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In re Reserve Fund Secs. & Derivative Litig. v. Reserve Mgmt. Co.

United States District Court for the Southern District of New York

May 23, 2011, Decided; May 23, 2011, Filed

09 MD. 2011 (PGG); 09 Civ. 4346 (PGG)

Opinion

 [*156]  MEMORANDUM OPINION & ORDER

PAUL G. GARDEPHE, U.S.D.J.:

The Commission seeks an order compelling Defendants to produce approximately sixty emails between Bruce Bent II and his wife, Rebecca Bent, exchanged on September 15 and 16, 2008 (the "Bent emails"). Defendants contend that these emails are protected by the marital privilege. (Oct. 22, 2010 Joint Ltr. at 7) In a November 29, 2010 Order — familiarity with which is presumed — this Court reserved decision concerning the production of these emails and directed "the Commission and Defendants to make submissions . . . addressing this issue in greater detail and citing supporting legal authority." (Nov. 29, 2010 Order at 17) The parties have provided additional briefing, and the issue is ripe for resolution.

BACKGROUND

Rule 26(b)(1) of the Federal Rules of Civil Procedure provides that "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense," and that "[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). "This obviously broad rule is liberally  [**9] construed," Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir. 1991) (citing Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S. Ct. 2380, 57 L. Ed. 2d 253 (1978)), and "[i]n general, limitations on discovery are imposed only where the requested discovery is 'sought in bad faith, to harass or oppress the party subject to it, when it is irrelevant, or when the examination is on matters protected by a recognized privilege.'" Melendez v. Greiner, 01 Civ. 07888 (SAS) (DF) 2003 U.S. Dist. LEXIS 19084, at *3-4 (S.D.N.Y. Oct. 23, 2003) (quoting In re Six Grand Jury Witnesses, 979 F.2d 939, 943 (2d Cir. 1992)).

The Commission contends that it is entitled to discovery of the Bent emails because (1) Bent II had no reasonable expectation of privacy in email transmitted over Reserve Management Company, Inc. ("RMCI") email system; and (2) Defendants inadvertently produced some of the Bent emails, and thereby waived the marital privilege as to all such emails. (Jan. 12, 2011 SEC Ltr. at 4) Defendants contend that the Bent emails are protected by the marital communications privilege and that there has been no waiver. (Dec. 6, 2010 Def. Br.; Jan. 14, 2011 Def. Ltr. at 2-3) 1

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275 F.R.D. 154 *; 2011 U.S. Dist. LEXIS 55769 **

In re THE RESERVE FUND SECURITIES AND DERIVATIVE LITIGATION; SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. RESERVE MANAGEMENT COMPANY, INC., RESRV PARTNERS, INC., BRUCE BENT SR., and BRUCE BENT II, Defendants, and THE RESERVE PRIMARY FUND, Relief Defendant.

Subsequent History: Later proceeding at SEC v. Reserve Mgmt. Co. (In re Reserve Fund Sec. & Derivative Litig.), 2012 U.S. Dist. LEXIS 191089 (S.D.N.Y., Sept. 10, 2012)

Prior History: Reserve Fund Sec. & Derivative Litig. v. Reserve Mgmt. Co., 2011 U.S. Dist. LEXIS 158863 (S.D.N.Y., Apr. 21, 2011)

CORE TERMS

email, communications, employees, privacy, reasonable expectation of privacy, monitor, personal use, no reasonable expectation, marital communication, laptops, messages, attorney-client, confidential, reserves, disclosure, spouses, courts, notice, files, banning, inspect, server, marital privilege, third party, confidence, discovery, transmitted, routinely, marriage, inboxes

Civil Procedure, Discovery & Disclosure, Discovery, Relevance of Discoverable Information, Evidence, Marital Privileges, Confidential Communications, Elements, Scope, Burdens of Proof, Allocation, Business & Corporate Compliance, Computer & Internet Law, Privacy & Security, Company Communications