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MALASKY v. IAC/INTERACTIVECORP.

December 20, 2004.

STEVEN MALASKY, individually and on behalf of others similarly situated, Plaintiffs,
v.
IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. PAUL SCHUMAN, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. BEVERLY STEWART, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. JACK G. YOPP, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. ROBERT CORWIN, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. SANFORD BERMAN, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. RICHARD A. STRAUSS, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. TODD SIMON, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. JAMES S. SARNO, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. ALAN D. SADOWSKY, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. PAUL LEE ASSOCIATES, LLC, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHORSOWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants. DAVID MILLER, individually and on behalf of others similarly situated, Plaintiffs, v. IAC/INTERACTIVECORP, BARRY DILLER, DARA KHOSROWSHAHI, JULIUS GENACHOWSKI, RICHARD N. BARTON and VICTOR A. KAUFMAN, Defendants.



The opinion of the court was delivered by: RICHARD HOLWELL, District Judge

MEMORANDUM OPINION AND ORDER

Presently before the Court are twelve securities fraud actions brought against certain officers and directors of IAC/Interactive Corp ("IAC") and IAC itself (collectively, "defendants") on behalf of a purported class of investors who claim to have sustained losses arising out of defendants' alleged misrepresentations in press releases circulated from March 19, 2003 until August 4, 2004. In the flurry of activity that ensued once publication of notice to prospective class members occurred, several parties filed and then withdrew motions to consolidate the actions, appoint themselves as lead plaintiff and designate their respective selections of representation as lead counsel pursuant to the procedures set forth by the Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4(a)(3)(B) ("PSLRA"). At this point, there remain three motions to consolidate filed by the Dempsey Group, the Gore Gamily and the Investor Group; and three motions to appoint lead plaintiff and lead counsel filed by the Dempsey Group, Edward Fein and the Investor Group.

For the reasons set forth below, the Court hereby consolidates the actions, appoints Fein and the Investor Group as co-lead plaintiffs, and designates Schatz & Nobel, P.C. and Wolf Haldenstein Adler Freeman & Herz LLP as co-lead counsel. The remaining motions are denied to the extent that they are inconsistent with this Opinion and Order.

  BACKGROUND

  The complaint in the first, above-captioned actions was filed by Steven Malasky on September 20, 2004. On that same day, Malasky's counsel, Lerach Coughlin Stoia Rudman & Robbins LLP, caused a notice to be published in Business Wire advising purchasers of IAC stock that (1) a class action against defendants had commenced in the Southern District of New York; (2) the class included all plaintiffs who had purchased IAC stock between March 19, 2003 and August 4, 2004; (3) the complaint asserted claims charging defendants with, inter alia, artificially inflating its stock price through alleged misrepresentations regarding the acquisitions of Expedia.com, Hotels.com and LendingTree.com; and (4) any class member wishing to serve as lead plaintiff or choose lead counsel was required to move the court within sixty days.

  On November 19, 2004, the Investor Group, the Gore Family, the Dempsey Group and the Cement Masons and Plasterers Retirement Trust ("Cement Masons Trust") separately filed motions to consolidate these actions and appoint the respective parties as lead plaintiff and that party's choice of counsel as lead counsel. Fein also filed a motion to appoint himself as lead plaintiff and his counsel, Schatz & Nobel, P.C., as lead counsel. On December 7, 2004, defendants joined in movants' request to consolidate the actions. On December 9, 2004, the Gore Family withdrew its motion to be appointed as lead plaintiff and approval of its selection of counsel, but did not withdraw its motion to consolidate the actions. On December 19, 2004, the Cement Masons Trust also withdrew its motion for consolidation, appointment as lead plaintiff and approval of its selection of lead counsel in light of communications with counsel for Fein.*fn1

  The remaining motions before the Court are (1) motions to consolidate the actions filed by the Dempsey Group, the Gore Family and Investor Group; and (2) motions to be appointed as lead plaintiff and for approval of lead counsel filed by the Dempsey Group, Fein and the Investor Group.

  DISCUSSION

  I. Consolidation of the Actions

  The Dempsey Group, the Gore Family and the Investor Group have moved to consolidate the twelve securities actions pursuant to Rule 42(a) of the Federal Rules of Civil Procedure. Defendants have joined these motions to consolidate. Rule 42(a) provides that a court may order all actions consolidated if they involve "common issues of law or fact." Fed.R.Civ.P. 42(a). In determining the propriety of consolidation, district courts have "broad discretion" although they generally espouse the view that "considerations of judicial economy favor consolidation." Ferrari v. Impath, Inc., 2004 WL 1637053, at *2 (S.D.N.Y. July 20, 2004) (citations and quotations omitted). Moreover, consolidation is particularly appropriate in the context of securities class actions if the complaints are "based on the same `public statements and reports'" and defendants will not be prejudiced. Id., 2004 WL 1637053, at *2 (quoting Mitchell v. Complete Mgmt., Inc., 1999 WL 728678, at *1 (Sept. 17, 1999)).

  Each of the actions implicates similar or overlapping claims under Section 10b-5, Section 10(a) and Section 20(a) of the Securities and Exchange Act of 1934. Although some of the complaints identify the class period as commencing on July 19, 2001 while the others identify the commencement date as March 19, 2003, all of the complaints rest on the same fundamental allegations that defendants released fraudulent press releases regarding their acquisitions of Expedia.com, Hotels.com and LendingTree.com to artificially inflate IAC's stock value. See In re Olsten Corp. Securities Litigation, 3 F. Supp. 2d 286, 292-93 (E.D.N.Y. 1998) (consolidating cases despite slight differences in claims and alleged class periods). Accordingly, the actions involve "common issues of law and fact" and are hereby consolidated.

  II. Appointment of Lead Plaintiff

  A. The Notice and Filing Requirements Under the PSLRA

  The Dempsey Group, Fein and the Investor Group have independently moved to be appointed as lead plaintiff. The PSLRA sets forth the procedures governing the appointment of lead plaintiff in "each action arising under the [Securities and Exchange Act of 1934] that is brought as a plaintiff class action pursuant to the Federal Rules of Civil Procedure." 15 U.S.C. § 78u-4(a)(1). As an initial matter, the PSLRA requires the plaintiff in the initial action to cause a notice to be published in a national, business-oriented publication within 20 days of filing the complaint. 15 U.S.C. § 78u-4(a)(3)(A)(i). The notice must inform members of the purported class of (1) the details and pendency of the action; and (2) their right to seek appointment as lead plaintiff within 60 days after the date on which notice is published. Id. Within 90 days after the publication of such notice, a court shall consider any motion made by any class member, regardless of whether they are individually named as plaintiffs in any of the actions, and shall appoint the "most adequate plaintiff" as lead plaintiff. 15 ...


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