Lee v. Quantum Corporation et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 25-cv-02770-PAB-CYC
SEUNG LEE, Individually and on Behalf of All Others Similarly Situated,
Plaintiff,
v.
QUANTUM CORPORATION,
JAMES J. LERNER,
KENNETH P. GIANELLA, and
LAURA NASH,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
Cyrus Y. Chung, United States Magistrate Judge.
Before the Court are three competing motions for appointment as lead plaintiff and for
approval of lead counsel in this putative class action: Motion of Hunsu Son for Appointment as
Lead Plaintiff and Approval of Lead Plaintiff’s Selection of Counsel, ECF No. 13; Motion of
Rick Scharff for Appointment as Lead Plaintiff and Approval of Co-Lead Counsel, ECF No. 16;
and Motion of Chandruakanthan Sathasivam for Appointment as Lead Plaintiff and Approval of
Lead Counsel, ECF No. 17. Since filing their motions, Chandruakanthan Sathasivam and Rick
Scharff have each filed notices informing the Court that they do not have the largest financial
interest in the relief sought and, therefore, do not oppose Hunsu Son’s motion. ECF Nos. 21 and
22. However, the Court must still satisfy itself that Mr. Son should be appointed lead plaintiff
under the appliable law. As discussed below, the Court finds that Mr. Son is the most adequate
plaintiff and, therefore, grants his motion and denies the motions of the other two contenders.
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ANALYSIS
The Private Securities Litigation Reform Act (“PSLRA”) specifies the “procedure that
governs the appointment of lead plaintiffs in ‘each private action arising under [the Exchange
Act] that is brought as a plaintiff class action pursuant to the Federal Rules of Civil Procedure.’”
In re Ribozyme Pharm., Inc. Sec. Litig., 192 F.R.D. 656, 657 (D. Colo. 2000) (quoting 15 U.S.C.
§ 78u-4(a)(1)). The PSLRA requires that “[n]ot later than 20 days after the date on which the
complaint is filed, the plaintiff or plaintiffs shall cause to be published, in a widely circulated
national business-oriented publication or wire service, a notice” advising members of the
purported class of “the pendency of the action, the claims asserted therein, and the purported
class period,” as well as the deadline for moving to serve as lead plaintiff (60 days from the
notice’s publication). 15 U.S.C. § 78u-4(a)(3)(A)(i). That notice was published on September 4,
2025. ECF No. 14-4 at 2–4. Within 90 days of the notice’s publication, “the court shall consider
any motion made by a purported class member in response to the notice . . . and shall appoint as
lead plaintiff the member . . . the court determines to be the most capable of adequately
representing the interests of the class members.” 15 U.S.C. § 78u-4(a)(3)(B)(i).
Under the PSLRA, the “person or group that (1) either filed the complaint or made a
motion in response to a notice, (2) has the largest financial interest in the relief sought, and (3)
otherwise satisfies the requirements of Fed. R. Civ. P. 23” is presumptively the “most adequate
plaintiff.” Medina v. Clovis Oncology, Inc., No. 15-cv-02546-RM-MEH, 2016 WL 660133, at *3
(D. Colo. Feb. 18, 2016) (citing 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)). “Though the PSLRA
nominally requires courts to consider whether Federal Rule of Civil Procedural 23’s
requirements have been satisfied, only two of Rule 23’s four requirements—typicality and
adequacy—are relevant in the context of lead plaintiff appointments.” Kalera v. Modivcare, Inc.,
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No. 25-cv-00306-GPG-KAS, 2025 WL 3146033, at *2 (D. Colo. Oct. 27, 2025) (citing Wolfe v.
AspenBio Pharma, Inc., 275 F.R.D. 625, 627–28 (D. Colo. 2011)). “Typicality exists where the
injury and the conduct are sufficiently similar.” Wolfe, 275 F.R.D. at 628 (quotation marks
omitted). “The requirement of adequacy is satisfied on proof of (1) the absence of potential
conflict between the named plaintiffs and the class members and (2) that counsel chosen by the
representative parties is qualified, experienced and able to vigorously conduct the proposed
litigation.” Id. (quotation marks omitted).
Here, Hunsu Son is presumptively the most adequate plaintiff. Mr. Son unquestionably
has the largest financial stake in this case of those who have come forward. See ECF No. 14-3 at
2; ECF No. 23 at 1. Mr. Son’s loss far exceeds that of the other two potential plaintiffs, which
they recognized, ECF Nos. 21 and 22, and Mr. Son made a motion in response to the notice, ECF
No. 13. Mr. Son also satisfies the requirements of Fed. R. Civ. P. 23. The record indicates that
Mr. Son’s claims are typical of those of the purported class members. Specifically, Mr. Son and
members of the purported class allege that they purchased or acquired shares of Quantum
Corporation between November 15, 2024 and August 18, 2025 at prices that were artificially
inflated because of misrepresentations in Quantum Corporation’s financial statements and other
public documents and suffered losses as a result. Mr. Son also satisfies the adequacy
requirement; there is no indication in the record of a potential conflict between Mr. Son and the
members of the purported class.
When these prerequisites are met, the presumption created by the statute may be rebutted
only by proof that the presumptively most adequate plaintiff “will not fairly and adequately
protect the interests of the class” or “is subject to unique defenses that render such plaintiff
incapable of adequately representing the class.” 15 U.S.C. § 78u–4(a)(3)(B)(iii)(II)(aa) & (bb).
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There is no evidence in the record that Mr. Son will not fairly and adequately protect the interests
of the class or might raise “unique defenses that may render [Son] inadequate because such
defenses are likely to usurp a significant portion of the litigant’s time and energy,” Wolfe, 275
F.R.D. at 628–29 (quotation marks omitted), and his motion affirmatively states that he is not
aware of any such defenses. ECF No. 13 at 10.
Based on this analysis, Hunsu Son is presumptively the most adequate plaintiff to
represent the interests of the purported class. In addition, no objection to Mr. Son’s motion has
been filed within the time allowed by law. To the contrary, the challengers both recognized that
Mr. Son was presumptively the most adequate plaintiff, and do not oppose Son’s motion. ECF
Nos. 21 and 22. As a result, the presumption has not been rebutted. Accordingly, the Court will
appoint Hunsu Son as Lead Plaintiff.
Once selected, “[t]he most adequate plaintiff shall, subject to the approval of the court,
select and retain counsel to represent the class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). “[A]pproval of
lead counsel is a matter within the discretion of the Court.” Kalera, 2025 WL 3146033, at *2
(quotation marks omitted). “In exercising this discretion, the Court must determine whether the
proposed lead counsel are qualified, experienced, and able to vigorously conduct the proposed
litigation.” Id. (quotation marks omitted). “The Court will only disturb the lead plaintiff’s choice
of counsel when necessary to fairly and adequately protect the interests of the class.” Armbruster
v. Gaia, Inc., No. 22-cv-03267-NYW-STV, 2023 WL 2613817, at *4 (D. Colo. Mar. 23, 2023).
Mr. Son has demonstrated that The Rosen Law Firm, P.A. is “qualified, experienced and able to
vigorously conduct the proposed litigation.” In re Ribozyme, 192 F.R.D. at 659; ECF No. 14-4 at
2–25. This includes extensive experience in securities litigation and class actions, including cases
filed in this District. See, e.g., ECF No. 14-4 at 23 (identifying Armbruster v. Gaia, Inc., No. 22-
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cv-03267-NYW-STV). As a result, the Court will grant Mr. Son’s request to appoint The Rosen
Law Firm, P.A. as Lead Counsel in this case.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED that the Motion of Hunsu Son for
Appointment as Lead Plaintiff and Approval of Lead Plaintiff’s Selection of Counsel, ECF No.
13, is GRANTED.
It is further ORDERED that Hunsu Son is appointed as Lead Plaintiff and The Rosen
Law Firm, P.A. is appointed as Lead Counsel.
It is further ordered that the Motion of Rick Scharff for Appointment as Lead Plaintiff
and Approval of Co-Lead Counsel, ECF No. 16, and the Motion of Chandruakanthan Sathasivam
for Appointment as Lead Plaintiff and Approval of Lead Counsel, ECF No. 17, are DENIED.
Entered this 26th day of November, 2025, at Denver, Colorado.
BY THE COURT:
____________________________________
Cyrus Y. Chung
United States Magistrate Judge
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