Opinion
CIVIL ACTION 13-373-SDD-EWD
11-13-2018
FIREFIGHTERS' RETIREMENT SYSTEM, ET AL v. CITCO GROUP LIMITED, ET AL
RULING
I. Factual and Procedural Background
Before the Court are Plaintiffs' Objections to the Ruling Dated May 10, 2018, appealing the Magistrate Judge's Ruling that denied Defendants' Motion to Compel Deposition Responses from Ermanno Unternaehrer. The Citco Defendants ("Defendants") have filed a Memorandum in Opposition. After considering the arguments of the Parties, the Magistrate's Ruling, and the law, the Court, for the following reasons, affirms the ruling of the Magistrate and denies the Plaintiffs' appeal.
Rec. Doc. No. 667.
Rec. Doc. No. 659.
Rec. Doc. No. 574.
Rec. Doc. No. 677.
At issue is the Magistrate Judge's May 10, 2018 Ruling, which denied the Plaintiffs' Motion to Compel deposition responses from the 30(b)(6) representative of the Citco Group. Plaintiffs argue that, in its corporate deposition, Citco Group failed to adequately respond to questions regarding conflicts of interest between any Citco entity and the investors. In a well-reasoned opinion, the Magistrate Judge denied the Plaintiff's discovery motion. The Magistrate Judge's Ruling is hereby affirmed for the following reasons.
Rec. Doc. No. 574.
Rec. Doc. 659.
Id.
II. The Standard of Review
Magistrate Judges are afforded broad discretion in ruling on discovery matters. A Magistrate's order on non-dispositive matters may only be reconsidered where it has been shown that the Magistrate Judge's order is clearly erroneous or contrary to law. Factual findings are reviewed under a clearly erroneous standard and legal conclusion are reviewed de novo.
28 U.S.C. § 636(b)(1)(A); Wilkerson v. Stalder, 2011 WL 4433829, at *1 (M.D. La. Sept. 22, 2011).
Id.; Fed.R.Civ.P. 72(a). Moore v. Ford Motor Co., 755 F.3d 802, 806 & n. 6 (5th Cir. 2014).
Moore, 755 F.3d at 806 & n. 7, citing Alldread v. City of Grenada, 988 F.2d 1425, 1434 (5th Cir.1993). A.M. Castle & Co. v. Byrne, 123 F.Supp.3d 895, 898 (S.D.Tex., 2015)
III. The Magistrate's Ruling
The issue before the Magistrate was the responsiveness of Citco Group's corporate deposition responses to Subject 26 of the 30(b)(6) Notice of Deposition which requested "[a]ny internal policies and procedures relating to the disclosure of known conflicts of interest between any Citco entity and the investors in any fund that CFS Cayman serves as administrator."
Rec. Doc. No. 574-2, p. 5.
Plaintiffs complained that counsel for Citco Group instructed its corporate representative to not answer questions "about Citco's conflict of interest policy and whether it violated Citco's policy for Citco affiliates to receive compensation from the proceeds of an offering of an issuer of which CFS Cayman serves as the independent administrator and not disclose to the purchaser of the securities the amount of funds those Citco affiliates received."
Rec. Doc. No. 584-2, pp. 4-5.
The Magistrate succinctly and correctly identified the issue in dispute as follows: "[t]he disagreement regarding [Citco Group's] deposition comes down to (1) whether he should be required to testify as to subsidiary Citco entities. . . (2) whether the corporate representative should be required to answer questions regarding whether [hypothetical] scenarios presented by Plaintiffs would violate conflict of interest policies."
Rec. Doc. No. 659, p. 16.
Regarding the scope of the deposition as noticed, the Magistrate Judge found that "Subject 26 as originally noticed [was] overly broad and unduly burdensome and, therefore, not proportional to the needs of the case." The Court reasoned that "questions regarding an affiliate's conflict of interest policies and procedures are more appropriately directed to the affiliate in question." The Court finds no clear error in this conclusion. The Magistrate Judge noted that the 30(b)(6) notice to one of the Citco Group affiliates, CFS Cayman included a substantially similar topic.
Id.
Id.
Id.
Regarding the hypothetical conflict of interest questions directed to Citco Group's corporate representative, the Magistrate concluded that asking whether a hypothetical scenario constitutes a conflict of interest veers into the realm of asking for expert opinion and calls for legal conclusions. This Court agrees. The Magistrate's ruling was well supported by case law of persuasive authority. Furthermore, the question of what circumstances may give rise to a conflict of interest is arguably a legal question and thus improper for a lay witness to testify about, under the well-settled law of this Circuit. The Court finds no clear error in the Magistrate's Ruling. Thus, Plaintiffs' appeal is DENIED and the Magistrate Judge's Ruling is AFFIRMED.
Rec. Doc. No. 659, p. 10, n. 32.
See Rec. Doc. No. 659, n. 33 and 34.
Rec. Doc. No. 667.
Rec. Doc. No. 659.
IV. CONCLUSION
For the reasons set forth above, the Plaintiffs' Objections to the Ruling Dated May 10, 2018 is DENIED and the Magistrate Judge's Ruling is hereby AFFIRMED.
Rec. Doc. No. 667.
Rec. Doc. No. 659. --------
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on November 13, 2018.
/s/ _________
CHIEF JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA