IN RE LYFT, INC. DERIVATIVE LITIGATION

• Court: District Court, N.D. California
• Decided: October 16, 2024
• Docket: 4:20-cv-09257
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 In Re Lyft, Inc. Derivative Litigation Case No. 20-cv-09257-HSG

8 ORDER GRANTING PLAINTIFF’S UNOPPOSED MOTION FOR 9 PRELIMINARY APPROVAL OF SETTLEMENT 10 Re: Dkt. No. 60 11

12 13 Pending before the Court is Plaintiffs’ unopposed motion for preliminary approval of the 14 settlement reached in their consolidated shareholder derivative action. See Dkt. No. 60 (“Mot.”). 15 The Court held a hearing on the motion on August 29, 2024. For the reasons detailed below, the 16 Court GRANTS the motion. 17 I. BACKGROUND 18 A. Factual Allegations 19 This is a shareholder derivative action on behalf of nominal defendant Lyft, Inc. (“Lyft”) 20 against several Lyft officers and directors (collectively “Individual Defendants”).1 Plaintiffs 21 allege that the Individual Defendants breached their fiduciary duty by failing, among other things, 22 to: “(1) prevent or remediate the rampant sexual and physical assault committed by Lyft drivers 23 against Lyft passengers; (2) provide an adequate reporting mechanism, oversight of personnel, 24 training, or disciplinary avenues to prevent or at least remedy the known problem of sexual and 25 physical assault; or (3) implement an adequate background check system to effectively screen Lyft 26

27 1 The “Individual Defendants” include Logan Green, John Zimmer, Brian Roberts, Prashant 1 drivers, particularly drivers with known histories of committing past acts of sexual misconduct 2 and/or harassment.” Mot. at 9–10; Verified Shareholder Derivative Complaint (“Compl.”) ¶ 19.2 3 Plaintiffs further allege that these Individual Defendants made “a series of false and misleading 4 statements in connection with Lyft’s March 28, 2019 initial public offering (“IPO”).” Mot. at 10; 5 Compl. ¶¶ 1, 16.3 According to Plaintiffs, the alleged false and/or misleading statements failed to 6 disclose that: “(1) passengers had reported to Lyft being verbally and physically assaulted, 7 sexually harassed, and raped by Lyft drivers even prior to the IPO; (2) it was likely that Lyft 8 would sustain damage to its reputation and also be subject to legal liability as a consequence of 9 numerous and still increasing sexual assaults perpetrated by the Company’s drivers; (3) numerous 10 riders of the Company’s electronic bikes were caused to sustain injuries such as scrapes, bruising, 11 broken bones, and damaged limbs as a result of a defect in the braking system of Lyft’s electronic 12 bikes; (4) riders injured by the defective braking system had complained to the Company before 13 Lyft went public on March 28, 2019; (5) Lyft’s transformation into a multimodal transportation 14 network was being disrupted by safety issues with their bikes; and (6) Lyft failed to maintain 15 internal controls.” Compl. at ¶ 16. 16 Based on this alleged misconduct, Plaintiffs assert claims on behalf of Lyft against the 17 Individual Defendants for alleged breaches of fiduciary duties, unjust enrichment, abuse of 18 control, gross mismanagement, waste of corporate assets, and for contribution under Section 11(f) 19 of the Securities Act of 1933 and Section 21D of the Securities Exchange Act of 1934. Mot. at 7. 20 B. Procedural Background 21 This consolidated action combines four federal shareholder derivative actions filed against 22 the Individual Defendants on behalf of nominal defendant Lyft between September 2020 and 23 February 2021. In January 2021, then-Magistrate Judge Jacqueline Scott Corley consolidated 24 three of these actions: Mehta v. Green, Case No. 1:20-cv-01326 (D. Del.) (later Case No. 4:20-cv- 25 2 For ease of reference, the Court refers to the PDF pages rather than the document’s internal 26 pagination unless otherwise noted. 3 Plaintiffs designated the Verified Shareholder Derivative Complaint filed by Yao Hong Kok in 27 Hong Kok v. Green, et al., Case No. 3:20-cv-09272 on December 21, 2020, as the operative 1 09364 (N.D. Cal.)), Chenoy v. Zimmer, Case No. 4:20-cv-09257 (N.D. Cal.), and Hong Kok v. 2 Green, Case No. 3:20-cv-09272 (N.D. Cal.). Mot. at 11; Dkt. No. 9. In February 2021, Plaintiff 3 Brad Shuman filed a similar shareholder derivative action, Shuman v. Green, Case No. 4:21-cv- 4 01263 (N.D. Cal.), which the Court also consolidated into the above-captioned action. Dkt. No. 5 37. 6 In February 2021, the Court granted the parties’ request to stay this consolidated case in 7 light of In re Lyft, Inc. Securities Litigation, No. 4:19-cv-02690 (“Federal Securities Action”), a 8 factually-related securities class action then pending before the Court. See Dkt. No. 34. The 9 parties in that case reached a class-wide settlement, which the Court approved in August 2023, and 10 the Federal Securities Action was dismissed in October 2023. Mot. at 13.4 Following the Court’s 11 approval of the parties’ class action settlement in the Federal Securities Action, the parties in this 12 case began settlement negotiations. Id. The parties informed the Court that they reached a 13 tentative settlement on May 28, 2024. Dkt. No. 51. 14 C. Settlement Agreement 15 The key terms of the Stipulation of Settlement, Dkt. No. 60-2 (“Settlement Agreement” or 16 “SA”), are as follows: 17 Settlement Benefits: Lyft will keep the corporate governance reforms set forth in Exhibit 18 A of the Settlement Agreement in place for at least three years. See Dkt. No. 60-2, Ex. A. These 19 reforms include, among other things, Lyft’s amended Clawback Policy, changes to Lyft’s Code of 20 Business Conduct and Ethics, amendments to Lyft’s Compensation Committee Charter, and 21 changes to Lyft’s Corporate Governance Guidelines. Id. Lyft will also post a link to its 22 Compliance and Ethics Hotline on the Lyft website within 90 days of the settlement’s final 23 approval. Id. Consistent with Exhibit A of the Settlement Agreement, Lyft will undertake efforts 24 to improve safety compliance and awareness by (1) adding a user safety executive to Lyft’s 25 Culture of Ethics and Compliance Committee, and (2) promoting safety features like the “Alert 26 911 Safety Feature” and “Safety Phone Calls.” Id. Within 12 months of the settlement’s final 27 1 approval, Lyft will also make at least one further post on its blog (https://www.lyft.com/blog) 2 about in-app safety features available to riders and drivers. Id. 3 Releases: Under the terms of the Settlement Agreement, the “Releasing Persons shall be 4 deemed to have fully, finally, and forever released, relinquished, and discharged the Released 5 Claims (including Unknown Claims) against the Released Persons and any and all derivative 6 claims arising out of, relating to, or in connection with the defense, settlement, or resolution of the 7 Federal Derivative Actions against the Released Persons.” SA § 5.1.

8 The Releasing Persons are “Plaintiffs (individually, collectively, and derivatively on behalf 9 of Lyft), all other Applicable Lyft Shareholders, Plaintiffs’ Counsel, and Lyft.” Id. § 1.23.

10 The Released Persons are “Lyft, the Individual Defendants, and their Related Persons.” Id. § 1.22. 11 Released Claims means “[A]ny and all actions, suits, claims, debts, rights, liabilities, and 12 causes of action, whether under federal, state, local, statutory, common law, foreign law, or 13 any other law, rule or regulation, including both known and Unknown Claims (as defined in paragraph 1.26 below), that: (a) were asserted or could have been asserted by any 14 shareholder derivatively on behalf of Lyft, or by Lyft, against any Released Person; and (b) concern, arise out of, or relate to (i) the allegations asserted in the Federal Derivative 15 Actions or the matters and occurrences that were alleged in the Federal Derivative Actions, or (ii) the Settlement, defense or resolution of the Federal Derivative Actions, except for 16 any claims to enforce the Settlement. Excluded from the term ‘Released Claims’ are all 17 claims alleged in the Federal Securities Action and the State Securities Action.” Id. § 1.21.

18 Notice: Lyft will provide notice of the proposed settlement, see Dkt. No 60-2, Ex. C 19 (“Notice”), an abbreviated summary notice of the proposed settlement, see Dkt. No 60-2, Ex. D 20 (“Summary Notice”), and the date of the settlement hearing to “Applicable Lyft Shareholders.” 21 SA § 3.2.5 In addition, within 15 days of this Order, Lyft will (1) publish the Summary Notice 22 once in the national edition of Investor’s Business Daily and (2) will post both the Settlement 23 24 25 5 Under the terms of the Settlement Agreement, “Applicable Lyft Shareholders” means “any 26 Person who owned Lyft common stock as of the date of the execution of this Stipulation and continues to hold their Lyft common stock as of the date of the Settlement Hearing, excluding the 27 Individual Defendants, the officers and directors of Lyft, members of their immediate families, Agreement and the Notice on an Internet page accessible via the “Investors” page of Lyft’s 1 2 website. Id. § 3.3. Plaintiffs’ Counsel will publish the Summary Notice one time over PR 3 Newswire. Id. 4 Attorneys’ Fees and Costs: Plaintiffs’ counsel will seek $700,000 in attorneys’ fees and 5 expenses from the Individual Defendants’ insurers. Id. § 4.1. 6 Service Award: Plaintiffs’ counsel may apply to the Court for a service award of up to 7 $1,500 for each of the Plaintiffs. These awards are to be drawn from funds allocated for Plaintiffs’ 8 attorneys’ fees and expenses. Payment of these awards is subject to the Court’s approval. Id. § 9 10 4.2. 11 II. PRELIMINARY SETTLEMENT APPROVAL 12 A. Legal Standard 13 Pursuant to Federal Rule of Civil Procedure 23.1, “[a] derivative action may be settled, 14 voluntarily dismissed, or compromised only with the court’s approval.” Fed. R. Civ. P. 23.1(c). 15 “Rule 23 requires courts to employ a two-step process in evaluating a class action or derivative 16 action settlement.” In re Wells Fargo & Co. Sharehold Derivative Litig., No. 16-CV-05541-JST, 17 2019 WL 13020734, at *4 (N.D. Cal. May 14, 2019). First, the court “must make a preliminary 18 determination that the settlement is fair, reasonable, and adequate” under Rule 23(e)(2). Id. 19 (internal citation and quotations omitted). Only if a settlement is “fundamentally fair, adequate, 20 and reasonable” may it be approved. In re Hewlett-Packard Co. S’holder Derivative Litig., No. 21 3:12-CV-06003-CRB, 2015 WL 1153864, at *3 (N.D. Cal. Mar. 13, 2015) (internal citation and 22 quotations omitted). “[I]f the court preliminarily approves a derivative action settlement, notice 23 ‘must be given to shareholders or members in the manner that the court orders.’” In re Wells 24 Fargo & Co. Sharehold Derivative Litig., 2019 WL 13020734, at *4 (quoting Fed. R. Civ. P. 25 23.1(c)). The court then holds a hearing to “make a final determination whether the settlement is 26 ‘fair, reasonable, and adequate.’” Id. (quoting Fed. R. Civ. P. 23(e)(2)). 27 In the context of a derivative action, courts evaluate fairness, reasonableness, and adequacy 1 by considering a range of factors, such as “the strength of the plaintiffs’ case; the risk, expense, 2 complexity, and likely duration of further litigation; . . . the amount offered in settlement; the 3 extent of discovery completed and the stage of the proceedings; [and] the experience and views of 4 counsel . . . . ” Id. (internal citation and quotations omitted). Courts also consider “the extent of 5 the benefit to be derived from the proposed settlement by the corporation, the real party in 6 interest.” In re Pinterest Derivative Litig., No. C 20-08331-WHA, 2022 WL 484961, *3 (N.D. 7 Cal. Feb. 16, 2022) (internal citation and quotations omitted). And courts ensure that the proposed 8 settlement is not “the product of fraud or overreaching by, or collusion between, the negotiating 9 parties,” In re Hewlett-Packard, 2015 WL 1153864, at *3 (internal citation and quotation 10 omitted). See also Lloyd v. Gupta, No. 15-CV-04183-MEJ, 2016 WL 3951652, at *4 (N.D. Cal. 11 July 22, 2016) (internal citation and quotations omitted) (noting that courts consider whether “the 12 settlement is the result of arm’s-length negotiations in which plaintiffs’ counsel has effectively 13 represented the interest of the shareholder class, and whether the substantive terms of the 14 settlement are in the interests of [the company] and its shareholders relative to the likely rewards 15 of litigation.”). 16 At the preliminary approval stage, the Court need not definitively decide whether the 17 proposed settlement survives scrutiny under these standards: instead, it need only determine 18 whether the settlement falls “within the range of possible approval.” In re Tableware Antitrust 19 Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007) (internal citation and quotations omitted); see 20 In re Wells Fargo & Co. Sharehold Derivative Litig., 2019 WL 13020734, at *4. 21 B. Analysis 22 i. Benefits to the Corporation 23 “The principal factor to be considered in determining the fairness of a settlement 24 concluding a shareholders’ derivative action is the extent of the benefit to be derived from the 25 proposed settlement by the corporation, the real party in interest.” In re Apple Computer, Inc. 26 Derivative Litig., No. C 06-4128 JF (HRL), 2008 WL 4820784, at *2 (N.D. Cal. Nov. 5, 2008) 27 (internal citation and quotation omitted). This is a non-monetary settlement that requires Lyft to 1 Dkt. No. 60-2, Ex. A. While “[c]ourts have recognized that corporate governance reforms . . . 2 provide valuable benefits to public companies,” the Court is skeptical that the reforms presented 3 here are a benefit of the settlement rather than Lyft’s own independent actions. In re NVIDIA 4 Corp. Derivative Litig., No. C-06-06110-SBA-(JCS), 2008 WL 5382544, at *3 (N.D. Cal. Dec. 5 22, 2008) (internal citation and quotations omitted). See In re Pinterest Derivative Litig., No. C 6 20-08331-WHA, 2022 WL 2079712, at *3 (N.D. Cal. June 9, 2022) (expressing concern regarding 7 the value of corporate reforms when a “fair number of the reforms were already in place as a result 8 of the corporation’s own actions addressing the problem”). Lyft has already implemented most of 9 the specified reforms such that they are not “benefit[s] . . . derived from the proposed settlement.” 10 In re Apple Computer, Inc. Derivative Litig., 2008 WL 4820784, at *2. 11 The settlement does, however, fix these reforms in place for a three-year period, assuring 12 Lyft drivers, riders, and shareholders that these reforms are not immediately revocable. 13 Presumably, this three-year commitment should enhance consumer, investor, and employee trust 14 in Lyft’s safety and corporate governance. And because “potential buyers of [Lyft] stock likely 15 will view [the] reforms as an additional reason to purchase the stock,” this three-year period 16 should confer financial benefits to Lyft. Id.; see In re Pinterest Derivative Litig., No. C 20-08331- 17 WHA, 2022 WL 2079712, at *1 (N.D. Cal. June 9, 2022) (“The reaction of shareholders also 18 factors into assessing the fairness of a settlement.”). 19 Moreover, “without a settlement, Plaintiffs face[] the prospect of additional or collateral 20 litigation . . . further prolonging any resolution beneficial to [Lyft].” In re Wells Fargo & Co. 21 Sharehold Derivative Litig., 2019 WL 13020734, at *6. See In re Apple Computer, Inc, 2008 WL 22 4820784, at *3 (internal citation and quotations omitted) (“[T]he risk, expense, complexity, and 23 likely duration of further litigation are additional factors that should be considered in determining 24 the fairness of a proposed settlement.”). The parties acknowledge that Plaintiffs’ claims would 25 likely face substantial obstacles at the pleading and summary judgment stages, see Mot. at 21–22, 26 and courts have generally “recognized that it is often difficult for plaintiffs to prevail in derivative 27 actions.” In re Wells Fargo & Co. Sharehold Derivative Litig., 2019 WL 13020734, at *6. The 1 resolution beneficial to Lyft, and ensures that Plaintiffs do not end up with zero benefit. The 2 amount of time this case has been pending—the operative complaint was filed almost four years 3 ago—heightens these considerations. 4 Accordingly, at the preliminary approval stage, the Court is persuaded that the benefits of 5 the Settlement Agreement—principally the three-year commitment period—weigh in favor of 6 granting preliminary approval. 7 ii. Evidence of Conflicts and Signs of Collusion 8 To determine whether the settlement is “within the range of possible approval,” the Court 9 must “ensure that the agreement is not the product of fraud or overreaching by, or collusion 10 between, the negotiating parties.” In re NVIDIA Corp. Derivative Litig., 2008 WL 5382544, at *2 11 (internal citation and quotations omitted). See In re Pac. Enterprises Sec. Litig., 47 F.3d 373, 378 12 (9th Cir. 1995). The Ninth Circuit has directed district courts to look for “subtle signs of 13 collusion,” including whether the parties negotiated a “‘clear sailing’ arrangement (i.e., an 14 arrangement where defendant will not object to a certain fee request by class counsel).” Roes, 1-2 15 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1049 (9th Cir. 2019). “Although clear sailing provisions 16 are not prohibited, they by [their] nature deprive[] the court of the advantages of the adversary 17 process in resolving fee determinations and are therefore disfavored.” Id. at 1050. 18 Although the Settlement Agreement does not contain an express clear sailing provision, the 19 parties propose an “agreed-to” $700,000 award for attorneys’ fees and expenses. SA § 4.1. In 20 light of this ambiguous phrasing, the Court errs on the side of treating this provision as a version 21 of a clear sailing agreement. See Erguera v. CMG CIT Acquisition, LLC, No. 1:20-CV-1744 JLT 22 CDB, 2023 WL 4108071, at *11 (E.D. Cal. June 21, 2023). The Court “has a heightened duty to 23 peer into the [clear sailing] provision and scrutinize closely the relationship between attorneys’ 24 fees and benefit to the class, being careful to avoid awarding ‘unreasonably high’ fees simply 25 because they are uncontested.” In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 948 (9th 26 Cir. 2011). The Court has some skepticism that a $700,000 award is appropriate here and is 27 cognizant of its obligation to review fee awards with particular rigor. See Roes, 944 F.3d at 1051 1 settlement that were used to justify the requested attorneys’ fees.”). At the final approval stage, 2 the Court will carefully scrutinize the circumstances and determine what attorneys’ fee award is 3 appropriate in this case. See id. at 1056. 4 At this preliminary stage, the Settlement Agreement’s clear sailing provision does not 5 create an inference of collusion or conflict that warrants invalidating the settlement as a whole. 6 The Settlement Agreement does not contain a reversionary “kicker” arrangement, and any 7 approved service awards are drawn from the awarded attorneys’ fees. SA § 4. See In re Bluetooth 8 Headset Prod. Liab. Litig., 654 F.3d at 949 (“[A] kicker arrangement reverting unpaid attorneys’ 9 fees to the defendant rather than to the class amplifies the danger of collusion already suggested by 10 a clear sailing provision.”); In re Toys R Us-Delaware, Inc.--Fair & Accurate Credit Transactions 11 Act (FACTA) Litig., 295 F.R.D. 438, 458 (C.D. Cal. 2014) (“As the Ninth Circuit has noted . . . the 12 inference of collusion drawn from a clear sailing provision is reduced when the agreement lacks a 13 reversionary or ‘kicker provision.’”). Moreover, the parties assert that the Settlement Agreement 14 is “the product of arm’s length negotiations” and “significant give and take” between “zealous and 15 able counsel with extensive experience in complex derivative litigation.” Mot. at 19–20. The 16 Settlement Agreement also describes Plaintiffs’ counsel’s “extensive investigation and analysis” 17 of the alleged misconduct. SA § II. The involvement of counsel with significant experience in 18 derivative litigation, who appear “on behalf of all parties,” weighs in favor of a non-collusive 19 settlement. In re NVIDIA Corp. Derivative Litig., 2008 WL 5382544, at *3; see Lloyd, 2016 WL 20 3951652, at *5; In re Pinterest Derivative Litig., No. C 20-08331-WHA, 2022 WL 484961, at *7 21 (N.D. Cal. Feb. 16, 2022) (finding that representation by “various experienced counsel” may 22 support a settlement). 23 At this stage, the Court does not find any procedural inadequacies in the negotiating 24 process or substantive inadequacies in the Settlement Agreement’s provisions that bar preliminary 25 approval. 26 iii. Scope of Release 27 “The scope of releases factor[s] into the fairness of a settlement.” In re Pinterest 1 Under the Settlement Agreement, the “Released Claims” must “concern, arise out of, or relate to” 2 this derivate shareholder action. SA § 1.21. As such, the Released Claims “are limited to those 3 based upon the core of this litigation.” In re Hewlett-Packard, 2015 WL 1153864, at *5. 4 Accordingly, the “scope of release is sufficiently narrow.” In re LDK Solar Sec. Litig., No. C 07- 5 05182 WHA, 2010 WL 598361, at *2 (N.D. Cal. Feb. 17, 2010). See In re Zoran Corp. 6 Derivative Litig., No. C 06-05503 WHA, 2008 WL 941897, at *9 (N.D. Cal. Apr. 7, 2008) (“The 7 released claims should only be those made in the consolidated complaint and those closely related 8 thereto.”); Nen Thio v. Genji, LLC, 14 F. Supp. 3d 1324, 1334 (N.D. Cal. 2014) (“[T]he scope of 9 the release in the proposed settlement . . . is acceptable because the claims released are limited to 10 those based upon the facts set forth in the . . . Complaint.”). Moreover, claims alleged in the 11 Federal Securities Action and related state actions are specifically carved out of the Settlement 12 Agreement, bolstering the release provisions’ fairness. See SA § 1.21. Since the language of the 13 Settlement Agreement’s release is appropriately tied to the claims raised in the operative 14 complaint, the scope of release weighs in favor of granting preliminary approval. 15 iv. Preferential Treatment 16 Finally, the Court considers whether the Settlement Agreement provides preferential 17 treatment. The Settlement Agreement authorizes Plaintiffs’ counsel to “apply to the Court for a 18 service award of up to $1,500 for each of the Plaintiffs, only to be paid upon Court approval.” SA 19 § 4.2. “Derivative plaintiffs may . . . merit compensation for work done on behalf of the 20 [shareholders].” In re Wells Fargo & Co. Sharehold Derivative Litig., 2019 WL 13020734, at *8 21 (internal citation and quotations omitted). $1,500 is below what some courts have considered “the 22 presumptively reasonable amount of $5,000 for such awards.” Id. Again, the Court will decide at 23 the final approval stage whether the requested awards are warranted. But the Court finds that this 24 factor does not weigh against preliminary approval. 25 * * * 26 Having weighed the relevant factors, the Court preliminarily finds that the Settlement 27 Agreement is fair, reasonable, and adequate, and GRANTS preliminary approval. The Court 1 submitting their motion for final approval. 2 III. PROPOSED NOTICE PLAN 3 If the Court preliminarily approves a derivative action settlement, notice “must be given to 4 shareholders or members in the manner that the court orders.” Fed. R. Civ. P. 23.1(c). The Court 5 separately evaluates the proposed notice procedure. See In re Wells Fargo & Co. Sharehold 6 Derivative Litig., 2019 WL 13020734, at *8. In determining the appropriate notice method, “the 7 Court considers whether such notice would be sufficient to reach the majority of interested 8 stockholders.” Bushansky v. Armacost, No. 12-CV-01597-JST, 2014 WL 2905143, at *6 (N.D. 9 Cal. June 25, 2014) (citing Wright & Miller, Federal Practice & Procedure § 1839). 10 The parties propose to provide notice by (1) Lyft publishing the Summary Notice one time 11 in the national edition of Investor’s Business Daily; (2) Plaintiffs’ Counsel publishing the 12 Summary Notice one time over PR Newswire; and (3) Lyft posting the Settlement Agreement (and 13 exhibits thereto) and the Notice on an Internet page that Lyft creates which is accessible via the 14 “Investors” page of Lyft’s website. See Mot. at 23; SA § 3. Courts have found that similar 15 procedures satisfy Rule 23.1 and due process. See In re Hewlett-Packard Co. S'holder Derivative 16 Litig., 716 F. App’x 603, 608 (9th Cir. 2017) (affirming the district court’s decision to approve 17 notice procedures where the parties placed notice in prominent publications and posted the notice 18 on the company’s website); Bushansky, 2014 WL 2905143, at *6 (collecting cases). The Court 19 comes to the same conclusion here. 20 Similarly, the Court finds that the content of the proposed Notice “describes the terms of 21 the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come 22 forward and be heard.” In re Hewlett-Packard, 716 F. App’x at 609 (quoting Churchill Vill., 23 L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). The Notice summarizes: the litigation to 24 date, the proposed corporate governance reforms, the release provisions, the proposed attorneys’ 25 fee award, and relevant information about the hearing, including the deadline to file an objection. 26 See Dkt. No 60-2, Ex. C. The Summary Notice is similarly sufficient to alert and inform 27 interested parties about the proposed Settlement Agreement and its accompanying hearing. See 1 the reforms, hearing, and objection period). Accordingly, the Court finds that the proposed notice 2 process is “reasonably calculated, under all the circumstances, to apprise all [shareholders] of the 3 proposed settlement.” See Roes, 944 F.3d at 1045 (internal citation and quotations omitted). 4 IV. ATTORNEYS’ FEES 5 “[B]ecause of the danger that parties will overestimate the value of injunctive relief in 6 order to inflate fees, courts must be particularly careful when ascribing value to injunctive relief 7 for purposes of determining attorneys’ fees, and avoid doing so altogether if the value of the 8 injunctive relief is not easily measurable.” Id. at 1055. Under the terms of the proposed 9 Settlement Agreement, the Individual Defendants agreed to pay Plaintiffs’ counsel $700,000. 10 However, the Court need not—and does not—decide the issue of attorneys’ fees now. 11 Preliminary approval of the settlement is not an endorsement or pre-approval of any future fee 12 request, which will be considered at the final fairness hearing. 13 V. CONCLUSION 14 The Court GRANTS Plaintiffs’ motion for preliminary approval, Dkt. No. 60. All 15 proceedings and deadlines save those involving settlement are STAYED. The form of notice is 16 hereby APPROVED. The parties are DIRECTED to implement the proposed notice plan. The 17 parties are further DIRECTED to meet and confer and stipulate to a schedule of dates for each 18 event listed below, which shall be submitted to the Court within seven days of the date of this 19 Order. Shareholders shall be given at least six weeks from the publication of notice to file an 20 objection to the Settlement Agreement. Shareholders shall be given at least two weeks from the 21 deadline for the parties’ reply briefs regarding motions for attorneys’ fees and expenses to file 22 objections to any motions for attorneys’ fees and expenses. 23 Event Date 24 Deadline for notice of the settlement to be 25 published and posted consistent with the proposed notice plan 26 Filing deadline for motions for attorneys’ fees and expenses 27 Filing deadline for shareholders’ objections to 1 Filing deadline for the parties’ replies to shareholder settlement objections 2 Filing deadline for responses to motions for attorneys’ fees and expenses 3 Filing deadline for replies to motions for attorneys’ fees and expenses 4 Filing deadline for shareholders’ objections to 5 motions for attorneys’ fees and expenses Filing deadline for the final approval motion PO 6 Final approval settlement hearing Ps 7 g IT IS SO ORDERED. g || Dated: 10/16/2024

HAYWOOD S. GILLIAM, JR. 11 United States District Judge 12

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