IN RE APPLE INC. STOCKHOLDER DERIVATIVE LITIGATION

Background

The court considered competing motions to appoint lead counsel in a consolidated shareholder derivative action involving Apple Inc. Alan Bankhalter sought appointment of Pritzker Levine LLP and Gainey McKenna & Egleston. Terrence Zehrer, Andrew Fine, Tammy Federman SEP/IRA, and the Rosenfeld Family Foundation, collectively referred to as ZFFR, sought appointment of Robbins LLP and WeissLaw LLP.

Five of the six plaintiffs supported ZFFR’s request. Bankhalter was the only plaintiff who opposed it and sought appointment of his own proposed counsel.

Reasons for the Appointment

The court stated that the guiding principle was which counsel would best serve the plaintiffs’ interests. It considered several factors:

- Plaintiff support: The court treated the support of five of the six plaintiffs as favoring ZFFR, although it said that factor was not decisive. - Counsel’s experience: Both sets of firms described experience in complex, class, and securities litigation. The court found that ZFFR’s counsel appeared to have an advantage in relevant shareholder derivative litigation experience, including substantial recoveries in extensively litigated cases. The court also noted ZFFR’s assertions that Gainey McKenna had not obtained a monetary recovery in a derivative action where it served as lead counsel, had overstated its role in some cases, and had not engaged in extensive derivative litigation, while Pritzker identified only two derivative actions in which it had participated. - Work performed: Robbins filed the first of the four consolidated actions, led discussions about scheduling and case management, prepared the stipulation and proposed order to consolidate and stay the related actions, and obtained agreement from most plaintiffs to its proposed leadership structure. WeissLaw also made a books-and-records demand on Apple Inc. The court found that this work demonstrated a commitment to advancing the litigation, even though much of it was routine. - Pleading issue: ZFFR argued that Bankhalter’s complaint might be subject to dismissal because it did not state the specific dates on which he purchased Apple stock. The court explained that Ninth Circuit precedent requires a derivative plaintiff to have been a shareholder when the alleged misconduct occurred and to keep owning the stock during the lawsuit, but did not appear to require pleading the specific purchase dates. The court nevertheless noted that Bankhalter’s allegations might still be insufficient under the cited authority. It did not rule on whether the complaint satisfied the pleading requirements.

The court found that the parties’ available resources were not decisive. It also rejected Bankhalter’s alternative request to appoint one firm from each competing group.

Order

The court granted ZFFR’s motion. It appointed Robbins LLP and WeissLaw LLP as co-lead counsel for the plaintiffs in the consolidated action.

The co-lead counsel received sole authority to speak for the plaintiffs regarding pretrial procedure, trial, and settlement. They were directed to coordinate the plaintiffs’ activities and appearances, control the filing of motions and discovery requests, communicate with the court, maintain a master service list, and assign work to avoid unnecessary duplication. Agreements made with co-lead counsel would bind the plaintiffs, and the order would apply to the consolidated action and future-filed actions concerning the same subject matter.

The order terminated Docket Numbers 21 and 23. Judge Yvonne Gonzalez Rogers signed the order on June 29, 2020.