Ophir v. Koneksa Health Inc et al

Filing 44

ORDER denying without prejudice to renewal by formal motion 32 Letter Motion for Discovery. In a letter dated April 19, 2024, Defendants request an order compelling Plaintiff to return and destroy documents in his possession, including a memora ndum from Defendant Koneksa Health Inc.'s outside counsel and an email from Plaintiff to Defendant Benko regarding the memorandum, on grounds of privilege. See ECF No. 32. An order issued April 30, 2024, found that Defendants had waived any priv ilege applicable to documents or communications substantively described in the Complaint. The Complaint describes the memorandum and Plaintiff's communications with Benko regarding the contents of the memorandum. See Compl. PP 64, 73. Accordingl y, Defendants' request is denied, as any privilege applicable to the documents in question has been waived. Defendants also request an order compelling production of documents regarding Plaintiff's compensation following his employment with Koneksa Health, in particular his tax returns and the tax returns of any entity Plaintiff controls. "A party seeking to compel production of tax returns in civil cases must meet a two-part test: first the court must find that the returns are re levant to the subject matter of the action; and second, that there is a compelling need for the returns because the information contained therein is not otherwise readily obtainable." Hawkins v. MedApproach Holdings, Inc., 326 F.R.D. 391, 393 (S .D.N.Y. 2018). On the parties' letters, the returns are relevant to the case, as they go to Plaintiff's damages. That Plaintiff files taxes jointly with his wife admittedly diminishes their probative value, but does not render the returns i rrelevant, as they still reflect Plaintiff's income. However, Defendants do not establish that the tax returns contain information that is not otherwise readily obtainable, in particular, through Plaintiff's deposition testimony regarding a ny sources of income following the termination of his employment. Accordingly, Defendants' request for production of tax returns is denied, without prejudice to renewal. The Clerk of Court is respectfully directed to close the motion at ECF No. 32.. (Signed by Judge Dale E. Ho on 5/10/2024) (ks)

JOSEPH & KIRSCHENBAUM LLP
Attorneys at Law
Charles Joseph
Maimon Kirschenbaum
Denise Schulman
Josef Nussbaum
Lucas C. Buzzard
Leah Seliger
Michael DiGiulio

32 Broadway, Suite 601 D.
New York, NY 10004
Phone [phone]
Fax [phone]
www.jk-llp.com

May 3, 2024
Via ECF
Honorable Dale E. Ho
Southern District of New York
500 Pearl Street
New York, NY 10007
Re:
Ophir v. Koneksa Health Inc., et al., No. 1:23-cv-09145– Plaintiff’s Opposition
Letter to Defendants’ Letter Motion to Compel Discovery
Dear Judge Ho:
We represent the Plaintiff, Gol Ophir, in the above referenced matter and write, pursuant to
this Court’s Orders (Dkt. Nos. 33, 35) and Individual Rule 4(j), to oppose Defendants’ April 19, 2024,
Letter Motion for Discovery (“Def’s Letter”) (Dkt. No. 32). For the reasons provided herein, the Court
should deny Defendants’ requests.
I.

The Privileged Materials Plaintiff Produced Should Remain in the Record as This
Court has Determined Defendants Waived The Privilege and The Court Does Not
Have the Authority To Provide the Relief Defendants Seek.

Defendants ask the Court to order Plaintiff to “return and destroy Koneksa’s confidential and
privileged materials that he has improperly retained.” Def’s Letter at 1. Specifically, in discovery,
Plaintiff produced 1) a memorandum drafted by Koneksa’s outside counsel (the “Obermayer Memo”)
that Plaintiff sought as General Counsel of Koneksa and which reflects a central component of
Plaintiff’s alleged protected activity, for which Plaintiff contends he was unlawfully terminated, and
2) an email from Plaintiff to Defendant Benko in which he relays the Obermayer Memo, which
Plaintiff contends was protected activity for which he was unlawfully terminated.
In granting in part Plaintiff’s motion to compel, this Court already determined that Defendants
waived the attorney-client privilege for these communications (among others), which were previously
identified in Plaintiff’s complaint. See Dkt. No. 37 at 3-5. As Defendants have requested that the
Court address the issue of whether Plaintiff was required to return and destroy these two documents
“together” with Plaintiff’s request for the production of privileged documents, see Def’s Letter at n.1,
the Court’s Order compelling the production of these (and other) documents related to Plaintiff’s
protected activity resolves Defendants’ request here. The Court should deny Defendants’ request to
have Plaintiff return and destroy these two documents as Defendants have waived the attorney-client
privilege for these documents, and they are permitted to be in the record.
Defendants’ request also seeks a remedy that the Court cannot issue. Defendants ask the Court
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to order Plaintiff to destroy documents in his possession based on 1) his contract with Koneksa, and
2) the New York Rules of Professional Conduct. See Def’s Letter at 2. Defendants do not cite to, and
Plaintiff is not aware of, any case in which a court ordered as relief on a discovery motion the
destruction or return of documents in an employee-party’s possession based upon rights or obligations
in the employee’s employment contract. Defendants have not brought a contract claim against
Plaintiff, and, absent a judgment against Plaintiff that he violated his contract, this Court does not
have authority to grant Defendants’ injunctive relief based upon their allegations that Plaintiff
violated his contract. Neither does the Court have authority to compel Plaintiff to destroy documents
based on the New York Rules of Professional Conduct.
II.

Defendants’ Fail to Establish a Compelling Need for Plaintiff’s Tax Returns

Defendants requested the Plaintiff produce “[a]ll documents referring or relating to any wages
and/or compensation received by Plaintiff, or any entity owned by Plaintiff subsequent to his
employment with Koneksa, including but not limited to cash payments, pay stubs, W-2’s, 1099’s,
state and federal income tax returns (with schedules), and bank and/or checking account records.”
(RFP No. 26, Exhibit 2 to Def’s Letter) (Dkt. No. 32-2). Plaintiff objected to the request in that it is
overbroad and unduly burdensome, in that it seeks documents that do not reflect any subsequent
income (and, thus, it seeks irrelevant documents), and that Defendants failed to show a compelling
need for Plaintiff’s tax returns.
Neither Plaintiff nor any entity owned by Plaintiff have received “any wages or
compensation” subsequent to his employment with Defendant. He has not received any 1099s or W2’s as compensation for work since his employment with Defendants.1 As such, Plaintiff has no
documents responsive to this Request. Nevertheless, Plaintiff has produced all of the records in his
possession related to his unemployment benefits he received, his contract with his current employer
(a start-up company) for which he does not receive a wage or any other compensation, and the stock
purchase agreement that he received from his current employer (which reflects no compensation, only
the agreement to buy stock at par value).2
Defendants are not entitled to Plaintiff’s tax returns because they are not probative of
Plaintiff’s earned income after his employment with Defendants and Defendants have not shown a
compelling need for them. In this Circuit, “courts are typically reluctant to compel the[] disclosure
[of tax returns] because of both the private nature of the sensitive information contained therein and
the public interest in encouraging the filing by taxpayers of complete and accurate returns.” Uto v.
Job Site Services Inc., 269 F.R.D. 209, 212 (E.D.N.Y. 2010). “Although income tax returns provide
a reliable source of financial information [] they reveal highly sensitive information, such as the social
security numbers of taxpayers, medical and other deductions, and spousal information…. which may
not be relevant to the litigation.” Malinowski v. Wall St. Source, Inc., Case No. 09 Civ. 9592, 2011
U.S. Dist. LEXIS 33650, at *9 (S.D.N.Y. Mar. 18, 2011) (internal citations and quotations omitted).
“In order for a court to compel discovery of income tax returns, a two-pronged test must be
met: first the court must find that the returns are relevant to the subject matter of the action; and
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Plaintiff has received a 1099 for his unemployment benefits, which Plaintiff produced to Defendants.
Defendants incorrectly characterize the stock-purchase agreement as an “equity option grant” when it is plainly an
agreement revealing Plaintiff’s purchase of stock at par value, not an “option” agreement for a right to purchase stock in
the future.
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second, that there is a compelling need for the returns because the information contained therein is
not otherwise readily obtainable.” Rosas v. Alice’s Tea Cup, LLC 127 F. Supp. 3d 4, 11 (S.D.N.Y.
2015) (quoting SEC v. Cymaticolor Corp., 106 F.R.D. 545, 547 (S.D.N.Y. 1985)). “Under the second
prong, if the information contained in a tax return is otherwise available to a party from other sources,
compelling production should be denied.” Gates v. Wilkinson, Case No. 03-CV-763, 2005 U.S. Dist.
LEXIS 5523, at *5 (N.D.N.Y. April 5, 2005); see e.g., Hazeldine v. Beverage Media, Case No. 94
Civ. 3466, 1997 U.S. Dist. LEXIS 8971, at *12 (S.D.N.Y. June 26, 1997) (denying order compelling
production of tax returns where information was available through deposition and “other less
intrusive” discovery means). Courts have found that depositions are an alternative to tax returns in
verifying financial information. See Sadofsky v. Fiesta Prods., LLC, 252 F.R.D. 143, 150 (S.D.N.Y.
2008) (“Depositions have also been held to constitute a less intrusive source for obtaining
information.”). “Modern courts tend to place the burden on the ‘party seeking discovery to
demonstrate both relevancy and a compelling need.’” Id. (quoting Uto, 269 F.R.D. at 212).
As an initial matter, Plaintiff’s tax returns are not probative of Plaintiff’s earned income after
his employment with Defendants and are thus not relevant to the litigation. Plaintiff files his taxes
jointly with his wife, and therefore these tax returns would not reveal Plaintiff’s individual income,
only the total income of Plaintiff and his wife. Thus, the tax returns sought are not relevant to the
litigation, including to Plaintiff’s claims for backpay damages.
Moreover, Defendants have not even attempted to meet their burden of showing a compelling
need for Plaintiff’s tax returns. Defendants do not have a compelling need for Plaintiff’s tax returns,
as Plaintiff can show his income (or lack thereof) through the production of any W-2s and 1099s he
receives and through deposition testimony. See e.g., Malinowski, 2011 U.S. Dist. LEXIS 33650, at
*10 (“Defendants fail to demonstrate that they were unable to obtain the information through less
intrusive means, such as by seeking production of W-2’s and 1099’s… whether [Plaintiff] refused to
produce the documents, or whether the production reflects inconsistencies so as to require
verification.”). In fact, Plaintiff has produced all the W-2’s and 1099’s he has received since his
employment termination. Defendants’ apparent position that Plaintiff is hiding work income or
compensation is completely speculative and cannot be the basis for justifying the production of his
tax returns. See id. at *11 (characterizing and rejecting Defendants’ argument that Plaintiff’s tax
return “could lead to evidence that Plaintiff was deriving income from outside sources” as “purely
speculative”). Because Defendants failed to show a compelling need for the tax returns, the Court
should deny their motion to compel.3
Respectfully Submitted,
/s/ Michael DiGiulio
Michael DiGiulio
32 Broadway, Suite 601
New York, NY 10004
3

To the extent that the Court does order Plaintiff to produce his tax returns, Plaintiff requests that the Court allow him to
redact all information in the returns other than information showing earned income. See e.g., Michelman v. Ricoh Ams.
Corp., Case No. 11-CV-3633, 2013 U.S. Dist. LEXIS 25143, at *7 (E.D.N.Y. Feb. 22, 2013) (permitting Plaintiff “to
redact all information from [his] tax returns that does not relate to [his] income and sources of income”).

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Tel: [phone]
Fax: [phone]
Attorneys for Plaintiff
In a letter dated April 19, 2024, Defendants request an order compelling Plaintiff to return and
destroy documents in his possession, including a memorandum from Defendant Koneksa Health
Inc.'s outside counsel and an email from Plaintiff to Defendant Benko regarding the memorandum,
on grounds of privilege. See ECF No. 32. An order issued April 30, 2024, found that Defendants had
waived any privilege applicable to documents or communications substantively described in the
Complaint. The Complaint describes the memorandum and Plaintiff's communications with Benko
regarding the contents of the memorandum. See Compl. ¶¶ 64, 73. Accordingly, Defendants'
request is denied, as any privilege applicable to the documents in question has been waived.
Defendants also request an order compelling production of documents regarding Plaintiff's
compensation following his employment with Koneksa Health, in particular his tax returns and the
tax returns of any entity Plaintiff controls. "A party seeking to compel production of tax returns in
civil cases must meet a two-part test: first the court must find that the returns are relevant to the
subject matter of the action; and second, that there is a compelling need for the returns because the
information contained therein is not otherwise readily obtainable." Hawkins v. MedApproach
Holdings, Inc., 326 F.R.D. 391, 393 (S.D.N.Y. 2018). On the parties' letters, the returns are relevant to
the case, as they go to Plaintiff's damages. That Plaintiff files taxes jointly with his wife admittedly
diminishes their probative value, but does not render the returns irrelevant, as they still reflect
Plaintiff's income. However, Defendants do not establish that the tax returns contain information
that is not otherwise readily obtainable, in particular, through Plaintiff's deposition testimony
regarding any sources of income following the termination of his employment. Accordingly,
Defendants' request for production of tax returns is denied, without prejudice to renewal.
The Clerk of Court is respectfully directed to close the motion at ECF No. 32.
Dale E. Ho
United States District Judge
Dated: May 10, 2024
New York, New York

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