Yang v. Fei

Background

Plaintiffs Xin (“Kelly”) Yang and Ting (“Susan”) Chen brought a federal civil Racketeer Influenced and Corrupt Organizations Act case concerning the alleged HomeX deposit scheme. They alleged that HomeX collected deposits from customers for discounted goods and promised refunds, but instead used later customers’ deposits to pay earlier customers, functioning as a Ponzi scheme. The opinion states that plaintiffs sought relief for themselves and for a proposed class of HomeX victims.

Plaintiffs served interrogatories and document requests on the appearing and represented defendants. The defendants initially responded largely with boilerplate objections and produced no documents, later providing some information and documents. Plaintiffs argued that the responses remained incomplete and that some produced documents were cropped, unreadable, or selectively produced. They also raised concerns about potentially missing information from defendants’ phones and WeChat accounts, including documents that defense counsel said had been lost within the law firm.

The motion

Plaintiffs moved under Federal Rule of Civil Procedure 37 to compel fuller discovery responses and requested sanctions. They asked the Court to require complete answers and document production, deem insufficiently specific objections waived, require declarations about document searches and production, award attorneys’ fees and costs, and warn that continued noncompliance could lead to case-dispositive sanctions.

Interrogatories

The Court found that the interrogatories violated the federal limit of 25 interrogatories and also exceeded the limits imposed by Local Rule 33.3. The Court concluded that the interrogatories, which sought extensive information about HomeX personnel, entities, communications, accounts, and operating procedures, sought information that could often be obtained through documents or depositions. Although the defendants’ boilerplate objections were improper, their objections based on overbreadth and burden were valid to the extent the interrogatories exceeded the applicable limits.

The Court therefore ruled that the defendants did not need to provide further answers to the interrogatories and found that sanctions were not warranted for the interrogatory responses.

Document requests and electronic information

The Court found that plaintiffs’ concerns about the document responses had more merit. It held that the requests were broad but that the defendants had not adequately stated which responsive documents they were producing and which documents they were withholding based on objections, as required by Rule 34. The Court also found that the appearing defendants had not reasonably searched for and timely produced all responsive documents.

The Court did not find that relevant evidence had definitely been destroyed. It nevertheless concluded that the defendants had not provided enough information or a sufficiently reliable plan for recovering information from phones and computers, including WeChat data. The Court stated that defense counsel’s workload did not excuse discovery failures.

Orders and disposition

The Court granted in part and denied in part plaintiffs’ motion to compel and for sanctions. It ordered the appearing and represented defendants to, by August 29, 2025:

- retain a vendor to conduct forensic extraction of data from relevant iPhones, other electronic devices, and WeChat accounts or groups; - assign at least one additional lawyer from defense counsel’s firm to assist with the case; - reproduce documents previously produced in illegible or cut-off form; - provide a privilege log for responsive documents withheld under a privilege objection to Document Request 15; - provide declarations identifying devices used for HomeX-related work and describing their use; and - provide the Court with a letter describing steps taken to preserve evidence.

The parties also had to agree by August 29, 2025, on deposition dates for each defendant, with the depositions scheduled on or before October 15, 2025, whether or not more documents had been produced.

The Court granted plaintiffs’ request for attorneys’ fees and costs associated with bringing the motion. It directed plaintiffs to submit a fee motion with supporting time records and documentation by August 29, 2025. The defendants were warned that failure to comply could result in more severe sanctions against them and their counsel. The Clerk was directed to terminate the motion at ECF No. 99.

Classification

This is a procedural discovery order. It resolved a motion to compel and for sanctions rather than deciding whether plaintiffs’ RICO allegations were ultimately proven.