Eisen v. Carlisle & Jacquelin

52 F.R.D. 253, 14 Fed. R. Serv. 2d 1519, 1971 U.S. Dist. LEXIS 13847, 1971 Trade Cas. (CCH) 73,563
CourtDistrict Court, S.D. New York
DecidedApril 7, 1971
DocketNo. 66 Civ. 1265
StatusPublished
Cited by55 cases

This text of 52 F.R.D. 253 (Eisen v. Carlisle & Jacquelin) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eisen v. Carlisle & Jacquelin, 52 F.R.D. 253, 14 Fed. R. Serv. 2d 1519, 1971 U.S. Dist. LEXIS 13847, 1971 Trade Cas. (CCH) 73,563 (S.D.N.Y. 1971).

Opinion

OPINION

TYLER, District Judge.

Once again the case of Eisen v. Carlisle & Jacquelin has reached the point of determining whether it meets the requirements of a class action under Rule 23 of the Federal Rules of Civil Procedure. This is the latest in a series of opinions dealing with this complex issue, and it may not be the last. To recapitulate: Eisen v. Carlisle & Jacquelin, 41 F.R.D. 147 (S.D.N.Y.1966) initially determined that this case could not be maintained as a class action,; Eisen v. Carlisle & Jacquelin, 370 F.2d 119 (2d Cir. 1966), cert. denied, 386 U.S. 1035, 87 S.Ct. 1487, 18 L.Ed.2d 598 (1967) [hereinafter cited as Eisen I] held that the denial of the class action determination was appealable; Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2d Cir. 1968) [hereinafter cited as Eisen II] reversed the initial denial of the class action and remanded to the district court for further findings necessary for the class action determination; Eisen v. Carlisle & Jacquelin, 50 F.R.D. 471 (S.D.N.Y.1970) called for further information from the parties as required by the Court of Appeals opinion in Eisen II. The nature of the case and of plaintiff’s claims are adequately described in the prior opinions.

All parties have responded ably to the Court of Appeals and latest district court opinions, and it would appear that the court now has sufficient information to make all of the required findings for the class action determination.

First, the findings of fact relevant to the class action determination will be listed.1 These findings were developed on remand and are based on submissions by the parties. Second, the conclusions required by Rule 23 will be made in light of these findings. Finally, the question of who shall pay for the cost of the Rule 23(e) (2) notice will be discussed.

FINDINGS OF FACT

1. During the period from May, 1962 through June, 1966, approximately 21,-000,000 public individuals, institutions and intermediaries 2 (hereinafter collectively referred to as “shareholders”) bought and/or sold shares of stock of the more than 6,700 corporations whose shares are publicly held.

[257]*2572. Approximately 6,000,000 shareholders had odd-lot transactions (transfers involving less than 100 shares) during the period from May, 1962 through June, 1966 in stocks listed on the New York Stock Exchange (hereinafter “NYSE”). Approximately 6,600,000 shareholders had odd-lot transactions during the period from May, 1962 through June, 1968 in stocks listed on the NYSE. The number of shareholders having odd-lot transactions grew in the period June, 1966 through June, 1968 by approximately 5 percent a year, or a total of 600,000 persons.

3. During the period May, 1962 through June, 1966, the “average shareholder” 3 who had odd-lot transactions in stocks listed on the NYSE had approximately 5 such transactions. The average odd-lot transaction during such period was approximately 28.2 shares at $50.84 per share. The average odd-lot differential per transaction during such period was approximately $5.18.

4. During the period May, 1962 through June, 1968, the average shareholder who had odd-lot transactions in stocks listed on the NYSE (taking into account an increase in odd-lot volume which was greater than the increase in shareholders having odd-lot transactions), had approximately 7.4 such transactions. The average odd-lot transaction during such period was approximately 28.6 shares at $51.07 per share. The average odd-lot differential during such period was approximately $5.04.

5. Of the approximately 6,000,000 shareholders who had odd-lot transactions from May, 1962 through June, 1966 in stocks listed on the NYSE, the names and addresses of at least one-third, i. e. 2,000,000, can be identified as follows: fourteen of the largest brokerage firms 4 (hereinafter “wire firms”) transmit their customers’ odd-lot orders by teletype directly to either Carlisle & Jacquelin or DeCoppet & Doremus. (The remaining firms employ the telephone or some other means of communication.) These fourteen brokerage firms account for approximately 56 percent of the odd-lot transactions on the NYSE. The two odd-lot firms possess computer tapes on which are recorded the transactions of each wire firm customer who has had an odd-lot transaction since May, 1962. By comparing the records and tapes of the odd-lot firms with the wire firm tapes which contain the name and address of each customer, names and addresses of odd-lot customers can be generated.

6. Defendants Carlisle & Jacquelin and DeCoppet & Doremus, by the use of these computer tapes, can obtain the account numbers of a limited number of the largest of the odd-lot customers of the fourteen wire firms (who may or may not be the largest odd-lot customers) during any relevant period for which such tapes are available, as well as the number of odd-lot transactions executed for each such account number.

7. Of the approximately 6,000,000 shareholders who had odd-lot transactions from May, 1962 through June, 1966 in stocks listed on the NYSE, the names and addresses of the balance, approximately two-thirds, i. e., 4,000,000, cannot be identified with reasonable effort.

8. The shareholders who had odd-lot transactions from May, 1962 through June, 1968 in stocks listed on the NYSE reside in every state in the United States [258]*258as well as in most non-communist countries in the world. Approximately 6 percent reside in foreign countries. The geographical distribution of purchasers and sellers of odd-lots in stocks listed on the NYSE is, in proportion, the same as the geographical distribution of all owners of shares of stocks of public corporations as expressed in the table attached as Appendix A. From 1962 to 1965, New York and California had by far the largest numbers of such shareowners.

9. In addition to the shareholders who had odd-lot transactions from May, 1962 through June, 1968 in stocks listed on the NYSE, approximately 100,000 or more public individuals had odd-lot transactions during the same period in stocks listed on the NYSE through the “Monthly Investment Plan.” 5 Such individuals can be identified through computer tapes in a way similar to that discussed above for approximately 2,000,000 shareholders.

10. In addition to the shareholders who had odd-lot transactions from May, 1962 through May, 1968 in stocks listed on the NYSE and the Monthly Investment Plan customers described above, approximately 150,000 public individuals had odd-lot transactions during the same period in stocks listed on the NYSE through “payroll deduction plans”,6 all of which- are operated by Merrill, Lynch, Pierce, Fenner & Smith, Inc. The names and addresses of such individuals can be identified through the records of Merrill, Lynch.

11. During the relevant period, the NYSE employed an advertising program in the United States under which it advertised in approximately 755 newspapers. The approximate cost of the space for a single one-eighth page insertion in these 755 newspapers was $65,000.

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Bluebook (online)
52 F.R.D. 253, 14 Fed. R. Serv. 2d 1519, 1971 U.S. Dist. LEXIS 13847, 1971 Trade Cas. (CCH) 73,563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eisen-v-carlisle-jacquelin-nysd-1971.