Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006...
Transcript of Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006...
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 1 of 16
FINEDUNITED STATES DIS`T'RICT COURT MAR q 2006.
DIS'T'RICT OF NEW JERSEY AT 8:30WILLIAM T. WALSH
MDI, No. 1658 (SRC) CI rpl(
IN RE MERCK . CO., INC., : Case No, 3: 05-CgV-01151-SRC-TJB
ECURITIES, DERIVATIVE ase NQ. 3:05-CV-02367-SRC-TJA'I I y _. ERISA ^ LITIGATION ,..._^... -
THIS DOCUMENT RELATES TO T11E STIPULATION AND ORDERCONSOLIDATED SECURITIES ACTION : DISMISSING THE, CORRECTED
CONSOLIDATED AND FOUR`1'HAMENDED COMPLAINTAGAINST THE AMERICANARBITRATION INSURERS
IT IS HEREBY S'T'IP ULATED AND AGREED as follows among court-appointed Lead
Plaintiffs RIC:I IARD REYNOLDS, STEVEN LEVAN, MARC NA`fIIANSON, and JFROME
HABER, and Plaintiffs UNION ASSET MANAGFMENT HOLDINGS AG, LOREN ARNOFF,
ROBERT EDWIN BURNS, JAN C:IIARELS FINANCE S.A., MAR'T'IN MASON, DRANK H.
SAC:C:ONE, CHARLO. 11E SAVARESE, JOE SAVARESH, JOSEPH GOLDMAN, SHERRIE
B. KNUTH, JOSEPH S. FISHER, M.D., NAOMI RAPAEL, RI IODA KANTI::.R, and PARK
EAST, INC. (Lead Plaintiffs and Plaintiffs shall he collectively referred to as "Securities
Plaintiffs") in the securities class action entitled In re Merck. & Co., Inc., Securities, Derivative
& "ERISA "Action, MDL No. 1658 (SRC), Case No. 3:05-CV-01151-SRC-TJB, Case No. 3:05-
CV02367-SRC;-'I'JB (the "Merck-Vioxx Securities Action"), that is pending currently in the
LJnited States District Court, District ofNew Jersey, and ACE AMIAUCAN INSURANCE
COMPANY; AMERICAN CASUALTY COMPANY OF READING, PA.; AXIS
REIN SURANCI COMPANY; F"1 DERAL INSURANCE COMPANY; ST. PAUL MERCURY
INSURANCE COMPANY; TWIN C ITY FIRE INSURANCE COMPANY; and ZURICH
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 2 of 16
AMERICAN INSURANCE COMPANY (the "American Arbitration Insurers"), all of which
were named as defendants in the Merck-Vioxx Securities Action, (Securities Plaintiffs and the
American Arbitration Insurers shall collectively be referred to as the "Parties."):
1. DISMISSAL OF THE MERCK-VIOXX SECURITIES ACTION
1. Securities Plaintiffs hereby agree to discontinue the Merck-Vioxx Securities
Action as against the American Arbitration Insurers, and voluntarily dismiss all of their claims
against the American Arbitration Insurers in that case, without prejudice, each Party bearing its
own costs and tees.
2. Upon entry of this Stipulation and Order, Securities Plaintiffs shall not file any
pleading on behalf of themselves or on behalf of any class of plaintiffs in any legal proceeding
against the American Arbitration Insurers seeking recovery under the insurance policies issued to
Merck & Co., Inc. ("Merck") by the American Arbitration Insurers (the "Insurance Policies")
(except for the parkicipation of Federal Insurance Company on a certain Multiline Multiyear
Catastrophe Excess Lines Insurance Agreement between Subscribing Co-Insurers and Merck,
which is addressed in a separate Agreement Regarding Dismissal of Certain Insurers and
Consent Order Dismissing the Foreign Arbitration Insurers) in either the Merck-Vioxx
Securities Action, or in any other action or proceeding unless and until the following conditions
have been met: Securities; Plaintiffs obtain a final judgment in the Merck-Vioxx Securities
Action against any of the former or current senior officers and directors of Merck who are or
become defendants in the Merck-Vioxx Securities Action (the "Individual Defendants") and who
are allegedly covered by any of the Insurance Policies, and that judgment remains unsatisfied
and enforceable for :30 days from the date of its entry.
3. The conditions set forth in this Stipulation and Order shall not be construed as an
admission or concession or as evidence as to the validity of any rights, defenses and/or claims
2
RCase 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 3 of 16
that Securities p laintiffs may have against the American Arbitration Insurers in the Merck-Vioxx
Securities Action, or in any other matter commenced against an American Arbitration Insurer
with respect to its providing insurance coverage to Merck's former or current senior officers and
directors. The American Arbitration Insurers expressly reserve and retain all of their rights,
claims and defenses with respect to any past, present or future claim, complaint, cross-complaint,
counterclaim or proceeding that is brought by one or more of the Securities Plaintiffs in the
Merck-Vioxx Securities Action or in any other matter commenced against an American
Arbitration Insurer with respect to its providing insurance coverage to Merck's former or current
senior officers and directors, including, without limitation, any defense based upon the
arbitration clauses found in, or applicable to, the Insurance Policies. Nothing herein shall be
construed as a waiver by the American Arbitration Insurers of such arbitration clauses or the
rights provided thereunder.
4. The conditions set forth in this Stipulation and Order shall not be construed as an
admission or concession or as evidence as to the validity of any rights, defenses, and/or claims
the American Arbitration Insurers may have against the Securities Plaintiffs in the Merck-Vioxx
Securities Action, or in any other related matter. Except as otherwise provided herein,
Securities Plaintiffs reserve and retain all of their rights, claims and defenses with respect to any
past, present or future claim, complaint, cross-complaint, counterclaim or proceeding that is
brought by one or more of the Securities Plaintiffs in the Merck-Vioxx Securities Action or in
any other related matter, including, without limitation, any defense Securities Plaintiffs may have
should an American Arbitration Insurer seek to invoke any provision in or applicable to the
Insurance Policies.
3
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 4 of 16
11, SERVICE OF THIRD-PARTY SUBPOENAS ON AMERICANARBITRATION INSURERS
5. Should the Court deny, in whole or in part, the motions filed by Merck and the
Individual Defendants to dismiss the Corrected Consolidated and Fourth Amended Class Action
Complaint and/or the discovery stay prescribed by the Private Securities Litigation Reform Act
of 1995,15 U.S.C. §78u4(b)(3)(B), be lifted, the American Arbitration Insurers each agree to
accept service of a subpoena that is issued by the Securities Plaintiffs collectively in the manner
prescribed by Fed. R. Civ, P. 45, served by overnight delivery to the individuals identified on
Schedule A annexed hereto, and which calls for the respective American Arbitration Insurers to
produce documents and/or provide testimony on their respective behalves pursuant to Fed. R.
Civ. P. 30(b)(6). By consenting to the terms of this agreement, the American Arbitration
Insurers do not waive any ether rights (i.e., rights other than with respect to the propriety of the
above-mentioned manner of service of a subpoena on the insurers) that they may have pursuant
ito Fed. R. Civ. P. 45 to object, move to quash, or otherwise respond with respect to the
subpoena.
IIl. INTEGRATION / AMENDMENTS
6, This Stipulation and Order contains the entire agreement among the Parties and
there has been no promise, inducement or agreement not herein expressed which has been made
or entered into by the Parties. This Stipulation and Order shall not be altered, changed or
modified accept in writing and signed by each Party or an authorized representative thereof,
IV. NOTICE
7. All notices or other communications, other than the service of subpoenas as set
forth in Paragraph No. 5 above, that the Parties desire or are required to provide with respect to
this Stipulation and Order, including those concerning an American Arbitration Insurer's intent.
4
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 5 of 16
I
to invoke its purported rights under an arbitration clause contained in its respective Insurance
Policy against the Securities Plaintiffs, shall be provided in writing to all the other Parties at the
addresses noted below or such other addresses as a Party may designate in writing from time to
time.
If to Securities Plaintiffs:
David A.P. Brower, 1',sq.Milberg Weiss Bershad & Schulman 1,1,11One Pennsylvania PlazaNew York, NY 10119
Mark Levine, Esq.Stull, Stull & Brody6 (vast 45th Street, 5th FloorNew York, NY 10018
Co-Lead C'ournel for Securities Plaintifft
If to the American Arbitration Insurers:
Angclo G. SavinoMound Cotton Wollan & GreengrassOne Battery Park PlazaNew York, NY 10004Attorneys for ACE American Insurance Company
Gary V. DixonRoss, Dixon & Bell, LLP2001 K Street, NWWashington, DC 20006-1040Attorneys for ATnerican Casually Company of Reading. P,4
Lisa ShrewsherryTraub Eglin Lieberman Straus LLP7 Skyline DriveHawthorne, NY 10532Atturneys fur Axis Reinsurance Company
5
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 6 of 16
Michael R. GoodsteinBailey Cavalieri LLCOne Columbus10 West Broad StTeet, Suite 2100Columbus, OH 43215-3422Attorneys for St. Paul Mercury Insurance Company
.loan M. GilbrideKaufman Borgecst & Ryan, LLP200 Summit Lake DriveValhalla, NY 10595Attorneys for Twin City lire Insurance Company
Antonia B. IannielloSteptoe & Johnson LLP1330 Connecticut Avenue, NWWashington, DC 20036-1795Atiorneys .for Zurich American Insurance Company
Stephen P. DavidsonDLA Piper Rudnick Gray Cary US LLP1251 Avenue of the AmericasNew York, NY 10020Attorneys for Federal Insurance Company
Ifto Defendants
Robert H. BaronCravath Swainc & Moore, LLPWorld Wide Plaza.825 Eighth AvenueNew York, NY 10019Attorneys for Defendants Merck & Co., Inc., Raymond V. C7ilrnartin, Kenneth C.Frazier, Richard C. Henriques, Peter S. Kim, Judy C. Lewent, Alise S. Reicin,Lawrence A. Bossidy, William C.`. Bowen, Johnnetia B. Cole, William B. Harrison,William N. Kelley, Heidi G. Miller, Thomas E_ Shenk, Arose M. Tatlock, SamuelG. pier, David Anslic'e, Richard T Clark, Celia Colbert, Linda M. Distlerath,Caroline Dorsca, Bernard .l. Kelley, Per G.H. La_fberg, Per Wold-Olsen, Lloyd C.Elam, and Mall FitzGerald
Martin L. PerschetSchulte, Roth &, Zabel, LL.P919 Third AvenueNew York, NY 10022Attorneys for Dgfendant Edward Scolnick
6
iCase 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 7 of 16
V. NO CONSTRUCTION AGAINST ANY PARTY
8. The Parties acknowledge that counsel for each of them has participated in the
drafting of this Stipulation and Order and, thus, it is not to be interpreted for or against any Party
as the drafter of the Stipulation and Order, or for any other reason. The Parties acknowledge that
they have been represented by counsel of their choice in all matters connected with the
negotiation and preparation ol'this Stipulation and Order, that they have reviewed this
Stipulation and Order with their counsel and that they fully understand the terms of this
Stipulation and Order and the consequences hereof.
VI. COUNTERPARTS
91 This Stipulation and Order may be executed by the Parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but al I such
counterparts shall together constitute but one and the same instrument.
SECURITIES PLAINTIFFS
MILBERG WFTSS BERSHAD & STULL, STULL & BRODY
SCHULMAN LLP Attorneys for Securilies PlaintiffsAttorneys for Securilies Plaint ffs
By:- /0^ 13y: ^ !' ' ll^ nt avid . P. Brower Mark Levinee
DA,'1.'.F1): March , , 2006 DATED: March - ; 2006
7
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 8 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN ROSS, DIXON & BELL, LLPGREENGRASS Attorneys fur American Casualty C ornpany ofAttorneys fvr ACE American Insurance Reading, PACompany
By: f By: An 4- to Cy. Savinc Paul C. Vitrano
DATED: March 3,2006 DIETED: March —, 2006
TRAUB EGLIN LiEBERMAN BAILEY CAVALIERI LLCSTRAUSS LLP Attorneys fur St. Paul MercuryAttorneys for Axis Reinsurance Company lh.wrance Company
By: By: Jonathan Reed Michael R. Goodstein
DATED: March , 2006 DATED: March _, 2006
KAUF'MAN FJOROI;:>~ST RYAN LIP STEPTOE & JOHNSON LLPAttorneys , for Twin City Fire Insurance Attorneys, for Zurich American InsuranceCompany company
By: By: Joan M. Gilbride Antonia B. lanniello
DATED: March , 2006 DATED: March , 2006
DLA PIPER RUDNICK GRAY CARY US LLPAttorneys for Federal Insurance Company
Cry: Stephen P. Davidson
DATED, March , 2006
8
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 9 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys for American Casualty Company ofAttorneys for ACE American Insurance Reading, PACompany
By: By:, (/JC
Angelo G. Savino Paul C. Vitrano
DATED: March , 2006 DATED: March 7, 2006
TRAUB EGIAN 1AFBFRMAN BAILEY CAVALIERI LLCSTRAUSS LLP Attorneys for k. Paul MercuryAttorneys ,for Axis Reinsurance Company Insurance Company
By: By: Jonathan Reed Michael R. Goodstein
DATED: March , 2006 DATED: March , 2006
KAUFMAN BORGEEST & RYAN LLP STEPTOE & JOHNSON LLPAttorneys for Twin City Ifire Insurance Attorneys far Zurich American InsuranceConnpany Company
By: By:Joan M. Gilbride Antonia I3. lanniello
DA'IED: March , 2006 DATED: March —, 2006
DLA PIPER RUDNICK GRAY CARY IJS LLPAttorneys for Federal Insurance Company
By:
Stephen P. Davidson
DATED: March , 2006
fi
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 10 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys for American CasualoJ Company of
Attornfys .for ACE American Insurance Reaming, PACompany
By: By. Angelo G, Savino Paul C. Vitrano
DATED: March —, 2006 DATED: March —, 2006
TRAUB E'GLIN I..,IEBERMAN BAILEY CAVALIERI LLCSTRAUS, LLP Attorneyw_for St. Paul MercuryAttorneys for Axis Reinsurance Company Insurance Company
By.Tnaftn R d By Michael R. Goodstein
DATED: March, 2006 DATED- March 2006
KAUFMAN BORGFEST & RYAN LLP STEPTOE & JOHNSON LLPAttorncys .fnr Twin Cite Fire Insurance Attorneys for Zurich American InsuranceCompany Company
By , By:Joan M, Gilb.ride Antonia. B. lanniello
DATED: March —, 2006 DATED: March _, 2006
DLA PIPER RUDNICK GRAY CARY US LLPAttorneys .filr Federal lnsurance Company
By:
Stephen P. Davidson
DATED: March —, 2006
8
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 11 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys farAmerican Casualty Company ofAttorneys , for ACE A merican Insurance Reading, PACompany
By: By: Angelo G. Savino Paul C_ Vitrano
DATED: March —, 2006 DATED: March _, 2006
TRAUB FGLIN LIEBERMAN BAILEY CAVALIFRI LIa
STRAUSS LLP Attorneys for St_ Paul Mc}t
Attorneys for Axis Reinsul-once Company Insurance Company
By: By[^r̂+! 'terJonathan Iteed r ichae Goodstein
(DATED: March _, 2006 DATED: March, 2006
KA.UFM.AN BORGEEST & RYAN LLP STEPTOE. & JOHNSON LLPAucirneys fur Twin City Fire Insurance Artorneyys for Zurich American InsuranceCompany Company
By: By: Joan M. Gilbride Antonia B. Ianniello
DATI?D: March 2006 DATED: March —, 2006
DLA PIPER RUDNICK GRAY CARY US LLPAltu1°neys for Federal Insurance Company
By:
Stephen R Davidson
DATED- March —, 2006
8
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 12 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOI LAN & ROSS, DIXON & BELL, LLPRFENGRASS Attorneys.forAmerican Casualty Company of
Attorneys . far AC E American Insurance Reading, PACompany
By: By: Angelo G. Savino Paul C. Vitrano
DATED: March , 2006 DATED: March, 2006
TRAUB EGLIN LIEBERMAN BAILEY CAVALIERI LLC;STRAUSS LLP Attorneys fir St. Paul MercuryAttorneys firAxis Reinsurance Company Insurance Company
By: By:Jonathan Reed Michael R. Goodstein
DATED: March , 2006 DATED: March —, 2006
KAUI{MAN 13ORGREST & RYAN LLP S"1'.FPTOE & JOHNSON LL 11
Attorneys fr3r Twin City Fire Insurance Attorneys. for Zurich American InsuranceCompany Company
B ( 7 By. Joan M. Gilb.ride Antonia B. Iannicllo
DATED: March, , 2006 DATED: March _, 2006
DLA PIKER RUDNICK CRAY CARY US 1,LPAttorneys for Federal Insurance Company
By: Stephen P. Davidson
DA,rF:D: March , 2006
8
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 13 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys,for American Casualty Company ofAttorneys fbr ACE American Insurance leading, PACompany
By: By: Angelo G. Savino Pahl C. Vitraw
DATED. March —, 2006 DATED: March —, 2006
TRAUB EGL1N LIEBERMAN BAILEY CA'VALIERI LLC.STRAUSS LLP Attorneys,for St. Paul MercuryAttorneys for Axis Reinsurance Company Insurance Company
By: By:Jonathan Reed Michael R. Goodstein
DATED: March_, 2006 DATED: March —, 2006
KAUFMAN BORGEEST RYAN LLP STEPTOE JOHNSON LLPAttorneys , for• Twin City Fire Insurance Attorneys for Zurich American InsuranceCompany Company
By, By: J6'4-^Joao M. Gilbridc Antonia B. Ianniello
DATED: March —, 2006 DATED: March 5, 2006
DLA PIPER RUDNICK CRAY CARY US LLPAttorneys fbr Federal Insurance Company
By:Stephen P. Davidson
DA'Z'ED: March —, 2006
S
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 14 of 16
AMERICAN ARBITRATION INSURERS
MOUND COTTON WOLLAN & ROSS, DIXON & DELL, LLPGREENGRASS Attorneys for American Casualty Company ofAllvrneys frar ACE American Insurance Reading, PACompany
By: By:_ Angelo G. Savino Paul C'., Vitrano
DATED: March_, 2006 DATED: March , 2006
TRAUB EGLIN LIEBERMAN BAILEY CAVALIERI LLCS' I RAUSS LLP Attorneys for ,S1. Paul MercuryAttorneys for Axr.'s Reinsurance Company Insurance Company
By: By: Jonathan Reed Michael R. Goodstein
DATED: March , 2006 DATED: March , 2006
AUFMAN 130RGEEST & RYAN LLP STEPTM & JOHNSON LLPAllorneys ,for Twin Cidy Fire Insurance Attorneys for Zurich American InsuranceCompany C:'ornpany
By: By-Joan. M. Gilbride Antonia B. Ianniello
DATED: March w., , 2006 DATED: March 2006
DLA PIPER RUDNICK GRAY C:ARY US LLPAttorneys jbr Federal Insurance Company
B r
^Stephcn P. Davidson
DA'1'I?D: March, 2006
8
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 15 of 16
SO ORDERED:
Stank y hesler, U.S.D.J.
7979274
9
Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 Page 16 of 16
SCHEDULE A
Subpoena to: Copy to: ACE American Insurance Company:
Douglas Poetzsch Angelo G. SavinoSenior Vice President Mound Cotton Wollan & GreengrassACE American insurance Company One Battery Park Playa140 Broadway, 401h r loor New York, NY 10004New York, NY 10005
Zurich American Insurance Company:Henry Chun Antonia B. IannielloZurich American Insurance Company Steptoe & Johnson LLPOne Liberty Plaza, 30 `t' floor 1330 Connecticut Avcnue, NWNew York, NY 10006 Washington, D.C. 20036-1795
Federal Insurance Company:Stephen P, DavidsonDLA Piper Rudnick Gray Cary US LLP1251 Avenue of the AmericasNew York, New York 10020
Axis Reinsurance Company:Julieruic Duncai} Lisa ShrewsburyConnell Corporate Park Traub Eglin Lieberman Strauss LLPTliree Cminell Drive 7 Skyline DriveBerkeley Heights, NJ 07922 Hawthorne, NY 10532
An-ierican Casualty Company of Reading PA:Kenneth W. Lord, Esq. Gary V. DixonCNA Global Specialty Lines Ross, Dixon & Bell, LLP40 Wall street, 8"' floor 2001 K Street, N WNew York, NY 10005 Washington, D.C. 20006-1040
St. Paul Mercury insurance C:onipany:Michael R. GoodsteinBailey Cavallieri LLCOne Columbus10 West Broad Street, Suite 2100Columbus, OH 43215-3422
Twin City Fire insurance Company:
Anthony J. Fowler, Esq. Joan M. GilbrideAsst. Vice President and C."laisns Counsel Kaulinan Borgeest & Ryan LLPHartford Financial PTodU.CtS 200 Sui.n nit Lake Drive2 Park Avenue Valhalla, New York 10595New 'York, NY 10016