Response to Discovery Request

Team Oliver, the Counterclaim Plaintiff, responded today to the Trust’s appeal for more discovery related to the requested declatory judgement and preliminary injunction.

Doc here

Supporting Doc aka “how the sausage gets made” which shows initial but fading collaboration on discovery. 

Recall that the DJ/PI is really trying to solve the following: 1) do Trustees have a duty to hold a meeting, 2) and do they have the authority to postpone indefinately?, 3) do Trustees have the power to disqualify Eric Oliver from the election?, 4) was the vote on 5/22 legit?, and 5) was David Barry properly elected to his post?

Counterclaim Plaintiff (Oliver) contends that discovery isn’t really needed as the doc that governs the decisions above is the Trust’s Declaration of Trust which is readily available for observers.

Remember all of this is going on whilst discovery is technically stayed as ordered by the court on 6/25 in response to Oliver’s 12(c) motion.

Highlighting below is mine. (Still not a lawyer)

Feels like we have some decent clarity here.  Stay technically in place due to 12(c).  In the spirit of good faith, some discovery conversations were taking place anyhow but the Trust went overboard.  We await resolution of both 12(c) on the federal securities claims and DJ/PI on the five BIG issues above.

Legal bills stack up in the meantime.

On June 25, 2019, Counterclaim Plaintiffs, shareholders of Plaintiff Texas Pacific Land Trust, moved for a declaratory judgment and preliminary injunction (the “DJ/PI Motion,” Dkt. 36). The legal issues raised in the DJ/PI Motion concern the scope of the authority and obligations of TPL’s trustees: (i) whether they were required to hold a special meeting of shareholders to elect a trustee after one of TPL’s trustees resigned; (ii) whether they have the authority to determine that a shareholder nominee for trustee is “disqualified” from ever becoming a trustee; and (iii) whether they have the authority, without prior approval from TPL shareholders or a court, to postpone a noticed special meeting of shareholders to elect a successor trustee (and, if not, whether shareholders were entitled to proceed with the meeting).

Because the powers and duties of TPL’s trustees are governed by TPL’s constitution, its Declaration of Trust—not any documents or information in Counterclaim Plaintiffs’ possession—Counterclaim Plaintiffs explained in their motion papers that no discovery was needed to resolve the motion and sought an expedited hearing in early August 2019. Dkt. 41 at 8. But Plaintiffs and Counterclaim Defendants John A. Norris III, a TPL trustee, and David E. Barry, a purported TPL trustee, refused to agree to any expedition until Counterclaim Plaintiffs agreed to (i) voluntarily produce 15 categories of documents; (ii) voluntarily produce four witnesses (and direct a non-party to produce a fifth witness) for deposition; (iii) voluntarily respond to 24 interrogatories; and (iv) provisions allowing the parties to move for compulsory production of additional documents, depositions, or interrogatory responses and a continuance of the (late September 2019) hearing date due to any “delay” resulting from additional discovery. In a good faith effort to resolve the matter, Counterclaim Plaintiffs agreed.

Because Counterclaim Plaintiffs maintain that no discovery is required to resolve theDJ/PI Motion, they do not seek compulsory production of any discovery from Plaintiffs. By contrast, TPL and Messrs. Norris and Barry now seek to impose on Counterclaim Plaintiffs the additional unnecessary cost and burden of responding by August 1, 2019 to what they euphemistically call “limited discovery,” but that collectively amounts to 59 additional document requests and 13 additional interrogatories. PBr. Ex. 1. Plaintiffs profess that “Counter-Plaintiffs Hold All Relevant Evidence,” PBr. 17 (emphasis in original), but never explain in their motion why any evidence regarding the scope and authority of TPL’s trustees would be in Counterclaim Plaintiffs’ possession, rather than TPL’s possession.

In reality, the discovery Plaintiffs seek is not related to the legal issues raised in the DJ/PI Motion. Instead, Plaintiffs seek to bolster their federal securities claims against Defendant Eric Oliver and fish for information from which to manufacture new claims against Mr. Oliver or other parties, all while causing further delay and continuing to frustrate the rights of TPL’s shareholders. On June 17, Mr. Oliver filed a Rule 12(c) motion against Plaintiffs’ Amended Complaint. Dkt. 19. On June 25, the Court entered an order holding that “Defendant’s 12(c) motion triggers the automatic discovery stay of the PSLRA,” explained that the purpose of the
stay is to “prevent costly extensive discovery and disruption of normal business activities, until a court could determine whether a filed suit has merit,” and stayed “all discovery” until resolution of the Rule 12(c) motion. Dkt. 42 (“Stay Order”) at 2 (internal citations omitted).

To lift the PSLRA discovery stay, Plaintiffs bear the burden of showing the discovery
they seek to impose on Counterclaim Plaintiffs is “particularized” and “necessary” to “prevent undue prejudice.” Stay Order at 2 (quoting 15 U.S.C. § 78u-4(b)(3)). But Plaintiffs’ 59 document requests and 13 interrogatories are not “particularized,” and none of the documents or interrogatory responses sought are needed to resolve the legal issues raised in the DJ/PI Motion.


2 thoughts on “Response to Discovery Request

  1. The Team Oliver response to the motion for more discovery by Team Trustees is well written. From a strategy standpoint Team Oliver, in the interest of moving this along with a goal of deciding the DJ/PI motion by late September, agreed to accept very limited discovery. This also gave them the high ground in case Team Trustees wanted more discovery to object with the 12(c) signed order they have from Judge Boyle. After all, they did agree to some limited doscovery, but enough is enough.

    On the key facts of the case, the Team Trustees position looks increasingly weak, and they are doing anything possible to delay, muddy the waters, and generally go on a fishing expedition looking for any distraction. They may realize its likely they are going to lose on the DJ/PI motion unless something is done now to disrupt where this case is going.

    Team Oliver has what appears to be more clever lawyers, but they also have the advantage of a better position. Team Trustee got the first punch in with their original lawsuit alleging securities violations, but since then they have been in respond and react mode and are losing the battle of the motions.

    What is next? I’d expect Judge Boyle might schedule a day for each side to present their arguments on the “more discovery is needed” motion before ruling. Its important enough to show due diligence was done on the motion and to avoid giving Team Trustees an avenue for appeal if they lose on the DJ/PI motion. All judges don’t like being overruled on appeal, but federal judges really dislike being wrong.

    My brother also thinks it’s possible another “fourth down and long” motion may come from Team Trustees. They are having trouble getting outside of the facts of the case, and need to interrupt the momentum established by Team Oliver. This will be difficult to accomplish, but when you hire top drawer lawyers, they are paid to try.

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