Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176 (2d Cir. 1990). · Go Syfert
Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176 (2d Cir. 1990). Cases Citing This Book View Copy Cite
406 citation events (307 in the last 25 years) across 66 distinct courts.
Strongest positive: Del Rosario v. Sazerac Company, Inc. (nysd, 2025-07-01) · Strongest negative: Morangelli v. Chemed Corp. (nyed, 2011-06-16)
Treatment trajectory · 1990 → 2026 · click a year to view as-of
1990 2008 2026
Top citers, strongest first. 50 distinct citers. How cited ↗
discussed Cited "but see" Morangelli v. Chemed Corp.
E.D.N.Y · 2011 · signal: but see · confidence high
Wright et al., supra, § 1764; McLaughlin, supra, § 4:18; but see Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990) (recognizing that the question has been raised under both requirements of Rule 23(a)).
discussed Cited "but see" Andres v. City of Jacksonville
Fla. Dist. Ct. App. · 2005 · signal: but see · confidence high
But see Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176 , 178-79 (2d Cir.1990); Nichols v. Mobile Bd. of Realtors, Inc., 675 F.2d 671, 675 (5th Cir. Unit B 1982).
discussed Cited "but see" Vernon v. Great Western Bank
Cal. Ct. App. · 1996 · signal: but see · confidence high
Co. (3d Cir. 1977) 566 F.2d 444, 445-446 ; Ash v. Cvetkov (9th Cir. 1984) 739 F.2d 493, 497-498 [on appeal from a judgment of dismissal for failure to prosecute, the court will not review earlier orders which would ordinarily merge into a final judgment whether the dismissal was willful or the result of negligence or mistake]; Weil v. Investment/Indicators, Research & Management (9th Cir. 1981) 647 F.2d 18 , 26 [even where the dismissal is improper and therefore reversed, the earlier order will not be reviewed on the theory that it is only properly before the court on appeal from the final jud…
examined Cited as authority (verbatim quote) Del Rosario v. Sazerac Company, Inc.
S.D.N.Y. · 2025 · signal: see · quote attribution · 1 verbatim quote · confidence high
regardless of whether the issue is framed in terms of the typicality of the representative's claims . . . or the adequacy of its representation, . . . there is a danger that absent class members will suffer if their representation is preoccupied with defenses unique to it.
examined Cited as authority (verbatim quote) Del Rosario v. Sazerac Company, Inc.
S.D.N.Y. · 2025 · signal: see · quote attribution · 1 verbatim quote · confidence high
regardless of whether the issue is framed in terms of the typicality of the representative's claims . . . or the adequacy of its representation, . . . there is a danger that absent class members will suffer if their representation is preoccupied with defenses unique to it.
examined Cited as authority (verbatim quote) Doe 1 v. JP Morgan Chase & Co. (2×)
S.D.N.Y. · 2023 · quote attribution · 2 verbatim quotes · confidence high
lass certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation . . . .
discussed Cited as authority (verbatim quote) Bank v. ICOT Holdings, LLC
E.D.N.Y · 2023 · signal: see · quote attribution · 1 verbatim quote · confidence high
class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation
examined Cited as authority (verbatim quote) Jensen v. Cablevision Sys. Corp.
E.D.N.Y · 2019 · signal: see · quote attribution · 1 verbatim quote · confidence high
regardless 125 of whether the issue is framed in terms of the typicality of the representative's claims ... or the adequacy of its representation ... there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.
examined Cited as authority (verbatim quote) Hoefer v. Board of Education of the Enlarged City School District (2×) also: Cited as authority (rule)
2d Cir. · 2016 · signal: see · quote attribution · 1 verbatim quote · confidence high
thus, we hold that for purposes of appellate review, an order denying a motion for class certification merges into a final judgment which results from the class representative's failure to prosecute its individual claim.
examined Cited as authority (verbatim quote) Francis Hoefer v. Bd. of Educ. of Middletown
2d Cir. · 2016 · signal: see · quote attribution · 1 verbatim quote · confidence high
thus, we hold that for purposes of appellate review, 12 an order denying a motion for class certification merges into a final judgment which 13 results from the class representative's failure to prosecute its individual claim.
examined Cited as authority (verbatim quote) Lapin v. Goldman Sachs & Co.
S.D.N.Y. · 2008 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
regardless of whether the issue is framed in terms of the typicality of the representative's claims ... or the adequacy of its representation ... there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.
discussed Cited as authority (verbatim quote) Stanich v. Travelers Indemnity Co. (2×) also: Cited "see, e.g."
N.D. Ohio · 2008 · quote attribution · 1 verbatim quote · confidence high
here is a danger that ... the class will suffer if representative is preoccupied with defenses.
examined Cited as authority (verbatim quote) Beck v. Maximus, Inc. (3×) also: Cited "see, e.g."
3rd Cir. · 2006 · signal: see, e.g. · quote attribution · 2 verbatim quotes · confidence high
lass certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.
examined Cited as authority (verbatim quote) Koppel v. 4987 Corp. (3×) also: Cited "see", Cited "see, e.g."
S.D.N.Y. · 2000 · quote attribution · 1 verbatim quote · confidence high
gary plastic
discussed Cited as authority (verbatim quote) Savino v. Computer Credit, Inc.
E.D.N.Y · 1997 · signal: see · quote attribution · 1 verbatim quote · confidence high
class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation
examined Cited as authority (quoted) In re Digital Music Antitrust Litigation (3×) also: Cited "see"
S.D.N.Y. · 2017 · quote attribution · 1 verbatim quote · confidence low
gary plastic
discussed Cited as authority (rule) Divon Daniel Wray v. Experian Information Solutions, Inc. et al.
N.D.N.Y. · 2026 · confidence medium
Corp., 222 F.3d 52 , 59 (2d Cir. 2000) reports for impermissible purposes without authorization, (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, and for preventing disputed hard inquiries from being Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. disseminated in subsequent consumer reports.
discussed Cited as authority (rule) Maroney v. Woodstream Corporation
S.D.N.Y. · 2025 · confidence medium
“Class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” Passman v. Peloton Interactive, Inc., 671 F. Supp. 3d 417 , 444 (S.D.N.Y. 2023) (alteration adopted) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 582 U.S. 23 (2017)); see also Bowling v. Johnson & Johnson, No. 17-CV-3982, 2019 WL 1760162 , at *4 (S.D.N.Y.
discussed Cited as authority (rule) Newman v. Bayer Corporation
S.D.N.Y. · 2025 · confidence medium
“Class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” Passman v. Peloton Interactive, Inc., 671 F. Supp. 3d 417 , 444 (S.D.N.Y. 2023) (alteration adopted) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 582 U.S. 23 (2017)); see also Bowling v. Johnson & Johnson, No. 17-CV-3982, 2019 WL 1760162 , at *4 (S.D.N.Y.
discussed Cited as authority (rule) B & R Supermarket, Inc. v. Visa, Inc.
E.D.N.Y · 2024 · confidence medium
Id. at 88 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 582 U.S. 23 (2017)).
discussed Cited as authority (rule) Salinas v. Nestle Purina PetCare Company
E.D. Cal. · 2024 · confidence medium
Importantly, a named 12 plaintiff does not satisfy the typicality requirement when “there is a danger that absent class members 13 will suffer if their representative is preoccupied with defenses unique to [him].” Id. (quoting Gary 14 Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 15 1990)); see also Kayes v. Pac.
discussed Cited as authority (rule) Dz Reserve v. Meta Platforms, Inc.
9th Cir. · 2024 · confidence medium
A named plaintiff is not typical if “there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)).
discussed Cited as authority (rule) Woodhams v. GlaxoSmithKline Consumer Healthcare Holdings (US) LLC.
S.D.N.Y. · 2024 · confidence medium
“The Second Circuit has instructed that ‘the mere existence of individualized factual questions with respect to the class representative’s claim will not bar class certification . . . [but] class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.’” Bowling, 2019 WL 1760162 , at *4 (citing Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990) (abrogated on other grounds)).
discussed Cited as authority (rule) Chahal v. Credit Suisse Group AG
S.D.N.Y. · 2024 · confidence medium
But even assuming that traceability is a “unique defense,” that general rule is “not rigidly applied in this Circuit,” and the “mere existence of individualized factual questions with respect to the class representative’s claim will not bar certification.” Id. at 365–66 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 582 U.S. 23 , (2017)).
discussed Cited as authority (rule) Brinkley v. Monterey Financial Services, Inc.
S.D. Cal. · 2022 · confidence medium
A court should not certify a class, however, if “there is a danger that 16 absent class members will suffer if their representative is preoccupied with defenses unique 17 to it.” Hanon, 976 F.2d at 508 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, 18 Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)). 19 Here, the Court finds that Plaintiff’s particular factual situation requires her to meet 20 a defense (implied consent) that is not typical of the defenses which may be raised against 21 other members of the proposed class and sub-classes.6 See id.
discussed Cited as authority (rule) Taylor v. Populus Group, LLC
S.D. Cal. · 2022 · confidence medium
Cal. 1985)). “[C]lass 10 certification should not be granted if ‘there is a danger that absent class members will suffer 11 if their representative is preoccupied with defenses unique to it.’” Id. (quoting Gary Plastic 12 Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d 13 Cir. 1990)). 14 Mr. Taylor alleges he and all Class Members suffered the same violations as a result 15 of Populus’s rounding system.
discussed Cited as authority (rule) In Re SmileDirectClub, Inc. Securities Litigation (2×)
Tenn. Ct. App. · 2022 · confidence medium
Bank of Peoria, 496 F.2d 1162, 1164-65 (7th Cir. 1974) (citation omitted); see also In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 599-601 (3d Cir. 2009); Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990) (citations omitted); Rolex Emps.
discussed Cited as authority (rule) Didonato v. GS Services Limited Partnership
S.D.N.Y. · 2021 · confidence medium
Courts also consider whether the “putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017); accord de Lacour v. Colgate- Palmolive Co., 338 F.R.D. 324 , 337-38 (S.D.N.Y. 2021).
discussed Cited as authority (rule) Garcia v. Stemilt Ag Services LLC
E.D. Wash. · 2021 · confidence medium
Unique Defenses 15 Defendant next argues that named Plaintiffs will be subject to unique cross- 16 examination that prevent them from adequately representing the interests of the 17 class and make them atypical representatives. “[W]hen named plaintiffs are subject 18 to unique defenses which could skew the focus of the litigation, district courts 19 properly exercise their discretion in denying class certification.” Alaska v. Suburban 20 Propane Gas Corp., 123 F.3d 1317, 1321 (9th Cir. 1997); see also Hanon, 976 F.2d 1 at 508 ; Koos v. First Nat’l Bank of Peoria, 496 F.2d 1162, 1164 (7th…
discussed Cited as authority (rule) de Lacour v. Colgate-Palmolive Co.
S.D.N.Y. · 2021 · confidence medium
(Opp’n at 17-18.) The “mere existence of individualized factual questions with respect to the class representative’s claim will not bar class certification,” but “class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, 137 S.Ct. 1702 (2017).
discussed Cited as authority (rule) Hamm v. Mercedes-Benz USA, LLC
N.D. Cal. · 2021 · confidence medium
Class 11 certification is inappropriate, however, if a putative class representative is subject to “unique 12 defenses which threaten to become the focus of the litigation.” Hanon v. Dataproducts Corp., 976 13 F.2d 497, 508 (9th Cir. 1992) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, 14 Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)). 15 Here, MBUSA argues that Hamm’s claims are atypical because Hamm owns only one of 16 the many iterations of the 722.9 transmissions represented throughout the putative class.
cited Cited as authority (rule) Hirsch v. USHealth Advisors, LLC
N.D. Tex. · 2020 · confidence medium
Gary Plastic, 903 F.2d at 108.
discussed Cited as authority (rule) Selena Moorer v. Stemgenex Medical Group
9th Cir. · 2020 · confidence medium
Neither Jennifer Brewer’s nor Alexandra Gardner’s circumstances render them vulnerable to “unique defenses which threaten to become the focus of the litigation.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) Page 3 of 5 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)). 3.
discussed Cited as authority (rule) Hill v. County of Montgomery
N.D.N.Y. · 2020 · confidence medium
Further, “class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.”3 Baffa, 222 F.3d at 59 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)).
discussed Cited as authority (rule) Tina Rogers v. Adventure House LLC (2×)
unknown court · 2020 · confidence medium
Bank of Peoria, 496 F.2d 1162, 1164-65 (7th Cir. 1974) (citation omitted); see also In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 599-601 (3d Cir. 2009); Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990) (citations omitted); Rolex Emps.
discussed Cited as authority (rule) Hedayatzadeh v. City of Del Mar
S.D. Cal. · 2020 · confidence medium
Thus the legal question of standing will be an 7 |limportant issue in Plaintiff's claim. 8 While the Court is mindful that typicality is a “permissive” standard, class 9 certification may not be appropriate “where a putative class representative is subject to 10 || unique defenses which threaten to become the focus of the litigation.” Hanon, 976 F.2d 11 |/at 508 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner, & Smith, 12 ||Inc., 903 F.2d 176, 180 (2d.
discussed Cited as authority (rule) Shannon v. Sherwood Management Co., Inc.
S.D. Cal. · 2020 · confidence medium
Cal. 1985)). “[C]lass 13 certification should not be granted if ‘there is a danger that absent class members will suffer 14 if their representative is preoccupied with defenses unique to it.’” Id. (quoting Gary Plastic 15 Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d 16 Cir. 1990)). 17 Plaintiff is a member of the proposed Class because she worked for Defendant during 18 the relevant period.
discussed Cited as authority (rule) Turano v. Zucker
E.D.N.Y · 2019 · confidence medium
Corp., 222 F.3d 52 , 59 (2d Cir. 2000) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), abrogated on other grounds by Microsoft Corp. v. Baker, ––– U.S. ––––, 137 S.Ct. 1702 , 198 L.Ed.2d 132 (2017)). 14 Here, the Plaintiff and the putative class members were subject to the same course of conduct by the DOH, and will proceed on virtually the same legal theories, satisfying the typicality inquiry.
discussed Cited as authority (rule) David And Marissa Turk, V United Service Automobile Assoc.
Wash. Ct. App. · 2018 · confidence medium
Several federal courts “have held that ‘class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)).
discussed Cited as authority (rule) Monaco v. Sullivan
2d Cir. · 2018 · confidence medium
Corp., 222 F.3d 52 , 59 (2d Cir. 2000) (“[C]lass certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.”) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)).
discussed Cited as authority (rule) Kurtz v. Kimberly-Clark Corp. (2×)
E.D.N.Y · 2017 · confidence medium
Energy Holdings, 210 F.R.D. 476, 484 (S.D.N.Y. 2002) (“While the extent of any non-reliance on [plaintiffs’] part will certainly be a fact question to be decided at trial, it is unlikely to significantly shift the focus of the litigation to the detriment of the absent class members.”). “[T]he existence of defenses unique to the named plaintiff may preclude class certification only if the unique defenses ‘threaten to become the focus of the litigation.’ ” Butto v. Collecto Inc., 290 F.R.D. 372, 384 (E.D.N.Y. 2013) (citing Gary Plastic Packaging v. Merrill Lynch, 903 F.2d 176, 180 …
discussed Cited as authority (rule) Nghiem v. Dick's Sporting Goods, Inc.
C.D. Cal. · 2016 · confidence medium
Typicality Rule 23(a)(3) requires that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” The purpose of the typicality requirement is to “assure that the interest of the named representative aligns with the interests of the class.” Hanon v. Dataproducts Corp., 976 F.2d 497, 608 (9th Cir. 1992). “[A] named plaintiffs motion for class certification should not be granted if ‘there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.’ ” Id. (quoting Gary Plastic …
discussed Cited as authority (rule) LeFande v. District of Columbia
D.C. Cir. · 2016 · confidence medium
Addison & Associates, 156 F.3d 101, 105-07 (1st Cir. 1998) (declining review), with Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 179 (2d Cir. 1990) (permitting review).
discussed Cited as authority (rule) Steginsky v. Xcelera Inc.
2d Cir. · 2016 · confidence medium
The Court did not err, much- less “abuse its discretion,” in determining that Stegin-sky’s unique susceptibility to the defense of non-reliance rendered her an unsuitable representative plaintiff. 2 See Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 179-80 (2d Cir. 1990) (“[C]lass certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” (citations omitted)).
cited Cited as authority (rule) Labrier v. State Farm Fire & Casualty Co.
W.D. Mo. · 2016 · confidence medium
Breach Litig., 246 F.R.D. 389, 394 (D.Mass.2007) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2nd Cir.1990)).
discussed Cited as authority (rule) Teets v. Great-West Life & Annuity Insurance
D. Colo. · 2016 · confidence medium
Even if it were a clear and binding admission, it does not “threaten to become the focus of the litigation.” Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990).
discussed Cited as authority (rule) Painters & Allied Trades District Council 82 Health Care Fund v. Forest Laboratories, Inc.
D. Mass. · 2016 · confidence medium
There is no danger that “absent class members will suffer if [Painters] is preoccupied with defenses unique to it.” See Swack, 230 F.R.D. at 260 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990)).
discussed Cited as authority (rule) Estate of Gardner v. Continental Casualty Co.
D. Conn. · 2016 · confidence medium
Further, while “class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation,” Ramirez, 39 F.Supp.3d at 362 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990)), Defendant has not shown that to be the case here.
cited Cited as authority (rule) Petersen v. Costco Wholesale Co.
C.D. Cal. · 2016 · confidence medium
Game Card, Inc., 308 F.R.D. 336, 344-45 (C.D.Cal.2015) (citing Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990)).
cited Cited as authority (rule) Rivera v. Harvest Bakery Inc.
E.D.N.Y · 2016 · confidence medium
Corp., 222 F.3d 52 , 59 (2d Cir.2000) (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990)).
Retrieving the full opinion text from the archive…
Gary Plastic Packaging Corporation, a New York Corporation, for Itself and Others Similarly Situated
v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., a Delaware Corporation, and Merrill Lynch Money Markets, Inc., a Delaware Corporation
116.
Court of Appeals for the Second Circuit.
May 14, 1990.
903 F.2d 176

903 F.2d 176

Fed. Sec. L. Rep. P 95,630, 16 Fed.R.Serv.3d 700

GARY PLASTIC PACKAGING CORPORATION, a New York corporation,
for itself and others similarly situated,
Plaintiff-Appellant,
v.
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., a Delaware
corporation, and Merrill Lynch Money Markets,
Inc., a Delaware corporation,
Defendants-Appellees.

No. 116, Docket 89-7295.

United States Court of Appeals,
Second Circuit.

Argued Nov. 3, 1989.
Decided May 14, 1990.

Guy B. Bailey, Jr., Miami, Fla. (Bailey & Hunt, Miami, Fla., of counsel), for plaintiff-appellant.

William R. Glendon, New York City (Christopher W. O'Neill, Rogers & Wells, New York City, E. Michael Bradley, Paul Windels III, Brown & Wood, New York City, of counsel), for defendants-appellees.

Before VAN GRAAFEILAND, PIERCE, and PRATT, Circuit Judges.

PIERCE, Senior Circuit Judge:

[*~176]1

Gary Plastic Packaging Corp. ("Gary Plastic") appeals from a judgment of the United States District Court for the Southern District of New York, Haight, Judge, dismissing its complaint, with prejudice, for failure to prosecute, pursuant to Rule 41(b), Fed.R.Civ.P. On appeal, Gary Plastic seeks review of an order denying its motion for class certification and disqualifying its counsel. See Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 119 F.R.D. 344 (S.D.N.Y.1988).

I.

2

While we assume familiarity with both Judge Haight's reported decision and our prior opinion in this case, Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 756 F.2d 230 (2d Cir.1985), we briefly restate the relevant facts.

3

Gary Plastic is a closely-held corporation. Its four shareholders are Marilyn Schur Hellinger ("Marilyn"); her husband, Gary Hellinger; and her brothers, Kenneth and Robert Schur. Gary Hellinger is Gary Plastic's president and Robert Schur is its general counsel, vice-president and assistant secretary. Robert Schur is also affiliated with the Miami law firm of Bailey & Dawes (currently, Bailey & Hunt).

4

Since approximately 1973, Howard Schur, Marilyn's first cousin, has been a stockbroker responsible for accounts for Gary Plastic and various members of the Schur family. From 1978 until 1983, Howard Schur was a broker with appellee Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill").

5

In 1980, appellee Merrill Lynch Money Markets, Inc. ("Money Markets") initiated a program which enabled investors to purchase fully-insured $100,000 certificates of deposit ("CDs") issued by banks around the country.

6

Between May and July 1982, Gary Plastic purchased twelve short-term CDs through Merrill. In July 1982, Robert Schur also purchased a short-term CD through Merrill for his own account. Howard Schur was the broker on all of these transactions.

7

In late July 1982, Gary Hellinger discovered that the CDs which Gary Plastic had bought through Merrill paid less interest than CDs which could be bought directly from the banks which issued them. Hellinger asked Robert Schur to investigate the situation.

8

Subsequently, Gary Plastic and Robert Schur each purchased CDs directly from an issuing bank. Gary Plastic, however, continued investing in Merrill's CD program: in August 1982 and in October 1982, it "rolled over" a total of four CDs which it had purchased through Merrill.

9

In 1983, Gary Plastic retained Bailey & Dawes and filed a complaint asserting claims, on behalf of itself and a class which it sought to represent, against Merrill and Money Markets alleging securities fraud. The action was filed in the Southern District of Florida and, in November 1983, it was transferred to the Southern District of New York. In July 1985, after we reversed a grant of summary judgment in favor of the defendants, Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 756 F.2d 230 (2d Cir.1985), Gary Plastic moved for class certification.

10

On February 10, 1988, Judge Haight denied this motion and, pursuant to DR 5-102(A) of New York's Code of Professional Responsibility, disqualified Bailey & Dawes from pursuing Gary Plastic's individual claims. Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 119 F.R.D. 344 (S.D.N.Y.1988).

[*~177]11

Judge Haight scheduled a pre-trial conference for April 22, 1988. Gary Plastic failed to appear at this conference, whereupon Judge Haight informed its local counsel of his continuing obligations and scheduled another conference for June 17, 1988. Plaintiff's local counsel appeared at this conference and applied for leave to withdraw. Also on June 17, 1988, Gary Plastic moved to reargue the certification and disqualification issues.

12

By order dated June 22, 1988, Judge Haight rejected the motion to reargue as untimely, relieved local counsel, and dismissed Gary Plastic's individual claims, with prejudice, for failure to prosecute. This order, however, gave Gary Plastic thirty days to find acceptable counsel and to move to vacate the order of dismissal. Three months elapsed, and on September 23, 1988, noting that Gary Plastic had not applied to have the action reopened, Judge Haight directed that judgment be entered. This appeal followed and initially raises questions of appealability.

II.

13

The denial of a class certification motion and the disqualification of counsel are interlocutory orders which are not immediately appealable under 28 U.S.C. Sec. 1291. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (class certification); Richardson-Merrell Inc. v. Koller, 472 U.S. 424, 105 S.Ct. 2757, 86 L.Ed.2d 340 (1985) (disqualification of counsel); cf. Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 336, 100 S.Ct. 1166, 1173, 63 L.Ed.2d 427 (1980) (denial of class certification appealable after entry of final judgment). Appellees assert that since Gary Plastic could not appeal the denial of its class certification motion directly, it should not be permitted to obtain appellate review by refusing to prosecute its individual claims.

14

In Coopers & Lybrand, the Court rejected the "death knell" doctrine which had treated as final, for purposes of 28 U.S.C. Sec. 1291, orders denying class certification which, as a practical matter, made it unlikely that the disappointed class representative would pursue its individual claims. 437 U.S. at 469-77, 98 S.Ct. at 2458-62. In so holding, the Court identified several flaws relating to the "death knell" doctrine: (1) the impropriety of courts, as opposed to the legislature, formulating an appealability rule which turns upon the value of the plaintiff's individual claim, id. at 472-73, 98 S.Ct. at 2459-60; (2) the potential waste of judicial resources involved in determining whether the denial of class certification was, in fact, the "death knell" of the action, id. at 473-74, 98 S.Ct. at 2460-61; (3) the discretion which the doctrine accorded to district judges, id. at 474-75, 98 S.Ct. at 2460-61; (4) the fact that the doctrine operates only to the advantage of plaintiffs, id. at 476, 98 S.Ct. at 2462; and (5) the intrusion of appellate courts in the trial process, id.

[*~178]15

In Huey v. Teledyne, Inc., 608 F.2d 1234 (9th Cir.1979), relied upon by appellees, the district court declined to certify a class and subsequently dismissed the individual claims when the putative class representative refused to proceed. The Ninth Circuit held that a putative class representative may not evade the policy against piecemeal review by waiving his individual claims: "[w]here the record shows that the denial of class certification caused the failure to prosecute, that ruling does not merge in the final judgment for purposes of appellate review...." Id. at 1240; accord Bowe v. First of Denver Mortgage Investors, 613 F.2d 798 (10th Cir.), cert. denied, 447 U.S. 906, 100 S.Ct. 2989, 64 L.Ed.2d 855 (1980); cf. Sere v. Board of Trustees, 852 F.2d 285, 288 (7th Cir.1988) (interlocutory order does not merge into final judgment where merger would reward party for bad faith and dilatory tactics).

16

By contrast, in Allied Air Freight, Inc. v. Pan American World Airways, Inc., 393 F.2d 441 (2d Cir.), cert. denied, 393 U.S. 846, 89 S.Ct. 131, 21 L.Ed.2d 117 (1968), the district court had stayed an action until the plaintiff exhausted its administrative remedies. When the plaintiff refused to pursue these remedies, the court dismissed the action. While the appellant did not deny that it had intentionally defaulted in order to obtain review of the interlocutory order staying the action, this court held that the stay was reviewable since all interlocutory orders merge into a final order. Id. at 444; cf. Drake v. Southwestern Bell Tel. Co., 553 F.2d 1185, 1186-87 (8th Cir.1977). Significantly, we expressly rejected the argument that permitting an appeal through this mechanism "would encourage all would-be appellants from interlocutory orders to do nothing [and] procure a dismissal ... which could then be appealed." Allied Air Freight, 393 F.2d at 444.

17

We decline to follow Huey and Bowe and we reject appellees' assertion that Allied Air is no longer valid in light of Coopers & Lybrand. We note that the concerns identified by the Court in Coopers & Lybrand, supra at 178-79, are inapplicable where, as here, the putative class representative's individual claims have been dismissed for failure to prosecute. Moreover, since immediate appellate review will only be available to disappointed class representatives who risk forfeiting their potentially meritorious individual claims, 7B C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 1802, at 483 (2d ed. 1986), reviewing the merits of the class certification order will not substantially undermine the policy against piecemeal review.

[*179]18

Thus, we hold that for purposes of appellate review, an order denying a motion for class certification merges into a final judgment which results from the class representative's failure to prosecute its individual claim. Cf. Nichols v. Mobile Bd. of Realtors, Inc., 675 F.2d 671, 675 (5th Cir. Unit B 1982) (stating that Fifth Circuit has sub silentio refused to follow Huey and Bowe ).

III.

19

In evaluating whether class certification is appropriate, the district court is required to consider the factors set forth in Rule 23, Fed.R.Civ.P. In light of the importance of the class action device in securities fraud suits, these factors are to be construed liberally. Green v. Wolf Corp., 406 F.2d 291, 295, 298 (2d Cir.1968), cert. denied, 395 U.S. 977, 89 S.Ct. 2131, 23 L.Ed.2d 766 (1969).

20

In the present case, Judge Haight found that Gary Plastic was an inappropriate class representative since its claim is subject to several unique defenses including its continued purchases of CDs through Merrill despite having notice of, and having investigated, the alleged fraud.

[*180]21

While it is settled that the mere existence of individualized factual questions with respect to the class representative's claim will not bar class certification, see, e.g., Green, 406 F.2d at 301; Dura-Bilt Corp. v. Chase Manhattan Corp., 89 F.R.D. 87, 98-99 (S.D.N.Y.1981), class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation, see, e.g., Kline v. Wolf, 88 F.R.D. 696, 700 (S.D.N.Y.1981) (Weinfeld, J.), aff'd in relevant part, 702 F.2d 400, 403 (2d Cir.1983); J.H. Cohn & Co. v. American Appraisal Assoc., Inc., 628 F.2d 994, 998-99 (7th Cir.1980). Regardless of whether the issue is framed in terms of the typicality of the representative's claims, Rule 23(a)(3), Fed.R.Civ.P., or the adequacy of its representation, Rule 23(a)(4), Fed.R.Civ.P., there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it. 7A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 1764, at 259-60 (2d ed.1986) (typicality); 3B J. Moore & J. Kennedy, Moore's Federal Practice p 23.07, at 23-192 (2d ed. 1987) (adequacy of representation).

[*~179]22

While the fact that Gary Plastic was the only plaintiff to come forward and seek to represent the class weighs in favor of certification, see Green, 406 F.2d at 298; Dura-Bilt, 89 F.R.D. at 101, a class "may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied," General Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982). In the factual context presented, we see no abuse of discretion in the district court's refusal to certify a class action.

23

We need not consider whether the district court erred either in disqualifying Bailey & Dawes or in dismissing Gary Plastic's individual claim with prejudice since, at oral argument, Gary Plastic conceded that it does not intend to pursue its individual claims.

IV.

24

The judgment of the district court is affirmed. Each party shall bear its own costs.