Anwar et al v. Fairfield Greenwich Limited et al

Filing 1139

ENDORSED LETTER: addressed to Judge Victor Marrero from Bradley P. Smith dated 5/8/2013 re: Counsel for Standard Chartered Defendants write As the Court's prior ruling makes clear the economic loss rule was but one of several reasons the Court identified in declining to allow the proposed negligence claim or the proposed new factual allegations. Accordingly, Standard Chartered respectfully requests that the Court confirm that today's ruling does not permit the Maridom plaintiffs to plead their negligence claims. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the court by The Standard Chartered defendants. So Ordered. (Signed by Judge Victor Marrero on 5/10/2013) (js) Modified on 5/10/2013 (js).

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May 8, 2013

By Facsimile
Honorable Victor Marrero,
United States District Judge,
Daniel Patrick Moynihan Unjred. States Courthouse.
500 Pearl Street,
New York, New York 10007.
Re:

Anwar v. Fairfield Greenwich Ltd,
No. 09-CV-118 (S.D.N.Y.) -- Standard Chartered Cases

Dear Judge Marrero:
On behalf of the Standard Chartered Defendants ("Standard Chartered"),
thank you for your time and attention during today's telephone conference concerning the
request of plaintiffs in the Standard Chartered Cases to re-plead specific negligence
claims following the Florida Supreme Court's recent decision in Tiara Condominium
Ass 'n, Inc. v. Marsh & McLennan Companies, Inc., No. SCIO-I022, 2013 WL 828003
(Fla. Mar. 7, 2013). We write to clarify the record and the application of the Court's
ruling today with respect to Maridom Ltd v, Standard Chartered Bank International
(Americas) Lid., No.1 O-CV-920 (S.D.N.Y.) ("Maridom"),
We understand that, pursuant to the Court's ruling today, any plaintiff that
brought a negligence claim that was "dismissed or disallowed on the basis of Florida's
economic loss rule as previously applied by Florida courts" may re·plead thaI claim.
(Dkt, No. 1137.) The Court will then consider the applicability of the Tiara
Condominium decision at the summary judgment stage. We also understand that the
Court will not allow any plaintiff to plead or re-plead a negligence claim that the Court
dismissed or disallowed for reasons other than Florida's economic 105s rule, including
that the claim was not timely asserted or failed to meet the heightened pleading
requirements of Rule 9(b) of the Federal Rules of Civil Procedure.
Counsel for plaintiffs in Maridom asked Your Honor if the Court's ruling
today would permit his clients to "re-plead" their negligence claims. Co ....nsel represented
that the Court had previously denied his clients leave to bring those claims because they
would have been futile in light ofPlorida's economic loss rule. In other words, counsel

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S&C LLP 125 aD 29FL

Honorable Victor Marrero

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suggested that this Court denied the Maridom plaintiffs leave to plead negligence claims
based solely on Florida's economic loss rule. This is incorrect.
The operative Amended Complaint in Maridom does not, and never did,
assert a negligence claim. In 20) 0, the Court granted partial dismissal of the Maridom
action, but did not apply Florida's economic loss rule. Anwar v. Fair:field Greenwich
Ltd. ("Anwar 1"). 745 F. Supp. 2d 360,379 (S.D.N.Y. 2010).
Also in 2010, the Court gave the Maridom plaintiffs twenty-one days to
re-plead their claims, Anwar 1, 745 F. Supp. 2d at 379, which they did not do.
Approximately fourteen months later, the Maridom plaintiffs sought leave to file a
Second Amended Complaint. (Dkt No. 815.) In addition to adding several new claims
and factual allegations, plaintiffs also sought for the first time to add a negligence claim.
The new negligence claim was proposed to be based on various new factual allegations,
including that Standard Chartered"adopted misstatements made in the Fairfield Sentry
"Private Placement Memorandum," failed to disclose material facts, "insisted on" a
"secret" "kickback" in selling Fairfield Sentry Ltd., and failed to conduct adequate due
diligence on Sentry. (Proposed Sec. Am. CompL ~ 101; see also Apr. 22, 2013 Letter
from Maridom plaintiffs (Dkt. No. 1123) at 2 (summarizing proposed amendments).)
On April 13, 2012, the Court denied the Maridom plaintiffs' request to file
the Second Amended Complaint (Dkt. No. 853), and on June 22,2012, denied their
request for reconsideration (Dkt. No. 897). In denying reconsideration, the Court rc­
affinned that plaintiffs could not add a negligence claim for mUltiple reasons:
Finally, the Court is not persuaded that its denial of the
Maridom Plaintiffs' request to add a claim of negligence to
the Amended Complaint constituted clear error or caused a
manifest injustice. For all the reasons listed in the April
2012 Order, the Maridom Plaintiffs' have failed to show
that the delay in adding this claim was not undue and
would therefore not unduly prejudice defendants. This
result follows especially because the proposed claim relates
to allegations of a failure to conduct adequate due diligence
which already fonn the basis for the Maridom Plaintiffs'
existing breach of fiduciary duty claim. Moreover, any
such amendment would be futile, as the Court has
previous1y held that Florida's economic loss rule would bar
claims of negligence arising from professional services
governed by a contractual relationship.
(Dkt. No. 897, at 13-14 (citations omitted).)

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S&G LLP 125 BD 29FL

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Honorable Victor Marrero

As the Court's pTior ro.ling makes clear. the economic los5 rule was but
one of several reasons the Court identified in declining to allow the proposed negligence
claim or the proposed new factual allegations. Accordingly, Standard Chartered
respectfully requests that the Court confirm that roday's ro.ling does not penn it the
Maridom plaintiffs to plead their negligence claims.
Respectfully submitted.

~yp.smith
cc:

Members of the Standard Chartered Plaintiffs' Steering Committee (by E-mail)

SO ORDERED.

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