Sabbagh v. Cell Therapeutics Inc et al, No. 2:2010cv00414 - Document 101 (W.D. Wash. 2012)
Court Description: ORDER granting (98) Motion for Preliminary Approval of Settlement, Granting Conditional Class Certification and Providing for Notice in cases 2:10-cv-00414-MJP, 2:10-cv-00480-MJP, and 2:10-cv-00559-MJP. Settlement Hearing set for 7/20/2012 at 01:30 PM in Courtroom 14206 before Judge Marsha J. Pechman; signed by Judge Marsha J. Pechman.(SC)
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Sabbagh v. Cell Therapeutics Inc et al Doc. 101 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 11 In re CELL THERAPEUTICS, INC. Master Docket No. C10-414 MJP CLASS ACTION LITIGATION 13 (consolidated with Nos. C10-480 MJP and C10-559MJP) 14 CLASS ACTION 12 15 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 16 17 18 19 This Document Relates To: All Actions 20 21 22 23 24 25 26 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE C10-414 MJP Dockets.Justia.com 1 This class action comes before the Court on the Lead Plaintiffs’ Unopposed Motion for 2 Preliminary Approval of Class Action Settlement, Conditional Class Certification, and Approval 3 of Notice (“Motion”) and on the Stipulation of Settlement dated February 13, 2012 (the 4 “Stipulation”) entered into by the Lead Plaintiffs and Defendants. The Court has reviewed the 5 Motion and the Stipulation, and attached exhibits, which set forth the terms and conditions for a 6 proposed settlement of and for dismissal of the Action with prejudice, upon the terms and 7 conditions of the Stipulation, and finds that the Motion is due to be granted. 8 All defined terms used in this Order shall have the same meanings as set forth in the 9 Stipulation. 10 NOW, THEREFORE, the Court hereby ORDERS: 11 1. For purposes of settlement only, pursuant to Fed. R. Civ. P. 23(a) and (b)(3), the 12 Court hereby conditionally certifies a Class consisting of all Persons (other than those Persons 13 who timely and validly request exclusion from the Class) who purchased the common stock of 14 CTI between March 25, 2008 and March 22, 2010, inclusive. Excluded from the Class are 15 Defendants, members of the Individual Defendants’ immediate families, the directors, officers, 16 subsidiaries, and affiliates of CTI, any person, firm, trust, corporation, officer, director or other 17 individual or entity in which any Defendant has a controlling interest, and the legal 18 representatives, affiliates, heirs, successors-in-interest or assigns of any such excluded person. 19 Solely for the purposes of effectuating the settlement, the Court finds and concludes that the 20 requirements of Fed. R. Civ. P. 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure have 21 been satisfied, as follows: 22 (a) 23 the members of the Class are so numerous that joinder of all members is impracticable; 24 (b) there are questions of law and fact common to the Class; 25 (c) the claims and defenses of the representative parties are typical of the 26 Class; ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 1 C10-414 MJP 1 (d) 2 the representative parties will fairly and adequately protect the interests of the Class; and 3 (e) the Action satisfies the requirements of Fed. R. Civ. P. 23(b)(3) in that 4 there are questions of law and fact common to the members of the 5 Class that predominate over any questions affecting only individual 6 members, and that a class action is superior to other available methods 7 for the fair and efficient adjudication of the controversy. 8 2. For purposes of settlement only, the Court finds that Satish Shah, David Gipson, 9 and Xavian L. Draper possess claims that are typical of the claims of Class Members and that 10 they have and will adequately represent the interest of Class Members, and the Court appoints 11 them as the representatives of the Class and appoints Lead Counsel, Brower Piven, A 12 Professional Corporation as counsel for the Class. 13 3. If for any reason the Effective Date, as defined in ¶ 1.10 of the Stipulation, does 14 not occur, this conditional certification of the Class shall be deemed null and void without the 15 need for further action by the Court or any of the Settling Parties. In such circumstances, each of 16 the Settling Parties shall retain its currently existing rights to seek or to object to the certification 17 of this litigation as a class action under Fed. R. Civ. P. 23, or any state or federal rule, statute, 18 law, or provision, and to contest and appeal any grant or denial of certification in this litigation 19 or in any other litigation on any other grounds. 20 4. The Court does hereby preliminarily approve the Stipulation and the settlement, 21 subject to further consideration at the Settlement Hearing described below. Therefore, it 22 GRANTS the motion for preliminary approval of the proposed class settlement. 23 5. A hearing (the “Settlement Hearing”) shall be held before this Court on July 20, 2012 24 at 1:30 p.m. for the following purposes: 25 (a) 26 to determine whether the Court should grant certification to the Class pursuant to Fed. R. Civ. P. 23(a) and (b)(3); ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 2 C10-414 MJP 1 (b) to determine whether the proposed settlement of the Action on the terms 2 and conditions provided for in the Stipulation is fair, reasonable, and 3 adequate to the Class and should be approved by the Court; 4 (c) 5 should be entered; 6 (d) 7 to determine whether the proposed Plan of Allocation for the proceeds of the settlement is fair and reasonable, and should be approved by the Court; 8 (e) 9 to determine whether any applications for attorneys’ fees or expenses to Plaintiffs’ Counsel should be approved; and 10 11 to determine whether a Judgment as provided in ¶ 1.14 of the Stipulation (f) 6. to rule upon such other matters as the Court may deem appropriate. The Court approves, as to form and content, the Notice of Proposed Settlement of 12 Class Action (the “Notice”), the Summary Notice (as defined below) for publication, and the 13 Proof of Claim Form and Release (“Proof of Claim”) annexed as Exhibits A-1 to A-3 hereto, and 14 finds that the mailing and distribution of the Notice and publishing of the Summary Notice 15 substantially in the manner and form set forth in ¶¶ 7-8 of this Order meet the requirements of 16 Fed. R. Civ. P. 23, the Securities Exchange Act of 1934, 15 U.S.C. §78u-4(a)(7), as amended, 17 including the Private Securities Litigation Reform Act of 1995, and due process, and is the best 18 notice practicable under the circumstances, and shall constitute due and sufficient notice to all 19 Persons entitled to notice. 20 7. The firm of Garden City Group, Inc. (“Claims Administrator”), is hereby 21 appointed to supervise and administer the notice procedure as well as the processing of claims as 22 more fully set forth below: 23 (a) CTI shall cooperate, to the extent necessary, in making its transfer records 24 and shareholder information available to the Claims Administrator for the 25 purpose of identifying and giving notice to the Class; 26 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 3 C10-414 MJP 1 (b) No later than fifteen (15) days after entry of this Order, Lead Counsel shall 2 cause a copy of the Notice, substantially in the form annexed as Exhibit A- 3 1, to be mailed by first class mail to all potential Class Members who can 4 be identified with reasonable effort; 5 (c) Lead Counsel shall cause the summary notice, in substantially the form 6 annexed as Exhibit A-2 (the “Summary Notice”), to be published three (3) 7 separate times, with no less than four (4) business days between each 8 publication, over the PR Newswire, with such publication completed no 9 later than twenty-eight (28) days after the entry of this Order; and 10 (d) At least ten (10) days prior to the Settlement Hearing, Lead Counsel shall 11 cause to be served on counsel for Defendants and filed with the Court 12 proof, by affidavit or declaration, of such mailing and publishing. 13 8. Nominees who purchased the common stock of CTI for the beneficial ownership 14 of Class Members during the Class Period shall send the Notice to all beneficial owners of such 15 CTI securities within seven (7) days after receipt thereof, or send a list of the names and 16 addresses of such beneficial owners to the Claims Administrator within seven (7) days of receipt 17 thereof, in which event the Claims Administrator shall promptly mail the Notice to such 18 beneficial owners. The Claims Administrator shall, if requested, reimburse banks, brokerage 19 houses or other nominees solely for their reasonable out-of pocket expenses incurred in 20 providing notice to beneficial owners who are potential Class Members out of the Settlement 21 Fund, which expenses would not have been incurred except for the sending of such Notice, 22 subject to further order of this Court with respect to any dispute concerning such compensation. 23 9. In order to be entitled to participate in the Net Settlement Fund, in the event the 24 settlement is effected in accordance with the terms and conditions set forth in the Stipulation, 25 each Class Member shall take the following actions and be subject to the following conditions: 26 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 4 C10-414 MJP 1 (a) A properly executed Proof of Claim, substantially in the form attached 2 hereto as Exhibit A-3, must be submitted to the Claims Administrator, at 3 the Post Office Box indicated in the Notice, postmarked not later than one 4 hundred twenty (120) days after the initial mailing of the Notice. Such 5 deadline may be further extended by Court Order. Each Proof of Claim 6 shall be deemed to have been submitted when postmarked (if properly 7 addressed and mailed by first class mail, postage prepaid) provided such 8 Proof of Claim is actually received prior to the motion for an order of the 9 Court approving distribution of the Net Settlement Fund. Any Proof of 10 Claim submitted in any other manner shall be deemed to have been 11 submitted when it was actually received at the address designated in the 12 Notice. Any Class Member who does not submit a Proof of Claim within 13 the time provided for shall be barred from sharing in the distribution of the 14 proceeds of the Net Settlement Fund, unless otherwise ordered by the 15 Court. Notwithstanding the foregoing, Lead Counsel shall have discretion 16 to accept late-submitted claims for processing by the Claims 17 Administrator so long as the distribution of the Net Settlement Fund is not 18 materially delayed thereby. 19 (b) The Proof of Claim submitted by each Class Member must satisfy the 20 following conditions: (i) it must be properly completed, signed and 21 submitted in a timely manner in accordance with the provisions of the 22 preceding subparagraph; (ii) it must be accompanied by adequate 23 supporting documentation as are specified in the Proof of Claim and as are 24 reasonably available to the Authorized Claimant for the transactions 25 reported therein, in the form of broker confirmation slips, broker account 26 statements, an authorized statement from the broker containing the ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 5 C10-414 MJP 1 transactional information found in a broker confirmation slip, or such 2 other documentation as is deemed adequate by Lead Counsel; (iii) if the 3 person executing the Proof of Claim is acting in a representative capacity, 4 a certification of his current authority to act on behalf of the Class 5 Member must be included in the Proof of Claim; and (iv) the Proof of 6 Claim must be complete and contain no material deletions or 7 modifications of any of the printed matter contained therein and must be 8 signed under penalty of perjury. 9 (c) As part of the Proof of Claim, each Class Member shall submit to the 10 jurisdiction of the Court with respect to the claim submitted, and shall 11 (subject to effectuation of the settlement) release all Released Claims as 12 provided in the Stipulation. 13 10. All Class Members shall be bound by all determinations and judgments in this 14 Action, whether favorable or unfavorable, except those who are found by the Court to have 15 previously timely and validly requested exclusion from the Class. The persons and entities who 16 request exclusion from the Class will be excluded from the Class and shall have no rights under 17 the Stipulation, shall not be entitled to submit any Proof of Claim forms, shall not share in the 18 distribution of the Net Settlement Fund as described in the Stipulation and in the Notice, and 19 shall not be bound by the Stipulation or the Judgment entered as to Defendants in the Action. 20 11. To request exclusion from the Class, a putative Class Member must send a letter, 21 postmarked no later than June 15, 2012, sent to the Claims Administrator. For a request for 22 exclusion to be valid, the putative Class Member’s request for exclusion must include the Class 23 Member’s name, current address, and day-time and evening telephone numbers; the dates of all 24 such Class Member’s purchases and/or sales of CTI common stock during the Class Period; the 25 number of shares purchased and/or sold on each such date; the prices paid and/or received for all 26 such shares on each such date; and a clear and unambiguous statement that such putative Class ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 6 C10-414 MJP 1 Member wished to be excluded from the Class. No further opportunity to request exclusion will 2 be given in this Action. A Class Member’s failure to comply with the foregoing requirements for 3 requesting exclusion from the Class will result in such request being invalid and ineffective. 4 Lead Plaintiffs shall serve upon Defendants’ counsel and the Court copies of all such requests for 5 exclusion no later than fifteen (15) days before the date of the Settlement Hearing. 6 12. Pending final determination of whether the Stipulation should be approved, Lead 7 Counsel, Liaison Counsel, Lead Plaintiffs, and Class Members are barred and enjoined from 8 commencing or prosecuting any action asserting any Released Claims against any Released 9 Persons. 10 13. Any Class Member may enter an appearance in the Action, individually or, at 11 their own expense, through counsel of their own choice, in which case such counsel must file 12 with the Clerk of the Court and deliver to Lead Counsel and counsel for Defendants a notice of 13 such appearance no later than ninety (90) days after entry of this Order. If they do not enter an 14 appearance, they will be represented by Lead Counsel. 15 14. All papers in support of the request for attorneys’ fees and expenses shall be filed 16 and served no later than sixty (60) days after entry of this Order. All papers in support of the 17 settlement shall be filed and served no later than sixty (60) days after entry of this Order. 18 15. Any Class Member may appear and show cause, if he, she, or it has any, why the 19 proposed settlement with Defendants should not be approved as fair, reasonable, and adequate, 20 why the Plan of Allocation should not be approved as fair and equitable, and/or why Plaintiffs’ 21 Counsel’s application for an award of attorneys’ fees and reimbursement of expenses should not 22 be granted; provided, however, that no Person shall be heard or entitled to contest such matters, 23 unless that Person has delivered by hand or sent by first class mail written objections and copies 24 of all papers and briefs any such Person wishes to submit in support of any such objection 25 delivered or post-marked no later than June 15, 2012, to each of the following: 26 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 7 C10-414 MJP 1 Clerk of the Court Western District of Washington U.S. Courthouse, Lobby Level 700 Stewart Street Seattle, Washington 98101 2 3 4 5 Wilson Sonsini Goodrich & Rosati Barry M. Kaplan 701 Fifth Avenue, Suite 5100 Seattle, Washington 98104 Brower Piven A Professional Corporation David A.P. Brower 488 Madison Avenue New York, NY 10022 6 7 8 9 Attorneys for Defendants Cell Therapeutics, Inc., Dr. James Bianco, Louis Bianco, and Craig Philips Attorney for the CTIC Investor Group and Lead Counsel for the Class 10 11 Any Person who does not make his, her, or its objection in the manner provided in the Notice 12 shall be deemed to have waived such objection and shall forever be foreclosed from making any 13 objection to the fairness or adequacy of the proposed settlement as set forth in the Stipulation, 14 unless otherwise ordered by the Court. Any papers, in response to any such objections, in further 15 support of the above-noted motions shall be served and filed no later than seven (7) days prior to 16 the Settlement Hearing. 17 16. All funds held by the Escrow Agent shall be deemed and considered to be in 18 custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such 19 time as such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the 20 Court. 21 17. All reasonable costs and expenses incurred in identifying and notifying Class 22 Members, as well as administering the Settlement Fund, shall be paid as set forth in the 23 Stipulation. In the event the settlement is not approved by the Court, or otherwise fails to become 24 effective, neither the Lead Plaintiffs nor Lead Counsel nor Liaison Counsel shall have any 25 obligation to repay any amounts reasonably incurred or disbursed pursuant to ¶¶ 2.4, 2.6, or 2.7 26 of the Stipulation for costs and expenses of providing notice and administration of the settlement. ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 8 C10-414 MJP 1 18. The Court reserves the right to adjourn the date of the Settlement Hearing without 2 further notice to Class Members, and retains jurisdiction to consider all further applications 3 arising out of or connected with the proposed settlement. The Court may approve the settlement, 4 with such modifications as may be agreed to by the Lead Plaintiffs and Defendants, if 5 appropriate, without further notice to the Class. 6 IT IS SO ORDERED. 7 Dated: March 16, 2012 8 A 9 10 Marsha J. Pechman United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 10 C10-414 MJP 1 Presented By: 2 David A.P. Brower (admitted pro hac vice) E-mail: brower@browerpiven.com 3 BROWER PIVEN A Professional Corporation 4 488 Madison Avenue New York, NY 10022 5 Tel: (212) 501-9000 6 Fax: (212) 501-0300 Attorney for the CTIC Investor Group 7 and Lead Counsel for the Class 8 Dan Drachler (WSBA #27728) 9 E-mail: ddrachler@zsz.com ZWERLING, SCHACHTER & ZWERLING, LLP 10 1904 Third Avenue, Suite 1030 Seattle, WA 98101-1170 11 Tel: (206) 223-2053 Fax: (206) 343-9636 12 Attorney for the CTIC Investor Group 13 and Liaison Counsel for the Class 14 Douglas J. Clark, admitted pro hac vice WILSON SONSINI GOODRICH & ROSATI Professional Corporation 15 650 Page Mill Road 16 Palo Alto, CA 94304 Telephone: (650) 493-9300 17 Facsimile: (650) 493-6811 Email: dclark@wsgr.com 18 Barry M. Kaplan, WSBA #8661 19 Email: bkaplan@wsgr.com Claire Loebs Davis, WSBA #39812 20 Email: cldavis@wsgr.com 21 WILSON SONSINI GOODRICH & ROSATI Professional Corporation 22 701 Fifth Avenue, Suite 5100 Seattle, WA 98104-7036 23 Telephone: (206) 883-2500 Facsimile: (206) 883-2699 24 25 Attorneys for Defendants Cell Therapeutics, Inc., Dr. James Bianco, 26 Louis Bianco, and Craig Philips ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, GRANTING CONDITIONAL CLASS CERTIFICATION, AND PROVIDING FOR NOTICE 11 C10-414 MJP
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