Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-03625/USCOURTS-cand-5_15-cv-03625-1/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

HOWARD WELGUS,

Plaintiff,

v.

TRINET GROUP, INC., et al.,

Defendants.

Case No. 15-cv-03625-BLF 

ORDER GRANTING PLAINTIFF 

HOWARD WELGUS’ MOTION FOR 

APPOINTMENT AS LEAD PLAINTIFF 

AND APPROVAL OF SELECTION OF 

COUNSEL

[Re: ECF 17]

Before the Court is Plaintiff Howard Welgus’ unopposed Motion for Appointment as Lead 

Plaintiff and Approval of Selection of Counsel. ECF 17. Pursuant to Civil Local Rule 7-1(b), the 

Court finds this matter suitable for submission without oral argument and hereby VACATES the 

hearing scheduled for December 10, 2015. For the reasons stated herein, the Court GRANTS 

Plaintiff’s motion.

I. BACKGROUND

On August 7, 2015, Plaintiff Howard Welgus (“Welgus”) filed this putative securities class 

action lawsuit against Defendants TriNet Group, Inc. (“TriNet”), Burton M. Goldfield, and 

William Porter (collectively, “Defendants”). Compl., ECF 1. Welgus alleges that, from May 5, 

2014 to August 3, 2015 (“Class Period”), Defendants issued materially false and misleading 

statements and concealed material adverse facts regarding TriNet’s financial condition and growth 

prospects. Compl. ¶¶ 1, 7, 8, 33, 42. Welgus alleges that, as a result of these misrepresentations

and omissions, “TriNet common stock traded at artificially inflated prices during the Class Period, 

reaching a high of $37.88 per share on March 3, 2015.” Id. ¶ 9. Welgus alleges that, after the 

misrepresentations and omissions became apparent, the prices “fell precipitously,” reaching a low 

of $16.33 per share on August 4, 2015. Id. ¶¶ 45, 46. As a result, Welgus filed the instant lawsuit 

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for violations of the Securities Exchange Act of 1934 on behalf of all persons who purchased or 

otherwise acquired TriNet common stock during the Class Period. Id. ¶ 1.

On October 6, 2015, Welgus filed this motion seeking appointment as lead plaintiff and

approval of Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) as lead counsel for the 

class. No other plaintiffs have sought to be named lead plaintiff, and no other law firms have 

sought to be named lead counsel.

II. LEGAL STANDARD

A. Lead Plaintiff

The Private Securities Litigation Reform Act of 1995 (“PSLRA”) governs the procedure 

for selection of lead plaintiff in all private class actions under the Securities Exchange Act of 

1934. 15 U.S.C. § 78u-4(a)(3). Pursuant to the PSLRA, the court 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,” also referred to as the “most 

adequate plaintiff.” Id. at § 78u-4(a)(3)(B)(i).

The PSLRA “provides a simple three-step process for identifying the lead plaintiff.” In re 

Cavanaugh, 306 F.3d 726, 729 (9th Cir. 2002). First, the pendency of the action, the claims made, 

and the purported class period must be publicized in a “widely circulated national businessoriented publication or wire service.” Id.; see also 15 U.S.C. § 78u-4(a)(3)(A)(i)(I). This notice 

must be published within 20 days of the filing of the complaint. Id. It must also alert members of 

the purported class that they have 60 days to move for appointment as lead plaintiff. 15 U.S.C. § 

78u-4(a)(3)(A)(i)(II).

Second, the court must identify the presumptive lead plaintiff. To do so, the court “must 

compare the financial stakes of the various plaintiffs and determine which one has the most to gain 

from the lawsuit.” Cavanaugh, 306 F.3d at 730. The court must then determine whether that 

individual, “based on the information he has provided in his pleadings and declarations,” satisfies 

the requirements of Rule 23(a), “in particular those of ‘typicality’ and ‘adequacy.’” Id. If the

plaintiff with the largest financial interest satisfies these requirements, he becomes the 

“presumptively most adequate plaintiff.” Id.; see also 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I). 

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Finally, the other plaintiffs must have “an opportunity to rebut the presumptive lead 

plaintiff's showing that [he] satisfies Rule 23' s typicality and adequacy requirements.” 

Cavanaugh, 306 F.3d at 730. Unless a member of the purported plaintiff class provides proof that 

the presumptive plaintiff “(aa) will not fairly and adequately protect the interests of the class; or 

(bb) is subject to unique defenses that render such plaintiff incapable of adequately representing 

the class,” the court must appoint the presumptively most adequate plaintiff as lead plaintiff. 15 

U.S.C. § 78u-4(a)(3)(B)(iii)(II); see also Cavanaugh, 306 F.3d at 732. 

B. Lead Counsel

Under the PLSRA, the lead plaintiff has the right, subject to court approval, to “select and 

retain counsel to represent the class.” 15 U.S.C. § 78u–4(a)(3)(B)(v). “[T]he district court should 

not reject a lead plaintiff’s proposed counsel merely because it would have chosen differently.” 

Cohen v. U.S. Dist. Court, 586 F.3d 703, 711 (9th Cir. 2009) (citation omitted). “[I]f the lead 

plaintiff has made a reasonable choice of counsel, the district court should generally defer to that 

choice.” Id. at 712 (citations omitted).

III. ANALYSIS

A. Procedural Requirements

Pursuant to the PSLRA, Welgus published a notice of the pending action on August 7, 

2015, the same date that he filed the complaint in this case. See 15 U.S.C. § 78u-4(a)(3)(A)(i); see 

also O’Mara Decl. Exh. C, ECF 18-3. The notice announced the pendency of this action, listed the 

claims, specified the class period, and advised putative class members that they had 60 days from 

the date of the notice to file a motion to seek appointment as lead plaintiff in the lawsuit. Id. Thus, 

the notice complied with the PSLRA’s requirements. See 15 U.S.C. § 78u–4(a)(3)(A).

As noted above, Welgus then filed this motion on October 6, 2015, the last day within the 

60 day deadline. Welgus has therefore met the statutory notice requirements.

B. Financial Interest

The Court must next determine whether Welgus qualifies as the most adequate plaintiff. 

To make this determination, the Court must first consider Welgus’ financial interest in the relief 

sought. See Cavanaugh, 306 F.3d at 730. 

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Welgus has submitted a sworn certification establishing that he made seven purchases, 

totaling 1,453 shares, of TriNet stock over the Class Period. See O’Mara Decl. Exh. A, ECF 18-1. 

Welgus also made four sales, totaling 520 shares. Id. Welgus’ loss over the Class Period amounted 

to $3,574.72. Id.; see also O’Mara Decl. Exh. B, ECF 18-2. 

Because Welgus was the only movant for appointment as lead counsel and the motion is 

unopposed, Welgus is necessarily the prospective lead plaintiff with the greatest financial interest 

in the litigation. See Notice of Non-Opposition, ECF 23 at 1. See also City of Dearborn Heights 

Act 345 Police & Fire Ret. Sys. v. Align Tech., Inc., No. 12-CV-06039-LHK, 2013 WL 2368059, 

at *3 (N.D. Cal. May 29, 2013) (quoting Bassin v. Decode Genetics, Inc., 230 F.R.D. 313, 316 

(S.D.N.Y.2005)) (“Without access to financial information from other parties, the Court is 

constrained to conclude that the [proposed plaintiff's] alleged loss best qualifies it to serve as lead 

plaintiff.”).

C. Rule 23 Requirements 

Having determined that Welgus is the prospective lead plaintiff with the greatest financial 

stake in this litigation, the Court must next consider whether Welgus satisfies the typicality and 

adequacy requirements of Rule 23(a).1 “When the court makes [this] initial determination, it must 

rely on the presumptive lead plaintiff's complaint and sworn certification; there is no adversary 

process to test the substance of those claims.” Cavanaugh, 306 F.3d at 730. As such, Welgus 

need only make a prima facie showing that he satisfies the Rule 23 requirements of typicality and 

adequacy. See id. at 731.

In determining whether typicality is satisfied, a Court inquires “whether other members 

have the same or similar injury, whether the action is based on conduct which is not unique to the 

named plaintiffs, and whether other class members have been injured by the same course of 

conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). In this case, like all 

 

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Federal Rule of Civil Procedure 23(a) sets forth four requirements for class certification: (1) 

numerosity, (2) commonality, (3) typicality, and (4) adequacy. Fed. R. Civ. P. 23(a). At the 

appointment of lead plaintiff stage, courts need only consider typicality and adequacy, as the 

failure to satisfy numerosity or commonality would preclude certifying a class action at all. 

Cavanaugh, 306 F.3d at 730 n.5.

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other members of the purported class, Welgus purchased TriNet stocks during the Class Period, 

when TriNet’s stock prices were allegedly artificially inflated by Defendants’ misrepresentations 

and/or omissions, and Welgus allegedly suffered damages when those misrepresentations and/or 

omissions came to light. Welgus’ claims thus appear to be typical, if not identical, to the claims of 

other members of the putative class. 

The test for adequacy asks whether the lead plaintiff and his counsel “have any conflicts of 

interest with other class members” and whether the lead plaintiff and his counsel will “prosecute 

the action vigorously on behalf of the class.” Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 

2003). Here, there is no indication of conflicts between Welgus and other class members and 

Welgus’ diligence in seeking appointment as lead plaintiff suggests that he and his counsel will 

prosecute this action vigorously. Thus, Welgus has made a prima facie showing of typicality and 

adequacy, as required at this stage, and the Court finds that Welgus qualifies as the presumptively 

most adequate plaintiff under the PSLRA. 

D. Opportunity to Rebut

Welgus’ motion is unopposed and no member of the purported plaintiff class has provided 

proof that Welgus “will not fairly and adequately protect the interests of the class” or that Welgus

“is subject to unique defenses that render [him] incapable of adequately representing the class.” 15 

U.S.C. § 78u-4(a)(3)(B)(iii)(II). Accordingly, the Court APPOINTS Welgus to serve as lead 

plaintiff. 

E. Lead Counsel

No parties have objected to Welgus’ selection of Robbins Geller as counsel. The Court 

has reviewed the firm’s resume, O’Mara Decl. Exh. D, and is satisfied that Welgus has made a 

reasonable choice of counsel. Accordingly, the Court APPROVES Welgus’ selection of Robbins 

Geller as lead counsel.

IT IS SO ORDERED.

Dated: December 3, 2015

 ______________________________________

BETH LABSON FREEMAN

United States District Judge

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