IN RE APHRIA, INC. SECURITIES LITIGATION

Background

The plaintiffs requested an order compelling Defendants Neufeld and Merton, and former Defendant Cacciavillani, to produce deposition transcripts from a related Ontario lawsuit. The defendants argued that Ontario law prohibited disclosure, that some of the transcript material was irrelevant, and that irrelevant portions should be redacted.

Foreign-law issue

The court explained that the party opposing discovery based on foreign law must prove what that law is and show how it prevents production. The defendants relied on Ontario Rule 30.1, which generally limits the use of evidence obtained through discovery in one proceeding. The rule includes exceptions, including use for impeachment and production when the interest of justice outweighs prejudice.

The court held that the defendants did not meet their burden. Neither side submitted declarations, expert testimony, or other materials definitively explaining how Rule 30.1 and its exceptions applied here. The court also noted that the defendants had not raised privacy concerns, that Ontario law may allow production when the parties or issues are similar, and that earlier-proceeding transcripts may be used to impeach a witness. Because the defendants had not demonstrated a conflict between Ontario law and the Federal Rules of Civil Procedure, the court concluded that no international-comity analysis was necessary. International comity is a court’s consideration of another country’s laws and interests when the legal systems may conflict.

Relevance and redactions

The defendants conceded that at least some portions of the transcripts were relevant. The court agreed that the transcripts related to the plaintiffs’ allegations that Neufeld, Merton, Cacciavillani, and Cervini had undisclosed interests in transactions involving Aphria and that Aphria insiders had engaged in transactions benefiting themselves at shareholders’ expense.

The court rejected the request to redact irrelevant portions. It observed that the defendants’ cited cases involved redacting entire documents rather than portions of transcripts, and that courts generally disfavor relevance redactions because they can create suspicion and remove context. The court also noted that the defendants had not identified a privacy concern or similar sensitivity that would justify departing from that general approach.

Former defendant Cacciavillani

The defendants separately objected to producing Cacciavillani’s transcripts because he had been dismissed from the case for lack of personal jurisdiction. The court rejected that objection, reasoning that if the transcripts were relevant and in the defendants’ possession, they had to be produced even though Cacciavillani was no longer a named defendant.

Disposition

The court granted the plaintiffs’ request to compel production of the transcripts. It denied the defendants’ request to redact portions of the transcripts.