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Hessefort v. Super Micro Computer, Inc.

United States District Court, N.D. California

May 25, 2018

LOGAN HESSEFORT, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
v.
SUPER MICRO COMPUTER, INC., et al., Defendants. UNITED UNION OF ROOFERS, WATERPROOFERS & ALLIED WORKERS LOCAL UNION NO. 8 WBPA FUND, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
v.
SUPER MICRO COMPUTER, INC., et al., Defendants.

          ORDER GRANTING MOTION TO CONSOLIDATE, APPOINTING LEAD PLAINTIFF, AND APPROVING SELECTION OF COUNSEL RE: ECF NOS. 12, 29

          JON S. TIGAR UNITED STATES DISTRICT JUDGE

         I. BACKGROUND

         In these securities class actions, the Court now considers motions for consolidation and for appointment as lead plaintiff and approval of selected counsel for a securities class action. The New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund (“NYHTC”) filed one motion. ECF No. 12. The Oklahoma Police Pension and Retirement System (“Oklahoma Pension”) filed the second. ECF No. 29. The Court will grant NYHTC's motion and appoint the pension fund as lead plaintiff, and their selected counsel. The Court will also consolidate the two related cases: Hessefort v. Super Micro Computer, Inc. No 3:18-cv-838 and United Union of Roofers, Waterproofers & Allied Workers Local Union No. 8 WBPA Fund v. Super Micro Computer, Inc. No. 3:18-cv-850.[1]

         This is a federal securities class action on behalf of persons who purchased or otherwise acquired shares of Defendant Super Micro Computer Inc.'s securities between August 5, 2016 and January 30, 2018. ECF No. 12 at 2.[2] Super Micro designs, develops, manufactures, and sells servers, motherboards and other computer parts and accessories. Id. at 3. The complaints allege that Super Micro made false and misleading statements and failed to disclose adverse information regarding the company. Id.

         Originally, four parties filed motions seeking appointment as lead plaintiff and approval of their selection of counsel. ECF Nos. 12, 17, 25, 29. Two of the parties subsequently withdrew or chose not to oppose, leaving NYHTC and the Oklahoma Pension as the remaining competing plaintiffs. ECF Nos. 33, 34.

         II. LEGAL STANDARD

         The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides that “[n]ot later than 20 days after the date on which the complaint is filed, ” the plaintiff shall publish a notice alerting members of the purported class of the pendency of the action, the claims asserted, and the purported class period. 15 U.S.C. § 78u-4(3)(a)(i). The notice should also inform potential class members that “not later than 60 days after the date on which the notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class.” Id. § 78u-4(3)(a)(i)(II).

         Under the PSLRA, “[t]he ‘most capable' plaintiff - and hence the lead plaintiff - is the one who has the greatest financial stake in the outcome of the case, so long as [the proposed lead plaintiff] meets the requirements of Rule 23” of the Federal Rules of Civil Procedure. In re Cavanaugh, 306 F.3d 726, 729 (9th Cir. 2002). “While the PSLRA does not specify how to calculate the largest financial interest, approximate losses in the subject securities is the preferred measure.” Bruce v. Suntech Power Holdings Co., No. CV 12-04061 RS, 2012 WL 5927985, at *2 (N.D. Cal. Nov. 13, 2012) (internal citation omitted).

         After the Court determines who the presumptive lead plaintiff is, other plaintiffs in the class are provided with “an opportunity to rebut the presumptive lead plaintiff's showing that it satisfies Rule 23's typicality and adequacy requirements.” Cavanaugh, 306 F.3d at 730. “If, as a result of this process, the district court determines that the presumptive lead plaintiff does not meet the typicality or adequacy requirement, it then must proceed to determine whether the plaintiff with the next lower stake in the litigation has made a prima facie showing of typicality and adequacy.” Id. at 731.

         “The most adequate plaintiff shall, subject to the approval of the court, select and retain counsel to represent the class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). “[I]f the lead plaintiff has made a reasonable choice of counsel, the district court should generally defer to that choice, ” and “should not reject a lead plaintiff's proposed counsel merely because it would have chosen differently.” Cohen v. U.S. Dist. Court for N. Dist. of California, 586 F.3d 703, 711-12 (9th Cir. 2009).

         III. DISCUSSION

         A. Consolidation

         Under the PSLRA, the Court must decide whether to consolidate related actions prior to selecting a plaintiff. 15 U.S.C. § 78u-4(a)(3)(B)(ii).

         NYHTC argues the Court should consolidate the cases under Federal Rule of Civil Procedure Rule 42(a) because both involve “virtually identical factual and legal issues.” ECF No. 12 at 5. The Oklahoma Pension argues the case should be consolidated for similar reasons. ECF No. ...


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