United States District Court, D. Arizona
Mark Smilovits, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
First Solar, Inc., Michael J. Ahearn, Robert J. Gillette, Mark R. Widmar, Jens Meyerhoff, James Zhu, Bruce Sohn and David Eaglesham, Defendants.
G. Campbell Senior United States District Judge
Counsel Robbins Geller Rudman & Dowd LLP moves for entry
of a set-aside order which would establish a framework under
which Class Counsel could seek Court-approved compensation
for work performed in this litigation that benefits all
purchasers of First Solar, Inc. stock between May 2, 2008 and
February 29, 2012. Doc. 550. Under the proposed order, 12% of
any settlement or judgment obtained by a plaintiff that has
opted out of the class in this case (the “Class”)
would be withheld and deposited by Defendants in an escrow
account. Payments from the account would be subject to Court
approval after a showing by Class Counsel of the benefits
that Class Counsel has conferred on opt-out plaintiffs.
Id. Account funds not paid out in this manner would
be disbursed to the plaintiffs who secured them by settlement
Fund, L.D.C., Maverick Fund USA, Ltd., Maverick Fund II,
Ltd., Maverick Neutral Fund, Ltd., Maverick Neutral Levered
Fund, Ltd., Maverick Long Fund, Ltd., and Maverick Long
Enhanced Fund, Ltd. (collectively, “Maverick”)
move to intervene in this case for the sole purpose of
opposing Class Counsel's motion. Doc. 623. Maverick is
the plaintiff in Maverick Fund, L.D.C., et al. v. First
Solar, Inc., et al., No. CV15-1156-PHX-DGC (D. Ariz.)
(the “Maverick Action”).
have taken no position on Class Counsel's request for a
matters are fully briefed, and no party has requested oral
argument. For the reasons set forth below, the Court will
grant Maverick's motion to intervene for a limited
purpose and grant in part Class Counsel's motion to
establish the set-aside fund and procedures for seeking
compensation from the fund.
party opposes Maverick's motion to intervene.
Intervention is warranted because Maverick “claims an
interest relating to the property or transaction that is the
subject of the action, and is so situated that disposing of
the action may as a practical matter impair or impede the
movant's ability to protect its interest[.]”
Fed.R.Civ.P. 24(a)(2). Intervention is granted for the
limited purposes of opposing creation of the set aside fund
and participating in any future requests for compensation
from the fund.
The Parties' Positions.
counsel argues that the Court's authority to enter a
“set-aside order ‘derives from the Supreme
Court's common benefit doctrine.'” In re
Lidoderm Antitrust Litig., No. 14-md-02521-WHO, 2017 WL
3478810, at *1 (N.D. Cal. Aug. 14, 2017) (quoting In re
Bextra & Celebrex Mktg. Sales Practices & Prod. Liab.
Litig., No. M:05-cv-01699-CRB, 2006 WL 471782, at *1
(N.D. Cal. Feb. 28, 2006)). Class Counsel notes that
“the doctrine is designed to spread litigation costs
proportionately among all the beneficiaries so that the
active beneficiary does not bear the entire burden alone and
the ‘stranger' beneficiaries do not receive their
benefits at no cost to themselves.” Vincent v.
Hughes Air W., Inc., 557 F.2d 759, 769 (9th Cir. 1977).
Class Counsel further asserts that the Court has authority
under its inherent management powers and the Private
Securities Litigation Reform Act of 1995
(“PSLRA”) to ensure that Class Counsel is fairly
compensated for work it performs on behalf of all plaintiffs.
See In re Linerboard Antitrust Litig., 292 F.Supp.2d
644, 653 (E.D. Pa. 2003) (“A necessary corollary to
court appointment of lead and liaison counsel and appropriate
management committees is the power to assure that these
attorneys receive reasonable compensation for their
work.”); Fed.R.Civ.P. 23(h); 15 U.S.C. §
argues that a common benefit fund has never been created in a
non-MDL securities fraud case, a proposition Class Counsel
does not dispute; that such a fund should be created only in
extraordinary circumstances, which do not exist here; that
the fund is barred by the PSLRA; and that the fund would be
contrary to the class notice in this case. Maverick also
argues that Class Counsel has not conferred a substantial
benefit on Maverick that would warrant payment from a common
Benefits Conferred on Maverick.
the ultimate determination of whether Class Counsel is
entitled to compensation from any common benefit fund must
await conclusion of this litigation and the Maverick Action,
the Court has no difficulty concluding preliminarily that
Class Counsel has conferred substantial benefits on Maverick.
Over the past seven years, Class Counsel has investigated and
drafted a 133-page Class Complaint (Doc. 93); successfully
opposed Defendants' motion to dismiss (Docs. 109, 114);
negotiated search terms and custodians - and filed motions to
compel - resulting in the production of relevant documents;
analyzed more than 515, 000 documents from more than 40 First
Solar custodians and third-parties; taken 21 fact
depositions, which Maverick has obtained and may rely on to
reduce the number of depositions in its own case; conducted
substantial expert discovery and submitted expert reports
which Maverick has obtained; and defeated Defendants'
motion for summary judgment, interlocutory appeal to the
Ninth Circuit, and petition for a writ of certiorari to the
Supreme Court. Maverick has not participated in any of these
legal battles, and yet clearly is benefitting from Class
contends that the set-aside fund is barred by this provision
of the PSLRA: “Restrictions on payment of
attorneys' fees and expenses. Total attorneys' fees
and expenses awarded by the court to counsel for the
plaintiff class shall not exceed a reasonable percentage of
the amount of any damages and prejudgment interest actually
paid to the class.” 15 U.S.C. § 78u-4(a)(6). This
provision is a limitation on the amount of attorneys'
fees, not the source. It mandates that the total fees awarded
to Class Counsel cannot exceed a reasonable percentage of the
amount of damages actually paid to the Class, but it does not
state that the fees must come from those damages. The Court
interprets this provision to mean that any fees awarded to
Class Counsel from the Class recovery, plus any fees awarded
to Class Counsel from the set-aside fund - the
“total” attorneys' fees awarded by the Court
to Class Counsel - cannot collectively exceed a reasonable
percentage of the damages actually paid to the Class. But
this provision does not bar the Court from applying the
common fund doctrine and awarding fees to Class Counsel from
the set-aside fund, an issue on which the PSLRA is silent.
C.f., Staton v. Boeing ...