Travelex Currency Services, Inc. v. Puente Enterprises, Inc.
- Edgardo Ramos
- 1:18-cv-01736
- U.S. District Court · Southern District of New York
- 12
In Travelex Currency Services v. Puente Enterprises, Judge Ramos partly allowed discovery, denied broader requests and sanctions, and ordered conflict disclosures and a new schedule.
Puente Enterprises, Travelex Currency Services, James C. Hewitt, and their counsel. The ruling limits some discovery, permits other discovery concerning the termination of Puente’s contract, denies sanctions, and requires conflict disclosures and a new discovery schedule.
What happened
In Travelex Currency Services, Inc. v. Puente Enterprises, Inc., Puente sought permission to ask former Travelex chief executive James C. Hewitt more questions during discovery and requested sanctions against Travelex’s and Hewitt’s lawyer. The dispute involved Puente’s contract claims and defenses concerning Travelex’s termination and treatment of Puente.
The court granted the discovery motion in part and denied it in part. It allowed questions about whether discrimination affected Travelex’s termination of Puente’s contract, but denied broader questions about discrimination unrelated to the Travelex-Puente relationship. The court also denied sanctions.
Judge Edgardo Ramos found that the deposition conduct did not amount to the extreme conduct generally required for sanctions. He directed counsel to report steps taken to address any potential conflict involving Hewitt’s representation and ordered the parties to submit a new schedule ending discovery by October 8, 2020.
The detailed version
- Travelex Currency Services, Inc. v. Puente Enterprises, Inc. · No. 1:18-cv-01736
- Edgardo Ramos
- Aug. 17, 2020
Background
Puente Enterprises, Inc. (PEI) had asserted a contract counterclaim against Travelex Currency Services, Inc. It alleged that Travelex improperly terminated a contract and changed procedures governing their relationship. PEI also asserted that Travelex breached the implied duty of good faith and fair dealing. PEI’s third-party claims against James C. Hewitt, a former Travelex chief executive officer, were for defamation.
During Hewitt’s deposition, PEI’s lawyer asked about Hewitt’s professional history and then sought information about Travelex’s conduct, including a pattern or practice of discrimination that Hewitt had mentioned. Travelex’s and Hewitt’s lawyer objected to some questions and instructed Hewitt not to answer others. The court later raised the possibility of a conflict because the same lawyer represented both Travelex and Hewitt, and it permitted PEI to make further discovery requests.
Discovery ruling
Under Federal Rule of Civil Procedure 26(b)(1), discovery may cover nonprivileged information that is relevant to a claim or defense and proportional to the needs of the case. The court held that PEI could not pursue one requested area because the request was speculative and unlikely to lead to admissible evidence. The court explained that PEI could ask about manipulation of records or metrics associated with PEI’s own contract, including whether Hewitt witnessed or participated in such conduct.
The court granted in part and denied in part PEI’s request to investigate discrimination. It granted permission to explore whether discrimination played a role in Travelex’s termination of PEI’s contract. The court reasoned that this information could bear on whether Travelex acted in bad faith when exercising contractual discretion, because PEI had asserted a defense and counterclaim involving the implied duty of good faith and fair dealing. The court denied in part permission to investigate a broader pattern or practice of discrimination unrelated to Travelex’s relationship with PEI. It emphasized that the case remained a contract dispute, not a discrimination claim under Title VII or another statute.
Sanctions ruling and directives
PEI moved for sanctions under Rule 30(d)(2), which allows sanctions against a person who impedes, delays, or frustrates a fair deposition. The court denied the sanctions motion. It found that the conduct did not reach the level of extreme conduct generally required for sanctions, noting that the deposition continued for some time, PEI would have an opportunity to finish it, and some of the requested topics were irrelevant.
The court directed counsel for Hewitt and Travelex to submit declarations by August 21, 2020, describing steps taken to identify and reduce any potential conflict. It also directed the parties to submit a new discovery schedule ending discovery no later than October 8, 2020. Judge Edgardo Ramos directed the Clerk of Court to terminate motions 103 and 108.
Read the full 12-page opinion on CourtListener, the free public archive maintained by the Free Law Project.