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

Case 1:04-cv-00781-REB-KLM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge Robert E. Blackburn Civil Case No. 04-CV-0781-REB-PAC SHRINERS HOSPITALS FOR CHILDREN, a Colorado Corporation, Plaintiff, v. QWEST COMMUNICATIONS INTERNATIONAL INC., a Delaware Corporation having its principal office and place of business in Denver, et al., Defendants.

DEFENDANT QWEST COMMUNICATIONS INTERNATIONAL INC.'S RENEWED UNOPPOSED MOTION TO CONSOLIDATE EMERGENCY/FORTHWITH CONSIDERATION REQUESTED PURSUANT TO REB CIV. PRACTICE STANDARD V.E.1

Qwest Communications International Inc. ("Qwest" or the "Company") respectfully seeks expedited consideration of its Unopposed Motion to Consolidate ("Unopposed Motion to Consolidate") (originally filed as Docket # 106) because, in the absence of "immediate judicial intervention," REB CIV. PRACTICE STANDARD V.E.1, Qwest will be forced to litigate two similar cases against the same party for similar claims, which may be subject to two different legal standards.1
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Pursuant to D.C.COLO.LCivR. 7.1(A), undersigned counsel certify that they have conferred with counsel for all parties and advised them of (1) the Company's intention to file a renewed motion to consolidate, and (2) their intention to seek expedited review pursuant to REB CIV. PRACTICE STANDARD V.E.1. Counsel for all parties have consented to this renewed motion and to the request for expedited review.

Case 1:04-cv-00781-REB-KLM

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I.

PROCEDURAL BACKGROUND As this Court noted in its ruling on Qwest's Motion to Dismiss the Amended

Complaint filed by Shriners Hospitals for Children ("Shriners"), Shriners "has indicated a desire to amend its complaint to add additional claims." Shriners Hospitals for Children v. Qwest Communications International Inc., No. 04-CV-0781, 2005 WL 2350569, at *5 (D. Colo. Sept.23, 2005; Exhibit D attached hereto) ("Shriners I"). Although Shriners' failure to move for such relief under Rule 15 precluded this Court's ruling on any proposed amendment as such, the Court analyzed in considerable detail whether the proposed amendments suggested by Shriners would be time-barred if advanced at that time. Id. Anticipating that Shriners might seek to rely on the tolling doctrine announced in American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974) to toll the statute of limitations, the Court noted the following: There are significant limitations on American Pipe tolling. First, the filing of a putative class action complaint tolls the period of limitations only for claims that are identical to the claims asserted in the putative class action complaint. Second, a plaintiff who is a member of a putative class who files an action independent of the class before the class is certified, or class certification is denied, cannot benefit from American Pipe tolling. Id. Instead of submitting a proper Rule 15 motion to amend its Complaint, Shriners waited some 13 months after this Court's decision and then commenced a separate action against Qwest and other defendants in Shriners Hospitals for Children v. Arthur Andersen & Company, et al., No. 06-MSK-02189 (MEH) ("Shriners II"). Shriners II advances similar allegations of accounting fraud as Shriners I, encompasses

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overlapping time periods, and seeks a roughly similar amount of damages, based on what appear to be the same securities transactions that are alleged in Shriners I. In its Unopposed Motion to Consolidate, Qwest sought an order consolidating Shriners II with Shriners I. Contemporaneous to filing the Unopposed Motion to Consolidate, Qwest also filed an Unopposed Motion to Stay Shriners II pending the resolution of the Unopposed Motion to Consolidate. On Thursday, November 30, 2006, Judge Krieger denied the Unopposed Motion to Stay Shriners II. II. EMERGENCY/FORTHWITH CONSIDERATION IS APPROPRIATE UNDER REB CIV. PRACTICE STANDARD V.E.1 TO PREVENT THE SIMULTANEOUS LITIGATION OF SIMILAR CASES AND THE POTENTIAL APPLICATION OF CONFLICTING LEGAL STANDARDS TO THE SAME PARTIES IN THESE TWO CASES. Expedited consideration of this renewed motion under REB CIV. PRACTICE STANDARD V.E.1 is appropriate. Absent an expedited ruling in this case, Qwest will be required to file a motion to dismiss the Shriners II complaint by December 26, 2006, and the parties are scheduled to participate in a scheduling conference on February 8, 2007.2 The parties will therefore be required to litigate Shriners II separately and independently from Shriners I, thereby producing the judicial inefficiencies and duplication of efforts that granting the pending Unopposed Motion to Consolidate would avoid. Equally important, absent the consolidation of these actions, Qwest and the other defendants in Shriners II may be subject to a different legal standard than the one that

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The Court in Shriners II has entered an order setting a scheduling conference for February 8, 2007, which is attached hereto as Exhibit B.

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this Court so carefully detailed in Shriners I. Although this Court has determined that Shriners cannot avail itself of American Pipe tolling because it filed suit before class certification had been determined, Judge Krieger seems to have reached a different judgment on that very issue. In Schimmer v. State Farm Mut. Auto. Ins. Co., No. 05-cv02513-MSK, 2006 WL 2361810 (D. Colo. Aug. 15, 2006; Exhibit E attached hereto), Judge Krieger ruled that "[t]o deny a putative class member the benefit of class action tolling because he elected to protect his rights in a separate action before a ruling was made on class certification is inconsistent with the premise for the tolling doctrine." Schimmer, 2006 WL 2361810 at *6. Judge Krieger's opinion, which evidences no awareness of this Court's Order in Shriners I, thus appears to be at odds with this Court's considered resolution of the same issue in essentially the same case. Absent the prompt consolidation of these two cases, Qwest's motion to dismiss Shriners II may be governed by a different American Pipe standard than the rule that this Court carefully articulated in Shriners I. Whatever the validity of the Schimmer decision for other litigants in other cases in the future,3 it should not control what claims are available for Shriners to bring against Qwest. Rather, this Court's determination

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Qwest does not concede that the decision in Schimmer necessarily would apply to these Shriners cases for a number of reasons. For example, there is no indication in Schimmer that the plaintiff in that case was even aware of the pending class action or he made a conscious decision to prematurely abandon the class action mechanism in pursuit of his own individual remedy. By contrast, the complaints in both Shriners I and Shriners II clearly evidence Shriners' knowledge of the pending class action and the Shriners' determination to abandon that remedy prematurely. See Shriners I Amended Complaint ¶¶ 21-22, 205, 222, 247-50, 299-302; Shriners II Complaint, attached hereto as Exhibit C, ¶¶ 26, 36-39, 42, 48-50, 64, 180, 192, 220, 239, 252, 279-80, 301-02, 32930, 357-58.

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that Shriners cannot properly invoke American Pipe tolling should be law of the case as between these parties. Robbins v. Wilkie, 433 F.3d 755, 764 (10th Cir. 2006) ("The law of the case doctrine provides that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages of the same case."). Shriners should not be permitted to avoid that legal principle by commencing a new suit assigned to a different judge rather than moving to amend its complaint pending before this Court ­ "or as it is occasionally put, attempting to accomplish indirectly what it could not accomplish directly." U.S. v. McGann, 951 F. Supp. 372, 379 (E.D.N.Y. 1997) (dismissing second action based on complaint that duplicated proposed amended complaint in first action); see also Walton v. Eaton Corp., 563 F.2d 66, 71 (3d Cir. 1977) (prohibiting plaintiff from "us[ing] the incorrect procedure of filing duplicative complaints for the purpose of circumventing the rules pertaining to the amendment of complaints, Fed.R.Civ.Proc.15"). III. BRIEFING IS COMPLETE ON THE PENDING UNOPPOSED MOTION TO CONSOLDIATE. Qwest files this Forthwith Renewed Unopposed Motion to Consolidate to seek an expedited ruling on the Company's request to consolidate Shriners I with Shriners II in order to avoid necessity of litigating both cases independently, thus facing the potential of conflicting pretrial rulings, scheduling orders and proceedings. The briefing is complete on the Unopposed Motion to Consolidate, and Qwest stands on the

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substantive arguments advanced in that motion, which is incorporated herein by reference.4 IV. CONCLUSION For the foregoing reasons, and for the reasons set forth in Qwest's prior briefing, Qwest respectfully requests that this Court consider the Company's Unopposed Motion to Consolidate on an expedited basis, and that the Court consolidate Shriners II with Shriners I to avoid waste of judicial resources and the potential of conflicting rulings on similar claims. A Proposed Order is attached hereto. DATED: December 5, 2006 Respectfully submitted, ___/s/ Alfred P. Levitt_____________ Jonathan D. Schiller David R. Boyd Alfred P. Levitt 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 Attorneys for Qwest Communications International Inc.

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Qwest's Unopposed Motion to Consolidate (without exhibits) is attached hereto as Exhibit A.

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CERTIFICATE OF SERVICE I hereby certify that on this 5th day of December, 2006, a copy of the foregoing DEFENDANT QWEST COMMUNICATIONS INTERNATIONAL INC.'S RENEWED MOTION TO CONSOLIDATE (EMERGENCY / FORTHWITH CONSIDERATION REQUESTED PURSUANT TO REB CIV. PRACTICE STANDARD V.E.1) 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 email addresses: Terence C. Gill [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Counsel for Qwest Communications Int. Inc. Counsel for Qwest Communications Int. Inc. Counsel for William L. Eveleth Counsel for Richard L. Weston Counsel for William L. Eveleth Counsel for Plaintiff Counsel for John M. Walker Counsel for Douglas K. Hutchins Counsel for Bryan K. Treadway

Marcy M. Heronimus Karoline E. Jackson Douglas P. Lobel Larry A. Mackey Charles G. Michaels Stephen C. Peters John M. Richilano M. Robert Thornton

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and, I also certify that I have served same by depositing in the U.S. Mail, first-class postage prepaid, addressed to the following: I. Walton Bader Bader & Bader, LLP 50 Main Street; PMB 1029 Suite 1000 White Plains, NY 10606 Counsel for Plaintiff

/s/ Jed Donaldson Jed Donaldson

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