Salhuana v. Diamond Foods, Inc. et al

Filing 22

ORDER (1) SCHEDULING HEARING ON MOTIONS TO APPOINT LEAD PLAINTIFF, (2) REQUESTING INFORMATION FROM LEAD-PLAINTIFF CANDIDATES; (3) SETTING BRIEFING SCHEDULE. Signed by Judge Alsup on January 5, 2012. (Attachments: # 1 Appendix Questionnaire to Lead-Plaintiff Candidates)(whalc2, COURT STAFF) (Filed on 1/5/2012)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 JORGE SALHUANA, individually and on behalf of all others similarly situated, No. C 11-05386 WHA 11 Plaintiff, For the Northern District of California United States District Court 10 12 COURT QUESTIONNAIRE TO LEAD-PLAINTIFF CANDIDATES v. 13 14 DIAMOND FOODS, INC, MICHAEL J. MENDES, and STEVEN M. NEIL, 15 Defendants. / 16 AND RELATED ACTIONS 17 / 18 19 TO EACH LEAD-PLAINTIFF CANDIDATE: 20 The Court appreciates your interest in serving as the lead plaintiff in this lawsuit. You 21 must personally read this statement of duties of the lead plaintiff and how class counsel will be 22 selected and approved. It is important for you to understand that the lead plaintiff will have to 23 take an active role in managing the lawsuit. You could not, if selected, simply leave the case 24 for counsel to handle. 25 In 1996, our Congress enacted a statute known as the Private Securities Litigation 26 Reform Act (PSLRA). The PSLRA seeks to place a real investor, not a lawyer, in charge of 27 any securities class action. To do this, the PSLRA created a statutory position of responsibility 28 called “the lead plaintiff.” This officer acts as a fiduciary for all members of the proposed 1 class and must manage the case to obtain the largest recovery for the proposed class consistent 2 with good faith and meritorious advocacy. 3 Over the course of the litigation, the lead plaintiff must take affirmative steps to keep 4 himself or herself reasonably informed on the progress and status of the case, including its 5 strengths and weaknesses, the prospects for settlement, and the resources invested in the suit or 6 proposed to be invested. With respect to each major litigation decision — such as important 7 motions, settlement discussions and trial preparation — the lead plaintiff shall have the 8 authority and responsibility to manage the case and to direct class counsel, after, of course, 9 receiving the advice of class counsel. The lead plaintiff shall meet in person with counsel periodically, shall attend all major hearings and mediation sessions, and shall attend trial. And, 11 For the Northern District of California United States District Court 10 of course, the lead plaintiff must give deposition and trial testimony. No settlement will be 12 approved by the Court without the lead plaintiff’s careful recommendation in favor of it. 13 Reasonable travel, telephone and business expenses incurred as a result of the lead plaintiff 14 duties may be reimbursed as expenses from any recovery or may be advanced by class counsel. 15 The first obligation of the lead plaintiff will be to select and propose class counsel for 16 court approval, an important choice that will warrant care and due diligence. No decision by 17 the lead plaintiff is more important than the selection of class counsel. Like any other 18 important decision by a fiduciary, the decision should be preceded by due diligence. The 19 extent of such due diligence will be a matter of judgment based on the facts and circumstances. 20 Significantly, even if you have already retained a lawyer for yourself in this matter, if you are 21 selected as the lead plaintiff, you would assume a higher responsibility, and would then be 22 obligated to undertake due diligence appropriate to the higher responsibility. In selecting class 23 counsel, you could not automatically keep your present lawyer. 24 In selecting class counsel, the lead plaintiff has an obligation to assess the trial and 25 securities track records of the specific lawyer candidate who would perform the actual work 26 for the class. This requires evaluation of particular, individual lawyers. In exercising due 27 diligence, it is also important to compare fees and expenses proposed by the candidates, i.e., to 28 comparison shop. In securities class actions, class counsel are usually awarded a fee (plus all 2 1 reasonable expenses) from the recovery. Only the leftover residue is distributed to the class. 2 The greater the fees and expenses, therefore, the less will be available for the investors. It is 3 not uncommon for fees and expenses, plus the costs of administration and distribution, to 4 reduce the individual plaintiffs’ recovery to a few cents per share. In the Court’s experience, 5 excellent candidates will differ substantially in their up-front fee proposals. In one large recent 6 securities case, for example, the fee proposals of excellent candidates varied from as low as 7 eight percent to over twenty-five percent of the eventual recovery. The lead plaintiff has an 8 obligation to the investor class to take such potential savings into account. 9 Depending upon the facts and circumstances, the Court may require the lead plaintiff to evaluate competitive proposals from various lawyers seeking the job of class counsel. (If so, 11 For the Northern District of California United States District Court 10 the Court would post an order soliciting proposals and arrange for the proposals to be delivered 12 to the lead plaintiff.) It is important to the Court, in evaluating the qualifications of 13 lead-plaintiff candidates, to know in advance that the lead-plaintiff candidate is fully prepared 14 to carry out his or her lead-plaintiff responsibilities, as outlined above, and to fully comply 15 with any such process and fully prepared to serve as lead plaintiff even if his or her present 16 counsel is not selected and/or approved as class counsel. 17 With the benefit of the foregoing information, please answer the following questions: 18 1. 19 ____________________________________________________________________________ 20 ____________________________________________________________________________ 21 ____________________________________________________________________________ 22 2. 23 ____________________________________________________________________________ 24 ____________________________________________________________________________ 25 ____________________________________________________________________________ 26 ____________________________________________________________________________ State your name, address, and phone number. What are your qualifications to be the lead plaintiff? 27 28 3 1 3. If you are an institutional investor or other organization, identify the individual who 2 would primarily be in charge of managing your litigation responsibilities as the lead 3 plaintiff and the individual’s experience and qualifications. State the location of the 4 individual’s workplace. 5 ____________________________________________________________________________ 6 ____________________________________________________________________________ 7 ____________________________________________________________________________ 8 ____________________________________________________________________________ 9 4. What experience have you had in managing litigation? If you are an institution or organization, do you have an in-house counsel and, if so, what would be his or her role 11 For the Northern District of California United States District Court 10 in this case if you were selected as lead plaintiff? 12 ____________________________________________________________________________ 13 ____________________________________________________________________________ 14 ____________________________________________________________________________ 15 ____________________________________________________________________________ 16 5. List each transaction you made in the securities at issue up to the present (not just 17 during the class period), including the dollar amounts, the number of shares, the price, 18 and the dates. As to each, were they open-market transactions or negotiated 19 transactions? To what extent were your transactions in the United States versus 20 abroad? 21 ____________________________________________________________________________ 22 ____________________________________________________________________________ 23 ____________________________________________________________________________ 24 ____________________________________________________________________________ 25 26 27 28 4 1 6. Are there any circumstances that might give rise to possible issues asserted against you 2 that would not generally apply against the rest of the class? Have you ever been 3 convicted of a crime? If so, state the circumstances. Have you ever been sued in a 4 fraud suit? If so, state the circumstances. 5 ____________________________________________________________________________ 6 ____________________________________________________________________________ 7 ____________________________________________________________________________ 8 ____________________________________________________________________________ 9 7. lead-plaintiff responsibilities described above? 11 For the Northern District of California United States District Court 10 Do you have the time and are you willing to travel as needed to carry out the ____________________________________________________________________________ 12 ____________________________________________________________________________ 13 ____________________________________________________________________________ 14 ____________________________________________________________________________ 15 8. 16 Is your willingness to serve as a lead plaintiff contingent on being reimbursed by counsel for your expenses in the event there is no recovery in the case? 17 ____________________________________________________________________________ 18 ____________________________________________________________________________ 19 ____________________________________________________________________________ 20 ____________________________________________________________________________ 21 9. 22 Who prepared and/or reviewed the answers given above? Did any lawyer assist in any way? If so, identify each such lawyer. 23 ____________________________________________________________________________ 24 ____________________________________________________________________________ 25 ____________________________________________________________________________ 26 ____________________________________________________________________________ 27 28 5 1 10. 2 ____________________________________________________________________________ 3 ____________________________________________________________________________ 4 ____________________________________________________________________________ 5 ____________________________________________________________________________ 6 7 Read the following and if you agree with the following, insert your name in the blank and then sign below. 8 9 List each previous case in which the lead-plaintiff candidate has been a lead plaintiff. I have read and understand the above, including the duties of lead plaintiff and the procedure for selecting and approving class counsel. I agree and promise to faithfully execute those provisions. Once class counsel are selected and approved, I will work and 11 For the Northern District of California United States District Court 10 cooperate fully with such counsel for the benefit of the investor class and will do so 12 regardless of whether the selection-and-approval process for counsel results in 13 appointment of lawyers other than my initial choice. 14 I certify under penalty of perjury that the foregoing is true and correct. 15 16 17 18 Dated: 19 Lead-Plaintiff Candidate 20 21 ________________________________________ Name of Lead-Plaintiff Candidate if Organization 22 23 24 ________________________________________ Title of Person Signing on Behalf of Organization 25 26 27 28 6

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