Opinion ID: 2686105
Heading Depth: 2
Heading Rank: 4

Heading: Post-trial discovery sanctions

Text: Multiple problems with TD Bank’s discovery came to light during and after the trial. For example: 5 1) TD Bank’s Federal Rule of Civil Procedure 30(b)(6) designee testified before trial that there were no anti-money laundering (“AML”) alerts for Rothstein’s bank accounts until late September 2009 and less than five thereafter. But weeks before trial, TD Bank produced around 150 pages of AML alerts for Rothstein’s accounts; TD Bank then produced more AML alerts, including alerts spanning 2008 to 2009, after trial commenced. 4 Coquina was clear as to the amounts it asked the jury to award. It explained to the jury that it was “in the hole $20.5 million” at the time of trial because of its actual loss of $6.7 million, plus interest, and the $12.5 million settlement payment it had made to the Trustee. Coquina then explained to the jury that of the amount it sought, around $32.8 million, it would keep $20.5 million, and the remaining $12.5 million would go to the Trustee pursuant to the settlement agreement. In other words, the $32.8 million would “mak[e] Coquina whole,” and the Trustee “w[ould] get another [$]12.5 million dollars, on top of the [$]12.5 [million] that Coquina ha[d] already paid him,” pursuant to the settlement. Thus, the total amount Coquina would pay in connection with the settlement (i.e., the amount “clawed back” by the Trustee) would be around $25 million. 5 Those seeking a more detailed account should see the district court’s order on the motions for sanctions. Coquina Invs. v. Rothstein, No. 10-60786-Civ, 2012 WL 3202273 (S.D. Fla. Aug. 3, 2012). 8 Case: 12-11161 Date Filed: 07/29/2014 Page: 9 of 41 2) Two TD Bank employees submitted affidavits during trial denying the existence of a document entitled the “Standard Investigative Protocol” (“SIP”), which outlined investigatory steps that employees must take whenever an account alerts. TD Bank confirmed post-trial that this protocol in fact exists. Moreover, the two employees who submitted the affidavits could have found the protocol by searching the relevant shared drive on their computers or, in the case of one employee, by reviewing his e-mails. 3) One of the documents TD Bank produced during discovery was a Customer Due Diligence (“CDD”) form for RRA’s bank accounts. The original CDD contained a red banner running across the top of the page with the words “HIGH RISK” in white, capital letters. The form produced to Coquina, however, did not contain a discernible “HIGH RISK” banner. 4) Two e-mail chains between TD Bank employees containing information relevant to whether Spinosa had signed and issued the “lock letters” described earlier were never produced to Coquina. 5) A consultant’s report on Rothstein’s accounts, which was created for an unrelated matter after discovery in this case had closed, was never produced to Coquina or to TD Bank’s former outside counsel, Greenberg Traurig LLP. Coquina moved post-trial for sanctions against TD Bank and Greenberg Traurig based on these alleged discovery violations, which the district court 9 Case: 12-11161 Date Filed: 07/29/2014 Page: 10 of 41 granted. The court noted that TD Bank had made most of the documents at issue available to Greenberg Traurig, which failed to properly produce them to Coquina. But the court also found, inter alia, that TD Bank willfully failed to correct Greenberg Traurig’s mistakes as to the production of the CDD, that TD Bank willfully concealed documents from Greenberg Traurig, that TD Bank’s employees failed to adequately search for the SIP before signing affidavits denying the protocol’s existence, and that TD Bank’s Rule 30(b)(6) witness was, at best, unprepared. Based on these findings, the court concluded that Greenberg Traurig acted negligently and that TD Bank acted willfully in failing to comply with discovery orders. Accordingly, the court entered an order under Federal Rule of Civil Procedure 37(b)(2)(A)(i) that two facts—that TD Bank’s monitoring and alert systems were unreasonable and that TD Bank had actual knowledge of Rothstein’s fraud—would be taken as established for purposes of this action. The court also ordered TD Bank and Greenberg Traurig to pay Coquina’s attorney’s fees associated with litigating the sanctions and other related motions. 10 Case: 12-11161 Date Filed: 07/29/2014 Page: 11 of 41