`
`COURT OF CHANCERY
`OF THE
`STATE OF DELAWARE
`
`KATHALEEN ST. JUDE MCCORMICK
`CHANCELLOR
`
`
`
`LEONARD L. WILLIAMS JUSTICE CENTER
`500 N. KING STREET, SUITE 11400
`WILMINGTON, DELAWARE 19801-3734
`
`November 16, 2023
`
`Garrett B. Moritz
`Roger S. Stronach
`A. Gage Whirley
`Ross Aronstam & Moritz LLP
`1313 North Market Street, Suite 1000
`Wilmington, DE 19801
`
`
`Michael A. Barlow
`Michael T. Manuel
`Abrams & Bayliss LLP
`20 Montchanin Road, Suite 200
`Wilmington, DE 19807
`
`
`
`Re: Walbro, LLC v. Carter Carburetor, LLC, et al.
`C.A. No. 2023-1072-KSJM
`
`Dear Counsel:
`
`This decision resolves the parties’ discovery disputes identified in their letters
`
`dated November 14 and 15, 2023, respectively.1
`
`Under Court of Chancery Rule 26, “[p]arties may seek discovery of any non-
`
`privileged, relevant matter, as well as information reasonably calculated to lead to
`
`the discovery of admissible evidence.”2 “The burden is on the objecting party to show
`
`why the requested information is improperly requested.”3 Among other reasons,
`
`discovery can be limited when it is duplicative, or when it is disproportionate to the
`
`needs of the case.4
`
`
`1 C.A. No. 2023-1072-KSJM Docket (“Dkt.”) 48, 63.
`
`2 Huff Fund Inv. P’ship v. CKx Inc., 2012 WL 3552687, at *1 (Del. Ch. Aug. 15, 2012)
`(citing Ch. Ct. R. 26(b)(1)).
`
`3 Prod. Res. Gp., L.L.C. v. NCT Gp., Inc., 863 A.2d 772, 802 (Del. Ch. 2004) (citation
`omitted).
`
`4 Ct. Ch. R. 26(b).
`
`EFiled: Nov 16 2023 04:42PM EST
`Transaction ID 71422819
`Case No. 2023-1072-KSJM
`
`
`
`C.A. No. 2023-1072-KSJM
`November 16, 2023
`Page 2 of 4
`
`
`
`I assume familiarity with the background of this litigation and, in the interest
`
`of time, jump right to the disputed issues. The parties’ letters raise three issues.
`
`First, Defendants Carter Carburetor, LLC, Carter Carburetor Holdings LLC, Walbro
`
`Co. Ltd. and First Brands Group, LLC (collectively, “Carter”) seek to compel Plaintiff
`
`Walbro LLC (“Walbro”) to produce three of its document custodians for depositions.
`
`This request is granted in part. Second, Carter seeks to compel Walbro to produce
`
`documents dating back to August 1, 2022. This request is denied. Third, Walbro
`
`seeks to compel the deposition of First Brand’s CEO. This request is granted.
`
`1.
`
`Depositions Of Walbro Document Custodians
`
`In addition to the three deponents that Walbro has offered, Carter seeks to
`
`depose: Shane Griffin, Walbro’s CFO, who signed the August 14, 2023 letter of intent,
`
`the Asset Contribution Agreement, and the Securities Purchase Agreement for
`
`Walbro; Matt Simms, Walbro’s Vice President of Supply Chain, who Carter says had
`
`unique communications with the legacy customers; and Dante Spurlock, a Latham &
`
`Watkins attorney who Carter describes as central to the transaction.
`
`Walbro argues these additional depositions are overly burdensome given the
`
`scope of discovery to date and the speed of these proceedings. They further argue
`
`that the depositions are unnecessary because the three additional deponents do not
`
`have any unique relevant knowledge.
`
`Griffin seemed to play a significant role in the transaction, so Walbro must
`
`make him available for a deposition. I am concerned, however, that the request for
`
`
`
`
`
`C.A. No. 2023-1072-KSJM
`November 16, 2023
`Page 3 of 4
`
`
`two additional custodians atop the depositions already scheduled is disproportionate
`
`to the needs of the case. For that reason, Carter’s motion to depose Simms and
`
`Spurlock is denied. If, however, discovery reveals that either Simms or Spurlock have
`
`some unique knowledge central to the disputed issues, I will consider ordering their
`
`deposition.
`
`2.
`
`Disputed Date Range
`
`Carter seeks to expand the date range of Walbro’s document production by a
`
`year. Carter requests documents dating back to August 1, 2022, which is one month
`
`before Walbro started to market its engine marketing and aftermarket parts
`
`business, to probe Walbro’s motivations and internal communications regarding its
`
`legacy customers in the context of a possible sale. One of Carter’s theories is that
`
`Walbro rushed into selling its engine marketing and aftermarket parts business,
`
`which Carter argues informs Walbro’s later actions and intent.
`
`Walbro responds that the discovery timeline should be limited to after August
`
`1, 2023, because the expedited claims center on the agreements between Walbro and
`
`Carter, which the parties did not start negotiating under after the August 14, 2023
`
`letter of intent was signed.
`
`Walbro has the better side of this argument. Had Carter requested a limited
`
`set of documents for the expanded date range, I would be inclined to consider the
`
`request. Expanding document discovery by a full year as to all custodians, however,
`
`seems overly excessive in the context of these expedited proceedings. So, Carter may
`
`
`
`
`
`C.A. No. 2023-1072-KSJM
`November 16, 2023
`Page 4 of 4
`
`
`explore this theory through deposition testimony. If that testimony reveals
`
`compelling evidence concerning this theory, I will entertain requests for relief.
`
`3.
`
`Patrick James
`
`Carter seeks to prohibit Walbro from deposing the First Brands’ CEO, Patrick
`
`James, arguing that James was not involved in the agreements or the transaction.
`
`Although Carter denies that James was involved in negotiating the relevant
`
`agreements, James was identified as a relevant decision-maker in the letter of intent
`
`and referred to on numerous occasions by Shekhar Kumar, First Brands’ Senior Vice
`
`President – M&A. So, it is unclear to me what James’ role was. Walbro may depose
`
`him. If James’ role was as limited as Carter represents, then it will likely be a short
`
`and fruitless deposition.
`
`
`
`IT IS SO ORDERED.
`
`Sincerely,
`
`/s/ Kathaleen St. Jude McCormick
`
`Kathaleen St. Jude McCormick
`Chancellor
`
`All counsel of record (by File & ServeXpress)
`
`
`
`cc:
`
`
`
`
`
`
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