Freeman v. HSBC Holdings PLC
Freeman v. HSBC Holdings PLC
2025 WL 622549 (E.D.N.Y. 2025)
February 26, 2025
Chen, Pamela K., United States District Judge
Summary
The plaintiffs attempted to use confidential discovery materials obtained in a separate case to support their claims, but the court denied their request and ordered them to file a new complaint without those allegations. The court also quashed the plaintiffs' subpoenas for the materials and denied their motion to file a second amended complaint without redactions. The court found that the plaintiffs were not entitled to discovery solely for the purpose of amending their complaint.
KATHALEEN FREEMAN, et al., Plaintiffs,
v.
HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED, HSBC BANK USA, N.A., BARCLAYS BANK PLC, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V., CREDIT SUISSE AG, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1–50, Defendants.
RYAN BOWMAN, et al., Plaintiffs,
v.
HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED, HSBC BANK USA, N.A., BARCLAYS BANK PLC, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V., CREDIT SUISSE AG, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1–50, Defendants
v.
HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED, HSBC BANK USA, N.A., BARCLAYS BANK PLC, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V., CREDIT SUISSE AG, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1–50, Defendants.
RYAN BOWMAN, et al., Plaintiffs,
v.
HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED, HSBC BANK USA, N.A., BARCLAYS BANK PLC, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V., CREDIT SUISSE AG, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1–50, Defendants
18-CV-7359 (PKC) (CLP), 19-CV-2146 (PKC) (CLP)
United States District Court, E.D. New York
Filed February 26, 2025
Counsel
Aaron Schlanger, Ari Ungar, Cindy T. Schlanger, Dina Gielchinsky, Michael Jacob Radine, Gary M. Osen, Osen LLC, Hackensack, NJ, John M. Eubanks, Pro Hac Vice, Motley Rice LLC, Mount Pleasant, SC, Peter Raven-Hansen, Pro Hac Vice, Osen LLC, Hakensack, NJ, for Plaintiffs Kathaleen Freeman, Albert Snyder, Richard Lee, Marsha Kirby, Steven Kirby, Maxine E. Crockett, Marvise L. Crockett, Tracie Arsiaga, Steven Greenwood, Stephen W. Hiller, Jeremy Church, Sandra Hankins, Ingrid Fisher, Kristin Walker, Steven T. Fisher, Kathleen Gramkowski, Mary Carvill, Peggy Carvill-Liguori, Daniel Carvill, Pamela Adle-Watts in 18-CV-7359.Aaron Schlanger, Gary M. Osen, Osen LLC, Hackensack, NJ, John M. Eubanks, Pro Hac Vice, Motley Rice LLC, Mount Pleasant, SC, Peter Raven-Hansen, Pro Hac Vice, Osen LLC, Hakensack, NJ, for Plaintiffs John Watts, Gloria Nesbitt, Deontae James Hamilett, Chiquita Talbert, Tawanna Talbert Darring, Latasha Marble, James Talbert, Miranda Pruitt, Velina Sanchez, Aloysius Sanchez, Sr., Rommel Rocha, Phillip Sanchez, Aloysius Sanchez, Jr., Gloria P. Reynoso, Jasmin Reynoso, Patricia Reynoso, Jose Reynoso, Ashley Wells Simpson, Chad Wells, Crystal Stewart, Chasity Wells-George, Candice Machella, Billy Doal Wells, Hope Elizabeth Veverka, Donna Jean Heath, Lola Jean Modjeska, John David Heath, Olga Lydia Gutierrez, Ismael Martir, Victoria M. Foley, Nathaniel Foley, Michael Scott DeWilde, Steven Morris, Danielle Dechaine-Morris, Nicholas Morris, Kevin Morris, Monica Arizola, Roberto Aaron Arizola, Roberto Arizola, Sr., Cecilia Arizola, Danny Arizola, Ricardo Arizola, Greg Klecker, Maria Vidal, Tamara Hassler, Richard E. Hassler, JoAnne Sue Hassler, Scott Huckfeldt, Kathryn Huckfeldt, Alisha Huckfeldt, Matthew Huckfeldt, Timothy Newman, Padraic J. Newman, Amenia Jonaus, Gernessoit Jonaus, Daphnie Jonaus Martin, Ricky Jonaus, Marckendy Jonaus, Claire Jonaus, Sharen Jonaus Martin, Masina Tuliau, Brianna Renee Navejas, Margarito A. Martinez, Jr., Alvis Burns, JoDee Johnson, James Higgins, Wendy Coleman, Brian Radke, Nova Radke, Steven Vernier, Jr., Clifford L. Smith, Jr., Georgianna Stephens-Smith, Corena Martin, Adam Mattis, Terrance Peterson, III, Petra Spialek, David G. Cardinal, Jr., Richelle Hecker, Victoria Hecker, A Minor, William F. Hecker, Jr., Nancy Hecker, John D. Hecker, Robert F. Mariano, Debra Mariano, Bobbie D. Mariano, Vickie Michay White, Gladys E. Reyes Centeno, Veronica Lopez Reyes, Zoraima Lopez, Jennifer Link, Sharon Johnston, Kenny Lee, Tom B. Lee, Ling P. Lee, Judy Collado, Kaiya Collado, Justin Waldeck, Tanja Kuhlmeier, Kaya Kuhlmeier, Robert J. Kuhlmeier, Theresa A. Kuhlmeier, Theresa Ann Kuhlmeier, Edward Kuhlmeier, Thomas Kuhlmeier, John Kuhlmeier, Robert W. Kuhlmeier, Christopher Anthony Bershefky, Adrian Sandoval, Rosa Esther Sandoval, Henry J. Bandhold, Sr., Afonso Bandhold, Mariana Bandhold, Joshua P. Stein, Nicole B. Stein, Rachel Stein, Jesse P. Stein, Michael Paul Alan Shelswell, Luke Murphy, Willette Murphy, Shane Irwin, Helen Marguerite Irwin, Nicole Irwin, Maria Gomez, John Dana Greer, Stephanie C. Sander, Christopher D. Greer, Joseph L. Greer, Carl K. Greer, Christopher Joyner, Anne P. Joyner, Necole Dunlow Smith, Michael R. Mills, Eddie Jo Palinsky, Jerry A. Palinsky, II, Adina Palinsky, Jerry A. Palinsky, Sr., Kathleen Hoke, Joel Palinsky, Karaleen Herb, Eric Brandon Stoneking, Carrie Sue Stoneking, Faith Renee Stoneking, Joaqina Saenz Chorens, Luz Maria Estrada-Pulido, Frances Catherine Castro, Elva Espinoza, Bayli Vacho, Ronald Veverka, Carol Polley, Keith Veverka, Douglas Veverka, Sandra Soliday, Shannon Shumate, Lauren Shumate, L.S., Nicole DiCenzo, Larry DiCenzo, Kathy Crane, Johnny Allen Blair, Charlee Blair Webb, Arne Eastlund, Tina Eastlund, Sven Eastlund, Taylor Eastlund, Elizabeth Jo Eastlund, Matthew Adamson, Kathy Adamson, Richard Adamson, Christopher Adamson, Jeffrey Adamson, Justin Adamson, James Shepard, John P. Sklaney, III, Steven J. Friedrich, Philip Alan Derise, Norma Alicia Contreras, Jonathan Contreras, Sr., Carlos Contreras, Cesar Contreras, Hernan Contreras, Noel Contreras, Dannyel Contreras, Sharon M. Pugh, Britney E. Carter, Alicia Pearson, Daniel J. Evans, Justin Evans, Kevin Graves, Nicholas Gene Koulchar, Michael Koulchar, Suheil Campbell, Alexander Zayas, Cathy Andino, Luis Junior Puertas, Lidia Sullivan, Gabriela D. Puertas Vergara-Donoso, Christopher Michael Melendez, Narciso Melendez, Christina Melendez, Laurel Barattieri, Patricia Wheatley, Rebecca Barattieri, Nicole Barattieri, Gina Tesnar, Gloria L. Magana, Mario Stanton, Brandie Stanton, Terrymarie Stanton, Nannette Bryne-Haupt, Lynn Forehand, William Witte, Michael Mock, Tammy Dorsey, Eric Phye, James Gmachowski, Constance Brian, Amber Hensley, Karar Alabsawi, Michelle Taylor, Phyllis Taylor, John Taylor, Brian G. Taylor, Judas Recendez, Tyler Norager, Shalee Norager, Lawrence Kruger, Jackie Farrar-Finken, Emilie Finken, Stephen Finken, Alan Finken, Richard Finken, David Finken, Mark Finken, Peter Finken, Jean Pruitt, Joan Henscheid, Lori Ann McCoy, Glenn Michael Cox, Kurtiss Lamb, Francis L. Cot, Nancy Cot, Christopher Cot, Samantha Dunford, Maximillian Shroyer, Casey Reuben, Bree Reuben, Patrick Reuben, Jackie Stewart, Mark Munns, Crista Munns, Sharon DeBrabander, Dennis DeBrabander, Nicole DeBrabander, Joella Pratt, Joshua Starkey, Brent Hinson, William Hinson, Fran Hinson, Hilary Westerberg, William Ronald Little, Brenda Little, Kira Sikes, William Ronald Little, Jr., Joshua Denman, Randolph Delbert Nantz, Joshua Ryan Nantz, Lori Ann McCormick, Denise Vennix, Robert Vaccaro, Andrew Jeffrey Anderson, Elizabeth Lynn Islas, Samantha Balsley, Heath Damon Hobson, Jodi Michelle Hobson, Deadra Garrigus, David Garrigus, Nichole Garrigus, Kyla Ostenson, Matthew Garrigus, Shawn Ryan, Sharon Y. Dunn Smith, Dennis Dunn, Richard Landeck, Victoria Landeck, Lavonna Harper, Hyunjung Glawson, Jazmon Reyna, Carrie Thompson, Daniel Thomas, Sr., Diana Thomas, Daniel Thomas, Jr., Kelly Gillis, Melinda Flick, Ryan Sabinish, Emma McGarry, John Kirby, Michael Murphy-Sweet, Elizabeth Murphy-Sweet, Anona Gonelli, Lindsay Young, Leasa Dollar, Eugene DeLozier, Jared Stevens, Susan Maria Doskocil Hicks, Glenn Dale Hicks, Sr., David James Hicks, John Christopher Hicks, Dwight Martin, Dove Deanna Adams, Raven Adams, Lark Adams, Casey Boehmer, Jeremy D. Smith, David Dixon, Daniel Austin Dixon, Gretchen Lang, Cynthia Conner, Joshua Brooks, Joyce Brooks, Danny Brooks, Daniel Tyler Brooks, Delilah Brown, Tanya Suzzette Dressler, Daniel Dressler, James Dressler, Derek Gajdos, Tammie DenBoer, Brandeaux Campbell, Ryan Wilson, Jami Lin Wilson, Matthew Lammers, Alicia Lammers, Barbara Lammers, Gary Lammers, Stacy Pate, Angel Gomez, Denise Jackson, Andrew Moores, Sheila Tracy, Donald Tracy, Nichole Sweeney, Christina Sheridan, Matthew Benson, Melissa Benson, Daniel P. Benson, Carol Benson, Daniel R. Benson, Michael Dean Moody, Sr., Connie Moody, Kedrick Dante Moody, Drew Edwards, Arifah Hardy, Aundra Craig, Joyce Craig, Debra Cook-Russell, Nashima Williams Craig, Matthew Craig, Jonathan Craig, Andre Brown, Michael Cook, Valencia Cook, Donielle Edwards, Katherine M. Crow, Candace Cathryn Hudson, Patrick Tutwiler, Crystal Tutwiler, Shirley Stearns, John Stearns, Karen Hall, Marilyn Haybeck, Marc Stearns, Katherine McRill-Fellini, Ronald McRill, Matthew L. Mergele, Rene Pool, Derek Allen Hollcroft, Ursula Joshua, Tammy Kinney, Daniel Price, Steven Price, Tausolo Aieti, Imo Aieti, Lisi Aieti, Poloka Aieti, Christopher Bouten, Erin Bouten, Daniel Dudek, Margaret Dudek, Katie Woodard, Sarah Dudek, Andrew Dudek, Emanuela Florexil, Joseph T. Miller, Sean Harrington, Jessica Heinlein, Charles Heinlein, Sr., Jody Lyn Heinlein, Margarita Aristizabal, Sebastian Niuman, Brian J. Casey, Brittany Hogan, Shelley Ann Casey, Richard Casey, Sally Chand, Michael Chand, Jr., Christina Mahon, Ryan Chand, Brenda Chand, Mario Bowen, James David Hochstetler, Leanne Lizabeth Hochstetler, Kyle Austin Marshall, John Richard Tully, Marilyn Louise Tully, Slade Victor Tully, John Richard Tully, II, Heather Ann Farkas, Robert James Hunt, Boonchob Prudhome, Michele White, Shelby White, Perry White, Robert White, Joshua P.G. Wold, Celeste Yantis, Maricel Murray, Bryan S. Shelton, Darlene Shelton, Amanda Shelton, Bryan T. Shelton, Dan Laird, Angela M. Laird, Jordan M. Laird, Hunter L. Laird, William Lee, Alexandria L. Lee, William J. Lee, Lillie Lai Lee, Jennifer Lynn Hunt, Christopher Golembe, Kathryn Head, Christopher Watts, Janet L. Rios, Anita Baker, Jennie L. Morin, Randall Geiger, Kimberly Geiger, Jesseca Lyn Tsosie, Eric Donoho, Tyler Ginavan, Timothy Tiffner, Judith Tiffner, Joshua Tiffner, Seth Tiffner, Sarah Crosby, Alan Burks, Jackie Merck Hlastan, Alison Burks McRuiz, Zachary Burks, Bridget Juneau, Stephanie Juneau, Elena Shaw, Emily Shaw, Melissa Doheny, Kathy Kugler, Robert Kugler, Tanya Evrard, Billy Johnson, Judy Hoffman, Joshua Schichtl, Mark Schichtl, Katherine Prowse, Nicholas Prowse, Steve Wadleigh, Lea-Ann Wadleigh, Michael Lukow, Rikki Lukow, Bruce Lukow, Joseph Lukow, Andrew Lukow, Kristen Kelley, Maira Alvarez, Belinda Garcia, Jason Whitehorse, Jeffrey C. Mann, Michelle West, Rebecca L. Samten-Finch, Ava Lanette Bradley, Anthony Hudson, Austin Bewley, Mary Catherine McLaughlin, Brenda Habsieger, Jennifer Renee York, Jason York, Matthew Fieser, Benjamin Daniel Carrington, Jonathan Heslop, Russell Mason, Andy Pool, Frank L. Converse, Anthony M. Gerber, Charles B. Gregston, Carl Reiher, Jason Robinson, Frances Robinson, William Justin Weatherly, Michael Weatherly, Lee Wolfer, Beverly Wolfer, Rachelle Idol, James Vaughn, Jeannine Vaughn, Clifford Vaughn, David Wayne Hartley, Kaylie Hartley, Lisa Duncan, Virginia Billiter, Eric Billiter, Adrianne Kidd, William Allmon, Ronald Sloan, Mark E. Thomsen, Ardell Thomsen, Ralph Thomsen, Evan D. Bogart, Lani D. Bogart, Douglas R. Bogart, Christopher Bogart, Cana Hickman, Luis Rosa-Valentin, Iliana M. Rosa-Valentin, Preston Charles Kaplan, Nicole A. Kaplan, Noni Kaplan, David Kaplan, Jaime Zarcone, Jessalyn Holt, David Woodard, Adam Magers, Luis Garza, Susan Arnold, David Arnold, Samantha Tucker, Brandon Arnold, Daisy Tucker, John Daggett, Colleen Czaplicki, Russel Hicks, Sr., Russel Hicks, Jr., Jesse Williamson, Patrick O'Neill, John ONeill, Dianne ONeill, Daniel Luckett, Breanna Lynn Gaspar, Jamie Barnes, Max W. Hurst, Lillian Hurst, Christopher Hurst, Mark Hurst, Donna Farley, Noel J. Farley, Sr., Barbara Farley, Brett Farley, Cameron Farley, Chris Farley, Vickie McHone, Noel S. Farley, David C. Iverson, Daniel Menke, Jessica H. Williams, Tyler Latham, Bryant Bearfield, Carllie Paul, Kari Carosella, Connie Haddock, Jacob Bauer, Jeremy Bauer, Andrew Bradley, Julie Salhus, Kristen Galen, Patrick Ward, Jarrett Ward, Roberto Andrade, Sr., Sandra Valencia, Kara Connelly, Jean Dammann, Mark Dammann, Kevin Connelly, Rhonda Kemper, Jennifer Roose, Rhett Murphy, Roady Landtiser, Nathan Richards, Steven Richards, Christopher Songer, Kimberly Songer, Joseph Helton, Jessica Cabot, Jeanne Rhea McManus, Victor Ray Wise, II, Theodore Lester, Katrina Coe, Rhonda Smith, Matthew Coe, Sabrina Chapman, James Kinsey, Angel Mayes, Luke Stiggins, Donald Mayes, Rhonda Beattie, Jaydean Hamilton, Stephanie Kidder, Donald Field, Angelica Field, Senovia Field, Selicia Field, Ed Elliott in 18-CV-7359.
Peter Raven-Hansen, Pro Hac Vice, Gary M. Osen, Osen LLC, Hackensack, NJ, for Plaintiffs Brooke Kenney, Daniel Kenney in 18-CV-7359.
Gary M. Osen, Michael Jacob Radine, Osen LLC, Hackensack, NJ, for Plaintiff All Plaintiffs in 18-CV-7359.
Mark G. Hanchet, Robert William Hamburg, Mayer Brown LLP, New York, NY, Marc R. Cohen, Pro Hac Vice, Mayer Brown LLP, Washington, DC, for Defendants HSBC Holdings PLC, HSBC Bank PLC, HSBC Bank Middle East Limited, HSBC Bank USA, N.A. in 18-CV-7359.
Jeffrey T. Scott, Michael T. Tomaino, Jr., Jonathan M. Sedlak, Sullivan & Cromwell LLP, New York, NY, for Defendant Barclays Bank PLC.
Andrew Finn, Bradley P. Smith, Sharon L. Nelles, Sullivan & Cromwell LLP, New York, NY, for Defendant Standard Chartered Bank.
Robert G. Houck, Clifford Chance U.S. LLP, New York, NY, for Defendant Royal Bank of Scotland, N.V. in 18-CV-7359.
Alex C. Lakatos, Pro Hac Vice, Marc R. Cohen, Pro Hac Vice, Mayer Brown LLP, Washington, DC, Mark G. Hanchet, Robert William Hamburg, Mayer Brown LLP, New York, NY, for Defendant Credit Suisse AG in 18-CV-7359.
Jonathan I. Blackman, Carmine Daniel Boccuzzi, Mark Edward McDonald, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, Rathna Janani Ramamurthi, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, for Defendant Commerzbank AG in 18-CV-7359.
Gary M. Osen, Ari Ungar, Dina Gielchinsky, Michael Jacob Radine, Aaron Schlanger, Osen LLC, Hackensack, NJ, Peter Raven-Hansen, Pro Hac Vice, Osen LLC, Oradell, NJ, for Plaintiffs in 19-CV-2146.
Alex C. Lakatos, Pro Hac Vice, Mayer Brown LLP, Washington, DC, for Defendant Credit Suisse AG in 19-CV-2146.
Jonathan I. Blackman, Carmine Daniel Boccuzzi, Katherine Rosemary Lynch, Mark Edward McDonald, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, Rathna Janani Ramamurthi, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, for Defendant Commerzbank AG in 19-CV-2146.
Chen, Pamela K., United States District Judge
MEMORANDUM & ORDER
*1 This case involves allegations brought by Plaintiffs under the Antiterrorism Act (the “ATA”), 18 U.S.C. § 2333, as amended by the Justice Against State Sponsors of Terrorism Act (“JASTA”), Pub. L. No. 114-222, 130 Stat. 852 (2016). Presently before the Court are: (i) Plaintiffs’ motion to file under seal an unredacted version of the Second Amended Complaint; and (ii) the motion of the defendants who have appeared in this case (the “Appearing Defendants”[1]) to quash the discovery request and subpoena served, respectively, on Defendant Standard Charter Bank (“SCB”) and non-party KBC Bank.[2] For the reasons discussed below, the Court: grants the Appearing Defendants’ motion to quash; denies Plaintiffs’ request to file an unredacted version of the Second Amended Complaint, instead ordering Plaintiffs to file a third amended complaint that does not contain allegations based on the discovery materials discussed infra; and sets a schedule for briefing the Appearing Defendants’ motion to dismiss as to the to-be-filed third amended complaint.
BACKGROUND
I. Factual Allegations
In November 2014, a group of American citizens killed or injured by terrorist attacks in Iraq between 2004 and 2011, and/or their families, filed an action, Freeman v. HSBC Holdings PLC, No. 14-CV-6601 (PKC) (CLP) (“Freeman I”), against ten banking institutions—HSBC Holdings, PLC; HSBC Bank PLC; HSBC Bank Middle East Limited; HSBC Bank USA, N.A.; Barclays Bank PLC; SCB; Royal Bank of Scotland, N.V.; Credit Suisse AG; Bank Saderat PLC; and Commerzbank AG—as well as John Does 1–50, seeking damages pursuant to the ATA, as amended by JASTA.
While Freeman I was pending, a different group of Americans who were injured or killed by terrorist attacks in Iraq, and/or their families, represented by the Freeman I counsel, filed two additional actions, Freeman v. HSBC Holdings PLC, No. 18-CV-7359 (PKC) (CLP) (“Freeman II”), and Bowman v. HSBC Holdings PLC, No. 19-CV-2146 (PKC) (CLP), seeking damages under the ATA and JASTA against the same defendants for materially the same conduct. These two cases were consolidated on July 13, 2023, with Freeman II, No. 18-CV-7359, becoming the lead case.[3] (7/13/2023 Docket Order.[4]) Freeman II and Freeman I, together, are “the Freeman actions.” On January 1, 2019, Plaintiffs[5] filed another action in this district against a different group of defendants, Bartlett v. Société Generale de Banque au Liban SAL, No. 19-CV-0007 (CBA) (TAM) (“Bartlett”),[6] “proceed[ing] on different theories of liability than the causes of action brought” in the Freeman actions. (Bartlett, No. 19-CV-0007, Disc. Mem. & Order, Dkt. 368, at 1–2.)
II. Procedural History
*2 The procedural background of this case is extensive, and the Court will recount only those facts necessary to resolve the present disputes.
A. The Instant Litigation
This Court dismissed Freeman I in its entirety for failure to state a claim in 2019. Freeman v. HSBC Holdings PLC, 413 F. Supp. 3d 67, 73 (E.D.N.Y. 2019), aff'd, 57 F.4th 66 (2d Cir. 2023), cert. denied, 144 S. Ct. 83. In 2020, this Court also dismissed the lead case in Freeman II, No. 18-CV-7359 against all defendants, except for Defendant Bank Saderat PLC, for failure to state a claim. Freeman v. HSBC Holdings PLC, 465 F. Supp. 3d 220, 235 (E.D.N.Y. 2020), recons. denied, 2020 WL 4481944. In 2021, the Court granted in part and denied in part Plaintiffs’ motions for default judgment against Defendant Bank Saderat PLC. Freeman v. HSBC Holdings PLC, Nos. 18-CV-7359 & 19-CV-2146, 2021 WL 76925, at *1 (E.D.N.Y. Jan. 7, 2021). Freeman II was stayed first pending the appeal in Freeman I and then pending the outcome of Twitter, Inc. v. Taamneh, which the Supreme Court decided on May 18, 2023. 598 U.S. 471 (2023); (1/28/2021 Minute Entry; 2/16/2023 Docket Order.).
On June 27, 2023, the Court granted Plaintiffs’ request in Freeman II[7] to file an amended complaint, (6/27/2023 Minute Entry), which included a request “to incorporate records produced by third parties in Bartlett,” (Bartlett, No. 19-CV-0007, Pls.’ R. 72(a) Objs., Dkt. 348, at 3 (citing Bartlett, No. 19-CV-0007, 6/27/2023 Freeman II Hr'g Tr., Dkt. 348-2, at 10:18–23)). In granting Plaintiffs’ request, the Court “made clear that [it] was not ruling or taking a position on whether the Bartlett protective order [that covered the third-party records] allowed the Freeman [II P]laintiffs to use Bartlett discovery material in the Freeman [II] complaint.” (Bartlett, No. 19-CV-0007, Disc. Mem. & Order, Dkt. 368, at 2 (citing Bartlett, No. 19-CV-0007, 6/27/2023 Freeman II Hr'g Tr., Dkt. 348-2, at 46).) The Bartlett discovery material Plaintiffs sought to use to amend the Freeman II complaint included records from KBC Bank, non-party to both Bartlett and Freeman II, and from Defendant SCB, which is a non-party in Bartlett. (Id. at 3.) On July 21, 2023, Plaintiffs sought permission from the Bartlett court to use these records in Freeman II. (Bartlett, No. 19-CV-0007, Pls.’ 7/21/2023 Letter, Dkt. 335.) On September 13, 2023, Plaintiffs filed in Freeman II a motion for “limited constructive discovery,” in which they sought to subpoena themselves for the records they obtained from discovery in Bartlett. (Pls.’ Mot. Constructive Disc., Dkt. 113, at 1.) The Court denied Plaintiffs’ motion for “limited constructive discovery” on September 15, 2023, “[g]iven the pending discovery motion in Bartlett ... and the existence of [a] protective order in that case.” (9/15/2023 Docket Order.) The Honorable Taryn A. Merkl, the Magistrate Judge assigned to Bartlett, denied Plaintiffs’ request to use the Bartlett materials in Freeman II at a conference on September 27, 2023. (Bartlett, No. 19-CV-0007, 9/27/2023 Minute Entry.) Plaintiffs appealed to the Honorable Carol B. Amon, the District Judge in Bartlett, but Judge Amon denied that appeal on December 21, 2023. (Bartlett, No. 19-CV-0007, Disc. Mem. & Order, Dkt. 368, at 11.)
*3 Plaintiffs filed the SAC in Freeman II on December 28, 2023. (SAC, Dkt. 118.)[8] The SAC contains dozens of pages of redactions, (see, e.g., id. at 163–71, 176–85), which were either “sourced from records Plaintiffs received from third parties in response to subpoenas issued in Bartlett ... subject to a protective order in that case,” or were “not sourced from records Plaintiffs received from third parties in response to [the Bartlett subpoenas]” but were redacted “in order to further reduce any inferences that could be drawn as to the confidential material,” (id. at 3 n.5). Plaintiffs state in the same footnote in the SAC that these records would “presumably” be obtained via discovery in Freeman II as well. (Id.) SCB, on behalf of the Appearing Defendants, filed a letter objecting to Plaintiffs’ “rel[iance] on confidential discovery materials obtained in another case to draft their SAC,” and requested that the Court order Plaintiffs “to file a new version of the SAC without the ... redactions.” (Defs.’ 1/5/2024 Letter, Dkt. 119, at 3.) The Court then stayed the schedule for motion to dismiss briefing “pending the resolution of Plaintiffs’ third-party discovery,” and “denie[d] the Appearing Defendants’ request to direct Plaintiffs to re-file the Second Amended Complaint without the redactions.”[9] (1/8/2024 Docket Order.)
Plaintiffs next filed a renewed motion for “constructive discovery” in both Freeman II and Freeman I, again seeking to subpoena themselves for the Bartlett discovery material. (Pls.’ Renewed Mot. Constructive Disc., Dkt. 120; Freeman I, No. 14-CV-6601, Pls.’ Renewed Mot. Constructive Disc., Dkt. 274.) At a hearing on February 5, 2024, the Court “lifted the stay of discovery in Freeman II ... for the limited purpose of permitting ... Plaintiffs to subpoena Defendant [SCB] and non-party KBC Bank for the information obtained in Bartlett ... that [was] the subject of Plaintiffs’ ” renewed motion for constructive discovery. (2/6/2024 Minute Entry.) The Court also specified that the parties needed to “get a clarified ruling in Bartlett” as to “whether or not this particular use ... violates [the Bartlett] protective order.” (2/5/2024 Hr'g Tr., Dkt. 129, at 38:19–21.)
The Court further set a schedule for Plaintiffs to serve subpoenas in Freeman II. (2/6/2024 Minute Entry.) On February 29, 2024, SCB, on behalf of the Appearing Defendants, filed its Letter Motion Opposing Plaintiffs’ Request for Production of Documents, wherein it objected to “(a) Plaintiffs’ First Request for the Production of Documents to Defendant [SCB],” and “(b) Plaintiffs’ subpoena to non-Party KBC Bank.” (Appearing Defs.’ Letter Opp. Disc. (“Defs.’ Opp. Disc.”), Dkt. 125, at 1.) Appearing Defendants specifically request that “the Court order that SCB and KBC need not respond to Plaintiffs’ discovery requests.” (Id. at 5.) Plaintiffs responded on March 14, 2024, and requested that the Court “direct Plaintiffs to file an unredacted version of the SAC under seal.” (Pls.’ Resp., Dkt. 127, at 5.)
B. Bartlett Litigation
On February 29, 2024, SCB filed a letter motion in Bartlett, requesting that the Bartlett court enter an order (i) confirming that the Bartlett protective order “do[es] not permit Plaintiffs or their counsel to use materials that SCB and KBC Bank ... produced ... for any purpose other than the Bartlett case,” and “(ii) admonishing the Freeman I and Freeman II plaintiffs’ counsel against any further misuse of those materials.” (Bartlett, No. 19-CV-0007, SCB's Letter Mot., Dkt. 374, at 1.) On August 13, 2024, Magistrate Judge Merkl granted SCB's letter motion, finding that “Plaintiffs’ counsel ... violated the” Bartlett protective order “[b]y analyzing the Bartlett Discovery Material to craft allegations for the [Freeman II SAC] and by relying on Bartlett Discovery Material to argue in support of seeking discovery in” Freeman II. (Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 15.) Magistrate Judge Merkl also noted that “a protective order cannot be used ‘as a means of protecting discovery that would otherwise be discoverable in the related actions.’ ” (Id. (quoting Charter Oak Fire Ins. Co. v. Electrolux Home Prods., Inc., 287 F.R.D. 130, 134 (E.D.N.Y. 2012).) Relatedly, as Magistrate Judge Merkl acknowledged, she did not “answer the ... more difficult question” of whether “use” of materials subject to a protective order prohibits a party's use of their knowledge of those materials to acquire them a second time in another matter. (Id. at 15–16 (finding that “the Court need not answer” the “more difficult question” because Plaintiffs’ “document request in Freeman II is based on the subpoena that was issued in Bartlett, which was prepared before [Bartlett] counsel had any exposure to protected information.”) (quoting 2/5/2024 Hr'g Tr., Dkt. 129, at 69:8–13).) Thus, Magistrate Judge Merkl concluded that the Bartlett protective order would not be “a bar to the Freeman II [P]laintiffs’ discovery efforts, if Judge Chen finds that discovery is appropriate in that case without reference to information gleaned from Bartlett Discovery Materials.” (Id. at 16.) On August 27, 2024, the Bartlett plaintiffs appealed Magistrate Judge Merkl's decision to Judge Amon. (Bartlett, No. 19-CV-0007, Pls.’ Appeal, Dkt. 431.)
*4 On December 19, 2024, Judge Amon denied the Bartlett plaintiffs’ appeal, “agree[ing] with Magistrate Judge Merkl that Plaintiffs’ ‘review and incorporation of Discovery Material in the [Freeman II SAC]—even redacted—constitutes an improper use’ because ‘the Discovery Material was used to craft claims against SCB.’ ” (Bartlett, No. 19-CV-0007, Appeal Mem. & Order, Dkt. 453, at 7 (alteration in original) (quoting Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 9).) Judge Amon further confirmed that Magistrate Judge Merkl did not “[hold] that mere knowledge that the Confidential Information exists when requesting the same records in another case is a violation of the” Bartlett protective order. (Id. at 10.) Lastly, Judge Amon confirmed that the protective order is not a “ ‘bar’ to Plaintiffs’ Freeman II discovery efforts,” further explaining that “to the extent Plaintiffs’ ‘document request in Freeman II is based on the subpoena that was issued in Bartlett, which was prepared before [Plaintiffs] had any exposure to Protected Information,’ and Plaintiff[s] do[ ] not advocate for production before Judge Chen based on ‘arguments grounded on’ or ‘gleaned from’ Bartlett Discovery Material, such discovery is appropriate.” (Id. at 11 (cleaned up) (quoting Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 16).)
On August 19, 2024, SCB on behalf of the Appearing Defendants filed a letter with this Court regarding Magistrate Judge Merkl's decision and requesting that the Court “order Plaintiffs’ counsel to file a new amended complaint without [the] redacted information” and to “set a new motion-to-dismiss briefing schedule.” (Defs.’ 8/19/2024 Letter, Dkt. 130.) Plaintiffs filed a letter in response on August 28, 2024. (Pls.’ 8/28/2024 Letter, Dkt. 131.) On December 20, 2024, Plaintiffs filed a letter with this Court regarding Judge Amon's decision, (Pls.’ 12/20/2024 Letter, Dkt. 132), and on December 27, 2024, SCB filed a letter in response on behalf of the Appearing Defendants wherein they reiterated their requests from their August 19, 2024, Letter, (Defs.’ 12/27/2024 Letter, Dkt. 134 (requesting “the Court ‘order Plaintiffs’ counsel to file a new amended complaint that does not include redacted allegations (or otherwise reflect information sourced from the Bartlett discovery material) and set a schedule for motion-to-dismiss briefing’ ”)).
DISCUSSION
I. Defendants’ Motion to Quash
A. Legal Standard
Courts “consistently den[y] discovery requests [that] are lodged for the purpose of obtaining extra information prior to amending a complaint.” K.A. v. City of New York, No. 16-CV-4936 (LTS) (KNF), 2021 WL 5889254, at *2 (S.D.N.Y. Dec. 13, 2021) (collecting cases). This is because “a plaintiff's desire to gain more information in order to generate stronger pleadings is not a legitimate basis to compel discovery at this early stage.” Id.; see also Acklin v. Eichner, No. 20-CV-7042 (GHW), 2024 WL 4826799, at *21 (S.D.N.Y. Nov. 18, 2024) (“Defendants are not obligated to produce ... information to [p]laintiffs so that [p]laintiffs may adequately plead a claim for relief.”), appeals filed, Nos. 24-3341 & 25-3, 2024 WL 4826799 (2d. Cir. 2024).
B. Application
Although Plaintiffs’ service of the same subpoenas used in Bartlett, in itself, is not prohibited by the Bartlett protective order, (see Bartlett, No. 19-CV-0007, Appeal Mem. & Order, Dkt. 429, at 6, 11), the Court nonetheless finds that those subpoenas are improper in this case because Plaintiffs are not entitled to discovery solely for the purpose of amending their complaint. Here, Plaintiffs’ First Amended Complaint was dismissed, and now Plaintiffs seek to obtain discovery solely for the purpose of amending it a second time. See K.A., 2021 WL 5889254, at *2 (noting that courts “consistently den[y] discovery requests [that] are lodged for the purpose of obtaining extra information prior to amending a complaint” and collecting cases)); Acklin, 2024 WL 4826799, at *21 (“Defendants are not obligated to produce ... information to [p]laintiffs so that [p]laintiffs may adequately plead a claim for relief.”). As the Court explained at the hearing in this matter: “The further step of saying ... we would like to also get some discovery so that we can further bolster our claims against this motion to dismiss is something that is not generally permitted.” (2/5/2024 Hr'g Tr., Dkt. 129, at 64:14–17; see also id. at 49:11–12 (“If you didn't have the information before you brought your complaint and it was dismissed, you're out of luck.”).)
*5 Admittedly, Plaintiffs are in the atypical situation of already possessing the information that they seek to subpoena. But because they are prohibited from using the information, they are functionally in the same position as plaintiffs who seek to file an amended complaint but do not possess the documents or other discovery materials that could be used to amend the complaint. And so Plaintiffs are not, at this point, entitled to discovery solely for the purpose of bolstering an amended complaint, as this “desire ... is not a legitimate basis to compel discovery at this ... stage.” K.A., 2021 WL 5889254, at *2.
The Court also finds that Plaintiffs’ request for the SCB and KBC records, in fact, runs afoul of Judge Amon's interpretation of the Bartlett protective order. As discussed, in ruling that the protective order is not a “ ‘bar’ to Plaintiffs’ Freeman II discovery efforts,” Judge Amon explained that “to the extent Plaintiffs’ ‘document request in Freeman II is based on the subpoena that was issued in Bartlett, which was prepared before Plaintiff[s] had any exposure to Protected Information,’ and Plaintiff[s] do[ ] not advocate for production before Judge Chen based on ‘arguments grounded on’ or ‘gleaned from’ Bartlett Discovery Material, such discovery is appropriate.” (Bartlett, No. 19-CV-0007, Appeal Mem. & Order, Dkt. 453, at 11 (emphasis added) (cleaned up) (quoting Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 16).) In other words, Plaintiffs may make a discovery request in this case using the same subpoena that was issued in Bartlett so long as they do not advocate for production “based on ‘arguments grounded on’ or ‘gleaned from’ Bartlett Discovery Material.” (Id. (quoting same).) But, here, Plaintiffs’ arguments for why they should be permitted to subpoena SCB and KBC, i.e., that the records they seek from SCB and KBC are relevant to this case and, more specifically, to the SAC, are necessarily “grounded on” and “gleaned from” the Bartlett discovery materials. Had Plaintiffs not obtained those materials in Bartlett, they would not know that they might be relevant here.[10]
Accordingly, the Court grants the Appearing Defendants’ motion to quash and directs that “SCB and KBC need not respond to Plaintiffs’ discovery requests.” (Defs.’ Opp. Disc., Dkt. 125, at 5.)
II. Plaintiffs’ Motion to File the Second Amended Complaint Without Redactions
A. Legal Standard
Rules 15 and 16 of the Federal Rules of Civil Procedure govern the ability of a plaintiff to amend a complaint. After the outset of litigation, Rule 15(a)(2) allows “a party [to] amend its pleading only with the opposing party's written consent or the court's leave,” which should be given “freely ... when justice so requires.” Fed. R. Civ. P. 15(a)(2). “This is a ‘liberal’ and ‘permissive’ standard.” Sacerdote v. N.Y. Univ., 9 F.4th 95, 115 (2d Cir. 2021) (quoting Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015)). The “period of ‘liberal’ amendment ends if the district court issues a scheduling order setting a date after which no amendment will be permitted.” Id. Here, because the Court has not previously set a date after which no amendment will be permitted, Rule 15 is the appropriate standard.
B. Application
*6 Plaintiffs seek leave to file “an unredacted version of the SAC under seal” that contains allegations based on the Bartlett discovery materials, (Pls.’ 12/20/2024 Letter, Dkt. 132, at 3; see also Pls.’ Resp., Dkt. 127, at 1), while the Appearing Defendants request that the Court “order Plaintiffs’ counsel to file a new amended complaint that does not include redacted allegations (or otherwise reflect information sourced from the Bartlett discovery material) and set a schedule for motion-to-dismiss briefing,” (Defs.’ 12/27/2024 Letter, Dkt. 134, at 3). Putting aside the unique circumstances here, the Appearing Defendants have provided written consent for Plaintiffs to amend their pleadings, thereby satisfying Rule 15(a)(2). Fed. R. Civ. P. 15(a)(2).
Importantly, Judge Amon has clarified that Plaintiffs’ incorporation of the Bartlett discovery material, as well as any analysis of that material, would “constitute an improper use” under the Bartlett protective order. (Bartlett, No. 19-CV-0007, Appeal Mem. & Order, Dkt. 453, at 7 (quoting Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 9); see also Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 15 (“By analyzing the Bartlett Discovery Material to craft allegations for the [SAC] in Freeman II, ... the Court finds that Plaintiffs’ counsel has violated the Protective Order.”).) Thus, any amended complaint that Plaintiffs file in this case cannot include or reference the Bartlett discovery materials, or any analysis based on those materials.
Because the Appearing Defendants have provided written consent for Plaintiffs to amend their pleadings, (Defs.’ 12/27/2024 Letter, Dkt. 134, at 3), and because “justice so requires,” Fed. R. Civ. P. 15(a)(2), Plaintiffs’ request to file an unredacted version of the SAC under seal is denied. Plaintiffs must instead file a third amended complaint that complies with the above instructions and guidance by March 28, 2025. Defendants shall file any motion to dismiss by April 28, 2025; Plaintiffs shall file their opposition brief by May 28, 2025; and Defendants shall file their reply, if any, by June 11, 2025.[11]
CONCLUSION
For the reasons explained above, Defendants’ motion to quash is granted, and Plaintiffs’ request to file an unredacted version of the Second Amended Complaint under seal is denied. Plaintiffs shall file a third amended complaint that complies with the above instructions and guidance by March 28, 2025. Defendants shall file any motion to dismiss by April 28, 2025; Plaintiffs shall file their opposition brief by May 28, 2025; and Defendants shall file their reply, if any, by June 11, 2025.
SO ORDERED.
Footnotes
In addition to Standard Charter Bank, the Appearing Defendants are HSBC Holdings PLC; HSBC Bank PLC; HSBC Bank Middle East Limited; HSBC Bank USA, N.A.; Barclays Bank PLC; Royal Bank of Scotland N.V. (f/k/a ABN AMRO Bank N.V.); Credit Suisse AG; and Commerzbank AG. (Defs.’ 1/5/2024 Letter, Dkt. 119, at 1 n.1.)
The Appearing Defendants’ denomination of their motion as one to quash is partially a misnomer, since they do not rely on Federal Rule of Civil Procedure 45, and one of the parties from whom Plaintiffs seek information is a defendant, not a third party, in this case. Nonetheless, the Court adopts that term as shorthand for the Appearing Defendants’ motion. The Court also uses the terms “discovery request” and “subpoena” interchangeably.
Accordingly, references throughout this Memorandum & Order to “Freeman II” that refer to events prior to July 13, 2023, are to No. 18-CV-7359, and references that refer to events on or after July 13, 2023, are to the consolidated cases, No. 18-CV-7359 and No. 19-CV-2146.
References to docket entries without preceding case numbers are to the No. 18-CV-7359 case.
For purposes of this Memorandum & Order, “Plaintiffs” refers to the plaintiffs in Freeman II.
“[A]ll [P]laintiffs in [Freeman II] are also plaintiffs in Bartlett.” (Second Am. Compl. with Full Caption (“SAC”), Dkt. 118, at 3 n.5.)
At the time the Court orally granted Plaintiffs’ request to amend the complaint on June 27, 2023, the cases were still denominated as Freeman II and Bowman. (6/27/2023 Minute Entry.) The matters were subsequently consolidated into Freeman II. (7/13/2023 Docket Order.)
The Court notes that Plaintiffs also filed a version of the Second Amended Complaint one day prior, on December 27, 2023, which did not contain a full caption. (Dkt. 117.) Because the version filed at Dkt. 118 includes a full caption that lists all Plaintiffs, (SAC, Dkt. 118), the Court views this later version as the operative SAC for purposes of this Memorandum & Order.
On December 27, 2023, plaintiffs in another related case before this Court, Stephens v. HSBC Holdings PLC, No. 18-CV-7439 (PKC) (CLP), filed a first amended complaint, containing “factual allegations [that] ... are substantially identical to those in the Second Amended Complaint filed by the plaintiffs in Freeman II, except it does not include redacted allegations, which Plaintiffs understand were sourced or otherwise derived from discovery materials obtained by the Freeman II plaintiffs in Bartlett.” (Stephens, No. 18-CV-7439, First Am. Compl., Dkt. 19, at 1 n.1.) Although the Stephens first amended complaint did not contain the redacted allegations, “the Court stay[ed] the briefing schedule for Defendants’ motions to dismiss in [Stephens] as well.” (1/8/2024 Docket Order.)
In this regard, the Court notes that while Magistrate Judge Merkl did not “answer the ... more difficult question” of whether “use” of materials subject to a protective order prohibits a party's use of their knowledge of those materials to acquire them a second time in another matter, (Bartlett, No. 19-CV-0007, Protective Order Mem. & Order, Dkt. 429, at 15–16 (citation omitted)), Judge Amon's subsequent decision, in effect, did, by clarifying that it would be improper for Plaintiffs to advocate for the production of documents in this case pursuant to the same subpoena used in Bartlett “based on ‘arguments grounded on’ or ‘gleaned from’ Bartlett Discovery Material,” (Bartlett, No. 19-CV-0007, Appeal Mem. & Order, Dkt. 453, at 11). In any event, this Court finds that the discovery Plaintiffs seek here is inappropriate because of the general prohibition on discovery for the purpose of amending a complaint.
The Court finds that it would be premature to address the Appearing Defendants’ argument regarding the scope of Plaintiffs’ discovery request on SCB and KBC. (See Defs.’ Opp. Disc., Dkt. 125, at 5 (“Plaintiffs’ [discovery] request is wildly overbroad” and “outside the scope of what the Court has authorized them to request”)), and thus declines to do so.