Case 1:15-cv-00093-FJS-RFT Document 8 Filed 03/26/15 Page 1 of 8
UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF NEW YORK
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THOMAS E. PEREZ, Secretary of Labor, :
United States Department of Labor, :
Plaintiff,
:
v. Civil Action
:
File No. 15-CV-00093 (FJS/RFT)
DANIEL M. BYRNES, individually, and Fort :
Orange Capital Management, Inc. Profit
Sharing Plan, :
Defendants. :
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PROPOSED CASE MANAGEMENT PLAN
PLEASE TAKE NOTICE that the parties in this matter have conferred pursuant to
Rules 16 and 26(f) of the Federal Rules of Civil Procedure and respectfully submit this proposed
Case Management Plan for this Court’s consideration. The Defendants are completing this
Proposed Case Management Plan pro se while they attempt to retain proper legal counsel to
represent them in this matter. Defendants’ contributions to this Proposed Case Management Plan
are done with their best efforts in order to meet the Court’s requirements for submission of the
Proposed Case Management Plan.
1) JOINDER OF PARTIES: Any application to join any person as a party to this action shall
be made on or before the May 2, 2015.
2) AMENDMENT OF PLEADINGS: Any application to amend the pleadings to this action
shall be made on or before the October 2, 2015.
3) DISCOVERY: Fact discovery shall be completed by October 2, 2015. Expert discovery
shall be completed by December 2, 2015.
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4) MOTIONS: All motions, including discovery motions, shall be made on or before
February 2, 2016.
5) PROPOSED DATE FOR THE COMMENCEMENT OF TRIAL: This action will be
ready to proceed to trial on or before the 15th day of April, 2016. The Secretary anticipates
that it will take approximately one to two days to present the government’s case in chief.
Defendants anticipate that it will take another two to three days to present their case in chief.
The parties request that the trial be held in Albany, New York.
6) JURY DEMAND: Neither party has requested a jury.
7) JURISDICTION: This Court has subject matter jurisdiction. The parties are subject to the
jurisdiction of this Court. All parties have been served.
8) FACTUAL AND LEGAL BASES FOR PLAINTIFF’S CLAIMS AND DEFENDANTS’
DEFENSES: The Secretary has brought his claims pursuant to the provisions of section
404(a)-(b) of the Employment Retirement Security Act of 1974, as amended, codified at 29
U.S.C. §1001 et seq. The Defendants have brought forth three defenses: (1) Extenuating
Circumstances, (2) Unclean Hands, and (3) Extraordinary Action in this Matter.
9) WHAT FACTUAL AND LEGAL ISSUES ARE GENUINELY IN DISPUTE: The
defendants admitted the majority of the Secretary’s factual allegations in their Answer.
Nonetheless, at this time the Secretary does not believe that there are any dispositive or
partially dispositive issues appropriate for decision on motion because the parties dispute
whether the agreed-upon conduct constitute violations of ERISA Section 404(a)-(c) and
whether it resulted in a harm/loss to the Plan.
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10) NARROWING THE ISSUES: The Secretary is hopeful that the parties can further narrow
the issue by agreement or motion at a later date. The Defendants will determine this upon
obtaining representative counsel.
11) RELIEF SOUGHT: an Order (1) requiring Byrnes to provide an equitable accounting of
the whereabouts and status of the Plan’s assets and liabilities, any gains and losses in the
Plan’s investments, and any income earned or payments received by the Plan, between
January 1, 2011 and the present; (2) requiring Byrnes to restore to the Plan all losses
attributable to his fiduciary breaches plus interest; Requiring the offset of benefits due under
the Plan to Byrnes against the amounts Byrnes owes to the Plan; Removing Defendant
Byrnes as fiduciary to the Plan; (3) permanently enjoining Byrnes from violating ERISA §
404, 29 U.S.C. § 1104; (4) Permanently enjoining Byrnes from serving as a fiduciary or
service provider to any employee pension benefit plan or employee benefit plan covered by
the provisions of ERISA; (5) appointing an independent fiduciary for the Plan with plenary
fiduciary authority and control over the Plan, including but not limited to, the authority to
marshal assets on behalf of the Plan, pursue claims on behalf of the Plan, and take all
appropriate actions for the rehabilitation or liquidation of the Plan and distribution of the
Plan’s assets to the Plan’s participants, beneficiaries, and creditors as may be necessary and
proper; (6) ordering Byrnes, his agents, employees, service providers, banks, accountants,
and attorneys to preserve and provide the Secretary and the independent fiduciary all of the
books, documents, and records relating to the finances and administration of the Plan; and
(7) awarding the Secretary the costs of this civil action; and (8) providing such further relief
as is just and equitable.
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12) DISCOVERY PLAN
A. MANDATORY DISCLOSURES: The parties will exchange the mandatory
disclosures required under Rule 26(a)(1) on or before March 26, 2015.
B. SUBJECTS OF DISCLOSURE:
i. The Plaintiff expects to conduct discovery regarding defendants’ 2011 and
2012 investments into Sarissa Resources, Inc., including but not limited to the
information defendants reviewed and relied upon in making such
investments; defendant Byrnes’ relationship with Sarissa Resources, Inc.,
including but not limited to his personal holdings in Sarissa Resources,
Inc. as well as those of his family members; defendant Byrnes’
relationship with any officers, directors, or employees of Sarissa
Resources, Inc.; and defendant Byrnes’ employment with Sarissa
Resources, Inc. The Secretary reserves her right to pursue additional topics
during discovery as well.
ii. The Defendants will inquire about issues to be determined upon obtaining
representative counsel.
C. DISCOVERY SEQUENCE: The parties will conduct written fact discovery
(written discovery followed by depositions, followed by post-deposition written
discovery) followed by expert discovery (reports to be exchanged 30 days after
close of fact discovery; expert depositions to occur within 30 days after reports
have been disclosed).
D. WRITTEN DISCOVERY: The parties expect to conduct written discovery,
including interrogatories, requests to produce, and requests for admission. The
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Secretary proposed that the parties promulgate an initial round of discovery
demands on or before April 30, 2015. The Defendants expect to promulgate an
initial round of discovery demands on a time frame after engagement of
representative legal counsel.
Discovery in excess of the interrogatory limits is not anticipated at this time. The
parties anticipate that written discovery will cover topics such as those discussed
above in Section C(12)(b)(i). The Secretary reserves her right to pursue additional
topics during discovery as well.
E. DEPOSITIONS:
i. At this time, Plaintiff expects to depose individual defendant Daniel M.
Byrnes, and to depose Fort Orange Capital Management Profit Sharing
Plan under Fed.R.Civ.P. 30(b)(6), in the Capital Region (likely in Albany
or Colonie). Plaintiff also intends to conduct a third-party deposition of
Sarissa Resources, Inc. pursuant to Fed.R.Civ.P. 30(b)(6). The location of
the Secretary’s deposition of non-party Sarissa Resources, Inc. will be
determined at a later date. The Secretary reserves her right to conduct
additional depositions of individuals and/or entities not specified herein.
ii. The depositions Defendants will conduct will be determined upon
obtaining representative legal counsel and will be held at an appropriate
local to be determined.
F. EXPERTS:
i. The Secretary expects to retain a valuation expert and is the process of
procuring government funding to do so. The Secretary seeks a variance
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from the expert disclosure requirements of the form uniform pretrial
scheduling order typically issued by the Court. The Secretary proposes
that the parties identify any expert witness they plan to use to support a
claim or defense no later than July 2, 2015. The Secretary further
proposes that the parties conduct expert discovery, including the exchange
of reports and depositions, after the close of fact discovery (i.e. the parties
exchange expert reports 30 days after the close of fact discovery, or by
Nov. 2, 2015, the parties exchange rebuttal reports by Dec. 2, 2015, and
expert depositions occur within 45 days after the exchange of rebuttal
reports).
ii. The Defendants expect experts to be determined upon obtaining
representative legal counsel.
G. ELECTRONIC DISCOVERY: The Secretary requests that the parties agree to
retain all electronically created or stored information relevant to the case until trial
or until any resulting appeals are resolved and to address discovery issues
pertaining to the materials as materials are requested. The Secretary neither
requires that defendants produce documents in native format nor plans to produce
documents responsive to defendants’ requests in native format. As a general
matter, the Secretary plans to produce documents responsive to any of defendants’
document requests in PDF format and will accept the same from defendants.
However, the Secretary reserves the right to identify and request that certain
documents be produced in native format, including but not limited to the
following documents obtained during the government’s investigation of the Plan:
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(1) Loan Accrual Statement, dated August 1, 2012 (Loan #001, showing that the
Plan loaned Daniel M. Byrnes $120,000), and (2) Secured Promissory Note, dated
August 1, 2012 (relating to the Plan’s loan of $120,000 to Daniel M. Byrnes).
H. PROTECTIVE ORDERS: The parties do not request any protective orders at
this time.
I. ANTICIPATED ISSUES REQUIRING COURT INTERVENTION: In order
to do non-party discovery on Sarissa Resources Inc., a Nevada corporation that is
headquartered in Canada, the Secretary may need to file Letters Rogatory with
this Court.
13) USE OF EXPEDITED MEANS TO PRESENT EVIDENCE/BIFURCATION: While
the parties hope to use expedited means to streamline the case wherever possible, they can
respond more fully to this inquiry after discovery has been conducted. The Secretary does not
anticipate that bifurcation is necessary at this time.
14) RELATED CASES: To the parties’ knowledge, there are no related cases pending before
the judges of this Court.
15) CLASS ACTION: Not applicable.
16) PROSPECTS FOR SETTLEMENT:
i. The Secretary’s position is that the prospects of settlement cannot be evaluated in
a meaningful way prior to the completion of discovery. The Secretary’s position
would be substantially impacted by defendants’ agreement at this time to appoint
an independent fiduciary in order to wind down the Plan and restore to the Plan
the $220,000 of Plan assets that were used to purchase 11 million shares of stock
in Sarissa Resources, Inc.
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ii. Defendants’ position on the prospects of settlement is to be determined upon
obtaining representative legal counsel.
17) MANDATORY MEDIATION:
A. YES (Secretary); NO (Defendants)
B. YES (Secretary); NO (Defendants)
C. YES (Secretary); NO (Defendants)
D. YES (Secretary); NO (Defendants)
Pursuant to Fed. R. Civ. P. 26(f) meetings were held on multiple dates in March 2015 by phone
and were attended by:
Allison L. Bowles, Esq. for plaintiff
Daniel M. Byrnes, pro se for defendants Daniel M. Byrnes and Fort
Orange Capital Management Profit Sharing
Plan
On March 25, 2015 Mr. Byrnes consented to have the Secretary file this document with his electronic signature.
DATED: March 26, 2015
New York, NY
BY: s/Daniel M. Byrnes BY: s/Allison L. Bowles
DANIEL M. BYRNES ALLISON L. BOWLES
For defendants, pro se Attorney
Bar Roll 515903
U.S. Department of Labor
Attorneys for Plaintiff, Hilda L. Solis,
Secretary of Labor
201 Varick Street, Room 983
New York, NY 10014 (646) 264-3658
Bowles.Allison@dol.gov
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