truth or consequences order

8/10/2019 Truth or Consequences Order

1/33

UNITEDSTATESDISTRICTCOURT

SOUTHERNDISTRICTOFFLORIDA

MIAMIDIVISION

CASENO.1222539CIV GOODMAN

[ConsentCase]

LATELETELEVISION,C.A.,

Plaintiff,

v.

TELEMUNDOCOMMUNICATIONS

GROUP,LLC,etal.,

Defendants.

_____________________________________/

ORDERONDEFENDANTSMOTIONTODISMISS

FORLACKOFSUBJECTMATTERJURISDICTION

ORFORFAILURETOCOMPLYWITHCOURTORDERS

Duringmany

years

between

1950

and

1988,

CBS,

NBC

and

others

involved

in

the

syndicationindustrybroadcastthetelevisiongameshowTruthorConsequences.The

longrunningshow involvedcontestantsselectedfrom thestudioaudiencewhocould

either tell the truth (i.e., correctly answer a question) or be forced to pay the

consequences(i.e.,performastunt,usuallywackyorzany).Severalpersonalitieshosted

theshow

over

the

years,

but

Bob

Barker

(who

also

hosted

The

Price

is

Right

from

Case 1:12-cv-22539-JG Document 368 Entered on FLSD Docket 11/10/2014 Page 1 of 33


2/33

2

19722007)hadthelongestreign,from1957to1975.Mr.Barkerssignoffendedwith

thephrase,Hopingallyourconsequencesarehappyones.1

In the instant copyright infringement case, Plaintiff, Latele Television, C.A.

(PlaintifforLatele)didnottellthetruthindiscoveryanditnowmustconfrontthe

consequences.Unlike theconsequencesenvisioned inMr.Barkers finalcomments to

thegameshowtelevisionaudience,however,theconsequencesherewillnotbehappy

for Plaintiff.On the other hand, the consequenceswill fall short of the fullfledged

happinessurgedbyDefendants.2

DefendantswantthisCourttodismissthiscopyrightinfringementactionforlack

of subjectmatterjurisdictionbecause of apurported lack of standing.Alternatively,

theyask for themostextreme sanction available dismissal for failure to comply

withCourtorders concerningdiscovery (i.e., fornotbeing truthfulaboutdocuments

andinformation

which

should

have

been

produced

in

response

to

discovery

requests

andCourtorders).

Focusingonthefirstargumentfordismissal,theCourtcannotnowdismissthe

caseforlackofstandingbecauseDefendantsargumentdependsoncontestedfacts.The

1

Archive

of

American

Television,

Truth

or

Consequences,

http://www.emmytvlegends.org/interviews/shows/truthorconsequences (last visited

November7,2014).

2 The Defendants in this action include Telemundo Television Studios, LLC,

Telemundo Studios Miami, LLC, Telemundo Network Group, LLC, Telemundo

Internacional,LLC.Together,theDefendantsareeitherreferredtoasDefendantsor

TelemundointhisOrder.



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3

UndersignedisnotgoingtosimplychoosesidesandpickDefendantsviewofthefacts

anddisregardPlaintiffsviewinorder toconcludethatPlaintifflacksstandingand to

thenenterarelateddismissalorder.

Defendantscontend thatPlaintiff lacksstanding topursue thisclaimbecause it

didnotownthecopyrightatissueonthedateitfiledthislawsuit.[ECFNo.166,p.1].

Specifically,theyarguethatPlaintiffassigneditsrights firsttoitsprincipal,Fernando

Fraiz,andthentoanotherentityheowns,LateleProductions,Inc.(LateleU.S.).[Id.at

pp. 35]. But there is a significant factual dispute as to the effectiveness of those

assignmentsand,assuming thatPlaintiff in factassignedaway thecopyrightat issue,

whether those assignmentswere, for allpracticalpurposes, rescinded (orundone or

reversed or corrected all terms used by the parties, witnesses and counsel in

evidentiary hearings and posthearing memoranda). The Court does not believe it

prudentto

wade

into

this

murky

factual

morass

and

unilaterally

make

credibility

assessments. Cf. DominionAssets LLC v.Masimo Corp.,No.12cv02773BLF, 2014WL

2937058 (dismissing patent infringement lawsuitwithout prejudicebecause Plaintiff

assigneditspatentrights,didnotprovemutualrescissionoftheassignmentagreement

anddidnotsufficientlyexplainwhytheassigneedemandedmaterialtermsaboveand

beyondmererescission).3

3 Incontrast toDominionAssets,all theparties involved in theassignmentshere

contendthattheassignmentsarenotvalid,werenotintendedtogiveupthecopyright

atissueandwereinanyeventlatercorrectedbyanotheragreement.



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4

Because the Court cannot simply dismiss the case on the subject matter

argument, the only remaining issue (and it is a significant one, tobe sure) is the

argumentfordismissal triggeredbysubstantialdiscoveryviolations.[ECFNo.166,p.

1].

Basedontherecordevidencepresented,theUndersignedisnotgoingtodismiss

thecase (orenteradefaultagainstPlaintiff) fordiscoveryviolationseither.However,

because Plaintiff failed to produce relevant documents responsive to discovery

requests, provided an incorrect or significantly misleading interrogatory answer,

submitted a false or substantially incorrect declaration, provided incorrect or

misleadingdepositiontestimonyandnever timelyadviseditsowntrialcounselabout

significanttransactionswhichmightaffectitsstandingtoprosecutethiscase,theCourt

will be generating consequences relief, albeit short of dismissal or default, to

Defendants.

Specifically,theconsequencesaredesignedtoaddresstheprejudicegeneratedby

Plaintiffs discovery shortcomings.Therefore, this case isbeing taken off of the trial

calendar in order to give Defendants the opportunity to take additional discovery

concerningcertaindocumentswhichPlaintifffailedtotimelyproduce.BecausePlaintiff

generated theneed toobtainmorediscovery, it isonly theDefendantswhoarebeing

permitted to pursue additional discovery after expiration of the discovery deadline.

Plaintiff will be required to pay the attendance fees for court reporters and

videographersusedatanynewdepositionsscheduledbyDefendantsand itwillneed



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5

topaythetravelcostsforonedefenseattorneyifanyofthedepositionsaretakenoutof

town.Plaintiffwillneed topay theseexpenseswithin30daysofreceivingan invoice

from Defendants. In addition, the Court is awarding Defendants attorneys fees in

connectionwiththeinstantmotiontodismiss.[ECFNo.166].

Finally, if theadditionaldiscovery (orotherevidenceobtainedbyDefendants)

establishesthatPlaintifffraudulentlymanufacturedandpostdatedacriticaldocument

(the socalledAddendum) inorder toavoid thedismissalDefendants seek in their

motionforlackofstanding,thentheCourtwillentertainanotherdismissalmotionfor

fraudon thecourt/intentionalbadfaithdiscoveryabuse.Likewise, iftheUndersigned

concludes thatPlaintiffdestroyed relevantevidenceafteraduty topreserveevidence

wascreated,thentheCourtwillalsoconsideranotherdefensefileddismissalmotion.4

I.

FactualBackgroundConcerningDiscovery

Inits

Complaint,

Latele

alleges

different

types

of

copyright

infringement

by

Defendantsof thepopularMariaMaria telenovela,aSpanishlanguagesoapopera. In

particular, theworks at issue are 198 episodes of television programming allegedly

ownedbyLatele,originallyairingin1989,and178episodesoftelevisionprogramming

4

Basedon

events

occurring

after

the

filing

of

its

dismissal

motion,

Defendants

are

alsoseeking[ECFNo.358]anordercompellingPlaintifftohireanindependentforensic

computerexperttoattempttorecovermetadataandotherdocumentsfromcomputers

andotherelectronicmediausedbyPlaintiffanditsagents,includingattorneys,inApril

2012. That request is scheduled for a discovery hearing onNovember 21, 2014. The

detailsandsignificanceoftheelectronicallystoredinformationatissueinDefendants

requestwillbeoutlinedlaterinthisOrder.



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6

allegedly aired by Defendants. El Rostro de Analia (El Rostro) is the allegedly

infringing work. Latele alleges that Defendants hired the author ofMariaMaria to

developElRostro,atelenovelawhichLateleallegesissosimilartoMariaMariathatthe

public and press have designated it as a remake or retelling. Lateles threecount

Complaint pursues claims for copyright infringement, contributory copyright

infringementandvicariouscopyrightinfringement.[ECFNo.1,pp.1522].

James Sammataro, of Stroock & Stroock & Lavan (SSL), Plaintiffs initial

counselofrecord,signedandfiledthelawsuit.[ECFNo.1,p.24].AtanAugust2021,

2014evidentiaryhearing (theEvidentiaryHearing)designed todeterminewhether

certainprivilegeddocumentsinRALspossessionshouldbeproducedtoDefendantsin

responsetoadiscoverysubpoena,hetestifiedthatRobertAllenLaw(RAL)wasthe

conduit fornearlyalldocumentsand informationhe received fromPlaintiff.5 [ECF

No.324,

p.

24].

This

included

documents

and

information

related

to

Plaintiffs

discovery responses. [Id.].RALwasPlaintiffs outside general counsel andprovided

significantassistancetoSSLinthislitigation.[Id.at25].Inparticular,PeggyGarcia,an

RALattorney,coordinatedtheproductionofdocumentsandinformationgiventoMr.

Sammataro.[Id.atpp.2425,116].

Neither Plaintiff, nor RAL, ever disclosed critical copyright transfers,

negotiationsleadinguptotheexecutionoftransferdocuments,orrelateddocumentsto

5 The Evidentiary Hearing was held, in part, to obtain evidence concerning

Defendants argument that the crimefraud exception generated a waiver of the

attorneyclientprivilegefortheRALdocuments.



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7

SSLdespiterepeated,directinquiriesduringSSLsinvestigationoftheComplaintand

preparationofresponsestodiscovery.Asdescribedbelow,Mr.Sammatarodidnotsee

several key documents until they were included as exhibits to Defendants instant

motion todismiss, filedonMarch31,2014. [ECFNo.324,pp.3942].Healsohadno

knowledgeof those transactionsbeforeDefendants filed theirdismissalmotion (long

afterhewasnolongerinvolvedinthiscase).[Id.].

Ms.GarciagraduatedfromlawschoolinDecember2008.[ECFNo.325,pp.58

59]. Shebegan working at RAL inJanuary of 2010. [Id.]. She has never done any

litigationwork.[Id.].RALhasthreefulltimelitigationattorneysandoneattorneywho

doesbothlitigationandrealestatelaw,butsheneverconsultedwithanyofthemabout

thediscoveryrelatedassistancesheprovidedtoPlaintiffLateleandtheSSLfirminthis

case.[Id.atpp.5861].Beforethislawsuit,Ms.Garcianeverhelpedclientsinreviewing

proposedinterrogatory

answers,

reviewing

proposed

responses

to

document

requests

orreviewingotherresponsestodiscovery.[Id.].

Notwithstanding this lack of litigation experience,Ms.Garcia testified at the

Evidentiary Hearing that she reviewed discovery responses with Fernando Fraiz,

Plaintiffsprincipal,andwasawareofdocumentsexecuted inApril2012 transferring

MariaMaria first toMr. Fraiz (the FirstAssignment), and then toLateleU.S. (the

SecondAssignment).6[Id.at pp. 58- 62].Ms.Garciadraftedandnotarizedsomeofthe

6 The Parties and this Court have previously outlined in detail the First

Assignment, the Second Assignment, the Joint Consent and the Addendum all



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8

documents;yetshedidnotrevealthisinformationtoSSLorensureitwasincludedin

interrogatory answers, some of which she also notarized. [Id.]. She admitted, in

retrospect,thattheinformationanddocumentsshouldhavebeendisclosed.[Id.atpp.61

64].

TheFirstAssignment and SecondAssignment are at the heart ofDefendants

motion to dismiss. Basically, Defendants say Latele lacks standing to bring these

copyrightclaimsbecauseitnolongerownedthecopyrighttoMariaMariaasofthetime

the lawsuitwasfiled.AfterDefendantsfiled theirmotion todismiss,Lateleproduced

anAddendum,supposedlypreparedtwoyearsearlier,which,iftrue,Latelecontends

wouldcompletelyunderminethestandingbaseddismissalmotion.Defendantsaccuse

LateleoffraudulentlycreatingtheAddendumandfalselyclaimingitwaspreparedin

2012,ratherthanin2014(inresponsetothemotiontodismiss).

Ms.Garcias

only

knowledge

of

the

so

called

Addendum,

which

Plaintiff

now

claims reversed theFirstAssignment (whichMr. Fraizdescribed as an involuntary

documentsthatplayakeyroleinthemotiontodismissatissuehere.[See,e.g.,ECFNo.

362].ThepartiesagreethatMr.Fraiz,Plaintiffsprincipalandhighestauthority,entered

into the first threeof these transactions less than fourmonthsbefore this actionwas

filed.The

First

Assignment

was

adocument

executed

in

April

2012

that

transferred

Maria

Maria toMr.Fraizpersonally.The SecondAssignment, also executed inApril

2012, transferredMariaMaria fromMr. Fraiz toMr. Fraizs wholly owned Florida

company,LateleU.S.TheJointConsent,datedApril18,2012,authorizedMr.Fraiz to

enter into the Second Assignment onbehalf of LateleU.S. Plaintiff claims that the

AddendumwasexecutedinApril2012aswell,andthatitrescinded(orcorrected)the

transfers made in the First and Second Assignment. Defendants disagree. These

documentsareexaminedinmoredetailbelow,atsectionI.A.



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9

error) came from oral conversationswithMr. Fraiz. She advisedMr. Fraiz that a

transferofMariaMariawouldnegativelyaffectthiscase.[ECFNo.324,pp.11819].

Ms.Garcia testified thatshedidnotdisclose theexistenceof these transactions

(whether they were undone, rescinded, aborted, canceled, superseded, corrected or

otherwisedeemednolongervalid)toSSLortoDefendantsbecauseherunderstanding

wasthattheunderlyingtransactionneverwentthrough.[ECFNo.325,p.60].Shedid

notdoany independent legalresearchonherown tosee if the informationabout the

transactions should have been disclosed in interrogatory answers or whether

documents concerning the transactions should have been produced in response to

document requests. [Id. atp. 61].Shedidnot consultwith anyof theRAL litigation

attorneystoseeiftheywouldhavedisclosedtheinformation.[Id.atpp.6061].Andshe

did not see the Addendum which supposedly (if not manufactured after the fact)

reversedthe

First

Assignment.

[ECF

No.

324,

pp.

90,

106

07].

AlthoughMs.Garcianotarized one of the transactiondocuments, shedidnot

keepacopy. [Id.atp.8889].ShereturnedtheoriginaltoMr.Fraizbutdidnotaskhim

foracopywhenshewasmarshalingdocumentsfortheSSLfirm.[Id.].

Fernando Fraiz admitted executing the First and Second Assignments but

testifiedthatthetransfers,negotiationsandrelateddocumentswereneverdisclosedby

Plaintiff in discoverybecause the dealwas never consummated; and regardless, he

claimed,MariaMariawasneveranintendedpartofthedeal.[ECFNo.324,pp.256,262



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10

64, 267].He testified that includingMariaMaria in the transferswas a mistake he

soughttocorrectwiththeAddendum.[Id.atp.268].

A.TheSpecificDiscoveryConductatIssue

AttheEvidentiaryHearing,Ms.GarciaadmittedshewasawareoftheTransfer

Documentsand theAddendum; in fact,shedrafted theSecondAssignmentandJoint

Consent. [ECF No. 324, pp. 85, 87]. As Plaintiffs outside general counsel, RAL

coordinated Plaintiffs responses to discovery requests in this case with outside

litigationcounsel(i.e.,SSL).[Id.atpp.25,116].Ms.GarciareviewedwithMr.Fraizthe

draftanswerstosomeofDefendantsinterrogatories.Forexample,Ms.Garciareviewed

PlaintiffsAnswersandObjectionstoDefendantTelemundoStudiosMiami,LLCsFirst

Set of InterrogatorieswithMr. Fraiz and notarized his signature on that document.

[ECFNo.324,pp.88,9196].Thefirstinterrogatorysoughtdetailedinformationabout

Maria

Mariaschain

of

title.7

Initsinterrogatoryanswer,Plaintifffailedtoidentify ormakeanyreferenceto

theTransferDocumentsandfailedtoidentifyMr.FraizorLateleU.S.asentitiesor

individualswhohaveeverowned[MariaMaria],thoughattheEvidentiaryHearingon

theprivilegewaiver issue,Ms.Garcia admitted that [i]n hindsight I should have.

7 PlaintiffsAnswersandObjectionstoDefendantsFirstSetofInterrogatoriescan

befoundatECFNo.1663,pp.6879.Thefirstinterrogatorysoughtinformationrelated

toallpriorownersof[MariaMaria],alltransfersorassignmentsofownershiporother

transactionsaffectingownershiporanyrightsinandto[MariaMaria],and...anyother

entitiesorindividualswhohaveeverowned[MariaMaria].



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11

[ECF No. 325, p. 61]. Plaintiff failed to produce these documents in response to

Defendants document requests. Request 19 of Defendants Second Request for

Production (served November 16, 2012) sought: All documents reflecting or

evidencing any transfers, licenses, sublicenses, encumbrances, pledges, or any other

transactionsofanykind involvinganyofthecopyrightsorother intellectualproperty

rightsofanykind,oranyotherrightsrelatedtothework(s)allegedlyinfringed.8

In response to the document request, Plaintiff agree[d] to produce all

responsivenonprivilegeddocumentsspecificallypertainingtoMariaMaria.... [Ex.

42, pp. 1617]. Nevertheless, Plaintiff never produced or otherwise disclosed the

TransferDocumentsorAddenduminresponsetothisoranyotherdiscoveryrequests.

DefendantsFourthRequestforProductionsought,atRequest11:

Communications between Plaintiff (specifically including any of its

officers and affiliated entities) and LaTele Productions, Inc. [i.e. Latele

U.S.](or

any

predecessor,

successor,

or

related

entities),

regarding

any

transaction, offer, arrangement, or proposal relating to telenovelas,

including,without limitation, the . . . assignment . . .of any telenovela,

including,withoutlimitation,MariaMaria....

[Ex. 43, p. 6]. In response, Plaintiff stated: There areNO responsive documents in

LATELES possession, custody or control. [Ex. 44, p. 2] (emphasis in original).

Defendants

other

document

requests

and

interrogatories

sought

information

about

8 DefendantsSecondRequestforProductionwasExhibit42attheAugust2021,

2014EvidentiaryHearing.References toexhibitsare to thoseexhibitsadmittedat the

EvidentiaryHearing.AfulllistofadmittedEvidentiaryHearingexhibitsisavailableat

ECFNo.323.



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12

negotiations and other documents.9 In each of these document requests,Defendants

soughtallelectronicallystoredinformation(ESI)inadditiontootherformats,and

thustherequestsincludedmetadata.10

Defendants previously have urged that Plaintiffs discovery violations i.e.,

Lateles failure toproduce theTransferDocumentsandLatelespurported fabrication

of theAddendum were sufficient tomeet the crimefraud exception andwarrant

waiveroftheattorneyclientprivilegeinconnectionwithcertainRALdocuments.The

EvidentiaryHearingwas on these very issues and a significant part of that hearing

involved thecircumstancesunderwhich theTransferDocumentsand theAddendum

werecreated(andthefactssurroundingthepurportedpublicfilingof theAddendum

withaVenezuelannotary).

Mr. Fraiz testified at the EvidentiaryHearing that the FirstAssignmentwas

correctedand

the

Second

Assignment

and

Joint

Consent

were,

for

all

practical

purposes, ineffective. [ECF No. 324, p. 242]. Defendants contend that Mr. Fraizs

testimonyon thispoint isnotcredible.Theyalsomakeanotherargument:even if the

9 See,e.g.,Ex.4,pp.24(PlaintiffsAmendedAnswerstoDefendantsFirstSetof

Interrogatories),Interrogatories13(seekinginformationaboutnegotiationsregarding

the prospective sale and/or licensing of Maria Maria), Interrogatories 46 (seeking

informationabout

offer[s]

...or

proposals

concerning

telenovelas);

ECF

No.

125

7,

p.

4, Requests 12 (seeking documents and communications reflecting negotiations

regardingtheprospectivesaleand/orlicensingofMariaMaria).

10 See,e.g.,Ex.43,p.2(defining[d]ocumentstoincludeallelectronicallystored

information).ThepartiesagreedtoaprotocolforproductionofESI.[ECFNo.112,p.

17].



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13

transactions were undone or reversed or otherwise ineffective, they were

unquestionablyresponsivetomultiplediscoveryrequestspropoundedbyDefendants.

Each attorney who testified (including Ms. Garcia herself) indicated that these

documents were responsive to requests for documents reflecting any transactions

involving MariaMaria.11 But Plaintiff repeatedly swore that no such documents or

transactionsexistedinitspossession,custodyorcontrol.

Forinstance,onFebruary26,2014,thethenassignedmagistratejudgeissuedan

OmnibusOrder,whichdenied, inpart,DefendantsConsolidatedMotion toCompel,

based on Plaintiffs statements that it has no responsive documents and it has

nothingelsetoproduce,butclarifiedthatPlaintiffisobligatedtoproduceallactive

andpastnegotiationsregardingMariaMariaandrequiredthatPlaintiffshallclarify

inaproper response that ithasproduced all responsivedocuments. [ECFNo.134,

pp.23].

TheOmnibusOrder(ondiscoveryissues)alsorequiredPlaintifftoprovidethe

exact searches [for ESI] thatwere performedby its IT personnel. [Id. at p. 2].On

February 27, 2014, Defendants counsel wrote to Plaintiff indicating Defendants

positionthatacompleteresponsetothisportionoftheOmnibusOrderwouldrequire

11 Ms. Garcia testified that she never advised Mr. Fraiz not to disclose the

transactions reflected in the First Assignment, the Second Assignment or the Joint

WrittenConsent.[ECFNo.324,pp.9395].ShealsotestifiedthatMr.Fraizneverasked

hertonotdisclosethetransactions.[Id.].



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14

[Plaintiff]tostatenotonlywhatsearchtermswereused,butalsowhatlocationswere

searched,forwhattypesofESI,onwhatdates.[ECFNo.1664].

OnMarch 7, 2014, LaTele filed its Verified Notice of Full Compliance with

OmnibusOrder. [ECFNo.144]. In response toDefendants request forNegotiations

for the Sale, Licensing, Transfer or Other Transactions related to the Catalogue of

Programming Received fromMarte TV, Plaintiff stated: There areNO additional

responsivedocuments inPlaintiffspossession custodyor control toproduce.To the

extentanyresponsivedocumentsmayexist, theywouldbein thecustody,possession

and control of a third party, Plaintiffs exclusive distributor, SOMOS,who is under

subpoenatoproducesame(andinfacthasalreadydoneso).[Id.atp.2](emphasisin

original).

In a written response to Defendants request for Documents Reflecting

Ownership,Transactions,

or

Disputes

of

the

Asserted

Work,

Plaintiff

stated:

Plaintiff

herebyclarifies,fortherecord,thatallresponsivedocumentstothisissuehavealready

been produced. [Id. at p. 3]. Plaintiff also attached a swornAffidavit executedby

Fernando Fraiz on March 7, 2014, wherein he attested: all responsive documents

regardingtheassertedwork,meaningdocumentsreflectingownership,transactions,or

disputes about same, have already been produced by Plaintiff as to responsive

documentsinitscustody,possession,andcontrol.[ECFNo.1411,p.2].

TheCourtpreviouslyfoundthatthesestatementsmadewhilePlaintiffsilently

withheldresponsivedocumentsandprovided incorrect interrogatoryanswers were



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15

false.12 [ECFNo.362,p.15].Moreover, theCourtalsonoted thatPlaintiffcouldhave

hadastrategicmotivationtohidetheexistenceofthetransactionsandthedocuments

whichevidencedthem.13[Id.].

12 Inadeposition,Mr.Fraiztestifiedthathenevercontemplatedpersonallyowning

anyrightstoMariaMariaandthatsuchatransactionwasneverexecuted.Inaddition,

whenMr. Fraiz was asked at his deposition about an unsigned copy of the First

Assignment, Plaintiffs counsel objected and implied that the question was merely

hypotheticaland

Mr.

Fraiz

then

stated

that

if

at

any

time

this

means

to

perfect

it,

it

wasneverexecuted.[ECFNo.1661,pp.811].

13 AsoutlinedinDefendantsmotiontodismiss,aplaintiffseekingtobringaclaim

forcopyrightinfringementmustexclusivelyowntheworkitclaimswasinfringedatthe

timethelawsuitisfiled.Withoutsuchownership,aplaintifflacksstandingtobringthe

claim.Seee.g.,SaregamaIndiaLtd.v.Mosley,635F.3d1284,1986(11thCir.2011)(finding

lackofsubjectmatterjurisdictionbecausePlaintiffdidnotcurrentlyownacopyrightin

the work at issue). If the Transfer Documents were not undone by the socalled

Addendum,

then,

Defendants

argue,

Plaintiff

has

no

standing

to

pursue

the

case

and

theCourtmustdismissit.ItwasonlyafterDefendantsfiledtheirmotiontodismissthat

PlaintiffproducedtheAddendum.

TheUndersignedisnotnowmakinganyfindingsaboutthelegalsignificanceof

theTransferDocuments or theAddendum other than to conclude that theywere

responsivetodiscoveryrequests.Likewise,theCourtisnotreachinganyconclusions

hereaboutPlaintiffsstanding(orlackofstanding)topursuethislawsuit.

Nevertheless, a federal court is always concerned about subject matter

jurisdiction.Therefore,

Latele

will

need

to

establish

at

trial

its

standing

to

pursue

the

lawsuit. Inotherwords, itwillneed toprove that it exclusivelyowned the rights to

MariaMariaon theday it filed the lawsuit.Owning the rightsby the timeof trial is

insufficientifownershipwhenthelawsuitwasfiledisnotestablished.DominionAssets,

2014WL2937058at *910 (noting that theplaintiff indisputablyowned thepatentsat

thetimeofthemotionbutdismissingbecausetheplaintiffcouldnotdemonstratethatit

heldlegaltitleattheinceptionofthelawsuit).



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16

B. TheAllegedFabricationoftheAddendum

ThepartiesvigorouslydisagreeaboutthebonafidesofthesocalledAddendum.

PlaintiffcontendsitislegitimatewhileDefendantsbranditasafraudulentsham.

While it is uncontroverted that theAddendum first appeared in this case on

April17,2014,aspartofPlaintiffsResponsetoDefendantsMotiontoDismiss,which

assertedthattheTransferDocumentsdeprivedPlaintiffofstanding,Plaintiffclaimsthe

Addendumwas created and executed inApril 2012. [ECFNos. 185, p. 6; 1854]. In

support of their contention that the Addendum was fabricated in response to the

MotiontoDismiss,Defendantsproduceddocumentaryevidenceandexperttestimony

that the faceof theAddendum indicates itwas filed,andshouldappear,ataunique

pageoftherecordsofaparticularnotaryoffice.[ECFNo.325,pp.7585].Nevertheless,

when Defendants expert inspected those records, a completely different document

appeared.Neither

party

has

located

any

notary

records

where

the

Addendum

was

actuallyrecorded.Thus,Defendantsassert theAddendumwasnotactuallyfiledwith

thatnotaryofficeandinsteadwascreatedafterthefact.

However,as referencedabove, theAddendum itselfandMr.Fraizs testimony

supportPlaintiffspositionthatitwascreatedin2012.

Inaddition,Plaintiffsubmittedthedeclaration(madeunderpenaltyofperjury)

ofPaolaAlexandraMuniveCastillo, aVenezuelan attorney. [ECFNo. 3312]. In this

affidavit, Ms. Munive explained that she prepared, drafted and reviewed the



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17

Addendum in2012,at therequestofXiomaraRuiz,anagentofMr.Fraizs. [Id.].Ms.

Ruizalsosubmittedadeclaration.[ECFNo.3311].

AlthoughMs.Munives declaration explains that shewas involvedwith the

Addendumin2012,Defendantsemphasizethatthereareseveralsuspiciousaspectsto

her declaration. For example, no metadata or drafts were produced. Ms. Munive,

however,profferedanexplanation:shesaidshenolongerhastheelectronicfileofthe

Addendum shedrafted in2012becausesheprepared itonacomputersheno longer

possesses.[ECFNo.3312,p.2].Ms.Munivesdeclarationdidnotsayanythingabout

theserver,butMs.RuizsdeclarationsaidsheaskedMs.Munivetoconductasearchfor

ESIandmetadataonhercomputerandserverbut that the searchyieldedno results.

[ECFNo.3311,p.1].

Defendants view the absence ofmetadata/ESI and drafts as evidence further

establishingthat

the

Addendum

was

in

fact

fabricated

[in

2014]

as

part

of

Plaintiffs

effort tomanufacture standing and explain away its failure to disclose the Transfer

Documentsandthetransactionsreflectedtherein.[ECF3591,p.12].

Defendants also argue thatPlaintiffs failure tomaintain suchdocuments and

ESI,createdlessthan4monthsbeforefilingitsComplaintinthiscase[ECFNo.1]and

after signing multiple tolling agreements [ECF No. 1611, pp. 1232], constitutes

spoliationofevidenceandwarrantsanadverseinference.

Defendants also contend that theAddendum, even if created in 2012, should

havebeendisclosedinresponsetomultiplediscoveryrequests.



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18

C. TheNovember3,2014DiscoveryOrderandPlaintiffsResponse

OnNovember3,2014,theUndersignedissuedanOrderonWhetherDefendants

areEntitledtoPrivilegedDocumentsfromRobertAllenLaw,P.A.[ECFNo.362].This

Order specifically found that Plaintiffs statements in response to certain discovery

requestsandinterrogatories,asoutlinedaboveatsectionI.A.,werefalse.[ECFNo.362,

p. 15]. In connectionwith that finding, theUndersigned explicitly noted thatwhile

Plaintiffs discovery misconduct did not create a waiver of privilege for the RAL

privileged documents under the crimefraud exception, other consequences would

followinalaterrulingontheseparatelyfiledmotiontodismiss.[Id.atpp.1617].

OnNovember 7, 2014,Plaintiff,perhaps attempting to anticipate and forestall

thoseconsequences,filedtwonotices.Inthefirst,titledPlaintiffsCorrectedNotice

ofCompliancewithCourtOrder[DE134],Plaintiffamendsitsoriginalverifiednotice

ofcompliance,

filed

in

response

to

the

Courts

February

26,

2014

Order,

that

explicitly

stated ithadNOadditionalresponsivedocuments.Plaintiffpurports tocorrectthat

priorstatementwiththesubstitutionofanewstatementthatnotesitlikelydid havethe

TransferDocumentsinitspossessionasofMarch7,2014asitreceivedacourtesycopy

oftheproductionmadebynonpartySomos,andtheTransferDocumentswereinthat

production. Plaintiff states it did not then produce the Transfer Documents to

DefendantsbecauseDefendantsalreadyhad thosedocumentsat that time,bywayof

Somos. Finally, the substituted response notes that Plaintiffs counsel did not have a



19/33

19

copyoftheAddendumatthetimetheverifiednoticeofcompliancewasfiled.[ECFNo.

366,p.2].

Plaintiffalso filedaNoticeofServingSupplementalandCorrectedDiscovery

Response on November 7, 2014. [ECF No. 367]. This Notice documents Plaintiffs

formal,writtensupplementationtoandcorrectionofitspriordiscoveryresponsesas

torequestsforinformationre:negotiationsforMariaMaria,activeorinthepast.[Id.

atp.3].Plaintiffalsonotesthatitisservingasupplementalanswertoaninterrogatory

regardingcontrolofLatele.[Id.atp.4].

Plaintiffs twomost recently filed submissionscannot remedy itspastconduct.

NeithertheAddendumnortheTransferDocumentswereproducedbyPlaintiffbefore

February 27, 2014. Mr. Fraizs affidavit submitted with Lateles verified notice of

compliancestatedthatallresponsivedocuments...reflectingownership,transactions,

ordisputes

have

already

been

produced

by

Plaintiff.

[ECF

No.

144

1,

p.

2].

Peggy

Garcia now admits the Transfer Documents and Addendum were responsive and

shouldhavebeenproduced.[ECFNo.325,pp.6164].NeitherPlaintiffnorMs.Garcia

everadvisedMr.Sammataro,itscounselofrecordinthisactionatthetime,aboutthe

TransferDocumentsortheAddendum[Id.atp.60],andPlaintiffsowncurrentcounsel

ofrecordcondemnedMr.Fraizsfailuretocooperateindiscovery.[ECFNo.328,pp.11

12].14Moreover, theAddendumwas notproduceduntilApril 2014 but only after

14 BypriorOrder,theUndersignedrequiredthatcertaindocumentsinthesocalled

Somos Production be produced by Plaintiff, which had asserted attorneyclient



20/33

20

Defendants filed theirmotion to dismiss for lack of standing. In addition, the two

submissionsdonot impactMr.Fraizs falseormisleadingdeposition testimony,and

theydonotsignificantlyundermineDefendantstheorythatitisnocoincidencethatthe

twodocumentswhichcouldremovePlaintiffsstandingwerenot timelyproducedor

that thedocumentwhich reversedor corrected the transactions appearedonlywhen

necessarytofendoffastandingbaseddismissalmotion.

II. LegalAnalysis

Defendantsmotion todismiss for lackof subjectmatterjurisdiction,basedon

the view that Latele lacks standing, was filed before Defendants learned of the

Addendum.Thedismissalmotionisbasedonthe theorythattheTransferDocuments

demonstratethatLateledidnotowntheexclusiverighttoMariaMariawhenitfiledthe

lawsuit.ButnowthattheAddendumhassurfaced,theanalysismustalsochange.

privilegeover thosematerialsnotwithstanding that theywere(a) in thepossessionof

Somos, and (b) Plaintiff acknowledged that Somos was outside the scope of any

attorneyclientprivilegePlaintiffmighthavewithitscounsel.[ECFNo.328,p.10].

In thatOrder, theUndersigned noted that several of the emails in question,

whichhavenowbeenproducedtoDefendants,describedPlaintiffspotentialfailureto

meetdiscovery

obligations.

For

instance,

one

email,

from

Plaintiffs

current

counsel

of

record toMr. Fraiz had the subject line Discovery Failures. [Id. at pp. 1112]. In

another email [ECFNo. 2963],Lateles current litigation counsel complained toMr.

Fraizabouthislevelofnoncompliance,resistanceanddelayingtactics. Inanother,

he advises that Latele may lose the case and/or be sanctioned for violating the

discovery rules. The Court previously ordered Latele to produce these formerly

privileged communications to Defendants because Latele waived privilege by

intentionallysendingthedocumentstoSomos,athirdparty.



21/33

21

If the Addendum was created and executed in 2012 (as opposed to being

fraudulentlymanufacturedin2014),thenDefendantsargumentaboutthesignificance

of theTransferDocuments is significantlyundermined (andmaywellbe completely

unavailable).IftheAddendumwasfabricatedin2014(inanefforttotrickDefendants

andtheCourt),thentheTransferDocumentswouldaffectPlaintiffsstandingtofilethis

lawsuit in2012 andwould also creategrounds fordismissalundera fraudon the

courtdoctrine.

These arebig ifs, however. They cannotbe resolved nowbecause there is

evidence to supportboth sidespositions. Belleri v. United States,712F.3d543,54749

(11thCir. 2013) (disagreeingwith the defendants argument that the appellate court

coulddeterminesubjectmatterjurisdictionbydecidingwhethertheplaintiffisanalien

andwhetherheobtainedderivativecitizenshipandremanding to the trialcourtafter

rejectingthe

defendants

argument

that

remand

was

unnecessary).

However, there is no doubt that Latele never timely produced the Transfer

Documents and theAddendum and that this failure has significantly prejudiced

Defendantsintheirabilitytoadequatelyinvestigatethesedocuments.Defendantshave

nothadtheopportunitytotakethedepositionsofMs.MuniveandMs.Ruiz.Theyhave

not had the opportunity to thoroughly question Mr. Fraiz about the Transfer

Documents,andtheyhavenothadthechancetothoroughlyquestionMs.Garciaabout

herinvolvementinthediscoveryprocess.Similarly,theywerenotpreviouslyawareof

theneedtoprobethecircumstancessurroundingthesedocumentsbecausetheywere



22/33

22

simplynotaware that theTransferDocumentsexisted. Inaddition,Defendantswere

notmade awareof theneed to investigateLateleU.S.becausePlaintiffnever timely

discloseditsexistencenoritsinvolvementwithMariaMaria.

Likewise,thereisnodoubtthatthesedocumentsandtheinformationaboutthe

transactionsreflected in themwereresponsive tonumerousdiscoveryrequests and

that Plaintiff provided false discovery responses which hid the existence of the

documentsandthetransactions.Initsoppositiontotheinstantmotion,Plaintiffargues

thattheAddendumdidnothavetobeproducedbecauseitisaninternaldocumentto

the failed negotiations of certain of Plaintiffs telenovelas, that excludes the subject

telenovela,MariaMaria.[ECFNo.185,p.6,n.6].TheCourtunequivocallyrejectsthis

theory,as theAddendum isclearlyresponsive toarequest fordocumentsevidencing

allactiveandpastnegotiationsregardingMariaMaria.Infact,Plaintiffsargumentis

illogicaland

unconvincing

on

its

face.

The

primary

reason

for

the

Addendum

was

to

undo or reverse or correct the purportedmistake of includingMariaMaria in the

TransferDocuments. IfMariaMariahad clearlybeen excluded from thenegotiations

withTelevisa (i.e.,negotiationswhichPlaintiff saysnever went through), then the

Addendumwouldhavebeenentirelyunnecessary.[ECFNo.325,pp.6062].

Given thepotentialsignificanceof thesedocuments(e.g., theymightmeanthat

Plaintiff lacks standing to pursue the copyright claims or theymight establish that

PlaintiffpurportedafraudontheCourtbyfabricatingacriticaldocument),theonlyfair

andreasonablewaytominimizeprejudicetoDefendantsshortofoutrightdismissalis



23/33

23

topermitthemtotakeadditionaldiscovery. Becausesomeofthewitnessesareoutof

thecountryandbecausethetrialisscheduledtooccurrelativelysoon,theneedtogive

Defendantsadditionaldiscoverymeans that thecasemustberemoved from the trial

calendar.TheCourtwill issueanewtrialschedulingorderafter ithas theNovember

21,2014discoveryhearingonDefendantsrequest fora forensicanalysisofPlaintiffs

electronicmedia(andaftertheUndersignedissuesarulingonthatrequest).

In themeantime, however,Defendantsmay take discovery (bothwritten and

depositions) concerning the Transfer Documents, the Addendum, the lack of

ESI/metadata, the potential spoliation or destruction of evidence, assessingwhether

Plaintiffs conduct constitutes bad faith15 and the circumstances surrounding the

purported witnessing and filing of the Addendum in Venezuela. Defendants are

specifically authorized to retake depositions, including ofMr. Fraiz, as part of this

remedialprocess

to

eliminate

or

substantially

minimize

prejudice

to

Defendants.

15 In theEleventhCircuit,bad faith is thekey tounlocking theCourts inherent

power to imposesanctionsforspoliation.PenaltyKickMgmt.Ltd.v.CocaColaCo.,318

F.3d1284,1294(11thCir.2003)(noadverseinferencefrommissinglabelbecausethere

wasnoindicationofbadfaith).SeealsoMannv.TaserIntl,Inc.,588F.3d1291,1310(11th

Cir.2009).

TheUndersigned

does

not

have

enough

information

to

determine

whether

badfaithexistsinconnectionwithLatelesapparentfailuretopreserveESI.Deposition

testimonyand/oradditionaldocumentproductionfromLatelemayshedlightonthis.

However, the issue of Lateles failure to preserve ESI (such as metadata for the

Addendumpurportedlycreated inVenezuela in2012)isanalyzeddifferentlythanits

failure to produce the TransferDocuments and theAddendum, in partbecause the

factualrecordhasnotbeenfullydeveloped.



24/33

24

Defendants have until February 10, 2015 to take the additional discovery.

Plaintiffshallcooperateinfacilitatingthediscoveryrequests,especiallyiftheyinvolve

PlaintiffsemployeesoragentsinVenezuela.

The Undersigned has reviewed portions of the transcript of Mr. Fraizs

deposition, where Plaintiffs counsel made speaking objections which Defendants

criticizeas improper coachingefforts. [ECFNo.1661].Withoutmakinga findingon

whethercounselsrepeatedobjectionsstrayedoverthelineintoimpropercoaching,the

Courtisputtingallcounselonnoticethattheirdepositionbehaviormustcomplywith

allapplicablerules andthattheUndersignedwillnothesitatetoimposesanctionsif

counselviolatetherules.Toavoidanyambiguity,theUndersignedconsidersanifyou

know comment to a deponentbefore he or she answers a deposition question to

usuallybeimpropercoaching,designedtosignalthewitnesstoanswerthatheorshe

doesnot

know

or

remember

the

answer.

The Undersigned is also awarding attorneys fees in Defendants favor in

connectionwith the discovery violations at issue in themotion to dismiss (and as

furtheroutlinedattheEvidentiaryHearing).Evenassuming,asPlaintiffsurge,thatthe

Addendum wasexecuted in 2012,neither itnor theTransferDocumentswere timely

produced toDefendants.So,evenacceptingPlaintiffsviewof the facts,but for their

failure to timely produce these critical documents, coupled with Plaintiffs other

discoverymisconductoutlinedhere,Defendantswouldnothave incurred thecostof

draftingandfilingtheirmotiontodismissorofengaginginextensivediscoveryrelated



25/33

25

litigation toget at theheartof the copyright chainof title issue.The award isbeing

entered under FederalRule ofCivil Procedure 37(b)(2)(A)(v),16 FederalRule ofCivil

Procedure 37(b)(2) (failure to complywith a court order)17 and theCourts inherent

power.The feesaward isaconsequenceofLatelesbad faith failure tobe truthful in

discovery.AsexplainedbythebandIncubusinitsConsequencesongfromitsdouble

platinumMakeYourselfalbum,Youbetternotblink/Ohblink/Theconsequence

isabiggerwordthanyouthink.18

In rejectingDefendants request fordismissal, theUndersigned recognizes the

strongpreferenceforadeterminationonthemeritsofadispute.SeegenerallySe.Banking

Corp.v.Basett,204F.3d1322(11thCir.2000)(reversinglowercourtsentryofadefault

judgmentfordiscoveryviolations).SeealsoBernal,479F.Supp.2dat130102(modifying

magistratejudgesrecommendationbynotstrikinganswerandaffirmativedefensesbut

insteadordering

that

the

jury

would

be

instructed

that

certain

facts

had

been

16 See, e.g., Bernal v.AllAm. Inv. Realty, Inc.,479F.Supp.2d1291,1335 (S.D.Fla.

2007).

17 Therulegives trialjudgesbroaddiscovery tofashionappropriatesanctionsfor

violationofdiscoveryorders.Malauteav.SuzukiMotorCo.,Ltd.,987F.2d1536(11thCir.

1993).Theseveresanctionofadismissalordefaultjudgment isappropriateonlyasa

last resort,when lessdrastic sanctionswouldnotensure compliancewith the courts

orders.Navarro

v.

Cohen,

856F.2d

141,

142

(11th

Cir.

1988).

See

also

Betty

K

Agencies,

Ltd.

v.

M/V

Monada, 432 F.3d 1333, 133738 (11th Cir. 2005) (vacating withprejudice

dismissalandnoting that sucha resultisanextreme sanction thatmaybeproperly

imposedonlywhen:(1)apartyengagesinaclearpatternofdelayorwillfulcontempt

(contumaciousconduct);and(2)thedistrictcourtspecificallyfindsthatlessersanctions

wouldnotsuffice.)(internalquotationomitted).

18 EpicRecords(1999).



26/33

26

established including defendants spoliation of evidence andprocurement of false

evidence).On theotherhand, thispreferencemaywellyield if theCourtdetermines

laterthatLatelemanufacturedtheAddendumorotherwisetriedtoperpetrateafraud

ontheCourt.

Inparticular,afeesawardagainstLateleitselfisjustifiedastheCourtfindsthat

LateleeitherrecklesslyorintentionallyfailedtotimelyproducetheTransferDocuments

and the Addendum. Either way, I find that Lateles failure to timely produce the

TransferDocumentsandtheAddendumconstitutesbadfaithdiscoverymisconduct.In

addition,theCourtfindsthatMr.Fraizsdepositiontestimonyaboutthesedocuments,

the negotiations with Televisa and the execution of the documents was, at best,

strategicallymisleading,andperhapsperjurious.19EvenifLatelesconductwasmerely

reckless, insteadofbeingmotivatedbypurposefulbad faith, I find that this reckless

conductconstitutes

the

requisite

bad

faith

to

justify

sanctions

under

the

Courts

inherentpower.

TheCourt isspecificallynotenteringa feesawardagainstMr.Sammataroand

SSLbecausethereisabsolutelynoevidencetoevensuggestthattheyknewabout the

Transfer Documents, the Addendum, the negotiations with Televisa or the

circumstancessurroundingtheexecutionofthedocuments.Infact,alltheevidenceisto

thecontrary,establishingthattheydidnotknowofthesematters.

19 Seegenerally,AllapattahServs.,Inc.v.ExxonCorp.,373F.Supp.2d1344,1373(S.D.

Fla.2005)(inherentpowercanbeinvokedevenifproceduralrulesexistwhichsanction

thesameconduct).



27/33

27

TheCourtisnotenteringafeesawardagainstLatelescurrentcounselbecauseit

isunclearwhen they first learnedof theTransferDocuments, theAddendumor the

circumstances surrounding the execution of those papers. In addition, the record is

hazyonwhencurrentcounselactuallyrealized thedocumentshadbeenproduced to

themandwhentheyunderstoodthedocumentssignificance.

DefendantsshallwithinfivedaysofthisOrdersubmittoPlaintiffanaffidaviton

theamountoffeesbeingsought(withsupportingbackup)andthenattempttoreachan

agreementwithPlaintiffconcerningtheamountoffees.Defendantsmayseekattorneys

fees related to the instantmotion to dismiss, aswell as any other fees incurred in

litigating discovery disputes related to Plaintiffs nonproduction of the Transfer

DocumentsandAddendum. Ifanagreement isreachedwithin10daysof thisOrder,

thenthepartiesshalladvisetheCourtinabrief,jointlyfilednoticeandthefeesshallbe

paidwithin

7days

after

the

filing

of

the

notice.

If

the

fees

are

paid,

then

Plaintiff

shall

withinfivedaysofpaymentsubmittotheCourtsefileinboxaNoticeofCompliance,

attachingadeclarationconfirmingthepaymentandnotingtheamount.Ifanagreement

cannotbereachedbythedeadline,thenthepartiesshallsoadvisetheCourt,whichwill

then require counsel for both Plaintiff andDefendants to submit an affidavit (with

backupdocumentation)of the fees incurred inconnectionwith thediscoverydispute



28/33

28

(eitherrelatedtofilingoropposingthemotiontodismissoradvocatingfororagainst

productionofthediscoverymaterialsatissuehere).20

Onefinalpoint: FederalRuleofCivilProcedure37authorizestheCourttoenter

afeesawardagainsttheparty,thepartyscounselorboth.GivenRALsinvolvementas

theclearinghouseforLatelesdocumentsandinformationtoSSLandgivenMs.Garcias

activitiesinconnectionwiththeTransferDocuments,reviewinginterrogatoryanswers

andprovidingdocumentstoSSL,theCourtwillgiveRALtheopportunitytobriefthe

issueofwhetheranyportionofthefeesawardshouldbeenteredagainstit,and,ifso,

whatpercentage.TheCourtwillalsogiveDefendantsandLatelescurrentcounselthe

chancetoweighinonthisissue.Therefore,RAL,PlaintiffandDefendantsmay(but are

notrequiredto)submitamemorandumonthisissueofnomorethan10doublespaced

pages,excludingsignatureblockandcertificateofservice,within10daysofthisOrder.

20 Ifnoagreementcanbereached,thentheCourtwillevaluatetheattorneysfees

incurredbyallparties inorder toassess the reasonablenessof the fees requestedby

Defendants.

Rule37authorizesavarietyofsanctions,includingdismissaloftheentireaction,

renderingadefaultjudgmentagainstthedisobedientparty,strikingpleadingsinwhole

or inpart,prohibiting thedisobedientparty fromsupportingoropposingdesignated

claimsordefensesorfromintroducingdesignatedmattersinevidence.TheCourtisnot

now imposing those harsher remediesbecause theUndersigned views the sanctions

imposed

additionaldiscovery

(taken

only

by

Defendants),

payment

of

certain

discoveryexpensesandanattorneysfeesaward tobeadequate.ButtheUndersigned

may well reconsider these moresevere sanctions if presented with evidence that

exhibitshavebeenfraudulentlycreatedorthatrelevantevidence(suchasmetadataand

ESI)hasbeendestroyed. Goforth v. Owens, 766F.2d 1533 (11thCir. 1985) (affirming

dismissaldue to theplaintiffs counselspatternofdelayand refusal to complywith

courtdirectionsandnotingtherewasnoabuseofdiscretion).



29/33

29

Thememorandamaybesubmitted regardlessofwhether there isanagreementas to

theamountoffees.21

IfthereisanagreementamongPlaintiff,Defendants,RALandPlaintiffscurrent

counselonwhetherRALshouldbefinanciallyresponsibleforsomeportionofthefees

award(and,ifso,howmuch),thennoticeofthisagreementshouldbetimelygivento

the Court. In order to facilitate RALs ability to timely submit a memorandum,

LatelescurrentcounselshallforthwithprovideacopyofthisOrdertoRAL.

21 TheCourtmightbe authorized to award fees againstRAL under theCourts

inherentpowerand28U.S.C.1927,butthosesourcesofauthorityrequireafindingof

badfaith.Amlongv.Dennys,Inc.,457F.3d1180,1190(11thCir.2006)(badfaithneeded

for section 1927 fees against counsel); Barnes v. Dalton,158F.3d1212,1214 (11thCir.

1988) (inherent power). Although reckless conduct is sufficient to justify sanctions

requiringbadfaith,negligentconduct,standingalone,willnotsupportafindingofbad

faith.Amlong,457F.3dat1193.

RALs activitieswere eithermaliciously intentional (e.g., purposefully hiding

documentsandinformationindiscovery,inanimproperattempttohelpitsclientavoid

a thorny standing issue), reckless (i.e., a grossdeviation from reasonable conduct,

Amlong, 457 F.3d at 1191) ormerely negligent (e.g., a comparatively inexperienced

attorneywith no litigation experiencewho exercised poorjudgment in unilaterally

decidingwhethertoproducedocumentsandinformationindiscoveryortoherclients

litigationcounselwithoutconsultingwithlitigationpartnersinherownfirmandwho

thendecidedtheserelatedissuesincorrectly).TheUndersignedhasnotconcludedhow

tocategorizeRALsconduct,butRule37doesnotrequirebadfaith.Infact,itdoesnot

requirenegligence.

Instead,

the

rule

establishes

aloser

pays

presumption

to

discoverydisputes.IfDefendantsorPlaintiffscurrentcounselbelievethatRALshould

alsoberesponsible for feeseitherunderRule37,Section1927or theCourts inherent

power,thentheyshallsoadviseRALinwritingwithinfivedaysofthisOrder,sothat

RALmay address theposition in its optionalmemorandum.Therefore, the optional

memorandawill, at aminimum, address thepropriety of a fees award againstRAL

underRule37andmay (dependingon thepartiespositions)alsodiscuss feesunder

Section1927andtheCourtsinherentpower.



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30

III. Conclusion

TheMotiontoDismissisDenied.TheCourtwillnotdismissthecaseforlackof

subjectmatterjurisdictionbecauseDefendantsargument thatPlaintiff lacks standing

hinges on contested facts. The Courtwill not dismiss this casebased on discovery

violationseither dismissalasasanctionfordiscoverymisconduct is themostsevere

sanction and theCourt declines to do so at this time.However, as outlined in this

Order,theCourtwillprovideDefendantssubstantialreliefinconnectionwithPlaintiffs

discoverymisconduct:

1) ThetrialinthiscasewillbecontinuedtoallowDefendants(andnotPlaintiff)to

conductadditionaldiscovery.TheCourtwillissueanewschedulingorderonceitrules

onthoseissuesnoticedforhearingonNovember21,2014.

2) Defendantsadditionaldiscoveryissubjecttothefollowingconditions:

a.

Thediscovery

is

limited

to

this

area

of

inquiry:

the

Transfer

Documents,

theAddendum, the lack ofmetadata producedby Plaintiff in connectionwith the

CourtsPostHearingOrder[ECFNo.314],Plaintiffspotentialspoliationordestruction

of evidence, assessing whether Plaintiffs conduct constitutes bad faith and the

circumstances surrounding thepurportedwitnessing and filing of theAddendum in

Venezuela.Defendants are specifically authorized to retakedepositions, including of

Mr.Fraiz.



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31

b. The additional discovery must be completed by February 10, 2015.

Plaintiffmustcooperateinfacilitatingthisdiscoverysothatitmaybecompletedbefore

thisdeadline.

c. Plaintiffmustpaytheattendancefeesforcourtreportersorvideographers

usedatanyfuturedepositionsscheduledbyDefendants.

d. Plaintiffmustpay the travelcosts foronedefenseattorneyatanyfuture

outoftowndepositionsthatDefendantschoosetotake.

e. Plaintiff must pay these discoveryrelated expenses within 30 days of

receivinganinvoicefromDefendants.

f. Defendants may, if they choose, file another motion to dismiss the

complaint for fraud on the court/intentionalbad faith discovery abuse if additional

discovery or other evidence obtained by Defendants establishes that Plaintiff

fraudulentlymanufactured

and

post

dated

the

Addendum

or

that

Plaintiff

destroyed

relevantevidence(suchasESI)afteradutytopreserveevidencewascreated.

3) The Court is awarding Defendants attorneys fees in connection with the

discovery violations at issue in the instant motion to dismiss. The fees award is

governedbythefollowingconditions:

a. Defendants shall within 5 days of this Order submit to Plaintiff an

affidavit on the amount of fees being sought (with supporting backup) and then

attempt to reach an agreement concerning the amountof fees.Defendantsmay seek

attorneys fees related to the instant motion to dismiss, as well as any other fees



32/33

32

incurred in litigating discovery disputes related to Plaintiffs nonproduction of the

TransferDocumentsandAddendum. Ifanagreementisreachedwithin10daysofthis

Order,thenthepartiesshalladvisetheCourtinabrief,jointlyfilednoticeandthefees

shallbepaidwithin7daysafterthefilingofthenotice.Ifthefeesarepaid,thenPlaintiff

shall within five days of payment submit to the Courts efile inbox a Notice of

Compliance,attachingadeclarationconfirmingthepaymentandnotingtheamount.If

anagreementcannotbe reachedby thedeadline, then theparties shall soadvise the

Court,whichwillthenrequirecounselforbothPlaintiffandDefendantstosubmitan

affidavit (with backup documentation) of the fees incurred in connection with the

discovery dispute (either related to filing or opposing the motion to dismiss or

advocatingfororagainstproductionofthediscoverymaterialsatissuehere).

b. IfDefendantsorPlaintiffscurrentcounselbelieve thatRALshouldalso

beresponsible

for

fees

either

under

Rule

37,

section

1927

or

the

Courts

inherent

power,

thentheyshallsoadviseRALinwritingwithinfivedaysofthisOrder.



33/33

c. Defendants, Plaintiff and RAL may, but are not required to, file a

memorandumofnomorethan10doublespacedpages,excludingsignatureblockand

certificateof service,within 10daysof thisOrderon the subjectofwhether the fees

awardshouldbeenteredagainstLatele,RALorboth.22

DONEANDORDEREDinChambers,inMiami,Florida,November10,2014.

Copiesfurnishedto:

AllCounselofRecord

22 Inorder to facilitateRALsability to timely submitanoptionalmemorandum,

Lateles current counsel shall forthwith provide a copy of this Order to RAL
