Rosi v. Aclaris Therapeutics, Inc.
- Lewis Liman
- 1:19-cv-07118-LJL
- U.S. District Court · Southern District of New York
- 11
In Rosi v. Aclaris, Judge Cott consolidated the cases, named Fulcher lead plaintiff, approved Pomerantz, and denied Rosi’s competing requests.
The ruling affected Linda Rosi, Robert Fulcher, the proposed class of people who acquired Aclaris stock during the stated class period, the defendants, and the proposed class counsel. Fulcher became lead plaintiff and Pomerantz LLP became lead counsel; Rosi’s competing lead-plaintiff and counsel requests were denied.
What happened
Rosi v. Aclaris Therapeutics, Inc. involved two proposed securities-fraud class actions alleging that Aclaris Therapeutics, Neal Walker, and Frank Ruffo made misleading statements about ESKATA. Both cases covered people who bought or acquired the company’s stock between May 8, 2018, and June 20, 2019.
The court consolidated the two cases under docket number 19-CV-7118. Robert Fulcher had the larger claimed loss—$22,521 compared with an apparent $3,761.35 loss for Linda Rosi—and Rosi did not oppose Fulcher’s appointment. The court also found Fulcher’s claims typical of the proposed class and found him and his chosen firm, Pomerantz LLP, adequate to represent it.
Judge Cott granted Fulcher’s motion in its entirety and granted Rosi’s motion only to the extent it sought consolidation. The court appointed Fulcher lead plaintiff, approved Pomerantz LLP as lead counsel, denied Rosi’s request to become lead plaintiff, and denied her request to approve Glancy Prongay & Murray LLP as lead counsel.
The detailed version
- Rosi v. Aclaris Therapeutics, Inc. · No. 1:19-cv-07118-LJL
- Lewis Liman
- Nov. 6, 2019
Background
Linda Rosi and Robert Fulcher filed separate securities-fraud class actions against Aclaris Therapeutics, Inc., Neal Walker, and Frank Ruffo. They alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5. The alleged misconduct concerned statements and omissions about ESKATA, a hydrogen-peroxide topical solution used to treat raised seborrheic keratosis.
The proposed class consisted of people who purchased or otherwise acquired Aclaris stock between May 8, 2018, and June 20, 2019. The complaints alleged that, on June 20, 2019, the Food and Drug Administration stated that an ESKATA advertisement made false or misleading claims about the product’s risks and effectiveness. The complaints further alleged that the company’s stock price fell more than 11 percent over two trading sessions and that class members suffered losses.
Both plaintiffs moved to consolidate the cases, be appointed lead plaintiff, and obtain approval of their selected lead counsel. Fulcher sought approval of Pomerantz LLP, while Rosi sought approval of Glancy Prongay & Murray LLP. The defendants did not take a position on the motions.
Consolidation
Under Federal Rule of Civil Procedure 42(a), cases involving common questions of law or fact may be consolidated. The court found consolidation appropriate because the two actions asserted virtually identical claims based on virtually identical allegations and the same federal securities laws. No party objected, so the court found no identified prejudice from consolidation.
The court consolidated the actions for all purposes and directed that future filings be made under the lower docket number, 19-CV-7118.
Lead Plaintiff
The Private Securities Litigation Reform Act requires the court to presume that the most adequate plaintiff is the timely applicant with the largest financial interest who also meets the relevant requirements of Federal Rule of Civil Procedure 23. The court found that both Rosi and Fulcher timely sought appointment.
Fulcher alleged losses of $22,521. The court determined that Rosi appeared to have losses of approximately $3,761.35 and noted that Rosi acknowledged she did not have the largest financial interest. No other plaintiff showed a larger financial stake.
The court also found that Fulcher made the required preliminary showing of typicality and adequacy under Rule 23. His claims arose from the same alleged conduct as the other class members’ claims, and the court found no conflict or unique defense that would prevent him from adequately representing the class. The court therefore appointed Fulcher as lead plaintiff.
Lead Counsel
The Act permits the most adequate plaintiff, subject to court approval, to select counsel for the class. The court found that Pomerantz LLP had extensive securities-class-action experience and could adequately and effectively represent the class. It approved Fulcher’s selection of Pomerantz LLP as lead counsel.
Disposition
The court granted Fulcher and Rosi’s motions for consolidation. It granted Fulcher’s motion for appointment as lead plaintiff and approved Pomerantz LLP as lead counsel. It denied Rosi’s motion for appointment as lead plaintiff and denied her motion for approval of Glancy Prongay & Murray LLP as lead counsel. The court directed the Clerk to mark Rosi’s motion as granted in part and denied in part, change the caption to identify Fulcher as lead plaintiff, and close the two motion docket entries. The court also directed lead counsel to meet with defense counsel and submit a proposed schedule for an amended complaint and anticipated motion-to-dismiss briefing.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.