Fort Worth Employees' Retirement Fund v. JP Morgan Chase & Co. et al

Filing 202

MEMORANDUM AND ORDER: For the reasons discussed, the defendants' application is granted in part and denied in part as set forth above. (Signed by Magistrate Judge James C. Francis on 5/7/2013) Copies Mailed By Chambers. (lmb)

(ECF)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

09 Civ. 3701 (JPO)

FORT WORTH EMPLOYEES' RETIREMENT
FUND, ET AL. ,

(JCF)

MEMORANDUM

AND ORDER

Plaintiffs,
against ­

USDS SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#: ______.________
DATE FILED:.Y .. ;) , . / ;$

J.P. MORGAN CHASE & CO., ET AL.,
Defendants.
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

This is a securities action brought on behalf of a class of
purchasers of mortgage -backed securities
Acceptance

Corporation

I.

The

issued by J. P.

defendants

disclosures from the lead plaintiffs.

now

seek

Morgan
certain

For the reasons that follow,

the defendants' application is granted in part and denied in part.
Discussion
The factual and procedural background of this action is fully
set forth in prior opinions.

See,

e.g.,

Fort Worth Employees'

Retirement Fund v. J.P. Morgan Chase & Co.,

862 F. Supp. 2d 322

(S.D.N.Y. 2012).
A.

Identification of Confidential Witnesses

The defendants seek names,
confidential
complaint.

informants

addresses,

referenced

(Letter of Dorothy J.
1

in

15

and employers of the
paragraphs

of

Spenner dated March 25,

the
2013

(ftSpenner Letter")
grounds

that

doctrine.

the

The lead plaintiffs have objected on

at 1).

information is protected by the

(Letter of

Susan Goss

(ftTaylor Letter") at 1).
duty by disclosing a

Taylor

dated March

of

44

individuals

28,

2013

filled their

They argue that they have

list

work product

believed to have

relevant information, which includes the confidential witnesses.
They contend that it would not be burdensome

(Taylor Letter at 2)

for the defendants to determine which of these persons are the
confidential witnesses referenced in the complaint.
While there is some disagreement within this district as to
whether the identities of confidential informants referenced in the
complaint

are

privileged,

recently,

is that

the

majority

view,

"the names of the persons

especially

more

identified in the

[complaint] as confidential informants are not entitled to any work
product protection."

Plumbers & Pipefitters Local Union No. 630

Pension-Annuity Trust Fund v. Arbitron, Inc., 278 F.R.D. 335, 340
(S.D.N.Y.

2011) i

accord

In

re

Bear

Stearns

Cos.

Securities,

Derivative, & ERISA Litigation, No. 08 MDL 1963, 2012 WL 259326, at
*2

(S.D.N.Y.

Jan.

27,

2012);

In re America International Group,

Inc. 2008 Securities Litigation, No. 08 Civ. 4772, 2012 WL 1134142,
at *4 (S.D.N.Y. March 6, 2012); but see In re SLM Corp. Securities
Litigation, No. 08 Civ. 1029, 2011 WL 611854, at *1 (S.D.N.Y. Feb.
15, 2011); In re Veeco Instruments, Inc. Securities Litigation, No.
2

05

MD

1695,

2007

WL

274800,

at

*1

(S.D.N.Y.

Jan.

29,

2007)

(identity of witnesses interviewed by counsel and "relied upon in
the preparation of the complaint . . . is protected from disclosure
Courts have also required more

by the work-product privilege").

than a mere list of potential witnesses in initial disclosures.
See Arbitron, 278 F.R.D. at 340; Memorandum Endorsement dated Oct.
14, 2010, In re Dynex Capital, Inc. Securities Litigation, No. 05
Civ.

1897

(S.D.N.Y.

Oct.

14,

2010),

ECF No.

92

(confidential

informants "should [be] particularly named by plaintiff, and not
merely identified as part of a longer list of witnesses") .
Furthermore,

leaving

the

defendants

to

contact

all

44

individuals to identify the confidential informants would be costly
and time-consuming where the lead plaintiffs can easily provide the
same information.
disclosure

of

the

Accordingly,
identities

the defendants'
of

the

application for

confidential

informants

referenced in the complaint is granted. 1
The lead plaintiffs have not identified any specific concerns
that

the

confidential

retaliation

in a

witnesses

current

or

may

future

have,

job.

such
To

the

as

risk

extent

of
such

1 The defendants also seek response
to Interrogatory NO.3.
To the extent there are individuals who are not named in the
response to Interrogatory No. 2 who may have personal knowledge
concerning the originators' mortgage origination practices, their
identities should be disclosed.

3

anxieties

lead

exist,

counsel

plaintiffs'

may

submit

an

affidavit setting forth particularized facts that would
substantiate these fears.

See Arbitron,

278 F.R.D. at 344.

The

lead plaintiffs shall have two weeks from the date of this order to
submit any such affidavit, and the Court will determine whether the
facts justify maintaining any witness'

anonymity or taking some

other measures to protect that witness' interests.
B.

Retainer and Monitoring Agreements

The

defendants

also

seek

documents

concerning

the

lead

plaintiffs' retention of counsel in this action and all agreements
with counsel concerning the lead plaintiffs' residential mortgage­
backed

securities

investments.

(\\RMBS")

investments

(Spenner Letter at 3-4).

or monitoring

of

those

Although the fact of a

retainer, the identity of the client, and the fee information are
not privileged, see Newmarkets Partners, LLC v. Sal. Oppenheim Jr.
258
seeking

disclosure

F.R.D.

95,

101

must

make

a

(S.D.N.Y.
showing

2009),
of

the

information's relevance to its claims or defenses,
Conair Corp., No.

94 Civ. 5693,

the party
requested

see Gaus v.

2000 WL 358387, at *3

(S.D.N.Y.

April 7, 2000).
The

defendants

argue

that

the

dates

of

the

agreements'

execution may be relevant to their statute of limitations defense.
When the lead plaintiffs retained counsel may indeed be pertinent
4

to identifying the time when the lead plaintiffs became aware of
facts

giving

rise

to potential

claims.

See!

e . g.,

Kramas

r. 1982).

Security Gas & Oil Inc., 672 F.2d 766, 771 (9th

v.

Thus,

the date each retention agreement was executed "appears reasonably
calculated to lead to the discovery of admissible evidence."

Fed.

R. Civ. P. 26(b).
The defendants

so argue that the arrangement between the

lead plaintiffs and their lawyers may be relevant to the fitness of
lead plaintiffs or their counsel to represent the class.
they have provided no
concerns.

non speculative basis

for

However,

raising such

See, e.g., Piazza v. First America Title Insurance Co.,

No. 3:06CV756, 2007 WL 4287469, at *1 (D. Conn. Dec. 5, 2007)

(fee

agreement is irrelevant to class certification when there was no
basis for defendants' speculation regarding confl

ts of interest) .

Furthermore, the defendants will have the opportunity to question
the lead plaintiffs at deposition on their adequacy to represent
the class without the necessity of disclosure of the retainer and
monitoring agreements.

Accordingly,

the defendants'

request for

documents concerning the lead plaintiffs' retention of counsel is
denied except for the dates each agreement was executed.
C.

Remaining Issues

The part

have agreed that the remaining issues need not be

resolved at this point.

The lead plaintiffs have agreed to search
5

e-mails of fund managers who communicated with lead plaintiffs'
outside managers.

The parties have also agreed that

the

lead

plaintiffs will produce statements that include information about
purchases of RMBS other than the certificates at issue or about the
general RMBS market; however, the lead plaintiffs will not search
specifical

for this information.

Conclusion
For the

reasons discussed,

the defendants'

application is

granted in part and denied in part as set forth above.
SO ORDERED.

C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

Dated: New York, New York
May 7, 2013
Copies mailed this date to:

Arthur C. Leahy, Esq.

Ivy T. Ngo, Esq.

Jonah H. Goldstein, Esq.

Matthew I.Alpert, Esq.

Nathan R. Lindell, Esq.

Scott H. Saham, Esq.

Susan G. Taylor, Esq.

Thomas E. Egler, Esq.

L. Dana Martindale, Esq.
Robbins Geller Rudman & Dowd LLP
655 West Broadway
Suite 1900
San Diego, CA 92101

6

Carolina C. Torres, Esq.

David A. Rosenfeld, Esq.

Samuel H. Rudman, Esq.

Robbins Geller Rudman & Dowd LLP

58 South Service Rd.

Suite 200

Melville, NY 11747

Joseph P. Guglielmo, Esq.

Thomas L. Laughlin, IV, Esq.

Scott + Scott, L.L.P.

405 Lexington Ave.

40th Floor

New York, NY 10174

Geoffrey M. Johnson, Esq.

Scott + Scott, L.L.P.

12434 Cedar Rd., Suite 12

Cleveland Heights, OH 44106

Alfred R. Pietrzak, Esq.

Dorothy J. Spenner, Esq.

Owen H. Smith, Esq.

David L. Breau, Esq.

Sidley Austin LLP

787 Seventh Ave.

New York, NY 10019

Alison L. MacGregor, Esq.

Kelley Drye & Warren, LLP

101 Park Ave.

New York, NY 10178

Darrell S. Cafasso, Esq.

Sullivan & Cromwell, LLP

125 Broad St.

New York, NY 10004

Robert A. Sacks. Esq.

Sullivan & Cromwell, LLP

1888 Century Park East, Suite 2100

Los Angeles,

CA 90067

7

Richard F. Lubarsky, Esq.
Levi Lubarsky & Feigenbaum LLP
1185 Avenue of the Americas
17th Floor
New York, NY 10036

8