Roe v. Arch Coal Inc et al

Filing 33

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiffs' motion to consolidate the actions and appoint interim class counsel [Doc. #7] is granted.IT IS FURTHER ORDERED that the plaintiffs' request for an oral argument on their motion for consolidation and appointment of interim class counsel [Doc. #27] is denied as moot.IT IS FURTHER ORDERED that Elmer Bush v. Arch Coal, Inc., et al., 4:15-CV-1026 (SNLJ) is consolidated with Douglas R. Roe v. Arch Coal, Inc., et al., 4:15-CV-910 (CE J). IT IS FURTHER ORDERED that henceforth all pleadings and other documents in this matter shall be filed in Douglas R. Roe v. Arch Coal, Inc., et al., 4:15-CV-910 (CEJ). See E.D.Mo. L.R. 4.03 ([T]he consolidated cases shall be reassigned to the ju dge presiding in the lowest-numbered case. Following consolidation, all documents shall be filed only in the lowest-numbered case....). IT IS FURTHER ORDERED that the firms of Kessler Topaz Meltzer & Check, LLP and Stull, Stull & Brody are appoint ed as interim co-lead counsel, and the firm of Blitz, Bardgett & Deutsch, LC is appointed as interim liaison counsel. IT IS FURTHER ORDERED that interim co-lead class counsel shall have the authority over the following matters on behalf of all plai ntiffs in the consolidated action: (1) initiating, responding to, scheduling, briefing and arguing all motions; (2) determining the scope, order and conduct of all discovery proceedings; (3) assigning such work assignments to other counsel as they may deem appropriate (SEE ORDER); IT IS FURTHER ORDERED that defendants shall produce documents or information within ten (10) days of the entry of this Order sufficient to enable plaintiffs to accurately identify the specific persons who serve as the Arch Coal, Inc. Employee Thrift Plan fiduciaries, including but not limited to: Plan documents and materials that describe the operation, administration, and management of the Plan; and documents that identify the Plan fiduciaries and describe th e scope of their fiduciary duties (the core ERISA documents).IT IS FURTHER ORDERED that plaintiffs shall file a consolidated complaint no later than thirty (30) days after the production of the core ERISA documents. Each defendant shall file an answe r or other responsive pleading to the consolidated amended complaint no later than sixty (60) days after its filing. IT IS FURTHER ORDERED that plaintiffs shall have forty-five (45) days to file a response to any dispositive motions defendants direc t at the consolidated complaint. Defendants shall have thirty (30) days to file any reply. re: 7 MOTION to Consolidate Cases 4:14-cv-00910 and 4:15-cv-1026 into lower numbered case no 4:15-cv-00910 Consolidate with higher case number 4:15-cv-1026 MOTION to Appoint Counsel Interim Class Counsel filed by Plaintiff Douglas R Roe ( Response to Court due by 11/12/2015.). Signed by District Judge Carol E. Jackson on 11/2/15. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DOUGLAS R. ROE, on behalf of himself
and Arch Coal, Inc. Employee Thrift Plan,
and/or alternatively on behalf of a class
consisting of similarly situated
participants of the Plan,
Plaintiff,
vs.
ARCH COAL, INC., et al.,
Defendants.
-------------------------------------------ELMER BUSH, individually and on behalf
of all others similarly situated,
Plaintiff,
vs.
ARCH COAL, INC., et al.,
Defendants.

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Case No. 4:15-CV-910 (CEJ)

Case No. 4:15-CV-1026 (SNLJ)

MEMORANDUM AND ORDER
These related matters are before the Court on the motion of plaintiffs Elmer
Bush and Douglas R. Roe to consolidate the above-captioned actions and appoint
interim class counsel for plaintiffs in the consolidated action. Defendant Arch Coal,
Inc. has responded in partial opposition, and the issues are fully briefed.
I.

Background

Plaintiffs filed separate complaints against employees of Arch Coal, Inc.,
alleging breach of fiduciary duties in violation of the Employee Retirement Security
Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. See Bush v. Arch Coal, Inc., et al.,
Case No. 4:15-CV-1026 (E.D. Mo. June 30, 2015); Roe v. Arch Coal, Inc., et al.,

Case No. 4:15-CV-910 (E.D. Mo. June 9, 2015). The plaintiffs seek relief pursuant
to sections 409 and 502(a)(2) of ERISA, 29 U.S.C. §§ 1109 and 1132(a)(2).
Plaintiffs filed the complaints as representative actions on behalf of themselves, the
Arch Coal, Inc. Employee Thrift Plan (the “Plan”), and similarly situated participants
and beneficiaries of the Plan. Plaintiffs move to consolidate the actions on the basis
of identical questions of law and fact pursuant to Rule 42(a) of the Federal Rules of
Civil Procedure. Additionally, plaintiffs request the appointment of proposed interim
class counsel in accordance with Rule 23(g)(3). See Fed. R. Civ. P. 23(g)(3).
Defendant Arch Coal, Inc. filed a memorandum in partial opposition to the
plaintiffs’ instant motion. Arch Coal agrees with the plaintiffs’ proposed schedule
for initial activities, including initial disclosures, the filing of a consolidated
complaint, and a schedule for answering and filing motions to dismiss. However,
Arch Coal contends that the appointment of class counsel is not warranted and
premature prior to the close of pleadings. Furthermore, Arch Coal argues that a
formal consolidation order is unnecessary at this time.
II.

Discussion
A.

Consolidation

Rule 42(a) provides that a court may consolidate actions before the court
involving a common question of law or fact. Fed. R. Civ. P. 42(a)(2). On review of
the complaints filed in the two cases, the Court finds that both actions involve
common questions of law and fact.

Both complaints allege that defendant-

fiduciaries of the Plan breached their ERISA-mandated fiduciary duties owed to the
participants of the Plan by, inter alia, retaining Arch Coal, Inc. common stock as an
investment option in the Plan when a reasonable fiduciary under the prudent

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investor standard would have done otherwise.

Both actions are brought

derivatively on the Plan’s behalf and on behalf of a Rule 23 class. The underlying
factual allegations and claims for relief are nearly identical.

As such, the Court

finds consolidation of the two actions under Rule 42(a) appropriate to avoid the
unnecessary waste of judicial resources and additional cost and delay to the parties.
Defendant Arch Coal “agrees that there is no reason for this dispute to
proceed on separate complaints or in separate cases,” but suggests that an order of
consolidation is unnecessary because “[p]laintiffs can file [a] new complaint in one
case and dismiss the other.” Def.’s Mem. [Doc. #20]. However, defendant ignores
the plaintiffs’ concerns regarding the potential impact of a voluntary dismissal on
future proceedings. See, e.g., Fed. R. Civ. P. 41(a)(1)(B) (stating that a notice of
voluntary dismissal operates as an adjudication on the merits if the plaintiff
previously dismissed any federal- or state-court action based on the same claim);
Fed. R. Civ. P. 41(d) (allowing a court to order a plaintiff to pay costs of a
previously filed action if the plaintiff files another action based on the same claim
against the same defendant).

Furthermore, defendant disregards the value of

consolidation under Rule 42(a) as an “important tool of judicial administration,
invoked to expedite trial and eliminate unnecessary repetition and confusion.”
Devlin v. Transp. Commc’ns Int’l Union, 175 F.3d 121, 130 (2d Cir. 1999) (internal
quotations omitted). As noted above, the Court finds consolidation appropriate to
promote efficiency, convenience and economy of both the parties and the Court.
Additionally, Arch Coal submits that if the Court deems a consolidation order
appropriate, “since Bush was the first case assigned to a district judge, the Court in
its discretion could consolidate before the first-assigned judge.” Def.’s Mem. at 7.

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The Roe case was filed on June 9, 2015 and assigned the case number 4:15-CV910.

The case was initially assigned to a magistrate judge, and was later

reassigned to the undersigned district judge for all further proceedings. The Bush
case was filed on June 30, 2015 and assigned the case number 4:15-CV-1026. It
was assigned directly to a district judge.
Local Rule 4.03 states that if a motion to consolidate is granted, “the
consolidated cases shall be reassigned to the judge presiding in the lowestnumbered case.” E.D.Mo. L.R. 4.03. The rule does not provide the Court discretion
in the reassignment. Nor does the rule distinguish between district and magistrate
judges.

See E.D.Mo. L.R. 1.06 (“Unless otherwise specified, the term ‘judge’ as

used in these rules refers to a district judge, a magistrate judge, and, where
practicable, a bankruptcy judge.”).

Accordingly, the plaintiffs’ actions currently

pending before this Court will be consolidated for all purposes under the lowestnumbered case, Roe v. Arch Coal, Inc., et al., 4:15-CV-910. Counsel for defendant
is admonished to read and follow the Local Rules before filing future documents
with the Court.
B.

Appointment of Interim Lead and Liaison Counsel

Plaintiffs also seek an order appointing the law firms of Kessler Topaz Meltzer
& Check, LLP and Stull, Stull & Brody as interim co-lead class counsel, and
appointing the law firm of Blitz, Bardgett & Deutsch, LC as interim liaison class
counsel. Before determining whether to certify an action as a class action, Rule 23
allows a court to designate interim counsel to act on behalf of the putative class.
Fed. R. Civ. P. 23(g)(3). When appointing interim class counsel, courts generally
look to the same factors used in determining the adequacy of class counsel under

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Rule 23(g)(1)(A).

E.g., Delre v. Perry, 288 F.R.D. 241, 247 (E.D.N.Y. 2012).

These considerations include:
(1)

the work counsel has done in identifying or investigating potential
claims in the action;

(2)

counsel’s experience in handling class actions, other complex litigation,
and the types of claims asserted in the action;

(3)

counsel’s knowledge of the applicable law; and

(4)

the resources that counsel will commit to representing the class.

Fed. R. Civ. P. 23(g)(1)(A).

The court also “may consider any other matter

pertinent to counsel’s ability to fairly and adequately represent the interests of the
class.” Fed. R. Civ. P. 23(g)(1)(B). While not statutorily required, the appointment
of interim class counsel may be helpful in “clarify[ing] responsibility for protecting
the interests of the class during precertification activities, such as making and
responding to motions, conducting any necessary discovery, moving for class
certification, and negotiating settlement.”

Federal Judicial Center, Manual for

Complex Litigation § 211.11 (4th ed. 2004).
Defendant Arch Coal makes the unremarkable observation that the Court
must undertake an independent analysis of whether the requirements of Rule 23(g)
are met before appointing interim class counsel.

However, Arch Coal makes no

argument as to why the plaintiffs’ proposed counsel do not satisfy the requirements
of Rule 23(g)(1)(A).

On review of the plaintiffs’ moving papers and attached

exhibits [Docs. ## 7–10, 27], the Court finds that plaintiffs have demonstrated that
their respective counsel will fairly and adequately represent the interests of the
proposed class because they: (1) have adequately identified and demonstrated a
commitment to investigating the potential claims in this action; (2) possess

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experience in handling class actions involving the types of claims asserted in this
action; (3) have knowledge of the applicable law; and (4) will devote the resources
necessary to represent the proposed class.

See Fed. R. Civ. P. 23(g)(1)(A).

Accordingly, the Court will appoint Kessler Topaz Meltzer & Check, LLP and Stull,
Stull & Brody as interim co-lead class counsel, and Blitz, Bardgett & Deutsch, LC as
interim liaison class counsel of the consolidated action.
Defendant Arch Coal objects to the appointment of interim class counsel as
unnecessary and improper, arguing that no other counsel currently is competing for
appointment.

Plaintiffs contend that their counsel would be competing for

appointment as interim lead counsel but for having amicably resolved to work
together to avoid any unnecessary delay in litigating the pending actions.
Moreover, plaintiffs assert that other law firms are investigating whether to file suit
against Arch Coal for violations of ERISA and thus constitute potential competition
for lead counsel.

The Court agrees with plaintiffs and finds that the now

consolidated action would benefit from designated interim class counsel for efficient
case management.

See, e.g., Delre, 288 F.R.D. at 247 (“[I]n cases . . . where

multiple overlapping and duplicative class actions have been transferred to a single
district for the coordination of pretrial proceedings, designation of interim class
counsel is encouraged, and indeed is probably essential for efficient case
management.”) (internal quotation omitted); Szymczak v. Nissan N. Am., Inc., Nos.
10-CV-7493 (VB), et al., 2012 WL 1877306, at *2 (S.D.N.Y. May 15, 2012)
(overruling defendants’ objection to the appointment of interim lead counsel as
unnecessary and premature to ensure the consolidated cases “are administered

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efficiently, the claims of named plaintiffs and the putative class members are
properly prosecuted, and redundant work is minimized”).
Accordingly,
IT IS HEREBY ORDERED that plaintiffs’ motion to consolidate the actions
and appoint interim class counsel [Doc. #7] is granted.
IT IS FURTHER ORDERED that the plaintiffs’ request for an oral argument
on their motion for consolidation and appointment of interim class counsel [Doc.
#27] is denied as moot.
IT IS FURTHER ORDERED that Elmer Bush v. Arch Coal, Inc., et al., 4:15CV-1026 (SNLJ) is consolidated with Douglas R. Roe v. Arch Coal, Inc., et al., 4:15CV-910 (CEJ).
IT IS FURTHER ORDERED that henceforth all pleadings and other
documents in this matter shall be filed in Douglas R. Roe v. Arch Coal, Inc., et al.,
4:15-CV-910 (CEJ).

See E.D.Mo. L.R. 4.03 (“[T]he consolidated cases shall be

reassigned to the judge presiding in the lowest-numbered case.

Following

consolidation, all documents shall be filed only in the lowest-numbered case . . . .”).
IT IS FURTHER ORDERED that the firms of Kessler Topaz Meltzer & Check,
LLP and Stull, Stull & Brody are appointed as interim co-lead counsel, and the firm
of Blitz, Bardgett & Deutsch, LC is appointed as interim liaison counsel.
IT IS FURTHER ORDERED that interim co-lead class counsel shall have the
authority over the following matters on behalf of all plaintiffs in the consolidated
action: (1) initiating, responding to, scheduling, briefing and arguing all motions;
(2) determining the scope, order and conduct of all discovery proceedings; (3)
assigning such work assignments to other counsel as they may deem appropriate;

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(4) retaining experts; (5) designating which attorneys may appear at hearings and
conferences

with

the

Court;

(6)

conducting

settlement

negotiations

with

defendants; and (7) all other matters concerning the prosecution or resolution of
the ERISA actions.

Additionally, interim co-lead class counsel shall have the

authority to communicate with defense counsel and the Court on behalf of all
plaintiffs and the proposed class.

Defense counsel may rely on all agreements

made with interim co-lead class counsel, and such agreements shall be binding.
Interim liaison class counsel is charged with administrative matters, such as
facilitating necessary communications between the Court and all counsel.
IT IS FURTHER ORDERED that defendants shall produce documents or
information within ten (10) days of the entry of this Order sufficient to enable
plaintiffs to accurately identify the specific persons who serve as the Arch Coal, Inc.
Employee Thrift Plan fiduciaries, including but not limited to: Plan documents and
materials that describe the operation, administration, and management of the Plan;
and documents that identify the Plan fiduciaries and describe the scope of their
fiduciary duties (the “core ERISA documents”).
IT IS FURTHER ORDERED that plaintiffs shall file a consolidated complaint
no later than thirty (30) days after the production of the core ERISA documents.
Each defendant shall file an answer or other responsive pleading to the consolidated
amended complaint no later than sixty (60) days after its filing.

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IT IS FURTHER ORDERED that plaintiffs shall have forty-five (45) days
to file a response to any dispositive motions defendants direct at the consolidated
complaint. Defendants shall have thirty (30) days to file any reply.

____________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE

Dated this 2nd day of November, 2015.

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