Mullen v. Terran Orbital, Inc.

Background

Jeffrey Mullen filed a proposed class action individually and on behalf of shareholders of Terran Orbital, Inc. who received their shares through Terran Orbital’s merger with a special purpose acquisition company. The complaint alleges violations of Sections 11(a) and 12(a)(2) of the Securities Act of 1933.

Notice and Lead-Plain​tiff Process

The court explained that the Private Securities Litigation Reform Act requires the plaintiff to publish notice of the action, the asserted claims, and the proposed class period in a widely circulated national business publication or wire service. The notice was published on February 17, 2023. The statute allows a member of the proposed class to seek appointment as lead plaintiff within 60 days after publication and requires the court to consider such motions within 90 days after publication. A lead plaintiff is the class member the court determines is most capable of adequately representing the class. If substantially similar class actions are filed and consolidation is sought, the court must wait to appoint a lead plaintiff until after deciding the consolidation motion.

Order

The court ordered that motions for appointment as lead plaintiff be served and filed by April 18, 2023. Opposition was due May 2, 2023, and replies were barred without prior court permission. The court scheduled a conference for May 10, 2023, at 4:00 p.m. to consider motions for appointment of lead plaintiff and lead counsel and for consolidation.

The court also ordered that if an amended complaint or related case was filed before a lead plaintiff was appointed, plaintiff’s counsel had to submit a letter within one week identifying differences from the original complaint and explaining why the court should not require republication of notice and set a new deadline for appointment motions. The named plaintiffs were required to promptly serve the order on each defendant. The order did not rule on whether the alleged Securities Act violations occurred or whether the claims were legally valid.

Disposition

This was a procedural order setting the notice, lead-plaintiff, lead-counsel, consolidation, and related-case procedures. Judge Jesse M. Furman did not grant or deny a motion concerning the merits of the claims.