Dhingra v. Crocs, Inc. et al

Filing 205

ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE. The Court preliminarily approves the Stipulation and the Settlement set forth therein, subject to further consideration at the Settlement Hearing. A hearing is set for 2/13/2014 at 09:00 AM before Judge Philip A. Brimmer. By Judge Philip A. Brimmer on 8/28/13. (Attachments: # 1 Exhibit A-1, # 2 Exhibit A-2, # 3 Exhibit A-3) (mnfsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 07-cv-02351-PAB-KLM
(Consolidated with 07-cv-02412, 07-cv-02454, 07-cv-02465, and 07-cv-02469)
In Re Crocs, Inc., Securities Litigation
ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR
NOTICE
WHEREAS, a consolidated class action is pending before this Court entitled In
Re Crocs, Inc., Securities Litigation, No. 07-cv-02351-PAB-KLM (Consolidated With:
Civil Action No. 07-cv-02412, 07-cv-02454, 07-cv-02465, and 07-cv-02469) (the
“Action”);
WHEREAS, on April 9, 2012, the United States Court of Appeals for the Tenth
Circuit entered an order remanding Appeal Nos. 11-1116 and 11-1142 on a limited
basis with instructions for the district court to consider fully the Settling Parties’
proposed class settlement;
WHEREAS, the Court has received the Stipulation and Agreement of Partial
Class Settlement dated May 14, 2012 (the “Stipulation”), that has been entered into by
the Plaintiffs and Settling Defendants, and the Court has reviewed the Stipulation and
its attached Exhibits;
WHEREAS, the Plaintiffs having made an application, pursuant to Rule 23(e) of
the Federal Rules of Civil Procedure for an order preliminarily approving the partial
settlement of the Action, in accordance with the Stipulation which, together with the

Exhibits annexed thereto sets forth the terms and conditions for a proposed partial
settlement of the Action and for partial dismissal of the Action with prejudice upon the
terms and conditions set forth therein; and the Court having read and considered the
Stipulation and the Exhibits annexed thereto; and
WHEREAS, all capitalized defined terms contained herein shall have the same
meanings as set forth in the Stipulation,
NOW, THEREFORE, IT IS HEREBY ORDERED:
1.

The Court preliminarily approves the Stipulation and the Settlement set

forth therein, subject to further consideration at the Settlement Hearing described below.
2.

A hearing (the “Settlement Hearing”) shall be held before this Court on

February 13, 2014, at 9:00 a.m., at the United States District Court for the District of
Colorado, Alfred A. Arraj United States Courthouse, 901 19th Street, Denver, Colorado,
to determine: whether to certify the Action as a class action, solely for the purposes of
settlement, pursuant to Rules 23(a) and (b) of the Federal Rules of Civil Procedure;
whether the proposed settlement of the Action on the terms and conditions provided for
in the Stipulation is fair, reasonable, and adequate to the Settlement Class and should
receive final approval by the Court; whether Class Judgment as provided in ¶4.2 of the
Stipulation should be entered herein; whether the proposed Plan of Allocation should be
approved as fair and reasonable; the amount of fees and expenses that should be
awarded to Plaintiffs’ Counsel; and the amount, if any, of expenses reimbursed to
Plaintiffs and Plaintiffs’ Counsel. The Court may adjourn the Settlement Hearing without
further notice to Members of the Settlement Class. The date and time of the Settlement
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Hearing shall be added to the Notice and Summary Notice before they are mailed and
published.
3.

Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court

preliminarily certifies, for settlement purposes only, a Settlement Class consisting of all
Persons who purchased or otherwise acquired publicly traded securities of Crocs, Inc.
between April 2, 2007 and April 14, 2008, inclusive (“Settlement Class Period”).
Excluded from the Settlement Class are Defendants, their officers and directors during
the Settlement Class Period, the members of their immediate families, and their
respective representatives, heirs, successors, and assigns, as well as any entity in
which Defendants have or had a controlling interest. Also excluded from the Settlement
Class are those Persons who otherwise satisfy the above requirements for membership
in the Settlement Class, but who timely and validly request exclusion from the
Settlement Class pursuant to the Notice to be sent to Settlement Class Members.
4.

With respect to the Settlement Class, this Court preliminarily finds, solely

for purposes of effectuating the Settlement, that the prerequisites for a class action
under Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure have been
satisfied in that: (a) the Members of the Settlement Class are so numerous that joinder
of all Settlement Class Members in the Action is impracticable; (b) there are questions
of law and fact common to the Settlement Class Members which predominate over any
individual questions; (c) the claims of the Plaintiffs are typical of the claims of the
Settlement Class; (d) the Plaintiffs and Plaintiffs’ Counsel have fairly and adequately
represented and protected the interests of all of the Settlement Class Members; and
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(e) a class action is superior to other available methods for the fair and efficient
adjudication of the controversy, considering: (i) the interests of the Members of the
Settlement Class in individually controlling the prosecution of the separate actions;
(ii) the extent and nature of any litigation concerning the controversy already
commenced by Members of the Settlement Class; (iii) the desirability or undesirability of
continuing the litigation of these claims in this particular forum; and (iv) the difficulties
likely to be encountered in the management of the Action.
5.

Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and solely for

the purposes of this Settlement, the Court preliminarily certifies Fernando Pedrera
Sánchez, Harvey Babitt, and Daniel Lundberg, or any of them, as class representative
for the Settlement Class and appoints Plaintiffs’ Counsel as counsel for the Settlement
Class. The Court preliminarily finds, solely for the purposes of this Settlement, that the
claims of Plaintiffs are typical of the claims of the Settlement Class, and that the
Plaintiffs and Plaintiffs’ Counsel fairly and adequately represent and protect the interests
of all of the Settlement Class Members. Plaintiffs’ Counsel are authorized to act on
behalf of the Settlement Class with respect to all acts required by, or that may be
undertaken pursuant to, the Stipulation or such other acts as are reasonably necessary
to consummate the proposed Settlement as set forth in the Stipulation.
6.

The Court approves the payment of the Settlement Amount to the Escrow

Agent in accordance with the terms and obligations of the Stipulation.

Before the

Effective Date, Plaintiffs’ Counsel may use up to $250,000 from the Settlement Fund,
without further approval from the Settling Defendants or the Court, to pay costs and
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expenses reasonably, necessarily, and actually incurred by the Claims Administrator in
connection with providing notice to the Settlement Class, including printing, mailing and
disseminating the Notice and Summary Notice, locating Settlement Class Members,
reimbursing brokers, banks, and other nominee holders for Settlement Class Members,
assisting with the filings of Proofs of Claims, administering the Settlement Fund to
Authorized Claimants, and processing Proofs of Claims. In the event Plaintiffs’ Counsel
believe the costs of providing notice to the Settlement Class and/or administering the
Settlement will exceed $250,000, before the Effective Date, Plaintiffs’ Counsel shall
submit a written request to Crocs’ counsel, Morrison & Foerster LLP, in accordance with
the terms of the Stipulation. No person or entity who is not a Settlement Class Member
or counsel for Plaintiffs shall have any right to any portion of, or to the distribution of, the
Settlement Fund unless otherwise ordered by the Court or provided in the Stipulation.
7.

The Court approves, as to form and content, the Notice of Pendency and

Proposed Partial Settlement of Class Action (the “Notice”), the Summary Notice, and
the Proof of Claim and Release form (the “Proof of Claim”) annexed as Exhibits A-1, A-2
and A-3 hereto, and finds that the mailing and distribution of the Notice and publishing
of the Summary Notice substantially in the manner and form set forth in ¶¶7-8 of this
Order meet the requirements of Rules 23(c) and (e) of the Federal Rules of Civil
Procedure, the Private Securities Litigation Reform Act of 1995, and due process, and is
the best notice practicable under the circumstances and shall constitute due and
sufficient notice to all Persons entitled thereto.

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8.

Pursuant to Rule 53 of the Federal Rules of Civil Procedure, the Court

appoints the firm of the Garden City Group, Inc. (“Claims Administrator”) to, under the
direction of Plaintiffs’ Lead Counsel, supervise and administer the notice procedure as
well as the processing of claims as more fully set forth below:
(a)

Not later than fifteen (15) business days after entry of this Order,

(the “Notice Date”), Plaintiffs’ Counsel shall cause a copy of the Notice and the Proof of
Claim, substantially in the forms annexed as Exhibits A-1 and A-3 hereto, to be mailed
by first class mail to all Settlement Class Members who can be identified with
reasonable effort;
(b)

Not later than twenty-eight (28) days after entry of this Order,

Plaintiffs’ Counsel shall cause the Summary Notice attached as Exhibit A-2 hereto to be
published three times on a national newswire, such as Business Wire or PR Newswire,
with no less than three (3) business days between each publication; and
(c)

Not later than fifteen (15) days after entry of this Order, Plaintiffs’

Counsel shall cause the Stipulation and its Exhibits to be posted on the following
website: www.gcginc.com/cases/CrocsSecuritiesLitigation; and
(d)

At least seven (7) calendar days prior to the Settlement Hearing,

Plaintiffs’ Counsel shall cause to be served on Settling Defendants’ counsel and filed
with the Court proof, by affidavit or declaration, of such mailing and publishing. Such
proof should also include proof of any notice to beneficial owners under ¶9 hereof.
9.

The Claims Administrator shall use reasonable efforts to give notice to

brokers and other nominees who hold Crocs securities purchased or acquired during
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the period between April 2, 2007 and April 14, 2008, inclusive. Such brokers and other
nominees are directed to either (i) send the Notice and the Proof of Claim to all
beneficial owners of such Crocs securities within ten (10) calendar days after receipt
thereof, or (ii) send a list of the names and addresses of such beneficial owners to the
Claims Administrator within ten (10) calendar days of receipt thereof, in which event the
Claims Administrator shall promptly mail the Notice and Proof of Claim to such
beneficial owners within seven (7) calendar days after receipt thereof.

Plaintiffs’

Counsel shall, if requested, reimburse banks, brokerage houses, or other nominees
solely for their reasonable out-of-pocket expenses incurred in identifying and providing
notice to beneficial owners, who are Settlement Class Members, out of the Settlement
Fund, which expenses would not have been incurred except for the identifying and
sending of such Notice and Proof of Claim, subject to further order of this Court with
respect to any dispute concerning such compensation.
10.

All Members of the Settlement Class shall be bound by all determinations

and judgments in the Action concerning the Settlement, including, but not limited to, the
releases provided for therein, whether favorable or unfavorable to the Settlement Class,
regardless of whether such Persons or entities seek or obtain any distribution from the
Settlement Fund by any means, including, without limitation, by submitting a Proof of
Claim or any similar document.
11.

Pending final determination of whether the Stipulation should be

approved, Plaintiffs and all other Settlement Class Members, and Plaintiffs’ Counsel,

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are barred and enjoined from commencing or prosecuting any action asserting any
Released Claims against any Released Parties.
12.

Settlement Class Members who wish to participate in the Settlement shall

complete and submit Proof of Claim forms in accordance with the instructions contained
therein. Unless the Court orders otherwise, all Proof of Claim forms must be
postmarked no later than one hundred and twenty days (120) from entry of this Order.
Any Settlement Class Member who does not timely submit a Proof of Claim within the
time provided for shall be barred from sharing in the distribution of the proceeds of the
Net Settlement Fund, unless otherwise ordered by the Court, but shall nevertheless be
bound by a final judgment entered by the Court and will in all other respects be subject
to and bound by the terms and provisions of the Stipulation, the releases contained
therein, and the Class Judgment, and will be permanently barred and enjoined from
bringing any action, claim, or other proceeding of any kind against any Released Party
concerning any Released Claim (including any Unknown Claim).
13.

Any Member of the Settlement Class may request exclusion from the

Settlement Class by submitting a written request for exclusion postmarked no later than
ninety (90) days after entry of this Order and shall be addressed to:
Crocs Securities Litigation
Claims Administrator
c/o GCG
PO Box 9889
Dublin, OH 43017-5789
[phone]

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To be valid, all requests for exclusions must include: (a) such Person’s name, address,
and telephone number, along with a clear statement that such Person wishes to be
excluded from the Settlement Class; and (b) the number and type of Crocs securities
such Person purchased or acquired during the Settlement Class Period, the number
and type of securities sold during the Settlement Class Period, if any, and the dates of
such purchases and sales.

All Persons who submit valid and timely requests for

exclusion (“Requests for Exclusion”) in the manner set forth in this order shall have no
rights under the Stipulation, shall not share in the distribution of the Net Settlement
Fund, and shall not be bound by the Stipulation or the Class Judgment entered in the
Action.
14.

Plaintiffs’ Counsel shall cause to be provided to counsel for the Settling

Defendants copies of all Requests for Exclusion as provided in the Stipulation.
15.

Any Member of the Settlement Class may enter an appearance in the

Action, at his, her, or its own expense, individually or through counsel of his, her, or its
own choice, pursuant to the process set forth in the Notice. Any Class Member desiring
to enter an appearance in the Action, individually or through counsel of his, her, or its
own choice, at his, her, or its own expense, must do so no later than ninety (90) days
after entry of this Order. If a Settlement Class Member does not enter an appearance,
he, she, or it will be represented by Plaintiffs’ Counsel.
16.

Any Member of the Settlement Class may object to approval of the

proposed Settlement of the Action, the Plan of Allocation and/or Plaintiffs and Plaintiffs’
Counsel’s request for an award of attorneys’ fees and/or reimbursement of expenses;
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provided, however, that no Settlement Class Member or any other Person shall be
heard or entitled to contest the approval of these matters unless that Person has filed
with the Clerk of the United States District Court for the District of Colorado, and
delivered by hand or sent by first class mail to Plaintiffs’ Counsel and counsel for the
Settling Defendants, written objections and copies of any papers and briefs that include:
(a) such Person’s or entity’s name, address, and telephone number, along with a
representation as to whether such Person or entity intends to appear to be heard at the
Settlement Hearing; (b) a statement of the reason(s) for objection; (c) proof of all
purchases, acquisitions or sales of Crocs securities during the Settlement Class Period
indicating, without limitation, the exchange upon which the securities were purchased,
acquired, or sold and the price(s) paid and received; and (d) if such Person or entity has
indicated that he, she, or it intends to appear at the Settlement Hearing, the identities of
any witnesses that he, she, or it may call to testify and any exhibits that he, she, or it
intends to introduce into evidence at the Settlement Hearing. Any such objections must
be filed with the Court and received by the following counsel at the addresses below no
later than ninety (90) days after entry of this Order:
Clerk of the Court
UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO
Alfred A. Arraj United States Courthouse
Room A-105
901 19th Street
Denver, Colorado 80294-3589

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Plaintiffs’ Counsel:
David Brower
BROWER PIVEN
A Professional Corporation
488 Madison Avenue, 8th Floor
New York, NY 10022
Counsel for Settling Defendants:
Paul T. Friedman
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, CA 94105
17.

Any Member of the Settlement Class who does not make his, her, or its

objection in the manner provided shall be deemed to have waived such objection and
shall forever be foreclosed from making any objection to the fairness or adequacy of the
proposed Settlement as set forth in the Stipulation, to the Plan of Allocation, or to the
award of attorneys’ fees and/or expenses to Plaintiffs’ Counsel or Plaintiffs, unless
otherwise ordered by the Court.
18.

All funds held by the Escrow Agent shall be deemed and considered to be

in custodia legis of the Court, and shall remain subject to the jurisdiction of the Court,
until such time as such funds shall be invested and distributed pursuant to the
Stipulation and/or further order(s) of the Court.
19.

All opening briefs in support of the Settlement, the Plan of Allocation, and

the application by Plaintiffs’ Counsel for attorneys’ fees or reimbursement of expenses
shall be filed and served no later than sixty (60) days after the entry of this Order.
20.

Any reply papers to any timely filed objections to the Settlement, the Plan

of Allocation, or any application for an award of fees and expenses by Plaintiffs’
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Counsel or Plaintiffs shall be filed and served no later than seven (7) calendar days
before the Settlement Hearing.
21.

Neither the Settling Defendants nor the Released Parties shall have any

responsibility for or liability with respect to the Plan of Allocation or any application for
attorneys’ fees or reimbursement of expenses submitted by Plaintiffs’ Counsel or
Plaintiffs, and such matters will be considered separately from the fairness,
reasonableness, and adequacy of the Settlement.
22.

At or after the Settlement Hearing, the Court shall determine whether the

Plan of Allocation and the request for an award of attorneys’ fees and/or reimbursement
of expenses by Plaintiffs and Plaintiffs’ Counsel shall be approved.
23.

All reasonable expenses incurred by Plaintiffs’ Counsel and the Claims

Administrator in identifying and notifying Settlement Class Members, as well as
administering the Settlement Fund, including the payment of any Taxes and Tax
Expenses, shall be paid as set forth in the Stipulation. In the event the Settlement is not
approved by the Court, or otherwise fails to become effective for any reason, neither the
Plaintiffs nor Plaintiffs’ Counsel shall have any obligation to repay any amounts actually
and properly disbursed from the Settlement Fund.
24.

In the event that the Settlement does not become Final in accordance with

the terms of the Stipulation or the Effective Date does not occur, then this Order shall be
rendered null and void to the extent provided by and in accordance with the Stipulation
and shall be vacated and, in such event, all orders entered and releases given in

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connection herewith shall be null and void to the extent provided by and in accordance
with the Stipulation.
25.

Neither the Stipulation, nor any of its terms or provisions, nor any of the

negotiations, discussions, or proceedings connected with it, shall be construed as an
admission or concession by the Settling Defendants or the Released Parties of the truth
of any of the allegations in the Action, or of any liability, fault, omission, or wrongdoing
of any kind, and shall not be used against or offered against any Settling Defendant or
any Released Party in any way for any reason, including without limitation, as set forth
in ¶9.4 of the Stipulation.
26.

The Court reserves the right to adjourn the date of the Settlement Hearing

without further notice to the Members of the Settlement Class, and retains jurisdiction to
consider all further applications arising out of or connected with the proposed
Settlement. The Court may approve the Settlement, with such modifications as may be
agreed to by the Settling Parties, if appropriate, without further notice to the Settlement
Class.

IT IS SO ORDERED.

DATED: ___August 28, 2013_

__

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s/Philip A. Brimmer_______________
Philip A. Brimmer
United States District Judge