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Penguin's preliminary pretrial statement doc 84
1. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 1 of 10
Jonathan M. Herman (admitted pro hac vice)
DORSEY & WHITNEY LLP
51 West 52nd Street
New York, NY 10019-6119
Phone: (212) 415-9200
herman.jonathan@dorsey.com
F. Matthew Ralph
DORSEY & WHITNEY LLP
Suite 1500, 50 South Sixth Street
Minneapolis, MN 55402-1498
Phone: (612) 340-2600
ralph.matthew@dorsey.com
Attorneys for Defendant Penguin
Group (USA) Inc.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
)
Cause No. CV-11-72-M-DWM
MICHELE REINHART, )
DAN DONOVAN, and ) Judge: Donald W. Molloy
DEBORAH NETTER, individually and )
on behalf of all others similarly situated,
)
Plaintiffs, ) PENGUIN GROUP (USA) INC.’S
) PRELIMINARY PRETRIAL
v. STATEMENT
)
GREG MORTENSON, DAVID )
OLIVER RELIN, PENGUIN )
GROUP (USA), INC., a Delaware
corporation, and MC CONSULTING, )
INC., a Montana corporation, )
)
Defendants.
)
Pursuant to the Court’s June 3, 2011 Order (Dkt. 12), Defendant Penguin
Group (USA), Inc. (“Penguin”) takes the following positions on the matters listed
in Local Rule 16.2(b) and Rule 16(b) and Form 52 of the Federal Rules of Civil
Procedure:
2. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 2 of 10
I. PRELIMINARY PRETRIAL STATEMENT TOPICS
A. A brief factual outline of the case
Penguin. Penguin is a publisher headquartered in New York, New York.
Penguin published Three Cups of Tea, a book co-authored by Defendants Greg
Mortenson and David Oliver Relin, in 2006, and Stones Into Schools, a book
authored by Mortenson, in 2009 (collectively, “the Books”). In May 2011,
Plaintiffs commenced this putative class action alleging that portions of the Books
were false or inaccurate and that they are entitled to their money back and punitive
damages. On August 8, 2011, Penguin brought a motion to dismiss Plaintiffs’
Third Amended Complaint with prejudice because all of Penguin’s alleged conduct
is protected by the First Amendment, Penguin owed no duty to publish accurate
information, Plaintiffs fail to allege a cognizable injury, and Plaintiffs’ pleadings
are insufficient to state claims under Rules 8(a)(2) and 9(b) of the Federal Rules of
Civil Procedure.
B. Issues concerning jurisdiction and venue
Penguin does not believe there are any issues concerning jurisdiction or
venue at this time. If the Court were ultimately to deny class certification on the
merits, then Penguin contends that the Court would lack subject-matter jurisdiction
because the named Plaintiffs allege no federal claims and allege minimal personal
damages that are well below the minimum amount in controversy for diversity
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3. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 3 of 10
jurisdiction. If a new case were filed against Penguin arising from its publication
of the Books while this case is pending, Penguin would evaluate whether to bring a
motion, either in one of the forum courts or before the Judicial Panel on
Multidistrict Litigation, to transfer and consolidate the cases in a single forum.
C. The factual basis of each claim or defense advanced by the party
As Penguin has argued in support of its motion to dismiss, Penguin contends
that Plaintiffs have not alleged a sufficient factual basis for any of their claims.
The factual bases for Penguin’s motion to dismiss the Third Amended Complaint
are that (1) Penguin is a publisher; (2) Penguin published the Books; (3) the
contents of the Books comprise matters of public interest that are protected by the
First Amendment; (4) the First Amendment protection extends to descriptions,
classifications, and advertisements of the Books; (5) accordingly, any alleged
statements that the Books were “true” or “nonfiction” are also protected by the
First Amendment; (6) Penguin did nothing that arguably might have lessened the
scope of First Amendment protection, and specifically did not take any actions to
assume a duty to verify the accuracy of the factual statements in the Books;
(7) Plaintiffs fail to identify any way in which the alleged misrepresentations
injured them other than by retrospectively diminishing their enjoyment of the
Books; and (8) Plaintiffs fail to meet the pleading requirements of Rules 8(a)(2)
and 9(b) because all of their allegations against Penguin are conclusory, they fail to
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4. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 4 of 10
allege facts supporting each element of their claims, and they fail to plead fraud
and deceit claims with the requisite particularity.
If Penguin is ever required to answer Plaintiffs’ complaint, Penguin may
identify additional factual bases for additional defenses and supplement this filing.
D. The legal theory underlying each claim or defense, including, where
necessary to a reasonable understanding of the claim or defense,
citations to authority
As Penguin has argued in support of its motion to dismiss, Plaintiffs fail to
allege viable claims because the First Amendment bars their claims against
Penguin, Penguin owed Plaintiffs no duty to publish accurate information, and
Plaintiffs suffered no cognizable harm. Further, as noted above, Plaintiffs fail to
meet the pleading requirements under Fed.R.Civ.P. 8(a)(2) and 9(b). Plaintiffs
also contend that no class can be certified because individualized issues of reliance,
causation and damages predominate over any common questions. If Penguin is
ever required to answer Plaintiffs’ complaint, Penguin may identify additional
defenses and supplement this filing.
E. A computation of damages
Penguin is not claiming damages.
Penguin believes that, based on Plaintiffs’ allegations, Plaintiffs should be
able to provide a preliminary method for calculating their damages (e.g., number of
Books sold multiplied by average purchase price, less the value that they derived
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5. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 5 of 10
from reading the Books) even though Plaintiffs may not have all the information
they need to perform that actual calculation.
F. The pendency or disposition of any related state or federal litigation
Currently there are no related state or federal cases pending.
As noted above, if a new case were filed, Penguin would evaluate whether to
bring a motion to transfer and consolidate the cases into a single forum. Penguin
believes that any such decision would be specific to the circumstances presented.
G. Proposed stipulations of fact and the parties’ understanding as to what
law applies
Penguin will stipulate that it is a publisher, that it published the Books, and
that it entered into written contracts with the authors prior to the publication of the
Books, in which the authors represented and warranted to Penguin that “all
statements asserted as facts [in the Books] are based on the Author’s careful
investigation and research for accuracy.” Penguin is not prepared to stipulate to
any further facts at this time, although it believes, in principle, that the parties will
likely be able to agree on certain basic facts regarding the publication of the Books.
Penguin believes that Montana law applies to the claims until a class is
certified, if ever. Penguin contends that no class can be certified. To the extent the
legal theories of Plaintiffs’ claims differ among states, the Court should address the
issue if and when it certifies a class, based on the arguments and evidence
presented.
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6. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 6 of 10
H. Proposed deadlines relating to joinder of parties or amendment of the
pleadings
Per Penguin’s motion to dismiss, Penguin contends that no amendment
could save the Third Amended Complaint and that dismissal with prejudice is
warranted. If the Court were to grant Plaintiffs an opportunity to further amend
their complaint for the fourth time, Penguin contends that such amendment should
be the last allowed pre-discovery. To the extent the Court does not limit the
number of additional times Plaintiffs may amend their Complaint, Penguin
proposes that the deadline to file motions to amend the pleadings or add parties
should be 2 months from any order denying Defendants’ motions for a protective
order or, if any such motion is granted, 2 months from any order denying any
Rule 12(b)(6) motion as to any claim.
I. Identification of controlling issues of law suitable for pretrial
disposition
Per Penguin’s motion to dismiss, Penguin contends that Plaintiffs’ claims
fail as a matter of law due to the First Amendment, due to the lack of duty and
cognizable injury under common law, and due to Plaintiffs’ failure to meet the
pleading standards of Rules 8(a)(2) and 9(b).
Penguin also believes that denial of class certification on the merits would
be dispositive in this action because the Court would no longer have subject-matter
jurisdiction and Plaintiffs would be unlikely to pursue this litigation as individual
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7. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 7 of 10
plaintiffs in state court. Penguin contends that no class can be certified due to
individualized issues of fact or lack of commonality or because common issues do
not predominate over individualized issues, and other deficiencies under Rule 23,
as discussed in more detail in Penguin’s brief in opposition to Plaintiffs’ motion for
class action certification.
Penguin may identify other controlling issues of law on which to bring a
motion for summary judgment.
J. Status of any settlement discussions and prospects for compromise of
the case
To date, Penguin has not engaged in any settlement discussions with
Plaintiffs. Penguin does not believe that settlement discussions would be fruitful at
this time.
K. Suitability of special procedures
Penguin cannot think of any suitable special procedures other than those
already indicated in its filings.
L. Other Topics
• Penguin contends that Plaintiffs’ claims against it for punitive
damages and liability-as-principal are frivolous and should be
dismissed;
• Penguin does not consent to the appointment of a magistrate
judge to preside over dispositive motions or at trial;
• Penguin believes there is no reason to vary the limits on
discovery in the Federal Rules in this action.
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8. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 8 of 10
II. PROPOSED CASE SCHEDULE
Action Deadline
1. Rule 26(a) Initial Disclosures 14 days from any order
denying Defendants’ motions
for protective order or, if any
such motion is granted,
14 days from any order
denying any Rule 12(b)(6)
motion as to any claim
2. Deadline to File Motions to Amend 2 months from any order
Pleadings or Add Parties denying Defendants’ motions
for protective order or, if any
such motion is granted,
2 months from any order
denying any Rule 12(b)(6)
motion as to any claim
3. Class Certification Motions Already made and briefed;
but, if Plaintiffs’ motion is
denied as premature, with
leave to move gain, then
3 months from any order
denying Defendants’ motions
for protective order or, if any
such motion is granted,
3 months from any order
denying any Rule 12(b)(6)
motion as to any claim
4. Settlement Conference 9 months from any order
denying Defendants’ motions
for protective order or, if any
such motion is granted,
9 months from any order
denying any Rule 12(b)(6)
motion as to any claim
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9. Case 9:11-cv-00072-DWM Document 84 Filed 09/09/11 Page 9 of 10
5. Expert Reports (Plaintiffs’ liability and 10 months from any order
damages reports; Defendants’ liability denying Defendants’ motions
report) for protective order or, if any
such motion is granted,
10 months from any order
denying any Rule 12(b)(6)
motion as to any claim
6. Expert Rebuttal Reports (Defendants’ 11 months from any order
damages report, et al.) denying Defendants’ motions
for protective order or, if any
such motion is granted,
11 months from any order
denying any Rule 12(b)(6)
motion as to any claim
7. Discovery Deadline 12 months from any order
denying Defendants’ motions
for protective order or, if any
such motion is granted,
12 months from any order
denying any Rule 12(b)(6)
motion as to any claim
8. Motion Deadline (dispositive motions and 30 days after Discovery
discovery motions, fully briefed) Deadline
9. Attorney Conference to prepare Final 30 days before Trial Date
Pretrial Order
10. Notice to Court of Technology Needs at 21 days before Trial Date
Trial
11. Deadline to file trial briefs, witness lists, 21 days before Trial Date
motions in limine, jury instructions, final
pretrial order
12. Final Pretrial Conference 14 days before Trial Date
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13. Trial Date 16 months from any order
denying Defendants’ motions
for protective order or, if any
such motion is granted,
16 months from any order
denying any Rule 12(b)(6)
motion as to any claim
DATED: September 9, 2011 DORSEY & WHITNEY LLP
s/ F. Matthew Ralph
Jonathan M. Herman (admitted pro hac vice)
F. Matthew Ralph
Attorneys for Defendant
Penguin Group (USA) Inc.
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