United States District Court, W.D. Oklahoma
THOMAS SCUDERI, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
MAMMOTH ENERGY SERVICES, INC., ARTY STRAEHLA, and MARK LAYTON, Defendants. JUSTIN NORMANTAS, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
MAMMOTH ENERGY SERVICES, INC., ARTY STRAEHLA, and MARK LAYTON, Defendants. THE CITY OF SARASOTA GENERAL EMPLOYEE DEFINED BENEFIT PENSION PLAN, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
MAMMOTH ENERGY SERVICES, INC. ARTY STRAEHLA, and MARK LAYTON, Defendants.
ORDER CONSOLIDATING ACTIONS AND APPOINTING LEAD
PLAINTIFFS AND LEAD COUNSEL
L. PALK UNITED STATES DISTRICT JUDGE.
three related matters involve a proposed securities fraud
class action on behalf of persons or entities who purchased
or otherwise acquired publicly traded Mammoth Energy Services
Inc. (Mammoth) securities from October 19, 2017 through June
5, 2019. These matters are before the Court on pending
motions to consolidate, appoint lead plaintiff(s) and appoint
lead counsel pursuant to the Private Securities Litigation
Reform Act (PSLRA), principally codified at 15 U.S.C. §
78u-4, as more fully set forth below.
Scuderi - Case No. CIV-19-522
7, 2019, Plaintiff Thomas Scuderi (Scuderi) filed a proposed
class action complaint for violation of the federal
securities laws. See Compl. [Doc. No. 1]. On the
same day the suit was filed, Scuderi's counsel's law
firm published notice of the pendency of the action
announcing that lead plaintiff motions were due no later than
August 6, 2019. See Notice [Doc. No. 20-1].
Thereafter, on August 6, 2019, Scuderi, together with Stephen
Terry, Justas Normantas, Andrew Micklin, and Dion Larot
(collectively, the Mammoth Investor Group) filed a motion to
consolidate, appoint lead counsel and approve lead
plaintiff's selection of counsel. See Motion
[Doc. No. 18]. The Mammoth Investor Group subsequently filed
a Notice of Withdrawal [Doc. No. 31] acknowledging that
“[t]he Mammoth Investor Group does not appear to have
the largest financial interest.” Id. at 2. The
Mammoth Investor Group continues to move for consolidation of
the actions but withdraws its request to be appointed lead
plaintiff or to have its counsel be approved to serve as lead
Normantas - Case No. CIV-19-560
19, 2019, Plaintiff Justas Normantas (Normantas) filed a
lawsuit that arises from substantially the same factual
allegations and legal issues as the Scuderi lawsuit.
See Compl. [Doc. No. 1].
Sarasota - Case No. CIV-19-720
August 6, 2019, Plaintiff City of Sarasota General Employees
Defined Benefit Pension Plan (Sarasota) filed a lawsuit. The
lawsuit filed by Sarasota is also substantially the same as
the Scuderi and Normantas lawsuits. See Compl. [Doc.
motions before the Court have been filed by the Mammoth
Investor Group, the Furia Family and Sarasota. Pursuant to the
PSLRA, when, as here, motions to consolidate and motions for
appointment of lead plaintiff are pending simultaneously, the
Court must first decide the consolidation issue. See
15 U.S.C. § 78u-4(a)(3)(B)(ii). Consolidation of related
cases is proper “[i]f actions before the court involve
a common question of law or fact . . . .” Fed.R.Civ.P.
Scuderi, Normantas and Sarasota
actions involve claims on behalf of purchasers of Mammoth
securities for alleged violations of securities laws. The
actions each name as defendants Mammoth Energy Services,
Inc., Arty Straehla and Mark Layton. All three actions arise
from the same factual and legal issues: whether the
plaintiffs purchased or otherwise acquired Mammoth securities
at artificially inflated prices during the relevant time
period as a result of Defendants' allegedly false and
misleading statements, and whether the Defendants'
conduct violated the Securities Exchange Act of 1934, 15
U.S.C. §§ 78j(b) and 78t(a), and Securities and
Exchange Commission (SEC) Rule 10(b)-5. Moreover, no party
opposes consolidation of the related actions. Accordingly,
the Court finds consolidation is proper and directs that the
cases be consolidated for all pretrial proceedings and for
Appointment of Lead Plaintiff
PSLRA further governs the procedure for appointment of lead
plaintiff. See 15 U.S.C. §
78u-4(a)(3). The PSLRA mandates the Court to
“adopt a presumption that the most adequate plaintiff .
. . is the person or group of persons that” (1)
“has either filed the complaint or made a motion in
response to a notice”; (2) “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). The presumption
is rebuttable but only upon proof that the presumptively most
adequate plaintiff “will not fairly and adequately
protect the interests of the class” or “is
subject to unique defenses that render such plaintiff
incapable of adequately representing the class.”
Id., § 78u-4(a)(3)(B)(iii)(II). “The
court must examine potential lead plaintiffs one at a time,
starting with the one who has the greatest financial
interest, and continuing in descending order if and only if
the presumptive lead plaintiff is found inadequate or
atypical.” In re Cavanaugh, 306 F.3d 726, 732
(9th Cir. 2002).
The Furia Family has the Largest Financial Interest in the
applying the statutory presumption, the Furia Family is the
most adequate plaintiff. “[C]ourts routinely look to
the movant's financial loss as the most significant
factor in assessing his financial interest in the
action.” Ellis v. Spectranetics Corp., No.
15-cv-01857-KLM, 2015 WL 9259928 at *2 (D. Colo. Dec. 18,
2015) (unpublished op.). The Furia Family has suffered $989,
215.54 in losses as a result of Defendants' alleged
wrongful conduct. See Walker Decl. [Doc. No. 22-1],
Exs. B-E; see also Furia Family's Opp. [Doc. No.
32] at 3. In comparison, Sarasota identifies $133,
595.84 as its approximate losses. See Berg Decl.
[Doc. No. 35], Ex. 4; see also Sarasota's Mem.
of Law in Opp. [Doc. No. 34] at 9, 13.
The Furia Family Satisfies the Requirements of Rule
Court also finds the Furia Family satisfies the typicality
and adequacy requirements of Rule 23.
Furia Family's claims are typical of those of the class.
The typicality requirement is satisfied “so long as the
claims of the class representative and class members are
based upon the same legal theory or remedial theory.”
Wolfe v. AspenBio Pharma, Inc. 275 F.R.D. 625, 628
(D. Colo. 2011) (citation omitted); see also City of
Dania Beach Police & Firefighters' Ret. Sys. v.
Chipotle Mexican Grill, Inc., No. 12-CV-02164-PAB- KLM,
2013 WL 1677553 at *2 (D. Colo. Apr. 17, 2013) (unpublished
op.) (“Typicality exists where the injury and the
conduct are sufficiently similar.” (quotations
omitted)). As set above in the Court's discussion of
whether consolidation of the related actions is proper, like
all purported class members, the Furia Family purchased
Mammoth securities during the relevant time period and
suffered injuries based on the same alleged fraudulent
conduct of Defendants. The factual and legal issues governing
the claims of the Furia Family are the same as those
governing the other purported class members. Cf.
Wolfe, 275 F.R.D. at 628 (finding typicality requirement
satisfied where “both movant and members of the
purported class allege that they purchased shares of AspenBio
Pharma, Inc. (“AspenBio”) stock at prices that
were artificially inflated by defendants'
misrepresentations and omissions regarding the effectiveness
of AspenBio's main product, AppyScore”); see
also In re Ribozyme, 192 F.R.D. at 658-59 (“Both
plaintiff groups satisfy this requirement because, ...