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Case 09-34791-RBR Doc 6518-1 Filed 11/21/18 Page 1 of 12
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
Fort Lauderdale Division
In re:
Case No.: 09-34791-RBR
ROTHSTEIN ROSENFELDT Chapter 11 Case
ADLER, P.A.,
Debtor.
ORDER DISCHARGING ORDER TO SHOW CAUSE AS TO FOWLER WHITE (D.E.
0661
This matter came before the Court on October 26. 2018 for an evidentiary hearing on the
Court's Order to Show Cause Why Fowler White and Jeffrey Epstein Should Not be Held in
Contempt and Scheduling Show Cause Hearing (the "Order to Show Cause") (D.E. 6366). Based on
the Sworn Declarations and the testimony of the witnesses, and the exhibits admitted into evidence,
the Court makes the following findings of fact and conclusions of law pursuant to Fed. IL Bath. P.
7052, made applicable to this contested proceeding by Fed. R. Banta. P. 9014.
Procedural History and Findings of Fact
This proceeding arises from an agreed order canceling a hearing on a motion to shift costs and
setting forth a procedure for the printing of certain documents under a subpoena issued from the
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Circuit Court for the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, in a case styled
Jeffrey Epstein, Plaintiff v. Bradley Edwards, individually, Scott Rothstein, individually, and L.M.,
individually, Defendants, Case No. 502009CA040800XXXX MB AG (the "State Court Action").
(Fanner Jaffe Weissing Ex. I). The subpoena was issued by Jeffrey Epstein seeking documents to
support his allegation that Bradley Edwards and Scott Rothstein were engaged in a conspiracy to
manufacture claims against Epstein which could be used to attract investors in Mr. Rothstein's now-
infamous Ponzi-scheme.' Edwards and several other attorneys who had been employed at Rothstein
Rosenfeldt Adler, P.A ("RRA") later formed Farmer, Jaffe, Wcissing, Edwards, Fistos & Lcrhman,
P.L. ("Farmer Jaffe"), where Edwards continued to litigate numerous cases filed against Epstein
before and during Edwards' employment at RRA. (Sworn Declaration of Bradley J. Edwards at I's 4
& 5). Epstein retained Fowler White after filing the State Court Action and after serving the Rothstein
bankruptcy Trustee with a subpoena seeking RRA communications related to the cases brought
against Epstein.
L.M. objected to the subpoena on the basis of attorney-client and work product privileges.
[D.E. Nos. 818, 819). On August 13, 2010, this Court appointed retired Judge Robert B. Camey as
special master to receive the documents from the Trustee and to produce a privilege log. [D.E. 888).
On October 15, 2010. this court entered an Amended Order Respecting Production of Documents
Regarding Jeffrey Epstein requiring, inter alia, that the Trustee instead turn over the CD2 with
responsive documents to Farmer Jaffe to duplicate and Bates number, to prepare a privilege log, and
to produce non-privileged documents to Mr. Epstein. [D.E. I 06H).
The Trustee subsequently produced two CDs to Farmer Jaffe on October 18, 2010. (Edwards
Decl. at '13 & Exhibit 6). One of the two CD's was unusable (Edwards Exhibit 7), and the Trustee
sent two replacement CDs to Farmer Jaffe on or about November 9. 2010. (Farmer Jaffe Weissing
That scheme ultimately led to the involuntary bankruptcy proceedings filed against the Debtor in
this Case No. 09-34791 and the appointment of Herbert Stettin as Trustee.
2 Although D.E. 1068 referred to a single CD, the Trustee ultimately produced two CDs on October
18, 2010 followed to two replacement CDs on November 9. 2010.
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Exhibits 9-12). Edwards and L.M. subsequently filed a Motion for Relief from Amended Order [D.E.
1068] and to Compel Jeffrey Epstein to Pay for the Production of all Documents in Response to his
Request. [D.E. 1120]. This Motion led to entry on November 30, 2010 of an Agreed Order Cancelling
Hearing on Motion for Relief from Amended Order [D.E. 1068] and to Compel Jeffrey Epstein to
Pay for the Production of all Documents in Response to his Request Filed by Interested Party Farmer,
Jaffe, Weissing, Edwards, Fistos, & Lehrman, P.L. [D.E. 1194] (hereinafter, the "Agreed Order").
That Order provided:
The Motion for Relief From Amended Order (D.E. #1068) and to
Compel Jeffrey Epstein to Pay for the Production of All Documents
in Response to his Requests filed by Interested Party Farmer, Jaffe,
Weissing, Edwards, Fistos & Lehrman, P.L ("Fanner"), was
adequately resolved by agreement of the parties as follows. The law
firm of Fowler White Burnett, P.A., will print a hard copy of all of
the documents contained on the discs with Bates numbers added,
and will provide a set of copied, stamped documents to the Special
Master and an identical set to Fanner, who will use same to create
its privilege log. Farmer agrees to prepare that portion of the
privilege log relating to emails on or before December 15, 2010,
with the remaining portion due thirty days from the date of this
order, subject to other court orders. Fowler White will not retain
any copies of the documents contained on the discs provided to it,
nor shall any images or copies of said documents be retained in the
memory of Fowler White's copiers. Should it be determined that
Fowler White or Epstein retained images or copies of the subject
documents on its computer or otherwise, the Court retains
jurisdiction to award sanctions in favor of Farmer, Brad Edwards or
his client.
As such, the Motion for Relief is deemed moot, and, the hearing set
on the Motion for Relief [D.E. 1146]13) set for November 30, 2010
is hereby cancelled...
On December 7, 2010, Joseph Ackerman of Fowler White and Seth Lehrman of Farmer Jaffe
agreed that Special Master Carney could deliver the discs to a representative of Fowler White for
copying and bates stamping as set forth in the Agreed Order, and that no one from the Fanner Jaffe
firm wished to be present during the process. (Fowler White Exhibit C; Declaration of Joseph
' D.E. 1146 was the Notice of Hearing on with respect to D.E. 1120.
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Laurence Ackerman at ¶7; Akerman Decl., Ex. A). The discs were picked up from Judge Carney later
that day and were delivered by overnight mail to Fowler White's Miami office on December 8, 2010.
(Fowler White Exhibit B; Sworn Declaration of Lilly Ann Sanchez at ¶10). On Friday, December 10,
2010, Ms. Sanchez, an attorney at Fowler White, informed Mr. Lehrman that the printed documents
were being sent in seven boxes for next business day delivery and that the discs were being returned
to Judge Carney. (Fowla White Exhibit B; Sanchez Decl. at ¶11; Sanchez Decl. Ex. C)
Ms. Sanchez was the attorney at Fowler White who received the discs in the Firm's Miami
office on December 8, 2010, and was responsible for the discs and the Bates numbering and printing
of the documents. (Fowler White Ex. C; Sanchez Decl. at ¶ 11-12; Hearing Tr. 135:16-21). Although
the Agreed Order refers to delivering printed copies of the Bates numbered documents to Fanner Jaffe
and Special Master Carney, pursuant to Judge Camey's request, Ms. Sanchez sent the originals discs
and another disc with the Bates numbered documents to Judge Carney in lieu of printed copies.
(Hearing Tr.116:17-25, 118:18 - 119:2, 120:21-24). Fanner Jaffe was aware of and did not object to
this arrangement. (Hearing Tr. 134:20 — 135:4; Sanchez Dccl, Ex. C) Ms. Sanchez testified that to her
knowledge, as the person responsible for the discs and the Bates numbering and printing of the
documents, none of the discs or any copies of the printed documents were retained at Fowler White.
(Id. at 135:16-25; Accord at 131:14-19). No one at Fowler White instructed Ms. Sanchez to retain a
copy of the disc with the Bates numbered documents, and she is not aware of anyone at Fowler White
being instructed to do so. (Id. at 121:25 - 122:6). Ms. Sanchez further testified that the printing was
performed in the Miami office and that she never reviewed, copied, used or obtained any documents
that Fowler White was not supposed to have. (Hearing Tr. 135:16 — 136:19).
Fanner Jaffe received 27,542 pages of printed and Bates numbered documents on December
13, 2010, and Farmer Jaffe produced a privilege log on January 26, 2011. (Edwards Decl. 27, 29).
After Epstein challenged that log as insufficient, Farmer Jaffe produced an amended privilege log on
February 23, 2011. (Edwards Decl. at Is 30, 31). Through February 23, 2011, Edwards produced
21,119 out of the 27,542 pages of cmails to Epstein, and 6,471 pages remained on the amended
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privilege log. (Edwards Decl. at Is 28 , 31).4 Fowler White withdrew from its representation of
Epstein in May 2012, [D.E. 3034], and the State Court ultimately found Edwards' amended privilege
log sufficient in August 2012. (Edwards Decl. at 133).
Fowler White sent its files related to its representation of Mr. Epstein to offsite storage in 2014
or 2015, where they remained until requested by Mr. Epstein's current counsel in late 2017 or early
2018. (Hearing Tr. 39:2 — 40: I ).
At some point after August 2012, Epstein dropped his case against Edwards, leaving only
Edwards' counterclaim for malicious prosecution to be litigated in the State Court Action. (Edwards
Decl. 134). Mr. Epstein retained Scott Link and the law firm of Link & Rockenbach, P.A. in
November 2017. (Hearing Tr. 84:24 - 85:1). From the time of Fowler White's withdrawal in May
2012 until Mr. Link's retention in November 2017, Epstein was represented by at least one other firm.
(Hearing Tr. 85:22 - 86:1).
Shortly after being retained, Mr. Link contacted Fowler White and requested access to Fowler
White's files related to Mr. Epstein. (It at 85:19-21). Mr. Link and his paralegal initially reviewed
36 boxes of documents in Fowler White's Miami office in January 2018 and flagged certain
documents and several discs for copying. (Id. at 87:2-10.) Among possibly thousands of documents
flagged for copying, was a file folder with a label "Judge Carney - Printing of CD Issue", a disc
labeled "Epstein Bates Stamp", and approximately 30 pages of printed materials. (Id. at 95:13-21,
87:13-23). Mr. Link testified that the disc contained 27,544 pages of sequentially-numbered
documents (id. at 89:16-24), and that some of the 30 printed pages were documents listed on Edwards'
amended privilege log. (Id. at 88:9-16). Mr. Link subsequently requested that Fowler White deliver
These figures, taken from Mr. Edwards' Sworn Declaration as corporate representative of Farmer
Jaffe, indicate that Fanner Jaffe must have produced approximately 48 pages of privileged cmails
to Epstein. If Fowler White printed and delivered 27,542 Bates numbered pages to Farmer Jaffe
on December 10, 2010, and Farmer Jaffe subsequently produced 21,119 pages back to Fowler
White, as sworn to by Mr. Edwards in his Declaration, only 6,423 pages remained which could
have been listed on the Amended Privilege Log. Mr. Edwards' testimony that 6,471 pages were
listed on the log indicates that 48 pages (or 6,471 less 6,423) of documents which were listed on
the Amended Privilege Log must have been produced back to Fowler White at some point.
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all thirty six boxes of documents to his office. (Id. at 89:8-13). The boxes were collected by Link &
Rockenbach's courier on March 1, 2018. (Fowler White Ex. L).
In March 2018, shortly before the trial of Mr. Edwards' malicious prosecution counterclaim,
Mr. Link filed several avails in the State Court Action which he had printed from the disc located in
Fowler White's files, several of which mails were listed on Edwards' amended privilege log.
Fowler White has been unable to determine how or when the disc or documents came to be
in its files. In his Declaration, Joseph Laurence Ackerman, stated that
9. On December 10, 2010, Fowler White sent seven boxes of printed and
bates numbered documents to Farmer Jaffe...
10. Farmer Jaffe subsequently produced documents back to Fowler White
at various times in 2011. These are the only documents, of those printed and
bates numbered in December 2010, which I was ever aware that Fowler White
had copies of.
11. I am aware of the allegations in Farmer Jaffe's filing at D.E. 6326. If
Fowler White had a copy of any of the printed materials in its files, other than
those produced by Farmer Jaffe in 2011, or of any disc containing all of the
bates numbered and printed materials, I have no knowledge of how any such
materials could have been in the Firm's files.
12. As far as I was aware, all materials bates stamped and printed in
December 2010 under the terms of the Agreed Order and all discs related
thereto were out of the Firm's possession once the materials were sent to Farmer
Jaffe on December 10, 2010 and the discs were returned to Judge Camey, and
the only materials produced by the RRA Trustee pursuant to the Subpoena and
subsequently received by Fowler White were those produced by Farmer Jaffe
in 2011. I am not aware of anyone at Fowler White having had any of the discs
related to the documents produced by the RRA Trustee pursuant to the
Subpoena at any time after December 10, 2010.
Ackerman Decl. at Is 9-12.
Ms. Sanchez gated in her Declaration that:
12. ... Fowler White did not retain any of the discs or any copies of the
printed materials in December 2010.
13. Fanner Jaffe subsequently produced documents back to Fowler White at
various times in 2011. These are the only documents, of those printed and bates
numbered in December 2010, which I was ever aware that Fowler White had
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copies of.
14. I have reviewed the filing of Fanner Jaffe, Weissing, Edwards, Fistos &
Lehrman, P.L. ("Farmer Jaffe") at D.E. 6326. If Fowler White had a copy of any
of the printed materials in its files, other than those produced by Fanner Jaffe in
2011, or of any disc containing all of the bates numbered and printed materials,
those items can only have been placed in the files substantially after December
2010. I have no knowledge ofhow any such materials could have been in Fowler
White's files.
Sanchez Decl. at 9s 12-14.
Mr. Hurley similarly testified to his understanding, based on review of the Epstein files and
his investigation of the circumstances related to discovery of the documents in January 2018, that the
Bates numbered disc was sent to Special Master Carney. (Hearing Tr. 49:21 — 50:11, 66:8-12).
Although Scott Link testified to finding the disc and 30 printed pages in Fowler White's files, Mr.
Hurley's investigation gave him no idea as to how or when those materials got into the files. (Id. at
54:11-18). Edwards' counsel suggested that the $14.79 cost of the December 7, 2010 Federal Express
package from West Palm Beach to Miami and the S10.79 cost of the December 28, 2010 Federal
Express shipment back to Judge Carney suggested that the December 28 package contained fewer
discs than the December 7 package. (Hearing Tr. 77:8-15, 78:12-15). However, Mr. Hurley testified
that he didn't know how Federal Express charges were calculated or whether point of origin impacted
cost. (Id. 79:12-19). Moreover, a review of the Fowler White's Exhibit I, reflecting those charges,
indicated that three of the seven banker's boxes of printed documents sent to Fanner Jaffe on
December 10, 2010 actually cost less than the December 7, 2010 shipment of discs.
The Order to Show Cause
On March 19, 2018, Fanner Jaffe filed a Motion for Issuance of an Order to Show Cause
why Fowler White and Jeffrey Epstein Should not be Held in Contempt of Court, to Permit
Discovery, to Assess Sanctions and Costs and for Other Appropriate Relief [DE 6326]. That
Motion was joined by Edwards [DE 6325] and by Jane Doe, E.W and L.M. [DE 6343]. All of these
parties sought findings of civil and criminal contempt and compensatory and punitive damages
against both Fowler White and Epstein for alleged violation of the Agreed Order.
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On April 20, 2018, the Court issued its Order directing Fowler White and Epstein to appear
and show cause why they should not be held in civil contempt of the Agreed Order. The Court
rejected any requests to consider criminal contempt or sanctions other than compensatory damages
resulting from any violation of the Agreed Order if a finding of civil contempt is made. [D.E.
6366].
On October 3, 2010, the Court struck the claims of Jane Doe and E.W. as they were not
parties to and were not referenced in the Agreed Order. [D.E. 6471]. The Court also bifurcated the
contempt proceedings in order to address liability for contempt before addressing discovery and
damages if a finding of contempt is made. [D.E. 6472]. On October 29, 2018, the Court entered an
Order Discharging Order to Show Cause Against Jeffrey Epstein, [D.E. 6508], after the Movants
filed a Notice of Joint Voluntary Dismissal of Jeffrey Epstein, [D.E. 6496].
Conclusions of Law
To prevail in a civil contempt proceeding, the movant must establish by "'clear and
convincing' proof that the underlying order was violated." Howard Johnson Co. v. Khimani, 892
F.2d 1512, 1516 (11th Cir. 1990) (citing Newman v. Graddick, 740 F.2d 1513, 1525 (11th Cir.
1984); Piambino v. Bestline Prods., Inc., 645 F. Supp. 1210, 1213 (S.D. Fla. 1986)). A party may
only be found in contempt for violating an order which is clear, definite and unambiguous. S.E.C.
v. Pension Fund ofAm., L.C., 396 Fed. Appx. 577, 580 (11th Cir. 2010); Jordan v. Wilson, 851
F.2d 1290, 1292 n.2 (11th Cir. 1988). The Court's "contempt power is a potent weapon which
should not be used if the court's order upon which the contempt was founded is vague or
ambiguous." Matter of Baum, 606 F.2d 592, 593 (5th Cir. 1979)5 (internal quotes, citations
omitted). Therefore, the court's order "must set forth in specific detail an unequivocal command."
Id. Where there is "possible uncertainty" as to the effect of a bankruptcy court's order, there can
3 In Bonner v. City ofPrichard, 661 F.2d 1206 (11th Cir. 1981) (en bane), the Eleventh Circuit
adopted as binding precedent all cases decided by the Fifth Circuit, prior to October 1, 1981.
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be no finding of contempt. Id. Any ambiguities or uncertainties in such a court order must be
construed in a light favorable to the person charged with contempt. Georgia Power Co. v. N.L.R.B.,
484 F.3d 1288, 1291 (11th Cir. 2007). The court's focus in a civil contempt proceeding "is not on
the subjective beliefs or intent of the alleged contemnors in complying with the order, but whether
in fact their conduct complied with the order at issue." Id. The court's inquiry is limited to whether
the "four corners" of the order, "in clear and unambiguous terms, prohibited" the conduct
complained of. Id. at 1292
This prima facie showing of a violation of an unambiguous order must be made before the
burden shifts to the alleged contemnor to produce evidence explaining his noncompliance at a
show cause hearing. Chairs v. Burgess, 143 F.3d 1432, 1436 (11th Cir. 1998).
"Clear and convincing evidence entails proof that a claim is 'highly probable,' a standard
requiring more than a preponderance of the evidence but less than proof beyond a reasonable
doubt." Mansfield v. Sec y, Dept of Corr., 679 F.3d 1301, 1309 (11th Cir. 2012); see also In re
New Midland Plaza Associates, 247 B.R. 877, 883 (Bankr. S.D. Fla. 2000) ("Preponderance means
that the existence of a fact is simply more likely than not, while clear and convincing is a higher
standard and requires a high probability of success").
Once the moving party makes a prima facie showing concerning a violation of an
unambiguous order, "the burden of production shifts to the alleged contemnor to show a 'present
inability to comply that goes 'beyond a mere assertion of inability.'" Howard Johnson Co. v.
Khimani, 892 F.2d at 1516. (quoting Combs v. Ryan's Coal Co., 785 F.2d 970, 984 (11th Cir.
1986)). While the Court may not consider the "subjective beliefs or intent of the alleged
contemnors in complying with the order", substantial compliance made in good faith can preclude
a finding of contempt where compliance with the order is not complete. Id. (citing Jim Walter Res..
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Inc. v. Intl Union, etc., 609 F.2d 165, 168 (5th Cir. 1980); United Student Aid Funds, Inc. v. Gary's
Grading & Landscaping, 2009 WL 161711 *4 (M.D. Fla. 2009) citing Khimani, 892 F.2d at 1516.
The evidence is unclear how or when the offending disc or materials got into Fowler White's
files. During the hearing, Edwards' counsel acknowledged the possibility that the materials may have
been the actual materials sent by Fowler White to Judge Carney, not copies. (Hearing Tr. 33:13-14).6
Fowler White's representatives—including the attorneys who worked on the Epstein file and the
attorney who was responsible for custody of the original discs and the Bates numbering and printing
of the documents—testified unambiguously that they all understood that the discs were sent to Judge
Carney in December 2010, and they were not aware of the disc or any documents in Fowler White's
files at any time after December 10, 2010 other than the documents produced back to Fowler White
by Edwards' counsel in 2011. Lilly Sanchez testified similarly that the printing was performed in the
Miami office and that she, the attorney in Miami tasked with handling the discs in accordance with
the Agreed Order, never reviewed, copied, used or obtained any documents that Fowler White was
not supposed to have. There is no direct evidence regarding how the materials got into Fowler White's
files. The unambiguous testimony of the attorneys at Fowler White indicates that the materials were
not retained when the documents were Bates numbered and printed in 2010, and both parties have
speculated that the materials may have been retuned by the Special Master at some point.
If the disc was returned by Special Master Carney sometime after 2010, no one at Fowler
White realized it, and the Agreed Order's prohibition on "retaining" copies of the documents should
I not be read so broadly as to make such unknowing receipt a violation of the Order punishable by
6 1n response to an inquiry from the Court regarding whether the disc located by Scott Link in 2018
was a copy of the disc sent to Judge Carney, Mr. Scarola replied "it may be a copy of the one that
went to Judge Carney. it may be the one that went to Judge Carney. That's, at this point, a matter
of pure speculation." (Hearing Tr. 33:10-14) (emphasis added).
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contempt. Such a reading would conceivably allow Fanner Jaffe to create a violation of the Agreed
Order by its apparent production of forty-eight privileged pages in 2011 even though the production
of those forty-eight pages was unknown by either party. The Court will not so construe the Agreed
Order, obviously designed to address how the materials were to be handled when printed in December
2010 and not some unforeseeable occurrence at any point in the future, nor is there a need to consider
such a construction as the Court finds substantial good faith compliance with said Order.
No one at Fowler White used any of the privileged materials at any time during the Finn's
representation of Epstein, and neither Edwards nor Fanner Jaffe produced any evidence to the
contrary. Epstein dropped his claims against Edwards after the State Court upheld the amended
privilege log. The disc and documents at issue did not surface between December 2010 and Fowler
White's withdrawal as Epstein's counsel almost eighteen months later, or at any time while Epstein
was represented by the firm or firms who represented him between Fowler White's withdrawal and
Mr. Link's retention. It is hard to imagine that any party who went so far as to intentionally violate an
order prohibiting the retention of documents would do so only to store the documents away unused
for nearly seven years. The worst that can be said is that the disc and the 30 pages sat unused in Fowler
White's files from whenever they were received, in storage from 2014, until discovered by Mr. Link
when he reviewed and obtained the thirty six boxes of documents in early 2018.
The Agreed Order was prepared and agreed to between the parties, and the order was
submitted for entry by Farmer Jaffe on behalf of Edwards and L.M. The procedure set forth was the
result of negotiations between counsel. If the retention of documents several years later was a
legitimate concern, counsel should have addressed that specifically and unambiguously.
Unfortunately, the Agreed Order is unclear and susceptible of two differing interpretations. As set
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forth above, in order to be enforced by contempt sanctions, the Agreed Order must be clear and
definite.
Additionally, sanctions arc not warranted because the Court finds that Fowler White clearly
complied with the Agreed Order in December, 2010 when it did not retain any of the documents. At
best and as suggested by Edwards counsel in argument, the materials could have been returned to
Fowler White at any time. The most that has been shown is that at some unknown time certain
restricted materials came into Fowler White's possession and sat, unused in its closed file, until
early this year therefore amounting to an inadvertent and innocent mistake. Thus, it is clear that
Fowler White substantially complied with the Agreed Order and acted in good faith as the documents
were never utilized until new counsel was retained years later and publicly filed the documents.
For all of the above reasons, the Court declines to find Fowler White in contempt of the
November 30, 2010 Agreed Order. Accordingly, the Order to Show Cause [D.E. 6366] is discharged
as to Fowler White.
#
Copies to:
;Vial! T. McLachlan, Esq.
[Attorney McLachlan is directed to serve a conformed copy of this Order on all interested parties
and file a certificate of service.]
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ℹ️ Document Details
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Bates Number
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