Eric G. Fikry and Lauren E. O’Donnell
On Oct. 3, 2016, the Financial Crimes Enforcement Network assessed a civil monetary penalty of $12 million against CG Technology d/b/a Cantor Gaming, pursuant to the Bank Secrecy Act and its regulations, with which casinos are required to comply. In addition to the fine, Cantor is required to undertake remedial compliance measures and pay $16.5 million to the U.S. Department of Justice to settle a parallel investigation (a portion of the FinCEN fine was offset by this payment).
Cantor operates race and sports books in Nevada, offers mobile gaming within Nevada, and provides gaming technology to casino customers globally. It is licensed to operate at prominent Nevada establishments, such as the Hard Rock, Tropicana, Venetian and Palms. Its books are associated with high dollar value wagering and are popular with professional gamblers. Continue reading “Lessons from FinCEN’s Latest Gaming Enforcement Action”
A Discussion of the Third Circuit’s Recent Decision in Chassen
Michael A. Rowe
In Chassen v. Fid. Nat’l Fin., Inc., 2016 U.S. App. LEXIS 16489 (3d Cir. N.J. Sept. 8, 2016), Plaintiffs represented a putative class of New Jersey real estate purchasers and refinancers who were allegedly overcharged fees in connection with the recording of their deeds and mortgage instruments. Plaintiffs alleged that Defendants charged them more than it cost to record these documents with the county clerk and pocketed the difference. Plaintiffs also alleged that the class claims totaled over $50 million.
In 2009, Plaintiffs filed a complaint in the U.S. District Court for the District of New Jersey alleging both breach of contract and violation of New Jersey law. Defendants moved to dismiss some of these claims and raised various affirmative defenses. Defendants did not seek to compel arbitration based upon arbitration clauses contained in contracts with Plaintiffs. The parties litigated the case for two and a half years, focusing primarily on class certification, during which the parties conducted broad discovery and filed several motions on the merits. Continue reading “Arbitration of Claims to Avoid Costly Putative Class Action Lawsuits”
The All-Important Factors for Class “Numerosity”
On September 13, 2016, the United States Court of Appeals for the Third Circuit set forth for the first time a “non-exhaustive list” of factors for a District Court judge to consider when determining whether joinder would be impracticable for purposes of the class action “numerosity” requirement. In re Modafinil Antitrust Litigation, No. 15-3475 (3d Cir. Sept. 13, 2016). These factors include (1) judicial economy, (2) the claimants’ ability and motivation to litigate as joined plaintiffs, (3) the financial resources of class members, (4) the geographic dispersion of class members, (5) the ability to identify future claimants, and (6) whether the claims are for injunctive relief or for damages. Id. at *31-32.
In order to gain class certification, a putative class must satisfy a number of requirements, including that “the class is so numerous that joinder of all members is impracticable.” F.R.C.P. 23(a)(1). The Rule does not define “numerous,” and it is left to the Court to decide on a case-by-case basis whether a particular putative class meets this requirement. Despite the need for individualized factual analysis, a class of 20 or fewer is generally too small and a class of over 40 is usually sufficiently numerous. In re Modafinil at *24-25. While the Court noted that “the number of class members is the starting point of our numerosity analysis,” id. at *25, the Court focused on whether joinder is impracticable. Continue reading “Judicial Economy and Joined Plaintiffs”
Jonathan M. Korn
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.