Preview
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
Exhibit T
October 14-November 1, 2021, Meet & Confer Email Exchange Between the Parties’
Litigation Counsel Re: Cresco’s Reliance on Documents Withheld from Discovery
Index No. 652343/2018 Motion Seq. No. __
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
Arielle Kane
RE: meet and confer follow up
1 message
Hipp, Jason P. Mon, Nov 1, 2021 at 2:40 PM
To: Rachel Izower-Fadde
Cc: Ronald Lefton , Arielle Kane , Dennis Villasana
, "Fedornak, Melissa" , "Ascher, Stephen L."
Rachel,
We write to address the issues your raised in your October 18 email.
Citation to privilege log
Cresco is entitled to rely on the fact of privileged communications, including as set forth in its privilege log, to prove
that certain events occurred. In doing so, Cresco has not waived privilege because it has not relied in any way on the
substance of those communications, let alone the underlying privileged information. Rather, Cresco is relying only on
the fact that it prepared certain documents at a certain point in time, which is precisely the non-privileged
information contained in the privilege log.
This is not a waiver, let alone a broad subject matter waiver. Waiver occurs only where a party “has asserted a claim
or defense that he intends to prove by use of the privileged materials,” or where the party has “disclos[ed] ... self-
serving communications.” Deutsche Bank Tr. Co. of Americas v. Tri-Links Inv. Tr., 43 A.D.3d 56, 63 (1st Dep’t 2007)
(emphases added). Here, Cresco has not used or disclosed any privileged materials or communications. Instead,
Cresco merely cited a handful of entries in its privilege log in a single paragraph of an affirmation to corroborate that
one of Cresco’s attorneys had prepared certain documents by certain dates. See Hipp Aff. ¶ 19. The existence of draft
documents, and the date of their creation, is not privileged. See Rauh v. Coyne, 744 F. Supp. 1181, 1185-86 (D.D.C.
1990) (disclosure of a brief description of an internal investigation report does not waive the privilege for the report
itself); see also Stein v. Tri-City Healthcare District, No. 12CV2524 BTM(BGS), 2014 WL 12695385, at *2 (S.D. Cal. Dec.
5, 2014) (the “attorney-client privilege attaches to the content of the communications between the client and
attorney, not the fact or general topic of the confidential communication.”).
If, notwithstanding this clear authority, you want to make a motion to compel production of the items denoted by the
privilege log entries in question, there is no reason to delay completion of the summary judgment motion while you
do so. The substance of the draft documents is irrelevant to the summary judgment motion. In short: If you think
the citations to the privilege log were improper, you can request that the Court disregard them on summary
judgment. And if you think there is a waiver, you can separately move for production of those documents.
DOH Approval of the Valley Deal
We also disagree with your contention that Cresco improperly inserted new facts into the record with respect to DOH
approval of the Valley deal. To the contrary, it is Fiorello that put new facts into the record in its summary judgment
papers. Fiorello first raised the argument that DOH would not have approved a deal that included a contingent
payment in its summary judgment papers, relying on new witness affidavits and six new exhibits that Fiorello had not
previously produced. Prior to summary judgment, Fiorello had never produced documents or testimony regarding
DOH’s approval of a contingent payment. Moreover, even now, Fiorello has not produced any document from the
DOH corroborating your contention that it would not have approved a deal that included a payment contingent on
adult legalization; you are relying only on the hearsay testimony of your own witnesses.
Cresco is obviously entitled to rebut Fiorello’s new argument and new evidence. To do so, Cresco put forth facts
showing that DOH approved Cresco’s deal with Valley, which included a contingent payment. Cresco relied on
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
deposition testimony and a single document that was not produced in discovery, consistent with a heavily negotiated
reciprocal agreement between the parties. Moreover, during discovery, Fiorello had the unimpeded opportunity to
question Cresco’s witnesses about this topic, and contrary to your misleading contention that they had no
recollection, Mr. Bachtell and Mr. Caltabiano both testified that the Valley deal included a payment contingent on the
status of adult use in New York. Bachtell Tr. 324:22-325:6; Caltabiano Tr. 141:22-142:8. To the extent that the
witnesses did not have as much information as you were seeking, you could have sought additional discovery on the
topic, but failed to do so.
Further, communications with DOH and the merger agreement documents were heavily negotiated, and were twice
the subject of court orders clarifying for the parties exactly what was required to be produced. NYSCEF Doc. Nos.
139, 141. Both parties produced precisely those documents that were the subject of a reciprocal agreement by the
parties or order by the Court.
In any case, in an effort to resolve this issue, and contingent upon your agreement to the firm deadlines for expert
discovery and note of issue detailed below, we are willing to agree to produce an additional document showing that
DOH was aware that Cresco’s deal with Valley included a contingent payment.
Cresco/Valley Merger Agreement
We also reject your allegations with respect to the Cresco/Valley Merger Agreement. To begin, your claim that we
violated a protective order is vastly overstated. The parties never finalized or executed an attorneys’ eyes only
agreement to govern Fiorello’s documents, as you never responded to our email of December 4, 2019, which
requested that Fiorello downgrade the attorneys’ eyes only designation you applied to a broad swath of documents,
and which stated that we would not agree to attorneys’ eyes only treatment until that issue was resolved.
Negotiations of the terms of the attorneys’ eyes only agreement and related undertaking were also ongoing, but we
never heard back from you.
However, as part of this global proposal to resolve these issues, Cresco will authorize GTI’s outside and in-house
counsel to view Cresco’s unredacted merger agreement with Valley – if you agree to the proposed schedule set forth
below. We are also prepared to authorize you to show that document to your expert, after you identify him or her. It
is entirely reasonable for us to request that identification in advance.
If you would also like to provide the merger agreement to Susan Yoss, Eric Sirota, and Ben Kovler, please confirm that
each remain members of Fiorello’s board of directors. Upon that confirmation, we will provide a version of the
agreement that redacts certain limited information that remains commercially sensitive notwithstanding the passage
of time (such as information concerning future earn-outs that remain in effect). The information that we intend to
redact is not relevant to the issues in dispute because we have not included the costs attributable to those provisions
as part of our damages calculation. Upon your confirmation of these terms, we will promptly prepare a redacted
version of the merger agreement.
Schedule
Finally, at the upcoming court conference, we intend to request the schedule below, under which summary judgment
briefing will be completed forthwith, and there are mandatory deadlines for expert discovery and note of issue:
· December 3: Deadline for Fiorello’s reply in support of its summary judgment motion
· December 3: Deadline for Fiorello’s opposition to Cresco’s summary judgment motion
· December 10: Return date for Fiorello’s summary judgment motion
· December 17: Deadline for Cresco’s reply in support of its summary judgment motion
· December 22: Deadline for Fiorello expert’s disclosure (if any)
· January 14: Return date for Cresco’s summary judgment motion
· January 21: Deadline to complete expert depositions
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
· January 28: Deadline to file note of issue
We believe that this schedule is entirely fair to both sides, gives you ample time both to respond to the summary
judgment motion and provide expert discovery, and will put this litigation on a typical track toward trial. As noted, if
you will agree to this schedule, we will resolve the other issues as noted above in order to eliminate the need for a
status conference.
Please confirm that our proposal satisfactorily resolves each of these issues without need for further litigation.
Best,
Jason
From: Rachel Izower-Fadde
Sent: Monday, October 18, 2021 4:15 PM
To: Hipp, Jason P.
Cc: Ronald Lefton ; Arielle Kane ; Dennis Villasana
; Fedornak, Melissa ; Ascher, Stephen L.
Subject: Re: meet and confer follow up
External Email – Exercise Caution
Dear Counsel,
The schedule you propose does not work for us for several reasons. Most importantly, it ignores key issues that must be
addressed before we serve our opposition and reply papers:
1. Cresco’s use of the attorney-client privilege as both a sword and a shield is entirely improper and, at this late point
in the litigation, wholly prejudicial to Fiorello.
Over three years of discovery, Cresco has withheld numerous
documents on the basis of attorney-client privilege, including internal communications with its general counsel,
John Figone, (who was playing a business role here) and with its outside counsel, Much Shelist. In addition to
withholding these documents, Cresco asserted attorney-client privilege objections during depositions, especially
throughout the depositions of Figone and Katherine Lewis, the attorney that had the lead role in working on the
draft definitive documents during the LOI period. Now, opposing summary judgment, Cresco relies on its 504-
entry privilege log to evidence its alleged good faith work on the deal documents during the LOI period. By doing
so, Cresco has put the contents of those documents at issue and thus broadly waived its privilege not just over the
504 documents listed in its privilege log, but also over their subject matter. .
2. Cresco’s reliance on the DOH’s approval of the Valley deal, with alleged knowledge that the deal contained an
adult-use contingency payment, despite refusing to provide this evidence in discovery is also improper. Here again,
Cresco refused to provide discovery about the reasons for DOH approval/denial of its deal with Valley. Cresco’s
witnesses were unprepared to testify about this topic in any detail during their depositions and, because Cresco
withheld these documents as irrelevant, we were unable to refresh their recollections. Cresco has never previously
taken the position in this litigation that the DOH approved the Valley deal with an adult contingency payment. We
also note that it is not at all clear that the DOH was ever aware of the adult use contingency in the Valley deal, as
it seems to have been added by amendment after the DOH approved Cresco’s merger with Valley. In any event it
is not apparent from any of the documents Cresco produced in discovery, but rather is set forth in a document that
Cresco failed to produce during discovery but now attaches to its summary judgment papers.
As I explained on our call last week, we intend to ask the court to preclude Cresco from making any argument that
Cresco was acting in good faith which stems from or is supported by the privilege log or the matters logged therein or
that the DOH approved the Valley deal with an adult contingency payment and to seek costs on that motion. As
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
alternative relief, we will ask the Court for an order holding that Cresco has waived the privilege with regard to the
subject matter of the documents on its privilege log and directing Cresco to produce all documents listed on the privilege
log and all documents concerning its communications with DOH about the Valley transaction. We will also seek an order
directing Cresco to re-produce its witnesses for deposition on these subjects and to cover all the costs associated with
reopening discovery.
We also anticipate asking the court to preclude Cresco’s expert report in whole or in part as irrelevant to the motion for
summary judgment and for relying on matters not disclosed in discovery.
The Court’s determination of those matters will necessarily impact the remaining briefing on the two summary judgment
motions. Time is needed for these issues to be presented to the Court and then for the Court to rule on them.
With regard to your request for “mutual expert discovery” it was Cresco’s decision to include an expert report as an
exhibit to its summary judgment papers. Given New York’s fairly narrow scope of expert disclosure and our consistent
view that expert discovery is not relevant to the issues we raised on summary judgment, we believe it is unnecessary and
wasteful to proceed with expert discovery at this time. We will not agree to provide Cresco with a surreply and the
Court’s rules are clear that surreplies are strongly discouraged.
Finally, as you know, Cresco designated its merger agreement with Valley as confidential and “attorneys’ eyes only.” In
light of the positions Cresco has taken in its opposition papers, we must be able to discuss the details of the Valley deal
as it changed over time with our clients and any expert that we may retain. We anticipate that there may be additional
documents that are designated AEO that we may similarly need Cresco to release from that heightened restriction. Since
the Valley deal closed two years ago, these documents cannot be as sensitive now as they were at the time. Please
confirm that Cresco will consent that unredacted versions of the Valley deal documents be treated simply as “confidential”
going forward, rather than as “AEO”. If Cresco is unwilling to do so, we will add this to the list of matters that we plan to
raise with the Court.
Here is our proposed schedule:
10/19/2021
The parties email the Court to request a conference to set a schedule for addressing several issues arising from Cresco’s
opposition to Fiorello’s motion for summary judgment and its "cross" motion for summary judgment (described below)
and to set a schedule for continuing briefing on the two summary judgment motions after those issues have been
resolved.
[T/B/D Dates]
The parties participate in a status/discovery conference with the Court or the Court’s Law Clerk to determine whether
these issues might be narrowed and to set schedules for briefing of the remaining issues. Summary judgment briefing
should be held in abeyance pending resolution of these issues.
[2nd half November]
Oral argument on Cresco’s appeal.
12/1/2021
Deadline for Fiorello to serve its opposition to Cresco’s cross motion for summary judgment. This deadline gives time for
briefing on the various disputes first so they should be in front of the Court by this time.
[T/B/D Dates]
Time for potential resolution of then-pending discovery motions; possible oral argument on same.
2/1/2021
Deadline for Fiorello to serve its reply in further support of summary judgment and for Cresco to serve its reply in further
support of its cross motion for summary judgment. This deadline will hopefully allow for resolution of the discovery
motions and for the parties to follow-up based on that resolution. Alternatively, it sets an outside date to ensure that
summary judgment motions will be completed and will not stay open indefinitely.
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
Rachel Izower-Faddé, Esq.
Izower Feldman, LLP
rizower@izowerfeldman.com
11 Broadway, Suite 615 ~ New York, NY 10004
Tel: (646) 448-9011~ Tel: (917) 494-7023 ~ Fax: (646) 304-7071
1325 Franklin Avenue, Suite 255 ~ Garden City, NY 11530
Tel: (516) 231-2260 ~ Tel: (917) 494-7023
~ Fax: (646) 304-7071
The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or
privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this
information by persons or entities other than the intended recipient is prohibited. If you received this transmission in error, please
contact the sender by reply e-mail or by telephone (646) 448-9011 and delete and destroy all copies of the material, including all
copies stored in the recipient's computer, printed, or saved to disk.
Disclosure Pursuant to Treasury Regulations in Circular 230: To ensure compliance with requirements imposed by the Internal
Revenue Service, we inform you that any tax advice contained in this communication (including any attachments) was not intended
or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or
(ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
On Fri, Oct 15, 2021 at 4:34 PM Hipp, Jason P. wrote:
Counsel,
We write to respond to the scheduling proposals you made during our meet-and-confer on October 12.
As an initial matter, you proposed that Fiorello should now take expert discovery of Cresco’s expert, to be
completed before December 1, while Fiorello would have a deadline of February 1 to first identify its expert and
produce an expert report (130 days after Cresco identified its expert and produced its expert report). You did not
propose any period for Cresco to take discovery of Fiorello’s expert. We cannot agree to allow Fiorello one-sided
expert discovery. As you know, Cresco has long insisted that expert discovery should take place prior to summary
judgment, as is the usual practice in the Commercial Division, and Fiorello refused to negotiate a schedule for
doing so. After filing a summary judgment motion, you now have proposed a schedule that allows Fiorello, but not
Cresco, to take expert discovery. Also, we should have the right in a sur-reply brief to address issues raised by
Fiorello’s expert. We therefore propose the following schedule for mutual expert discovery:
· November 23 (60 days after Cresco produced its expert report): Fiorello to identify its expert and produce its
expert report
· December 21: Completion of expert discovery, including expert depositions
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
Subject to your agreement on mutual expert discovery, we would agree to the following dates for the remaining
summary judgment briefs:
· December 1, 2021: Fiorello’s opposition to Cresco’s summary judgment motion
· February 1, 2022: Fiorello’s reply in further support of its summary judgment motion
· February 15, 2022: Cresco’s reply in further support of its summary judgment motion, and its sur-reply solely
to address issues raised by Fiorello’s expert report
You also requested that Cresco produce documents relied on by Cresco’s expert in forming the opinions in his
report. The documents Mr. Davidson relied on are listed in his report (Exhibit 71) in Appendix B, and all of these
documents have already been produced or are otherwise available to you.
You also requested that Cresco produce certain additional documents related to Valley and/or DOH and indicated
that, if Cresco did not do so, you would move to preclude certain evidence or arguments raised in Cresco’s
summary judgment brief(s). Please send us written document requests so that we can consider your request with
specificity.
We will get back to you next week with respect to the privilege log issue you raised.
Best,
Jason
From: Rachel Izower-Fadde
Sent: Thursday, October 14, 2021 3:31 PM
To: Hipp, Jason P.
Cc: Fedornak, Melissa ; Ascher, Stephen L. ; Ronald Lefton
; Arielle Kane ; Dennis Villasana
Subject: Re: meet and confer follow up
External Email – Exercise Caution
Ok - can we plan to talk sometime tomorrow?
Rachel Izower-Faddé, Esq.
Izower Feldman, LLP
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
rizower@izowerfeldman.com
11 Broadway, Suite 615 ~ New York, NY 10004
Tel: (646) 448-9011~ Tel: (917) 494-7023 ~ Fax: (646) 304-7071
1325 Franklin Avenue, Suite 255 ~ Garden City, NY 11530
Tel: (516) 231-2260 ~ Tel: (917) 494-7023
~ Fax: (646) 304-7071
The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential
and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon,
this information by persons or entities other than the intended recipient is prohibited. If you received this transmission in error,
please contact the sender by reply e-mail or by telephone (646) 448-9011 and delete and destroy all copies of the material,
including all copies stored in the recipient's computer, printed, or saved to disk.
Disclosure Pursuant to Treasury Regulations in Circular 230: To ensure compliance with requirements imposed by the Internal
Revenue Service, we inform you that any tax advice contained in this communication (including any attachments) was not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
On Thu, Oct 14, 2021 at 3:02 PM Hipp, Jason P. wrote:
Rachel,
We have been conferring with our client on your requests, but require additional time given the number of
issues you raised for the first time on Tuesday’s call. We are not in a position to agree on dates in the absence of
an agreement on the appropriate next steps in this case. We are not intending to jam you, but it seems possible
that certain issues will end up before the Court. We will get back to you as soon as possible.
Thanks,
Jason
From: Rachel Izower-Fadde
Sent: Thursday, October 14, 2021 9:44 AM
To: Hipp, Jason P.
Cc: Fedornak, Melissa ; Ascher, Stephen L. ; Ronald
Lefton ; Arielle Kane ; Dennis Villasana
Subject: meet and confer follow up
External Email – Exercise Caution
Dear Jason,
I'm writing to follow up on Monday's call. As we discussed, Ron is leaving for Egypt tomorrow and we would like to
have some sort of agreement regarding the 11/12 deadline in place before then.
FILED: NEW YORK COUNTY CLERK 12/14/2021
01/10/2022 11:15
06:59 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 249
455 RECEIVED NYSCEF: 12/14/2021
01/10/2022
Rachel Izower-Faddé, Esq.
Izower Feldman, LLP
rizower@izowerfeldman.com
11 Broadway, Suite 615 ~ New York, NY 10004
Tel: (646) 448-9011~ Tel: (917) 494-7023 ~ Fax: (646) 304-7071
1325 Franklin Avenue, Suite 255 ~ Garden City, NY 11530
Tel: (516) 231-2260 ~ Tel: (917) 494-7023
~ Fax: (646) 304-7071
The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential
and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance
upon, this information by persons or entities other than the intended recipient is prohibited. If you received this transmission
in error, please contact the sender by reply e-mail or by telephone (646) 448-9011 and delete and destroy all copies of the
material, including all copies stored in the recipient's computer, printed, or saved to disk.
Disclosure Pursuant to Treasury Regulations in Circular 230: To ensure compliance with requirements imposed by the
Internal Revenue Service, we inform you that any tax advice contained in this communication (including any attachments)
was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the
Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed
herein.
Jason P. Hipp
Jenner & Block LLP
919 Third Avenue, New York, NY 10022-3908 | jenner.com
+1 212 407 1784 | TEL
Pronouns: He / Him
JHipp@jenner.com
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