Richards v. Kallish

Background

The opinion resolved two letter motions: Nicole Richards’s motion to compel discovery and Defendants’ motion to stay discovery while their partial motion to dismiss Count One of the Second Amended Complaint was pending.

Motion to Compel

The court denied Richards’s motion to compel in its entirety.

- Capitalization table: The request for an unredacted capitalization table was denied as moot because Defendants had agreed to provide an updated table with only the investor names redacted. To the extent Richards sought an order requiring the investor names to be revealed, that request was denied because she had not adequately explained why the names were needed at that stage of fact discovery. - Financial statements from 2016 through 2018: This request was denied as moot because Defendants had agreed to produce Everyone’s Earth’s balance sheets, cash-flow statements, and income statements for those years. - Financial statements from 2019 through 2023: The request was denied because Defendants stated that those statements did not exist, and the court could not order production of nonexistent documents. The court directed Defendants to provide a sworn declaration stating that the statements did not exist. - Bank statements: The request was denied because Richards had not explained why the statements were relevant to her remaining claims or why producing them was necessary and proportional to the needs of the case, given the other financial information Defendants had agreed to produce.

Motion to Stay Discovery

Defendants asked the court to stay, or temporarily pause, discovery while their partial motion to dismiss Count One was pending. The court granted in part and denied in part that motion. Fact discovery was not stayed. Expert discovery was temporarily stayed pending resolution of the partial motion to dismiss.

The court explained that the pending motion concerned only Count One and therefore would not dispose of the entire action. Most remaining fact discovery concerned the breach-of-fiduciary-duty claim, which was not subject to the dismissal motion. The court also found that completing the remaining portion of Richards’s deposition would take about two hours and would not impose enough burden or expense to justify pausing fact discovery.

The court reached a different conclusion about expert discovery. It found that the scope of expert discovery could change if Count One were dismissed, particularly because one of Richards’s proposed experts appeared directly relevant to that count. The court also found that temporarily pausing expert discovery would not prejudice Richards because she could continue working with her experts and preparing their reports while the dismissal motion was pending.

The Clerk of Court was directed to terminate the two letter motions.