United States District Court, D. New Jersey
DAVID KANEFSKY, individually and on behalf of all others similarly situated, Plaintiff,
HONEYWELL INT'L INC., et al., Defendants.
WILLIAM J. MARTINI, U.S.D.J.
MATTER comes before the Court upon the competing
motions of David Kanefsky (“Kanefsky”) and
Charles M. Francisco III (“Francisco”) to serve
as lead plaintiff, and separately, appoint lead counsel. ECF
Nos. 5, 6. The Court decides the matter without oral
argument. Fed.R.Civ.P. 78(b). For the reasons set forth
below, the Court will GRANT Francisco's
motion to serve as lead plaintiff and approve his choice of
Levi & Korsinsky, LLP as lead counsel. The Court will
DENY Kanefsky's motion on the same.
brings this putative securities class action against
Honeywell International Inc. (“Honeywell”) and
its corporate officers, Darius Adamczyk and Thomas A. Szlosek
(collectively, “Defendants”), on behalf of all
persons who purchased or otherwise acquired Honeywell
securities from February 9, 2018 through October 19, 2018.
Compl. ¶ 1, ECF No. 1. Kanefsky alleges he acquired
Honeywell securities at artificially inflated prices and
suffered damages when Defendants disclosed making materially
false and misleading statements to the investing public.
Id. ¶¶ 19-32.
Private Securities Litigation Reform Act of 1995
(“PSLRA”) directs a court appoint as lead
plaintiff the member or members of the class “to be
most capable of adequately representing the interests of
class members, ” referred to as the “most
adequate plaintiff.” 15 U.S.C. §
78u-4(a)(3)(B)(i). The Court must adopt a rebuttable
presumption that the “most adequate plaintiff”
“is the person or group of persons” who: (1)
“has either filed the complaint or made a [timely]
motion” to be appointed lead plaintiff”; (2) upon
a court's finding, “has the largest financial
interest in the relief sought by the class”; and (3)
“otherwise satisfies the requirements of Rule 23 of the
Federal Rules of Civil Procedure.” Id. §
78u-4(a)(3)(B)(iii)(I)(aa)-(cc). This presumption “may
be rebutted only upon proof by a member of the purported
plaintiff class that the presumptively most adequate
plaintiff” either: (1) “will not fairly and
adequately protect the interests of the class”; or (2)
“is subject to unique defenses that render such
plaintiff incapable of adequately representing the
class.” Id. §
PSLRA provides no specific method to identify the presumptive
lead plaintiff with the “largest financial interest,
” which means the largest financial loss. In re
Cendant Corp. Litig., 264 F.3d 201, 223 (3d Cir. 2001).
Courts should consider three factors to assess the largest
financial interest: (1) the number of shares purchased during
the class period; (2) the total net funds expended during the
same period; and (3) the approximate losses suffered.
Id. at 262 (citations omitted). The third factor,
the approximate losses suffered, is considered the most
significant. In re Vonage Initial Pub. Offering (IPO)
Sec. Litig., Civ. No. 07-177 (FLW), 2007 WL 2683636, at
*4 (D.N.J. Sept. 7, 2007) (citing cases).
has the largest financial interest. During the class period,
he purchased 1, 425 shares, expended a net amount of $232,
659.75, and suffered $30, 638.33 in losses. Declaration of
Eduard Korsinsky (“Korsinky Decl.”), Ex. B, ECF
No. 5-4. Kanefsky, however, purchased 1, 400 shares, expended
a net amount of $224, 676.00, and suffered $26, 402.00 in
losses. Declaration of Jonathan D. Lindenfeld, Ex. C, ECF No.
6-3. Moreover, after reviewing Francisco's competing
motion, Kanefsky replied that “[he] does not appear to
have the largest financial interest in this action within the
meaning of the PSLRA.” Kanefsky Notice of
Non-Opposition of David Kanefsky to Competing Motion for
Appointment as Lead Plaintiff and Approval of Lead Counsel 1,
ECF No. 9.
satisfy the requirements of Rule 23, a prospective lead
plaintiff need only make an initial showing of typicality and
adequacy. In re Cendant Corp. Litig., 264 F.3d at
263. Typicality is established when “the claim arises
from the same event or practice or course of conduct that
gives rise to the claims of other class members, and if it is
based on the same legal theory.” Baby Neal v.
Casey, 43 F.3d 48, 58 (3d Cir. 1994). Adequacy is met
when the proposed lead plaintiff: (1) “has the ability
and incentive to represent the claims of the class
vigorously”; (2) “has obtained adequate
counsel”; and (3) poses no conflict between his claims
and the members of the class. In re Cendant Corp.
Litig., 264 F.3d at 265 (citations omitted).
meets the typicality and adequacy requirements of Rule 23.
Francisco has expressed his willingness to serve as lead
plaintiff and asserts that he shares the same claims and
injuries as those of Kanefsky and the potential class.
Specifically, Defendants' material misstatements or
omissions misled him to purchase Honeywell securities at
artificially inflated prices. And upon Defendants disclosing
the statement or omission, Francisco suffered damages when
Honeywell securities dropped in value. The Court also finds
Francisco has retained adequate counsel because Levi &
Korsinsky, LLP has relevant experience litigating securities
class actions. Korsinsky Decl., Ex. D. Finally, there is no
evidence of conflict between Francisco and the members of the
most adequate plaintiff shall, subject to the approval of the
court, select and retain counsel to represent the
class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). A court
should defer to the properly-selected lead plaintiff's
choice of counsel, intervening only when “necessary to
protect the interests of the class.” In re Cendant
Corp. Litig., 264 F.3d at 274. The Court finds no reason
to disturb Francisco's choice and thus approves his
selection of Levi & Korsinsky, LLP as lead counsel.
reasons just stated, the Court will GRANT
Francisco's motion, ECF No. 5, and DENY
Kanefsky's competing motion on the ...