Friday, October 3, 2008
Higher Class Certification Standards in the Second Circuit
Yesterday's New York Law Journal had an article detailing the higher threshold for class certification in the Second Circuit. Among the Second Circuit cases profiled were the 2006 In re IPO Securities Litigation decision and, more recently McLaughlin v. American Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (RICO class action). The impact of those decisions has started to trickle down to decisions in the Southern District of New York in the following cases:
McCracken v. Best Buy Stores, 248 F.R.D. 162 (S.D.N.Y. 2008) (denying class certification because of individualized issues of proof in theories of breach of contract and unjust enrichment);
In re Credit Suisse First Boston Corp. (Latronix Inc.) Analyst Securities Litigation, 250 F.R.D. 137 (S.D.N.Y. 2008) (decertifying a class based on allegedly false and misleading analyst reports in light of the Second Circuit's IPO decision);
Lapin v. Goldman Sachs & Co., 2008 WL 4222850 (S.D.N.Y. Sept. 15, 2008) (certifying the class and disagreeing with the Credit Suisse case by holding that plaintiffs need not establish loss causation to invoke the presumption of reliance in a class certification motion and that the question was whether loss causation could be proven by classwide evidence--not whether that evidence was ultimately persuasive);
In re Grand Theft Auto Video Game Consumer Litigation, 251 F.R.D. 139 (S.D.N.Y. 2008) (decertifying a class based on the Second Circuit's McLaughlin decision and in light of having to determine the laws of the state where each purchase was made).