Opinion ID: 788062
Heading Depth: 2
Heading Rank: 2

Heading: The Alabama Action

Text: 10 The Alabama Action was filed on July 15, 2002, two-and-one-half months after the first class action was filed in the Southern District of New York. The complaint alleges violations of federal and Alabama statutory and common law, including claims under Sections 11, 12, and 15 of the Securities Act that are also pleaded in the Securities Litigation. The defendants include two former WorldCom officers (former CFO Scott Sullivan and former CEO Bernard J. Ebbers), six investment banks that are also named in the Securities Litigation (Bank of America Corp., J.P. Morgan Chase & Co., Banc of America Securities LLC, J.P. Morgan Securities, Inc., Citigroup Inc., and Citigroup Global Markets Inc.), Arthur Andersen, and Bear Stearns & Co. Only Bear Stearns is not a defendant in the Securities Litigation. As described by the District Court: 11 The Alabama Action arises from and pleads the same course of conduct on which the Securities Litigation is premised. It seeks damages for one of the two massive bond offerings at issue in the Securities Litigation — the May 2001 bond offering — as well as for Intermedia bonds sold in October of 2001 by Bear Stearns. Even the latter category of claims, however, emanates from the same underlying financial fraud within WorldCom that is the basis of the claims in the Securities Litigation. 12 Id. at 537. The plaintiffs in the Alabama Action are several retirement funds, collectively referred to as the Retirement Systems of Alabama 1 (RSA). Notably, RSA is not a party to any of the various federal actions consolidated in the Securities Litigation, and expressly opted out of the consolidated class action. 13 The Alabama Action was removed to the United States District Court for the Middle District of Alabama, but then remanded to state court on September 24, 2002. The defendants in the Alabama Action appealed the remand order, and on June 18, 2003, the Eleventh Circuit dismissed their appeal for lack of appellate jurisdiction. On January 12, 2004, the Supreme Court denied the defendants' petition for a writ of certiorari. 14 On February 17, 2004, the defendants in the Alabama Action moved in that case for the adoption of Judge Cote's Coordination Order. On March 5, before Judge Price had ruled on the motion, defendants moved in the alternative to modify Judge Price's scheduling order by extending the trial date of October 18, 2004 by nine months. On March 18, Judge Price denied defendants' motions.