Janvey et al v. Adams & Reese, No. 3:2014mc00025 - Document 35 (M.D. La. 2015)
Court Description: ORDER granting in part and denying in part Movant's 16 Motion to Disclose and OFI's 18 Motion for Protective Order. Any documents produced pursuant to Movants' document requests shall be marked and kept CONFIDENTIAL in accordanc e with the Joint Stipulated Protective Order entered in Case No. 3:12-cv-0495-B, a copy of which is attached hereto as Exhibit A. The Court finds that the Stipulated Protective Order already in place in the action pending in the Northern District of Texas complies in all respects with La. R.S. 6:103(H), and no further protective orders are necessary. Signed by Magistrate Judge Richard L. Bourgeois, Jr on 1/12/2015. (LLH)
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Janvey et al v. Adams & Reese Doc. 35 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA RALPH S. JANVEY, IN HIS CAPACITY § AS COURT-APPOINTED RECEIVER FOR § THE STANFORD INTERNATIONAL § BANK, LTD., ET AL., and the OFFICIAL § STANFORD INVESTORS COMMITTEE, § § VERSUS § § ADAMS & REESE, LLP; BREAZEALE, § SACHSE & WILSON, LLP; ROBERT § SCHMIDT; JAMES AUSTIN; CLAUDE F. § REYNAUD, JR.; CORDELL HAYMON; § THOMAS FRAZER § § MISCELLANEOUS NO. 14-25-BAJ-RLB This case is pending in the Northern District of Texas Case No. 3:12-cv-0495-B ORDER Before the Court is a Joint Motion to Disclose Information and Produce Documents From the Louisiana Office of Financial Institutions filed on September 2, 2014 by Plaintiff Ralph S. Janvey, in his capacity as court-appointed receiver for the Stanford Receivership Estate; Plaintiff the Official Stanford Investors Committee; Defendant Breazeale, Sachse & Wilson, LLP; Defendant Claude F. Reynaud, Jr.; and Defendant Cordell Haymon (collectively, “Movants”). (R. Doc. 16). The Motion to Disclose is opposed by the Louisiana Office of Financial Institutions (“OFI”), a non-party to the underlying litigation. (R. Doc. 19). Movants filed a Reply. (R. Doc. 24). Also before the Court is a related Motion for Protective Order filed on September 23, 2014 by OFI. (R. Doc. 18). Movants have filed an Opposition. (R. Doc. 24). The Court held oral argument on the two motions on December 16, 2014. (R. Doc. 30). Based on Movants’ representations that they intended to limit the scope of requested documents at issue in both motions, the Court ordered the Movants to jointly file, by December 23, 2014, an Dockets.Justia.com amended list of documents and categories of documents sought from OFI. Movants have timely supplemented their motion to compel with a modified list of requested documents. (R. Doc. 33). I. BACKGROUND This miscellaneous action was opened on April 10, 2014 when OFI moved to quash the deposition subpoenas of two OFI employees, Sidney E. Seymour (“Seymour”) and Didrea P. Moore (“Moore”). (R. Doc. 1). After a telephone conference with the Court, Plaintiffs filed a response and cross-motion seeking authorization to conduct the depositions pursuant to La. R.S. 6:103(H). The Court allowed the subpoenaed depositions to proceed pursuant to La. R.S. 6:103(H). (R. Doc. 8 at 1). The Court refused, however, to require OFI to produce a document that Plaintiffs did not seek to obtain pursuant to Rule 45 of the Federal Rules of Civil Procedure. (R. Doc. 8 at 1-2). On May 22, 2014, Defendants Breazeale, Sachse & Wilson, LLP and Claude F. Reynaud, Jr. filed their own motion to authorize the depositions of two former OFI employees, DeRee L. Allen and Gary Newport, pursuant to La. R.S. 6:103(H). (R. Doc. 10). The Court authorized the depositions pursuant to La. R.S. 6:103(H), but made no finding regarding whether the parties had complied with any requirements under the Federal Rules of Civil Procedure or any orders of the court where the action is pending. (R. Doc. 12 at 1). On July 30 and 31, 2014, Movants deposed Seymour and Moore. (R. Doc. 16 at 1). According to Movants, certain “documents were discussed that counsel for the OFI stated would not be produced without an order from the Court pursuant to La. R.S. 6:103(H).” (R. Doc. 16 at 1). Through their motion, Movants seek an order compelling OFI to produce certain documents raised in those depositions, 1 namely the following categories of documents: 1 According to OFI, the only document Movants did not have at these depositions is the 2005 OFI Report of Examination on Stanford Trust Company (“STC”). (R. Doc. 18-1 at 4-5). 2 (i) The 2005 OFI Report of Examination on Stanford Trust Company in Baton Rouge, Louisiana. (ii) Emails between and among [OFI employees] John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding any OFI report of examinations done on STC between 1998 and 2009. (iii) Written communications between and among John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding any OFI report of examination done on STC between 1998 and 2009. (iv) Working notes from John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding any OFI examination done on STC between 1998 and 2009. (v) Communications between any SEC employee and/or agent and any OFI employee and/or agent in and after June 2008 regarding STC. (vi) Deposition transcripts and witness statements, including the associated exhibits, of any employee, agent, director, or officer of STC and/or OFI relating to any OFI examination done on STC between 1998 and 2009. (R. Doc. 16 at 3-4). 2 Movants state that the foregoing “information and documents in the OFI’s possession are directly related to the claims and defenses in this suit.” (R. Doc. 16 at 3). OFI argues that the Court should not order the documents produced because (1) the Motion to Disclose does not satisfy all of the requirements of La. R.S. 6:103(H) and (2) OFI is entitled to a protective order pursuant to Rule 26(c)(1) of the Federal Rules of Civil Procedure. (R. Docs. 18, 19). At oral argument, counsel for Plaintiff represented that he had received a copy of the 2005 OFI Report of Examination on Stanford Trust Company from counsel for OFI, and that he would provide the document to Defendants. Defendants are now in receipt of the report. (R. 2 Movants have not represented that they have sought these documents and information by a subpoena issued pursuant Rule 45 of the Federal Rules of Civil Procedure. As discussed futher below, while satisfaction of the requirements pursuant to La. R.S. 6:103(H) authorize OFI to disclose certain information and documents, it does not provide federal courts with authority to compel non-parties to federal litigation to produce information and documents. 3 Doc. 33 at 1 n.1). Accordingly, Movants’ request for this document is moot as all Movants have obtained the document. Movants’ supplemental list modifies the scope of documents requested pursuant to original categories (ii), (iii), and (iv). 3 These modified categories narrow the requested time period by three years and limit the subject matter of documents sought to those concerning STC’s receipt of fees related to Stanford International Bank, Ltd. Certificates of Deposit (“SIB CDs”). As modified, Movants seek the following five categories of documents: (i) Emails between and among John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. (ii) Written communications between and among John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. (iii) Working notes from John Ducrest, Sidney Seymour, Didrea Moore, and/or Deree Allen regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. (iv) Communications between any SEC employee and/or agent and any OFI employee and/or agent in and after June 2008 regarding STC. (v) Deposition transcripts and witness statements, including the associated exhibits, of any employee, agent, director, or officer of STC and/or OFI relating to any OFI examination done on STC between 2001 and 2009. (R. Doc. 33 at 2-3). For the purposes of this Order, the Court will reference the categories of documents as numbered in Movants’ supplemental list. 3 Movants’ supplemental list removes the request made through original category (i) and does not modify the requests made through original categories (v) and (vi). 4 II. LAW AND ANALYSIS A. Authorization of Disclosure Pursuant to La. R.S. 6:103(H) Louisiana law provides OFI with certain procedural protections from disclosure of its confidential information and documents. See generally La. R.S. 6:103(H). Any party requesting OFI to produce information or documents must file a motion setting forth a concise summary of issues in the proceeding and describing the information and documents sought from OFI, serve OFI with the motion, and allow OFI a reasonable time to respond. La. R.S. 6:103(H)(1)-(3). If no other source for the information and documents is available, and upon a showing of good cause and substantial need, a federal or state court may order OFI to disclose the information and documents sought. La. R.S. 6:103(H)(4). When ordering disclosure, the court shall also enter a protective order limiting disclosure to certain individuals that must keep the information and documents strictly confidential. La. R.S. 6:103(H)(5)-(6). OFI argues that the requirements set forth in La. R.S. 6:103(H)(2) and La. R.S. 6:103(H)(4) have not been satisfied. 1. Whether La. R.S. 6:103(H)(2) is Satisfied La. R.S. 6:103(H)(2) provides that the motion seeking information and documents from OFI “shall specifically set forth a concise summary of the claims or disputes at issue in the suit or proceeding and shall describe the information and documents sought to be produced or disclosed by the Office of Financial Institutions.” OFI concedes that Movants set forth the dispute between the parties in the action pending in the Northern District of Texas. (R. Doc. 19 at 9). OFI claims, however, that La. R.S. 6:103(H)(2) is not satisfied because Movants “fail[ed] to give a concise statement of the need for the documents listed from OFI” and “failed to set forth with any specificity why the specific documents listed are needed.” (R. Doc. 19 at 9). 5 La. R.S. 6:103(H)(2) does not specifically require the moving party to set forth any details regarding the moving party’s reasons for seeking documents from OFI. In support of their Motion, Movants have set forth “a concise summary of the claims or disputes at issue in the suit.” (R. Doc. 16 at 3-4). Moreover, Movants’ supplemental list of requested documents discoverable describes “the information and documents sought to be produced or disclosed by the Officer of Financial Institutions” with relative detail. (R. Doc. 33 at 2-3). Accordingly, Movants have satisfied the requirements set forth in La. R.S. 6:103(H)(2). 2. Whether La. R.S. 6:103(H)(4) is Satisfied La. R.S. 6:103(H)(4) provides that “[w]hen no other source is available, and upon a showing of good cause and substantial need, the court may order the disclosure and production of such information or documents sought by the motion.” OFI argues that Movants have not satisfied these requirements with respect to Movants’ “request for communications between SEC employees/agents and OFI employees/agents regarding STC.” (R. Doc. 19 at 11). OFI argues that the Court should not order disclosure of documents in the possession of STC because Plaintiff Ralph Janvey, in his capacity as court-appointed receiver for the Stanford Receivership Estate, has access to all records in the possession of STC. (R. Doc. 18-1 at 1-2). 4 OFI also argues that the Court should not order disclosure of documents already produced in the Lillie litigation that are in the possession of the Movants. Categories (i), (ii), and (iii) seek OFI emails, written communications, and notes regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. (R. Doc. 33 at 2). OFI argues that Movants can obtain documents in the possession of STC through Plaintiff Ralph 4 Movants represent that responsive documents in which an employee or agent of STC was included on a communication will be a relatively small subset of documents because the “vast majority of documents and informational sought by Movants are internal OFI communications, e-mails, and working notes regarding OFI’s annual examination of STC.” (R. Doc. 24 at 2). 6 Janvey, in his capacity as court-appointed receiver for the Stanford Receivership Estate. (R. Doc. 18-1 at 1-2). Movants have not demonstrated that they are unable to obtain communications from the STC in which STC employees or agents participated. Accordingly, the Court will not require disclosure of the communications sought to the extent agents or employees of STC were included in those communications. Internal OFI documents involving only OFI employees, however, are not available from any other source that OFI. Movants have demonstrated that they have good cause and substantial need for unprivileged internal OFI emails, written communications, and notes requested. 5 Movants represent that they are seeking the documents to determine “whether OFI was aware that STC was receiving referral fees in connection with IRA accountholder investments in Stanford International Bank, Ltd. Certificates of Deposit (‘SIBL CDs’).” (R. Doc. 24 at 4). Categories (i), (ii), and (iii), as modified, are narrowly tailored to obtain documents relevant to the specific issue in the underlying litigation identified by Movants. Category (iv) seeks “Communications between any SEC employee and/or agent and any OFI employee and/or agent in and after June 2008 regarding STC.” (R. Doc. 33 at 2). Movants represent in their Opposition that “OFI’s counsel has indicated that OFI has no objection to producing communications between OFI and the Securities and Exchange Commission (“SEC”) for June 1, 2008 and February 17, 2009 – if any such communications exist.” (R. Doc. 24 at 3). The Opposition submitted by OFI suggests otherwise, however, as OFI argues that Movants have “failed to set forth any proof that these requested SEC documents are not available from the SEC.” (R. Doc. 19 at 11). Movants have not demonstrated that they are unable to obtain 5 Louisiana law allows a court to authorize the disclosure of documents by OFI to the extent Movants have demonstrated “good cause and substantial need” for those documents. La. R.S. 6:103(H)(4). The Court will separately consider, in the context of reviewing OFI’s Motion for Protective Order, whether these document requests are overly broad and unduly burdensome as required by Rule 26(c)(1) of the Federal Rules of Civil Procedure. 7 communications from the SEC on which employees or agents of the SEC participated. Accordingly, the Court will not require disclosure of the communications sought in Category (iv) pursuant to La. R.S. 6:103(H). Category (v) seeks “Deposition transcripts and witness statements, including the associated exhibits, of any employee, agent, director, or officer of STC and/or OFI relating to any OFI examination done on STC between 1998 and 2009.” (R. Doc. 33 at 3). At oral argument, Movants clarified that were in possession of the requested deposition transcripts and were only seeking 3-5 exhibits attached to the depositions of Allen and Seymour in the Lillie litigation. According to counsel for the Plaintiffs, these exhibits are internal OFI memoranda. OFI’s basis for withholding the production of these exhibits is the protective order in the Lillie litigation. As discussed below, that protective order does not prohibit production in this federal litigation. Accordingly, the Court will require production of the exhibits attached to the depositions of Allen and Seymour in the Lillie litigation. To the extent Movants are seeking witnesses statements, including the associated exhibits, of any employee, agent, director, or officer of OFI, these documents are responsive to the extent they concern STC’s receipt of fees related to SIB CDs between 2001 and 2009. Movants have not demonstrated, however, that they are unable to obtain witnesses statements and associated exhibits concerning any employee, agent, director, or officer of STC. Accordingly, in response to Category (v), the Court will only require production of (1) the exhibits attached to the depositions of Allen and Seymour in the Lillie litigation, and (2) any witnesses statements, including the associated exhibits, of any employee, agent, director, or officer of OFI regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. 8 B. OFI’s Motion for Protective Order Pursuant to Rule 26(c)(1) OFI has moved for a protective order pursuant to Rule 26(c)(1) of the Federal Rules of Civil Procedure. The Court may issue an order, for good cause shown, to protect “a party or person from annoyance, embarrassment, oppression, or undue burden or expense. . . .” Fed. R. Civ. P 26(c)(1). The Court may limit the extent of discovery to the extent “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.” Fed. R. Civ. P 26(b)(2)(C). OFI raises two primary arguments in support of its request for a protective order pursuant to Rule 26(c)(1). (R. Doc. 18). These arguments are more thoroughly discussed in OFI’s Opposition to Movants’ Motion to Disclose. (R. Doc. 19). First, OFI argues that the original request is overly broad and production will be unduly burdensome and expensive because the time period requested (1998 through 2009) is too broad and OFI’s previous productions in the Lillie litigation (which concerned documents from 2005 through 2009) was an extensive undertaking. (R. Doc. 18-1 at 5; R. Doc. 19 at 10-14). Second, OFI argues that certain internal documents are protected from production on the basis of the deliberative process privilege (and other privileges). (R. Doc. 18-1 at 5; R. Doc. 19 at 14-16). 1. Overbreadth and Undue Burden OFI argues that Movants’ requests for OFI’s internal documents are overly broad and production would be unduly burdensome. OFI discusses at length in its Opposition the costs involved in a similar document collection and production in the Lillie litigation covering the period of January 1, 2005 through February 2009. (R. Doc. 19 at 12-14). According to OFI, this production involved the collection of approximately 25,000 documents and OFI personnel and 9 counsel spent “several hundred hours” engaging in document review and privilege log preparation. (R. Doc. 19 at 13). OFI represents that compliance with discovery sought in this action would be “equally as time consuming” because the time period for requested information is seven years longer and the OFI employee primarily responsible for the initial gathering of documents in the Lillie litigation is now retired. (R. Doc. 19 at 14). OFI also represents that it has a seven-year retention policy on certain documents and may not have all of the documents requested. (R. Doc. 18-1 at 5-6). The likely benefit of the documents to the underlying litigation outweighs the burdens of production placed on OFI. First, at oral argument, counsel for OFI represented that he had possession of all hard copy documents responsive to Movants’ original requests in approximately 15-16 boxes. The underlying litigation concerns losses to investors exceeding $300,000,000. Requiring OFI to review 15-16 boxes of documents prior to production does not constitute an undue burden considering the significant amount at issue in the underlying litigation. Finally, Movants have limited the scope of requested documents by narrowing the requested time period by three years and narrowing the scope of responsive subject matter. This narrower scope of documents significantly reduces any potential burden to OFI. 6 The Court will authorize the production of internal OFI documents sought by Movants’ in their supplemental categories (i), (ii), and (iii). The Court encourages OFI and the parties to this lawsuit to negotiate appropriate search terms and date ranges that will retrieve the specific information sought, particularly with regard to electronically stored information. 6 OFI suggests that a narrower scope of requested documents actually increases its burden because a more detailed review of documents will be required. The Court rejects this argument. Taken to its logical extreme, an entity could argue that the request for a single document creates an “undue burden” where the entity has poor organization of records. 10 2. Privileges OFI argues that the deliberative process privilege, as well as the attorney-client privilege and other privileges, will apply to many of the documents sought by Movants. (R. Doc. 19 at 1416). OFI further informs the court that the Louisiana Supreme Court ordered the trial court in the Lillie case to conduct an in camera review of certain documents withheld by OFI in that action to determine which documents must be produced. (R. Doc. 19 at 13-14). 7 Movants acknowledge “that the deliberative process privilege likely applies to some OFI internal communications” but argue that the privilege would be limited to internal communications “from the date OFI’s field examiner begins its examination of STC until the date the Commission of OFI issues its final examination report.” (R. Doc. 24 at 6). Movants further note that OFI has not produced a privilege log. (R. Doc. 24 at 7). The Court does not fault OFI for not producing a privilege log prior to a ruling on Movants’ Motion to Disclose and in the apparent absence of any issued subpoena. The issue of whether any of OFI’s documents are privileged will be best addressed after OFI has provided a detailed privilege log for responsive documents and the parties have had an opportunity to review that privilege log. That OFI has already created such a privilege log for the production in the Lillie case should streamline OFI’s task. C. The Protective Order in the Lillie Litigation OFI and the parties have indicated that some of the documents requested may be subject to a protective order in Lillie, et al. v. Stanford Trust Co., et al., Docket No. 581670, in the 19th Judicial District Court, Parish of East Baton Rouge, State of Louisiana. The protective order in the Lillie case only governs the exchange of documents in that litigation and does not restrict disclosure of documents to parties in this action, particularly when the documents at issue are 7 See Lillie v. Stanford Trust Co., 68 So.3d 514 (La. 2011). 11 pre-existing and independently discoverable. See Readlyn Tel. Co. v. Qwest Commc'ns Corp., No. 4:10-CV-00218, 2013 WL 3471163, at *2 (N.D. Iowa July 10, 2013) (“Ordinarily a protective order issued by one forum restricting disclosure of documents does not restrict disclosure in another forum where the documents are independently discoverable under the rules of the second forum in proceedings pending in that forum.”). Documents produced by OFI in state court pursuant to a protective order in state court are not insulated from production in this proceeding simply by virtue of their prior production. 8 There is nothing in La. R.S. 6:103(H) to suggest that documents may only be produced once and therefore only the first court authorizing production may allow any subsequent production. Taken to its extreme, OFI’s position would require that initial court to serve as de facto custodian of records, weighing in on every case that could potentially involve the same documents, without limitation of date or jurisdiction. To the extent OFI is concerned about confidentiality issues, the protective order issued in this case preserves confidentiality in the federal litigation in the same manner as the protective order in the Lillie case preserves confidentiality in the state litigation. As this Court has already found, the protective order in this case likewise satisfies the requirement of La. R.S. 6:103(H)(5). D. Absence of a Rule 45 Subpoena Movants have informed the Court that the documents they have requested from OFI have not been sought pursuant to Rule 45 of the Federal Rules of Civil Procedure. Authorization of the production of documents by OFI pursuant to La. R.S. 6:103(H) presupposes the existence of 8 If the documents sought by Movants were obtained by OFI in the Lillie action pursuant to the protective order, then the protective order in the Lillie action would perhaps preclude OFI’s production of those documents. See, e.g., On Command Video Corp. v. LodgeNet Entm't Corp., 976 F. Supp. 917, 922 (N.D. Cal. 1997) (“By using such information to file a separate lawsuit in another forum, plaintiff violated the plain terms of the Protective Order.”). 12 a valid subpoena or other legal process. See La. R.S. 6:103(A) (suggesting that requirements in Subsection H merely subjects OFI’s confidential “records and reports” to “subpoena or other legal process”). Although this Order authorizes OFI to produce certain documents, the Court will only compel the production of those documents (if OFI refuses to do so) pursuant to a properly issued Rule 45 subpoena consistent with the production authorized by this Order. III. CONCLUSION The Court will issue an Order pursuant to La. R.S. 6:103(H) directing the disclosure of documents responsive to Movants’ supplemental categories (i), (ii), and (iii), with the exception of any non-internal communications involving the STC. The Court will not direct the disclosure of documents responsive to category (iv) because Movants have not demonstrated that the documents sought are not available from the SEC. With regard to category (v), the Court will only direct the disclosure of the following responsive documents not available from the STC: (1) the exhibits attached to the depositions of Allen and Seymour in the Lillie litigation, and (2) any witnesses statements, including the associated exhibits, of any employee, agent, director, or officer of OFI regarding STC’s receipt of fees related to SIB CDs between 2001 and 2009. For the foregoing reasons, IT IS ORDERED that the Movants’ Motion to Disclose (R. Doc. 16) is GRANTED in part and DENIED in part, as set forth in this Order. While the Court authorizes the disclosure and production of documents described above pursuant to La. R.S. 6:103(H), the Court makes no finding regarding whether the parties have otherwise complied with any requirements under the Federal Rules of Civil Procedure or any orders of the court where the action is pending. 13 IT IS FURTHER ORDERED that the OFI’s Motion for Protective Order (R. Doc. 18) is GRANTED in part and DENIED in part, as set forth in this Order. The parties shall bear their own costs. IT IS FURTHER ORDERED that any documents produced pursuant to Movants’ document requests shall be marked and kept “CONFIDENTIAL” in accordance with the Joint Stipulated Protective Order entered in Case No. 3:12-cv-0495-B, a copy of which is attached hereto as Exhibit A. The Court finds that the Stipulated Protective Order already in place in the action pending in the Northern District of Texas complies in all respects with La. R.S. 6:103(H), and no further protective orders are necessary. S Signed in Baton Rouge, Louisiana, on January 12, 2015. RICHARD L. BOURGEOIS, JR. UNITED STATES MAGISTRATE JUDGE 14
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