Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-05242/USCOURTS-cand-5_06-cv-05242-3/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 12:22 Securities Fraud

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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

CASE NO. C 06-05157 JF

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DARRYL P. RAINS (State Bar No. 104802)

MORRISON & FOERSTER LLP

755 Page Mill Road

Palo Alto, California 94304-1018

Telephone: (650) 813-5600

Facsimile: (650) 494-0792

Email: DRains@mofo.com

DIANE E. PRITCHARD (State Bar No. 96999)

MORRISON & FOERSTER LLP

425 Market Street

San Francisco, CA 94105-2482

Telephone: (415) 268-7000

Facsimile: (415) 268-7522

Email: DPritchard@mofo.com

Attorneys for Defendants

TIMOTHY K. MONTGOMERY, WILLIAM J. TAMBLYN, 

GREGORY M. AVIS, WILLIAM A. HASLER, ANDREI M. 

MANOLIU, and DITECH NETWORKS, INC. UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

In re DITECH NETWORKS, INC. 

DERIVATIVE LITIGATION

This Document Relates To: All Actions

Case No. C 06-05157 JF

STIPULATION AND 

[PROPOSED] ORDER 

(1) RELATING AND 

CONSOLIDATING RELATED 

ACTIONS, (2) APPOINTING CO- LEAD PLAINTIFF AND CO- LEAD PLAINTIFFS’ COUNSEL, 

AND (3) RE-SETTING CASE 

MANAGEMENT CONFERENCE 

WHEREAS two actions were filed in this Court, Donald W. Newman, Derivatively on 

Behalf of Nominal Defendant Ditech Networks, Inc. v. Timothy K. Montgomery, et al. (Case No. 

C 06-05157 JF) (“Newman”) and James McKenna, Derivatively on Behalf of Nominal Defendant 

Ditech Networks, Inc. v. Timothy K. Montgomery, et al. (Case No. C 06-05242 JF) (“McKenna”), 

Case 5:06-cv-05242-JF Document 18 Filed 12/05/06 Page 1 of 6
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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

CASE NO. C 06-05157 JF

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which purport to be derivative actions brought on behalf of Ditech Networks, Inc. (“Ditech”) 

against various individuals alleging that those defendants engaged in the improper backdating of 

certain stock option grants during the period 1999 through 2001; and

WHEREAS the Newman and McKenna actions already have been (i) related pursuant to 

this Court’s orders entered October 2, 2006 in those actions, and (ii) consolidated as In re Ditech 

Networks, Inc. Derivative Litigation (Case No. C 06-05157 JF), pursuant to this Court’s order 

entered November 7, 2006, a copy of which is attached hereto as Exhibit A (“Consolidation

Order”); and 

WHEREAS the Consolidation Order provides that “[a]ny other actions now pending or 

later filed in this Court which arise out of or are related to the same facts as alleged in [Newman

and McKenna] shall be consolidated for all purposes, if and when they are brought to the Court’s 

attention” (Exh. A at ¶ 2); and 

WHEREAS a new action, entitled Kenneth Lau, Derivatively on Behalf of Ditech 

Networks, Inc. v. Timothy K. Montgomery, et al. (Case No. C 06-6877 PVT) (“Lau”), has been 

filed in this Court; and

WHEREAS the Lau complaint also purports to be brought derivatively on behalf of 

Ditech, against many of the same defendants as the Newman and McKenna cases, and seeks relief 

on behalf of the company arising out of alleged improper backdating of stock option grants since 

1999; and

WHEREAS Lau arises out of or is related to the same facts as Newman and McKenna (see

Exh. A at ¶ 2), the actions concern substantially the same parties, property, transaction or event, and it appears likely that there will be an unduly burdensome duplication of labor and expense if 

the cases are conducted before different judges (see Civil L. R. 3-12(a)); and

WHEREAS Lerach Coughlin Stoia Geller Rudman & Robbins, Counsel for plaintiff 

Kenneth Lau, and Schiffrin & Barroway, Counsel for plaintiffs Donald W. Newman and James 

McKenna, have agreed to a structure by which Lau, Newman and McKenna will be Lead 

Plaintiffs, with their counsel Lerach Coughlin and Schiffrin & Barroway serving as Co-Lead 

Counsel in this action; and

Case 5:06-cv-05242-JF Document 18 Filed 12/05/06 Page 2 of 6
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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

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WHEREAS nominal defendant Ditech Networks, Inc. takes no position as to the 

appointment of Kenneth Lau, Donald W. Newman and James McKenna as Lead Plaintiffs and 

Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Schiffrin & Barroway, LLP as Co- Lead Counsel; and 

WHEREAS a case management conference date set in one of the two originally 

consolidated actions was vacated, but a case management conference set for December 1, 2006 in 

the other action was not vacated; and

WHEREAS the Consolidation Order provides for the filing of a Consolidated Complaint 

by December 22, 2006, with a response to the Consolidated Complaint due 45 days after the 

service of the Consolidated Complaint, and sets out a briefing schedule for any motion to dismiss 

(see Exh. A at ¶¶ 16-19); and

WHEREAS the parties believe it would serve the interests of judicial efficiency and 

effective case management to conduct the case management conference after the Lau action has 

been consolidated in this proceeding,

NOW, THEREFORE, IT IS HEREBY STIPULATED by and among plaintiff Donald W. 

Newman, plaintiff James McKenna, plaintiff Kenneth Lau, and defendant Ditech, through their 

respective counsel of record, as follows: 

1. The Lau action should be related to and consolidated for all purposes with In re 

Ditech Networks, Inc. Derivative Litigation, Case No. C 06-05157 JF, pursuant to the Court’s 

Consolidation Order, and all pleadings in Lau shall be filed in conformity with the Court’s 

Consolidation Order. 

2. A Consolidated Complaint including the Newman, McKenna and Lau claims, 

which will supersede all existing complaints, including the Lau complaint, shall be filed and 

served no later than December 22, 2006. 

3. The case management conference previously set in one of the consolidated actions 

for December 1, 2006 at 10:30 a.m. should be re-set in the consolidated actions for February 23, 2007 at 10:30 a.m., in the Courtroom of the Honorable Jeremy Fogel.

Case 5:06-cv-05242-JF Document 18 Filed 12/05/06 Page 3 of 6
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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

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Dated: November 28, 2006 SCHIFFRIN & BARROWAY LLP

ERIC L. ZAGAR

SANDRA G. SMITH

Proposed Co-Lead Counsel for Plaintiffs

 - and - BRAMSON, PLUTZIK, MAHLER & 

BIRKHAEUSER, LLP

ALAN R. PLUTZIK

L. TIMOTHY FISHER

KATHRYN A. SCHOFIELD

Counsel for Plaintiffs Donald W. Newman

and James McKenna

By s/ Sandra G. Smith Dated: November 28, 2006 LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP

WILLIAMS S. LERACH

DARREN J. ROBBINS

TRAVIS E. DOWNS III

SHAWN A. WILLIAMS

Proposed Co-Lead Counsel for Plaintiffs

 - and - SHUMAN & BERENS LLP

KIP B. SHUMAN

Counsel for Plaintiff Kenneth Lau

By s/ Aelish Baig 

Case 5:06-cv-05242-JF Document 18 Filed 12/05/06 Page 4 of 6
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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

CASE NO. C 06-05157 JF

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Dated: November 28, 2006 MORRISON & FOERSTER LLP

DARRYL P. RAINS

DIANE E. PRITCHARD

By s/ Diane E. Pritchard Diane E. Pritchard

Counsel for Defendants DITECH 

NETWORKS, INC., TIMOTHY K. 

MONTGOMERY, WILLIAM J. 

TAMBLYN, GREGORY M. AVIS, 

WILLIAM A. HASLER, and ANDREI M. 

MANOLIU

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STIPULATION TO RELATE AND CONSOLIDATE ACTIONS AND RE-SET CASE MANAGEMENT CONFERENCE

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I, Diane E. Pritchard, am the ECF User whose ID and password are being used to file this

Stipulation and [Proposed] Order (1) Relating and Consolidating Related Actions, (2) Appointing 

Co-Lead Plaintiff and Co-Lead Plaintiffs’ Counsel, and (3) Re-Setting Case Management 

Conference. In compliance with General Order 45, X.B., I hereby attest that Sandra G. Smith and 

Aelish Baig, attorneys for plaintiffs, have concurred in this filing.

Dated: November 28, 2006 MORRISON & FOERSTER LLP

DARRYL P. RAINS

DIANE E. PRITCHARD

By s/ Diane E. Pritchard Diane E. Pritchard

Counsel for Defendants DITECH 

NETWORKS, INC., TIMOTHY K. 

MONTGOMERY, WILLIAM J. 

TAMBLYN, GREGORY M. AVIS, 

WILLIAM A. HASLER, and ANDREI M. 

MANOLIU

PURSUANT TO STIPULATION, IT IS SO ORDERED.

Dated: ________________________

______________________________________

 Honorable Jeremy Fogel

 United States District Judge

11/28/06

Case 5:06-cv-05242-JF Document 18 Filed 12/05/06 Page 6 of 6