Smith et al v. Georgia Energy USA, LLC et al

Filing 249

ORDER granting 247 Motion to decertify the plaintiff classes. Signed by Judge J. Randal Hall on 12/1/14. (cmr)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA BRUNSWICK DIVISION JONATHAN SMITH, et al., * • Plaintiffs, * * CV 208-020 * GEORGIA ENERGY USA, et al., LLC, * * Defendants. * ORDER In this class fraud/negligent received, action, Plaintiffs misrepresentation, unjust enrichment, Deceptive Trade fraudulent calibration of negligence, Cisco, Practices Act Cisco Travel Plaza Inc., plaintiff classes. satisfied that from pumps beginning Inc., Cisco Georgia. Travel and the alleged in 2005 at The Estate of Plaza, Inc., and As Plaintiffs do not object and the Court is decertification decertification motion. (Doc. I. defendants, had for II now move the Court to decertify the is in the best named plaintiffs and other class members, In 2008, money arising gasoline Cisco Oil, claims and violation of Georgia's Uniform three filling stations in Camden County, Fairley assert interests of the the Court GRANTS the 247.) BACKGROUND Plaintiffs filed this class action against sixteen comprised of three distinct groups: the "Cisco Defendants" Walker; (Fairley Cisco Oil, Travel Plaza, Cisco; Inc.; Inc. II); Althea Cisco LLC; II Ghazi; LLC; Management, Jack LLC; and Travel Shave; Plaza, Georgia Petro USA, Global Kingsland Energy USA, II, and Cisco formed and owned, or had Cisco Georgia Petro LLC; Kingsland LLC), and "Sekhon Defendants" (Kuldeep S. Sekhon and United Fuels, Fairley Cisco (Biju Abraham; LLC; Management Tammy Inc.; the "Abraham Defendants" Georgia Energy USA, USA, Cisco a the Inc.). controlling interest in, the three filling stations at issue until 2000 when he transferred ownership and Aletha Cisco retained the to his Shave. roles of daughters, Despite CEO and CFO, this of the stations In early 2008, Abraham answered before Mr. unrepresented being have filed not Cisco in December sold the and Mr. with served Mr. Mr. Cisco negotiated the the associated corporate complaints and Sekhon Walker continued to manage Sekhon Defendants Mr. Abraham's the the Sekhon Defendants Defendants. jurisdiction action. the to transfer, and he nearly all aspects of the businesses. sale Tammy Cisco against responded Abraham complaint entities them, to stations but subsequent 2006. to the fled in the this initially are now filings, including Plaintiffs' motion for summary judgment against them. The Cisco Defendants, suit since its case, however, inception. however, have actively defended this Within weeks of filing Plaintiffs' the State of Georgia initiated a civil RICO and forfeiture Georgia. the action in the Superior Court of Camden County, Following the appointment of a receiver in that case, State seized all the Cisco Defendants' totaling more than $2.5 million. available assets — The receiver retained over $1 million to pay himself and disbursed an additional $1 million to two fuel $2.75 suppliers. million to The the District Attorney's Cisco State. office, Defendants The forfeited another Judicial Circuit Brunswick who managed the RICO action, paid out approximately $50,000 in claims to the motoring public, but the plaintiff classes were not permitted to access these or any other of the forfeited funds. In April 2010, Mr. with nearly no assets. Charlton either County, supplied stations. Class suits ultimately that resulted action. liquid (See assets to or Counsel's created in leaving Class on behalf competed Doc. 244.) were depleted of in unresolvable Counsel's two the the the Cisco Charlton conflict all the of Cisco substantial incurred in defending the Charlton County suits. Court granted summary judgment in favor of and Tammy Cisco Walker on November 4, estate entities disqualification Moreover, by an in the State Court against involvement an behind Class Counsel initiated a the Cisco Defendants Georgia fuel died, In June 2011, second lawsuit against of Cisco that fuel County interest in this Estate's legal Finally, fees this Althea Cisco Shave 2014, thereby discharging from liability the only two Cisco Defendants with assets of any substance. (See Doc. 246). Defendants therefore assert, and Plaintiffs agree, that the combined assets of all remaining defendants are insufficient to pay the administrative costs of publishing the required notices, much less any compensatory damages Plaintiffs prevail Pis.' Resp. , Doc. Court to affords order in the end. 248, (Defs.' at 2.) efficiency class members Br., Accordingly, decertification superior to the as to the this Doc 247, should at 4-5; Defendants urge the class device litigation benefit to the litigants in light of Defendants' no or longer potential gross financial shortcomings. II. Questions concerning ANALYSIS class certification sound discretion of the district court. Mortgage Gen. Thus, class Corp., Tel. of F.3d Sw. 1260, v. 1276 Falcon, 457 left to See Culpepper v. (11th U.S. Cir. 2007) 147, 160 the Irwin (citing (1982)). this Court may revisit its initial decision to certify a in pursuant Culpepper, F.2d Co. 491 are 1016, light to 491 of subsequent Federal Rule F.3d at 1019 (5th of 1276; Cir. developments Civil in the Procedure litigation 23(c)(1)(C). see also Richardson v. 1983) ("Under Rule 23 the Byrd, 709 district court is charged with the duty of monitoring its class decisions in light of the evidentiary development of the case."); Buford v. H & R Block, Inc., 168 F.R.D. 340, 346 (S.D. Ga. 1996) ("[O]ptions such as decertification or revised certification are always available to the district court."). This is especially so during the period before any notice is sent to members of the class, Tel. as certification "is inherently tentative." Co.,' 457 U.S. 437 U.S. 346 class 463, 469 n.ll (noting that matter" as at 160 "the (citing Coopers & Lybrand v. Livesay, (1978)); class Gen. see also Buford, certification is merits of the 168 F.R.D. at "strictly a procedural claims at stake are not . . . considered when determining the propriety of the class action vehicle") (citation omitted). The Court has drawn on its well of knowledge about the long course of multiple also this litigation has carefully publishing the in considered comparison which the the to, costs at intervention parties are It benefits of the of Moreover, class. cost in it appears to the Court that counsel working putative class members. of effect. and minimum, appropriate notice to the moving for decertification, the in lawsuits has had considerable detrimental decertification for — to guard the interests of the As it is clear that no benefit will inure to the plaintiff representatives or classes in this case,1 1 See Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 567, 570 (2d Cir. 1968) (noting that courts should be "reluctant to permit actions to proceed where they are not likely to benefit anyone but the lawyers who bring them" and further stating that if "financial considerations prevent the plaintiff from furnishing individual notice to [class] members, there may prove to be no alternative other than the dismissal of the class suit"). and Plaintiffs concede the futility of moving forward, the Court finds decertification to be appropriate.2 III. Based upon the CONCLUSION foregoing, the Court Motion to Decertify the plaintiff classes. ORDER December, ENTERED at Augusta, Georgia, GRANTS Defendants' (Doc. 247.) this / day of 2014. HONORABLE J. UNITED STATEST DISTRICT JUDGE SOUTHERN DISTRICT OF GEORGIA 2 Although Rule 23 authorizes the Court to provide notice of this action's change in status to absent class members, the Court finds that no notice of decertification is required here as no notice of certification was given. See Hervey v. City of Little Rock, 787 F.2d 1223, 1230 (8th Cir. 1986) (noting that "notice of the decertification is required only to the extent necessary to reach those potential class members who received notice of certification and relied on being included in the class"); Daisy Mtn. Fire Dist. v. Microsoft Corp., 547 F. Supp. 2d 475, 485 (D. Md. 2008); Seglison v. Plum Tree, Inc. , 61 F.R.D. 343, 346 (E.D. Pa. 1973). But see Birmingham Steel Corp. v. Term. Valley Auth. , 353 F.3d 1331, 1339 (11th Cir. 2003) (in decertifying a class on the ground of inadequate representation by the named plaintiff, a district court "must ensure that notification of this action be sent to the class members, statute of Reynolds v. Ala. (M.D. May Ala. in order that the latter can be alerted that the limitations has begun to run again on their individual claims") ; Dep't of Transp., 1, 2012), R&R No. adopted, CV-85-T-665-N, No. 2012 WL 3100768, 2:85CV665-MHT, 2012 WL at *2 3101283 (M.D. Ala. July 30, 2012) (citing Birmingham Steel for the proposition that those class members who submitted Participation Forms or Opt-out Forms should be provided notice of decertification, but declining to require sent to those class members who did not return either form). notice be

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