Fleming v. Impax Laboratories Inc. et al

Filing 29


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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GREG FLEMING, Case No. 16-cv-06557-HSG Plaintiff, 8 v. 9 10 IMPAX LABORATORIES INC., et al., Defendants. Re: Dkt. No. 13 11 United States District Court Northern District of California ORDER GRANTING MOTION TO APPOINT LEAD PLAINTIFF AND LEAD COUNSEL, AND SETTING DEADLINES FOR FILING AND SERVICE OF AMENDED COMPLAINT 12 This is a securities fraud class lawsuit on behalf of a putative class of persons who 13 purchased the publicly-traded securities of Impax Laboratories Inc. (“Impax”) between February 14 20, 2014 and November 2, 2016. Dkt. No. 1 (“Compl.”) ¶ 1. The case was filed on November 11, 15 2016, by Plaintiff Greg Fleming, who is represented by the law firm Pomerantz LLP. Id. at 1. On 16 January 9, 2017, putative class member New York Hotel Trades Council & Hotel Association of 17 New York City, Inc. Pension Fund (“Fund”), represented by the law firm Robbins Geller Rudman 18 & Dowd LLP (“Robbins Geller”), filed a motion to appoint the Fund as lead plaintiff and to 19 approve the Fund’s selection of Robbins Geller as lead counsel, Dkt. No. 13 (“Mot.”) at 1-2, as 20 well as a supporting declaration, Dkt. No. 14 (“McCormick Decl.”). On January 30, 2017, the 21 Fund filed a notice of unopposed motion, requesting that the motion be granted and that the 22 motion hearing be taken off calendar. Dkt. No. 18. At the February 14, 2017 case management 23 conference, the Court granted the motion from the bench, set a deadline for the filing of an 24 amended complaint, and stated that a written order would follow. Dkt. No. 27. 25 I. APPOINTMENT OF LEAD PLAINTIFF 26 The Private Securities Litigation Reform Act (“PSLRA”) “instructs district courts to select 27 as lead plaintiff the one ‘most capable of adequately representing the interests of class members.’” 28 In re Cavanaugh, 306 F.3d 726, 729 (9th Cir. 2002) (quoting 15 U.S.C. § 78u-4(a)(3)(B)(i)). 1 “The ‘most capable’ plaintiff—and hence the lead plaintiff—is the one who has the greatest 2 financial stake in the outcome of the case, so long as he meets the requirements of Rule 23.” See 3 id. at 729. The Ninth Circuit has interpreted the PSLRA as establishing “a simple three-step 4 process for identifying the lead plaintiff pursuant to these criteria.” Id. at 729. 5 A. 6 Step One consists of meeting the PSLRA’s notice requirement. See id. at 729. “The first Step One 7 plaintiff to file an action covered by the [PSLRA] must post this notice ‘in a widely circulated 8 national business-oriented publication or wire service.’” Id. at 729 (quoting 15 U.S.C. § 78u- 9 4(a)(3)(A)(i)). The notice must be published within 20 days of the filing of the complaint. See 15 U.S.C. § 78u-4(a)(3)(A)(i). The notice must also alert putative class members “(I) of the 11 United States District Court Northern District of California 10 pendency of the action, the claims asserted therein, and the purported class period; and(II) that, not 12 later than 60 days after the date on which the notice is published, any member of the purported 13 class may move the court to serve as lead plaintiff of the purported class.” Id. § 78u-4(a)(3)(A)(i). 14 Here, notice was published in Business Wire less than 20 days after the filing of the 15 complaint. Compare McCormick Decl., Ex. A with Compl. BusinessWire is a “global leader in 16 press release distribution and regulatory disclosure.” BusinessWire, About Us, 17 http://www.businesswire.com/portal/site/home/about (last visited February 14, 2017). The notice 18 announced the filing of the class action, described the suit’s allegations, specified the putative 19 class period, and explained that any motion to be appointed as lead plaintiff had to be filed by 20 January 9, 2017. See McCormick Decl., Ex. A. Accordingly, the Court finds that Step One’s 21 requirements are met. 22 B. 23 Step Two consists of identifying the presumptive lead plaintiff. See Cavanaugh, 306 F.3d Step Two 24 at 729-30. The statute states that there is a rebuttable presumption that the “most adequate 25 plaintiff” is the one who “(aa) has either filed the complaint or made a motion in response to a 26 notice under subparagraph (A)(i); (bb) in the determination of the court, has the largest financial 27 interest in the relief sought by the class; and (cc) otherwise satisfies the requirements of Rule 23 of 28 the Federal Rules of Civil Procedure.” See 15 U.S.C. § 78u-4(a)(3)(A)(i). Thus, once the filing 2 1 requirement of subsection (a)(3)(A)(i)(aa) is met, the district court must “compare the financial 2 stakes of the various plaintiffs and determine which one has the most to gain from the lawsuit.” 3 See Cavanaugh, 306 F.3d at 730. Next, the district court is required to “focus its attention on that 4 plaintiff and determine, based on the information he has provided in his pleadings and 5 declarations, whether he satisfies the requirements of Rule 23(a), in particular those of ‘typicality’ 6 and ‘adequacy.’” Id. at 730 (emphasis in original). If so, he is the presumptive lead plaintiff. Id. 7 at 730. 8 Here, the Fund filed its motion to be appointed lead plaintiff by the January 9, 2017 9 deadline, see Mot., satisfying the requirement of subsection (a)(3)(A)(i)(aa). Moreover, the Fund spent $508,218 purchasing 21,189 shares of Impax stock, and suffered alleged losses totaling 11 United States District Court Northern District of California 10 $162,625 as result of Impax’s alleged misconduct. See McCormick Decl., Exs. B-C. Since the 12 Fund’s motion is unopposed and no other putative class member filed a motion, see Dkt. No. 18, 13 no one is claiming to have suffered greater losses than the Fund. Therefore, the Fund has the 14 “most to gain from the lawsuit.” See Cavanaugh, 306 F.3d at 730. 15 Next, the Court turns to the “typicality” and “adequacy” requirements of Rule 23(a). The 16 Court finds that “typicality” is satisfied because the claims and defenses of the Fund “are typical 17 of the claims and defenses of the class.” See Fed. R. Civ. Pro. 23(a)(3). Specifically, the Fund 18 purchased Impax stock and allegedly suffered damages when Impax’s alleged misconduct was 19 revealed. See McCormick Decl. Exs. B-C; see Bodri v. GoPro, Inc., 2016 U.S. Dist. LEXIS 20 57559, at *16 (N.D. Cal. Apr. 28, 2016). In addition, the Fund represents that it is unaware of any 21 conflicts between its claims and those asserted on behalf of the putative class, Mot. at 4, and given 22 that the motion is unopposed, Dkt. No. 18, the Court has no reason to doubt the Fund’s 23 representation, cf. Bodri, 2016 U.S. Dist. LEXIS 57559, at *16-17 (finding that the typicality 24 requirement was satisfied where movant represented that it was “not aware of any conflicts 25 between its claims and those asserted by the class” and “no other movant ha[d] presented the 26 Court with any reason to doubt these assertions”). The Court also finds that the “adequacy” 27 requirement is satisfied because the Fund “will fairly and adequately protect the interests of the 28 class.” See Fed R. Civ. Pro. 23(a)(4). Specifically, the Fund’s “substantial financial stake in the 3 1 outcome of this litigation, its timely filing of its motion, and the quality of its briefing all 2 demonstrate that it is both motivated to, and capable of, vigorously pursuing this litigation.” See 3 Bodri, 2016 U.S. Dist. LEXIS 57559, at *17. 4 Therefore, the Court finds that Step Two’s requirements are met. 5 C. 6 Step Three consists of “giv[ing] other plaintiffs an opportunity to rebut the presumptive Step Three 7 lead plaintiff’s showing that it satisfies Rule 23’s typicality and adequacy requirements.” 8 Cavanaugh, 306 F.3d at 730. The Fund’s motion is unopposed. Dkt. No. 18. Therefore, this 9 presumption has not been rebutted. Step Three’s requirements are also met. Based on the foregoing, the Fund’s appointment as lead plaintiff is appropriate. 10 United States District Court Northern District of California 11 II. APPOINTMENT OF LEAD COUNSEL The Fund has also moved for approval of its selection of Robbins Geller as class counsel. 12 13 Mot. at 5; see also 15 U.S.C. § 78u-4(a)(3)(B)(v) (“The most adequate plaintiff shall, subject to 14 the approval of the court, select and retain counsel to represent the class.”) The Court defers to the 15 Fund’s choice of lead counsel because the choice is not “so irrational, or so tainted by self-dealing 16 or conflict of interest, as to cast genuine and serious doubt on that plaintiff’s willingness or ability 17 to perform the functions of lead plaintiff.” See Cavanaugh, 306 F.3d at 733; see also id. at 739 18 n.11 (“Congress gave the lead plaintiff, and not the court, the power to select a lawyer for the 19 class.”) Robbins Geller has extensive experience with complex securities litigation, and has been 20 praised by numerous judges for the quality of the firm’s representation in class action litigation. 21 See McCormick Decl. Ex. D (firm’s resume). Based on this experience, the firm has been 22 approved as lead counsel in PSLRA cases litigated in this District. See Bodri, 2016 U.S. Dist. 23 LEXIS 57559, at *19 (Tigar, J.). Therefore, approving the Fund’s selection of Robbins Geller as 24 lead counsel is merited. 25 III. CONCLUSION 26 For the foregoing reasons, the Court GRANTS the Fund’s motion for appointment of the 27 Fund as lead plaintiff and for approval of Robins Geller as lead counsel. The Court SETS April 28 17, 2017 as the deadline to file an amended complaint and May 7, 2017 as the deadline for service 4 1 2 3 4 5 of the amended complaint. IT IS SO ORDERED. Dated: 2/15/2017 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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