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Case 2:10-cv-09292-PA -AGR Document 8 Filed 03/07/11 Page 1 of 3 Page ID #:175

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 10-9292 PA (AGRx)
Title

Jonah Ansell v. Daniel S. Laikin, et al.

Date March 7, 2011

Present: The
Honorable

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Paul Songco
Deputy Clerk
Attorneys Present for Plaintiffs:

Proceedings:

N/A
IN CHAMBERS - ORDER

Not Reported
Court Reporter

N/A

Tape No.

Attorneys Present for Defendants:

N/A

Before the Court is a Motion to Appoint Lead Plaintiff filed by the Ansell Group. (Docket No.

4.) No party has filed an opposition to the Ansell Group’s Motion, nor has any other individual or group
moved for appointment as lead plaintiff. Pursuant to Rule 78 of the Federal Rules of Civil Procedure
and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral argument.
The hearing calendared for March 7, 2011 is vacated, and the matter taken off calendar.

Pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”) the Court received
a Motion to Appoint Lead Plaintiff filed by the Ansell Group. 15 U.S.C. § 78u-4(a)(3(B). The Ansell
Group consists of three individuals: Jonah Ansell, the named plaintiff who originally filed this action;
Joseph Isaacs; and Michael Raspatello. The Complaint brings a class action for violations of section
10(b) of the Securities Exchange Act, 15 U.S.C. § 78j, alleging that defendants engaged in various acts
to artificially inflate the stock price of National Lampoon, Inc. Due to the alleged fraud by defendants,
the Ansell Group declares that it has suffered a total loss of $42,096.00. Specifically, Jonah Ansell
claims to have suffered a loss of $19,292.00, Michael Raspatello claims to have suffered a loss of
$19,292.00, and Joseph Isaacs claims to have suffered a loss of $3,512.00.

The PSLRA directs the court to “appoint as lead plaintiff the member or members of the

purported class that the court determines to be the most capable of adequately representing the interest
of the class members. . . .” 15 U.S.C. §78u-4(a)(3)(B)(i). Individuals seeking to be appointed lead
plaintiff in a securities class action must satisfy the early notice requirement of the PSLRA by providing
notice to class members via publication in a widely circulated national business-oriented publication or
wire service within in 20 days of filing the complaint. 15 U.S.C. §78u-4(a)(3)(A)(i). The notice must
(1) advise class members of the pendency of the action, the claims asserted therein, and the purported
class period, and (2) inform potential class members that, within 60 days of the date on which notice
was published, any members of the purported class may move the court to serve as lead plaintiff in the
purported class. 15 U.S.C. §78u-4(a)(3)(A)(i)(I)-(II). Proposed lead plaintiffs must also submit a sworn
certification stating that he or she has reviewed the complaint, did not purchase the security at the
direction of counsel for purposes of participating in a private action, is willing to serve as a

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Case 2:10-cv-09292-PA -AGR Document 8 Filed 03/07/11 Page 2 of 3 Page ID #:176

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 10-9292 PA (AGRx)
Title

Jonah Ansell v. Daniel S. Laikin, et al.

Date March 7, 2011

representative on behalf of the class, and will not accept any payment for serving as a class
representative beyond his or her pro rata share of the recovery. 15 U.S.C. § 78u-4(a)(2)(A).
Furthermore, the sworn certification must also set forth all of the proposed lead plaintiff’s transactions
in the security during the class period, and identify any other securities class action during the past three
years in which the individual has sought to serve as a class representative. Id. The Ansell Group has
complied with the PSLRA’s notice and certification requirements in this case.

The PSLRA provides a rebuttable presumption that the person or group of persons with the

largest financial interest in the relief sought by the class is the plaintiff “most adequately” situated to
represent the class as lead plaintiff, provided this person or group of persons otherwise satisfies the
requirements of Rule 23 of the Federal Rules of Civil Procedure. 15 U.S.C. §78u-4(a)(3)(B)(iii)(I)(bb)-
(cc). This presumption may be rebutted by evidence that the plaintiff would not fairly and adequately
represent the interest of the class. 15 U.S.C. §78u-4(3)(B)(II)(aa).

The Ninth Circuit has described the appointment of a lead plaintiff in a case governed by the

PSLRA as a three-step process:

The Reform Act provides a simple three-step process for identifying the lead
plaintiff pursuant to these criteria. The first step consists of publicizing the
pendency of the action, the claims made and the purported class period. 15 U.S.C.
§ 78u-4(a)(3(A).

. . .

In step two, the district court must consider the losses allegedly suffered by the
various plaintiffs before selecting as the “presumptively most adequate
plaintiff”—and hence the presumptive lead plaintiff—the one who “has the largest
financial interest in the relief sought by the class” and “otherwise satisfies the
requirements of Rule 23 of the Federal Rules of Civil Procedure.” 15 U.S.C. §
78u-4)a)(3)(B)(iii)(I).

. . .

The third step of the process is to give other plaintiffs an opportunity to rebut the
presumptive lead plaintiff’s showing that it satisfies Rule 23’s typicality and
adequacy requirements.

In re Cavanaugh, 306 F.3d 726, 729-30 (9th Cir. 2002).

The Ansell Group is the only group vying to be appointed lead plaintiff. The PSLRA

specifically provides for the possibility that a “group of persons” may be appointed as the lead plaintiff.
A group may serve as the lead plaintiff even if its members had no previous relationship, so long as the

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Case 2:10-cv-09292-PA -AGR Document 8 Filed 03/07/11 Page 3 of 3 Page ID #:177

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 10-9292 PA (AGRx)
Title

Jonah Ansell v. Daniel S. Laikin, et al.

Date March 7, 2011

group is small enough to “engage in coordinated decision-making” and can “effectively manage the
litigation and direct lead counsel.” Ferrari v. Gisch, 225 F.R.D. 599, 608-09 (C.D. Cal. 2004).
Although the members of the Ansell Group do not have any previous relationship, the Court is
convinced that three is a small enough number that will allow for coordinated decision-making. See
Petrie v. Elec. Game Card, Inc., No. SACV 10-0252 DOC (RNBX), 2010 WL 2292288 at *2 (C.D. Cal.
June 4, 2010) (appointing a group of three individuals, one of whom was previously unrelated to the
other two); Ferrari, 225 F.R.D. at 609 (appointing a group of three previously unrelated investors, since
three is a “manageable number”); In re First Union Corp. Secs. Litig., 157 F. Supp. 2d 638, 643
(W.D.N.C. 2000) (appointing a group of four previously unrelated investors as lead plaintiff).
Moreover, the Court notes that two members of the group – Ansell and Raspatello – have the largest
financial interest out of any investors willing to serve as the lead plaintiff, and would have been deemed
the most “adequate” lead plaintiff had they sought to be appointed individually.

The Ansell Group appears, at least preliminarily, to satisfy the Rule 23 typicality and adequacy
requirements. Therefore, consistent with the procedure established in In re Cavanaugh, the Court finds
that the Ansell Group is the presumptive lead plaintiff. Any member of the purported plaintiff class
wishing to challenge the Ansell Group’s appointment as lead plaintiff must file an opposition to the
Ansell Group’s appointment no later than March 21, 2011. The Ansell Group may file a reply in
support of its appointment no later than March 28, 2011.

Until the Court approves a lead plaintiff, it is premature to approve the Ansell Group’s choice of
lead counsel. The Court therefore declines to appoint the Ansell Group’s choice of lead counsel at this
point. Once the issue of lead plaintiff is conclusively resolved, the court will determine the issue of lead
counsel.

IT IS SO ORDERED.

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