Plaintiffs may not proceed with class actions against lawyers and auditors who worked for the defendants in an earlier class action, the 1st U.S. Circuit Court of Appeals has ruled.
On Sept. 22, a unanimous panel held that a constructive trust established by the judge in the first action could not reach payments made by the defendants to lawyers and accountants in exchange for services. It also ruled the new class actions were entirely new lawsuits, not enforcement actions for the prior case, and they could not proceed unless the class was certified anew.
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