The Buhrke Family Revocable Trust v. U.S. Bancorp

Background

The Buhrke Family Revocable Trust brought a proposed securities class action against U.S. Bancorp, Andrew Cecere, Terry Dolan, and Jodi Richard. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false and misleading statements about U.S. Bancorp’s business, operations, and compliance policies. The proposed class consists of people other than the defendants who purchased or otherwise acquired U.S. Bancorp securities between August 1, 2019, and July 28, 2022.

The Trust published notice of the action and the deadline for motions seeking appointment as lead plaintiff. The Trust and the Funds—Teamsters Local 710 Pension Fund and Ohio Carpenters Pension Fund—each moved for appointment as lead plaintiff under the Private Securities Litigation Reform Act. The Funds proposed Robbins Geller Rudman & Dowd LLP as lead counsel; the Trust proposed Lowey Dannenberg, P.C. The Trust later stated that it did not appear to have the largest financial interest and did not oppose the Funds’ motion.

Lead-Plaintiff Analysis

The court explained that the Private Securities Litigation Reform Act generally requires appointment of the class member most capable of adequately representing the class. The statute creates a rebuttable presumption in favor of the movant that timely files, has the largest financial interest, and makes the required preliminary showing under Rule 23 of the Federal Rules of Civil Procedure. At the lead-plaintiff stage, the court considered whether the Funds had made a preliminary showing of typicality and adequacy.

The Funds reported purchasing $9,976,717.50 in U.S. Bancorp securities, including 150,717 common shares, and selling those securities for $8,606,125.12, resulting in reported losses of $1,370,592.38. The Trust reported purchasing 20,000 shares for $500,000 and suffering reported losses of $103,600. The court found that the Funds had the largest financial interest and that their losses were more than thirteen times greater than the Trust’s reported losses.

The court also found that the Funds had made the required preliminary showing of typicality and adequacy. Their claims arose from the same alleged conduct as the proposed class members’ claims, and the court found no identified conflict or unique defense preventing the Funds from adequately representing the class. The Trust’s non-opposition left the Funds as the only remaining movant, but the court still independently considered the statutory factors.

Rulings

The court deemed the Trust’s motion abandoned and denied it. The Funds’ motion to be appointed as lead plaintiffs was granted. The Funds were appointed as lead plaintiffs for the proposed class.

The court also found Robbins Geller qualified to serve as lead counsel based on its experience in complex securities litigation and granted the Funds’ motion to appoint that firm as lead counsel. Robbins Geller was assigned responsibility for pleadings, motions, discovery and depositions, settlement negotiations, pretrial proceedings, trial, and other matters concerning prosecution or resolution of the action.

The order did not adjudicate the merits of the securities-fraud allegations. It also directed the parties to meet and confer about a briefing schedule for defendants’ response to the complaint or any amended or consolidated complaint. Judge John P. Cronan had referred the matter to Judge Sarah L. Cave for general pretrial supervision, including non-dispositive pretrial motions.