they are scrambling for settlement numbers this out today:
Dear Judge Andrews:
In its May 4, 2018 letter (D.I. 255), ChanBond asserts, for the first time, that “Unified
Online . . . retained CB Capital as a non-testifying expert consultant,” thereby rendering
documents provided to CB Capital immune from production under Rule 26. Id. at 1. Not only
has ChanBond failed to substantiate that position with any evidence, even assuming ChanBond is
correct, the documents are not protected by any privilege.
CB Capital is not a “non-testifying expert consultant.” ChanBond’s assertion that CB Capital
was “retained . . . as non-testifying expert consultant” is unsupported by the record evidence.
Unified Online’s majority shareholder is William Carter, who formerly worked at IP Navigation
alongside ChanBond’s founder, and sole owner, Deirdre Leane. Mr. Carter testified, as Unified
Online’s corporate representative, that CB Capital was hired because
Ex. T (Carter Tr.) at 186:6-184:2. The valuation
cover letter states that
D.I. 253, Ex. J (UNIFIED_000001-2) at 2
(emphasis added). And CB Capital’s engagement letter states that
” Ex. U (CBCAP_000129). CB
Capital’s website describes the company as a “specialized investment banking firm.” Ex. V (CB
Capital Website). ChanBond’s new assertion that CB Capital is a non-testifying expert
consultant is completely unsubstantiated.
ChanBond’s cited In re PolyMedica is inapposite. There, the financial firm PWC had
been retained “to assist in [the law firm’s] giving legal advice to [its] Client by providing the
services.” In re PolyMedica Corp. Sec. Lit., 235 F.R.D. 28, 31 (D. Mass 2006). In contrast, CB
Capital was retained to provide business advice to Unified Online’s Board of Directors, and the
engagement makes no reference to assisting in giving any legal advice in anticipation of any
litigation.
Even if CB Capital is a non-testifying expert, its documents must still be produced. Even
assuming CB Capital should be afforded non-testifying expert consultant status (which it should
not), the documents provided to CB Capital are not privileged, and must still be produced. As
ChanBond admits, CB Capital was retained by ChanBond’s owner, Unified Online, who is not a
party to this action. D.I. 255 at 3. This Court has previously explained that Fed. R. Civ. P.
26(b)(4)(D) protection does not apply when the information sought is held by an expert retained
by a non-party to the litigation, such as the litigant’s parent. Delaware Display Group LLC v.
Lenovo Group Ltd., C.A. No. 13-2112-RGA, 2016 WL 720977, at *3-4 (D. Del. Feb. 23, 2016)
(“Neither the text nor the policy of the [non-testifying expert] Rule applies to a situation where a
party seeks protection of documents prepared by a ‘consultant’ on behalf of a non-party”). Here,
just as in Delaware Display, the entity that retained CB Capital is the Plaintiff’s non-party
parent, Unified Online. Accordingly, the documents provided to CB Capital cannot qualify for
protection under Fed. R. Civ. P. 26(b)(4)(D) and should be produced.
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