Paramount Communic’nc Inc. v. QVC Network Inc.

Citation. 637 A.2d 34 (Del. 1993)

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Citation637 A.2d 34 (Del. 1993)

Brief Fact Summary.

The addendum of the case includes conduct that occurred during a deposition of a Paramount director being deposed by Delaware counsel for QVC. The court regarded the conduct as unprofessional and believed it should not be repeated.

Synopsis of Rule of Law.

The Delaware Court may use prior misconduct by an out-of-state attorney to determine whether that attorney should be admitted to the Delaware Court pro hac vice in the future.

Points of Law - Legal Principles in this Case for Law Students.

The shareholders of Time would have suffered dilution, of course, but they would suffer the same type of dilution upon the public distribution of new stock.

View Full Point of Law

Plaintiff QVC and Paramount shareholders sued Defendant Paramount in Delaware for accepting a  merger agreement with Viacom, even when QVC offered a higher share price. A Defendant Paramount director was deposed by counsel for Plaintiff QVC in Texas. The director was represented personally by a Texas attorney Jamail and was also defended by Thomas from New York, counsel for Defendant Paramount. The Texas counsel Jamail did not appear anywhere else in the Delaware proceedings and was not admitted pro hac vice. During the director’s deposition Jamail abused the privilege of representing a witness in a Delaware proceeding by (1) improperly directing the witness, (2) being rude, uncivil, and vulgar, and (3) obstructing the ability of the questioner to elicit testimony. Because the director was being deposed as a Paramount witness, he should have been represented by Delaware counsel or counsel that was admitted pro hac vice. However, the court was limited in its ability to sanction the two lawyers, Jamail and Thomas because they were neither Delaware attorneys nor admitted to appear pro hac vice.

Issue.

Can the Delaware Court sanction out-of-state attorneys, and if not, what other remedies are available to sanction the misconduct of out-of-state attorneys in Delaware proceedings?

Held.

No, the Delaware Court cannot sanction out-of-state attorneys not admitted pro hac vice, but it will consider the attorney’s actions if it is fair to do so if the attorney seeks to be admitted pro hac vicein another Delaware Court proceeding in the future.

Discussion.

1. This was a deposition of Paramount through the director, thus the director was a Paramount witness in every respect.
2. Pursuant to Delaware court rules a Paramount witness was to be represented at the deposition by a Delaware lawyer or a lawyer admitted pro hac vice.
3. A Delaware lawyer who moves the admission pro hac vice of an out-of-state lawyer is not relieved of responsibility. They are  required to appear at all court proceedings except depositions when a pro hac vice lawyer is present and certifies that the lawyer appearing pro hac vice is reputable and competent.
4. One of the purposes of pro hac vice rule is to ensure that if a Delaware lawyer is not present that a lawyer admitted pro hac vice will be, in which time they are acting as an officer of the Delaware Court, subject to the control of the Court to ensure integrity of the proceeding.
5. Counsel for the director that attended the deposition had a responsibility to ensure the integrity of the deposition.
6. The kind of misconduct that occurred during the deposition is not to be tolerated in any Delaware court proceeding, even if the deposition occurs in another state and the witness is represented by their own counsel.
7. However, because Jamail was not admitted pro hac vice, there is no clear mechanism for the court to use to discipline Jamail.
8. The court will however consider (a) whether it is fair to take this behavior into account should Jamail apply in the future to appear pro hac vice in any Delaware proceeding. And (b) what rules should be adopted to deal with misconduct by out-of-state lawyers in depositions in proceedings pending in Delaware courts.
9. The court will allow Jamail to appear specially before the court within 30 days to explain his misconduct and why it should not bar his future appearance in a Delaware proceeding.