Preview
FILED: NEW YORK COUNTY CLERK 05/06/2022 04:11 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 696 RECEIVED NYSCEF: 05/06/2022
EXHIBIT 78
February 7, 2022 Email from Fiorello Refusing to
Respond to Cresco's Discovery Requests
Index No. 652343/2018
FILED: NEW YORK COUNTY CLERK 05/06/2022 04:11 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 696 RECEIVED NYSCEF: 05/06/2022
DRAFT
From: Rachel Izower-Fadde
Sent: Monday, February 7, 2022 3:41 PM
To: Hipp, Jason P.
Cc: SFC-Part53-Clerk; SFC PART. 53; Ronald Lefton; Arielle Kane; Ascher, Stephen L.;
Fedornak, Melissa
Subject: Re: Cresco Labs v. Fiorello Pharmaceuticals, # 652343/2018
External Email – Exercise Caution
Dear Mr. Kelly,
We represent Defendant Fiorello Pharmaceuticals, Inc. in the above-referenced matter. We write in response to
Friday’s email from counsel for Plaintiffs Cresco Labs, LLC and Cresco Labs New York, LLC.
On February 2 at 5:40 PM, Cresco sent “supplemental discovery requests” and a “deposition notice.” Cresco
had not expressed any intention to seek additional fact discovery since the last deposition was taken in this
matter on November 19, 2020. Nor did Cresco mention that it intended to seek additional discovery that
morning when it asked (and we agreed) to extend its deadline for responding to Fiorello’s CSEA-related
discovery requests pursuant to the Court’s January 21 Order on Fiorello’s motion to preclude (Seq. 13)
[NYSCEF_677].
First, Judge Borrok granted Fiorello permission to seek limited discovery in order to redress Cresco’s failure to
provide discovery related to the CSEA. Cresco’s new interest in discovery is not “a related issue” to the limited
discovery the Court directed on the CSEA. It is not covered by the Court’s January 21 Order and is not an issue
of reciprocity. Unlike Cresco, Fiorello abided by its discovery obligations and therefore Cresco is not entitled
to additional discovery.
Judge Borrok did not reopen discovery. If he had, Fiorello would seek discovery related to the unsupported
factual assumptions at the base of Cresco’s novel replacement cost damages claim and the Davidson Report,
including that Cresco was “forced” to buy a New York licensee, and what steps Cresco took to determine that
Valley was the only other available licensee, among other subjects.
Second, while Cresco suggests that its new discovery requests are simply the flip side of the same coin as
Fiorello’s requests regarding the CSEA, the two situations are not analogous. Cresco withheld documents it
was obligated to produce in discovery. It not only failed to produce the CSEA, it failed to produce any
documents reflecting that its deal with Valley included a payment contingent on legalization of adult
recreational cannabis use and its witnesses could not recall any details when asked about the contingency during
their depositions. In other words, Fiorello sought this information during discovery and it was not provided even
though the parties’ discovery agreements, so ordered by the Court, required Cresco to do so. Cresco’s actions
misled Fiorello about the terms of its deal with Valley. Fiorello believed in reliance on Cresco’s discovery
responses, that the terms of its merger with Valley had been disclosed in discovery, when in fact they had not
been.
In contrast, Cresco has known since the start of this litigation that the DOH approval requirement was an
important part of Fiorello’s defense. In its earliest filings in this case, Fiorello noted that any transaction
between the parties would be subject to DOH approval and that whether that approval would be given was
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FILED: NEW YORK COUNTY CLERK 05/06/2022 04:11 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 696 RECEIVED NYSCEF: 05/06/2022
entirely speculative. ([NYSCEF_34] at p. 1, 2, 4, 5, 15, 18 and [NYSCEF_98] at pp. 1, 3, 4, 5, 7, 9, 16, 17, 18,
& 21.) Further, the adult use contingency was indisputably material to the transaction contemplated by the LOI.
Fiorello did not withhold any documents or testimony that the parties agreed to produce. Cresco made a
strategic decision to exclude DOH communications from discovery, to ignore Fiorello’s disclosure of Jerome
Levy as a witness with knowledge of the DOH approval process for the GTI deal and not to ask any of
Fiorello’s witnesses any questions on the topic even though Fiorello sought information on the subject from
Cresco’s witnesses. Further, Cresco has had the Levy affidavit since July 2. Despite having ample opportunity
to do so, Cresco never requested additional discovery at any point during briefing on Fiorello’s motion or at oral
argument even when Justice Borrok made clear that he would allow Fiorello to take discovery on the CSEA
issue.
Cresco did not seek such discovery before this Court, and none is warranted. Fiorello respectfully requests the
Court deny Cresco's request for additional discovery.
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
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DRAFT