Laborers Local 235 Benefit Funds v. Stiller et al

Filing 17

MEMORANDUM OPINION AND ORDER: The Clerk shall consolidate the following cases under heading "In Re: Green Mountain Coffee Roasters, Inc. Derivative Litigation" at docket number 2:10-cv-233; Himmel v. Stiller, Case No. 2:10-cv-233, Sm ith v. Blanford, Case No. 2:10-cv-253, Musa Family Revocable Trust v. Stiller, Case No. 2:12-cv-29, and Laborers Local 235 Benefit Funds v. Stiller, Case No. 2:12-cv-42; Horowitz v. Green Mountain Coffee Roasters, Inc., Case No., 2:10-cv-227, shall not be consolidated with the Consolidated Derivative Suit. Signed by Judge William K. Sessions III on 4/27/2012. (law)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
IN RE GREEN MOUNTAIN COFFEE
ROASTERS, INC. DERIVATIVE
LITIGATION

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Case Nos. 2:10-cv-233
2:10-cv-253
2:10-cv-227
2:12-cv-29
2:12-cv-42

Memorandum Opinion & Order
Motions for Consolidation
In September 2010, Green Mountain Coffee Roasters, Inc.
(“GMCR” or the “Company”), admitted that it had misstated its
earnings.

In the wake of that announcement, two parties filed

shareholder derivative actions in this Court listing GMCR as the
nominal defendant.

Himmel v. Stiller, Case No. 2:10-cv-233;

Smith v. Blanford, Case No. 2:10-cv-253.

On November 29, 2010,

the Court granted Himmel and Smith’s joint motion to consolidate
their suits and appoint Robbins Umeda LLP and the Shuman Law
Firm as co-lead counsel, and Langrock Sperry & Wool, LLP as
liaison counsel.

ECF Nos. 8, 15.

The resulting consolidated

action (the “Consolidated Derivative Suit”) has been stayed
pending resolution of motions to dismiss in a related securities
fraud lawsuit, Horowitz v. Green Mountain Coffee Roasters, Inc.,
Case No. 2:10-cv-227.
In February and March 2012, two additional shareholder
derivative suits were filed against nominal defendant GMCR, Musa

Family Revocable Trust v. Stiller, 2:12-cv-29, and Laborers
Local 235 Benefit Funds v. Stiller, 2:12-cv-42.

The

Consolidated Derivative Suit plaintiffs now move to consolidate
those suits under the Consolidated Derivative Suit’s heading and
lead counsel structure.1

Musa Family Revocable Trust moved to

intervene in the Consolidated Derivative Suit to object to
consolidation.

Mot. to Intervene, 2:12-cv-29, ECF No. 4.

Neither Laborers Local 235 Benefit Funds nor Defendants have
responded to contest the motions.
Under Federal Rule of Civil Procedure 42(a), “[i]f actions
before the court involve a common question of law or fact, the
court may: (1) join for hearing or trial any or all matters at
issue in the actions; (2) consolidate the actions; or (3) issue
any other orders to avoid unnecessary cost or delay.”

As the

Rule’s language suggests, the Court possesses wide discretion in
determining whether to consolidate related cases.

Johnson v.

Celotex Corp., 899 F.2d 1281, 1284-85 (2d Cir. 1990).

The Court

“should consider both equity and judicial economy,” bearing in
mind that “efficiency cannot be permitted to prevail at the

1

The motions to consolidate were filed in the Horowitz
docket, 2:10-cv-227, as ECF Nos. 61, 63. The motion pertaining
to Musa was also cross-filed in the Musa docket, 2:12-cv-29, as
ECF No. 3. As this order makes clear below, all subsequent
filings in the Consolidated Derivative Suit should be lodged at
2:10-cv-233.
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expense of justice.”

Devlin v. Transp. Commc’ns Int’l Union,

175 F.3d 121, 130 (2d Cir. 1999).

Consolidation is particularly

important in shareholder derivative litigation, where
stockholders sue on behalf of the corporation they own, not in
their own right.
Cir. 1958).

MacAlister v. Guterma, 263 F.2d 65, 68 (2d

In allowing derivative suits to proliferate

uncoordinated, “[t]he cost of defending these multiple actions
may well do serious harm to the very corporation in whose
interest they are supposedly brought.”

Id.

Here, all plaintiffs proceed on nearly identical causes of
action.

While the complaints concern different time periods,

there is a “common pattern” to the factual allegations.

Kaplan

v. Gelfond, 240 F.R.D. 88, 92 (S.D.N.Y. 2007), reconsidered on
other grounds sub nom. by In re IMAX Sec. Litig., No. 06 Civ.
6128 (NRB), 2009 WL 1905033 (S.D.N.Y. June 29, 2009).

All focus

on efforts by GMCR’s officers and directors to conceal flaws in
the Company’s balance sheet to the personal gain of insiders and
to the ultimate detriment of the Company’s stock.

To the extent

they differ, it is due in large part to the stay that has frozen
the proceedings in the Consolidated Derivative Suit.

Once the

stay is lifted, the Consolidated Derivative Suit plaintiffs
indicate that they will file an amended, consolidated complaint.
Reply Br. in Supp. of Mot. for Consolidation 13, 2:12-cv-29, ECF
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No. 6.

The Court “note[s] that that the filing of a

consolidated complaint” permits the parties to “resolve
remaining issues concerning the differing class periods.”
Kaplan, 240 F.R.D. at 92.

Since the suits’ legal claims and

facts are fundamentally similar, the Court finds these cases
warrant consolidation.
In light of the foregoing, the Court hereby orders as
follows:


The motions to consolidate are granted (2:10-cv-227, ECF
Nos. 61, 63; 2:12-cv-29, ECF No. 3);



Musa Family Revocable Trust’s motion to intervene (2:12cv-29, ECF No. 4) is denied as moot;



The Clerk shall consolidate the following cases under the
heading “In re Green Mountain Coffee Roasters, Inc.
Derivative Litigation,” at docket number 2:10-cv-233:
Himmel v. Stiller, Case No. 2:10-cv-233, Smith v.
Blanford, Case No. 2:10-cv-253, Musa Family Revocable
Trust v. Stiller, Case No. 2:12-cv-29, and Laborers Local
235 Benefit Funds v. Stiller, Case No. 2:12-cv-42;



Horowitz v. Green Mountain Coffee Roasters, Inc., Case
No., 2:10-cv-227, shall not be consolidated with the
Consolidated Derivative Suit.

It is so ordered.
Dated at Burlington, in the District of Vermont, this 27th
day of April, 2012.
/s/William K. Sessions III
William K. Sessions III
U.S. District Court Judge
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