1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ZACHARY SALZMAN, Individually and Case No.: 23-cv-01216-GPC-WVG on Behalf of All Others Similarly 12 Situated, ORDER APPOINTING LEAD 13 PLAINTIFF AND APPROVING Plaintiff, LEAD PLAINTIFF’S SELECTION 14 v. OF COUNSEL 15 IMMUNITYBIO, INC., RICHARD [ECF Nos. 17–18] 16 ADCOCK, DAVID C. SACHS, and PATRICK SOON-SHIONG, 17 Defendant. 18
19 Pending before the Court is the matter of appointing lead plaintiff in this putative 20 securities fraud class action brought on behalf “of all persons and entities other than 21 Defendants that purchased or otherwise acquired ImmunityBio securities between May 22 23, 2022 and May 10, 2023 . . . .” ECF No. 1 at 2.1 On August 29, 2023, movants Dipak 23 T. Patel (“Patel”), Yuchang Chen (“Chen”), Timothy L. Van Eman (“Eman”), and 24 25
26 1 Page citations refer to CM/ECF pagination. 27 1 Mitchell Brock (“Brock”), each filed a motion to be appointed lead plaintiff pursuant to 2 15 U.S.C. §78u-4(a)(3). ECF Nos. 15–18. Patel alleges the largest loss in connection 3 with his purchases of ImmunityBio securities during the class period: $288,056. ECF 4 Nos. 18-3, 28. Chen and Eman have since withdrawn their motions, ECF No. 27–28, and 5 Brock has filed a notice of non-opposition in recognition of Patel’s larger financial 6 interest, ECF No. 28.2 Accordingly, Patel’s motion proceeds unopposed. 7 DISCUSSION 8 Before the enactment of the Private Securities Litigation Reform Act (“PSLRA”), 9 the first plaintiff to file suit was usually appointed lead plaintiff. See Mersho v. United 10 States Dist. Court, 6 F.4th 891, 898 (9th Cir. 2021). Now, under the PSLRA, the Court 11 appoints lead plaintiffs through a “three-step process.” Id. The first step requires 12 publication of the action so that purported class members can move for lead plaintiff 13 appointment. Id. at 899 (citing 15 U.S.C. § 78u-4(a)(3)(A)(i)(I)-(II)). The second step 14 involves identifying the “most adequate” plaintiff; the movant with the largest alleged 15 loss becomes the presumptive lead plaintiff if they can make “a prima facie showing of 16 adequacy and typicality.” Id. The third step allows for other members of the purported 17 class to rebut that presumption. Id. Here, the first step of publication has been satisfied, 18 see ECF No. 18-4, and no member of the purported class opposes Patel’s motion under 19 the third step, ECF Nos. 20, 27–28. All that is left for the Court to determine is whether 20 under the second step Patel has made a prima facie showing of adequacy and typicality. 21 The Court concludes that he has. 22 Adequacy may be determined by asking two questions: “(1) do the named 23 plaintiffs and their counsel have any conflicts of interest with other class members and 24 (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf 25
26 2 Defendants take no position on the appointment of lead plaintiff. ECF No. 29. 27 1 of the class?” See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). Patel 2 alleges that his interests are aligned with the other purported class members and that he 3 possesses a significant financial incentive to “vigorously prosecute fraud claims on behalf 4 of the Class.” ECF No. 18-1. This is sufficient for a prima facie showing of adequacy. 5 Typicality is satisfied where “the claims or defenses of the representative parties 6 are typical of the claims or defenses of the class.” See Hanlon, 150 F.3d 1011 at 1020 7 (citing Fed. R. Civ. P. 23(a)(3)). Patel alleges that he, “like other members of the Class, 8 purchased ImmunityBio securities during the Class Period at prices artificially inflated by 9 Defendants’ misrepresentations or omissions and was damaged upon the disclosure of 10 those misrepresentations and/or omissions.” ECF No. 18-1 at 13. Because these claims 11 appear to arise from the same events and legal theory as the claims of the other purported 12 class members, the Court finds that Patel has also made a prima facie showing of 13 typicality. Accordingly, because Patel is the presumptive lead plaintiff and no other class 14 members have attempted to rebut that presumption, the Court APPOINTS Patel as lead 15 plaintiff. 16 Under the PSLRA, once the court has designated a lead plaintiff, that plaintiff 17 “shall subject to the approval of the court, select and retain counsel to represent the 18 class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). If the lead plaintiff has made a reasonable 19 choice of counsel, the district court should generally defer to that choice. Cohen v. 20 United States Dist. Ct., 586 F.3d 703, 712 (9th Cir. 2009). Patel has selected and retained 21 Pomerantz LLP and Holzer & Holzer, LLC as Co-Lead Counsel. ECF No. 18-1 at 5. In 22 light of the firms’ substantial experience in securities class action litigation, see ECF Nos. 23 18-7, 18-8, the Court APPROVES Patel’s choice of Pomerantz LLP and Holzer & 24 Holzer, LLC as Co-Lead Counsel. 25 It is further ORDERED that: 26 1. Co-Lead Counsel shall have the following responsibilities and duties, to be 27 1 carried out either personally or through counsel whom Co-Lead Counsel shall designate: 2 (a) to coordinate the briefing and argument of motions; 3 4 (b) to coordinate the conduct of discovery proceedings; 5 (c) to coordinate the examination of witnesses in depositions; 6 7 (d) to coordinate the selection of counsel to act as a spokesperson at pretrial 8 conferences; 9 (e) to call meetings of the plaintiffs’ counsel as they deem necessary and 10 appropriate from time to time; 11 12 (f) to coordinate all settlement negotiations with counsel for defendants; 13 (g) to coordinate and direct the pretrial discovery proceedings and the 14 preparation for trial and the trial of this matter and to delegate work 15 responsibilities to selected counsel as may be required; and 16 17 (h) to supervise any other matters concerning the prosecution, resolution, 18 or settlement of the Action. 19 2. No motion, request for discovery, or other pretrial proceedings shall be 20 initiated or filed by any plaintiffs without the approval of Co-Lead Counsel, so as to prevent 21 22 duplicative pleadings or discovery by plaintiffs. No settlement negotiations shall be 23 conducted without the approval of Co-Lead Counsel. 24 3. Every pleading in this Action, and any related action that is consolidated with 25 26 this Action, shall hereafter bear the following caption: 27 1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 4 IN RE IMMUNITYBIO, INC. No. 3:23-cv-01216-GPC-WVG 5 SECURITIES LITIGATION 6 CLASS ACTION THIS DOCUMENT RELATES TO: 7 8 [TITLE OF DOCUMENT] 9 10 4. When the document being filed pertains to all actions, the phrase “All 11 Actions” shall appear immediately after the phrase “This Document Relates To:”. When 12 the document applies to some, but not all, of the actions, the document shall list, 13 14 immediately after the phrase “This Document Relates To:”, the docket number for each 15 individual action to which the document applies, along with the name of the first-listed 16 plaintiff in said action. 17 18 5. Counsel in any related action that is consolidated with this Action shall be 19 bound by the organization of Plaintiffs’ counsel set forth herein. 20 6. Co-Lead Counsel shall have the responsibility of receiving and disseminating 21 22 Court orders and notices. 23 7.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ZACHARY SALZMAN, Individually and Case No.: 23-cv-01216-GPC-WVG on Behalf of All Others Similarly 12 Situated, ORDER APPOINTING LEAD 13 PLAINTIFF AND APPROVING Plaintiff, LEAD PLAINTIFF’S SELECTION 14 v. OF COUNSEL 15 IMMUNITYBIO, INC., RICHARD [ECF Nos. 17–18] 16 ADCOCK, DAVID C. SACHS, and PATRICK SOON-SHIONG, 17 Defendant. 18
19 Pending before the Court is the matter of appointing lead plaintiff in this putative 20 securities fraud class action brought on behalf “of all persons and entities other than 21 Defendants that purchased or otherwise acquired ImmunityBio securities between May 22 23, 2022 and May 10, 2023 . . . .” ECF No. 1 at 2.1 On August 29, 2023, movants Dipak 23 T. Patel (“Patel”), Yuchang Chen (“Chen”), Timothy L. Van Eman (“Eman”), and 24 25
26 1 Page citations refer to CM/ECF pagination. 27 1 Mitchell Brock (“Brock”), each filed a motion to be appointed lead plaintiff pursuant to 2 15 U.S.C. §78u-4(a)(3). ECF Nos. 15–18. Patel alleges the largest loss in connection 3 with his purchases of ImmunityBio securities during the class period: $288,056. ECF 4 Nos. 18-3, 28. Chen and Eman have since withdrawn their motions, ECF No. 27–28, and 5 Brock has filed a notice of non-opposition in recognition of Patel’s larger financial 6 interest, ECF No. 28.2 Accordingly, Patel’s motion proceeds unopposed. 7 DISCUSSION 8 Before the enactment of the Private Securities Litigation Reform Act (“PSLRA”), 9 the first plaintiff to file suit was usually appointed lead plaintiff. See Mersho v. United 10 States Dist. Court, 6 F.4th 891, 898 (9th Cir. 2021). Now, under the PSLRA, the Court 11 appoints lead plaintiffs through a “three-step process.” Id. The first step requires 12 publication of the action so that purported class members can move for lead plaintiff 13 appointment. Id. at 899 (citing 15 U.S.C. § 78u-4(a)(3)(A)(i)(I)-(II)). The second step 14 involves identifying the “most adequate” plaintiff; the movant with the largest alleged 15 loss becomes the presumptive lead plaintiff if they can make “a prima facie showing of 16 adequacy and typicality.” Id. The third step allows for other members of the purported 17 class to rebut that presumption. Id. Here, the first step of publication has been satisfied, 18 see ECF No. 18-4, and no member of the purported class opposes Patel’s motion under 19 the third step, ECF Nos. 20, 27–28. All that is left for the Court to determine is whether 20 under the second step Patel has made a prima facie showing of adequacy and typicality. 21 The Court concludes that he has. 22 Adequacy may be determined by asking two questions: “(1) do the named 23 plaintiffs and their counsel have any conflicts of interest with other class members and 24 (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf 25
26 2 Defendants take no position on the appointment of lead plaintiff. ECF No. 29. 27 1 of the class?” See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). Patel 2 alleges that his interests are aligned with the other purported class members and that he 3 possesses a significant financial incentive to “vigorously prosecute fraud claims on behalf 4 of the Class.” ECF No. 18-1. This is sufficient for a prima facie showing of adequacy. 5 Typicality is satisfied where “the claims or defenses of the representative parties 6 are typical of the claims or defenses of the class.” See Hanlon, 150 F.3d 1011 at 1020 7 (citing Fed. R. Civ. P. 23(a)(3)). Patel alleges that he, “like other members of the Class, 8 purchased ImmunityBio securities during the Class Period at prices artificially inflated by 9 Defendants’ misrepresentations or omissions and was damaged upon the disclosure of 10 those misrepresentations and/or omissions.” ECF No. 18-1 at 13. Because these claims 11 appear to arise from the same events and legal theory as the claims of the other purported 12 class members, the Court finds that Patel has also made a prima facie showing of 13 typicality. Accordingly, because Patel is the presumptive lead plaintiff and no other class 14 members have attempted to rebut that presumption, the Court APPOINTS Patel as lead 15 plaintiff. 16 Under the PSLRA, once the court has designated a lead plaintiff, that plaintiff 17 “shall subject to the approval of the court, select and retain counsel to represent the 18 class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). If the lead plaintiff has made a reasonable 19 choice of counsel, the district court should generally defer to that choice. Cohen v. 20 United States Dist. Ct., 586 F.3d 703, 712 (9th Cir. 2009). Patel has selected and retained 21 Pomerantz LLP and Holzer & Holzer, LLC as Co-Lead Counsel. ECF No. 18-1 at 5. In 22 light of the firms’ substantial experience in securities class action litigation, see ECF Nos. 23 18-7, 18-8, the Court APPROVES Patel’s choice of Pomerantz LLP and Holzer & 24 Holzer, LLC as Co-Lead Counsel. 25 It is further ORDERED that: 26 1. Co-Lead Counsel shall have the following responsibilities and duties, to be 27 1 carried out either personally or through counsel whom Co-Lead Counsel shall designate: 2 (a) to coordinate the briefing and argument of motions; 3 4 (b) to coordinate the conduct of discovery proceedings; 5 (c) to coordinate the examination of witnesses in depositions; 6 7 (d) to coordinate the selection of counsel to act as a spokesperson at pretrial 8 conferences; 9 (e) to call meetings of the plaintiffs’ counsel as they deem necessary and 10 appropriate from time to time; 11 12 (f) to coordinate all settlement negotiations with counsel for defendants; 13 (g) to coordinate and direct the pretrial discovery proceedings and the 14 preparation for trial and the trial of this matter and to delegate work 15 responsibilities to selected counsel as may be required; and 16 17 (h) to supervise any other matters concerning the prosecution, resolution, 18 or settlement of the Action. 19 2. No motion, request for discovery, or other pretrial proceedings shall be 20 initiated or filed by any plaintiffs without the approval of Co-Lead Counsel, so as to prevent 21 22 duplicative pleadings or discovery by plaintiffs. No settlement negotiations shall be 23 conducted without the approval of Co-Lead Counsel. 24 3. Every pleading in this Action, and any related action that is consolidated with 25 26 this Action, shall hereafter bear the following caption: 27 1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 4 IN RE IMMUNITYBIO, INC. No. 3:23-cv-01216-GPC-WVG 5 SECURITIES LITIGATION 6 CLASS ACTION THIS DOCUMENT RELATES TO: 7 8 [TITLE OF DOCUMENT] 9 10 4. When the document being filed pertains to all actions, the phrase “All 11 Actions” shall appear immediately after the phrase “This Document Relates To:”. When 12 the document applies to some, but not all, of the actions, the document shall list, 13 14 immediately after the phrase “This Document Relates To:”, the docket number for each 15 individual action to which the document applies, along with the name of the first-listed 16 plaintiff in said action. 17 18 5. Counsel in any related action that is consolidated with this Action shall be 19 bound by the organization of Plaintiffs’ counsel set forth herein. 20 6. Co-Lead Counsel shall have the responsibility of receiving and disseminating 21 22 Court orders and notices. 23 7. Co-Lead Counsel shall be the contact between Plaintiffs’ counsel, and shall 24 direct and coordinate the activities of Plaintiffs’ counsel. 25 26 8. Defendants shall effect service of papers on plaintiffs by serving a copy of 27 1 ||same on Co-Lead Counsel by overnight mail service, electronic or hand delivery. Plaintiffs 2 shall effect service of papers on defendants by serving a copy of same on Defendants’ 3 4 counsel by overnight mail service, electronic or hand delivery. 5 9. During the pendency of this litigation, or until further order of this Court, the 6 parties shall take reasonable steps to preserve all documents within their possession, 7 g custody, or control, including computer-generated and stored information, and materials 9 as computerized data and electronic mail, containing information which is relevant or 10 which may lead to the discovery of information relevant to the subject matter of the pending 11 litigation. 13 10. The Court vacates the hearing scheduled for October 6, 2023. IT IS SO ORDERED. 15 16 Dated: September 27, 2023 17 Carseto C4 Hon. Gonzalo P. Curiel 18 United States District Judge 19 20 21 22 23 24 25 26 27 28 23-cv-01216-GPC-WVG