Hazan v. BofI Holding, Inc. et al

Filing 13

ORDER Granting 11 Joint Motion to Consolidate Cases. Cases Consolidated, the lead case is 15-CV-2324-GPC-KSC. All future docketing will be done in the lead case. Signed by Judge Gonzalo P. Curiel on 1/29/2016. (srm)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 STEVEN GOLDEN, Individually and ) on Behalf of Themselves and All Others ) 10 Similarly Situated, ) ) 11 Plaintiff, ) ) 12 vs. ) ) 13 BofI HOLDING, INC., GREGORY ) GARRABRANTS, and ANDREW J. ) 14 MICHELETTI, ) ) 15 Defendants. No. 3:15-cv-02324-GPC-KSC ORDER GRANTING JOINT MOTIONS TO CONSOLIDATE CASES, APPOINT LEAD PLAINTIFF, AND APPROVE SELECTION OF LEAD COUNSEL [ECF Nos. 9, 12, 17] 16 17 RALPH HAZAN, Individually and on Behalf of All Others Similarly Situated, 18 Plaintiff, 19 vs. 20 BofI HOLDING, INC., GREGORY 21 GARRABRANTS, and ANDREW J. MICHELETTI, 22 Defendants. 23 ) ) ) ) ) ) ) ) ) ) ) ) No. 3:15-cv-02486-GPC-KSC ORDER GRANTING JOINT MOTION TO CONSOLIDATE CASES [ECF No. 11] 24 25 Before the Court are parties’ joint motions to consolidate the two cases above, 26 as well as parties’ joint motions for appointment of lead plaintiff and approval of 27 selection of lead counsel. Golden v. BofI Holding, Inc., No. 3:15-cv-02324-GPC28 -1- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 KSC, ECF Nos. 9, 12, 17; Hazan v. BofI Holding, Inc., No. 15-cv-02486-GPC-KSC, 2 ECF No. 11. 3 I. Consolidation 4 Fed. R. Civ. P. Rule 42(a) states that “[i]f actions before the court involve a 5 common question of law or fact, the court may: (1) join for hearing or trial any or 6 all matters at issue in the actions; (2) consolidate the actions; or (3) issue any other 7 orders to avoid unnecessary cost or delay. “To determine whether to consolidate, a 8 court weighs the interest of judicial convenience against the potential for delay, 9 confusion and prejudice caused by consolidation.” In re Oreck Corp. Halo Vacuum 10 & Air Purifiers Mktg. & Sales Practices Litig., 282 F.R.D. 486, 490 (C.D. Cal. 2012) 11 (citing Southwest Marine, Inc. v. Triple A Mach. Shop, Inc., 720 F. Supp. 805, 807 12 (N.D. Cal. 1989); Huene v. United States, 743 F.2d 703, 704, on reh’g, 753 F.2d 13 1081 (9th Cir. 1984)). A district court has “broad discretion” in determining whether 14 or not to consolidate actions. See id.; see also Zhu v. UCBH Holdings, Inc., 682 F. 15 Supp. 2d 1049, 1052 (N.D. Cal. 2010) (citing Southwest Marine, 720 F. Supp. at 16 806–807). 17 Upon review of the moving papers, the record, and the applicable law, the 18 Court GRANTS parties’ joint motions to consolidate. Review of the two operative 19 complaints show that both cases are class actions brought by respective Plaintiffs 20 against the same Defendants, concerning the same alleged securities laws violations 21 committed by Defendants in relation to BofI Federal Bank’s banking activities 22 across the same time period, with largely similar factual allegations, the same causes 23 of action, and the same requested relief. Compare Golden Compl., No. 3:15-cv24 02324-GPC-KSC, ECF No. 1, with Hazan Compl., No. 15-cv-02486-GPC-KSC, 25 ECF No. 1. 26 // 27 // 28 -2- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 II. Appointment of Lead Plaintiff 2 Under the Private Securities Litigation Reform Act (“PSLRA”), no later than 3 20 days after filing a class action securities complaint, a private plaintiff or plaintiffs 4 must publish a notice advising members of the purported plaintiff class of the 5 pendency of the action, the claims asserted, and that any member of the purported 6 class may move the court to serve as lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A)(i). 7 Not later than 60 days after the date on which the notice is published, any member 8 of the purported class may move the court to serve as lead plaintiff of the purported 9 class. Id. 10 Within 90 days after publication of the notice, the Court shall consider any 11 motion made by a class member to serve as lead plaintiff. 15 U.S.C. § 78u12 4(a)(3)(B)(i). If more than one action on behalf of a class asserting substantially the 13 same claims has been filed and any party has sought to consolidate those actions, the 14 court shall not make the lead plaintiff determination until after the decision on the 15 motion to consolidate has been rendered. 15 U.S.C. § 78u- 4(a)(3)(B)(ii). The Court 16 shall appoint as lead plaintiff “the member or members of the purported plaintiff 17 class that the court determines to be most capable of adequately representing the 18 interests of class members.” 15 U.S.C. § 78u-4(a)(3)(B)(i). The presumptively most 19 adequate plaintiff is the one who “has the largest financial interest in the relief sought 20 by the class” and “otherwise satisfies the requirements of Rule 23 of the Federal 21 Rules of Civil Procedure.” 15 U.S.C. § 78u- 4(a)(3)(B)(iii)(I). “In other words, the 22 district court must compare the financial stakes of the various plaintiffs and 23 determine which one has the most to gain from the lawsuit. It must then focus its 24 attention on that plaintiff and determine, based on the information he has provided 25 in his pleadings and declarations, whether he satisfies the requirements of Rule 26 23(a), in particular those of ‘typicality’ and ‘adequacy.’” In re Cavanaugh, 306 F.3d 27 726, 730 (9th Cir. 2002). 28 -3- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 Class members and movants Houston Municipal Employees Pension System 2 (“HMEPS”), John Marco, and Steven Golden, assert that HMEPS has the largest 3 financial interest in the relief sought by the class: HMEPS claims losses of 4 approximately $215,340.52, Marco claims losses of approximately $105,381.51, 5 Golden claims losses of approximately $6,529.00, and non-moving class member 6 Multicultural Business Solutions Inc. claims losses of approximately $46,148.60. 7 Golden v. BofI Holding, Inc., No. 3:15-cv-02324-GPC-KSC, ECF No. 17 at 2. This 8 claim being undisputed, the Court finds that HMEPS is the class member with the 9 largest financial interest in the relief sought by the class. 10 The Court also finds that the typicality and adequacy requirements are met. 11 First, the typicality requirement is satisfied when “the presumptive lead plaintiff’s 12 claim arise[s] from the same event or course of conduct giving rise to the claims of 13 other class members and [are] based on the same legal theory.” Foster v. Maxwell 14 Techs., Inc., No. 13-CV-00580-BEN-RBB, 2013 WL 5780424, at *5 (S.D. Cal. Oct. 15 24, 2013) (citation omitted) (internal quotation marks omitted). The claims must be 16 “reasonably co-extensive with those of absent class members; they need not be 17 substantially identical.” Hanlon v. v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 18 1998). Like all other class members, HMEPS alleges that it purchased BofI securities 19 during the Class Period at prices that were artificially inflated by Defendants’ 20 wrongful conduct and suffered damages thereby. ECF No. 12-2 at 6. HMEPS’ 21 claims thus arise from the same events and are based on the same legal theory as the 22 claims of the other class members. 23 Second, representation is “adequate” when the interests of the plaintiffs and 24 their counsel do not conflict with the interests of other class members, and the 25 plaintiffs and their counsel will prosecute the action vigorously on behalf of the 26 class. Hanlon, 150 F.3d at 1020. It appears that HMEPS’ interests are aligned with 27 those of the other class members, and that HMEPS is willing and able to serve as 28 -4- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 Lead Plaintiff. As discussed in greater detail below, HMEPS’ retained counsel, the 2 Lieff Cabraser law firm, is experienced in the area of complex securities class 3 litigation and is clearly capable of representing the interests of the Class. Therefore, 4 Court finds that HMEPS is the presumptive Lead Plaintiff under PSLRA. 5 The presumption that HMEPS is the most adequate Lead Plaintiff may be 6 rebutted only upon proof by a member of the purported plaintiff class that HMEPS 7 will not fairly and adequately protect the interests of the class or is subject to unique 8 defenses that render them incapable of adequately representing the class. 15 U.S.C. 9 § 78u-4(a)(3)(B)(iii)(II). No movant has come forward with such proof. 10 Accordingly, the Court hereby APPOINTS Houston Municipal Employees Pension 11 System as Lead Plaintiff. 12 III. Approval of Selection of Lead Counsel 13 Under the PSLRA, once the court has designated a lead plaintiff, that plaintiff 14 “shall subject to the approval of the court, select and retain counsel to represent the 15 class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). If the lead plaintiff has made a reasonable 16 choice of counsel, the district court should generally defer to that choice. Cohen v. 17 U.S. Dist. Court, 586 F.3d 703, 712 (9th Cir. 2009). HMEPS asks the Court to 18 approve their selection of Lieff, Cabraser, Heimann & Bernstein, LLP as lead 19 counsel. It appears that Lieff Cabraser has devoted a substantial portion of its 20 practice to class action securities fraud litigation and has obtained significant 21 recoveries for injured investors in many cases. See Kruse Decl., Ex. D, ECF No. 1222 3. In light of the firm’s substantial experience in securities class action litigation, the 23 Court APPROVES Houston Municipal Employees Pension System’s choice of 24 counsel and APPOINTS Lieff, Cabraser, Heimann & Bernstein, LLP as Lead 25 Counsel. 26 27 28 CONCLUSION Accordingly, IT IS HEREBY ORDERED that: -5- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 1. Pursuant to Federal Rule of Civil Procedure 42(a)(2), the Court hereby 2 consolidates the above-captioned actions for all purposes under the “low numbered 3 case,” Case No. 3:15-CV-02324-GPC-KSC, and orders that the caption of the action 4 be amended as follows: 5 6 IN RE: Case No. 3:15-CV-02324-GPC-KSC BofI HOLDING, INC. SECURITIES 7 LITIGATION, 8 Hon. Gonzalo P. Curiel [Complaint Filed: October 15, 2015] 9 10 2. The Court GRANTS Houston Municipal Employees Pension System’s 11 motion to be appointed lead plaintiff. The Court APPOINTS Houston Municipal 12 Employees Pension System as Lead Plaintiff in the consolidated class actions. 13 3. The Court GRANTS Houston Municipal Employees Pension System’s 14 motion for approval of selection of lead counsel. The Court APPOINTS Lieff, 15 Cabraser, Heimann & Bernstein, LLP as Lead Counsel in the consolidated class 16 actions. 17 4. No defendant shall be required to answer, move against or otherwise 18 respond to the original Complaint filed either of the above-captioned actions, except 19 as set forth below. 20 5. Within fourteen (14) days after the entry of this Order, counsel for the 21 lead plaintiff and counsel for the defendants shall meet and confer regarding 22 proposals for (a) the time for lead plaintiff to file a consolidated amended complaint 23 or provide notice of lead plaintiff’s intent to rely upon the original Complaint in Case 24 No. 3:15-CV-02324-GPC-KSC [Document No. 1] (the “operative complaint”); (b) 25 the time for defendants to respond to the operative complaint; and (c) a schedule for 26 briefing any motion to dismiss that may be filed by a defendant. 27 28 IT IS SO ORDERED. -6- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC 1 Dated: January 29, 2016 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- 3:15-cv-02324-GPC-KSC 3:15-cv-02486-GPC-KSC

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