Skip Page Banner  
Skip Navigation

Lead Plaintiff in Securities Class Action Compelled to Disclose Identity of Confidential Informants

Wednesday, November 23, 2011
Andrea J. Chiller | Bloomberg Law Plumbers & Pipefitters Local Union No. 630 Pension-Annuity Trust Fund v. Arbitron, Inc., No. 08-cv-04063, 2011 BL 291048 (S.D.N.Y. Nov. 14, 2011) A securities class action suit was brought against Arbitron, Inc., based on allegedly false and misleading statements it made about the rollout of a new product. The allegations in the complaint were largely supported by information provided by 11 confidential informants, all of whom were former Arbitron employees. Arbitron served interrogatories requesting disclosure of the identities of the informants and document requests seeking all of the documents they provided to the lead plaintiff, Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund (the Fund), which refused to disclose any of the information. The Fund claimed that doing so would expose its legal strategy and therefore the disclosure was precluded by the work product doctrine, and would also expose the informants to potential retribution by Arbitron. Furthermore, it had provided a list of 83 individuals likely to have discoverable information in its initial disclosures and asserted that the 11 confidential informants were among those. Accordingly, it claimed that Arbitron could identify the informants through its own investigation and did not need to obtain the information through discovery. Arbitron file a motion to compel. As an initial matter, the Court determined that the inclusion of the informants' names within a larger list of potential witnesses in the Fund's initial disclosures was not sufficient and that the specific identification of the informants constituted "relevant information that 'appears reasonably calculated to lead to the discovery of admissible evidence'" that Arbitron was entitled to seek. (Quoting Fed. R. Civ. P. 26(b)(1).) Turning to what it deemed "the heart of the matter," the Court concluded that the names of the confidential informants were not protected from disclosure by the work product doctrine. First, the Court emphasized how narrow Arbitron's requested disclosure was. It was not seeking the information provided by the informants—much of which had already been included in the complaint by the Fund—but merely their identities. In addition, it rejected the Fund's claim that disclosure of the names would reveal its litigation or trial strategy. The Fund argued that disclosing the names of the 11 informants could signal to opposing counsel that the remaining witnesses listed in the initial disclosures were less helpful. Raising an inference as to what a party's trial strategy might be, however, was not the same as disclosing the actual strategy. Furthermore, by the Fund's own admission, the informants were already identified in its initial disclosures as potential witnesses, which meant that denying the motion would not keep the informants' identify confidential, but rather would merely delay the disclosure until Arbitron had expended significant time and resources interviewing or deposing all of the individuals identified in the initial disclosures. Explaining that the Federal Rules of Civil Procedure are in effect to ensure that the litigation process is "just, speedy, and inexpensive," the Court noted that "[t]hese goals are disserved by forcing a party, in the name of an opponent's evanescent work product interest, to play a high-cost game of 'Where's Waldo?'." (Quoting Fed. R. Civ. P. 1.) Accordingly, it held that a party whose pleadings rely on statements made by confidential informants cannot use the work product doctrine to shield those informants' identities during discovery. The Court also rejected the Fund's claim that the informants' identities should be shielded because they faced threats of retribution. The Fund failed to provide any particularized information indicating that any of the informants believed they would suffer negative consequences if their identities were disclosed, relying instead on general and conclusory statements. The Court found these insufficient to raise a real possibility that they would face retribution, but gave the Fund the opportunity to supply the requisite factual showing in ex parte affidavits submitted directly to the Court. Lastly, the Court addressed Arbitron's request for the production of documents. Even though the Fund had not raised the objection, the Court sua sponte found that the request was overbroad and "would sweep in documents (if any) provided by the [informants] that are of no relevance whatsoever to this litigation." It therefore compelled the Fund to respond to the request, but only as to documents "that are responsive to any other valid document request in this case." DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

To view additional stories from Bloomberg Law® request a demo now