The court in In re Monster Worldwide, Inc. Securities Litigation, No. 07 Civ. 2237, 2008 WL 2721806 (S.D.N.Y. July 14, 2008), rejected as insufficient a proposed class representative due to “inadequate familiarity with, and concern for, the litigation.” Id. at *3. Plaintiffs had filed a putative securities fraud class action against Monster Worldwide based on alleged stock option backdating practices and related accounting issues. In the course of ruling on plaintiffs’ motion to certify a class of investors for this case, the District Court for the Southern District of New York examined whether the two named plaintiffs satisfied the basic requirements of Rule 23 of the Federal Rules of Civil Procedure, including whether they would be adequate representatives for the class. Id. at *2.
The defendants had deposed the co-chairman of the Steamship Trade Association-International Longshoremen's Association Pension Fund (the “Fund”), one of the named plaintiffs in the case. During that deposition, the witness testified that he was the person at the Fund with the most knowledge about the lawsuit. Upon reviewing the deposition transcript, the court found that the witness “did not know the name of the stock at issue in this case, did not know the name of either individual defendant, did not know whether [the Fund] ever owned Monster stock, . . . did not know whether he had ever seen any complaint in the action,” and was ignorant of various other matters pertinent to the litigation. Id. at *4. Even the second witness designated by the Fund supposedly to “mitigate the damage” of the first witness’s “appalling testimony” admitted that he had only learned about the litigation a week before his deposition. Id.
In a strongly worded opinion, the court rejected the Fund as a class representative, declaring that it refused to be “a party to this sham.” Id. It was clear to the court that this plaintiff had “no interest in, genuine knowledge of, and/or meaningful involvement in [the] case” and was in effect a “willing pawn of counsel.” Id. Ultimately, the court concluded that the other proposed representative did not suffer from these same deficiencies and certified the class. Id. at*4, *8.