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United States District Court for the Northern District of California, San Jose Division
April 27, 2009, Decided; April 27, 2009, Filed
No. C07-03798 JW (HRL)
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO COMPEL FURTHER RESPONSES TO DISCOVERY REQUESTS
[Re: Docket No. 75]
Defendant Kenneth L. Schroeder moves for an order compelling non-parties KLA-Tencor Corporation ("KLA"), as well as the Skadden, Arps, Slate, Meagher & Flom law firm and individual Skadden attorneys (collectively "Skadden") to produce documents and deposition discovery. KLA and Skadden oppose the motion. Upon consideration of the moving and responding papers, as well as the arguments of counsel, this court grants the motion in part and denies it in part.
The Securities and Exchange Commission ("SEC") filed this civil enforcement action for alleged improper stock option backdating at KLA. Defendant Schroeder worked at KLA in various leadership positions for approximately 22 years, serving [*3] ultimately as its Chief Executive Officer from mid-1999 until his retirement in January 2006. The SEC contends that he was a key participant in a fraudulent scheme to backdate stock options, resulting in the concealment of millions of dollars in executive and employee compensation and significant overstatement of the company's income.
In May 2006, following news reports suggesting that there may have been retroactive pricing and backdating of certain large stock option grants at KLA, the SEC and the Department of Justice ("DOJ") began investigating KLA's option granting practices. KLA says that on May 23, 2006, it formed a Special Committee to investigate the Company's historic stock option granting practices, including the timing of past option grants and related accounting documentation. The Special Committee retained Skadden to act as its independent counsel in the investigation. The Special Committee, through Skadden, interviewed 55 current and former officers, directors, employees and outside advisors of KLA. Skadden prepared what the parties refer to as "Final Interview Memoranda," copies of which were provided to the SEC.
The SEC filed the instant action in July 2007. There is [*4] no apparent dispute that through the SEC's initial disclosures, Schroeder has received all the documents that KLA gave to the SEC. Reportedly, the SEC's initial disclosures comprise some 60,000 pages of documents including:
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2009 U.S. Dist. LEXIS 39378 *; 2009 WL 1125579
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. KENNETH L. SCHROEDER, Defendant.
Notice: NOT FOR CITATION
Subsequent History: Objection overruled by SEC v. Schroeder, 2009 U.S. Dist. LEXIS 51925 (N.D. Cal., June 10, 2009)
Prior History: SEC v. Schroeder, 2008 U.S. Dist. LEXIS 46465 (N.D. Cal., May 22, 2008)
documents, communications, Interview, discovery, work product, auditor, disclosure, waived, protective order, restatement, drafts, work product doctrine, stock option, attorney-client, presentation, work product protection, assertions, reportedly, practices, comprise, consultant, deposition, argues, backdating, witnesses, contends, appears, binders, parties, courts
Civil Procedure, Privileged Communications, Work Product Doctrine, General Overview, Opinion Work Product, Waiver of Protections, Scope of Protection