Prochaska & Associates v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

155 F.R.D. 189, 1993 U.S. Dist. LEXIS 20182, 1993 WL 643418
CourtDistrict Court, D. Nebraska
DecidedApril 12, 1993
DocketNo. 8:CV91-00073
StatusPublished
Cited by2 cases

This text of 155 F.R.D. 189 (Prochaska & Associates v. Merrill Lynch, Pierce, Fenner & Smith, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nebraska primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prochaska & Associates v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 155 F.R.D. 189, 1993 U.S. Dist. LEXIS 20182, 1993 WL 643418 (D. Neb. 1993).

Opinion

ORDER

JAUDZEMIS, United States Magistrate Judge.

Pursuant to the referral orders of the Honorable Richard G. Kopf, before me for consideration are plaintiffs motion for discovery orders (#83) and defendant’s motions to compel, for protective order and for sanctions, fees & costs (#89).

The controversy relates to the purchase by plaintiff of promissory notes sold by Robert J. Prendergast, Jr. during the time that he was employed by defendant. Because of irregularities related to the sale of the notes, Prendergast was convicted and is now serving a sentence in federal penitentiary in Leavenworth, Kansas. Plaintiff seeks to recover some of the amounts it expended on the promissory notes from defendant under the theories of common law fraud and negligent supervision.

Currently at issue as a result of the opposing motions regarding discovery are a number of interrogatories and production requests and requests for admission. In many cases, the two motions involve the same pleadings.

Plaintiffs motion for discovery orders (#83) does not specify the discovery documents which were in controversy. The following itemization, then, comes not only from the motion itself but also from plaintiffs brief. From a careful reading of the two, it appears that plaintiff is seeking the following relief:

1. Plaintiff requests an order requiring defendant to comply with plaintiffs first request for production of documents, Re[191]*191quest #5, and plaintiffs second request for production of documents, Request # 3.
2. Plaintiff requests an order preventing defendant from requiring plaintiff to respond to the following discovery requests:
a. Defendant’s first set of interrogatories and second set of interrogatories;
b. Defendant’s request for production of documents which relate to plaintiffs financial documents; and
c. Defendant’s request for all written and oral communications between plaintiff and Prendergast for a four year period of time.
3. An order requiring Operation Bridge to produce to plaintiff its records regarding Prendergast.
4. An order granting plaintiff leave to depose Prendergast.

Defendant’s motion (# 89) requests a protective order requiring plaintiff to comply with certain confidentiality requirements regarding the production of certain Merrill Lynch documents, an order compelling plaintiff to produce all documents, answer all interrogatories and requests for admission, and requests sanctions against plaintiff and plaintiffs counsel.

PRODUCTION OF DEFENDANT’S DOCUMENTS

Request #5 of the first request for production and Request #3 of the second request for production seek discovery of defendant’s documents which pertain to its compliance program under federal and state securities laws, their related regulations, and the rules of the NASD and NYSE. Defendant has indicated its willingness to produce these documents to plaintiff subject to a confidentiality agreement. Plaintiff refuses to execute the confidentiality agreement, contending that defendant cannot meet its burden to establish that the documents are confidential.

Defendant has submitted three affidavits supporting its claim of confidentiality regarding the documents. The affidavits are sufficient to meet defendant’s burden under Fed. R.Civ.P. 26(c). United States v. United Fruit Co., 410 F.2d 553 (5th Cir.1969) (specific allegations in affidavit of potential damage to business by revelation of confidential information sufficient to prevent disclosure); C. Wright and A. Miller, Federal Practice and Procedure: Civil § 2043 (Supp.1992) (insisting that only full-fledged trade secrets be protected when disclosed through discovery undervalues concerns about the intrusiveness of discovery).

I have reviewed the Stipulation for Confidentiality of Designated Documents and Information proposed by defendant. It is even-handed, allowing either party to make use of its provisions. While generally self-effectuating, it provides a provision for a party to bring to the attention of the court at any time the question of whether any particular document should have been designated confidential by the opposing party.

Defendant will only be required to produce the requested documents after plaintiff has entered into a confidentiality agreement either identical or substantially similar to the one provided to the court as an exhibit to plaintiffs motion.

DEFENDANT’S INTERROGATORIES— FIRST AND SECOND SETS

Defendant has served interrogatories upon plaintiff which plaintiff has answered in part and objected to. Plaintiffs objections have been asserted on several occasions, often outside of the rule-authorized time frame for answers or objections. An initial objection made by plaintiff was that the interrogatories exceeded the local limit. That objection was timely made and then, defendant contends, withdrawn.

The "withdrawal of the objection is irrelevant to this court’s rules. Defendant has no right to ask in excess of 50 interrogatories without specific leave of court. Not numbering the sub-parts of interrogatories does not change the fact that, if the interrogatories require discrete pieces of information, those interrogatories are to be counted as if the sub-parts were specifically itemized. By interrogatory 4 of defendant’s first set of interrogatories to plaintiff, defendant exceeded this court’s limit. Interrogatory 4 alone, double spaced, is one and one-half pages long [192]*192and requires, by my count, thirty discrete pieces of information.

Plaintiff will not be required to answer any interrogatories proposed by defendant beyond interrogatory 4 of the first set of interrogatories. To the extent any answers given to any other interrogatories are contended to be inadequate, those answers will not be required to be supplemented.

DEFENDANT’S REQUEST FOR PRODUCTION OF DOCUMENTS

Defendant seeks documents to determine the relationship of plaintiff to Prendergast (both before the transaction involving the notes and during that transaction), the sophistication of plaintiff and its principals regarding investment generally, and the nature of the inquiry, if any, conducted by plaintiff regarding the note transaction. Plaintiff declines to provide the requested information.

Plaintiff contends that its sophistication in investments is not a legally relevant issue and will not be admissible at the trial of this matter. That argument is not controlling in this stage of discovery. Rule 26 is by its terms very broad and allows for the discovery not only of relevant documents but all documents which “appears reasonably calculated to lead to the discovery of admissible evidence.” Similarly, plaintiff attempts to downplay any controversy regarding its reliance on Prendergast, arguing that its reliance was conclusively established by Pren-dergast’s conviction. That argument is unavailing.

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Cite This Page — Counsel Stack

Bluebook (online)
155 F.R.D. 189, 1993 U.S. Dist. LEXIS 20182, 1993 WL 643418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prochaska-associates-v-merrill-lynch-pierce-fenner-smith-inc-ned-1993.