Tecku v. YieldStreet Inc.
- Victor Marrero
- 1:20-cv-07327
- U.S. District Court · Southern District of New York
- 3
In Tecku v. YieldStreet Inc., Judge Aaron granted in part and denied in part Plaintiffs’ motion to compel discovery.
Michael Tecku and the other plaintiffs, and YieldStreet Inc. and the other defendants, because the order requires some document production, directs further discussions about narrowing discovery, and permits possible renewal of two denied requests.
What happened
In Michael Tecku et al. v. YieldStreet Inc. et al., the plaintiffs asked the court to require the defendants to produce additional documents.
The court ordered the defendants to produce documents about certain investment offerings identified in the amended complaint, including a rideshare fleet expansion fund and an art portfolio. The parties must also discuss narrowing requests for documents about other defaults. The court denied without prejudice the request for documents about general diligence guidelines and policies concerning investor disclosures or principal loss, while requiring the defendants to clarify whether such materials exist.
Stewart D. Aaron, the United States Magistrate Judge, allowed the plaintiffs to renew those denied discovery requests if the defendants say the materials exist but refuse to produce them.
The detailed version
- Tecku v. YieldStreet Inc. · No. 1:20-cv-07327
- Victor Marrero
- Dec. 22, 2023
Background
The plaintiffs filed a letter motion asking the court to compel the defendants to produce documents in response to several discovery requests. The court applied principles of relevance and proportionality, meaning that discovery had to relate to the case and be reasonable in scope.
Ruling on Requests 28 and 34
The court granted in part and denied in part the motion concerning Request Nos. 28 and 34. It ordered the defendants, by January 5, 2024, to produce any not-yet-produced documents concerning the specific offerings identified in the Corrected Amended Class Action Complaint. The order identified the rideshare fleet expansion fund and the “Post War & Contemporary Art” portfolio as examples.
The court found that the plaintiffs’ broader request for documents concerning other defaults before the offerings at issue was overbroad and not proportional as written. The parties were directed to continue meeting and conferring to narrow the offerings covered by Request No. 28 and, as appropriate, Request No. 34. If they could not agree, they were required to file a joint letter stating their positions by January 5, 2024.
Ruling on Requests 12 and 35
The court denied without prejudice the motion to compel concerning Request Nos. 12 and 35. The court accepted the defendants’ representations that YieldStreet had no generic or generally applicable due-diligence guidelines for its offerings and had no policies concerning when an investor disclosure was triggered by a borrower default.
By December 29, 2023, the defendants had to tell the plaintiffs whether they maintained any general underwriting or diligence guidelines, or any policies or procedures concerning the determination of principal loss, and whether they would produce those materials. If such materials existed and the defendants refused to produce them, the plaintiffs could renew the motion to compel as to Request Nos. 12 and 35 by January 5, 2024.
Effect of the Order
The order resolved the plaintiffs’ discovery motion by granting it in part and denying it in part. It required specified production and further discussions, while leaving open the possibility of renewing the denied requests under the conditions stated by Judge Stewart D. Aaron.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.