Pacific Funds et al v. Petroleo Brasileiro S.A. et al

Filing 13

ORDER DENYING TRANSFER re: pldg. ( 3 in MDL No. 2728), ( 5 in MDL No. 2728, 3 in NYS/1:16-cv-02013, 3 in NYS/1:16-cv-02686, 3 in P AE/2:15-cv-06283), ( 1 in MDL No. 2728) The motion to transfer, pursuant to 28 U.S.C. 1407, is DENIEDSigned by Judge Sarah S. Vance, Chair, PANEL ON MULTIDISTRICT LITIGATION, on 8/5/2016. Associated Cases: MDL No. 2728, NYS/1:16-cv-02013, NYS/1:16-cv-02686, PAE/2:15-cv-06283 (TB)

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: PETROBRAS SECURITIES LITIGATION

MDL No. 2728

ORDER DENYING TRANSFER

Before the Panel:* Defendants Petróleo Brasileiro S.A.–Petrobras, Petrobras Global Finance
B.V., and Petrobras International Finance Company S.A. (collectively, Petrobras) move under 28
U.S.C. § 1407 to centralize pretrial proceedings in this litigation in the Southern District of New
York. This litigation consists of three actions, one pending in the Eastern District of Pennsylvania
and two in the Southern District of New York, as listed on Schedule A. In addition to these three
actions, there are currently twenty-six related actions pending in the Southern District of New York
in a consolidated or coordinated manner under the caption, In re Petrobras Securities Litigation
before the Honorable Jed S. Rakoff (the Coordinated Actions).
Defendant PricewaterhouseCoopers Auditores Independentes (PwC Brazil) supports the
motion for centralization in the Southern District of New York. Plaintiffs in the Eastern District of
Pennsylvania action and one of the New York actions, in contrast, oppose centralization.1
On the basis of the papers filed and hearing session held, we conclude that centralization will
not serve the convenience of the parties and witnesses or further the just and efficient conduct of this
litigation. Undoubtedly, these actions share factual questions arising from allegations that Petrobras,
certain of its officers and directors, and other defendants, such as PwC Brazil, made false and/or
misleading statements or omissions with respect to a massive bid-rigging and kickback scheme and
its effect on Petrobras’s financial condition. But where only a minimal number of actions are
involved, the proponent of centralization bears a heavier burden to demonstrate that centralization
is appropriate. See In re Transocean Ltd. Sec. Litig. (No. II), 753 F. Supp. 2d 1373, 1374 (J.P.M.L.
2010). Petrobras has not met that burden here.
Contrary to Petrobras’ arguments, the two actions pending in the Southern District of New
*

Judges Marjorie O. Rendell and Ellen Segal Huvelle took no part in the decision of this

matter.
1

Plaintiffs in the other New York action did not respond to the motion, but filed a notice of
waiver of oral argument in which they indicate support for centralization in the Southern District of
New York.

-2York cannot be considered in isolation from the Coordinated Actions proceeding before Judge
Rakoff. The two New York actions have been related to the Coordinated Actions, assigned to Judge
Rakoff, and stayed pending an upcoming trial of common issues in the Coordinated Actions.
Effectively, there are only two actions here—the Coordinated Actions in the Southern District of
New York and the individual action pending in the Eastern District of Pennsylvania. The New York
litigation is significantly advanced—common discovery is complete, summary judgment motions
are pending, and the aforementioned trial is scheduled to begin in September 2016. As a result of
this procedural disparity, the potential for realizing efficiency and convenience benefits from
centralization is greatly reduced. This is particularly true since the Pennsylvania action is brought
on an individual basis, and thus poses no risk of inconsistent pretrial rulings with respect to class
certification.
We are convinced that alternatives to transfer—in particular, voluntary cooperation and
coordination among the parties and the involved courts—are both feasible and preferable to
centralization in this instance. Plaintiffs in the Pennsylvania action represented in their papers and
at oral argument that they do not intend to duplicate the common discovery already completed in
New York. The geographical proximity of the two actions also will facilitate coordination, as will
the presence of common defense counsel in both actions. We encourage the parties to employ such
alternatives to transfer, which will minimize any potential for duplicative discovery and inconsistent
pretrial rulings. See, e.g., In re Eli Lilly & Co. (Cephalexin Monohydrate) Patent Litig., 446 F. Supp.
242, 244 (J.P.M.L. 1978); see also Manual for Complex Litigation, Fourth, § 20.14 (2004).
IT IS THEREFORE ORDERED that the motion for centralization of these actions is denied.

PANEL ON MULTIDISTRICT LITIGATION

__________________________________________
Sarah S. Vance
Chair
Charles R. Breyer
R. David Proctor

Lewis A. Kaplan
Catherine D. Perry

IN RE: PETROBRAS SECURITIES LITIGATION

MDL No. 2728

SCHEDULE A
Southern District of New York
PACIFIC FUNDS, ET AL. v. PETROLEO BRASILEIRO S.A., ET AL.,
C.A. No. 1:16-02013
ALTAMIMI v. PETROLEO BRASILEIRO S.A.-PETROBRAS, ET AL.,
C.A. No. 1:16-02686
Eastern District of Pennsylvania
VANGUARD INTERNATIONAL EQUITY INDEX FUND, ET AL. v. PETROLEO
BRASILEIRO S.A.-PETROBRAS, ET AL., C.A. No. 2:15-06283