44-2081

44-2081. Private securities class action
litigation

A. This section applies in each private action that arises under this chapter and
that is brought as a plaintiff class action pursuant to the Arizona rules of civil
procedure or any federal or other jurisdictional counterpart to the rules.

B. Each plaintiff seeking to serve as a representative party on behalf of a class
shall provide a sworn certification to the court that is signed by the plaintiff, filed
with the complaint and includes a statement that:

1. The plaintiff has reviewed the complaint and has authorized its filing.

2. The plaintiff did not purchase the security that is the subject of the complaint
at the direction of the plaintiff's counsel or in order to participate in any private
action arising under this chapter.

3. The plaintiff is willing to serve as a representative party on behalf of a
class, including providing testimony at a deposition or trial.

4. Sets forth all of the plaintiff's transactions involving the security that is
the subject of the complaint during the class period specified in the complaint.

5. Identifies any other action under this chapter, the securities act of 1933 (15
United States Code sections 77a through 77bbbb) or the securities exchange act of 1934
(15 United States Code sections 78a through 78ll) filed within three years before the
plaintiff signs the certification in which the plaintiff has sought to serve as a
representative party on behalf of a class.

6. The plaintiff will not accept any payment for serving as a representative party
on behalf of a class beyond the plaintiff's pro rata share of any recovery, except as
ordered or approved by the court in accordance with subsection J.

C. The certification filed pursuant to subsection B is not a waiver of the
attorney-client privilege.

D. Within twenty days after the date on which the complaint is filed, the plaintiff
or plaintiffs shall publish, in a widely circulated national business-oriented
publication or wire service, a notice advising members of the purported plaintiff class
of the pendency of the action, the claims asserted and the purported class period. The
notice shall include a statement that, within sixty days after the date on which the
notice is published, any member of the purported class may move the court to serve as
lead plaintiff of the purported class. If more than one action on behalf of a class
asserting substantially the same claim or claims arising under this article is filed,
only the plaintiff or plaintiffs in the first filed action are required to publish the
notice. The notice is in addition to any notice required pursuant to the Arizona rules of
civil procedure or any federal or other jurisdictional counterpart to the rules.
Notwithstanding this subsection, the court may narrow the geographic scope of the
publication of the notice required by this subsection, if the court finds that
substantially all members of the class would receive notice.

E. Within ninety days after the date on which a notice is published under
subsection D the court shall consider any motion made by a purported class member in
response to the notice, including any motion by a class member who is not individually
named as a plaintiff in the complaint or complaints, and shall appoint the most adequate
plaintiff as lead plaintiff. The most adequate plaintiff is that member or members of
the purported plaintiff class that the court determines to be most capable of adequately
representing the interests of class members in accordance with this subsection. Subject
to subsection F, the court shall adopt a presumption that the most adequate plaintiff in
any private action arising under this chapter is the person or group of persons that has
either filed the complaint or made a motion in response to a notice under subsection D,
in the determination of the court has the largest financial interest in the relief sought
by the class and otherwise satisfies the requirements of rule 23 of the Arizona rules of
civil procedure or any federal or other jurisdictional counterpart to the rules.

F. The presumption prescribed in subsection E may be rebutted only on proof by a
member of the purported plaintiff class that the presumptively most adequate plaintiff
will not fairly and adequately protect the interests of the class or is subject to unique
defenses that render that plaintiff incapable of adequately representing the class. A
plaintiff may conduct discovery relating to whether a member or members of the purported
plaintiff class are the most adequate plaintiff if the plaintiff demonstrates a
reasonable basis for a finding that the presumptively most adequate plaintiff is
incapable of adequately representing the class.

G. If more than one action on behalf of a class asserting substantially the same
claim or claims arising under this chapter has been filed, and any party has sought to
consolidate those actions for pretrial purposes or for trial, the court shall not make
the determination required by subsection E until after the decision on the motion to
consolidate is rendered. As soon as practicable after the decision is rendered, the court
shall appoint the most adequate plaintiff as lead plaintiff for the consolidated actions
in accordance with this section.

H. Subject to the approval of the court, the most adequate plaintiff shall select
and retain counsel to represent the class.

I. Except as the court permits and consistent with the purposes of this section, a
person may be a lead plaintiff, or an officer, director or fiduciary of a lead plaintiff,
in not more than five class actions during any three consecutive years brought as
plaintiff class actions pursuant to the Arizona rules of civil procedure or any federal
counterpart to the rules.

J. The share of any final judgment or of any settlement that is awarded to a
representative party serving on behalf of a class shall be equal on a per share basis to
the portion of the final judgment or settlement awarded to all other members of the
class. Nothing in this subsection limits the award of reasonable costs and expenses,
including lost wages, directly relating to the representation of the class to any
representative party serving on behalf of a class.

K. The terms and provisions of any settlement agreement of a class action shall not
be filed under seal, except that on a motion by any party to the settlement, the court
may order filing under seal for those portions of a settlement agreement as to which good
cause is shown for filing under seal. For purposes of this subsection, good cause exists
if publication of a term or provision of a settlement agreement would cause direct and
substantial harm to any party.

L. Attorney fees and costs awarded by the court to counsel for the plaintiff class
shall not exceed a reasonable percentage of the amount of any damages and prejudgment
interest actually paid to the class.

M. Any proposed or final settlement agreement that is published or disseminated to
the class shall include a cover page summarizing the information contained in the
settlement agreement and:

1. The amount of the settlement proposed to be distributed to the parties to the
action, determined in the aggregate and on an average per share basis.

2. If the settling parties agree on the average amount of damages per share that
would be recoverable if the plaintiff prevailed on each claim alleged under this chapter,
a statement concerning the average amount of the potential damages per share.

3. If the parties do not agree on the average amount of damages per share that
would be recoverable if the plaintiff prevailed on each claim alleged under this chapter,
a statement from each settling party concerning the issue or issues on which the parties
disagree.

4. If any of the settling parties or their counsel intends to apply to the court
for an award of attorney fees or costs from any fund established as part of the
settlement, a statement indicating which parties or counsel intends to make the
application, the amount of fees and costs that will be sought, including the amount of
the fees and costs determined on an average per share basis, and a brief explanation
supporting the fees and costs sought. The cover page of any notice to a party of any
proposed or final settlement agreement shall include a clear summary of the information
prescribed by this paragraph.

5. The name, telephone number and address of one or more representatives of counsel
for the plaintiff class who will be reasonably available to answer questions from class
members concerning any matter contained in any notice of settlement published or
disseminated to the class.

6. A brief statement explaining the reasons why the parties are proposing the
settlement.

7. Other information required by the court.

N. A statement made in accordance with subsection M, paragraph 2 or 3 concerning
the amount of damages is not admissible in any federal or state judicial action or
administrative proceeding, other than an action or proceeding arising out of the
statement.

O. In any private action arising under this chapter that is certified as a class
action pursuant to the Arizona rules of civil procedure or any federal or other
jurisdictional counterpart to the rules, the court may require an undertaking from the
attorneys for the plaintiff class or the plaintiff class, or both, or from the attorneys
for the defendant or the defendant, or both, in those proportions and at those times as
the court determines are just and equitable, for the payment of fees and expenses that
may be awarded under this section.

P. If a plaintiff class is represented by an attorney who directly owns or
otherwise has a beneficial interest in the securities that are the subject of the
litigation, the court shall make a determination of whether the ownership or other
interest constitutes a conflict of interest sufficient to disqualify the attorney from
representing the plaintiff class.