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In Re: Glg Life Tech Corporation Securities Litigation

November 9, 2012

IN RE: GLG LIFE TECH CORPORATION SECURITIES LITIGATION


The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

OPINION AND ORDER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

OPINION AND ORDER

11 Civ. 09150 (KBF) (GWG)

In re: GLG LIFE TECH CORPORATION SECURITIES LITIGATION

GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

Plaintiffs in this matter have filed a complaint alleging that the defendants -- GLG Life Tech Corporation ("GLG"), Luke Zhang, and Brian R. Meadows -- violated federal securities laws. The plaintiffs successfully served GLG and Meadows, both of whom have appeared by counsel and responded to the complaint. The plaintiffs now move for leave to serve Zhang by alternative means pursuant to Rule 4(f)(3) of the Federal Rules of Civil Procedure. For the reasons stated below, this motion is granted.

I. BACKGROUND

Defendant Zhang is the Chairman and Chief Executive Officer of GLG and is a citizen of Canada.*fn1 Defendant Meadows is the Chief Financial Officer of GLG.*fn2 GLG was served on February 17, 2012, through its registered agent in the United States.*fn3 Meadows was served at GLG's headquarters in Vancouver, Canada, on March 2, 2012, pursuant to the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents, Convention done at the Hague November 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 ("the Hague Convention"). *fn4

On the same day, the process server also attempted to serve Zhang at GLG's headquarters in Vancouver but was told "that Luke Zhang works permanently in China and has for years." See Certificate, dated Mar. 2, 2012 (annexed as Ex. B to Gonnello 1st Decl.). Plaintiffs' counsel then inquired with the process server about serving Zhang in China. See Gonnello 2d Decl. ¶ 2. The process server stated that Zhang should be served at a residential address, and informed counsel that finding Zhang's home address in China would cost at least $5,000, "with no guarantee of success." Id. ¶ 6. Counsel chose to conduct a search by other means, hoping to "minimize costs to the class." Id. ¶ 8. This search included "(1) Google searches; (2) Bloomberg law searches; (3) Accurint.com searches; and (4) any other methods [members of his firm] could think of." Id. Counsel also searched the Securities and Exchange Commission's EDGAR System, as well as the Canadian Securities Administrator's SEDAR system. Id.

On March 6, 2012, attorneys from the law firm of DLA Piper filed notices of appearance on behalf of GLG. On March 9, 2012, plaintiffs' counsel contacted GLG's attorneys by phone to seek a waiver of service of process from Zhang, and sent them a waiver of service document.

See Notice of Lawsuit and Request to Waive Service of Summons, dated Mar. 9, 2012 (annexed as Ex. C to Gonnello 1st Decl.), at 2. A signed waiver form was never returned, however. See Letter from Richard W. Gonnello to Andrew Escobar, dated Apr. 6, 2012 (annexed as Ex. D to Gonnello 1st Decl.), at 2. On April 6, 2012, having had no success in his search for Zhang's residential address, plaintiffs' counsel requested Zhang's residential address from GLG's attorneys. See Gonnello 2d Decl. ¶ 9; Letter from Richard W. Gonnello to Andrew Escobar, dated Apr. 6, 2012 (annexed as Ex. D to Gonnello 1st Decl.). He received no response. See Gonnello 2d Decl. ¶ 9. On June 25, 2012, GLG and Meadows filed a motion to dismiss. See Defendant GLG Life Tech Corporation and Brian Meadows' Notice of Motion to Dismiss, filed June 25, 2012 (Docket # 31).

On August 9, 2012, Lead Plaintiffs filed the instant motion for leave to serve process on Zhang by alternative means.*fn5 The motion papers suggest three potential methods of alternative service: (1) service on GLG's counsel; (2) service on GLG's registered agent in Washington; or (3) service on Zhang by email, assuming the existing stay of discovery is lifted and plaintiffs are able to obtain Zhang's email address through discovery. Pl. Mem. at 8--9.

On August 23, 2012, four days before a response to the motion was due, Andrew Escobar, a lawyer for GLG and Meadows, for the first time offered to provide plaintiffs' counsel with Zhang's residential address in China. Gonnello 2d Decl. ΒΆ 11. Plaintiffs' counsel declined this offer. Id. When it filed its brief opposing the motion, GLG included the purported address in the text of its brief. See Defendant GLG Life Tech Corporation's Memorandum of Law in Opposition to Lead Plaintiffs' Motion for Leave to Serve Process on Defendant Luke Zhang by Alternative Means, filed Aug. 27, 2012 (Docket # 43) ("Def. Mem."), at 4. GLG does not state the source of this ...


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