Solomon v. Sprint Corporation

Background

Isaac Solomon moved for appointment as lead plaintiff and for approval of Pomerantz LLP as lead counsel in a proposed class action against Sprint Corporation, Michael Combes, and Andrew Davies. The claims concern allegedly misleading statements by Sprint about business growth measurements between January and April 2019 and are brought under Sections 10(b) and 20(a) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5.

An earlier related action had been filed by another putative class member on behalf of purchasers of Sprint common stock. That action was voluntarily dismissed three days after Solomon filed this action and before the court ruled on a motion to consolidate it with this case or appoint a lead plaintiff. Solomon had timely sought appointment in the earlier related proceeding. Judge George B. Daniels later ordered that motion to be treated as timely in this case, and Solomon refiled the motion here. The case was then transferred to Judge Vyskocil.

Lead Plaintiff Standard

Under the Private Securities Litigation Reform Act, the court must appoint the member of the proposed class who is most capable of adequately representing the class. The statute creates a rebuttable presumption in favor of a person who filed the complaint or moved for appointment, has the largest financial interest in the relief sought, and otherwise satisfies the requirements of Federal Rule of Civil Procedure 23. That presumption can be defeated by evidence that the person will not fairly and adequately protect the class or has defenses unique to that person.

The court found that Solomon was the only person who had filed an action asserting these particular claims against the defendants and had sought appointment as lead plaintiff. The court therefore found his adequacy to represent the class and pursue the claims sufficient. Solomon claimed a loss of $65, while the plaintiff in the earlier related proceeding had asserted an approximately $27 loss. Because Solomon was the only person seeking appointment and had the larger alleged loss, the court found that he was presumptively the most adequate plaintiff. No one submitted evidence or argument rebutting that presumption, and the court found that Solomon had made a sufficient preliminary showing that he satisfied Rule 23’s requirements.

Lead Counsel

The court also approved Solomon’s selection of Pomerantz LLP as lead counsel. The court relied on materials describing Pomerantz as an experienced securities-litigation firm, including its reported recoveries for investors and prior appointments as lead counsel in proposed class actions in the Southern District of New York.

Disposition

Judge Vyskocil granted Solomon’s motion. Solomon was appointed lead plaintiff, and Pomerantz LLP was approved as lead counsel. Pomerantz was directed to coordinate pleadings, motions, discovery, depositions, pretrial conferences, settlement negotiations, trial preparation, trial, and other matters concerning prosecution or resolution of the claims.