A Philadelphia judge has certified as a class the non-management employees of a Massachusetts biopharmaceuticals firm who claim the company should not have canceled stock options it had previously awarded to them.

In Dearlove v. Genzyme Transgenics Corp., which was filed with Philadelphia’s Commerce Case Management Program, Judge Albert W. Sheppard Jr. concluded that the 600-plus employees of Primedica Corp. – a Worcester, Mass., subsidiary of GTC that was sold Feb. 6, 2001 – who had not exercised their options by Feb. 7, 2001, met the criteria for certification.

Plaintiffs’ attorney Cletus Lyman of Lyman & Ash said that damages are estimated at roughly $5 million. Lyman will serve as class counsel alongside partner Michael Fettner and Philadelphia solo practitioner Jeffrey Goldman.

According to Sheppard’s opinion, filed Dec. 28, the plaintiffs have alleged counts of breach of contract, breach of covenant of good faith and fair dealing, and unjust enrichment.

“The class is defined as: ‘All employees of Primedica Corp. and its subsidiaries who, as of Feb. 7, 2001, had been awarded stock options and who had not yet exercised their options, excluding members of the Primedica management team,’” Sheppard wrote.

Lyman said that pursuant to GTC’s 1993 “Equity Incentive Plan,” class representatives George Dearlove and Annaregina Roberts had, over the course of their employments with Primedica, been given various stock options that were supposed to run for 10 years.

In a July 2003 opinion in Dearlove in which he denied a GTC motion for summary judgment, Sheppard noted that GTC’s defense relied on a termination of employment provision contained in the plan.

“GTC urges that plaintiffs’ breach of contract claim fails as a matter of law because the stock options issued by GTC to plaintiffs terminated upon GTC’s sale of Primedica . . . pursuant to the [Equity Incentive] Plan,” Sheppard wrote in July 2003.

According to Sheppard’s certification opinion, GTC canceled all stock options held by Primedica employees that were not exercised by May 2001. Dearlove and Roberts filed suit that November.

Sheppard found that the plaintiffs satisfied the first of Pennsylvania’s five requirements for class certification – numerosity, commonality, typicality, representative parties’ protection of class interests, and fair and efficient method of adjudication.

He then devoted the bulk of the opinion to analyzing whether the plaintiffs could meet the commonality requirement.

“Contrary to the defendant’s argument,” Sheppard wrote, “to decide whether the commonality prerequisite for class certification has been satisfied, the relevant issue is that the plaintiffs have alleged a single course of conduct by the defendant against the entire class which may have breached the plan documents. . . . The contracts at issue . . . were all substantially the same for each of the putative class members. The relevant language to be interpreted in these plan documents are the same for each of the putative class members.”

He further held that the commonality criteria in both Massachusetts and Pennsylvania law are relatively similar.

Sheppard later concluded that the remaining three requirements for certification had been met.

He ordered the parties to submit notification proposals within 35 days.

Lyman said that unlike other stockholder-related class actions, the contact information for the members of the Dearlove class should be fairly easy to locate. The class members are located throughout 17 different states, he said, but are thought to be concentrated in Massachusetts, Pennsylvania, Maryland and Arkansas.

Before the summary judgment motion and class certification in Dearlove could be considered, GTC filed for dismissal on improper venue grounds, and the case became wrapped up in Pennsylvania’s recent debate over the applicable extent of the forum non conveniens doctrine.

In a 2002 opinion in Dearlove, Sheppard applied an “oppressive and vexatious to the defense” test in considering GTC’s motion. By fall 2002, Pennsylvania’s appellate courts had held that a “public and private factors” test should instead be utilized in such instances.

According to Lyman, GTC filed a motion for reconsideration in fall 2002, calling attention to the changes in case precedent. Sheppard then analyzed the case according to the “public and private factors” standard, and denied GTC’s motion. The Superior Court never ruled on whether Philadelphia was a proper venue for Dearlove, Lyman said.

GTC’s local counsel in the matter is Judith Harris of Morgan Lewis & Bockius. She did not immediately respond to a call seeking comment.

(Copies of the 29-page opinion in Dearlove v. Genzyne Transgenics Corp. , PICS No. 04-1961, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)