Sandoval v. Uphold HQ Inc.

Filing 43

ORDER denying without prejudice 37 Letter Motion for Discovery. Application DENIED without prejudice to renewal at such time as the party discovery stay is lifted. SO ORDERED. (Signed by Magistrate Judge Barbara C. Moses on 9/16/2022) (rro)

Case 1:21-cv-07579-VSB-BCM Document 43 Filed 09/16/22 Page 1 of 5
Lieff Cabraser Heimann & Bernstein, LLP
250 Hudson Street, 8th Floor
New York, NY 10013-1413
t 212.355.9500
f 212.355.9592

9/16/22

Giskan Solotaroff & Anderson, LLP
90 Broad Street, 2nd Floor
New York, NY 10004
t 212.847-8315 x 12

August 31, 2022
Via CM/ECF
The Honorable Barbara Moses, Magistrate Judge
United States District Court for the
Southern District of New York
Daniel Patrick Moynihan Courthouse
500 Pearl Street, Room 740
New York, NY 10007
Re:

Addison Sandoval, et al. v. Uphold HQ, Inc., No. 1:21-CV-07579 (VSB) (BCM)

Dear Judge Moses:
We represent Plaintiffs and the Proposed Class. In accordance with Local Civil Rule 37.2
and § 2(b) of Your Honor’s Individual Practices, we respectfully request a discovery conference
relating to Defendant Uphold HQ, Inc.’s (“Uphold”) refusal to meet and confer about ESI search
methodologies, search terms, and custodians. This categorical refusal violates the express
provisions of the Order Establishing Protocol for Production of Electronically Stored
Information (“ESI Order”) (Dkt. No. 20), and is in derogation of applicable law and longstanding ESI practice.
On August 1, 2022, Plaintiffs requested a meet and confer with Uphold on search terms
and custodians, in accordance with the ESI Order, and (as is customary in this generally iterative
process) informed by what Plaintiffs could glean from potential sources. Attachment 1. Uphold
refused to agree to any search term and custodial discovery, claiming the request was untimely,
notwithstanding that over five (5) months remained before the close of discovery. Plaintiffs
immediately urged Uphold to reconsider, via letter on August 19, 2022, and provided authority
in support of their position. Attachment 2. Uphold failed to respond and this motion follows.1
Application DENIED without prejudice to renewal at such time as the party discovery stay is lifted.
SO ORDERED.
_________________________
Barbara Moses
United States Magistrate Judge
September 16, 2022

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Hon. Barbara Moses, Magistrate Judge
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I.

Additional Background Pertinent to the Dispute.

On May 20, 2022, the Court entered the ESI Order that, among other things, requires the
parties to:
(a) “meet and confer and reach agreement as to the method of searching, and words,
terms, and phrases (if any) to be used to locate and identify potentially responsive ESI, and/or
any combination of culling methodologies” Dkt. No. 30 at Section II.C; and,
(b) “meet and confer to identify the custodians whose email and other ESI will be
searched, not to exceed 10 for any party, and any other electronic systems that will be searched,
using the agreed search terms from Section II.C.” Id. at Section II.D.
On May 23, 2022, Uphold served its Responses and Objections to Plaintiffs’ First Set of
Requests for Production of Documents (RFPs) and produced a set of responsive documents. An
undisclosed percentage (if not all) of these documents previously had been gathered and
reviewed by Uphold and produced to the Bankruptcy Examiner in In re Cred, Inc., Case No. 2012836 (Bankr. D. Del.).
On May 31, 2022, Plaintiffs challenged several of Uphold’s objections to Plaintiffs’ RFPs
and the parties conferred on June 7, 2022. Uphold has not produced any additional documents
since this initial production though it undertook to follow-up in certain areas.
On August 1, 2022, Plaintiffs followed-up on the unresolved disputes from the prior meet
and confer, identified several apparent deficiencies in Uphold’s document production, and (as
noted above, and as relevant here) requested a meet and confer on the topics required by the ESI
Order: search methodologies, search terms, and custodians. Uphold responded that it could not
meet and confer until August 18, 2022, over two weeks later. Plaintiffs agreed to meet and
confer as soon as Uphold was able.
At 2:00 p.m. EDT on August 18, 2022,2 Plaintiffs’ counsel Christopher Coleman and
Catherine Anderson and Uphold’s counsel Benjamin Bianco and Caitlin Trow met and conferred
by telephone for approximately twenty minutes. Again as noted earlier, Uphold claimed ESI
discussions were untimely, notwithstanding that fact discovery remained open for over five (5)
more months. See Dkt. No. 27, Scheduling Order ¶ 7 (“All fact discovery is to be completed no
later than January 13, 2023.”).
2

In June and July, in addition to the ongoing discovery in this matter, Plaintiffs’ counsel engaged in litigation in the
bankruptcy court to protect absent class members’ due process interests. Specifically, the Cred Trustee sought
permission to seek to acquire class members’ claims against Uphold under circumstances that, from Plaintiffs’
perspective, did not adequately disclose either this class action or that, under the proposed (and now-rejected) claims
procedure, the class members would have needed to share any recovery with other third parties without adequate
disclosure. Dkt. 1040, In re Cred, Inc., Case No. 20-12836 (Bankr. D. Del.). While not pertinent to the instant
dispute, Plaintiffs note this development only to provide a more fulsome background on the course of the litigation
so far.

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Hon. Barbara Moses, Magistrate Judge
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The following day, August 19, 2022, Plaintiffs followed up by letter, requesting that
Uphold reconsider its position and advise Plaintiffs by August 25, 2022 if it would engage in the
required ESI negotiations. Uphold’s counsel neither addressed Plaintiffs’ authority, nor provided
any support of its own.
II.

Argument
A.

The ESI Order and Applicable Law and Practice Require Conferral.

Uphold’s refusal to meet and confer about ESI search methodologies, search terms, and
custodians explicitly violates this Court’s ESI Order. The ESI Order is unambiguous: “The
parties shall meet and confer and reach agreement” as to search methodologies, search terms,
and custodians. ESI Order §§ II.C and II.D (emphasis added).
Further, the applicable law on electronic discovery “requires cooperation between
opposing counsel and transparency in all aspects of preservation and production of ESI.”
William A. Gross Const. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134, 136 (S.D.N.Y.
2009) (emphasis supplied); see also Capitol Recs., Inc. v. MP3tunes, LLC, 261 F.R.D. 44
(S.D.N.Y. 2009) (describing defendant’s conduct in ESI discovery as a “failure to heed
Magistrate Judge Andrew Peck's recent ‘wake-up call’ regarding the need for cooperation
concerning e-discovery,” citing William A. Gross.).
Discovery in this case is open and will remain open for over four (4) months. Uphold’s
position that it is too late to engage in required electronic discovery is without merit.
Moreover, this Court was “one of the early signatories to The Sedona Conference
Cooperation Proclamation” and “‘strongly endorses The Sedona Conference Proclamation.’”
Moore v. Publicis Groupe, 287 F.R.D. 182, 192 (S.D.N.Y. 2012) (quoting William A. Gross, 256
F.R.D. at 136). Uphold’s refusal to engage in required ESI negotiation undermines the core
principle of the Sedona Conference Proclamation—the “mandate for counsel to act
cooperatively” in the context of electronic discovery. Sedona Proclamation, 10 Sedona Conf. J.
331, 333 (2009). “Cooperation between counsel regarding the production of electronically stored
information ‘allows the parties to save money, maintain greater control over the dispersal of
information, maintain goodwill with courts, and generally get to the litigation’s merits at the
earliest practicable time.’” The Case for Cooperation, 10 Sedona Conf. J. 339, 339 (2009).
B.

Plaintiffs are Prejudiced by Uphold’s Non-Compliance.

Uphold has refused to act cooperatively, pointing to the single set of documents it
produced,3 declining to conduct any further searches, or even to negotiate with Plaintiffs about
3

Plaintiffs do not have information about any of the search methodologies Uphold has employed, what sources it
examined, or whether all of its production was simply a re-production (there is nothing wrong with efficiency, but
the point is Plaintiffs lack information they are entitled to have). Plaintiffs also observe that the number of pages of

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Hon. Barbara Moses, Magistrate Judge
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the parameters of those searches. Even if the law were not dispositive in favor of Plaintiffs’
position, William A. Gross, 256 F.R.D. at 136 (the law “requires cooperation between opposing
counsel” on ESI discovery), the practical prejudice is clear.
Notably, even a review of the documents Uphold has produced reveals the sort of
deficiencies or incomplete productions that may be efficiently addressed by standard ESI
discussions. As illustrative examples:
(a) Uphold has produced documents referencing relevant discussions among Uphold
employees on a number of business messaging platforms, including Slack, WeChat, and
Telegram, yet Uphold has not produced these messages and, indeed, refuses to disclose if it has
even conducted any searches for responsive documents on these platforms. This is the sort of
topic that is appropriate for a meet and confer.
(b) Plaintiffs requested documents relating to Uphold’s marketing and promotion of Earn
to consumers, yet Uphold has not produced social media marketing for the Earn program. This is
potentially quite troubling given allegations in the July 22, 2022 complaint filed by the Cred Inc.
Liquidation Trust against Uphold that Uphold “engaged in a clean-up campaign deleting past
false advertisements and deceptive social media posts” to distance itself from Cred following
announcements that Cred was nearing bankruptcy. Case No. 20-12836 (Bankr. D. Del.) (Dkt.
No. 1042) ¶ 5; ¶ 450 (“Uphold also wasted no time in trying to remove and destroy marketing
materials promoting Cred.”).
(c) Plaintiffs requested that Uphold produce documents and communications relating to
customer complaints about the “Earn” program, and, while there are certain complaints in the
file, Plaintiffs do not see complaint investigation files or its policies and procedures for
investigating and responding to customer complaints.
To be clear, Plaintiffs are not seeking a ruling ordering the production of these
substantive categories; instead, recognizing the information disparity that means Plaintiffs
simply do not know what they do not know, Plaintiffs are seeking a standard meet and confer.
In 2022, the need to comply with the terms of an ESI order and engage in basic, iterative
ESI discovery negotiations should not be in dispute. Uphold’s position that it is too late to
engage in required discovery is without merit.
Thus, Plaintiffs respectfully request that the Court order Uphold to comply with the ESI
Order’s requirement that the parties meet and confer about ESI search methodologies, search
terms, and custodians, and to promptly conduct the required searches and produce all documents
responsive to Plaintiffs’ Requests for Production of Documents.

documents Uphold has produced (many of which are spreadsheets) is not indicative of the responsiveness or
completeness of Uphold’s production.

Case 1:21-cv-07579-VSB-BCM Document 43 Filed 09/16/22 Page 5 of 5
Hon. Barbara Moses, Magistrate Judge
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August 31, 2022

Respectfully Submitted,

LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
[e-mail]
250 Hudson Street, 8th Floor
New York, New York 10013-1413
Telephone: [phone]
LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
Christopher E. Coleman
[e-mail]
222 2nd Ave. South, Suite 1640
Nashville, Tennessee 37201
Telephone: [phone]
GISKAN SOLOTAROFF & ANDERSON
LLP
Catherine E. Anderson
[e-mail]
90 Broad Street, 2nd Floor
New York, New York 10004
Telephone: [phone]
Attorneys for Plaintiffs and the Proposed
Class
cc:

All counsel of record (via ECF)