Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-01812/USCOURTS-casd-3_18-cv-01812-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:0078m(a) Securities Exchange Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JAMES STAUBLEIN, individually and 

on behalf of all others similarly situated,

Plaintiff,

v.

ACADIA PHARMACEUTICALS, INC., 

et al., 

Defendants.

Case No.: 18-cv-1647-AJB-BGS

ORDER:

(1) GRANTING CONSOLIDATION; 

(2) APPOINTING LEAD PLAINTIFF; 

and

(3) APPOINTING LEAD COUNSEL

(Doc. Nos. 13, 16, 18, 19, 20)

Before the Court are competing motions to appoint lead plaintiff and lead counsel in 

this case. Plaintiffs Joseph Paolantonio, Siry Investments, LP, and Thomas Wood all move 

to be appointed lead plaintiff. (Doc. Nos. 18, 19, 20.) Plaintiffs David Harper and Mitchell 

Johnson, who originally moved, filed non-oppositions to the competing motions. (Doc. 

Nos. 24, 29.) The Court GRANTS Wood’s motion for lead plaintiff and appointment of 

counsel, (Doc. No. 20), and DENIES all other competing motions, (Doc. Nos. 13, 16, 18, 

19), for the reasons outlined below. The Court also GRANTS the parties’ requests to 

consolidate.

I. BACKGROUND

Plaintiff represents a class of those who acquired ACADIA securities between April 

29, 2016, and July 9, 2018, and who are suing under the Securities Exchange Act of 1934. 

(Doc. No. 1 ¶ 1, Staublein Complaint.) Plaintiffs allege that on April 29, 2016, the U.S. 

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Food and Drug Administration (“FDA”) approved ACADIA’s lead drug, NUPLAZID. (Id.

¶¶ 2, 3.) On April 9, 2018, CNN reported that physicians and other experts were worried 

that NUPLAZID had been prematurely approved by the FDA due to the mounting deaths. 

(Id. ¶ 6.) Plaintiffs allege ACADIA made “materially false and/or misleading statements, 

as well as failed to disclose material adverse facts about the Company’s business, 

operations and prospects.” (Id. ¶ 12.) Specifically, Plaintiffs allege that ACADIA “failed 

to disclose: (1) that adverse events and safety concerns related to NUPLAZID threatened 

the drug’s initial and continuing FDA approval; (2) that ACADIA engaged in business 

practices likely to attract regulatory scrutiny; and (3) that, as a result of the foregoing, 

Defendants’ statements about ACADIA’s business operations, and prospects, were 

materially false and/or misleading and/or lacked a reasonable basis.” (Id.) 

II. REQUEST FOR CONSOLIDATION

Federal Rule of Civil Procedure 42(a) provides that “when actions involving 

common questions of law or fact are pending before the court, it . . . may order all the 

actions consolidated[.]” Fed. R. Civ. P. 42(a). The district court has “broad discretion under 

this rule to consolidate cases pending in the same district.” Investors Research Co. v. 

United States Dist. Ct., 877 F.2d 777, 777 (9th Cir. 1989). The purpose of consolidation is 

to avoid the unnecessary costs or delays that would ensue from proceeding separately with 

claims or issues sharing common aspects of law or fact. EEOC v. HBE Corp., 135 F.3d 

543, 550 (8th Cir. 1998).

Additionally, the Private Securities Litigation Reform Act (“PSLRA”) directs that 

cases should be consolidated when more than one action is filed on behalf of a class 

asserting substantially the same claim or claims. See In re Cendant Corp. Litig., 182 F.R.D. 

476, 478 (D. N.J. 1998) (citing 15 U.S.C. § 78u-4(a)(3)(B)(ii)). Further, 15 U.S.C. § 78u4(a)(3)(B)(ii) requires that any motions for consolidation be decided first, and that “as soon 

as practicable” thereafter, the Court “shall appoint the most adequate plaintiff as lead 

plaintiff for the consolidated actions.” Id.

Here, there are three actions which plaintiffs request to consolidate: Staublein v. 

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Acadia Pharmaceuticals et al., 18-cv-1647-AJB-BGS, Stone v. Acadia Pharmaceuticals 

et al., 18-cv-1672-AJB-BGS, and Barglow v. Acadia Pharmaceuticals et al., 18-cv-1812-

AJB-BGS. The three actions involve similar factual and legal issues surrounding the same 

alleged misconduct by ACADIA, between April 29, 2016, and July 9, 2018. (Doc. Nos. 

13-1 at 9–10; 16-1 at 5–6; 18-2 at 5; 19-1 at 4–5; 20-1 at 9–11.) Accordingly, the Court 

GRANTS the parties’ motions to consolidate. 

III. APPOINTMENT OF LEAD PLAINTIFF

Under the PSLRA, the district court “shall appoint as lead plaintiff the member or 

members of the purported class that the court determines to be the most capable of 

adequately representing the interest of the class members[.]” 15 U.S.C. § 78u-4(a)(3)(B)(i). 

The PSLRA creates a rebuttable presumption that the most adequate plaintiff should be the 

plaintiff who: (1) has filed the complaint or brought the motion for appointment of lead 

counsel in response to the publication of notice, (2) has the “largest financial interest” in 

the relief sought by the class, and (3) otherwise satisfies the requirements of Federal Rule 

of Civil Procedure 23. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(aa)–(cc). The presumption may 

be rebutted only upon proof that the presumptive lead plaintiff: (1) will not fairly and 

adequately protect the interests of the class or (2) is subject to “unique defenses” that render

such plaintiff incapable of adequately representing the class. 15 U.S.C. § 78u4(a)(3)(B)(iii)(II)(aa)–(bb).

By its terms, the PSLRA “provides a simple three-step process for identifying the 

lead plaintiff” in a private securities class action litigation. In re Cavanaugh, 306 F.3d 726, 

729 (9th Cir. 2002). “The first step consists of publicizing the pendency of the action, the 

claims made and the purported class period.” Id. At the second step, “the district court must 

consider the losses allegedly suffered by the various plaintiffs,” and select as the 

“presumptively most adequate plaintiff . . . the one who has the largest financial interest in 

the relief sought by the class and otherwise satisfies the requirements of Rule 23 of the 

Federal Rules of Civil Procedure.” Id. at 729–30 (internal citations omitted). Finally, at the 

third step, the district court “give[s] other plaintiffs an opportunity to rebut the presumptive 

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lead plaintiff’s showing that it satisfies Rule 23’s typicality and adequacy requirements.” 

Id. at 730. 

1. Procedural Requirements

Under the PSLRA, a plaintiff who files a securities litigation class action must 

provide notice to class members via publication in a widely-circulated national businessoriented publication or wire service within 20 days of filing the complaint. 15 U.S.C. § 78u4(a)(3)(A)(I). The notice must: (1) advise class members of the pendency of the action, the 

claims asserted therein, and the purported class period; and (2) inform potential class 

members that, within 60 days of the date on which notice was published, any members of 

the purported class may move the court to serve as lead plaintiff in the purported class. 15 

U.S.C. § 78u-4(a)(3)(A)(i)(I)–(II).

Here, Paolantonio, Siry Investments, and Wood all met the procedural requirements

and timely moved for appointment. (Doc. Nos. 18-2 at 6; 19-1 at 6; 20-1 at 12–13.)

2. Largest Financial Interest

Wood asserts that he “(1) purchased 244,410 Acadia shares; (2) expended 

$6,551,018 on his purchases of Acadia securities; (3) retained 100,000 shares of Acadia 

securities; and (4) as a result of the disclosures of the fraud, suffered a loss of approximately 

$812,129 on a FIFO basis or approximately $810, 874 on a LIFO basis in connection with 

his Class Period purchases.” (Doc. No. 20-1 at 14.) It is undisputed that Wood has the 

largest financial interest. (Doc. Nos. 27 at 8; 32 at 3.) Accordingly, it is easily established 

that Wood has the largest financial interest.

3. Rule 23 Requirements

Although Wood has the largest financial interest, Siry Investments alleges that Wood 

has not made the requisite showing of typicality or adequacy to trigger the PSLRA 

presumption. See Cavanaugh, 306 F.3d at 729–31 (“The third step of the process is to give 

other plaintiffs an opportunity to rebut the presumptive lead plaintiff’s showing that it 

satisfies Rule 23’s typicality and adequacy requirements. 15 U.S.C. § 78u4(a)(3)(B)(iii)(II).”).

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The typicality requirement asks whether the presumptive lead plaintiff has suffered 

the same or similar injuries as absent class members as a result of the same conduct by the 

defendants and are founded on the same legal theory. Hanon v. Dataproducts Corp., 976 

F.2d 497, 508 (9th Cir. 1992); Frias v. Dendreon Corp., 835 F. Supp. 2d 1067, 1075 (W.D. 

Wash. 2011) (citing Schonfield v. Dendreon Corp., Nos. C07-800MJP, C07-869MJP, C07-

870MJP, C07-898MJP, 2007 WL 2916533, at *4 (W.D. Wash. Oct. 4, 2007)). The 

representative claims need only be “reasonably co-extensive” with those of absent class 

members, rather than “substantially identical” to them. Hanlon v. Chrysler Corp., 150 F.3d 

1011, 1020 (9th Cir. 1998).

This requirement concerns whether “the representative parties will fairly and 

adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). The two primary 

adequacy inquiries are (1) whether there are conflicts of interest between the proposed lead 

plaintiff and the class and (2) whether plaintiff and counsel will vigorously fulfill their 

duties to the class. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011).

Siry Investments claimed that nothing is known of Wood’s identity, and therefore 

would make it impossible for the Court to determine typicality. (Doc. No. 27 at 9.) In Siry 

Investments’ opposition, Siry Investments identified a different Thomas Wood and 

accordingly, asserted that Wood may be subject to unique defenses as his identity was 

unknown. (Id. at 11–15.) However, in Wood’s reply, he identifies himself as a sixty-fiveyear-old business owner residing in Mississippi. (Doc. No. 30 at 5–8.) Accordingly, 

Wood’s identity is now known to the Court and the parties.

Siry Investments asserts that Wood’s motion appears to be the product of an 

improper and unprecedented lawyer-driven solicitation campaign. (Doc. No. 27 at 15–19.) 

Pomerantz, Wood’s proposed legal counsel, filed thirty-one separate press releases. (Id.)

While one of the goals of the PSLRA is to reduce lawyer-driven litigation, the cases relied 

upon by Siry Investment are distinguishable. In both Tsirekidze and Bowman, the lead 

plaintiff was a group of class members that had been specifically created by the law firms. 

See Bowman v. Legato Systems, Inc., 195 F.R.D. 655, 658 (N.D. Cal. 2000); Tsirekidze v. 

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Syntax-Brillian Corp., No. CV-07-2204-PHX-FJM, 2008 WL 942273, at *4 (D. Ariz. Apr. 

7, 2008). Thomas Wood is not a group of class members hand-selected by Pomerantz to 

serve as lead plaintiff. 

Siry Investments’ main argument against Wood being appointed lead plaintiff is that 

the redaction of Wood’s certification may implicate concerns that Wood is unaware that 

he is seeking appointment as lead plaintiff and whether he is aware that Pomerantz is his 

proposed lead counsel. (Doc. No. 27 at 9–11.) In Wood’s declaration attached to his reply, 

Wood declares “I have communicated with counsel from Pomerantz by telephone and 

email regarding this litigation.” (Wood Decl., Doc. No. 30-1 ¶ 5.) Importantly, in his 

declaration, Wood asserts: “Prior to the filing of my motion for consolidation, appointment 

as Lead Plaintiff, and approval of counsel, I was aware that Pomerantz would be filing this 

motion on my behalf as selection of counsel, and I authorized this filing.” (Id. (emphasis 

added).) Based on Wood’s declaration, the Court is satisfied that Wood was aware he was 

seeking appointment as lead plaintiff and that Pomerantz would be his proposed lead 

counsel as he authorized the filing of this motion. 

Accordingly, the Court GRANTS Wood’s motion for lead plaintiff and DENIES 

Paolantonio, Siry Investments, Harper and Johnson’s motions for lead plaintiff. 

IV. APPOINTMENT OF LEAD COUSNEL

The PSLRA provides that the “most adequate plaintiff 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).

Wood wishes to appoint “Pomerantz law firm as Lead Counsel for the Class.” (Doc. No. 

20-1 at 18.) Pomerantz has prosecuted numerous securities litigations and securities fraud 

class actions on behalf of investors. (Pafiti Decl., Ex. D, Doc. No. 20-1 at 18.) The Court 

finds Pomerantz has the resources and experience to effectively manage the class litigation. 

Thus, Pomerantz is appointed as Lead Counsel.

/ / /

/ / / 

/ / /

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V. CONCLUSION

For the reasons stated above, the Court GRANTS Wood’s motion for Consolidation 

of Related Actions, Appointment as Lead Plaintiff, and Approval of Selection of Counsel

in its entirety. (Doc. No. 20.) The Court DENIES Paolantonio, Siry Investments, Harper 

and Johnson’s motions to appoint lead plaintiff and to appoint lead counsel. (Doc. Nos. 13, 

16, 18, 19.) The Court ORDERS as follows:

1. Pursuant to Federal Rule of Civil Procedure 42(a), Staublein v. Acadia 

Pharmaceuticals et al., 18-cv-1647-AJB-BGS, Stone v. Acadia Pharmaceuticals et al., 18-

cv-1672-AJB-BGS, and Barglow v. Acadia Pharmaceuticals et al., 18-cv-1812-AJB-BGS,

and all related actions are consolidated for all purposes (the “Consolidated Action”). This 

Order shall apply to the Consolidated Action and to each case that relates to the same 

subject matter that is subsequently filed in this District or is transferred to this District, and 

is consolidated with the Consolidated Action.

2. A Master File is established for this proceeding. The Master File shall be Case 

No. 3:18-cv-01647-AJB-BGS. The Clerk shall file all pleadings in the Master File and note 

such filings on the Master Docket.

3. An original of this Order shall be filed by the Clerk in the Master File.

4. The Clerk shall mail a copy of this Order to counsel of record in the 

Consolidated Action.

5. Every pleading in the Consolidated Action shall have the following caption:

IN RE ACADIA PHARMACEUTICALS 

INC. SECURITIES LITIGATION

No. 3:18-cv-01647-AJB-BGS

6. The Court requests the assistance of counsel in calling to the attention of the 

Clerk of this Court the filing or transfer of any case that may properly be consolidated as 

part of the Consolidated Action.

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7. When a case that arises out of the same subject matter as the Consolidated 

Action is hereinafter filed in this Court or transferred from another court, the Clerk of this 

Court shall:

(a) File a copy of this Order in the separate file for such action; 

and

(b) Make the appropriate entry in the Master Docket for the 

Consolidated Action.

8. Each new case that arises out of the subject matter of the Consolidated Action 

shall be consolidated with the Consolidated Action. This Order shall apply thereto, unless 

a party objects to consolidation (as provided for herein), or to any provision of this Order, 

within 10 days after the date upon which a copy of this Order is served on counsel for such 

party by filing an application for relief, and this Court deems it appropriate to grant such 

application. Nothing in the foregoing shall be construed as a waiver of Defendants’ right 

to object to consolidation of any subsequently filed or transferred related action.

9. Pursuant to 15 U.S.C. § 78u-4(a)(3)(B), Thomas Wood is appointed to serve 

as Lead Plaintiff in the Consolidated Action.

10. Pursuant to 15 U.S.C. § 78u-4(a)(3)(B)(v), Thomas Wood’s selection of 

Pomerantz LLP as Lead Counsel for the class is approved. Lead Counsel shall have the 

authority to speak for all plaintiffs and class members in all matters regarding the litigation, 

including, but not limited to, pre-trial proceedings, motion practice, trial, and settlement. 

Additionally, Lead Counsel shall have the following responsibilities:

(a) to brief and argue motions;

(b) to initiate and conduct discovery, including, but not limited to, 

coordination of discovery with Defendants’ counsel, and the 

preparation of written interrogatories, requests for admissions, 

and requests for production of documents;

(c) to direct and coordinate the examination of witnesses in 

depositions;

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(d) to act as spokesperson at pretrial conferences;

(e) to call meetings of the plaintiffs’ counsel as they deem 

necessary and appropriate from time to time;

(f) to initiate and conduct any settlement negotiations with 

Defendants’ counsel;

(g) to consult with and employ experts; and

(h) to perform such other duties as may be expressly authorized 

by further order of this Court.

IT IS SO ORDERED.

Dated: February 26, 2019

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