2026 CO 20, 24SC644 CenturyLink v. Dean Houser

OCR transcription for search; preserved printed pages are authoritative

The opinion summaries are not part of the Colorado Supreme
Court's opinion. They have been prepared solely for the reader's
convenience. As such, they may not be cited or relied upon. If
there is any discrepancy between the language in the summary
and the opinion, the language in the opinion controls.

ADVANCE SHEET HEADNOTE
April 6, 2026

2026 CO 20

# No. 24SC644, CenturyLink v. Houser-Complaints - Sufficient Investigation- Copying of Allegations.

In this class action brought by shareholders against a corporation alleging
securities law violations, the supreme court granted certiorari to decide whether
C.R.C.P. 11(a)'s duty to conduct an objectively reasonable inquiry is satisfied when
an attorney copies information, including allegations by confidential witnesses,
from complaints in related lawsuits involving some of the same defendants.

The court now concludes that counsel must conduct a sufficient
investigation to support the allegations contained in a complaint, at least on
information and belief. The extent of the investigation required, however, is
highly fact dependent, and, therefore, a plaintiff's copying of allegations contained
in complaints in related actions does not alone violate counsel's duty under
C.R.C.P. 11(a) but rather must be considered in the context of each case. Applying
those principles here, the court further concludes that plaintiff's counsel
conducted a sufficient investigation to allow counsel to include in the amended

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complaint in this case, consistent with counsel's obligations under C.R.C.P. 11,
allegations that were contained in complaints in related actions against some of
the same defendants named here.

Accordingly, the court affirms the judgment of the court of appeals division
below.

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# The Supreme Court of the State of Colorado 2 East 14th Avenue · Denver, Colorado 80203

2026 CO 20

Supreme Court Case No. 24SC644
Certiorari to the Colorado Court of Appeals
Court of Appeals Case No. 23CA1214

Petitioners:

CenturyLink, Inc .; Glen F. Post, III; R. Stewart Ewing, Jr .; David D. Cole;
William A. Owens; Martha H. Bejar; Virginia Boulet; Peter C. Brown; W. Bruce
Hanks; Jeffrey K. Storey; Steven T. Clontz; Mary L. Landrieu; Gregory J. McCray;
Harvey P. Perry; Michael J. Roberts; Laurie A. Siegel; and Sunit S. Patel,

V.

Respondent:

Dean Houser.

Judgment Affirmed
en banc
April 6, 2026

Attorneys for Petitioners:

Wheeler Trigg O'Donnell LLP

Frederick R. Yarger

Kathryn A. Reilly

Daniel N. Guisbond

Denver, Colorado

Attorneys for Respondent:

Ranson & Kane PC

Jason P. Kane

Denver, Colorado

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Bottini & Bottini, Inc.
Francis A. Bottini, Jr.
Albert Y. Chang
La Jolla, California

Attorneys for Amicus Curiae Colorado Defense Lawyers Association:

Berg Hill Greenleaf Ruscitti LLP
Rudy E. Verner
Geoffrey C. Klingsporn
Andrew C. Fischer
Boulder, Colorado

Attorneys for Amicus Curiae Securities Industry and Financial Markets
Association:
Womble Bond Dickinson (US) LLP
Kendra N. Beckwith
Kenneth F. Rossman
Denver, Colorado

JUSTICE GABRIEL delivered the Opinion of the Court, in which CHIEF
JUSTICE MÁRQUEZ, JUSTICE BOATRIGHT, JUSTICE HOOD, JUSTICE
SAMOUR, JUSTICE BERKENKOTTER, and JUSTICE BLANCO joined.

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JUSTICE GABRIEL delivered the Opinion of the Court.

11
In this class action brought by shareholders against a corporation alleging
securities law violations, we granted certiorari to decide whether C.R.C.P. 11(a)'s
duty to conduct an objectively reasonable inquiry is satisfied when an attorney
copies information, including allegations by confidential witnesses, from
complaints in related lawsuits involving some of the same defendants.1

12 We now conclude that counsel must conduct a sufficient investigation to
support the allegations contained in a complaint, at least on information and belief.
The extent of the investigation required, however, is highly fact dependent, and,
therefore, a plaintiff's copying of allegations contained in complaints in related
actions does not alone violate counsel's duty under C.R.C.P. 11(a) but rather must
be considered in the context of each case. Applying those principles here, we
further conclude that plaintiff Dean Houser's counsel conducted a sufficient
investigation to allow counsel to include in the amended complaint in this case,
consistent with counsel's obligations under C.R.C.P. 11, allegations that were

1 Specifically, we granted certiorari to decide:

Whether C.R.C.P. 11(a)'s non-delegable duty to conduct an
objectively reasonable inquiry is satisfied when an attorney "borrows
plausibility" from a complaint in another lawsuit.

Because we do not believe that the phrase "borrows plausibility" is clear or precise,
we do not use that phrase in this opinion.

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contained in complaints in related actions against some of the same defendants
named here.

13
Accordingly, we affirm the judgment of the court of appeals division below.

## I. Facts and Procedural History

14
In 2018, Houser filed a securities class action against CenturyLink, Inc. and
Glen F. Post, III, R. Stewart Ewing, Jr., David D. Cole, William A. Owens,
Martha H. Bejar, Virginia Boulet, Peter C. Brown, W. Bruce Hanks, Jeffrey K.
Storey, Steven T. Clontz, Mary L. Landrieu, Gregory J. McCray, Harvey P. Perry,
Michael J. Roberts, Laurie A. Siegel, and Sunit S. Patel (collectively, "defendants")
in Boulder County District Court. Houser filed the complaint on behalf of all
persons and entities who had purchased or acquired CenturyLink stock pursuant
or traceable to CenturyLink's Registration Statement and Prospectus (the
"Offering Documents") issued in connection with the merger of CenturyLink,
Level 3 Communications, Inc., and their subsidiaries. Houser alleged, among
other things, that the Offering Documents were negligently prepared and, as a
result, contained untrue statements of material fact, omitted material information,
and failed to make adequate disclosures required by the applicable rules and
regulations. Houser further alleged that the Offering Documents were false and
misleading because they contained material omissions.

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15
Defendants moved to dismiss the complaint pursuant to C.R.C.P. 12(b)(5)
for failure to state a claim upon which relief can be granted. In this motion,
defendants argued, as pertinent here, that (1) as a matter of law, none of the
affirmative statements that Houser cited were misleading; and (2) the majority of
the alleged omissions were, in fact, disclosed, and the remainder were not facts
required to be disclosed.

16 Approximately thirteen months after defendants filed their motion to
dismiss and while the motion was still pending, Houser filed a notice of
supplemental authority citing In re CenturyLink Sales Practices & Securities
Litigation, 403 F. Supp. 3d 712 (D. Minn. 2019) ("CenturyLink"), a parallel securities
fraud class action lawsuit and multidistrict litigation proceeding pending in the
United States District Court for the District of Minnesota. According to Houser,
the plaintiffs in that case had alleged that CenturyLink and its executives had
made false and misleading statements regarding the purportedly widespread
practice of "cramming," which, citing the complaint in that case, the CenturyLink
court described as "adding services to customers' accounts without authorization,
deceiving customers about the prices they would be charged, and misquoting
prices by failing to disclose that 'bundles' included fees for optional services that
the customers did not need or authorize." CenturyLink, 403 F. Supp. 3d at 720.

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17 Several months later, the district court conducted a hearing on
CenturyLink's motion to dismiss, and four days after that hearing, Houser filed a
supplemental brief responding to questions that the court had asked during the
hearing. In this brief, Houser also requested leave to amend his complaint, if the
court were inclined to grant defendants' motion to dismiss. In support of this
request, Houser cited the "substantial new facts" that had come to light since the
current action was filed, as reflected in the CenturyLink case.

18
The district court, however, granted defendants' motion to dismiss with
prejudice and denied Houser's request for leave to file an amended complaint. In
so ruling, the court determined that Houser had "failed to plead with particularity
any material misstatements or omissions in violation of Section 11 or
Section 12(a)(2)" of the 1933 Securities Act.

19 Houser appealed, and in a unanimous, published opinion, a division of the
court of appeals affirmed in part, reversed in part, and remanded the case for
further proceedings. Houser v. CenturyLink, Inc., 2022 COA 37, 1 51, 513 P.3d 395,
407 ("Houser I"). Specifically, the division (1) affirmed the district court's order
dismissing Houser's claims under C.R.C.P. 12(b)(5); (2) reversed the court's order
denying Houser's motion for leave to amend the complaint as it pertained to
Houser's omissions claims based on the cramming theory; and (3) otherwise
affirmed the district court's order denying Houser's motion for leave to amend.

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Houser I, TT 50-51, 513 P.3d at 407. In support of this determination, the division
opined that it could not at that point say, as a matter of law, that Houser would be
unable to state omissions claims under sections 11, 12(a)(2), and 15 with the
addition of facts related to the cramming theory that the CenturyLink court had
found sufficient to state a plausible claim. Id. at 1 50, 513 P.3d at 407. The division
cautioned, however, that, to the extent that, on remand, Houser desired to use
allegations made by another party in a separate lawsuit, "he must plead them as
facts, not as allegations by someone else, and must do so only after reasonable
inquiry as required by C.R.C.P. 11." Id. at | 28 n.9, 513 P.3d at 403 n.9.

110 Houser then filed an amended class action complaint, individually and on
behalf of all former shareholders of Level 3 Communications, who, according to
Houser, had acquired CenturyLink stock pursuant or traceable to the CenturyLink
Offering Documents issued in connection with the merger between CenturyLink
and Level 3. Defendants included certain executive officers and directors of
CenturyLink at the time of the merger and certain executive officers and directors
of Level 3 who had joined CenturyLink after the merger.

11 In the amended complaint, Houser alleged:

Plaintiff Dean Houser ("Plaintiff"), individually and on behalf of all
others similarly situated, by Plaintiff's undersigned attorney, for
Plaintiff's amended complaint against Defendants, alleges the
following based upon personal knowledge as to Plaintiff and
Plaintiff's own acts and upon information and belief as to all other
matters based on the investigation conducted by and through

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Plaintiff's attorneys, which included, among other things, a review of
U.S. Securities and Exchange Commission ("SEC") filings by
CenturyLink, Inc. ("CenturyLink" or the "Company"), the
Company's press releases and earnings calls, analyst reports and
media reports about the Company, review of public filings in the
related cases, including State v. CenturyTel Broadband Services, LLC,
No. 02-CV-17-3488 (Minn. Dist. Ct., Cnty. of Anoka), In re CenturyLink
Sales Practices & Securities Litigation, MDL No. 17-2795 (MJD/KMM)
(D. Minn.), and Heiser v. CenturyLink, Inc., No. CV2017-008928 (Az.
Super. Ct., Cnty. of Maricopa), and discussions with plaintiffs'
counsel in those actions, and review of other publicly-available
information about CenturyLink. Plaintiff believes that substantial
additional evidentiary support will exist for the allegations set forth
herein after a reasonable opportunity for discovery.

(Footnote omitted.)

112 Houser further alleged, among other things, that the Offering Documents
were false and misleading and omitted material information regarding systemic
and ongoing illegal cramming practices at CenturyLink that existed at the time,
were known to CenturyLink's senior management, and were likely to-and, in
fact, did-have a material impact on CenturyLink's revenues and results of
operations. Specifically, Houser asserted that when the truth about the
undisclosed cramming practices became public, the price of CenturyLink's
common stock fell, thereby injuring Houser and other members of the class.

113 In support of the foregoing contentions, Houser alleged that unnamed
former employees at CenturyLink had said that cramming at CenturyLink was
"happening all the time, all day, every day" and was a "very common and
widespread" issue among customer complaints that were reported to senior

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management. Houser further alleged that "[t]he rampant overbilling" at
CenturyLink was not accidental and did not escape defendants' attention. To the
contrary, it was recorded in CenturyLink's computer systems and regularly
reported to senior management.

114 As noted above, the amended complaint also included references to a
number of other lawsuits filed against CenturyLink. For example, the amended
complaint referred to the CenturyLink case and relied on allegations made in that
case by confidential witnesses.

115 The amended complaint further referred to a lawsuit filed by the Minnesota
Attorney General against CenturyLink, captioned State v. CenturyTel Broadband
Services LLC, No. 02-CV-17-3488 (Minn. Dist. Ct., Cnty. of Anoka). The amended
complaint described and attached as exhibits four named customers' affidavits
describing alleged cramming practices that the Minnesota Attorney General had
submitted in the CenturyTel case. Houser asserted in the amended complaint that
he had obtained these affidavits from the public docket in that case.

116 The amended complaint alleged that the above-described lawsuits were
"based on extensive research as well as thousands of complaints from aggrieved
customers," all of which painted a consistent picture and made clear that
CenturyLink's cramming practices were not isolated occurrences but rather

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comprised a pervasive and systemic problem that was known to CenturyLink's
senior management.

117 Finally, the amended complaint contained allegations from a lawsuit filed
by a former employee named Heidi Heiser, who had discovered that multiple
CenturyLink customers had been billed for additional services that they did not
request or authorize. The amended complaint recited that Heiser had raised her
concerns with CenturyLink's management and ultimately filed a whistleblower
complaint against CenturyLink. Houser cited his counsel's review of public filings
in Heiser's lawsuit as one of the bases for the allegations in his amended
complaint.

118 Defendants subsequently filed a motion to dismiss the amended complaint
pursuant to C.R.C.P. 12(b)(5), arguing, as pertinent here, that Houser had based
his cramming omissions theory on "untested statements attributed to anonymous
CenturyLink employees cited in other lawsuits." According to defendants,
Houser did not allege that he or his counsel had spoken to any of these anonymous
employees, verified their statements, or taken any other actions that could
constitute a "reasonable inquiry" under C.R.C.P. 11. Defendants further
contended that Houser had "simply plagiarized" complaints filed in other actions
against CenturyLink without alleging that he or his counsel had spoken with any
of the sources who had provided the underlying facts in those cases. As a result,

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defendants argued, Houser had not conducted the reasonable inquiry required by
C.R.C.P. 11 and, therefore, he did not have a basis to make such allegations.
Accordingly, his amended complaint failed to state a plausible claim for relief.

119 The district court ultimately agreed with defendants and dismissed
Houser's amended complaint. The court began by noting that Houser had not
contended that he had spoken with the unnamed employees who had made
allegations against the defendants in the CenturyLink case. Nor had he asserted
that he had spoken with Heiser. And, the court found, the statements given by the
former CenturyLink employees in CenturyLink were "given in interviews
conducted by various attorneys, none of whom [were] Plaintiff's counsel." As a
result, in the court's view, Houser's contentions amounted to no more than that he
had conducted "painstaking research and review of the related lawsuits" and had
had discussions with plaintiffs' counsel in those cases. This, however, was
insufficient to satisfy the reasonable inquiry standard. Accordingly, the court
reviewed the viability of Houser's amended complaint by considering only the
allegations that remained after omitting the foregoing "copied" allegations, and
the court concluded that such allegations could not establish the requisite
plausibility above a speculative level.

120 Houser then appealed again, arguing that the district court had created an
unworkable "reasonable inquiry" standard and incorrectly imposed on him the

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burden to state the sources and bases for his allegations at the pleading stage.
Specifically, Houser alleged that the district court had erred by (1) failing to apply
the proper standard in deciding a C.R.C.P. 12(b)(5) motion and impermissibly
converting C.R.C.P. 11's requirement of a reasonable inquiry into a standard of
pleading; (2) failing to consider his allegations as a whole and to draw all
reasonable inferences in his favor; and (3) denying him leave to amend again
because this was his first amended complaint and there was no undue delay or
prejudice.

121 In a unanimous, published opinion, a division of the court of appeals
reversed and remanded for further proceedings. Houser v. CenturyLink, Inc., 2024
COA 96, 1 8, 559 P.3d 677, 680 ("Houser II"). In so ruling, the division concluded
that (1) if a plaintiff takes appropriate investigative steps, then the plaintiff may
incorporate allegations from confidential witnesses cited in another complaint;
and (2) in such circumstances, C.R.C.P. 11(a) does not require plaintiff's counsel to
speak directly with the confidential witnesses. Id.

122 To reach this conclusion, the division began by noting that in evaluating the
adequacy of an attorney's inquiry into the factual basis for a pleading, we have
applied an "objective reasonableness standard." Id. at | 29, 559 P.3d at 684
(quoting In re Trupp, 92 P.3d 923, 930 (Colo. 2004) ("Trupp II"). Thus, an attorney

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violates C.R.C.P. 11(a) "by failing to conduct an objectively reasonable inquiry
prior to filing a signed pleading." Id. (quoting Trupp II, 92 P.3d at 930).

123 Relying, then, on federal cases interpreting Fed. R. Civ. P. 11, the division
concluded that Houser's counsel had not violated C.R.C.P. 11 by copying
allegations, including allegations made by confidential witnesses, from the
CenturyLink complaint without speaking with those witnesses. Id. at 1 54, 559 P.3d
at 687. The division reached this conclusion for six reasons: (1) counsel had
undertaken an independent investigation, even though counsel did not speak with
the witnesses; (2) Houser had attested in good faith that the allegations were based
on personal knowledge as to him and his own acts and on information and belief
as to all other matters, based on counsel's investigation; (3) Houser had attested in
good faith that he believed that additional evidentiary support for his allegations
would exist after a reasonable opportunity for discovery; (4) another court had
already determined that the confidential witness statements that Houser had
copied into his amended complaint were sufficient to support a properly pled
complaint; (5) Houser's counsel's inquiry was objectively reasonable; and (6) the
federal cases cited by defendants regarding potential unethical behavior by
attorneys did not warrant raising the bar for plaintiffs to access the justice system.
Id. at TT 54-59, 559 P.3d at 687-88. As to the last point, the division observed that
if a plaintiff filed a complaint largely premised on fabricated witness statements

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from another complaint, then Colorado law provides for appropriate sanctions.
Id. at 1 60, 559 P.3d at 688.

124 Defendants then sought certiorari review in this court, and we granted their
petition.

## II. Analysis

125 We begin by setting forth the applicable standard of review. We then
discuss the pleading and investigation requirements set forth in our civil rules,
and we review the case law setting forth the parameters of an attorney's obligation
to conduct a reasonable investigation before making allegations in a complaint.
Finally, we apply these principles to the facts now before us.

### A. Standard of Review

126 Defendants' contentions before us require us to interpret C.R.C.P. 11. We
interpret the Colorado Rules of Civil Procedure de novo. Mason v. Farm Credit of
S. Colo., ACA, 2018 CO 46, 1 7, 419 P.3d 975, 979. In doing so, we interpret the rules
according to their commonly understood and accepted meanings. Id. Moreover,
we construe the rules liberally to effectuate their objective of securing "the just,
speedy, and inexpensive determination of every action." Id. (quoting
C.R.C.P. 1(a)).

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127
Similarly, we review de novo a district court's dismissal of a complaint for
failure to state a claim under C.R.C.P. 12(b)(5). Jagged Peak Energy Inc. v. Okla.
Police Pension & Ret. Sys., 2022 CO 54, 1 24, 523 P.3d 438, 446.

## B. Pleading and Investigation Requirements

128 The principal purpose of a complaint is to provide notice of the claims being
asserted. Kluge v. Wilson, 448 P.2d 786, 787 (Colo. 1968). C.R.C.P. 8(a)(2) sets out
the basic requirements of a claim for relief: "A pleading which sets forth a claim
for a relief whether an original claim, counterclaim, cross-claim, or a third-party
claim, shall contain ... a short and plain statement of the claim showing that the
pleader is entitled to relief . . . . " C.R.C.P. 8(e)(1) adds, "When a pleader is without
direct knowledge, allegations may be made upon information and belief."

129
C.R.C.P. 11(a), in turn, provides, in pertinent part:

Every pleading of a party represented by an attorney shall be signed
by at least one attorney of record in his individual name .... The
signature of an attorney constitutes a certificate by him that he has
read the pleading; that to the best of his knowledge, information, and
belief formed after reasonable inquiry, it is well grounded in fact and
is warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law, and that it is not
interposed for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.

130
This rule focuses on the pre-filing and pre-pleading behavior of the attorney
and personalizes the responsibility of the attorney who certified the pleading by
signing it. People v. Trupp, 51 P.3d 985, 990, 992 (Colo. 2002) ("Trupp I"). The rule

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also "safeguards the judicial process by compelling attorneys to submit pleadings
which are truthful and advance meritorious legal arguments." Stepanek v. Delta
Cnty., 940 P.2d 364, 370 (Colo. 1997).

131 The scope of a C.R.C.P. 11(a) inquiry "concerns whether the attorney (1) has
read the pleading in question; (2) has undertaken reasonable inquiry into the
pleading's factual and legal assertions; and (3) possessed a proper purpose in
filing the pleading." Trupp I, 51 P.3d at 991. The inquiry does not, however, turn
on the outcome of a case. Id. Rather, "it turns on whether the attorney met the
reasonable inquiry and proper purpose threshold in preparing and filing the
pleading." Id.

132 Bad faith is not a prerequisite of a C.R.C.P. 11 violation. Trupp II, 92 P.3d at

930\. Accordingly, an attorney may violate C.R.C.P. 11(a) solely by failing to
conduct an objectively reasonable inquiry before filing a signed pleading. Id.

## C. Objectively Reasonable Inquiry

133 Defendants essentially argue that Houser's counsel did not conduct an
objectively reasonable inquiry when drafting the amended complaint because
counsel (1) copied allegations and information from complaints in other cases
without personally verifying or corroborating such allegations and information
and (2) did not speak with any of the confidential witnesses cited in the other cases
before copying their allegations into the amended complaint here. As a result,

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defendants contend, Houser's counsel failed to comply with C.R.C.P. 11, and,
therefore, the division's decision should be reversed.

134 Colorado case law discussing the parameters of an attorney's C.R.C.P. 11(a)
obligation to conduct an objectively reasonable inquiry appears to be limited. In
Trupp II, 92 P.3d at 930-32, we considered whether an assistant attorney regulation
counsel had conducted a reasonable investigation before filing a complaint
alleging that an attorney had violated the Colorado Rules of Professional Conduct
by not paying child support. We observed that before filing her complaint,
counsel, either directly or through an investigator, had reviewed the intake file,
spoken several times with the respondent attorney and a number of others with
relevant information, reviewed the current and prior child support orders and
records of the respondent attorney's payments, independently calculated the
arrearages, and researched case law. Id. at 931. In those circumstances, we
concluded that no evidence established that regulation counsel had failed to
investigate either the facts or the law or had misrepresented the facts or law in her
complaint. Id. at 931-32. Accordingly, we determined that the presiding
disciplinary judge had abused his discretion in concluding that regulation counsel
had violated C.R.C.P. 11. Id. at 932.

135 Federal courts construing Fed. R. Civ. P. 11 appear to have addressed the
objectively reasonable inquiry requirement of that rule more frequently than we

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have addressed the analogous requirement in C.R.C.P. 11, and because C.R.C.P. 11
closely parallels Fed. R. Civ. P. 11, compare Fed. R. Civ. P. 11(b)(3) (requiring
reasonable inquiry), with C.R.C.P. 11(a) (same), we deem it appropriate to look to
federal case law for guidance, see Trupp I, 51 P.3d at 990 ("We consider federal
precedent when our rule is similar to the federal rule.").

136 Federal courts addressing whether counsel who had not independently
verified allegations in a complaint had satisfied Fed. R. Civ. P. 11's reasonable
investigation requirement have reached varying conclusions, depending on the
particular facts of each case.

137 For example, in In re Teva Securities Litigation, 671 F. Supp. 3d 147, 164-66
(D. Conn. 2023), several plaintiffs who had opted out of a class action settlement
brought direct actions concerning the same securities fraud allegations involving
Teva Pharmaceutical Industries, Ltd. and others that underlay the class action. In
their complaints in the direct actions, the plaintiffs had "recycle[d]" several
allegations raised in the class action and in an action brought by state attorneys
general, some of which contained allegations made by confidential witnesses. Id.
at 191, 193. Although the direct action complaints were modeled on the class
action, they also raised new claims and added new defendants. Id. at 166.

138 The defendants moved to dismiss, contending that the direct actions'
"wholesale lifting" of allegations from the other actions did not constitute the

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reasonable investigation required by Fed. R. Civ. P. 11. Id. at 191. Ultimately, the
district court rejected that contention and concluded that the direct action
complaints complied with Fed. R. Civ. P. 11. Id. at 192-93. In reaching this
conclusion, the district court observed that (1) the state attorneys general's
allegations "were the product of an intensive, multi-year investigation," and it was
reasonable for the direct action plaintiffs to rely on a governmental investigation
because "such information may have more 'evidentiary support""; (2) counsel for
the direct action plaintiffs had investigated the complaints on which counsel had
relied; (3) it was proper for counsel for the direct action plaintiffs to reassert
allegations brought in complaints drafted by experienced counsel or
governmental investigators and counsel; and (4) each of the direct action
complaints identified the sources that counsel had investigated and attested in
good faith that discovery would provide evidentiary support for the allegations
pled on information and belief. Id. (quoting de la Fuente v. DCI Telecomms., Inc.,
259 F. Supp. 2d 250, 260 (S.D.NY. 2003)). According to the court, "Rule 11 requires
nothing more." Id. at 193. And that rule specifically did not "require counsel to
certify that counsel has spoken with the confidential witnesses and knows who
they are." Id.

139 In Garr v. U.S. Healthcare, Inc., 22 F.3d 1274, 1277-79 (3d Cir. 1994), in
contrast, the court affirmed the district court's imposition of sanctions on two

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plaintiffs' attorneys who had copied allegations from a complaint filed in a
separate securities action. The court noted that the attorneys had relied only on a
newspaper article, another complaint, and another attorney's research without
making any effort to examine the materials that the other attorney had assembled
and without justifying their failure to have done so. Id. at 1280. According to the
court, no evidence suggested that the other attorney would have declined to share
the materials with them, and the other attorney's office was a short distance from
the plaintiffs' attorneys' offices. Id. In addition, the materials on which the other
attorney had relied were all publicly accessible. Id. And there were no time
constraints requiring the attorneys to act on an expedited basis. Id.

140
The court added, however:

A signer's obligation personally to comply with the requirements of
Rule 11 clearly does not preclude the signer from any reliance on
information from other persons. .. . Thus, in CTC Imports and Exports,
we stated that a determination of whether there has been "a
reasonable inquiry may depend on . .. whether [the signer] depended
on forwarding counsel or another member of the bar."

Id. at 1278-79 (second omission and alteration in original) (quoting CTC Imports &
Exports v. Nigerian Petroleum Corp., 951 F.2d 573, 578 (3d Cir. 1991)). The court
further observed that a court "must consider all the material circumstances in
evaluating the signer's conduct." Id. at 1279.

141 Finally, in In re BankAtlantic Bancorp, Inc. Securities Litigation, 851 F. Supp. 2d
1299, 1309 (S.D. Fla. 2011), the court addressed, among other things, the propriety

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of class counsel's relying on statements made by confidential witnesses to
investigators employed by counsel's law firms. There, the defendants argued that
class counsel had violated Fed. R. Civ. P. 11(b)(3) by falsely attributing factual
assertions to confidential witnesses and by failing to make a reasonable inquiry to
determine whether such assertions were true and properly attributable to those
witnesses. Id. at 1309-10. The defendants also pointed out that four of the
confidential witnesses had disavowed making some of the assertions attributed to
them and one witness denied providing information to class counsel. Id. at 1310.
142 In response, class counsel asserted that investigators at their law firms had
interviewed the confidential witnesses and that counsel had supervised the
investigative efforts, provided the investigators with proposed points of inquiry,
and reviewed the notes and memoranda prepared by the investigators. Id. at 1311.

143 On these facts, the court concluded that the inquiry that class counsel had
conducted was not unreasonable under the circumstances. Id. In reaching this
conclusion, the court, citing Garr, 22 F.3d at 1280, noted that "an attorney has a
non-delegable duty to analyze the facts and law that support a pleading or motion,
not necessarily to personally gather those facts." BankAtlantic, 851 F. Supp. 2d at
1311. Accordingly, the court found that the fact that some of the witnesses' later
deposition testimony contradicted the assertions attributed to them in the
consolidated complaints did not, without more, warrant a conclusion that class

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counsel had violated Rule 11. Id. at 1311-12. In the court's view, any such
discrepancies created only credibility questions. Id. at 1312. The court did
conclude, however, that class counsel's inclusion of assertions attributed to one
witness violated Rule 11 because that witness did not work for BankAtlantic's
credit department for years prior to or during the class period, and, therefore, a
reasonable inquiry by class counsel would have revealed that the factual
contentions attributed to this witness lacked adequate evidentiary support. Id. at
1313-14.

144 With this case law in mind, we turn to the facts now before us.

## D. Application

145 Defendants contend that it was improper for Houser to copy allegations
from other complaints against CenturyLink without interviewing the witnesses on
whose statements the allegations were based. We do not believe that our civil
rules or the above-described case law support so unbending a rule.

146 As noted above, C.R.C.P. 8(a) makes clear that the purpose of a complaint is
notice. Subject to exceptions admittedly not at issue here, see C.R.C.P. 9(b)
(indicating matters that must be alleged with particularity), a plaintiff need only
set forth "a short and plain statement of the claim showing that the pleader is
entitled to relief," C.R.C.P. 8(a)(2). Moreover, our rules expressly provide that a
party may plead on information and belief. C.R.C.P. 8(e)(1).

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147 In light of the foregoing, and recognizing that the extent of investigation
necessary in a given litigation is highly fact dependent, we decline to adopt a
bright-line rule precluding a party from copying allegations in related litigation
unless counsel speaks to the witnesses whose statements supported such
allegations. It simply may not be possible for counsel to do so. Instead, we
conclude that counsel must conduct a sufficient investigation to support the
allegations contained in a complaint, at least on information and belief.

148 Here, we agree with the division that Houser's counsel conducted a
sufficient inquiry. Houser's counsel stated in the amended complaint that their
investigation included talking to plaintiffs' counsel in the other related cases
involving CenturyLink. Houser's counsel further alleged that counsel had
reviewed (1) publicly available filings in the related cases, including documents
concerning the whistleblower's testimony and witnesses' testimony in other cases
in which courts had determined that ample evidence supported the plaintiffs'
claims; (2) investigations by state attorneys general; (3) SEC filings by
CenturyLink; (4) CenturyLink's press releases, earning calls, and analyst reports;
and (5) media reports about CenturyLink. Houser's counsel also attached to the
amended complaint affidavits from four named customers describing their
experiences with CenturyLink. In our view, these efforts, which largely paralleled
those found sufficient by the court in Teva, 671 F. Supp. 3d at 192-93, satisfied

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C.R.C.P. 11(a)'s reasonable inquiry requirement, even if counsel did not personally
speak with the witnesses whose allegations counsel copied.

149 Such a conclusion is fully consistent with the above-described purposes of
both C.R.C.P. 8 and 11, which are to provide a short and plain statement showing
that the pleader is entitled to relief, C.R.C.P. 8(a), and to set forth a plausible claim
for relief after conducting a reasonable investigation of the facts and law,
C.R.C.P. 11(a); see also Warne v. Hall, 2016 CO 50, 1 24, 373 P.3d 588, 595 (adopting
the plausibility standard for motions to dismiss for failure to state a claim). Such
a conclusion also recognizes that, in many cases, essential facts are in the hands of
civil defendants and may not be available to plaintiffs absent a fair opportunity for
discovery after setting forth a plausible claim for relief, which is one reason that
C.R.C.P. 8(e)(1) expressly authorizes counsel to plead on information and belief.
150 To conclude otherwise, as defendants would have us do, would
dramatically raise the standard for sufficient pleading in a case like this. It would
essentially require plaintiffs to set forth substantial evidence in their complaint
before they have had an opportunity to conduct reasonable discovery. And it
would also require plaintiffs to recite in their complaint all that their counsel did
to investigate the allegations made in the complaint. Our civil rules, however, do
not establish such requirements, and we will not impose them by judicial fiat.

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151
51 Simply stated, our pleading rules and C.R.C.P. 11 exist to ensure fair notice
to defendants of the claims being asserted against them and that plaintiffs conduct
reasonable investigations before filing suit, so that plaintiffs' claims are plausibly
supported by the facts and the law. In our view, these rules adequately protect
the interests of all parties in a litigation, and we perceive no reason to require either
more or less from plaintiffs.

152 In reaching our conclusion today, we are unpersuaded by defendants'
argument that our opinion will allow plaintiffs in Colorado "to wholesale copy
complaints from other lawsuits without personally investigating the facts alleged
in them" and will leave Colorado courts in cases involving borrowed allegations
with no ability to enforce C.R.C.P. 11's duty to investigate, because the attorney
who investigated the claims will be absent and beyond the jurisdiction of
Colorado's procedural and ethical rules. Contrary to defendants' assertions, our
opinion requires the reasonable investigation mandated by our civil rules. In
addition, we are confident that Colorado courts have all of the tools necessary to
hold accountable attorneys who file pleadings in Colorado that violate Colorado
procedural and ethical rules.

153 We likewise are unpersuaded by defendants' suggestion that opinions like
ours today have caused (and presumably will continue to cause) securities class
actions to skyrocket in state courts. We are not convinced by defendants'

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suggestion that any increase in the number of securities class actions pending in
state courts is attributable to judicial decisions allowing meritless actions to
proceed. To the contrary, we believe that trial courts in this state and others have
served -and we have every confidence will continue to serve-as appropriate
gatekeepers to ensure that lawsuits that do not satisfy the requirements to survive
motions to dismiss will be resolved properly and expeditiously.

## III. Conclusion

154 For these reasons, we conclude that counsel must conduct a sufficient
investigation to support the allegations contained in a complaint, at least on
information and belief. The extent of the investigation required, however, is
highly fact dependent, and, therefore, a plaintiff's copying of allegations contained
in complaints in related actions does not alone violate counsel's duty under
C.R.C.P. 11(a) but rather must be considered in the context of each case.

155 Applying these principles here, we further conclude that Houser's counsel
conducted a sufficient investigation to allow counsel to include in the amended
complaint in this case, consistent with counsel's obligations under C.R.C.P. 11,
allegations that were contained in complaints in related actions against some of
the same defendants named here.

156 Accordingly, we affirm the judgment of the division below.