Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-03395/USCOURTS-cand-5_05-cv-03395-24/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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The holding of this court is limited to the facts and the particular circumstances

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underlying the present motion.

“PSLRA” refers to the Private Securities Litigation Reform Act of 1995. 2

ORDER, page 1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

In re MERCURY INTERACTIVE CORP.

SECURITIES LITIGATION,

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This Document Relates To: 

ALL ACTIONS

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Case No.: C 05-3395 JF (PVT)

ORDER RE RECONSIDERATION OF

LEAD PLAINTIFF’S MOTION TO

LIFT PSLRA STAY ON DISCOVERY

On February 27, 2007, District Judge Jeremy Fogel issued an order remanding Lead

Plaintiff’s Motion to Lift PSLRA Stay on Discovery for reconsideration in light of changed

circumstances. On February 28, 2007, this court requested supplemental briefing to address certain 1

specific issues. The parties have filed their supplemental briefs. Based on the briefs and arguments

submitted, and the file herein,

IT IS HEREBY ORDERED that, upon reconsideration, Lead Plaintiff’s motion for relief

from the PSLRA stay on discovery is DENIED, conditioned on the document preservation and 2

notice provisions set forth herein. In light of the state court’s grant of the state court defendant’s

demurrer, the risk of undue prejudice to Lead Plaintiff has been significantly reduced at this time.

IT IS FURTHER ORDERED that Defendant Mercury Interactive Corp. (“Mercury”) shall

Case 5:05-cv-03395-JF Document 283 Filed 03/20/07 Page 1 of 2
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ORDER, page 2

continue to maintain in a secure location one copy of all documents that it produced to the Securities

and Exchange Commission, and shall take diligent steps to ensure that any other documents which

may be relevant to this action are not lost in the course of Hewlett-Packard’s acquisition of Mercury.

IT IS FURTHER ORDERED that the individual defendants in this action who have D&O

insurance policies shall promptly notify the court and Lead Plaintiff if any of them, or any of their

insurance carriers, enter into any settlement discussions with any individual or entity related to any

of the acts, omissions or conduct which are at issue in this lawsuit.

IT IS FURTHER ORDERED that, Mercury shall promptly notify the court and Lead Plaintiff

of any and all determinations made regarding whether or not there is any coverage under any

Defendant’s Directors & Officers (“D&O”) liability insurance. One of the main reasons this court

previously granted limited relief to Lead Plaintiff was a concern that Lead Plaintiff was at risk of

suffering undue prejudice if a settlement with the individual defendants in the related state court case

exhausted those Defendants’ D&O insurance before Lead Plaintiff had an opportunity to conduct

discovery and formulate a settlement position. In its supplemental brief, Mercury informed the court

that it has in fact made claims against the individual Defendant’s D&O insurance policies, but that

the insurers are contesting coverage. Until there is a determination that any of the D&O policies

cover the acts complained of, there is not likely to be any payout of insurance proceeds. Thus there

is currently little risk that the insurance proceeds will be exhausted before Lead Plaintiff can obtain

sufficient discovery to formulate a settlement position.

IT IS FURTHER ORDERED that Mercury shall promptly notify the court and Lead Plaintiff

if it provides to any individual or entity with any further discovery–formal or informal–related to any

of the acts, omissions or conduct which are at issue in this lawsuit, whether in connection with a

pending lawsuit or a potential lawsuit.

IT IS FURTHER ORDERED that the provisions of this order shall expire upon either the

date that the PSLRA stay is lifted (whether by operation of law or further order of this court), or the

final termination of this action, whichever occurs first.

Dated: 3/20/07

 

PATRICIA V. TRUMBULL

United States Magistrate Judge

Case 5:05-cv-03395-JF Document 283 Filed 03/20/07 Page 2 of 2