Gregory v. Facebook, Inc.
1:12-cv-07544
S.D.N.Y.Oct 9, 2012Background
- MDL proceeding for Facebook, Inc., IPO securities and derivative litigation (MDL No. 2389) seeks centralization in SDNY under 28 U.S.C. §1407.
- 41 actions across Northern California, Middle District of Florida, and Southern District of New York listed in Schedule A.
- NASDAQ-related actions involve alleged trading errors; securities/derivative actions involve alleged misstatements and nonpublic information given to preferred investors.
- Parties largely agree securities and derivative actions should be centralized and NASDAQ actions should be centralized, but dispute extent of coordination.
- Court concludes NASDAQ actions share sufficient factual questions with securities/derivative actions to warrant centralization; degree of coordination left to transferee judge.
- SDNY is appropriate transferee; many actions pending there before Judge Sweet and much discovery resides in New York.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should NASDAQ actions be centralized with securities/derivative MDL actions? | Plaintiffs want centralized MDL with securities/derivative actions. | NASDAQ defendants seek limited coordination, not full consolidation. | Centralization warranted with limited coordination possible. |
| Is Southern District of New York the proper transferee venue? | SDNY has most actions and key discovery locations; convenient pretrial handling. | Some prefer other districts due to defendants and actions; CA actions may remain separate. | SDNY appropriate transferee for pretrial proceedings. |
| Should Northern District of California actions be delayed or transferred? | CA actions should be transferred to MDL for consistency and remand motions handled promptly. | Remand motions pending in CA should be addressed in state court or separately. | Transfer of CA actions not delayed; remand motions to transferee court. |
Key Cases Cited
- In re: GerovaFin. Group, Ltd., Sec. Litig., 816 F. Supp. 2d 1381 (J.P.M.L. 2011) (court can tailor coordination without delaying merits)
- In re: Tribune Co. Fraudulent Conveyance Litig., 831 F. Supp. 2d 1371 (J.P.M.L. 2011) (ample discretion to balance coordination and consolidation)
- In re Ivy, 901 F.2d 7 (2d Cir. 1990) (remand motions may be addressed by transferee court)
- In re: Prudential Ins. Co. of Am. Sales Practices Litig., 170 F. Supp. 2d 1346 (J.P.M.L. 2001) (remand and transfer considerations in MDL context)