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Qwest Class Action Defense Case-In re Qwest Communications: Multidistrict Litigation (MDL) Judicial Panel Grants Defense Motion To Centralize Securities Cases In District Of Colorado Where Class Action Is Pending

Judicial Panel on Multidistrict Litigation (MDL) Grants Defense Motion Under § 1407 Motion to Consolidate Cases for Pretrial Purposes Before Class Action Judge even though Court-Approved Partial Settlement of Class Action is Pending

More than two dozen lawsuits – including at least one class action – were filed against Qwest Communications arising out of “alleged financial irregularities in connection with Qwest securities.” Defense attorneys sought to centralize pretrial proceedings under 28 U.S.C. § 1407; plaintiffs’ lawyers in several actions objected. The Judicial Panel on Multidistrict Litigation (MDL) granted the defense motion. In re Qwest Communications Int’l, Inc., Securities & “ERISA” Litig. (No. II), 444 F.Supp.2d 1343 (Jud.Pan.Mult.Lit. 2006). Objecting plaintiffs argued “transfer should be denied because 1) a partial settlement has been approved in class action proceedings in the District of Colorado that have been pending since 2001; 2) alternatives to 1407 transfer were available to address any common discovery matters and to prevent inconsistent pretrial rulings; and/or 3) transfer would be unduly burdensome or otherwise prejudicial.” Id., at 1345. The Panel rejected these claim, explaining at page 1345:

We are not persuaded by these contentions. In addition to the class action proceedings, other actions in the District of Colorado have been brought by opt-out litigants or other persons not covered under the settlement. Those actions will require common discovery and will still need and benefit from Section 1407 centralization with the present actions pending outside the District of Colorado. Id.

The Panel also believed that the district court handling the class action was best suited to serve as transferee court:

By choosing to centralize this litigation in the District of Colorado and to assign it to the judge before whom the class action proceedings have been pending for over four years, we will be placing these actions before a transferee judge 1) who is already familiar with many of the factual issues posed by these actions, and 2) who will have the flexibility to structure any pretrial proceedings in the newly filed MDL-1788 opt-out actions with any pretrial proceedings previously conducted in the District of Colorado, so that any common matters may be addressed efficiently while still ensuring that any matters unique to the class action settlement or the newly filed MDL-1788 actions may proceed on their own separate tracks. Id.

Download PDF file of In re Qwest Communications Transfer Order