United States District Court, N.D. Illinois, Eastern Division
IN RE THE BOEING COMPANY AIRCRAFT SECURITIES LITIGATION
MEMORANDUM OPINION AND ORDER
JOHN
J. THARP, JR., JUDGE
In this
putative class action, five plaintiffs are vying for
appointment as Lead Plaintiff and to approve their selection
of counsel to represent the class. For the reasons set forth
below, the Court appoints the Public Employees Retirement
System of Mississippi as Lead Plaintiff and approves its
selection of the law firm of Bernstein Litowitz Berger &
Grossman LLP as Lead Counsel.
I.
BACKGROUND
This
matter involves securities fraud claims predicated on
statements issued by The Boeing Company regarding the safety
of its 737 MAX aircraft. In a nutshell, the complaints filed
to date allege that during the first part of 2019, Boeing
misled investors about the financial prospects for its
commercial airplanes business by misstating and concealing
information about safety problems with the 737 MAX in the
wake of investigations of the crashes of Lion Air Flight 610
in October 2018 and of Ethiopian Airlines Flight 302 in March
2019.
Two
class action complaints have been filed. The initial
complaint (No. 19 CV 2394; the “Seeks”
action) was filed on April 9, 2019, by plaintiff Richard
Seeks on behalf of a class comprising purchasers of Boeing
securities between January 8, 2019 and March 21, 2019. A
subsequent complaint was filed by plaintiff Mercer Busch (No.
19 CV 3548; the “Busch” action) on May
28, 2019 on behalf of a class of persons who acquired Boeing
securities between January 8, 2019 and May 8, 2019. The
defendants named in the two suits include: Boeing; Dennis
Muilenburg, its Chairman, CEO, and President; Gregory Smith,
its CFO and Executive Vice President of Enterprise
Performance and Strategy; and Kevin McAllister, President and
CEO of Boeing Commercial Airplanes.[1]
By
order of June 21, 2019, this Court consolidated the cases and
set a briefing schedule on the various motions for
appointment as Lead Plaintiff submitted by members of the
putative class.
II.
DISCUSSION
Neither
of the plaintiffs who filed the complaints consolidated in
this matter have moved for appointment as Lead Plaintiff.
There is, however, no shortage of interest in the job. A
collection of seven individuals, groups, and institutions
moved for appointment as Lead Plaintiff in the consolidated
action:
• Ali Alibrahim [27], represented by Cafferty Clobes
Meriwether & Sprengel LLP and Levi & Korsinsky LLP;
• Robert W. Kegley, Sr., as Trustee of the Robert W.
Kegley Sr. Revocable Living Trust [32], represented by
Kessler Topaz Meltzer & Check, LLP;
• “The Boeing Investor Group” (comprising
Richard Eads, Joseph Fields, John Armstrong, Richard Miller,
and Pierre Givenchy) [36], represented by Hagens Berman Sobol
Shapiro LLP (“TBIG-I”);
• The Wang Family (comprising Kenny K. Wang, Kathleen
Wang, Kenny W. Wang) [41], represented by Kahn Swick &
Foti, LLC and Miller Law LLC
• Labourers' Pension Fund of Central and Eastern
Canada [46], represented by Robbins Geller Rudman & Dowd
LLP (“Labourers”);
• “The Boeing Investor Group” (comprising
Darrell Stock and Kin-Yip Chun) [49], represented by
Pomerantz LLP (“TBIG-II”); and
• The Public Employees Retirement System of Mississippi
[52], represented by Bernstein Litowitz Berger & Grossman
LLP (“MPERS”).
Plaintiffs
Alibrahim and The Boeing Investor Group II subsequently
withdrew their motions. ECF Nos. 75, 76. The remaining
movants have filed further briefs on behalf of their
candidacies and in response to the submissions of the other
candidates.
A.
Lead Plaintiff Standards
The
Private Securities Litigation Reform Act (PSLRA) sets forth
the procedures that govern securities class actions. Once
cases have been consolidated, the Court is required to
“appoint the most adequate plaintiff as lead plaintiff
for the consolidated actions.” 15 U.S.C. §
78u-4(a)(3)(B)(ii). Under the PSLRA, there is a rebuttable
presumption that the most adequate plaintiff to serve as lead
plaintiff is the person or group of persons that:
(aa) has either filed the complaint or made a timely motion
in response to a notice under subparagraph (A)(i);
(bb) in the determination of the court, has the largest
financial interest in the relief sought by the class; and
(cc) otherwise satisfies the requirements of Rule 23 of the
Federal Rules of Civil Procedure.
15 U.S.C. § 78u-4(a)(3)(B)(iii)(I). In that regard, the
relevant Rule 23 criteria are typicality and adequacy: the
claims and defenses of the lead plaintiff must be
“typical of the claims or defenses of the class,
” Rule 23(a)(3), and applicants must provide a basis to
conclude that they “will fairly and adequately protect
the interest of the class, ” Rule 23(a)(4). This
presumption may be rebutted only by proof by a member of the
purported plaintiff class that the presumptively most
adequate plaintiff: (aa) will not fairly and adequately
protect the interests of the class; or (bb) ...