inTEAM Associates, LLC v. Heartland Payment Systems, Inc.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
Date Submitted: June 25, 2019
Date Decided: June 26, 2019
David E. Wilks, Esquire Jeffrey L. Moyer, Esquire
Thad J. Bracegirdle, Esquire Travis S. Hunter, Esquire
Andrea S. Brooks, Esquire Nicole K. Pedi, Esquire
Wilks, Lukoff & Bracegirdle, LLC Richards Layton & Finger, P.A.
4250 Lancaster Pike, Suite 200 920 N. King Street
Wilmington, DE 19805 Wilmington, DE 19801
Re: inTEAM Associates, LLC v. Heartland Payment Systems, Inc.,
Civil Action No. 11523-VCMR
Dear Counsel:
On December 18, 2018, the Delaware Supreme Court remanded this action to
permit the Court to resolve the Renewed Motion to Show Cause filed pursuant to Court
of Chancery Rule 70(b) by inTEAM Associates, LLC (“inTEAM”). On remand,
inTEAM served discovery requests on Heartland Payment Systems LCC (“Heartland”).
In response, Heartland filed a Motion for a Second Protective Order and for Attorneys’
Fees. Heartland’s motion is DENIED.
This Court has broad discretion in managing discovery and evidentiary hearings in
proceedings before it. 1 A Rule 70(b) motion requires the parties to present their
1
Ct. Ch. R. 7(b) (hearing schedule decisions are subject to the discretion of the court);
Carlton v. Zepski, 180 A.3d 42 (Del. 2018) (“A trial judge has broad discretion . . . to
schedule hearings.”); Fish Eng’g Corp. v. Hutchinson, 162 A.2d 722, 725 (Del. 1960)
(“The Court has broad discretion in determining whether or not to allow discovery” under
Court of Chancery rules); NiSource Capital Mkts., Inc. v. Columbia Energy Gp., 1999
WL 959183, at *1 (Del. Ch. Sept. 24, 1999) (“[T]he application of the discovery rules is
inTEAM Associates, LLC v. Heartland Payment Systems, Inc.
C.A. No. 11523-VCMR
June 26, 2019
Page 2
“evidence at a show cause hearing . . . as at trial . . . .” 2 This Court has permitted
discovery in advance of a Rule 70(b) hearing where the movant persuaded the Court that
such discovery was “reasonable and necessary” to meet its burden. 3 inTEAM has
produced affidavits demonstrating that discovery on its Rule to Show Cause Motion is
“reasonable and necessary.” 4 The parties, therefore, shall confer on a schedule permitting
narrow discovery limited to the issues raised by inTEAM’s Rule to Show Cause Motion.
IT IS SO ORDERED.
Very truly yours,
/s/ Kathaleen St. Jude McCormick
Vice Chancellor
KSJM/lef
subject to the exercise of the Court’s sound discretion.”); ASX Inv. Corp. v. Newton, 1994
WL 178147, at *3 (Del. Ch. May 3, 1994) (“[T]he court, may, at its discretion, hold an
evidentiary hearing . . . .”).
2
Atlas Sanitation Co., 1988 WL 88494, at *3 (Del. Ch. Aug. 17, 1988). See also Eagle
Force Hldgs., LLC v. Campbell, 187 A.3d 1209, 1227 (Del. 2018) (recognizing that the
trial court held several evidentiary hearings on motions for contempt); In re Indem. Ins.
Corp., RRG., 2014 WL 31710, at *1 (Del. Ch. Jan. 2, 2014) (conducting an evidentiary
hearing on an order to show cause where “the parties introduced documentary evidence
and presented live witness testimony”); Aveta Inc. v. Bengoa, 986 A.2d 1166, 1171 (Del.
Ch. 2009) (deciding a rule to show cause on a written record and making factual findings
“as if after trial”).
3
Kolyba Corp. v. Banque Nationale de Paris, 316 A.2d 585, 587 (Del. Ch. 1973).
4
See generally C.A. No. 11523-VCMR Docket (“Dkt.”) 266, Affs. of Lei Ditch, Michael
Sawicky, and Lawrence Goodman, III in Supp. of Pl.’s Opp’n to Def.’s Mot. for a
Second Protective Order and for Attys. Fees; Dkt. 237, Aff. of Kimberly Coleman in
Supp. of Pl.’s Br. in Supp. of its Renewed Mot. for Rule to Show Cause.