Anwar et al v. Fairfield Greenwich Limited et al

Filing 1307

ENDORSED LETTER addressed to Judge Victor Marrero from H. Eugene Lindsey dated 8/18/2014 re: Ms. Barbachano requests that the Court permit her to replead her negligence count, merely deleting the word "gross" from her existing gross negligence count, hold that suitability claims related to her entire portfolio have not been concluded, and remand her case to the Southern District of Florida. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by plaintiff Teresa Barbachano. (Signed by Judge Victor Marrero on 8/18/2014) Filed In Associated Cases: 1:09-cv-00118-VM-FM, 1:11-cv-03553-VM(tn)

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Via Facsimile
August 18, 2014

MIAMI

2699 S BAVSHORt ORM
St:Vt.NTH fLOOP-

MlAM!. FL 33133-540S

305-856-2444
305-285-9227 FAX
www.ketzberron.com

Honorable Victor Marr ro, United States District Judge
Daniel Patrick Moyniha' U.S. Courthouse
500 Pearl Street, New ork, New York 10007-1312

Re:

Anwar, et al. v_ ';:airfield Greenwich Limited, et al, Case No. 09-cv-118 (VM)(THK),
Standard Cha ered Cases; this correspondence relates to: Barbachano v. Standard
·
Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM

Dear Judge Marrero:
During the he 'ing on August 13, 2014, the Court directed the parties to submit
correspondence related 1to SCBl's argument that this Court's prior orders address and preclude
those parts of Ms. Bar '1Chano's claims related to the Jack of suitability of her entire portfolio in contrast to addressi g those parts of Ms. Barbachano' s claims related to her investment in
Fairfield Sentry. In th 't regard, SCBI relied upon language from page 8 of the Court's Order,
dated September 12, 2 2 [D.E. 937]: "[A]n inspection of the Barbachan.Q complaint shows that
what the plaintiff styli' es as an allegation of 'failure to render suitable investment advice' is
actually indistinguisha e from an allegation of negligent failure to conduct due diligence, which
war TV." For the following reasons, SCBI is wrong.
the Court dismissed in

First, the langu ge relied upon by SCBI addresses only the application of Florida's nowabrogated economic lo ,s rule to Ms. Barbachano's negligence claim. See Sept. 12, 2012 Order,
at 8 ("[I]n keeping "th the Court's application of the economic loss doctrine, Plaintiffs'
negligence claims, inc uding those of the Barbachano plaintiff, are dismissed."). Thus, Ms.
Barbachano's propose amended negligence count - which merely deletes the word "gross"
from her existing gross negligence count- adheres to this Court's May 8, 2013 Order (DE 1137].
"grant[ing] plaintiffs l ave to amend their complaints to replead negligence claims that were
previously dismissed o, disallowed on the basis of Florida's economic loss rule ...."
Second, a plai reading of this Court's September 12, 2012 Order demonstrates that it
does not address those Iparts of Ms. Barbachano' s claims related to the lack of suitability of her
entire portfolio. The ' urt's reference to Anwar IV on page 8 of its Order - the language relied
upon by SCBI and q oted above - shows that fact as in Anwar IV (826 F. Supp. 2d 578
(S.D.N.Y. 2011) [D.E.:744)) this Court addressed Standard Chartered's motion to dismiss other
plaintiffs' claims rela 'd only to Fairfield investments; no overall portfolio suitability claims
were at issue. Likewi , the first paragraph of the Court's September 12, 2012 Order states that,
"[t)his matter arises : m eight separately-filed actions ... alleging that [Standard Chartered]
violated Florida state law by recommending that /Plaintifft] invest in the {Fairfield funds],
which were in tum in 'ested in Bernard Madoffs Ponzi scheme." Sept. 12, 2012 Order, at 1-2
(emphasis supplied).
hat is the context of, and what is addressed in, the Court's Order, not
those parts of Ms. Bar achano's claims related to the lack of suitability of her entire portfolio.

'ON. SQUITER.O. FAUST. FR.IEDBER.G. ENGLISH & ALLEN. P.A.
MIAMI ·FT. LAUDERDALE

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Honorable Victor Marre: o
August 18, 2014

Page2
Third, the Court !s subsequent Order, dated October 24, 2012 [D.E. 995], rendered on Ms.
Barbachano's Amended' Complaint [D.E. 990], similarly does not address claims related to the
lack of suitability of h entire portfolio. See Oct. 24, 2012 Order at 1 ("Barbachano ...
alleg[es] that [Standard hartered] violated Florida state law by recommending that /Plaintiffs]
invest in the [Fair.fie' funds}, which were in tum invested in Bernard Madoffs Ponzi
scheme.") (emphasis su plied). It also does not dismiss (or address) her breach of fiduciary duty
and gross negligence c unts or make those counts subject to Rule 9(b), Fed. R. Civ. P., which
they are not. See id. at ,; Sept. 12, 2012 Order, at 9 (defining plaintiffs' "fraud-based claims").
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Fourth, suitabil ty is not a "generic" concept where suitability of an entire portfolio may
be conflated with prod ct-specific due diligence, and Ms. Barbachano's Amended Complaint
includes and separates ose concepts. Compare Am. Comp!. ~~ 15-28 (Fairfield) with id. at~~
29-42 (entire portfolio)' See also original Comp!.~~ 15-16 (Fairfield); id. at~~ 17-18 & 21
(entire portfolio). lnde d, during the last two years, Ms. Barbachano and SCBI have engaged in
expert discovery relate to the suitability (or Jack thereof) of Ms. Barbachano's entire portfolio.
At no time did SCBI i seek clarification of this Court's prior orders or a protective order
precluding such disco ~- Rather, SCBI, among other things, took the depositions of Ms.
Barbachano's experts d served liability and damages reports addressing the suitability of her
entire portfolio, includi g a report calculating her portfolio damages in excess of $1.7 million.
'
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Fifth, we expe t SCBI to contend that this Court's order dismissing other plaintiffs'
claims with regard tot e over-concentration of Fairfield in those other plaintiffs' portfolios, see
Sept. 12, 2012 Order at~ 1-22, dismissed sub silentio Ms. Barbachano' s claims related to the lack
of suitability of her en ire portfolio. However, the Court's order plainly does not address Ms.
Barbachano's claims i Ithis regard, and Ms. Barbachano alleges a fiduciary relationship beyond
that of a broker. Am. ompl. ,, 13-14. Also, such dismissal would be plainly incorrect under
Florida law. Maliner vi Wachovia Bank, NA., 2005 WL 670293 & *4 (S.D. Fla. 2005) (denying
bank's summary jud ent motion on investors' claims, including breach of fiduciary duty claim,
and stating that "Plain "ffs contend that Wachovia mismanaged their funds by failing to invest
them suitability and co' sistently with Plaintiffs' investment objectives and risk tolerances, all in
direct contravention of I achovia's duty of care owed as a professional investment manager").
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Finally, we res ectfully submit that the underlying issue here is not whether the Court's
prior orders address a preclude those parts of Ms. Barbachano's claims related to the lack of
suitability of her entir portfolio - they do not; rather, the issue stems from the fact that Ms.
Barbachano's case ag' inst SCBI includes claims both for lack of suitability of her entire
portfolio and those re ~ted to Fairfield Sentry. Despite that fact, Ms. Barbachano's case - at
SCBI's insistence an I over Ms. Barbachano's objection - was included in this multidistrict
litigation. Thus, for al these reasons, Ms. Barbachano respectfully requests that the Court permit
her to replead her neg igence count, merely deleting the word "gross" from her existing gross
negligence count, ho! that suitability claims related to her entire portfolio have not been
precluded, and reman Iher case to the Southern District of Florida. See MDL Order, dated May
25, 201 l, at 2 [MDL C~se No. 2088, D.E. 132] (transferring Ms. Barbachano's case \vhile stating
that, "[t]o the extent p aintiff's claims present some individual questions, the transferee judge is
well suited ... to sugg' st remand whenever he deems appropriate").

AUG-18-:014 MON 04::5 PM

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Honorable Victor Mar ero
August 18, 2014

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Respectfully submitted,
Katz Barron Squitero Faust

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