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Class Action Defense Cases—In re The Reserve Fund: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District of Pennsylvania

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Class Action Plaintiffs, and Transfers Actions to Eastern District of Pennsylvania

Sixteen (16) class actions – 13 in New York, and one each in California, Massachusetts and Minnesota – were filed against Primary Fund, The Reserve and various related Reserve entities, and other defendants, alleging “relief under various federal securities laws and/or common law or a shareholder suing derivatively on behalf of the Primary Fund.” In re The Reserve Fund Securities & Derivative Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. February 10, 2009) [Slip Opn., at 1]. Defense attorneys 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; plaintiff in the Minnesota class action opposed the motion, and plaintiff in the Massachusetts class action also opposed the motion and alternatively asked the Judicial Panel to delay ruling on the motion until after the district court had ruled on a pending motion to remand the class action to state court. Id. The Judicial Panel rejected plaintiffs’ objections and granted the motion to centralize the class action lawsuits, explaining that (1) even if the Minnesota and Massachusetts class actions are “narrower” than the other class actions, pretrial coordination will serve the salutary purposes of Section 1407, and (2) plaintiff in the Massachusetts class action can file a motion for remand in the transferee court. Id., at 2. The Panel concluded that the actions involve common questions of fact and that centralization would “eliminate duplicative discovery; avoid inconsistent pretrial rulings, including on the issue of class certification; and conserve the resources of the parties, their counsel and the judiciary.” Id., at 1-2. The Panel also agreed that the Southern District of New York was the appropriate transferee court, id., at 1; 13 of the class actions were already there, and The Reserve is headquartered in New York, id., at 2. Accordingly, the Judicial Panel ordered the class actions outside of that district transferred there, id., at 2.

Download PDF file of In re The Reserve Fund Securities & Derivative Litigation Transfer Order