Z-Seven Fund, Inc. v. Motorcar Parts & Accessories

The issue before us is whether an order appointing a “lead plaintiff” in an on-going securities fraud class action is a “collateral order” from which an interlocutory appeal can be taken. We hold that it is not, and therefore dismiss this appeal for lack of jurisdiction.

I. Background

Fourteen separate civil actions were commenced in the federal courts of New York and California against Motorcar Parts & Accessories, Inc. alleging violations of the securities laws. In general terms, it is alleged that Motorcar had concealed accounting irregularities and disseminated false statements about the company’s performance. The plaintiffs sought to recover damages on behalf of a proposed class of purchasers of Motorcar stock during a certain three-year period. The Judicial Panel on Multi-District Litigation consolidated all of these cases for pretrial proceedings and assigned them to Judge Real in Los Angeles.

Four different individuals and groups filed applications seeking appointment as lead plaintiff pursuant to § 21D(a)(3) of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The first group, the Motorcar Plaintiffs’ Group (“MPG”), represented by the law firm of Milberg…