Gopu v. Luckin Coffee Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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CHRISTOPHE STERCKX, Individually and on

behalf of all others similarly situated,

Plaintiff,

ORDER CONSOLIDATING

-against- CASES

20-cv-01677(KAM)(VMS)

LUCKIN COFFEE INC., JENNY ZHIYA QIAN,

REINOUT HENDRIK SCHAKEL, CHARLES ZHENGYAO

LU, JIAN LIU, JINYI GUO, HUI LI, ERHAI

LIU, CREDIT SUISSE SECURITIES (USA) LLC,

MORGAN STANLEY & CO. LLC, CHINA

INTERNATIONAL CAPITAL CORPORATION HONG

KONG SECURITIES LIMITED, HAITONG

INTERNATIONAL SECURITIES COMPANY LIMITED,

KEYBANC CAPITAL MARKETS INC., and NEEDHAM

& COMPANY, LLC, Defendants.

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VIJAYA GOPU and NIRMALA GOPU,

Individually and on behalf of all others

similarly situated,

20-cv-1747(KAM)(VMS)

Plaintiff,

-against-

LUCKIN COFFEE INC., CHARLES ZHENGYAO LU,

JENNY ZHIYA QIAN, JIAN LIU, REINOUT

HENDRIK SCHAKEL, HUI LI, JINYI GUO,

ERHAI LIU, SEAN SHAO, THOMAS P. MEIER,

NEEDHAM & COMPANY, LLC, MORGAN STANLEY

& CO. LLC, CHINA INTERNATIONAL CAPITAL

CORP. HONG KONG SECURITIES LTD., HAITONG

INT’L SECURITIES CO. LTD., CREDIT SUISSE

SECURITIES (USA) LLC, and KEYBANC CAPITAL

MARKETS INC., Defendants.

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MATSUMOTO, United States District Judge:

A District Court may "consolidate related cases under

Federal Rule of Civil Procedure 42(a)," as consolidation is "a

valuable and important tool of judicial administration" that may

be "invoked to expedite trial and eliminate unnecessary

repetition and confusion." Devlin v. Transportation Communs.

Int'l Union, 175 F.3d 121, 130 (2d Cir. 1999) (citing In re

Adams Apple, Inc., 829 F.2d 1484, 1487 (9th Cir. 1987)); see

also, Atanasio v. Tenaris S.A., 331 F.R.D. 21, 25 (E.D.N.Y.

2019). Rule 42(a) provides that a court may order actions

consolidated if they involve "common issues of law or fact." See

Fed. R. Civ. P. 42(a); see also, e.g., BD ex rel. Jean Doe v.

DeBuono, 193 F.R.D. 117, 141 (S.D.N.Y. 2000) ("It is well

settled that even one substantial common question of law or fact

is enough for commonality under Rule 42(a)."). Barring any

prejudice to defendants, “[c]onsolidation of multiple actions

alleging securities fraud is appropriate where those actions

relate to the same public statements and reports.” Atanasio, 331

F.R.D. at 25 (quoting Constance Sczesny Tr. v. KPMG LLP, 223

F.R.D. 319, 322 (S.D.N.Y. 2004)).

Case Nos. 20-cv-1677 (Sterckx v. Luckin Coffee, et.

al) ("Sterckz") and 20-cv-1747 (Gopu v. Luckin Coffee, et. al)

("Gopu") “involve substantially identical questions of law and

fact.” Kux-Kardos v. VimpelCom, Ltd., 151 F.Supp.3d 471, 475

(S.D.N.Y. 2016). Both cases involve plaintiffs who purchased

securities and American Depository Receipt Shares (“ADR”) in

Luckin Coffee Inc. (“Luckin”), and now allege, inter alia,

accounting fraud dating back to the time of Luckin's I.P.O.,

including fabricated transactions and expenses, Securities Act

claims against Luckin, its Executives, Board of Directors, and

IPO underwriters, including parties' involvement with Luckin's

secondary offering and convertible note offering. (Sterckx

Introduction; Gopu Introduction). Both cases allege violations

of Section 10(b) and Section 11 of the Exchange Act against all

defendants (Sterckx Compl. ¶¶ 92-101, 78-85; Gopu Compl. ¶¶

172-182, 154-159), and Section 15 and Section 20(a) of the

Exchange Act against the individual defendants (Sterckx Compl.

¶¶ 86-91, 102-106; Gopu Compl. ¶¶ 160-162, 183-186), with Gopu

further alleging a violation of Section 12(a)(2) of the Exchange

Act against all defendants (Gopu Compl. ¶¶ 163-171). Both

allege class periods that begin on May 17, 2019, with Sterckx's

alleged period ending on April 2, 2020, and Gopu's alleged

period ending four days later, on April 6, 2020.

“Differences in causes of action, defendants, or the

class period do not render consolidation inappropriate if the

cases present sufficiently common questions of fact and law, and

the differences do not outweigh the interests of judicial

economy served by consolidation.” Rauch v. Vale S.A., 378 F.

Supp. 3d 198, 204–05 (E.D.N.Y. 2019) (quoting Kaplan v. Gelfond,

240 F.R.D. 88, 91 (S.D.N.Y. 2007) (entering consolidation order

despite different class periods)); see also Pirelli Armstrong

Tire Corp. Retiree Med. Benefits Tr. v. LaBranche & Co., 229

F.R.D. 395, 402 (S.D.N.Y. 2004) ("That certain defendants are

named in only one or some of the complaints does not require a

different result. Nor do differences among the class periods

proposed preclude consolidation.").

As the “actions need not be identical to allow for

consolidation,” Reitan v. China Mobile Games & Entm't Grp.,

Ltd., 68 F.Supp.3d 390, 394 (S.D.N.Y. 2014); accord Kux-Kardos,

151 F.Supp.3d at 474-5, the additional Section 12(a)(2)

allegation, two additional defendants, and the four additional

class period days alleged by Gopu are not impediments to

consolidation. Both seek damages, interest, and costs and fees

(see Sterckx Prayer for Relief; Gopu Prayer for Relief).

Further, the allegations in both Complaints are substantively

similar. (Compare Sterckx Compl. ¶¶ 31-77; Gopu Compl. ¶¶ 57-

153). There is no basis to believe that any Defendant would be

prejudiced by consolidation. It is therefore appropriate to

order consolidation of case Nos. 20-cv-1677 and 20-cv-1747 into

a single case.

CONCLUSION

Pursuant to Rule 42(a) of the Federal Rules of Civil

Procedure, Sterckx v. Luckin Coffee Inc., et. al, case No. 20-

cv-1677, and Gopu v. Luckin Coffee Inc., et. al, case No. 20-cv-

1747, are hereby consolidated as In re Luckin Coffee Inc.

Securities Litigation. All relevant documents and submissions

shall be maintained as one file under Master File No. 20-cv-

1677. Any other securities class actions filed in, or

transferred to, this District related to the facts alleged in

the cases described above shall be consolidated into this

action.

SO ORDERED.

Dated: April 16, 2020

Brooklyn, New York

_________/s/_________________

HON. KIYO A. MATSUMOTO

United States District Judge

Eastern District of New York