Successful Defense of Class Certification
An international leasing company that bought and sold telephone equipment and public access services developed by a telecommunications company, under the moniker “Power of $Zero” program (POZ). When the telecomm company went bankrupt and stopped providing public access services, many of the businesses stopped making their lease payments, claiming that the bundled nature of the program was misrepresented to them in their contracts with the program vendor and through oral representations from the independent sales agents. Dilworth was retained to defend the leasing company.
Dilworth attorneys engaged in extensive discovery to establish that the facts in each claim varied in several key respects, successfully demonstrating that the claims needed to be addressed on a case-by-case basis. The Court agreed with this position, and also found that plaintiffs had failed to meet their burden of showing that they could adequately represent class members, and failed to establish that a class action was the best method for resolving the disputes. The Court finally noted that “there was absolutely no evidence of wrongdoing”, ultimately saving the client from a claim exceeding $37,000,000.
This decision will be a powerful tool for financial services companies to argue against class certification in cases arising out of programmatic failure. The decision establishes that individual negotiations between program vendors, sales agents, and lessees likely preclude class treatment of claims or counterclaims based upon the allegation that lessees were fraudulently persuaded to enter their lease agreements.