KEIPPEL
v.
HEALTH INSURANCE INNOVATIONS, INC.
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The court granted class certification, appointing class representatives and counsel, but ordered the class period to end on February 18, 2019, the date the action was filed.
Lead Plaintiffs moved for class certification in a securities fraud action. Defendants did not dispute the Rule 23(a) requirements but contested the p…
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This matter is before the Court on Lead Plaintiffs’ Oklahoma Municipal Retirement Fund (“OMRF”) and City of Birmingham Retirement and Relief System (“BRRS”) (collectively “Lead Plaintiffs” or “Plaintiffs”) Motion for Class Certification, Appointment of Class Representatives, and Appointment of Class Counsel (Dkt. 70, “Motion”), and Defendants’ Health Insurance Innovations, Inc. n/k/a Benefytt Technologies, Inc. (“HIIQ”), Gavin Southwell, and Michael D. Hershberger (collectively “Defendants”) Opposition (Dkts. 80, 81), and Lead Plaintiffs’ Reply (Dkts. 83, 84). The Court also had the benefit of a hearing on this matter on August 25, 2020. (Dkt. 87.) After careful review of the briefing and evidentiary record, having considered argument of counsel, and for the reasons stated below, the Court grants Lead Plaintiffs’ Motion in part, but orders that the class period ends on February 18, 2019 when this action was filed.
DISCUSSION
To satisfy Rule 23(a), the party moving for class certification must show that: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a)(1)-(4). Defendants do not dispute the Lead Plaintiffs’ satisfaction of these four requirements. (Dkt. 80 at footnote 1.)1 And the Court so finds. Lead Plaintiffs seek certification under Rule 23(b)(3), which requires “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”
Fed. R. Civ. P. 23(b)(3). Defendants do not challenge the superiority element,
205 F.R.D. 572, 579 (D. Colo. 2001)); In re Data Access Sys. Sec. Litig., 103 F.R.D. 130, 143 (D.N.J. 1984); In re Am. Italian Pasta Co. Sec. Litig., No. 05- 0725-CV-WODS, 2007 WL 927745, at *4 (W.D. Mo. Mar. 26, 2007). This is so because the corrective or “curative” information “retracts or dispels the alleged misinformation, or puts the investor on inquiry notice of the alleged fraud, making
18, 2019, the filing of the public complaint in this matter. The market, which both sides presume to be efficient, had already received prior notice on several items of the actionable (and allegedly withheld) information, some as early as November 2018. (Dkts. 80, 81 at Exhs. C–F, I, K–M). This date has precedent in the legal authorities, see In Re. Novatel Wireless Sec. Litig., No. 08-CV-1689-H, 2010 WL 11470156, at *7 (S.D. Cal. May 12, 2010); In Re CMS Energy Sec. Litig., 236 F.R.D. 338, 342 (E.D. Mich. 2006), and provides a clear demarcation by which the market knew or should have known about the corrective information and pertinent issues. To choose the later date suggested by Plaintiffs’ counsel (April 11, 2019) is bothersome due to the fact that lead Plaintiff ORMF, who had previously sold all or much of its holding, conferred with Plaintiff class counsel after this suit was filed, and thereafter purchased large holdings in March 2019, which tends to give the appearance of the purchase of a law suit or deliberate creation of “victim status” for litigative purposes. No other purpose for these large purchases appears logically apparent in this record.
The other item in dispute at the hearing was the Defendants’ objection that the class not include those persons who “otherwise acquired” shares during the class period. The Court expressed concern that those persons, who might have obtained shares by gift, barter, or perhaps through some bonus or 401(k)-type plan, might create discrete and “untypical” inquiries for damages calculations, due to varying real-world costs bases in the shares, etc. However, this may be handled at a later date, and if the matter is too complicated and fact-specific for these individual “otherwise acquirers,” the Court can pare the class. That objection by the Defendants is presently overruled. Accordingly, the class is hereby certified as follows: All persons or entities that purchased or otherwise acquired HIIQ common stock between September 25, 2017 through February 18, 2019, inclusive, and who were damaged thereby. Excluded from the class are Defendants, the officers and directors of HIIQ, members of their immediate families and their legal representatives, heirs,
agents, affiliates, successors or assigns, Defendants’ liability insurance carriers, and any affiliates or subsidiaries thereof, and any entity in which Defendants or their immediate families have or had a controlling interest. The motion for class certification (Dkt. 70) is granted consistent with this order. Without objection Oklahoma Municipal Retirement Fund and City of Birmingham Retirement and Relief System are appointed as Class Representatives and Saxena White P.A. is appointed as Class Counsel. DONE AND ORDERED at Tampa, Florida, on August 28, 2020.
WILLIAM F. a2
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO: Counsel of Record