In re Lucid Group, Inc. Securities Litigation
- James Donato
- 3:22-cv-02094
- U.S. District Court · Northern District of California
- 3
In In re Lucid Group, Inc. Securities Litigation, Judge Donato consolidated two securities-fraud cases, appointed AP7 lead plaintiff and Kessler Topaz lead counsel, and ordered case-management steps.
The order affects the shareholders pursuing the two consolidated securities-fraud class actions, Lucid Group, Inc. and its officers as defendants, Sjunde AP-Fonden (AP7) as lead plaintiff, and Kessler Topaz Meltzer & Check, LLP as lead counsel.
What happened
In In re Lucid Group, Inc. Securities Litigation, the court combined two shareholder class actions alleging that Lucid Group, Inc. and its officers committed securities fraud. The cases involved substantially similar facts and common legal and factual questions. The Goel case was closed, and the combined case proceeded under the lower-numbered docket.
The court appointed Sjunde AP-Fonden (AP7) as lead plaintiff. It found that AP7 had the largest financial interest and that no other plaintiff had presented evidence challenging AP7’s adequacy or the typicality of its claims. AP7 selected Kessler Topaz Meltzer & Check, LLP, which the court appointed as lead counsel.
Judge Donato directed the parties to propose a schedule for filing a consolidated complaint and responding to it, with the proposed schedule due October 14, 2022. He also required the securities-fraud allegations to be presented in a chart addressing each statement, including who made it, why it was misleading, and facts supporting a strong inference that the defendants acted knowingly or recklessly.
The detailed version
- In re Lucid Group, Inc. Securities Litigation · No. 3:22-cv-02094
- James Donato
- Sept. 30, 2022
Background
The order addressed two shareholder class actions: Mangino v. Lucid Group, Inc., No. 22-cv-02094-JD, and Goel v. Lucid Group, Inc., No. 22-cv-03176-JD. Both actions alleged securities fraud by Lucid Group, Inc. and its officers based on substantially similar facts. The court found common questions of law and fact and determined that the actions were related.
Consolidation
The court consolidated the two cases for all purposes, including trial, under Federal Rule of Civil Procedure 42(a). The consolidated action proceeded under the lower-numbered case, No. 22-cv-02094-JD, and was re-captioned In re Lucid Group, Inc. Securities Litigation. The Goel case, No. 22-cv-03176-JD, was closed. The court also directed the parties to file a motion to relate or a notice of pendency if they learned of other potentially related or overlapping cases.
Lead Plaintiff
The Private Securities Litigation Reform Act establishes a process for selecting a lead plaintiff in securities class actions. The court stated that the first-filed plaintiff, Victor W. Mangino, had adequately published notice of the action and the opportunity for other class members to seek appointment as lead plaintiff.
Seven lead-plaintiff applications were filed. The court stated that it was undisputed that Sjunde AP-Fonden (AP7) had the largest financial interest in the litigation. No other plaintiff presented evidence disputing AP7’s initial showing that its claims were typical and that it could adequately represent the class. The court appointed AP7 as lead plaintiff.
Lead Counsel
AP7 selected Kessler Topaz Meltzer & Check, LLP as counsel. The court found no reason to disagree with that selection and appointed the firm as lead counsel for the proposed class in the consolidated action.
Schedule and Complaint Requirements
The court directed the parties to meet and confer about a schedule for the lead plaintiff to file a consolidated complaint and for the defendants to respond. A proposed joint schedule was due October 14, 2022.
The court also directed the lead plaintiff to present the securities-fraud allegations in chart form, either within or attached to the consolidated complaint. For each statement, the chart had to identify the speaker or speakers, date or dates, and medium; the allegedly false or misleading statements; why the statements were false or misleading when made; and the facts supporting a strong inference of scienter, meaning that the defendants acted with the required state of mind. The chart would be treated as part of the complaint.
Disposition
Judge James Donato consolidated the two actions, closed the Goel case, appointed Sjunde AP-Fonden as lead plaintiff, appointed Kessler Topaz Meltzer & Check, LLP as lead counsel, and issued directions for the next case-management steps. The order did not decide whether the alleged securities fraud occurred or whether the defendants were liable.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.