NEW YORK (Legal Newsline) - A federal judge in New York accused lawyers at the prominent class-action firm Robbins Geller of making false statements in a securities lawsuit in order to locate it in a venue convenient to its Long Island office.
It was the second time in a month that San Diego-based Robbins Geller has been admonished by a federal judge for misleading behavior. On May 19, a judge removed the law firm as lead counsel in a lawsuit against Grupo Televisa for failing to tell the court its client had made more money shorting stock in the company than it had from the supposed fraud.
Robbins Geller has a long history of run-ins with judges over allegedly deceptive behavior, including citing unnamed “confidential witnesses” in securities class actions who turn out to either lack specific knowledge about the facts in the case or defendants claim do not exist. One judge sanctioned the firm for providing “blatantly false” information to the court, apparently without attempting to verify it.
In the latest case, Robbins Geller competed vigorously with Pomerantz LLP for control of a class action against several shipping companies, filing proposed class actions in the federal court for the eastern district of New York. In one suit, Silverberg v. Dryships, the law firm answered “yes” to a question about whether events described in the case arose in Nassau or Suffolk counties in Long Island.
Robbins Geller and Pomerantz dueled for control of the litigation for two years, filing similar lawsuits in various New York courts until Pomerantz was selected lead counsel for one of them.
While the lawsuits were still pending, Robbins Geller argued the judge in Silverberg v. Dryships should postpone deciding a motion to dismiss while another law firm appealed the dismissal of a suit against Top Ships to the Second Circuit, saying the cases raised similar issues. After the Second Circuit affirmed the dismissal, Robbins changed its argument, saying Silverberg could be distinguished.
On May 20, U.S. District Judge Gary Brown ordered Robbins Geller to provide more information about how the Silverberg case was related to his judicial district. Under federal court rules for the Eastern District, judge can only hear cases arising from events that occurred in Long Island.
Robbins Geller replied that the case arose “from defendants’ alleged issuance of materially false and misleading statements” that were transmitted to investors via the internet throughout the U.S., including Nassau and Suffolk Counties.
“While this response gives a theoretical framework by which the representations might have been true, this construct is, of course, equally so for the other three counties in this judicial district, or, for that matter, any other county in the United States,” Judge Brown observed in a May 28 order removing the case from his court. “Unfortunately, sophistry aside, other information provided demonstrates that Robbin Geller’s certification was simply false.”
The lead plaintiffs reside in New York County and Oklahoma, the judge said, meaning stock purchases and information had nothing to do with his territory. Robbins Geller defended its choice of venue by saying it has an office in Long Island, the judge said, but the location of a law firm has no place in deciding where to hear a case.
The actions of Robbins Geller in this matter in falsely certifying these cases as Long Island cases – and then trying to defend its actions with spurious legal arguments -- are reprehensible and could well have subjected the firm to sanctions,” the judge concluded. He declined to order sanctions, however, saying the delays and costs from moving the cases out of his court after two years of pretrial motion practice “will hopefully serve as some disincentive to future misconduct.”