United States District Court, D. Colorado
GEORGE ASSAD, individually and on behalf of all others similarly situated, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants. JEWELTEX MANUFACTURING INC. RETIREMENT PLAN, on behalf of itself and all others similarly situated, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants. ROYCE BUSSEY, individually and on behalf of all others similarly situated, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants. DANE GUSSIN, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants. STUART ZAND, individually and on behalf of all others similarly situated, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants. Matthew Machion, individually and on behalf of all others similarly situated, Plaintiff,
DIGITALGLOBE, INC., et al., Defendants.
Y. WANG. MAGISTRATE JUDGE
matter is before the court on two related motions:
Plaintiff Matthew Machion's (“Mr. Machion”)
Motion for Appointment as Lead Plaintiff and Approval of Lead
Plaintiff's Selection of Lead Counsel (the “Machion
Motion”) [#38, filed July 24, 2017]; and
Plaintiff Dane Gussin's (“Mr. Gussin”) Motion
to be Appointed Lead Plaintiff and to Approve Proposed Lead
Plaintiff's Choice of Counsel (the “Gussin
Motion”) [#40, filed July 24, 2017].
undersigned considers the motions pursuant to 28 U.S.C.
§ 636(b), the Order of Reference dated July 7, 2017
[#26], and the Memorandum dated August 1, 2017 [#46]. This
court concludes that oral argument will not materially assist
in the resolution of these matters. Accordingly, upon careful
review of the motions and associated briefing, the applicable
case law, and the entire case file, this court GRANTS the
Gussin Motion and DENIES AS MOOT the Machion Motion for the
reasons stated herein.
consolidated action (six actions in total) arises out of the
proposed merger of Defendant DigitalGlobe, Inc.
(“DigitalGlobe”) and a subsidiary of MacDonald,
Dettwiler and Associates Ltd. (“MDA”).
See [#1 at ¶¶ 1-2; #25 at
All six actions assert claims under the Securities Exchange
Act of 1934, 15 U.S.C. § 78a et seq., and
Securities and Exchange Commission (“SEC”) Rule
14a-9, 17 C.F.R. § 240.14a, challenging the proposed
merger of DigitalGlobe and MDA. See [#1 at
¶¶ 2-5; id. at 16-18; #25 at 2-3; #34 at
3-5]. Plaintiffs allege that the F-4 registration statement
and amended registration statement are materially misleading
in that each omits material facts that would have better
informed DigitalGlobe's shareholders of the financial
allure of the proposed merger. See generally [#1].
Specifically, Plaintiffs take issue with the methods
DigitalGlobe used in rendering its financial projections for
fiscal years 2017-21 and its omission of explanations for
those analyses, and the alleged omissions regarding conflicts
of interest by the financial advisors that reviewed the
merger and DigitalGlobe's board members. See
generally [id.; #34].
3, 2017, Plaintiff George Assad (“Mr. Assad”)
filed his putative class action complaint in this District.
[#1]. Between May 3 and July 12, 2017, the remaining five
consolidated actions were filed in or transferred to this
District. See [#25; #44]. On June 14, 2017,
Mr. Gussin filed a Motion for Preliminary Injunction, seeking
to preliminary enjoin a shareholder vote by DigitalGlobe
related to the proposed merger scheduled for July 27, 2017.
Gussin v. DigitalGlobe, Inc., , No.
17-cv-01190-PAB-NYW, [#19]. On July 5, 2017, Plaintiff Stuart
Zand (“Mr. Zand”) filed a similar Motion for
Preliminary Injunction. Zand, individually and on behalf
of all others similarly situated v. DigitalGlobe, Inc.,
, Case No. 17-cv-01570-PAB-NYW, [#14].
6, 2017, Judge Brimmer granted DigitalGlobe's Motion to
Consolidate the five similar actions then pending against
DigitalGlobe in this District. [#25]. Upon consolidation,
Judge Brimmer referred this matter to the undersigned for all
non-dispositive matters. [#26]. Pursuant to the Parties'
requests, the undersigned vacated all response and
pre-scheduling deadlines in all of the consolidated matters,
to be reset at the August 25, 2017 Status Conference.
See [#33; #51]. Judge Brimmer held a Motions Hearing
on the pending Motions for Preliminary Injunction on July 14,
2017, and denied the motions on July 21, 2017. See
[#36; #34]. Mr. Machion then filed his putative class action
complaint against DigitalGlobe on July 12, 2017, and Judge
Brimmer later consolidated Mr. Machion's action with the
other five consolidated actions. See [#44].
Machion and Mr. Gussin then filed their respective motions
for appointment of lead plaintiff and lead counsel on July
24, 2017. See [#38; #40]. However, on August 14,
2017, Mr. Machion withdrew his motion. [#53]. Accordingly,
this court now considers only Mr. Gussin's motion.
Private Securities Litigation Reform Act
enacted the PSLRA, 15 U.S.C. § 78u-4, in 1995 as
“a check against abusive [securities fraud] litigation
by private parties” against companies and individuals
whose conduct conformed to the law. Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 313
(2007); accord City of Philadelphia v. Fleming Companies,
Inc., 264 F.3d 1245, 1258 (10th Cir. 2001) (“The
PSLRA thus mandates a more stringent pleading standard for
securities fraud actions in general, and for scienter
allegations in particular.”). The PSLRA sets forth
“a procedure that governs the appointment of lead
plaintiffs in ‘each private action arising under [the
Exchange Act] that is brought as a plaintiff class action
pursuant to the Federal Rules of Civil Procedure.'”
In re Ribozyme Pharm., Inc. Sec. Litig., 192 F.R.D.
656, 657 (D. Colo. 2000) (quoting 15 U.S.C. §
78u-4(a)(1)). Any member of the purported class may move the
court to serve as lead plaintiff, but must do so within sixty
(60) days of the published notice of the potential class
action. 15 U.S.C. § 78u-4(3)(A)(i)(II). The
court must then appoint lead plaintiff no later than ninety
(90) days after the date the notice is published, or, as
relevant here, as soon as practicable after the court has
ruled on a motion to consolidate related actions.
Id. § 78u-4(3)(B)(i)-(ii).
assigning a lead plaintiff, “[t]he PSLRA establishes a
rebuttable presumption that the ‘most adequate
plaintiff' is a person or group of persons that (1)
either filed the complaint or made a motion in response to a
notice, (2) has the largest financial interest in the relief
sought, and (3) otherwise satisfies the requirements of
Fed.R.Civ.P. 23 .” Medina v. Clovis Oncology,
Inc., No. 15-CV-2546-RM-MEH, 2016 WL 660133, at *3 (D.
Colo. Feb. 18, 2016) (citing 15 U.S.C. §
78u-4(a)(3)(B)(iii)(I)(aa)-(cc)). “As for the
requirement that the lead plaintiff otherwise satisfy the
requirements of Rule 23, only two of the four requirements of
Rule 23(a)-typicality and adequacy-impact the analysis of the
lead plaintiff issue.” Wolfe v. AspenBio Pharma,
Inc., 275 F.R.D. 625, 627-28 (D. Colo. 2011). The PSLRA
also provides that the lead plaintiff “shall, subject
to the approval of the court, select and retain counsel to
represent the ...