Louisiana Municipal Police Employees Retirement System et al v. Adelson et al
Filing
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ORDER that KENDALL LAW GROUP, LLP is appointed as lead counsel in the consolidated action. REISMAN SOROKAC is appointed as liaison counsel. Plaintiffs shall file a joint consolidated complaint by close of business on November 21, 2011. Signed by Judge Gloria M. Navarro on 10/20/11. (Copies have been distributed pursuant to the NEF - ECS)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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NASSER MORADI, RICHARD
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BUCKMAN, DOUGLAS
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TOMLINSON, and MATT
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ABBEDUTO, derivatively on behalf of )
LAS VEGAS SANDS CORP.,
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Plaintiffs,
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vs.
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SHELDON GARY ADELSON,
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MICHAEL A. LEVEN, CHARLES D. )
FORMAN, IRWIN A. SIEGEL, IRWIN )
CHAFETZ, GEORGE P. KOO,
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JEFFREY H. SCHWARTZ, JASON N. )
ADER,
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Defendants.
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Case No.: 11-cv-00490-GMN-RJJ Base Case
consolidated with
11-cv-00595-GMN-RJJ and
11-cv-00636-GMN-RJJ
ORDER
INTRODUCTION
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Before the Court is Plaintiffs Matt Abbeduto, Richard Buckman, Nasser Moradi,
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Douglas Tomlinson‟s (“Moradi Plaintiffs”) and Louisiana Municipal Police Employees
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Retirement System‟s (“LAMPERS”) Motions to Appoint Lead Counsel.
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The Moradi Plaintiffs filed the first shareholder derivative action on April 1, 2011, case
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number 2:11-cv-00490-GMN-RJJ. Moradi Plaintiffs filed a motion to consolidate cases and
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appoint lead counsel on May 18, 2011. LAMPERS filed a second derivative action on April
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18, 2011, case number 2:11-cv-00595-GMN-RJJ, and John Zaremba filed a third action on
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April 22, 2011, case number 2:11-cv-00636-GMN-RJJ. LAMPERS filed a motion to
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consolidate and appoint lead plaintiff and lead counsel on May 19, 2011. On July 7, 2011,
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Plaintiff Stephen Hardy was substituted as the representative plaintiff in place of John Zaremba
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in the third action. Plaintiff Hardy joins in the Moradi Plaintiffs‟ motion to consolidate and
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appoint lead counsel.
The Court granted the parties‟ motions to consolidate on August 25, 2011 and set a
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hearing for the parties‟ motions to appoint lead plaintiff and lead counsel (ECF No. 52). A
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hearing was held on October 6, 2011. For the following reasons the Court will not appoint a
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lead plaintiff and will appoint the Kendall Law Group, LLP as lead counsel and Reisman
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Sorokac as liaison counsel.
FACTS
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Plaintiffs brought the instant suit following an investigation by the Department of Justice
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into Las Vegas Sands‟ compliance with the Foreign Corrupt Practice Act (“FCPA”). Plaintiffs
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allege that the Sands Board of Directors and certain of its officers breached their fiduciary
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duties in connection with violations of the FCPA. Apparently that investigation was brought
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following a breach of contract lawsuit brought by former Sands‟ employee, Steven C. Jacobs
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against Sands on October 20, 2010. Jacobs alleges that he was tortuously discharged after he
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was told to conduct illegal actions in gaining leverage in the Macau market, where Sands has a
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large resort. Plaintiffs filed the instant derivative shareholder suits alleging (1) breach of
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fiduciary duty, (2) abuse of control, (3) waste of corporate assets, and (4) conspiracy.
DISCUSSION
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A.
Appoint Lead Plaintiff
LAMPERS asks the Court to appoint it as lead plaintiff in the consolidated actions. The
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Moradi Plaintiffs argue that there is no need to appoint a lead plaintiff as supported by In re
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Arena Pharm., Inc. S’holder Derivative Litig., Case No. 10-cv-2079 BTM (BLM), 2011 WL
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830109, at *1-*3 (S.D. Cal. Mar. 3, 2011). The court in In re Arena Pharm. recognized that
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while there is a statute to appoint a lead plaintiff in a securities fraud action, i.e. the Private
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Securities Litigation Reform Act of 1995 (“PSLRA”), Pub. L. No. 104–67, 109 Stat. 737
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(1995), there is no such statue addressing the appointment of a lead plaintiff in derivative
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actions. Id. at *1. “Rather, derivative actions must comply with Rule 23.1 of the Federal Rules
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of Civil Procedure, which requires only that a plaintiff in a derivative action „fairly and
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adequately represent the interests of the shareholders or members similarly situated in
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enforcing the right of the corporation or association.‟ Fed.R.Civ.P. 23.1.” In re Comverse
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Tech., Inc. Derivative Litig., No. 06-CV-1849 (NGG)(RER), 2006 WL 3761986, at *1
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(E.D.N.Y. Sept.22, 2006). “As explained in In re Comverse, because a plaintiff in a derivative
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action is bringing claims on behalf of a company, it is unclear what benefits there are to
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appointing a lead plaintiff, especially when lead counsel is appointed.” In re Arena Pharm.,
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2011 WL 830109 at *2.
The parties have failed to cite to any Ninth Circuit authority indicating that a lead
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plaintiff should be appointed, and as such, the Court declines to appoint a lead plaintiff.
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B.
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Appoint Lead Counsel
Courts have considered a variety of factors when appointing a lead counsel in
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consolidated derivate actions. Some of these factors include: (l) the quality of the pleadings;
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(2) the vigorousness of the prosecution of the lawsuits; and (3) the capabilities of counsel. In re
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Bank of America Corp. Sec. Derivative and ERISA Lit., 258 F.R.D. 260, 272 (S.D.N. Y. 2009).
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Some courts have also considered the criteria for appointing interim class counsel set forth in
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Fed. R. Civ. P. 23(g)(l): (l) the work counsel has done in identifying or investigating potential
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claims in the action; (2) counsel‟s experience in handling class actions, other complex
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litigation, and the types of claims asserted in the action; (3) counsel‟s knowledge of the
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applicable law; and (4) the resources that counsel will commit to representing the class. Id.; In
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re Comverse, 2006 WL 3761986 at * 2-3.
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The Moradi Plaintiffs‟ ask the Court to appoint the Kendall Law Group, LLP as lead
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counsel with Reisman Sorokac as liaison counsel. Plaintiff Hardy joins in the request to have
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Kendall Law Group and Riesman Sorokac as lead and liaison counsel. LAMPERS requests the
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appointment of Kessler Topaz Meltzer & Check, LLP as lead counsel and the Law Office of
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Curtis Coulter as liaison counsel.
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Both the Moradi Plaintiffs and LAMPERS submitted detailed and professional
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complaints. While LAMPERS‟ complaint exceeds the Moradi Plaintiffs‟ complaint by 15
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pages and contains more factual detail that does not amount to the Moradi Plaintiffs‟ complaint
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being inferior. Both parties adequately plead allegations that should survive a motion to
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dismiss and gave detailed reasons why a demand on the Sands Board would be futile.
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The court also has no doubt that both law firms would vigorously pursue this case.
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However, the Court does note that LAMPERS has missed one deadline already in these early
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stages of filing motions. (See ECF No. 38.) Both law firms represent plaintiffs who are
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committed to vigorously pursue this action as well.
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The Court finds most persuasive the Moradi Plaintiffs‟ arguments that it is best capable
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of pursuing this litigation. Kendall Law Group has served as lead or liaison counsel in
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numerous merger & acquisition, derivative, and securities class action matters. Kendall Law
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Group and Reisman Sorokac have directly participated in the recovery of substantial
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settlements on behalf of defrauded shareholders injured by illegal corporate activities, or
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shareholders denied the appropriate valuation for their equity ownership in the wake of
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successful and/or attempted corporate buy-outs, takeovers and other transactions involving
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corporate restructurings, asset sales and/or mergers and acquisitions. Moreover, the firms‟
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efforts have assisted in restoring many millions of dollars to corporate treasuries depleted by
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the illegal practices and/or breaches of fiduciary duties by their corporate officers and directors.
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The firms have also represented both individual and corporate defendants in numerous
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securities class actions, investor claim-related litigation, shareholder derivative litigation,
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and/or other complex commercial litigations. The Kendall Law Group is currently involved in
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three derivative suits involving the FCPA: Ferguson v. Raspino, et al., Cause No. 2010-23805
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(281st Judicial District Court, Harris County, Texas); In re Parker Drilling Company
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Derivative Litigation, Cause No. 2010-34655 (61st Judicial District, Harris County, Texas); and
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Neff v. Brady, et al., ex rel. Weatherford International, Ltd., Cause No. 2010-40764 (270th
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Judicial District, Harris County, Texas). (McKey June 6 Decl., ¶6, ECF No. 29–2.)
Kessler Topaz has recovered billions of dollars on behalf of investor classes and
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corporations in derivative actions. Kessler Topaz has more than 90 attorneys specializing in
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complex shareholder litigation. Kessler Topaz strives not only to recoup corporations‟
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financial losses for the benefit of all shareholders, but also to achieve corporate governance
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changes that will hopefully prevent similar misconduct from recurring, strengthen the company
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and make the board of directors a more effective and responsive representative of shareholders‟
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interest. While Kessler Topaz has initiated an extensive campaign (over 100 shareholder
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derivative actions) against options backdating, LAMPERS‟ arguments do not reveal any
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experience regarding actions related to FCPA violations.
Clearly both law firms are more than qualified to handle this action. It also appears that
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both firms have adequate resources to pursue the litigation. The Court finds that Kendall Law
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Group is better suited however, because of its specific experience in suits involving allegations
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of FCPA violations. Moreover, as the Moradi Plaintiffs were the first to file suit it would be
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appropriate to assign Kendall Law Group as lead counsel. See, e.g., Biondi v. Scrushy, 820
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A.2d 1148, 1159 (Del. Ch. 2003) (noting that courts will consider which action was filed first
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for lead counsel purpose where “there is a need for an objective tie-breaker”).
It is for these reasons, and the reasons expressed at the October 6, 2011 hearing, that the
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Court finds that the Kendall Law Group, LLP is best suited to be lead counsel for this
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consolidated action.1
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CONCLUSION
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IT IS HEREBY ORDERED that KENDALL LAW GROUP, LLP is appointed as lead
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counsel in the consolidated action.
IT IS FURTHER ORDERED that REISMAN SOROKAC is appointed as liaison
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counsel.
IT IS FURTHER ORDERED that Plaintiffs shall file a joint consolidated complaint by
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close of business on November 21, 2011.
DATED this 20th day of October, 2011.
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Gloria M. Navarro
United States District Judge
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The Court rejects LAMPERS‟ arguments that the Court should consider the financial interest of the plaintiffs when
appointing lead counsel. While such a factor may be appropriate in PSLRA actions, there is no such factor in shareholder
derivative cases. See In re Comverse, 2006 WL 3761986 at *3 n.6.
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