Wallace v. Intralinks Holdings, Inc. et al

Filing 35

OPINION: The motions to consolidate are granted. Plumbers & Pipefitters is appointed Lead Plaintiff, and the court approves its selection of counsel. (Signed by Judge Thomas P. Griesa on 4/3/2012) (ft)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
WILLIAM D. WALLACE, Individually and
:
on Behalf of All Others Similarly
:
Situated,
:
:
Plaintiff,
:
:
– against –
:
:
INTRALINKS HOLDINGS, INC., et al.,
:
:
Defendants.
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:
MICHAEL THALER, Individually and On
:
Behalf of All Others Similarly Situated,
:
:
Plaintiff,
:
:
– against –
:
:
INTRALINKS HOLDINGS, INC., et al.,
:
:
Defendants.
:
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11 Civ. 8861 (TPG)
OPINION

11 Civ. 9528 (TPG)

These actions have been filed by investors in IntraLinks Holdings,
Inc., alleging misrepresentations by IntraLinks and two of its officers
regarding IntraLinks, its business operations, and its financial condition,
in violation of the federal securities laws. Before the court is an
unopposed motion to consolidate these actions and motions by four
investors, each seeking appointment as Lead Plaintiff.

The court grants the motion to consolidate the two actions. The
court appoints Plumbers and Pipefitters National Pension Fund as the
Lead Plaintiff and approves its selection of Cohen Milstein as counsel.
BACKGROUND
The complaints in these two related actions allege a number of
false or misleading statements that induced investors to invest in
IntraLinks during the early months of 2011. In short, the complaints
allege that in February and March 2011, IntraLinks made a number of
positive statements about its past earnings and future earnings
potential. In April 2011, IntraLinks offered investors a “Secondary
Offering” of stock, pursuant to a publicly filed prospectus, which raised
more than $191 million. However, the company’s stock dropped by 45%
in August 2011, when IntraLinks reduced its outlook for the third
quarter of 2011 and disclosed that it had been the subject of a subpoena
from the SEC. On November 8, 2011, when IntraLinks disclosed its
financial results for the third quarter of 2011, its stock dropped by
another 45%.
These two putative securities class actions are currently pending
before this court, along with a related derivative suit. See In re Intralinks
Holdings, Inc. Derivative Litig., No. 11 Civ. 9636 (TPG) (S.D.N.Y.). The
parties have moved to consolidate these two securities class actions.
There has been no application to consolidate the derivative suit with
these securities actions.

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Four different investors have filed competing motions to be
appointed Lead Plaintiff. These investors are Aabed Abdullah Alsaadoun,
Michael Thaler, Oklahoma Firefighters Pension and Retirement System,
and Plumbers and Pipefitters National Pension Fund (“Plumbers &
Pipefitters”). Each plaintiff has filed a certification in support of their
motion to be appointed lead plaintiff. These establish that Plumbers &
Pipefitters has lost a total of $4,250,862.00 from its investment in
IntraLinks. Oklahoma Firefighters has lost a total of $159,044.80.
Alsaadoun has lost a total of $148,356.81. Thaler has lost a total of
$42,176.71.
DISCUSSION
Consolidation
The Court has broad discretion to consolidate cases, Johnson v.
Celotex Corp., 899 F.2d 1281, 1284-85 (2d Cir. 1990), and such
consolidation is particularly appropriate in securities class actions. See
Mitchell v. Complete Mgmt., Inc. Sec. Litig., No. 99 Civ. 1454 (DAB),
1999 U.S. Dist. LEXIS 14460, at *4 (S.D.N.Y. Sept. 17, 1999). “In the
exercise of discretion, courts have taken the view that considerations of
judicial economy favor consolidation.” Johnson, 899 F.2d at 1285.
Here, consolidation is appropriate. Both complaints in this action
allege substantially the same false or misleading statements, and the two
cases present common questions of law and fact. No party opposes
consolidation.

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Therefore the court grants the motion to consolidate the two cases.
The Thaler case is consolidated into the lower-numbered Wallace case.
All future filings in these cases are to be filed in the docket for case
number 11 Civ. 8861. The Thaler case should be closed.
Lead Counsel
The Private Securities Litigation Reform Act (“PSLRA”) establishes
the procedure for appointment of the lead plaintiff in “each private action
arising under [the Exchange Act] that is brought as a plaintiff class
action pursuant to the Federal Rules of Civil Procedure.” 15 U.S.C. §
78u-4(a) and (a)(3)(B). Under the PSLRA, there is a presumption that the
“most adequate plaintiff” is the one who “(aa) has either filed the
complaint or made a motion in response to a notice; (bb) in the
determination of the court, has the largest financial interest in the relief
sought by the class; and (cc) otherwise satisfies the requirements of Rule
23 of the Federal Rules of Civil Procedure.” 15 U.S.C. §
78u-4(a)(3)(B)(iii)(I).
Here, Plumbers & Pipefitters has requested that it be appointed
lead plaintiff, and it meets the requirements to invoke the presumption
that it is the most adequate plaintiff under the PSLRA. It has an interest
in this matter that is exponentially larger than any other plaintiff who
has come forward and requested to be appointed lead plaintiff. Indeed,
its losses exceed the combined losses of the other plaintiffs. There is no
indication that Plumbers & Pipefitters does not satisfy the requirements

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of Rule 23. At this stage of the litigation, it appears that Plumbers &
Pipefitters is attempting to prosecute claims that are typical of the class
and, with its high financial interest and experienced class counsel (which
will be discussed further below), Plumbers & Pipefitters has made a
sufficient showing of adequacy under Rule 23. No party has set forth
any evidence or arguments that would justify rebutting the presumption
that Plumbers & Pipefitters is the most appropriate lead plaintiff.
Plumbers & Pipefitters has selected Cohen Milstein as its counsel.
Cohen Milstein is highly experienced in complex securities class actions
such as this one, and as such it is an appropriate law firm to prosecute
this class action. See, e.g., N.J. Carpenters Health Fund v. DLJ Mortg.
Capital, Inc., No. 08 Civ. 5653, 2011 U.S. Dist. LEXIS 92597, at *15
(S.D.N.Y. Aug. 16, 2011).
Any consolidated amended class action complaint must be filed
within 30 days of this opinion.
CONCLUSION
For the foregoing reasons, the motions to consolidate are granted.
Plumbers & Pipefitters is appointed Lead Plaintiff, and the court
approves its selection of counsel.
SO ORDERED.

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Dated: New York, New York
April 3,2012

·ILP.~

Thomas P. Griesa
U.S. District Judge

USDCSDNY
OOCUMENT
ELECIRONICALLY FILED
DOC#: __--~~----

DATE FILED:

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