Judge Cote of the SDNY tried hard to coordinate the discovery and trial schedule in the consolidated WorldCom class action (the "Securities Litigation") with the handful of remanded state court actions against WorldCom, and came close to receiving full cooperation. One state case, however--Retirement Systems of Alabama, et al. v. J.P. Morgan Chase & Co., et al., No. CV 2002-1947(a)-PR (The Honorable Charles Price, Circuit Court, Montgomery County, Alabama)--would not fall in line. In that case, the plaintiffs consistently pressed the Alabama court to permit a trial in advance of the Securities Litigation. Although the defendants objected to any trial date prior to the trial in the Securities Litigation, plaintiffs argued that:

[The defendants] want us to participate in a so-called global settlement. You know what happens in global settlements? You get five to ten cents on the dollar. I believe we'll get a hundred cents on the dollar, not counting punitives. And we're under a statute. They don't have a statute in federal cases. We're under a statute here which gives us our attorneys fees on top, and prejudgment interest at 6 percent on top; neither of those are involved in any federal rule or statute....We don't care about global public interest. We care about the public interest here....We have fought from day one to get it to trial.

Judge Price ultimately agreed with the plaintiffs and, despite Judge Cote's personal appeal for coordination, set a trial date in the Alabama state court action of October 18, 2003, several months before the January 10, 2005 trial date in the Securities Litigation.

Undeterred, defendants applied under the All Writs Act, 28 U.S.C. Section 1651, for a stay of the Alabama trial for a period of "no earlier than sixty days following the conclusion of the consolidated class action trial" in the SDNY. Judge Cote observed that the All Writs Act provides federal courts with the power to "issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law," but is limited by the Anti-Injunction Act, which bars a federal court from enjoining a proceeding in a state court unless that action is "expressly authorized by Acts of Congress, or where necessary in aid of jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283.

After analyzing the request in detail, Judge Cote granted the writ in this Order enjoining the Circuit Court of Alabama, finding that "an injunction has become necessary if this Court is to preserve its ability to control the scheduling of this MDL class action trial, and its power to move the Securities Litigation toward as expeditious a resolution as is feasible." Judge Cote added that:

Finally, it is worth observing that the Alabama Plaintiffs have not been able to articulate any valid reason why their action should be tried in 2004, particularly when such a trial date will necessarily disrupt the schedule in the federal litigation. Their first proffered reason--that Alabama's budget crisis requires a 2004 trial--was baseless and explicitly rejected by Judge Price. Their second proffered reason--that a 2004 trial will extort a larger settlement--is not a legitimate reason for a trial date, and particularly not for one that creates such friction between the state and federal courts. As the Alabama Plaintiffs acknowledged when describing their purpose, their desire to obtain a settlement that will benefit them at the expense of all of the other victims of the WorldCom fraud is at odds with the general public good.