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Current Developments in the Commercial Divisions of the
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Posted: February 1, 2017

Court Orders Production of Pre-Litigation Work Product

On January 18, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in Bank of N.Y. Mellon v. WMC Mortgage, LLC, 2017 NY Slip Op. 30139(U), ordering the production of pre-litigation work product, explaining:

The instant motions come before this court in a unique posture. Unlike any case found by the court or any case cited by the parties, the plaintiffs reunderwriting expert report is not based exclusively on that expert’s independent analysis and methodology. Rather, plaintiffs expert relied heavily on the work and methodology of Digital Risk’s pre-litigation reunderwriting. WMC explains:
Plaintiffs re-underwriting expert Mr. Ira Holt, Jr. adopted wholesale the presuit re-underwriting commissioned by the Certificateholders, even though Mr. Holt had little, if any, knowledge of what Digital Risk did to reach its conclusions or of the assumptions upon which they were based. Digital Risk’s methodologies were based on specific directions given by the Certificateholders and Quinn Emanuel. According to WMC, the only way for it to vet the credibility of plaintiffs expert and the methodologies he relied on is to vet the methodologies employed by Digital Risk. While Digital Risk witnesses have been deposed, by virtue of the laxity of its document retention policies, the communications between Digital Risk and the Certificateholders cannot be retrieved from Digital Risk’s ESI custodians. Therefore, WMC seeks these documents from the Certificateholders.

Under these circumstances, the discovery sought by WMC is warranted. Such discovery is material and necessary for the purpose of cross-examining plaintiffs expert on a critical issue in this case – plaintiffs expert testimony regarding the existence of material breaches of the applicable reps and warranties. An application to quash a subpoena should be granted only where the futility of the process to uncover anything legitimate is inevitable or obvious or where the information sought is utterly irrelevant to any proper inquiry.

It should be noted that the discovery sought by WMC is not duplicative and is not available from another source. The burden on the Certificateholders is relatively minimal since WMC, in requesting ESI from a non-party, will have to defray the Certificateholders’ reasonable document collection, review, and production costs, including certain legal fees.

(Internal quotations and citations omitted).

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