So what are you, as the Lead Plaintiff, supposed to do when trapped under a PSLRA discovery stay, and a bankruptcy Trustee is about to get permission to destroy company documents that you want to get your hands on? Well, if you are the Lead Plaintiff in the IT Group securities class action, you move to lift the stay to get at the documents. And if you’re the Defendant? Well, you tell the Court that all it needs to do is issue a document preservation subpoena to the Trustee.
Who wins? This time, it’s Defendants, with Judge William L. Standish (W.D. Pa.) holding that that Plaintiffs' proposal “would allow them to begin unrestricted discovery of 134,000 boxes of documents scattered throughout the United States,” and therefore Plaintiffs “have not established a clearly defined universe of documents, and could easily be off on a fishing expedition.” Wait a minute. Did he really say 134 thousand boxes? Boxes? Let’s calculate here, if there are 3000 pages in a box (assume no pesky clips if you please), that’s 402 million pages. If you stretched the boxes end to end, they would stretch for nearly 32 miles! Put the documents from the boxes end to end (sounds fun doesn’t it?), and the line would be 96,000 miles, or nearly four times around the earth. Oh, yes, Your Honor, we have really narrowed down our request. Anyway, seems no surprise that Judge Standish concluded “issuing a protective subpoena is the most expeditious and least disruptive way to proceed in this matter.”
You can read Payne v. DeLuca, issued December 20, 2005, at 2005 U.S. Dist. LEXIS 35891.
Nugget: “Despite Plaintiffs' speculation that the Trustee would surreptitiously disregard a subpoena, the Court believes that the possibility of being held in contempt of court for failing to comply with the terms of a subpoena, coupled with the relatively light burden of complying for the short period of time envisioned, would encourage the Trustee to fully cooperate.”