Appendix — J.P. Morgan Chase & Co. v. Retirement System of Alabama

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE ELEVENTH

CIRCUIT FILED JUNE 18, 2003

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 02-15385

Nom-4rgument Calendar

D.C. Docket No. 02-00898-CV-A-N

THE RETIREMENT SYSTEMS OF ALABAMA, consisting

of The Employees Retirement System of Alabama and The

Teachers Retirement System of Alabama; The Public

Education Employees’ Health Insurance Fund; The Public

Employees Individual Retirement Account Fund; The Clerks’

and Registers’ Supernumerary Fund; The Wildlife and

Freshwater Fisheries Fund; The Alabama Cultural Resources

Preservation Trust Fund; and the Alabama Trust Fund,

Plaintiff-Appellee,

versus

J.P. MORGAN CHASE & CO.,

J.P. MORCAN SECURITIES, INC., et al.,

Defendants-Appellants.

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Appendix A

Appeal from the United States District Court

for the Middle District of Alabama

Before TJOFLAT, BIRCH, and COX, Circuit Judges.

PER CURIAM:

The Defendants! seek review of the district court’s order

remanding this action to state court pursuant to the court’s

discretionary abstention power under 28 U.S.C. § 1334(c)(1).

The Retirement Systems of Alabama (“RSA”) filed suit

against the Defendants based on their alleged involvement

in, or culpable knowledge of, the events and transactions that

led to WorldCom Corporation’s bankruptcy. Some of the

Defendants filed a timely notice of removal to federal district

court based on 28 U.S.C. § 1452(a), but the district court

exercised its discretionary abstention power under

§ 1334(c)(1) and granted RSA’s Motion to Remand or to

Abstain.

On appeal, RSA contends that this court lacks appellate

jurisdiction to review the court’s abstention decision based

on the statutory bars to appellate review contained in

28 U.S.C. §§ 1334(d) and 1452(b). In response, the

Defendants contend that the statutory bars in §§ 1334(d)

and 1452(b) are unconstitutional and that this court has

jurisdiction to evaluate the constitutionality of these statutes.

1. “The Defendants” refers collectively to J.P. Morgan Chase

& Co.; J.P. Morgan Securities, Inc.; Citigroup, Inc.; Salomon Smith

Barney, Inc.; Arthur Andersen, LLP; Bank of America Corp.;

Banc of America Securities LLC; Bernard J. Ebbers; Scott D.

Sullivan; and Bear Stearns & Co., Inc.

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Appendix A

Based on their argument that the statutory bars to appellate

review are unconstitutional, the Defendants contend that this

court has jurisdiction to review the district court’s abstention

order and they urge this court to hold that the district court’s

order constitutes an abuse of discretion. The United States

has intervened to defend the constitutionality of §§ 1334(d)

and 1452(b).

We have jurisdiction to evaluate the constitutionality of

§§ 1334(d) and 1452(b). See, e.g., Felker v. Turpin, 518 U.S.

651, 661, 665, 116 S. Ct. 2333, 2339, 2341 (1996)

(dismissing for want of jurisdiction after rejecting a

constitutional challenge brought on Article III, § 2,

Exceptions Clause grounds); see also United States v. Ruiz,

__US. __, 122 S. Ct. 2450, 2454 (2002) (noting that a federal

court always has jurisdiction to determine its own

jurisdiction). Having carefully reviewed the briefs submitted

by RSA, the Defendants, and the United States, we conclude

that the statutory bars to appellate review contained in

§§ 1334(d) and 1452(b) are constitutional. Ex Parte

McCardle, 74 U.S. (7 Wall.) 506, 513-14 (1869); Ex Parte

Yerger, 75 U.S. (8 Wall.) 85, 104 (1 870). As a result, we lack

jurisdiction to consider the Defendants’ argument that the

district court abused its discretion when it exercised its

discretionary abstention power under § 1334(c)(1) and

remanded the action to state court.”

DISMISSED FOR WANT OF JURISDICTION.

2. RSA’s motion to dismiss, which was carried with the case, is

DENIED AS MOOT in light of our conclusion in this opinion that

we lack jurisdiction under §§ 1334(d) and 1452(b).

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APPENDIX B — MEMORANDUM OPINION OF THE

DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA,

NORTHERN DIVISION

DATED AND FILED SEPTEMBER 24, 2002

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

NO. 02-A-898-N

THE RETIREMENT SYSTEMS OF ALABAMA,

consisting of THE EMPLOYEES RETIREMENT SYSTEM

OF ALABAMA and THE TEACHERS RETIREMENT

SYSTEM OF ALABAMA; THE PUBLIC EDUCATION

EMPLOYEES’ HEALTH INSURANCE FUND; THE

PUBLIC EMPLOYEES INDIVIDUAL RETIREMENT

ACCOUNT FUND; THE CLERKS’ AND REGISTERS’

SUPERNUMERARY FUND; THE WILDLIFE AND

FRESHWATER FISHERIES FUND; THE ALABAMA

CULTURAL RESOURCES PRESERVATION TRUST

FUND; and THE ALABAMA TRUST FUND

Plaintiffs,

VS.

J. P. MORGAN CHASE & CO., J. P. MORGAN

SECURITIES, INC., CITIGROUP, INC., SALOMON

SMITH BARNEY, INC., ARTHUR ANDERSEN, LLP,

BANK OF AMERICA CORP., BANC OF AMERICA

SECURITIES LLC, BERNARD J. EBBERS, SCOTT D.

SULLIVAN, BEAR STEARNS & CO., INC., ET AL.

Defendants.

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Appendix B

MEMORANDUM OPINION

This matter is before the court pursuant to the August

13, 2002, Order of this court (Doc. #13) directing the

Defendants to show cause why this case should not be

remanded to the Circuit Court of Montgomery County,

Alabama, for the same reasons discussed in this court’s

Memorandum Opinion in Retirement Systems of Alabama v.

Merrill Lynch & Co. et al., 209 F. Supp. 2d 1257 (M.D. Ala.

2002). Pending before the court are: 1) Plaintiffs’ Motion to

Remand or to Abstain (Doc. #8), 2) Plaintiffs’ Motion to Stay

Consideration of Defendants’ Motion to Transfer and For

Preliminary Injunction (Doc. #9), 3) Plaintiffs’ Motion for

Expedited Hearing on Remand and Stay Motions (Doc. #10),

and 4) Defendants’ Salomon Smith Barney Inc. (“Salomon

Smith Barney”), J.P. Morgan Securities Inc. (“JPM

Securities”), Banc of America Securities LLC, and Citigroup,

Inc. (“Citigroup”) Motion to Stay Proceedings Pending

Determination of the Multidistrict Panel and To Set Briefing

Schedule (Doc. #14).

After a careful and thorough review of the pleadings,

motions, and memorandums filed by counsel in this case and

for the reasons discussed below, the court finds that Plaintiffs’

Motion to Remand or to Abstain is due to be GRANTED.

The remaining pending motions are due to be DENIED.

I. Procedural History

The Retirement Systems of Alabama and its constituent

pension funds (“RSA”) originally filed this case on July 15,

2002, in the Circuit Court of Montgomery County, Alabama.

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Appendix B

RSA amended its complaint on July 31, 2002. Defendants

J.P. Morgan Chase & Co. (“JPM Chase”), Bank of America

Corp., Banc of America Securities LLC, Salomon Smith

Barney, JPM Securities, and Citigroup timely removed this

case to this court under 28 U.S.C. § 1452 on August 5, 2002.'

Title 28 U.S.C. § 1452(a) provides:

A party may remove any claim or cause of action

in a civil action other than a proceeding before

the United States Tax Court or a civil action by a

governmental unit to enforce such governmental

unit’s police or regulatory power, to the district

court for the district where such civil action is

pending, if such district court has jurisdiction of

such claim or cause of action under section 1334?

of this title.

1. Defendants JPM Securities, Salomon Smith Barney, Banc of

America Securities LLC, and Citigroup are collectively referred to

as the “Underwriter Defendants” in this opinion. The Underwriter

Defendants oppose RSA’s Motion to Remand or Abstain. Bear Stearns

& Co., Inc., later joined the arguments made by the Underwriter

Defendants in opposing the Motion to Remand or Abstain. Defendant

Bear Stearns’ Joinder in Support or Underwriter Defendants’

Memorandum in Response to Order to Show Cause Why This Case

Should Not Be Remanded to State Court (Doc. #22).

2. 28 U.S.C. § 1334(a) & (b), the applicable provisions to this

case, state:

(a) Except as provided in subsection (b) of this section,

the district court shall have original and exclusive

jurisdiction of all cases under title 11.

- (Cont’d)

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Appendix B

28 U.S.C. § 1452(a). Defendant Arthur Andersen LLP

(““Andersen’’) did not join the Notice of Removal. RSA filed

its timely motion to remand or abstain an August 9, 2002.

II; Remand Standard

Federal courts are courts of limited jurisdiction.

See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.

375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095

(11th Cir. 1994); Wymbs v. Republican State Executive

Comm., 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied,

465 U.S. 1103 (1984). They may only hear cases that they

have been authorized to hear by the Constitution or the

Congress of the United States. See Kokkonen, 511 U.S. at

377. The Eleventh Circuit favors remand of removed cases

where federal jurisdiction is not absolutely clear. See Burns,

31 F.3d at 1095.

Ill. Background

The financial decline of the WorldCom Corporation

brought about this litigation. RSA has sued a number of

entities and persons allegedly involved in, and/or with

culpable knowledge of, the events and transactions leading

to WorldCom’s bankruptcy. WorldCom filed its petition for

Chapter 11 relief on July 21, 2002, in the United States

(Cont’d)

(b) Notwithstanding any Act of Congress that confers

exclusive jurisdiction on a court or courts other than the

district courts, the district courts shall have original but not

exclusive jurisdiction of all civil proceedings arising under

title 11, or arising in or related to cases under title 11.

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Appendix B

Bankruptcy Court for the Southern District of New York.

Prior to WorldCom’s filing for bankruptcy, RSA had

purchased millions of dollars worth of WorldCom debt

securities as well as large amounts of WorldCom common

stock. These securities are now largely valueless. RSA’s

Amended Complaint alleges that the Defendants’ violated

the Alabama Securities Act, Ala. Code §§ 8-6-1 et seq., the

Alabama common law of aiding and abetting, the Alabama

statutory and common law of fraud, including Ala. Code

§ 6-5-100 et seg., and Sections 11, 12(a)(2), and 15 of the

Securities Act of 1933, 15 U.S.C. §§ 77k, 771 (a)(2), & 770.4

WorldCom is not a defendant in this action. Despite the

large number of civil actions involving both WorldCom and

the defendants in this case, the Judicial Panel on Multidistrict

Litigation (“JPML”) has yet to designate a Multidistrict

Litigation (“MDL”) court to consolidate these cases. The

defendants have notified this court that the JPML has set a

hearing for September 26, 2002, to consider the various

lawsuits relating to WorldCom’s collapse. Defendants

_Memorandum in Support of the Motion to Stay Proceedings,

pp. 4,7 (Doc. #15); Declaration of Charles B. Paterson. p. 2.

3. “Defendants” refers to all defendants in the case.

“Underwriter Defendants,” as explained above, refers to the group

of underwriters who are objecting to RSA’s Motion to Remand or

Abstain. See supra n.1.

4. The Securities Act of 1933 prevents the removal to the federal

courts of any case brought in state court under 15 U.S.C. § 77a

et seq., unless the case is a “covered class action.” 15 U.S.C.

§§ 77v(a) & 77p(c). The Underwriter Defendants are seeking to

remove the case solely under the bankruptcy removal statutes,

28 U.S.C. §§ 1334(b) & 1452.

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Appendix B

The facts in this case are quite similar to those found in

this court’s memorandum opinion in Retirement Systems of

Alabama vy. Merrill Lynch & Co. et al., 209 F. Supp. 2d 1257

(M.D. Ala. 2002) (“Merrill Lynch”). Given the parties’

familiarity with this decision, an extended discussion of that

opinion is not necessary. The Order at issue in this case

directed the Defendants to show cause why the Merrill Lynch

opinion does not control the outcome of this case.

IV. Underwriter Defendants’ Motion to Transfer

A preliminary issue facing the court is the Underwriter

Defendants’ Motion to Stay Proceedings Pending

Determination of the Multidistrict Panel (Doc. #14).

The Underwriter Defendants argue that Gould v. National

Life Insurance Co., 990 F. Supp. 1354 (M.D. Ala. 1998)

compels this court to consider their motion to stay prior to

deciding RSA’s Motion to Remand or Abstain. Under

Eleventh Circuit jurisprudence, “a court should inquire into

whether it has subject matter jurisdiction at the earliest

possible state in the proceedings.” Univ. of S. Ala. v. Am.

Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). Because

RSA’s Motion to Remand or Abstain directly addresses the

question of subject matter jurisdiction, the court will address

that motion first in accordance with Eleventh Circuit

guidance. Accord Merrill Lynch, 209 F. Supp. 2d at 1261

(deciding first the question of subject matter jurisdiction in

the motion to remand instead of the motion to transfer).

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Appendix B

V. RSA’s Motion to Remand or Abstain

A. Responses to Show Cause Order

Pursuant to this court’s August 13, 2002, Order directing

the Defendants to show cause why this case should not be

remanded to the state circuit court, the Underwriter

Defendants offer several reasons why this case is distinct

from Merrill Lynch. First, they argue that unanimity is not

required for removal of cases under 28 U.S.C. § 1452.

The Underwriter Defendants seek to distinguish this case

from Merrill Lynch both by conforming the removal to Rule

9027 of the Federal Rules of Bankruptcy Procedure and by

consenting to the entry of final orders and judgments by the

bankruptcy judge. The Underwriter Defendants also note that

even if the JPML intervenes, they will still seek to have the

Southern District of New York chosen as the MDL court,

from which this case can be automatically referred to the

bankruptcy court supervising the WorldCom reorganization.

In Merrill Lynch, the Merrill Lynch defendants’ desired to

transfer the case to the MDL court in Houston, Texas, instead

of the Bankruptcy Court for the Southern District of New

York, which was handling the Enron reorganization. 209

F. Supp. 2d at 1260-61. The Merrill Lynch defendants wanted

to use the bankruptcy removal procedure under 28 U.S.C.

§ 1452 to transfer the case not to a bankruptcy court but to

another district court. Jd.

5. In Merrill Lynch, the defendants included JPM Chase,

Citigroup, and Bank of America Corp. For the sake of clarity, the

court will refer to the defendants in Merrill Lynch as “Merrill Lynch

defendants.”

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Appendix B

Second, the Underwriter Defendants argue that this case

is “related to” the WorldCom bankruptcy within the meaning

of 28 U.S.C. §§ 1334(b) & 1452. In support of this argument,

the Underwriter Defendants offer the indemnification

agreement contained in the underwriting agreements between

WorldCom and the Underwriter Defendants. The Underwriter

Defendants argue that these indemnification agreements

provide for a present right of reimbursement by WorldCom

to the Underwriter Defendants for their legal fees, as incurred,

for any defense involving an issuance of WorldCom

securities. The Underwriter Defendants have also filed a

Proof of Claim in the United States Bankruptcy Court for

the Southern District of New York for their indemnification

claim against WorldCom. This was not present in Merrill

Lynch. See 209 F. Supp. 2d at 1267 (noting absence of proof

of claim filing).

RSA counters the distinctions purportedly drawn by the

Underwriter Defendants between this case and Merrill Lynch

by arguing that 28 U.S.C. § 1452 requires unanimity on the

part of all of the defendants seeking to remove a case to

federal court on the basis of “related to” jurisdiction. RSA

also states that it has not participated in any filings before an

MDL court involving WorldCom.

RSA reaffirms its position from Merrill Lynch that this

case is not “related to” WorldCom’s pending bankruptcy case

in the Southern District of New York. In support of that

position, RSA argues that the indemnity provisions at issue

in this case cannot affect WorldCom’s bankruptcy estate as

required to establish “related to” jurisdiction under 28 U.S.C.

§ 1334. In the alternative, RSA argues that those indemnity

12a

Appendix B

provisions are invalid and unenforceable as against public

policy following the rationale of Globus v. Law Research

Service, Inc., 418 F. 2d 1276 (2d Cir. 1969).

As to the Underwriter Defendants’ Proof of Claim filed in

bankruptcy court, RSA submits that such a filing does not

distinguish this case from Merrill Lynch. In the alternative, RSA

argues that such a claim should be disallowed as a contingent

and unmatured claim under 11 U.S.C. § 502(e)(1)(B).°

RSA also argues that its position as the state retirement

plan for the employees in Alabama allows it to assert

sovereign immunity as a defense to being forced to litigate

in federal court. See Ala. Code § 36-27-2 (establishing

employees’ retirement system and vesting it with same

immunity from suit accorded to the State). RSA’s argument

relies heavily on the Supreme Court’s line of recent sovereign

immunity and Eleventh Amendment decisions, notably Alden

v. Maine, 527 U.S. 706 (1999), and Kimel v. Florida Board

of Regents, 528 U.S. 62 (2000). The crux of RSA’s argument

is that RSA’s sovereign immunity cannot be set aside through

the removal of this case by the Underwriter Defendants under

28 U.S.C. §§ 1334(b) & 1452. RSA argues that its sovereign

6. 11 U.S.C. § 502(c)(1)(B) provides in pertinent part:

... the court shall disallow any claim for reimbursement

or contribution of an entity that is liable with the debtor

on or has secured the claim of a creditor, to the extent

that - - ... (B) such claim for reimbursement or

contribution is contingent as of the time of allowance or

disallowance of such claim for reimbursement or

contribution.

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Appendix B

immunity protects it from becoming involved in any litigation

in federal court without its consent despite the fact that RSA

initiated this suit against the Defendants.

B. The Question of Unanimity under 28 U.S.C. § 1452

In an effort to distinguish this case from Merrill Lynch,

the Underwriter Defendants argue that they conformed to

Bankruptcy Rule 9027,’ that Andersen, while not joining the

Notice of Removal, nonetheless joins in the opposition to

remand and the Underwriter Defendants’ Motion to Stay,*

and that contrary to Merrill Lynch, the Underwriter

Defendants actually intend to use the bankruptcy removal

statutes to remove this case to a bankruptcy court. These steps

do not counter the fact that all of the defendants did not join

the Notice of Removal. Thus, the analysis of the issue falls

7. Rule 9027 sets forth the procedure for removing a case under

bankruptcy law. It does not grant a district court jurisdiction to hear

a case. While the Underwriter Defendants have conformed to Rule

9027, Andersen has not. As the Underwriter Defendants stated in

their Notice of Removal (Doc. #1), Andersen did not join the removal

petition. The court must still analyze the jurisdictional question under

28 U.S-C. §§ 1334(b) & 1452. Federal jurisdiction is only properly

found where the defendants meet the requirements of the applicable

federal statutes, namely 28 U.S.C. §§ 1334 & 1452.

8. Andersen’s joinder with the Underwriter Defendants in

Opposition to remand is only evidenced by the Underwriter

Defendants’ Memorandum of Law in Response to Show Cause Order

Why This Case Should Not be Remanded to State Court at p. 21

n.14. Andersen has not filed any documents with the court objecting

to remand.

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Appendix B

back to the question presented in Merrill Lynch, namely, does

§ 1452 require all defendants to join a notice of removal?°

The Underwriter Defendants have relied on Creasy vy.

Coleman Furniture Corp., 763 F.2d 656 (4th Cir. 1985), for

their assertion that unanimity among the defendants is not

required for removal under § 1452. As discussed in Merrill

Lynch, the Creasy court cited no authority in reaching this

analysis of § 1452. See Merrill Lynch, 209 F. Supp. at 1262;

see also, Creasy, 763 F.2d at 660-61. Other courts have found

that unanimity among the defendants is a requirement for

removal under § 1452. See Ross v. Thousand Adventures of

Iowa, Inc., 178 F. Supp. 2d 996, 1001-02 (S.D. Iowa 2001)

(granting motion to remand where all defendants failed to

join in notice of removal under § 1452 and rejecting the view

in Sommers v. Abshire, that the unanimity rule does not apply

9. The language of § 1452 highlighted in Merrill Lynch states that

‘a party may remove any claim or cause of action” that is “related to” a

bankruptcy proceeding. 209 F. Supp. 2d at 1264. 28 U.S.C. § 1441(a)

uses the following language: “any civil action brought in a State court

of which the district courts of the United States have original jurisdiction,

may be removed by the defendant or the defendants. . . .” The court in

Sommers v. Abshire, 186 B.R. 407, 408-09 (E.D. Tex. 1995), contrasted

the language of the two provisions and concluded that because of the

differences between “a party” and “the defendants,” § 1452’s language

of “a party” did not require all defendants to unanimously agree to remove

a matter to the federal courts. The lack of clarity over the proper

construction of § 1452 was a factor in this court’s decision not to base

its decision to remand or abstain in Merrill Lynch on the statutory.

construction of § 1452. 209 F. Supp. 2d at 1264; see id. at 1264 n.13

(explaining that the Supreme Court’s decision in Things Remembered,

Inc. v. Petrarca, 516 U.S. 124 (1995), raised the implication that

“the unanimity requirement of § 1441 is also applicable to removals

under § 1452... .”). ?

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Appendix B

to § 1452); Whitney Nat’! Bank v. Bunch, No. 00-2859, 2001

U.S. Dist. LEXIS 1424, at *7 n.9 (E.D. La. Jan. 31, 2001)

(noting that the rule of unanimity under 28 U.S.C. § 1446(b)

“applies to ‘related to’ removals pursuant to 28 U.S.C.

§ 1452”); Hills v. Hernandez, 1998 U.S. Dist. LEXIS 7475,

at *4-5 (E.D. La. May 13, 1998) (applying rule of unanimity

under 28 U.S.C. § 1446(b) to § 1452 and remanding due to

failure of all defendants to join the notice of removal filed

under § 1452).

This court is aware of other decisions that reach the

opposite conclusion.'° See Merrill Lynch, 209 F. Supp. 2d at

1262-63 (listing cases that rely on Creasy “without

undertaking any independent analysis of § 1452”).

The Underwriter Defendants’ attempts to distinguish this case

have not presented this court with any authority compelling

a different result than was reached in Merrill Lynch.

The Underwriter Defendants rest their argument on the

conclusion that their construction of § 1452 is correct and

that § 1452 can be reconciled with the other removal

provisions in 28 U.S.C. §§ 1441(a) & 1446."' Underwriter

Defendants’ Memorandum, p. 20. As this court noted in

Merrill Lynch, the Supreme Court reasoned in Things

10. See Abner v. Mate Creek Loading Inc. (In re Mid-Atlantic

Res. Corp.), No. 5:01-0699, 2002 U.S. Dist. LEXIS 16462, at *14

(S.D. W. Va. Aug. 26, 2002) (citing Creasy for the proposition that

unanimity is not required for removal under § 1452); Beasley v. Pers.

Fin. Corp., 279 B.R. 523, 2002 U.S. Dist. LEXIS 15297, at *10-12

(S.D. Miss. May 17, 2002) (same).

11. 28 U.S.C. § 1446(a) provides, in part: “A defendant or

defendants desiring to remove any civil action ... shall file in the

district court... a notice of removal... .”

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Appendix B

Remembered, Inc. v. Petrarca, 516 U.S. 124, 129 (1995),

that “[t]here is no express indication in § 1452 that Congress

intended that statute to be the exclusive provision governing

removals and remands in bankruptcy.” See Merrill Lynch,

209 F. Supp. 2d at 1264 n.13 (emphasizing import of the

Things Remembered decision on the analysis of § 1452).

Following the reasoning in Things Remembered, the proper

analysis of a removal taken under § 1452 may very well

include asking whether the removal is unanimous as is

required by § 1441. Where doubts exist about the district

court’s jurisdiction in a removed action, the Eleventh Circuit

counsels the district courts to remand. See Burns, 31 F.3d at

1095.

Despite the Underwriter Defendants’ intent to actually

remove this case to a bankruptcy court instead of another

district court, a bankruptcy court cannot exercise jurisdiction

unless the statutory prerequisites for that jurisdiction are met.

See Kokkonen, 511 U.S. at 377 (“Federal courts . . . possess

only that power auihorized by Constitution and statute.”).

In this case, it is at best unclear as to whether the Underwriter

Defendants fulfilled the statutory procedural requirements

for removing this case pursuant to § 1452. The Underwriter

Defendants have failed to show why the question of

unanimity under a § 1452 notice of removal should not be

answered by referring to Merrill Lynch.

C. 23 U.S.C. §§ 1334 & 1452: Related To Jurisdiction

The key distinction that the Underwriter Defendants have

drawn between this case and Merrill Lynch is that the

Underwriter Defendants have filed a Proof of Claim in

gl

i a eee. i ee as

17a

Appendix B

the bankruptcy court handling the WorldCom estate.

See Declaration of Charles B. Paterson, Aug. 20, 2002, Exh. 1.

The Underwniter Defendants allege that this Proof of Claim and

the language of the contractual indemnity agreements contained

in the Underwriting Agreements between WorldCom and the

Underwriter Defendants make this case “related to” the

WorldCom reorganization. The Eleventh Circuit set out the test

for federal “related to” jurisdiction in Jn re Lemco Gypsum, Inc.,

910 F.2d 784, 788 (11th Cir. 1990), by adopting without

alteration the standard set forth in Pacor, Inc. v. Higgins, 743

F.2d 984 (3d Cir. 1984). The Pacor court explained the test by

saying:

RMSE IP ATI ED

The usual articulation of the test for determining

whether a civil proceeding is related to bankruptcy

is whether the outcome of that proceeding could

conceivably have any effect on that estate being

administered in bankruptcy. (citations omitted).

Thus, the proceeding need not necessarily be against

the debtor or against the debtor’s property. An action

is related to bankruptcy if the outcome could alter

the debtor’s rights, liabilities, options or freedom of

action (either positively or negatively) and which in

any way impacts upon the handling and

administration of the bankrupt estate.

Id. at 994. The Supreme Court spoke approvingly about this

test in Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995).

The Eleventh Circuit later added that “(t]he key word in the

Lemco Gypsum test is ‘conceivable,’ which makes the

jurisdictional grant very broad.” Jn re Toledo, 170 F.3d 1340,

1345 (11th Cir. 1999).

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Appendix B

There is some case law which supports the Underwriter

Defendants’ argument. In Jn re Salem Mills, Inc., 148 B.R.

505, 510 (Bankr. N.D. Ill. 1992), the court explained that

the filing of a proof of claim by a third-party against a debtor

in order to seek to enforce an indemnity agreement against

the debtor “merely transforms the improbable into the

conceivable.” In Salem Mills, the bankruptcy court found

that “related to” jurisdiction existed where a third-party had

a contractual right from a settlement agreement to pursue

indemnification claims against the debtor. /d. at 507, 510.

By filing the proof of claim, the third-party demonstrated

the “reai or tangible impact” that the indemnification

agreement could have on the estate. Jd. at 510. According to

the Salem Mills court, this claim was enough to justify

“related to” jurisdiction. /d.; see id. at 509 (“If a proceeding

is related to the underlying bankruptcy by virtue of an

indemnification agreement against the debtor, there must be

something to evidence the impact, like a proof of claim. . . .”);

In re U.S. Brass Corp., 173 B.R. 1000, 1004 (Bankr. E.D.

Tex. 1994) (automatically asserting “related to” jurisdiction

upon the filing of a proof of claim by a third-party against

the debtor based on indemnity claims a contractual indemnity

agreement). But see Salem Mills, 148 B.R. at 509 (stating

that even if a proof of claim is filed, a court must still value

the claim and determine “the true impact the third-party

proceeding may have upon the allocation of assets among

creditors, if any”) (emphasis added).

This court, however, is hesitant to reach the conclusion

that the act of filing a proof of claim in bankruptcy court

is sufficient to guarantee “related to” jurisdiction.

See Kalamazoo Realty Venture Ltd. P ship v. Blockbuster

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Appendix B

Entm t Corp., 249 B.R. 879, 885 (N.D. Ill. 2000) (stating

that filing of proof of claim on an indemnity agreement

against a debtor “might confer “related to” jurisdiction’’);

In re Spaulding & Co., 131 B.R. 84, 89 (N.D. Ill. 1990)

(explaining, in the context of “related to” jurisdiction

regarding a reimbursement action, that if the defendant filed

a proof of claim against the debtor, “it may be necessary to

revisit this [jurisdictional] issue’). The parties have cited no

cases in which the Eleventh Circuit addresses this issue,

and research has not revealed any, either. The court is also

mindful of the fact that despite the broad language of the

Pacor standard, the application of the test to claims for

indemnification often results in mixed conclusions.!”

In Pacor itself, the court found that “related to”

jurisdiction was not present in a dispute between Pacor

(the Philadelphia Asbestos Company) and the Higgins family,

asbestos producis liability plaintiffs. 743 F.2d. 995. Pacor,

12. Cases involving indemnification claims and concluding that

“related to” jurisdiction does not exist include: Jn re Federal-Mogul

Global, Inc. (“Federal-Mogul #2”), 300 F.3d 368 (3d Cir. 2002);

Pacor Inc., v. Higgins, 743 F.2d 984 (3d Cir. 1984); Wise v. Travelers

Indem. Co., 192 F. Supp. 506 (N.D. W. Va. 2002); Skylark v.

Honeywell int'l. Inc., No. 01-5069, 2002 U.S. Dist. LEXIS 10554,

at *8-10 (S.D. Fla. Jan. 25, 2002); Jn re Asbestos Litig., 271 B.R.

118 (S.D. W. Va. 2001); and Jn re Spaulding & Co., 131 B.R. 84

(N.D. Ill. 1990).

Cases involving indemnification claims and concluding that

“related to” jurisdiction does exist include: Jn re Celotex Corp., 124

F.3d 619 (4th Cir. 1997) (proofs of claim filed by both plaintiff and

defendant against Celotex) and Jn re Dow Corning Corp., 86 F.3d

482 (6th Cir. 1996).

20a

Appendix B

similarly to the Underwriter Defendants in this case, attempted

to argue that its possible indemnification claim against Johns-

Manville Corporation following the resolution of the Pacor-

Higgins case would affect the Johns-Manville bankruptcy estate.

Id. The Third Circuit, despite the broad language of its test,

refused to agree and stated that “[t]he fact remains that any

judgment received by the plaintiff Higgins could not itself result

in even a contingent claim against Manville, since Pacor would

still be obligated to bring an entirely separate proceeding to

receive indemnification.” /d.

It is worth noting that the seemingly broad scope of the

Pacor test is indeed checked by the court’s language following

its announcement of the standard.

Our examination of the Higgins-Pacor-Manville

controversy leads us to conclude that the primary

action between Higgins and Pacor would have no

effect on the Manville bankruptcy estate, and

therefore is not “related to” bankruptcy within the

meaning of section [1334(b)]. At best, it is a mere

precursor to the potential third party claim for

indemnification by Pacor against Manville. Yet the

outcome of the Higgins-Pacor action would in no

way bind Manville, in that it could not determine

any rights, liabilities, or course of action of the

debtor. ... Even if the Higgins-Pacor dispute is

resolved in favor of Higgins, ... Manville would

still be able to relitigate any issue, or adopt any

position, in response to a subsequent claim by Pacor.

Pacor, 743 F.2d at 995 (citations omitted). The Pacor situation

is analogous to the situation presented in this case. The current

BOSAL ARLE REL ES MOREE DE TM HS ES ZS

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LEGA TES MOP! Pa URE ORICA

2la

Appendix B

action against the Underwriter Defendants is, at best, a

precursor to further litigation over the indemnity agreement.

The language of the indemnity agreement (discussed infra)

is far from certain in establishing when and if indemnification

accrues to an indemnified party. The Pacor court’s decision

that “related to” jurisdiction was lacking despite the

expansive scope of the standard emphasizes the burden

placed on the Underwriter Defendants in this case to

conclusively show that “related to” jurisdiction is indeed

present. See Federal-Mogul #2, 300 F.3d at 381-92 (following

Pacor and concluding that “because any indemnification

claims that the [defendants] might have against Debtors have

not yet accrued and would require another lawsuit before

they could have an impact on Federal-Mogul’s bankruptcy

proceeding ... the District Court’s ruling that it lacked

subject-matter jurisdiction” was not error).

Some courts have relied on the implication in Pacor that

contractual indemnity agreements automatically confer

“related to” jurisdiction when a defendant could use the

agreement to pursue a claim against the debtor’s estate.

See Pacor, 743 F.2d at 995. The Pacor court distinguished

the Pacor-Higgins dispute from Jn re Brentano's, 27 B.R. 90

13. See In re Celotex Corp., 124 F.3d at 627 (contractual

indemnification obligations creates “related to” jurisdiction);

U.S. Brass Corp., 173 B.R. at 1004 (contractual indemnity agreement

establishes “related to” jurisdiction upon filing of proof of claim).

But see In re Federal-Mogul Global, Inc., (“Federal-Mogul #1) Nos.

01-10578 et al., 2002 Bankr. LEXIS 937, at *25 (Bankr. Del. Feb.

15, 2002) (“[C]ases since Pacor have failed to endorse the proposition

that any contract of indemnification will support an extension of

related to jurisdiction.”), appeal dismissed and mandamus denied,

300 F.3d 368 (3d Cir. 2002).

22a

Appendix B

(Bankr. S.D.N.Y. 1983). In dicta discussing Brentano's,

the Third Circuit suggested that contractual indemnity

agreements “would automatically result in indemnification

against [the debtor].”'* Pacor, 743 F.2d at 995. The Pacor

court went on to distinguish Pacor’s possible claim for

indemnification against Johns-Manville from the facts in

Brentano's. Pacor, 743 F.2d at 995.

In Brentano's, MacMillan agreed to serve as a guarantor

for Brentano’s lease of real property from Pine Realty, Inc.,

27 B.R. at 91. The guaranty agreement obligated Brentano’s

to indemnify MacMillan for any liability incurred while

serving as a guarantor. Jd. When Brentano’s filed for

bankruptcy, Pine Realty commenced a suit in state court on

the guarantee against MacMillan. Jd. MacMillan moved for

a stay of the suit in bankruptcy court. The bankruptcy court

found “related to” jurisdiction based on the indemnity

agreement and its possible effects, in the event of Pine Realty

prevailing over MacMillan, on the bankruptcy estate. In its

analysis of Brentano's, the Pacor court reasoned that the

guaranty and indemnity agreement would automatically affect

the debtor’s estate in the event Pine Realty prevailed over

Macmillan. Pacor, 743, F.2d at 995.

Brentano's is distinguishable for another reason as well.

MacMillan served as the guarantor for eleven separate

Brentano’s leases. 27 B.R. at 91. MacMillan was the largest

unsecured creditor in the Brentano’s bankruptcy case, and

the court stated that “the disposition of [MacMillan’s] claim

14. See Federal-Mogul #1, 2002 Bankr. LEXIS 937, at *30

(“[Pacor] may also be read to suggest that an indemnity agreement

alone will not suffice.”).

23a

Appendix B

is one of the most important aspects (if not the most

important) of the debtor’s efforts to reorganize.” Jd. The

Brentano’ court’s analysis suggests that its decision in

finding “related to” jurisdiction, while based on the

contractual agreements between Brentano’s and MacMillan,

also was based on MacMillan’s role as Brentano’s largest

unsecured creditor and on the fact that resolving MacMillan’s

claims was crucial to the outcome of the reorganization

efforts. See id. at 92 (“The disposition of this claim and other

similar claims involving Brentano’s leases, MacMillan

guaranties, and the Brentano’s-MacMillan indemnification

agreement will ultimately determine the fate of this

reorganization effort.”).

The fact-specific line-drawing engaged in by the Pacor

court and others suggest that a close reading of the indemnity

agreement between the Underwriter Defendants and

WorldCom is in order. The language of the agreement is clear.

[WorldCom] will not be liable .. . to the extent

that any such loss, claim, damage or untrue

statement or omission or alleged omission made

. in reliance upon and in conformity with

written information furnished to the Company by

or on behalf of any Underwriter. . .

[S]uch indemnity with respect to any Basic

Prospectus or Preliminary Prospectus shall not

inure to the benefit of any Underwriter . . . from

whom the person asserting any such loss, claim,

damage or liability purchased the Offered

Securities which are the subject thereof if such

24a

Appendix B

person did not receive a copy of the Prospectus

... at or prior to the confirmation of the sale. ...

Declaration of Charles B. Paterson, Aug. 20, 2002,

Underwriters Agreement, p. 15. Without passing judgment

on the merits of the Underwriter Defendants’ claim against

WorldCom, the language of the indemnity agreement suggests

that before the claims in this lawsuit can have any conceivable

effect on WorldCom’s bankruptcy estate, it must be

established that the Underwriter Defendants have made no

“untrue statement[s] or omission[s] or alleged omission[s]”

in any representations they made to WorldCom. WorldCom’s

liability under the indemnity agreement is contingent upon

such a finding. Presently, the Underwriter Defendants have

presented no evidence to this court of WorldCom conceding

the fact that it is liable to the Underwriter Defendants. It is

indeed doubtful that WorldCom, even upon the Underwriter

Defendants prevailing in this lawsuit, will automatically

acknowledge that it was the source of “alleged omission[s]”

and immediately pay any indemnity allegedly owed to the

Underwriter Defendants. The filing of a proof of claim in

the bankruptcy court will not erase the contingency contained

in the indemnity agreement.

“The key word in the Lemco Gypsum/Pacor test is

‘conceivable’ ...” Jn re Toledo, 170 F.3d at 1345. As the

foregoing discussion shows, it appears that it is not

“conceivable” that this lawsuit will affect WorldCom’s

bankruptcy estate. Where a lawsuit’s potential effect on a

bankruptcy estate is “speculative and premature,” then such

a case fails to warrant federal bankruptcy “related to”

jurisdiction. Skylark v. Honeywell Int’l, Inc., No. 01-5069,

25a

Appendix B

2002 U.S. Dist. LEXIS 10554 (S.D. Fla. Jan. 25, 2002);

see Federal-Mogul #1, 2002 Bankr. LEXIS 937, at *26

(noting that even though present suit may create “very

substantial claims, against the debtors in the future,” based

on indemnification claims, the underlying facts concerning

the indemnity will have to be adjudicated before the current

claims can affect the estate).

| Additionally, the completion of this lawsuit may not

have any impact on the WorldCom bankruptcy estate.

See Federal-Mogul #2, 300 F.3d at 382 (stating that because

indemnification claims against debtor would necessitate

another lawsuit before it could impact the debtor’s estate,

the finding that jurisdiction was lacking was not error);

Bank United v. Manley, 273 B.R. 229, 243-44 (N.D. Ala.

2001) (“[B]jankruptcy courts have no jurisdiction over

proceedings that have no effect on the debtor.” (quoting

Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995))).

Regardless of how this lawsuit ends, it will not increase or

decrease the size of the WorldCom estate. RSA is not suing

WorldCom for any damages. As discussed above, the

Underwriter Defendants’ indemnification claims are

contingent, not absolute. See Merrill Lynch, 209 F. Supp. 2d

at 1267 (noting that one concern this court had in exercising

“related to” jurisdiction was the viability of the claims for

indemnification). Cf. Davis v. Life Investors Ins. Co. of Am.,

No. 3:01CV799LN, 2002 U.S. Dist. LEXIS 14383, at *8

(S.D. Miss. May 30, 2002) (finding “related to” jurisdiction

where the proof of claim against the debtor was based on an

“absolute right of indemnity” against the debtor (emphasis

added)).

26a

Appendix B

Thus, this court concludes that uncertainty remains over

the issue of § 1334(b) “related to” jurisdiction despite the

indemnity agreement and the Underwriter Defendants’ proof

of claim. It is not clear that the Underwriter Defendants have

the same relationship to WorldCom as the third-party

defendant did in Brentano's, i.e. the largest unsecured

creditor. See Federal-Mogul #1, 2002 Bankr. LEXIS 937, at

*28-29 (noting relationship of MacMillan to Brentano’s as a

_ factor in Brentano's decision). Other courts have been

hesitant to find “related to” jurisdiction where the tenuous

basis for jurisdiction is an indemnity agreement, the certainty

of which is questioned. See id. at *27-28 (refusing to find

“related to” jurisdiction on an indemnity agreement where

it was unclear that the agreement would bind the debtor).

The Federal-Mogul #] court explained:

To the extent that the validity of an indemnity

agreement is in doubt, the directness between the

third-party action and a judicial ruling that will affect

the estate is attenuated. Moreover, as the

jurisprudence shows, cases in which related-to

jurisdiction is founded solely on an indemnification

agreement between otherwise unrelated parties are

not the rule but the exception.

Id. at *28. Based on the above discussion, this court

concludes that the Underwriter Defendants have failed to

show why this case should not follow the decision of this

court in Merrill Lynch.

27a

Appendix B

VI. Discretionary Abstention: 28 U.S.C. § 1334(c)

This court abstained under 28 U.S.C. § 1334(c)(1)"

from exercising “related to” jurisdiction in Merrill Lynch.

209 F. Supp. 2d at 1267-68. In Cassidy Wyeth-Ayerst

Laboratories, 42 F. Supp. 2d 1260, 1263 (M.D. Ala. 1999),

the court set out twelve factors to consider when deciding

whether to abstain. The twelve factors are:

(1) the effect, or lack thereof, on the efficient

administration of the bankruptcy estate if the

. discretionary abstention is exercised, (2) the

extent to which state law issues predominate over

bankruptcy issues, (3) the difficulty or unsettled

nature of the applicable state law, (4) the presence

of related proceedings commenced in state

court or other non-bankruptcy courts, (5) the

jurisdictional basis, if any, other than § 1334,

(6) the degree of relatedness or remoteness of the

proceedings to the main bankruptcy case, (7) the

substance rather than the form of an asserted

“core” proceeding, (8) the feasibility of severing

state law claims from core bankruptcy matters to

allow judgments to be entered in state court with

enforcement left to the bankruptcy court, (9) the

15. 28 U.S.C. § 1334(c)(1) provides:

Nothing in this section prevents a district court in the

interest of justice, or in the interest of comity with State

courts or respect for state law, from abstaining from

hearing a particular proceeding arising under title 11 or

arising in or related to a case under title 11.

28a

Appendix B

burden on the bankruptcy court’s docket, (10) the

likelihood that the commencement of the

proceeding in bankruptcy court involves forum

shopping by one of the parties, (11) the existence

of aright to jury trial, and (12) the presence in the

proceeding of non-debtor parties.

Cassidy, 42 F. Supp. 2d at 1263. The Underwriter Defendants

have attempted to set out distinctions between this case and

Merrill Lynch, and they argue that this court should not

abstain from exercising jurisdiction in this case.

Despite the Underwriter Defendants’ arguments to the

contrary, the concerns about the existence of jurisdiction

under §§ 1334(b) & 1452 still exist. All defendants did not

join the removal notice. This court’s concerns about subject

matter jurisdiction under the “related to” prong of § 1334(b)

have not been resolved. Furthermore, similarly to Merrill

Lynch, this case involves both state statutory and common

law claims, and RSA has requested a jury trial. See 209

F. Supp. 2d at 1268 (noting the court’s consideration of those

factors). Like Merrill Lynch, the Underwriter Defendants’

purported basis for jurisdiction is limited to §§ 1134(b) &

1452. As explained above, that basis jurisdiction is tenuous

at best. To exercise jurisdiction would contradict the guidance

of the Eleventh Circuit, which fayors remand in cases where

federal jurisdiction is not absolutely ciear. See Burns, 31 F.3d

at 1095.

The various factors discussed in Cassidy warrant

abstention in this case. Only non-debtor parties are involved

in this litigation. RSA has requested a jury trial, and that

29a

Appendix B

request will be difficult to meet in bankruptcy court.

This action is relatively remote from the bankruptcy

proceeding in that it will not have any effect on WorldCom’s

bankruptcy estate. The Underwriter Defendants have failed

to show why this case is not governed by Merrill Lynch and

why this court should not exercise discretionary abstention

for the reasons explained in Merrill Lynch. This court

concludes that, even assuming jurisdiction exists under

§§ 1334(b) & 1452, it should abstain under 28 U.S.C.

§ 1334(c)(?) from hearing this case. Accordingly, the court

does not reach any additional issues raised by RSA.

A separate Order will be entered in accordance with this

Memorandum Opinion.

Done this 24th day of September, 2002.

/s/ W. Harold Albritton

W. HAROLD ALBRITTON

CHIEF UNITED STATES

DISTRICT JUDGE

30a

APPENDIX C — CONSTITUTIONAL PROVISION

AND STATUTES INVOLVED

U.S. Const. art. III, § 2, cl. 2:

In all Cases affecting Ambassadors, other

public Ministers and Consuls, and those in which

a State shall be Party, the supreme Court shall have

original Jurisdiction. In all the other Cases before

mentioned, the Supreme Court shall have

appellate Jurisdiction, both as to Law and Fact,

with such Exceptions, and under such Regulations

as the Congress shall make.

28 U.S.C. § 1334:

(a) Except as provided in subsection (b) of

this section, the district courts shall have original

and exclusive jurisdiction of ail cases under

title 11.

(b) Notwithstanding any Act of Congress that

confers exclusive jurisdiction on a court or courts

~ other than the district courts, the district courts

shall have original but not exclusive jurisdiction

of all civil proceedings arising under title 11, or

arising in or related to cases under title 11.

(c)(1) Nothing in this section prevents a

district court in the interest of justice, or in the

interest of comity with State courts or respect for

State law, from abstaining from hearing a

particular proceeding arising under title 11 or

arising in or related to a case under title 11.

3la

Appendix C

(2) Upon timely motion of a party in a

proceeding based upon a State law claim or State

law cause of action, related to a case under

title 11 but not arising under title 11 or arising in

a case under title 11, with respect to which an

action could not have been commenced in a court

of the United States absent jurisdiction under this

section, the district court shall abstain from

hearing such proceeding if an action is

commenced, and can be timely adjudicated, in a

State forum of appropriate jurisdiction.

(d) Any decision to abstain or not to abstain

made under this subsection (other than a decision

not to abstain in a proceeding described in

subsection (c)(2)) is not reviewable by appeal or

otherwise by the court of appeals under section

158(d), 1291, or 1292 of this title or by the

Supreme Court of the United States under section

1254 of this title. This subsection shall not be

construed to limit the applicability of the stay

provided for by section 362 of title 11, United

States Code, as such section applies to an action

affecting the property of the estate in bankruptcy.

(e) The district court in which a case under

title 11 is commenced or is pending shali have

exclusive jurisdiction of all of the property,

wherever located, of the debtor as of the

commencement of such case, and of property of

the estate.

32a

Appendix C

28 U.S.C. § 1452:

(a) A party may remove any claim or cause

of action in a civil action other than a proceeding

before the United States Tax Court or a civil

action by a governmental unit to enforce such

governmental unit’s police or regulatory power,

to the district court for the district where such civil

action is pending, if such district court has

jurisdiction of such claim or cause of action under

section 1334 of this title.

(b) The court to which such claim or cause

of action is removed may remand such claim or

cause of action on any equitable ground. An order

entered under this subsection remanding a claim

or cause of action, or a decision to not remand, is

net reviewable by appeal or otherwise by the court

of appeals under section 158(d), 1291, or 1292 of

this title or by the Supreme Court of the United

States under section 1254 of this title.

33a

APPENDIX D — WORLDCOM

BONDHOLDER ACTIONS

WORLDCOM BONDHOLDER ACTIONS

Bondholder Actions Filed in Federal Court

l.

Patrick Emanuele, et al. v. WorldCom, Inc., et al.,

C.A. No. 1:02-1353 (D. D.C.)

Above Paradise Investments, Ltd. v. WorldCom, Inc.,

et al., C.A. No. 1:02-4990 (S.D.N.Y.)

Municipal Police Employees Retirement System of

Louisiana v. WorldCom, Inc., et al., C.A. No. 1:02-5285

(S.D.N.Y.)

Longacre Master Fund Ltd. v. Worldcom, Inc.,

Case No. 02-CV-1260-WS (HTW) (S.D. Miss.)

SunTrust Bank, et al. v. Ebbers, et al., Case No. 021499

(S.D. Miss.)

Metro. Govt of Nashville & Davidson County, Tenn. v.

Ebbers, et al., Case No. 3-03 0734 (M.D. Tenn.)

34a

Appendix D

Bondholder Actions Filed in State Court and Finally

Transferred by the JPML to the Southern District of New

York

1.

California Public Employees’ Retirement Systems v.

WorldCom, Inc., Case No. 02-6088 CBM (Mcx)

(C.D. Cal.)

West Virginia Investment Management Board v.

WorldCom, Inc., Case No. 02:02-1001 (S.D. W. Va.)

Board of Trustees of the Teachers’ Retirement System of

the State of Illinois v. WorldCom, Inc., Case No. 1:02-

5542 (N.D. Ill.)

State Universities Retirement System of Illinois v.

WorldCom, Inc., Case No. 1:02-5543 (N.D. Ill.)

Illinois State Board of Investment, et al. v. Bernard J.

Ebbers, et al., Case. No. 1:02-6789 (N.D. IIl.)

United Food & Commercial Workers Union v. Ebbers,

et al., Case No. 1:02-2323 (N.D. Oh.)

Public Employees Ret. Sys. of Ohio, et al. v. Ebbers,

et al., Case No. 02:02-982 (S.D. Oh.)

Alameda County Employees’ Ret. Assoc., et al. v. Ebbers,

et al., Case No. CV 02-9008 CBM (Mcx) (C.D. Cal.)

10.

11.

12.

13.

14.

15.

16.

17.

18.

35a

Appendix D

Screen Actors Guild - Producers Pension & Health

Plans, et al. v. Ebbers, et al., Case No. CV 02-9012

CBM (Mcx) (C.D. Cal.)

Wash. St. Inv. Bd. v. Citigroup, Inc., et al.,

Case No. CV02-2358P (W.D. Wa.)

Minn. St. Bd. Inv. v. CitiGroup, Inc., et al.,

Case No. 03-CV-55JMR/FLN (D. Minn.)

Mont. Bd. of Inv. v. Ebbers, et al., Case No. CV-02-57-

H-CCL (D. Mt.)

Los Angeles Bd. of Fire & Police Pension

Commissioners, et al. v. Ebbers, et al., Case No. 2-03-

853 (C.D. Cal.)

Barnett, et al. v. Ebbers, et al., Case No. 3-03-291

(S.D. Miss.)

Clowers, et al. v. Ebbers, et al., Case No. 1-03-126

(N.D. Miss.)

Arnold, et al. v. Ebbers, et al., Case No. 3-03-409

(S.D. Miss.)

Barkley, et al. v. Ebbers, et al., Case No. 3-03-410

(S.D. Miss.)

Barlow, et al. v. Ebbers, et al., Case No. 3-03-411

(S.D. Miss.)

19.

20.

21.

bee

23.

24.

25.

26.

27.

28.

36a

Appendix D

Hamilton, et al. v. Ebbers, et al., Case No. 3-03-412

(S.D. Miss.)

Hood, et al. v. Ebbers, et al., Casé No. 3-03-413

(S.D. Miss.)

Gilkey, et al. v. Ebbers, et al., Case No. 4-03-119

(S.D. Miss.)

Albright, et al. v. Ebbers, et al., Case No. 5-03-177

(S.D. Miss.)

Maryland-Nat’l Capital Park & Planning Comm'n

Employees’ Ret. Sys. v. Citigroup, Inc., et al., Case No.

8:03-881 (D.Md.)

Heavy & Gen'l Laborers’ Locals 472 & 172 Pension &

Annuity Funds, et al., Case No. 2:03-1338 (D.N.J.)

State of Wisconsin Inv. Bd, et al. v. Citigroup, Inc.,

et al., Case No. 3:02:698 (W.D. Wis.)

Maintenance Employee Teamsters Local 416 Pension

Fund y. Ebbers, et al., Case No. 1:03-652 (N.D. Ohio)

Franck , et al. v. Sullivan, et al., Case No. 1-03-105

(N.D. Miss.)

Abrams, et al. v. Ebbers, et al., Case No. 1-03-108

(N.D. Miss.)

29.

30.

31.

32.

33.

34.

35.

36.

SS lLlUlmlmlmUmll———C

37a

Appendix D

Little, et al. v. Ebbers, et al., Case No. 3-3-292

(S.D. Miss.)

Smith, et al. v. Ebbers, et al.,Case No. 4:03-162

(N.D. Miss.)

Pac. Life Ins. Co., et al. v. J.P. Morgan Chase & Co.,

et al., No. 8:03-813 (C.D. Cal.)

Maine State Ret. Sys. v. Citigroup, Inc., et al.,

No. 1:03-98 (D.Me.)

Municipal Employees Ret. Sys. of Michigan, et al. v.

Citigroup, Inc., et al., No. 2:03-72133 (E.D. Mich.)

Clark, et al. v. Ebbers, et al., No. 2:03-328 (S.D. Miss.)

State of Alaska Dept of Revenue, et al. v. Citigroup,

Inc., et al., Case No. 3:03-99 (D. Alaska)

McMorgan & Co. v. Ebbers, et al., Case No. C 03-2801

SBA (N.D. Cal.)

38a

Appendix D

Bondholder Actions Conditionally Transferred by the

JPML to the Southern District of New York and Awaiting

Final Transfer

1.

Am. Int’l Group, Inc., et. al. v. Ebbers, et al.,

Case No. 3-03CV1566-L (N.D. Tex.)

The Northwestern Mut. Life Ins.. Co. v. Citigroup, Inc.,

et al., Case No. 03-C-0608-JPS (E.D. Wis.)

Alaska Elec. Pension Fund v. Citigroup, Inc., et al.,

Case No. J03-0014C V(RRB) (D. Alaska)

UFCW Int’l Union - Indus. Pension Fund v. Citigroup,

Inc., et al., Case No. 03-CV-1526 (D. D.C.)

Bondholder Actions Recently Filed in State Court And Not

Yet Conditionally Tranferred by JPML

l.

y I

State of Oregon, By & Through the Oregon State

Treasurer, et al. v. Solomon Smith Barney, Inc., et al.,

Case No. 030808916 (Multnomah County Circuit Ct.,

Portland, OR)

Dist. No. 9, I.A. of M.&A.W. Pension Trust, et al. v.

Ebbers, et al., Case No. 0006837-03 (D.C. Superior

Court)

Elec. Workers I.B.E.W. Local 701 Pension Plan, et al. v.

Ebbers, et al., Case No. 03C6227 (N.D. IIl.)

10.

11.

12.

a3.

39a

Appendix D

Iron Workers of W. PA Pension & Welfare Plans, et al. v.

Ebbers, et al., Case No. 03-1316 (W.D. PA)

W. Pa. Teamsters v. Ebbers, Case No. 03-1315

(W.D. PA)

New Mexico State Inv. Council, et al. v. Ebbers,

et al., Case No. CV-03-1028-RB/DJS (D. N.M.)

DuPage County Cement Masons Local 803 Pension

Fund v. Ebbers, et al., Case No. 03-C6187 (N.D. III.)

Inter-Local Pension Fund of the Graphic

Communications Int’] Union v. Citigroup, Inc., et al.,

Case No. 03-C6185 (N.D. Ill.)

Alaska Teamster-Employer Pension Trust v. Citigroup,

Inc., et al., Case No. J03-0019-CV (RRB) (D. Alaska)

Massachusetts State Guaranteed Annuity Fund & Mass.

State Carpenters Pension Fund v. Ebbers, et al., Case

No.: CV 03-5949 SJO (SHSx) (C.D. Cal.)

Denver Area Meat Cutters and Employers Pension Plan,”

et al. v. Ebbers, et al., Case No. 03-CV-1872 (D.D.C.)

Nat’! Asbestos Workers Pension Fund v. Ebbers,

Case No. PJM-03-2605 (D. Md.)

Asbestos Workers Local 12 Annuity Fund v. CitiGroup,

Inc., et al., Case No. CV 03 4554 (E.D.N.Y.)

14.

15.

16.

17.

40a

Appendix D

Ron G. Crane, State Treasurer & the State of Idaho v.

Ebbers, et al., Case No. CIV 03-349-MHW (D. Idaho)

Alaska Permanent. Capital Mgmt. Co. v. Citigroup, Inc.,

et al., Case No. J03-0016-CV (RRB) (D. Alaska)

Locals 302 & 612 of the Int’l Union of Operating

Eng’rs-Employers Constr. Indus. Ret. Trust v. Ebbers,

et al., Case No. C03-2548-Z (W.D. Wa.)

Carpenters Pension Trust for S. Cal. v. Ebbers, et al.,

Case No. CV 03-4878 FMC (Mcx). (C.D. Cal.)

Bondholder Actions Remanded to State Court

.

Retirement Systems of Alabama v. J.P. Morgan Chase &

Co., et al., Case No. C-02-A-898-N (M.D. Alaa.).

City of Birmingham Ret. & Relief Fund v. Citigroup, Inc.,

et al., Case No. 2:03-994 (N.D. Ala.)

Steelworkers Pension Trust v. Citigroup, Inc., et al.,

Case No. 2:03-2171 (E.D. Pa.)

Tennessee Consolidated Ret. Sys. v. CitiGroup, Inc.,

et al., Case No. 3-03-128 (M.D. Tenn.)

(stayed pending appeal)

Illinois Mun. Ret. Fund v. Citigroup, Inc., et al.,

Case No. 03-CV-465-GPM (S.D. Ill.)