Class Action

Class Action Defense Cases–Telco v. Ameritrade: Eighth Circuit Affirms Dismissal Of Class Action And Refuses To Address Appeal From Denial Of Class Action Certification For Lack Of Live Controversy

By Michael J. Hassen

District Court Order Dismissing Class Action Affirmed for Failure to Plaintiff to Address Merits of Dismissal and District Court Order Denying Class Action Treatment Affirmed because Plaintiff no Longer Member of Class it Purported to Represent Eighth Circuit Holds

Plaintiff filed a class action against Ameritrade, an Internet-based securities brokerage firm, alleging that defendant caused its customers to suffer damages by delaying trade executions; essentially, the class action complained that defendant’s failure to timely execute trade requests resulted in the failure to obtain the best possible prices. Telco Group, Inc. v. Ameritrade, Inc., 552 F.3d 893 (8th Cir. 2009). Plaintiff filed a motion to have the litigation certified as a class action, but the district court adopted the recommendation of the magistrate to deny class action treatment. Id., at 893. Defense attorneys moved to dismiss the class action for failure to prosecute; the district court granted the motion, id. Plaintiff appealed from the final order dismissing the class action, but the focus of its appellate brief centered on the denial of the motion for class certification. Specifically, plaintiff failed to challenge the merits of the order dismissing the class action, id. The Eighth Circuit therefore affirmed the class action’s dismissal. Id. With respect to the issue plaintiff did brief – the denial of class action treatment – the Circuit Court held at page 893 that “because its claims have been dismissed with prejudice, reversing the denial of class certification would afford [plaintiff] no relief.” Specifically, because the district court dismissed plaintiff’s claims it was no longer a member of the putative class “and therefore cannot represent the putative but uncertified class.” Id., at 893-94. A class action cannot be certified without a class representative, id. (citation omitted), and a live controversy must exist for the appellate court to review, id. (citation omitted). The Eighth Circuit easily held at page 894, “In these circumstances, it is appropriate to ‘affirm the dismissal and ... not reach the class certification issue.’” Accordingly, it affirmed the district court orders. Id., at 894.

Full post as published by Class Action Defense Blog on March 11, 2009 (boomark / email).