DARRIN P. GAYLES, UNITED STATES DISTRICT JUDGE.
The Court has carefully considered the briefs and arguments of counsel, the exhibits and testimony submitted, the record, and the applicable law and is otherwise fully advised in the premises. For the reasons that follow, the motion to disqualify shall be denied.
Plaintiff JAWHBS, LLC, has sued the Defendants, developers and their legal counsel, bringing antitrust and other claims arising from allegations that the Defendants colluded and participated in a bid-rigging scheme to acquire parcels of land in the Brickell Avenue section of Miami, Florida, at a depressed price during a bankruptcy auction and sale. Given that the Court has already given a detailed account of the factual allegations and legal claims asserted in this case in its previous order on the Defendants' motions to dismiss, see JAWHBS, LLC v. Arevalo, No. 15-24176, 2016 WL 4142498, at *1-3 (S.D. Fla. Aug. 4, 2016), its recitation today will be limited to the circumstances giving rise to the instant motion.
A brief overview of the relationships between and among the Alianza Defendants is instructive. Defendant Alianza Holdings, LLC ("Alianza Holdings"), wholly owns Defendant Alianza Financial Services, LLC ("Alianza Financial"). Defendant Omar Botero is the co-manager of Alianza Financial and the CEO of Alianza Holdings. Alianza Holdings owns 99% and Alianza Financial owns 1% of a company called Crystal Tower Partners II, LLC, which, in turn, owned 49.5% of a nowdefunct company called Crystal Tower on Brickell Plaza, LLC ("Crystal Tower").
Defendant Al Delaney, who appears pro se in this action, was also involved in these negotiations, although his role and the extent of his involvement are disputed by the litigants. Delaney is a former attorney who was previously licensed in Connecticut and Massachusetts. The Alianza Defendants describe Delaney as "an independent contractor for Alianza Financial ... [who] is neither an owner nor a manager of Crystal Tower or Alianza Financial." Defs.' Mot. at 3. By contrast, Plaintiff's Counsel has proffered emails from the relevant time period in which Delaney described himself as a "Mgr." — i.e., Manager — or Chief Operating Officer of Alianza Financial. See Pl.'s Counsel's Ex. 2; Pl.'s Counsel's Supp. Ex. 1.
On March 19, 2016, Delaney made his initial disclosures in this action pursuant to Federal Rule of Civil Procedure 26(a). He first produced to all counsel a document titled "Rule 26 Disclosures by Albert Delaney." Pl.'s Counsel's Ex. 3. Within that document, he identified sixteen categories of documents he intended to produce, with many categories explicitly relating to Crystal Tower's offer to buy the property at issue. One of the listed categories of documents — Category O — read, "Invoices for legal services tendered by Carlton Fields, PA (as they were known then)." Id. at 5. At the time these documents were produced, the Alianza Defendants were represented by attorneys from two different firms — Ian Martinez of Bello & Martinez, PLLC, and Andrew Kawel and Edward Maldonado of Kawel, PLLC.
On April 11, 2016, Delaney sent the following email to Plaintiff's Counsel (specifically, Adam Breeden), copying all other counsel:
Pl.'s Counsel's Ex. 4. He then provided 169 pages of Bates-stamped documents to all counsel as he described. Included in this production was a set of billing records prepared by Carlton Fields (stamped DELANEY_000115 through DELANEY_000169).
Delaney's deposition was noticed and set for July 25, 2016, in Houston, Texas. Breeden sent several emails to Botero in advance of the deposition. One email, sent to Botero and all counsel of record, contained a link to download the exhibits for the
Delaney appeared at his deposition represented by counsel. While attorneys for the other parties were also present, Botero — who at that time was without representation — was not. During the deposition, Breeden asked Delaney what counsel at Carlton Fields told him regarding the legality of the negotiations between Crystal Tower and the bankruptcy trustee. Delaney's counsel objected, asserting that the matter was subject to attorney-client privilege. Delaney affirmatively waived his privilege on the record and Breeden continued with his questioning. No other counsel in attendance objected to the billing records or related questioning.
Botero's deposition was held on August 3, 2016. At the deposition, Breeden distributed a book of marked exhibits, which included the disputed billing records, to all in attendance. When Breeden sought to ask questions about or based on the billing records, the Alianza Defendants' present counsel, Thomas Lehman, objected and asserted attorney-client privilege on Botero's behalf. Botero stated that he did not waive the attorney-client privilege with respect to the billing records, after which Breeden continued with his questioning about their substance. The Alianza Defendants contend that they learned after Botero's deposition that Breeden had previously introduced and inquired into the substance of the billing records at Delaney's deposition.
The Alianza Defendants filed the instant motion to disqualify Plaintiff's Counsel on September 19, 2016. They argue that Plaintiff's Counsel "has taken unfair advantage of the inadvertent and unauthorized disclosure of privileged documents." Defs.' Mot. at 6. The motion has been fully briefed, and the Court held an evidentiary hearing on the motion on November 9, 2016.
"Because a party is presumptively entitled to the counsel of his choice, that right may be overridden only if `compelling reasons' exist." In re BellSouth Corp., 334 F.3d 941, 961 (11th Cir. 2003) (quoting Tex. Catastrophe Prop. Ins. Ass'n v. Morales, 975 F.2d 1178, 1181 (5th Cir. 1992)). Thus, courts consider disqualification of a party's chosen counsel to be "a drastic remedy that should be resorted to sparingly." Armor Screen Corp. v. Storm Catcher, Inc., 709 F.Supp.2d 1309, 1310 (S.D. Fla. 2010); see also Metrahealth Ins. Co. v. Anclote Psychiatric Hosp., Ltd., 961 F.Supp. 1580, 1582 (M.D. Fla. 1997) (stating that "courts should hesitate to impose" orders for disqualification "except when absolutely necessary"). The moving party bears the burden of proving grounds for disqualification. In re BellSouth Corp., 334 F.3d at 961.
The Alianza Defendants' asserted grounds for disqualification is Plaintiff's Counsel's receipt of privileged documents from Delaney, in the form of the Carlton Fields billing records. "The receipt of an inadvertent disclosure warrants disqualification when the movant establishes that: (1) the inadvertently disclosed information is protected, either by privilege or confidentiality; and (2) there is a `possibility' that the receiving party has obtained an `unfair' `informational advantage' as a result of the inadvertent disclosure." Moriber v. Dreiling, 95 So.3d 449, 454 (Fla. 3d DCA 2012) (quoting Abamar Hous. & Dev., Inc. v. Lisa Daly Lady Décor, Inc., 724 So.2d 572 (Fla. 3d DCA 1998) ("Abamar II")); see also Atlas Air, Inc. v. Greenberg Traurig, P.A., 997 So.2d 1117 (Fla. 3d DCA 2008); Abamar Hous. & Dev., Inc. v. Lisa Daly Lady Décor, Inc.,
Before the Court need delve into the substance of the parties' arguments regarding privilege, waiver of or exceptions to any privilege, or any possibility of unfair informational advantage, it must first address a threshold matter that the Alianza Defendants seem to presume has been satisfied here. For a movant seeking disqualification of counsel to prevail, he must, at the outset, prove that the disclosure of documents was
"Inadvertent" has been defined as "not focusing the mind on a matter ...; unintentional,"
While none of these cases explicitly hold that the
Upon consideration of the circumstances at issue, it is clear the Alianza Defendants have not carried their burden. Delaney, a former attorney, intentionally identified the billing records as a category of documents he intended to produce pursuant to Rule 26(a). He intentionally Bates stamped the billing records along with his other documents and included them with his production. And he intentionally sent those Bates-stamped billing records — a significant portion of the document production (nearly one-third of the 169 pages he produced) — to all counsel of record in this case. None of these actions can be characterized as "unintentional," "accidental," or "careless," nor can it reasonably be said that Delaney had not focused his mind on the matter at hand — i.e., ostensibly to fulfill his Rule 26(a) responsibility to make an initial disclosure — when producing the billing records to counsel for all parties. At bottom, these circumstances are unlike those found in any of the inadvertent-disclosure cases detailed above: the billing records are the documents Delaney intended to produce, and the billing records are the documents he did, in fact, produce.
Accordingly, the Court finds that the Alianza Defendants have failed to prove that Delaney's disclosure of the Carlton Fields billing records was inadvertent.