Plata Capital Limited v. Financial Technology Partners L.P. and FTP Securities…

Background

This order resolved a discovery dispute. Plata Capital Limited brought the action concerning an April 20, 2023 engagement letter under which Financial Technology Partners L.P. and FTP Securities LLC, together called FT Partners, were to provide Plata with financial advice in exchange for commissions on certain financial transactions. Plata sought information and documents concerning FT Partners’ contracts with other clients.

Plata moved to compel FT Partners to respond to Interrogatory No. 5 and Requests for Production Nos. 5–7. Interrogatory No. 5 sought information about legal actions or asserted legal rights involving FT Partners’ clients. Request No. 5 sought agreements with other clients containing certain terms, including “Capital Raise,” “Company Sale,” and “acquirer,” along with related documents. Request No. 6 sought documents and communications that FT Partners had produced in another action. Request No. 7 sought documents and communications concerning the meaning of “Company Sale” and “acquirer” in an agreement involving Circle.

After Plata filed its motion, FT Partners stated that it would comply with Interrogatory No. 5. The court said it would treat that dispute as moot unless Plata later objected to FT Partners’ compliance. The court therefore addressed Requests for Production Nos. 5–7.

Court’s analysis

Under Federal Rule of Civil Procedure 26(b)(1), discovery must be relevant to a party’s claim or defense. Plata argued that FT Partners’ agreements with other clients could help interpret the April 20, 2023 engagement letter. The court considered two agreements FT Partners had provided: an engagement letter with Circle Internet Financial Limited, executed on July 1, 2020, and an engagement letter with AlphaSense, executed on January 23, 2015.

The court explained that evidence about what the parties meant when they made a contract can sometimes help show that seemingly clear language is ambiguous. But the court said such evidence is not useful if it would not persuade a reasonable person that the contract meant something other than the ordinary meaning of its words. Although discovery relevance is broader than trial relevance, the court stated that it is not unlimited.

The court concluded that the Circle and AlphaSense agreements did not show the dealings or shared understanding between Plata and FT Partners. They were agreements between FT Partners and third parties. The Circle agreement concerned termination after an acquisition through a de-SPAC transaction, while the AlphaSense agreement had a termination provision tied to the FT Partners managing partner’s cessation of direct involvement in the business relationship. The court found that neither situation was implicated by Plata’s engagement letter.

The court also found that the agreements used different fee structures, termination mechanisms, and definitions of “company sale.” It concluded that differently worded provisions governing different transactions could not assist in interpreting the disputed engagement letter.

Ruling

Judge Paul A. Engelmayer denied Plata’s request to compel FT Partners to comply with Requests for Production Nos. 5–7 because the requested discovery was irrelevant. The order did not further address Interrogatory No. 5 because FT Partners had stated that it would comply, subject to any later objection by Plata.