Opinion
Master Derivative Docket No. 1:03-CV-00955-SEB-WTL
November 5, 2003
Order Appointing Lead Derivative Plaintiff and Counsel
On September 19, 2003, the court granted provisionally the motion to consolidate six Guidant Corporation shareholder derivative actions before it, "pending the establishment of a structure for lead counsel, the naming of lead plaintiffs) and the filing of an amended complaint." In response to the court's directive, all of plaintiffs' counsel met in an attempt to create an organizational structure that would be amenable to the many parties and that would provide for the effective and efficient prosecution of the case. Dissenting views persisted, however, and on October 3, 2003, the Alaska Electrical Pension Fund ("Alaska") filed a Motion to Appoint Lead Derivative Plaintiff and Lead Counsel. Given the plaintiffs' impasse, we enter the following rulings:
1. We adopt generally the executive committee structure proposed by the IBEW/Ritter Lead Plaintiffs' Group, but name Alaska lead plaintiff as well as Alaska's counsel, Darren J. Robbins of Milberg Weiss Bershad Hynes Lerach, LLP ("Milberg Weiss"), lead counsel and chairperson of the executive committee.
Persuasive authority counsels in favor of naming a large, institutional investor such as Alaska lead plaintiff. Not only does Alaska hold the greatest number of Guidant common shares of any of the proposed lead plaintiffs, but the thoroughness of its pleadings also demonstrates that Alaska and its counsel have the interest and the resources to vigorously prosecute the lawsuit. See, e.g., In re Conseco, Inc. Derivative Litig., 120 F. Supp.2d 729, 734 (S.D. Ind. 2000) (arguing by analogy to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(3)(B)). In addition, Alaska is unquestionably diverse to all of the named defendants whereas the citizenship of the IBEW/Ritter Lead Plaintiffs' Group raises some potentially disqualifying jurisdictional questions.
2. We approve a management approach whereby duties are allocated to subcommittees created to assume responsibility for discrete components of the litigation, including, for example, discovery, briefing, and settlement negotiations. We do not intend, by this structure, to multiply costs; rather, we intend that smaller groups will undertake various tasks as a means of avoiding duplication of efforts and allowing for an expedited pace in this litigation, thereby minimizing costs. We anticipate that the structure and duties of these committees as initially proposed by the IBEW/Ritter Lead Plaintiffs' Group will be recast in light of the naming of Milberg Weiss lead counsel. We leave to lead counsel the final say on structuring the executive committee, though we expect all plaintiffs and plaintiffs' counsel to be involved and to work together amicably to manage the litigation.
3. We accept Alaska's request that James Buddenbaum of the law firm Parr Richey Obremskey Morton and Irwin Levin of the law firm Cohen Malad serve as co-liaison counsel. We ask that liaison counsel, in consultation with lead counsel, provide the court with a description of their respective duties and areas of responsibility to enable the court to communicate efficiently as needs arise.
4. We direct the plaintiffs to finalize and to implement their organizational structure with dispatch in order to allow for expeditious completion of the business for which it was formed, including the filing of an amended, consolidated complaint as well as responsive briefing to any motions to dismiss. We remind all plaintiffs that the purpose of the committee structure is to streamline this litigation; we expect the parties to collaborate to avoid unnecessary duplication of efforts, to control fees and expenses, and to minimize disagreements among themselves should any arise.