City of Hollywood Firefighters' Pension System v. Wells Fargo & Company
- Jon Tigar
- 4:23-cv-02445
- U.S. District Court · Northern District of California
- 6
In City of Hollywood Firefighters’ Pension System v. Wells Fargo & Company, Judge Tigar consolidated three cases and appointed Hollywood lead plaintiff and Kessler Topaz lead counsel.
The ruling affected the three shareholder plaintiffs, Wells Fargo & Company and its directors and officers, and the competing law firms seeking leadership roles. It established the consolidated case, selected City of Hollywood Firefighters’ Pension System as lead plaintiff, and selected Kessler Topaz Meltzer & Check, LLP as lead counsel.
What happened
City of Hollywood Firefighters’ Pension System v. Wells Fargo & Company involved three shareholder cases alleging that Wells Fargo’s directors and officers failed to oversee compliance with regulatory orders. The plaintiffs agreed that the cases shared important legal and factual questions.
The court also considered competing requests to choose a lead plaintiff and lead counsel. It found that all proposed plaintiffs and law firms were capable of representing shareholders, but concluded that Hollywood had the longest period for bringing claims because it had made an earlier demand for company records.
Judge Jon S. Tigar consolidated the three cases under the Hollywood case, appointed City of Hollywood Firefighters’ Pension System as lead plaintiff, and appointed Kessler Topaz Meltzer & Check, LLP as lead counsel. The court ordered the lead plaintiff to file a consolidated complaint or identify an existing complaint as the operative complaint within 60 days.
The detailed version
- City of Hollywood Firefighters' Pension System v. Wells Fargo & Company · No. 4:23-cv-02445
- Jon Tigar
- Jan. 2, 2024
Background
The court addressed three motions to consolidate three shareholder derivative actions and competing motions to appoint a lead plaintiff and lead counsel:
- City of Hollywood Firefighters’ Pension System v. Wells Fargo & Company, No. 23-cv-02445-JST; - Martin v. Black et al., No. 23-cv-03564-JST; and - the Fire and Police Pension Association of Colorado action, No. 23-cv-05112-JST.
The plaintiffs alleged that Wells Fargo’s directors and officers breached fiduciary duties by failing to oversee the company’s compliance with regulatory consent orders. The court stated that the actions involved numerous common legal and factual questions.
Consolidation
Under Federal Rule of Civil Procedure 42(a), a court may consolidate cases that involve common questions of law or fact. The court concluded that consolidation would promote convenience and the fair resolution of the claims. It therefore granted consolidation of the Martin, Fire and Police Pension Association of Colorado, and Hollywood actions under the Hollywood Action.
Lead Plaintiff and Lead Counsel
Under Federal Rule of Civil Procedure 23.1, a lead plaintiff must fairly and adequately represent similarly situated shareholders or members. The court found that each proposed lead plaintiff was a sophisticated institutional investor with experience serving in similar litigation and a significant financial interest in Wells Fargo. It also found that each proposed law firm had substantial experience serving as lead counsel in shareholder derivative litigation.
The court selected City of Hollywood Firefighters’ Pension System because its claims covered the longest actionable period. Hollywood served a records demand on September 27, 2021, allowing it to timely assert claims based on conduct dating back to September 27, 2018. The Fire and Police Pension Association of Colorado made its demand on March 17, 2023, while Local 33 did not make a records demand and could assert claims based only on conduct dating back three years before filing its complaint. The court concluded that allegations from the earlier period could be important to liability and damages.
The court rejected the argument that differences in the proposed plaintiffs’ shareholdings made a meaningful difference in the vigor of representation. It also concluded that any unique information or claim in one complaint could be included in a consolidated amended complaint regardless of which plaintiff or counsel was selected.
Ruling
Judge Jon S. Tigar consolidated the three actions under the Hollywood Action, appointed City of Hollywood Firefighters’ Pension System as Lead Plaintiff, and appointed Kessler Topaz Meltzer & Check, LLP as Lead Counsel. The court ordered the Lead Plaintiff to serve and file a consolidated complaint or designate a previously filed complaint as the operative complaint within 60 days of the order.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.