Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 Jennifer Pafiti (SBN 0) POMERANTZ LLP North Camden Drive Beverly Hills, CA 00 Telephone: () - E-mail: jpafiti@pomlaw.com - additional counsel on signature page - CAROLE LEE GREENBERG, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page - UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., v. Defendants. No. :-cv-00-crb NOTICE OF MOTION AND MOTION OF SUNRUN INVESTOR GROUP FOR CONSOLIDATION, APPOINTMENT AS LEAD PLAINTIFF AND APPROVAL OF COUNSEL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION DATE: August, 0 TIME: 0:00 am JUDGE: Hon. Charles R. Breyer CTRM: th Floor
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 JEFFREY L. PYTEL, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page - v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-0-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 JOE BAKER, CARL HAYNER, and KEN MORRIS, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page - v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-0-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 MICHAEL BROWN and REBECCA LOY, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page - v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-0-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 GEORGE COHEN, DAVID MOSS, and ROXANNE XENAKIS, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-00-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV 0
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 GREG MANCY, Individually and on Behalf of All Others Similarly Situated, - caption continued on following page v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-0-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV 0
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 JACKIE L. NUNEZ, Individually and on Behalf of All Others Similarly Situated, v. Plaintiff, SUNRUN INC., LYNN JURICH, BOB KOMIN, EDWARD FENSTER, JAMESON McJUNKIN, GERALD RISK, STEVE VASSALLO, RICHARD WONG, BEAU PEELLE, EREN OMER ATESMEN, REGINALD NORRIS, WILLIAM ELMORE, FOUNDATION CAPITAL VI, L.P., FOUNDATION CAPITAL MANAGEMENT CO. VI, LLC, CREDIT SUISSE SECURITIES (USA) LLC, GOLDMAN, SACHS & CO., MORGAN STANLEY & CO. LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, RBC CAPITAL MARKETS, LLC, KEYBANC CAPITAL MARKETS INC., and SUNTRUST ROBINSON HUMPHREY, INC., Defendants. No. :-cv-0-crb Removed from the Superior Court of California, County of San Mateo Case No. CIV
Case :-cv-00-crb Document Filed 0/0/ Page of 0 TABLE OF CONTENTS I. PRELIMINARY STATEMENT... II. STATEMENT OF FACTS... III. ARGUMENT... A. THE RELATED ACTIONS SHOULD BE CONSOLIDATED FOR ALL PURPOSES... B. THE SUNRUN INVESTOR GROUP SHOULD BE APPOINTED LEAD PLAINTIFF.... The Sunrun Investor Group is Willing to Serve as Class Representative.... The Sunrun Investor Group has the Largest Financial Interest.... The Sunrun Investor Group Otherwise Satisfies the Requirements of Rule of the Federal Rules of Civil Procedure.... The Sunrun Investor Group Will Fairly and Adequately Represent the Interests of the Class and is Not Subject to Any Unique Defenses... C. LEAD PLAINTIFF S SELECTION OF COUNSEL SHOULD BE APPROVED.. IV. CONCLUSION... 0 i
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 Cases TABLE OF AUTHORITIES Pages Aronson, F. Supp. d at (N.D. Cal. )... Baby Neal v. Casey, F.d (d Cir. )... Bassin v. Decode Genetics, Inc., 0 F.R.D. (S.D.N.Y. 00)... Beck v. Maximus, Inc., F.d (d Cir. 00)... Blackmoss Invs., Inc. v. ACA Capital Holdings, Inc., F.R.D. (S.D.N.Y. 00)... Danis v. USN Communs., Inc., F.R.D. (N.D. Ill. )... Erikson v. Cornerstone Propane Ptnrs. LP, 00 U.S. Dist. LEXIS 00 (N.D. Cal. Sept., 00)... Gluck v. Cellstar Corp., F. Supp., (N.D. Tex. )... In re Cendant Corp. Litig., F.d 0 (d Cir. 00)..., In re Comverse Tech., Inc. Sec. Litig., No. 0-CV- (NGG)(RER), 00 U.S. Dist. LEXIS (E.D.N.Y. Mar., 00)... In re GE Secs. Litig, No. 0 Civ. (DC), 00 U.S. Dist. LEXIS (S.D.N.Y. July, 00)..., In re Gemstar-Tv Guide Int l Secs. Litig., 0 F.R.D. (C.D. Cal. 00)... In re McKesson HBOC, Inc. Sec. Litig., F. Supp. (N.D. Cal. )... In re N. Dist. of California, Dalkon Shield IUD Prods. Liab. Litig., F.d (th Cir. )... 0 In re Olsten Corp.Sec. Litig., F. Supp. d (E.D.N.Y. )..., In re Oxford Health Plans, Inc. Sec. Litig., F.R.D., (S.D.N.Y. )... i
Case :-cv-00-crb Document Filed 0/0/ Page 0 of 0 0 In re Sterling Fin. Corp., 00 WL 0 (E.D. Pa. Dec., 00)..., 0 In re Tronox, Inc., F.R.D. (S.D.N.Y. 00)... Johnson v. Celotex Corp., F.d (d Cir. 0)... Lax v. First Merchs. Acceptance Corp., WL 0 (N.D. Ill. Aug., )... Lerwill v. Inflight Motion Pictures, Inc., F.d 0 (th Cir. )... 0 Malcolm v. Nat l Gypsum Co., F.d (d Cir. )... Osher v. Guess?, Inc., No. CV 0-00 LGB (RNBx), 00 U.S. Dist. LEXIS 0 (C.D. Cal. Apr., 00)..., Riordan v. Smith Barney, F.R.D. 0 (N.D. Ill. )... 0 Squyres v. Union Tex. Petrol. Holdings, Inc., No. CV -0-LGB(AIJx), U.S. Dist. LEXIS (C.D. Cal. Nov., )... Takeda v. Turbodyne Techs., Inc., F. Supp. d (C.D. Cal. )... 0 Wenderhold v. Cylink Corp., F.R.D., (N.D. Cal. )... Statutes U.S.C. 0.... U.S.C. D(a)()(A)(i) (?YEAR?)...,, U.S.C. u... passim Other of the Federal Rules of Civil Procedure...,, of the Federal Rules of Civil Procedure... ii
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 NOTICE OF MOTION AND MOTION TO: ALL PARTIES AND THEIR COUNSEL OF RECORD PLEASE TAKE NOTICE that the Gregory and Lillian Lennox Family Trust, Ali B. Zanjani, Teresa Nicastro, and Murray Hoffman (collectively, the Sunrun Investor Group ), by and through their counsel, will and do hereby move this Court, pursuant to the Private Securities Litigation Reform Act of (the PSLRA ) and Rule of the Federal Rules of Civil Procedure, on August, 0, at 0:00 am, for an Order filed contemporaneously with this motion: () consolidating the above-captioned related actions; () appointing the Sunrun Investor Group as Lead Plaintiff on behalf of all persons who purchased or otherwise acquired securities of Sunrun Inc. ( Sunrun ) pursuant or traceable to Sunrun s August, 0 initial public stock offering (the IPO ); () approving Lead Plaintiff s selection of Pomerantz LLP ( Pomerantz ) and The Rosen Law Firm P.A. ( Rosen ) as Co-Lead Counsel for the Class; and () granting such other and further relief as the Court may deem just and proper. In support of this motion, the Sunrun Investor Group submits a Memorandum of Points and Authorities, the pleadings and other filings herein, and such other written and oral arguments as may be presented to the Court. This motion is made on the grounds that the Sunrun Investor Group is the most adequate lead plaintiff, as defined by the PSLRA, based on its losses of approximately $,0, which were suffered as a result of defendants wrongful conduct as alleged in the above-referenced related actions. Further, the Sunrun Investor Group satisfies the requirements of Rule (a) of the Federal Rules of Civil Procedure, as its claims are typical of other Class members claims, and it will fairly and adequately represent the Class.
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 MEMORANDUM OF POINTS AND AUTHORITIES I. PRELIMINARY STATEMENT Currently pending in this District are seven federal securities class action lawsuits (the Related Actions ) filed on behalf of the Class, consisting of persons, other than Defendants, who purchased or otherwise acquired securities of Sunrun during the Class Period. Each raises substantially similar allegations: defendants violated federal securities laws by issuing false and misleading statements. Pursuant to the PSLRA, the court appoints as lead plaintiff the movant who possesses the largest financial interest in the outcome of the action and who satisfies the requirements of Rule of the Federal Rules of Civil Procedure. U.S.C. u-(a)()(b)(iii)(i). The Sunrun Investor Group, with losses of approximately $,0 in connection with its purchases of Sunrun common stock, has the largest financial interest in the relief sought in this action. The Sunrun Investor Group further satisfies the requirements of Rule of the Federal Rules of Civil Procedure as it is an adequate representative with claims typical of the other Class members. Accordingly, the Sunrun Investor Group respectfully submits that it should be appointed Lead Plaintiff. II. STATEMENT OF FACTS Sunrun is a provider of residential solar electricity and is said to operate the second largest fleet of residential solar energy systems in the United States, now with approximately,000 solar customers in states and the District of Columbia. Founded in 00 with a focus on home solar power The Related Actions are Greenberg v. Sunrun Inc. et al., :-cv-00 (N.D. Cal. May, 0); Pytel v. Sunrun Inc. et al., :-cv-0 (N.D. Cal. May, 0); Baker et al. v. Sunrun Inc. et al., :-cv-0 (N.D. Cal. May, 0); Brown et al. v. Sunrun Inc. et al., :-cv-0 (N.D. Cal. May, 0); Cohen et al. v. Sunrun Inc. et al., :-cv-00 (N.D. Cal. May, 0); Mancy v. Sunrun Inc. et al., :-cv-0 (N.D. Cal. May, 0); and Nunez v. Sunrun Inc. et al., :-cv- 0 (N.D. Cal. May, 0).
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 installation, financing and leasing, Sunrun pioneered the use of solar as a service for residential customers. Though Sunrun operated in states at the time of its IPO, California, Nevada and Hawaii had traditionally accounted for the lion s share of the Company s revenues and profits. Nevada alone, the seventh largest U.S. state and home to one of the hottest, sunniest deserts on Earth, and thus a market with an inordinate need for air conditioning, was the third-leading solar state in 0 according to the Solar Energy Industries Association. On or about August, 0, Sunrun priced the IPO at $.00 per share, filed with the SEC the final prospectus for the IPO (the Prospectus ), which forms part of the Registration Statement (the Prospectus and Registration Statement are collectively referred to herein as the Registration Statement ), and sold. million shares of Sunrun common stock to the investing public. The Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and was not prepared in accordance with the rules and regulations governing its preparation. Specifically, statements in the Registration Statement were materially false and misleading because they failed to disclose and misrepresented the following adverse facts that existed at the time of the IPO: (a) Sunrun s actual historical operating costs were being understated by not identifying and disclosing the fixed grid costs being borne for it by public utilities where net metering programs were being employed; (b) Sunrun had been charging well above wholesale rates for the electricity it was selling to its net metering customers;
Case :-cv-00-crb Document Filed 0/0/ Page of (c) Contrary to having listed customers dispersed across states and the District of Columbia in its Registration Statement, Sunrun had a substantial 0% customer concentration in Nevada alone; (d) Sunrun s ability to continue to convince customers to sign 0-year contracts which lowers the fixed costs for installing solar systems on those customers houses was in jeopardy due to the ongoing regulatory review of net metering programs in 0 of the 0 states that then permitted net metering; (e) Because Sunrun was employing an unreasonably low discount rate of % in 0 0 calculating the value of it retained assets, it was overstating their value; and (f) As a result of the foregoing, at the time of the IPO, the Company s business and financial prospects were not what defendants had led the market to believe they were in the Registration Statement. The price of Sunrun common stock plummeted as the market learned, following the IPO, that the Company s business metrics and financial prospects were not as strong as represented in the Registration Statement. Just months after the IPO and in Sunrun s maiden first quarter as a public company, on January, 0, the Company admitted that it was ceasing all operations in Nevada. When Sunrun reported its fiscal 0 results and fiscal 0 guidance on March 0, 0, the Company also admitted that residential solar growth would decline in 0 due to its having halted operations in Nevada. According to the Company, 0 installation growth will fall from % in 0 to just 0% in 0. The price of Sunrun common stock has since plummeted and now trades below $ per share, or at less than 0% of the price the stock was sold at in the IPO. As a result of defendants wrongful acts and omissions, and the precipitous decline in the market value of the Company s securities, Plaintiff and other Class members have suffered significant losses and damages.
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 III. ARGUMENT A. THE RELATED ACTIONS SHOULD BE CONSOLIDATED FOR ALL PURPOSES Consolidation of related cases is appropriate, where, as here, the actions involve common questions of law and fact, and therefore consolidation would avoid unnecessary cost, delay and overlap in adjudication: Where actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all of the matters at issue in the actions; it may order all the actions consolidated; and it may make such order concerning proceedings therein as may tend to avoid unnecessary costs or delay. Fed. R. Civ. P. (a). See also Manual for Complex Litigation (Third), 0. (). Consolidation is appropriate when the actions before the court involve common questions of law or fact. See Fed. R. Civ. P. (a); Malcolm v. Nat l Gypsum Co., F.d, 0 (d Cir. ) (citing Johnson v. Celotex Corp., F.d, (d Cir. 0)); In re Tronox, Inc. Sec. Litig., F.R.D., (S.D.N.Y. 00) (consolidating securities class actions); Blackmoss Invs., Inc. v. ACA Capital Holdings, Inc., F.R.D., 0 (S.D.N.Y. 00) (same). Differences in causes of action, defendants, or the class period do not render consolidation inappropriate if the cases present sufficiently common questions of fact and law, and the differences do not outweigh the interest of judicial economy served by consolidation. See In re GE Sec. Litig., No. 0 Civ. (DC), 00 U.S. Dist. LEXIS, at * (S.D.N.Y. July, 00) (consolidating actions asserting different claims against different defendants over different class periods). The Related Actions at issue here clearly involve common questions of law and fact. Each action was brought against the Company, as well as certain officers and directors of the Company and other defendants, in connection with violations of the federal securities laws. Accordingly, the Related Actions allege substantially the same wrongdoing, namely that defendants issued materially false and misleading statements and omissions that artificially inflated the price of Sunrun s securities and subsequently damaged the Class when the Company s stock price crashed as the truth emerged. Consolidation of the
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 Related Actions is therefore appropriate. See Bassin v. Decode Genetics, Inc., 0 F.R.D., (S.D.N.Y. 00) (consolidation of securities class actions is particularly appropriate in the context of securities class actions where the complaints are based on the same statements and the defendants will not be prejudiced); In re GE, 00 U.S. Dist. LEXIS ), at * ( Consolidation promotes judicial convenience and avoids unnecessary costs to the parties. ). B. THE SUNRUN INVESTOR GROUP SHOULD BE APPOINTED LEAD PLAINTIFF Section D(a)()(B) of the PSLRA sets forth procedures for the selection of Lead Plaintiff in class actions brought under the Exchange Act. The PSLRA directs courts to consider any motion to serve as Lead Plaintiff filed by class members in response to a published notice of class action by the later of (i) 0 days after the date of publication, or (ii) as soon as practicable after the Court decides any pending motion to consolidate. U.S.C. u-(a)()(b)(i) &(ii). Further, under U.S.C. u-(a)()(b)(iii)(i), the Court is directed to consider all motions by plaintiffs or purported class members to appoint a lead plaintiff filed in response to any such notice. Under this section, the Court shall appoint the presumptively most adequate plaintiff to serve as lead plaintiff and shall presume that plaintiff is the person or group of persons, that: (aa) has either filed the complaint or made a motion in response to a notice...; (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 of the Federal Rules of Civil Procedure. U.S.C. u-(a)()(b)(iii)(i). As set forth below, the Sunrun Investor Group satisfies all three of these criteria, and is thus entitled to the presumption that it is the most adequate plaintiff of the Class and, therefore, should be
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 appointed Lead Plaintiff for the Class. See Erikson v. Cornerstone Propane Partners LP, 00 U.S. Dist. LEXIS 00, at *-* (N.D. Cal. Sept., 00); Squyres v. Union Texas Petroleum Holdings, Inc., U.S. Dist. LEXIS, at * (C.D. Cal. Nov., ); Osher v. Guess, Inc., 00 U.S. Dist. LEXIS 0, at * (C.D. Cal. Apr., 00).. The Sunrun Investor Group is Willing to Serve as Class Representative On May, 0, counsel for plaintiff in the above-captioned action caused a notice (the Notice ) to be published over Globe Newswire pursuant to Section D(a)()(A)(i) of the PSLRA, which announced that a securities class action had been filed against the defendants herein, and advised investors in Sunrun securities that they had until July, 0 to file a motion to be appointed as Lead Plaintiff. See Declaration of Jennifer Pafiti in Support of the Motion by Sunrun Investor Group for Appointment as Lead Plaintiff and Approval of Lead Counsel ( Pafiti Decl. ), Ex. A. The Sunrun Investor Group has filed the instant motion pursuant to the Notice, and has attached Certifications attesting that its members are willing to serve as class representatives for the Class and provide testimony at deposition and trial, if necessary. See Pafiti Decl., Ex. B. Accordingly, the Sunrun Investor Group satisfies the first requirement to serve as Lead Plaintiff for the Class.. The Sunrun Investor Group has the Largest Financial Interest The PSLRA requires a court to adopt a rebuttable presumption that the most adequate plaintiff... is the person or group of persons that... has the largest financial interest in the relief sought by the class. U.S.C. u-(a)()(b)(iii); In re Gemstar-TV Guide Int l. Sec. Litig., 0 F.R.D., 0 (C.D. Cal. 00). As of the time of the filing of this motion, the Sunrun Investor Group believes that it has the largest financial interest of any of the Lead Plaintiff movants based on the four factors articulated in the seminal case Lax v. First Merchants Acceptance Corp., WL 0, at * (N.D. Ill. )
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 (financial interest may be determined by () the number of shares purchased during the class period; () the number of net shares purchased during the class period; () the total net funds expended during the class period; and () the approximate losses suffered) (the Lax-Olsten factors). During the Class Period, the Sunrun Investor Group () purchased,00 shares of Sunrun stock; () expended $0,000 on its purchases of Sunrun stock; () retained all of its Sunrun shares; and () as a result of the revelations of the fraud, suffered a loss of $,0. See Pafiti Decl., Ex. C. Because The Sunrun Investor Group possesses the largest financial interest in the outcome of this litigation, it may be presumed to be the most adequate plaintiff. U.S.C. u-(a)()(b)(iii)(i)(bb); See also In re McKesson HBOC, Inc. Sec. Litig., F. Supp. (N.D. Cal. ); In re Olsten Corp. Sec. Litig., F. Supp.d, (E.D.N.Y. ); Lax v. First Merchants Acceptance Corp., U.S. Dist. LEXIS, WL 0, at * (N.D. Ill. Aug., ).. The Sunrun Investor Group Otherwise Satisfies the Requirements of Rule of the Federal Rules of Civil Procedure Section D(a)()(B)(iii)(I)(cc) of the PSLRA further provides that, in addition to possessing the largest financial interest in the outcome of the litigation, a Lead Plaintiff must otherwise satisfy the requirements of Rule of the Federal Rules of Civil Procedure. See In re Cendant Corp. Litig., F.d 0, (d Cir. 00), cert. denied, U.S. (00). Rule (a) generally provides that a class action may proceed if the following four requirements are satisfied: () the class is so numerous that joinder of all members is impracticable, () there are questions of law or fact common to the class, () the claims or defenses of the representative parties are typical of the claims or defenses of the class, and () the representative parties will fairly and adequately protect the interests of the class. See also In re Olsten Corp. Sec. Litig., F. Supp.d, (E.D.N.Y. ). Accord In re Comverse Tech., Inc., Sec. Litig., 00 U.S. Dist. LEXIS, at *-* (E.D.N.Y. Mar., 00).
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 In making its determination that Lead Plaintiff satisfies the requirements of Rule, the Court need not raise its inquiry to the level required in ruling on a motion for class certification; instead, a prima facie showing that the movant satisfies the requirements of Rule is sufficient. Aronson, F. Supp. d at (N.D. Cal. ) (citing Wenderhold v. Cylink Corp., F.R.D., (N.D. Cal. ). Moreover, typicality and adequacy of representation are the only provisions relevant to a determination of lead plaintiff under the PSLRA. In re Oxford Health Plans, Inc. Sec. Litig., F.R.D., (S.D.N.Y. ) (citing Gluck v. Cellstar Corp., F. Supp., (N.D. Tex. ); Olsten, F. Supp. d at. The typicality requirement of Fed. R. Civ. P. (a)() is satisfied where the named representative s claims have the same essential characteristics as the claims of the class at large. Danis v. USN Communs., Inc., F.R.D., (N.D. Ill. ). See In re Sterling Financial Corp., 00 WL 0, at * (E.D. Pa. Dec., 00) (noting that the typicality requirement is satisfied if the plaintiff, as a result of the same course of conduct, suffered the injuries as the absent class members, and their claims are based on the same legal issues. ). In other words, the named plaintiffs claims [must be] typical, in common-sense terms, of the class, thus suggesting that the incentives of the plaintiffs are aligned with those of the class. Beck v. Maximus, Inc., F.d, - (d Cir. 00) (quoting Baby Neal v. Casey, F.d, (d Cir. ) (noting that factual differences will not render a claim atypical if the claim arises from the same event or practice or course of conduct that gives rise to the claims of the class members, and if it is based on the same legal theory. )). The claims of the Sunrun Investor Group are typical of those of the Class. The Sunrun Investor Group alleges, as do all class members, that defendants violated the Exchange Act by making what they knew or should have known were false or misleading statements of material facts concerning Sunrun, or omitted to state material facts necessary to make the statements they did make not misleading. The
Case :-cv-00-crb Document Filed 0/0/ Page 0 of 0 0 Sunrun Investor Group, as did all members of the Class, purchased Sunrun securities during the Class Period at prices artificially inflated by defendants misrepresentations or omissions and was damaged upon the disclosure of those misrepresentations and/or omissions. These shared claims, which are based on the same legal theory and arise from the same events and course of conduct as the Class s claims, satisfy the typicality requirement of Rule (a)(). The adequacy of representation requirement of Rule (a)() is satisfied where it is established that a representative party will fairly and adequately protect the interests of the class. Accordingly, The Ninth Circuit has held that representation is adequate when counsel for the class is qualified and competent, the representative s interests are not antagonistic to the interests of absent class members, and it is unlikely that the action is collusive. Takeda, F. Supp. d at (citing In re Northern Dist. Of Cal., Dalkon Shield IUD Prod. Liab. Litig., F.d, ( th Cir. )). Accord Lerwill v. Inflight Motion Pictures, Inc., F.d 0, ( th Cir. ). The class representative must also have sufficient interest in the outcome of the case to ensure vigorous advocacy. Riordan v. Smith Barney, F.R.D. 0, (N.D. Ill. ). See Sterling, 00 WL 0, at * (highlighting that the adequacy requirement is satisfied when both the class representative and its attorneys are capable of satisfying their obligations, and neither has interests conflicting with those of the other class members. ). The Sunrun Investor Group will adequately represent the interests of the Class. There is no antagonism between the interests of the Sunrun Investor Group and those of the Class, and its losses demonstrate that it has a sufficient interest in the outcome of this litigation. Moreover, the Sunrun Investor Group has retained counsel highly experienced in vigorously and efficiently prosecuting 0
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 securities class actions such as this action, and submits its choice to the Court for approval pursuant to U.S.C. u (a)()(b)(v).. The Sunrun Investor Group Will Fairly and Adequately Represent the Interests of the Class and is Not Subject to Any Unique Defenses The presumption in favor of appointing the Sunrun Investor Group as Lead Plaintiff may be rebutted only upon proof by a purported member of the plaintiffs class that the presumptively most adequate plaintiff: (aa) will not fairly and adequately protect the interest of the class; or (bb) is subject to unique defenses that render such plaintiff incapable of adequately representing the class. U.S.C. u-(a)()(b)(iii)(i). The ability and desire of the Sunrun Investor Group to fairly and adequately represent the Class has been discussed above. The Sunrun Investor Group is not aware of any unique defenses defendants could raise that would render it inadequate to represent the Class. Accordingly, the Sunrun Investor Group should be appointed Lead Plaintiff for the Class. C. LEAD PLAINTIFF S SELECTION OF COUNSEL SHOULD BE APPROVED The PSLRA vests authority in the Lead Plaintiff to select and retain lead counsel, subject to the approval of the Court. U.S.C. u-(a)()(b)(v); Osher, 00 U.S. Dist. LEXIS 0, at *. The Court should interfere with Lead Plaintiff s selection only when necessary to protect the interests of the class. U.S.C. u-(a)()(b)(iii)(ii)(aa). See Cendant, F.d at (emphasizing that the PSLRA evidences a strong presumption in favor of approving a properly-selected lead plaintiff s decisions as to counsel selection and counsel retention. ). Here, the Sunrun Investor Group has selected Pomerantz and Rosen as Co-Lead Counsel. Both firms are highly experienced in the area of securities litigation and class actions, and have successfully
Case :-cv-00-crb Document Filed 0/0/ Page of 0 0 prosecuted numerous securities litigations and securities fraud class actions on behalf of investors, as detailed in the firms respective resumes. See Pafiti Decl., Exs. D, E. As a result of the firms extensive experience in litigation involving issues similar to those raised in this action, counsel of the Sunrun Investor Group have the skill and knowledge which will enable them to prosecute this action effectively and expeditiously. Thus, the Court may be assured that by approving the Sunrun Investor Group s selection of Counsel, the members of the class will receive the best legal representation available. IV. CONCLUSION For the foregoing reasons, the Sunrun Investor Group respectfully requests that the Court issue an Order: () consolidating the Related Actions for all purposes; () appointing the Sunrun Investor Group as Lead Plaintiff; () approving Pomerantz and Rosen as Co-Lead Counsel for the Class; and () granting such other relief as the Court may deem to be just and proper. Dated: July, 0 POMERANTZ LLP /s/ Jennifer Pafiti Jennifer Pafiti (SBN 0) North Camden Drive Beverly Hills, CA 00 Telephone: () - E-mail: jpafiti@pomlaw.com POMERANTZ LLP Jeremy A. Lieberman J. Alexander Hood II Marc C. Gorrie 00 Third Avenue, 0th Floor New York, New York 00 Telephone: --00 Facsimile: -- POMERANTZ LLP Patrick V. Dahlstrom 0 South LaSalle Street, Suite 0 Chicago, IL 00
Case :-cv-00-crb Document Filed 0/0/ Page of 0 Telephone: -- Facsimile: -- THE ROSEN LAW FIRM, P.A. Phillip Kim, Esq. Laurence M. Rosen, Esq. Madison Avenue, th Floor New York, New York 00 Telephone: () -00 Facsimile: () 0- Email: pkim@rosenlegal.com lrosen@rosenlegal.com Counsel for Movants and Proposed Co-Lead Counsel for the Class 0
Case :-cv-00-crb Document Filed 0/0/ Page of CERTIFICATE OF SERVICE I hereby certify that on July, 0, a copy of the foregoing was filed electronically and served by mail on anyone unable to accept electronic filing. Notice of this filing will be sent by e-mail to all parties by operation of the Court s electronic filing system or by mail to anyone unable to accept electronic filing as indicated on the Notice of Electronic Filing. Parties may access this filing through the Court s CM/ECF System. 0 0 /s/ Jennifer Pafiti Jennifer Pafiti