The District of Arizona recently issued a favorable decision for class action defendants, holding that plaintiffs failed to meet Rule 23(b)(3)’s requirements because the class action implicated the laws of fifty states. In Bobbitt v. Milberg, LLP, plaintiffs sought certification of a nationwide class based on state negligence and breach of fiduciary duty claims asserted against defendants for legal malpractice. Defendants had represented plaintiffs in a prior class action suit brought against VALIC for violation of federal securities laws in the sale of variable annuities (the Underlying Case). In the Underlying Case, the district court had certified a class of more than one million annuity customers located in all fifty states, but subsequently decertified the class when plaintiffs failed to meet the deadline for expert disclosures. The Ninth Circuit subsequently affirmed.
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In the malpractice action, plaintiffs sought to certify a class consisting of the same class members in the Underlying Case. Performing a thorough choice of law analysis, the court found that the law of up to fifty states applied because: 1) the place of injury is where each putative class member suffered economic loss; 2) the putative class members were domiciled across the fifty states; 3) the conduct that caused the injury occurred where counsel was located (in three separate states); and 4) the defendants had not established a relationship with the absent class members since they had not yet sent notice of the class action. As such, the court held that plaintiffs could not meet the Rule 23(b)(3) predominance requirement and denied plaintiffs’ motion for class certification.