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In re Marsh & McLennan Companies

July 30, 2008


The opinion of the court was delivered by: Shirley Wohl Kram United States District Judge




On May 28, 2008, Special Master L. Peter Parcher issued an order directing the lead plaintiffs in the above-captioned litigation ("Lead Plaintiffs") to produce, inter alia, documents relating to the seventeen confidential witnesses ("CWs") cited in the consolidated class action amended complaint (the "AC") and the second amended class action complaint (the "SAC"), and documents concerning criminal and regulatory investigations involving two institutional lead plaintiffs, the State of New Jersey, Division of Investment ("NJDOI"), and the Ohio Bureau of Workers Compensation ("BWC"). Lead Plaintiffs then filed a timely objection. For the reasons that follow, the Court affirms the Special Master's decisions, but narrows the scope of discovery to be obtained from NJDOI and BWC.


The instant discovery dispute arises in a securities action brought by Lead Plaintiffs on behalf of all persons and entities who purchased, or otherwise acquired, securities issued by Marsh & McLennan Companies, Inc. ("MMC") between and including October 14, 1999 and October 13, 2004. Familiarity with the factual and procedural history of this case is presumed. See In re Marsh & McLennan Cos. Sec. Litig., 501 F. Supp. 2d 452 (S.D.N.Y. 2006) (granting in part and denying in part motion to dismiss); In re Marsh & McLennan Cos. Sec. Litig., 04 Cv. 8144 (SWK), 2006 WL 2789860 (S.D.N.Y. Sept. 27, 2006) (granting permission to file SAC and dismissing certain claims with prejudice).

Lead Plaintiffs filed the SAC on October 13, 2006. 04 Cv. 8144 (SWK), Dkt. No. 142. The SAC relies in part on information provided by seventeen CWs, whom Lead Plaintiffs describe as "former Marsh employees." (Lead Pls.' Obj. 1.) On October 26, 2006, the Court appointed Special Master Parcher to coordinate and supervise discovery, and to oversee settlement negotiations between the parties. 04 Cv. 8144 (SWK), Dkt. No. 143. To date, the parties have engaged in significant discovery, reviewing and producing millions of pages of documents. (See Lead Pls.' Obj. 4; Defs.' Opp'n 3.) In addition to the documents that Lead Plaintiffs have already produced, Defendants MMC and Marsh, Inc. ("Marsh") (collectively, the "Marsh Defendants") have sought production of, inter alia, "[a]ll documents concerning the confidential sources referred to in the [AC and SAC], including but not limited to, documents sufficient to identify each and every [CW]" (Lead Pls.' Obj., Declaration of Mary S. Thomas ("Thomas Decl.") Ex. 1A, at 8); "all documents provided to [Lead Plaintiffs] by the [CWs] referred to in the [AC] and [SAC]" (Thomas Decl. Ex. 1B, at 5); and "documents relating to criminal charges and investigations" concerning both BWC and the New Jersey pension systems (Thomas Decl. Ex.1, at 7), as discussed in certain newspaper articles (see Thomas Decl. Ex. 1G, 1H).*fn1

After Lead Plaintiffs refused to produce the aforementioned documents, the Marsh Defendants filed a motion to compel, which the Special Master granted in an order (the "Order") filed on May 28, 2008. See 04 Cv. 8144 (SWK), Dkt. No. 206. Lead Plaintiffs now object to Parts I.A-B and III of that Order.*fn2 The Court reviews each section in turn.


Pursuant to Federal Rule of Civil Procedure 53(f)(3) and (4), the Court reviews de novo the Special Master's findings of fact and conclusions of law. For the reasons discussed below, the Court affirms the decisions announced in the contested sections of the Order, but narrows the scope of the discovery that the Marsh Defendants may obtain.

A. Discovery Concerning CWs

In their opposition to the Marsh Defendants' motion to compel, Lead Plaintiffs argued that their CWs' identities, and any documents the CWs may have produced, are protected from disclosure by the attorney work-product doctrine and principles of public policy. (See Thomas Decl. Ex. 2, at 4.) In the Order, Special Master Parcher rejected both of these arguments. Specifically, he concluded that the work-product doctrine was not applicable and, even if it were, the Marsh Defendants' need for the information would outweigh any minimal work product protection that attached. (See Order 3-4.) The Special Master also rejected Lead Plaintiffs' public-policy argument, concluding that they had failed to demonstrate that the identification of the CWs would create a genuine risk of retaliation by Marsh against its former employees. (Order 5.)

Lead Plaintiffs contend that the Special Master's conclusion in Part I of the Order (a) ignores Second Circuit case law holding that confidential-witness information falls within the ambit of the work-product doctrine, (b) fails to explain why the Marsh Defendants have a substantial need for the CW information, and (c) underestimates the risk of retaliation associated with the disclosure of the CWs' identities. (See Lead Pls.' Obj. 8-13.) The Court addresses each contention in turn.

1.The CWs' Identities*fn3 are Discoverable

In April 2007, Lead Plaintiffs, pursuant to Federal Rule of Civil Procedure 26(a)(1), provided the defendants with a list of individuals possessing discoverable information that Lead Plaintiffs "may use to support [their] claims or defenses." Fed. R. Civ. P. 26(a)(1)(A)(i). This list, however, only included those CWs whom Lead Plaintiffs currently expect to call as trial witnesses.*fn4 (Lead Pls.' Obj. 5.) Lead Plaintiffs refused to supplement that list to include CWs whom they do not ...

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