Michael D. Braun (167416)
Timothy J. Burke (181866)
STULL, STULL & BRODY
10940 Wilshire Boulevard
Suite 2300
Los Angeles, CA 90043
(310) 209-2468
Jules Brody
Aaron Brody
STULL, STULL & BRODY
6 East 45th Street
New York, NY 10017
(212) 687-7230
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
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ROBERT SCHMIDT, On Behalf of Himself Plaintiff, vs. P-COM, INC.; GEORGE P. ROBERTS; PIER
Defendants. |
) |
CASE NO. C98-04412 SC CLASS ACTION THE SCHMIDT GROUP'S NOTICE DATE: February 19, 1999 |
MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
IV. THE SCHMIDT GROUP ARE THE MOST ADEQUATE PLAINTIFFS UNDER §21D OF THE [sic]
1. Plaintiff Schmidt Filed The First Federal Complaint In This Action
2. The Schmidt Group Makes This Motion Within 60 Days Of Publication Of Notice
3. The Schmidt Group Has The Largest Financial Interest In the Relief Sought
4. The Schmidt Group Otherwise Satisfies The Requirements of Rule 23
5. The Presumption In Favor of The Schmidt Group Has Not Been Rebutted
V. THIS COURT SHOULD APPROVE THE SCHMIDT GROUP'S CHOICE OF LEAD COUNSEL
VI. THE COURT SHOULD CONSOLIDATE THE RELATED ACTIONS FOR THE PURPOSES OF EFFICIENCY AND JUDICIAL ECONOMY
VIII. CONCLUSION
In re Equity Funding Corp. of Am. Sec. Litig.,
416 F. Supp. 161, 176 (C.D. Cal. 1976)
Greebel v. FTP Software,
939 F. Supp. 57, 60 (D. Mass. 1996)
In re Ramtek Sec. Litig.,
Fed. Sec. L. Rep. (CCH) ¶95,814 (N.D. Cal. 1991)
In re Unioil Securities Litigation,
107 F.R.D. 615, 620 (C.D. Cal. 1985)
In re United Energy Corp. Solar Power Modules Tax Shelter Inv. Sec. Litigation,
122 F.R.D. 251, 257 (C.D. Cal. 1988)
Yamner v. Boich,
Fed. Sec. L. Rep. (CCH) P98,427 (N.D. Cal. 1994)
Chan v. Orthologic Corp.,
No. Civ. 96-1514 PHX RCB, slip op. at 13 (D. Ariz. Dec. 19, 1996)
In re Diamond Multimedia Systems, Inc. Sec. Litig.,
No. C-96-2644-SBA, slip op. at 2-4 (N.D. Cal. Jan. 13, 1997)
Malin v. IVAC Corporation, et al.,
No. 96-1843-CIV-Moreno, slip op. at 4-8 (S.D. Fla. Nov. 1, 1996)
Powers v. Eichen,
Civ. No. 96-1431-B(AJB), Order at 1 (S.D. Cal. Nov. 15, 1996)
In re Read-Rite Corp. Sec. Litig.,
No. C-97-20059-RMW, slip op. at 4-5 (N.D. Cal. May 23, 1997)
Zuckerman v. Foxmeyer Health Corp.,
No. 3:96-CV-2258-T, slip op. at 5 (N.D. Tex. Mar. 28, 1997)
15 U.S.C. §78u-4
Federal Rule of Civil Procedure 23
Federal Rule of Civil Procedure Rule 42(a)
Securities Exchange Act of 1934 §21D
TO: ALL PARTIES AND THEIR COUNSEL OF RECORD
PLEASE TAKE NOTICE that on Friday, February 19, 1999, or as soon thereafter as the matter may be heard before the Honorable Samuel Conti, in Courtroom 1, located at 450 Golden Gate Avenue, San Francisco, California, 94102, plaintiff Robert Schmidt ("Schmidt") along with other class members (hereinafter "The Schmidt Group")1 will, and hereby does, move this Court for an order granting "The Schmidt Group's Motion for Appointment of Lead Plaintiffs and Lead Counsel Pursuant to Section 21D of the Securities Exchange Act of 1934 and for Consolidation of All Related Actions" (the "Motion").
PLEASE TAKE NOTICE that no appearance by any party is necessary and that the Court will not hear oral argument. This Motion is to be decided upon the moving papers alone.
This Motion is brought pursuant to §21D of the Securities Exchange Act of 1934 on the grounds that The Schmidt Group have timely filed their Motion and that they are the "most adequate plaintiffs." In addition, The Schmidt Group seeks the Court's approval of their selection of Stull, Stull & Brody as Lead Counsel pursuant to §21D(a)(3)(B)(v). 15 U.S.C. §78u-4(a)(3)(B)(v). Finally, The Schmidt Group seek to consolidate all related actions pursuant to Rule 42(a) of the Federal Rules of Civil Procedure.
This Motion is based on this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities In Support Thereof, the Declaration of Timothy J. Burke filed herewith, the pleadings and other files herein, and such other argument as may be permitted by the Court.
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Dated: ________ __, 1999 |
Michael D. Braun By: ___________________________ Jules Brody Attorneys for Plaintiff |
Plaintiff Robert Schmidt ("Schmidt") along with other class members (hereinafter "The Schmidt Group")2 respectfully submit their memorandum in support of their motion for: (i) the appointment of The Schmidt Group as Lead Plaintiffs in this action; (ii) the approval of Stull, Stull & Brody as The Schmidt Group's choice of Lead Counsel in this action; and (iii) the consolidation of all other related actions to this case. The combined financial interest of The Schmidt Group is no less than $402,064.41 in losses.
The Private Securities Reform Act of 1995 ("PSLRA"), which amends the Securities Exchange Act of 1934 by adding §21D (codified at 15 U.S.C. §78u-4), establishes a procedure for the appointment of lead plaintiffs in private securities class actions filed after December 22, 1995. Section 21D provides, in relevant part, that within 60 days after publication of a notice advising class members of the pendency of a securities class action, any class member may move the Court to be appointed lead plaintiff of the purported class.3
Section 21D(a)(3)(B) of the Exchange Act further provides that the Court shall consider any motion by a purported class member to be appointed lead plaintiff "not later than 90 days after the date on which a notice is published," or as soon as practicable after the Court decides any pending motion to consolidate any actions asserting substantially the same claim or claims, and 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...".4 15 U.S.C. §78u-4(a)(3)(B).
Having filed the instant motion within the 60-day period prescribed by §21D, The Schmidt Group now request that they be appointed Lead Plaintiffs, that the Court approve their selection of Stull, Stull & Brody as Lead Counsel for the purported class, and that the Court consolidate all related cases with this action pursuant to Rule 42(a) of the Federal Rules of Civil Procedure.
The matter herein is a securities class action filed on behalf of all persons or entities who purchased or otherwise acquired P-Com, Inc. ("P-Com" or the "Company") securities between April 15, 1997 and September 11, 1998, inclusive (the "Class Period") and who sustained damages thereby. The Schmidt Group seeks to recover damages caused by defendants'5 violations of the Securities Exchange Act of 1934 (the "Exchange Act").
P-Com provides equipment and services for access to worldwide telecommunications and broadcast networks. Rather than reveal to the market that the Company's rate of growth had fallen, the defendants began issuing a series of false and misleading statements while simultaneously offering extraordinarily lenient credit terms, in order to continue to post revenue growth in line with the Company's historical rate of growth. Although this strategy caused P-Com's accounts receivables to balloon, it nevertheless enabled P-Com to continue to post sequential revenue gains and more importantly, report stable gross profit margins which provided the individual defendants the necessary platform to represent to the securities markets that P-Com was unaffected by the fierce price competition going on in P-Com's markets.
Defendants' misconduct allowed them to artificially inflate and maintain the price of P-Com stock long enough to: (i) allow P-Com to acquire Central Resources Corporation ("CRC") RT Masts Limited ("RT Masts") and Telematics, Inc. ("Telematics") for a total of $42 million in inflated P-Com stock, thereby allowing P-Com to diversify away from its core point-to-point radio business which was suffering from severe price competition; (ii) enable the individual defendants to sell 672,000 of their P-Com shares -- 74% of their aggregate holdings -- for $13.1 million; and (iii) allow P-Com to raise $100 million by selling bonds at a 4.25% rate of interest -- extremely favorable financing terms -- due in large part to the fact that the bonds were ultimately convertible into shares of rapidly appreciating P-Com stock.
This action, Schmidt v. P-Com, Inc., et al., Case No: C98-04412 SC (the "Schmidt Complaint") was filed on November 13, 1998. Pursuant to §21D(a)(3), plaintiff Schmidt caused a notice of pendency of this action (the "Notice") to be timely published and disseminated over the Business Wire on November 13, 1998.6 The Notice advised all purchasers of P-Com securities during the Class Period of: 1) the pendency of this action; 2) the claims asserted in the Schmidt Complaint; 3) the purported Class Period; and 4) the fact that, no later than sixty (60) days from the date the Schmidt Notice was published, any member of the purported Class may move this Court to serve as lead plaintiff.
Subsequent to the filing of the Schmidt Complaint, the following class action suit was filed in this District which is essentially based on the same facts, name the same defendants, and list the same causes of action:
| Abbreviated Case Name | Case Number | Date Filed |
|---|---|---|
| 1. Dwyer v. P-Com, Inc., et al. | 98-CV-21199 | 12/3/98 |
Section 21D(a)(3)(B)(iii) of the Securities Exchange Act establishes a rebuttable presumption that the "most adequate plaintiff" for purposes of appointment as lead plaintiff is the person or group of persons that:
(aa) has either filed the complaint or made a motion in response to a notice under subparagraph (A)(i);
(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).
Thus, a "member or members" of the class or a "person or group of persons" may combine to constitute "the largest financial interest" and thereby jointly serve as the "most adequate plaintiff." Id.; See In re Diamond Multimedia Systems, Inc. Sec. Litig., No. C-96-2644-SBA, slip op. at 2-4 (N.D. Cal. Jan. 13, 1997) (proposed Lead Plaintiffs can pool together their shares to form the largest financial interest) (See Burke Decl., Exhibit D).7
Plaintiff Schmidt filed his Complaint on November 13, 1998. As set forth in the Certification of Schmidt, filed with the Complaint as required by Section 21D(a)(2), plaintiff Schmidt reviewed the Complaint and authorized its filing. Within 20 days after filing the Complaint, on November 13, 1998, plaintiff Schmidt timely published Notice to the Class on the Business Wire which advised members of the pendency of this action. Consequently, The Schmidt Group has complied with Section 21D(a)(3)(A) of the Exchange Act. 15 U.S.C. §78u-4(a)(3)(A). To the best of The Schmidt Group's knowledge, no other Class member has filed a competing application to be appointed lead plaintiff as of this date.
Members of The Schmidt Group, aside from plaintiff Schmidt, responded to the Notice published by plaintiff Schmidt on November 13, 1998 and, as set forth in their certifications, attached to the Burke Decl. as Exhibit I, have reviewed one of The Schmidt Group complaints and bring this motion within 60 days of publication of that notice.
The chart attached as Exhibit A to the Burke Decl. provides the names of all members of The Schmidt Group, lists their purchases of P-Com securities, and itemizes each individual's losses (or gains). This information was compiled from each of the certificates attached as Exhibit I to the Burke Decl. As the chart indicates, The Schmidt Group purchased a cumulative total of 44,636 shares of P-Com securities during the Class Period and have sustained at least $402,064.41 in damages.8 As no other person has sought to be appointed lead plaintiff, to the best of The Schmidt Group's knowledge, The Schmidt Group have the largest financial interest in the relief sought by the Class, and should therefore be appointed Lead Plaintiffs in this matter. Section 21D(a)(3)(B); 15 U.S.C. §78u-4(a)(3)(B); Greebel, 939 F. Supp. at 64.
Section 21D(a)(3)(B)(iii)(cc) of the Exchange Act further provides that the lead plaintiff or plaintiffs must "otherwise satisf[y] the requirements of Rule 23 of the Federal Rules of Civil Procedure." 15 U.S.C. §78u-4(a)(3)(B)(iii)(cc). Rule 23(a) provides that a party may serve as a class representative if the following four requirements are satisfied:
(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.
Plaintiff Schmidt has alleged that "the members of the class are so numerous that joinder of all members is impracticable" and that "plaintiff believes that there are over a thousand members of the Class" (Complaint ¶28),9 that "plaintiff's claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by defendants' wrongful conduct in violation of the federal law that is complained of herein" (Complaint ¶29), that "plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation" (Complaint ¶30), that "common questions of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class." (Complaint ¶31) and that "a class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this class action" (Complaint ¶34).
These allegations, which may be accepted as true for the purposes of this Motion,10 satisfy The Schmidt Group's burden of a prima facie showing, again for the purposes of this Motion, that the Rule 23 requirements of numerosity, commonality, typicality, adequacy of representation and superiority of a class action are satisfied. (This conclusion is without prejudice to defendants' contesting class certification.) See also Greebel, 939 F. Supp. at 64.
Moreover, of the four prerequisites of class certification under Rule 23(a), only two -- adequacy of representation and typicality -- directly address the personal characteristics of the class representative/lead plaintiff, and are the only Rule 23 prerequisites, if any, the Court should focus on in appointing lead plaintiffs.
The adequacy requirement is met when plaintiff's interests are not antagonistic to the interests of the members of the proposed class, and plaintiff's attorneys are qualified, experienced and generally able to conduct the litigation. See, e.g., Yamner v. Boich, Fed. Sec. L. Rep. (CCH) P98,427 (N.D. Cal. 1994); In re United Energy Corp. Solar Power Modules Tax Shelter Inv. Sec. Litigation, 122 F.R.D. 251, 257 (C.D. Cal. 1988). There has been no showing that The Schmidt Group have any fundamental conflicts with other class members. In addition, The Schmidt Group have retained highly competent and experienced counsel in this action. Stull, Stull & Brody are well known securities practitioners who have been adjudged adequate class counsel in numerous class actions and are capable of prosecuting this litigation, as are the additional co-counsel joined on the signature block. A copy of Stull, Stull & Brody's resume is attached to the Burke Decl. as Exhibit J.
Furthermore, The Schmidt Group have already demonstrated their adequacy and willingness to accept their duties as Class representatives, to serve as advocates on behalf of the Class and to prosecute this action. The Schmidt Group have stated in their certifications, pursuant to Section 21D(a)(2), that they are "willing to serve as a representative party on behalf of the class set forth in the Complaint, including providing testimony at deposition and trial." See Certifications of The Schmidt Group attached to the Burke Decl. as Exhibit I.
The typicality requirement of Rule 23(a)(3) is satisfied when the named plaintiffs have: 1) suffered the same or similar injuries as the absent class members; 2) the injuries result from the same course of conduct by defendants; and, 3) the claims are based on the same legal theories. See In re Unioil Securities Litigation, 107 F.R.D. 615, 620 (C.D. Cal. 1985).
The Schmidt Group satisfy the typicality requirement for the following reasons. Each Movant purchased or acquired P-Com securities during the Class Period and the Schmidt Complaint asserts claims on behalf of all Class members purchasing P-Com securities within the prescribed Class Period. Similarly, each member of The Schmidt Group and the Class, moreover, have been similarly damaged by defendants' violations of Sections 10(b) and 20(a) of the Exchange Act.
The presumption in favor of appointing The Schmidt Group as Lead Plaintiffs may be rebutted only upon proof "by a member of the purported plaintiffs' class" that the presumptively most adequate plaintiff --
(aa) will not fairly and adequately protect the interests of the class; or
(bb) is subject to unique defenses that render such plaintiff incapable of adequately representing the class.
Section 21D(a)(3)(B)(iii)(II); 15 U.S.C. §78u-4(a)(3)(B)(iii)(II).
There has been no showing by any other purported lead plaintiff that The Schmidt Group will not adequately protect the interests of the Class or that any of them is subject to any unique defense that renders them incapable of representing the Class. Accordingly, The Schmidt Group should be appointed Lead Plaintiffs in this matter.
Section 21D(a)(3)(B)(v), provides that "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). The Schmidt Group have selected and retained Stull, Stull & Brody to represent the Class as Lead Counsel.
The attorneys at Stull, Stull & Brody have extensive experience in the area of securities class action litigation and have successfully prosecuted countless securities class actions on behalf of injured investors. Consequently, this Court may be assured that the members of the Class will receive the highest quality of legal representation.
Rule 42(a) of the Federal Rules of Civil Procedure provides that:
When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
Currently pending in this District is a related class action lawsuit to the Schmidt Complaint which has been filed against essentially the same defendants. The Schmidt Group believe consolidation of that action with the Schmidt Complaint, the first filed complaint, is appropriate since both actions involve common questions of law and fact and allege the same or similar claims under the federal securities laws on behalf of the same or similar plaintiff class. In addition, both actions will involve similar issues regarding class certification, and will undoubtedly involve identical discovery. There is also no reason to believe that defendants would not support consolidation of these two actions, as well as any subsequently filed related actions. Accordingly, these actions should be consolidated in the interests of judicial economy and overall efficiency. As noted above, plaintiff Schmidt was the first to file a complaint in this matter, therefore, The Schmidt Group respectfully request consolidation for all purposes of all cases to be related to the Schmidt Complaint pursuant to Rule 42(a) of the Federal Rules of Civil Procedure. See also In re Equity Funding Corp. of Am. Sec. Litig., 416 F. Supp. 161, 176 (C.D. Cal. 1976) (noting that class action suits are ideally suited to consolidation since their unification expedites pretrial proceedings, reduces case duplication, avoids the contacting of parties and witnesses for inquiries in multiple proceedings, and minimizes the expenditure of time and money by all persons concerned).
Section 21D(a)(3)(B)(ii) of the Exchange Act addresses the issue of consolidation of similar actions filed under the PSLRA as follows:
If more than one action on behalf of a class asserting substantially the same claim or claims arising under this title has been filed, and any party has sought to consolidate those actions for pretrial purposes or for trial, the court shall not make the determination [of appointment of lead plaintiff under §21D(a)(3)(B)(i)] until after the decision on the motion to consolidate is rendered.
15 U.S.C. §78u-4(a)(3)(B)(ii).
Therefore, cases that are subject to Section 21D of the Exchange Act must undergo a two step process in determining lead plaintiff and lead counsel status when consolidation is an issue. First, the Court shall rule on the consolidation issue. Second, after any consolidation issues have been resolved, the Court may then rule on the lead plaintiff and lead counsel issues as soon as practicable. Id.
The Schmidt Group would urge the Court to resolve the consolidation of both of these actions as soon as possible so that the Court may then rule on the determination of lead plaintiff and lead counsel in this matter. Under Rule 42(a) of the Federal Rules of Civil Procedure, a timely determination pertaining to consolidation is reasonable and will ultimately benefit the class members' interest in the prompt prosecution of their claims.
For all the foregoing reasons, The Schmidt Group respectfully requests that this Court appoint The Schmidt Group as Lead Plaintiffs pursuant to Section 21D(a)(3)(B) of the 1934 Act, approve their choice of Stull, Stull & Brody as Lead Counsel to the Class pursuant to Section 21D(a)(3)(B)(v) of the 1934 Act and consolidate all related actions with the above captioned case pursuant to Rule 42(a) of the Federal Rules of Civil Procedure.
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Dated: ________ __, 1999 |
Michael D. Braun By: ___________________________ Jules Brody Attorneys for Plaintiff |
1 The "Schmidt Group" consists of Robert Schmidt the named plaintiff in the Schmidt action, together with an additional 54 purchasers of P-Com Inc. common stock which are listed in Exhibit A to the "Declaration of Timothy J. Burke in Support of the Schmidt Group's Motion for Appointment of Lead Plaintiffs and Lead Counsel and for Consolidation of All Related Actions".
2 The "Schmidt Group" consists of Robert Schmidt, the named plaintiff in the Schmidt action, together with an additional 54 purchasers of P-Com common stock which are listed in Exhibit A to the "Declaration of Timothy J. Burke in Support of The Schmidt Group's Motion for Appointment of Lead Plaintiffs and Lead Counsel and for Consolidation of All Related Actions" (the "Burke Decl.").
3 Section 21D(a)(3) states:
(A) Early notice to class members.
(i) In general. Not later than 20 days after the date on which the Complaint is filed, the plaintiff or plaintiffs shall cause to be published, in a widely circulated national business-oriented publication or wire service, a notice advising members of the purported class --
(I) of the pendency of the action, the claims asserted therein and the purported class period; and
(II) 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.
15 U.S.C. §78u-4(a)(3).
4 The Schmidt Group will also file, by separate motion, a motion for class certification pursuant to Federal Rule of Civil Procedure 23. The requirements for appointment of lead plaintiff and for class certification overlap to some extent, particularly regarding the qualifications of the lead plaintiff/class representative. A key distinction, however, is that the motion for appointment of lead plaintiff may not be challenged by defendants. Only another "member of the purported plaintiff class" may oppose the application to be appointed lead plaintiff. Section 21D(a)(3)(B)(iii)(II); 15 U.S.C. §78u-4(a)(3)(B)(iii)(II). See Greebel v. FTP Software, 939 F. Supp. 57, 60 (D. Mass. 1996) (the text of §21D "clearly indicates that this issue [of appointment of lead plaintiff] is one over which only potential plaintiffs may be heard"). Moreover, the court's inquiry in ruling on a motion for lead plaintiff is limited to the requirements of Section 21D and is a separate inquiry from class certification. As the court noted in Greebel, "Though neither the text of the PSLRA nor its legislative history explicitly describe the relationship between motions for lead plaintiff and motions for class certification, it seems clear that Congress recognized that these motions involved distinct inquiries. Section 21D(a)(3)(B) refers throughout its text to 'purported class members.' Congress implicitly understood, therefore, that lead plaintiff motions would be decided prior to consideration of certification issues." Id.
5 Defendants include: P-Com, Inc.; George P. Roberts; Pier G. Antontiucci; Michael J. Sophie; Kenneth E. Bean, III; John R. Wood; Gill Cogan; and John A. Hawkins.
6 A copy of the Notice is attached as Exhibit B to the Burke Decl.
7 See also, Chan v. Orthologic Corp., No. Civ. 96-1514 PHX RCB, slip op. at 13 (D. Ariz. Dec. 19, 1996) (plaintiffs from five separate actions collectively appoint lead plaintiff); In re Diamond Multimedia System, Inc. Sec Litig., C-96-2644-SBA, slip op. at 2-4 (N.D. Cal. Jan. 13, 1997), Order Re Appointment of Lead Plaintiff and Lead Counsel; Malin v. IVAC Corporation, et al., No. 96-1843-CIV-Moreno, slip op. at 4-8 (S.D. Fla. Nov. 1, 1996) (holding the plaintiff group with the largest number of shares is the most adequate plaintiff under the PSLRA); Powers v. Eichen, Civ. No. 96-1431-B(AJB), Order at 1 (S.D. Cal. Nov. 15, 1996) (nine individual plaintiffs collectively appointed lead plaintiff); In re Read-Rite Corp. Sec. Litig., No. C-97-20059-RMW, slip op. at 4-5 (N.D. Cal. May 23, 1997) (same); Zuckerman v. Foxmeyer Health Corp., No. 3:96-CV-2258-T, slip op. at 5 (N.D. Tex. Mar. 28, 1997) (eleven individual plaintiffs with the largest financial interest collectively appointed lead plaintiff); See Burke Decl., Exhibits C-H.
8 Pursuant to Section 21D(e)(1) of the 1934 Act, the calculated damages for plaintiffs holding their shares through the end of the class period is "the difference between the purchase or sale price paid or received . . . and the mean trading price of [P-Com stock] during the 90 day period beginning on the date on which the information correcting the misstatement or omission that is the basis for the action is disseminated to the market." 15 U.S.C. §78u-4(e)(1). For the purposes of calculating damages in the case at bar, the 90 day period began on September 11, and would end on December 12, 1998. The Schmidt Group have calculated a "mean" of 3.4326 which is an average trading price of P-Com stock beginning on September 11, 1998, up to and including December 12, 1998.
9 All "Complaint ¶__" references are to the Schmidt Complaint.
10 For purposes of class certification, the allegations of the complaint must be accepted as true. See, e.g., In re Ramtek Sec. Litig., Fed Sec. L. Rep (CCH) ¶95,814 (N.D. Cal. 1991) (citing Blackie v. Barrack, 524 F. 2d 891, 901 n. 17 (9th Cir. 1975), cert. denied, 429 U.S. 816 (1976)). Presumably, this same rule applies to motions for lead plaintiff, which are to be determined at the pleading stage and prior to class certification.
Source: File to epost from Stull Stull & Brody