Malriat v. Quantumscape Corp.

Opinion

ORDER CONSOLIDATING CASES, APPOINTING LEAD PLAINTIFF AND COUNSEL

Re: Dkt. Nos. 27, 28, 40, 41, 42, 50, 54, 65, 67, 72

Re: Dkt. No. 16

 [*5] Re: Dkt. No. 19

Before me are motions to consolidate these putative securities class actions and competing motions to be appointed lead plaintiff in the consolidated action. The cases concern the same subject matter and will be consolidated. For the reasons that follow, putative class member and movant Frank Fish is appointed lead plaintiff and his choice of lead counsel is approved.

BACKGROUND

Because of this case's procedural posture, the allegations are only recited to the extent necessary to understand the context for these motions. Defendant QuantumScape Corporation makes battery technology for electric vehicles. See Complaint [Dkt. No. 1] ¶ 2.¹ It went public on November 25, 2020. Id. ¶ 3. This case stems from an article published on January 4, 2021, in "Seeking Alpha," which stated that QuantumScape's solid-state batteries had risks that made them "completely unacceptable for real world field electric vehicles." Id. ¶ 4. In particular, it reported that the batteries "will only last for 260 cycles or about 75,000 miles of aggressive driving" and "the power and cycle tests at 30 and 45 degrees above would have been significantly worse if run even a few degrees lower." Id. QuantumScape's [*6]  stock price then fell by roughly 41 percent, or $34.49 "on unusually heavy trading volume." Id. ¶ 5. This suit is about statements by QuantumScape and its executives that are alleged to be false or misleading and its alleged failure to disclose adverse facts to investors. Id. ¶ 6. Those statements and omissions are to the effect that QuantumScape overstated the capabilities of the batteries and withheld that it would be unable to "scale" its technology to the extent necessary to power electric vehicles. Id.

On January 5, 2021, Joseph Malriat filed a class action complaint in this District. Two other such complaints followed: one by Asha Gowda on January 6 and one by Christopher Leo on January 8. See Dkt. 21-cv-00070 No. 1; Dkt. 21-cv-00150 No. 1. I ordered those cases related to the Malriat matter. See Dkt. No. 18. Counsel for Malriat published a notice on Business Wire on January 6 announcing the action as required by the Private Securities Litigation Reform Act ("PSLRA"). See Dkt. No. 42-4; 15 U.S.C. § 78u-4(a)(3)(A). Pursuant to the PSLRA, twelve movants filed motions to consolidate the three cases and be appointed lead plaintiff and counsel on March 8, 2021. See [*7]  15 U.S.C. § 78u-4(a)(i)(II), (ii).

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