ELNY Class Action Dismissed

Attorneys representing Executive Life of New York (ELNY) shortfall victims have voluntarily dismissed an ELNY class action lawsuit without prejudice preserving their right to refile claims and tolling the statute of limitations.

The dismissal of the ELNY class action lawsuit follows:

• Contempt Order Issued - Judge M. Galasso sanctioned attorney Edward Stone and representatives of the Christensen & Jensen law firm for civil contempt February 25, 2013 for filing the ELNY class action lawsuit in the United States District Court Southern District of New York in violation of existing ELNY anti-lawsuit injunction orders.
• Anticipated Appeal of Contempt Order - Stone and Christensen & Jensen responded January 28, 2013 with a press release announcing their plan to pursue an appeal of the contempt order with the Appellate Division of the Supreme Court of the State of New York.
• Appeal of Liquidation Order Denied - The Appellate Division of the Supreme Court of the State of New York, Second Department denied an appeal February 6, 2013 challenging the ELNY Order of Liquidation and Approval of the ELNY Restructuring Agreement signed by Judge Galasso on April 16, 2012.

Attorney Stone has informed S2KM Limited the voluntary dismissal of the ELNY class action was a "strategic decision" attributable to Judge Galasso's contempt order which left open the possibility of additional fines for continued legal efforts to protect ELNY shortfall payees. Judge Galasso's contempt order provides in relevant part:

"Should [Superintendent Benjamin M Lawsky] accrue additional legal expenses, such as in filing a motion to dismiss the federal complaint upon a successful appellate result, [Stone and Christensen & Jensen] may be subject to an additional fine."

Judge Galasso acknowledged in the contempt order: "This Court is not empowered to dismiss the federal complaint outright."

Stone and the Christensen law firm maintain that the blanket immunity and permanent injunction granted by Judge Galasso in the ELNY liquidation order go beyond what Article 74 of the New York Insurance Law allows and that Judge Galasso's contempt order violates the United States Constitution.

In a letter written to United States District Judge Jesse M. Furman prior to the voluntary dismissal of the ELNY class action lawsuit, attorney Roger Christensen quoted from the 1964 decision of the United States Supreme Court in Donovan v. City of Dallas: "Early in the history of our country, a general rule was established that state and federal courts would not interfere with or try to restrain each others proceedings. That rule has continued substantially unchanged to this time."

Christensen's letter continued: "It could not be more clear that a state court cannot enjoin a federal action or use contempt proceedings to preclude citizens' attempts to have their claims heard in federal court."

For S2KM's complete reporting about the ELNY liquidation, including related litigation and an Executive Life timeline, see the structured settlement wiki.