United States Securities and Exchange Commission v. Collector's Coffee Inc.
- Victor Marrero
- 1:19-cv-04355
- U.S. District Court · Southern District of New York
- 4
In Securities and Exchange Commission v. Collector’s Coffee, Judge Gorenstein declined to expand most defendants’ deposition limits and clarified the discovery extension.
Mykalai Kontilai, Collector Coffee, Inc., and Veronica Kontilai were affected by the limits on additional depositions. Kontilai and Collector Coffee, Inc. could pursue depositions of Securities and Exchange Commission witnesses only if the court later permitted them; the order did not authorize most requested additional depositions.
What happened
In Securities and Exchange Commission v. Collector’s Coffee Inc., defendants sought permission to take more than the usual 10 depositions and asked about a discovery-deadline extension. The application was filed after the court’s August 10, 2020 deadline and shortly before discovery closed.
Mykalai Kontilai and Collector Coffee, Inc. argued that later discovery and a change in lawyers justified more depositions. Veronica Kontilai argued that, as the only relief defendant, she should be treated differently. The court found that the explanations were inadequate and that the requested depositions were not sufficiently justified.
United States Magistrate Judge Gabriel W. Gorenstein declined to permit the defendants to exceed the 10-deposition limit, except for Securities and Exchange Commission witnesses the court might later allow them to depose. The court also clarified that an earlier extension extended discovery deadlines only; it did not decide whether the deposition limit applied.
The detailed version
- United States Securities and Exchange Commission v. Collector's Coffee Inc. · No. 1:19-cv-04355
- Victor Marrero
- Nov. 30, 2020
Background
The court considered letters docketed as ## 625, 627, 631, 633, 634, 638, 644, and 659. Mykalai Kontilai and Collector Coffee, Inc. sought permission to take depositions beyond the presumptive limit of 10 depositions under Federal Rule of Civil Procedure 30(a)(2)(A)(i). An earlier July 8 order required any application for additional depositions to be filed by August 10, 2020, after consultation with the parties, and to fully explain the need for each additional deposition.
The application was filed on November 9, 2020, three months after that deadline and about one week before the discovery deadline. The defendants said they could not determine which additional depositions were necessary until recently because of later document production and depositions. They also cited the withdrawal of Kontilai’s attorneys and the appearance of new counsel. The court found that these explanations did not justify the delay. It noted that 18 of the 22 proposed witnesses had already been identified in an earlier request, including four witnesses concerning Gail Holt’s prior inconsistent statements.
Court’s analysis
The court rejected the argument that the filing of a criminal case against Kontilai affected the analysis under Rule 26(b)(1). That rule requires consideration of the importance of the discovery to resolving claims or defenses and whether its burden or expense outweighs its likely benefit.
The court treated five listed Securities and Exchange Commission witnesses separately because a related protective-order motion had recently been fully briefed. It stated that Kontilai could exceed the 10-deposition limit to depose any Securities and Exchange Commission witnesses the court later permitted, subject to a possible claim that those witnesses were cumulative.
As to the remaining 17 witnesses, the court found that the defendants had not adequately explained the importance of many of the proposed depositions. It concluded that three of the four attorneys listed as witnesses to Holt’s prior statements could be removed from the request. The Securities and Exchange Commission also stated that four listed witnesses did not count toward the 10-deposition limit, and no party disputed that point. The court therefore treated the defendants as effectively seeking depositions of 10 witnesses, which was within the existing limit.
Veronica Kontilai separately sought to depose 10 additional witnesses, arguing that she was the only relief defendant and should receive different discovery treatment. The court explained that being a relief defendant meant only that the Securities and Exchange Commission would not seek to hold her liable for the claims against the other defendants; it did not mean that her interests were not aligned with theirs. The court also found that she had not timely sought depositions, had not shown why the deadline should be extended, and had not addressed the Rule 26(b)(1) factors.
Ruling
United States Magistrate Judge Gabriel W. Gorenstein did not issue an order allowing the defendants to exceed the presumptive 10-deposition limit, except for Securities and Exchange Commission witnesses that the court might permit in a future decision on the protective-order application. The court likewise found no basis to allow Veronica Kontilai to exceed the limit.
The court clarified that its earlier extension was intended only to extend discovery deadlines. It was not intended to decide whether the 10-deposition limit applied. The court’s order on that issue was the ruling described above. The opinion does not state a separate disposition for every docketed letter.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.