Itron, Inc. v. Consert, Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
ITRON, INC., as successor-in-interest to )
SMARTSYNCH, INC., )
)
Plaintiff, )
)
v. ) C.A. No. 7720-VCL
)
CONSERT INC., )
)
Defendant. )
OPINION
Date Submitted: January 14, 2015
Date Decided: January 15, 2015
Raymond J. DiCamillo; Kevin M. Gallagher, RICHARDS LAYTON & FINGER P.A.,
Wilmington, Delaware; Adam H. Offenhartz, Nancy Hart, Laura K. O‘Boyle, Lindsey D.
Schmit, GIBSON, DUNN & CRUTCHER, LLP, New York, New York; Attorneys for
Plaintiff Itron, Inc.
Stephen C. Norman, T. Brad Davey, John A. Sensing, POTTER ANDERSON &
CORROON LLP, Wilmington, Delaware; Joel D. Bush, II, Stephen E. Hudson, Jason M.
Wenker, KILPATRICK TOWNSEND & STOCKTON LLP, Atlanta, Georgia; Attorneys
for Defendant Consert Inc.
LASTER, Vice Chancellor.
Plaintiff Itron, Inc. and defendant Consert, Inc. are parties to a Development
Agreement dated April 25, 2012 (the ―Development Agreement‖). Consert claims Itron
owes it approximately $60 million under the Development Agreement. Itron seeks a
declaration that it does not owe Consert anything. To the extent the Development
Agreement calls for a payment, Consert seeks reformation to eliminate it.
A five-day trial is approaching. On December 11, 2014, pursuant to an agreed-
upon schedule, the parties filed a Joint Pretrial Stipulation and [Proposed] Order (the
―Proposed Order‖). It identified fifteen facts as admitted and not requiring proof at trial
(―Admitted Facts‖).
Itron believes that Consert should have agreed to additional Admitted Facts,
including (i) facts Consert admitted in its answer, (ii) facts Consert admitted in response
to requests for admissions, and (iii) facts drawn from Consert‘s sworn interrogatory
responses. Itron also believes that Consert did not engage in good faith negotiations over
additional Admitted Facts. Itron has moved to have the court declare that certain facts are
Admitted Facts and to require Consert to meet and confer in good faith about additional
Admitted Facts. The motion is granted.
I. FACTUAL BACKGROUND
The record in this case is large. Discovery lasted approximately two years. The
parties exchanged over 55,000 pages of documents, responded to more than 300
interrogatories and requests for admission, and deposed twenty-eight fact witnesses and
four expert witnesses. Each side will have fifteen hours of trial time. To present this
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matter efficiently and effectively requires that counsel cooperate as officers of the court
and not waste time on issues not legitimately in dispute.
On November 21, 2014, Itron provided Consert with an initial draft of the
Proposed Order that included one hundred sixty-four Admitted Facts. Itron anticipated
that Consert would strike some of the proposed Admitted Facts, edit others, and add
Admitted Facts of its own. Instead, when Consert returned a redlined draft of the
Proposed Order on December 4, 2014, Consert had deleted, entirely or in substantial part,
approximately 90% of the proposed Admitted Facts, including many facts that Consert
had admitted in its answer and responses to requests for admission, or which came from
Consert‘s verified interrogatory responses. Consert struck even benign and undisputed
facts such as the dates on which drafts of documents were exchanged.
Itron invited Consert to meet and confer about the proposed Admitted Facts, and
the parties held three sessions supplemented by written correspondence. During the
sessions, Consert explained that it had deleted many of the proposed Admitted Facts not
because they were disputed, but rather because Consert regarded them as irrelevant, or
because Consert believed that other facts or evidence should be presented along with the
proposed Admitted Facts. Despite striking many of Itron‘s proposed Admitted Facts as
purportedly irrelevant, Consert addressed the same or similar issues in its statement of the
case or in proposed Admitted Facts of its own.
On December 11, 2014, Itron provided Consert with a revised draft of the
Proposed Order that removed more than seventy of the Admitted Facts that Itron
originally proposed. Rather than responding to this constructive effort, Consert refused to
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engage in any discussions. Consert identified just sixteen rudimentary background facts
to which it would agree, claiming an ―advocacy interest‖ in forcing everything else to be
addressed at trial.
Itron filed the Proposed Order. Then Itron filed its motion.
II. LEGAL ANALYSIS
―Rule 16 governs pretrial procedure and management . . . . [and] provides
authority for the pretrial conference. The pretrial conference and order [are] designed to
familiarize the litigants with the issues in the case[,] reduce surprises at trial[,] and
facilitate the overall litigation process.‖ Cebenka v. Upjohn Co., 559 A.2d 1219, 1222
(Del. 1989). Rule 16 provides, in pertinent part, as follows:
(b) In any action that is to be tried, unless the Court otherwise directs, a
pretrial conference shall be held . . . . [B]efore the pretrial conference,
counsel shall submit to the Court . . . a pretrial order which shall meet the
requirements of paragraph (c) of this Rule. Counsel shall confer in good
faith effort to stipulate to the contents of the pretrial order. To the extent
that counsel are unable to agree upon the contents of the pretrial order, each
attorney (or party not represented by an attorney) shall submit to the Court
a proposed pretrial order that shall indicate the areas of disagreement.
(c) Except to the extent that the Court orders otherwise, all pretrial orders
shall include the following information:
...
(2) A statement of the facts which are admitted and required1 no
proof.
1
Rule 16 indeed uses ―required‖ in the past tense. This strikes me as a
typographical or editorial error, likely triggered by the verb‘s proximity to the past
participle ―admitted.‖ In the rule, ―admitted‖ is used as an adjective to describe the
present state of the facts. Facts which ―are admitted‖ (present tense) ―require no proof‖ at
trial (present tense). Or because the trial will happen in the future, the rule might say that
3
Ch. Ct. R. 16 (emphasis and footnote added).
Consert correctly observes that the court cannot order Consert to stipulate to facts
that are not actually ―admitted and required no proof.‖ Id. ―[A] stipulation is voluntary.‖2
―On its face, Rule 16 . . . does not authorize a court to force parties to stipulate facts to
which they will not voluntarily agree.‖ J.F. Edwards Const. Co. v. Anderson Safeway
Guard Rail Corp., 542 F.2d 1318, 1322 (7th Cir. 1976). Parties may decide to stipulate to
facts that are not otherwise admitted or beyond dispute, or they may concede otherwise
contested legal issues such as liability, but those are matters of legal strategy for the
parties.
[T]he court is not to substitute its judgment for the parties on strategy . . . .
[A]lthough the court has the power to request the parties to consider
whether to stipulate as to the undisputed facts, it cannot order them to
stipulate as to certain facts. That decision should be within the parties‘
control.
6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, FEDERAL PRACTICE &
PROCEDURE § 1525.1 (2008). Because a stipulation is voluntary, the concept of a
compelled stipulation is inherently contradictory.
facts which ―are admitted‖ (present tense) ―will require no proof‖ at trial (future tense).
What does not make sense, at least to me, is ―required.‖ But to conform to the rule, this
decision maintains that usage.
2
Tequila Centinela, S.A. v. Bacardi & Co., Ltd., 242 F.R.D. 1, 4 (D.D.C. 2007)
(internal quotation marks omitted). The Tequila case interpreted Rule 16 of the Federal
Rules of Civil Procedure. ―Decisions interpreting the Federal Rules of Civil Procedure
are usually of great persuasive weight in the construction of parallel Delaware rules.‖
Cede & Co. v. Technicolor, Inc., 542 A.2d 1182, 1191 n.11 (Del. 1988). In addition to the
Tequila case, this decision relies on other authorities interpreting the federal version of
Rule 16.
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What a court can do is determine that particular facts have been admitted or are
otherwise beyond legitimate dispute. A court can base such a determination on the
discovery record or on statements made by counsel during the pretrial conference.
The pretrial conference should not be viewed as merely an informal
meeting at which those involved can act without concern for future
consequences. If the conference is to be a useful tool, all participants must
be fully aware of the possible effects the pretrial hearing may have on the
trial. When the final conference is held after the discovery process is
completed, shortly before trial, counsel presumably have identified virtually
all of the evidence relating to their cases. Thus, it would not be
unreasonable to hold them to the statements they make and the agreements
they enter into at the conference or restrict their proof at trial to the issues
set forth in the pretrial order.
Id. § 1527. ―Courts generally hold stipulations, agreements, or statements of counsel
made at the pretrial conference binding for purposes of the trial.‖ Id. (citations omitted).
―[A] court also may relieve counsel from any statement or stipulation made during a
conference in order to prevent injustice.‖ Id.
There is nothing unique or unprecedented about the ability of a court to make a
pretrial determination that a particular fact has been admitted or is not legitimately
subject to dispute. Courts make such determinations when evaluating whether ―there is
no genuine issue‖ as to a particular fact for purposes of summary judgment. See Ch. Ct.
R. 56(c). In addressing a motion for summary judgment, the court
shall if practicable ascertain what material facts exist without substantial
controversy and what material facts are actually and in good faith
controverted. It shall thereupon make an order specifying the facts that
appear without substantial controversy . . . . Upon the trial of the action the
facts so specified shall be deemed established, and the trial shall be
conducted accordingly.
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Ch. Ct. R. 56(d). A court similarly can adjudicate Admitted Facts for purposes of the
pretrial order.3 Rule 16 contemplates this type of determination by noting that if the
parties cannot agree on the contents of a section of the pretrial order, ―each attorney (or
party not represented by an attorney) shall submit to the Court a proposed pretrial order
that shall indicate the areas of disagreement.‖ Ch. Ct. R. 16(b). The submission of
competing forms of orders anticipates a determination by the court.
3
See Fed. Deposit Ins. Corp. v. Glickman, 450 F.2d 416, 419 (9th Cir. 1971)
(explaining that federal version of Rule 16 should be utilized ―with a view toward sifting
the issues in order that the suit will go to trial only on questions involving honest disputes
of fact or law‖); Lynch v. Call, 261 F.2d 130, 132 (10th Cir. 1958) (―The salutary, indeed
the desirable and efficacious, purpose of a pretrial conference is to sift the discovered and
discoverable facts to determine the triable issues, both factual and legal, and to chart the
course of the lawsuit accordingly.‖); cf. Holcomb v. Aetna Life Ins. Co., 255 F.2d 577,
580 (10th Cir. 1958) (―A pre-trial conference is more than a mere conference at which the
court seeks to eliminate groundless allegations or denials and the court has the power to
compel the parties to agree to all facts concerning which there can be no real issue.‖),
cert. denied, 358 U.S. 879 (1958); Berger v. Brannan, 172 F.2d 241, 243 (10th Cir. 1949)
(―The spirit of a pre-trial procedure is not only to call the parties together and ask them to
stipulate as to all matters concerning which there can be no dispute, but to compel them
to stipulate . . . .‖), cert. denied, 337 U.S. 941 (1949). The Holcomb and Berger rulings
have been criticized for speaking in terms of ―compel[ling] the parties to agree,‖ which
employs the oxymoronic concept of an involuntary stipulation. See Colon v. Walgreens
de San Patricio, Inc., 269 F.R.D. 165, 168-69 (D.P.R. 2010). I believe both cases are
better understood as recognizing that a court has the power to hold that certain facts are
admitted or cannot be controverted in good faith. Such an approach ―furthers the Rule 16
policy of limiting the trial to those issues that are actually in dispute without impairing
the basic rights of the litigants.‖ Wright & Miller, supra, § 1527. The current federal
version of Rule 16 confirms this power by stating that during the pretrial conference, the
court may consider ―obtaining admissions and stipulations about facts and documents‖ so
as to avoid unnecessary proof. Fed. R. Civ. P. 16(c)(2)(C); see Wright & Miller, supra, §
1525 (explaining that enumeration of specific subjects in current federal rule confirmed
pre-existing authority and was designed to encourage courts to address those subjects).
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In this case, the court previously declined to grant the parties leave to move for
summary judgment because their submissions had identified numerous disputes of fact.
Dkt. 282. That ruling did not mean that every conceivable fact about the case was
disputed. To the contrary, the existence of material disputes of fact means that the parties
should focus their trial time on those disputes of fact, rather than wasting resources by
refusing to recognize that other facts are admitted or not legitimately subject to dispute.
A. Admissions In The Answer
Itron has cited as Admitted Facts matters that Consert admitted in its answer.
These matters constitute Admitted Facts, and Consert should not have objected to their
inclusion in the Proposed Order.
―The final pleadings upon which the case is tried state the contentions of each
party as to the facts, and by admitting or denying the opponent‘s pleading, they define the
factual issues that are to be proved.‖ Kenneth S. Baron, 2 McCormick on Evid. § 257 (7th
ed.). ―They are used as judicial and not as evidentiary admissions, and they are
conclusive until withdrawn or amended.‖ Id.; see In re Foxmeyer Corp., 286 B.R. 546,
567-68 (Bankr. D. Del. 2002) (treating statements in pleadings as binding judicial
admissions).
When the term admission is used without any qualifying adjective, the
customary meaning is an evidentiary admission, that is, words in oral or
written form or conduct of a party or a representative offered in evidence
against the party. Evidentiary admissions are to be distinguished from
judicial admissions. Judicial admissions are not evidence at all. Rather, they
are formal concessions in the pleadings in the case or stipulations by a party
or counsel that have the effect of withdrawing a fact from issue and
dispensing wholly with the need for proof of the fact. Thus, a judicial
admission, unless allowed by the court to be withdrawn, is conclusive in the
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case, whereas an evidentiary admission is not conclusive but is subject to
contradiction or explanation.
2 McCormick on Evid. § 254 (footnotes omitted).
The following proposed Admitted Facts were based upon admissions in Consert‘s
answer, so Consert‘s refusal to stipulate to these facts was not in good faith:
● ―Smart meters (also referred to as advanced metering infrastructure
or ‗AMI‘) utilize a two-way communications module embedded in
the meter and provide additional functionality beyond remote
collection of meter data.‖
● ―SmartSynch‘s smart meters utilized cellular networks to enable
two-way communications.‖
● ―In 2010, SmartSynch entered into preliminary discussions with
Consert, regarding a potential venture between the companies.
SmartSynch and Consert sought to explore options that would
integrate SmartSynch‘s cellular solutions and Consert‘s energy
management applications.‖
This decision finds that each of these statements is an Admitted Fact.
Other proposed Admitted Facts drew on admissions in Consert‘s answer to such a
degree that Consert could not have acted in good faith by rejecting them in their entirety.
To proceed in good faith, Consert had an obligation to accept the portion drawn from its
answer and then confer with Itron about any disagreements over phrasing. This decision
finds that each of the following statements is an Admitted Fact.
● ―The comment ‗We need to have some further discussions on this
[Pricing]. I‘m not clear on what the market will bear, and we
probably need to discuss this F2F so I have a clear understanding of
the pricing model and how it applies‘ first appeared in SmartSynch‘s
initial revisions and comments to the first draft of the Contract,
which was received by Consert from Gary Kessler.‖
● ―Moore and Kessler then exchanged two additional drafts of the
Contract, which contained further redlined changes, as well as
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responses to many of Kessler‘s questions, comments and proposed
revisions.‖
● ―On or about June 29, 2012, Consert submitted an invoice to Itron in
the amount of $3,000,000.00. The ‗description‘ field on the Invoice
states ‗License fees per executed Development, Supply and
Commercialization Agreement – 4-25-12 (Exhibit C – Pricing).‘ The
invoice lists a ‗due date‘ of July 14, 2012.‖
B. Reponses To Requests For Admissions
Itron next cites as Admitted Facts matters that Consert admitted in its responses to
requests for admissions served pursuant to Rule 36. These matters also constitute
Admitted Facts to which Consert should not have objected.
An admission that results from a request served pursuant to Rule 36 ―may be used
by a party adverse to the party who made the admission as if it had appeared in a
pleading.‖ Wright & Miller, supra, § 2264. ―Any matter admitted under this Rule is
conclusively established unless the Court on motion permits withdrawal or amendment of
the admission.‖ Ch. Ct. R. 36(b).
The salutary function of Rule 36 in limiting the proof would be defeated if
the party were free to deny at the trial what he or she has admitted before
trial . . . . A judicial admission, deliberately drafted by counsel for the
express purpose of limiting and defining the facts in issue, is traditionally
regarded as conclusive, and an admission under Rule 36 falls into this
category.
Wright & Miller, supra, § 2264 (footnotes omitted).
The following proposed Admitted Facts were based upon statements in Consert‘s
responses to requests for admissions:
● ―SmartSynch and/or Itron have not submitted any Orders, as defined
in the Development Agreement, to Consert.‖
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● ―Consert did not disclose to SmartSynch the existence of any dispute
with Mr. Forbes prior to the execution of the Development
Agreement.‖
Consert did not identify any grounds for withdrawing or amending its admissions. This
decision finds that each of these statements is an Admitted Fact.
Other proposed Admitted Facts drew on statements in Consert‘s responses to the
requests for admissions to such a degree that Consert could not have acted in good faith
by rejecting them in their entirety. To proceed in good faith regarding these proposed
Admitted Facts, Consert had an obligation to identify grounds for withdrawing or
amending its admissions. Having not done so, Consert had an obligation to accept the
portion drawn from the associated admission and then to confer with Itron about any
difference in phrasing. This decision finds that each of the following statements is an
Admitted Fact:
● ―Development of the contemplated Solution has not been
completed.‖
● ―Consert has not delivered the Program, as defined in the
Framework Agreement, to SmartSynch and/or Itron.‖
● ―At the time Consert executed the Contract, Consert was aware of
the existence of an employment dispute with Joseph Forbes in which
Mr. Forbes asserted the existence of a contract dispute between
himself and Consert as to the assignment of certain patent
applications.‖
C. Statements In Interrogatory Responses
Itron also cites as Admitted Facts statements Consert made in verified responses to
interrogatories served under Rule 33. Interrogatories are evidentiary and ―may be used to
the extent permitted by the rules of evidence.‖ Ch. Ct. R. 33(c). ―Although interrogatory
10
answers—like other discovery responses—may properly limit issues and foreclose
avenues of proof, those consequences should only follow when appropriate.‖ Wright &
Miller, supra, § 2181.
Answers to interrogatories, as adjuncts to the pleadings, do limit the issues
and define the contentions of the parties, but under ordinary circumstances
it is not their function to limit a party‘s proof in the way that pleadings do.
So far as interrogatories require the production of information, parties must
disclose whatever information they have as of the time of the demand by
the interrogatories. However, the parties should not be bound by these
answers, if in the interim between the time of the answers and the trial, they
obtain by subsequent investigation new or additional facts. The parties will
not be prevented from offering this further information on trial.
McElroy v. United Air Lines, Inc., 21 F.R.D. 100, 102 (W.D. Mo. 1957).
Statements in interrogatory responses thus do not, by themselves, constitute
Admitted Facts. But a statement in an interrogatory can be found to constitute an
Admitted Fact if it is not legitimately subject to dispute. Interrogatory responses are
supposed to be accurate. Like responses to requests for admission, they typically are
prepared carefully by counsel. Parties verify them under oath. Ch. Ct. R. 33(b)(2). If a
party later obtains new or additional information, then the party may have a duty to
amend, supplement, or update the interrogatory response.
A party is under a duty seasonably to amend a prior response if the party
obtains information upon the basis of which (A) the party knows that the
response was incorrect when made, or (B) the party knows that the
response though correct when made is no longer true and the circumstances
are such that a failure to amend the response is in substance a knowing
concealment.
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Ch. Ct. R. 26(e)(2). A statement in an interrogatory response therefore carries
considerable dignity and is something on which an opposing party and the court
reasonably can rely.
When determining whether a statement in a party‘s sworn interrogatory response
should be treated as an Admitted Fact for purposes of trial, the court may consider the
clarity of the statement, the reasons given by the party for not being held to the statement,
and any evidence the party indicates that it has or will introduce at trial to contradict the
statement. The court also may consider factors such as the importance of the issue to the
case, the narrowness or breadth of the statement, and any implications that an Admitted
Fact would have for the burdens of proof or persuasion. See Briggs v. Dalkon Shield
Claimants Trust, 174 F.R.D. 369, 373 (D. Md. 1997) (discussing similar factors). A
sworn interrogatory response that clearly provided an item of historic information or a
background fact about a party or the dispute can be treated more readily as an Admitted
Fact than a hedged position about a contested issue. Often interrogatory responses
include pertinent yet widely available background information which, if not for its case-
specific nature, would resemble the type of knowledge suitable for judicial notice. See
D.R.E. 201. A statement in a sworn interrogatory response providing information of this
type may also be suitable for treatment as an Admitted Fact.
Consert identified proposed Admitted Facts based upon clear statements of case-
specific historical fact drawn from Itron‘s verified interrogatory responses. To confer in
good faith regarding these proposed Admitted Facts, Consert had an obligation to identify
any good faith basis it might have to withdraw, modify, or otherwise dispute the relevant
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part of its prior interrogatory responses. Absent grounds for doing so, Consert should
have accepted the portion of the proposed Admitted Fact drawn from the associated
interrogatory response and conferred with Itron about any disagreements over phrasing.
This decision finds that each of the following statements is an Admitted Fact:
● ―As of April 30, 2012, Consert‘s VPP had been deployed at 1,993
endpoints (i.e. residential or small customers of utilities).‖
● ―As of August 31, 2013, Consert‘s VPP had been deployed at 14,031
endpoints.‖
● ―Over the ensuing months, the parties spoke via telephone and had
several in-person meetings to discuss the potential venture.‖
● ―Ravi Raju and Roy Moore spoke via telephone regarding the
technical path to integration of Consert‘s software onto
SmartSynch‘s hardware.‖
● ―In or around September 2011, Consert entered into the License and
Reseller Agreement for Hosted Application between Consert and
General Electric Company (the ‗GE Agreement‘).‖
● ―In 2012, Consert discussed ‗white label‘ agreements with several
companies that included minimum license commitments and
prepayment obligations. These companies included ABB, Cooper,
Landis+Gyr, Siemens and Verizon.‖
● ―On January 26, 2012, SmartSynch and Consert representatives met
during the DistribuTech conference.‖
● ―On February 8, 2012, Mr. Kessler and Mr. Moore spoke by
telephone and agreed to use the DOU as a starting point and make
modifications to that document.‖
● ―On February 16, 2012, Mr. Kessler sent Mr. Moore a draft
Partnership Understanding between Consert and SmartSynch.‖
● ―On 2/17/12 Gary Kessler and Roy Moore met in Grapevine, TX to
discuss the partnership.‖
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● ―On February 23, 2012, Consert‘s Gini Coyle sent the first draft of
the Development Agreement to SmartSynch‘s Gary Kessler.‖
● ―At the time the instant litigation was filed, Consert had not
delivered any software and/or support services to SmartSynch, Itron,
or any Solution Customers.‖
● ―The focus of the discussion on 3/12/12 was Kessler‘s concerns
about ownership of intellectual property to be developed during the
course of the Consert/SmartSynch partnership.‖
● ―At the time that the Development Agreement was executed,
Consert was committed to utilizing any and all of its intellectual
property in development of a Proposed Solution in connection with
the Development Agreement.‖
● ―Roy Moore, Jack Roberts and Virginia Coyle learned of the Forbes
dispute in October 2011. The Board of Directors was first apprised
of the Forbes dispute in October 2011.‖
D. Other Facts
Itron‘s original draft of the Proposed Order identified a number of other facts
which, if deemed admitted, would streamline the trial. Itron has established that Consert
failed to meet and confer in good faith regarding Itron‘s proposals. Although Consert‘s
counsel conferred on three occasions with Itron‘s counsel and exchanged written
communications, Consert‘s counsel participated in the process with the mindset of an
entrenched adversary, hostile to the prospect of agreement.
Consert has offered several justifications for its combative and closed-minded
stance. First, Consert claims that Itron‘s proposed statements of fact were ―written from
Itron‘s advocacy perspective.‖ Opp. at 2. A disinterested review does not support that
characterization. To the extent some of the proposed statements could have been made
more balanced, Consert should have proposed edits.
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Second, Consert has argued that Itron took presented facts ―out of context.‖ Id. at
2. From Consert‘s perspective, this apparently means without the context of every piece
of evidence that Consert might present at trial, together with Consert‘s explanation of the
evidence. Of course context matters. But facts remain facts. If Consert sent a draft of a
document to Itron by email on a particular date, and no one has any basis to disagree that
the document was sent by email on that date, then that is a fact. The parties may argue
about the implications of that fact. They may present evidence at trial to establish related
facts. They may argue in their post-trial briefs and during post-trial argument about how
the court should view that fact in the context of all of the evidence. But the sending of the
document, the date on which it was sent, and the means by which it traveled are not
subject to legitimate dispute.
Third, Consert claims that ―some of the ‗facts‘ are inadmissible (and the subject of
a pending motion in limine), and many others are the subject of disputes about relevance
and materiality.‖ Id. at 3. None of these objections undercuts their status as facts. Nor
does accepting a fact as not legitimately subject to dispute foreclose a party from arguing
that the court should not consider that fact or give it little to no weight. Trials in the Court
of Chancery are bench trials. Consert‘s motion in limine and its arguments about
relevance and materiality rest on the premise that the judge can disregard or give the
appropriate degree of weight to particular evidence. A judge can as readily disregard or
give the appropriate degree of weight to a fact.
None of Consert‘s positions justified its reactionary response to Itron‘s efforts to
streamline the presentation at trial through Admitted Facts. Consert revealed its hostility
15
to Itron‘s efforts most clearly by its flat refusal to engage in discussion regarding the
substantially reduced number of Admitted Facts that Itron included in its second draft of
the Proposed Order. Rather than conferring, Consert broke off discussions and said it
would accept only sixteen rudimentary background facts. It is inconceivable that after
two years of discovery, there are only sixteen facts not legitimately subject to dispute.
Given Consert‘s behavior and proffered excuses, the court is forced to conclude
that Consert did not confer in good faith as required by Rule 16. As a retrospective
remedy, Consert shall pay the attorneys fees and expenses incurred by Itron relating to (i)
the preparation of the Proposed Order, including the time spent meeting and conferring
about the Proposed Order and (ii) briefing and arguing the current motion.
As a prospective remedy, the parties shall meet and confer in good faith regarding
Admitted Facts. Consert‘s two most senior non-Delaware lawyers and its two most senior
Delaware lawyers shall meet and confer in person with their counterparts from Itron. In
advance of the meeting, Consert‘s counsel shall provide a written response addressing
each of the proposed facts in Itron‘s second draft of the Proposed Order. The response to
each proposed fact shall state whether Consert disputes the proposed fact. If the fact is
disputed, then Consert‘s counsel shall explain in terms specific to that proposed fact why
it is disputed or stated inaccurately. If Consert‘s counsel contends that a fact is contested,
the response shall identify the evidence on which Consert relies. During the in-person
meeting, the senior lawyers shall review, one by one, each of the items and attempt to
reach agreement. A court reporter shall transcribe the meeting.
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After the meet-and-confer session, the parties shall file a supplemental stipulation
identifying any agreed-upon Admitted Facts. In addition, Itron may file a proposed form
of order identifying proposed Admitted Facts, citing the source of each proposed
Admitted Fact, explaining why the court should deem it admitted or otherwise not
requiring proof at trial, and addressing the grounds for opposition presented by Consert
during the meet-and-confer session. Consert may respond, but may not advance any
grounds for opposition not raised during the meet-and-confer session.
III. CONCLUSION
Itron‘s motion is granted. The parties shall proceed in accordance with this
opinion.
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