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Campbell v. Transgenomic, Inc.

United States District Court, D. Nebraska

July 10, 2019

JESSE CAMPBELL, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,
v.
TRANSGENOMIC, INC., et al., Defendants.

          MEMORANDUM AND ORDER CERTIFYING SETTLEMENT CLASS, PRELIMINARILY APPROVING CLASS-ACTION SETTLEMENT, AND APPROVING FORM AND MANNER OF NOTICE

          JOHN M. GERRARD CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the parties' Joint Stipulation Regarding Settlement Order (filing 60) and Lead Plaintiff's Unopposed Motion for Preliminary Approval of the Settlement, Certification of the Settlement Class, and Approval of the Notice to the Class (filing 61), asking the Court for an order pursuant to Fed.R.Civ.P. 23(b) and (e) that certifies a settlement class, preliminarily approves a settlement, and approves forms and a program for class notice. The Court will grant the motion.

         Rule 23(a) states four threshold requirements applicable to all class actions: (1) numerosity (a class so large that joinder of all members is impracticable); (2) commonality (questions of law or fact common to the class); (3) typicality (named parties' claims or defenses are typical of the class); and (4) adequacy of representation (representatives will fairly and adequately protect the interests of the class). Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 613 (1997). Those requirements are met in this case.

         The numerosity requirement is met because the plaintiffs represent, and the defendants agree, that although the exact size of the class is not yet known, there were hundreds, if not thousands, of people who bought, sold, or held shares of Transgenomic common stock during the relevant time period. Filing 62 at 22; see also Ray v. TierOne Corp., No. 4:10-CV-3177, 2012 WL 2866577, at *4 (D. Neb. July 12, 2012). Commonality is satisfied because the legal and factual issues surrounding the defendants' course of conduct arise out of the same Proxy and the Supplemental Disclosures regarding the Merger sent to class members. See filing 62 at 23. Typicality is present for the same reason: typicality means that there are other members of the class who have the same or similar grievances as the plaintiff. Paxton v. Union Nat. Bank, 688 F.2d 552, 562 (8th Cir. 1982). And adequacy of representation is present because there's no conflict of interest between the named parties and the classes they seek to represent-they possess the same interest and injury as the class members. See Amchem, 521 U.S. at 625-26.

         If the requirements of Rule 23(a) have been met, a class action may be maintained in the circumstances defined by Rule 23(b)(1), (2), or (3). Here, certification under Rule 23(b)(3) is appropriate, because "the questions of law or fact common to class members predominate over any questions affecting only individual members" and "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Id.

         The predominance inquiry is satisfied because the "proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem, 521 U.S. at 623. The class members received the same Proxy and the Supplemental Disclosures regarding the Merger during the same timeframe. See15 U.S.C. § 1692k(a); Neb. Rev. Stat. § 59-1609. Predominance is "a test readily met" in cases involving alleged consumer or securities fraud, see Amchem, 521 U.S. at 625, and this is such a case. And a class action will "achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Id. at 615 (cleaned up).

         Finally, with respect to notice, the Court finds that the form, content, and method of disseminating notice to the class members, including the published notice and individual notices to identified class members, were adequate and reasonable and constituted the best notice practicable under the circumstances, satisfying Rule 23(c)(2)(B). By virtue of the fact that an action maintained as a class suit under Rule 23 has res judicata effect on all members of the class, due process requires that notice of a proposed settlement be given to the class. Grunin v. Int'l House of Pancakes, 513 F.2d 114, 120 (8th Cir. 1975). The notice given must be reasonably calculated, under all of the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Id. In addition, the notice must reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance. Id. The contents must fairly apprise the prospective members of the class of the terms of the proposed settlement and of the options that are open to them in connection with the proceedings. Id. at 122.

         The notice given in this case meets those requirements; it informs the class members of the action and their options, accurately characterized all the pertinent terms of the settlement agreement (including attorney fees and expenses), and affords the class members a reasonable opportunity to object. The notice will be sent directly to shareholders who purchased, sold, or held shares of Transgenomic stock during the relevant time period and notice by publication will also be provided identifying a website where further information can be obtained. See filing 60-1 at 1-10. In short, the notice satisfies the requirements of Rule 23 and due process.

         IT IS ORDERED:

         1. The parties' Joint Stipulation Regarding Settlement Order (filing 60) is approved.

         2. Lead Plaintiff's Unopposed Motion for Preliminary Approval of the Settlement, Certification of the Settlement Class, and Approval of the Notice to the Class (filing 61) is granted.

         3. The agreements, terms, and conditions of the Stipulation of Settlement are preliminarily approved pending a Fairness Hearing.

         4. For settlement purposes only, this action may be maintained as a class action on behalf of all those who purchased, sold or held Transgenomic common stock during the period from and including April 12, 2017, the record date for Transgenomic's special stockholder meeting regarding the merger between Transgenomic and Precipio Diagnostics, LLC through and including June 30, 2017, the date the merger closed.

         5. Excluded from the classes are:

(a) The defendants;
(b) Members of the immediate families of each defendant;
(c) Transgenomic's subsidiaries and affiliates;
(d) Any entity in which any defendant has a controlling interest;
(e) The legal representatives, heirs, successors, administrators, executors, and assigns of each defendant; and
(f) Any class member who timely and validly requests exclusion.

         6. If the settlement fails to become effective as defined in the Stipulation of Settlement or is terminated, then, in any such event, the Stipulation, including any amendment (except as expressly provided in the Stipulation), and this order shall be null and void, and without prejudice to any settling party, and may not be introduced as evidence or used in any actions or proceedings by any person or entity against the settling ...


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