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Would-be class action plaintiffs lacked privity, missed statute of limitations, and could not show proximate cause; Court grants summary judgment for class action firm

Bridgitte Decker, et al. v. Nagel Rice, LLC, et al., United States District Court, Southern District of New York, May 28, 2010

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Barry Jacobs and associate Shari Sckolnick won a dismissal of all claims against the client law firm, brought by a group of individuals who had survived an Austrian ski train fire in 2000. The survivors, and their family members, asserted claims for legal malpractice, negligence, breach of fiduciary duty, breach of contract and conflict of interest, alleging the defendant firm had failed to pursue their class action claims, when they had been decertified as part of an “opt-in” class.

The United States Court of Appeals for the Second Circuit had held that the survivors could still pursue claims as an “opt-out” class. Before any re-filing was attempted, however, the litigation was settled. Successor counsel did not take the opportunity to re-file within the time permissible. Eventually the survivors’ right to re-file expired. The survivors sued the firm, and the firm immediately moved to dismiss for failure to state a claim.

In her 26-page Opinion/Order, United States District Judge Shira A. Scheindlin found that the legal malpractice claims failed because the firm only represented the members of the class action “opt-in” class, i.e., the estates of those who perished in the fire and their family members. Further, the survivors had not alleged that any wrongful conduct by the law firm had happened in the three years prior to the filing of the suit. Moreover, plaintiffs’ allegations could not establish proximate cause, since they did not show how a better result might have been obtained in lieu of the settlement.

Plaintiffs had not avoided the statute of limitations problem, the Court said, by asserting claims with six-year time limits. Those claims were merely duplicative, and they were dismissed as well. Plaintiffs' fraud claim lacked the specificity required under Federal Rules.