oO CO sD WN ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page1of9 PageID #:5954 JONATHAN A. SHAPIRO cau ae WILMER CUTLER PICKE G HALE AND DORR LLP 950 Page Mill Road Palo Alto, CA 94304 Tel: (650) 858-6101 Fax: (650) 858-6100 |jonathan.shapiro@wilmerhale.com ANDREA J. ROBINSON (PRO HAC VICE) TIMOTHY J. PERLA (PRO HAC VICE WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 Tel: (617) 526-6000 Fax: (617) 526-5000 andrea.robinson@wilmerhale.com timothy.perla@wilmerhale.com Attorneys for Defendant Life Insurance Company of the Southwest UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION JOYCE WALKER, KIM BRUCE Case No.: 10-09198 JVS(RNBx) HOWLETT, and MURIEL SPOONER on behalf of themselves and all others EX PARTE APPLICATION FOR similarly situated, . ENTRY OF ORDER RE: CONTACTS WITH PUTATIVE CLASS MEMBERS; Plaintiffs, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT VS. THEREOF LIFE INSURANCE COMPANY OF Judge James Selna THE SOUTHWEST, a Texas Courtroom: 10C corporation, and DOES 1-50, Defendant. EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 2of9 PageID #:5955 EX PARTE APPLICATION 2 Pursuant to Fed. R. Civ. Proc. 6(c)(1)(A) and 23(d) and Local Rule 7-19, Life 3 Insurance Company of the Southwest (““LSW”) respectfully files this ex parte 4 i ie ; ‘ : application for an entry of order regarding contacts with absent members of the putative~ - 5 class. 6 ‘ : : : Plaintiffs oppose this motion. On March 5, 2012, Jonathan Shapiro, counsel for 7 eos LSW attempted to contact Brian Brosnahan, lead counsel for Plaintiffs by telephone. 8 i : Mr. Brosnahan was unavailable so Mr. Shapiro spoke to Mr. Brosnahan’s associate, 9 Jeanette Barzelay, and orally advised her that LSW would be filing an ex parte 10 a ; ' , application for an order governing contacts with absent members of the putative class on 11 March 5, 2012. See Declaration of Jonathan Shapiro (“Shapiro Dec.”) § 2. 12 ‘ ton : ea This motion is based on the attached memorandum of points and authorities, the 13 : : attached Exhibit A (a protective order entered by this Court in Jn Re: Toyota Motor "7 Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability 15 Litigation), the attached Exhibit B (a blackline comparing the substantive texts of 16 LSW’s proposed order and Exhibit A), the declaration of Jonathan A. Shapiro and 17 exhibits thereto, the pleadings, records and files in this case, and such other matters as 18 ' may be considered by the Court. 19 DATED:March 5, 2012 Respectfully submitted, 20 WILMER CUTLER PICKERING HALE AND 24 DORR LLP 22 3 By: /s/ Jonathan A. Shapiro Jonathan A. Shapiro (257199) 24 Andrea J. Robinson (pro hac vice) 25 Timothy J. Perla (pro hac vice) 26 Attorneys for Defendant Life Insurance Company of 27 the Southwest 5D 28 EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 3of9 PageID #:5956 MEMORANDUM OF POINTS AND AUTHORITIES I. Introduction LSW asks this Court to enter an order governing contacts with absent members of the putative class. LSW’s proposed order is identical in almost every respect to the Court’s order entered in the Toyota multi-district litigation.' Compare Order, In re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation, 8:10ML2151 JVS (FMOx) (Dkt. 2200) (C.D. Cal. Feb. 3, 2012) (attached as Exhibit A) with LSW’s Proposed Order; see also Exhibit B (blackline comparing substantive text of two orders). LSW’s proposed order differs from the Court’s order in Toyota in only two substantive respects. First, LSW’s proposed order prohibits Plaintiffs from contacting minors (children). Second, it prohibits Plaintiffs from contacting LSW customers who are not members of the proposed, putative class. This order is necessary because Plaintiffs have already sent letters to LSW customers, using personal identifying information produced by LSW in the course of this litigation. This would not, in itself, be objectionable. But Plaintiffs sent at least one letter to a twelve-year old girl who was not even a member of the proposed class, leaving her mother with the impression that LSW was complicit in the communication. Mistakes happen. Yet Plaintiffs have refused to cooperate with LSW to prevent a similar mistake from happening again. An ex parte order is necessary to prevent Plaintiffs from using the threat of improper interference with LSW’s business relationships to obtain leverage in this litigation. In the alternative, an ex parte order is necessary to maintain the status quo until the parties can appear before the Court in a non-chaotic manner. Il. Facts ' Per L.R. 7-19: lead opposing counsel is Brian Brosnahan of Kasowitz Benson Torres & Friedman LLP. 101 California St., Suite 2300, San Francisco, CA 94111. His phone number is (415) 655-4337. His email address is bbrosnahan@kasowitz.com. sae EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 4of9 PageID #:5957 On February 13 or 14, 2012, LSW received a complaint from an policyholder who was upset about a letter sent by Plaintiffs to her twelve-year-old daughter (the insured on her mother’s LSW policy). Shapiro Dec., Ex. 2 at 1. The young girl’s information was produced by LSW in connection with this lawsuit. Jd. The application stated five times that she was a “minor” and her age appeared more than thirty times on other documents in the file produced by LSW. See id. The mother was further upset because Plaintiffs’ letter had left her with the impression that LSW was somehow complicit in Plaintiffs’ communication. See id.; Shapiro Dec., Ex. 1 at 1 (copy of Plaintiffs’ letter sent to another policyholder) (“We received your name from LSW because, as a purchaser of an LSW EIUL policy after September 24, 2006, you are a member of the proposed class on who behalf the Plaintiffs have brought this case.”). Insureds, like the twelve-year-old girl, who did not purchase the policy are not members of the proposed class. See Compl. { 64. In this case, the young girl’s mother purchased the policy before September 24, 2006, so the mother is not a member of the proposed class either. See id. LSW quickly wrote to Plaintiffs, letting them know about the mother’s complaint and asking that Plaintiffs refrain from contacting any more of LSW’s customers until the parties could reach an agreement to ensure that this error was not repeated. See Shapiro Dec., Ex. 1 at 4.7 On February 21, 2012, Plaintiffs responded. See Shapiro Dec., Ex. 4. Plaintiffs acknowledged that they had sent a letter to a minor who was not the policy purchaser and whose policy was, in any event, outside the class period. See id. at 2. But Plaintiffs did not apologize or offer a solution to prevent this inappropriate contact from * LSW has made its own mistake (accidentally sending bulk mail to an adult, who is a represented party), for which LSW has apologized profusely. See Shapiro Dec., Ex. 3 at 1. This only serves to underline the need for some Court oversight of bulk mailings to individuals and children. =e EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page5of9 PageID #:5958 being repeated—they blamed LSW for their counsel’s decision to write to the child. See id. (“Our letter was apparently sent to the ... family based on an error by LSWI.]”).° LSW replied on February 28, explaining that the parties’ joint stipulation required LSW to produce a sample of “all Paragon or Provider universal life insurance policies issued in California” and not merely a sample of files from policies issued within the class period. See Revised Joint Stipulation Regarding Plaintiffs’ Motion to Compel Production of Documents, Sept. 13, 2011 (“Joint Stipulation”), Dkt. 100 at 2 (emphasis added); Shapiro Dec. Ex. 5 at 2. In its letter, LSW attached a copy of the Court’s order in Toyota regarding contacts with absent class members and asked whether Plaintiffs would agree to the entry of a similar order, subject to the revision that “no children (people under the age of 18) will be contacted under any set of circumstances, nor will Plaintiffs contact anyone who is not even hypothetically a member of your proposed class[.]” See id. at 1-2. On March 2, Plaintiffs responded. Plaintiffs refused to agree to LSW’s proposed order unless (i) LSW would agree to exempt Plaintiffs from complying with the Order with respect to the 400+ persons to whom Plaintiffs had already sent their original letter requesting assistance and information; and (ii) LSW agreed to send an inaccurate and unnecessary “corrective” notice* to policyholders who had received an earlier mailing from LSW and. See Shapiro Dec., Ex. 6 at 4 (“Plaintiffs are willing to agree to entry of an order along the lines of the Toyota order if LSW complies with the requests set forth in this letter...””) (enclosing “corrective notice” described as “imperative that LSW send”) > Yet Plaintiffs offered no legitimate reason that they might have to contact children or LSW * Plaintiffs’ only NU remedy was to send another letter to minors, explaining that the original letter as intended for the policies’ purchasers. See id. at 5. ; ; A copy of the letter to which Plaintiffs object is attached as Shapiro Dec., Ex. 8. As the Court will see, the substance of the letter is unobjectionable. Obviously, it should not have been sent to Mr. Howlett and LSW has apologized repeatedly for that mistake. oe ae If the Court does not believe that a toll-free number is warranted in this case, then LSW has no eye to Plaintiffs’ eee enon that the toll-free-number provision be omitted. See Shapiro Dec., Ex. 6 at 4. LSW does not agree, however, with Plaintiffs’ suggestion that they should be exempt from the order when communicating with individuals who are responding to Plaintiffs” first letter. Having already once : suggested that LSW was complicit in turning over ifs customers’ information, Plaintiffs should be required to set the record straight if they talk to these people again. EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 6of9 PageID #:5959 customers who are not even hypothetically members of their proposed class. See id. Their unreasonable refusal to agree to these basic limits is an unsubtle attempt to bully LSW by threatening its business relationships. That attempt should not be rewarded. On March 5, 2012, LSW responded to Plaintiffs’ letter and orally advised Plaintiffs’ counsel that LSW would be filing this application today. See Shapiro Dec., Ex. II. Argument Under Fed R. Civ. Proc. 23(d) the Court may regulate communications with absent members of the putative class to protect them from undue interference. See In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1242 (N.D. Cal. 2000). That order must be based “on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties.” Jd. (quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 101 (1981). As set forth above, Plaintiffs have contacted at least one child of an LSW customer || —whose policy is not even with the class period—and implied that LSW was complicit in that communication. Their failure to cooperate in reaching a reasonable agreement to prevent a reoccurrence of this inappropriate contact creates a significant risk of interference with LSW’s business relationships with its customers. Moreover, Plaintiffs’ communications with putative class members included misleading statements that would lead putative class members to believe that Plaintiffs’ counsel are their attorneys when, in fact, no class has been certified and no attorney-client relationship exists. See Shapiro Dec., Ex. 1 at 1; Parks v. Eastwood Ins. Services, Inc., 235 F.Supp.2d 1082, 1084 (C.D. Cal. 2002) (noting that “The Second Circuit, state and federal district courts in California, and a leading treatise” all conclude that “no attorney-client relationship yet exists” prior to certification).° ° Plaintiffs have Sane that they believe that LSW’s own letter to policyholders was misleading. Suffice it to say, LSW’s letter was entirely Sep rEas In any event, the shared dispute over the information being conveyed by both parties simply confirms the need for a mutual, court-approved procedure to govern these communications. re EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) Oo CO “SD 28 ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 7of9 PageID #:5960 The order entered by this Court in Toyota imposed reasonable, non-prejudicial limits. It is in accord with the decisions of other courts. In Gottstein v. National Ass’n for the Self Employed, for example, the court required Plaintiffs’ counsel to include the following, similar script in each communication (written or oral) with putative class members: BY ORDER OF THE DISTRICT COURT, I REMIND YOU THAT THE ALLEGATIONS OF PLAINTIFFS ARE, TO DATE, JUST THAT— ALLEGATIONS. THEY HAVE NOT BEEN PROVEN IN A COURT OF LAW. IN ADDITION THE COURT HAS NOT YET APPROVED THIS ACTION TO PROCEED AS A CLASS ACTION. DEFENDANTS, FURTHERMORE, PRODUCED CONFIDENTIAL INFORMATION OF THEIR POLICYHOLDERS IN CONNECTION WITH THIS LITIGATION AND FOR NO IMPROPER OR _ UNETHICAL PURPOSE. 186 F.R.D. 654, 659 (D. Kan. 1999). As recognized in Toyota and Gottstein, Plaintiffs should be required to explain that LSW was required to produce policyholders’ information because of this lawsuit. Moreover, Plaintiffs have no legitimate reason to contact minors or non-class-members. The only possible effect of further communications by Plaintiffs with children or non-class members would be to harm LSW’s business relationships with its customers. As the court held in Jackson v. Motel 6 Multipurpose, Inc., plaintiffs should not be permitted to use inappropriate pre-certification communications “to coerce defendants into settlement.” 130 F.3d 999, 1004 (11th Cir. 1997). Ili. CONCLUSION For all the foregoing reasons, LSW asks that this Court enter the attached Proposed Order. wipe EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page 8of9 PageID #:5961 1 || Respectfully submitted, 2 WILMER CUTLER PICKERING HALE AND ; DORR LLP 4 ‘ By: /s/ Jonathan A. Shapiro Jonathan A. Shapiro (257199) Andrea J. Robinson (pro hac vice) Timothy J. Perla (pro hac vice) sD 8 Attorneys for Defendant Life Insurance Company of 9 the Southwest -8- 28 EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx) ase 2:10-cv-09198-JVS -RNB Document 146 Filed 03/05/12 Page9of9 Page ID #:5962 1 PROOF OF SERVICE 2 I am a resident of the State of California, over the age of eighteen years, and not a party to the within action. My business address is Wilmer Cutler Pickering Hale and Dorr 3 nS , 950 ise Mill Road, Palo Alto, CA 94304. On March 5, 2012 I served the within ocument(s): 5 LSW’S EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH PUTATIVE CLASS MEMBERS; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF JONATHAN SHAPIRO I placed the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in the United States mail at Palo Alto, CA addressed as set forth below. Oo CO DH I personally caused to be emailed the document(s) listed above to the 10 person(s) at the address(es) set forth below. 11 By transmitting via facsimile the document(s) listed above to the facsimile numbers set forth below. 12 I electronically filed the document(s) listed above via the CM/ECF 13 system. io = Brian P. Brosnahan 15 Charles N. Freiberg Jacob Foster KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 17 101 California Street, Suite 2300 San Francisco, CA 94111 16 18 cfreiberg@kasowitz.com 19 Fax No. 415-398-5030 20 Harvey R. Levine 21 LEVINE & MILLER © 550 West C. Street, Suite 1810 San Diego, CA 92101-8596 23 Ismh@levinelaw.com Fax No. 619-231-8638 oa 24 25 /s/ Jonathan A. Shapiro 26 ; Jonathan A. Shapiro 27 nthe 28 EX PARTE APPLICATION FOR ENTRY OF ORDER RE: CONTACTS WITH ABSENT MEMBERS OF THE PUTATIVE CLASS, 10-09198 JVS(RNBx)