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VTECH HOLDINGS LIMITED v. PRICEWATERHOUSECOOPERS LLP.

United States District Court, S.D. New York


May 12, 2004.

VTECH HOLDINGS LIMITED, et al., Plaintiffs, -against- PRICEWATERHOUSECOOPERS LLP, Defendant

The opinion of the court was delivered by: LEWIS KAPLAN, District Judge

ORDER

This is an action, principally for alleged accounting malpractice, against PriceWaterhouseCoopers ("PwC"), which has moved to dismiss the second amended complaint for failure to state a claim upon which relief may be granted. Without disregarding other aspects of the motion, its crux includes contentions that

• As shown by the engagement letter, the accounting engagement which forms the predicate of the first cause of action actually was with PwC Hong Kong, a related but separate firm that has not been sued here. The Hong Kong firm's written report does not say what the complaint says it said. The first cause of action in any case is barred by a contractual limitations period contained in the engagement letter.
• The written business integration agreement upon which the second cause of action is based did not call for PwC to render the services, the alleged failure to render which is said to have constituted a breach of that contract.
• The third cause of action likewise depends upon the terms of yet another engagement letter.
The relevant engagement letters, as well as certain other documents, probably could be considered in any event on a motion to dismiss the complaint under San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 809 (2d Cir. 1996), and cases to similar effect. Nevertheless, in an abundance of caution, the Court, by order dated December 22, 2003, advised counsel that it intended to consider the three engagement letters (Young Aff. Ex. 5-7) and, to that limited extent, might convert the motion into one for summary judgment. It required that "any evidence that they contend raise a genuine issue of material fact with respect to the authenticity or terms of the relevant engagements " be submitted no later than January 8, 2004, (Emphasis added)

  In response to that order, plaintiffs' counsel has submitted:

  (a) A 60-page, single spaced so-called "Preliminary Statement of Disputed Material Facts" which neither was sought nor permitted by the December 22, 2003 order,

  (b) A 13-page Rule 56(f) affidavit that argues that plaintiffs need discovery issues of fact on a great variety of subjects involving the merits but that does not appear to contend that discovery is needed on the one limited respect in which the Court may convert the motion into one for summary judgment — "the authenticity or terms of the relevant engagements."

  (c) 80 exhibits and an authenticating affidavit that, piled one atop the other, are over 11 inches thick.

  (d) A motion to permit supplementation of plaintiff's December 8, 2003 memorandum of law and the foregoing submissions or, alternatively for leave to amend the second amended complaint and a memorandum of law in support of that motion. This motion deals only with evidence directed to the merits. There appears to be nothing in it relating to whether there is a genuine issue of fact as to "the authenticity or terms of the relevant engagements."

  This is an egregious abuse. The principal motion before the Court is addressed to the face of the complaint and, perhaps, to documents effectively incorporated by reference therein, the authenticity of which is not disputed. Plaintiffs' counsel has used the December 22 order as an excuse to inundate the Court with masses of paper immaterial to the limited issues before it. This is intolerable and, should it recur, may result in the imposition of sanctions.

  In view of the foregoing, plaintiffs' motion, dated April 15, 2004, for an order permitting supplementation of their memorandum of law and for other relief is denied. The "Preliminary Statement of Disputed Material Facts," as well as the 80 exhibits and the accompanying authenticating affidavit, are stricken and will not be considered on this motion.

  The defendant's motion to dismiss the second amended complaint is set for oral argument on May 28, 2004 at 11:45 a.m. The Court may limit each side to 15 minutes.

  SO ORDERED.

20040512

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