Stirling v. Ollies Bargain Outlet Holdings, Inc.

Background

This securities class action was filed against Ollie’s Bargain Outlet Holdings, Inc. and several of its officers and directors. After notice of the action was published as required by the Private Securities Litigation Reform Act of 1995 (PSLRA), six people filed timely motions seeking appointment as lead plaintiff.

Bruce Elder and Jinjin Chai later withdrew their motions. The remaining movants were Daniel Riordan, Ronald Jackson, Bernard L. Maloney, III, and Nathan Severe. The original six movants also filed a joint stipulation proposing that Maloney and Severe be appointed lead plaintiffs.

Lead-Plain­tiff Standard

The PSLRA requires the court to appoint the person or group most capable of adequately representing the proposed class. The statute generally presumes that the most adequate plaintiff is the person or group that responded to the notice, has the largest financial interest in the requested relief, and satisfies the relevant requirements of Federal Rule of Civil Procedure 23.

At this stage, the court required only a preliminary showing of two Rule 23 requirements: typicality and adequacy. Typicality means that the proposed lead plaintiffs’ claims arise from the same events as the other class members’ claims. Adequacy requires qualified counsel, no conflict with the class, and enough financial interest to encourage vigorous representation.

Court’s Analysis

The court found that Maloney and Severe had responded to the required notice and had the largest financial interests in the relief sought by the class. Their claims were typical because they sought recovery for the decline in the price of Ollie’s securities, the same type of recovery sought by the class.

The court also found that their significant financial losses gave them sufficient incentive to represent the class vigorously, that there was no evidence of a conflict between their interests and those of the class, and that their selected law firms were qualified and experienced.

The PSLRA strongly favors approving counsel selected by a properly chosen lead plaintiff. Maloney selected Hagens Berman Sobol Shapiro LLP, and Severe selected Bernstein Liebhard LLP. The court approved both selections as lead counsel.

Disposition

The court granted the motions of Bernard L. Maloney, III and Nathan Severe to be appointed lead plaintiffs and to have their counsel selections approved. It denied the motions of Daniel Riordan, Bruce Elder, Jinjin Chai, and Ronald Jackson to be appointed lead plaintiff. The clerk was directed to close the six listed motions.

The opinion’s conclusion refers to Bernard L. Maloney as “Bernard L. Maloney, II,” while the caption, background, analysis, and opening disposition identify him as “Bernard L. Maloney, III.”