case 2:05-cv-02367-src-mas document 141 filed 03/09/2006...

Case 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 of 16

FINEDUNITED STATES DIS`T'RICT COURT MAR q 2006.

DIS'T'RICT OF NEW JERSEY AT 8:30WILLIAM T. WALSH

MDI, No. 1658 (SRC) CI rpl(

IN RE MERCK . CO., INC., : Case No, 3: 05-CgV-01151-SRC-TJB

ECURITIES, DERIVATIVE ase NQ. 3:05-CV-02367-SRC-TJA'I I y _. ERISA ^ LITIGATION ,..._^... -

THIS DOCUMENT RELATES TO T11E STIPULATION AND ORDERCONSOLIDATED SECURITIES ACTION : DISMISSING THE, CORRECTED

CONSOLIDATED AND FOUR`1'HAMENDED COMPLAINTAGAINST THE AMERICANARBITRATION INSURERS

IT IS HEREBY S'T'IP ULATED AND AGREED as follows among court-appointed Lead

Plaintiffs RIC:I IARD REYNOLDS, STEVEN LEVAN, MARC NA`fIIANSON, and JFROME

HABER, and Plaintiffs UNION ASSET MANAGFMENT HOLDINGS AG, LOREN ARNOFF,

ROBERT EDWIN BURNS, JAN C:IIARELS FINANCE S.A., MAR'T'IN MASON, DRANK H.

SAC:C:ONE, CHARLO. 11E SAVARESE, JOE SAVARESH, JOSEPH GOLDMAN, SHERRIE

B. KNUTH, JOSEPH S. FISHER, M.D., NAOMI RAPAEL, RI IODA KANTI::.R, and PARK

EAST, INC. (Lead Plaintiffs and Plaintiffs shall he collectively referred to as "Securities

Plaintiffs") in the securities class action entitled In re Merck. & Co., Inc., Securities, Derivative

& "ERISA "Action, MDL No. 1658 (SRC), Case No. 3:05-CV-01151-SRC-TJB, Case No. 3:05-

CV02367-SRC;-'I'JB (the "Merck-Vioxx Securities Action"), that is pending currently in the

LJnited States District Court, District ofNew Jersey, and ACE AMIAUCAN INSURANCE

COMPANY; AMERICAN CASUALTY COMPANY OF READING, PA.; AXIS

REIN SURANCI COMPANY; F"1 DERAL INSURANCE COMPANY; ST. PAUL MERCURY

INSURANCE COMPANY; TWIN C ITY FIRE INSURANCE COMPANY; and ZURICH


AMERICAN INSURANCE COMPANY (the "American Arbitration Insurers"), all of which

were named as defendants in the Merck-Vioxx Securities Action, (Securities Plaintiffs and the

American Arbitration Insurers shall collectively be referred to as the "Parties."):

1. DISMISSAL OF THE MERCK-VIOXX SECURITIES ACTION

1. Securities Plaintiffs hereby agree to discontinue the Merck-Vioxx Securities

Action as against the American Arbitration Insurers, and voluntarily dismiss all of their claims

against the American Arbitration Insurers in that case, without prejudice, each Party bearing its

own costs and tees.

2. Upon entry of this Stipulation and Order, Securities Plaintiffs shall not file any

pleading on behalf of themselves or on behalf of any class of plaintiffs in any legal proceeding

against the American Arbitration Insurers seeking recovery under the insurance policies issued to

Merck & Co., Inc. ("Merck") by the American Arbitration Insurers (the "Insurance Policies")

(except for the parkicipation of Federal Insurance Company on a certain Multiline Multiyear

Catastrophe Excess Lines Insurance Agreement between Subscribing Co-Insurers and Merck,

which is addressed in a separate Agreement Regarding Dismissal of Certain Insurers and

Consent Order Dismissing the Foreign Arbitration Insurers) in either the Merck-Vioxx

Securities Action, or in any other action or proceeding unless and until the following conditions

have been met: Securities; Plaintiffs obtain a final judgment in the Merck-Vioxx Securities

Action against any of the former or current senior officers and directors of Merck who are or

become defendants in the Merck-Vioxx Securities Action (the "Individual Defendants") and who

are allegedly covered by any of the Insurance Policies, and that judgment remains unsatisfied

and enforceable for :30 days from the date of its entry.

3. The conditions set forth in this Stipulation and Order shall not be construed as an

admission or concession or as evidence as to the validity of any rights, defenses and/or claims

2

RCase 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 of 16

that Securities p laintiffs may have against the American Arbitration Insurers in the Merck-Vioxx

Securities Action, or in any other matter commenced against an American Arbitration Insurer

with respect to its providing insurance coverage to Merck's former or current senior officers and

directors. The American Arbitration Insurers expressly reserve and retain all of their rights,

claims and defenses with respect to any past, present or future claim, complaint, cross-complaint,

counterclaim or proceeding that is brought by one or more of the Securities Plaintiffs in the

Merck-Vioxx Securities Action or in any other matter commenced against an American

Arbitration Insurer with respect to its providing insurance coverage to Merck's former or current

senior officers and directors, including, without limitation, any defense based upon the

arbitration clauses found in, or applicable to, the Insurance Policies. Nothing herein shall be

construed as a waiver by the American Arbitration Insurers of such arbitration clauses or the

rights provided thereunder.

4. The conditions set forth in this Stipulation and Order shall not be construed as an

admission or concession or as evidence as to the validity of any rights, defenses, and/or claims

the American Arbitration Insurers may have against the Securities Plaintiffs in the Merck-Vioxx

Securities Action, or in any other related matter. Except as otherwise provided herein,

Securities Plaintiffs reserve and retain all of their rights, claims and defenses with respect to any

past, present or future claim, complaint, cross-complaint, counterclaim or proceeding that is

brought by one or more of the Securities Plaintiffs in the Merck-Vioxx Securities Action or in

any other related matter, including, without limitation, any defense Securities Plaintiffs may have

should an American Arbitration Insurer seek to invoke any provision in or applicable to the

Insurance Policies.

3


11, SERVICE OF THIRD-PARTY SUBPOENAS ON AMERICANARBITRATION INSURERS

5. Should the Court deny, in whole or in part, the motions filed by Merck and the

Individual Defendants to dismiss the Corrected Consolidated and Fourth Amended Class Action

Complaint and/or the discovery stay prescribed by the Private Securities Litigation Reform Act

of 1995,15 U.S.C. §78u4(b)(3)(B), be lifted, the American Arbitration Insurers each agree to

accept service of a subpoena that is issued by the Securities Plaintiffs collectively in the manner

prescribed by Fed. R. Civ, P. 45, served by overnight delivery to the individuals identified on

Schedule A annexed hereto, and which calls for the respective American Arbitration Insurers to

produce documents and/or provide testimony on their respective behalves pursuant to Fed. R.

Civ. P. 30(b)(6). By consenting to the terms of this agreement, the American Arbitration

Insurers do not waive any ether rights (i.e., rights other than with respect to the propriety of the

above-mentioned manner of service of a subpoena on the insurers) that they may have pursuant

ito Fed. R. Civ. P. 45 to object, move to quash, or otherwise respond with respect to the

subpoena.

IIl. INTEGRATION / AMENDMENTS

6, This Stipulation and Order contains the entire agreement among the Parties and

there has been no promise, inducement or agreement not herein expressed which has been made

or entered into by the Parties. This Stipulation and Order shall not be altered, changed or

modified accept in writing and signed by each Party or an authorized representative thereof,

IV. NOTICE

7. All notices or other communications, other than the service of subpoenas as set

forth in Paragraph No. 5 above, that the Parties desire or are required to provide with respect to

this Stipulation and Order, including those concerning an American Arbitration Insurer's intent.

4


I

to invoke its purported rights under an arbitration clause contained in its respective Insurance

Policy against the Securities Plaintiffs, shall be provided in writing to all the other Parties at the

addresses noted below or such other addresses as a Party may designate in writing from time to

time.

If to Securities Plaintiffs:

David A.P. Brower, 1',sq.Milberg Weiss Bershad & Schulman 1,1,11One Pennsylvania PlazaNew York, NY 10119

Mark Levine, Esq.Stull, Stull & Brody6 (vast 45th Street, 5th FloorNew York, NY 10018

Co-Lead C'ournel for Securities Plaintifft

If to the American Arbitration Insurers:

Angclo G. SavinoMound Cotton Wollan & GreengrassOne Battery Park PlazaNew York, NY 10004Attorneys for ACE American Insurance Company

Gary V. DixonRoss, Dixon & Bell, LLP2001 K Street, NWWashington, DC 20006-1040Attorneys for ATnerican Casually Company of Reading. P,4

Lisa ShrewsherryTraub Eglin Lieberman Straus LLP7 Skyline DriveHawthorne, NY 10532Atturneys fur Axis Reinsurance Company

5


Michael R. GoodsteinBailey Cavalieri LLCOne Columbus10 West Broad StTeet, Suite 2100Columbus, OH 43215-3422Attorneys for St. Paul Mercury Insurance Company

.loan M. GilbrideKaufman Borgecst & Ryan, LLP200 Summit Lake DriveValhalla, NY 10595Attorneys for Twin City lire Insurance Company

Antonia B. IannielloSteptoe & Johnson LLP1330 Connecticut Avenue, NWWashington, DC 20036-1795Atiorneys .for Zurich American Insurance Company

Stephen P. DavidsonDLA Piper Rudnick Gray Cary US LLP1251 Avenue of the AmericasNew York, NY 10020Attorneys for Federal Insurance Company

Ifto Defendants

Robert H. BaronCravath Swainc & Moore, LLPWorld Wide Plaza.825 Eighth AvenueNew York, NY 10019Attorneys for Defendants Merck & Co., Inc., Raymond V. C7ilrnartin, Kenneth C.Frazier, Richard C. Henriques, Peter S. Kim, Judy C. Lewent, Alise S. Reicin,Lawrence A. Bossidy, William C.`. Bowen, Johnnetia B. Cole, William B. Harrison,William N. Kelley, Heidi G. Miller, Thomas E_ Shenk, Arose M. Tatlock, SamuelG. pier, David Anslic'e, Richard T Clark, Celia Colbert, Linda M. Distlerath,Caroline Dorsca, Bernard .l. Kelley, Per G.H. La_fberg, Per Wold-Olsen, Lloyd C.Elam, and Mall FitzGerald

Martin L. PerschetSchulte, Roth &, Zabel, LL.P919 Third AvenueNew York, NY 10022Attorneys for Dgfendant Edward Scolnick

6

iCase 2:05-cv-02367-SRC-MAS Document 141 Filed 03/09/2006 of 16

V. NO CONSTRUCTION AGAINST ANY PARTY

8. The Parties acknowledge that counsel for each of them has participated in the

drafting of this Stipulation and Order and, thus, it is not to be interpreted for or against any Party

as the drafter of the Stipulation and Order, or for any other reason. The Parties acknowledge that

they have been represented by counsel of their choice in all matters connected with the

negotiation and preparation ol'this Stipulation and Order, that they have reviewed this

Stipulation and Order with their counsel and that they fully understand the terms of this

Stipulation and Order and the consequences hereof.

VI. COUNTERPARTS

91 This Stipulation and Order may be executed by the Parties hereto in separate

counterparts, each of which when so executed and delivered shall be an original, but al I such

counterparts shall together constitute but one and the same instrument.

SECURITIES PLAINTIFFS

MILBERG WFTSS BERSHAD & STULL, STULL & BRODY

SCHULMAN LLP Attorneys for Securilies PlaintiffsAttorneys for Securilies Plaint ffs

By:- /0^ 13y: ^ !' ' ll^ nt avid . P. Brower Mark Levinee

DA,'1.'.F1): March , , 2006 DATED: March - ; 2006

7


AMERICAN ARBITRATION INSURERS

MOUND COTTON WOLLAN ROSS, DIXON & BELL, LLPGREENGRASS Attorneys fur American Casualty C ornpany ofAttorneys fvr ACE American Insurance Reading, PACompany

By: f By: An 4- to Cy. Savinc Paul C. Vitrano

DATED: March 3,2006 DIETED: March —, 2006

TRAUB EGLIN LiEBERMAN BAILEY CAVALIERI LLCSTRAUSS LLP Attorneys fur St. Paul MercuryAttorneys for Axis Reinsurance Company lh.wrance Company

By: By: Jonathan Reed Michael R. Goodstein

DATED: March , 2006 DATED: March _, 2006

KAUF'MAN FJOROI;:>~ST RYAN LIP STEPTOE & JOHNSON LLPAttorneys , for Twin City Fire Insurance Attorneys, for Zurich American InsuranceCompany company

By: By: Joan M. Gilbride Antonia B. lanniello

DATED: March , 2006 DATED: March , 2006

DLA PIPER RUDNICK GRAY CARY US LLPAttorneys for Federal Insurance Company

Cry: Stephen P. Davidson

DATED, March , 2006

8



MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys for American Casualty Company ofAttorneys for ACE American Insurance Reading, PACompany

By: By:, (/JC

Angelo G. Savino Paul C. Vitrano

DATED: March , 2006 DATED: March 7, 2006

TRAUB EGIAN 1AFBFRMAN BAILEY CAVALIERI LLCSTRAUSS LLP Attorneys for k. Paul MercuryAttorneys ,for Axis Reinsurance Company Insurance Company



KAUFMAN BORGEEST & RYAN LLP STEPTOE & JOHNSON LLPAttorneys for Twin City Ifire Insurance Attorneys far Zurich American InsuranceConnpany Company

By: By:Joan M. Gilbride Antonia I3. lanniello

DA'IED: March , 2006 DATED: March —, 2006

DLA PIPER RUDNICK GRAY CARY IJS LLPAttorneys for Federal Insurance Company

By:

Stephen P. Davidson

DATED: March , 2006

fi



MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys for American CasualoJ Company of

Attornfys .for ACE American Insurance Reaming, PACompany

By: By. Angelo G, Savino Paul C. Vitrano

DATED: March —, 2006 DATED: March —, 2006

TRAUB E'GLIN I..,IEBERMAN BAILEY CAVALIERI LLCSTRAUS, LLP Attorneyw_for St. Paul MercuryAttorneys for Axis Reinsurance Company Insurance Company

By.Tnaftn R d By Michael R. Goodstein

DATED: March, 2006 DATED- March 2006

KAUFMAN BORGFEST & RYAN LLP STEPTOE & JOHNSON LLPAttorncys .fnr Twin Cite Fire Insurance Attorneys for Zurich American InsuranceCompany Company

By , By:Joan M, Gilb.ride Antonia. B. lanniello

DATED: March —, 2006 DATED: March _, 2006

DLA PIPER RUDNICK GRAY CARY US LLPAttorneys .filr Federal lnsurance Company

By:

Stephen P. Davidson

DATED: March —, 2006

8



MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys farAmerican Casualty Company ofAttorneys , for ACE A merican Insurance Reading, PACompany

By: By: Angelo G. Savino Paul C_ Vitrano

DATED: March —, 2006 DATED: March _, 2006

TRAUB FGLIN LIEBERMAN BAILEY CAVALIFRI LIa

STRAUSS LLP Attorneys for St_ Paul Mc}t

Attorneys for Axis Reinsul-once Company Insurance Company

By: By[^r̂+! 'terJonathan Iteed r ichae Goodstein

(DATED: March _, 2006 DATED: March, 2006

KA.UFM.AN BORGEEST & RYAN LLP STEPTOE. & JOHNSON LLPAucirneys fur Twin City Fire Insurance Artorneyys for Zurich American InsuranceCompany Company

By: By: Joan M. Gilbride Antonia B. Ianniello

DATI?D: March 2006 DATED: March —, 2006

DLA PIPER RUDNICK GRAY CARY US LLPAltu1°neys for Federal Insurance Company

By:

Stephen R Davidson

DATED- March —, 2006

8



MOUND COTTON WOI LAN & ROSS, DIXON & BELL, LLPRFENGRASS Attorneys.forAmerican Casualty Company of

Attorneys . far AC E American Insurance Reading, PACompany

By: By: Angelo G. Savino Paul C. Vitrano

DATED: March , 2006 DATED: March, 2006

TRAUB EGLIN LIEBERMAN BAILEY CAVALIERI LLC;STRAUSS LLP Attorneys fir St. Paul MercuryAttorneys firAxis Reinsurance Company Insurance Company

By: By:Jonathan Reed Michael R. Goodstein

DATED: March , 2006 DATED: March —, 2006

KAUI{MAN 13ORGREST & RYAN LLP S"1'.FPTOE & JOHNSON LL 11

Attorneys fr3r Twin City Fire Insurance Attorneys. for Zurich American InsuranceCompany Company

B ( 7 By. Joan M. Gilb.ride Antonia B. Iannicllo

DATED: March, , 2006 DATED: March _, 2006

DLA PIKER RUDNICK CRAY CARY US 1,LPAttorneys for Federal Insurance Company

By: Stephen P. Davidson

DA,rF:D: March , 2006

8



MOUND COTTON WOLLAN & ROSS, DIXON & BELL, LLPGREENGRASS Attorneys,for American Casualty Company ofAttorneys fbr ACE American Insurance leading, PACompany

By: By: Angelo G. Savino Pahl C. Vitraw

DATED. March —, 2006 DATED: March —, 2006

TRAUB EGL1N LIEBERMAN BAILEY CA'VALIERI LLC.STRAUSS LLP Attorneys,for St. Paul MercuryAttorneys for Axis Reinsurance Company Insurance Company

By: By:Jonathan Reed Michael R. Goodstein

DATED: March_, 2006 DATED: March —, 2006

KAUFMAN BORGEEST RYAN LLP STEPTOE JOHNSON LLPAttorneys , for• Twin City Fire Insurance Attorneys for Zurich American InsuranceCompany Company

By, By: J6'4-^Joao M. Gilbridc Antonia B. Ianniello

DATED: March —, 2006 DATED: March 5, 2006

DLA PIPER RUDNICK CRAY CARY US LLPAttorneys fbr Federal Insurance Company

By:Stephen P. Davidson

DA'Z'ED: March —, 2006

S



MOUND COTTON WOLLAN & ROSS, DIXON & DELL, LLPGREENGRASS Attorneys for American Casualty Company ofAllvrneys frar ACE American Insurance Reading, PACompany

By: By:_ Angelo G. Savino Paul C'., Vitrano

DATED: March_, 2006 DATED: March , 2006

TRAUB EGLIN LIEBERMAN BAILEY CAVALIERI LLCS' I RAUSS LLP Attorneys for ,S1. Paul MercuryAttorneys for Axr.'s Reinsurance Company Insurance Company



AUFMAN 130RGEEST & RYAN LLP STEPTM & JOHNSON LLPAllorneys ,for Twin Cidy Fire Insurance Attorneys for Zurich American InsuranceCompany C:'ornpany

By: By-Joan. M. Gilbride Antonia B. Ianniello

DATED: March w., , 2006 DATED: March 2006

DLA PIPER RUDNICK GRAY C:ARY US LLPAttorneys jbr Federal Insurance Company

B r

^Stephcn P. Davidson

DA'1'I?D: March, 2006

8


SO ORDERED:

Stank y hesler, U.S.D.J.

7979274

9


SCHEDULE A

Subpoena to: Copy to: ACE American Insurance Company:

Douglas Poetzsch Angelo G. SavinoSenior Vice President Mound Cotton Wollan & GreengrassACE American insurance Company One Battery Park Playa140 Broadway, 401h r loor New York, NY 10004New York, NY 10005

Zurich American Insurance Company:Henry Chun Antonia B. IannielloZurich American Insurance Company Steptoe & Johnson LLPOne Liberty Plaza, 30 `t' floor 1330 Connecticut Avcnue, NWNew York, NY 10006 Washington, D.C. 20036-1795

Federal Insurance Company:Stephen P, DavidsonDLA Piper Rudnick Gray Cary US LLP1251 Avenue of the AmericasNew York, New York 10020

Axis Reinsurance Company:Julieruic Duncai} Lisa ShrewsburyConnell Corporate Park Traub Eglin Lieberman Strauss LLPTliree Cminell Drive 7 Skyline DriveBerkeley Heights, NJ 07922 Hawthorne, NY 10532

An-ierican Casualty Company of Reading PA:Kenneth W. Lord, Esq. Gary V. DixonCNA Global Specialty Lines Ross, Dixon & Bell, LLP40 Wall street, 8"' floor 2001 K Street, N WNew York, NY 10005 Washington, D.C. 20006-1040

St. Paul Mercury insurance C:onipany:Michael R. GoodsteinBailey Cavallieri LLCOne Columbus10 West Broad Street, Suite 2100Columbus, OH 43215-3422

Twin City Fire insurance Company:

Anthony J. Fowler, Esq. Joan M. GilbrideAsst. Vice President and C."laisns Counsel Kaulinan Borgeest & Ryan LLPHartford Financial PTodU.CtS 200 Sui.n nit Lake Drive2 Park Avenue Valhalla, New York 10595New 'York, NY 10016

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