## Facts

- Numerous securities, derivative, and ERISA actions arising from Enron’s collapse were centralized in a multidistrict litigation proceeding in the Southern District of Texas.
- A lead securities class action (the Newby action) had been litigated since 2001, with dispositive motions resolved, discovery largely complete, and trial set for April 2007.
- Separate, later-filed securities actions against additional financial-institution defendants (including the RBC, RBS/TD, and Goldman Sachs actions) were at materially earlier stages of fact and expert discovery.
- Parties sought consolidation under Federal Rule of Civil Procedure 42(a):
  - Certain defendants in the Newby action moved to consolidate Newby with the RBC and RBS/TD actions.
  - Lead plaintiff in Newby moved to consolidate Newby with the Goldman Sachs action.
- Opponents of consolidation argued that a consolidated proceeding would either delay the trial-ready case or force unprepared parties into an accelerated schedule.

## Issues

1. Whether, under Federal Rule of Civil Procedure 42(a), the court should consolidate the trial-ready securities class action with later-filed bank-related securities actions for trial or further proceedings given common questions of fact and law but sharply different procedural postures.

## Decision

- The court denied full consolidation of the Newby action with the RBC, RBS/TD, and Goldman Sachs actions for purposes of the scheduled April 2007 trial.
- The court allowed the cases to remain coordinated within the MDL for pretrial management where appropriate, but maintained separate tracks and schedules reflecting each action’s readiness.

## Legal Principles

- Under Federal Rule of Civil Procedure 42(a), consolidation is discretionary even when actions share common questions of law or fact.
- In exercising Rule 42(a) discretion, courts weigh judicial economy against risks of unfair prejudice, juror confusion, manageability problems, and delay.
- Substantial disparities in litigation stage can justify denying consolidation where consolidation would either:
  - postpone a mature, trial-ready case to await completion of discovery in later-filed actions, or
  - compress discovery and expert preparation for less-developed cases to meet an existing trial date.
- MDL coordination can reduce duplication and promote consistent rulings without requiring merger of separate cases into a single consolidated trial.

## Conclusion

The court declined to consolidate a long-pending, trial-ready securities class action with later-filed bank-defendant actions, concluding that the marginal efficiency gains did not outweigh likely delay, prejudice to parties at different discovery stages, and trial manageability concerns; coordinated MDL management remained available short of a consolidated trial.


In re Enron Corp. Sec., Derivative & ERISA Litig., No. MDL-1446, 2007 U.S. Dist. LEXIS 8812 (S.D. Tex. Feb. 7, 2007)