Opinion
C.A. No. 99C-06-157
Date Submitted: October 24, 2000
Date Decided: January 10, 2001
UPON PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
DENIEDMEMORANDUM OPINION
This 10th day of January, 2001 having read and considered Plaintiffs' and Defendants' Briefs, it appears that:
INTRODUCTION
Defendants are an internet brokerage firm that allows its customers to trade securities via the Internet or telephone. Plaintiffs were Internet customers. The primary basis of Plaintiffs' complaints is that they were not given the opportunity to purchase initial public offerings ("IPO") as Defendants advertised. Not every customer of Defendants would have the opportunity to purchase every IPO. Instead, Defendants set up an allocation procedure that essentially equated to a "first-come, first-served" approach with priority given to those who abstained from "flipping" (trading) IPO shares for at least sixty days following an IPO purchase. Plaintiffs allege the allocation procedure was set forth in the Account Agreement that they signed. Plaintiffs allege that no matter what they did they were never able to purchase IPOs. Plaintiffs also complain that Defendants failed to execute trades in a reasonable amount of time. Plaintiffs claim that numerous customers of Defendant's have had similar negative experiences and all of them have been damaged by Defendants' conduct. This is Plaintiffs' Motion for Class Certification.
DECISION
Generally, in determining whether an action is appropriate for class certification the Court must determine if the prerequisites for class certification set forth in Superior Court Civil Rule 23 are met. However, since in the case sub judice the Defendants assert that this Court lacks subject matter jurisdiction, the Court must make a determination regarding this Courts' authority to retain a class action suit.
Defendants argue that this Court lacks subject matter jurisdiction over any class action suit. Defendants contend that Superior Court Rule 23 expands the jurisdiction of this Court "by creating an equitable remedy (i.e., class actions) to resolve legal issues." Defendants argue that where there was no approval from the legislature to expand Superior Court's jurisdiction, as is required, Rule 23 is violative of the Delaware Constitution. The Court finds that this argument has no merit. It is well settled that a class action is a procedural device. Therefore, Superior Court Rule 23 does not violate the Delaware Constitution since it does not purport to enlarge the jurisdiction of this Court. "The Rule is procedural not jurisdictional."
See Nottingham Partners v. Dana, Del. Supr., 564 A.2d 1089, 1094 (1989) (citing 7A.C. Wright, a. Miller M. Kane, Federal Practice and Procedure § 1751, at 7 (1986)).
Wilmington Trust Co., et al. v. Schneider, Del. Supr., 320 A.2d 709, 710 (1974).
The Court may make a determination as to class certification regarding certain claims without engaging in a Rule 23 analysis. Plaintiffs raise fraud and negligent misrepresentation in their complaint. Common law fraud and negligent misrepresentation claims are not to be litigated via class action suits. It has been held that such causes of action require plaintiffs to plead justifiable reliance for which "[a] purported class action is not the appropriate vehicle to advance such individually unique claims."
Oliver, et al. v. Boston University, et al., Del. Ch., C.A. No. 16570, 2000, Steele, V.C. (Jul. 18, 2000) (Mem. Op. at 10) (citing Dieter v. Prime Computer, Inc., Del. Ch., 681 A.2d 1068 (1996)).
Id. at 11.
Plaintiffs also allege a violation of the Delaware Consumer Fraud Act. Section 2522 of the Delaware Consumer Fraud Act provides that "[t]he purpose of this subchapter shall be to protect consumers and legitimate business enterprises from unfair or deceptive merchandising practices in the conduct of any trade of commerce in part or wholly within this State." "Relief, therefore, can be granted under the Act only as to those unlawful practices occurring or performed partly or wholly within Delaware."
Goodrich v. E.F. Hutton Group, Inc., Del. Ch., 542 A.2d 1200, 1203 (1988).
In the case sub judice, Plaintiffs have failed to allege any facts which if true would constitute unfair deceptive conduct on the part of Defendants occurring wholly or in part within Delaware. Plaintiffs merely allege that Defendants are "registered and doing business in Delaware and elsewhere," and that Defendants' acts and/or omissions occurred within the meaning of Delaware Consumer Fraud Act. There is no allegation that a Delaware consumer was deceived by Defendants' trade practices, and therefore Plaintiffs cannot maintain a claim for violation of the Delaware Consumer Fraud. Therefore, the Court need not address the issue of federal preemption.
In order for Plaintiffs' remaining claims, to be certified as a class action in Superior Court, the Court must be satisfied that the prerequisites of Superior Court Civil Rule 23(a) are satisfied. Rule 23(a) states:
See Mentis v. Delaware American Life Ins. Co., Del. Super., C.A. No. 98C-12-023, Quillen, J. (May 30, 2000) (Let. Op. at 2).
One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
If all of the prerequisites of rule 23(a) are satisfied, the moving party must then demonstrate that the action falls within one of the categories of Rule 23(b). Superior Court Civil Rule 23(b) provides that:
An action may be maintained as a class action if the prerequisites of paragraph (a) are satisfied, and in addition:
(1) The prosecution of separate actions by or against individual members of the class would create a risk of:
(A) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(B) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) The party opposing the class had acted or refused to act on grounds generally applicable to the class, thereby making appropriate final jnjunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that the class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matter pertinent to the findings include:
(A) The interest of members of the class in individually controlling the prosecution or defense of separate actions;
(B) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;
(C) The desirability or undesirability of concentrating the litigation of the claims in the particular forum;
(D) The difficulties likely to be encountered in the management of a class action.Numerosity. There is no rigid numerical guideline for determining impracticability of joinder, though courts have found that more than forty members is adequate. It has been pointed out that "[p]racticability of joinder depends on a number of factors including: the size of the class, ease of identifying members and determining addresses, ease of service on members if joined, geographical dispersion and whether proposed members of the class would be able to pursue remedies on an individual basis."
Mentis at 3 (citing 5 Moore's Federal practice 3d § 23.22[3][a]).
Liberty Lincoln Mercury v. Ford Marketing Corp., 149 F.R.D. 65, 73 (D.N.J. May 14, 1993).
Plaintiffs allege that Defendant has approximately 41,000 customers accounts therefore joinder is impracticable. Defendants however argue that Plaintiffs merely speculate that all of the Defendants' account holders have been damaged but have not provided the Court with any evidence or reasonable estimate as to the actual number of customers that might bring a claim against Defendants.
The Court finds that the Rule 23(a)(1), numerosity, is not satisfied. Plaintiffs allege there are in excess of 41,000 customers who could potentially be situated all over the country which would make joinder impracticable. However, Plaintiffs have only identified five customers who have had the type same problems with the purchase and/or selling of securities through Defendants' service. Although the representative plaintiff does not have to provide an exact number of members, "the movant must proffer some evidence of the number of members in the purported class, or at least a reasonable estimate of that number." The representative plaintiff cannot rely on mere speculation regarding the size of the class nor conclusory allegations that joinder will be impracticable. Plaintiffs allege that 41,000 customers signed the same contract but fail to allege, other than the 5 for which they have letters, the number who have had problems with IPO purchases or executing trades. The Court finds that Plaintiffs' allegations regarding the size of the purported class are merely speculative thus the numerosity prerequisite is not satisfied. Commonality. Rule 23(a)(2) requires that there be at least one question of law or fact common to the members of the class. "It is not necessary that all questions of fact or law be common." However, class certification is inappropriate if there is significant factual differences among the class members or "if it is a case of common legal questions dependant on divergent facts. However, it has been held that Rule 23(a)2 is easily satisfied because only one single common issue is needed.
See Zimmerman v. Home Shopping Network, Inc., Del. Ch., C.A. Nos. 10911, 10919 Jacobs, V.C. (Aug. 14 1990) (Mem. Op. at 12).
5 Moore's Federal practice 3d § 23.22[3][b] (citations omitted).
Id.
See Lloyd v. City of Philadelphia, 121 F.R.D. 246, 249 (E.D. Pa. Aug. 22, 1988); Siles v. ILGWU National Retirement Fund, 783 F.2d 923, 930 (9th Cir. 1986) (finding that numerosity was not met in a case alleging pension fund requirements violated ERISA because although evidence was presented that 31,000 employees were covered by the plan, the representative plaintiff failed to show how many employees were eligible for benefits and failed to receive them).
See Id.; Mentis at 3 (citations omitted).
Id. (citations omitted).
Mentis at 3 (citing Paine Webber R D Partners, I.P. v. Centocor, Inc., Del. Super., C.A. No. 96C-04-194, Quillen (Oct. 9, 1997))
Id. (citing Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994) (citations omitted)).
Plaintiffs argue that the commonality requirement has been easily met because there are a number of questions of law and fact that form the basis for the purported class members' claims which are identical. Such as:
(a) whether [Defendants] promised, in its Account Agreement, to execute [c]lass member orders to purchase IPO stock on a first-come, first-served basis with priority given to those customers who refrained from "flipping' their IPO shares for 60 days following the IPO; (b) whether [c]lass members received such benefits pursuant to their Account Agreements; (c) whether [Defendants] owed a duty to provide on-line brokerage services to all [c]ass members in a timely manner; whether such services were provided in a timely manner; and (d) whether the class members have suffered harm as a result of [Defendants'] wrongdoing.
Defendants, on the other hand, argue that there are no common questions among the proposed class members. Defendants contend that assuming arguendo, Plaintiffs could prove a failure to provide adequate facilities in some circumstances, individual questions would still predominate. They argue that there will be members of this purposed class: (I) who did not request allocations of IPOs; and (ii) who requested the IPOs but did not receive them due to a variety of reasons such as their anti-flipping status and/or account funding status.
Because the commonality prerequisite only requires that there be one common question it is easily satisfied. Plaintiffs are seeking certification of a class that is linked by way of Defendants' Internet website and Account Agreement. The purported class is "all Wit capital customers who entered into a brokerage Account Agreement with Wit Capital before May 20, 1999, the form of which is and was posted on the Internet." Thus, the same representations and or promises were made to each of the purported class members. Therefore, the Court finds that Rule 23(a)(2) is satisfied.
Typicality. Rule 23(a)(3) requires that the claims asserted by plaintiffs on behalf of a proposed class be typical of the claims of the other members. "The proper inquiry is whether other members of the class have the same or similar injury, whether the action is based on conduct not special or unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct."
Super. Ct. Civ. R. 23(a)(3).
In re NASDAQ Market-Makers Antitrust Litigation, 169 F.R.D. 493, 509 (S.D.N Y Nov. 26, 1996).
Plaintiffs argue that not only are their claims typical of the proposed class, they are identical. It is argued that all proposed class members are entitled to timely brokerage service and the same IPO processing rights. Plaintiffs contend that their claims and the claims of the other class members stem from the same practices. Plaintiffs assert that they "anticipate proving on a system-wide basis that [Defendants] failed to perform its promises to fulfill IPO orders on a first-come, first-served basis, to prioritize those customers who refrained from `flipping,' and failed to maintain adequate resources (computer, telephone, and personnel)."
Defendants argue that Plaintiffs' assertions are over broad and that their claims are not typical of the proposed class. Defendants contend that there is clear conflict between class members, including Plaintiffs, who allege they were entitled to IPO allocations and those class members who did in fact receive the allocations. Defendants state that even among the Bennings there are claims that certain of them were unable to make a valid request for an allocation of IPO shares due to website problems while some of the Plaintiffs made valid requests but were denied because of Defendants' anti-flipping rules.
For this prerequisite, the Court will examine each cause of action separately to determine if the typicality requirement is met. With respect to Plaintiffs' breach of contract claim, the Court finds that typicality is not met. Plaintiffs allege in their complaint that Defendants breached the contract with Plaintiffs and the proposed class members by failing to uphold its promise to I) provide "access to and allocation of IPO shares in conformity with its first-come, first served policy"; and ii) comply with its anti-flipping policy. Although all of the proposed class members entered into identical agreements obtained via the Internet, Plaintiffs fail to allege that Defendants breached its contract with each of the 41,000 proposed class members. The Court read and considered Plaintiffs' Complaint and Briefs, including the attached five letters to Defendants from purported class members which describe problems obtaining IPOs and with mail server connections. However, the Court does not find that the typicality prerequisite is satisfied as to Plaintiffs breach of contract claim. A mere eight people, including Plaintiffs, registering complaints about IPO allocations fails to constitute a class. While Plaintiffs contend that they intend to prove a system-wide failure to allocate IPOs on a first-come, first-served basis, they fall short of alleging that the contract was breached as to even a small percentage of the 41,000 purported class members. Defendants argue that each of the 41,000 proposed members did not make offers for IPOs. Plaintiffs counter-argue that they do not need to allege the contract was breached as to each proposed member because of the "system-wide" failure of proper allocation. The Court disagrees with Plaintiffs' view and finds they do not satisfy the typicality prerequisite for their breach of contract claim. Plaintiffs do not allege that the 41,000 class members made timely offers for IPOs which were not filled nor that a forty members of the class made offers that were unfilled. Plaintiffs merely speculate, based on the letters of five other customers complaining of similar problems purchasing IPOs and executing trades, that the contract was breached as to the entire class. Five customers complaining of similar problems does not constitute evidence sufficient to support a finding that claims of the class as proposed are typical of Plaintiffs. Therefore the Court finds that Plaintiffs do not meet the typicality requirement with respect to their breach of contract claims.
But cf. Heartland Communications v. Sprint Corp., 161 F.R.D. 111, 116 (D. Kan. Apr. 20, 1995) (finding that where the purported class is "all Sprint Partners who are entitled to commissions . . .," and all members of the purported class signed entered into identical contracts with the defendant, plaintiffs claims are typical to the proposed class).
Next, Plaintiffs allege that Defendants breached the implied covenant of good faith and fair dealing. In their complaint, Plaintiffs allege a laundry list of shortcomings on Defendants' part which they assert constitute a breach of the implied covenant of good faith and fair dealing. The Court finds that Plaintiffs have the same problem with this cause of action as with breach of contract. Plaintiffs rely on allegations of a "system-wide" failure or breakdown concerning IPO allocations and support systems to support their argument that a breach of implied covenant is typical to all of Defendants' customers who executed the account agreement posted on the Internet, i.e., the 41,000 proposed class members. However, this is a mere allegation which even Plaintiffs' complaint fails to support. Plaintiffs have only alleged five customers with similar complaints which does not constitute claims of the proposed 41,000 member class. Therefore the Court finds that Plaintiffs do not satisfy the typicality prerequisite with respect to their breach of implied covenant of good faith and fair dealing claim.
Specifically, Plaintiffs allege that Defendants breached the covenant by:
[F]ailing to maintain adequate computer, communications, personnel, accounting, bookkeeping, and/or other support systems and facilities necessary to provide plaintiffs with among other things:
(a) IPO allocations on a first-come/first-served basis;
(b) timely execution of orders;
(c) access to IPOs;
(d) timely notification of unexecuted orders so as to allow plaintiffs to make other arrangements to purchase the same or similar securities elsewhere; and
(e) priority in future allocation in accordance with its anti-flipping policy.
In Count V of their Complaint, Plaintiffs allege breach of fiduciary duty. Plaintiffs allege that Defendants had a fiduciary duty to maintain its facilities, provide the services offered, fulfill its representations and comply with its policies. Stockbrokers have a fiduciary duty to "carry out the customer's instructions promptly and accurately," and "act in the customer's best interests. . . ." The Court finds that the claims alleged by Plaintiffs with regard to Defendants' alleged breach of fiduciary duty are not typical of the purported 41,000 member class. The primary basis of this cause of action, as with the aforementioned, is Defendants' alleged failure to follow its IPO allocation policy of first-come, first-served. After reviewing the five complaint letters outlining problems with Defendants' IPO allocation with Plaintiffs allegations, the Court finds that Plaintiffs also fall short of satisfying the typicality prerequisite with regard to breach of fiduciary duty. Plaintiffs rely on the five complaint letters in alleging that Defendants breached their fiduciary duty to the entire proposed class of 41,000 plus customers. However, the Court finds there is insufficient objective evidence to support this claim. Common sense dictates that some customers of an on-line brokerage service are bound to have some of the same difficulties in conducting business but that does not mean all customers or even many customers had the same problems. In addition, as to customers who may have had problems executing buy and/or sell orders, there are many variables regarding the circumstances and conditions for each customer's transaction. Variables such as, but not limited to, account status, time of order, i.e., time of day and day of the week, and the customer's computer modem capabilities and internet service provider. Plaintiffs fail to allege sufficient evidence that this claim is typical of the proposed class under like or similar circumstances.
O'Mally v. Boris, Del. Supr., 742 A.2d 845, 849 (1999).
Plaintiffs also allege negligence in their Complaint. Plaintiffs assert that Defendants owed a duty of reasonable care to maintain the facilities and support systems necessary to provide the services offered its members. Plaintiffs assert that Defendants failed to use reasonable care in managing customer orders in a fair, consistent, and reasonable manner as required by the governing professional standards. Plaintiffs assert that they and the proposed classed members suffered damages due to Defendants' negligence.
The Court finds that Plaintiffs have the same problem with their negligence claim as with the previous claims. Again, Plaintiffs have failed to show that the claims are typical to the class members. Assuming arguendo Defendants had a duty to all of the class members, Plaintiffs have failed to sufficiently allege a breach, causation, and damages as to the proposed 41,000 class members. In addition, Plaintiffs have another problem with their negligence claim in that they only seek economic damages. Plaintiffs fail to allege any conduct on the part of Defendants caused damage to their persons or property. Instead Plaintiffs allege they lost money because they were not able to purchase IPOs and their purchase and/or sell orders were not executed in a timely manner. Pursuant to Delaware law, purely economic losses are unrecoverable by way of a tort claim. Plaintiffs' negligence claim is not proper without personal, product, or property damage. Adequacy of Representation. The adequate representation prerequisite has two elements: (1) the class counsel must be qualified, experienced and generally able to conduct the proposed litigation; and (2) the class representatives must not have interests antagonistic to those of the class. In this case, there is no dispute between the parties that there is adequate representation and the Court does find a problem with the representation. Therefore, the Court finds that Rule 24(a)(4) is satisfied.
See Sterling v. Beneficial National Bank, N.A., Del. Super., C.A. No. 91C-12-005, Ridgely, P.J. (Apr. 13, 1994) (Order at 3) (citing Danforth v. Acorn Structures, Inc., Del. Supr., No. 479, 1991 (Jun. 18, 1992) (Order at 17)).
The Court finds that Plaintiffs' Motion for Class Certification must be denied because the Rule 23(a)(3) prerequisite is not satisfied. Even if some of the claims satisfied all of the Rule 23(a) prerequisites the case is not certifiable under Rule 23(b).
Super. Ct. Civ. R. 23(b).
Superior Court Civil Rule 23(b) states:
An action may be maintained as a class action if the prerequisites of paragraph (a) are satisfied, and in addition:
(1) The prosecution of separate actions by or against individual members of the class would create a risk of:
(A) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(B) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) The Court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class actions is superior to other available methods for the fair and efficient adjudication of the controversy. The matter pertinent to the findings include:
(A) The interest of members of the class in individually controlling the prosecution or defense of separate actions;
(B) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;
(C) The desirability or undesirability of concentrating the litigation of the claims in the particular forum;
(D) The difficulties likely to be encountered in the management of a class action.
Plaintiffs contend that this case is certifiable under Rule 23(b)(1)(A). Plaintiffs submit that if individual actions were brought against Defendants the result may be inconsistent and varying adjudications thereby instituting incompatible standards of conduct for Defendants. Defendants contend that Delaware Courts and other courts have consistently held that it is inappropriate to certify a class under Rule 23(b)(1)(A) where the primary form of relief sought is monetary damages. Defendants argue that Plaintiffs seek only money damages for lost profits and the mere possibility that Defendants could be forced to pay lost profits in one case and not another does not satisfy the requirement of "incompatible standards of conduct," thus, certification under Rule 23(b)(1)(A) should be denied.
The Court agrees with Defendants and find that this case cannot be certifiable under Rule 23(b)(1). Where a plaintiff seeks only monetary damages, Rule 23(b)(1) is inappropriate because "inconsistent standards for future conduct are not created because a defendant might be found liable to some plaintiffs and not to others." Plaintiffs claims are primarily for monetary damages therefore not certifiable under Rule 23(b)(1)(A).
See Dieter v. Prime Computer, Inc., Del. Ch., 681 A.2d 1068, 1074 (1996) (citations omitted); 5 Moore's Federal practice 3d § 23.22[5]).
Plaintiffs also contend that their claims are certifiable under Rule 23(b)(3). Plaintiffs maintain that all members of the class executed the same Account Agreement which provided that New York law apply to all contract claims. It is the Court's understanding that Plaintiffs also argue that New York law will apply to the entire controversy, therefore "the common legal and factual questions . . ., will be virtually identical in all cases." Plaintiffs also contend that with regard to their negligence claim, there are common questions concerning Defendants' duty to maintain sufficient resources and facilities. Additionally, Plaintiffs contend that the amounts in controversy for individual class members would not justify the expense of prosecuting a "complex action" such as this, so that there would be no interest in prosecuting individual claims. Finally, Plaintiffs argue that Delaware is a desirable forum for the litigation because Defendants are a Delaware corporation and prosecution as a class action is the most efficient way to determine Defendants' liability to the class members since the Court is already familiar with the issues.
Defendants argue that Plaintiffs' claims are not certifiable under Rule 23(b)(3). Defendants submit that all proposed class members were not necessarily damaged due to Defendants' alleged conduct. For instance, Defendants submit that even if on a particular day the software would not recognize a certain stock symbol, account holders who did not buy or sell on that particular day or time would not have been damaged. Defendants argue that in order to determine whether the elements of the claims have been satisfied, evidence of the individual characteristics of each account holder must be examined. Defendants contend that the Court must make multiple determinations as to each individual account holder in order to ascertain whether the class member could meet the necessary elements of the claims. Defendants argue that the determinations the Court would have to make include, but are not limited to: (1) whether each class member requested and received or did not receive IPO allocations; (2) whether the members who requested but did not receive allocations had sufficient funds in their accounts; (3) whether the members who did not receive allocations were subject to the anti-flipping policy and whether the policy was correctly applied; and (4) whether those members who chose not to sell IPO shares did so in reliance on the anti-flipping policy or because of an investment decision unrelated to the anti-flipping policy. Defendants contend that since New York law applies to any contract claims based on the Account Agreement, each proposed class member will have to allege more than the fact that he or she was an account holder. Defendants argue that each individual class member will have to provide evidence that he or she suffered an injury caused by the problems alleged by Plaintiffs.
Defendants argue that New York law applies only to contract claims and not to breach of fiduciary duty and negligence claims. With regard to Plaintiffs' breach of fiduciary duty and negligence claims, Defendants argue that Plaintiffs have failed to support their claim that New York law will apply thereby resulting in a common question of law versus the application of the law of the states of each of the proposed class members. Defendants contend that Plaintiffs avoid the issue by summarily asserting that the common question to the class members is whether Defendants' facilities were sufficient. Defendants' argue that in order to apply the law of one state to all the class action claims, Plaintiffs must show a significant contact or aggregation of contacts with respect to the claims asserted by each individual member of the proposed class. Defendants submit that Plaintiffs have failed to satisfy this burden.
A class action suit may be maintained under Rule 23(b)(3) if the Court finds that i) questions of law or fact common to the class predominate over any questions affecting individual members and ii) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Satisfaction of the commonality requirement does not guarantee certification under Rule 23(b)(3) because this rule is far more demanding.
Super Ct. Civ. R. 23(b)(3).
Mentis, at 7 (citing Amchem Products, Inc. v. Windsor, et al., 521 U.S. 591. 623-24, 117 S.Ct 2231, 2249 (1997)).
The Court finds that this case is suited better for individualized inquiries into the circumstances of each of the particular claims. There are many different scenarios as to each of the 41,000 proposed class members. Assuming arguendo that each of the proposed members have viable claims against Defendant, as asserted by Plaintiffs, the factual circumstances of the claims are too varied to be maintained as a class. The issues and circumstances as they relate to Defendants' alleged wrongful conduct have to be examined individually in order to determine damages. For instance, Defendants are correct in stating that even if Defendants failed to follow its first-come, first-served policy as to a particular IPO, not all 41,000 members of the proposed class were necessarily injured since not all made offers. Also, even if on a particular day and time Defendants' Internet servers were down and trading could not be accomplished, not all 41,000 were necessarily injured. The Court finds that the factual issues are too individualized; and therefore, not proper for class certification under Rule 23(b)(3).
CONCLUSION
In summary, the Court finds that (1) pursuant to Delaware law, Plaintiffs claims of common law fraud and negligent misrepresentation are barred from being brought as class action claims; (3) Plaintiffs' claim of Violation of the Delaware Consumer Fraud Act cannot be maintained since Plaintiffs fail to allege that any deceptive conduct occurred in Delaware; and (4) Plaintiffs claims of breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, and negligence are not typical of the claims of the proposed 41,000 class members, and therefore fail to satisfy the Rule 23(a) prerequisites for class certification.
For the foregoing reasons, Plaintiffs' Motion for Class Certification is hereby
DENIED.
IT IS SO ORDERED.