United States District Court, D. Minnesota
WEST VIRGINIA PIPE TRADES HEALTH & WELFARE FUND, EMPLOYEES' RETIREMENT SYSTEM OF THE STATE OF HAWAII, and UNION ASSET MANAGEMENT HOLDING AG, Plaintiffs,
MEDTRONIC, INC., WILLIAM A. HAWKINS, GARY L. ELLIS, RICHARD E. KUNTZ, JULIE BEARCROFT, RICHARD W. TREHARNE, and MARTIN YAHIRO, Defendants.
C. LEAHY, JONAH H. GOLDSTEIN, ROBERT R. HENSSLER, JR.,
DANIELLE S. MYERS, SUSANNAH R. CONN, AND HILLARY B. STAKEM,
ROBBINS GELLER RUDMAN & DOWD LLP, SHAWN A. WILLIAMS,
ROBBINS GELLER RUDMAN & DOWD LLP, CHRISTOPHER M. WOOD,
ROBBINS GELLER RUDMAN & DOWD LLP, JAMES M. HUGHES AND
CHRISTOPHER F. MORIARTY, MOTLEY RICE LLC, CAROLYN G. ANDERSON
AND BRIAN C. GUDMUNDSON, ZIMMERMAN REED, PLLP, WARREN PRICE,
III, PRICE OKAMOTO HIMENO LUM, FOR PLAINTIFFS.
G. PETROSINELLI, STEVEN M. FARINA, AND AMANDA M. MACDONALD,
WILLIAMS & CONNOLLY LLP, JAMES K. LANGDON AND THERESA M.
BEVILACQUA, DORSEY & WHITNEY LLP, FOR DEFENDANTS.
MEMORANDUM OPINION AND ORDER ON OBJECTIONS TO ORDER
OF THE MAGISTRATE JUDGE
R. TUNHEIM, United States District Court Chief Judge
West Virginia Pipe Trades Health & Welfare Fund
(“the Fund”), Employees' Retirement System of
the State of Hawaii (“ERS”), and Union Asset
Management Holding AG (“Union”) (collectively,
“Plaintiffs”) bring this consolidated class
action against Medtronic and several of its officers and
employees (collectively, “Medtronic”), alleging
that Medtronic engaged in a scheme to defraud investors in
violation of federal securities laws.
moved to compel Medtronic to produce documents dating from
January 1, 2000, to December 13, 2013. On June 12, 2015,
Magistrate Judge Franklin L. Noel issued a discovery order
(“the June 2015 order”) granting in part and
denying in part Plaintiffs' motion. Specifically, the
Magistrate Judge narrowed the discovery period to documents
from January 1, 2004, to December 31, 2013. Medtronic objects
to the June 2015 order. Separately, Medtronic moved to compel
Plaintiffs to re-produce two Rule 30(b)(6) designees and to
produce responsive documents with respect to document request
number 1. On July 14, 2017, the Magistrate Judge issued a
discovery order (“the July 2017 order”) granting
Medtronic's motion. Plaintiffs object to the July 2017
the Court will find that the Magistrate Judge's orders
were not clearly erroneous, the Court will overrule the
parties' objections, but will modify the Magistrate
Judge's July 2017 order to clarify the scope of the
re-production of Plaintiffs' Rule 30(b)(6) designees.
is the producer of the INFUSE bone graft, a bone
morphogenetic protein (“BMP”) that induces the
body to form bone tissues. (Am. Consolidated Class Action
Compl. ¶ 7, Nov. 4, 2013, Docket No. 28.) Plaintiffs
allege that Medtronic intentionally concealed significant
safety risks of INFUSE from the public and, as a result,
Medtronic's stock traded at artificially inflated prices
from September 28, 2010 to August 3, 2011. (Id.
¶ 15, 25.) Plaintiffs claim that Medtronic's scheme
and misrepresentations caused investors to lose hundreds of
millions of dollars following the disclosure of the safety
risks of INFUSE. (Id. at ¶ 38.)
served Medtronic with 29 discovery requests for responsive
documents dating from January 1, 2000, to December 31, 2013.
(Decl. of Christopher M. Wood ¶ 2, Ex. 1 at 11-17, Apr.
27, 2015, Docket No. 120.) Plaintiffs subsequently moved to
compel the production of these documents. (Mem. Supp.
Pls.' Mot. to Compel at 1-2, Apr. 27, 2017, Docket No.
response, Medtronic submitted an affidavit from Cynthia Rowe,
an eDiscovery specialist, explaining that Plaintiffs'
requests would require Medtronic to restore backup tapes from
January 1, 2000, to August 22, 2007. (Decl. of Cynthia Rowe
¶¶ 14-17 (“Rowe Decl.”), May 4, 2015,
Docket No. 134.) Rowe alleged that, in the best case
scenario, Medtronic would need to restore five to six backup
tapes per custodian for each 180-day period. (Id.
¶ 17.) Medtronic requested that the Magistrate
Judge narrow Plaintiffs' discovery period to January 1,
2009, to December 31, 2011. (Defs.' Opp'n to
Pls.' Mot. to Compel at 15 May 4, 2015, Docket No. 133.)
June 2015 order, the Magistrate Judge granted Plaintiffs'
motion but narrowed the discovery period to January 1, 2004,
to December 31, 2011. (Order (“June 2015 Order”)
at 11-12, June 12, 2015, Docket No. 144.) Citing
Medtronic's concerns about restoring its backup tapes,
the Magistrate Judge explained, “Plaintiffs'
proposed fourteen-year time period for the production of
documents is too broad and would impose an undue burden upon
Medtronic.” (Id. at 5.) The Magistrate Judge,
however, disagreed with the much narrower discovery period
requested by Medtronic. (Id.)
objected to the Magistrate Judge's June 2015 order. (Obj.
to Magistrate Judge's Order, June 29, 2015, Docket No.
148; Defs.' Suppl. Aff. Supp. Obj. to Magistrate
Judge's Order at 2, May 5, 2017, Docket No. 268.) In
support of its objection, Medtronic submitted an affidavit
from Jason Bergerson, an eDiscovery specialist, alleging that
it would take between 245 and 255 days and approximately $3,
500, 000 to restore the 5, 393 backup tapes. (Aff. of Jason
Bergerson ¶¶ 4-5, May 5, 2017, Docket No. 269.)
DEPOSITIONS OF CORPORATE DESIGNEES
and June 2015, Medtronic noticed Plaintiffs of its intent to
take Rule 30(b)(6) depositions about fourteen topics:
1. The factual basis for Plaintiffs' allegations in the
Complaint, including (but not limited to) the factual basis
for this matter proceeding as a class action.
2. Plaintiffs' claimed amount of damages, including the
amount of damages and the method used to arrive at that
3. The organizational and reporting structuring of any
division or other business unit of [the organization] that
analyzes, purchases, sells, or otherwise has involvement with
4. [The organization's] policies and procedures for
engaging in the purchase or sale of securities which governed
the purchase or sale of Medtronic Securities during the Class
5. The reason(s) [the organization] decided to purchase
and/or sell Medtronic Securities during the Class Period.
6. The information relied upon by [the organization] in
making any decision to purchase or sell . . . Medtronic
Securities during the Class Period, including (but not
limited to) the decision to purchase or sell . . . following
(a) the publication of The Spine Journal on or about May 25,
2011; and (b) the publication of The Spine Journal on or
about June 28, 2011.
7. The trading activity of [the organization] in Medtronic
Securities from January 1, 2009 until December 31, 2011.
8. All communications concerning [the organization's]
efforts to monitor the performance of or value of Medtronic
Securities, including communications with third-party
investment professionals, rating agency professionals,
analysts, and members of the media.
9. [The organization's] use of outside investment
managers and hedge funds to hold Medtronic Securities from
January 1, 2009 until December 31, 2011.
10. The method used by [the organization] to calculate gains
and losses in Medtronic Securities . . . from January 1, 2009
until December 31, 2011.
11. [The organization's] analysis of [The Spinal Journal
articles and other medical journal articles].
12. Records, if any, that allow [the organization] to trace
shares of Medtronic Securities to those acquired or sold in
connection with [The Spine Journal articles].
13. [The organization]'s accounting and tax treatment of
any investment, purchase, sale or trade of any Medtronic
Security from 2009 through 2011.
14. The fee arrangement(s) between [the organization] and the
other named Plaintiffs, including any financial arrangements
between Robbins Geller Rudman & Dowd LLP and ...