Packer v. Coinstar Inc et al

Filing 124

ORDER - Preliminary Approval Order Providing for Notice and Hearing in Connection with Proposed Class Action settlement (115) Motion for Order. Settlement Hearing set for 8/10/2012 at 09:00 AM before Judge Marsha J. Pechman, by Judge Marsha J. Pechman.(MD) Modified on 4/9/2012 - Order posted in All Related Cases(MD).

The Honorable Marsha J. Pechman

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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IN RE COINSTAR INC. SECURITIES
LITIGATION

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This Document Relates To:

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The Securities Class Action

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Case No. C11-133 MJP
PRELIMINARY APPROVAL ORDER
PROVIDING FOR NOTICE AND
HEARING IN CONNECTION WITH
PROPOSED CLASS ACTION
SETTLEMENT

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WHEREAS, on February 13, 2012, the Employees’ Retirement System of the State of

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Rhode Island (“Lead Plaintiff”), on behalf of itself and the Class, and Coinstar, Inc.

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(“Coinstar” or the “Company”), Paul Davis and J. Scott Di Valerio (the “Individual

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Defendants, and together with Coinstar, “Defendants”) entered into a Stipulation and

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Agreement of Settlement (the “Stipulation”) in the above-titled litigation (the “Action”), which

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is subject to review under Rule 23 of the Federal Rules of Civil Procedure and which, together

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with the exhibits thereto, sets forth the terms and conditions of the proposed settlement of the

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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claims alleged in the Consolidated Amended Complaint (“Complaint”) against Defendants on

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the merits and with prejudice (the “Settlement”); and the Court having read and considered the

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Stipulation and the accompanying exhibits; and the Parties to the Stipulation having consented

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to the entry of this Order;

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NOW, THEREFORE, IT IS HEREBY ORDERED, this 9th day of April, 2012 that:

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1.

The Court has reviewed the Stipulation and preliminarily finds the Settlement

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set forth therein to be fair, reasonable and adequate, subject to further consideration at the

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Settlement Hearing described below. This Order incorporates by reference the definitions in

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the Stipulation, and all capitalized terms used in this Order that are not otherwise defined herein

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shall have the same meanings as set forth in the Stipulation.
2.

Pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, the

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Court hereby preliminarily certifies, for the purposes of the Settlement only, the Action as a

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class action on behalf of all Persons who purchased the common stock of Coinstar from

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October 29, 2010 to February 3, 2011, inclusive, and who were allegedly damaged thereby.

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Excluded from the Class are: Defendants; the officers or directors of Coinstar during the Class

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Period; members of the immediate family of any officer or director of Coinstar during the Class

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Period; the legal representatives, heirs, successors or assigns of any officer or director of

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Coinstar during the Class Period; any entity in which Defendants have or had a controlling

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interest; and any person or entity who timely and validly seeks exclusion from the Class.

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3.

The Court preliminarily finds and concludes that the prerequisites of class action

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certification under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedures have been

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satisfied for the Class defined herein and for the purposes of the Settlement only, in that:

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(a)

the members of the Class are so numerous that joinder of all Class

Members is impracticable;

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(b)

there are questions of law and fact common to the Class Members;

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(c)

the claims of Lead Plaintiff are typical of the Class’s claims;

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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(d)

and protected the interests of the Class;

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Lead Plaintiff and Lead Counsel have fairly and adequately represented

(e)

the questions of law and fact common to Class Members predominate

over any individual questions; and

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(f)

a class action is superior to other available methods for the fair and

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efficient adjudication of the controversy, considering that the claims of Class Members in the

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Action are substantially similar and would, if tried, involve substantially identical proofs and

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may therefore be efficiently litigated and resolved on an aggregate basis as a class action; the

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amounts of the claims of many of the Class Members are too small to justify the expense of

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individual actions; and it does not appear that there is any interest among Class Members in

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individually controlling the litigation of their claims.

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4.

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

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purposes of the Settlement only, Lead Plaintiff is preliminarily certified as Class Representative

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for the Class, the law firm of Labaton Sucharow LLP is preliminarily appointed Class Counsel

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for the Class, and Zwerling, Schachter & Zwerling, LLP is preliminarily appointed Liaison

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Counsel for the Class.

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5.

A hearing (the “Settlement Hearing”) pursuant to Rule 23(e) of the Federal

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Rules of Civil Procedure is hereby scheduled to be held before the Court on August 10, 2012,

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at 9:00 a.m., in Courtroom 14206 for the following purposes:

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(a)

to determine whether the proposed Settlement is fair, reasonable and

adequate, and should be approved by the Court;

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(b)

to determine whether the proposed Final Order and Judgment

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(“Judgment”) as provided under the Stipulation should be entered, and to determine whether

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the release by the Class of the Released Claims, as set forth in the Stipulation, should be

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provided to the Released Defendant Parties;

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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(c)

to determine, for purposes of the Settlement only, whether the Class

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should be finally certified; whether Lead Plaintiff should be finally certified as Class

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Representative for the Class; and whether the law firm of Labaton Sucharow LLP should be

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finally appointed as Class Counsel and Zwerling, Schachter & Zwerling, LLP as Liaison

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Counsel for the Class;

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(d)

to determine whether the proposed Plan of Allocation for the Net

Settlement Fund is fair and reasonable and should be approved by the Court;

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(e)

to consider Lead Counsel’s application for an award of attorneys’ fees

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and reimbursement of litigation expenses (which may include an application for an award to

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Lead Plaintiff for reimbursement of its reasonable costs and expenses directly related to its

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representations of the Class); and

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(f)

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to rule upon such other matters as the Court may deem appropriate.

The Court reserves the right to approve the Settlement with or without

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modification and with or without further notice of any kind. The Court further reserves the

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right to enter the Judgment approving the Settlement regardless of whether it has approved the

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Plan of Allocation or awarded attorneys’ fees and/or expenses. The Court may also adjourn the

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Settlement Hearing or modify any of the dates herein without further notice to members of the

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Class.

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7.

The Court approves the form, substance and requirements of the Notice of

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Pendency of Class Action and Proposed Settlement and Motion for Attorneys’ Fees and

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Expenses (the “Notice”) and the Proof of Claim and Release form (“Proof of Claim”),

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substantially in the forms annexed hereto as Exhibits 1 and 2, respectively.

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8.

The Court approves the retention of The Garden City Group, Inc. as the Claims

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Administrator. The Claims Administrator shall cause the Notice and the Proof of Claim,

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substantially in the forms annexed hereto, to be mailed, by first-class mail, postage prepaid, on

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or before ten (10) business days after the date of entry of this Order (“Notice Date”), to all

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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Class Members who can be identified with reasonable effort. Coinstar, to the extent it has not

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already done so, shall provide, or cause to be provided, to Lead Counsel or the Claims

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Administrator, at no cost to Lead Plaintiff, Lead Counsel, the Class or the Claims

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Administrator, lists obtained from Coinstar’s stock transfer agent of the names and addresses of

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Coinstar’s registered shareholders during the Class Period within seven (7) calendar days of

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entry of this Order.

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The Claims Administrator shall use reasonable efforts to give notice to nominee

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purchasers such as brokerage firms and other persons or entities who purchased the publicly

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traded securities of Coinstar during the Class Period. Such nominee purchasers are directed,

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within seven (7) calendar days of their receipt of the Notice, to either: (i) provide the Claims

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Administrator with lists of the names and last known addresses of the beneficial owners, and

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the Claims Administrator is ordered to send the Notice and Proof of Claim promptly to such

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identified beneficial owners by first-class mail, or (ii) request additional copies of the Notice

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and Proof of Claim, and within seven (7) calendar days of receipt of such copies send them by

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first-class mail directly to the beneficial owners. Nominee purchasers who elect to send the

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Notice and Proof of Claim to their beneficial owners shall also send a statement to the Claims

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Administrator confirming that the mailing was made as directed. Additional copies of the

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Notice shall be made available to any record holder requesting such for the purpose of

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distribution to beneficial owners, and such record holders shall be reimbursed from the

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Settlement Fund, after receipt by the Claims Administrator of proper documentation, for their

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reasonable expenses actually incurred in sending the Notices and Proofs of Claim to beneficial

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owners.

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The Claims Administrator shall also post the Notice and Proof of Claim on its

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website. Lead Counsel shall, at or before the Settlement Hearing, file with the Court proof of

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mailing and posting of the Notice and Proof of Claim.

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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The Court approves the form of the Summary Notice of Pendency of Class

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Action and Proposed Settlement and Motion for Attorneys’ Fees and Expenses (the “Summary

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Notice”) substantially in the form annexed hereto as Exhibit 3, and directs that Lead Counsel

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cause the Summary Notice to be published in Investor’s Business Daily and transmitted over

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PR Newswire within fourteen (14) calendar days of the Notice Date. Lead Counsel shall, at or

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before the Settlement Hearing, file with the Court proof of publication of the Summary Notice.

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12.

The form and content of the notice program described herein, and the methods

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set forth herein of notifying the Class of the Settlement and its terms and conditions, meet the

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requirements of Rule 23 of the Federal Rules of Civil Procedure, Section 21D(a)(7) of the

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Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(a)(7), as amended by the Private

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Securities Litigation Reform Act of 1995 (the “PSLRA”), and due process, constitute the best

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notice practicable under the circumstances, and shall constitute due and sufficient notice to all

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persons and entities entitled thereto.

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13.

In order to be eligible to receive a distribution from the Net Settlement Fund, in

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the event the Settlement is effected in accordance with the terms and conditions set forth in the

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Stipulation, each Class Member shall take the following actions and be subject to the following

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conditions:

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(a)

A properly executed Proof of Claim, substantially in the form annexed

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hereto as Exhibit 2, must be submitted to the Claims Administrator, at the address indicated in

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the Notice, postmarked no later than 120 calendar days after the Notice Date. Such deadline

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may be further extended by Court order or by Lead Counsel in their discretion. Each Proof of

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Claim shall be deemed to have been submitted when postmarked (if properly addressed and

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mailed by first-class mail, postage prepaid) provided such Proof of Claim is actually received

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prior to the motion for an order of the Court approving distribution of the Net Settlement

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Fund. Any Proof of Claim submitted in any other manner shall be deemed to have been

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submitted when it was actually received at the address designated in the Notice. Any Class

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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Member who does not timely submit a Proof of Claim within the time provided for shall be

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barred from sharing in the distribution of the Net Settlement Fund, unless otherwise ordered

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by the Court.

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(b)

The Proof of Claim submitted by each Class Member must satisfy the

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following conditions, unless otherwise ordered by the Court: (i) it must be properly completed,

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signed and submitted in a timely manner in accordance with the provisions of the preceding

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subparagraph; (ii) it must be accompanied by adequate supporting documentation for the

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transactions reported therein, in the form of broker confirmation slips, broker account

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statements, an authorized statement from the broker containing the transactional information

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found in a broker confirmation slip, or such other documentation as is deemed adequate by

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Lead Counsel; (iii) if the person executing the Proof of Claim is acting in a representative

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capacity, a certification of her, his or its current authority to act on behalf of the Class Member

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must be included in the Proof of Claim; and (iv) the Proof of Claim must be complete and

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contain no material deletions or modifications of any of the printed matter contained therein

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and must be signed under penalty of perjury.

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(c)

As part of the Proof of Claim, each Class Member shall submit to the

jurisdiction of the Court with respect to the claim submitted.
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Class Members shall be bound by all orders, determinations and judgments in

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this Action, whether favorable or unfavorable, unless such Persons request exclusion from the

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Class in a timely and proper manner, as hereinafter provided. A Class Member wishing to

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make such an exclusion request shall mail the request in written form by first-class mail to the

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address designated in the Notice for such exclusions, such that it is received no later than

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twenty-one (21) calendar days prior to the Settlement Hearing. Such request for exclusion

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must state the name, address and telephone number of the person seeking exclusion, that the

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sender requests “exclusion from the Class in In re Coinstar, Inc. Securities Litigation, Case No.

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C11-133 MJP (W.D.Wash.)” and must be signed by such person. Such Persons requesting

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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exclusion are also directed to state: the date(s), price(s), and number(s) of shares of all

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purchases, acquisitions and sales of Coinstar common stock during the Class Period. The

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request for exclusion shall not be effective unless it provides the required information and is

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made within the time stated above, or the exclusion is otherwise accepted by the Court.

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15.

Class Members requesting exclusion from the Class shall not be eligible to

receive any payment from the Net Settlement Fund as described in the Stipulation and Notice.
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The Court will consider any Class Member’s objection to the Settlement, the

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Plan of Allocation, and/or the application for an award of attorneys’ fees or reimbursement of

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expenses only if such Class Member has served by hand or by mail his, her or its written

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objection and supporting papers such that they are received on or before twenty-one (21)

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calendar days before the Settlement Hearing, upon Lead Counsel, Jonathan Gardner, Labaton

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Sucharow LLP, 140 Broadway, New York, NY 10005 and Defendants’ Counsel, Barry M.

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Kaplan, Wilson Sonsini Goodrich & Rosati, P.C., 701 Fifth Avenue, Suite 5100, Seattle, WA

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98104-7036, on behalf of the Defendants, and has filed said objections and supporting papers

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with the Clerk of the Court, United States District Court for the Western District of

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Washington, U.S. Courthouse, 700 Stewart Street, Suite 2310, Seattle, WA 98101. Any Class

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Member who does not make his, her or its objection in the manner provided for in the Notice

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shall be deemed to have waived such objection and shall forever be foreclosed from making

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any objection to any aspect of the Settlement, to the Plan of Allocation, or to the request for

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attorneys’ fees and expenses, unless otherwise ordered by the Court, but shall otherwise be

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bound by the Judgment to be entered and the releases to be given. Attendance at the hearing is

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not necessary; however, persons wishing to be heard orally in opposition to the approval of the

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Settlement, the Plan of Allocation, and/or the application for an award of attorneys’ fees and

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other expenses are required to indicate in their written objection their intention to appear at the

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hearing. Persons who intend to object to the Settlement, the Plan of Allocation, and/or the

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application for an award of attorneys’ fees and expenses and desire to present evidence at the

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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Settlement Hearing must include in their written objections the identity of any witnesses they

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may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing.

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Class Members do not need to appear at the hearing or take any other action to indicate their

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approval.

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17.

Pending final determination of whether the Settlement should be approved, Lead

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Plaintiff, all Class Members, and each of them, and anyone who acts or purports to act on their

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behalf, shall not institute, commence or prosecute any action which asserts Released Claims

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against the Released Defendant Parties.

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18.

As provided in the Stipulation, prior to the Effective Date, Lead Counsel may

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pay the Claims Administrator a portion of the reasonable fees and costs associated with giving

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notice to the Class and the review of claims and administration of the Settlement out of the

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Settlement Fund without further approval from Defendants and without further order of the

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Court.

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19.

All papers in support of the Settlement, Plan of Allocation, and Lead Counsel’s

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request for an award of attorneys’ fees and expenses shall be filed with the Court and served on

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or before thirty-eight (38) calendar days prior to the date set herein for the Settlement Hearing.

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If reply papers are necessary, they are to be filed with the Court and served no later than seven

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(7) calendar days prior to the Settlement Hearing.

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20.

The passage of the Settlement Fund to the Escrow Account in accordance with

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the terms and obligations of the Stipulation is approved. No person who is not a Class Member

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or Lead Counsel shall have any right to any portion of, or to any distribution of, the Net

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Settlement Fund unless otherwise ordered by the Court or otherwise provided in the

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Stipulation.

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All funds held in escrow shall be deemed and considered to be in custodia legis

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of the Court, and shall remain subject to the jurisdiction of the Court until such time as such

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funds shall be disbursed pursuant to the Stipulation and/or further order of the Court.

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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If the Settlement fails to become effective as defined in the Stipulation or is

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terminated, then, in any such event, the Stipulation, including any amendment(s) thereof,

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except as expressly provided in the Stipulation, and this Preliminary Approval Order shall be

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null and void, of no further force or effect, and without prejudice to any Party, and may not be

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introduced as evidence or used in any actions or proceedings by any person or entity against or

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to the prejudice of the Parties, and the Parties shall be deemed to have reverted to their

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respective litigation positions in the Action immediately prior to January 11, 2012.

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23.

The Court retains exclusive jurisdiction over the Action to consider all further

matters arising out of or connected with the Settlement.
IT IS SO ORDERED

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Dated this 9th day of April, 2012

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______________________________
Marsha J. Pechman
United States District Judge

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ORDER FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT, APPROVAL OF NOTICE AND
SCHEDULING OF SETTLEMENT HEARING
C11-133 MJP

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