DECCAN VALUE LLC v. MALIK, JOHN I. MALIK, JOHN, I. v. DECCAN VALUE LLC DOCKET NO: FST CV 21-6052725 S, DOCKET NO: FST CV 21-6049964 S Superior Court of Connecticut, JUDICIAL DISTRICT OF STAMFORD. AT STAMFORD December 26, 2023 Krumeich II, Edward T., Judge MEMORANDUM OF DECISION UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING. *1 On February 15, 2023, this Court granted the motion of John I. Malik (“Malik”) for commissions to take the deposition of Robert F. Wallace (“Wallace”), the CEO of Stanford University's endowment, and Silpa S. Pericherla (“Pericherla”) of the Lucile Packard Foundation.[1] On March 2, 2023, this Court denied a motion to reargue the motion for the above commissions filed by Deccan Value, LLC (“Deccan”)[2] but granted a motion for clarification of its order, which had rejected Deccan's arguments that the third-party discovery was not warranted: “The scope of discovery under P.B. § 13-2 is broad. P.B. § 13-26 provides that a party may take the deposition of any person upon oral examination. The limited discovery sought in the subpoenas relates to matters at issue in the pending action. There is some basis for assuming the deponents have knowledge that may assist in the prosecution or defense of the actions reasonably calculated to lead to the discovery of admissible evidence that is available from deponents with substantially greater facility than it could otherwise be obtained by the deposing party. Malik is not limited to discovery from Deccan or Bodas concerning communications with the deponents on relevant subjects. The narrow scope of the discovery sought here contrasts with the excessively broad scope of the discovery that led the court to grant a protective order on good cause in Longwood Engineered Products, Inc. v. Polyneer, Inc., 2004 WL 2287771 *3-5 (Conn.Super. 2004). The Court will not assume that Malik is seeking the depositions to smear Deccan and Bodas or for any other nefarious motives. On its face, the discovery sought falls within the permissible scope of discovery related to matters at issue concerning which it is reasonable to assume the deponents may have knowledge material to the subject matters at issue. The test for discovery is not whether deponents participated in the events at issue but whether they may have knowledge of pertinent matters. The discovery sought is not unduly burdensome to Deccan or Malik, no good cause has been shown to stay issuance of the subpoenas. That the discovery is sought from two deponents connected to Deccan's clients and there is a risk of embarrassment and harm to their business relationship are not sufficient grounds to stay the depositions permitted under our discovery rules.” *2 Malik subpoenaed the witnesses pursuant to the commissions issued by this Court. Before the witnesses were deposed Deccan filed motions to quash the subpoenas in the California Superior Court, making many of the same arguments already rejected by this Court.[3] On October 24, 2023, Judge Frederick S. Chung, Judge of the Superior Court for the County of Santa Clara, granted motions to quash the subpoenas to Wallace and Pericherla. Having reviewed Judge Chung's order this Court disagrees with Judge Chung's analysis of the discoverability of the information sought for discovery in the Connecticut action. In particular, as this Court had previously held, this Court does not agree with Judge Chung's conclusion that “the requested discovery either does not appear to be relevant or reasonably calculated to lead to the discovery of admissible evidence, or should have been obtained in the Connecticut action....” The Court does agree with Judge Chung's observation that “[t]he Connecticut Court is far better equipped to determine what is relevant or discoverable for that case ....”[4] Indeed, this Court questions whether Judge Chung was informed about the decisions of this Court that had rejected similar arguments and had already determined the materiality and reasonable nexus between the third-party discovery and the Connecticut actions,[5] that the two cases were companioned for purposes of discovery and trial or about the allegations in the claim in Deccan v. Malik that Malik had disparaged Deccan and damaged Deccan's reputation and client relationships and in the counterclaim that alleged Deccan and Bodas had disparaged Malik to Deccan clients.[6] Judge Chung appears to have been uninformed about and unaware of these salient facts concerning the Connecticut litigation.[7] *3 Malik had sought discovery from Deccan concerning disparaging communications to clients about Malik and the Securities and Exchange Commission (“SEC”) investigation of Deccan.[8] Only very recently has Deccan produced documents that may support Malik's disparagement claim that establish there were such communications with Deccan clients related to these subjects on August 17, 2022.[9] There is no requirement under our discovery rules that a party may only seek discovery from an opponent concerning communications with third parties or that a party must exhaust all efforts to obtain disclosure from the other party before conducting third-party discovery.[10] This Court considered the propriety of seeking third-party discovery before it issued the commissions to obtain discovery of information and documents within the knowledge and possession of the designated witnesses in California that would be of assistance in the prosecution or defense of the companioned actions as provided under Section 18-2 of the Practice Book. Disclosures by Deccan do not obviate the need for discovery from third parties about the alleged damage to Deccan's reputation and relationship with its clients as alleged in the complaint by Deccan in Deccan v. Malik or the disparagement that is subject of Malik's counterclaim in that action, which alleged damage to Malik's reputation. The third-party discovery sought concerns information peculiarly within the knowledge of the recipients of information about the SEC investigation or disparaging comments about Malik likely found memorialized in the client's own communications and memoranda. Given new evidence that disparaging comments were made by Deccan to clients related to the SEC investigation and Malik on August 17, 2022, it is not mere “speculation” that documents related to the disparagement and SEC investigation may exist in the files of recipients, as Judge Chung suggested. Institutions like those for whom Wallace and Pericherla work, tend to record material information of this sort and retain records; the existence and content of such documents is a proper subject for third-party discovery. As it turned out, Deccan has very recently and belatedly produced communications with its clients on the very subjects concerning which this Court has ruled were discoverable in the companioned actions.[11] In response to Judge Chung's rhetorical question ---“how would any such information that was never conveyed to Defendants be relevant to (or reasonably calculated to lead to admissible evidence for) the Connecticut case between Malik and Defendants?” —the obvious answer is that it would relate to Deccan's claim that its reputation and relationship with clients was damaged by Malik and Malik's claim his reputation was harmed by Deccan's disparagement of Malik to those clients and could elicit evidence that Deccan's clients had received or were aware of such communications and information and whether the clients’ opinions of Deccan and Malik were influenced thereby. *4 Judge Chung, perhaps rightly, chided Malik's California counsel: “Malik fails to explain why Packard's or Stanford's ‘mental impressions’ have any relevance to the Connecticut case.” A similar criticism could have been directed at Deccan's California counsel who withheld material information from Judge Chung about the Connecticut cases. Notably, Judge Chung summarized the claims made by Malik in the Malik v. Deccan case, the only complaint provided to him, but not the disparagement claim by Deccan in the complaint of Deccan v. Malik about harm to Deccan's client relations or the disparagement counterclaim in that companion case. After summarizing the claims in Malik v. Deccan, Judge Chung observed that “the court does not see how the mental impressions of one of Defendants’ customers---which were never communicated to either of the parties—would have any possible bearing on any of these causes of action.” In Deccan v. Malik Deccan alleged that Malik's communications about the SEC investigation damaged its reputation and relationship with its clients. Also, certainly information about the clients’ receipt and review of disparaging materials about Malik and the reactions thereto by recipients is discoverable on the disparagement counterclaim. Wallace's and Pericherla's “mental impressions” representing Stanford and Packard are relevant to their understanding of the alleged damage to Deccan's reputation and client relationships, as well as the alleged disparagement and harm caused by any disparagement on Deccan's or Malik's reputation. Counsel apparently cherrypicked the information fed to Judge Chung and deprived him of the material information related to the Connecticut actions he needed to make an informed decision. To be fair to Judge Chung, California counsel does not appear to have informed him about Deccan's claim that Malik had damaged Deccan's reputation and relationship with its clients or that the third party discovery was sought on Malik's disparagement counterclaim or that discovery was companioned in both cases so that commissions were issued for discovery from customers who may have been recipients of disparaging comments about Malik and/or information about the SEC investigation from Deccan or Bodas.[12] To clear up any misunderstanding, the Court hereby renews its commissions for the depositions of Wallace and Pericherla and authorizes Malik to subpoena documents related to the SEC investigation of Deccan and Bodas, communications to them and/or the organizations they represent about Deccan or Bodas or Malik concerning the SEC investigation of Deccan or Bodas or concerning Malik, including any communications by Deccan or Bodas that disparage Malik or concern his employment, conduct, character or the termination of his relationship with Deccan, and any responses, records or other documents of deponents related thereto.[13] *5 To the extent Deccan and Bodas have objections related to the relevance and scope or propriety of the third party depositions commissioned by this Court and subpoenas issued thereunder, Deccan and Bodas are ordered to address them to this Court for adjudication in the first instance, rather than to a foreign court that lacks background about the extensive motion practice in which the parties have engaged in these cases.[14] Deccan and Bodas are further ordered to advise any deponents and any forum court asked to intervene in the third party depositions about this decision and the orders issued herein, as well as the previous rulings by this Court upholding the discoverability of the above topics for third party discovery in connection with the companioned actions.[15] Footnotes [1] The motion for commissions, motion to reargue and related orders were filed in the companion case, Malik v. Deccan Value, LLC, FST CV 21-6049964 S, with the companioned caption of both cases. The commissions were granted for third-party depositions in both companioned cases, and the commissions and subpoenas appended to the motion for commissions granted by this Court reflected the captions of both of the companioned cases. [2] The parties to the above companioned lawsuits referred to as “Deccan” herein are Deccan Value LLC, Deccan Value Investors GP LLC and Deccan Value Investors L.P.; Deccan's founder and Managing Member, Vinit M. Bodas (“Bodas”) is a third-party defendant to the counterclaim in Deccan v. Malik, FST CV 21-6052725 S. [3] The parties were represented by California counsel. Presumably, Deccan's Connecticut counsel communicated with them about the unsuccessful efforts to preclude the third-party depositions. Later Stanford also moved to quash the subpoena to Wallace reiterating arguments about the discoverability of the information sought raised by Deccan and questioning whether there were any responsive documents. It is not known whether Deccan's counsel communicated with Stanford's counsel about the commissions and discovery orders of this Court. A copy of this decision should be forwarded to deponents by Deccan so there is no future misunderstanding about this Court's rulings. [4] The Court does not agree the questions related to the third-party depositions were mooted by Judge Chung's decision. The Court has re-issued the commissions and has explained its reasons therefore so that any further motions to quash proceedings will be before a better informed forum tribunal, before Judge Chung or another California judge. Alternatively, Malik may seek to reargue the decision on the motions to quash so the depositions may proceed on the original commissions. In any event, the issue of third-party depositions in the companioned cases is raised in pending motions decided today by this Court. [5] Judge Chung's observation about motions in the Connecticut action reveal that he was not informed the motions were already decided in favor of the third-party depositions: “If there are indeed pending motions in Connecticut that cover the same subject matter, then there is no good cause—indeed, no cause whatsoever—for this court to consider duplicative third-party document requests.” There was not good cause for Judge Chung's duplicative review because the motion and objection were already considered and decided against Deccan months before the California motions to quash were ever made. Had Judge Chung been better informed his decision to quash might not have been issued or, at least, would have reflected more accurately the matters at issue in the Connecticut cases. [6] Malik's disparagement claims were in his amended counterclaims added on May 15, 2023, when the Court granted, over Deccan's objection, Malik's request for leave to amend filed on March 24, 2023. Deccan was well aware of Malik's disparagement counterclaim when it moved to quash the third-party subpoenas. The Court was aware of Deccan's disparagement claim when it issued the commissions. [7] Judge Chung's order focused on the allegations in the Malik v. Deccan Value, LLC case, but only referred in passing to the Deccan v. Malik case in a footnote: “[t]here is apparently also a countersuit between the parties in Connecticut (Case No. FST-CV21-605521725-S).” No mention was made about Deccan's claims in that action about the damage to its client relations or the nature of Malik's disparagement counterclaim. These suits have been companioned for discovery and trial. This Court has treated the two cases as companioned for purposes of discovery, including the issuance of commissions. This Court had compelled discovery from Deccan about its client communications over objections so there should have been no good faith argument those communications were not discoverable. Presumably, Judge Chung was not advised of those rulings. Connecticut counsel were aware of the previous rulings of this Court and should have advised their California counterparts so they could present a fair history of the Connecticut cases to the California court. If they had fully informed California counsel about the Connecticut cases and that counsel failed to so advise Judge Chung that would appear to raise ethical questions in California properly addressed by the authorities there. [8] There have been numerous discovery motions and discovery orders issued in the two cases, which have been vigorously litigated by all parties. [9] These documents were produced in December, well after the July 28, 2023, fact witness deposition cut-off in the scheduling order and after the date of the third-party depositions at issue here and the second day of the Bodas deposition on November 14, 2023. Because of the tardy document production by Deccan this Court has extended the discovery period related thereto so the third-party depositions for which commissions were sought and other depositions related to the documents belatedly produced may be completed before trial. [10] This Court does not necessarily agree with Judge Chung's comment that “it is axiomatic that discovery in the first instance must come from the parties to a litigation, rather than from out-of-state parties”, but in this case the discovery was sought from Deccan initially, was the subject of discovery motions and objections, discovery was compelled but was not forthcoming until well after the point when third-party discovery was appropriate and ordered by this Court. [11] Judge Chung could not have known about these communications, but Deccan, Bodas and, presumably, Stanford, were aware, or should have been aware, that emails had been sent and received on these subjects on August 17, 2022. There also may have been telephone calls and meetings concerning these subjects, which are ripe topics for discovery. [12] There also may have been confusion because only the Malik case caption was on top of the motions to quash, although this Court issued commissions and authorized subpoenas in both cases. Deccan's California counsel focused the argument to Judge Chung on the claims in the Malik case and apparently glossed over and ignored the claims and counterclaims in the Deccan case. Indeed, Deccan's California counsel may have deliberately misled Judge Chung by captioning only the Malik v. Deccan case on the motions to quash and appending only the Malik v. Deccan complaint to the motion papers. Deccan's counsel also misrepresented that the clients had nothing to do with the issues in the Connecticut actions. The motions to quash in California initially were not made by deponents but by Deccan, whose counsel should have been aware that the commissions sought discovery on Deccan's claim and Malik's disparagement claim in Deccan v. Malik. Later, Stanford submitted a motion to quash that reiterated relevancy arguments made by Deccan. Deccan and Stanford, if they had searched their files, should have discovered the email communications related to the SEC investigation and Malik sent by Deccan to all clients on August 17, 2022, which Deccan only recently produced in discovery in the companioned cases. [13] Simultaneously, the Court has issued commissions to depose other clients of Deccan by third part depositions on the same material subjects and to subpoena documents from third parties concerning communications with Deccan or Bodas relating to Malik. The above orders apply to these commissions as well as those reissued for the depositions of Wallace and Pericherla and any subpoenas issued under the re-issued or original commissions. The Court is well-aware that it lacks jurisdiction over out-of-state third parties but enters these orders to exercise its supervisory authority over Deccan to ensure orderly discovery in the companioned cases. Deccan and Bodas are not denied access to a foreign court with jurisdiction to quash a subpoena, merely that the issue be raised here first. The reason why Deccan is ordered to submit its objections to this Court “in the first instance” is so that any forum court would have the benefit of this Court's rationale for allowing third-party depositions and issuance of the commissions before any ruling is made by the forum court to quash any subpoena issued thereunder. [14] This is not an invitation to reargue issues already decided in the various discovery motions previously adjudicated or in this decision. Also, this Court recognizes that the forum state has jurisdiction to quash a subpoena issued in that state. That does not countenance a party like Deccan using a motion to quash to have a second bite of the apple by making the same arguments about the discoverability of third-party information that were previously rejected by this Court. If there are motions to quash made by deponents in the forum states this order is intended to give those deponents and forum courts information about the rulings in this action about which, unfortunately, Judge Chung was lacking. [15] The Court will regard any failure to follow these orders as an end-run to evade discovery ordered by this Court and sanctionable conduct. The Court does not foresee the need to require Deccan to declare that all written communications concerning Malik have been produced, as Malik requested. The orders compelling compliance speak for themselves as to the requirement that all responsive documents be produced by Deccan.