Preview
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
EXHIBIT 15
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
156 E. Market Street
Suite 1200
Indianapolis, IN 46204
www.MacGillLaw.com
Robert D. MacGill
317.906.5085
Robert.MacGill@MacGillLaw.com
Via Email
July 8, 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:
Pursuant to your email of July 6, we write regarding search terms and custodians.
Search Terms.
We understand that Plaintiffs have withdrawn the following search terms:
• Disclos* w/10 “not”
• Bonus w/15 get AND NOT (hotel OR “credit card” OR airline)
• Agen* w/10 help
We further understand that Plaintiffs now concede that agen* w/10 disclos* be narrowed
to agen* w/3 disclos*.
Plaintiffs appear to be willing to live with the search terms:
• “in house” w/3 sale
• “in house” w/3 deal
Accordingly, the only discernable area of dispute regarding search terms at this time1
appears to be Plaintiffs’ request to add the search term “in house” w/3 bonus.
1
Please note, as we explained in detail during the hearing, narrowing of the 166 search
terms will be an iterative process. This was only the first pass at such narrowing. Once the
custodian list is set, we expect to need several more rounds of narrowing before document
review can begin in earnest. This may include further narrowing of the above-discussed terms
and/or narrowing of many of the other terms on the 166-term list.
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
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William P. Harrington, Esq.
July 8, 2022
Page 2
The Sixteenth Report and Recommendation properly acknowledges that Houlihan
Lawrence has already engaged in a “search and production of in-house dual agency bonus emails
from HLI’s Scarsdale, White Plains and Broxville offices,” and that HL has made a “far more
fulsome document production of the ‘hit’ documents.” 16th R&R at 10.
The “in house bonus” issues have been litigated extensively, and were addressed in the
Second, Fourth, Fifth, Sixth, and Seventh Reports and Recommendation. The litigation centered
around Plaintiffs’ “In House Bonus” search term request:
FIGURE 1: “In House Bonus” Search Terms Already Run & Produced.
These terms were run across the mailboxes of numerous Houlihan Lawrence personnel,
see, e.g., Fourth R&R at 11, and Houlihan Lawrence produced 55,247 pages of “in house bonus”
documents on November 9, 2020.
The request is duplicative of the already-adjudicated In House Bonus search terms, and
therefore it is not reasonably calculated to lead to the discovery of admissible evidence.
Accordingly, we decline to add “in house” w/3 bonus.
Custodians.
Everyone agrees that Plaintiffs are entitled to no more than 10 merits document
custodians.
Plaintiffs admit that the productions of the pre-class certification document custodians at
issue were “using the same search terms” that Plaintiffs now seek to use for merits purposes.
Exhibit A at 2 § 4.1. Indeed, Plaintiffs have acknowledged that “during pre-class certification
discovery, HL collected documents relating to the full range of its dual agency policies and
practices.” Exhibit B at 10 § E.1; see also Exhibit C at 11 (“the Discovery Referee has already
twice approved the search terms”); Exhibit D at 3 § 5 (“the same search terms the Discovery
Referee twice approved for collection from the Dalton and Arlt custodial files”).
In a moment of clarity, Plaintiffs even referred to the four prior document custodians as
the “four general document custodians.” Exhibit C at 10.
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July 8, 2022
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Now, when convenient, Plaintiffs reverse course and claim that these prior custodians
were on a wholly separate topic of discovery. This makes no sense and it is contradicted by the
concessions above.
The discovery Plaintiffs have received from the prior custodians used the same search
terms they seek to use for merits purposes. So Plaintiffs should either be required to (A) utilize
their ten slots for these individuals, or (B) agree not to use the prior custodians’ documents for
merits purposes. Otherwise, Plaintiffs will effectively have fifteen merits custodians, which is
prohibited by your Reports and Recommendations.
Best regards.
Very truly yours,
Robert D. MacGill
cc: Matthew Ciulla, Alfred Donnellan, Nelida Lara, J. Vest
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
Jeremy C. Vest Chrysler Center
212 692 6718 666 Third Avenue
jvest@mintz.com New York, NY 10017
212 935 3000
mintz.com
April 20, 2022
Via E-Mail
Mr. William P. Harrington
Bleakley Platt & Schmidt, LLP
One North Lexington Avenue
White Plains, NY 10601
Re: Goldstein et al. v. Houlihan/Lawrence Inc.,
No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty.)
Dear Mr. Harrington:
In accordance with the Fourteenth Report and Recommendation (“R&R”), I
write to identify the disputes that require resolution at Friday’s status conference.
The Fourteenth R&R balanced the parties’ interests by postponing issuance
of class notice for several months to allow Houlihan Lawrence (“HL”) to first
identify arbitration signatories, while setting a discovery schedule aimed at
readying the case for trial by the end of the year. Having gotten its preferred class
notice schedule, HL now seeks once again to bog Plaintiffs down in interminable
discovery disputes, including, as discussed further below, by refusing to produce a
single document other than its dual-agent transaction files and seeking a “global
extension of time” to avoid today’s deadline for the substantial completion of
document discovery. Plaintiffs request immediate issuance of a Fifteenth R&R
compelling HL to collect and produce the documents identified below, to avoid
rewarding HL’s continuing bad faith with what it wants the most—delay.
1. Absent class member depositions
While it is well-settled the absent class members are not parties for discovery
purposes, In re Allergan Generic Drug Pricing Sec. Litig., 2021 U.S. Dist. LEXIS
13078 at *6, Plaintiffs have agreed that they will not call absent Class members to
testify at trial in exchange for HL abandoning its effort to depose approximately 200
absent Class members.
BOSTON LONDON LOS ANGELES NEW YORK SAN DIEGO SAN FRANCISCO WASHINGTON
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
MINTZ
Mr. William P. Harrington
April 20, 2022
Page 2
2. Class member list
HL recently produced a list of Class members generated by searching its
Profit Power database (the “Profit Power List”), but it omits thousands of dual-
agent transactions on a similar list that HL previously generated from Multiple
Listing Services (the “MLS List”). HL asserts that the MLS List is “less accurate,”
but it has not explained why nor accounted for the thousands of transactions
missing from the Profit Power List. HL’s disavowal of the MLS List is especially
troubling because it previously represented to the Court, “without equivocation,”
that the MLS was “the only way” to “find out whether there is a dual agency
transaction.” Ex. 1, Hon. L. Jamieson Hr’g Tr. (Oct. 18, 2018) at 11:20-13:22.
3. Discovery schedule
HL recently advised that it intended to seek a “global extension of time,”
including of today’s deadline for the substantial completion of document discovery,
due solely to Plaintiffs’ requested production of HL’s dual-agent transaction files.
Ex. 2, Letter from R. MacGill to J. Vest, Apr. 11, 2022. But the schedule set by the
Fourteenth R&R accounted for HL’s purported need to “retrieve, scan and review”
“approximately 19,575 paper transaction files” to identify Class members
purportedly subject to arbitration. See Ex. 3, Letter from R. MacGill to W.
Harrington, Feb. 10, 2022. That work must necessarily be complete by next week’s
deadline for HL to produce a list of purported arbitration signatories. See
Fourteenth R&R at ¶ 12. Plaintiffs’ requested production of HL’s dual-agent
transaction files therefore provides no basis to relax the current schedule.
4. Document production
4.1. Merits document custodians and search terms
Plaintiffs seek collection from ten custodians using the same search terms
previously approved by the Discovery Referee for the pre-class certification
collections from Ms. Dalton and Mr. Arlt (the “Approved Search Terms”). These
custodial collections will obviate the need for a systematic collection from HL’s
corporate shared drives and InCrowd, eliminating two issues that protracted pre-
class certification discovery.
4.1.1. Christopher and Stephen Meyers
HL’s interrogatory responses identified Christopher and Stephen Meyers as
among the five persons most knowledgeable about its agency and In-House Bonus
policies. Ex. 4. HL now cites “prior rulings” to oppose designating them as merits
document custodians, but the Discovery Referee merely exempted Christopher and
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
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Mr. William P. Harrington
April 20, 2022
Page 3
Stephen Meyers from pre-class certification discovery. HL asserts that Ms. Dalton
and Mr. Arlt are adequate substitute custodians, but that is not the standard for
discovery, neither of them were HL’s chief policy-makers, and Christopher and
Stephen Meyers were not just former owners and chief executives, but “very hands
on in the management of the affairs of Houlihan Lawrence office managers and
sales agents.” Ex. 5, Dalton at 37:4-20. Plaintiffs seek collection from Christopher
and Stephen Meyers using the Approved Search Terms and four others designed to
capture documents relating to HL’s agency disclosure script, market-share growth
strategy, and efforts to boost in-house sales. See infra at §§ 5.12 and 5.13.
4.1.2. Geoffrey Berry and Cynthia Landis
During pre-class certification discovery, HL designated a single office
manager as a general document custodian, Mr. Arlt (Scarsdale). Plaintiffs now seek
collection from only two additional managers, Geoffrey Berry (White Plains) and
Cynthia Landis (Bronxville), both of whom are sufficiently important that Plaintiffs
deposed them during pre-class certification discovery without the benefit of their
documents and then relied heavily on their testimony and In-House Bonus e-mails
in support of class certification. HL has agreed only to “consider” designating them
as custodians while inexplicably objecting to collecting from them using the
Approved Search Terms. Ex. 2, Letter from R. MacGill to J. Vest, Apr. 11, 2022.
4.1.3. Leading sales agents
HL intends to rely at trial on the testimony of an unspecified number of sales
agents to try to demonstrate that it did not act an undisclosed, non-consensual dual
agent on a class-wide basis. Ex. 6, Letter from R. MacGill to J. Vest, Mar. 21, 2022.
Plaintiffs therefore seek to search the custodial files of six leading sales agents
using the Approved Search Terms to assess whether, when, and to what extent they
disclosed dual agency and the In-House Bonus to clients. By comparison, HL
sought discovery from 200 absent class members before Plaintiffs agreed not to
introduce absent class member testimony at trial.
5. HL’s discovery responses
HL agreed to produce its dual-agent transaction files but refused to produce a
single other responsive document except those that it intends to rely on at trial to
prove its own case. See Ex. 7, HL Discovery Responses, April 11, 2022. In addition
to ordering HL to collect and produce documents from the custodians identified
above, the Discovery Referee should order HL to conduct a reasonably diligent
inquiry for the following documents.
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Mr. William P. Harrington
April 20, 2022
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5.1. Previously withheld merits documents (Request No. 1)
HL insisted on bifurcation of pre-class certification discovery and limited its
pre-class certification document production to documents relevant to class
certification. HL should therefore be required to produce documents responsive to
Plaintiffs’ pre-class certification requests that it previously collected but withheld
on the ground that they were not relevant to class certification.
5.2. Ms. Dalton’s weekly executive meeting notes (Request No. 3)
HL refuses to search for and produce “piles” of handwritten notes taken by
Ms. Dalton during weekly meetings with Christopher and Stephen Meyers, which
she destroyed or left in her office when she separated from HL in December 2018—
five months after Plaintiffs filed suit. Ex. 5, Dalton at 77:22-80:4. Ms. Dalton’s
notes are likely among the best evidence of HL’s corporate priorities and strategy.
5.3. Dual-agent transaction files (Request No. 4)
As noted above, HL refuses to produce its dual-agent transactions files in
accordance with the schedule set by the Fourteenth R&R.
5.4. “Transaction Detail Sheets” (Request No. 5)
A Transaction Detail Sheet (“TDS”) is an electronic record maintained by HL
for each transaction in the same database that HL used to generate the Profit
Power List. A TDS identifies the parties to the transaction, HL’s gross commission,
and the split of that commission with HL sales agents. See, e.g., Ex. 8 and Ex. 9.
HL produced a TDS for every Sample Transaction during pre-class certification
discovery. Plaintiffs now need the TDS for the remaining dual-agent transactions
to identify the commission that each Class member seeks to recover.
.
5.5. Sales commission checks (Request No. 6)
Plaintiffs seek production of a copy of the sales commission check that HL
received in connection with every dual-agent transaction to verify the accuracy of
the gross commission reported by HL for each transaction on the TDS.
5.6. In-House Bonus eligibility (Request Nos. 7-9)
Plaintiffs’ motion for class certification showed that HL had a duty to disclose
its In-House Bonus to every client before seeking their consent to dual agency. See
Dkt. 688 at 25-27 and Dkt. 1037 at 8-10. HL countered that it owed disclosure, if at
all, only to those clients whose sales agents were eligible to receive an In-House
Bonus. See Dkt. 1036 at 11-13. Because the Court did not resolve this issue,
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Mr. William P. Harrington
April 20, 2022
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Plaintiffs seek production of documents sufficient to show, on an annual basis
throughout the Class period, the In-House Bonus eligibility of every sales agent.
5.7. In-House Bonus payments (Request No. 10)
In the event the Court determines that HL owed a disclosure obligation only
to those Class members whose agents received an In-House Bonus, Plaintiffs seek
documents sufficient to show any In-House Bonus paid by HL in connection with a
dual-agent transaction, which are necessary to identify the members of the
potential In-House Bonus sub-Class. According to HL’s Commission Processor, HL
“maintains business records” documenting each agent’s commission split and Bonus
eligibility that HL can use to identify In-House Bonus payments. Ex. 10.
5.8. Arbitration agreements (Request No. 11)
Plaintiffs reserve their rights but expect that HL will satisfy their request for
production of any arbitration agreement purportedly signed by a Class member
through its production of its dual-agent transaction files.
5.9. Performance reviews and self-evaluations (Request Nos. 12 and 13)
Christopher and Stephen Meyers annually evaluated Ms. Dalton and HL’s
office managers based on their success in increasing HL’s gross commission income
and company market share. See Ex. 11 at 90 (discussing performance metrics); see
also Ex. 12, Berry at 132:7-18 (acknowledging undergoing an annual performance
evaluation); Ex. 5, Dalton at 23:21-24:14 (same); and Ex. 13, Landis at 21:23-22:25
(same). To facilitate those evaluations, Ms. Dalton and HL’s office managers first
prepared written self-evaluations. Ex. 12, Berry at 132:10-134:5 (acknowledging
preparation of annual written performance self-evaluations); Dalton at 24:6-14
(same). Plaintiffs seek the self-evaluations and performance reviews to assess the
extent to which HL pushed dual agency as a way to achieve its performance goals.
See Ex. 12, Berry at 127:5-9, 128:17-129:6.
5.10. Employment agreements (Request No. 14)
During pre-class certification discovery, HL produced the employment
agreements for two office managers, see, e.g., Ex. 14, which confirm their profit-
sharing bonus compensation, but not for Ms. Dalton, Mr. Arlt, or Ms. Landis.
5.11. List of closed transactions (Request No. 16)
The Court previously ordered HL to produce the aforementioned MLS List,
showing the approximately 10,000 dual-agent transactions brokered by HL during
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Mr. William P. Harrington
April 20, 2022
Page 6
the Class period, but HL refuses to produce a list of all of its closed transactions,
which would show the share of HL’s business attributable to dual agency.
5.12. Efforts to boost in-house sales (Request Nos. 17 and 18)
Plaintiffs’ motion for class certification showed that HL sought to increase its
in-house sales as part of its strategic response to the 2008 housing crisis, Dkt. 688
at 12-16, and the Court cited that “orchestrated ‘strategy’ to increase in-house sales”
as a basis for granting Plaintiffs’ motion, Dkt. 1072 at 10. Plaintiffs expect that
most of the communications responsive to these requests are located in the
custodial files of Christopher and Stephen Meyers.
5.13. “Disclosure and Prompt Sheet” (Request No. 19)
Plaintiffs’ motion for class certification showed that HL standardized its
agency disclosure by giving “agents a ‘Disclosure and Prompt Sheet,’” which
Plaintiffs argued was a “script for presenting the Form,” Dkt. 688 at 8, and the
Court cited that “script” as a basis for granting Plaintiffs’ motion, Dkt. 1072 at 10.
Plaintiffs therefore seek evidence relating to the drafting, corporate approval, and
internal dissemination of the script.
5.14. Native-file e-mails (Request No. 20)
During pre-class certification discovery, Plaintiffs sought production of 60 e-
mails in native file format with associated metadata intact, see Dkt. 575 at 5, Letter
from J. Vest to W. Harrington, Jan. 27, 2020, but suspended pursuit of those e-
mails to expedite completion of pre-class certification discovery, see Dkt. 577 at 3, n.
1. Plaintiffs require the native-file production to assess the e-mails’ authenticity.
5.15. Plaintiffs’ transaction documents (Request Nos. 21-24)
During pre-class certification discovery, Plaintiffs sought production of every
e-mail during the relevant period between the sales agents involved in the named
Plaintiffs’ transactions, id., but also suspended pursuit of those e-mails to move the
case forward. See Dkt. 577 at 3, n. 1. HL collected e-mails relating to the named
Plaintiffs’ transactions using only a single search term—the relevant property
address. Dkt. 575 at 5-6. HL’s crude search method therefore likely failed to collect
the sales agents’ most informal and candid communications.
5.16. Communications with HomeServices (Request No. 24)
HL refuses to produce its communications with HomeServices regarding dual
agency and its In-House Bonus even though HomeServices audited HL’s corporate
policies, agency disclosure forms and transaction files prior to its acquisition of HL
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Mr. William P. Harrington
April 20, 2022
Page 7
in January 2017. Ex. 5, Dalton at 191:19-193:14. Plaintiffs expect that most of the
responsive communications are located in the custodial files of Christopher and
Stephen Meyers.
5.17. HomeServices purchase agreement (Request No. 25)
As noted above, the Court recognized that evidence that HL used undisclosed,
non-consensual dual agency as part of an “orchestrated ‘strategy’ to increase in-
house sales” supported their claim for class-wide relief. Dkt. 1072 at 10. 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. To the extent that HomeServices has a right to recoup some or all of what
it paid Christopher and Stephen Meyers if Plaintiffs are successful, the purchase
agreement bears on their interest and bias as well. 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.” Trussell-
Slutsky v. Mcilmurray, 184 A.D.3d 891, 893 (2d Dep’t 2020).
5.18. Ethical or disciplinary complaints (Request No. 26)
The Fourth R&R directed HL to “produce documents sufficient to show any
disciplinary action (including withheld commission checks) taken by HLI against
any office managers or sales agents in the Scarsdale, Bronxville and White Plains
office for failure to comply with agency disclosure obligations regarding dual agency
by May 18, 2020.” Dkt. 574 at 16. Plaintiffs now seek documents sufficient to show
any lawsuits or disciplinary actions filed against HL or its sales agents.
5.19. Insurance agreements (Request No. 28)
New York law permits discovery of the “existence and contents of any
insurance agreement” available to HL to satisfy any judgment that Plaintiffs may
obtain. CPLR 3101(f). Disclosure of all primary and excess policies is required to
“facilitate and encourage settlement.” CPLR 3101(f) & Practice Commentary. HL
directed Plaintiffs to the action filed by an insurer against HL seeking a declaration
of non-coverage, but Plaintiffs are entitled to know whether HL has any other
potential coverage.
5.20. Separation agreements (Request No. 29)
HL produced its separation agreement with the former Irvington office
manager, Brian Levine, see Ex. 15, but not with Christopher Meyers, Ms. Dalton,
Mr. Gricar, and Mr. Arlt, all of whom are expected to testify at trial and have
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Mr. William P. Harrington
April 20, 2022
Page 8
separated from HL. Any cooperation agreement between them and HL is relevant
to their credibility.
5.21. Corporate profits (Request Nos. 30 and 31)
As noted above, the millions, if not tens of millions, that HL and Christopher
and Stephen Meyers reaped from HL’s undisclosed, non-consensual dual agency,
whether through the sale of HL to HomeServices or in annual compensation or
profit distributions, bears on their motive to illicitly boost in-house sales and
Plaintiffs’ request for punitive damages.
* * *
The foregoing (as well as Plaintiffs’ forthcoming response to the issues that
HL seeks to raise on Friday) demonstrate that HL’s litigation strategy is to
proliferate discovery disputes based on the cynical calculation that it can win by
losing simply by putting off trial another day. Plaintiffs request immediate
issuance of the Fifteenth R&R to ensure completion of discovery by the end of the
year as contemplated by the Fourteenth R&R.
Regards,
Jeremy Vest
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
Jeremy C. Vest Chrysler Center
212 692 6718 666 Third Avenue
jvest@mintz.com New York, NY 10017
212 935 3000
mintz.com
May 6, 2022
Via E-Mail
Mr. William P. Harrington
Bleakley Platt & Schmidt, LLP
One North Lexington Avenue
White Plains, NY 10601
Re: Goldstein et al. v. Houlihan/Lawrence Inc.,
No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty.)
Dear Mr. Harrington:
I write in reply to Houlihan Lawrence’s May 2, 2022 letter following up on
issues raised during the parties’ April 22, 2022 discovery conference. Plaintiffs
request the Discovery Referee’s immediate attention to the issue addressed below in
§ B.3 and a report and recommendation resolving all other issues as soon as
possible thereafter.
A. Scheduling
1. Close of discovery deadline
The Discovery Referee has emphasized during unrecorded conferences that
the parties must complete fact and expert discovery by the end of the year. HL has
not gotten the message. The forthcoming report and recommendation should
memorialize the December 31, 2022 discovery cutoff.
2. Transaction file production deadline
Anything more than a modest extension of the April 29 deadline for HL to
produce its transaction files rewards HL’s sharp practice. The Discovery Referee
set that deadline only after several rounds of written submissions and hearing oral
argument from the parties on February 11, February 18 and March 1. HL did not
object to the Court’s confirmation of the Fourteenth Report and Recommendation
(“14th R&R”), see Dkt Nos. 1085-1088, and nothing has changed in the six weeks
since then to justify its non-compliance.
BOSTON LONDON LOS ANGELES NEW YORK SAN DIEGO SAN FRANCISCO WASHINGTON
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
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Mr. William P. Harrington
May 6, 2022
Page 2
HL submits (2) an affidavit from Consilio to justify its reargument, but the
Discovery Referee heard from Consilio before entering the 14th R&R. See Ex. 1, R.
MacGill to W. Harrington, Feb. 10, 2022 at Ex. 5.
HL says (2) August 12 is the best that it can do, but as recently as February
22, HL pledged to identify arbitration signatories by June 14 and to move to compel
arbitration by June 21. Ex. 2, HL’s February 22, 2022 Proposed CMP at ¶¶ 12-13.
HL is to blame if it must now struggle to meet its own June 14 deadline. HL
inexcusably waited to retrieve its files until “[a]fter the Fourteenth Report and
Recommendation was published in March”. Ex. 3, R. MacGill to W. Harrington,
Apr. 20, 2022 at 2. Had HL acted after the Court granted certification on January
25, even accepting its self-serving 16-22 week review schedule, HL would have
completed its production as early as May 17 and no later than June 28.
Make no mistake: HL is trying to hold class notice hostage. It will argue that
the Court must identify and exclude arbitration signatories before class notice.
The Discovery Referee should not extend HL’s deadline to produce its
transaction files and to move to compel arbitration past HL’s own previous June 14
and June 21 deadlines. Further, the Discovery Referee should direct HL to produce
the first half of its transaction files by May 17, sixteen weeks from the date of the
Court’s January 25 certification order.
3. Other document production deadlines
HL tries to slip in its conclusory and unsupported footnote request (4, n. 7) to
further modify the 14th R&R to extend its April 20 deadline to complete its
production of all other documents to August 12 or “45 days after [any] dispute is
resolved, whichever is later.” Compare 14th R&R 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.”). HL’s proposed
schedule makes it easy for HL to push document discovery well past Labor Day by
manufacturing another dispute.
Plaintiffs served their document requests nearly two months ago, so HL has
already had nearly twice the time afforded by CPLR § 3120 to turn over its
responsive documents. The Discovery Referee therefore should give HL no more
than 21 days to complete its production following the Court’s confirmation of the
forthcoming report and recommendation.
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Mr. William P. Harrington
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Page 3
B. Class notice
1. Jurisdiction
During the parties’ April 28 meet and confer, Plaintiffs offered to consent to
the Discovery Referee hearing Plaintiffs’ motion for approval of their class notice
plan if in return HL agreed to forego Court review of the Discovery Referee’s
decision. HL’s on-the-spot refusal shows that its goal is a slow-moving two-step
approval process that will delay class notice.
HL encourages (4) the Discovery Referee to rely on the 14th R&R to assert
authority to approve the forms and methods of class notice. However, on its face the
14th R&R authorizes the Discovery Referee only “to resolve outstanding issues
regarding class notification discovery,” 14th R&R at ¶ 18 (emphasis added), like
HL’s potentially deficient purported Class member list, see infra at § B.3.
The Court’s past delegation of certain sealing and scheduling issues to the
Discovery Referee (4) shows only that it may refer specific issues outside of its May
2019 Order of Reference—not that it has done so with respect to substantive class
notice issues.
HL’s alternate request (5) that the Discovery Referee recommend delegation
of class notice “pursuant to CPLR § 4212” implicitly concedes the issue. Nothing in
the Order of Reference recognizes “some exceptional condition” justifying the
Court’s referral of substantive issues to the “discovery master,” as HL apparently
recognizes CPLR § 4212 would have required. See Dkt. 547 at 1 (appointing a
“discovery master” to “hear and report on all issues of discovery”).
Resolving discovery disputes and otherwise managing this case to ready it for
trial by the end of the year promises to keep the Discovery Referee busy. The Court
can and should handle class notice.
2. Filing deadline
As Plaintiffs previously advised, the parties have agreed that Plaintiffs will
move for approval of their class notice plan within seven days of your resolution of
the jurisdictional issue. Ex. 4, J. Vest to W. Harrington, Apr. 29, 2022. For good
order, the report and recommendation should reflect this change.
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022
MINTZ
Mr. William P. Harrington
May 6, 2022
Page 4
3. Class member list
HL’s assertion (9) that “Plaintiffs appear to have withdrawn their complaints
about the Class Member List” exemplifies its refusal to participate in discovery in
good faith.
As Plaintiffs have previously explained, Plaintiffs are troubled by the still
unaccounted-for absence of more than 1,000 transactions from the purported Class
member list that were on the MLS List that HL told the Court showed its dual-
agent transactions during the Class period. See Ex. 5, J. Vest to W. Harrington,
Apr. 20 at 2.
At the April 22 conference, Plaintiffs naively gave HL the benefit of the
doubt, agreeing to defer consideration of the Class member list after HL promised to
provide a detailed written explanation for the missing transactions. HL now
reneges on that commitment either because it does not have an adequate
explanation or to keep the issue alive to create another obstacle to class notice.
HL’s prior agreement means that resolution of this issue need and should not
await issuance of a report and recommendation. The Discovery Referee should
immediately email HL to direct it to produce within three days a spreadsheet
identifying by property address every transaction on the MLS List that it omitted
from the Profit Power List and a short, plain statement for each omitted transaction
explaining why HL considers it to be outside of the Class.
Plaintiffs and the Court cannot fulfill their obligation to ensure that HL has
identified all Class members without this information.
C. Absent class member depositions
At the April 22 conference, the Discovery Referee recognized that Plaintiffs’
proposal should resolve this issue: Plaintiffs agreed (a) not to call absent class
members in their case-in-chief; and (b) in rebuttal only in the unlikely event any of
the 100 or more sales agents who HL said it intends to call in its defense purport to
recall individual conversations. See Dkt. 1037 at 4 (Plaintiffs’ discussing Bello’s
inability to recall details of his disclosure in nearly a dozen dual-agent
transactions). HL instead presses ahead because its goal is not a fair trial but delay
and re-litigation of class certification. The Discovery Referee should deny its
request for absent class member depositions, without yet more oral argument (1).
1. Standard
There appear to be only two New York cases discussing absent class member
discovery, Pludeman v. Northern Leasing Sys., Inc., 2013 N.Y. Misc. LEXIS 4309
(N.Y. Cnty. 2013) and Murray v. Allied Signal, Inc., 177 A.D.2d 984 (4th Dep’t
FILED: W
Preview
FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 EXHIBIT 15 FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 156 E. Market Street Suite 1200 Indianapolis, IN 46204 www.MacGillLaw.com Robert D. MacGill 317.906.5085 Robert.MacGill@MacGillLaw.com Via Email July 8, 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: Pursuant to your email of July 6, we write regarding search terms and custodians. Search Terms. We understand that Plaintiffs have withdrawn the following search terms: • Disclos* w/10 “not” • Bonus w/15 get AND NOT (hotel OR “credit card” OR airline) • Agen* w/10 help We further understand that Plaintiffs now concede that agen* w/10 disclos* be narrowed to agen* w/3 disclos*. Plaintiffs appear to be willing to live with the search terms: • “in house” w/3 sale • “in house” w/3 deal Accordingly, the only discernable area of dispute regarding search terms at this time1 appears to be Plaintiffs’ request to add the search term “in house” w/3 bonus. 1 Please note, as we explained in detail during the hearing, narrowing of the 166 search terms will be an iterative process. This was only the first pass at such narrowing. Once the custodian list is set, we expect to need several more rounds of narrowing before document review can begin in earnest. This may include further narrowing of the above-discussed terms and/or narrowing of many of the other terms on the 166-term list. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. July 8, 2022 Page 2 The Sixteenth Report and Recommendation properly acknowledges that Houlihan Lawrence has already engaged in a “search and production of in-house dual agency bonus emails from HLI’s Scarsdale, White Plains and Broxville offices,” and that HL has made a “far more fulsome document production of the ‘hit’ documents.” 16th R&R at 10. The “in house bonus” issues have been litigated extensively, and were addressed in the Second, Fourth, Fifth, Sixth, and Seventh Reports and Recommendation. The litigation centered around Plaintiffs’ “In House Bonus” search term request: FIGURE 1: “In House Bonus” Search Terms Already Run & Produced. These terms were run across the mailboxes of numerous Houlihan Lawrence personnel, see, e.g., Fourth R&R at 11, and Houlihan Lawrence produced 55,247 pages of “in house bonus” documents on November 9, 2020. The request is duplicative of the already-adjudicated In House Bonus search terms, and therefore it is not reasonably calculated to lead to the discovery of admissible evidence. Accordingly, we decline to add “in house” w/3 bonus. Custodians. Everyone agrees that Plaintiffs are entitled to no more than 10 merits document custodians. Plaintiffs admit that the productions of the pre-class certification document custodians at issue were “using the same search terms” that Plaintiffs now seek to use for merits purposes. Exhibit A at 2 § 4.1. Indeed, Plaintiffs have acknowledged that “during pre-class certification discovery, HL collected documents relating to the full range of its dual agency policies and practices.” Exhibit B at 10 § E.1; see also Exhibit C at 11 (“the Discovery Referee has already twice approved the search terms”); Exhibit D at 3 § 5 (“the same search terms the Discovery Referee twice approved for collection from the Dalton and Arlt custodial files”). In a moment of clarity, Plaintiffs even referred to the four prior document custodians as the “four general document custodians.” Exhibit C at 10. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 William P. Harrington, Esq. July 8, 2022 Page 3 Now, when convenient, Plaintiffs reverse course and claim that these prior custodians were on a wholly separate topic of discovery. This makes no sense and it is contradicted by the concessions above. The discovery Plaintiffs have received from the prior custodians used the same search terms they seek to use for merits purposes. So Plaintiffs should either be required to (A) utilize their ten slots for these individuals, or (B) agree not to use the prior custodians’ documents for merits purposes. Otherwise, Plaintiffs will effectively have fifteen merits custodians, which is prohibited by your Reports and Recommendations. Best regards. Very truly yours, Robert D. MacGill cc: Matthew Ciulla, Alfred Donnellan, Nelida Lara, J. Vest FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 Jeremy C. Vest Chrysler Center 212 692 6718 666 Third Avenue jvest@mintz.com New York, NY 10017 212 935 3000 mintz.com April 20, 2022 Via E-Mail Mr. William P. Harrington Bleakley Platt & Schmidt, LLP One North Lexington Avenue White Plains, NY 10601 Re: Goldstein et al. v. Houlihan/Lawrence Inc., No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty.) Dear Mr. Harrington: In accordance with the Fourteenth Report and Recommendation (“R&R”), I write to identify the disputes that require resolution at Friday’s status conference. The Fourteenth R&R balanced the parties’ interests by postponing issuance of class notice for several months to allow Houlihan Lawrence (“HL”) to first identify arbitration signatories, while setting a discovery schedule aimed at readying the case for trial by the end of the year. Having gotten its preferred class notice schedule, HL now seeks once again to bog Plaintiffs down in interminable discovery disputes, including, as discussed further below, by refusing to produce a single document other than its dual-agent transaction files and seeking a “global extension of time” to avoid today’s deadline for the substantial completion of document discovery. Plaintiffs request immediate issuance of a Fifteenth R&R compelling HL to collect and produce the documents identified below, to avoid rewarding HL’s continuing bad faith with what it wants the most—delay. 1. Absent class member depositions While it is well-settled the absent class members are not parties for discovery purposes, In re Allergan Generic Drug Pricing Sec. Litig., 2021 U.S. Dist. LEXIS 13078 at *6, Plaintiffs have agreed that they will not call absent Class members to testify at trial in exchange for HL abandoning its effort to depose approximately 200 absent Class members. BOSTON LONDON LOS ANGELES NEW YORK SAN DIEGO SAN FRANCISCO WASHINGTON MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 2 2. Class member list HL recently produced a list of Class members generated by searching its Profit Power database (the “Profit Power List”), but it omits thousands of dual- agent transactions on a similar list that HL previously generated from Multiple Listing Services (the “MLS List”). HL asserts that the MLS List is “less accurate,” but it has not explained why nor accounted for the thousands of transactions missing from the Profit Power List. HL’s disavowal of the MLS List is especially troubling because it previously represented to the Court, “without equivocation,” that the MLS was “the only way” to “find out whether there is a dual agency transaction.” Ex. 1, Hon. L. Jamieson Hr’g Tr. (Oct. 18, 2018) at 11:20-13:22. 3. Discovery schedule HL recently advised that it intended to seek a “global extension of time,” including of today’s deadline for the substantial completion of document discovery, due solely to Plaintiffs’ requested production of HL’s dual-agent transaction files. Ex. 2, Letter from R. MacGill to J. Vest, Apr. 11, 2022. But the schedule set by the Fourteenth R&R accounted for HL’s purported need to “retrieve, scan and review” “approximately 19,575 paper transaction files” to identify Class members purportedly subject to arbitration. See Ex. 3, Letter from R. MacGill to W. Harrington, Feb. 10, 2022. That work must necessarily be complete by next week’s deadline for HL to produce a list of purported arbitration signatories. See Fourteenth R&R at ¶ 12. Plaintiffs’ requested production of HL’s dual-agent transaction files therefore provides no basis to relax the current schedule. 4. Document production 4.1. Merits document custodians and search terms Plaintiffs seek collection from ten custodians using the same search terms previously approved by the Discovery Referee for the pre-class certification collections from Ms. Dalton and Mr. Arlt (the “Approved Search Terms”). These custodial collections will obviate the need for a systematic collection from HL’s corporate shared drives and InCrowd, eliminating two issues that protracted pre- class certification discovery. 4.1.1. Christopher and Stephen Meyers HL’s interrogatory responses identified Christopher and Stephen Meyers as among the five persons most knowledgeable about its agency and In-House Bonus policies. Ex. 4. HL now cites “prior rulings” to oppose designating them as merits document custodians, but the Discovery Referee merely exempted Christopher and FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 3 Stephen Meyers from pre-class certification discovery. HL asserts that Ms. Dalton and Mr. Arlt are adequate substitute custodians, but that is not the standard for discovery, neither of them were HL’s chief policy-makers, and Christopher and Stephen Meyers were not just former owners and chief executives, but “very hands on in the management of the affairs of Houlihan Lawrence office managers and sales agents.” Ex. 5, Dalton at 37:4-20. Plaintiffs seek collection from Christopher and Stephen Meyers using the Approved Search Terms and four others designed to capture documents relating to HL’s agency disclosure script, market-share growth strategy, and efforts to boost in-house sales. See infra at §§ 5.12 and 5.13. 4.1.2. Geoffrey Berry and Cynthia Landis During pre-class certification discovery, HL designated a single office manager as a general document custodian, Mr. Arlt (Scarsdale). Plaintiffs now seek collection from only two additional managers, Geoffrey Berry (White Plains) and Cynthia Landis (Bronxville), both of whom are sufficiently important that Plaintiffs deposed them during pre-class certification discovery without the benefit of their documents and then relied heavily on their testimony and In-House Bonus e-mails in support of class certification. HL has agreed only to “consider” designating them as custodians while inexplicably objecting to collecting from them using the Approved Search Terms. Ex. 2, Letter from R. MacGill to J. Vest, Apr. 11, 2022. 4.1.3. Leading sales agents HL intends to rely at trial on the testimony of an unspecified number of sales agents to try to demonstrate that it did not act an undisclosed, non-consensual dual agent on a class-wide basis. Ex. 6, Letter from R. MacGill to J. Vest, Mar. 21, 2022. Plaintiffs therefore seek to search the custodial files of six leading sales agents using the Approved Search Terms to assess whether, when, and to what extent they disclosed dual agency and the In-House Bonus to clients. By comparison, HL sought discovery from 200 absent class members before Plaintiffs agreed not to introduce absent class member testimony at trial. 5. HL’s discovery responses HL agreed to produce its dual-agent transaction files but refused to produce a single other responsive document except those that it intends to rely on at trial to prove its own case. See Ex. 7, HL Discovery Responses, April 11, 2022. In addition to ordering HL to collect and produce documents from the custodians identified above, the Discovery Referee should order HL to conduct a reasonably diligent inquiry for the following documents. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 4 5.1. Previously withheld merits documents (Request No. 1) HL insisted on bifurcation of pre-class certification discovery and limited its pre-class certification document production to documents relevant to class certification. HL should therefore be required to produce documents responsive to Plaintiffs’ pre-class certification requests that it previously collected but withheld on the ground that they were not relevant to class certification. 5.2. Ms. Dalton’s weekly executive meeting notes (Request No. 3) HL refuses to search for and produce “piles” of handwritten notes taken by Ms. Dalton during weekly meetings with Christopher and Stephen Meyers, which she destroyed or left in her office when she separated from HL in December 2018— five months after Plaintiffs filed suit. Ex. 5, Dalton at 77:22-80:4. Ms. Dalton’s notes are likely among the best evidence of HL’s corporate priorities and strategy. 5.3. Dual-agent transaction files (Request No. 4) As noted above, HL refuses to produce its dual-agent transactions files in accordance with the schedule set by the Fourteenth R&R. 5.4. “Transaction Detail Sheets” (Request No. 5) A Transaction Detail Sheet (“TDS”) is an electronic record maintained by HL for each transaction in the same database that HL used to generate the Profit Power List. A TDS identifies the parties to the transaction, HL’s gross commission, and the split of that commission with HL sales agents. See, e.g., Ex. 8 and Ex. 9. HL produced a TDS for every Sample Transaction during pre-class certification discovery. Plaintiffs now need the TDS for the remaining dual-agent transactions to identify the commission that each Class member seeks to recover. . 5.5. Sales commission checks (Request No. 6) Plaintiffs seek production of a copy of the sales commission check that HL received in connection with every dual-agent transaction to verify the accuracy of the gross commission reported by HL for each transaction on the TDS. 5.6. In-House Bonus eligibility (Request Nos. 7-9) Plaintiffs’ motion for class certification showed that HL had a duty to disclose its In-House Bonus to every client before seeking their consent to dual agency. See Dkt. 688 at 25-27 and Dkt. 1037 at 8-10. HL countered that it owed disclosure, if at all, only to those clients whose sales agents were eligible to receive an In-House Bonus. See Dkt. 1036 at 11-13. Because the Court did not resolve this issue, FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 5 Plaintiffs seek production of documents sufficient to show, on an annual basis throughout the Class period, the In-House Bonus eligibility of every sales agent. 5.7. In-House Bonus payments (Request No. 10) In the event the Court determines that HL owed a disclosure obligation only to those Class members whose agents received an In-House Bonus, Plaintiffs seek documents sufficient to show any In-House Bonus paid by HL in connection with a dual-agent transaction, which are necessary to identify the members of the potential In-House Bonus sub-Class. According to HL’s Commission Processor, HL “maintains business records” documenting each agent’s commission split and Bonus eligibility that HL can use to identify In-House Bonus payments. Ex. 10. 5.8. Arbitration agreements (Request No. 11) Plaintiffs reserve their rights but expect that HL will satisfy their request for production of any arbitration agreement purportedly signed by a Class member through its production of its dual-agent transaction files. 5.9. Performance reviews and self-evaluations (Request Nos. 12 and 13) Christopher and Stephen Meyers annually evaluated Ms. Dalton and HL’s office managers based on their success in increasing HL’s gross commission income and company market share. See Ex. 11 at 90 (discussing performance metrics); see also Ex. 12, Berry at 132:7-18 (acknowledging undergoing an annual performance evaluation); Ex. 5, Dalton at 23:21-24:14 (same); and Ex. 13, Landis at 21:23-22:25 (same). To facilitate those evaluations, Ms. Dalton and HL’s office managers first prepared written self-evaluations. Ex. 12, Berry at 132:10-134:5 (acknowledging preparation of annual written performance self-evaluations); Dalton at 24:6-14 (same). Plaintiffs seek the self-evaluations and performance reviews to assess the extent to which HL pushed dual agency as a way to achieve its performance goals. See Ex. 12, Berry at 127:5-9, 128:17-129:6. 5.10. Employment agreements (Request No. 14) During pre-class certification discovery, HL produced the employment agreements for two office managers, see, e.g., Ex. 14, which confirm their profit- sharing bonus compensation, but not for Ms. Dalton, Mr. Arlt, or Ms. Landis. 5.11. List of closed transactions (Request No. 16) The Court previously ordered HL to produce the aforementioned MLS List, showing the approximately 10,000 dual-agent transactions brokered by HL during FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 6 the Class period, but HL refuses to produce a list of all of its closed transactions, which would show the share of HL’s business attributable to dual agency. 5.12. Efforts to boost in-house sales (Request Nos. 17 and 18) Plaintiffs’ motion for class certification showed that HL sought to increase its in-house sales as part of its strategic response to the 2008 housing crisis, Dkt. 688 at 12-16, and the Court cited that “orchestrated ‘strategy’ to increase in-house sales” as a basis for granting Plaintiffs’ motion, Dkt. 1072 at 10. Plaintiffs expect that most of the communications responsive to these requests are located in the custodial files of Christopher and Stephen Meyers. 5.13. “Disclosure and Prompt Sheet” (Request No. 19) Plaintiffs’ motion for class certification showed that HL standardized its agency disclosure by giving “agents a ‘Disclosure and Prompt Sheet,’” which Plaintiffs argued was a “script for presenting the Form,” Dkt. 688 at 8, and the Court cited that “script” as a basis for granting Plaintiffs’ motion, Dkt. 1072 at 10. Plaintiffs therefore seek evidence relating to the drafting, corporate approval, and internal dissemination of the script. 5.14. Native-file e-mails (Request No. 20) During pre-class certification discovery, Plaintiffs sought production of 60 e- mails in native file format with associated metadata intact, see Dkt. 575 at 5, Letter from J. Vest to W. Harrington, Jan. 27, 2020, but suspended pursuit of those e- mails to expedite completion of pre-class certification discovery, see Dkt. 577 at 3, n. 1. Plaintiffs require the native-file production to assess the e-mails’ authenticity. 5.15. Plaintiffs’ transaction documents (Request Nos. 21-24) During pre-class certification discovery, Plaintiffs sought production of every e-mail during the relevant period between the sales agents involved in the named Plaintiffs’ transactions, id., but also suspended pursuit of those e-mails to move the case forward. See Dkt. 577 at 3, n. 1. HL collected e-mails relating to the named Plaintiffs’ transactions using only a single search term—the relevant property address. Dkt. 575 at 5-6. HL’s crude search method therefore likely failed to collect the sales agents’ most informal and candid communications. 5.16. Communications with HomeServices (Request No. 24) HL refuses to produce its communications with HomeServices regarding dual agency and its In-House Bonus even though HomeServices audited HL’s corporate policies, agency disclosure forms and transaction files prior to its acquisition of HL FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 7 in January 2017. Ex. 5, Dalton at 191:19-193:14. Plaintiffs expect that most of the responsive communications are located in the custodial files of Christopher and Stephen Meyers. 5.17. HomeServices purchase agreement (Request No. 25) As noted above, the Court recognized that evidence that HL used undisclosed, non-consensual dual agency as part of an “orchestrated ‘strategy’ to increase in- house sales” supported their claim for class-wide relief. Dkt. 1072 at 10. 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. To the extent that HomeServices has a right to recoup some or all of what it paid Christopher and Stephen Meyers if Plaintiffs are successful, the purchase agreement bears on their interest and bias as well. 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.” Trussell- Slutsky v. Mcilmurray, 184 A.D.3d 891, 893 (2d Dep’t 2020). 5.18. Ethical or disciplinary complaints (Request No. 26) The Fourth R&R directed HL to “produce documents sufficient to show any disciplinary action (including withheld commission checks) taken by HLI against any office managers or sales agents in the Scarsdale, Bronxville and White Plains office for failure to comply with agency disclosure obligations regarding dual agency by May 18, 2020.” Dkt. 574 at 16. Plaintiffs now seek documents sufficient to show any lawsuits or disciplinary actions filed against HL or its sales agents. 5.19. Insurance agreements (Request No. 28) New York law permits discovery of the “existence and contents of any insurance agreement” available to HL to satisfy any judgment that Plaintiffs may obtain. CPLR 3101(f). Disclosure of all primary and excess policies is required to “facilitate and encourage settlement.” CPLR 3101(f) & Practice Commentary. HL directed Plaintiffs to the action filed by an insurer against HL seeking a declaration of non-coverage, but Plaintiffs are entitled to know whether HL has any other potential coverage. 5.20. Separation agreements (Request No. 29) HL produced its separation agreement with the former Irvington office manager, Brian Levine, see Ex. 15, but not with Christopher Meyers, Ms. Dalton, Mr. Gricar, and Mr. Arlt, all of whom are expected to testify at trial and have FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington April 20, 2022 Page 8 separated from HL. Any cooperation agreement between them and HL is relevant to their credibility. 5.21. Corporate profits (Request Nos. 30 and 31) As noted above, the millions, if not tens of millions, that HL and Christopher and Stephen Meyers reaped from HL’s undisclosed, non-consensual dual agency, whether through the sale of HL to HomeServices or in annual compensation or profit distributions, bears on their motive to illicitly boost in-house sales and Plaintiffs’ request for punitive damages. * * * The foregoing (as well as Plaintiffs’ forthcoming response to the issues that HL seeks to raise on Friday) demonstrate that HL’s litigation strategy is to proliferate discovery disputes based on the cynical calculation that it can win by losing simply by putting off trial another day. Plaintiffs request immediate issuance of the Fifteenth R&R to ensure completion of discovery by the end of the year as contemplated by the Fourteenth R&R. Regards, Jeremy Vest FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 Jeremy C. Vest Chrysler Center 212 692 6718 666 Third Avenue jvest@mintz.com New York, NY 10017 212 935 3000 mintz.com May 6, 2022 Via E-Mail Mr. William P. Harrington Bleakley Platt & Schmidt, LLP One North Lexington Avenue White Plains, NY 10601 Re: Goldstein et al. v. Houlihan/Lawrence Inc., No. 60767/2018 (N.Y. Sup. Ct., Westchester Cty.) Dear Mr. Harrington: I write in reply to Houlihan Lawrence’s May 2, 2022 letter following up on issues raised during the parties’ April 22, 2022 discovery conference. Plaintiffs request the Discovery Referee’s immediate attention to the issue addressed below in § B.3 and a report and recommendation resolving all other issues as soon as possible thereafter. A. Scheduling 1. Close of discovery deadline The Discovery Referee has emphasized during unrecorded conferences that the parties must complete fact and expert discovery by the end of the year. HL has not gotten the message. The forthcoming report and recommendation should memorialize the December 31, 2022 discovery cutoff. 2. Transaction file production deadline Anything more than a modest extension of the April 29 deadline for HL to produce its transaction files rewards HL’s sharp practice. The Discovery Referee set that deadline only after several rounds of written submissions and hearing oral argument from the parties on February 11, February 18 and March 1. HL did not object to the Court’s confirmation of the Fourteenth Report and Recommendation (“14th R&R”), see Dkt Nos. 1085-1088, and nothing has changed in the six weeks since then to justify its non-compliance. BOSTON LONDON LOS ANGELES NEW YORK SAN DIEGO SAN FRANCISCO WASHINGTON MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington May 6, 2022 Page 2 HL submits (2) an affidavit from Consilio to justify its reargument, but the Discovery Referee heard from Consilio before entering the 14th R&R. See Ex. 1, R. MacGill to W. Harrington, Feb. 10, 2022 at Ex. 5. HL says (2) August 12 is the best that it can do, but as recently as February 22, HL pledged to identify arbitration signatories by June 14 and to move to compel arbitration by June 21. Ex. 2, HL’s February 22, 2022 Proposed CMP at ¶¶ 12-13. HL is to blame if it must now struggle to meet its own June 14 deadline. HL inexcusably waited to retrieve its files until “[a]fter the Fourteenth Report and Recommendation was published in March”. Ex. 3, R. MacGill to W. Harrington, Apr. 20, 2022 at 2. Had HL acted after the Court granted certification on January 25, even accepting its self-serving 16-22 week review schedule, HL would have completed its production as early as May 17 and no later than June 28. Make no mistake: HL is trying to hold class notice hostage. It will argue that the Court must identify and exclude arbitration signatories before class notice. The Discovery Referee should not extend HL’s deadline to produce its transaction files and to move to compel arbitration past HL’s own previous June 14 and June 21 deadlines. Further, the Discovery Referee should direct HL to produce the first half of its transaction files by May 17, sixteen weeks from the date of the Court’s January 25 certification order. 3. Other document production deadlines HL tries to slip in its conclusory and unsupported footnote request (4, n. 7) to further modify the 14th R&R to extend its April 20 deadline to complete its production of all other documents to August 12 or “45 days after [any] dispute is resolved, whichever is later.” Compare 14th R&R 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.”). HL’s proposed schedule makes it easy for HL to push document discovery well past Labor Day by manufacturing another dispute. Plaintiffs served their document requests nearly two months ago, so HL has already had nearly twice the time afforded by CPLR § 3120 to turn over its responsive documents. The Discovery Referee therefore should give HL no more than 21 days to complete its production following the Court’s confirmation of the forthcoming report and recommendation. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington May 6, 2022 Page 3 B. Class notice 1. Jurisdiction During the parties’ April 28 meet and confer, Plaintiffs offered to consent to the Discovery Referee hearing Plaintiffs’ motion for approval of their class notice plan if in return HL agreed to forego Court review of the Discovery Referee’s decision. HL’s on-the-spot refusal shows that its goal is a slow-moving two-step approval process that will delay class notice. HL encourages (4) the Discovery Referee to rely on the 14th R&R to assert authority to approve the forms and methods of class notice. However, on its face the 14th R&R authorizes the Discovery Referee only “to resolve outstanding issues regarding class notification discovery,” 14th R&R at ¶ 18 (emphasis added), like HL’s potentially deficient purported Class member list, see infra at § B.3. The Court’s past delegation of certain sealing and scheduling issues to the Discovery Referee (4) shows only that it may refer specific issues outside of its May 2019 Order of Reference—not that it has done so with respect to substantive class notice issues. HL’s alternate request (5) that the Discovery Referee recommend delegation of class notice “pursuant to CPLR § 4212” implicitly concedes the issue. Nothing in the Order of Reference recognizes “some exceptional condition” justifying the Court’s referral of substantive issues to the “discovery master,” as HL apparently recognizes CPLR § 4212 would have required. See Dkt. 547 at 1 (appointing a “discovery master” to “hear and report on all issues of discovery”). Resolving discovery disputes and otherwise managing this case to ready it for trial by the end of the year promises to keep the Discovery Referee busy. The Court can and should handle class notice. 2. Filing deadline As Plaintiffs previously advised, the parties have agreed that Plaintiffs will move for approval of their class notice plan within seven days of your resolution of the jurisdictional issue. Ex. 4, J. Vest to W. Harrington, Apr. 29, 2022. For good order, the report and recommendation should reflect this change. FILED: WESTCHESTER COUNTY CLERK 07/20/2022 03:57 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1444 RECEIVED NYSCEF: 07/20/2022 MINTZ Mr. William P. Harrington May 6, 2022 Page 4 3. Class member list HL’s assertion (9) that “Plaintiffs appear to have withdrawn their complaints about the Class Member List” exemplifies its refusal to participate in discovery in good faith. As Plaintiffs have previously explained, Plaintiffs are troubled by the still unaccounted-for absence of more than 1,000 transactions from the purported Class member list that were on the MLS List that HL told the Court showed its dual- agent transactions during the Class period. See Ex. 5, J. Vest to W. Harrington, Apr. 20 at 2. At the April 22 conference, Plaintiffs naively gave HL the benefit of the doubt, agreeing to defer consideration of the Class member list after HL promised to provide a detailed written explanation for the missing transactions. HL now reneges on that commitment either because it does not have an adequate explanation or to keep the issue alive to create another obstacle to class notice. HL’s prior agreement means that resolution of this issue need and should not await issuance of a report and recommendation. The Discovery Referee should immediately email HL to direct it to produce within three days a spreadsheet identifying by property address every transaction on the MLS List that it omitted from the Profit Power List and a short, plain statement for each omitted transaction explaining why HL considers it to be outside of the Class. Plaintiffs and the Court cannot fulfill their obligation to ensure that HL has identified all Class members without this information. C. Absent class member depositions At the April 22 conference, the Discovery Referee recognized that Plaintiffs’ proposal should resolve this issue: Plaintiffs agreed (a) not to call absent class members in their case-in-chief; and (b) in rebuttal only in the unlikely event any of the 100 or more sales agents who HL said it intends to call in its defense purport to recall individual conversations. See Dkt. 1037 at 4 (Plaintiffs’ discussing Bello’s inability to recall details of his disclosure in nearly a dozen dual-agent transactions). HL instead presses ahead because its goal is not a fair trial but delay and re-litigation of class certification. The Discovery Referee should deny its request for absent class member depositions, without yet more oral argument (1). 1. Standard There appear to be only two New York cases discussing absent class member discovery, Pludeman v. Northern Leasing Sys., Inc., 2013 N.Y. Misc. LEXIS 4309 (N.Y. Cnty. 2013) and Murray v. Allied Signal, Inc., 177 A.D.2d 984 (4th Dep’t FILED: W