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UNITEDSTATESDISTRICTCOURT
SOUTHERNDISTRICTOFFLORIDA
MIAMIDIVISION
CASENO.1222539CIV GOODMAN
[ConsentCase]
LATELETELEVISION,C.A.,
Plaintiff,
v.
TELEMUNDOCOMMUNICATIONS
GROUP,LLC,etal.,
Defendants.
_____________________________________/
ORDERONDEFENDANTSMOTIONTODISMISS
FORLACKOFSUBJECTMATTERJURISDICTION
ORFORFAILURETOCOMPLYWITHCOURTORDERS
Duringmany
years
between
1950
and
1988,
CBS,
NBC
and
others
involved
in
the
syndicationindustrybroadcastthetelevisiongameshowTruthorConsequences.The
longrunningshow involvedcontestantsselectedfrom thestudioaudiencewhocould
either tell the truth (i.e., correctly answer a question) or be forced to pay the
consequences(i.e.,performastunt,usuallywackyorzany).Severalpersonalitieshosted
theshow
over
the
years,
but
Bob
Barker
(who
also
hosted
The
Price
is
Right
from
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19722007)hadthelongestreign,from1957to1975.Mr.Barkerssignoffendedwith
thephrase,Hopingallyourconsequencesarehappyones.1
In the instant copyright infringement case, Plaintiff, Latele Television, C.A.
(PlaintifforLatele)didnottellthetruthindiscoveryanditnowmustconfrontthe
consequences.Unlike theconsequencesenvisioned inMr.Barkers finalcomments to
thegameshowtelevisionaudience,however,theconsequencesherewillnotbehappy
for Plaintiff.On the other hand, the consequenceswill fall short of the fullfledged
happinessurgedbyDefendants.2
DefendantswantthisCourttodismissthiscopyrightinfringementactionforlack
of subjectmatterjurisdictionbecause of apurported lack of standing.Alternatively,
theyask for themostextreme sanction available dismissal for failure to comply
withCourtorders concerningdiscovery (i.e., fornotbeing truthfulaboutdocuments
andinformation
which
should
have
been
produced
in
response
to
discovery
requests
andCourtorders).
Focusingonthefirstargumentfordismissal,theCourtcannotnowdismissthe
caseforlackofstandingbecauseDefendantsargumentdependsoncontestedfacts.The
1
Archive
of
American
Television,
Truth
or
Consequences,
http://www.emmytvlegends.org/interviews/shows/truthorconsequences (last visited
November7,2014).
2 The Defendants in this action include Telemundo Television Studios, LLC,
Telemundo Studios Miami, LLC, Telemundo Network Group, LLC, Telemundo
Internacional,LLC.Together,theDefendantsareeitherreferredtoasDefendantsor
TelemundointhisOrder.
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UndersignedisnotgoingtosimplychoosesidesandpickDefendantsviewofthefacts
anddisregardPlaintiffsviewinorder toconcludethatPlaintifflacksstandingand to
thenenterarelateddismissalorder.
Defendantscontend thatPlaintiff lacksstanding topursue thisclaimbecause it
didnotownthecopyrightatissueonthedateitfiledthislawsuit.[ECFNo.166,p.1].
Specifically,theyarguethatPlaintiffassigneditsrights firsttoitsprincipal,Fernando
Fraiz,andthentoanotherentityheowns,LateleProductions,Inc.(LateleU.S.).[Id.at
pp. 35]. But there is a significant factual dispute as to the effectiveness of those
assignmentsand,assuming thatPlaintiff in factassignedaway thecopyrightat issue,
whether those assignmentswere, for allpracticalpurposes, rescinded (orundone or
reversed or corrected all terms used by the parties, witnesses and counsel in
evidentiary hearings and posthearing memoranda). The Court does not believe it
prudentto
wade
into
this
murky
factual
morass
and
unilaterally
make
credibility
assessments. Cf. DominionAssets LLC v.Masimo Corp.,No.12cv02773BLF, 2014WL
2937058 (dismissing patent infringement lawsuitwithout prejudicebecause Plaintiff
assigneditspatentrights,didnotprovemutualrescissionoftheassignmentagreement
anddidnotsufficientlyexplainwhytheassigneedemandedmaterialtermsaboveand
beyondmererescission).3
3 Incontrast toDominionAssets,all theparties involved in theassignmentshere
contendthattheassignmentsarenotvalid,werenotintendedtogiveupthecopyright
atissueandwereinanyeventlatercorrectedbyanotheragreement.
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Because the Court cannot simply dismiss the case on the subject matter
argument, the only remaining issue (and it is a significant one, tobe sure) is the
argumentfordismissal triggeredbysubstantialdiscoveryviolations.[ECFNo.166,p.
1].
Basedontherecordevidencepresented,theUndersignedisnotgoingtodismiss
thecase (orenteradefaultagainstPlaintiff) fordiscoveryviolationseither.However,
because Plaintiff failed to produce relevant documents responsive to discovery
requests, provided an incorrect or significantly misleading interrogatory answer,
submitted a false or substantially incorrect declaration, provided incorrect or
misleadingdepositiontestimonyandnever timelyadviseditsowntrialcounselabout
significanttransactionswhichmightaffectitsstandingtoprosecutethiscase,theCourt
will be generating consequences relief, albeit short of dismissal or default, to
Defendants.
Specifically,theconsequencesaredesignedtoaddresstheprejudicegeneratedby
Plaintiffs discovery shortcomings.Therefore, this case isbeing taken off of the trial
calendar in order to give Defendants the opportunity to take additional discovery
concerningcertaindocumentswhichPlaintifffailedtotimelyproduce.BecausePlaintiff
generated theneed toobtainmorediscovery, it isonly theDefendantswhoarebeing
permitted to pursue additional discovery after expiration of the discovery deadline.
Plaintiff will be required to pay the attendance fees for court reporters and
videographersusedatanynewdepositionsscheduledbyDefendantsand itwillneed
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topaythetravelcostsforonedefenseattorneyifanyofthedepositionsaretakenoutof
town.Plaintiffwillneed topay theseexpenseswithin30daysofreceivingan invoice
from Defendants. In addition, the Court is awarding Defendants attorneys fees in
connectionwiththeinstantmotiontodismiss.[ECFNo.166].
Finally, if theadditionaldiscovery (orotherevidenceobtainedbyDefendants)
establishesthatPlaintifffraudulentlymanufacturedandpostdatedacriticaldocument
(the socalledAddendum) inorder toavoid thedismissalDefendants seek in their
motionforlackofstanding,thentheCourtwillentertainanotherdismissalmotionfor
fraudon thecourt/intentionalbadfaithdiscoveryabuse.Likewise, iftheUndersigned
concludes thatPlaintiffdestroyed relevantevidenceafteraduty topreserveevidence
wascreated,thentheCourtwillalsoconsideranotherdefensefileddismissalmotion.4
I.
FactualBackgroundConcerningDiscovery
Inits
Complaint,
Latele
alleges
different
types
of
copyright
infringement
by
Defendantsof thepopularMariaMaria telenovela,aSpanishlanguagesoapopera. In
particular, theworks at issue are 198 episodes of television programming allegedly
ownedbyLatele,originallyairingin1989,and178episodesoftelevisionprogramming
4
Basedon
events
occurring
after
the
filing
of
its
dismissal
motion,
Defendants
are
alsoseeking[ECFNo.358]anordercompellingPlaintifftohireanindependentforensic
computerexperttoattempttorecovermetadataandotherdocumentsfromcomputers
andotherelectronicmediausedbyPlaintiffanditsagents,includingattorneys,inApril
2012. That request is scheduled for a discovery hearing onNovember 21, 2014. The
detailsandsignificanceoftheelectronicallystoredinformationatissueinDefendants
requestwillbeoutlinedlaterinthisOrder.
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allegedly aired by Defendants. El Rostro de Analia (El Rostro) is the allegedly
infringing work. Latele alleges that Defendants hired the author ofMariaMaria to
developElRostro,atelenovelawhichLateleallegesissosimilartoMariaMariathatthe
public and press have designated it as a remake or retelling. Lateles threecount
Complaint pursues claims for copyright infringement, contributory copyright
infringementandvicariouscopyrightinfringement.[ECFNo.1,pp.1522].
James Sammataro, of Stroock & Stroock & Lavan (SSL), Plaintiffs initial
counselofrecord,signedandfiledthelawsuit.[ECFNo.1,p.24].AtanAugust2021,
2014evidentiaryhearing (theEvidentiaryHearing)designed todeterminewhether
certainprivilegeddocumentsinRALspossessionshouldbeproducedtoDefendantsin
responsetoadiscoverysubpoena,hetestifiedthatRobertAllenLaw(RAL)wasthe
conduit fornearlyalldocumentsand informationhe received fromPlaintiff.5 [ECF
No.324,
p.
24].
This
included
documents
and
information
related
to
Plaintiffs
discovery responses. [Id.].RALwasPlaintiffs outside general counsel andprovided
significantassistancetoSSLinthislitigation.[Id.at25].Inparticular,PeggyGarcia,an
RALattorney,coordinatedtheproductionofdocumentsandinformationgiventoMr.
Sammataro.[Id.atpp.2425,116].
Neither Plaintiff, nor RAL, ever disclosed critical copyright transfers,
negotiationsleadinguptotheexecutionoftransferdocuments,orrelateddocumentsto
5 The Evidentiary Hearing was held, in part, to obtain evidence concerning
Defendants argument that the crimefraud exception generated a waiver of the
attorneyclientprivilegefortheRALdocuments.
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SSLdespiterepeated,directinquiriesduringSSLsinvestigationoftheComplaintand
preparationofresponsestodiscovery.Asdescribedbelow,Mr.Sammatarodidnotsee
several key documents until they were included as exhibits to Defendants instant
motion todismiss, filedonMarch31,2014. [ECFNo.324,pp.3942].Healsohadno
knowledgeof those transactionsbeforeDefendants filed theirdismissalmotion (long
afterhewasnolongerinvolvedinthiscase).[Id.].
Ms.GarciagraduatedfromlawschoolinDecember2008.[ECFNo.325,pp.58
59]. Shebegan working at RAL inJanuary of 2010. [Id.]. She has never done any
litigationwork.[Id.].RALhasthreefulltimelitigationattorneysandoneattorneywho
doesbothlitigationandrealestatelaw,butsheneverconsultedwithanyofthemabout
thediscoveryrelatedassistancesheprovidedtoPlaintiffLateleandtheSSLfirminthis
case.[Id.atpp.5861].Beforethislawsuit,Ms.Garcianeverhelpedclientsinreviewing
proposedinterrogatory
answers,
reviewing
proposed
responses
to
document
requests
orreviewingotherresponsestodiscovery.[Id.].
Notwithstanding this lack of litigation experience,Ms.Garcia testified at the
Evidentiary Hearing that she reviewed discovery responses with Fernando Fraiz,
Plaintiffsprincipal,andwasawareofdocumentsexecuted inApril2012 transferring
MariaMaria first toMr. Fraiz (the FirstAssignment), and then toLateleU.S. (the
SecondAssignment).6[Id.at pp. 58- 62].Ms.Garciadraftedandnotarizedsomeofthe
6 The Parties and this Court have previously outlined in detail the First
Assignment, the Second Assignment, the Joint Consent and the Addendum all
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documents;yetshedidnotrevealthisinformationtoSSLorensureitwasincludedin
interrogatory answers, some of which she also notarized. [Id.]. She admitted, in
retrospect,thattheinformationanddocumentsshouldhavebeendisclosed.[Id.atpp.61
64].
TheFirstAssignment and SecondAssignment are at the heart ofDefendants
motion to dismiss. Basically, Defendants say Latele lacks standing to bring these
copyrightclaimsbecauseitnolongerownedthecopyrighttoMariaMariaasofthetime
the lawsuitwasfiled.AfterDefendantsfiled theirmotion todismiss,Lateleproduced
anAddendum,supposedlypreparedtwoyearsearlier,which,iftrue,Latelecontends
wouldcompletelyunderminethestandingbaseddismissalmotion.Defendantsaccuse
LateleoffraudulentlycreatingtheAddendumandfalselyclaimingitwaspreparedin
2012,ratherthanin2014(inresponsetothemotiontodismiss).
Ms.Garcias
only
knowledge
of
the
so
called
Addendum,
which
Plaintiff
now
claims reversed theFirstAssignment (whichMr. Fraizdescribed as an involuntary
documentsthatplayakeyroleinthemotiontodismissatissuehere.[See,e.g.,ECFNo.
362].ThepartiesagreethatMr.Fraiz,Plaintiffsprincipalandhighestauthority,entered
into the first threeof these transactions less than fourmonthsbefore this actionwas
filed.The
First
Assignment
was
adocument
executed
in
April
2012
that
transferred
Maria
Maria toMr.Fraizpersonally.The SecondAssignment, also executed inApril
2012, transferredMariaMaria fromMr. Fraiz toMr. Fraizs wholly owned Florida
company,LateleU.S.TheJointConsent,datedApril18,2012,authorizedMr.Fraiz to
enter into the Second Assignment onbehalf of LateleU.S. Plaintiff claims that the
AddendumwasexecutedinApril2012aswell,andthatitrescinded(orcorrected)the
transfers made in the First and Second Assignment. Defendants disagree. These
documentsareexaminedinmoredetailbelow,atsectionI.A.
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error) came from oral conversationswithMr. Fraiz. She advisedMr. Fraiz that a
transferofMariaMariawouldnegativelyaffectthiscase.[ECFNo.324,pp.11819].
Ms.Garcia testified thatshedidnotdisclose theexistenceof these transactions
(whether they were undone, rescinded, aborted, canceled, superseded, corrected or
otherwisedeemednolongervalid)toSSLortoDefendantsbecauseherunderstanding
wasthattheunderlyingtransactionneverwentthrough.[ECFNo.325,p.60].Shedid
notdoany independent legalresearchonherown tosee if the informationabout the
transactions should have been disclosed in interrogatory answers or whether
documents concerning the transactions should have been produced in response to
document requests. [Id. atp. 61].Shedidnot consultwith anyof theRAL litigation
attorneystoseeiftheywouldhavedisclosedtheinformation.[Id.atpp.6061].Andshe
did not see the Addendum which supposedly (if not manufactured after the fact)
reversedthe
First
Assignment.
[ECF
No.
324,
pp.
90,
106
07].
AlthoughMs.Garcianotarized one of the transactiondocuments, shedidnot
keepacopy. [Id.atp.8889].ShereturnedtheoriginaltoMr.Fraizbutdidnotaskhim
foracopywhenshewasmarshalingdocumentsfortheSSLfirm.[Id.].
Fernando Fraiz admitted executing the First and Second Assignments but
testifiedthatthetransfers,negotiationsandrelateddocumentswereneverdisclosedby
Plaintiff in discoverybecause the dealwas never consummated; and regardless, he
claimed,MariaMariawasneveranintendedpartofthedeal.[ECFNo.324,pp.256,262
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64, 267].He testified that includingMariaMaria in the transferswas a mistake he
soughttocorrectwiththeAddendum.[Id.atp.268].
A.TheSpecificDiscoveryConductatIssue
AttheEvidentiaryHearing,Ms.GarciaadmittedshewasawareoftheTransfer
Documentsand theAddendum; in fact,shedrafted theSecondAssignmentandJoint
Consent. [ECF No. 324, pp. 85, 87]. As Plaintiffs outside general counsel, RAL
coordinated Plaintiffs responses to discovery requests in this case with outside
litigationcounsel(i.e.,SSL).[Id.atpp.25,116].Ms.GarciareviewedwithMr.Fraizthe
draftanswerstosomeofDefendantsinterrogatories.Forexample,Ms.Garciareviewed
PlaintiffsAnswersandObjectionstoDefendantTelemundoStudiosMiami,LLCsFirst
Set of InterrogatorieswithMr. Fraiz and notarized his signature on that document.
[ECFNo.324,pp.88,9196].Thefirstinterrogatorysoughtdetailedinformationabout
Maria
Mariaschain
of
title.7
Initsinterrogatoryanswer,Plaintifffailedtoidentify ormakeanyreferenceto
theTransferDocumentsandfailedtoidentifyMr.FraizorLateleU.S.asentitiesor
individualswhohaveeverowned[MariaMaria],thoughattheEvidentiaryHearingon
theprivilegewaiver issue,Ms.Garcia admitted that [i]n hindsight I should have.
7 PlaintiffsAnswersandObjectionstoDefendantsFirstSetofInterrogatoriescan
befoundatECFNo.1663,pp.6879.Thefirstinterrogatorysoughtinformationrelated
toallpriorownersof[MariaMaria],alltransfersorassignmentsofownershiporother
transactionsaffectingownershiporanyrightsinandto[MariaMaria],and...anyother
entitiesorindividualswhohaveeverowned[MariaMaria].
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[ECF No. 325, p. 61]. Plaintiff failed to produce these documents in response to
Defendants document requests. Request 19 of Defendants Second Request for
Production (served November 16, 2012) sought: All documents reflecting or
evidencing any transfers, licenses, sublicenses, encumbrances, pledges, or any other
transactionsofanykind involvinganyofthecopyrightsorother intellectualproperty
rightsofanykind,oranyotherrightsrelatedtothework(s)allegedlyinfringed.8
In response to the document request, Plaintiff agree[d] to produce all
responsivenonprivilegeddocumentsspecificallypertainingtoMariaMaria.... [Ex.
42, pp. 1617]. Nevertheless, Plaintiff never produced or otherwise disclosed the
TransferDocumentsorAddenduminresponsetothisoranyotherdiscoveryrequests.
DefendantsFourthRequestforProductionsought,atRequest11:
Communications between Plaintiff (specifically including any of its
officers and affiliated entities) and LaTele Productions, Inc. [i.e. Latele
U.S.](or
any
predecessor,
successor,
or
related
entities),
regarding
any
transaction, offer, arrangement, or proposal relating to telenovelas,
including,without limitation, the . . . assignment . . .of any telenovela,
including,withoutlimitation,MariaMaria....
[Ex. 43, p. 6]. In response, Plaintiff stated: There areNO responsive documents in
LATELES possession, custody or control. [Ex. 44, p. 2] (emphasis in original).
Defendants
other
document
requests
and
interrogatories
sought
information
about
8 DefendantsSecondRequestforProductionwasExhibit42attheAugust2021,
2014EvidentiaryHearing.References toexhibitsare to thoseexhibitsadmittedat the
EvidentiaryHearing.AfulllistofadmittedEvidentiaryHearingexhibitsisavailableat
ECFNo.323.
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negotiations and other documents.9 In each of these document requests,Defendants
soughtallelectronicallystoredinformation(ESI)inadditiontootherformats,and
thustherequestsincludedmetadata.10
Defendants previously have urged that Plaintiffs discovery violations i.e.,
Lateles failure toproduce theTransferDocumentsandLatelespurported fabrication
of theAddendum were sufficient tomeet the crimefraud exception andwarrant
waiveroftheattorneyclientprivilegeinconnectionwithcertainRALdocuments.The
EvidentiaryHearingwas on these very issues and a significant part of that hearing
involved thecircumstancesunderwhich theTransferDocumentsand theAddendum
werecreated(andthefactssurroundingthepurportedpublicfilingof theAddendum
withaVenezuelannotary).
Mr. Fraiz testified at the EvidentiaryHearing that the FirstAssignmentwas
correctedand
the
Second
Assignment
and
Joint
Consent
were,
for
all
practical
purposes, ineffective. [ECF No. 324, p. 242]. Defendants contend that Mr. Fraizs
testimonyon thispoint isnotcredible.Theyalsomakeanotherargument:even if the
9 See,e.g.,Ex.4,pp.24(PlaintiffsAmendedAnswerstoDefendantsFirstSetof
Interrogatories),Interrogatories13(seekinginformationaboutnegotiationsregarding
the prospective sale and/or licensing of Maria Maria), Interrogatories 46 (seeking
informationabout
offer[s]
...or
proposals
concerning
telenovelas);
ECF
No.
125
7,
p.
4, Requests 12 (seeking documents and communications reflecting negotiations
regardingtheprospectivesaleand/orlicensingofMariaMaria).
10 See,e.g.,Ex.43,p.2(defining[d]ocumentstoincludeallelectronicallystored
information).ThepartiesagreedtoaprotocolforproductionofESI.[ECFNo.112,p.
17].
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transactions were undone or reversed or otherwise ineffective, they were
unquestionablyresponsivetomultiplediscoveryrequestspropoundedbyDefendants.
Each attorney who testified (including Ms. Garcia herself) indicated that these
documents were responsive to requests for documents reflecting any transactions
involving MariaMaria.11 But Plaintiff repeatedly swore that no such documents or
transactionsexistedinitspossession,custodyorcontrol.
Forinstance,onFebruary26,2014,thethenassignedmagistratejudgeissuedan
OmnibusOrder,whichdenied, inpart,DefendantsConsolidatedMotion toCompel,
based on Plaintiffs statements that it has no responsive documents and it has
nothingelsetoproduce,butclarifiedthatPlaintiffisobligatedtoproduceallactive
andpastnegotiationsregardingMariaMariaandrequiredthatPlaintiffshallclarify
inaproper response that ithasproduced all responsivedocuments. [ECFNo.134,
pp.23].
TheOmnibusOrder(ondiscoveryissues)alsorequiredPlaintifftoprovidethe
exact searches [for ESI] thatwere performedby its IT personnel. [Id. at p. 2].On
February 27, 2014, Defendants counsel wrote to Plaintiff indicating Defendants
positionthatacompleteresponsetothisportionoftheOmnibusOrderwouldrequire
11 Ms. Garcia testified that she never advised Mr. Fraiz not to disclose the
transactions reflected in the First Assignment, the Second Assignment or the Joint
WrittenConsent.[ECFNo.324,pp.9395].ShealsotestifiedthatMr.Fraizneverasked
hertonotdisclosethetransactions.[Id.].
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[Plaintiff]tostatenotonlywhatsearchtermswereused,butalsowhatlocationswere
searched,forwhattypesofESI,onwhatdates.[ECFNo.1664].
OnMarch 7, 2014, LaTele filed its Verified Notice of Full Compliance with
OmnibusOrder. [ECFNo.144]. In response toDefendants request forNegotiations
for the Sale, Licensing, Transfer or Other Transactions related to the Catalogue of
Programming Received fromMarte TV, Plaintiff stated: There areNO additional
responsivedocuments inPlaintiffspossession custodyor control toproduce.To the
extentanyresponsivedocumentsmayexist, theywouldbein thecustody,possession
and control of a third party, Plaintiffs exclusive distributor, SOMOS,who is under
subpoenatoproducesame(andinfacthasalreadydoneso).[Id.atp.2](emphasisin
original).
In a written response to Defendants request for Documents Reflecting
Ownership,Transactions,
or
Disputes
of
the
Asserted
Work,
Plaintiff
stated:
Plaintiff
herebyclarifies,fortherecord,thatallresponsivedocumentstothisissuehavealready
been produced. [Id. at p. 3]. Plaintiff also attached a swornAffidavit executedby
Fernando Fraiz on March 7, 2014, wherein he attested: all responsive documents
regardingtheassertedwork,meaningdocumentsreflectingownership,transactions,or
disputes about same, have already been produced by Plaintiff as to responsive
documentsinitscustody,possession,andcontrol.[ECFNo.1411,p.2].
TheCourtpreviouslyfoundthatthesestatementsmadewhilePlaintiffsilently
withheldresponsivedocumentsandprovided incorrect interrogatoryanswers were
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false.12 [ECFNo.362,p.15].Moreover, theCourtalsonoted thatPlaintiffcouldhave
hadastrategicmotivationtohidetheexistenceofthetransactionsandthedocuments
whichevidencedthem.13[Id.].
12 Inadeposition,Mr.Fraiztestifiedthathenevercontemplatedpersonallyowning
anyrightstoMariaMariaandthatsuchatransactionwasneverexecuted.Inaddition,
whenMr. Fraiz was asked at his deposition about an unsigned copy of the First
Assignment, Plaintiffs counsel objected and implied that the question was merely
hypotheticaland
Mr.
Fraiz
then
stated
that
if
at
any
time
this
means
to
perfect
it,
it
wasneverexecuted.[ECFNo.1661,pp.811].
13 AsoutlinedinDefendantsmotiontodismiss,aplaintiffseekingtobringaclaim
forcopyrightinfringementmustexclusivelyowntheworkitclaimswasinfringedatthe
timethelawsuitisfiled.Withoutsuchownership,aplaintifflacksstandingtobringthe
claim.Seee.g.,SaregamaIndiaLtd.v.Mosley,635F.3d1284,1986(11thCir.2011)(finding
lackofsubjectmatterjurisdictionbecausePlaintiffdidnotcurrentlyownacopyrightin
the work at issue). If the Transfer Documents were not undone by the socalled
Addendum,
then,
Defendants
argue,
Plaintiff
has
no
standing
to
pursue
the
case
and
theCourtmustdismissit.ItwasonlyafterDefendantsfiledtheirmotiontodismissthat
PlaintiffproducedtheAddendum.
TheUndersignedisnotnowmakinganyfindingsaboutthelegalsignificanceof
theTransferDocuments or theAddendum other than to conclude that theywere
responsivetodiscoveryrequests.Likewise,theCourtisnotreachinganyconclusions
hereaboutPlaintiffsstanding(orlackofstanding)topursuethislawsuit.
Nevertheless, a federal court is always concerned about subject matter
jurisdiction.Therefore,
Latele
will
need
to
establish
at
trial
its
standing
to
pursue
the
lawsuit. Inotherwords, itwillneed toprove that it exclusivelyowned the rights to
MariaMariaon theday it filed the lawsuit.Owning the rightsby the timeof trial is
insufficientifownershipwhenthelawsuitwasfiledisnotestablished.DominionAssets,
2014WL2937058at *910 (noting that theplaintiff indisputablyowned thepatentsat
thetimeofthemotionbutdismissingbecausetheplaintiffcouldnotdemonstratethatit
heldlegaltitleattheinceptionofthelawsuit).
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B. TheAllegedFabricationoftheAddendum
ThepartiesvigorouslydisagreeaboutthebonafidesofthesocalledAddendum.
PlaintiffcontendsitislegitimatewhileDefendantsbranditasafraudulentsham.
While it is uncontroverted that theAddendum first appeared in this case on
April17,2014,aspartofPlaintiffsResponsetoDefendantsMotiontoDismiss,which
assertedthattheTransferDocumentsdeprivedPlaintiffofstanding,Plaintiffclaimsthe
Addendumwas created and executed inApril 2012. [ECFNos. 185, p. 6; 1854]. In
support of their contention that the Addendum was fabricated in response to the
MotiontoDismiss,Defendantsproduceddocumentaryevidenceandexperttestimony
that the faceof theAddendum indicates itwas filed,andshouldappear,ataunique
pageoftherecordsofaparticularnotaryoffice.[ECFNo.325,pp.7585].Nevertheless,
when Defendants expert inspected those records, a completely different document
appeared.Neither
party
has
located
any
notary
records
where
the
Addendum
was
actuallyrecorded.Thus,Defendantsassert theAddendumwasnotactuallyfiledwith
thatnotaryofficeandinsteadwascreatedafterthefact.
However,as referencedabove, theAddendum itselfandMr.Fraizs testimony
supportPlaintiffspositionthatitwascreatedin2012.
Inaddition,Plaintiffsubmittedthedeclaration(madeunderpenaltyofperjury)
ofPaolaAlexandraMuniveCastillo, aVenezuelan attorney. [ECFNo. 3312]. In this
affidavit, Ms. Munive explained that she prepared, drafted and reviewed the
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Addendum in2012,at therequestofXiomaraRuiz,anagentofMr.Fraizs. [Id.].Ms.
Ruizalsosubmittedadeclaration.[ECFNo.3311].
AlthoughMs.Munives declaration explains that shewas involvedwith the
Addendumin2012,Defendantsemphasizethatthereareseveralsuspiciousaspectsto
her declaration. For example, no metadata or drafts were produced. Ms. Munive,
however,profferedanexplanation:shesaidshenolongerhastheelectronicfileofthe
Addendum shedrafted in2012becausesheprepared itonacomputersheno longer
possesses.[ECFNo.3312,p.2].Ms.Munivesdeclarationdidnotsayanythingabout
theserver,butMs.RuizsdeclarationsaidsheaskedMs.Munivetoconductasearchfor
ESIandmetadataonhercomputerandserverbut that the searchyieldedno results.
[ECFNo.3311,p.1].
Defendants view the absence ofmetadata/ESI and drafts as evidence further
establishingthat
the
Addendum
was
in
fact
fabricated
[in
2014]
as
part
of
Plaintiffs
effort tomanufacture standing and explain away its failure to disclose the Transfer
Documentsandthetransactionsreflectedtherein.[ECF3591,p.12].
Defendants also argue thatPlaintiffs failure tomaintain suchdocuments and
ESI,createdlessthan4monthsbeforefilingitsComplaintinthiscase[ECFNo.1]and
after signing multiple tolling agreements [ECF No. 1611, pp. 1232], constitutes
spoliationofevidenceandwarrantsanadverseinference.
Defendants also contend that theAddendum, even if created in 2012, should
havebeendisclosedinresponsetomultiplediscoveryrequests.
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C. TheNovember3,2014DiscoveryOrderandPlaintiffsResponse
OnNovember3,2014,theUndersignedissuedanOrderonWhetherDefendants
areEntitledtoPrivilegedDocumentsfromRobertAllenLaw,P.A.[ECFNo.362].This
Order specifically found that Plaintiffs statements in response to certain discovery
requestsandinterrogatories,asoutlinedaboveatsectionI.A.,werefalse.[ECFNo.362,
p. 15]. In connectionwith that finding, theUndersigned explicitly noted thatwhile
Plaintiffs discovery misconduct did not create a waiver of privilege for the RAL
privileged documents under the crimefraud exception, other consequences would
followinalaterrulingontheseparatelyfiledmotiontodismiss.[Id.atpp.1617].
OnNovember 7, 2014,Plaintiff,perhaps attempting to anticipate and forestall
thoseconsequences,filedtwonotices.Inthefirst,titledPlaintiffsCorrectedNotice
ofCompliancewithCourtOrder[DE134],Plaintiffamendsitsoriginalverifiednotice
ofcompliance,
filed
in
response
to
the
Courts
February
26,
2014
Order,
that
explicitly
stated ithadNOadditionalresponsivedocuments.Plaintiffpurports tocorrectthat
priorstatementwiththesubstitutionofanewstatementthatnotesitlikelydid havethe
TransferDocumentsinitspossessionasofMarch7,2014asitreceivedacourtesycopy
oftheproductionmadebynonpartySomos,andtheTransferDocumentswereinthat
production. Plaintiff states it did not then produce the Transfer Documents to
DefendantsbecauseDefendantsalreadyhad thosedocumentsat that time,bywayof
Somos. Finally, the substituted response notes that Plaintiffs counsel did not have a
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copyoftheAddendumatthetimetheverifiednoticeofcompliancewasfiled.[ECFNo.
366,p.2].
Plaintiffalso filedaNoticeofServingSupplementalandCorrectedDiscovery
Response on November 7, 2014. [ECF No. 367]. This Notice documents Plaintiffs
formal,writtensupplementationtoandcorrectionofitspriordiscoveryresponsesas
torequestsforinformationre:negotiationsforMariaMaria,activeorinthepast.[Id.
atp.3].Plaintiffalsonotesthatitisservingasupplementalanswertoaninterrogatory
regardingcontrolofLatele.[Id.atp.4].
Plaintiffs twomost recently filed submissionscannot remedy itspastconduct.
NeithertheAddendumnortheTransferDocumentswereproducedbyPlaintiffbefore
February 27, 2014. Mr. Fraizs affidavit submitted with Lateles verified notice of
compliancestatedthatallresponsivedocuments...reflectingownership,transactions,
ordisputes
have
already
been
produced
by
Plaintiff.
[ECF
No.
144
1,
p.
2].
Peggy
Garcia now admits the Transfer Documents and Addendum were responsive and
shouldhavebeenproduced.[ECFNo.325,pp.6164].NeitherPlaintiffnorMs.Garcia
everadvisedMr.Sammataro,itscounselofrecordinthisactionatthetime,aboutthe
TransferDocumentsortheAddendum[Id.atp.60],andPlaintiffsowncurrentcounsel
ofrecordcondemnedMr.Fraizsfailuretocooperateindiscovery.[ECFNo.328,pp.11
12].14Moreover, theAddendumwas notproduceduntilApril 2014 but only after
14 BypriorOrder,theUndersignedrequiredthatcertaindocumentsinthesocalled
Somos Production be produced by Plaintiff, which had asserted attorneyclient
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Defendants filed theirmotion to dismiss for lack of standing. In addition, the two
submissionsdonot impactMr.Fraizs falseormisleadingdeposition testimony,and
theydonotsignificantlyundermineDefendantstheorythatitisnocoincidencethatthe
twodocumentswhichcouldremovePlaintiffsstandingwerenot timelyproducedor
that thedocumentwhich reversedor corrected the transactions appearedonlywhen
necessarytofendoffastandingbaseddismissalmotion.
II. LegalAnalysis
Defendantsmotion todismiss for lackof subjectmatterjurisdiction,basedon
the view that Latele lacks standing, was filed before Defendants learned of the
Addendum.Thedismissalmotionisbasedonthe theorythattheTransferDocuments
demonstratethatLateledidnotowntheexclusiverighttoMariaMariawhenitfiledthe
lawsuit.ButnowthattheAddendumhassurfaced,theanalysismustalsochange.
privilegeover thosematerialsnotwithstanding that theywere(a) in thepossessionof
Somos, and (b) Plaintiff acknowledged that Somos was outside the scope of any
attorneyclientprivilegePlaintiffmighthavewithitscounsel.[ECFNo.328,p.10].
In thatOrder, theUndersigned noted that several of the emails in question,
whichhavenowbeenproducedtoDefendants,describedPlaintiffspotentialfailureto
meetdiscovery
obligations.
For
instance,
one
email,
from
Plaintiffs
current
counsel
of
record toMr. Fraiz had the subject line Discovery Failures. [Id. at pp. 1112]. In
another email [ECFNo. 2963],Lateles current litigation counsel complained toMr.
Fraizabouthislevelofnoncompliance,resistanceanddelayingtactics. Inanother,
he advises that Latele may lose the case and/or be sanctioned for violating the
discovery rules. The Court previously ordered Latele to produce these formerly
privileged communications to Defendants because Latele waived privilege by
intentionallysendingthedocumentstoSomos,athirdparty.
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If the Addendum was created and executed in 2012 (as opposed to being
fraudulentlymanufacturedin2014),thenDefendantsargumentaboutthesignificance
of theTransferDocuments is significantlyundermined (andmaywellbe completely
unavailable).IftheAddendumwasfabricatedin2014(inanefforttotrickDefendants
andtheCourt),thentheTransferDocumentswouldaffectPlaintiffsstandingtofilethis
lawsuit in2012 andwould also creategrounds fordismissalundera fraudon the
courtdoctrine.
These arebig ifs, however. They cannotbe resolved nowbecause there is
evidence to supportboth sidespositions. Belleri v. United States,712F.3d543,54749
(11thCir. 2013) (disagreeingwith the defendants argument that the appellate court
coulddeterminesubjectmatterjurisdictionbydecidingwhethertheplaintiffisanalien
andwhetherheobtainedderivativecitizenshipandremanding to the trialcourtafter
rejectingthe
defendants
argument
that
remand
was
unnecessary).
However, there is no doubt that Latele never timely produced the Transfer
Documents and theAddendum and that this failure has significantly prejudiced
Defendantsintheirabilitytoadequatelyinvestigatethesedocuments.Defendantshave
nothadtheopportunitytotakethedepositionsofMs.MuniveandMs.Ruiz.Theyhave
not had the opportunity to thoroughly question Mr. Fraiz about the Transfer
Documents,andtheyhavenothadthechancetothoroughlyquestionMs.Garciaabout
herinvolvementinthediscoveryprocess.Similarly,theywerenotpreviouslyawareof
theneedtoprobethecircumstancessurroundingthesedocumentsbecausetheywere
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simplynotaware that theTransferDocumentsexisted. Inaddition,Defendantswere
notmade awareof theneed to investigateLateleU.S.becausePlaintiffnever timely
discloseditsexistencenoritsinvolvementwithMariaMaria.
Likewise,thereisnodoubtthatthesedocumentsandtheinformationaboutthe
transactionsreflected in themwereresponsive tonumerousdiscoveryrequests and
that Plaintiff provided false discovery responses which hid the existence of the
documentsandthetransactions.Initsoppositiontotheinstantmotion,Plaintiffargues
thattheAddendumdidnothavetobeproducedbecauseitisaninternaldocumentto
the failed negotiations of certain of Plaintiffs telenovelas, that excludes the subject
telenovela,MariaMaria.[ECFNo.185,p.6,n.6].TheCourtunequivocallyrejectsthis
theory,as theAddendum isclearlyresponsive toarequest fordocumentsevidencing
allactiveandpastnegotiationsregardingMariaMaria.Infact,Plaintiffsargumentis
illogicaland
unconvincing
on
its
face.
The
primary
reason
for
the
Addendum
was
to
undo or reverse or correct the purportedmistake of includingMariaMaria in the
TransferDocuments. IfMariaMariahad clearlybeen excluded from thenegotiations
withTelevisa (i.e.,negotiationswhichPlaintiff saysnever went through), then the
Addendumwouldhavebeenentirelyunnecessary.[ECFNo.325,pp.6062].
Given thepotentialsignificanceof thesedocuments(e.g., theymightmeanthat
Plaintiff lacks standing to pursue the copyright claims or theymight establish that
PlaintiffpurportedafraudontheCourtbyfabricatingacriticaldocument),theonlyfair
andreasonablewaytominimizeprejudicetoDefendantsshortofoutrightdismissalis
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topermitthemtotakeadditionaldiscovery. Becausesomeofthewitnessesareoutof
thecountryandbecausethetrialisscheduledtooccurrelativelysoon,theneedtogive
Defendantsadditionaldiscoverymeans that thecasemustberemoved from the trial
calendar.TheCourtwill issueanewtrialschedulingorderafter ithas theNovember
21,2014discoveryhearingonDefendantsrequest fora forensicanalysisofPlaintiffs
electronicmedia(andaftertheUndersignedissuesarulingonthatrequest).
In themeantime, however,Defendantsmay take discovery (bothwritten and
depositions) concerning the Transfer Documents, the Addendum, the lack of
ESI/metadata, the potential spoliation or destruction of evidence, assessingwhether
Plaintiffs conduct constitutes bad faith15 and the circumstances surrounding the
purported witnessing and filing of the Addendum in Venezuela. Defendants are
specifically authorized to retake depositions, including ofMr. Fraiz, as part of this
remedialprocess
to
eliminate
or
substantially
minimize
prejudice
to
Defendants.
15 In theEleventhCircuit,bad faith is thekey tounlocking theCourts inherent
power to imposesanctionsforspoliation.PenaltyKickMgmt.Ltd.v.CocaColaCo.,318
F.3d1284,1294(11thCir.2003)(noadverseinferencefrommissinglabelbecausethere
wasnoindicationofbadfaith).SeealsoMannv.TaserIntl,Inc.,588F.3d1291,1310(11th
Cir.2009).
TheUndersigned
does
not
have
enough
information
to
determine
whether
badfaithexistsinconnectionwithLatelesapparentfailuretopreserveESI.Deposition
testimonyand/oradditionaldocumentproductionfromLatelemayshedlightonthis.
However, the issue of Lateles failure to preserve ESI (such as metadata for the
Addendumpurportedlycreated inVenezuela in2012)isanalyzeddifferentlythanits
failure to produce the TransferDocuments and theAddendum, in partbecause the
factualrecordhasnotbeenfullydeveloped.
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Defendants have until February 10, 2015 to take the additional discovery.
Plaintiffshallcooperateinfacilitatingthediscoveryrequests,especiallyiftheyinvolve
PlaintiffsemployeesoragentsinVenezuela.
The Undersigned has reviewed portions of the transcript of Mr. Fraizs
deposition, where Plaintiffs counsel made speaking objections which Defendants
criticizeas improper coachingefforts. [ECFNo.1661].Withoutmakinga findingon
whethercounselsrepeatedobjectionsstrayedoverthelineintoimpropercoaching,the
Courtisputtingallcounselonnoticethattheirdepositionbehaviormustcomplywith
allapplicablerules andthattheUndersignedwillnothesitatetoimposesanctionsif
counselviolatetherules.Toavoidanyambiguity,theUndersignedconsidersanifyou
know comment to a deponentbefore he or she answers a deposition question to
usuallybeimpropercoaching,designedtosignalthewitnesstoanswerthatheorshe
doesnot
know
or
remember
the
answer.
The Undersigned is also awarding attorneys fees in Defendants favor in
connectionwith the discovery violations at issue in themotion to dismiss (and as
furtheroutlinedattheEvidentiaryHearing).Evenassuming,asPlaintiffsurge,thatthe
Addendum wasexecuted in 2012,neither itnor theTransferDocumentswere timely
produced toDefendants.So,evenacceptingPlaintiffsviewof the facts,but for their
failure to timely produce these critical documents, coupled with Plaintiffs other
discoverymisconductoutlinedhere,Defendantswouldnothave incurred thecostof
draftingandfilingtheirmotiontodismissorofengaginginextensivediscoveryrelated
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litigation toget at theheartof the copyright chainof title issue.The award isbeing
entered under FederalRule ofCivil Procedure 37(b)(2)(A)(v),16 FederalRule ofCivil
Procedure 37(b)(2) (failure to complywith a court order)17 and theCourts inherent
power.The feesaward isaconsequenceofLatelesbad faith failure tobe truthful in
discovery.AsexplainedbythebandIncubusinitsConsequencesongfromitsdouble
platinumMakeYourselfalbum,Youbetternotblink/Ohblink/Theconsequence
isabiggerwordthanyouthink.18
In rejectingDefendants request fordismissal, theUndersigned recognizes the
strongpreferenceforadeterminationonthemeritsofadispute.SeegenerallySe.Banking
Corp.v.Basett,204F.3d1322(11thCir.2000)(reversinglowercourtsentryofadefault
judgmentfordiscoveryviolations).SeealsoBernal,479F.Supp.2dat130102(modifying
magistratejudgesrecommendationbynotstrikinganswerandaffirmativedefensesbut
insteadordering
that
the
jury
would
be
instructed
that
certain
facts
had
been
16 See, e.g., Bernal v.AllAm. Inv. Realty, Inc.,479F.Supp.2d1291,1335 (S.D.Fla.
2007).
17 Therulegives trialjudgesbroaddiscovery tofashionappropriatesanctionsfor
violationofdiscoveryorders.Malauteav.SuzukiMotorCo.,Ltd.,987F.2d1536(11thCir.
1993).Theseveresanctionofadismissalordefaultjudgment isappropriateonlyasa
last resort,when lessdrastic sanctionswouldnotensure compliancewith the courts
orders.Navarro
v.
Cohen,
856F.2d
141,
142
(11th
Cir.
1988).
See
also
Betty
K
Agencies,
Ltd.
v.
M/V
Monada, 432 F.3d 1333, 133738 (11th Cir. 2005) (vacating withprejudice
dismissalandnoting that sucha resultisanextreme sanction thatmaybeproperly
imposedonlywhen:(1)apartyengagesinaclearpatternofdelayorwillfulcontempt
(contumaciousconduct);and(2)thedistrictcourtspecificallyfindsthatlessersanctions
wouldnotsuffice.)(internalquotationomitted).
18 EpicRecords(1999).
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established including defendants spoliation of evidence andprocurement of false
evidence).On theotherhand, thispreferencemaywellyield if theCourtdetermines
laterthatLatelemanufacturedtheAddendumorotherwisetriedtoperpetrateafraud
ontheCourt.
Inparticular,afeesawardagainstLateleitselfisjustifiedastheCourtfindsthat
LateleeitherrecklesslyorintentionallyfailedtotimelyproducetheTransferDocuments
and the Addendum. Either way, I find that Lateles failure to timely produce the
TransferDocumentsandtheAddendumconstitutesbadfaithdiscoverymisconduct.In
addition,theCourtfindsthatMr.Fraizsdepositiontestimonyaboutthesedocuments,
the negotiations with Televisa and the execution of the documents was, at best,
strategicallymisleading,andperhapsperjurious.19EvenifLatelesconductwasmerely
reckless, insteadofbeingmotivatedbypurposefulbad faith, I find that this reckless
conductconstitutes
the
requisite
bad
faith
to
justify
sanctions
under
the
Courts
inherentpower.
TheCourt isspecificallynotenteringa feesawardagainstMr.Sammataroand
SSLbecausethereisabsolutelynoevidencetoevensuggestthattheyknewabout the
Transfer Documents, the Addendum, the negotiations with Televisa or the
circumstancessurroundingtheexecutionofthedocuments.Infact,alltheevidenceisto
thecontrary,establishingthattheydidnotknowofthesematters.
19 Seegenerally,AllapattahServs.,Inc.v.ExxonCorp.,373F.Supp.2d1344,1373(S.D.
Fla.2005)(inherentpowercanbeinvokedevenifproceduralrulesexistwhichsanction
thesameconduct).
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TheCourtisnotenteringafeesawardagainstLatelescurrentcounselbecauseit
isunclearwhen they first learnedof theTransferDocuments, theAddendumor the
circumstances surrounding the execution of those papers. In addition, the record is
hazyonwhencurrentcounselactuallyrealized thedocumentshadbeenproduced to
themandwhentheyunderstoodthedocumentssignificance.
DefendantsshallwithinfivedaysofthisOrdersubmittoPlaintiffanaffidaviton
theamountoffeesbeingsought(withsupportingbackup)andthenattempttoreachan
agreementwithPlaintiffconcerningtheamountoffees.Defendantsmayseekattorneys
fees related to the instantmotion to dismiss, aswell as any other fees incurred in
litigating discovery disputes related to Plaintiffs nonproduction of the Transfer
DocumentsandAddendum. Ifanagreement isreachedwithin10daysof thisOrder,
thenthepartiesshalladvisetheCourtinabrief,jointlyfilednoticeandthefeesshallbe
paidwithin
7days
after
the
filing
of
the
notice.
If
the
fees
are
paid,
then
Plaintiff
shall
withinfivedaysofpaymentsubmittotheCourtsefileinboxaNoticeofCompliance,
attachingadeclarationconfirmingthepaymentandnotingtheamount.Ifanagreement
cannotbereachedbythedeadline,thenthepartiesshallsoadvisetheCourt,whichwill
then require counsel for both Plaintiff andDefendants to submit an affidavit (with
backupdocumentation)of the fees incurred inconnectionwith thediscoverydispute
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(eitherrelatedtofilingoropposingthemotiontodismissoradvocatingfororagainst
productionofthediscoverymaterialsatissuehere).20
Onefinalpoint: FederalRuleofCivilProcedure37authorizestheCourttoenter
afeesawardagainsttheparty,thepartyscounselorboth.GivenRALsinvolvementas
theclearinghouseforLatelesdocumentsandinformationtoSSLandgivenMs.Garcias
activitiesinconnectionwiththeTransferDocuments,reviewinginterrogatoryanswers
andprovidingdocumentstoSSL,theCourtwillgiveRALtheopportunitytobriefthe
issueofwhetheranyportionofthefeesawardshouldbeenteredagainstit,and,ifso,
whatpercentage.TheCourtwillalsogiveDefendantsandLatelescurrentcounselthe
chancetoweighinonthisissue.Therefore,RAL,PlaintiffandDefendantsmay(but are
notrequiredto)submitamemorandumonthisissueofnomorethan10doublespaced
pages,excludingsignatureblockandcertificateofservice,within10daysofthisOrder.
20 Ifnoagreementcanbereached,thentheCourtwillevaluatetheattorneysfees
incurredbyallparties inorder toassess the reasonablenessof the fees requestedby
Defendants.
Rule37authorizesavarietyofsanctions,includingdismissaloftheentireaction,
renderingadefaultjudgmentagainstthedisobedientparty,strikingpleadingsinwhole
or inpart,prohibiting thedisobedientparty fromsupportingoropposingdesignated
claimsordefensesorfromintroducingdesignatedmattersinevidence.TheCourtisnot
now imposing those harsher remediesbecause theUndersigned views the sanctions
imposed
additionaldiscovery
(taken
only
by
Defendants),
payment
of
certain
discoveryexpensesandanattorneysfeesaward tobeadequate.ButtheUndersigned
may well reconsider these moresevere sanctions if presented with evidence that
exhibitshavebeenfraudulentlycreatedorthatrelevantevidence(suchasmetadataand
ESI)hasbeendestroyed. Goforth v. Owens, 766F.2d 1533 (11thCir. 1985) (affirming
dismissaldue to theplaintiffs counselspatternofdelayand refusal to complywith
courtdirectionsandnotingtherewasnoabuseofdiscretion).
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Thememorandamaybesubmitted regardlessofwhether there isanagreementas to
theamountoffees.21
IfthereisanagreementamongPlaintiff,Defendants,RALandPlaintiffscurrent
counselonwhetherRALshouldbefinanciallyresponsibleforsomeportionofthefees
award(and,ifso,howmuch),thennoticeofthisagreementshouldbetimelygivento
the Court. In order to facilitate RALs ability to timely submit a memorandum,
LatelescurrentcounselshallforthwithprovideacopyofthisOrdertoRAL.
21 TheCourtmightbe authorized to award fees againstRAL under theCourts
inherentpowerand28U.S.C.1927,butthosesourcesofauthorityrequireafindingof
badfaith.Amlongv.Dennys,Inc.,457F.3d1180,1190(11thCir.2006)(badfaithneeded
for section 1927 fees against counsel); Barnes v. Dalton,158F.3d1212,1214 (11thCir.
1988) (inherent power). Although reckless conduct is sufficient to justify sanctions
requiringbadfaith,negligentconduct,standingalone,willnotsupportafindingofbad
faith.Amlong,457F.3dat1193.
RALs activitieswere eithermaliciously intentional (e.g., purposefully hiding
documentsandinformationindiscovery,inanimproperattempttohelpitsclientavoid
a thorny standing issue), reckless (i.e., a grossdeviation from reasonable conduct,
Amlong, 457 F.3d at 1191) ormerely negligent (e.g., a comparatively inexperienced
attorneywith no litigation experiencewho exercised poorjudgment in unilaterally
decidingwhethertoproducedocumentsandinformationindiscoveryortoherclients
litigationcounselwithoutconsultingwithlitigationpartnersinherownfirmandwho
thendecidedtheserelatedissuesincorrectly).TheUndersignedhasnotconcludedhow
tocategorizeRALsconduct,butRule37doesnotrequirebadfaith.Infact,itdoesnot
requirenegligence.
Instead,
the
rule
establishes
aloser
pays
presumption
to
discoverydisputes.IfDefendantsorPlaintiffscurrentcounselbelievethatRALshould
alsoberesponsible for feeseitherunderRule37,Section1927or theCourts inherent
power,thentheyshallsoadviseRALinwritingwithinfivedaysofthisOrder,sothat
RALmay address theposition in its optionalmemorandum.Therefore, the optional
memorandawill, at aminimum, address thepropriety of a fees award againstRAL
underRule37andmay (dependingon thepartiespositions)alsodiscuss feesunder
Section1927andtheCourtsinherentpower.
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III. Conclusion
TheMotiontoDismissisDenied.TheCourtwillnotdismissthecaseforlackof
subjectmatterjurisdictionbecauseDefendantsargument thatPlaintiff lacks standing
hinges on contested facts. The Courtwill not dismiss this casebased on discovery
violationseither dismissalasasanctionfordiscoverymisconduct is themostsevere
sanction and theCourt declines to do so at this time.However, as outlined in this
Order,theCourtwillprovideDefendantssubstantialreliefinconnectionwithPlaintiffs
discoverymisconduct:
1) ThetrialinthiscasewillbecontinuedtoallowDefendants(andnotPlaintiff)to
conductadditionaldiscovery.TheCourtwillissueanewschedulingorderonceitrules
onthoseissuesnoticedforhearingonNovember21,2014.
2) Defendantsadditionaldiscoveryissubjecttothefollowingconditions:
a.
Thediscovery
is
limited
to
this
area
of
inquiry:
the
Transfer
Documents,
theAddendum, the lack ofmetadata producedby Plaintiff in connectionwith the
CourtsPostHearingOrder[ECFNo.314],Plaintiffspotentialspoliationordestruction
of evidence, assessing whether Plaintiffs conduct constitutes bad faith and the
circumstances surrounding thepurportedwitnessing and filing of theAddendum in
Venezuela.Defendants are specifically authorized to retakedepositions, including of
Mr.Fraiz.
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b. The additional discovery must be completed by February 10, 2015.
Plaintiffmustcooperateinfacilitatingthisdiscoverysothatitmaybecompletedbefore
thisdeadline.
c. Plaintiffmustpaytheattendancefeesforcourtreportersorvideographers
usedatanyfuturedepositionsscheduledbyDefendants.
d. Plaintiffmustpay the travelcosts foronedefenseattorneyatanyfuture
outoftowndepositionsthatDefendantschoosetotake.
e. Plaintiff must pay these discoveryrelated expenses within 30 days of
receivinganinvoicefromDefendants.
f. Defendants may, if they choose, file another motion to dismiss the
complaint for fraud on the court/intentionalbad faith discovery abuse if additional
discovery or other evidence obtained by Defendants establishes that Plaintiff
fraudulentlymanufactured
and
post
dated
the
Addendum
or
that
Plaintiff
destroyed
relevantevidence(suchasESI)afteradutytopreserveevidencewascreated.
3) The Court is awarding Defendants attorneys fees in connection with the
discovery violations at issue in the instant motion to dismiss. The fees award is
governedbythefollowingconditions:
a. Defendants shall within 5 days of this Order submit to Plaintiff an
affidavit on the amount of fees being sought (with supporting backup) and then
attempt to reach an agreement concerning the amountof fees.Defendantsmay seek
attorneys fees related to the instant motion to dismiss, as well as any other fees
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incurred in litigating discovery disputes related to Plaintiffs nonproduction of the
TransferDocumentsandAddendum. Ifanagreementisreachedwithin10daysofthis
Order,thenthepartiesshalladvisetheCourtinabrief,jointlyfilednoticeandthefees
shallbepaidwithin7daysafterthefilingofthenotice.Ifthefeesarepaid,thenPlaintiff
shall within five days of payment submit to the Courts efile inbox a Notice of
Compliance,attachingadeclarationconfirmingthepaymentandnotingtheamount.If
anagreementcannotbe reachedby thedeadline, then theparties shall soadvise the
Court,whichwillthenrequirecounselforbothPlaintiffandDefendantstosubmitan
affidavit (with backup documentation) of the fees incurred in connection with the
discovery dispute (either related to filing or opposing the motion to dismiss or
advocatingfororagainstproductionofthediscoverymaterialsatissuehere).
b. IfDefendantsorPlaintiffscurrentcounselbelieve thatRALshouldalso
beresponsible
for
fees
either
under
Rule
37,
section
1927
or
the
Courts
inherent
power,
thentheyshallsoadviseRALinwritingwithinfivedaysofthisOrder.
Case 1:12-cv-22539-JG Document 368 Entered on FLSD Docket 11/10/2014 Page 32 of 33
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c. Defendants, Plaintiff and RAL may, but are not required to, file a
memorandumofnomorethan10doublespacedpages,excludingsignatureblockand
certificateof service,within 10daysof thisOrderon the subjectofwhether the fees
awardshouldbeenteredagainstLatele,RALorboth.22
DONEANDORDEREDinChambers,inMiami,Florida,November10,2014.
Copiesfurnishedto:
AllCounselofRecord
22 Inorder to facilitateRALsability to timely submitanoptionalmemorandum,
Lateles current counsel shall forthwith provide a copy of this Order to RAL
Case 1:12-cv-22539-JG Document 368 Entered on FLSD Docket 11/10/2014 Page 33 of 33