Ferrari, et al v. Accredo Health, Inc., et al

MOTION in Limine Lead Plaintiffs' Motion in Limine #19 to Preclude Defendants from Introducing Evidence of the Price or Movement of Accredo Securities After the Statutory 90-Day "Look Back" Period

W.D. Tenn.September 8, 2008

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION In re ACCREDO HEALTH, INC. SECURITIES LITIGATION This Document Relates To: ALL ACTIONS. ) ) ) ) ) ) ) ) Civil Action No. 03-2216-BBD CLASS ACTION LEAD PLAINTIFFS’ MOTION IN LIMINE #19 TO PRECLUDE DEFENDANTS FROM INTRODUCING EVIDENCE OF THE PRICE OR MOVEMENT OF ACCREDO SECURITIES AFTER THE STATUTORY 90-DAY “LOOK BACK” PERIOD Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 1 of 11 - 1 - Lead Plaintiffs, Louisiana School Employees’ Retirement System and Debra Swiman (together, “Lead Plaintiffs”) and the Class of investors who purchased Accredo stock between June 16, 2002 and April 7, 2003, respectfully ask the Court to prohibit Defendants from introducing evidence of the price or movement of Accredo securities after the statutory 90-day “look back” period set forth in 15 U.S.C. 78u-4(e). Defendants should be precluded from offering evidence of the price or movement of Accredo common stock following July 7, 2003, the last day of the statutory 90-day “look back” period set forth in 15 U.S.C. 78u-4(e). Lead Plaintiffs expect Defendants will argue at trial that positive movements of Accredo stock following that date, including Accredo’s acquisition by MedCo Health Solutions, Inc. on August 18, 2005, somehow inoculate their fraudulent behavior during the Class Period or minimize the damages suffered by investors. Evidence of Accredo’s stock price movement after July 7, 2003 is irrelevant to any issue in this case, including the core issue of whether Defendants made false and misleading statements during the Class Period. Further, there is no evidentiary foundation for the notion that Accredo’s stock price or movement long after the underlying events says anything at all about Defendants’ wrongdoing in this case. As discussed below, the stock trading history for the 90 days following the April 8, 2003 corrective disclosure that ends the Class Period in this case is relevant for the sole purpose of calculating and limiting the Class’ recoverable damages. 15 U.S.C. 78u-4(e). Yet, evidence regarding post-July 7, 2003 price or movements of Accredo securities may be misleading to a jury and unfairly prejudicial, especially if Defendants suggest that those price movements somehow vindicate their prior fraudulent actions. The minimal probative value is substantially outweighed by the unfair prejudicial effect of such argument. See Fed. R. Evid. 403. Therefore, all such evidence and all arguments based on such evidence should be precluded. Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 2 of 11 - 2 - Evidence of Accredo’s stock price movement through July 7, 2003, is relevant for one reason and one reason only: to calculate damages under the “look back” provision of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(e)(1), which limits damages to the difference between the purchase price and the mean trading price of the security during the 90-day period beginning on the day of the corrective disclosure. 1 July 7, 2003 is the last day of the 90-day period following the revelation on April 8, 2003 that Accredo had not adequately reserved for the A/R of the SPS acquisition. 1 15 U.S.C. § 78u-4(e) provides as follows: (e) Limitation on damages (1) In general Except as provided in paragraph (2), in any private action arising under this title . . . in which the plaintiff seeks to establish damages by reference to the market price of a security, the award of damages to the plaintiff shall not exceed the difference between the purchase or sale price paid or received, as appropriate, by the plaintiff for the subject security and the mean trading price of that security during the 90-day period beginning on the date on which the information correcting the misstatement or omission that is the basis for the action is disseminated to the market. (2) Exception In any private action arising under this title . . . in which the plaintiff seeks to establish damages by reference to the market price of a security, if the plaintiff sells or repurchases the subject security prior to the expiration of the 90-day period described in paragraph (1), the plaintiff’s damages shall not exceed the difference between the purchase or sale price paid or received, as appropriate, by the plaintiff for the security and the mean trading price of the security during the period beginning immediately after dissemination of information correcting the misstatement or omission and ending on the date on which the plaintiff sells or repurchases the security. (3) Definition For purposes of this subsection, the “mean trading price” of a security shall be an average of the daily trading price of that security, determined as of the close of the market each day during the 90-day period referred to in paragraph (1). Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 3 of 11 - 3 - Defendants offer no evidence or expert testimony – nor could they – regarding how the Company’s stock would have traded following July 7, 2003. Absent an expert opinion evidencing how the stock market and Accredo’s sector in general has moved since July 7, 2003 and whether or not Accredo’s stock has tracked those movements, Defendants’ reference to Accredo’s stock price following the 90-day statutory “look back” period is devoid of probative value and much more likely to confuse and mislead, rather than help, the jury. See Fed. R. Evid. 403. Moreover, there is no factual foundation for the argument that Accredo’s stock price after July 7, 2003 indicates in any respect that Defendants did (or did not) violate the federal securities laws. Without such a foundation, Accredo’s stock price and arguments based on it are irrelevant and highly prejudicial – suggesting to the jury, without any evidentiary foundation, that Accredo’s stock price movements long after the Class Period and statutorily delineated “look back” period should somehow permit Defendants to escape liability. Accordingly, Lead Plaintiffs respectfully request that the Court enter an order precluding Defendants from offering evidence of the price or movement of Accredo securities after July 7, 2003, the last day of the statutory 90-day “look back” period set forth in 15 U.S.C. 78u-4(e). DATED: September 8, 2008 Respectfully submitted, COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP MARK SOLOMON TOR GRONBORG JONAH H. GOLDSTEIN DAVID W. MITCHELL TRIG R. SMITH NATHAN W. BEAR s/ TOR GRONBORG TOR GRONBORG Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 4 of 11 - 4 - 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP BLAIR A. NICHOLAS TIMOTHY A. DELANGE BRETT M. MIDDLETON MATTHEW P. JUBENVILLE 12481 High Bluff Drive, Suite 300 San Diego, CA 92130 Telephone: 858/793-0070 858/793-0323 (fax) Co-Lead Counsel for Plaintiffs GLASSMAN, EDWARDS, WADE & WYATT, P.C. B.J. WADE, #5182 26 N. Second Street Building Memphis, TN 38103 Telephone: 901/527-4673 901/521-0940 (fax) Liaison Counsel C:\Program Files\DocsCorp\pdfDocs PDF\users\MicheleH\Import\brf00053896 mil13.doc Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 5 of 11 CERTIFICATE OF SERVICE I hereby certify that on September 8, 2008, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I have mailed the foregoing document or paper via the United States Postal Service to the non-CM/ECF participants indicated on the attached Manual Notice List. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on September 8, 2008. s/ TOR GRONBORG TOR GRONBORG COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-3301 Telephone: 619/231-1058 619/231-7423 (fax) E-mail:torg@csgrr.com Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 6 of 11 Mailing Information for a Case 2:03-cv-02216-BBD-gbc Electronic Mail Notice List The following are those who are currently on the list to receive e-mail notices for this case. George E. Barrett gbarrett@barrettjohnston.com Nathan W. Bear NBear@csgrr.com,stremblay@csgrr.com Saul C. Belz sbelz@glankler.com,apospisil@glankler.com Paul Kent Bramlett pknashlaw@aol.com Linda F Burnsed lburnsed@cbslawyers.net Karen M. Campbell kcampbell@appersoncrump.com F. Guthrie Castle , Jr fgc@castle-law.com Stanley M. Chernau s.chernau@chernau.com Timothy A. DeLange timothyd@blbglaw.com,brettm@blbglaw.com,samj@blbglaw.com,kristinas@blbglaw.com,matthewj@blbglaw.com Amy Ferguson Dudek adudek@glankler.com,apospisil@glankler.com Jef Feibelman jfeibelman@bpjlaw.com,cbiscoe@bpjlaw.com Tor Gronborg torg@csgrr.com,e_file_sd@csgrr.com Douglas F. Halijan dhalijan@bpjlaw.com,mmarshall@bpjlaw.com Dixie W. Ishee woodcarltonishee@bellsouth.net Page 1 of 5CM/ECF - U.S. District Court:tnwd 9/8/2008https://ecf.tnwd.uscourts.gov/cgi-bin/MailList.pl?900591460987994-L_470_0-1 Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 7 of 11 Matthew P. Jubenville matthewj@blbglaw.com Emily C. Komlossy ekomlossy@faruqilaw.com Quitman Robins Ledyard , II bledyard@borodandkramer.com Brett M. Middleton brettm@blbglaw.com Timothy L. Miles tmiles@barrettjohnston.com David W. Mitchell davidm@csgrr.com Blair N. Nicholas blairn@blbglaw.com Russell F.A. Riviere russellr@blbglaw.com Kevin Hunter Sharp ksharp@dsattorneys.com Scott N. Sherman scott.sherman@alston.com Gary K. Smith gsmith@appersoncrump.com,clunsford@appersoncrump.com,kcampbell@appersoncrump.com Trig R. Smith trigs@csgrr.com Mark D. Trainer mark.trainer@alston.com B. J. Wade bwade@gewwlaw.com Allison Wannamaker wannamakera@thomasonlaw.com Kelly C. Wilcove kelly.wilcove@alston.com,valerie.nouman@alston.com Manual Notice List Page 2 of 5CM/ECF - U.S. District Court:tnwd 9/8/2008https://ecf.tnwd.uscourts.gov/cgi-bin/MailList.pl?900591460987994-L_470_0-1 Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 8 of 11 The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients. Ramzi Abadou LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 655 West Broadway Suite 1900 San Diego, CA 92101 Guri Ademi ADEMI & O'REILLY, LLP 3620 East Layton Ave. Cudahy, WI 53110 Shpetim Ademi ADEMI & O'REILLY, LLP 3620 East Layton Ave. Cudahy, WI 53110 Lauren S. Antonino CHITWOOD & HARLEY 1230 Peachtree St., N.E. 2900 Promenade II Atlanta, GA 30309 Peter Q. Bassett ALSTON & BIRD 1201 West Peachtree St. Atlanta, GA 30309-3424 Javier Bleichmar BERNSTEIN LITOWITZ BERGER & GROSSMAN 1285 Ave of the Americas 38th Floor New York, NY 10019 Martin D. Chitwood CHITWOOD HARLEY & HARNES LLP 1230 Peachtree St., N.E. 2900 Promenade II Atlanta, GA 30309 Patricia A. Connell ERNST & YOUNG 5 Times Square New York, NY 10036-6530 Gregory M. Egleston BERNSTEIN LIEBHARD & LIFSHITZ, LLP 10 East 40th Street New York, NY 10016 Nadeem Faruqi FARUQI & FARUQI, LLP 369 Lexington Avenue 10th Floor New York, NY 10017 Page 3 of 5CM/ECF - U.S. District Court:tnwd 9/8/2008https://ecf.tnwd.uscourts.gov/cgi-bin/MailList.pl?900591460987994-L_470_0-1 Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 9 of 11 Mark C. Gardy ABBEY GARDY, LLP 212 East 39th St. New York, NY 10016 Carol V. Gilden MUCH SHELIST FREED DENENBERG AMENT & RUBENSTEIN, P.C. 191 N. Wacker Dr. Ste. 1800 Chicago, IL 60606-1615 Karen M. Hanson LOCKRIDGE GRINDAL NAUEN, PLLP 100 Washington Ave., South Ste. 2200 Minneapolis, MN 55401 Ronald B. Hauben ERNST & YOUNG 5 Times Square New York, NY 10036-6530 Marc S. Henzel LAW OFFICES OF MARC S. HENZEL 273 Montgomery Ave. Ste. 202 Bala Cynwyd, PA 19004 Fred Taylor Isquith , Esq WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Ave. New York, NY 10016 Douglas S. Johnston BARRETT JOHNSTON & PARSLEY 217 Second Avenue North Nashville, TN 37201-1601 Nancy Kaboolian ABBEY GARDY, LLP 212 East 39th St. New York, NY 10016 William S. Lerach LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 655 West Broadway Suite 1900 San Diego, CA 92101 Mel E. Lifshitz BERNSTEIN LIEBHARD & LIFSHITZ, LLP 10 East 40th Street New York, NY 10016 Richard A. Lockridge LOCKRIDGE GRINDAL NAUEN, PLLP 100 Washington Ave., South Ste. 2200 Minneapolis, MN 55401 Page 4 of 5CM/ECF - U.S. District Court:tnwd 9/8/2008https://ecf.tnwd.uscourts.gov/cgi-bin/MailList.pl?900591460987994-L_470_0-1 Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 10 of 11 Douglas M McKeige BERNSTEIN LITOWITZ BERGER & GROSSMAN 1285 Ave of the Americas 38th Floor New York, NY 10019 Eitan Misulovin BERNSTEIN LITOWITZ BERGER & GROSSMAN 1285 Ave of the Americas 38th Floor New York, NY 10019 Michael E. Moskovitz MUCH SHELIST FREED DENENBERG AMENT & RUBENSTEIN, P.C. 191 N. Wacker Dr. Ste. 1800 Chicago, IL 60606-1615 Gregory M. Nespole , Esq WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Ave. New York, NY 10016 Darren J Robbins LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 655 W. Broadway Ste. 1900 San Diego, CA 92101 Robert M. Roseman SPECTOR ROSEMAN & KODROFF, P.C. 1818 Market St. Ste. 2500 Philadelphia, PA 19103 David A. Rosenfeld LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 200 Broadhollow Rd. Ste. 406 Melville, NY 11747 Samuel H. Rudman LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 200 Broadhollow Rd. Ste. 406 Melville, NY 11747 Mark Solomon LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP 655 West Broadway Suite 1900 San Diego, CA 92101 Marc A. Topaz SCHIFFRIN BARROWAY TOPAZ & KESSLER, LLP 280 King of Prussia Road Radnor, PA 19087 Page 5 of 5CM/ECF - U.S. District Court:tnwd 9/8/2008https://ecf.tnwd.uscourts.gov/cgi-bin/MailList.pl?900591460987994-L_470_0-1 Case 2:03-cv-02216-BBD-gbc Document 449 Filed 09/08/08 Page 11 of 11