JOINT STIPULATION TO EXTEND NON-EXPERT DISCOVERY CUTOFF FOR DISCOVERY TAKEN PURSUANT TO ANY MOTIONS TO COMPEL AND EXPERT DISCOVERY CUTOFF, DEADLINE TO FILE DISPOSITIVE MOTIONS, AND ORDER

LUCY H. KOH, District Judge.

SANTA CLARA VALLEY HOUSING GROUP, INC. ("Santa Clara"), and KRISTEN M. BOWES ("Bowes") (collectively referred to as "Plaintiffs") and the UNITED STATES OF AMERICA ("United States"), by and through their attorneys, in light of unavoidable delays, hereby request that the deadline to conduct expert discovery and to file dispositive motions be extended by two weeks as set forth below.

The parties are not seeking by this stipulation to postpone or delay either the Pretrial Conference date, currently set for May 25, 2011, or the trial date, currently set for June 27, 2011. This Stipulation also does not affect the Case Management Conference scheduled for February 16, 2011.

In support of this Stipulation, the parties state as follows:

1. During the month of December, the parties engaged in significant expert discovery throughout the United States.

2. On December 1, 2010, the United States deposed Plaintiffs' expert Howard Gastwirth in Los Angeles.

3. On December 3, 2010, the parties simultaneously responded to their respective requests for production directed to the rebuttal experts and produced documents.

4. On December 8, 2010, Plaintiffs deposed the United States' expert Ronald Hendricks in Sacramento.

5. On December 9, 2010, the United States deposed Plaintiffs' expert and rebuttal expert Robert Edelstein in Los Angeles. The United States was unable to complete this deposition in the one day scheduled and a continuation of the deposition has been set for January 24, 2011.

6. On December 10, 2010, the United States deposed Plaintiffs' expert and rebuttal expert Linda Burke in Los Angeles.

7. On December 13-14, 2010, the United States deposed Plaintiffs' expert and rebuttal expert, Daniel McConaughy, in Los Angeles.

8. On December 16-17, 2010, Plaintiffs deposed the United States' expert and rebuttal expert Thomas Lys in Chicago. Plaintiffs were unable to complete this deposition in the time scheduled. The parties sought to reschedule the continued deposition of Dr. Lys within the expert discovery period. However, due to the holidays, Dr. Lys' extensive travel schedule, other scheduled depositions and a previously scheduled trip outside the United States from January 12-31 by one of Plaintiffs' lead counsel, the parties have been unable to schedule the continued deposition of Dr. Lys by January 31, 2011. A deposition has been tentatively scheduled for February 8, 2011 in Chicago.

9. On January 5, 2011, Plaintiffs deposed the United States' rebuttal expert Karl Case in Boston.

10. A deposition of the United States' rebuttal expert David W. LaRue has not been scheduled at this time. Mr. LaRue's deposition would be taken in Denver.

11. Accordingly, in light of the number and location of experts and their availability for depositions, as well as the complex nature of opinions expressed, the parties request that the close of expert discovery, currently set for January 31, 2011, be extended to February 14, 2011.

12. With respect to fact discovery, two witnesses remain to be deposed. The Court granted the parties leave to complete the depositions of Whitehead and Krutilla during the expert discovery period ending January 31, 2010. The depositions of these two witnesses are tentatively scheduled for the last week of January 2011.

13. Additional delays have been caused by the refusal of former KPMG employees to testify in this matter. Four of the United States' deponents asserted their Fifth Amendment privilege during their deposition and refused to answer substantive questions from either party. Plaintiffs do not believe these third-party witnesses have valid Fifth Amendment claims and have filed a motion to compel in this district and the three separate motions in United States District Court for the Central District of California.

14. On October 26, 2010, Plaintiffs filed with Magistrate Judge Lloyd, the magistrate assigned to this case, a Motion to Compel with a proposed order directing third-party witness Douglas Duncan to testify.

15. On November 2, 2010, Plaintiffs filed a Motion to Compel with respect to the remaining three third-party witnesses in the U.S. District Court for the Central District of California, the court that has jurisdiction over the deponents. A hearing was set for December 8, 2010, however, the court vacated the hearing and denied the Motion to Compel without prejudice for failure of the parties to file a joint stipulation as required under the local rules.

16. On November 29, 2010, the parties and counsel for each of the deponents held the requisite meet & confer as required under the local rules for the Central District. Since the meet & confer, the parties and counsel for each of the deponents have been working on the joint stipulations, as required under the Central District's local rules, to be filed with the Motions to Compel. The completion of the required joint stipulations was protracted due both to the holidays and the need to obtain input from the separate counsel for each deponent.

17. On December 7, 2010, a hearing on Plaintiff's Motion to Compel was heard before Magistrate Judge Lloyd. On December 14, 2010, Magistrate Judge Lloyd issued an Order Denying Plaintiffs' Motion to Compel third-party Douglas Duncan to Testify and, on December 23, 2010, Plaintiffs moved for relief from the Order.

18. On December 29, 2010, Plaintiffs filed a Motion to Compel Third Party Dale Affonso to Testify in the U.S. District Court for the Central District of California.

19. On December 30, 2010, Plaintiffs filed a Motion to Compel Third Party Andrew Atkin to Testify in the U.S. District Court for the Central District of California.

20. On January 5, 2011, Plaintiffs filed a Motion to Compel Third Party Larry Manth to Testify in the U.S. District Court for the Central District of California.

21. The U.S. District Court for the Central District of California has yet to schedule a hearing for any of the motions to compel before it.

22. On January 5, 2011, this Court denied Plaintiffs' request for relief from an Order by Magistrate Judge Lloyd denying Plaintiffs' Motion to Compel Third Party Douglas Duncan to testify.

23. As the parties will be preparing and conducting at least four depositions (pending resolution of Plaintiffs' Motions to Compel) of both fact and expert witnesses during January, elements from these depositions may be used by the parties in any dispositive motions filed. In addition, it is anticipated that the hearings on Plaintiffs' Motions to Compel filed in the U.S. District Court for the Central District of California will be in January or early February. Thus, the parties request that the deadlines to file dispositive motions currently set for January 31, 2011, be extended to February 14, 2011, and that the deadlines to file oppositions and replies to the oppositions be correspondingly extended two weeks to March 14, 2011 and April 14, 2011, respectively. As indicated in the Joint Case Management Statement, this is a case of first impression with respect to the tax merits of the SC2 strategy. Thus, the parties believe this extended briefing schedule is warranted.

24. The parties have proposed that the hearing on dispositive motions be correspondingly moved two weeks from April 7, 2011 to April 21, 2011. However, the parties are flexible as to when the Court would want to hear the dispositive motions.

25. The parties also request that because this action arises out of a complicated tax transaction the page limitations with respect to motions under the Civil Local Rules of this Court be increased from 25 pages to 35 pages for dispositive motions and oppositions to dispositive motions, and from 15 pages to 25 pages for replies to oppositions.

Therefore, the parties hereby stipulate that the Case Schedule be modified as follows:

PURSUANT TO STIPULATION, IT IS SO ORDERED.