Brownbridge v. TFI International Inc.

Background

Barrett Brownbridge brought a proposed class action against TFI International Inc. (TFI), Alain Bédard, and David Saperstein. The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934, Securities and Exchange Commission Rule 10b-5, and Section 20(a) of that Act. The proposed class consists of people who purchased TFI securities from April 26, 2024, through February 19, 2025.

The complaint alleges that the defendants made materially false or misleading statements and failed to disclose adverse information about TFI’s business, including alleged losses of small and medium business customers, declining TForce Freight revenue, cost-management difficulties, and declining profitability in TFI’s largest business segment. After TFI announced lower 2024 financial results on February 19, 2025, its stock price fell $26.13, or 20.5%, the next day, according to the complaint’s allegations.

The issue before the court was not the truth of those allegations. It was Patricia Douglass’s motion to be appointed lead plaintiff and to have Glancy Prongay & Murray LLP approved as lead counsel for the proposed class. No competing lead-plaintiff motion was filed.

Legal standards

The Private Securities Litigation Reform Act establishes a process for selecting a lead plaintiff in a securities class action. The court generally presumes that the “most adequate plaintiff” is the person or group that timely seeks appointment, has the largest financial interest, and makes an initial showing of the class-representation requirements of Federal Rule of Civil Procedure 23.

At this stage, the court considers only a preliminary showing of typicality and adequacy. Typicality means that the proposed lead plaintiff’s claims arise from the same events and legal theories as the class’s claims. Adequacy requires that the proposed lead plaintiff have no conflict with the class and that the proposed attorneys be qualified to conduct the litigation.

The statute also permits the presumption to be rebutted by proof that the proposed lead plaintiff cannot fairly and adequately protect the class or faces unique defenses that do not apply to other class members. The statute requires the most adequate plaintiff, subject to court approval, to select class counsel.

Court’s analysis

Timeliness. Glancy Prongay & Murray LLP published a March 14, 2025, Business Wire notice announcing the action and informing class members that they could seek appointment as lead plaintiff within 60 days. The court found that Douglass’s motion complied with that deadline.

Financial interest. Douglass stated that she purchased TFI shares during the proposed class period at allegedly inflated prices and suffered an alleged loss of $997.50. After reviewing her supporting documents, the court found that she had the largest financial interest in the action.

Rule 23 requirements. The court found that Douglass’s claims were typical because, like the other proposed class members, she allegedly suffered losses from the defendants’ misstatements and omissions. The court also found no apparent conflict between Douglass and the proposed class. It accepted her statement that she was willing to serve as a representative and testify if necessary, and found that Glancy Prongay & Murray LLP was experienced, competent, and qualified.

Defendants’ objections. The defendants argued that Douglass’s loss was too small and that she had provided no evidence that she could manage attorneys, negotiate with counsel, or meaningfully communicate with counsel. The court rejected those arguments. It noted that Douglass’s alleged loss was larger than the losses of proposed lead plaintiffs rejected in the cases cited by the defendants. The court also noted that Douglass was a cardiac triage coordinator and registered nurse with four years of investing experience.

The court further stated that no other proposed class member opposed Douglass’s motion, that nothing in the record showed she could not fairly and adequately protect the class, and that no unique defenses appeared to make her inadequate. The opinion noted the parties’ dispute over whether the defendants had statutory standing to oppose the motion but assumed, for purposes of its analysis, that they did.

Lead counsel

The court found that Glancy Prongay & Murray LLP had substantial experience in securities class actions and had served as lead counsel in many securities-law cases. The defendants did not oppose approval of the firm as lead counsel.

Disposition

The court granted the motion for appointment of lead plaintiff and approval of lead counsel. It designated Patricia Douglass as lead plaintiff, appointed Glancy Prongay & Murray LLP as lead counsel, and directed the clerk to terminate the motion. The court did not rule on the underlying allegations that TFI or the individual defendants violated the federal securities laws.