Fed. Sec. L. Rep. P 94,481 Hilda Herbst v. International Telephone and Telegraph Corporation

Before DANAHER* LUMBARD and Judges. Circuit MULLIGAN, Judge: LUMBARD, Circuit appeal from the District of This Con- Telephone necticut International Telegraph (ITT) Corporation brings May before directors in its again important questions con- us once cerning ac- the administration is- difficult and more first tions. Judge Blumenfeld’s sue is whether Chief May order of which held that may this case be maintained as a class appealable action is this time. second judge issue is whether the was holding. correct in so holdWe that the appealable order is and that the district Washington, correctly D. Schafer, III, decided H. that a class ac- John Covington proper. Lister, Bur- (Charles E. C. * meneed, chosen District of Col- of tlie Circuit Senior designation. sitting by serve his estate. Circuit, umbia Ireland, Jr., director, died T. 1. One Charles com- the time at about represented

I. stock. ITT that it did not hold common stock Hartford Alleging acquire any that it acquisition of Hart- controversial2 property common stock cash or other (Hart- Company ford Fire Insurance ford) voting than ITT af- stock that would provisions of the violated several exchange. fect the tax-free nature of the Act of 1933 the Securi- Securities representations claims that these Herbst Exchange ties Act of 1934 as well concerning the ex- tax status of the and 15c-2 of Rules 10b-5 Securities change misleading were false and Exchange Commission, Hilda Herbst in that fact ITT did Hartford com- own September in 1972. initiated this by acquired mon stock it which had cash sought damages or complaint, which The voting property by or other than its rescission, alleged that Herbst had stock. 3 Hartford common owned shares exchanged for 100 April stock which she In 1969 ITT entered into a preferred merger agreement ITT cumulative shares with Hartford. Sev- (with stock, N series prior convertible agreement, $2.25 eral months voting rights). In connection with purchased approximately ITT had 1.7 exchange, given prospectus a Herbst was million shares or about Hart- 8% May 26, dated Herbst admitted 1970. ford common stock. In connection with August subsequent in a affidavit that proposed sought merger ITT from preferred 4, 1970, the ITT stock she sold (IRS) the Internal Revenue Service a exchange. ruling which she in the received merger that the would be a tax- reorganization. free The held IRS prospectus stated that it was merger reorganiza- the tion, would be a valid opinion ITT and of counsel for merger’s prior if consumma- exchange ac- offer if ITT in its tion, unconditionally disposed ITT of the outstanding quired at least 80% shares of Hartford common it had stock ac- and if ITT Hartford common stock acquired.4 21, 1969, On October ITT re- except quired no Hartford common stock supplemental ruling, ceived a IRS which voting stock, then in for ITT proposed stated that a sale contract of gain share- loss to the Hartford bank, between ITT and an Italian Me- recognized on their ex- holders be diobanca Finanziaro-S. BancadiCredito change preferred ITT stock for p.A. (Mediobanca), in would result would be disposition their the ITT stock basis ITT’s unconditional of its previous Hartford shares. in the Hartford basis days agreed Department Italian bank. Two later unsuccess ITT 2. The tried Justice permanent injunction. injunction against fully gain preliminary BNA Securities Regulation Reporter, merger. & Law June Unit the Hartford Insurance-ITT Corp., at A-6. Tel. Tel. ed v. International States Subsequent argument (Timbers, case, F.Supp. (D.Conn.1969) together J.). suits Internal Revenue revoked the with Service This case ruling against mergers gave the Canteen revenue it ITT’s with connection merger Corporation Corporation with the of ITT and the Hartford and the Grinnel by eventually Company. says decree. Fire settled consent Insurance ITT were judicial Tel. & will seek v. International review of the revocation. See United States (D.Conn.1972), F.Supp. N.Y.Times, 7,1974, March 1. Tel. col. States, nom., Nader v. United aff’d mem. sub complaint stated that Herbst owned 35 L.Ed.2d U.S. by 200 shares. A later affidavit Herbst (1973). stated that she owned 100 shares. appears complaint to be in this case Apparently, stock, complaint filed the Hartford which evi- based on a on June dently acquired cash, had New York been be District of Southern Exchange Commission, sold so that the Hartford stock ITT owned Securities merger exchanged charged Hart- after would have been ITT course unregistered “solely” voting merger securities ITT Internal ford sold for"' stock. below) 368(a) (1) arrangement (discussed (B). an Revenue § Code of its Me- II. ITT and between The contract signed on November diobanca years, passed In the last few have time Mediobanca At same appealability of district bankers, Freres Lazard ITT’s investment orders which held that a signed agreement, (Lazard), & Co. in could not maintained but that the alleges saw the IRS never which Herbst plaintiff pro dividual claim of the could ruling. Herbst claims it made its before developed the ceed to trial. We reading to- contracts the two doctrine, such “death knell” which makes gether apparent did that ITT it becomes purposes appeal an order “final” for Hartford stock to Medioban- sell under 28 U.S.C. 1291 the individual § hold- Mediobanca was ca ing that in fact but claim is will not so small that, fee, ITT’s stock proceed upon it first an We alone. stock, held while Mediobanca nounced this doctrine Eisen v. Car of owner- and benefits tained risks Jacquelin, lisle & F.2d 119 including right ship and to dividends 1966), denied, 1035, cert. 386 U.S. 87 S. profits upon sale. losses 1487, (1967) (Eisen L.Ed.2d Ct. merger I), never be- where the district court dismissed The ITT-Hartford effective, for in December class action but came allowed individual said, of Connect- claim continued. the Insurance Commissioner We $70 plan. disapproved safely ITT then lawyer “We can competence icut assume that no arrangements going Hartford to offer is made undertake this exchange voluntary complex costly case shareholders to recover $70 preferred stock. appeal for ITT for Mr. Eisen. If stock ... exchange dismissed, was conditional This not will claims Eisen’s being adjudicated, shares appellate the Hartford never be least but no 95% given exchanged to declare ITT chose court unless will be the chance decide was proper after effective this class action was under the 80% tax exchanged. Apparently newly because amended Rule 23.” F.2d at plan identical consequences were of this merger, no effort of the aborted to those We followed this doctrine in Green v. rul- IRS made obtain further was Corp., (2d 1968), Wolf 406 F.2d 291 Cir. following ing. May hear- On denied, Singer Troster, cert. & Co. v. held ings, Commissioner the Insurance Green, U.S. S.Ct. proposed fair offer was (1969), L.Ed.2d 766 the individu where May 26 shareholders Hartford al claim was than less one thousand dol Subsequent- effective. the offer became lars. 406 F.2d at 295 n. 6. But in two common ly, more than 99% cases where individual claims were exchanged ITT were stock shares very substantial, we held that dis preferred. ap missal the class action was not started, pealable. City of New York after this case v. Interna Soon pursuant Pipe Corp., tional for an order & Ceramics Herbst moved holding (2 1969); 23(c)(1) that she 295 Cir. Caceres Interna Fed.R.Civ.P. repre- Transport Association, as a tional Air her action maintain could (2d 1970). F.2d 141 Cir. In Korn all Hartford sentative of (Korn pre- Corp. Milberg exchanged I), for ITT Franchard their stock who R., held v. Western Pacific Blumenfeld R. 443 F.2d 1301 ferred. Chief (2d holdings a we maintained our that the suit could be clarified by ruling action,5 in Korn order dismissal of and from ‘ appealable the class action was appeals. when the parties Evidently, because to noti- notice has been sent also ordered the appeal, fy of this of the the members class. initially this notice. will bear cost appealable and in class action is Cohen claim was under individual Milberg $386 ap- because the dismissal was pealable individual claim was when clearly “funda- involves issues [it] Although the death knell for $8500. mental the further conduct criticized courts doctrine been case;” . . . dismissing' only that no order feel separable mer- is also from the [and] should be action claim case; irreparable [the] appealable6 commentators who harm to a defendant terms time appealable,7 feel all such orders should be huge money spent defending to the we have reiterated our adherence appellate court class action when an may Consequently, dismissed an doctrine. appeal years later such an decide claim of because the individual requirements does conform plain- $7,482 was so substantial that Rule is evident. . tiff on that claim alone. would sue Although appeals have other courts of Shayne Square v. Madison Garden authorizing actions held orders 1974). 491 F.2d 397 Ei- appealable,8 we are not believe appealing Here the defendant is and we sen III the correct result reached holding from an order that a class action probably circuit has to it. This adhere can be Our maintained. most recent plagued than actions been more class statement on such whether an order is As of June other circuit. appealable found in Eisen v. Carlisle pending in class actions were 679 there Jacquelin, (2d Cir.), 479 F.2d 1005 Only Circuit Fifth this circuit. granted, 908, 235, cert. 414 94 U.S. S.Ct. were more and most of its class actions (1973) (Eisen III). 38 L.Ed.2d 146 usually rights in- civil seek suits which manage. Building Judge Friendly’s junctive on relief and are easier concur- ring opinion I, supra, the United in Korn 443 F.2d Office of Administrative 1307, Courts, Report suggested of at in which the States 1973 Annual he Director, 36, 11-44 to -45. wish to consider a table at rule that equality of New York “afford District of treatment as Southern plaintiffs pending or defendants,” between class actions and alone 523 pending in dis- said that the district court’s order allow- almost of those 14% ing im- 11-42. believe that a class action to be Id. at We maintained is tricts. authorizing appealable. mediate of orders 479 F.2d at n. 1. review 1007 courts actions will aid district class saying Supreme In so we relied on promote disposing and in of these cases given Court cases 28 U.S.C. § justice. of sound administration “practical 1291 a than a technical rather defend First, Eisen III noted in construction.” Cohen v. Beneficial In- likely litigating 546, are Corp., 541, in class actions dustrial Loan 337 ants U.S. money 1226, expend in de 1221, and time 69 1528 much S.Ct. 93 L.Ed. fending (1949). Gillespie such actions because See also v. United repre damages sought Corp., Steel States 379 U.S. 85 S.Ct. enormous repre (1964); the class. Also the 13 L.Ed.2d 199 of sentatives Mercantile mean Langdeau, National Bank v. features of class actions 371 U.S. sentation expend much (1963). parties have to 83 S.Ct. L.Ed.2d 523 both 9 authorizing notifying money in We stated that an order effort and King City Industries, “Death Dismissal: v. Kansas of a Glass Action Southern (1972). Inc., (7th 1973); doctrine, 479 F.2d 1259 Knell” 39 U.Chi.L.Rev. Cir. Hack (3d ett v. General Host 455 F.2d 618 Corp. New York Stock v. 8. Thill Securities Cir.), denied, cert. 407 U.S. 1972) ; (7th Exchange, (1972). 32 L.Ed.2d 812 (6th Detroit, City 412 F.2d 226 of Walsh Interlocutory Appeal 1969). Note, from Orders Striking Allegations, Class Action 70 Col- ; Note, (1970) Appealability um.L.Rev. 1292 way determining class, in and would most effective of constitute a who damages, exercising calculating supervisory powers.9 out, our opted who Furthermore, district like. and the Second, in defendants class ac beyond pro go courts, initial if cases damages potential often face in tions ceedings, more must exercise themselves damages If dollars. millions supervising than such actions effort judgment share, case came a$5 cases. would in individual See approximately would be for million. $110 Virginia Co., Pfizer & Chas. West F.Supp. As III noted Eisen and as aff’d, (S.D.N.Y.1970), Friendly Carpentier noted in Lec his denied, Cir.), cert. 404 U. F.2d 1079 tures, is that such class ac result 30 L.Ed.2d S. S.Ct. settled, usually are often with set tions (1971). 23(e) requires them to Rule tlements which run into the millions approve 23(d) settlements Rule small when dollars are com gives responsi power them pared potential liability. Eisen determining bility making orders III, supra, 1019; H. Friend proceedings protecting course of ly, Federal A General Jurisdiction: gargan These members of the class. (1973). View 119-20 Often these cases infinitely naturally up tuan actions take though validity are even settled most other more of court’s time than plaintiff’s claims doubtful. See civil actions. Virginia Co., West Pfizer & su- v. Chas. our We believe that exercise 741-743; pra, F.Supp. American supervisory powers over administra- College Lawyers, Report of Trial justice district courts Special Recommendations of the Com- author- desirable for us to review orders mittee Rule 23 the Federal Rules izing parties and actions before (1972). of Civil Procedure 15-17 Set- expend large amounts district courts tlements, course, the district lessen managing money them. time administering problems in court’s compels appel- Candor us add that appellate actions, but also mean .that judges late be reluctant we would question of court will ever review the hold had been im- proper whether a class unless action was proper after district court We, there- immediate review is allowed. parties expended and re- much time jurisdiction fore, have conclude we although had se- dburces we appeal.10 to hear this had reviewed the rious doubts if we question inception action. at requires appel- efficiency Judicial III. parties

late before the review be made question of turn to the We now spent considera- and district courts have properly au- whether district court time, effort, money, such ac- ble on For the here. thorized a action allowing Reviewing orders tions. plain- argument, shall treat sake of we proceed would is- actions to determine 14(e) being grounded on § tiff’s case to the further con- sues “fundamental Exchange ofAct of the Securities case,” duct United Gen- States 78n(e), and Rule 10b-5, U.S.C. § Corp., eral Motors 323 U.S. only so (1945), do 240. lOb-5.11 We S.Ct. L.Ed. C.F.R. § right ought & H. H. Hart 9. determination. See think there to We appeal Wechsler, and the Fed- Courts rather reliance Federal than on the discretion Shapiro, grant (P. Bator, System D. P. district court the certificate eral 1973). 1292(b). H. 2d ed. Wechsler under 28 U.S.C. Mishkin § 14(e) principles guiding § not whether defendants We do decide general stage appeal The difference are the same. must Rule 10b-5 14(e) applies they proceedings tender offers. that § or can wait until whether Piper Indus., judgment appeal Aircraft Inc. v. Chris-Craft after is entered purpose determining changed for the whether preferred, their shares for ITT properly clearly district authorized which identifies class members. maintenance a class action and ITT claims that Herbst’s are claims prejudice any without typical, other claims pre because she her sold ITT plaintiff may plead. year ferred in the same that she re argument Therefore, ceived it. arguments Because some of ITT’s represent runs, she cannot those who perceive based on what we to be misun- exchange cared about whether the was derstandings plain- or misstatements ITT tax-free. also contends that Herbst claim, helpful tiff’s it would be at the represent large, tax-exempt, cannot understanding outset state our institutional shareholders. noted As plaintiff’s theory of the case. Herbst above, exchanged all those their who claims that ITT should have informed the holders of Hartford shares would from a have benefited stock there higher price. Under Herbst’s claims all exchange might was a risk that the be a shareholders, large small, tax-ex alleg- taxable event because of the fraud empt not, equally benefit would edly perpetrated by getting ITT in typical. Furthermore, so her claim is ruling (So favorable from the IRS. far perceive any we do not conflict of inter know, actually as we no shareholder has est between those who have retained exchange.) been taxed Herbst their ITT shares and those who have claims that if Hartford shareholders personal since sold them. The interest significant had known facts, all the of those who hold still ITT stock number of them not have ex- gaining exchange more from than changed shares, at the least es- outweighs did far their concern damage tablished rate of one Hartford common award could ITT. share for preferred, one ITT series N. (S.D. Able, Herbst 47 F.R.D. ITT compelled would then have been N.Y.1969). Finally, reject give ITT’s ar exchange more in than one share of gument typical that the claim not be preferred ITT if $2.25 it wished to com- cause no other class members have inter plete acquisition. Since ITT of- on her vened side. Korn v. Fran See fering equal amount for each share (2d chard regardless of Hartford common, 1972) (Korn II).12 status, individual tax shareholder’s equal- shareholders would have benefited Citing our decision in List v. ly had been forced to offer more Park, Inc., Fashion 340 F.2d 457 short, the Hartford In shares. even Cir.), denied, cert. 382 U.S. the shareholder who did care about (1965), 15 L.Ed.2d 60 ITT next tax status of the would argues that common issues of fact and have received more for his Hartford predominate law do not questions over enough stock if did shareholders care affecting only individual compelled and ITT to raise offer. purposes 23(b)(3) of Rule because reli Disposing ITT’s first con necessary ance prerequisite each shareholder ais tentions, precise enough here is class recovery. to his We do not purposes agree. and Herbst’s The district court noted that typical claims are class. “problematic,” this issue was but said complaint defined the class as all holders requiring proof that of individual reli of Hartford common stock who ex- ance was no bar to a class action since Corp., 341, (2d 480 F.2d expected 362 a claim that Herbst cannot be denied, 910, 232, cert. protect 414 94 adequately, U.S. S.Ct. 38 but is (1973). L.Ed.2d 148 based on claims of inconsistent interests already disposed. which we have other No 18,000 Since there were some sharehold- claim is made that Herbst her counsel Hartford, clearly ers in many fairly there adequately protect are too will not joined to be in individual actions. There is class.

1315 tried as a formed common issues could be choice when are consulted damages corporate class action and transactions. individual separately reliance if nec could be tried 396 90 U.S. at S.Ct. at 622. essary. reconsider, ITT asks us In Affiliated Ute Citizens v. United swpra, Corp., at v. 406 F.2d Green Wolf States, 406 92 U.S. S.Ct. 31 relied, the district court which (1972), applied L.Ed.2d 741 the Court unnecessary since reconsideration but rule in a 10b-5 case which involved Supreme subsequent decisions the failure to disclose information that decisively have this court and of Court shares which the selling sold were argument indi that disposed of ITT’s higher price for a elsewhere. re prerequisite to is a reliance vidual Mr. Justice Blackmun said: particular, believe covery. we In Under the circumstances of this Industries, in Chris-Craft decision our case, involving primarily a failure Aircraft, Corp., 480 Inc. Piper Inc. disclose, positive proof of reliance is 1973), cert. denied prerequisite recovery. not a All L.Ed.2d U.S. necessary is that facts governs (1973), here. withheld be material in the sense Co., In Auto-Lite Mills Electric a reasonable investor have con- 24 L.Ed.2d U.S. S.Ct. important making sidered them brought (1970), minority a shareholders of this decision. 14(a) of class action under § 153-154, at at 1472. S.Ct. U.S. alleging Act, 78n(a), a 15 U.S.C. § manage- proxy statement sent followed the Mills-Ute test We urged company share- Piper ment of Industries, a which Inc. v. Chris-Craft merger involving con- supra, of a holders to vote favor Aircraft ease a a signifi- A Piper tained a material omission. contest for control Aircraft be- minority Bangor cant shareholders number Punta tween Chris-Craft and gain merger approve the for it to claimed, had to Corporation. Chris-Craft necessary found, Piper votes of two thirds letters sent Harlan, outstanding managed family Piper Mr. Justice shares. Aircraft Court, speaking said that for the contained mis- shareholders material merger that the plaintiffs need show statements and omissions and that approved by Bangor if share- prospectus Pip- not been sent Punta to omitted, known fact but holders had er exchange connection with its misleading. material: omission was offer was prospectus listed the Ban- book value of finding Where has been there gor interest in a railroad 18.4 Punta’s materiality, made a shareholder say million gor but did not that Ban- dollars showing of causal relation- sufficient attempted to in- Punta had sell its ship in- between violation terest and had received a serious bid if, jury seeks redress for which he Bangor 5 million. held that Punta We proxy here, proves solicita- he obligation under was an disclose itself, particular rather than the Piper shareholders, 367- itself, defect the solicitation 369, and since misstatements accomplishment essential link presumed omissions were material we objective test of the This transaction. Piper that without them the sharehold- impracticalities of de- will avoid exchanged not ers would have termining many votes af- how were Bangor in shares such that numbers resolving in fa- and, doubts fected, gained majority Piper Punta control of designed to vor of those statute Aircraft. congres- protect, will effectuate ensuring clearly governs policy of that the result sional Chris-Craft in- an here. Like to make shareholders able misstate- Chris-Craft Here in here occurred in context of as merits exchange and Mills the Chris-Craft in reliance offer and the misstatements of the individual shareholder is Chris-Craft, plain- In similar. irrelevant. Here as in each case are those cases Bangor damaged only significant of the tiff Punta’s statement book was if might true interest was numbers value the railroad of shareholders have act- neglected differently they add ed it if as far as it went but had known that the interest truth. that there evidence An individual was shareholder here greatly on the books and he had was overvalued known of the tax risk would might that it that there a likelihood have been cepting was forced to choose between ac- Here, offer, loss. appears at a substantial ITT’s sold consequences very favorable,13 turning of the tax ITT’s statement been exchange representation becoming and its it minority of the down and a share- company Hartford common stock holder in that held no a controlled ITT. they they significant went, as but were true as far But if numbers of Hartford allegedly ITT, de- did not add that while shareholders would have been reluctant parting ownership given of its with nominal they at the rate if stock, equita- might retained the had truth, known the then ITT pos- ownership a ble and that there was have been forced to increase its offer to sibility consider shareholders, IRS all Hartford Hart- and all exchange to be a taxable event. ford shareholders would have been dam- aged by its failure to disclose. that here the

It makes no difference plaintiff in the ac- was a shareholder As noted in Mills and Chris- quired company in while Chris-Craft extremely Craft, prove it is difficult to corporation in was the defeated aggregate how in say control. did in the contest for We they have reacted if had known the fact “[t]he Chris-Craft Therefore, appropri whole truth. it is directly deceived was [Chris-Craft] presume, ate for the district court to application Mills- is what makes Chris-Craft, we did in that if there was appropriate and Ute test essential.” misstatement, a material then Hartford F.2d at 375. But we followed that sen- exchanged shareholders would not have tence with their shares at the rate offered if unduly would be burdensome [i]t had known the truth.14 Since individual require prove an offeror to actual reli- part plaintiff’s case, reliance here, when, ance there are numer- undoubtedly pos- holding

ous shareholders who the district court did not err in range expertise sess wide and that common issues of law and fact were knowledge. impractical to It would be predominant. prove require [Chris-Craft] conclusion, In we believe that Chief Piper each individual shareholder who Judge Blumenfeld did his dis- not abuse failed to trade for stock, [Chris-Craft’s] authorizing cretion in the maintenance [Bangor or who traded for stock, Accordingly, relied defend- of a class action. af- Punta’s] doing misrepresentations ants’ so. firm the district court’s order and re- proceedings. at 375. mand further preferred argued 13. A share material. He Mills convertible neither , stock, year N, pay phrase series Ute used this and said that it raised $2.25 dividends. A the issue of whether rebut share of Hartford common defendants could paid $1.40, $1.10, per presumption. $0.92 share He felt the materiali- ty 1969,1968, 1967, respectively. misrepresentation reli- established ance as a matter of law. 480 F.2d at 399- separate opinion majority Mansfield his 400. Neither in Chris-Craft objected majority’s Supreme state- in Mills nor the Court or Ute Chris-Craft purpose “presumption ment there al- would be manded those cases for lowing reasonable reliance” if the raise such a defense. misstatement was defendants to

1317 light Judge, in sition cases cited in DANAHER, Circuit foot Senior 3, Dempsey-Tegeler Co., concurring dubitante): note v. (but Falk Inc., 142, and text at 144. Yet May 11, Judge Blumenfeld on Chief pertinent, other cases are such as Walsh ruling instant that the 1973, his issued City (6 Detroit, F.2d v. 412 226 Cir. action. a class maintained case be 1969) and Hackett v. General Host on defendants June The ITT (3 455 F.2d 618 cert. appeal which as to filed a notice denied, 407 U.S. dismiss, now to filed her motion Herbst (1972). L.Ed.2d 812 cuit, The Seventh Cir Prescinding for a pending us. before ago King only a few months in v. appealability of question moment City Industries, Inc., Kansas Southern granting interlocutory class ac- order expressly F.2d 1259 declined problem Part status, have no I adopt accordingly rejected to Judge opinion. That Lumbard’s III of theory originally “death knell” an presents situa- class action record Eisen, in I. nounced Judge beyond question. seem tion would visiting judge, striving earnestly point Our opinion on Lumbard’s thinking imported to Judge Mulligan, I accommodate his to joined been situations, surely Second Circuit would happily concur.1 impressed by have been comments in jurisdiction to Whether Transport Caceres v. International Air Association, interlocutory presents a order view wholly (2 1970). 422 F.2d 141 Cir. problem. note that I different weight This at 143 noted that the “Although Mulligan says Judge I have authority prior to amend- granting grave this order doubt ments Rule 23 had held that an order appealable, I am class action status is striking allegations class suit was not depart Eisen III from not inclined appealable Again, under Section 1291. Supreme review the on now granting while that Rule 23 amendments (Italics mine). Court.” far-reaching, opinion were indeed “grave doubt” said at do “We not think amounts were What per Mulligan’s change Judge for me a intended view that doctrine”.2 supposed perturbation. I had sistent Judge Lumbard, supra p. 1311 our limit re would that 28 U.S.C. § writes : jurisdiction to decisions of “final” view developed haveWe the “death knell” visiting judge Had a court. district doctrine, which makes such an order participated in Circuit from the Seventh purposes appeal “final” for under ease, in mind have had he would . 28 U.S.C. 1291. . . § Corp. New York Stock Thill Securities Quite apart expressed from views (7 Exchange, F.2d 15-16 Judge circuits, Feinberg other observes visiting judge come 1972). Had that Shayne Square v. Madison Garden Circuit, he would have from the Fifth Corporation, (2 1974): F.2d 397 Cir. respect impact of looked at the § ing ruling Conversely, there have rum- been interlocuto of blings disapproval ry, Sec in our after consideration own court even Songy grants right ond cases cited because the doctrine appeal Circuit plaintiffs, F.2d Corporation, 469 Chemical some but Coastal (5 1972). Eisen, III, A Ninth Circuit g., 710 Cir. defendants. E. visiting judge not have been ob 1007 n. 1 ... po- respecting concurring opinion Circuit livious the Second then Chief way suggested Appendix Blu It 1. 1 attach further review ruling purposes unreported on reliance memorandum U.S.C. menfeld’s designa 1292(b). for class § the Herbst motion tion. 1318 judges Friendly Korn, supra, clear as Judge 443 Some means in respect- to the law of Second Circuit F.2d at 1307.3 Judge ing jurisdiction Blu- to review Eisen, say of will we now And what interlocutory designat- order menfeld’s 1016, 1005, it was F.2d at In 479 III? ing the case as a class action. instant noted that finality in contemplated Section beginning it been has From the 1291, say, is no less definite some Judge) Judge (then Lumbard’s Chief jurisdictional prerequisites, 28 than the is action the case a class view that as 1331, action status U.S.C. where class § unmanageable it should sought Snyder diversity in is a action. a class action. as dismissed 1053, Harris, 332, 22 v. 394 89 U.S. S.Ct. actually quoting the various our Without L.Ed.2d the re- (1969), 319 insisted that III, Eisen, note “holdings” need we quired jurisdictional amounts be made conclusion, id., 1020: the Court’s powerful appear despite to by dissent opin-' in this the reasons stated 353, For Justice Fortas at Mr. findings fol- conclusions Co., ion Paper 1053. Zahn v. International mini-hearing lowing are vacated 505, 291, 414 94 38 L.Ed.2d U.S. S.Ct. rulings aside, the various and set Snyder (1973), adhered to in af- 511 sustaining pros- Court firming opinion, District 469 F.2d this court’s a class action of the case as ecution (1973). 1033 action, the and, as a class are reversed Perhaps it is in order take a fresh dismissed, prejudice to without case is consideration, problem look at the under of so much the continuance “rumblings especially in view of the complaint as claim asserted in disapproval” reported Shayne, in as su- alleged individual to Eisen’s fers rights against pra. temerity required Great would be defendants. suggest rehearing banc, particu- a en for knell sounded the death Thus visiting larly judge after senior has Supreme Court shall

Eisen unless the colleagues read ex- the views of able something Af- do not see.4 see pressed Paper in v. Zahn International years, expenditure after the ter all these supra, Company, F.2d at 469 1040 Judge effort, especially of time and so, more Even this writer 1041. Tyler, he started. Eisen is back where years5 thirty than has viewed with For him the tolled. bell any plaintiff III, Bisen, confronts where a class action 3. F.2d at n. 28 records 479 designation having Friendly in 'that has been accorded. said 1972 gone radically something “seems argued wrong Bisen III three weeks effort”. case was well-intentioned Cf. give ago. Judge Friendly’s comments, Perhaps will considera- earlier concur- the Court Judge Friendly ring, in F.2d said Franchard 443 to what Korn v. Weight Weight (2 1971). Perhaps Phila. v. what Watchers 1307 Cir. (2 1972), great jurist really If there meant was: Watchers Int. Cir. particularly light sugges- interlocutory denying 773-774, his —if orders kept appealable, conversely a narrow de- tion that Cohen “be within status are to be appeal bounds, exception swallow the salu- be allowed from lest fendant should tary judgment’ interlocutory granting ‘final rule”. such status. order Bisen, III, su- I it that footnote 1 take Corp. holding pra, Railroad a com- See Western Pacific constitutes —not —but Co., 247, 252, mentary background Pac. for the doctrine Western R. 345 U.S. 73 Perhaps Bisen, “developed” L.Ed. text and note I. footnote S.Ct. discussion, really question (1953), and the 259-260. an answer of sorts to Court’s always posed by Judge Timbers, course, “How Did We Get Of en banc orders do not please everyone. See, g., v. Ad- Machines e. Williams Here” International Business court, States, spoke Corporation F.2d ams where this writer United (2 supra, J., concurring, (2 1973). Shayne, Hays, in- F.2d text 303 terprets right granting “a reversed en banc vote without fur- “doctrine” appeal plaintiffs, argument, (1971), in turn some but not ther added). Williams, (Emphasis reversed, I assume Adams v. 407 U.S. defendants”. that (1972). enough knell” 32 L.Ed.2d 612 clear that no “death S.Ct. great properly action, scope of as a class favor the resolution intra-cir- the of by conflicting by represented en the claimed to cuit views resort be Although plaintiff substantially this banc consideration. there should be lacking clearly definitive narrowed. The court has considered the seems to be a arguments hearing ruling govern presented oral at the of Circuit law Second January 8, problem, held on our -feels con- as modified this writer briefs, memoranda, submerge the view extensive affida strained his own as non-appealability Blumen- vits and letters been filed hearing, light despite Accordingly, before and after the feld’s decision. perturbation expressed, I will de- of “. . . the admonition earlier of liberali colleagues ty join my toward demands fer them for class suit status litigation (particularly disposition in securities of the issue under con- ” suits) 10b-5 . . . . Korn Fran sideration. chard (citations 1972) omitted). For rea APPENDIX appear below, plaintiff’s sons that District United States Court granted motion is and the defendants’ District of Connecticut scope desig motion to narrow the nated is denied 15,155 at this Fed. time.

Civil No. 23(c)(1). R.Civ.P. Herbst, Hilda n —-vs— I. Telegraph Telephone &

International Corporation, The criteria which control the decision may

et a suit be as al. whether maintained a delineated Fed.R.Civ. CLASS MOTION FOR RULING ON (b). 23(a), or more P. One members of ACTION DESIGNATION alleged representative class must satisfy subpar- prerequisites four gravamen of this action is The and, agraph (a); pre- addition, allegation plaintiff’s that the defendants (b) subparagraph requisites of either 10(b) Secu- have violated Section (1) (b)(2) (v)(3) or be sat- must Act), (1934 Exchange Act of rities Analysis of the mass of material isfied. 78j(b) (1970), and SEC 15 U.S.C. § by defense counsel indicates submitted thereunder, promulgated 10(b)(5), Rule significant objec- have three 240.10b-5, a written in that 17 C.F.R. § to the maintenance of suit as tions exchange (hereinafter Prospec- offer import a class action. So tus) by the Internation- made defendant understood, arguments may these be Telegraph Corporation Telephone al con- will useful to sketch essential (hereinafter ITT) of com- the holders amorphous plaintiff’s tours of the cause Fire Insur- mon stock of Hartford of action. (hereinafter Company Hartford ance Fire) contained misstatements and/or II. parties fact. The of material omissions dispute jurisdiction court’s do not complaint plaintiff’s alleges, The inter to entertain this case. alia, early April ITT that as un- of conduct intended to dertook course 23(c) to Fed.R.Civ.P. Pursuant acquisition of Hartford result plaintiff declar- an order has moved for acquisition Fire. To facilitate ing action, that her commenced ruling obtaining pre-exchange revenue action, The maintained. can be so from the Internal Revenue Service alter- oppose motion and defendants exchange (hereinafter IRS) natively that, deter- if the court contend may Fire stock in ITT Hartford be maintained stock this suit mines give event,1 rise to a taxable III. misrepresented alleged ITT it is plaintiff, Herbst,4 Hilda seeks exchange time interest at the represent persons . “. . all who ex some Hartford Fire stock obtained changed common Hartford for ITT stock exchange prior to time of the preferred pursuant offer.2 As a shareholder parties dispute offer.”5 do not Prospectus Fire, received a group persons who ex by ITT in issued 1970 which outlined changed their Hartford Fire stock exchange the of details ITT’s offer to preferred presently persons ITT includes the of shareholders Hartford Fire. subsequently disposed who have the of of the substance information which the acquired, ITT stock so who others plaintiff led to claims the of issuance presently retain those ITT. shares of ruling, aforementioned as well IRS plaintiff disposed Because of ruling, as the fact of the dis IRS are of shares ITT which she received in ex Prospectus. closed in This informa change stock, Fire her Hartford misrep of the heart constitutes defendants contend she cannot ade which, claims, plaintiff resentations quately represent interests of induce(d) . . Hartford share- Hartford Fire who ex shareholders holders, changed who de otherwise their stock for ITT.6 The exchanged, to tender their Hartford fendants contend not her inter (oth- (and) shares . . . induced ests are not inter co-extensive with exchange er shareholders) Hartford class, ests of the that an irreconcil but they antagonism necessarily less favorable terms than oth- able exists be accepted they erwise would have groups if tween the Fire two Hartford had been informed of the tax risks.” shareholders above. See 3B described Complaint Plaintiff’s paragraph at Practice, para. Moore’s Federal 23.07 17.3 (2-3). exchange (s) 1. If the plaintiff of Hartford Fire stock for formed the court that additional event, ITT change presently stock was not taxable the ex- who retain the ITT stock received plaintiff non-taxable, exchange be would as the for their Fire Hartford stock claims, gain probably in that no or loss be would rec- will be added. ognized exchange. at the time of the Form- approxi 5. Class members are estimated er Hartford Fire ex- who persons. 16,000 mate 23(a)(1) See Fed.R.Civ.P. changed newly acquired held ITT ; Corp., supra, Korn Franchard would, course, required recog- stock 1209; Solomon, 456 F.2d at Wolfson v. gain they nize whatever loss realized (S.D.N.Y.1972). F.R.D. they eventually disposed when of their ITT stock. Although 6. the defendants claim that this plaintiff objection, properly follows, and the one claims that: go “(a)n typicality plaintiff’s pur- to the unconditional divestiture of the claim(s), 23(a)(3); chased see Hartford stock to an Fed.R.Civ.P. Eisen unrelated party Jacquelin, required (by IRS) third v. Carlisle in or- (2d (hereinafter qualify exchange 1968) II) ; der Bisen 3B as tax-free Practice, para. provisions under Moore’s Federal the relevant 23.06-2 of the Inter- 23-325, operational analysis signifi promul- rulings nal gated Revenue Code and the objections thereunder”, (plaintiff’s cance these will be facilitated Memoran- regard Support dum considered with Law of Motion for important particularly 3) Class Action criterion whether Determination at representative gave plaintiff adequately will false information IRS protect appear class, in order to the interests make it Fed.R. it com- plied 23(a)(4) ; Dolgow compare Civ.P. with the v. Ander above mentioned Internal son, (E.D.N.Y.1968), provisions rulings. 43 F.R.D. Revenue Code and IRS grounds, rev’d on other 438 F.2d 825 23(a) (2) ; 3. See Fed.R.Civ.P. v. Fran Korn 3B Moore’s Prac Federal Corp., supra, chard tice, para. (1) at 23.07 23-352. Although Hilda Herbst continues to be the plaintiff, sole named her counsel has in- also, Harrington, motion, Feder the de- See In the context of F.R.D. (S.D.N.Y.1970). Accordingly, dif- to a fendants’ amounts contention longer fact Neither ference without distinction. tains the ITT stock underlie received two considerations which plain- for her Fire not in- argument stock does indicates that adequately dicate adequately represent in- that she is unable to tiff will protect repre- the interests entire class she terests of the seeks represent. ; which she claims to that the obvious benefits sent or provide in the effi- a class action will Moreover, denial of class status just securi- of this cient and resolution would not be warranted even if dam- foregone. fraud suit must be ties ages catego- suffered these distinct given jural Because effect has been ultimately ries difference between some instances by varying have to be measured criteria. bought persons stock, sold who have appear In a case where did that dam- yet disposed persons who have not ages depend, in part, would at least on 23.1; stock, of their 3B cf. Fed.R.Civ.P. (s) whether the shareholder still retained para. 23.1.17 Practice, Moore’s Federal shares, observed: Weinstein 23.1-151; Steadman, 50 at Herman v. groups “These two can be differen- (S.D.N.Y.1970), defend- the F.R.D. 488 only tiated the basis of their dam- urge here. But ants that difference ages. distinction no rela- This bears policy justify rec- considerations which relating questions the common legal ognition that difference some of liability part will be tried as that apply the same contexts do not narrowing of the action so that class propriety question force is the where of the reason class this this designation. of several a class action As stage litigation not warrant- courts in this circuit have noted: Dolgow Anderson, supra, ed.” “Practically every that F.R.D. at 493. brought under the Securities can be by purchasers in- securities Acts of appears If it at some time in the future re- by who volves claims both those proper damages allocation of who tained securities and those designation would be effectuated sold them who some those sold appropriate subclasses, undisput- of it is securities, but retain others. The still power ed that the court has all the nec- problem is twofold. answer to this essary procedure. implement such a simply hand, ev- it is On one 23(c)(4).7 any event, In Fed.R.Civ.P. ery wears two defrauded stockholder may problems the road well down which hats, personal inter- but that his pertinent procedures be as est far interest overshadows his govern ultimately should the allocation Moreover, if, equity-holder. damages pro- chance, currently of need not not and should class member holdings large prompt has ... so vide and con- a roadblock to the prefer he to assert his ditional determination this of whether losses, past person, such a claims for properly may suit be maintained aas action, pending al- once notified of the 23(c)(1). action. class Fed.R.Civ.P. ways option under Fed.R.Civ. also contend defendants 23(c)(2) request from P. exclusion plaintiff, taxpayer, adequately cannot Able, F.R.D. the class.” Herbst represent many (S.D.N.Y.1969). interests class; may the 1966 Revision Committee Note of required thereafter be to come individu- Rule that: 23 noted “ ally prove the amounts of their in a similar case the . . . fraud or spective may claims.” 3B Moore’s Federal retain its ‘class’ character adjudication Practice, para. through liability 23.01(11.-4) 23-34. large8 regard quo Hartford Fire shareholders who ers without to their status exempt taxpayers. were from the federal income The different tax status exchange. Super- tax at the time of the the Hartford Fire shareholders does not analysis might ficial lead bar conclu- the maintenance this suit as a tax-exempt sion that Hartford Fire action. damage could shareholders suffer Although carefully the court has con- misrepresentation from the of the tax arguments sidered the other defendants’ consequences exchanging their Hart- adequacy pro- concerned with the ITT, ford Fire stock for e. as to i. tection of interests the class “misrepresen- these representative party which the and her tation” was material. From this the provide, counsel9 will none of these defendants contend that these sharehold- require considerations requisite ers and the lack the represented claimed to be be narrowed commonality of interest combined may or that the decision that this suit single analysis in a class. But this over- be maintained as a class de- action be plaintiff’s looks the subtleties layed. complaint. If, alleged, the effect of misrepresentation to induce IV. some Hartford Fire shareholders to ex- change their parties agree shares on terms less favor- suit able than may properly those which would have been be maintained a class consequences offered if the tax action, pursuant had been it can be so maintained properly tax-exempt represented, 23(b)(3).10 to Fed.R.Civ.P. The defend may shareholders well have been dam- questions ants contend that of fact com aged non-tax-exempt as much as the mon to the members of the class do not single exchange shareholders predominate affecting since the questions over equally offer was made individuals.11 The of their all heart sharehold- .to pertinent findings (A) unsupported implication ters defendants’ to the include: many large the dividually controlling of interest members of the class in in- choose prosecution vindicating legal rights to refrain from their or separate not, actions; (B) supported, even if defense of the ex- affect plaintiff’s ability any litigation tent nature concern- to maintain this as a suit ing controversy already by Practice, class action. 3B Moore’s commenced Federal para. against class; (C) or desirability 23.06-2 at members of the 23-327. undesirability of concentrat- 9. The defendants have not contended that litigation ing par- of the claims anything plain- there is “to indicate that the (D) likely forum; ticular the difficulties prosecute tiffs do intend not this action management be encountered of a vigorously plaintiffs’ attorney or that is not class action.” competent Dolgow Anderson, to do so.” v. supra, 494; also, 43 F.R.D. at see Wolfson 11. The defendants’ contention mainte Solomon, supra, 590; v. 54 F.R.D. at 3B may nance of this suit as a class action not Practice, para. 23.07(1 Moore’s Federal & be fair or efficient overlooks the fact that 4) (numerical representation quality and the 23(b)(3) requires Fed.R.Civ.P. counsel). efficiency maintaining fairness and/or 23(b) (3) provides: 10. Rule suit as a class action relative criteria by comparison “Class Actions may be avail Maintainable. An action evaluated with other superior be maintained as a able and methods. 3B Moore’s prerequisites (a) para. 23.45(3) Practice, Federal Notwithstanding at subdivision are satis- 23-802. fied, argu and in addition: the defendants’ terse (cid:127)i* í í (cid:127)!(cid:127) contrary, proce ment no method or “(3) questions suggested the court finds that dure has been court which dispose law or fact common to the members of would more of this securities fraud case predominate any questions fairly efficiently the class over than a class affecting only members, See, g., individual action. v. e. Green Wolf 406 superior (2d denied, that a class action is to other F.2d cert. available methods for adjudication fair and efficient 395 U.S. 89 S.Ct. 23 L.Ed. 766 controversy. (1969) ; Graphic The mat- Vernon Rockler & v. J. Co. ceedings. (Substantially, . . . proof of reliance argument may relatively immaterial exchanging be once Fire sharehold giving fact(s) fraud rise to the form which the material ers liability Moore’s allegedly is determined.” 3B misstated have defendants Practice, para. 23.45(2) Prospectus Federal ais from omitted and/or 23-762-764. recovery.12 qua non for sine also, See Affiliated Unit Assuming Ute Citizens v. arguendo defend- States, 128, 153, merit, ed 406 U.S. retains some ants’ contention (1972); L.Ed.2d 741 Mills v. corollary this suit conclusion Co., Electric Auto-Lite 396 U.S. be- may proceed action as a class not (1970); S.Ct. Korn L.Ed.2d 593 questions or fact common of law cause Corp., supra, v. Franchard 456 F.2d at pre- the class do to the members 15-19; 1212 and nn. Wolfson v. Solo without merit. is nevertheless dominate supra, mon, 591; 54 F.R.D. at Feder v. logical end, it would “Carried 183; Harrington, supra, 52 F.R.D. at negate any attempted un- (S. Mack, Berland v. 48 F.R.D. 10b-5, District as the Rule since der D.N.Y.1969); supra, Able, Herbst v. recognized, is an reliance Courts 16; Dolgow Anderson, F.R.D. at su every lurking action.” 10b-5 issue pra, 43 F.R.D. at 490. Corp., supra, Wolf Green v. omitted). (citation at 301 V. relationship problematic between this, In a case such as Fed.R.Civ.P. materiality, causation liance requires 23(c)(2) the court shall whereby damage, the mechanisms direct members “the best may demonstrated, have been reliance be practicable under the circujn- notice these have faced courts which noted stances, including individual notice fraud securities context of issues through who can be identified g., See, Franchard Korn v. cases. e. effort.” Eisen reasonable v. Carlisle 1212; Corp., supra, Green 456 F.2d Jacquelin, 1005, 1008, Corp., supra, F.2d at 310. Wolf 1973) (hereinafter III). Eisen may yet com- these issues While circuit, identity pletely substantially in this Chris- all of the of settled Piper Industries, may Aircraft “ascer- Inc. v. of this class be Craft members 373, effort,” through Corp., 341, Eisen 399 tained reasonable accordingly presence III, supra 1008, the issue of of ac- designation given. of tual notice must be reliance is no bar to individual is be- in a case as this of the members of the class such names tapes yond may computer dispute. from ITT’s be taken which list the names of the give allegedly “(W)here the activities the ex- the time of Fire shareholders at liability standardized, as are rise to change offer. misrepresentations are where uniform group, supple- appear members of the does not now made It proce- mentary proof notice, reliance as well as of individual forms of or other effectively damages may dures, required be to insure that actual individual subsequent pro- by severed and treated notice will be received (D. Enterprises, Inc., present F.R.D. court’s a colorable issue and the Solomon, supra, rejection analysis Minn.1970) ; v. of the defendants’ Wolfson (for significance purposes this of reliance F.R.D. at 592. negates motion) the mainte- claim that seriously pursued nance of this suit as class action would 12. The defendants have not present management underlying pertinent issues unusual difficulties. the enumerated 23(b) (3) (A— Corp., supra, inquiry, F.2d at v. Franchard Korn to this Fed.R.Civ.P. 23(b)(3) D). these, only Of Fed.R.Civ.P. appear difficulties) (D) (management see, g., Assuming arguendo the class. But e. Berland v. the relative 130; Mack, supra, provision 48 F.R.D. at Herbst economic burden of the of no Able, supra, F.R.D. at 21. tice is a relevant factor which court properly may consider in the exercise of party13 Resolution of which should discretion, id., expense III, Eisen providing bear the cost notice neces providing herein, the notice ordered sarily begins with observation by plaintiff approxi estimated II, supra, Eisen 391 F.2d at mately $2240, appear does not so be furnishing “(t)he task notice to the excusing burdensome as to warrant class members in such a case as this plaintiff paying from See Korn it. representative party must rest (S.D. Franchard 50 F.R.D. plaintiff.”14 (Footnote when he N.Y.1970). sum; petty This is not a omitted). In the recent round of most plaintiff and the claims to be “not a litigation, III, supra, the Eisen Eisen wealthy However, woman.” there 479 F.2d at 1009 n. focused allegation, believe, nor reason to re directly fully on this de issue more quiring .plaintiff, conjunction lineated the considerations whieh control any plaintiffs with subsequently named a district court’s discretion under Fed. representative parties, see footnote 23(c)(2) allocating R.Civ.P. cost supra, preliminary to bear this cost of providing requisite notice be litigation ultimately intended to benefit parties. Although tween the that deci them will sound the death knell of this may sion indicates that there be circum Mack, action. supra, See Berland v. plaintiff stances which excuse the F.R.D. at 131.17 paying part expense from all or giving required entailed in bearing In notice addition to the cost of 23,15 III, stuffing, supra, printing, Fed.R.Civ.P. Eisen mailing the no- F.2d at n. class, plaintiff such tice circumstances shall bear presented by are not mailing this action.16 the administrative burden plaintiff’s suggestion longer the cost of bers class are no ITT, notice be continuing borne the court is not a viable cannot claim a fidu- ciary relationship ITT, alternative. See Administrative Office Unit nor corporation sending ed States Courts Memorandum No. will them -written Supplement (March 26, 1973) ; regular No. 2 Eisen communications course of supra, II, 23; 391 F.2d at 568 n. 3B business. Practice, para. Moore’s Federal 23.55 at 17. The mere fact that a cannot bear 23-1155 n. 21. the cost of notice does indicate that import pick up 14. The full of that decision has not defendant must The desire bill. See, g., implement been free from doubt. e. Green v. to tively the class action effec device Corp., supra, 15; always Wolf 406 F.2d at 301 n. must be balanced the fear Jacquelin, Eisen v. Carlisle & 52 F.R.D. that excessive in concern for the financial (S.D.N.Y.1971), rev’d, III, supra, plaintiff may Eisen terests of the result in im the 1005; Harrington, position supra, expenses upon Feder v. of unwarranted the 184; Mack, supra, supra, Mack, F.R.D. at Berland v. defendant. Berland v. F.R. 131, noted, III, supra, especially where, 48 F.R.D. at Eisen D. at 131. This is true as 5; case, plaintiff 479 F.2d at 1009 n. Practice, para. 3B Moore’s Federal in this has refused to ac cept post 23.55 at 23-1155 nn. 20 and the court’s invitation to a bond equal providing to the cost of Eisen 21. notice. III, supra, Assuming 479 F.2d at 1008. ar disputed plain- 15. It is not that a successful guendo analysis of the relevant criteria may part tiff recover as of his costs the transferring propriety indicated the this money expended providing requisite in initially litigation defendant, cost of to litigation. notice at the outset of his prevail merits, were the defendant on protected against 16. This is shareholders’ such a bond would have derivative suit fiduciary duty possible futility trying where the owed shareholders to collect costs by corporation may justify plaintiff exempting pay. from a unable to Eisen See plaintiff Similarly, III, supra, (Hays, J., from this burden. F.2d at 1020 con significant percentage curring result). since a in of the mem- following (30) days However, thirty ex- mail within facilitate notices. pedite plaintiff’s task, such authorization. see Wolfson 593; supra,, Solomon, 54 F.R.D. at 3B provide 5. Defendants shall para. Practice, 23.55 at Moore’s Federal plaintiff listings with or materials pro- will the defendants 23-1159 n. possession their useful the notifica- requisite vide her materials with tion class than later ten possession. (10) days before the date plaintiff required is to send notice Accordingly, the finds that court under this order. prerequisites of a class to maintenance parties post 6. The of- shall obtain delineated Fed.R.Civ.P. fice 23(a) exist, box at States Post (b)(3) United Of- City fice within the New York for hereby It ordered that: handling correspondence. of class plaintiff’s 1. a deter- motion for joint The box shall remain under the may main- mination that her action parties, person control or a select- granted. tained a class action is by them, requests ed and all such 23(c) (1), 2. other Pursuant to Fed.R.Civ.P. materials shall be available inspection by parties. subject order by all to future modifica- may tion court and be altered providing 7. The costs of notice to prior amended to decision on the merits. provided the class as herein shall be initially by plaintiff, provided, borne represented by 3. The class judgment however, that should be en- plaintiff all In- shall include plaintiff, tered in favor of the the rea- Company (Hartford Fire) surance providing sonable costs such incurred exchanged their Hart- who notice shall be taxed as a cost of this ford Fire common stock N for Series lawsuit. preferred Interna- stock of convertible Pending class, notification of the Telegraph Corpora- Telephone tional plaintiff counsel, neither nor her de- nor (ITT) pursuant to an of- 26, counsel, fendants nor their shall solicit by May fer 1970; made or about any independently or otherwise contact however, provided, that the above member of the absence of class shall not include described approval. persons response such who indicate provided notice hereinafter for that Connecticut, Hartford, Dated at do not wish to be so included. day May, 11th Joseph Blumenfeld M. /s/ parties are directed to submit Joseph Blumenfeld M. days (10) to the court ten within follow- Judge Chief ing entry the date of this order a form of notice to be mailed to class Judge (concur- MULLIGAN, Circuit members. If such form of notice is ring) : agreed parties, all agree fully copy I shall send a of such notice to each Lumbard correctly member first-class mail within district court deter- thirty (30) days following prop- mined that a action here the submis- Although grave sion such notice to the court. If er. I such doubt granting agreed form of notice is not this order class action status is parties, appealable, copy depart am shall send a I not inclined to from Eisen III notice thereafter which is now on authorized review Supreme each class member Court. first-class

Case Details

Case Name: Fed. Sec. L. Rep. P 94,481 Hilda Herbst v. International Telephone and Telegraph Corporation

Court Name: Court of Appeals for the Second Circuit

Date Published: Apr 3, 1974

Citation: 495 F.2d 1308

Docket Number: 314, Docket 73-2062

Court Abbreviation: 2d Cir.