Wednesday, June 22, 2005

You Just Can’t Make Some Lead Plaintiffs Happy

Guess what, as lead counsel, we represented you for four long years and settled your case for $490 million, netting the third largest securities class action settlement ever. What’s that, you’re suing me? Sounds unbelievable, but that’s exactly what is happening right now in the Southern District of New York. No, make that the Eastern District of Missouri. You see, when Judge Marrero (S.D.N.Y.) got the former BankAmerica Lead Plaintiffs’ lawsuit on his docket, he shipped it to Missouri faster than you can say, “The Private Securities Litigation Refo….” Sorry, too slow. Of course, the Plaintiffs cried foul when they arrived, arguing that Judge Marrero was “manifestly unjust” in transferring their case to Missouri without anybody even asking him to do it (a/k/a sua sponte, but the Nugget shuns Latin-speak, as, well, it’s pretty silly unless you are the Solicitor General decked out in your morning coat).

Back to the Eastern District. Judge Nangle (E.D. Mo.) started out with the exceedingly neutral observation that “[I] am hesitant to proceed with useless acts that do nothing but take up time and cause unnecessary expense.” Sounds a little like Pat Robertson running for President again. Though of course, in “an abundance of caution,” the Court agreed to analyze the venue issue. Let’s see. The underlying BankAmerica litigation was in Missouri, where the MDL Panel centralized it years ago. A bunch of the Defendants, witnesses, and even Plaintiffs are located there. And the case is “essentially an outgrowth of the BankAmerica case, an action that has been ongoing in [Missouri] since 1999.” Maybe that’s why Judge Nangle found that “the facts are so clear and convincing and obvious, that it is easy to see” why the case got relocated from New York.

So it appears the parties will be duking this one out in the Show-Me State. It could be tough going for Plaintiffs though. After all, it appears they explained their problems to Judge Nangle at the fairness hearing way back in 2002, but got nowhere as he approved the settlement anyway. Their appeal to the Eighth Circuit didn’t work very well either. (See 350 F.3d. 747). It’s no wonder they went to New York. But alas, their escape attempt was futile, and now everyone will have to face the music in St. Louis, whatever that may hold.

You can read the decision at 2005 U.S. Dist. LEXIS 9691

Nugget: “Needless to say, this Court is hesitant to predict what an appellate court will do, but it does seem quite evident that this case will ultimately end up in the Eastern District of Missouri.”

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