Hayes v. Magnachip Semiconductor Corp. et al

Filing 338

ORDER GRANTING SECOND RENEWED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT by Judge Jon S. Tigar granting 335 Motion for Settlement. Fairness Hearing set for 5/10/2018 at 2:00 PM. in Courtroom 9, 19th Floor, San Francisco. (wsn, COURT STAFF) (Filed on 1/22/2018)

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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 v. MAGNACHIP SEMICONDUCTOR CORP., et al., Case No. 14-cv-01160-JST ORDER GRANTING SECOND RENEWED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT Re: ECF No. 335 Defendants. 12 13 Before the Court is Plaintiffs’ unopposed second renewed motion for preliminary approval 14 of a class action settlement with Defendant Avenue Capital Management II, L.P. ECF No. 335. 15 The Court denied Plaintiffs’ original motion for preliminary approval “based on an inability to 16 determine whether the settlement is adequate, and based on the apparent failure to comply with 17 CAFA’s notice requirements.” ECF No. 330 at 12. The Court found that the record otherwise 18 supported preliminary approval. Id. at 9-12. The Court also approved the proposed notice and 19 allocation plans. Id. at 12-14. 20 Plaintiffs filed a renewed motion to address the Court’s two identified concerns. ECF 21 No. 331. The Court determined that Plaintiffs presented adequate proof of CAFA notice but still 22 failed to present “a sufficient basis for evaluating whether the amount offered in settlement is 23 adequate.” ECF No. 332 at 1-2. 24 Plaintiffs’ second renewed motion cures this deficiency. They submitted an expert 25 declaration valuing class damages at $158.4 million, and a declaration from class counsel 26 estimating that a jury would likely apportion 25% to 35% liability to Avenue Capital based on its 27 role in the alleged fraud. ECF Nos. 335-2 & 335-3. The Court finds this evidence sufficient to 28 establish that a reasonably likely recovery at trial would be $39.6 to $55.44 million. The proposed 1 $6.2 million settlement amounts to 11.2 to 15.7 percent of what the class would likely recover if it 2 were to prevail at trial. This is within the range of reasonableness. See, e.g., ECF No. 270 at 9 3 (approving settlement with other Defendants where settlement amount was “14 percent of 4 Plaintiffs’ maximum estimate[d] damages, assuming the Settling Defendants are 50 percent 5 liable”).1 The Court therefore grants Plaintiffs’ second renewed motion for preliminary approval of 6 7 the class action settlement. The Court will separately file a modified version of the parties’ 8 proposed order preliminarily approving the settlement and providing for class notice. ECF No. 9 335-1. The parties request a final approval hearing no sooner than 95 days after entry of the order 10 United States District Court Northern District of California 11 granting preliminary approval. ECF No. 321 at 22. The Court sets the final approval hearing for 12 May 10, 2018, at 2:00 p.m. IT IS SO ORDERED. 13 14 Dated: January 22, 2018 ______________________________________ JON S. TIGAR United States District Judge 15 16 17 18 19 20 21 22 23 1 24 25 26 27 28 In support of their motion seeking approval of the earlier settlement, Plaintiffs cited to “Cornerstone Research, Securities Class Action Settlements, 2015 Review and Analysis (2016).” ECF No. 251 at 20. The updated version of that report indicates that the median settlement for class actions with an estimated damages range of $125-249 million was 2.7% for 2006-2015 and 3.4% in 2016. Cornerstone Research, Securities Class Action Settlements: 2016 Review and Analysis (2017), https://www.cornerstone.com/Publications/Reports/Securities-Class-ActionSettlements-2016-Review-and-Analysis, at 8. For estimated damages in the $50-124 million range, the median settlement was 4.5% for 2006-2015 and 5.8% in 2016. Id. For estimated damages less than $50 million, the median settlement was 10.8% for 2006-2015 and 7.3% in 2016. Id. These figures support the reasonableness of the settlement in this case. 2

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