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

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

RESPONSE by 1st Class Legal (I.S.), Ltd. in Opposition to MOTION by Defendant Niro Law, Ltd., Counter Claimant Niro Law, Ltd. to compel {{18}}

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Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 1 of 9 PageID #:462 MARC S. MAZER WEILL & MAZER, A Professional Corporation 90 New Montgomery Street Suite 1400 San Francisco, CA 94105 Telephone: (415) 421-0730 STEVE VARHOLA LYMAN LAW FIRM, LLC 227 West Monroe Street, Suite 2650 Chicago, Illinois 60606 Attorneys for Plaintiff and Counter-Defendant 1st CLASS LEGAL (I.S.), LTD. UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION 1st CLASS LEGAL (I.S.), LTD., a foreign) Case No.: 16-cv-6793 corporation,)) Plaintiffs,)) Honorable Robert. M. Dow, Jr. v.)) RAYMOND NIRO, individually and doing) Honorable Magistrate Judge Sheila M. business as NIRO, HALLER & NIRO, an) Illinois Law Partnership, NIRO LAW, LTD.,) Finnegan an Illinois Corporation, formerly known as) NIRO, HALLER & NIRO, LTD.,)) Defendants.)) and related Counter claim)) PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. I. THE MOTION TO COMPEL IS MOOT DUE TO THE AMENDED RESPONSES TO THE REQUESTS IN ISSUE. On January 9, Defendant NIRO LAW, LTD. ("Niro") filed the present Motion to Compel regarding Plaintiff's 1st CLASS LEGAL (I.S.), LTD. ("1CL") initial responses to three Requests for Production of Documents, Nos. 9, 10, and 11. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 1 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 2 of 9 PageID #:463 Niro served various sets of discovery on 1CL including a set of interrogatories, two sets of requests for admission, and a set of requests for documents. 1CL timely responded to all of the discovery requests and produced well over 5,000 documents by early December, 2016.1 Niro's subject motion pertains to just 3 of the many discovery requests made by it. On January 11, 2017, 1CL filed a preliminary response to this Motion (Doc. No. 20) disputing the certification of the parties' attempts to informally resolve issues and noting that it considered the motion premature because the meet and confer efforts had not been completed. 1CL requests this Court to take judicial notice of the preliminary response, a copy of which is attached as Exhibit A. Just prior to filing this motion and during a conference call, Niro's counsel was informed that the responsible officer of 1CL was seriously ill and in the hospital and, for that reason, a decision as to whether further responses would be served could not yet be made. Subsequently on February 2, 2017, and after consultation with Mr. Gordon (1CL's CEO), 1CL served a First Amended Response to the First Set of Requests for Production, amending all three of the responses at issue. (See, First Amended Response attached as Exhibit B) On February 8, counsel for Niro sent a letter noting certain perceived issues and requested rectification. (See, Counsel for Niro's letter attached as Exhibit C) After further communication, on February 10, counsel for Niro emailed that if the responses to requests 9 and 11 were amended to correspond to the requests in the February 8 letter, Niro's concerns would be satisfied. (See, Counsel for Niro's email attached as Exhibit E) 1 1CL served two sets of requests for documents on Niro in October, 2016 and said Defendant delayed production of its documents and has yet to produce all of its documents (which is the subject of the pending 1CL's Motion to Compel). PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 2 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 3 of 9 PageID #:464 On February 24, 1CL served a Second Amended Response, addressing the concerns in the February 8 and 10 communications. (See, Second Amended Response attached as Exhibit D) The service was accompanied by an email requesting that Niro's counsel inform 1CL if any issues remained by March 2. (See, Counsel for 1CL's email attached as Exhibit F) No response to this email was received. Niro has not amended its motion to acknowledge or address the amended responses, despite the Court providing it with an opportunity to file further briefing pursuant to its January 19, Minute Order. The service of the amended responses has rendered the original motion moot. See, Carolina Cas. Ins. Co. v. Oahu Air Conditioning Serv., Inc., No. 2:13-CV-01378-WBS-AC, 2014 WL 4661979, at *4 (E.D. Cal. Sept. 17, 2014), order clarified on reconsideration, No. 2:13-CV-01378-WBS-AC, 2014 WL 7157657 (E.D. Cal. Dec. 15, 2014) (service of amended discovery responses rendered motion to compel moot); Hamilton v. Prudential Ins. Co. of Am., No. CIV S070944MCE DAD, 2008 WL 228223, at *1 (E.D. Cal. Jan. 28, 2008) (same); Rattler Tools, Inc. v. Bilco Tolls, Inc., No. CIV.A. 05-0293, 2007 WL 914176, at *2 (E.D. La. Mar. 22, 2007) (agreement to provide further response at hearing rendered pending discovery motion moot); Leonard's Linen Serv. v. City of Bloomington, No. 106-CV-00021-JDT-WTL, 2007 WL 2902210, at *1 (S.D. Ind. June 21, 2007) (production of documents rendered motion to compel production moot). The issues raised by Niro's motion are no longer pending; that motion addresses an outdated version of the responses. For reasons not quite understood, Niro has not informed the Court of this new development. It is entirely wasteful of this Court's time, and the time and expense of 1CL, to consider a response that has been amended and is no longer the operative document. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 3 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 4 of 9 PageID #:465 For this reason alone, the Court should deny the motion and need not consider the individual items. However, in the event the Court does wish to consider the sufficiency of the Second Amended Responses, the amended responses are discussed further below. II. NIRO'S MOTION TO COMPEL AS TO THE INDIVIDUAL REQUESTS IS WITHOUT MERIT. Although the preceding argument is sufficient for this Court to deny the motion, 1CL submits the following discussion of the individual requests in the event the Court chooses to consider them. A. Request 9: Documents related to acquisition of after the event insurance. First, as noted above, 1CL's Second Amended Response fully addresses all of Niro's concerns in the motion. Therefore, the issue is moot. Second, 1CL has produced the documents showing the insurance policy and the amount paid for the insurance. No claims have been made on the policy, and therefore there are no documents to produce regarding such claims. Third, any issues pertaining to the after the event insurance, other than its existence, are tangential. The reference to this insurance in the Complaint was merely to illuminate the reason why the disclosure of Relevant Facts was of importance to 1CL in the underlying Master Loan Agreement ("MLA"). But the issue of whether Niro is in breach of its obligations under the MLA in no way depends on the insurance or claims made thereunder. But the overriding point about Request 9 is: 1CL has responded in accordance with law and the meet and confer communications. This item should not be before the Court, and Niro should have notified the Court that consideration of this item is unnecessary. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 4 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 5 of 9 PageID #:466 B. Request 10: Lender's transactions in obtaining funds for MLA. First, as noted above, Niro's motion is moot due to 1CL's amended response to the Request. Second, as phrased, the Request seeks entirely irrelevant information. The source of the funds loaned has no bearing on the issues here. Consider an action brought by a bank for breach of a business loan. The source of the bank's funds is irrelevant. The funds might derive from multiple depositors, investments from stockholders, investment income, interest, and other sources. If the defendant borrower asked for all documents pertaining to the bank's acquisition of funds used for the loans, the request would be unduly burdensome and have absolutely nothing to do with any issue of relevance to the action.2 Significantly, 1CL does not allege that it is in any manner excused from funding the subject loans if it had a legal obligation to do so. Instead, 1CL claims that Niro breached the subject agreement by, among other things, failing to provide 1CL with all relevant facts and breaching warranties in the agreement----none of which has any bearing or relevance to the source of the money used to loan funds to Niro.3 Furthermore, the scope of this request is so broad that it could be seeking private financial information protected from disclosure under the laws of the United States, such as tax return information, or by the Data Protection Act of 1998 (U.K.). 1CL contends that the information and documents requested constitute personal data under the UK's Data Protection Act 1998 (the "DPA"). There are strict statutory controls on how 1CL, as data controller, can 2 In Niro's motion, Niro speculates that 1CL might seek to recover the costs of obtaining funds as damages. This argument is without merit. 1CL does not make this claim, and intends to seek leave to file an amended Complaint to clarify this and other issues. 3 Niro may claim that 1CL was having trouble getting the funds necessary to fund a portion of the loan. However, that too is not relevant since if 1CL was not legally obligated to fund the loan, the issue of its ability to do so becomes moot. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 5 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 6 of 9 PageID #:467 treat and handle that personal data. The breach of those controls can lead to criminal prosecution as well as civil claims for damages. (See, DPA, section 21) Section 35 of the DPA permits disclosure of personal data where there is a Court order requiring disclosure of that information (See, DPA, section 35(1)). It is also permissible to disclose personal data where "necessary" for legal proceedings (section 35(2)).4 Niro may claim that 1CL asserted in emails that funding the loans was being held up due to "investors" not willing to loan the money to 1CL, so that it could in turn loan the money to Niro. However, since the law in England prohibits such disclosure unless it is necessary for the litigation and since this is purely a side issue which is not being asserted as a basis for any claims in this action, the discovery should not be allowed. 1CL does not assert, as a defense to Niro's Counterclaim, that it was unable to fund the loan but, rather, it was not legally obligated to fund the loan (regardless of whether it had sufficient funds to do so). Here, Niro has not made any sort of showing that disclosure is necessary, and this Court should decline to order such intrusion on the statutory privacy rights at stake herein. Niro had an opportunity to address this issue in its briefing and did not do so. Also, this entire issue may prove moot if the pending Motion for Summary Judgment is granted with respect to Niro's Counterclaim. C. Request 11: Suits filed against Lender or its principals. First, as noted above, 1CL's Second Amended Response fully addresses all of Niro's concerns in the motion. Therefore, the issue is moot. 4 The full text of the DPA can be found at http://www.legislation.gov.uk/ukpga/1998/29/contents and the relevant sections cited herein are attached hereto. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 6 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 7 of 9 PageID #:468 Second, as noted in the Second Amended Response, 1CL is not aware of any such lawsuits, actual or threatened. Therefore, it is unaware of any responsive documents. 1CL cannot be compelled to produce something that does not exist.5 Accordingly, there is no valid basis for any order to compel further response from 1CL on Request 11. III. NO ATTORNEY'S FEES SHOULD BE AWARDED TO NIRO; TO THE CONTRARY, FEES SHOULD BE AWARDED TO 1CL FOR HAVING TO RESPOND TO A MOTION RENDERED MOOT BY SUBSEQUENT RESPONSES. In the Conclusion to its motion, Niro requests that 1CL or its counsel be required to pay expenses incurred in making the motion, including attorney's fees, pursuant to Rule 37(a)(5)(A). Niro offers no argument or authority other than the bare citation of the Rule for its claim. Niro fails to note the following portion of the Rule: But the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust. Here, all three subdivisions apply. As noted in 1CL's preliminary response, this motion was premature, and the meet and confer discussions had not been completed. This is further substantiated by the history of post-filing communications on the issues between the parties, which served to resolve the points in contention and led to the subsequent amended responses. Furthermore, the initial responses were substantially justified. The requests were broad and vague, and implicated privacy and other legitimate concerns. 5 Although at this point, 1CL is unaware of the existence of any such documents, in light of the ongoing nature of the duty to disclose, it reserves the right to assert United States and U.K. rights of financial privacy in the event any responsive documents are later discovered. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 7 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 8 of 9 PageID #:469 Finally, it should be noted that 1CL's ability to communicate with its client during the meet and confer process was significantly impacted by the diagnosis of a serious illness of 1CL's principal officer. This situation was called to the attention of Niro's counsel and the difficulties of communication were disclosed. Niro's rush to file this motion, rather than to work with 1CL toward resolution, constitute circumstances that make an award of expenses unjust. To the contrary, this Court should deny the motion and apply Rule 37(a)(5)(B), mandating "movant, the attorney filing the motion, or both to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees. But the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust." For the reasons set forth above, the motion was premature and not substantially justified; this matter could, and should, have been resolved without any need for a motion. CONCLUSION For the foregoing reasons, the motion should be denied and Niro, or its counsel, or both, should be required to pay 1CL's reasonable expenses incurred in making the motion, including attorney's fees, pursuant to Rule 37(a)(5)(B). Dated: March 9, 2017 Respectfully submitted, 1ST CLASS LEGAL (I.S.), LTD. By: /s/Marc S. Mazer Marc S. Mazer WEILL & MAZER, A Professional Corporation 90 New Montgomery Street, Suite 1400 San Francisco, CA 94105 (415) 421-0730 Attorneys for Plaintiff and Counter-Defendant 1st Class Legal (I.S.), Ltd. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. CASE NO. 1:16-cv-06793 8 Case: 1:16-cv-06793 Document #: 45 Filed: 03/09/17 Page 9 of 9 PageID #:470 CERTIFICATE OF SERVICE The undersigned, an attorney, certifies that on March 9, 2017, he caused the foregoing Plaintiff and Counter-Defendant's, 1st CLASS LEGAL, LTD., Opposition to Motion to Compel by Niro Law, Ltd. to be served upon all counsel of record via the court's electronic docketing system. Dated: March 9, 2017 1ST CLASS LEGAL (I.S.), LTD. By: /s/Steve M. Varhola Steve M. Varhola LYMAN LAW FIRM, LLC 227 West Monroe Street, Suite 2650 Chicago, Illinois 60606 (312) 762-9517 Attorneys for Plaintiff and Counter-Defendant 1st Class Legal (I.S.), Ltd. PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL BY NIRO LAW, LTD. 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