AT&T Seeks to Move Lead-Cables Securities Case to Its Dallas ‘Home Jurisdiction’

AT&T seeks to transfer to U.S. District Court for Northern Texas in Dallas the July 28 securities fraud class action in which it’s alleged to have made “materially false and misleading statements” about its ownership of legacy telecom cables laden with toxic lead (see 2307300002), according to its Nov. 22 motion (docket 2:23-cv-04064) in U.S. District Court for New Jersey in Newark. AT&T is seeking a Dec. 18 hearing on the motion, it said.

The Northern District of Texas is where AT&T is headquartered and all four of the individual defendants, including its current and former CEOs and chief financial officers, reside, said AT&T’s memorandum of law in support of the motion to transfer. Plaintiff John Brazinsky’s class action is “one of multiple suits” filed after a series of Wall Street Journal articles in July alleged public health concerns arising from the telecom industry’s use of lead-clad cables dating to the 1800s, it said.

The claims against AT&T in Brazinsky’s class action “arose in the Northern District of Texas,” said the memorandum. The complaint challenges certain statements in AT&T’s SEC filings and on AT&T’s website about the company’s environmental and safety policies and practices, it said. Those statements “were approved in, and disseminated from, AT&T’s corporate headquarters in Dallas,” it said. “The relevant evidence and witnesses are in Dallas, too,” it said: “All of these undisputed facts favor transfer to the Northern District of Texas.”

The only fact favoring litigation in New Jersey is that Brazinsky, who lives in Colorado, chose to file his complaint in Newark, said the memorandum. But in a putative class action on behalf of a nationwide class, courts “afford a plaintiff’s choice of forum little, if any, weight,” it said. That’s “particularly” where, as here, the plaintiff doesn’t live in the jurisdiction, “and the operative facts bear little connection to the jurisdiction,” it said.

Courts in the 3rd U.S. Circuit Court of Appeals and elsewhere “routinely transfer securities class actions to the defendant corporation’s home jurisdiction,” said the memorandum. The 3rd Circuit, in a November 2020 decision in the case, In re: 3M Co, et al (docket 20-2864), even found it “an abuse of discretion when a district court denied a transfer motion under similar circumstances,” it said. The 3rd Circuit took the “extraordinary step” of granting mandamus relief, directing the court to transfer a securities class action to the district where the defendant corporation was located.