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On Feb. 10, 2004, Judge Vaughn R. Walker issued an order in a pending securities action that called into question the legal strategy of our firm, Milberg Weiss Bershad Hynes & Lerach LLP (“Milberg Weiss”), but did so in an unusually personalized manner. A Recorder article by Brenda Sandburg published on Feb. 19, 2004, described the order, but did not fully appreciate its implications. The judge’s resort to name calling crosses the line. Not only is it evident from court records that Judge Walker has not been and cannot be impartial, but the record also shows his order is in several respects inaccurate and warrants correction, as discussed below. Judge Walker’s Feb. 10, 2004, order (“Order”) criticizes plaintiffs Copper Mountain Investors (“CMI” or the “Cavanaugh group”) and its counsel, Milberg Weiss, for failing to attend a Dec. 8, 2003, status conference. (Order at 11) But, as Judge Walker’s own Dec. 3, 2003, notice of hearing shows, Milberg Weiss was not served — the firm is not even listed on the clerk’s service list. ( See Doc. 126) Judge Walker’s Order tacitly admits failure to serve Milberg Weiss by stating that Milberg Weiss received “actual notice” of the Dec. 8, 2003, conference. The Order recites that Mr. [Daniel] Osborn, counsel for plaintiff Quinn Barton — the party that lost the lead plaintiff appeal in the Ninth Circuit to Milberg Weiss’ clients — informed Judge Walker that he faxed the notice of the status conference to all interested parties, including Milberg Weiss, and later filed that fax (Doc. 130) with the clerk. (Order at 11) First, Milberg Weiss never received any such fax notice from Mr. Osborn. No Milberg Weiss attorney or staff member received such notice and none is in our file. Second, counsel for other parties tell us they did not receive a fax either. Third, as described in the district court docket, Document 130 is a copy of a letter filed by Mr. Osborn — dated Dec. 24, 2003 — long after the Dec. 8, 2003, status conference. ( See district court docket.) The docket entry does not refer to a fax. Three separate reviews of the case file in the clerk’s office over a three-week period revealed that Document 130 was not in the file. The clerk surmised that part of the file, including the document, might be in the judge’s chambers. Judge Walker’s order also recites that the judge issued an order on Dec. 17, 2003, “informing Milberg Weiss” and other counsel that parties interested in appointment as lead plaintiffs file applications by Dec. 28, 2003. (Order at 11) Again, the Dec. 17, 2003, Order was never served on Milberg Weiss. The firm is not listed on the Court’s service list. (See Doc. 129 [12/17/03 order]) This time, no phantom fax notice is mentioned by Judge Walker’s Order. Judge Walker’s Order nevertheless criticizes Milberg Weiss for not responding to the Dec. 17, 2003, order. (Order at 11) Judge Walker’s Order failed to mention that his Dec. 17, 2003, order specifically stated: “These parties need not respond if appointment as lead plaintiff is not sought.” (See 12/17/03 order at 2:6-7, emphasis added) In fact, Judge Walker had previously received Milberg Weiss’ letter to Mr. Osborn dated Sept. 23, 2003, stating that the Cavanaugh group was no longer seeking appointment as lead plaintiff because of the Court’s inaction following the Ninth Circuit’s decision. That letter was submitted to Judge Walker by Mr. Osborn on Nov. 26, 2003 — a fact Judge Walker acknowledged elsewhere in both his Dec. 17, 2003, order and his Feb. 10, 2004, Order. In addition to the personal attacks and inaccuracies in Judge Walker’s Feb. 10, 2004, Order, his 15-month delay in carrying out the mandate of the Ninth Circuit has led the Cavanaugh group to conclude that Judge Walker had not, could not and would not afford the group or its lawyers a fair and impartial judicial forum free of “personal bias or prejudice.” 28 U.S.C. � � 144, 455(b)(1). Although the Ninth Circuit decided In re Cavanaugh, 306 F.3d 726 (9th Cir. 2002), on Sept. 16, 2002, and issued the mandate the next day, which was docketed by the district court clerk on Sept. 19, 2002 (Doc. 116) — Judge Walker did not calendar the matter until Dec. 3, 2003 — nearly 15 months later. (Doc. 126) Plaintiffs were not idle during that period. They reopened their investigation, re-contacted witnesses and searched for additional witnesses. All the while, Judge Walker took no action. Such inaction by Judge Walker was directly contrary to the Ninth Circuit’s writ of mandate that ordered the judge “to vacate his order appointing Quinn Barton lead plaintiff” and “then proceed based on the presumption that the Cavanaugh group is the most adequate plaintiff.” Cavanaugh, 306 F.3d at 739. Judge Walker took no such action, and simply ignored the Ninth Circuit order, doubtless unhappy with its decision invalidating his auction system for selection of lead plaintiff and counsel. To the Cavanaugh group, Judge Walker’s inaction and evident displeasure with the circuit decision shown in the Feb. 10, 2004, Order continues to signal that “his impartiality might reasonably be questioned.” 28 U.S.C. � 455(a). Confirming this conclusion was the personal character of Judge Walker’s attacks on the Cavanaugh group’s lawyers both in his earlier orders selecting lead plaintiff and in his Feb. 10, 2004, Order. Plaintiffs’ concerns about Judge Walker’s lack of impartiality are further confirmed by his puzzling pattern of failing to serve us with papers he files. In addition to the unserved orders discussed above, during the mandamus proceedings in the Ninth Circuit, Judge Walker submitted a letter to the Ninth Circuit dated Sept. 19, 2001, without serving Milberg Weiss. Fortunately, by regularly checking the docket, we discovered his letter within a week and notified both the Ninth Circuit and Judge Walker. The Ninth Circuit, by letter dated Sept. 27, 2001, advised Judge Walker that it was “forwarding” his Sept. 19 letter to us, thus acknowledging that we had not been served. In addition, Judge Walker became an active advocate adverse to our clients in the Ninth Circuit. Judge Walker took the unusual step — albeit procedurally permitted by Fed. R. App. P. 21(b)(4) — of filing a brief and offering argument as a party respondent in opposition to our clients’ petition. As a result of Judge Walker’s direct involvement as a litigant and his delay in taking action consistent with the Ninth Circuit’s ruling, we concluded that returning to his court would simply exacerbate matters for the class. Accordingly, we and our clients conferred and agreed that we no longer wished to pursue lead plaintiff-lead counsel status before Judge Walker in the Copper Mountain case. We did not abandon our clients and instead advised them that the firm would, if the clients wished, pursue private state court actions. In the meantime, our clients are being kept apprised of the proceedings in the class C case. In sum, because the Feb. 10 Order shows that Judge Walker continues to be an active partisan in defense of his now-rejected auction theory, rather than an impartial arbiter, withdrawal of Milberg Weiss from the federal case was in the best interests of the Class. Patrick Coughlin Sanford Svetcov Milberg Weiss Bershad Hynes & Lerach San Francisco Editor’s note: Judge Walker copied The Recorder on his reply to Coughlin and Svetcov: Dear Pat and Sandy, Thanks for sending me a copy of your March 16 letter to Scott Graham of The Recorder. Naturally, I regret that you think I harbor a “personal bias or prejudice” against you or engaged in deliberate foot-dragging in the Copper Mountain litigation. Neither is so. Nor, of course, has FRCP 41(b) been repealed. One point in your letter is correct. Despite an express directive to the clerk to serve the Dec. 17 order “on counsel for CMI,” that order was not served on your office. Milberg Weiss never entered an appearance in the low-number case under which the consolidated complaint was filed and hence did not appear on the clerk’s service list. Neither I nor my office staff checked the clerk’s service list and so did not notice your firm’s failure to appear. We did receive responses from the other counsel to whom that order was expressly directed. Failure to serve the Dec. 17 order, while regrettable, caused your client no harm. Mr. Osborn submitted proof that the notice of the Dec. 8 status conference was served on your office, and, in any event, your client informed the other parties of its intent to abandon the litigation more than two months before the Dec. 8 conference. Rest assured, I look forward to seeing you both in court and around town. With best personal regards, Sincerely, Vaughn R. Walker

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