Guzman v. Ford Motor Company — Entry #46: TRANSCRIPT of Motion Hearing held on 09/16/2025
Case: Guzman v. Ford Motor Company mied · 2:24-cv-12080
filed August 08, 2024
What this document is
Docket entry #46 · filed September 17, 2025
TRANSCRIPT of Motion Hearing held on 09/16/2025. (Court Reporter/Transcriber: Shacara Mapp) (Number of Pages: 51) The parties have 21 days to file with the court and Court Reporter/Transcriber a Redaction Request of this transcript. If no request is filed, the transcript may be made remotely electronically available to the public without redaction after 90 days. Redaction Request due 10/8/2025. Redacted Transcript Deadline set for 10/20/2025. Release of Transcript Restriction set for 12/16/2025. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date, the transcript is publicly available. (Mapp, Shacara) (Entered: 09/17/2025)
Who is involved
- Albert Guzman
- Clark D. Crippen
- Ford Motor Company
- James D. Farley, Jr.
- John T. Lawler
- Michael M Press
- Robert Sklodowski
- Ronald Ferrante
- Teamsters Local 710 Pension Fund
Why we have it
We follow this case because it names a company we track, although that company is not a party:
- Marathon Digital: its name “Marathon Digital Holdings, Inc.” appears in a filing in this case.
…23-CV-00691 (D. Ariz); • Moreno, et al. v. Marathon Digital Holdings, Inc., et al. (D. Nev.) • SLF is also…
A free copy from the RECAP archive of federal court filings (mirrored at the Internet Archive), retrieved October 16, 2026. Federal court filings are public records.
Document text
51 page(s), 95,384 characters, converted from the PDF's text layer · plain text.
Full text
Case 2:24-cv-12080-LVP-KGA ECF No. 46, PageID.1053 Filed 09/17/25 Page 1 of 51
MOTION HEARING - September 16, 2025 1
1 UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
2 SOUTHERN DIVISION
3 ALBERT GUZMAN,
4 Plaintiff,
5 -v- Case No. 24-12080
6 FORD MOTOR COMPANY, et al.,
7 Defendant.
____________________________________/
8
MOTION HEARING
9
BEFORE THE HONORABLE LINDA V. PARKER
10 United States District Judge
Theodore Levin United States Courthouse
11 231 West Lafayette Boulevard
Detroit, Michigan
12 September 16, 2025
13 APPEARANCES:
14 FOR THE Nicholas J. Siciliano
DEFENDANTS: Latham & Watkins LLP
15 330 North Wabash Avenue
Suite 2800
16 Chicago, IL 60611
17 Roger P. Meyers
Bush Seyferth PLLC
18 100 W. Big Beaver Road
Suite 400
19 Troy, MI 48084
20 FOR THE MOVANTS: Francis P. McConville
Labaton Keller Sucharow LLP
21 140 Broadway
New York, NY 10005
22
Adam M. Apton
23 Levi & Korsinsky, LLP
33 Whitehall Street, 27th Floor
24 New York, NY 10004
25
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MOTION HEARING - September 16, 2025 2
1 APPEARANCES David Shea
CONTINUED... Shea Law Firm PLLC
2 26100 American Dr.
2nd Floor
3 Southfield, MI 48034
4 Michael Albert
Robbins Geller Rudman & Dowd LLP
5 655 West Broadway
Suite 1900
6 San Diego, CA 92101
7 ALSO PRESENT: Matthew I. Henzi, Asher Kelly
Ken Dolitsky, Robbins, Geller
8 Tom Michaud, VanOverbeke Michaud & Timmony
Samuel Pigler, Local 710 Pension Fund Rep
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23 To Obtain a Certified Transcript Contact:
Shacara V. Mapp, CSR-9305, RMR, FCRR, CRR
24 www.transcriptorders.com
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MOTION HEARING - September 16, 2025 3
1 TABLE OF CONTENTS
2 MATTER PAGE
3 MOTION HEARING............................................
4 THE COURT'S INITIAL QUESTIONS............................. 6
Counsel's Response
5 By Mr. Apton:............................................. 7
By Mr. McConville:........................................ 16
6 By Mr. Albert:............................................ 29
Counsel's Follow-up Response
7 By Mr. McConville:........................................ 41
By Mr. Apton:............................................. 45
8 By Mr. Siciliano:......................................... 47
9 WITNESSES:
10 None......................................................
11 EXHIBITS RECEIVED:
12 None Offered..............................................
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17 Certificate of Reporter................................... 51
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MOTION HEARING - September 16, 2025 4
1 Detroit, Michigan
2 September 16, 2025
3 10:04 a.m.
4 * * *
5 LAW CLERK: All rise.
6 The United States District Court for the Eastern
7 District of Michigan is now in session. The Honorable Linda
8 V. Parker presiding.
9 The Court calls Guzman versus Ford Motor Company, et
10 al, Civil Case Number 24-12080, time set for a motion hearing.
11 Counsel, if you'll state your name for the record,
12 beginning with the movants.
13 MR. McCONVILLE: Good morning, Your Honor. Francis
14 P. McConville on behalf of Teamsters Local 710, --
15 THE COURT: Thank you.
16 MR. McCONVILLE: -- of the law firm, Labaton, Keller,
17 and Sucharow.
18 THE COURT: Okay. I want you to say your name once
19 more for me.
20 MR. McCONVILLE: Francis McConville.
21 THE COURT: Thank you. Good.
22 MR. MEYERS: Good morning. My name is Michael Albert
23 from the Robbins, Geller, Rudman, and Dowd Law Firm, and we
24 represent Clark Crippen.
25 THE COURT: Good. Mr. Crippen's counsel. Okay.
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MOTION HEARING - September 16, 2025 5
1 MR. APTON: Good morning, Your Honor. Adam Apton
2 from Levi and Korsinsky for Mr. Ronald Ferrante.
3 MR. SHEA: Good morning, Your Honor. David Shea on
4 behalf of Mr. Ferrante.
5 THE COURT: Okay. All right.
6 And, here?
7 MR. SICILIANO: Nick Siciliano from Latham and
8 Watkins on behalf of the defendants.
9 THE COURT: Thank you.
10 Sir?
11 MR. MEYERS: Good morning, Your Honor. Roger Meyers
12 from the Seyferth Law Firm, also on behalf of the defendants.
13 THE COURT: All right. Thank you. You may be
14 seated.
15 And gentlemen who are seated behind you, are these
16 clients? Tell me who it is. Is this Mr. Ferrante, Mr.
17 Crippen, someone from Teamsters? Tell me who this is.
18 MR. McCONVILLE: Yes, Your Honor, with me is Matthew
19 Henzi, who is a member of the Asher Kelly Firm, local counsel.
20 And then, I also have Mr. Sam Pilger who -- he is a board
21 member on the Local 710 Pension System.
22 THE COURT: Okay. Anyone else?
23 Okay. Be seated, everyone. Thank you.
24 There was someone else in the back? Who else? I'm
25 sorry.
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MOTION HEARING - September 16, 2025 6
1 MR. ALBERT: Yes, Your Honor. I'm sorry. I have my
2 colleague, Ken Dolitsky, from the Robbins, Geller Law Firm,
3 and Tom Michaud from the VMT Law Firm who is our local
4 counsel.
5 THE COURT: Excellent. All right.
6 So I have read everything that you all have put
7 before me. Quite a bit, but it's all good. I've got it, and
8 I have questions.
9 And so, I would like to start off with my questions.
10 And then, I'm going to allow you to close, if you would, you
11 know, if a part I have covered has not been brought out in
12 terms of my questions.
13 I'm going to begin with counsel for Mr. Ferrante.
14 Who is that? Thank you.
15 MR. APTON: Should I approach the lectern, Your
16 Honor?
17 THE COURT: You can.
18 MR. APTON: Okay.
19 THE COURT: You can.
20 THE COURT'S INITIAL QUESTIONS
21 THE COURT: All right. How are you doing this
22 morning?
23 MR. APTON: Very good. And, yourself?
24 THE COURT: Excellent. I'm doing well.
25 I want to just start off with what I perceived as
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MOTION HEARING - September 16, 2025 7
1 your view, potentially, that the expanded class period, the
2 Sklodowski class period, if you will, you believe that -- and
3 I know that Mr. Sklodowski's counsel is not present today.
4 But you believe from what you've filed, that Sklodowski's
5 complaint was filed for a nefarious reason. We first had
6 Guzman, we had the initial class period, and then you seemed
7 to imply -- and maybe not "nefarious" is the word you would
8 use, -- but I think you do have -- take objection to the fact
9 that it was filed. And my question -- I mean, believing it
10 was filed to make way for Mr. Crippen to, perhaps, have the
11 largest financial interest. I note that Mr. Crippen is not
12 represented by the same attorneys from Sklodowski.
13 So my question, do you believe that Crippen and his
14 counsel were colluding with counsel from Guzman and
15 Sklodowski? And if you do, can you tell me the basis?
16 If that's not applicable at all here, what are you
17 really saying?
18 COUNSEL'S RESPONSE
19 MR. APTON: I wouldn't say colluding, Your Honor.
20 THE COURT: Okay.
21 MR. APTON: A strong word.
22 THE COURT: It is.
23 MR. APTON: Nefarious reasons, also --
24 THE COURT: A little too strong?
25 MR. APTON: -- a bit strong.
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MOTION HEARING - September 16, 2025 8
1 I mean, I know counsel, for most of the folks in
2 here, and we do have good working relationships.
3 THE COURT: Okay. Good.
4 MR. APTON: I do think that the class period in this
5 Sklodowski action, though, doesn't make sense under the
6 allegations certainly before the board. If this case is about
7 Ford Blue, it would not make sense if there was a
8 misrepresentation about Ford Blue before Ford Blue came into
9 existence. But as Your Honor knows, in the reply papers,
10 we've made clear it doesn't make sense.
11 THE COURT: Okay.
12 MR. APTON: Mr. Ferrante has the largest financial
13 interest in the lot, under either of the class periods. And
14 at that point, we should be looking at whether or not any of
15 the other movants have enough proof, evidence to rebut the
16 presumption in Mr. Ferrante's favor.
17 THE COURT: Okay. When you talk about the Ford Blue
18 segment, so to speak -- is that how you refer to it?
19 MR. APTON: Yes, Your Honor.
20 THE COURT: So wasn't there -- I thought there was
21 information to suggest that it wasn't just limited -- that
22 that issue was not just limited to the initial class period.
23 The concerns about warranties and so forth were -- existed
24 well before the initial class period. You know, sometime --
25 well, it included, I should say, the 2021 period.
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MOTION HEARING - September 16, 2025 9
1 MR. APTON: Sure.
2 THE COURT: Do you dispute that, sir?
3 MR. APTON: So, Your Honor, the -- I guess this issue
4 turns on the corrective disclosure at the end of the class
5 period, --
6 THE COURT: Okay.
7 MR. APTON: -- in July of 2024. At that point in
8 time, Ford comes out and says we have higher warranty
9 reserves, Ford, Ford Blue. It ties to Ford Blue. And so,
10 that is the basis for our understanding of the allegations and
11 our argument as to whether the Sklodowski class period should
12 or should not be credited at this stage. It may very well be,
13 Your Honor, that facts come to light during the course of the
14 case where, yeah, the class period should not only encompass
15 Sklodowski, but even events prior to that. But at this point
16 in time, we look at what's on file before the Court, and
17 that's the way I look at the allegations.
18 THE COURT: Okay.
19 I notice that just in terms of your opportunity to
20 file a reply to the other filings, that you didn't really
21 address the other movants' argument, that your client's
22 failure to disclose securities transactions for the Sklodowski
23 proposed class period rendered his motion untimely.
24 What do you have to say about it now, because I
25 didn't see you responding directly to it? Did I miss
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MOTION HEARING - September 16, 2025 10
1 something?
2 MR. APTON: Yes, Your Honor.
3 Well, I shouldn't say that.
4 THE COURT: Okay.
5 MR. APTON: Respectfully, I -- the reply brief, as
6 Your Honor knows, is limited to seven pages, --
7 THE COURT: Okay.
8 MR. APTON: -- so we have to be very careful with the
9 number of words and what we say. I do address that. There
10 was no -- on pages four and five, and six of the reply, page
11 IDs 1041 to 1043, --
12 THE COURT: So okay.
13 MR. APTON: -- we do address this notion that
14 Mr. Ferrante intentionally concealed transactions from the
15 Court; which is false. We voluntarily provided those
16 additional transactions in a supplemental declaration with our
17 opposition. That was at ECF number 39-4. And with those
18 additional transactions, Mr. Ferrante's recoverable loss
19 actually increases. It's not as if these additional
20 transactions somehow eliminated his -- his financial interest
21 in the case, or otherwise rendered him unfit to pursue
22 recovery. It actually made him more --
23 THE COURT: A little bit bolstered?
24 MR. APTON: Yeah, it did, Your Honor.
25 And so, you know, look, I understand that in this
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MOTION HEARING - September 16, 2025 11
1 situation when one movant, Mr. Ferrante, has the largest
2 financial interest in the case and appears to be adequate and
3 typical, and the presumption is vested in his favor, the other
4 movants have to come forward with proof, and so they try to
5 create arguments.
6 THE COURT: They take issue with the timeliness of
7 his disclosure. What do you have to say about that?
8 MR. APTON: I would have to say that the additional
9 transactions provided in the supplemental declaration do not
10 render him inadequate, or preclude him from serving as lead
11 plaintiff.
12 Mr. Ferrante's certification complied with the PSLRA,
13 he provided the transactions in the complaint that was on
14 file. And we cite the Ultimasa case for that point, from
15 2019, in New York. Even still, there are a number of cases
16 from cross the country where providing additional transactions
17 after the 60-day deadline does not render a movant incapable
18 or inadequate, or unfit to serve as lead plaintiff.
19 Again, these are not additional transactions that
20 conflicted with his interest or the interest of the class, at
21 all. It made his loss greater. And so, the cases where you
22 do see this becoming a problem is where additional
23 transactions come out during the course of the briefing that
24 decrease a movant's loss, --
25 THE COURT: Okay.
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MOTION HEARING - September 16, 2025 12
1 MR. APTON: -- or somehow show that he was trying to
2 conceal something intentionally. And, that's not the case
3 here.
4 THE COURT: Well, I mean clearly, they're going to
5 the adequacy of -- under Rule 23, that the plaint -- that your
6 client, as being lead plaintiff, is not capable of taking it
7 on. And the Teamsters, actually, specifically talks about
8 there was gross negligence involved in not having, you know,
9 included the information that we've been discussing.
10 How do you respond to that?
11 MR. APTON: I would say that is a gross
12 mischaracterization of what happened.
13 THE COURT: Okay.
14 MR. APTON: We have Mr. Ferrante who provided his
15 transactions for the -- the Guzman class period. Not a single
16 transaction was omitted. And none of the transactions was
17 provided in error. It's the additional class period from the
18 Sklodowski case filed two weeks before the 60-day deadline
19 that arguably created a need to disclose more, which we did,
20 in our opposition. We did not hold anything back.
21 THE COURT: Okay.
22 You have -- obviously, I know -- I mean, you're
23 opposing the -- oppose the appointment of Mr. Crippen as lead
24 plaintiff. Are there any other defenses -- I mean, you spoke
25 specifically just this morning about the Ford Blue segment and
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MOTION HEARING - September 16, 2025 13
1 how it kind of fits in there. Are there any other defenses --
2 and you believe, from what you've filed, that that puts him in
3 a position where the fact that he -- let's see.
4 I'm talking about the typicality --
5 MR. APTON: Yes.
6 THE COURT: -- requirement now. And you say that you
7 feel that that's an issue for Mr. Crippen. Can you expand on
8 that for me?
9 MR. APTON: Sure.
10 So if there's a difference, assuming there's a
11 difference between typicality and adequacy, --
12 THE COURT: I think there is. You don't see it?
13 MR. APTON: No, I do, Your Honor.
14 THE COURT: Okay.
15 MR. APTON: But I would characterize it as more of an
16 adequacy issue, because in terms of typicality, Mr. Crippen
17 certainly bought during a class period, the expanded class
18 period. He bought on the open market. He invested a
19 significant amount in Ford, so I would say he's typical of the
20 class.
21 The adequacy issue that we've raised in our briefing
22 is, well, if the Sklodowski class period is not legitimate,
23 for lack of a better word, --
24 THE COURT: Okay.
25 MR. APTON: -- then Mr. Crippen potentially has a
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MOTION HEARING - September 16, 2025 14
1 problem. But if we're going to go with the expand class
2 period, the broadest class period possible, then that's not an
3 issue that is dealt with at this stage of the proceedings.
4 It's only an issue if Your Honor thinks that on the face of
5 the pleadings, there's enough to say, yeah, we should not look
6 at the Sklodowski class period, we should focus only on
7 Guzman. But otherwise --
8 THE COURT: Do you think --
9 MR. APTON: Oh.
10 THE COURT: -- there are any other defenses that only
11 Crippen -- that are unique to Crippen, or to the punitive
12 class members who only purchased securities before April of
13 2022? What other defenses? Am I missing anything in terms of
14 --
15 MR. APTON: No, Your Honor.
16 And, Your Honor, if Mr. Crippen had a larger
17 financial interest in the case than Mr. Ferrante, I probably
18 wouldn't be here because there's no point in trying to rebut
19 that presumption that would be vested in Mr. Crippen at this
20 -- at this stage of the case.
21 I understand Teamsters has an argument about it being
22 an institution, but that's not enough to overcome that
23 presumption. There's no special provisions for institutions.
24 Notwithstanding the PSLRA's preference for institutional
25 investors, if an institution does not have larger financial
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MOTION HEARING - September 16, 2025 15
1 interest, that's it. And in this case, it's hard because the
2 Teamsters Fund is a large fund. The amount of money they
3 lost, though, percentage wise, is minuscule compared to
4 Mr. Ferrante or Mr. Crippen. So if anyone's going to be more
5 interested in pursuing this case to the fullest extent of the
6 law, it's going to be those retail, those individual investors
7 who really need that money back, not the Teamsters Fund that
8 effectively lost what amounts to what, a rounding error.
9 THE COURT: Now, I want to go back to what we talked
10 about earlier with Teamsters and what their argument is.
11 MR. APTON: Sure.
12 THE COURT: Their argument specifically is that your
13 client didn't disclose based upon the Sklodowski complaint.
14 What is your response to that?
15 MR. APTON: My response to that is that the
16 Sklodowski complaint was filed two weeks before the deadline.
17 Notices for the expanded deadline were not prevalent in the
18 marketplace. There was no intent to conceal any transactions.
19 The transactions were voluntarily provided once the issue was
20 -- was raised by the competing movants. And there was no
21 problem, so to speak, created by the additional transactions.
22 So again, they did not eliminate Mr. Ferrante's loss,
23 or even lessen it, but increased it. Mr. Ferrante would have
24 no motive to withhold transactions. And, there was no error.
25 Again, the cases cited by the Teamsters Fund all
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MOTION HEARING - September 16, 2025 16
1 involve cases where the certifications contain errors, serious
2 errors. There were no errors in Mr. Ferrante's certification.
3 It was completely in compliance with the PSLRA, providing all
4 of his transaction data for the class period. And when the
5 issue of the expanded class period was raised, of course he
6 provided the transactions. Why wouldn't he? He has more to
7 gain by pursuing the broader class period.
8 THE COURT: I'm going to talk to you in a little bit.
9 You can have a seat for now.
10 MR. APTON: Very good. Thank you, Your Honor.
11 THE COURT: I want to talk to Teamsters' counsel.
12 I'm going to give you a chance to respond to what's
13 been said in terms of -- I don't want to put words in your
14 mouth, so you give me your position on the adequacy of
15 Mr. Ferrante.
16 MR. McCONVILLE: Thank you, Your Honor.
17 THE COURT: And then, I'm going to let you -- we're
18 going to talk specifically about --
19 MR. McCONVILLE: Sure. I look forward to it again.
20 Frank McConville from Labaton, Keller, Sucharow on
21 behalf of Local 710. So there were a lot of reasons given for
22 why the initial transactions for Mr. Ferrante were not
23 included in its initial motion, but I think Your Honor hit it
24 right on the head, it was gross negligence. Because the
25 complaint that was filed that expanded --
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1 THE COURT: You said that, I didn't say it.
2 Okay. Go ahead.
3 MR. McCONVILLE: No, you repeated the words that were
4 in our papers.
5 THE COURT: I did. I did.
6 MR. McCONVILLE: And the reality is, the complaint
7 that was filed that expanded the class period is part of the
8 case now. That class period controls. That case was filed on
9 September 23rd of 2024. Mr. Ferrante signed his certification
10 for the initial class period on September 9, 2024. So query
11 whether Mr. Ferrante was even aware of the expanded class
12 period. Because if the position that Mr. Ferrante and his
13 counsel take is that the expanded class period is frivolous or
14 implausible, or shouldn't control because something nefarious
15 was happening here, well then, that should have been discussed
16 in the opening brief. In which, he had two weeks to prepare
17 to say, look, the class period that was initially filed is the
18 most plausible and controlling class period, notwithstanding
19 this additional class period. We don't think it controls, but
20 here are our transactions.
21 And the reason why I think that this is the case, as
22 counsel for Mr. Ferrante just said several times, his losses
23 go up. Why wouldn't he include transactions in a period where
24 his losses actually go up? It's to his benefit.
25 So, no, there's no --
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1 THE COURT: So what do you think the reason -- what
2 rationale do you believe?
3 MR. McCONVILLE: I don't think Mr. Ferrante was aware
4 of the longer class period.
5 THE COURT: Okay.
6 MR. McCONVILLE: Which again, goes to his adequacy.
7 And let me just point Your Honor to a new case that
8 came out earlier in 2025, where the same exact issue happened.
9 And, in fact, it was an institutional investor that failed to
10 disclose transactions in the initial class period.
11 THE COURT: Okay.
12 MR. McCONVILLE: The case is Salem versus Methode
13 Electronics it's 24-cv-07696. It's in the Northern District
14 of Illinois, and it's in front of Judge Ellis.
15 And the Court explained there was a Michigan fund
16 that failed to identify and correct their certification for
17 the controlling class period. And the Court said that,
18 enough, is evidence of inadequacy, and I will not appoint you.
19 And the Court appointed a movant with a smaller financial
20 interest, which also happened to be an institutional investor.
21 THE COURT: Okay.
22 MR. McCONVILLE: But our position on the
23 certification as we lay in -- lay out in our papers is one of
24 two things; the first being, we are -- Mr. Ferrante is
25 advocating on behalf of a shorter class period, which puts him
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1 in a position that we believe is antagonistic to the full
2 interest of the class. We think the more likely option, as
3 we've been discussing this morning, is that it's just a plain
4 error. He didn't know of the longer class period. He didn't
5 revise the certification after the new class period was filed.
6 And, he didn't include it in his initial motion. So you've
7 got to question: If Mr. Ferrante doesn't know the controlling
8 class period, how's he going to adequate -- adequately lead
9 this litigation?
10 And the point about the percentage of loss, that has
11 been widely rejected throughout the jurisprudence of PSLRA of
12 the lead plaintiff. If the metric for a financial interest
13 would be what percentage of a portfolio, you know, the loss
14 included, an institutional investor would never be appointed
15 because their portfolios are so large.
16 And on that point, I will point out that Mr. Sam
17 Pilger from Local 710 is at the hearing today, and neither of
18 the two individuals. So, you know, if the argument is if this
19 means a lot to them, why aren't they here?
20 THE COURT: Okay. All right.
21 You have asked me to look at the first two Lax
22 factors, which deal with the number of shares purchased during
23 the class period, as well as the number of net shares
24 purchased during the class period, in order for me to assess
25 who has the largest financial interest here. However, you
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1 also -- I glean from your -- really from your filings, is that
2 you're urging me to focus on only that second factor, the net
3 shares. Why is that?
4 MR. McCONVILLE: Right.
5 So in normal instances, the four Lax factors: --
6 THE COURT: Yep.
7 MR. APTON: -- total shares, net shares, net
8 expenditures, and losses, --
9 THE COURT: Right.
10 MR. McCONVILLE: -- in normal instances, the losses
11 will encapsulate the first three factors. And so, you look at
12 the loss because it's the most -- it's the truest indicator of
13 a financial interest, of the potential recovery in the class,
14 right? That's what the PSLRA is looking for.
15 In this specific case, we think that net shares is
16 the most important metric.
17 THE COURT: And I got that --
18 MR. McCONVILLE: Sure.
19 THE COURT: -- from what you were saying.
20 MR. McCONVILLE: And I'll explain why.
21 THE COURT: Yep. Yes, please.
22 MR. McCONVILLE: The pleadings before the Court,
23 there are two complaints now, both of them include only one
24 disclosure. And that one disclosure is from July of 2024.
25 There are no corrective disclosures throughout the class
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1 period, okay? Which means -- and this is based on any of the
2 cases that we cite in our papers, ECF 38, 11 to 14. When
3 there is one disclosure, courts have looked at that and
4 determined there's a constant fraud premium throughout the
5 class period.
6 THE COURT: Right.
7 MR. McCONVILLE: Now that means that each share, no
8 matter what price you buy the stock at, each share is damaged
9 that exact same amount, that amount that comes out at the end
10 of the class period. And when you combine -- so that alone --
11 we think that fact pattern alone would lend the Court to look
12 very closely at the net shares competent of the Lax factors.
13 Now, when you combine that with the way that the Ford
14 stock traded during this class period, --
15 THE COURT: Yep.
16 MR. McCONVILLE: -- and the way that Mr. Crippen --
17 because really, the net shares discussion for us is really
18 with Mr. Ferrante out with adequacy issues is our position, --
19 THE COURT: I know.
20 MR. McCONVILLE: -- would be Mr. Crippen. When you
21 look at his purchasing pattern, he buys, basically, his entire
22 position at the class period high.
23 And what do I mean by that? He bought 65,000 plus
24 shares of his 67,000 shares at $24 on January 13th of 2022.
25 The class period high for the Ford stock was the next day,
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1 January 14th of 2022, at $25. The stock, thereafter,
2 throughout the course of the class period, trades downwards
3 from that $24, where Mr. Crippen purchases, all the way down
4 to is 13.67. And there's no allegation that that 11-point
5 delta was the result of any disclosure of fraud. That is just
6 normal marketing dynamics. The stock trades up, it trades
7 down. Ford is a stock that, you know, trades at various
8 levels.
9 And so, what you need to do really closely is look at
10 his LIFO loss. We don't dispute the calculation. The
11 calculation and the math makes sense. But what we say is that
12 entire difference between that 24 and that 13 needs to be set
13 aside because it's for reasons entirely unrelated to the
14 fraud.
15 And this is pursuant to the Dura Pharmaceuticals case
16 from the Supreme Court. In order to demonstrate actual
17 damages, which is what the recovery in this case is looking
18 for, you need to show that the purchase of their shares was
19 held over a corrective disclosure.
20 And there's authority on this point, Your Honor. The
21 case Turpel v. Canopy Growth, 704 F. Supp. 3d 456, where the
22 Court looks at the exact same fact pattern: Purchases at the
23 class period high, stock trade is all the way down, holds the
24 shares, and then the stock goes down. The difference, the
25 Court said you have to put that aside because it's not
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1 recoverable under the federal securities laws.
2 So based on -- on these sort of very unique
3 circumstances, the single disclosure, Crippen's trading
4 profile, and the way Ford stock traded, we believe that the
5 relief sought by the class, which is the financial interest
6 competent of the PSLRA, is best exemplified by the net shares.
7 That's our position.
8 THE COURT: Yep.
9 MR. McCONVILLE: And again, this is not a new
10 concept.
11 Your Honor, I will read the Pio case, which I was
12 counsel for the losing movant in that case, so I'm very
13 familiar with that opinion, where the Court says, retained
14 shares more closely approximates recoverable losses, whereas
15 here, the alleged fraud was only disclosed at the end of the
16 class period and, therefore, variations and share price during
17 the class period are the result of their factors. Same
18 situation here.
19 I'll cite another case, Markett v. Xoma, 2016 West
20 Law 2902286. This is at pages five and six, where the Court
21 says: In single disclosure cases, the retained shares or the
22 net shares is more accurate than LIFO because it excludes
23 losses incurred during the class period, that are likely
24 attributable to normal market fluctuations rather than broad.
25 That's what we have here.
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1 So that is -- and I apologize if I'm being
2 longwinded.
3 THE COURT: No.
4 MR. McCONVILLE: That is sort of the explanation for
5 why we think the net shares component is really the
6 dispositive one for determining --
7 THE COURT: And I'm going to be asking counsel to
8 respond to that, too, --
9 MR. McCONVILLE: Sure.
10 THE COURT: -- so keep that in mind. I've just made
11 a note of that, so go ahead.
12 MR. McCONVILLE: No problem.
13 We think the net shares is the dispositive one.
14 THE COURT: Okay. Yep.
15 Let me ask you, you said in your response brief that
16 Crippen -- Mr. Crippen, as well as Mr. Ferrante, their -- as
17 well as their initial motion demonstrates that they're unknown
18 individuals who lack sophistication to serve as lead
19 plaintiff. You've identified in Mr. Ferrante's filing, which
20 you believe -- you've identified the defects in his pleading,
21 you've said that before, as to why that supports your
22 position. Aside from Mr. Crippen's asserted lack of
23 experience with complex and or securities class actions, what
24 about his initial motion do you feel shows his inadequacy to
25 serve as lead plaintiff?
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1 MR. McCONVILLE: Yeah. Your Honor, I think there's a
2 subtle distinction here. I don't know if I would say
3 inadequate. What I would say is he failed to trigger the
4 adequacy requirement under the PSLRA. And the reason I say
5 that is because there's a growing rubric of the requirements
6 that individuals need to show in order to trigger the most
7 adequate plaintiff presumption.
8 THE COURT: Okay.
9 MR. McCONVILLE: And we cite our case at -- we cite
10 these cases in our papers: The TG Therapeutics case, the
11 World Wrestling case, the HEXO Corp. case, where the courts
12 really look at, what sort of experience does this individual
13 have managing lawyers, demonstrating that they can be in
14 control of the lawyers in a complex litigation. Because
15 that's precisely what the PSLRA was designed for, they want
16 the lawyers to be controlled by the clients, sophisticated,
17 whether it be an individual or whether it be an institution,
18 that are really going to sit down and make sure that the case
19 is being prosecuted.
20 THE COURT: Do you cite those cases in your --
21 MR. McCONVILLE: We do.
22 THE COURT: Okay.
23 MR. McCONVILLE: And I'm happy to provide the
24 citations for you right now.
25 So TG Therapeutics is 2022 West Law 1655585; World
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1 Wrestling is 2020 West Law 2614703, and HEXO is 2020 West Law
2 905753.
3 THE COURT: Those are all cases within this circuit?
4 MR. McCONVILLE: Those are all cases in the Southern
5 District of New York, Your Honor.
6 THE COURT: Southern District of?
7 MR. McCONVILLE: New York.
8 THE COURT: Thank you.
9 MR. McCONVILLE: Apologies.
10 But again, they go to ensuring that the class is
11 protected by an -- by the leader who is going to control the
12 lawyers and push the litigation forward, who's going to be
13 able to sit at the table across from defense counsel, some of
14 the biggest firms in the world, and ensure that, you know,
15 whether it's a mediation or some other type of resolution,
16 ensure that the class is being protected in getting the most
17 money back possible.
18 And this is not -- you know, this is not just
19 hypothetical. I'll cite some statistics that have come out in
20 recent reports from Cornerstone Research, which indicates that
21 when institutional investors lead class actions, the
22 settlements are over five times larger. And when institutions
23 lead class actions, there's a 38 reduct -- a 38 percent
24 reduction in the motion to dismiss being granted.
25 So these are -- these are objective metrics that show
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1 that Congress was right, institutional investors should be the
2 lead plaintiff here. Particularly, when it's a close call.
3 If there were an individual in this case that had a
4 $5 million loss, that had experience overseeing lawyers, that
5 really looked like they were sophisticated and to -- and could
6 do a great job, we wouldn't be here today. We would say the
7 class is in good hands. But because it's a relatively close
8 call, no one has a massive financial interest here, we think
9 the case law is pretty clear that you really have to take a
10 good, hard look at what the individuals have presented in
11 their motion, and contrast that with an institutional investor
12 that has done this before, that is -- experienced fiduciary.
13 We have over -- Local 710 has over 14,000 members, four and a
14 half billion under management. They've settled cases before
15 in the multimillion-dollar range, and so we think the class is
16 really best served by having that institutional investor lead
17 the case.
18 THE COURT: Okay. And do you -- and just getting
19 back to Mr. Crippen, too, did anything else besides the --
20 that can speak to his inability to satisfy the requirements
21 set forth in Rule 23?
22 MR. McCONVILLE: Yeah. I would point to, as counsel
23 for Ferrante said, the trading that occurred prior to the
24 start of the Cruise last period, everything is in the longer
25 class period. And again, we take position that the lead
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1 plaintiff takes the longer class period controls. It's in the
2 best interest of the class. But as this happened numerous
3 times in other cases, when a class period gets shortened and
4 the lead plaintiff now no longer has a position in the case,
5 that could be a year, two years down the road, all of a
6 sudden, we need to re-open the case and find a new lead
7 plaintiff which, you know, delays the case, delay -- delays
8 the prosecution, and ultimately, is not in the best interest
9 of the class.
10 I'll point Your Honor to -- to one opinion actually
11 handling this exact same scenario, and said you need to ask in
12 management for SanDisk case. 2016 West Law 406283 where Judge
13 Chhabria, out in the Northern District of California,
14 indicated in his lead plaintiff order that he had hesitation
15 appointing one fund because they only had trading in a longer
16 period. He did so, but then when he dismissed that period, he
17 basically said in his motion to dismiss order, I should have
18 used the shorter period because now I need to appoint a new
19 lead plaintiff.
20 THE COURT: Okay. All right.
21 One -- okay. We've covered it. All right. Thank
22 you.
23 MR. McCONVILLE: Thank you, Your Honor.
24 THE COURT: I'm going talk to counsel for
25 Mr. Crippen. I'm going to give you an opportunity this
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1 morning, Counsel, to just go right in it, and tell me how you
2 feel about the perspective, and the statements that have been
3 made regarding your client not being adequate to serve as lead
4 plaintiff.
5 MR. ALBERT: Your Honor, the only attack to my
6 client's adequacy that I've heard so far is some suggestion
7 that we manipulated the class period.
8 THE COURT: That you?
9 MR. ALBERT: That we manipulated the class period.
10 And I mean, that's just false.
11 THE COURT: Okay.
12 MR. ALBERT: Really, the two issues, I think, are
13 before the Court are which of the proposed class periods to
14 use, and what's the appropriate metric for financial interest.
15 THE COURT: Let me just ask you a question.
16 MR. ALBERT: Sure.
17 THE COURT: Have you -- have you had an opportunity
18 to speak to Sklodowski's attorney?
19 MR. ALBERT: We did.
20 THE COURT: Do you know why this filing is
21 encompassing -- goes beyond the initial class period of
22 Guzman? Why? Do you understand why?
23 MR. ALBERT: I understand why the case supports the
24 longer class period, but I don't know what Sklodowski's
25 counsel, what their rationale was.
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1 THE COURT: Okay. Go ahead. You can go ahead then.
2 You said the two most important things?
3 MR. ALBERT: I was just going to say that I think the
4 PSLRA provides a very clear three-step process for appointing
5 a lead plaintiff. And in this case, it really burns on two
6 main questions that Your Honor has been asking counsel about.
7 The first thing is longer class period versus shorter class
8 period, and the second -- the second key issue is how do you
9 gauge larger financial interest.
10 THE COURT: Okay.
11 MR. ALBERT: Your Honor, on -- on the first issue of
12 class period, not only does the law support -- overwhelmingly
13 support using the most inclusive class period, because at this
14 stage of the litigation, it incorporates more class members,
15 it increases Plaintiff's claim, and it's just overall good for
16 the case. But specifically, in this case, it makes sense as
17 well, for the reasons we've described in our papers.
18 And I'm happy to get into those if you'd like, Your
19 Honor.
20 But the second, I think, more critical question is
21 how you measure financial interest. All movants set forth
22 their financial interest using LIFO loss. The ultimate goal
23 of this litigation is to recover the losses suffered by
24 investors. And that's the dominant approach within the
25 Sixth-- and District courts within the Sixth Circuit.
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1 And I would point Your Honor to the FirstEnergy case
2 where Judge Marbley really meticulously analyzes this from
3 start to finish.
4 And, Your Honor, I think the reason why we're here
5 and even debating this is because of Your Honor's decision in
6 General Motors. And, the General Motors' case was so
7 distinguishable for several reasons, but the movants were
8 setting forth their losses using different metrics. In each
9 brief, from the opening to the opposition, to the reply, the
10 metrics kept changing.
11 Here, everyone agrees --
12 THE COURT: Yeah.
13 MR. ALBERT: -- on the LIFO numbers. There's no
14 dispute, like, if you add this number. The only real question
15 is whether in this case we should -- we should look to the
16 other factors.
17 And for the reasons that I think Judge Marbley talks
18 about in FirstEnergy, those other factors, which serve as a
19 proxy for loss, are just simply not necessary when we all
20 agree on -- on loss.
21 THE COURT: Okay.
22 MR. ALBERT: And if I may, Your Honor, I just wanted
23 to address a few -- a few points that the other counsel have
24 made against --
25 THE COURT: For Mr. Crippen?
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1 MR. ALBERT: -- our motion. Yes.
2 THE COURT: Okay.
3 MR. ALBERT: I think Teamsters 710's counsel has a
4 very hard position to kind of toe here because on one hand,
5 you know, they're saying that Mr. Ferrante, for example,
6 should have alluded to the class period issues in his opening
7 motion, and if he wasn't going to provide the trading for the
8 longer class period, he should have said it in his opening
9 motion. But if -- if net shares purchased is the end all and
10 be all of financial interest, why didn't they talk about it in
11 their opening motion? None of the facts of the case changed.
12 There's one corrective disclosure alleged, and if that was
13 their position, they should have addressed it then and there.
14 Along those same lines, counsel for Teamsters 710
15 talks about, well, courts routinely reject this percentage of
16 the portfolio argument that Mr. Ferrante's counsel made with
17 respect to retail investors versus institutional investors.
18 Namely, that retail investors lost a bigger percentage of
19 their portfolio so that, you know, they're going to care about
20 the case more. And it's true that that's an outlier position
21 that's been rejected by courts, but so has this idea that net
22 shares purchased is the end all, be all. It's approximately
23 the same amount of courts that have -- that after they look at
24 the percentage of the portfolio, they could find -- they find
25 losses. I'm sorry, they find net shares purchased determined.
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1 And the reason for that, Your Honor, is because in
2 these cases, we're at the very beginning stage. And Your
3 Honor really discusses this in Pio versus General Motors,
4 where he talked about, look, this is the beginning of the
5 case, a lot of things are going to change in the case, and
6 there's not supposed to be this huge analysis on the merits --
7 of the merits at this stage. That's not to say, Your Honor,
8 that, don't look at the merits.
9 If you want to talk about potential credit --
10 corrective disclosures in the case, Ford -- Ford releases
11 information about its warranty information -- I'm sorry, about
12 its product defect issues pretty -- pretty regularly. There
13 are a lot of disclosures in the case, a lot of announcements
14 in the case about -- about the issues that affected -- that
15 affected investors here. So I think it's -- it's very
16 premature to just say we only look at -- you know, we look at
17 net shares purchased because there's one end-of-class rate
18 disclosure.
19 THE COURT: Let me ask you something just in terms
20 of, I'm just still trying to flush out more of the adequacy
21 arguments that have been raised in looking, really, at Rule
22 23. I'm comfortable in knowing that the LIFO method,
23 everybody agrees on that. And so, there -- I am looking at
24 these other factors, and I want you to, with counsel who just
25 was speaking -- who was that? That was Mr. --
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1 MR. McCONVILLE: McConville.
2 THE COURT: Thank you, Mr. McConville.
3 -- was talking about, you know, what courts are
4 looking to for purposes of selecting the lead plaintiff,
5 understanding that you do need to have a savvy plaintiff who
6 can really work with the lawyers, and that there's a
7 management required -- requirement of the lawyers.
8 Can you speak to that and, you know, your client's
9 ability to do that? And what kind of experience has he had
10 that would place him in the position to execute what many
11 courts have found to be an important factor?
12 MR. ALBERT: Sure, Your Honor.
13 And, Your Honor, it's true what Mr. McConville said,
14 that the PSLRA's legislative history shows a preference for
15 institutional investors. But the statute's plain text, it
16 makes clear that the preference is expressed through the
17 financial interest requirement. It's not a factor -- they
18 don't get extra credit for being an institutional investor.
19 That really goes to the heart of the Teamsters 710's position
20 here.
21 THE COURT: I'm not talking about that, though. I'm
22 talking about specifically whether or not, in terms of the
23 adequacy of your client serving as lead plaintiff, would he be
24 able to -- you know, is there something in his prior
25 experience that would, you know, speak to his ability to
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1 manage counsel. And that -- that is something that has
2 emerged.
3 Has he done that before? Has he had to ensure that a
4 class's interest are being protected? Does he have the
5 experience that Mr. McConville has explained, and cited cases
6 of, in support of the fact that courts are viewing a lead
7 plaintiff's responsibility to include just that.
8 What about Mr. Crippen's experience -- because it
9 wasn't anywhere in the materials that I viewed, -- that speaks
10 to his experience to be able to do that?
11 MR. ALBERT: Sure, Your Honor.
12 THE COURT: Okay.
13 MR. ALBERT: So Mr. Crippen has about 30 years of
14 experience of federal service. He -- he worked for the Coast
15 Guard -- he worked for the Coast Guard, and then he's a
16 Vietnam War vet --
17 THE COURT: Yep.
18 MR. ALBERT: -- veteran. I believe he has experience
19 overseeing counsel in routine matters. I do not believe that
20 he has experience overseeing groups of lawyers in connection
21 with complex securities litigation. But that goes back to the
22 statute, Your Honor. They would have made it a requirement
23 for an institutional -- for a movant to be an institution if
24 that's what they wanted, Your Honor.
25 I would also say that the Southern District of New
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1 York cases pointed to by Mr. McConville, they look at -- they
2 look at the errors in the filings of these individuals. And
3 then, as an additional reason for not appointing them, they
4 say, hey, this person made errors out the gate, and in
5 addition to that, you know, we don't have any indication of
6 their sophistication.
7 THE COURT: Right.
8 MR. ALBERT: But sophistication isn't -- like, you
9 can't exclude someone from overseeing a case because they
10 haven't managed a securities class action or an anti-trust
11 class action, or -- Mr. Crippen is eminently qualified.
12 THE COURT: Okay. Hang on a second. I want to make
13 sure I've asked everything I want to ask in terms of the
14 typicality or the adequacy issue.
15 MR. ALBERT: Your Honor, and if I just may say one
16 more thing.
17 THE COURT: Yeah.
18 MR. ALBERT: The statute requires a prima facie
19 showing of typicality and adequacy. It doesn't require an
20 evidentiary test of this person's qualifications to manage
21 groups of lawyers.
22 THE COURT: How do you -- okay. I appreciate that.
23 How do you respond to the issue of all of the -- the
24 purchasing that your client did on one date, and they were
25 purchased at a high level, high amount? How do you respond to
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1 that being -- that's factual, right?
2 MR. ALBERT: It's absolutely factual.
3 THE COURT: Okay.
4 And so, do you feel -- you've heard other counsel
5 complain about that and object to that, and to talk about -- I
6 mean certainly, his interest are -- can be viewed differently
7 in terms of if we were to look at an expanded class period.
8 How can he speak to that? Does he even have losses there?
9 Does he have, you know -- and, it's been raised, the word has
10 been used, "self-interest." How do you respond to that?
11 MR. ALBERT: Your Honor, the typicality requirement
12 does not -- does not require some sort of diverse trading
13 pattern. As Mr. Apton conceded, my client purchased within
14 the longer class period, just like everyone else did.
15 Essentially, what both competing movants --
16 particularly, Teamsters 710 is doing, is they're inviting a
17 beauty contest. They're saying, hey, you purchased on a
18 Wednesday instead of a -- instead of Tuesday. Hey, look, we
19 have three purchases, you have one purchase.
20 The statute provides a very clear three-step process,
21 Your Honor. And again, if it wasn't for the General Motors
22 case, which is distinguishable on the facts, and which -- it's
23 like the saying, bad facts makes bad loss sometimes. This is
24 a very simple process.
25 You look to law. Like over 95 percent of courts,
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1 Your Honor, since -- in the 30 years of the PSLRA's
2 jurisprudence, there's about 200 cases a year. What's that,
3 like, 5- or 6,000 cases? Over 90 percent of them, you look at
4 LIFO loss, you identify the movant that has the largest
5 financial interest, and then you see if that movant made a
6 prima facie showing of typicality and adequacy. And if they
7 did, the other movants could advance to rebut it, using proof,
8 Your Honor, not speculation. There's no freewheeling beauty
9 contest where it's, hey, we have this many billions under
10 assets under management, we've recovered this amount for
11 shareholders.
12 Mr. McConville lists all these statistics about
13 institutional investor recoveries. I can stand up here and
14 say, well, Your Honor, you know, Mr. Crippen is the most
15 qualified movant because he hired the law firm that recovered
16 70 percent of all -- of all dollars recovered last year in
17 securities litigation. That's from the ISS Securities Class
18 Action Report from last year. But that doesn't matter if we
19 have the presumption, and it can't be rebutted.
20 THE COURT: Okay. Anything else you want to say at
21 this point?
22 MR. ALBERT: No, Your Honor, unless Your Honor has
23 any other questions.
24 THE COURT: Not right now. I'm going to ask a group
25 question, so -- well, maybe you can. Let me see. Let me give
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1 -- let me just check.
2 Okay. Are there any -- let me ask you while you're
3 here. You have taken the position -- what is specifically
4 your position on -- you believe that the -- you don't have an
5 objection to using the expanded class period; yes, or no?
6 MR. ALBERT: I do not have an objection, I believe
7 the longer class period --
8 THE COURT: Is the one to you?
9 MR. ALBERT: -- is necessary.
10 THE COURT: Okay. Okay.
11 Are there any -- anything else that you have -- is
12 there something that you have not yet addressed in terms of
13 whether or not -- when you look at the allegations that have
14 been set forth in the pleadings, do you feel -- and you've
15 addressed this, but I want to just hear it one more time, just
16 in terms of the material, misstatements, or omissions that you
17 believe existed, or others believe that existed, do you
18 believe that any of those omissions or state -- misstatements
19 support using the longer class period correctly?
20 MR. ALBERT: Yes, Your Honor. The --
21 THE COURT: Okay. Speak to that.
22 MR. ALBERT: The longer class period includes two key
23 financial reports and the shorter period doesn't.
24 THE COURT: Okay.
25 MR. ALBERT: It's Ford's 3-Q 2021, Form 10-Q. That
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1 was filed on October 28th, I believe, 2021. And then the full
2 year 10-K filed on February 4, 2022.
3 The all -- the allegations are that these reports
4 were the beginning of the allegedly misleading course of
5 conduct. And while these filings, they disclosed certain
6 warranty accruals, they're alleged to be materially misleading
7 because they failed to disclose the known underlying
8 deficiencies in the quality control, and the true escalating
9 costs of those -- of those issues.
10 And the factual basis for including this, I think, is
11 pretty strong. We laid out in our papers, the -- when
12 everything was ultimately disclosed in 2024, they were
13 explicitly attributable, by Ford's own management, to problems
14 with the 2021 model years. Issues that the company admitted
15 that they -- that, quote, "could have been detected at
16 launch." Therefore, the financial statements issued during 20
17 -- 2021 and 2022, which were the first to reflect the
18 financial impact of those defective models, they were
19 misleading for omitting this important information.
20 THE COURT: All right. Anything else you want to
21 say?
22 MR. ALBERT: No, Your Honor.
23 THE COURT: Okay.
24 MR. ALBERT: Thank you very much.
25 THE COURT: All right. I'm going to give counsel for
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1 Teamsters, and then for Mr. Ferrante, an opportunity to
2 respond, and then I'll take it from there. I've got a couple
3 group questions.
4 MR. McCONVILLE: Thank you, Your Honor.
5 THE COURT: Clean up, yeah.
6 COUNSEL'S FOLLOW-UP RESPONSE
7 MR. McCONVILLE: Unless you have any specific
8 questions, I'll go ahead and respond.
9 THE COURT: Nope, go ahead.
10 MR. McCONVILLE: So the point about Local 710 sort of
11 shifting gears in the loss analysis is just a blatant
12 mischaracterization of what we actually put in our brief.
13 THE COURT: Let me stop you. I want you to address
14 the last question.
15 MR. McCONVILLE: Sure.
16 THE COURT: Yeah, I want everyone to address that
17 question.
18 MR. McCONVILLE: So the last question about the class
19 period?
20 THE COURT: Yeah.
21 MR. McCONVILLE: Yeah, we agree with counsel for
22 Crippen, that the class period that protects the longest --
23 the largest possible class of investors should be the
24 controlling class period at this stage of the litigation.
25 That said, we do think that there's a significant
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1 risk that that class period will get cut, for reasons that
2 Mr. Ferrante has stated. And if that were to happen, again,
3 Mr. Crippen has no trading in the operative class period.
4 THE COURT: Okay.
5 Okay. You can go ahead.
6 MR. McCONVILLE: Sure.
7 Just really quickly about the shifting gears analysis
8 for the loss -- the financial interest. We put in our opening
9 brief the four Lax factors. At no point did we say the LIFO
10 loss is a controlling loss. We stated total shares, net
11 shares, expenditures, and losses. It was only after seeing
12 Mr. Crippen's trading pattern, which, again, is very unique,
13 and purchases basically entire position at class period high,
14 did we realize that the LIFO calculation is just not a
15 reliable metric. We're not disputing his LIFO calculation.
16 THE COURT: Okay.
17 MR. McCONVILLE: That's right, the math is correct.
18 It's just not a reliable metric for determining the relief
19 sought by the class.
20 And I'll point to Your Honor's order in Pio because I
21 don't think it's distinguishable at all. That case had one
22 disclosure, and the movants in that case jockeyed about with
23 the various ways to calculate losses. They did a retained
24 share analysis, they did a -- you know, an analysis of LIFO.
25 They did this, they did that. But -- and I remember because I
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1 was in the courtroom for the Court's hearing on that, the
2 parties agreed, counsel for New York teachers, and counsel for
3 Menora agreed that the LIFO calculations was correct math. So
4 it's not like we're disputing the math, it was that they
5 turned the loss into an apples-to-orange comparison. And
6 because of that, the first three Lax factors were a more
7 objective metric to determine financial interest.
8 We would -- we would proffer that as the exact same
9 case here. We don't think the LIFO calculation is an -- is a
10 reliable determination of financial interest because of the
11 way the stock traded, and because of where Mr. Crippen
12 purchased it.
13 THE COURT: Okay.
14 MR. McCONVILLE: The other point I'll make about the
15 FirstEnergy case, the Owens case, which counsel for
16 Mr. Crippen relies on, that case had multiple corrective
17 disclosures, which entirely eliminates the utility of net
18 shares. We will concede that. It's just not the scenario
19 here. Here, is one corrective disclosure.
20 The final point I'll make, Your Honor, on this idea
21 of adequacy and way -- and the ways in which individual
22 investors need to demonstrate adequacy to trigger the prima
23 facie presumption. I think the reason why courts are really
24 sort of drilling down and really taking a rigid hard look at
25 these applications is because individual investors, people are
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1 inherently unpredictable. And you don't want to get in a
2 situation where you have a case three years down the road
3 where, God forbid, someone gets sick or something happens.
4 I'll point to a very recent case in the Southern
5 District of New York. Christian versus Spectrum
6 Pharmaceuticals, 2025 West Law 2234041, where the court was
7 forced to re-open the entire lead plaintiff after three years
8 of litigation because the individual who was lead plaintiff
9 was contacting defendants personally, outside the presence of
10 counsel.
11 I'm not saying either Mr. Ferrante or Mr. Crippen
12 would do that. They seem like they have very good intentions
13 to lead this class action. All I'm doing as counsel for Local
14 710 and the punitive class, is ensuring that the class is in
15 the best hands possible to maximize recovery, and ensure that
16 there is a settlement or some sort of, you know, resolution at
17 trial for the benefit of the class.
18 And there's enough data, there's enough statistics
19 out there to really take a hard look and say, okay, which is
20 the best option to serve as the lead plaintiff of the class.
21 THE COURT: Okay. Thank you. Appreciate it.
22 MR. McCONVILLE: Thank you, Your Honor.
23 THE COURT: Counsel, before you --
24 MR. APTON: Hello, Your Honor.
25 THE COURT: Yeah, before you start, I want to just
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1 get from you, also what your position is in terms of -- as
2 relates to your client, what do you feel is the appropriate
3 period for the Court to focus on? What is the appropriate
4 class period? And to what extent do you think that any of the
5 material, misstatements, or omissions that have been alleged
6 in the complaint, do you feel that those support a longer
7 class period? Do you see a connection between the alleged
8 misstatements and misrepresentations on behalf of Ford, do you
9 see any of those being -- providing support for the use of the
10 Sklodowski period?
11 MR. APTON: No, based on what's currently in the
12 papers.
13 THE COURT: Okay.
14 MR. APTON: Again, the case could -- could turn a
15 different way.
16 THE COURT: Yep.
17 MR. APTON: Whomever Your Honor appoints as lead
18 plaintiff may expand or shorten the class period, but based on
19 what's currently before the Court, Guzman's class period.
20 THE COURT: Okay.
21 MR. APTON: Your Honor, counsel for both, especially
22 Teamsters, is very focused on the notion that my client made
23 an error. He uses the words "gross negligence." I disagree
24 fully with that.
25 Even if there was an error, though, it was promptly
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1 corrected, and the case law says that that's okay.
2 THE COURT: Mm-hmm.
3 MR. APTON: The case that Mr. McConville cited,
4 Methode Electric, that involved a scenario in which the
5 certification contained errors and was not corrected. The
6 cases, respectfully, that this Court should look at for
7 guidance would be Chill v. Green Tree Financial Corp., 181
8 F.R.D. 398, at 411. That's from Minnesota, in 1998, which is
9 about 20 years ago, but the same rule still stands to this
10 day.
11 I'll refer the Court to Silver Wheaton from CD of
12 California, 2017. 2017 WL 2039171, at 10. Same holdings
13 still applies. This is not a novel concept. It is part of
14 the law on this particular issue. It has been this way for
15 the past 20 plus years.
16 Mr. McConville knows this. In the Estee Lauder case
17 in which he has in Southern District of New York, he just
18 filed an errata correcting a certification. That's
19 23-cv-10669, docket entry 55, September 2024.
20 The point is, is what Mr. Ferrante did was not
21 grounds to reject his motion. This issue of the expanding
22 class period came to light, he provided the transactions right
23 away, there was nothing nefarious about it, and there was
24 nothing that could create any sort of conflict based on the
25 information that he did openly disclose.
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1 Mr. Ferrante wants to be the lead plaintiff in this
2 case. He's been investing in securities for 21 years. He's a
3 business owner. He owns graphics and pin striping facilities
4 at auto dealers. He is not a stranger to litigation, for
5 better or worse. Being in business for that amount of time,
6 he has dealt with litigation. He also has a significant real
7 estate portfolio. So he has litigation and transactional
8 legal experience.
9 And finally, Your Honor, this is his money, almost a
10 million dollars that he lost from his personal portfolio. If
11 anyone in this room is most concerned about getting the money
12 back, it is him. It is not the representative from the
13 Teamsters Fund who is treating this as a nine-to-five job,
14 which is why he's here.
15 Mr. Ferrante has other issues to deal with,
16 especially in light of the significant loss that he incurred.
17 Thank you, Your Honor.
18 THE COURT: Okay. Let me ask representatives from
19 Ford, is there anything you would like to place on the record?
20 MR. SICILIANO: No.
21 Obviously, we strongly disagree with any class
22 period, and believe there weren't any false or misleading
23 statements, nor did the defendant act in that, but the time
24 for that is later.
25 THE COURT: Okay. Fair enough.
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1 All right. Let me ask counsel to put their heads
2 together and think about this. But I would like to know what
3 you all would consider to be the next step forward. I mean,
4 obviously, I'll be ruling. So we know that's going to take
5 place, but once I have rendered my decision as to who should
6 be appointed as lead plaintiff and counsel, would counsel
7 prefer to confer and then submit a proposed stipulated order?
8 Maybe this isn't the right time for you all to do that, or --
9 you know, with deadlines for the lead plaintiff's filing of
10 the amended complaint. Because I would assume -- I'm
11 assuming, maybe that's an assumption I should not make, but --
12 oh, you all have already talked about it. Look at you.
13 MR. APTON: Your Honor, we're all going to say the
14 same thing, Your Honor.
15 THE COURT: What are you all going to say?
16 MR. APTON: We're all going to say that we would ask
17 for 14 days to meet and confer with defense counsel and submit
18 a stipulation with the schedule.
19 THE COURT: After my order?
20 MR. APTON: Correct, Your Honor.
21 MR. ALBERT: I'm sorry, not to disagree with Mr.
22 Apton, but I would just like to point, Your Honor, I believe a
23 stipulation has already been entered.
24 MR. SICILIANO: That's correct, Your Honor.
25 THE COURT: Good.
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1 MR. SICILIANO: It's actually Docket Number 6 that
2 was entered on September 7, 2024.
3 THE COURT: And what did you all stipulate to?
4 MR. SICILIANO: It's self-executing, such that when
5 you do appoint lead plaintiff and lead counsel, that lead
6 plaintiff will have 60 days to file an amended complaint, --
7 THE COURT: Okay.
8 MR. SICILIANO: -- and then we would have 60 days to
9 file a motion in response.
10 THE COURT: Okay. Well, I missed that. I would have
11 to say that in preparing and reading, I missed that. That's
12 excellent. Very good. I appreciate your having thought that
13 through.
14 Okay. Any -- any final thoughts? The mic is open.
15 Open mic.
16 MR. ALBERT: Your Honor.
17 THE COURT: Just state your name again.
18 MR. ALBERT: Sorry, this is Michael Albert on behalf
19 of Mr. Crippen.
20 THE COURT: Yep.
21 MR. ALBERT: I wasn't happy with the response I gave
22 you after Mr. Crippen's bonafides, --
23 THE COURT: Yeah.
24 MR. ALBERT: -- after looking at his declaration one
25 more time, and that's Docket Number 33-5, I can confirm that
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1 he is familiar with selecting and overseeing counsel. He has
2 approximately 30 years of investment experience, and he served
3 as the Vice Chair of the Stafford County Electrical Board. I
4 just wanted to close with that.
5 THE COURT: Okay. Fair enough.
6 MR. ALBERT: Thank you, Your Honor.
7 THE COURT: All right. Anyone else? All set?
8 What was the docket number? You said ECF number 35
9 for Mr. Crippen's counsel?
10 MR. ALBERT: 33-5.
11 THE COURT: Okay. Thank you.
12 MR. ALBERT: Page ID 674.
13 THE COURT: Okay. That's the page ID.
14 LAW CLERK: I'm checking, and it's not listed as
15 that. 33-5 is Mr. Crippen's declaration.
16 MR. ALBERT: That's what I was referring to.
17 LAW CLERK: I'm talking about the proposed order.
18 MR. SICILIANO: Yeah, it's ECF Number 6, filed on
19 September 7, 2024.
20 THE COURT: Okay. Thank you.
21 I'm sorry.
22 MR. ALBERT: I apologize.
23 THE COURT: That was my fault, actually. I thought
24 we were asking that question as well, yeah.
25 Is it there, correct?
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1 You got a note back saying that it was accepted?
2 MR. SICILIANO: We did.
3 THE COURT: Okay. That's really all we need to know
4 then.
5 All right. Counsel, I appreciate your time here
6 today, it was informative. And, I will be ruling shortly, all
7 right?
8 MR. ALBERT: Thank you, Your Honor.
9 MR. APTON: Thank you, Your Honor.
10 THE COURT: All right. Thank you, have a great day.
11 LAW CLERK: Court's in recess.
12 (The proceeding was adjourned at 11:09 a.m.)
13 * * *
14 C E R T I F I C A T E
15 I certify that the foregoing is a correct transcription of
16 the record of proceedings in the above-entitled matter.
17
18 S/ Shacara V. Mapp 09/17/2025
19 Shacara V. Mapp, Date
20 CSR-9305, RMR, FCRR, CRR
21 Official Court Reporter
22
23
24
25
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