What to do when a federal judge appoints you as lead plaintiff, but another lead plaintiff movant's attorney as lead counsel?

You ask the Court of Appeals for a writ of mandamus, of course.

Nearly 11 months ago, Judge James Ware, appointed two separate movants (Roberto Cohen and New Jersey Carpenters Pension and Annuity Funds) as co-lead plaintiffs in the NVIDIA Corporation (Nasdaq: NVDA) securities litigation, and Milberg LLP and Girard Gibbs LLP as co-lead counsel. Only one problem - Girard Gibbs was counsel for one of the unsuccessful movants, and Mr. Cohen's chosen counsel, Kahn Gauthier Swick, LLC (n/k/a Kahn Swick & Foti) was left out in the cold.

Cohen, and his original counsel, filed a motion, asking Judge Ware to reconsider his decision, and Judge Ware denied the motion. Cohen then filed a petition for a writ of mandamus with the Ninth Circuit, which was granted.

The Court of Appeals, in a surprisingly sharped worded opinion, reversed Judge Ware's selection of lead counsel, ordering him to vacate his order appointing Girard Gibbs as co-lead counsel. The Court did not go as far as Cohen and Kahn Swick desired, leaving it up to Judge Ware solely to approve or disapprove of Cohen's selection of counsel.

Citing extensively to the Ninth Circuit's prior opinion in In re Cavanaugh, 306 F.3d 726 (9th Cir. 2002), the Court noted that while "the PSLRA's provisions on selection of lead plaintiff and lead counsel, although containing many requirements, are 'neither overly complex nor ambiguous," and notes that the most adequate plaintiff (or, the putative lead plaintiff) is "the actor that 'select[s] and retain[s]' class counsel. Although this power is subject to court approval and is therefore not absolute, it plainly belongs to the lead plaintiff."

The Court goes on to note:

Nor does the statute, framed in mandatory language, designate any other actor as authorized to select lead counsel or suggest that the district court may appropriate this authority. It would be difficult for the statute to be more clear that it is the lead plaintiff who selects lead counsel, not the district court.

The Court did not go as far as Kahn Gauthier asked, but instead, remanded the case to Judge Ware, and asking him "to consider, using appropriate deference, whether [Kahn Swick] was an unreasonable choice of lead counsel under the circumstances."

Here at SLW we continue to find humor in the somewhat mundane parts of the PSLRA that continue to generate judicial opinions 14 years after the statute went into effect.