A McGraw-Hill Cos.’ bid to consolidate lawsuits filed by 16 states and the District of Columbia, accusing it of knowingly issuing misleading securities ratings, is to be heard by a federal judicial panel next month.
Several states sued New York-based McGraw-Hill in February in conjunction with a U.S. Justice Department action accusing the company’s Standard & Poor’s unit of boosting bond ratings to curry favor with clients. McGraw-Hill has called the allegations meritless.
McGraw-Hill last month had many of the cases moved from state courts to local federal courts and asked that they be put on hold while it sought to have them bundled for pretrial depositions and document review in federal court in New York. The Judicial Panel on Multidistrict Litigation will hear arguments on the request on May 30 at the U.S. courthouse in Louisville, Kentucky, according to an order entered April 10.
“Taken as a whole, the actions represent a concerted effort to supplant, if not undermine, a detailed, comprehensive, and carefully balanced federal scheme through patchwork and inevitably conflicting rulings across the country,” McGraw-Hill told the panel in a petition filed last month.
States with cases that could be transferred include Arizona, Colorado, Iowa, Missouri, North Carolina, Washington and the District of Columbia. Absent from that list are the suits filed by California and the federal government.
U.S. District Judge Matthew Kennelly in Chicago on March 20 halted progress on an S&P case filed last year by Illinois Attorney General Lisa Madigan.
McGraw-Hill had that case moved to federal court two weeks earlier, asking that it be halted pending the multidistrict panel ruling. Madigan asked the judge to return her case to state court in Chicago, where it was filed.
While granting the defense request for a stay, Kennelly also ordered the parties to brief him on issues concerning the return of the case to state court. He said he would rule May 15.
A federal judge in Pennsylvania last week stopped progress on that state’s lawsuit pending the panel’s ruling. McGraw-Hill has filed a similar request in Connecticut, where it was sued in 2010. That motion has been opposed by the state and federal governments.
The Illinois case is People of the State of Illinois v. McGraw-Hill Cos., 13-cv-01725, U.S. District Court, Northern District of Illinois (Chicago). The Connecticut case is Connecticut v. McGraw-Hill Cos., 13-00311, U.S. District Court, District of Connecticut (New Haven). The U.S. case is U.S. v. McGraw-Hill Cos., 13-cv-00779, U.S. District Court, Central District of California (Los Angeles).