Internet service provider CenturyLink has filed a memorandum in opposition to plaintiff stockholders Benjamin Craig, et al.’s motion for class certification and appointment of class representatives and class counsel. The suit is filed in the Minnesota District Court.
CenturyLink customers and state attorneys general alleged that CenturyLink engaged in “unfair and fraudulent” business practices, such as charging a higher price than agreed upon, signing customer up for accounts and or services they did not request, and not removing or crediting accounts when asked. Plaintiffs have also stated that when they tried to change or cancel their account, they were charged large overcharge fees. CenturyLink supposedly lied about its growth and business practices; the plaintiffs allege that its growth was due to “cramming.”
CenturyLink argues that the plaintiffs’ motion for class certification should be denied because “Plaintiffs have not met their burden of establishing that reliance and damages can be proven on a class-wide basis.” CenturyLink claims that “Plaintiffs’ damages model is not connected to their liability case.” They also argue that the motion should be denied because “Oregon is an atypical and inadequate class representative; it is subject to unique defenses rarely present in securities litigation that will consume fact discovery and the trial of this case.” Further, CenturyLink argues that Plaintiffs have not satisfied Rule 23(b)(3) of the Federal Rules of Civil Procedure because “individual questions of reliance overwhelm questions common to the class.” Defendants note that the stockholders’ argument rests on the “fraud-on-the-market” presumption; alleging misrepresentations on 55 dates, which affected common stock price and Senior Notes. However, CenturyLink argues that, for example, on only four of the alleged dates did stock significantly increase.
CenturyLink also argues that regardless of class certification, the class period should end on June 16, 2017, instead of July 12, 2017. This is because “any alleged misrepresentations and omissions were corrected and any presumption of class-wide reliance collapsed – on that date.” However, the stockholders argued that CenturyLink investors learned about the misleading business scheme because of three disclosures, the last of which occurred on July 12, 2017.
