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J.P. Morgan Securities LLC v. Mariano

United States District Court, S.D. New York

January 22, 2018

J.P. Morgan Securities LLC, Plaintiff,
v.
Steven M. Mariano, Defendant.

          OPINION AND ORDER

          STEWART D. AARON UNITED STATES MAGISTRATE JUDGE

         Plaintiff, J.P. Morgan Securities LLC (“JPMS”), moves to compel production of documents by Defendant, Steven M. Mariano (“Mariano”), in response to Request Nos. 1 to 7 in JPMS's Second Request for Production of Documents, and to compel a response by Mariano to JPMS's Interrogatory No. 7. A telephone conference was held on January 22, 2018. For the following reasons, JPMS's motion is granted, subject to the modifications below.

         BACKGROUND

         This is a breach of contract action arising out of defendant Mariano's failure to pay a placement fee (and reimbursement of third party expenses) to JPMS in connection with Mariano's engagement of JPMS as placement agent for the sale of shares Mariano owned in Patriot National, Inc., a company of which he is the President and Chief Executive Officer.[1]Mariano has asserted counterclaims against JPMS for fraud in the inducement, breach of the placement agent agreement and conspiracy to defraud. (Mariano's Amended Counterclaim, ECF No. 48.) Mariano estimates the damages on his counterclaims “to be in excess of $100 million.” (Response to Interrogatory No. 7, ECF No. 58-2.) In his counterclaims, Mariano alleges that he “never would have entered into the PIPE transaction[2] had he known [JPMS's] representations were false.” (Mariano's Amended Counterclaim, ¶ 92.)

         Document Request Nos. 1 to 7

         During discovery, in connection with Mariano's counterclaims, JPMS served Document Request Nos. 1 to 7, [3] which JPMS asserts are “specifically targeted to explore whether and to what extent Mariano was motivated by a need to fund various personal loan obligations and/or business investments at the time of the PIPE transaction.” (JPMS Letter-Motion, ECF no. 58, at 2.) JPMS argues that Mariano's motivations “go directly to the issues of causation and reliance that are at the heart of Mariano's fraud (and other) claims.” (Id.) Mariano objected to each of Request Nos. 1 to 7 “as not relevant to any party's claim or defense and not proportional to the needs of the case.” (Ex. 1 to JMPS Letter-Motion, ECF No. 58-1.) By the instant motion, JPMS seeks to compel production of documents in response to Request Nos. 1 to 7.

         In response, although Mariano continues to assert his relevance and proportionality objections, Mariano admitted a “negligible benefit” of the document discovery sought. (Mariano Response to Letter-Motion, ECF No. 59, at 2.) Mariano also asserts, in a subsequent letter to the Court, that the documents sought by JPMS in Request Nos. 1 to 7 contain “highly sensitive financial information” of Mariano, and that, as a Florida resident, he “has a legitimate expectation of privacy in his personal financial records as guaranteed under the Florida Constitution.” (Mariano Letter-Motion, ECF No. 63, at 1-2.)[4]

         Interrogatory No. 7

         JPMS's Interrogatory No. 7 seeks the damages sought on Mariano's counterclaims, including “(a) each category of such claimed damages; (b) the computation of each such category of damages; and (c) the existence, custodian, location and general description of documents which [Mariano] contends support the claim for such damages.” (Ex. 2 to JPMS Letter-Motion, ECF No. 58-2.) In response, Mariano estimates his damages to be in excess of $100 million, but states that he “need not provide a final computation of damages at this time.” (Id.) In response to JPMS's motion to compel a response to Interrogatory No. 7, Mariano asserts that the “additional detail being requested now is premature, ” since Mariano's expert reports will provide the information sought and JPMS will have the opportunity to take expert depositions. (Mariano Response to Letter-Motion, ECF No. 59, at 3.)

         DISCUSSION

         I. Document Request Nos. 1 to 7

         Mariano asserts three objections to producing documents in response to Document Request Nos. 1 to 7: (1) relevance; (2) proportionality; and (3) privacy rights, which will be considered in turn.

         First, with respect to relevance, the scope of discovery in the federal courts is quite broad. See, e.g., Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (relevance under Rule 26 “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case”). Moreover, “[a] district court has broad latitude to determine the scope of discovery and to manage the discovery process.” EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir. 2012) (citing In re Agent Orange Prod. Liab. Litig., 517 F.3d 76, 103 (2d Cir. 2008)).

         The Court finds that Request Nos. 1 to 7 seek documents that are relevant to Mariano's counterclaims. The documents sought relate to Mariano's allegations of reliance and whether he had reasons other than the ...


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