Electronics for Imaging, Inc. - Class Action Case 97CV4739

Stanford University Law School - Securities Class Action Clearinghouse

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
WILLIAM S. LERACH (68581)
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
- and -
REED R. KATHREIN (139304)
DAVID R. STICKNEY (188574)
CHRISTOPHER P. SEEFER (201197)
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545

BARRACK, RODOS & BACINE
EDWARD M. GERGOSIAN (105679)
MATTHEW P. MONTGOMERY (180196)
600 West Broadway, Suite 1700
San Diego, CA 92101
Telephone: 619/230-0800

KIRBY, McINERNEY & SQUIRE, LLP
JEFFREY H. SQUIRE
PAMELA E. KULSRUD
830 Third Avenue,
10th Floor
New York, NY 10022
Telephone: 212/317-2300

Co-Lead Counsel for Plaintiffs

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RICHARD A. BADER, et al., On Behalf of
Themselves and As Court Appointed Lead
Plaintiffs On Behalf of All Others Similarly
Situated,
                    Plaintiffs,
    vs.
ELECTRONICS FOR IMAGING, INC., et al.,
                    Defendants.
_____________________________________
)
)
)
)
)
)
)
)
)
)
)
)
)
) No. C-97-4739-CAL
CLASS ACTION
PLAINTIFFS' MEMORANDUM
OF POINTS AND AUTHORITIES
IN OPPOSITION TO
DEFENDANTS' MOTION TO
COMPEL CERTIFICATION
OF THE PLAINTIFF CLASS
DATE: August 13, 1999
TIME: 9:30 a.m.
COURTROOM: Hon. Charles A. Legge

This Court should deny defendants' motion to compel certification of the plaintiff class because plaintiffs have moved to dismiss this action in its entirety. The certification of the plaintiff class would therefore serve no purpose. In addition, defendants no longer have a motion to dismiss pending. As a result, defendants' argument that the Class must be certified so that the Class will be bound by the result of that motion is no longer germane. This Court should deny defendants' motion accordingly.

I. PROCEDURAL HISTORY

On June 15, 1999, defendants Jeffrey Lenches and Fred Rosenzweig filed a Motion to Dismiss Lead Plaintiffs' Class Action Complaint (the "Complaint"), while all the other defendants answered the Complaint and filed a counterclaim. That same day, all defendants filed a motion to compel certification of the plaintiff class. On July 16, 1999, plaintiffs voluntarily dismissed defendants Lenches and Rosenzweig, which mooted their motion to dismiss.⁽¹⁾ Then, on July 20, 1999, plaintiffs filed a motion to voluntarily dismiss the Complaint and defendants' counterclaim. That motion is scheduled for hearing before this Court on September 24, 1999.

Plaintiffs are also prosecuting a parallel state action, Steele v. Electronics for Imaging, Inc., Lead Case No. 403099 (Santa Clara County), which was filed prior to this action. Defendants' demurrers in Steele were denied last December, and defendants answered the Steele complaint on January 14, 1999, putting the case at issue. Discovery has been proceeding in Steele since September 9, 1998. Finally, plaintiffs have filed a motion to certify a nationwide class in the Steele action, which defendants have opposed. The hearing on that motion is scheduled for August 27, 1999 at 1:00 p.m.

II. CERTIFICATION OF THE PLAINTIFF CLASS WOULD SERVE NO PURPOSE

This Court should deny defendants' motion because class certification is not practicable at this time. Rule 23 requires certification "as soon as practicable," a standard which provides the Court with ample discretion to defer class certification when unresolved factual or legal questions make certification problematic. See Christensen v. Kiewit-Murdock Inv. Corp., 815 F.2d 206, 214 (2d Cir. 1987); Wright v. Schock, 742 F.2d 541, 545-46 (9th Cir. 1984). In this case, class certification is not practicable because plaintiffs have moved to dismiss their complaint and defendants' counterclaim. If granted, this motion will dispose of this entire action. Certifying the plaintiff class while this motion is pending would therefore be an exercise in futility.

Moreover, defendants' principal justification for compelling class certification is to ensure that the Class is bound by this Court's decision on defendants' motion to dismiss. This argument is no longer relevant. The two defendants who filed a motion to dismiss have been dismissed from this action. As such, there will be no order on defendants' motion to dismiss that could potentially bind the Class, and thus no need to certify the Class.

Defendants' authorities do not compel certification at this time. In each of defendants' cases where the court compelled class certification, it did so because a motion to dismiss by defendants was pending. See Head v. NetManage, No. C97-4385 CRB, slip op. (N.D. Cal. Sept. 8, 1998); In re Diamond Multimedia Sys., Inc., No. C96-2644 SBA, 1997 WL 773733 (N.D. Cal. Oct. 14, 1997); Copperstone v. TCSI Corp., No. C97-3495 SBA, slip op. (N.D. Cal. Apr. 20, 1998); Genna v. Digital Link Corp., No. C96-20867 RMW, slip op. (N.D. Cal. Apr. 13, 1998), attached as Exhibits A, B, C, and D to the Declaration of David Lansky filed with defendants' motion. In the absence of such a motion pending, there is no reason for this Court to compel class certification.⁽²⁾

III. CONCLUSION

For the reasons stated above, plaintiffs respectfully request that this Court deny defendants' motion in its entirety.

DATED this 23rd day of July, 1999.

Respectfully submitted,

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
WILLIAM S. LERACH
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
REED R. KATHREIN
DAVID R. STICKNEY
CHRISTOPHER P. SEEFER

_________________________
DAVID R. STICKNEY

222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545

BARRACK, RODOS & BACINE
EDWARD M. GERGOSIAN
MATTHEW P. MONTGOMERY
600 West Broadway, Suite 1700
San Diego, CA 92101
Telephone: 619/230-0800

KIRBY, McINERNEY & SQUIRE, LLP
JEFFREY H. SQUIRE
PAMELA E. KULSRUD
830 Third Avenue, 10th Floor
New York, NY 10022
Telephone: 212/317-2300

Co-Lead Counsel for Plaintiffs

K:\CASES\EFII\SLA80084.brf

DECLARATION OF SERVICE BY MAIL

PURSUANT TO NORTHERN DISTRICT LOCAL RULE 23-2(c)(2)

I, the undersigned, declare:

1. That declarant is and was, at all times herein mentioned, a citizen of the United States and a resident of the County of San Francisco, over the age of 18 years, and not a party to or interested in the within action; that declarant's business address is 222 Kearny Street, 10th Floor, San Francisco, California 94108.

2. That on July 23, 1999, declarant served the PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS' MOTION TO COMPEL CERTIFICATION OF THE PLAINTIFF CLASS by depositing a true copy thereof in a United States mailbox at San Francisco, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List and that this document was forwarded to the following designated Internet site at:

http://securities.milberg.com

3. That there is a regular communication by mail between the place of mailing and the places so addressed.

I declare under penalty of perjury that the foregoing is true and correct. Executed this 23^rd day of July, 1999, at San Francisco, California.

______________________________

DEBORAH R. DASH

1. Attached hereto at tab 1.

2. The remainder of defendants' authorities are also inapposite. Senter v. General Motors Corp., 532 F.2d 511, 520-22 (6th Cir. 1976), was a class action in which the plaintiff did not plead class allegations, and the court did not consider class action issues until trial. The Sixth Circuit stated that the strictures of Rule 23(c)(1) required the court in the circumstances of that case to have certified the class action - whether or not requested by a party to do so - but did not at all address when such a determination should have been made. In McDonald v. General Mills, Inc., 387 F. Supp. 24, 38-39 (E.D. Cal. 1974), the court ordered plaintiffs to move for class certification only after defendants moved to dismiss the case asserting that plaintiffs' claims could not be adjudicated on a class-wide basis. In Ponce v. Housing Auth. of County of Tulare, 389 F. Supp. 635, 654-56 (E.D. Cal. 1975), the same judge that decided McDonald, certified a class even though no briefing had been submitted by either party. Thus, in none of defendants' authorities did a court certify a class sua sponte or order a plaintiff to move for certification under circumstances, like those present here, which counsel prudence rather than haste.