Law360 (July 28, 2020, 9:40 PM EDT) -- Six law firms, including Labaton Sucharow, Levi & Korsinsky, and Pomerantz, are vying to lead a proposed investor class action in Florida federal court that alleges Carnival Corp. hid COVID-19 infections on its ships and spread the virus at ports around the world, causing its stock price to drop twice.
The six firms' motions filed Monday seek to get their clients named lead plaintiff in the May 27 suit against the world's largest cruise company and to consolidate a July 21 lawsuit with the first suit filed by institutional investor Service Lamp Corporation Profit Sharing Plan.
A third suit filed June 3 by investor John P. Elmensdorp was consolidated with the May suit in July.
Investors allege that Carnival Cruise hid that its medics were reporting increased COVID-19 cases on its ships, that Carnival was violating port-of-call regulations by hiding the number and severity of infections on its ships and that Carnival didn't follow its own health and safety protocols.
By continuing to operate, Carnival ships were responsible for spreading COVID-19 at various ports throughout the world, investors allege, and as a result, Carnival's positive statements about its business were misleading, causing its stock prices to drop when the truth was revealed in news articles.
The suits seek to hold Carnival, CEO Arnold W. Donald and chief financial officer David Bernstein liable for the drops.
Investors allege that on April 16, a news article said company executives may have failed to protect passengers from the virus and "continued to operate new cruise departures despite its knowledge that the threat posed by COVID-19 had materialized on its ships and was likely to proliferate further."
The news came while Carnival still had two cruise ships at sea, and its share price dropped $0.53 that day, according to the May complaint.
On May 1, another article said the virus spread on cruise ships despite early warning signs to Carnival and its affiliated cruise lines, and further revealed that the government was looking into Carnival's response to the pandemic, according to the suit.
Carnival's stock price dropped $1.97 that day, to $13.93 per share, investors claim.
Investor Abraham Atachbarian filed the July 21 lawsuit that Monday's six motions seek to consolidate with the May lawsuit. His lawyers asked the court on Monday not to consolidate the complaint with the others because unlike other investors, Atachbarian is a seller of put option contracts.
The proposed class in the Service Lamp Corp. case is limited to those who bought Carnival stocks between Sept. 26, 2019, and May 1, 2020, and doesn't include options traders.
In a similar COVID-related investor suit against Norwegian Cruise Line, Atachbarian had been one of several investors vying for lead plaintiff status in May, but he withdraw his motion in June.
Two institutional investors who filed a joint motion to be named lead plaintiff on Monday appear to have the largest loss from Carnival securities, at a combined $5.7 million.
The motion by New England Carpenters Pension and Guaranteed Annuity Funds and the Massachusetts Laborers' Pension and Annuity Funds asked that Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP be named lead counsel and Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C. be named liaison counsel.
Another institutional investor, LiUNA Pension Fund of Central and Eastern Canada, came in second for highest loss at $1.15 million.
The pension fund asked to be named lead plaintiff in a broader class of investors that includes those who sold put option contracts or purchased call options for Carnival common stock during the same class period.
LiUNA asked that its lawyers at Labaton Sucharow LLP be named lead counse, and Kopelowitz Ostrow Ferguson Weiselberg Gilbert be named liaison counsel.
In their bid to be named lead plaintiffs, investors Roy and Joan McCarroll said they lost $660,166 and asked that their lawyers at Bernstein Liebhard LLP be named lead counsel and Mark Migdal and Hayden be named liaison counsel.
Investor Stephen Harris said he lost $389,561 and, like LiUNA, asked to represent a broader class of investors that includes options traders. He asked that his lawyers at Pomerantz LLP and Barrack, Rodos & Bacine serve as lead counsel, and those at Shepherd, Finkelman, Miller & Shah, LLP be liaison counsel.
Investor Joseph Fuscaldo estimates his loss at $134,550 and sought lead counsel status for The Rosen Law Firm.
Investor Stuart Roy Rosenblatt estimated his losses to be $45,995 and asked the court to name Levi & Korsinsky, LLP as lead counsel and Cullin O'Brien Law, P.A. as liaison counsel.
Carnival is also facing proposed class actions about its handling of the COVID-19 pandemic from passengers.
Counsel for Carnival and its executives declined to comment Tuesday.
Counsel for the investors did not immediately respond to requests for comment Tuesday.
New England Carpenters Pension and Guaranteed Annuity Funds and the Massachusetts Laborers' Pension and Annuity Funds are represented by Hannah Ross, Avi Josefson and Michael D. Blatchley of Bernstein Litowitz Berger & Grossmann LLP; Naumon A. Amjed, Darren J. Check and Ryan T. Degnan of Kessler Topaz Meltzer & Check LLP; and Zachary S. Bower of Carella, Byrne, Cecchi, Olstein, Brody & Agnello P.C.
LiUNA is represented by Christopher J. Keller, Eric J. Belfi, Francis P. McConville of Labaton Sucharow LLP; and Daniel Tropin and Jeff Ostrow of Kopelowitz Ostrow Ferguson Weiselberg Gilbert.
Roy and Joan McCarroll are represented by Stanley D. Bernstein, Laurence J. Hasson and Matthew E. Guarnero of Bernstein Liebhard LLP; and Etan Mark and Daniel S. Maland of Mark Migdal & Hayden.
Stephen Harris is represented by James M. LoPiano of Pomerantz LLP; Daniel E. Bacine and Jeffrey A. Barrack of Barrack, Rodos & Bacine; Jayne A. Goldstein of Shepard, Finkelman, Miller & Shah, LLP; and Peretz Bronstein of Bronstein, Gewirtz & Grossman LLC.
Joseph Fuscaldo is represented by Laurence Rosen of The Rosen Law Firm P.A.
Stuart Roy Rosenblatt is represented by Shannon L. Hopkins of Levi & Korsinsky LLP; and Cullin O'Brien of Cullin O'Brien Law, P.A.
Abraham Atachbarian is represented by Lynda J. Grant of The Grant Law Firm; and Howard Longman of Stull Stull & Brody.
Carnival and its executives are represented by Daniel S. Sinnreich, Richard A. Rosen and Theodore V. Wells Jr. of Paul, Weiss, Rifkind, Wharton & Garrison LLP; and Erin K. Kolmansberger and Mark F. Raymond of Nelson Mullins Broad and Cassel.
The case is Service Lamp Corporation Profit Sharing Plan v. Carnival Corporation et al., case number 1:20-cv-22202, in the U.S. District Court for the Southern District of Florida.
-Additional reporting by Dean Seal. Editing by Peter Rozovsky.
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