Shaev v. Baker, II et al

Filing 219

ORDER GRANTING MOTION TO CONSOLIDATE by Judge Jon S. Tigar; granting (204) Motion to Consolidate Cases in case 3:16-cv-05541-JST. (wsn, COURT STAFF) (Filed on 5/2/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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IN RE WELLS FARGO & COMPANY
SHAREHOLDER DERIVATIVE
LITIGATION

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This Document Relates to:

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ALL ACTIONS

United States District Court
Northern District of California

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Lead Case No. 3:16-cv-05541-JST
(Consolidated with Nos. 3:16-cv-05592;
3:16-cv-05745; 3:16-cv-05817; 3:16-cv05915; 3:16-cv-06262; 3:16-cv-06624; and
3:16-cv-06631)
ORDER GRANTING MOTION TO
CONSOLIDATE
Re: ECF No. 204

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Now before the Court is Plaintiffs Fire and Police Pension Association of Colorado and the

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City of Birmingham Retirement and Relief System’s (the “Lead Plaintiffs”) motion to consolidate

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the related shareholder derivative action Hannon v. Loughlin, No. 3:17-cv-07236-JST (N.D. Cal.

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filed Dec. 20, 2017) (Hannon II)1 with In re Wells Fargo & Co. Shareholder Derivative

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Litigation, Lead Case No. 3:16-cv-05541-JST (N.D. Cal.), for all purposes (the “Motion”).

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The threshold question of whether the actions should be consolidated at all is easy. As

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Hannon concedes, his claims against Wells Fargo are substantially similar, and in some cases

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identical, to those brought in the Consolidated Action. See ECF No. 207 at 8 (“Both Hannon and

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the Consolidated Action are shareholder derivative actions brought on behalf of Wells Fargo and

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seek damages and injunctive relief against defendants who perpetrated, between 2011 and 2016, a

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massive scheme…to open accounts, including credit card accounts, for customers without their

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authorization.”). Thus, the Court concludes that the cases “involve a common question of law or

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fact” sufficient to satisfy Rule 42 of the Federal Rules of Civil Procedure.

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The same plaintiff and plaintiff’s counsel previously filed another case against Wells Fargo
which the Court consolidated with the lead case. Hannon v. Loughlin, No. 3:16-cv-06624 (N.D.
Cal. filed Nov. 15, 2016).
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Mr. Hannon and his counsel request that if the Court does consolidate the cases, it permit

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them to litigate any claims against American Express. Weighing the equities, the Court concludes

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they point against granting the request. First, it would effectively create another lead counsel, at

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least for some purposes, thereby undermining the goals of the lead counsel mechanism: “to

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control the management of the litigation as a whole . . . and decide what claims to assert on behalf

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of the class.” In re Bank of Am. Corp. Sec., Derivative & ERISA Litig. (BofA I), No. 09 MDL 2058

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(DC), 2010 WL 1438980, at *2–3 (S.D.N.Y. Apr. 9, 2010) (consolidating later-filed cases despite

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the presence of additional claims not alleged in the previously consolidated cases). Second, there

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is good reason to believe that Hannon II’s counsel’s dominant purpose in adding claims against
American Express was simply to escape the Court’s prior order of consolidation and enlarge their

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United States District Court
Northern District of California

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role in the litigation. The same plaintiff, and the same plaintiff’s counsel, previously agreed to

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consolidation, and now bring claims against American Express based on information that was

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publicly available when they filed their first complaint. Lastly, no substantive right of any party

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will be injured by consolidating the cases for all purposes. Lead Counsel has acknowledged that

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they will not pursue the American Express claims at this time if the cases are consolidated because

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they have insufficient information as of now to believe they are meritorious. If discovery later

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shows that the claims have merit, however, Lead Counsel will have a strong economic incentive to

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bring them. “Lead Plaintiffs surely have incentive to bring these claims if there is a meritorious

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basis for doing so. Lead Plaintiffs should be given the opportunity to make this decision.” Bank

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of Am. Corp. Sec, Litig., 2010 WL 1438980, at *2.

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Therefore, having considered the Lead Plaintiffs’ Motion and finding good cause, the

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Court GRANTS Lead Plaintiffs’ Motion to Consolidate Related Shareholder Derivative Actions,

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and ORDERS that the following cases be consolidated for all purposes:

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In re Wells Fargo & Co. Shareholder Derivative Litigation,
No. 3:16-cv-05541-JST (Lead Case); and

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Hannon v. Loughlin et al., No. 3:17-cv-07236-JST

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Mr. Hannon’s request that he and his counsel be permitted to prosecute any AmericanExpress derivative claims separately is denied.
IT IS SO ORDERED.
Dated: May 2, 2018
______________________________________
JON S. TIGAR
United States District Judge

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United States District Court
Northern District of California

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