Brian L. Grant et al. v. Broadmark Realty Capital Inc. et al.

• Court: District Court, W.D. Washington
• Decided: October 15, 2025
• Docket: 2:25-cv-01013
• Status: Unknown

Opinion

1 2 3 4

5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 BRIAN L. GRANT et al., CASE NO. 2:25-cv-01013-LK 11 Plaintiffs, ORDER APPOINTING LEAD 12 v. PLAINTIFF AND LEAD COUNSEL 13 BROADMARK REALTY CAPITAL INC. et al., 14 Defendants. 15

16 This matter comes before the Court on Plaintiff Brian Grant’s motion for an order 17 appointing him as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 18 (“PSLRA”), 15 U.S.C. § 78u-4, and approving his selection of Robbins Geller Rudman & Dowd 19 LLP as lead counsel and Keller Rohrback L.L.P. as liaison counsel. Dkt. No. 27. Defendants filed 20 a notice stating that they do not oppose the motion. Dkt. No. 29. For the reasons set forth below, 21 the Court grants the motion. 22 I. BACKGROUND 23 On May 28, 2025, Plaintiff Brian Grant, individually and as trustee of the Brian L. Grant 24 1 Living Trust, and MCN Holdings LLC (collectively, “Dr. Grant”), filed this action on behalf of 2 himself and a putative class of all holders of common stock of Broadmark Realty Capital Inc. as 3 of the record date of the May 2023 merger of Broadmark and Ready Capital Corporation. Dkt. No. 4 1 at 3. The complaint asserts claims under Section 14(a) of the Securities Exchange Act of 1934

5 (“Exchange Act”), 15 U.S.C. § 78n(a), SEC Rule 14a-9, 17 C.F.R. § 240.14a-9, and Section 20(a) 6 of the Exchange Act, 15 U.S.C. § 78t(a), against Broadmark and certain of its former officers and 7 directors, Ready Capital and certain of its current and former executive officers and directors, and 8 Ready Capital’s affiliated investment manager. Id. 9 II. DISCUSSION 10 A. Legal Standard 11 In securities class actions under the PSLRA, 15 U.S.C. §§ 77a–77aa, the Court must 12 appoint a lead plaintiff to “monitor, manage and control the litigation” who “owes a fiduciary duty 13 to all members of the proposed class.” In re Network Assocs., Inc., Sec. Litig., 76 F. Supp. 2d 1017, 14 1020, 1032 (N.D. Cal. 1999). The lead plaintiff should be the class member “most capable of

15 adequately representing the interests of class members.” 15 U.S.C. § 77z-1(a)(3)(B)(i). To 16 determine an appropriate plaintiff to serve this role, the PSLRA sets up a three step process: 17 (1) public notice of the pending lawsuit, (2) identification of a “presumptively most adequate 18 plaintiff,” and (3) an opportunity for other putative class members to rebut the appointment of the 19 presumptive lead plaintiff. In re Cavanaugh, 306 F.3d 726, 729–30 (9th Cir. 2002); see also 15 20 U.S.C.A. § 78u-4(a)(3)(A)–(B). 21 To satisfy the public notice requirement, within 20 days of filing the complaint, the plaintiff 22 or plaintiffs “shall cause to be published, in a widely circulated national business-oriented 23 publication or wire service, a notice advising members of the purported plaintiff class” (1) of “the

24 pendency of the action, the claims asserted therein, and the purported class period”; and (2) “that, 1 not later than 60 days after the date on which the notice is published, any member of the purported 2 class may move the court to serve as lead plaintiff of the purported class.” 15 U.S.C. § 77z- 3 1(a)(3)(A)(i). “As the first step in the process, proper notice is vital and a court has an independent 4 duty to scrutinize published notice for compliance with the PSLRA requirements.” Kanugonda v.

5 Funko, Inc., No. C18-812RSM, 2018 WL 4963231, at *2 (W.D. Wash. Oct. 15, 2018) (citation 6 modified); see also Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015) (the district court has a 7 duty to look after the interests of absent class members). 8 Not later than 90 days after this notice is published, “the court shall consider any motion 9 made by a purported class member in response to the notice” and “shall appoint as lead plaintiff 10 the member or members of the purported plaintiff class that the court determines to be most capable 11 of adequately representing the interests of class members,” referred to in the statute as the “most 12 adequate plaintiff.” 15 U.S.C. § 77z-1(a)(3)(B)(i). The statute contains a “rebuttable presumption” 13 that the most adequate plaintiff is the person who “has either filed the complaint or made a motion 14 in response to a notice under subparagraph (A)(i); . . . has the largest financial interest in the relief

15 sought by the class; and . . . otherwise satisfies the requirements of Rule 23 of the Federal Rules 16 of Civil Procedure.” Id. § 77z-1(a)(3)(B)(iii)(I). In addition, the most adequate plaintiff “shall, 17 subject to the approval of the court, select and retain counsel to represent the class.” Id. § 77z- 18 1(a)(3)(B)(v). 19 B. The Court Appoints Brian Grant as Lead Plaintiff 20 Dr. Grant requests to be appointed as lead plaintiff because he “(1) timely filed this motion; 21 (2) has the largest financial interest in the outcome of the Merger proxy claims that are the subject 22 of this litigation; and (3) will typically and adequately represent the class’s interests.” Dkt. No. 27 23 at 2 (citing 15 U.S.C. § 78u-4(a)(3)(B)(iii)).

24 The Court first finds that timely notice was provided: on May 28, 2025, the same day the 1 complaint was filed, Dkt. No. 1, notice of the pendency of this action was published in Globe 2 Newswire, a national business-oriented wire service. Dkt. No. 28 at 2.1 The published notice 3 advised putative class members of “the pendency of the action, the claims asserted therein, and the 4 purported class period,” and “that, not later than 60 days after the date on which the notice is

5 published, any member of the purported class may move the court to serve as lead plaintiff of the 6 purported class.” 15 U.S.C. § 77z-1(a)(3)(A)(i); see also Dkt. No. 28-1 at 2–4 (noting that holders 7 of Broadmark common stock had until July 28, 2025 to seek appointment as lead plaintiff). In 8 addition, Dr. Grant timely filed this motion within 60 days of the notice. See 15 U.S.C. § 77z- 9 1(a)(3)(B)(i); Dkt. No. 27. 10 It also appears that Dr. Grant is the most adequate plaintiff. At the close of business on the 11 record date, he held 1,563,376 shares of Broadmark Realty Capital Inc. common stock in his own 12 name, through the Brian L. Grant Living Trust, and through MCN Holdings LLC—his family’s 13 “investment vehicle” for which he serves as the General Manager. See Dkt. No. 1 at 30–33; Dkt. 14 No. 28-2 at 2; see also In re Outerwall Inc. Stockholder Litig., No. C16-1275JLR, 2017 WL

15 881382, at *4 (W.D. Wash. Mar. 6, 2017) (utilizing shares held to determine largest financial 16 interest). Dr. Grant also alleges that he suffered financial losses due to Defendants’ alleged 17 misconduct. Dkt. No. 28-2 at 2. 18 Turning to the Rule 23 requirements, “[o]n a motion to appoint a lead plaintiff, the court 19 focuses solely on the typicality and adequacy requirements.” In re Outerwall Inc. Stockholder 20 Litig., 2017 WL 881382, at *4; see also In re Cavanaugh, 306 F.3d at 730 n.5. To establish 21 typicality, plaintiffs must show that “the claims or defenses of the representative parties are typical 22 1 Plaintiff’s exhibit—which is a printed copy of what appears online—appears to be missing some text. Compare Dkt. 23 No. 28-1, with https://www.globenewswire.com/news-release/2025/05/28/3090019/0/en/INVESTOR-ALERT- Robbins-Geller-Rudman-Dowd-LLP-Files-Class-Action-Lawsuit-Against-Broadmark-Realty-Capital-Inc-Ready- 24 Capital-Corporation-Others-and-Announces-Opportunity-for-Investo.html (last visited September 11, 2025). Even so, the filed copy includes the required information. 1 of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “The test of typicality is whether 2 other members have the same or similar injury, whether the action is based on conduct which is 3 not unique to the named plaintiffs, and whether other class members have been injured by the same 4 course of conduct.” A. B. v. Hawaii State Dep’t of Educ., 30 F.4th 828, 839 (9th Cir. 2022) (quoting

5 Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)) (citation modified).2 Dr. Grants 6 argues, and the Court finds, that his claims are typical of those of the class because, “just like all 7 other class members,” he: (1) held Broadmark Realty Capital Inc. common stock on the record 8 date; (2) was adversely affected by the false and misleading statements identified in the complaint; 9 and (3) suffered damages as a result. Dkt. No. 27 at 5. “The adequacy inquiry is addressed by 10 answering two questions: (1) do the named plaintiffs and their counsel have any conflicts of 11 interest with other class members and (2) will the named plaintiffs and their counsel prosecute the 12 action vigorously on behalf of the class?” Kim v. Allison, 87 F.4th 994, 1000 (9th Cir. 2023) 13 (internal quotation marks and citation omitted). Dr. Grant contends that he is an adequate 14 representative of the class “because his interests are aligned with the putative class,” he “retained

15 competent and experienced counsel to investigate the claims at issue, file the initial complaint in 16 this matter, and litigate this case,” and his “substantial financial stake provides the requisite interest 17 to ensure vigorous advocacy.” Dkt. No. 27 at 5. Again, the Court agrees with Dr. Grant. 18 Finally, no one has opposed this motion, and no other candidate has come forward or 19 rebutted the presumption that Dr. Grant is the most adequate plaintiff. See 15 U.S.C. § 77z- 20 1(a)(3)(B)(iii)(I). Accordingly, the Court finds that Dr. Grant is the most adequate plaintiff, and it 21 appoints him lead plaintiff. 22 2 Typicality “tend[s] to merge” with the commonality requirement of Rule 23, Gen. Tel. Co. of Sw. v. Falcon, 457 23 U.S. 147, 157 n.13, (1982), which requires plaintiffs seeking class certification to show that their claims “depend upon a common contention” that “is capable of classwide resolution—which means that determination of its truth or falsity 24 will resolve an issue that is central to the validity of each one of the claims in one stroke,” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). 1 C. The Court Appoints Lead Counsel and Liaison Counsel 2 The most adequate plaintiff “shall, subject to the approval of the court, select and retain 3 counsel to represent the class.” 15 U.S.C. § 77z-1(a)(3)(B)(v). Dr. Grant states that his “selection 4 of Robbins Geller Rudman & Dowd LLP to serve as lead counsel should be approved because the

5 Firm possesses extensive experience prosecuting securities class actions and will adequately 6 represent the interests of all class members.” Dkt. No. 27 at 2; see also id. at 5–6 (detailing the 7 firm’s experience with complex securities issues and noting that additional information is available 8 at https://www.rgrdlaw.com). Dr. Grant also requests that the Court approve Keller Rohrback, his 9 choice of liaison counsel, because the firm “has the experience, financial resources, and personnel 10 to successfully pursue large scale cases such as this, and appears regularly in both federal and state 11 courts within Washington.” Id. at 6–7 (noting that additional information is available at 12 www.krcomplexlit.com). 13 The information submitted indicates that Robbins Geller Rudman & Dowd LLP is a 200- 14 attorney nationwide firm that has litigated numerous complex securities cases, as well as a variety

15 of other complex class actions. See, e.g., id. at 6; Dkt. No. 28-1 at 4. Keller Rohrback also has 16 notable experience as lead or co-lead counsel in large and significant securities class actions and 17 other complex class actions. See Dkt. No. 27 at 7; see also Frias v. Dendreon Corp., 835 F. Supp. 18 2d 1067, 1076 (W.D. Wash. 2011) (appointing Keller Rohrback as liaison counsel). No objections 19 have been filed concerning either law firm’s qualifications to serve in their respective capacities. 20 Accordingly, the Court appoints Robbins Geller Rudman & Dowd LLP as lead counsel, and Keller 21 Rohrback as liaison counsel in accord with Dr. Grant’s request.3 22 3 Plaintiff’s proposed order includes a request that this case shall constitute the “master file for the action” and “[a]ll 23 securities class actions on behalf of holder[s] of Broadmark Realty Capital Inc. securities subsequently filed in, or transferred to, this District shall be consolidated into this action.” Dkt. No. 27-1 at 2. The Court does not consider this 24 request because it was not in the motion itself, and it would be premature to order that other unidentified cases be consolidated into this one. 1 III. CONCLUSION 2 For the foregoing reasons, the Court GRANTS Dr. Grant’s motion for appointment of lead 3 plaintiff and counsel. Dkt. No. 27. The Court hereby APPOINTS Brian Grant as lead Plaintiff, 4 Robbins Geller Rudman & Dowd LLP as Plaintiffs’ lead counsel, and Keller Rohrback L.L.P. as

5 Plaintiffs’ liaison counsel. 6 Dated this 15th day of September, 2025. 7 A 8 Lauren King United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23