Itron, Inc. v. Consert, Inc.
109 A.3d 583
| Del. Ch. | 2015Background
- Itron (successor to SmartSynch) and Consert are parties to a Development Agreement; Itron seeks a declaration it owes nothing and Consert asserts ~ $60 million claim. A five‑day bench trial was scheduled after ~2 years of discovery.
- Under Court of Chancery Rule 16 the parties were to submit a Joint Pretrial Stipulation identifying facts admitted and requiring no proof ("Admitted Facts").
- Itron submitted an initial proposed pretrial order with 164 proposed Admitted Facts; Consert struck roughly 90% of them (including matters it had earlier admitted in its pleadings or discovery responses).
- The parties met and conferred multiple times; Consert rejected many proposed facts as irrelevant or premature and ultimately refused further discussion, offering only 16 background facts.
- Itron moved for a court declaration that specified facts were Admitted Facts and for an order requiring Consert to meet and confer in good faith; Itron also sought fees for the dispute about the pretrial order.
- The court (Vice Chancellor Laster) examined the interplay of Rule 16 and discovery admissions and found many proposed statements derived from Consert’s answer, Rule 36 admissions, or verified interrogatory answers were properly treated as Admitted Facts; the court ordered sanctions and a structured in‑person meet‑and‑confer procedure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court may determine that particular facts are "admitted" or not legitimately subject to dispute for the pretrial order | Court can and should deem facts admitted where supported by pleadings or discovery; many of Consert's own prior statements should be listed as Admitted Facts | Rule 16 does not authorize the court to force stipulations; stipulations are voluntary and facts not truly admitted cannot be compelled | Court may determine that particular facts are admitted or not legitimately disputable based on pleadings and discovery and may so order them for pretrial purposes |
| Whether facts asserted by Itron that mirror Consert’s answer or judicial admissions must be treated as Admitted Facts | Statements in Consert’s answer are judicial admissions that withdraw those facts from issue and thus should be included as Admitted Facts | Consert objected to inclusion but did not identify grounds to withdraw or amend those pleadings | Court held that specific statements drawn from Consert’s answer are Admitted Facts and Consert’s refusal was not in good faith |
| Whether matters admitted in Consert’s Rule 36 responses and verified interrogatory answers can be treated as Admitted Facts | Admissions under Rule 36 are conclusively established unless formally withdrawn; sworn interrogatory responses also merit treatment as admitted where not legitimately disputable | Consert asserted relevance, admissibility, or context objections and did not identify grounds to amend/withdraw discovery admissions | Court held Rule 36 admissions cited by Itron are Admitted Facts; verified interrogatory statements can be Admitted Facts when clear, historical, and not legitimately controverted |
| Whether Consert met-and-conferred in good faith and what remedies are appropriate | Itron argued Consert acted in bad faith by wholesale striking proposed facts and refusing meaningful negotiation; sought fees and an order mandating a structured in‑person meet-and-confer | Consert defended its positions as strategic, relevant, or subject to pending evidentiary objections and declined further negotiations | Court found Consert did not meet-and-confer in good faith, awarded fees to Itron for work on the Proposed Order, and ordered a detailed in‑person meet‑and‑confer process with senior counsel and a court reporter, with limits on later argument not raised in that session |
Key Cases Cited
- Cebenka v. Upjohn Co., 559 A.2d 1219 (Del. 1989) (discusses purpose and authority of Rule 16 pretrial conference)
- Cede & Co. v. Technicolor, Inc., 542 A.2d 1182 (Del. 1988) (federal Rule 16 decisions are persuasive in construing Delaware rules)
- J.F. Edwards Const. Co. v. Anderson Safeway Guard Rail Corp., 542 F.2d 1318 (7th Cir. 1976) (court cannot force parties to stipulate facts they will not voluntarily admit)
- Tequila Centinela, S.A. v. Bacardi & Co., Ltd., 242 F.R.D. 1 (D.D.C. 2007) (treatment of admissions under federal Rule 16)
- Fed. Deposit Ins. Corp. v. Glickman, 450 F.2d 416 (9th Cir. 1971) (Rule 16 used to sift issues and limit trial to genuine disputes)
- Lynch v. Call, 261 F.2d 130 (10th Cir. 1958) (pretrial conference purpose to identify triable issues)
- Holcomb v. Aetna Life Ins. Co., 255 F.2d 577 (10th Cir. 1958) (court may compel parties to agree on matters lacking real dispute)
- Berger v. Brannan, 172 F.2d 241 (10th Cir. 1949) (pretrial procedure aimed at stipulating matters without dispute)
- McElroy v. United Air Lines, Inc., 21 F.R.D. 100 (W.D. Mo. 1957) (interrogatory answers limit issues but are not as conclusive as pleadings)
- Briggs v. Dalkon Shield Claimants Trust, 174 F.R.D. 369 (D. Md. 1997) (factors for treating interrogatory statements as binding)
- In re Foxmeyer Corp., 286 B.R. 546 (Bankr. D. Del. 2002) (treating pleadings as judicial admissions)