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Hunt v. Enzo Biochem

October 22, 2012

FRANCIS SCOTT HUNT AND SHUNDA CHERI HUNT, INDIVIDUALLY AND AS TRUSTEE FOR IAN CHRISTOPHER HUNT, LAWRENCE A. MCMAHON AND JUDITH J. MCMAHON, PAUL D. CAVANAGH INDIVIDUALLY AND AS TRUSTEE FOR THE PAUL D. CAVANAGH TRUST, AND VIRGINIA POPE, PLAINTIFFS,
v.
ENZO BIOCHEM, INC., HEIMAN GROSS, BARRY WEINER, ELAZAR RABBANI, SHARIM RABBANI, JOHN DELUCCA, DEAN ENGELHARDT, AND JOHN DOES 1-50, DEFENDANTS.
KEN ROBERTS, PLAINTIFF,
v.
ENZO BIOCHEM, INC., ET AL., DEFENDANTS.
PAUL LEWICKI, PLAINTIFF,
v.
ENZO BIOCHEM, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.

OPINION AND ORDER

I. INTRODUCTION

Dan Brecher, former counsel for plaintiff Paul Lewicki, brings this motion for an Order pursuant to Rule 71 directing non-party Lawrence Glaser to return confidential documents. On October 12, following an evidentiary hearing at which Brecher and Lewicki - but not Glaser - were present and testified, I granted a motion for sanctions brought by defendants Enzo Biochem, Inc., Heiman Gross, Barry Weiner, Elazar Rabbani, Sharim Rabbani, John Deluca, Dean Engelhardt, and John Does 1-50 (the "Enzo Defendants").*fn1 I found both Lewicki and Brecher in civil contempt under Rule 37 for violating this Court's Order for the Protection and Exchange of Confidential Information (the "Protective Order") by improperly giving Glaser confidential materials. Accordingly, I ordered Brecher to pay $33,780.86 to the Enzo Defendants and to "take all necessary steps to retrieve from Glaser any documents designated 'Confidential,' whether original or copies, previously produced by the Enzo Defendants."*fn2 In an effort to comply with this Court's October 12 Order, Brecher now seeks an Order: (1) requiring Glaser to turn over all Confidential Documents and all materials derived therefrom; and (2) requiring Glaser to pay damages to Brecher. For the reasons set forth below, Brecher's motion is granted in part and denied in part.

II. BACKGROUND

A. Undisputed Facts*fn3 In 2001, Lewicki signed a retainer agreement with attorney Michael Rovell with a view towards filing a series of lawsuits against the Enzo Defendants.*fn4 Lewicki, Glaser, and most of the other plaintiffs in this case planned to sue the Enzo Defendants for misrepresenting the preliminary success of its HIV and Hepatitis B therapies - including pre-clinical and clinical trials, its patent estate, and other commercial arrangements - in order to inflate the price of Enzo stock and reap a profit.*fn5 The plan called for Glaser to win his case in Virginia first, and for the rest of the group to use that hoped-for success in a subsequent case in New York.*fn6 At a deposition, Glaser admitted that he entered into a written agreement with Lewicki, Cavanagh, and Pope in 2001 - an agreement that required these individuals to contribute to Glaser's legal expenses in return for a share of any recovery Glaser obtained in his lawsuit.*fn7 In line with the plan, Glaser filed the Virginia case in 2002.*fn8 After Glaser's claims were dismissed, he appealed unsuccessfully to the Fourth Circuit, and then to the Supreme Court.*fn9

In 2006, Lewicki and other plaintiffs commenced this action, making similar allegations against Enzo. Plaintiffs were initially represented by Rovell; when he died, plaintiffs replaced him with Brecher.*fn10 Concerned that confidential documents provided to plaintiffs might be misused by non-parties such as Glaser, Enzo's counsel negotiated and stipulated the terms of the Protective Order with Brecher, which was entered on March 25, 2008.*fn11 In April, 2009, Lewicki - who knew about the existence but perhaps not the details of the Protective Order -"requested that Brecher 'ask [Judge Scheindlin] to make [the Protective Order] formally . . . binding on' Glaser, so that Glaser could have access to Enzo's confidential documents."*fn12 Brecher refused both Lewicki's request and additional requests made by Glaser, and went so far as to threaten to withdraw as counsel if Lewicki petitioned the Court on his own.*fn13 In June 2009, I granted Enzo's motion for summary judgment, dismissing Lewicki's case in its entirety.*fn14

On October 2, 2009, Lewicki and Glaser removed boxes of files, some of which were confidential, from Brecher's office in New York City.*fn15 Brecher asserts that while he let Glaser assist Lewicki in removing the files, he only did so because: (1) Glaser had an automobile to carry the files (whereas Lewicki did not); and (2) "Lewicki and Glaser had both previously made written representations in communications with [Brecher] indicating that they understood that there was the Protection Order which provided that the Confidential Documents should not be reviewed by persons such as Glaser."*fn16 Glaser took the files to an attorney who he hoped would help Lewicki with his appeal, but who ultimately declined to take the case.*fn17 Glaser then brought the files to a meeting with Lewicki at a New Jersey Turnpike rest stop at which they reviewed three files that were marked "confidential" and that were covered by the Protective Order.*fn18

In January 2011, Glaser filed a motion pursuant to Rule 60 in the Virginia District Court seeking to reopen his original case. Attached to Glaser's motion were the three confidential files reviewed at the rest stop.*fn19 Glaser's Rule 60 motion was denied by the Virginia District Court on April 1, 2011.*fn20 After this denial was affirmed by the Fourth Circuit in October, 2011, Glaser again petitioned for a writ of certiorari in the United States Supreme Court and was again denied.*fn21

Enzo moved in this Court for an Order directing Brecher and Lewicki to: (1) obtain the return of the Confidential Documents for Glaser; (2) pay Enzo for its litigation costs.*fn22 I found that Brecher and Lewicki had violated the Protective Order and I granted Enzo's motion in full. In attempting to comply with my Order, Brecher has made several written requests to Glaser for the return of the confidential documents; Glaser has thus far refused and expressed his belief that he has no obligation to comply with Brecher's requests.*fn23 Brecher now moves for an Order compelling Glaser to return the documents to Enzo.

B. Glaser's Assertions*fn24

Glaser is not a party to this action, has never resided in New York, and has had no contact with New York other than to help Lewicki remove the case files from Brecher's office.*fn25 Glaser believes that the confidential documents at issue were responsive to subpoenas issued in connection with his bankruptcy case, and that they therefore should never have been covered by a confidentiality agreement or protective order.*fn26 Glaser asserts that Brecher never showed him the Protective Order - and that although he knew of its existence, he never signed or agreed to be bound by it.*fn27 Further, Glaser asserts that when he looked through the documents, there was no red weld folder marked confidential, nor was there any other way for him to identify which documents might be covered by the Protective Order.*fn28 Indeed, Glaser asserts that when Brecher gave him the files, he knew Glaser would use them in an attempt to reopen his Virginia case.*fn29

III. APPLICABLE LAW

A. Personal Jurisdiction and Due Process

A court may not assert personal jurisdiction over a party if doing so would deny that party due process under the Fourteenth Amendment.*fn30 This due process inquiry has two steps: first, a court must determine whether the party has had minimum contacts with the state in which it sits sufficient to justify the exercise of personal jurisdiction over that party; and second, the court must determine whether the exercise of personal jurisdiction is reasonable and thus comports with "'traditional notions of fair play and substantial justice.'"*fn31 "'The two prongs of the inquiry are interrelated, such that a weak showing of minimum contacts requires a stronger demonstration of reasonableness.' The converse is also true."*fn32

The minimum contacts requirement ensures that a party is not haled into court "solely as a result of random, fortuitous, or attenuated contacts."*fn33

To establish the minimum contacts necessary to satisfy specific jurisdiction, [T]he plaintiff first must show that his claim arises out of or relates to defendant's contacts with the forum state. The plaintiff must also show that the defendant purposefully availed himself of the privilege of doing business in the ...


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