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Class Action Defense Cases—In re Vonage IPO: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In District of New Jersey

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Rejecting Opposition by Plaintiffs in One Class Action based on Pending Motion for Remand of Class Action to State Court

Fourteen securities class action lawsuits – 13 in New Jersey and one in New York – were filed against various defendants based on the initial public offering of Vonage common stock. In re Vonage Initial Public Offering (IPO) Securities Litig., ___ F.Supp.2d ___, 2007 WL 128791, *1 (Jud.Pan.Mult.Lit. 2007). Defense attorneys for six of the defendants moved the Judicial Panel for Multidistrict Litigation (MDL) for centralization of the class actions pursuant to 28 U.S.C. § 1407, but did not suggest an appropriate transferee court. Vonage and other parties later requested that the class actions be consolidated in the District of New Jersey; lead counsel for the New Jersey class action plaintiffs joined in that request. Id. The New York class action plaintiff opposed the motion, asserting that the federal court lacked jurisdiction over his class action complaint because he had filed a motion to remand the class action to state court. Id. The Judicial Panel granted the motion to centralize the class actions, finding that the lawsuits “involve common questions of fact” and that centralization “will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation.” Id. The Panel selected the District of New Jersey as the transferee court because “i) all but one of the actions in this docket were initially brought in that district; ii) Vonage is located in that district, and many of the relevant acts and transactions are alleged to have taken place there; and iii) no party supports centralization in any other district.” Id. The Panel rejected New York plaintiff’s federal jurisdiction argument, explaining that if his pending motion to remand the class action to state court is not resolved by the time of the transfer under section 1407, “[it] can be presented to and decided by the transferee judge.” Id. (citations omitted).

Download PDF file of In re Vonage IPO Transfer Order