United States District Court, S.D. New York
OPINION & ORDER
NETBURN, United States Magistrate Judge
March 28, 2017, Defendants Credit Suisse International and
Credit Suisse Securities USA (LLC) (jointly, “Credit
Suisse”) filed a motion for summary judgment. ECF No.
156. This motion was supported by a declaration by counsel
Christopher J. Clark seeking to introduce 119 exhibits. ECF
No. 180. Plaintiffs object to and move to strike, in whole or
in part, three such exhibits, the declarations of Deborah
Burstein, ECF No. 180-116, Tobias Schraven, ECF No. 180-33,
and Tucker Martin, ECF No. 180-34. For the following reasons,
Plaintiffs' motion to strike is GRANTED as to the
Burstein Declaration and GRANTED in part and DENIED in part
as to the Schraven and Martin Declarations. Credit Suisse is,
however, granted leave to file an updated version of the
Burstein Declaration by Wednesday, August 30, 2017.
The Burstein Declaration
Burstein is Director and Counsel at Credit Suisse Securities
(USA) LLC. ECF No. 180-116 at ¶ 1. Her Declaration,
which consists of three paragraphs, refers to a document
bearing Bates number CS-ECD0000001 (“CS1”), a
spreadsheet that contains a record of all sales of Energy
Conversion Devices, Inc. (“ECD”) convertible
notes and common stock “with or through” Credit
Suisse during the Plaintiffs' proposed class period.
Id. at ¶ 2. Burstein attests that “each
and every purchase of ECD common stock effected with or
through [Credit Suisse] during the [class period] can be
found in CS1 and any subsequent sale of ECD common stock . .
. can also be found in CS1. Therefore, if a particular client
purchased ECD common stock through [Credit Suisse] . . . CS1
would reflect a common stock purchase into a specific account
relating to the client. The common stock remained in that
specific account . . . unless another transaction in CS1
shows the sale of common stock from that client's same
account . . . .” Id. at ¶ 3.
advance two principal arguments in support of their motion to
strike the Burstein Declaration. First, they contend that the
Declaration should be stricken pursuant to Federal Rules of
Civil Procedure 26(a)(1)(A) and 37(c)(1) because Burstein was
never disclosed as a fact witness. According to Plaintiffs,
Credit Suisse is using Burstein to “testify to new
facts” five months after the close of fact discovery,
and they have therefore not had the opportunity to test her
assertions in discovery. ECF No. 174, Pls.' Br. at 6.
Second, they argue that the Declaration is not based on
Burstein's personal knowledge as required by Federal Rule
of Civil Procedure 56(c)(4) because it fails to explain how
Burstein, as an attorney, knows the content of the
spreadsheet or the completeness of the trading data therein.
Failure to Disclose Burstein as a Fact Witness
Rule of Civil Procedure 26(a)(1)(A) requires parties to
designate all individuals “likely to have discoverable
information-along with the subjects of that information-that
the disclosing party may use to support its claims or
defenses.” A party that has not complied with the
initial disclosure rule may not “use that information
or witness to supply evidence on a motion, at a hearing, or
at a trial, unless the failure was substantially justified or
harmless.” Fed.R.Civ.P. 37(c)(1).
Credit Suisse contends, however, Burstein, an attorney in
Credit Suisse's litigation department who worked on this
case, but did no work on the ECD offerings themselves, was
not a fact witness “likely to have discoverable
information.” Instead, it appears evident that the
Declaration attempts to serve as a “vehicle[s] placing
before the court, relevant admissible documents . . . in a
cohesive manner.” New York v. Solvent Chem.
Co., 218 F.Supp.2d 319, 331 (W.D.N.Y. 2002). Plaintiffs
do not object to the admissibility of CS1, the underlying
document that the Burstein Declaration seeks to introduce,
and their expert's theory of liability concerning
“excess short shares” sold by Credit Suisse
expressly relies on CS1's data.
Plaintiffs read the Burstein Declaration to attest that CS1
reflects Credit Suisse's hedge fund clients' sales
irrespective of whether or not they were executed through
Credit Suisse. Plaintiffs argue that the admission of such
statement-which would flatly contradict other witnesses'
testimony in discovery and the assumptions of both
parties' experts- would be tantamount to
“sandbagging” them with new evidence at the
appear to reach this conclusion by considering only the last
sentence of the declaration, which states that common stock
purchased by a client from Credit Suisse would remain in that
customer's account unless another transaction in CS1
showed that it had been sold, therefore suggesting that CS1
could also track sales of common stock between Credit
Suisse's clients and third parties. This is simply not a
credible reading of the Declaration in its totality, which
repeatedly states that CS1 records only transactions between
Credit Suisse and its clients. No “new factual
claim” is made in the Burstein Declaration. It merely
asserts that CS1 is a full and accurate record of all
transactions in ECD notes and stock made between Credit
Suisse and its clients.
Ms. Burstein was not an individual “likely to have
discoverable information” subject to the initial
disclosure provisions of Rule 26(a)(1)(A), and her
Declaration is not excludable under Rule 37(c)(1).
Rule of Civil Procedure 56(c)(4) requires that an affidavit
or declaration filed to support a summary judgment motion
“must be made on personal knowledge, set out facts that
would be admissible in evidence, and show that the affiant or
declarant is competent to testify on the matters
stated.” Declarations that do not comply with this
requirement may be stricken from the record. Hollander v.
Am. Cyanamid Co., 172 F.3d 192, 198 (2d Cir. 1999).
Burstein Declaration is sparse as to the basis of
Burstein's knowledge of the integrity of the data
contained in CS1, stating only that Burstein was
“Director and Counsel” at Credit Suisse. In its
briefing, Credit Suisse reveals that Burstein oversaw the
collection of the data underlying CS1 that was produced in
response to Plaintiffs' discovery requests, was
intimately acquainted with the creation of the spreadsheet,
and “reviewed the completeness of CS1 in her official
capacity.” ECF No. 183, Defs.' Mem. at 8-9. While
this would be a sufficient basis to admit the Declaration,
these assertions appear for the first time in Credit
Suisse's memorandum of law opposing the motion to strike
and were never declared by Burstein herself. Accordingly, the
Declaration submitted ...