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Court Permits Pre-Action Discovery to Ascertain the Identity of a Defendant

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  • Posted on: Jan 4 2019

Often, in the pre-action investigation of a client’s claims, it becomes evident that discovery would materially aid the client in framing his/her complaint or in learning the identities of the persons against whom the complaint should be brought. Obtaining such pre-action discovery, however, is not easy. The plaintiff must demonstrate the existence of a meritorious cause of action against the proposed defendant and the materiality and necessity of obtaining the information.  

Today’s post considers Lualdi Inc. v. T-Mobile USA, Inc., 2018 N.Y. Slip Op. 33348(U) (here), a case in which the plaintiff, using Section 3102(c) of the Civil Practice Law and Rules (“CPLR”), successfully obtained discovery before commencing its action.

The Law in New York

Under Section 3102(c) of the CPLR, a plaintiff can obtain discovery “before an action is commenced … to preserve information” or “to aid in bringing an action ….” CPLR 3102(c) (“Before an action is commenced, disclosure to aid in bringing an action, to preserve information or to aid in arbitration, may be obtained, but only by court order.”)  However, such discovery can be secured only by court order. Id.

Importantly, “while pre-action disclosure may be appropriate to preserve evidence or to identify potential defendants, it may not be used to ascertain whether a prospective plaintiff has a cause of action worth pursuing.” Uddin v. New York City Tr. Auth., 27 A.D.3d 265, 266 (1st Dept. 2006). In other words, a would-be plaintiff cannot use Section 3102(c) to fish for a cause of action.  

New York courts have explained that the foregoing “limitation” on the use of pre-action disclosure is “‘designed to prevent the initiation of troublesome and expensive procedures, based upon a mere suspicion, which may annoy and intrude upon an innocent party.’”  Matter of Stewart v. New York City Transit Auth., 12 A.D.2d 939, 940 (2d Dept. 1985) (citation omitted). However, where “the facts alleged state a cause of action, the protection of a party’s affairs is no longer the primary consideration and an examination to determine the identities of the parties and what form or forms the action should take is appropriate.” Id. (citation and internal quotation marks omitted).

Thus, “[p]re-action discovery is not permissible as a fishing expedition to ascertain whether a cause of action exists and is only available where a petitioner demonstrates that he or she has a meritorious cause of action and that the information sought is material and necessary to the actionable wrong.” Bishop v. Stevenson Commons Assocs., L.P., 74 A.D.3d 640, 641 (1st Dept. 2010) (citations omitted).

The burden is on the petitioner to present “facts fairly indicating a cause of action against the adverse party.” Matter of Schenley Indus. v. Allen, 25 A.D.2d 742, 743 (1st Dept. 1966).

Lualdi Inc. v. T-Mobile USA, Inc.

As discussed below, in Lualdi, the Court granted an order to show cause and petition filed by Lualdi Inc. (“Lualdi”, the “Company” or “Petitioner”), pursuant to CPLR 3102(c), to obtain pre-action discovery of T-Mobile USA, Inc. (“T-Mobile” or “Respondent”). T-Mobile did not oppose the application.

Lualdi sought court approval to serve a subpoena duces tecum on T-Mobile to compel the production of documents identifying the person(s) holding the accounts that Lualdi alleged were used to unlawfully obtain access to the its computer network (“Lualdi.us”).

Background

The action arose on May 2, 2018, when Lualdi became concerned that a former consultant (“Consultant”), whose agreement had been terminated several months earlier, obtained unauthorized access to the Company’s New York City password protected local area network. Lualdi contended that the Consultant was reviewing and downloading confidential information and trade secrets from the Company’s network while providing services to, or being employed by, one of Lualdi’s direct competitors. Lualdi became suspicious of the Consultant following an April 30, 2018 meeting between the Company’s business developer, Alberto Pomello (“Pomello”), and an architect. On May 2, 2018, Pomello allegedly became aware that the Consultant knew about the April 30, 2018 meeting and the project specifications the architect had provided to Pomello at the meeting.

Thereafter, Pomello contacted Alberto Lualdi, the Company’s principal, and Matteo Tacchi, a member of Lualdi’s IT department, after becoming concerned that the Consultant might be improperly accessing Lualdi’s confidential information. Lualdi hired Evade Solutions, Inc. a firm specializing in computer and network security, to run a forensic examination on the lualdi.us network and ascertain whether the network had been improperly accessed.

Lualdi learned that during April 2018, Pomello’s e-mail mailbox was improperly and wrongfully accessed. According to the Company, GeoIP logs showed that Pomello’s e-mail mailbox was accessed from April 17, 2018 through April 22, 2018, from various locations in the United States while Pomello was in Milan. Prior to April 17, 2018, Pomello’s e-mail mailbox had been accessed from New York (authorized) and from Chicago or Los Angeles (unauthorized) and continued until after April 22, 2018. According to Lualdi, the GeoIP logs showed that the IP addresses used to acquire unauthorized access were provided by T-Mobile to one or more of its account holders.

Based upon the foregoing, Lualdi argued that the Consultant, and/or one or more persons acting on behalf of, or in concert with, the Consultant, were able to acquire unlawful and unauthorized access to its network.

Lualdi filed the order to show cause and petition because it did not know the identity of the person(s) acting with, or on behalf of, the Consultant without obtaining information and documents from Respondent who could identify the individual account holder(s) corresponding to the originating IP addresses that appeared in the GeoIP logs.

The Court’s Decision

Based upon the foregoing background discussion, the Court held that the “Petitioner has shown the existence of a meritorious cause of action against Respondent.” Having found that Lualdi met its burden of demonstrating a meritorious claim, the Court held that “identifying the person or persons holding the accounts used to obtain unauthorized and unlawful access to the lualdi.us network,” was “material and necessary to the [claimed] actionable wrong.” (Citation and internal quotation marks omitted.)  Consequently, the Court granted the petition for pre-action disclosure and ordered T-Mobile to respond to the subpoena.

Takeaway

As shown in Lualdi, CPLR § 3102(c) can be an important device for a litigator who represents a client with a meritorious claim and who needs the identities of the responsible parties to bring the action or information to aid in framing the complaint. Lualdi, therefore, teaches that although CPLR § 3102(c) “may not be used to ascertain whether a prospective plaintiff has a cause of action worth pursuing,” it may be used to obtain information, such as the identity of an alleged wrongdoer, that is “material and necessary” to the claimed cause of action.

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