Anwar et al v. Fairfield Greenwich Limited et al

Filing 938

ENDORSED LETTER addressed to Magistrate Judge Frank Maas from Richard E. Brodsky dated 8/24/2012 re: This letter is in response to the letter sent yesterday from counsel for the Standard Chartered Defendants answering our August 20, 2012 letter. That letter requests a conference before Your Honor for the purpose of seeking an order barring the Defendants from offering expert witness testimony on certain of their defenses. ENDORSEMENT: If I were to rule now, to the extent that the Standard Chartered Defendants submit any expert reports (which I assume they will), the issue of what is proper will again arise. I prefer to deal with it once the reports are available so that the ground rules can be clearly drawn. (Signed by Magistrate Judge Frank Maas on 9/12/2012) (djc)

From: Richard E, Brodsky

I

Fax: [phone]

To: Hon, Frank Maas

USli~l R()I)SKY
DOCUMENT

,y
A lJU

-I.,

,""

RICHARD E. BRODSKY. An'ORNEY AT lAW

ELECTRONICALtY FIl.ED

DOC it:

[~~FI-.L-E-?-.:

jiJgif::: I

If

=c. w

JLuL-

lUJ'l..Y ~

k,' A:u.-,LL

~ ~~~CMr,~~.~~

VIA F.t\"'X TRANSl'vHSSION

-6

Ct-(.M.~d~~~6,~,+ ~:1

AUgUS1z~t~}- ~~' ~,,~i.,,"-=-,', 'CiAl4(.)vU-J1-­

~WULL).~\~~~

The Hon. Frank lYlaas
l~~ Lu UL- a ~
.-­
United State,s IVlagistrate Judge
\:-0 ~ ~,( ~0r ott. c..5L­
Daniel Patrick Moynihan United Stktes -,ourthouse
a...u ~~ Sse
500 Pearl Stxe~~t
~ M.R0~ ~
New York, New York 10007-1812 ~u.t-~~ /U-J~C'.~ k.<­

'"

Re:

Anwar v. F,ail,',f,ie"ld,Gre,enWiCh
No. 09-cv~ 118 (S.D.N.Y.)
Standard Chartered Cas(;!s

cQL~~f.U-;,

,

I

-',-

U~ K...t J

J'

~.

Dear .Judge :'\1aas:
I am coullsel for the J.Y[qridam Plaintiff.s anci am writing as Liaison
Counsel for the Standard Chartered Plaintiffs Steering Committee.

This letter is in response to the letter sentyesterdayfromcouns(;)l for
the Standard Chartered pefendants answering o:uxAu,gust 20, 20121etter. '
That lette,l' requ,estsa cQnference before Your Honorfor the purpose of
'
seeking a,n ordel' barring the Defendants from offering expert witness
testimony on certain of their defenses.
It is important to note that the Standard Chartered Defendants do not
dispute any of the critical points made in our August 20 letter: (i) .that the
identified "d,efenses" are, in fact, affirmative defenses; (ii) that the
Defendants. have the burden of proof on each of the defenses; al)d(iii) thatthe
Defendants were required to provide expert reports on their affinnative
defenses by August 2,2012. They simply want to postpone consid~ra.tiollof
an important issue so that they can muddy the waters before the Court can
address it.

The nub of the Defendants' letter is that "Standa.rd Chartered's expert
reports are due on October: 31, ~Ol~." This 8tatelllenL U1;ibUIllt;CI i,ht;vVl).d~;;})'v;...,.
that their expert reports will contain pure rebuttal and will not advance any
expert opinions on the ten affirmative defenses outlined in our August20,

200 S, Bl"C,Y,'

!)(}l!lL\:\RD,

~9JO

• ,\'lLuu, FLOfun', J,3n!

\'Ii W VL r f H.H!:I;(:DSJt" v 1\HTUC'vUO\j

n~6'L,2,O,n2,8

•

IIUnl.O";-;KYI.\V\HH\l.CO;V\

9

It ~l'
~

l-

From: Richard E, Brodsky

Fax: (888) 391·5819

To: Hon, Frank Maas

Fax: [phone]·6724

Page 3 of 5 8/24120124:40

HOll. Frank Mans
August 24, 2012
Page 2

2012 letter. From this assumption naturally flows the assurance that
"Standard Chartered does not intend to offer improper E~xpert testimony.. "
Let us assume that Stand,ard Chartered's future actions meet theil'
inttmtions. \Vhat this would mOtH! is that, given the Defenciants' failure to
supply any expert testimony on any issue on whieh they bear the burden,
when they refer to "improper expert testimony" they are admitting that their
expert witnesses' testimony and reports must be cabined so as "solely to
contradict or rebut evidence on the same subject matter by Plaintiffs' expert
witnesses and as to which Plaintiffs have the burden of proof," and that those
experts "not be permitted to testify to any expert opinion regarding an issue
on which Defendant[s] ha[ve] dw burden of proof l.1{abrey v, United States,
No. 2:05-CV00051RLH-GWF, 2006 \VL 18fH127, *4-5 (D. Nev. July 7,2006)
(holding that Plaintiffs would be afforded opportunity to submit reply report
to Defendant's rebuttal report).
The problem lies not in stating the proposition but in establishing

procedures designed to protect th(:i Plaintiffs from being unfairly dealt with
when the Defendants' expert reports are submitted.

This case has to do with the D(lf(mdants' having imprudently and
improperly recommended that their private banking clients invest in what
turned out to be a massive Ponzi scheme. \Ve ask the Court to consider
whether it is truly realistic to believe that the Standard Chartered
Defendants are intending to waive the opportunity to offer expert testimony
on such important (for the Defendants) defenses as:
•

intervening cause (seeond defense);

•

assumption of risk (sixth defense);

•

"contl'ibutory" negligence (seventh defense); 1

•

contractual bar (twelfth defbnBe);

•

truth-on-the-market (thirteenth defense);

Notably, the Defendants do not (and cannot) rebut the Plaintiffs'
pointing out to the Court that theF'lorida Supreme Court has long since
aband.oncd the doctrine of C0I11Tibuto1.'Y negligt;;HL;c in fino..: uf vV;lnp''-;xu..\';'....,.",
negligence, thereby requiring the Court to strike the defense of "contributory
negligence ,"

From: Ri,chard E. Brodsky

Fax: (8aS) 391-5819

To: Hon. Frank Maas

Fa,: +1 (212, 805·6724

Page 4 of 5 8124120124:40

Hon. Frank Maas
August 24, 2012
Page 3

•

reliance on third parties (fourteenth defense);

•

allocation of fault to others

(fiftE~enth

defense),2

Put differently, is it at all realistic to believe that Standard Chartered
going to go to trial with no expert testimony on any subject other than
whether they are prima facie liable for having recommfmd(~d that their
private banking clients invest in Fairfield Sentry, without any expert
testimony aimed at supporting the defenses that they should be let off the
hook because of other factors?

To ask this question is to answer it. The Plaintiffs do not believe it and
doubt that the Court, as a neutral observer, could realistically entertain that
belief, eithel', Instead, there is every reason to believe that the Defendants
will attempt to su.bmit reports that succeed in muddying the waters with
expel't reports that, no matter the labels and clever wording, seek both to
rebut our experts' reports and to support their affirmative defenses.
We eannot predict with any certainty how this will be achieved, but we
can predict with absolute certainty that the Defendants will attempt to avoid
the restriction they have now assured the Court they "intend" to obey, If,
when that oceuI'S, the burden is placed on the Plaintiffs to attempt, in effect,
to show from which egg, the brown one or the white one, this or that portion
of the yolk in a scrambled egg emerged, this will place an unfair burden on
the Plaintiffs because it will result in the Plaintiffs' expending resources and
substantial time to attempt to unscramhle the eggs. Moreover, as it presently
stands, the pretrial order provides for no rebuttal by the Plaintiffs in the
event that the Defendants attempt to inject expert testimony on their
affirmative defenses into their "rebuttal" expert reports.
Therefore, if a conference is granted, the Plaintiffs will ask the Court
to enter a common-sense order, in advance of the Defendants' providing us
their expert reports, establishing fair procedures for this very real possibility,
The requested procedures are aR follows:

L
If the Plaintiffs contend that the Defendants' reports
impermissibly include opinions on issues on which the Defendants bear the

Our listing of only some of the defenses is not meant exclude the others
listed in our August 20 letter, but merely to {()eus on those defenses that we
believe are best illustrative of our point.

l

om: Ri"ha:d E. Brodsky

Fax: [phone]

To: Hon Frank Maas

Fa.. : +1 (212, 805-6724

Page 5 of 5 8124120124:40

Hon. Frank Maa8
August 24, 2012
Page 4
burden, they will have five business days after receiving the Defendants'
reports to notify the Defendants and the Court that they so contend.
2.
In such notification, they will inform the Defendants and the
Court whethor they:
a_ will seek to exclude from expert testimony any testimony on
any issue the Defendants will have the burden of proof at trial, in which
event, in such notification, they will have the burden to set forth, in detail,
the portions of the report(s) they consider improper, while the Defendants
will then have ten business days to respond, in which the Defendants will
have the burden of showing that such testimony is proper; or
b. will submit, within thirty days of notification, reply expert
reports limited to those issues raised in the Defendants' repOl'ts they contend
are impermissible.
The undersigned counsel for the Plaintiffs has proposed this approach
to the Defendants, who have not responded. If, after sending this letter, an
agreement is reached, we will promptly notify the Court. The Plaintiffs
respectfully submit that this approach is fair to both sides and will avoid
unnecessary, complicated controversy down the line_
Thank you for your careful consideration of this letter.
Sincerely yours,
ThJ!l'odsky Law Firm

I!~~

cc:

Counsel for Standard Chartered Defendants
Members of Standard Chartered Plaintiffs' Steering Committee