Snap Securities Proposed Settlement

Case 2:17-cv-03679-SVW-AGR Document 368-1 Filed 03/20/20 Page 1 of 32 Page ID
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1 KESSLER TOPAZ
MELTZER & CHECK, LLP
2 JENNIFER L. JOOST (Bar No. 296164)
[email protected]
3 STACEY M. KAPLAN (Bar No. 241989)
[email protected]
4 One Sansome Street, Suite 1850
San Francisco, CA 94104
5 Telephone: (415) 400-3000
Facsimile: (415) 400-3001
6
Attorneys for Class Representatives Smilka
7 Melgoza, as trustee of the Smilka Melgoza
8 Trust U/A DTD 04/08/2014, Rediet
Tilahun, Tony Ray Nelson, Rickey E.
9 Butler, Alan L. Dukes, Donald R. Allen and
Shawn B. Dandridge, and Class Counsel
10 for the Class
11
[Additional counsel on signature page.]
12
13 UNITED STATES DISTRICT COURT
14 FOR THE CENTRAL DISTRICT OF CALIFORNIA
15 WESTERN DIVISION
16 IN RE SNAP INC. SECURITIES Case No. 2:17-cv-03679-SVW-AGR
LITIGATION
17
CLASS ACTION
18
19 This Document Relates To: All Actions. MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
20 CLASS REPRESENTATIVES’
21 UNOPPOSED MOTION FOR
PRELIMINARY APPROVAL OF
22 PROPOSED SETTLEMENT AND
23 AUTHORIZATION TO DISSEMINATE
NOTICE TO THE CLASS
24
25 Date: April 21, 2020
Time: 1:30 p.m.
26 Courtroom: 10A, 10th Floor
27 Judge: Hon. Stephen V. Wilson
28
30 Case No. 2:17-cv-03679-SVW-AGR
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CLASS
31 REPRESENTATIVES’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF
SETTLEMENT
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1 TABLE OF CONTENTS
2 Page
3 I. PRELIMINARY STATEMENT ............................................................................... 1
4 II. SUMMARY OF THE ACTION ............................................................................... 3
5 III. THE PROPOSED SETTLEMENT MERITS PRELIMINARY APPROVAL ......... 7
6 A. Standards Governing Approval of Class Action Settlements ......................... 7
7 B. The Court “Will Likely Be Able to” Approve the Proposed Settlement
Under Rule 23(e)(2) ...................................................................................... 10
8
1. “Procedural” Aspects of the Settlement Satisfy Rule 23(e)(2) ........... 10
9
2. The Settlement’s Terms Are Adequate ............................................... 13
10
a. The Settlement Provides Substantial Relief, Especially in
11 Light of the Costs, Risks, and Delay of Further Litigation ...... 13
12 b. The Proposed Settlement Does Not Unjustly Favor Any
13 Class Member ........................................................................... 16
14 c. The Anticipated Request for Attorneys’ Fees Is

Reasonable ................................................................................ 18
15
d. Class Representatives Have Identified All Agreements
16 Made in Connection with the Settlement ................................. 19
17 IV. THE COURT SHOULD APPROVE THE FORM, CONTENT, AND
METHOD FOR DISSEMINATING NOTICE TO THE CLASS .......................... 20
18
V. PROPOSED SCHEDULE OF SETTLEMENT-RELATED EVENTS .................. 24
19
VI. CONCLUSION........................................................................................................ 25
20
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1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
4 Ansell v. Laikin,
2012 WL 13034812 (C.D. Cal. July 11, 2012).............................................................. 17
5
In re AXA Rosenberg Inv’r Litig.,
6 2012 WL 12920617 (N.D. Cal. Apr. 2, 2012) ............................................................... 19
7 In re Cendant Corp. Litig.,
8 264 F.3d 201 (3d Cir. 2001) .......................................................................................... 14
9 Chun-Hoon v. McKee Foods Corp.,

716 F. Supp. 2d 848 (N.D. Cal. 2010) ........................................................................... 12
10
Churchill Vill., L.L.C. v. GE,
11 361 F.3d 566 (9th Cir. 2004) ......................................................................................... 10
12 Edwards v. N. Am. Power & Gas, LLC,
2018 WL 3715273 (D. Conn. Aug. 3, 3018) ................................................................. 22
13
Elliott v. Rolling Frito-Lay Sales, LP,
14 2014 WL 2761316 (C.D. Cal. June 12, 2014) ................................................................. 8
15 Garcia v. Ceva Logistics, U.S.A.,
2017 U.S. Dist. LEXIS 177946 (C.D. Cal. Oct. 23, 2017) ........................................... 24
16
Hanlon v. Chrysler Corp.,
17 150 F.3d 1011 (9th Cir. 1998) ....................................................................................... 18
18 Harris v. Vector Mktg. Corp.,
19 2011 WL 1627973 (N.D. Cal. Apr. 29, 2011) ............................................................... 12
20 Hefler v. Wells Fargo & Co.,

2018 WL 4207245 (N.D. Cal. Sept. 4, 2018) ................................................................ 19
21
In re Heritage Bond Litig.,
22 2005 WL 1594403 (C.D. Cal. June 10, 2005) ........................................................... 7, 10
23 Lane v. Facebook, Inc.,
696 F.3d 811 (9th Cir. 2012) ......................................................................................... 20
24
Livingston v. Toyota Motor Sales USA,
25 1995 U.S. Dist. LEXIS 21757 (N.D. Cal. June 1, 1995) ............................................... 12
26 McLaughlin v. IDT Energy,
27 2018 WL 3642627 (E.D.N.Y. July 30, 2018)................................................................ 22
28 In re MGM Mirage Secs. Litig.,

708 F. App’x 894 (9th Cir. 2017) .................................................................................. 12
30 ii Case No. 2:17-cv-03679-SVW-AGR
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1 Misra v. Decision One Mortg. Co.,

2009 WL 4581276 (C.D. Cal. Apr. 13, 2009) ............................................................... 12
2
Morales v. Stevco, Inc.,
3 2011 WL 5511767 (E.D. Cal. Nov. 10, 2011)............................................................... 12
4 Murillo v. Pac. Gas & Elec. Co.,
5 266 F.R.D. 468 (E.D. Cal. 2010) ..................................................................................... 8
6 NECA-IBEW Health & Welfare Fund v. Goldman, Sachs & Co.,

2016 WL 3369534 (S.D.N.Y. May 2, 2016) ................................................................. 19
7
Nguyen v. Radient Pharm. Corp.,
8 2014 WL 1802293 (C.D. Cal. May 6, 2014) ............................................... 10, 11, 14, 17
9 Officers for Justice v. Civil Serv. Comm’n,
688 F.2d 615 (9th Cir. 1982) ........................................................................................... 7
10
In re OmniVision Techs., Inc.,
11 559 F. Supp. 2d 1036 (N.D. Cal. 2007) ......................................................................... 15
12 In re Pac. Enters. Sec. Litig.,
47 F.3d 373 (9th Cir. 1995) ............................................................................................. 8
13
Rodriguez v. West Publ’g Corp.,
14 563 F.3d 948, 965 (9th Cir. 2009) ................................................................................... 8
15 Salazar v. Midwest Servicing Grp., Inc.,
16 2018 WL 3031503 (C.D. Cal. June 4, 2018) ................................................................. 13
17 Satchell v. Fed. Express Corp.,

2007 WL 1114010 (N.D. Cal. Apr. 13, 2007) ............................................................... 12
18
Schaffer v. Litton Loan Servicing, LP,
19 2012 WL 10274679 (C.D. Cal. Nov. 13, 2012) ............................................................ 22
20 Spann v. J.C. Penney Corp.,
314 F.R.D. 312 (C.D. Cal. 2016) ............................................................................. 11, 24
21
Tait v. BSH Home Appliances Corp.,
22 2015 WL 4537463 (C.D. Cal. July 27, 2015)................................................................ 11
23 Van Ba Ma v. Covidien Holding, Inc.,
24 2014 WL 360196 (C.D. Cal. Jan. 31, 2014) .......................................................... 8, 9, 20
25 Van Bronkhorst v. Safeco Corp.,

529 F.2d 943 (9th Cir. 1976) ........................................................................................... 8
26
Vasquez v. Coast Valley Roofing, Inc.,
27 266 F.R.D. 482 (E.D. Cal. 2010) ................................................................................... 18
28
30 iii Case No. 2:17-cv-03679-SVW-AGR
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1 Williams v. Costco Wholesale Corp.,

2010 WL 761122 (S.D. Cal. Mar. 4, 2010) ..................................................................... 9
2
Young v. Polo Retail, LLC,
3 2006 WL 3050861 (N.D. Cal. Oct. 25, 2006) ................................................................. 9
4 Statutes
5 15 U.S.C. § 78u-4(a)(4) ...................................................................................................... 17
6 15 U.S.C. § 78u-4(a)(7) ...................................................................................................... 23
7 Other Authorities
8 Fed. R. Civ. P. 23(c)(1)(C) ................................................................................................. 15
9 Fed. R. Civ. P. 23(c)(2)(B) ................................................................................................. 20
10 Fed. R. Civ. P. 23(e).......................................................................................................... 8, 9
11 Fed. R. Civ. P. 23(e)(1) ................................................................................................... 8, 20
12 Fed. R. Civ. P. 23(e)(1)(B) ................................................................................................... 9
13 Fed. R. Civ. P. 23(e)(2) ........................................................................................... 2, 8, 9, 10
14 Fed. R. Civ. P. 23(e)(2)(C) ................................................................................................. 13
15 Fed. R. Civ. P. 23(e)(2)(C)(ii)............................................................................................. 16
16 Fed. R. Civ. P. 23(e)(2)(D) ........................................................................................... 13, 16
17 Fed. R. Civ. P. 23(h)(1)....................................................................................................... 23
18 William B. Rubenstein, Newberg on Class Actions § 8:28 (5th ed. 2019) ......................... 22
19
20
21
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30 iv Case No. 2:17-cv-03679-SVW-AGR
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1 I. PRELIMINARY STATEMENT
2 After nearly three years since the inception of this Action, and following highly
3 contested and vigorous litigation, Class Representatives have agreed to settle all claims
4 against Defendants for a $154,687,500 cash payment. The terms of the Settlement are set
5 forth in the Stipulation and Agreement of Settlement dated March 20, 2020.1 At this time,
6 Class Representatives seek the Court’s preliminary approval of the proposed Settlement
7 under Federal Rule of Civil Procedure 23 (“Rule 23”) so that notice of the Settlement can
8 be disseminated to the Class and the Settlement Hearing can be scheduled.
9 Class Representatives and Class Counsel believe that the Settlement—reached just
10 two months before the commencement of a trial, provides an excellent benefit to the Class
11 given the risks to proving liability and damages that the Class faced. While Class
12 Representatives and Class Counsel believe the Class’s claims against Defendants are
13 meritorious and supported by substantial evidence developed during discovery and in
14 preparation for trial, they also recognize that, in the absence of a settlement, they faced the
15 significant risk that the Court would grant, in whole or in part, the SAC Defendants’2
16 motions for summary judgment (which were pending at the time the Settlement was
17 reached), that the Ninth Circuit would agree to hear the SAC Defendants’ appeal of the
18 Court’s Order on class certification which raised several novel issues, or that a trial of the
19 Action and the likely appeals that would follow could have precluded any recovery for the
20 Class, let alone a recovery greater than the Settlement Amount.
21 When the Settlement was reached, the Parties were at an advanced stage of litigation,
22 and Class Representatives and Class Counsel were well-informed of the strengths and
23
24 1
All capitalized terms not defined herein shall have the meanings ascribed to them in
the Stipulation. The Stipulation is attached as Exhibit 1 to the Declaration of Sharan Nirmul
25 in Support of Class Representatives’ Unopposed Motion for Preliminary Approval of
26 Proposed Settlement and Authorization to Disseminate Notice to the Class (“Nirmul Decl.”)
filed herewith. Unless otherwise noted, all emphasis in quotations is added, and internal
27 quotation marks, citations, and footnotes are omitted.
2
28 The SAC Defendants refer to the Defendants named in the operative complaint—
Snap Inc. (“Snap”), Evan Spiegel, Robert Murphy, Andrew Vollero, and Imran Khan.
30 1 Case No. 2:17-cv-03679-SVW-AGR
SETTLEMENT
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1 weaknesses of their case. Over the course of the Action, Class Counsel, inter alia:
2 (i) conducted a significant investigation into the Class’s claims and drafted two detailed
3 complaints, including the operative Second Consolidated Amended Class Action
4 Complaint for Violation of the Federal Securities Laws (“SAC”); (ii) defeated Defendants’
5 motions to dismiss the Consolidated Amended Class Action Complaint for Violation of the
6 Federal Securities Laws (“Amended Complaint”) and subsequent motion for interlocutory
7 appeal of the Court’s order denying Defendants’ motions in full; (iii) engaged in
8 comprehensive fact and expert discovery, including taking or defending 32 depositions,
9 analyzing nearly 2,000,000 pages of documents produced by Defendants and various third
10 parties, litigating approximately five discovery-related motions, and exchanging opening
11 and rebuttal reports for five merits experts; (iv) successfully moved for class certification;
12 (v) briefed the SAC Defendants’ Rule 23(f) petition for permission to appeal the Court’s
13 Order certifying the Class to the Ninth Circuit (which was pending when the Parties reached
14 the Settlement); (vi) made significant progress in drafting their opposition to the SAC
15 Defendants’ summary judgment motions; and (vii) had begun preparations for a trial set to
16 commence on March 24, 2020. Moreover, the Settlement is the product of protracted and
17 complex, arm’s-length negotiations facilitated by an accomplished mediator, the Honorable
18 Layn R. Phillips (Ret.), including three formal mediation sessions3 and mediation briefing.
19 At the Settlement Hearing, the Court will have before it more extensive submissions
20 in support of the Settlement and will be asked to make a determination as to whether, in
21 accordance with Rule 23(e)(2), the Settlement is fair, reasonable, and adequate. At this time,
22 Class Representatives request only that the Court grant preliminary approval of the
23 Settlement so that notice of the Settlement’s terms and conditions may be provided to Class
24 Members. Entry of the Preliminary Approval Order (attached as Exhibit A to the
25 Stipulation) will, among other things:
26
27 3
Class Counsel attended two of the mediations with Judge Phillips, on October 15,
28 2019, and January 15, 2020. The initial mediation on September 18, 2019, was attended
only by counsel for the State Plaintiffs.
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1  preliminarily approve the terms of the Settlement set forth in the Stipulation;
2  approve the retention of JND Legal Administration (“JND”), the administrator
previously approved by the Court in connection with Class Notice, as the Claims
3 Administrator;4
4  approve the form and content of the Postcard Notice, Notice, Summary Notice,
5 Notice Ads, and Claim Form attached as Exhibits 1, 2, 3, 4, and 5, respectively, to
the Preliminary Approval Order;
6
 approve the proposed procedures for providing notice to the Class through mailing
7 of the Postcard Notice, posting of the Notice and Claim Form on the website
www.SnapSecuritiesLitigation.com, transmittal of the Notice Ads via appropriate
8 social media platforms jointly selected by the Parties, and publication of the
Summary Notice as the best notice practicable under the circumstances and
9 complying with due process, Rule 23, and the PSLRA; and
10  set a schedule for: (i) providing notice of the Settlement to the Class; (ii) Class
11 Members to request exclusion from the Class; (iii) Class Members to object to the
Settlement or any part thereof; (iv) Class Members to submit Claim Forms in order
12 to be potentially eligible to share in the Net Settlement Fund; (v) submitting papers
in support of final approval of the Settlement and related matters; and (vi) the
13 Settlement Hearing, at which the Court will consider final approval of the Settlement,
14 as well as approval of the Plan of Allocation and Class Counsel’s request for
attorneys’ fees and Litigation Expenses, including reimbursement of costs to Class
15 Representatives pursuant to the PSLRA.
16 For the reasons set forth herein, Class Representatives respectfully submit the
17 Settlement warrants the Court’s preliminary approval and respectfully request the Court
18 enter the Preliminary Approval Order.
19 II. SUMMARY OF THE ACTION
20 This securities class action was commenced with the filing of the initial complaint
21 on May 16, 2017. ECF No. 1. Following briefing, and pursuant to the PSLRA, the Court,
22 on September 18, 2017, appointed a lead plaintiff (“Initial Lead Plaintiff”) and approved
23 his selection of Kessler Topaz Meltzer & Check, LLP (“Kessler Topaz”) as lead counsel
24
25
4
In the related State Settlement, State Plaintiffs are also requesting the State Court’s
approval of their retention of JND as the claims administrator and it is envisioned that JND
26 will issue a single postcard notice for both actions, maintain a common website for both
settlements, and allow for a single claim form for Class Members to submit in order to
27 recover from each settlement. These efforts, as discussed below in Section IV, are designed
28 to maximize efficiencies and cost savings for the administration of both settlements while
allowing for the independent approval of the settlements in their forum courts.
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1 and Rosman & Germain LLP as liaison counsel. ECF No. 54.
2 On November 1, 2017, the Initial Lead Plaintiff filed the Amended Complaint,
3 naming as defendants: (i) Snap, Evan Spiegel, Robert Murphy, Andrew Vollero, and Imran
4 Khan (i.e., the “SAC Defendants”); (ii) certain Snap directors (“Director Defendants”); and
5 (iii) the principal underwriters of Snap’s Initial Public Offering on or about March 2, 2017
6 (“Underwriter Defendants”), and asserting claims arising under Sections 11 and 15 of the
7 Securities Act of 1933 (15 U.S.C. §§ 77k, 77l(a)(2), and 77o) (“Securities Act”), Sections
8 10(b) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78j(b) and 78t(a))
9 (“Exchange Act”), and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R.
10 § 240.10b-5). ECF No. 67. The Amended Complaint alleged that certain Defendants made
11 materially false and misleading statements, or omitted to disclose information required to
12 be disclosed, regarding, among other things: (i) Snap’s characterizations and explanations
13 for the slowing growth in daily active users (“DAUs”) it experienced in the months leading
14 up to Snap’s IPO, and (ii) Snap’s characterizations about the quality of its DAUs,
15 particularly as to whether Snap used “growth hacking” techniques to boost its DAU growth.
16 On December 1, 2017, Defendants moved to dismiss the Amended Complaint. ECF
17 Nos. 73 & 75. Following full briefing on the motions, the Court, by Order dated June 7,
18 2018, denied Defendants’ motions to dismiss in full. ECF No. 92. Thereafter, all
19 Defendants, except for the Underwriter Defendants, moved to certify for interlocutory
20 appeal, under 28 U.S.C. § 1292(b), the Court’s June 2018 Order on Defendants’ motions to
21 dismiss (“Motion for Interlocutory Appeal”). ECF No. 94. On June 28, 2018, the
22 Underwriter Defendants filed a notice of joinder in the Motion for Interlocutory Appeal.
23 ECF No. 101. Following full briefing, the Court denied the Motion for Interlocutory Appeal
24 on August 8, 2018. ECF No. 108.
25 All Defendants answered the Amended Complaint by June 29, 2018. ECF Nos. 95,
26 102. Thereafter, discovery in the Action commenced.
27 From June 2018 through December 2019, the Parties engaged in extensive fact and
28 expert discovery, including, inter alia: (i) issuing 85 document requests to Defendants;
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1 (ii) serving 72 interrogatories and 710 requests for admission on Defendants; (iii) serving
2 20 subpoenas for records on third parties; (iv) obtaining, reviewing, and analyzing
3 1,972,314 pages of documents produced by Defendants and third parties; (v) reviewing
4 voluminous written discovery responses from Defendants; (vi) reviewing and producing
5 5,786 pages of documents by Class Representatives, as well as providing written discovery
6 responses to document requests and interrogatories served by Defendants; (vii) reviewing
7 and analyzing thousands of privilege log entries; (viii) taking and/or defending a total of
8 32 fact and expert depositions; and (ix) exchanging opening and rebuttal reports for three
9 merits expert witnesses designated by Class Representatives and analyzing such reports
10 from two defense merits experts. In addition, the Parties filed and/or argued approximately
11 five discovery-related motions before Magistrate Judge Alicia G. Rosenberg. See ECF
12 Nos. 136–37, 144, 146, 188, 278, 287, 333.
13 On August 30, 2018, the Initial Lead Plaintiff moved for class certification. ECF
14 No. 114. This motion was fully briefed. ECF Nos. 124–27, 133-135, 163.
15 On September 28, 2018, the Initial Lead Plaintiff informed the Court that due to
16 medical reasons he intended to withdraw as lead plaintiff. ECF No. 118. By Order entered
17 January 10, 2019, the Court reopened the lead plaintiff appointment process and, by the
18 same Order, administratively terminated the then-pending motion for class certification
19 without prejudice. ECF No. 208. Following the submission of multiple motions for lead
20 plaintiff appointment and related briefing, the Court, on April 1, 2019, appointed Smilka
21 Melgoza, as trustee of the Smilka Melgoza Trust U/A DTD 04/08/2014, Rediet Tilahun,
22 Tony Ray Nelson, Rickey E. Butler, and Alan L. Dukes as lead plaintiffs (“Lead Plaintiffs”),
23 and reappointed Kessler Topaz as lead counsel. ECF No. 262.
24 Pursuant to joint stipulation, Lead Plaintiffs and additional named plaintiffs Donald
25 R. Allen and Shawn B. Dandridge filed the operative complaint—the SAC—on May 29,
26 2019. ECF No. 272. The SAC reflected, among other things, the addition of Lead Plaintiffs
27 and the voluntary dismissal without prejudice of the Director Defendants and the
28
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1 Underwriter Defendants.5 Defendants did not move to dismiss the SAC and the Parties
2 stipulated that the prior answer to the Amended Complaint, ECF No. 102, would serve as
3 the answer to the SAC. ECF No. 271
4 On June 7, 2019, Lead Plaintiffs filed a renewed motion for class certification (“Class
5 Certification Motion”). ECF No. 275. Thereafter, two motions for leave to intervene to
6 oppose, in part, the Class Certification Motion were filed by plaintiffs in the State Cases.
7 ECF Nos. 284 & 285. These motions, along with the Class Certification Motion, were fully
8 briefed. ECF Nos. 290–95, 298, 301-04, 306.
9 While Lead Plaintiffs’ Class Certification Motion was pending, Lead Plaintiffs, State
10 Plaintiffs, and the Snap Defendants participated in a formal mediation before Judge Phillips.
11 The Parties, however, were too far apart in their respective positions to reach a resolution
12 at the mediation.
13 On November 20, 2019, the Court granted the Class Certification Motion (“Class
14 Certification Order”). ECF No. 341. Thereafter, Class Representatives filed an unopposed
15 motion to approve the form and manner of notice to the Class (i.e., Class Notice) (ECF
16 No. 342), which the Court granted on December 23, 2019 (ECF No. 355).6 In the meantime,
17 the SAC Defendants, on December 3, 2019, filed a Rule 23(f) petition with the Ninth Circuit
18 Court of Appeals for permission to appeal certain portions of the Class Certification Order
19 relating to the Securities Act claims at issue (“Ninth Circuit Petition”). The Ninth Circuit
20 Petition was limited to the Securities Act claims and did not seek permission to appeal any
21 of the Class Certification Order’s findings as to the Exchange Act claims.
22 On December 19, 2019, the SAC Defendants filed motions for summary judgment
23
24 5
Previously, on September 12 and 18, 2018, the Parties filed stipulations to voluntarily
dismiss without prejudice from the Action the Director Defendants and the Underwriter
25 Defendants. ECF Nos. 116–17.
26 6
Pursuant to the Court’s Order, Class Notice was to begin no later than January 17,
2020; however, due to the Parties’ agreement in principle to resolve the Action, the Court
27 vacated all deadlines, including with respect to Class Notice, to allow the Parties to prepare
28 final settlement documentation and submit a motion for preliminary approval of the
Settlement. ECF No. 364.
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1 pursuant to Rule 56 of the Federal Rules of Civil Procedure (“Summary Judgment

2 Motions”), asserting that there was no triable issue of material fact and that the SAC
3 Defendants were entitled to judgment as a matter of law. ECF Nos. 346–50. Class
4 Representatives were actively preparing their opposition to the Summary Judgment
5 Motions, due to be filed on January 30, 2020.
6 While the Ninth Circuit Petition and Summary Judgment Motions were pending, and
7 with a trial in the Action nearing, the Parties agreed to reengage with respect to the
8 possibility of resolving the Action, once again utilizing Judge Phillips and participating in
9 a formal mediation on January 15, 2020. Following hard-fought, arm’s-length negotiations,
10 the Parties, on January 17, 2020, accepted a mediator’s recommendation to resolve the
11 Action, along with the State Cases, for a total of $187.5 million in cash, which agreement
12 was memorialized in a term sheet executed on January 24, 2020 (“Term Sheet”). 7
13 Thereafter, the Parties negotiated the formal Stipulation setting forth the full terms and
14 conditions of the Parties’ agreement to settle the Action, which was executed on March 20,
15 2020, and is submitted herewith. In order to ensure a global resolution, the Parties all agreed
16 to the requirement that the Federal and State Settlements must each receive final approval
17 and be no longer subject to appeal in their respective courts as a condition to the settlements
18 becoming Final.
19 III. THE PROPOSED SETTLEMENT MERITS PRELIMINARY APPROVAL
20 A. Standards Governing Approval of Class Action Settlements
21 “In deciding whether to approve a proposed settlement, the Ninth Circuit has a strong
22 judicial policy that favors settlements, particularly where complex class action litigation is
23 concerned.” In re Heritage Bond Litig., 2005 WL 1594403, at *2 (C.D. Cal. June 10, 2005);
24 see also Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982).
25 “[T]here is an overriding public interest in settling and quieting litigation,” and this is
26
27 7
In accordance with the Term Sheet, the $187.5 million was subsequently allocated
28 between the Federal Case and the State Cases through further negotiations between the
Federal Plaintiffs and the State Plaintiffs overseen by the mediator.
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1 “particularly true in class action suits[.]” Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950
2 (9th Cir. 1976); see also Elliott v. Rolling Frito-Lay Sales, LP, 2014 WL 2761316, at *3
3 (C.D. Cal. June 12, 2014) (“[J]udicial policy favors settlement in class actions and other
4 complex litigation where substantial resources can be conserved by avoiding the time, cost,
5 and rigors of formal litigation.”).
6 Moreover, the Ninth Circuit expressly recognizes that:
7 The Court’s role in evaluating the proposed settlement “must be limited to the
8 extent necessary to reach a reasoned judgment that the agreement is not the
product of fraud or overreaching by, or collusion between, the negotiating
9 parties, and that the settlement, taken as a whole, is fair, reasonable, and
adequate to all concerned.”
10
11 Van Ba Ma v. Covidien Holding, Inc., 2014 WL 360196, at *4 (C.D. Cal. Jan. 31, 2014)
12 (quoting Rodriguez v. West Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009)). Indeed,
13 “[p]arties represented by competent counsel are better positioned than courts to produce a
14 settlement that fairly reflects each party’s expected outcome in [the] litigation.” In re Pac.
15 Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995).
16 Rule 23(e) requires judicial approval for a compromise of claims brought on a class-
17 wide basis. Rule 23(e) (“The claims . . . of a certified class . . . may be settled . . . only with
18 the court’s approval.”). Judicial approval of a class action settlement is a two-step process—
19 first, the court performs a preliminary review of the terms of the proposed settlement to
20 determine whether to send notice of the proposed settlement to the class, see Rule 23(e)(1);
21 and second, after notice has been provided and a hearing has been held, the court determines
22 whether to grant final approval of the settlement, see Rule 23(e)(2). See also Elliott,
23 2014 WL 2761316, at *2.
24 “In the first stage of the approval process, the court preliminarily approve[s] the
25 Settlement pending a fairness hearing, temporarily certifie[s] the Class . . ., and authorize[s]
26 notice to be given to the Class.” Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 473 (E.D.
27 Cal. 2010) (alterations in original). At this stage, the Court is not required to make a final
28 determination as to whether the proposed Settlement will ultimately be found to be fair,
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1 reasonable, and adequate. See Williams v. Costco Wholesale Corp., 2010 WL 761122, at *5
2 (S.D. Cal. Mar. 4, 2010) (“Given that some . . . factors cannot be fully assessed until the
3 Court conducts the Final Approval Hearing, a full fairness analysis is unnecessary at this
4 stage.”). Rather, “[t]he question for preliminary approval of a settlement is whether it is
5 within the range of reasonableness.” Covidien, 2014 WL 360196, at *4. “Preliminary
6 approval is appropriate” if (i) “the proposed settlement appears to be the product of serious,
7 informed, non-collusive negotiations,” (ii) “has no obvious deficiencies,” (iii) “does not
8 improperly grant preferential treatment to class representatives or segments of the class,”
9 and (iv) “falls within the range of possible approval.” Id.8
10 Rule 23(e), as amended, does not change this fundamental inquiry. Amended
11 Rule 23(e), among other things, specifies that the crux of a court’s preliminary approval
12 evaluation is whether “giving notice [to the class] is justified by the parties’ showing that
13 the court will likely be able to: (i) approve the proposal under Rule 23(e)(2); and (ii) certify
14 the class for purposes of judgment on the proposal.” Rule 23(e)(1)(B).9 The Rule
15 “focus[es]” the Court’s inquiry on “the primary procedural considerations and substantive
16 qualities that should always matter to the decision whether to approve the proposal.” Rule
17 23(e)(2) advisory committee’s note to 2018 amendment. In this inquiry, the Court evaluates
18 whether:
19 (A) the class representatives and class counsel have adequately represented
the class; (B) the proposal was negotiated at arm’s length; (C) the relief
20 provided for the class is adequate, taking into account: (i) the costs, risks, and
21 delay of trial and appeal; (ii) the effectiveness of any proposed method of
distributing relief to the class, including the method of processing class-
22 member claims; (iii) the terms of any proposed award of attorney’s fees,
including timing of payment; and (iv) any agreement required to be identified
23
24 8
See also, e.g., Young v. Polo Retail, LLC, 2006 WL 3050861, at *5 (N.D. Cal. Oct.
25, 2006) (“[I]f the proposed settlement appears to be the product of serious, informed, non-
25 collusive negotiations, has no obvious deficiencies, does not improperly grant preferential
26 treatment to class representatives or segments of the class, and falls within the range of
possible approval, then the court should direct that the notice be given to the class members
27 of a formal fairness hearing . . . .”).
9
28 Here, the Court need not determine whether it could certify a class because it already
has certified a class in the Action.
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1 under Rule 23(e)(3); and (D) the proposal treats class members equitably
relative to each other.
2
3 Rule 23(e)(2).10 Each of these factors is satisfied here.
4 B. The Court “Will Likely Be Able to” Approve the Proposed Settlement
Under Rule 23(e)(2)
5
1. “Procedural” Aspects of the Settlement Satisfy Rule 23(e)(2)
6
7 Rule 23(e)(2)’s first two factors “look[] to the conduct of the litigation and of the
8 negotiations leading up to the proposed settlement.” Rule 23(e)(2) Paragraphs (A) and (B)
9 advisory committee’s note to 2018 amendment. Courts may consider “the nature and
10 amount of discovery in this or other cases, or the actual outcomes of other cases, [which]
11 may indicate whether counsel negotiating on behalf of the class had an adequate
12 information base.” Id.; see also Nguyen v. Radient Pharm. Corp., 2014 WL 1802293, at *3
13 (C.D. Cal. May 6, 2014) (“[T]he fact that experienced counsel involved in the case approved
14 the settlement after hard-fought negotiations is entitled to considerable weight.”) (alteration
15 in original); Heritage, 2005 WL 1594403, at *9 (“Great weight is accorded to the
16 recommendation of counsel, who are most closely acquainted with the facts of the
17 underlying litigation. A presumption of correctness is said to attach to a class settlement
18 reached in arm’s-length negotiations between experienced capable counsel after meaningful
19
20 10
In determining whether to grant final approval of the Settlement, the Court will also
21 be asked to consider the factors set forth in Churchill Vill., L.L.C. v. GE, 361 F.3d 566, 575
(9th Cir. 2004)—many of which overlap with the Rule 23(e)(2) factors:
22 (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and
23 likely duration of further litigation; (3) the risk of maintaining class action
status throughout the trial; (4) the amount offered in settlement; (5) the extent
24 of discovery completed and the stage of the proceedings; (6) the experience
and views of counsel; (7) the presence of a governmental participant; and (8)
25 the reaction of the class members to the proposed settlement.
26 See also Fed. R. Civ. P. 23(e)(2) advisory committee’s note to 2018 amendment (noting
that the Rule 23(e)(2) factors are not intended to “displace” any factor previously adopted
27 by the Court of Appeals, but “rather to focus the court and the lawyers on the core concerns
28 of procedure and substance that should guide the decision whether to approve the
proposal”).
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1 discovery.”).
2 The Settlement embodies all the hallmarks of a procedurally fair resolution under
3 Rule 23(e)(2). First, as detailed above, the Parties have been vigorously litigating this
4 Action since May 2017. At the time of settlement, the Parties had completed comprehensive
5 fact and expert discovery and were a mere eight weeks from trial. Therefore, the Parties’
6 settlement posture was informed by, among other things, significant work performed in
7 responding to motions to dismiss (and related Motion for Interlocutory Appeal), substantial
8 discovery efforts, mediation positions and briefing regarding perceived strengths and
9 weaknesses of each side’s case, full briefing on class certification and the Ninth Circuit
10 Petition, the pending Summary Judgment Motions, consultation with experts on market
11 efficiency, damages, and causation, and substantial trial preparation. Indeed, this matter was
12 “hard fought and contentiously litigated throughout.” Spann v. J.C. Penney Corp.,
13 314 F.R.D. 312, 324 (C.D. Cal. 2016) (granting preliminary approval where plaintiffs’
14 counsel “engaged in substantial motion practice”). Accordingly, “both parties had ample
15 time and information to evaluate all aspects of the case, the strength of the factual and legal
16 questions at issue, and the likelihood of prevailing.” Tait v. BSH Home Appliances Corp.,
17 2015 WL 4537463, at *8 (C.D. Cal. July 27, 2015) (approving settlement where “settlement
18 was reached two months before trial was set to commence and only after extensive fact
19 discovery, expert discovery, and motions practice”); see also Radient, 2014 WL 1802293,
20 at *3 (parties sufficiently informed where “[a]ll discovery was completed at the time of the
21 settlement”).
22 Additionally, by appointing Class Representatives in connection with class
23 certification, the Court already has found them to have claims typical of those of other Class
24 Members. Moreover, like the rest of the Class, Class Representatives have an interest in
25 obtaining the largest possible recovery from Defendants.
26 Second, the Parties’ settlement negotiations were at arm’s-length and facilitated by a
27 well-respected and experienced mediator. These negotiations included three formal
28 mediation sessions before Judge Phillips (the initial one attended only by the State Plaintiffs
30 11 Case No. 2:17-cv-03679-SVW-AGR
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1 and the next two by all Parties) and, at Judge Phillips’ direction, the preparation and
2 exchange of comprehensive mediation statements and in person presentations by Class
3 Counsel. The Parties’ hard-fought negotiations culminated in Judge Phillips’ issuance of a
4 mediator’s proposal that the Action, along with the State Cases, be settled for a total of
5 $187.5 million, which the Parties accepted. After further negotiations and assistance by
6 Judge Phillips, the $187.5 million was allocated 82.5% to this Action and 17.5% to the State
7 Cases (i.e., $154,687,500 and $32,812,500, respectively). Courts have recognized that
8 “[t]he assistance of an experienced mediator in the settlement process confirms that the
9 settlement is non-collusive.” Satchell v. Fed. Express Corp., 2007 WL 1114010, at *4 (N.D.
10 Cal. Apr. 13, 2007); see also, e.g., In re MGM Mirage Secs. Litig., 708 F. App’x 894, 897
11 (9th Cir. 2017).11
12 Additionally, throughout the Action and settlement negotiations, four law firms
13 highly experienced in this type of litigation—Wilson Sonsini Goodrich & Rosati, P.C., Paul,
14 Weiss, Rifkind, Wharton & Garrison LLP, Kirkland & Ellis LLP, and O’Melveny & Myers,
15 LLP—have vigorously represented Defendants. See, e.g., Livingston v. Toyota Motor Sales
16 USA, 1995 U.S. Dist. LEXIS 21757, at *16-17 (N.D. Cal. June 1, 1995). Because the
17 Settlement is the product of serious, informed, and non-collusive negotiations among
18 experienced counsel and a highly qualified mediator, it deserves preliminary approval. See
19 Misra v. Decision One Mortg. Co., 2009 WL 4581276, at *24 (C.D. Cal. Apr. 13, 2009)
20 (granting preliminary approval where there was “no evidence of fraud or collusion” and
21 “[t]he parties negotiated the settlement at arm[’]s length between experienced counsel
22 representing the interests of the plaintiffs and the defendant”).
23
11
See also Morales v. Stevco, Inc., 2011 WL 5511767, at *11 (E.D. Cal. Nov. 10, 2011)
24 (granting preliminary approval because, inter alia, “[t]he parties utilized an impartial
25 mediator, and the matter was resolved by means of a mediator’s proposal” and thus was
“non-collusive”); Harris v. Vector Mktg. Corp., 2011 WL 1627973, at *8 (N.D. Cal. Apr.
26 29, 2011) (“[T]he parties reached their settlement during a mediation session conducted by
[a mediator], who has significant experience mediating complex civil disputes” further
27 supporting conclusion that “it was not the result of collusion or bad faith by the parties or
28 counsel.”); Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 852 (N.D. Cal. 2010)
(same).
30 12 Case No. 2:17-cv-03679-SVW-AGR
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1 2. The Settlement’s Terms Are Adequate

2 Rule 23(e)(2)(C) and (D) directs the Court to evaluate whether “the relief provided
3 for the class is adequate” and “the proposal treats class members equitably relative to each
4 other.” Here, the Settlement represents an excellent result for the Class. Furthermore, Class
5 Counsel, with the assistance of Class Representatives’ damages expert, has proposed a plan
6 for allocating the Settlement proceeds that ensures all Class Members will be treated
7 equitably relative to their respective losses. See infra III(B)(2)(b).
8 a. The Settlement Provides Substantial Relief, Especially in
9 Light of the Costs, Risks, and Delay of Further Litigation
10 A key factor to be considered in assessing the approval of a class action settlement is
11 the plaintiff’s likelihood of success on the merits, balanced against the relief offered in
12 settlement. Here, the Settlement provides for an immediate cash recovery of $154,687,500
13 to be allocated among Class Members following the deduction of Court-approved fees and
14 expenses. In comparison, if the Action had continued, Class Representatives faced
15 numerous factual and legal risks that could have precluded them from securing any recovery
16 at all on behalf of the Class. While Class Representatives remain confident in their ability
17 to ultimately prove their claims, further litigation—including here, defeating the pending
18 Summary Judgment Motions, Ninth Circuit Petition, and winning at trial—is always a risky
19 proposition. See, e.g., Salazar v. Midwest Servicing Grp., Inc., 2018 WL 3031503, at *6
20 (C.D. Cal. June 4, 2018) (a settlement agreement’s “elimination of risk, delay, and further
21 expenses weighs in favor of approval”).
22 To this day, Defendants adamantly deny any wrongdoing. Had the Settlement not
23 been reached, the SAC Defendants, as they did at the motion to dismiss and summary
24 judgment stages, undoubtedly would have argued at trial that the statements at issue were
25 not false at the time they were made and that they did, in fact, disclose certain material
26 information that Class Representatives alleged Defendants concealed from the market.
27 Relatedly, the SAC Defendants would continue to assert that they did not act with the
28 required intent, or “scienter.”
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1 Even if Class Representatives ultimately prevailed in proving materiality, falsity, and

2 scienter, this Action also would have involved significant risks to establishing loss
3 causation and damages. Throughout the Action, Defendants vigorously asserted that the
4 price declines in Snap Common Stock on the alleged corrective disclosure dates were
5 unrelated to the alleged fraud, as well as that the “truth” regarding Defendants’ alleged fraud
6 was revealed prior to the end of the Class Period. Ultimately, resolution of these issues
7 would come down to a “battle of the experts” with no guarantee as to which expert’s
8 testimony or methodology would be more compelling to a jury. In re Cendant Corp. Litig.,
9 264 F.3d 201, 239 (3d Cir. 2001) (“establishing damages at trial would lead to a battle of
10 experts . . . with no guarantee whom the jury would believe”).12
11 Moreover, even a unanimous jury verdict on each of the above elements would not
12 guarantee a recovery for the Class. Instead, Class Representatives and Class Counsel would
13 then face significant and vigorous post-trial motion practice from the SAC Defendants,
14 potential individual trials related to any Class Members for whom the SAC Defendants
15 elected to challenge in the claims process, and further appeals to the Ninth Circuit that
16 would further place any Class Member’s recovery in jeopardy for years.
17 Here, the Settlement represents a substantial percentage of the potential recoverable
18 damages (as estimated by Class Representatives’ damages expert) had this Action
19 proceeded to trial. Damages in a securities fraud case are typically presented to the fact
20 finder on a per share basis and are a measure of the artificial inflation in a company’s stock
21 price caused by the alleged fraud. The artificial inflation is typically measured by the
22 amount of inflation that leaves the stock, net of industry and market forces, when there is a
23 corrective disclosure. In this case, Class Representatives alleged four corrective disclosures,
24 and Class Representatives’ damages expert estimated that $10.08 of artificial inflation was
25 gradually removed from the stock price through those corrective events.
26
12
See also Radient, 2014 WL 1802293, at *2 (“Providing and calculating damages
27 required a complex analysis, requiring the jury to parse divergent positions of expert
28 witnesses in a complex area of law. The outcome of that analysis is inherently difficult to
predict and risky.”).
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1 Class Representatives’ damages expert has estimated aggregate damages in this

2 Action to range from approximately $1.147 billion to approximately $2.4 billion.
3 Importantly, the high end of this damages estimate assumes that Class Representatives
4 would be able to prove damages based on all four alleged corrective disclosures and that
5 they would not need to disaggregate, or parse out, confounding non-fraud related
6 information on those dates. Class Representatives recognize, however, that certain of the
7 alleged corrective disclosures would have been difficult to prove had the Action continued.
8 For example, if the SAC Defendants succeeded in having one or more of the alleged
9 corrective disclosures dismissed at summary judgment, or succeeded in proving that Class
10 Representatives had not adequately disaggregated the price impact of any confounding
11 information, damages would be reduced. Additionally, at class certification, the SAC
12 Defendants argued that the Class Period should end no later than May 10, 2017, as they
13 contended that the truth regarding the impact of Instagram was fully revealed by then. ECF
14 No. 292.13 If the SAC Defendants were successful in proving this argument, in particular,
15 Class Representatives would lose three of their four alleged corrective disclosures and total
16 aggregate damages, as estimated by their damages’ expert, would be closer to $1.147 billion
17 without accounting for any potentially confounding information. Accordingly, based on
18 these estimates, the global $187.5 million settlement represents approximately 7.8% to
19 16.3% of the Class’s potential aggregate damages, which is many multiplies of the median
20 recovery of 1.2% in these cases.14
21
22 13
Although the Class has already been formally certified, a court’s prior grant of
23 certification “may be altered or amended before final judgment” under Rule 23(c)(1)(C).
See In re OmniVision Techs., Inc., 559 F. Supp. 2d 1036, 1041 (N.D. Cal. 2007) (noting
24 that even if a class is certified, “there is no guarantee the certification would survive through
trial, as Defendants might have sought decertification or modification of the class”).
25 14
See Stefan Boettrich & Svetlana Starykh, Recent Trends in Securities Class Action
26 Litigation: 2018 Full-Year Review, NERA Economic Consulting (Jan. 29, 2019),
https://www.nera.com/content/dam/nera/publications/2019/PUB_Year_End_Trends_0128
27 19_Final.pdf, at 35 (between 1996 and 2018 in securities class actions with investor losses
28 between $1 billion and $4.999 billion, the median settlement represented a recovery of
approximately 1.2% of aggregate investor losses).
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1 Thus, the Settlement offers substantial benefits in that each Class Member will
2 recover a monetary award immediately, without the risk of an unfavorable outcome at
3 summary judgment or trial. The Settlement also avoids the expense and delay of continuing
4 to prosecute this litigation through summary judgment, trial, and any appeal.
5 b. The Proposed Settlement Does Not Unjustly Favor Any
6 Class Member
7 The Court must also ultimately assess the Settlement’s effectiveness in equitably
8 distributing relief to members of the Class. Rule 23(e)(2)(C)(ii). Here, too, the Court can
9 readily find the Settlement will likely earn approval. The Plan of Allocation being proposed
10 by Class Representatives (the “Plan”) provides for a straightforward and effective means of
11 distributing the Net Settlement Fund to the Class and treats Class Members equitably
12 relative to each other. See Rule 23(e)(2)(D).
13 Here, the Plan provides for distribution of the Net Settlement Fund to Class Members
14 who submit timely and valid Claims demonstrating a loss on their transactions in Snap
15 Common Stock purchased or acquired during the Class Period. The formula to apportion
16 the Net Settlement Fund—developed in consultation with Class Representatives’ damages
17 expert—is based on the estimated artificial inflation in the price of Snap Common Stock
18 over the course of the Class Period that was allegedly caused by Defendants’ alleged
19 misconduct. Further, the Plan apportions the Net Settlement Fund among Class Members
20 based on when they purchased, acquired, and/or sold their Snap Common Stock, and was
21
22
23
24
25
26
27
28
30 16 Case No. 2:17-cv-03679-SVW-AGR
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1 created without consideration of Class Representatives’ individual transactions.15 This

2 method ensures Class Members’ recoveries are based upon the relative losses they
3 sustained, and eligible Class Members will receive a pro rata distribution from the Net
4 Settlement Fund calculated in the same manner. Accordingly, the Plan applies in an
5 equitable manner to all Class Members. See Radient, 2014 WL 1802293, at *5 (“A
6 settlement in a securities class action case can be reasonable if it fairly treats class members
7 by awarding a pro rata share to every Authorized Claimant, but also sensibly makes
8 interclass distinctions based upon, inter alia, the relative strengths and weaknesses of class
9 members’ individual claims and the timing of purchases of the securities at issue.”); Ansell
10 v. Laikin, 2012 WL 13034812, at *9 (C.D. Cal. July 11, 2012) (finding that “Plan of
11 Allocation, which distributes the proceeds of the net settlement fund on a pro rata basis,
12 based on the claimant’s recognized claim amounts, is fair and reasonable”).16 Moreover, as
13 explained in the proposed Claim Form, attached as Exhibit A-5 to the Stipulation, Claims
14
15
As set forth in the proposed Notice (Ex. A-2 to the Stipulation), based on Class
15 Representatives’ damages expert’s estimate of the number of shares of Snap Common Stock
16 purchased or otherwise acquired during the Class Period that may have been affected by the
conduct at issue in the Action, and assuming that all Class Members elect to participate in
17 the Settlement, the estimated average recovery per eligible share of Snap Common Stock
(before deducting any Court-approved fees, expenses, and costs as described in the Notice)
18 is approximately $0.55. This is only an estimate, and some Class Members may recover
19 more or less than this amount depending on, inter alia: (i) when the price at which they
purchased/acquired shares of Snap Common Stock; (ii) whether they purchased shares of
20 Snap Common Stock in Snap’s IPO (which would make them potentially eligible to receive
additional proceeds from the State Settlement), or on the open market; (iii) whether they
21 sold their shares of Snap Common Stock and, if so, when; (iv) the total number and value
of valid Claims submitted; (v) the amount of Notice and Administration Costs; and (vi) the
22 amount of attorneys’ fees and Litigation Expenses awarded by the Court.
23 16 The proposed Notice (Ex. A-2 to the Stipulation) also explains that Class Counsel’s
request for expenses may include a request for reimbursement of Class Representatives’
24 reasonable costs and expenses directly relating to their representation of the Class, as
25 permitted by the PSLRA, in an aggregate amount not to exceed $275,000. See 15 U.S.C.
§ 78u-4(a)(4) (“The share of any final judgment or of any settlement that is awarded to a
26 representative party serving on behalf of a class shall be equal, on a per share basis, to the
portion of the final judgment or settlement awarded to all other members of the class.
27 Nothing in this paragraph shall be construed to limit the award of reasonable costs and
28 expenses (including lost wages) directly relating to the representation of the class to any
representative party serving on behalf of a class.”).
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1 submitted for the Settlement will also be processed in accordance with the plan of allocation
2 for the State Settlement and Class Members may be eligible to receive additional proceeds
3 from the State Settlement as well without reducing their recovery in this Action.
4 c. The Anticipated Request for Attorneys’ Fees Is Reasonable
5 The proposed Notice provides that Class Counsel, on behalf of Plaintiffs’ Counsel,
6 will apply for an award of attorneys’ fees not to exceed 25% of the Settlement Fund, plus
7 reasonable expenses incurred in prosecuting the Action. A fee of up to 25% is eminently
8 reasonable here and is fully supported by Ninth Circuit case law. See Hanlon v. Chrysler
9 Corp., 150 F.3d 1011, 1029 (9th Cir. 1998) (the Ninth Circuit has established 25% of the
10 common fund as a “benchmark” for what constitutes a reasonable fee); see also Vasquez v.
11 Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010) (“[T]he exact percentage
12 varies depending on the facts of the case, and in most common fund cases, the award
13 exceeds [the 25%] benchmark.”). Moreover, there is ample precedent in this District for
14 granting attorneys’ fees of 25% (or greater) in securities class actions. See, generally e.g.,
15 Nirmul Decl. Ex. 2, Mild v. PPG Industries, Inc. et al., No. 2:18-cv-04231-RGK-JEM, slip
16 op. at 2, ECF No. 132 (C.D. Cal. Oct. 25, 2019) (awarding 25% fee); Nirmul Decl. Ex. 3,
17 Daniel Turocy v. El Pollo Loco Holdings, Inc. et al., 8:15-cv-01343-DOC-KES, slip op. at
18 1, ECF No. 219 (C.D. Cal. Aug. 27, 2019) (awarding 30% fee); Nirmul Decl. Ex. 4, Sunil
19 Sudunagunta v. Nantkwest, Inc. et al., No. 2:16-cv-01947-MWF-JEM, slip op. at 7, ECF
20 No. 188 (C.D. Cal. May 13, 2019) (awarding 25% fee).
21 A fee of up to 25% of the Settlement Fund would also befit the substantial risks Class
22 Counsel undertook in pursuing the claims in the Action, its extensive litigation efforts, and
23
24
25
26
27
28
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1 the excellent recovery obtained for the benefit of the Class.17 Further, Class Members will
2 have an opportunity to weigh in on Class Counsel’s fee request before the Settlement
3 Hearing.
4 d. Class Representatives Have Identified All Agreements Made
5 in Connection with the Settlement
6 In connection with the Settlement, the Parties also have entered into a confidential
7 Supplemental Agreement regarding requests for exclusion, dated March 20, 2020
8 (“Supplemental Agreement”). See Stipulation ¶ 36. The Supplemental Agreement sets forth
9 the conditions under which Snap may exercise a right to terminate the Settlement in the
10 event that requests for exclusion from the Class exceed certain agreed-upon conditions
11 stated in the Supplemental Agreement (“Termination Threshold”).18 As is standard practice
12 in securities class actions, the Supplemental Agreement is not being made public in order
13 to avoid incentivizing the formation of a group of opt-outs for the sole purpose of leveraging
14 the Termination Threshold to extract an individual settlement. Pursuant to its terms, the
15 Supplemental Agreement may be submitted to the Court in camera or under seal. The
16
17
18
19
17
Additionally, the proposal that Class Counsel receives its award of attorneys’ fees
upon issuance of an order awarding such fees is appropriate and consistent with common
20 practice in cases of this nature. The Stipulation provides that if the Settlement is ultimately
terminated or the fee award is later reduced or reversed, Class Counsel will refund or repay
21 the subject amount to the Settlement Fund. See, e.g., NECA-IBEW Health & Welfare Fund
v. Goldman, Sachs & Co., 2016 WL 3369534, at *1 (S.D.N.Y. May 2, 2016) (“the fees and
22 expenses awarded herein shall be paid from the Settlement Fund to Lead Counsel
23 immediately upon entry of this Order, notwithstanding the existence of any timely filed
objections thereto, if any, or potential for appeal therefrom, or collateral attack on the
24 Settlement or any part thereof, subject to Plaintiffs’ Counsel’s obligation to repay all such
amounts with interest[.]”); In re AXA Rosenberg Inv’r Litig., 2012 WL 12920617, at *2
25 (N.D. Cal. Apr. 2, 2012) (same).
26 18
This type of agreement is standard in securities class actions and has no negative
impact on the fairness of the Settlement. See, e.g., Hefler v. Wells Fargo & Co., 2018 WL
27 4207245, at *11 (N.D. Cal. Sept. 4, 2018) (“The existence of a termination option triggered
28 by the number of class members who opt out of the Settlement does not by itself render the
Settlement unfair.”).
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1 Stipulation,19 Supplemental Agreement, and Term Sheet (as noted above) are the only
2 agreements concerning the Settlement entered into by the Parties.
3 IV. THE COURT SHOULD APPROVE THE FORM, CONTENT, AND
4 METHOD FOR DISSEMINATING NOTICE TO THE CLASS
5 Rule 23(c)(2)(B) requires notice to be “the best notice that is practicable under the
6 circumstances.” Further, Rule 23(e)(1) requires that notice of a settlement be directed “in a
7 reasonable manner to all class members who would be bound by the propos[ed settlement].”
8 Moreover, notice “must generally describe[] the terms of the settlement in sufficient detail
9 to alert those with adverse viewpoints to investigate and to come forward and be heard.”
10 Lane v. Facebook, Inc., 696 F.3d 811, 826 (9th Cir. 2012) (alteration in original). Notice
11 that is mailed to each member of a class “who can be identified through reasonable effort
12 constitutes reasonable notice.” Covidien, 2014 WL 360196, at *5.
13 As noted above, in order to maximize the efficiencies in the administration of the
14 Federal and State Settlements, and make simple and seamless for a Class Member to
15 participate in both the Federal and State Settlements, Class Representatives, State Plaintiffs,
16 and Defendants have agreed on a procedure with respect to joint notice and administration,
17 including the retention of a single administrator, JND.20 This protocol will ensure that Class
18 Members will receive just a single, mailed notice informing them of both the Federal and
19 State Settlements, through the joint Postcard Notice attached as Exhibits A-1 to the
20 Stipulation, along with the single, joint Summary Notice attached as Exhibit A-3 to the
21 Stipulation. These notices will direct recipients to a common, shared website,
22 www.SnapSecuritiesLitigation.com (the “Settlement Website”). Likewise, there will be a
23
24 19
As facilitated by Judge Phillips during the negotiation of the Stipulation and as set
forth in the Stipulation, Class Representatives, State Plaintiffs, and Defendants also agreed
25 on a procedure with respect to joint notice and administration of the Federal and State
26 Settlements.
20
The Court previously appointed JND as the Administrator to supervise and
27 administer the Class Notice. ECF No. 355. Class Representatives hereby request the Court
28 authorize Class Counsel to retain JND as the claims administrator for the Settlement.
See Stipulation, Ex. A ¶ 4.
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1 single Claim Form for the Federal and State Settlements, and Class Members will need to
2 complete and submit only one Claim Form in order to be potentially eligible to receive
3 payment from both the Federal and State Settlements. In light of the differences in the cases
4 and the terms of the respective settlements, separate long-form notices for the Federal and
5 State Settlements will be posted on the Settlement Website.
6 Consistent with Rule 23(c)(2)(B) and (e)(1), the Claims Administrator will mail the
7 Postcard Notice, attached as Exhibit A-1 to the Stipulation, to all persons and entities who
8 were previously identified in connection with Class Notice, including those persons and
9 entities listed in the records provided by Snap and the Underwriter Defendants, as well as
10 any other potential Class Members who otherwise may be identified through further
11 reasonable effort. The Claims Administrator will also utilize its proprietary list of banks,
12 brokers, and other nominees (“Nominees”) that purchase securities on behalf of beneficial
13 owners in order to reach additional potential Class Members.21 The Postcard Notice will
14 provide important information regarding the Settlement, along with the rights of Class
15 Members in connection therewith, and will direct recipients to the Settlement Website for
16 more information regarding the Action and the Settlement, including a downloadable
17
18
19
20
21
22
23
24
25 21
Nominees will be asked to provide email addresses, if available, along with physical
26 mailing addresses for potential Class Members. Although it is not commonplace for
Nominees to provide email addresses for purposes of providing notice in securities class
27 actions, if email addresses are provided, JND will also email notice to those potential Class
28 Members. Class Members will be mailed the long-form Notice and Claim Form upon
request.
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1 version of the long-form Notice.22

2 The Parties propose supplementing the mailed Postcard Notice with the publication
3 of the Summary Notice in Investor’s Business Daily and The Wall Street Journal and over
4 PR Newswire. In addition, Class Counsel will make copies of the detailed, long-form Notice
5 and Claim Form available on the Settlement Website, along with other documents and
6 information relevant to the Settlement.23 Finally, Class Representatives believe a media
7 notice component will be particularly beneficial to reach proposed Class Members in this
8 Action and propose serving the Notice Ads, in the forms attached as A-4 to the Stipulation,
9 over appropriate social media platforms jointly agreed to by the Parties.
10 The proposed notices will apprise prospective Class Members of the terms of the
11 Settlement and of their options in connection therewith, as well as provide all information
12 required by Rule 23(c)(2)(B). Collectively, the proposed forms of notice advise of, inter
13 alia: (i) the nature of the Action; (ii) the definition of the certified Class; (iii) the Class’s
14 claims, issues, or defenses; (iv) the Settlement’s terms; (v) the consideration that caused
15 Class Representatives and Class Counsel to conclude that the Settlement is fair, reasonable,
16 and adequate; (vi) Class Members’ right to request exclusion from the Class or object to the
17 Settlement, or any aspect thereof, and the procedures doing so; (vii) the procedures for
18
19 22
Courts routinely allow notice by postcard, such as Class Representatives are
20 proposing here. See, e.g., Baker v. SeaWorld Entertainment, Inc., et al., No. 3:14-cv-2129-
MMA (AGS) (S.D. Cal. Feb. 19, 2020), ECF No. 518 at 5 (approving notice though mailing
21 of postcard notice, posting of long-form notice and claim form on website, and publishing
a summary notice); In re Banco Bradesco S.A. Sec. Litig., No. 1:16-cv-04155 (GHW)
22 (S.D.N.Y. July 24, 2019), ECF No. 197 at 5 (approving notice through “mailing and
23 distribution of the Postcard Notice, the posting of the Notice and Claim Form on the
Settlement Website, and the publication of the Summary Notice”); Edwards v. N. Am.
24 Power & Gas, LLC, 2018 WL 3715273, at *5 (D. Conn. Aug. 3, 3018) (approving notice
by postcard, which directed class members to settlement website); McLaughlin v. IDT
25 Energy, 2018 WL 3642627, at *9 (E.D.N.Y. July 30, 2018) (same); Schaffer v. Litton Loan
26 Servicing, LP, 2012 WL 10274679, at *8 (C.D. Cal. Nov. 13, 2012) (same); William B.
Rubenstein, Newberg on Class Actions § 8:28 (5th ed. 2019) (“[N]umerous courts have held
27 that postcard notice is ‘more than sufficient.’”) (collecting cases).
28
23
The proposed Notice and Summary Notice are attached to the Stipulation as Exhibits
A-2 and A-3, respectively.
30 22 Case No. 2:17-cv-03679-SVW-AGR
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1 entering an appearance; (viii) Class Members’ right to participate in the Settlement and the
2 procedures for submitting a Claim; (ix) the binding effect of a class judgment; (x) the
3 proposed plan for allocating the Settlement proceeds; (xi) the date, time, and place of the
4 Settlement Hearing, as well as the possibility that the Settlement Hearing may be conducted
5 telephonically; and (xii) how to obtain additional information regarding the Settlement. The
6 notices also provide contact information for Class Counsel and counsel for Defendants, as
7 well as the postal address for the Court. The proposed notices also include all of the
8 information required by the PSLRA.24
9 Further, Rule 23(h)(1) requires that “[n]otice of the motion [for attorneys’ fees] must
10 be served on all parties and, for motions by class counsel, directed to class members in a
11 reasonable manner.” The proposed notice satisfies these requirements—the Notice
12 specifically advises Class Members that Class Counsel will apply to the Court for an award
13 of attorneys’ fees not to exceed 25% of the Settlement Fund plus Litigation Expenses in an
14 amount not to exceed $3.25 million to be paid from the Settlement Fund.
15 The manner of providing notice, which includes notice by first-class mail to Class
16 Members who can be reasonably identified, supplemented by publication and internet
17 notice, represents “the best notice that is practical under the circumstances” and easily
18 satisfies the requirements of due process, Rule 23, and the PSLRA. Moreover, courts
19
20
21 24
Specifically with respect to cases filed under the PSLRA, notices of settlements must
22 also state: (i) “[t]he amount of the settlement proposed to be distributed to the parties to the
action, determined in the aggregate and on an average per share basis;” (ii) “[i]f the parties
23 do not agree on the average amount of damages per share that would be recoverable if the
plaintiff prevailed on each claim alleged under this title [], a statement from each settling
24 party concerning the issue or issues on which the parties disagree;” (iii) “a statement
25 indicating which parties or counsel intend to make [] an application [for attorneys’ fees or
costs], the amount of fees and costs that will be sought (including the amount of such fees
26 and costs determined on an average per share basis), and a brief explanation supporting the
fees and costs sought;” (iv) “[t]he name, telephone number, and address of one or more
27 representatives of counsel for the plaintiff class who will be reasonably available to answer
28 questions from class members . . .;” and (v) “[a] brief statement explaining the reasons why
the parties are proposing the settlement.” 15 U.S.C. § 78u-4(a)(7).
30 23 Case No. 2:17-cv-03679-SVW-AGR
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1 routinely approve comparable notice procedures.25 Accordingly, Class Representatives

2 respectfully submit that the proposed notice program is adequate and should be approved
3 by the Court.
4 V. PROPOSED SCHEDULE OF SETTLEMENT-RELATED EVENTS
5 In connection with preliminary approval of the Settlement, the Court must also set
6 dates for certain future events (e.g., mailing of the Postcard Notice, publication of the
7 Summary Notice, filing of supporting briefs, deadlines for requesting exclusion from the
8 Class, objecting to the Settlement, submitting Claim Forms, and the Settlement Hearing).
9 The Parties propose the following schedule, which is based on Preliminary Approval26 and
10 the date for which the Settlement Hearing is scheduled:
11 Event Proposed Time for Compliance
12 Deadline for commencing mailing Twenty-one (21) calendar days after
13 Postcard Notice to Class Members Preliminary Approval (Preliminary
(“Notice Date”) Approval Order ¶4(a))
14
Deadline for establishing Settlement Contemporaneously with the Notice Date
15 Website and posting Notice and Claim (Preliminary Approval Order ¶4(b))
Form on same
16
Deadline for commencement of media Contemporaneously with the Notice Date
17 campaign (Preliminary Approval Order ¶4(c))
18 Deadline for publishing the Summary Ten (10) calendar days after the Notice
Notice Date (Preliminary Approval Order ¶4(d))
19
20
25
See, e.g., Spann, 314 F.R.D. at 330–31 (finding notice by first class mail and
21 publication satisfied due process); Garcia v. Ceva Logistics, U.S.A., 2017 U.S. Dist. LEXIS
177946, at *13 (C.D. Cal. Oct. 23, 2017) (approving notice that included, inter alia, the
22 mailing of postcard notice to members of the class that included a link to a website where
23 class members could access the long-form notice and claim form); Middlesex Retirement
System, et al. v. Quest Software, et al., No. 2:06-cv-06863-DOC (RNBx) (C.D. Cal. Dec. 7,
24 2009), ECF No. 267 (approving notice by mail and publication of summary notice in Wall
Street Journal); In re Portal Software Sec. Litig., 2007 WL 1991529, at *7 (N.D. Cal. June
25 30, 2007) (dissemination of notice to all reasonably identifiable class members with
26 summary notice published in Investor’s Business Daily approved as best practical).
26
In order for Preliminary Approval to be effectuated, the Notice, Postcard Notice,
27 Summary Notice, Notice Ads, and Claim Form must be approved by this Court and the
28 Postcard Notice, Summary Notice, and Claim Form must be approved by the State Court
and Preliminary Approval Orders must be entered in both cases.
30 24 Case No. 2:17-cv-03679-SVW-AGR
SETTLEMENT
#:17800
1 Event Proposed Time for Compliance

2 Deadline for filing papers in support of Forty-Six (46) calendar days after the
3 final approval of the Settlement, the Notice Date (Preliminary Approval Order
Plan of Allocation, and the request for ¶25)
4 attorneys’ fees and Litigation Expenses
5 Deadline for receipt of requests for Sixty (60) calendar days after the Notice
exclusion from the Class or objections Date (Preliminary Approval Order ¶¶12,
6 to the Settlement, Plan of Allocation, 15)
and/or the request for attorneys’ fees
7 and Litigation Expenses
8 Deadline for filing reply papers Seven (7) calendar days prior to the
Settlement Hearing (Preliminary
9 Approval Order ¶25)
10 Settlement Hearing At the Court’s convenience, at least one
hundred ten (110) calendar days after the
11 date of entry of the Preliminary Approval
Order (Preliminary Approval Order ¶2)
12
Deadline for submitting Claim Forms Ninety (90) calendar days after the Notice
13 Date (Preliminary Approval Order ¶8)
14
15 If the Court agrees with the proposed schedule, Class Representatives request the
16 Court schedule the Settlement Hearing for a date 110 calendar days after Preliminary
17 Approval, or at the Court’s earliest convenience thereafter. For example, if Preliminary
18 Approval occurs on April 6, 2020, Class Representatives request that the Court schedule
19 the Settlement Hearing for Monday, July 27, 2020, or at the earliest date thereafter on which
20 the Court’s schedule will allow the hearing.
21 VI. CONCLUSION
22 Based on the foregoing, Class Representatives respectfully submit that the proposed
23 Settlement is a fair and reasonable resolution and warrants this Court’s preliminary
24 approval. Class Representatives respectfully request the Court enter the [Proposed] Order
25 Preliminarily Approving Settlement and Providing for Notice submitted herewith, which
26 will: (i) preliminarily approve the proposed Settlement; (ii) approve the form and manner
27 of giving notice of the Settlement to the Class; and (iii) schedule a hearing date and time to
28 consider final approval of the Settlement and related matters.
30 25 Case No. 2:17-cv-03679-SVW-AGR
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#:17801
1 Dated: March 20, 2020 Respectfully submitted,

2 KESSLER TOPAZ
MELTZER & CHECK, LLP
3
4 /s/ DRAFT
SHARAN NIRMUL (Pro Hac Vice)
5 [email protected]
NATHAN HASIUK (Pro Hac Vice)
6 [email protected]
JONATHAN F. NEUMANN (Pro Hac Vice)
7 [email protected]
8 280 King of Prussia Road
Radnor, PA 19087
9 Telephone: (610) 667-7706
Facsimile: (267) 948-2512
10
- and -
11
12 JENNIFER L. JOOST (Bar No. 296164)
[email protected]
13 STACEY M. KAPLAN (Bar No. 241989)
[email protected]
14 One Sansome Street, Suite 1850
15 San Francisco, CA 94104
Telephone: (415) 400-3000
16 Facsimile: (415) 400-3001
17 Attorneys for Class Representatives Smilka
Melgoza, as trustee of the Smilka Melgoza Trust
18 U/A DTD 04/08/2014, Rediet Tilahun, Tony Ray
19 Nelson, Rickey E. Butler, Alan L. Dukes, Donald R.
Allen and Shawn B. Dandridge, and Class Counsel
20 for the Class
21 ROSMAN & GERMAIN LLP
DANIEL L. GERMAIN (Bar No. 143334)
22 [email protected]
23 16311 Ventura Boulevard, Suite 1200
Encino, CA 91436
24 Telephone: (818) 788 0877
Facsimile: (818) 788-0885
25
26 Liaison Counsel for the Class
27
28
30 26 Case No. 2:17-cv-03679-SVW-AGR
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#:17802
1 LARSON O’BRIEN LLP

STEPHEN G. LARSON (Bar No. 145225)
2 [email protected]
3 PAUL A. RIGALI (Bar No. 262948)
[email protected]
4 555 South Flower Street, Suite 4400
Los Angeles, CA 90071
5 Telephone: (213) 436-4888
Facsimile: (213) 623-2000
6
7 Local Counsel for Class Representatives
8 THE SCHALL LAW FIRM

BRIAN SCHALL (Bar No. 290685)
9 [email protected]
10 1880 Century Park East, Suite 404
Los Angeles, CA 90067
11 Telephone: (310) 301-3335
Facsimile: (310) 388-0192
12
Additional Counsel for Class Representatives
13 Smilka Melgoza, as trustee of the Smilka Melgoza
14 Trust U/A DTD 04/08/2014, and Rediet Tilahun
15
16
17
18
19
20
21
22
23
24
25
26
27
28
30 27 Case No. 2:17-cv-03679-SVW-AGR
SETTLEMENT

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Case 2:17-cv-03679-SVW-AGR Document 368-1 Filed 03/20/20 Page 1 of 32 Page ID

14 c. The Anticipated Request for Attorneys’ Fees Is

9 Chun-Hoon v. McKee Foods Corp.,

20 Hefler v. Wells Fargo & Co.,

28 In re MGM Mirage Secs. Litig.,

1 Misra v. Decision One Mortg. Co.,

6 NECA-IBEW Health & Welfare Fund v. Goldman, Sachs & Co.,

17 Satchell v. Fed. Express Corp.,

25 Van Bronkhorst v. Safeco Corp.,

1 Williams v. Costco Wholesale Corp.,

1 pursuant to Rule 56 of the Federal Rules of Civil Procedure (“Summary Judgment

1 2. The Settlement’s Terms Are Adequate

1 Even if Class Representatives ultimately prevailed in proving materiality, falsity, and

1 Class Representatives’ damages expert has estimated aggregate damages in this

1 created without consideration of Class Representatives’ individual transactions.15 This

1 version of the long-form Notice.22

1 routinely approve comparable notice procedures.25 Accordingly, Class Representatives

1 Event Proposed Time for Compliance

1 Dated: March 20, 2020 Respectfully submitted,

1 LARSON O’BRIEN LLP

8 THE SCHALL LAW FIRM

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