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Cambria County Employees Retirement System v. Venator Materials PLC

United States District Court, S.D. Texas, Houston Division

October 21, 2019

CAMBRIA COUNTY EMPLOYEES RETIREMENT SYSTEM, et al., Plaintiffs,
v.
VENATOR MATERIALS PLC, et al., Defendants.

          ORDER FOR APPOINTMENT OF LEAD PLAINTIFF AND APPROVAL OF SELECTION OF LEAD COUNSEL

          LEE H. ROSENTHAL CHIEF UNITED STATES DISTRICT JUDGE

         The putative class members in this federal securities action bought stock in a global chemical company, Venator Materials PLC. On January 30, 2017, one of Venator's manufacturing facilities caught on fire. On August 3, 2017, Venator completed its initial public offering. The plaintiffs allege that as part of that offering, and at other times in the proposed class period, Venator made public misrepresentations about the damage the fire caused, the repair cost, and the insurance funds covering the cost. When the full extent of the damage, cost, and effect on Venator's production capacity were revealed, the stock price declined. The plaintiff shareholders seek damages for that decline. (Docket Entry No. 1).

         Three plaintiffs-the City of Miami General Employees' & Sanitation Employees' Retirement Trust; the Fresno County Employees' Retirement Association; and the City of Pontiac General Employees' Retirement System, together referred to as the “Public Pension Funds, ” move to be appointed as lead plaintiffs and to have Bernstein Litowitz Berger & Grossmann LLP appointed lead counsel, and Ajamie LLP appointed as liaison counsel. (Docket Entry No. 4). Although the motion is unopposed, this court has an independent duty to ensure that the statutory and rule requirements are met. See Fed. R. Civ. P. 23(g).

         Based on the pleadings, the motions, and the applicable law, the court now grants the motion for appointment of lead plaintiffs and lead and liaison counsel. The reasons are explained below.

         I. The Standard for Determining “the Most Adequate Plaintiff” Under the PSLRA

         Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Pub. L. No. 104-67, 109 Stat. 737, the district court must appoint the lead plaintiff “not later than 90 days after” notice of the litigation is published. 15 U.S.C. § 77z-1(a)(3)(B)(i). The PSLRA requires notice within 20 days after the plaintiff files a complaint that informs class members of their right to move for lead-plaintiff status within 60 days after the notice is published. 15 U.S.C. § 77z-1(a)(3)(A)(i). If more than one suit is filed with nearly the same claims, only the plaintiff in the first-filed action is required to publish notice. 15 U.S.C. § 77z-1(a)(3)(A)(ii).

         On July 31, 2019, the Miami Retirement Trust filed a substantially identical class action in the Southern District of New York. See City of Miami Gen. Emps.' & Sanitation Emps.' Ret. Tr. v. Venator Materials PLC, No. 19-cv-7182 (S.D.N.Y. July 31, 2019). On the same day, counsel for the Miami Retirement Trust published a notice on PRNewswire informing investors about the suit and setting a deadline for seeking appointment as lead plaintiff on September 30, 2019. (Docket Entry No. 4-C).

         On September 13, 2019, the Cambria County Employees' Retirement System filed this action and published a notice on Business Wire informing investors of the case and reiterating the September 30, 2019 deadline for seeking appointment as lead plaintiff. (Docket Entry No. 1; Docket Entry No. 4-D). The court finds the notice requirement satisfied. See Makhlouf v. Tailored Brands, Inc., No. CV H-16-0838, 2017 WL 1092311, at *3 (S.D. Tex. Mar. 23, 2017) (“Thus a plaintiff need not be the first to file a complaint to be appointed Lead Plaintiff. If more than one suit is filed with nearly the same claims, only the plaintiff in the first-filed action is required to publish notice.”).

         In appointing the lead plaintiff,

the court shall consider any motion made by a purported class member . . ., including any motion by a class member who is not individually named as a plaintiff in the complaint or complaints, and shall appoint as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members (hereafter in this paragraph referred to as the “most adequate plaintiff”) in accordance with this subparagraph.

Id. at § 77z-1(a)(3)(B)(i). “[T]he court shall adopt a presumption that the most adequate plaintiff in any private action arising under this chapter is the person or group of persons that”:

(aa) has either filed the complaint or made a motion in response to a notice under subparagraph (A)(i);
(bb) in the determination of the court, has the largest financial interest in the relief sought by the class; and (cc) otherwise satisfies the requirements of Rule 23 of ...

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