BRIEF SUMMARY OF WORK PERFORMED BY PLAINTIFFS' COUNSEL
2001 - 2009
In re IPO Securities Litigation, 21 MC 92
During the course of this litigation, in which 309 separate class actions were coordinated for pre-trial purposes in 2001, plaintiffs' counsel performed numerous time-intensive tasks. These coordinated proceedings stand as one of the largest and most complex prosecutions ever undertaken in the Southern District of New York. Plaintiffs' Counsel have collectively reported lodestar of more than $400 million, representing more than one million hours devoted to this litigation. A non-exclusive summary of the tasks performed by Plaintiffs' Counsel is set forth below.
INITIAL AND AMENDED COMPLAINTS: From January to December 2001, approximately seventy plaintiffs' firms in total filed more than one thousand class action complaints in the Southern District of New York on behalf of approximately 1,000 investors against 300+ companies that held initial public offerings ("IPOs"), and in some instances, follow-on offerings from 1998 through 2000, and certain of their officers and directors (totaling approximately 1,000) (the "Issuer Defendants") and fifty-five of the largest and most prominent investment banking firms that underwrote certain IPOs (the "Underwriter Defendants"). Defendants in this action were represented by more than 100 law firms.
On April 19, 2002, the Executive Committee filed 300+ amended complaints plus a set of "Master Allegations." The "Master Allegations" consisted of more than 100 pages of pleadings common to each of the amended complaints plus particularity as to the major Underwriter Defendants and particularity as to each offering (as supplemented).
UNDERWRITER DEFENDANTS' MOTION SEEKING RECUSAL OF JUDGE: In 2001, certain Underwriter Defendants filed a motion seeking recusal of the judge in this litigation, which Plaintiffs' Counsel successfully opposed. The Underwriter Defendants then appealed the Court's ruling but lost the appeal.
MOTIONS TO DISMISS: The Underwriter Defendants and Issuer Defendants moved to dismiss these actions in their entirety on July 1, 2002 and July 15, 2002, respectively. Extensive briefing was submitted by counsel for the parties and the Court heard oral arguments over two days. The Court denied the motions to dismiss in substantial part.
DISCOVERY: Once the Court had considered and ruled on Defendants' motions to dismiss, permitting discovery to proceed, Plaintiffs and the Underwriter Defendants entered into what was then a groundbreaking "Joint Proposed Electronic Data Preservation Protocol." Plaintiffs and the Defendants also negotiated and implemented a detailed and complex Deposition Protocol to efficiently govern the taking of depositions.
In order to efficiently manage the voluminous document production and to effectively target the key players at each of the major Underwriters, Issuers and third parties, Plaintiffs' Executive Committee rented commercial space, and established a discovery repository. For approximately 4 years, this space housed approximately 100 legal personnel, under the supervision of the Executive Committee. Personnel at this location consisted of attorneys from approximately 30 plaintiffs' law firms, as well as paralegals, financial analysts and support personnel.
Although much of the discovery concentrated on 17 "focus" cases selected to streamline the proceedings, certain discovery, by necessity, involved each of the charged securities in the offerings in the 300+ cases and numerous other uncharged securities offerings involving the same Underwriter Defendants.
In total, plaintiffs' counsel reviewed nearly 30 million pages of electronic and hard copy discovery produced by defendants, plus voluminous trading records. Hundreds of third parties were subpoenaed which resulted in 340 third parties making production. Approximately 145 depositions were taken at various locations throughout the United States and overseas, including 12 experts, each of whom produced extensive expert reports. Plaintiffs' counsel also responded to extensive discovery promulgated by the defendants including the production of thousands of pages of documents, responding to detailed interrogatories and the taking of numerous depositions of various Plaintiffs.
Numerous disputes arose throughout the discovery phase of the litigation, many of which required written submissions to and/or oral argument before the Court or one of the Court-appointed special masters.
CLASS CERTIFICATION: Plaintiffs filed an Omnibus Motion for Class Certification on September 2, 2003. Briefing was completed on the motion in April 2004 following various supplemental submissions. Collectively, the written submissions were comprised of thousands of pages. Oral argument on the motion for class certification consisted of a virtually full day hearing. The Court granted Plaintiffs' motion for Class Certification and certified six Class Certification Focus Classes on October 13, 2004.
The Underwriter Defendants sought interlocutory review by the Court of Appeals for the Second Circuit of the Court's granting of class certification pursuant to Rule 23(f) of the Federal Rules of Civil Procedure, which required extensive briefing. Once interlocutory review was granted, additional extensive briefing and oral argument were presented to the Second Circuit, which vacated the District Court's order certifying the six classes and published its decision, Miles v. Merrill Lynch & Co., 471 F.3d 24 (2d. Cir 2006) on December 5, 2006, changing the course of years of class certification jurisprudence and decertifying the six classes.
Plaintiffs' counsel timely requested rehearing by the Panel, or alternatively, en banc, arguing that the Second Circuit had, among other things, misapplied or misunderstood the law, misapprehended Plaintiffs' arguments and misapprehended the securities marketplace upon which it had opined. By order dated April 6, 2007, the Second Circuit denied Plaintiffs' petition for rehearing, yet issued a clarifying opinion, confirming that Plaintiffs could reapply for class certification of a more "modest" and streamlined class than initially sought. Miles v. Merrill Lynch & Co., 2007 U.S. App. LEXIS 8955 (2d. Cir. 2007).
On August 14, 2007, Plaintiffs amended the six Class Certification Focus Cases defining a more "modest" set of classes in accordance with the Second Circuit's opinion, and on September 27, 2007, moved for class certification of three narrowly tailored classes in each of the six Class Certification Focus Cases. The Underwriter Defendants again submitted thousands of pages of briefs, affidavits, exhibits and expert reports in opposition to Plaintiffs' motion to certify these classes. The Underwriter Defendants submitted 7 expert reports in opposing class certification in 2004. Supplemental reports followed the Court's particularized inquiry. In 2007, the Issuer Defendants joined in opposing Plaintiffs' motion for class certification. Expert depositions proceeded apace in 2007- 2008 of the 11 experts Defendants' collectively proffered and Plaintiffs' single expert.
Plaintiffs' Motion for Class Certification was sub judice when the instant settlement was reached.
ISSUER SETTLEMENT: In 2003, Plaintiffs and the Issuer Defendants commenced settlement negotiations. A former federal district court judge presided over those negotiations which ensued over many months. Plaintiffs and the Issuer Defendants ultimately reached an agreement to settle plaintiffs' claims against the Issuer Defendants in almost all of the pending actions. Counsel for the parties then worked for many months to document and submit the settlement to the Court for preliminary approval. The Court preliminarily approved that settlement in 2004, and notice was distributed to the classes. That settlement, however, was withdrawn by the parties in 2007 due to the ruling of the Second Circuit regarding plaintiffs' motion for class certification (see above).
GLOBAL SETTLEMENT: In 2008, all parties agreed to participate in a mediation to assess the extent to which a global resolution of this coordinated litigation might be reached. Two former judges, including the former federal judge who had presided over the proposed Issuer Settlement, presided over the mediation process which ensued over many months and required the interaction of teams of lawyers working on behalf of each set of parties. Once an agreement in principle had been reached, counsel for the parties worked for many more months to negotiate and finalize the necessary papers to document the settlement and prepare its submission for Court review. In the Spring of 2009, the proposed Global Settlement, now pending before the Court, was submitted for preliminary approval by the Court which was granted in June 2009.