Securities and Exchange Commission v. Rayat
- Lewis Liman
- 1:21-cv-04777
- U.S. District Court · Southern District of New York
- 2
In Securities and Exchange Commission v. Rayat, Judge Liman ordered more briefing before deciding the SEC’s motion to compel allegedly privileged communications.
The SEC and defendants Harmel S. Rayat, Bhogal, and Sidhu, concerning communications with RenovaCare’s counsel and the defendants’ attorney-client privilege claims.
What happened
In Securities and Exchange Commission v. Rayat, the Securities and Exchange Commission asked the court to require communications with RenovaCare’s counsel, Mr. Sierchio, to be produced. The communications had been shared with defendants Harmel S. Rayat, Bhogal, and Sidhu, who opposed the request and claimed attorney-client privilege, which can protect confidential lawyer-client communications.
The court said the defendants had to support their privilege claim with evidence and ordered additional written arguments. The parties must address whether the companies shared a common legal interest, whether sharing the information with Kalen Capital Corporation preserved the privilege, whether Rayat and Sidhu received the communications as Kalen employees or agents, and whether Mr. Sierchio was acting as outside counsel rather than as a director.
Judge Liman did not decide the motion to compel in this order. He set deadlines for further briefing and said the court would decide the motion on the papers; the issue concerning Bhogal would be decided using the materials already submitted.
The detailed version
- Securities and Exchange Commission v. Rayat · No. 1:21-cv-04777
- Lewis Liman
- July 6, 2023
Background
The Securities and Exchange Commission moved to compel production of communications with RenovaCare’s counsel, Mr. Sierchio, that had been shared with defendants Harmel S. Rayat, Bhogal, and Sidhu. The defendants withheld the communications based on attorney-client privilege. The privilege generally protects qualifying confidential communications between a lawyer and client for the purpose of obtaining or providing legal advice.
Court’s Analysis
The court stated that the party asserting attorney-client privilege bears the burden of establishing its essential elements. It also stated that conclusory assertions are insufficient to meet that burden.
The court required further briefing concerning the defendants’ privilege claim for documents shared with Rayat and Sidhu. It also required briefing on the SEC’s argument that the communications occurred while Mr. Sierchio was acting as a director rather than as counsel.
The additional briefing must address whether RenovaCare and Kalen Capital Corporation shared a common legal interest; whether sharing RenovaCare privileged information with Kalen would preserve the privilege under Music Sales Corp. v. Morris, including whether that decision remains valid and applies here; whether Rayat and Sidhu received the communications as Kalen employees or agents; and whether Mr. Sierchio was acting as outside counsel and communicating or providing legal advice.
Order and Effect
The court ordered the defendants to file a memorandum of no more than ten pages and supporting evidence by July 13, 2023. The SEC could respond with a memorandum of no more than ten pages and supporting evidence by July 20, and the defendants could file a reply of no more than five pages by July 24. The court stated that evidence and arguments had to be submitted with the opening papers and that it intended to resolve the pending motion on the papers.
The court said it would resolve the motion as to Bhogal based on the briefing and evidence already submitted with the letter motion and its response. The order did not grant or deny the SEC’s motion to compel.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.