1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHRISTOPHER VATAJ, Case No. 19-cv-06996-HSG

8 Plaintiff, ORDER GRANTING STIPULATION

TO APPOINT CO-LEAD PLAINTIFFS

9 v. AND APPROVING SELECTION OF

CO-LEAD COUNSEL

10 WILLIAM D. JOHNSON, et al., Re: Dkt. No. 33 11 Defendants.

12 13 Pending before the Court is the stipulation appointing co-lead plaintiffs and approving the 14 selection of co-lead counsel in this securities class action. See Dkt. No. 33. The Court finds this 15 matter appropriate for disposition without oral argument and the matter is deemed submitted. See 16 Civil L.R. 7-1(b). Having considered the parties’ stipulation and supplemental briefing, the Court 17 GRANTS the stipulation. 18 I. BACKGROUND 19 Christopher Vataj filed this securities class action on October 25, 2019, on behalf of a class 20 of “all persons other than Defendants who purchased or otherwise acquired PG&E securities 21 between December 11, 2018, and October 11, 2019.” See Dkt. No. 1 at ¶ 1. The complaint 22 alleges that following PG&E’s bankruptcy in the wake of the California wildfires, PG&E began 23 initiating rolling power outages to reduce the risk of future wildfires. See id. at ¶ 5. The 24 complaint further alleges that Defendants, individual officers at PG&E, made materially false and 25 misleading statements that failed to disclose: (i) PG&E’s new wildfire prevention and safety 26 protocols were inadequate; and (ii) PG&E was unprepared for the rolling power outages. See id. 27 at ¶ 6. The New York Times published an article on October 12, 2019, detailing the company’s 1 Three movants filed timely motions seeking appointment as lead plaintiff and approval of 2 lead counsel under the Private Securities Litigation Reform Act of 1995 (“PSLRA”) and Civil 3 Local Rule 3-7(b): (1) Iron Workers Local 580 Joint Funds and Ironworkers Locals 40, 361 & 4 417 Union Security Funds (“Iron Workers Funds”), Dkt. No. 19; (2) Robert Allustiarti, Dkt. No. 5 23; and (3) Bob Vavla, Dkt. No. 25. However, on January 6, 2020, Mr. Vavla filed a notice of 6 withdrawal of his motion. See Dkt. No. 32. Iron Workers Funds and Mr. Allustiarti subsequently 7 filed a stipulation agreeing to be co-lead plaintiffs, and selected and retained Pomerantz LLP and 8 The Rosen Law Firm, P.A. to serve as co-lead counsel. See Dkt. No. 33. 9 II. APPOINTMENT OF CO-LEAD PLAINTIFFS 10 The PSLRA “instructs district courts to select as lead plaintiff the one ‘most capable of 11 adequately representing the interests of class members.’” In re Cavanaugh, 306 F.3d 726, 729 12 (9th Cir. 2002) (quoting 15 U.S.C. § 78u-4(a)(3)(B)(i)). “The ‘most capable’ plaintiff—and hence 13 the lead plaintiff—is the one who has the greatest financial stake in the outcome of the case, so 14 long as he meets the requirements of Rule 23.” Id. The Ninth Circuit interprets the PSLRA as 15 establishing “a simple three-step process for identifying the lead plaintiff pursuant to these 16 criteria.” Id. 17 A. Step One 18 Step One consists of meeting the PSLRA’s notice requirement. Id. “The first plaintiff to 19 file an action covered by the [PSLRA] must post this notice ‘in a widely circulated national 20 business-oriented publication or wire service.’” Id. (quoting 15 U.S.C. § 78u-4(a)(3)(A)(i)). The 21 notice must be published within 20 days of the complaint’s filing. 15 U.S.C. § 78u-4(a)(3)(A)(i). 22 The notice must also alert putative class members “(I) of the pendency of the action, the claims 23 asserted therein, and the purported class period; and (II) that, not later than 60 days after the date 24 on which the notice is published, any member of the purported class may move the court to serve 25 as lead plaintiff of the purported class.” Id. 26 Here, notice was published in Globe Newswire on the same day that the complaint was 27 filed. See Dkt. No. 12-1, Ex. A. This clearly complied with the PSLRA’s 20-day filing deadline. 1 business-oriented news reporting service,” as is required. See Cavanaugh, 306 F.3d at 729 2 (quoting 15 U.S.C. § 78u-4(a)(3)(A)(i)). Finally, the notice announced the filing of this class 3 action, described the asserted claims, specified the putative class period, and explained that any 4 motion to be appointed lead plaintiff had to be filed by December 24, 2019. See Dkt. No. 12-1, 5 Ex. A. For these reasons, the Court finds that Step One’s requirements are met. 6 B. Step Two 7 Step Two consists of identifying the presumptive lead plaintiff. See Cavanaugh, 306 F.3d 8 at 729–30. There is a rebuttable presumption that the “most adequate plaintiff” is the one who 9 “(aa) has either filed the complaint or made a motion in response to a notice under subparagraph 10 (A)(i); (bb) in the determination of the court, has the largest financial interest in the relief sought 11 by the class; and (cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil 12 Procedure.” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I). Thus, once the filing requirement of subsection 13 (a)(3)(B)(iii)(I)(aa) is met, “the district court must compare the financial stakes of the various 14 plaintiffs and determine which one has the most to gain from the lawsuit.” Cavanaugh, 306 F.3d 15 at 730. The district court “must then focus its attention on that plaintiff and determine, based on 16 the information he has provided in his pleadings and declarations, whether he satisfies the 17 requirements of Rule 23(a), in particular those of ‘typicality’ and ‘adequacy.’” Id. If so, then that 18 party is the presumptive lead plaintiff. Id. 19 Here, Iron Workers Funds and Mr. Allustiarti timely filed their motions to be appointed 20 lead plaintiffs on December 24, 2019, satisfying subsection (a)(3)(B)(iii)(I)(aa). Moreover, as co- 21 lead plaintiffs they suffered alleged losses totaling approximately $768,000 in connection with 22 their purchases of PG&E securities.1 See Dkt. No. 19 at 8–10; Dkt. No. 23 at 5. Because Mr. 23 1 Although the PSLRA permits groups of persons to serve as a lead plaintiff, 15 U.S.C. § 78u- 24 4(a)(3)(B)(iii)(I), the Ninth Circuit has left open the question of whether the PSLRA permits groups of persons without an existing relationship to aggregate their financial losses to become 25 lead plaintiff. See In re Cavanaugh, 306 F.3d 726, 731, n.8 (9th Cir. 2002). Nevertheless, this Court “has held that a group of previously-unrelated investors may show that it is an adequate 26 class representative if it demonstrates that the group is small and cohesive, and that the individual members have demonstrated an ability to work together effectively on behalf of the class.” See, 27 e.g., In re Aqua Metals Sec. Litig., No. 17-CV-07142-HSG, 2018 WL 4860188, at *4 (N.D. Cal. 1 Vavla withdrew his motion, Iron Workers Funds and Mr. Allustiarti’s stipulation for appointment 2 as co-lead plaintiffs is unopposed and no one claims to have suffered greater losses than them. 3 Iron Workers Funds and Mr. Allustiarti thus have “the most to gain from the lawsuit.” See 4 Cavanaugh, 306 F.3d at 730. 5 Next, the Court turns to the “typicality” and “adequacy” requirements of Rule 23(a). The 6 Court finds that “typicality” is satisfied because the claims and defenses of Iron Workers Funds 7 and Mr. Allustiarti “are typical of the claims and defenses of the class.” See Fed. R. Civ. P. 8 23(a)(3). Like other putative class members, Iron Workers Funds and Mr. Allustiarti allege that 9 during the class period, they acquired PG&E securities at prices that were inflated by Defendants’ 10 material misrepresentations and omissions, and that they consequently suffered damages. See Dkt. 11 No. 19 at 10–12; Dkt. No. 23 at 5–7. 12 In addition, Iron Workers Funds and Mr. Allustiarti represent that no antagonism exists 13 between their interests and those of other class members. See id. And given that their stipulation 14 is now unopposed, the Court has no reason to doubt this representation. Cf. Ziolkowski v. Netflix, 15 Inc., No. 17-cv-01070-HSG, 2017 WL 2572583, at *3 (N.D. Cal. June 14, 2017) (finding the 16 typicality requirement satisfied where an unopposed movant represented that there was “no 17 evidence of antagonism between his interests and those of the proposed class”). The Court also 18 finds that “adequacy” is satisfied because Iron Workers Funds and Mr. Allustiarti “will fairly and 19 adequately protect the interests of the class.” See Fed. R. Civ. P. 23(a)(4). Like the lead plaintiff 20 appointed in Ziolkowski, Iron Workers Funds and Mr. Allustiarti’s “substantial financial stake in 21 the outcome of this litigation, [their] timely filing of [their] motion[s], and the quality of [their] 22 briefing all demonstrate that [they are] both motivated to, and capable of, vigorously pursuing this 23 litigation.” See 2017 WL 2572583, at *3 (quotation omitted). 24 Consequently, the Court finds that Step Two’s requirements are met. 25 C. Step Three 26 Step Three consists of “giv[ing] other plaintiffs an opportunity to rebut the presumptive 27 1 lead plaintiff’s showing that it satisfies Rule 23’s typicality and adequacy requirements.” 2 Cavanaugh, 306 F.3d at 730. As already noted, Iron Workers Funds and Mr. Allustiarti’s 3 stipulation is now unopposed. Since their presumptive lead plaintiff status is not rebutted, Step 4 Three’s requirements are met, and Iron Workers Funds and Mr. Allustiarti’s appointment as co- 5 lead plaintiffs is appropriate. 6 III. APPOINTMENT OF CO-LEAD COUNSEL 7 Iron Workers Funds and Mr. Allustiarti have selected and retained the law firms of 8 Pomerantz and Rosen Law to serve as co-lead counsel. See 15 U.S.C. § 78u-4(a)(3)(B)(v) (“The 9 most adequate plaintiff shall, subject to the approval of the court, select and retain counsel to 10 represent the class.”). The Court defers to Iron Workers Funds’ and Mr. Allustiarti’s choice of co- 11 lead counsel because their choice is not “so irrational, or so tainted by self-dealing or conflict of 12 interest, as to cast genuine and serious doubt on [its] willingness or ability to perform the functions 13 of lead plaintiff.” See Cavanaugh, 306 F.3d at 733; see also id. at 739, n.11 (“Congress gave the 14 lead plaintiff, and not the court, the power to select a lawyer for the class.”). Both firms have 15 extensive experience as lead counsel in securities class actions. See, e.g., Dkt. No. 19 at 12–13; 16 Dkt. No. 20-4, Ex. D; Dkt. No. 23 at 7; Dkt. No. 24-4, Ex. 4; see also Dkt. No. 41 at 2. Having 17 reviewed the supplemental briefing in support of the stipulation to appoint co-lead plaintiffs and 18 co-lead counsel, see Dkt. No. 41, the Court is also satisfied that the two firms will work 19 cooperatively to promote the efficient representation of the putative class. Although the Court will 20 not order the two appointed firms to play particular roles in the litigation, it does order that 21 Defendant’s counsel may rely upon all agreements made with any appointed counsel, or other duly 22 authorized representative of appointed counsel, and such agreements shall be binding on all 23 plaintiffs. See Norfolk Cnty. Ret. Sys. v. Solazyme, Inc., 2015 U.S. Dist. LEXIS 138654, at *7–*8 24 (N.D. Cal. Oct. 8, 2015). 25 IV. CONCLUSION 26 The Court accordingly GRANTS the stipulation appointing co-lead plaintiffs and 27 approving selection of co-lead counsel. Dkt. No. 33. Within ten days of this order the parties 1 consolidated or amended complaint and the filing of Defendants’ response. This terminates Dkt. 2 Nos. 19, 23. 3 IT IS SO ORDERED. 4 || Dated: 2/3/2020 Abeer ML fp

HAYWOOD S. GILLIAM, JR.

6 United States District Judge 7 8 9 10 11 a 12

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