Harris v. Dimon et al

Filing 88

ORDER signed by Judge Kimberly J. Mueller on 3/3/2015 ORDERING 74 plaintiff's motion, is GRANTED in PART; the parties shall meet and confer and file a revised plan no later than 3/20/2015; the court anticipates completed implementation of such plan, including resolution of any related discovery disputes, within 90 days of its approval; if after a good-faith effort the parties are unable to submit a joint plan, they shall file a joint report, to be filed by 3/20/2015, describing the nature of their disagreement, their efforts to resolve it, and their respective proposed plans.(Reader, L)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10
11
12

In re JPMORGAN CHASE DERIVATIVE
LITIGATION

13

No. 2:13-cv-02414-KJM-EFB

ORDER

14
Responding to the court’s order of October 24, 2014, the plaintiffs have submitted

15
16

a proposed plan of jurisdictional discovery. Mot. Approve Discovery Plan. (Mot.), ECF No. 74.

17

After considering the parties’ briefing, Defs.’ Opp’n Discovery Plan (Opp’n), ECF No. 78, Reply,

18

ECF No. 80, and arguments presented at the hearing,1 the court GRANTS the motion in part as

19

described below.
The court’s previous order dismissed the plaintiffs’ complaint for lack of personal

20
21

jurisdiction. Order Oct. 24, 2014, ECF No. 69. In their motion to dismiss, the defendants

22

challenged personal jurisdiction on grounds that (1) none of the director defendants is a citizen or

23

resident of California; (2) the board of directors meets in New York, not California; (3) the

24

alleged issuance of residential mortgage-backed securities (RMBS) did not occur in California;

25

(4) the RMBS business was not focused on California; and (5) the actions the plaintiffs allege

26
27
28

1

Because the court held a hearing on this motion and heard arguments from all parties, and
granted defendants’ request to be represented by veteran counsel at hearing, it does not consider
the defendants’ proposed Sur-Reply. See ECF No. 83-1.
1

1

were wrongful were not directed at California. Mot. Dismiss 5–8, ECF No. 48. Any

2

jurisdictional discovery must be limited to countering these defenses and otherwise showing the

3

defendants are subject to this court’s jurisdiction.

4

The parties shall meet and confer and exhaust efforts to jointly propose a discovery

5

plan to be submitted to the court no later than March 20, 2015. The court establishes several

6

parameters for any proposed discovery plan:


7

Because plaintiffs have not previously established a colorable basis for general

8

personal jurisdiction, any discovery must be limited to facts directed to

9

establishing specific personal jurisdiction.2

10



Requests that reach beyond the plaintiffs’ RMBS theory are improper at this stage.

11



JPMorgan, the nominal defendant here, may possess information responsive to

12

appropriate inquiries into its directors’ RMBS-related contacts with California. If

13

a request otherwise conforms to the requirements of this order, the defendants may

14

not decline to respond for no other reason than that it is directed to JPMorgan

15

rather than the individual defendants.


16

In its previous order, this court agreed that a plaintiff may satisfy its burden by

17

alleging that “the defendants participated in the harmful plan and that each

18

obtained financial benefits for that participation.” Order Oct. 24, 2014, at 12, ECF

19

No. 69 (citing Openwave Systems Inc. v. Fuld, No. 08-5683, 2009 WL 1622164, at

20

*11–12 (N.D. Cal. Jun. 6, 2009)). In other words, the jurisdictional inquiry tests

21

whether the complaint’s allegations “support the conclusion that each defendant

22

participated in actions expressly directed at California, whether individually or as

23

part of a larger plan or strategy.” Id. at 14. The plaintiffs’ requests may seek

24

production of documents showing the directors either individually or as a part of a

25

larger plan or strategy took actions directed at California that gave rise to the harm

26

alleged in the complaint.

27
28

2

This limitation on jurisdictional discovery does not preclude the possibility of an amended
pleading asserting general jurisdiction, subject to Federal Rule of Civil Procedure 11.
2



1

The parties’ plan may propose the deposition of Anthony Horan, JPMorgan’s

2

Corporate Secretary, who submitted a declaration in support of defendants’ motion

3

to dismiss. See Horan Decl., ECF No. 49.

4

CONCLUSION

5

In summary, the court orders as follows:

6

(1) The plaintiff’s motion, ECF No. 74, is GRANTED IN PART as set forth

7
8
9
10
11

above.
(2) The parties shall meet and confer and file a revised plan no later than March
20, 2015. The court anticipates completed implementation of such plan, including resolution of
any related discovery disputes, within ninety days of its approval.
(3) If after a good-faith effort the parties are unable to submit a joint plan, they

12

shall file a joint report, to be filed by March 20, 2015, describing the nature of their disagreement,

13

their efforts to resolve it, and their respective proposed plans.

14
15

IT IS SO ORDERED.
DATED: March 3, 2015.

16
17
18

UNITED STATES DISTRICT JUDGE

19
20
21
22
23
24
25
26
27
28
3