Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-02938/USCOURTS-cand-4_15-cv-02938-3/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

NORFOLK COUNTY RETIREMENT 

SYSTEM,

Plaintiff,

v.

SOLAZYME, INC., et al.,

Defendants.

Case No. 15-cv-02938-HSG 

ORDER GRANTING MOTION FOR 

APPOINTMENT OF LEAD 

PLAINTIFFS AND APPROVAL OF 

SELECTION OF COUNSEL

Re: Dkt. Nos. 16, 22, 26, 27, 29, 31

Pending before the Court in this securities action is a motion filed by Plaintiffs John 

Medlin, John Hussain, Norfolk County Retirement System, Nancy Ackels, and Leonardo 

Fernandez (collectively, the “Movants”) for an order appointing them as Lead Plaintiffs and 

approving their selection of Glancy Prongay & Murray LLP and Labaton Sucharow LLP to serve 

as co-Lead Counsel, as well as Robbins Geller Rudman & Dowd LLP to serve as Liaison Counsel. 

Dkt. Nos. 29, 31, and 50. 

Pursuant to Civil Local Rule 7-1(b), the Court finds that the briefs have thoroughly 

addressed the issues, rendering the matter suitable for disposition without oral argument. The 

hearing on this matter currently scheduled for October 8, 2015 is hereby vacated. The Court has 

carefully considered the arguments made by the parties and, for the reasons set forth below, 

GRANTS the Movants’ motion for appointment as Lead Plaintiffs and approves the Movants’ 

selection of Lead and Liaison Counsel.

I. BACKGROUND

Solazyme is a bioproducts company that uses algae-based fermentation to produce 

renewable oils for a range of personal and industrial uses. This putative class action lawsuit arises 

from alleged misstatements and omissions made by Solazyme concerning the construction 

progress, development, and production capacity associated with its facility located in Moema, 

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Brazil. On June 24, 2015, Norfolk County Retirement System filed this action, Dkt. No. 1, and 

published a notice of pendency of this lawsuit on Globe Newswire, a national business-oriented 

wire service, Dkt. No. 32-4. Movants seek to represent a class of persons and entities who 

purchased securities of Solazyme between February 27, 2014 and November 5, 2014 in bringing 

an action against Defendants for violations of Sections 11, 12(a)(2), and 15 of the Securities Act, 

15 U.S.C. §§ 77k, 77l, and 77o, and Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 

78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5. 

Movants moved for appointment as Lead Plaintiffs on August 24, 2015. Dkt. Nos. 29, 31, 

and 50. Several other investors also filed motions for appointment as Lead Plaintiff, Dkt. Nos. 16, 

22, 26, and 27, all but one of which were eventually withdrawn on the basis that the Movants 

appeared to have the largest financial interest in the relief sought by the class, Dkt. Nos. 40, 48, 

52. Peter Lenzenwoeger, the lone investor who has not withdrawn his motion for appointment as 

Lead Plaintiff, has not opposed the Movants’ motion, disputed that they have the largest financial 

interest in the relief sought by the class, or otherwise challenged their adequacy. The Defendants 

have filed a statement of non-opposition, but have requested that, should the Court appoint 

multiple firms as counsel, it specify the roles various counsel will play or state that “Defendants’ 

counsel may rely upon all agreements made with any appointed counsel, or other duly authorized 

representative of appointed counsel, and such agreements shall be binding on all plaintiffs.” Dkt. 

No. 49.

II. LEGAL STANDARDS 

“[T]he Ninth Circuit [has] laid out a three-step process for identifying the lead plaintiff 

pursuant to the statutory criteria” of the Private Securities Litigation Reform Act (“PSLRA”). In 

re Copper Mountain Sec. Litig., 305 F. Supp. 2d 1124, 1129 (N.D. Cal. 2004) (citing In re 

Cavanaugh, 306 F.3d 726, 729-31 (9th Cir. 2002)). “The first step consists of publicizing the 

pendency of the action, the claims made and the purported class period.” Cavanaugh, 306 F.3d at 

726. “In step two, the district court must consider the losses allegedly suffered by the various 

plaintiffs before selecting as the ‘presumptively most adequate plaintiff’—and hence the 

presumptive lead plaintiff—the one who ‘has the largest financial interest in the relief sought by 

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the class’ and ‘otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil 

Procedure.’” Id. at 729-30 (quoting 15 U.S.C. § 78u–4(a)(3)(B) (iii)(I)). “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.” Id. at 730. 

“The most adequate plaintiff shall, subject to the approval of the court, select and retain 

counsel to represent the class.” 15 U.S.C. § 77z–1(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 for N. Dist. of California, 586 F.3d 703, 711-12 (9th Cir. 2009) (citing 

Cavanaugh, 306 F.3d at 732, 734 & n. 14). “[I]f the lead plaintiff has made a reasonable choice of 

counsel, the district court should generally defer to that choice.” Id. at 712; see also id.

(approvingly citing In re Cendant Corp. Litig., 264 F.3d 201, 276 (3d Cir. 2001), in which the 

Third Circuit “enumerate[d] factors to consider in conducting this inquiry, including the lead 

plaintiff's sophistication and experience, the process through which the lead plaintiff selected its 

candidates for and final choice of lead counsel, the qualifications and experience of selected 

counsel, and evidence of arms-length negotiations between lead plaintiff and proposed counsel”).

III. DISCUSSION

A. Appointment of Lead Plaintiffs

Movants declare that they caused notice to be published on Business Wire on June 24, 

2015. Dkt. No. 32-4. Movants have therefore fulfilled the notice requirements of 15 U.S.C. § 

77z–1 (a)(3)(A). 

Movants declare that they collectively sustained over $640,000 in loss as a result of the 

misconduct alleged in the Complaint. See Dkt. No. 50 at 6. This amount is by far the largest 

financial interest in the relief sought. Compare Dkt. No. 26 (claiming a loss of approximately 

$52,000). Movants also appear to prima facie satisfy Rule 23’s requirements, since their claims 

arise out of the same events that form the putative class members’ alleged damages and there is no 

evidence that their interests and motivations are not aligned with the interests of the putative class. 

The Court must therefore “adopt a presumption that” Movants are “the most adequate plaintiff[s].”

Id. No other party has contested the Movant’s adequacy to represent the putative class, and thus 

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the statutory presumption that Movants are the “most adequate plaintiff” remains unrebutted.

B. Selection of Counsel

Movants’ chosen counsel have submitted firm resumes demonstrating their experience and 

success in litigating securities class actions. See Dkt. Nos. 30-4, 32-5, 32-6. The Court has no 

reason to suspect Movants did not engage in arms-length negotiations with their counsel before 

their selection, nor any reason to suspect that their counsel’s interests do not align with the 

interests of the putative class. Movants appear to have made a reasonable choice of counsel. 

However, the Court does agree with Defendants that the appointment of three law firms 

may result in miscommunication with Defendants if the firms’ roles are not clearly defined and 

maintained. While the Court will not order the three appointed firms to play particular roles in the 

litigation, it does order that Defendants’ counsel may rely upon all agreements made with any 

appointed counsel, or other duly authorized representative of appointed counsel, and such 

agreements shall be binding on all plaintiffs. It is up to the appointed firms to divide up litigation 

responsibilities in a manner that results in the efficient representation of the putative class.

IV. CONCLUSION

For the foregoing reasons, the motion of Plaintiffs John Medlin, John Hussain, Norfolk 

County Retirement System, Nancy Ackels, and Leonardo Fernandez for appointment as Lead 

Plaintiffs and for approval of their selection of counsel is GRANTED. Plaintiffs Plaintiffs John 

Medlin, John Hussain, Norfolk County Retirement System, Nancy Ackels, and Leonardo 

Fernandez are hereby APPOINTED to serve as Lead Plaintiffs in this action, pursuant to 15 

U.S.C. § 77z–1 (a)(3)(B). Plaintiffs’ selection of Glancy Prongay & Murray LLP and Labaton 

Sucharow LLP to serve as co-Lead Counsel, as well as Robbins Geller Rudman & Dowd LLP to 

serve as Liaison Counsel, is hereby APPROVED, pursuant to 15 U.S.C. § 77z–1(a)(3)(B)(v).

IT IS SO ORDERED.

Dated: October 8, 2015

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

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