Free Motion to Compel - District Court of Colorado - Colorado

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 1 of 16

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 00-cv-1864-REB-BNB (Consolidated with 00-cv-1908-REB-BNB, 00-cv1910-REB-BNB, 00-cv-1919-REB-BNB, 00-cv-1945-REB-BNB, 00-cv-1954-REB-BNB, 00-cv-1957-REB-BNB, 00-cv-1963-REB-BNB, 00-cv-1996-REB-BNB, 00-cv-2040-REBBNB, 00-cv-2074-REB-BNB, 00-cv-2149-REB-BNB, 00-cv-2243-REB-BNB, and 00-cv2316-REB-BNB) In re ICG COMMUNICATIONS, INC. SECURITIES LITIGATION ______________________________________________________________________ DEFENDANTS' MOTION TO COMPEL DISCOVERY PURSUANT TO FED. R. CIV. P. RULE 37(A) ______________________________________________________________________ PRELIMINARY STATEMENT The Federal Rules of Civil Procedure mandate discovery of all documents that are (i) in a party's possession, custody or control and (ii) relevant to any party's claims or defenses, so long as the discovery is reasonably calculated to lead to the discovery of admissible evidence. Plaintiffs are flouting both of these basic federal discovery rules. They have refused to produce documents within their control, baldly asserting that documents in their agents' custody are not discoverable. And they have stonewalled against discovery requests concerning issues stemming from their own pleadings. This Court should reject these "just say no" tactics and compel Plaintiffs to provide full discovery as the Federal Rules contemplate.1 The Federal Rules and numerous cases make clear that a party's agent's documents are within the party's "possession, custody or control"--and therefore

1

Pursuant to Fed. R. Civ. P. 37(a)(2) and D.C.Colo.L.R. 7.1(A), Defendants made a good-faith effort to resolve this dispute without Court intervention. The parties conferred regarding these issues for several hours on May 13, 2005 and in additional correspondence (copies of which are attached as Exhibits G­R).

8053\1\930374.1

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 2 of 16

discoverable--by serving a request on the party. Plaintiffs concede that their investment advisors are their agents and are likely to have responsive information, yet refuse to search for or produce their agents' documents. Plaintiffs offer no explanation for their conclusory assertion that these documents are outside their control, and should therefore be compelled to produce their investment advisors' responsive documents. Plaintiffs fare no better with their refusals to produce documents in response to specific requests. Both in their Consolidated and Amended Complaint and their motion for class certification, Plaintiffs seek to represent a class of ICG investors who purchased shares between December 9, 1999, and September 18, 2000. Courts routinely allow defendants to discover proposed class representatives' trading histories--not just in the securities at issue in the lawsuit, but any securities--to test whether the proposed class representatives are adequate and typical. See Fed. R. Civ. P. 23(a). Likewise, courts permit discovery concerning a proposed class representative's relationship with counsel--including retainer agreements--to ensure that the proposed class representative can monitor counsel adequately. Yet Plaintiffs, asserting a conclusory "undue burden" objection (coupled with boilerplate relevance and privilege objections), refuse to produce such documents. Without this discovery, Defendants and, more importantly, this Court will have no way of satisfying themselves that Plaintiffs are fit class representatives. Plaintiffs also refuse to provide discovery in response to two requests narrowly targeting the Consolidated and Amended Complaint's surviving allegations. Plaintiffs refuse to produce documents concerning the surviving allegations, including calendars, appointment books or datebooks, simply because they claim

8053\1\930374.1

2

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 3 of 16

it is burdensome. (Resps. to Second Request No. 5, Ex. D at 7.) But they fail to explain why this search for responsive documents is so difficult or why they should be excused from producing documents in response to a request that mirrors one they lodged on Defendants. Plaintiffs also refuse to identify witnesses that they interviewed as part of their investigation based on a claim of attorney work product. (Resps. to Interrogatory No. 2, Ex. F at 5 and Ex. S at 6.) The information is not protected, but even if it were, it is discoverable because Plaintiffs have already provided the information in unsworn form, and in any event, Defendants have substantial need for the information outweighing any reason for the protection. Plaintiffs seek to represent an ICG investor class in this action, yet attempt to shirk some of their most basic discovery obligations with conclusory undue burden claims. This Court should grant the motion to compel in its entirety. BACKGROUND Plaintiffs' Consolidated and Amended Complaint ("Amended Complaint" or the "CAC") alleges that defendants Shelby Bryan ("Bryan") and William S. Beans ("Beans") violated Securities Exchange Act Section 10(b) and Rule 10b-5 by making various misrepresentations concerning ICG's business between December 9, 1999, and September 18, 2000.2 On February 28, 2005, Plaintiffs moved to certify under Rule 23(a) and 23(b)(3) a class comprising "[a]ll persons or entities that purchased [or otherwise acquired] ICG stock on the open market between December 9, 1999, and September 18, 2000 (the `Class Period'), and who were damaged thereby." (Mot. for Class Cert. at 1) (alteration in original).3
2

On July 18, 2005, Plaintiffs were granted leave to file a Second Consolidated and Amended Complaint ("Second Amended Complaint"). On August 1, 2005, Defendants moved to dismiss the Second Amended Complaint and therefore do not seek discovery related to "new" allegations. Defendants reserve the right to seek further discovery should the Court sustain the Second Amended Complaint.
3

On August 5, 2005, the Court stayed briefing on the class certification motion until Defendants' Motion to Dismiss the Second Amended Complaint is decided.

8053\1\930374.1

3

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 4 of 16

Defendants' Discovery Requests On February 4, 2005, Defendants served Plaintiffs with Defendants' First Request for Production of Documents, seeking discovery concerning Lead Plaintiffs' fitness to serve as class representatives, such as their trading history and relationships with Lead Counsel and Liaison Counsel. (Ex. A.) On February 16, 2005, Defendants served their Second Request for Production of Documents and First Set of Interrogatories, which sought information concerning the Amended Complaint's surviving substantive allegations. (Exs. C and E.) In their initial responses and objections to these requests, Plaintiffs agreed to produce documents responsive to only a few requests, and only after the parties agreed to a proposed confidentiality order. (See Exs. B and D.) After Plaintiffs finally produced documents--one month later--under an "attorneys' eyes only" agreement pending a confidentiality order's entry, the parties conferred concerning their disputes. (Exs. G­ R.) While the parties made some progress after hours of discussion and several correspondence rounds, numerous issues remain unresolved. The Disputed Discovery As an initial matter, Defendants' requests explicitly instructed Plaintiffs to produce all documents within their possession, custody or control, as defined under the Federal Rules and applicable case law: Each request contained herein extends to any Documents in Plaintiffs' possession, custody, or control . . . . A Document is deemed to be in Plaintiffs' possession, custody or control . . . if it is in their physical custody, or if it is in the physical custody of any other Person and any of Plaintiffs: (i) own such Document in whole or in part; (ii) have a right by contract, statute, or otherwise to use, inspect, examine, or copy such

8053\1\930374.1

4

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 5 of 16

Document on any terms; (iii) have an understanding, express or implied, that one or more of Plaintiffs may use, inspect, examine or copy such Document on any terms; or (iv) have, as a practical matter, been able to use, inspect, examine, or copy such Document when any of Plaintiffs have sought to do so. (Ex. A at 4­5.) Plaintiffs, however, improperly limit their production to documents in their possession.4 While conceding that their investment advisors (who are indisputably their agents) possess responsive documents, Plaintiffs refuse to produce the investment advisors' documents on the ground that such documents are not within Plaintiffs' control. (Ex. I at 2; Ex. K at 1.) Turning to Defendants' specific requests, Plaintiffs have refused to produce documents squarely related to their adequacy and typicality as class representatives: Document Request No. 9 seeks "Any and all Documents Relating to investments by Plaintiffs, or on Plaintiffs' behalf, in any publicly traded debt or equity securities of any corporation, including but not limited to account statements, monthly, quarterly and/or annual statements, opening account forms, confirmations, prospectuses, annual and periodic reports, or any other summary of investment activities."5 (Ex. A at 8.) Despite narrowly tailoring their requests to discover information concerning Plaintiffs' investment objectives and risk tolerance--which is relevant to typicality and adequacy--Plaintiffs refuse to produce responsive documents on the grounds that the requests are overbroad.6 (Ex. K at 2.)
Plaintiffs state: "Lead Plaintiffs object to Definition and Instruction No. 16 on the ground that it is overbroad and unduly burdensome. Lead Plaintiffs production in response to these Requests, as set forth in detail below, will include only documents in the possession of Chicago Police, RSA and Strategic Market. Specifically, Lead Plaintiffs' production will not include documents in the possession of `any partner, accountant, tax advisor, financial planner, financial advisor, financial manager, investment manager, investment banker, arbitrageur, broker, dealer, representative, or all other Person or entities over which Plaintiffs exercise control, or who exercise control over, or are in common control with Plaintiffs.'" (Ex. B at 3.)
4

Similarly, Request No. 10 targets "Documents Relating to the purchase and/or sale of any futures, options, or other derivatives by Plaintiffs, including but not limited to account statements, monthly, quarterly and/or annual statements, opening account forms, confirmations, prospectuses, annual and periodic reports, or any other summary of investment activities." (Ex. A at 8.)
5

With respect to Request No. 9, Plaintiffs state: "Lead Plaintiffs object to this Request on the ground that it is overly broad, unduly burdensome, harassing and seeks information that is neither relevant to the
6

8053\1\930374.1

5

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 6 of 16

Document Request No. 14 seeks "Any and all Documents Concerning Plaintiffs' past and/or current relationships with liaison counsel and co-lead counsel listed in the Amended Complaint, including but not limited to any business, social or familial relationships." (Ex. A at 8.) Flouting authority squarely on point, Plaintiffs refuse to produce responsive documents, asserting that the request seeks privileged documents and seeks information that is irrelevant to Plaintiffs' adequacy to serve as class representatives.7 (Ex. B at 9­10; Ex. K at 2.) Document Request No. 16 seeks "Any and all Documents Concerning any understanding or agreement between Plaintiffs and any Person, including counsel, Relating to the following subjects: (a) The payment of disbursements, costs and/or expenses in this litigation, or (b) Any amount that Plaintiffs may receive in the event of a settlement of this litigation or a judgment in favor of a putative class that will be different from the proportionate share that a plaintiff would receive as a member of such putative class." (Ex. A at 9.) Plaintiffs refuse to produce responsive documents, asserting that their retainer agreements are "protected by the attorney-client privilege and irrelevant."8 (Ex. K at 2.) Similarly, Plaintiffs refuse to produce documents and identify witnesses that are indisputably pertinent to the Amended Complaint's surviving allegations: Document Request No. 5 of Defendants' Second Request for Production of Documents seeks, "To the extent not already requested, any and all desk calendars, appointment books, datebooks, diaries, business journals, business
claims or defenses of any party, nor reasonably calculated to lead to the discovery of admissible evidence. Specifically, when read fairly, this Request seeks every single piece of paper generated by two large public pension funds and a large private investment fund over a seven year period. Furthermore, `Documents Relating to' Lead Plaintiffs' investments, other than those ICG securities, are not relevant to this Action." (Ex. B at 7­8.) Plaintiffs respond to Request No. 10: "Lead Plaintiffs object to this Request on the ground that it is overly broad, unduly burdensome, harassing and seeks information that is neither relevant to the claims or defenses of any party, nor reasonably calculated to lead to the discovery of admissible evidence. Specifically, `Documents Relating to the purchase and/or sale of any futures, options, or other derivatives by Plaintiffs', other than for ICG securities, are not relevant to this Action. Lead Plaintiffs further object to this Request on the grounds that it is vague and ambiguous." (Id. at 8.) Plaintiffs respond: "Lead Plaintiffs object to this Request on the grounds that it is harassing, seeks documents protected by the attorney client privilege or other applicable privileges or immunities, and seeks information that is neither relevant to the claims or defenses of any party, nor reasonably calculated to lead to the discovery of admissible evidence." (Ex. B at 9­10.)
7

Plaintiffs state: "Lead Plaintiffs object to part (a) of this Request on the grounds that it seeks documents protected by the attorney-client privilege or other applicable privileges or immunities. Subject to, and without waiving this objection, and the General Objection above, Lead Plaintiffs will produce responsive non-privileged documents to part (b) of this Request in their possession, custody or control, located by a reasonably diligent search." (Ex. B at 10.) Plaintiffs' relevance objection was raised for the first time during the parties' May 13 discovery conference. (Ex. H at 4.)
8

8053\1\930374.1

6

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 7 of 16

notebooks and notes Relating to the Amended Complaint's allegations against Defendants that the Court sustained in its August 24 Order." (Ex. C at 4.) While Plaintiffs have lodged a mirror-image request to Defendants, they refuse to produce such documents based on a conclusory objection that this request is a burdensome "fishing expedition."9 (Ex. K at 3.) Interrogatory No. 2 asks Plaintiffs to "Identify the `over 20 former ICG employees and customers' who were `contact[ed] and interview[ed]' as part of the `investigation' described in paragraphs 2 and 38 of the Amended Complaint." (Ex. E at 4.) Plaintiffs maintain that this information is protected from disclosure by the work product doctrine, even though their proposed Second Amended Complaint discloses the witnesses on which it relies.10 (Ex. K at 3.) Plaintiffs' unrelenting refusal to provide these relevant, non-privileged documents and information has regrettably forced Defendants to file this motion. ARGUMENT I. PLAINTIFFS MUST PRODUCE DOCUMENTS IN THEIR AGENTS' POSSESSION The Federal Rules of Civil Procedure require Plaintiffs to produce all documents within their "possession, custody or control." Fed. R. Civ. P. Rule 34(a). "`[C]ontrol' does not require that the party have legal ownership or actual physical possession of the documents at issue; rather, documents are considered to be under a party's control when that party has the right, authority, or practical ability to obtain the documents from

Plaintiffs state: "Lead Plaintiffs object to the Document Request No. 5 on grounds that it is vague and ambiguous in its entirety. Lead Plaintiffs further object to this request to the extent the documents and/or information sought is protected from disclosure by the attorney-client privilege, the attorney work-product protection, Rule 26(b)(3) of the Federal Rules of Civil Procedure relating to trial preparation materials, or any other applicable privilege or protections, or is otherwise immune from discovery." (Ex. D at 7.) While Plaintiffs refuse to search for relevant calendars or appointment books, they have represented they have no non-privileged responsive journals, notebooks or notes "in their possession." (Ex. K at 3.)
9

Plaintiffs object: "Lead Plaintiffs object to Interrogatory No. 2 to the extent that the information and/or documents sought is protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, Rule 26(b)(3) of the Federal Rules of Procedure relating to trial preparation materials, or any other applicable privilege or protection, or is otherwise immune from discovery." (Ex. F at 5; Ex. S at 6.)
10

8053\1\930374.1

7

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 8 of 16

a non-party to the action."11 Thus, a party must produce (or cause to be produced), in response to a request, documents in its agents' possession: "[I]nformation within the hands of [a party's] `agents and others within its control must be supplied.'"12 Plaintiffs here refuse to produce responsive documents in their agents' possession, even though they admit that their investment managers may have responsive documents. (See Gen. Objection Nos. 5 and 7, Ex. B at 2, 3; Ex. I at 2­3.) All Plaintiffs offer to support their indefensible position is a conclusory--and legally incorrect--assertion that the agents' documents are beyond Plaintiffs' control. (Ex. I at 2­3; Ex. K at 1.) In view of Plaintiffs' failure to provide any support--much less sworn statements--bolstering their position, the Court should compel Plaintiffs to produce any responsive documents in their investment advisors' possession. II. PLAINTIFFS MUST PRODUCE RELEVANT, NON­PRIVILEGED DOCUMENTS Parties may discover information relevant to any party's claims or defenses-- including the existence of documents and the identity of persons having knowledge of any discoverable matter--so long as it is "reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. Rule 26 (b)(1). Each disputed request seeks material well within these far-reaching borders.

11

Bank of New York v. Meridien BIAO Bank Tanzania Ltd., 171 F.R.D. 135, 146 (S.D.N.Y. 1997); accord Resolution Trust Corp. v. Deloitte & Touche, 145 F.R.D. 108, 110 (D. Colo. 1992) (holding that documents are within a party's possession, custody or control if the party "has the legal right to obtain the documents on demand").
12

Swarthmore Radiation Oncology, Inc. v. Lapes, No. CIV. A. 92-3055, 1993 WL 517734, at *1 (E.D. Pa. Dec. 1, 1993) (citation omitted) (Ex. V); see also Wardrip v. Hart, 934 F. Supp. 1282, 1286 (D. Kan. 1996) (finding financial records of a party in the possession of its accountant are documents party has legal right to obtain).

8053\1\930374.1

8

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 9 of 16

A.

Plaintiffs' Trading History Is Relevant and Discoverable

Documents concerning Plaintiffs' investment trading history--whether in stock, options, futures, or other securities--are discoverable because they pertain to Plaintiffs' adequacy and typicality as class representatives. As one court held: [P]laintiffs' investment history and background is relevant to the adequacy issue. . . . Plaintiffs' trades in publicly held securities other than the defendant corporation for the period of time requested is also relevant to the issue of plaintiffs' reliance and motivation in bringing this action and may lead to the discovery of admissible evidence.13 Following this logic, courts around the country routinely order plaintiffs seeking to serve as class representatives to produce documents concerning their investing histories, even in securities not at issue in the pending action.14 Nevertheless, Plaintiffs refuse to produce such documents, complaining that the requests are overbroad, unduly burdensome and seek irrelevant information because they "seek virtually all documents in their possession." (Resps. to Request Nos. 9­10,

13

Roseman Profit Sharing Plan v. Sports and Recreation, 165 F.R.D. 108, 112 (M.D. Fla. 1996) (emphasis added).
14

See, e.g., In re Acceptance Ins. Cos. Sec. Litig., No. 8:99CV547, 2002 U.S. Dist. LEXIS 27681, at *13 (D. Neb. Aug. 2, 2002) (requiring sophisticated investors to produce documents relating to their investment and trading history because it "is directly relevant to the allegation in the complaint that defendants perpetrated a fraud on the market") (Ex. W); In re Grand Casinos, Inc., Sec. Litig., 181 F.R.D. 615, 620 (D. Minn. 1998) (compelling discovery of "the Lead Plaintiffs' investment histories and strategies" because the documents "could lead to the discovery of admissible evidence; namely, evidence which could serve to rebut any presumption that they relied upon the integrity of the market"); Ziemack v. Centel Corp., No. 92 C 3551, 1995 U.S. Dist. LEXIS 18192, at *9 (N.D. Ill. Dec. 6, 1995) (ordering Plaintiffs to respond to document requests concerning their trading history because "Plaintiffs' sophistication in the marketplace is certainly relevant towards rebutting their allegations of reliance") (Ex. X); In re ML-Lee Acquisition Fund II, L.P. and ML-Lee Acquisition Fund (Retirement Accounts) II, L.P. Sec. Litig., 149 F.R.D. 506, 508 (D. Del. 1993) (holding documents concerning Plaintiffs' investment history are "relevant to the Court's determination of whether Plaintiffs satisfy the typicality requirement of Fed. R. Civ. P. 23(a)(3) . . . issues of Plaintiffs' reliance on the alleged fraud, and Plaintiffs' burden of showing that they exercised due diligence in investigating the alleged fraud"); In re Harcourt Brace Jovanovich, Inc. Sec. Litig., 838 F. Supp. 109 (S.D.N.Y. 1993) (compelling discovery of named plaintiffs' investment history).

8053\1\930374.1

9

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 10 of 16

Ex. B at 7­8; Ex. K at 2.) Whether this is true or not--and Plaintiffs have offered no competent evidence that it is--is beside the point. A proposed class representative's trading history in other securities is relevant and discoverable. B. Plaintiffs Must Produce Documents Concerning Their Relationship with Lead Counsel

Courts routinely deny class certification where lead plaintiffs' relationship with lead counsel--whether business, family, personal or otherwise--could interfere with the proposed class representative's ability to supervise counsel.15 Defendants' request for documents concerning Plaintiffs' relationships is plainly calculated to lead to the discovery of admissible evidence on this issue (Request No. 14, Ex. A at 8), but Plaintiffs, relying on boilerplate objections, refuse to produce responsive documents. (Resps. to First Request No. 14, Ex. B at 9­10; Ex. K at 2.) In view of the extensive contrary authority, Plaintiffs' relevance and breadth objections are plainly meritless. Nor can Plaintiffs rely on a blanket privilege claim to avoid this discovery.16 Plaintiffs offer no explanation for why documents unrelated to the attorney-client

15

Susman v. Lincoln Am. Corp., 561 F.2d 86, 89­90 (7th Cir. 1977) (plaintiffs found to be inadequate representatives where one was member of counsel's law firm and other was counsel's brother); see also London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1255 (11th Cir. 2003) ("long-standing personal friendship" of class representative and class counsel "casts doubt on [class representative's] ability to place the interests of the class above that of class counsel"); Shroder v. Suburban Coastal Corp., 729 F.2d 1371, 1375­76 (11th Cir. 1984) (rejecting a proposed class representative who was primarily employed by the class counsel's law firm); In re Discovery Zone Sec. Litig., 169 F.R.D. 104, 109 (N.D. Ill. 1996) (requiring class counsel to replace the class representatives, who were personal stockbrokers for class counsel); Miller v. Calvin, Civ. Action No. 82-C-2253, 1984 U.S. Dist. LEXIS 21057, at *7 (D. Colo. Dec. 20, 1984) (Ex. Y); Stull v. Pool, 63 F.R.D. 702 (S.D.N.Y. 1974) (holding that wife of member of the law firm that would act as class counsel could not qualify as class representative).
16

See Atteberry v. Longmont United Hosp., 221 F.R.D. 644, 648­49 (D. Colo. 2004) (Boland, M.J.) ("A blanket claim of privilege will not suffice.").

8053\1\930374.1

10

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 11 of 16

relationship are purportedly privileged, nor could they. And even if some documents responsive to this request were privileged, Plaintiffs' remedy is not to withhold wholesale all responsive documents, privileged or not. Rather, they must produce nonprivileged responsive documents and log any privileged documents.17 Accordingly, Defendants' motion to compel Plaintiffs to produce documents in response to Request No. 14 should be granted. C. Plaintiffs Must Produce Their Retainer Agreements

Courts allow Defendants to discover proposed class representatives' retainer agreements with their counsel because such agreements are "relevant to a plaintiff's ability to protect the interests of potential class members by adequately funding the suit, and to the question of awarding of attorneys fees upon settlement or judgment."18 Nonetheless, Plaintiffs have refused to produce their retainer agreements with lead counsel, claiming that they are both privileged and irrelevant. (Resps. to First Request No. 16, Ex. B at 10; Ex. K at 2.) But courts consistently hold that retainer agreements are not privileged,19 and retainer agreements are relevant to a proposed class representative's adequacy.20 Indeed, Plaintiffs themselves have tacitly conceded
17

See Fed. R. Civ. P. Rule 26(b)(5); see also Atteberry, 221 F.R.D. at 649 (observing that the failure to produce a privilege log, or the production of an inadequate log, may result in waiver of privilege).
18

Porter v. NationsCredit Consumer Disc. Co., CIV. ACTION NO. 03-3768, 2004 U.S. Dist. LEXIS 13641, at *6­*7 (E.D. Pa. July 8, 2004) (Ex. Z).
19

Renner v. Chase Manhattan Bank, 98 Civ. 926 (CSH), 2001 U.S. Dist. LEXIS 17920, at *5­*6 (S.D.N.Y. Nov. 2, 2001) ("[F]ederal courts uniformly allow the identity of the client and matters regarding fee arrangements to be discovered.") (citations omitted) (Ex. AA); Kravco Co. v. Valley Forge Center Assocs., Civ. A. No. 91-4932, 1991 WL 274816, at *4 (E.D. Pa. Dec. 17, 1991) (retainer agreements are not privileged) (Ex. BB).
20

In re Cendant Corp. Litig., 264 F.3d 201, 265 (3d Cir. 2001) (holding that in considering the adequacy of a plaintiff for appointment as lead plaintiff, a Court must consider whether the plaintiff has negotiated "a reasonable retainer agreement with that counsel"); Porter, 2004 U.S. Dist. LEXIS 13641, at *6­*7;

8053\1\930374.1

11

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 12 of 16

the retainer agreements' relevance by relying on their terms to avoid discovery of financial information calculated to determine whether Plaintiffs have the financial wherewithal to represent the class.21 (Ex. I at 3.) Accordingly, Plaintiffs should be compelled to produce their retainer agreements with Lead Counsel. D. Plaintiffs Must Produce Calendars and Appointment Books Concerning Their Allegations

Request No. 5 of Defendants' Second Set of Requests targets calendars and appointment books concerning the Complaint's surviving allegations. Plaintiffs, asserting that production would be unduly burdensome, have refused to provide documents responsive to this request. (Resps. to Second Request No. 5, Ex. D at 7; Ex. K at 3.) But Plaintiffs have failed to shoulder their burden under the Federal Rules to "show specifically how each discovery request is burdensome or oppressive by submitting affidavits or offering evidence revealing the nature of the burden."22 For this reason alone, the Court should compel production.23 Plaintiffs' objection is especially ironic because they served a mirror-image request on Defendants. (Request No. 4 of Plaintiffs' First Request for Production of
Epstein v. Am. Reserve Corp., No. 79 C 4767, No. 80 C 6251, No. 81 C 1475, 1985 U.S. Dist. LEXIS 15842, at *7 (N.D. Ill. Sept. 18, 1985) ("Fee arrangements are relevant to the ability of named plaintiffs to protect the interest of potential class members and hence are a proper subject for discovery.") (Ex. CC); Ferraro v. Gen. Motors Corp., 105 F.R.D. 429, 433 (D.N.J. 1984) (compelling production of fee agreement).
21

Plaintiffs assert there is no legitimate question concerning their ability to finance this action because lead counsel has been retained on a contingency basis. (Ex. I at 3.)
22

Oleson v. Kmart Corp., 175 F.R.D. 560, 565 (D. Kan. 1997); accord DIRECTV, Inc. v. Puccinelli, 224 F.R.D. 677, 689 n.43 (D. Kan. 2004) ("[A] party objecting on the basis of overbreadth or undue burden has the burden to support the objection with an affidavit or other evidence.") (citing Hammond v. Lowe's Home Ctrs., Inc., 216 F.R.D. 666, 672 (D. Kan. 2003)); St. Paul Reins. Co. v. Commercial Fin. Corp., 198 F.R.D. 508, 511­12 (N.D. Iowa 2000).
23

Id.

8053\1\930374.1

12

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 13 of 16

Documents, Ex. T at 7.) In any event, the request's pertinence is plain. Because Plaintiffs' reliance is at issue in this action,24 Defendants are entitled to documents concerning every communication, meeting or other event that influenced their decisions to purchase ICG stock--including calendars and appointment books. Accordingly, this Court should compel Plaintiffs to produce documents responsive to Request No. 5. E. Plaintiffs Must Identify Witnesses Interviewed During Their Investigation

Knowledgeable witnesses' identities are not privileged or immune from disclosure.25 Nevertheless, Plaintiffs refuse--on work product grounds--to answer Defendants' interrogatory asking Plaintiffs to identify the witnesses contacted as part of the "investigation" alleged in paragraphs 2 and 38 of the Amended Complaint. (Resps. to Interrogatory No. 2, Ex. F at 5 and Ex. S at 6.) Numerous courts subscribe to the better-reasoned view that it does not.26 While work product immunity protects attorneys'

24

See Basic Inc. v. Levinson, 485 U.S. 224, 243 (1988) ("Reliance provides the requisite causal connection between a defendant's misrepresentation and a plaintiff's injury.") (internal citations omitted).
25

See Fed. R. Civ. P. Rule 26(b)(1) (parties may obtain discovery of identity and location of persons having knowledge of any discoverable matter).
26

See In re Theragenics Corp. Sec. Litig., 205 F.R.D. 631, 633, 636 (N.D. Ga. 2002) (concluding names and addresses of individuals interviewed, as alleged in complaint, are not protected and compelling disclosure); In re Aetna Inc. Sec. Litig., No. CIV. A. MDL 1219, 1999 WL 354527, at *2 (E.D. Pa. May 26, 1999) (finding that names and addresses of individuals interviewed by plaintiffs' counsel are not protected by attorney work product doctrine and compelling disclosure of witnesses described in complaint and witnesses relied on for allegations in complaint) (Ex. DD); see also Puricelli v. Houston, No. Civ.A. 992982, 2000 WL 298922, at *6 (E.D. Pa. Mar. 15, 2000) (compelling disclosure of individuals relied upon to deny each paragraph of complaint) (Ex. EE); Orgulf Transp. Co. v. Magnolia Marine Transp., No. 971411, 1998 U.S. Dist. LEXIS 9732 (E.D. La. June 25, 1998) (compelling response to interrogatory seeking the identities of persons who were interviewed or gave statements, which "does not seek privileged attorney-client communications, work product or trial preparation materials") (Ex. II); Levit v. Filmways, Inc., No. 80-586 CMW, 1984 U.S. Dist. LEXIS 19775, at *15 (D. Del. Feb 3, 1984) (compelling identification of persons interviewed) (Ex. FF).

8053\1\930374.1

13

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 14 of 16

mental processes and legal opinions from disclosure,27 identifying individuals plaintiffs' counsel interviewed will not reveal counsel's "mental impressions, conclusions, opinions, or legal theories."28 Indeed, disclosure of such information is consistent with the Reform Act's goal of curtailing strike suits because it requires securities fraud plaintiffs to provide the basis for their "information and belief" allegations.29 Even if the interviewees' identities were work product--and they are not-- Defendants may overcome the attorney work product immunity because they have a "substantial need of the materials in the preparation of [its] case and . . . [are] unable without undue hardship to obtain the substantial equivalent of the materials by other means."30 In their Rule 26(a) disclosures, Plaintiffs have identified over 150 current and former ICG employees alone, providing limited or no contact information for many individuals and attributing the same generic subjects of "potential information" to most

27

In re Aetna Inc. Sec. Litig., 1999 WL 354527, at *3 (discussing Hickman v. Taylor, 329 U.S. 495 (1947)).
28 29

Id. (quoting Fed. R. Civ. P. 26(b)(3)); accord In re Theragenics Corp. Sec. Litig., 205 F.R.D. at 636.

In re Theragenics Corp. Sec. Litig., 205 F.R.D. at 636 (observing that "disclosure of names and addresses of persons interviewed by Plaintiffs' counsel is consistent with the policy considerations underlying the Reform Act"); In re Aetna Inc. Sec. Litig., 1999 WL 354527, at *4 (same). While some courts have reached a different conclusion in the securities context, see, e.g., In re Ashworth, Inc. Sec. Litig., 213 F.R.D. 385 (S.D. Cal. 2002) (concluding identity of defendant's current and former employees who provided information forming the basis for allegations is protected as attorney work product); In re MTI Tech. Corp. Sec. Litig. II, No. SACV 00-0745 DOC (ANx), 2002 U.S. Dist. LEXIS 13015 (C.D. Cal. June 13, 2002) (concluding Reform Act does not alter traditional discovery dynamics and identity of former employees referenced in complaint includes work product content) (Ex. GG), those courts were particularly concerned with policy considerations implicated by disclosure of current and former employees acting as informants and the risk of retaliation. See also Miller v. Ventro Corp., No. C0101287 SBA (EDL), 2004 WL 868202, at *1­*2 (N.D. Cal. Apr. 21, 1004) (adopting the reasoning of Aetna and Theragenics over MTI and Ashworth and holding a list of 22 confidential witnesses does not constitute work product) (Ex. HH). There is no such risk presented here. The individual defendants are no longer employed at ICG and ICG (now a small company) is not a party to this action due to its bankruptcy filing, leaving Defendants and ICG with little means or incentive to retaliate.
30

Fed. R. Civ. P. Rule 26(b)(3).

8053\1\930374.1

14

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 15 of 16

individuals while failing to provide any subject of knowledge for several others. (Ex. U at 8­34.) Although Defendants once worked at ICG, they longer do, and their former ICG executive positions do nothing to help them divine what information each of the 150 individuals might posses. Requiring Defendants to attempt to triangulate which witnesses have information about Plaintiffs' allegations from the list of over 150 people would be unnecessarily time consuming, expensive and inefficient. For this reason, Plaintiffs should be compelled to provide a complete response to this interrogatory. CONCLUSION Plaintiffs are asking this Court to authorize them to represent an ICG investor class, but they refuse to provide discovery calculated to determine whether they meet the class certification prerequisites and narrowly tailored to their claims' surviving allegations. This Court should compel Plaintiffs to discharge their duties and provide the discovery the Federal Rules authorize. Dated: August 10, 2005 Denver, Colorado O'MELVENY & MYERS LLP Bradley J. Butwin Jonathan Rosenberg William J. Sushon 7 Times Square New York, New York 10036 (212) 326-2000 Respectfully submitted, s/ Peter J. Korneffel Peter J. Korneffel Jr. Brownstein Hyatt & Farber, P.C. 410 17th Street, 22nd Floor Denver, CO 80202-4437 T:(303) 223-1100 F:(303) 223-1111 [email protected] Attorneys for Defendants

8053\1\930374.1

15

Case 1:00-cv-01864-REB-BNB

Document 165

Filed 08/10/2005

Page 16 of 16

CERTIFICATE OF SERVICE I hereby certify that on this 10TH day of August, 2005, a true and correct copy of the foregoing MOTION TO COMPEL DISCOVERY was filed electronically with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] [email protected]

and I hereby certify that I have served the document to the following non CM/ECF participants as indicated below: Via Federal Express Next Day and Facsmilie Daniel L. Berger Mark Lebovich Bernstein Litowitz Berger & Grossmann, LLP 1285 Avenue of the Americas New York, NY 10019 Peter A. Pease Sara A. Davis Berman DeValerio Pease Tobacco Burt & Pucillo One Liberty Square Boston, MA 02109

s/ Peter J. Korneffel Peter J. Korneffel, Jr. Brownstein Hyatt & Farber, P.C. 410 17th Street, 22nd Floor Denver, CO 80202-4437 T:(303) 223-1100 F:(303) 223-1111 [email protected] Attorney for Defendants

8053\1\930374.1

16