*1 Before the Court is an appeal by defendants from orders issued by Magistrate Judge Orenstein on October 13, 2016 (the “October 13 Order”) and October 14, 2016 (the “October 14 Order”). For the reasons stated below, defendants’ appeal is denied.

BACKGROUND

The Court assumes familiarity with the facts and background of this case, but briefly recounts those proceedings relevant to Magistrate Judge Orenstein’s October 13 and October 14 Orders. This case arises out a dispute concerning the management and operation of Two Rivers Coffee, LLC (“TRC”), which is a joint business venture of Steven Schreiber, Eugene Schreiber, Mayer Koenig, and Emil Friedman. Plaintiff Steven Schreiber filed the complaint in this action on December 2, 2015, bringing claims under the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and New Jersey state law against Friedman, and a number of individuals and entities associated with Friedman, in connection with the alleged usurpation of control and despoilment of TRC. (D.E. # 1 (“Compl.”).) The Court entered a temporary restraining order on December 3, 2015. (D.E. # 4.) A hearing was held before Magistrate Judge Orenstein on December 14, 2015, and the parties reached an agreement on the record that “[t]he computers of Mr. Friedman, Ms. Rivera, and Ms. Ezell will be imaged and preserved and the obtained material produced to the parties on an attorney’s eyes only bases.” (D.E. # 252 at 77.)

On January 19, 2016, the Court entered a consent order for preliminary injunction, which states in relevant part: “Defendants and their representatives, whether acting directly or indirectly,” are restrained and enjoined from “[d]estroying, altering, concealing, removing, or disposing of, or refusing to permit authorized representatives of Two Rivers or the Plaintiff to inspect and copy any books, records, electronically stored data, or other documents related to or pertaining to Two Rivers including but not limited to all bank statements, wire transfers, checks, registries and all financial records of Two Rivers.” (D.E. # 96 at 3.) The preliminary injunction further provides:

*2 (Id. at 4.) In addition, the preliminary injunction stipulates that “the entry of this Preliminary Injunction shall not relieve Defendants from their obligation to ... preserve electronically stored information, or ... image electronically stored information.” (Id. at 5.)

On January 29, 2016, defendants filed motions for a stay of all discovery pending defendants’ requests to compel arbitration, (see D.E. # 99, 104, 105, 107, 109, 111), which Magistrate Judge Orenstein denied, (see D.E. dated Feb. 3, 2016). Defendants appealed Magistrate Judge Orenstein’s order to this Court. (See D.E. # 125-132.) On March 9, 2016, the Court issued an order denying defendants’ appeal. (See D.E. dated Mar. 9, 2016.) The Court further ordered that “[g]eneral document discovery may proceed as to both sides. Further, plaintiff may conduct discovery of defendant Friedman (including by deposing him) as to 1) Friedman’s relationships with the other defendants; and 2) the arbitrability of the claims at issue in this case (which encompasses the communications of Friedman and his agents with various beth dins).” (Id.)

After the Court’s March 9, 2016, Order, defendants filed several motions for discovery relief, (D.E. # 171, 187, 249), and on July 6, 2016, Magistrate Judge Orenstein convened an evidentiary hearing on the factual disputes raised in these motions. On July 6, 2016, Magistrate Judge Orenstein ordered that defendants provide to Schreiber for imaging four computers: Sylvia Ezell’s computer (computer hostname “SYLVIA PC 1”), Sonia Rivera’s two computers (computer hostnames “OFFICE-HP” and “TIME”), and Emil Friedman’s computer (computer hostname “CLIENT3-EMIL-HP”). (D.E. # 268 at 15:6–18:24). The evidentiary hearing continued on July 7 and 8, 2016, and then resumed again from August 1 through August 5, 2016.

On August 1, 2016, Schreiber filed a status report regarding a preliminary report prepared by Stroz Friedberg (“Stroz”), the forensics expert Schreiber hired to image the computers. (D.E. # 260-1.) Based on the evidence in the preliminary report prepared by Stroz, defendants have: (1) concealed, altered, and tampered with the computers that the Court ordered to be disclosed, imaged, and preserved; (2) used false and fraudulent privilege log entries to conceal thousands of non-privileged documents ordered to be provided to Schreiber; (3) took improper steps to actively prevent Schreiber from timely receiving imaged computer material; (4) issued written instructions on spurious TRC letterhead that instructed third-party purveyors of Two Rivers’ computer systems to terminate TRC’s access to those services while simultaneously refusing to provide Two Rivers with access to those systems or the data on those systems; and (5) failed to timely produce books and records in their possession after being ordered to do so. (Id. at 1.)

On August 5, 2016, Magistrate Judge Orenstein ordered that by August 15, defendants shall complete their efforts to: (1) restore and maintain plaintiff’s access to all data within the TRC’s specialized computer system, known as the “Launch” system; (2) identify the current location and custodian of the server on which any Launch system data resides (and produce the server for imaging, if possible); and (3) produce all known information about, and if possible produce for imaging, each computer or storage device identified in the August 15, 2016, Stroz report. (D.E. # 266.) Magistrate Judge Orenstein also ordered that, based upon the information received from the defendants, plaintiff will submit Stroz’s updated report and a letter setting forth any request for relief that plaintiff deems appropriate. (Id.) On August 29, Schreiber filed a motion for sanctions, including the entry of a default judgment against defendants and denial of defendants’ pending motions to dismiss, compel arbitration, confirm the arbitration award, and/or stay further proceedings. (D.E. # 282.)

*3 Magistrate Judge Orenstein held a status conference on October 13, 2016, and ordered all defendants (other than Devine and Hersko) to produce all computers (including mobile devices and all electronic storage media) for imaging by plaintiff’s expert by November 3. Defendants were instructed to produce a privilege log for the disclosed electronic media by November 24, and all electronic media produced pursuant to this order shall be kept confidential and made available only to counsel and experts. Discovery was stayed pending the outcome of the motion for sanctions, and on October 14, 2016, Magistrate Judge Orenstein entered an order denying all pending discovery motions without prejudice. (D.E. dated Oct. 14, 2016.)

Currently pending before the Court are five motions to vacate the October 13 and October 14 Orders filed by the following sets of defendants and non-party: (1) Friedman and New York Best Coffee Inc. (the “Friedman Defendants”), (D.E. # 313 (“Friedman Defs. Mem.”)); (2) the E&I Investors Group LLC; E&J Funding Co. LLC, E&J Management, Inc., and E & Jeryg Management Corp. LLC (collectively, the “E&J Defendants”), and John Ahearn, 24 Hour Oil Delivery Corp., MB Fuel Transport, Inc., MB Fuel Transport I, Inc., Associated Fuel Oil Corp., Light Trucking Corp., 165 Street Realty Corp., and Park Avenue Associates, LLC (collectively, the “Oil and Trucking Defendants”), (D.E. # 322 (“E&J and Oil and Trucking Defs. Mem.”)); (3) Sylvia Ezell, Sonia Rivera, and Jorge Salcedo, (D.E. # 318 (“Ezell, Rivera, Salcedo Defs. Mem.”)); (4) Solomon Birnbaum, Office Coffee Services LLC; Single Serve Beverages Distribution; Crazy Cups, and 26 Flavors LLC (collectively, the “Birnbaum Defendants”), (D.E. # 318 (“Birnbaum Defs. Mem.”)); and (5) non-party Benzion Nussbaum, (D.E. # 320 (“Nussbaum Mem.”)). Schreiber opposes these motions. (D.E. # 341 (“Pl Mem. Opp.”).)

STANDARD OF REVIEW

In reviewing a magistrate judge’s order on a pretrial matter that is not dispositive of a party’s claim or defense, the district court will modify or set aside the order only if it is “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see also Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990). Orders resolving pretrial discovery issues are generally considered nondispositive. Thomas E. Hoar, Inc., 900 F.2d at 525. Clear error may be found if, “on the entire evidence” the Court is “left with the definite and firm conviction that a mistake has been committed.” Easley v. Cromartie, 532 U.S. 234, 235 (2001) (internal quotations omitted). “This standard is highly deferential ... and only permits reversal where the magistrate abused his discretion.” Mental Disability Law Clinic v. Hogan, 739 F. Supp. 2d 201, 203 (E.D.N.Y. 2010) (quoting Knitting Fever, Inc. v. Coats Holding Ltd., No. 05-CV-1065 (DRH) (MLO), 2005 WL 3050299, at *3 (E.D.N.Y. Nov. 14, 2005)). Therefore, “ ‘a party seeking to overturn a discovery ruling [by a magistrate judge] generally bears a heavy burden.’ ” Travel Sentry, Inc. v. Tropp, 669 F. Supp. 2d 279, 283–84 (E.D.N.Y. 2009) (quoting Corn-Tech Assocs. v. Computer Assocs. Int’l, Inc., 753 F. Supp. 1078, 1099 (E.D.N.Y. 1990), aff’d, 938 F.2d 1574 (2d Cir. 1991)); see also 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 3069 (2d ed. 2009) (“[I]t is extremely difficult to justify alteration of the magistrate judge’s nondispositive actions by the district judge.”). Moreover, the Court “may affirm on any basis supported by the record, including grounds upon which the [Magistrate Judge] did not rely.” See, e.g., Richardson v. Selsky, 5 F.3d 616, 621 (2d Cir. 1993); see also City of New York v. Beretta U.S.A. Corp., No. 00-CV-3641 (JBW) (CLP), 2005 WL 1279183, at *2 (E.D.N.Y. May 26, 2005) (same).

DISCUSSION

*4 Defendants style the instant motions as an “appeal” of the October 13 and October 14 Orders, but their motion, in fact, request that this Court: (1) reverse the October 13 Order directing that defendants produce all of their computer devices for imaging; (2) vacate Magistrate Judge Orenstein’s order that Two Rivers can retain counsel; and (3) vacate Magistrate Judge Orenstein’s order denying the pending discovery motions until Schreiber’s motion for sanctions has been resolved. The Court will consider each request for relief in turn.[1]

I. Appeal of October 13 Order Regarding Computer Imaging

Defendants first contend the Court should vacate Magistrate Judge Orenstein’s order directing that defendants produce all of their computer devices for imaging (the “imaging order”). As a preliminary matter, the Court must determine the basis for this order. The parties dispute whether the imaging order was issued as a sanction for violating the preliminary injunction and/or the Court’s discovery orders, and if it was a sanction, whether it was issued pursuant to Federal Rule of Civil Procedure 37.[2] (See Friedman Defs. Mem. at 57–61; Pl. Mem. Opp. at 33–37.) Upon review of the record and the transcript of the hearing held on October 13, 2016, it is clear that the imaging order was not a sanction issued under Rule 37. On August 29, 2016, Schreiber filed a motion for sanctions, arguing that in light of “Defendants’ acts of spoliation and other violations of this Court’s Orders,” the Court should deny all of defendants’ pending motions and enter default judgment against defendants pursuant to Rule 37. (D.E. # 282.) At the conclusion of the hearing on October 13, 2016, Magistrate Judge Orenstein explicitly reserved judgment on Schreiber’s motion for sanctions, and that motion remains pending. (See Tr. Oct. 13 Hr’g at 58:23–59:7 (“I think before we can consider anything else, including a remedy if there’s been spoliation, if there’s been a violation of the preliminary injunction, [I] have to have a firm handle on the issues that Stroz has been examining and the lack of access to information has thus far prevented that. So I’m not going to decide on the resolution of the motion or the remedies if the plaintiff’s motions are granted until I’ve had a chance to hear from the experts at Stroz and Kay Friedman after those entities have fully examined all of the devices at issue.”).)

*5 Rather, the Court finds that the October 13 Order was an exercise of Magistrate Judge Orenstein’s inherent power manage the discovery process and was as an appropriate discovery order in light of evidence of spoliation. It has long been understood that “ ‘certain implied powers must necessarily result to our Courts of justice from the nature of their institution,’ powers ‘which cannot be dispensed with in a Court, because they are necessary to the exercise of all others.’ ” Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (quoting United States v. Hudson, 11 U.S. (7 Cranch) 32, 34 (1812)). As relevant here, “[a] district court has broad latitude to ... manage the discovery process.” EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir. 2012); see also Barbara v. MarineMax, Inc., No. 12-CV-368, 2013 WL 1952308, at *3 (E.D.N.Y. May 10, 2013) (“Courts afford broad discretion in magistrates’ resolution of discovery disputes.”) Federal Rule of Civil Procedure 26(b)(2)(B) provides that a party “need not provide discovery of electronically stored information from sources the party identifies as not reasonably accessible because of undue burden or cost.” Courts may nevertheless order discovery from such sources if the demanding party shows “good cause.” Id. Although “compelled forensic imaging is not appropriate in all cases,” John B. v. Goetz, 531 F.3d 448, 460 (6th Cir. 2008), “forensic inspection is unquestionably subject to the balancing required by Rule 26(b)(2)(C) whenever any discovery is challenged as an undue and unnecessary burden,” Covad Commc’ns Co. v. Revonet, Inc., 258 F.R.D. 5, 12 (D.D.C. 2009); cf. Fed. R. Civ. P. 34(a) Advisory Committee Note (2006) (“Courts should guard against undue intrusiveness resulting from inspecting or testing [electronic information] systems.”). It is well-settled that “discrepancies or inconsistencies in the responding party’s discovery responses may justify a party’s request to allow an expert to create and examine a mirror image of a hard drive.” Ameriwood Indus., Inc. v. Liberman, No. 06-CV-524-DJS, 2006 WL 3825291, at *4 (E.D. Mo. Dec. 27, 2006) (collecting cases). Courts have also ordered computer imaging when there is reason to believe that a litigant has tampered with the computer or hidden relevant materials that are the subject of court orders. See, e.g., Electrified Discounters, Inc. v. MI Tech., Inc., No. 3:13-CV-1332 (RNC), 2015 WL 2383618, at *3–4 (D. Conn. May 19, 2015) (ordering plaintiff to “image its sources of electronically stored information ... including its hard drives and QuickBook files” due to discrepancies and inconsistencies in plaintiff’s discovery responses); Genworth Fin. Wealth Mgmt., Inc. v. McMullan, 267 F.R.D. 443, 448 (D. Conn. 2010) (ordering computer imaging where there were evidence of deliberate spoliation and omissions, discrepancies, and inconsistencies in defendants’ discovery responses); Peskoff v. Faber, 244 F.R.D. 54, 59 (D.D.C. 2007) (allowing forensic examination because documents were conspicuously absent in certain time periods and because circumstances suggested that absence was the result of party’s misconduct).

Here, Magistrate Judge Orenstein’s imaging order was within his latitude to manage the discovery process and was neither clearly erroneous nor contrary to law. Indeed, the record here is replete with good cause to support the October 13 Order as it includes substantial evidence that at least some of the defendants have spoliated evidence, hid evidence, and failed to comply with the Court’s orders. Schreiber’s computer forensics expert, for example, found that there are artifacts of wiping and deletion on the four computers that Friedman, Ezell, and Rivera have produced for imaging, and that such deletions occurred after the Court ordered these defendants to preserve their computers and produce them to Schreiber for imaging. (D.E. # 305-1 ¶¶ 16, 18–27, 35, 38.) Moreover, even after Magistrate Judge Orenstein ordered these defendants to submit “an affidavit identifying in detail all computer devices in his or her possession, custody, or control, the current location of each such device, and a statement as to whether each such device has ever been used in any way in relation to the business of Two Rivers Coffee,” (D.E. dated Apr. 15, 2016), Schreiber’s computer forensics expert found that defendants have used additional computers that they did not disclose to the Court, (see D.E. # 283-1 at 18). Magistrate Judge Orenstein specifically found that there was “little doubt ... based on the reports I’ve seen and the submissions I’ve seen that the defendants have impeded the fair litigation of this matter” through non-disclosure and spoliation of evidence. (D.E. # 313 at 6.) Accordingly, in light of this evidence of these defendants’ spoliation, violation of the Court’s preservation orders, misrepresentations to the Court, and hampering of the litigation process, the October 13 Order was neither clearly erroneous nor contrary to law.[3]

*6 Furthermore, the October 13 Order was not clearly erroneous under the case law governing computer imaging in civil discovery even if the record did not contain evidence of widespread spoliation. Indeed, as one court explained, forensic imaging of computers “is not uncommon in the course of civil discovery.” Goetz, 531 F.3d at 459 (listing cases). In determining whether imaging is appropriate, courts consider “the relationship between the [requesting party’s] claims and the [responding party’s] computers,” and whether the responding party “has fully complied with discovery requests.” Calyon v. Mizuho Sec. USA Inc., No. 07-CV-2241, 2007 WL 1468889, at *3 (S.D.N.Y. 2007). Thus, courts have permitted imaging of hard drives where the use of the computer or its files forms the basis of the plaintiff’s claims against the defendant. See, e.g., McMullan, 267 F.R.D. at 447–48 (finding sufficient nexus between claims and need for computer imaging where plaintiff alleged that defendant used the computers to disseminate plaintiff’s confidential information).

These criteria are satisfied in this case. Schrieber has articulated plausible ways that defendants’ use of their computers and the files contained therein are directly relevant to his claims. (See D.E. # 323.) In addition to the pending motions for sanctions due to spoliation, Schreiber’s complaint includes a claim of intentional spoliation of evidence against all defendants, (Compl. ¶¶ 541–54), and alleges that defendants implemented the specialized Launch system to conceal evidence of their fraudulent activity, (id. ¶¶ 143–58). Moreover, the imaging order adequately protects defendants’ privacy interests because Magistrate Judge Orenstein directed that defendants would be able to conduct a privilege review of the imaged material before either plaintiff’s counsel or Stroz could examine it. (D.E. # 313, Ex. A (“Oct. 13 Hr’g Tr.”) at 78:22–79:21, 83:10–13, 84:4–8, 84:19–22.) This process of imaging, recovery, and disclosure mirrors the procedures used by other courts to ensure that the privacy interests of the disclosing parties are adequately protected. See, e.g., McMullan, 267 F.R.D. at 446–49; Ameriwood, 2006 WL 3825291, at *5 (“The ... three-step imaging, recovery, and disclosure process provides the requesting party sufficient access to information that is not reasonably accessible and ensures the process does not place an undue burden on the responding party.”). Magistrate Judge Orenstein also ordered that all imaged material would be subject to an “attorney’s eyes only” restriction, and could be examined only by plaintiff’s counsel and plaintiff’s expert.[4] (Oct. 13 Hr’g Tr. at 83:3–13.)

Next, defendants contend that the October 13 Order was unwarranted because: (1) the Order was issued before the completion of the evidentiary hearing; (2) Stroz did not testify and was not subject to cross-examination; (3) Schreiber did not testify and was not subject to cross-examination; (4) Magistrate Judge Orenstein improperly relied on Stroz’s preliminary reports; and (5) defendants were not given a fair opportunity to be heard. (Friedman Defs. Mem. at 49–52.) The Court finds these arguments unpersuasive. Defendants have had ample opportunity to present their arguments: defendants submitted extensive briefing concerning the issue of computer imaging, (see D.E. # 288–95, 299–302), including its own forensic computer expert, (see D.E. # 291), and participated in extensive proceedings before Magistrate Judge Orenstein concerning this issue.[5] Moreover, as defendants acknowledged during the evidentiary hearing before Magistrate Judge Orenstein, they had the opportunity to present the testimony of Friedman and Nussbaum to develop their positions. (See D.E. # 313-1 at 16:24–25, 17:17–21, 18:4–17.) Furthermore defendants’ argument that the October 13 Order was unwarranted because Schreiber did not testify at the evidentiary hearing is misplaced, because Schreiber has no personal knowledge related to defendants’ computers or the alleged spoliation of evidence. Moreover, at the October 13, 2016, hearing, Magistrate Judge Orenstein asked Friedman’s counsel what additional evidence he would like to present before could the pending motions were resolved, and Friedman’s counsel did not indicate that he would like to call Schreiber as a witness. (Oct. 13 Hr’g Tr. at 16:16–19:13.)

*7 Defendants also argue the imaging order is overbroad because plaintiffs have not shown that every single computer device belonging to every defendant in this case should be subjected to imaging.[6] In particular, the Birnbaum Defendants, the E&J Defendants, and the Oil and Trucking Defendants contend that Schreiber has not demonstrated that they spoliated any evidence relevant to this case. (Birnbaum Defs. Mem. at 1; E&J and Oil and Trucking Defs. Mem. at 3–10.) However, “when there has been intentional destruction of evidence by an officer of a closely held corporation, other officers of the closely held entity may be subject to sanctions, even if they did not have direct control of the evidence at issue. To hold otherwise would reward officers who turn a blind eye to malfeasance within their organization.” Official Comm. of Unsecured Creditors of Exeter Holdings Ltd. v. Haltman, No. 13-CV-5475 (JS) (ARL), 2016 WL 128154, at *4 (E.D.N.Y. Jan. 12, 2016); see also Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 73 (S.D.N.Y. 1991) (explaining that “an agency, corporate officer, or legal department [cannot be permitted] to shield itself from discovery obligations by keeping its employees ignorant”).

Here, as Magistrate Judge Orenstein emphasized during the October 13, 2016 hearing, “the record is rife with evidence of the interrelationship among all of the corporate entities and individual defendants who are employed by them .... It’s fruitless to try and rely on such distinctions as who is formerly an employee of whom as the defendants seem not to have respected those lines in conducting their businesses.” (Oct. 13 Hr’g Tr. at 61:17–23.) There is significant overlap in employees who performed key corporate functions for the defendant entities. For example, Rivera and Ezell performed bookkeeping work for a number of the defendant entities.[7] (D.E. # 268 at 44:20–45:2; D.E. # 287 at 177:5–24.) In addition, the defendant companies all designated Nussbaum as their Rule 30(b)(6) witness to testify about their computers, including how the devices were backed up and who had access to the computers. (D.E. # 329 at 563:22–564:7, 730:24–731:1.) Friedman’s testimony at the evidentiary hearing further highlights the interrelationship among the corporate entities, and in particular, the overlap of the companies’ computers:

(D.E. # 323-16 at 416:21–417:3.)

Moreover, documents produced from the four computers that have been imaged to date indicate that defendants have made false representations to the Court concerning the overlap in the defendant entities’ use of computers. For example, Rivera testified that she used a computer in her work for 26 Flavors, LLC, which Rivera and Nussbaum refer to as the “oil computer,” which has never been used in relation to the business of Two Rivers. (D.E. # 287 at 246:20–247:11.) However, emails from Sylvia-PC show that Rivera stored loan documents related to Two Rivers on the “oil computer.” (See D.E. # 284, Exs. 6–11.) In light of the evidence of spoliation on Friedman’s, Rivera’s, and Ezell’s computers, defendants’ failure to disclose all of their computers to the Court, and the interrelationship of the defendants in this action—including their use of computers—it was not clearly erroneous for Magistrate Judge Orenstein to include all of defendants’ computers in the October 13 imaging order.

*8 The Court further concludes that it was not clearly erroneous to order the imaging of Nussbaum’s computers. As noted above, the defendant companies all designated Nussbaum as their Rule 30(b)(6) witness to testify about their computers. There is also evidence that Nussbaum has used his own devices to tamper with the computers of at least some of the defendants. Nussbaum has admitted that on July 8, 2016, “in preparation for [his] testimony” at the evidentiary hearing, he “attached the hard drives of what are referred to in the various reports as Sylvia-PC and OFFICE-PC to [his] old laptop.” (D.E. # 290-2 ¶ 1.) Nussbaum subsequently wiped his laptop, (Oct. 13 Hr’g at 69:21–25), which has the effect of concealing any alterations made to the hard drives of SYLVIA-PC and OFFICE-PC. Although Nussbaum claims he “did not knowingly or purposefully delete, alter, or modify any files” on SYLVIA-PC or OFFICE-PC, (D.E. # 290-2 ¶ 3), Stroz found artifacts of wiping and deletion on OFFICE-HP on July 8, 2016, (D.E. # 305-1 ¶¶ 18–27) and evidence of deletion on SYLVIA-PC on July 6, 2016, (id. ¶¶ 38–49). Magistrate Judge Orenstein was thus justified in ordering the imaging of Nussbaum’s computers to determine whether they were used to alter or wipe defendants’ computers.[8]

For these reasons, the Court concludes that Magistrate Judge Orenstein’s imaging order was neither clearly erroneous nor contrary to law.

II. Appeal of October 13 Order Regarding Counsel for Two Rivers

Defendants also request that the Court “vacate the retention [of counsel] order.” (Friedman Defs. Mem. at 61–65.) However, upon review of the transcript of the October 13, 2016, hearing, the Court concludes that Magistrate Judge Orenstein did not issue any ruling concerning the retention of counsel for TRC. Rather, Magistrate Judge Orenstein expressly refused to issue such an order:

(Oct. 13 Hr’g Tr. at 60:12–61:1.) This is merely a restatement of Magistrate Judge Orenstein’s prior ruling on August 5, 2016, that he would not appoint counsel for TRC and would instead allow TRC to retain the counsel of its choice. (D.E. # 331 at 1474–75, 1482, 1492.) Accordingly, defendants’ motion to vacate the appointment of counsel is denied because no such appointment was made.

III. Appeal of October 14 Order

Finally, defendants argue this Court should vacate Magistrate Judge Orenstein’s October 14 Order, which stayed discovery pending resolution of Schreiber’s motions for sanctions and denied all pending discovery motions without prejudice. (Friedman Defs. Reply Mem. at 70–72.) Defendants do not offer any arguments demonstrating that this order was contrary to law—they do not cite to a single case in their arguments concerning the October 14 Order. (Id.) Rather, defendants contend that Schreiber has obstructed the progress of discovery and has failed to turn over any documents to the defendants. (Id.) However, defendants have also failed to produce documents to Schreiber.

*9 As Magistrate Judge Orenstein found, “the discovery process in this case is unreliable and broken.” (Oct. 13 Hr’g Tr. at 59:19–20.) This Court concurs in Magistrate Judge Orenstein’s analysis—both in terms of the evidence of spoliation and the parties’ failure to respond to discovery requests. In light of the breakdown of the discovery process in this case, it was not clearly erroneous for deny the pending discovery motions without prejudice pending resolution of Schreiber’s motion for sanctions.

CONCLUSION

For these reasons, defendants’ motions are denied. Since Magistrate Judge Orenstein issued the October 13 and October 14 Orders, this Court has granted the motion to compel arbitration filed by Birnbaum, Office Coffee Services, LLC, and 26 Flavors LLC and stayed the claims as to these defendants. The parties are directed to raise any issues concerning the applicability of the October 13 and October 14 Orders to these defendants with Magistrate Judge Orenstein.

SO ORDERED.

Although defendants stylized this motion as an “appeal” of the October 13 Order, their motion also requested that this Court issue a stay of discovery pending the disposition of defendants’ motions to compel arbitration. Because this Court decided defendants’ motions to compel by granting them as to Solomon Birnbaum, 26 Flavors LLC, and Office Coffee Services, LLC, but denying the motions to compel arbitration filed by the remaining defendants (D.E. # 363), defendants’ request for a discovery stay pending the disposition of defendants’ motions to compel is denied as moot.

Schreiber identifies four other potential bases for the October 13 Order that are clearly irrelevant: (1) Rule 11(f)(iv), (2) 28 U.S.C. § 1927, (3) Rule 26(g)(3), and (4) Rule 16(f). (Pl. Mem. Opp at 33 & n.22.) First, Rule 11 does not include the subsection identified by Schreiber. Second, 28 U.S.C. § 1927 provides that “[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” However, Schreiber has not alleged that any of the defendants’ attorneys have “multiplie[d] the proceedings” in this case in an unreasonable and vexatious manner, 28 U.S.C. § 1927, and in any event, the October 13 Order does not order defendants’ counsel to satisfy personally any costs. Third, Rule 26(g)(3) concerns sanctions for improper certifications of discovery requests, see Fed. R. Civ. P. 26(g)(3), but Schreiber has not alleged—and there is no evidence—of improprieties in discovery requests in this case. Finally, Rule 16(f) concerns sanctions for parties that fail to appear at a scheduling or pretrial conference, or are substantially unprepared to participate in the conference, see Fed. R. Civ. P. 16(f), which is not relevant here.

The Friedman Defendants cite to Torres v. Howell, No. 3:03-CV-2227 (MRK), 2004 WL 2901539, at *3 (D. Conn. Dec. 6, 2004) and argue that Magistrate Judge Orenstein’s role was not to conduct an “investigation” of the matters about which Schreiber was seeking sanctions against defendants. (D.E. # 349 at 48–49.) However, their argument overlooks the substantial evidence of spoliation in the record—despite Magistrate Judge Orenstein’s preservation orders—which justifies the October 13 Order. Moreover, the Friedman Defendants’ citation to Torres is inapposite because that case had nothing to do with spoliation or preservation of evidence. Instead, the plaintiff in Torres requested that the court “conduct the requested investigation to find information to support possible claims that [plaintiff] could assert against defendants,” 2004 WL 2901539, at *3, which is far afield from the instant case where Magistrate Judge Orenstein was called upon to manage the discovery process only to preserve—not search for—evidence in light of potential spoliation.

The Birnbaum Defendants argue they will be irreparably harmed by the imaging order because they are direct competitors of Two Rivers, and their proprietary information will be turned over to plaintiff’s counsel. (Birnbaum Defs. Mem. at 1–2.) However, as discussed above, the imaged material would be subject to an “attorney’s eyes only” restriction. The Birnbaum Defendants argue that in light of the family relationship between Steven Schreiber and plaintiff’s counsel, they are “justifiably skeptical that the information will not wind up in the wrong hands.” (Id. at 2.) The Birnbaum Defendants have not offered any support for this assertion beyond their speculation, and there is no evidence indicating that the “attorney’s eyes only” restriction will not be respected.

In their reply brief, the Friedman Defendants assert that the imaging order violated their Due Process rights because it was entered “without Judge Orenstein rendering any written findings, decisions or recommendations regarding the relief granted for review by this Court,” and before the completion of the evidentiary hearing. (D.E. # 349 at 46–47.) The Friedman Defendants do not cite to—and the Court is not aware—of any authority establishing that a Magistrate Judge must satisfy these requirements before issuing a discovery order, or that the failure to do so constitutes a Due Process violation.

The Court notes that E&I Investors Group, LLC and E&J Funding Co., LLC both claim to “not own any computers,” (E&J and Oil and Trucking Defs. Mem. at 6), so their basis for appealing the imaging order is unclear.

Rivera testified that Office Coffee Services does not have a payroll separate from that of 26 Flavors, LLC, (D.E. # 287 at 178:17–179:3).

Kevin Faulkner, a Vice President of Digital Forensics at Stroz Friedberg, testified that “[a]n examination of the computer Mr. Nussbaum states he used on July 8, 2016 to ‘review’ the hard drives from the computers named ‘OFFICE-HP’ and ‘SYLVIA-PC1’ may help determine a number of points potentially relevant to this matter. First, we should be able to confirm when each of these hard drives was connected to Mr. Nussbaum’s computer. Second, we could analyze his computer for evidence of wiping tools and compare their artifacts to those found on the hard drives in question. Third, we could analyze his computer for evidence of the existence and use of remote access software to see if someone else was using his computer at the time these drives were connected. Fourth, we can look for any evidence that Mr. Nussbaum or another user, access or copied any files from these two hard drives. And fifth, we can look for any evidence indicating in more detail the extent of usage of the wiping tools against the two hard drives in question.” (D.E. # 305-1 ¶ 50.)