Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Objection of Class Action Plaintiffs, and Transfers Actions to Southern District of New York
Three class actions – two in New York and one in Pennsylvania – were filed against Citigroup and others alleging that “Citigroup entities and/or its employees made misrepresentations or omissions in the context of the sale of auction rate securities (ARS).” In re Citigroup, Inc., Auction Rate Securities (ARS) Marketing Litig. (No. II), ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. June 10, 2009) [Slip Opn., at 1]. Defense attorneys filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Southern District of New York, _id._ Plaintiffs in one New York class action supported pretrial coordination of the class actions but opposed consolidation; plaintiffs in the Pennsylvania class action opposed the motion in its entirety. _Id._ The Pennsylvania plaintiffs’ argued “(1) the actions do not share sufficient questions of fact; (2) there are only a few actions involved in the litigation, making voluntary coordination among the parties preferable to formal centralization; and (3) centralization will only lead to delay of the actions,” but the Judicial Panel rejected these objections. _Id._, at 1-2. The Judicial Panel granted the motion to centralize the class action, finding that this will “eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary.” _Id._, at 1. The Panel also agreed that the Southern District of New York was the appropriate transferee court, as it was “two actions have been pending [there] for over a year” and “Defendants are located in this district, which was the only suggested transferee district, and relevant documents and witnesses may be found there.” _Id._, at 2. Accordingly, the Judicial Panel ordered the class actions transferred to the Southern District of New York. _Id._, at 3.
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