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December 31, 2003.


The opinion of the court was delivered by: JEFFREY MILLER, District Judge

This is a motion to appoint lead plaintiff and approve lead counsel in a securities class action. Six individuals or groups are moving for appointment as lead plaintiff: (1) FMC Ltd. Pension Plan &Trust, Jamerica Financial Inc., Joseph Brogan, and Spear Capital Management Inc. ("FMC Pension Group"), (2) Glen Leason, Mary Ann Richason, Paul Berger, Gregory Lavdanski, and Olive Branch-Leason ("Leason Group"), (3) Jonathan David Dobis, (4) Eva Searcy, Manuel Wilkey, Paul and Amelia Strick, and Richard Shay ("Searcy Group"), (5) Albert Bemi, and (6) Bernhard Bildstein.

I. Background

  Surebeam Corporation ("Surebeam") provides electronic food irradiation systems and services for the food industry. Allegedly, Surebeam developed trouble acquiring customers and began to misstate the company's financial status. Surebeam entered into a joint venture with a Brazilain corporation Tech Ion Industrial Brazil S.A. ("Tech Ion"). Surebeam allegedly failed to disclose problems that arose with the Tech Ion project, forgave much of Tech Ion's debt, and recognized revenue from the Tech Ion deal despite the fact that the company could not repay the debt. Surebeam allegedly made false and misleading statements both in its Prospectus for the company's initial public offering ("IPO") as well as in several subsequent financial statements. These misrepresentations allegedly caused Surebeam's stock to trade at inflated levels.

  Approximately eighteen complaints have been filed in this district against Surebeam, its officers and directors, its parent company Titan Corporation, and the underwriters on the IPO. While each complaint alleges its own specific time period, the class period is generally from March of 2001 to August of 2003. On October 6, 2003, this court entered an order consolidating the actions then pending as well as any subsequently filed related actions.

 II. Discussion

  The Private Securities Litigation Reform Act of 1995 ("PSLRA") dictates the process for determining lead plaintiff in a securities class action brought under the Securities and Exchange Act of 1935 ("Exchange Act") as well as the Securities Act of 1933 ("Securities Act"). 15 U.S.C. § 78u-4(a)(3)(B); 15 U.S.C. § 77z-1(a)(3)(B); In re Cavanaugh. 306 F.3d 726, 729 (9th Cir. 2002).*fn1 The PSLRA requires prompt publication of notice advising class members of the existence of the class action and of their right to move within 60 days of the publication to be appointed lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A). In this case, on August 27, 2003, the plaintiff in Weiss v. Surebeam Corp. published a notice on the Business Wire*fn2 advising class members of the existence of the lawsuit and of the time limit for filing a motion to be appointed lead plaintiff. Twelve individuals or groups have moved within the sixty-day time period for appointment as lead plaintiff. Only six of those individuals or groups continue to seek appointment as lead plaintiff.*fn3 The standard for appointment of lead plaintiff is established in the PSLRA. That statute mandates that the court "shall appoint as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members," referred to as the "most adequate plaintiff." 15 U.S.C. § 78u-4(a)(3)(B)(i). There is a rebuttable presumption that the most adequate plaintiff is "the person or group of persons" that meet the following three requirements:
1. has either filed the complaint or made a motion in response to a notice;
2. has, in the determination of the court, the "largest financial interest" in the relief sought by the class; and
3. otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure.
Id. § 78u-4(a)(3)(B)(iii)(I). The presumption established above may be rebutted "only upon proof by a member of the purported plaintiff class that the presumptively most adequate plaintiff' either 1) "will not fairly and adequately protect the interests of the class," or 2) "is subject to unique defenses that render such plaintiff incapable of adequately representing the class." Id. § 78u-4(a)(3)(B)(iii)(D).

  The Ninth Circuit in Cavanaugh held that the district court is required to strictly follow a three-step process in the determination of lead plaintiff. 306 F.3d at 729. First, the district court must determine if the procedural requirements are satisfied. Id. The second step requires the district court to compare the financial stakes of the parties and determine who has the highest financial interest. Id. at 729-30. Once the individual or group with the largest financial interest is identified, the court "must then focus its attention on that plaintiff' and determine whether they meet the requirements of Rule 23. Id. at 730 (emphasis in original). The court may not consider the merits of the other plaintiffs' claims. Id. at 732. If the individual or group with the largest stake in the controversy does not meet Rule 23's requirements the court must inquire into the adequacy of the individual or group with the second largest stake. Id. at 731. If the individual or group with the highest financial stake in the litigation does meet the requirements of Rule 23, they must be the presumptive lead plaintiff. Id. "[T]he only basis on which a court may compare plaintiffs competing to serve as lead is the size of their financial stake in the controversy." Id at 732 (emphasis in original). Once the presumptive lead plaintiff is chosen, step three allows the other candidates to attempt to rebut the presumption by attacking that individual or group's qualifications under Rule 23. Id A. The Candidates for Lead Plaintiff

  Six individuals or groups have moved to be appointed lead plaintiff: (1) FMC Pension Group, (2) Leason Group, (3) Dobis, (4) Searcy Group, (5) Bemi, and (6) Bildstein.

  1. Procedural Requirements

  In order to be considered for lead plaintiff status, each proposed lead plaintiff must, within 60 days of published notice of the pendency of the action, move to be appointed lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A). Each prospective plaintiff must provide a sworn certification representing that he or she has read the complaint, did not purchase the security at the direction of counsel or in order to participate in any private action, and is willing to serve as a representative party. Id. § 78u-4(a)(3)(A)(i)-(iii). The sworn certification must set forth "all of the transactions of the plaintiff in the security that is the subject of the complaint during the class period specified in the complaint." Id. § 78u-4(a)(2)(A)(iv). Each of the movants in this case has brought a motion within the appropriate time limit and has included the requisite certification.

  2. Largest Financial Interest

  The second step under the PSLRA asks which proposed lead plaintiff "has the largest financial interest in the relief sought by the class." Id. § 78u-4(a)(3)(B)(iii)(I). The district court must compare the losses allegedly suffered by the various plaintiffs to determine the financial stakes. Cavanaugh, 306 F.3d at 730. Although the PSLRA does not dictate the process for determining which party has the largest financial interest, several courts have suggested considering: (1) the number of shares purchased during the class period; (2) the number of net shares purchased during the class period; (3) the total net funds expended during the class period; and (4) the approximate losses suffered during the class period. Aronson v. McKesson HBOC. Inc., 79 F. Supp.2d 1146, 1157-58 (N.D. Cal. 1999); In re Olsten Corp. Sec. Litig., 3 F. Supp.2d 286, 295 (E.D.N.Y. 1998) (citing Lax v. First Merchs. Acceptance Corp., 1997 U.S. Dist. LEXIS 11866, at *5 (N.D. Ill. Aug. 11, 1997)); In re Enron Corp. Sec. Litig., 206 F.R.D. 427, 440 (S.D. Tex. 2002). The financial interest of each proposed lead plaintiff is as follows:
Proposed Lead Plaintiff shares purchased total amount approx. losses • individual members of group, if spent applicable
FMC Pension group 235,500 1,671,400 1,281,628 • Spear Capital 77,450 836,728 654,713 • Jamerica 84,550 398,561 287,420 • Brogan 50,000 291,255 225,530 • FMC Pension 23,500 144,856 113,965
Leason group 90,000 204,086 • Glen Leason 43,000 94,493 • Mary Ann Richason 20,000 49,051 • Paul Berger 20,000 25,357 • Gregory Lavdanski 2,000 20,517 • Olive Branch-Leason 5,000 14,669
Dobis 41,750 189,671 107,823
Searcy Group 51,931 107,235 Manuel Wilkey 31,00 105,220 63,779 • Paul/Amelia Strick 12,000 56,640 24,756 • Richard Shay 6,931 21,860 12,594 • Eva Searcy 2,000 8,776 6,105
Berni 20,500 38,575
Bildstein 200 2,000 1,700
  None of the numbers provided to this court have been challenged. Therefore, FMC Pension Group has the largest financial interest in this litigation, dwarfing all other claims with their claim of $1.2 million.


  Proposed lead plaintiff Dobis objects to FMC Pension Group on the ground that the group consists of four unrelated entities or individuals whose claims should not be aggregated for purposes of appointing lead plaintiff. The PSLRA does not explicitly state whether individuals may aggregate their losses for consideration as lead plaintiff. Likewise, the Ninth Circuit has not ruled on the issue of aggregation. Cayanaugh, 306 F.3d at 732 n.8. However, many district courts have stated that by using the language "member or members of the purported plaintiff class" the statute envisions aggregation. Yousefi v. Lockheed Martin Corp., 70 F. Supp.2d 1061, ...

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