1ST Class Legal (I.S.), Ltd. v. Niro, et al.

Northern District of Illinois, ilnd-1:2016-cv-06793

ORDER signed by the Honorable Sheila M. Finnegan on 3/20/2017. Mailed notice

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Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 1 of 7 PageID #:586 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION 1ST CLASS LEGAL (IS), LTD.,) A foreign corporation,)) Plaintiff,) No. 16 C 6793) v.) Judge Robert M. Dow) NIRO LAW, LTD.,) Magistrate Judge Finnegan an Illinois corporation, et al.,)) Defendants.) ORDER The Court has considered the parties' respective submissions and heard oral argument during a hearing on March 16, 2017, regarding the motion of Defendant Niro Law, Ltd. ("Niro") for entry of a protective order (Doc. 28), Niro's motion to compel the production of documents (Doc. 18), and the motion of Plaintiff 1st Class Legal (IS), Ltd. ("1CL") to compel the production of documents (Doc. 40). The Court rules on the issues addressed in these submissions as follows: 1. Defendant Niro's motion for entry of a protective order (Doc. 28) is granted on the following terms: a. Niro's request for entry of a protective order in the form of the Northern District's model order with a modification to the definition of confidential information in paragraph 2 to include information "that is subject to a privilege or contractual or common-law requirement of confidentiality" is granted. A Confidentiality Order incorporating that modified definition in paragraph 2 is entered separately. b. Plaintiff 1CL's request for a modification of the process for challenging a confidentiality designation set out in paragraph 9 of the model order is granted in part. Paragraph 9(b) of the Confidentiality Order shall provide as follows: "A party that elects to challenge a confidentiality designation may file and serve a motion that identifies the challenged material. Each such motion must be accompanied by a competent declaration that affirms that the Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 2 of 7 PageID #:587 movant has complied with the meet and confer requirements of this procedure. After a motion is filed, the designating party shall file within 21 days a response setting forth the reasons for the designation, and the moving party shall file any reply to the response within 14 days. The burden of persuasion in any such challenge proceeding shall be on the designating party. Until the Court rules on the challenge, all parties shall continue to treat the materials as Confidential Information under the terms of this Order." 2. Defendant Niro's motion to compel the production of documents in response to request Nos. 9-11 of Niro's First Set of Requests for the Production of Documents (Doc. 18) is denied for the following reasons: a. Request Nos. 9 and 11: Niro reports that the parties have resolved their dispute regarding Request Nos. 9 and 11, and the motion is therefore denied as moot as to those requests. b. Request No. 10: Request No. 10 seeks documents "pertaining to the Lender's transactions in 'obtaining' funds for the Master Loan Agreement as alleged in Paragraph 10 of the complaint." Niro argues that such documents are relevant because 1CL "may seek to recover" its costs of funding as damages. (Doc. 18, at 6). 1CL represented in its response to the motion that it will not seek to recover its costs of obtaining funding as damages, that it will clarify that position in an amended complaint, and that it will not assert as a defense to Niro's counterclaim that it was unable to procure funding. (Doc. 45, at 5-6 and nn. 2-3). 1CL further stated at the hearing, however, that the amended complaint it plans to file will seek additional damages under a potentially new theory. Niro's motion to compel is therefore denied as to Request No. 10 without prejudice to being reasserted after Plaintiff 1CL files an amended complaint placing such documents in issue or in the event that such documents are otherwise placed in issue in the litigation. c. Plaintiffs' Request for Costs: Plaintiff 1CL seeks costs incurred in connection with responding to the portion of Niro's motion to compel that was mooted by Plaintiff's supplemental discovery responses served on February 24, 2017 (Doc. 45-1, at 26-31) after Niro filed the motion on January 9, 2017. (Doc. 18). Given the fact that Niro was put to the cost of a motion to compel before receiving supplemental discovery responses from Plaintiff that partly mooted the motion to compel, the brevity of Plaintiff's response to that portion of the motion (3 1/2 pages), the explanation of Niro's counsel that he was on trial the week after receiving Plaintiff's supplemental responses and therefore unable to file a supplemental motion in response to them, and the fact that the remaining dispute raised by Niro's motion to compel (Request No. 10) cannot be fully resolved at the present time due to Plaintiff's stated intention to file an amended complaint that includes a new damages theory, Plaintiff's request for costs is denied. 2 Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 3 of 7 PageID #:588 3. Plaintiff 1CL's motion to compel the production of documents in response to its First and Second Sets of Requests for the Production of Documents (Doc. 40) is granted in part and denied in part as follows: a. General Objections: Plaintiff 1CL's request that Niro incorporate its general objections into its specific responses to 1CL's document requests is granted. Niro is directed serve 1CL with supplemental written responses that incorporate any general objection(s) into each specific response to 1CL's documents requests, to the extent such general objection(s) are asserted in response to each document request. b. Duplication and Redundancy Objections: Although the Court is troubled by the duplication and redundancy of Plaintiff's document requests, and directs the parties to refrain from such duplication in the future, in the interest of advancing discovery, Defendant Niro's objections to such duplication and redundancy (Doc. 47) are overruled. c. Request Nos. 17-22, 48-50, 71-72, and 77: Request Nos. 17-22 seek all documents "referring or relating" to "borrower's costs" and "borrower's client costs and disbursements," and Request Nos. 48-50, 71-72, and 77 seek all documents "referring or relating" to utilization of the loan funds.1 Defendant Niro's general refusal to produce any documents in response to Request Nos. 17-22, 48-50, and 77 are overruled. Plaintiff's request to compel the production of all documents "referring or relating" to the foregoing topics is denied, however, due to overbreadth. In its response to Plaintiff's motion and during the hearing, Niro represented that it will produce certain "billing records and documents identifying client costs" in response to Request Nos. 71-72, which would also be responsive to the foregoing requests, promptly after the Confidentiality Order is entered. Accordingly, in the supplemental written responses required by this Order, Niro shall identify the documents that will be or have been produced in response to each of the foregoing requests (Nos. 17-22, 48-50, 71-72, and 77) and identify any categories of documents responsive to these requests that are being withheld. Plaintiff's request to compel the production of additional documents in response to these requests is denied without prejudice to serving more targeted requests for similar information after reviewing Niro's supplemental written responses and initial document production, and completing the required meet and confer process with respect to such narrowed requests. 1 Plaintiff's motion to compel included Requests Nos. 23-25 in the category of disputed requests seeking documents relating to borrower's costs and borrower's client's costs and disbursements. (Doc. 40, at 8). But those requests instead seek documents that Niro contends it provided to 1CL that refer to the underlying litigations. (Doc. 40-2). And Niro represented in its discovery responses, its response to Plaintiff's motion, and at the hearing that it will produce such documents. (See id.; Doc. 47, at 7; infra part (e)). Plaintiff's motion as to these requests (Doc. 40, at 8) is therefore denied. 3 Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 4 of 7 PageID #:589 d. Request Nos. 42-44 and 70: Request Nos. 42-44 seek "all documents which you contend satisfies all of the conditions precedent set forth in the paragraphs 17-20 of the Master Loan Agreement" (Doc. 40-2) and Request No. 70 seeks "all documents which support said contention" "if you contend that Borrower was not required to satisfy any of the conditions precedent set forth in Paragraphs 17 through 20." (Doc. 40-4). Defendant Niro's general refusal to produce any documents in response to these requests is overruled. In its response to Plaintiff's motion to compel and during the hearing, Niro represented that it will produce its communications with 1CL and Niro's retainer agreements with its clients in response to Request Nos. 1 and 32- 35, which are also responsive to these requests, promptly after the Confidentiality Order is entered. Accordingly, in the supplemental written responses required by this Order, Niro shall identify the documents that will be or have been produced in response to each of Request Nos. 42-44 and 70 and identify any categories of documents responsive to these requests that are being withheld. Plaintiff's request to compel the production of additional documents in response to these requests is denied without prejudice to serving more targeted requests seeking any documents referenced in (as opposed to contentions regarding) the foregoing paragraphs of the Master Loan Agreement after reviewing Niro's supplemental written responses and initial document production, and completing the required meet and confer process with respect to such narrowed requests.2 e. Request Nos. 45-47, 51-53, 26-31, and 83: Request Nos. 45-47 seek all documents referring or relating to the underlying proceedings at issue in this action, Request Nos. 51-53 seek all documents referring or relating to claim proceeds received pursuant to those underlying proceedings, Request Nos. 26-28 seek all documents referring or related to any settlement or judgment in those underlying proceedings, Request Nos. 29-31 seek all documents referencing any legal fees or costs recovered or paid in those underlying proceedings, and Request No. 83 seeks all documents referring or relating to payments made by Borrower to Lender. Niro's general refusal to produce any documents in response to Request Nos. 45-47 and 51-53 is overruled.3 Plaintiff's request to compel the production of "all documents referring or 2 In so ruling, the Court does not imply that each of paragraphs 17-20 of the Master Loan Agreement attached to Plaintiff's motion references any documents. Contrary to Plaintiff's assertion at the hearing, while paragraphs 17 and 18 of that Agreement refer to a "written statement," paragraphs 19 and 20 do not, nor do they refer to any particular type of document. (Doc. 40-7, at 7). 3 Niro's response to Plaintiff's motion to compel construes Request Nos. 45-47 as referring or relating to "each proceeding or litigation involving each of the Niro Law clients covered by a CSLA." (Doc. 47, at 6). The Court, however, understands these requests as limited to the underlying proceedings at issue, e.g. No. 45: "each proceeding or litigation involving Cascades and related to the Cascades CSLA." (Doc. 40-2, emphasis added). 4 Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 5 of 7 PageID #:590 relating to" the underlying proceedings is denied, however, due to overbreadth. In its response to Plaintiff's motion and at the hearing, Niro represented that it will produce various documents in response to other requests, which are also responsive to these requests, after the Confidentiality Order is entered. (Doc. 47, at 7, agreeing to produce complaints filed, judgments, documents to show settlement payments and fees or costs recovered, and documents provided to 1CL listing the cases under each funding agreement, referring to or regarding those cases, containing relevant facts about those cases, and informing 1CL of material developments in those cases and matters that might affect the outcome of those cases). Accordingly, in the supplemental written responses required by this Order, Niro shall identify the documents that will be or have been produced in response to each of the foregoing requests (Nos. 45-47, 51-53, 26-31, and 83) and identify any categories of documents responsive to these requests that are being withheld. Plaintiff's request to compel the production of additional documents in response to these requests is denied without prejudice to serving more targeted requests for similar information after reviewing Niro's supplemental written responses and initial document production, and completing the required meet and confer process with respect to such narrowed requests. f. Request Nos. 73-74 and 82: Request No. 73 seeks all documents referring or relating to any loan applications from anyone other than 1CL during 2013- 2016, Request No. 74 seeks all Niro financial statements for the same years, and Request No. 82 seeks all documents referring or relating to any application for litigation funding with any lender other than 1CL. Plaintiff contends that these requests relate to mitigation of damages, but the Court concludes that only Request No. 82 would relate to mitigation of damages, and only if limited to loan applications for the underlying proceedings at issue in this action. The court understands that Niro does not object to producing such documents and will include any such documents in its production. Accordingly, Plaintiff's motion to compel is granted as to Request No. 82 as so limited and denied as to Request Nos. 73 and 74. In the supplemental written responses required by this Order, Niro shall identify the documents that will be or have been produced in response to Request No. 82 as so limited and identify any categories of documents responsive to that limited request that are being withheld. g. Request Nos. 12-13: These Requests seek all communications between Niro and Ron Hofer (No. 12) and Richard Gilbert (No. 13) referring or relating to ICL. Plaintiff's motion to compel is denied as to these requests without prejudice to serving more targeted requests seeking communications between Niro and these individuals after reviewing Niro's supplemental written responses and initial document production, and to the extent Plaintiff is able to demonstrate the relevance of such communications. 5 Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 6 of 7 PageID #:591 h. Request Nos. 1-4, 8-10, 12-15, 32-41, 54-59, 61-63, 75-76, and 84-86: Plaintiff challenges as insufficient Niro's commitment in its responses to these requests to "undertake to identify and produce any responsive documents that are located in places known to or reasonably believed by Niro Law to contain such documents." (Doc. 40, at 13). Niro is directed to certify in the supplemental written response required by this Order that it has made a reasonable search for responsive documents in the places known to or reasonably believed to contain responsive documents and produced all responsive documents that it located, regardless of where they were located. i. Requests for Costs: Both sides' requests for costs in connection with Niro's motion to compel (Doc. 18, at 8; Doc. 45, at 8) are denied. 4. Niro shall make its initial production of documents in response to 1CL's First and Second Sets of Requests for the Production of Documents within ten (10) days of the entry of this Order. Niro shall serve the supplemental written responses to those requests required by this Order within seven (7) days after making the foregoing initial production. Niro shall serve a privilege log corresponding to its initial production also within seven (7) days after that production is made. 5. After Plaintiff 1CL has reviewed Niro's initial document production and supplemental written responses (and not before), the parties are directed to meet and confer regarding any additional categories of documents that Plaintiff seeks. In that meet and confer process, 1CL shall provide Niro with a written list of the specific categories of documents that Plaintiff seeks, and Niro shall provide 1CL with a written response indicating whether it has such documents and will produce them. 6. To the extent the parties are unable to reach agreement with respect to any additional categories of documents that Plaintiff seeks, Plaintiff may file a new motion to compel the production of such documents. The Court admonishes both sides, however, that unreasonably overbroad and overlapping document requests such as those set out in Plaintiffs' First and Second Sets of Document Requests will not be enforced, and 6 Case: 1:16-cv-06793 Document #: 51 Filed: 03/20/17 Page 7 of 7 PageID #:592 general refusals to produce any documents in response to discovery requests such as those in Niro's discovery responses will be overruled. Both sides are directed to serve reasonable requests directed toward the issues in this case and reasonable responses identifying the documents and information they will produce and any categories of documents or information withheld. ENTER: Dated: March 20, 2017 _____________________________ United States Magistrate Judge 7