Anwar et al v. Fairfield Greenwich Limited et al

Filing 872

ENDORSED LETTER addressed to Magistrate Judge Theodore H Katz from Bradley P Smith dated 5/2/2012 re: In response to 4/27/2012 request from plaintiff Headway Investment for an order compelling Messrs. Friedman, Pages, and Hardiman to appear for a second deposition. ENDORSEMENT: The request to reopoen the depositions of Messrs. Friedman, Hardimon, and Pages is denied. The parties were advised repeatedly that there will be no second deposition sessions and Headway has not shown good cause to deviate from that understanding. (Signed by Magistrate Judge Theodore H. Katz on 5/7/2012) (cd)

SULLIVAN & CROMWELL LLP
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The Honorable Theodore H. Katz,
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Re:

Anwar v. Fairfield Greenwich Ltd., No. 09-CV-118-­
Headway Investment CO/po v. American Express Bank Ltd.

Dear Judge Katz:
I write on behalf of the Standard Chartered Defendants ("Standard
Chartered"), in response to the April 27, 2012 request from plaintiff Headway Investment
Corporation ("Headway") for an order compelling Messrs. Robert Friedman, Rodolfo
Pages and Joe Hardiman to appear for a second deposition in this action. Headway's
request should be denied.
Headway seeks to depose these witnesses for a second time in order to ask
them about a document that was produced by Standard Chartered on July 1,2011, and
marked as Defendants' Exhibit 94A ("DX 94A") during the April 18,2012 deposition of
Carlos Gadala-Maria, a former Relationship Manager ("RM") team lea er at American
Express Bank InternationaL! This exhibit also was used during the Apr 1 19,2012
deposition of Raul Mas, Headway's former RM. The exhibit and the te timonyof
Messrs. Gadala-Maria and Mas reveal that Headway's third-party inves ment advisor,
Carlos Gonzalez, initiated Headway's investment in Fairfield Sentry Lt . ("Fairfield
Sentry") as an "unsolicited trade," rather than in response to a recomme dation from
Standard Chartered. Unhappy with this evidence, Headway wants to re depose
Messrs. Friedman, Pages and Hardiman regarding DX 94A.
Since the outset of fact discovery, the Court has made cl ar (and the
parties agreed) that "no person shall be deposed more than once absent ood cause."
A copy of OX 94A, which bears document production numbers
SCB_MOL_00012423-00012424, is attached as Exhibit A.

The Honorable Theodore H. Katz

-2­

7l

(Feb. 3,2011 Second Am. Scheduling Order Regarding Standard Chartered Cases ~
Headway has not established good cause to depose any of these witnesses a second time.
Standard Chartered produced DX 94A to Headway months before any depositions took
place in these coordinated proceedings. Moreover, the Standard Chartered Plaintiffs'
Steering Committee - of which Headway's counsel is a member - represented to the
Court during the October 31, 2011 discovery conference before Your Honor that
plaintiffs would accept the risk that they would not be permitted to recall
Messrs. Friedman, Pages and Hardiman for a second deposition if they elected to focus
their depositions of these witnesses on general due diligence questions, rather than on
plaintiff-specific matters.
Headway's purported "cause" for seeking these depositions cannot be
supported. Headways asserts that Standard Chartered somehow hid DX 94A from it.
This is incorrect. Indeed, Headway mischaracterizes the manner in which discovery has
progressed in these cases. Headway did not serve its own "specific production requests"
on Standard Chartered. (Headway Letter at 5.) Rather, in accordance with the
February 4, 2011 Stipulation and Order Appointing Standard Chartered Plaintiffs'
Steering Committee (Dkt. No. 602), the Steering Committee served a common set of
document requests on behalf of plaintiffs as a group. Standard Chartered thereafter
responded to plaintiffs' document requests on a consolidated basis. The Steering
Committee was required to establish a document "depository" to which all plaintiffs
would have access (Steering Committee Order at 4), and the Steering Committee
provided Standard Chartered with instructions so that the documents it produced would
be loaded into that electronic depository.
Following the above protocols, Standard Chartered produced documents
to Headway in the same manner that it produced documents to every other plaintiff in this
litigation - by sending them to the Steering Committee through the electronic discovery
vendor designated by the Steering Committee to receive documents. Headway's repeated
assertions that DX 94A was "not produced to Headway" and was instead "dumped"
elsewhere are simply not true. (Headway Letter at 1; see also id. at 2,4.) Standard
Chartered first produced DX 94A to the Steering Committee ten months ago, on July 1,
2011. Pursuant to the parties' agreed-to production protocol, Standard Chartered
produced DX 94A with searchable text and associated metadata. In addition, on July 7,
2011, at the request of Headway's counsel, Standard Chartered produced a second copy
ofDX 94A to the electronic discovery vendor designated by the Steering Committee.
Plaintiffs deposed Mr. Hardiman on November 22,2011, Mr. Pages on January 20, 2012

2

See also Oct. 31, 2011 Hearing Tr. at 22:1-2 ("THE COURT: In any
circumstance, there is certainly going to be a presumption against a
second deposition.").

The Honorable Theodore H. Katz

-3­

and Mr. Friedman on March 22, 2012. 3 In other words, Standard Chartered produced
OX 94A to Headway and all other plaintiffs months before these witnesses were deposed.
Headway's assertion that DX 94A was "undiscoverable" by Headway
once it was produced to plaintiffs makes no sense. (Headway Letter at 1.) Headway
alleged in its complaint that Mr. Raul Mas was Headway's RM at the time Headway
invested in Fairfield Sentry. (Headway Complaint,-r 11.) A simple search of the
"SCB MOL" database for documents mentioning "Raul Mas" would have identified
16 documents of possible relevance to Headway's account, including OX 94A and
7 other documents in the same chain of email messages as DX 94A. Each of these 8
documents - amounting to 11 pages all together refers to a $4 million investment in
Fairfield Sentry in January 2003, which corresponds exactly to the amount and the timing
of Headway's initial investment in Fairfield Sentry.4 Moreover, as Headway concedes
(Headway Letter at 4 n.4), in preparing for the depositions of Messrs. Friedman, Pages
and Hardiman, Headway could have searched for documents containing any of their
names - or any documents containing all three of their names and located DX 94A.
That Headway's counsel apparently did not perform any of these searches was not of
Standard Chartered's doing.
Although Headway's lawyers appeared at the depositions of
Messrs. Friedman, Pages and Hardiman, they did not ask any of these witnesses a single
question about Headway's investments in Fairfield Sentry or Fairfield Sigma Ltd. There
is a reason for that: As the Court may recall, plaintiffs first sought to depose
Messrs. Friedman, Pages and Hardiman in October 2011. (See Standard Chartered's
Oct. 24, 2011 Letter to Your Honor at 2 n.2.) During the discovery conference held on
October 31,2011 at which Headway's counsel appeared plaintiffs stated that the
reason they wanted to depose these witnesses was that they were "involved in one fashion
or another in due diligence." (Oct. 31,2011 Hearing Tr. at 3:24-25.) Plaintiffs dismissed
as "silly" the notion that they might need to depose someone like Mr. Friedman "about
the details of [a] client's investment account." (ld. at 10:3-4.) Yet, plaintiffs went even
further than that, as the following colloquy with the Court makes clear:
MR. BRODSKY: The fact of the matter is that we are willing to take the risk,
however great or small, that your Honor will tell us go take a long walk off a short
pier if we come back [and seek to depose] anyone of these witnesses.
3

All three depositions took place at the offices of Headway's counsel in New York
or Coral Gables, Florida.

4

These eight documents bear production numbers SCB_MDL_00012423­
00012424 (OX 94A), SCB_MDL_00090389-00090390, SCB_MDL_00090391,
SCB_MDL_00090392, SCB_MOL_00I03130-00103131, SCB MOL_00I03132,
SCB_MDL_00103133, and SCB_MDL_00ll4953.

The Honorable Theodore H. Katz

-4­

Why am I willing to take a risk? Because I want to take the deposition on
November 3, come hell or high water? No. It's because I believe, in fact, these
particular witnesses are not going to be around for other purposes because the
only question from a liability point of view as a practical matter relates to what
these people knew about Madoffand Fairfield and whether they had a basis to
recommend it and what they told our clients.
THE COURT: Okay.
MR. BRODSKY: All in the nature of due diligence.
THE COURT: Okay.
MR. BRODSKY: The chances of our needing to bring back a particular witness
on a particular subject I can represent to the Court are relatively slim, and, your
Honor, if it turns out that I've been mistaken, then we'll take the risk that your
Honor will take it out on us.
(Jd. at 12:8-13:2.)

The Court should hold plaintiffs to their word. They made the conscious
strategic decision to depose Messrs. Friedman, Pages and Hardiman before deposing any
RMs. Plaintiffs also chose to focus their depositions of Messrs. Friedman, Pages and
Hardiman on general questions of due diligence and operations, rather than on whatever
knowledge these witnesses might have concerning any specific plaintiffs investments.
In these circumstances, neither Headway nor any other plaintitThas good cause to depose
these witnesses again.
Sincerely,

3Lt~
Br~;' Smith