United States District Court, D. Colorado
MIKE MARICONDA, individually and on behalf of all others similarly situated, Plaintiff,
FARMLAND PARTNERS INC., PAUL A. PITTMAN, and LUCA FABBRI, Defendants.
ORDER ON APPOINTMENT OF LEAD PLAINTIFF AND
Y. Wang United States Magistrate Judge.
matter comes before the court on two related motions: (1) The
Turner Insurance Agency, Inc. and Cecilia Turner's
(collectively, the “Turner Family”) Motion for
Appointment as Lead Plaintiff and for Approval of Counsel
(“the Turner Motion”) [#30, filed November 15,
2018]; and (2) Albert G. Driver Jr., Annette
Driver Forry, and Douglas Barber's (collectively
“the Farmland Investor Group”) Motion of the
Farmland Investor Group to Consolidate Cases, and for
Appointment Of Lead Plaintiff and Lead and Liaisson [sic]
Counsel (“the Farmland Investor Group Motion”)
[#33, filed November 27, 2018].
undersigned Magistrate Judge considers the motions pursuant
to 28 U.S.C. § 636(b), the Order of Reference dated
November 14, 2018 [#29], and the Memoranda dated November 16
[#31] and November 27 [#36]. This court concludes that oral
argument would not materially assist in the resolution of
these matters. Upon careful review of the motions and
associated briefing, the applicable case law, and the entire
case file, this court GRANTS the Turner
Family Motion in part, appointing the Turner Family as Lead
Plaintiff and their counsel, Bernstein Liebhard LLP, as Lead
Counsel with Berens Law LLC serving as Liaison Counsel. The
Turner Motion is DENIED AS MOOT to the
extent it seeks consolidation with the now-dismissed
Kachmar Action, and the Farmland Investor Group
Motion is DENIED.
a class action alleging violations of Sections 10(b) and
20(a) the 1934 Securities Exchange Act and Rule 10b-5,
codified at 17 C.F.R. § 240.10b-5, brought pursuant to
the Private Securities Litigation Reform Act
(“PSLRA”), codified at 15 U.S.C. § 78u-4.
See [#1]. The present case, styled Mariconda v.
Farmland Partners Inc. et al., 18-cv-2104-DME-NYW, was
filed on August 17, 2018, shortly after a related case,
Kachmar v. Farmland Partners et al.,
18-cv-01771-CMA-KLM (“the Kachmar
Action”), was filed on July 11, 2018. Following the
November 13, 2018 voluntary dismissal of the Kachmar
Action, this action proceeds as a stand-alone case and the
parties seeking appointment as Lead Plaintiff have refiled
their motions in this court.
action alleges that the Defendants, Farmland Partners Inc.
(“Farmland Partners”), Paul A. Pittman
(“Mr. Pittman”), and Luca Fabbri (“Mr.
Fabbri”), made materially false and misleading
statements regarding the extent and nature of Farmland
Partners's related party transactions in making quarterly
and yearly filings with the Securities and Exchange
Commission. [#1 at ¶¶ 14- 28]. The first alleged
violation occurred with Farmland Partner's 2015 10-K,
filed during aftermarket hours on March 15, 2016, and
continued until July 11, 2018 when analyst Rota
Fortunae published an exposé alleging that Mr.
Pittman and Farmland Partners were systematically inflating
Farmland Partners's revenue by “making loans to
related-party tenants who roundtrip the cash back to
[Farmland Partners] as rent and interest revenue.”
[Id. at ¶¶ 14- 15, 26]. This caused a
precipitous drop in the stock price. [Id. at ¶
27]. This action and the Kachmar Action followed
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 soon as practicable after the court has ruled on a motion
to consolidate related actions. Id. §
assigning a Lead Plaintiff, the 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 class.” Id. §
78u-4(3)(B)(v). Accordingly, it is within the court's
discretion to approve appropriate Lead Counsel. See In re
Oppenheimer Rochester Funds Grp. Sec. Litig., No.
09-MD-02063JLKKMT, 2009 WL 4016635, at *2-3 (D. Colo. Nov.
Appointment of the Lead Plaintiff
court begins by examining which party satisfies the three
requirements in § 78u-4(a)(3)(B)(iii)(I)(aa)-(cc) and is
entitled to presumptive Lead Plaintiff status. Those
requirements are: (1) filing timely a motion for such
appointment, (2) having the largest financial interest in the
relief sought, and (3) otherwise satisfying the two relevant
prongs of Rule 23. The court then considers whether the
opposing party has adequately rebutted that presumption. The
court finds that the Turner Family is entitled to presumption
of Lead Plaintiff status and that the Farmland Investor Group
has not adequately rebutted that presumption. Accordingly,
the Turner Family is appointed Lead Plaintiff.
PSLRA requires that within twenty days of filing a complaint,
the plaintiff(s) must circulate a notice advising members of
the purported plaintiff class “of the pendency of the
action, the claims asserted therein, and the purported class
period; and 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.” § 78u-4(a)(3)(A)(i). This early
notice must be published in “a widely circulated
national business-oriented publication or wire
service.” Id. The PSLRA also provides that
when, as here, there are multiple actions filed asserting the
same or substantially the same claims, then “only the
plaintiff or plaintiffs in the first filed action shall be
required to cause notice to be published in accordance with
[the preceding] clause.” § 78u-4(a)(3)(A)(ii). The
Kachmar Action was filed on July 11, 2018, and
therefore the Kachmar plaintiff had until July 31 to
circulate an Early Notice. Pomerantz LLP, Mr. Kachmar's
counsel, published an Early Notice [#30-1 at 21] on July 11,
2018 in the Globe Newswire, “a widely circulated
national business-oriented wire service.” In re
Spectranetics Corp. Sec. Litig., No.
08-cv-02048-REB-KLM, 2009 WL 1663953, at *3 (D. Colo. June
15, 2009). Mr. Mariconda filed this action approximately a
month later, and moved to consolidate this action with the
Kachmar Action. No. separate Early Notice was
published or required in light of the Kachmar
Action. 15 U.S.C. § 78u-4(a)(3)(A)(ii).
court agrees that the Globe Newswire is an adequate
“widely circulated national business-oriented
publication or wire service” under the PSLRA early
notice provision. Additionally, upon review of the Notice,
the court finds that it meets the requirements of §
78u-4(a)(3)(A)(i). Therefore, potential Lead Plaintiffs had
sixty days from July 11, until September 10, to file their
Motions for Appointment. Both the Turner Motion and the
Farmland Investor Motion were filed on September 10, within
the sixty-day limit triggered by the Early Notice. Thus, both
Motions are properly before the court and both parties have
satisfied the initial requirement of filing a timely motion
for appointment under § 78u-4(a)(3)(B)(iii)(I)(aa).
Financial Interest. Neither the Turner Family
nor Farmland Investor Group dispute the generally accepted
proposition that a group of persons may aggregate their
losses in calculating a plaintiff's financial interest in
the litigation, subject to certain practical limitations not
implicated here. In re Ribozyme Pharm., Inc. Sec.
Litig., 192 F.R.D. 656, 659 (D. Colo. 2000); see
also Id. (analyzing caselaw rejecting aggregation among
too large or too legally ...