United States District Court, S.D. New York
OPINION AND ORDER
PAUL OETKEN United States District Judge.
a putative shareholder class action against
Intellipharmaceutics International Inc. and its executives.
The crux of the plaintiffs' allegations is that
Intellipharmaceutics misled investors on the efficacy of one
of its drugs, and that plaintiffs' stock value dropped as
a result. For the reasons that follow, the Court (1)
consolidates the above three cases, (2) appoints David
Ducharme, Sam Snyder, and Julia Ann Snyder as lead
plaintiffs, and (3) approves the choice of Kahn Swick &
Foti, LLC, as lead counsel for the class.
groups of plaintiffs are vying to represent the class:
Shawn Shanawaz was the first plaintiff to file suit. However,
he has not formally moved to be appointed lead plaintiff, and
has not made a submission showing the total amount of losses
he allegedly suffered.
Braverman group: Guy Braverman was second to file suit.
He now moves, along with Eric Ludwig, to consolidate the
three cases and be appointed lead plaintiffs. They also move
to appoint Pomerantz LLP and The Rosen Law Firm as lead
counsel for the class. Together, Braverman and Ludwig assert
that they lost $51, 427.00 as a result of the alleged scheme.
(17-CV-5761 Dkt. No. 20-3.)
Ducharme group: David Ducharme was last to file suit. He
now moves, along with Sam Snyder and Julia Ann Snyder, to
consolidate the three cases and be appointed lead plaintiffs.
They also move to appoint Kahn Swick & Foti, LLC, as lead
counsel for the class. Together, Ducharme and the Snyders
assert that they lost $101, 484.97 as a result of the alleged
scheme. (17-CV-5761 Dkt. No. 17-2.)
the contenders has filed an opposition to their
competitors' motions. Defendants do not object to
consolidation, and take no position with respect to the
Court's appointment of lead plaintiff or the selection of
lead plaintiff's counsel.
Rule 42 of the Federal Rules of Civil Procedure, courts may
consolidate cases “involv[ing] a common question of law
or fact.” Fed.R.Civ.P. 42(a). “The trial court
has broad discretion to determine whether consolidation is
appropriate.” Johnson v. Celotex Corp., 899
F.2d 1281, 1284 (2d Cir. 1990).
the Private Securities Litigation Reform Act of 1995
(“PSLRA”), a court is to appoint as lead
plaintiff the member or members of the purported class who
are the “most capable of adequately representing the
interests of class members, ” referred to in the
statute as the “most adequate plaintiff.” 15
U.S.C. § 78u-4(a)(3)(B)(i). The PSLRA establishes a
rebuttable presumption that the “most adequate
plaintiff” is the “person or group of
persons” that (1) “has either filed the complaint
or made a motion in response to a notice”; (2)
“in the determination of the court, has the largest
financial interest in the relief sought by the class”;
and (3) “otherwise satisfies the requirements of Rule
23 of the Federal Rules of Civil Procedure.”
Id. § 78u-4(a)(3)(B)(iii)(I). This presumption
may be rebutted “only upon proof by a member of the
purported plaintiff class that the presumptively most
adequate plaintiff” (1) “will not fairly and
adequately protect the interest of the class”; or (2)
“is subject to unique defenses that render such
plaintiff incapable of adequately representing the
class.” Id. § 78u-4(a)(3)(B)(iii)(II).
Finally, as to the selection of lead counsel, the PSLRA
states that “[t]he most adequate plaintiff shall,
subject to the approval of the court, select and retain
counsel to represent the class.” Id. §
only major distinction between the three groups of plaintiffs
is the amount of loss: The Ducharme group lost $101, 484.97;
the Braverman group lost $51, 427.00; and Shanawaz has not
filed a statement listing his total losses. Since the
competing groups of plaintiffs are nearly identical in all
other respects, the amount of loss is dispositive. See
Peters v. Jinkosolar Holding Co., No. 11 Civ. 7133, 2012
WL 946875, at *5 (S.D.N.Y. Mar. 19, 2012) (“It is well
settled that financial loss, the last factor, is the most
important element of the test.” (quoting Varghese
v. China Shenghuo Pharm. Holdings, Inc., 589 F.Supp.2d
388, 395 (S.D.N.Y. 2008)) (alterations and quotation marks