In Re Nortel Networks Corp. Securities & "Erisa" Litigation

269 F.Supp.2d 1367 (2003)

In re NORTEL NETWORKS CORP. SECURITIES & "ERISA" LITIGATION

No. 1537.

Judicial Panel on Multidistrict Litigation.

June 24, 2003.

Before WM. TERRELL HODGES, Chairman, JOHN F. KEENAN, BRUCE M. SELYA, JULIA SMITH GIBBONS, D. LOWELL JENSEN, J. FREDERICK MOTZ and ROBERT L. MILLER, Jr., Judges of the Panel.

TRANSFER ORDER

WM. TERRELL HODGES, Chairman.

This litigation consists of the 29 actions listed on the attached Schedules A and B and pending in two districts as follows: 27 actions in the Southern District of New York and two actions in the Middle District of Tennessee. Now before the Panel is a motion, brought pursuant to 28 U.S.C. § 1407, by the plaintiffs in one of the New York actions seeking centralization of this docket in the Southern District of New York.

On the basis of the papers filed and hearing session held, the Panel finds that the three actions in this litigation listed on Schedule A involve common questions of fact, and that centralization under Section 1407 of those actions in the Middle District of Tennessee will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. Each of these three actions is brought under the Employee Retirement Income Security Act (ERISA) as a class action on behalf of participants in an investment plan sponsored by a subsidiary of Nortel Networks Corp. (Nortel). Among other things, all plaintiffs allege that defendants breached fiduciary duties by concentrating the plan's investment in Nortel stock and failing to disclose complete and accurate information regarding the risks of investing in the plan. Plaintiffs also allege that defendants misled plan participants about Nortel's financial condition. Centralization of these actions under Section 1407 is thus necessary in order to eliminate duplicative pretrial proceedings, prevent inconsistent pretrial rulings (especially with regard to class certification), and conserve the resources of the parties, their counsel and the judiciary. In designating the Middle District of Tennessee as transferee forum for the actions on Schedule A, we note that i) two of the three actions on Schedule A are already pending there; and ii) in contrast to the recently filed Southern District of New York ERISA action on Schedule A, the first of the two Tennessee ERISA actions has been pending since December 2001, thus already affording the court in Tennessee the opportunity to develop a familiarity with the issues in this litigation.

We decline to order transfer of the 26 actions listed on Schedule B and pending in the Southern District of New York. These actions, filed between March and October 2001, have already been consolidated before a single judge (different from the one assigned the lone Southern District of New York ERISA action on Schedule A) and are brought under the federal securities laws on behalf of purchasers of Nortel stock. Even though these actions share questions with the Schedule A ERISA actions concerning Nortel's financial condition and accounting practices, we are not persuaded that transfer of the actions on Schedule B is necessary or desirable at this time. The Nortel ERISA litigation and the Nortel securities litigation have proceeded independently of each other for over a year and a half. We are not convinced that any incremental burden associated with separate pretrial venues for the ERISA and securities actions is great enough to justify the transfer of either the ERISA or the securities litigation from a judge who has already devoted significant time and effort in the conduct of the matters before him.

IT IS THEREFORE ORDERED that transfer of the 26 actions listed on the attached Schedule B and pending in the Southern District of New York is denied.

IT IS FURTHER ORDERED that, pursuant to 28 U.S.C. § 1407, the action listed on the attached Schedule A and pending in the Southern District of New York is transferred to the Middle District of Tennessee and, with the consent of that court, assigned to the Honorable John T. Nixon for coordinated or consolidated pretrial proceedings with the actions pending in that district and listed on Schedule A.

IT IS FURTHER ORDERED that MDL-1537 is renamed as follows: MDL-1537—In re Nortel Networks Corp. "ERISA" Litigation.

SCHEDULE A

MDL-1537—In re Nortel Networks Corp. Securities & "ERISA" Litigation

Southern District of New York

Maryvonne Tubb, et al. v. Nortel Networks, Inc., et al, CA. No. 1:03-1716

Middle District of Tennessee

Michael Zafarano, Jr., et al. v. Nortel Networks Corp., CA. No. 3:01-1593

Carol Felts v. Nortel Networks Corp., et al., CA. No. 3:02-283

SCHEDULE B

MDL-1537—In re Nortel Networks Corp. Securities & "ERISA" Litigation

Southern District of New York

In re Nortel Networks Corp. Securities Litigation, CA. No. 1:01-1855

Dennis Pasparage v. Nortel Networks Corp., et al., CA. No. 1:01-5200

Harriet Goldstein v. Nortel Networks Corp., et al., CA. No. 1:01-5271

George Elkins v. Nortel Networks Corp., et al., CA. No. 1:01-5294

Gregory Tymn v. Nortel Networks Corp., et al., CA. No. 1:01-5569

Ezra Birnbaum v. Nortel Networks Corp., et al., CA. No. 1:01-5676

Dr. Eugene Strieker v. Nortel Networks Corp., et al., CA. No. 1:01-5677

Donald T. Womble v. Nortel Networks Corp., et al., CA. No. 1:01-5678

SCHEDULE A—Continued

Felix Ezeir v. Nortel Networks Corp., et al., CA. No. 1:01-5679

Jerry Matez v. Nortel Networks Corp., et al., CA. No. 1:01-5680

Barrett M. Fisher v. Nortel Networks Corp., et al., CA. No. 1:01-5681

Patrick D'Auria v. Nortel Networks Corp., et al., CA. No. 1:01-5682

Richard Eckstein, I.R.A. v. Nortel Networks Corp., et al., CA. No. 1:01-5683

William Smith v. Nortel Networks Corp., et al., CA. No. 1:01-5684

Leonard Rapoport v. Nortel Networks Corp., et al., CA. No. 1:01-5685

Richard Basta v. Nortel Networks Corp., et al., CA. No. 1:01-5686

Xiomara Ardolina v. Nortel Networks Corp., et al., CA. No. 1:01-5687

Pierre Barthole v. Nortel Networks Corp., et al., CA. No. 1:01-5688

Dean E. Hart v. Nortel Networks Corp., et al., CA. No. 1:01-5689

William Vanstavoren v. Nortel Networks Corp., et al., CA. No. 1:01-5809

Zorba Lieberman v. Nortel Networks Corp., et al., CA. No. 1:01-5810

Paul Yen v. Nortel Networks Corp., et al., CA. No. 1:01-5935

James Hinson v. Nortel Networks Corp., et al., CA. No. 1:01-6312

Kumaran Krishnan, et al. v. Nortel Networks Corp., et al., CA. No. 1:01-6314

Linda Adler v. Nortel Networks Corp., et al., CA. No. 1:01-6315

Jeffrey Goldstein v. Nortel Networks Corp., et al., CA. No. 1:01-9268