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IN RE WORLDCOM

United States District Court, S.D. New York


March 10, 2004.

IN RE WORLDCOM, INC. SECURITIES MASTER FILE LITIGATION This Document Relates to: GRACE WEINSTEIN and SYLVIA CARRAWAY, individually and on behalf of all others similarly situated, Plaintiffs, -v- BERNARD J. EBBERS, SCOTT SULLIVAN, JAMES C. ALLEN, MAX E. BOBBITT, JUDITH AREEN, FRANCESCO GALESI, CARL J. AYCOCK, STILES A. KELLET, JR., GORDON S. MACKLIN, BERT C. ROBERTS, JR., CLIFFORD L. ALEXANDER, JR., JOHN PORTER, LAWRENCE TUCKER, JOHN W. SIDGMORE, BUFORD YATES, DAVID MYERS, ARTHUR ANDERSEN, LLP, JACK GRUBMAN, and SALOMON SMITH BARNEY [dba CITIGROUP GLOBAL MARKETS, INC.], Defendants

The opinion of the court was delivered by: DENISE COTE, District Judge

MEMORANDUM OPINION AND ORDER

On December 30, 2003, plaintiffs in Weinstein, et al. v. Ebbers, et al., No. 03 Civ. 2841, (the "Weinstein Plaintiffs and "Weinstein Action" respectively) moved for leave to serve and Page 3 file a second amended complaint. This Opinion addresses the timeliness of this motion.

  An Order of July 23, 2003 (the "July 23 Order") stated that the Weinstein Action was governed by the Securities Litigation Consolidation Orders, including the May 28, 2003 Memorandum Opinion and Order (the "May 28 Order"). An ambiguity in the July 23 and May 28 Orders permits the Weinstein Plaintiffs, who bring a class action on behalf of "holders" of WorldCom securities, to argue that the May 28 Order's requirement that plaintiffs promptly amend their pleadings does not apply to them, but only to plaintiffs in Individual Actions.*fn1 The Weinstein Plaintiffs knew or should have known that any amendment had to be timely made, and if they perceived an ambiguity in this requirement or in the May 28 Order, they should have promptly requested guidance from this Court.*fn2 The Weinstein Plaintiffs have waited over 16 Page 4 months since the first amendment of their pleadings,*fn3 seven months since arriving on this Court's docket,*fn4 and five months since the July 23 Order to file this motion to amend their complaint. The Weinstein Plaintiffs have shown no good cause for this delay.

  The Weinstein Plaintiffs seek to add defendants who have been named in the Securities Litigation since its inception. Citigroup Global Markets Inc. f/k/a Salomon Smith Barney Inc. and Jack Grubman and the Director Defendants oppose the plaintiffs' proposed amendment, whether such an amendment is governed by the standards for amending pleadings under Rule 16 or Rule 15, Fed.R. Civ. P.*fn5 The defendants have not, however, identified any prejudice from permitting the amendment that cannot be remedied by the entry of appropriate orders. Page 5

  Given the ambiguity in the May 28 Order, and the insufficient showing of prejudice, it is hereby

  ORDERED that the Weinstein Plaintiffs' motion for leave to amend is granted on the following two conditions:

  First, there shall be no discovery taken in the Weinstein Action of any of the newly added defendants beyond that taken in the Securities Litigation by the Lead Plaintiff, the New York State Common Retirement Fund, for the consolidated class action.

  Second, there shall be no further amendment of the Weinstein Action without a showing of diligence and good cause.

  IT IS FURTHER ORDERED that the Clerk of Court shall amend the caption in this action to conform with caption used herein.

  SO ORDERED.


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