Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 1 of 6
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`IN RE APPLE INC. STOCKHOLDER
`DERIVATIVE LITIGATION
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`LEAD CASE NO. 19-cv-05153-YGR
`Consolidated with Case Nos. 19-cv-05863-
`YGR, 19-cv-05881-YGR, 19-cv-08246-
`YGR)
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`ORDER APPOINTING LEAD COUNSEL
`Re: Dkt. Nos. 21, 23
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`Before the Court are competing motions to appoint lead counsel filed by plaintiff Alan
`Bankhalter (“Bankhalter”), who seeks appointment of Pritzker Levine LLP (“Pritzker”) and
`Gainey McKenna & Egleston (“GM&E”); and plaintiffs Terrence Zehrer, Andrew Fine, Tammy
`Federman SEP/IRA, and the Rosenfeld Family Foundation (collectively, “ZFFR”), who seek
`appointment of Robbins LLP (“Robbins”) and WeissLaw LLP (“WeissLaw”). For the reasons set
`forth below, the Court appoints the latter.
`District courts regularly appoint lead counsel in complex consolidated suits. See Vincent v.
`Hughes Air West, Inc., 557 F.2d 759, 774 (9th Cir. 1979). In doing so here, the Court is mindful
`that the “guiding principle” is who will “best serve the interest of the plaintiffs.” Millman ex rel.
`Friedman’s, Inc. v. Brinkley, 2004 WL 2284505, at *3 (N.D. Ga. Oct. 1, 2004) (citation omitted).
`Five of six plaintiffs in this consolidated suit support ZFFR’s motion to appoint Robbins and
`WeissLaw as lead counsel. Bankhalter is the only plaintiff who opposes the motion and moves for
`appointment of his own counsel. Although not dispositive, the fact that a large majority of
`plaintiffs favor one of two proposed leadership structures carries considerable weight.
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`Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 2 of 6
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`Counsel’s experience also is a relevant factor in making a lead counsel appointment. See
`Hacker v. Peterschmidt, 2006 WL 2925683, at *5 (N.D. Cal. Oct. 12, 2006) (considering
`counsel’s “extensive experience in prosecuting shareholder derivative litigation”). Here, each of
`the competing motions details the experience of proposed lead counsel in complex class and
`individual litigation, including in securities cases. However, while Bankhalter claims that the
`firms have similar experience, ZFFR argues that GM&E and Pritzker have fewer relevant,
`successful experiences litigating derivative cases than Robbins and WeissLaw. For example,
`ZFFR presents evidence that GM&E has never secured a monetary recovery in a derivative action
`in which it served as lead counsel; overstates its role in certain cases; and has not engaged in
`extensive litigation in a derivative action. ZFFR further notes that Pritzker points to only two
`derivative actions in which it has been involved in any capacity. In contrast, ZFFR’s counsel
`appears to have recovered substantial sums of money in extensively litigated derivative actions,
`including ones in which it appeared as lead or co-lead counsel. On balance, ZFFR appears to have
`an edge with respect to its counsel’s experience.1
`Another important factor in selecting lead counsel is the work performed by counsel in
`pursuing the claims in the action. See Millman, 2004 WL 2284505, at *3. Bankhalter claims that
`because three of the four consolidated actions were filed near in time to one another and all four
`actions have been stayed, all proposed lead counsel likely have done the same amount of work in
`this case. ZFFR presents contrary evidence, however, demonstrating that its proposed lead
`counsel has expended more effort litigating the case to this point, albeit on relatively routine
`matters. Thus, on August 19, 2019, Robbins commenced the first of the four consolidated actions,
`filing a complaint on behalf of plaintiff Terrence Zehrer.2 Robbins later led negotiations among
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`1 Bankhalter notes that he is the only movant to propose appointment of a firm (Pritzker)
`based in this district, where a substantial portion of the transactions and wrongdoings giving rise
`to the claims in this action occurred. Given the benefits of technology, and in light of the fact that
`ZFFR proposes lead counsel with a presence nearby, in Southern California, Pritzker’s location
`does not have a strong bearing on the appointment of lead counsel.
`2 Courts have held that the first-to-file factor may be considered an “objective tie-breaker”
`in appointing lead counsel where other factors “do[] not tilt heavily in either direction.” Biondi v.
`Scrushy, 820 A.2d 1148, 1151 (Del. Ch. 2003), aff’d sub nom. In re HealthSouth Corp.
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`Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 3 of 6
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`plaintiffs’ counsel and with defense counsel regarding initial scheduling and case management,
`prepared and circulated the stipulation and proposed order to consolidate and stay the related
`actions, and secured the agreement of most plaintiffs to the its proposed leadership structure. In
`addition, WeissLaw invested time and effort in making a books and records demand on Apple Inc.
`for documents relevant to this action. Even if counsel’s efforts have involved routine legal work,
`they have demonstrated a commitment to progressing the action, which weighs in ZFFR’s favor.3
`Next, the parties dispute whether Bankhalter’s complaint contains a fatal pleading error,
`and if so, whether this error reflects counsel’s lack of knowledge of the applicable law. ZFFR
`contends that Bankhalter’s complaint is subject to dismissal for failure to plead the specific dates
`on which Bankhalter purchased Apple Inc. stock. Bankhalter counters that Rule 23.1 contains no
`such requirement and ZFFR fails to cite binding Ninth Circuit authority for this proposition.
`Bankhalter’s argument persuades to a certain extent: The Ninth Circuit has interpreted Rule 23.1
`to require that a derivative plaintiff “be a shareholder at the time of the alleged wrongful acts” and
`“retain ownership of the stock for the duration of the lawsuit,” Lewis v. Chiles, 719 F.2d 1044,
`1047 (9th Cir. 1983), but does not appear to require the plaintiff to state the specific dates on
`which it purchased stock. Nevertheless, Bankhalter’s allegations may still fall short. Indeed, the
`case on which Bankhalter relies suggests that allegations that he “is a current Apple shareholder
`during the relevant period” and “will continue to hold his Apple shares throughout the pendency
`of this action,” are insufficient under Rule 23.1. See In re Corinthian Colleges, Inc. S’holder
`Derivative Litig., No. SA CV 10-1597-GHK, 2012 WL 8502955, at *14 (C.D. Cal. Jan. 30, 2012)
`(distinguishing allegations that plaintiff held stock during the “relevant period” with allegations
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`Shareholders Litig., 847 A.2d 1121 (Del. 2004). While not determinative, this factor weighs in
`favor of ZFFR.
`3 Bankhalter claims that his proposed lead counsel investigated the underlying conduct and
`potential legal claims before filing his complaint, continue to perform fact and legal research
`during the pendency of the stay, and worked with plaintiffs’ counsel and defense counsel to
`organize and coordinate the litigation. With respect to the first two assertions, there is no evidence
`that GM&E or Pritzker has done more work than any other firm that filed a complaint in this case.
`As to the last point, ZFFR proffers evidence that GM&E and Pritzker had little communication
`with other plaintiffs’ counsel regarding case management.
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`Northern District of California
`United States District Court
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`Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 4 of 6
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`that plaintiff held stock “at the time of the transactions and events complained of,” finding the
`latter sufficient because it “track[s] the language of Rule 23.1”). At this juncture, the Court need
`not and does not rule on the sufficiency of the pleadings. The Court addresses this issue only to
`note that such a pleading vulnerability casts doubt on Bankhalter’s arguments that his counsel are
`best suited represent plaintiffs in this case.4
`For the foregoing reasons, the Court exercises its discretion and hereby ORDERS:
`ZFFR’s motion is GRANTED.5 Co-Lead Counsel for plaintiffs for the conduct of this
`1.
`Consolidated Action shall be:
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`ROBBINS LLP
`BRIAN J. ROBBINS (190624)
`CRAIG W. SMITH (164886)
`SHANE P. SANDERS (237146)
`ASHLEY R. RIFKIN (246602)
`STEVEN R. WEDEKING (235759)
`5040 Shoreham Place
`San Diego, CA 92122
`Telephone: (619) 525-3990
`Facsimile: (619) 525-3991
`E-mail: brobbins@robbinsarroy.com
`csmith@robbinsllp.com
`ssanders@robbinsllp.com
`arifkin@robbinsllp.com
`swedeking@robbinsllp.com
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`WEISSLAW LLP
`DAVID C. KATZ (admitted pro hac vice)
`MARK D. SMILOW (pro hac to be filed)
`JOSHUA RUBIN (pro hac to be filed)
`1500 Broadway, 16th Floor
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`4 ZFFR also challenges Bankhalter’s motion for failing to address his counsel’s resources
`with specificity. However, Bankhalter represents that counsel’s resources are “sufficient” and that
`the firms have an “ability and willingness to dedicate substantial resources” to this matter. The
`Court has no reason to believe otherwise, and thus, finds that the parties’ resources are not
`determinative in ruling on the motions.
`5 Bankhalter argues that in the alternative, the Court may appoint one firm from each of the
`competing motions. The Court is not persuaded, however, that giving partial relief to both
`Bankhalter and ZFFR would ensure the best possible representation for the corporation and its
`shareholders.
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`Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 5 of 6
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`New York, NY 10036
`Telephone: (212) 682-3025
`Facsimile: (212) 682-3010
`E-mail: dkatz@weisslawllp.com
`msmilow@weisslawllp.com
`jrubin@weisslawllp.com
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`WEISSLAW LLP
`Joel E. Elkins
`9107 Wilshire Blvd., Suite 450
`Beverly Hills, CA 90210
`Telephone: (310) 208-2800
`Facsimile (310) 209-2348
`E-mail: jelkins@weisslawllp.com
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`2.
`Co-Lead Counsel shall have the sole authority to speak for plaintiffs in all matters
`regarding pre-trial procedure, trial, and settlement, and shall assign all work in their discretion in
`such manner as to facilitate the orderly and efficient prosecution of this litigation and to avoid
`unnecessarily duplicative or unproductive effort. Co-Lead Counsel shall keep records detailed
`enough to determine whether such duplicative or unproductive effort occurred especially for
`purposes of side-by-side comparison.
`3.
`Co-Lead Counsel will be responsible for coordinating all activities and appearances
`on behalf of plaintiffs. No motion, request for discovery, or other pre-trial or trial proceedings
`will be initiated or filed by any plaintiffs except through Co-Lead Counsel.
`4.
`Co-Lead Counsel shall be available and responsible for communications to and
`from this Court, including distributing orders and other directions from the Court to counsel.
`5.
`Co-Lead Counsel shall be responsible for creating and maintaining a master service
`list of all parties and their respective counsel.
`6.
`Defendants’ counsel may rely upon all agreements made with Co-Lead Counsel, or
`other duly authorized representative of Co-Lead Counsel, and such agreements shall be binding on
`plaintiffs.
`7.
`This Order shall apply to this Consolidated Action and any future-filed actions
`relating to the subject matter of this case. When a case that properly belongs as part of the
`Consolidated Action is hereafter filed in, remanded to, or transferred to this Court, Co-Lead
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`Case 4:19-cv-05153-YGR Document 39 Filed 06/29/20 Page 6 of 6
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`Counsel shall endeavor in good faith to alert the Court to such filing, remand, or transfer to assist
`in assuring that counsel in subsequent actions receive notice of this Order.
`This Order terminates Docket Numbers 21 and 23.
`IT IS SO ORDERED.
`Dated: June 29, 2020
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`YVONNE GONZALEZ ROGERS
`UNITED STATES DISTRICT COURT JUDGE
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