Burkhart v. Genworth Financial, Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

RICHARD F. BURKHART, WILLIAM E. )
KELLY, RICHARD S. LAVERY, )
THOMAS R. PRATT, and GERALD )
GREEN, individually and on behalf of all )
others similarly situated, )
)
Plaintiffs, )
)
v. ) C.A. No. 2018-0691-NAC
)
GENWORTH FINANCIAL, INC., )
GENWORTH HOLDINGS, INC., )
GENWORTH NORTH AMERICA )
CORPORATION, GENWORTH )
FINANCIAL INTERNATIONAL )
HOLDINGS, LLC, and GENWORTH )
LIFE INSURANCE COMPANY, )
)
Defendants. )

MEMORANDUM OPINION

Date Submitted: June 18, 2024
Date Decided: August 21, 2024

Peter B. Andrews, Craig J. Springer, David M. Sborz, ANDREWS & SPRINGER LLC,
Wilmington, Delaware; Edward F. Haber, Michelle H. Blauner, Ian J. McLoughlin,
Patrick J. Vallely, SHAPIRO HABER & URMY LLP, Boston, Massachusetts; Counsel
for Plaintiffs Richard R. Burkhart, William E. Kelly, Richard S. Lavery, Thomas R.
Pratt, and Gerald Green.

Srinivas M. Raju, Elizabeth J. Freud, Daniel A. Dreisbach, Susan Hannigan Cohen,
Kevin M. Gallagher, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware;
Reid L. Ashinoff, Kenneth J. Pfaehler, T. Carter White, DENTONS US LLP, New
York, New York; John C. Hueston, Marshall A. Camp, Padraic Foran, Zachary
Murray, HUESTON HENNIGAN LLP, Los Angeles, California; Counsel for the
Defendants Genworth Financial Inc., Genworth Holdings, Inc., Genworth North
America Corporation, Genworth Financial International Holdings, LLC, and
Genworth Life Insurance Company.

COOK, V.C.
This decision resolves the defendants’ motion to compel (the “Motion”) as it

relates to the production of two categories of documents: (1) a litigation funding

agreement and (2) unredacted fee agreements. The plaintiffs’ arguments as to the

latter are wholly dependent on the success of their arguments as to the former.

As to the former, the plaintiffs raise two objections to the production of the

funding agreement—relevance and the work product doctrine. Delaware state courts

have addressed the production of litigation funding agreements and related

communications on several occasions. Three decisions have required production of

the funding agreements but permitted limited redactions on work product grounds.

But this Court’s most recent decision to address the issue seems to have rejected the

general applicability of the work product doctrine to litigation funding agreements.

And in another decision, this Court ordered production of litigation funding

communications, notwithstanding objections on work product grounds. None of these

cases, however, arise in the class action context.

As explained below, I find the litigation funding agreement relevant for two

reasons. First, the class action context and specific aspects of this litigation give rise

to several unique concerns, including the potential for class counsel to face conflicts

of interest and for the third-party funders to exercise improper control over the

litigation. These concerns may foreseeably bear on my decision as to the pending

motion for class certification. Second, the parties to the litigation funding agreement

set forth their collective “expectation” that the agreement would be disclosed to the

Court during litigation in advance of class certification. I read this “expectation” as

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an acknowledgment of relevance. I conclude further that the plaintiffs’ three-

sentence argument as to work product does not satisfy their burden of showing the

funding agreement may be withheld on that basis. Accordingly, I grant the Motion

as to the funding agreement. And the plaintiffs’ only argument as to the fee

agreements rises and falls with their arguments as to the funding agreement.

I. BACKGROUND

In March 2023, the defendants Genworth Financial, Inc., Genworth Holdings,

Inc., Genworth North America Corp., Genworth Financial International Holdings,

LLC, and Genworth Life Insurance Co. (together, “Defendants”) served requests for

production on the named plaintiffs.1 The named plaintiffs are Richard F. Burkhart,

William E. Kelly, Richard S. Lavery, Thomas R. Pratt, and Gerald Green (together,

“Plaintiffs”). In their requests for production, Defendants sought production of the

fee agreements between class counsel and Plaintiffs (the “Contingent Fee

Agreements”). Plaintiffs produced the Contingent Fee Agreements in August 2023,

but they did so with heavy redactions to the part of the agreement discussing the

actual fee arrangement between Plaintiffs and putative class counsel (the law firm of

Shapiro Haber & Urmy LLP or “SHU”). The redactions were so extensive that, under

1 Burkhart v. Genworth Fin. Inc., C.A. No. 2018-0691-NAC (“Dkt.”) 318, Pls.’ Opp’n to

Defs.’ Mot. to Compel (“Pls.’ AB”) Ex. 1.

2
the heading “LEGAL FEES AND EXPENSES[,]” only a single sentence is

unredacted.2

Defendants deposed Plaintiffs between August and November of 2023. Only

after these depositions does it seem that Plaintiffs revealed the existence of a

litigation funding agreement (the “Funding Agreement”) with certain unidentified

“Litigation Funders” (the “Funders”).3 To date, Plaintiffs have refused to produce any

copy of the Funding Agreement or to disclose even the Funders’ identities.

Plaintiffs moved for class certification on January 12, 2024. In their motion

papers, they argue “[t]here are no conflicts between the named Plaintiffs and the

members of the Class[,]”4 and they and their counsel satisfy all the respective factors

for appointment as class representatives and class counsel.5 On March 20, 2024, two

days before Plaintiffs were due to file their reply brief in support of their motion for

class certification, Plaintiffs produced a new version of the Contingent Fee

Agreements—this time, with fewer redactions. In the most recent iteration, the legal

fees and expenses section describes part of the Funding Agreement (the “Funding

Agreement Description”). It provides the following:

[REDACTED] have agreed to pay the reasonable legal fees and expenses
of the Firm and its local Delaware local [sic] counsel in prosecuting the

2 Dkt. 310, Aff. of T. Carter White in Supp. of Defs.’ Mot. to Compel (“White Aff.”) Exs.

1–5.

3 White Aff. Ex. 6 at 2.

4 Dkt. 291, Opening Br. in Support of Pls.’ Mot. for Class Certification at 42.

5 Id. at 40–57; see also id. at 6 (asserting “[P]laintiffs should be appointed as class

representatives” and “[SHU] should be appointed as Class Counsel”).

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Class Action, up to a total amount of [REDACTED] plus the reasonable
fees and expenses of any experts whom SHU may reasonably retain to
assist it in the prosecution of the Class Action. The [REDACTED]
understand and have agreed in writing that notwithstanding such
payments, they will have no right to exercise any control over either the
manner in which the Class Action is prosected or any negotiations that
may subsequently occur in an attempt to settle the Class Action. To the
contrary, the [REDACTED] have agreed that only you and any other
class representatives who may be appointed by the Court will have the
right to direct the actions of SHU and its local counsel with respect to
the manner in which the Class Action is prosecuted or resolved.6

To date, Plaintiffs refuse to produce the Contingent Fee Agreement without

redactions. Less than one month after Plaintiffs produced the second version of the

Contingent Fee Agreement, Defendants filed the Motion. They seek to compel

production of (1) the Funding Agreement and (2) the unredacted Contingent Fee

Agreements.7

I heard oral argument on the Motion on June 13, 2024. After oral argument, I

ordered Plaintiffs’ counsel to submit the withheld documents for in camera review.

II. LEGAL ANALYSIS

Court of Chancery Rule 26(b)(1) permits discovery “‘regarding any non-

privileged matter that is relevant to any party’s claim or defense and proportional to

the needs of the case.’ When a party . . . withholds discovery on the ground of

6 White Aff. Exs. 7–11.

7 Defendants also seek to compel production of documents and further deposition
testimony surrounding two other categories. I defer ruling on those other categories, pending
further briefing. I will issue a letter concerning supplemental briefing separately.

4
privilege, that party bears the burden ‘of establishing each of [the applicable

privilege’s] elements.’”8

Defendants seek production of the entire Funding Agreement. They argue that

the presence of litigation funders creates the potential for conflicts of interest that

may incentivize counsel to prioritize the interests of the Funders over those of the

class. And the potential for such conflicts makes the Funders’ identity and the

character of its interest in the litigation relevant and necessary to test whether

Plaintiffs are “truly independent from the [F]under[s’] direction and control . . . .”9

Plaintiffs counter with two arguments—relevance and the work product doctrine.

A. Relevance

“Information sought in discovery is considered relevant ‘if there is any

possibility that the information sought may be relevant to the subject matter of the

action.’”10

[T]he requirement of relevancy must be construed liberally. . . . [T]he
spirit of Rule 26(b) calls for all relevant information, however remote, to
be brought out for inspection not only by the opposing party but also for
the benefit of the Court. . . . Thus, discovery should ordinarily be
allowed under the concept of relevancy unless it is clear that the

8 Pearl City Elevator, Inc. v. Gieseke, 2020 WL 5640268, at *2 (Del. Ch. Sept.

21, 2020) (alternation in original).

9 Dkt. 309, Defs.’ Mot. to Compel at 8.

10 In re Appraisal of Dole Food Co., Inc., 114 A.3d 541, 548 (Del. Ch. 2014) (quoting

Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Stauffer Chem. Co., 1990 WL 177572, at *3
(Del. Super. Nov. 9, 1990)).

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information sought can have no possible bearing upon the subject
matter of the action.11

Two factors lead me to conclude that the Funding Agreement is relevant: the

class action context in which this action arises and the express terms of the Funding

Agreement itself.

1. The Class Action Context

First, the present matter arises from the class action context. Viewed in this

context, class certification under Court of Chancery Rule 23 provides a clear

connection between the pertinent legal issues in this action and the Funding

Agreement.

Although it is ultimately “a matter of this Court’s discretion[,]” when

determining whether to certify a class, the “Court must undertake a ‘rigorous

analysis’ . . . and ‘make an explicit determination on the record of the propriety of the

class action according to the requisites of Rule 23(a) and (b).’”12 Among other things,

this requires the Court to assess whether the named plaintiffs retained “competent

and experienced counsel to act on behalf of the class.”13 Rule 23(d) also sets out an

11 Id. (quoting Boxer v. Husky Oil Co., 1981 WL 15479, at *2 (Del. Ch. Nov. 9, 1981)).

12 Buttonwood Tree Value P’rs., L.P. v. R. L. Polk & Co., 2022 WL 2255258, at *3 (Del.

Ch. June 23, 2022) (footnote omitted) (discussing adequacy of class representative under Rule
23(a)(4)).

13 Id. at *10 (quoting In re Fuqua Indus., Inc. S’holder Litig., 752 A.2d 126, 127 (Del.

Ch. 1999)).

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independent requirement that “[c]lass counsel must fairly and adequately represent

the interests of the class.”14

If it is not already clear, this Court takes its thorough evaluation of the Rule 23

requirements seriously. Indeed, “[t]he adequacy of the class representative”

requirement set out in Rule 23(a)(4) brings with it “a constitutional dimension. The

Due Process Clause of the United States Constitution requires ‘that the named

plaintiff at all times adequately represent the interests of the absent class

members.’”15

As it relates to these considerations, I believe there may be legitimate concerns

that counsel could face a conflict of interest. There are many instances where a

funder’s interests might diverge from those of a claim holder.16 But the class action

context seems especially ripe for a third-party funder to exercise improper control

over the litigation, at least relative to the heightened degree of oversight that might

14 Ct. Ch. R. 23(d).

15 Prezant v. De Angelis, 636 A.2d 915, 923 (Del. 1994) (quoting Phillips Petroleum Co.

v. Shutts, 472 U.S. 797, 812 (1985)); see also Donald J. Wolfe, Jr. & Michael A. Pittenger,
Corporate and Commercial Practice in the Delaware Court of Chancery § 12.02[b][5], at 12-
16 to -17 (2022).

16 J. Maria Glover, Alternative Litigation Finance and the Limits of the Work-Product

Doctrine, 12 N.Y.U. J. L. & Bus. 911, 935 (2016) (“[O]ne could imagine any number of
legitimate concerns about the ways in which litigation funding could alter the incentives of
plaintiffs’ counsel and potentially create conflicts between its loyalty to the class and its
contractual obligations to the litigation funder.”); Maya Steinitz, Incorporating Legal Claims,
90 Notre Dame L. Rev. 1155, 1168 (2015) (“[T]he introduction of a financier into the attorney-
client relationship can produce conflicts or reinforce existing ones.”).

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tend to accompany an ordinary attorney-client relationship.17 And “[t]his concern is

even more problematic[,]” as here, where class counsel “contract[s] directly with a

funder for financial resources” since, in doing so, counsel may take on duties to the

funder that are separate and apart from counsel’s “professional duties to the class.”18

Given these clear concerns, it seems relevant to determine whether, or the

extent to which, diverging interests may impact counsel’s ability or willingness to

adequately represent the class.

Such questions seem almost inherently to implicate the Funders’ identities and

the extent of their control (whether direct or indirect) over the litigation. These are

questions the Funding Agreement can help answer.

Plaintiffs argue the Funders have no control over the litigation. They point to

the previously redacted Funding Agreement Description in the Contingent Fee

Agreements and suggest the language contained therein, by itself, is sufficient to

assuage my concerns. But not all control takes an overt form that is set forth

expressly in the terms of a contract. Indeed, “[f]unders . . . may engage in less obvious

17 See Aaseesh P. Polavarapu, Discovering Third-Party Funding in Class Actions: A

Proposal for in Camera Review, 165 U. Pa. L. Rev. Online 215, 222 (2017) [hereinafter
“Funding Class Actions”] (Class counsel often is afforded wide latitude to “exercise[] nearly
plenary control over all important decisions in the lawsuit . . . .” (quoting Jonathan R. Macey
& Geoffrey P. Miller, The Plaintiffs’ Attorney’s Role in Class Action and Derivative Litigation:
Economic Analysis and Recommendations for Reform, 58 U. Chi. L. Rev. 1, 3 (1991))); see also
In re Winchell’s Donut Houses, L.P. Sec. Litig., 1988 WL 135503, at *2 (Del. Ch. Dec. 12, 1988)
(“[T]here are aspects of a class action that[ ]from the ‘client’s’ point of view-make that
representation quite different. The class member cannot discharge his lawyer as can the
typical ‘client’ and, in (b)(1) or (b)(2) actions, cannot opt out of the class action (which would
accomplish the same result).”).

18 Funding Class Actions at 222.

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forms of control.”19 The potential for funders to exercise discrete control over

litigation might arise in a variety of ways that I need not delve into here.20 Suffice it

to say that the mere inclusion of these statements in the Contingent Fee Agreements,

to which the Funders themselves are not parties, does little to relieve my concerns over

their potential to exercise control over the litigation in a manner that may give rise

to a conflict.21

19 Id. at 221.

20 See id. (“[R]epeated interactions between a funder and counsel may lead to a
working relationship, and as a result, the funder may be able to exercise significant influence
over counsel’s decision[-]making. A funder may also threaten to withdraw financing unless
the litigation proceeds according to its own strategic preferences.” (footnotes omitted));
Steinitz, supra, at 1168 (“In addition to conflicts that are similar to those that exist between
contingency fee lawyers and their clients—such as incentives to settle early in order to
maximize profits across a portfolio rather than in a particular case, incentives to prioritize
reputation over monetary relief, and incentives to prioritize monetary relief over
nonmonetary relief—interesting examples of conflicts unique to the funder-client
relationship include those that may arise if a funder decides to securitize its pool of litigations
or to invest on both sides of the ‘v.’ Conflict concerns are often also concerns about control.
Instead of overt control, like formal settlement authority or the right to dictate choice of
counsel, conflicts can generate hidden forms of control. For example, any repeat-play
relationship between funder and the litigation counsel gives funder informal but significant
influence over the conduct of the case.” (footnotes omitted)).

21 To the contrary, the Funding Agreement Description in the Contingent Fee
Agreements suggests other potential concerns. For example, based on the language used and
the timing of signatures on the respective agreements, I have some questions as to whether
the named Plaintiffs received or were aware of the terms of the Funding Agreement, either
before or after the named Plaintiffs executed the Contingent Fee Agreements. Compare Log
6, Log 9, and White Aff. Exs. 8–10, with Log 52. My concerns are likely further colored, in
part, by Judge Rakoff’s decision denying class certification in Gordon v. Sonar Cap. Mgmt.
LLC, 92 F. Supp. 3d 193 (S.D.N.Y. 2015), which addressed SHU’s failure to disclose fee-
arrangement information about which the Court had inquired. Id. at 199 (explaining SHU
failed to “reveal[] the existence of a” fee-sharing arrangement with another attorney “at the
hearing on appointment of lead plaintiff and lead counsel, even though the Court inquired
into [SHU]’s separate fee sharing agreement with another ‘referring counsel’”).

9
2. The “Expectation” Clause

The class action context might itself suggest the Funding Agreement is

relevant to the matter at hand. But that is not the only ground on which I base my

determination of relevance. The express terms of the Funding Agreement also set

forth its parties’ clear “expectation[s]” that it, or the arrangement set forth within,

will be disclosed in some fashion during litigation.

In the final paragraph of what, in substance, is a six-paragraph agreement, the

Funding Agreement expressly contemplates its own disclosure. It provides: “It is our

expectation that this arrangement will be disclosed to the court presiding over the

Class Action at or before the time that the court is requested to certify a class in the

case.”22

I have difficulty thinking of a more direct acknowledgement of relevance than

the Funding Agreement’s parties stating their “expectation[s]” that the document or

its terms will be disclosed during the course of litigation—at the class certification

stage no less.23 It is as if they foresaw the potential concern over conflicts and tried

to get ahead of the issue. Here, and consistent with the broad treatment Delaware

22 Log 52.

23 I acknowledge there may be general concerns that requiring production of litigation

funding agreements could have a chilling effect on funders’ willingness to provide the
resources needed to alleviate access-to-justice problems caused by the often-substantial cost
of litigation. See, e.g., Funding Class Actions at 230–31. Here, that concern would seem
misplaced. The parties to the Funding Agreement expressly stated their expectation that
the agreement or its terms would be disclosed in some fashion during litigation. This is
perhaps unsurprising since the Funders do not seem to be entities ordinarily involved in
litigation funding. Instead, they appear to be competitors financing litigation against a
market peer.

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courts afford determinations of relevance, I conclude the Funding Agreement is

relevant.

Again, this conclusion is based in part on the nature of this action, the issues

tending to arise in the class action context, and the admission of relevance set forth

in the express terms of the Funding Agreement.24

B. Work Product

Plaintiffs assert the Funding Agreement is protected by the work product

doctrine. “The traditional work product doctrine has been codified in Chancery Court

Rule 26(b)(3), and generally bars the discovery of materials created in anticipation of

litigation or for trial preparation. But this bar is not an ‘impenetrable barrier.’”25

The burden to show withheld documents are privileged rests on the

withholding party.26 Here, that burden falls to Plaintiffs. Excluding two quotes,

24 To the extent Plaintiffs suggest the Funders’ identities are not relevant, I disagree.

In addition to being plainly relevant for the reasons discussed above, I take note that some
forums even have standing orders requiring that a party that has made funding
arrangements with a third-party funder file a statement containing the “identity” of the
funder, among other things. See Standing Order Regarding Third-Party Litigation Funding
Arrangements (D. Del. April 18, 2022),
https://www.ded.uscourts.gov/sites/ded/files/Standing%20Order%20Regarding%20Third-
Party%20Litigation%20Funding.pdf. Still other courts have modified their local civil rules
to require similarly. See Amendment of Local Civil Rules (D.N.J. June 21, 2021),
https://www.njd.uscourts.gov/sites/njd/files/Order7.1.1%28signed%29.pdf.

25 Saito v. McKesson HBOC, Inc., 2002 WL 31657622, at *3 (Del. Ch. Nov. 13, 2002)

(footnote omitted).

26 Rembrandt Techs., L.P. v. Harris Corp., 2009 WL 402332, at *5 (Del. Super. Feb.

12, 2009) (“The party asserting a privilege bears the burden of establishing that documents
or communications are, in fact, and as a matter of law, protected by privilege. Therefore, a
party who withholds ‘information otherwise discoverable . . . by claiming that it is privileged
or subject to protection as trial preparation material . . . shall make the claim expressly and

11
Plaintiffs dedicate a hardly exhaustive three sentences of their opposition brief to

showing the Funding Agreement is protected work product.27 The last of the three

conclusory sentences also includes the full extent of Plaintiffs’ argument as to the

Contingent Fee Agreement. Plaintiffs’ complete argument on privilege is set forth as

follows:

It is well established under Delaware law that litigation funding
agreements and related documents are not discoverable. They are
protected work product because they are prepared in anticipation of
litigation and reflect litigation strategy. This Court addressed this issue
in Carlyle Investment Management, LLC v. Moonmouth Co. S.A.,
explaining: “Overall, it appears that the [litigation funding documents]
were prepared in anticipation of litigation or for trial by or for another
party or by or for that other party’s representative. . . . The policies
underlying the work product doctrine . . . favor a finding of protection.”[]
Similarly, in Charge Injection Technologies, Inc. v. E.I. Dupont De
Nemours & Co., the court held: “redacted payment terms in the
Financing Agreement are entitled to work product protection . . . .”[] As
such, Plaintiffs’ redactions to their [Contingent Fee Agreements] to
litigation funding are entirely appropriate, as is Plaintiffs’ objection to
the production of the [Funding Agreement].28

But contrary to Plaintiffs’ assertion, it is not “well established” that, under

Delaware law, “litigation funding agreements . . . are not discoverable.” In fact, the

courts in both Carlyle and Charge Injection had ordered production of redacted

shall describe the nature of the documents, communications, or things not produced or
disclosed in a manner that, without revealing information itself privileged or protected, will
enable other parties to assess the applicability of the privilege or protection.’” (ellipses in
original) (footnote omitted)).

27 See Pls.’ AB at 5–6.

28 Id. (ellipses in original) (non-substantive footnotes omitted).

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versions of the respective funding agreements—which the parties had produced.29 So

when rendering the decisions that Plaintiffs quote from, the courts were only ruling

on whether the few remaining redactions were protected by the work product

doctrine.30 Consistent with these first two Delaware decisions on the issue, at least

one other Delaware state court decision required production of a funding agreement

with limited redactions when facing similar issues.31 Still another has granted a

motion to compel production of “withheld litigation funding communications,” due to

the plaintiff’s failure to satisfy the burden to show the communications were entitled

to work product protection.32

These decisions alone show that Plaintiffs do not meet their burden since

Plaintiffs’ argument turns entirely on its position that it is “well established” that

funding agreements are not subject to discovery and thus the Funding Agreement

29 See Carlyle Inv. Mgmt., LLC v. Moonmouth Co. S.A., C.A. No. 7841-VCP, at 25–29

(Del. Ch. Oct. 20, 2014) (TRANSCRIPT); Carlyle Inv. Mgmt. LLC v. Moonmouth Co. S.A.,
2015 WL 778846, at *2 (Del. Ch. Feb. 24, 2015) (The defendants “submitted the required
compliance statement[,]” according to which, the “[d]efendants produced: . . . a redacted copy
of the [f]unding [a]greement with a redaction log . . . .”); Charge Injection Techs., Inc. v. E.I.
DuPont De Nemours & Co., 2015 WL 1540520, at *2–3 (Del. Super. Mar. 31, 2015) (“The
Court ordered [the plaintiff] to produce the redacted version of the [f]inancing [a]greement
and its privilege log” and the plaintiff “produced the redacted version” of the agreement.).

30 Indeed, even the quotation Plaintiffs extract from Charge Injection makes it
apparent that the court’s decision was cabined only to address, at most, certain redacted
terms of the already-produced funding agreement.

31 Elenza, Inc. v. Alcon Labratories Hldg. Corp., C.A. No. N14C-03-185-CCLD (Del.

Super. June 14, 2016) (ORDER); Elenza, Inc. v. Alcon Labratories Hldg. Corp., C.A. No.
N14C-03-185-CCLD, at 111–13 (Del. Super. May 11, 2016) (TRANSCRIPT).

Cannon v. Romeo Sys., Inc., C.A. No. 2021-0171-PAF (Del. Ch. Apr. 10, 2023)
32

(ORDER).

13
here is not discoverable.33 Further still, Plaintiffs make no mention of the “because

of litigation” test that our courts tend to use in assessing the applicability of the work

product doctrine. But this was our courts’ central focus in both Carlyle and Charge

Injection.

Indeed, in what I believe to be this Court’s most recent decision on the

applicability of the work product doctrine to funding agreements, Vice Chancellor

Laster—while recognizing the doctrine’s applicability to diligence-related

communications between party and funder—seems generally to have rejected the

doctrine’s applicability to the terms of a funding agreement.34 There, like here, the

parties did not raise the “because of litigation” test in the briefing.

For the foregoing reasons, I grant the Motion as to the complete, unredacted

Funding Agreement.35

33 Even if it were true (which Plaintiffs do not show) that Delaware courts are
generally averse to compelling production of funding agreements, Plaintiffs do not show why
the Funding Agreement at issue here should receive the same or similar treatment that they
assert our courts have afforded the others. Only once in their entire argument do Plaintiffs
actually refer to the Funding Agreement at issue in this action. The other references are to
“funding agreements” generally.

34 See In re Côte d’Azur Estate Corp., C.A. No. 2017-0290-JTL, at 57–61 (Del. Ch. Dec.

8, 2022) (TRANSCRIPT) (“I recognize that in Carlyle, Vice Chancellor Parsons stated that
the terms of the final agreement, such as the financing premium or acceptable settlement
conditions, could reflect an analysis of the merits of the case. I agree with that at a high
level; it could. But I think it will rarely do so in a manner that actually implicates any type
of privilege.”).

35 Separately, I note that, having conducted an in camera review of the Funding
Agreement, its terms seem materially distinct from those that were at issue in Carlyle and
Charge Injection. Here, the Funding Agreement does not reflect any opinion work product,
risk analyses, or other meaningful reference to strategy, mental impressions, or the lawsuit’s
merits. I am confident that, in compelling production of the Funding Agreement, I am not

14
Plaintiffs’ half-sentence argument for not producing fully unredacted

Contingent Fee Agreements piggybacks entirely off their arguments as to the

Funding Agreement.36 And since Plaintiffs’ argument rises and falls with the success

of the Funding Agreement arguments, I also grant the Motion as to the complete,

unredacted Contingent Fee Agreements.

III. CONCLUSION

For the foregoing reasons, the Motion is granted as to the Funding Agreement

and Contingent Fee Agreements. Plaintiffs shall deliver complete and fully

unredacted copies of the Funding Agreement and the Contingent Fee Agreements to

Defendants within seven days.

requiring Plaintiffs to disclose meaningful opinion work product. I am also confident the
parties to the Funding Agreement did not believe they included confidential or privileged
material in the document. This conclusion is reinforced by the parties’ express anticipation
that the Funding Agreement would be disclosed to the Court in connection with class
certification.

36 Pls.’ AB at 5–6; see also Grunstein v. Silva, 2010 WL 1531618, at *2 (Del. Ch. Apr.

13, 2010) (“Communications regarding fee arrangements are typically discoverable because
fee arrangements are considered incidental to the attorney-client relationship and do not
usually involve the disclosure of confidential communications arising in the context of the
professional relationship.”); Green v. ConAgra Poultry Co., 2007 WL 2319146, at *7 (Del.
Super. July 11, 2007) (discussing Third Circuit precedent providing that, “[a]bsent unusual
circumstances, the attorney-client privilege ‘does not shield the fact of retention, the identity
of clients, and fee arrangements’”), aff’d, 954 A.2d 909 (Del. 2008). The dependent nature of
Plaintiffs’ argument as to the Contingent Fee Agreements seems to follow logically from the
fact that the redacted parts of those agreements do not meaningfully disclose anything the
Funding Agreement does not already disclose.

15