Ninth Circuit Allows Intervention to Preserve Deposition
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The termination of litigation does not preclude a subsequent motion to intervene to modify a protective order. The U.S. Court of Appeals for the Ninth Circuit held that the U.S. District Court for the Central District of California did not abuse its discretion by modifying an original protective order to place the plaintiff’s deposition in escrow rather than destroying it in accordance with the original protective order’s terms.
Underlying State and Federal Actions
In Blum v. Merrill Lynch Pierce Fenner & Smith Inc. [PDF] the plaintiff sued Merrill Lynch Pierce Fenner & Smith Inc. (Merrill Lynch) and Thomas Mazzucco, alleging that advice in connection with an initial public offering of Buy.com was faulty (the federal action). In 2004, a blanket protective order was issued that required the parties to destroy all confidential documents, including the plaintiff’s deposition testimony, at the end of the litigation. The parties settled the federal action in 2005.
In 2009, plaintiff sued KPMG in state court, alleging that but for KPMG’s advice he would have sold all of his shares in Buy.com in 1998 for $400 million (the state action). Although plaintiff acknowledged the existence of his earlier deposition transcript, he refused to produce it. KPMG’s counsel obtained a copy of the transcript from the court reporting service that transcribed the deposition.
In 2011, plaintiff filed an emergency ex parte motion in the federal action requesting that it be reopened and the district court order KPMG to destroy the transcript in compliance with the protective order and settlement agreement. The following day KPMG filed an ex parte motion to intervene to oppose plaintiff’s motion. Ultimately, the district court reopened the case, granted KPMG’s motion to intervene, and modified the protective order to have the transcript placed in escrow rather than destroyed. Plaintiff subsequently dismissed the state action against KPMG without prejudice.
Read original articleTags: Merrill Lynch Pierce Fenner & Smith, Merrill Lynch Pierce Fenner & Smith Inc., protective order
