Free Motion to Consolidate Cases - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 01-CV-1451-REB-PAC (Consolidated with Civil Action Nos. 01-CV-1472, 01-CV-1527, 01-CV-1616, 01-CV1799, 01-CV-1930, 01-CV-2083, 02-CV-333, 02-CV-374, 02-CV-507, 02-CV-658, 02CV-755, 02-CV-798, and 04-CV-238) In re QWEST COMMUNICATIONS INTERNATIONAL INC. SECURITIES LITIGATION

QWEST COMMUNICATIONS INTERNATIONAL INC.'S MOTION TO CONSOLIDATE

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Defendant Qwest Communications International Inc. ("Qwest") respectfully moves this Court pursuant to Federal Rule of Civil Procedure 42(a), Local Rule 42.1, and this Court's prior orders, to consolidate for all pre-trial purposes Fire and Police Pension Association of Colorado v. Qwest Communications International Inc., et al., 06CV-732-PSF-MEH ("Fire and Police Pension Ass'n Action")1 with In re Qwest Communications International Inc. Securities Litigation, Civil Action No. 01-CV-1451REB-PAC ("Class Action"). In support of this motion, Qwest states as follows: 1. On September 12, 2001, this Court consolidated three securities cases

with the Class Action. The Court subsequently consolidated two more securities cases on September 18, 2001 and October 4, 2001, respectively. Again, on May 6, 2002, this Court consolidated four more securities cases and ordered: "That any later filed cases that the court deems to be sufficiently related to these cases shall be consolidated with these cases."2 May 6, 2002, Order at 6 (Docket No. 78) ("May 6 Consolidation Order"). Thereafter, the Court consolidated two additional actions, bringing the current total to 11 consolidated securities class actions.3 Finally, in addition to the class actions that were consolidated, one individual action ­ Stichting Pensioenfonds ABP v. Qwest

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A copy of the complaint filed in the Fire and Police Pension Ass'n Action is attached hereto as Exhibit A. Earlier, on September 12, 2001, this Court consolidated three cases with the Class Action and ordered further consolidation of "any related actions that may be filed before the Court." Sept. 12, 2001, Order (Docket No. 9) at 2.

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For the relevant consolidation orders, see Docket Nos. 9 (Sept. 12, 2001), 11 (Sept. 18, 2001), 16 (Oct. 4, 2001), 78 (May 6, 2002), 84 (June 26, 2002), 85 (July 2, 2002), and 610 (Mar. 29, 2005).

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Communications International Inc. ­ was also consolidated with In re Qwest.4 On April 18, 2006, the Fire and Police Pension Ass'n Action was filed. Like the other 12 cases, the Fire and Police Pension Ass'n Action should be consolidated with the Class Action. 2. The core allegations underlying the Class Action and the Fire and Police

Pension Ass'n Action are nearly identical: Fire and Police Pension Ass'n Action ¶¶ 3, 6, 15, 35, 74, 77, 82, 92-93, 128, 221-323, 366, 401, 403, 412, 417, 420, 447, 450, 456, 459, 466-68, 476, 485, 491, 497-98, 504 ¶¶ 5-6, 70, 99, 104, 120, 125-26, 128, 133, 136, 141-42, 144, 149, 15154, 157, 161, 163-64, 167-69, 171-74, 176-80, 182, 184, 188, 245, 257, 268, 282, 313, 368, 375, 430 ¶ 119

Allegation Qwest issued false and misleading statements and financial results.

Class Action ¶¶ 3, 5, 6-8, 19, 26, 88, 106, 121-125, 226-380

Qwest violated GAAP.

¶¶ 9, 122, 125-130, 137138, 149, 152-153, 309

Qwest management pressured employees to meet financial targets. Qwest manipulated IRU sales.

¶ 171

¶¶ 5, 65-89, 126-130, 274, 294, 309, 356

Qwest entered into secret side agreements with other companies to inflate revenue.

¶¶ 38, 157-162, 167-173

¶¶ 76-98, 126, 128, 132, 150-55, 194-208, 22425, 233, 235, 257, 268, 282, 313, 326, 379 ¶¶ 23, 192-206, 215

See In re Qwest Communications International Inc. Secs. Litig., 01-CV-1451-REBPAC, Docket No. 610, Order Granting Defendants' Motion To Consolidate (D. Colo. Mar. 29, 2005).

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Allegation Qwest improperly reported revenue from reciprocal transactions to inflate revenue. Qwest entered into reciprocal transactions with Cable & Wireless to inflate revenue. Qwest entered into reciprocal transactions with Enron to inflate revenue. Qwest entered into reciprocal transactions with Flag to inflate revenue. Qwest entered into reciprocal transactions with Global Crossing to inflate revenue. Qwest entered into equipment transactions with KMC to manipulate financial results. Qwest entered into equipment transactions with Calpoint to inflate revenue. Qwest fraudulently reported the impact on revenues from the equipment transaction with Genuity, which allowed Qwest to overstate its income for the year. Qwest fraudulently reported the impact on revenues from the equipment transaction with Arizona School Facilities Board which allowed Qwest to overstate its income for the year.

Class Action ¶¶ 6, 9, 17, 65-89, 126130, 329 ¶¶ 38, 80, 126, 160162, 294 ¶¶ 65, 75-76, 85, 88, 129, 343 ¶¶ 163-166

Fire and Police Pension Ass'n Action ¶¶ 76-103, 126, 154-55, 161-63, 252, 282 ¶¶ 5, 89, 196-98, 268

¶¶ 5, 94-97, 313, 380

¶¶ 5, 199-202

¶¶ 65, 75-75, 83, 87, 126, 128, 167-173, 329, 356 ¶¶ 90-94, 122, 131-132, 174, 191, 196-198, 258, 263, 266, 329, 355, 357, 385 ¶¶ 174, 191, 196-198, 337 ¶¶ 38, 112-113, 126, 191-194, 274, 309

¶¶ 5, 31, 66, 92, 96, 191, 194, 203-04, 380 ¶¶ 5, 99-103, 126, 156, 161, 163, 245, 252, 299, 327 ¶¶ 156, 162-63, 307

¶¶ 5, 26, 121, 156-58, 257, 268, 282

¶ 111

¶¶ 5, 120, 156, 160

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Allegation Qwest was able to inflate Directory Services revenues by accelerating the publication dates of certain directories and lengthening the time for other directories. Qwest failed to properly account for its investment in KPNQwest. Qwest avoided recording charges of $2.1 billion from losses on PP&E. Qwest executives and senior management engaged in insider trading which motivated them to commit fraudulent acts. Qwest was forced to restate its earnings as a result of fraudulent schemes.

Class Action ¶¶ 7, 9(d), 31, 80, 98107, 181, 199-200, 269, 284, 294

Fire and Police Pension Ass'n Action ¶¶ 5, 107-16, 268

¶¶ 9(b), 12, 136-44, 210

¶¶ 5, 55, 72, 126, 12837, 174, 257, 268, 288 ¶¶ 5, 126, 138-44, 257, 268 ¶¶ 10, 219-20, 257, 35963

¶¶ 145-51

¶¶ 381-84

¶¶ 180-225

¶¶ 8, 48, 68-72, 77, 116, 123, 128, 145-83, 18687

The nearly identical nature of allegations means that discovery in the Class Action has focused, and will focus, on the same factual issues at issue in the Fire and Police Pension Ass'n Action. In addition to the myriad common factual issues involved in the two cases, there are also substantially overlapping parties ­ namely, all of the defendants named at various times in the Fifth Consolidated Amended Class Action Complaint in the Class Action have been named as defendants in the Fire and Police Pension Ass'n Action.5 Finally, it need not be the case that all claims and parties are
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Defendants Jacobsen, Khosla, Weisberg, and Wilks, named as defendants in Lead Plaintiffs' Fifth Amended Consolidated Complaint, were subsequently dismissed on October 15, 2004 (Docket No. 518). Defendants Casey and Mohebbi, named as defendants in Lead Plaintiffs' Fifth Amended Consolidated Complaint, were subsequently dismissed on November 30, 2004 (Docket No. 523). 4

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identical in order for consolidation to be appropriate. As this Court acknowledged in its March 29, 2005 Order Granting Defendants' Motion To Consolidate Stichting Pensioenfonds ABP v. Qwest, et al. (Docket No. 610), even where an action involves some parties not named in the consolidated action or asserts some claims not asserted in the consolidated action, where the additional claims "involve proof of the same type" as the claims at issue in the consolidated action, such that there are "questions of law and fact [in] common," "these differences do not make consolidation unreasonable or inefficient." Id. at 2. Given the significant similarities and commonalities between the Fire and Police Pension Ass'n Action and the Class Action, the two actions are "sufficiently related" that consolidation is required by the May 6, 2002 Consolidation Order. 3. The applicable federal rule also supports pre-trial consolidation of the

Class Action and Fire and Police Pension Ass'n Action. A court has broad discretion to consolidate actions involving common questions of law or fact for trial or pretrial purposes if it will facilitate the administration of justice. Katz v. Realty Equities Corp. of New York, 521 F.2d 1354, 1358 (2d Cir. 1975). Rule 42(a) of the Federal Rules of Civil Procedure provides that "[w]hen actions involving a common question of law or fact are pending before the court, ... it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay." The objective of the rule is "to give the court broad discretion to decide how cases on its docket are to be tried so that the business of the court may be dispatched

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with expedition and economy while providing justice to the parties." Breaux v. Amer. Family Mut. Ins. Co., 220 F.R.D. 366, 367 (D. Colo. 2004). 4. Undersigned counsel has conferred with counsel for Lead Plaintiffs and

counsel for the Fire and Police Pension Association of Colorado pursuant to D.C.Colo.L.R. 7.1. Counsel for Lead Plaintiffs have no objection to this motion. Counsel for the Fire and Police Pension Ass'n of Colorado have refused to consent to the requested relief. Wherefore, Qwest respectfully requests that this case be consolidated with In re Qwest Communications International Inc. Sec. Litig., Civ. A. No. 01-CV-1451-REB-PAC for all pre-trial purposes and that the schedule adopted in the Fire and Police Pension Ass'n Action, as set forth in the April 20, 2006 Minute Order Setting Scheduling/Planning Conference (06-CV-732-PSF-MEH, Docket No. 5) be vacated. A proposed order is attached.

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DATED: May 9, 2006

Respectfully submitted,

_/s/ Alfred P. Levitt______________ Jonathan D. Schiller David R. Boyd Alfred P. Levitt Kenneth F. Rossman IV BOIES, SCHILLER & FLEXNER LLP 5301 Wisconsin Avenue, N.W. Washington, DC 20015 Telephone: (202) 237-2727 Facsimile: (202) 237-6131 Terence C. Gill SHERMAN & HOWARD, L.L.C. 633 Seventeenth Street, Suite 300 Denver, CO 80202 Telephone: (303) 297-2900 Facsimile: (303) 298-0940 Counsel for Qwest Communications International Inc.

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CERTIFICATE OF SERVICE I hereby certify that on this 9th day of May, 2006, a copy of the foregoing DEFENDANT QWEST COMMUNICATIONS INTERNATIONAL INC.'S MOTION TO CONSOLIDATE was electronically filed with the Clerk of the Court using the USDC CM/ECF system, which will send notification of such filing to the following e-mail addresses: X. Jay Alvarez [email protected] Counsel for Lead Plaintiffs Counsel for Defendants Arthur Andersen & Iwan Counsel for Plaintiff Stichting Pensioenfonds ABP Local Counsel for Lead Plaintiffs Counsel for Defendant Szeliga Counsel for Defendants Arthur Andersen & Iwan Counsel for Lead Plaintiffs Counsel for Defendant Woodruff Counsel for Defendants Arthur Andersen & Iwan Counsel for Defendant Woodruff Counsel for

Timothy G. Atkeson

[email protected]

Michael J. Barry

[email protected] [email protected] [email protected] [email protected]

Jeffrey A. Berens

Terry W. Bird

[email protected]

Jessica Brody

[email protected]

Spencer A. Burkholz John K. Carroll

[email protected] [email protected] [email protected]

Kwame A. Clement

[email protected]

David L. Cook

[email protected]

Jennifer L. Coon

[email protected]

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[email protected] Merrill G. Davidoff [email protected]

Defendant Szeliga Counsel for Plaintiff New Jersey Dept. of Treasury Counsel for Lead Plaintiffs Counsel for Defendant Szeliga Counsel for Defendant Smith Counsel for Lead Plaintiffs Counsel for Defendant J. Kozlowski in the SEC matter Local Counsel for Plaintiff Stichting Pensioenfonds ABP Local Counsel for Plaintiff Stichting Pensioenfonds ABP Counsel for Defendants Arthur Andersen & Iwan Local Counsel for Defendant Qwest Communications Int. Inc. Local Counsel for Defendant Qwest Communications Int.

Michael J. Dowd

[email protected]

Mark T. Drooks

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]; [email protected]

Stephanie E. Dunn

Thomas E. Egler

Kevin D. Evans

Clyde A. Faatz, Jr.

[email protected]

Christopher J. W. Forrest

[email protected] [email protected] [email protected] [email protected]

John A. Freedman

Terence C. Gill

[email protected]

Marcy M. Heronimus

[email protected] [email protected]

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Inc. Michael J. Hofmann [email protected] Counsel for Defendants Anschutz & Slater Counsel for Defendants Anschutz & Slater Counsel for Defendants Arthur Andersen & Iwan Counsel for Defendant Casey Counsel for M. Schumacher United States Attorney; Intervenor Plaintiff Counsel for Defendant Szeliga

Kevin B. Huff

[email protected] [email protected]

Shelby Hunt

[email protected]

Richard Jacobson Gary M. Kramer William J. Leone

[email protected] [email protected] [email protected] [email protected]; [email protected] [email protected]

Vincent J. Marella

David Meister

[email protected] Counsel for Defendant Woodruff [email protected] Counsel for Defendant Woodruff Counsel for Defendant Smith Counsel for Defendant Mohebbi Counsel for Defendant Nacchio Counsel for Defendant Tempest

James D. Miller

Robert N. Miller

[email protected]

Barbara C. Moses

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Edward S. Nathan

James E. Nesland

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Sharan Nirmul

[email protected] [email protected]

Counsel for Plaintiff Stichting Pensioenfonds ABP Local Counsel for Plaintiff Stichting Pensioenfonds ABP Counsel for Defendants Arthur Andersen & Iwan Counsel for Defendant Woodruff Counsel for Defendant Szeliga Local Counsel for Defendant Nacchio Counsel for Defendants Arthur Andersen & Iwan Counsel for Defendant Mohebbi Counsel for Lead Plaintiffs Counsel for Defendants Arthur Andersen & Iwan Counsel for Defendant Tempest

Robin L. Nolan

[email protected] [email protected] [email protected] [email protected]

Elissa J. Preheim

Kimberly W. Price Thomas V. Reichert John M. Richilano

[email protected] [email protected] [email protected] [email protected] [email protected]

Eric T. Rillorta

Ashley Rupp

[email protected]

Scott Saham

[email protected]

Scott Schreiber

[email protected]

Paul H. Schwartz

David L. Schwarz

[email protected] [email protected] [email protected] [email protected] [email protected]

Joel M. Silverstein

[email protected]

Counsel for Defendants Anschutz & Slater Counsel for Defendant Nacchio Counsel for Defendant Tempest

Jeffrey A. Smith

[email protected] [email protected]

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[email protected] Jeffrey Speiser [email protected] Counsel for Defendant Nacchio Counsel for Defendant Nacchio Counsel for Defendant Casey Counsel for Alvarado, Haines, Hellman, & Stephens

Herbert J. Stern

[email protected]

Michael Trager Jesus M. Vazquez, Jr.

[email protected] [email protected] [email protected]

and, I also certify that I have served same by depositing in the U.S. Mail, first-class postage prepaid, addressed to the following: William M. Rogers 606 S. Military Trail Deerfield Beach, FL 33442 Plaintiff in Rogers, Mylett Matter Joe R. Whatley, Jr. Glen Connor Whatley Drake, LLC 2323 Second Avenue North Birmingham, AL 35202 Counsel for Plaintiff in ERISA matter Phone: 205.328.9576 Fax: 205.328.9669 [email protected] [email protected] Richard M. Heimann Joy A. Kruse Bruce W. Leppla Peter E. Leckman Lieff, Cabraser, Heimann & Bernstein, LLP 275 Battery Street; 30th Floor San Francisco, CA 94111-3339 Phone: 415.956.1000 Fax: 415.956.1008 Counsel for Plaintiff FPPAC [email protected] [email protected] [email protected] [email protected]

C. Mylett PO Box 1031 Coleman, FL 33521 Plaintiff in Rogers, Mylett Matter

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Robert F. Hill Ronald L. Wilcox Jennifer H. Hunt Hill & Robbins, P.C. 1441 18th Street; Suite 100 Denver, CO 80202-1256 Phone: 303.296.8100 Fax: 303.296.2388 Counsel for Plaintiff FPPAC [email protected] [email protected] [email protected]

/s/ Jed Donaldson Jed Donaldson

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