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holding that the majority of cases, including the Ninth Circuit, have held that day traders may serve as class representatives and suffer as do other traders
Summary of this case from In re Zynga Inc. Sec. Litig.Opinion
No. C-04-03364 RMW And Related Cases, Re: Docket Nos. 10, 16, 21, 26, 29.
December 3, 2004
Patrice L. Bishop, Michael David Braun, Tricia Lynn McCormick, Jeffrey S. Nobel, Andrew M. Schatz, Justin S. Kudler, Marc L. Godino, Timothy J. Burke, Robert S. Green, Stanley S. Mallison, Counsel for Plaintiffs.
Sara B. Brody, Counsel for Defendants.
ORDER CONSOLIDATING RELATED CASES, APPOINTING LEAD PLAINTIFF, AND APPROVING SELECTION OF LEAD COUNSEL CLASS ACTION
Before the court are motions for consolidation of related cases, appointment of lead plaintiff, and approval of selection of lead counsel. Three small groups move for appointment as lead plaintiff: (1) Joseph Renzulli and Marcy Epstein ("Renzulli Group"); (2) NECA-IBEW Pension Fund, Joseph Vollmer, Kai Bao, and James Grist ("NECA Group"); and (3) James Levy and David Simon ("Levy Group"). Defendants Netopia, Inc. ("Netopia"), Alan Lefkof, and William Baker, offering no position on consolidation or appointment of lead plaintiff and approval of lead counsel, object to the motion for discovery preservation made by one of the proposed lead plaintiffs, the NECA Group.
A competing plaintiff group, Scott Stanley, Barbara Holsworth, William Bissett, Eberhard Pfaller and Norma Yorgy-Pfaller ("Stanley Group"), withdrew their motion for appointment as lead plaintiff, stating their interests would be adequately represented by Levy and Simon.
I. BACKGROUND
Netopia develops, markets and supports broadband and wireless equipment and service delivery software. On November 6, 2003, Netopia issued a press release ("November Press Release") and conducted a conference call reporting net income of $221,000 or $0.01 per diluted share for its fourth fiscal quarter ended September 30, 2003. These financial results represented Netopia's first profitable quarter since the quarter ending June 30, 2000. It subsequently filed its annual report with the SEC repeating these numbers. On January 20, 2004, Netopia issued a press release reporting revenue of $28.6 million, representing a net income of $1.1 million or $0.04 per diluted share for its first fiscal quarter of 2004 ended December 31, 2003. These numbers were subsequently repeated in a conference call with analysts and filed with the SEC. On April 19, 2004, Netopia issued a press release ("April Press Release") reporting revenues for its second fiscal quarter ended March 31, 2004 of $21.9 million, representing a 23% decrease from the prior quarter, and a second quarter loss of $1.6 million or a loss of $0.07 per share.On July 7, 2004, Netopia held a conference call during which it announced that it had written off $750,000 in bad debt owed by a software reseller. On July 22, 2004, Netopia announced that the $750,000 write off was the result of a licensing deal that had been improperly recognized in its fourth fiscal quarter ended September 30, 2003. It also announced an internal review by the audit committee of its board of directors into revenue recognition irregularities and accounting irregularities with another $1.5 million transaction with the same reseller ("July announcement"). The company later announced on August 17, 2004 that it would late file a report on Form 10-Q for its first fiscal quarter ending June 30, 2004 ("August announcement"). On September 16, 2004, Netopia announced in that it would restate financials for fiscal quarter ended June 30, 2002 and each subsequent fiscal quarter and year through March 3, 2004 ("September announcement").
On the day of the August announcement, the first of four class action complaints, Serafimov v. Netopia, No. 04-03364, was filed in federal court alleging violations of Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j. The complaint alleged that during the class period, November 6, 2003 and July 6, 2004, Netopia made materially false, misleading and incomplete statements and issued false and misleading reports regarding, inter alia, Netopia's earnings, product costs, and sales to foreign customers. On August 23, 2004 another action was filed that expanded the class period to include all purchasers of Netopia securities between November 6, 2003 and August 16, 2004.
II. BACKGROUND
A. Motions to Consolidate
The Private Securities Litigation Reform Act of 1995 ("PSLRA") requires the court to address outstanding motions to consolidate before appointing lead plaintiffs. 15 U.S.C. § 78u-4(a)(3)(B)(ii). Under Federal Rule of Civil Procedure 42(a), the court may consolidate "actions involving a common question of law or fact." The four class actions at issue here present common questions of law and fact, predicated as they are on the same announcements and allegations of misstatement by corporate officials that allegedly caused Netopia securities prices to be artificially inflated prior to its drop in share price. No movant contests that there are common questions of fact among the various complaints. Accordingly, the court consolidates the cases as set forth in its order below.
In its motion to consolidate, the NECA Group moved for preservation of discovery. The motion included requests to order preservation under the PSLRA and using language imported from the Sarbanes-Oxley Act. The PSLRA requires defendants to preserve documents related to the case:
[A]ny party to the action with actual notice of the allegations contained in the complaint shall treat all documents, data compilations (including electronically recorded or stored data) and tangible objects that are in the custody or control of such person and that are relevant to the allegations, as if they were the subject of a continuing request for production of documents from an opposing party under the Federal Rules of Civil Procedure.15 U.S.C. § 78u-4(b) (3(C)(i). As the parties are presently subject to this provision by virtue of having notice of this action, the court has no issue with requiring compliance with this section in its order.
At oral argument, the NECA Group withdrew its request include the Sarbanes-Oxley language requiring defendants certify subject to criminal penalties that they have not knowingly destroyed or altered documents. The requested language pertains to the conduct of federal investigations, and is further unnecessary, particularly absent any indication in the NECA Group's motion that such knowing destruction was presently ongoing.
B. Motions to Appoint Lead Plaintiff
The PSLRA sets forth the process for determining the lead plaintiff in a securities class action brought under the Securities and Exchange Act of 1935 ("Exchange Act"). 15 U.S.C. § 78u-4(a)(3)(B); In re Cavanaugh, 306 F.3d 726, 729 (9th Cir. 2002). Under the PSLRA, the court shall appoint as lead plaintiff the member or members of the class "most capable of adequately representing the interests of the class members." 15 U.S.C. § 78u-4(a)(3)(B)(i). "The `most capable' plaintiff — and hence the lead plaintiff — is the one who has the greatest stake in the outcome of the case, so long as he meets the requirements of Rule 23." Cavanaugh, 306 F.3d at 729.
Determining the lead plaintiff is a three-step process: (1) the first plaintiff to file publicizes the pendency of the action, the claims made, and the purported class period and announces that any member of the class may move for appointment for lead plaintiff within 60 days; (2) the court selects the plaintiff who has the "largest financial interest in the relief sought by the class" and who meets the Rule 23 requirements as the presumptive lead plaintiff; and (3) the court allows other plaintiffs the opportunity to rebut the presumptive lead plaintiff's showing that it satisfies the Rule 23 typicality and adequacy requirements. 15 U.S.C. § 78u-4(a)(3)(A), (B)(iii)(I)-(II); Cavanaugh, 306 F.3d at 729-30. As set forth below, the Levy Group both meets the requirements as the presumptive lead plaintiff and survives challenges against its financial stake and appropriateness under Rule 23.
1. Notification
In a securities class action governed by the PSLRA, the first plaintiff to file must within 20 days post a qualifying notice "in a widely circulated national business-oriented publication or wire service." 15 U.S.C. § 78u-4(a)(3)(A)(i). Class members wishing to be appointed lead plaintiff must move for appointment within 60 days of that publication. Id. § 78u-4(a)(3)(A)(i)(II). Each prospective lead plaintiff must provide a sworn certification representing inter alia 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)(2)(A)(i)-(iii). This 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).
On the date he filed his complaint, August 17, 2004, plaintiff Valentin Serafimov caused the required notice to be published on PR Newswire, thereby satisfying the notification requirement. Each of the movants in this case has brought a motion to be appointed lead plaintiff within the appropriate time and has included the requisite certification.
2. Largest Financial Interest
To determine which movant has the largest financial interest, the court "must compare the financial stakes of the various plaintiffs and determine which one has the most to gain from the lawsuit" through "accounting methods that are both rationally and consistently applied." Cavanaugh, 306 F.3d at 730. All movants have supplied information regarding shares purchased during the class period, the price of those shares, and their approximate losses. The Levy Group provided its figures for net shares purchased during the class period. Based upon those submissions, the financial interest of each proposed lead plaintiff is as follows: Proposed Lead Plaintiff Shares Net Funds Net Shares Approx. • Individual Group Purchased Expended Purchased Losses Members During Class During Class During Period Period Class Period Levy Group 436,374 $3,549,318.00 75,441 $513,311.00 NECA Group 63,659 $903,319.16 $225,920.00 Renzulli Group 6,425 $76,266.00 $41,874.00
Total shares purchased amount excludes option trading, however the other figures reflect option trading. With option trading, the Renzulli Group purchased a total of 9,125 shares at a total price of $76,266.50.
As set forth in further detail below, the Renzulli Group, which has the smallest financial interest based upon the figures submitted by the parties, challenges the Levy Group's adequacy and typicality arguing that David Levy engaged in extensive day trading of Netopia securities. The court briefly addresses what impact, if any, this allegation has on the Levy Group's financial interest.
In In re McKesson HBOC, Inc. Sec. Litig., 97 F. Supp. 2d 993 (N.D. Cal. 1999), this court held that for simplicity's sake it was "inappropriate to count losses (or profits) by `in-and-out' traders . . . when determining the plaintiff with the greatest financial interest in the litigation." Id. at 998. Assuming arguendo that David Levy did engage in day trading, it would be appropriate to examine the net shares purchased by the Levy Group during the class period. The net shares purchased by David Levy alone is 75,441, which exceeds even the total shares purchased by the NECA Group, 63,659 or the Renzulli Group, 9,125. For purposes of determining the largest financial stake, the Levy Group remains the presumptive lead plaintiff.
3. Rule 23 Requirements
Upon determining the movant with the largest financial interest, the court "must then focus its attention on that plaintiff and determine . . . whether he satisfies the requirements of Rule 23(a)." Cavanaugh, 306 F.3d at 730. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). Rule 23(a) requires satisfaction of four factors to serve as a class representative:
(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a). The typicality and adequacy requirements of Rule 23 are the main focus of this determination. See Cavanaugh, 306 F.3d at 730. Examination of the remaining requirements is deferred until the lead plaintiff moves for class certification.
a. Initial Rule 23 Determination
The plaintiff with the largest financial stake in the controversy that preliminarily satisfies the typicality and adequacy requirements is presumed to be the most adequate plaintiff. Cavanaugh, 306 F.3d at 730. The adequacy requirement is met if there are no conflicts between the representative and class interests and the representative's attorneys are qualified, experienced, and generally able to conduct the litigation. Fed.R.Civ.P. 23(a)(4); Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 2003). The test of typicality "is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct." Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citing Schwartz v. Harp, 108 F.R.D. 279, 282 (C.D. Cal. 1985)).
The Levy Group appears to be typical of the class. Section 10(b) of the Exchange Act makes it unlawful "[t]o use or employ, in connection with the purchase or sale of any security . . . any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe." 15 U.S.C. § 78j(b). Rule 10b-5, promulgated by the Commission, states:
It shall be unlawful for any person, directly or indirectly, by use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) To employ any device, scheme or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.17 C.F.R. § 240.10b-5. Section 20(a) of the Exchange Act extends liability for a corporation's violations of Rule 10b-5 to the controlling persons of such corporation. 15 U.S.C. § 78t(a). Like all class members, the Levy Group's members purchased securities during the class period and were damaged by the drop in prices resulting from defendants' alleged omissions and false and misleading representations made in violation of Sections 10(b) and 20(a). There is no evidence that the Levy Group is antagonistic to the class members and it has selected counsel that have significant experience in securities and class action cases. Thus, the Levy Group is presumptively the lead plaintiff.
b. Rebutting the Presumptive Lead Plaintiff's Showing
In the third step of the lead plaintiff determination process, the court must "give other plaintiffs an opportunity to rebut the presumptive lead plaintiff's showing that it satisfies Rule 23's typicality and adequacy requirements." 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II); Cavanaugh, 306 F.3d. at 730. The presumption of adequacy "may be rebutted only upon proof . . . that the presumptively most adequate plaintiff" does not satisfy the adequacy or typicality requirements of Rule 23. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II); Cavanaugh, 306 F.3d at 729 n. 2. If the presumptive lead plaintiff does not meet the typicality or adequacy requirement, the court determines whether the plaintiff with the next highest stake in the litigation has made a prima facie showing of typicality and adequacy. Cavanaugh, 306 F.3d at 731. "If so, it must declare that plaintiff the presumptive lead plaintiff and repeat step three of the process by giving other plaintiffs an opportunity to rebut that showing. This process must be repeated sequentially until all challenges have been exhausted." Id.
The Renzulli Group contends that the Levy Group is inadequate to represent the class in this matter because the Levy Group is subject to unique defenses. A proposed class representative is not adequate or typical if it is subject to a unique defense that threatens to become the focus of a litigation. Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992); In re Milk Prods. Antitrust Litig., 195 F.3d 430, 437 (8th Cir. 1999).
In its opposition to competing motions for appointment of lead counsel, the Renzulli Group asserts that James Levy engaged in extensive day trading of Netopia securities during the class period. For example, on August 16, 2004, Levy purchased 16,400 shares of Netopia stock in 57 separate transactions and sold 11,100 shares over the course of 33 separate sales. See Decl. Michael Braun in Supp. of Mot. Appointment Lead Pl., Ex. A. Citing In re Safeguard Scientifics, 216 F.R.D. 577, 582-83 (E.D. Pa. 2003), the Renzulli Group contends that appointing a day trader as lead plaintiff exposes the class to unnecessary disadvantages because day traders are subject to unique defenses regarding reliance and materiality.
Courts have long recognized the inherent conflict between the stakes of day or "in and out" traders and those of a retention traders. See, e.g., In re Seagate Technology II Securities Litigation, 843 F.Supp. 1341, 1359 (N.D. Cal. 1994) ("[An] in/out plaintiff's interest lies in minimizing the degree of price inflation existing at the date of sale. A retention plaintiff buying on that date . . . has an exactly opposite interest . . . [and] would seek to maximize the degree of price inflation existing on that date."). Nevertheless, these differences have generally not prevented class certification. Id. Furthermore, the Ninth Circuit has held that day traders suffer as do other traders under fraud-on-the-market-theory. Wool v. Tandem Computers, 818 F.2d 1433, 1437 (9th Cir. 1987) ( overruled on other grounds by Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1575 (9th Cir. 1990)). Many district courts that have considered the issue or surveyed case law have largely concluded that day traders may serve as class representatives. See, e.g., Welling v. Alexy, 155 F.R.D. 654, 661-62 (N.D. Cal. 1994) (citing numerous reported and unreported cases in support of its determination that a day trader could be a named plaintiff); In re Royal Ahold N.V. Sec. ERISA Litig., 219 F.R.D. 343, 354 (D. Md. 2003). Even in the case cited by the Renzulli Group, the proposed lead plaintiff's status as a day trader was not the court's sole concern regarding his appointment. The court also noted that he had failed to disclose qualifying transactions and that he had continued to increase his holdings in the securities at issue after the announcement of fraud, calling the element of reliance into question. Safeguard Scientifics, 216 F.R.D. at 582.
The Levy Group argues that James Levy is not a day trader because he did not buy and sell all Netopia securities on a daily in and out basis. Rather, he held increasingly larger stakes in Netopia stock in April, July and August 2004 when major announcements regarding Netopia's revenues were made. Braun Decl., Ex. B (33,547 shares before April Press Release, 67,497 before July Announcement, 75,441 shares before August Announcement). The court need not label James Levy a day trader, for where a plaintiff has engaged in both day and retention trading, he may nonetheless be an appropriate lead plaintiff in a securities class action. See, e.g., Welling, 155 F.R.D. at 662 (finding that a potential lead plaintiff's status as a combination in/out and retention trader minimized potential conflicts with other class members). Although unlike the contested class representative in Welling, James Levy did not retain more shares than he traded on what appears to be an in and out basis, the Levy Group has nonetheless demonstrated that James Levy has also engaged in retention trading, thereby minimizing the impact of potential unique defenses on the other class members.
Finally, both the NECA Group and the Renzulli Group argue that the members of the Levy Group cannot adequately represent the group because they have not demonstrated that they (1) understand the present status of the action or that they had been nominated as lead plaintiff or (2) met with proposed counsel to discuss a plan for decision making in the case going forward. The Levy Group filed a joint statement dated November 11, 2004 addressing these concerns on November 12, 2004, the same day as the NECA and Renzulli Groups filed their oppositions. Therefore, because the movants have not presented evidence that it does not satisfy the adequacy or typicality requirements of Rule 23, the court finds the Levy Group to be the most adequate plaintiff and grants its motion for appointment as lead plaintiff.
The Levy Group's reply memorandum states that this declaration was filed before either member of the group or counsel read the oppositions. This is not stated in a declaration, but the court will assume that the date on which it was executed under penalty of perjury, November 11, 2004, is correct.
C. Approval of Class Counsel
Once the most adequate plaintiffs are selected, the "most adequate plaintiff[s] 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). Accordingly, the Levy Group seeks approval of its selection of the law firm of Schatz Nobel, P.C., to serve as lead counsel, and the Braun Law Group, P.C. as liaison counsel. The court has reviewed the resumes for these firms and is satisfied that the Levy Group has selected highly qualified, experienced counsel who will adequately represent the interests of the class. The court will permit the selection of two firms, but cautions that this must not result in the duplication of any expenses to the class.
III. ORDER
A. Motion to Consolidate Related Cases
1. The following actions pending in the Northern District are, until further order of this court, consolidated for all purposes pursuant to Rule 42(a) of the Federal Rules of Civil Procedure before the Honorable Ronald M. Whyte: Serafimov v. Netopia, Inc., et al., C-04-03364 (RMW); Bassin v. Netopia, Inc., et al., C-04-03504 (RMW); Gladden v. Netopia, Inc., et al, C-04-03509 (CRB); and Choi et al. v. Netopia, Inc., et al., C-04-03741 (RMW) .
2. These actions shall be referred to herein as the "Consolidated Actions." This Order shall apply to the Consolidated Actions and to each case that is subsequently filed in this court or transferred to this court that relates to the same subject matter as in the Consolidated Actions:
a. The short caption of the Consolidated Actions shall be "In re Netopia, Inc., Sec. Litig." Any other action now pending or hereafter filed in this District as a class action on behalf of acquirers of Netopia securities between November 6, 2003 through August 16, 2004, inclusive, which arises out of the same facts as alleged in the Consolidated Actions, shall be consolidated for all purposes as soon as it is brought to the court's attention.
b. All related actions that are subsequently filed in, or transferred to, this District shall be consolidated into this action for pretrial purposes. This Order shall apply to every such related action, absent order of the Court. A party that objects to such consolidation, or to any other provision of this Order, must file an application for relief from this Order within thirty (30) days after the date on which a copy of the Order is mailed to the party's counsel.
c. This Order is entered without prejudice to the rights of any party to apply for severance of any claim or action, for good cause shown.
d. The docket in Civil Action No. C-03-03364 (RMW) shall constitute the Master Docket for this action.
e. Every pleading filed in the consolidated action shall bear the following caption:
f. A Master Docket and a Master File are hereby established for the Consolidated Actions under Master File No. C-04-03364 (RMW). When a pleading is intended to be applicable to all actions to which this Order is applicable, the words "All Actions" shall appear immediately after the words "This Document Relates To:" in the caption set out above. When a pleading is intended to be applicable only to some, but not all, of such actions, the court's docket number for each individual action to which the paper is intended to be applicable and the last name of the plaintiff in such action shall appear immediately after the words "This Document Relates To:", the docket number for each individual action to which the document applies, along with the last name of the first-listed plaintiff in said action (e.g., "No. C-04-03364 (RMW) (Serafimov))."
g. When a pleading is filed and the caption shows that it is to be applicable to "All Actions," the Clerk shall file such pleading in the Master File and note such filing in the Master Docket. No further copies need be filed or docket entries made. When a pleading is filed and the caption shows that it is to be applicable to fewer than all of the Consolidated Actions, the Clerk need file such pleading only in the Master File but, nonetheless, shall note such filing in both the Master Docket and in the docket of each such action.
h. When a case that relates to the subject matter of the Consolidated Actions is hereafter filed in this court or transferred here from another court, the Clerk of the court shall:
1. place a copy of this Order in the separate file for such action;
2. mail a copy of the Order of assignment to counsel for plaintiffs and to counsel for defendants in the Consolidated Actions;
3. mail to the attorneys for the plaintiff(s) and to any new defendant(s) in the newly filed or transferred action a copy of this Order; and
4. make an appropriate entry in the Master Docket.
i. The court requests the assistance of counsel in calling to the attention of the Clerk of this court the filing or transfer of any case that might properly be consolidated as a part of In re Netopia, Inc. Securities Litigation.
j. This Order shall apply to each case subsequently filed in this court or transferred to this court, unless a party objecting to the consolidation of such case or to any other provision of this Order files, within ten (10) days after the date upon which a copy of this Order is mailed to counsel for such party, an application for relief from this Order or any provision herein and this court deems it appropriate to grant such application.
B. Motion to Appoint Lead Plaintiffs and Approval of Co-Lead Counsel
1. The Levy Group is appointed as lead plaintiff for the putative class and any subsequently consolidated or related action to represent the interests of the putative class.
2. Lead plaintiff's selection of counsel for the putative class is hereby approved. The law firms of Schatz Nobel, P.C., is appointed to serve as lead counsel, and the Braun Law Group, P.C. is appointed liaison counsel pursuant to § 21D(a)(3)(B)(v) of the Exchange Act (hereinafter "co-lead counsel").
3. Co-lead counsel shall have authority to speak for all plaintiffs and putative class members in all matters regarding the litigation including, but not limited to, pretrial proceedings, motion practice, trial, and settlement, and shall make all work assignments in such a manner as to facilitate the orderly and efficient prosecution of this litigation and to avoid duplicative or unproductive effort. Additionally, co-lead counsel shall have the following responsibilities:
a. to brief and argue motions and file opposing briefs in proceedings initiated by other parties;
b. to initiate and conduct discovery proceedings, including, but not limited to, the preparation of discovery materials and discussions or negotiations concerning discovery issues;
c. to direct and coordinate the examination of witnesses in depositions and on oral interrogatories;
d. to act as spokespersons at court conferences and hearings;
e. to delegate responsibilities for specific tasks to other counsel in a manner to assure that pretrial preparation for the plaintiffs is conducted effectively, efficiently, and economically;
f. to consult with and call meetings of plaintiffs' counsel when they deem it appropriate;
g. to consult with and employ experts;
h. to negotiate with and enter into agreements with defendants' counsel with respect to settlement and other matters;
i. to coordinate this action with any related state or Federal court proceeding that involves issues similar to those raised in this consolidated action in order to avoid unnecessary duplication, expense, and effort;
j. to conduct all pretrial, trial, and post-trial proceedings; and
k. to perform such other duties as they deem necessary, or as may be expressly authorized by further order of the court.
3. Co-lead counsel shall be responsible for coordinating all activities and appearances on behalf of the putative class and for disseminating notices and orders of this court.
4. No motion, application or request for discovery shall be served or filed, or other pretrial proceedings initiated, on behalf of lead plaintiff, except through co-lead counsel.
5. All notices, proposed orders, pleadings, motions, discovery, and memoranda shall be served upon co-lead counsel by overnight mail service, telecopy, or hand delivery.
6. Co-lead counsel for the putative class shall be available and responsible for communications to and from the court. Co-lead counsel shall be responsible for the creation and maintenance of a master service list of all parties and their respective counsel.
7. Defendants' counsel may rely upon all agreements made with co-lead counsel.
8. During the pendency of this litigation, or until further order of this court, the parties shall take reasonable steps to preserve all documents within their possession, custody, or control, including computer-generated and stored information and materials such as computerized data and electronic mail, containing information that is relevant to or which may lead to the discovery of information relevant to the subject matter of the pending litigation.
9. This Order shall apply to each case subsequently filed in this court or transferred to this court, unless a party objecting to the consolidation of such case or to any other provision of this Order files within ten (10) days after the date upon which a copy of this Order is mailed to counsel for such party, an application for relief from this Order or any provision herein and this court deems it appropriate to grant such application.
C. Pleadings and Motions
1. Defendants are not required to respond to the complaint in any action consolidated into this action, other than the consolidated complaint or a complaint designated as the operative complaint.
2. Lead plaintiff shall file a consolidated complaint within thirty (30) days after filing the order designating the lead plaintiff unless otherwise agreed upon by the parties. The consolidated complaint shall be the operative complaint and shall supersede all complaints filed in any of the actions consolidated herein.
3. Defendants shall respond to the consolidated complaint within thirty (30) days after service, unless otherwise agreed upon by the parties. If defendants file any motions directed at the consolidated complaint, the opposition briefs shall be filed within forty-five (45) days of the motion and reply briefs shall be filed within thirty (30) days of the response unless otherwise agreed upon by the parties.
4. The parties shall serve all papers on each other by hand, by overnight delivery, or (by prior agreement) by facsimile, unless otherwise agreed upon by the parties. Notwithstanding the foregoing, defendants may serve plaintiffs' counsel, other than lead plaintiffs' counsel, by first-class mail, unless otherwise agreed upon by the parties.
5. Plaintiffs shall file a motion for class certification within thirty (30) days after service of the consolidated complaint. Counsel shall propose to the court a mutually agreeable schedule for class certification discovery and for briefing and hearing of such motion.
D. Discovery
1. The following definitions shall presumptively apply in all discovery issued in this action:
a. Communication. The term "communication" means the transmittal of information (in the form of facts, ideas, inquiries or otherwise).
b. Document. The term "document" is defined to be synonymous in meaning and equal in scope to the usage of this term in Fed R. Civ. P. 34(a). A draft or non-identical copy is a separate document within the meaning of this term.
c. Identify (with respect to persons). When referring to a person, "to identify" means to give, to the extent known, the person's full name, present or last known address, and when referring to a natural person, additionally, the present or last known place of employment. Once a person has been identified in accordance with this subparagraph, only the name of that person need be listed in response to subsequent discovery requesting the identification of that person.
d. Identify (with respect to documents). When referring to documents, "to identify" means to give, to the extent known, the (i) type of document; (ii) general subject matter; (iii) date of the document; and (iv) author(s), addressee(s) and recipient(s).
e. Parties. The terms "plaintiff" and "defendant" as well as a party's full or abbreviated name or a pronoun referring to a party mean the party and, where applicable, its officers, directors, employees, partners, corporate parent, subsidiaries or affiliates. This definition is not intended to impose a discovery obligation on any person who is not a party to the litigation.
f. Person. The term "person" is defined as any natural person or any business, legal or governmental entity or association.
g. Concerning. The term "concerning" means relating to, referring to, describing, evidencing or constituting.
h. The following rules of construction apply to all discovery requests:
i. All/each. The terms "all" and "each" shall be construed as all and each.
ii. And/or. The connectives "and" and "or" shall be construed either disjunctively or conjunctively as necessary to bring within the scope of the discovery request all responses that might otherwise be construed to be outside of its scope.
i. Number. The use of the singular form of any word includes the plural and vice versa.
2. All parties will comply with 15 U.S.C. § 78u-4(b)(3)(C)(i).