Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 1 of 18
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`Patrick V. Dahlstrom (Pro Hac Vice)
`Louis C. Ludwig (Pro Hac Vice)
`POMERANTZ LLP
`Ten South La Salle Street, Suite 3505
`Chicago, Illinois 60603
`Telephone:
`(312) 377-1181
`Facsimile:
`(312) 229-8811
`E-mail:
`pdahlstrom@pomlaw.com
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`lcludwig@pomlaw.com
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`Jennifer Pafiti (SBN 282790)
`POMERANTZ LLP
`468 North Camden Drive
`Beverly Hills, California 90210
`Telephone:
`(818) 532-6449
`E-mail:
`jpafiti@pomlaw.com
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`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANCISCO DIVISION
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`IN RE TERRAVIA HOLDINGS, INC.,
`SECURITIES LITIGATION
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`Case No. 3:16-cv-06633-JD
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`CLASS ACTION
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`PLAINTIFFS’ MOTION FOR CLASS
`CERTIFICATION
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`Date: August 20, 2020
`Time: 10:00 a.m.
`Before: Hon. James Donato
` Courtroom: 11, 19th Fl.
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`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
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`PLEASE TAKE NOTICE that on August 20, 2020 at 10:00 a.m. before the Honorable
`James Donato in Courtroom 11 – 19th Floor, 450 Golden Gate Avenue, San Francisco, CA 94102,
`proposed Class Representatives Casey Minnick (“Minnick”) and Reuben Perales (“Perales”)
`(collectively, the “Plaintiffs”) through their counsel, will, and do move this Court for an Order,
`pursuant to Fed. R. Civ. P. 23(a), 23(b)(3), and 23(g), for an Order:
`1.
`Certifying the following class (the “Class”):
`all persons other than Defendants who purchased or otherwise acquired TerraVia
`Holdings, Inc. (“TerraVia”) securities between May 4, 2016 and November 6, 2016,
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 2 of 18
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`both dates inclusive (the “Class Period”), seeking to recover compensable damages
`caused by Defendants’ violations of the federal securities laws and to pursue remedies
`under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange
`Act”) and Rule 10b-5 promulgated thereunder;
`2.
`Appointing Plaintiffs as class representatives;
`3.
`Appointing their counsel of choice, Pomerantz LLP (“Pomerantz”); and
`4.
`Granting such other and further relief the Court may deem just and proper.
`Class certification and the appointment of Plaintiffs as Class Representatives are proper,
`where, as here, the Class is so numerous that joinder of all members is impracticable, common
`question of law and fact exist, Plaintiffs’ claims are typical of the Class claims, Plaintiffs and their
`counsel will fairly and adequately represent the Class, common questions predominate, and a class
`action is superior to individual actions. Additionally, the appointment of Class Counsel is proper,
`where, as here, counsel is well qualified to represent the Class.
`This Motion is made pursuant to the Court’s Order entered on May 1, 2020 (ECF No. 88).
`The Motion is based on this Notice of Motion, the accompanying Memorandum of Points and
`Authorities, the Declaration of Louis C. Ludwig and exhibits thereto, the pleadings and other filings
`in this matter, and other evidence and argument that may be presented prior to the Court’s decision
`on this Motion.
`Dated: May 12, 2020
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`Respectfully submitted,
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`
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`POMERANTZ LLP
`
`By: /s/ Louis C. Ludwig
`Patrick V. Dahlstrom
`Louis C. Ludwig
`Ten South La Salle Street, Suite 3505
`Chicago, IL 60603
`Telephone: (312) 377-1181
`Facsimile: (312) 229-8811
`E-mail: pdahlstrom@pomlaw.com
`E-mail: lcludwig@pomlaw.com
`
` Proposed Class Counsel
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
`NO. 3:16-CV-06633-JD
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 3 of 18
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` TABLE OF CONTENTS
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`I.
`ISSUES TO BE DECIDED ....................................................................................1
`II.
`PRELIMINARY STATEMENT ............................................................................1
`III.
`FACTUAL SUMMARY ........................................................................................3
`IV. ARGUMENT .......................................................................................................... 4
`A. The Proposed Class Meets the Requirements of Rule 23(a) ............................. 5
`1. Numerosity ................................................................................................. 6
`2. Commonality ...............................................................................................6
`3. Typicality ....................................................................................................7
`4. Adequacy .................................................................................................... 8
`B. The Proposed Class Satisfies Rule 23(b)(3) .....................................................8
`1. Common Questions of Law and Fact Predominate over Individual
`Questions .....................................................................................................9
`2. A Class Action Is Superior to Other Methods for Resolving This
`Controversy ...............................................................................................12
`CONCLUSION ..................................................................................................... 13
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`V.
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 4 of 18
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`Cases
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`TABLE OF AUTHORITIES
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`Pages
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`Amchem Prods. V. Windsor, 521 U.S. 591 (1997) ...................................................................8
`Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184,
`185 L. Ed. 2d 308 (2013) ..........................................................................................................7
`Basic Inc. v. Levinson, 485 U.S. 224 (1988) .........................................................................2, 9
`Binder v. Gillespie, 184 F.3d 1059 (9th Cir. 1999). ............................................................9, 10
`Blackie v. Barrack, 524 F.2d 891 (9th Cir. 1975) .............................................................2, 7, 9
`Brown v. China Integrated Energy, Inc., No. CV 11-02559 BRO (PLAx),
`2015 U.S. Dist. LEXIS 19177 (C.D. Cal. Feb. 17, 2015) ......................................................... 6
`Cammer v. Bloom, 711 F. Supp. 1264 (D.N.J. 1989). ..................................................... passim
`Cheney v. Cyberguard Corp., 213 F.R.D. 484 (S.D. Fla. 2003) .............................................11
`Connecticut Retirement Plans & Trust Funds v. Amgen, 2009 U.S. Dist. LEXIS 71653
`(C.D. Cal. Aug. 12, 2009) .........................................................................................................7
`Dean v. China Agritech, 2012 U.S. Dist. LEXIS 70683 (C.D. Cal. May 3, 2012) ..................6
`Epstein v. MCA, Inc., 50 F.3d 644 (9th Cir. 1995) ................................................................... 3
`Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976) ...................................................................2
`Freedman v. Louisiana-Pacific Corp., 922 F. Supp. 377 (D. Or. 1996) ..................................8
`Gable v. Land Rover N. Am., Inc., 2011 U.S. Dist. LEXIS 90774
`(C.D. Cal. July 25, 2011) ...........................................................................................................4
`Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) ...............................................5, 7, 9
`Hanon v. Dataproducts Corp., 976 F.2d 497 (9th Cir. 1992) ...................................................9
`Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909 (9th Cir. 1964) ............................. 6
`Hodges v. Akeena Solar, Inc., 274 F.R.D. 259 (N.D. Cal. 2011) .............................................6
`In re Alco Intern. Group, Inc., Sec. Litig., 158 F.R.D. 152 (S.D. Cal. 1994) ........................... 9
`In re Bridgepoint Educ., Inc. Sec. Litig., 2015 U.S. Dist. LEXIS 5137
`(S.D. Cal. Jan. 15, 2015) ...........................................................................................................5
`In re Celera Corp. Sec. Litig., 2014 U.S. Dist. LEXIS 25098 (N.D. Cal. Feb. 25, 2014)........ 5
`In re Cooper Companies Inc. Securities Litigation, 254 F.R.D. 628
`(C.D. Cal. 2009) ............................................................................................................2, 6, 7, 8
`In re Countrywide Fin. Corp. Sec. Litig., 273 F.R.D. 586 (C.D. Cal. 2009) .......................... 12
`In re Emulex Corp. Sec. Litig., 210 F.R.D. 717 (C.D. Cal. 2002) ............................................8
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
`NO. 3:16-CV-06633-JD
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`In re HealthSouth Corp. Sec. Litig., 257 F.R.D. 260 (N.D. Ala. 2009) .................................. 12
`In re Juniper Networks, Inc. Sec. Litig., 264 F.R.D. 584 (N.D. Cal. 2009) ............................12
`In re Magma Design Automation, Inc. Sec. Litig., 2007 U.S. Dist. LEXIS 62641
`(N.D. Cal. Aug. 16, 2007) .........................................................................................................2
`In re Memorex Sec. Cases, 61 F.R.D. 88 (N.D. Cal. 1973) ....................................................11
`In re Nature’s Sunshine Product’s Inc. Sec. Litig., 251 F.R.D. 656 (D. Utah 2008) ..............10
`In re Portal Software, Inc. Sec. Litig., 2007 U.S. Dist. LEXIS 51794
`(N.D. Cal. June 30, 2007) .........................................................................................................5
`In re THQ, Inc. Sec. Litig., 2002 U.S. Dist. LEXIS 7753 (C.D. Cal. Mar. 22, 2002) .......... 4, 6
`In re VeriSign, Inc. Sec. Litig., 2005 U.S. Dist. LEXIS 10438
`(N.D. Cal. Jan. 13, 2005) ....................................................................................................7, 10
`Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507 (9th Cir. 1978) ................................... 8
`Lumen v. Anderson, 280 F.R.D. 451 (W.D. Mo. 2012) .......................................................... 10
`Schneider v. Traweek, 1990 U.S. Dist. LEXIS 15596 (C.D. Cal. July 31, 1990) ................ 2, 4
`Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) .......................................... 2
`Vinh Nguyen v. Radient Pharmaceuticals Corp., 287 F.R.D. 563
`(C.D. Cal. 2012) .............................................................................................................. 5, 7, 11
`Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) ..............................................................5
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 6 of 18
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`I.
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`ISSUES TO BE DECIDED
`1. Whether this action should be certified as a class action on behalf of all persons other
`than Defendants who purchased or otherwise acquired TerraVia securities during the Class
`Period.
`2. Whether Plaintiffs should be appointed as class representatives and whether their
`counsel of choice, Pomerantz, should be appointed as Class Counsel.
`II.
`PRELIMINARY STATEMENT
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`Plaintiffs seek class certification of claims brought against certain of TerraVia’s
`officers and directors under §10(b) of the Securities Exchange Act of 1934 (the “Exchange
`Act”) and Securities Exchange Commission (“SEC”) Rule 10b-5. TerraVia touted its algae-
`based food additives to the market, even after one of its food-manufacturer partners told
`TerraVia that its ingredients were causing gastrointestinal (GI) distress in consumers, and after
`the company acknowledged the GI issue in a letter to the complaining manufacturer. The
`letter's existence was revealed to the public in a Bloomberg article that also disclosed that the
`maker of Soylent had halted sales of products containing TerraVia ingredients due to fresh GI-
`related customer complaints, and was publicly blaming TerraVia for those complaints. TerraVia
`shares declined as a result, and the company later declared bankruptcy.
`Plaintiffs’ Exchange Act claims are ideally suited for class treatment. They arise entirely
`from common misrepresentations and omissions made to all investors in Defendants’ public
`statements. In particular, then-CEO Wolfson’s statements at the outset of the Class Period, on
`May 4, 2016, as well as statements featured on TerraVia’s website throughout the Class Period,
`were deployed to paint a picture that was markedly at odds with the internally-known truth. On
`February 4, 2020, the Court said as much when it sustained Lead Plaintiffs’ Consolidated
`Amended Class Action Complaint for Violations of the Federal Securities Laws (“CAC”) in its
`entirety. See ECF No. 80. This lifted the discovery stay imposed by the Private Securities
`Litigation Reform Act (“PSLRA”), and fact discovery is set to commence. Now, Plaintiffs
`move for certification of a class of investors damaged by Defendants’ misrepresentations and
`omissions.
`The Supreme Court has repeatedly recognized the importance of class actions in
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`redressing violations of the federal securities laws. See, e.g., Tellabs, Inc. v. Makor Issues &
`Rights, Ltd., 551 U.S. 308, 313 (2007) (“This Court has long recognized that meritorious private
`actions to enforce federal antifraud securities laws are an essential supplement to criminal
`prosecutions and civil enforcement actions . . . .”); Basic Inc. v. Levinson, 485 U.S. 224, 229-30,
`249-50 (1988); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 196 (1976). Similarly, “[t]he law in
`the Ninth Circuit is very well established that the requirements of Rule 23 should be liberally
`construed in favor of class action cases brought under the federal securities laws.” Schneider v.
`Traweek, No. CV 88-0905 RG (Kx), 1990 U.S. Dist. LEXIS 15596, at *16 (C.D. Cal. July 31,
`1990) (citing Blackie v. Barrack, 524 F.2d 891, 902 (9th Cir. 1975), cert. denied, 429 U.S. 816
`(1976)).
`In this case, as “in almost all lawsuits by shareholders of public companies, the investors
`. . . easily satisfy the requirements of Rule 23.” In re Magma Design Automation, Inc. Sec.
`Litig., No. C 05-2394, 2007 U.S. Dist. LEXIS 62641, at *2 (N.D. Cal. Aug. 16, 2007).
` First, numerosity is satisfied because the Class consists of hundreds, if not
`thousands, of investors that purchased TerraVia stock;
` Second, there are numerous legal and factual questions that are common to all
`Class members, including whether Defendants’ Class Period statements and
`omissions were materially false and misleading;
` Third, Plaintiffs’ claims are not only typical of but identical to those of the Class,
`as all purchased pursuant to the same material misrepresentations and omissions;
`and
` Fourth, Plaintiffs are committed to overseeing and managing this litigation to
`fairly and adequately protect the interests of the Class.
` Additionally, common questions predominate over minimal individual issues, such
`as mechanical tabulation of statutory damages, and a class action is superior to a multitude of
`individual actions. By contrast, individual litigation of each Class member’s claim would be
`inefficient and impracticable. See In re Cooper Companies Inc. Securities Litigation, 254
`F.R.D. 628, 632, (C.D. Cal. 2009) (“[A]djudicating this matter as a class action is a superior
`method to resolve the parties’ controversy because it avoids not only the dangers of duplicate
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`discovery and trials, but also the unfairness of inconsistent findings and judgments.”). As the
`Ninth Circuit has explained, securities fraud cases fit Rule 23 “like a glove.” Epstein v. MCA,
`Inc., 50 F.3d 644, 668 (9th Cir. 1995), rev’d on other grounds, 516 U.S. 367 (1996). The Court
`should grant Plaintiffs’ motion for class certification.
`III.
`FACTUAL SUMMARY
`In April 2016, after consumers of the Honey Stinger’s new line of chewable tablets
`(released just weeks earlier, in late March 2016) reported severe GI distress, Honey Stinger
`recalled the product, triggering investigations by Honey Stinger and its affiliated entities. ¶68.1
`These investigations eliminated all possible internal causes, leading to the near certain
`conclusion that TerraVia’s algal protein – an ingredient in the Honey Stinger chews – was to
`blame for the negative health response in consumers. ¶¶73-74, 77, 79. This consensus that was
`conveyed to Defendants no later than May 2016. ¶82.
`Following the Honey Stinger recall, on May 4, 2016, Defendant Wolfson falsely stated
`that “AlgaVia Whole Algae Protein continues to gain traction with producers of protein-rich
`beverages and snacks like Soylent and Honey Stinger” and “food industry innovators,
`established food leaders, and established personal care leaders are all embracing our products.”
`¶ 105 (emphasis modified). As this Court noted in sustaining the CAC, “[b]ecause defendants
`failed to disclose the Honey Stinger recall and the reports of adverse gastrointestinal reactions,
`both the explicit reference to TerraVia’s partnership with Honey Stinger and the claim that “all”
`food industry innovators and established food leaders were “embracing” its algae-based
`products were materially misleading.” ECF No. 80.
`Shortly thereafter, in June 2016, Soylent – a provider of a premier meal-replacement
`beverage – introduced Soylent 1.6, which was “the first powder iteration to use whole algal
`flour and high oleic algal oil” from Defendants. ¶92. This was followed, in September 2016,
`Soylent’s meal replacement bar based on the same formula (including Defendants’ algae
`products) as Soylent 1.6. ¶92. Yet by October 2016, Defendants’ partnership with Solyent –
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`1 Unless otherwise indicated, citations to “¶ __” or “¶¶ __” are to paragraph(s) in the CAC (ECF
`No. 39).
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
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`TerraVia’s most significant business relationship – was in jeopardy, with users of Soylent 1.6
`and Soylent bars taking to various online forums to report GI distress experienced after
`consuming Soylent’s products. ¶¶94-95. On this news, Soylent recalled its Soylent bar, halting
`sales of Soylent 1.6, its flagship powder drink, two weeks later. ¶97.
`Throughout the Class Period, TerraVia’s website falsely advertised, including after both
`the Honey Stinger and Soylent recalls, that its products had “[h]igh protein digestibility.”
`¶¶123-24. But, as explained by this Court in its Order upholding the full Class Period, “[a]s
`early as the date TerraVia received notice of the Honey Stinger recall, and no later than when it
`received notice of the Soylent recall in October 2016, TerraVia’s unqualified statement that its
`products had ‘[h]igh protein digestibility’ was materially misleading.” ECF No. 80 at 8. Given
`the nature and extent of Defendants’ deception, the market was justifiably shocked on
`November 7, 2016, when Bloomberg published an article indicating that Soylent had
`determined the root cause of GI distress in its customers: Defendants’ algal flour. ¶125.
`In response to the Bloomberg article, released prior to the market opening on November
`7, 2016, which brought the problems with both Soylent and Honey Stinger to light, TerraVia’s
`common stock slid $0.15 per share, or 8.11% to close at $1.70, ultimately dropping as low as a
`$1.50 per share on November 10, 2016, nearly 19% below the pre-Bloomberg article stock
`price. ¶¶126-127. On August 2, 2017, Defendants commenced bankruptcy proceedings that
`spelled the end of TerraVia.
`IV. ARGUMENT
`“The law in the Ninth Circuit is very well established that the requirements of Rule 23
`should be liberally construed in favor of class action cases brought under the federal securities
`laws.” Schneider, 1990 U.S. Dist. LEXIS 15596, at *16 (citing Blackie, 524 F.2d at 902); In re
`THQ, Inc. Sec. Litig., No. CV 00-1783 AHM (Ex), 2002 U.S. Dist. LEXIS 7753, at *8 (C.D.
`Cal. Mar. 22, 2002). Any doubt as to the propriety of certification should be resolved in favor of
`certifying the class. Gable v. Land Rover N. Am., Inc., No. SAVC 07-0376 AG (RNBx), 2011
`U.S. Dist. LEXIS 90774, at *8 (C.D. Cal. July 25, 2011). Consequently, courts throughout the
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`Ninth Circuit regularly grant class certification in securities fraud cases. See, e.g., In re
`Bridgepoint Educ., Inc. Sec. Litig., No. 12-cv-1737 JM (JLB), 2015 U.S. Dist. LEXIS 5137, at
`*2 (S.D. Cal. Jan. 15, 2015); In re Celera Corp. Sec. Litig., No. 5: 10-CV-02604-EJD, 2014
`U.S. Dist. LEXIS 25098 (N.D. Cal. Feb. 25, 2014); Vinh Nguyen v. Radient Pharmaceuticals
`Corp., 287 F.R.D. 563, at 575, (C.D. Cal. 2012); Hodges v. Akeena Solar, Inc., 274 F.R.D. 259,
`259 (N.D. Cal. 2011).
`“A Rule 23 determination is wholly procedural and has nothing to do with whether a
`plaintiff will ultimately prevail on the substantive merits of its claim.” In re Portal Software,
`Inc. Sec. Litig., No. C-03-5138 VRW, 2007 U.S. Dist. LEXIS 51794, at *6-7 (N.D. Cal. June
`30, 2007). While courts must conduct a “rigorous analysis” to determine whether the elements
`of Rule 23 have been satisfied, Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011), Rule
`23 is not a “license to engage in free-ranging merits inquiries at the certification stage.” Amgen
`Inc. v. Conn. Ret. Plans and Trust Funds, 133 S. Ct. 1184, 1194-95 (2013). “Merits questions
`may be considered to the extent – but only to the extent – that they are relevant to determining
`whether the Rule 23 prerequisites for class certification are satisfied.” Id. at 1195. In particular,
`materiality is considered to be a merits issue not appropriately addressed at the class
`certification stage. Id.
`A.
`The Proposed Class Meets the Requirements of Rule 23(a)
`The class certification analysis involves two steps. First, the proposed class must satisfy
`Rule 23(a)’s four prerequisites: (i) the class is so numerous that joinder of all members is
`impracticable; (ii) there are questions of law or fact common to the class; (iii) the claims or
`defenses of the representative parties are typical; and (iv) the class representatives and their
`counsel will fairly and adequately protect the interests of the class. See Hanlon v. Chrysler
`Corp., 150 F.3d 1011, 1019-20 (9th Cir. 1998). Second, the proposed class must satisfy Rule
`23(b): (i) questions of law or fact common to class members must predominate over
`individualized ones; and (ii) a class action must be superior to other available methods for
`efficiently resolving the controversy. Id. at 1022. Each of these requirements is satisfied here.
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
`NO. 3:16-CV-06633-JD
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 11 of 18
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`1.
`Numerosity
`The numerosity requirement is met “where the class is so numerous that joinder of all
`members is impracticable.” Cooper, 254 F.R.D. at 633. Impracticable does not mean
`impossible, only that it would be difficult or inconvenient to join all members of the class.
`Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909, 913-14 (9th Cir. 1964). “No exact
`numerical cut-off is required; rather, the specific facts of each case must be considered.”
`Cooper, 254 F.R.D. at 633. In securities cases, numerosity is presumed when millions of shares
`are traded during the period in question. Id. “‘[F]ederal trial courts are quite willing to accept
`common sense assumptions in order to support a finding of numerosity, often looking at the
`number of shares traded or transactions completed rather than seeking to determine directly the
`number of potential class members involved.’” In re VeriSign, Inc. Sec. Litig., No. C 02-02270
`JW, 2005 U.S. Dist. LEXIS 10438, at *13 (N.D. Cal. Jan. 13, 2005) (““[i]n cases involving
`securities traded on national stock exchanges, numerosity is practically a given.”); THQ, 2002
`U.S. Dist. LEXIS 7753, at *9 (“given the number of shares of THQ traded during the Class
`Period . . . common sense dictates that the proposed class is surely sufficiently large to make
`joinder impracticable”).
`During the Class Period, the total number of TerraVia shares issued and outstanding
`ranged from approximately 83.5 million to 90.2 million shares, and TerraVia traded regularly
`and actively. See Ludwig Decl., Exhibit (“Ex.”) A, Expert Report of Zachary Nye, Ph.D. (May
`12, 2020), ¶25. The average weekly reported trading volume for the shares, excluding weeks not
`entirely contained within the Class Period, was more than two million shares. Id. Accordingly, it
`is apparent that hundreds, if not thousands of investors, purchased TerraVia’s stock during the
`Class Period, and that numerosity is satisfied. See Dean v. China Agritech, CV 11-01331-RGK
`(PJWx), 2012 U.S. Dist. LEXIS 70683, at *10 (C.D. Cal. May 3, 2012) (classes of more than
`forty investors satisfies numerosity in a securities class action).
`2.
`Commonality
`Commonality is a prerequisite which plaintiffs “satisfy very easily.” Brown v. China
`Integrated Energy, Inc., No. CV 11-02559 BRO (PLAx), 2015 U.S. Dist. LEXIS 19177, at *45
`(C.D. Cal. Feb. 17, 2015). All Class members were injured by the same “common course of
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
`NO. 3:16-CV-06633-JD
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 12 of 18
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`conduct,” the hallmark for certifying a securities action for class treatment. See, e.g., Blackie,
`524 F.2d 891 at 902-05. Not all questions of fact and law need be common to satisfy Rule
`23(a)(2). Hanlon, 150 F.3d at 1019. Instead, because commonality is “construed permissively,”
`the “existence of shared legal issues with divergent factual predicates is sufficient.” Id.
`Common questions of fact and law with respect to the Class include:
` whether the federal securities laws were violated by Defendants’ acts as alleged
`herein;
` whether statements made by Defendants to the investing public during the Class
`Period misrepresented material facts about the business, operations and management
`of TerraVia;
` whether Defendants caused TerraVia to issue false and misleading statements during
`the Class Period;
` whether Defendants acted knowingly or recklessly in issuing false and misleading
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`statements;
` whether the prices of TerraVia securities during the Class Period were artificially
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`inflated because of the Defendants’ conduct complained of herein; and,
` whether the members of the Class have sustained damages and, if so, what is the
`proper measure of damages.
`3.
`Typicality
`Typicality requires that “the claims or defenses of the representative parties are
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`typical of the claims or defenses of the class.” Cooper, 254 F.R.D. at 635. “The purpose of the
`typicality requirement ‘is to assure that the interest of the named representative aligns with the
`interests of the class.’” Radient, 287 F.R.D. at 569-70 (citing Hanon v. Dataproducts Corp., 976
`F.2d 497, 508 (9th Cir. 1992)). “Typicality refers to the nature of the claim or defense of the
`class representative, and not to the specific facts from which it arose or the relief sought.”
`Connecticut Retirement Plans & Trust Funds v. Amgen, No. CV 07-2536 PSG (PLAx), 2009
`U.S. Dist. LEXIS 71653, at *14 (C.D. Cal. Aug. 12, 2009) (quoting Hanon, 976 F.2d at 508).
`“[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with those of absent
`class members; they need not be substantially identical.” Hanlon, 150 F.3d at 1020.
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 13 of 18
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`Plaintiffs’ claims here are unquestionably typical of the claims of absent Class members,
`and derive from the same legal theories as do the claims of those Class members.
`4.
`Adequacy
`The adequacy element of Rule 23(a)(4) is intended to ensure that a class
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`representative will “fairly and adequately protect the interests of the class.” Cooper, 254 F.R.D.
`at 636; Fed. R. Civ. P. 23(a)(4). Two criteria determine adequacy. “First, the named
`representative must appear able to prosecute the action vigorously through qualified counsel,
`and second, the representative must not have antagonistic or conflicting interests with the
`unnamed members of the class.” Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512
`(9th Cir. 1978) (citations omitted).
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`Plaintiffs easily satisfy these criteria. Plaintiffs have engaged qualified, experienced
`and capable attorneys. Proposed Class Counsel are highly experienced in securities fraud class
`action litigation, and have demonstrated the ability and willingness to prosecute this action
`vigorously. See Ludwig Decl., Ex. B, Firm Resume. Moreover, the record in this case
`demonstrates that the interests of Plaintiffs are precisely aligned with those of absent Class
`members. All were impacted by the same Class Period misrepresentations and omissions, and
`all have the same interest in demonstrating the materiality and falsity of those statements.
`Plaintiffs have vigorously prosecuted this action on behalf of the Class for more than three
`years, and will continue to do so. Accordingly, Plaintiffs “will fairly and adequately protect the
`interests of the class.” See Fed. R. Civ. P. 23(a)(4).
`B.
`The Proposed Class Satisfies Rule 23(b)(3)
`Rule 23(b)(3) requires that “questions of law or fact common to the class ‘predominate’
`over questions affecting the individual members and, on balance, a class action is superior to
`other methods available for adjudicating the controversy.” In re Emulex Corp. Sec. Litig., 210
`F.R.D. 717, 721 (C.D. Cal. 2002); also Freedman v. Louisiana-Pacific Corp., 922 F. Supp. 377,
`399-400 (D. Or. 1996). The primary purpose behind Rule 23(b)(3) is to aggregate small claims
`to make the cost and effort of the litigation economically feasible. See Amchem Prods. v.
`Windsor, 521 U.S. 591, 617 (1997). “Class actions are particularly well-suited in the context of
`securities litigation, wherein geographically dispersed shareholders with relatively small
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`NOTICE OF MOTION, MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION FOR CLASS CERTIFICATION
`NO. 3:16-CV-06633-JD
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`Case 3:16-cv-06633-JD Document 89 Filed 05/12/20 Page 14 of 18
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`holdings would otherwise have difficulty in challenging wealthy corporate defendants.”
`VeriSign, 2005 U.S. Dist.