Securities And Exchange Commission v. Leslie et al, No. 5:2007cv03444 - Document 174 (N.D. Cal. 2009)
Court Description: ORDER GRANTING DEFENDANT LONCHAR'S MOTION TO REVISE THE SCHEDULING ORDER AND TO FINALIZE DISCOVERY by Judge Patricia V. Trumbull granting 161 Motion for Extension of Time to File. (pvtlc2, COURT STAFF) (Filed on 12/2/2009)
Download PDF
<![CDATA[
Securities And Exchange Commission v. Leslie et al Doc. 174 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 13 14 15 16 U.S. SECURITIES AND EXCHANGE COMMISSION, ) ) ) ) Plaintiff, ) v. ) ) MARK LESLIE, ET AL., ) ) Defendants. __________________________________ ) ORDER GRANTING DEFENDANT LONCHAR’S MOTION TO REVISE THE SCHEDULING ORDER AND TO FINALIZE DISCOVERY [Docket No. 161] INTRODUCTION 17 18 Case No.: C 07-03444 JF (PVT) Defendant Kenneth E. Lonchar moves (on shortened time) to revise the scheduling order 19 and to finalize discovery in the above-captioned action. Defendants Mark Leslie and Paul A. 20 Sallaberry join in the motion. Plaintiff U.S. Securities and Exchange Commission opposes the 21 motion. (“SEC”). Pursuant to Civ. L.R. 7-1(b) and the parties’ own papers, the motion was 22 taken under submission without oral argument. Having reviewed the papers and considered the 23 arguments of counsel, defendant Lonchar’s motion is granted.1 24 25 26 27 28 1 The holding of this court is limited to the facts and particular circumstances underlying the present motion. ORDER, page 1 Dockets.Justia.com BACKGROUND AND DISCUSSION 1 2 On October 27, 2009, defendant Lonchar produced a disc containing approximately 851 3 documents in electronic format. The documents had been retrieved belatedly from his personal 4 computer. Although defendant Lonchar believed that the documents had been previously 5 produced by Veritas Software Corporation (and later its successor company, Symantec 6 Corporation) in large part, in an abundance of caution he produced the documents which 7 consisted of email correspondence, attachments and other loose files. At the request of plaintiff 8 SEC (and following the production of the new documents), defendant Lonchar also produced a 9 spreadsheet identifying which documents had been previously produced. The documents 10 apparently coincide in time with defendant Lonchar’s resignation from Veritas and are 11 responsive to past discovery requests propounded upon him. The discovery cut-off was on or 12 about July 24, 2009. Of these 851 documents, approximately 587 have never been produced 13 during the course of this action. Additionally, defendant Lonchar served a privilege log to 14 accompany the recent production. He states that all of the privileges asserted therein belong to 15 Symantec alone. 16 Upon receipt of the above-specified production, plaintiff SEC initially sought to extend 17 by 30 days the date for the parties to file dispositive motions. It reasoned that the additional 30 18 days would provide plaintiff SEC with ample opportunity to conduct a thorough review of the 19 newly produced documents. Plaintiff SEC claims that at least 50 documents from the recent 20 production appear to have been responsive to an investigative subpoena it issued to defendant 21 Lonchar on or about December 12, 2002. 22 Plaintiff SEC further points out that during his testimony before the SEC on February 6, 23 2003, defendant Lonchar stated under oath that he had conducted a search of “all records in my 24 possession at my house, through my personal files, through my home computer, the hard drive, 25 and floppy disks or CDs that I had,” and had produced all responsive materials. See 26 Investigative testimony of Kenneth Lonchar, Exh. 4 to plaintiff SEC’s opposition. Moreover, 27 during the course of discovery in the above-captioned action, plaintiff SEC propounded 28 document requests seeking, inter alia, documents requested during the SEC’s investigation and ORDER, page 2 1 “any and all documents that relate to Lonchar’s direction of ‘any practices to manage or 2 manipulate Veritas’ revenue or earnings either upward or downward or to produce ‘museum 3 quality’ financial results (as alleged by the SEC).’” Plaintiff SEC contends that “almost all” of 4 the newly produced documents “appear to relate to the AOL transaction or the accounting 5 manipulations by Lonchar alleged in the Amended Complaint and clearly responsive to the 6 above-described requests for production.” Plaintiff SEC had sought further explanation from 7 defendant Lonchar regarding his delayed production to no avail. After further deliberation, however, plaintiff SEC now requests that defendant Lonchar 8 9 be precluded from using any of the documents recently produced. It states that it has been 10 severely prejudiced by the production of newly produced documents. Defendant Lonchar and 11 the other co-defendants object to re-opening discovery and allowing further discovery to occur 12 after dispositive motions have been filed. By letter dated November 25, 2009, defendant Lonchar then suggested that the parties 13 14 (including plaintiff SEC and defendant Lonchar) each identify no more than 20 documents from 15 the recent production that could be used in the above-captioned action. Aside from duplicative 16 documents that have been previously produced, the parties would be precluded from using any 17 newly produced documents not identified by any of the parties. Defendant Lonchar further 18 suggested that the discovery cut-off be extended to December 11, 2009 and that the court adopt a 19 revised schedule for filing dispositive motions. By letter dated November 30, 2009, plaintiff SEC objected to the proposal made by 20 21 defendant Lonchar. In sum, it complained that defendant Lonchar had not adequately explained 22 the circumstances that caused him to locate new and responsive documents (after he had testified 23 that he had conducted a diligent search for responsive documents, inter alia, on his personal 24 computer). Instead, plaintiff SEC characterized the proposal as largely self-serving. See letter 25 from the SEC dated November 30, 2009. (“it would create an incentive to withhold documents 26 for as long as possible so as to deprive the other side of the benefit of those materials in 27 discovery, while also permitting the violating party to use those materials that might be favorable 28 to it.”). ORDER, page 3 1 In an interim order dated November 30, 2009, the court sought further response from 2 defendant Lonchar regarding his location of newly produced documents. (“November 30, 2009 3 Interim Order”). This court also revised the dispositive motion schedule as follows: (1) 4 dispositive motions are due no later than December 18, 2009; (2) oppositions to dispositive 5 motions are due no later than January 22, 2010; and (3) reply briefs are due no later than 6 February 5, 2010. The motions are scheduled to be heard by the district court on March 5, 2010 7 at 9AM. Trial is scheduled to begin on or about May 14, 2010. Stipulation and Joint Request 8 for Order Revising Case Schedule dated October 15, 2009. (“October 15, 2009 Order”). See 9 Docket No. 159. 10 Pursuant to the November 30, 2009 Interim Order, defendant Lonchar explained that in 11 or around August 2002, Veritas installed a T1 fiber optic line, which connected his personal 12 computer to the Veritas network, to allow him to work from home. Letter by defendant Lonchar 13 dated December 2, 2009. (“December 2, 2009 Letter”). See Docket 173. As a result, defendant 14 Lonchar was provided with the capability to work locally on his personal computer and to save 15 certain Veritas network files on the hard drive thereon. Defendant Lonchar understood that 16 whatever he had saved on his personal computer would also be saved on the Veritas network. 17 He contends that the error was inadvertent. Defendant Lonchar further explains that only after 18 conferring on defense strategy in the late stages of the above-captioned action did the possibility 19 of additional documents arise. Specifically, defendant Lonchar “recalled a relevant piece of 20 email correspondence that he had not seen in the SEC’s document production to him.” This 21 belated recollection and the failure to locate the specific email in any production caused an 22 inspection of the hard drive of defendant Lonchar’s personal computer to occur. 23 Here, a trial on the merits of the case outweighs any prejudice to plaintiff SEC. Plaintiff 24 SEC has had more than a month to complete its review of the newly produced documents. Based 25 on defendant Lochar’s response, the court finds that defendant Lonchar has sought to fulfill his 26 ongoing obligation to supplement discovery. Fed. R. Civ. P. 26(e). The discovery cut-off is 27 extended to December 11, 2009. Plaintiff SEC may depose defendant Lonchar for an additional 28 two hours to be scheduled no later than the discovery cut-off date. Plaintiff SEC shall make a ORDER, page 4 1 specific showing to warrant taking (or re-opening) any further depositions. Such a showing may 2 be made on shortened time by plaintiff SEC no later than December 7, 2009. Plaintiff SEC’s 3 request to preclude use of the newly produced documents in the above-captioned action is denied 4 and defendant Lonchar’s motion to revise the scheduling order and to finalize discovery is 5 granted. CONCLUSION 6 7 Based on the foregoing, defendant Lonchar’s motion is granted. 8 IT IS SO ORDERED. 9 10 Dated: December 2, 2009 ____________________________ PATRICIA V. TRUMBULL United States Magistrate Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER, page 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER, page 6
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
