The Wisconsin Civil Justice Council and Metropolitan Milwaukee Chamber of Commerce have filed an amicus brief in Yandoli v. REV Group, Inc. arguing the court should stay state court proceedings in a securities class action lawsuit when an identical class action case is ongoing in federal court.

Plaintiffs filed actions against REV Group, a Milwaukee manufacturer, when its stock price dropped after its initial public offering. Plaintiffs in three federal lawsuits and the instant state case claim REV Group violated Sections 11 and 15 of the federal 1933 Act. The federal litigation consists of not only the same claims but also the same defendants, factual allegations, alleged class, and relief sought. Wisconsin courts typically stay proceedings when a class action involving federal laws is filed in federal court. However, the state circuit court in this case denied the defendants’ motion to stay because the named plaintiff differs from the named plaintiff in the federal litigation.

The WCJC brief asks the Court of Appeals District II to overturn the circuit court’s decision and stay the state case while the federal case is pending. The brief argues that:

1. The circuit court’s decision not to stay the state level proceedings will harm Wisconsin businesses by allowing for meritless duplicative securities litigation. If permitted to stand, the holding will encourage a parade of opportunistic plaintiff attorneys to file duplicative lawsuits, forcing Wisconsin businesses to defend identical lawsuits in different venues.
2. Allowing such “copycat” shareholder litigation to proceed in Wisconsin will significantly increase costs and harm Wisconsin’s business climate. Costs of defending these lawsuits will be borne by shareholders, employees, and consumers in Wisconsin. Furthermore, the “litigation tax” companies must consider in an unfavorable business climate would disincentivize growth and investment in the Wisconsin economy.
3. The circuit court’s decision contravenes the purpose of the Commercial Court Pilot Project to increase efficiency and predictability in business litigation in Wisconsin. If the lower court’s decision is allowed to stand, it would open the Business Court (in which this case was filed) to numerous lawsuits that were never intended when the pilot rule was put into place by the Wisconsin Supreme Court. Allowing this type of litigation to proceed in the Business Court undermines the success of the project, which was expanded statewide beginning April 1, 2019.