Robinhood's Response to Plaintiffs' Discovery Memorandum Regarding Plaintiffs' Requests for Production — In re January 2021 Short Squeeze Trading Litigation (Dkt. 593, S.D. Fla.)

Summary

Defendants Robinhood Markets, Inc., Robinhood Financial LLC and Robinhood Securities, LLC's Response to Plaintiffs' Discovery Memorandum Regarding Plaintiffs' Requests for Production in In re: January 2021 Short Squeeze Trading Litigation, Case 1:21-md-02989-CMA (Case No. 21-MD-2989-ALTONAGA/DAMIAN, Document 593, 8 pages), in the Southern District of Florida, entered August 10, 2023. Robinhood argues that Plaintiffs jumped the gun, filing two business days after Robinhood said its position on the regulatory correspondence was not final, and that the parties are not at impasse on that correspondence or the trading data. Robinhood says it has produced the underlying documents given to regulators, answered the trading-data questions and proposed new compromises, and asks that the unripe motion be denied, over the /s/ signature of Tom K. Schulte.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 21-MD-2989-ALTONAGA/DAMIAN
In re:
JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION
_____________________________________/
This Document Relates to the Federal Securities Tranche

DEFENDANTS ROBINHOOD MARKETS, INC., ROBINHOOD FINANCIAL LLC AND
ROBINHOOD SECURITIES, LLC’S (“ROBINHOOD’S) RESPONSE TO PLAINTIFFS’
DISCOVERY MEMORANDUM REGARDING PLAINTIFFS’ REQUESTS FOR
PRODUCTION
Case 1:21-md-02989-CMA   Document 593   Entered on FLSD Docket 08/10/2023   Page 1 of 8

Plaintiffs have jumped the gun.  They seek to compel the production of certain regulatory
correspondence and trading data.  The parties are not at impasse on either issue.  Plaintiffs filed
their motion two business days after Robinhood stated that its position on the regulatory
correspondence was not final and it was reconsidering in light of Plaintiffs’ new explanation of
relevance.  Just one day before that, Robinhood told Plaintiffs that it would look into their
questions as to the trading data.  Earlier today, Robinhood answered those questions and
proposed new compromises on both issues.  Plaintiffs’ motion is unripe and should be denied.
I.
The Court Should Deny Plaintiffs’ Motion as to the Regulatory Correspondence.
Robinhood has produced the underlying documents relevant to this case that it previously
produced to regulators.  Plaintiffs then demanded, in addition, regulators’ information requests
and Robinhood’s correspondence with regulators.  On August 3, Robinhood’s counsel told
Plaintiffs “we are discussing that issue with our client and will provide you with a final position
on whether we will produce those materials no later than the end of next week” (i.e., August 11).
Without waiting to hear back, Plaintiffs filed this Motion on August 7.  On August 10, as
promised, Robinhood provided Plaintiffs a revised position.  Because the parties have not
reached impasse, Plaintiffs’ motion should be denied.  Waste Pro USA, Inc. v. Adams Sanitation
Holding Co., No. 6:21-CV-1521, 2022 WL 19842682, at *2 (M.D. Fla. June 13, 2022).
Plaintiffs’ original Request was, by their own admission, an impermissible fishing
expedition.  Plaintiffs admitted at a meet-and-confer that their reason for seeking the regulators’
requests and accompanying correspondence was that regulators may have known better than
Plaintiffs what avenues to explore.  This is plainly improper.  See, e.g., Stellato v. Medtronic
Minimed, Inc., No. 6:19-CV-2180, 2021 WL 3134685, at *3 (M.D. Fla. Feb. 2, 2021); Pictsweet
Co. v. R.D. Offutt Co., No. 3:19-CV-722, 2020 WL 12968432, at *5 (M.D. Tenn. Apr. 23, 2020)
(barring “an impermissible fishing expedition” that involved seeking a “broad universe of
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information” produced in another litigation without demonstrating relevance); In re Zantac
(Ranitidine) Prod. Liab. Litig., No. 20-MD-2924, 2020 WL 5585137, at *5 (S.D. Fla. Sept. 16,
2020), aff’d, No. 20-MD-2924, 2020 WL 6440461 (S.D. Fla. Nov. 3, 2020) (“[A]dopting or
cross-checking someone else’s investigative strategy[ ]is not the purpose of civil discovery.”).
Robinhood therefore refused to produce the regulators’ requests and correspondence.
Since then, Plaintiffs have advanced a new and narrower justification for the supposed
relevance of these Requests.  They now state that they seek regulatory correspondence (a)
because it might include information relevant to this case, and (b) in order better to understand
certain spreadsheets Robinhood produced to regulators (and re-produced to Plaintiffs).
In view of this narrowing, Robinhood has agreed to produce responsive documents.
Robinhood agreed to produce portions of its correspondence with regulators that contain
information relevant to this case (i.e., responsive to any other Request to which Robinhood has
agreed).  Robinhood is also working on descriptions of 421 spreadsheets Plaintiffs identified and
will provide those descriptions shortly.  Finally, Robinhood will provide a metadata overlay
identifying the Bates numbers for documents produced both to regulators and in this case.
Plaintiffs filed this motion without waiting for this offer of compromise, which
Robinhood told Plaintiffs was coming this week.  Plaintiffs have not yet responded to
Robinhood’s offer, which fulfills Robinhood’s discovery obligations.  Because the parties are not
at impasse, Plaintiffs’ motion should be denied.  Waste Pro, 2022 WL 19842682, at *2.
II.
The Court Should Deny Plaintiffs’ Motion as to the Trading Data.
Plaintiffs’ motion should also be denied as to Request Nos. 19, 20 and 22.  Those
Requests seek data about certain transactions—order cancellations, equity close-outs and option
close-outs—in 50 securities.  Plaintiffs contend that “Robinhood refuses to produce” this data.
(Mot. at 3.)  That is false.  The parties agreed months ago that Robinhood would produce only
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aggregate data, which it did on June 30.1  Plaintiffs then reneged on this agreement, asked for
trade-by-trade data and have now moved to compel that data with respect to Request Nos. 19, 20
and 22, the transactions underlying Plaintiffs’ 9(a)(2) claim.  But there is no live dispute.
First, when Plaintiffs raised the fact that they were unwilling to accept the aggregate
trading data for these Requests and instead wanted trade-by-trade data, Robinhood began
working with them to understand what exactly they wanted and why.  That culminated in a meet-
and-confer with Plaintiffs on August 2, during which Plaintiffs asked Robinhood a series of
questions about limiting the scope of the data that would be produced and whether Robinhood
could provide additional fields.  Robinhood told Plaintiffs it would look into these requests, and
confirmed that it was continuing to investigate purported discrepancies Plaintiffs believed they
had identified in the data produced, as well as the burden of providing trade-by trade data.
Rather than wait for that response, Plaintiffs filed this Motion.   If they had waited and
allowed the meet-and-confer process to play out, they would have known—as Robinhood has
now told them—that Robinhood will produce:  (a) transaction-level data for Request Nos. 19, 20
and 22 for the Class Period (which are the transactions that form the basis for Plaintiffs’ Section
9(a)(2) claim, see MTD Order (ECF 503) at 19-23), including all the fields Plaintiffs requested;
and (b) for Request No. 19 (order cancellations), data for the full three-month period further
disaggregated by side and order_type fields and indicating total dollar value cancelled, excluding
involuntary and certain normal-course-of-business cancellations.  This should moot the Motion.
Second, to the extent Plaintiffs believe they need data for a longer time period, that
dispute is not ripe because the meet-and-confer on that issue has not happened because they ran

1 That agreement was reached in November 2022, and applies to Request Nos. 1 and 2 (the
general stock and options trading requests, not at issue on this Motion) as well as Request Nos.
19, 20 and 22 (the specific transaction types underlying the Section 9(a)(2) claim).
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to court too quickly.   Thus, any argument that what Robinhood has now agreed to produce is
insufficient is not ripe and the motion should be denied.  Waste Pro, 2022 WL 19842682, at *2.
In any event, Plaintiffs would have no basis to argue for a broader time period given the
limited—at best—relevance of that data weighed against the enormous burden it would impose
on Robinhood.  Producing transaction-level data is highly burdensome.  Robinhood must break
out each Request into individual data queries.  A query can time out if it takes too long to
process.  Execution time depends on the size of the database searched, number of results, and
server capacity then available.  Robinhood cannot anticipate those variables, so must craft small,
manageable queries.  Pulling data for 50 stocks over three months would require substantial
manpower and computing costs.  Further, to maintain customers’ privacy, Robinhood must take
the time-intensive steps of creating dummy identifiers for each customer, to anonymize the data,
and implementing those identifiers consistently across datasets.  Obviously, the larger the
dataset, the higher the burden.
That burden would be disproportionate to the needs of the case.  Colucci v. Health First,
Inc., No. 6:21-CV-681, 2022 WL 17370335, at *1 (M.D. Fla. Sept. 19, 2022) (cost of pulling
data was too high), objections overruled, 2022 WL 18926772 (M.D. Fla. Dec. 22, 2022).  This is
precisely why the parties previously agreed Robinhood could produce aggregated data, and
Plaintiffs may not now “renege on [t]his agreement to limit discovery.”  Mawulawde v. Bd. of
Regents of Univ. Sys. of Ga., 1:05-cv-99, 2007 WL 2460774, at *12 (S.D. Ga. Aug. 24, 2007).
Plaintiffs argue that production is not burdensome because Robinhood produced trade-by-trade
data to FINRA for 13 stocks for 8 days in RHMDL00047925-26.  (Mot. at 4.)  But Plaintiffs
seek trade-by-trade data for four times more stocks over a period almost twelve times longer.
The burden on Robinhood is correspondingly higher.  Colucci, 2022 WL 17370335, at *1.
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Third, Plaintiffs’ complaints about the data fields that were not produced in connection
with the aggregate data are misplaced.  On July 20, Robinhood offered to further disaggregate
the cancellation data by the two fields Plaintiffs specifically requested (side and order_type) and
to limit equity close-outs to those caused by margin calls.  Plaintiffs did not respond to this offer.
On August 2, Robinhood told Plaintiffs that it would look into their request for a field indicating
total dollar value.  Without waiting to hear back, Plaintiffs filed this Motion.  Robinhood has
now answered Plaintiffs’ questions.  Many of the supposedly “missing” data fields were not
included in the aggregate data because they only reflect data that is meaningful at the trade-by-
trade level or, at least, at a level well below the aggregated data level the parties agreed to back
in November.2  Other fields are entirely irrelevant.  For example, Plaintiffs fail to explain why
times of day (and not just dates) are necessary to prove “loss causation and damages” (Mot. at 4-
5), or why the time an order was placed (not just when it was cancelled) is relevant.  Mylan
Pharms. Inc. v. Celgene Corp., No. 14-cv-2094, 2016 WL 2943813, at *8 (D.N.J. May 20, 2016)
(denying motion to compel transaction-level data where less granular data was sufficient).

To the extent Plaintiffs believe additional fields remain necessary for the aggregate data
given Robinhood’s agreement on the trade-level data, Robinhood remains willing to continue the
meet-and-confer process and answer further questions.  Plaintiffs’ motion on this issue is thus
premature, and should be denied for that reason alone.  Waste Pro, 2022 WL 19842682, at *2.

2 To illustrate, Plaintiffs now contend they need to see both the date an order was placed and
the date it was cancelled.  But this is impossible if the data is produced on an aggregated basis by
cancellation date.  Robinhood would have to further disaggregate the data by the dates orders
were placed.  In other words, rather than producing one row per day, it would need to provide
one row for every possible combination of dates placed and cancelled.
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Dated:  August 10, 2023
/s/ Tom K. Schulte
HUNTON ANDREWS KURTH LLP
Samuel A. Danon (FBN 892671)
Tom K. Schulte (FBN 1025692)
María Castellanos Alvarado (FBN 116545)
333 S.E. 2 Avenue, Suite 2400
Miami, FL 33131
Telephone: (305) 810-2500
Facsimile: (305) 810-2460
sdanon@huntonak.com
tschulte@huntonak.com
mcastellanos@hunton.com
CRAVATH, SWAINE & MOORE LLP
Antony L. Ryan
Kevin J. Orsini
Brittany L. Sukiennik
825 Eighth Avenue
New York, NY 10019
Telephone: (212) 474-1000
Facsimile: (212) 474-3700
aryan@cravath.com
korsini@cravath.com
bsukiennik@cravath.com
Counsel for Defendants Robinhood Markets,
Inc., Robinhood Financial LLC and
Robinhood Securities, LLC
Case 1:21-md-02989-CMA   Document 593   Entered on FLSD Docket 08/10/2023   Page 7 of 8

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on August 10, 2023, I electronically filed the
foregoing document with the Clerk of the Court using CM/ECF.  I further certify that the
foregoing document is being served this day on all counsel of record via transmission of Notices
of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel
or parties who are not authorized to receive Notices of Electronic Filing.
Dated:  August 10, 2023
/s/ Tom K. Schulte
Case 1:21-md-02989-CMA   Document 593   Entered on FLSD Docket 08/10/2023   Page 8 of 8

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