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
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
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.
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.