Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-03754/USCOURTS-cand-5_06-cv-03754-1/pdf.json

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

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United States District Court

For the Northern District of California

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 The Related Derivative Cases are: In re Maxim Integrated Products, Inc. Derivative

Litigation, C-06-3344 (filed May 22, 2006); City of Pontiac Policemen's and Firemen's Retirement

System v. Gifford, et al., C-06-3754 (filed June 14, 2006); Corey v. Gifford, et al., C-06-3755 (filed

June 14, 2006).

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

In re Maxim Integrated Products, Inc.

Derivative Litigation

 /

NO. C 06-03344 JW 

ORDER CONSOLIDATING RELATED

DERIVATIVE CASES AND APPOINTING

LEAD PLAINTIFFS AND LEAD

COUNSEL; STAYING DISCOVERY 

I. INTRODUCTION

There are currently four related shareholders' derivative actions (the "Related Derivative

Cases") on behalf of Nominal Defendant Maxim Integrated Products, Inc., pending before the Court. 

Two of the cases have already been consolidated.1 Presently before the Court are a number of

motions to consolidate all four Related Derivative Cases and to appoint lead plaintiff and lead

counsel. The Court conducted a hearing on October 23, 2006. Based on the papers filed to date and

the oral arguments of counsel, the Court ORDERS (1) the Related Derivative Cases consolidated;

(2) City of Pontiac Policemen's and Firemen's Retirement System and Eugene Horkay, Jr. appointed

co-Lead Plaintiffs; and (3) Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach") and

Schiffrin & Barroway ("Schiffrin") appointed co-Lead Counsel.

Case 5:06-cv-03754-JW Document 10 Filed 10/25/06 Page 1 of 5
United States District Court

For the Northern District of California

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II. BACKGROUND

On June 14, 2006, the Court consolidated the first two derivative complaints filed on behalf

of Maxim Integrated Products Robert McKinney v. Frederick Beck, et al., C-06-3344, and Eugene

Horkay v. Frederick Beck, et al., C-06-3395. On that same day, two additional complaints were

filed by City of Pontiac Policemen's and Firemen's Retirement System ("Pontiac Retirement

System") and Elias Corey ("Corey"). The Court found that these derivative actions were related

within the meaning of Civil Local Rule 3-12(a). (See Related Case Order, Docket Item No. 43.)

On August 15, 2006, all Plaintiffs and Defendants filed a stipulation to consolidate the

newest two cases with the two that were previously filed. The stipulation also extended to the

appointment of co-lead plaintiffs and co-lead counsel. (Docket Item No. 41.)

III. DISCUSSION

The Derivative Plaintiffs seek consolidation of the Related Derivative Cases and

appointment of lead plaintiff and lead counsel. The Court must determine whether the cases should

be consolidated before it considers the appointment of lead plaintiff and lead counsel.

A. Consolidation of the Related Derivative Cases

A district court has broad discretion to consolidate actions involving "common issues of law

or fact." Fed. R. Civ. P. 42(a); Investors Research Co. v. United States District Court for the Central

District of California, 877 F.2d 777 (9th Cir. 1989). In exercising its broad discretion to order

consolidation, the district court "weighs the saving of time and effort consolidation would produce

against any inconvenience, delay, or expense that it would cause." Huene v. U.S.,743 F.2d 703, 704

(9th Cir. 1984).

Here, the Derivative Plaintiffs move for consolidation of the two new Related Derivative

Cases. Having reviewed the complaints in these actions, the Court concludes that they all involve

virtually identical factual issues, in particular whether the Defendants participated in an illegal stock

option backdating scheme. The legal issues involved in the four actions are substantially similar;

each case alleges violations of federal and state securities laws and breaches of the Defendants'

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fiduciary duties. Accordingly, the Court finds it appropriate to consolidate the Related Derivative

Cases in keeping with the parties' stipulation. 

B. Appointment of Lead Plaintiffs

Under Federal Rule of Civil Procedure 23.1, a plaintiff in a shareholders’ derivative action

must “fairly and adequately represent the interests of the shareholders or members similarly situated

in enforcing the right of the corporation or association.” Factors courts have considered in analyzing

a plaintiff’s fitness to be lead plaintiff include: (1) whether the plaintiff held shares during the

relevant time period; (2) whether the plaintiff is represented by capable counsel; and (3) whether the

plaintiff is subject to any unique defense that would frustrate appointment. See Horn v. Raines, 227

F.R.D. 1, 3 (D.D.C. 2005); Millman v. Brinkley, Nos. 03-cv-3831, 03-cv-3832, 03-cv-0058, 2004

WL 2284505, at *3 (N.D. Ga. Oct. 1, 2004).

The parties have stipulated that the Pontiac Retirement System and Eugene Horkay should

serve as Lead Plaintiffs. Both parties are capable of representing the interests of Maxim and its

shareholders. The Court does not find that any factors against establishing this proposed leadership

structure, so the Pontiac Retirement System and Eugene Horkay are appointed co-Lead Plaintiffs.

C. Appointment of Lead Counsel

The Lead Plaintiffs have selected Lerach and Schiffrin to represent them in this action. Both

firms have substantial experience with similar shareholder actions. The Court finds it appropriate to

appoint Lerach and Schiffrin as co-Lead Counsel.

IV. CONCLUSION

The Court ORDERS (1) the Related Derivative Cases consolidated; (2) Pontiac Retirement

System and Eugene Horkay appointed co-Lead Plaintiffs; and (3) Lerach and Schiffrin appointed coLead Counsel.

The consolidated cases shall be identified as In re Maxim Integrated Products Derivative

Litigation, File No. C-06-3344-JW. 

The Plaintiffs shall file their Consolidated Complaint by December 12, 2006. Defendants'

response or dispositive motion shall be filed by January 22, 2007. 

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For the Northern District of California

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Pursuant to the Court's order in In re: Altera Corp. Derivative Litigation, 06-cv-03447-JW,

Docket Item No. 36, discovery is STAYED pending Defendants' anticipated dispositive motion.

The parties shall appear for a Case Management Conference on March 5, 2007. Pursuant to

the Civil Local Rules of the Court, the parties shall file a joint case management statement no later

than ten (10) days before the date of the conference.

Dated: October 25, 2006 

JAMES WARE

United States District Judge

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United States District Court

For the Northern District of California

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THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED

TO:

Christina Leigh Wu christinawu@quinnemanuel.com

Douglas Leavitt LEAVITT@DS-L.COM

Eric L. Zagar ezagar@sbclasslaw.com

John M. Potter johnpotter@quinnemanuel.com

Jonathan Herschel Bornstein jonathan@bornsteinandbornstein.com

Lita M. Verrier lverrier@ropers.com

Michael J. Ioannou mioannou@ropers.com

Patrick C. Doolittle patrickdoolittle@quinnemanuel.com

Scott G. Lawson scottlawson@quinnemanuel.com

Susan Germer susangermer@quinnemanuel.com

Travis E. Downs travisd@lerachlaw.com

Dated: October 25, 2006 Richard W. Wieking, Clerk

By: /s/ JW Chambers 

Elizabeth Garcia

Courtroom Deputy

Case 5:06-cv-03754-JW Document 10 Filed 10/25/06 Page 5 of 5