Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CLAIR v. DELUCA

November 10, 2005.

HOWARD G. CLAIR, RALPH S. WEAVER, and CAROL S. PINTEK, individually and on behalf of all others similarly situated, Plaintiffs,
v.
ANTHONY J. DeLUCA, HARRY J. SOOSE, FRANCIS J. HARVEY, JAMES C. McGILL, RICHARD W. POGUE, DANIEL A. D'ANIELLO, PHILIP B. DOLAN, E. MARTIN GIBSON, ROBERT F. PUGLIESE, JAMES DAVID WATKINS, and THE CARLYLE GROUP, Defendants.



The opinion of the court was delivered by: WILLIAM STANDISH, Senior District Judge

MEMORANDUM

Pending before the Court is a Motion by Albert and Barbara Glover ("the Glover Plaintiffs" or "the Glovers"), seeking to become the lead plaintiff in this securities class action. (Docket No. 25.) For the reasons discussed below, the Motion is denied without prejudice.

I. INTRODUCTION*fn1

  A. Factual History

  The facts of this case are largely irrelevant to the decision herein and will not be reiterated in detail. Briefly stated, Howard G. Clair, Ralph S. Weaver, and Carol S. Pintek ("Plaintiffs") filed an action on behalf of themselves and other investors similarly situated against the "Individual Defendants"*fn2 and The Carlyle Group*fn3 (collectively, "Defendants"), claiming that Defendants' actions on behalf of IT Group, Inc., violated federal securities law. IT Group, Inc. ("IT" or "the Company"), was an environmental waste remediation firm based in Monroeville, Pennsylvania. The Carlyle Group acquired control of IT in November 1996 and, at approximately the same time, the Company expanded rapidly by acquiring other firms who performed similar services. Plaintiffs claim that by the end of 2001, Defendants had made a number of poor financial and management decisions which, inter alia, resulted in liquidity problems and violation of the company's highly lucrative government contracts. IT declared bankruptcy on January 15, 2002.

  During the course of the bankruptcy proceedings, Plaintiffs learned that Defendants had consistently misrepresented IT's financial condition and results in annual and quarter filings made with the Securities and Exchange Commission, press releases, and other statements disseminated to the investing public. As a result, Plaintiffs and other investors were damaged when they purchased IT common stock at artificially inflated prices during the Class Period.*fn4 Plaintiffs did not learn of Defendants' fraudulent activities until March and April 2002 when the relevant documents were published in the bankruptcy proceedings.

  B. Procedural History

  Plaintiffs filed suit on February 27, 2003, alleging (1) that Defendants breached their fiduciary duty to investors by making false and misleading statements; (2) that by preparing and issuing public statements containing misrepresentations and omissions which induced Plaintiffs and members of the class to purchase IT common stock at artificially inflated prices, the Individual Defendants violated Section 10(b) of the Securities Exchange Act of 1934 ("the Act"), 15 U.S.C. §§ 78j(b) and 78(n) and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder; and (3) that Defendants caused the Company to engage in the illegal conduct and practices described above inasmuch as they were "controlling persons" of IT Group as that term is defined in Section 20(a) of the Act, 15 U.S.C. § 78t(a).

  On May 18, 2003, Plaintiffs published a notice of the pending private securities class action pursuant to Section 21D(a)(3)(B) of the Act as amended by the Private Securities Litigation Reform Act of 1995 (the "Reform Act.")*fn5 (See Docket No. 17, Exhibit A.) On July 7, 2003, Albert and Barbara Glover moved for approval as lead plaintiff, approval of Glancy Binkow & Goldberg, LLP, and Miller Shea, PC, as Co-Lead Counsel, and approval of Chimicles & Tikellis, LLP, as Liaison Counsel for the Class. (Docket No. 15.) Defendants opposed this motion, claiming that Plaintiffs had failed to comply with the Reform Act requirement that the early notice be published not more than 20 days after the complaint was filed and that any motion seeking appointment as lead plaintiff be filed within 60 days thereafter. (Docket No. 19.) Plaintiffs responded that such notice was not required in light of the relationship between this case and Payne v. DeLuca, CA 02-1927,*fn6 and their reasonable assumption that this case would be consolidated with Payne. (Docket No. 21.) When Defendants refused to consolidate the cases "for tactical reasons," Plaintiffs provided the additional notice "out of an abundance of caution," albeit beyond the 20 day publication period. (Id. at 1.)

  In considering the motion by the Glover Plaintiffs, the Court found that although no additional notice was required, given the timely notice provided in the Payne action and the fact that the allegations in the two cases were substantially the same,*fn7 Plaintiffs herein could not rely on the Payne notice because a motion to dismiss had been granted in that case. (Memorandum and Order of December 16, 2004, Docket No. 24, "December 16 Order," at 4-5.) Moreover, we agreed with Defendants that the notice filed in this action failed to conform with the requirements of 15 U.S.C. § 78u-4(a)(3). Plaintiffs were directed to re-publish notice and renew their motion for appointment of lead plaintiff and lead counsel.

  II. ANALYSIS

  On March 18, 2005, the Glover Plaintiffs filed a renewed motion for appointment to act as lead plaintiff and for the same firms to serve as co-lead counsel and liaison counsel. ("Motion," Docket No. 25.) They*fn8 indicated that on January 20, 2005, they published a revised notice of this action on "Primezone," a "widely circulated national business-oriented wire service." (Memorandum of Points and Authorities in Support of Motion of the Glover Plaintiffs for Appointment as Lead Plaintiff and for Approval of Lead Plaintiff's Selection of Co-Lead Counsel, Docket No. 26, "Plfs.' Memo," at 5.) No other members of the putative class responded to the republished notice by seeking to be appointed lead plaintiff, and no class member has opposed the Glover Plaintiffs' Motion.

  Defendants oppose the Motion, however, arguing that once again, Plaintiffs failed to publish notice of the class action within the 20 days mandated by the Reform Act and that the Glover Plaintiffs failed to file the motion for lead plaintiff status within 80 days of the December 16 Order permitting them to do so. (Memorandum of Law in Opposition to the Glover Plaintiffs' Motion for Appointment as Lead Plaintiff and Approval of Lead Plaintiff's Selection of Co-Lead Counsel, Docket No. 30, "Defs.' Opp.," at 5-6.) Defendants further argue that the Glover Plaintiffs do not satisfy the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.