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C.A. No. 07C-12-134-JRJ

Date Submitted: March 4, 2015
Date Decided: March 31, 2015


Upon Defendant E. I. DuPont De Nemours & Company’s Renewed Motion to Compel
Plaintiff to Respond to Defendant’s Sixth Set of Requests for the Production of
Documents and Things: DENIED.


Ryan P. Newell, Esquire, Connolly Gallagher LLP, The Brandywine Building, 1000
West Street, Suite 1400, Wilmington, DE 19801, Amir H. Alavi, Esquire (pro hac
vice) (argued), Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., 1221
McKinney, Suite 3460, Houston, Texas 77010, Attorneys for Plaintiff Charge
Injection Technologies, Inc.


John A. Sensing, Esquire (argued), Kathleen F. McDonough, Esquire, Potter
Anderson & Corroon LLP, 1313 North Market Street, P.O. Box 951, Wilmington,
DE 19801, Attorneys for Defendant E. I. du Pont de Nemours & Company.
Jurden, P.J.

Before the Court is Defendant E. I. du Pont de Nemours and Company’s
(“DuPont”) Renewed Motion to Compel. For the reasons that follow, DuPont’s
Motion is DENIED.


Charge Injection Technologies, Inc. (“CIT”) instituted suit against DuPont in
December 2007, alleging that DuPont wrongfully used and disclosed CIT’s
proprietary and confidential technology.1 Between November 2010 and October
2011, there was little activity in this case, apparently because of CIT’s failure to pay
prior counsel’s bills.2 On October 31, 2011, the Court granted CIT’s original
counsel’s motion to withdraw.3 On December 1, 2011, CIT’s current lead counsel,
Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing (“AZA”) entered its appearance in
the case.4


In 2012, CIT obtained litigation financing from Aloe Investments Limited
(“Aloe”).5 In the summer of 2013, upon learning of the litigation financing, DuPont
questioned whether CIT had engaged in champerty and maintenance in violation of Delaware law.6

On August 12, 2013, DuPont filed an Emergency Motion to Stay
(“Motion to Stay”), requesting a stay on the merits until the champerty and
maintenance issues are resolved.7

Prior to filing its Motion to Stay, DuPont served CIT with discovery requests
on the champerty and maintenance issue. DuPont’s Sixth Set of Document Requests,
which are also the subject of this Renewed Motion to Compel, seeks the production
of: (1) litigation financing agreements between CIT and its investors; (2)
communications between CIT or its attorneys and its investors pertaining to the
investment and the negotiation of the financing agreement (including drafts of the
financing agreements); and (3) communications between CIT or its attorneys and its
investors pertaining to this litigation.8


CIT’s interrogatory responses identified Aloe as an investor, and stated that
CIT had no relationship to Aloe prior to January 1, 2007.9 CIT refused to produce any
documents in response to DuPont’s document requests, including the litigationfinancing
agreement between CIT and Aloe (“Financing Agreement”), claiming such
documents are protected as attorney work product and/or subject to attorney/client
privilege and the requests are irrelevant, overly broad and unduly burdensome.10
During the parties’ meet-and-confer process, CIT represetned to DuPont that it
did not assign any part of its claims to Aloe, and that it retains full control over
litigation strategy and settlement.11 CIT claimed that the purpose of this disclosure
was “to put the Court’s, and DuPont’s, mind at ease that nothing remotely improper
has occurred . . . .”12 Rather than ease DuPont’s mind, the disclosures heightened
DuPont’s suspicion that CIT might be engaging in champerty and maintenance.

On October 16, 2013, DuPont filed a motion to compel CIT to produce
documents responsive to its document requests relating to champerty and
maintenance.13 That same day, CIT filed a motion for protective order.14
Following briefing and oral argument, the Court requested that CIT provide a
copy of the Financing Agreement for the Court’s in camera inspection.15 After the
Court completed its in camera inspection of the Financing Agreement, the Court
convened a teleconference, during which it asked CIT to submit a redacted version of
the Financing Agreement for the Court’s in camera review, and advised the parties
that it would likely order CIT to produce a redacted version to DuPont after the
Court’s review.16 The Court further advised that it did not find that the entire
Financing Agreement was attorney work product.17

On February 27, 2014, the Court denied CIT’s motion to compel in part, and
deferred ruling in part.18 The Court denied CIT’s motion “insofar as it seeks a blanket
protective order allowing it to withhold all documents sought by DuPont in
connection with DuPont’s potential champerty and maintenance defenses without
producing a privilege log in accordance with Super. Ct. Civ. R 26(b)(5).”19 The Court
deferred ruling on whether the Financing Agreement constituted champerty and/or


On February 28, 2014, CIT submitted its proposed redactions to the Financing
Agreement for the Court’s in camera inspection as well as a cover letter, explaining
the basis for the redactions.21 CIT purported to redact “the terms regarding the
economics and timing of the financings, as well as terms concerning repayment.”22
On March 6, 2014, the Court ruled on CIT’s proposed redactions, permitting
CIT to make the following redactions: (1) the dollar amount of the three purchase
options that Aloe is entitled to exercise under the Financing Agreement; (2) the
percentage of CIT’s recovery in this litigation (through judgment or settlement) that
Aloe is entitled to; (3) the percentage annual return that Aloe is entitled to if CIT’s
recovery is under a certain figure; and (4) the percentage of CIT’s recovery that its
lead counsel AZA would be entitled to (contingency fee).23 The Court ordered CIT to
produce the redacted version of the Financing Agreement and its privilege log by
March 17, 2014.24 To the extent CIT determined that certain documents were not
privileged, the Court ordered CIT to produce those documents by March 17, 2014.25
CIT produced the redacted version of the Financing Agreement on March 17,
2014, a privilege log and a separate redaction log on March 18, 2014, and a
supplemental privilege and redaction logs on March 19, 2014.26 CIT also produced
approximately 800 pages of documents.27

On June 26, 2014, DuPont filed the instant Renewed Motion to Compel
seeking a version of the Financing Agreement that unredacts the percentages of CIT’s
recovery that Aloe is entitled to, AZA’s contingency fee, and the interest rate Aloe is
entitled to receive on its investment amount in certain circumstances.28

CIT argues that the redacted payment terms are privileged information and not
relevant to whether the Financing Agreement constitutes champerty or maintenance.29
CIT contends that the redacted payment terms are protected by Delaware’s work
product doctrine because disclosure of the payment terms will reveal the mental
impressions of CIT and its attorneys regarding the merits of the litigation.30


According to CIT, Aloe’s percentage of recovery reflects the parties’ assessment of
the risk of the case, an assessment it reached based on the disclosure of core work
product from CIT about the case.31 CIT argues that DuPont cannot overcome the
work production protection because Aloe’s and AZA’s percentage of recovery is not
relevant to champerty or maintenance.32


In response, DuPont argues that the redacted information is not protected by
Delaware’s work product doctrine because Aloe is a third-party investor and the
financing agreement was created in the ordinary course of business.33 According to
DuPont, while the Financing Agreement and the redacted information contained
therein has a connection to the litigation, it does not “deal in any way” with the merits
of the litigation and does not reflect any discussions or strategy or other trial preparation.34
DuPont also argues that even if the redacted information is work product, it
constitutes factual work product and not opinion work product.35 Thus, DuPont
asserts that it can overcome the work product doctrine because it has a substantial
need for the redacted payment terms and cannot obtain the information through other
means.36 DuPont maintains that the redacted percentages of Aloe and AZA’s
potential recovery are necessary to its champerty and maintenance defense because
the percentages will illustrate the extent of the control that Aloe and AZA are
exercising over this litigation, including its implicit control over CIT’s ability to settle
this case.37

As a general rule, “parties may obtain discovery regarding any matter, not
privileged, which is relevant to the subject matter involved in the pending action . . .
.”38 If a party asserts a privilege, that party bears the burden of establishing that
documents or communications are protected by privilege.39

The modern articulation of the work product privilege is traced to the United States Supreme

Court’s opinion in Hickman v. Taylor.40 Superior Court Civil Rule
26(b)(3) codifies the work product doctrine and generally bars the discovery of
materials created in anticipation of litigation or for trial preparation, unless there is a
showing of “substantial need” and “undue hardship.”41 Even when such a showing of
need and undue hardship is made, the doctrine affords nearly absolute protection to
opinion work product, which includes the “mental impressions, conclusions, opinions
or legal theories of an attorney concerning litigation, and all documents prepared by
or for an attorney in anticipation of litigation.”42 Disclosure of opinion work product
is subject to a more stringent standard, and a court will protect opinion work product
unless the requesting party can show that it is directed to the pivotal issue in the
litigation and the need for the information is compelling.43


Under Delaware law, application of the work product doctrine depends upon
the reason why the document was created.44 “Delaware courts have expressly rejected
the primary purpose test, which asks whether the primary purpose of the document
[is] for litigation, in favor of the ‘because of litigation’ test.”45 If the document was
created “because of litigation,” then it is likely privileged.46 “If the document was
created for some other reason, such as a business purpose, then it is likely not
protected.”47 However, “work product protection is not precluded merely because [a]
document may also serve a business function.”48 To receive work product protection,
the dual-purpose document must have been created “because of” the litigation.49
The Court of Chancery of Delaware recently addressed the question of whether
documents prepared by or for a third-party litigation funder and shared between the
funder and a party’s counsel constitute privileged work product under Delaware
law.50 In Carlyle Investment Management L.L.C. v. Moonmouth Company S.A, after a
thorough analysis, the Court of Chancery held that documents concerning the
negotiation of a litigation funding agreement were protected by Delaware’s work
product doctrine because they were “prepared in anticipation of litigation” and more
likely than not included discussions of the merits of the litigation and potential

The Court of Chancery explained that in the context of third-party litigation
funding, the overlap between business and litigation reasons for the creation of
litigation funding documents is more extensive than usual because the litigation itself
is part of the business.52 However, the Court concluded that there is not “anything so
unique about third-party funding as to require a different inquiry than usual in work
product cases,” because “[i]n those instances where a claim cannot proceed without
third-party financing, one element of preparing a client’s case for trial will be
securing the requisite funding, which probably will require discussions of a case’s
merits in an effort to convince the third party to supply the needed funds.”53 The
Court of Chancery expanded on this, explaining that:
Allowing work product protection for documents and communications
relating to third-party funding places those parties that require outside
funding on the same footing as those who do not and maintains a level
playing field among adversaries in litigation. Thus, even though claim
funding is the business of financing lawsuits, which means the
[litigation funding documents] serve a business purpose, those
documents simultaneously also are litigation documents and work
product protection is appropriate.54

In the present case, the payment terms at issue in the Financing Agreement
were prepared in anticipation of litigation and reflect the type of attorney mental
impressions and litigation strategies which are afforded nearly absolute protection
from discovery under the work product doctrine.55

According to CIT, the redacted payment terms reflect an assessment of the risk
of the case, an assessment Aloe and AZA reached based on the disclosure of core
work product from CIT’s attorney’s about the case. To secure financing for the
litigation, CIT would likely need to convince Aloe of the merits of the case and,
therefore, the negotiation process and final payment terms of Aloe’s and AZA’s
percentage of recovery more likely than not required discussions of the merits of the
case and reveal CIT’s attorney’s mental impressions, theories, and strategies about
the case.

Under Delaware law, the redacted payment terms in the Financing Agreement
are entitled to work product protection, and that protection is not precluded merely
because the Financing Agreement may also serve a business function. Furthermore,
DuPont has not satisfied the more stringent pivotal issue/compelling need standard56
to overcome CIT’s opinion work product protection.


For the foregoing reasons, DuPont’s Renewed Motion to Compel is DENIED.


Jan R. Jurden, President Judge

56 See Tackett, 653 A.2d at 262 (“[I]n order to obtain mental impressions under Rule 26(b)(3), the
mental impressions must be directed to the pivotal issue in the current litigation and the need for the
material must be compelling.”).

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