Monterey Bay Military Housing, LLC v. Ambac Assurance Corporation

Background

The court considered a letter from the plaintiffs and Jefferies Mortgage Finance, Inc., Jefferies LLC, Jefferies & Co., Inc., and Jefferies Group LLC (collectively referred to in the opinion as “Jefferies”). The letter identified topics still in dispute for depositions of Jefferies witnesses under Federal Rule of Civil Procedure 30(b)(6), which allows an organization to designate witnesses to testify about information known or reasonably available to the organization.

At a December 19, 2022 conference, the court heard the parties’ positions, gave guidance, and directed them to make additional efforts to resolve their disagreements. The court then reviewed the parties’ letter under Federal Rule of Civil Procedure 26(c)(1), which permits protective orders limiting or regulating discovery.

Order concerning documents

The court ordered that, if the plaintiffs intended to question a Jefferies witness about written communications concerning a topic, the plaintiffs had to provide Jefferies, no later than five business days before the deposition, a list of up to 50 documents for each topic. The order did not prevent the plaintiffs from asking about oral communications concerning the topic, documents that witnesses testified had refreshed their recollection, or additional documents that witnesses described during their testimony on that topic.

Revised deposition topics

The court revised the disputed topics as follows:

- Topic 3 covers Jefferies’ communications concerning the Bliss 2012 and Sill projects and their financing. - Topic 4 covers Jefferies’ knowledge and understanding, if any, of GMAC’s communications concerning the plaintiffs’ military housing privatization projects before JMFI acquired certain servicing rights from the Capmark bankruptcy estate. - Topic 9 covers the debt-solicitation process for the Sill 2010 loan, including requests for proposals, Jefferies’ efforts to compete and prepare proposals, letters of intent or commitment, negotiations with potential credit enhancers, and site visits to Fort Sill. Draft letters of intent or commitment had to be included among the documents identified under the court’s document-list requirement if the plaintiffs intended to ask about them. - Topic 11 covers the comparable debt-solicitation process for the Bliss 2012 loan, including requests for proposals, proposals, letters of intent or commitment, negotiations with potential credit enhancers, and site visits to Fort Bliss. Draft letters of intent or commitment had to be included among the identified documents if the plaintiffs intended to ask about them. - Topic 12 covers Jefferies’ knowledge and understanding, if any, of GMAC’s efforts concerning the debt-solicitation process for the plaintiffs’ projects and GMAC’s efforts to be selected to provide services, including requests for proposals, proposals, letters of intent or commitment, negotiations with potential credit enhancers, site visits, and revisions to commitment terms. - Topic 13 covers the financing of Sill in 2010, including loan terms, Jefferies’ commitment letters, sales of related bonds or certificates, fees, closing, and post-closing refinancing or servicing transactions. - Topic 14 covers the financing of Bliss in 2012, including loan terms, Jefferies’ commitment letters, sales of related bonds or certificates, fees, closing, and post-closing refinancing or servicing transactions. - Topic 17 covers how interest rates were set for the Bliss 2012 and Sill project loans, when Jefferies sold certificates associated with those loans, and the credit-lock fees Jefferies charged. - Topic 19 covers financial products Jefferies offered or provided to the Bliss 2012 and Sill projects. - Topic 24 covers the projects’ credit ratings, including surety bonds or debt-service reserve accounts, rating costs and procedures, information supplied to rating agencies, possible instructions to cap ratings, and Jefferies’ representations about the ratings. - Topic 27 covers securitizing the loans through grantor trusts, assigning the loans to those trusts, and later selling bonds or certificates, including pricing, the sales process, and its timing. - Topic 47 covers Jefferies’ knowledge, if any, of Ambac’s consent rights, including a right of first refusal concerning later military housing privatization project loans in the portfolio Jefferies acquired from Capmark or GMAC and new loans Jefferies originated for any plaintiff.

The parties were permitted to agree to additional changes to the topics without obtaining further court permission. The opinion is a discovery order; it does not decide the parties’ underlying claims.