Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_23-cv-00408/USCOURTS-alnd-2_23-cv-00408-3/pdf.json

Nature of Suit Code: 320
Nature of Suit: Assault, Libel, and Slander
Cause of Action: 28:1332 Diversity-Libel,Assault,Slander

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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

MEDICAL PROPERTIES TRUST, INC.,

Plaintiff,

v.

VICEROY RESEARCH, et al.,

Defendants.

}

}

}

}

}

}

}

}

}

Case No.: 2:23-cv-00408-RDP

MEMORANDUM OPINION 

This matter is before the court on Medical Properties Trust’s Motion for Issuance of a 

Letter of Request Pursuant to the Hague Convention (Doc. # 80) and numerous other discovery 

disputes between the parties. After careful review, and for the reasons outlined below, Medical 

Properties Trust’s Motion for Issuance of a Letter of Request Pursuant to the Hague Convention 

(Doc. # 80) is due to be granted. The other objections to discovery requests are due to be overruled

in part and sustained in part.

I. Background

This case arises out of Defendants Viceroy Research (“Viceroy”), Fraser John Perring, 

Gabriel Bernarde, and Aidan Lau’s (collectively “Defendants”) alleged efforts to manipulate 

Plaintiff Medical Properties Trust’s (“Plaintiff” or “MPT”) stock price in order to profit on 

Defendants’ short position. On March 30, 2023, Plaintiff filed this action alleging defamation and 

other state law claims. (Doc. # 1).

On November 15, 2023, counsel for Plaintiff informally contacted chambers regarding a 

discovery dispute between the parties concerning Plaintiff’s intent to issue a “Request for 

International Judicial Assistance Pursuant to the Hague Convention.” In response, the court set a 

FILED

 2024 Jan-12 PM 12:43

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 1 of 18
2

status conference and hearing for December 7, 2023 to discuss the dispute. (Doc. # 71). Prior to 

the hearing, counsel for both parties informally contacted chambers about other disputes and 

requested those be discussed at the conference. Both parties submitted briefs regarding their status 

on these disputes. (Docs. # 75, 76). 

At the status conference and hearing on December 7, 2023, the parties stated their positions 

on the following disputes: (1) MPT’s request for the court to issue a “Request for International 

Judicial Assistance Pursuant to the Hague Convention”; (2) MPT’s request for documents relating 

to any past regulatory or litigation matters concerning false or misleading statements made by 

Defendants; (3) MPT’s request for Viceroy to produce any communications with the Securities 

and Exchange Commission concerning MPT; and (4) Defendant’s request for production of any 

documents involving transactions between MPT and its two largest tenants, Steward Health Care 

System LLC (“Steward”) and Prospect Medical Holdings, Inc. (“Prospect”). 

After the conference, the court entered an order instructing Plaintiff to file its draft “Letter 

of Request for International Judicial Assistance Pursuant to the Hague Convention” and any 

accompanying memorandum in support. (Doc. # 79). Plaintiff subsequently filed its Motion (Doc. 

# 80), and Defendants filed a Response in Partial Opposition. (Doc. # 81) 

II. Legal Standards

a. Discovery

“Discovery is governed by the principles of relevance and proportionality[.]” Gulledge v. 

DePuy Orthopaedics, Inc., 2023 WL 6883670, at *2 (S.D. Ala. Oct. 17, 2023) (citing Fed. R. Civ.

P. 26(b)(1)). Rule 26(b)(1) provides: 

Parties may obtain discovery regarding any nonprivileged matter that is relevant to 

any party’s claim or defense and proportional to the needs of the case, considering 

the importance of the issues at stake in the action, the amount in controversy, the 

parties’ relative access to relevant information, the parties’ resources, the 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 2 of 18
3

importance of the discovery in resolving the issues, and whether the burden or 

expense of the proposed discovery outweighs its likely benefit. Information within 

this scope of discovery need not be admissible in evidence to be discoverable.

Fed. R. Civ. P. 26(b)(1). 

A district court has broad discretion to compel or deny a discovery request. United States 

v. Cuya, 964 F.3d 969, 970 (11th Cir. 2020). “The Supreme Court has stressed on multiple 

occasions the need to construe the Rules liberally to allow for robust discovery.” Akridge v. Alfa 

Mut. Ins. Co., 1 F.4th 1271, 1276-77 (11th Cir. 2021) (citing Hickman v. Taylor, 329 U.S. 495, 

506 (1947); Schlagenhauf v. Holder, 379 U.S. 104, 114 (1964)). Nevertheless, “discovery, like all 

matters of procedure, has ultimate and necessary boundaries,” such as when “‘it can be shown that 

the examination is being conducted in bad faith or in such a manner as to annoy, embarrass or 

oppress the person subject to the inquiry’ or ‘when the inquiry touches upon the irrelevant or 

encroaches upon the recognized domains of privilege.’” Id. at 1277 (quoting Hickman, 329 U.S. 

at 507-08). 

b. Issuance of a Letter of Request Pursuant to the Hague Convention

“A letter of request, also known as a letter rogatory, is a ‘document issued by one court to 

a foreign court, requesting that the foreign court (1) take evidence from a specific person within 

the foreign jurisdiction ... and (2) return the testimony ... for use in a pending case.’” Wight v. 

Bluman, 2021 WL 8999538, at *1 (S.D. Fla. May 6, 2021). Rule 28(b)(2) of the Federal Rules of 

Civil Procedure and 28 U.S.C. § 1781(b)(2) authorize federal courts to issue letters of request 

directly to a foreign tribunal to enable a U.S. litigant to obtain non-party discovery from a foreign 

entity. Roche Diagnostics Corp. v. Priority Healthcare Corp., 2019 WL 4687016, at *4 (S.D. Ala. 

Jun. 6, 2019).

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 3 of 18
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In considering whether to issue a letter of request pursuant to the Hague Convention, “a 

court should determine both whether the discovery sought falls within the scope of discovery 

authorized by the Federal Rules of Procedure, as well as whether other considerations of comity 

warrant the requested discovery.” Calixto v. Watson Bowman Acme Corp., 2009 WL 3823390, at 

*18 (S.D. Fla. 2009). Therefore, as an initial matter, a court should apply the liberal discovery 

principles set forth in Rule 26 of the Federal Rules of Civil Procedure. See DHA Corp. v. BRC 

Operating Co., LLC, 2015 WL 13388248, at *1 (N.D. Ga. 2015). These considerations include 

breadth, relevance, the availability of information sought from other sources, and whether “the 

movant makes a reasonable showing that the evidence sought may be material or lead to the 

discovery of material evidence.” Roche Diagnostics Corp., 2019 WL 4687016, at *4 (quoting 

Netherby Ltd. v. Jones Apparel Grp., Inc., 2005 WL 1214345, at *1 (S.D. N.Y 2005)). 

After considering those initial factors, the court analyzes considerations of comity that 

attach to Hague Convention discovery requests as identified by the Supreme Court: 

(1) the importance to the ... litigation of the documents or other information 

requested; (2) the degree of specificity of the request; (3) whether the information 

originated in the United States; (4) the availability of alternative means of securing 

the information; and (5) the extent to which noncompliance with the request would 

undermine important interests of the United States, or compliance with the request 

would undermine important interests of the state whether the information is located. 

Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 

n. 28 (1987).

III. Discussion

The parties have brought the following disputes to the court’s attention: (1) Plaintiff’s

request for the court to issue a “Request for International Judicial Assistance Pursuant to the Hague 

Convention”; (2) Plaintiff’s request for documents relating to any past regulatory or litigation 

matters concerning false or misleading statements made by Defendants; (3) Plaintiff’s request for 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 4 of 18
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Viceroy to produce any communications with the Securities and Exchange Commission 

concerning MPT; and (4) Defendants’ request for any documents involving transactions between 

MPT and its two largest tenants, Steward and Prospect. The court analyzes each disputed category

in turn. 

a. Plaintiff’s Motion for Issuance of a Letter of Request Pursuant to the Hague 

Convention

Plaintiff notes that Defendant Perring has disclosed during discovery that he has an 

agreement with Cheyne Capital Management (UK) LLP (“Cheyne Capital”), a United Kingdombased company, entitling him and other Defendants to a monthly retainer of $30,000 in exchange 

for sharing Defendants’ research with Cheyne Capital. (Doc. # 80 at 4). According to Perring, the 

agreement also gives Defendants the right to a share of the profits, if any, that Cheyne Capital 

makes on short sales of MPT securities. (Id. at 5). In light of this purported agreement, Plaintiff 

contends that documents in the possession of Cheyne Capital will be critical in proving that 

Defendants acted recklessly or at least negligently in making false statements about MPT, in order 

to profit from their defamatory statements. (Id.). Accordingly, Plaintiff is requesting that the court 

issue a letter of request pursuant to the Hague Convention so Plaintiff can serve the following two 

document requests on Cheyne Capital, each seeking non-privileged documents for the period of 

January 1, 2021 to the present: 

REQUEST NO. 1 

Documents and Communications related to any Defendant, or any Person 

working on behalf of or in concert with any Defendant. For the avoidance of doubt, this 

Request encompasses:

A. Documents or Communications sent to, or received from, any Defendant;

B. Documents and Communications concerning any payments made to, or 

received from, any Defendant, or any Person working on behalf of or in 

concert with any Defendant; and 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 5 of 18
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C. Documents and Communications concerning contracts, memoranda of 

understanding, letters of intent, confidentiality agreements, non-disclosure 

agreements, profit-, risk-, loss-, or cost-sharing agreements, or other 

agreements or draft agreements of any kind, whether written or oral, 

between You and any Defendant, or any Person working on behalf of or in 

concert with any Defendant.

REQUEST NO. 2 

Documents and Communications relating to MPT or MPT Securities. For the

avoidance of doubt, this Request encompasses:

A. Documents and communications concerning any communications, 

interactions, discussions, or meetings between You and any other Person(s) 

concerning MPT, including, without limitation, communications between 

You and Hedgeye Risk Management, LLC, Robert Simone (Hedgeye), 

Keith McCullough (Hedgeye), Matthew Pascale (formerly of Point 72 Asset 

Management), Richard Mortell (Third Coast Real Estate Capital), Edwin 

Dorsey (Bear Cave), Greg Gillespie (formerly of Tacet Global Limited), 

Nick Helsby, Romaine Beurr, Jacques Griesel, Brian Spegele (The Wall 

Street Journal), Jonathan Weil (The Wall Street Journal), Laura Benitez 

(Bloomberg), Charlie Conchie, Moe Tkacik (The American Prospect), Teri 

Buhl (Buhl Reports), David Lindsay (The Shift), Aurelia Seidlhofer 

(Reorg), Claude Risner (Debtwire), or Peter Shalson;

B. Documents and Communications concerning contracts, memoranda of 

understanding, letters of intent, confidentiality agreements, non-disclosure 

agreements, profit-, risk-, loss-, or cost-sharing agreements, or other 

agreements or draft agreements of any kind, whether written or oral, 

between You and any other Person, including without limitation the Persons 

listed in Request No. 2 above, concerning MPT; 

C. All Documents and Communications concerning or relating to any 

payments or other consideration paid by You to any other Person, whether 

actual or potential, in exchange for or in connection with the creation or 

dissemination of Tweets, Reports, statements, or other material concerning 

MPT;

D. Documents and Communications related to the value of MPT Securities and 

any recommendation to purchase, sell, or short-sell MPT Securities;

E. Documents and Communications related to any Reports or other public 

statements concerning MPT, including Documents and Communications 

regarding any decision to create or publish any Report, Tweet, or other 

public statement concerning MPT, and any records of or related to any 

meetings concerning the foregoing; and 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 6 of 18
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F. Documents and Communications concerning any Transaction in MPT 

Securities by You or any Person acting on behalf of You, including any 

short sales of MPT Securities. 

(Id. at 5-6). 

In considering whether to issue a letter of request pursuant to the Hague Convention, a 

court must determine (1) whether the discovery sought falls within the scope of discovery 

authorized by the Federal Rules of Procedure, and (2) whether other considerations of comity 

warrant the requested discovery. Calixto v. Watson Bowman Acme Corp., 2009 WL 3823390, at 

*18 (S.D. Fla. 2009). The court analyzes each requirement below. 

i. The discovery sought falls within the scope of discovery authorized by 

the Federal Rules of Civil Procedure.

Under Rule 26(b)(1), a party may obtain discovery regarding any nonprivileged matter that 

is relevant to any party’s claims or defense and proportional to the needs of the case. Fed. R. Civ. 

P. 26(b)(1). When determining whether discovery is relevant and proportional, a court must 

analyze, among other things: (1) the importance of the issues at stake in the action; (2) the parties’ 

relative access to the relevant information; (3) the importance of the discovery in resolving the 

dispute; and (4) whether the burden of the proposed discovery outweighs its likely benefit. Id. 

Here, Defendants object only to Request No. 1. They argue this request seeks irrelevant 

information about transactions that have nothing to do with MPT or the facts of this case and, they 

assert, requiring production will turn this litigation into a series of mini-lawsuits about Defendants’ 

research of other companies and financial arrangements with a hedge fund. (Doc. # 81 at 2). 

Because Defendants do not dispute they publish information about companies they believe are 

overvalued and take short positions on those companies, Defendants argue that Plaintiff is chasing 

discovery on issues that will add no value to any party’s claims or defenses. (Id. at 2-3). 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 7 of 18
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Plaintiff asserts the documents requested will provide necessary insight into Defendants’ 

knowledge of the falsity or accuracy of their research, as well as evidence of their pattern and 

practice of publishing false and misleading statements in order to improperly profit. In Plaintiff’s 

view, although this evidence might not directly concern MPT, it is nonetheless relevant and 

discoverable because it is probative of Defendants’ regular practices when publishing research 

and, thus, their state of mind when publishing statements that concern MPT. (Doc. # 80 at 8).

Further, Plaintiff states this evidence can only be obtained from Cheyne Capital because

Defendants do not have access to all of the internal communications or documents requested from 

Cheyne Capital.

Ultimately, a district court has “broad discretion to compel or deny discovery ...” United 

States v. Cuya, 964 F.3d 969, 970 (11th Cir. 2020). Here, the court concludes that Plaintiff’s 

requested documents are relevant and proportional to the dispute at issue in this case. Assuming 

solely for purposes of this dispute that the statements of Defendants were indeed false, it follows 

that in-depth evidence of any agreements between Defendants and Cheyne Capital to publish 

research and statements about companies – whether those agreements involve MPT or another 

company – is directly relevant as it will shed light on whether Defendants had actual malice or 

motive, or alternatively whether their statements were merely mistaken. So, the information sought 

will be probative of Defendants’ state of mind when publishing the statements at issue about MPT. 

This is true even in light of Defendants’ acknowledgement that they conduct research and publish 

reports on dozens of companies for profit. 

Further, the information requested is proportional to the needs of the case, as it only 

requests correspondence within the past three years. And, numerous courts within this Circuit have 

granted discovery requests seeking information from a non-party under the Hague Convention that 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 8 of 18
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include temporal limitations (as Plaintiff does here). See Roche Diagnostics, 2019 WL 4687016, 

at *9; In re Zantac (Ranitidine) Prod. Liab. Litig., 2021 WL 5105028, at *2-3 (S.D. Fla. Oct. 27, 

2021). Plaintiff asserts that this information is only available from Cheyne Capital because (1) 

Defendants do not have access to the internal communications requested and (2) Defendants have 

not produced any communications with Cheyne Capital. (Doc. # 80 at 8-9). Therefore, the court 

readily determines that the discovery requested under Request No. 1 is relevant and proportional 

to the needs of the case under Rule 26(b)(1).

ii. The comity analysis weighs in favor of granting Plaintiff’s letter of 

request. 

The issuance and enforcement of a letter of request by the United States to a foreign court 

“rest[s] entirely upon the comity of courts toward each other, and customarily embody a promise 

of reciprocity.” Roche Diagnostics Corp., 2019 WL 4687016, at *5 (quoting 22 C.F.R. § 92.54). 

“The Supreme Court has reasoned that the court is ‘responsib[le] ... to base its [comity] analysis 

... on five factors’ when considering a discovery request abroad.” Cole v. Carnival Corp., 2023 

WL 5846832, at *2 (S.D. Fla. Sept. 11, 2023) (quoting Societe Nationale Industrielle Aerospatiale, 

482 U.S. at 544). Those five factors are: (1) the importance to the litigation of the documents or 

other information requested; (2) the degree of specificity of the request; (3) whether the 

information originated in the United States; (4) the availability of alternative means of securing 

the information; and (5) the extent to which noncompliance would undermine important interest 

of the United States, or compliance would undermine importance interests of the state where the 

information is located. Id. 

Here, the court finds that the comity analysis weighs in favor of granting Plaintiff’s Motion 

for the issuance of a letter of request pursuant to the Hague Convention. (Doc. # 80). As to the first 

two prongs, and as discussed above, the requested documents from Cheyne Capital are directly 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 9 of 18
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material to Plaintiff’s assertion that Defendants acted with actual malice, absence of mistake, or 

motive. The requests are also limited in temporal scope to the last three years. 

The court next turns to the third and fourth prongs. It does not appear that the information 

originated in the United States. However, Plaintiff alleges that the evidence sought can only be 

obtained from Cheyne Capital because Defendants either do not have access to certain internal 

communications requested or have failed to produce the requested communications with Cheyne 

Capital. Defendants do not refute this allegation. 

Finally, with respect to the balance of interest among nations, the parties do not point to 

(and this court is not independently aware of) any evidence suggesting that the interests of the 

United Kingdom would so outweigh those of the United States to bar the issuance of the letter of 

request in this action. Nonetheless, as other courts in this district have previously pointed out, just 

as an American court enforcing letters of request issued in a foreign court may limit enforcement 

of the requested discovery where appropriate, the United Kingdom is free to do so here as well. 

See Wight v. Bluman, 2021 WL 8999538, at *3 (S.D. Fla. May 6, 2021); Roche Diagnostics, 2019 

WL 4687016, at *7. As a result, the final factor of the analysis also weighs in favor of Plaintiff. 

Therefore, the court finds that the discovery sought in Plaintiff’s Letter of Request falls 

within the scope of discovery authorized by the Federal Rules of Procedure and the comity 

considerations warrant the requested discovery. Accordingly, Plaintiff’s Motion for the Issuance 

of a Letter of Request Pursuant to the Hague Convention (Doc. # 80) is due to be granted.

b. Plaintiff’s request for documents relating to any past regulatory or litigation 

matters concerning false or misleading statements made by Defendants. 

The second discovery dispute involves Plaintiff’s request for any documents relating to 

past regulatory or litigation matters concerning Viceroy making false or misleading statements. In 

particular, Plaintiff is interested in discovering information about a 2021 controversy where the 

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Financial Sector Conduct Authority (“FSCA”), a South African regulator, fined Viceroy’s 

members for spreading false and misleading claims about a South African bank on behalf of a 

hedge fund that was trying to drive down the bank’s stock price. (Doc. # 75 at 2). In its report, the 

FSCA found that Viceroy “made a concerted effort” to publish “false, misleading and deceptive 

[statements] regarding material facts” pursuant to a retainer and profit-sharing agreement with the 

hedge fund, similar to what Plaintiff alleges occurred in the current suit. (Id.). In addition, Plaintiff 

seeks information about a series of lawsuits involving Defendants and MiMedx Group, another 

business who sued Defendants for defamation after the former published a series of reports 

accusing MiMedx and its CEO of engaging in securities fraud by inflating the company’s earnings. 

(Doc. # 76 at 9). 

Defendants oppose this request, arguing that it seeks to discover inadmissible character 

evidence under Federal Rule of Evidence 404(b). (Doc. # 75 at 3). Further, because the FSCA 

decision resulted in a finding that Viceroy only made negligent misrepresentations in their report 

and was later overturned on jurisdictional grounds, Defendants believe it has no impact on the 

actual malice burden that Plaintiff must shoulder in this case. (Doc. # 76. at 8). In addition, 

Defendants note that after the suit was filed in the MiMedx case, the MiMedx CEO was indicted 

for the very securities fraud that Defendants accused him of and the fraud case against Defendants 

was dismissed. (Id. at 9). Therefore, Defendants assert that the discovery of this information is not 

relevant and that the effort to produce this unrelated material would constitute an undue burden on 

Defendants. (Id.). 

Defendants’ assertion that Plaintiff’s request seeks inadmissible character evidence under 

Rule 404(b)(1) misses the mark. To be sure, under Rule 404(b)(1), “[e]vidence of any other crime, 

wrong, or act is not admissible to prove a person’s character in order to show that on a particular 

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occasion the person acted in accordance with the character.” Fed. R. Evid. 404(b)(1). But, under 

Rule 404(b)(2), that same evidence may be admissible for another purpose, such as to prove 

“motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of 

accident.” Fed. R. Evid. 404(b)(2). Therefore, evidence of Viceroy’s previous regulatory or 

litigation matters regarding false statements about other businesses could be introduced to prove 

state of mind, intent, or absence of mistake in publishing statements about Plaintiff. See Restore 

Life USA, Inc. v. Lifenews.com, 2020 WL 9396589, at *2 (D. Colo. Oct. 20, 2020). 

Further, even if the information sought is ultimately determined to be inadmissible, 

Defendants’ argument is nonetheless unavailing because “[i]nformation within [the] scope of 

discovery need not be admissible in evidence to be discoverable.” Fed. R. Civ. P. 26(b)(1); see 

also Lorenzano v. Systems, Inc., 2018 WL 3827635, at n.3 (M.D. Fla. 2018). Instead, it must only

be relevant to any party’s claim and proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1). 

Relevance in the context of discovery “has been construed broadly to encompass any matter that 

bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may 

be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). The court concludes 

that Defendants’ prior litigation concerning the same exact issues alleged here undoubtedly bears 

on this dispute. 

Therefore, because the Federal Rules of Civil Procedure strongly favor full discovery 

whenever possible, Farnsworth v. Proctor & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985), 

Defendants’ objection to Plaintiff’s request for any documents relating to any past regulatory or 

litigation matters concerning Viceroy making false or misleading statements is due to be overruled.

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c. Plaintiff’s request for any communications between Defendants and the 

Securities and Exchange Commission concerning MPT. 

Plaintiff also requests that Defendants produce their communications with “any 

Governmental Authority, investment analysis, or journalist” concerning “MPT, MPT Securities, 

or any Operator-Tenant.” (Doc. # 75 at 5). In response, although Defendants confirm that they 

made a confidential whistleblower submission to the Securities and Exchange Commission (the 

“SEC”) and do not object to any request to turn this information over, they contend that certain 

statutes and regulations prohibit them from disclosing their communications with the SEC absent 

a court order. (Doc. # 76 at 9).

Although there are indeed several statutes and regulations that pertain to confidentiality of 

whistleblower submissions, the court has not discerned any legal limit that directly forbids a 

private party from disclosing its own communications with the SEC; instead, these statutes and 

regulations only prohibit the SEC from disclosing the identity or information which could 

reasonably be expected to reveal the identity of a claimed whistleblower. See 15 U.S.C. § 78u6(h)(2)1

; 17 C.F.R. § 240.21F-7(a).

2

Therefore, to the extent Defendants object to producing these communications on the basis 

that they cannot do so, that objection is due to be overruled. Nevertheless, as an additional 

protection for Defendants, the court will issue an order compelling Defendants to produce their 

1

“Except as provided in subparagraphs (B) and (C), the Commission and any officer or employee of the 

Commission shall not disclose any information, including information provided by a whistleblower to the 

Commission, which could reasonably be expected to reveal the identity of a whistleblower...” 15 U.S.C. § 78u6(h)(2)(A) (emphasis added).

2

“Pursuant to Section 21F(h)(2) of the Exchange Act (15 U.S.C. 78u-6(h)(2)) and § 240.21F-2(c), the 

Commission will not disclose information that could reasonably be expected to reveal the identity of a whistleblower 

provided that the whistleblower has submitted information utilizing the processes specified in § 240.21F-9(a)...” 17 

C.F.R. § 240.21F-7(a) (emphasis added). 

Case 2:23-cv-00408-RDP Document 83 Filed 01/12/24 Page 13 of 18
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communications with the SEC pursuant to an appropriate protective order, which should ease 

Defendants’ concern.

d. Defendants’ request for any documents involving transactions between MPT 

and Steward and Prospect. 

Finally, the court analyzes Defendants’ document requests relating to certain transactions 

between MPT and two of its tenants, Steward and Prospect.

As discussed above, this case centers around MPT’s allegations that Defendants made false 

and defamatory statements about MPT. Among the allegedly defamatory statements are 

Defendants’ published statements that: (1) MPT engaged in roundtripping by providing financial 

support to its tenants and (2) that MPT engaged in fraud and deceit and is scamming its investors.

(Doc. # 76 at 1-2). MPT alleges that these defamatory statements caused its stock price to plummet. 

To rebut Plaintiff’s defamation claim, Defendants intend to prove that MPT is in fact engaged in 

roundtripping and securities fraud. (Id. at 2). Further, they intend to present evidence that the drop 

in MPT’s stock price was not due to Defendants’ publications, but instead due to “MPT’s 

overexposure to financially stressed tenants, its uncommercial transactions with its tenants 

designed to provide them a financial bailout to mask their insolvency, and MPT’s false and 

misleading statements about these transactions.” (Id. at 5). 

To establish these matters, Defendants are requesting documents involving transactions 

between MPT and two of its largest tenants, Steward and Prospect. Defendants’ briefing suggests 

that the following transactions are at issue here: (1) MPT’s $140 million loan to Steward’s 

syndicated ABL facility, purportedly made “so that Steward could stay afloat and pay MPT rent” 

(Doc. # 76 at 5); (2) MPT’s agreement to “bail out” Prospect and receive a 49% interest in PHP 

Holdings in lieu of $543 million in rent and other financial obligations that Prospect owed (Id. at 

7); and (3) MPT’s $150 million loan to Steward (Id.). Defendants contend that evidence of these 

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15

transactions will substantiate their reports that Plaintiff engaged in fraud and roundtripping and are 

also relevant to proving that MPT’s drop in stock price was its own fault. 

In response, Plaintiff asserts that Defendants’ requests for documents related to Steward’s 

ABL facility and MPT’s agreement to “bail out” Prospect seek irrelevant information because (1) 

neither of the transactions are mentioned in any of Viceroy’s reports or the basis of any defamatory 

statement alleged in the complaint, and (2) Plaintiff already agreed to produce documents relating 

to numerous other Steward and Prospect transactions that were discussed in Viceroy’s reports. 

(Doc. # 75 at 9). Further, Plaintiff notes that both of these transactions occurred after Defendants 

published the defamatory statements, and argue that they cannot be used to prove the “truth” of 

Defendants’ statements. (Id.). Finally, Plaintiff contends that these transactions are irrelevant to 

the damages calculation, because MPT’s stock price could not react to any information that was 

not made public. (Id. at 10). 

Plaintiff is correct that, to the extent that transactions or events occurred after the alleged 

defamatory statements were published, the requested documents cannot be used to prove 

Defendants’ reasons for making prior statements. “The truth of a defamatory imputation of fact 

must be determined as of the time of the defamatory publication. Facts alleged to exist by the 

defamer may subsequently occur, but his foresight or luck in anticipating them will not protect 

him from liability for stating their pre-existence.” Restatement (Second) of Torts § 581A(g) 

(1977). Because of this, numerous district courts have denied discovery requests in defamation 

cases as overbroad and non-proportional when they seek information about matters occurring after 

the defamatory statements were made. See Benevis, LLC v. Mauze & Bagby, PLLC, 2015 WL 

12763537, at *7 (S.D. Tex. 2015) (holding that requested documents were only relevant to the 

extent they originated before the defendants’ alleged defamatory advertising campaign ended 

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because “[a]fter-the-fact events cannot convert a factually false statement into a true one”); 

Blankenship v. Fox News Network, LLC, 2020 WL 9718873, at *21 (S.D. W. Va. 2020) (finding

discovery requests overbroad because they were not limited to the broadcast dates on which the 

defamatory statements were made).

Because one of the transactions about which Defendants are requesting documents – the 

$150 million loan to Steward – took place in 2022, months before Viceroy published its first report, 

the court agrees with Defendants that information related to this transaction is directly relevant to 

proving the truth of Viceroy’s alleged defamatory publication. But, because MPT’s $140 million 

loan to Steward and MPT’s agreement to “bail out” Prospect occurred after the alleged defamatory 

statements were published, any document requests concerning these transactions are overbroad 

and irrelevant to proving the veracity of those statements. 

Likewise, the court agrees with Plaintiff that the discovery requested from these two 

transactions would not be relevant to the calculation of damages. To be sure, Plaintiff’s complaint 

alleges that “[s]ince Viceroy began its attacks, MPT’s stock price is down over 35 percent...”. 

(Doc. # 1 at ¶ 8). In an effort to say they are not responsible for this plunge, Defendants have cited

to evidence that MPT’s stock price was already actively falling before Viceroy ever issued a 

publication about MPT3and point to multiple publications from other journalistic sources –

released both before and after their report was published – that discuss MPT’s transactions with 

Steward and Prospect in a negative light. (Doc. # 76 at 3-5). However, Defendants have failed to 

show how the private details of these transactions at issue now could be relevant to this showing, 

as MPT’s stock price could not react to any information that was not publicly known to investors. 

3

“In December of 2021, MPT’s stock peaked at $23.35 per share. When Viceroy issued its first publication 

on January 26, 2023 – over a year later – the stock had already plummeted to $12.58 per share. And that demise 

continues today, with MPT’s stock fluctuating between $4 and $5 per share.” (Doc. # 76 at 2). 

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“The Supreme Court has stressed on multiple occasions the need to construe the Rules 

liberally to allow for robust discovery.” Akridge, 1 F.4th at 1276-77 (citing Hickman, 329 U.S. at

506) (advising that “the discovery provisions are to be applied as broadly and liberally as 

possible”). “Nevertheless, ‘discovery, like all matters of procedure, has ultimate and necessary 

boundaries,’” such as when “it can be shown that the examination is being conducted in bad faith 

or in such a manner as to annoy, embarrass or oppress the person subject to the inquiry” or “when 

the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege.” 

Id. at 1277 (citing Hickman, 329 U.S. at 507-08). 

Relevance in the Rule 26(b)(1) context encompasses “any matter that bears on, or that 

reasonably could lead to other matter[s] that could bear on, any issue that is or may be in the case.” 

Id. at 1276 (quoting Oppenheimer, 437 U.S. at 351). Here, the court concludes that Defendants’ 

requests for documents concerning (1) MPT’s $140 million loan to Steward’s syndicated ABL 

facility and (2) MPT’s agreement to “bail out” Prospect and receive a 49% interest in PHP 

Holdings in lieu of $543 million in rent and other financial obligations that Prospect owed are 

irrelevant to this matter. Those transactions occurred after Defendants’ allegedly defamatory 

statements were published; therefore, information about those events will have no bearing on either 

the veracity of Defendants alleged defamatory statements or the calculation of damages. 

Further, the court concludes that the requested discovery on these two transactions is nonproportional to the case. The factors relevant to proportionality are “the importance of the issues 

at stake in the action, the amount in controversy, the parties’ relative access to relevant information, 

the parties’ resources, the importance of the discovery [needed to resolve the issues], and whether 

the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 

26(b)(1). Without question, the issues at stake in this litigation are very important. But, as 

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previously discussed, the discovery requested seeks transactions that occurred well after the 

complaint was filed in this action, and thus have will have no impact on resolving this matter. As 

a result, the burden of producing the documents would far outweigh their benefit in the case. 

Therefore, to the extent Plaintiff objects to producing documents relating to MPT’s $150 

million loan to Steward that occurred before Defendants published the alleged defamatory 

statements, that objection is due to be overruled. However, Plaintiff’s objections to producing (1) 

documents related to MPT’s $140 million loan to Steward’s syndicated ABL facility and (2) 

MPT’s agreement to “bail out” Prospect and receive a 49% interest in PHP Holdings in lieu of 

$543 million in rent and other financial obligations that Prospect owed are due to be sustained, as 

these transactions occurred after the publication at issue in this matter and have no bearing on the 

veracity of Defendants’ statements or the calculation of damages. 

IV. Conclusion 

For the reasons discussed above, (1) Plaintiff’s Motion for Issuance of a Letter of Request 

Pursuant to the Hague Convention (Doc. # 80) is due to be granted, all of Defendants’ objections 

to producing discovery are due to be overruled, and (2) Plaintiff’s objection to producing discovery 

is due to be overruled in part and sustained in part. An order consistent with this memorandum 

opinion will be entered. 

DONE and ORDERED this January 12, 2024.

_________________________________

R. DAVID PROCTOR

UNITED STATES DISTRICT JUDGE

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