Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc.

124 F.R.D. 75, 1989 U.S. Dist. LEXIS 1463, 1989 WL 12217
CourtDistrict Court, S.D. New York
DecidedFebruary 16, 1989
DocketNo. 86 Civ. 6447 (JMC)
StatusPublished
Cited by19 cases

This text of 124 F.R.D. 75 (Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc., 124 F.R.D. 75, 1989 U.S. Dist. LEXIS 1463, 1989 WL 12217 (S.D.N.Y. 1989).

Opinion

MEMORANDUM AND ORDER

CANNELLA, District Judge:

Plaintiff’s objections to the magistrate’s orders of January 3rd and 10th and February 1st are dismissed. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(a).

BACKGROUND

Plaintiff Litton Industries, Inc. [“Litton”], commenced this action by the filing of a summons and complaint on August 19, 1986. The complaint was amended on September 25, 1986, and again on July 7, 1987. The second amended complaint asserts claims for damages based, inter alia, on defendants’ alleged violations of federal and state securities laws.

The second amended complaint alleges that defendants, other than Lehman Brothers, based on their inside knowledge of Litton’s plans to acquire Itek Corporation [“Itek”], purchased, on the open market, over 60,000 shares of Itek common stock. The complaint further alleges that defendants’ trading caused Litton to pay $30 million more to acquire Itek than it would have absent their trading.

The action was assigned to Magistrate Nina Gershon for purposes of supervising discovery. Magistrate Gershon, at a status conference on November 9, 1988, issued a scheduling order setting February 15, 1989 as the date by which all fact discovery was to be completed. Expert discovery was to be conducted during March and April. In addition, a settlement conference- was scheduled for December 13, 1988. Settlement conferences were held on December 13 and 14, 1988, but the parties were unable to resolve the action. Magistrate Gershon, however, stated that, in her view, the most significant impediment to settlement appeared to be the parties differing opinions as to Litton’s ability to prove causation and damages. Magistrate Gershon, therefore, suggested that Dr. Grossman, Litton’s expert witness on the issue of damages, should be deposed as soon as possible rather than in March and April as previously scheduled.

The issue of advancing the date of Dr. Grossman’s deposition was raised for a second time at a status conference held before the magistrate on December 22, 1988. At that conference Litton complained that advancing the date of Dr. Grossman’s deposition was unfair as the deposition dates of defendants’ experts were not being advanced as well. Defendants agreed to advance the dates for deposing Professor Fischel and Professor Hausman, their central experts on the issue of damages. Magistrate Gershon instructed the parties to agree on new dates for the depositions or to report to her immediately if they were unable to do so. Thereafter, Litton informed the magistrate that it would not agree to make Dr. Grossman available at an earlier date.

On January 3, 1989, Magistrate Gershon issued an order amending the November [77]*779th scheduling order and directing the parties to report the new dates of the depositions at the conference scheduled for January 10th. Litton, upon learning of the order, wrote to Magistrate Gershon objecting to the acceleration of Dr. Grossman’s deposition. At a hearing held before the magistrate on January 10th, Litton argued that advancing the date of Dr. Grossman’s deposition would prejudice it in its trial preparation and presentation. In addition, Litton claimed that it would be prejudiced by having to present the entirety of its expert case on damages while defendants were being allowed to withhold five of their seven experts for deposition at a later date. Defendants, on the other hand, agreed that the dates for the depositions should be accelerated. Defendants argued that not only would earlier depositions promote settlement but, in addition, depending on what was learned during Dr. Grossman’s deposition a substantial number of depositions would not be needed at all.

At the conclusion of the arguments, Magistrate Gershon found that accelerating the date of the depositions was necessary “[n]ot only to facilitate settlement, but to discourage wasteful pretrial activities, which certainly discovery, fact expert discovery, would be if it turned out that expert discovery would lead to a settlement.” See Affidavit of Jeanne M. Luboja, Exh. G at 15, 86 Civ. 6447 (JMC) (S.D.N.Y. Jan. 23, 1989). Magistrate Gershon then directed the parties to indicate, on the record, new dates for the depositions. Litton, however, informed the magistrate that Dr. Grossman would only be available on the originally scheduled dates in March and April. Magistrate Gershon, therefore, ordered that Dr. Grossman’s deposition be taken during the week of January 23rd. The magistrate further ordered that the depositions of Professors Fischel and Hausman be taken in the two weeks following Dr. Grossman’s deposition. In addition, Litton was directed to inform defendants, by January 13th, whether Dr. Grossman would be available to begin his deposition on Monday, January 23rd or Tuesday, January 24th.

Litton failed to inform defendants of Dr. Grossman’s availability. On January 13th, Litton filed a notice of motion with the Court objecting to the magistrate’s orders advancing the date of Dr. Grossman’s deposition. Moreover, Litton informed defendants that Dr. Grossman would not be produced for deposition on either January 23rd or 24th. On January 24th, defendants filed a notice of motion, before Magistrate Gershon, seeking sanctions for Litton’s failure to comply with the magistrate’s orders. On February 1, 1989, Magistrate Gershon held a hearing on the motion for sanctions. After hearing arguments from both sides, Magistrate Gershon found that Litton’s motion to the Court objecting to the January 3rd and 10th Orders had not stayed Litton’s obligations under those orders. In addition, Magistrate Gershon found that Litton, without legal justification, had failed to comply with the January 3rd and 10th Orders. Magistrate Gershon, however, deferred ruling on defendants’ request for sanctions and ordered Litton to produce Dr. Grossman for deposition on February 10, 1989.

Magistrate Gershon expressly informed Litton that in the absence of a stay the deposition would have to go forward. Thereafter, Litton, by an ex parte order to show cause, sought a stay of the magistrate’s February 1st Order. United States District Judge Leonard B. Sand, acting in his capacity as Part I Judge, adjourned the deposition of Dr. Grossman to February 21st unless the Court, in deciding the motion on the merits, held otherwise. Finally, Litton has filed a motion with the Court objecting to the magistrate’s February 1st Order.

DISCUSSION

Appeals from decisions of magistrates are subject to the clearly erroneous standard of review. 28 U.S.C. § 636(b)(1)(A). In the past, the Court has held that “in resolving discovery disputes, the Magistrate is afforded broad discretion, which will be overruled only if abused.” Citicorp v. Interbank Card Ass’n, 478 F.Supp. 756, 765 (S.D.N.Y.1979); see also Detection System, Inc. v. Pittway Corp., 96 F.R.D. 152, 154 (W.D.N.Y.1982) (citing Citicorp, [78]*78478 F.Supp. at 765); Empire Volkswagen, Inc. v. World-Wide Volkswagen, 95 F.R.D. 398, 399 (S.D.N.Y.1982) (same).

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Cite This Page — Counsel Stack

Bluebook (online)
124 F.R.D. 75, 1989 U.S. Dist. LEXIS 1463, 1989 WL 12217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/litton-industries-inc-v-lehman-bros-kuhn-loeb-inc-nysd-1989.