Vinson & Elkins
MONTH-IN-BRIEF (Oct 2024)
Business Litigation
Delaware Court of Chancery Approves Use of Technology-Assisted Review in Discovery
By Sean M. Brennecke, Lewis Brisbois
As litigators are well aware, electronic discovery can be one of the most burdensome and costly aspects of litigation. Parties often use various tools to manage the burden, including a predictive coding or machine learning system known as Technology-Assisted Review, or “TAR.” Unlike a traditional manual review, TAR uses a representative set of documents that are reviewed by attorneys to “learn” to identify the most relevant documents. While many parties and counsel have embraced TAR, some remain concerned about how its use would be received by courts. Vice Chancellor Will recently addressed that concern in Berger v. Graf Acquisition, LLC, 2024 WL 4541011 (Del. Ch. Oct. 21, 2024).
In Berger, a former stockholder brought an action against Graf Acquistion, LLC, and others, alleging that the defendants impaired his redemption rights in connection with a September 2020 de-SPAC. Id. at *1. Plaintiff alleged that defendants, who held lucrative “founder shares,” made certain disclosures that left the public shareholders uninformed about the defendants’ efforts to “minimize redemptions in order to close a value-destructive transaction.” Id. at *1. In discovery, plaintiffs propounded broad document requests and suggested equally broad search terms, which identified 125,000 documents in one category alone. Id. at *2. Defendants responded by proposing more restrictive search terms or alternatively employing TAR to assist in the broad review. Plaintiff rejected defendants’ position and filed a motion to compel. Id.