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IN RE RAMAEKERS

January 15, 1999

IN RE APPLICATION OF LAWRENCE J. RAMAEKERS AND JAY ALIX & ASSOCIATES, TO COMPEL COMPLIANCE WITH A SUBPOENA DUCES TECUM.


The opinion of the court was delivered by: Pauley, District Judge.

MEMORANDUM AND ORDER

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.

Factual Background

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:

  1. All tape recordings and interview notes from a
     February 25, 1997 interview of

     Lawrence J. Ramaekers ("Ramaekers") by reporter
     Michael Ellis.
  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,
     1997.

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 ...


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