Gambrill v. CS Disco, Inc.
- Lewis Kaplan
- 1:23-cv-08270
- U.S. District Court · Southern District of New York
- 2
In Gambrill v. CS Disco, Inc., Judge Netburn deferred lead-plaintiff appointment and required Bert Pluymen to supplement his application.
The order affected the competing lead-plaintiff applicants—Lynn Gambrill, Randal Black, and Bert Pluymen—and the proposed securities class. It also addressed the proposed appointment of The Rosen Law Firm as lead counsel.
What happened
In Gambrill v. CS Disco, Inc., Lynn Gambrill withdrew her request to be appointed lead plaintiff in this securities class action. Randal Black did not oppose Bert Pluymen’s appointment, although he had not withdrawn his own motion. Pluymen reported losses of approximately $40,583.30 from purchases of CS Disco securities, giving him the largest financial interest among the applicants.
The court explained that securities law requires it to appoint the applicant with the largest financial interest who also meets the requirements for representing the class. That applicant is presumed to be the most adequate plaintiff, but Gambrill and Black identified problems with Pluymen’s application.
Magistrate Judge Sarah Netburn adjourned the scheduled conference and ordered Pluymen to file a supplemental affidavit addressing those problems by December 13, 2023. The court said it would appoint him as lead plaintiff if satisfied that he was adequate, and directed his lawyers to submit a proposed order naming The Rosen Law Firm as lead counsel. The Clerk was asked to terminate the motion at ECF No. 29.
The detailed version
- Gambrill v. CS Disco, Inc. · No. 1:23-cv-08270
- Lewis Kaplan
- Dec. 8, 2023
Background
Lynn Gambrill brought the action on behalf of herself and others similarly situated against CS Disco, Inc., KTWI Camara, and Michael Lafair. The opinion concerns competing requests for appointment as lead plaintiff in a securities class action.
Gambrill withdrew her motion to be appointed lead plaintiff. Randal Black did not oppose Bert Pluymen’s appointment, but had not withdrawn his own motion. Pluymen stated that he lost approximately $40,583.30 in connection with purchases of CS Disco securities.
Court’s analysis
Under Federal Rule of Civil Procedure 42(a) and Section 21D(a)(3) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act, the court must appoint the “most adequate plaintiff” as lead plaintiff. The court explained that the applicant with the largest financial interest who also satisfies the requirements of Rule 23 is generally presumed to be the most adequate plaintiff.
Because Pluymen alleged the largest financial interest, the court said he was presumed to be the most adequate plaintiff. Gambrill and Black nevertheless identified deficiencies in his application that required further attention.
Ruling and next steps
Magistrate Judge Sarah Netburn adjourned the conference scheduled for December 11, 2023. She ordered Pluymen to file a supplemental affidavit addressing the issues raised in Gambrill’s and Black’s briefs by December 13, 2023. The court stated that, assuming it was satisfied that Pluymen was an adequate lead plaintiff, he would be appointed. By the same date, his counsel was directed to file a proposed order appointing Pluymen as lead plaintiff and The Rosen Law Firm as lead counsel for him and the class. The parties were then to follow the schedule previously ordered by the court. The Clerk was asked to terminate the motion at ECF No. 29.
The order did not itself state that Pluymen had been appointed lead plaintiff; it conditioned that appointment on the court’s further review.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.