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Thomas Denney, on His Own Behalf and on Behalf of All Others Similarly Situated, R. Thomas Weeks, on His Own Behalf and on Behalf of All Others Similarly Situated, Norman R. Kirisits, on His Own Behalf and on Behalf of All Others Similarly Situated, Td Cody Investments, L.L.C., on Their Own Behalf and on Behalf of All Others Similarly Situated, Rtw High Investments, L.L.C., on Their Own Behalf and on Behalf of All Others Similarly Situated, Nrk Syracuse Investments, L.L.C., on Their Own Behalf and on Behalf of All Others Similarly Situated, Dkw Partners, on Their Own Behalf and on Behalf of All Others Similarly Situated, Dkw Lockport Investors, Inc., on Their Own Behalf and on Behalf of All Others Similarly Situated, Donald A. Destefano, on His Behalf and on Behalf of All Others Similarly Situated, Patricia J. Destefano, on Her Own Behalf and on Behalf of All Others Similarly Situated, Dd Tiffany Circle Investments, L.L.C., on Their Own Behalf and on Behalf of All Others Similarly Situated, Tiffany Circle Par

Citations: 443 F.3d 253; 2006 U.S. App. LEXIS 8318Docket: 05-1275

Court: Court of Appeals for the Sixth Circuit; March 30, 2006; Federal Appellate Court

Narrative Opinion Summary

In a complex class action lawsuit involving numerous plaintiffs against Deutsche Bank AG and other entities, the Second Circuit Court addressed issues of class certification, settlement approval, and legal standing. The case centered on allegations of fraudulent tax counseling by professional advisors, leading to penalties for some class members. The plaintiffs challenged the district court's certification of a class action and approval of a settlement involving illegal tax strategies, arguing it included members without assessed penalties and lacked a second opt-out period. The court affirmed the class certification, emphasizing that class members need not individually prove standing if the named plaintiff establishes it for the class. However, the settlement's judgment credit provisions were vacated and remanded for lacking clarity in protecting nonsettling defendants' rights. The court also upheld that RICO claims require a concrete injury to business or property. Ultimately, the appellate court balanced class action procedural rules and due process considerations, affirming parts of the lower court's decision while remanding others for further proceedings.

Legal Issues Addressed

Article III Standing Requirements

Application: Class members need not individually demonstrate standing; the named plaintiff's standing suffices for class action, providing all members share a common injury.

Reasoning: Class members in a class action lawsuit are not required to individually demonstrate personal standing; only the named plaintiff must establish standing for the class.

Class Certification under Federal Rule of Civil Procedure 23

Application: The district court's class certification was affirmed, allowing settlement purposes under Rule 23(b)(3), despite challenges to adequacy and standing.

Reasoning: The court affirms the district court's class certification decision but vacates and remands on the contribution and indemnity provisions, finding they inadequately protect the rights of nonsettling defendants and third parties.

Due Process in Class Action Settlements

Application: The court found no due process violation in the absence of a second opt-out period after settlement revisions, relying on initial notice adequacy.

Reasoning: The court's decision to approve a settlement without a new opt-out period is based on the understanding that the original notice informed class members of potential changes.

RICO Standing and Injury Requirements

Application: RICO claims require clear and definite injury to business or property, a more stringent criterion than Article III standing.

Reasoning: RICO standing is defined as more stringent than Article III standing, requiring plaintiffs to demonstrate injury to business or property caused by the RICO violation.

Settlement Approval and Judgment Credit Provisions

Application: The appellate court vacated and remanded for modifications to ensure clarity in judgment credit provisions protecting nonsettling defendants' rights.

Reasoning: The judgment of the district court is vacated and remanded for modifications regarding judgment credit and bar order provisions.