In re CenturyLink Sales Practices and Securities Litigation

Court: United States District Court for the District of Minnesota
Case Number: 3:17-md-02795-MJD-KMM (MDL); 0:18-cv-00296-MJD-KMM (Securities)
Judge: U.S.D.J. Michael J. Davis.; U.S.M.J. Katherine M. Menendez
Class Period: 03/01/2013 - 07/12/2017
Case Contacts: John C. Browne, Michael D. Blatchley, Richard D. Gluck, Michael Mathai, Alex Dickin

This securities class action (the “Action”) asserts claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against CenturyLink, Inc. (“CenturyLink” or the “Company”), and certain of its senior executives (collectively with CenturyLink, “Defendants”), arising out of false and misleading statements concerning the Company’s fraudulent billing practices from March 1, 2013 through July12, 2017 (the “Class Period”).

Plaintiffs Have Reached a Proposed Settlement for $55 Million

The Court-appointed Lead Plaintiff and Class Representative the State of Oregon by and through the Oregon State Treasurer and the Oregon Public Employee Retirement Board, on behalf of the Oregon Public Employee Retirement Fund, and named plaintiff and Class Representative Fernando Alberto Vildosola, as trustee for the AUFV Trust U/A/D 02/19/2009 (collectively, “Plaintiffs”), have reached a proposed settlement of the Action for $55,000,000 in cash that, if approved, will resolve all claims in the Action (the “Settlement”).

The Settlement Fairness Hearing set by the Court to consider final approval of the Settlement, the proposed Plan of Allocation, and Lead Counsel's motion for attorneys' fees and expenses is scheduled to be held before the Court on July 20, 2021 at 11:00 a.m. CDTPlease Note: The date and time of the Settlement Fairness Hearing may change without further written notice to the Class.  In addition, the ongoing COVID-19 health emergency is a fluid situation that creates the possibility that the Court may decide to conduct the Settlement Fairness Hearing by telephonic or video conference, or otherwise allow Class Members to appear at the hearing by phone or video, without further written notice to the Class.  In order to determine whether the date and time of the Settlement Fairness Hearing have changed, or whether Class Members must or may participate by phone or video, it is important that you monitor the Court’s docket and the Settlement website, https://www.centurylinksecuritieslitigation.com/, before making any plans to attend the Settlement Fairness Hearing.  Any updates regarding the Settlement Fairness Hearing, including any changes to the date or time of the hearing or updates regarding in-person or telephonic/video appearances at the hearing, will be posted to the Settlement website, https://www.centurylinksecuritieslitigation.com/.  Also, if the Court requires or allows Class Members to participate in the Settlement Fairness Hearing by telephone or video conference, the information needed to access the conference will be posted to the Settlement website, https://www.centurylinksecuritieslitigation.com/.

If you are a member of the Class, your rights will be affected and you may be eligible for a payment from the Settlement.  The Class consists of:

All persons and entities that purchased or otherwise acquired publicly traded CenturyLink common stock or 7.60% Senior Notes due September 15, 2039 during the period from March 1, 2013 through July 12, 2017, inclusive, and who were damaged thereby, except for certain persons and entities who are excluded from the Class by definition.

Please read the Notice to fully understand your rights and options.  Copies of the Notice and Claim Form can be found on the Case Documents page.  You may also visit the Settlement website, https://www.centurylinksecuritieslitigation.com/, for more information about the proposed Settlement.

If you are a member of the Class, in order to be potentially eligible to receive a payment from the Settlement, you must submit a Claim Form by mail postmarked no later than August 13, 2021, or online using the Settlement website, https://www.centurylinksecuritieslitigation.com/, no later than August 13, 2021.

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.

IMPORTANT DATES AND DEADLINES:

AUGUST 13, 2021
CLAIM FILING DEADLINE

To be eligible to receive a payment from the Settlement, you must mail the Claim Form and supporting documentation, postmarked no later than August 13, 2021, or submit it electronically using the Settlement website, https://www.centurylinksecuritieslitigation.com/, no later than August 13, 2021, in accordance with the instructions in the Notice and Claim Form.

JUNE 29, 2021
EXCLUSION DEADLINE

To exclude yourself from the Class, you must submit a written request for exclusion so that it is received no later than June 29, 2021, in accordance with the instructions in the Notice.

JUNE 29, 2021
OBJECTION DEADLINE

Any objections to the proposed Settlement, the proposed Plan of Allocation, or the request for an award of attorneys’ fees and Litigation Expenses, must be received no later than June 29, 2021, in accordance with the instructions in the Notice.

JULY 20, 2021, at 11:00 a.m. CDT
SETTLEMENT FAIRNESS HEARING

To attend the Settlement Fairness Hearing and/or ask to speak in Court about the fairness of the Settlement, see the instructions in the Notice.  The Settlement Fairness Hearing will be held on July 20, 2021, at 11:00 a.m. CDT before the Honorable Michael J. Davis at the United States District Court for the District of Minnesota, Courtroom 13E of the Diana E. Murphy United States Courthouse, 300 South Fourth Street, Minneapolis, MN 55415, or by telephone or video conference (in the discretion of the Court).

 

The Litigation

CenturyLink is a communications company that provides a wide variety of telecom services, including broadband internet, Ethernet, managed hosting, video entertainment, television, and phone and VoIP, throughout the United States.  During the Class Period, CenturyLink made a series of false and misleading statements, including that its employees were subject to a strict code of conduct that prohibited employees from “placing…an order for our products and services for a customer without that customer’s authorization,” that the Company promoted its services based on customer “needs," and that its strategy of “bundling” services helped “maintain…customer relationships” and “enhance customer loyalty.”  The Company also reported strong revenue growth and sales, and represented that its financial condition was strong and growing. 

In truth, CenturyLink incentivized unethical and unlawful behavior, including by allowing CenturyLink employees to add services, lines, and accounts for customers without their permission, resulting in millions of dollars in unauthorized charges to CenturyLink customers.  Further, contrary to CenturyLink’s representations, the Company’s revenues and earnings growth were unsustainable because they were dependent upon improper and illegal conduct that subjected the Company to heightened regulatory scrutiny, governmental action, and significant sanctions that could severely curtail its business.

Investors learned the true facts about the Company’s business practices and financial condition through a series of corrective disclosures.  First, on June 16, 2017, Bloomberg reported that a former CenturyLink employee filed a whistleblower lawsuit alleging that she was wrongfully terminated after notifying CenturyLink’s CEO about the Company’s improper sales practices, including secretly billing millions of dollars of unauthorized charges to CenturyLink customers.  On June 19, 2017, Bloomberg reported that a consumer class action lawsuit against the Company had been filed on behalf of CenturyLink customers seeking up to billions of dollars in damages in connection with CenturyLink’s unlawful billing practices. Then, on July 12, 2017, the Minnesota Attorney General announced that it had filed a lawsuit against CenturyLink alleging violations of state consumer protection laws after a year-long investigation which provided extensive detail concerning CenturyLink’s billing misconduct. These revelations resulted in sharp declines in the prices of CenturyLink’s securities, causing investors to incur substantial losses.

In the wake of these disclosures, on June 21, 2017, the first of several securities class actions was filed against the Company.  On October 20, 2017, Magistrate Judge H. L. Perez-Montes of the Western District of Louisiana consolidated the related securities class actions and appointed the State of Oregon by and through the Oregon State Treasurer and the Oregon Public Employee Retirement Board, on behalf of the Oregon Public Employee Retirement Fund as Lead Plaintiff, and Bernstein Litowitz Berger & Grossmann LLP and Stoll Stoll Berne Lokting & Shacter, P.C. as Co-Lead Counsel. 

In February 2018, the Judicial Panel on Multidistrict Litigation transferred the consolidated actions to the District of Minnesota before the Honorable Michael J. Davis. On April 20, 2018, Judge Davis consolidated a subsequently-filed securities class action against CenturyLink under Oregon’s leadership. 

On June 25, 2018, Oregon filed a consolidated securities class action complaint.  Briefing on Defendants’ motion to dismiss was completed on November 9, 2018. Defendants’ motion to dismiss was heard on June 7, 2019. On July 30, 2019, Judge Davis issued an order denying Defendants’ motion to dismiss in its entirety.  

Plaintiffs filed their motion for class certification on January 21, 2020 and completed briefing on June 19, 2020. On September 14, 2020, the Class was certified when Judge Davis granted Plaintiffs' motion for class certification in full. The Class is defined as all persons and entities that purchased or otherwise acquired publicly-traded CenturyLink, Inc. common stock or 7.60% Senor Notes due September 15, 2039, during the period between March 1, 2013 to July 12, 2017, inclusive, and who were damaged thereby.

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