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In re Boeing Company Aircraft Securities Litigation

United States District Court, N.D. Illinois, Eastern Division

November 15, 2019

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) ...


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