SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15991 / December 4, 1998 AMICUS CURIAE BRIEF ADDRESSING APPOINTMENT OF MULTIPLE LEAD COUNSEL UNDER THE LITIGATION REFORM ACT: IN RE MILESTONE SCIENTIFIC SEC. LITIG., No. 98-3404 (AJL) (D.N.J.) On December 4, 1998, the Securities and Exchange Commission filed an amicus curiae (or friend of the court) brief in the United States District Court for the District of New Jersey in In re Milestone Scientific Securities Litigation. The brief, which was filed in response to a request by the court for the Commission's views, addresses the issue whether, and under what circumstances, it is appropriate to approve the appointment of multiple lead counsel under the Private Securities Litigation Reform Act of 1995. The brief is available on the Commission's Web site (www.sec.gov). The Commission takes the position that courts generally should defer to lead plaintiff's choice of counsel and that except in very unusual circumstances, courts should not force a lead plaintiff to retain counsel it has not selected itself. The Commission believes, however, that particular problems may arise from multiple counsel arrangements, and accordingly that the courts should actively exercise their discretion to review proposals for such arrangements. Although appointment of multiple counsel may be appropriate in circumstances where a single firm lacks the resources or expertise to manage the litigation, appointment of multiple counsel can raise significant concerns. These include impairment of the lead plaintiff's ability to manage the litigation and supervise counsel effectively, duplication of effort, lack of coordination among counsel, delay of the litigation, and increase in attorneys' fees. The presumptive lead plaintiff should provide the court with full information about the structure and intended functioning of the proposed counsel group and ======END OF PAGE 1====== efforts it has made to avoid the potential problems with multiple counsel. The Commission argues that multiple counsel may be justified where the firms provide resources, skill, experience, or expertise that are necessary to manage the litigation effectively for the class. But the court should not rely on, or give weight to, generic asserted benefits of assuring input from more rather than fewer class members or lawyers or avoiding disputes among competing lead plaintiff movants and among their counsel. The Commission also argues that another important consideration in evaluating the proposal is the possibility of a conflict of interest involving one or more of the chosen counsel. If the circumstances justify particular confidence in the lead plaintiff's independence and ability to make choices, then deference to those choices would be appropriate. Where, however, it appears that the prospective lead plaintiff has not played an active, effective role in choosing counsel or that the relationship between the plaintiff and one or more of its chosen law firms is based on factors other than the merits of the firms, then greater scrutiny is warranted. Finally, the Commission argues that the court should place appropriate conditions on the appointment of multiple counsel and indicate a willingness to revisit the issue. ======END OF PAGE 2======