Court Quashes Subpoenas Seeking To Support Affirmative Defenses, Suggesting Defenses Were Too Conclusory To Support Third-Party Discovery

On January 25, 2024, Justice Robert R. Reed granted a motion to quash several subpoenas seeking financial records from third parties as “utterly irrelevant to the action,” rejecting arguments that the requested records supported a defendant’s counterclaim and affirmative defenses. The decision in UKI Freedom LLC v. Organization for the Defense of Four Freedoms For Ukraine, et al., Index No. 158095/2022, noted that the defendant’s counterclaim had previously been dismissed and that the affirmative defenses relied upon by the defendant were too conclusory to support third-party discovery. The Court explained:

[Defendant] ODFFU claims that the subpoenas “seek[] to recover any and all business records and financial records relating to ODFFU doing business with the [entities]” and that the demanded records are “crucial for ODFFU to try to recreate its business records and financial transactions with the[entities],” particularly as they relate to the ODFFU's assignment of its mortgage and loan during which time Kaczurak was acting as a board member of ODFFU. However, not only are the subpoenas now moot as they relate to ODFFU’s counterclaim against Kaczurak, but they would also serve no purpose in prosecuting the affirmative defenses, which are improperly asserted in a conclusory manner without any detail or factual allegations, and themselves subject to dismissal.

The decision highlights the need to plead affirmative defenses with sufficient particularity to support necessary discovery or otherwise supplement those defenses. The attorneys at Schlam Stone & Dolan frequently litigate disputes concerning the scope of discovery. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.