UNITED STATES DISTRICT COURT SOUTHERN DISTRICT … [Dkt. 0488] Rule 26(f... · UNITED STATES...

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

In re LEHMAN BROTHERS SECURITIES AND ERISA LITIGATION This Document Applies To:

In re Lehman Brothers Equity/Debt Securities Litigation, 08-CV-5523-LAK

Case No. 09-MD-2017 (LAK) ECF CASE

JOINT RULE 26(f) REPORT AND DISCOVERY PLAN

Case 1:09-md-02017-LAK Document 488 Filed 11/01/11 of 20

1

Lead Plaintiffs and the Non-Settling Defendants (together, the “Parties”) jointly submit

this Rule 26(f) report (“Report”) in advance of the November 8, 2011 scheduling conference.1 In

accordance with Fed. R. Civ. P. 26(f), counsel for the Parties in In re Lehman Brothers

Equity/Debt Securities Litigation, Case No. 08-CV-5523-LAK (“Equity/Debt Action”), met-and-

conferred in person on September 7, 2011, and continued conferring telephonically and by

electronic mail thereafter. While the Parties agree on most points for a proposed case

management plan, defendant UBS Financial Services, Inc. (“UBSFS”) disagrees with certain

components of the pretrial schedule attached at Tab A (Lead Plaintiffs’ Proposed Case

Management Order) and proposes the pretrial schedule attached at Tab B (UBSFS’ Proposed

Case Management Order).2 Defendant Ernst & Young LLP does not have any objection to Lead

Plaintiffs’ proposed pretrial schedule. Defendants Cabrera Capital Markets, LLC, HVB Capital

Markets, Inc., Incapital LLC and Williams Capital Group, L.P. take no position on the proposed

pretrial schedules.

I. LEAD PLAINTIFFS’ STATEMENT REGARDING STATUS OF THE SETTLEMENTS

By letter dated August 25, 2011, Lead Plaintiffs notified the Court that they had reached

an agreement in principle to settle claims against the Individual Defendants for $90 million.3

1 “Lead Plaintiffs” refers to Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers’ Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund. “Non-Settling Defendants” refers to Ernst & Young LLP (“EY”); Cabrera Capital Markets; LLC; HVB Capital Markets, Inc.; Incapital LLC; UBS Financial Services, Inc.; and Williams Capital Group, L.P. 2 Attached at Tab C is a redline reflecting the differences between Tab A and Tab B. 3 “Individual Defendants” refers to Richard S. Fuld, Jr., Christopher M. O’Meara, Joseph M. Gregory, Erin Callan, Ian Lowitt, Michael L. Ainslie, John F. Akers, Roger S. Berlind, Thomas H. Cruikshank, Marsha Johnson Evans, Sir Christopher Gent, Roland A. Hernandez, Henry Kaufman and John D. Macomber.


2

Lead Plaintiffs and the Individual Defendants entered a written stipulation of settlement on

October 14, 2011. On October 19, 2011, Judge James M. Peck of the United States Bankruptcy

Court for the Southern District of New York allowed payment under a director and officer

insurance policy to fund the settlement, and by November 2, 2011, the $90 million is to be paid

into an interest-bearing escrow account.

On October 3, 2011, Lead Plaintiffs notified the Court that they had reached a separate

agreement in principle to settle claims against certain Underwriter Defendants for $417 million,

and had executed a binding term sheet.4 The term sheet requires that the settling parties enter

and file a stipulation of settlement, and that Lead Plaintiffs move the Court for preliminary

approval by January 2, 2012. Subsequent to settling with the Settling Underwriter Defendants,

Lead Plaintiffs reached agreements in principle to settle claims against Charles Schwab & Co.,

Inc., M.R. Beal & Company, Muriel Siebert & Co., Inc. and Seibert Capital Markets. Lead

4 The “Settling Underwriter Defendants” are A.G. Edwards & Sons, Inc.; ABN Amro Inc.; ANZ Securities, Inc.; Banc of America Securities LLC; BBVA Securities Inc.; BNP Paribas S.A.; BNY Mellon Capital Markets, LLC; Caja de Ahorros y Monte de Piedad de Madrid; Calyon Securities (USA) Inc. (n/k/a Crédit Agricole Corporate and Investment Bank); CIBC World Markets Corp.; Citigroup Global Markets Inc.; Commerzbank Capital Markets Corp.; Daiwa Capital Markets Europe Limited (f/k/a Daiwa Securities SMBC Europe Limited); DnB NOR Markets Inc. (the trade name of which is DnB NOR Markets); DZ Financial Markets LLC; Edward D. Jones & Co., L.P.; Fidelity Capital Markets Services (a division of National Financial Services LLC); Fortis Securities LLC; BMO Capital Markets Corp. (f/k/a Harris Nesbitt Corp.); HSBC Securities (USA) Inc.; ING Financial Markets LLC; Loop Capital Markets, LLC; Mellon Financial Markets, LLC (n/k/a BNY Mellon Capital Markets, LLC); Merrill Lynch, Pierce, Fenner & Smith Inc.; Mizuho Securities USA, Inc.; Morgan Stanley & Co. Inc.; nabCapital Securities, LLC; National Australia Bank Ltd.; Natixis Bleichroeder Inc.; Raymond James & Associates, Inc.; RBC Capital Markets Corporation (f/k/a RBC Dain Rauscher Inc.); RBS Securities Inc. (f/k/a Greenwich Capital Markets Inc., d/b/a RBS Greenwich Capital); Santander Investment Securities Inc.; Scotia Capital (USA) Inc.; SG Americas Securities LLC; Sovereign Securities Corporation, LLC; SunTrust Robinson Humphrey, Inc.; TD Securities (USA) LLC; UBS Securities LLC; Utendahl Capital Partners, L.P.; Wachovia Capital Finance; Wachovia Securities, LLC; and Wells Fargo Securities, LLC.


3

Plaintiffs intend to move for Court approval of such settlements in conjunction with moving for

Court approval of the settlement with the Settling Underwriter Defendants.

Both the settlement with the Individual Defendants and the settlement with the Settling

Underwriter Defendants remain subject to Court approval pursuant to Fed. R. Civ. P. 23(e). For

purposes of judicial efficiency and economy, Lead Plaintiffs intend to submit simultaneously

both settlements to the Court on January 2, 2012. Likewise, Lead Plaintiffs will propose a

coordinated notice procedure for both settlements.

II. LEAD PLAINTIFFS AND THE NON-SETTLING DEFENDANTS’ AGREED UPON DISCOVERY PLAN

A. Initial Disclosures

The Parties agree to exchange initial disclosures pursuant to Fed. R. Civ. P. 26(a)(1) by

December 16, 2011.

B. Confidentiality And Protective Order

The Parties agree to be bound by the terms of a Stipulation and [Proposed] Order

Governing the Production and Exchange of Confidential Material (the “Protective Order”) to be

filed by the Parties no later than fourteen (14) calendar days after issuance of a pretrial

scheduling order. To the extent the Parties produce documents prior to the entry of a Protective

Order, the Parties agree to produce documents pursuant to “attorneys’ eyes only” restrictions.

C. Written Discovery And Document Productions

The Parties agree that interrogatories shall be governed by the limits set forth in Fed. R.

Civ. P. 33 and Local Rule 33.3, unless such limits are subsequently modified by agreement of the

Parties or by further order of the Court.

The Parties also agree that document productions shall be made, so far as practicable, in

electronic, searchable format as requested, subject to the right of any party to inspect the original


4

hard copies. The Parties shall continue to confer on protocols for production of electronically

stored information.

D. Deposition Protocol

The Parties agree that Lead Plaintiffs may notice no more than seventy-five (75)

deposition days, and Non-Settling Defendants collectively may notice no more than seventy-five

(75) deposition days, exclusive of expert depositions and proposed class representatives. These

limits are based upon currently-available information, and the Parties reserve their rights to seek

an increase or decrease in the number of deposition days depending upon future developments in

the action.

The Parties agree that Lead Plaintiffs and the Non-Settling Defendants may each

designate fifteen (15) fact witnesses as “Extended Time Witnesses” and that no deposition of an

Extended Time Witness may be taken for more than two deposition days without consent of the

Parties or leave of Court for good cause shown.

The Parties also agree that for all other fact witnesses, no deposition may be taken for

more than one deposition day without consent of the Parties or leave of Court for good cause

shown. A “deposition day” shall consist of one eight-hour day or two four-hour half days,

exclusive of breaks according to the Parties’ agreement.

The Parties further agree that the time taken for cross-examination of any deponent shall

not be deducted from the cross-examining side’s total allotment of deposition days unless and

until the time taken for cross-examination of a deponent exceeds the time taken for direct

examination of that deponent or unless a party cross-notices a deposition noticed by another

party.


5

Finally, the Parties agree to establish in advance a system of numbering deposition

exhibits to ensure that unique exhibit numbers, suitable for use at trial and in all motion papers

and other submissions to the Court, is employed.

E. Service By E-Mail Or Next Day Courier

The Parties agree to effectuate service by e-mail (when practicable), next-day courier or

the electronic case filing (“ECF”) system of all pleadings, motions, and other documents

requiring service.

F. Coordination Of Discovery

With regard to coordination of discovery with the pending individual cases in the MDL

proceedings, Pretrial Order No. 1 provides that the Executive Committee shall “coordinate the

initiation and conduct of discovery on behalf of plaintiffs.” 5 Lead Counsel, in consultation with

the other members of the Plaintiffs’ Executive Committee, will submit a proposed protocol

governing coordinated written discovery and depositions. Similar protocols have been effective

in similar circumstances, including in the WorldCom securities litigation. See In re WorldCom,

Inc. Sec. Litig., 2004 WL 2591402, at *18-20 (S.D.N.Y. Nov. 12, 2004).

III. PROPOSED PRETRIAL SCHEDULE

UBSFS disagrees with Lead Plaintiffs’ proposed pretrial schedule. Accordingly, its

proposal is set forth in the table below, and attached at Tab A and Tab B are alternative proposed

pretrial schedules for the Court’s consideration.

A. Lead Plaintiffs’ Position On Bifurcated Discovery

There are no compelling reasons to stay merits discovery and create an artificial division

between class and merits discovery where the factual and legal issues overlap to a significant

5 See Pretrial Order No. 1 at ¶3.3. Pending before the Court are approximately thirty (30) individual actions.


6

degree. Indeed, deviating from the typical practice in securities class actions and bifurcating

discovery is particularly inappropriate where, as here, discovery has been stayed for over three

years and several defendants have already made voluminous productions to the Lehman

Bankruptcy Examiner.

Bifurcation would waste judicial resources and create needless delay, as it would likely

require the Court and the Parties to devote time to parsing the “certification” portions of

discovery requests from those related only to “merits,” and the Parties will likely disagree about

where that line should be drawn.6 Moreover, if certification is granted as to any aspect of this

case, discovery will then have to start all over with a second set of requests for production and

deposition, resulting in duplicative searches of electronically stored information and the potential

for duplicative depositions. The result will be delay and a waste of resources, not efficiency.

For these reasons, courts have repeatedly rejected requests for bifurcation of class certification

discovery and merits discovery in similar circumstances.7

6 See, e.g., Hines v. Overstock.com, Inc., 2010 WL 2775921, at *1 (E.D.N.Y. Jul. 13, 2010) (denying request for bifurcation and explaining that “courts in this and other circuits have recognized that where discovery relating to class issues overlaps substantially with merits discovery, bifurcation will result in duplication of efforts and needless line-drawing disputes”). 7 See, e.g., In re Parmalat Sec. Litig., 1:04-cv-00030 (LAK), Aug. 1, 2005 Order (ECF No. 317) (ordering concurrent merits and class discovery); In re SemGroup Energy Partners, L.P., No. 08-MD-1989, 2010 WL 5376262, at *3 (N.D. Okla. Dec. 21, 2010) (denying bifurcation primarily to avoid delay); Overstock.com, Inc., 2010 WL 2775921 at *1 (denying request for bifurcation and noting that defendant’s request was effectively a request for stay of merits discovery and that defendant had burden to establish good cause); Gray v. First Winthrop. Corp., 133 F.R.D. 39, 41 (N.D. Cal. 1990) (class and merits discovery “enmeshed” and “cannot be meaningfully developed without inquiry into basic issues of the litigation”); In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173-74 (D.D.C. 2009) (recognizing that bifurcation is particularly challenging in cases involving ESI and “the continued need for supervision and the increased number of disputes would further delay the case proceedings”); see also Federal Judicial Center, Manual for Complex Litigation § 21.14 (4th ed. 2004) (“There is not always a bright line between [merits and class discovery]. Courts have recognized that information about the nature of the claims on the merits and the proof that they require is important to deciding


7

Any suggestion that bifurcation is appropriate because this Court is unlikely to grant class

certification on the PPN claims is both premature and lacking in merit. 8 Any contention on the

part of UBSFS that its right to raise purportedly “individualized” defenses requires bifurcation

should be rejected. Here, Lead Plaintiffs will use common evidence to prove that UBSFS’s

statements about the “principal protection” of the notes it underwrote were false or misleading

and material to a reasonable investor. And, because all class members’ claims arise from a

common nucleus of fact, common issues predominate over any affirmative defenses, like

knowledge or loss causation, that UBSFS may assert.

Certification of Lead Plaintiffs’ Securities Act claims is consistent with long-standing

Second Circuit precedent that class actions are an appropriate and desirable means of resolving

securities claims.9 Section 11 and 12 claims are particularly amenable to class certification

because they are strict liability claims that do not require proof of reliance.10

B. UBSFS’ Position On Bifurcated Discovery

As described above, Lead Plaintiffs have reached settlements in principle with all of the

individual defendants and most of the underwriter defendants. Assuming that those settlements

certification. Arbitrary insistence on the merits/class discovery distinction sometimes thwarts the informed judicial assessment that current class certification practice emphasizes.”). 8 The Lehman/UBS Structured Products that purported to offer full or partial principal protection (the “PPNs”) are listed in bold print in Appendix B attached to the Third Amended Class Action Complaint. 9 See, e.g., Maywalt v. Parker & Parsley Petroleum Co., 147 F.R.D. 51, 54 (S.D.N.Y. 1993) (explaining that Second Circuit “has explicitly noted its preference for class certification in securities cases and the importance of such certification for small securities holders located throughout the country”); In re Veeco Instruments, Inc. Sec. Litig., 235 F.R.D. 220, 237 (S.D.N.Y. 2006). 10 Under Section 11, if a plaintiff purchased a security issued pursuant to a registration statement, “he need only show a material misstatement or omission to establish his prima facie case.” Herman & MacLean v. Huddleston, 459 U.S. 375, 382 (1983).


8

are approved, what remains in this case will be: (1) claims against UBSFS under sections 11 and

12 of the Securities Act of 1933 with respect to 33 offerings of Lehman Brothers Holdings, Inc.

structured products, including principal protection notes (the “Structured Notes”); (2) a claim

against Ernst & Young LLP under section 10(b) of the Securities Exchange Act of 1934 and

Rule 10b-5 promulgated thereunder; and (3) claims against a handful of non-settling underwriter

defendants under section 11 of the Securities Act with respect to certain offerings of certain

securities other than Structured Notes.

As reflected in the proposal attached at TAB B, UBSFS requests that the Court order a

partial bifurcation of discovery such that class certification discovery and third-party document

discovery precede other merits discovery. As explained in greater detail below, UBSFS believes

it is appropriate and efficient in this case for the Court to rule on class certification with regard to

the claims relating to the Structured Notes, before imposing on UBSFS the tremendous cost and

burden of responding to merits discovery requests in this case. The scheduling order that UBSFS

seeks is entirely consistent with case law in this Circuit and the Manual for Complex Litigation.

The proposed limited bifurcation of class and merits discovery also is appropriate in this case

because: (1) the class discovery UBSFS anticipates taking will be quite limited in time and

scope; (2) it is unlikely that this case will proceed if class certification is denied; and

(3) plaintiffs will suffer no prejudice from a short delay in full merits discovery against the party

defendants.11

A decision as to whether and how class and merits discovery should be bifurcated is left

to the sound discretion of the trial court and generally will turn on the unique circumstances of

each case. See In re Initial Public Offering Sec. Litig., 471 F.3d 24, 41 (2d Cir. 2006). In

11 This is all the more true given the significant volume of third-party document discovery to be conducted.


9

exercising their discretion, “[c]ourts often bifurcate discovery between certification issues and

those related to the merits of the allegations” because “[d]iscovery relevant only to the merits

delays the certification decision and may ultimately be unnecessary…and can create

extraordinary and unnecessary expense and burden.” Federal Judicial Center, Manual for

Complex Litigation § 21.14 (4th ed. 2004); see also 1 McLaughlin on Class Actions § 3.10 (7th

ed. 2010) (stating that “interests of cost and resource efficiency often support formally deferring

full-blown merits discovery until class certification is decided. In addition, confining discovery

to class issues until certification is decided may facilitate compliance with Fed. R. Civ.

P. 23(c)(1)(A)’s mandate that class certification be decided ‘at an early practicable time.’”).

Courts in this Circuit have repeatedly bifurcated class certification and merits discovery

in order to expedite the determination of class certification. See, e.g., Jacobsen v. Stop & Shop

Supermarket Co., No. 02 Civ. 5915 (DLC), 2004 WL 1918795, at *1 (S.D.N.Y. Aug. 27, 2004)

(stating that, “[i]n order to determine the class certification issues as expeditiously as possible,

discovery was bifurcated”); see also Fleischman v. Albany Med. Ctr., 639 F.3d 28, 29 (2d Cir.

2011) (noting the magistrate judge’s decision to bifurcate class certification and merits

discovery). Salon Fad v. L’Oreal USA, Inc., No. 10 Civ. 5063(DLC), 2011 WL 4089902, at *5

(S.D.N.Y. Sept. 14, 2011) (bifurcating class and merits discovery); B.H. v. City of New York, No.

10 CV 210 (RRM)(ALC), 2011 WL 2133810, at *1 (E.D.N.Y. May 27, 2011) (same).

Whether bifurcation is appropriate generally turns on three factors: (1) whether class

issues are distinct from the merits issues, such that it would be efficient to resolve the class

certification issues first and avoid potentially needless merits discovery; (2) whether the case is

likely to proceed even if the motion for class certification is denied; and (3) whether there would

be prejudice to plaintiffs if merits discovery commences after the ruling on the motion for class


10

certification. See, e.g., 1 McLaughlin on Class Actions § 3.10 (7th ed. 2010). In this case, all

three factors favor the limited bifurcation of class and merits discovery contemplated in the

attached proposed scheduling order.

First, the discovery needed for class issues is relatively limited in scope, and largely

distinct from the vast majority of “merits” discovery that would be conducted independent from

discovery with respect to the Rule 23 issues. UBSFS proposes a three-month period to conduct

class discovery, with any expert discovery to be taken during the briefing on the class

certification motion. With respect to class certification for the Structured Notes claims, UBSFS

intends to obtain documents from, and take the depositions of, the 24 named plaintiffs (the

“Named Plaintiffs”) who purchased the Structured Notes, to challenge the typicality, adequacy,

predominance, and superiority prongs of Rule 23.

In particular, there are significant individual issues concerning whether class members

knew the truth regarding the alleged misstatements and omissions. The Court has already

recognized as much, in holding that “a careful and intelligent reader” would not have been

misled regarding “the nature” of the principal protection notes. See Opinion, dated July 27,

2011, at 97. The Second Circuit has held that where such individualized inquiries into class

members’ knowledge must be made, the plaintiffs cannot satisfy the requirement that common

questions of law and fact predominate. See IPO, 471 F.3d at 43-44. We understand that a

similar issue is currently before the Second Circuit on appeal from Judge Baer’s decision in New

Jersey Carpenters Health Fund v. Residential Capital, LLC, 272 F.R.D. 160 (S.D.N.Y. 2011).

These individualized inquiries are all the more necessary in the present case because each of the

33 Structured Notes offerings involved its own unique pricing supplement. Further, although

Plaintiffs base many of their Structured Notes claims on the supposedly misleading nature of the


11

“principal protection” statements in the offering documents, it is notable that 10 of the offerings

for which Plaintiffs make such claims offered less than 100% protection, and thus purchasers in

those 10 offerings would necessarily have a different understanding of principal protection than

those who purchased Structured Notes with 100% protection.

The class discovery that UBSFS contemplates will be directly relevant to these critical

Rule 23 factors. UBSFS does not expect the Named Plaintiffs to have substantial volumes of

documents, and believes it can complete most of their depositions within a four or five hour

period each (excluding any redirect). UBSFS may also seek limited discovery from, or submit

sworn affidavits from, certain non-parties, including brokers and financial advisors who sold the

Structured Notes, for the purpose of demonstrating that a substantial number of purchasers of the

Structured Notes had actual knowledge of some or all of the facts allegedly misrepresented or

concealed in the offering documents for the Structured Notes (through oral disclosures or

otherwise). While this class discovery will be narrowly tailored, merits discovery will not.

Given the substantive allegations in this case regarding alleged misrepresentations and omissions

in Lehman Brothers’ financial statements and the various offering materials, merits discovery

will involve the collection and review of potentially millions of pages of documents, and dozens

of depositions. UBSFS expects that such discovery will be extraordinarily costly and time

consuming: As the proposed scheduling orders demonstrate, the parties are proposing 75

deposition days for each side, exclusive of expert and class representative depositions.

Second, it is highly unlikely that this case will proceed if class certification is denied. For

reasons that UBSFS will explain in detail when class certification is briefed, FINRA arbitration

provides a superior, more efficient forum for individual class members to pursue claims, if they

are so inclined. Literally, hundreds of putative class members already have commenced FINRA


12

arbitration proceedings against UBSFS, and arbitrations continue to be filed on a regular basis.

Indeed, the Court may recall that during the pendency of the motion to dismiss, one of the named

plaintiffs withdrew from the case for this very reason. See Opinion, dated July 27, 2011, at 20

n.91. Just last week, another class member filed a notice to opt out to pursue his claims in

arbitration. See Notice of Opt Out of Class Action, dated October 25, 2011 (Dkt. No. 485).

These arbitrations often involve claims that cannot be brought under the federal securities laws,

demonstrating that there is significant interest within the putative class in individually controlling

the prosecution of their claims, and that individual arbitrations are a superior method for

adjudicating claims arising out of the purchase of the Structured Notes. Given this rich history

of class members who already have “voted with their feet,” UBSFS believes that class

certification of the claims related to the Structured Notes must also be denied because plaintiffs

cannot satisfy the superiority requirement. This Court has previously recognized the significance

of this factor to class certification. See In re Rezulin Prod. Liab. Litig., 210 F.R.D. 61, 69

(S.D.N.Y. 2002) (denying class certification where members of the putative class had

commenced hundreds or thousands of individual cases); In re Parmalat Sec. Litig., 2008 WL

3895539, at *11 (S.D.N.Y. Aug. 21, 2008) (granting class certification where Court was “not

aware that any other equity holders are interested in prosecuting their individual claims outside

of this action, nor of any litigation that has been commenced to that end”).

Third, plaintiffs would suffer no prejudice from a short delay of full merits discovery.

Moreover, UBSFS does not seek to stay all merits discovery, only party merits discovery and

deposition discovery. At the same time class discovery is being conducted, plaintiffs will be free

to seek from Lehman Brothers and other third parties the substantial volume of documents that

will be necessary to prove their claims in this action. Because gathering and reviewing such


13

third party discovery material will likely take several months in any event, there will be little

overall impact on the discovery schedule by bifurcation. Given this reality, a modest delay of

merits discovery against UBSFS and the other party defendants will not materially delay the

completion of merits discovery in this case, assuming that a class is ever certified with regard to

the Securities Act claims relating to the Structured Notes.

In contrast, as described above, UBSFS will be severely prejudiced if it is forced to

expend significant resources to gather and review thousands of documents relating to the merits,

or to participate in deposition discovery, when doing so could ultimately be premature and

unnecessary should class certification be denied.

Accordingly, UBSFS respectfully requests that the Court enter the proposed pretrial

schedule and coordinated discovery case management order, attached at TAB B, which

bifurcates party merits discovery and class certification discovery.

C. Lead Plaintiffs’ Proposed Pretrial Schedule

ACTION

DUE DATE

Answers by Non-Settling Defendants* December 2, 2011 Commencement of Discovery Immediately Initial Disclosures* December 16, 2011 Completion of Document Production For Document Requests Served by February 13, 2012.

Substantially complete on or before April 10, 2012.

Class Certification: Expert Designation January 6, 2012 Rebuttal Expert Designation January 20, 2012 Lead Plaintiff to Serve Expert Reports In Support of Class Certification

February 3, 2012

Defendants to Serve Expert Reports In Opposition to Class Certification

February 24, 2012

Lead Plaintiff to Serve Rebuttal Expert Reports In Support of Class Certification

March 9, 2012


14

ACTION

DUE DATE

Class Certification Discovery Completion, Except Expert Depositions

March 9, 2012

Depositions of Class Certification Experts

Between March 12, 2012 and March 23, 2012

Motion for Class Certification April 6, 2012 Opposition Motion for Class Certification

May 7, 2012

Reply Papers in Support of Class Certification

June 7, 2012

Identification of Experts and Testimony September 28, 2012 Identification of Rebuttal Experts October 31, 2012 Joinder of Additional Parties Under FRCP 20 November 9, 2012 Fact Discovery Cutoff November 16, 2012 Expert Reports December 21, 2012 Rebuttal Expert Reports January 18, 2013 Expert Discovery Cutoff March 1, 2013 Motions for Summary Adjudication April 1, 2013; Oppositions 60 Days Thereafter;

Reply Briefs 30 Days Thereafter Joint Pretrial Order July 12, 2013 Trial Date July 29, 2013 * Indicates where the Parties agree.

D. UBSFS’ Proposed Pretrial Schedule

ACTION

DUE DATE

Answers by Non-Settling Defendants* December 2, 2011 Commencement of Class Certification Discovery*

Immediately

Commencement of Non-Party Merits Document Discovery*

Immediately

Initial Disclosures* December 16, 2011 Commencement of Full Merits Discovery After decision by Court on class certification

motion Class Certification:

Class Certification Discovery Completion, Except Expert Depositions

February 3, 2012

Motion for Class Certification February 3, 2012 Class Certification Motion Expert Discovery

March 2, 2012


15

ACTION

DUE DATE

Opposition to Motion for Class Certification

March 16, 2012

Opposition to Class Certification Motion Expert Discovery

April 13, 2012

Reply Papers in Support of Class Certification

April 27, 2012

Full Merits Discovery: Identification of Experts and Testimony 180 days following decision on class

certification motion Identification of Rebuttal Experts 210 days following decision on class

certification motion12 Joinder of Additional Parties Under FRCP 20

220 days following decision on class certification motion

Fact Discovery Cutoff 240 days following decision on class certification motion

Expert Reports 270 days following decision on class certification motion

Rebuttal Expert Reports 300 days following decision on class certification motion

Expert Discovery Cutoff 345 following decision on class certification motion

Motions for Summary Adjudication 390 days following decision on class certification motion

Joint Pretrial Order 490 days following decision on class certification motion

Trial Date As ordered by the Court

12 For all dates on or after the identification of rebuttal experts, the time frames proposed by UBSFS essentially track the timeframes proposed by Lead Plaintiffs.


16

Dated: November 1, 2011 Respectfully submitted,

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP /s/ David R. Stickney DAVID R. STICKNEY MAX W. BERGER STEVEN SINGER 1285 Avenue of the Americas, 38th Floor New York, NY 10019 Tel: (212) 554-1400 Fax: (212) 554-1444

-and- DAVID R. STICKNEY BRETT M. MIDDLETON JON F. WORM 12481 High Bluff Drive, Suite 300 San Diego, CA 92130 Tel: (858) 793-0070 Fax: (858) 793-0323 Co-Lead Counsel for Lead Plaintiffs KESSLER TOPAZ MELTZER & CHECK, LLP /s/ David Kessler DAVID KESSLER DAVID KESSLER JOHN KEHOE KIMBERLY JUSTICE JOHN GROSS 280 King of Prussia Road Radnor, PA 19087 Tel: (610) 667-7706 Fax: (610) 667-7056 Co-Lead Counsel for Lead Plaintiffs


17

GIRARD GIBBS LLP

/s/ Daniel C. Girard

DANIEL C. GIRARD

DANIEL C. GIRARD JONATHAN K. LEVINE DENA CONNOLLY SHARP 601 California Street, Floor 14 San Francisco, CA 94108 Tel: (415) 981-4800 Fax: (415) 981-4846 Additional Counsel for Plaintiffs LATHAM & WATKINS LLP /s/ Miles N. Ruthberg

MILES N. RUTHBERG

MILES N. RUTHBERG JAMIE L. WINE 885 Third Avenue New York NY 10022-4834 Tel: (212) 906-1200 Fax: (212) 751-4864

Counsel for Ernst & Young LLP GIBSON, DUNN & CRUTCHER LLP /s/ Jonathan C. Dickey

JONATHAN C. DICKEY

JONATHAN C. DICKEY MARSHALL R. KING 200 Park Avenue New York, NY 10166-0193 Tel: (212) 351-3905 Fax: (212) 351-5243

Counsel for UBS Financial Services, Inc.


18

KATTEN MUCHIN ROSENMAN LLP /s/ David C. Bohan

DAVID C. BOHAN

DAVID C. BOHAN 525 West Monroe Street Chicago, IL 60661-3693 Tel: (312) 902-5200 Fax: (312) 902.1061

Counsel for Cabrera Capital Markets, LLC

KASOWITZ BENSON TORRES & FRIEDMAN LLP /s/ Michael Hanin

MICHAEL HANIN

MICHAEL HANIN MARK P. RESSLER 1633 Broadway New York, NY 10019 Tel: (212) 506-1788 Fax: (212) 506-1800

Counsel for HVB Capital Markets, Inc.

BOIES, SCHILLER & FLEXNER LLP /s/ David R. Boyd

DAVID R. BOYD

DAVID R. BOYD 5301 Wisconsin Ave. NW Washington, DC 20015 Tel: (202) 895-7593 Fax: (202) 237-6131

Counsel for Incapital LLC


19

PILLSBURY WINTHROP SHAW PITTMAN LLP /s/ Ranah L. Esmaili

RANAH L. ESMAILI

DAVID M. FURBUSH RANAH L. ESMAILI 50 Fremont Street San Francisco, CA 94105-2228 Tel: (415) 983-1690 Fax: (415) 983-1200

Counsel for Williams Capital Group, L.P.


TAB A

Case 1:09-md-02017-LAK Document 488-1 Filed 11/01/11 Page 1 of 9

1

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK In re LEHMAN BROTHERS SECURITIES AND ERISA LITIGATION This Document Applies To:

In re Lehman Brothers Equity/Debt Securities Litigation, 08-CV-5523 (LAK)


[PROPOSED] PRETRIAL ORDER NO. __ (Pretrial Schedule and Coordinated Discovery Case Management Order)

WHEREAS, on July 31, 2008, the Court appointed Lead Plaintiffs in this action pursuant

to Section 21D(a)(3)(B) of the Securities Exchange Act of 1934, 15 U.S.C. § 78-u4(a)(3)(8), as

amended by the Private Securities Litigation Reform Act of 1995, and appointed the law firms of

Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP, as

Lead Counsel for the putative class;1

WHEREAS, on January 9, 2009, the Court entered Pretrial Order No. 1 which

consolidated—for discovery purposes only—the following three consolidated class actions: In re

Lehman Brothers Equity/Debt Securities Litigation (08 Civ. 5523 (LAK)) (the “Lehman

Equity/Debt Action”); In re Lehman Brothers Mortgage-Backed Securities Litigation (08 Civ.

6762 (LAK)) (the “Lehman MBS Action”); and In re Lehman Brothers ERISA Litigation (08

1 “Lead Plaintiffs” refers to Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers’ Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund; “Lead Counsel” refers to the lead counsel appointed in the Lehman Equity/Debt Action: Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP; and “Non-Settling Defendants” refers to Ernst & Young LLP (“E&Y”), as well as Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.; Incapital LLC; UBS Financial Services, Inc.; and Williams Capital Group, L.P.


2

Civ. 5598 (LAK)) (the “Lehman ERISA Action” and these three actions are collectively referred

to herein as the “Consolidated Class Actions”);

WHEREAS, with respect to discovery, Pretrial Order No. 1 sets forth that only the

Plaintiffs’ Executive Committee and the Executive Committee Chair have the authority to

“coordinate the initiation and conduct of discovery on behalf of plaintiffs consistent with the

requirements of Fed. R. Civ. P. 26(b)(1) and (2), and (g), including the preparation of joint

interrogatories and requests for production of documents and the examination of witnesses in

depositions”;

WHEREAS, Pretrial Order No. 1 requires that “no discovery or other actions” in the

Consolidated Class Actions “shall be undertaken on behalf of any plaintiff except at the direction

or with the permission of the Chair and/or Executive Committee”;

WHEREAS, on February 11, 2009, the Court entered Pretrial Order No. 3 which orders

that Pretrial Order No. 1 shall apply to all cases and in all respects to any related actions

transferred to this Court as a result of a decision by the Judicial Panel on Multidistrict Litigation;

WHEREAS, in accordance with Pretrial Order Nos. 1 and 3, Lead Counsel, after

consulting with the other members of the Plaintiffs’ Executive Committee, and Non-Settling

Defendants will submit a proposed protocol governing coordinated written discovery and

depositions for the Lehman Debt/Equity Action and the individual actions before this Court;

WHEREAS, on August 25, 2011, Lead Counsel informed the Court about an agreement

in principle to settle with the Lehman Officer and Director Defendants named in the Lehman

Equity/Debt Action, subject to Court approval pursuant to Fed. R. Civ. P. 23(e);

WHEREAS, on September 7, 2011, Lead Counsel, and the additional Executive

Committee representative in the Lehman Equity/Debt Action, met with counsel for the Non-

Settling Defendants pursuant to Fed. R. Civ. P. 26(f), and subsequent to the September 7, 2011

meeting, those parties continued to meet and confer, in person, by telephone, and by email,

concerning the issues set forth in Fed. R. Civ. P. 26(f);


3

WHEREAS, on October 3, 2011, Lead Counsel informed the Court about an agreement

in principle to settle, subject to Court approval pursuant to Fed. R. Civ. P. 23(e), with certain of

the Underwriter Defendants named in the Lehman Equity/Debt Action,2 other than the

Underwriter Defendants included above as “Non-Settling Defendants”;

WHEREAS, Lead Plaintiffs subsequently agreed in principle to settle with Charles

Schwab & Co., Inc., M.R. Beal & Company, Muriel Siebert & Co. Inc. and Siebert Capital

Markets, subject to Court approval pursuant to Fed. R. Civ. P. 23(e);

WHEREAS, as a result of the settlements, certain of the Non-Settling Defendants have

obtained, or are in the process of obtaining, substitute counsel; and

WHEREAS, the Court scheduled a status and scheduling conference on November 8,

2011;

NOW, THEREFORE, the Court having considered the parties’ proposed pretrial

schedule, IT IS HEREBY ORDERED:

1. The following schedule shall govern the pretrial proceedings in the Lehman

Equity/Debt Action:

2 The Underwriter Defendants participating in the settlement are: A.G. Edwards & Sons, Inc.; ABN Amro Inc.; ANZ Securities, Inc.; Banc of America Securities LLC; BBVA Securities Inc.; BNP Paribas S.A.; BNY Mellon Capital Markets, LLC; Caja de Ahorros y Monte de Piedad de Madrid; Calyon Securities (USA) Inc. (n/k/a Crédit Agricole Corporate and Investment Bank); CIBC World Markets Corp.; Citigroup Global Markets Inc.; Commerzbank Capital Markets Corp.; Daiwa Capital Markets Europe Limited (f/k/a Daiwa Securities SMBC Europe Limited); DnB NOR Markets Inc. (the trade name of which is DnB NOR Markets); DZ Financial Markets LLC; Edward D. Jones & Co., L.P.; Fidelity Capital Markets Services (a division of National Financial Services LLC); Fortis Securities LLC; BMO Capital Markets Corp. (f/k/a Harris Nesbitt Corp.); HSBC Securities (USA) Inc.; ING Financial Markets LLC; Loop Capital Markets, LLC; Mellon Financial Markets, LLC (n/k/a BNY Mellon Capital Markets, LLC); Merrill Lynch, Pierce, Fenner & Smith Inc.; Mizuho Securities USA, Inc.; Morgan Stanley & Co. Inc.; nabCapital Securities, LLC; National Australia Bank Ltd.; Natixis Bleichroeder Inc.; Raymond James & Associates, Inc.; RBC Capital Markets Corporation (f/k/a RBC Dain Rauscher Inc.); RBS Securities Inc. (f/k/a Greenwich Capital Markets Inc., d/b/a RBS Greenwich Capital); Santander Investment Securities Inc.; Scotia Capital (USA) Inc.; SG Americas Securities LLC; Sovereign Securities Corporation, LLC; SunTrust Robinson Humphrey, Inc.; TD Securities (USA) LLC; UBS Securities LLC; Utendahl Capital Partners, L.P.; Wachovia Capital Finance; Wachovia Securities, LLC; and Wells Fargo Securities, LLC.


4

a. Answers. Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.;

UBS Financial Services, Inc.; and Williams Capital Group, L.P. shall answer the Third

Amended Class Action Complaint on or before December 2, 2011.

b. Commencement of Discovery. Discovery may commence immediately.

c. Initial Disclosures. Initial disclosures required pursuant to Fed. R. Civ. P.

26(a)(1) shall be completed on or before December 16, 2011.

d. Completion of Production of Documents. Document production shall

take place on a rolling basis. Document production for document requests served by

February 13, 2012 shall be substantially complete on or before April 10, 2012. The

parties may, however, propound additional discovery in accordance with the November

16, 2012 cutoff date for fact discovery set forth below. Any documents withheld on the

basis of a claimed privilege or protection shall be logged, and such privilege logs shall be

supplied on a rolling basis.

e. Class Certification. Class certification discovery shall be completed by

March 9, 2012, with the exception of depositions, if necessary, of any expert(s) in

connection with class certification.

(i). The Parties shall identify the experts that they will be using in

connection with class certification and the subjects of their testimony by January

6, 2012. Any rebuttal experts in connection with class certification and the

subjects of their testimony shall be identified by January 20, 2012.

(ii). Lead Plaintiffs shall serve expert report(s) in support of class

certification by February 3, 2012. Non-Settling Defendants shall serve any expert

report(s) in opposition to class certification by February 24, 2012. Lead Plaintiffs

shall serve any rebuttal expert report(s) in support of class certification by March

9, 2012.

(iii). Depositions of the parties’ expert(s) in connection with class

certification shall occur between March 12, 2012 and March 23, 2012.


5

(iv). Motion for class certification shall be filed by April 6, 2012. Any

opposition papers shall be filed by May 7, 2012, and any reply papers shall be

filed by June 7, 2012.

f. Identification of Experts and Areas of Testimony. Parties bearing the

burden of proof on an issue at trial must identify areas on which they intend to offer

expert testimony and the identities of the experts on or before September 28, 2012.

Additional experts and areas of testimony may be identified after this date by agreement

of the parties or by Court order upon showing of good cause.

g. Identification of Rebuttal Experts. Parties shall identify any rebuttal

experts on or before October 31, 2012.

h. Joinder of Additional Parties Under Fed. R. Civ. P. 20. Any additional

parties shall be joined on or before November 9, 2012.

i. Fact Discovery Cutoff. Fact discovery shall be completed on or before

November 16, 2012.

j. Experts Reports. Exchange of initial expert reports and disclosures

required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur on or before December 21, 2012.

k. Rebuttal Expert Reports. Exchange of rebuttal expert reports and

disclosures required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur on or before January

18, 2013.

l. Expert Discovery Cutoff. Expert discovery shall be concluded on or

before March 1, 2013.

m. Motions for Summary Adjudication. Any motions for summary

judgment shall be filed on or before April 1, 2013; any opposition to a motion for

summary judgment shall be filed no later than sixty (60) calendar days thereafter; and any

reply brief in support of a motion for summary judgment shall be filed no later than thirty

(30) calendar days after any such opposition is filed.


6

n. Joint Pretrial Order. A joint pretrial order shall be filed on or before

July 12, 2013.

o. Trial Date. Trial shall commence on July 29, 2013, or as ordered by the

Court.

Confidentiality and Protective Order

2. All parties to the Lehman Equity/Debt Action shall agree to and be bound by the

terms of a [Proposed] Stipulation and Order Governing the Production and Exchange of

Confidential Material (the “Protective Order”) to be filed by the parties no later than fourteen

(14) calendar days after issuance of this Order. To the extent the Parties produce documents

prior to the entry of a Protective Order, the Parties agree to produce documents pursuant to

“attorneys’ eyes only” restrictions.

3. No discovery materials obtained by any party in the Consolidated Class Actions

shall be shared with any other party in the Consolidated Class Actions that has not agreed in

writing to be bound by the Protective Order. Subject to the terms of this Order, all discovery

obtained by any plaintiff in any of the Consolidated Class Actions may be shared with any other

plaintiff in those actions and all discovery obtained by any defendant in any of the Consolidated

Class Actions may be shared with any other defendant. All discovery obtained by any party in

any of the Consolidated Class Actions shall be deemed discovered in each of those actions.

Written Discovery and Document Productions

4. Interrogatories may be served pursuant to Fed. R. Civ. P. 33 and Local Rule 33.3

and shall be governed by the limits set forth in those rules, unless such limits are subsequently

modified by agreement of the parties or by further order of the Court.

5. Document productions shall be made, so far as practicable, in electronic,

searchable format as requested, subject to the right of any party to inspect the original hard

copies. The parties shall continue to confer on protocols for production of electronically stored

information.


7

Depositions

6. Depositions may be taken at any time, subject to the schedule set forth herein. In

the Lehman Equity/Debt Action, the Lead Plaintiffs may notice no more than 75 deposition days,

and the Non-Settling Defendants may notice no more than 75 deposition days, exclusive of

expert depositions and class representative depositions. All parties reserve their rights to seek an

increase or decrease in the number of deposition days depending upon future developments in

the action.

7. The Lead Plaintiffs in the Lehman Equity/Debt Action and the defense side may

each designate fifteen (15) fact witnesses as “Extended Time Witnesses.” No deposition of an


parties or leave of the Court for good cause shown. For all other fact witnesses in the Lehman

Equity/Debt Action, no deposition may be taken for more than one deposition day without

consent of the parties or leave of the Court for good cause shown. A “deposition day” shall

consist of one eight-hour day or two four-hour half days, exclusive of breaks.

8. The time taken for cross-examination of any deponent will not be deducted from

the cross-examining side’s total allotment of deposition days unless and until the time taken for

cross-examination of a deponent exceeds the time taken for direct examination of that deponent

or unless a party cross-notices a deposition noticed by another party.

9. Plaintiffs’ Executive Committee and Non-Settling Defendants’ counsel shall

agree in advance on a system of numbering deposition exhibits to ensure that unique exhibit

numbers, suitable for use at trial and in all motion papers and other submissions to the Court, are

employed.

Dispositive Motions

10. Should motions for summary judgment, or any other motions, include many

voluminous exhibits, the parties will provide electronic courtesy copies to the Court with all

references to exhibits hyperlinked to the exhibits in order to facilitate cross-references.


8

SO ORDERED.

Dated:_____________, 2011

________________________________ Honorable Lewis A. Kaplan

United States District Judge


TAB B


1





[PROPOSED] PRETRIAL ORDER NO.____ (Pretrial Schedule and Coordinated Discovery Case Management Order)




Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP, as

Lead Counsel for the putative class;1


consolidated —for discovery purposes only—the following three consolidated class actions: In

re Lehman Brothers Equity/Debt Securities Litigation (08 Civ. 5523 (LAK)) (the “Lehman


6762 (LAK)) (the “Lehman MBS Action”); and In re Lehman Brothers ERISA Litigation (08

1 “Lead Plaintiffs” refers to Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers’ Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund; “Lead Counsel” refers to the lead counsel appointed in the Lehman Equity/Debt Action: Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check LLP; and “Non-Settling Defendants” refers to Ernst & Young LLP (“E&Y”), as well as Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.; Incapital LLC; UBS Financial Services, Inc.; and Williams Capital Group, L.P.


2

Civ. 5598 (LAK)) (the “Lehman ERISA Action” and these three actions are collectively referred

to herein as the “Consolidated Class Actions”);






depositions”;





that Pretrial Order No. 1 shall apply to all cases and in all respects to any related actions

transferred to this Court as a result of a decision by the Judicial Panel on Multidistrict Litigation;





WHEREAS, on August 25, 2011, Lead Counsel informed the Court about an agreement

in principle to settle with the Lehman Officer and Director Defendants named in the Lehman



Committee representative in the Lehman Equity/Debt Action, met with counsel for the Non-

Settling Defendants pursuant to Fed. R. Civ. P. 26(f), and subsequent to the September 7, 2011

meeting, those parties continued to meet and confer, in person, by telephone, and by email,



3

WHEREAS, on October 3, 2011, Lead Counsel informed the Court about an agreement

in principle to settle, subject to Court approval pursuant to Fed. R. Civ. P. 23(e), with certain of

the Underwriter Defendants named in the Lehman Equity/Debt Action,2 other than the

Underwriter Defendants included above as “Non-Settling Defendants”;







2011;



1. The following schedule shall govern the pretrial proceedings in the

Lehman Equity/Debt Action:



4

a. Answers. Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.;

UBS Financial Services, Inc.; and Williams Capital Group, L.P. shall answer the Third


b. Commencement of Discovery. Discovery on issues relating to class

certification may commence immediately. Fact discovery on issues unrelated to class

certification may likewise commence immediately, except that, pending a ruling on a

motion for class certification, such discovery shall be limited to production of documents

from non-parties.



d. Class Certification. Class certification discovery shall be completed by

February 3, 2012, with the exception of depositions, if necessary, of any expert(s) in

connection with class certification. Any class certification motion shall be filed on or

before February 3, 2012; to the extent the motion relies on expert testimony, discovery

regarding such experts shall be completed by March 2, 2012; any opposition to a motion

for class certification shall be filed on or before March 16, 2012; to the extent the

opposition relies on expert testimony, discovery regarding such experts shall be

completed by April 13, 2012; and any reply brief in support of a motion for class

certification shall be filed on or before April 27, 2012.

e. Completion of Production of Documents. Following a decision by the

Court on the motion for class certification, fact discovery relating to other issues may

commence. Document production shall take place on a rolling basis. Any documents

withheld on the basis of a claimed privilege or protection shall be logged, and such

privilege logs shall be supplied on a rolling basis.


burden of proof on an issue at trial must identify areas on which they intend to offer

expert testimony and the identities of the experts no later than 180 days following the


5

decision on the motion for class certification. Additional experts and areas of testimony

may be identified after this date by agreement of the parties or by Court order upon

showing of good cause.


experts no later than 210 days following the decision on the motion for class certification.


parties shall be joined no later than 220 days following the decision on the motion for

class certification.

i. Fact Discovery Cutoff. Fact discovery shall be completed no later than

240 days following the decision on the motion for class certification.


required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur no later than 270 days following

the decision on the motion for class certification.


disclosures required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur no later than 300

days following the decision on the motion for class certification.

l. Expert Discovery Cutoff. Expert discovery shall be concluded no later

than 345 days following the decision on the motion for class certification.


judgment shall be filed no later than 390 days following the decision on the motion for

class certification; any opposition to a motion for summary judgment shall be filed no

later than sixty (60) calendar days thereafter; and any reply brief in support of a motion

for summary judgment shall be filed no later than thirty (30) calendar days after any such

opposition is filed.

n. Joint Pretrial Order. A joint pretrial order shall be filed no later than

490 days following the decision on the motion for class certification.

o. Trial Date. Trial shall commence as ordered by the Court.


6




Confidential Material (the “Protective Order”) to be filed by the parties no later than fourteen

(14) calendar days after issuance of this Order. To the extent the Parties produce documents

prior to the entry of a Protective Order, the Parties agree to produce documents pursuant to

“attorneys’ eyes only” restrictions.






Class Actions may be shared with any other defendant. All discovery obtained by any party in

any of the Consolidated Class Actions shall be deemed discovered in each of those actions.





5. Document productions shall be made, so far as practicable, in electronic,

searchable format as requested, subject to the right of any party to inspect the original hard

copies. The parties shall continue to confer on protocols for production of electronically stored

information.

Depositions



and the Non-Settling Defendants may notice no more than 75 deposition days, exclusive of

expert depositions and class representative depositions. All parties reserve their rights to seek an


7

increase or decrease in the number of deposition days depending upon future developments in

the action.





Equity/Debt Action, no deposition may be taken for more than one deposition day without

consent of the parties or leave of the Court for good cause shown. A “deposition day” shall

consist of one eight-hour day or two four-hour half days, exclusive of breaks.



cross-examination of a deponent exceeds the time taken for direct examination of that deponent

or unless a party cross-notices a deposition noticed by another party.

9. Plaintiffs’ Executive Committee and Non-Settling Defendants’ counsel shall

agree in advance on a system of numbering deposition exhibits to ensure that unique exhibit

numbers, suitable for use at trial and in all motion papers and other submissions to the Court, are

employed.

Dispositive Motions




SO ORDERED.

Dated:_____________, 2011




TAB C






[PROPOSED] PRETRIAL ORDER NO.____ (Pretrial Schedule and Coordinated Discovery Case Management Order)




Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP, as Lead

Counsel for the putative class;1


consolidated —for discovery purposes only—the following three consolidated class actions: In re

Lehman Brothers Equity/Debt Securities Litigation (08 Civ. 5523 (LAK)) (the “Lehman


6762 (LAK)) (the “Lehman MBS Action”); and In re Lehman Brothers ERISA Litigation (08 Civ.

1 “Lead Plaintiffs” refers to Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers’ Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund; “Lead Counsel” refers to the lead counsel appointed in the Lehman Equity/Debt Action: Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP; and “Non-Settling Defendants” refers to Ernst & Young LLP (“E&Y”), as well as Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.; Incapital LLC; UBS Financial Services, Inc.; and Williams Capital Group, L.P.


5598 (LAK)) (the “Lehman ERISA Action” and these three actions are collectively referred to

herein as the “Consolidated Class Actions”);






depositions”;





that Pretrial Order No. 1 shall apply to all cases and in all respects to any related actions transferred

to this Court as a result of a decision by the Judicial Panel on Multidistrict Litigation;





WHEREAS, on August 25, 2011, Lead Counsel informed the Court about an agreement in

principle to settle with the Lehman Officer and Director Defendants named in the Lehman



Committee representative in the Lehman Equity/Debt Action, met with counsel for the

Non-Settling Defendants pursuant to Fed. R. Civ. P. 26(f), and subsequent to the September 7,

2011 meeting, those parties continued to meet and confer, in person, by telephone, and by email,



WHEREAS, on October 3, 2011, Lead Counsel informed the Court about an agreement in

principle to settle, subject to Court approval pursuant to Fed. R. Civ. P. 23(e), with certain of the

Underwriter Defendants named in the Lehman Equity/Debt Action,2 other than the Underwriter

Defendants included above as “Non-Settling Defendants”;







2011;



1. The following schedule shall govern the pretrial proceedings in the Lehman

Equity/Debt Action:



a. Answers. Cabrera Capital Markets, LLC; HVB Capital Markets, Inc.; UBS

Financial Services, Inc.; and Williams Capital Group, L.P. shall answer the Third


b. Commencement of Discovery. Discovery may commence immediatelyon

issues relating to class certification may commence immediately. Fact discovery on issues

unrelated to class certification may likewise commence immediately, except that, pending

a ruling on a motion for class certification, such discovery shall be limited to production of

documents from non-parties.



d. Class Certification. Class certification discovery shall be completed by

February 3, 2012, with the exception of depositions, if necessary, of any expert(s) in

connection with class certification. Any class certification motion shall be filed on or

before February 3, 2012; to the extent the motion relies on expert testimony, discovery

regarding such experts shall be completed by March 2, 2012; any opposition to a motion

for class certification shall be filed on or before March 16, 2012; to the extent the

opposition relies on expert testimony, discovery regarding such experts shall be completed

by April 13, 2012; and any reply brief in support of a motion for class certification shall be

filed on or before April 27, 2012.

e. Completion of Production of Documents. Following a decision by the

Court on the motion for class certification, fact discovery relating to other issues may

commence. Document production shall take place on a rolling basis. Document

production for document requests served by February 13, 2012 shall be substantially

complete on or before April 10, 2012. The parties may, however, propound additional

discovery in accordance with the November 16, 2012 cutoff date for fact discovery set

forth below. Any documents withheld on the basis of a claimed privilege or protection

shall be logged, and such privilege logs shall be supplied on a rolling basis.


e. Class Certification. Class certification discovery shall be completed by

March 9, 2012, with the exception of depositions, if necessary, of any expert(s) in

connection with class certification.

(i). The Parties shall identify the experts that they will be using in

connection with class certification and the subjects of their testimony by January 6,

2012. Any rebuttal experts in connection with class certification and the subjects of

their testimony shall be identified by January 20, 2012.

(ii). Lead Plaintiffs shall serve expert report(s) in support of class

certification by February 3, 2012. Non-Settling Defendants shall serve any expert

report(s) in opposition to class certification by February 24, 2012. Lead Plaintiffs

shall serve any rebuttal expert report(s) in support of class certification by March 9,

2012.

(iii). Depositions of the parties’ expert(s) in connection with class

certification shall occur between March 12, 2012 and March 23, 2012.

(iv). Motion for class certification shall be filed by April 6, 2012. Any

opposition papers shall be filed by May 7, 2012, and any reply papers shall be filed

by June 7, 2012.


burden of proof on an issue at trial must identify areas on which they intend to offer expert

testimony and the identities of the experts on or before September 28, 2012.no later than

180 days following the decision on the motion for class certification. Additional experts

and areas of testimony may be identified after this date by agreement of the parties or by

Court order upon showing of good cause.


experts on or before October 31, 2012.no later than 210 days following the decision on the

motion for class certification.



parties shall be joined on or before November 9, 2012.no later than 220 days following the

decision on the motion for class certification.

i. Fact Discovery Cutoff. Fact discovery shall be completed on or before

November 16, 2012.no later than 240 days following the decision on the motion for class

certification.


required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur on or before December 21,

2012.no later than 270 days following the decision on the motion for class certification.


disclosures required pursuant to Fed. R. Civ. P. 26(a)(2) shall occur on or before January

18, 2013.no later than 300 days following the decision on the motion for class certification.

l. Expert Discovery Cutoff. Expert discovery shall be concluded on or

before March 1, 2013.no later than 345 days following the decision on the motion for class

certification.


judgment shall be filed on or before April 1, 2013no later than 390 days following the

decision on the motion for class certification; any opposition to a motion for summary

judgment shall be filed no later than sixty (60) calendar days thereafter; and any reply brief

in support of a motion for summary judgment shall be filed no later than thirty (30)

calendar days after any such opposition is filed.

n. Joint Pretrial Order. A joint pretrial order shall be filed on or before July

12, 2013.no later than 490 days following the decision on the motion for class certification.

o. Trial Date. Trial shall commence on July 29, 2013, or as ordered by the

Court.





Confidential Material (the “Protective Order”) to be filed by the parties no later than fourteen (14)

calendar days after issuance of this Order. To the extent the Parties produce documents prior to the

entry of a Protective Order, the Parties agree to produce documents pursuant to “attorneys’ eyes

only” restrictions.






Class Actions may be shared with any other defendant. All discovery obtained by any party in any

of the Consolidated Class Actions shall be deemed discovered in each of those actions.





5. Document productions shall be made, so far as practicable, in electronic, searchable

format as requested, subject to the right of any party to inspect the original hard copies. The parties

shall continue to confer on protocols for production of electronically stored information.

Depositions



and the Non-Settling Defendants may notice no more than 75 deposition days, exclusive of expert

depositions and class representative depositions. All parties reserve their rights to seek an increase

or decrease in the number of deposition days depending upon future developments in the action.






Equity/Debt Action, no deposition may be taken for more than one deposition day without consent

of the parties or leave of the Court for good cause shown. A “deposition day” shall consist of one

eight-hour day or two four-hour half days, exclusive of breaks.



cross-examination of a deponent exceeds the time taken for direct examination of that deponent or

unless a party cross-notices a deposition noticed by another party.

9. Plaintiffs’ Executive Committee and Non-Settling Defendants’ counsel shall agree

in advance on a system of numbering deposition exhibits to ensure that unique exhibit numbers,

suitable for use at trial and in all motion papers and other submissions to the Court, are employed.

Dispositive Motions




SO ORDERED.

Dated:_____________, 2011




UNITED STATES DISTRICT COURT SOUTHERN DISTRICT … [Dkt. 0488] Rule 26(f... · UNITED STATES...

Documents

Transcript of UNITED STATES DISTRICT COURT SOUTHERN DISTRICT … [Dkt. 0488] Rule 26(f... · UNITED STATES...