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Newman v. Mayer Brown, LLP

Florida Court of Appeals, Fourth District

July 25, 2018

DANIEL S. NEWMAN, etc., et al., Petitioners,
MAYER BROWN, LLP, et al., Respondents.

         Not final until disposition of timely filed motion for rehearing.

          Petition of writ of certiorari to the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Joseph Murphy, Judge; L.T. Case No. 10-49061.

          Leo B. Reus, Scot C. Stirling and Robert O. Stirling of Beus Gilbert PLLC, Phoenix, and Stuart Z. Grossman and Rachel W. Furst of Grossman Roth Yaffa Cohen, P.A., Coral Gables, for petitioners.

          Eugene K. Pettis and Debra P. Klauber of Haliczer, Pettis & Schwamm, Fort Lauderdale, for respondents.

          FORST, J.

         Petitioner Daniel Newman ("the Receiver") seeks certiorari review of a non-final order that granted Respondent Mayer Brown, LLP's motion to compel discovery with respect to thirty-eight nonparties. Below, Newman was appointed as a receiver for these thirty-eight investor entities and individuals ("Assignors"), which all contractually assigned their claims against Mayer Brown to the Receiver. The latter is the plaintiff, and Mayer Brown is one of the defendants in the underlying action.[1] During discovery, Mayer Brown moved to compel the Receiver to produce documents and comply with deposition requests concerning the Assignors. The trial court granted the motion and the Receiver filed the instant petition for writ of certiorari, arguing that the trial court erred in compelling discovery because the Assignors were nonparties and thus could not take part in discovery without a subpoena. As set forth below, we deny the petition.


         In May 2009, Newman was appointed by the United States District Court for the Middle District of Florida as a receiver for claims of securities fraud filed by four hedge funds ("Founding Partners") and for the Founding Partners Capital Management Co. ("FPMC").[2] The federal court order appointing the Receiver gave him authority to assert claims "for the benefit and on behalf of" the four funds and "their investors and other creditors," i.e., the Assignors.[3] Newman filed suit against Mayer Brown, a law firm, which allegedly facilitated the fraud.[4] The suit was filed by Newman both in his capacity as Receiver for the funds and as the "Assignee" of claims belonging to thirty-eight individual or entity investors in the funds.

         Both parties filed discovery requests. At issue is Mayer Brown's request for the production of privilege logs by the nonparty Assignors and its request that the Assignors appear for deposition. The Receiver refused to comply with these discovery requests, arguing that he did not represent the Assignors and that they are not parties to this action. He further claimed he was not in custody, possession or control of the Assignors' documents and could not force the Assignors to produce documents or appear for depositions.

         Mayer Brown filed a motion to compel compliance with its discovery requests, arguing at the subsequent hearing that "a defendant who is sued on an assigned claim may not be subjected to a greater discovery burden than if the claim had not been assigned." The assignment agreements entered into by the Receiver with each of the thirty-eight Assignors are central to Mayer Brown's contention that the assignments provide benefits to the Assignors, as each assignment states that "any recoveries made on [the Receiver's] Claims [related to the individual assignor's investment in the funds] shall benefit all creditors and investors . . . to the extent determined appropriate by the Receiver or directed by the Court . . . ." Mayer Brown furthermore noted that the Assignors "agree[d] to provide reasonable cooperation and assistance to the Receivers' (sic) legal counsel and/or the Receiver in connection with the Claims" and set forth details of this cooperation and assistance, including an agreement to appear for deposition and "delivering a sworn or written statement of facts known to Assignor."

         Newman responded that the Assignors were not parties and Mayer Brown should therefore use subpoenas and "discovery devices that are appropriate for non-parties."

         The trial court granted Mayer Brown's motion to compel. The order states that the Assignors "shall be treated as parties to the case for discovery purposes in producing documents and appearing for deposition . . . with the same protections and obligations applying to the Assignors as apply to [the] parties." (emphasis added). The Receiver filed the instant petition seeking certiorari review of the order.


         "[R]eview by certiorari is appropriate when a discovery order departs from the essential requirements of law, causing material injury to a petitioner throughout the remainder of the proceedings below and effectively leaving no adequate remedy on appeal." Allstate Ins. Co. v. Langston, 655 So.2d 91, 94 (Fla. 1995). The critical inquiry for jurisdictional purposes is whether the order "creates material harm irreparable by postjudgment appeal." Bared & Co. v. McGuire, 670 So.2d 153, 156-57 ...

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