Opinion
02 Civ. 4497 (WK); 02 Civ. 4714 (WK); 02 Civ. 5103 (WK); 02 Civ. 5336 (WK); 02 Civ. 5358 (WK); 02 Civ. 5508 (WK); 02 Civ. 5515 (WK); 02 Civ. 5519 (WK); 02 Civ. 5706 (WK); 02 Civ. 5965 (WK); 02 Civ. 6152 (WK); 02 Civ. 6526 (WK); 02 Civ. 6580 (WK); 02 Civ. 6945 (WK).
September 23, 2002
Steven G. Schulman, Esq., Samuel H. Rudman, Esq., U. Seth Ottensoser, Esq., Millberg Weiss Bershad Hynes Lerach LLP, New York, NY, Jack G. Fruchter, Esq., Fruchter Twersky, New York, NY, David R. Scott, Esq., Michael A. Swick, Esq., Scott Scott LLC, Colchester, CT, For Plaintiff Charles Mezansky.
Mel E. Lifshitz, Esq., Bernstein Liebhard Lifshitz, LLP, New York, NY, For Plaintiff Drimal, Ltd.
Curtis V. Trinko, Esq., Law Offices of Curtis V. Trinko, LLP, New York, NY, Steven G. Schulman, Esq., Samuel H. Rudman, Esq., Millberg Weiss Bershad Hynes Lerach LLP, New York, NY, Alfred G. Yates, Esq., Law Offices of Alfred G. Yates, Pittsburgh, PA, For Plaintiff Thomas J. Spurlock.
Steven G. Schulman, Esq., Samuel H. Rudman, Esq., Millberg Weiss Bershad Hynes Lerach LLP, New York, NY, Deborah R. Gross, Esq., Law Offices of Bernard M. Gross, Philadelphia, PA, For Plaintiff Alvin Chess.
Patrick A. Klingman, Esq., Schatz Nobel, P.C., Hartford, CT, For Plaintiff Michael Morin.
Marian P. Rosner, Esq., Michael A. Schwartz, Esq., Wolf Popper LLP, New York, NY, Richard A. Lockridge, Esq., Karen M. Hanson, Esq., Minneapolis, Minnesota, Mike Harris, Esq., Philadelphia, PA, For Plaintiffs Norman Brown and Florence Brown.
Aaron L. Brody, Esq., Tzivia Brody, Esq., Jules Brody, Esq., Stull, Stull Brody, New York, NY, Joseph H. Weiss, Esq., Weiss Yourman, New York, NY, For Plaintiff Judith Stern Kreston.
Ralph M. Stone, Esq., Jill M. Levy, Esq., Shalov Stone Bonner LLP, New York, NY, Roberta M. Roseman, Esq., John A. Macoretta, Esq., Spector Roseman Kodroff, P.C., Philadelphia, PA, For Plaintiff Elaine B. Snydman.
Fred T. Isquith, Esq., Wolf Haldenstein Adler Freeman Herz LLP, New York, NY, For Plaintiff Owen Brady.
Robert I. Harwood, Esq., Frederick W. Gerkens, III, Esq., Jeffrey M. Norton, Esq., Wechsler Harwood Halebian Feffer LLP, New York, NY, For Plaintiff Andrea Szlavik.
Aaron L. Brody, Esq. Tzivia Brody, Esq., Jules Brody, Esq., Stull, Stull Brody, New York, NY, Joseph H. Weiss, Esq., Weiss Yourman, New York, NY, For Plaintiff Gary Tabach.
Steven G. Schulman, Esq., Samuel H. Rudman, Esq., Millberg Weiss Bershad Hynes Lerach LLP, New York, NY, John G. Emerson, Jr., Esq., The Emerson Firm, Little Rock, AK, For Plaintiff Joyce Holford.
Mel E. Lifshitz, Esq., Gregory M. Egleston, Esq., Bernstein, Liebhard Lifshitz, LLP, New York, NY, Carol V. Gilden, Esq., Michael E. Moskovitz, Esq., Much Shelist Freed Denenberg Ament Rubenstein, P.C., Chicago, IL, Jayne A. Goldstein, Esq., Mager White Goldstein, LLP, Jenkintown, PA, For Plaintiff Menaim Allown.
Joshua M. Lifshitz, Esq., Peter D. Bull, Esq., Bull Lifshitz, LLP, New York, NY, For Plaintiff Joan Rand.
Jules Brody, Esq., Aaron L. Brody, Esq., Stull, Stull Brody New York, NY, For Manuel Bordelove, David Hoiness, Roland Pang, Rodney Peterson, May Taylor, Erik Vieyra, Jeffrey Vieyra, Virginia Stockton, and Matthew Vieyra.
Steven G. Schulman, Esq., Samuel H. Rudman, Esq., David A. Rosenfeld, Esq., Millberg Weiss Bershad Hynes Lerach LLP, New York, NY, David R. Scott, Esq., Michael A. Swick, Esq., Scott Scott LLC, Colchester, CT, For Gordon Buck and Sharon Rusch.
Sandy A. Liebhard, Esq., Gregory M. Egleston, Esq., Bernstein Liebhard Lifshitz, LLP, New York, NY, Andrew L. Barroway, Esq., Stuart L. Berman, Esq., Darren J. Check, Esq., Schiffrin Barroway, LLP, Bala Cynwyd, PA, For Optimum Investment Advisors.
Flextronics International, Ltd., Singapore, Flextronics International, Ltd., Legal Department, Singapore, Singapore, Flextronics International (USA), Inc., Legal Department, San Jose, CA, Defendant Flextronics International, Ltd.
Flextronics International, Ltd., Legal Department, Singapore, Singapore, Flextronics International (USA), Inc., Legal Department, San Jose, CA, Defendant Michael E. Marks.
11 Ubi Road 1, Singapore, Flextronics International, Ltd., Legal Department, Singapore, Singapore, Flextronics International (USA), Inc., Legal Department, San Jose, CA, Defendant Michael McNamara.
11 Ubi Road 1, Singapore, Flextronics International, Ltd., Legal Department, Singapore, Singapore, Flextronics International (USA), Inc., Legal Department, San Jose, CA, Defendant Robert R. B. Dykes.
MEMORANDUM ORDER
Before this Court are currently fourteen securities fraud class actions against Flextronics International, Ltd. (hereinafter "Flextronics") as well as certain of its officers and directors. Putative class members Manuel Bordelove, David Hoiness, Roland Pang, Rodney Peterson, May Taylor, Erik Vieyra, Jeffrey Vieyra, Virginia Stockton, Matthew Vieyra, Optimum Investment Advisors, Gordon Buck and Sharon Rusch move this Court to consolidate these class actions pursuant to Rule 42(a) of the Federal Rules of Civil Procedure. For the reasons set forth below, we GRANT their motions for consolidation.
BACKGROUND
On June 12, 2002, Charles Mezansky ("Mezansky") filed a class action in this Court against: (a) Flextronics, a corporation which purportedly provides electronics manufacturing services to original equipment manufacturers; (b) Michael E. Marks, Flextronics' Chief Executive Officer and the Chairman of Flextronics' Board of Directors; (c) Michael McNamara, Flextronics' "President of American Operations;" and (d) Robert R.B. Dykes ("Dykes"), Flextronics' Chief Financial Officer as well as the President of "Systems Group" (hereinafter collectively the "Defendants"). Mezansky alleges that these Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), 78t(a), as well as Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.
After Mezansky filed his Complaint, the following class actions were filed in this district and accepted by this Court as related to the Mezansky action: Drimal, Ltd. v. Flextronics Int'l, Ltd., No. 02 Civ. 4714; Spurlock v. Flextronics Int'l, Ltd., No. 02 Civ. 5103; Chess v. Flextronics Int'l, Ltd., No. 02 Civ. 5336; Morin v. Flextronics Int'l, Ltd., No. 02 Civ. 5358; Brown v. Flextronics Int'l, Ltd., No. 02 Civ. 5508; Kreston v. Flextronics Int'l, Ltd., No. 02 Civ. 5515; Snydman v. Flextronics Int'l, Ltd., No. 02 Civ. 5519; Brady. v. Flextronics Int'l, Ltd., No. 02 Civ. 5706; Szlavik v. Flextronics Int'l, Ltd., No. 02 Civ. 5965; Tabach v. Flextronics Int'l, Ltd., No. 02 Civ. 6152; Holford v. Flextronics Int'l, Ltd., No. 02 Civ. 6526; Allown v. Flextronics Int'l, Ltd., No. 02 Civ. 6580; and Rand v. Flextronics Int'l, Ltd., No. 02 Civ. 6945. In the interim, as a number of the aforementioned related cases were being filed with this Court, putative class members Manuel Bordelove, David Hoiness, Roland Pang, Rodney Peterson, May Taylor, Erik Vieyra, Jeffrey Vieyra, Virginia Stockton, Matthew Vieyra, Optimum Investment Advisors, Gordon Buck and Sharon Rusch moved to consolidate the foregoing class actions. They also sought, via three competing motions, to be appointed Lead Plaintiff and to have their selected attorneys approved as Lead Counsel in accordance with the Private Securities Litigation Reform Act of 1995 ("PSLRA"), 15 U.S.C. § 78u-4.
Since then, those putative class members have come to an agreement amongst themselves with respect to who they believe should be appointed Lead Plaintiff and approved as Lead Counsel. They recently submitted a Stipulation and Proposed Order with respect to that suggested arrangement to this Court. Although we are currently reviewing that Stipulation and Proposed Order, we first turn our attention to these putative class members' motions for consolidation.
Where, as here, "more than one action on behalf of a class asserting the same claim or claims arising" under the federal securities laws "has been filed, and any party has sought to consolidate those actions for pretrial purposes or for trial," we cannot make a determination as to who should be appointed Lead Plaintiff "until after the decision on the motion to consolidate is rendered." 15 U.S.C. § 78u-4(a)(3)(B)(ii).
DISCUSSION
"Rule 42(a) of the Federal Rules of Civil Procedure empowers a trial judge to consolidate actions . . . when there are common questions of law or fact to avoid unnecessary costs or delay." Johnson v. Celotex Corp. (2d Cir.) 899 F.2d 1281, 1284, cert. denied (1990) 498 U.S. 920. Rule 42(a) provides:
When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; 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.
FED.R.CIV.P. 42(a). Pursuant to Rule 42(a), we have broad discretion to determine whether consolidation is appropriate. See Johnson, 899 F.2d at 1284. See also Primavera Familienstiftung v. Askin (S.D.N.Y. 1997) 173 F.R.D. 115, 129 ("A district court has broad discretion to consolidate actions.")
"In the exercise of discretion, courts have taken the view that considerations of judicial economy favor consolidation." Johnson, 899 F.2d at 1285. Hence, "so long as any confusion or prejudice does not outweigh efficiency concerns, consolidation will generally be appropriate." Primavera Familienstiftung, 173 F.R.D. at 129. In fact, consolidation is common in federal securities class actions. In re Cendant Corp. Litig. (D.N.J. 1998) 182 F.R.D. 476, 478.
In this instance, the putative class members moving for consolidation each assert that the actions sought to be consolidated share both factual as well as legal issues in common and that consolidation will prevent unnecessary expense and delay. No one has opposed consolidation.
Each of the class actions here is predicated on the same or substantially similar purported misstatements and omissions by the same Defendants (which allegedly resulted in inflated earnings and revenue) during nearly the same Class Period (namely, October 2, 2001 through June 4, 2002) and the effect of such conduct on the price of Flextronics' stock when the conduct came to light. Given the substantially similar allegations in each of the complaints which are the subject of the motions for consolidation at bar, common questions of fact clearly suffuse the class actions before this Court, for, as noted in Aronson v. McKesson HBOC, Inc. (N.D.Cal. 1999) 79 F. Supp.2d 1146, 1150, "[i]t seems obvious that . . . separate class actions predicated on the same set of misstatements by corporate officials, causing an artificial inflation and then a corrective drop in share prices, present common questions of fact."
Although thirteen of the fourteen above-captioned class actions define the Class Period as the time between October 2, 2001 and June 4, 2002, the Complaint in Brown v. Flextronics Int'l, Ltd., No. 02 Civ. 5508, identifies the Class Period as the time between October 2, 2001 and June 3, 2002. However, "while particular plaintiffs may disagree on the precise confines of the relevant class period, these differences . . . do not preclude consolidation." Pinkowitz v. Elan Corp., PLC (S.D.N.Y. July 29, 2002) 2002 WL 1822118, *3.
Common questions of law also bind fast the above-captioned class actions. Each of the foregoing complaints assert that the Defendants' purportedly wrongful conduct violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. Hence, each of the claims will raise the same set of questions in each such case. See, e.g. Switzenbaum v. Orbital Sciences Corp. (E.D.Va. 1999) 187 F.R.D. 246, 248 ("the 10b-5 claims alone will raise the same set of questions in each case, such as (1) whether the Defendants made a false or misleading statement of material fact, or failed to disclose a material fact under circumstances giving rise to a duty to disclose; (2) whether they did so with scienter; (3) whether the Plaintiffs justifiably relied on these material omissions; and (4) whether the Defendants' acts or omissions and the Plaintiffs' reliance thereon proximately caused them harm.")
Accordingly, considerations of judicial economy would best be served by consolidation. We thus grant the putative class members' motions and consolidate the above-captioned class actions pursuant to Rule 42(a).
CONCLUSION
Having considered the motions for consolidation submitted to this Court by Manuel Bordelove, David Hoiness, Roland Pang, Rodney Peterson, May Taylor, Erik Vieyra, Jeffrey Vieyra, Virginia Stockton, Matthew Vieyra, Optimum Investment Advisors, Gordon Buck and Sharon Rusch, IT IS HEREBY ORDERED THAT:
1. The motions for consolidation are granted;
2. The following actions are hereby consolidated for all purposes, including pretrial proceedings, trial, and appeal, pursuant to Rule 42(a) of the Federal Rules of Civil Procedure:
Abbreviated Case Name Case Number
Mezansky v. Flextronics Int'l, Ltd. 02 Civ. 4497 Drimal, Ltd. v. Flextronics Int'l, Ltd. 02 Civ. 4714 Spurlock v. Flextronics Int'l, Ltd. 02 Civ. 5103 Chess v. Flextronics Int'l, Ltd. 02 Civ. 5336 Morin v. Flextronics Int'l, Ltd. 02 Civ. 5358 Brown v. Flextronics Int'l, Ltd. 02 Civ. 5508 Kreston v. Flextronics Int'l, Ltd. 02 Civ. 5515 Snydman v. Flextronics Int'l, Ltd. 02 Civ. 5519 Brady v. Flextronics Int'l, Ltd. 02 Civ. 5706 Szlavik v. Flextronics Int'l, Ltd. 02 Civ. 5965 Tabach v. Flextronics Int'l, Ltd. 02 Civ. 6152 Holford v. Flextronics Int'l, Ltd. 02 Civ. 6526 Allown v. Flextronics Int'l, Ltd. 02 Civ. 6580 Rand v. Flextronics Int'l, Ltd. 02 Civ. 6945
3. The caption for these consolidated actions shall be "In re Flextronics International, Ltd. Securities Litigation" and the files of these consolidated actions shall be maintained in one file under Master File No. 02 Civ. 4497 (WK). Any other actions now pending or later filed in this district which arise out of or are related to the same facts as alleged in the above-identified cases shall be consolidated for all purposes, if and when they are brought to the Court's attention.
4. Every pleading in the consolidation actions, or in any separate action included herein, shall bear the following caption:
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT NEW YORK
In re FLEXTRONICS INTERNATIONAL, LTD. SECURITIES LITIGATION
02 Civ. 4497 (WK)
This Document Relates To:
5. When a pleading is intended to be applicable to all actions governed by this Order, the phrase "All Actions" shall appear immediately after the phrase "This Document Relates To:" in the caption set out above. When a pleading is intended to be applicable to only some, but not all, of the consolidated actions, this Court's docket number for each individual action to which the pleading is intended to be applicable and the last name or corporate name of the first-named plaintiff in said action shall appear immediately after the phrase "This Document Relates To:" in the caption described above. E.g., 02 Civ. 4714 (WK) (Drimal, Ltd.).
6. A Master Docket and a Master File hereby are established for the above-consolidated proceedings and for all other related cases filed in or transferred to this Court. Separate dockets shall continue to be maintained for each of the individual actions hereby consolidated, and entries shall be made in the docket of each individual case in accordance with the regular procedures of the Clerk of this Court, except as modified by this Order.
7. When a pleading is filed and the caption shows that it is applicable to "All Actions," the Clerk of the Court shall file such pleadings in the Master File. No further copies need to be filed, and no other docket entries need be made.
8. When a pleading is filed and the caption shows that it is applicable to fewer than all of the consolidated actions, the Clerk of the Court will file such a pleading in the Master File only but shall docket such filing on the Master Docket and the docket of each applicable action.
9. When a case which properly belongs as part of In re Flextronics International, Ltd. Securities Litigation is filed in this Court or transferred to this Court from another court and assigned to Judge Knapp, the Clerk of this Court shall:
(a) Place a copy of this Order in the separate file for such action;
(b) Mail to the attorneys for the plaintiffs in the newly-filed or transferred case a copy of this Order and direct that this Order be served upon or mailed to any new defendant(s) or their counsel in the newly-filed or transferred case; and (c) Make an appropriate entry on the Master Docket.
10. This Court requests the assistance of counsel in calling to the attention of the Clerk of the Court the filing or transfer of any case which might be consolidated as part of In re Flextronics International, Ltd. Securities Litigation.
11. After this Court has determined who shall be appointed Lead Plaintiff and selected as Lead Counsel, a separate order will refer these consolidated actions to a Magistrate Judge for general pre-trial management as well as for reports and recommendations in accordance with 28 U.S.C. § 636(b)(1)(A) and 28 U.S.C. § 636(b)(1)(B).
12. The Clerk of the Court is directed to serve a copy of this Oder on all parties of record in the consolidated actions.
SO ORDERED.