December 9, 2004
Nelson Phelps, President and Executive Director
ASSOCIATION OF U S WEST RETIREES
AUSWR Board Members and General members
This is an update concerning the many securities lawsuits
pending against Qwest. As you know from reading my prior reports, there
are two primary groups of securities cases pending - federal court cases
and state court cases. All federal case have been consolidated into
Denver Federal Court and are assigned to Federal Judge Robert E.
Blackburn and Magistrate Judge Craig B. Shaffer. The state court cases,
namely lawsuits by CalSTRS, the State of Illinois, the State of New
Jersey and Louisiana Teachers, are pending in different state courts.
In my report sent March 5, 2004, I included a copy of the 5th
Amended Consolidated Complaint filed on February 6, 2004, by the team of
securities lawyers suing Qwest and former officers and directors in the
federal shareholders lawsuits pending in Denver Federal Court. The
filing of that new complaint resulted in the defendants filing another
round of "motions to dismiss." No discovery is allowed to be conducted
in federal securities cases while motions to dismiss are pending.
On November 30, 2004, Federal Judge Blackburn issued his order
ruling on the motion to dismiss filed since March. I have attached
hereto in Adobe PDF file format a copy of his 24 page order. While
Judge Blackburn dismissed some of the claims first asserted in the March
filing, and ruled he would not allow additional defendants, he did not
dismiss the primary case pending against Qwest, former officers and
directors, and Arthur Andersen.
Now, since there are no more pending "motions to dismiss," the
litigants can conduct formal discovery, including all important
Today, Magistrate Judge Shaffer held a scheduling conference for
over two hours for the purpose of working out a coordinated plan to be
used by all the many attorneys in the dozen or so federal court
cases. There were more than 25 attorneys personally present for today's
court conference and several dozen more attorneys were listening in by
The defendants were ordered to file "Answers" to the 5th
Consolidated Amended Complaint no later than January 14, 2005. It
remains to be seen whether any of the named defendants will file
cross-claims against each other.
Although most of the federal court cases have been pending for
three full years, there have not been any depositions taken thus far.
In other words, none of the defendants, including former CEO Joseph
Nacchio, have had to answer the Plaintiffs' questions under oath.
Since discovery depositions can, now, go forward, Magistrate
Judge Shaffer established the following rules, among other parameters:
Plaintiff side can take 80 depositions starting on February 21, 2005,
and ending August 31, 2005, a four month period. The depositions must
either take place in Denver, the deponent's place of business or the
deponent's residence. All litigants in any of the coordinated cases can
appear with their counsel and participate, unless the deponent can show
grounds for a protective order. No deposition can last more than 7
hours, absent some showing of good cause. For example, former CEO
Joseph Nacchio cannot be questioned more than 7 hours. Therefore, the
many attorneys are going to have to work together, carefully plan their
questions and exhibits, and use the limited time wisely.
At one point during today's court proceeding, Magistrate Judge
Shaffer stated: "I'll be shocked if any of these cases ever go to
trial. I will fall down in stunned amazement if any of these cases ever
go to trial." It is true that very few securities cases ever go to
trial, as they are settled far in advance of the trial date.
During today's court proceeding, none of the attorneys or
litigants said anything about the progress of the ongoing settlement
Curtis L. Kennedy
8405 E. Princeton Ave.
Denver, CO 80237-1741
Please note that all PDF-formatted documents, such as the
attached document, require Adobe Reader for viewing. In order to view
the attachment, you must have Adobe Reader Version 6.0. You can obtain a
free download at: