Alix v. McKinsey & Co., Inc.

Background

The defendants and counterclaim plaintiffs seeking relief included Kevin Carmody and Seth Goldstrom, along with defendants Dominic Barton, Jon Garcia, Mark Hojnacki, Jean Molino, Alison Proshan, Robert Sternfels, and Jared Yerian. They submitted a letter-motion asking the court to compel Jay Alix and AlixPartners, LLP, to produce documents referred to as the “Competitive Response Documents.”

The requests sought documents and communications concerning AlixPartners’ response to McKinsey’s entry into the restructuring business. Request for Production No. 17 to Jay Alix sought documents referenced in affidavits by Jay Marshall submitted in earlier litigation. Request for Production No. 12 to AlixPartners sought similar materials. The requested period ran from January 1, 2001, to the present.

Parties’ Positions

The movants argued that the documents were relevant to Alix’s and AlixPartners’ claims under the Racketeer Influenced and Corrupt Organizations Act and to Carmody’s and Goldstrom’s counterclaims. They asserted that the documents could show when AlixPartners knew or should have known about alleged injuries, which they said could bear on whether claims related to eight bankruptcies were barred by the applicable time limit. They also argued that the documents could show the intended scope of a strategy to make McKinsey’s participation in the bankruptcy industry “as visible and painful as possible,” including alleged efforts to disparage McKinsey and defame Carmody and Goldstrom.

Alix and AlixPartners refused to produce the requested documents, asserting, among other things, that they were irrelevant. The movants argued that prior court orders did not resolve the documents’ relevance to the RICO and defamation claims in this action and that concerns about competitively sensitive information could be addressed through the case’s protective order.

Court’s Analysis

The court stated that the requested discovery was relevant within the broad meaning of that term. It nevertheless agreed with Alix and AlixPartners that, in light of the alternative discovery they had already provided or agreed to provide, the requested discovery was disproportionate to the needs of the case. The order therefore resolved the discovery dispute on proportionality grounds rather than finding that the documents were irrelevant.

Ruling

The court’s order states: “Application DENIED.” The denial was without prejudice to a more targeted request for a subset of the requested materials. The clerk was directed to terminate ECF No. 387.