Broker-Dealer Litigation - Greenberg Traurig LLP

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Lane v. Page, 272 F.R.D. 558 (D.N.M. 2011).
The shareholders of an acquired company brought a putative class action challenging the
merger under federal securities law by alleging that a proxy statement issued in connection with
the merger contained material misrepresentations and omissions. The defendants conceded all
elements of Rule 23 except the named plaintiff’s adequacy as a class representative. The
defendants maintained that the named plaintiff was a convicted felon, financially irresponsible,
and lacked credibility and candor, and therefore could not adequately protect the interests of
absent class members. The court found, however, that while the defendants had voiced some
legitimate concerns about the plaintiff’s ability to act as a fiduciary, most of the cited
transgressions were old, and his conduct in prosecuting the case demonstrated his ability to
vigorously and faithfully protect the interests of the class. Accordingly, the court granted class
certification.
Bacon v. Stiefel Labs., Inc., 275 F.R.D. 681 (S.D. Fla. 2011).
Participants in ERISA plan and holders of shares in a closely-held corporation brought a
putative class action alleging a fraudulent scheme on the part of the corporation’s board members
to conceal the value of the participants’ shares and to benefit improperly from the participants’
premature sale of those shares. The district court denied the plaintiffs’ motion for class
certification, holding that the plaintiffs failed to meet either the predominance or superiority
requirements of Rule 23. The court concluded that individualized proof of reliance was
necessary, and therefore common issues did not predominate. The court also found superiority
lacking, as several would-be class members had an interest in controlling the separate, personal
litigation they brought raising the same claims.
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4. Venue, Pendent Jurisdiction Removal and Other Issues
McIntyre Mach., Ltd. v. Nicastro, 131 S.Ct. 2780 (2011).
In a suit brought by a New Jersey worker injured while using a metal-shearing machine
against the British manufacturer of the machine, which had been sold to the plaintiff’s employer
through a United States distributor, the New Jersey Supreme Court had held that personal
jurisdiction existed over the manufacturer because it knew or reasonably should have known that
its products were distributed nationwide and might reach any of the fifty states, where they could
cause injury. In splintered opinions, six Justices voted to reverse. Framing the issue as whether
the court had jurisdiction over an entity that was not present in the forum and had not consented
to jurisdiction, Justice Kennedy’s plurality opinion (joined by Chief Justice Roberts and Justices
Scalia and Thomas) asked whether the defendant’s activities “manifest an intention to submit to
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