<i>In re Meta Platforms, Inc., Derivative Litigation</i>
- Jon Tigar
- 3:22-cv-00903
- U.S. District Court · Northern District of California
- 2
In In re Meta Platforms, Inc., Derivative Litigation, Judge Tigar vacated hearings and ordered positions on consolidation and a possible stay.
The two shareholder-derivative plaintiffs, the defendants, the proposed intervenors, and the scheduled hearings and conferences in the two cases.
What happened
In In re Meta Platforms, Inc., Derivative Litigation, Mark Sloan and Hughes Gervat brought shareholder lawsuits against Mark Zuckerberg and others involving Meta Platforms, Inc. The plaintiffs agreed that their cases should be combined, and all parties agreed that the allegations substantially overlapped with a related securities class action.
Several pension plans asked to join the cases and pause them while investigating. The plaintiffs opposed that request, while the defendants supported a broader pause. The court ordered everyone to explain whether the cases should be combined and paused, and invited the proposed intervenors to state their positions.
The court vacated the hearings on the proposed intervention motions and the initial case-management conferences. Within 28 days, the parties and proposed intervenors had to file their positions in one document. Judge Jon S. Tigar did not decide the intervention motions, consolidation, or the stay in this order.
The detailed version
- <i>In re Meta Platforms, Inc., Derivative Litigation</i> · No. 3:22-cv-00903
- Jon Tigar
- May 2, 2022
Background
Mark Sloan and Hughes Gervat filed shareholder derivative suits against Mark Zuckerberg and other defendants involving Meta Platforms, Inc., which the opinion says was formerly known as Facebook, Inc. The plaintiffs agreed with each other and with the defendants that the two derivative cases should be consolidated. They also agreed that their allegations substantially overlapped with allegations in a securities class action pending before the same court.
The Employees’ Retirement System of the State of Rhode Island, St. Paul Electrical Construction Pension Plan, St. Paul Electrical Construction Workers Supplemental Pension Plan, and Retirement Medical Funding Plan for the St. Paul Electrical Workers moved to intervene, meaning to join the cases, and to stay them, meaning pause them, until after completing their investigation. The plaintiffs opposed intervention. The defendants took no position on intervention but supported a broader stay pending the securities class action.
Court’s Order
The court ordered the parties to show cause, or explain, why the derivative cases should not be stayed at least until the court resolved any challenges to the complaint in the related securities class action. The court noted that courts generally stay shareholder derivative suits when they arise from the same factual allegations and proceeding with the derivative suit could affect the company’s defense in the securities action.
The court stated that such a stay would also delay consideration of the pending motions to intervene. The proposed intervenors could state their positions on the proposed stay, but were not required to do so. They were also invited to respond to the parties’ agreement to consolidate the two cases for all purposes.
Disposition and Effect
Within 28 days of the order, the parties and proposed intervenors were required to file one document containing either agreed positions or separate positions, including whether they took no position on the stay or consolidation. The court said it would then take the matter under submission without oral argument unless it ordered otherwise.
The court vacated the May 19, 2022 hearings on the motions to intervene and the June 14, 2022 initial case-management conferences. This order did not decide the motions to intervene and did not order consolidation or a stay. Judge Jon S. Tigar signed the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.