Opinion
03 Civ. 8264 (RWS).
June 26, 2007
BECKER MEISEL LLC, Attorneys for Movants Sea Carriers Corporation and Per Barre Eisenhower Plaza II, Livingston, NJ, By: MARTIN L. BOROSKO, ESQ., JAMES M. MCCARRICK, ESQ., DANIEL L. PASCOE, ESQ., LAUREN HANNON, ESQ.
KATTEN MUCHIN ROSENMAN LLP, Attorneys for Defendant George M.L. LaBranche, IV, New York, NY, By: E. MICHAEL BRADLEY, ESQ., STEVEN SHIFFMAN, ESQ.
DAVIS POLK WARDWELL, Attorneys for Defendants FleetBoston Financial Corp.; Fleet Specialist, Inc.; Bank of America Corp.; and Quick Reilly, Inc., New York, NY, By: LAWRENCE PORTNOY, ESQ.
DICKSTEIN SHAPIRO LLP, Attorneys for Defendant Performance Specialist Group, LLC, Washington, D.C., By: HOWARD SCHIFFMAN, ESQ., New York, NY, By: ANDREW N. BOURNE, ESQ.
MORGAN, LEWIS BOCKIUS LLP, Attorneys for Defendants Bear Wagner Specialists LLC and Bear Sterns Co., Inc., New York, NY, By: ROBERT M. ROMANO, ESQ., JOHN M. VASSOS, ESQ.
KING SPALDING LLP, Attorneys for Defendants SIG Specialists, Inc.; Susquehanna International Group, LLP; and Susquehanna Financial Group, LLP, New York, NY, By: RICHARD A. CIRILLO, ESQ., PAUL A. STRAUS, ESQ.
WEIL, GOTSHAL MANGES LLP, Attorneys for Defendant LaBranche Co. Inc. and LaBranche Co. LLC, New York, NY, By: IRWIN H. WARREN, ESQ., STEPHEN A. RADIN, ESQ.
WILMER CUTLER PICKERING HALE AND DORR LLP, Attorneys for Defendants Spear, Leeds Kellogg Specialists LLC; Spear, Leeds Kellogg, L.P.; Goldman, Sachs Co.; and the Goldman Sachs Group, Inc., New York, NY, By: ROBERT B. MCCAW, ESQ., ROBERT W. TRENCHARD, ESQ.
SULLIVAN CROMWELL LLP, Attorneys for Defendant Van der Moolen Holdings, NV, New York, NY, By: ROBERT J. GIUFFRA, JR., ESQ., NICOLAS BOURTIN, ESQ.
WOLF, BLOCK, SCHORR, SOLIS-COHEN, Attorneys for Defendants SIG Specialists, Inc. and Susquehanna International Group, LLP, Philadelphia, PA, By: M. NORMAN GOLDBERGER, ESQ., ANDREW C. CURLEY, ESQ.
FRIEDMAN KAPLAN SEILER ADELMAN LLP, Attorneys for Defendant Van de Moolen Specialists USA, LLC, New York, NY, By: KATHERINE L. PRINGLE, ESQ., ROBERT S. LOIGMAN, ESQ.
LOVELL STEWART HALEBIAN LLP, Attorneys for Empire Programs, Inc. and Robert A. Martin, New York, NY, By: IMTIAZ A. SIDDIQUI, ESQ.
LERACH COUGHLIN STOIA GELLER RUDMAN ROBBINS LLP, Attorneys for Lead Plaintiff CalPERS, San Diego, CA, By: WILLIAM J. DOYLE II, ESQ., DAVID W. MITCHELL, ESQ.
MEMORANDUM OPINION
Sea Carriers Corporation ("Sea Carriers") and Per Barre ("Barre"), its president, have moved, presumably pursuant to Rule 45, Fed.R.Civ.P., to quash subpoenas served upon them by the defendants in this action (the "Specialist Firms"). For the reasons set forth below, the motion is granted.
Prior Proceedings
In October 2003, Pirelli Armstrong Tire Corporation Medical Benefits Trust commenced this action, which asserts various claims arising out of alleged "interpositioning" and "trading ahead" by specialists on the floor of the New York Stock Exchange ("NYSE"), by filing a class action complaint entitled Pirelli Armstrong Tire Corp. v. LaBranche Co. Inc., 03 Civ. 3264 (RWS). The proceedings thereafter are outlined in In re NYSE Specialists Securities Litigation, 240 F.R.D. 128, 130-31 (S.D.N.Y. 2007) (the "February 2007 Opinion").
In September 2006, the Specialist Firms served interrogatories and document requests on Sea Carriers, followed by subpoenas pursuant to Rule 45, Fed.R.Civ.P. The requests seek documents relevant to a number of class certification issues. Among other things, the requests seek documents: "(i) detailing the relationship and allocation of profits between Sea Carriers and Empire (which relates to the question of which of the two entities, if any, is an appropriate plaintiff); (ii) detailing the trading strategies employed by Sea Carriers and Empire (which may demonstrate that Sea Carriers' attempt to take advantage of execution patterns makes it and Empire atypical class members who may not have suffered the same alleged injuries as other members and who therefore may be subject to special defenses); and (iii) relating to potential conflicts of interest or other disabling factors." (Specialist Firms' Mem. in Opp'n 8.)
Sea Carriers and Barre sought extensions of time to respond to the subpoenas. On December 11, 2006, Sea Carriers and Barre filed the instant motions to quash, which were heard and marked fully submitted on January 25, 2007.
In addition, by letter dated December 28, 2006, Sea Carriers and Barre requested that discovery requests served on Empire and Martin seeking the same information as the subpoenas served on Sea Carriers and Barre also be quashed. By letter dated January 12, 2007, Empire and Martin requested that certain portions of the subpoenas served on Sea Carriers and Barre pertaining to Empire and/or Martin also be quashed or, in the alternative, that a protective order be granted.
On February 22, 2007, by opinion of that date, Empire was removed as co-lead plaintiff and the motions of Sea Carriers and Martin to replace Empire as co-lead plaintiff were denied. See generally In re NYSE Sec. Litig., 240 F.R.D. 128.
An order was signed on May 17, 2007 (the "May 2007 Order"), granting the Specialist Firms thirty (30) days "to serve discovery concerning any new proposed class representative, to begin running when the Lead Plaintiff notifies the Specialist Firms in writing of the identity of the new proposed class representative."
Discussion
The Court of Appeals for the Second Circuit recently concluded that district courts have "ample discretion to circumscribe the extent of discovery concerning Rule 23 requirements. . . ."In re Initial Public Offerings Sec. Litig., 471 F.3d 24, 41 (2d Cir. 2006); accord Chateau de Ville Prods., Inc. v. Tams-Witmark Music Library, Inc., 586 F.2d 962, 966 (2d Cir. 1978) (finding "the management of discovery is committed to the sound discretion of the trial court" in the context of Rule 23 certification);Hnot v. Willis Group Holdings Ltd., 241 F.R.D. 204, 209 (S.D.N.Y. 2007) (citing In re IPO Sec. Litig., 471 F.3d at 41).
Without addressing when the taking of discovery against absent class members would be appropriate, it is determined that the subpoenas served upon Sea Carriers and Barre are not necessary to the resolution of class certification issues at this time.
In its submission, the Specialist Firms have asserted that the requested documents are relevant to determining whether Empire and Sea Carriers are appropriate lead plaintiffs, whether the owner of the Empire Accounts is a typical class member, whether Sea Carriers and Empire are subject to any unique defenses, and whether Sea Carriers would be an appropriate class representative. (Specialist Firms' Mem. in Opp'n 16-17, 21.)
As per the February 2007 Opinion, however, neither Sea Carriers, Empire, nor Martin is serving as a lead plaintiff in this action. Furthermore, the May 2007 Order permits the Specialist Firms to serve discovery concerning any new proposed class representative within thirty (30) days of written notification by the Lead Plaintiff of the identity of any new proposed class representative.
Conclusion
For the foregoing reasons and in consideration of the February 2007 Opinion and May 2007 Order, the motion to quash the Specialist Firms' subpoenas served upon Sea Carriers and Barre is granted at this time.
It is so ordered.