Fang v. Liu

Background

Ligang Fang sued Yafei Liu over allegedly stolen money. Fang’s complaint asserted claims for intentional misrepresentation, concealment, false promise, fraudulent inducement, conversion, breach of contract, and money had and received. According to the complaint, Fang paid Liu 4,500,000 RMB after Liu said he could help Fang address a Chinese tax investigation, and later paid two additional amounts of 1,000,000 RMB. The opinion notes inconsistencies between the complaint and Fang’s discovery letter about whether some payments were made by wire or in cash.

The case came before the court on a jointly filed discovery-dispute letter. Fang sought an order compelling Liu to produce documents and information. The court decided the dispute without oral argument under Federal Rule of Civil Procedure 78(b) and the district’s local rule.

Court’s Analysis

The court identified two main problems with Fang’s discovery requests. First, the complaint did not provide specific dates for when the alleged payments or related statements occurred. The court concluded that this made broad requests covering lengthy periods overly broad and disproportionate to the needs of the case. Second, some requests were not connected to the allegations in the complaint and therefore sought information irrelevant to any fact important to deciding the claims.

For Request for Production No. 9, Fang sought documents sufficient to identify Liu’s roles in the Chinese Communist Party since 2011. The court denied the request because the complaint did not allege that Liu’s party membership or government connections induced Fang to provide the money. Instead, the complaint alleged that Liu’s claim of having faced similar legal issues was the inducement. The court therefore found no logical or legal relevance between Liu’s political affiliation and the pleaded claims.

The court also denied Requests Nos. 10 through 14. Those requests sought information about all bank accounts, investment accounts, real property, assets held for Liu, and assets that others had agreed to hold for Liu. The court found that the requests could capture large amounts of irrelevant information and were not limited to information relevant and proportional to the claims and defenses under Rule 26(b)(1).

The court denied Requests Nos. 15 and 16, which sought documents showing all transactions in which Liu received or disbursed at least 500,000 RMB since January 1, 2014. The court found the eight-year period, the 500,000 RMB threshold, and the request for all such transactions insufficiently connected to the allegations and likely to include extensive irrelevant information.

The court denied Requests Nos. 17 through 21, which sought documents showing all transactions since January 1, 2014, between Liu and five identified people: Hongjun Zhang, Ru Huang, Li Sun, Baohong Chen, and Yiran Zhao. The requests had no meaningful time or subject-matter limits and could include transactions unrelated to Fang’s allegations. The court also rejected the apparent assumption that all transactions between Liu and those people involved Fang’s money.

Finally, the court denied Request No. 23, which sought Liu’s complete tax returns for tax years 2011 through 2019. The court found that the complaint did not explain why 2011 was the proper starting year or why 2019 was a meaningful ending year. It also found Fang’s stated purpose—to determine whether Liu reported the money as income—of questionable relevance because individual federal tax returns generally group income into broad categories and might not reveal the information Fang sought.

Disposition

The court denied Fang’s request to compel the documents and information at issue, including Requests Nos. 9 through 23 identified in the order. The order did not resolve the merits of Fang’s underlying claims. The court also instructed the parties and their counsel to cooperate more effectively and to seek court intervention in discovery disputes only after thoroughly discussing them in good faith.