Opinion ID: 2275905
Heading Depth: 1
Heading Rank: 14

Heading: Class representatives and potential conflicts

Text: In addition to Class Counsel's potential conflicts of interest, Relators have alleged that at least two of the named class representatives also have conflicts of interest that could make them inadequate representatives of the class. First, Relators allege that Donald R. Glaser is an inadequate class representative due to his personal relationship with one of the brokers. Relators note that Glaser purchased his bonds from his son, William Glaser, who is one of the brokers who initially hired Class Counsel and is part of the group of brokers that Class Counsel agreed not to sue. Second, Relators allege that Rona Hodes is an inadequate class representative due to her relationship with Underwriter. Hodes had a Series 6 NASD license that was held by Underwriter, was employed by Underwriter as a registered representative and broker during the period at issue in the lawsuit, and is part of the group of brokers that Greiman agreed not to sue. Relators further allege that Hodes bought the bonds while she was a broker at J.E. Liss & Co., and that she received commissions from the sale of those bonds. In addition, they allege she served on the creditors committee for the SLLC bankruptcy. Relators allege that these two are inadequate representatives of the class because their personal ties to the people Class Counsel agreed not to sue make their interests antagonistic to the interests of the class. Davis v. Comed, Inc., 619 F.2d 588, 593-94 (6th Cir.1980) (class representatives must be free of any interest which holds the potential of influencing their conduct of the litigation in a manner inconsistent with the interests of the class). The trial court should examine the appropriateness of these individuals serving as class representatives. See Tedesco v. Mishkin, 689 F.Supp. 1327, 1337-39 (S.D.N.Y.1988) (one named class representative was removed, but class was allowed to continue); Runion v. U.S. Shelter, 98 F.R.D. 313, 318 (D.S.C.1983) (in pre-certification context, court removed inadequate representative but allowed class to pursue certification).