Class Action Complaints Warranted Sua Sponte Consolidation under Rule 42 Iowa Federal Court Holds
Plaintiff filed two putative class action lawsuits in Iowa federal court, one against Midland National Life Insurance and the other against American Equity Investment Life Insurance, alleging violations of RICO (Racketeer Influenced and Corrupt Organizations Act), conspiracy and unjust enrichment in that they “knowingly used licensed agents that engaged in unfair, improper, and unlawful sales practices in connection with the solicitation, offering, and sale of deferred annuity products to senior citizens.” Bendzak v. Midland Nat’l Life Ins. Co., 240 F.R.D. 449, 450 (S.D. Iowa 2007). The district court sua sponte ordered the two class actions consolidated, holding that the requirements of FRCP Rule 42 were satisfied, id., but invited defense and plaintiff’s counsel to advise the court if they believed consolidation “would lead to inefficiency, inconvenience, or unfair prejudice to a party,” id., at 451.
The district court held that consolidation was warranted because the two class actions involved common issues of law and fact, explaining at page 450:
[E]ach of the proposed class actions asserts essentially identical or overlapping claims and involves common issues of law and fact, in that each action alleges that the Defendants … engaged in unfair, improper, and unlawful sales practices to prey upon senior citizens. In her complaint against Midland, Bendzak outlines nine questions of law or fact that are common amongst the proposed class members; in her complaint against American, Bendzak outlines the same nine common questions of law and fact. Indeed, except for very minor differences in the facts of each case, such as the number of deferred annuities that were sold (eight deferred annuities in Midland versus two deferred annuities in American), and the time period in which the deferred annuities were sold (April 2001 to January 2002 in Midland versus August 2002 to November 2002 in American), the complaints in the two actions are identical.
The federal court found that the fact the two class action complaints involved different defendants was immaterial, Bendzak, at 450-51; the fact remained that consolidation “would avoid unnecessary cost, delay, repetition, confusion, and expedite trial,” id., at 451. The district court assured the parties, however, that it would “revisit this issue upon a motion by either party” if so requested. Id.
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