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Case: Akely et al. v. Kinnicutt et al. (1924, NY) [App.

12-15]

Parties: Plaintiff - Akely (respondent)


Defendant - Kinnicutt (appellant)

Procedural History:

Facts: 193 plaintiffs (investors) brought an action against D, who issued a


intentionally fraudulent prospectus that described the assets of their company,
which induced people to buy stock at a much higher price than its actual value.
The investors joined their causes of action in one action. D motioned the trial
court to separate the actions into 193 separate claims. Trial court dismissed the
motion, and D appeals.

Issue: Whether the 193 separate actions can be joined into one action. Yes.

Holding: Trial court dismissal affirmed. The 193 claims can be joined.

Reasoning: the 193 actions can be joined as a separate claim as long as:
○ Each of the claims arose out of the same transaction or series of
transactions, so as to permit joinder under Civil Practice Act, §209.
○ It is not in violation of the US constitution (Art 1 & 2 - right to a jury
trial) because preventing defendant from a right to a new jury for each cause of
action, because so long as the right of jury trial is preserved, the details of
the method of right to a jury trial is largely suject to legislative discretion.
Further, the joinder of the investors' claims would not embarrass or delay the
trial of the action but instead, would facilitate it.

RULE:

Notes

• All 193 Ps, have joined together on one complaint to allege D cheated them.
• These are not 193 separate lawsuits, but Ps have all suffered the same injury.
• Why would P prefer to set it up all together, rather than individually?
○ Efficiency (cheaper - someone has to write all the claims, and court fees,
and easier for judicial system)
○ More leverage to try to force a settlement
§ partly b/c more press
§ Partly b/c more likely to get a settlement b/c as a matter of proof,
193 ppl more persuasive to jury rather than just 1
□ Knowing that this is likely to be the effect on the jury, D
more likely to settle
• As counsel for D, will argue that P cant do this (b/c of the effect on the
jury),
○ You would say "the 193 Ps are not claiming damages from the same
transaction or occurrence were defrauded, if at all, in a diff time and place for
each"
○ There has to be some trade-off btwn efficiency and individual damages
• The reality is that both sides are right
○ Could be one transaction or 193 transactions.
○ Plausible argument of whether the questions of fact are common to all 193
Ps.
• So, as a judge rather than saying it is same transaction, you step back and
think about the purpose of why we're here - public policy - get the efficiency
benefits of trying the claims together. On the other hand, the dangers of spill-
over effects, and that individual justice will not be done if only 5 of the 193
were actually defrauded.
○ So court of appeals say - yes, there are some questions of law in common,
and some not.
§ One fraudulent scheme to defraud the public, and then individual
transactions
○ So, court looks at how this balances out, and have to conclude that
overwhelming amount of judicial time will go to same questions, but there is a
duty to maintain diligence to avoid the prejudice.
§ Can go on same complaint, and then if necessary at a later point,
separate them.
○ What is court trying to do with this rule - getting the efficiency, etc.
○ Benefits of efficiency outweigh dangers of prejudice.