Craig v. CenturyLink Inc
3:17-cv-01005
W.D. La.Oct 19, 2017Background
- Plaintiff Benjamin Craig filed a securities class action under the Securities Exchange Act (15 U.S.C. § 78aa et seq.) on behalf of investors who bought CenturyLink common stock between March 1, 2013 and June 16, 2017, alleging false and misleading public statements that inflated the stock price.
- Named defendants include CenturyLink, CEO Glen F. Post III, and CFO R. Stewart Ewing, Jr.; a related case (Scott) names an additional defendant, David D. Cole.
- Two other securities suits (Thummeti and Barbree) were filed in the same district; Barbree was voluntarily dismissed, leaving three actions in the Western District of Louisiana, Monroe Division.
- Multiple potential lead plaintiffs moved to consolidate the actions and seek lead-plaintiff appointment (KBC, Police & Fire Retirement System of Detroit, Laborer’s Pension Trust Fund–Detroit, State of Oregon, Amalgamated Bank).
- The court analyzed consolidation under Rule 42(a) and the PSLRA consolidation/lead-plaintiff provisions (15 U.S.C. § 78u-4(a)(3)(B)(ii)), focusing on same court, common parties, common questions of law or fact, risk of prejudice or inconsistent adjudications, and judicial economy.
- The magistrate judge granted the motions and consolidated Craig (lead), Scott, and Thummeti for pretrial purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the related securities actions should be consolidated under Fed. R. Civ. P. 42(a) and the PSLRA | Cases involve the same harm, time period, and defendants; consolidation promotes efficiency and avoids duplicative litigation | (Implicit) consolidation not prejudicial but may be opposed by some parties on procedural grounds | Consolidation granted — all Frazier factors favor consolidation |
| Whether cases present common questions of law or fact | All actions allege materially false statements and omissions that inflated CenturyLink stock prices | Defendants generally contend issues may vary by plaintiff but core allegations overlap | Court held there are common legal/factual questions sufficient for consolidation |
| Risk of prejudice or confusion from consolidation | Consolidation will not confuse different investor claims; it reduces inconsistent rulings | Defendants could argue individual issues might be better addressed separately | Court found little risk of prejudice or confusion and greater risk of inconsistent adjudications if not consolidated |
| Judicial economy and duplication of effort | Consolidation saves resources, avoids repetitive discovery and inconsistent pretrial rulings | Opposing view would stress individualized proceedings; but less efficient | Court held consolidation promotes economy and efficient administration of justice |
Key Cases Cited
- In re Air Crash Disaster at Fla. Everglades on Dec. 29, 1972, 549 F.2d 1006 (5th Cir. 1977) (district courts should make good use of Rule 42(a) to expedite trial and avoid repetition)
- Gentry v. Smith, 487 F.2d 571 (5th Cir. 1973) (supporting consolidation under Rule 42 principles)
- Shafer v. Army & Air Force Exch. Serv., 376 F.3d 386 (5th Cir. 2004) (consolidation permitted for convenience and economy in administration)
- St. Bernard Gen. Hosp., Inc. v. Hosp. Serv. Ass'n of New Orleans, Inc., 712 F.2d 978 (5th Cir. 1983) (consolidation should not prejudice parties' rights)
- Frazier v. Garrison I.S.D., 980 F.2d 1514 (5th Cir. 1993) (enumerating factors to consider when deciding consolidation)
- Johnson v. Manhattan Ry. Co., 289 U.S. 479 (1933) (consolidation for convenience and economy)