The New York City Fire Department Pension Fund v. Coupang, Inc.

Background

David Choi brought a securities-fraud class action under Sections 11 and 15 of the Securities Act of 1933 against Coupang, Inc., certain Coupang officers and directors, and Goldman Sachs & Co. LLC, Allen & Company LLC, and J.P. Morgan Securities LLC. Choi alleged that Coupang’s registration statement for its March 2021 initial public offering contained materially untrue statements, omitted important information, and failed to make required disclosures. The alleged omissions concerned, among other things, Coupang’s practices involving suppliers, search algorithms, product reviews, customer pricing, and workplace conditions. The opinion states that these allegations were recited for background and were not factual findings.

Motions for Lead Plaintiff and Counsel

Four movants initially sought appointment as lead plaintiff and approval of their chosen lead counsel. The New York City Public Pension Funds also sought to combine this case with a related action. ALSAR Limited Partnership, Rubin Lerer, and the Office of the Treasurer of the State of North Carolina on behalf of the North Carolina Retirement Systems and New Mexico State Investment Council withdrew their applications. The court granted those withdrawals and stated that the withdrawn movants’ requests for appointment as lead plaintiff and approval of lead counsel were denied as moot.

Under the Private Securities Litigation Reform Act, the court appoints the class member or members most capable of adequately representing the class. The court generally presumes that the appropriate lead plaintiff is the applicant with the largest financial interest who also satisfies the relevant requirements of Federal Rule of Civil Procedure 23. For this purpose, Rule 23’s typicality requirement asks whether the proposed representative’s claims arise from the same conduct and injuries as the class’s claims, while its adequacy requirement asks whether the representative and counsel can fairly protect the class’s interests.

The court found that the New York City Public Pension Funds had the largest financial interest. The funds purchased 4,687,306 Coupang shares, spent $125,664,776, retained 4,570,986 shares at the end of the class period, and suffered approximately $41,281,450 in losses. The court also found that the funds made the required initial showing of typicality and adequacy. It noted that the funds were an institutional investor, had significant losses, had no apparent interests adverse to other class members, and selected counsel experienced in securities litigation.

Consolidation

The New York City Public Pension Funds withdrew their request to combine this case with the related action after that action was voluntarily dismissed without prejudice. The court therefore denied the request for consolidation as moot and did not assess its merits.

Ruling

The court granted the New York City Public Pension Funds’ motion for appointment as lead plaintiff and approval of lead counsel. It approved the funds’ selection of Pomerantz LLP and appointed that firm as lead counsel. The court denied the consolidation motion as moot. It also stated that the remaining motions of Rubin Lerer, ALSAR Limited Partnership, and the Office of the Treasurer of the State of North Carolina and New Mexico, which had been withdrawn, were denied as moot.

The court directed the New York City Public Pension Funds to file an amended consolidated complaint or designate an operative complaint within 60 days after the opinion’s issuance. The defendants must answer or otherwise respond within 60 days after that filing or designation. Judge Broderick also directed the clerk to terminate the pending motions at docket entries 18, 20, 25, and 29.