Anwar et al v. Fairfield Greenwich Limited et al

Filing 1055

RESPONSE re: #1045 Order,,, Standard Chartered's Response to Plaintiffs' Objection to the Magistrate Judge's Order of February 15, 2013. Document filed by Standard Chartered Bank International (Americas) Limited, Standard Chartered International (USA) Ltd., Standard Chartered PLC, Standard Chartererd Bank. (Attachments: #1 Exhibit Exhibit 1, #2 Exhibit Exhibit 2, #3 Exhibit Exhibit 3, #4 Exhibit Exhibit 4, #5 Exhibit Exhibit 5, #6 Exhibit Exhibit 6)(Nelles, Sharon)

EXHIBIT 4

Case 1:09-cv-00118-VM-FM Document 1020

Filed 01/10/13 Page 1 of 2

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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PASHA S. ANWAR, et aI.,
Plaintiffs,

ORDER

-against­
09 Civ. 118 (VM) (FM)
FAIRFIELD GREENWICH LTD, et aI.,
Defendants.
This Document Relates to the
Standard Chartered Cases

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FRANK MAAS, United States Magistrate Judge.
The Standard Chartered Cases involve actions brought by private banking
clients who are suing the Standard Chartered Bank International, Ltd. ("Standard
Chartered") for damages allegedly arising out of Standard Chartered's recommendation
that its clients invest in Fairfield Sentry or Fairfield Sigma, both of which were Madoff
"feeder funds." The Standard Chartered Cases have proceeded independently from other
cases consolidated in this action, and a separate scheduling order was entered, requiring,
in pertinent part, that, within thirty days of the completion of fact discovery, expert
reports be served "regarding ... each issue [as] to which a party bears the burden of proof
at trial." (ECF No. 602 ~ 12). Rebuttal reports were to be served within forty-five days
thereafter.
At the first stage of the process, the plaintiffs submitted two expert reports
and Standard Chartered submitted none. Standard Chartered then timely submitted two
rebuttal reports, parts of which discussed Standard Chartered's alleged reliance on third­
parties in performing due diligence regarding Fairfield Sentry.
The plaintiffs contend that the issue of reliance on third-parties is an
affirmative defense as to which Standard Chartered bears the burden of proof and, thus,
under the terms of the scheduling order, was not a proper subject for a rebuttal report.
They argue that Standard Chartered therefore should have submitted its expert opinions as
to this issue at the time when its expert reports were due, and that Standard Chartered's
failure to do so "games the system and has put the [p]laintiffs at an unfair, and wholly
improper, disadvantage." (Letter to the Court from Richard E. Brodsky, dated Dec. 21,
2012 ("Brodsky Dec. 21 Let."), at 1). To remediate this harm, the plaintiffs seek an order
striking from the rebuttal reports any reference to Standard Chartered's reliance on third
parties and barring its experts from testifying about that subject.

Case 1:09-cv-00118-VM-FM Document 1020

Filed 01/10/13 Page 2 of 2

Judge Marrero previously decided that the state law claims in this case are
governed by Florida law. Anwar v. Fairfield Greenwich Ltd., 745 F. Supp. 2d 360, 369
(S.D.N.Y. 2010). In their submissions, the plaintiffs have been unable to identify any
case suggesting that the issue of reliance on third-parties necessarily must be pleaded as
an affilmative defense under Florida law. Moreover, it appears that the plaintiffs opened
the door for Standard Chartered's rebuttal concerning this issue, since their own experts'
reports discuss Standard Chartered's reliance on certain third parties, albeit in the context
of "analyzing [Standard Chartered's] anticipated defensive claim." (Brodsky Dec. 21 Let.
at 5 nA). The plaintiffs also have failed to identify any concrete harm that they have
suffered as a consequence of Standard Chartered's allegedly improper submissions.
I therefore decline to strike the relevant portions of Standard Chartered's
expert reports or to bar them from introducing testimony regarding reliance on third
parties. The plaintiffs, however, shall be permitted to serve one or more reply expert
reports limited to the issue of Standard Chartered's reliance on third-parties.

The plaintiffs' reply reports must be served by February 8, 2013.
SO ORDERED.
Dated:

New York, New York
January 9, 2013

------,
Uni

Copies to:

Hon. Victor Marrero
United States District Judge
All counsel (via ECF)
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