# Petrus Advisers Investments Fund, L.P.

> District Court, S.D. Florida · May 26, 2023

URL: https://www.frixlaw.com/law-library/cases/10121975

## Case

- **Court:** District Court, S.D. Florida
- **Decided:** May 26, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

Case No. 22-cv-22437-BLOOM

IN RE PETRUS ADVISERS INVESTMENTS FUNDS, L.P.,
by its General Partner, PETRUS ADVISERS INVESTMENTS
GENERAL PARTNER, INC.,

Petitioner.
____________________________________________________/

ORDER ON OBJECTIONS TO MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATIONS

THIS CAUSE is before the Court upon the Motion to Vacate, ECF No. [6] (“Motion”),
filed on September 19, 2022, by non-parties Starwood Capital Group Management L.L.C., BSS
SCG GP Holdings L.L.C., Starwood Capital Group Holdings GP L.L.C., SCGG II GP, L.L.C.,
Starwood Capital Group Global II L.P., Starwood XI Management, L.P., and Starwood XI
Management GP, L.L.C. (collectively, the “Starwood Entities”). Petitioner Petrus Advisers
Investments Fund, L.P. (“Petrus”) filed a Response. ECF No. [13]. The Starwood Entities filed a
Reply. ECF No. [16].
The Motion was referred to Magistrate Judge Alicia M. Otazo-Reyes for a Report and
Recommendation (“R&R”). ECF No. [8]. On March 9, 2023, Judge Otazo-Reyes issued an R&R
in which she recommended that the Motion be denied. ECF No. [24]. On March 23, 2023, the
Starwood Entities filed Objections to the R&R, ECF No. [25], to which Petrus filed a Response.
ECF. No. [27].
The Court has conducted a de novo review of the R&R, the Objections, and the record in
this case in accordance with 28 U.S.C. § 636(b)(1)(C). See Williams v. McNeil, 557 F.3d 1287,
1291 (11th Cir. 2009). For the reasons set forth below, the Court adopts the R&R in full.
I. BACKGROUND
On August 2, 2022, Petrus initiated this proceeding with the filing of its Ex Parte
Application for Judicial Assistance in Aid of Foreign Proceeding Pursuant to 28 U.S.C. § 1782,
ECF No. [1] (“Section 1782 Application”). Therein, Petrus requested an order permitting it to
“obtain documentary and testimonial discovery from individuals and entities within [this district]

for use in three related foreign proceedings pending before the Commercial Court in Vienna,
Austria.” Id. at 1. The three proceedings in Austria were initiated by Petrus, a minority shareholder
of an Austrian company, CA Immobilien Anlagen AG (“CA Immobilien”), against the majority
shareholder of CA Immobilien, SOF-11 Klimt CAI S.a.r.l I (“SOF-11”). Id. at 1, 5. The three
Austrian lawsuits are based on allegations that SOF-11 took “numerous illegal actions to prefer its
owner’s interests at the expense of [CA Immobilien] and its shareholders overall.” Id. at 2.
According to Petrus, the lawsuits are analogous to shareholder derivative actions under U.S. law.
Id. at 13.
According to the Section 1782 Application, SOF-11 is owned and controlled by Starwood

Capital Group Management L.L.C. (“Starwood Capital”), a private investment firm headquartered
in Miami Beach. Id. at 5. Petrus asserts that the additional Starwood Entities are also “in the chain
of ownership of SOF-11.” Id. at 10. Accordingly, in its Section 1782 Application, Petrus sought
information relating to the Starwood Entities’ involvement with SOF-11 and CA Immobilien. Id.
at 5. They sought to file “substantially identical discovery requests” on all seven Starwood Entities,
with the intention that “the recipients will identify the relevant deponents,” allowing Petrus to
excuse the other entities from discovery obligations. Id. at 11.
On August 3, 2022, the Court granted Petrus’s Application. ECF No. [3]. Therein, the
Court authorized Petrus to serve the proposed subpoenas and instructed that a party may move to
quash the subpoenas pursuant to the procedures set forth in Federal Rule of Civil Procedure 45.
Id.
On September 19, 2022, the Starwood Entities filed their Motion. ECF No. [6]. Therein,
they argue that the Court should vacate its Order granting Petrus’s Section 1782 Application. See
generally id. In the alternative, they move to quash the subpoenas under Rules 26 and 45. Id. at

15-20.
In her R&R, Judge Otazo-Reyes recommended denying Starwood Entities’ Motion. ECF
No. [24]. On March 23, 2023, the Starwood Entities filed their Objections, arguing that Judge
Otazo-Reyes erred in rejecting their arguments in support of their Motion to Vacate or Quash. ECF
No. [25]. Petrus filed a Response in which it defends the R&R’s conclusions. ECF No. [27].
II. LEGAL STANDARD
A. Objections to Magistrate Judge’s R&R
“In order to challenge the findings and recommendations of the magistrate judge, a party
must file written objections which shall specifically identify the portions of the proposed findings

and recommendation to which objection is made and the specific basis for objection.” Macort v.
Prem, Inc., 208 F. App’x 781, 783 (11th Cir. 2006) (quoting Heath v. Jones, 863 F.2d 815, 822
(11th Cir. 1989)) (alterations omitted). The objections must also present “supporting legal
authority.” S.D. Fla. L. Mag. J.R. 4(b). The portions of the R&R to which an objection is made are
reviewed de novo only if those objections “pinpoint the specific findings that the party disagrees
with.” United States v. Schultz, 565 F.3d 1353, 1360 (11th Cir. 2009); see also Fed. R. Civ. P.
72(b)(3). If a party fails to object to any portion of the magistrate judge’s report, those portions are
reviewed for clear error. Macort, 208 F. App’x at 784 (quoting Johnson v. Zema Sys. Corp., 170
F.3d 734, 739 (7th Cir. 1999)); see also Liberty Am. Ins. Grp., Inc. v. WestPoint Underwriters,
L.L.C., 199 F. Supp. 2d 1271, 1276 (M.D. Fla. 2001). “It is improper for an objecting party to ...
submit [ ] papers to a district court which are nothing more than a rehashing of the same arguments
and positions taken in the original papers submitted to the Magistrate Judge. Clearly, parties are
not to be afforded a ‘second bite at the apple’ when they file objections to an R & R.” Marlite, Inc.
v. Eckenrod, No. 10-23641-CIV, 2012 WL 3614212, at *2 (S.D. Fla. Aug. 21, 2012) (quoting
Camardo v. Gen. Motors Hourly-Rate Emps. Pension Plan, 806 F. Supp. 380, 382 (W.D.N.Y.

1992)). A district court may accept, reject, or modify a magistrate judge’s report and
recommendation. 28 U.S.C. § 636(b)(1).
B. Section 1782
Pursuant to 28 U.S.C. § 1782, a district court may grant an application for judicial
assistance where four criteria are met:
(1) the request must be made “by a foreign or international tribunal,” or by “any
interested person”; (2) the request must seek evidence, whether it be the “testimony
or statement” of a person or the production of “a document or other thing”; (3) the
evidence must be “for use in a proceeding in a foreign or international tribunal”;
and (4) the person from whom discovery is sought must reside or be found in the
district of the district court ruling on the application for assistance.
In re Clerici, 481 F.3d 1324, 1331-32 (11th Cir. 2007) (citing 28 U.S.C. § 1782(a)).
However, “a district court is not required to grant a § 1782(a) discovery application simply
because it has the authority to do so.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241,
264 (2004) (citation omitted). If all of the statutory requirements are met, the Court must consider
the following discretionary “Intel factors”:
(1) whether ‘the person from whom discovery is sought is a participant in the
foreign proceeding’ . . . ; (2) ‘the nature of the foreign tribunal, the character of the
proceedings underway abroad, and the receptivity of the foreign government or the
court or agency abroad to U.S. federal-court judicial assistance’; (3) ‘whether the
§ 1782(a) request conceals an attempt to circumvent foreign proof-gathering
restrictions or other policies of a foreign country or the United States’; and (4)
whether the request is otherwise ‘unduly intrusive or burdensome.’
Victoria, LLC v. Likhtenfeld, 791 F. App'x 810, 817 (11th Cir. 2019) (quoting Intel, 542 U.S. at
264-65). “Once discovery is authorized under § 1782, the federal discovery rules, Fed. R. Civ. P.
26–36, contain the relevant practices and procedures for the taking of testimony and the production
of documents.” In re Clerici, 481 F.3d at 1336.
III. ANALYSIS

The Court begins by clarifying the standard of review it will apply to the Starwood Entities’
arguments. In their Objections, the Starwood Entities argue that Judge Otazo-Reyes erred in
rejecting Starwood Entities’ arguments that the second, third, and fourth Intel factors weigh in
their favor, and in finding that the discovery requests are relevant and proportional to the needs of
the underlying Austrian proceedings. See generally ECF No. [25]. The Court will review those
issues de novo.
The Starwood Entities attempt to raise additional objections in footnotes. See, e.g., ECF
No. [25] at 9 n.5, 22 n. 12. In one, for example, the Starwood Entities assert that the R&R “also
erred in concluding that the first and third Section 1782 criteria are met here and that Intel Factor

1 does not weigh against having granted the Ex Parte Application.” ECF No. [25] at 9 n.5. Such
conclusory assertions fail to “pinpoint the specific findings that the party disagrees with,” Schultz,
565 F.3d at 1360, and are devoid of “supporting legal authority.” S.D. Fla. L. Mag. J.R. 4(b).
Accordingly, rather than applying de novo review to such unsupported arguments, the Court has
reviewed these issues for clear error, and has found none. Macort, 208 F. App’x at 784.
The Court proceeds with the issues that the Starwood Entities have properly argued in their
Objections. The Court addresses them in the reverse order presented by the Starwood Entities,
since the first logical issue is whether any discovery is appropriate under Section 1782, and the
second issue is whether that discovery should be limited.
A. The Intel Factors
As noted above, the Starwood Entities have presented no argument as to how Magistrate
Judge Otazo-Reyes erred in concluding that all four § 1782 statutory factors are met. Reviewing
for clear error, the Court finds none with respect to the Magistrate Judge’s conclusion that those
four factors are met. The Court turns to the three Intel factors that the Starwood Entities dispute

with cognizable argument.
1. The Second Intel Factor
The second discretionary Intel factor instructs courts to “take into account the nature of the
foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the
foreign government or the court or agency abroad to U.S. federal-court judicial assistance.” Intel,
542 U.S. at 264. In their original Motion, the Starwood Entities argued that this factor disfavored
granting Petrus’s Section 1782 Application because the Austrian actions turn on predominantly
legal, as opposed to factual determinations, and because Petrus failed to provide direct evidence
that the Austrian court will be receptive to this Court’s judicial assistance. ECF No. [6] at 13-16.

The R&R concluded that this factor does not weigh against granting Petrus’s Application. ECF
No. [24] at 11.
In their Objections, the Starwood Entities first complain that Magistrate Judge Otazo-
Reyes failed to squarely address their argument that the tribunal and nature of the Austrian
proceedings do not support the requested discovery. ECF No. [25] at 22. Of Starwood Entities’
two contentions in support of this sub-argument, one is plainly meritless and the second is
misplaced within the discussion of the second Intel factor. Starwood Entities first contends that
SOF-11’s liability in the Austrian proceedings will turn on “legal, not factual determinations.”
ECF No. [25] at 16. The Starwood Entities’ characterization of the Austrian cases as revolving
solely on legal determinations is not convincing, since a key factual issue appears to be the extent
to which members of CA Immobilien’s supervisory board were in fact undisclosed representatives
of Starwood Capital. ECF No. [1] at 5. Regardless, the Court is disinclined to “conduct a detailed
analysis of foreign law” to determine the overlap between factual and legal issues in the Austrian
proceedings. In re Pimenta, 942 F. Supp. 2d 1282, 1289 (S.D. Fla. 2013). Second, the Starwood
Entities assert that allowing discovery here “would potentially allow access to information that”

an Austrian special auditor might preclude. ECF No. [6] at 14. That is essentially an argument that
the Application is an “attempt to circumvent foreign proof-gathering restrictions,” precisely what
the third Intel factor is intended to address. Intel, 542 U.S. at 264-65.
Next, the Starwood Entities claim that the R&R misconstrued their receptivity argument to
be that Petrus was required to “advise the Austrian tribunal of its Section 1782 Application or
establish that the discovery will be admissible in the Austrian proceedings.” ECF No. [25] at 22.
The Starwood Entities explain that they merely intended to argue that Petrus’s failure to seek the
requested discovery in the Austrian court first is “something for the Court to consider in
determining whether the Austrian Court would be receptive[.]” ECF No. [25] at 22 (citing Green

Dev. Corp. S.A. De C.V. v. Zamora, No. 15-cv-21594, 2016 WL 2745844 (S.D. Fla. May 10,
2016). The Court agrees with the Starwood Entities that it is somewhat relevant that Petrus did not
first seek discovery of the information at issue in the Austrian proceedings. See, e.g., Green, 2016
WL 2745844 at *8. However, the Magistrate Judge correctly concluded that there is no
“exhaustion requirement” in Section 1782, ECF No. [24] at 10 (quotation marks omitted), and it
appears likely that the requested discovery of the Starwood Entities is outside the territorial
jurisdiction of the Austrian court. Id.
In Dep’t of Caldas v. Diageo PLC, 925 F.3d 1218 (11th Cir. 2019), the Eleventh Circuit
adopted a “middle-of-the-road approach with respect” to the second Intel factor and held “that
district courts need not apply a rigid burden-shifting framework to properly weigh the discretionary
factor of receptivity in a § 1782 case.” Id. at 1223. In other words, neither party has the burden to
show that the Austrian courts would or would not be receptive to the Court’s assistance – this is
merely a factor for the Court to consider. Upon review of the evidence presented and the parties’
arguments, the Court concludes that neither party has made a convincing showing of how this
factor favors either of them. The Court finds the Starwood Entities’ arguments unconvincing for

the reasons discussed above. Petrus has likewise failed to convince that the Austrian court will be
receptive; its Declaration in support of its Motion conclusorily states that “the Austrian Court
would be receptive to evidence procured through U.S. judicial assistance,” without any evidence
or explanation as to why that might be so. ECF No. [1-3] ¶ 4. Thus, the Court concludes that the
second Intel factor favors neither party.
2. The Third Intel Factor
Turning to the third Intel factor, the Starwood Entities argue “that resorting immediately
to Section 1782 demonstrates that Petrus was attempting to circumvent the Austrian proof-
gathering restrictions.” ECF No. [25] at 23. Magistrate Judge Otazo-Reyes correctly pointed out

that Section 1782 “does not impose a requirement that the applicant first pursue discovery in the
foreign forum.” ECF No. [24] at 11 (quotation marks omitted). She further distinguished the
primary case relied upon by the Starwood Entities, In re Rendon, No. 20-mc-21152, 2020 WL
8771274 (S.D. Fla. Nov. 5, 2020), wherein the court expressed concern that a party was attempting
to use § 1782 to “jump the gun” on discovery prior to filing suit in the foreign country. Id. at *15
(quotation marks omitted). The Court agrees with the Magistrate Judge that In re Rendon has little
relevance here, where the Austrian proceedings were filed in 2021 and 2022. ECF No. [24] at 12.
Moreover, Magistrate Judge Otazo-Reyes was correct that Petrus has made a convincing showing
that the evidence sought in its Section 1782 Application is outside the territorial jurisdiction of the
Austrian court. Id. Accordingly, the Court agrees with the Magistrate Judge that the third Intel
factor is in Petrus’s favor because there is no indication that Petrus has attempted to circumvent
Austrian proof-gathering restrictions.
3. The Fourth Intel Factor
The Fourth Intel factor requires the Court to consider whether Petrus’s requests are “unduly
intrusive or burdensome.” Intel, 542 U.S. at 265. The Magistrate Judge concluded that Petrus’s

arguments as to this factor are “devoid of the specificity required to tip this factor in their favor.”
ECF No. [24] at 13-14.
In their Objections, the Starwood Entities argue that the 200 document requests within
Petrus’s subpoenas are overbroad because each request includes the word “all.” ECF No. [25] at
18. Petrus responds, accurately, that each request “is narrowed by the remainder of the sentence
identifying specific situations, companies, or circumstances[.]” ECF No. [27] at 13. Petrus is
correct. Contrary to the Starwood Entities’ argument, appropriately limited subpoena requests
frequently include the word “all.” What matters is what follows after that word. A request for “[a]ll
documents which relate to any of the claims,” for example, is patently overbroad. Great Lakes

Transp. Holding LLC v. Yellow Cab Serv. Corp. of Fla., Inc., No. 10-cv-80241, 2010 WL 5093746,
at * 5 (S.D. Fla. Dec. 8, 2010). By contrast, the subpoenas’ request for “[a]ll documents related to
Dr. Koschat not being reappointed as a member of the supervisory board of the Austrian
Company,” for example, is sufficiently narrow. ECF No. [1-2] at 21.
Relatedly, the Starwood Entities argue that many of the requests are overbroad because
they seek “production of documents and communications exchanged between countless – mostly
unidentified – individuals, at times with no regard to their subject matter[.]” ECF No. [25] at 18.
The Starwood Entities’ Objections contain no citation in support of this contention, but their
original Motion relied on Peterbrooke Franchising v. Miami Chocolates, LLC, 2016 WL 8786784
LEXIS 190009, at *1 n.1 (S.D. Fla. Oct. 3, 2016). The court in Peterbrooke listed the following
example of a request it considered overbroad: “all communications between Miami Chocolates
and other Peterbrook franchisees relating to the issues in this case.” Id. That request was
problematic for two reasons: “issues in this case” was never defined, and it was unclear why
communications with franchisees were relevant to the issues in that case. Id.
Here, by contrast, Petrus’s requests for communications are limited in terms of subject

matter and time period, and the subject matter appears relevant to Petrus’s claims in the Austrian
case. See, e.g., Request No. 20, ECF No. [1-2] at 7 (“All Communications related to special audit
motions, requests, or resolutions presented during an annual general meeting of the Austrian
Company.”). To the extent that the Starwood Entities object to the scope of any particular request,
it is incumbent upon the Starwood Entities to specify which request and explain why it imposes an
undue burden. See Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS
Forwarding (USA), 747 F.3d 1262, 1273 (11th Cir. 2014).
Next, the Starwood Entities assert that “none of the Requests (or related Topics) are
narrowly tailored to the alleged issues in the underlying Austrian Proceedings.” ECF No. [25] at

19. Petrus objects to the Starwood Entities’ narrow portrayal of the underlying issues in the
Austrian proceedings. The Court agrees with Petrus. Even if the ultimate issues in the Austrian
cases are the legality of certain corporate votes, as the Starwood Entities assert, ECF No. [25] at
19, the legality of those votes appears to turn on SOF-11 and the Starwood Entities’ alleged
improper involvement in those votes. ECF No. [1] at 8. The Requests, as a whole, appear crafted
to discover information relevant to those issues. See Fed. R. Civ. P. 26(b)(1) (defining the scope
of discovery).
Next, the Starwood Entities argue that the Magistrate Judge failed to take into account the
Starwood Entities’ non-party status in assessing burden. However, the R&R plainly reveals that
the Magistrate Judge was well aware of the Starwood Entities’ non-party status, as she stated,
“[h]ere, it is undisputed that the Starwood Entities are nonparticipants in the Austrian
proceedings.” ECF No. [24] at 9. While it true that a requestee’s non-party status is a relevant
factor when “weighing the burdens imposed in providing the requested discovery,” Cytodyne
Techs. Inc v. Biogenic Techs., Inc., 216 F.R.D. 533, 535 (M.D. Fla. 2003), that factor is not so
weighty as to compel the conclusion that no discovery is warranted at all in this case.

In rejecting the Starwood Entities’ arguments regarding the fourth Intel factor, the
Magistrate Judge correctly applied the Eleventh Circuit’s teachings in Consorcio Ecuatoriano, 747
F.3d 1262. In that case, the Eleventh Circuit rejected a party’s fourth Intel factor argument for
“fail[ing] to identify which particular discovery requests . . . are unduly burdensome or to provide
any specific evidence to support its blanket claim” that it was exempt from compliance with the
§ 1782 application at issue. Id. at 1273. As opposed to such “all-or-nothing” approaches, the
Eleventh Circuit advises that the requestee’s proper recourse is to take steps to meet the requester
“somewhere in the middle or to narrow the discovery request.” Id. at 1272-73. The Starwood
Entities have not done so in this case.

In sum, the Magistrate Judge correctly concluded that the fourth Intel factor does not weigh
in the Starwood Entities’ favor. ECF No. [24] at 14. Overall, the Court agrees with the Magistrate
Judge that the Intel factors do not support the Starwood Entities’ Motion to Vacate.
B. The Starwood Entities’ Motion to Quash
In their original Motion, the Starwood Entities argued in the alternative that Petrus’s
subpoenas should be quashed for failure to comply with the Federal Rules of Civil Procedure. ECF
No. [6] at 21-26. They presented three arguments: (1) they repeated their arguments that the
subpoenas are unduly burdensome; (2) they argued that there was a technical noncompliance with
the Court’s Order granting Petrus’s Section 1782 Application; and (3) they asserted that they have
no employees within 100 miles of the designated location of compliance with the subpoenas in
Miami. Id. The R&R rejected the first and third arguments and concluded that the second argument
was mooted by a stipulation between the parties. ECF No. [24] at 14-15.
In their Objections, the Starwood Entities wisely abandon their argument that, despite
being headquartered in Miami Beach, they have no employees within 100 miles of Miami. ECF
No. [25]. Rather, they argue that the R&R erred in finding Petrus’s Requests relevant and

proportional to the needs of this case. Id. at 11-17. The Magistrate Judge rejected the Starwood
Entities’ relevance and proportionality arguments for essentially the same reasons she rejected the
Starwood Entities’ arguments regarding the fourth Intel factor. ECF No. [24] at 14-15. The Court
agrees with the Magistrate Judge that the Starwood Entities’ arguments are essentially boilerplate
objections that seek to prohibit all discovery in this case. Id. For the reasons explained above, the
Starwood Entities’ “all-or-nothing approach” is unreasonable. Consorcio Ecuatoriano, 747 F.3d
at 1273 (criticizing a party that failed to take steps to meet the requester “somewhere in the middle
or to narrow the discovery request in any particular way”). The Magistrate Judge correctly denied
the Starwood Entities’ Motion to Quash.

IV. CONCLUSION
Upon a comprehensive review, the Court finds Magistrate Judge Otazo-Reyes’s R&R to
be well-reasoned and correct. Should additional discovery issues arise, the Court expects the
parties to work together in the “spirit of cooperation, professionalism, and civility.” Introductory
Statement, S.D. Fla. Local Rules. To the extent they are unable to reach agreement, they may bring
specific points of contention to the attention of Magistrate Judge Otazo-Reyes.
Accordingly, it is ORDERED and ADJUDGED as follows:
1. The R&R, ECF No. [28], is ADOPTED.
2. The Starwood Entities’ Objections, ECF No. [25], are OVERRULED.
3. The Starwood Entities’ Motion to Vacate or Quash, ECF No. [6], is DENIED.
Case No. 22-cv-22437-BLOOM

4. Pursuant to 28 U.S.C. § 636 and this District’s Magistrate Judge Rules, all further
discovery matters in this case are REFERRED to Magistrate Judge Alicia M. Otazo-
Reyes.
DONE AND ORDERED in Chambers at Miami, Florida, on May 25, 2023.

BETH BLOOM
UNITED STATES DISTRICT JUDGE
cc: Counsel of Record

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10121975. Public record. Not legal advice.