Stender et al v. Archstone-Smith Operating Trust
Filing
258
ORDER denying 240 Plaintiffs' Motion for Limited Relief from May 9, 2013 Order, as set forth in the Order. Each party shall pay their own attorney fees and costs for this motion. by Magistrate Judge Michael J. Watanabe on 12/12/2013.(mjwcd)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 07-cv-02503-WJM-MJW
STEVEN A. STENDER, HAROLD SILVER and
INFINITY CLARK STREET OPERATING, L.L.C., on behalf of themselves and all others
similarly situated,
Plaintiffs,
v.
ARCHSTONE-SMITH OPERATING TRUST;
ARCHSTONE-SMITH TRUST;
ERNEST A. GERARDI, JR.;
RUTH ANN M. GILLIS;
NED S. HOLMES;
ROBERT P. KOGOD;
JAMES H. POLK, III;
JOHN C. SCHWEITZER;
R. SCOT SELLERS;
ROBERT H. SMITH;
STEPHEN R. DEMERITT;
CHARLES MUELLER, JR.;
CAROLINE BROWER;
MARK SCHUMACHER;
ALFRED G. NEELY;
TISHMAN SPEYER DEVELOPMENT CORPORATION;
RIVER HOLDING, LP; RIVER ACQUISITION (MD), LP;
RIVER TRUST ACQUISITION (MD), LLC; and
ARCHSTONE MULTIFAMILY SERIES I TRUST;
Defendants.
ORDER REGARDING
PLAINTIFFS’ MOTION FOR LIMITED RELIEF FROM MAY 9, 2013 SCHEDULING
ORDER (DOCKET NO. 240)
Entered by U.S. Magistrate Judge Michael J. Watanabe
This matter is before the court on Plaintiffs’ Motion for Limited Relief from May 9,
2013 Scheduling Order (docket no. 240). The court has reviewed the subject motion
(docket no. 240), the response (docket no. 255) and the reply (docket no. 257). In
addition, the court has taken judicial notice of the court’s file and has considered
applicable Federal Rules of Civil Procedure and case law. The court now being fully
informed makes the following findings of fact, conclusions of law and order
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The court finds:
1.
That I have jurisdiction over the subject matter and over the parties
to this lawsuit;
2.
That venue is proper in the state and District of Colorado;
3.
That each party has been given a fair and adequate opportunity to
be heard;
4.
That I incorporate by reference all of my findings as outlined in my
Order Regarding Scheduling Procedure and Plaintiffs’ Motion
Pursuant to D.C.COLO.LCivR 7.2 (docket no. 217);
5.
That on November 8, 2013, Judge Martinez confirmed the
Arbitration Award. See docket no. 243;
6.
That in the subject motion (docket no. 240), Plaintiffs seek limited
relief from stay and request that this court allow Plaintiffs to conduct
the following limited discovery:
a.
The deposition of Ernest Gerardi, a Director Defendant who,
based on his involvement in another proceeding, Plaintiffs
understand is elderly and in poor health;
b.
Subpoenas on third parties Lehman Brothers Holdings, Inc.,
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AvalonBay Communities, Inc., ERP Operating Limited
Partnership and Equity Residential to Ensure the
preservation of documents relating not only to the 2007
Transaction, but also the sale of Archstone in February
2013; and,
c.
Preservation subpoenas on non-party advisors and lenders
to the participants in both the 2007 Transaction and the 2013
Asset Sale, including Hogan & Hartson (now Hogan Lovells),
Ernst & Young, Mayer Brown, LLP, Bank of America
Securities, LLC, Goodwin Procter, LLP, Morrison & Foerster,
LLP, Weil Gotshal & Manges, LLP, Morgan Stanley, Morgan
Stanley Senior Funding, Inc., and Goldman Sachs Lending
Partners, LLC.;
7.
That in support of the subject motion (docket no. 240), Plaintiffs
make the following arguments. First, Plaintiffs argue that they are
seeking “preservation of evidence” for trial. Second, that such
limited preservation discovery sought, as outlined above in
paragraph 6 a., b., and c., does not conflict with the rationale
behind the Court’s Stay Order entered in February 2008. Third,
that Plaintiffs no longer intend to pursue their claims under the
federal securities laws and therefore any reason to stay discovery
under the Private Securities Litigation Reform Act of 1995, 15
U.S.C. § 78u-4(b)(3)(B) (2006) is moot. Fourth, that Plaintiffs make
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a generic argument that Ernest Gerardi, a Director Defendant, is
elderly and in poor health and suggest that Mr. Gerardi may not be
available as a witness in the future. Lastly, Plaintiffs argue that
they have the burden of proof at trial, and that they would be
prejudiced if there is dissipation of evidence because they were
unable to preserve the discovery as outlined in paragraph 6 a., b.,
and c. above and thus due process, equity and the right to fair trial
warrant an Order from this court allowing the limited discovery that
Plaintiffs are seeking;
8.
That Defendants argue that this court should deny the subject
motion (docket no. 241) for the following reasons. First, that the
subject motion (docket no. 240) is moot since Judge Martinez
confirmed the Arbitration Award on November 8, 2013. See docket
no. 243. Second, that there is no basis to lift the stay since
Plaintiffs have failed to demonstrate that Mr. Gerardi suffers from
some medical, physical or mental disease or defect that will, in the
near future, cause him to be incompetent as a witness or that Mr.
Gerardi’s death is imminent and thus will not be available at a later
date for deposition and/or trial. Third, that the court ordered
February 2008 stay was affirmed by Magistrate Judge Watanabe.
See Magistrate Judge Watanabe’s “Order Regarding Scheduling
Procedure and Plaintiffs’ Motion Pursuant to D.C.COLO.CivR 7.2"
(docket no. 217); and
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9.
That after carefully reviewing the legal arguments presented
concerning the subject motion (docket no. 241) and reviewing the
record of court proceedings, I conclude that Plaintiffs have failed to
demonstrate any “particularized need” at this time for this court to
lift the stay on discovery. Further, I conclude that Plaintiffs will not
suffer any undue prejudice noting that Plaintiffs have not produced
any reliable and trustworthy medical or psychological evidence
concerning Mr. Gerardi to show that he is likely be unavailable as a
competent witness in the near future. In addition, Plaintiffs have
failed to demonstrate that the large corporate entities and large
national law firms, as outlined in paragraph 6 b. and c above, will
not have the records/documents that Plaintiffs seek in the future.
Moreover, I find that my Order Regarding Scheduling Procedure
and Plaintiffs’ Motion Pursuant to D.C.COLO.LCivR 7.2 (docket
no.217) outlines, in detail, the appropriate course of action for this
case and is consistent with Fed. R. Civ. P. 1 to secure the just,
speedy, and inexpensive determination of every action and
proceeding and further consistent with the goals of the Civil Justice
Reform Act. Accordingly, for the reasons stated and pursuant to
Ben Ezra, Weinstein, & Co. v. America Online Inc., 206 F.3d 980,
987 (10th Cir. 2000); LaFleur v.Teen Help, 342 F.3d 1145, 1152-53
(10th Cir. 2003) (affirming stay of discovery pending resolution of
motion to dismiss); and S.E.C. v. Nacchio, 2005 WL 1799372 (D.
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Colo. July 28, 2005) the subject motion (docket no. 240) should be
denied.
ORDER
WHEREFORE, based upon these findings of fact and conclusions of law this
court ORDERS:
1.
That Plaintiffs’ Motion for Limited Relief from May 9, 2013 Order
(docket no. 240) is DENIED; and
2.
That each party shall pay their own attorney fees and costs for this
motion.
Done this 12th day of December 2013.
BY THE COURT
S/ Michael J. Watanabe
Michael J. Watanabe
U.S. Magistrate Judge
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