Geo-Group Communications, Inc. v. Goldberg et al

Filing 350

ORDER: To summarize, the Court finds that Defendants' obligations to search for the documents and information in the categorized list set forth in Section 1(b)(i) are circumscribed by Section 1(b)(iii). Defendants, however, have thus far ass erted too narrow an interpretation of their diligence obligations and are not currently in full compliance with their obligations under the Agreement. To help the parties chart a path forward, the Court articulates the following steps that Defenda nts must take pursuant to the Agreement: Compile the Lists, to the extent the information necessary to do so is obtainable via good-faith compliance with their diligence obligations as set forth in Section 1(b)(iii) (including by seeking such inf ormation from counsel or accountants); Conduct searches for both physical documents and ESI at any premises used by the Entities to conduct business pursuant to Section 1(b)(iii)(d); Expand their searches of electronic devices to servers and compu ter equipment that Defendants have the practical ability to obtain and either know or have reason to know contain responsive documents (including by seeking such material from counsel or accountants); Ascertain, to the extent practicable, the loc ation of all Entities' servers and email accounts, and extract and produce from them all responsive documents (including, without limitation, by searching for ESI at the locations specified in Sections 1(b)(iii)); and Expand their searches o f electronic devices to include cloud networks or other IT infrastructure that have been used by Defendants or the entities, to the extent Defendants have the practical ability to access such networks. As the Court previously stated, the Agreement does not impose upon Defendants a free-standing obligation to produce all of the documents and information enumerated in Section 1(b)(i). Rather, the Agreement meaningfully limits what Defendants must produce to those materials that are within th eir possession, custody, or control, which the Court has interpreted to include materials that can be acquired by seeking them from counsel or accountants. The Court recognizes that many (if not all) of the Entities ceased operating as ongoing co ncerns some years ago. For this reason, the Court will not necessarily infer bad faith or an intent to obstruct in the event Defendants are unable to produce all of the materials contemplated by the Agreement. Thus, to some extent, Plaintiff must rely on Defendants integrity and good faith in ascertaining the scope of the documents, information, and electronic devices that they can practically access. The Court cannot guarantee that Plaintiff will receive all of the information enumerated in the Agreement, but Defendants must expand their efforts beyond the searches they have performed so far. The Court GRANTS Defendants a period of 60 days within which to comply with the provisions of this Order. The parties are directed to submit a joint letter to the Court addressing any remaining disputes regarding Defendants compliance with the Agreement (and, to be clear, the Court hopes that there are none) on or before September 23, 2022. SO ORDERED. (Signed by Judge Katherine Polk Failla on 7/18/2022) (jca)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
GEO-GROUP COMMUNICATIONS, INC.,
Plaintiff,
-v.RAVI CHOPRA; MAHENDRA SHAH; VIPIN
SHAH; 728 MELVILLE PETRO LLC; KEDIS
ENTERPRISES LLC; JMVD HILLSIDE LLC;
NYC TELECOMMUNICATIONS CORP.; and
SHALU SURI,

15 Civ. 1756 (KPF)
ORDER

Defendants.
KATHERINE POLK FAILLA, District Judge:
On July 1, 2021, less than two weeks before trial was set to begin in this
matter, Plaintiff Geo-Group Communications, Inc. and Defendants Vipin Shah
and Nayana Shah (together, “Defendants”) executed a settlement agreement
(the “Agreement”) that resolved the remaining claims in this action. (See Dkt.
#338 (“Settlement Agreement”)). As part of the Agreement, the parties entered
into a broad release of any claims they had against each other in exchange for,
among other things, Defendants’ production of certain post-settlement
discovery. (Id., § 2). The parties proceeded under the Agreement for the better
part of the last year, until, on May 2, 2022, Plaintiff advised the Court of an
emergent dispute relating to Defendants’ alleged failure to comply with their
obligations to produce certain materials and to conduct due diligence as
outlined in the Agreement. (Dkt. #335).
Now before the Court are the parties’ letter briefs summarizing their
respective positions on the scope of Defendants’ production and diligence

obligations under the Agreement. (Dkt. #346 (“Def. Br.”); Dkt. #349 (“Pl. Br.”)).
Both sides have asked the Court to resolve their disputed interpretations of the
Agreement. Defendants seek a ruling from the Court declaring that their
productions up to this point fully satisfy their responsibilities under the
Agreement, while Plaintiff asks the Court to direct Defendants to comply with
the Agreement according to its preferred reading of the relevant provisions.
(See Def. Br. 1; Pl. Br. 13-16). As the Court will explain, Defendants have
proffered too narrow a construction of the Agreement and, in consequence,
have several remaining diligence and production obligations. At the same time,
the Agreement does not entitle Plaintiff to all of the relief it demands.
DISCUSSION
A.

The Terms of the Settlement Agreement
Section 1(b) of the Agreement, entitled “Provision of Documents and

Information,” outlines Defendants’ post-settlement production and diligence
obligations. To begin, Section 1(b)(i) addresses the “what” of the Agreement,
outlining thirteen categories of documents and information that Defendants
“shall produce,” to the extent such materials are in the possession, custody, or
control of Defendants or certain related entities. (Settlement Agreement
§ 1(b)(i)). 1 This provision expressly defines the term “documents” to include
electronically stored information (“ESI”). (Id.). Among these enumerated

1

These entities are Neminath Inc. (“Neminath”), 235 Hillside LLC (“235 Hillside”), Jaina
Systems Network, Inc. (“Jaina”), Jaina Infrastructure, Inc. (“Jaina Infrastructure”), and
Ipsita Telecom Services, Inc. (“Ipsita,” and collectively, the “Entities"). (Settlement
Agreement § 1(b)(i)).

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categories are three lists, which seek information from specified periods
regarding: (i) Jaina’s shareholders and their percentage ownership interests;
(ii) bank accounts used by Neminath, Jaina, Jaina Infrastructure, and Ipsita;
and (iii) individuals who lent money to Jaina (together, the “Lists”). (Id.). Also
included as a category is a “Quickbooks general ledger for Jaina for the periods
2013 through 2015.” (Id.).
Section 1(b)(iii) addresses the “where” of the Agreement, outlining the
locations Defendants must search for the categories of documents and
information in Section 1(b)(i). This section recites in full:
In order to satisfy their obligations to provide all documents
in their possession, custody or control, [Defendants] shall
conduct the following searches:
a.

Conduct a search of any buildings located at 235
Hillside Avenue, Williston Park, NY 11596 that
[Defendants] have access to or … can legally obtain
access to.

b.

Conduct a search of their home.

c.

A search of all electronic devices owned by [Defendants],
235 Hillside LLC, Jaina, Jaina Infrastructure, Ipsita or
Neminath, that are in the possession, custody, or
control of [Defendants].

d.

Conduct a search of any premises used by 235 Hillside
LLC, Jaina, Jaina Infrastructure, Inc., Ipsita Telecom
Services Inc. or Neminath to conduct business.

(Settlement Agreement § 1(b)(iii)).
Section 1(b)(iv) addresses the “how” of the Agreement, discussing the
manner in which Defendants are to conduct searches of electronic devices that
fall within the scope of Section 1(b)(iii). This provision provides that “[i]n
searching for ESI on electronic devices, [Defendants] shall use the word
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searches attached as Appendix One to this Agreement.” (Settlement Agreement
§ 1(b)(iv)). Section 1(b)(v) states that “[a]fter conducting the searches detailed
in paragraphs 1(b)(iii) and 1(b)(iv), above, [Defendants] shall produce all
responsive documents within 60 days of the Effective Date of this Agreement.”
(Id., § 1(b)(v)).
Finally, the parties agreed in Section 1(b)(ii) that “[i]n producing
documents and information, [Defendants] shall be subject to the same
obligations that they would have were they producing documents to an
adversary in a civil action pending in the United States District Court for the
Southern District of New York.” (Settlement Agreement § 1(b)(ii)).
B.

Defendants Have Not Fully Complied with Their Obligations Under
the Agreement
Defendants contend that Plaintiff has already received everything to

which it is entitled under the Agreement. (Def. Br. 1). Plaintiff strenuously
disagrees and argues that Defendants are relying on a stilted reading of the
Agreement to justify their deficient compliance efforts. (Pl. Br. 3-4). Plaintiff
distills the parties’ disagreements to three primary issues: (i) whether the
Agreement imposes a free-standing obligation on Defendants to produce all
categories of documents and information listed in Section 1(b)(i), irrespective of
whether Defendants locate such materials after performing the searches listed
in Section 1(b)(iii); (ii) whether Defendants have misconstrued their diligence
obligations under Section 1(b)(iii); and (iii) whether the Agreement requires
Defendants to produce the Lists, regardless of whether they currently exist.
(Id. at 2-4). In answering these interrelated inquires, the Court concludes that
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while Defendants’ search obligations are circumscribed by Section 1(b)(iii), they
have taken an overly restrictive view of the demands imposed by this provision.
Further, the Court finds that the Agreement requires Defendants to compile the
Lists, to the extent Defendants can acquire the necessary information from the
searches outlined in Section 1(b)(iii).
1.

The Agreement Does Not Impose a Free-Standing Obligation on
Defendants to Produce All Materials in Section 1(b)(i)

Plaintiff contends that the Agreement unequivocally commands
Defendants to produce all documents and information contained in the thirteen
bullet-pointed categories in Section 1(b)(i). (Pl. Br. 3, 6). Plaintiff locates this
unequivocal directive in the language of Section 1(b)(i), which provides that
Defendants “shall produce all documents and electronically-stored information
(collectively, ‘documents’) in the following categories in their possession,
custody, or control[,] including documents in the possession, custody, or
control of [the Entities.]” (Settlement Agreement § 1(b)(i) (emphasis added)).
The Court disagrees with Plaintiff, as the requirements outlined in Section
1(b)(i) and interrelated provisions are hardly unequivocal.
As an initial limitation on Defendants’ production obligations, Section
1(b)(i) expressly limits the materials that Defendants must produce to those
that are in Defendants’ or the Entities’ “possession, custody, or control.”
(Settlement Agreement § 1(b)(i)). Thus, to the extent Plaintiff is arguing that
Defendants must produce documents or information irrespective of the efforts
it might take Defendants to get them, this reading is belied by the very
provision Plaintiff relies upon. As the Agreement makes clear, if responsive
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documents or information are not within Defendants’ “possession, custody, or
control,” they need not produce them. 2
As another significant limitation, the Agreement circumscribes the efforts
that Defendants must take to comply with their obligations to search for
documents in their “possession, custody, or control.” In this respect, the
prefatory clause of Section 1(b)(iii) states that “[i]n order to satisfy their
obligations to provide all documents in their possession, custody, or control,
[Defendants] shall conduct the following searches[.]” (Settlement Agreement
§ 1(b)(iii)). The Court understands the import of this provision to be that if
Defendants effectuate good-faith searches of the locations enumerated in
Section 1(b)(iii), they will have satisfied their production obligations under
Section 1(b)(i). As further indication of the bounded scope of Defendants’
diligence obligations, Section 1(b)(v) of the Agreement states that Defendants’
production obligations go into effect only “[a]fter conducting the searches
detailed in paragraphs 1(b)(iii) and 1(b)(iv)[.]” (Id., § 1(b)(v) (emphasis added)).
The parties’ decision to trigger Defendants’ production obligations upon
completion of the searches enumerated in Section 1(b)(iii) is a strong indication
of the parties’ intent to tie Defendants’ diligence obligations to this provision.
Therefore, the Court concludes that Defendants’ obligation to produce
materials listed in Section 1(b)(i) is restricted to the searches set forth in
Section 1(b)(iii). Put differently, if Defendants adequately complete their search

2

As described infra at Section B.2, Defendants have taken a constricted view of the
phrase “possession, custody, or control,” especially in interpreting the term “control.”

6

obligations under Section 1(b)(iii), they will have satisfied their obligations to
“provide all documents in their possession, custody, or control.” Thus, the
next question is whether Defendants have, in fact, fulfilled their responsibilities
pursuant to Section 1(b)(iii).
2.

Defendants Have Misconstrued Their Diligence Obligations

Defendants assert that the searches they have conducted bring them in
full compliance with their diligence obligations under the Agreement. As the
Court understands them, Defendants’ investigative efforts comprise:
(i) canvassing both their homes and the portions of 235 Hillside Avenue that
they rent for any electronic devices that they actually own or use (Def. Br. 7;
see also Pl. Br. 4 (noting that Defendants have searched only their two personal
email accounts and two personal iPhones)); and (ii) looking for physical
documents in the portions of 235 Hillside Avenue to which they either have
access to or legally can obtain access (Def. Br. 7-8). As discussed herein,
Defendants’ approach to their diligence obligations under the Agreement is
predicated on at least three erroneous presumptions.
First, Defendants wrongfully presume that Section 1(b)(iii)(c) is the only
provision that requires them to search for ESI and sources of ESI. (See Def.
Br. 3 (asserting that “during negotiations both parties repeatedly expressed
understanding that [Defendants’] obligations to search electronic devices were
intended to be entirely and solely contained in [Section 1(b)(iii)(c)]”)). To the
contrary, nothing in Section 1(b)(iii) restricts the ambit of Defendants’
mandated searches of 235 Hillside Avenue, their home, or any premises used
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by the Entities to physical documents. (See Settlement Agreement § 1(b)(iii)(a),
(b), (d)). Evincing this understanding, Section 1(b)(i) defines “documents” to
include both physical documents and ESI. (Id., § 1(b)(i)). Thus, Section
1(b)(iii)’s directive that Defendants effectuate certain searches for the purpose
of “satisfy[ing] their obligations to provide all documents,” includes searches for
both physical documents and ESI, including electronic devices. (Id., § 1(b)(iii)
(emphasis added)).
Therefore, to the extent Defendants have construed their search
obligations under Sections 1(b)(iii)(a), (b), and (d) as limited only to searches for
physical documents, they have not satisfied their obligations. To put it clearly,
Defendants must search for physical documents as well as electronic devices
and ESI in the following locations: (i) any buildings located at 235 Hillside
Avenue that Defendants have access to or can legally obtain access to (id.,
§ 1(b)(iii)(a)); (ii) their home (id., § 1(b)(iii)(b)); and (iii) any premises used by the
Entities to conduct business (id., § 1(b)(iii)(d). 3
Second, Defendants adopt too restrictive a view of the electronic devices
that are in their “possession, custody, or control” under Section 1(b)(iii)(c). As
an initial matter, the parties have agreed that Defendants’ production

3

Defendants have represented that they “have searched all the electronic devices that
they can access.” (Def. Br. 7). However, in discussing the physical search they
conducted at 235 Hillside Avenue, Defendants explain that they found a handful of
disassembled computers and servers located in the garage that was used as a storage
unit after flooding at the premises. (Id. at 8). Assuming these devices are or were used
to conduct the business of one or more of the Entities, to the extent these computers or
servers have not been rendered fully inoperable by flooding, these are precisely the
types of electronic devices that Defendants must search under Section 1(b)(iii).

8

obligations are coextensive with those imposed by the Federal Rules of Civil
Procedure as they operate in this District. (See Settlement Agreement
§ 1(b)(ii)). Thus, in understanding the scope of the phrase “possession,
custody, or control,” the Court turns to cases interpreting this phrase in the
context of discovery disputes governed by the Federal Rules of Civil Procedure.
On this score, the Court agrees with Plaintiff that, in the context of this
Agreement, the term “control” “does not require legal ownership or physical
possession; all that is required is that the party have the right, authority, or
practical ability to obtain the documents at issue.” Gruss v. Zwirn, 296 F.R.D.
224, 230 (S.D.N.Y. 2013) (quoting Asset Value Fund Ltd. P’ship v. Care Grp.,
Inc., No. 97 Civ. 1487 (DLC) (JCF), 1997 WL 706320, at *9 (S.D.N.Y. Nov. 12,
1997)). (See Pl. Br. 6-7).
While three of the subprovisions of Section 1(b)(iii) specify precise
locations that Defendants must search, Section 1(b)(iii)(c) is broader in that it
directs Defendants to search all electronic devices owned by Defendants or the
Entities that are in Defendants’ possession, custody, or control. (See Section
1(b)(iii)). For the reasons just discussed, Section 1(b)(iii)(c) imposes an
obligation on Defendants to search all qualifying electronic devices that they
can practically obtain, which includes those they can access by making
requests of counsel or accountants. See, e.g., Gruss, 296 F.R.D. at 230
(“[C]ourts in this district have held that documents held by outside counsel are
in the possession, custody, and control of their clients.”); De Vos v. Lee, No. 07
Civ. 804 (JBW), 2008 WL 2946010, at *1 (E.D.N.Y. July 29, 2008) (collecting
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cases for the proposition that “documents in the possession of a party’s
accountant are deemed within that party’s control for purposes of Rule 34
discovery”). Up to this point, Defendants have searched only their personal
email accounts and iPhones, which does not appear to be sufficient for
complete performance under Section 1(b)(iii)(c). Although the record before the
Court does not permit it to assess with precision which of the Entities’
electronic devices Defendants have the “practical ability to obtain,” Plaintiff has
provided documentation supporting its contention that Defendants either held
senior executive roles or were in positions to control the Entities. (See Pl. Br.
8-9). Given these materials, the Court agrees with Plaintiff that Defendants
likely have the “practical ability to obtain” at least some of the Entities’
electronic devices and access at least some of their documents. See In re Flag
Telecom Holdings, Ltd. Sec. Litig., 236 F.R.D. 177, 180-82 (S.D.N.Y. 2006)
(noting that “[t]he concept of ‘control’ has been construed broadly” and finding
that a senior executive “certainly has the prac[ ]tical ability to obtain the
documents sought by plaintiffs”).
The Court understands that Defendants may not have the practical
ability to access and produce all of the documents and information enumerated
in Section 1(b)(i). In any event, Section 1(b)(iii)(c) compels Defendants to search
a broader universe of devices than they appear to have searched at this
juncture. The Court will not hold it against Plaintiff that it is not in a position
to identify specific electronic devices that Defendants must search. Indeed, it
is incumbent upon Defendants to perform their diligence obligations in good
10

faith, which includes engaging in a legitimate effort to identify the devices that
they can practically obtain. (See Settlement Agreement § 1(b)(ii) (“[Defendants’
counsel] shall supervise, manage and conduct the production of documents
with the same degree of professionalism, candor, and ethics as they would
supervise, manage, and conduct the production of documents and information
in a civil action pending in the S.D.N.Y.”)).
Third, Defendants erroneously assert that the Agreement mandates them
to search electronic devices that are “consumer facing,” ostensibly relieving
them of any responsibility to search potentially existing IT architecture or cloud
networks. (Def. Br. 4). Plaintiff interprets Defendants’ position as refusing to
search any business computers or servers. (See Pl. Br. 11). To the extent
Defendants assert such a narrow construction of the electronic devices they
must search, this interpretation flatly contradicts the terms of the Agreement.
The Agreement is clear that Defendants must search “all electronic devices”
owned by them or the Entities that are in Defendants’ possession, custody, or
control. (See Settlement Agreement § 1(b)(iii)(c)). Nowhere does the Agreement
limit Defendants search obligations to “consumer facing” electronic devices.
The Court also sees no basis for Defendants’ disclaiming the
responsibility to search “IT architecture or cloud networks” that are accessible
from electronic devices that fall within the scope of Section 1(b)(iii). The
Agreement does not restrict Defendants’ obligations to search electronic devices
for locally saved files. Thus, to the extent Defendants have the practical ability

11

to access potentially relevant documents on any device to which they have
practical access, the Agreement obligates them to do so.
In sum, Defendants’ diligence obligations under the Settlement
Agreement extend to all electronic devices that are owned either by them or the
Entities and that Defendants can practically access. The Court understands
this to mean that if Defendants know where certain of their or the Entities’
electronic devices are located, they must search them if they have the practical
ability to do so.
3.

The Agreement Obligates Defendants to Produce the Lists

The final issue concerns Defendants’ obligations to prepare and produce
the Lists. The Court concludes that if the Lists are not currently in existence,
Defendants must compile the necessary information to the extent such
information is acquirable by means of their good-faith compliance with
Defendants’ diligence obligations under Section 1(b)(iii), as discussed above.
The Court finds the Agreement to be ambiguous as to whether Section
1(b)(i) creates an affirmative obligation for Defendants to compile the
information necessary to prepare the Lists, as opposed to merely search for
existing versions of the Lists. In resolving this ambiguity, the Court draws
upon its over seven years of experience with this matter and its understanding
that the information contemplated by the Lists is (and has been since the
inception of this case) of critical importance to Plaintiff. The Court is convinced
that Plaintiff would not have entered into the Agreement on the understanding
that Defendants only had to search for the Lists they had reason to believe did
12

not exist. (See Pl. Br. 5). Therefore, to the extent Defendants are able to glean
the information necessary to prepare the Lists by performing the searches set
forth in Section 1(b)(iii), they must compile and produce that information.
CONCLUSION
To summarize, the Court finds that Defendants’ obligations to search for
the documents and information in the categorized list set forth in Section 1(b)(i)
are circumscribed by Section 1(b)(iii). Defendants, however, have thus far
asserted too narrow an interpretation of their diligence obligations and are not
currently in full compliance with their obligations under the Agreement. To
help the parties chart a path forward, the Court articulates the following steps
that Defendants must take pursuant to the Agreement:
•

Compile the Lists, to the extent the information necessary to do so is
obtainable via good-faith compliance with their diligence obligations
as set forth in Section 1(b)(iii) (including by seeking such information
from counsel or accountants);

•

Conduct searches for both physical documents and ESI at any
premises used by the Entities to conduct business pursuant to
Section 1(b)(iii)(d);

•

Expand their searches of electronic devices to servers and computer
equipment that Defendants have the practical ability to obtain and
either know or have reason to know contain responsive documents
(including by seeking such material from counsel or accountants);

•

Ascertain, to the extent practicable, the location of all Entities’ servers
and email accounts, and extract and produce from them all
responsive documents (including, without limitation, by searching for
ESI at the locations specified in Sections 1(b)(iii)); and

•

Expand their searches of electronic devices to include cloud networks
or other IT infrastructure that have been used by Defendants or the
entities, to the extent Defendants have the practical ability to access
such networks.
13

As the Court previously stated, the Agreement does not impose upon
Defendants a free-standing obligation to produce all of the documents and
information enumerated in Section 1(b)(i). Rather, the Agreement meaningfully
limits what Defendants must produce to those materials that are within their
possession, custody, or control, which the Court has interpreted to include
materials that can be acquired by seeking them from counsel or accountants.
The Court recognizes that many (if not all) of the Entities ceased operating as
ongoing concerns some years ago. For this reason, the Court will not
necessarily infer bad faith or an intent to obstruct in the event Defendants are
unable to produce all of the materials contemplated by the Agreement. Thus,
to some extent, Plaintiff must rely on Defendants’ integrity and good faith in
ascertaining the scope of the documents, information, and electronic devices
that they can practically access. The Court cannot guarantee that Plaintiff will
receive all of the information enumerated in the Agreement, but Defendants
must expand their efforts beyond the searches they have performed so far.
The Court GRANTS Defendants a period of 60 days within which to
comply with the provisions of this Order. The parties are directed to submit a
joint letter to the Court addressing any remaining disputes regarding
Defendants’ compliance with the Agreement (and, to be clear, the Court hopes
that there are none) on or before September 23, 2022.

14

SO ORDERED.
Dated: July 18, 2022
New York, New York
KATHERINE POLK FAILLA
United States District Judge

15