Hayes v. Magnachip Semiconductor Corp. et al
Filing
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ORDER DENYING RENEWED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT by Judge Jon S. Tigar denying 331 Motion for Settlement. Motion due by 12/22/2017. (wsn, COURT STAFF) (Filed on 11/16/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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KEITH THOMAS, et al.,
Plaintiffs,
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United States District Court
Northern District of California
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Case No. 14-cv-01160-JST
v.
MAGNACHIP SEMICONDUCTOR
CORP., et al.,
Defendants.
ORDER DENYING RENEWED
MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION
SETTLEMENT
Re: ECF No. 331
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Before the Court is Plaintiffs’ unopposed renewed motion for preliminary approval of a
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class action settlement with Defendant Avenue Capital Management II, L.P. ECF No. 331. The
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Court denied Plaintiffs’ original motion for preliminary approval “based on an inability to
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determine whether the settlement is adequate” and because there was no “indication that the
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parties actually complied with their obligations to notify the appropriate federal and state officials”
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under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1715. ECF No. 330 at 9-12.
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Plaintiffs’ renewed motion presents evidence that Avenue Capital sent the required CAFA
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notice on October 25, 2017. ECF No. 331-1. CAFA requires that “each defendant that is
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participating in the proposed settlement” serve notice “[n]ot later than 10 days after a proposed
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settlement of a class action is filed in court.” 28 U.S.C. § 1715(b). Although Avenue Capital’s
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notice was late, it is sufficient as long as the relevant state and federal officials have at least ninety
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days to review the proposed settlement. Jakosalem v. Air Serv. Corp., No. 13-cv-05944-SI, 2015
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U.S. Dist. LEXIS 117235, at *2-3 (N.D. Cal. Sept. 2, 2015). The Court has not ordered
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preliminary approval, and it will not order final approval, if at all, until after at least ninety days
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have passed from October 25, 2017. Accordingly, the proof of CAFA notice attached to
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Plaintiffs’ renewed motion is sufficient.
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However, Plaintiffs still fail to satisfy the Court’s concerns about the adequacy of the
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settlement. “To evaluate adequacy, courts primarily consider the plaintiffs’ expected recovery
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balanced against the value of the settlement offer.” ECF No. 330 at 9 (citing In re Tableware
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Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007)). In their original motion,
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“Plaintiffs state[d] only that the Second Settlement ‘represents a substantial portion of the Class’s
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likely recovery at trial,’ without giving a percentage figure,” and did “not even attempt[] to
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provide ‘hypothetical scenarios’ that could produce various expected recoverable damages to
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measure against the proposed settlement amount.” Id. at 9-10 (citations omitted). In Plaintiffs’
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renewed motion, counsel repeatedly state what they “believe” to be a reasonable expected
recovery at trial, ECF No. 331 at 6-7, but provide no declaration or other evidence in support of
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United States District Court
Northern District of California
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those beliefs, even though counsel apparently consulted with expert witnesses before reaching
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their conclusions. Id. at 7. Without such evidence, the Court continues to lack a sufficient basis
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for evaluating whether the amount offered in settlement is adequate.
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Accordingly, Plaintiffs’ renewed motion for preliminary approval of class action
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settlement is denied. A renewed motion for preliminary approval is due by December 22, 2017.
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IT IS SO ORDERED.
Dated: November 16, 2017
______________________________________
JON S. TIGAR
United States District Judge
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