The Anschutz Corporation v. Merryll Lynch & Co., Inc. et al

Filing 396

ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL (Illston, Susan) (Filed on 4/17/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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THE ANSCHUTZ CORPORATION,

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Plaintiff,

United States District Court
For the Northern District of California

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No. C 09-03780 SI
ORDER GRANTING PLAINTIFF’S
MOTION TO COMPEL

v.
MERRILL LYNCH & CO., et al.,
Defendants.

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Currently before the Court is plaintiff’s motion to compel defendant Fitch, Inc. to respond to

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Interrogatories Nos. 2 & 3. Those interrogatories ask Fitch to identify persons who had involvement

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in rating or monitoring the Credit Linked Notes (CLNs) that underlie the Camber, Pivot and Capstan

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Auction Rate Securities (ARS) at issue, as well as identify the legal entities that issued or monitored the

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ratings of the CLNs. Docket No. 395. Plaintiff also asks the Court to compel Fitch to produce the “deal

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files” for the CLNs.

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Fitch objects to producing the requested information, arguing the information is irrelevant

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because the ratings given to the ARS securities were based on the “pre-existing” ratings assigned to the

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collateralizing CLNs, which ratings were themselves based on ratings for other corporate bonds, some

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secured through credit default swaps. Fitch suggests that because the ratings process for the CLNs or

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other underlying securities was not considered in rating the ARS securities at issue – because Fitch just

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assumed the pre-existing ratings for the underlying securities and passed them on as ratings for the

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CLNs and then for the ARS – the identity of individuals and entities involved in assigning or monitoring

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the ratings of the CLNs, as well as the related documents, are all irrelevant. The Court disagrees. The

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heart of the claim against Fitch is what Fitch knew or should have known about the credit ratings

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assigned to the ARS. The credit ratings assigned to the CLNs, even if they were simply pass-ons from

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other products, are directly relevant to that question.

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Fitch also argues that plaintiff’s request for production of the deal files is untimely because the

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parties’ agreed-to deadline of April 3, 2012, for “substantial completion of document productions,”

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(Docket No. 363) has passed. However, there is no evidence that the number of documents at issue is

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so large that it would undermine the parties’ agreement that “substantial document production” be

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complete as of early April. Moreover, the fact discovery cutoff in this case is not until July 9, 2012.

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The Court, therefore, rejects Fitch’s timeliness argument.
Plaintiff’s motion to compel is GRANTED. Fitch shall produce the information required by

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United States District Court
For the Northern District of California

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Interrogatories Nos. 2-3 and the underlying deal files for the relevant CLNs within ten (10) days of the

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date of this Order.

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IT IS SO ORDERED.

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Dated: April 17, 2012
SUSAN ILLSTON
United States District Judge

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