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