Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-05598/USCOURTS-cand-5_06-cv-05598-3/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1331 Fed. Question: Securities Violation

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28 1 The plaintiffs also move to consolidate the actions. Because the court has already

issued an order consolidating the actions pursuant to stipulation by the parties, that issue is moot.

ORDER APPOINTING LEAD PLAINTIFF AND APPROVING SELECTION OF LEAD COUNSEL—C-06-05598 RMW

SPT

E-FILED on 2/12/07 

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

In re FOUNDRY NETWORKS, INC.

DERIVATIVE LITIGATION

This Document Relates To:

ALL ACTIONS.

No. C-06-05598 RMW

ORDER APPOINTING LEAD PLAINTIFF

AND APPROVING SELECTION OF LEAD

COUNSEL 

[Re: Docket Nos. 20, 26] 

Before the court are motions for appointment of lead plaintiff and approval of selection of

lead counsel by (1) Sunanda A. Desai, Jean McDonald and David M. Jackson ("Desai Group"); and

(2) Doug Edrington.1

 The Desai Group and Edrington oppose each other's motion. The court heard

oral argument on the motions on Friday, February 2, 2007. The court has read the moving and

responding papers and considered the arguments of counsel. For the reasons set forth below, the

court appoints the Desai Group as lead plaintiffs and the law firms of Keller Rohrback and Schiffrin

& Barroway as co-lead counsel for the above-captioned action.

I. ANALYSIS

A. Appointment of Lead Plaintiff

Foundry Networks, Inc. ("Foundry") has publicly announced that the accounting

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ORDER APPOINTING LEAD PLAINTIFF AND APPROVING SELECTION OF LEAD COUNSEL—C-06-05598 RMW

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measurement dates of certain stock option grants may differ from their recorded grant dates. The

Desai Group plaintiffs filed shareholder complaints derivatively on behalf of Foundry on September

12, 2006 alleging violations of federal and state laws based on Foundry's alleged backdating of stock

options. Plaintiff Doug Edrington filed a derivative complaint on behalf of Foundry on October 31,

2006 based on similar factual allegations. 

Nothing presented by the parties indicates that either of the proposed lead plaintiff have

"economic interests that are antagonistic to the interests of the class." See Larson v. Dumke, 900

F.2d 1363, 1367 (9th Cir. 1989) (setting forth the criteria required of a lead plaintiff in a derivative

action). The consolidated action is in its early stages and nothing indicates that either of the

proposed lead plaintiff would not pursue the action diligently, vigorously, and conscientiously. See

id. However, several factors weigh in favor of appointment of the Desai Group. The fact that the

individual plaintiffs in the Desai Group have worked cooperatively together is some indication of

their interest in vigorously pursuing the interest of those represented. In addition, although there is

no presumption in favor of selecting the plaintiff with the largest financial stake as there is in cases

under the Private Securities Litigation Reform Act, financial stake has some relevance to the

plaintiff's interest in a derivative action and the likelihood that the plaintiff will pursue the derivative

claims vigorously. Here, Edrington owns 666 shares of Foundry stock while each of the plaintiffs in

the Desai Group owns a greater number, collectively owning at least 2,700 shares. Finally, although

the quality of the pleadings is not a specific factor under Larson, Delaware courts have considered

the quality of the pleadings as an indicator of which plaintiff will best serve the interest of the

shareholder base as a whole. TCW Tech. Ltd. P'ship v. Intermedia Commc'ns, Inc., 2000 WL

1654504, *4 (Del. Ch. 2000). Here, plaintiff Jackson's complaint appears to be marginally better

tailored to the issues. Accordingly, the court appoints the Desai Group as lead plaintiffs. 

B. Approval of Class Counsel

Once the most adequate plaintiffs are selected, the "most adequate plaintiff[s] shall, subject

to the approval of the court, select and retain counsel to represent the class." 15 U.S.C.

§ 78u-4(a)(3)(B)(v). The Desai Group seeks appointment of two co-lead counsel in addition to 

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28 2 Specifically, (1) Keller Rohrback as co-lead counsel, (2) Schiffrin & Barroway as colead counsel, and (3) Bramson, Plutzik, Mahler & Birkhaeuser, LLP as liaison counsel. 

ORDER APPOINTING LEAD PLAINTIFF AND APPROVING SELECTION OF LEAD COUNSEL—C-06-05598 RMW

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separate liaison counsel.2 Based on the resumes submitted to the court, all three law firms appear

highly qualified to serve as counsel in the present action. In its tentative ruling, the court questioned

the functional difference between lead counsel and liaison counsel. At oral argument, counsel for

the Desai Group informed the court that counsel had decided no liaison counsel will be necessary in

this action. The court further expressed some concern about duplication of costs if two law firms

were appointed to serve as co-lead counsel. Counsel for the Desai Group assured the court that the

two firms have worked together efficiently in the past and represented that they would not bill more

than would be billed with only one lead counsel. Based on counsel's representations, the court is

satisfied that appointment of the law firms of Keller Rohrback and Schiffrin & Barroway as co-lead

counsel is appropriate in this matter. 

II. ORDER

For the reasons set forth above, the court appoints the Desai Group as lead plaintiffs and the

law firms of Keller Rohrback and Schiffrin & Barroway as co-lead counsel for the above-captioned

action.

DATED: 2/12/07

RONALD M. WHYTE

United States District Judge

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ORDER APPOINTING LEAD PLAINTIFF AND APPROVING SELECTION OF LEAD COUNSEL—C-06-05598 RMW

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Notice of this document has been electronically sent to:

Counsel for Plaintiffs:

Aelish Marie Baig AelishB@lerachlaw.com 

Henry I. Bornstein hib@lh-sf.com 

Juli E. Farris jfarris@kellerrohrback.com 

Lawrence Timothy Fisher ltfisher@bramsonplutzik.com

J. Thomas Hannan hannan@lh-sf.com 

Cari Campen Laufenberg claufenberg@kellerrohrback.com 

Elizabeth A. Leland bleland@kellerrohrback.com

Ronald Lovitt rl@lh-sf.com

Alan R Plutzik aplutzik@bramsonplutzik.com 

Lynn Lincoln Sarko lsarko@kellerrohrback.com 

Kathryn A. Schofield kschofield@bramsonplutzik.com

Shawn A. Williams shawnw@lerachlaw.com 

Monique Winkler MoniqueW@lerachlaw.com 

Eric L. Zagar ezagar@sbclasslaw.com 

Counsel for Defendants:

Shirli Fabbri Weiss shirli.weiss@dlapiper.com 

Counsel are responsible for distributing copies of this document to co-counsel that have not

registered for e-filing under the court's CM/ECF program.

Dated: 2/12/07 SPT

 Chambers of Judge Whyte

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