Iannuzzi v. Lu

Background

John Nicholas Iannuzzi submitted a letter application asking the court to compel Wenzhao Lu to produce additional documents. The action includes contract and tort claims. Iannuzzi seeks what he describes as his fair share of an interest in Nanshan Memorial Medical Institute and its subsidiaries.

The parties signed a one-page agreement on March 9, 2010, providing that they would share equally any interest held by either party in Nanshan and its subsidiaries, including entities developed directly or indirectly by Nanshan or Lu. Iannuzzi alleges that Lu Daopei Hospital, which he says was formed after the agreement, is a subsidiary or subdivision of Nanshan. He also alleges that Lu owns between 25% and 50% of Nanshan, Lu Daopei Hospital, and other affiliated entities, and that the entities may have been sold in 2021.

Discovery Requests

Discovery is the pretrial exchange of information and documents relevant to the claims or defenses. Iannuzzi sought documents concerning ownership, valuation, and the potential sale of Nanshan and Lu Daopei Hospital. The court found that Requests B, D, E, M, and N sought relevant documents and that the requests, as limited by the order, were not disproportionate to the needs of the case under Federal Rule of Civil Procedure 26(b)(2).

The court ordered Lu, to the extent he had not already done so, to produce all non-privileged documents in his possession, custody, or control that were dated or created on or after March 9, 2010, and responsive to Requests B, D, E, M, and N. The documents had to be produced by March 21, 2023.

Requests Denied

The court denied discovery under Requests C, F, G, H, I, Q, and R. Request C concerned Avalon Globocare Corp., which was not mentioned in the pleadings, and the court found that Iannuzzi had not provided enough support for that discovery.

Request F sought all bank statements since January 2021 for accounts belonging to Lu and three family members. The court found that request extremely broad and unjustifiably intrusive as to the non-party family members. Request G sought Lu family brokerage-account records without a date limit. The court described the request as even less justified.

Requests H and I sought Lu’s and Grace Lu’s 2017–2022 tax returns. Although tax returns are not privileged, the court explained that a party generally must show a compelling need for them because of their sensitive nature and because the information may be available elsewhere. The court found that Iannuzzi had not made that showing.

The court concluded that Request Q was not properly a document request because it asked Lu to identify potential purchasers of Lu Daopei Hospital. Request R was unintelligible and, depending on how it was interpreted, either duplicated other requests or lacked a clear showing of relevance.

Arguments About the Agreement

Lu argued that he had already produced documents concerning Nanshan and that he should not have to produce documents concerning Lu Daopei Hospital because, according to his position, the hospital was formed by his father in 2001, before Nanshan existed, and therefore was not Nanshan’s subsidiary. Lu also argued that the agreement was unenforceable because Iannuzzi was allegedly his lawyer when they signed it and because Lu testified that they signed it while intoxicated in a darkly lit bar.

The court rejected those arguments as reasons to deny discovery at this stage. Whether Lu Daopei Hospital was a subsidiary of Nanshan was directly disputed and therefore appropriate for discovery. The court also noted that neither party had presented a merits motion or admissible evidence sufficient to resolve whether the agreement was enforceable. It therefore declined to prejudge Lu’s counterclaim seeking a declaration that the agreement was void and unenforceable.

Disposition

Judge Barbara Moses granted in part and denied in part Iannuzzi’s discovery application. Lu was required to produce the specified documents by March 21, 2023, while Requests C, F, G, H, I, Q, and R were not included in the production order. The order also stated that fact discovery otherwise closed on March 3, 2023, and that the parties’ summary-judgment motions were due 30 days after the close of fact discovery, which the order treated as 30 days after March 21, 2023. The Clerk was directed to close two other motions because earlier orders had already resolved them.