Judicial Panel Agrees With Defense and Plaintiff Lawyers that Class Action Lawsuits Warranted Centralization for Pretrial Coordination Pursuant to 28 U.S.C. § 1407
Nine class action lawsuits were filed across the United States against the National Association of Securities Dealers (NASD) and Electronic Data Systems Corp., among others, alleging “breach of contract, negligence, negligent misrepresentation, defamation, and tortious interference with contract and/or business relationships” arising out of “errors in scoring the Series 7 Broker Qualification Exam, a computerized qualifying test required for anyone employed by a securities firm that wishes to register individuals as general securities representatives dealing with the public.” These errors alleged caused 1900 people who passed the test to receive failing grades. In re Series 7 Broker Qualification Exam Scoring Litig., 444 F.Supp.2d 1330, 1331 (Jud. Pan.Mult.Lit. 2006). Defense attorneys and plaintiffs’ lawyers in two of the actions moved the Judicial Panel on Multidistrict Litigation (MDL) pursuant to 28 U.S.C. § 1407 to centralize the lawsuits for pretrial purposes; no party opposed centralization, though several venues were proposed as the appropriate transferee court. Id. The Judicial Panel agreed that class action complaints contained sufficient common questions of fact to warrant pretrial coordination under 28 U.S.C. § 1407, and that centralization “will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation.” Id.
Of the various courts recommended by the defense and plaintiffs, the Judicial Panel selected the District of District of Columbia as the appropriate transferee court. Id. The Panel explained at page 1331, “The largest number of actions are pending in the District of District of Columbia (including potential tag-along actions), and relevant documents and witnesses may be found at NASD’s District of Columbia headquarters or its testing and continuing education division, which is located nearby in the District of Columbia suburbs.”