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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
PAMELA GOLDSTEIN,
ELLYN & TONY BERK, as Administrators
of the Estate of Winifred Berk, and
PAUL BENJAMIN, on behalf of
themselves and all others similarly Index No. 60767/2018
situated,
Plaintiffs, Hon. Linda S. Jamieson
v.
HOULIHAN/LAWRENCE INC.,
Defendant.
MEMORANDUM OF LAW IN OPPOSITION TO HOULIHAN LAWRENCE’S
DISCOVERY MOTIONS 16-001 TO 16-018
Dated: May 25, 2022
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Chrysler Center
666 Third Avenue
New York, NY 10017
Boies Schiller Flexner LLP
333 Main Street
Armonk, NY 10504
Class Counsel for Class Plaintiffs
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Class Plaintiffs, by and through their undersigned Class Counsel,
respectfully submit this Memorandum of Law in Opposition to Houlihan Lawrence’s
Discovery Motions 16-001 to 16-018 (the “Motions”).
PRELIMINARY STATEMENT
Following three years of pre-class class certification discovery, on January 25,
2022, the Court granted class certification. Since then, Houlihan Lawrence (“HL”)
has used sharp practice and a variety of discovery tactics to prevent this case from
moving forward.1 Now, despite having already submitted 42 single-spaced pages of
briefing on the parties’ discovery disputes and having argued them before the
Discovery Referee, HL has hastily filed 18 separate motions that read like partial
rough drafts and only barely improve upon its cut-and-pasted submission the last
time the Discovery Referee afforded it an opportunity to re-brief these issues (the
“Motions”).
HL’s pretextual justification for the Motions was that Class Plaintiffs had
purportedly raised “new” issues in their May 6 submission,2 but HL does not even
bother anymore to keep up that pretense, relitigating numerous issues not among
those identified in its May 12 submission as requiring further briefing. HL had a
full and fair opportunity to present its discovery issues to the Discovery Referee and
to make a record of these proceedings using the same conferencing, letter briefing,
and dispute resolution procedures relied on by the parties throughout pre-class
1 Ex. 1, Email from J. Vest to W. Harrington, dated May 19, 2022
2 Ex. 2, Letter from R. MacGill to W. Harrington, May 12, 2022
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certification discovery and since the Discovery Referee’s appointment in May 2019.
HL is not entitled to a “do-over” now in the form of “structured briefing” simply
because it wants to delay resolution of disputes that it manufactured in the first
place in order to frustrate the Discovery Referee’s efforts to prepare this case for
trial by the end of the year. See Victorinox AG v. B&F Sys., 2015 U.S. Dist. LEXIS
169908 at *22 (S.D.N.Y. Dec. 12, 2015) (“The public pays a price when litigants use
up the courts’ time with gamesmanship and repetition, and it is ultimately in the
public interest for litigation to move forward.”).
Nevertheless, the Discovery Referee’s commitment to resolve the Motions by
issuing a Sixteenth Report and Recommendation on June 3 limits the damage done
by HL’s latest abuse of the discovery process. To prevent further delay, however,
that ruling should also resolve the other discovery disputes that are under
submission given that the parties fully briefed them in their April 20,3 May 2,4 and
May 65 submissions and HL did not relitigate them in the Motions. The other ripe
issues are those addressed in the following sections of Class Plaintiffs’ May 6
submission: E.4.2, E.4.5, E.4.7, E.4.12, E.4.13, E.4.14, F.2.1 and F.2.2.
ARGUMENT
At the May 20 conference, HL indicated that in its forthcoming reply in
further support of the Motions, when Class Plaintiffs have no opportunity to
3 Ex. 3, Letter from J. Vest to W. Harrington, Apr. 20, 2022 and Ex. 4, Letter from
R. MacGill to W. Harrington, Apr. 20, 2022
4 Ex. 5, Letter from R. MacGill to W. Harrington, May 2, 2022
5 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022
2
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respond, it intends to try to bolster its objections to the discovery sought by Class
Plaintiffs on burden and proportionality grounds. So let it be said here that any
such attempt is unavailing because this now-certified class action affects the rights
and interests of approximately 20,000 consumers; seeks recovery of more than $500
million in unearned sales commissions; and concerns undisclosed, non-consensual
dual agency, a matter of “paramount concern” in New York. Rivkin v. Century 21
Teran Realty, LLC, 10 N.Y.3d 344, 353 (2008). In short, the case has significant
public policy implications that give it importance far beyond the very considerable
monetary amount in controversy and outweigh any burden associated with HL’s
compliance with its discovery obligations. See Chen-Oster v. Goldman, Sachs & Co.,
285 F.R.D. 294, 305-06 (S.D.N.Y. 2012) (recognizing that the burden and
proportionality analysis must take in account the financial stakes and the non-
pecuniary importance of public-policy-related suits like this one); see also Allen v.
Tertle Operations LLC, 70 Misc.3d 934, 949 (Westchester Cnty. Dec. 17, 2020) (“[I]f
a case has the potential for broad public impact, then public policy weighs heavily in
favor of permitting extensive discovery.”) (quoting Zubulake v. UBS Warburg LLC,
217 F.R.D. 309, 321).
In weighing these important considerations against HL’s asserted burden,
the Discovery Referee must also recognize that the overwhelming majority of the
cost associated with HL’s production is due to its voluntary review and production
of its transaction files to advance its arbitration defense. HL cannot use its own
defense efforts to deny Class Plaintiffs discovery material and necessary to the
3
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prosecution of their case. Any attempt by HL to blame Class Plaintiffs for its
transaction-file-related costs, by citing their March 21 request for production of the
transaction files, ignores that they did so only after HL had already committed to
collect, review, and produce them as part of its identification of purported
arbitration signatories. See Dkt. 1083.
Finally, the Discovery Referee must further factor in Class Plaintiffs’ efforts
to control costs by, among other things, abandoning their pre-class certification
request for a systematic electronic collection from HL’s corporate shared drives and
InCrowd database. Class Plaintiffs seek here only a systematic electronic collection
from designated custodial files and targeted collections from any other file storage
location likely to contain responsive documents identified by HL after a reasonable
investigation, and therefore Class Plaintiffs have taken major steps to avoid vexing
and expensive disputes.
Given the foregoing, each of Class Plaintiffs’ discovery requests rises or falls
on its individual merits. For the reasons set forth below and in Class Plaintiffs’
April 20 and May 6 submissions, incorporated herein by this reference, the
Discovery Referee should deny the Motions and compel the requested discovery.
1. Motion 16-001: Request for Oral Argument
The Discovery Referee implicitly rejected HL’s request for oral argument on
the Motions at the May 20 conference when directing HL to complete briefing on the
Motions on June 1 and committing to decide them on June 3. See Niagara Venture
v. Niagara Falls Urban Renewal Agency, 56 A.D.3d 1150 (4th Dep’t 2008) (“a court
4
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is not required to grant oral argument of a motion, even in the event that a party
seeks oral argument”); see also 22 NYCRR § 202.8(d) (oral argument is at the court’s
discretion). The Motion provides no reason for the Discovery Referee to revisit the
discretionary decision not to hear supplemental oral argument on straightforward
issues that the parties argued at the April 22 conference and exhaustively briefed
before and after then.
2. Motion 16-002: Class Member List
HL still refuses to acknowledge that it committed at the April 22 conference
to provide a written explanation accounting for the approximately 2,000
transactions that appear on the MLS List but that HL omitted from the Profit
Power List (the “Omitted Transactions”).6 HL cannot unilaterally exclude these
transactions, without fulfilling its pledge to explain the Omitted Transactions,
especially when it previously represented to the Court, “without equivocation,” that
it could identify its dual-agent transactions only by searching the MLS:
[O]ur people are telling us without equivocation that the only
way they can find out whether there is a dual agency
transaction is they need to go to the MLS computer system and
look at that system and harvest the information off that
computer system. That’s step one. That will tell us whether
there is a dual agency, your Honor.
Ex. 1, Hon L. Jamieson Hr’g Tr. (Oct. 18, 2018) at 13:17-21.
It is already clear that the Profit Power List is under-inclusive. For instance,
the Profit Power List omits the sale of 37 Whispering Pines Way. Because that deal
6 Compare Ex. 7 (Profit Power List showing 9,448 transactions) and Ex. 8 (MLS
Listing showing 10,322 transactions)
5
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was among the Sample Transactions selected by the parties during pre-class
certification discovery from the MLS List, Class Plaintiffs already have the
transaction file, and its confirms that HL acted as a Dual Agent.7 Its omission from
the Profit Power List calls into question HL’s bald assertion that the MLS List is
“less accurate” than the Profit Power List.8
Class Plaintiffs’ request for a short, plain explanation for each Omitted
Transaction seeks only the information that HL agreed to provide at the April 22
conference, which is essential for Class Plaintiffs and the Court to assess whether
the Omitted Transactions are within the Class definition. Alternatively, HL should
produce the transaction file for every Omitted Transaction and the name and last
known physical mailing and email address for each party to those transaction so
that Class Plaintiffs can evaluate HL’s attempt to exclude those presumptive Class
members from the Class and send them notice of this certified class action in the
meantime.
3. Motion 16-003: Class member addresses
HL’s failure to raise this issue in its May 2 submission confirms that it was
resolved at the April 22 conference when Plaintiffs reiterated their prior agreement
to produce any updated email or physical mailing address they obtain in connection
with issuance of Class Notice. See Dkt. 1083 at ¶ 1(e). HL now seeks to relitigate
the issue by asking the Discovery Referee to require Class Plaintiffs to incur the
7 See Ex. 9, HL20417 (Form signed by buyer in 39 Whispering Way Form)
8 See Ex. 10, Letter from R. MacGill to J. Vest, Apr. 6, 2022 at 1
6
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expense of updating the physical mailing address for every Class member even if
the Court approves giving direct notice to the Class via email rather than U.S. mail.
Class Plaintiffs, however, are under no obligation to pay to update physical mailing
addresses for HL’s use and benefit unless the Court requires Plaintiffs to give direct
notice to the Class via U.S. mail. Under those circumstances, Plaintiffs again
affirm their agreement to update the physical mailing addresses for every Class
member and produce that updated information to HL.
4. Motion 16-004: December 31, 2022, discovery cutoff
In treating the deadline for the substantial completion of discovery as a “new”
issue,9 HL only proves what Class Plaintiffs said in their May 6 submission—that
HL had “not gotten the message” despite the Discovery Referee repeatedly advising
the parties during unrecorded teleconferences that fact and expert discovery must
be complete by the end of the year.10 The only reason HL offers to revisit the
December 31, 2022 discovery cutoff, which the Discovery Referee affirmed as
recently as May 19,11 is by projecting its own bad faith delay tactics onto Class
Plaintiffs and imagining that they will “generate more and more disputes as the
year progresses.” Whatever disputes may arise and whoever is to blame for them,
the Discovery Referee can manage them to ensure the parties meet the December
31, 2022, deadline.
9 Ex. 2, Letter from R. MacGill to W. Harrington, dated May 12, 2022
10 Ex. 6, Letter from J. Vest to W. Harrington, dated May 6, 2022 at 1
11 Ex. 11, Email from W. Harrington to J. Vest, May 19, 2022
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HL also argues that the December 31, 2022, discovery cutoff impermissibly
shortens the time purportedly afforded by Commercial Division Rule 13 for
completion of expert discovery. Rule 13(c), however, does not guarantee a four-
month expert discovery period, but rather merely sets that as the outer boundary.
See 22 NYCRR § 202.70 (“If any party intends to introduce expert testimony at trial,
no later than thirty days prior to the completion of fact discovery, the parties shall
confer on a schedule for expert disclosure … all of which shall be completed no later
than four months after the completion of fact discovery.”) (emphasis added). In any
event, resolution of the Motions on June 3 will keep the parties on track to conduct
expert discovery this fall.
It remains critically important to hold the parties to the December 31,
2022, discovery cutoff. The public has a substantial interest in the speedy
resolution of this case, Kahn v. General Motors Corp., 889 F.2d 1078, 1080 (Fed. Cir.
1989) (“Recognition must be given to the strong public policy favoring expeditious
resolution of litigation.”), because it involves alleged abuses by fiduciaries in
connection with thousands of residential real estate transactions, which for many
consumers is the largest financial transaction of their life. See J.P. v. Chassin, 189
A.D.2d 137, 144 (4th Dep’t 1993) (“The public is better served by the expeditious
resolution of professional misconduct charges.”). Its outcome will help determine
important issues affecting the future conduct not just of HL, who continues to put
clients into dual-agent transactions while denying any wrongdoing in this case, but
every real estate broker and agent practicing in New York State. The public’s
8
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compelling interest in vigorously enforcing agency disclosure and informed written
consent requirements, see Rivkin, 10 N.Y.3d at 353 (recognizing that RPL § 443
sought to address an issue of “paramount concern”), compels the expeditious
resolution of this certified consumer protection class action lawsuit.
5. Motion 16-005: Non-transaction file production deadline
HL has already had more than a month longer than the CPLR and the 14th
R&R afforded it to complete its production in response to Plaintiffs’ first set of
merits document requests. See Dkt. 1083 at ¶ 4 (“Pursuant to CPLR 3120, the
parties should be prepared to produce responsive, non-privileged documents within
thirty (30) days of service of the document demand.”). It is more than reasonable
then to require HL to complete its production within 21 days of the Court’s
confirmation of the 16th R&R several weeks from now. At most, the Discovery
should give HL the same 30-day production window originally set by the 14th R&R,
see id., which the Court confirmed without objection from HL.
6. Motion 16-006: Plaintiffs’ deponents
After refusing to produce a single document other than its transaction files in
response to Class Plaintiffs’ document requests, HL now seeks an advisory opinion
precluding Class Plaintiffs from deposing any of the individuals or entities
identified by Class Plaintiffs on their preliminary list of potential deponents. The
Motion is premature because, among other reasons, Class Plaintiffs have not yet
received any of the merits document discovery that will inform whose deposition
Class Plaintiffs ultimately decide to take and the Discovery Referee’s assessment of
9
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whether to permit them to do so. The Discovery Referee should deny the Motion
without prejudice to refiling at the appropriate time so that the Discovery Referee
may decide the potential, but significant and consequential deposition discovery
disputes raised in the Motion once they have ripened into actual disputes, on a more
complete documentary record, and alongside any deposition discovery issue that
Class Plaintiffs wish to raise. In the event the Discovery Referee decides to resolve
these issues now, Class Plaintiffs request seven days from the date of the Discovery
Referee’s decision to submit their opposition to the Motion and any cross-motion on
deposition discovery issues.
7. Motion 16-007: Document custodians
Despite having failed to identify any “new” issue raised in Class Plaintiffs’
May 6 submission, HL seeks to relitigate Class Plaintiffs’ proposed document
custodians for a third time without even bothering to confront the arguments made
by Class Plaintiffs in their previous submissions.
HL does not dispute that it has to-date designated only four general
document custodians and that pre-class certification discovery showed that the
custodial files of two of those individuals (Gricar and Dalton) are materially
incomplete.12 Instead, HL continues to try to mislead the Discovery Referee by
falsely equating the targeted collection of In-House Bonus emails from 183 agents
and managers of three HL offices with custodial collections. Those In-House Bonus
12 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.1.
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collections are not a substitute for custodial collections from key witnesses on the
full range of issues that will determine HL’s class-wide liability.
Plaintiffs have already dispatched HL’s objections to designation of
Christopher and Stephen Meyers as general document custodians and HL does not
even attempt to rehabilitate them here. Nor does HL try to explain why Plaintiffs
are not entitled to designation of a mere six sales agents given HL’s purported need
for 200 absent class member depositions and stated intent to call 100 sales agents
at trial to testify regarding their disclosures in 4,000 transactions.
Instead, already cultivating the next round of disputes, HL simply reserves
the right to lodge specific objections to designation of particular sales agents if the
Discovery Referee finds that Class Plaintiffs are entitled to a collection from a small
sample of sales agents. To nip that excuse for delay in the bud, Plaintiffs propose
designation of the following six sales agents: (1) Joan Frederick; (2) Angela Kessel;
(3) Pollena Forsman; (4) Gino Bello; (5) Sheila Stoltz; and (6) Tony Murphy. Each of
those sales agents were HL top producers throughout the Class period who,
according to the MLS List, rank in the top-15 among HL sales agents in total
number of dual-agent transactions brokered on behalf of HL.13
8. Motion 16-008: Search terms
HL relitigates Class Plaintiffs’ proposed search terms even though it does not
identify any purported “new” issue and without acknowledging that (a) the
Discovery Referee has already twice approved the search terms and (b) they
13 See Ex. 8, HL2638
11
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resulted in collection of fewer documents from Dalton’s custodial file than HL
collected from Chrystal’s custodial file using simple keyword searches.14 As that
experience shows, Class Plaintiffs’ proposed use of “Boolean” limiters to narrow the
scope of information retrieved by HL is an e-discovery best practice that improves
on basic keyword searching by eliminating false positives.15 HL’s refusal to
acknowledge the obvious distinction between search terms and search limiters to
manufacture the appearance of an unduly burdensome search protocol remains a
poor substitute for reasoned argument.
9. Motion 16-009: Hit count reports
HL cites a single case to suggest that there exists a unanimous and
nationwide prohibition on court-ordered production of the kind of hit count report
that the Discovery Referee already twice ordered HL to produce during pre-class
certification discovery. Whether or not a “right exists” to hit count reports,
numerous courts have ordered production of them, Silva v. Giorgio Armani Corp.,
2020 N.Y. Misc. LEXIS 9759 at *27 (N.Y. Cnty. Nov. 17, 2020), recognizing that
they provide an important check on discovery abuse. Castle Aero Fla. Int’l, Inc. v.
Mktg. & Fin. Servs., 2012 U.S. Dist. LEXIS 200873 at *6 (D. Minn. Oct. 10, 2012) (
“where there are concerns that a party has not produced all relevant documents, as
14 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.2
15 See The Sedona Conference Best Practices Commentary on the use of Search and
Information Retrieval Methods in E-Discovery, 8 Sedona Conf. J. 189, 202 (2007)
(“More advanced keyword searches using ‘Boolean’ operators and techniques
borrowed from ‘fuzzy logic’ may increase the number of relevant documents and
decrease the number of irrelevant documents retrieved.”).
12
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there are here, a hit report allows the party propounding the discovery to conduct
relatively unobtrusive quality control.”); In re Allergan PLC Sec. Litig., 2020 U.S.
Dist. LEXIS 56164 *4 (S.D.N.Y. Mar. 30, 2020) (ordering production of hits counts
because “[t]he Court is concerned that the defendants are not being sufficiently
forthcoming about the search process.”); Syntel Sterling Best Shores Mauritius v.
Trizetto Group, 2018 U.S. Dist. LEXIS 239351 at *3 (S.D.N.Y. May 25, 2018) (“the
Court finds that the disparity between the number of hit counts and the number of
documents produced calls into question whether Plaintiffs applied the appropriate
standard in determining, in the first instance, whether documents found on Mr.
Chadha’s devices were responsive to Defendants’ document requests.”). An order
directing HL to produce hit counts is a “relatively unobtrusive quality control”
measure that imposes no cost on HL while giving Class Plaintiffs much-needed
protection.16
10. Motion 16-010: Transaction Detail Sheets
HL again insists that the Discovery Referee await HL’s production of its
transaction files to see if they contain Transaction Detail Sheets (“TDS”) before
ordering HL to collect them from its electronic Profit Power database. It does so
without addressing Class Plaintiffs’ showing that only 9% of the sample
16 See Twelfth R&R, Dkt. 677 at 3 (“the reality is that twice in this litigation
documents which HLI deemed not responsive were, in fact, found to be responsive
by an in camera review.”)
13
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transaction files included a TDS.17 Just as incredible is HL’s failure to fess up to
the fact that, just as extrapolations from the sample transactions predicted, only
9.5% of the more than 500 transaction files that HL just produced on May 6 and
May 20 include a TDS.18
Because HL’s assertion that “[t]he physical transaction files should contain
the transaction detail sheets” is demonstrably false,19 the Discovery Referee should
order HL to collect and produce the TDS on the same schedule as its transaction
files. Any burden associated with HL meeting that schedule is the result of its
strategic decision to put off its collection by arguing that the TDS “should” be in its
transaction files when it had no good faith basis to do so. That said, the Discovery
Referee may give HL an additional 30 days without impeding progress because the
TDS are not needed to determine HL’s liability but to identify the sales commission
recoverable on each undisclosed, non-consensual dual agent transaction.
11. Motion 16-011: In-House Bonus payments and eligibility
HL merely repeats, in summary form, the same arguments that Class
Plaintiffs already refuted at the April 22 conference and in their May 6
submission.20 HL’s head-in-the-sand attitude towards the parties’ extensive prior
briefing on this issue only underscores that its true aim is to prolong the resolution
of this dispute. The In-House Bonus payment and eligibility records are essential
17 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.3
18 Ex. 12 (compilation of TDS)
19 See Ex. 5, Letter from R. MacGill to W. Harrington, May 2, 2022 at 11
20 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.4
14
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to permit Class Plaintiffs to identify those Class members whose rights HL violated
in the event the Court determines that only those whose transactions HL further
tainted by actual payment of an In-House Bonus are entitled to relief.
12. Motion 16-012: List of closed transactions
HL does not contend that Class Plaintiffs raised a “new” issue in their May 6
submission regarding their request for a list of HL’s closed transactions. HL just
seeks to supplement the record by arguing for the first time that the information is
equally available to Class Plaintiffs. To the contrary, Class Plaintiffs are not “a
member of a REALTOR association,” which is a prerequisite for access to OneKey
MLS, the multiple listing service for HL’s service area.21 HL suggests that Class
Plaintiffs subpoena the MLS, but the Court did not make them jump through that
hoop to obtain the MLS List, and they should not have to do so now when HL does
not dispute that it heavily relies on MLS data in the ordinary course of its
business.22
HL argues that the share of its business attributable to dual agency is
irrelevant, because it “does not bear on the elements of either of Plaintiffs’
remaining claims,” but that argument ignores the class-action context of this case
but more importantly the Court’s class certification order recognizing that HL’s
“orchestrated ‘strategy’ to increase in-house sales” is at issue. Dkt. 1072 at 10.
21 See https://www.hgar.com/about-us/mls (“You must be a member of a REALTOR®
association in order to join OneKey® MLS”)
22 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.6
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Class Plaintiffs are therefore entitled to show the growth of HL’s in-house sales
during the Class Period and their importance to HL’s overall financial importance.
13. Motion 16-013: Disclosure and Prompt Sheet
HL does not contend that Class Plaintiffs raised a “new” issue in their May 6
submission regarding the “Disclosure and Prompt Sheet,”23 and so HL’s relitigation
of this issue now for the third time only confirms Class Plaintiffs’ contention that
the “Disclosure and Prompt Sheet” is potentially “one of the central documents
in this case.”24
HL begins with the already-debunked argument that the “Disclosure and
Prompt Sheet” is irrelevant simply because of HL’s self-serving denial that it is a
script. As Class Plaintiffs have previously explained, it is precisely because HL
continues to dispute the nature, purpose, and significance of the “Disclosure and
Prompt Sheet” that the required discovery remains so important.25
HL next reasserts that Class “Plaintiffs have made no showing that Houlihan
Lawrence had a script of any kind,” but that remains both inconsistent with the
Court’s class certification decision, see Dkt. 1072 at 10 (recognizing that HL’s
“uniform training, script and practices” satisfied the commonality requirement),
and beside the point even were it not false. At a minimum, the “Disclosure and
23 Ex. 2, Letter from R. MacGill to W. Harrington, May 12, 2022
24 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.8 (emphasis
added)
25 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.8
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Prompt Sheet” is evidence of HL’s training and direction of its sales agents, which
are plainly relevant to the determination of Class Plaintiffs’ class-wide claims.26
HL moves on to the novel argument that Class Plaintiffs are playing a “game
of gotcha,” speculating that Class Plaintiffs are planning to argue that HL has
“implicitly conceded” that a “script” exists by producing documents relating to the
“Disclosure and Prompt Sheet.” But Class Plaintiffs’ document request regarding
the “Disclosure and Prompt Sheet” does not characterize it as a “script,”27 and even
if it did, HL need only follow its practice of making its production subject to a
disclaimer and reservation of rights to protect itself from the risk that it imagines.28
HL rests on another first-time assertion that Class Plaintiffs have already
had “every opportunity” for discovery into the “Disclosure and Prompt Sheet.” In
fact, the Discovery Referee denied Class Plaintiffs’ pre-class certification request for
“Disclosure and Prompt Sheet” discovery,29 before deposition testimony and the
Court’s class certification decision confirmed its central importance to this case.
14. Motion 16-014: Native file emails
HL yet again does not even attempt to justify its Motion by showing some
“new” issue raised in Plaintiffs’ May 6 submission regarding their requested
26
27 Ex. 14, Plaintiffs’ Third Request for Production of Documents at Request 19
28 See, e.g., Ex. 15, Letter from M. Ciulla to J. Vest, May 20, 2022 (producing
transaction files subject to numerous “caveats”)
29 Dkt. 574 at 14-15
17
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production of certain native file emails. The Motion simply substitutes new
arguments for the failed ones that HL advanced the first two times it argued this
issue. HL fares no better the third time around.
HL first asserts that Class Plaintiffs’ request for certain native file emails is
untimely, but it ignores that Class Plaintiffs demanded production of all emails in
native file format in its initial document requests,30 and they promptly pursued
native-file versions of the same emails at issue now before temporarily suspending
that request solely to expedite completion of pre-class certification discovery.31 HL’s
newfound reliance on 150 Nassau Assoc. LLC v. RC Dolner LLC, 96 A.D.3d 676, 677
(1st Dep’t 2012), which upheld denial of a request for a native file production made
for the first time only in the movant’s reply on its motion to compel, is therefore
misplaced.
In the interest of full disclosure, other cases not cited by HL deny production
of metadata where the producing party has already produced the documents in
another form, see, e.g., Aguilar v. Immigration &Customs Enforcement Div., 255
F.R.D. 350, 357 (S.D.N.Y. 2008), but they are similarly inapplicable. Class
Plaintiffs are not trying to force HL to redo its entire production in a new format
after the fact, like the requesting parties in the Aguilar line of cases, but rather
seek only a narrowly targeted production to verify the authenticity of a small
number of documents.
30 Ex. 16, Plaintiffs’ First Request for Production of Documents at I-10
31 See Ex. 3, Letter from J. Vest to W. Harrington, Apr. 20, 2022 at § 5.14
18
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New York courts have the discretion to order production in native file format
under those circumstances. All Craft Fabricators, Inc. v. ATC Assoc., Inc., 2017
N.Y. Misc. LEXIS 338 at *4 (N.Y. Cnty. Jan. 30, 2017) (“To the extent that plaintiffs
have not provided the properly demanded information in its native format it is
within the court’s discretion to order that the demanded information be produced.”);
see also Dartnell Enters. Inc. v. Hwelett Packard Co., 33 Misc.3d 1202(A) (Monroe
Cnty. Sept. 13, 2011) (“Electronic documents in their native language form may be
discoverable even when a hard copy has been provided.”); Hoffman v. Wyckoff Hgts.
Med. Ctr., 2015 N.Y. Misc. LEXIS 4997 at *15-16 (N.Y. Cnty. July 25, 2015)
(collecting cases order reproduction of documents in native file format).
Courts around the country recognize that “[o]nly native files can ensure
authenticity,” Edwards v. Junior Am. Found., 2021 U.S. Dist. LEXIS 788867 at *20
(E.D. Tex. Apr. 23, 2021),32 and therefore order production in native file format
where there is a need for metadata to verify a document’s authenticity. Mitchell v.
Reliable Sec., LLC, 2016 U.S. Dist. LEXIS 76128 at *5 (N.D. Ga. May 23, 2016)
(“While there has been no specific r
Preview
FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 EXHIBIT 7 (REDACTED) FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER PAMELA GOLDSTEIN, ELLYN & TONY BERK, as Administrators of the Estate of Winifred Berk, and PAUL BENJAMIN, on behalf of themselves and all others similarly Index No. 60767/2018 situated, Plaintiffs, Hon. Linda S. Jamieson v. HOULIHAN/LAWRENCE INC., Defendant. MEMORANDUM OF LAW IN OPPOSITION TO HOULIHAN LAWRENCE’S DISCOVERY MOTIONS 16-001 TO 16-018 Dated: May 25, 2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Chrysler Center 666 Third Avenue New York, NY 10017 Boies Schiller Flexner LLP 333 Main Street Armonk, NY 10504 Class Counsel for Class Plaintiffs FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 Class Plaintiffs, by and through their undersigned Class Counsel, respectfully submit this Memorandum of Law in Opposition to Houlihan Lawrence’s Discovery Motions 16-001 to 16-018 (the “Motions”). PRELIMINARY STATEMENT Following three years of pre-class class certification discovery, on January 25, 2022, the Court granted class certification. Since then, Houlihan Lawrence (“HL”) has used sharp practice and a variety of discovery tactics to prevent this case from moving forward.1 Now, despite having already submitted 42 single-spaced pages of briefing on the parties’ discovery disputes and having argued them before the Discovery Referee, HL has hastily filed 18 separate motions that read like partial rough drafts and only barely improve upon its cut-and-pasted submission the last time the Discovery Referee afforded it an opportunity to re-brief these issues (the “Motions”). HL’s pretextual justification for the Motions was that Class Plaintiffs had purportedly raised “new” issues in their May 6 submission,2 but HL does not even bother anymore to keep up that pretense, relitigating numerous issues not among those identified in its May 12 submission as requiring further briefing. HL had a full and fair opportunity to present its discovery issues to the Discovery Referee and to make a record of these proceedings using the same conferencing, letter briefing, and dispute resolution procedures relied on by the parties throughout pre-class 1 Ex. 1, Email from J. Vest to W. Harrington, dated May 19, 2022 2 Ex. 2, Letter from R. MacGill to W. Harrington, May 12, 2022 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 certification discovery and since the Discovery Referee’s appointment in May 2019. HL is not entitled to a “do-over” now in the form of “structured briefing” simply because it wants to delay resolution of disputes that it manufactured in the first place in order to frustrate the Discovery Referee’s efforts to prepare this case for trial by the end of the year. See Victorinox AG v. B&F Sys., 2015 U.S. Dist. LEXIS 169908 at *22 (S.D.N.Y. Dec. 12, 2015) (“The public pays a price when litigants use up the courts’ time with gamesmanship and repetition, and it is ultimately in the public interest for litigation to move forward.”). Nevertheless, the Discovery Referee’s commitment to resolve the Motions by issuing a Sixteenth Report and Recommendation on June 3 limits the damage done by HL’s latest abuse of the discovery process. To prevent further delay, however, that ruling should also resolve the other discovery disputes that are under submission given that the parties fully briefed them in their April 20,3 May 2,4 and May 65 submissions and HL did not relitigate them in the Motions. The other ripe issues are those addressed in the following sections of Class Plaintiffs’ May 6 submission: E.4.2, E.4.5, E.4.7, E.4.12, E.4.13, E.4.14, F.2.1 and F.2.2. ARGUMENT At the May 20 conference, HL indicated that in its forthcoming reply in further support of the Motions, when Class Plaintiffs have no opportunity to 3 Ex. 3, Letter from J. Vest to W. Harrington, Apr. 20, 2022 and Ex. 4, Letter from R. MacGill to W. Harrington, Apr. 20, 2022 4 Ex. 5, Letter from R. MacGill to W. Harrington, May 2, 2022 5 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 2 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 respond, it intends to try to bolster its objections to the discovery sought by Class Plaintiffs on burden and proportionality grounds. So let it be said here that any such attempt is unavailing because this now-certified class action affects the rights and interests of approximately 20,000 consumers; seeks recovery of more than $500 million in unearned sales commissions; and concerns undisclosed, non-consensual dual agency, a matter of “paramount concern” in New York. Rivkin v. Century 21 Teran Realty, LLC, 10 N.Y.3d 344, 353 (2008). In short, the case has significant public policy implications that give it importance far beyond the very considerable monetary amount in controversy and outweigh any burden associated with HL’s compliance with its discovery obligations. See Chen-Oster v. Goldman, Sachs & Co., 285 F.R.D. 294, 305-06 (S.D.N.Y. 2012) (recognizing that the burden and proportionality analysis must take in account the financial stakes and the non- pecuniary importance of public-policy-related suits like this one); see also Allen v. Tertle Operations LLC, 70 Misc.3d 934, 949 (Westchester Cnty. Dec. 17, 2020) (“[I]f a case has the potential for broad public impact, then public policy weighs heavily in favor of permitting extensive discovery.”) (quoting Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 321). In weighing these important considerations against HL’s asserted burden, the Discovery Referee must also recognize that the overwhelming majority of the cost associated with HL’s production is due to its voluntary review and production of its transaction files to advance its arbitration defense. HL cannot use its own defense efforts to deny Class Plaintiffs discovery material and necessary to the 3 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 prosecution of their case. Any attempt by HL to blame Class Plaintiffs for its transaction-file-related costs, by citing their March 21 request for production of the transaction files, ignores that they did so only after HL had already committed to collect, review, and produce them as part of its identification of purported arbitration signatories. See Dkt. 1083. Finally, the Discovery Referee must further factor in Class Plaintiffs’ efforts to control costs by, among other things, abandoning their pre-class certification request for a systematic electronic collection from HL’s corporate shared drives and InCrowd database. Class Plaintiffs seek here only a systematic electronic collection from designated custodial files and targeted collections from any other file storage location likely to contain responsive documents identified by HL after a reasonable investigation, and therefore Class Plaintiffs have taken major steps to avoid vexing and expensive disputes. Given the foregoing, each of Class Plaintiffs’ discovery requests rises or falls on its individual merits. For the reasons set forth below and in Class Plaintiffs’ April 20 and May 6 submissions, incorporated herein by this reference, the Discovery Referee should deny the Motions and compel the requested discovery. 1. Motion 16-001: Request for Oral Argument The Discovery Referee implicitly rejected HL’s request for oral argument on the Motions at the May 20 conference when directing HL to complete briefing on the Motions on June 1 and committing to decide them on June 3. See Niagara Venture v. Niagara Falls Urban Renewal Agency, 56 A.D.3d 1150 (4th Dep’t 2008) (“a court 4 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 is not required to grant oral argument of a motion, even in the event that a party seeks oral argument”); see also 22 NYCRR § 202.8(d) (oral argument is at the court’s discretion). The Motion provides no reason for the Discovery Referee to revisit the discretionary decision not to hear supplemental oral argument on straightforward issues that the parties argued at the April 22 conference and exhaustively briefed before and after then. 2. Motion 16-002: Class Member List HL still refuses to acknowledge that it committed at the April 22 conference to provide a written explanation accounting for the approximately 2,000 transactions that appear on the MLS List but that HL omitted from the Profit Power List (the “Omitted Transactions”).6 HL cannot unilaterally exclude these transactions, without fulfilling its pledge to explain the Omitted Transactions, especially when it previously represented to the Court, “without equivocation,” that it could identify its dual-agent transactions only by searching the MLS: [O]ur people are telling us without equivocation that the only way they can find out whether there is a dual agency transaction is they need to go to the MLS computer system and look at that system and harvest the information off that computer system. That’s step one. That will tell us whether there is a dual agency, your Honor. Ex. 1, Hon L. Jamieson Hr’g Tr. (Oct. 18, 2018) at 13:17-21. It is already clear that the Profit Power List is under-inclusive. For instance, the Profit Power List omits the sale of 37 Whispering Pines Way. Because that deal 6 Compare Ex. 7 (Profit Power List showing 9,448 transactions) and Ex. 8 (MLS Listing showing 10,322 transactions) 5 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 was among the Sample Transactions selected by the parties during pre-class certification discovery from the MLS List, Class Plaintiffs already have the transaction file, and its confirms that HL acted as a Dual Agent.7 Its omission from the Profit Power List calls into question HL’s bald assertion that the MLS List is “less accurate” than the Profit Power List.8 Class Plaintiffs’ request for a short, plain explanation for each Omitted Transaction seeks only the information that HL agreed to provide at the April 22 conference, which is essential for Class Plaintiffs and the Court to assess whether the Omitted Transactions are within the Class definition. Alternatively, HL should produce the transaction file for every Omitted Transaction and the name and last known physical mailing and email address for each party to those transaction so that Class Plaintiffs can evaluate HL’s attempt to exclude those presumptive Class members from the Class and send them notice of this certified class action in the meantime. 3. Motion 16-003: Class member addresses HL’s failure to raise this issue in its May 2 submission confirms that it was resolved at the April 22 conference when Plaintiffs reiterated their prior agreement to produce any updated email or physical mailing address they obtain in connection with issuance of Class Notice. See Dkt. 1083 at ¶ 1(e). HL now seeks to relitigate the issue by asking the Discovery Referee to require Class Plaintiffs to incur the 7 See Ex. 9, HL20417 (Form signed by buyer in 39 Whispering Way Form) 8 See Ex. 10, Letter from R. MacGill to J. Vest, Apr. 6, 2022 at 1 6 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 expense of updating the physical mailing address for every Class member even if the Court approves giving direct notice to the Class via email rather than U.S. mail. Class Plaintiffs, however, are under no obligation to pay to update physical mailing addresses for HL’s use and benefit unless the Court requires Plaintiffs to give direct notice to the Class via U.S. mail. Under those circumstances, Plaintiffs again affirm their agreement to update the physical mailing addresses for every Class member and produce that updated information to HL. 4. Motion 16-004: December 31, 2022, discovery cutoff In treating the deadline for the substantial completion of discovery as a “new” issue,9 HL only proves what Class Plaintiffs said in their May 6 submission—that HL had “not gotten the message” despite the Discovery Referee repeatedly advising the parties during unrecorded teleconferences that fact and expert discovery must be complete by the end of the year.10 The only reason HL offers to revisit the December 31, 2022 discovery cutoff, which the Discovery Referee affirmed as recently as May 19,11 is by projecting its own bad faith delay tactics onto Class Plaintiffs and imagining that they will “generate more and more disputes as the year progresses.” Whatever disputes may arise and whoever is to blame for them, the Discovery Referee can manage them to ensure the parties meet the December 31, 2022, deadline. 9 Ex. 2, Letter from R. MacGill to W. Harrington, dated May 12, 2022 10 Ex. 6, Letter from J. Vest to W. Harrington, dated May 6, 2022 at 1 11 Ex. 11, Email from W. Harrington to J. Vest, May 19, 2022 7 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 HL also argues that the December 31, 2022, discovery cutoff impermissibly shortens the time purportedly afforded by Commercial Division Rule 13 for completion of expert discovery. Rule 13(c), however, does not guarantee a four- month expert discovery period, but rather merely sets that as the outer boundary. See 22 NYCRR § 202.70 (“If any party intends to introduce expert testimony at trial, no later than thirty days prior to the completion of fact discovery, the parties shall confer on a schedule for expert disclosure … all of which shall be completed no later than four months after the completion of fact discovery.”) (emphasis added). In any event, resolution of the Motions on June 3 will keep the parties on track to conduct expert discovery this fall. It remains critically important to hold the parties to the December 31, 2022, discovery cutoff. The public has a substantial interest in the speedy resolution of this case, Kahn v. General Motors Corp., 889 F.2d 1078, 1080 (Fed. Cir. 1989) (“Recognition must be given to the strong public policy favoring expeditious resolution of litigation.”), because it involves alleged abuses by fiduciaries in connection with thousands of residential real estate transactions, which for many consumers is the largest financial transaction of their life. See J.P. v. Chassin, 189 A.D.2d 137, 144 (4th Dep’t 1993) (“The public is better served by the expeditious resolution of professional misconduct charges.”). Its outcome will help determine important issues affecting the future conduct not just of HL, who continues to put clients into dual-agent transactions while denying any wrongdoing in this case, but every real estate broker and agent practicing in New York State. The public’s 8 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 compelling interest in vigorously enforcing agency disclosure and informed written consent requirements, see Rivkin, 10 N.Y.3d at 353 (recognizing that RPL § 443 sought to address an issue of “paramount concern”), compels the expeditious resolution of this certified consumer protection class action lawsuit. 5. Motion 16-005: Non-transaction file production deadline HL has already had more than a month longer than the CPLR and the 14th R&R afforded it to complete its production in response to Plaintiffs’ first set of merits document requests. See Dkt. 1083 at ¶ 4 (“Pursuant to CPLR 3120, the parties should be prepared to produce responsive, non-privileged documents within thirty (30) days of service of the document demand.”). It is more than reasonable then to require HL to complete its production within 21 days of the Court’s confirmation of the 16th R&R several weeks from now. At most, the Discovery should give HL the same 30-day production window originally set by the 14th R&R, see id., which the Court confirmed without objection from HL. 6. Motion 16-006: Plaintiffs’ deponents After refusing to produce a single document other than its transaction files in response to Class Plaintiffs’ document requests, HL now seeks an advisory opinion precluding Class Plaintiffs from deposing any of the individuals or entities identified by Class Plaintiffs on their preliminary list of potential deponents. The Motion is premature because, among other reasons, Class Plaintiffs have not yet received any of the merits document discovery that will inform whose deposition Class Plaintiffs ultimately decide to take and the Discovery Referee’s assessment of 9 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 whether to permit them to do so. The Discovery Referee should deny the Motion without prejudice to refiling at the appropriate time so that the Discovery Referee may decide the potential, but significant and consequential deposition discovery disputes raised in the Motion once they have ripened into actual disputes, on a more complete documentary record, and alongside any deposition discovery issue that Class Plaintiffs wish to raise. In the event the Discovery Referee decides to resolve these issues now, Class Plaintiffs request seven days from the date of the Discovery Referee’s decision to submit their opposition to the Motion and any cross-motion on deposition discovery issues. 7. Motion 16-007: Document custodians Despite having failed to identify any “new” issue raised in Class Plaintiffs’ May 6 submission, HL seeks to relitigate Class Plaintiffs’ proposed document custodians for a third time without even bothering to confront the arguments made by Class Plaintiffs in their previous submissions. HL does not dispute that it has to-date designated only four general document custodians and that pre-class certification discovery showed that the custodial files of two of those individuals (Gricar and Dalton) are materially incomplete.12 Instead, HL continues to try to mislead the Discovery Referee by falsely equating the targeted collection of In-House Bonus emails from 183 agents and managers of three HL offices with custodial collections. Those In-House Bonus 12 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.1. 10 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 collections are not a substitute for custodial collections from key witnesses on the full range of issues that will determine HL’s class-wide liability. Plaintiffs have already dispatched HL’s objections to designation of Christopher and Stephen Meyers as general document custodians and HL does not even attempt to rehabilitate them here. Nor does HL try to explain why Plaintiffs are not entitled to designation of a mere six sales agents given HL’s purported need for 200 absent class member depositions and stated intent to call 100 sales agents at trial to testify regarding their disclosures in 4,000 transactions. Instead, already cultivating the next round of disputes, HL simply reserves the right to lodge specific objections to designation of particular sales agents if the Discovery Referee finds that Class Plaintiffs are entitled to a collection from a small sample of sales agents. To nip that excuse for delay in the bud, Plaintiffs propose designation of the following six sales agents: (1) Joan Frederick; (2) Angela Kessel; (3) Pollena Forsman; (4) Gino Bello; (5) Sheila Stoltz; and (6) Tony Murphy. Each of those sales agents were HL top producers throughout the Class period who, according to the MLS List, rank in the top-15 among HL sales agents in total number of dual-agent transactions brokered on behalf of HL.13 8. Motion 16-008: Search terms HL relitigates Class Plaintiffs’ proposed search terms even though it does not identify any purported “new” issue and without acknowledging that (a) the Discovery Referee has already twice approved the search terms and (b) they 13 See Ex. 8, HL2638 11 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 resulted in collection of fewer documents from Dalton’s custodial file than HL collected from Chrystal’s custodial file using simple keyword searches.14 As that experience shows, Class Plaintiffs’ proposed use of “Boolean” limiters to narrow the scope of information retrieved by HL is an e-discovery best practice that improves on basic keyword searching by eliminating false positives.15 HL’s refusal to acknowledge the obvious distinction between search terms and search limiters to manufacture the appearance of an unduly burdensome search protocol remains a poor substitute for reasoned argument. 9. Motion 16-009: Hit count reports HL cites a single case to suggest that there exists a unanimous and nationwide prohibition on court-ordered production of the kind of hit count report that the Discovery Referee already twice ordered HL to produce during pre-class certification discovery. Whether or not a “right exists” to hit count reports, numerous courts have ordered production of them, Silva v. Giorgio Armani Corp., 2020 N.Y. Misc. LEXIS 9759 at *27 (N.Y. Cnty. Nov. 17, 2020), recognizing that they provide an important check on discovery abuse. Castle Aero Fla. Int’l, Inc. v. Mktg. & Fin. Servs., 2012 U.S. Dist. LEXIS 200873 at *6 (D. Minn. Oct. 10, 2012) ( “where there are concerns that a party has not produced all relevant documents, as 14 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.2 15 See The Sedona Conference Best Practices Commentary on the use of Search and Information Retrieval Methods in E-Discovery, 8 Sedona Conf. J. 189, 202 (2007) (“More advanced keyword searches using ‘Boolean’ operators and techniques borrowed from ‘fuzzy logic’ may increase the number of relevant documents and decrease the number of irrelevant documents retrieved.”). 12 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 there are here, a hit report allows the party propounding the discovery to conduct relatively unobtrusive quality control.”); In re Allergan PLC Sec. Litig., 2020 U.S. Dist. LEXIS 56164 *4 (S.D.N.Y. Mar. 30, 2020) (ordering production of hits counts because “[t]he Court is concerned that the defendants are not being sufficiently forthcoming about the search process.”); Syntel Sterling Best Shores Mauritius v. Trizetto Group, 2018 U.S. Dist. LEXIS 239351 at *3 (S.D.N.Y. May 25, 2018) (“the Court finds that the disparity between the number of hit counts and the number of documents produced calls into question whether Plaintiffs applied the appropriate standard in determining, in the first instance, whether documents found on Mr. Chadha’s devices were responsive to Defendants’ document requests.”). An order directing HL to produce hit counts is a “relatively unobtrusive quality control” measure that imposes no cost on HL while giving Class Plaintiffs much-needed protection.16 10. Motion 16-010: Transaction Detail Sheets HL again insists that the Discovery Referee await HL’s production of its transaction files to see if they contain Transaction Detail Sheets (“TDS”) before ordering HL to collect them from its electronic Profit Power database. It does so without addressing Class Plaintiffs’ showing that only 9% of the sample 16 See Twelfth R&R, Dkt. 677 at 3 (“the reality is that twice in this litigation documents which HLI deemed not responsive were, in fact, found to be responsive by an in camera review.”) 13 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 transaction files included a TDS.17 Just as incredible is HL’s failure to fess up to the fact that, just as extrapolations from the sample transactions predicted, only 9.5% of the more than 500 transaction files that HL just produced on May 6 and May 20 include a TDS.18 Because HL’s assertion that “[t]he physical transaction files should contain the transaction detail sheets” is demonstrably false,19 the Discovery Referee should order HL to collect and produce the TDS on the same schedule as its transaction files. Any burden associated with HL meeting that schedule is the result of its strategic decision to put off its collection by arguing that the TDS “should” be in its transaction files when it had no good faith basis to do so. That said, the Discovery Referee may give HL an additional 30 days without impeding progress because the TDS are not needed to determine HL’s liability but to identify the sales commission recoverable on each undisclosed, non-consensual dual agent transaction. 11. Motion 16-011: In-House Bonus payments and eligibility HL merely repeats, in summary form, the same arguments that Class Plaintiffs already refuted at the April 22 conference and in their May 6 submission.20 HL’s head-in-the-sand attitude towards the parties’ extensive prior briefing on this issue only underscores that its true aim is to prolong the resolution of this dispute. The In-House Bonus payment and eligibility records are essential 17 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.3 18 Ex. 12 (compilation of TDS) 19 See Ex. 5, Letter from R. MacGill to W. Harrington, May 2, 2022 at 11 20 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.4 14 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 to permit Class Plaintiffs to identify those Class members whose rights HL violated in the event the Court determines that only those whose transactions HL further tainted by actual payment of an In-House Bonus are entitled to relief. 12. Motion 16-012: List of closed transactions HL does not contend that Class Plaintiffs raised a “new” issue in their May 6 submission regarding their request for a list of HL’s closed transactions. HL just seeks to supplement the record by arguing for the first time that the information is equally available to Class Plaintiffs. To the contrary, Class Plaintiffs are not “a member of a REALTOR association,” which is a prerequisite for access to OneKey MLS, the multiple listing service for HL’s service area.21 HL suggests that Class Plaintiffs subpoena the MLS, but the Court did not make them jump through that hoop to obtain the MLS List, and they should not have to do so now when HL does not dispute that it heavily relies on MLS data in the ordinary course of its business.22 HL argues that the share of its business attributable to dual agency is irrelevant, because it “does not bear on the elements of either of Plaintiffs’ remaining claims,” but that argument ignores the class-action context of this case but more importantly the Court’s class certification order recognizing that HL’s “orchestrated ‘strategy’ to increase in-house sales” is at issue. Dkt. 1072 at 10. 21 See https://www.hgar.com/about-us/mls (“You must be a member of a REALTOR® association in order to join OneKey® MLS”) 22 See Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.6 15 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 Class Plaintiffs are therefore entitled to show the growth of HL’s in-house sales during the Class Period and their importance to HL’s overall financial importance. 13. Motion 16-013: Disclosure and Prompt Sheet HL does not contend that Class Plaintiffs raised a “new” issue in their May 6 submission regarding the “Disclosure and Prompt Sheet,”23 and so HL’s relitigation of this issue now for the third time only confirms Class Plaintiffs’ contention that the “Disclosure and Prompt Sheet” is potentially “one of the central documents in this case.”24 HL begins with the already-debunked argument that the “Disclosure and Prompt Sheet” is irrelevant simply because of HL’s self-serving denial that it is a script. As Class Plaintiffs have previously explained, it is precisely because HL continues to dispute the nature, purpose, and significance of the “Disclosure and Prompt Sheet” that the required discovery remains so important.25 HL next reasserts that Class “Plaintiffs have made no showing that Houlihan Lawrence had a script of any kind,” but that remains both inconsistent with the Court’s class certification decision, see Dkt. 1072 at 10 (recognizing that HL’s “uniform training, script and practices” satisfied the commonality requirement), and beside the point even were it not false. At a minimum, the “Disclosure and 23 Ex. 2, Letter from R. MacGill to W. Harrington, May 12, 2022 24 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.8 (emphasis added) 25 Ex. 6, Letter from J. Vest to W. Harrington, May 6, 2022 at § E.4.8 16 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 Prompt Sheet” is evidence of HL’s training and direction of its sales agents, which are plainly relevant to the determination of Class Plaintiffs’ class-wide claims.26 HL moves on to the novel argument that Class Plaintiffs are playing a “game of gotcha,” speculating that Class Plaintiffs are planning to argue that HL has “implicitly conceded” that a “script” exists by producing documents relating to the “Disclosure and Prompt Sheet.” But Class Plaintiffs’ document request regarding the “Disclosure and Prompt Sheet” does not characterize it as a “script,”27 and even if it did, HL need only follow its practice of making its production subject to a disclaimer and reservation of rights to protect itself from the risk that it imagines.28 HL rests on another first-time assertion that Class Plaintiffs have already had “every opportunity” for discovery into the “Disclosure and Prompt Sheet.” In fact, the Discovery Referee denied Class Plaintiffs’ pre-class certification request for “Disclosure and Prompt Sheet” discovery,29 before deposition testimony and the Court’s class certification decision confirmed its central importance to this case. 14. Motion 16-014: Native file emails HL yet again does not even attempt to justify its Motion by showing some “new” issue raised in Plaintiffs’ May 6 submission regarding their requested 26 27 Ex. 14, Plaintiffs’ Third Request for Production of Documents at Request 19 28 See, e.g., Ex. 15, Letter from M. Ciulla to J. Vest, May 20, 2022 (producing transaction files subject to numerous “caveats”) 29 Dkt. 574 at 14-15 17 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 production of certain native file emails. The Motion simply substitutes new arguments for the failed ones that HL advanced the first two times it argued this issue. HL fares no better the third time around. HL first asserts that Class Plaintiffs’ request for certain native file emails is untimely, but it ignores that Class Plaintiffs demanded production of all emails in native file format in its initial document requests,30 and they promptly pursued native-file versions of the same emails at issue now before temporarily suspending that request solely to expedite completion of pre-class certification discovery.31 HL’s newfound reliance on 150 Nassau Assoc. LLC v. RC Dolner LLC, 96 A.D.3d 676, 677 (1st Dep’t 2012), which upheld denial of a request for a native file production made for the first time only in the movant’s reply on its motion to compel, is therefore misplaced. In the interest of full disclosure, other cases not cited by HL deny production of metadata where the producing party has already produced the documents in another form, see, e.g., Aguilar v. Immigration &Customs Enforcement Div., 255 F.R.D. 350, 357 (S.D.N.Y. 2008), but they are similarly inapplicable. Class Plaintiffs are not trying to force HL to redo its entire production in a new format after the fact, like the requesting parties in the Aguilar line of cases, but rather seek only a narrowly targeted production to verify the authenticity of a small number of documents. 30 Ex. 16, Plaintiffs’ First Request for Production of Documents at I-10 31 See Ex. 3, Letter from J. Vest to W. Harrington, Apr. 20, 2022 at § 5.14 18 FILED: WESTCHESTER COUNTY CLERK 07/21/2022 04:43 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1454 RECEIVED NYSCEF: 07/21/2022 New York courts have the discretion to order production in native file format under those circumstances. All Craft Fabricators, Inc. v. ATC Assoc., Inc., 2017 N.Y. Misc. LEXIS 338 at *4 (N.Y. Cnty. Jan. 30, 2017) (“To the extent that plaintiffs have not provided the properly demanded information in its native format it is within the court’s discretion to order that the demanded information be produced.”); see also Dartnell Enters. Inc. v. Hwelett Packard Co., 33 Misc.3d 1202(A) (Monroe Cnty. Sept. 13, 2011) (“Electronic documents in their native language form may be discoverable even when a hard copy has been provided.”); Hoffman v. Wyckoff Hgts. Med. Ctr., 2015 N.Y. Misc. LEXIS 4997 at *15-16 (N.Y. Cnty. July 25, 2015) (collecting cases order reproduction of documents in native file format). Courts around the country recognize that “[o]nly native files can ensure authenticity,” Edwards v. Junior Am. Found., 2021 U.S. Dist. LEXIS 788867 at *20 (E.D. Tex. Apr. 23, 2021),32 and therefore order production in native file format where there is a need for metadata to verify a document’s authenticity. Mitchell v. Reliable Sec., LLC, 2016 U.S. Dist. LEXIS 76128 at *5 (N.D. Ga. May 23, 2016) (“While there has been no specific r