Case No. 17-CV-00373 (LHK) 

DEFENDANTS’ MEMORANDUM ISO PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT

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JORDAN ETH (CA SBN 121617)

JEth@mofo.com 

JUDSON E. LOBDELL (CA SBN 146041) 

JLobdell@mofo.com 

MORRISON & FOERSTER LLP 

425 Market Street 

San Francisco, California 94105-2482 

Telephone: 415.268.7000 

Facsimile: 415.268.7522 

Attorneys for Defendants 

ALTABA INC. (F.K.A. YAHOO! INC.) and MARISSA 

MAYER 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

IN RE YAHOO! INC. SECURITIES 

LITIGATION 

THIS DOCUMENT RELATES TO: ALL 

ACTIONS 

Case No. 17-CV-00373 (LHK) 

DEFENDANTS ALTABA INC. AND 

MARISSA MAYER’S 

MEMORANDUM IN SUPPORT OF 

PLAINTIFFS’ MOTION FOR 

PRELIMINARY APPROVAL OF 

SETTLEMENT 

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Case No. 17-CV-00373 (LHK) 

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INTRODUCTION 

On May 3, 2018, the Court held a hearing on Plaintiffs’ Motion for Preliminary Approval 

of Settlement (ECF No. 73) of this securities class action. During the hearing, the Court 

requested that Defendants provide authorities supporting two aspects of the scope of the release 

of “Settlement Class Claims” in the parties’ Stipulation and Agreement of Settlement 

(“Stipulation”) (ECF No. 74) and raised one procedural question. This memorandum addresses 

the Court’s requests. 

DISCUSSION 

I. THE SCOPE OF THE STIPULATION’S RELEASE PROVISION IS 

CONSISTENT WITH THE PRACTICE OF COURTS IN THE NORTHERN 

DISTRICT. 

The Stipulation releases “Defendants Altaba, Marissa Mayer, Ronald Bell, and Alexander 

Stamos” from all claims “(i) that arise out of, are based upon, or are related in any way directly or 

indirectly, in whole or in part, to the allegations, transactions, facts, matters, occurrences, 

representations, or omissions referred to in the Amended Complaint and that relate to the 

purchase, sale, acquisition, or retention of Yahoo securities during the Settlement Class Period[.]” 

(Stipulation (“Stip.”) at ¶ 1(f), 5:14-15, Mar. 2, 2018, ECF No. 74; ¶ 1 (y), 8:4-18; ¶ 1(hh), 9:24-

27.) 

At the hearing, the Court discussed provision and raised the following concern: 

anything that arises out of or based upon or . . . related in any way 

to transactions referred to in the Amended Complaint, and that 

relate to the purchase of a security during the . . . class period. 

[ . . . ] I feel like it’s broader than what the Ninth Circuit law 

allows, because it’s not the identical factual predicate if you’re 

saying, well, any claim related to a transaction that’s referred to in 

the amended complaint and that relates to the purchase of a Yahoo! 

security during this time period, all those claims are now released. 

[. . . ] 

There could be some other misrepresentation related to one of 

these 10-Q’s or 10-K’s and then you’re releasing those securities 

claims even though it may have nothing to do with data breach or 

Yahoo! data security. 

(Stip. at 9:19-27; Transcript of May 3, 2018 Oral Argument (“Hrg. Tr.”) at 43:14-44:5, 45:24-

46:3, In re Yahoo!, Inc. Sec. Litig., No. 5:17-CV-00373.) The Court requested Ninth Circuit 

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authority and “other trial court cases” demonstrating that the language of the release provision is 

consistent with practice in securities class action settlements. (Hrg. Tr. at 64:11.) 

 As described below, the inclusion of terms like “related to” and “transaction,” among 

others, in releases of securities class action claims is consistent with Ninth Circuit authority and 

has been approved more than two dozen times by twelve different courts in the Northern District 

in just the last decade. 

A. Ninth Circuit Precedent 

The Ninth Circuit has affirmed district court orders that approved broadly worded releases 

in class action settlements, and it has used the terms “transaction” and “identical factual 

predicate” interchangeably in defining the permissible scope of a release. For example, in Reyn’s 

Pasta Bella, LLD v. Visa USA, Inc., the Ninth Circuit affirmed the district court’s dismissal of 

antitrust claims brought by would-be class representatives, noting that their claims “arose out of 

the same transaction as the claims in the [prior] class action,” which the court referred to as an 

“identical factual predicate” as the prior class action.1

 442 F.3d 741, 747 (9th Cir. 2006); see also 

Howard v. AOL Inc., 208 F.3d 741, 747 (9th Cir. 2000) (affirming dismissal of claims based on 

class action settlement that released “any claims, rights, . . . of any nature, known or unknown, . . 

. which are alleged in the Amended Complaint, or which could or might have been alleged in the 

Amended Complaint and arise out of or are related to the matters referred to in the Amended 

Complaint”). 

In any event, consistent with principles of res judicata as applied to class actions, the 

release, regardless of its language, will bar only claims based on an “identical factual predicate as 

th[e] underlying . . . claims in the settled class action.” See Hesse v. Sprint Corp., 598 F.3d 581, 

590 (9th Cir. 2010). 

 

1

 The underlying release in Reyn’s Pasta Bella encompassed claims “relating in any way to . . . 

any claims alleged in the Complaint or any of the complaints consolidated therein, including, 

without limitation, claims which have been asserted or could have been asserted in this litigation 

which arise under or relate to any federal or state antitrust, unfair competition, unfair practices, or 

other law or regulation, or common law, including, without limitation, the Sherman Act.” In re 

Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503, 512 (E.D.N.Y. 2003) (emphasis 

omitted), aff’d sub nom., Wal-Mart Stores, Inc. v. Visa USA, Inc., 396 F.3d 96 (2d Cir. 2005). 

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B. Northern District Precedent 

The release’s language referring to “transactions,” “relating to,” and “matters” is also 

consistent with Northern District of California precedent approving class action settlements. 

In just the past decade, eight judges in this district (Chief Judge Hamilton and Judges 

Breyer, Chen, Corley, Gonzalez Rodgers, Illston, Orrick, and Seeborg) in fourteen securities class 

cases have approved releases containing materially identical, if not verbatim, language to the 

release at issue here.2 See, e.g., Shankar v. Imperva, Inc., No. 14-cv-01680-PJH; In re Geron 

Corp. Sec. Litig., No. 14-cv-01224-CRB; In re Leapfrog Enterprises, Inc. Sec. Litig., No. 15-cv00347-EMC; In re Zynga Inc. Sec. Litig., No. 12-cv-04007-JSC; Nathanson v. Polycom, Inc., No. 

13-cv-03476-YGR; Robb v. Fitbit Inc., No. 16-cv-00151-SI; Carter v. Affymax, Inc., No. 13-cv01025-WHO; In re OCZ Technology Grp. Inc., Sec. Litig., No. 12-cv-05265-RS; see also

Declaration of Diana M. Maltzer in Support of Defendants’ Memorandum (“Maltzer Decl.”), Exs. 

2, 4, 6, 10, 12, 14, 16, 20, 22, 24, 26, 32, 34, 38, 44. 

The Northern District has also approved eleven more securities class action settlements 

with “transaction(s)” in the releases. Of these, ten include “matter(s)” in the releases, and nine 

include “relat(ing/ed) to.” See, e.g., In re Ubiquiti Networks, Inc. Sec. Litig., No. 12-cv-04677-

YGR; In re Rocket Fuel Inc. Sec. Litig., No. 14-cv-03998-PJH; Monachelli v. Hortonworks, Inc., 

No. 16-cv-00980-SI; In re Energy Recovery, Inc., Sec. Litig., No. 15-cv-00265-EMC; In re 

Dynavax Tech. Corp. Sec. Litig., No. 13-cv-02796-CRB; In re Zynga Inc. Sec. Litig., No. 12-cv04007-JSC; Bruce v. Suntech Power Holdings Co. Ltd., No. 12-cv-04061-RS; In re HP Sec. 

Litig., No. 12-cv-05980-CRB; Booth v. Strategic Realty Trust, Inc., No. 13-cv-04921-JST; In re 

Ecotality, Inc. Sec. Litig., No. 13-cv-03791-SC; In re Omnivision Technologies, Inc. Sec. Litig., 

No. 11-cv-05235-RMW; Westley v. Oclaro, Inc., No. 11-cv-02448-EMC; In re Finisar Corp. 

Derivative Litig., No. 06-cv-07660-RMW; In re Sunpower Sec. Litig., No. 09-cv-05473-RS; In re 

Wells Fargo Mortgage-Backed Certificates Litig., No. 09-cv-01376-LHK; In re Marvell 

 

2

 For the convenience of the Court, Exhibit 1 to the concurrently filed Declaration of Diana M. 

Maltzer in support of this memorandum is a chart that cites to relevant sections for each of these 

cases as well as the other stipulations and orders discussed herein. 

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Technology Grp. Ltd. Derivative Litig., No. 06-cv-03894-RMW; In re Integrated Silicon 

Solution, Inc. Shareholder Derivative Litig., No. 06-cv-04387-RMW; In re Foundry Networks, 

Inc. Derivative Litig., No. 06-cv-05598-RMW; Maltzer Decl., ¶ 2, Exs. 8, 10, 12, 14, 20, 24, 26, 

28, 30, 34, 36, 40, 42, 44, 48, 50, 52, 54.3 

C. This Court’s Precedent 

This Court has also approved class action settlement agreements with releases containing 

both “relating to” and “transactions.” In In re Wells Fargo Mortgage-Backed Certificates 

Litigation, No. 09-CV-1376-LHK (PSG), this Court granted preliminary approval of a class 

action settlement of claims asserted under the Securities Act of 1933, 15 U.S.C. § 77a et seq., that 

released “any and all claims and causes of action of every nature and description . . . that were 

asserted, could have been asserted, or that arise out of the same transactions or occurrences as the 

claims that were asserted, in the Action.” Stipulation, July 6, 2011, ECF No. 440 at 10:6-10 (Ex. 

48); Order, November 14, 2011, ECF No. 473 (Ex. 49). Likewise, this Court approved 

“relat(ing/ed) to” language in Nitsch v. Dreamworks Animation SKG Inc., et al., No. 14-cv04062-LHK, and in Rafton v. Rydex Series Funds, et al., No. 5:10-cv-01171-LHK. See 

Stipulation at 16, § V.A.1., Dreamworks, Jan. 31, 2017, ECF No. 359-1 at § V.A.1, Ex. 18; 

Stipulation at 5:26, Rydex, July 28 2011, ECF No. 97 at ¶ 1(x), Ex. 46. 

II. THE RELEASE OF ALL CLAIMS RELATED TO THE ADMINISTRATION OF 

THE SETTLEMENT IS CONSISTENT WITH THE PRACTICE OF COURTS IN 

THE NORTHERN DISTRICT. 

The Stipulation also provides for the release of all claims “that are related to the 

administration of the settlement.” (Stip. at 9:27-10:1; see also id. at 16:4-7 (“The Released 

Defendant Persons shall have no further or other liability or obligations to Plaintiffs, Lead 

Counsel, or any Settlement Class Member with respect to the Settlement Class Claims, except as 

expressly stated herein.”); id. at 19:22-20:2 (Defendants have no involvement in or responsibility 

for the administration of the settlement beyond Altaba’s cooperation in identifying Settlement 

 

3

 For the Court’s convenience, the release for each of these cases is set forth in the Appendix to 

Defendants’ Memorandum in Support of Plaintiffs’ Motion for Preliminary Approval of 

Settlement. 

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Class Members)). At the hearing, the Court requested “authority to allow the release of claims 

related to the administration of the settlement.” (Hrg. Tr. at 46:18-20.) 

The scope of the Stipulation’s release for administration of the settlement is consistent 

with the practice of Northern District courts, including this Court. In Dreamworks, this Court 

approved a settlement that included the provision that 

[t]he Settling Parties, their counsel, and any Released Party shall have no 

liability, obligation or responsibility with respect to the investment, 

disbursement, or other administration or oversight of the Settlement Fund 

or QSF and shall have no liability, obligation or responsibility with respect 

to any liability, obligation or responsibility of the Claims Administrator, 

Settlement Fund, or QSF. 

(Ex. 18 at 11, ¶ 3, Ex. 19). This Court approved similar language in Wells Fargo: “Except as 

otherwise expressly provided herein, the Released Parties shall have no responsibility whatsoever 

for the administration of the Settlement, and shall have no liability whatsoever to any person, 

including, but not limited to, the Class Members, in connection with any such administration.” 

(Stipulation at 16:15-18, July 6, 2011, ECF No. 440 (Ex. 48).) In addition, courts in the Northern 

District have approved a similar release in twenty of the twenty-five cases cited above, including 

each of the fourteen cases with near-identical or identical releases. (See Exs. 1, 2, 4, 6, 8, 10, 12, 

14, 16, 20, 22, 24, 26, 28, 30, 32, 34, 36, 38, 40, 44.) 

A release for administration of the settlement is logical because Defendants have no 

responsibility for the distribution of the settlement proceeds to class members. Altaba’s sole 

obligation is to provide its shareholder transfer records, beyond which it and the individual 

defendants have no “involvement in, responsibility for, or liability or obligation whatsoever with 

respect to the selection of the Settlement Administrator, the Plan of Allocation, the administration 

of the Settlement, the management, disposition, investment, distribution, allocation, or 

disbursement of the Settlement Fund . . . .” (Stip. at ¶¶ 26-27, 19:18-20:12.) 

III. THE STIPULATION ALLOWS FOR ALTERATIONS TO THE NOTICE, 

SUMMARY NOTICE, CLAIMS FORMS, AND PLAN OF ALLOCATION 

WITHOUT ADDITIONAL APPROVALS. 

At the hearing, the Court inquired whether “making these changes [requested of Plaintiffs’ 

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counsel by the Court] on these three forms would not at all affect – there’s no need to get 

additional signatures or approvals? Is that right?” and whether there is “a specific paragraph in 

the settlement agreement that would help?” (Hrg. Tr. at 50:24-51:11.) 

The Stipulation sets forth mechanisms that allow the attachments to the Stipulation to be 

modified without additional approvals so long as those modifications are consistent with the 

material terms of the Stipulation. (See Stip. ¶ 66, 32:1-10 (“[I]t shall not be a basis to terminate 

the Settlement if the Court modifies any proposed Plan of Allocation or criteria for allocation of 

the Net Settlement Fund amongst Settlement Class Members, or the Plan of Allocation is 

modified on appeal . . . [or] if the Court disapproves of or modifies the terms of this Stipulation 

with respect to the distribution of the Settlement Fund . . . [or] if the Court denies, in whole or in 

part, Lead Counsel’s application for attorneys’ fees and expenses or Plaintiffs’ application for an 

award” for class representation)). 

In addition, the Stipulation authorizes Lead Counsel “to take all appropriate action 

required or permitted to be taken by the Settlement Class pursuant to this Stipulation to effectuate 

its terms and . . . to enter into any modifications or amendments to this Stipulation on behalf of 

the Settlement Class which Lead Counsel deems appropriate.” (Stip. ¶ 67, 32:11-15.) 

Accordingly, alterations to the notice, summary notice, and claims forms that were discussed at 

the May 3, 2018 preliminary settlement approval hearing would not require additional approvals. 

Defendants Altaba and Ms. Mayer have no objection to those alterations. 

CONCLUSION 

Defendants Altaba and Ms. Mayer request that the Court approve Plaintiffs’ Motion for 

Preliminary Approval of Settlement. 

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Dated: May 8, 2018 MORRISON & FOERSTER LLP 

JORDAN ETH 

JUDSON E. LOBDELL 

By: /s/ Jordan Eth 

Jordan Eth 

Attorneys for Defendants 

ALTABA INC. and MARISSA 

MAYER

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