Yesterday's Hearing in Kansas

Privileged and Confidential Joint Defense Communication

From: Don Schultz
To: Kansas JDT Participants
Re: 10/15/01 motion hearing
A transcript has been ordered. Below is my recap. I encourage other attendees to reply with corrections or additions you think would be helpful to folks who did not attend.
1. Overall Impressions
Rex Sharp's arguments were unclear, complicated, and at times inconsistent. I think plaintiffs' lawyers left the Court with the impression that they are in disarray, not well organized, and not ready to proceed with a workable approach to the case.
Dave Rebein did an excellent job of illustrating how bizaare this case is in scope and substance - you'll want to read the "motorcycle story" he told Judge Smith at the start of his argument to illustrate this. His creative approach struck a chord; Judge Smith put his hands in front of his face in order not to laugh so obviously, but laugh he did.
Jim Griffin showed the Judge that the defendants have invested thousands of hours collectively to produce the information on their Kansas contacts, and ably reviewed the case law which frowns on allowing discovery into either p.jd. or merits where a conspiracy has been pleaded only in conclusory terms.
Jim and Dave presented coordinated, clear arguments and presented them persuasively. Their hard preparation work, and that of the Akin Gump team and many other volunteers, seemed to me to pay off in a very strong showing.
Smith listened to the arguments without saying much or asking questions. My sense at the conclusion of the arguments was that the Judge had not read much of the defendants' briefs, but that Messrs. Rebein and Griffin had made compelling arguments in line with those in the briefs, whereas Sharp's arguments remained muddled. Smith's comments and decisions on the motions, thus far are summarized as follows.
2. Sharp's Pseudo Motion to Compel.
Judge Smith will review the interrogs and requests for production which Sharp served as "personal jurisdiction" discovery. He will issue some form of order or statement - he said by this Friday - which identifies those questions which go too far - are outside what he contemplated in the case management order as "limited" personal jurisdiction discovery, versus those questions he thinks defendants should answer because they bear on personal jurisdiction. This will not constitute a ruling on any objections.
The defendants will have ten days to further answer or object to any of the discovery which the Court finds is within the intent of the case management order as to the scope of personal jurisdiction issues. Judge Smith said that he wants future discovery objections to be filed with/sent to him immediately so he can get a response from the other side and rule on objections quickly - he wants to know about discovery objections "before God hears the news" (something like that).
Judge Smith gave a brief overview of the parties' opposing positions on the scope of permissible jurisdiction discovery - the defendants limiting that scope to "contacts" and the plaintiffs treating it as tantamount to merits discovery. He did not seem prepared to agree with either party completely. He said that it was his intent from the outset to spare the defendants from full merits discovery until he determined the scope of the court's jurisdiction, and it seemed that he intends to continue to draw a distinction between limited and full discovery. Pointing to a blow-up which Messrs. Rebein and Griffin used, he indicated that some of the requests do appear to go well beyond personal jurisdiction issues. He also said, though, that the jurisdictional issues may not be limited to "contacts" as the defendants contend.
I left the courtroom unsure how Smith will decide which questions he thinks are within and without the limited personal jurisdiction discovery the CMO allows. It is not clear whether he will look at the law on the sufficiency of pleading a conspiracy, or whether he will look at the case law on whether or not pleading a conspiracy can extend the scope of personal jursdiction to reach "no-contacts" alleged conspirators. Neither side really pushed him to decide those legal points now. He left himself all options as still open. I had the impression that the Judge had not read the discovery requests at all - even though defendants had attached them as an exhibit - and that he expects (perhaps naively) that the boundary between limited personal jurisdiction and merits discovery to be clear to him as he looks at the questions one at a time.
Sharp tendered to the Judge a copy of the Tejas defendants objections and answers. Other defense counsel requested leave to submit their defendants' responses and objections. The Court finally realized that the defendants were concerned he would be ruling to compel discovery without having considered the various objections, and so made clear he is only going to now evaluate Sharp's questions, give some guidance on which questions seem within the scope of the order, and the defendants can make objections as needed.
The Judge seemed frustrated that Sharp had not provided him the discovery questions with his motion, and also seemed perturbed by the form of the motion. He said "I don't know what this motion is . . . there is no such motion . . . Plaintiffs are just making stuff up . . . I don't like it when parties make stuff up, because then I don't know what to do."
3. PSCo - Colorado and KCS motions to compel. Jim Eisenbrandt and Jim Flaherty argued persuasively that Plaintiffs should have to respond to the personal jurisdiction discovery they had submitted, even if the answers are that the plaintiffs don't have evidence to support jurisdiction over individual defendants. Judge Smith denied Sharp's motion for a protective order that plaintiffs not have to respond to that discovery. He rejected Sharp's argument that it is not "fair" for plaintiffs to have to respond when the defendants have asserted objections. As with Sharp's questions, Judge Smith will review the questions submitted by KCS and PSCo and identify those which the plaintiffs must answer. Dan Church will submit his separate discovery served on the plaintiffs, since he asked some additional and different questions.
4. Discussion of Case Management Order
In arguing his motion, Sharp emphasized that with the passage of time and lack of discovery he does not believe the CMO deadlines on the personal jurisdiction motion can be met. Later, off the record, after the arguments, Sharp and Kerry McQueen "apprised" the Court that Mike Moore cannot attend to this case due to the illness of his office manager, that Moore cannot be deposed for the foreseeable future as a class representative, and that Moore may have to reevaluate in about a month whether he even wants to participate in this case (McQueen said if Moore does not want to participate then he and Sharp will face some "hard decisions").
Though Sharp reiterated, at points in his arguments, that he thinks the class certification should proceed ahead of the personal jurisdiction factual motions because the latter require discovery tantamount to merits discovery, he also seems to want to delay class certification, but has been unclear in that respect.
There were no formal proposals made to change the CMO, and no rulings to do so. The Judge indicated that if the parties agree to change the CMO deadlines and schedule, he will not have a problem doing so, subject to him deciding the hearing dates. He wants the events calendared at all times to give him management control over the case, but he is amenable to changing the time lines.
I think both sides will wait to see what the Judge says about the scope of "limited personal jurisdiction discovery," then re-evaluate how to proceed with CMO negotiations. It seems likely to me that we will get to the hearing on the initial motion to dismiss without the discovery having progressed far in substance. It is not at all clear whether the defendants will still want to, or be able to, continue pressing forward with the personal jurisdiction motion (including undertaking needed discovery), and a decision on same, before class certification. Judge Smith still seems to think that is the correct logical sequence for the case, but his guidance on the discovery scope will be pivotal.
Don.