On October 3, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in MBIA Ins. Corp. v Credit Suisse Sec.(USA) LLC, 2013 NY Slip Op 32404(U), addressing whether to order disclosure to defendant of “all communications between” certain key witnesses and plaintiff’s counsel, including “all versions, drafts, or iterations of the affidavits that formed the basis for the” complaint “and the witnesses’ deposition testimony.” The court’s recitation of the relevant facts shows the key issue—the apparent close involvement of plaintiff’s counsel in the witnesses’ testimony:
[Plaintiff] paid substantial sums of money (in certain cases, more than $10,000) to the witnesses and flew the witnesses from across the country to New York so that they could recount their knowledge of (and possible participation in) defendants’ fraudulent business practices. . . . Plaintiff’s counsel worked with these witnesses to draft affidavits detailing their knowledge of the fraud [and] . . . also extensively prepped them prior to deposition and defended their testimony against cross-examination by defendants. . . . Several of the witnesses began to recant their testimony or indicated that what was written in their affidavits was the work of [plaintiff’s] counsel and was not entirely an accurate description of their knowledge.
Justice Kornreich ordered the disclosure. In so doing, she acknowledged that:
The question before the court is not whether the use of confidential witness testimony in a complaint automatically entitles a defendant to obtain all documents and communications between the witnesses and plaintiff’s counsel. Rather, the issue is whether, once defendants have laid a foundation giving rise to a reasonable suspicion of a witness dissembling, fairness militates in favor of disclosure.
Justice Kornreich found that it did, and ordered the disclosure. The lesson here seems plain: there is nothing wrong with paying a reasonable rate for a witness’s time or discussing their testimony with them, but when counsel creates the appearance that it has crossed the line from gathering facts to manipulating them, trouble is bound to follow.