Christopher A. Slater, OSB # 97398 

cslater@slaterross.com 

Michael J. Ross, OSB # 91410 

mjross@slaterross.com 

710 S.W. Madison Street, Suite 400 

Portland, Oregon 97205 

Telephone: (503) 227-2024 

Facsimile: (503) 224-7299 

UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

PORTLAND DISTRICT 

DAVID W. FUHS and HAROLD : 

SPRADLING, Derivatively on Behalf of : 

GALENA BIOPHARMA, INC., : 

 : 

 Plaintiffs, : 

 : 

 v. : Case No.: 3:15-cv-1465-SI 

 : 

MARK J. AHN, WILLIAM L. ASHTON, : 

RICHARD CHIN, STEPHEN S. GALLIKER, : 

SANFORD J. HILLSBERG, STVEN A. : 

KRIEGSMAN, RUDOLPH NISI, and MARK : 

W. SCHWARTZ, : 

 : 

 Defendants, : 

 : 

 and : Case No.: 3:14-cv-382-SI 

 : LEAD 

GALENA BIOPHARMA, INC., : 

 : 3:14-cv-514-SI 

 Nominal Defendant. : 3:14-cv-516-SI 

_________________________________________ : 

In re GALENA BIOPHARMA INC. : 

DERIVATIVE LITIGATION : 

________________________________________ : 

This Document Relates To : 

ALL ACTIONS : 

_________________________________________ : 

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ 

JOINT UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 1 of 10
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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

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TABLE OF CONTENTS

Page 

I. INTRODUCTION ...............................................................................................................1

II. FACTUAL BACKGROUND ..............................................................................................2

III. ARGUMENT .......................................................................................................................3

A. The Court Should Consolidate the Fuhs and Klein Actions ....................................3

B. The Court Should Appoint Plaintiff Fuhs to Serve as Co-Lead 

Plaintiff With Lead Plaintiff Klein ..........................................................................4

IV. CONCLUSION ....................................................................................................................5

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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re Adams Apple, Inc., 

829 F.2d 1484 (9th Cir. 1987) ...................................................................................................3 

Beverlly Jewerlly Co., Ltd. v. Tacori Enters., 

No. 06-cv-1967, 2006 WL 3304218 (N.D. Ohio Nov. 13, 2006) ..............................................3 

Clark v. Thiry, et al., 

No. 12-cv-2074, 2014 WL 4050057 (D. Colo. Jan. 7, 2014) ....................................................4 

Dollens v. Zionts, 

No. 01-cv-5931, 2001 WL 1543524 (N.D. Ill. Dec. 4, 2001) ....................................................4 

Green Meadows Partners, LLP v. Tomkinson, 

No. 06-cv-0091, 2006 WL 6885989 (C.D. Cal. June 6, 2006) ..................................................3 

Horn v. Raines, 

227 F.R.D. 1 (D.D.C. 2005) .......................................................................................................4 

Millman v. Brinkley, 

No. 03-cv-3831, 2004 WL 2284505 (N.D. Ga. Oct. 1, 2004) ...............................................3, 4 

Paxonet Commc’ns, Inc. v. TranSwitch Corp., 

303 F. Supp. 2d 1027 (N.D. Cal. 2003) .....................................................................................3 

Rules 

Fed. R. Civ. P. 42 .........................................................................................................................1, 3 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 3 of 10
PAGE 1 - MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ JOINT 

UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

Lead Plaintiff Jeffrey Klein (“Klein”) and plaintiffs Pratik Rathore (“Rathore”), David 

W. Fuhs (“Fuhs”) and Harold Spradling (“Spradling,” and collectively, “Plaintiffs”), by and 

through their undersigned counsel, respectfully submit this Memorandum of Law in support of 

their Joint Motion to Consolidate Related Derivative Actions and Appoint Additional Lead 

Plaintiff. 

I. INTRODUCTION 

The above-captioned actions (the “Actions”)1 were brought on behalf of Galena 

Biopharma, Inc. (“Galena” or the “Company”) against current and former members of the 

Company’s Board of Directors (the “Board”) and executive officers for breaches of fiduciary 

duties in connection with: (1) a secret and elaborate “pump and dump” scheme to artificially 

inflate Galena’s stock price; (2) grants of over $6.7 million worth of off-cycle “spring-loaded” 

stock options by Board members to themselves and executives that are statutorily invalid; and (3) 

massive sales of Galena stock by insiders while they possessed material, non-public information. 

Given the common questions of law and fact in the Actions, consolidation is appropriate 

under Federal Rule of Civil Procedure 42 (“Rule 42”). Meanwhile, the appointment of Fuhs to 

serve as Co-Lead Plaintiff alongside Lead Plaintiff Klein will adequately serve the interests of 

Galena and its public stockholders. Indeed, plaintiff Fuhs successfully obtained approximately 

4,660 pages of documents pursuant to Section 220 (“Section 220”) of the Delaware General 

Corporation Law (“DGCL”) that substantiate the well-pled factual allegations in Plaintiffs’ 

complaints. Accordingly, Fuhs is qualified to lead the consolidated action with Lead Plaintiff 

Klein. 

 

1

 The Actions consist of In re Galena Biopharma Inc. Derivative Litig., Lead Case No. 3:14-cv382-SI (the “Klein Action”) and David Fuhs v. Mark J. Ahn, et al., Case No. 3:15-cv-1465-SI 

(the “Fuhs Action”). 

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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

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II. FACTUAL BACKGROUND 

 The relevant factual background of the underlying claims is set out at length in Klein and 

Rathore’s Verified Second Amended Consolidated Shareholder Derivative Complaint (the 

“Second Amended Complaint”) [Klein Action, Dkt. 79] and Fuhs’ Verified Stockholder 

Derivative Complaint [Fuhs Action, Dkt. 1]. Plaintiffs respectfully direct the Court to these 

complaints for a complete recitation of the relevant facts in the Actions. For the purposes of the 

instant motion, it should suffice to say the complaints filed in the Actions all seek relief 

derivatively on the Company’s behalf for, inter alia, breaches of fiduciary duties and unjust 

enrichment by certain current and former officers and directors of Galena. 

 Given the Actions deal with the same factual background and claims, they should be 

consolidated in accordance with the Court’s April 11, 2014 Order of Consolidation (the 

“Consolidation Order”) [Klein Action, Dkt. 12]. As noted in the Court’s Consolidation Order: 

Upon a finding by the Court that a related case filed subsequent to the entry of 

this Order properly belongs as part of In re Galena Biopharma, Inc. Derivative 

Litigation, Case No. 3:14-cv-00382-HU, the court will order its inclusion in this 

consolidation. 

Plaintiff Fuhs 

In March 2014, Fuhs made a demand under Section 220 to inspect certain of the 

Company’s books and records related to November 2013 option grants to certain executive 

officers and directors, January 2014 stock sales by certain officers and directors, and related 

matters (the “220 Demands”). Galena refused the 220 Demands. On March 18, 2014, Fuhs filed 

an action in the Delaware Court of Chancery to enforce his rights under Section 220. On or 

about April 10, 2014, the parties, including Fuhs, executed a confidentiality agreement, and from 

April 14, 2014 to May 29, 2014, Galena produced on a rolling basis documents responsive to the 

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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

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220 Demands. Ultimately, Galena produced approximately 4,660 pages of documents. Those 

documents have now been used by all the Plaintiffs in these Actions. 

III. ARGUMENT 

A. The Court Should Consolidate the Fuhs and Klein Actions 

Under Rule 42(a), when actions involve “common questions of law or fact,” the Court 

may “join for hearing or trial any or all matters at issue in the actions; consolidate the actions” or 

“issue any other orders to avoid unnecessary cost or delay.” Fed. R. Civ. P. 42(a). The decision 

whether to consolidate cases is a matter within the sound discretion of the trial court. In re 

Adams Apple, Inc., 829 F.2d 1484, 1487 (9th Cir. 1987); Beverlly Jewerlly Co., Ltd. v. Tacori 

Enters., No. 06-cv-1967, 2006 WL 3304218, at *2 (N.D. Ohio Nov. 13, 2006) (citation omitted). 

In exercising its discretion, a court should weigh the saving of time and effort that consolidation 

would produce against any inconvenience, delay, or expense that it would cause. Tacori Enters., 

2006 WL 3304218, at *2 (citation omitted) (internal quotations omitted); Paxonet Commc’ns, 

Inc. v. TranSwitch Corp., 303 F. Supp. 2d 1027, 1028 (N.D. Cal. 2003). See also Green 

Meadows Partners, LLP v. Tomkinson, No. 06-cv-0091, 2006 WL 6885989, at *2 (C.D. Cal. 

June 6, 2006) (“Consolidation is proper where the cost of defending ... multiple actions may well 

do serious harm to the very corporation in whose interest they are supposedly brought.” ) 

(citation omitted; internal quotations omitted). Consolidation of derivative actions is 

“particularly appropriate” since “the cost of defending [ ] multiple actions may well do serious 

harm to the very corporation in whose interest they are supposedly brought.” Millman v. 

Brinkley, No. 03-cv-3831, 2004 WL 2284505, at *2 (N.D. Ga. Oct. 1, 2004) (citation omitted). 

Consolidation of the related Actions would avoid unnecessary costs and delays and conserve 

judicial resources, and there is no risk of prejudice or confusion if the Court were to consolidate 

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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

 ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

the Actions; indeed, all parties have consented to consolidation. Given the common questions of 

law and fact, the similar nature of the claims at issue, the overlapping areas of discovery the 

parties will need to undertake, and the Plaintiffs’ shared interest in adjudicating the Company’s 

right to relief, consolidation of the Actions is entirely appropriate. Moreover, consolidating the 

Actions would be in keeping with the Court’s Consolidation Order. 

B. The Court Should Appoint Plaintiff Fuhs to Serve as Co-Lead Plaintiff With 

Lead Plaintiff Klein 

In considering the appointment of lead plaintiffs in shareholder derivative actions, courts 

typically focus on whether any particular movant will most adequately serve the interests of the 

derivative plaintiffs and the nominal defendant. Millman, 2004 WL 2284505, at *3; Dollens v. 

Zionts, No. 01-cv-5931, 2001 WL 1543524, at *2 (N.D. Ill. Dec. 4, 2001) (courts should appoint 

a derivative lead plaintiff that “is likely to benefit the plaintiffs most.”). While appointment of a 

lead plaintiff may not be required by statute, courts across the country regularly appoint lead 

plaintiffs in derivative actions. See Consolidation Order at 3 (appointing Klein as Lead 

Plaintiff); Horn v. Raines, 227 F.R.D. 1 (D.D.C. 2005) (appointing co-lead plaintiffs in a 

derivative action); Clark v. Thiry, et al., No. 12-cv-2074, 2014 WL 4050057 (D. Colo. Jan. 7, 

2014) (appointing lead plaintiff in a derivative action). 

Plaintiff Fuhs has demonstrated his adequacy to serve as Co-Lead Plaintiff. Indeed, Fuhs 

has demonstrated that he has the skill and sophistication to understand the issues presented in the 

Actions as Fuhs is a sophisticated and experienced investor. Fuhs’ initiative to seek documents 

and file an action under Section 220 also demonstrates his commitment as a fiduciary 

representative of the Company. Fuhs, like Klein, can fairly and adequately represent Galena and 

its stockholders and he has and intends to continue to vigorously prosecute the Actions. 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 7 of 10
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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

 ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

Accordingly, plaintiffs in the Actions respectfully request that the Court appoint Fuhs as CoLead Plaintiff to serve with Lead Plaintiff Klein. 

IV. CONCLUSION 

For the foregoing reasons, Plaintiffs respectfully request that the Court enter an order: (i) 

consolidating the Actions; and (ii) appointing Fuhs as Co-Lead Plaintiff. 

Dated: August 7, 2015 Respectfully submitted, 

SLATER ROSS 

/s/ Christopher A. Slater 

Christopher A. Slater, OSB # 97398 

Michael J. Ross, OSB # 91410 

Sovereign Hotel, 4th Floor 

710 S.W. Madison Street 

Portland, Oregon 97205 

Telephone: (503) 227-2024 

Facsimile: (503) 224-7299 

cslater@slaterross.com 

mjross@slaterross.com 

Local Counsel for Plaintiffs 

THE WEISER LAW FIRM, P.C. 

Robert B. Weiser 

Brett D. Stecker 

22 Cassatt Avenue, First Floor 

Berwyn, PA 19312 

Telephone: (610) 225-2677 

Facsimile: (610) 408-8062 

rw@weiserlawfirm.com 

bds@weiserlawfirm.com 

THE WEISER LAW FIRM, P.C. 

Kathleen A. Herkenhoff 

12707 High Bluff Drive, Suite 200 

San Diego, CA 92130 

Telephone: (858) 794-1441 

Facsimile: (858) 794-1450 

kah@weiserlawfirm.com 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 8 of 10
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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

 ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

HYNES KELLER & 

 HERNANDEZ, LLC 

Michael J. Hynes 

Ligaya Hernandez 

1150 First Avenue, Suite 501 

King of Prussia, PA 19406 

Telephone: (610) 994-0292 

Facsimile: (914) 752-3041 

mhynes@hkh-lawfirm.com 

lhernandez@hkh-lawfirm.com 

FEDERMAN & SHERWOOD 

William B. Federman 

Sara E. Collier 

10205 N Pennsylvania Ave 

Oklahoma City, OK 73120 

Telephone: (405) 235-1560 

Facsimile: (405) 239-2112 

wbf@federmanlaw.com 

sec@federmanlaw.com 

FARUQI & FARUQI, LLP 

Nadeem Faruqi 

369 Lexington Avenue, 10th Floor 

New York, NY 10017 

Telephone: (212) 983-9330 

Facsimile: (212) 983-9331 

nfaruqi@faruqilaw.com 

Counsel for Plaintiffs Klein and Rathore 

PRICKETT, JONES & ELLIOTT, P.A. 

Michael Hanrahan 

Paul A. Fioravanti, Jr. 

Kevin H. Davenport 

1310 N. King Street 

Wilmington, Delaware 19801 

Telephone: (302) 888-6500 

Facsimile: (302) 658-8111 

MHanrahan@Prickett.com 

PAFioravanti@Prickett.com 

KHDavenport@Prickett.com 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 9 of 10
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UNOPPOSED MOTION TO CONSOLIDATE RELATED DERIVATIVE 

 ACTIONS AND APPOINT ADDITIONAL LEAD PLAINTIFF 

KESSLER TOPAZ 

 MELTZER & CHECK, LLP 

Eric L. Zagar 

Robin Winchester 

Matthew A. Goldstein 

280 King of Prussia Road 

Radnor, Pennsylvania 19087 

Telephone: (610) 667-7706 

Facsimile: (267) 948-2512 

ezagar@ktmc.com 

rwinchester@ktmc.com 

mgoldstein@ktmc.com 

GRANT & EISENHOFER P.A. 

Stuart Grant 

Cynthia Calder 

123 Justison Street 

Wilmington, DE 19801 

Telephone: (302) 622-7000 

Facsimile: (302) 622-7100 

sgrant@gelaw.com 

ccalder@gelaw.com 

GARDY & NOTIS, LLP 

James S. Notis 

Tower 56 

126 East 56th Street, 8th Floor 

New York, NY 10022 

Telephone: (212) 905-0509 

Facsimile: (212) 905-0508 

jnotis@gardylaw.com 

SQUITIERI & FEARON LLP 

Lee Squitieri 

32 East 57th Street, 12th Floor 

New York, NY 10022 

Telephone: (212) 421-6492 

Facsimile: (212) 421-6553 

lee@sfclasslaw.com 

Counsel for Plaintiffs Fuhs and Spradling 

Case 3:15-cv-01465-SI Document 18 Filed 08/13/15 Page 10 of 10