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