Li v. Spirit AeroSystems Holdings, Inc.
- Paul Engelmayer
- 1:23-cv-03722
- U.S. District Court · Southern District of New York
- 6
In Li v. Spirit AeroSystems, Judge Engelmayer appointed Hang Li lead plaintiff and two law firms class co-counsel in a securities lawsuit.
Hang Li was appointed to represent the proposed class of people who purchased Spirit AeroSystems Holdings, Inc. shares during the stated class period. Glancy Prongay & Murray LLP and Holzer & Holzer LLC were appointed as class co-counsel. The order concerned representation of the proposed class and did not determine whether the securities allegations were valid.
What happened
In Hang Li v. Spirit AeroSystems Holdings, Inc., Hang Li brought a proposed securities class action for people who bought Spirit shares between April 8, 2020, and April 13, 2023. He alleged that Spirit made misleadingly positive statements about its business and relationship with Boeing before a disclosure about a faulty Boeing 737 MAX component was followed by a substantial share-price drop.
Li asked to be appointed lead plaintiff and to have Glancy Prongay & Murray LLP and Holzer & Holzer LLC appointed as class counsel. The court reviewed whether Li had the largest known financial interest, whether his claims were typical of the proposed class, and whether he and his lawyers could adequately represent the class.
Judge Engelmayer granted the motion. He appointed Li as lead plaintiff and Glancy Prongay & Murray LLP and Holzer & Holzer LLC as class co-counsel; the opinion addressed the leadership and counsel appointments, not whether the securities allegations were ultimately true.
The detailed version
- Li v. Spirit AeroSystems Holdings, Inc. · No. 1:23-cv-03722
- Paul Engelmayer
- Oct. 20, 2023
Background
Hang Li filed a proposed securities class action on behalf of people who purchased Spirit AeroSystems Holdings, Inc. shares between April 8, 2020, and April 13, 2023. The complaint alleged that Spirit made positive statements about its business, operations, prospects, relationship with Boeing, and 737 MAX orders. After Boeing announced that it would halt 737 MAX deliveries because of a supplier-control problem involving a fuselage component, Bloomberg identified Spirit as the supplier, and Spirit's share price fell 20.7% the next day.
Li moved under the Private Securities Litigation Reform Act (PSLRA) to be appointed lead plaintiff and to have Glancy Prongay & Murray LLP and Holzer & Holzer LLC appointed as lead counsel. The opinion states that the motion was unopposed. It also recounts that Michael D. Joseph filed a competing motion and that Li and Joseph later stipulated to Li's appointment and the appointment of Li's counsel as class counsel.
Lead Plaintiff Appointment
The PSLRA directs the court to appoint the person most capable of adequately representing the proposed class. The statute creates a presumption in favor of a person who filed the complaint or responded to the public notice, has the largest financial interest in the relief sought, and satisfies the relevant requirements of Federal Rule of Civil Procedure 23.
Li certified that he purchased 191,246 Spirit shares during the class period and suffered a total loss of $945,183.77 when the share price fell. Because no prospective lead plaintiff with a larger financial interest came forward, the court treated Li's financial interest as sufficient for this stage.
The court considered Rule 23's typicality and adequacy requirements. Typicality asks whether the lead plaintiff's claims arise from the same events and legal theories as the other class members' claims. Adequacy asks whether the plaintiff has interests aligned with the class and has selected qualified counsel. The court found that Li's alleged purchases and losses arose from the same conduct alleged on behalf of the class. It also found that Li was willing to perform the lead plaintiff's duties, that his lawyers had significant securities-fraud experience, and that there was no indication that his interests conflicted with the class.
The court therefore found Li to be the most adequate plaintiff and appointed him as lead plaintiff.
Class Counsel Appointment
The PSLRA allows the lead plaintiff to select counsel, subject to court approval. The court reviewed the submissions describing Glancy Prongay & Murray LLP's and Holzer & Holzer LLC's backgrounds and experience, including their work in securities class actions. It found both firms well qualified and appointed them as class co-counsel.
Disposition
The court granted Li's unopposed motion, appointed Hang Li as lead plaintiff, appointed Glancy Prongay & Murray LLP and Holzer & Holzer LLC as class co-counsel, and directed the Clerk of Court to terminate the motions pending at docket numbers 8 and 11. This order decided who would represent the proposed class and which lawyers would serve as class counsel; it did not decide the ultimate merits of the securities claims.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.