Free Exhibit - District Court of Connecticut - Connecticut

Case 3:03-cv—01014-JBA Document 134-5 Filed 09/15/2005 Page 1 ldilgrc 2 Of5
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Walker , Stamford, CT, Albert M. Myers, III , Carl
Slip Copy, 2005 WL 1366450 (D.Conn.) W. Mullis, III , J. Allen Maines , Laura M. Berg ,
Briefs and Other Related Documents Michael B. Arnold , Robert D. Zebro , Summer B.
Only the Westlaw citation is currently available. Joseph , Paul, Hastings, Janofsky & Walker,
United States District Court,D. Cormecticut. Atlanta, GA, for Defendants.
In re: PRICELINE.COM INC. SECURITIES
LITIGATION MEMORANDUM OF DECISION AND ORDER
N0. 3:00CV01884(DJS).
SQUATRITO, J.
June 7, 2005. *1 This document relates to: ALL ACTIONS
Now pending in the above-captioned matter is
David A. Slossberg , J. Daniel Sagarin , Margaret defendants' motion to compel (dkt.# 141). For the
E. Haering , Hurwitz Sagarin & Slossberg , Milford, reasons set forth herein, defendants' motion is
CT, Dennis J. Johnson , Jacob B. Perkinson , Peter GRANTED in part and DENIED inpart.
J. McDougall , Johnson & Perkinson , South
Burlington, VT, Elias A. Alexiades , New Haven,
CT, Andrew M. Schatz , Jeffrey S. Nobel , Justin I. BACKGROUND
Scott Kudler , Schatz & Nobel , Eliot B. Gersten ,
Gersten & Clifford , Hartford, CT, David Randell Lead plaintiffs bring this action on behalf of
Scott , Erin Green Comite , Scott & Scott , members of a putative class of persons who
Colchester, CT, James E. Miller , Patrick A. purchased or otherwise acquired securities of
Klingman , Sheperd Finkelman Miller & Shah , price1ine.com Inc. ("Priceline") between January
Chester, CT, Geoffrey M. Johnson , Scott & Scott, 27, 2000 and October 2, 2000, pursuant to Sections
LLC , Chagrin Falls, OH, Joseph H. Weiss , Weiss l0(b), 15 U.S.C. § 78j(b) , and 20(a) , 15 U.S.C. §
& Yourman , Aaron Brody , Jules Brody , Stull, 78t , of the Securities Exchange Act of 1934 ("the
Stull, & Brody , Harvey Greenfield , Law Firm of Exchange Act"), as amended by the Private
Harvey Greenfield , New York, NY, Deborah R. Securities Litigation Refonn Act of 1995 ("PSLRA"
Gross , Law Offices of Bernard M. Gross, PC , ), 15 U.S.C. §§ 78a -78mm , and Rule 10b-5 , 17
Michael D. Donovan , Donovan Searles, C.F.R. § 240.l0b—5, promulgated thereunder,
Philadelphia, PA, for Plaintiffs/Movants. against Priceline, Jay S. Walker, N.J. Nicholas,
Bradford S. Babbitt , Frank F. Coulom, Jr. , Daniel H. Schuhnan, and Richard S. Braddock.
Robinson & Cole , Eric Watt Wiechmarm , Peter Plaintiffs allege that def`endants' false and
W. Hull , Thomas J. Firm , McCarter & English , misleading statements inflated the value of
William H. Narwold , Motley Rice , Hartford, CT, Priceline's stock to the benefit of the defendants and
Christine L. Arena , Daniel Slifkin , Evan R. Chesler other company insiders and to the detriment of the
, James G. Hein, Jr. , Kevin J. Kehoe, Jr. , Cravath, plaintiffs. Specifically, plaintiffs allege that during
Swaine & Moore , Dana C. MacGrath , Martin the period from mid-July 2000 to September 26,
Glenn , O'Melveny & Myers , Carla A. Kerr , David 2000, defendants sold, in the aggregate, millions of
L. Sorgen , William R. Maguire , Hughes, Hubbard shares of Priceline stock, allowing them to profit
& Reed , New York, NY, John F.X. Peloso, Jr. , substantially prior to disclosing various deficiencies
Joseph L. Clasen , Melissa Sullivan , William J. in Priceline's short term economic outlook.
Kelleher, Ill , Robinson & Cole , Douglas C. Conroy
, Paul R. Dehmel , Paul, Hastings, Janofsky & The gravamen of plaintiffs' allegations is that
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Case 3:03-cv—01014-JBA Document 134-5 Filed 09/15/2005 Page 2%‘l‘&? 3 OIP5
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defendants grossly overstated the utility of specifics of the objection and how that objection
Priceline's business model, and that defendants, relates to the documents being demanded.
outside the view of the investing public, spent Obiajulu v. City of Rochester, 166 F.R.D. 293, 295
exorbitant amounts of Pricelirre's cash to keep the (W.D.N.Y.1996). The objecting party must do more
doomed venture called WebHouse afloat primarily than "simply intone [the] familiar litany that the
to bolster their statements about the utility of the interrogatories are burdensome, oppressive or
business model. overly broad." Compagnie Francaise Dbtlssurance
Pour Le Commerce Exterieur v. Phillips Petroleum
Co., 105 F.R.D. 16, 42 (S.D.N.Y.l984). Instead,
II. DISCUSSION the objecting party must "show specifically how,
despite the broad and liberal construction afforded
Rule 26 of the Federal Rules of Civil Procedure the federal discovery rules, each [request] is not
govems the scope of discovery. Specifically, " relevant or how each question is overly broad,
[p]arties may obtain discovery regarding any burdensome or oppressive by submitting affidavits
matter, not privileged, which is relevant to the or offering evidence revealing the nature of the
subject matter involved in the pending action .... " burden." Id. (internal citations and quotation marks
Fed.R.Civ.P. 26(b)(1). As a general proposition, the omitted).
Federal Rules of Civil Procedure concerning
discovery are to be construed broadly. See generally On November 15, 2004, defendants served the
6 Moore's Federal Practice § 26.41(1) (Matthew Combined First Sets of Requests for Production of
Bender 3d ed.1997) (citing Herbert v. Lando, 441 Documents and Interrogatories upon plaintiffs, and
U.S. 153, 177, 99 S.Ct. 1635, 60 L.Ed.2d 115 on January 19, 2005, defendants served the Second
(1979)). A valid discovery request need only " Sets of Requests for the Production of Documents
encompass any matter that bears on, or that and lnterrogatories upon plaintiffs. Defendants
reasonably could lead to other matter that could challenge the sufficiency of certain responses
bear on, any issue that is or may be in the case." offered by plaintiffs. Each specific challenge is
Oppenhiemer Fund, Inc. v. Sanders, 437 U.S. 340, discussed in turn.
351, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978); see
Hickman v. Taylor, 329 U.S. 495, 501, 67 S.Ct.
385, 91 L.Ed. 451 (1947) ; Gary Plastic Packaging 1. First Requests for Production l & 2
Corp. v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 756 F.2d 230, 236 (2d Cir.1985). Request number 1 seeks "[a]ll documents collected,
obtained or otherwise received in connection with
“A court can limit discovery if it determines, among any investigation by Plaintiffs or counsel for
other things, that the discovery is: (1) unreasonably Plaintiffs conceming any allegation" made in a
cumulative or duplicative; (2) obtainable from complaint lodged in this consolidated action.
another source that is more convenient, less Request number 2 seeks "[a]ll documents
burdensome, or less expensive; or (3) the burden or concerning or reflecting communications with any
expense of the proposed discovery outweighs its person in connection with any investigation by
likely benefit." Chavez v. DaimlerChrysler Corp., Plaintiffs or counsel for plaintiffs concerning any
206 F.R.D. 615, 619 (S.D.Ind.2002) (citing a1legation" made in a complaint lodged in this
Fed.R.Civ.P. 26(b)(2)). The party resisting consolidated action. In response, plaintiffs state that
discovery bears the burden of demonstrating that its no responsive documents exist that are not
objections should be sustained, and protected from disclosure by the attomey-client
*2 pat, generic, non-specific objections, intoning privilege or work product irrnnunity.
the same boilerplate language, are inconsistent
with both the letter and the spirit of the Federal Without a privilege log, the court cannot judge the
Rules of Civil Procedure. An objection to a sufficiency of plaintiffs' objections. Plaintiffs shall
document request must clearly set forth the serve a privilege log in the form prescribed by Rule
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Case 3:03-cv—01014-JBA Document 134-5 Filed 09/15/2005 Page Slblgf 4 0135
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37(a) 1 of the Local Rules of Civil Procedure for Amended Complaint. Plaintiffs claim that their
the District of Connecticut upon defendants on or answers are protected by the doctrine of work
before July ll, 2005. Defendants may file a motion product immunity.
to compel discovery of documents identified in the
privilege log on or before August 1, 2005. "The work product rule operates as a privilege
against discovery cloaking all documents prepared
by a party, his representative or an attorney ‘in
2. First Request for Production5 & Second Request anticipation of litigation." ’ EDO Corp. v. Newark
for Production7 Ins. Co., 145 F.R.D. 18, 23 (D.Conr1.1992) .
(quoting Hickman v. Taylor, 329 U.S. 495, 67 S.Ct.
Request number 5 seeks “[a]ll documents 385, 91 L.Ed. 451 (1947)). This doctrine is "
concerning the investment policies or practices of intended to preserve a zone of privacy in which a
any Plaintiffs including, but not limited to, all lawyer can prepare and develop legal theories and
statements of investment policy prepared by or for strategy with an eye toward litigation free from
any Plaintiff," and request number 7 seeks " unnecessary intrusion by his adversaries." US. v.
[d]ocuments sufficient to show the composition of Adlman, 134 F.3d 1194, 1196 (2d Cir.l998)
the investment portfolio(s) of each of the Proposed (internal quotation marks omitted).
Class Representatives." Plaintiffs object to these
requests and claim that the documents requested are The work—product doctrine is codified in Rule
irrelevant. 26(b)(3) of the Federal Rules of Civil Procedure,
which states that
*3 Plaintiffs‘ objections are overruled. The requests a party may obtain discovery of documents and
at issue seek documents that could assist defendants tangible things otherwise discoverable under
in rebutting the presumption of reliance arising in subdivision (b)(1) of this rule and prepared in
the "fraud on the market" context. anticipation of litigation or for trial by or for
another party or by that other party's
representative only upon a showing that the
3. First Request for Production 11 party seeking discovery has substantial need of
the materials in the preparation of the party's case
Because plaintiffs have agreed to provide a and that pany is unable without due hardship to
supplemental response, defendants' motion is obtain the substantial equivalent of the materials
denied as moot with respect to request for by other means. In ordering discovery of such
production number 11. materials when the required showing has been
made, the court shall protect against disclosure of
the mental impressions, conclusions, opinions, or
4. First Interrogatories 7, 8 &9 legal theories of an attorney or other
representative of a party conceming the litigation.
First interrogatory number 7 seeks the identity of " Fed. R. Civ. Pro. 26(b)(3). Thus, as set forth in Rule
each person with whom Plaintiffs or counsel for 26(b)(3), "[t]he degree of protection afforded under
Plaintiffs communicated in connection with any the work product doctrine is dependent upon
investigation concerning any allegation in the whether the work product is ordinary or opinion
Amended Complaint" including "those that work product." Lojis, 175 F.R.D. at 11. When a
Plaintiffs purport to have interviewed in comiection party seeks ordinary work product, it must
with this Action .... " First interrogatory number 8 demonstrate substantial need and the inability to
asks for the names of individuals referred to in the acquire the information through other means. See In
Amended Complaint. First interrogatory number 9 re Grand Jury Proceedings, 219 F.3d 175, 190 (2d
requests that plaintiffs "[i]dentify and describe Cir.2000) ; Lojiis v. Amica Mutual Ins. Co., 175
each and every document reviewed by Plaintiffs F.R.D. 5, 11 (D.Conn.l997). By contrast, when a
relating to" certain allegations set forth in the party seeks "work product that shows mental
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Case 3:03-cv—01014-JBA Document 134-5 Filed 09/15/2005 Page 4Io2ig4i 5 Oi`5
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impressions, conclusions, opinions, or legal theories and that party is unable without due hardship to
of an attomey" the material shall be protected " obtain the substantial equivalent of the materials by
unless a highly persuasive showing of need is made. other means .... " Fed.R.Civ.P. 26(b)(3). In this case,
" In re Grand Jury Proceedings, 219 F.3d at 190 forcing defendants to ferret through the substantial
(irrtemal quotation marks omitted). list of individuals who have information relevant to
plaintiffs' claims in order to discover those
*4 The parties cite several cases in which courts individuals upon whose knowledge plaintiffs have
have applied the work product doctrine to discovery framed their allegations would be an undue
requests similar to those at issue here. See, e.g., hardship. Rule 26 provides unqualified protection
Miller v. Ventro Corp., No. C 01-01287SBA(EDL), for the "mental impressions, conclusions, opinions,
2004 U.S. Dist. LEXIS 6913 , at *6 (N.D.Cal. Apr. or legal theories of an attorney"; in this case the
21, 2004) (holding that the identity of individuals information sought does not impinge upon the zone
referenced in the complaint was not protected from of unqualified protection. The courts in the cases
disclosure); In re Ashworth Sec. Lit., 213 F.R.D. cited herein have taken different views on this
385, 389 (S.D.Cal.2002) (holding that the names of position according to the particular facts of each
individuals who provided information to plaintiffs' case, and this court finds that the defendants' need
counsel that was used in the complaint was immune for the information substantially outweighs the
from discovery as work product); In re potential for an intrusion into plaintiffs' counsel’s
Thermogenics Corp. Sec. Lit., 205 F.R.D. 631, 636 case preparation. Therefore, plaintiffs's objections
(N.D.Ga.2002) (holding that the names of witnesses are overruled and they must respond to first
interviewed by counsel who had knowledge of the interrogatories 7 and 8. Plaintiffs must also respond
facts alleged in the complaint were not protected to number 9, but, because number 9 seeks a
from disclosure); In re MTI Technology Corp Sec. documents that could reveal more than simply
Lit., No. SACV 00-745 DOC(ANX), 2002 U.S. names, they may prepare and serve a privilege log,
Dist. LEXIS 13015, at *18-*19 (C.D.Cal. Jun. 13, on or before July 11, 2005, if they deem any
2002) (holding that the identity of six individuals document opinion work product.
referenced in the complaint was immune from
discovery as work product); In re Aetna Sec. Lit.,
No. MDL 1219, 1999 U.S. Dist. LEXIS 8038, at III. CONCLUSION
*12 (E. D.Pa. May 26, 1999) (holding that the
identity of individuals referenced in the complaint *5 For the reasons set forth herein, defendants'
were not protected from disclosure). The results the motion to compel (dkt. # 141) is GRANTED in part
courts have reached in these cases are varied. and DENIED in part. Plaintiffs shall supplement
their responses as directed herein on or before July
The court holds that the identity of witnesses with 11,2005.
whom plaintiffs or their counsel have had contact
and individuals referenced in the complaint is So Ordered.
attorney work product but that this information is
not immune from discovery. Because this D.Comr.,2005.
information was accumulated during the course of In re Priceline.Com Inc. Securities Litigation
plaintiffs' attomey's investigation, it is attomey Slip Copy, 2005 WL 1366450 (D.Corrrr.)
work product. Discovery of this information would
reveal aspects of p1aintiffs' counsel‘s investigation, Briefs and Other Related Documents (Back to top)
and, through this information, defendants could
possibly gain insight into counsel‘s thought process. · 3:00cv01884 (Docket) (Oct. 02, 2000)
Although this information is attomey work product,
however, it is subject to disclosure under Rule 26 if END OF DOCUMENT
"the party seeking discovery has substantial need of
the materials in the preparation of the party's case
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