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Hong v. KBS America

December 12, 2006

YONG KI HONG, ET AL., PLAINTIFFS,
v.
KBS AMERICA, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matsumoto, United States Magistrate Judge

MINUTE ENTRY & ORDER

Pending before this Court is Plaintiffs' Motion to Compel Discovery and For Sanctions against defendants KBS America, Inc. and Chang Joon Lee (the "KBS Defendants"), Joseph Kong and Spring Video & Gift, Inc. (the "Kong Defendants"), and Yang Joon Kim ("Y.J. Kim"), and to enforce a subpoena served on the New York State Attorney General. (Pl. Mot., Doc. No. [91].) The Court has considered the foregoing submission and the responses from the Office of the New York Attorney General (the "AG's Office") (doc. nos. [93], [98]) and the defendants (doc. nos. [94]-[96]). In addition, the Court held a telephone conference on December 11, 2006 to hear the parties' arguments with respect to certain discovery disputes, at which it ruled on the disputes that are at issue. Those rulings are set forth more fully in this order.

As a preliminary matter, the Court notes that plaintiffs have failed to certify, as required by Fed. R. Civ. P. 37 and the Local Civil Rules, that they have attempted in good faith to resolve their disputes before seeking judicial intervention. Moreover, the KBS Defendants assert that the plaintiffs failed to attempt to resolve these disputes before bringing them before the Court. Based on the plaintiffs' letters to KBS counsel, dated October 6 and November 10, 2006 (Pl. Mot., Exs. B and C, respectively) , seeking compliance with plaintiffs' discovery demands, and the KBS Defendants' responses thereto (KBS Opp. at 3-4, Exs. E and F), it appears that plaintiffs have sufficiently attempted to resolve this matter. The Court notes, however, that plaintiff's eleventh hour motion to compel, two days prior to the closure of fact discovery, is not appreciated. For the reasons set forth herein, the Court denies in part and grants in part plaintiffs' application.

I. Motion to Enforce Subpoena Served on Attorney General

First, the Court considers plaintiffs' motion to compel compliance with a subpoena served on the New York State Attorney General, which that office acknowledges was served on or about October 30, 2006. The AG's Office claims that upon receiving the subpoena, it contacted plaintiffs' counsel on or about November 1, 2006, informed her that the office would "vigorously oppose" the subpoena which seeks materials "relating to an ongoing, confidential law enforcement investigation" being conducted by the office's Antitrust Bureau, and requested that plaintiffs' counsel withdraw the subpoena. Based on its understanding that plaintiffs' counsel agreed to withdraw the subpoena, the AG's Office did not object formally to the subpoena, as required by Fed. R. Civ. P. 45(c)(2)(B). In a letter dated November 29, 2006, plaintiffs' counsel advised the AG's Office that plaintiffs' subpoena would not be withdrawn. Accordingly, the Court considers timely the objection by the AG's Office to the plaintiffs' subpoena, as set forth in its submission. (Doc. no. 93, 11/30/06 AG Ltr. at 1-2 and Ex. C thereto; Doc. No. 98, AG Office Opp. Mem. and annexed Decl. of AAG Gargiulo.)

The AG's Office represents in its letter that it is currently conducting a confidential law enforcement investigation arising from the same facts giving rise to the instant action and invokes the work product doctrine, law enforcement, deliberative process and public interest privileges with respect to its investigative files. The AG's Office further asserts that plaintiffs have failed to demonstrate a compelling need for documents in the possession of the AG's Office, noting that plaintiffs have access to the same sources of information and documents from the defendants and non-parties. (AG Office Opp. Mem. at 6-7.) The Court agrees, based upon the authority cited in the submissions by the AG's Office, that the documents and information obtained pursuant to its confidential law enforcement investigation are protected from disclosure, particularly where plaintiffs cannot demonstrate that they have a substantial need for the information because it is not discoverable from sources other than the AG's Office. The Court therefore denies plaintiffs' motion to compel the AG's Office's compliance with its subpoena. See In re Department of Investigation of the City of New York, 856 F.2d 481 (2d Cir. 1989) (finding that New York City Department of Investigation could invoke law enforcement privilege and need not respond to subpoenas requesting it to disclose findings of ongoing, independent commission); see also In re Anthony Ragusa, Jr., 578 N.Y.S.2d 959, 964 (Sup. Ct. 1991) (granting petitioner's request for information pursuant to Freedom of Information Law where, inter alia, New York Attorney General invoked law enforcement privilege but did not point to any ongoing judicial proceeding or law enforcement investigation); N.Y. Pub. Off. Law § 87(2)(e) (2006) (providing exception to Freedom of Information Law where request concerns records which "are compiled for law enforcement purposes and which, if disclosed, would . . . interfere with law enforcement investigations or judicial proceedings . . .").

II. Plaintiffs' Discovery Requests

Plaintiffs assert that the KBS defendants repeatedly and willfully failed to produce documents pursuant to plaintiffs' interrogatories and document requests and repeatedly failed to respond to plaintiffs' October 6 and November 10, 2006 letters seeking compliance with plaintiffs' discovery demands. (Pl. Mot. at 1-2, Exs. B and C, respectively.) The Court addresses the following items in dispute, as set forth in plaintiffs' motion.

Items I.(A) and I.(C). Plaintiffs assert that the KBS Defendants and the Kong Defendants (described as a direct competitor of plaintiffs), "failed and refused . . . to disclose in any form" information in response to plaintiffs' interrogatories nos. 2 and 3. Interrogatory 2 requests that the KBS Defendants describe all communications with other defendants, and interrogatory 3 requests that the KBS Defendants describe all communications with the Association and its members, "regarding Plaintiffs, the Shilla store, the Fresh Meadows store, the retail video business in the New York metropolitan area, and the pricing or selling policy applicable to KBS programming, and/or any License." (See Pl. Mot., Ex. E.)

The Court first addresses item I.(A) of plaintiffs' motion. Contradicting their own assertion that KBS "failed and refused. . . to disclose in any form" the requested information, plaintiffs state that the KBS Defendants' production to plaintiffs dated October 26, 2006, and to the AG's Office dated November 22, 2005, revealed that KBS and C.J. Lee "had, in fact, communicated with Kong regarding Plaintffs' store on the very date that C.J. Lee terminated supplying KBS America's master video tapes to Plaintiffs." (Pl. Mot. at 2.) Plaintiff asserts that the Kong Defendants also failed to reveal this communication with KBS regarding the plaintiffs' store.

The KBS Defendants respond that they agreed to provide documents responsive to plaintiffs' interrogatories nos. 2 and 3, but plaintiffs have delayed in finalizing the terms of a confidentiality order pursuant to which the documents will be produced. (KBS Opp. at 2.) The Court therefore directs plaintiffs to negotiate and finalize the terms of a confidentiality order, pursuant to which the KBS Defendants are ordered to provide verified responses and documents. The plaintiffs shall file by ECF the final, signed confidentiality order by December 15, 2006, for the Court's signature. The KBS Defendants shall then produce documents responsive to these requests and to the requests as ordered by the Court below, by December 22, 2006, and correlate the Bates numbers of the documents to the specific interrogatory and/or document request to which each document responds.

The Kong Defendants also claim that plaintiffs' counsel failed to confer with them regarding any purported deficiencies. The Kong Defendants further assert that they fully responded to plaintiffs' discovery demands, produced Kong for a deposition at which he testified to the best of his recollection, and offered to produce him for a subsequent deposition. (Kong Def. Opp. at 1-2.) The Kong Defendants are reminded of their ongoing obligation to provide verified supplemental discovery responses, including information and documents relating to any communications or meetings about which their memories may be refreshed.

With respect to item I.(C) of plaintiffs' motion, plaintiffs complain that the KBS and Kong Defendants failed to disclose a meeting at which they allegedly discussed a national video store owners' meeting that occurred in 2004, prior to the KBS Defendants' termination of their programming to plaintiffs. The Court finds that such a discussion, if it occurred, is relevant. Accordingly, the KBS and Kong Defendants shall supplement their discovery responses and provide verified statements regarding whether, at that meeting, the KBS and Kong Defendants discussed the subjects enumerated in plaintiffs' interrogatory no. 2, including the national video store owners' meeting, and, if so, provide verified supplemental discovery responses, including but not limited to a description of any discussions and responsive documents. The KBS and Kong defendants shall provide supplemental discovery responses by December 22, 2006.

Item I.(B). Plaintiffs next assert that the KBS Defendants failed to fully answer interrogatory no. 4, which requested that they identify and describe every communication between the KBS Defendants and B.G. Kim "regarding Plaintiffs, the Shilla store, the Fresh Meadows store, the retail video business in the New York metropolitan area, and the pricing or selling policy applicable to KBS programming, and/or any License." (See Pl. Mot., Ex. E.) Plaintiffs claim that the KBS Defendants "failed to disclose they had full familiarity with the dire financial difficulties of the Shilla Video Store in Brooklyn that, with permission from KBS, plaintiffs purchased and subsequently transferred to Fresh Meadow in Queens." (Pl. Mot. at 2.) Plaintiffs state that H.G. Jo and C.J. Lee, both of whom are described by plaintiffs as KBS America representatives, testified that prior to plaintiffs' purchase of Shilla, they had conferred with Shilla's then manager, B.G. Kim, regarding a series of bounced checks paid by ...


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