Coventry Capital US LLC v. EEA Life Settlements, Inc.

Background

Coventry Capital US LLC brought claims against EEA Life Settlements Inc. (EEA Inc.), Vincent Piscaer, and Hiren Patel. The claims that survived an earlier motion to dismiss were breach of contract against EEA Inc., fraud or intentional misrepresentation, and aiding and abetting fraud or intentional misrepresentation against Piscaer and Patel. Coventry alleged that the defendants undermined negotiations concerning a contract to sell a portfolio of life insurance policies to Coventry.

This order concerned discovery, the pretrial process for obtaining relevant, nonprivileged information. The disputes involved approximately 56,000 documents delivered to EEA Life Settlements Fund PCC Limited but believed to concern EEA Fund Management (Guernsey) Limited; additional custodians and Mimecast data for electronic discovery; EEA Inc.’s privilege and redaction decisions; attorneys’-eyes-only confidentiality designations; and Coventry’s interrogatories seeking information about policy proceeds and the portfolio’s value.

Guernsey Manager Documents

EEA Inc. asked that the Guernsey Manager documents be removed from technology-assisted review, a computer-supported document-review process, and instead be reviewed manually. It also sought to limit the production to documents from January 1, 2017 forward. Coventry sought to keep the documents in the technology-assisted review process.

The court declined to require the documents to be added to the technology-assisted review at that stage of discovery. It ordered EEA Inc. to review and produce the Guernsey Manager documents manually by January 8, 2021.

Phase II Discovery

The court ordered Phase II discovery to include a search of Barry John’s electronically stored information. It excluded the other six proposed custodians: Andrew Harrop, William Simpson, Mark Clubb, Mark Colton, David Jeffreys, and Steve Burnett. The court found that Coventry had shown that John had taken an active role in internal discussions about the contract, but had not shown that the other six custodians would provide unique, relevant, noncumulative information.

The court also ordered the parties’ previously agreed search terms to be applied to the Mimecast data. After a hit report is generated, the parties must meet and confer about whether potentially responsive data should be produced and, if so, on what schedule. The court did not make a final ruling about production from Mimecast at that stage.

The court denied Coventry’s request to expand document searches to the period before January 1, 2017. It found that the burden and expense of searching the earlier period outweighed the speculative relevance identified by Coventry.

Privilege and Redactions

Coventry requested a new, itemized privilege log for all documents withheld as privileged. A privilege log identifies information about withheld documents so the opposing party can evaluate the claim. The court found that requiring an entirely new log would be burdensome, particularly because the parties had agreed to use categorical logs.

Instead, the court ordered EEA Inc. to provide, by December 21, 2020, the names of the in-house and outside attorneys involved in communications listed on the categorical privilege log and to identify which logged communications were sent by those attorneys. The parties were required to meet and confer about particular communications. If they could not resolve the dispute, they could propose that the court review a sample of no more than 20 privileged documents privately.

The court directed EEA Inc. to remove redactions based on irrelevance after meeting with Coventry about the order and timing of reproducing the documents. It also required the parties to meet and confer about attorneys’-eyes-only designations. If disputes remained by January 22, 2021, the parties were required to file a joint letter stating their positions.

Interrogatories and Disposition

Coventry sought supplemental answers from EEA Inc. about the amounts, dates, recipients, and consideration for transfers of proceeds from 63 policy maturities since May 2017, as well as the current net asset value of each policy. EEA Inc. opposed the request, arguing that it had already provided sufficient financial information.

The court found the requested information extraneous to and cumulative of information already provided and concluded that Coventry had not shown how the answers would address the threshold factual questions previously identified by Judge Victor A. Marrero. The court therefore denied Coventry’s request to compel supplemental interrogatory responses.

Overall, the order directed specific additional discovery and document-handling steps, denied Coventry’s request for pre-2017 discovery, and denied its request for supplemental interrogatory responses. It did not resolve the underlying contract, fraud, or aiding-and-abetting claims.