Freedman v. Weatherford International Ltd. et al

Filing 108

MEMORANDUM AND ORDER denying 86 Motion for Reconsideration: For the foregoing reasons, I adhere to my determination in the July 25 Order. See Freedman, 2014 WL 3767034, at *3. The Clerk of Court is respectfully directed to terminate the plaintiffs' motion for reconsideration (Docket no. 86). (Signed by Magistrate Judge James C. Francis on 9/12/2014) Copies Mailed By Chambers. (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
GLENN FREEDMAN, Individually and
: 12 Civ. 2121 (LAK) (JCF)
On Behalf of All Others Similarly :
Situated,
:
MEMORANDUM
:
AND ORDER
Plaintiff,
:
:
- against :
:
WEATHERFORD INTERNATIONAL LTD.,
:
BERNARD J. DUROC-DANNER, and ANDREW:
P. BECNEL,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
In three previously-filed motions to compel, the plaintiffs in
this

putative

class

action

alleging

securities

fraud

sought

production of (1) “certain reports comparing the electronic search
results from discovery in this action to the results from prior
searches”; (2) “documents concerning an investigation undertaken by
[the] Audit Committee” of defendant Weatherford International Ltd.
(collectively

with

other

defendants,

“Weatherford”);

and

(3)

“documents concerning an investigation undertaken by the law firm
Latham

&

Watkins

LLP”

(“Latham”).

Freedman

v.

Weatherford

International Ltd., No. 12 Civ. 2121, 2014 WL 3767034, at *1
(S.D.N.Y. July 25, 2014) (“July 25 Order”).
motions.

Id.

at

*7.

The

plaintiffs

I denied all three
filed

a

motion

for

reconsideration of my rulings regarding the Latham documents and
the search reports.

I denied reconsideration on the first issue

but granted reconsideration and asked for further briefing on the
second, based on the plaintiffs’ presentation of “new evidence,
1

unavailable at the time [they] filed their [earlier] motion, which
allegedly

reveals

production.”

deficiencies

in

[Weatherford’s]

(Order dated Aug. 14, 2014, at 1, 3-4).

current
Having

reviewed this new information and argument, I adhere to my former
determination.
Background
As noted in the July 25 Order, a fuller factual background of
this action, which alleges that Weatherford issued false earnings
statements for the years 2007-2010, can be found in two prior
decisions, Freedman v. Weatherford International Ltd., No. 12 Civ.
2121, 2013 WL 5299137 (S.D.N.Y. Sept. 20, 2013), and Dobina v.
Weatherford International, Ltd., 909 F. Supp. 2d 228 (S.D.N.Y.
2012). Freedman, 2014 WL 3767034, at *1.

What is relevant here is

that, in response to an employee’s accusation of improper practices
occurring in the company’s tax department, Weatherford engaged
Latham to conduct an investigation (the “Latham Investigation”).
Id. Several months after that investigation concluded, Weatherford
announced

it

would,

for

the

third

time,

issue

correcting errors in its earnings statements.

Id.

a restatement
This led to a

second investigation, headed by Davis Polk & Wardwell, LLP (the
“Audit Committee Investigation”).

Id. at *2.

One of the plaintiffs’ prior motions to compel sought, among
other things,

“reports

that

would

allow

a

comparison

of

the

documents produced in this case with the documents searched [in]
the

Audit

Committee

[Investigation].”

[Investigation]

and

[the]

Latham

(Motion to Compel Defendants to Produce the
2

Results of Electronic Document Searches (“Pl. E-Discovery Memo.”)
at 2). Although I recognized that such “discovery on discovery” is
sometimes warranted, I nevertheless denied the request because the
plaintiffs had not “proffered an adequate factual basis for their
belief that the current production is deficient.”1
WL 3767034, at *3.

Freedman, 2014

The plaintiffs now seek to remedy that failure

by submitting certain documents from Weatherford custodians that
were produced by third parties -- and not by Weatherford -- after
briefing on the original motion to compel was completed.

(Pl.

Reconsideration Memo. at 19-20).
Discussion
A motion for reconsideration is governed by Rule 6.3 of the
Local Rules of the United States District Courts for the Southern
1

In support of their motion for reconsideration, the
plaintiffs assert that, in the July 25 Order, I denied their
request for search reports regarding the Latham and Audit Committee
Investigations for two additional reasons: that the searches would
impose a significant burden and that “the investigations did not
concern the same ‘class period’ or ‘misstatements’ as this case.”
(Memorandum of Law in Support of Lead Plaintiffs’ Motion for
Reconsideration of the July 25, 2014 Order of Magistrate Judge
Francis with Respect to Lead Plaintiffs’ Motions to Compel (“Pl.
Reconsideration Memo.”) at 4). This, they assert, indicates that
I misunderstood both the defendants’ opposition to the motion and
the record in this case. (Pl. Reconsideration Memo. at 4). While
I did mention the defendants’ claimed burden in producing a sample
report, I did not rely on that burden in denying the motion. And,
although the July 25 Order states that the class period and
misstatements at issue here are different than those at issue in
the Latham and Audit Committee Investigations, whereas the
plaintiffs argued only that the class period and misstatements at
issue here differ from those at issue in the related case, Dobina
v. Weatherford International Ltd., No. 11 Civ. 1646 (S.D.N.Y. March
9, 2011) (Pl. E-Discovery Memo. at 2), it is clear that the basis
on which I denied the motion was the plaintiffs’ failure to show
that the production at issue was deficient. More importantly, any
misperceptions in the July 25 Order are irrelevant to my resolution
of this motion.
3

and Eastern Districts of New York and is committed to the sound
discretion of the court.

Idowu v. Middleton, No. 12 Civ. 1238,

2013 WL 371657, at *1 (S.D.N.Y. Jan. 31, 2013).
granting

such

generally

be

a

motion

denied

is

unless

strict,
the

and

moving

“‘The standard for

reconsideration
party

can

will

point

to

controlling decisions or data that the court overlooked -- matters,
in other words, that might reasonably be expected to alter the
conclusion reached by the court.’”

Space Hunters, Inc. v. United

States, 500 F. App’x 76, 81 (2d Cir. 2012) (quoting Shrader v. CSX
Transportation, Inc., 70 F.3d 255, 257 (2d Cir. 1995)). Generally,
“[r]econsideration requires ‘an intervening change of controlling
law, the availability of new evidence, or the need to correct a
clear error or prevent manifest injustice.’” Capitol Records, Inc.
v. MP3tunes, LLC, No. 07 Civ. 9931, 2013 WL 1987225, at *1
(S.D.N.Y. May 14, 2013) (quoting Virgin Atlantic Airways Ltd. v.
National Mediation Board, 956 F.2d 1245, 1255 (2d Cir. 1992)).

“A

party seeking reconsideration may neither repeat arguments already
briefed, considered and decided, nor advance new facts, issues or
arguments not previously presented to the Court.”

Ferring B.V. v.

Allergan, Inc., No. 12 Civ. 2650, 2013 WL 4082930, at *1 (S.D.N.Y.
Aug. 7, 2013) (internal quotation marks omitted).

Reconsideration

remains “an extraordinary remedy to be employed sparingly in the
interest

of

resources.”

finality

and

conservation

of

scarce

judicial

Hinds County, Mississippi v. Wachovia Bank N.A., 700

F. Supp. 2d 378, 407 (S.D.N.Y. 2010) (internal quotation marks
omitted).
4

The new evidence referenced by the plaintiffs consists of 18
e-mails

from

“critical

custodians

at

Weatherford”

that

were

produced (after briefing on the original motion to compel was
complete) not by the defendants, but by third-party KPMG, which
worked

with

Weatherford

on

its

Reconsideration Memo. at 19-20).

remediation

efforts.

(Pl.

This, the plaintiffs contend,

shows that Weatherford’s production is “significantly deficient.”
(Pl. Reconsideration Memo. at 17).
Rule

26

of

the

Federal

Rules

of

Civil

Procedure

allows

discovery of “nonprivileged matter” as long as it is “reasonably
calculated to lead to the discovery of admissible evidence.”

Fed.

R. Civ. P. 26(b)(1).

In certain circumstances where a party makes

some

a

showing

that

producing

party’s

production

has

been

incomplete, a court may order discovery designed to test the
sufficiency of that party’s discovery efforts in order to capture
additional relevant material.

Cf. Orillaneda v. French Culinary

Institute, No. 07 Civ. 3206, 2011 WL 4375365, at *6-7 (S.D.N.Y.
Sept. 19, 2011) (granting protective order prohibiting discovery on
discovery where requesting party did not identify “specific reasons
for believing that . . . production [was] deficient”).

However,

requests for such “meta-discovery” should be closely scrutinized in
light of the danger of extending the already costly and timeconsuming discovery process ad infinitum.

See Hubbard v. Potter,

247 F.R.D. 27, 29 (D.D.C. 2008) (“Speculation that there is more
will

not

suffice;

if

the

theoretical

possibility

that

more

documents exist sufficed to justify additional discovery, discovery
5

would never end.”).
Here, the plaintiffs contend that KPMG’s production of the
aforementioned 18 e-mails shows that Weatherford’s production is
faulty and that providing them with a “report of the documents
‘hit’” by search terms used in connection with the Latham and Audit
Committee

Investigations

will

identify

additional

documents that have not been produced here.

relevant

(Lead Plaintiffs’

Reply in Further Support of Their Motion for Reconsideration of
Their Motion

to

Compel

Defendants

to

Electronic Searches (“Reply”) at 1-2).

Produce

the

Results

of

The plaintiffs do not,

then, seek to probe the specifics of Weatherford’s discovery
efforts,

but

rather

to

“identify

missing

from

But the suggested remedy is not suited to the task.

The

[Wetherford’s] production.”

the

documents

(Reply at 2).

plaintiffs admit that of those 18 e-mails only three, at most,
would have been identified by a search using the terms from the
investigations.

(Reply at 1-2, 8 & n.4).

In addition to the 18 e-

mails, the plaintiffs point to “numerous other relevant documents
that have been produced by [t]hird [p]arties that have not been
produced by [d]efendants” (Pl. Reconsideration Memo. at 20), some
of which were identified in a June 20, 2014 letter to counsel for
Weatherford (Letter of Wilson Meeks, III, dated June 20, 2014,
attached as Exh. 4 to Pl. Reconsideration Memo.).

However, the

plaintiffs do not appear to contend that a significant number of
these documents would have been identified by the contemplated
searches. Rather, they seem to argue only that these documents are
6

relevant and should have been produced by Weatherford,

without

addressing the defendants' assertion that the requested searches
would have identified only one unproduced document.
Defendants'

Opposition

to

Lead

Plaintiffs'

(Reply at 9;
Motion

for

Reconsideration of Magistrate Judge Francis's July 25, 2014 Order
Denying Motion to Compel ("Def. Memo.") at 4).
" [T] he

Federal

perfection."

Moore

Rules
v.

of

Civil

Publicis

Procedure

Groupe,

287

do

not

F.R.D.

require
182,

191

(S.D.N.Y. 2012)

Weatherford has reviewed "millions of documents

[]

hundreds of thousands," comprising "nearly 4.4

and [produced]

million pages," in this case.

(Def. Memo. at 7,

8 n.8).

It is

unsurprising that some relevant documents may have fallen through
the

cracks.

But,

most

importantly,

the

plaintiffs'

proposed

exercise is unlikely to remedy the alleged discovery defects.
light of

its dubious value,

I

will not

In

require Weatherford to

provide the requested report.
Conclusion
For the foregoing reasons, I adhere to my determination in the
July 25 Order.

See Freedman, 2014 WL 3767034, at *3.

The Clerk of

Court is respectfully directed to terminate the plaintiffs' motion
for reconsideration (Docket no. 86).

SO ORDERED.

C·~U1,

7V
-

AMES C. FRANCIS IV
ITED STATES MAGISTRATE JUDGE

7

Dated: New York, New York
September 12, 2014
Copies mailed this date:
Joel H. Bernstein, Esq.
Ira A. Schochet, Esq.
Labaton Sucharow LLP
140 Broadway
New York, NY 10005
Javier Bleichmar, Esq.
Joseph A. Ponti, Esq.
Wilson M. Meeks, III, Esq.
Bleichmar, Ponti, Tountas & Auld LLP
1501 Broadway
New York, NY 10036
Kevin H. Metz, Esq.
Marissa R. Boynton, Esq.
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004
Peter A. Wald, Esq.
Latham & Watkins, LLP
505 Montgomery Street
Suite 2000
San Francisco, CA 94111

8