IN THE UNITED STATES BANKRUPTCY COURT FOR …omnimgt.com/cmsvol2/pub_47137/593352_321.pdf · motion of artis plaintiffs’ for appointment of klehr ... in the united states bankruptcy

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IN THE UNITED STATES BANKRUPTCY COURTFOR THE SOUTHERN DISTRICT OF INDIANA

:In re: : Chapter 7

:ITT EDUCATIONAL SERVICES, INC., : Case No. 16-07207-JMC-7A

:Debtor. :

:

MOTION OF ARTIS PLAINTIFFS’ FOR APPOINTMENT OF KLEHRHARRISON HARVEY BRANZBURG LLP AS INTERIM CLASS COUNSEL

PURSUANT TO FED. R. BANKR. PROC. 7023(g)

Plaintiffs Dennis Artis, Donna A. Lindsay and Patricia Marshall (the “Artis Plaintiffs”),

by and through their undersigned counsel, Klehr Harrison Harvey Branzburg, LLP, hereby move

this Honorable Court for entry of an Order substantially in the form attached as Exhibit A

appointing Klehr Harrison Harvey Branzburg, LLP as Interim Class Counsel pursuant to Federal

Rule of Bankruptcy Procedure 7023(g), for the reasons set forth in the accompanying

Memorandum of Law in Support of the Artis’ Plaintiffs Motion for Appointment of Klehr

Harrison Harvey Branzburg, LLP as Interim Class Counsel, which is incorporated herein by

reference.

[Remaining Page Intentionally Left Blank]

Case 16-07207-JMC-7A Doc 321 Filed 10/11/16 EOD 10/11/16 21:00:42 Pg 1 of 2

PHIL1 5716566v.1

WHEREFORE, the Artis Plaintiffs respectfully request that the Court appoint Klehr

Harrison Harvey Branzburg, LLP, as interim class counsel, pursuant to Fed. R. Civ. P. 23(g),

made applicable by Federal Rule of Bankruptcy Procedure 7023(g), and for any other relief the

Court deems appropriate under the circumstances.

Respectfully submitted,

Dated: October 11, 2016LEWIS & KAPPES, P.C.

/s/ Kevin A. Morrissey______________

Kevin A. Morrissey2500 One American SquareIndianapolis, IN 46282Telephone: (317) 639-1210Facsimile: (317) [email protected]

Local Counsel for Plaintiffs

- And -

KLEHR HARRISON HARVEYBRANZBURG LLP

/s/ Charles A. Ercole__________Charles A. Ercole, Esquire*Lee D. Moylan, Esquire*Sally E. Veghte, Esquire*1835 Market Street, Suite 1400Philadelphia, PA 19103Telephone: (215) 569-2700Facsimile: (215) [email protected]@[email protected]

Attorneys for Plaintiffs

*Attorneys Admitted Pro Hac Vice

Case 16-07207-JMC-7A Doc 321 Filed 10/11/16 EOD 10/11/16 21:00:42 Pg 2 of 2

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EXHIBIT A

[Proposed Order]

Case 16-07207-JMC-7A Doc 321-1 Filed 10/11/16 EOD 10/11/16 21:00:42 Pg 1 of 3

PHIL1 5716867v.1


:In re: : Chapter 7


:Debtors. :

:

ORDER GRANTING MOTION OF ARTIS PLAINTIFFS’ FOR APPOINTMENTOF KLEHR HARRISON HARVEY BRANZBURG LLP AS INTERIM CLASS

COUNSEL PURSUANT TO FED. R. BANKR. PROC. 7023(g)

Upon the motion (the “Motion”)1 of plaintiffs Dennis Artis, Donna A. Lindsay and

Patricia Marshall, on behalf of themselves and as putative class of others similarly situated,

seeking the appointment of Klehr Harrison Harvey Branzburg, LLP as interim Class Counsel

pursuant to Federal Rule of Bankruptcy Procedure 7023(g); and the Court having determined the

relief requested in the Motion is in the best interest of the Debtor, its creditors, and all other

parties in interest; and the Court having determined that the legal and factual bases set forth in

the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of

the proceedings had before this Court; and after due deliberation thereon; and good and sufficient

cause appearing therefor, IT IS HEREBY ORDERED THAT:

1 Capitalized terms used but not defined herein have the meanings ascribed to them in the Brief.


PHIL1 5716867v.1

1. The Motion is granted.

2. Klehr Harrison Harvey Branzburg, LLP is appointed as interim class counsel for

the purposes of the WARN Act litigation.

3. The Court shall retain jurisdiction to interpret, implement and enforce the terms of

this Order.

###


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:In re: : Chapter 7


:Debtor. :

:

MEMORANDUM OF LAW IN SUPPORT OF ARTIS PLAINTIFFS’APPOINTMENT AS INTERIM CLASS COUNSELPURSUANT TO FED. R. BANKR. PROC. 7023(g)

LEWIS & KAPPES, P.C.Kevin A. Morrissey2500 One American SquareIndianapolis, IN 46282

KLEHR HARRISON HARVEY Telephone: (317) 639-1210BRANZBURG LLP Facsimile: (317) 639-4882Charles A. Ercole, EsquireLee D. Moylan, EsquireSally E. Veghte, Esquire1835 Market Street, Suite 1400Philadelphia, PA 19103Telephone: (215) 569-2700 Counsel for Plaintiffs, individuallyFacsimile: (215) 568-6603 and on behalf of all other

persons similarly situatedOctober 11, 2016


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TABLE OF CONTENTS

I. PRELIMINARY STATEMENT..................................................................................................1

II. STATEMENT OF FACTS .........................................................................................................3

III. PROCEDURAL BACKGROUND ...........................................................................................3

IV. ARGUMENT ............................................................................................................................5

A. THE COURT SHOULD APPOINT KLEHR HARRISON INTERIM CLASS

COUNSEL. ..................................................................................................................................7

B. PROPOSED INTERIM CLASS COUNSEL WILL FAIRLY AND ADEQUATELY

REPRESENT THE INTERESTS OF THE CLASS....................................................................9

a. Proposed Class Counsel Has Already Spent Considerable Time and Effort to Identify

and Investigate Claims. ..........................................................................................................10

b. Proposed Class Counsel Possess Extensive Experience Litigating Complex WARN

and Employee Class Actions..................................................................................................10

c. Proposed Class Counsel are Known Authorities in Employment Litigation, Especially

in the WARN Act...................................................................................................................11

d. Proposed Class Counsel are Prepared to Commit Substantial Resources to the Present

Litigation. ...............................................................................................................................12

V. CONCLUSION ........................................................................................................................13


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TABLE OF AUTHORITIES

CASES PAGE(S)

In re Air Cargo Shipping Servs. Antitrust Litig.,240 F.R.D. 56 (E.D.N.Y. 2006) ................................................................................................7

Anderson v. Fiserv, Inc.,2010 WL 571812 (S.D.N.Y. Jan. 29, 2010) ...........................................................................7-8

Aros v. The Pep Boys,Case No. CV 07-1755-VBF (RZX) (C.D. Cal. Jan. 15, 2008)..................................................7

In re Bank of Am. Corp. Secs., Derivative & ERISA Litis.,258 F.R.D. 260 (S.D.N.Y. June 30, 2009) ................................................................................7

In re Bear Stearns Companies, Inc. Sec., Derivative,& Employee Ret. Income Sec. Act (Erisa) Litig.,

08 M.D.L. 1963 (RWS), 2009 WL 50132 (S.D.N.Y. Jan. 5, 2009)..........................................9

In re Benedictin Litig.,857 F.2d 290 (6th Cir. 1988), cert denied, 488 U.S. 1006 (1989) ............................................6

In re Cree, Inc., Sec. Litig.,219 F.R.D. 369 (D.N.C. 2003) ..................................................................................................6

In re Hannaford Bros. Co.,252 F.R.D. 66 (D.Me. 2007)......................................................................................................5

MacAlister v. Guterma,263 F.2d 65 (2d Cir. 1958) ........................................................................................................6

In re Mun. Derivatives Antitrust Litig.,252 F.R.D. 184 (S.D.N.Y. Aug. 1, 2008) ..................................................................................8

Rangel v. Cardell Cabinetry, LLC,No. SA-13-CA-843, 2014 WL 12542900 (W.D. Tex. Jan. 22, 2014) ................................1, 11

In re Truland Grp., Inc.,520 B.R. 197 (Bankr. E.D. Va. 2014) ................................................................................11-12

In Re USF Red Star Worker Notification Litigation,MDL 1655 (E.D. Pa. 2005) .....................................................................................................10

STATUTES

Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq..............................2


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OTHER AUTHORITIES

Bankruptcy Rule 7023.....................................................................................................................4

Fed. R. Civ. P. 23(g)(1) (2) and (3) .................................................................................................3

Fed. R. Civ. P.23 (g)(1)(B)..............................................................................................................8

Fed. R. Civ. P. 23 (g)(2) ........................................................................................................ Passim

Fed. R. Civ. P. 23(g)(2)(A)..........................................................................................................2, 5

Fed. R. Civ. P. 23(g)(3) ...............................................................................................................5, 7

Federal Rule of Bankruptcy Procedure 7023 ..........................................................................1, 2, 5

Federal Rule of Civil Procedure 23 ......................................................................................1, 5-7, 9

Federal Rule of Civil Procedure 23(g) ......................................................................1, 7, 10, 11, 13

Rule 23(g) (2) of the Federal Rules of Civil Procedure ..................................................................8

Manual for Complex Litigation (2004) § 21.11 (Fourth)................................................................2

Rule 23(g)(1)(A)...........................................................................................................................7-8

Rule 23(g)(1) and Rule 23(g)(4)......................................................................................................8

Rule 23(g)(4) .........................................................................................................................1, 7, 12


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Pursuant to Federal Rule of Civil Procedure 23(g), Plaintiffs Dennis Artis, Donna A.

Lindsay and Patricia Marshall (referred to collectively herein as the “Artis Plaintiffs”) and the

undersigned counsel at Klehr Harrison Harvey Branzburg, LLP (“Klehr Harrison”) respectfully

request that this Court appoint Klehr Harrison as Interim Class Counsel (the “Proposed Class

Counsel”) for the putative class. Klehr Harrison submits this memorandum of law in support of

the requested relief.

I. PRELIMINARY STATEMENT

Even when the prospects for a distribution in a Chapter 7 case may appear dim, it makes

sense for the trustee to treat the various WARN Act claims as one represented group – even

when active litigation may be impracticable or premature. Under these circumstances, the Court

can appoint interim class counsel, pursuant to Fed.R.Civ.P. 23(g), in order to relieve the chapter

7 trustee from dealing with multiple WARN Act counsel and potentially hundreds of employee

claimants. Appointment of interim class counsel can provide the trustee with a conduit for

handling employee issues and, therefore promote efficiency while ensuing due process until class

certification is determined. There is also nothing prohibiting the Court from appointing more

than one firm as interim counsel. See Rangel v. Cardell Cabinetry, LLC, No. SA-13-CA-843,

2014 WL 12542900, at *4 (W.D. Tex. Jan. 22, 2014)(The court held that two law firms satisfied

the competency-based considerations in Rule 23(g)(1), and that they would “fairly and

adequately represent the interests of the class” as required by Rule 23(g)(4)).

Federal Rule of Civil Procedure 23, made applicable by Federal Rule of Bankruptcy

Procedure 7023 (the “Bankruptcy Rules”), requires class certification to be addressed as early as

“practicable.” The rules recognize that even pre-certification, interim class counsel may be

beneficial to act in the role of a representative of the putative class.


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This case involves Defendants’ termination of approximately eight thousand employees

from ITT’s Indiana headquarters as well as company facilities and/or campuses in California and

Louisiana as well as other states. The employees were terminated without advance written notice

as required by the Worker Adjustment and Retraining Notification Act (“WARN Act”), 29

U.S.C. § 2101 et seq.

Counsel for the Artis Plaintiffs anticipate moving for class certification under Federal

Bankruptcy Rule 7023. Prior to certification, “the Court may designate interim counsel to act on

behalf of the putative class before determining whether to certify the action as a class action.”

Fed. R. Civ. P. 23(g)(2)(A). Designation of interim counsel clarifies responsibility for protecting

the interests of the class during precertification activities, such as making and responding to

motions, conducting any necessary discovery, moving for class certification and negotiating

settlement. Manual for Complex Litigation (2004) § 21.11 (Fourth). The appointment of interim

class counsel provides ITT and the Court with the certainty of knowing that they can effectively

negotiate and address matters of common interest to the putative WARN class and the Chapter

11 proceeding as a whole, with experienced counsel who are authorized to speak for the class.

Klehr Harrison was one of the first counsel to file a WARN action here, prior to which

they spent considerable time investigating the facts which give rise to the WARN claim. Klehr

Harrison as Proposed Class Counsel has already materially advanced the claims of the proposed

class by uncovering and identifying the WARN claims, filing two separate actions on behalf of

the Artis Plaintiffs as well as a proof of claim.

Klehr Harrison has been contacted by, spoken with, and been directly retained by

numerous former ITT employees, including plaintiff Donna A. Lindsay who was employed by

ITT as a Regional Director of Recruitment and worked in ITT’s Carmel, Indiana headquarters


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facility until September 6, 2016. Klehr Harrison has the resources and experience to litigate this

claim on behalf of the proposed Class, having litigated numerous WARN class actions, a

majority of which were adversary proceedings in bankruptcy courts. Klehr Harrison’s expertise

has been recognized by this Court and many others around the nation.

“If more than one adequate applicant seeks appointment [as class counsel], “the court

must appoint the applicant best able to represent the interests of the class.” Fed. R. Civ. P. 23

(g)(2) (emphasis added). Having been named by bankruptcy courts in major WARN cases as

interim and class counsel, with WARN experience that far exceeds that of any firm, Klehr

Harrison is the best able to represent the proposed class under the criteria established for

selection of counsel by Fed. R. Civ. P. 23(g)(1) (2) and (3) and should be appointed interim class

counsel.

II. STATEMENT OF FACTS

Until its shutdown on September 6, 2016, ITT maintained and operated its headquarters

in Indiana which had 150 or more employees. Defendant also maintained other facilities in

California, Louisiana and across the United States, as that term is defined in the WARN Act,

including over 130 campuses in 38 states, employing more than 8,000 employees in the United

States. On September 16, 2016, ITT filed in this Court a voluntary petition under Chapter 11 of

Title 11 of the United States Bankruptcy Code.

III. PROCEDURAL BACKGROUND

ITT employees began contacting Klehr Harrison and its counsel for legal assistance on

September 7, 2016, the day after the company shut down. Declaration of Charles A. Ercole

(“Ercole Dec.”) ¶3. Klehr Harrison immediately assigned several attorneys and paralegals to

investigate what appeared to be terminations without advance written notice as required by the


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WARN Act. Ercole Dec. ¶4. Klehr Harrison fielded calls from many more employees in the

ensuing days after ITT filed for bankruptcy protection. Klehr Harrison was retained and asked to

commence a lawsuit by the Artis Plaintiffs and other plaintiffs on or before September 7, 2016.

Ercole Dec. ¶5. Klehr Harrison’s interviews with employees revealed a high level of concern

about the lack of adequate WARN notice or 60 days’ pay in lieu of notice, as provided for in the

statute. ITT’s actions seemed to have been taken with apparent disregard to WARN’s

requirements. Ercole Dec. ¶3. These discussions and investigations lead directly to Klehr

Harrison filing a complaint on behalf of the Artis Plaintiffs in the Delaware District Court on

September 7, 2016 (16-cv-790 RGA) and an adversary proceeding in the United States

Bankruptcy Court for the Southern District of Indiana (the “Bankruptcy Court”) on September

20, 2016 (Bankr. Case No. 16-07207-JMC-7A)(Adv. Proc. No. 16-50298-JMC). Klehr Harrison

has also filed a proof of claim in ITT”s bankruptcy case on behalf of the Artis Plaintiffs

individually and on behalf of the putative class. (See Claim 3; filed Sept. 20, 2016). The class

actions comprised claims under the federal WARN Act and ERISA as well as state law wage

claims.

Also currently pending with the Bankruptcy Court is a WARN Act adversary proceeding

filed against ITT by plaintiffs Allen Federman, Joanna Castro and Steve Ryan (the “Federman

Plaintiffs”) (Adv. Proc. No. 16-50296 JMC) (the “Federman Adversary Proceeding”). The

Federman Adversary Proceeding was filed on September 16, 2016.

On September 23, 2016, counsel for plaintiff Christin Long filed a poof of claim in the

above-captioned bankruptcy proceeding (the “Long POC”) which was previously filed as a

putative class action against ITT in the United States District Court for the Southern District of


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Indiana. The Long POC also attached a motion for an order directing the Bankruptcy Court to

apply Bankruptcy Rule 7023 to the class proof of claim.

After a status conference before the Court, the parties agreed to submit a stipulated

briefing schedule for motions seeking appointment of interim class counsel for the proposed

class of former ITT employees who were terminated on or about September 6, 2016, in an effort

to determine the most effective way to present the WARN Act claims for resolution by the

Court.1 The stipulation was filed with the Court, discussed at the hearing on October 11, 2016

and is pending approval.

IV. ARGUMENT

Rule 23 of the Federal Rules of Civil Procedure provides that a court “may designate

interim counsel to act on behalf of a putative class before determining whether to certify the

action as a class action.” Fed. R. Civ. P. 23(g)(3). In re Hannaford Bros. Co., 252 F.R.D. 66, 67

(D.Me. 2007). The Advisory Committee has recognized that ordinarily, pre-certification work is

handled by the lawyer who filed the action. Id. The Advisory Committee has recognized that

ordinary, pre-certification work is handled by the lawyer who filed the action. Id. The Advisory

Committee notes to Rule 23(g)(2)(A) also explain that the rule “authorizes [a] court to designate

interim counsel during the pre-certification period if necessary to protect the interests of the

putative class.” The Manual for Complex Litigation (2004) elaborates:

If . . . there are a number of overlapping, duplicative, or competing suits pending in other courts, and some or all of those suits may be consolidated, a number of lawyers may compete for class counsel appointment. In such cases, designation of interim counsel clarifies responsibility for protecting the interests of the class duringprecertification activities, such as making and responding to

1 Klehr Harrison, in filing this affirmative Motion under Rule 7023, reserves its right to file an opposition to the other motions seeking appointment of interim class counsel currently on file or filed at a later date, which has a return date of October 21, 2016, pursuant to the stipulation filed by the parties.


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motions, conducting any necessary discovery, moving for class certification and negotiating settlement.

§ 21.11 (Fourth)(emphasis added).

In complex cases, a court can, and customarily does, appoint lead counsel to coordinate

the prosecution of a complex case. See, e.g., In re Cree, Inc., Sec. Litig., 219 F.R.D. 369, 373

(D.N.C. 2003); In re Benedictin Litig., 857 F.2d 290, 297 (6th Cir. 1988), cert denied, 488 U.S.

1006 (1989). “The benefits achieved by consolidation and the appointment of general counsel,

i.e., elimination of duplication and repetition and in effect the creation of a coordinator of diffuse

plaintiffs through whom motions and discovery proceedings will be channeled, will most

certainly redound to the benefit of all parties to the litigation.” MacAlister v. Guterma, 263 F.2d

65, 69 (2d Cir. 1958). Appointment of proposed Class Counsel here will promote efficient

prosecution of the class claims, avoid delays in discovery and authorize Klehr Harrison to act on

behalf of the putative WARN class. Such authority is necessary for Proposed Class Counsel to

make strategic decisions impacting the putative WARN class, to protect the putative class on

pre-certification issues, and to pursue interim relief for the class.

Fed. R. Civ. P. 23 sets for the “Standard for Appoint Class Counsel” and states: “If more

than one adequate applicant seeks appointment, “the court must appoint the applicant best able to

represent the interests of the class.” Fed. R. Civ. P. 23 (g)(2) (emphasis added). Plaintiffs

request the appointment of Klehr Harrison as interim class counsel.

Proposed Class Counsel is a nationally-recognized class action law firm that has handled

numerous WARN Act cases, including a recent settlement in MF Global in the Bankruptcy Court

for the Southern District of New York. Thielmann v. MF Global Holdings Ltd., C.A. No. 11-

15059 MG and C.A. No. 11-15058 MG (Bankr. S.D.N.Y. 2011). Ercole Dec. ¶8. Proposed

Class Counsel has extensive successful experience representing plaintiffs in employment class


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actions -- including those involving WARN claims in bankruptcy court -- and have significant

knowledge of the applicable law. Ercole Dec. ¶8. The resources that Klehr Harrison can and

will commit to representing the proposed ITT class are substantial, as it has already expended

considerable time and effort to meet with the ITT employees and identify and investigate the

potential viable claims in this action. Ercole Dec. ¶9. Klehr Harrison is exceptionally well-

suited counsel to fairly and adequately represent the class.

A. THE COURT SHOULD APPOINT KLEHR HARRISON INTERIM CLASSCOUNSEL.

As one New York District Court explained in a similar context, “where multiple

overlapping and duplicative actions have been transferred to a single district for coordination of

pretrial proceedings, designation of interim class counsel is encouraged, and indeed is probably

essential for efficient case management.” In re Air Cargo Shipping Servs. Antitrust Litig., 240

F.R.D. 56, 57 (E.D.N.Y. 2006) (emphasis added) (citing the Manual for Complex Litigation

(Fourth) § 21.11 (2004)). Courts have used Rule 23(g) to create leadership structures in

employment cases. See e.g., Aros v. The Pep Boys, Case No. CV 07-1755-VBF (RZX) (C.D.

Cal. Jan. 15, 2008) (pretrial order appointing interim lead counsel in consolidated wage and hour

class action).

While neither Rule 23(g)(3) nor the Advisory Committee Notes explicitly set forth the

criteria used for selecting interim class counsel, when one class action has been filed, Rule 23

looks to whether counsel is “adequate” (Fed. R. Civ. P. 23(g)(4)), or when multiple cases have

been filed whether counsel is the “best able to represent the interests of the class.” (Fed. R. Civ.

P. 23(g)(2)). Courts have held that they are the same standards that apply in choosing class

counsel at the time of certification of the class under Rule 23(g)(1)(A). Anderson v. Fiserv, Inc.,

09 CIV. 8397 (BSJFM), 2010 WL 571812 at *2 (S.D.N.Y. Jan. 29, 2010), see, e.g., In re Air


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Cargo, 240 F.R.D. at 57; In re Bank of Am. Corp. Secs., Derivative & ERISA Litis., 258 F.R.D.

260, 272 (S.D.N.Y. June 30, 2009); In re Mun. Derivatives Antitrust Litig., 252 F.R.D. 184, 186

(S.D.N.Y. Aug. 1, 2008).

In appointing class counsel under Rule 23(g)(1)(A), the court must consider:

• the work counsel has done in identifying or investigatingpotential claims in the action,

• counsel’s experience in handling class actions, other complex litigation, and claims of the type asserted in theaction,

• counsel’s knowledge of the applicable law, and

• the resources counsel will commit to representing the class.

Anderson v. Fiserv, Inc., at *2.

Faced with competing “adequate” applicants, however, a court must go beyond

determining whether the applicant is “adequate” under Rule 23(g)(1) and Rule 23(g)(4), which

requires that counsel “fairly and adequately represent the interests of the class.” The Court

“must appoint the applicant best able to represent the interests of the class.” Id., citing Rule

23(g)(2). Additionally, the court may consider any other matter pertinent to counsel’s ability to

fairly and adequately represent the interests of the class. Fed. R. Civ. P.23 (g)(1)(B).

In Anderson v. Fiserv, Inc., the first moving party (“Gross-Elan”) sought a “Lead

Counsel” designation. In opposition, the second party, (“Zamansky”) cross-moved seeking to

have themselves appointed instead as interim class counsel pursuant to Rule 23(g) (2) of the

Federal Rules of Civil Procedure. Although the found both parties “capable” it appointed

Zamansky interim class counsel. First, it found by reviewing the firms’ resume’s and websites

that Zamansky specialized in financial and class action litigation to a greater extent than Gross-

Elan, “which also tout their capabilities in personal injury suits.” The Court found that although


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Gross-Elan had “extensive experience (and success) in class actions,” it found “puzzling” that

Gross-Elan inappropriately moved to be “Lead Counsel” which is not a criterion used in Rule 23

class litigation but rather under the Private Securities Litigation Reform Act (“PSLRA”) which

was not before the Court.

Further, the Anderson Court found that while Gross-Elan was “likely to commit

significant resources to this case if they are chosen as interim class counsel …. their papers do

not expressly make that commitment.” Finally, the Anderson Court found that while Gross-Elans

had the edge in identifying and investigating the plaintiffs’ potential claims it was not nough to

tip the balance to disfavor Zamansky, which it named interim class counsel. Applying Rule

23(g)(2) criteria in granting interim class counsel in the Bear Stearns ERISA litigation, the court

favored two firms, that inter alia, “have worked together as co-lead counsel in several ERISA

breach of fiduciary duty company stock class action cases. (citations omitted). It found “[t]his

history of cooperation should lead to the efficient, effective, and professional management and

resolution of the ERISA Actions on behalf of all Plan participants.” In re Bear Stearns

Companies, Inc. Sec., Derivative, & Employee Ret. Income Sec. Act (Erisa) Litig., 08 M.D.L.

1963 (RWS), 2009 WL 50132 (S.D.N.Y. Jan. 5, 2009). As detailed herein, Klehr Harrison has a

demonstrated and well-established bankruptcy and WARN practice in which the WARN Act

practice group has litigated successfully on behalf of many clients. Ercole Dec. ¶10.

B. PROPOSED INTERIM CLASS COUNSEL WILL FAIRLY AND ADEQUATELYREPRESENT THE INTERESTS OF THE CLASS.

Klehr Harrison has some of the most experienced lawyers in the United States in the

prosecution of WARN class actions. They have been recognized as highly experienced in

WARN Act litigation in cases before numerous federal courts.


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a. Proposed Class Counsel Has Already Spent Considerable Time and Effort toIdentify and Investigate Claims.

Klehr Harrison has already expended time and effort conducting legal and factual

research, evaluating potential claims and defenses and drafting pleadings. Ercole Dec. ¶4. Klehr

Harrison has interviewed dozens of putative class members at virtually all levels of the ITT

organization, including those involved in admissions and management, as well as those

employed at ITT”s headquarters. Ercole Dec. ¶4. Numerous individual ex-ITT employees have

already retained Klehr Harrison to litigate their WARN claims including former employees that

worked at ITT’s headquarters and in campuses located in Louisiana and other states. Ercole

Dec. ¶4.

b. Proposed Class Counsel Possess Extensive Experience Litigating Complex WARNand Employee Class Actions.

Klehr Harrison, and partner Charles A. Ercole, have represented thousands of employees

and served as lead counsel in numerous WARN class action lawsuits. Ercole Dec. ¶12. For the

aforementioned reasons, Proposed Class Counsel possesses the requisite experience and

expertise to satisfy Rule 23(g). In addition, Klehr Harrison has a robust stable of litigation

attorneys and attorneys with other specialties to round out its practice and address any related

needs of the proposed putative class.

Klehr Harrison has represented thousands of employees and Mr. Ercole has served as

lead counsel in numerous employment class action lawsuits. See, e.g., Justin Abreau v. Oakwood

Homes Corp., et al., C.A. 0213396 (Bankr. D. Del. 2002); In Re USF Red Star Worker

Notification Litigation, MDL 1655 (E.D. Pa. 2005); In Re McGraw v. Independence Blue Cross,

Docket No. 000171 (Pa. Ct. Common Pleas 2007); Rocco v. Sears, et al., No. 06-2868 (D.N.J.

2008); Riley v. Hoboken Wood Flooring, C.A. No. 2:07-cv-05666, (D.N.J. 2009); Caccamo and


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Harnois v. Mortgage Lenders Network, Adv. No. 07-51415 (D. Del. 2009); Perez v. Am.

Remanufacturers Inc., Adv. No. 06-50819 (Bankr. D. Del.); Sane v. Liberty Fibers Corp., Adv.

No. 06-05049 (Bankr. M.D. Tenn.); McDermott v. Premium Protein Prods., LLC, Adv. Proc.

Nos. 09-04076 and 09-04077 (Bankr. Nebraska.); In re Qimonda N. Am., et al., Adv. No. 09-

50192 (Bankr. D. Del.); Smith v. Arrow Trucking, No. 09-cv-810 (N.D. Okla. 2011); Fleetwood

Travel Trailers, No. 6:09-ap-01114-MJ (Bankr. C.D. Ca. 2010); Excel Storage Products, Adv.

Proc. No. 5:10-ap-00368 (Bankr. M.D. Pa. 2010); Thielmann v. MF Global Holdings, Ltd, et al.,

Adv. Proc. No. 11-02880 MG (Bankr. S.D.N.Y. 2011); Jarvis v. Patterson Global Advisors,

LLC, C.A. No. 11-864 RGA (D.Del. 2011); Woolery v. Matlin Patterson Global Advisors, LLC,

C.A. No. 12-726 RGA (D.Del. 2012); Popovich v. Hostess Brands, Inc., et al., Adv. Proc. No.

12-08314 RDD (Bankr. S.D.N.Y. 2012); Mehan v. Knightspoint Partners, C.A. 13-695 GMS

(D.Del. 2013); Mehan v. CPI, Adv. Proc. Nos. 13-51038 BLS and 13-51037 BLS (Bankr. D.Del.

2013); Matthews v. The Truland Group, Inc., et al., Adv. Proc. No. 14-01136 BFK (Bankr. E.D.

Va. 2014).

c. Proposed Class Counsel are Known Authorities in Employment Litigation,Especially in the WARN Act.

Proposed Class Counsel’s attorneys are nationally known authorities on the substantive

and procedural legal issues raised in WARN litigation in bankruptcy. Klehr Harrison adequately

demonstrates its knowledge in the substantive and procedural legal issues present in this

litigation, as required by Rule 23(g)(1). Ercole Dec. ¶13.

For example, in In re Truland Group, Klehr Harrison obtained the first published opinion

holding that WARN Act damages arising out of pre-petition layoffs should be given

administrative priority. In re Truland Grp., Inc., 520 B.R. 197 (Bankr. E.D. Va. 2014). In

Truland, the Trustee ultimately settled, in part, with a $2,000,000 administrative claim [which


12

PHIL1 5712264v.1

has been paid in full]. Some of the other significant decisions involve “single employer”

liability and the liquidating fiduciary defense. See, e.g., Woolery v. Matlin Patterson Global

Advisors, LLC, C.A. No. 12-726 RGA, Memorandum Opinion issued April 23, 2013 (D.Del.

2012); Popovich v. Hostess Brands, Inc., et al., Adv. Proc. No. 12-08314 RDD (Bankr. S.D.N.Y.

2012). Ercole Dec. ¶7.

d. Proposed Class Counsel are Prepared to Commit Substantial Resources to thePresent Litigation.

Proposed Class Counsel is ready, willing, and able to commit the resources necessary to

litigate this case vigorously. Klehr Harrison’s Litigation and Bankruptcy Departments have over

30 attorneys, as well as several paralegals to assist in the WARN class action litigation. Ercole

Dec. ¶13. Klehr Harrison has already committed the time and effort of several attorneys and

paralegals to the meetings, legal research, factual investigation, and prosecution of its adversary

proceeding and drafting of the class proof of claim, and will continue to do so, maintaining

appropriate staffing levels for each project. Ercole Dec. ¶9. Accordingly, Proposed Class

Counsel easily satisfies the adequacy requirement of Rule 23(g)(4) as well as the “best able to

represent the interests of the class” standard under Fed. R. Civ. P. 23(g)(2).


13

PHIL1 5712264v.1

V. CONCLUSION

For the foregoing reasons, the Artis Plaintiffs respectfully request that the Court appoint

Klehr Harrison Harvey Branzburg, LLP, as interim class counsel, pursuant to Fed. R. Civ. P.

23(g) and for any other relief the Court deems appropriate under the circumstances.

Respectfully submitted, October 11, 2016

LEWIS & KAPPES, P.C.

/s/ Kevin A. Morrissey____________Kevin A. Morrissey2500 One American SquareIndianapolis, IN 46282Telephone: (317) 639-1210Facsimile: (317) [email protected]

Local Counsel for Plaintiffs

- And -

KLEHR HARRISON HARVEYBRANZBURG LLP

/s/ Charles A. Ercole____________Charles A. Ercole, Esquire*Lee D. Moylan, Esquire*Sally E. Veghte, Esquire*1835 Market Street, Suite 1400Philadelphia, PA 19103Telephone: (215) 569-2700Facsimile: (215) [email protected]@[email protected]

Attorneys for Plaintiffs

*Attorneys Admitted Pro Hac Vice


PHIL1 5716502v.1


:In re: : Chapter 7


:Debtor. :

:

DECLARATION OF CHARLES A. ERCOLE IN SUPPORT OF ARTIS PLAINTIFFS’

MEMORANDUM OF LAW IN SUPPORT OF APPOINTMENT OF INTERIM CLASS

COUNSEL PURSUANT TO FED. R. BANKR. PROC. 7023(g)

Charles A. Ercole hereby makes the following declaration pursuant to 28 U.S.C. § 1746:

1. This declaration is submitted in further support of plaintiffs Dennis Artis, Donna

A. Lindsay and Patricia Marshall (referred to collectively herein as the “Artis Plaintiffs”)

memorandum of law in support of the Motion to Appointment Klehr Harrison Harvey

Branzburg, LLP (“Klehr Harrison”) as interim class counsel in this case.

2. I am a partner at Klehr Harrison and we have been retained by the Artis Plaintiffs

to assert WARN Act claims against defendant ITT Educational Services, Inc. (“Defendant” or

“ITT”) in connection with this matter, arising from ITT’s abrupt termination of employees from

its facilities, including those in its Indiana headquarters, without cause, on or about September 6,

2016 without providing 60 days advance written notice of the terminations as required by the

Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101 et. seq.

Klehr Harrison has also been retained by the Artis Plaintiffs to assert claims against ITT for

unpaid, accrued vacation pursuant to applicable state wage laws.

3. ITT’s actions seemed to have been taken with apparent disregard to WARN’s

requirements. As a result, Klehr Harrison has been monitoring the ITT situation from the

moment ITT closed its doors on September 6, 2016 and then filed for bankruptcy protection on


PHIL1 5716502v.1

September 16, 2016. ITT employees began contacting Klehr Harrison and its counsel for legal

assistance on September 7, 2016, the day after the company shut down.

4. Klehr Harrison immediately assigned several attorneys and paralegals to

investigate what appeared to be terminations without advance written notice as required by the

WARN Act. Klehr Harrison has interviewed many potential putative class members at virtually

all levels of the ITT organization, including those involved in admissions and management as

well as those employed at ITT’s headquarters. Numerous individual ex-ITT employees have

already retained Klehr Harrison to litigate their WARN claims including former employees that

worked at ITT’s headquarters and in campuses located in Louisiana and other states. Klehr

Harrison has already expended time and effort conducting legal and factual research, evaluating

potential claims and defenses and drafting pleadings.

5. On the day of the layoffs, after having identified and investigated potential class

action claims of the former employees of ITT under the WARN Act, Klehr Harrison’s extensive

WARN Act litigation experience allowed them to react immediately on behalf of the Artis

Plaintiffs and putative class members through the filings of a WARN Act complaint in the

District Court for the District of Delaware on September 7, 2016 and then an Adversary

Proceeding in the Bankruptcy Court for the Southern District of Indiana, Indianapolis Division,

on September 20, 2016 as well as a class proof of claim on September 20, 2016 (Claim No. 3).

6. After realizing that two WARN Act class adversary proceeding filings had been

made (which concerned the same claims), Klehr Harrison conferred with the other claimants and

agreed to submit briefing to the Bankruptcy Court on the most efficient method to handle the

appointment of interim class counsel. Klehr Harrison then focused on identifying and

investigating other potential claims of the terminated employees of ITT.


PHIL1 5716502v.1

7. The WARN Act group at Klehr Harrison has litigated successfully on behalf of

many clients as set forth on its micro website www.warnactlawyer.com. Klehr Harrison has also

established significant WARN Act case law precedent. For example, in In re Truland Group,

Klehr Harrison obtained the first published opinion holding that WARN Act damages arising out

of pre-petition layoffs should be given administrative priority. In re Truland Grp., Inc., 520 B.R.

197 (Bankr. E.D. Va. 2014). In Truland, the Trustee ultimately settled, in part, with a

$2,000,000 administrative claim [which has been paid in full]. Some of the other significant

decisions involve “single employer” liability and the liquidating fiduciary defense. See, e.g.,

Woolery v. Matlin Patterson Global Advisors, LLC, C.A. No. 12-726 RGA, Memorandum

Opinion issued April 23, 2013 (D.Del. 2012); Popovich v. Hostess Brands, Inc., et al., Adv.

Proc. No. 12-08314 RDD (Bankr. S.D.N.Y. 2012).

8. Proposed Class Counsel is a nationally-recognized class action law firm that has

handled numerous WARN Act cases. Klehr Harrison is a firm with numerous WARN class

counsel appointments including a recent settlement in MF Global in the Bankruptcy Court for the

Southern District of New York. Thielmann v. MF Global Holdings Ltd., C.A. No. 11-15059 MG

and C.A. No. 11-15058 MG (Bankr. S.D.N.Y. 2011). Klehr Harrison also has extensive

successful experience representing plaintiffs in employment class actions -- including those

involving WARN claims in bankruptcy court -- and has significant knowledge of the applicable

law.

9. The resources that Klehr Harrison can and will commit to representing the

proposed ITT class are substantial, as it has already expended considerable time and effort to

meet with the ITT employees and identify and investigate the potential viable claims in this

action.


PHIL1 5716502v.1

10. Klehr Harrison has a demonstrated and well-established bankruptcy and WARN

practice in which the WARN Act practice group has litigated successfully on behalf of many

clients.

11. I am a member of the following bars: Commonwealth of Pennsylvania; State of

New Jersey; United States District Courts for the Eastern and Middle Districts of Pennsylvania;

United States District Court for the District of New Jersey; United States Court of Appeals for

the Third Circuit; and the United States Supreme Court. I am appearing Pro Hac Vice before this

Honorable Court in the above-captioned matter.

12. Klehr Harrison and I have represented thousands of employees and served as lead

counsel in numerous employment class action lawsuits. See, e.g., Justin Abreau v. Oakwood

Homes Corp., et al., C.A. 0213396 (Bankr. D. Del. 2002); In Re USF Red Star Worker

Notification Litigation, MDL 1655 (E.D. Pa. 2005); In Re McGraw v. Independence Blue Cross,

Docket No. 000171 (Pa. Ct. Common Pleas 2007); Rocco v. Sears, et al., No. 06-2868 (D.N.J.

2008); Riley v. Hoboken Wood Flooring, C.A. No. 2:07-cv-05666, (D.N.J. 2009); Caccamo and

Harnois v. Mortgage Lenders Network, Adv. No. 07-51415 (D. Del. 2009); Perez v. Am.

Remanufacturers Inc., Adv. No. 06-50819 (Bankr. D. Del.); Sane v. Liberty Fibers Corp., Adv.

No. 06-05049 (Bankr. M.D. Tenn.); McDermott v. Premium Protein Prods., LLC, Adv. Proc.

Nos. 09-04076 and 09-04077 (Bankr. Nebraska.); In re Qimonda N. Am., et al., Adv. No. 09-

50192 (Bankr. D. Del.); Smith v. Arrow Trucking, No. 09-cv-810 (N.D. Okla. 2011); Fleetwood

Travel Trailers, No. 6:09-ap-01114-MJ (Bankr. C.D. Ca. 2010); Excel Storage Products, Adv.

Proc. No. 5:10-ap-00368 (Bankr. M.D. Pa. 2010); Thielmann v. MF Global Holdings, Ltd, et al.,

Adv. Proc. No. 11-02880 MG (Bankr. S.D.N.Y. 2011); Jarvis v. Patterson Global Advisors,

LLC, C.A. No. 11-864 RGA (D.Del. 2011); Woolery v. Matlin Patterson Global Advisors, LLC,


PHIL1 5716502v.1

C.A. No. 12-726 RGA (D.Del. 2012); Popovich v. Hostess Brands, Inc., et al., Adv. Proc. No.

12-08314 RDD (Bankr. S.D.N.Y. 2012); Mehan v. Knightspoint Partners, C.A. 13-695 GMS

(D.Del. 2013); Mehan v. CPI, Adv. Proc. Nos. 13-51038 BLS and 13-51037 BLS (Bankr. D.Del.

2013); Matthews v. The Truland Group, Inc., et al., Adv. Proc. No. 14-01136 BFK (Bankr. E.D.

Va. 2014).

13. In addition to my experience, Klehr Harrison’s Litigation and Bankruptcy

Departments have over 30 attorneys, as well as several paralegals at our client’s disposal to assist

in the class action litigation. At least ten of our attorneys have worked on WARN Act cases in

the past. Its expertise in WARN Act litigation and bankruptcy makes it uniquely qualified to

serve as interim class counsel and lead counsel. Klehr Harrison adequately demonstrates its

knowledge in the substantive and procedural legal issues present in this litigation, as required by

Rule 23(g)(1).

14. I submit that Klehr Harrison’s counsel are the most experienced and best suited to

represent the putative class in this matter and are prepared to vigorously litigate this matter.

15. I pledge to the Court that I will comport myself professionally and courteously,

towards all other counsel in these cases, and that I will act always in the best interests of the

putative class.

16. In view of the foregoing, the Artis Plaintiffs respectfully request that the Court

appoint Klehr Harrison as Interim Class Counsel under Rule 23(g)(2) for the putative class in

this case and all competing cases.


PHIL1 5716502v.1

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct to the best of my knowledge and belief.

Date: October 11, 2016

/s/ Charles A. Ercole___________________Charles A. Ercole (Admitted Pro Hac Vice)


PHIL1 5716633v.1

CERTIFICATE OF SERVICE

I hereby certify that on October 11, 2016, a copy of the foregoing Motion of Plaintiffs

Dennis Artis, Donna A. Lindsay and Patricia Marshall to Appoint Klehr Harrison Harvey

Branzburg, LLP as Interim Class Counsel Pursuant to Federal Rule of Bankruptcy Procedure

7023(g) along with accompanying Memorandum in Support of the Motion and the Declaration

of Charles A. Ercole was filed electronically. Notice of this filing will be sent to the following

parties through the Court’s Electronic Case Filing System. Parties may access this filing through

the Court’s system.

Scott S. Anders [email protected], [email protected] Dee Baird [email protected], [email protected]; [email protected] I. Baird [email protected], [email protected] Flynn Bartram [email protected], [email protected] James Bernard [email protected] Ligocki Blackwell [email protected] D. Britton [email protected], [email protected];

[email protected] E. Carlberg [email protected], [email protected];

[email protected] Caruso [email protected], [email protected];[email protected] J. Caruso [email protected], [email protected]; mcruser@rubinlevin.

netJoshua W. Casselman [email protected], [email protected] A. Chae [email protected] Edward Collins [email protected] D. Coppel [email protected] M. Crockett [email protected], [email protected] H DeCelles [email protected] R. DeNeal [email protected], [email protected];

[email protected] A DuVall [email protected], [email protected] Engen [email protected] Anthony Ercole [email protected], [email protected] W Ferich [email protected] Eve French [email protected] Ari Hammond [email protected], [email protected] Craig Harris [email protected] Herrera [email protected], [email protected] W. Hile [email protected], [email protected] C. Hoard [email protected], [email protected];[email protected] A Hokanson [email protected], [email protected];

[email protected]


PHIL1 5716633v.1

Jeffrey L Hunter [email protected], [email protected];[email protected];[email protected]

James C Jacobsen [email protected], [email protected] K. Jacobson [email protected], [email protected];

[email protected] Jaffe [email protected], [email protected] F Johns [email protected], [email protected] R. Jost [email protected], [email protected] Q. Karcher [email protected] Kim [email protected] M King [email protected], [email protected];[email protected] Joel Kotler [email protected] Scott Kulback [email protected] D Levenhagen [email protected] Hoover MacAnally [email protected], [email protected] J. Marwil [email protected], [email protected];[email protected];

[email protected] Francis Mastrian [email protected] K. McCrory [email protected], [email protected] W. Miller [email protected] P Moloy [email protected], [email protected];[email protected] J. Moore [email protected] F Morris [email protected] Alonzo Morrissey [email protected],

[email protected];[email protected];[email protected]

Whitney L Mosby [email protected], [email protected] Daniel Motsinger [email protected], [email protected];

[email protected];[email protected] Duck Moylan [email protected], [email protected] M. Nann [email protected] A Raisner [email protected] Hjalmer Reischl [email protected] E Rossow [email protected], [email protected];robin@rubinlevin.

net;[email protected] Sara Roupinian [email protected], [email protected];

[email protected];[email protected];[email protected];[email protected]

Craig Damon Rust [email protected], [email protected] Michael Sanders [email protected] C Scherer [email protected], [email protected] C. Sorrell [email protected] David Sundheimer [email protected] R. Theisen [email protected], [email protected];mcruser@rubinlevin.

netJessica L Titler [email protected] M. Tucker [email protected], [email protected],[email protected]. Trustee [email protected] E Veghte [email protected], [email protected] Benton Willey [email protected]


PHIL1 5716633v.1

I further certify that on the 11th day of October, 2016, a copy of the foregoing was mailed by first-class United States mail, postage prepaid, and properly addressed to the following:

Eboney CobbPerdue Brandon Fielder Collins Mott LLP500 E Border Street Suite 640Arlington, TX 76010

Alan M Grochal100 East Pratt Street 26th FloorBaltimore, MD 21202

Paul Weiser Esq.Bachalter Nemer16435 North Scottsdale Road, Suite 440Scottsdale, AZ 85254-1754

Elizabeth WellerLinebarger Goggan Blair & Sampson, LLP2777 N. Stemmons Freeway, Suite 1000Dallas, TX 75207

/s/ Charles A. Ercole___________________Charles A. Ercole (Admitted Pro Hac Vice)


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IN THE UNITED STATES BANKRUPTCY COURT FOR …omnimgt.com/cmsvol2/pub_47137/593352_321.pdf · motion of artis plaintiffs’ for appointment of klehr ... in the united states bankruptcy