Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-02571/USCOURTS-caed-2_14-cv-02571-15/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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ORDER AND FINAL JUDGMENT AS TO SETTLING PARTIES

MASTER FILE No. 2:14-cv-2571-MCE-KJN

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LOWENSTEIN SANDLER LLP

390 Lytton Avenue

Fax: 973-597-6233

Counsel for Lead Plaintiffs Special Situations 

Fund III QP, L.P. and Special Situations 

Cayman Fund, L.P. and additional named

Plaintiff David M. Fineman

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SPECIAL SITUATIONS FUND III QP, L.P., 

SPECIAL SITUATIONS CAYMAN FUND, 

L.P, and DAVID M. FINEMAN, Individually 

and On Behalf of All Others Similarly 

Situated,

Plaintiffs,

vs.

MARRONE BIO INNOVATIONS, INC., 

PAMELA G. MARRONE, JAMES B. 

BOYD, DONALD J. GLIDEWELL, 

HECTOR ABSI, ELIN MILLER, RANJEET 

BHATIA, PAMELA CONTAG, TIM 

FOGARTY, LAWRENCE HOUGH, 

JOSEPH HUDSON, LES LYMAN, 

RICHARD ROMINGER, SHAUGN 

STANLEY, SEAN SCHICKEDANZ, and 

ERNST & YOUNG LLP,

Defendants.

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Master No.: 2:14-cv-2571-MCE-KJN

Hon. Morrison C. England, Jr.

CONSOLIDATED CLASS ACTION

ORDER AND

FINAL JUDGMENT AS TO 

SETTLING PARTIES

Palo Alto, CA 94301

Telephone: 213-426-2170

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ORDER AND FINAL JUDGMENT

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WHEREAS, a securities class action is pending in this Court entitled Special Situations 

Fund III QP, L.P. v. Marrone Bio Innovations, Inc., et al., Master No. 14-cv-2571 (the 

“Action”);

WHEREAS, (a) Lead Plaintiffs Special Situations Fund III QP, L.P. and Special 

Situations Cayman Fund, L.P., (“Lead Plaintiffs” or “The Funds”), and additional named 

Plaintiff David M. Fineman (“Fineman” and, together with Lead Plaintiffs, “Plaintiffs”), on 

behalf of themselves and the other members of the Settlement Class, and (b) Defendants 

Marrone Bio Innovations, Inc. (“MBI”), Pamela G. Marrone, James B. Boyd, Donald J. 

Glidewell, Hector Absi, Elin Miller, Tim Fogarty, Richard Rominger, Shaugn Stanley, Ranjeet 

Bhatia, Lawrence Hough, Joseph Hudson, Sean Schickedanz, Pamela Contag, and Les Lyman 

(collectively, the “Individual Defendants” or with MBI the “Settling Defendants,” and together 

with Plaintiffs, the “Settling Parties”), have determined to partially settle claims asserted in the 

Action with prejudice on the terms and conditions set forth in the Stipulation and Agreement of 

Settlement with Individual Defendants dated June 16, 2016 (the “Stipulation), subject to the 

approval of the Court (the “Settlement”);

WHEREAS, unless otherwise defined in this Judgment, the capitalized terms herein 

shall have the same meaning as they have in the Stipulation;

WHEREAS, by Order dated July 7, 2016 (the “Preliminary Approval Order”), this 

Court: (a) preliminarily approved the Settlement; (b) certified the Settlement Class solely for 

purposes of effectuating the Settlement; (c) ordered that notice of the proposed Settlement be 

provided to potential Settlement Class Members; (d) provided Settlement Class Members with 

the opportunity either to exclude themselves from the Settlement Class or to object to the 

proposed Settlement; and (e) scheduled a hearing regarding final approval of the Settlement; 

WHEREAS, due and adequate notice has been given to the Settlement Class; 

WHEREAS, the Court has now considered among other things, (a) whether the terms 

and conditions of the Settlement are fair, reasonable and adequate to the Settlement Class, and 

should therefore be approved; and (b) whether a judgment should be entered dismissing the 

Action with prejudice; and 

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WHEREAS, the Court having reviewed and considered the Stipulation, all papers filed 

and proceedings held herein in connection with the Settlement, all oral and written comments 

received regarding the Settlement, and the record in the Action, and good cause appearing 

therefor;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1. Jurisdiction – The Court has jurisdiction over the subject matter of the Action 

and all matters relating to the Settlement, as well as personal jurisdiction over Plaintiffs, the 

Defendants, and each of the Settlement Class Members.

2. Incorporation of Settlement Documents – This Judgment incorporates and 

makes a part hereof: (a) the Stipulation filed with the Court on June 16, 2016; and (b) the 

Notice and the Summary Notice, both of which were filed with the Court on July 7, 2016.

3. Class Certification for Settlement Purposes – The Court hereby affirms its 

determinations in the Preliminary Approval Order certifying, for Settlement purposes only, the 

Action as a class action pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil 

Procedure on behalf of a Settlement Class consisting of all persons and entities who or which (i) 

purchased or otherwise acquired MBI securities directly in or traceable to the Company’s 

August 1, 2013 initial public offering pursuant to MBI’s Form S-1 Registration Statement, 

dated July 1, 2013, and its Prospectus, dated August 1, 2013, and were damaged thereby; (ii) 

purchased or otherwise acquired MBI securities directly in or traceable to the Company’s 

secondary offering pursuant to MBI’s Form S-1 Registration Statement, dated May 16, 2014, 

and its Prospectus dated June 5, 2014, and were damaged thereby; and (iii) purchased or 

otherwise acquired MBI securities on the open market between August 1, 2013 and November 

10, 2015, inclusive, and were damaged thereby. Excluded from the Settlement Class are 

Defendants; members of the Immediate Family of each of the Individual Defendants; the 

Officers and/or directors of MBI during the Settlement Class Period; and any firm, trust, 

corporation, or other entity in which any Defendant has or had a controlling interest. 

Certification of a class for purposes of Settlement shall have no effect on the Non-Settling 

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Defendant’s ability to challenge the certification of a class on any grounds including, but not 

limited to, adequacy and typicality, on the merits in this case.

4. Adequacy of Representation – Pursuant to Rule 23 of the Federal Rules of 

Civil Procedure, and for Settlement purposes only, the Court hereby affirms its determinations 

in the Preliminary Approval Order certifying Plaintiffs as the Class Representative for the 

Settlement Class and appointing Lead Counsel as Class Counsel for the Settlement Class. 

Plaintiffs and Lead Counsel have fairly and adequately represented the Settlement Class both in 

terms of litigating the Action and for purposes of entering into and implementing the Settlement

and have satisfied the requirements of Federal Rules of Civil Procedure 23(a)(4) and 23(g), 

respectively.

5. Notice – The Court finds that the dissemination of the Notice and the publication 

of the Summary Notice: (a) were implemented in accordance with the Preliminary Approval 

Order; (b) constituted the best notice practicable under the circumstances; (c) constituted notice 

that was reasonably calculated, under the circumstances, to apprise Settlement Class Members 

of (i) the pendency of the Action; (ii) the effect of the proposed Settlement (including the 

Releases to be provided thereunder); (iii) Lead Counsel’s motion for an award of attorneys’ fees 

and reimbursement of Litigation Expenses; (iv) their right to object to any aspect of the 

Settlement, the Plan of Allocation and/or Lead Counsel’s motion for attorneys’ fees and 

reimbursement of Litigation Expenses; (v) their right to exclude themselves from the Settlement 

Class; and (vi) their right to appear at the Settlement Hearing; (d) constituted due, adequate, and 

sufficient notice to all persons and entities entitled to receive notice of the proposed Settlement; 

and (e) satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure, the United 

States Constitution (including the Due Process Clause), the Private Securities Litigation Reform 

Act of 1995, 15 U.S.C. § 78u-4, et seq., as amended, and all other applicable law and rules.

6. MBI has filed a Declaration Regarding Compliance with the Class Action 

Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1715. MBI timely mailed notice of the Stipulation 

pursuant to 28 U.S.C. § 1715(b), including notices to the Attorney General of the United States 

of America, and the Attorneys General of all states in which members of the Settlement Class 

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reside. The notice contains the documents and information required by 28 U.S.C. § 1715(b)(1)-

(8). The Court finds that MBI has complied in all respects with the requirements of 28 U.S.C. 

§ 1715.

7. Final Approval and Dismissal of Claims – Pursuant to, and in accordance with, 

Rule 23 of the Federal Rules of Civil Procedure, this Court hereby fully and finally approves the 

Settlement set forth in the Stipulation in all respects (including, without limitation: the amount 

of the Settlement; the Releases provided for therein; and the dismissal with prejudice of the 

claims provided for herein), and finds that the Settlement is, in all respects, fair, reasonable and 

adequate to the Settlement Class. The Settling Parties are directed to implement, perform and 

consummate the Settlement in accordance with the terms and provisions contained in the 

Stipulation.

8. All of the claims asserted in the Action by Plaintiffs and the other Settlement 

Class Members against the Settling Defendants are hereby dismissed with prejudice. The 

Settling Parties shall bear their own costs and expenses, except as otherwise expressly provided

in the Stipulation.

9. Binding Effect – The terms of the Stipulation and of this Judgment shall be 

forever binding on the Settling Defendants, MBI, Plaintiffs and all other Settlement Class

Members (regardless of whether or not any individual Settlement Class Member submits a 

Claim Form or seeks or obtains a distribution from the Net Settlement Fund), as well as their 

respective successors and assigns.

10. Releases – The Releases set forth in paragraphs 5 and 6 of the Stipulation, 

together with the definitions contained in paragraph 1 of the Stipulation relating thereto, are 

expressly incorporated herein in all respects. The Releases are effective as of the Effective 

Date. Accordingly, this Court orders that:

(a) Without further action by anyone, and subject to paragraph 11 below, 

upon the Effective Date of the Settlement, Plaintiffs and each of the other Settlement Class 

Members, on behalf of themselves and their respective heirs, executors, administrators, 

predecessors, successors, and assigns, in their capacities as such, shall be deemed to have, and 

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by operation of law and of this Judgment shall have, fully, finally and forever compromised, 

settled, released, resolved, relinquished, waived and discharged each and every Released 

Plaintiffs’ Claim against the Defendants and the other Defendants’ Releasees, and shall forever 

be barred and enjoined from commencing, instituting, asserting, maintaining, enforcing, 

prosecuting, or otherwise pursuing, either directly or in any other capacity, any or all of the 

Released Plaintiffs’ Claims against any of the Defendants’ Releasees (including, without 

limitation, Unknown Claims), as well as any claims arising out of, relating to, or in connection 

with, the defense, the settlement, or the resolution of the Action, or the Released Claims, and 

the distribution or investment of the Settlement Fund, whether or not such Settlement Class 

member executes and delivers the Proof of Claim and Release and whether or not such 

Settlement Class Member shares in the Settlement Fund. This Release shall not apply to any of 

the Excluded Claims (as that term is defined in paragraph 1(q) of the Stipulation). 

(b) Without further action by anyone, and subject to paragraph 11 below, 

upon the Effective Date of the Settlement, Defendants, on behalf of themselves and their 

respective heirs, executors, administrators, predecessors, successors, and assigns, in their 

capacities as such, shall be deemed to have, and by operation of law and of this Judgment shall 

have, fully, finally and forever compromised, settled, released, resolved, relinquished, waived 

and discharged each and every Released Defendants’ Claim against Plaintiffs and the other 

Plaintiffs’ Releasees (including, without limitation, Unknown Claims), and shall forever be 

barred and enjoined from commencing, instituting, asserting, maintaining, enforcing, 

prosecuting, or otherwise pursuing, either directly or in any other capacity, any or all of the 

Released Defendants’ Claims against any of the Plaintiffs’ Releasees.

11. Notwithstanding paragraphs 10(a) – (b) above, nothing in this Judgment shall bar 

any action by any of the Settling Parties or MBI to enforce or effectuate the terms of the 

Stipulation or this Judgment.

12. All Persons, including, but not limited to, Plaintiffs, on behalf of themselves and 

the Settlement Class, and the Non-Settling Defendant, shall be enjoined and barred from 

commencing or continuing any claim, cross-claim, third-party claim, claim over, or action in 

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any forum against the Defendants’ Releasees, seeking, as damages, indemnity, contribution, or 

otherwise, the recovery of all or part of any liability or settlement which such persons (i) paid, 

(ii) were obligated to pay or agreed to pay, or (iii) may become obligated to pay to the 

Settlement Class, as a result of such persons’ liability for or participation in any acts, facts, 

statements or omissions that were or could have been alleged in the Action. The Defendants’ 

Releasees shall thus be released and discharged from all claims for indemnity or contribution or 

any other claim, however denominated, against the Defendants’ Releasees that have been or 

may hereafter be brought by any Person, whether arising under state, federal, foreign or 

common law as claims, cross-claims, counterclaims, or third-party claims, in any state, federal, 

or foreign court, arbitration proceeding, administrative agency, or other forum in the United 

States or elsewhere, based upon, arising out of, relating to, or in connection with the Released 

Claims, and all such claims are permanently barred, and any Person seeking to bring such 

claims is permanently enjoined from doing so. In addition, the Settling Defendants and 

Defendants’ Releasees shall be enjoined and barred from commencing or continuing any claim, 

cross-claim, third-party claim, claim over, or action in any forum against the Non-Settling 

Defendant, including its current and former officers, partners, principals, directors, agents, 

parents, affiliates, other member firms, subsidiaries, successors, predecessors, assigns, 

assignees, employees, Immediate Family, insurers and reinsurers, and attorneys, in their 

capacities as such, seeking, as damages, indemnity, contribution, or otherwise, the recovery of 

all or part of any liability or settlement which the Settling Defendants or Defendants’ Releasees 

(i) paid, (ii) were obligated to pay or agreed to pay, or (iii) may become obligated to pay to the 

Settlement Class, as a result of liability for or participation in any acts, facts, statements or 

omissions that were or could have been alleged in the Action.

13. Accordingly, as provided by Section 21D(f)(7)(A) of the Private Securities 

Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. §78u-4(f)(7)(A), and other applicable 

law, the Court hereby bars all claims by and against the Released Persons as provided herein 

and in the Settlement Agreement.

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14. Any final verdict or judgment obtained by or on behalf of Plaintiffs or the 

Settlement Class against any Person, other than the Released Persons, relating to the Released 

Claims, shall be reduced by the greater of (i) an amount that corresponds to the percentage of 

responsibility of the Released Persons, or (ii) the amount paid by or on behalf of the Released 

Persons in the Settlement (the “Judgment Reduction”). For purposes of calculating the 

Judgment Reduction only, the allocation of the settlement amount between the Section 11 and 

Section 10(b) claims set forth in the Settlement shall not preclude the Non-Settling Defendant 

from arguing for a larger reduction with respect to the Section 11 claims than would be 

provided by the allocation in the Settlement for purposes of the credit provided by Paragraph 

14(ii) herein. If the Non-Settling Defendant argues for a larger reduction with respect to the 

Section 11 claims than would be provided by the allocation in the Settlement for purposes of the 

credit provided by Paragraph 14(ii), Plaintiffs reserve all rights to argue that the credit provided 

by Paragraph 14(ii) is binding on the Non-Settling Defendant and Plaintiffs shall not be 

precluded from challenging the amount of the Paragraph 14(ii) credit that may be sought by the 

Non-Settling Defendant.

15. Rule 11 Findings – The Court finds and concludes that Plaintiffs and the 

Defendants and their respective counsel have complied in all respects with the requirements of 

Rule 11 of the Federal Rules of Civil Procedure in connection with institution, prosecution, 

defense and/or settlement of this Action. 

16. No Admissions – Neither this Judgment, the Term Sheet, the Stipulation 

(whether or not consummated), including the exhibits thereto and the Plan of Allocation 

contained therein (or any other plan of allocation that may be approved by the Court), the 

negotiations leading to the execution of the Term Sheet and the Stipulation, nor any proceedings 

taken pursuant to or in connection with the Term Sheet, the Stipulation and/or approval of the 

Settlement (including any arguments proffered in connection therewith):

(a) shall be offered against any of the Defendants’ Releasees as evidence of, 

or construed as, or deemed to be evidence of any presumption, concession, or admission by any 

of the Defendants’ Releasees with respect to the truth of any fact alleged by Plaintiffs or the 

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validity of any claim that was or could have been asserted or the deficiency of any defense that 

has been or could have been asserted in this Action or in any other litigation, or of any liability, 

negligence, fault, or other wrongdoing of any kind of any of the Defendants’ Releasees or in 

any way referred to for any other reason as against any of the Defendants’ Releasees, in any 

civil, criminal or administrative action or proceeding, other than such proceedings as may be 

necessary to effectuate the provisions of the Stipulation or this Judgment;

(b) shall be offered against any of the Plaintiffs’ Releasees as evidence of, or 

construed as, or deemed to be evidence of any presumption, concession or admission by any of 

the Plaintiffs’ Releasees that any of their claims are without merit, that any of the Defendants’ 

Releasees had meritorious defenses, or that damages recoverable under the Complaint would 

not have exceeded the Settlement Amount or with respect to any liability, negligence, fault or 

wrongdoing of any kind, or in any way referred to for any other reason as against any of the 

Plaintiffs’ Releasees, in any civil, criminal or administrative action or proceeding, other than 

such proceedings as may be necessary to effectuate the provisions of the Stipulation or this 

Judgment;

(c) shall be offered or construed as evidence that a class should or should not 

be certified in the Action if the Settlement is not consummated; or 

(d) shall be construed against any of the Releasees as an admission, 

concession, or presumption that the consideration to be given under the Stipulation represents 

the amount that could be or would have been recovered after trial;

provided, however, that the Settling Parties and the Releasees and their respective counsel may 

refer to this Judgment and the Stipulation to effectuate the protections from liability granted 

hereunder and thereunder or otherwise to enforce the terms of the Settlement.

17. Retention of Jurisdiction – Without affecting the finality of this Judgment in 

any way, this Court retains continuing and exclusive jurisdiction over: (a) Plaintiffs and the 

Settling Defendants for purposes of the administration, interpretation, implementation and 

enforcement of the Settlement; (b) the disposition of the Settlement Fund; (c) any motion for an 

award of attorneys’ fees and/or Litigation Expenses by Lead Counsel in the Action that will be 

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paid from the Settlement Fund; (d) any motion to approve the Plan of Allocation; (e) any 

motion to approve the Class Distribution Order; and (f) the Settlement Class Members for all 

matters relating to the Action.

18. Separate orders shall be entered regarding approval of a plan of allocation and 

the motion of Lead Counsel for an award of attorneys’ fees and reimbursement of Litigation 

Expenses. Such orders shall in no way affect or delay the finality of this Judgment and shall not 

affect or delay the Effective Date of the Settlement.

19. Modification of the Agreement of Settlement – Without further approval from 

the Court, the parties to the Stipulation are hereby authorized to agree to and adopt such 

amendments or modifications of the Stipulation or any exhibits attached thereto to effectuate the 

Settlement that: (a) are not materially inconsistent with this Judgment; and (b) do not materially 

limit the rights of Settlement Class Members in connection with the Settlement. Without 

further order of the Court, the parties to the Stipulation may agree to reasonable extensions of 

time to carry out any provisions of the Settlement.

20. Termination of Settlement – If the Settlement is terminated as provided in the 

Stipulation or the Effective Date of the Settlement otherwise fails to occur, this Judgment shall 

be vacated, rendered null and void and be of no further force and effect, except as otherwise 

provided by the Stipulation, and this Judgment shall be without prejudice to the rights of 

Plaintiffs, the other Settlement Class Members, the Settling Defendants, and the Settling Parties

shall revert to their respective litigation positions in the Action as of immediately prior to April 

4, 2016, as provided in the Stipulation. 

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21. Entry of Final Judgment – The Court directs immediate entry of this Final 

Judgment as to the Settling Parties by the Clerk of the Court.

IT IS SO ORDERED. 

Dated: September 23, 2016

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