Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

IN RE WORLDCOM

United States District Court, S.D. New York


June 18, 2004.

IN RE WORLDCOM, INC. SECURITIES LITIGATION. This Document Relates to: Retirement Systems of Alabama
v.
J.P. Morgan Chase & Co., et al., Case No. CV 2002-1947-P (Circuit Court, Montgomery County, Alabama).

The opinion of the court was delivered by: DENISE COTE, District Judge

Memorandum Opinion & Order

On May 11, 2004, plaintiffs in the above-captioned state court action ("RSA"*fn1 and "Alabama Action") moved for a stay of an April 23, 2004 Injunction affecting the schedule for summary judgment and trial in the Alabama Action, pending the completion of RSA's appeal to the Second Circuit Court of Appeals of the Injunction and the April 23 Opinion and Order ("April 23 Opinion") which explained the grounds for the Injunction. For the reasons stated below, RSA's motion for a stay is denied.

Background

  On March 23, 2004, an Order To Show Cause was issued on the Alabama Defendants'*fn2 application under the All Writs Act, 28 U.S.C. § 1651, for a stay of the summary judgment practice and the trial in the Alabama Action for a period of no earlier than sixty days following the conclusion of the trial of the consolidated securities class action arising from the collapse of WorldCom, Inc. ("WorldCom"). On April 7,*fn3 RSA and the judge presiding over the Alabama Action, the Honorable Charles Price, filed responses to the Order to Show Cause. In addition, the Attorney General for the State of Alabama filed an amicus curiae brief opposing the Alabama Defendants' application. Oral argument was held on April 13.

  The April 23 Opinion granted the Alabama Defendants' application and enjoined the Circuit Court of Alabama from resolving any summary judgment motion or beginning the trial in Retirement Systems of Alabama v. J.P. Morgan Chase & Co., et al., Case No. CV 2002-1947-P (Circuit Court, Montgomery County, Alabama), until at least sixty days following the entry of a verdict in the class action trial in the WorldCom Securities Litigation.*fn4 See In re WorldCom, Inc. Sec. Litig., 02 Civ. 3288 (DLC), 2004 WL 884960 (S.D.N.Y. Apr. 23, 2004). The facts and analysis set forth in the April 23 Opinion are incorporated herein. On April 27, RSA appealed to the United States Court of Appeals for the Second Circuit from the April 23 Opinion and Injunction. On May 11, RSA moved this Court for a stay of the April 23 Injunction pending the resolution of its appeal to the Second Circuit. A May 14 Order required that opposition to RSA's motion for a stay was to be submitted on May 21; any reply was due May 28. The Alabama Defendants filed a timely opposition. As of today's date, RSA has not submitted a reply.*fn5 Its motion is deemed fully submitted.

  Discussion

  While different procedural rules govern the power of district courts and courts of appeals to stay an order pending appeal, the factors regulating the issuance of a stay "are generally the same" under both sets of rules. Hilton v. Braunskill, 481 U.S. 770, 776 (1987) (citing Rule 62(c), Fed.R.Civ.P. 62(c); Rule 8(a), Fed.R. App. P.). In determining whether to grant a stay pending an appeal, a court must consider four factors:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether the issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.
Rodriguez ex rel. Rodriguez v. DeBuono, 175 F.3d 227, 234 (2d Cir. 1999).

  In its May 11 motion for a stay, RSA seeks an order permitting the trial of its action to proceed in Alabama state court on October 18, 2004. This is a request for the same relief which RSA seeks to obtain through the appeal from the April 23 Injunction that it filed on April 27. The motion for a stay must be denied.

  RSA principally argues in its motion for a stay that it "risks losing its trial preference." RSA contends that since an Alabama budget crisis has limited the number of jury trials, a change in its trial date will interfere with the Alabama court's organization of its trial schedule, and such a change may hinder the rescheduling of its trial. This argument addresses the second factor to be considered in connection with a stay, i.e., the existence of irreparable injury to the applicant. This is a new argument that RSA did not present in opposing the Alabama Defendants' motion for a writ.*fn6 RSA has not shown that the Alabama Circuit Court will penalize it or otherwise fail to give it an appropriate trial date as soon as the April 23 Injunction permits its trial to go forward.

  RSA does not make any substantive argument with respect to the other three factors. It does not make any showing, much less a strong showing, that it is likely to succeed in the Second Circuit on the merits. It did not make a motion for reconsideration to point out any authority or argument that the April 23 Opinion had overlooked, and its motion for a stay does not analyze the legal authority on which the April 23 Opinion relied.

  The April 23 Opinion described the substantial injury to others that would occur if the writ did not issue. RSA does not address that issue. It confines itself to pointing out that the plaintiffs in the WorldCom Securities Litigation class action and in the WorldCom Securities Litigation individual actions have not filed papers in support of the writ. As RSA well knows, and as is described in the April 23 Opinion, see In re WorldCom, Inc. Sec. Litig., 2004 WL 884960, at *5-7, the Coordination Order of January 30, see In re WorldCom, Inc. Sec. Litig., 02 Civ. 3288 (DLC), 2004 WL 817355 (S.D.N.Y. Jan. 30, 2004), was drafted after a lengthy consultation with all of the parties in the Securities Litigation, including all of the plaintiffs. All of the parties — plaintiffs and defendants — unanimously agreed that the trials in the remanded state court actions should follow the trial in the WorldCom securities class action. In re WorldCom, Inc. Sec. Litig., 2004 WL 884960, at *6. The final factor, the public interest, weighs strongly against the RSA's motion for a stay. For the reasons described in the April 23 Opinion, the trial of the Alabama Action this Fall will seriously disrupt the schedule in the Securities Litigation. Id. at *15-16. The writ was issued only after the Alabama court repeatedly rejected the efforts by this Court and the defendants to coordinate the schedules of our intertwined litigations. Id. at *8-11, 17. In our federal system, principles of comity apply to all courts, not just federal courts, and its obligations run in both directions.

  In sum, RSA has not shown that it is entitled to a stay. Each of the relevant factors weighs against a stay. Even if RSA were able to show that it would be "irreparably injured" by a stay — a showing that it has not succeeded in making — the remaining factors would require that its application for a stay be denied. The schedule in this complex and massive multi-district litigation should not be held hostage to the fear that Alabama's fiscal crisis may result in some unidentified delay in 2005 in scheduling the trial of the Alabama Action. Conclusion

  The motion by plaintiffs in Retirement Systems of Alabama v. J.P. Morgan Chase & Co., et al., Case No. CV 2002-1947-P (Circuit Court, Montgomery County, Alabama), for a stay of the April 23 Injunction pending a decision in their appeal of the April 23 Opinion and Injunction is denied.

  SO ORDERED.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.