Yuksel v. Ventyx Biosciences, Inc.

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 Omer YUKSEL, Case No.: 3:24-cv-0415-AGS-DDL Plaintiff, 4 ORDER GRANTING MOTION TO v. APPOINT LEAD PLAINTIFF AND [5] COUNSEL (ECF 21) VENTYX BIOSCIENCES, INC., et al., [6] Defendants. [7] 8 “This is a federal securities class action” subject to the Private Securities Litigation 9 Reform Act of 1995. (ECF 1, at 2); 15 U.S.C. § 78u-4(a)(1). The PSLRA requires the Court 10 to appoint a “lead” plaintiff and counsel. 15 U.S.C. § 78u-4(a)(3)(B)(i), (v). Amir Ahmadi 11 moves that he and his counsel do the honors. (ECF 21.) 12 MOTION TO APPOINT LEAD PLAINTIFF 13 The court must “appoint as lead plaintiff the member . . . of the purported plaintiff 14 class that the court determines to be most capable of adequately representing the interests 15 of class members.” 15 U.S.C. § 78u-4(a)(3)(B)(i). There is a rebuttable presumption that 16 the “most adequate plaintiff” is the movant that satisfies a “simple three-step process”: 17 publication, practical adequacy, and rebuttal survival. In re Cavanaugh, 306 F.3d 726 , 729 18 (9th Cir. 2002); 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I). 19 A. Step One: Publication 20 “The first step consists of publicizing the pendency of the action, the claims made, 21 and the purported class period” “in a widely circulated national business-oriented 22 publication or wire service.” In re Cavanaugh, 306 F.3d 726 , 729 (9th Cir. 2002); 15 U.S.C. 23 § 78u–4(a)(3)(A). The notice must also state that “any member of the purported class may 24 move the court to serve as lead plaintiff.” 15 U.S.C. § 78u-4(a)(3)(A)(i)(II). This 25 requirement was satisfied when a notice containing all this information was published in 26 Accesswire on March 1, 2024. (See ECF 21-4); see also Tenneson v. Nikola Corp., No. 27 CV-23-02131-PHX-DJH (DMF), 2024 WL 905244 , at *3 (D. Ariz. Feb. 29, 2024) (finding [28] 1 first step satisfied by publication in “Accesswire”), report and recommendation adopted, 2 No. CV-23-02131-PHX-DJH (DMF), 2024 WL 1796119 (D. Ariz. Apr. 25, 2024). 3 B. Step Two: Practical Adequacy 4 At step two, the district court must select the “presumptively most adequate 5 plaintiff”—“the one who has the largest financial interest in the relief sought by the class 6 and otherwise satisfies” the “typicality” and “adequacy” requirements of Federal Rule of 7 Civil Procedure 23. Cavanaugh, 306 F.3d at 730. 8 1. Largest Financial Interest 9 District courts “typically consider[]” four factors “to determine who has the largest 10 financial interest: (1) the number of shares purchased during the class period; (2) the 11 number of net shares purchased during the class period; (3) the total net funds expended 12 during the class period; and (4) the approximate losses suffered.” Knox v. Yingli Green 13 Energy Holding Co., 136 F. Supp. 3d 1159, 1163 (C.D. Cal. 2015) (quotation marks 14 omitted). Ahmadi “purchased 400 shares of Ventyx stock”; “retained 400 of his shares”; 15 “expended $7,382 on his purchases of Ventyx stock”; and “suffered a loss of approximately 16 $6,466 in connection with transactions in Ventyx securities.” (ECF 21-1, at 12; ECF 21-3, 17 at 2.) “To the best of his knowledge, Ahmadi has the largest financial interest of any Ventyx 18 investor or investor group seeking to serve” as lead plaintiff. (ECF 21-1, at 11.) There are 19 no other lead-plaintiff candidates to compare Ahmadi’s losses to. Absent contrary 20 evidence, the Court finds that Ahmadi is the plaintiff with the greatest financial interest in 21 the litigation. 22 As for the Rule 23 requirements of typicality and adequacy, only a “prima facie 23 showing” is necessary at this stage. Cavanaugh, 306 F.3d at 731. The “test of typicality is 24 whether other members have the same or similar injury, whether the action is based on 25 conduct which is not unique to the named plaintiffs, and whether other class members have 26 been injured by the same course of conduct.” Knox, 136 F. Supp. 3d at 1165 . Ahmadi, 27 along with “all members” of the proposed class, “purchased Ventyx securities” allegedly 28 “artificially inflated by Defendants’ misrepresentations or omissions” and were “damaged 1 upon the disclosure of those misrepresentations” or “omissions.” (ECF 21-1, at 14.) 2 Ahmadi’s claims and the proposed class’s claims are all “based on the same legal theory 3 and arise from the same events and course of conduct.” (Id.) Thus, the typicality 4 requirement is satisfied. 5 The “adequacy requirement is met if there are no conflicts between the 6 representative and class interests and the representative’s attorneys are qualified, 7 experienced, and generally able to conduct the litigation.” Knox, 136 F. Supp. 3d at 1165 . 8 Ahmadi’s interests seemed to be aligned with those of the proposed class members 9 considering his “significant loss” and “commitment to protect the interests of the class.” 10 (ECF 21-1, at 15; see generally ECF 21-5.) Since “[t]here is no evidence” that Ahmadi has 11 “any conflicts with the class or would be otherwise unable to effectively represent the 12 class,” and his counsel is adequately qualified to represent him as detailed below, Ahmadi 13 meets the adequacy requirement. See Knox, 136 F. Supp. 3d at 1165 . Ahmadi is therefore 14 designated as the presumptive lead plaintiff. 15 C. Step Three: Rebuttal Survival 16 Finally, the “third step of the process is to give other plaintiffs an opportunity to 17 rebut the presumptive lead plaintiff’s showing that it satisfies Rule 23’s typicality and 18 adequacy requirements.” Cavanaugh, 306 F.3d at 730. This presumption may be rebutted 19 “only upon proof by a member of the purported plaintiff class” that Ahmadi “will not fairly 20 and adequately protect the interests of the class” or is “subject to unique defenses that 21 render such plaintiff incapable of adequately representing the class.” See 15 U.S.C. 22 § 78u-4(a)(3)(B)(iii)(II). Because this motion is unopposed and Ahmadi’s showing is 23 unrebutted, the Court GRANTS his motion for appointment as lead plaintiff. 24 MOTION TO APPOINT LEAD COUNSEL 25 “Once a lead plaintiff is selected, that plaintiff ‘shall, subject to the approval of the 26 court, select and retain counsel to represent the class.’” Knox, 136 F. Supp. at 1165 (quoting 27 15 U.S.C. § 78u-4(a)(3)(B)(v)). When the lead plaintiff has made “a reasonable choice of 28 counsel,” the district court should “generally defer to that choice.” Cohen v. United States 1 || Dist. Ct, 586 F.3d 703 , 712 (9th Cir. 2009). Ahmadi has selected Pomerantz LLP. 2 ||(ECF 21-1, at 16.) Given the firm’s “extensive experience in similar litigation,” the Court 3 finds Pomerantz a reasonable choice of counsel. (See id. at 17; ECF 21-7 (providing 4 || multiple examples of Pomerantz’s—and its attorneys’—experience in similar litigation); 5 || see also Staublein v. Acadia Pharms., Inc., No. 18-CV-1647-AJB-BGS, 2019 WL 927756 , 6 |jat *4 (S.D. Cal. Feb. 26, 2019) (“The Court finds Pomerantz has the resources and 7 experience to effectively manage the class litigation.”). The Court GRANTS the motion 8 appoint Pomerantz LLP as lead counsel. 9 || Dated: December 10, 2024 10 2 | fi 11 Andrew G. Schopler United States District Judge