Published on:

Discovering the Precise Financial Stake of LLC Plaintiff’s Members and Litigation Funder: Court Rules in Favor of Defendants’ Motion to Compel Disclosure

by

In the case of Speyside Medical, LLC v. Medtronic CoreValve LLC et al, the district court recently granted the defendants’ motion to compel the plaintiff, Speyside Medical, to produce information regarding its members and litigation funder. The district court found such information relevant, emphasizing the importance of understanding the precise financial stake held by the plaintiff’s members in the outcome of the lawsuit.

Speyside Medical, LLC filed a lawsuit against Medtronic CoreValve LLC and other defendants. As the litigation unfolded, the defendants sought to compel Speyside Medical to disclose information about its members and its litigation funder. They argued that this information was crucial to understanding potential biases that may arise from financial interests in the case outcome.

In granting the defendants’ motion to compel disclosure, the district court stated, “Surely whether Plaintiff’s members have a financial interest in the outcome of this lawsuit is, as Defendants suggest, relevant to bias for purposes of future cross-examination of the members.” The district court emphasized the significance of understanding the precise financial stake held by the plaintiff’s members, considering the complexity of the financial arrangements involved.

The district court further explained, “[T]he ‘precise’ financial stake that the members will receive, under the circumstances here (i.e., when we know the members will share such funds with multiple groups, including counsel and a third-party funder) is also very relevant.” The district court acknowledged that the percentage each member stands to recover is instructive as to the weight of any allegation that their testimony may be biased by their ability to profit from the result of the case: As Defendants note, “[a] 1% stake will have a different impact on a witness than a 98% stake[.]” Put differently, whether the percentage that each member stands to recover is a tiny bit of the whole or nearly all of the whole (or something in between) is surely instructive as to the heft of any charge that their testimony may be biased by their ability to profit from the case result. This type of information helps contextualize what “winning” the case actually means for the members from a financial perspective, which is relevant in a scenario where multiple different parties will benefit from any recovery.

Accordingly, the district court granted the motion to compel.

 

Speyside Medical, LLC v. Medtronic CoreValve LLC et al, Case No. 1-20-cv-00361 (D. Del. May. 23, 2023)

 

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.