United States District Court, D. Maryland
JOHN CHAMBLEE, Individually and on behalf of others similarly situated, Plaintiff,
TERRAFORM POWER, INC. et al, Defendants.
MEMORANDUM OPINION AND ORDER
XINIS United States District Judge.
class member, John Chamblee, instituted the following class
action against Defendants TerraForm Power, Inc., Carlos
Domenech Zornoza and Alejandro Hernandez (collectively
"the Defendants"), alleging violations of federal
securities laws. ECF No. 1. Pending before the Court is the
Notice and Motion by Clemens Schlettwein and Jerome Spindler
(collectively, "the Movants") for Appointment as
Lead Co-Plaintiffs and Approval of Counsel. ECF No. 42. To
date, the Motion remains unopposed.
6, 2016, the Court requested additional information from
Movants regarding the instant Motion and then held a hearing
on July 28, 2016 regarding the same. For the following
reasons, the Court grants the Motion to appoint Schlettwein
and Spindler as lead co-plaintiffs and their motion to
approve Pomerantz LLP as lead counsel and Cohen Millstein
Sellers & Toll, PLLC as liaison counsel.
Private Securities Litigation Reform Act of 1995
("PSLRA"), 15 U.S.C. § 78u-4 et seq.,
governs the selection of lead plaintiffs tasked with
overseeing class actions alleging violations of federal
securities laws. More specifically, the PSLRA requires that
within 20 days of filing the complaint, the initial plaintiff
publish a notice "in a widely circulated, national
business-oriented publication or wire service" advising
potential members of the plaintiff class about the pendency
of the action, the claims, the class period, and that within
60 days thereafter, any member of the class may move to be
appointed lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A)
a class member so move, the PSLRA directs that "the
court shall adopt a presumption that the most adequate
plaintiff in any private action arising under the chapter is
the person or group of persons that. . . has either filed the
complaint or made a motion in response to a notice" and
"in the determination of the court, has the largest
financial interest in the relief sought by the class, "
and "otherwise satisfies the requirements of Rule 23 of
the Federal Rules of Civil Procedure." 15 U.S.C. §
78u-4(a)(3)(B)(iii)(I). Finally, the PSLRA provides that the
lead plaintiff shall, subject to the approval of the court,
select and retain counsel to represent the class." 15
U.S.C. § 78u-4(a)(3)(B)(v).
Chamblee published notice of the filing on April 4, 2016, in
Globe Newswire, a Nasdaq-owned internet-based business news
service that disseminated via internet the advisement that
all putative class members had sixty days to move for
appointment as lead plaintiff and approval of their selection
as lead counsel. ECF No. 32-1. Only two putative class
members, Schlettwein and Spindler, moved for appointment as
co-lead plaintiffs. Aggregation of putative class members is
permitted under the PLSRA. See 15 U.S.C. §
78u-4(a)(3)(B)(iii)(I). See also Klugman v. American
Capital, Ltd. PJM 09-5, 2009 WL 2499521, (D. Md. Aug 13,
2009) at *3. Schlettwein and Spindler have both certified to
purchasing 3000 and 1000 shares respectively, with an
estimated loss of $63, 148 as a result of the alleged
violations. Collectively, Schlettwein and Spindler have
suffered the largest loss as compared to the only other class
member who initiated the action, the named plaintiff
together, Schlettwein and Spindler retain the largest
financial interest in the outcome of the litigation as
putative class members seeking timely appointment as lead
plaintiff. See, e.g., Miraglia v. Human Genome
Sciences, No. RWT 11-03231, 2012 WL 987502, (D. Md. Mar.
22, 2012) at *4 (appointing the "only putative class
member who timely sought appointment" as having the
largest financial interest).
Schlettwein and Spindler have made & prima facie
showing that they meet the typicality and adequacy
requirements under Rule 23 of the Federal Rules of Civil
Procedure. See In re USEC Securities Litigation, 168
F.Supp.2d 560 (D. Md. 2001) ("A wide ranging analysis
under Rule 23 is not appropriate at this initial stage of the
litigation and should be left for the Court's later
consideration of a motion for class certification.");
see also Clair v. DeLuca, 232 F.R.D. 219, 225, 226
(W.D. Pa. 2005) (requiring only aprima facie showing
that Rule 23 requirements are met). Schlettwein and
Spindler's claims are typical of the class in that they
allege harms caused by Defendants' purported false or
misleading statements and omissions during the class period
when plaintiffs purchased TerraForm Power stock at
artificially inflated prices. ECF Nos. 1, 38-2, 38-3.
and Spindler have further demonstrated that they will
"fairly and adequately protect the interests of the
class, " and "ensure vigorous advocacy, "
Riordan v. Smith Barney, 113 F.R.D. 60, 64 (N.D.
Ill. 1986). "Ideally, courts will appoint institutional
investors with large holdings in the stock as lead plaintiff,
" given their "incentives to monitor their suits
closely because of their substantial stakes in the stock at
issue, thereby eliminating frivolous tactics and settlements
that inflate attorneys' fees." Haung v. Acterna
Corp., 220 F.R.D. 255, 258 (D. Md. 2004) (quoting
Yousefi v. Lockheed Martin Corp., 70 F.Supp.2d 1061,
1066 (CD. Cal. 1999)). However here, no institutional
investors have come forward. Additionally, Schlettwein and
Spindler have demonstrated that they are experienced
investors. Mr. Spindler is a retired Chief Executive Officer
of a home furnishing business who has been investing since
1963, and Mr. Schlettwein has been investing for more than 20
years and is the founder and President of a nonprofit
foundation for the protection of animals. ECF No. 44 at 3.
Both have also certified under oath that they will serve as a
representative party of the class. ECF No. 38-2. Finally,
their collective losses of over $60, 000 provide adequate
incentive to prosecute this case on behalf of the class, and
no evidence exists that their interests are antagonistic to
the class in any regard. Schlettwein and Spindler have also
chosen experienced class counsel familiar with prosecuting
securities class actions.
it is hereby ORDERED that
Schlettwein and Spindler are appointed lead co-plaintiffs in
this case, and that Pomerantz LLP are Lead Counsel with Cohen
Millstein Sellers & Toll as Liaison Counsel.
Plaintiffs' Lead Counsel shall be responsible for the
(a) to coordinate the briefing and argument of ...