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The author is U.S. Senior District Judge, Colorado.
To: Junior Law Clerk
From: Judge John L. Kane
Re: GyneTech Litigation
This is a rather heady assignment for your first day on the job, but as you graduated from that prestigious law school at the top of your class, I am sure you are up to it. I need you to review various case-management techniques and legal criteria so that we can begin to connect the tentacles of a number of lawsuits to the head of a forensic squid. Many issues will follow, and we can count on the usual plethora of motions that make the Rules of Civil Procedure look like the Boy Scout Handbook.
Our local rules provide that related cases be assigned to the judge who drew the first case. The relationship is not necessarily a technical one involving joinder and consolidation; it is more a matter of putting one judge in charge of herding the cats. In this particular instance, we drew a whistleblower action against GyneTech Corp. (These cases always involve a race to the courthouse, and that is why it was filed first.) As you soon will discover, this cause of action was favored by Congress and disesteemed by the executive branch. To a government agency, a plaintiff in a qui tam action is about as welcome as an illegitimate child at a family picnic. Nevertheless, we will admit paternity and defer naming until the baptism.
Before writing your memo to me, you need to study the complaint and review the standing and pleading requirements that the defense will likely raise. As discovery ensues, we will confront related issues. The defendant undoubtedly will assert that the plaintiff was not the original source of information about GyneTech providing the government with false claims. If the case has legs, the government may intervene, and then you will soon learn what being ponderous is all about.
Inevitably, a class-action complaint will be filed on behalf of GyneTech’s investors to recover the plummeting value of their shares. There’s hardly ever a problem with the numerosity requirement when the defendant is a publicly held company. But another class action may be filed on behalf of the human guinea pigs in GyneTech’s drug trials. So you will need to review our circuit’s rather quirky views on this issue. At this stage, I don’t want you to narrow your focus. Cover the basic elements, and we will return to more in-depth analysis when the contagion of the Iqbal, Telabs, and Twombly trilogy infects our docket with motions to dismiss. (If somehow you missed those cases in your law-school curriculum—a likely result of the academic neglect of pleading—you should master them now, and then we can discuss their clumsy attempt to deal with yet another inadequacy of the Rules of Civil Procedure.) You also will need to review and prepare a summary of the Private Securities Litigation Reform Act, which, to continue the medical metaphor, I feel confident will suppurate.
It is difficult so early in this mélange of litigation to predict what the lawyers will do, but I think you need to become familiar with derivative actions, corporate and director mismanagement claims, and possibly even a Unocal claim because I read in the newspaper that the former CEO, Michael Bass, has moved to MedaStar, GyneTech’s major competitor. We might even get into one of those key man/trade secret cases, but it is again too early to tell. What is fairly apparent, however, is that Mr. Bass has stepped in a huge bucket of kimchi (I think that is a technical legal term), and I don’t think he can count on his former colleagues at GyneTech to bail him out.
I assume the SEC and the Department of Justice will be sniffing around this turmoil. If so, Bass personally is most likely to take the hit. You need to bone up on his possible invocation of the privilege against self-incrimination, motions for protective orders, and whether and how much we must defer to any ongoing criminal investigations as they affect discovery in the civil cases.
According to the media, Bass’s previously devoted spouse is suing him for divorce. We might become involved tangentially in some domestic discovery disputes, and you should prepare to deal with spousal privilege issues. There are many desirable perquisites for federal judges, not the least of which is that we don’t do divorce. My bedtime prayers always include special thanks for our limited jurisdiction and hopes for the continued health of my state-court colleagues.
Apart from the corporate shenanigans, there may be a product liability case against Toyota. If it is filed in state court, Toyota will remove to federal court. Assuming the defense lawyers don’t mess up the strictly construed removal, we should have some interesting issues about standing and survival statutes. That case probably will settle after a fortune is spent on discovery, and we then will have to deal with all kinds of bizarre efforts to seal everything and pretend the case never happened. But that can of worms will not spill until after you have finished your clerkship and joined the ranks of noble warriors in other battles.
Now for the exciting part, which is the reason I assume you opted to clerk for a district judge instead of a more prestigious spot on a court of second conjecture. Because we must coordinate the management of several cases that in all probability cannot be consolidated, we have an opportunity to push the judicial envelope ever so slightly forward. Traditionally, Federal Rule of Civil Procedure 1, the stated purpose of which is to secure the just, speedy, and inexpensive determination of every action, has been considered more wistful than effectual. Recently, however, a few cases give it more brio than bluster as a basis for effective case management.
As soon as the players in these cases are known and service of process is accepted by or accomplished on most, if not all, the parties, we can issue an order staying all discovery and motion practice until further order. We then can convene a pre-
scheduling conference under Rule 1, not Rule 16, because the purpose will be to produce not a mandated scheduling order, but rather an omnibus case-management order. Indeed, several scheduling orders will be in the offing, but discovery and motion practice should be coordinated in all of them because there is no sense in plowing the same field more than once. Due-process notice of the items to be covered at the conference will be given to all counsel in all cases, and we should also invite them to suggest other matters to add to the agenda.
At the conference, we first will need to consider whether one or more of the cases will require class-action treatment and, if so, what kinds of class actions are contemplated. The beauty contest then will commence to see who will end up as lead counsel and liaison counsel and what accounting and record keeping for possible attorney fees will be required. If, rather than or in addition to two class actions, a number of separate plaintiff or mass plaintiff cases are filed or planned, we should consider notifying the multidistrict litigation panel and request conditional transfer orders.
Because of the strong possibility that some devious lawyers might wish to file their cases in state court so as to avoid the mincing demands of federal practice, we will consider appointment of a special master to handle discovery. If we follow that course, we will notify the state courts that a coordinated discovery system is in place so that the state judges can consider appointing the same special master for whom our litigants will pay. The special master’s duties might well include taking testimonial depositions that will be available for use in various jurisdictions, using a unified exhibit numbering system, issuing generic interrogatories, and establishing a common data bank. This is an attractive offer for overburdened state-court judges. Once the lawyers get over the fact that this method is an innovation, past experience suggests they may even like it.
Your primary responsibility will be the one I warned you about when I selected you. At my age, I am a Luddite. I don’t own a BlackBerry or iPhone or any other such gadget. You will be my lifeline to this age of electronic dither, and you will need to translate all that garbled nattering into printed English prose. (A glossary will help.) As always, our communications are strictly confidential. Otherwise, I would have no one to talk to, and you would be out of a job.