U.S. District Court Judge Aileen Cannon
A federal judge is reconsidering her rejection of a $150 million securities fraud settlement between NextEra Energy, the parent company of Florida Power & Light (FPL), and plaintiffs who accused the company of political misconduct.
Last month, attorneys for the lead plaintiffs – the City of Hollywood Police Officers’ Retirement System and the Pembroke Pines Firefighters & Police Officers Pension Fund – filed a renewed motion in the Southern District of Florida for approval of the class-action settlement. In August, Judge Aileen Cannon rejected the settlement over apparent uncertainties about the class composition and which shareholders would be eligible for damages.
But in the wake of the new motion, which defendants are not opposing, Cannon will reconsider the agreement to settle the litigation.
The alleged FPL political activities described in the shareholder lawsuit include efforts to unseat a state senator in 2020 using a “ghost” candidate to draw votes away from the Democratic incumbent. The Republican candidate won the seat in a close vote, according to the State Affairs Florida news platform, and the incumbent, Jose Javier Rodriguez went on to challenge state Attorney General James Uthmeier in this week’s general election.
The shareholder lawsuit alleged that company misstatements about the political activities, including campaign finance issues, concealed certain legal and regulatory risks facing NextEra and FPL and artificially inflated the value of NextEra securities. People and institutions that purchased NextEra stock between Dec. 2, 2021, and Jan. 30, 2023, paid inflated prices and were negatively affected by the companies’ actions, the lawsuit alleges.
According to the lead plaintiffs’ motion filed on Oct. 20, potential class members who would be notified about the proposed settlement number in the hundreds of thousands. Nearly 1,700 institutional investors sustained damages amounting to $814 million, while other investors, including individuals, suffered damages of $906 million, the plaintiffs argue.
“The claims administrator, using its experience in other securities class actions, anticipates notifying 200,000 potential class members … and expects 40,000 of those to return claim forms, of which it estimates 50% of the returned claims will be valid claims,” the plaintiffs’ motion states.
FPL did not respond to requests for comment about the litigation and the potential settlement. In filings with the U.S. Securities Exchange Commission last month, however, NextEra said there is no guarantee that Cannon would approve the settlement proposal.
“There can be no assurance as to the ultimate outcome of the 2023 securities class action lawsuit, including no assurance that the settlement agreement will be given final approval by the court,” NextEra said in the filing. “If the settlement agreement is not given final approval by the court, the defendants plan to continue to defend the securities class action lawsuit vigorously.”
NextEra also indicated that the $150 million settlement plan includes the plaintiffs’ attorney fees and costs of administering the agreement – and that NextEra’s payment would be covered by insurance and reflected on its 2026 balance sheets.
The plaintiffs’ motion said parties made substantial efforts to comply with Cannon’s concerns about the provisions of the previous settlement language.
“Lead plaintiffs have taken significant time to investigate and research the court’s concerns to adequately address the issues raised by the court,” the motion says.
