Medoff v. CVS Caremark (RI)

2016 DNH 029

• Court: District Court, D. New Hampshire
• Decided: February 17, 2016
• Docket: 09-cv-554-JNL
• Status: Published

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND

Richard Medoff

v. Civil No. 09-cv-554-JNL Opinion No. 2016 DNH 029 CVS Caremark Corp., et al.

MEMORANDUM ORDER

In this securities class action, shareholders of CVS

Caremark Corporation alleged that CVS Caremark and certain of its

officers made fraudulent representations and omissions about the

integration of the CVS retail pharmacy business with Caremark’s

prescription benefit manager business. After several years of

litigation and several weeks of negotiation, the parties agreed

to settle this matter on August 24, 2015.1 They then jointly

moved this court for preliminary certification of the class and

preliminary approval of the settlement agreement. The court

granted that motion, and by order of November 9, 20152: (1)

preliminarily approved the settlement as set forth in the

1 The background of this action has been set forth in multiple prior orders. See City of Brockton Ret. Sys. v. CVS Caremark Corp., 2012 DNH 106; Mass. Ret. Sys. v. CVS Caremark Corp., 716 F.3d 229 (1st Cir. 2013); City of Brockton Ret. Sys. v. CVS Caremark Corp., 2013 DNH 178. Only the facts pertinent to this final approval of the proposed settlement agreement and the request for attorneys’ fees and expenses are set forth here. 2 Document no. 127. Stipulation of Settlement3; (2) preliminarily certified the class

for settlement purposes only; (3) preliminarily appointed co-lead

plaintiffs as representatives of the class and lead counsel

Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP as

class counsel; (4) approved, as to form and content, the notice

of proposed settlement, proof of claim and release form, and

summary notice,4 and ordered that the notice of proposed

settlement be distributed to class members; and (5) scheduled a

hearing regarding final approval of the settlement, class

counsel’s motion for attorneys’ fees and expenses.

The co-lead plaintiffs notified the class of the proposed

settlement and the scheduled hearing in accordance with the

court’s order and subsequently moved for final approval of the

settlement and the plan of allocation.5 They also requested that

the court award attorneys’ fees and expenses to lead counsel.6

On January 19, 2016, the court held a final approval

hearing. For the reasons discussed more fully below, the court

now: (1) grants final certification to the class described infra

in Part I, for purposes of settlement only; (2) appoints co-lead

3 Document no. 122. 4 Document no. 122 Exhibits A-1, A-2, and A-3. 5 Document no. 129. 6 Document no. 131.

2 plaintiffs as class representatives and lead counsel as class

counsel; (3) finally approves the stipulation of settlement and

plan of allocation; (4) finds that notice to the class satisfied

due process; and (5) grants lead counsel’s request for attorneys’

fees in the sum of 30% of the common pool and expenses in the sum

of $857,631.86.

I. Class certification

In its order of November 9, 2015,7 the court preliminarily

certified the following class of plaintiffs in this action:

All persons and entities who purchased, or otherwise acquired, CVS Caremark common stock between October 30, 2008 and November 4, 2009, inclusive, and were damaged thereby. Excluded from the Class are Defendants; the other officers and directors of CVS Caremark; members of the immediate families of any excluded person; the legal representatives, heirs, successors, or assigns of any excluded person or entity; and any entity controlled by, or in which Defendants have or had a controlling interest. Also excluded from the Class is any Class Member that validly and timely requests exclusion from the Class.

Co-lead plaintiffs now request that the court finalize that

certification.

To be certified, a class must satisfy all four requirements

of Rule 23(a) and at least one of the criteria outlined in Rule

23(b). Amchem Prods. v. Windsor, 521 U.S. 591, 613–14 (1997).

The proponent of the class must affirmatively demonstrate

7 Document no. 127.

3 compliance with Rule 23. Makuc v. Am. Honda Motor Co., 835 F.2d

389, 394 (1st Cir. 1987). Actions such as this, brought “on

behalf of shareholders alleging violations of federal securities

laws[,] are prime candidates for class action treatment . . . .”

Grace v. Perception Tech. Corp., 128 F.R.D. 165, 167 (D. Mass.

1989).

The decision to certify a class is within this court’s broad

discretion. See Bowe v. Polymedica Corp., 432 F.3d 1, 4 (1st Cir.

2005). Though the parties here have agreed to the certification

of the class, the court must still assure itself that the class

meets the requirements set forth in Federal Rule of Civil

Procedure 23. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131

S.Ct. 2541, 2552 (2011) (“certification is proper only if the

trial court is satisfied, after a rigorous analysis, that the

prerequisites of Rule 23(a) have been satisfied”); see also In re

Lupron Mktg. & Sales Practices Litig., 228 F.R.D. 75, 88 (D.

Mass. 2005) (in assessing a class for settlement purposes, it is

“incumbent on the district court to give heightened scrutiny to

the requirements of Rule 23 in order to protect absent class

members.”) (citing Amchem, 521 U.S. at 620).

4 A. Rule 23(a)

Before finally certifying the class, the court must satisfy

itself that the class meets each of the following requirements,

set forth by Rule 23(a) of the Federal Rules of Civil Procedure:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class.

As detailed briefly below, these requirements are easily

satisfied in a case such as this, brought by a class of

shareholders seeking to recover from a defendant for losses

allegedly caused by the same set of alleged misrepresentations or

omissions in statements made by the defendant or its officers.

1. Numerosity

To satisfy the numerosity requirement of Rule 23(a)(1), the

class must be “so numerous that joinder of all members is

impracticable.” As courts in this circuit have recognized,

“joinder is especially impracticable where the class is made up

of many shareholders,” as it is here. In re Sonus Networks, Inc.

Sec. Litig., 247 F.R.D. 244, 248 (D. Mass. 2007); see also Grace,

5 128 F.R.D. at 167 (“Even if the number of persons who bought

stock during the class period is unknown, numerosity can be

assumed where the number of shares traded is so great that common

sense dictates the class is very large.”). Here, where 654,345

notice packages have been sent to potential class members, see

Supp. Walter Decl. (document no. 144) ¶ 6, the court finds that

the numerosity requirement is satisfied.

2. Commonality

The commonality prong of the Rule 23(a) analysis requires

that “there are questions of law or fact common to the class.”

Fed. R. Civ. P. 23(a)(2). A single common factual or legal issue

suffices to satisfy this requirement. See Van W. v. Midland

Nat’l Life Ins. Co., 199 F.R.D. 448, 452 (D.R.I. 2001). Here,

plaintiffs allege that defendants made material

misrepresentations and omissions in public communications during

the relevant period. The claims of all plaintiffs arise out of

that uniform set of facts and implicate defendants’ alleged

violation of the Exchange Act thereby. As such, the commonality

requirement is met here. See, e.g., Kinney v. Metro Global

Media, Inc., No. CIV.A. 99-579 ML, 2002 WL 31015604, at *13

(D.R.I. Aug. 22, 2002) (finding commonality where “[a]ll

plaintiffs will have to prove the same misrepresentations and

6 omissions, as well as their materiality and Defendants’

knowledge.”).

3. Typicality

Rule 23(a)(3) further requires that “the claims or defenses

of the representative parties are typical of the claims or

defenses of the class.” A class representative’s claims “are

‘typical’ when their claims ‘arise from the same event or

practice or course of conduct that gives rise to the claims of

other class members, and . . . are based on the same legal

theory.’” In re Hannaford Bros. Co. Customer Data Sec. Breach

Litig., 293 F.R.D. 21, 27 (D. Me. 2013) (quoting Garcia–Rubiera

v. Calderon, 570 F.3d 443, 460 (1st Cir. 2009)) (further citation

omitted). Here, the claims of the co-lead plaintiffs are not

only typical of but identical to the claims of other plaintiffs.

As such, the co-lead plaintiffs’ claims would not be “subject to

unique defenses that would divert attention from the common

claims of the class” and the court would not need to “make highly

fact-specific or individualized determinations in order to

establish a defendant's liability to each class member.” In re

Tyco Int'l, Ltd. Multidistrict Litig., No. 03–cv–1352–PB, 2007 WL

1703067, at *2 (D.N.H. June 12, 2007) (quotations omitted).

Thus, the class representatives satisfy the typicality

requirement.

7 4. Adequacy of representation

To satisfy the adequate representation requirement, “[t]he

moving party must show first that the interests of the

representative party will not conflict with the interests of any

of the class members, and second, that counsel chosen by the

representative party is qualified, experienced and able to

vigorously conduct the proposed litigation.” Andrews v. Bechtel

Power Corp., 780 F.2d 124, 130 (1st Cir. 1985). The court must

also assess the capabilities of the proposed lead plaintiffs as

well. See Foley v. Buckley's Great Steaks, Inc., No.

14-CV-063-LM, 2015 WL 1578881, at *3 (D.N.H. Apr. 9, 2015)

(finding plaintiff would not adequately represent class because

she lacked knowledge about the litigation).

Defendants initially disputed whether the co-lead plaintiffs

in this action could adequately represent the class. See Opp. to

Mot. to Certify Class (document no. 103) at 11-18. Specifically,

defendants raised questions about whether co-lead plaintiffs’

relationship with the proposed lead counsel created a conflict

that would prevent co-lead plaintiffs from representing other

class members. Though that allegation is no longer in play, the

court must still satisfy itself that the co-lead plaintiffs do

not have interests that would conflict with those of other class

8 members, and that their chosen counsel are qualified. See

Amchem, 521 U.S. at 627. And it is so satisfied.

In their opposition to the certification motion, Defendants

observed that certain lawyers in lead counsel’s firms had

contributed to the campaigns of the chairmen of two of the lead

plaintiffs, Norfolk County Retirement System and Plymouth County

Retirement System. Opp. to Mot. to Certify Class (document no.

103) at 12. These donations, defendants alleged, may potentially

cause lead counsel to favor co-lead plaintiffs over the other

class members. However, as the Court of Appeals has observed,

speculative or hypothetical conflicts do not defeat Rule 23’s

adequacy requirement. In re Nexium Antitrust Litig., 777 F.3d 9,

21 (1st Cir. 2015) (citing Gunnells v. Healthplan Servs., Inc.,

348 F.3d 417, 430 (4th Cir. 2003)). In this case, there is no

indication that the mere spectre of a possible conflict coalesced

into anything more. Though these donations appear troubling at

first glance, there is no indication that the co-lead plaintiffs

selected class counsel because of those donations -- that is,

there is no evidence that class counsel “paid to play.”8 See In

re Diamond Foods, Inc., Sec. Litig., 295 F.R.D. 240, 256-57 (N.D.

8 “Pay to play” arrangements may “create[] incentives for firms to recommend filing suit even if the case is weak, leading to an increase in frivolous securities fraud claims.” Diamond Foods, 295 F.R.D. at 255. But a case, such as this one, that has survived a motion to dismiss, “cannot be deemed frivolous.” Id.

9 Cal. 2013). Thus, the court concludes that the donations do not

create a conflict that would prevent the co-lead plaintiffs and

lead counsel from adequately representing the class.

For the same reason, the fact that counsel brought the

claims asserted here to the co-lead plaintiffs’ attention under

an agreement to monitor plaintiffs’ investment portfolios for

potential cases also does not in and of itself create a conflict.

As several courts have concluded, the mere existence of a

monitoring agreement, absent evidence that counsel were hired

because of that agreement, is not dispositive. See, e.g., Iron

Workers Local No. 25 Pension Fund v. Credit-Based Asset Servicing

& Securitization, LLC, 616 F. Supp. 2d 461, 466 (S.D.N.Y. 2009)

(monitoring agreements not disqualifying); In re UTStarcom, Inc.

Sec. Litig., No. C 04-04908 JW, 2010 WL 1945737, at *8 (N.D. Cal.

May 12, 2010) (same). As there is no indication that lead

counsel in this case were hired to represent the co-lead

plaintiffs in this action under the monitoring agreement,9 the

agreement itself creates no conflict. The court therefore

concludes that the co-lead plaintiffs serve as adequate

representatives of the class under Rule 23(a)(4).10

9 To the contrary, at the final approval hearing, lead counsel assured the court that co-lead plaintiffs vetted several firms before settling on lead counsel. 10 Defendants also attacked the co-lead plaintiffs’ participation in and knowledge about the litigation as

10 B. Rule 23(b)(3)

In addition to satisfying the requirements of Rule 23(a),

plaintiffs must also demonstrate that one of the subsections of

Rule 23(b) applies to the proposed class. The parties here

propose that the class satisfies Rule 23(b)(3). Under this rule,

the court must find “that the questions of law or fact common to

class members predominate over any questions affecting only

individual members, and that a class action is superior to other

available methods for fairly and efficiently adjudicating the

controversy.” Fed. R. Civ. P. 23(b)(3).

Here, as in most securities fraud cases, the questions of

law and fact common to the proposed class would predominate over

any questions that may affect only individual class members. See

insufficient, Opp. to Mot. to Certify Class (document no. 103) at 18-19, but withdrew these concerns at the final settlement hearing. Acknowledging, as has Judge Smith, that “[i]n the context of complex securities litigation, attacks on the adequacy of the class representative based on the representative’s ignorance are rarely appropriate,” Rosen v. Textron, Inc., 369 F. Supp. 2d 204, 216 (D.R.I. 2005), the court concludes that co-lead plaintiffs adequately supervised the litigation. In particular, here, the Chairmen of the Norfolk and Brockton retirement systems and the Executive Director of the Plymouth retirement system conferred with counsel on litigation and settlement strategy, assisted with discovery, were deposed, and worked cooperatively with one another with respect to this action. Connolly Decl. (document no. 133) ¶ 4; Farmer Decl. (document no. 134) ¶ 4. The Chairman of the Norfolk retirement system further attended the August 2015 mediation that ultimately resulted in this settlement. Connolly Decl. (document no. 133) ¶ 4.

11 Amchem, 521 U.S. at 625 (“Predominance is a test readily met in

certain cases alleging . . . securities fraud”). The

predominating questions here include (1) whether the defendants

violated federal securities laws, (2) whether the defendants’

statements during the relevant period were materially false and

misleading, (3) whether those statements caused the subsequent

drop in the price of defendants’ stock and (4) the extent of the

class members’ injuries and the appropriate measure of damages.11

The class therefore satisfies the requirements of Rule 23(b)(3).

C. Class counsel

By its order of November 9, 2015, the court also

preliminarily appointed lead counsel, Robbins Geller Rudman &

Dowd LLP and Labaton Sucharow LLP, as class counsel. Having

considered the relevant factors invoked by Rule 23(g), and absent

any objection by the defendants or any class member, the court

concludes that lead counsel have fairly and adequately

11 In their objection to plaintiffs’ motion for class certification, the defendants raised only one impediment to certification under 23(b)(3): that plaintiffs’ damages model did not adequately comport with their theory of liability. Obj. to Mot. to Certify Class (document no. 103) at 20-25. It is not clear to the court that this would have impeded certification in light of the Basic presumption as invoked by the Supreme Court in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014). In any event, that allegation is no longer at issue.

12 represented the interests of the class and accordingly finalizes

that appointment.

II. Final approval of the class action settlement

Under Rule 23(e), the court may approve a class action

settlement “only after a hearing and on finding that it is fair,

reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). “The case

law offers ‘laundry lists of factors’ pertaining to

reasonableness, but ‘the ultimate decision by the judge involves

balancing the advantages and disadvantages of the proposed

settlement as against the consequences of going to trial or other

possible but perhaps unattainable variations on the proffered

settlement.’” Bezdek v. Vibram USA, Inc., Nos. 15-1207, -1208, -

1209, slip op. at 8 (1st Cir. Dec. 31, 2015) (quoting Nat'l Ass'n

of Chain Drug Stores v. New England Carpenters Health Benefits

Fund, 582 F.3d 30, 44 (1st Cir. 2009)). The court performs this

analysis in the shadow of the “strong public policy in favor of

settlements,” P.R. Dairy Farmers Ass’n v. Pagan, 748 F.3d 13, 20

(1st Cir. 2014) (internal quotations omitted), particularly in

class action litigation, In re Tyco Int'l, Ltd. Multidistrict

Litig., 535 F. Supp. 2d 249, 259 (D.N.H. 2007). And, having

performed it, the court concludes that the settlement proposed

13 here is fair, reasonable, and adequate for at least the following

reasons.

First and foremost, “[i]f the parties negotiated at arm’s

length and conducted sufficient discovery, [this court] must

presume the settlement is reasonable.” In re Pharm. Indus.

Average Wholesale Price Litig., 588 F.3d 24, 32-33 (1st Cir.

2009). This presumption is appropriate here. This case has

traversed some six years of litigation to reach this juncture,

including two motions to dismiss, an appeal to the Court of

Appeals, extensive fact discovery,12 resolution of several

discovery disputes, and the beginning of expert reports and

discovery.13 The settlement negotiations themselves took place

over the course of several weeks and the settlement itself was

finalized only after mediation facilitated by a former federal

judge experienced in complex securities cases. See Mem.

(document no. 129) at 6-7. Finally, counsel for all parties have

zealously represented the interests of their clients. They are

12 By the time the parties agreed to settle, lead counsel had subpoenaed 60 non-party witnesses, reviewed and analyzed over 1.3 million pages of documents, and taken or defended 15 depositions. See Joint Decl. (document no. 132) ¶ 6. 13 The parties also fully briefed a motion for class certification, which was denied without prejudice only after the parties informed the court of their settlement agreement. See Order of September 18, 2015.

14 experienced attorneys and knowledgeable about the facts, claims,

and defenses raised in this action and the court accordingly

affords some weight to their representations that this settlement

provides fair, reasonable, and adequate class relief.

Second, continuing this litigation would be complex and

expensive. The parties resolved this action toward the end of

fact discovery -- indeed, with a pending motion to compel that,

if granted (and the court need take no position on its merits

now), may have required a significant do-over of at least some

portions of electronic discovery. Continuing the case would

increase the cost of additional fact discovery, summary judgment

motions, expert reports and depositions, trial, and likely

subsequent appeals. Settlement at this juncture eliminates those

expenses and, perhaps more importantly, the uncertainties

inherent in taking this case to trial.

Third, the court concludes that the settlement accounts for

the uphill battle that the plaintiffs faced in establishing

liability and damages in this action. In particular, at trial,

plaintiffs would bear the burden of proving that the defendants’

statements caused the defendants’ stock to decline on November 5,

2009, and how much of that decline they caused. Mass. Ret. Sys.,

716 F.3d at 241 n.7. Defendants have vigorously argued that

other disclosures during the defendants’ earnings call held that

15 day caused the decline -- such as the disclosure that the

defendants would not meet their prior earnings projections. It

would also fall on plaintiffs to prove that the defendants’

alleged false statements were made with the appropriate scienter

and that the members of the class had suffered compensable

losses. A settlement agreement is reasonable when it accounts

for a realistic view of the particular risks and uncertainties

involved in the litigation, especially in a securities fraud case

where the defendants’ defenses to liability and loss causation

“could result in no liability and zero recovery for the class.”

In re StockerYale, Inc. Sec. Litig., No. 05-cv-177-SM, 2007 WL

4589772, at *3 (D.N.H. Dec. 18, 2007). The court is satisfied

that the parties entered this agreement with eyes wide open to

the risks inherent in continuing this litigation.

Fourth, the settlement amount is reasonable in light of the

class’s potential recovery. The co-lead plaintiffs retained a

damages expert, who estimated that a realistic assessment of the

maximum amount of recoverable damages was approximately $900

million.14 At 5.33% of that projection, the $48 million

14 In calculating the $900 million potential recovery, this expert assumed that co-lead plaintiffs would be able to prove at trial that actionable revelations about the integration at issue here caused 70% of the decline of the price of CVS Caremark stock on November 5, 2009, while the remaining 30% resulted from non- actionable statements, such as the downward revision of CVS Caremark’s projected earnings. Joint Dec’l (doc. no. 132) ¶ 66.

16 settlement amount is well above the median percentage of

settlement recoveries in comparable securities class action

cases. See Laarni T. Bulan, Ellen M. Ryan, & Laura E. Simmons,

Securities Class Action Settlements 2014 Review and Analysis, at

8-9 (Cornerstone Research 2014) (median percentage of recovery in

securities class action settlements overall and those with

estimated damages between $500 and $999 million in 2014 was 2.2%

of estimated damages); see also Dr. Rezno Comolli & Svetlana

Starykh, Recent Trends in Securities Class Action Litigation:

2014 Full-Year Review, at 28 (NERA Economic Consulting Jan. 20,

2015) (2014 median settlement amount in class action securities

cases was 6.5 million). A recovery percentage higher than half

of recoveries in a broadly comparable range appears reasonable to

the court, especially in light of the litigation risks described

supra. See, e.g., In re Merrill Lynch & Co. Inc. Research

Reports Sec. Litig., No. 02 MDL 1484 (JFK), 2007 WL 313474, at

*10 (S.D.N.Y. Feb. 1, 2007) (approving $40.3 million settlement

representing approximately 6.25% of estimated damages as being at

the “higher end of the range of reasonableness of recovery in

class action securities litigations”).

Fifth, the decision to settle and the decision as to the

amount of settlement were not made in a vacuum. As discussed

supra, the parties began seriously discussing settlement well

17 into the heart -- if not near to the end of -- fact discovery,

and with the benefit of expert consultation. The parties further

benefitted from the clarification of claims and defenses in this

action through litigating two motions to dismiss and an appeal.

Accordingly, the court finds that co-lead plaintiffs and their

counsel were sufficiently well-informed to make a calculated

judgment on the risks and benefits of settlement on behalf of the

class. A well-informed and calculated decision to settle for the

amount in question here weighs in favor of the reasonableness of

the settlement. See, e.g., StockerYale, 2007 WL 4589772, at *3.

Sixth and finally, the lack of any serious objection to the

settlement agreement from members of the class weighs in favor of

approving the settlement. See Wal-Mart Stores, Inc. v. Visa

U.S.A. Inc., 396 F.3d 96, 118 (2d Cir. 2005) (“If only a small

number of objections are received, that fact can be viewed as

indicative of the adequacy of the settlement.”); In re

Colgate-Palmolive Softsoap Antibacterial Hand Soap Mktg. & Sales

Practices Litig., No. 12-MD-2320-PB, 2015 WL 7282543, at *12

(D.N.H. Nov. 16, 2015) (the “small number of objections itself

counts in favor of approving the proposed settlement”). The

court has received only two objections to the proposed

18 settlement.15 Though the court is sympathetic to both objectors’

frustration at the relatively small recovery afforded individual

investors in securities class actions generally, and in this case

particularly, neither objection compels the court to find the

settlement unreasonable.16

Taking into account the totality of the circumstances in

play here; the court’s review of the documents submitted and the

parties’ arguments at the final settlement approval hearing; and

the court’s familiarity with this case, its procedural history,

the parties involved, and the work of their counsel, the court

finds that the proposed settlement is fair, reasonable, and

adequate to the settlement class. The court further finds that

the settlement was not the product of collusion and lacks any

indicia of unfairness. Finally, the court finds that the

settlement represents a fair and complete resolution of all

15 Document nos. 124 & 145. Though neither objection was submitted in strict adherence to the procedures set forth in its November 9, 2015 order, in the interest of fairness, the court considered both objections. 16 The first asks the court to reject any settlement that fails to recover at least 25% of damages calculated by assuming that defendants’ actionable statements caused 100% of the drop in CVS Caremark’s stock price on November 5, 2009. For the reasons discussed supra, such a settlement would fail to account for a realistic view of the risks inherent in proceeding with this litigation or the potential recoverable damages. The second objection, beginning with the salutation, “Dear Idiots,” takes issue with the proceedings in general but levels no specific challenge against the particulars of the proposed settlement.

19 claims asserted in a representative capacity on behalf of the

settlement class and should fully and finally resolve all such

claims. Accordingly, the court approves the settlement.

III. The plan of allocation

The court has reviewed the proposed plan of allocation,17

which must, like the settlement itself, be fair, reasonable, and

adequate. See Tyco, 535 F. Supp. 2d at 262. The plan, developed

by lead counsel in consultation with their retained damages

expert, contemplates calculating a class member’s claim to a

portion of the settlement on (1) the difference between the

amount of estimated alleged artificial inflation in CVS

Caremark’s common stock price on the date of purchase or

acquisition and the date of sale less the sale price, or (2) the

purchase price less the sale price, whichever is smaller. Such

an approach ties each class member’s portion of the settlement

amount to the number of shares the class member owned and the

price of the stock at time of sale. In the absence of any

objection to this apportionment, the court concludes that this

approach is grounded in a reasonable and rational basis, and is

fair to the members of the class. Cf. In re Cabletron Sys., Inc.

Sec. Litig., 239 F.R.D. 30, 35 (D.N.H. 2006) (approving plan of

17 Document no. 122-2 at 17-19.

20 allocation accounting for class members’ relative damages

depending on timing of stock sale). Accordingly, the plan of

allocation is approved.

IV. Notice to the class

To satisfy the requirements of due process, “[t]he court

must direct notice [of the proposed settlement] in a reasonable

manner to all members who would be bound by the proposal.” Fed.

R. Civ. P. 23(e)(1); see Reppert v. Marvin Lumber & Cedar Co.,

359 F.3d 53, 56 (1st Cir. 2004). The notice program need not be

perfect, but it must provide the “best notice that is practicable

under the circumstances, including individual notice to all

members who can be identified through reasonable effort.” Fed.

R. Civ. P. 23(c)(2)(B).

The forms of notice in this action, which the court

approved, contained all of the information required by Rule

23(c)(2)(B) of the Federal Rules of Civil Procedure and by the

PSLRA. See 15 U.S.C. § 78u-4(a)(7). The notice was issued in

accordance with the court’s November 9, 2015 order. Troubled by

the allegation of one class member that he received his notice

only the day before objections were due, the court directed class

counsel to show cause why the scheduled hearing should not be

continued to allow class members an extended opportunity to

object. See January 13, 2016 Order. Based on counsel’s

21 subsequent filing, see document no. 146, and arguments presented

at the settlement hearing, the court is satisfied that the class

was afforded “the best notice . . . practicable under the

circumstances.”18 Fed. R. Civ. P. 23(c)(2)(B); see also Reppert,

359 F.3d at 56 (notice requirements may be satisfied “by methods

of notification other than actual personal notice,” such as by

publication); Hill v. State St. Corp., No. CIV.A. 09-12146-GAO,

2015 WL 1734996, at *2 (D. Mass. Apr. 16, 2015) (due process

satisfied even though some class members received notice after

objection deadline).

V. Fees and expenses

Lead counsel have moved for an award of attorneys’ fees in

the amount of 30% of the settlement amount and $857,631.86 in

18 In light of this, and out of an abundance of caution, the court held the record of the January 19, 2016 hearing open for an additional 30 days. See Order of January 20, 2016. The court received no additional objections during that period. Nor did the parties. See Submission Concerning Class Reaction (document no. 152) at 1. Though the court and parties were made aware that a clerical error in the original notice transposed digits in the zip code of the address to which claimants were instructed to send their claim forms, see Letter of January 22, 2016 (document no. 151), the court is satisfied that lead counsel have taken appropriate remedial measures, see Supp. Mem. (document no. 149) at 2-3, and that the error does not affect the adequacy of notice to the class.

22 expenses.19 For the reasons discussed below, those requests are

granted.

A. Fees

“[A] litigant or a lawyer who recovers a common fund for the

benefit of persons other than himself or his client is entitled

to a reasonable attorney's fee from the fund as a whole.” Boeing

Co. v. Van Gemert, 444 U.S. 472, 478 (1980). “The common fund

doctrine is founded on the equitable principle that those who

have profited from litigation should share its costs.” In re

Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire

Litig., 56 F.3d 295, 305 n.6 (1st Cir. 1995).

“[I]n a common fund case the district court, in the exercise

of its informed discretion, may calculate counsel fees either on

a percentage of the fund basis or by fashioning a lodestar.” In

re Thirteen Appeals, 56 F.3d at 307. A percentage of the fund is

precisely that: under that method, counsel receive a percentage

of the recovered funds. Employing the lodestar method, on the

other hand, requires the court to “determin[e] the number of

hours productively spent on the litigation and multiply[] those

hours by reasonable hourly rates.” Id. at 305. The court’s

discretion may, “at times, involve using a combination of both

19 Document no. 131.

23 methods when appropriate.” Id. Courts in this Circuit have done

just that, employing “the percentage of fund . . . method with a

lodestar cross-check to evaluate the fee request.” In re Tyco

Int'l, Ltd. Multidistrict Litig., 535 F. Supp. 2d 249, 265

(D.N.H. 2007). In the end, the court must assure itself that the

award of fees, like the settlement itself, is reasonable. 15

U.S.C. § 78u-4(a)(6) (“Total attorneys’ fees and expenses awarded

by the court to counsel for the plaintiff class shall not exceed

a reasonable percentage of the amount of any damages and

prejudgment interest actually paid to the class.”).

While the First Circuit Court of Appeals has not established

specific factors to assess a common fund fee request, courts in

this circuit have considered such factors as:

(1) the size of the fund and the number of persons benefitted; (2) the skill, experience, and efficiency of the attorneys involved; (3) the complexity and duration of the litigation; (4) the risks of the litigation; (5) the amount of time devoted to the case by counsel; (6) awards in similar cases; and (7) public policy considerations, if any.

In re Lupron Mktg. & Sales Practices Litig., No. 01-CV-10861-RGS,

2005 WL 2006833, at *3 (D. Mass. Aug. 17, 2005); see also

Baptista v. Mut. of Omaha Ins. Co., 859 F. Supp. 2d 236, 242

(D.R.I. 2012). Taking these factors into account and concluding

that each in turn weighs in favor of the award sought by counsel

24 here, the court concludes that the fee requested by co-lead

counsel -- 30% of the common fund -- is reasonable.

First, the size of the fund here -- $48 million -- compares

favorably to settlements in other securities class actions, for

the reasons discussed supra, Part II at 16-17. Though the number

of people benefitted remains uncertain, as proofs of claims are

not due until March 23, 2016, some 654,345 potential class

members have been put on notice of the proposed settlement. This

results in a sizeable settlement for a class of not insignificant

size.

Second, the court finds that the attorneys involved on both

sides of this litigation have more than adequately demonstrated

their skill and experience through aggressively prosecuting and

defending this action.

Third, as described supra, Part II at 13-14, this has been a

complex action spanning some six years, an appeal, extensive

discovery, and some complex issues of law and fact.

Fourth, for the reasons discussed, again, supra, Part II at

15-16, plaintiffs in this action faced the not insignificant risk

of not recovering any damages at all. Where, as here, lead

counsel undertook this action on a contingency basis and faced a

significant risk of non-payment, this factor weighs more heavily

in favor of rewarding litigation counsel. See, e.g., In re

25 Lupron, 2005 WL 2006833, at *4 (“the risk assumed by an attorney

is perhaps the foremost factor in determining an appropriate

award”).

Fifth, counsel’s affidavits in support of this motion detail

some 32,000 hours spent investigating, prosecuting, and resolving

this litigation. At the rates proposed as reasonable by counsel,

this renders a lodestar value of roughly $16.1 million. By

comparison, the fee requested here -- approximately $14.4 million

-- comprises only 89% of that lodestar value. Balancing “the

interests of the Class Plaintiffs . . . with those of Class

Counsel, who has undoubtedly worked diligently for their

clients,” the court concludes that 30% of the common fund, a

discount from the lodestar value, is reasonable. Bezdek v.

Vibram USA Inc., 79 F. Supp. 3d 324, 350 (D. Mass. 2015) aff'd,

No. 15-1207, 2015 WL 9583769 (1st Cir. Dec. 31, 2015) (fee

representing 68% of lodestar value was reasonable) (internal

quotations omitted).

Sixth, as several courts have concluded, 30% is not out of

proportion with recovery percentages in large class action

litigations. See, e.g., In re Neurontin Mktg. & Sales Practices

Litig., No. 04-cv-10981-PBS, 2004 WL 5810625, at *3 (D. Mass.

Nov. 10, 2014) (observing that “nearly two-thirds of class action

fee awards based on the percentage method were between 25% and

26 35% of the common fund” and granting 28% of fund); In re Relafin

Antitrust Litig., 231 F.R.D. 52, 80-82 (D. Mass. 2005) (awarding

33% of $75 million settlement fund); StockerYale, 2007 WL

4589772, at *6 (awarding 33% of $3.4 million settlement).

Seventh, public policy supports rewarding counsel for

prosecuting securities class actions, especially where counsel’s

dogged efforts -- undertaken on a wholly contingent basis --

result in satisfactory resolution for the class. See Tyco, 535

F. Supp. 2d at 270.

Finally, the court does not wish to discount the fact that

co-lead plaintiffs consent to the request and, just as

significantly, no member of the class has objected to it. Cf.

Tyco, 535 F. Supp. 2d at 269 (approving fee request where only a

small percentage objected thereto). Taking into account this and

the several factors discussed above, the court concludes that the

fees requested by counsel in this action are reasonable.

B. Expenses

Counsel are entitled to recover “expenses, reasonable in

amount, that were necessary to bring the action to a climax.” In

re Fidelity/Micron Sec. Litig., 167 F.2d 735, 737 (1st Cir.

1999). Here, co-lead counsel have sought reimbursement in the

amount of $857,631.86 for expenses incurred in conjunction with

their representation of the class in this action. In exhibits to

27 their motion seeking fees and expenses, counsel have provided a

detailed breakdown of these expenses.20 In light of the

legitimate needs arising from the duration and complexity of this

case, and in the absence of any objection thereto, the court

finds that the expense request is reasonable. See In Re San Juan

Dupont Plaza Hotel Fire Litig., 111 F.3d 220, 233-38 (1st Cir.

1997).

VI. Conclusion

For the foregoing reasons, the court grants co-lead

plaintiffs’ motion for final approval of the settlement and plan

allocation21 by:

(1) finally certifying the class described infra in

Part I, for purposes of settlement only;

(2) appointing co-lead plaintiffs as Class

representatives and lead counsel as Class counsel;

(3) finally approving the Stipulation of Settlement and

Plan of Allocation;

(4) finding that notice to the Class satisfied due

process.

20 See Rothman Decl. (document no. 136) Exs. B through F; Gardner Decl. (document no. 137) Exs. B through G; Kusinitz Decl. (document no. 138) Ex. B; Chapman Decl. (document no. 139) Exs. B and C; Gross Decl. (document no. 140) Exs. B and C. 21 Document no. 128.

28 The court also grants lead counsel's request for attorneys'

fees22 in the sum of 30% of the common pool and expenses in the

sum of $857,631.86.

The clerk shall enter judgment accordingly and close the

case.

SO ORDERED.

____________________________ Joseph N. Laplante United States District Judge

Dated: February 17, 2016

cc: Barry J. Kucinitz, Esq. David A. Rosenfeld, Esq. Deborah R. Gross, Esq. Robert M. Rothman, Esq. William R. Grimm, Esq. David K. Baumgarten, Esq. Katherine M. Turner, Esq. Leslie C. Mahaffey, Esq. Margaret E. Keeley, Esq. Matthew H. Blumenstein, Esq. Mitchell R. Edwards, Esq. Steven M. Farina, Esq. Bailie L. Heikkinen, Esq. Christine M. Fox, Esq. Christopher M. Barrett, Esq. Eric W. Boardman, Esq. Guillaume Buell, Esq. Jonah H. Goldstein, Esq. Jonathan Gardner, Esq. Nicole Zeiss, Esq. Robert J. Robbins, Esq. Serena P. Hallowell, Esq. Theodore J. Pintar, Esq.

22 Document no. 130.