The case of Latele Television v. Telemundo Communications Group might have been a simple factual dispute over copyright ownership, but instead it has devolved into a series of accusations — including allegations of willful discovery violations and forgery — that could have been lifted directly from the telenovelas at issue in the case. This fascinating dispute, still ongoing in the Southern District of Florida, serves as an object lesson on the importance of thorough pre-litigation investigation, open communication among co-counsel, and candor in discovery responses.
Latele Television claims to own the copyrights to the popular Maria Maria, a Spanish-language soap opera that began airing in 1989. Telemundo produces another Spanish-language soap opera called El Rostro de Analia, which began airing in 2008. In July 2012, Latele sued Telemundo, alleging that El Rostro is so similar to Maria Maria that it infringes Latele’s copyrights.
The Allegedly Fraudulent Third Contract
During discovery, Telemundo received documents from a third party, among which were two written agreements from April 2012. The first agreement purported to transfer the Maria Maria copyrights from Latele to its principal, Fernando Fraiz. The second agreement purported to transfer them again from Mr. Fraiz to a Florida company he owned. Telemundo immediately filed a motion to dismiss on the ground that Latele did not own the copyrights to Maria Maria when it brought its complaint, and therefore it did not have standing to sue.
In opposition to the motion, Latele presented a third agreement, also dated April 2012, which had not previously been disclosed or produced, and which purported to rescind the first two agreements, with the result being that Latele Television still owned the copyrights. Telemundo accused Latele of fabricating and falsely dating the third agreement in response to the motion to dismiss.
The Court’s Discovery Sanctions
Although the issues initially presented to the court revolved around the alleged fraudulent creation of the third agreement, the court was unwilling to untangle this “murky factual morass” on a motion to dismiss. Instead, the court was far more interested in why Latele never disclosed or produced these three agreements, which the court held were clearly responsive to several discovery requests. Thus, the question the court posed was: “What did [Latele and its counsel] know, and when did [they] know it?”
The answer, it turns out, was another murky factual morass. Latele employed two law firms, one that acted as general outside counsel (let’s call them Firm A) and the other as litigation counsel in the lawsuit (Firm B). Firm A was managing the flow of information to Firm B, and was aware of the agreements. However, somehow Firm A never gave the agreements to Firm B, or even told Firm B they existed. The court concluded that “Latele either recklessly or intentionally failed to timely produce [the agreements]” and this “constitutes bad faith discovery misconduct.”
The court continued the trial date to allow Telemundo (not Latele) additional time to conduct discovery on the agreements. Latele must pay all additional discovery costs, including travel costs for Telemundo’s counsel. The court also awarded Telemundo attorneys’ fees in connection with the discovery violations. After Latele objected that it wasn’t afforded sufficient due process before being sanctioned, the Court scheduled a further hearing on the matter for January 2015.
Time and additional discovery will tell whether the Court will maintain its finding of bad faith and whether Telemundo will uncover evidence that Latele fabricated the third agreement. Whatever the outcome, this case illustrates the perennial importance of candor in discovery responses and open communication among co-counsel.