Pension Trust Fund For Operating Engineers v. DeVry Education Group, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05198

STATUS Report -- JOINT INITIAL STATUS REPORT in advance of the Initial Status Hearing scheduled for January 8, 2019 -- by Utah Retirement Systems

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Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 1 of 7 PageID #:1876 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION PENSION TRUST FUND FOR OPERATING ENGINEERS, Individually and on Behalf of All Case No. 1:16-CV-05198 Others Similarly Situated, Plaintiff, Hon. Jorge L. Alonso v. DEVRY EDUCATION GROUP, INC., DANIEL HAMBURGER, RICHARD M. GUNST, PATRICK J. UNZICKER, AND TIMOTHY J. WIGGINS, Defendants. JOINT INITIAL STATUS REPORT Pursuant to the Court's Case Management Procedures, Lead Plaintiff Utah Retirement Systems ("URS" or "Lead Plaintiff") and Defendants DeVry Education Group, Inc., Daniel Hamburger, Richard M. Gunst, Patrick J. Unzicker, and Timothy J. Wiggins (collectively "Defendants") respectfully submit this Joint Initial Status Report in advance of the Initial Status Hearing scheduled for January 8, 2019. I. NATURE OF THE CASE A. Basis for Federal Jurisdiction This is a securities fraud class action. This Court has jurisdiction over the subject matter of the action under Section 27 of the Exchange Act, 15 U.S.C. § 78aa and 28 U.S.C. §§ 1331 and 1337. B. The Nature of Claims Asserted in the Complaint In this class action securities fraud case, URS brings claims on behalf of itself and a proposed class of investors under Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and the rules and regulations promulgated thereunder. 1 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 2 of 7 PageID #:1877 Lead Plaintiff alleges that beginning in August 2011 and for five years thereafter, 1 Defendants falsely touted to investors that 90% of graduates from DeVry University ("DeVry") were getting jobs in their chosen fields of study within only six months of graduation, and that they were making salaries of at least $40,000 (the "90% Representation"). Lead Plaintiff claims Defendants knew these statistics were false, or at the very least recklessly disregarded the substantial risk that they were making false statements to investors. Lead Plaintiff asserts that Defendants employed a corporate-wide methodology to inflate DeVry's job placement statistics by excluding (or waiving) graduates who should have been included, and including others who should have been excluded. Lead Plaintiff further alleges that the truth regarding Defendants' practices was revealed on January 27, 2016 when the Federal Trade Commission and Department of Education filed legal actions against DeVry for engaging in deceptive practices. When the market learned that the Company's long-touted graduate employment and salary statistics were false and unsubstantiated, DeVry's common stock price plummeted 15%, from $23.74 per share on January 26, 2016, to $20.09 per share at closing on January 27, 2016—wiping out over $230 million in market capitalization and damaging investors. Defendants deny the Lead Plaintiff's allegations. In the Court's December 20, 2018 order denying Defendants' motion to dismiss, the Court observed: "While it may be that, based on these allegations, 'this is not a strong case of securities fraud,' Washtenaw [Cty. Emps. Ret. Sys. v. Avid Tech., Inc., 28 F. Supp. 3d 93, 115 (D. Mass. 2014)], the allegations are strong enough to survive defendants' motion to dismiss for failure to state a claim." Defendants have filed an unopposed motion to extend the deadline to file their answer to the Third Amended Complaint to February 8, 2019. C. Relief Sought Lead Plaintiff seeks money damages on behalf of itself and a class of investors who purchased DeVry common stock. D. Jury Demand Lead Plaintiff seeks a trial by jury. E. The Parties Who Have Not Been Served All parties of record have been served. 1 The proposed Class Period in this case runs from August 26, 2011 to January 27, 2016. 2 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 3 of 7 PageID #:1878 II. DISCOVERY AND PENDING MOTIONS A. Pending Motions On January 2, 2019, Defendants filed an unopposed motion to extend the deadline to file their answer to the Third Amended Complaint to February 8, 2019. The Court issued an Order denying Defendants' Motion to Dismiss the Third Amended Complaint on December 20, 2018. ECF No. 113. Pursuant to the Private Securities Litigation Reform Act of 1995, discovery was stayed during the pendency of Defendants' Motion to Dismiss. Given the Court's decision denying the motion to dismiss, discovery is no longer stayed. B. Discovery The parties have not yet arrived at an agreement regarding electronic discovery, but agreed to discuss the issue. The parties anticipate negotiating and entering into a Protective Order and a Proposed Order Governing Discovery Matters and the Production of Electronically Stored Information. The parties agree that discovery will be produced on a rolling basis. The parties agree that the presumptive limit of ten depositions for each party, as set forth in Federal Rule of Civil Procedure 30(a)(2), likely will be insufficient to develop a full evidentiary record in this action. Accordingly, the parties will meet and confer and attempt to reach agreement on the appropriate number of depositions and will submit a joint proposal for the Court's approval at a later time. The parties agree to work in good faith to resolve any discovery issues that arise. 1. Proposed Discovery Schedule The parties' agreed proposed schedule and discovery plan is set forth as follows: Event Date Initial Written Discovery Served January 31, 2019 Initial Disclosures January 31, 2019 Defendants' Answer to Third Amended February 8, 2019 Complaint Initial Document Production Substantially June 3, 2019 Complete Follow Up Written Discovery Served July 15, 2019 Follow Up Production Substantially Complete October 15, 2019 3 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 4 of 7 PageID #:1879 Deadline to Join Other Parties and Amend November 29, 2019 Pleadings Close of Fact Discovery February 7, 2020 Expert Reports Served March 15, 2020 Responsive Expert Reports Served April 15, 2020 Rebuttal Expert Reports Served May 15, 2020 Close of Expert Discovery June 30, 2020 Summary Judgment and Daubert Motions July 31, 2020 Summary Judgment and Daubert Oppositions August 31, 2020 Summary Judgment and Daubert Reply Briefs September 30, 2020 Trial Date To be Set by the Court 2. Class Certification Briefing Schedule Lead Plaintiff will move for Class Certification pursuant to the schedule set forth below. Event Date Motion for Class Certification June 7, 2019 Deposition of Class Representative Between June 14 and July 15, 2019 Response to Motion for Class Certification August 8, 2019 Reply in Further Support of Class Certification September 16, 2019 III. SETTLEMENT AND REFERRALS A. Settlement Discussions A mediation session was held on September 20, 2018 before the Honorable Layn Phillips (retired) in an effort to resolve this case. The mediation was not successful. Now that the Court has ruled on Defendants' motion to dismiss, the parties intend to schedule a second mediation session prior to completion of initial document discovery. If that mediation is unsuccessful, the 4 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 5 of 7 PageID #:1880 parties may seek the Court's permission to adjust the discovery and filing deadlines set forth above. B. Settlement Conference The parties do not request a settlement conference with the Court at this time. C. Magistrate Jurisdiction The parties wish to proceed before Your Honor and do not consent to the jurisdiction of the Magistrate Judge at this time. Dated: January 3, 2019 Respectfully submitted, /s/ Carol C. Villegas Carol C. Villegas (admitted pro hac vice) Jonathan Gardner (admitted pro hac vice) Theodore J. Hawkins (admitted pro hac vice) LABATON SUCHAROW LLP 140 Broadway New York, New York 10005 (212) 907-0700 jgardner@labaton.com cvillegas@labaton.com thawkins@labaton.com /s/ Mark S. Willis Mark S. Willis LABATON SUCHAROW LLP 1050 Connecticut Avenue, NW, Suite 500 Washington, D.C. 20036 202-772-1880 mwillis@labaton.com Lead Counsel for Lead Plaintiff Utah Retirement Systems /s/ Mark R. Miller Kenneth A. Wexler Mark R. Miller WEXLER WALLACE LLP 55 West Monroe, Suite 3300 Chicago, IL 60603 (312) 346-2222 kaw@wexlerwallace.com 5 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 6 of 7 PageID #:1881 mrm@wexlerwallace.com Liaison Counsel for Plaintiff /s/ Michael Dockterman Michael Dockterman Terance A. Gonsalves Jeffrey W. Sanford mdockterman@steptoe.com tgonsalves@steptoe.com jsanford@steptoe.com STEPTOE & JOHNSON, LLP 115 S. LaSalle Street, Suite 3100 Chicago, Illinois 60603 (312) 577-1300 Attorneys for Defendants Adtalem Global Education Inc. f/k/a DeVry Education Group, Inc., Richard M. Gunst, Patrick J. Unzicker, and Timothy J. Wiggins /s/ Sean M. Berkowitz Sean M. Berkowitz Eric R. Swibel LATHAM & WATKINS LLP 330 North Wabash, Suite 2800 Chicago, IL 60611 Telephone: (312) 876-7700 sean.berkowitz@lw.com eric.swibel@lw.com Attorneys for Defendant Daniel Hamburger 6 Case: 1:16-cv-05198 Document #: 116 Filed: 01/03/19 Page 7 of 7 PageID #:1882 CERTIFICATE OF SERVICE I hereby certify that on January 3, 2019, I caused the foregoing to be filed with the Clerk of the Court using the Court's CM/ECF system. Notice of this filing will be sent to all counsel of record through the Court's CM/ECF system. Dated: January 3, 2019 /s/ Theodore J. Hawkins Theodore J. Hawkins 7