Dobina v. Weatherford International Ltd. et al
Filing
198
MEMORANDUM AND ORDER granting in part 171 Motion for Discovery: For the reasons discussed above, the motion for leave to increase the deposition limit pursuant to Rule 30(a) of the Federal Rules of Civil Procedure (Docket no. 171) is granted in part. The plaintiffs may conduct sixteen additional non-expert depositions. (Signed by Magistrate Judge James C. Francis on 10/24/2013) Copies Mailed By Chambers. (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE WEATHERFORD INTERNATIONAL
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SECURITIES LITIGATION
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JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
11 Civ. 1646 (LAK) (JCF)
MEMORANDUM
AND ORDER
The plaintiffs bring this putative class action on behalf of
purchasers of securities issued by Weatherford International Ltd.
(“Weatherford”), alleging that Weatherford and certain of its
officers made false and misleading statements in violation of the
federal securities laws.
Pursuant to Rule 30(a) of the Federal
Rules of Civil Procedure, the plaintiffs now move for an order
permitting them to conduct thirty non-expert depositions.
For the
following reasons, the motion is granted in part.
Background
A complete discussion of the factual background of this
litigation is set forth in Dobina v. Weatherford International,
Ltd., 909 F. Supp. 2d 228 (S.D.N.Y. 2012).
Briefly, on March 1,
2011, Weatherford announced that it would restate its earnings for
the
period
from
2007
until
the
third
quarter
of
2010
after
identifying “a material weakness in internal control over financial
1
reporting for income taxes.”
(Amended Complaint, ¶¶ 134 (quoting
Weatherford Form 8-K), 139).
The plaintiffs, who bought stock in
Weatherford between April 25, 2007, and March 1, 2011, brought suit
against Weatherford and certain of its officers under Section 10(b)
and 20(a) of the Securities Exchange Act of 1932, 15 U.S.C. §§
78j(b), 78t, and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
They
alleged
that
the
defendants
knowingly
made
false
and
misleading statements and omissions concerning (1) the Company’s
tax accounting and (2) its maintenance of internal controls over
its financial reporting. The former claims were dismissed, leaving
only the matter of false statements “relating to the quality of
Weatherford’s internal controls.” Dobina, F. Supp. 2d at 244, 24748, 252.
When discovery commenced in January 2013, the plaintiffs
sought consent from the defendants to conduct twenty-five nonexpert depositions in connection with their remaining claims.
(Letter of Ramzi Abadou dated Jan. 14, 2013, attached as Exh. 4 to
Defendants’ Memorandum in Opposition to Plaintiffs’ Motion for
Leave to Increase the Deposition Limit (“Def. Memo.”)).
The
defendants
the
proposed
fifteen
depositions,
contingent
on
plaintiffs agreeing not to seek leave of the court to conduct more.
(Letter of Kevin H. Metz dated Jan. 17, 2013, attached as Exh. 3 to
Def.
Memo.).
The
parties
subsequently
2
failed
to
reach
an
agreement.
(Def. Memo. Exhs. 5-12).
On September 23, 2013, the plaintiffs submitted a letter
motion requesting leave to conduct a total of thirty non-expert
depositions,
providing
a
list
of
proposed
deponents
information they anticipated obtaining from each.
and
the
(Plaintiffs’
Motion for Leave to Increase the Deposition Limit Pursuant to Fed.
R. Civ. P. 30(a) (“Motion”)). The plaintiffs have already deposed
representatives from Weatherford and its auditor, Ernst & Young.
(Def. Memo., App. A at 1-2; Motion, Exh. A at 5).
In response, the
defendants concede that sixteen of the proposed deponents may have
relevant information and should be available for deposition. (Def.
Memo., App. A).
The defendants object to the remaining twelve
individuals from the plaintiffs’ list, arguing that some do not
possess information relevant to the issues remaining in this case,
that others may possess information but are duplicative of other
deponents, and that allowing these depositions would be unduly
burdensome. (Def. Memo. at 1, App. A).
Discussion
Under Rule 30(a) of the Federal Rules of Civil Procedure, any
party who wishes to conduct more than ten depositions without
stipulation by the opposing party must seek leave of the court.
Fed. R. Civ. P. 30(a)(2)(A)(i).
The court must grant a request to
exceed ten depositions unless the additional depositions would be
3
unreasonably cumulative or duplicative, the requesting party had a
prior opportunity in discovery to obtain the information sought, or
the burden or expense of additional depositions would outweigh any
likely benefit.
Fed. R. Civ. P. 26(b)(2)(C); Raniola v. Bratton,
243 F. 3d 610, 628 (2d Cir. 2001); Coach, Inc. V. Gata Corp., 10 CV
141, 2011 WL 198015, at *1 (D.N.H. Jan. 20, 2011).
The plaintiffs have adequately demonstrated that their request
for additional depositions is in good faith and is reasonably
calculated to lead to the discovery of admissible evidence.
(Motion, Exh. A); see also San Francisco Health Plan v. McKesson
Corp., 264 F.R.D. 20, 21 (D. Mass. 2010) (moving party must show
need for additional depositions, but “counsel’s judgment about [how
many
depositions]
deference”).
it
needed
is
entitled
to
a
good
deal
of
However, the request must also be reasonable under
the factors set forth in Rule 26(b) of the Federal Rules of Civil
Procedure.
First,
several
unnecessarily
of
cumulative
the
or
proposed
deponents
duplicative.
Fed.
appear
R.
to
be
Civ.
P.
26(b)(2)(C)(i). For example, although they now propose depositions
of the Regional Tax Managers for the Middle East, Europe, Canada,
and Latin America regions (Motion, Exh. A at 3, 6, 8, 11), the
plaintiffs
previously
suggested
that
these
individuals
could
potentially serve as “alternatives” to one another for the same
4
“proposed deposition slot.”
(Letter of Ramzi Abadou dated July 9,
2013, attached as Exh. 7 to Def. Memo., at App. A, 11-12).
The
plaintiffs also seek to depose two Ernst & Young auditors (having
already deposed that company’s representative), two analysts, and
two individuals that the defendants allege work on the same IRSrelated issues.
(Motion, App. A at 1, 5, 6, 10, 15; Def. Memo. at
4).
The plaintiffs argue that each proposed deponent has relevant
evidence that “will not be captured by deposing other personnel.”
(Motion at 3-4).
information,
individual.”
a
But even if “a witness might have discoverable
party
is
not
always
entitled
to
depose
that
Commodity Futures Trading Commission v. Commodity
Investment Group, Inc., No. 05 Civ. 5741, 2005 WL 3030816, at *1
(S.D.N.Y. Nov. 10, 2005); see also Atkinson v. Goord, Nos. 01 Civ.
0761, 03 Civ. 7759, 2009 WL 890682, at *3 (S.D.N.Y. April 2, 2009)
(“[If] a party [were] entitled to depose all the witnesses to a
relevant event . . . Rule 30(a)(2)(A) would quickly become a dead
letter.”); Sigala v. Spikouris, No. 00 CV 983, 2002 WL 721078, at
*3 (E.D.N.Y. March 7, 2002).
The plaintiffs have not demonstrated
that each and every one of the proposed deponents would provide
sufficiently unique information, not cumulative or duplicative of
others, to justify the additional burden on the defendants of
defending thirty depositions.
5
The second factor under Rule 26(b)(2)(C), on the other hand,
favors
the
plaintiffs.
The
plaintiffs
have
not
opportunity” to discover the information they seek.
P. 26(b)(2)(C)(ii).
had
“ample
Fed. R. Civ.
The proposed deponents who may have relevant,
non-cumulative information have not yet been deposed, and the
information they possess may not be available through other forms
of
discovery.
Furthermore,
some
of
them
are
outside
the
jurisdiction of this court and are unlikely to appear at trial;
without oral depositions, the plaintiffs may never have access to
these individuals or the evidence they possess. (Motion at 3, Exh.
A (noting that thirteen of the thirty individuals are former
Weatherford employees who do not reside in New York)). The lack of
prior opportunity or alternate means to discover the information
sought weighs in favor of granting leave to conduct more than ten
depositions.
Finally, the burden of the proposed depositions must be
weighed against their benefit, considering the nature and needs of
the case.
Fed. R. Civ. P. 26(b)(2)(C)(iii).
The plaintiffs
contend that the large scale of the case -- involving multiple
defendants, an amount in controversy of “nearly $1 billion in tax
accounting
misstatements,”
and
over
one
hundred
Weatherford
employees in the relevant tax and auditing departments -- supports
broad discovery, and they cite other similarly large cases where
6
more than ten depositions were permitted.
(Motion at 1-2).
They
also note that the defendants’ own documents and filings have
“identified numerous witnesses relevant to their defenses and/or
directly knowledgeable about the claims in this case.”
3).
(Motion at
The defendants do not disagree that more than ten depositions
are warranted, but challenge specific individuals proposed by the
plaintiffs as not relevant to the remaining claim.
4, App. A).
(Def. Memo. at
They also argue that the short amount of time
remaining in the non-expert fact discovery period, which is now
scheduled to conclude by January 24, 2014, will make it difficult
to conduct the numerous depositions yet to be noticed or held.
(Def. Memo. at 5).
Balancing these factors, the plaintiffs are entitled to some,
but
not
all,
of
the
thirty
depositions
requested.
As
the
defendants themselves have conceded the relevance of eighteen
deponents (including the two that have already been conducted), the
plaintiffs are granted leave to conduct sixteen additional nonexpert
depositions.
This
is
fewer
than
requested
by
the
plaintiffs, but accounts for the potential burden and redundancy of
granting all thirty proposed depositions at this time.
Should the
plaintiffs require further depositions after these sixteen are
completed, they may seek leave to do so.
Trading Commission, 2005 WL 3030816 at *1.
7
See Commodity Futures
The plaintiffs are not bound by the list of proposed deponents
submitted with their motion.
However, counsel should “think long
and hard about who they want to depose and [] depose only those who
are really important,”
San Francisco Health Plan, 264 F.R.D. at
21, keeping in mind that I will examine any future requests for
additional depositions with increased scrutiny.
Attempts to abuse
Rule 30(a) and the flexibility provided in this order by, for
example, deposing all of the twelve disputed deponents but none of
the
named
decision.
defendants,
will
factor
heavily
in
any
subsequent
See, e.g., AIG Centennial Insurance Co. v. O’Neill, No.
09-60551-Civ., 2010 WL 4116555, at *16 (S.D. Fla. Oct. 18, 2010).
The defendants, meanwhile, should bear in mind the potential
impact of their arguments for limiting depositions.
They have
asserted that twelve of the thirty proposed deponents requested by
the plaintiffs are either duplicative or minimally relevant. (Def.
Memo., App. A).
They too may be bound by such assertions, should
they call any of these individuals as witnesses at trial.
See,
e.g., Atkinson, 2009 WL 890682 at *3 (“[D]efendants [are precluded]
from offering testimony from these [non-deposed] witnesses that
materially differs from the testimony of the defense witnesses who
have already been deposed.”).
Finally, the hard deadline for non-expert fact discovery is
now January 24, 2014, and further extensions are unlikely to be
8
granted.
(Order dated Oct. 3, 2013).
As noted by Judge Kaplan,
"[e]ach side bears some responsibility for the slow pace of this
matter.
1/
(Order dated Oct. 3, 2013).
for this state of affairs
Instead of assigning blame
(Letter of Peter A. Wald dated Oct. 7,
2013; Letter of Jennifer Joost dated Oct.
should
work
diligently
to
complete
these
8,
2013),
the parties
depositions
and
the
remainder of fact discovery in a timely and civil manner.
Conclusion
For the reasons discussed above,
the motion for
leave to
increase the deposition limit pursuant to Rule 30(a) of the Federal
Rules of Civil Procedure (Docket no. 171) is granted in part.
The
plaintiffs may conduct sixteen additional non-expert depositions.
SO ORDERED.
C'~J7'
~
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
Dated: New York, New York
October 24, 2013
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Copies mailed this date to:
Jala Amsellen, Esq.
Lionel Z. Glancy, Esq.
Michael Goldberg, Esq.
Robert V. Prongay, Esq.
Glancy Binkow & Goldberg LLP
1801 Avenue of the Stars, suite 311
Los Angeles, CA 90067
Howard G. Smith, Esq.
Smith & Smith
3070 Bristol Pike, Suite 112
Bensalem, PA 19020
Curtis V. Trinko, Esq.
Law Offices of Curtis V. Trinko, LLP
16 west 46th Street, Seventh Floor
New York, New York 10036
Eli R. Greenstein, Esq.
Erik D. Peterson, Esq.
Ramzi Abadou, Esq.
Stacey M. Kaplan, Esq.
Jennifer L. Joost, Esq.
Kessler Topaz Meltzer & Check, LLP
One Sansome St., Suite 1850
San Francisco, CA 94104
Darren J. Check, Esq.
Kessler Topaz Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
David R. Scott, Esq.
Scott & Scott LLC
156 South Main Street
P.O. Box 192
Colchester, Ct 06415
Mary K. Blasy, Esq.
Scott & Scott LLC
707 Broadway, Suite 1000
San Diego, CA 92101
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Darren J. Robbins, Esq.
Robbins Geller Rudman & Dowd LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
David A. Rosenfeld, Esq.
Evan J. Kaufman, Esq.
Robbins Geller Rudman & Dowd, LLP
58 South Service Road, Suite 200
Melville, New York 11747
Robert J. Malionek, Esq.
Sarah A. Greenfield, Esq.
Latham & Watkins LLP
885 Third Avenue, Suite 1000
New York, New York 10022
Kevin H. Metz, Esq
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
washington, DC 20004
Peter A. Wald, Esq.
Latham & Watkins LLP
505 Montgomery Street, Suite 2000
San Francisco, CA 94111
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