Richards Layton & Finger
 

Magistrate Judge Burke Denies Motions to Compel Production of Documents from Related Companies

March 29, 2019

In Confluent Surgical, Inc. v. HyperBranch Medical Technology, Inc., No. 17-688-LPS-CJB (D. Del. Feb. 6, 2019), Magistrate Judge Burke denied the plaintiffs’ motion to compel the production of documents in the control of an executive of the defendant’s parent corporation. The defendant responded that as a subsidiary it could not demand emails held by an executive of its parent and, in any event, the custodian identified by the plaintiffs was not responsible for the product line at issue in the lawsuit. The Court expected that a search of documents held by the proper custodian at the parent would turn up relevant information, but agreed that the plaintiffs failed to show that the defendant had the right to these documents. Because of the close relationship between the companies alleged by the plaintiff, however, Judge Burke stated that it did “not seem like it would be difficult” to make a showing of control. Accordingly, Judge Burke ordered the parties to meet and confer on the proper custodian of the documents, and granted the plaintiffs leave to renew.

In Westinghouse Air Brake Technologies Corp. v. Siemens Mobility, Inc., No. 17-1687-LPS (D. Del. Feb. 7, 2019), Magistrate Judge Burke denied a motion to compel the production of information in the possession of the plaintiff’s wholly owned subsidiary. According to Judge Burke, neither side addressed the standard recited in the Third Circuit’s decision in Gerling Int’l Insurance Co. v. C.I.R., 839 F.2d 131, 140 (3d Cir. 1988), for when a parent has “control” over documents held by a subsidiary for the purpose of Fed. R. Civ. P. 34: that the subsidiary acts as a direct instrumentality of and in direct cooperation with its parent, and the properties and affairs of the two are inextricably confused as to a particular transaction. Judge Burke did not believe that the evidence presented would satisfy that standard, but granted the defendant leave to renew at a later time should it be able to make a “better record.”

Key Point: These rulings show that documents held by parents or subsidiaries of a party may be discoverable provided that litigants are able to make the requisite showing of control.