Firefighters’ Ret. Sys. v. Citco Grp. Ltd., No. 13-373-SDD-EWD (M.D. La. Jan. 3, 2018).

In this case regarding a $100 million investment loss from a variety of municipal retirement accounts, the court reconsidered the plaintiffs’ motion to compel. Specifically, the plaintiffs wanted the defendants to “email everyone in every Citco entity to ask whether anyone … has knowledge relevant to this litigation.” After a proportionality analysis, the court denied the motion as “simply unreasonable.”

The case arose from the defendants’ purchase of 100,000 shares in what turned out to be an illiquid investment. The plaintiffs sued Citco and other defendants (collectively “Citco”), alleging claims including unjust enrichment and breach of contract.

During the previous motion to compel, Citco pointed out that it had already made “substantial discovery efforts” in the case. Citco argued that the plaintiffs’ request was “incompatible with the proportionality requirement” of Federal Rule of Civil Procedure 26(b).

The court denied the previous motion to compel without prejudice. In doing so, it ordered a Rule 30(b)(6) deposition to determine “the method by which Citco [had] responded” to discovery requests thus far.

In that deposition, Citco’s general counsel stated that Citco had previously searched its archives, physical files, and shared drives using 56 agreed search terms and 21 named custodians. The plaintiffs countered that those searches were “flawed” because Citco’s earlier responses to interrogatories had been “incomplete and inaccurate.” The plaintiffs demanded that Citco email “everyone in the Citco organization [to] ask them limited questions about their personal knowledge” of the facts. Citco objected that it had already performed the requested searches and that further searches would be disproportionate.

The court began by reviewing the scope of discovery under Rule 26(b)(1). It noted that “any information sought that is not relevant to a party’s claim or defense is not discoverable, regardless of proportionality.” Additionally, the court pointed out its obligation to limit “unreasonably cumulative or duplicative” discovery.

Reviewing the parties’ correspondence, the court observed that they had mutually selected the 56 search terms and 21 document custodians that Citco used in its searches. Nor had the plaintiffs explained “why the custodians and search terms used were unreasonable.” Citco had indicated its willingness to add search terms and custodians “if [the] plaintiffs identify any,” yet the plaintiffs had not.

The court concluded that the plaintiffs’ request to email every Citco employee was “simply unreasonable” and would effectively return the parties to “square one” of discovery. Such a deterioration, it held, would be “unduly burdensome,” particularly given the plaintiffs’ “failure to identify or explain the necessity” of additional terms or custodians.

In closing, the court ruled that the plaintiffs had not “established that the searches conducted so far were unreasonable”; rather, the court’s review revealed Citco’s discovery efforts to be appropriate. Therefore, the court denied the motion.

Takeaways on Supporting Your Argument

If you are certain that your opponent is hiding something, you must provide evidentiary support for that claim. Here, the plaintiffs made bare assertions that Citco’s responses were “incomplete and inaccurate” yet utterly failed to explain why. Search for any discrepancy in the data or statements that you have received and bring those inconsistencies to the court’s attention.

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