The opinion of the court was delivered by: Pauley, District Judge.
On December 8, 1998, Lawrence J. Ramaekers ("Ramaekers") and
Jay Alix and Associates moved, pursuant to Rule 45(c)(2)(B) of
the Federal Rules of Civil Procedure, for an order compelling
Reuters News Service ("Reuters") to comply with a subpoena duces
tecum issued from the Southern District of New York in October,
1998. The subpoena was addressed to "Keeper of the Records" of
Reuters Information Services, Inc., and sought documents and
testimony.*fn1 Ramaekers and Jay Alix and Associates
(collectively, "Movants") are defendants in a federal securities
class action pending in United States District Court for the
District of Massachusetts. See In re Centennial Technologies
Securities Litigation, D. Mass. Docket Nos. 1:97-10304-REK,
1:97-10243 and all related cases.
Many of the issues presented by this motion were raised in a
parallel proceeding before Senior District Judge Peter K. Leisure
involving a subpoena duces tecum served by Movants on Dow Jones &
Company, Inc. See In re Application of Dow Jones & Company, Inc.,
to Quash a Subpoena Duces Tecum, 1998 WL 883299 (S.D.N.Y. 1998).
This Court has considered the arguments advanced by counsel in
their papers and at oral argument conducted on December 29, 1998.
For the reasons stated below, the motion to compel is granted.
On February 11, 1997, Centennial Technologies, Inc.
("Centennial") issued a press release announcing the removal of
its founder and chief executive officer, Emmanuel Pinez, after it
discovered that Pinez may have been responsible for fraudulent
overstatements in the company's financial statements and reports.
Two days later, on February 13, 1997, Centennial hired Ramaekers,
a principal of the Michigan-based consulting firm J. Alix &
Associates, as its interim chief executive officer to implement a
"turnaround" of the company.
On February 25, 1997, Ramaekers was interviewed by Michael
Ellis, a financial news reporter for Reuters. The content and
timing of various statements that Ramaekers allegedly made during
that interview are disputed. According to the complaint, the
statements Reuters attributed to Ramaekers in a news story it
published on the internet on February 25, 1997 caused a huge
run-up in the price of Centennial's stock. Later that day, after
Centennial announced that Ramaekers' remarks had been
misinterpreted, the New York Stock Exchange halted trading in its
stock. Centennial's stock plummeted when trading resumed two days
later in the wake of another press release by Centennial
announcing, contrary to Ramaekers' assessment, that "the
[c]ompany was still in dire trouble." Compl. ¶¶ 157-61.
Ellis made an audio recording of his interview with Ramaekers.
Oddly enough, even though Ramaekers was advised immediately after
the interview that his comments might present a problem for
Centennial, he did not make a record of his recollection of the
interview. In fact, Ramaekers apparently did not reduce his
recollection to a writing until thirteen months later when he
submitted his March 25, 1998 declaration.
The underlying class action in the District of Massachusetts
against the Movants and Centennial alleges violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934,
15 U.S.C. § 78a et seq., negligent misrepresentation and other
supplemental claims. The plaintiffs in that action seek $55
million in damages. The subpoena presently before this Court
seeks the following four categories of documents:
2. The publication of any statement made or information
provided by Ramaekers to Michael Ellis on February
25, 1997, including the time, date and medium of
each such publication.
3. Any interviews or conversations with any Centennial
Technologies, Inc. ("Centennial") director, officer,
employee, agent or representative for the period
beginning February 1, 1997 through March 1, 1997.
4. All documents or publications that concern or refer
to Centennial, Ramaekers, Jay Alix & Associates or
Cheryl Byrne (an employee of Centennial) for the
period beginning February 11, 1997 through March 11,
Reuters has agreed to produce the information requested in the
second branch of the document request. Thus, this Court need
address only the remaining three categories. Reuters has not made
a showing that any of the source materials sought by Movants are
confidential. The audio tape is the paradigm of nonconfidential
information because Ramaekers himself was the source. Moreover,
this case does ...