Preview
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022
EXHIBIT 3
(REDACTED)
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022
156 E. Market St.
Suite 1200
Indianapolis, IN 46204
www.MacGillLaw.com
Robert D. MacGill
317-961-5085
Robert.MacGill@MacGillLaw.com
Via Email
May 2, 2022
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 Bill:
We write to address the outstanding discovery issues identified in our April 22, 2022
teleconference.
We respectfully request oral argument on (A) absent class member discovery, (B) class
notice issues, and (C) jurisdictional matters on May 20, 2022; and an oral argument on all
remaining issues outlined herein on May 27, 2022.
TRANSACTION FILE SCANNING, ARBITRATION MOTION, EXTENSION OF TIME,
AND PROPOSED FIFTEENTH REPORT AND RECOMMENDATION
Houlihan Lawrence’s physical paper transaction files are essential to an appropriate
resolution of the issues pending in this case for at least three independent and compelling
reasons. First, for “the years 2011 to 2018, there is no organized or comprehensive source of
Houlihan executed arbitration agreements with consumers except for the paper transaction
files.”1 These arbitration agreements deprive the Court of jurisdiction over the arbitrating class
members. Second, the physical transaction files contain many of the executed 443 Forms and
other disclosure forms which contained agency disclosures. These disclosure forms (among other
documents, data, and testimony) defeat Plaintiffs’ claims of inadequate disclosure of dual agency
principles. Third, Plaintiffs have requested the “complete transaction file for the homebuyer and
seller in every Dual Agent Transaction from January 1, 2022 to July 14, 2018,” along with
several other document requests which request information present in the physical transaction
files.2
1
Jones Aff. of Feb. 9, 2022, ¶ 6, submitted to the Referee on Feb. 10 as Ex. 4.
2
Exhibit A to HL’s April 20, 2022 Letter, Plaintiffs’ RFPs, at Requests 4-11.
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May 2, 2022
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As we described, Houlihan Lawrence, in partnership with Consilio, has initiated a
massive document collection, scanning, and review protocol to obtain the 700 boxes at issue,
extract the Relevant Paper Transaction Files, scan them, review them, process them, Bates
Number them, and produce them to Plaintiffs.3 Consilio’s Shareholder and Vice President
advised you that Consilio’s (A) sifting, (B) scanning, (C) processing, (D) document review, and
(E) document production will be complete on August 12, 2022.4
In response to your and Plaintiffs’ concerns regarding potential delay of Plaintiffs’ review
of the transaction files, Houlihan Lawrence has agreed to the following rolling production
schedule of the physical transaction files5:
Task Proposed Date
First Production of Transaction Files May 6, 2022
Second Production of Transaction Files May 20, 2022
Third Production of Transaction Files June 3, 2022
Fourth Production of Transaction Files June 17, 2022
Fifth Production of Transaction Files July 1, 2022
Sixth Production of Transaction Files July 15, 2022
Seventh Production of Transaction Files July 29, 2022
Eighth Production of Transaction Files August 12, 2022
(Production Substantially Complete)
Houlihan Lawrence trusts that this rolling production schedule satisfies all pending
concerns with respect to the transaction files. Houlihan Lawrence renews its request that a
Fifteenth Report and Recommendation6 be issued and include the following dates, because the
arbitration agreements will not be fully available to the parties until August 12, 2022 (per the
above chart):
3
See HL’s Letter of April 20 at 1-4 and accompanying Exhibit B (affidavit of Crist and
photographs).
4
Id.
5
All of HL’s document productions are made pursuant to the Court’s Clawback Order and the
Arbitration Stipulation. Because of the expedited nature of the production, HL makes the
following statement regarding the potential inadvertent production of irrelevant files: In the event
irrelevant files are inadvertently produced, HL reserves the right to “claw back” those files and to
object to the relevance of these files at a future time. The inadvertent production of an irrelevant
transaction file does not constitute an admission that the individuals therein should be part of the
class or that the irrelevant transaction is part of the class.
6
For your convenience, a proposed Fifteenth Report and Recommendation is attached as Exhibit
A.
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William P. Harrington, Esq.
May 2, 2022
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Proposed Fifteenth R&R
Task Fourteenth R&R Date
Date
Potential Class Member 20 days following
Complete
Identification confirmation
Document Production April 20, 2022 August 12, 20227
90 days after Referee certifies
Deposition Discovery Not Set substantial completion of
document production
In accordance with Rule 13
Expert Discovery In accordance with Rule 13
(no change)
HL’s Motion to Modify the
May 3, 2022 May 3, 2022 (no change)
Class
April 29, 2022 – HL to August 12, 2022 – HL to
HL’s Motion to Compel produce arbitration produce arbitration
Arbitration agreements; May 6, 2022 - agreements; August 19, 2022
HL to file motion – HL to file motion
Houlihan Lawrence has no
preference on when Plaintiffs
file this motion. If Plaintiffs
want a reasonable extension,
Houlihan Lawrence will
agree to it. As described
Plaintiffs’ Motion to
May 6, 2022 herein, Houlihan Lawrence
Authorize Class Notice
believes that the Referee
should issue a Report and
Recommendation on class
notice issues in the first
instance, after a full and
complete briefing process.
DISCOVERY REFEREE’S JURISDICTION TO
ISSUE RECOMMENDATIONS ON CLASS NOTICE ISSUES
On May 15, 2019, the Court appointed you to “serve as the discovery master, to hear and
report on all issues of discovery, including all pending discovery motions, pursuant to CPLR §
4311.” NYSCEF Doc. No. 547. When a referee is appointed to “hear and report,” CPLR § 4201
and the court’s order of reference operate in tandem to define the referee’s power. CPLR § 4201
provides that “[a] referee to inquire and report shall have the power . . . to direct the parties to
engage in and permit such disclosure proceedings as will expedite the disposition of the case.”
CPLR § 4201. CPLR § 4311 addresses the order of reference courts may issue to confer such
power on a referee, and provides that
7
For document requests requiring litigation by either party, either August 12, 2022 or 45 days
after the dispute is resolved, whichever is later.
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[a]n order of reference shall direct the referee to determine the
entire action or specific issues, to report issues, to perform
particular acts, or to receive and report evidence only. It may
specify or limit the powers of the referee and the time for the filing
of his report and may fix a time and place for the hearing.
CPLR § 4311. Thus, the question is whether Houlihan Lawrence’s objections to Plaintiffs’ class
notice plan fall within your power to hear and report.8
In New York, “the scope of discovery is left to the broad discretion of the trial court.”
Anderson v. State of New York, 21 N.Y.S.3d 356, 357 (2d Dept. 2015). This Court’s view of the
“scope of discovery” and the contours of your jurisdiction has been broad to date. It encompasses
hearing and reporting on issues of class notice.
For example, at the parties’ November 8, 2021 hearing before the Court, we were
instructed to “bring [you] into the mix” regarding Houlihan Lawrence’s then-forthcoming
motion to seal documents Plaintiffs filed in conjunction with their Motion for Class Certification.
Hearing of November 8, 2021 at 16:25-17:1, attached as Exhibit B. The following day, the Court
instructed Houlihan Lawrence to “ma[k]e [a motion] to Mr. Harrington, to start, and then [the
Court] will deal with it accordingly,” and Plaintiffs confirmed they would be “[h]appy to have
[the sealing motion] decided by Mr. Harrington, if that’s the Court’s preference.” Hearing of
November 9, 2021, at 5:11-15, 11:19-23, attached as Exhibit C. You considered and decided
Houlihan Lawrence’s Motion to Seal, and the Court confirmed your recommendation. See
NYSCEF Doc. Nos. 1052 (13th Report and Recommendation), 1075 (Amendment to 13th
Report and Recommendation), 1087 (confirming same).
Similarly, the Court conferred on you the power to formulate and recommend a case
management schedule for the merits phase of this action, as reflected by the Court’s confirmation
of the Fourteenth Report and Recommendation. See NYSCEF Doc. Nos. 1083 (14th Report and
Recommendation), 1088 (confirming same). This case management schedule was not limited to
traditional discovery issues, and encompassed deadlines for Houlihan Lawrence’s forthcoming
motions to amend the class definition, NYSCEF Doc. No. 1083 at ¶¶ 9-11, and compel
arbitration, id. at ¶¶ 12-15, and Plaintiffs’ forthcoming Motion to Authorize their Proposed Class
Notice Plan. Id. at ¶¶ 16-21.
Critically, the adopted Fourteenth Report and Recommendation conferred on you the
authority to conduct a hearing “to resolve outstanding issues regarding class notification
discovery.” NYSCEF 1083 at 5. And you recommended to the Court (and the Court so ordered)
that Plaintiffs “shall produce” an “updating address list” for class members. Id. at 2.
Plaintiffs now attempt to avoid the very obligation that you recommended and was
adopted by the Court: to update the First Class Mailing Addresses of the class members, and to
discover the email addresses of the class members instead. These issues pertaining to class notice
8
Houlihan Lawrence respectfully requests an opportunity to submit a full brief in opposition to
Plaintiffs’ Proposed Class Notice Plan and associated issues.
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are inextricably intertwined with your prior Reports and Recommendations, and they plainly fall
within your authority to analyze and prepare recommendations.
The Court’s adoption of the Fourteenth Report and Recommendation alone shows that
the Court has already interpreted its Order of Reference to include issues relating to class notice.
Further, the Court’s decision to refer hearing and reporting on Houlihan Lawrence’s Motion to
Seal to you provides further support for the conclusion that the Court broadly interprets its own
Order of Reference to include pre-trial matters such as Plaintiffs’ Proposed Class Notice Plan.
Retaining your jurisdiction to hear and report on Plaintiffs’ Proposed Class Notice Plan
also makes practical sense. It is far more efficient for you, considering your familiarity with the
history of the parties’ discovery disputes and the minute details of the case, to analyze a detail-
oriented matter such as Plaintiffs’ Proposed Class Notice Plan. Further, given the ongoing
supervision that administration of Plaintiffs’ Class Notice will require, judicial economy supports
your involvement with the class notice method and form from the earliest practicable stage until
its completion.
For the foregoing reasons, Houlihan Lawrence requests you find that the jurisdiction
conferred to you by the Court’s Order of Reference includes hearing and reporting on Plaintiffs’
forthcoming Motion to Authorize Their Proposed Class Notice Plan.
To the extent you determine hearing and reporting on Plaintiffs’ Proposed Class Notice
Plan is outside of the jurisdiction conferred on you by the Court’s Order of Reference, Houlihan
Lawrence respectfully requests that you recommend the Court confer jurisdiction on you to
report and recommend on the issue of Plaintiffs’ Proposed Class Notice pursuant to CPLR §
4212.9
ABSENT CLASS MEMBER DEPOSITIONS
Houlihan Lawrence was disappointed to hear during the April 22, 2022 hearing that
Plaintiffs no longer intend to negotiate a stipulation in good faith on this matter. Indeed, Mr. Vest
had previously agreed to withdraw Plaintiffs’ “prior reservation of the right to call a limited
number of absent class members in their rebuttal case,” Vest to MacGill April 15, attached as
Exhibit D, but Mr. Ohlemeyer objected to this and countermanded Mr. Vest during the hearing.
Houlihan Lawrence now has no choice but to litigate this key issue.
Plaintiffs have chosen to premise each of their claims on alleged oral misrepresentations.
Houlihan Lawrence has constitutional rights to defend fully all claims associated with the alleged
oral misrepresentations. Specifically, Houlihan Lawrence has the right to determine the content
of the supposed oral misrepresentations and to present a defense that oral disclosures were made
properly. The only way to achieve this is through deposition discovery. Houlihan Lawrence
proposes to depose a statistically representative sample of absent class members regarding their
9
“[O]n its own initiative, the court may submit any issue of fact required to be decided to the
court . . . upon a showing of some exceptional condition . . . to a referee to report.” CPLR §
4212.
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conversations with Houlihan Lawrence agents. Each deposition can be limited to no more than
two (2) hours in length.
It is well settled that the Constitution prohibits the class action mechanism from
abrogating a defendant’s constitutional right to present its defenses to individual claims. See
DeSilva v. N. Shore-Long Island Jewish Health System, 27 F. Supp. 3d 313, 328 (S.D.N.Y. 2014)
(“If the Court were to follow Plaintiffs’ approach, it would be left in the untenable position of
either having to hold, in effect, 1,196 mini-trials, or depriving defendants of their due process
right to present its full defense.”).10 In the federal system, this right is codified in the Rules
Enabling Act—but it is a common law right in New York. State of New York v. Myers, 22 Misc.
3d 809, 819 (Albany Cty. Dec. 24, 2008) (“In the class action context, due process insures
procedural fairness….”); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (“Because
the Rules Enabling Act forbids interpreting Rule 23 to ‘abridge, enlarge or modify any
substantive right’ . . . a class cannot be certified on the premise that [defendant] will not be
entitled to litigate its statutory defenses to individual claims.”); 1 MCLAUGHLIN ON CLASS
ACTIONS § 5:43 (15th ed.) (“The right of a defendant to assert any available affirmative defense
against each and every class member is guaranteed by the Rules Enabling Act.”).
New York courts apply federal law regarding absent class member discovery. Pludeman
v. Northern Leasing Sys., Inc., No. 101059/04, 2013 N.Y. Misc. LEXIS 4309, at *4-5 (N.Y.
County 2013) (“[C]ase law on [absent class member discovery] is derived primarily from the
federal courts.”); see also Murray v. Allied Signal, Inc., 177 A.D.2d 984 (4th Dept. 1991).
“[A]bsent class members are not automatically immune from discovery,” Redmond v. Moody’s
Investor Serv., No. 92 Civ. 9161, 1995 U.S. Dist. LEXIS 6277, at *2 (S.D.N.Y. May 10, 1995),
and “[d]iscovery from absent class members is generally permitted where it is necessary and
helpful to the ‘correct adjudication of the principal suit.’” In re Warner Chilcott Sec. Litig., No.
06 Civ. 11515, 2008 U.S. Dist. LEXIS 7613, at *4 (S.D.N.Y. Feb. 4, 2008) (citation omitted).
To determine whether discovery from absent class members is necessary and helpful to
the correct adjudication of the principal suit, courts consider (1) whether the discovery is needed
for the purposes of trial or the issues common to the class; (2) whether the discovery is narrowly
tailored; (3) whether the discovery will impose an undue burden on the absent class members;
and (4) whether the discovery is not available from the representative plaintiffs. Indergit v. Rite
Aid Corp., No. 08 Civ. 9361, 2015 U.S. Dist. LEXIS 160355, at *5 (S.D.N.Y. Nov. 30, 2015).
Plaintiffs object to Houlihan Lawrence’s proposed absent class member depositions on
the ground that “the Court’s class certification decision recognizes that Houlihan Lawrence’s
class-wide undisclosed, non-consensual dual agency is inferable from the evidence already
adduced by plaintiffs and without absent class member testimony.” Exhibit N to HL’s April 20,
2022 Letter, Vest to MacGill, April 5, 2022, at 1. The Court has made no such merits ruling.11
10
See also, e.g., Alix v. Wal-Mart Stores, Inc., 16 Misc. 3d 844, 865 (Albany Cty. June 11,
2007).
11
Nor could it have. The Supreme Court of the United States “has . . . made clear that whether
representative evidence offered by a plaintiff can be used to ‘establish classwide liability will
depend on the purpose for which the sample is being introduced and the underlying cause of
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May 2, 2022
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The Court held that Plaintiffs had fulfilled the prerequisites for class certification under New
York’s lenient class certification standard, not that Plaintiffs have even attempted to establish
class-wide liability. Houlihan Lawrence has the constitutional right to pursue the discovery
necessary to present its defenses.
I. Absent Class Member Discovery Is Needed for the Purposes of Trial Because Oral
Disclosures and Reliance are Critical Case Issues.
Courts regularly allow defendants to seek absent class member discovery to determine
whether class claims for breach of fiduciary duty and deceptive business practices are supported
by the evidence. See, e.g., Bruhl v. PricewaterhouseCoopers Int’l, No. 03-23044-Civ, 2010 U.S.
Dist. LEXIS 129504, at *10 (S.D. Fl. Dec. 8, 2010) (allowing defendant in class action to depose
and propound targeted document requests on absent class members to support defense of non-
reliance on alleged misrepresentations); In re Nat’l W. Life Ins. Deferred Annuities Litig., No.
05-CV-1018, 2010 U.S. Dist. LEXIS 123089, at *4-5, 9 (S.D. Cal. Nov. 19, 2010) (allowing
defendants to depose absent class members to show “absent class members (1) were not misled
by any claim of a bonus, and that their bonus was not ‘illusory,’ and (2) that they did not care
about the disclosure of any commission and knew full well that their agent—as with all
insurance agents—was receiving a commission in connection with the sale of annuity
products.”).
Plaintiffs’ claims for breach of fiduciary duty and violation of GBL § 349 fall squarely
within the class of claims for which absent class member discovery is necessary. Like the
defendants in Bruhl and Deferred Annuities, Houlihan Lawrence seeks to obtain evidence from
absent class members regarding their understanding of the allegedly deficient oral disclosures
provided by Houlihan Lawrence agents and the class members’ reliance, if any, on those
allegedly deceptive disclosures—topics that are peculiarly within the knowledge of each
individual class member. This testimony goes to the heart of Plaintiffs’ claims and Houlihan
Lawrence’s anticipated defenses, and Houlihan Lawrence’s right to seek it is constitutionally
guaranteed.
II. Houlihan Lawrence’s Absent Class Member Discovery is Narrowly Tailored.
Absent class member discovery is narrowly tailored if it seeks information regarding
class-wide liability issues as opposed to individual issues, like individual damages. See Krueger
v. New York Tel. Co., 163 F.R.D. 446, 451 (S.D.N.Y. 1995) (“the depositions defendants wish to
conduct . . . are addressed to class-wide liability issues, thus satisfying” the narrowly tailored
factor).
action.’… [R]epresentative or aggregate evidence fails Rule 23 if it masks individualized issues
or predicts injury where none otherwise exists.” In re Pre-Filled Propane Tank Antitrust Litig.,
No. 14-02567-MD-W-GAF, 2021 U.S. Dist. LEXIS 232424, at *20 (W.D. Mo. Nov. 9, 2021)
(citing Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 460 (2016)). Plaintiffs’ evidence
regarding Houlihan Lawrence’s business practices was introduced only to show Plaintiffs had
fulfilled CPLR §§ 901-902, not to persuade the Court that it could infer “Houlihan Lawrence’s
class-wide undisclosed, non-consensual dual agency.”
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May 2, 2022
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Houlihan Lawrence presently sees no need to depose individual class members about
what damages, if any, they allegedly sustained as a result of Plaintiffs’ claims. Instead, Houlihan
Lawrence will question the absent class members regarding the effect Houlihan Lawrence’s
agency disclosures and advertising had on them. Because class members’ understanding of and
reliance on Houlihan Lawrence’s communications with them are central to Plaintiffs’ class-wide
liability claims, Houlihan Lawrence’s absent class member discovery is narrowly tailored.
III. Houlihan Lawrence’s Absent Class Member Discovery Will Not Impose an Undue
Burden on Absent Class Members.
Whether absent class member discovery will impose an undue burden on absent class
members is a fact-intensive inquiry that necessarily varies with the circumstances of each case.
When examining whether proposed absent class member discovery imposes an undue burden,
courts weigh defendants’ needs for the proposed discovery against the burden it imposes on
absent class members. See, e.g., Bruhl v. PricewaterhouseCoopers Int’l, No. 03-23044-Civ, 2010
U.S. Dist. LEXIS 129504, at *9 (S.D. Fl. Dec. 8, 2010) (“[T]here is no indication that
Defendants are motivated to take undue advantage. Clearly there is no other way for Defendants
to get this information than through limited targeted discovery directed to absent class
members.”).
Houlihan Lawrence has determined that targeted depositions relating to approximately
two hundred (200) subject transactions are required for Houlihan Lawrence to exercise its
constitutional right to fully present its defenses. Because, as discussed below, Houlihan
Lawrence cannot procure this evidence elsewhere, and because Houlihan Lawrence’s proposed
absent class member deposition protocol is reasonable in light of the class size and composition,
Houlihan Lawrence’s proposal does not impose an undue burden on absent class members.
IV. The Discovery Houlihan Lawrence Seeks from Absent Class Members Is Not
Available from the Representative Plaintiffs.
Discovery from absent class members is particularly appropriate when defendants cannot
meaningfully develop and present their defenses with information available from representative
plaintiffs. In re Nat’l W. Life Ins. Deferered Annuities Litig., No. 05-CV-1018, 2010 U.S. Dist.
LEXIS 123089, at *8-9 (S.D. Cal. Nov. 19, 2010) (“Defendants seek to establish lack of reliance
on the part of other class members . . . . [T]he Court is unwilling to deny Defendants the
opportunity to meaningfully defend themselves. The Court therefore finds that Defendants may
take depositions . . . of a limited number of absent class members because the information they
seek may bear on this case.”).
The Named Plaintiffs in this action can only offer information relating to a small number
of Houlihan Lawrence agents associated with Houlihan Lawrence’s White Plains office.
Additionally, the Berks, as representatives of the sellers, cannot provide information regarding
Plaintiffs’ theories on Houlihan Lawrence’s in-house bonus program, because their agent Gino
Bello did not receive an in-house bonus in connection with the Berks’ transaction; or arbitration,
since the Berks did not execute an Exclusive Right to Sell Agreement containing an arbitration
clause. Because this suit involves many Houlihan Lawrence agents across three large New York
counties—some of whom received in-house bonus payments—and because none of the Named
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May 2, 2022
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Plaintiffs executed arbitration agreements in connection with their transactions, Houlihan
Lawrence cannot gather the information it needs to adequately develop its defenses without its
absent class member discovery.
Because Houlihan Lawrence’s absent class member discovery is necessary for Houlihan
Lawrence to present its defenses, and because all four of the factors discussed above weigh in
favor of permitting absent class member discovery, Houlihan Lawrence should be permitted to
conduct absent class member depositions in accordance with the above-described plan.
DEPONENT LIST
We understand that Plaintiffs have been excused from providing a deponent list.
Houlihan Lawrence provided a preliminary deponent list, in accordance with the Fourteenth
Report and Recommendation. Given this development, Houlihan Lawrence notifies Plaintiffs
that its deponent list is “open” and will be supplemented in the future.
CLASS MEMBER LIST
Plaintiffs appear to have withdrawn their complaints about the Class Member List,
because Houlihan Lawrence used its system of record to generate it. This is the most accurate
system.12
RESPONSES TO PLAINTIFFS’ DISCOVERY REQUESTS
Plaintiffs have again sought to relitigate resolved issues and raise seriatim disputes with
you that should have been resolved through the meet and confer process. For the reasons that
follow, Plaintiffs’ discovery practices must be addressed at the outset of the merits phase to
avoid adding three additional years to these proceedings.
I. Preliminary Matters (Plaintiffs’ April 20, 2022 Letter §§ 1-4.1.3)
a. New Request for Ten Document Custodians
Plaintiffs reveal in their April 20, 2022 letter that they now “seek collection from ten
custodians.” They do not identify the ten proposed custodians.
The Fourteenth Report and Recommendation established March 21, 2022 as the deadline
for Plaintiffs to identify their requested document custodians. On March 21, 2022, Plaintiffs
identified their four requested “merits document discovery custodians:” Christopher Meyers,
Stephen Meyers, Geoffery Berry, and Cynthia Landis. Vest to MacGill, March 21, 2022,
attached as Exhibit E. Plaintiffs have provided no basis for adding belatedly six new and
unidentified custodians.
A maximum of two to four Houlihan Lawrence merits document custodians is
appropriate in any event. As previously described, Houlihan Lawrence has produced emails from
12
If HL detects additional modifications that are needed to the class member list, it will notify
the Referee and Plaintiffs.
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over 187 custodians and has responded to Plaintiffs’ 101 search term protocol.13 There is no
need or justification for adding ten more custodians given discovery proceedings in this case.
Plaintiffs made their choice on March 21, 2022. Plaintiffs’ document custodian request
included only Christopher Meyers, Stephen Meyers, Geoffery Berry, and Cynthia Landis.
b. Christopher and Stephen Meyers
Much of Plaintiffs’ April 20, 2022 letter reads as though Plaintiffs have sued Christopher
and Stephen Meyers individually.14 They have not.
You have been resolving Plaintiffs’ requests for the Meyers’ emails for over two years,
and you have denied them. See, e.g., Third R&R at 2 (“I previously denied any discovery
relating to Stephen Meyers and Chris Meyers.”); Fourth R&R at 5 (“For the reasons set forth in
my prior rulings, the new custodian cannot be either Stephen or Chris Meyers.”); Ninth R&R
(not granting Plaintiffs’ request to add the Meyers as custodians).
There is no reason to reverse course now. Plaintiffs have made no showing of
insufficiency from the prior voluminous productions from Senior Vice President Debra Dalton,
who Plaintiffs have stated was the “No. 3 person in charge at Houlihan Lawrence,” Exhibit F at
16:12-16; and “an important executive-level witness in her own right,” Exhibit G at 2. Ms.
Dalton’s production satisfies whatever need Plaintiffs have for an executive level document
custodian.
Nothing encapsulates Plaintiffs’ behavior as to the Meyers better than Plaintiffs’ conduct
surrounding Chris Meyers’ deposition. On July 1, 2021, Plaintiffs selected Chris Meyers as one
of their ten deponents. Exhibit H. They ratified this selection in a Court Order, setting Chris
Meyers’ deposition for October 7, 2021. Exhibit I. After Houlihan Lawrence had travelled to
White Plains to prepare and attend Mr. Meyers’ deposition, Plaintiffs summarily cancelled his
deposition less than forty-eight hours before it was to begin. Exhibit J.
13
Houlihan elected to comply with the 101 search term protocol to avoid litigation proceedings
on the protocol for class certification purposes. Houlihan will make no such concession for
merits purposes. Once the number of search terms is set, and the identity of the custodians is
secure, Houlihan Lawrence will analyze the requested search terms. In the event that any of
Plaintiffs’ requested search terms are overbroad, Houlihan Lawrence will then require briefing
on narrowing Plaintiffs’ requested search terms to a scope that is proportionate to the needs of
the case, not unduly burdensome, and reasonably calculated to lead to the discovery of
admissible evidence. Due to the unreasonable nature of Plaintiffs’ current 162 search term
request, Houlihan Lawrence does not engage on this exercise at this time in order to conserve
judicial resources.
14
See, e.g., Plaintiffs’ Letter at 7 (“Proof that Christopher and Stephen Meyers reaped millions,
if not tens of millions, from the sale of HL to HomeServices helps establish their motive to
engage in that wrongful conduct . . . . The windfall that Christopher and Stephen Meyers reaped
from HomeServices is also discoverable because a defendant’s wealth is material to the
assessment of punitive damages.”).
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William P. Harrington, Esq.
May 2, 2022
Page 11
Requests for discovery from the Meyers should be summarily denied.
c. Request for 162 Search Terms
Plaintiffs request 162 search terms. Exhibit E. Houlihan Lawrence should be permitted to
utilize up to six search terms, as you have repeatedly instructed. 162 search terms creates undue
burden and “make work” for Houlihan Lawrence document reviewers. The terms are not
reasonably calculated to lead to the discovery of admissible evidence, they are disproportionate
to the needs of the case, and they are unduly burdensome and harassing.15
II. Plaintiffs’ Document Requests (Plaintiffs’ April 20, 2022 Letter §§ 5.1-5.21)
a. RFP 1
Plaintiffs should be instructed to provide a listing of the documents it seeks in response to
RFP 1. As the party seeking discovery, Plaintiffs bear the burden of providing a comprehensible
document request. Houlihan Lawrence is unable to understand what Plaintiffs are seeking.
b. RFP 3
Plaintiffs have made no showing that these supposed “notes” are relevant to this case or
are properly part of Ms. Dalton’s “custodial file.” Houlihan Lawrence has made a robust and
comprehensive production from Ms. Dalton’s file using Plaintiffs’ preferred search term list. No
further discovery with respect to Ms. Dalton is appropriate.
In any event, you instructed us to inquire about the status of these documents, which we
have done. We will report back when we know more.
c. RFPs 4, 5, 6 and 11
During our April 22, 2022 teleconference, you requested a description of the process that
would be required for Houlihan Lawrence to collect and produce “[t]he Transaction Detail Sheet
for every Dual Agent Transaction from January 1, 2011 to July 14, 2018.” Plaintiffs’ RFP No. 4.
Following consultation with Houlihan Lawrence personnel, Houlihan Lawrence confirms that, as
it predicted during the teleconference, collecting the requested Transaction Detail Sheets would
require a manual, transaction-by-transaction retrieval process that would take months to
complete. It would require Houlihan Lawrence personnel to work nights and weekends, and it
would take away from key resources at the Company and disrupt business operations.
Houlihan Lawrence has already agreed to produce the physical transaction files for the
transactions on the class list. The physical transaction files should contain the transaction detail
sheets and the requested checks. See, e.g., Exhibit K (example physical transaction file) at -5285
(transaction detail sheet), at -5286 (check). As explained above, Plaintiffs will begin receiving
these files on Friday on a rolling basis.
Plaintiffs should examine the files every other Friday and create a list of the files that
they claim do not contain appropriate documentation. Houlihan Lawrence can then initiate an
15
See also prior footnote 13 on future litigation of the identity of Plaintiffs’ search terms.
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022
William P. Harrington, Esq.
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investigation into additional documentation, if any, on a transaction-by-transaction basis. This
approach would allow the parties to address all issues relating to these RFPs in efficient,
manageable pieces.
d. RFPs 7-10
Plaintiffs have admitted that “all class members seek the [same] recovery…whether or
not Houlihan Lawrence paid an In-House Bonus in connection with their transactions.” Exhibit L
at 9. Plaintiffs have also argued that “[t]he Class members are similarly situated, regardless of
whether HL paid a Bonus in connection with their transactions, because they had a right to know
when deciding whether to consent to dual agency that HL incentivized in-house deals,” Exhibit
M at 25, and that “every client who was party to a dual-agent transaction had a right to know
about the Bonus.” Ex
Preview
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 EXHIBIT 3 (REDACTED) FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 156 E. Market St. Suite 1200 Indianapolis, IN 46204 www.MacGillLaw.com Robert D. MacGill 317-961-5085 Robert.MacGill@MacGillLaw.com Via Email May 2, 2022 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 Bill: We write to address the outstanding discovery issues identified in our April 22, 2022 teleconference. We respectfully request oral argument on (A) absent class member discovery, (B) class notice issues, and (C) jurisdictional matters on May 20, 2022; and an oral argument on all remaining issues outlined herein on May 27, 2022. TRANSACTION FILE SCANNING, ARBITRATION MOTION, EXTENSION OF TIME, AND PROPOSED FIFTEENTH REPORT AND RECOMMENDATION Houlihan Lawrence’s physical paper transaction files are essential to an appropriate resolution of the issues pending in this case for at least three independent and compelling reasons. First, for “the years 2011 to 2018, there is no organized or comprehensive source of Houlihan executed arbitration agreements with consumers except for the paper transaction files.”1 These arbitration agreements deprive the Court of jurisdiction over the arbitrating class members. Second, the physical transaction files contain many of the executed 443 Forms and other disclosure forms which contained agency disclosures. These disclosure forms (among other documents, data, and testimony) defeat Plaintiffs’ claims of inadequate disclosure of dual agency principles. Third, Plaintiffs have requested the “complete transaction file for the homebuyer and seller in every Dual Agent Transaction from January 1, 2022 to July 14, 2018,” along with several other document requests which request information present in the physical transaction files.2 1 Jones Aff. of Feb. 9, 2022, ¶ 6, submitted to the Referee on Feb. 10 as Ex. 4. 2 Exhibit A to HL’s April 20, 2022 Letter, Plaintiffs’ RFPs, at Requests 4-11. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 2 As we described, Houlihan Lawrence, in partnership with Consilio, has initiated a massive document collection, scanning, and review protocol to obtain the 700 boxes at issue, extract the Relevant Paper Transaction Files, scan them, review them, process them, Bates Number them, and produce them to Plaintiffs.3 Consilio’s Shareholder and Vice President advised you that Consilio’s (A) sifting, (B) scanning, (C) processing, (D) document review, and (E) document production will be complete on August 12, 2022.4 In response to your and Plaintiffs’ concerns regarding potential delay of Plaintiffs’ review of the transaction files, Houlihan Lawrence has agreed to the following rolling production schedule of the physical transaction files5: Task Proposed Date First Production of Transaction Files May 6, 2022 Second Production of Transaction Files May 20, 2022 Third Production of Transaction Files June 3, 2022 Fourth Production of Transaction Files June 17, 2022 Fifth Production of Transaction Files July 1, 2022 Sixth Production of Transaction Files July 15, 2022 Seventh Production of Transaction Files July 29, 2022 Eighth Production of Transaction Files August 12, 2022 (Production Substantially Complete) Houlihan Lawrence trusts that this rolling production schedule satisfies all pending concerns with respect to the transaction files. Houlihan Lawrence renews its request that a Fifteenth Report and Recommendation6 be issued and include the following dates, because the arbitration agreements will not be fully available to the parties until August 12, 2022 (per the above chart): 3 See HL’s Letter of April 20 at 1-4 and accompanying Exhibit B (affidavit of Crist and photographs). 4 Id. 5 All of HL’s document productions are made pursuant to the Court’s Clawback Order and the Arbitration Stipulation. Because of the expedited nature of the production, HL makes the following statement regarding the potential inadvertent production of irrelevant files: In the event irrelevant files are inadvertently produced, HL reserves the right to “claw back” those files and to object to the relevance of these files at a future time. The inadvertent production of an irrelevant transaction file does not constitute an admission that the individuals therein should be part of the class or that the irrelevant transaction is part of the class. 6 For your convenience, a proposed Fifteenth Report and Recommendation is attached as Exhibit A. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 3 Proposed Fifteenth R&R Task Fourteenth R&R Date Date Potential Class Member 20 days following Complete Identification confirmation Document Production April 20, 2022 August 12, 20227 90 days after Referee certifies Deposition Discovery Not Set substantial completion of document production In accordance with Rule 13 Expert Discovery In accordance with Rule 13 (no change) HL’s Motion to Modify the May 3, 2022 May 3, 2022 (no change) Class April 29, 2022 – HL to August 12, 2022 – HL to HL’s Motion to Compel produce arbitration produce arbitration Arbitration agreements; May 6, 2022 - agreements; August 19, 2022 HL to file motion – HL to file motion Houlihan Lawrence has no preference on when Plaintiffs file this motion. If Plaintiffs want a reasonable extension, Houlihan Lawrence will agree to it. As described Plaintiffs’ Motion to May 6, 2022 herein, Houlihan Lawrence Authorize Class Notice believes that the Referee should issue a Report and Recommendation on class notice issues in the first instance, after a full and complete briefing process. DISCOVERY REFEREE’S JURISDICTION TO ISSUE RECOMMENDATIONS ON CLASS NOTICE ISSUES On May 15, 2019, the Court appointed you to “serve as the discovery master, to hear and report on all issues of discovery, including all pending discovery motions, pursuant to CPLR § 4311.” NYSCEF Doc. No. 547. When a referee is appointed to “hear and report,” CPLR § 4201 and the court’s order of reference operate in tandem to define the referee’s power. CPLR § 4201 provides that “[a] referee to inquire and report shall have the power . . . to direct the parties to engage in and permit such disclosure proceedings as will expedite the disposition of the case.” CPLR § 4201. CPLR § 4311 addresses the order of reference courts may issue to confer such power on a referee, and provides that 7 For document requests requiring litigation by either party, either August 12, 2022 or 45 days after the dispute is resolved, whichever is later. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 4 [a]n order of reference shall direct the referee to determine the entire action or specific issues, to report issues, to perform particular acts, or to receive and report evidence only. It may specify or limit the powers of the referee and the time for the filing of his report and may fix a time and place for the hearing. CPLR § 4311. Thus, the question is whether Houlihan Lawrence’s objections to Plaintiffs’ class notice plan fall within your power to hear and report.8 In New York, “the scope of discovery is left to the broad discretion of the trial court.” Anderson v. State of New York, 21 N.Y.S.3d 356, 357 (2d Dept. 2015). This Court’s view of the “scope of discovery” and the contours of your jurisdiction has been broad to date. It encompasses hearing and reporting on issues of class notice. For example, at the parties’ November 8, 2021 hearing before the Court, we were instructed to “bring [you] into the mix” regarding Houlihan Lawrence’s then-forthcoming motion to seal documents Plaintiffs filed in conjunction with their Motion for Class Certification. Hearing of November 8, 2021 at 16:25-17:1, attached as Exhibit B. The following day, the Court instructed Houlihan Lawrence to “ma[k]e [a motion] to Mr. Harrington, to start, and then [the Court] will deal with it accordingly,” and Plaintiffs confirmed they would be “[h]appy to have [the sealing motion] decided by Mr. Harrington, if that’s the Court’s preference.” Hearing of November 9, 2021, at 5:11-15, 11:19-23, attached as Exhibit C. You considered and decided Houlihan Lawrence’s Motion to Seal, and the Court confirmed your recommendation. See NYSCEF Doc. Nos. 1052 (13th Report and Recommendation), 1075 (Amendment to 13th Report and Recommendation), 1087 (confirming same). Similarly, the Court conferred on you the power to formulate and recommend a case management schedule for the merits phase of this action, as reflected by the Court’s confirmation of the Fourteenth Report and Recommendation. See NYSCEF Doc. Nos. 1083 (14th Report and Recommendation), 1088 (confirming same). This case management schedule was not limited to traditional discovery issues, and encompassed deadlines for Houlihan Lawrence’s forthcoming motions to amend the class definition, NYSCEF Doc. No. 1083 at ¶¶ 9-11, and compel arbitration, id. at ¶¶ 12-15, and Plaintiffs’ forthcoming Motion to Authorize their Proposed Class Notice Plan. Id. at ¶¶ 16-21. Critically, the adopted Fourteenth Report and Recommendation conferred on you the authority to conduct a hearing “to resolve outstanding issues regarding class notification discovery.” NYSCEF 1083 at 5. And you recommended to the Court (and the Court so ordered) that Plaintiffs “shall produce” an “updating address list” for class members. Id. at 2. Plaintiffs now attempt to avoid the very obligation that you recommended and was adopted by the Court: to update the First Class Mailing Addresses of the class members, and to discover the email addresses of the class members instead. These issues pertaining to class notice 8 Houlihan Lawrence respectfully requests an opportunity to submit a full brief in opposition to Plaintiffs’ Proposed Class Notice Plan and associated issues. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 5 are inextricably intertwined with your prior Reports and Recommendations, and they plainly fall within your authority to analyze and prepare recommendations. The Court’s adoption of the Fourteenth Report and Recommendation alone shows that the Court has already interpreted its Order of Reference to include issues relating to class notice. Further, the Court’s decision to refer hearing and reporting on Houlihan Lawrence’s Motion to Seal to you provides further support for the conclusion that the Court broadly interprets its own Order of Reference to include pre-trial matters such as Plaintiffs’ Proposed Class Notice Plan. Retaining your jurisdiction to hear and report on Plaintiffs’ Proposed Class Notice Plan also makes practical sense. It is far more efficient for you, considering your familiarity with the history of the parties’ discovery disputes and the minute details of the case, to analyze a detail- oriented matter such as Plaintiffs’ Proposed Class Notice Plan. Further, given the ongoing supervision that administration of Plaintiffs’ Class Notice will require, judicial economy supports your involvement with the class notice method and form from the earliest practicable stage until its completion. For the foregoing reasons, Houlihan Lawrence requests you find that the jurisdiction conferred to you by the Court’s Order of Reference includes hearing and reporting on Plaintiffs’ forthcoming Motion to Authorize Their Proposed Class Notice Plan. To the extent you determine hearing and reporting on Plaintiffs’ Proposed Class Notice Plan is outside of the jurisdiction conferred on you by the Court’s Order of Reference, Houlihan Lawrence respectfully requests that you recommend the Court confer jurisdiction on you to report and recommend on the issue of Plaintiffs’ Proposed Class Notice pursuant to CPLR § 4212.9 ABSENT CLASS MEMBER DEPOSITIONS Houlihan Lawrence was disappointed to hear during the April 22, 2022 hearing that Plaintiffs no longer intend to negotiate a stipulation in good faith on this matter. Indeed, Mr. Vest had previously agreed to withdraw Plaintiffs’ “prior reservation of the right to call a limited number of absent class members in their rebuttal case,” Vest to MacGill April 15, attached as Exhibit D, but Mr. Ohlemeyer objected to this and countermanded Mr. Vest during the hearing. Houlihan Lawrence now has no choice but to litigate this key issue. Plaintiffs have chosen to premise each of their claims on alleged oral misrepresentations. Houlihan Lawrence has constitutional rights to defend fully all claims associated with the alleged oral misrepresentations. Specifically, Houlihan Lawrence has the right to determine the content of the supposed oral misrepresentations and to present a defense that oral disclosures were made properly. The only way to achieve this is through deposition discovery. Houlihan Lawrence proposes to depose a statistically representative sample of absent class members regarding their 9 “[O]n its own initiative, the court may submit any issue of fact required to be decided to the court . . . upon a showing of some exceptional condition . . . to a referee to report.” CPLR § 4212. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 6 conversations with Houlihan Lawrence agents. Each deposition can be limited to no more than two (2) hours in length. It is well settled that the Constitution prohibits the class action mechanism from abrogating a defendant’s constitutional right to present its defenses to individual claims. See DeSilva v. N. Shore-Long Island Jewish Health System, 27 F. Supp. 3d 313, 328 (S.D.N.Y. 2014) (“If the Court were to follow Plaintiffs’ approach, it would be left in the untenable position of either having to hold, in effect, 1,196 mini-trials, or depriving defendants of their due process right to present its full defense.”).10 In the federal system, this right is codified in the Rules Enabling Act—but it is a common law right in New York. State of New York v. Myers, 22 Misc. 3d 809, 819 (Albany Cty. Dec. 24, 2008) (“In the class action context, due process insures procedural fairness….”); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (“Because the Rules Enabling Act forbids interpreting Rule 23 to ‘abridge, enlarge or modify any substantive right’ . . . a class cannot be certified on the premise that [defendant] will not be entitled to litigate its statutory defenses to individual claims.”); 1 MCLAUGHLIN ON CLASS ACTIONS § 5:43 (15th ed.) (“The right of a defendant to assert any available affirmative defense against each and every class member is guaranteed by the Rules Enabling Act.”). New York courts apply federal law regarding absent class member discovery. Pludeman v. Northern Leasing Sys., Inc., No. 101059/04, 2013 N.Y. Misc. LEXIS 4309, at *4-5 (N.Y. County 2013) (“[C]ase law on [absent class member discovery] is derived primarily from the federal courts.”); see also Murray v. Allied Signal, Inc., 177 A.D.2d 984 (4th Dept. 1991). “[A]bsent class members are not automatically immune from discovery,” Redmond v. Moody’s Investor Serv., No. 92 Civ. 9161, 1995 U.S. Dist. LEXIS 6277, at *2 (S.D.N.Y. May 10, 1995), and “[d]iscovery from absent class members is generally permitted where it is necessary and helpful to the ‘correct adjudication of the principal suit.’” In re Warner Chilcott Sec. Litig., No. 06 Civ. 11515, 2008 U.S. Dist. LEXIS 7613, at *4 (S.D.N.Y. Feb. 4, 2008) (citation omitted). To determine whether discovery from absent class members is necessary and helpful to the correct adjudication of the principal suit, courts consider (1) whether the discovery is needed for the purposes of trial or the issues common to the class; (2) whether the discovery is narrowly tailored; (3) whether the discovery will impose an undue burden on the absent class members; and (4) whether the discovery is not available from the representative plaintiffs. Indergit v. Rite Aid Corp., No. 08 Civ. 9361, 2015 U.S. Dist. LEXIS 160355, at *5 (S.D.N.Y. Nov. 30, 2015). Plaintiffs object to Houlihan Lawrence’s proposed absent class member depositions on the ground that “the Court’s class certification decision recognizes that Houlihan Lawrence’s class-wide undisclosed, non-consensual dual agency is inferable from the evidence already adduced by plaintiffs and without absent class member testimony.” Exhibit N to HL’s April 20, 2022 Letter, Vest to MacGill, April 5, 2022, at 1. The Court has made no such merits ruling.11 10 See also, e.g., Alix v. Wal-Mart Stores, Inc., 16 Misc. 3d 844, 865 (Albany Cty. June 11, 2007). 11 Nor could it have. The Supreme Court of the United States “has . . . made clear that whether representative evidence offered by a plaintiff can be used to ‘establish classwide liability will depend on the purpose for which the sample is being introduced and the underlying cause of FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 7 The Court held that Plaintiffs had fulfilled the prerequisites for class certification under New York’s lenient class certification standard, not that Plaintiffs have even attempted to establish class-wide liability. Houlihan Lawrence has the constitutional right to pursue the discovery necessary to present its defenses. I. Absent Class Member Discovery Is Needed for the Purposes of Trial Because Oral Disclosures and Reliance are Critical Case Issues. Courts regularly allow defendants to seek absent class member discovery to determine whether class claims for breach of fiduciary duty and deceptive business practices are supported by the evidence. See, e.g., Bruhl v. PricewaterhouseCoopers Int’l, No. 03-23044-Civ, 2010 U.S. Dist. LEXIS 129504, at *10 (S.D. Fl. Dec. 8, 2010) (allowing defendant in class action to depose and propound targeted document requests on absent class members to support defense of non- reliance on alleged misrepresentations); In re Nat’l W. Life Ins. Deferred Annuities Litig., No. 05-CV-1018, 2010 U.S. Dist. LEXIS 123089, at *4-5, 9 (S.D. Cal. Nov. 19, 2010) (allowing defendants to depose absent class members to show “absent class members (1) were not misled by any claim of a bonus, and that their bonus was not ‘illusory,’ and (2) that they did not care about the disclosure of any commission and knew full well that their agent—as with all insurance agents—was receiving a commission in connection with the sale of annuity products.”). Plaintiffs’ claims for breach of fiduciary duty and violation of GBL § 349 fall squarely within the class of claims for which absent class member discovery is necessary. Like the defendants in Bruhl and Deferred Annuities, Houlihan Lawrence seeks to obtain evidence from absent class members regarding their understanding of the allegedly deficient oral disclosures provided by Houlihan Lawrence agents and the class members’ reliance, if any, on those allegedly deceptive disclosures—topics that are peculiarly within the knowledge of each individual class member. This testimony goes to the heart of Plaintiffs’ claims and Houlihan Lawrence’s anticipated defenses, and Houlihan Lawrence’s right to seek it is constitutionally guaranteed. II. Houlihan Lawrence’s Absent Class Member Discovery is Narrowly Tailored. Absent class member discovery is narrowly tailored if it seeks information regarding class-wide liability issues as opposed to individual issues, like individual damages. See Krueger v. New York Tel. Co., 163 F.R.D. 446, 451 (S.D.N.Y. 1995) (“the depositions defendants wish to conduct . . . are addressed to class-wide liability issues, thus satisfying” the narrowly tailored factor). action.’… [R]epresentative or aggregate evidence fails Rule 23 if it masks individualized issues or predicts injury where none otherwise exists.” In re Pre-Filled Propane Tank Antitrust Litig., No. 14-02567-MD-W-GAF, 2021 U.S. Dist. LEXIS 232424, at *20 (W.D. Mo. Nov. 9, 2021) (citing Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 460 (2016)). Plaintiffs’ evidence regarding Houlihan Lawrence’s business practices was introduced only to show Plaintiffs had fulfilled CPLR §§ 901-902, not to persuade the Court that it could infer “Houlihan Lawrence’s class-wide undisclosed, non-consensual dual agency.” FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 8 Houlihan Lawrence presently sees no need to depose individual class members about what damages, if any, they allegedly sustained as a result of Plaintiffs’ claims. Instead, Houlihan Lawrence will question the absent class members regarding the effect Houlihan Lawrence’s agency disclosures and advertising had on them. Because class members’ understanding of and reliance on Houlihan Lawrence’s communications with them are central to Plaintiffs’ class-wide liability claims, Houlihan Lawrence’s absent class member discovery is narrowly tailored. III. Houlihan Lawrence’s Absent Class Member Discovery Will Not Impose an Undue Burden on Absent Class Members. Whether absent class member discovery will impose an undue burden on absent class members is a fact-intensive inquiry that necessarily varies with the circumstances of each case. When examining whether proposed absent class member discovery imposes an undue burden, courts weigh defendants’ needs for the proposed discovery against the burden it imposes on absent class members. See, e.g., Bruhl v. PricewaterhouseCoopers Int’l, No. 03-23044-Civ, 2010 U.S. Dist. LEXIS 129504, at *9 (S.D. Fl. Dec. 8, 2010) (“[T]here is no indication that Defendants are motivated to take undue advantage. Clearly there is no other way for Defendants to get this information than through limited targeted discovery directed to absent class members.”). Houlihan Lawrence has determined that targeted depositions relating to approximately two hundred (200) subject transactions are required for Houlihan Lawrence to exercise its constitutional right to fully present its defenses. Because, as discussed below, Houlihan Lawrence cannot procure this evidence elsewhere, and because Houlihan Lawrence’s proposed absent class member deposition protocol is reasonable in light of the class size and composition, Houlihan Lawrence’s proposal does not impose an undue burden on absent class members. IV. The Discovery Houlihan Lawrence Seeks from Absent Class Members Is Not Available from the Representative Plaintiffs. Discovery from absent class members is particularly appropriate when defendants cannot meaningfully develop and present their defenses with information available from representative plaintiffs. In re Nat’l W. Life Ins. Deferered Annuities Litig., No. 05-CV-1018, 2010 U.S. Dist. LEXIS 123089, at *8-9 (S.D. Cal. Nov. 19, 2010) (“Defendants seek to establish lack of reliance on the part of other class members . . . . [T]he Court is unwilling to deny Defendants the opportunity to meaningfully defend themselves. The Court therefore finds that Defendants may take depositions . . . of a limited number of absent class members because the information they seek may bear on this case.”). The Named Plaintiffs in this action can only offer information relating to a small number of Houlihan Lawrence agents associated with Houlihan Lawrence’s White Plains office. Additionally, the Berks, as representatives of the sellers, cannot provide information regarding Plaintiffs’ theories on Houlihan Lawrence’s in-house bonus program, because their agent Gino Bello did not receive an in-house bonus in connection with the Berks’ transaction; or arbitration, since the Berks did not execute an Exclusive Right to Sell Agreement containing an arbitration clause. Because this suit involves many Houlihan Lawrence agents across three large New York counties—some of whom received in-house bonus payments—and because none of the Named FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 9 Plaintiffs executed arbitration agreements in connection with their transactions, Houlihan Lawrence cannot gather the information it needs to adequately develop its defenses without its absent class member discovery. Because Houlihan Lawrence’s absent class member discovery is necessary for Houlihan Lawrence to present its defenses, and because all four of the factors discussed above weigh in favor of permitting absent class member discovery, Houlihan Lawrence should be permitted to conduct absent class member depositions in accordance with the above-described plan. DEPONENT LIST We understand that Plaintiffs have been excused from providing a deponent list. Houlihan Lawrence provided a preliminary deponent list, in accordance with the Fourteenth Report and Recommendation. Given this development, Houlihan Lawrence notifies Plaintiffs that its deponent list is “open” and will be supplemented in the future. CLASS MEMBER LIST Plaintiffs appear to have withdrawn their complaints about the Class Member List, because Houlihan Lawrence used its system of record to generate it. This is the most accurate system.12 RESPONSES TO PLAINTIFFS’ DISCOVERY REQUESTS Plaintiffs have again sought to relitigate resolved issues and raise seriatim disputes with you that should have been resolved through the meet and confer process. For the reasons that follow, Plaintiffs’ discovery practices must be addressed at the outset of the merits phase to avoid adding three additional years to these proceedings. I. Preliminary Matters (Plaintiffs’ April 20, 2022 Letter §§ 1-4.1.3) a. New Request for Ten Document Custodians Plaintiffs reveal in their April 20, 2022 letter that they now “seek collection from ten custodians.” They do not identify the ten proposed custodians. The Fourteenth Report and Recommendation established March 21, 2022 as the deadline for Plaintiffs to identify their requested document custodians. On March 21, 2022, Plaintiffs identified their four requested “merits document discovery custodians:” Christopher Meyers, Stephen Meyers, Geoffery Berry, and Cynthia Landis. Vest to MacGill, March 21, 2022, attached as Exhibit E. Plaintiffs have provided no basis for adding belatedly six new and unidentified custodians. A maximum of two to four Houlihan Lawrence merits document custodians is appropriate in any event. As previously described, Houlihan Lawrence has produced emails from 12 If HL detects additional modifications that are needed to the class member list, it will notify the Referee and Plaintiffs. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 10 over 187 custodians and has responded to Plaintiffs’ 101 search term protocol.13 There is no need or justification for adding ten more custodians given discovery proceedings in this case. Plaintiffs made their choice on March 21, 2022. Plaintiffs’ document custodian request included only Christopher Meyers, Stephen Meyers, Geoffery Berry, and Cynthia Landis. b. Christopher and Stephen Meyers Much of Plaintiffs’ April 20, 2022 letter reads as though Plaintiffs have sued Christopher and Stephen Meyers individually.14 They have not. You have been resolving Plaintiffs’ requests for the Meyers’ emails for over two years, and you have denied them. See, e.g., Third R&R at 2 (“I previously denied any discovery relating to Stephen Meyers and Chris Meyers.”); Fourth R&R at 5 (“For the reasons set forth in my prior rulings, the new custodian cannot be either Stephen or Chris Meyers.”); Ninth R&R (not granting Plaintiffs’ request to add the Meyers as custodians). There is no reason to reverse course now. Plaintiffs have made no showing of insufficiency from the prior voluminous productions from Senior Vice President Debra Dalton, who Plaintiffs have stated was the “No. 3 person in charge at Houlihan Lawrence,” Exhibit F at 16:12-16; and “an important executive-level witness in her own right,” Exhibit G at 2. Ms. Dalton’s production satisfies whatever need Plaintiffs have for an executive level document custodian. Nothing encapsulates Plaintiffs’ behavior as to the Meyers better than Plaintiffs’ conduct surrounding Chris Meyers’ deposition. On July 1, 2021, Plaintiffs selected Chris Meyers as one of their ten deponents. Exhibit H. They ratified this selection in a Court Order, setting Chris Meyers’ deposition for October 7, 2021. Exhibit I. After Houlihan Lawrence had travelled to White Plains to prepare and attend Mr. Meyers’ deposition, Plaintiffs summarily cancelled his deposition less than forty-eight hours before it was to begin. Exhibit J. 13 Houlihan elected to comply with the 101 search term protocol to avoid litigation proceedings on the protocol for class certification purposes. Houlihan will make no such concession for merits purposes. Once the number of search terms is set, and the identity of the custodians is secure, Houlihan Lawrence will analyze the requested search terms. In the event that any of Plaintiffs’ requested search terms are overbroad, Houlihan Lawrence will then require briefing on narrowing Plaintiffs’ requested search terms to a scope that is proportionate to the needs of the case, not unduly burdensome, and reasonably calculated to lead to the discovery of admissible evidence. Due to the unreasonable nature of Plaintiffs’ current 162 search term request, Houlihan Lawrence does not engage on this exercise at this time in order to conserve judicial resources. 14 See, e.g., Plaintiffs’ Letter at 7 (“Proof that Christopher and Stephen Meyers reaped millions, if not tens of millions, from the sale of HL to HomeServices helps establish their motive to engage in that wrongful conduct . . . . The windfall that Christopher and Stephen Meyers reaped from HomeServices is also discoverable because a defendant’s wealth is material to the assessment of punitive damages.”). FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 11 Requests for discovery from the Meyers should be summarily denied. c. Request for 162 Search Terms Plaintiffs request 162 search terms. Exhibit E. Houlihan Lawrence should be permitted to utilize up to six search terms, as you have repeatedly instructed. 162 search terms creates undue burden and “make work” for Houlihan Lawrence document reviewers. The terms are not reasonably calculated to lead to the discovery of admissible evidence, they are disproportionate to the needs of the case, and they are unduly burdensome and harassing.15 II. Plaintiffs’ Document Requests (Plaintiffs’ April 20, 2022 Letter §§ 5.1-5.21) a. RFP 1 Plaintiffs should be instructed to provide a listing of the documents it seeks in response to RFP 1. As the party seeking discovery, Plaintiffs bear the burden of providing a comprehensible document request. Houlihan Lawrence is unable to understand what Plaintiffs are seeking. b. RFP 3 Plaintiffs have made no showing that these supposed “notes” are relevant to this case or are properly part of Ms. Dalton’s “custodial file.” Houlihan Lawrence has made a robust and comprehensive production from Ms. Dalton’s file using Plaintiffs’ preferred search term list. No further discovery with respect to Ms. Dalton is appropriate. In any event, you instructed us to inquire about the status of these documents, which we have done. We will report back when we know more. c. RFPs 4, 5, 6 and 11 During our April 22, 2022 teleconference, you requested a description of the process that would be required for Houlihan Lawrence to collect and produce “[t]he Transaction Detail Sheet for every Dual Agent Transaction from January 1, 2011 to July 14, 2018.” Plaintiffs’ RFP No. 4. Following consultation with Houlihan Lawrence personnel, Houlihan Lawrence confirms that, as it predicted during the teleconference, collecting the requested Transaction Detail Sheets would require a manual, transaction-by-transaction retrieval process that would take months to complete. It would require Houlihan Lawrence personnel to work nights and weekends, and it would take away from key resources at the Company and disrupt business operations. Houlihan Lawrence has already agreed to produce the physical transaction files for the transactions on the class list. The physical transaction files should contain the transaction detail sheets and the requested checks. See, e.g., Exhibit K (example physical transaction file) at -5285 (transaction detail sheet), at -5286 (check). As explained above, Plaintiffs will begin receiving these files on Friday on a rolling basis. Plaintiffs should examine the files every other Friday and create a list of the files that they claim do not contain appropriate documentation. Houlihan Lawrence can then initiate an 15 See also prior footnote 13 on future litigation of the identity of Plaintiffs’ search terms. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1432 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. May 2, 2022 Page 12 investigation into additional documentation, if any, on a transaction-by-transaction basis. This approach would allow the parties to address all issues relating to these RFPs in efficient, manageable pieces. d. RFPs 7-10 Plaintiffs have admitted that “all class members seek the [same] recovery…whether or not Houlihan Lawrence paid an In-House Bonus in connection with their transactions.” Exhibit L at 9. Plaintiffs have also argued that “[t]he Class members are similarly situated, regardless of whether HL paid a Bonus in connection with their transactions, because they had a right to know when deciding whether to consent to dual agency that HL incentivized in-house deals,” Exhibit M at 25, and that “every client who was party to a dual-agent transaction had a right to know about the Bonus.” Ex