Wallen v. Blackrock Consulting, Inc. et al

Filing 232

ORDER, The Court denies Plaintiff's 229 Motion for Recusal. Plaintiff is granted an extension of time until January 6, 2023 to file his portion of the JPTO. So Ordered by Chief Judge Margo K. Brodie on 12/9/2022. (c/m) (TL)

81,7('67$7(6',675,&7&2857
($67(51',675,&72)1(:<25.




12(/2:$//(1









Y


127)2538%/,&$7,21

25'(5
&90.%


3ODLQWLII


7(.1$92*5283DQG%/$&.52&.
&2168/7,1*,1&









'HIHQGDQWV


0$5*2.%52',(8QLWHG6WDWHV'LVWULFW-XGJH
3ODLQWLII1RHO2:DOOHQSURFHHGLQJSURVHFRPPHQFHGWKHDERYHFDSWLRQHGDFWLRQRQ
'HFHPEHUDJDLQVW7HNQDYR*URXSDQG%ODFNURFN&RQVXOWLQJ,QFFROOHFWLYHO\
³'HIHQGDQW´DOOHJLQJYLRODWLRQVRI7LWOH9,,RIWKH&LYLO5LJKWV$FWRI86&
†HHWVHT³7LWOH9,,´DQGWKH$PHULFDQVZLWK'LVDELOLWLHV$FWRI86&†
HWVHTWKH³$'$´&RPSO'RFNHW(QWU\1R2Q1RYHPEHU3ODLQWLIIPRYHGWR
GLVTXDOLI\0DJLVWUDWH-XGJH9LNWRU93RKRUHOVN\IURPWKHDFWLRQ3O¶V0RWWR'LVTXDOLI\
'RFNHW(QWU\1R-XGJH3RKRUHOVN\GHQLHG3ODLQWLII¶VPRWLRQ'HF'HFLVLRQ'RFNHW
(QWU\1RDQG3ODLQWLIIDSSHDOHGWKDWGHFLVLRQWRWKHGLVWULFWMXGJH$SSHDORI0DJLVWUDWH
-XGJH'HFLVLRQ'RFNHW(QWU\1R2Q6HSWHPEHUWKH&RXUWGHQLHG3ODLQWLII¶V
DSSHDO0LQ2UGHURI6HSW


3ODLQWLIIZDVUHSUHVHQWHGDWYDULRXVWLPHVGXULQJWKHFRXUVHRIWKLVOLWLJDWLRQLQFOXGLQJ
DWLWVRQVHW6HH&RPSO'RFNHW(QWU\1R


:KLOH3ODLQWLIIQDPHV7HNQDYRDQG%ODFNURFNDVVHSDUDWH'HIHQGDQWVWKH\DUHRQHDQG
WKHVDPH,Q-XO\RI%ODFNURFNFKDQJHGLWVQDPHWR7HNQDYR86$,QF'HFORI7RP
&R[³&R['HFO´ˆQ'RFNHW(QWU\1R


2Q-XO\'HIHQGDQWPRYHGIRUVXPPDU\MXGJPHQWDVWRDOOFODLPV'HI¶V0RW
IRU6XPP-'RFNHW(QWU\1R'HI¶V0HPLQ6XSSRI'HI¶V0RWIRU6XPP-'RFNHW
(QWU\1R2Q0DUFKWKH&RXUWJUDQWHGLQSDUWDQGGHQLHGLQSDUWWKHVXPPDU\
MXGJPHQWPRWLRQWKH³0DUFK'HFLVLRQ´0DUFK'HFLVLRQ'RFNHW(QWU\1R
SDUWLDOO\DGRSWLQJ0DJLVWUDWH-XGJH6DQNHW-%XOVDUD¶VUHSRUWDQGUHFRPPHQGDWLRQGDWHG
)HEUXDU\WKH³5 5´5 5'RFNHW(QWU\1R2Q0DUFK3ODLQWLII
ILOHGDPRWLRQVHHNLQJWRKDYHWKH5 5DQGWKH&RXUW¶V0DUFK'HFLVLRQDGRSWLQJWKH5 5
VHWDVLGHRQWKHJURXQGVWKDWERWKRUGHUVZHUHIUDXGXOHQWO\SURFXUHG3O¶V0RWWR'LVPLVV0RW
IRU6XPP-'RFNHW(QWU\1R7KH&RXUWFRQVWUXHG3ODLQWLII¶VPRWLRQDVDPRWLRQIRU
UHFRQVLGHUDWLRQSXUVXDQWWR5XOHERIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHDQGGHQLHGWKH
PRWLRQ)HE'HFLVLRQ'RFNHW(QWU\1R3ODLQWLIIDSSHDOHGWKH&RXUW¶VGHFLVLRQ
1RWLFHRI$SSHDO'RFNHW(QWU\1RDQGWKH86&RXUWRI$SSHDOVIRUWKH6HFRQG&LUFXLW
GLVPLVVHGWKHDSSHDO0DQGDWHRI86&$DVWR1RWLFHRI$SSHDO'RFNHW(QWU\1R
2Q$XJXVW3ODLQWLIIPRYHGWRUHFXVH0DJLVWUDWH-XGJH6DQNHW-%XOVDUDIURP
WKLVDFWLRQ3O¶V0RWIRU5HFXVDO³3O¶V0RW´'RFNHW(QWU\1R)RUWKHUHDVRQV
GLVFXVVHGEHORZWKH&RXUWGHQLHV3ODLQWLII¶VPRWLRQIRUUHFXVDO
, %DFNJURXQG
7KH&RXUWDVVXPHVIDPLOLDULW\ZLWKWKHXQGHUO\LQJIDFWVDVGHWDLOHGLQWKH5 5DQGWKH
0DUFK'HFLVLRQ)RUWKHSXUSRVHVRIWKLV2UGHUWKH&RXUWSURYLGHVRQO\DVXPPDU\RIWKH
UHOHYDQWSURFHGXUDOEDFNJURXQG
2Q-XO\LQOLJKWRIWKH6HFRQG&LUFXLW¶VGLVPLVVDORI3ODLQWLII¶VDSSHDOWKH
&RXUWVHWDSUHWULDOFRQIHUHQFHIRU-XO\6FKHGXOLQJ2UGHUGDWHG-XO\$WWKH
SUHWULDOFRQIHUHQFHWKH&RXUWLQIRUPHG3ODLQWLIIWKDWKHPXVWILOHKLVSRUWLRQRIWKH-RLQW3UHWULDO




2UGHU³-372´LQRUGHUWRSURFHHGWRWULDO6HH0LQ(QWU\GDWHG-XO\2Q
6HSWHPEHU3ODLQWLIIVXEPLWWHGDOHWWHUWRWKH&RXUWWRQRWLI\WKH&RXUWRI3ODLQWLII¶V
³GHFLVLRQQRWWRSDUWLFLSDWHLQWKHLPPLQHQWVKDPWULDOSURFHHGLQJ´6HSW/HWWHUIURP
1RHO:DOOHQ'RFNHW(QWU\1R2Q$SULO'HIHQGDQWWLPHO\ILOHGLWVSRUWLRQRI
WKH-372DQG-XGJH%XOVDUDSURYLGHG3ODLQWLIIDQDGGLWLRQDORSSRUWXQLW\WRILOHKLVSRUWLRQRIWKH
-372E\-XQHRUULVNGLVPLVVDORIWKHFDVH$SU2UGHU2Q-XQH
3ODLQWLIIPRYHGIRUDQH[WHQVLRQRIWLPHWRILOHDUHVSRQVHWRWKHSUHWULDORUGHU3O¶V0RWIRU
([WHQVLRQ'RFNHW(QWU\1RZKLFK-XGJH%XOVDUDJUDQWHGH[WHQGLQJ3ODLQWLII¶VWLPHWR
$XJXVW-XQH2UGHU2Q$XJXVWLQVWHDGRIILOLQJKLVSRUWLRQRIWKH
-3723ODLQWLIIILOHGDPRWLRQWRGLVTXDOLI\-XGJH%XOVDUDIURPWKHDFWLRQ3O¶V0RW3O¶V([V
LQ6XSSRI0RW'RFNHW(QWU\1R
,, 'LVFXVVLRQ
D 6WDQGDUGRIUHYLHZ
6HFWLRQDRI7LWOHRIWKH8QLWHG6WDWHV&RGHSURYLGHVWKDW³>D@Q\MXVWLFHMXGJH
RUPDJLVWUDWHMXGJHVKDOOGLVTXDOLI\KLPVHOILQDQ\SURFHHGLQJLQZKLFKKLVLPSDUWLDOLW\PLJKW
UHDVRQDEO\EHTXHVWLRQHG´/LWHN\Y8QLWHG6WDWHV86TXRWLQJ86&
†D7KLVSURYLVLRQ³LVWULJJHUHGE\DQDWWLWXGHRUVWDWHRIPLQGVRUHVLVWDQWWRIDLUDQG
GLVSDVVLRQDWHLQTXLU\DVWRFDXVHDSDUW\WKHSXEOLFRUDUHYLHZLQJFRXUWWRKDYHUHDVRQDEOH
JURXQGVWRTXHVWLRQWKHQHXWUDODQGREMHFWLYHFKDUDFWHURIDMXGJH¶VUXOLQJVRUILQGLQJV´,GDW
±.HQQHG\-FRQFXUULQJ³>$@MXGJHVKRXOGEHGLVTXDOLILHGRQO\LILWDSSHDUVWKDWKHRU
VKHKDUERUVDQDYHUVLRQKRVWLOLW\RUGLVSRVLWLRQRIDNLQGWKDWDIDLUPLQGHGSHUVRQFRXOGQRWVHW
DVLGHZKHQMXGJLQJWKHGLVSXWH´,GVHHDOVR(O2PDULY.UHDE86$,QF)$SS¶[
G&LUQRWLQJWKDWLQFRQVLGHULQJZKHWKHUWRUHFXVHLWVHOIIURPDFDVHDFRXUWPXVW




FRQVLGHUZKHWKHU³DQREMHFWLYHGLVLQWHUHVWHGREVHUYHUIXOO\LQIRUPHGRIWKHXQGHUO\LQJIDFWV>@
>ZRXOG@HQWHUWDLQVLJQLILFDQWGRXEWWKDWMXVWLFHZRXOGEHGRQHDEVHQWUHFXVDO´TXRWLQJ8QLWHG
6WDWHVY%D\OHVV)GG&LU,6&+ROGLQJ$*Y1REHO%LRFDUH)LQ
$*)G±G&LUVDPH
'LVDJUHHPHQWZLWKDFRXUW¶VGHFLVLRQLQDQGRILWVHOILVQRWDVXIILFLHQWEDVLVWRJUDQW
DUHFXVDOPRWLRQ/R&DVFLRY8QLWHG6WDWHV)G±G&LU³>-@XGLFLDO
UXOLQJVDORQHDOPRVWQHYHUFRQVWLWXWHDYDOLGEDVLVIRUDELDVRUSDUWLDOLW\PRWLRQ´FLWDWLRQ
RPLWWHG*LOOY-XV%URDG&RUS)6XSSG('1<QRWLQJWKDW³ELDV
DQGSUHMXGLFHWKDWLVDOOHJHGWREHGLVTXDOLI\LQJPXVWFRPHIURPDQH[WUDMXGLFLDOVRXUFH´
FLWDWLRQRPLWWHG6(&Y5D]PLORYLF1R&9:/DW
('1<
-XQH³*HQHUDOO\FODLPVRIMXGLFLDOELDVPXVWEHEDVHGRQH[WUDMXGLFLDOPDWWHUVDQG
DGYHUVHUXOLQJVZLWKRXWPRUHZLOOUDUHO\VXIILFHWRSURYLGHDUHDVRQDEOHEDVLVIRUTXHVWLRQLQJD
MXGJH¶VLPSDUWLDOLW\´FLWDWLRQRPLWWHG/R&DVFLRY8QLWHG6WDWHV)6XSSG±
('1<³>6@LPSO\VWDWHGMXGLFLDOUXOLQJVDORQHDOPRVWQHYHUFRQVWLWXWHDYDOLG
EDVLVIRUDELDVRUSDUWLDOLW\PRWLRQDQGWKHDOOHJHGELDVDQGSUHMXGLFHWREHGLVTXDOLI\LQJ
PXVWVWHPIURPDQH[WUDMXGLFLDOVRXUFHDQGUHVXOWLQDQRSLQLRQRQWKHPHULWVRQVRPHEDVLVRWKHU
WKDQZKDWWKHMXGJHOHDUQHGIURPKLVSDUWLFLSDWLRQLQWKHFDVH´DII¶G/R&DVFLR)GDW
³>$@KLJKWKUHVKROGLVUHTXLUHG´WRVDWLVI\WKHVWDQGDUGIRUUHFXVDO/LWHN\86DW±
³5HFXVDOPRWLRQVDUHFRPPLWWHGWRWKHVRXQGGLVFUHWLRQRIWKHGLVWULFWFRXUW´/R&DVFLR
)GDW
E 3ODLQWLIIIDLOVWRVKRZDEDVLVIRU-XGJH%XOVDUD¶VUHFXVDO
3ODLQWLIIDUJXHVWKDW-XGJH%XOVDUDLV³ELDVHGDQGSUHMXGLFHG´DJDLQVWWKH3ODLQWLIILQ
YLRODWLRQRI86&†DQGPXVWUHFXVHKLPVHOIIURPWKLVDFWLRQ3O¶V0RW




6SHFLILFDOO\3ODLQWLIIDUJXHV-XGJH%XOVDUDYLRODWHGWKHHWKLFDO&DQRQVRIWKH&RGHRI
&RQGXFWIRU86-XGJHV$%$0RGHO&RGHRI-XGLFLDO&RQGXFWDQG3ODLQWLII¶V&RQVWLWXWLRQDO
GXHSURFHVVULJKWVIDLOHGWRH[SUHVVFRQWULWLRQIRUFRQVSLULQJZLWKWKH'HIHQGDQW¶VDWWRUQH\
XWLOL]HGDQ³LQFRPSOHWHRUFRUUXSW´HYLGHQWLDU\UHFRUGDQGUHOHDVHGD³GRFWRUHG´5 5LQ
ZKLFKKHULJJHGWKHVXPPDU\MXGJPHQWLQIDYRURI'HIHQGDQWLQFRQMXQFWLRQZLWK
'HIHQGDQW¶VDWWRUQH\VDERWDJHG3ODLQWLII¶VVXPPDU\MXGJPHQWSOHDGLQJVFUHDWHGILFWLWLRXV
IDFWSDWWHUQVDPSOLILHGIDFWSDWWHUQZLWKIDEULFDWHGELOOLQJLQYRLFHVPDQLSXODWHGWKH
UHFRUGWR³LPSODQW>@DSKDQWRPGXHGDWH´GHFHLYHGWKHGLVWULFWMXGJHLQWRUHQGLQJD
IUDXGXOHQWMXGJPHQWIRU'HIHQGDQWHQJLQHHUHGDIDoDGHWRH[SORLWDQGGHIUDXG3ODLQWLII
FRPPLWWHGIUDXGRQWKH&RXUWGHFHLYHGWKHGLVWULFWFRXUWDQGHQJDJHGLQRWKHU
WUDQVJUHVVLRQV,GDW±
3ODLQWLII¶VDOOHJDWLRQVDUHLQVXIILFLHQWWRTXHVWLRQ-XGJH%XOVDUD¶VLPSDUWLDOLW\3ODLQWLII
KDVPDGHVLPLODUDUJXPHQWVPXOWLSOHWLPHV±ILUVWLQFRQQHFWLRQZLWKKLVPRWLRQIRU
UHFRQVLGHUDWLRQRIWKH&RXUW¶VLQLWLDORUGHUDGRSWLQJWKH5 5VHHJHQHUDOO\/HWWHU5HJDUGLQJ
%LDVHG0DJLVWUDWHZLWK4XHVWLRQDEOH&RQGXFWGDWHG$SU'RFNHW(QWU\1R/HWWHU
5HJDUGLQJ)DOVLILFDWLRQRI(YLGHQFHDQG)UDXGRQWKH&RXUWGDWHG$SU'RFNHW(QWU\
1RWKHQDIWHUWKH&RXUWYDFDWHGWKDWRUGHULQKLVUHSO\WR'HIHQGDQW¶VUHVSRQVHWRKLV
REMHFWLRQVWRWKH5 5VHHJHQHUDOO\$IIRI3URRIRI7DPSHULQJDQQH[HGWR3O¶V0HPLQ
6XSSRI3O¶V2EMVDV(['RFNHW(QWU\1RWKHQDIWHUWKH&RXUWUHYLHZHGKLV
REMHFWLRQVGHQRYRDQGJUDQWHGLQSDUWDQGGHQLHGLQSDUW'HIHQGDQW¶VVXPPDU\MXGJPHQW
PRWLRQLQKLVRSSRVLWLRQWR'HIHQGDQW¶VPRWLRQIRUUHFRQVLGHUDWLRQRIWKH&RXUW¶V0DUFK
'HFLVLRQVHHJHQHUDOO\3O¶V0HPLQ2SS¶QWR'HI¶V0RWIRU5HFRQV'RFNHW(QWU\1R
ZKLFKWKH&RXUWDOVRXOWLPDWHO\GHQLHG2UGHU'HQ'HI¶V0RWIRU5HFRQV'RFNHW(QWU\1R




DQGILQDOO\LQKLV0DUFKPRWLRQZKLFKWKH&RXUWFRQVWUXHGDVDPRWLRQIRU
UHFRQVLGHUDWLRQDQGDOVRGHQLHG3O¶V0RWWR'LVPLVV0RWIRU6XPP-)HE'HFLVLRQ
,QWKH)HEUXDU\5 5-XGJH%XOVDUDPDGHFRPSUHKHQVLYHILQGLQJVRIIDFWFLWLQJ
WKHSDUWLHV¶5XOH6WDWHPHQWVSDUWLHV¶GHFODUDWLRQV3ODLQWLII¶VRZQGHFODUDWLRQ3ODLQWLII¶V
GHSRVLWLRQDQG3ODLQWLII¶V&RPSODLQW6HH5 5±3ODLQWLIIDOOHJHVWKDW-XGJH%XOVDUD
³GHOLEHUDWHO\FUHDWHGILFWLWLRXVIDFWSDWWHUQVE\PDQXIDFWXULQJ´HPDLOHYLGHQFHGDWHG$SULO
WKDWFRQILUPHGD³SURMHFWEXGJHWH[WHQVLRQ´3O¶V0RW$VDQLQLWLDOPDWWHU3ODLQWLII
LVLQFRUUHFWWKDWWKHHPDLOFRQILUPHGDEXGJHWH[WHQVLRQEHFDXVHWKHHPDLODFWXDOO\VKRZVWKDW
WKH236SURMHFWZRXOGEHFRPLQJWRDQHQGLQVWHDG5 53ODLQWLIISURYLGHVQRHYLGHQFH
WKDWWKHHPDLOLVDFWXDOO\IDEULFDWHGRUDQ\HYLGHQFHWRVXSSRUWKLVFRQFOXVRU\DOOHJDWLRQWKDW
-XGJH%XOVDUDFUHDWHGDILFWLWLRXVIDFWSDWWHUQ:LWKRXWDQ\HYLGHQFHWKH&RXUWFDQQRWFRQFOXGH
WKDW-XGJH%XOVDUDVKRXOGEHUHFXVHGRQWKLVEDVLV6HH/LWHN\86DW±³>$@KLJK
WKUHVKROGLVUHTXLUHG´WRVDWLVI\WKHVWDQGDUGIRUUHFXVDO
3ODLQWLIIDOVRDUJXHVWKDW-XGJH%XOVDUDLQYHQWHGDGXHGDWHIRUREMHFWLRQVWRWKH5 5
6HH3O¶V0RW±³>7@KH0DJLVWUDWHSUHPHGLWDWHGO\LPSODQWHGDSKDQWRPGXHGDWHµ¶LQ
WKHUHFRUGWKDWNQRZLQJO\DQGIDOVHO\UHSUHVHQWHGWKHGXHGDWHIRUWKH2EMHFWLRQV¶UHVSRQVHV´
LGDW³0DJLVWUDWH¶VSKDQWRP5 5GXHGDWH´5XOHERIWKH)HGHUDO5XOHVRI
&LYLO3URFHGXUHSURYLGHVWKDW³DSDUW\PD\VHUYHDQGILOHVSHFLILFZULWWHQREMHFWLRQVWRWKH
SURSRVHGILQGLQJVDQGUHFRPPHQGDWLRQV´³>Z@LWKLQGD\VDIWHUEHLQJVHUYHGZLWKDFRS\RIWKH
UHFRPPHQGHGGLVSRVLWLRQ´)HG5&LY3EVHHDOVR&DLGRUY2QRQGDJD&QW\
)GG&LU³>)@DLOXUHWRREMHFWWLPHO\WRDPDJLVWUDWH>MXGJH¶V@UHSRUWRSHUDWHV
DVDZDLYHURIDQ\IXUWKHUMXGLFLDOUHYLHZRIWKHPDJLVWUDWH>MXGJH¶V@GHFLVLRQ´FLWDWLRQ
RPLWWHG-XGJH%XOVDUDILOHGWKH5 5RQ)HEUXDU\WKHUHIRUH0DUFKZDV




IRXUWHHQGD\VDIWHUWKH5 5ZDVILOHG&RQWUDU\WR3ODLQWLII¶VDVVHUWLRQVWKLVZDVQRWD
³SKDQWRPGXHGDWH´EXWRQHUHTXLUHGE\ODZXQGHUWKH)HGHUDO5XOHVRI&LYLO3URFHGXUH
3ODLQWLIIKDVQRWPDGHDQ\DOOHJDWLRQVVXSSRUWHGE\IDFWVWRVXJJHVWWKDWDQREMHFWLYH
GLVLQWHUHVWHGREVHUYHUZRXOGTXHVWLRQ-XGJH%XOVDUD¶VLPSDUWLDOLW\DQGWKHUHIRUHWKH&RXUW
GHQLHV3ODLQWLII¶VUHFXVDOPRWLRQ6HH+DUULVRQY&QW\RI1DVVDX1R&9:/
DW
±('1<6HSWGHQ\LQJWKHSODLQWLII¶VPRWLRQIRUUHFXVDOEHFDXVH
WKHFRXUW¶VUXOLQJVGLGQRW³H[KLELW>@DQ\IDYRULWLVPRUDQWDJRQLVPWRZDUGVHLWKHUVLGH´DQG³WR
WKHH[WHQWSODLQWLIIDOOHJHVDQ\RWKHULPSURSHUFRQGXFWWKRVHDOOHJDWLRQVDUHFRPSOHWHO\
XQVXEVWDQWLDWHGDQGEDVHOHVV´$OWKRXJK3ODLQWLIIPD\GLVDJUHHZLWK-XGJH%XOVDUD¶VGHFLVLRQV
GLVDJUHHPHQWZLWK³MXGLFLDOUXOLQJVDORQH´LVQRWVXIILFLHQWJURXQGVIRUUHFXVDO6HHHJ
/R&DVFLR)GDW±FLWDWLRQRPLWWHG5D]PLORYLF:/DW

³>&@ODLPVRIMXGLFLDOELDVPXVWEHEDVHGRQH[WUDMXGLFLDOPDWWHUV´
,,, &RQFOXVLRQ
)RUWKHIRUHJRLQJUHDVRQVWKH&RXUWGHQLHV3ODLQWLII¶VPRWLRQIRUUHFXVDO3ODLQWLIILV
JUDQWHGDQH[WHQVLRQRIWLPHXQWLO-DQXDU\WRILOHKLVSRUWLRQRIWKH-372
'DWHG'HFHPEHU
%URRNO\Q1HZ<RUN 

6225'(5('



V0.%
0$5*2.%52',(
8QLWHG6WDWHV'LVWULFW-XGJH