In re: Apogee Enterprises, Inc. Securities Litigation

Background

Murray Mayer filed a proposed class action against Apogee Enterprises, Inc., and its CEO and CFO, Joseph F. Puishys and James S. Porter. He alleged that the defendants violated the Securities Exchange Act of 1934 by making false or misleading statements, or concealing adverse information, about Apogee’s business, operations, and prospects in order to inflate its stock price.

Mayer asserted a claim under Section 10(b) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5 against all defendants. He also asserted a control-person claim under Section 20(a) against Puishys and Porter. The proposed class consisted of investors who purchased Apogee common stock between June 28, 2018, and September 17, 2018.

Lead-plaintiff motion

The City of Cape Coral Municipal Firefighters’ Retirement Plan and the City of Cape Coral Municipal Police Officers’ Retirement Plan jointly moved for appointment as lead plaintiffs and for approval of their selected counsel. No party opposed the motion, and no other person or entity sought appointment as lead plaintiff.

Under the Private Securities Litigation Reform Act, the court must appoint as lead plaintiff the class member most capable of adequately representing the class. The court considered whether the competing applicants were eligible, which applicant had the largest financial interest, and whether that applicant could fairly and adequately protect the class’s interests.

Mayer had purchased 400 shares of Apogee stock on September 17, 2018. The retirement plans had purchased a combined 8,460 shares on August 14, 2018: 4,270 shares for the Firefighters’ Retirement Plan and 4,190 shares for the Police Officers’ Retirement Plan. The court found that the plans had a substantially larger financial interest than Mayer, whether considered separately or together. The plans also paid a higher price per share and had held Apogee stock longer.

Adequacy and counsel

The court found no reason to doubt that the retirement plans could adequately represent the proposed class. It described them as institutional investors with the ability, willingness, and resources to prosecute the case fully and vigorously. Their interests were aligned with the proposed class because they sought recovery for losses allegedly caused by the securities violations.

The plans selected Robbins Geller Rudman & Dowd LLP as lead counsel and Zimmerman Reed LLP as liaison counsel. The court found that the selected lead counsel had experience in securities litigation and had obtained favorable results for clients. It therefore found no reason to reject the plans’ choice of counsel.

Disposition

Judge Steven E. Rau granted the motion for appointment as lead plaintiff and approval of selection of counsel. The court appointed both retirement plans as lead plaintiffs, appointed Robbins Geller Rudman & Dowd LLP as lead counsel, and approved Zimmerman Reed LLP as liaison counsel. The order addressed case organization and representation; it did not decide whether the alleged securities-law violations occurred.