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Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 1 of 7

Plaintiff,





UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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CHARLES N. DORNFEST, Individually
and on Behalf of All Others Similarly Situated,


v.


BANK OF AMERICA CORPORATION,
MERRILL LYNCH & CO., INC., KENNETH D.
LEWIS, JOE L. PRICE, NEIL A. COTTY, JOHN A.
THAIN, WILLIAM BARNET III, FRANK P.
BRAMBLE, SR., JOHN T. COLLINS, GARY L.
COUNTRYMAN, TOMMY R. FRANKS, CHARLES
K. GIFFORD, MONICA C. LOZANO, WALTER E.
MASSEY, THOMAS J. MAY, PATRICIA E.
MITCHELL, THOMAS M. RYAN, O. TEMPLE
SLOAN, JR., MEREDITH R. SPANGLER, ROBERT
L. TILLMAN and JACKIE M. WARD,


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KENNETH A. CIULLO and JOANNA CIULLO as
JTWROS,


v.

BANK OF AMERICA CORPORATION,
MERRILL LYNCH & CO., INC., KENNETH D.
LEWIS, JOHN A. THAIN, JOE L. PRICE and NEIL
A. COTTY,

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Defendants.

Defendants.

Plaintiffs,





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Civil Action No. 10 Civ. 275 (DC)

ECF CASE











Civil Action No. 10 Civ. 1673 (DC)

ECF CASE







MEMORANDUM IN RESPONSE TO PLAINTIFFS’ MOTIONS FOR
(1) APPOINTMENT AS LEAD PLAINTIFFS, (2) DESIGNATION OF LEAD
PLAINTIFFS’ COUNSEL AND/OR (3) OTHER RELIEF


Mitchell A. Lowenthal
Lewis J. Liman
CLEARY GOTTLIEB STEEN &

HAMILTON LLP

One Liberty Plaza
New York, NY 10006
(212) 225-2000






Dated: March 29, 2010


Peter C. Hein
Eric M. Roth
Andrew C. Houston
WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, NY 10019
(212) 403-1000

Attorneys for Bank of America Corporation,
Kenneth D. Lewis, Joe L. Price, Neil A. Cotty,
William Barnet III, Frank P. Bramble, John T.
Collins, Gary L. Countryman, Tommy R. Franks,
Charles K. Gifford, Monica C. Lozano, Walter E.
Massey, Thomas J. May, Patricia E. Mitchell,
Thomas M. Ryan, O. Temple Sloan, Meredith R.
Spangler, Robert L. Tillman and Jackie M. Ward









Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 2 of 7



Bank of America Corporation (the “Bank”), Kenneth D. Lewis, Joe L. Price, Neil A. Cotty,

William Barnet III, Frank P. Bramble, Sr., John T. Collins, Gary L. Countryman, Tommy R. Franks,

Charles K. Gifford, Monica C. Lozano, Walter E. Massey, Thomas J. May, Patricia E. Mitchell,

Thomas M. Ryan, O. Temple Sloan, Jr., Meredith R. Spangler, Robert L. Tillman and Jackie M.

Ward (collectively, the “Bank Defendants”) respectfully submit this response to:



the memorandum of law filed in Dornfest v. Bank of America Corporation, et al., No. 10-

CV-275-DC (S.D.N.Y.) (the “Dornfest Action”), on behalf of Charles N. Dornfest, in support

of his motion seeking (1) appointment as lead plaintiff in a putative class action and

(2) designation of Bragar Wexler Eagel & Squire, P.C. as lead plaintiff’s counsel; and



the memorandum of law filed in Ciullo v. Bank of America Corporation, et al., No. 10-CV-

1673-DC (S.D.N.Y.) (the “Ciullo Action”), on behalf of Kenneth A. Ciullo and Joanna

Ciullo, in support of their motion seeking (1) consolidation of the Dornfest and Ciullo

Actions, (2) appointment as lead plaintiffs in a putative class action and (3) designation of
Zwerling, Schachter & Zwerling, LLP as lead plaintiffs’ counsel (“Ciullo Mem.”).1

I.

THE BANK DEFENDANTS SUPPORT CONSOLIDATION OF THE DORNFEST
AND CIULLO ACTIONS WITH THE CONSOLIDATED SECURITIES ACTION
CURRENTLY PENDING BEFORE THIS COURT.

The Dornfest and Ciullo Actions were commenced nearly a year after the first lawsuits

challenging the disclosures related to the Bank’s acquisition of Merrill Lynch & Co., Inc. (“Merrill”)

were filed in this Court. On June 10, 2009, the Joint Panel on Multidistrict Litigation entered an

order transferring multiple related actions filed around the country to this Court and directing that

those actions be coordinated or consolidated for pretrial proceedings with the actions already

pending in this district. See In re Bank of Am. Corp. Sec., Derivative & ERISA Litig., No. 09-MDL-

2058-DC, at 1-2 (S.D.N.Y.) (Docket No. 1). On June 30, 2009, this Court issued an order

consolidating the securities actions (the “Consolidated Securities Action”), appointing lead plaintiffs

for the putative class (“Lead Plaintiffs”), approving Lead Plaintiffs’ choice of counsel and mandating


1
Thain, the Ciullo Action asserts claims against only the Bank, Merrill, Lewis, Price, Cotty and Thain.


Unlike the Dornfest Action, which asserts claims against each of the Bank Defendants, as well as Merrill and







Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 3 of 7



that future cases raising common questions of law and fact filed in or transferred to this Court be

consolidated with the Consolidated Securities Action. See In re Bank of Am., at 25 (Docket No. 2).

On July 29, 2009, this Court issued a further order with respect to the Consolidated Securities Action

indicating that “[e]ach new securities case that relates to or arises out of the subject matter of the

Securities Actions . . . shall be consolidated with the Consolidated Securities Action.” See In re

Bank of Am. ¶ 9 (Docket No. 15).

On January 13, 2010, the Dornfest Action was filed on behalf of a putative class of persons

who invested in Bank options between September 15, 2008 and January 22, 2009. Like the

Consolidated Amended Class Action Complaint filed in the Consolidated Securities Action,

Dornfest’s complaint (“Dornfest Compl.”) avers that, during the purported class period and in

violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”)

and SEC Rule 10b-5, the Bank Defendants made certain false and misleading statements relating to

the interim results of the Bank and Merrill, and Merrill’s ability to pay bonuses to its employees

before the Bank’s acquisition of Merrill. See Dornfest Compl. ¶¶ 170-218, 274-314. On March 15,

2010, Dornfest moved for appointment as lead plaintiff and approval of his counsel as lead

plaintiff’s counsel.

The Ciullos’ complaint (“Ciullo Compl.”), which was filed on March 2, 2010, also asserts

claims pursuant to Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 (see Ciullo

Compl. ¶¶ 267-95) based on many of the same allegedly false and misleading statements upon which

the Dornfest Action is predicated. Id. ¶¶ 43-182. The Ciullos, like Dornfest, purport to bring claims

on behalf of persons who invested in Bank options between September 15, 2008 and January 22,

2009. Id. ¶ 1. On March 16, 2010, the Ciullos moved for consolidation of their action with the

Dornfest Action, for appointment as lead plaintiffs and for approval of their counsel as lead

plaintiffs’ counsel.

In view of the overwhelming factual and legal similarities between the Dornfest Action and

the Consolidated Securities Action, Lead Plaintiffs have asked the Court to consolidate the Dornfest

Action with the Consolidated Securities Action pursuant to this Court’s July 29, 2009 Order and to

vacate the notice published by Dornfest’s counsel pursuant to the Private Securities Litigation





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Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 4 of 7



Reform Act of 1995. See Lead Plaintiffs’ 1/19/10 Letter at 2; see also Lead Plaintiffs’ 1/28/10

Letter at 3.

The Bank Defendants concur with Lead Plaintiffs’ position that consolidation of the Dornfest

Action with the Consolidated Securities Action is warranted: the Dornfest Action involves claims

that indisputably “arise[] out of the [same] subject matter” as the Consolidated Securities Action. In

re Bank of Am. ¶ 9 (Docket No. 15). Accordingly, the Bank Defendants support Lead Plaintiffs’

application for consolidation. Furthermore, as the Ciullos acknowledge, the Dornfest and Ciullo

Actions “are substantially similar and arise from the same set of facts and [alleged] conduct,” and

“name overlapping Defendants and both allege violations of the same statutes.” Ciullo Mem. 8-9.

Accordingly, consolidation of the Ciullo Action with the Consolidated Securities Action is equally

appropriate.

In sum, the Dornfest and Ciullo Actions should be consolidated with the Consolidated

Securities Action for all purposes. Alternatively, at a minimum, the Dornfest and Ciullo Actions

should be consolidated for pretrial purposes.

II.

THE COURT SHOULD DENY THE CIULLOS’ REQUEST THAT A SEPARATE
ORDER CONSOLIDATING THE DORNFEST AND CIULLO ACTIONS AND
ESTABLISHING A NEW MASTER FILE AND DOCKET BE ENTERED.

This Court’s July 29, 2009 Order clearly provides for consolidation under Master File No.

09-2058 of “[e]ach new securities case that relates to or arises out of the subject matter of the

Securities Actions.” See In re Bank of Am. ¶ 9 (Docket No. 15). Notwithstanding the clear

applicability of that Order, the Ciullos now ask this Court to enter a separate, in part duplicative,

order directing consolidation of the Dornfest and Ciullo Actions — as well as “[a]ny other actions

now pending or later filed in or transferred into this district that arise out of the same facts and

claims alleged” — and establishing a new master file and master docket. See Proposed Order

Consolidating the Actions, Appointing Kenneth A. Ciullo and Joanna Ciullo as Lead Plaintiff and

Approving Lead Plaintiff’s Choice of Lead Counsel ¶¶ 1-3. In light of this Court’s July 29, 2009

Order establishing a master file and docket, the portion of the Ciullos’ proposed order seeking the

creation of another master file and docket is both unnecessary and likely to engender confusion.





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Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 5 of 7



Even if this Court permits the Dornfest and Ciullo Actions to proceed independently of the

Consolidated Securities Action in some fashion, it should nevertheless consolidate the Actions under

Master File No. 09-2058 for pretrial purposes, and order that the Actions be subject to the terms of

this Court’s July 29, 2009 Initial Case Management Order. See In re Bank of Am. (Docket No. 18).

Accordingly, this Court should deny the Ciullos’ motion at least insofar as it seeks the creation of

another master file and docket.

III. THE BANK DEFENDANTS TAKE NO POSITION AS TO WHETHER PLAINTIFFS

SHOULD BE APPOINTED LEAD PLAINTIFFS OR WHETHER THEIR
SELECTED COUNSEL SHOULD BE DESIGNATED LEAD PLAINTIFFS’
COUNSEL.

To the extent that the Dornfest and Ciullo Actions are not consolidated with the Consolidated

Securities Action, the Bank Defendants take no position as to whom should be appointed lead

plaintiff for the putative class or designated as class counsel.

At this stage of the litigation, a challenge pursuant to Rule 23 of the Federal Rules of Civil

Procedure to the adequacy of representation, or typicality of the claims asserted, by a proposed lead

plaintiff or to the appropriateness of class certification would be “premature.” Yates v. Open Joint

Stock Co. “Vimpel-Communications,” 2005 WL 1018428, at *2 (S.D.N.Y. Apr. 29, 2005). The

Bank Defendants reserve their rights to assert such objections, as well as any arguments regarding

the proper scope and definition of any proposed class and the duration of the class period, in

response to any motion for class certification that is ultimately made. See, e.g., Weinberg v. Atlas

Air Worldwide Holdings, Inc., 216 F.R.D. 248, 252 (S.D.N.Y. 2003) (“[A] wide ranging analysis

under Rule 23 is not appropriate [at the lead plaintiff appointment stage] and should be left for

consideration of a motion for class certification.” (quotation omitted)); Koppel v. 4987 Corp., 1999

WL 608783, at *8 (S.D.N.Y. Aug. 11, 1999) (acknowledging, in a decision appointing a lead

plaintiff, defendants’ reservation of “their rights to challenge plaintiff’s adequacy as lead plaintiff

when he moves for class certification;” the court’s finding that plaintiff should be appointed lead

plaintiff “does not prejudice defendants’ capacity to contest plaintiff's adequacy on a motion for

class certification”).





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Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 6 of 7



Although Plaintiffs have made certain assertions in their motion papers with respect to the

underlying facts and merits of their claims, the Bank Defendants will not burden the Court with a

response to those matters now. However, the Bank Defendants dispute many of those assertions and

will address them at the appropriate time.

*

*

*

The Bank Defendants have conferred with the other defendants named in this action, who

have advised that they concur with the foregoing positions.





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Case 1:09-md-02058-PKC Document 224 Filed 03/29/10 Page 7 of 7

CLEARY GOTTLIEB STEEN & HAMIL TON

By ~;*tÐ~nb~

Lewis J. Liman
One Liberty Plaza
New York, NY 10006
(212) 225-2000
Fax: (212) 225-3999
EmaIl: mlowenthal~cgsh.com
EmaIl: iiiman~cgsh.com

W ACHTELL, LIPTON, ROSEN & KATZ

By /s/ Peter C. Hein

Peter C. Hein
Eric M. Roth
Andrew C. Houston
51 West 52nd Street
New York, NY 10019
(212) 403-1000
Fax: (212) 403-2000
Email: pchein~wlrk.com
EmaIl: emroth~wlrk.com
Email: achouston~wlrk.com

Attorneys for Bank of America Corporation,
Kenneth D. Lewis, Joe L. Price, Neil A. Cotty,
Willam Barnet III, Frank P. Bramble, John T.
Collns, Gary L. Countryman, Tommy R.
Franks, Charles K Giford, Monica C.
Lozano, Walter E. Massey, Thomas J. May,
Patricia E. Mitchell, Thomas M Ryan,
0. Temple Sloan, Meredith R. Spangler,
Robert L. Tillman and Jackie M Ward

Dated: New York, New York

March 29, 2010