UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Guardian Angel Credit Union,

on its own behalf and on behalf

of a class of persons similarly

situated

v. Case No. 08-cv-261-PB

Opinion No. 2010 DNH 074

MetaBank, and Meta Financial

Group, Inc.

MEMORANDUM AND ORDER

Guardian Angel Credit Union (“Guardian Angel”) has renewed

its motion to certify a plaintiffs’ class action against MetaBank

and Meta Financial Group, Inc. (collectively, “MetaBank”). 

MetaBank objects, arguing that Guardian Angel cannot meet the

requirements of Federal Rule of Civil Procedure 23. For the

reasons given below, I grant Guardian Angel’s motion to certify.

I. BACKGROUND

On or about April 15, 2005, Guardian Angel deposited $99,000

with MetaBank through the use of third-party broker Jumbo CD

Investments, Inc. (“Jumbo”). Guardian Angel received a

certificate of deposit (“CD”) evidencing the deposit, naming

MetaBank as the obligor and outlining the terms of the deposit,

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 1 of 38
along with a cover letter from Charlene Pickhinke, who at the

time was a branch manager of MetaBank’s Sac City, Iowa branch. 

Guardian Angel renewed the CD on or about April 17, 2006 and

again on or about April 17, 2007. Guardian Angel had no direct

contact with MetaBank and all of its transactions with MetaBank

and Pickhinke were arranged by Jumbo. 

On or about January 25, 2008, MetaBank sent Guardian Angel a

letter stating that MetaBank had “recently become aware of

unauthorized certificates of deposit . . . issued under its logo

and brand name.” (Compl. - Class Action - Jury Trial Demand

(hereinafter “Compl.”) Ex. E, Doc. No. 1-5.) Pickhinke allegedly

absconded with Guardian Angel’s deposit as well as deposits made

with MetaBank by other members of the potential class totaling

approximately $4.2 million in face value. 

The proposed class consists of individuals and legal

entities residing and/or doing business within the United States

of America who satisfy the following criteria: (a) the class

member made a deposit with MetaBank, or any predecessor-ininterest, parent or subsidiary, or any employee, representative

or agent thereof, with the intention of receiving a CD from such

institution; (b) MetaBank, or any employee, representative or

-2-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 2 of 38
agent thereof, issued the class member a CD on account of such

deposit; (c) a MetaBank employee, representative or agent,

whether current or former, has absconded with the deposit made by

the class member; and (d) as of the date of Guardian Angel’s

complaint, MetaBank has failed to repay the class member the

deposit that it made and/or any accrued interest. (Compl., Doc.

No. 1, ¶ 21.) As of December 1, 2009, there were forty-one

potential class members spread across twenty-two states from

Hawaii to New Hampshire. (Pl.’s Mem. of Law in Supp. of Its 1

Renewed Mot. for Class Certification, Doc. No. 49-1, at 8.) 

 There are currently only thirty-eight potential class 1

members. Three of the forty-one original putative class members

have settled. (See Cesare Aff., Doc. No. 52-2, ¶ 4 (noting that

two lawsuits had settled and one, Methodist Hospitals of Dallas

v. Metabank, was scheduled for trial);

http://courts.dallascounty.org (a search for cases including the

party “Methodist Hospitals of Dallas” yielded a court docket

showing that Methodist Hospitals was dismissed following a

settlement).) 

Although five other parties have filed individual suits,

they may choose to opt in if a class is certified. One of the

five lawsuits was dismissed without prejudice, presumably to

await action in this matter, and the other four are still

pending. (See Cesare Aff., Doc. No. 52-2, ¶¶ 2-4.) Guardian

Angel’s counsel has spoken with a number of class members who

would consider dismissing their individual suits and joining the

class if it were certified. (See Pl.’s Reply Brief Regarding Its

Renewed Mot. for Class Certification, Doc. No. 55, at 10; Meier

Aff., attach. in paper format to Doc. No. 49, ¶ 19.) 

-3-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 3 of 38
Guardian Angel alleges that Pickhinke defrauded each

putative class member in a substantially identical manner. 

First, Pickhinke contacted at least three CD brokers, including

Jumbo, AVD Investments, and Great Eastern Management (“the

brokers”), and represented that Metabank had one-year term

$99,000 jumbo CDs to sell to institutional investors. (See id.

¶ 6.) Pickhinke provided the brokers with information regarding

MetaBank and instructions for making deposits to obtain the CDs. 

(Id.) The brokers in turn sent their customers information

sheets that included the terms of the CDs and instructions about

how to wire money to procure a CD. (Id.; see also Pl.’s Ex. 8,

attach. in paper format to Doc. No. 49 (copies of the instruction

sheets received by Guardian Angel and other putative class

members; these sheets show that the CDs offered around the same

time had similar, but not identical, terms). ) All but two of 2

the putative class members used the services of a broker, and

there is no indication that the two remaining class members, who

presumably communicated directly with Pickhinke, received

materially different information. (See Pl.’s Mem. of Law in

 To the extent that any of the documents referenced in 2

plaintiff’s memorandum of law in support of its renewed motion

for class certification are sealed, I hereby unseal them.

-4-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 4 of 38
Supp. of Its Renewed Mot. for Class Certification, Doc. No. 49-1,

at 4 n.2.) After receiving the relevant information, all but one

of the putative class members then wired funds to MetaBank’s

corporate account at the Federal Home Loan Bank, naming MetaBank

as the “beneficiary’s bank,” itself as the “beneficiary,” and

including “Attention Charlene” or a similar reference to the Sac

City branch of MetaBank in the instructions. (Id. ¶ 7.) When 3

the funds arrived in Metabank’s corporate account, MetaBank’s

accounting department notified Pickhinke, who credited each

deposit to her own fraudulent account at MetaBank rather than to

any account in the name of the class member. (Id.) Pickhinke

then sent each investor a cover letter on MetaBank stationary

accompanied by two copies of the CD -- one for safekeeping and

one to sign and return -- in a MetaBank envelope. (See id.; see

also Pl.’s Ex. 10, attach. in paper format to Doc. No. 49.) 

Finally, Pickhinke then “regularly issued monthly interest checks

to the depositors according to the terms of the CD, drawn against

her fraudulent account at MetaBank.” (Pl.’s Mem. of Law in Supp.

 One class member deposited the funds for the CD by check. 3

(Pl.’s Mem. of Law in Supp. of Its Renewed Mot. for Class

Certification, Doc. No. 49-1, at 4 n.3.)

Almost all of the investors deposited the same amount

($99,000), but one deposited $95,000 and another deposited

$100,000. (Id. at 4 n.4.)

-5-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 5 of 38
of Its Renewed Mot. for Class Certification, Doc. No. 49-1, ¶ 6.) 

None of the putative plaintiffs have received any interest since

January 2008, and none have been able to recover their initial

deposits. (Id. ¶ 7.) 

Guardian Angel’s complaint includes four counts. Count One

alleges that MetaBank’s failure to repay the deposit and each

class member’s accrued interest constitutes a breach of contract. 

In this count, Guardian Angel argues that Pickhinke had actual

and/or apparent authority to bind MetaBank with respect to such

contracts. Count Two alleges that MetaBank was negligent in the

hiring, retention, and supervision of Pickhinke. Count Three

alleges that MetaBank is vicariously liable for Pickhinke’s acts

and omissions, including conversion, fraud, theft, and

negligence. Count Four seeks attorney’s fees and costs. 

I denied Guardian Angel’s first motion for class

certification because Guardian Angel failed to show that common

issues would predominate over individual legal and factual

issues. (See Mem. and Order, Doc. No. 29, at 19.) Guardian

Angel now renews its motion for class certification and bolsters

its previous arguments regarding the predominance of common legal

and factual issues.

-6-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 6 of 38
II. CLASS CERTIFICATION STANDARD

Federal Rule of Civil Procedure 23 sets out the requirements

for class certification. The proposed class representative must

demonstrate that each of Rule 23’s requirements has been

satisfied. Makuc v. Am. Honda Motor Co., Inc., 835 F.2d 389, 394

(1st Cir. 1987). The class certification inquiry has two steps. 

First, the class representative must show that the proposed class

satisfies all four of Rule 23(a)’s threshold requirements, which

are commonly known as numerosity, commonality, typicality, and

adequacy. Fed. R. Civ. P. 23(a)(1)-(4); see also Berenson v.

Nat’l Fin. Servs. LLC, 485 F.3d 35, 38 (1st Cir. 2007). Second,

the class representative must demonstrate that the lawsuit may be

maintained as a class action under one of the three subsections

of Rule 23(b). Fed. R. Civ. P. 23(b). Guardian Angel argues

that its class should be certified under Rule 23(b)(3), which

requires that “the questions of law or fact common to class

members predominate over any questions affecting only individual

members, and that a class action is superior to other available

methods for fairly and efficiently adjudicating the controversy.” 

Id. 

-7-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 7 of 38
Although the Supreme Court has stated that a court should

not decide the merits of a case at the certification stage, Eisen

v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974), a motion to

certify “generally involves considerations that are ‘enmeshed in

the factual and legal issues comprising the plaintiff’s cause of

action.’” Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978)

(quoting Mercantile Nat’l Bank v. Langdeau, 371 U.S. 555, 558

(1963)). The First Circuit has determined that “[a] district

court must conduct a rigorous analysis of the prerequisites

established by Rule 23 before certifying a class.” Smilow v.

Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 38 (1st Cir.

2003); see also Gintis v. Bouchard Transp. Co., 596 F.3d 64, 66

(1st Cir. 2010). In doing so, a district court may resolve

disputed factual issues that arise in the course of class

certification by considering materials beyond the pleadings. In

re PolyMedica Corp. Sec. Litig., 432 F.3d 1, 6 (1st Cir. 2005).

III. ANALYSIS

Guardian Angel asserts that its complaint satisfies all of

Rule 23(a)’s prerequisites and that the class is eligible for

certification under Rule 23(b)(3). MetaBank challenges both

-8-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 8 of 38
contentions. I address each issue relevant to the determination

of class certification in turn. 

A. Rule 23(a)

1. Numerosity

Plaintiffs must first demonstrate that the proposed class

“is so numerous that joinder of all members is impracticable.” 

Fed. R. Civ. P. 23(a)(1); see Gen. Tel. Co. of the Nw. v. EEOC,

446 U.S. 318, 330 (1980) (“The numerosity requirement requires

examination of the specific facts of each case and imposes no

absolute limitations.”). A court should consider both the number

of members in the proposed class and their geographical

distribution in determining whether the proposed class satisfies

the numerosity requirement. See Andrews v. Bechtel Power Corp.,

780 F.2d 124, 131-32 (1st Cir. 1985). “[T]he difficulty inherent

in joining as few as [forty] class members should raise a

presumption that joinder is impracticable . . . .” 1 Alba Conte

& Herbert Newberg, Newberg on Class Actions § 3.5, at 247 (4th

ed. 2002). Although the proposed class only includes thirtyeight members, I find that the proposed class satisfies the 4

numerosity requirement because it would be impractical to join

 See footnote 1, supra. 4

-9-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 9 of 38
thirty-eight parties whose diverse geographic locations span the

United States.

2. Commonality

Rule 23(a)(2) requires that there be “questions of law or

fact common to the class.” Fed. R. Civ. P. 23(a)(2). “[I]f the

predominance standard [of Rule 23(b)(3)] is met, the Rule

23(a)(2) prerequisite is necessarily satisfied.” 2 Conte &

Newberg, supra, § 4:22. Because I conclude below that the

predominance standard is satisfied, I also conclude that the

class meets the commonality threshold. 

3. Typicality

To satisfy the typicality requirement, the class

representatives’ injuries must arise from the same event or

course of conduct as the injuries of other class members, and

their claims must be based on the same legal theories. See

Modell v. Eliot Sav. Bank, 139 F.R.D. 17, 22 (D. Mass. 1991). In

this case, Guardian Angel alleges the same injury -- the loss of

$99,000 plus interest -- arising from the same course of 5

conduct: Pickhinke’s acts of providing false information about

 Two investors deposited $95,000 and $100,000, 5

respectively. See footnote 3, supra. 

-10-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 10 of 38
available CDs, collecting investors’ funds through wire

transfers, issuing unauthorized CDs, and absconding with the

investors’ funds. 

Metabank argues that Guardian Angel’s claims are subject to

unique defenses because (1) Guardian Angel bought its CD through

its broker, Jumbo, and had no direct contact with MetaBank or

Pickhinke; (2) Guardian Angel did not verify the information

Jumbo provided and, if it had, it would have discovered that

MetaBank did not offer the CD Pickhinke was purporting to sell;

and (3) Guardian Angel failed to obtain an executed copy of its

unauthorized CD. (See Defs.’ Mem. of Law in Opp’n to Pl.’s

Renewed Mot. for Class Certification, Doc. No. 52, at 24.) These

arguments are unpersuasive. First, almost all of the putative

class members purchased their CDs through brokers, and there is

no evidence that those who communicated directly with Pickhinke

received materially different information from those who dealt

with brokers. In addition, the defendants provide no evidence

that any of the other plaintiffs verified the information their

brokers provided or obtained executed copies of their CDs. Thus,

Guardian Angel appears to be subject to typical, rather than

unique, defenses. Furthermore, even if any of these potential

-11-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 11 of 38
defenses were unique, they do not “divert attention from the

common claims of the class,” In re Bank of Boston Corp. Sec.

Litig., 762 F. Supp. 1525, 1532 (D. Mass. 1991), because the

common issues predominate over the potential unique defenses. 

Accordingly, I find that the proposed class satisfies the

typicality requirement. 

4. Adequacy

The fourth and final prerequisite of Rule 23(a) is that the

representative parties must “fairly and adequately protect the

interests of the class.” Fed. R. Civ. P. 23(a)(4). To satisfy

this prerequisite, plaintiffs must show (1) “that the interests

of the representative party will not conflict with the interests

of any of the class members” and (2) that the “counsel chosen by

the representative party is qualified, experienced and able to

vigorously conduct the proposed litigation.” Andrews, 780 F.2d

at 130. MetaBank does not dispute that Guardian Angel fulfills

the first part of this requirement.

MetaBank, however, argues that Guardian Angel does not meet

the second part of the requirement because its counsel’s actions

thus far demonstrate that they are unable to vigorously conduct

the proposed litigation. MetaBank points to two facts as

-12-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 12 of 38
evidence of counsel’s inadequacy: (1) the fact that plaintiff

has failed to conduct a single deposition, and (2) the fact that

plaintiff waited nine months after the expiration of the deadline

for amendment of pleadings to file its motion to amend its

complaint. (See Defs.’ Mem. of Law in Opp’n to Pl.’s Renewed 6

Mot. for Class Certification, Doc. No. 52, at 25.) Guardian

Angel responds that it did not need to conduct its own

depositions because the deposition testimony that it received

from counsel to other parties suing MetaBank, combined with

documentary evidence, was sufficient to support its motion for

class certification. (See Pl.’s Reply Br. Regarding Its Renewed

Mot. for Class Certification, Doc. No. 55, at 14; Meier Aff.,

attach. in paper format to Doc. No. 49, ¶¶ 2-6.) In addition,

Guardian Angel argues that its counsel’s failure to assert the

UCC claim until after consultation with an expert was excusable

as there is an absence of case law that would support such a

 MetaBank also notes that “[t]he deposition testimony of 6

the Plaintiff’s representatives revealed that neither they, nor

anyone else at the credit union, even reviewed the Complaint or

the original Motion for Class [C]ertification before they were

filed.” (See Defs.’ Mem. of Law in Opp’n to Pl.’s Renewed Mot.

for Class Certification, Doc. No. 52, at 25.) This fact,

however, does not shed light on plaintiff’s counsel’s

qualifications, experience, or ability to vigorously conduct the

litigation, nor does it show that the interests of Guardian Angel

will conflict with the interests of other class members. 

-13-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 13 of 38
claim. (See Pl.’s Reply Br. Regarding Its Renewed Mot. for Class

Certification, Doc. No. 55, at 14.) Finally, Guardian Angel

notes that its counsel have experience with class action

litigation and have already taken steps to vigorously conduct the

litigation, including speaking with representatives of thirtythree of the proposed class members and the three relevant

brokers. (See id. at 13; Meier Aff., attach. in paper format to

Doc. No. 49, ¶¶ 18, 20.) MetaBank has cited no case law, nor

have I found any, that suggests that Guardian Angel’s counsel’s

performance has fallen below the standards of Rule 23(a). 

Accordingly, I find that Guardian Angel meets the adequacy

requirement. 

B. Rule 23(b)(3)

A class may proceed under Rule 23(b)(3) if two criteria are

met. First, common questions of law or fact must predominate

over any questions affecting only individual members. Fed. R.

Civ. P. 23(b)(3). Second, a class action must be “superior to

other available methods for fairly and efficiently adjudicating

the controversy.” Id. These two requirements ensure that class

certification is granted “only where the adjudication of common

issues in a single action will achieve judicial economies and

-14-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 14 of 38
practical advantages without jeopardizing procedural fairness.” 

Rothwell v. Chubb Life Ins. Co. of Am., 191 F.R.D. 25, 29 (D.N.H.

1998). 

MetaBank presents two arguments against predominance. 

First, MetaBank argues that individual legal issues will

predominate if the case is tried as a class action because each

plaintiff’s claims will be governed by the law of the plaintiff’s

state rather than the law of Iowa, the state where MetaBank was

based and the place where Pickhinke worked. Second, MetaBank

claims that even under Iowa law, the plaintiffs’ claims will

present unique factual issues that will defeat predominance. In

addition, MetaBank argues that a class action is not a superior

method of adjudication in this case. 

1. Predominance of Common Legal Issues

MetaBank’s legal complexity argument depends on its

assertion that New Hampshire choice-of-law principles require the

application of many states’ laws to the putative class members’

claims. MetaBank is correct that New Hampshire choice-of-law

principles govern: a federal court must apply the forum state’s

choice-of-law rules when, as in this case, federal jurisdiction

is based on diversity of citizenship. Klaxon Co. v. Stentor

-15-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 15 of 38
Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Choice-of-law

questions also must be answered on an issue-by-issue basis. 

LaPlante v. Am. Honda Motor Co., 27 F.3d 731, 741 (1st Cir.

1994). Thus, I use New Hampshire law to separately analyze the

choice-of-law issues that are presented by each of Guardian

Angel’s three claims. 

7

a. Breach of Contract/Apparent Authority Claim

Guardian Angel alleges that the issuance of a CD in exchange

for a deposit of funds creates a contract, that Pickhinke had

apparent authority to issue the relevant CDs, and thus that

Pickhinke bound MetaBank to contracts with each putative class

member when she issued the relevant CDs. Guardian Angel

therefore claims that MetaBank is liable for breach of contract

because it refuses to repay the deposits and interest to the

class members. (See Compl., Doc. No. 1, ¶¶ 30-32.) MetaBank

does not appear to disagree that the issuance of a CD generally

creates a contract or that failure to repay the amount of the CD

generally would constitute a breach of that contract. Therefore,

 Choice-of-law analysis is only necessary where a New 7

Hampshire law actually conflicts with the law of another

interested state. Keeton v. Hustler, 549 A.2d 1187, 1191 (N.H.

1988). For the purposes of analysis, I assume -- as MetaBank

contends -- that the relevant state laws are in conflict.

-16-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 16 of 38
the key issue is whether Pickhinke had apparent authority to

issue the relevant CDs.

Whether a principal is bound by an agent’s contract is a

question of agency law. See FASA Corp. v. Playmates Toys, Inc.,

869 F. Supp. 1334, 1343 (N.D. Ill. 1994). The New Hampshire

Supreme Court has not adopted a specific rule to resolve choiceof-law questions in the agency context. The court has, however,

articulated choice-of-law rules for tort and contract cases. In

Clark v. Clark, 222 A.2d 205 (N.H. 1966), a tort case, the New

Hampshire Supreme Court described five “choice-influencing

considerations” (sometimes referred to as “the Leflar factors”)

that it would henceforth use to answer choice-of-law questions: 

(1) predictability of results, (2) maintenance of reasonable

orderliness and good relationships among the states, (3)

simplification of the judicial task, (4) advancement of the forum

state’s governmental interest, and (5) preference for what the

court regards as the sounder rule of law. See id. at 208-209. 

More recently, however, the New Hampshire Supreme Court has

resolved a number of contract choice-of-law questions by looking

to the Restatement (Second) of Conflict of Laws (hereinafter

“Second Restatement”), which states that in the absence of

-17-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 17 of 38
express choice by the parties, a contract should be governed by

the law of the state with which the contract has its most

significant relationship. See, e.g., Consol. Mut. Ins. Co. v.

Radio Foods Corp., 240 A.2d 47, 49 (N.H. 1968); Mathena v.

Granite State Ins. Co., 525 A.2d 284, 285-86 (N.H. 1987); Ellis

v. Royal Ins. Cos., 530 A.2d 303, 306 (N.H. 1987). In Glowski v.

Allstate Ins. Co., 589 A.2d 593 (N.H. 1991), the court

acknowledged the divergence between its approaches to tort and

contract cases, and explained why using the Second Restatement’s

approach for certain cases was appropriate:

Our post- Clark decisions, particularly in contracts

cases, have relied upon the approach taken by the

Restatement (Second) of Conflict of Laws . . . . 

However, adoption of the Second Restatement position

does not suggest that a Clark analysis is no longer

applicable. Rather, it is a recognition that, for

specific problems, the “choice-influencing

considerations” do not provide enough guidance to reach

the correct result. Because predictability of results,

the first Clark factor, is perhaps of greatest concern

in contracts cases, the adoption of the more mechanical

approach of the Second Restatement is appropriate in

those cases. In actual fact, the policy behind the

Second Restatement substantially mirrors those

considerations contained in Leflar’s work. 

Id. at 595; see also, e.g., Green Mountain Ins. Co. v. George,

634 A.2d 1011, 1013 (N.H. 1993) (abrogated on other grounds by

Matarese v. N.H. Mun. Ass’n Prop.-Liab. Ins. Trust, Inc., 791

-18-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 18 of 38
A.2d 175 (N.H. 2002)) (applying the “most significant

relationship” test in a contract case), Cercere v. Aetna Ins.

Co., 766 A.2d 696, 698 (N.H. 2001) (same).

The Clark factors are not a good fit for the types of

choice-of-law problems that are presented by questions of agency

law. Thus, this analysis follows the approach of the Second

Restatement, which has articulated a specific choice-of-law rule

for cases in which a third party seeks to hold an alleged

principal liable for the acts of an agent. According to the

Second Restatement,

(1) Whether a principal is bound by action taken on his

behalf by an agent in dealing with a third person is

determined by the local law of the state which, with respect

to the particular issue, has the most significant

relationship to the parties and the transaction under the

principles stated in § 6.

Restatement (Second) Conflict of Laws § 292(1) (1971). Section 8

 Section 292(2) goes on to explain that “[t]he principal 8

will be held bound by the agent’s action if he would so be bound

under the local law of the state where the agent dealt with the

third person, provided at least that the principal had authorized

the agent to act on his behalf in that state or had led the third

person reasonably to believe that the agent had such authority.” 

Restatement (Second) Conflict of Laws § 292(2) (1971). The

Restatement’s comment on § 292(2) states that it is an

“application” of § 292(1), id. cmt. e., but a leading treatise

treats it as an exception. See Eugene F. Scoles et al., Conflict

of Laws § 18.32 (4th ed. 2004). I need not resolve this apparent

conflict. As I explain below, I conclude that § 292(1) requires

-19-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 19 of 38
6 lists seven “factors” to consider when conducting choice-of-law

analysis, but the first comment to § 292(1) distills these 9

factors down to two requirements: (1) “the relationship between

the principal and agent” must “make[] it reasonable to hold the

principal bound by the agent’s act” and (2) there must be “a

reasonable relationship between the principal and the state whose

local law is to be applied.” Id. cmt. c.

the application of Iowa law. Section 292(2) could not be read to

require the application of another state’s law in this case

unless “the principal had authorized the agent to act on his

behalf in that state or had led the third person reasonably to

believe that the agent had such authority.” Restatement (Second)

Conflict of Laws § 292(2) (1971). For obvious reasons, MetaBank

does not make either such contention. 

 Section 6 lists the following factors as relevant to any 9

choice-of-law analysis:

(a) the needs of the interstate and international

systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states

and the relative interests of those states in the

determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field

of law,

(f) certainty, predictability and uniformity of result,

and

(g) ease in the determination and application of the

law to be applied.

Restatement (Second) of Conflict of Laws § 6 (1971).

-20-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 20 of 38
Here, I conclude that the state with the most significant

relationship to the parties and the transaction, as related to

the agency question, is Iowa. Most importantly, the relationship

between MetaBank and Pickhinke, which is key to the question of

agency, was centered there. Pickhinke worked in an Iowa bank,

and all of the interactions between MetaBank and Pickhinke appear

to have taken place in Iowa. In addition, Pickhinke made false

communications to the putative class members from Iowa, the class

members sent funds to Iowa to purchase CDs, and the alleged

conversion occurred in Iowa. 

MetaBank never explicitly claims that the law of each

putative class member’s state should govern that class member’s

contract claim, but claims that Guardian Angel “improperly

truncate[d] the necessary legal analysis” by failing to mention

relevant conduct that occurred outside of Iowa. (See Defs.’ Mem.

of Law in Opp’n to Pl.’s Renewed Mot. for Class Certification,

Doc. No. 52, at 16.) MetaBank notes that a number of important

events occurred outside of Iowa. First, brokers made

representations to putative class members regarding Pickhinke’s

unauthorized CDs outside of Iowa. (See id.) In addition, all of

the putative class members, save those from Iowa, received

-21-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 21 of 38
misleading information outside of Iowa. Furthermore, they

decided to purchase CDs from Pickhinke, initiated funds transfers

to pay for the CDs, deposited their “interest” checks, and were

allegedly injured outside of Iowa. (See id.) 

These events, however, are not particularly relevant to the

relationship between MetaBank and Pickhinke. Furthermore, it is

not clear that MetaBank has a “reasonable relationship” with each

putative class member’s state such that holding it accountable

under that state’s law would be appropriate under the Second

Restatement. See Restatement (Second) Conflict of Laws § 292

cmt. c. MetaBank has not suggested that it actually authorized

Pickhinke to conduct any business in the putative class members’

states. See id. cmt. d (“The principal will have a reasonable

relationship to a state where he has authorized the agent to act

on his behalf.”). MetaBank may or may not have led third parties

to believe that Pickhinke was authorized to act in those states. 

See id. (“The principal will have a reasonable relationship to a

state where he has not authorized the agent to act on his behalf,

if, nevertheless, he has led the third person reasonably to

believe that the agent was authorized to act on his behalf in

that state.”). The Restatement also notes that a principal may

-22-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 22 of 38
have an adequate relationship with a state to support use of that

state’s law in other situations, but only specifically mentions

one such situation: where the principal-agent relationship is

centered in that state. See id. (“If the principles developed

[in the field of vicarious liability] are transferable to the

field of agency, the principal will have an adequate relationship

to the state where his relationship to the agent is centered.). 

The relationship between Pickhinke and MetaBank is certainly not

centered in any of the putative class members’ states, except for

Iowa. 

MetaBank also argues that Guardian Angel cannot prevail

because it has not met its “burden of providing an ‘extensive

analysis’ of state law variations.” (Defs.’ Mem. of Law in Opp’n

to Pl.’s Renewed Mot. for Class Certification, Doc. No. 52, at 14

(quoting Walsh v. Ford Motor Co., 807 F.2d 1000, 1017 (D.C. Cir.

1986)).) MetaBank appears to expect Guardian Angel to explain

the law of apparent authority in each of the putative class

members’ states before deciding that Iowa law should apply. If

the relevant choice-of-law rule commanded courts to compare those

substantive laws, MetaBank might be correct that Guardian Angel

had not met its burden. In the case of agency questions,

-23-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 23 of 38
however, the court must only conclude that the state whose law is

applied bears the most significant relationship to the parties

and the transaction. In order to determine what state bears the

most significant relationship to the parties and the

transactions, I need only know where the relevant events

occurred, not what the law of apparent authority is in each

state. In short, because Guardian Angel has shown that Iowa has

the most significant relationship to the parties and transaction

at issue here, I conclude that I must apply Iowa law to the

agency question. Accordingly, I conclude that common legal

issues will predominate for this claim. 

b. Vicarious Liability Claim

Guardian Angel claims that MetaBank is vicariously liable

for Pickhinke’s conversion and/or fraud. In order to determine

whether individual legal issues will predominate, I must decide

which state’s or states’ laws will apply to the vicarious

liability claims. New Hampshire has not adopted a specific

choice-of-law rule for vicarious liability questions. Because

vicarious liability is a subspecies of agency law, the Clark

factors are not useful here for the same reasons that they are a

poor fit when analyzing a choice-of-law issue concerning apparent

-24-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 24 of 38
authority. Thus, I again turn to the Second Restatement for

guidance.10

 My decision to use the Second Restatement’s approach is 10

not outcome determinative. The result here would be the same if

I applied the Clark choice-of-law rule.

The first Clark factor, predictability of results, points in

favor of Iowa law. Iowa was the center of gravity of Pickhinke’s

relationship with MetaBank. Thus, if MetaBank had any

expectations regarding potential tort liability, it should have

expected Iowa law to govern whether it would be held accountable

for the torts of its Iowa employees. In addition, it was or

should have been predictable to the putative class members that

Iowa law would govern any claims arising from their investments. 

Pickhinke instructed the brokers to instruct their clients to

wire money to a bank in Iowa, and the investors did so. The

investors were or should have been aware that the bank was in

Iowa because its address was on the instruction sheet. 

Regarding the second factor, maintenance of good

relationships among the states, application of Iowa law is

appropriate because Iowa has “a substantial connection with the

total facts and the particular issue being litigated.” LaBounty

v. Am. Ins. Co., 451 A.2d 161, 163-64 (N.H. 1982). 

Applying Iowa law is also consistent with the third

consideration, simplification of the judicial task, because it

will be simpler for one court to adjudicate the claims as a class

action than for multiple courts to separately adjudicate these

claims. 

The fourth consideration is advancement of the forum’s

governmental interest. This factor is either neutral or points

slightly in favor of applying Iowa law because it will be helpful

to Guardian Angel, a New Hampshire entity, to certify the class,

and because certification will lead to a more efficient

administration of justice. See Clark, 222 A.2d at 208-209. 

Applying Iowa law is also consistent with the fifth factor,

the court’s preference for applying the sounder rule of law,

because Iowa law is not “outmoded, an unrepealed remnant of a

bygone age, a drag on the coattails of civilization,” or

“obsolete and senseless.” Id. at 209 (internal quotation marks

omitted).

-25-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 25 of 38
The Second Restatement’s section on vicarious liability

explains that “[t]he law selected by application of the rule of

§ 145[, the general tort choice-of-law provision,] determines

whether one person is liable for the tort of another person.” 

Restatement (Second) of Conflict of Laws § 174 (1971). According

to § 145, 

(1) The rights and liabilities of the parties with

respect to an issue in tort are determined by the local

law of the state which, with respect to that issue, has

the most significant relationship to the occurrence and

the parties under the principles stated in § 6.[ ]

11

(2) Contacts to be taken into account in applying the

principles of § 6 to determine the law applicable to an

issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the

injury occurred,

(c) the domicil[e], residence, nationality,

place of incorporation and place of business

of the parties, and

(d) the place where the relationship, if any,

between the parties is centered.

These contacts are to be evaluated according to their

relative importance with respect to the particular

issue.

Id. § 145 (1971). 

With respect to the issue of vicarious liability, I conclude

that Iowa has the most significant relationship to the occurrence

 See footnote 9, supra, for a list of the principles 11

stated in § 6.

-26-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 26 of 38
and the parties here. It is true that most of the putative class

members resided outside of Iowa, received misleading information

outside of Iowa, decided to purchase CDs outside of Iowa,

initiated funds transfers outside of Iowa, and deposited their

“interest” checks outside of Iowa. In addition, all the putative

class members, save those from Iowa, were allegedly injured

outside of Iowa when MetaBank refused to return their initial

deposits. These contacts, however, are relatively unimportant

with respect to the issue of vicarious liability. The fact that

the relationship between Pickhinke and MetaBank was centered in

Iowa, on the other hand, is of primary importance with respect to

that issue. Pickhinke worked at an Iowa bank and there is no

evidence that she and MetaBank interacted outside of Iowa. In

addition, there were other less important contacts with Iowa: 

Pickhinke communicated with brokers from Iowa, requested that the

putative class members send funds for CDs to Iowa, and allegedly

committed fraud and conversion in Iowa. 

Accordingly, I conclude that Iowa law applies to this claim

and that common legal issues will predominate. 

c. Negligent Hiring and Supervision Claim

Guardian Angel claims that MetaBank was negligent in hiring

-27-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 27 of 38
and supervising Pickhinke. MetaBank contends that I must apply

the laws of multiple states to the class members’ negligent

hiring and supervision claims, and thus that individual legal

issues will predominate. To determine whether I must use the

laws of many states or may simply use Iowa law, I look to the

Clark choice-of-law rule because this is a tort claim. 

Clark’s first choice-of-law consideration -- predictability

-- points toward Iowa law. The alleged negligent hiring and

supervision took place in Iowa, and the relationship between

MetaBank and Pickhinke was confined to Iowa. It is predictable

that any problems arising out of this relationship would be

governed by Iowa law, even if those problems resulted in injuries

to entities outside the state. 

The remaining factors do not point strongly either in favor

of or against applying Iowa law. The second consideration,

“maintenance of reasonable orderliness and good relationships

among the [s]tates,” requires only that “a court not apply the

law of a [s]tate which does not have a substantial connection

with the total facts and the particular issue being litigated.” 

LaBounty v. Am. Ins. Co., 451 A.2d 161, 163-64 (N.H. 1982). Iowa

clearly has a substantial connection to the overall transaction

-28-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 28 of 38
and the specific issue at hand, since any negligence took place

in Iowa. 

Regarding the third consideration, simplification of

judicial task, it is no simpler to apply New Hampshire’s laws, as

opposed to Iowa’s, on negligent hiring and supervision. If

anything, certifying the class and applying Iowa law will

simplify the broader judicial task by confining these claims to

one court and having the claims adjudicated under one state’s law

rather than forcing multiple courts to adjudicate MetaBank

lawsuits under different legal standards.

The fourth consideration is advancement of the forum’s

governmental interest. Clark notes that “[i]n most private

litigation the only real governmental interest that the forum has

is in the fair and efficient administration of justice.” 222

A.2d at 208. This case will proceed more efficiently if it

proceeds as a class action and all of the claims are adjudicated

under the law of a single state. Thus, this factor is either

neutral or points slightly in favor of applying Iowa law. 

The final consideration –- the preference for applying the

sounder rule of law -- is neutral. This consideration requires

only that courts avoid applying a law that is “outmoded, an

-29-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 29 of 38
unrepealed remnant of a bygone age, a drag on the coattails of

civilization,” or “obsolete and senseless.” Id. at 209 (internal

quotation marks omitted). MetaBank has failed to demonstrate

that the law of Iowa is outmoded or senseless, and thus this

factor does not require me to avoid using Iowa law. Accordingly,

I conclude that I may apply Iowa law and that common legal issues

predominate in the claim for negligence.

2. Predominance of Common Factual Issues

Having concluded that Iowa law will govern all of the class

members’ claims, I must now determine whether common factual

issues will predominate when those claims are analyzed under Iowa

law. In order to determine if common factual issues predominate,

I must determine whether the plaintiffs will need to present

individualized evidence to prevail on each claim. 

a. Apparent Authority/Breach of Contract Claim

Under Iowa law, “[f]or apparent authority to exist, the

principal must have acted in such a manner as to lead persons

dealing with the agent to believe the agent has authority.” 

Clemens Graf Droste Zu Vischering v. Kading, 368 N.W.2d 702, 711

(Iowa 1985); see also Chismore v. Marion Sav. Bank, 268 N.W. 137,

139 (Iowa 1936) (“Apparent authority, as between the principal

-30-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 30 of 38
and third persons, must always be determined by the acts of the

principal, and not those of the agent. The authority must have

been actually apparent to the third person who must have dealt

with the agent in reliance thereon in good faith and in the

exercise of reasonable prudence.”).

MetaBank argues that whether Pickhinke had apparent

authority is not susceptible to class-wide proof. According to

Metabank, “mini-trials will be necessary” to “evaluate, among

other things, [(1)] whether MetaBank made any representations to

[each] putative class member, [(2)] whether the putative class

member relied on such representations in making its investment

decision, and [(3)] whether it was reasonable for [the] putative

class member to do so.” (See Defs.’ Mem. of Law in Opp’n to

Pl.’s Renewed Mot. for Class Certification, Doc. No. 52, at 9.)

The short answer to these arguments is that MetaBank has

offered nothing beyond conclusory assertions to suggest that the

evidence that bears on Guardian Angel’s apparent authority claim

will differ substantially from plaintiff to plaintiff. First, I

have no reason to question Guardian Angel’s assertion that both

Pickhinke and MetaBank acted in substantially similar ways with

respect to each class member. Second, while reliance is an

-31-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 31 of 38
element of an apparent authority claim under Iowa law, any

individual issues of reliance are not so significant as to

predominate over other common issues. The same is true with

respect to the reasonableness of any reliance that is proved. 

Therefore, common issues will predominate with respect to this

claim.

 b. Vicarious Liability Claim

Under Iowa law, an employer can be held liable for the

intentional torts of an employee if those torts are committed

“while the employee is acting within the scope of his or her

employment.” Weems v. Federated Mut. Ins. Co., 220 F. Supp. 2d

979, 992 (N.D. Iowa 2002) (interpreting Iowa law).

[F]or an act to be within the scope of employment the

conduct must be of the same general nature as that

authorized or incidental to the conduct authorized. The

question, therefore, is whether the employee’s conduct is so

unlike that authorized that it is substantially different,

or, stated another way, a deviation from the employer’s

business or interest to pursue the employee’s own business

or interest must be substantial in nature to relieve the

employer from liability. [T]he ultimate question in

determining whether an employee’s conduct falls within the

scope of employment is whether or not it is just that the

loss resulting from the servant’s acts should be considered

as one of the normal risks to be borne by the business in

which the servant is employed.

Id. (internal quotation marks and citations omitted; alterations

-32-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 32 of 38
in original). The questions presented by this standard appear to

be susceptible to class-wide adjudication. To determine whether

MetaBank’s loss from Pickhinke’s acts should be considered “one

of the normal risks to be borne” by a bank, one need not know

anything about Pickhinke’s or MetaBank’s interactions with the

individual putative class members. 

MetaBank argues that Guardian Angel cannot prove the

underlying tort of fraud without resorting to individualized

proof. MetaBank contends that in order to prove fraud, 12

Guardian Angel must prove that Pickhinke made a material

 MetaBank pays scant attention to the question of whether 12

the elements of conversion are amenable to class-wide proof. 

MetaBank only notes that Guardian Angel “has not made any attempt

to plead the required elements” of that claim. (See Defs.’ Mem.

of Law in Opp’n to Pl.’s Renewed Mot. for Class Certification,

Doc. No. 52, at 12.) It appears that MetaBank’s primary

intentional tort claim is for conversion, but I discuss in the

text above whether the claim for fraud is amenable to class-wide

proof in case Guardian Angel proceeds under that theory. I

briefly address the conversion claim here in case Guardian Angel

proceeds under that theory instead or in addition. Under Iowa

law, “[t]he essential elements of conversion are: 1) ownership

by the plaintiff or other possessory right in the plaintiff

greater than that of the defendant; 2) exercise of dominion or

control over chattels by defendant inconsistent with, and in

derogation of, plaintiff’s possessory rights thereto; and 3)

damage to plaintiff.” Bearbower v. Bearbower, 426 N.W.2d 392,

394 n.1 (Iowa 1988). Proof of these elements will not require

extensive individual evidence. Thus, the conversion claim is

also amenable to class-wide adjudication.

-33-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 33 of 38
misrepresentation upon which the putative class members

“justifiably relie[d],” which it cannot do on a class-wide basis. 

Beeck v. Kapalis, 302 N.W.2d 90, 94 (Iowa 1981); (see also Defs.’

Mem. of Law in Opp’n to Pl.’s Renewed Mot. for Class

Certification, Doc. No. 52, at 13). I reject this argument. 

Pickhinke made materially identical representations to all of the

putative class members. Therefore, the issues of whether the

putative class members relied on Pickhinke’s representations and

whether that reliance was reasonable are amenable to class-wide

analysis. 

c. Negligent Hiring and Supervision Claim

Under Iowa law, a plaintiff must prove the following

elements to make out a negligent hiring claim:

(1) that the employer knew, or in the exercise of ordinary

care should have known, of its employee’s unfitness at the

time of hiring; (2) that through the negligent hiring of the

employee, the employee’s incompetence, unfitness, or

dangerous characteristics proximately caused the resulting

injuries; and (3) that there is some employment or agency

relationship between the tortfeasor and the defendant

employer.

Stricker v. Cessford Const. Co., 179 F. Supp. 2d 987, 1018 (N.D.

Iowa 2001) (internal quotation marks omitted). None of these

elements require individualized evidence from the putative class

-34-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 34 of 38
members.

The elements of negligent retention or supervision, as

extrapolated by a district court in Iowa, are as follows: 

(1) the employer knew, or in the exercise of ordinary care

should have known, of its employee’s unfitness at the time

the employee engaged in wrongful or tortious conduct; (2)

through the negligent retention or supervision of the

employee, the employee’s incompetence, unfitness, or

dangerous characteristics proximately caused injuries to the

plaintiff; and (3) there is some employment or agency

relationship between the employee and the defendant

employer. 

Id. at 1019. Similarly, none of these elements require

individualized evidence from the putative class members. 

MetaBank argues that the plaintiffs must prove that MetaBank

had a duty to each of them in order to prevail on the negligence

claim, and that in order to prove the “duty” element, the

plaintiffs must each prove the nature of their relationship with

MetaBank. Guardian Angel, however, does not suggest that any of

the plaintiffs had any other relationship with MetaBank besides

the relationship that arose out of their interactions with

Pickhinke. Because these interactions were essentially

identical, no individualized inquiries would be necessary even if

MetaBank is correct that Guardian Angel must prove the element of

“duty.” Therefore, common factual inquiries will predominate for

-35-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 35 of 38
this claim. 

3. Superiority

Before certifying a class action, a court must conclude that

such a suit is “superior to other available methods for fairly

and efficiently adjudicating the controversy.” Fed. R. Civ. P.

23(b)(3). Rule 23 provides the following non-exhaustive list of

factors to consider in making this determination:

(A) the class members’ interests in individually controlling

the prosecution or defense of separate actions; 

(B) the extent and nature of any litigation concerning the

controversy already begun by or against class members; 

(C) the desirability or undesirability of concentrating the

litigation of the claims in the particular forum; and 

(D) the likely difficulties in managing a class action. 

Id. 

Metabank argues that class treatment is not superior here

because eight entities besides Guardian Angel have initiated law

suits, indicating their interest in controlling their suits. 

(See Defs.’ Mem. of Law in Opp’n to Pl.’s Renewed Mot. for Class

Certification, Doc. No. 52, at 19.) A leading treatise, however,

notes that while “[t]he pendency or lack thereof of separate

actions at the time when class certification is being considered

may be relevant to [the issue of whether the putative class

members have an interest in controlling their suits,] . . . most

-36-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 36 of 38
courts agree that the pendency or lack thereof of other actions

is not conclusive of this issue or of the propriety of class

certification.” 2 Conte & Newberg, supra, § 4:29, at 257. The

same treatise notes that although “[a] multiplicity of separate

actions may indicate interest in individually controlling

separate actions, . . . the ‘burden that separate suits would

impose . . . upon the court calendars’ which could be avoided by

a class suit ‘may also fairly be considered’ in weighing this

interest.” Id. § 4:29, at 258 (quoting Rules Advisory Committee

Notes to 1966 Amendments to Rule 23, 39 F.R.D. 69, 104).

Here, a number of the parties that have sued independently

have expressed willingness to drop their suits if this court

certifies a class action. (See Pl.’s Reply Br. Regarding Its

Renewed Mot. for Class Certification, Doc. No. 55, at 10; Meier

Aff., attach. in paper format to Doc. No. 49, ¶ 19.) This

willingness suggests that the other parties are not especially

interested in controlling their own suits. Furthermore, given

the factual and legal issues common to the class, certifying this

class would save significant amounts of time in other courts. 

Finally, it is not undesirable to concentrate the litigation in

this forum, nor are there particular difficulties associated with

-37-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 37 of 38
managing this class action. Accordingly, I conclude that a class

action is superior to other forms of litigation in the present

case. 

IV. CONCLUSION

For all of the foregoing reasons, I grant the plaintiff’s

renewed motion for class certification (Doc. No. 49). 

SO ORDERED.

/s/Paul Barbadoro 

Paul Barbadoro

United States District Judge

May 5, 2010

cc: Christine B. Cesare, Esq.

Randall F. Cooper, Esq.

Bruce W. Felmly, Esq.

Christopher T. Meier, Esq.

Rachel E. Barber Shwartz, Esq.

-38-

Case 1:08-cv-00261-PB Document 58 Filed 05/05/10 Page 38 of 38