Joint Motion to Amend the Scheduling Order — In re January 2021 Short Squeeze Trading Litigation (Dkt. 619, S.D. Fla.)

Summary

A Joint Motion to Amend the Scheduling Order in In re: January 2021 Short Squeeze Trading Litigation, Case 1:21-md-02989-CMA (Case No. 21-2989-MDL-ALTONAGA/Damian, Document 619, 7 pages), in the U.S. District Court for the Southern District of Florida, entered November 6, 2023, relating to All Actions Involving the Federal Securities Laws. Plaintiffs and Robinhood say class discovery, including expert reports and more than 20 depositions of plaintiffs, experts, and third parties, took much of their attention, and that completing discovery under the Order Setting Trial and Pre-Trial Schedule will not be possible. The motion argues that good cause exists under Rule 16(b)(4) to extend the close of discovery in this complex, data-heavy securities litigation; the certificate of service is dated November 6, 2023 over the /s/ signature of Laurence M. Rosen.

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Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 1 of 7




                          UNITED STATES DISTRICT COURT
                          SOUTHERN DISTRICT OF FLORIDA

                      CASE NO. 21-2989-MDL-ALTONAGA/Damian


    In re: JANUARY 2021 SHORT SQUEEZE
    TRADING LITIGATION



         This Document Relates to: All Actions Involving the Federal Securities Laws



                JOINT MOTION TO AMEND THE SCHEDULING ORDER
Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 2 of 7




                                                  MOTION
             Lead Plaintiff and proposed Class Representative Blue Laine-Beveridge and Named
   Plaintiffs and proposed Class Representatives Abraham Huacuja, Ava Bernard, Brendan Clarke,
   Brian Harbison, Cecilia Rivas, Doi Nguyen, Joseph Gurney, Marcel Poirier, Sandy Ng, Santiago
   Gil Bohórquez, and Thomas Cash, (“Plaintiffs”), and Defendants Robinhood Markets, Inc.,
   Robinhood Financial LLC, and Robinhood Securities, Inc. (“Robinhood” or “Defendants”),
   (collectively, the “Parties”) respectfully submit this Joint Motion to Amend the “Order Setting
   Trial and Pre-Trial Schedule, Requiring Mediation, and Referring Certain Matters to Magistrate
   Judge” (the “Scheduling Order”) (Dkt. No. 517) with respect to certain deadlines as follows:

       Deadline                         Current Date                     New Date
       Exchange opening expert          December 18, 2023                March 29, 2024
       reports
       Exchange rebuttal/reply          February 16, 2024                May 13, 2024/June 10, 20241
       expert reports
       Expert discovery completion      March 15, 20242                  June 28, 2024
       Pre-trial and Daubert motions    April 26, 2024                   July 26, 20243
       Joint Pre-Trial Stipulation;     June 14, 2024                    September 16, 2024
       proposed jury instructions,
       verdict forms, and findings of
       fact and conclusions of law;
       and non-Daubert motions in
       limine
       Calendar Call                    August 6, 2024                   Court to determine
       Trial                            August 12, 2024                  Court to determine

             Although the Parties have been diligently engaged in discovery since last fall, the requested
   extension of the above-referenced deadlines is necessary. This is the first extension the Parties



   1
     The Parties have agreed, subject to the Court’s approval, that damages reports will be treated
   differently than the other expert reports. Since it will be Plaintiffs who are seeking specific
   damages, the Parties propose that Plaintiffs file an opening report on damages, Defendants only
   file a rebuttal and Plaintiffs file a reply in advance of the deposition of their damages expert.
   The Parties believe this is the most efficient way to present the damages issues to one another
   and, ultimately, the Court.
   2
     The Parties propose that the March 15, 2024 deadline remain in place for fact discovery.
   3
     The Scheduling Order does not include a briefing schedule for summary judgment motions.
   Defendants currently envision submitting a Rule 56 motion and reserve their right to request a
   briefing schedule for that motion following the close of fact and expert discovery.


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Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 3 of 7




   have requested, and they agree that good cause exists for the Court to grant their motion, as set
   forth herein.

   I.     PROCEDURAL HISTORY
          On August 11, 2022, the Court issued its Order granting in part and denying in part
   Defendants’ Motion to Dismiss Plaintiffs’ Complaint in the Federal Securities Law Tranche of this
   multidistrict litigation (“MDL”). Dkt. No. 503. Defendants filed their Answer on September 12,
   2022. Dkt. No. 510. On September 22, 2022, the Court ordered the Parties to file a Joint Scheduling
   Report on October 6, 2022. Dkt. No. 511.
          The Parties filed the reports required by Fed. R. Civ. P. 16 and 26 on October 6, 2022, with
   separate statements of position with respect to deadlines as to which the Parties could not agree.
   Dkt. Nos. 515-1, -2 and -3. The Court’s Scheduling Order was entered on October 11, 2022, setting
   a March 15, 2024, discovery cut-off, the approximate mid-point of the Parties’ proposed dates.
   Dkt. No. 517. At the time, the Parties did not yet comprehend the scope of the endeavor that would
   be undertaken to query Robinhood’s data and to obtain potentially relevant data from numerous
   third parties. As the Parties now know, neither of their estimates allotted sufficient time to conduct
   fact discovery prior to the current deadlines for experts to analyze the data obtained from these
   sources and submit opening and rebuttal reports.
          On September 30, 2022, Plaintiffs served their First Requests for Production of Documents,
   consisting of 88 Requests. Joint Decl., ¶4. The Parties commenced the meet-and-confer process
   with respect to these requests in November 2022 and, after dozens of letters and conferences,
   through which the Parties have generally been able to reach compromise, it is only now winding
   down. Id. at ¶5. Concurrently, Robinhood has made more than 30 separate productions which, by
   early November, will comprise nearly 600,000 pages, including hundreds of spreadsheets
   containing vast quantities of data. Id. at ¶6. With Plaintiffs’ motion for class certification now
   pending,4 the Parties have been focused on fact discovery for the past several months. Id. at ¶8.
   Despite diligent efforts to complete discovery in compliance with the deadlines set forth in the

   4
    Although the Parties continued the meet-and-confer process in the spring of 2023, and documents
   continued to be produced on a rolling basis, much of the Parties’ attention was focused on class
   discovery, to wit, the exchange of opening and rebuttal expert reports and supporting
   documentation, document discovery from the proposed class representatives, and more than 20
   depositions taken of plaintiffs, experts, and third parties. Id. at ¶7.



                                                     2
Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 4 of 7




   Scheduling Order, the Parties have concluded that this will not be possible. Id. at ¶¶10-16. For this
   reason, the Parties jointly and respectfully request that the Court modify the Scheduling Order as
   set forth herein to allow for the orderly completion of discovery in this complex, data-heavy
   securities litigation.
   II.     GOOD CAUSE EXISTS TO EXTEND THE CLOSE OF DISCOVERY
           Rule 16(b)(4) provides that a scheduling order “may be modified only for good cause and
   with the judge’s consent.” A court determines whether a party has shown good cause by focusing
   on the diligence of the party seeking the amendment. See Sosa v. Airprint Systems, Inc., 133 F.3d
   1417, 1418 (11th Cir. 1998); Green Island Holdings, LLC v. British Am. Isle of Venice (BVI), Ltd.,
   521 F. App’x 798, 800 (11th Cir. 2013). Good cause is shown if the scheduling order “cannot be
   reasonably met despite the diligence of the party seeking the extension.” Fed. R. Civ. P. 16,
   Advisory Committee notes (1983 amendment). District courts have broad discretion in controlling
   and managing pretrial discovery matters. See Perez v. Miami–Dade County, 297 F.3d 1255, 1263
   (11th Cir. 2002); Phipps v. Blakeney, 8 F.3d 788, 790 (11th Cir. 1993).
           Courts regularly grant requests to amend the scheduling order where the parties have been
   diligent in pursuing discovery, but an extension is still necessary for its completion. See, e.g., Al-
   Saadi v. AnnChery Fajas USA, Inc., No. 20-cv-23937, 2022 WL 2056802, at *3 (S.D. Fla. May
   13, 2022) (Damian, M.J.), report and recommendation adopted, 2022 WL 2174237 (S.D. Fla. June
   16, 2022); Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., No. 9:17-CV-80495, 2018 WL
   11444948, at *2 (S.D. Fla. Aug. 29, 2018) (granting motion to extend fact and expert discovery
   deadlines where case is “exceptionally complex, involving a large amount of electronically stored
   information” and “[b]oth parties appear to have been diligent in pursuing and responding to
   discovery requests”); Tatung Co., Ltd. v. Shu Tze Hsu, No. SA CV 13-1743, 2015 WL 13919140,
   at *2 (C.D. Cal. Mar. 6, 2015) (granting six-month extension, reasoning: “While discovery has
   been expansive, so is the breadth of this case.”).
           While discovery in this case has, at times, proven contentious, the Parties were able to
   timely complete class certification discovery and have worked diligently to resolve most of their
   discovery disputes through compromise, with each side seeking Magistrate Judge Damian’s
   intervention once. See Dkt. Nos. 540, 597. The nature of the discovery sought by the Parties in this
   securities litigation, however, requires the collection and processing of large amounts of technical
   data, particularly trading information—and not just from Robinhood.



                                                        3
Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 5 of 7




           The Parties have agreed that given the millions of rows of Robinhood data requested by
   Plaintiffs and the technical complexity of the query tools needed to access it, good cause supports
   the requested extension of the close of discovery to allow time for the retrieval, production and
   review of the trading data and other potentially relevant evidence. As discussed in the Joint
   Declaration, much of the data at issue is not contained in a structured format that is easily queried.
   A large amount of requested data flows between multiple systems related to order execution,
   settlement, and clearing, before landing in a “data lake” where it must be plumbed and placed into
   a more easily queried format. Joint Decl. ¶12. Dealing with this data is time intensive, even for the
   specialized information technology vendors that are working on this case. Id.
           With respect to non-parties, Plaintiffs subpoenaed trading data from FINRA earlier this year.
   Id. at ¶13. After a lengthy period in which FINRA researched the practicality, difficulty, and cost of
   producing the data, as well as a period of extensive negotiations, FINRA agreed to produce certain
   data that, while somewhat more limited than the initial subpoena, is nonetheless an enormous amount
   of data. Plaintiffs received 207 gigabytes of compressed data on October 25-26, 2023, and have yet
   to determine whether it satisfies the parameters of the agreed-upon production or whether it is in
   a usable or shareable format. Id. at ¶14.
           The Parties have also subpoenaed trading data from broker-dealers and other relevant third
   parties. Id. at ¶15. Currently, the Parties are meeting and conferring with these third parties
   regarding the scope of the production of documents, confidentiality provisions, and the nature of
   non-party depositions. Id. at ¶¶15-16. An extension of the close of discovery will provide the
   Parties with the necessary time to obtain the large amount of data and for their respective experts
   to review and analyze the data prior to issuing reports. Id. at ¶17. Specifically, the Parties believe
   that if given an extension until March 29, 2024 to complete opening expert reports, which is two
   weeks after the current discovery deadline of March 15, 2024, the Parties’ experts will have
   sufficient time to analyze the trading data once it is produced (and follow-up depositions taken
   pertaining to the data, if necessary) and to include findings with respect to that data in their reports.
   All reports would be exchanged and all expert depositions would be concluded by June 28, 2024.
           Because this is the first request to extend discovery, and the request is jointly made, the
   Parties respectfully request that the Court amend the Scheduling Order as requested.




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Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 6 of 7




   III.   CONCLUSION
          For the foregoing reasons, the Court should grant the Joint Motion to Amend the
   Scheduling Order. A Proposed Order Granting the Joint Motion to Amend the Scheduling Order
   to extend discovery is filed herewith.
                   LOCAL RULE 7.1(a)(3) CERTIFICATE OF CONFERENCE

          In compliance with Local Rule 7.1, the undersigned conferred with counsel for the

   Defendants, who concur in the filing of this Joint Motion.

                                                By: /s/ Laurence M. Rosen
                                                Laurence M. Rosen, Esq.

    Dated: November 6, 2023                       Respectfully submitted,


    /s/ Laurence M. Rosen                         /s/ Samuel A. Danon
    THE ROSEN LAW FIRM, P.A.                      HUNTON ANDREWS KURTH LLP
    Laurence M. Rosen, Esq. (FBN 0182877)         Samuel A. Danon, Esq. (FBN 892671)
    Phillip Kim, Esq.                             María Castellanos Alvarado, Esq. (FBN
    Robin Howald, Esq.                            116545)
    Jonathan Stern, Esq.                          333 S.E. 2 Avenue, Suite 2400
    Brent LaPointe, Esq.                          Miami, FL 33131
    Michael Cohen, Esq.                           Telephone: (305) 810-2500
    275 Madison Avenue, 40th Floor                Facsimile: (305) 810-2460
    New York, New York 10016                      sdanon@huntonak.com
    Telephone: (212) 686-1060                     mcastellanos@hunton.com
    Facsimile: (212) 202-3827
    lrosen@rosenlegal.com                         CRAVATH, SWAINE & MOORE LLP
    pkim@rosenlegal.com                           Antony L. Ryan, Esq.
    rhowald@rosenlegal.com                        Kevin J. Orsini, Esq.
    jstern@rosenlegal.com                         Brittany L. Sukiennik, Esq.
    blapointe@rosenlegal.com                      Worldwide Plaza
    mcohen@rosenlegal.com                         825 Eighth Avenue
                                                  New York, NY 10019-7475
    Counsel for Plaintiffs                        Telephone: (212) 474-1000
                                                  Facsimile: (212) 474-3700
                                                  aryan@cravath.com
                                                  korsini@cravath.com
                                                  bsukiennik@cravath.com

                                                  Attorneys for Defendants Robinhood
                                                  Markets, Inc., Robinhood Financial LLC
                                                  and Robinhood Securities, LLC


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Case 1:21-md-02989-CMA Document 619 Entered on FLSD Docket 11/06/2023 Page 7 of 7




                                 CERTIFICATE OF SERVICE

    I hereby certify that on November 6, 2023, a true and correct copy of the foregoing document
           was served by CM/ECF to the parties registered to the Court’s CM/ECF system.

                                      /s/ Laurence M. Rosen




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