Ng v. Berkeley Lights, Inc.

Background

This order concerns appointment of a lead plaintiff and lead counsel in a proposed securities class action. Six motions for appointment were initially filed, but the court stated that only two remained pending: one from the Berkeley Lights Investor Group, represented by Bragar Eagel & Squire, P.C. and Bernstein Liebhard LLP, and one from Michael Damelio, represented by Hagens Berman Sobol Shapiro LLP.

The Private Securities Litigation Reform Act requires the court to select the plaintiff most capable of adequately representing the class. The court applied the Ninth Circuit’s three-step process: confirming the required public notice, identifying the plaintiff with the largest financial interest who satisfies the class-representative requirements, and considering whether that plaintiff is typical and adequate under Federal Rule of Civil Procedure 23.

Court’s Analysis

The court found that the first plaintiff’s notice complied with the statute. The notice was published in Business Wire on the same day the complaint was filed, identified the action and the Securities Exchange Act claims, described the proposed class and class period, and gave potential class members the deadline for seeking appointment as lead plaintiff.

Damelio claimed total losses of $124,348.14. The Berkeley Lights Investor Group argued that he improperly included $31,236.85 from a joint account, which would have reduced his claimed loss to $93,111. Damelio explained that he shared the account with his wife, was authorized to bring an action concerning it, and had his wife’s support. The court found that his declaration supported his ownership interest in those losses and concluded that he had the largest financial stake, making him the presumptive lead plaintiff.

The court also found that Damelio met the requirements of typicality and adequacy at this stage. Like the proposed class members, he purchased Berkeley Lights common stock during the class period and claimed damages from the defendants’ allegedly false or misleading statements or omissions. The court rejected concerns about his background, his reference to Berkeley Lights “securities” rather than specifically “common stock,” and the timing and wording of his earlier certification. The court found that he had provided enough background information, understood the scope of the proposed class, reviewed the current complaint, and reasonably explained the earlier certification.

Lead Counsel and Disposition

Damelio asked the court to approve Hagens Berman Sobol Shapiro LLP as lead counsel. The court deferred to his selection because it was not irrational and there was no serious evidence of self-dealing or a conflict of interest. The court also noted the firm’s extensive securities class-action experience.

The court granted Damelio’s motion, appointed him lead plaintiff for the proposed class, and approved Hagens Berman as lead counsel. The court denied all pending, unwithdrawn motions, including the remaining motions identified by docket numbers 21, 26, 38, 41, and 46. The order also set an initial case-management conference and directed counsel to meet and confer and submit a joint case-management statement. The order did not decide the underlying securities claims.