Second Circuit – Class Certification: Johnson v. Nextel Communications Inc.

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U.S. Court of Appeals for the Second Circuit – Class Certification – Choice-of-law – Predominate Issues

Johnson v. Nextel Communications Inc.

14-454

Judges Wesley, Hall and Lynch

Background: The plaintiffs, 587 former and current employees of the defendant filing discrimination claims against the defendant, agreed to set up a dispute resolution process whereby all of the plaintiffs’ claims would be resolved without litigation. After most cases were resolved, a group of employees brought suit on behalf of the entire class against Nextel and the plaintiffs’ attorneys alleging breach of fiduciary duty, legal malpractice, and breach of contract. The defendants appealed from an order certifying the class.

Ruling: The Second Circuit vacated and remanded for further proceedings. The court held that district court erred in its choice-of-law analysis and that a proper analysis makes clear that the individual issues in this case will predominate over the common issues the plaintiffs identified. The district court had applied New York law to all of the class members’ claims, even though the class members hailed from twenty-seven different states. Indeed a Colorado state court had held that, under Colorado law, individual clients’ waivers of the law firm’s conflict of interest eliminated the law firm’s liability as to those clients.

Jennifer F. Connolly of Hagens Berman Sobol Shapiro for the plaitniffs-appellees; Mark D. Harris of Proskauer Rose for the defendants-Appellants