Opinion
MDL Docket No. 1500, ALL CASES
February 28, 2003
ORDER
Lead Plaintiff the Minnesota State Board of Investment moves for a limited modification of the automatic stay of discovery imposed pursuant to Section 21D(b)(3)(B) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995 ("PSLRA"), 15 U.S.C. § 78u-4(b)(3)(B), to permit it to obtain copies of certain documents and materials which Defendants AOL Time Warner, Inc., Time Warner, and AOL have produced to any committee of the legislative branch of the United States government or to any entity of the executive branch, including the Department of Justice and the Securities and Exchange Commission ("SEC"), which are investigating conduct by the Defendants that is the subject of the case before this Court.
The PSLRA contains the following stay of discovery provision:
In any private action arising under this chapter, all discovery and other proceedings shall be stayed during the pendency of any motion to dismiss, unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.15 U.S.C. § 78u-4(b)(3)(B) (emphasis supplied). In other securities class actions involving concurrent investigations by governmental agencies, courts have lifted the PSLRA automatic stay of discovery in order to allow plaintiffs to obtain copies of documents previously provided to those agencies. See, e.g., In re WorldCom, Inc. Sec. Litig., 234 F. Supp.2d 301 (S.D.N.Y. 2002) (motion for partial lifting of automatic stay granted to allow discovery of documents provided to Department of Justice and SEC by related non-party); In re Enron Corp. Sec. Derivative "ERISA" Litig., No. MDL 1446, 2002 WL 31845114 (S.D.Tex. Aug. 16, 2002) (limited production allowed as to materials already made available to numerous governmental entities).
The Court finds that Lead Plaintiff the Minnesota State Board of Investment "[is] not in any sense engaged in a fishing expedition or an abusive strike suit" and would be substantially prejudiced by the maintenance of the stay. See In re WorldCom, Inc. Sec. Litig., 234 F. Supp.2d at 306. The requested discovery has already been produced by Defendants and providing a copy to Lead Plaintiff will not constitute a burden upon them. Accordingly, Lead Plaintiff the Minnesota State Board of Investment's motion for a limited modification of the automatic stay of discovery is granted with regard to copies of certain documents and materials which Defendants AOL Time Warner, Inc., Time Warner, and AOL have produced to any committee of the legislative branch of the United States government or to any entity of the executive branch, including the Department of Justice and the SEC.
SO ORDERED.