UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 14-CIV DIMITROULEAS CASE NO. 14-CIV WPD

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1 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 1 of 7 UNITED UNION OF ROOFERS, WATERPROOFERS & ALLIED WORKERS LOCAL UNION NO. 8, Individually and on Behalf of All Others Similarly Situated, UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 14-CIV DIMITROULEAS Plaintiff, CASE NO. 14-CIV WPD vs. OCWEN FINANCIAL CORPORATION, RONALD M. FARIS, JOHN V. BRITTI and WILLIAM C. ERBEY Defendants. / NORBERT TUSEO, vs. Plaintiff, CASE NO CIV-WPD OCWEN FINANCIAL CORP., INC., RONALD A. FARIS, and JOHN V. BRITTI, Defendants. / GARY FRECHTER, Individually and on Behalf of All Others Similarly Situated, Plaintiff, CASE NO CIV-WPD vs. OCWEN FINANCIAL CORPORATION, RONALD M. FARIS, JOHN V. BRITTI and WILLIAM C. ERBEY Defendants. / 1

2 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 2 of 7 ORDER GRANTING MOTION FOR APPOINTMENT OF LEAD PLAINTIFF AND APPROVAL OF SELECTION OF COUNSEL THIS CAUSE is before the Court on two Motions: (1) Motion of Sjunde AP-Fonden for Consolidation of Related Actions, Appointment as Lead Plaintiff, and Approval of its Selection of Counsel [DE 19] and (2) University of Puerto Rico Retirement System s Memorandum of Law in Further Support of Lead Plaintiff Motion and in Opposition to Competing Lead Plaintiff Motion [DE 33]. 1 The Court has carefully considered the Motions [DE 19, 33], Responses to the Motions, and the parties Replies. The Court is otherwise fully advised in the premises. I. Background There are three pending securities class action lawsuits, as captioned above. Each of these actions is brought on behalf of purchasers of Ocwen Financial Corporation ( Ocwen ) common stock between May 2, 2013 and August 11, The Actions allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended by the PSLRA (15 U.S.C. 78j(b) and 78t ) and Rule 10b-5 promulgated thereunder (17 C.F.R b-5). The Court issued an Order consolidating the actions [DE 41] on November 5, Several putative class members filed motions for appointment as lead plaintiff and motions for consolidation. The Court deferred ruling on those motions until October 27, 2014, to allow an opportunity for responses to be filed. See [DE 25]. Several of those motions were withdrawn, leaving only two remaining pending motions. The two parties seeking lead plaintiff status are (1) Sjunde AP-Fonden ( AP7 ) and (2) University of Puerto Rico Retirement System ( UPR ). Putative class member AP7 filed its Motion [DE 19] on October 14, Initially, UPR co-moved with West Palm Beach Firefighters Pension Fund and Oklahoma Municipal Retirement Fund (collectively the Institutional Investor Group ) to consolidate the cases as well 1 While not formally styled as such, this Response to [DE 19] in substance moves for appointment of University of Puerto Rico Retirement System as lead plaintiff and approval of its selection of counsel. See [DE 33]. 2

3 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 3 of 7 as to direct the Court to appoint the Institutional Investor Group as Lead Plaintiff. See [DE 17]. On October 24, 2014, UPR filed, on its own, its opposition to AP7 s motion, requesting that instead UPR be appointed lead plaintiff, or that in the alternative, AP7 and UPR be appointed as co-lead plaintiffs. See [DE 33]. On October 25, 2014, UPR s former co-movants West Palm Beach Firefighters Pension Fund and Oklahoma Municipal Retirement Fund filed a Response to the motions for appointment of lead plaintiff, in which they expressed support for AP7 s motion. See [DE 34]. It is undisputed that AP7 claims a larger financial interest in the relief sought by the class than UPR. AP7 is a Swedish institutional investor overseeing approximately 27.5 billion in assets, with experience as lead plaintiff in PSLRA actions. See [DE 35 at 9]. AP7 s asserted loss is $2,072,559. See [DE 35 at 10]. UPR is a domestic institutional investor overseeing assets in excess of $1.2 billion. See [DE 33 at 12]. UPR s proposed loss is $338,069. See [DE 35 at 10]. II. Applicable Law Rule 23(a) of the Federal Rules of Civil Procedure requires as prerequisites for class action certification that: (1) the claims or defenses of the representative parties are typical of the claims or defenses of the class and (2) the representative parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a)(3) and (4). The PLRSA provides for a presumption that the most adequate plaintiff is the person or group of persons that: (1) has filed the complaint or timely moved; (2) has the largest financial interest in the relief sought by the class, as determined by the court, and (3) otherwise satisfies the requirements of Federal Rule 23. See 15 U.S.C. 78u-4(a)(3)(B)(iii). That presumption is rebuttable only upon proof by a member of the purported plaintiff class that the presumptively most adequate plaintiff either will not fairly and adequately protect the interests of the class, or is subject to unique defenses such that 3

4 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 4 of 7 the plaintiff cannot adequately represent the class. See id. III. Discussion AP7 s claims appear to be typical of that of the other class members, as they arise from the same set of facts and rely on the same legal theories. See Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332, 1337 (11 th Cir. 1984) (holding that claim was typical that [arose] from a single event with no variation in legal theory ). Further, AP7 has significant experience serving as lead plaintiff. 2 Due to the fact that AP7 filed a timely motion, has asserted the largest financial interest of the movants, and appears to otherwise satisfy the requirements of Rule 23, AP7 is presumptively the most adequate plaintiff. See 15 U.S.C. 78u-4(a)(3)(B)(iii); see also Henningsen v. The ADT Corporation, et al., No. 14-cv WPD, Dkt. No. 51 at 2 (S.D. Fla. July 14, 2014) ( ADT ) (Dimitrouleas, J.). This presumption may only be rebutted by proof that AP7 either will not fairly and adequately protect the interests of the class, or is subject to unique defenses such that the plaintiff cannot adequately represent the class. See 15 U.S.C. 78u- 4(a)(3)(B)(iii). UPR argues that AP7 has failed to establish standing, subjecting it to unique defenses. UPR relies primarily on two cases: Pipefitters Local No. 636 Defined Benefit Plan v. Bank of Am. Corp., 275 F.R.D. 187 (S.D.N.Y. 2011) and Baydale v. Am. Express Co., 2009 WL (S.D.N.Y. Aug. 14, 2009). Both of those cases rely on W.R. Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100 (2d Cir. 2008). In Huff, the Second Circuit held that an investment advisor for institutional investors did not have standing to sue on behalf of its clients. Id. at 107. In that case, the Second Circuit explained that there is a prudential exception to the 2 AP7 has been appointed lead plaintiff in the following cases: In re JPMorgan Chase Company Sec. Litig., No. 12- cv-3852, Dkt. No. 29 (S.D.N.Y. Aug 21, 2012); Louisiana Municipal Police Employees Retirement System v. Green Mt. Coffee Roasters, Inc., No. 11-cv-289, 2012 U.S. Dist. LEXIS (D. Vt. Apr. 27, 2012); Monk v. Johnson & Johnson, et al., No. 10-cv-4841, Dkt. No. 7 (D.N.J. Dec. 6, 2010). 4

5 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 5 of 7 standing requirement, which applies where the plaintiff can demonstrate: (1) a close relationship to the injured party and (2) a barrier to the injured party s ability to assert its own interests. Id. at 109. The Second Circuit ultimately concluded, however, that the investment advisor did not fall under this exception because it did not have the close relationship contemplated by the exception and because it could not demonstrate that the underlying clients could not assert their own interests. Id. In Baydale, the Hon. William H. Pauley declined to appoint a Swedish money manager similar to AP7 over concerns about standing, citing Huff, and explaining that the movant s status raises complex and novel issues of law which would require extensive factual and foreign legal analysis. Baydale, 2009 WL , at *3. In Pipefitters, Judge Pauley declined to appoint a group consisting of AP7, a funds manager, and retirement benefit funds due to concerns over: (1) AP7 s standing, and (2) the ability of the group to function cohesively. Pipefitters, 275 F.R.D. at Judge Pauley cited Baydale and Huff as a basis for the concerns over AP7 s standing, noting that arguments could be raised that would subject[] AP7 to a unique defense and may prejudice the class. Id. at 191. Judge Pauley s approach in Baydale, and by extension, Pipefitters, has been rejected by other courts. In OFI, the court explicitly declined to take Judge Pauley s approach in Baydale, characterizing it as rely[ing] on mere speculation, not actual proof provided by the opposing movant in order to avoid engag[ing] in any inquiry regarding a foreign asset manager s standing. OFI Risk Arbitrages v. Cooper Tire Rubber Company, No RGA, 2014 WL , at *6. Other courts have found that Swedish managers, like AP7, have standing under the prudential exception. See City of Taylor Police and Fire Retirement System v. Western Union Company, No. 13-cv MSK-MJW, 2014 WL , at *5 (D. Colo. Sept 26, 2014) 5

6 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 6 of 7 (holding that concerns over Swedish asset manager s standing were unfounded and insufficient to overcome the presumption that it was the most adequate lead plaintiff); see also In re Vivendi Universal, S.A. Sec. Litig., 605 F. Supp. 2d 570, 581 (S.D.N.Y. 2009) (holding that Swedish asset manager had standing to sue on behalf of underlying fund through the prudential exception explained in Huff). AP7 argues that it is obligated by law to protect and act on behalf of the underlying Equity fund a pool of assets not capable of taking any legal action. AP7 s argument is supported by the declaration by Anders Månsson, a Swedish lawyer. See [DE 36-3]. The Court finds that UPR s concerns are not grounded in evidence and are not sufficient to overcome AP7 s presumptive status as most adequate plaintiff. IV. Conclusion For the foregoing reasons, the Court determines that AP7 satisfies the criteria as the most adequate plaintiff because it has complied with the PSLRA s procedural requirements, holds the largest financial interest relative to the proven investment loss of any movant, and satisfies Rule 23 s typicality and adequacy requirements. Pursuant to the PLRSA, the lead plaintiff shall, subject to court approval, select and retain counsel to represent the class it seeks to represent. 15 U.S.C. 78u-4(a)(3)(B)(v); Newman v. Eagle Bldg. Techs., 209 F.R.D. 499, 506 (S.D. Fla. 2002). AP7 has selected Kessler Topaz Meltzer & Check, LLP to serve as Lead Counsel, subject to this Court s approval. The Court is satisfied that these counsel are qualified to prosecute this action on behalf of plaintiffs. Accordingly, it is ORDERED AND ADJUDGED as follows: 1. Motion of Sjunde AP-Fonden for Consolidation of Related Actions, Appointment as Lead Plaintiff, and Approval of its Selection of Counsel [DE 19] is hereby 6

7 Case 9:14-cv WPD Document 42 Entered on FLSD Docket 11/07/2014 Page 7 of 7 GRANTED with respect to appointment of lead plaintiff and approval of its selection of counsel; 2. Pursuant to 15 U.S.C. 78u-4(a)(3)(B), Sjunde AP-Fonden ( AP7 ) is appointed to serve as Lead Plaintiff in the consolidated action; and 3. Kessler Topaz Meltzer & Check, LLP is approved as Lead Counsel in the consolidated action. DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County, Florida, this 7th day of November WILLIAM P. DIMIT- RC&ULEAS United States District Judge Copies furnished to: Counsel of record 7