In re PE Corporation Securities Litigation

221 F.R.D. 20, 2003 U.S. Dist. LEXIS 25423, 2003 WL 23329188
CourtDistrict Court, D. Connecticut
DecidedNovember 3, 2003
DocketNo. 3:00cv705(CFD)(TPS)
StatusPublished
Cited by30 cases

This text of 221 F.R.D. 20 (In re PE Corporation Securities Litigation) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re PE Corporation Securities Litigation, 221 F.R.D. 20, 2003 U.S. Dist. LEXIS 25423, 2003 WL 23329188 (D. Conn. 2003).

Opinion

RULING ON DEFENDANTS’ MOTION FOR A PROTECTIVE ORDER

SMITH, United States Magistrate Judge.

The lead plaintiffs, David Berlin and Vinh Voung, on behalf of a class consisting of all persons other than defendants who purchased the common stock of PE Corporation Celera Genomics Group (“Celera” or the “Company”) in a secondary public offering of Celera common stock conducted by PE Corporation (“PE”) on or about February 29, 2000 (the “secondary offering”), commenced this securities class action against the defendants, PE and certain officers and directors, alleging that they violated sections 11, 12(a)(2), and 15 of the Securities Act of 1933. Pending before the court is the Defendants’ Motion for a Protective Order. (Doc. # 60). In virtually all respects, except as noted hereafter, the defendants’ motion is DENIED.

I. Facts

Celera, a subsidiary of PE, began sequencing the human genome in 1999. (Am. Compl.1l 7,17). Its strategy was to sequence the genome and then “use the genomic information derived from its genomic sequencing program as a platform upon which to develop an integrated information and discovery system.” (Id. 1120). To effectuate this strategy, Celera required exclusive patent protection for a period of five years. (See id. H 25). By January of 2000, it announced that it had sequenced 90% of the genome. (Id. H17).

At the same time, other companies were pursuing the same ends; most significantly, the Human Genome Project (the “HGP”), “a worldwide coordinated effort ... sponsored by governments and nonprofit organizations in the United States, England, Japan, and France, among other nations.” (Id. 1118). The HGP intended to make its findings publicly available. As such, a “race” to map the human genome ensued. (Id. H 19). Because Celera’s competitive position was dependant upon its ability to obtain patent protection, it entered into discussions with the HGP regarding a possible collaboration on the project. (Id. 1121, 24). However, such coaction never materialized. (Id.). The plaintiffs argue that because the governments that supported the HGP opposed broad patent protection, such as Celera required, Celera’s “ability to obtain protection from the immediate release of the human genome code, in the face of such opposition, was very attenuated and subject to increased and substantial risk.” (Id. 1126).

On or about February 29, 2000, PE filed with the SEC for a secondary offering. (Id. [22]*22U 32). The prospectas became effective and PE sold over 4 million shares for gross proceeds of approximately $944 million. (Id. K 34). While most of the common stock was purchased for $225.00 per share, it has since significantly decreased in value, now selling for approximately eleven dollars. (Id.).

Generally, the plaintiffs argue that the registration statement and prospectus issued in connection with the secondary offering was materially false and misleading. (Id. 111132-48). They point to several sections of the prospectus that they contend were false and misleading in light of the fact that Celera would unlikely be able to obtain the requisite patent protection due, in large part, to their competition with and inability to collaborate with HGP. As such, the plaintiffs claim that the defendants violated sections 11, 12(a)(2), and 15 of the Securities Act of 1933. (Id. 111150-72).

On July 15, 2003, the plaintiffs served the defendants with document requests. In the present motion, the defendants object to thirteen of the twenty-seven individual requests served. (Ds.’ Mem. Supp. Mot., 8/5/03, at 10-15). They object to eight on the basis that they seek materials that relate gener-ieally in any way to the secondary offering and are therefore irrelevant and unduly burdensome. (Id. at 11-13) (the “Secondary Offering Group”). These include:

Request No. 3: All documents concerning the minutes of regular and special meetings of the Board of Directors of Celera, or any committee thereof or any committee or group which reported to the Board of Directors, concerning the Secondary Offering, including any documents which were the source of any information in any minutes or drafts thereof.
Request No. k: All documents concerning information distributed at any meeting of the Board of Directors of Celera, or any committee thereof, or the members of the Board of Directors in advance of, or subsequent to, any meeting of the Board of Directors or committee thereof, concerning the Secondary Offering.
Request No. 18: All documents concerning the writing of the prospectus or registration statement for the Secondary Offering.
Request No. 19: All documents concerning information contained in the prospectus and the registration [statement], including without limitation, Celera’s belief that it was not competing with the HGP to sequence the human genome.
Request No. 20: All documents concerning communications and information exchanged between Celera and any securities or investment analysts with regards to the Secondary Offering.
Request No. 21: All documents concerning communications between Celera and Bear Ste[a]rns, Goldman Sachs, ING, Morgan Stanley, R & G, Cowen, and Simpson Thacher during the Secondary Offering.
Request No. 22: All documents concerning information furnished, transmitted, sent or written by or to, or generated, authored, received or reviewed by Bear Ste[a]rns, Goldman Sachs, ING, Morgan Stanley, R & G and Simpson Thacher concerning the Secondary Offering.
Request No. 23: All documents concerning due diligence reviews conducted by Bear Ste[a]rns, Goldman Sachs, ING, Morgan Stanley, R & G and Simpson Thacher concerning the Secondary Offering.

In addition, they object to three on the basis that they seek materials that relate gener-ieally in any way to Celera’s business and are therefore irrelevant and unduly burdensome. (Id. at 13-14)(the “Business Group”). These include:

Request No. 7: All documents concerning Celera’s business plan and strategies concerning sequencing the human genome, including without limitation, its ability to receive protection for and/or market, sell or license information derived from its sequencing of the human genome map.
Request No. 8: Analyses, studies, evaluations, memoranda or reports concerning Celera’s efforts to sequence the human genome and use the information derived from such sequencing to carry out its business plans and strategies.
Request No. 15: Analyses, studies, evaluations, memoranda or reports concerning the effect that the HGP’s efforts to se[23]*23quence the human genome would have on Celera’s business plans and strategies.

Finally,' they object to two on the basis that they are overbroad and seek information that is not relevant to any claims or defenses in this case. (Id. at 14-15) (the “Patentylnvesti-gation Group”). These include:

Request No. 16: All documents concerning any communications between Celera and the U.S.

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221 F.R.D. 20, 2003 U.S. Dist. LEXIS 25423, 2003 WL 23329188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-pe-corporation-securities-litigation-ctd-2003.