Hayes v. Magnachip Semiconductor Corp. et al

Filing 332

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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KEITH THOMAS, et al., Plaintiffs, 8 9 10 United States District Court Northern District of California 11 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 12 13 Before the Court is Plaintiffs’ unopposed renewed motion for preliminary approval of a 14 class action settlement with Defendant Avenue Capital Management II, L.P. ECF No. 331. The 15 Court denied Plaintiffs’ original motion for preliminary approval “based on an inability to 16 determine whether the settlement is adequate” and because there was no “indication that the 17 parties actually complied with their obligations to notify the appropriate federal and state officials” 18 under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1715. ECF No. 330 at 9-12. 19 Plaintiffs’ renewed motion presents evidence that Avenue Capital sent the required CAFA 20 notice on October 25, 2017. ECF No. 331-1. CAFA requires that “each defendant that is 21 participating in the proposed settlement” serve notice “[n]ot later than 10 days after a proposed 22 settlement of a class action is filed in court.” 28 U.S.C. § 1715(b). Although Avenue Capital’s 23 notice was late, it is sufficient as long as the relevant state and federal officials have at least ninety 24 days to review the proposed settlement. Jakosalem v. Air Serv. Corp., No. 13-cv-05944-SI, 2015 25 U.S. Dist. LEXIS 117235, at *2-3 (N.D. Cal. Sept. 2, 2015). The Court has not ordered 26 preliminary approval, and it will not order final approval, if at all, until after at least ninety days 27 have passed from October 25, 2017. Accordingly, the proof of CAFA notice attached to 28 Plaintiffs’ renewed motion is sufficient. 1 However, Plaintiffs still fail to satisfy the Court’s concerns about the adequacy of the 2 settlement. “To evaluate adequacy, courts primarily consider the plaintiffs’ expected recovery 3 balanced against the value of the settlement offer.” ECF No. 330 at 9 (citing In re Tableware 4 Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007)). In their original motion, 5 “Plaintiffs state[d] only that the Second Settlement ‘represents a substantial portion of the Class’s 6 likely recovery at trial,’ without giving a percentage figure,” and did “not even attempt[] to 7 provide ‘hypothetical scenarios’ that could produce various expected recoverable damages to 8 measure against the proposed settlement amount.” Id. at 9-10 (citations omitted). In Plaintiffs’ 9 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 11 United States District Court Northern District of California 10 those beliefs, even though counsel apparently consulted with expert witnesses before reaching 12 their conclusions. Id. at 7. Without such evidence, the Court continues to lack a sufficient basis 13 for evaluating whether the amount offered in settlement is adequate. 14 Accordingly, Plaintiffs’ renewed motion for preliminary approval of class action 15 settlement is denied. A renewed motion for preliminary approval is due by December 22, 2017. 16 17 18 19 IT IS SO ORDERED. Dated: November 16, 2017 ______________________________________ JON S. TIGAR United States District Judge 20 21 22 23 24 25 26 27 28 2

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