Free Brief in Opposition to Motion - District Court of Colorado - Colorado

Case 1:01-cv-01451-REB-KLM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-1451-REB-CBS (Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS, 01cv-1616-REB-CBS, 01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REBCBS, 02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658REB-CBS, 02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS) In re QWEST COMMUNICATIONS INTERNATIONAL, INC. SECURITIES LITIGATION LEAD PLAINTIFFS' OPPOSITION TO DEFENDANT QWEST COMMUNICATIONS INTERNATIONAL, INC.'S MOTION TO STAY MAGISTRATE JUDGE SHAFFER'S MAY 31, 2005 ORDER GRANTING LEAD PLAINTIFFS' MOTION TO COMPEL PRODUCTION OF DOCUMENTS

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Lead Plaintiffs oppose Defendant Qwest Communications International, Inc.'s ("Qwest" or the "Company") motion to stay Magistrate Judge Craig B. Shaffer's May 31, 2005 Order Granting Lead Plaintiffs' Motion to Compel Production of Documents ("Order"). The Order concludes that Qwest waived the attorney-client and work-product privileges for 220,000 documents produced to the Securities and Exchange Commission ("SEC") and/or the Department of Justice ("DOJ"). Order at 10. Qwest's motion to stay is based upon the faulty premise that the documents at issue are subject to a claim of privilege. The Company fails to note, however, that it has already waived the privilege, when it produced the documents at issue to the SEC and the DOJ. Qwest can claim no harm from the production of these documents to Lead Plaintiffs in this litigation, especially where a protective order it agreed to ensures confidentiality. Although Qwest has filed objections, a stay is not automatic or required pending resolution of its objection. See Esparza v. Bridgestone/Firestone, Inc., 200 F.R.D. 654, 656 (D. Colo. 2001) ("Those courts that have considered the issue have held that the filing of an objection does not automatically stay the magistrate judge's order."). In fact numerous courts have denied a request to stay similar orders pending resolution. See In re CMS Energy Sec. Litig., No. 02-CV-72004, 2005 U.S. Dist. LEXIS 8838 (E.D. Mich. May 13, 2005) (denying defendant's motion to stay production of a "special committee report" and related documents pending district court's review of magistrate judge's order); United States v. Duke Energy Corp., 218 F.R.D. 468 (M.D.N.C. 2003) (stay pending appeal of magistrate judge's discovery order denied because documents subject to protective order); In re Vitamins Antitrust Litig., No. 99-0197 (TFH), 2003 U.S. Dist. LEXIS 3038 (D.D.C. -1-

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Jan. 24, 2003) (stay of court's earlier order denied pending resolution); In re Ba-Mak Gaming Int'l, No. 95-1991, 1996 U.S. Dist. LEXIS 10642 (E.D. La. July 22, 1996) (denying motion for stay pending appeal). As discussed infra, Qwest will not be irreparably harmed by a denial of the stay nor will Qwest likely be successful on its objections. Alternatively, a denial of the stay will serve the public interest and prevent Lead Plaintiffs from being harmed by any further delay in the resolution of their claims. To obtain a stay pending appeal, the Tenth Circuit requires an applicant to address four factors: "(1) the likelihood of success on appeal; (2) the threat of irreparable harm if the stay is not granted; (3) the absence of harm to opposing parties if the stay is granted; and (4) any risk of harm to the public interest." Spain v. Podrebarac, 68 F.3d 1246, 1247 (10th Cir. 1995) (stay denied since none of the four factors clearly weighed in petitioner's favor). Qwest, as the movant, bears the burden of establishing the factors are met. Hillman v. United States Postal Serv., No. 97-4041-SAC, 2001 U.S. Dist. LEXIS 22409, at *3 (D. Kan. Nov. 27, 2001). Qwest has failed to satisfy its burden. Qwest claims that absent a stay, irreparable harm will occur because disclosure of its privileged documents cannot be undone by the Court upon a finding of error. This claim is unavailing since a protective order exists which will preserve the confidentiality of any documents produced by Qwest in this litigation. Accordingly, Qwest will not be harmed by production of the documents because the documents will be produced subject to the terms of the protective order. See Duke Energy, 218 F.R.D. at 477 (allowing production of allegedly privileged documents, pursuant to protective order to plaintiffs' counsel, to allow them to be used in preparation of case pending appeal of magistrate judge's discovery -2-

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order); In re Metiom, Inc., 318 B.R. 263 (S.D.N.Y. 2004) (holding potential for irreparable harm was substantially if not entirely reduced or eliminated by the confidentiality agreement and denying requested stay pending appeal). Qwest also claims that production of the documents threatens to render Qwest's objections moot. This is also insufficient to show irreparable harm. The mooting of an appeal is insufficient by itself to establish that a party will be injured by denying a stay. BaMak Gaming, 1996 U.S. Dist. LEXIS 10642, at *7 ("mooting of the appeal is not sufficient by itself to establish that Movers will be injured by denying the stay"). Thus, Qwest has failed to establish that it will suffer irreparable harm if the documents are produced to Lead Plaintiffs pending the resolution of Qwest's objections by Judge Blackburn. In contrast, the delay will injure Lead Plaintiffs who have already encountered numerous delays in this litigation. Given that deposition discovery closes on

September 16, 2005, time is of the essence. The 220,000 documents which are the subject of the motion are vital to Lead Plaintiffs' case. Lead Plaintiffs need to review these documents as soon as possible so that they can be used at the remaining depositions, including those of the individual defendants. This Court has already determined based upon the great weight of authority that Lead Plaintiffs are entitled to the documents at issue. Order at 10. Yet another delay would stymie Lead Plaintiffs' discovery progress, which is essential to the fair adjudication of this case.1

1

Furthermore, a stay of the order pending a ruling on Qwest's objections does not serve the public interest because it would side track this litigation. The public interest will be served if this litigation is kept on track and the stay denied. See Vitamins, 2003 U.S. -3-

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As discussed in Lead Plaintiffs' opposition to Qwest's objections to the Order, the great weight of authority supports the affirmation of the Court's ruling. Thus it is unlikely that the District Court will side with Qwest and overrule the order compelling production. The unlikelihood of success of Qwest's objections also weighs against a stay of this Court's Order. For the foregoing reasons, Lead Plaintiffs respectfully request this Court deny Qwest's motion to stay compliance with the Order. DATED: June 28, 2005 Respectfully submitted, LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP MICHAEL J. DOWD SPENCER A. BURKHOLZ THOMAS E. EGLER SCOTT H. SAHAM X. JAY ALVAREZ TRIG R. SMITH ANDREA N. SALOW

/S/ SCOTT H. SAHAM SCOTT H. SAHAM 401 B Street, Suite 1600 San Diego, CA 92101 Telephone: 619/231-1058

Dist. LEXIS 3038, at *26 (rejecting defendants' arguments that production of materials pending appeal would cause them irreparable harm and holding that "public interest will be served if this litigation is kept on track"). Because the Court and the parties have devoted substantial resources to this case the public interest weighs against a stay. Id.

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LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP RAY A. MANDLEKAR 9601 Wilshire Blvd., Suite 510 Los Angeles, CA 90210 Telephone: 310/859-3100 310/278-2148 (fax) Lead Counsel for Plaintiffs DYER & SHUMAN, LLP ROBERT J. DYER III KIP B. SHUMAN JEFFREY A. BERENS 801 East 17th Avenue Denver, CO 80218-1417 Telephone: 303/861-3003 Liaison Counsel
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DECLARATION OF SERVICE BY MAIL I, the undersigned, declare: 1. That declarant is and was, at all times herein mentioned, a citizen of the

United States and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested party in the within action; that declarant's business address is 401 B Street, Suite 1600, San Diego, California 92101. 2. That on June 28, 2005, declarant served the LEAD PLAINTIFFS'

OPPOSITION TO DEFENDANT QWEST COMMUNICATIONS INTERNATIONAL, INC.'S MOTION TO STAY MAGISTRATE JUDGE SHAFFER'S MAY 31, 2005 ORDER GRANTING LEAD PLAINTIFFS' MOTION TO COMPEL PRODUCTION OF DOCUMENTS by depositing a true copy thereof in a United States mailbox at San Diego, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List. 3. That there is a regular communication by mail between the place of mailing

and the places so addressed. I declare under penalty of perjury that the foregoing is true and correct. Executed this 28th day of June, 2005, at San Diego, California. /S/ KATHLEEN R. JONES KATHLEEN R. JONES

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QWEST (LEAD) Service List - 6/28/2005 Page 1 of 3 Defendant(s) Scott B. Schreiber John A. Freeman Kwame Clement Arnold & Porter 555 Twelfth Street, N.W. Washington, DC 20004 202/942-5000 202/942-5999(Fax)

(201-067)

Timothy Atkeson Joshua D. Franklin Arnold & Porter LLP 370 Seventeenth Street, Suite 4500 Denver, CO 80202-1370 303/863-1000 303/832-0428(Fax)

Terry W. Bird Vincent J. Marella Mark Drooks Bird, Marella, Boxer & Wolpert, P.C. 1875 Century Park East, 23rd Floor Los Angeles, CA 90067-2561 310/201-2100 310/201-2110(Fax) David W. Shapiro John F. Cove, Jr. Boies, Schiller & Flexner, LLP 1999 Harrison Street Oakland, CA 94612 510/874-1005 510/874-1460(Fax) Wesley R. Powell Clifford Chance US LLP 31 West 52nd Street New York, NY 10019 212/878-8000 212/878-8375(Fax)

Alfred Levitt Jonathan D. Schiller David Boyd Boies, Schiller & Flexner, LLP 5301 Wisconsin Avenue, N.W., Suite 800 Washington, DC 20015-2015 202/237-2727 202/237-6131(Fax) David Boies Boies, Schiller & Flexner, LLP 333 Main Street Armonk, NY 10504 914/749-8200 914/749-8300(Fax)

James E. Nesland Paul Schwartz Jeff Smith Cooley Godward, LLP 380 Interlocken Crescent, Suite 900 Broomfield, CO 80021-8023 720/566-4000 720/566-4099(Fax)

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QWEST (LEAD) Service List - 6/28/2005 Page 2 of 3

(201-067)

Bruce F. Black Michael J. Hofmann Holme Roberts & Owen LLP 1700 Lincoln Street, Suite 4100 Denver, CO 80203 303/861-7000 303/866-0200(Fax)

Mark C. Hansen Rebecca Beynon David Schwarz Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C. 1615 M Street, N.W., Suite 400 Washington, DC 20036 202/326-7900 202/326-7999(Fax) Robert N. Miller Stephanie E. Dunn Perkins Coie LLP 1899 Wynkoop Street, Suite 700 Denver, CO 80202 303/291-2300 303/291-2400(Fax)

Eric S. Goldstein Roberta A. Kaplan Marguertie S. Dougherty Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 212/373-3000 212/757-3990(Fax) Frederick J. Baumann James M. Lyons Rothgerber Johnson & Lyons LLP 1200 17th Street, Suite 3000 Denver, CO 80202-5839 303/623-9000 303/623-9222(Fax) Charles A. Stillman Kimo S. Peluso Stillman & Friedman, P.C. 425 Park Avenue New York, NY 10022 212/223-0200 212/223-1942(Fax)

Terence C. Gill Marcy M. Heronimus Sherman & Howard L.L.C. 633 Seventeenth Street, Suite 3000 Denver, CO 80202 303/297-2900 303/298-0940(Fax)

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QWEST (LEAD) Service List - 6/28/2005 Page 3 of 3 Plaintiff(s) Robert J. Dyer III Kip B. Shuman Jeffrey A. Berens Dyer & Shuman, LLP 801 East 17th Avenue Denver, CO 80218-1417 303/861-3003 303/830-6920(Fax)

(201-067)

William S. Lerach Spencer A. Burkholz Thomas E. Egler Lerach Coughlin Stoia Geller Rudman & Robbins LLP 401 B Street, Suite 1600 San Diego, CA 92101-4297 619/231-1058 619/231-7423(Fax)

Joe R. Whatley, Jr. Whatley Drake, LLC 2323 Second Ave., North Birmingham, AL 35203 205/328-9576 205/328-9669(Fax)

Plaintiff Stichting Pensioenfonds Counsel Jay W. Eisenhofer Geoffrey C. Jarvis Michael J. Barry Grant & Eisenhofer, P.A. 1201 North Market Street, Suite 2100 Wilmington, DE 19801 302/622-7000 302/622-7100(Fax) Clyde A. Faatz Christopher J.W. Forrest Hamilton and Faatz, A P.C. 1600 Broadway, Suite 500 Denver, CO 80202-4905 303/830-0500 303/860-7855(Fax)