Crown Cork & Seal v. Credit Suisse First Boston

Business Law

New York Law Journal


Judge James Graham

Credit Suisse and Poulsen were charged with fraud, conspiracy and Securities Exchange Act violations over failed investments in National Century Financial Enterprises. Credit Suisse sought severance of claims against Poulsen under Federal Rule of Civil Procedure 21. Discussing the five considerations in Erausquin v. Notz, Stucki Mgmt. (Bermuda) Ltd. district court denied severance, without prejudice to a stipulation severing Poulsen from trial. The court found overlapping questions of fact and law presented by the parties' claims against Credit Suisse and Poulsen. Further, distinguishing Amato v. City of Saratoga Springs, the court found judicial economy served by Poulsen's inclusion in the trial. The claims against Credit Suisse and Poulsen arose from the same transactions, and the same jury should determine issues of their liability and the apportioned share of each liable defendant and of settling defendants. Nor was severance an appropriate means to address Credit Suisse's concerns about prejudice attaching to it by association with Poulsen, a convicted felon. Both were alleged co-conspirators, and that the evidence concerning Credit Suisse's involvement in a conspiracy had withstood summary judgment.

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