La Belle v. Barclays Capital Inc.

Background

Brian La Belle’s complaint alleges that Barclays terminated his employment in retaliation for reporting alleged misconduct at Barclays. One alleged incident involved a negotiation between Barclays and Blackstone concerning a loan for Blackstone’s use in procuring a hotel chain. La Belle alleges that Eric Wu, one of his supervisors, directed Barclays employees to manipulate data and understate the risk of the loan. He also alleges that Blackstone later hired Wu as a reward for the alleged misconduct.

La Belle served Blackstone, which was not a party to the case, with a subpoena seeking documents and communications about its hiring and recruitment of Wu, including communications with Wu and his agents or representatives. Blackstone searched electronically using terms agreed to by La Belle, reviewed the responsive documents, and told La Belle that it found no documents connecting Wu’s hiring to the transaction described in the complaint. Blackstone declined to produce the documents, asserting that unrelated hiring materials were irrelevant and that the materials contained sensitive information about salary offers, other candidates, and its internal hiring process.

Discovery standard

The court explained that a subpoena under Federal Rule of Civil Procedure 45 must satisfy Rule 26(b)(1)’s requirements that discovery be relevant to a claim or defense and proportional to the needs of the case. The court rejected the idea that discovery automatically includes anything merely “reasonably calculated” to lead to admissible evidence. It emphasized that the court must consider whether the burden or expense of the requested discovery outweighs its likely benefit, giving particular weight to the burden on a non-party.

Ruling

The court found that the Barclays–Blackstone negotiations and whether they were conducted properly were relevant to La Belle’s claims. It found Wu’s departure after the negotiations much less relevant and balanced the limited potential value of the requested hiring records against the burden and confidentiality concerns identified by Blackstone.

The court narrowed the subpoena so that Blackstone had to produce internal documents that refer to or even mention both Wu’s hiring and the Barclays–Blackstone negotiation or transaction, if any such documents existed. The court stated that Blackstone’s assertion that it had found no documents “connecting” the hiring to the transaction was narrower than the required standard.

The court also ruled that Blackstone had not sufficiently justified withholding emails sent to Wu because those materials were not maintained exclusively within Blackstone’s internal systems. To the extent those emails were not available for production by Wu, Blackstone had to produce emails to or from Wu relating to his hiring, with permission to redact salary terms.

The court denied La Belle’s cursory request for sanctions against Blackstone as unsupported. It did not address the separate text-message issue because La Belle raised it for the first time in a reply letter and there was no indication that the parties had conferred about it.