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United States v. Barclays Capital, Inc.

United States District Court, E.D. New York

November 2, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
BARCLAYS CAPITAL, INC., et al. Defendants.

          MEMORANDUM AND ORDER

          James Orenstein, Magistrate Judge

         For the third time, I address the parties' joint request to have me approve a stipulated protective order that would ease their litigation burdens but deprive non-parties, who have not had an opportunity to be heard, of rights that they would otherwise have. As briefly explained below, for the third and final time I deny the request.

         I. Background

         I assume the reader's familiarity with the record. In short, the parties first submitted their proposed protective order on June 7, 2017. Docket Entry ("DE") 55. I declined to approve it for two reasons: first, its terms relieved the parties of their obligations under the laws of several jurisdictions to notify non-party borrowers of the disclosure of information about them; second, it conferred on the parties overbroad protections against the disclosure of otherwise privileged information that could be avoided through due diligence. See DE 61 (minute order dated June 12, 2017); DE 62 (transcript).

         On July 11, 2017, the parties submitted a revised proposal that partially addressed the latter concern about the privilege provisions and that asked me to reconsider my initial decision about the disclosure provisions. See DE 70 (letter); DE 70-1 (proposed order); DE 70-2 (redline comparison showing changes) at 22-24. In a Memorandum and Order dated October 18, 2017, DE 101 (the "Order"), I denied the request to reconsider the decision about the disclosure provisions, explained why the revisions concerning the waiver of privilege did not suffice to alleviate my concerns, and directed the parties to submit a revised protective order that conformed to those rulings.

         Instead of complying with that Order, the parties again moved for reconsideration. See DE 102 ("Motion"). Because their earlier request for reconsideration was not styled as that kind of motion for understandable reasons (when I initially expressed my concerns about the proposal, I invited further input from the parties), I will not reject the instant motion as a procedurally improper successive motion for reconsideration, notwithstanding the reality that the parties simply seem unwilling to accept a ruling I have already carefully considered twice. Instead, I will consider the merits of the parties' proposals for the third time, as well as their contention that I overlooked certain matters in my earlier rulings.

         II. Discussion

         A. Reconsideration

         The law of this jurisdiction disfavors motions for reconsideration, and requires that they be denied absent a showing that the court overlooked controlling decisions or facts. If instead of making such a showing, the movant simply rehashes earlier arguments or tries to rely on new facts not previously presented, the motion must be denied. See, e.g., DirecTV, LLC v. Borbon, 2015 WL 7281636, at *1 (E.D.N.Y. Nov. 16, 2015) (quoting Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012); Mikol v. Barnhart, 554 F.Supp.2d 498, 500 (S.D.N.Y. 2008) (citing Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995))). Reconsideration is not available where a party "is attempting belatedly to plug the gaps of its prior motion." Id. at *2.

         B. Notice to Borrowers

         The parties assert that with respect to borrower notification, I "overlooked the significant burden on the parties and especially on non-parties that requiring borrower notification would engender, as well as the limited extent to which the financial privacy interests of individual borrowers would actually be impinged by eliminating such requirements." Motion at 1. That is untrue. See DE 70 (letter dated July 11, 2017, describing the burdens associated with notification and the extent to which borrowers' privacy interests would be impinged by eliminating applicable notification requirements); DE 70-3 (attachment to July 11 letter detailing the financial privacy statutes of various jurisdictions); Order at 3 (explicitly addressing the asserted burdens). To the extent that the parties now rely on letters from non-party subpoena recipients attesting to the burdens attendant to complying with their disclosure obligations, their reliance is misplaced for two reasons. First, I did not overlook the letters, which were not presented to me. Second, the letters do no more than amplify the concern about burdensomeness that I had already taken into account. Compare DE 77-1 (objections to subpoena from non-party WMC Mortgage, LLC ("WMC"), including objection to the burden of compliance, appended to letter in support of the parties' first request for reconsideration) with DE 102-7 (letter from WMC further describing such burdens, appended to letter in support of the parties' second request for reconsideration); Order at 3.

         The parties further assert that I "incorrectly assumed that because the Defendants undertook a general survey of the financial privacy laws of 56 States and territories … the work of determining whether any notification provisions would apply to a particular loan or borrower is straightforward, and in fact has already largely been completed." Motion at 1-2. The parties go on to contrast that characterization of my Order with the following purported refutation of it: "To the contrary, under the Court's [Order[1], any party or non-party producing borrower information would have to make an individualized determination as to which jurisdictions' laws apply to that borrower and as to what if any notification such laws would require." Id. at 2. In so writing, the parties implicitly assume that I did not contemplate the likelihood that, having determined the array of potentially applicable state and federal statutes, those tasked with disclosing borrower information would then have to determine which of those laws applied to each particular disclosure. Here again, the parties' contention is simply untrue: I explicitly took that additional step into account and noted that the parties had provided no information about the burden associated with it. See Order at 3 ("The parties … have provided no information about the burden they would shoulder in determining the jurisdiction whose laws would apply to a given borrower's information.").

         The fact that the parties have now made an argument about that burden does not suffice to warrant reconsideration for two reasons. First, in order to promote judicial economy by "ensur[ing] the finality of decisions, " reconsideration is not available to allow parties to "plug the gaps" of an earlier insufficient motion. DirecTV, LLC v. Borbon, 2015 WL 7281636, at *2 (quoting Polsby v. St. Martin's Press, Inc., 2000 WL 98057, at *1 (S.D.N.Y. Jan 18, 2000)). Second, while the parties now make the conclusory assertion that such individual review would be burdensome, they simply instruct me that the magnitude of the burden is "manifest[, ]" Motion at 2, rather than providing any specific information. Moreover, the parties' arguments rests to an important degree on speculation:

Given that many of the laws in question impose financial liability on institutions that inappropriately disclose borrower information, there is no basis to assume that these non-parties would rely on the Defendants' general survey of State law, rather than retaining their own counsel to conduct ...

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