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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
--- --------------------- ------------X
PAMELA GOLDSTEIN, ELLYN & TONY BERK,
as Administrators of the Estate of Winifred Berk,
and PAUL BENJAMIN, on behalf of themselves
and all other similarly situated, Index No. 60767/2018
Plaintiffs,
Hon. Linda S. Jamieson
-against-
HOULIHAN/LAWRENCE INC.,
Defendants.
----------------------- X
SECOND REPORT AND RECOMMENDATION
OF DISCOVERY REFEREE
DATED JANUARY 21, 2020
William P. Harriñgtcñ, Esq.
Bleakley Platt & Schmidt, LLP
One North Lexington Avenue
White Plains, NY 10601
(914) 949-2700
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
_____ ______ _____ ----X
PAMELA GOLDSTEIN, ELLYN & TONY BERK,
as Administrators of the Estate of Winifred Berk,
and PAUL BENJAMIN, on behalf of themselves
and all other similarly situated, Index No. 60767/2018
Plaintiffs,
Hon. Linda S. Jamieson
-against-
HOULIHAN/LAWRENCE INC.,
Defendants.
------------------------------ ----X
SECOND REPORT AND RECOMMENDATION
OF DISCOVERY REFEREE
INTRODUCTION
In this putative class action, defendant Houlihan Lawrence Inc. ("HLI") seeks a
protective order pursuant to CPLR 3103 to preclude any further class certification discovery.
(Ex. 1.) In the alternative, HLI requests that I issue an order staying any further discovery until
6.)1
the Court rules on HLI's protective order motion. (Ex. 2, p.
Plaintiffs argue that additional discovery is required because plaintiffs have not ". . .
deposition."
obtained basic documents from key executives and file locations or taken a single
(Ex. 2, p. 1.)
1 The submissions were considered: November 2019 of
letter M. Esq. (Ex.
following (1) 14, Philip Halpern,
1 toAppendix); (2) December 5, 2019 letterof Jeremy Vest, Esq. (Ex. 2);and (3)December 13,2019 letterof Philip
M. Halpern, Esq. (Ex. 3.)
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PROCEDURAL HISTORY
By order dated May 8, 2019, I was appointed Special Master. Since then, I conducted
multiple discovery conferences and conference calls with counsel to address ongoing discovery
disputes between the parties.
In those conferences and calls I have issued rulings consistent with the well settled
"proportionality"
standard governing pretrial discovery in general and pre-class certification
discovery in particular. In so doing, I have denied certain categories of discovery sought by
plaintiffs, limited others, and sought clarification from HLI regmding others.
DISCUSSION
I. The Court's Prior Decision
In arguing that HLI's existing discovery production is sufficient under CPLR 901, et al.,
plaintiffs'
HLI relies heavily on the following language of the Court in discussing General
Business Law § 349 claim, essentially arguing any class certification motion is destined to fail:
To analyze the ultimate efficacy of each claim, this Court will be
called upon to determine what was said and what disclosure, if any,
were made to each plaintiff during the relationship with Houlihan
Lawrence. Each of these transactions are separate, different people
were involved, and undoubtedly different things were said and
communicated. While the alleged commonality between these
plaintiffs may be alleged non-disclosure, the ultimate resolution of
the claims can only be determined by individual analysis of each
transaction, and to a certain extent each transaction can be
considered unique.
(Ex. 4, p. 12.)
Notwithstanding the foregoing language, the Court denied HLI's motion to dismiss the
test"
GBL § 349 claim. The Court held that there was no "bright line in construing what
oriented"
constitutes actionable "consumer conduct under GBL § 349:
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As the Second Department recognized in the decision of Teller v.
Bill Hayes, Ltd., 213 A.D.2d 141, 630 N.y.S.2d 769 (2d Dept. 1995),
a Court can be oresented with a case that exhibits characteristics of
a single-shot, unique transaction as well as a consumer-oriented
transaction. and the Court is necessarily required to balance the
interests in making itsdecision.
Underlying this dichotomy is the concern and protection of the
consuming public for which GBL Section 349 was enacted. On the
other hand, disputes involving private parties who have entered into
separate arrangements should not have to be held answerable to the
remedies afforded in GBL § 349. See Oswego, supra ("In
explicating the legislative objective behind section 349, we are
mindful of the potential for a tidal wave of litigation against
businesses that was not intended by the Legislature").
Ultimately, as the Second Department has dictated, this Court is
to consider whether the alleged acts or practices have a broad impact
on consumers at large.
The allegations made by the plaintiffs, which this Court must
accept as true at this stage of the litigation, state that the practices of
Houlihan Lawrence are pervasive, have and will affect many others,
and Houlihan Lawrence has promoted its practices. See, e.g.,
Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 725 N.E.2d
598, 704 N.Y.S.2d 177 (1999); Karlin v. IVF Am., 93 N.Y.2d 282,
712 N.E.2d 662, 690 N.Y.S.2d 495 (1999). Of course, if discovery
in this matter proves otherwise, this Court will certainly revisit this
issue upon the proper application.
Defendant further argues that GBL § 349 does not apply to real
estate transactions or to transactions involving the sums presented
herein. The Court believes that real estate transactions are not
excluded from the protections of the statute. See Polonestsky v.
Better Homes Depot, Inc., 97 N.Y.2d 46, 760 N.E.d2d [sic] 1274,
735 N.Y.S.2d 479 (2001). . .
(Ex. D, pp. 15-16) (emphasis added.)
In light of the the appropriate scope of pre-class certification discovery must be
above,
interests"
based upon the "balance[ing] of articulated by the Court.
In HLI argues enough is enough, that plaintiffs have received over 60,000 pages
essence,
of documents which is more than sufficient to move for class certification. Further, in effect,
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HLI argues that plaintiffs cannot meet the CPLR 901 class certification criteria given the Court's
aforecited observation. (Supra, p. 2.)
Plaintiffs respond that the information they have received has been either useless or given
them insight into appropriate discovery sources needed to prove that HLI's dual agency program
is a pervasive, promoted institutional practice which has and will impact the public at large.
Based upon this Court's prior holding, plaintiffs have a right to discovery in an effort to establish
class certification of its GBL § 349 claim. The question is how much?
"proportionality"
The standard for pre-class certification discovery is well settled and
need not be repeated. Both sides cite cases supporting their respective position, yet none of the
aforesaid cases is dispositive. The propriety of pre-class certification discovery is suigeneres.
line"
As noted by the Court, this case does not involve a "bright analysis but rather a thoughtful
balancing of the interests under GBL § 349.
While plaintiffs are not entitled to allthe discovery they seek, plaintiffs have yet to
receive sufficient discovery to flesh out the potential existence of HLI's alleged institutional dual
agency practices which may support class certification. The mere fact HLI has produced 60,000
documents to date is not dispositive. Discovery is an iterative process based upon the real time
evaluation of information that is produced. Parties are permitted, indeed attorneys are
compelled, to pivot as required based upon the evaluation of information received in discovery.
During the October 22, 2019 meet and confer with the parties, HLI announced its
intention to seek a global protective order based upon Tozzi v. Jack, 169 A.D.3d 547, 92
(1st changer."
N.Y.S.3d 648 Dept. 2019), the case as a "game I do not believe that to
describing
be the case as Tozzi merely reinforces the proposition that sophisticated parties are bound by the
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terms of executed agreements. As noted by plaintiffs, Tozzi was issued before the Court
long
issued its April 2019 Motion to Dismiss decision.
plaintiffs'
At the October 22, 2019 conference, I reviewed and ruled upon each of
discovery requests, rejecting some, limiting others and seeking clarification regarding the
remaining requests. As stated above, given this Court's prior ruling on the Motion to Dismiss, I
believe plaintiffs are entitled to some tailored additional discovery. The below issues remain.
Therefore, I recommend HLI's protective order motion be denied and further recommend the
plaintiffs'
Court rule as follows with respect to renmining discovery demands:
(1) HLI Custodians Jim Gricar and Toni Crystal
HLI should produce search terms hit counts from its search of HLI executives Gricar and
Crystal;
(2) HLI Coroorate Policy re: Dual Agency
HLI should produce documents regarding the HLI corporate policy, if any, regarding the
institutional irsplementation, rationale and training regarding dual agency;
(3) In-House Bonus Email
HLI shall produce internal emails from Scarsdale, Bronxville and White Plains offices
"bonus"
regarding any HLI institutional dual agency program. Such production must be subject
to negotiated mutually agreeable search terms. Absent same, the Discovery Referee or the Court
will impose same;
"Pocket" Transactions2
(4) Non-MLS or
HLI shall produce a subset of the transaction sample files (the number of which shall be
"pocket"
negotiated or established by the Discovery Referee) of the 1,000 non-MLS or
2 "Pocket" on the
transactionsare HLI in-house salesthat are co-mmated before the property is listed
MLS for review by general public.
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transactions identified for the first time by prior HLI document productions. Such request is not
late"
"too as argued by HLI;
(5) Show Time Recorts
coñtact"
Show Time Reports are a database which reflects HLI's first "substantive with a
client regarding a property. Plaintiff alleges these reports will "permit plaintiffs to assess
whether [HLI] made timely [dual agency] disclosure before acting as a dual agent in each sample
transaction."
(Ex. 2, p. 9.) This type of granular discovery at this stage of the litigation is
inappropriate and not reasonably likely to lead to the discovery of evidence of a pervasive
institutional policy generally harmful to the public relevant to the class certification standards
under CPLR 901. If and when class certification is granted, such discovery may be appropriate.
Therefore, such discovery should be denied at this time.
CONCLUSION
Accordingly, I respectfully report and recommend that the Court deny the global
protective order sought by HLI and proceed as set forth above.
Dated: White Plains, NY
January 21, 2020
S T S TTED,
William P. Harrin on, sq.
Discovery Refere
TO: All Counsel via NYSCEF
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COLLIER HALPERN & NEWBERG, LLP
ONE NORTH LEXINGTON AVENUE
WHITE PLAINS, NEW YORK 10601
(914) 684-6800
FAx (914) 684-6986
http://mvw.chnnb.com
PHILIP M. HALPERN (ALSOCT) NEW YORK OFFICE:
DAVID A. NEWBERG 275.MADISONAVENUE, SUITE 617
HARRYJ. NICOLAY, JR. (ALSO NJ) NEW VORK, NEW YORK 10016
SCOTTM. SALANT (ALSOMA) (212)481-1300
November 14, 2019 FAX: (212)6964064
SHARI B..HOCHBERG (ALSO NJ) . CONNECTICUT OFFICE:
LORENZO VENDITTI SUMMERSTREET
1111
STAMFORD,CT 06905
(203)348-5255
JAY C. CARLISLE II
SENIOR COUNSEL
WILLIAM J. COLLIER, JR, (ALSO CT) PAULJ. MONSELL (1948-1993)
HON. PETER P. ROSATO(ret.) DONALD L. WALLACE (1925-2002)
LEWISW. SIEGEL
COUNSEL
Via E-Mail
William P. Harrington, Esq.
Bleakley Platt & Schmidt, LLP
One North Lexington Avenue
White Plains, NY 10601
Re: Goldstein et al. v. Houlihan Lawrence, Inc.
No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty,)
Dear Mr. Harrington:
We write to seek your recommendation to enter a protective order barring further discovery prior
Plaintiffs'
to the resolution of anticipated motion for class certification. Houlihan has produced more
than 66,000 pages of documents covering approximately 400 transactions across 23 New York offices.
The Court has provided guidance that the transactions at issue are unique and therefore the claims will
require individualized inquiry to resolve. Given these circumstances, Plaintiffs have more than enough
infom1ation to determine whether they have a good faith basis to file a motion for class certification in
this case. Unless the Court determines certification is warranted, no further discovery is proportional to
the needs of the case.
L Legal Standard.
A. Proportional Discovery Is Required.
The Commercial Division rules contemplate proportionality in discovery and electronic
discovery both from parties and non-parties. See, e.g., Preamble (2); Rule 11-c; 11-e(f); Appendix A.
CPLR § 3103(a) provides a Court with the authority to issue a protective order to regulate discovery and
prevent certain discovery abuses. CPLR § 3103(a) provides:
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November 14, 2019
Page 2
(a) Prevention of abuse, The court inay at any time on itsown initiative,or
on motion of any party or of any person from whom or about whom
discovery is sought, make a protective order denying, limiting,
conditioning or regulating the use of any disclosure device. Such order
shall be designed to prevent unreasonable annoyance, expense,
embarrassment, disadvantage, or other prejudice to any person or the
courts.
Authority to control and supervise the scope of discovery through the use of protective orders is
well established. Matter of Carothers v. Ins. Cos. Represented by Bruno, Gerbino & Soriano LLP, 13
Misc.3d 970, 825 N.Y.S.2d 632 (Civ. Ct. Richmond Co. 2006); In re U.S. Pioneer Electronics. Corp.,
47 N.Y.2d 914, 419 N.Y.S.2d 484 (1979). "While CPLR 3101(a) provides that '[t]here shall be full
action,'
disclosure of allmatter material and necessary in the prosecution ...of an the principle of full
disclosure."
disclosure does not give a party the right to uncontrolled and unfettered D'Adamo v. Saint
Dominic's Home, 87 A.D.3d 966, 969-70, 929 N.Y.S.2d 301, 304 (2d Dep't 2011).
"[U]nder our discovery statutes and case law, competing interests must always be balanced; the
party."
need for discovery must be v/eighed against any special burden to be borne by the opposing
Kavanagh v. Ogden Alliance Maintenance Corp., 92 N.Y.2d 952, 683 N.Y.S.2d 156 (1998) (quoting
O'Neill v. Oakgrove Construction, 71 N.Y.2d 521, 529, 528 N.Y.S.2d 1 (1988)).
B. CPLR 901 and 902 Limit Discovery Prior to a Class Certification Motion.
No class has been certified. Nevertheless, Plaintiffs from the outset have sought discovery into
members'
the merits of the putative class claims irnposing an undue and disproportionate burden on
Houlihan of defending this litigation.
CPLR 901 and 902 contemplate a prompt resolution of class certification issues. CPLR 902
requires a plaintiff to move for class certification within sixty days of "the time to serve a responsive
expired."
pleading has This sixty day window obviously contemplates limited, not unfettered,
discovery. Alvarez v Just Salad LLC, No. 161121/2017, 2019 WL 1975551, at *2 (N.Y. Sup. Ct. Apr.
24, 2019) (barring putative class representative's broad pre-certification discovery as not "material and
necessary"
to certification; "at some point plaintiffs must come forward with their proof and move to
certify the class"); Severin v Platinum Home Health Care Inc.,No. 153301/2017, 2017 WL 4168213, at
*l (N.Y. Sup. Ct. Sep. 15, 2017) (refusing to postpone certification-motion deadline, finding that
"showing"
plaintiff made no of further "need to conduct class certification discovery").
Appropriate discovery prior to class certification is discovery sufficient to evaluate the
prerequisites to class certification under CPLR 901 and the additional factors relevant to the certification
decision under CPLR 902, no more. See Gewanter v. Quaker State Oil Ref Corp., 87 A.D.2d 970, 970,
450 N.Y.S.2d 93, 94 (4th Dep't 1982) (pre-certification discovery is "limited to ascertaining only those
facts which are necessary to support an application for class status"); see also Martin v Palisades
No. 2012 WL 2930791 (N.Y. Sup. Ct. June pre-
Collection, LLC, 116099/2010, 27, 2012) (barring
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FILED: WESTCHESTER COUNTY CLERK 07/20/2020 04:40 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 608 RECEIVED NYSCEF: 07/20/2020 EXHIBIT5 FILED:: IFILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 07/20/2020 01/22/2020 04:40 09:40 PM AM| INDEX INDEX NO. NO. 60767/2018 60767/2018 NYSCEF NYSCEF DOC. DOC. NO. NO. 608 562 RECEIVED RECEIVED NYSCEF: NYSCEF: 07/20/2020 01/22/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER --- --------------------- ------------X PAMELA GOLDSTEIN, ELLYN & TONY BERK, as Administrators of the Estate of Winifred Berk, and PAUL BENJAMIN, on behalf of themselves and all other similarly situated, Index No. 60767/2018 Plaintiffs, Hon. Linda S. Jamieson -against- HOULIHAN/LAWRENCE INC., Defendants. ----------------------- X SECOND REPORT AND RECOMMENDATION OF DISCOVERY REFEREE DATED JANUARY 21, 2020 William P. Harriñgtcñ, Esq. Bleakley Platt & Schmidt, LLP One North Lexington Avenue White Plains, NY 10601 (914) 949-2700 1 of 7 INDEX INDEX NO. NO. 607 67 /2018 60767/2018 FILED:: IFILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09:40 PM AM| NYSCEF NYSCEF DOC. DOC. NO. NO. 562 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/2020 07/20/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER _____ ______ _____ ----X PAMELA GOLDSTEIN, ELLYN & TONY BERK, as Administrators of the Estate of Winifred Berk, and PAUL BENJAMIN, on behalf of themselves and all other similarly situated, Index No. 60767/2018 Plaintiffs, Hon. Linda S. Jamieson -against- HOULIHAN/LAWRENCE INC., Defendants. ------------------------------ ----X SECOND REPORT AND RECOMMENDATION OF DISCOVERY REFEREE INTRODUCTION In this putative class action, defendant Houlihan Lawrence Inc. ("HLI") seeks a protective order pursuant to CPLR 3103 to preclude any further class certification discovery. (Ex. 1.) In the alternative, HLI requests that I issue an order staying any further discovery until 6.)1 the Court rules on HLI's protective order motion. (Ex. 2, p. Plaintiffs argue that additional discovery is required because plaintiffs have not ". . . deposition." obtained basic documents from key executives and file locations or taken a single (Ex. 2, p. 1.) 1 The submissions were considered: November 2019 of letter M. Esq. (Ex. following (1) 14, Philip Halpern, 1 toAppendix); (2) December 5, 2019 letterof Jeremy Vest, Esq. (Ex. 2);and (3)December 13,2019 letterof Philip M. Halpern, Esq. (Ex. 3.) 2 of 7 INDEX INDEX NO. NO. 6 0 7 6 7 / 2 0 18 60767/2018 FILED:: [FILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09:40 PM AMI NYSCEF NYSCEF DOC. DOC. NO. NO. 562 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/2020 07/20/2020 PROCEDURAL HISTORY By order dated May 8, 2019, I was appointed Special Master. Since then, I conducted multiple discovery conferences and conference calls with counsel to address ongoing discovery disputes between the parties. In those conferences and calls I have issued rulings consistent with the well settled "proportionality" standard governing pretrial discovery in general and pre-class certification discovery in particular. In so doing, I have denied certain categories of discovery sought by plaintiffs, limited others, and sought clarification from HLI regmding others. DISCUSSION I. The Court's Prior Decision In arguing that HLI's existing discovery production is sufficient under CPLR 901, et al., plaintiffs' HLI relies heavily on the following language of the Court in discussing General Business Law § 349 claim, essentially arguing any class certification motion is destined to fail: To analyze the ultimate efficacy of each claim, this Court will be called upon to determine what was said and what disclosure, if any, were made to each plaintiff during the relationship with Houlihan Lawrence. Each of these transactions are separate, different people were involved, and undoubtedly different things were said and communicated. While the alleged commonality between these plaintiffs may be alleged non-disclosure, the ultimate resolution of the claims can only be determined by individual analysis of each transaction, and to a certain extent each transaction can be considered unique. (Ex. 4, p. 12.) Notwithstanding the foregoing language, the Court denied HLI's motion to dismiss the test" GBL § 349 claim. The Court held that there was no "bright line in construing what oriented" constitutes actionable "consumer conduct under GBL § 349: 2 3 of 7 FILED:: IFILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 07/20/2020 01/22/2020 04:40 09:40 PM AM| INDEX INDEX NO. NO. 60767/2018 60767/2018 NYSCEF NYSCEF DOC. DOC. NO. NO. 608 562 RECEIVED RECEIVED NYSCEF: NYSCEF: 07/20/2020 01/22/2020 As the Second Department recognized in the decision of Teller v. Bill Hayes, Ltd., 213 A.D.2d 141, 630 N.y.S.2d 769 (2d Dept. 1995), a Court can be oresented with a case that exhibits characteristics of a single-shot, unique transaction as well as a consumer-oriented transaction. and the Court is necessarily required to balance the interests in making itsdecision. Underlying this dichotomy is the concern and protection of the consuming public for which GBL Section 349 was enacted. On the other hand, disputes involving private parties who have entered into separate arrangements should not have to be held answerable to the remedies afforded in GBL § 349. See Oswego, supra ("In explicating the legislative objective behind section 349, we are mindful of the potential for a tidal wave of litigation against businesses that was not intended by the Legislature"). Ultimately, as the Second Department has dictated, this Court is to consider whether the alleged acts or practices have a broad impact on consumers at large. The allegations made by the plaintiffs, which this Court must accept as true at this stage of the litigation, state that the practices of Houlihan Lawrence are pervasive, have and will affect many others, and Houlihan Lawrence has promoted its practices. See, e.g., Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 725 N.E.2d 598, 704 N.Y.S.2d 177 (1999); Karlin v. IVF Am., 93 N.Y.2d 282, 712 N.E.2d 662, 690 N.Y.S.2d 495 (1999). Of course, if discovery in this matter proves otherwise, this Court will certainly revisit this issue upon the proper application. Defendant further argues that GBL § 349 does not apply to real estate transactions or to transactions involving the sums presented herein. The Court believes that real estate transactions are not excluded from the protections of the statute. See Polonestsky v. Better Homes Depot, Inc., 97 N.Y.2d 46, 760 N.E.d2d [sic] 1274, 735 N.Y.S.2d 479 (2001). . . (Ex. D, pp. 15-16) (emphasis added.) In light of the the appropriate scope of pre-class certification discovery must be above, interests" based upon the "balance[ing] of articulated by the Court. In HLI argues enough is enough, that plaintiffs have received over 60,000 pages essence, of documents which is more than sufficient to move for class certification. Further, in effect, 3 4 of 7 FILED:: IFILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 07/20/2020 01/22/2020 04:40 09: 40 PM AM| INDEX INDEX NO. NO. 60767/2018 60767/2018 NYSCEF NYSCEF DOC. DOC. NO. NO. 608 562 RECEIVED RECEIVED NYSCEF: NYSCEF: 07/20/2020 01/22/2020 HLI argues that plaintiffs cannot meet the CPLR 901 class certification criteria given the Court's aforecited observation. (Supra, p. 2.) Plaintiffs respond that the information they have received has been either useless or given them insight into appropriate discovery sources needed to prove that HLI's dual agency program is a pervasive, promoted institutional practice which has and will impact the public at large. Based upon this Court's prior holding, plaintiffs have a right to discovery in an effort to establish class certification of its GBL § 349 claim. The question is how much? "proportionality" The standard for pre-class certification discovery is well settled and need not be repeated. Both sides cite cases supporting their respective position, yet none of the aforesaid cases is dispositive. The propriety of pre-class certification discovery is suigeneres. line" As noted by the Court, this case does not involve a "bright analysis but rather a thoughtful balancing of the interests under GBL § 349. While plaintiffs are not entitled to allthe discovery they seek, plaintiffs have yet to receive sufficient discovery to flesh out the potential existence of HLI's alleged institutional dual agency practices which may support class certification. The mere fact HLI has produced 60,000 documents to date is not dispositive. Discovery is an iterative process based upon the real time evaluation of information that is produced. Parties are permitted, indeed attorneys are compelled, to pivot as required based upon the evaluation of information received in discovery. During the October 22, 2019 meet and confer with the parties, HLI announced its intention to seek a global protective order based upon Tozzi v. Jack, 169 A.D.3d 547, 92 (1st changer." N.Y.S.3d 648 Dept. 2019), the case as a "game I do not believe that to describing be the case as Tozzi merely reinforces the proposition that sophisticated parties are bound by the 4 5 of 7 INDEX INDEX NO NO.. 0 7 6 7 / 2 0 18 660767/2018 FILED: IFILED : WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09:40 PM AM| NYSCEF NYSCEF DOC. DOC. NO. NO. 562 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/2020 07/20/2020 terms of executed agreements. As noted by plaintiffs, Tozzi was issued before the Court long issued its April 2019 Motion to Dismiss decision. plaintiffs' At the October 22, 2019 conference, I reviewed and ruled upon each of discovery requests, rejecting some, limiting others and seeking clarification regarding the remaining requests. As stated above, given this Court's prior ruling on the Motion to Dismiss, I believe plaintiffs are entitled to some tailored additional discovery. The below issues remain. Therefore, I recommend HLI's protective order motion be denied and further recommend the plaintiffs' Court rule as follows with respect to renmining discovery demands: (1) HLI Custodians Jim Gricar and Toni Crystal HLI should produce search terms hit counts from its search of HLI executives Gricar and Crystal; (2) HLI Coroorate Policy re: Dual Agency HLI should produce documents regarding the HLI corporate policy, if any, regarding the institutional irsplementation, rationale and training regarding dual agency; (3) In-House Bonus Email HLI shall produce internal emails from Scarsdale, Bronxville and White Plains offices "bonus" regarding any HLI institutional dual agency program. Such production must be subject to negotiated mutually agreeable search terms. Absent same, the Discovery Referee or the Court will impose same; "Pocket" Transactions2 (4) Non-MLS or HLI shall produce a subset of the transaction sample files (the number of which shall be "pocket" negotiated or established by the Discovery Referee) of the 1,000 non-MLS or 2 "Pocket" on the transactionsare HLI in-house salesthat are co-mmated before the property is listed MLS for review by general public. 5 6 of 7 INDEX INDEX NO. NO. 60767/2018 60767/2018 FILED:: IFILED WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09: 40 PM AM) NYSCEF NYSCEF DOC. DOC. NO. NO. 562 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/2020 07/20/2020 transactions identified for the first time by prior HLI document productions. Such request is not late" "too as argued by HLI; (5) Show Time Recorts coñtact" Show Time Reports are a database which reflects HLI's first "substantive with a client regarding a property. Plaintiff alleges these reports will "permit plaintiffs to assess whether [HLI] made timely [dual agency] disclosure before acting as a dual agent in each sample transaction." (Ex. 2, p. 9.) This type of granular discovery at this stage of the litigation is inappropriate and not reasonably likely to lead to the discovery of evidence of a pervasive institutional policy generally harmful to the public relevant to the class certification standards under CPLR 901. If and when class certification is granted, such discovery may be appropriate. Therefore, such discovery should be denied at this time. CONCLUSION Accordingly, I respectfully report and recommend that the Court deny the global protective order sought by HLI and proceed as set forth above. Dated: White Plains, NY January 21, 2020 S T S TTED, William P. Harrin on, sq. Discovery Refere TO: All Counsel via NYSCEF 6 7 of 7 INDEX INDEX NO. NO. 60767/2018 60767/2018 FILED: IFILED: WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09:40 PM AM| NYSCEF NYSCEF DOC. DOC. NO. NO. 563 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/2020 07/20/2020 EXHIBIT 1 INDEX INDEX NO. NO. 60767/2018 60767/2018 FILED FILED: : WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09: 40 PM AM| NY SCE F NYSCEF DOC DOC.. NO. NO. 563 608 RECE IVE RECEIVED D NY SCE F: NYSCEF: 01/22/20 07/20/2020 0 COLLIER HALPERN & NEWBERG, LLP ONE NORTH LEXINGTON AVENUE WHITE PLAINS, NEW YORK 10601 (914) 684-6800 FAx (914) 684-6986 http://mvw.chnnb.com PHILIP M. HALPERN (ALSOCT) NEW YORK OFFICE: DAVID A. NEWBERG 275.MADISONAVENUE, SUITE 617 HARRYJ. NICOLAY, JR. (ALSO NJ) NEW VORK, NEW YORK 10016 SCOTTM. SALANT (ALSOMA) (212)481-1300 November 14, 2019 FAX: (212)6964064 SHARI B..HOCHBERG (ALSO NJ) . CONNECTICUT OFFICE: LORENZO VENDITTI SUMMERSTREET 1111 STAMFORD,CT 06905 (203)348-5255 JAY C. CARLISLE II SENIOR COUNSEL WILLIAM J. COLLIER, JR, (ALSO CT) PAULJ. MONSELL (1948-1993) HON. PETER P. ROSATO(ret.) DONALD L. WALLACE (1925-2002) LEWISW. SIEGEL COUNSEL Via E-Mail William P. Harrington, Esq. Bleakley Platt & Schmidt, LLP One North Lexington Avenue White Plains, NY 10601 Re: Goldstein et al. v. Houlihan Lawrence, Inc. No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty,) Dear Mr. Harrington: We write to seek your recommendation to enter a protective order barring further discovery prior Plaintiffs' to the resolution of anticipated motion for class certification. Houlihan has produced more than 66,000 pages of documents covering approximately 400 transactions across 23 New York offices. The Court has provided guidance that the transactions at issue are unique and therefore the claims will require individualized inquiry to resolve. Given these circumstances, Plaintiffs have more than enough infom1ation to determine whether they have a good faith basis to file a motion for class certification in this case. Unless the Court determines certification is warranted, no further discovery is proportional to the needs of the case. L Legal Standard. A. Proportional Discovery Is Required. The Commercial Division rules contemplate proportionality in discovery and electronic discovery both from parties and non-parties. See, e.g., Preamble (2); Rule 11-c; 11-e(f); Appendix A. CPLR § 3103(a) provides a Court with the authority to issue a protective order to regulate discovery and prevent certain discovery abuses. CPLR § 3103(a) provides: INDEX INDEX NO. NO. 60767/2018 60767/2018 FILED FILED: : WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09: 40 PM AM| NYSCEF NYSCEF DOC. DOC. NO. NO. 563 608 RECEIVED RECEIVED NYSCEF: NYSCEF: 01/22/20Ò0 07/20/2020 William P. Harrington, Esq. November 14, 2019 Page 2 (a) Prevention of abuse, The court inay at any time on itsown initiative,or on motion of any party or of any person from whom or about whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts. Authority to control and supervise the scope of discovery through the use of protective orders is well established. Matter of Carothers v. Ins. Cos. Represented by Bruno, Gerbino & Soriano LLP, 13 Misc.3d 970, 825 N.Y.S.2d 632 (Civ. Ct. Richmond Co. 2006); In re U.S. Pioneer Electronics. Corp., 47 N.Y.2d 914, 419 N.Y.S.2d 484 (1979). "While CPLR 3101(a) provides that '[t]here shall be full action,' disclosure of allmatter material and necessary in the prosecution ...of an the principle of full disclosure." disclosure does not give a party the right to uncontrolled and unfettered D'Adamo v. Saint Dominic's Home, 87 A.D.3d 966, 969-70, 929 N.Y.S.2d 301, 304 (2d Dep't 2011). "[U]nder our discovery statutes and case law, competing interests must always be balanced; the party." need for discovery must be v/eighed against any special burden to be borne by the opposing Kavanagh v. Ogden Alliance Maintenance Corp., 92 N.Y.2d 952, 683 N.Y.S.2d 156 (1998) (quoting O'Neill v. Oakgrove Construction, 71 N.Y.2d 521, 529, 528 N.Y.S.2d 1 (1988)). B. CPLR 901 and 902 Limit Discovery Prior to a Class Certification Motion. No class has been certified. Nevertheless, Plaintiffs from the outset have sought discovery into members' the merits of the putative class claims irnposing an undue and disproportionate burden on Houlihan of defending this litigation. CPLR 901 and 902 contemplate a prompt resolution of class certification issues. CPLR 902 requires a plaintiff to move for class certification within sixty days of "the time to serve a responsive expired." pleading has This sixty day window obviously contemplates limited, not unfettered, discovery. Alvarez v Just Salad LLC, No. 161121/2017, 2019 WL 1975551, at *2 (N.Y. Sup. Ct. Apr. 24, 2019) (barring putative class representative's broad pre-certification discovery as not "material and necessary" to certification; "at some point plaintiffs must come forward with their proof and move to certify the class"); Severin v Platinum Home Health Care Inc.,No. 153301/2017, 2017 WL 4168213, at *l (N.Y. Sup. Ct. Sep. 15, 2017) (refusing to postpone certification-motion deadline, finding that "showing" plaintiff made no of further "need to conduct class certification discovery"). Appropriate discovery prior to class certification is discovery sufficient to evaluate the prerequisites to class certification under CPLR 901 and the additional factors relevant to the certification decision under CPLR 902, no more. See Gewanter v. Quaker State Oil Ref Corp., 87 A.D.2d 970, 970, 450 N.Y.S.2d 93, 94 (4th Dep't 1982) (pre-certification discovery is "limited to ascertaining only those facts which are necessary to support an application for class status"); see also Martin v Palisades No. 2012 WL 2930791 (N.Y. Sup. Ct. June pre- Collection, LLC, 116099/2010, 27, 2012) (barring INDEX INDEX NO. NO. 60767/2018 60767/2018 FILED FILED: : WESTCHESTER WESTCHESTER COUNTY COUNTY CLERK CLERK 01/22/2020 07/20/2020 04:40 09:40 PM AM| NYSCEF NYSCEF DOC. DOC. NO. NO. 563