Turberg v. Logan

          STIPULATION AND ORDER TO VACATE CERTAIN CASE MANAGEMENT DEADLINES AND SET A SCHEDULE FOR THE FILING OF AN AMENDED COMPLAINT

          PHYLLIS J. HAMILTON, District Judge.

         Pursuant to Local Rule 6-2, the parties, through their undersigned counsel, hereby stipulate to and seek the Court's approval of an order vacating the deadlines set forth in the Order Setting Case Management Conference (the "Scheduling Order") dated January 18, 2011 (Docket No. 6) and setting a schedule for the filing of an amended complaint.

         RECITALS

         WHEREAS, on November 19, 2010, plaintiff filed her shareholder derivative action (the "Derivative Action") on behalf of nominal defendant Vivus, Inc. ("Vivus" or the "Company") in this Court, against certain officers and directors of the Company;

         WHEREAS, on January 18, 2011, the Court issued the Scheduling Order. Pursuant to the Scheduling Order, the parties must: 1) meet and confer concerning initial disclosures and the subjects set forth in Rule 16(c); 2) file a joint case management statement by February 3, 2011; and 3) appear at a case management conference on February 10, 2011;

         WHEREAS, also on file in this District is a related case styled Kovtun v. Vivus, Inc., et al,, Case No. 4:10-cv-04957-PJH (originally filed on November 2, 2010) (the "Securities Class Action");

         WHEREAS, the Securities Class Action is related to the Derivative Action as defined by Local Rule 3-12 in that both actions concern substantially the same parties and events;

         WHEREAS, on January 12, 2011 the Court issued the Related Case Order, in which it found that the Securities Class Action and the Derivative Action (collectively, the "Related Actions") are related;

         WHEREAS, pursuant to the Court's January 18, 2011 Scheduling Order, the parties met and conferred and agree that because the suits arise out of a common nucleus of operative facts, the interests of judicial economy will be served by coordination of the schedule of the Related Actions;

         WHEREAS, the Court is scheduled to rule on a motion in the Securities Action to appoint a lead plaintiff and lead plaintiff's counsel, after which a new complaint is likely to be filed in the Securities Action;

         WHEREAS, new allegations in the Securities Class Action may well affect the allegations that plaintiff wishes to put forward in the Derivative Action;

         WHEREAS, defendants and nominal defendant in the Derivative Action believe they have legal attacks on plaintiff's standing to assert their derivative claims;

         WHEREAS, after discussing these matters, and in the interests of saving judicial effort and maximizing the coordination and efficiency of the Related Actions, the parties agree that the deadlines set forth in the Scheduling Order should be vacated pending the determination of the threshold legal issue in this Derivative Action of whether demand upon Vivus' Board of Directors to institute this action is excused;

         WHEREAS, no prior modifications of time have been sought in this case.

         STIPULATION

         IT IS HEREBY STIPULATED AND AGREED, by and between undersigned counsel, and pursuant to Local Rule 6-2, subject to the approval of this Court, that:

         1. Defendants shall not be required to answer, move or otherwise respond to the currently-filed complaint in this Derivative Action.

         2. Plaintiff shall have 60 days after the filing of the consolidated amended complaint in the Securities Class Action to file and serve an amended complaint (the "Amended Complaint") in the Derivative Action;

         3. Defendants shall not be required to answer, move, or otherwise respond to the Amended Complaint in this Derivative Action until 60 days after entry of an order ruling on defendants' anticipated motion to dismiss the consolidated amended complaint in the Securities Class Action. In the event that defendants file and serve any motions with respect to the Amended Complaint, plaintiff shall have 60 days to oppose such motions. Defendants shall have 45 days to reply to any such opposition.

         4. The deadlines in the Scheduling Order, including the case management conference set for February 10, 2011, shall be vacated pending the ruling on any motion to dismiss which will determine the threshold legal issue of whether demand upon Vivus' Board of Directors to institute this action is excused;

         5. Discovery in the Derivative Action is stayed until the Court has resolved any motion to dismiss, whether on standing grounds or directed to particular claims asserted in the anticipated amended complaint in the Derivative Action.

         PURSUANT TO STIPULATION, IT IS SO ORDERED.