Chen-Oster v. Goldman, Sachs & Co. LLC.
- Analisa Torres
- 1:10-cv-06950
- U.S. District Court · Southern District of New York
- 12
In Chen-Oster v. Goldman, Sachs & Co., Judge Torres overruled objections and affirmed arbitration, privilege, and discovery orders.
The plaintiffs, the defendants, and class members affected by the equity award agreements. The ruling required certain affected class members to receive an opportunity to opt out of arbitration, while leaving in place the challenged privilege and discovery rulings.
What happened
In Chen-Oster v. Goldman, Sachs & Co., the plaintiffs and defendants challenged several orders issued by Magistrate Judge Robert W. Lehrburger in this class action. The challenges concerned arbitration agreements, privileged documents, and requests for additional discovery.
The court rejected all objections. It affirmed the order finding certain arbitration agreements enforceable and compelling arbitration, including a remedy allowing some class members to opt out of arbitration; affirmed the rulings protecting diversity-committee white papers and data underlying an equal-pay study as privileged; and affirmed the denials of additional discovery about senior executives and compensation-related materials.
Judge Analisa Torres applied the rule requiring her to change a magistrate judge’s non-final order only if it was clearly wrong or contrary to law. She concluded that none of the challenged orders met that standard and overruled the parties’ objections.
The detailed version
- Chen-Oster v. Goldman, Sachs & Co. LLC. · No. 1:10-cv-06950
- Analisa Torres
- Sept. 15, 2021
Background
The parties objected to four sets of orders issued by Magistrate Judge Robert W. Lehrburger. The March 2020 Order concluded that Goldman did not waive its right to compel arbitration, found four categories of agreements containing arbitration clauses enforceable, and ordered a remedy for equity award agreements. The August 2020 Order treated certain diversity-committee white papers as protected by attorney-client privilege. The November 2020 Order denied a request for additional discovery about senior executives and alleged “boys-club” evidence. The December 2020 Order denied a request for data underlying an equal-pay study because the data was protected by attorney-client privilege.
Standard of Review
Under Federal Rule of Civil Procedure 72(a), a district judge reviewing a magistrate judge’s order on a non-final matter may modify or set aside the order only if it is clearly erroneous or contrary to law. An order is clearly erroneous when the reviewing court has a firm conviction that the magistrate judge made a mistake. An order is contrary to law when it fails to apply, or misapplies, relevant law or procedural rules. Judge Torres rejected the plaintiffs’ request for a less deferential review of the March 2020 Order.
March 2020 Arbitration Order
The plaintiffs argued that Goldman waived arbitration, that three categories of agreements warranted relief under Rule 23, that the equity award agreements were unconscionable, and that the opt-out remedy for those agreements was inadequate. Judge Torres rejected all four objections. She found no clear error in Judge Lehrburger’s conclusions that Goldman repeatedly asserted its intent to arbitrate, moved to compel arbitration when it could, and did not cause unnecessary expense by waiting.
Judge Torres also found no clear error in denying Rule 23 relief for three categories of agreements. Although those agreements did not disclose information about the pending class action, Judge Lehrburger had considered the total circumstances and found no evidence of deception, coercion, targeting of class members, or imposing arbitration without agreement or additional consideration.
The court likewise upheld the conclusion that the equity award agreements were not substantively unconscionable. However, Judge Lehrburger had found that those agreements were obtained through a confusing and potentially misleading electronic procedure that did not make the expanded arbitration provision clear. Under Rule 23, he ordered notice allowing affected class members to opt out of arbitration and remain in the action. Judge Torres found no clear error in that ruling and rejected Goldman’s arguments that the remedy was improper or that the Federal Arbitration Act displaced Rule 23(d). The March 2020 Order was AFFIRMED.
August 2020 Privilege Order
The plaintiffs argued that diversity-committee white papers were not protected by attorney-client privilege. Judge Torres reviewed the documents and related materials and concluded that the record supported Judge Lehrburger’s determination that the documents were prepared at counsel’s direction to assist in providing legal services. The August 2020 Order was AFFIRMED.
November 2020 Discovery Order
The plaintiffs sought additional documents from senior executives. Judge Lehrburger denied the request because the plaintiffs had not shown a direct connection between those executives and the three employment processes at issue. Judge Torres agreed that evidence showing general involvement in diversity initiatives did not establish that the executives directly controlled or made decisions about the challenged processes. The November 2020 Order was AFFIRMED. The court also stated that it did not interpret that order as denying a request to amend the trial plan; any objection to an earlier trial-plan order was untimely.
December 2020 Privilege Order
The plaintiffs challenged the protection given to data underlying an equal-pay study. Goldman represented that outside counsel directed and supervised the data collection to obtain legal advice. Judge Torres rejected the argument that publicly disclosing the study’s ultimate finding waived privilege over the underlying data. She concluded that the data was protected by attorney-client privilege and found no clear error in Judge Lehrburger’s ruling. The December 2020 Order was AFFIRMED.
Disposition
Judge Torres OVERRULED the parties’ objections to the March, August, November, and December 2020 Orders.
Read the full 12-page opinion on CourtListener, the free public archive maintained by the Free Law Project.