Cooley Helps CenturyLink Secure Dismissal of Securities Class Actions
Washington, DC – April 30, 2015 – The Western District of Louisiana has dismissed, with prejudice, two consolidated shareholder class actions alleging securities fraud against CenturyLink, Inc. and several of its officers.
Headquartered in Monroe, Louisiana, CenturyLink is the third largest communications company in the United States. In February 2013, the Company announced a new capital allocation strategy. Rather than continuing to pay the same dividend as it had in 2012, CenturyLink decided to cut its dividend by 25% and engage in a nearly $2 billion stock repurchase program. CenturyLink's stock price declined on this news, and two class actions were brought in the Southern District of New York. The suits alleged that CenturyLink knew long before February 2013 that the company's dividend would be reduced, but elected to mislead investors into thinking the amount of the dividend would remain constant or even increase.
After successfully moving to transfer both actions from the Southern District of New York to the Western District of Louisiana, Cooley filed a motion to dismiss the actions in June 2014. Cooley argued, among other things, that plaintiffs had not pleaded facts establishing that CenturyLink intended to mislead investors about the reduction in its dividend. Cooley argued that based on the plaintiffs' own allegations, as well as public documents of which the Court could take judicial notice, the most compelling inference was that CenturyLink did not consider reducing its dividend until early 2013.
On February 3, 2015, Magistrate Judge James D. Kirk issued a report that accepted Cooley's argument that the plaintiffs had not adequately pleaded fraudulent intent. He recommended that CenturyLink's motion be granted, and all of the claims in the complaint be dismissed with prejudice. On April 21, 2015, Judge Robert G. James adopted the Magistrate's report and recommendation and dismissed the complaint in its entirety with prejudice. In denying plaintiffs leave to amend, Judge James noted that the plaintiffs "do not explain or identify what allegations they could add to support their claims."
The Washington, DC-based Cooley team was led by securities litigation partner Lyle Roberts and included special counsel George Anhang, and associates Kyle Reynolds, Mike Herring, and Matt Ezer.
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