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Case x:20-cv-0~~.74-GHW Document ~1 ~il~d ~.~./01/2~ Page ~.

~f 4

~.~ N~~E~C3~'~'8z- Ira S. Nesenoff Barbara H. Trapasso Philip A. Byler

Andrew T. Milt~nberg Tara J. Davis Senior Litigation
:̀ ~e~.~.~ Fork ( ~~osto~~ Diana ~. Warshow Coutzsel
Stuart Bernstein
Gabrielle M. Vinci
ATTORI~IEYS AT LAW Kara L. Gorycki Amy J. Zamir
nmllplaw.~o~ Cindy A. Singh Jeffrey S. Berl~owitz
Nicholas E. Lewis Rebecca C. Nunberg
Adrienne D. Levy Counsel
Ryaan Nizam
Regina M. Federico Marybeth Sydor
Title IX Consultant

November 1, 2020
Hon. Gregory H. V~~ods, U.S.D.J.
~.Jnited States 1~istrict Co~.rt for the
Sout~e~n District ~f New York
500 Pe~.rl Street, Room 1920
I~ew ~or~,l~ew York 10007

1~: ~a~~ioun v. Laidlaw &Company(U~.) Ltd ;Index. No.• 20-cv-b 1 ~4

Plaintiff s O~~osition to I~e~`~nd~.nt's ~Ze~u~s~ for a Pre-Motion Conference

Dear Your Honor:

~e represent ~'laintiff.` C-eorge Calhoun ("Plaintiff.
' or "Mr. Calhoun") itl the ~.bove
referenced matter and respectfully subn~it this letter i~ apposition to Defendant's :~aidlaw & ~o.
(UI~.) Ltd. ("De~e~.dant" or "Laidlaw") pry-motion letter fnr their anticipated motion to dismiss IVIr.
Cal~iot~n's retaliation {~CF Igo. 1 S).

I. I~t~ra~ductior~ and B~~k~round

This matter stems from Laidlaw's breach of an agreed upon settlement a~reeme~t, by t11e
in~prop~r withholding of $125,000 of the settlement amount without basis under the la.w. In
addition to asserting ~ claim for breach of captract, ~'~ai~tiff also asserts that La dlaw's intentional
b1-each of the settlement agreement was in retaliation for plaintiff's prior complaint of race
c~~scrimination which r.esulted in the settlement agreement in the first pace.

.briefly, Plaintiff worl~ed as a stock broker for Defendant, an investment ~i-m with a
principal place of business ire New York. During his term of employment, Plaln.tif_f_ was the victim
of racial discrimination due to his membership in a protected Mass ~.s an African-~Am.~rican male.
Following the enc~ of. his tenure, Plaintiff. engaged legal counsel and made an unequivocal complai~.t
of race di~c~imination to I~ef~ndant. Th~reafte~, the parties participated in a mediation where
L7ef.~nda~t withheld information reg~.rdin~ a pending customer complaint (the "Doi Complaint"}
~.~d agreed to settle the matter and pay $654,000 to Plaintiff. Thereafter, Defendant att~mt ted to
Case 1:2a-cv-06174-GHW Document 2~. Filed 1~./Q1/~~ Page 2 of 4 4,

~fTG'~'V ~.rU1~C ~ ~US~U~1

stror~~~.r Plaintiff into agreeing to a decreased payment in light of the Doe complaint. A~tllough
Plaintiff agreed to a carve out of Defendant's release in the settleln~nt agreement for ~~on-specific
future claims of indemnification., at no point did Flaintlff agree to any wi.thlloldln.g of any amount of
the settle~l1ent ~u~n and counsel vehemently opposed tl~e withholding of any sum as suggested by
Defe~da~~~'~ ~ou~~~el. Indeed, contrary to the representations. in Defendant's counsel's letter, and
st~.t~ments on the record at the Initial conference, the Doe Complaint vvas got mentioned, known to,
nor contemplated by Plaintiff during negotiations -- in particular not a.t the mcd~at~on where
Defendant first agreed to pay the $dSO,~QO settlern.ent sum with a full release to Plaintiff. After
extensive discussion regarding I~efel~dan~t's gamesmanship tactics, Laidlaw e~.plicit~y .greed it
would not withhold monies from the settlement amount. Ther~afte~, however, after f~.11y executing
the settle~n~nt agreement, Laidlaw did withhold the aforeme~tionec~ $125,0OO.~Q and the instant
hatter ensued. Notably, the $125,OOQ withholding was purportedly for inden~~zification related to
the settlement of the Doe Complaint vv~l~ch Defense counsel conceded on the record has yet to come
to fruition. In essence, Defendant had no excuse to withhold any sum from the settleme~zt pa~~nent
anc~ still does not to this day.

II. Laid~avv's I~o~itia~ that l~~a~~tif~'s Retal~at~an ~l~ims ~~nri~t ~e ~ust~in~d ~s

Incorrect aid Unsupported by the base Law
Under tl~e New York{ State Human Rights Law ("SHILL") a plaintiff ~~Zust show that he was
~~.~bjpct to an adverse action c~.use by engagement in protected actfvity. ~'ee Cardwell v. Davis
Palk c~ ~~a~dwell LAP, 2020 WL 6274826 (S.D.N.Y. Oct. 24, ~Q20). An adverse el~n~loyme~.t
action is "any ~.ctian that `could we11 dissuade a reasonable worker from mal~ing o~ supporting a
charge of discrimination"' Cardyvell at X36 (quoting Vega v. Hempstead Uniol? ~'~ee S'cli. Dzst., S01
F.3d 72, 90(Zd Cir. 2 1.5)). Under the New Yor1c City Human Rights Law ("~HR..L"), Plaintiff daes
na~t need to allele any adverse er~.plo~ln~~t action but need or11y allege that ~,aidlaw engaged in
conduct that was reasonably likely to deter a. person f~o~n engaging in protected activity. ~'ee
Caj~~well at *37(quoting Mihalik 715 F.3d at 112}.

Laidla~?v argues ~'laintiff cannot maintain a claim under the ~HRL o~ the CHRL because he
was not an e~nplo~ee at the time of the alleged retaliatory conduct, and as a result cannot allele any
adverse ernplayment action or causation. Laidla.~v further argues, nonsensically, that Plaintiff
retaliation claims mL~st fail because he signed a general release of claims, including those un~.~r the
~~R.L and. the CHRL. Defendant is wrong.

First, Plaintiff acknov~ledges ghat he signed a general release of all claims in favor of
Defendant which ~ncl.uded claims undex the SHRL arzd the G~-IRL. However, as a plain. ~•eadzng of
the settlement agreement displays, and as Your Honor noted during the initial conference,
I~ef~ndant's breach occurret~ a~te~ execution of the settlement agrreme~zt, making the current claims
base ~.:~(~~~v-C~~174-GHW Document ~~. filed 1~./01/2U page ~ of 4

~e~7V ~rUlk. ~ BUS~UI1

far retaliation riot subject to the sighed release. Second, the premise that Plaintiff is not covered
because he was not an employee of I~efendant is belied by the plain of tie statutes
themselves, which w~r~ am.ended -- prior to the instant action, to protect independent contractors
from ~iscriminatioll and retaliation in the workplace.

Third, ~ pl~.intiff can establish a causal ca~ne~tion "either directly throubh a showing of
retaliatory animus, ar indirectly tllro~xgh a showing that the protected activity was follov~cd closely
by the adverse actiar~." Cardwell at X37. Cau~ts have found that a breach of a settlement a~;reeme~t
carp constitute an adverse action sufficient to demonstrate a claim of retaliation. See Baum v.
Rockland Cmty. Coll., 299 F.Supp.2d 172, 176 {S.D.N.Y. 2003). Moreover, a reasonable jury could
certainly end that the unilateral ~ithhholding of a substantial sum of money from an agreed upon
settlement payout for reasol~s proven false by Defendant's own statements would persuade a
reasonable employee from engaging in the protected cond~.~ct that led Plaintiff to this point, i.~.
would deter a reasonable empl~yoee from making a claim of discrimination. Defendant has thus far
beep unable to provide a legitimate basis for. withholding the settlement funds, beyond a.n
ul~callvincing reference to the "common law" (See Transcript of October 21, 2020 Initial
Conference, p. 1. a, In ~ 5) and coun.s~l has ~.dmitted that the profeered reason for the wit~iholding --
that asettlement of the l~oe complaint was imminent — is false, as nearly a ye~.~ later ~oL~nsel
concedes the Igoe Col~nplaint has not been settleed. Thus, the defenses and justifications for the
withholding thus far proffered by I~efer~dant are insufficient and untrue and, therefore, pretext. At a
minimum this would ~~ a question far the jury.

~Vloreover, the rn~re months between Plaintiff's complaint and the Defendant's ~vithholc~ing
of the settlement funds has bee~1 found to be a sufficiently close nexus ~ietween the protected
activity and adverse action to show causation, even under the stricter summary judgment stage. See
Summa v. Hofst~~a ~Iniv., X08 F.3d 115, 128 (2d Ci~~. 2013). 'T~Zis is especially true as, i~ the case
here, the close temporal relationship is made clear by the fact the adoration occurred at the first
actual opportunity to retaliate. Id. at 1 ~$ (citing Espinal v. Goot~d, SSS ~.3d 1. 1.9, 1.29 (2d Ci.r.

III. ~oncl~sio~
Plaintiff respectfully submits Defendant's anticipated motion to dismiss would be frivolous
and Defendant's request should. be denied. or Plaintiff respectfully requests the opportunity to amend
tale complaint to address Defendant's arguments and include further. allegations, inc3.uding, but not
limited ta, facts ~f the racial discrimination Mr. Calhoun faced while at Laidlaw to illt~n~inate the
overall context in which the challenged conduct occurred and to further expound upo11 Laidlaw's
direct, retaliatory ana.mus. ~:2~-cv-Q6174-GHW Document 21 ~il~d ~.~./01/20 Page 4 of ~

ILTe~~~ ~Crork ~ Bosfion

7Dated:November 1., ~0~0

1~Tew Fork:, l'~Te~v York l~.e~pectfuliy ~ub~n~t~ed,

/s/ ~abriell~ Vinci

.A►.ndre~~v T. Mi~tenberg
Gabrielle 1'~[. ~in~i
l~Ticholas ~Levvis


2 _~.____.~___.~_______________.~___ x


4 Plaintiff,

5 v. 20 Civ. 6174 (GHW)

7 Tel.~~anf~r~nce

8 Defend~.nt.

9 ---_~__________.~__-----------.---x
New York, N.Y.
10 October 21, 2020
4:30 p.m.
I~istri~t Judge



Attorneys for Plaintiff


Atto~ney far Defendant







212) 805-0300

1 THE COURT: This is Judge Woods.

2 Is counsel for plaintiff on the line?

3 MS. VINCT: Yes, your Honor. This is Gabrielle Vinci.

4 I'm joined by my colleague, Nicholas Lewis. We apologize. W~

5 were dialed in to the wrong conference line. ~n1e apologize for

6 the delay signing on this afternoon.

7 THE COURT: Thank you.

8 Ms. Vinci, do you know where counsel for defendant is?

9 M~. VINCI' So, we actually got the number to the

10 conference line -- the erroneous one -- from defendant's

11 counsel. We had some issues dialing into this conference line

12 at 4:30 and then were able to speak with him and he Baas dialed

13 into a conference line: 363-4749. I can email h.~m now and

14 tell him to dial in to this one, your Honor.

1,5 THE CURT: Thank you. Please do.

16 (Pause)

17 MR. MILAZZO: Hi. This is Chris Milazzo, for the

18 defendants.

19 THE COU~.T: Good. This is Judge Woods. So it's

20 4:42 p.m. Let's begin. First, let me ask for the parties'

21 appearances.

22 First, who's on the line for plaintiff

23 MS. VINCI: This is Gabrielle Vinci, from Nesenoff &

24 Miltenberg, LLP and?

25 MR. LEWD : Nicholas Lewis, from Nesenoff &


(212) 805-0300

1 Miltenberg, LL1~.

2 THE COU1~T: Thank you .

3 Who's on the line for defendant?

4 MR. MILAZZO: Christopher MilaZzo of Carmel, Mila~zo &

Di~hiara LLP, for the defendant.

6 ~'HE COURT: Thank you

7 Let me just make a few brief comments about the

8 protocol that we'll be using far this conference. First,

9 please remember that this is a public proceeding. Any member

10 of the public or press is welcome to join at any time.

ll Second, please keep your phones on mute at all times

12 when you're not ~ddressinc~ the Court or, with my permission,

l3 your a~l~r~rsar~. Please ~.o that even if you don't have

14 background noise where you are. We just heard a heavy sigh.

15 You may not think that there is background noise coming from

16 where you are, but breathing and other background noises can be

l7 distracting and can make it difficult for us to keep a clear

~. 8 record of the conversation. So please keep your phones on mute

19 at all times.

20 Next, please state your name each time that you speak

2l during this conference. You should state your name --

22 So whoever's calling from a number that ends with

23 0458, your phone is not on mute. Counsel, can you please

24 identify yourself?

25 MR. MILAZZO: This is Chris MilazZo. Th~.t's me. I'm


212) 805--0300


1 looking -- we have kind of a new phone system, so I'm looking

2 for the mule button.

3 THE COURT: Thank you.

4 Next, please identify yourselves bar name each time

5 that you speak during this conference. Please do that even if

6 you've spoken previously. That will help us to keep a clear

7 record of today's conversation.

8 Next, I'm inviting our court reporter to let us know

9 if she has any difficulty hearing or understanding anything

10 that we say here today. If she asks you to do something that

11 will make it easier for her to do her job, please do it to the

12 extent you can. And finally, I'm ordering that there be no

13 recording or rebroadcast of all or any portion of today's

14 conference.

15 So with that, let's begin with the substance of the

16 conference. My agenda is as follows for this initial pretrial

17 conference: First, I'm going to give the parties the

18 opportunity to describe any legal ar factual issues ghat you'd

19 like to bring to my attention. Second, I hope to discuss the

20 process that we'll be using to litigate the case going forward.

21 For that component of the conference, I expect to look to the

22 proposed case management plan and scheduling order to provide

23 the framework for our conversation. And last, I hope to

24 discuss what, if anything, I can do to help facilitate an

25 amicable resolution of the case.


(212) 805-030Q

Before we begin with the principal substantive agenda

2 of the conference, however, I'd. like tc~ briefly explore the

3 reason why we're starting s~ late.

4 Counsel for plaintiff told me before you jDined,

5 cauns~l for defendant, that they had dialed into a different

6 number for this conference, one that they had gotten from you.

7 I'm just curious what happened. I'm curious, in large part, to

8 see ~.~ there's something that I should be doing differently in

9 order to communicate the dial-in information.

10 Counsel, let me hear from you. Where did you c~et the

11 dial-in information for the line that you were using?

12 MR. MILAZZO: Sure. Your Honor, this is Chris

l3 Milazzo.

14 So, your order directed us to the COVID webs~te, and

15 we looped on there. And the number we had called in, which I

l6 d.on't have in front of me nc~w --- was the number on the website

17 with the PIN number.

18 THE COURT: I'm sorry. Which website?

19 MR. MILAZZO: It was on the -- you directed us to the

20 COV~II~ em~rgen~y section of the Southern District of New York

21 website. We went there. The call-in number on that website

22 was the number we called in to.

23 THE COURT: Thank you. So you went to the general

24 COVID section of the Court's website and found a generic phone

25 number there?


(212) 805-0300

1 MR. MILAZZO: Yeah. There was a phone number with a

2 PIN that. we used, Hold on. If T can just -- I can tell you.

3 I'm going to just pull it up once more.

4 So it's the "emergency individual rules and practices

5 in light of COVID-19." And an that number there's a number

6 two, conference and proceedings and civil cases, and it lisped

7 the number (888) 363-4749 with an access rode.

8 THE CURT: Thank you. Which judge's emergency rules

9 are you looking at?

10 MR. MILAZ ZQ: ~h, you know what? I'm sorry. I --- I

11 actually -- we didn't realize when w~ pulled this up. I'm just

12 looking at it now. It's Alison Nathan. I'm sorry. So that

13 was my fault and I apologise.

14 THE CQURT: Thank you.

15 MR. MILAZZO: I don't know how I ended up there,

16 THE COURT; Thank you. Yes. Good. Understood.

l7 So let's begin wi~.h the substance of the conference.

18 At the outset I'm going to turn first to counsel for plaintiff.

19 Counsel, what would you like to tell me about the case

20 as a w~.ole?

21 MS. VINCI: Thank you, your Honor. This is Gabrielle

22 Vinci.

23 The case alleges t.wo causes of action. The first is

24 breach of contract two and dour, a settlement agreement that

25 the parties reached back in the fall of 2019. The settlement


(212) X05-0 00

1 agreement provided that defendant would pay a sum total of

2 $650,0 0 to the plaintiff, Mr. Calhoun. After extensive

3 negotiation, defendant alluded to the idea that their would not

4 formalize the agreement, which was reached out of mediation,

5 unless there way a concession by my client that they be allowed

6 to withhold money from the settlement seam in anticipation of

7 settling a separate claim that had been made based on my

8 cl.~ent's prior service as a broker with the defendant's

9 company. After, again, extensive negotiation, it was agreed b~

10 all pasties that no sum of money would be withheld, the full

11 $650,000 agreed to at the mediation would be paid to plaintiff.

12 The agreement was fully executed in November of 2019.

13 In December of 2019, defen~.ant made a payment of

14 $525,000 125,000, again, under the auspice that

15 they were entitled to withhold that money related to an

16 anticipated settlement based on this alleged client's

17 complaint. We have seen absolutely no proof of any settlement

18 or any obligation that my client would owe defendant any money

19 in light of that settlement. Even if he did, it is our

20 position that they are two separate agreements. The terms and

21 obligations that defendant was required to adhere to under the

22 settlement agreement with plaintif~ were ~rery clear, and they

23 very well clearly breached. them.

24 In addition, your Honor, we're claiming that the

25 withholding cif the $125,0 ~ 0 is, at least in part, retali~tian


(2l2) 805-0300


1 against my client for initially what brought everybody together

2 to the mediation, which was a complaint of race discrimination

at defendant's company. Again, you know, defendant has put

4 forward this defense or justification far withholding the

5 moneys under the settlement agreement based on this other claim

6 and anticipated settlement, which we still have not seen any

7 proof of. And as far as I'm aware, no settlement in any

8 complaint has been officially reported to FINRA or other

9 agencies as required,

10 So we claim that their justification is not legitimate

11 and that retaliation against my client for raising this

12 complaint of race discrimination, which led to the m~d.iation

13 and their obligation to pay $650,000, played a role in their

14 decision to withhold the $125, 00 from the overall payment.

15 THE COURT: Good. Thank you very much.

16 And I take it that your position is that the

17 retaliation claim is not barred by the release because the

18 claim arose after the date of execution of the agreement.

19 Is that right?

20 MS. VINCI: Yes, your Honor.

21 THE COURT: Good. Thank you.

22 Lit me hear from counsel for defendant. Counsel,

23 would. you like to tell m~ about the case as a whole?

24 MR. MILAZZO: Thank you, your Honor.

25 So this was a -- it's a settlement There was a


(212) 805-0300

l settlement agreement. There were mutual releases. And carved

2 out of the release that runs to the plaintiff here was claims

3 for indemnification for customer claims. And we learned of a

4 customer claim during nec~otiatic~ns for the settlement of

5 plaintiff's claims. Sa there is a c~rv~-out there that allows

6 us to seek indemnification. My client is presently negotiating

7 that customer claim. And as they were and continue to

8 negotiate, they did withhold $125,000 from the settlement

9 payment.

10 So we do believe we have a valid offset. ~'he

ll plaintiff is free in discovery, and we will provide proof of

12 the claim or ---- nothing's been filed with FINRA, but there has

13 been a claim lodged to my client. They are negotiating that

14 nova. And them will almost certainly be some payment ma~~ to

15 the claimant with respect to that complaint.

16 With respect to the retaliation claim, you know, we

17 don't believe --

18 THE COURT: I'm sorry, counsel.

19 F~etaliation claim. What's the contractual basis far

20 y~aur belief that your client need not comply with the

21 obligation to pay $650,000? Is there a provision here that

22 provides for an offset?

23 MR. MILAZZO: Well, there's not a provision --- an

24 express provision that provides for it, however, it clearly

25't the contemplation of the parties, and it is carved out


(21~ ) 805-0300

1 of the release. So we do believe that there would be a right

2 to at least offset for whatever the -- by withholding part o~

3 the settlement payment for claims that are going to have to be

4 paid by Laidlaw right now.

5 THE CURT: Thank you. What's the legal basis for

6 that position, counsel, either in the contract or at law?

7 Understanding that there's a carve-out that would prevent

litigation against plaintiff for indemnification and that the

9 ability of defendant to pursue an indemnification claim is

10 carved out from the release.

11 But what's the legal basis for defendant's position

12 that they can unilaterally withhold money from their payment

13 obligations under the contract?

14 MR. MILAZZO: Well, I believe that arises under the

15 common law in indemnification, that you can use indemnification

16 to offset payments that are owed another party. So we do

17 believe under common law there would be at least the implied

18 right to offset in this instance.

19 THE CQURT: Thank you. What case do you point me to,

20 to support that position?

21 MR. MILAZZO: I don't have a citation on hand.

22 THE COURT: Thank you. Presumably you had a citation

23 on hand at the time you advised your client that this was a

24 reasonable course of conduct under that contract.

2~ Counsel, what's tie legal doctrine that you point ~o


(212) 805-0300

1 here with respect to the contractual compliance issue raised by

2 plaintiff? And I just want to be clear that there's no

3 language in the contract that you point me to that supports the

4 contention that an offset is permitted here.

5 Is that right?

6 MR. M~LAZZ~: Welly there's no express language in the

7 c~n~ract that points you to that, but we do believe under the

.8 common law that there is a right to offset amounts that we

9 would be entitled to from amounts that we would have to pay --

10 or that my client would need to pay.

11 THE COURT: Thank you. Counsel, can you just explain

12 ~- again, underst~~ding that you are a lawyer making

13 representations to the Court. But what's your understanding of

14 the relevant legal doctrine? I understand that your client is

15 currently in the process of negotiating the resolution of the

16 other issue, that no payment has yet beep made. So ~a~ you

17 explain to me the scope of the doctrine that you believe

18 applies here under con7mon law?

19 Is it your view that the law permits to you withhold

20 any amount that might possibly be paid in the future regardless

~1 of whether or nat it's now due? Could you phase explain the

22 contours of the common law doctrine upon which are you relying

23 here?

24 MR. MILAZZO: No. And we would need to explore this a

25 little bit more. But certainly we do believe that there would.


1 have to be a reasonable basis for the amount of the claim

2 that's asserted, that you would be holding bask. And from my

3 understanding from my client, what they're negotiating is there

4 has been in the neighborhood of a 200,000-dollar claim lodged

5 by the customer against my client.

6 THE COURT: Thank you. So it's helpful to get a good

7 sense of the legal basis far this decision before we turn to

8 your arguments regarding why it is that -- the argument that

9 this is retaliation is not viably.

10 Counsel for defendant, what would you like to sad with

11 respect to that aspect of the claim?

l2 MR. MILAZZ~: Well, this may have arisen after the

l3 settlement agreement, but the plaintiff's employment had ceased

14 months prior to even entering into the settlement agreement.

15 At that point the plaintiff is no longer an independent

16 contractor or employee, which is really the basis of their

17 claim, which is it's discrimination and employment. It's New

18 York state human rights law and city human rights law.

~9 S~ phis isn't an employment-related discrimination

2Q anymare f it can't be because there's no employment.

21 THE COURT: Thank you. Understood. Good.

22 So let's turn to the process that we'll be using to

23 litigate the ease going forward. I have reviewed the parties'

24 proposed case management plan and scheduling order. Id's

25 helpful for me to hear from each of you regarding what you


(212) 805-0300

1 anticipate discovery will look like here. That will help me to

2 understand the proposals by the parties regarding discovery

3 going fonward. So let me begin, if I can, with counsel far

4 plaintiff.

5 What clo you anticipate discovery will look like in

6 this case, counsel?

7 MS. VINC~: Thank you, your Honor. This is Gabrielle

8 Vinci.

9 I do anticipate that discovery will be fairly -- kind

10 of run the same course or general course of interrogatories and

~1 production of document. First, leading up to depositions, I

l~ was able to speak with defense counsel, Michael Knack, and we

13 did discuss potential for resolution during disco~rery. I think

14 both parties would prefer to have same written discovery

l5 exchanged before we can kind of evaluate each side's position,

l6 particularly with. respect to the retaliation claim. But we

17 would anticipate from plaintiff's view needing to exchange --

18 to serve an exchange, interrogatories and some paper discovery

19 r~g~rding negot~.ations and this customer complaint and, you

20 know, the basis for defenclant chaosing to withhold t~.e $125,000

~~ from the settlement payment, as well as some depositions

22 regarding, you know, sort of the intent behind withholding it,

23 whoever was involved with the customer complaints and the

24 settlement negotiations in our case.

25 THE ~OU~T: Thank you. And let me just inquire about


212) 805-0300

1 the scope for the anticipated discovery here. Here, as I

2 understand it, the allegation is that this course of conduct is

3 retaliation against ^- or represents retaliation against the

4 plaintiff here. But to what extent does plaintiff anticipate

5 taking discovery regarding the underlying claims of

6 discrimination in order to present that as background evidence

7 potentially associated with the claims of retaliation?

8 Counsel for plaintiff

9 MR. LEWIS: Yes. Thank you, your Honor. This is Nick

10 Lewis.

11 We certainly believe, your Honor, that the background

12 discrimination. is relevant to the motivations behind the action

13 that defendants took, which we submit are not supported by any

14 legal doctrine or common law.

15 A key point of the initial settlement agreement was

16 that there were significant -- frankly, despicable --- text

17 messages that we know are in both the possession of FINRA. and

18 the defendants that certainly clearly establish racial animus

19 on the part of Laidlaw and executives within Laidlaw,

20 particularly about our client. For example, there were racial

21 slurs uttered in these text messages as well as a picture of an

22 African American gentleman hanging on a noose that was sent

23 amongst Laidlaw executives and supervisors of our client. And

24 we believe that this is probative of the mindset of the

25 defendants -- the executives who chose to withhold this money


(212) 805-03Q0

1 against plaintiff, as well as retaliation for bringing this

2 claim when there are potential other employees or forme

3 employees who might be motivated to bring such a claim.

4 So we do believe that that point of limited discovery,

5 which would not be ov~~ly burdensome, would be som~thin~ we

6 would request in written discovery, as my colleague had

7 mentioned.

8 THE CURT: Good. Thank you very much.

9 Counsel for defendant, what would you like to tell me

10 about your expectations for discovery here?

1l MR. MILAZZO: My expectations would be documents -~

12 documentary requests_, interrogatories, ~~d probably some

13 depositions which I think would be limited.

l4 I differ in opinion as to the plaintiff's counsel as

15 to r~a~1y the relevance of the past alleged discriminatory

l6 conduct. And, you know, we're likely moving for to dismiss the

17 retaliation claim, because, from what I believe, I think

18 they're trying to basically insert these kind of salacious

19 details to inflame a jury, which Z think would be the only

20 purpose of it, because we're dealing with an agreement and ~n

21 alleged retaliation after the agreement, if that claim can

22 survive. So I don't believe that any of the alleged

23 discrimination prior to the settlement agreement mould be

24 relevant at all to the plaintiff's claims.

25 THE COURT: Thank you. I'm not going to take a firm


212) 805-0300

1 position on that, but it may very well be ghat the Caurt will

2 conclude that that background set of facts is relevant to an

3 assessment of the discrimination claims that are brought here.

4 In any event, I won't comment further about the reasonableness

5 of any expectation that that course of conduct should stay out

6 of the public eye, given the defendant's choices hers,

7 Let me just ask briefly about one issue, which relates

8 tQ the issue that I questioned counsel about earlier. I asked

9 earlier of counsel for defendant about the nature of the legal

10 advice that was given. Of course, I said that in the context

11 of saying that I expected that you must have had that

12 information at the time that you were advising your client on

13 this set of issues. I don't know whether and to what extent

14 there was legal advice regarding this decision, that is, the

15 decision to withhold a portion of the contract payment. I will

16 just observe that there is this retaliation claim which I

17 understand will be asserting that the decision to withhold

18 these funds was discriminatory conduct.

19 The thing that I want to make sure that counsel far

20 defendant you think about -- and again, I don't take any

21 position on this -- is that you think about whether and to what

22 extent pert of the evidence that might be presented here in

23 defense of the claimsy might involve an examination of the legal

24 advice by and to the defendant in connection with this

25 decision. I don't know to what extent an advice of counsel


(212 7 805-0300

l defense or argument or fact might be presented in connection

2 With their defense of this set of claims, but if ~t may -- I

3 just want to highlight that possibility for you for

4 consideration in the event that there are ethical issues that

5 may in any way constrain current counsel's or other counsel's

6 ability to function as their counsel in this matter in the

7 event that the legal advice becomes ~.n issue in the caste, and

8 in particular, if it may be that they would invoke advice of

9 counsel as part of a defense, thereby waiving attorney/client

10 privilege and putting counsel in the position of needing to

11 pot~nti~.11y be a witness in the case. I don't know whether and

12 to what extent the legal advice will be put at issue here. I

13 simply raise it because if the legal justification or the

14 decision to withhold funds is a so-called offset does not have

15 a substantial basis, that may be an argument raised by

16 plaintiff's counsel to support their contention that this

17 illegitimate, unsupported decision to withhold the funds must

l~ have been rnativated by discrimination because it was legally

19 unjustified.

20 Again, I don't know whether and to what extent this

21. will b~ an issue in the case, I just raise it because there are

2~ potentially ethical obligations that would b~ implicated and I

23 just want to make sure that nobody is surprised by them.

24 MR. MILAZZO: Your Honor, this is Chris Milazzo. If I

25 could just acid a little something?


(212) 805-0300



1 THE CURT: Yes. Please go ahead.

2 MR. MILAZZ~: We were nat the firm that actually

3 represented Laidlaw in connection with the negotiation,

4 drafting and execution of the settlement agreement. We came on

5 a little later. So I don't believe that will present an issue,

6 but we will -- I will, of course, heed your Honor's cautions

7 with respect to that and make sure that if that does arise, we

8 will let the Court know immediately,

9 THE COURT: Gaod. Thank you very mush. I mostly ask

10 dust to flag it for you and any other lawyers who may be

11 in~rolved so that you can take appropriate action. I take no

12 position on the issue. I just wanted to flag it as a potential

13 issue for down the road. . So thank you very much you, counsel.

14 What I'd like to do is to talk about the proposed case

15 management plan and scheduling order. I've heard your

16 descriptions of the anticipated discovery in the case. I

17 believe that the deadlines that the parties have proposed in

18 the case management plan and scheduling order are reasonable.

19 I expect to endorse the parties' proposals in the case

20 management plan and scheduling order. What I'd li~.e to do is

21 to just say a few brief words about it with one brief caveat.

22 First, in the discovery section of the case management

23 plan and scheduling order you have proposed that there may be

24 some expert discovery regarding the claim for emotional

25 .distress. I just want to ask about the omission of any


X 212) 805-0300

1 deadline for HIPAA releases. I understand that plaintiff has

2 an emotional distress-related claim, and I want to made sure

3 that it's correct that I should mot be setting a deadline for

4 HIPAA. releases, given that there is such a claim.

5 Coun se1 for defendant, what's dour view?

6 MR. MILAZZO: Well, actually, the plaintiff's

7 emotional distress claim is coming under the ret~.liation claim.

8 And we do -- to the extent that the plaintiff is seeking

9 damages with respect to emotional distress, we would be

lU requesting documents from any providers of psychological

11 services or -- we would be seeking those documents, obviously,

12 number one, to see if those claims are valid; and number two,

l3 with respect to damages.

14 THE COURT: Good. Thank you very much.

15 So I'll insert a deadline in paragraph six of the

16 parties' proposed case management plan, which is currently left

17 blank. 'ghat date will be a date that is ~~n days after tod.a~.

18 Please confer regarding the scope o~ those. I think it's

19 important for you to exchange those promptly.

~0 Let me now just say a few other brief words about the

2l nature of the case management plan and scheduling order, which

~2 I will enter subject to the one modification that I just

23 described. First, I just want to remind you all that these are

24 real deadlines. These are not guideposts goals or something

25 similar for completion of discovery. These are deadlines for


212) 805-0300

1 completion of discovery. You should note that certain of the

2 paragraphs are written using the word "completed." ~o, for

3 example, paragraph 7(a) reads "all fact discovery should be

4 completed no later than February 18, 2021." Paragraph 8

5 contains a similar language. That language is intentional. It

6 reflects my expectation th~.t discovery will be completed by the

7 relevant date. That means that my expectation is that there

8 will be no more of it after that date. So please keep that in

9 mind. These are real deadlines and they're deadlines for

10 completion of discovery. There are several corollaries to that

11 basic rule. You can extrapolate them yourselves, but I'm going

12 to highlight two of them.

13 First, to the extent that there's any concern about

14 the adequacy of your adversary or any third party's response to

15 a discovery request, you should bring it to my attention

16 promptly if you're not able to resolve it. That's because my

17 expectation is that you will work to get and use responsive

l8 discovery material during the discovery period.. If you sit on

19 discovery disputes, that is if you hoard them until late in the

20 discovery period, you may find that I will simply taJ~e the

21 position that you've given up your opportunity to seek Court.

22 in-~ervention in resolving t~.ose disputes, and discovery will

23 end and you will not have the relevant information. And that's

24 because this is a deadline for completion of discovery, it is

25 not the date on which we will begin litigation about discovery.


(212) 805-0300

1 The next thing that I want to say is that because

2 these are real deadlines for completion of discovery, you

3 should take that fact into account as you're scheduling your

4 request for information and your depositions. If you wait to

5 take a deposition or to request information until later in the

6 discovery period, you will be leaving yourself leis time to

7 conduct followup discovery. In other words, you should not

8 expect that I'll be adding time to discovery to permit you to

9 do followup discovery with respect to in~orm~tion that you

10 'learn, particularly inf~rma~ion tha-~ you learn late in the

ll discovery period. So if you c~.00se to wait to pursue

12 discovery] you should understand that you are making a decision

13 to curtail your opportunities to conduct followup disco~rer~.

14 Again, this is a simple corollary of the fact that these are

15 real deadlines and that they are deadlines for completion of

16 discover.

17 Now, while all of these are real deadlines, Z

18 highlight in particular the deadlines in paragraph 8(c). That

19 paragraph requires that the parties disclose expert disclosures

20 under Rule 26(a } (2) by the date specifi~d therein. The

~l requirement is that you provide 100 percent of the requisite

22 disclosures by the date specified. It is not enough to merely

23 provide s for example, the name of your expert by that date.

24 Instead, you must provide her name, her report, her list of

~5 prior testimony, and all of the other information required


(2l~) 8~5-~~30~

1 under the rule by the relevant date. If you fail to do that,

2 you should not expect that your expert will be permitted to

3 prov.~de testimony or other evidence in the case.

4 Please be mindful too that there is a distinction

5 between report-giving and non-report-giving experts. Sometimes

6 people thin] of that distinction in this context as the

7 non-tre~.ting physicians, versus treating physicians, although

8 the distinction can b~ broader than that. But keep in mind if

9 for any reason you have an expert that you believe need not

10 provide a report, such. an expert too must still provide other

11 disclosures under the rules, and those disclosures must be made

12 by the date specified in paragraph 8(c). So please keep that

13 in mind. Similarly, keep in mind that if you believe that your

l4 expert need not provide a report, that her testimony will be

15 limited to that, which pan be provided in the absence of a

16 report.

17 Now, I will grant extensions of these deadlines, but

18 only for good cause shown. You should know that I scrutinize

19 requests to ensure that there is good cause for any extension

20 of time. That means, among other things, that you shouldn't

21 expect that I will extend discovery deadlines because the

22 parties agree that it would be nice. My expectation is that

23 you must shave a goad reason why discovery should be extended.

24 And we're all aware of the nature of discovery, the impediments

25 on taking discovery as relative to COVID-19 and the nature of


(212) 8Q5-030

1 this case so I would expect that any req~es~ to extend the

2 deadlines would be driven by something unforeseen.

3 My expectation is that the parties will use

4 professional judgment about the amount of resources that you

5 want to invest in this case. To put it simply, if you decide

6 not to focus on this case and to do work on other cases, or

7 just not to do work on cases, that may very well not be viewed

8 as a ~ustif~catio~ for an extension of these deadlines. You

9 should not expect that it will be. Instead, you should expect

10 that I'll simply hold you to the consequences of your decisions

11 about - what you wanted to spend dour time on. On allocating

12 reso~~ces to the parties, if you choose to use that time badly,

13 you should nit expect that I'11 find that to be good case for

14 an extension of the deadlines. Instead` again, you may find

15 that I will simply tell you that you now have to live with the

16 consequences of your failure to focus on this case.

17 The other thing that I wanted to say is that although

18 ~ hope that the parties will work to resolve this case

19 amicably, my expectation is that your work to settle the case

20 will happen in parallel with your efforts to litigate it. To

21 put that in more complete terms: If you choose not to do the

22 work necessary to litigate this case because you were hoping or

23 expecting that the case would settle, you should not expect

24 that I will find that to be good cause for an e~tensi~n of the

25 deadlines, again, for much the same reasons. If it turns out


~ 21~~ 805-0 00

1 that your guess was bad, you should expect that I will -- and

2 the case doesn't settle and you thought ~t would, you shouldn't

3 expect that I will extend the deadlines because you made that

4 errant judgment. My expectation, again, is that you will work

5 to litigate the case and meet these deadlines in parallel with

6 your efforts to resolve it. And if you fail to do the work

because you were hoping the case would settle, but you did not

8 get a prior extension from me, you should not expert that the

9 deadlines will be extended.

10 So I think that's all that you need to know, other

11 than that the case management plan itself as well as my -- not

12 Judge Nathan's -- individual rules require that any request for

13 an extension of time be made no later than two business dais

14 prior to the date sought to be extended. If you make a request

15 to extend these deadlines closer in time to the deadline, much

16 less after the deadline, you should not expect that I'll grant

17 the request. So I'll enter the case management plan and

18 scheduling order hgpefully later today or tomorrow. It will

19 govern your conduct going forward. Good.

20 So, counsel, the last part of my agenda for today's

21 conference was to talk about whether there's a resolution that

22 I could help the parties achieve. I would hope in a case like

23 this that there would be fertile grounds for a resolution. The

24 amount in dispute ~s concrete, arguably expected, and the risks

25 to either side are known at this point. I'm happy to provide


212) 805-0300

1 any guidance that I can regarding how best the parties might

2 settle this. I'd be happy in particular to refer you to a

magistrate judge or to another resource.

4 Counsel, is there anything that I can do at this paint

5 to help the parties resolve this case amicably?

6 First, cour~sel for defendant.

7 MR. MILAZZO: Thank you, your Honor.

8 At this point, your Honor, I don't believe so. I

9 think it's -- it might be a little premature for mediation. We

10 open and will keep the line of cammunicatiori plaintiff

l~. directly in hopes that we pan come to some sort of mutually

l2 agreeable resolution to this.

13 THE COURT: All right. Good. Fine. Thank you very

l4 much. I hope that the parties will think seriously about this

15 case ar~d whether there's a basis to resolve it.

16 Counsel for plaintiffs, I'm not going to ash you the

l7 same question, given counsel far defendant's response.

18 Bud if the parties think that it would be helpful for

19 m~ to enter a reference to the assigned magistrate judge or the

20 mediation program, pease don't hesitate to let me know. I'm

2l happy to refer you to it. I'm actually strongly inclined to

22 refer you to the magistrate judge here, given the nature of the

23 allegations here and what I understand to be the nature of

24 d~fen.dant's defense. But if the parties want to ffight rather

25 than talk, I'm happy to let you spend your time on that.


(212) 805-0300

1 Good. So --

2 MR. MILAZZQ: Your Honor?

3 THE COURT: Yes. Counsel for defendant?

4 MR. LEWIS: I'm sorry. It's nick Lewis, actually,

5 counsel for plaintiff. Apologies for interrupting.

6 THE COURT: Please go ahead.

7 MR. LEWIS: We are certainly open to settlement and

8 any assistance the Court may give the honor. While we'll, of

9 course, happily speak to defense counsel, we would probably

10 hope to involve the Court or its magistrate or the mediation

11 program to finalize any terms, given the circumstances of the

12 previous agreement.

13 THE CURT: Thank you.

14 Counsel for defendant, can I just explore this with

15 you a little bit. Judge Moses is assigned to this case as the

16 magistrate judge. This seems to me to be the kind of case

17 where the parties might benefit from hearing the unvarnished

18 view from a neutral judge not involved in the oversight of the

19 case regarding their relative positions on the case.

20 What's your view regarding whether it may be helpful

21 to see whether Judge Moses would have time to talk with the

22 parties about this dispute?

23 Cozen se1 for defendant?

24 MR. MILAZZO: Sure, your Honor.

25 We do believe ~-- I think the impediment here is going


212) 805-Q300

1 to be, you know, the retaliation claim. So that's why I

2 thought some limited discovery and maybe filing our motion to

3 dismiss that claim may be -- it may be worth the plaintiff to

4 see prior to going to mediation. But, of course, I've been

5 before Judge Moses, who's successfully, if I'm not mistaken,

6 settled a case for me not too long ago. So I would be, of

7 course, not -- I would always say that that could be helpful.

8 That could be always helpful I think for each party --

9 THE COURT: Good.

10 MR. MILAZZO: -- to hear Judge Moses.

11 THE COURT: food. I think that would be helpful for

12 each party. And let me not suggest -- actually let me not

13 suggest. I am going to refer you to Judge Moses for mediation.

l4 I'll reach out to her end see if we can do a schedule some time

15 for you all. I think that this case would really benefit from

l~ it~ And I'll ask to see if- she has time to meet with you

17 promptly. If you want to focus on working toward a mediated

18 resolution of the case after you hear from Judge Moses's

19 chambers regarding the time by which she can meet with you,

~o please feel free to write me if you think that you need

2l additional time to complete discovery here in order to permit

22 you to focus an a mediated resolution of the case. As I said

~3 earlier, my expectation of the general matter is that your work

24 to settle the case will happen in parallel with these

25 deadlines. But if you hear that J~udc~e Moses isr~'t available


212) 805-0300


1 for some period of time and you believe that you would like to

2 focus on such a resolution of the case, I'm certainly open to

3 seeing a request to extend these deadlines to give you extra

4 time to focus on them.

5 Good. Anything else for us to talk about before we

6 adjourn?

7 First counsel for plaintiff?

8 MS. VINCI: This is Gabrielle Vinci, your Honor. No,

9 we have nothing further.

1Q MR. LEWIS; Thank you, your Honor.

11 THE COURT: Thank you.

12 Counsel far defendant?

13 MR. MILAZ ZO: Nothing further from defendant. Thank.

14 you, your Honor .

15 THE COURT: Good. Thank you all very much.

16 This prac~eding is adjourned.

17 MR. MILAZZCJ: Thank you, Judge.

18 ~ ~~~~~









(212) 805-0300