IN RE GIGACLOUD TECHNOLOGY INC SECURITIES LITIGATION

Background

The opinion concerns two proposed class actions involving purchasers of GigaCloud securities between August 18, 2022, and September 27, 2023. Thomas J. Kinnally filed the first action on October 4, 2023, in the Central District of California. Rock Villanueva filed a separate action on October 30, 2023, in the same court, on behalf of the same proposed class. Both complaints alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.

The Villanueva Action was transferred to the Southern District of New York on December 6, 2023, and the Kinnally Action followed on December 7, 2023. The Private Securities Litigation Reform Act requires notice to potential class members and allows members of the proposed class to ask to be appointed lead plaintiff. When substantially similar cases are filed and someone seeks to combine them, the court must decide the consolidation request before appointing a lead plaintiff.

The Motions and Deadline

The required notices were published on October 5, 2023, for the Kinnally Action and October 30, 2023, for the Villanueva Action. Three movants filed motions on December 4, 2023, seeking consolidation of the two cases, appointment as lead plaintiff, and appointment of their chosen attorneys as lead counsel.

Because the cases had been transferred to the Southern District of New York, Judge Furman ordered that the deadline to seek appointment as lead plaintiff be extended, effective retroactively, to December 22, 2023. All movants who filed motions in the Central District of California had to refile them on the Southern District of New York dockets. Any motion relying on Ninth Circuit law had to be revised to focus on Second Circuit law. Oppositions were due January 10, 2024, and no reply could be filed without the court's prior permission.

Ruling and Further Procedures

The court ordered a conference for January 25, 2024, at 4:00 p.m. to consider motions for appointment of lead plaintiff and lead counsel and for consolidation. If an amended complaint or related case was filed before a lead plaintiff was appointed, counsel had to notify the court within one week of differences between the new and original allegations, including differences in claims or proposed class periods. Counsel also had to explain why the court should not require new notice and establish a new deadline for lead-plaintiff motions.

The court further ordered the named plaintiffs to promptly serve the order on the defendants and on any other party that had filed a lead-plaintiff motion in the Central District of California. Proof of service had to be filed by December 18, 2023. The order addressed case management and scheduling; it did not resolve whether the alleged securities-law violations occurred.