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fashion, giving credence to innocent explanations for individual strands of evidence; rather, it must 'review all of the evidence in the record'. 'In doing so, however, the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence .... ' Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.''Š 'Where an issue as to a material fact cannot be resolved without observation of the demeanor of witnesses in order to evaluate their credibility, summary judgment is not appropriate.'"
Reasoning: With respect to Jasco's procedural arguments, the court found "limited merit" and made short work of them. Therefore, I will not discuss them here except to note that they exist.
(1) Jasco sought compliance with the Third Document Demand in order to respond to Dana's contention that it had nothing to do with the conspiracy surrounding Nationwide gaining Jasco's trade secrets. The bankruptcy court rejected Jasco's request and the Second Circuit reverses on two grounds: (1) the bankruptcy court's focus on the fact that Jasco had had plenty of time for discovery did not focus on the discovery that had been obtained from Dana, which could not be viewed as extensive; (2) the various discovery methods allowed are more complementary than fungible responses to interrogatories do not necessarily obviate the need for further discovery in a case involving a conspiracy. The bankruptcy court did not contain a "substantive comparison of what had been produced with what is now requested and no finding that Jasco's Third Document Demand sought information that was cumulative or that it was otherwise unduly burdensome. Nor was there a finding that Jasco's discovery request was dilatoryŠ" Moreover, to the extent the bankruptcy court relied on Jasco II, its reliance was flawed because (a) Jasco II was reversed and (b) Jasco II dealt with discovery of parties other than Dana. The court then stepped through each of Dana's arguments and denied them in full.
(2) In addition, summary judgment was inappropriate because factual issues remained that precluded summary judgment. The court limited its discussion to the conspiracy to steal Jasco's trade secrets since it had a clear factual dispute. The court first stepped through New York law pertaining to this cause of action. Dana argued that no conspiracy existed because none of the witnesses admitted to the conspiracy. The court noted that the witnesses were far from disinterested and, because "the self-serving nature of a witness's statements goes to the statements' weight, not their admissibilityŠ ," it was inappropriate to use this piece of evidence because the weighing of such statements was a matter for trial. Moreover, a conspiracy can be established with circumstantial evidence. Here, the bankruptcy court "court viewed the record in piecemeal fashion and ignored other evidence favorable to Jasco, for there was both (1) direct evidence that trade secrets were in fact misappropriated and that a conspiracy to misappropriate them existed, and (2) circumstantial evidence from which it could be inferred that Dana knew of the trade secret misappropriation conspiracy and encouraged or ratified the misappropriation." The court then stepped through the direct and circumstantial evidence that it felt existed that raised a material issue of fact as to whether Dana was involved in the conspiracy to steal Jasco's trade secrets.
Facts: In April 2007, New Century TRS Holdings, Inc. (the "debtors") and its affiliates filed for chapter 11 bankruptcy. In June 2007, Michael J. Missal was appointed as the debtors' examiner (the "Examiner"). The Examiner filed his final report on February 29, 2008. And, on July 15, 2008, the court entered an order confirming the debtors' plan of liquidation and appointing Alan M. Jacobs as the liquidating trustee of the debtors (the "Trustee"). Two motions were before the court: the first was filed by the Examiner and the second was filed by the Trustee. The Examiner requested (the "Examiner's Motion") an order (i) discharging the Examiner, (ii) granting the Examiner relief from third-party discovery, and (iii) establishing procedures for the disposition and sharing of documents and information, including certain privileged materials produced by the debtors and KPMG (the debtors' independent auditor). The Trustee requested (the "Trustee's Motion") an order (i) permitting the transfer to the Trustee of certain KPMG documents by the former official committee of unsecured creditors (the "Committee"). A number of objections were filed to the Examiner's Motion. KPMG objected to the Trustee's Motion.
Issue: Whether the Examiner's Motion and the Trustee's Motion should be granted.
©2010 Leif M. Clark
