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December 22, 2005.


The opinion of the court was delivered by: WILLIAM BASSLER, District Judge


Plaintiffs filed a motion for class certification under Fed.R.Civ.P. 23, for appointment of class counsel, and for appointment of a class representative.

For the reasons set forth below, Plaintiffs' motion is granted.

  I. Analysis For Class Certification Under Federal Rule of Civil Procedure 23

  Before obtaining certification, a class must meet the four requirements of Rule 23 (a): (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Fed.R.Civ.P. 23(a); In re Life USA Holding, Inc., 242 F.3d 136, 143 (3d Cir. 2001). If Plaintiffs satisfy these Rule 23(a) requirements, they must then show that the class is appropriate under Rule 23 (b) (1), (2) or (3). Plaintiffs seek certification under 23 (b) (3).

  FBF contends that Plaintiffs fail to meet the requirements under Rule 23 (1) (a) of numerosity as well as under Rule 23 (a) (4) of adequacy of representation. FBF does not dispute commonality or typicality. A. Rule 23 (a) (1): numerosity

  A class must be "so numerous that joinder of all members is impracticable." Fed.R.Civ.P. 23 (a) (1). Plaintiffs seek to represent a class that "consists of persons or entities that exchanged Summit shares for FBF share [sic] in the Merger and were damaged thereby." (Pl. Reply Br. at 15.) Plaintiffs, while they do not provide an exact number, "believe the proposed class consists of thousands of Summit shareholders who exchanged millions of Summit shares of common stock." (Pl. Br. at 14.) There were 26,953 shareholders of Summit stock and approximately 175,721,433 shares of Summit common stock outstanding and entitled to vote on the Merger. (Id. at 14.) Although Plaintiffs have not provided the exact number of the class, the number of shareholders and outstanding shares support a finding of the existence of at least 40 members of the proposed class sufficient for a finding under Rule 23 (a) (1) for numerosity. See Shamberg v. Ashlstrom, 111 F.R.D. 689, 698 (D.N.J. 1986) ("Certification is not barred because the precise number of class members has not been determined.").

  "No minimum number of plaintiffs is required to maintain a suit as a class action, but generally if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40, the first prong of Rule 23 (a) has been met." Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001). FBF argues that Plaintiffs have not demonstrated the numerosity requirement because Plaintiffs' argument wrongly assumes that all Summit shareholders "were `damaged' if at any time they sold FBF shares below $41." (FBF Letter Br. in Opp. at 2.)

  "In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met." Eisen v. Carlisle & Jaccuelin, 417 U.S. 156, 177-78 (1973) (internal citations omitted). FBF, however, urges the Court to engage in a "more searching analysis" similar to that in Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154 (3d Cir. 2001). (FBF Letter Br. in Opp. at 2.)

  In Newton, the Third Circuit considered the merits of an interlocutory appeal from a denial of a class certification. The Circuit Court noted that, at times, "it may be necessary for the court to probe behind the pleadings before coming to rest on the certification process." Newton, 259 F.3d at 166. Considering the measure of damages from a Rule 10b-5 claim, the district court found that the economic loss was unique to each investor and therefore plaintiffs' claims did not warrant a class certification. Id. at 179-81. Unlike Newton, where the court could draw on a full record from its consideration of a motion for summary judgment, this Court's evaluation of Plaintiffs' factual and legal allegations is more limited by the nature of the procedural history. See Id. at 178-79.

  FBF's averments are more appropriately considered on a motion for summary judgment. The focus of Rule 23 (a) (1) is on the size of the proposed class and whether "joinder of all members is impracticable." Fed.R.Civ.P. 23 (a) (1). While "[V]arious factors beyond the number of class members are relevant to determining impracticability. . . ." the Court is unable to find caselaw law that supports a denial of class certification based on FBF's arguments and similar circumstances to those here. Szczubelek v. Cendant Mortg. Corp., 215 F.R.D. 107, 116-17 (D.N.J. 2002) (citing cases considering other factors, such as: judicial economy; geographic dispersion of the class members; financial resources of the class members; ability of claimants to institute individual suits; and, whether claims involve only a small amount of damages). Based on the record, it is sufficient at this time for the Court to make the more narrow finding that the proposed class satisfies the numerosity element of Rule 23 (a) is met.

  B. Rule 23 (a) (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). A plaintiff can meet the commonality requirement by showing "the presence of a single common issue." In re Prudential Ins. Co. of America Sales Practices Litig., 962 F. Supp. 450, 510 (D.N.J. 1997) (citing 1 Newberg ยง 3.10, at 3-50 to 3-52).

  Plaintiffs assert that FBF's alleged dissemination of materially false and misleading information regarding FBF's financial condition raises the following five common issues:
(a) Whether defendants violated the federal securities laws . . ., including Sections 11 and 12 (a) (2) and/or 15 of the Securities Act;
(b) Whether the Merger Registration Statement contained materially false and misleading statements;
(c) Whether the Merger Registration Statement and documents incorporated by reference therein omitted material facts that were necessary in order to make the statements made, in light of the circumstances in which they were made, not misleading; and
(d) Whether defendants, either in an individual capacity or as a group, ...

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