Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Objection of Plaintiff’s Lawyers in New Jersey Class Action, but Transfers Class Actions to the District of New Jersey
Four class actions – one in New Jersey and three in New York – were filed against various defendants arising out of the allegation that “Virgin Mobile distributed a materially false and misleading registration statement and prospectus in connection with Virgin Mobile’s initial public offering.” In re Virgin Mobile Initial Public Offering (IPO) Securities Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. April 7, 2008) [Slip Opn., at 1]. Defense attorneys for certain defendants filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Southern District of New York; lawyers for plaintiffs in the New Jersey class action opposed the motion or argued that the class actions should be transferred to New Jersey. Id. The Judicial Panel granted the motion to centralize the class action lawsuits noting that centralization will inter alia “eliminate duplicative discovery[ and] prevent inconsistent pretrial rulings, especially with respect to class certification.” Id. The Panel summarized the opposition to the motion, and the Panel’s response, at pages 1-2 as follows: “Plaintiffs opposing the motion argue, inter alia, that (1) there are only a few actions involved; (2) defendants have not met their burden to show that common questions of fact are so complex and discovery so time-consuming as to overcome the burden to certain parties; (3) alternative means of coordination could be available; and (4) transfer under 28 U.S.C. § 1404 is a superior alternative. Based upon the Panel’s precedents and for the following reasons, we respectfully disagree with these arguments. These actions present overlapping putative classes with overlapping discovery. Centralizing these actions under Section 1407 will ensure streamlined resolution of this litigation to the overall benefit of the parties and the judiciary.” However, the Judicial Panel agreed that New Jersey was the appropriate transferee court, not New York, because an action is already pending there before a judge “who has the time to devote to this litigation” and because “Virgin Mobile is headquartered in New Jersey and provides a likely discovery source.” Id., at 2. Accordingly, the Panel ordered the class actions pending in New York transferred to New Jersey. Id.