Levine v. BergLevine v. Berg
OPINION AND ORDER
Plaintiff has moved for an order, pursuant to Rule 23(c)(1), F.R.Civ.P., certifying this suit as a class action. Defendants Berg Enterprises, Inc. (BEI) and Kenneth Berg have challenged the adequacy of plaintiff Betty Levine’s representation and the definition of the putative class.
This action was commenced on November 10, 1977 by plaintiff, a BEI shareholder, purportedly on behalf of herself and all other BEI shareholders similarly situated, against BEI, Kenneth Berg and Leonard Berg, present and former directors and officers of BEI, and Martin Newman and Melvin Konwiser, purchasers of real estate from BEL The complaint charges defendants with violating Section 10(b) of the Securities Exchange Act of 1934,
Plaintiff alleges that she purchased 100 BEI shares at $17,125 per share on November 20, 1972 and 100 shares at $6.25 per share on July 31,1973; and that on September 3,1973 she sold 100 shares at $1,875 per share.
Rule 23(a)(3) mandates that the claim or defenses of the named representative be typical of those of the putative class, while Rule 23(a)(4) requires that the representative fairly and adequately protect class interests. This latter requirement appears to encompass the former. See Eisen v. Carlisle & Jacquelin,
Since the complaint is devoid of any factual allegation which would aid plaintiff’s position, plaintiff relies on her deposition testimony and her attorney’s affidavit attesting to counsel’s qualifications and experience. I note that the ability of counsel to competently prosecute the proposed litigation is a necessary component of adequate representation. Eisen v. Carlisle & Jacquelin, supra,
Defendants argue that plaintiff has failed to adduce sufficient facts upon which a finding can be made with regard to the typicality of her claim, largely by virtue of the fact that plaintiff was unable to recall any of the facts and circumstances prompting her acquisition of BEI shares. Indeed, plaintiff was only vaguely cognizant of the nature of BEI’s business, and could not recollect consulting either Standard and Poor’s or other reports with respect to BEI. She additionally disclaimed any reliance on her broker’s recommendations, if any were given. Most glaring is her testimony regarding her lack of familiarity with any of BEI’s publicly filed or disseminated documents and reports, particularly those purportedly including the improper inclusions alleged in the complaint.
On the basis of plaintiff’s testimony, I must agree with defendants that it is difficult, if not impossible, to assess the likelihood that plaintiff may be subject to unique defenses, inapplicable to other purported class members, which may vitiate the typicality of her claim. See, e. g., Greenspan v. Brassler,
Plaintiff’s unfamiliarity with matters relating to her claim permeates her testimony. She testified that although she glanced briefly through the complaint before it was filed, she did not consider it thoroughly until the day prior to the deposition. Even then she was unable to articulate, with any quantum of comprehension, the wrong purportedly practiced upon her and the proposed class. The only aspect of her testimo
I didn’t like [BEI] management. I will be honest with you. There was something about them I did not like. I don’t recall exactly what it was.
And that’s why when I saw this [article], I was ready to bounce on them.
Levine Deposition, p. 37.
Her attack mounted on defendants, on the alleged behalf of others similarly situated, was commenced some ten days following the publication of that article. Plaintiff’s deposition testimony reveals an alarming adversity to unearthing the facts relevant to her claim, as well as a total reliance on her counsel, to whom she “gave . the case and . . . figured whatever he had to do, he did.” Levine Deposition, p. 43. Indeed, it would appear that the only aid that plaintiff can render counsel is her willingness to act on behalf of a class and bear whatever costs such action might entail. In view of plaintiff’s lack of personal knowledge of, and unwillingness to learn about, the facts upon which her complaint is based, and the undue emphasis she has placed on her attorney’s ability to investigate and prosecute this suit, the mere fact that plaintiff has brought this suit and is able to bear its costs is of no consequence. See, e. g., Greenspan v. Brassler, supra,
Consequently, plaintiff’s motion for class certification is denied.
SO ORDERED.
Notes
. Broker’s confirmation slips produced by plaintiff at her deposition reveal that the correct dates of these purchases were November 13, 1972 and August 7, 1973 rather than November 20, 1972 and July 31, 1973 as alleged in the complaint, and that the sale was transacted on September 3, 1974 and not on September 3, 1973.
. Although the complaint as well as plaintiffs Memorandum of Law in support of her motion alleges that the putative class period should commence on November 30, 1972, plaintiff’s counsel has informed me by letter dated April 14, 1978 that the November date was a “typographical error” and that the class period should run from September 30, 1972. Plaintiff’s reply memorandum reflects this request to expand the class.
. The instant motion is styled as a “Renewed Notice of Motion.” Plaintiff originally moved for class certification on January 6, 1978, proffering in support thereof merely her attorney’s affidavit which purported to “satisfy the requirements of F.R.Civ.P. 23(a)(4)” solely by setting forth counsel’s “qualifications in the area of federal securities litigation.” (Affidavit of Arthur N. Abbey of January 6, 1978 fl 3). This motion was “denied without prejudice to its renewal on a proper showing” by endorsement dated February 1, 1978.