$386,016. Because it purchased more shares, expending more money and has the greatest
claimed losses, Makor Issues is the plaintiff with the largest financial interest in the case.

Cc The Requirements of Rule 23.

Finally, Makor Issues has also satisfied its burden by making a preliminary showing that
it satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure. See 15 U.S.C.
78u-4(a)(3)(B)(iii)(D(cc). Rule 23(a) provides that a party may serve as a class representative
“only if: (1) the class is so numerous that joinder of all members is impracticable, (2) there are
questions of law or fact common to the class, (3) the claims or defenses of the representative
parties are typical of the claims and defenses of the class, and (4) the representative parties will
fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a). In selecting the
lead plaintiff under the PSLRA, however, typicality and adequacy of representation are the only
relevant considerations. Lax v. First Merchants Acceptance Corp., 1997 WL 461036 at *6 (N.D.
Ill. Aug. 11, 1997) (‘““[a] wide-ranging analysis under Rule 23 is not appropriate and should be
left for consideration of a motion for class certification. This inquiry, therefore, focuses on...
typicality and adequacy.””) (brackets in original; citation omitted).

Under Rule 23(a), the plaintiff's claims are typical if they “arise[] from the same event or
practice or course of conduct that gives rise to the claims of class members and his or her claims
are based on the same legal theory.” Rosario v, Livaditis, 963 F.2d 1013, 1018 (7" Cir. 1992)
(quotations omitted). The claims of the class representative need not be identical to satisfy the

typicality requirement. Typicality exists, however, even if there are some factual distinctions

2 Of course, at this stage, the Court has received information concerning only various plaintiffs’
claimed losses. No evidence has been preferred and no decision has been rendered as to the
legally compensable damages, if any, based on plaintiffs’ allegations.

4



counsel. The Court hereby places the parties on notice, however, that it will carefully scrutinize
any proposed fee award and will not hesitate to reject such an award if it proves to be
unreasonable. See 15 U.S.C. § 78u-4(a)(6) (limiting the total award of attorneys’ fees and
expenses to “a reasonable percentage of the amount of any damages and prejudgment interest
actually paid to the class”). See also In re Sprint Corp. Sec. Litig., 164 F.Supp.2d 1240, 1244 (D.
Kan. 2001) (“Co-lead counsel are hereby on notice that the court will not approve any possible
award of fees and expenses that reflects duplication, inefficiency, or the costs of coordinating the
efforts of the two firms.”).

Accordingly, the Court approves Makor Issues’ selection of Millberg Weiss as lead
counsel and Miller Faucher as liaison counsel.

CONCLUSION
Makor Issues’ motion to serve as lead plaintiff is granted. In addition, Makor Issues’

motion to approve the selection of Millberg Weiss as lead counsel and Miller Faucher as liaison

Logie £

US. District Court Judge

counsel is also granted.

Dated: September 26, 2002



23 of the Federal Rules of Civil Procedure.” 15 U.S.C. 78u-4(a)(3)(B)(iii)(aa); (bb); and (cc).
This presumption may be rebutted, however, if a member of the purported class establishes that
the “presumptively most adequate plaintiff will not fairly and adequately protect the interests of
the class or is subject to unique defenses that render such plaintiff incapable of adequately
representing the class.” 15 U.S.C. § 78u-4(a)(3)(B)(iv).

In this case, Makor Issues most sufficiently meets the requirement for lead plaintiff under
the PSLRA and is therefore appointed as lead counsel. Mayo v. Apropos Technology, Inc., No.
01 C 8406, 2002 WL 193393 at *3-4 (N.D. Il. Feb. 7, 2002).

A. Timely Filings.

On July 2, 2002, the plaintiff published the required notice informing the class members
of their right to file a motion for appointment as lead plaintiff, and thus, motions for appointment
as lead counsel were due by September 3, 2002. See 15 U.S.C. 77z-1(a)(3)(A}(i)(D). Makor
Issues filed its motion for appointment as lead plaintiff on September 3, 2002, and its motion
was, therefore, timely.

B. Largest Financial Interest.

Based on the present record, Makor Issues has the largest financial interest in the relief
sought. Specifically, Makor Issues contends that it purchased 237,846 shares of Tellabs stock
during the purported class period. The total purchase price for these shares was $6,687,713. In
contrast, the Bordelove plaintiffs purchased 18,500 shares of Tellabs stock at a total purchase
price of $679,288. In addition, Makor Issues claims losses of $1,072,364 from its purchase of

Tellabs stock during this period, compared to the Bordelove Plaintiffs claimed reported losses of



between the claims of the named plaintiff and those of other class members. De La Fuente v.
Stokley-Van Camp, Inc., 713 F.2d 225, 232 (7" Cir. 1983). Here, for purposes of selecting the
lead plaintiff, Makor Issues satisfies the typicality requirement because it (1) purchased Tellabs
securities during the purported class period; (2) paid prices allegedly inflated because of claimed
false and misleading statements by the defendants; and (3) thereby allegedly suffered damages.
Mayo, 2002 WL 193393, at *4.

As to the adequacy requirement, the plaintiff must demonstrate that (1) his claims are not
antagonistic or in conflict with those of the class; (2) he has sufficient interest in the outcome of
the case to ensure vigorous advocacy; and (3) he is represented by competent, experienced
counsel who be able to prosecute the litigation vigorously. Id.; Fischler v. Amsouth
Bancorporation, No. , 1997 WL 118429, at *3 (M.D. Fla. Feb. 6, 1997). In this case, there is no
evidence of any conflict between the interests of Makor Issues and the purported class. Further,
Makor Issues appears to have a substantial interest in the outcome of this case and is represented
by competent, experienced counsel. Thus, for purposes of selecting the lead plaintiff, it is clear
that Makor Issues satisfies the adequacy requirement.

Il. SELECTION OF LEAD COUNSEL.

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){v). Thus,
although Makor Issues can identify counsel that it would prefer to have represent its interests in
the lawsuit, “[t]he decision to approve counsel selected by the Iead plaintiff is a matter within the
discretion of the district court.” In re Party City Securities Litigation, 189 F.R.D. 91, 114

(NJ. 1999).



aes Ortr Foo)
United States District Court, Northern District of Illinois

Name of Assigned Jud; Sitting Judge if Oth
noe Magistrate Judge Amy J. St, Eve than Assigned Judge
CASE NUMBER 02 C 4356 DATE 9/26/2002
CASE Thomas Johnson vs. Tellabs, et al
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.}
DOCKET ENTRY:

gM a Filed motion of [ use listing in “Motion” box above.]

(2) QO Brief in support of motion due
@) a Answer brief to motion due . Reply to answer briefdue___.
(4) oO Ruling/Hearingon_ set fora
(5) o Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at
(1) QO Trial[set for/re-set for] on at
(8) oO [Bench/Jury trial] [Hearing] held/continued to at
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
CIFRCP4(m) (ClLocalRule 41.1 COFRCP41(a\(1) CFRCP41(a)(2).
ao) =i [Other docket entry] Enter Memorandum Opinion and Order. Makor Issues’ motion to serve as
lead plaintiff is granted. In addition, Makor Issues’ motion to approve the selection of Milberg Weiss
Bershad Hynes and Lerach LLP as lead counsel and Miller Faucher and Cafferty LLP as liaison counsel
is also granted, Plaintiffs are to file their Amended Consolidated Complaint by 11/12/02.
(il) if [For further detail see order attached to the original minute order.)
No notices required, advised in open court.
No notices required.
Notices mailed by judge's staff.
Notified counsel by telephone.
wv | Docketing to mail notices.
Mail AO 450 form.
Copy to judge/magistrate judge. LYNO3 13INI S10 a)
yurtroom po eg
THe! Seputy’s Cue Ss
initials
> Date/time received in
\. =~ central Clerk’s Office



Makor Issues has selected the firm of Millberg Weiss Bershad Hynes & Lerach LLP as
proposed lead counsel and Miller Faucher and Cafferty LLP as proposed liaison counsel. Both
firms have substantial experience in securities class action litigation. Millberg Weiss has
represented to the Court that it intends to initially staff the case with one partner and one senior
associate, but that “[a]s the demands of the litigation increase, Millberg Weiss . . . will increase
its commitment of professionals accordingly.” (R. 33-1, Supp. Filing of Makor Issues & Rights
in Further Support of its Motion for Appointment as Lead Plaintiff and Approval of Selection of
Lead Counsel, at 3.) Further, Millberg Weiss anticipates seeking an award of attorneys’ fees as a
percentage of the “common fund” should such a fund be created. Millberg Weiss has represented
that “[u]nder no circumstances would the fee application exceed [33% of the fund].” (Id. at 4.)

Makor Issues suggests, however, that the issue of fees should not intrude on the approval
of plaintiff's selection of lead counsel, suggesting that the Court’s authority to reject a fee
proposal at the conclusion of the litigation better promotes efficiency and creates greater
incentives for the attorneys to maximize the recover for the class. (/d.) Several courts have
questioned the suggestion that potential attorneys’ fees are irrelevant to the approval of lead and
liaison counsel. As Judge Shadur has noted, “if the presumptive lead plaintiffs were to insist on
their class counsel handling the action on . . . [a] materially less favorable contractual basis, that
insistence would effectively rebut the presumption that the putative class representatives, despite
the amounts that they have at stake personally, were indeed the ‘most adequate plaintiffs’... ”
In re Bank One Shareholders Class Actions, 96 F.Supp.2d 780, 784 (N.D. Ill. 2000). Because
the anticipated staffing and proposed fees suggested by Millberg Weiss do not appear patently

unreasonable, the Court will not disapprove Makor Issues’ selection of that firm as proposed lead



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION Doc, HETED

THOMAS JOHNSON

Plaintiff,
Case No. 02 C 4356
Vv.
Honorable Judge Amy J. St. Eve
TELLABS, INC. MICHAEL J. BIRCK,
and RICHARD C, NOTEBAERT,

weve

Defendants.
MEMORANDUM OPINION AND ORDER

This is a complex securities fraud case brought as a putative class action against Tellabs,
Inc., Michael Birck, and Richard C. Notebaert.! The case involves alleged violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. The purported class
includes all persons who purchased Tellabs stock during the approximate six month period from
December 11, 2000 through June 19, 2001. Four plaintiffs have filed motions seeking
appointment as lead plaintiff and lead counsel in this action: (1) Makor Issues & Rights, Ltd.
(“Makor Issues”); (2) the Bordelove Proposed Lead Plaintiffs (the “Bordelove Plaintiffs”); (3)
the Carrier Group; and (4) Daniel Dawdy.

On September 17, 2002, the parties appeared before the Court on their motions seeking

appointment as lead plaintiff and approval of lead counsel. At that time, the Court directed each

' The Court recently consolidated with this case another eight separate lawsuits against Tellabs
raising substantially the same allegations: Gambino v. Tellabs, Inc., et al., No. 02 C 4709;
McBride v. Tellabs, Inc., et al., No. 02 C 4993; Potash y. Tellabs, Inc., et al., No. 02 C 5010;
Scannell v. Tellabs, Inc., et al., No. 02 C 5011; Hart v. Tellabs, Inc., et al., No. 02 C 5288;
Ernswell Investments, Inc. v. Tellabs, Inc., et al., No. 02 C 5347; Davis v. Tellabs, Inc., et al.,
No. 02 C 5353; and Dunbar v. Tellabs, Inc., et al., No. 02 C 5498.

1


party to supplement their motions with additional information concerning their suitability as lead
plaintiff and their selection for lead counsel, including: (1) the total shares of Tellabs stock
purchased during the proposed class period; (2) the net shares of Tellabs stock they purchased
during the proposed class period; (3) the net amounts spent on Tellabs stock during the proposed
class period; (4) the amount of losses suffered during the class period; (5) anticipated fees from
proposed lead counsel; and (6) a description from proposed lead counsel of. anticipated staffing.
Pursuant to the Court’s order, Makor Issues and the Bordelove Plaintiffs made supplemental
filings with the requested information. The Carrier Group withdrew its application, and Daniel
Dawdy failed to submit the supplemental information.

For the reasons set forth below, the Court grants Makor Issues’ motion to serve as lead
plaintiff, and approves Makor Issues’ selection of Millberg Weiss Bershad Hynes & Lerach LLP
as lead counsel and Miller Faucher and Cafferty LLP as liaison counsel.

YSI
I SELECTION OF LEAD PLAINTIFF.

The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides guidelines for
the appointment of a lead plaintiff in a securities class action. The PSLRA requires that the
Court “appoint as a 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 the class
member.” 15 U.S.C. § 78u-4(a)(3)(B){i).

The PSLRA establishes a rebuttable presumption that the “most adequate plaintiff” is the
one who “has either filed the complaint or made a motion in response to a notice,” “has the

largest financial interest in the relief sought,” and “otherwise satisfies the requirements of Rule