Wilhoite v. Hou

S.D. California

Wilhoite v. Hou

DecidedJuly 23, 2025

Docket3:23-cv-02333

StatusUnknown

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8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 NORMAN WILHOITE and JUDITH Case No. 23cv2333 BEN (MSB) 11 W TU IL S H IM O P IT L E E , H d O er L iv D at I i N ve G ly S , o I n N b C e . h , alf of 12 The Honorable Roger T. Benitez Plaintiffs, 13 vs. Order Granting an Award of 14 XIAODI HOU, MO CHEN, CHENG Attorneys’ Fees, Reimbursement of LU, GUOWEI “CHARLES” CHAO, Litigation Expenses, and Approval of 15 and HYDRON, INC., Service Awards 16 Defendants,

- and - 17 TUSIMPLE HOLDINGS, INC., 18 Nominal Defendant. 19 20 21 22 23 24 25 26 27 This matter having come before the Court on July 18, 2025, on Plaintiffs’ motion 1 for an Award of Attorneys’ Fees, Reimbursement of Litigation Expenses, and Approval 2 of Service Awards (the “Fee and Expense Application”), the Court, having considered 3 all papers filed and proceedings conducted herein, having found the Settlement of this 4 litigation to be fair, reasonable, and adequate, and otherwise being fully informed in the 5 premises and good cause appearing therefore; 6 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 7 1. This Order incorporates by reference the definitions in the Stipulation of 8 Settlement dated December 19, 2024 (the “Stipulation”), and all capitalized terms not 9 otherwise defined herein shall have the same meanings as set forth in the Stipulation. 10 2. The Court has jurisdiction to enter this Order and over the subject matter of 11 this application and all matters relating thereto, as well as personal jurisdiction over all 12 parties to the litigation. 13 3. Notice of Plaintiffs’ Counsel’s Fee and Expense Application was given to 14 all current shareholders of Nominal Defendant TuSimple Holdings, Inc. (“TuSimple”) 15 who could be identified with reasonable effort. There were no objections to the Fee and 16 Expense Application. The form and method of notifying current TuSimple shareholders 17 of the Fee and Expense Application met the requirements of Rule 23.1 of the Federal 18 Rules of Civil Procedure, the United States Constitution (including the Due Process 19 Clause), and any other applicable law. This constituted the best notice practicable under 20 the circumstances and due and sufficient notice to all persons entitled thereto. 21 4. Plaintiffs’ Counsel are hereby awarded attorneys’ fees of 27.5% of the 22 $42.5 million Settlement Amount ($11,687,500.00), plus expenses in the amount of 23 $328,216.05, together with the interest earned on both amounts for the same time period 24 and at the same rate as that earned on the Settlement Fund until paid, consistent with 25 paragraphs 1.16, 1.40 and 5.5 of the Stipulation. 26 5. The Court finds that the amount of fees awarded is fair, reasonable, and 27 appropriate under either the “percentage-of-recovery” or lodestar methods. 1 6. Plaintiffs have established that (a) the corporate governance reforms 2 achieved in the Settlement are valuable; and (b) the $42.5 million Settlement Amount 3 achieved is an exceptional result in a shareholder derivative litigation. See In re Pac. 4 Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (“derivative lawsuits are rarely 5 successful”); see also Maher v. Zapata Corp., 714 F.2d 436, 455 (5th Cir. 1983) 6 (shareholder derivative actions generally are “notoriously difficult and unpredictable”). 7 7. The requested 27.5% of the Settlement Amount does not include the value 8 of the corporate governance reforms. And to the extent that the requested fees 9 constitutes an upward adjustment of 2.5% from the 25% benchmark,1 such a modest 10 adjustment is warranted based on the special circumstances presented here, including: 11 • the results achieved that include the governance reforms over and above the 12 $42.5 million monetary recovery; 13 • the fact that Plaintiffs’ counsel obtained temporary restraining orders and 14 defended them on appeal; 15 • the quality of services provided; and 16 • the risks taken by Plaintiffs’ Counsel. 17 See In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir. 2011) 18 (requiring that district courts “provid[e] adequate explanation in the record of any 19 ‘special circumstances’ justifying a departure [from the benchmark]”); see also, e.g., 20 Ziegler v. GW Pharms., PLC, 2024 WL 1470532, at *10 (S.D. Cal. Mar. 25, 2024) 21 (approving 33.33% of the settlement fund where “Class Counsel secured a settlement of 22 $7,750,000 which is significant in a pre-motion to dismiss merger settlement”); In re 23 Atmel Corp. Derivative Litig., 2010 WL 9525643, at *12 (N.D. Cal. Mar. 31, 2010) 24 (departing upward from the 25% benchmark based in part on the finding “that the 25

26 1 Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (“the ‘benchmark’ award is 25 percent of the recovery obtained”) (citations omitted). 27 benefits to [the company] are reasonable in light of the risks present in the instant case 1 and in derivative litigation generally”). 2 8. In making this award of attorneys’ fees and expenses to be paid from the 3 Settlement Fund, the Court has considered and found that: 4 (a) The Settlement has created a fund of $42,500,000 in cash that has 5 been funded into escrow pursuant to the terms of the Stipulation, and TuSimple 6 and its shareholders will benefit from the Settlement created by the efforts of 7 Plaintiffs’ Counsel; 8 (b) Postcard notices were emailed or mailed by first-class mail to all 9 record and beneficial holders of TuSimple common stock known to TuSimple as 10 of October 28, 2024, indicating that Plaintiffs’ Counsel would move for attorneys’ 11 fees in an amount not to exceed 30% of the $42.5 million Settlement Amount and 12 for expenses in an amount not to exceed $450,000, and there have been no 13 objections to the requested attorneys’ fees or expenses; 14 (c) Plaintiffs’ Counsel conducted the Litigation and achieved the 15 Settlement with skill, perseverance, and diligent advocacy; 16 (d) Plaintiffs’ Counsel have devoted more than 6,825.53 hours, with a 17 lodestar value of $5,520,883.95, to achieve the Settlement. A fee of 27.5% of the 18 Settlement Amount represents a multiplier of 2.12 to the aggregate lodestar; 19 (e) Plaintiffs’ Counsel pursued the Litigation on a contingent basis; 20 (f) The Litigation involves complex factual and legal issues and, in the 21 absence of settlement, would involve lengthy proceedings whose resolution 22 would be uncertain; 23 (g) Had Plaintiffs’ Counsel not achieved the Settlement, there would 24 remain a significant risk that TuSimple may have recovered less or nothing from 25 Defendants; 26 (h) Public policy concerns favor the award of reasonable attorneys’ fees 27 1 and expenses in securities class action litigation; and 2 (i) The attorneys’ fees and expenses awarded are fair and reasonable 3 and consistent with awards in similar cases within the Ninth Circuit. 4 9. Consistent with paragraph 5.2 of the Stipulation, Plaintiffs’ Lead Counsel 5 be solely responsible for allocating the attorneys’ fees among Plaintiffs’ Counsel. 6 10. The awarded attorneys’ fees and expenses and interest earned thereon, shall 7 paid to California Plaintiffs’ Lead Counsel immediately upon execution of this Order 8 the Judgment and subject to the terms, conditions, and obligations of the Stipulation, 9 in particular, Section 5 thereof, which terms, conditions, and obligations are 10 |/incorporated herein. 11 11. Plaintiffs Norman Wilhoite, Judith Wilhoite, Jason Nusbaum, and Richard 12 || A.

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8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 NORMAN WILHOITE and JUDITH Case No. 23cv2333 BEN (MSB) 11 W TU IL S H IM O P IT L E E , H d O er L iv D at I i N ve G ly S , o I n N b C e . h , alf of 12 The Honorable Roger T. Benitez Plaintiffs, 13 vs. Order Granting an Award of 14 XIAODI HOU, MO CHEN, CHENG Attorneys’ Fees, Reimbursement of LU, GUOWEI “CHARLES” CHAO, Litigation Expenses, and Approval of 15 and HYDRON, INC., Service Awards 16 Defendants,

- and - 17 TUSIMPLE HOLDINGS, INC., 18 Nominal Defendant. 19 20 21 22 23 24 25 26 27 This matter having come before the Court on July 18, 2025, on Plaintiffs’ motion 1 for an Award of Attorneys’ Fees, Reimbursement of Litigation Expenses, and Approval 2 of Service Awards (the “Fee and Expense Application”), the Court, having considered 3 all papers filed and proceedings conducted herein, having found the Settlement of this 4 litigation to be fair, reasonable, and adequate, and otherwise being fully informed in the 5 premises and good cause appearing therefore; 6 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 7 1. This Order incorporates by reference the definitions in the Stipulation of 8 Settlement dated December 19, 2024 (the “Stipulation”), and all capitalized terms not 9 otherwise defined herein shall have the same meanings as set forth in the Stipulation. 10 2. The Court has jurisdiction to enter this Order and over the subject matter of 11 this application and all matters relating thereto, as well as personal jurisdiction over all 12 parties to the litigation. 13 3. Notice of Plaintiffs’ Counsel’s Fee and Expense Application was given to 14 all current shareholders of Nominal Defendant TuSimple Holdings, Inc. (“TuSimple”) 15 who could be identified with reasonable effort. There were no objections to the Fee and 16 Expense Application. The form and method of notifying current TuSimple shareholders 17 of the Fee and Expense Application met the requirements of Rule 23.1 of the Federal 18 Rules of Civil Procedure, the United States Constitution (including the Due Process 19 Clause), and any other applicable law. This constituted the best notice practicable under 20 the circumstances and due and sufficient notice to all persons entitled thereto. 21 4. Plaintiffs’ Counsel are hereby awarded attorneys’ fees of 27.5% of the 22 $42.5 million Settlement Amount ($11,687,500.00), plus expenses in the amount of 23 $328,216.05, together with the interest earned on both amounts for the same time period 24 and at the same rate as that earned on the Settlement Fund until paid, consistent with 25 paragraphs 1.16, 1.40 and 5.5 of the Stipulation. 26 5. The Court finds that the amount of fees awarded is fair, reasonable, and 27 appropriate under either the “percentage-of-recovery” or lodestar methods. 1 6. Plaintiffs have established that (a) the corporate governance reforms 2 achieved in the Settlement are valuable; and (b) the $42.5 million Settlement Amount 3 achieved is an exceptional result in a shareholder derivative litigation. See In re Pac. 4 Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (“derivative lawsuits are rarely 5 successful”); see also Maher v. Zapata Corp., 714 F.2d 436, 455 (5th Cir. 1983) 6 (shareholder derivative actions generally are “notoriously difficult and unpredictable”). 7 7. The requested 27.5% of the Settlement Amount does not include the value 8 of the corporate governance reforms. And to the extent that the requested fees 9 constitutes an upward adjustment of 2.5% from the 25% benchmark,1 such a modest 10 adjustment is warranted based on the special circumstances presented here, including: 11 • the results achieved that include the governance reforms over and above the 12 $42.5 million monetary recovery; 13 • the fact that Plaintiffs’ counsel obtained temporary restraining orders and 14 defended them on appeal; 15 • the quality of services provided; and 16 • the risks taken by Plaintiffs’ Counsel. 17 See In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir. 2011) 18 (requiring that district courts “provid[e] adequate explanation in the record of any 19 ‘special circumstances’ justifying a departure [from the benchmark]”); see also, e.g., 20 Ziegler v. GW Pharms., PLC, 2024 WL 1470532, at *10 (S.D. Cal. Mar. 25, 2024) 21 (approving 33.33% of the settlement fund where “Class Counsel secured a settlement of 22 $7,750,000 which is significant in a pre-motion to dismiss merger settlement”); In re 23 Atmel Corp. Derivative Litig., 2010 WL 9525643, at *12 (N.D. Cal. Mar. 31, 2010) 24 (departing upward from the 25% benchmark based in part on the finding “that the 25

26 1 Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (“the ‘benchmark’ award is 25 percent of the recovery obtained”) (citations omitted). 27 benefits to [the company] are reasonable in light of the risks present in the instant case 1 and in derivative litigation generally”). 2 8. In making this award of attorneys’ fees and expenses to be paid from the 3 Settlement Fund, the Court has considered and found that: 4 (a) The Settlement has created a fund of $42,500,000 in cash that has 5 been funded into escrow pursuant to the terms of the Stipulation, and TuSimple 6 and its shareholders will benefit from the Settlement created by the efforts of 7 Plaintiffs’ Counsel; 8 (b) Postcard notices were emailed or mailed by first-class mail to all 9 record and beneficial holders of TuSimple common stock known to TuSimple as 10 of October 28, 2024, indicating that Plaintiffs’ Counsel would move for attorneys’ 11 fees in an amount not to exceed 30% of the $42.5 million Settlement Amount and 12 for expenses in an amount not to exceed $450,000, and there have been no 13 objections to the requested attorneys’ fees or expenses; 14 (c) Plaintiffs’ Counsel conducted the Litigation and achieved the 15 Settlement with skill, perseverance, and diligent advocacy; 16 (d) Plaintiffs’ Counsel have devoted more than 6,825.53 hours, with a 17 lodestar value of $5,520,883.95, to achieve the Settlement. A fee of 27.5% of the 18 Settlement Amount represents a multiplier of 2.12 to the aggregate lodestar; 19 (e) Plaintiffs’ Counsel pursued the Litigation on a contingent basis; 20 (f) The Litigation involves complex factual and legal issues and, in the 21 absence of settlement, would involve lengthy proceedings whose resolution 22 would be uncertain; 23 (g) Had Plaintiffs’ Counsel not achieved the Settlement, there would 24 remain a significant risk that TuSimple may have recovered less or nothing from 25 Defendants; 26 (h) Public policy concerns favor the award of reasonable attorneys’ fees 27 1 and expenses in securities class action litigation; and 2 (i) The attorneys’ fees and expenses awarded are fair and reasonable 3 and consistent with awards in similar cases within the Ninth Circuit. 4 9. Consistent with paragraph 5.2 of the Stipulation, Plaintiffs’ Lead Counsel 5 be solely responsible for allocating the attorneys’ fees among Plaintiffs’ Counsel. 6 10. The awarded attorneys’ fees and expenses and interest earned thereon, shall 7 paid to California Plaintiffs’ Lead Counsel immediately upon execution of this Order 8 the Judgment and subject to the terms, conditions, and obligations of the Stipulation, 9 in particular, Section 5 thereof, which terms, conditions, and obligations are 10 |/incorporated herein. 11 11. Plaintiffs Norman Wilhoite, Judith Wilhoite, Jason Nusbaum, and Richard 12 || A. Green are granted a Service Award in the amount of $7,500 each, for their time spent 13 directly related to their representation of TuSimple in the Actions. 14 12. Any appeal or any challenge affecting this Court’s approval regarding the 15 ||Fee and Expense Application shall in no way disturb or affect the finality of the 16 ||Judgment entered with respect to the Settlement. 17 13. In the event that the Settlement is terminated or does not become Final or 18 ||the Effective Date does not occur in accordance with the terms of the Stipulation, this 19 |] Order shall be rendered null and void to the extent provided in the Stipulation and shall 20 || be vacated in accordance with the Stipulation. 21 14. In sum, the Fee and Expense Application is granted in its entirety. 22 IT IS SO ORDERED. 23 ||Dated: July 23, 2025 °

24 T orable Roger I’. Beni{ez 25 United States District Judg 26 27 28 Order Granting an Award of Attorneys’ Fees, Case No. 23cv2333 BEN (MSB)

In Re Pacific Enterprises Securities Litigation. Lee J. Principe Ken Rudd Steven Friedland Myra Friedland Leonard Held Pisnoi Lumber & Trim Co., Inc. Pension Trust Charles Thomas Miller William Steiner Pacific Enterprises, by Pisnoi Lumber & Trim Co., Inc. Pension Trust Sheldon Shore Edith Citron William P. Anglim W.M. Rogers, of the Estate of Lydia P. Rogers Eric J. Kakofsky Herbert L. Eisen James Foxwell Martin Seltzer Marjorie Seltzer, as Joint Tenants Shareholders Suing Derivatively and on Its Behalf v. James R. Ukropina Willis B. Wood, Jr. Hyla H. Bertea Herbert L. Carter James F. Dickason Wilford D. Godbold, Jr. Ignazio C. Lozana, Jr. Harold M. Messmer, Jr. Paul A. Miller Joseph N. Mitchell Joseph R. Rensch Rocco C. Siciliano Leonard H. Straus Daniel G. Volkmann, Jr. Diana L. Walker James H. Zumberge Stanley A. Ratzlaff Pacific Enterprises Deloitte & Touche v. Sam Weinstein

47 F.3d 373 (Ninth Circuit, 1995)

Vizcaino v. Microsoft Corp.

290 F.3d 1043 (Ninth Circuit, 2002)

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