Wexler v. Allegion Limited

Background

The caption covers two actions involving Elias Wexler, related Zero entities, Allegion (UK) Limited, Allegion plc, Schlage Lock Company LLC, Jacob Wexler, and Legacy Manufacturing LLC. The dispute arose after Wexler sold his former company, Zero, to Schlage, and Wexler and Jacob were later terminated by Schlage. Wexler alleges that Schlage defamed him by telling industry insiders that he was fired for cause, causing losses involving business, teaching, speaking, and expert-witness opportunities. Schlage asserts tortious-interference and related claims against the Legacy Defendants concerning Wexler’s non-compete agreement.

Earlier Discovery Order

In an August 25, 2020 order, the court denied in part and granted in part motions by the Wexler Parties. The motions sought to compel Schlage to provide additional discovery and to obtain a protective order against some of Schlage’s discovery requests.

The Wexler Parties had sought a further response to document request No. 18, which asked for documents and communications concerning AAA Architectural Hardware, Jacob, Wexler, or Legacy. They argued that Schlage had not produced documents that it should have produced. Schlage responded that additional AAA documents were irrelevant and that it would be unduly burdensome to search the email files of every other employee after already searching 13 custodians’ files.

The Wexler Parties also sought protection from requests for Wexler’s personal and business tax returns, W-2 forms, 1099 forms, and other financial records. They argued that the requests were irrelevant, vague, overbroad, and unduly burdensome. Schlage argued that the records were relevant because Wexler sought damages for alleged lost income and opportunities.

The August 25 order denied the request for a further response to document request No. 18 and denied the request for protection from Schlage’s requests for Wexler’s financial records. Regarding request No. 18, the court found that the examples offered by the Wexler Parties were irrelevant because they concerned updates about Zero products sent to Jacob while he worked at AAA, rather than the non-compete claims. Regarding the financial records, the court found that Wexler’s financial information was relevant to his damages claims and could not be obtained from another source.

Motion for Clarification or Reconsideration

The Wexler Parties moved under Local Civil Rule 6.3 and Rules 59(e) and 60(a) of the Federal Rules of Civil Procedure. A motion for reconsideration under Local Civil Rule 6.3 or Rule 59(e) may be granted when the court overlooked controlling law or facts that could reasonably have changed the result. The court described reconsideration as an extraordinary remedy that should be used sparingly. Rule 60(a) permits clarification consistent with the original judgment, but it does not permit the court to change the parties’ substantive rights or adopt a new view of the dispute under the label of clarification.

Document Request No. 18

The court denied reconsideration concerning document request No. 18. The Wexler Parties argued for the first time that Schlage had conceded the relevance of the requested documents by mentioning AAA in its pleadings, discovery requests, and disclosures and by producing some AAA-related documents. The court held that reconsideration was not a vehicle for arguments that could have been raised earlier.

The court also rejected the argument that request No. 18 was plainly relevant. It explained that the August 25 order had not found the entire request irrelevant. Instead, the court had found that the examples offered to show that Schlage failed to produce responsive documents were irrelevant. The Wexler Parties’ additional argument that the examples showed Schlage knew Jacob was selling Zero products repeated an argument the court had already considered and rejected. The court therefore denied the motion with respect to request No. 18.

Wexler’s Tax Returns

The court also denied reconsideration concerning Wexler’s personal tax returns. The Wexler Parties argued that Schlage had not shown relevance or a compelling need and that the court had failed to apply controlling precedent. The court disagreed, explaining that the August 25 order had cited and distinguished the cases on which the Wexler Parties relied.

The court again concluded that the tax returns were clearly relevant to Wexler’s damages claims and that Schlage had a compelling need for them because the Wexler Parties had not produced financial documents before the August 25 order. The court rejected the argument that producing W-2 forms, 1099 forms, and other financial documents after the earlier order eliminated the need to produce the tax returns. It characterized that argument as new and as an improper attempt to appeal the earlier ruling rather than a proper request for clarification or reconsideration.

Disposition

Judge Edgardo Ramos denied the Wexler Parties’ motion for clarification or reconsideration in its entirety and directed the Clerk to terminate the motion, docket entry 161. The opinion does not resolve the underlying defamation, tortious-interference, or related claims.