Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_12-cv-05296/USCOURTS-cand-3_12-cv-05296-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 7:6(b) Federal Commodity Exchange Regulation

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CV 12-05265 RS 

ORDER

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United States District Court

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

SHANE A. JOHNSON et al. Individually and 

on Behalf of All Others Similarly Situated, 

 Plaintiffs, 

 

 v. 

OCZ TECHNOLOGY GROUP, INC. et al., 

 Defendants. 

____________________________________/ 

No. CV 12-05265 RS 

AMENDED 

ORDER CONSOLIDATING CASES 

AND APPOINTING OCZ 

TECHNOLOGY GROUP AS LEAD 

PLAINTIFF 

I. INTRODUCTION 

Nine related securities class action lawsuits are currently pending. The actions are 

brought on behalf of all those who purchased or otherwise acquired the securities of OCZ 

Technology Group, Inc. (“OCZ”) between July 10, 2012 and October 11, 2012, inclusive (“the 

Class Period”). The class seeks to recover damages under the Securities Exchange Act of 1934 

(“Exchange Act”) for failing to disclose and/or materially misleading the investing public 

concerning customer incentive programs that negatively impacted revenues. After four partial 

corrective disclosures, OCZ stock fell from $5.36 per share to $1.47 per share. 

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Four different plaintiffs timely moved for appointment as lead plaintiff and approval of 

their respective selections of counsel. Two of those plaintiffs have since withdrawn their 

motions. A third has conceded it does not have the largest financial interest, but remains ready 

and willing to serve should the remaining plaintiff not meet the requirements of Rule 23. Thus 

only one motion for appointment remains to be considered. In conjunction with their motions for 

appointment as lead plaintiff, plaintiffs have also filed motions for consolidation. Pursuant to 

Civil Local Rule 7-1(b), this matter has been taken under submission and decided without oral 

argument. 

II. LEGAL STANDARD 

A. Consolidation 

 Rule 42(a) of the Federal Rules of Civil Procedure grants the court discretion to 

consolidate “actions involving a common question of law or fact.” The Private Securities 

Litigation Reform Act (“PSLRA”) requires that, when “more than one action on behalf of a class 

asserting substantially the same claim or claims arising under this title has been filed, and any 

party has sought to consolidate those actions” the court shall not make a determination of lead 

plaintiff until after a decision on the motion to consolidate is rendered. 

B. Appointment of Lead Plaintiff 

 The PSLRA requires the court to appoint as lead plaintiff “the member or members of the 

purported plaintiff class that the court determines to be the most capable of adequately 

representing the interests of the class members.” 15 U.S.C. §78u-4(a)(3)(B)(I); Hodges v. 

Akeena Solar, Inc., 263 F.R.D. 528, 531 (N.D. Cal. 2009). The Act creates a rebuttable 

presumption that the most adequate plaintiff is the “person or group of persons” that (i) either 

filed the complaint or made a motion in response to the published notice; (ii) in the determination 

of the court, has the largest financial interest in the relief sought; and (iii) otherwise satisfies the 

requirements of Rule 23 of the Federal Rules of Civil Procedure. 15 U.S.C. § 78u–4(a)(3)(B)(iii). 

 The Ninth Circuit has articulated a three-part test to determine which plaintiff meets these 

criteria. First, the court must determine whether the first plaintiff to file an action issued a notice 

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publicizing the pendency of the action. Id. at 729 (citing 15 U.S.C. §78u-4(a)(3)(A)). Second, 

the court must decide which plaintiff has the most to gain financially from the lawsuit, and 

whether this plaintiff satisfies the requirements of Rule 23 of the Federal Rules of Civil 

Procedure. Id. at 730. Finally, the court must consider competing plaintiffs’ attempts to rebut the 

presumptive plaintiff’s showing that it satisfies Rule 23 of the Federal Rules of Civil Procedure. 

Id. Rule 23 provides that a party may serve as a class representative if the claims or defenses of 

the representative parties are typical of claims or defenses of the class and the representative 

parties fairly and adequately protect the interests of the class. Fed. R. Civ. Proc. 23(a). 

 As long as the plaintiff with the largest losses satisfies the typicality and adequacy 

requirements, he is entitled to lead plaintiff status. In re Cavanaugh, 306 F.3d 726, 732 (9th Cir. 

2002). The district court may not overcome this statutory presumption, even if it thinks a 

different plaintiff would do a better job. Id. Nor may the district court consider the relative 

merits of the plaintiffs seeking lead status. Id. Rather, the process is sequential, starting with the 

potential plaintiff with the greatest financial interest. Id. 

III. DISCUSSION 

A. Consolidation of Cases 

 The following actions have been related: 

 12-05288; 12-05296; 12-05329; 12-05345; 12-05381; 

 12-05423; 12-05476; 12-05684. 

Together this group of cases satisfies the requirements of Fed. R. Civ. Proc. 42(a). 

Additionally, the parties in the actions are substantially the same. Accordingly, for pre-trial 

purposes, the actions are consolidated into In re OCZ Technology Group, Inc. Securities 

Litigation., C 12-05265. All filings hereafter shall be made exclusively in Case No. C 12-

05265. The Clerk shall close the files of the other cases listed above. Plaintiff shall file a 

consolidated class action complaint. 

B. Appointment of Lead Plaintiff 

 The OCZ Investor Group is comprised of Leo Jegen, Vincent M. Monnier, Shih Leng 

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Tan, and Len C. Villacres. The Group has made a timely motion in response to the PSLRA early 

notice requirement. Thus, the first prong of the inquiry is satisfied. The next question is to 

determine if the OCZ Investor Group indeed has the largest financial interest. The Group 

suffered an alleged loss of approximately $1,083,666.93. This amount was determined by 

calculating how many shares were acquired during the Class Period, and then determining how 

many of those shares were held through each of the four partial disclosures. The loss calculation 

results from comparing the purchase price with the price drop attributable to each of the four 

partial disclosures, as contemplated in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 347 

(2005). No plaintiff challenges this calculation, or that it results in the largest investor interest. 

 The final factor focuses on whether the OCZ Investor Group satisfies the requirements of 

Rule 23 for typicality and adequacy. The Group purchased OCZ securities and allegedly 

suffered damages resulting from defendants’ misrepresentations and omissions. The Group’s 

claims and injuries thus “arise from the same conduct from which the other class members’ 

claims and injuries arise.” In re Oxford Health Plans, Inc. Sec. Litig., 182 F.R.D. 42, 50 

(S.D.N.Y. 1998); see also In re Chase Bank United States, N.A., 274 F.R.D. 286, 292 (N.D. Cal. 

2011). The Group further declares it is not subject to any unique or special defenses. The OCZ 

Investor Group therefore meets the typicality requirement of Rule 23 because its claims are the 

same as the claims of all other class members. A plaintiff meets the adequacy requirement if its 

interests are aligned with those of other members of the Class and he or she is able to prosecute 

the action vigorously through qualified counsel. See Lerwill v. Inflight Motion Pictures, Inc., 

582 F.2d 507, 512 (9th Cir. 1978). The OCZ Investor Group maintains it has a compelling 

interest in resolving this action due to the large financial losses suffered by the members of the 

Group. It further declares it has chosen competent counsel to represent the class in this action. 

In support of this declaration, it has submitted documents touting the expertise of its selected 

counsel. As a result, the OCZ Investor Group adequately represents the class. 

 The OCZ Investor Group consists of four sophisticated investors. Small, cohesive groups 

similar to the OCZ Investor Group are routinely appointed as Lead Plaintiff in securities actions 

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when they have shown their ability to manage the litigation effectively in the interests of the 

class without undue influence of counsel. See, e.g., In re Versata, Inc. Sec. Litig., 2001 WL 

34012374, at *6-7 (N.D. Cal. Aug. 20, 2001). In support of its motion for appointment as lead 

plaintiff, the OCZ Investor Group has submitted declarations from each of the four individuals 

comprising the Group professing the readiness to serve as a representative party on behalf of the 

class. They further aver they will work together to direct and supervise the activities of counsel 

to best vindicate the interests of all shareholders. Additionally, they have been in contact to 

discuss how information will be shared and how the litigation will be managed on a day-to-day 

basis. The Group has agreed that Leo Jegen will serve as the spokesperson and liaison with 

counsel and the Court. 

 Once a lead plaintiff is chosen, that plaintiff may select its counsel, subject to approval of 

the court. 15 U.S.C. §78u-4(a)(3)(B)(iv). The OCZ Investor Group has selected Levi & 

Korinsky LLP to serve as lead counsel. The Group has additionally chosen Punzalan Law to 

serve as local counsel and Brower Piven to serve as additional counsel. These designations are 

approved. 

IV. CONCLUSION 

 For the foregoing reasons, the OCZ Investor Group is appointed as lead plaintiff in this 

securities class action. Levi & Korinsky LLP will serve as lead counsel, Punzalan Law will 

serve as local counsel, and Brower Piven will serve as additional counsel. The unopposed 

motion to consolidate the actions listed above is granted. Plaintiff shall file a consolidated class 

action complaint. 

IT IS SO ORDERED. 

Dated: 1/4/13 

RICHARD SEEBORG

UNITED STATES DISTRICT JUDGE 

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