IN RE WELLS FARGO & COMPANY HIRING PRACTICES DERIVATIVE LITIGATION
- 3:22-cv-05173
- U.S. District Court · Northern District of California
- 10
In In re Wells Fargo & Company Hiring Practices Derivative Litigation, the court allowed intervention and further motions, denied a stay, and related cases.
Amy Cook was allowed to intervene but was denied a stay. Asbestos Workers Philadelphia Welfare and Pension Fund and Jose F. Isais were allowed to file motions seeking consolidation and reconsideration. The existing derivative plaintiffs, defendants, and counsel were affected by the related-case designation, future briefing, lead-counsel schedule, and denial of pending motions as moot without prejudice.
What happened
In In re Wells Fargo & Company Hiring Practices Derivative Litigation, shareholder Amy Cook sought to join the derivative lawsuit and pause it, while Asbestos Workers Philadelphia Welfare and Pension Fund and Jose F. Isais sought permission to ask for consolidation and reconsideration. The case concerns alleged hiring practices at Wells Fargo.
The court granted Cook permission to intervene, but denied her request to stay the case. The court also granted Asbestos’s request for permission to file motions seeking consolidation and reconsideration; it did not decide those motions themselves. The court related Asbestos’s case to the existing Wells Fargo case.
The court also denied pending motions as moot without prejudice because an amended pleading might be filed after lead counsel is appointed. The order was signed by a judge whose name is not clearly readable in the provided text.
The detailed version
- IN RE WELLS FARGO & COMPANY HIRING PRACTICES DERIVATIVE LITIGATION · No. 3:22-cv-05173
- July 13, 2023
Background
The litigation concerns allegations that Wells Fargo conducted fake interviews despite a publicly stated diversity-hiring policy. Hugues Gervat and Charles Rogers filed shareholder derivative actions against Wells Fargo officers. The actions were consolidated, and The Brown Law Firm, P.C. and The Rosen Law Firm, P.A. were designated co-lead counsel.
Amy Cook moved to intervene and to stay the action for 60 days so she could complete an inspection of Wells Fargo’s books and records. The City of Pontiac Reestablished General Employees’ Retirement System and the City of Plantation Police Officers’ Retirement Fund joined Cook’s motion. Asbestos Workers Philadelphia Welfare and Pension Fund and Jose F. Isais filed another shareholder derivative action against largely the same defendants and sought permission to file motions to consolidate the actions and reconsider the earlier order appointing co-lead counsel.
Cook’s Motion to Intervene
The court held that Cook did not qualify to intervene as of right because she had not shown that the existing plaintiffs’ representation of her interests might be inadequate. The court found that the other requirements—timeliness, a significant protectable interest, and possible impairment of her ability to protect that interest—were satisfied. But because Cook sought the same overall result as the existing plaintiffs, the court applied a presumption that their representation was adequate. The court found that Cook’s books-and-records inspection and potential pleading differences showed only a difference in strategy and did not make the required compelling showing of inadequate representation.
The court nevertheless granted Cook permissive intervention. It found that she satisfied the threshold requirements because she sought to assert the same legal claims based on the same facts, her request was timely, and she asserted an independent basis for federal jurisdiction as a Wells Fargo shareholder who held stock during the relevant period. The court also found that intervention could avoid duplicative litigation and allow it to consider issues concerning possible lead counsel and information from Cook’s books-and-records inspection. The court found Cook’s failure to submit a separate pleading was a technical defect that did not require denial of intervention.
Motion to Stay
The court denied Cook’s request to stay the action. It stated that a stay could require changes to the case schedule, which it preferred to maintain, and concluded that the request was moot because more than 60 days had passed since Cook filed it.
Asbestos’s Motion for Leave
The court found that Asbestos’s action involved substantially the same parties, property, transaction, or event as the existing case and that many claims overlapped, including claims involving Section 14(a) of the Securities Exchange Act, breach of fiduciary duty, corporate waste, and unjust enrichment. The court therefore related the actions.
The court granted Asbestos leave to file a motion to consolidate because further briefing would help determine whether consolidation was necessary. The court also granted leave to file a motion for reconsideration concerning the earlier appointment of The Brown Law Firm, P.C. and The Rosen Law Firm, P.A. as co-lead counsel. These rulings granted permission to file the motions; they did not grant consolidation or reconsideration.
Disposition and Schedule
The court granted Cook’s motion to intervene and denied her motion to stay. It granted Asbestos’s motion for leave to file motions to consolidate and for reconsideration. Asbestos was ordered to file its consolidation motion separately by July 25, 2023. The court set deadlines for motions concerning appointment of lead counsel and scheduled a hearing for January 9, 2024.
Because an amended pleading might be filed after lead counsel was appointed, the court denied pending motions in the lead and related cases as moot without prejudice. The court also ordered that Case No. 23-cv-01168-TLT was related to Case No. 22-cv-05173-TLT and terminated the listed docket entries. The order was signed by a judge whose name is not clearly readable in the provided text.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.