                                  UNPUBLISHED

                     UNITED STATES COURT OF APPEALS
                         FOR THE FOURTH CIRCUIT


                                  No. 04-1687



LAWRENCE D’ADDARIO, suing individually and on
behalf of all others similarly situated, and
derivatively on behalf of RMS Titanic, Inc.,

                                                   Plaintiff - Appellant,

           versus

ARNIE GELLER; JOE MARSH; GERALD COUTURE; RMS
TITANIC, INCORPORATED,

                                                  Defendants - Appellees,

           and

G. MICHAEL       HARRIS;   NICK   N.   CRETAN;   DOUG
BANKER,

                                                              Defendants,

           versus

ALLAN H. CARLIN,

                                                        Party in Interest.


Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Rebecca Beach Smith, District
Judge. (CA-02-250)


Argued:   December 1, 2004                   Decided:   February 24, 2005


Before NIEMEYER and MICHAEL, Circuit Judges, and Norman K. MOON,
United States District Judge for the Western District of Virginia,
sitting by designation.
Affirmed in part, vacated in part, reversed in part, and remanded
by unpublished per curiam opinion.


ARGUED: Steven Gary Storch, STORCH, AMINI & MUNVES, P.C., New York,
New York, for Appellant. Robert William McFarland, MCGUIREWOODS,
L.L.P., Norfolk, Virginia, for Appellees.      ON BRIEF:    John D.
Padgett, MCGUIREWOODS, L.L.P., Norfolk, Virginia; William H.
Baxter, II, MCGUIREWOODS, L.L.P., Richmond, Virginia, for Appellees
Arnie Geller and Gerald Couture. Megan E. Burns, WILLIAMS MULLEN,
P.C., Virginia Beach, Virginia, for Appellee Joe Marsh.


Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).




                                2
PER CURIAM:

     Lawrence        D’Addario     sued       the   officers,        directors,     and

controlling shareholder of RMS Titanic, Inc. (RMST), a Florida

corporation, alleging that the defendants engaged in fraud, self-

dealing, mismanagement, diversion, and waste of corporate assets.

D’Addario sought class certification for one of his claims (the

shareholder rights claim), which the district court denied.                        The

court then dismissed the shareholder rights claim on the ground

that D’Addario lacked standing to bring it.                          After extensive

discovery the court awarded summary judgment to the defendants on

the remaining claims. D’Addario appeals the district court’s order

dismissing     the     shareholder       rights       claim    and    denying     class

certification.       He also appeals various discovery rulings and the

award of summary judgment to the defendants.                          We affirm the

district court’s orders and discovery rulings with two exceptions.

We (1) vacate the district court’s order granting summary judgment

to defendants Arnie Geller and Gerald Couture on D’Addario’s

fiduciary    duty     claims     and    (2)    reverse    the    district       court’s

discovery     ruling    denying        D’Addario      access    to    documents     and

materials    submitted     by     RMST    to    the    Securities      and   Exchange

Commission (SEC).




                                           3
                                    I.

     In August 1987 D’Addario invested $500,000 and became a

limited partner in Titanic Ventures Limited Partnership (TVLP), a

commercial enterprise formed to explore the sunken vessel, The

Titanic.   In 1993 TVLP and RMST entered into a reverse merger.

Pursuant to this merger RMST acquired all of the assets of TVLP,

and TVLP became a shareholder of RMST, holding several million

shares of the company.

     In November 1999 Arnie Geller and G. Michael Harris (two

directors of RMST) and Joe Marsh (the single largest shareholder of

RMST) obtained control of RMST through a hostile takeover.           After

the takeover Geller was named President, CEO, and Treasurer; he

remained a director.       Harris was named Executive Vice President,

COO, and Secretary; he also remained a director.          Gerald Couture,

who apparently had no role in the takeover, was named Vice-

President, CFO, and a director of RMST.              Sometime after the

takeover TVLP was dissolved and its RMST shares were distributed to

the partners of TVLP, including D’Addario.          It is unclear on what

date TVLP was officially dissolved, but it was apparently on or

after March 13, 2000, as this was the date that D’Addario signed

off on the dissolution.       On August 14, 2000, D’Addario received

from TVLP a distribution of 784,088 RMST shares.

     On April 15, 2002, D’Addario filed suit against Marsh, Geller,

Couture,   Harris,   and    two   other   members   of   RMST’s   board   of


                                     4
directors.   Though D’Addario originally brought a number of claims

against a number of different defendants, it appears that D’Addario

is   now   pursuing       only   three    types    of    claims    against    three

defendants, Geller, Couture, and Marsh.             First, D’Addario asserts

claims alleging that Geller and Couture breached their fiduciary

duties as directors and officers (the fiduciary duty claims).

Second, he alleges that Geller and Marsh violated the Racketeer

Influenced    and     Corrupt     Organizations      Act    (the     RICO    claim).

D’Addario brings the fiduciary duty claims and the RICO claim as

derivative ones on behalf of RMST.              Third, he alleges that Geller

and Marsh violated RMST shareholders’ rights when they gained

control of RMST pursuant to the hostile takeover (the shareholder

rights claim).      D’Addario brings this last claim individually and

purportedly on behalf of a class.

     In December 2003 the three defendants (Geller, Couture, and

Marsh) moved for summary judgment on the fiduciary duty claims and

the RICO claim.           On December 19, 2003, while the motions for

summary judgment were pending, the district court denied class

certification on the shareholder rights claim and dismissed the

claim on the basis that D’Addario lacked standing to bring it.                   On

April 23, 2004, the district court awarded summary judgment to the

defendants   on     the    fiduciary     duty   claims   and   the    RICO   claim.

D’Addario appeals the award of summary judgment to the defendants,




                                          5
the denial of class certification on the shareholder rights claim

as well as its dismissal, and various discovery rulings.



                                     II.

     We   turn   first   to   the   district   court’s   award    of   summary

judgment to the defendants on the fiduciary duty and RICO claims.

We review a district court’s award of summary judgment de novo, and

in doing so we “view the facts and draw reasonable inferences in a

light most favorable to the non-moving party.”           Stroud v. Shaw, 13

F.3d 791, 798 (4th Cir. 1994) (citation omitted). Summary judgment

may only be awarded when the evidence proffered “show[s] that there

is no genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter of law.”             Fed. R. Civ.

P. 56(c).

                                      A.

     According to D’Addario, he has proffered evidence that Geller

and Couture breached their fiduciary duties to RMST in several

ways, by, for example, managing RMST in an incompetent fashion,

engaging in sham transactions with third parties at the expense of

RMST, and engaging in transactions that involved conflicts of

interest. D’Addario therefore argues that the district court erred

in granting summary judgment on the fiduciary duty claims.              Under

Florida law (which applies here) a plaintiff must prove three

elements to make out a claim for breach of fiduciary duty:             (1) the


                                      6
existence of a fiduciary duty, (2) a breach of that duty, and (3)

a   causal   connection     between      the   breach    and   the   plaintiff’s

injuries.      See Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002).

To satisfy his or her fiduciary duty to a corporation, “[a]

director shall discharge his or her duties . . . [i]n good faith

. . . with the care an ordinarily prudent person in a like position

would exercise under similar circumstances and . . . in a manner he

or she reasonably believes to be in the best interests of the

corporation.”        Fla. Stat. Ann. § 607.0830(1).        Further, a director

is personally liable for monetary damages to the corporation when

his   breach    of    fiduciary   duty    involves      willful   misconduct,   a

conscious disregard of the corporation’s best interests, or the

receipt of an improper benefit.                See id. § 607.0831(1)(b)(2),

(b)(4).

      The district court determined that Geller and Couture, as

officers and directors of RMST, owed fiduciary duties to the

company.     However, the court concluded that D’Addario failed to

proffer any evidence to support a finding that Geller and Couture

breached their fiduciary duties to RMST or that, if they did breach

their duties, the breaches proximately caused damages to D’Addario.

The district court erred because D’Addario did submit evidence that

Geller and Couture breached their duties.               For example, D’Addario

pointed to testimony of Harris (another director at RMST) that

Geller engaged in a kickback scheme at the expense of RMST with a


                                         7
man named Graham Jessop and his solely owned company, Argosy

International, Ltd. (Argosy). See J.A. 3210. Argosy received from

RMST 600,000 shares of RMST stock (valued at $900,000) in exchange

for several treasure maps.      RMST purchased the maps at Geller’s

request, and Geller did not have the maps appraised prior to the

purchase.   See J.A. 4300-04.   The maps were later discovered to be

worthless, and Harris testified that the whole transaction was a

scam. According to Harris, Geller offered to divide up the 600,000

shares three ways between Geller, Harris, and Jessop, using “dummy”

corporations.    See J.A. 3210.     Harris refused to engage in the

scheme and eventually left RMST.

     D’Addario   also   proffered       evidence   of    a   questionable

transaction in which the board of directors of RMST, at Geller’s

request, unwound the treasure map transaction with Argosy and

entered into a substitute transaction with Argosy. Some time after

the worthless treasure map deal, Argosy and RMST returned the

600,000 RMST shares for the treasure maps.         The purported reason

for the unwinding was that RMST lacked the financial wherewithal to

pursue the opportunities presented in the maps.         See J.A. 4109-11.

Rather than just rescinding the transaction, however, RMST and

Argosy entered into a new transaction in which RMST purchased from

Argosy the rights to the Carpathia, another sunken vessel, by

issuing 1,704,545 common shares of RMST (valued at $750,000).        See

J.A. 3230. Geller told RMST’s board (which included Couture at the


                                    8
time) that, based on an independent appraisal, the value of the

Carpathia rights was $4.5 million.     See J.A. 3230.     However, an

examination of the appraisal reveals that it relied heavily (if not

completely) on the value of the contents of the Carpathia.         See

J.A. 3233-34.   There is an issue as to whether the rights Argosy

sold to RMST included the rights to the contents of the Carpathia

because it did not even include the rights to any cargo.     See J.A.

2660, 3227. Indeed, Argosy had purchased the rights a year earlier

for only five hundred pounds from the Secretary of State for the

Environment in England. D’Addario also proffered evidence of other

transactions by Geller and Couture that could constitute breaches

of fiduciary duties, such as having RMST do business with a

corporation in which Geller was a fifty percent owner, see J.A.

4007-13, approving seemingly exorbitant salaries and bonuses for

themselves (for example, Couture approved, with little or no

investigation, a $400,000 payment to Geller as back pay), see J.A.

2692-94,   4032-37,   and   engaging   in   another   imprudent   (and

financially detrimental) transaction with Argosy, specifically, by

having RMST sell one of its vessels to Argosy in exchange for a

promissory note and a relatively small down payment, see J.A. 3551-

52.   This evidence is sufficient to create a genuine issue of

material fact as to whether Geller and Couture breached their

fiduciary duties to RMST.




                                  9
     The district court also concluded that D’Addario could not

establish that he was damaged by the alleged breaches because he

failed to introduce any evidence that the decrease in value of his

RMST stock was due to Geller’s and Couture’s breaches of their

fiduciary duties.     The court erred because D’Addario brought the

fiduciary duty claims as derivative claims on behalf of RMST, and

he specifically sought damages for injuries sustained by the

company.    The issue is not whether Geller’s and Couture’s breaches

caused damages to D’Addario but rather whether their breaches

caused damage to RMST.       See Citizens Nat’l Bank of St. Petersburg

v. Peters, 175 So. 2d 54, 56 (Fla. Dist. Ct. App. 1965) (noting

that in a derivative action “the injury is primarily against the

corporation, or the shareholders generally [and that] the cause of

action is in the corporation and the individual’s right to bring it

is derived from the corporation.”).              D’Addario has proffered

evidence that the breaches by Geller and Couture caused monetary

losses to RMST.     For example, if the Carpathia deal constitutes a

breach of fiduciary duty, then the breach surely damaged the

company: Geller and Couture arranged for RMST to exchange $750,000

worth of shares for what appear, at the summary judgment stage, to

be worthless rights.     In sum, it was error for the district court

to award summary judgment to Geller and Couture on the breach of

fiduciary    duty   claims   on   the   ground   that D’Addario   had   not




                                    10
proffered evidence that these two defendants breached their duties

or that the breaches caused damage.

       Geller and Couture argue that they are entitled to summary

judgment      because    D’Addario         presented    no    expert    testimony

establishing that their conduct amounted to breaches of their

fiduciary duties or that their conduct caused damages to D’Addario.

They   rely    heavily    on    Florida     law   for   the   proposition    that

“questions of proximate cause and damages present complex questions

of law and fact that cannot be resolved strictly through lay

witnesses.”     Br. for Appellees at 38.           A review of the authority

cited by Geller and Couture, however, reveals no such requirement

under Florida law.       Although experts may be needed in complicated

cases, in the present case it should not be unduly difficult to

determine     whether    or    not   the    defendants’      actions   constitute

breaches of their fiduciary duties or whether any breaches caused

damage to RMST.     For example, expert testimony is not essential to

establish that a kickback scheme engaged in by a director at the

expense of the corporation constitutes a breach of the director’s

fiduciary duties.       Nor is expert testimony needed to determine the

amount of damages suffered if $750,000 worth of stock is wrongfully

exchanged for essentially worthless rights.

       D’Addario also argues that the district court abused its

discretion in refusing to allow further time for the gathering of

additional evidence pursuant to Fed. R. Civ. P. 56(f) and in


                                           11
refusing to allow him to submit belated expert reports.           According

to D’Addario, this evidence would have further buttressed his

fiduciary duty claims and provided further grounds for reversing

the district court’s award of summary judgment on the fiduciary

duty claims. We need not address these arguments because we vacate

on other grounds the district court’s award of summary judgment

against D’Addario on his fiduciary duty claims.

                                   B.

     D’Addario   next   argues   that   the   district    court   erred    in

awarding summary judgment to Geller and Marsh on his RICO claim

(this claim was not brought against Couture).            D’Addario alleges

that Geller and Marsh engaged in a pattern of racketeering in

violation of the RICO Act, 18 U.S.C. § 1962.      As predicate acts for

his RICO claim, he alleges that Geller and Marsh engaged in mail

fraud and that Geller engaged in obstruction of justice.                  The

district court dismissed the RICO claim because (1) D’Addario

failed to allege the requisite specificity for a claim of mail

fraud under 18 U.S.C. § 1341, and (2) assuming D’Addario could

establish that Geller engaged in obstruction of justice, D’Addario

offered no evidence that the predicate acts caused harm to RMST.

     On appeal D’Addario does not dispute the district court’s

reasoning but rather argues that the entry of judgment against him

was error due to the district court’s denial of two discovery

requests.   D’Addario claims the discovery he sought would have


                                   12
provided him with evidence to support his RICO claim.                 D’Addario

first claims that the district court abused its discretion in

refusing to allow him access to RMST’s artifacts.               Access to the

artifacts was necessary to establish the RICO claim, D’Addario

asserts, because there is an issue as to whether the defendants’

illegal conduct is exposing RMST to financial risk, which in turn

could affect the company’s ability to care for the artifacts.

Because of the minimal relevance, if any, of the condition of the

artifacts to the claims of mail fraud and obstruction of justice,

the district court’s denial of this discovery request was not an

abuse of discretion.

     D’Addario also claims that the district court abused its

discretion   in     refusing    to    compel   the   defendants      to   produce

corporate telephone records that would have supposedly aided him in

establishing wire fraud, an alternative predicate act for his RICO

claim.    D’Addario sought telephone records of “any and all phone

numbers which RMST entirely or partially maintains, pays for,

reimburses, or which are otherwise used by any RMST officer,

director, employee, and/or consultant from September 1999 through

the present.”     J.A. 231.      The district court denied D’Addario’s

request   because    it   was   too    broad   and   because   the    fact   that

telephone calls were made is insufficient by itself to establish

wire fraud. We have considered the district court’s reasoning, and




                                        13
we conclude that the denial of this request was not an abuse of

discretion.



                                  III.

     D’Addario   next   argues   that    the   district   court   erred   by

refusing to compel Geller and Couture to produce (on behalf of

RMST) documents and materials that RMST had submitted to the SEC in

a separate investigation. The district court found, and Geller and

Couture now argue, that there exists a privilege (an SEC privilege)

as to documents that are involuntarily submitted to the SEC in

response to an investigative subpoena.

     The district court erred because there is no such thing as an

SEC privilege.     Geller and Couture cite to In re Steinhardt

Partners, L.P., 9 F.3d 230 (2nd Cir. 1993), In re Subpoenas Duces

Tecum, 738 F.2d 1367 (D.C. Cir. 1984), and 17 C.F.R. § 203.2 (2004)

to support their argument for this privilege. These sources do not

establish or support an independent SEC privilege.          The two cited

cases deal with the attorney-client and work product privileges and

examine only whether a party’s disclosure of privileged documents

in connection with an SEC investigation waives any privilege in

later civil proceedings initiated by private litigants.           See In re

Steinhardt, 9 F.3d at 233; In re Subpoenas, 738 F.2d at 1369.

Geller and Couture do not argue that the documents RMST submitted

to the SEC are subject to the attorney-client or work product


                                   14
privilege, and there is no evidence that they established the

necessary   elements     to    claim    either   privilege.       Further,    the

regulation cited by Geller and Couture, 17 C.F.R. § 203.2, provides

only that information and documents obtained by the SEC in the

course of an investigation are deemed non-public.             The regulation

does not provide that documents and materials submitted to the SEC

are not discoverable in a later civil proceeding. Because there is

no SEC privilege, the district court erred in refusing to compel

discovery of the documents and materials submitted by RMST to the

SEC.



                                        IV.

       D’Addario finally argues that the district court erred in

refusing to grant class certification for his shareholder rights

claim and that the district court erred in ultimately dismissing

the claim because D’Addario lacked standing.             D’Addario alleges

that Geller and Marsh violated the rights of RMST shareholders by

failing to comply with Fla. Stat. Ann. § 607.0902 during their

hostile takeover of RMST in November 1999.               D’Addario alleges

Couture is liable for this violation because he “ratified this

wrong.”     J.A.   55.        Section   607.0902   requires   a    majority    of

disinterested shareholders having voting rights to grant approval

of a hostile takeover in which a shareholder acquires a controlling

interest in the corporation.            See Fla. Stat. Ann. § 607.0902(9).


                                        15
As written at the time, § 607.0902 granted dissenters’ rights to

all shareholders; these rights permitted shareholders, at their

option, to sell their shares back to the corporation at a fair

value.   See id. § 607.0902(11) (repealed 2003).                 D’Addario asserts

that the defendants “prevented [D’Addario] and the class members

from voting [RMST] shares at the time of the takeover . . . and

from   obtaining     dissenters’     rights    at    a     time    when   RMST     was

profitable.” J.A. 56. D’Addario requested class certification for

this    claim,     purporting   to   represent       “all    persons      who    were

shareholders in November, 1999 just prior to the acquisition of

majority shareholder control by the takeover defendants and their

group and entitled to voting and dissenters’ rights under Florida

Statute 607.0902.”       J.A. 56.

       We agree with the district court that D’Addario does not have

standing to bring the shareholder rights claim and that he is not

a member of the class he purports to represent.               As to the standing

issue, “[t]o invoke the jurisdiction of a federal court, a litigant

must   have   suffered,    or   be   threatened      with,    an    actual      injury

traceable     to   the   defendant   and    likely    to    be    redressed      by   a

favorable judicial decision.” Lewis v. Cont’l Bank Corp., 494 U.S.

472, 477 (1990) (citations omitted).                Phrased differently, the

plaintiff “must have a personal stake in the outcome of the

lawsuit.”      Id. at 478 (internal quotation marks and citations

omitted).     In the present case the injury D’Addario claims is a


                                       16
deprivation of voting and dissenters’ rights associated with RMST

stock.    The problem is that D’Addario was not deprived of voting or

dissenters’ rights by the defendants’ action because D’Addario did

not   have    these   rights     at   the    time      of    the   hostile    takeover.

D’Addario did not even own RMST stock during the relevant time, as

the takeover took place in November 1999, and he did not become a

shareholder of RMST until August 2000. TVLP, a limited partnership

in which D’Addario was a limited partner, was the record owner of

the RMST shares at the time of the takeover, and it was TVLP that

would have been deprived of voting and dissenters’ rights. Because

D’Addario himself was not deprived of any rights, he did not suffer

“an   actual    injury     traceable    to       the   defendant[s]”     and     has   no

standing to bring the shareholder rights claim.                     Id. at 477.

      D’Addario argues that he was in fact a shareholder entitled to

voting and dissenters’ rights because he was the beneficial owner

of the shares held by TVLP prior to the transfer.                      Under Florida

law a shareholder is one who is either                      “a holder of record” or

“the beneficial owner of shares to the extent of the rights granted

by a nominee certificate on file with a corporation.”                        Fla. Stat.

Ann. § 607.01401(24).        D’Addario argues that he was the beneficial

owner of the RMST shares and that the TVLP limited partnership

agreement, which was on file with RMST, should be considered a

nominee      certificate    on   file   with       the      corporation.       On   this

reasoning      D’Addario    asserts     that      he   was     a   shareholder      under


                                            17
§ 607.01401(24) and that he was entitled to voting and dissenters’

rights on the date of the takeover under § 607.0902.

      The flaw in D’Addario’s argument is that even if he is

considered a beneficial owner of the RMST shares owned by TVLP on

the takeover date, he is only considered a shareholder “to the

extent of the rights granted by [the] nominee certificate on file”

with RMST.      Id. § 607.01401(24).            Section 607.01401(24) provides

that a beneficial owner’s rights as a shareholder are limited to

only those that are listed in the nominee certificate on file with

the corporation.        TVLP’s limited partnership agreement, which

D’Addario asserts was in fact a nominee certificate, provided that

the   general    partners   of    the      partnership    had   the   power     “[t]o

purchase, lease, develop, improve, maintain, exchange, trade, or

sell all or part of the Partnership assets at such price, rental or

amount for cash, security or other property, and upon such terms as

the General Partners in their sole, absolute and uncontrolled

discretion      shall   deem     to   be    in    the   best    interest   of    the

Partnership.”     J.A. 667-68.        Notably absent from the agreement is

any clause granting limited partners of TVLP, such as D’Addario,

any rights as to the RMST shares held by TVLP, let alone the more

specific voting and dissenters’ rights.                  The right to exercise

dissenters’ rights and thereby liquidate TVLP’s shares of RMST

stock was clearly vested in TVLP as the record owner and, through

the limited partnership agreement, in the general partners of TVLP.


                                           18
Even if D’Addario was a beneficial owner of the RMST shares he was

not entitled to voting or dissenters’ rights because the TVLP

partnership agreement did not grant him such rights.                   And because

he was not entitled to voting and dissenters’ rights, D’Addario is

not   a   member   of   the   class   he    purports   to    represent,       namely

shareholders of RMST who were “entitled to voting and dissenters’

right under Florida Statute 607.0902.”             J.A. 56.



                                       V.

      With the exception of one claim, we affirm the district

court’s order awarding summary judgment to Geller, Couture, and

Marsh.     We vacate the summary judgment to the extent that it

disposed of D’Addario’s breach of fiduciary duty claims against

Geller and Couture.      We also affirm the district court’s discovery

rulings except for the ruling that D’Addario is not entitled to

documents    and   materials    submitted     by   RMST     to   the   SEC.     The

documents and materials were not privileged, and we therefore

reverse the district court’s ruling that denied discovery of these

items. Finally, we affirm the district court’s order denying class

certification      on   D’Addario’s        shareholder      rights     claim    and

dismissing the claim. The case is remanded for further proceedings

consistent with this opinion.

                                      AFFIRMED IN PART, VACATED IN PART,
                                          REVERSED IN PART, AND REMANDED



                                       19
