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March 28, 2003


The opinion of the court was delivered by: Wayne R. Andersen, United States District Court


Lead Plaintiffs, Thomas Levitan, Janice Fredo, and William Syll, Jr., bring this putative class action on behalf of themselves and those similarly situated against Defendants, Bank One Corporation ("Bank One"), John B. McCoy, Richard J. Lehmann, and Michael J. McMennamin (collectively, the "Defendants"). Plaintiffs now move for class certification pursuant to Fed.R.Civ.P. 23. Defendants oppose Plaintiffs' motion on the basis that the proposed class representatives do not satisfy the requirements of Fed.R.Civ.P. 23(a), lead counsel has an alleged conflict with the class, and the proposed class definition is too broad. For the following reasons, we grant Plaintiffs' motion for class certification, although we will exclude from the class those persons who sold their stock prior to August 24, 1999.


Lead Plaintiffs bring this case on their own behalf and on behalf of persons who exchanged their shares of First Commerce Corporation ("First Commerce") common stock for shares of Old Bane One common stock in connection with the merger of the two companies and pursuant to the Registration Statement and Merger Proxy/Prospectus launching that merger. In that merger, Lead Plaintiffs and all other First Commerce stockholders received 1.408 shares of Old Bane One common stock in exchange for each share of First Commerce common stock held by them. The merger was consummated on June 12, 1998. In connection with that merger, plaintiffs allege the following.

Prior to, and at the time of the merger, Old Bane One represented that one of the major strengths of its operations was the tremendous growth reported at its credit card division, First USA Bank, N.A. ("First USA"), which was the third largest credit card issuer in the country at the time. This enormous growth was reflected in Old Banc One's financial statements, which were included in the Registration Statement.

The growth reported by Old Bane One at First USA, however, allegedly was achieved, in large part, through undisclosed illegal practices, including, improper billing procedures and charging excessive late fees and interest to its credit card customers. These practices allegedly violated the Federal Truth In Lending Act ("TILA") and also rendered Old Banc One's financial statements false and misleading in that they did not comply with Generally Accepted Accounting Principles ("GAAP") or otherwise present Old Bane One's financial condition fairly. On July 31, 1998, Old Bane One merged with First Chicago NBD and the new entity is known as Bank One Corporation. ("Bank One").

On August 24, 1999, Bank One issued a press release announcing a reduction to its projected earnings estimates for 1999. On November 10, 1999, Bank One announced a further reduction in its earnings expectations for 1999. Following these announcements, the price of Bank One's common stock dropped. A series of lawsuits were filed challenging Bank One's reporting of historical earnings.

A class action has been certified on behalf of First Chicago shareholders in the consolidated First Chicago Shareholder Actions (#00 C 767) and on behalf of Old Bane One shareholders in the Old Bane One Shareholder Action (00 C 2100). The Complaint in this case (hereinafter referred to as the "First Commerce case") is virtually identical to the consolidated complaint in the First Chicago and Old Bane One shareholder actions. The First Commerce Complaint alleges that the Registration Statement and Proxy/Prospectus issued in connection with First Commerce's merger with Old Bane One, as well as the 1997 Form 10K and first quarter 1998 Form 10Q incorporated into those documents, contain false and misleading statements and omissions. The alleged misrepresentations all focus on First USA. The Complaint alleges that First USA's payment processing and charging of late fees violated TILA and that Old Banc One's financial statements regarding actual earnings were artificially inflated by the alleged TILA violations. The Complaint alleges claims against Defendants under Sections 11 and 12(a)(2) of the Securities Act, the same statutes at issue in the First Chicago and Old Bane One Litigation.

Prior to the reassignment of this case to this Court from the docket of Judge Coar, Judge Coar appointed the following persons to serve as Lead Plaintiffs as required by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4 (a) et seq.: Thomas Levitan, William H. Syll, Jr., Anna P Caradonna and Janice C. Fredo, as Joint Tenants with Right of Survivorship, and Blame Richardson. Mrs. Caradonna died after the appointment and Mr. Richardson has determined that he no longer wishes to represent the class in the case. Lead Plaintiffs all were shareholders of First Commerce, and they have all signed Plaintiff Certification affidavits.

Plaintiffs now bring a motion to certify a class of former First Commerce shareholders and ask this Court to appoint Fredo, Levitan, and Syll as representatives of the class and to appoint Edwin Mills of Stull, Stull & Brody and Joseph Weiss of Weiss & Yourman as Co-Lead Counsel. In addition, Plaintiffs request that Robert Allison of Robert D. Allison & Associates be appointed as Liaison Counsel for the class.


I. Class Certification Is Particularly Appropriate In Securities Cases

The Seventh Circuit Court of Appeals has liberally construed Rule 23 in shareholder suits. See King v. Kansas City Southern Industries, Inc., 519 F.2d 20, 25-26 (7th Cir. 1975). Courts in this district recognize that:

securities fraud cases are uniquely situated to class action treatment since the claims of individual investors are often too small to merit separate lawsuits. The class action is thus a useful device in which to litigate similar claims as well as an efficient deterrent against corporate wrongdoing.
Gilbert v. First Alert, Inc., 904 F. Supp. 714, 719 (N.D.Ill. 1982). A class action is often the most fair and practicable means to address claims in securities cases. Brosious v. Children Place Retail Stores, 189 F.R.D. 138, 147 (D.N.J. 1999) ("[c]lass actions are often the most fair and practical vehicle for plaintiffs' claims in securities suits because `those who have been injured are in a poor position to seek legal redress' . . . because individual claims might be small in monetary value, they might not be prosecuted on an individual basis due to the costs of litigation"). See also Endo v. Albertine, 147 F.R.D. 164 (N.D.Ill. 1993) (certifying plaintiff class under § 11 of the 1933 Act).

II. The Proposed Class Meets the Prerequisites of Rule 23(a).

A suit may be maintained as a class action if it satisfies the four prerequisites of Rule 23(a) and, in addition, meets the conditions of one of the subsections of Rule 23(b). Harriston v. Chicago Tribune Co., 992 F.2d 697, 703 (7th Cir. 1993); Rosario v. Livadids, 963 F.2d 1013, 1017 (7th Cir. 1992), cert. denied, Livaditis v. Rosario, 506 U.S. 1051 (1993).

Rule 23(a) provides:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interest of the class.
In this case, Defendants do not challenge whether this action satisfies the numerosity and commonality ...

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