Category: District of New Jersey Decisions
Class Decertified Where Vast Majority of Members Sustained No Ascertainable Loss
Adrienne C. Rogove
With respect to the typicality requirement, the Court found that the named plaintiff was one of “relatively few” customers who actually suffered an adverse consequence due to the form lease contract entered into with Public Storage. Since the vast majority of class members did not suffer an adverse consequence, the claims of the named plaintiff were not typical of the class members, and therefore the typicality requirement was not met.
The Court also found that the “predominance” requirement could not be met because questions of fact common to class members no longer predominated over questions affecting only individual claims. Finally, because discovery revealed that only 29 class members might be able to assert a viable claim under TCCWNA, the “numerosity” requirement of Rule 23 likewise could not be met.
The decision of the Court in Martinez-Santiago left only the named plaintiff with potentially viable claims, thereby continuing to chip away at the prospect of successful class action suits against corporate entities, and large attorneys’ fee awards to class action counsel, in suits where the class cannot meet the requirements of Federal Rule of Civil Procedure 23.
Successful Federal Court Practice
District Court of New Jersey Holds No Duty Under FDCPA to Warn of Tax Consequences for Debt Settlement
Jonathan M. Robbin and Kyle E. Vellutato
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New Jersey Federal Court Rules In Favor Of Blank Rome Client In Mutual Fund Fee Trial
On August 25, 2016, after a 25-day non-jury trial, Judge Peter Sheridan of the United States District Court of New Jersey issued a 159-page opinion in favor of Blank Rome’s client AXA Equitable Funds Management Group and AXA Equitable Insurance Company (“AXA”) dismissing with prejudice all of Plaintiffs’ claims under the §36(b) of the Investment Company Act of 1940. Blank Rome served as co-counsel with Milbank, Tweed, Hadley & McCloy LLP.
Plaintiffs brought this action on behalf of mutual fund investors who are contract holders to variable annuity products with AXA. Plaintiffs alleged that the Board of Trustees, who was charged with overseeing the mutual funds, breached its fiduciary duty by approving service contracts that charged excessive management and administrative fees. Plaintiffs’ damage claim was in excess of $550 million and a finding in favor of Plaintiffs would have resulted in a complete alteration of AXA’s fee structure. The case was closely watched within the mutual fund industry, due in part to Plaintiffs’ challenge to AXA’s use of “manager of managers” structure, which is common throughout the industry and the subject of a number of other pending lawsuits. The Court held that Plaintiffs failed to meet their burden to demonstrate that AXA breached their fiduciary duty or show any actual damages.
The Blank Rome team was led by Jonathan Korn with assistance from Jaime Nucifora. A copy of the decision can be reviewed here.