But first, a brief detour.
Most securities practitioners are aware of the local rules of the United States District Court for the Northern District of California , which require the posting of virtually securities fraud class action litigation complaints and pleadings to a "Designated Internet Site."
Indeed, the enactment of those rules can be said to have spawned the creation of Stanford Law School's Securities Class Action Clearinghouse and its distant cousin, the Securities Class Action Designated Internet Site, operated by Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
The Northern District of California's local rules have provided, as previously noted here, a veritable treasure trove of securities class action litigation related filings.
Now back to our regularly scheduled posting.
Far fewer securities practitioners are aware of the pertinent local rule in the Northern District of Georgia, Local Civil Rule 23.1(C)(4)(a), or, more properly, LR 23.1(C)(4)(a), NDGa. That rule was implemented in June 2003, and provides as follows:
(i) Contents of the NoticeThe rule has further requirements:
. . . following the filing of any Reform Act class action in this District, each law firm on a complaint may choose to publish a notice. Such notice shall have as its headline "Notice of Filing Securities Class Action Against [Defendant or Defendants]" and shall provide the following information as required by the Reform Act:
1) the pendency of the action;
2) the claims asserted therein;
3) the purported class period;
4) that, not later than sixty (60) days after the date on which the first notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class; and
5) contact information for the law firm issuing the notice, including the name of a contact person who is designated to discuss the lawsuit with putative class members, an address, a telephone number, and a website and e-mail address, if applicable. However, the notice shall not contain a promotional statement for any law firm.
(iii) Only One Notice Per Law FirmIn deciding to implement the rule, The Court found that:
Unless otherwise ordered by the court, there shall be only one notice per law firm regardless of the number of complaints filed in this Court arising out of the same or similar set of facts or circumstances.
No attorney seeking to represent the putative class shall initiate any other communication with putative class members unless approved in advance by the court. Such court approval will be granted if the communication is deemed by this Court to be reasonably necessary to achieve the purposes of the Reform Act.
This rule does not affect the rights or obligations of defendants to give notice of the pendency of the suit, nor does it preclude counsel for either party from contacting class members whom they believe to be fact witnesses or with whom they have an attorney-client relationship.
certain practices in Reform Act class actions have the potential to harm the interests of class members and/or defendants and can interfere with the orderly administration of justice.Arguably, the local rules would prohibit the use of "passive voice" press releases.
For example, the court finds that numerous notices of the same litigation have been released, thereby creating the potential for confusion for potential class members and potential damage to the interests of shareholders and businesses.
The court finds further that the measures adopted herein are reasonably necessary to protect the interests of class members, realize the goals of the Reform Act, and balance the rights of those who wish to prosecute a Reform Act class action or communicate about it.
In case you were wondering, the notice issued by the law firm of Motley Rice LLC in the Witness Systems litigation does conform with the local rules outlined above.
But, that should come as no surprise. As noted several months ago by The D & O Diary, the securities litigation group at Motley Rice was substantially enlarged in February 2006 with the addition of four seasoned Atlanta-based lawyers from Chitwood Harley Harnes LLP.