Johnston v. LifeMD
Tyler Johnston, individually and on behalf of all others similarly situated v. LifeMD, Inc., Justin Schreiber, and Marc Benathen
- Naomi Buchwald
- 1:25-cv-09153
- U.S. District Court · Southern District of New York
- 9
In Johnston v. LifeMD, Judge Buchwald granted Zhao’s lead-plaintiff motion, approved Hagens Berman, and denied Tagua’s competing motion.
Gehui Zhao was appointed lead plaintiff, and Hagens Berman Sobol Shapiro LLP was approved as lead counsel for the proposed class. Emilio Tagua’s competing motion was denied. The order concerns case leadership and does not resolve the investors’ securities-fraud claims.
What happened
Johnston v. LifeMD is a proposed investor class action alleging that LifeMD made materially false statements, causing investors losses. The court considered competing requests from Gehui Zhao and Emilio Tagua to lead the case and to have their law firms appointed as class counsel.
The court found that Zhao had the largest claimed financial loss—$105,000.76—and that his claims appeared typical of the proposed class. It also found that Zhao and Hagens Berman Sobol Shapiro LLP could adequately represent the class, rejecting Tagua’s argument that Zhao’s first language being Mandarin made him unable to oversee the lawyers.
Judge Naomi Reice Buchwald granted Zhao’s motion to serve as lead plaintiff and approved Hagens Berman as lead counsel. She denied Tagua’s competing motion; the order did not decide whether the alleged securities fraud occurred.
The detailed version
- Johnston v. LifeMD · No. 1:25-cv-09153
- Naomi Buchwald
- Nov. 24, 2025
Background
Tyler Johnston filed a proposed securities-fraud class action against LifeMD, Inc., its Chief Executive Officer Justin Schreiber, and its Chief Financial Officer Marc Benathen. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. The complaint was initially filed in the Eastern District of New York and was transferred to the Southern District of New York on November 3, 2025.
The pending motions concerned who should represent the proposed class as lead plaintiff and which law firm should serve as lead counsel. Four class members initially filed motions by the October 27, 2025 deadline. John DiRoma and Sarah Minney later filed notices stating that they would not oppose appointment of another movant because they did not have the largest financial interest. The remaining competing movants were Gehui Zhao and Emilio Tagua.
Lead- Plaintiff Standard
The Private Securities Litigation Reform Act requires the court to appoint the class member it determines is most capable of adequately representing the class. A timely movant with the largest financial interest is presumed to be the most adequate plaintiff if the movant also makes the required preliminary showing under Rule 23 of the Federal Rules of Civil Procedure, including typicality and adequacy. Another movant may rebut that presumption by showing that the presumptive lead plaintiff cannot fairly and adequately protect the class or faces unique defenses.
Court’s Analysis
The court found that all four initial motions were timely. It determined that Zhao had the largest financial interest, based on his claimed losses of $105,000.76 from purchases of LifeMD stock in July and August 2025. Tagua claimed $13,313 in damages and did not dispute that Zhao had the larger financial interest.
The court also found that Zhao made the required preliminary showing under Rule 23. His allegations arose from the same alleged misrepresentations and purchases as the claims of the other proposed class members, satisfying typicality. The court found that Hagens Berman Sobol Shapiro LLP had substantial experience in complex securities class actions, that no evidence showed Zhao had interests adverse to the class, and that his claimed losses gave him sufficient interest to pursue the case.
Tagua argued that Zhao could not adequately oversee class counsel because Mandarin was his first language. The court rejected that argument. It found that Zhao had a working understanding of English and that counsel had provided, and would continue to provide, translation assistance when needed. The court also noted that English-language ability is not necessarily an obstacle to adequate class representation when translation assistance is available.
Lead Counsel
The court applied a strong presumption in favor of approving the properly selected lead plaintiff’s choice of counsel. After reviewing Hagens Berman’s firm résumé and experience representing plaintiffs in complex securities class actions, the court concluded that the firm was qualified to serve as lead counsel.
Disposition
The court granted Zhao’s motion for appointment as lead plaintiff and for approval of Hagens Berman as lead counsel. It denied Tagua’s competing motion. The order addressed representation of the proposed class and did not decide the underlying securities-fraud allegations.
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.