately

instructed Mr. Greenberg not to answer many of the seventy-five questions for which Mr.

Kaufman gave that instruction, and that Mr. Kaufman terminated the deposition

prematurely.

       Mr. Kaufman is admitted pro hac vice in these actions and thus is bound by the

Court of Chancery Rules. See Ch. Ct. R. 170; Paramount Commc'ns Inc. v. QVC

Network Inc., 637 A.2d 34, 53 (Del. 1994). Under Court of Chancery Rule 30(d)(1), “[a]

person may instruct a deponent not to answer only when necessary to preserve a

privilege, to enforce a limitation on evidence directed by the Court, or to present a motion

under [Rule 30](d)(3),” which may be made to this Court “or a Court of competent

jurisdiction in the state where the deposition is being taken.” Ch. Ct. R. 30(d)(3). Under

Court of Chancery Rule 30(d)(2), “[i]f the court finds . . . conduct that has frustrated the

fair examination of the deponent, it may impose upon the persons responsible an

appropriate sanction, including the reasonable costs and attorney’s fees incurred by any

party as a result thereof.”
In re: Shawe & Elting LLC, et al.
C.A. Nos. 9661, 9686, 9700-CB
August 14, 2015
Page 3 of 5

      Having reviewed the complete transcript of Mr. Greenberg’s deposition, I

conclude that Mr. Kaufman’s defense of that deposition did not comport with the

standards required by the Court of Chancery Rules. Many of the questions that Mr.

Kaufman instructed Mr. Greenberg not to answer were benign and did not implicate any

privilege. There was no order from the Court limiting the scope of the deposition, and

neither Elting nor Mr. Greenberg moved for an order under Court of Chancery Rule

30(d)(3). The following examples are illustrative of Mr. Kaufman’s instructions:

            Q. And in that e-mail you called Mr. Shawe’s e-mails foolish.
      Correct?

                    Mr. Kaufman: Direction not to answer. He is not going to
      characterize his communications. They say what they say. . . .

             Q. When you wrote in Paragraph 2, the second line, “Given the
      libelous statements you have made about her,” what did you mean?

                    Mr. Kaufman: Direction not to answer. . . .

             Q. Mr. Greenberg, did you have oral communications with ADP
      regarding TransPerfect in the period March and April and May 2014?

                    Mr. Kaufman: Direction not to answer. . . .

             Q. Were the e-mails reflected here on Thursday, April 10, at 4:02
      p.m., 4:54 p.m. and 6:07 p.m. between you and ADP from which Mr.
      Graham and I were dropped sent and received by you?

                    Mr. Kaufman: Direction not to answer. . . .

            Q. Mr. Greenberg, did you have any oral communications with Mr.
      Gerber at Gerber & Co. in or around March and April 2014?

                    Mr. Kaufman: Direction not to answer.

             Q. Who is Mr. Gerber?
In re: Shawe & Elting LLC, et al.
C.A. Nos. 9661, 9686, 9700-CB
August 14, 2015
Page 4 of 5

                    Mr. Kaufman: Direction not to answer. . . .

            Q. Did you have communications with Mr. Burlant about
      TransPerfect business from time to time?

                    Mr. Kaufman: Direction not to answer. . . .

             Q. Mr. Greenberg, did you have communications with Julia Marsh
      at the New York Post regarding this litigation?

                    Mr. Kaufman: Direction not to answer.

See Greenberg Dep. 126-27, 131-32, 134, 136-38, 141.

      The litigation of these actions has been a heated affair to be sure, but that does not

excuse unprofessional conduct. Mr. Kaufman’s defense of this deposition crossed the

line between zealous advocacy and unprofessional conduct, and frustrated the fair

examination of Mr. Greenberg. The argument that Shawe was not prejudiced because he

elected not to elicit testimony from Mr. Greenberg at trial is unpersuasive. The fact that

Shawe later chose not to call Mr. Greenberg as a witness at trial does not relieve Mr.

Kaufman of his obligations under the Court of Chancery Rules, and the decision not to

call Mr. Greenberg appears to have been a legitimate strategic choice given how the

issues in the trial unfolded. Additionally, unclean hands does not apply here because

Shawe’s sanctions motion for misconduct during the deposition of Mr. Greenberg does

not directly relate to the very serious allegations of discovery misconduct that are the

subject of Elting’s pending motion for sanctions.

      “Sanctions serve three functions: a remedial function, a punitive function, and a

deterrent function.” Beard Research, Inc. v. Kates, 981 A.2d 1175, 1189 (Del. Ch. 2009),
In re: Shawe & Elting LLC, et al.
C.A. Nos. 9661, 9686, 9700-CB
August 14, 2015
Page 5 of 5

aff’d sub nom., ASDI, Inc. v. Beard Research, Inc., 11 A.3d 749 (Del. 2010). “In the

event this Court determines that sanctions for discovery abuses are appropriate, the

sanction must be tailored to the culpability of the wrongdoer and the harm suffered by the

complaining party.” Cartanza v. Cartanza, 2013 WL 1615767, at *2 (Del. Ch. Apr. 16,

2013). In my opinion, and as contemplated by Court of Chancery Rule 30(d)(2), Shawe

is entitled to his reasonable costs and attorneys’ fees incurred in preparing and

conducting the deposition of Mr. Greenberg and in briefing the motion. The sanction will

be assessed solely against Kramer Levin because Mr. Kaufman was acting primarily as

counsel for the witness, Mr. Greenberg, during the deposition.

       Shawe’s counsel is directed to file an affidavit within ten business days setting

forth his reasonable costs and attorneys’ fees as provided above, and a proposed order

awarding such costs and fees within ten business days of entry of that order.

       IT IS SO ORDERED.

                                          Sincerely,

                                          /s/ Andre G. Bouchard

                                          Chancellor

AGB/gp
