Securities and Exchange Commission v. Rayat

Background

Defendant Jatinder Bhogal moved under Federal Rule of Civil Procedure 26(b)(2)(C) for a protective order relieving him from responding to requests for admission served by the Securities and Exchange Commission (SEC). The SEC served 703 requests, or 1,166 requests when subparts were included.

Requests for admission are written discovery requests asking a party to admit or deny stated facts or the authenticity of documents. The requests here concerned jobs or positions held by Bhogal or other defendants, conversations and communications, securities transactions, Bhogal’s personal knowledge, and documents produced in discovery. Nearly all cited evidence supporting the facts at issue.

Court’s Analysis

The court held that the number of requests did not justify a protective order. Federal Rule of Civil Procedure 26 does not set a numerical limit on requests for admission, and the court described the case as a complex securities-fraud case that would rely in part on circumstantial evidence.

The court rejected Bhogal’s argument that the requests improperly required him to review evidence and affirm the SEC’s liability theories. It explained that reviewing evidence is part of the purpose of requests for admission, and that a response consistent with the SEC’s theory does not make a request improper.

The court also rejected Bhogal’s argument that the requests sought information outside his firsthand knowledge. It stated that many requests concerned matters he should personally know. For other requests, he could say that he lacked sufficient knowledge or information, but only after making the reasonable inquiry required by Rule 36(a)(4). The court noted that the SEC had directed him to information that should help him answer.

Although requests for admission cannot properly require admissions about hypothetical questions or pure questions of law, the court said Bhogal had not identified any requests that did so. The court also found that the requests concerning events before the period alleged in the complaint were limited, supported by public or discovery documents, and related to discoverable information.

Finally, the court concluded that answering the requests was more efficient than covering the same matters in a deposition. It stated that the requests would help narrow the issues for trial and would require a reasonable inquiry that a deposition would not impose in the same way. The court noted that it had not reviewed every individual request.

Ruling

The court granted Bhogal’s request for an extension of time to answer the requests for admission to 60 days after they were served. In all other respects, it denied Bhogal’s motion. The clerk was directed to close the motion.

Judge Lewis J. Liman signed the memorandum and order on April 24, 2023.