Dahl et al v. Bain Capital Partners, LLC et al

MEMORANDUM in Support re Assented to MOTION to Consolidate Cases 07-12388 and 08-10254

D. Mass.April 24, 2008

IN THE UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS _______________________________________ JAMES D. KLEIN, RUFUS ORR and ROBERT ZIMMERMAN, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. BAIN CAPITAL PARTNERS, LLC, THE BLACKSTONE GROUP L.P., THE CARLYLE GROUP, THE GOLDMAN SACHS GROUP, INC., GS CAPITAL PARTNERS, L.P., JP MORGAN CHASE & CO., JP MORGAN PARTNERS, LLC, KOHLBERG KRAVIS ROBERTS & COMPANY, L.P., MERRILL LYNCH & CO., INC., MERRILL LYNCH GLOBAL PARTNERS, INC., PERMIRA ADVISORS LLC, PROVIDENCE EQUITY PARTNERS, INC., SILVER LAKE PARTNERS, TPG CAPITAL, L.P., THOMAS H. LEE PARTNERS, L.P. and WARBURG PINCUS LLC, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:07-cv-12388 (EFH) _______________________________________ KIRK DAHL, HELMUT GOEPPINGER, and JOEL GERBER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. BAIN CAPITAL PARTNERS, LLC, THE BLACKSTONE GROUP L.P., THE CARLYLE GROUP, GOLDMAN SACHS GROUP, INC., GS CAPITAL PARTNERS, JP MORGAN CHASE & CO., JP MORGAN PARTNERS, LLC, KOHLBERG KRAVIS ROBERTS & COMPANY, L.P., MERRILL LYNCH & CO., INC., MERRILL LYNCH GLOBAL PARTNERS, INC., PERMIRA ADVISORS LLC, PROVIDENCE EQUITY PARTNERS, INC., SILVER LAKE PARTNERS, TPG CAPITAL, L.P., THOMAS H. LEE ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:08-cv-10254-EFH Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 1 of 9 PARTNERS, L.P. and WARBURG PINCUS LLC, Defendants. _______________________________________ ) ) ) ) ) PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION TO CONSOLIDATE I. INTRODUCTION Plaintiffs Kirk Dahl, Helmut Goeppinger, Joel Gerber, James D. Klein, Rufus Orr, and Robert Zimmerman (collectively, “Movants” or “Plaintiffs”) respectfully move under Rule 42(a) of the Federal Rules of Civil Procedure for an order consolidating for discovery and trial the action captioned Klein et al. v. Bain Capital Partners, LLC et al., 1:07-cv-12388-EFH (the “Klein Case”) with the virtually identical action captioned Dahl et al. v. Bain Capital Partners, LLC et al., 1:08-cv-10254-EFH (the “Dahl Case”). Plaintiffs make virtually identical factual allegations against the same Defendants1 regarding the Defendants’ and their co-conspirators’ concerted efforts to dominate and control the largest LBOs in the country and to fix the buyout prices for target companies at artificially low levels. The disposition of each claim will therefore turn on the adjudication of the same or similar issues and the same or similarly alleged conduct. Accordingly, the actions at issue satisfy the prerequisites for consolidation as: (1) they involve common issues of fact or law; (2) consolidation will clearly result in a more 1 Specifically, the named Defendants are: Bain Capital Partners, LLC, The Carlyle Group, The Goldman Sachs Group, Inc., GS Capital Partners, L.P., JP Morgan Chase & Co., JP Morgan Partners, LLC, Kohlberg Kravis Roberts & Company, L.P., Merrill Lynch & Co., Inc., Merrill Lynch Global Partners, Inc., Permira Advisors, LLC, Providence Equity Partners, Inc., Silver Lake Partners, TPG Capital, L.P., Thomas H. Lee Partners, L.P. and Warburg Pincus, LLC. Technical changes to the names of certain defendants were made because counsel for the parties conferred as to the names of certain defendants. 2 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 2 of 9 efficient process for this Court, counsel, and the witnesses who will be called upon to testify at deposition and trial; and (3) no prejudice will result. II. ARGUMENT A. These Actions Are Appropriate for Consolidation Pursuant to Rule 42(a) The law surrounding Rule 42(a) in the First Circuit is particularly clear. Rule 42(a) allows for consolidation when actions involve “a common question of law or fact” which is to be determined by the Court. Once the Court has made this determination, it has “broad discretion in weighing the costs and benefits of consolidation to decide whether that procedure is appropriate.” Seguro de Servicio de Salud de Puerto Rico v. McAuto Systems Group, Inc., 878 F.2d 5, 8 (1st Cir. 1989). Furthermore, if the Court determines that these two conditions have been met, the motion to consolidate ordinarily will be granted unless the opposing party shows “demonstrable prejudice.” Id. (citations omitted). As set forth herein, the pending cases clearly meet these criteria and should be consolidated. 1. The Actions Involve One or More Common Questions of Fact The only requirement set out in Rule 42(a) for consolidation is that the cases involve “a common question of law or fact.” This is plainly met here. The Klein Case and the Dahl Case both assert the same factual pattern: Defendants and their co- conspirators, via bid-rigging and market-allocation cartels, have conspired to dominate and control the largest LBOs in the United States and to fix the buyout prices for target companies at artificially low levels, thereby harming Plaintiff shareholders. Both cases likewise assert that the actions of the Defendants violate federal antitrust laws. Therefore, the two cases center around the same scheme with nearly identical facts. 3 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 3 of 9 Courts routinely consolidate cases when this occurs. For example, in Cruickshank v. Clean Seas Co., 402 F. Supp. 2d 328 (D. Mass. 2005), this Court consolidated two cases which involved “nearly identical facts” and held that both lawsuits arose out of the same allegedly defective product, and contained overlapping legal claims. So, too, here, the cases revolve around the same anticompetitive and illegal scheme perpetrated by the same defendants in violation of overlapping federal antitrust laws. As in Cruickshank, these cases should be consolidated pursuant to Rule 42(a). 2. Consolidation Will Further the Convenience of the Parties and Witnesses. The only other factor for a Court in considering consolidation is to weigh the costs and benefits of consolidation and decide whether consolidation is appropriate. In this case, consolidation is highly appropriate as there are virtually no costs in consolidation but substantial benefits. For example, Movants anticipate that the plaintiffs in each action will seek to depose many of the same individuals from the various Defendants and the production of substantially the same documents. Without consolidation, there will be duplicative discovery demands and the possibility of inconsistent adjudication on a number of issues, including class certification. Consolidation will solve this problem by enabling a single judge with all the parties present to formulate a pretrial plan that will minimize witness inconvenience and overall expense for all parties. Obviously, the savings in time and expense that will result from consolidation will benefit the Plaintiffs as well as the Defendants. 3. Consolidation Will Not Prejudice the Defendants Because these cases have satisfied the above factors for consolidation, they should be consolidated as there will be absolutely no prejudice to the Defendants. Furthermore, if 4 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 4 of 9 the cases are not consolidated, the Court will be required to make legal and factual determinations inherent to antitrust class actions in each individual case, creating the acute danger of conflicting pretrial rulings and disparate treatment of the purported nationwide classes. Each action presents issues (such as when the Defendants contracted, combined or conspired to divide up the market for LBOs) that, if subject to inconsistent rulings, would only serve to prejudice Plaintiffs. The two cases before this Court therefore have similar (if not identical) fact patterns and common questions of law and fact. Plaintiffs submit that the Court would benefit from having a single judge oversee one consolidated case to avoid duplicative efforts and inconsistent rulings. This is in keeping with Rule 42(a). III. CONCLUSION For the foregoing reasons, Movants respectfully request that the Court enter an order consolidating the Klein Case and the Dahl Case for discovery and trial and that the consolidated action bear the caption In re Private Equity LBO Antitrust Litigation and the case number of the Klein Case – 1:07-cv-12388-EFH. DATED: April ___, 2008 Respectfully submitted, ROBINS, KAPLAN, MILLER & CIRESI LLP s/ Meghan E. Walt Meghan E. Walt (BBO #658971) 800 Boylston Street, 25th Floor Boston, MA 02199 (617) 267-2300 5 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 5 of 9 K. Craig Wildfang (Admitted pro hac vice) Thomas B. Hatch (Pro hac vice Admission Pending) Stacey P. Slaughter (Admitted pro hac vice) ROBINS, KAPLAN, MILLER & CIRESI LLP 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402-2015 (612) 349-8500 Christopher M. Burke (Admitted pro hac vice) Arthur L. Shingler III (Admitted pro hac vice) Hal Cunningham (Admitted pro hac vice) Kristen M. Anderson (Pro hac vice Admission Pending) SCOTT + SCOTT LLP 600 B Street, Suite 1500 San Diego, CA 92101 (619) 233-4565 David R. Scott (Admitted pro hac vice) SCOTT + SCOTT LLP 108 Norwich Avenue Colchester, CT 06415 (860) 537-3818 Patrick J. Coughlin (Of Counsel) David W. Mitchell (Pro hac vice Admission Pending) Susan G. Taylor (Pro hac vice Admission Pending) Elisabeth A. Bowman (Pro hac vice Admission Pending) Samantha Smith (Pro hac vice Admission Pending) COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 (619) 231-1058 6 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 6 of 9 Jack Landskroner (Admitted pro hac vice) Paul Grieco (Admitted pro hac vice) LANDSKRONER • GRIECO • MADDEN, LTD. 1360 West 9th Street, Suite 200 Cleveland, OH 44113 (216) 522-9000 Brian Robbins (Pro hac vice Admission Pending) George Aguilar (Admitted pro hac vice) ROBBINS UMEDA & FINK, LLP 610 West Ash Street, Suite 1800 San Diego, CA 92101 (619) 525-3990 Richard Lockridge (Admitted pro hac vice) Charles N. Nauen (Admitted pro hac vice) Karen Riebel (Admitted pro hac vice) LOCKRIDGE GRINDAL NAUEN P.L.L.P. Suite 2200 100 Washington Avenue South Minneapolis, MN 55401 (612) 339-6900 Dennis Stewart (Of Counsel) HULETT HARPER STEWART, LLP 550 West C Street, Suite 1600 San Diego, CA 92101 (619) 338-1133 J. Gerard Stranch, IV (Admitted pro hac vice) BRANSTETTER, STRANCH & JENNINGS, PLLC 227 Second Avenue, North – 4th Floor Nashville, TN 37201-1631 (615) 254-8801 Brian Murray (Of Counsel) MURRAY, FRANK & SAILER LLP 275 Madison Avenue, 8th floor New York, NY 10016 (212) 682-1818 7 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 7 of 9 Mark Reinhardt (Of Counsel) REINHARDT WENDORF & BLANCHFIELD P.O. Box 460 2201 Atlantic Avenue Sullivan’s Island, SC 29482 (651) 287-2100 Nadeem Faruqi (Of Counsel) FARUQI & FARUQI, LLP 369 Lexington Avenue, 10th Floor New York, NY 10017 (212) 983-9330 Attorneys for Plaintiffs 8 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 8 of 9 CERTIFICATE OF SERVICE I hereby certify that on April 24, 2008, a copy of the foregoing Memorandum of Law in Support of Motion for Consolidation was filed electronically and served by mail on anyone unable to accept electronic filing. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system or by mail to anyone unable to accept electronic filing as indicated on the Notice of Electronic Filing. Parties may access this filing through the Court’s CM/ECF System. s/ Meghan E. Walt MEGHAN E. WALT ROBINS, KAPLAN, MILLER & CIRESI LLP 800 Boylston Street, 25th Floor Boston, MA 02199 (617) 267-2300 mewalt@rkmc.com 9 Case 1:08-cv-10254-EFH Document 67 Filed 04/24/08 Page 9 of 9