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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 

POMERANTZ LLP 

Jeremy A. Lieberman (pro hac vice) 

Emma Gilmore (pro hac vice) 

Michael Grunfeld (pro hac vice) 

600 Third Avenue 

New York, NY 10016 

Telephone: (212) 661-1100 

jalieberman@pomlaw.com 

egilmore@pomlaw.com 

mgrunfeld@pomlaw.com 

GLANCY PRONGAY & MURRAY LLP 

Joshua L. Crowell (295411) 

Jennifer M. Leinbach (281404) 

1925 Century Park East, Suite 2100 

Los Angeles, CA 90067 

Telephone: (310) 201-9150 

jcrowell@glancylaw.com 

Counsel for Plaintiffs 

- additional counsel on signature page - 

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. 5:17-cv-00373-LHK

CLASS ACTION 

PLAINTIFFS’ MOTION FOR 

PRELIMINARY APPROVAL OF 

SETTLEMENT; MEMORANDUM OF 

POINTS AND AUTHORITIES 

Date: May 3, 2018 

Time: 1:30 p.m. 

Place: Courtroom 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

Case 5:17-cv-00373-LHK Document 73 Filed 03/02/18 Page 1 of 34
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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 17-CV-00373 (LHK) 1 

NOTICE OF MOTION AND MOTION 

TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 

PLEASE TAKE NOTICE that on May 3, 2018 at 1:30 p.m. (or as soon thereafter as the 

matter may be heard), at the United States District Court for the Northern District of California, 

in the Courtroom of the Honorable Lucy H. Koh, located at 280 South 1st Street, San Jose, 

California, Lead Plaintiff Sutton View Partners LP (“Sutton View”) and Named Plaintiff Nafiz 

Talukder (“Talukder” and together with Sutton View, “Plaintiffs”), on behalf of themselves and 

on behalf of all others similarly situated, will move the Court without opposition, upon the 

Stipulation and Agreement of Settlement dated March 2, 2018 (the “Stipulation”) and the 

exhibits annexed thereto, filed herewith, upon all prior pleadings and proceedings had herein; 

and upon any additional evidence or argument that the Court may request, for an order, pursuant 

to Rule 23 of the Federal Rules of Civil Procedure, in substantially the form filed herewith (the 

“Preliminary Approval Order”), (i) preliminarily approving the proposed settlement set forth in 

the Stipulation; (ii) certifying, for settlement purposes only, the proposed Settlement Class; (iii) 

approving the Settling Parties’ proposed form and method of giving notice to the proposed 

Settlement Class (the “Class Notice”); and (iv) setting a date for a Settlement Final Approval 

Hearing and deadlines for mailing and publication of the Class Notice, the filing of Settlement 

Class Member objections, the submission of Settlement Class Member opt-out requests, the 

filing of Plaintiffs’ Motion for Final Approval of the Settlement, and the filing of Lead Counsel’s 

application for attorneys’ fees and expenses and reimbursement of Plaintiffs’ costs and expenses 

pursuant to the Private Litigation Reform Act of 1995. 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK i 

TABLE OF CONTENTS 

I. SUMMARY ........................................................................................................................ 1

II. FACTUAL BACKGROUND ............................................................................................. 3

III. SUMMARY OF THE LITIGATION AND SETTLEMENT ............................................. 3

A. Procedural History .................................................................................................. 3

B. Settlement Discussions, the Settlement Stipulation, and Due Diligence ................ 6

IV. THE PROPOSED SETTLEMENT WARRANTS PRELIMINARY APPROVAL ........... 7

A. Standards for Preliminary Approval ....................................................................... 7

B. The Proposed Settlement Merits a Presumption of Fairness .................................. 9

C. Proposed Settlement Recovery Falls Within the Range of Possible Approval .... 10

1. Amount Offered Compared to the Potential Total Recovery ................... 11

2. Strength of Plaintiffs’ Case; Risk, Expense, Complexity, and Likely 

Duration of Further Litigation .................................................................. 13

3. The Extent of Discovery Completed, the Stage of the Proceedings, and 

the Experience and Views of Counsel ...................................................... 14

V. CERTIFICATION OF THE SETTLEMENT CLASS IS APPROPRIATE ..................... 15

A. Numerosity – Rule 23(a)(1) .................................................................................. 16

B. Commonality – Rule 23(a)(2) ............................................................................... 17

C. Typicality – Rule 23(a)(3) .................................................................................... 18

D. Adequacy – Rule 23(a)(4) ..................................................................................... 19

E. Predominance and Superiority -- Rule 23(b)(3) ................................................... 20

VI. THE PROPOSED NOTICE PROGRAM IS APPROPRIATE ........................................ 21

VII. PROPOSED SCHEDULE ................................................................................................ 23

CONCLUSION ............................................................................................................................. 23

 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK ii 

TABLE OF AUTHORITIES 

CASES

Acosta v. Trans Union, LLC, 

243 F.R.D. 377 (C.D. Cal. 2007) ................................................................................................ 9 

Alfus v. Pyramid Tech. Corp., 

764 F. Supp. 598 (N.D. Cal. 1991) ........................................................................................... 18 

Amchem Prods., Inc., v. Windsor, 

521 U.S. 591 (1997) .................................................................................................................. 15 

Aarons v. BMW of N. Am., LLC, 

No. CV 11-7667 PSG (CWx), 2014 U.S. Dist. LEXIS 118442 (C.D. Cal. Apr. 29, 2014) ..... 20 

Blackie v. Barrack,

524 F.2d 891 (9th Cir. 1975) .............................................................................................. 16, 17 

Browning v. Yahoo! Inc.,

No. C04-01463 HRL, 2007 U.S. Dist. LEXIS 86266 (N.D. Cal. Nov. 16, 2007) ...................... 7 

Carson v. Am. Brands, Inc., 

450 U.S. 79 (1981) ...................................................................................................................... 7 

Churchill Vill., L.L.C. v. GE, 

361 F.3d 566 (9th Cir. 2004) .................................................................................................... 10 

D’Amato v. Deutsche Bank, 

236 F.3d 78 (2d Cir. 2001)........................................................................................................ 10 

Danis v. USN Commc’ns, Inc., 

189 F.R.D. 391 (N.D. Ill. 1999) ................................................................................................ 18 

Deaver v. Compass Bank, 

No. 13-cv-00222-JSC, 2015 U.S. Dist. LEXIS 111170 (N.D. Cal. Aug. 21, 2015) .................. 9 

Dubin v. Miller, 

132 F.R.D. 269 (D. Colo. 1990) ............................................................................................... 18 

Eisenberg v. Gagnon, 

766 F.2d 770 (3d Cir. 1985)...................................................................................................... 21 

Halliburton Co. v. Erica P. John Fund, Inc., 

134 S.Ct. 2398 (2014) ............................................................................................................... 13 

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CASE NO. 5:17-cv-00373-LHK iii 

Hanlon v. Chrysler Corp., 

150 F.3d 1011 (9th Cir. 1998) ........................................................................................ 8, 15, 19 

Hanon v. Dataproducts Corp., 

976 F.2d 497 (9th Cir. 1992) .................................................................................................... 18 

Harris v. Vector Mktg. Corp., 

No. C-08-5198 EMC, 2011 U.S. Dist. LEXIS 48878 (N.D. Cal. Apr. 29, 2011) .................... 10 

Hayes v. MagnaChip Semiconductor Corp., 

No. 14-cv-01160-JST, 2016 U.S. Dist. LEXIS 162120 (N.D. Cal. Nov. 21, 2016) ................. 13 

In re Am. Bank Note Holographics, Inc., 

127 F. Supp. 2d 418 (S.D.N.Y. 2001) ....................................................................................... 13 

In re BankAmerica Corp. Sec. Litig., 

350 F.3d 747 (8th Cir. 2003) ...................................................................................................... 1 

In re Celera Corp. Sec. Litig., 

No. 5:10-cv-02604-EJD, 2015 U.S. Dist. LEXIS 157408 (N.D. Cal. Nov. 20, 2015) ....... 14, 22 

In re Cendant Corp. Litig., 

264 F.3d 201 (3d Cir. 2001)...................................................................................................... 14 

In re Cirrus Logic, Sec. Litig., 

155 F.R.D. 654 (N.D. Cal. 1994) .............................................................................................. 16 

In re Cooper Cos. Sec. Litig., 

254 F.R.D. 628 (C.D. Cal. 2009) .............................................................................................. 20 

In re First Capital Holdings Corp. Fin. Prods. Sec. Litig., 

MDL No. 901, 1993 U.S. Dist. LEXIS 21272 (C.D. Cal. Feb. 26, 1993) ................................ 21 

In re Heritage Bond Litig., 

No. 02-ML-1475 DT, 2005 U.S. Dist. LEXIS 13555 (C.D. Cal. June 10, 2005), ............... 7, 13 

In re Intelcom Grp., Inc. Sec. Litig., 

169 F.R.D. 142 (D. Colo. 1996) ............................................................................................... 20 

In re Marsh & McLennan Cos. Sec. Litig., 

No. 04 Civ. 8144 (CM), 2009 WL 5178546 (S.D.N.Y. Dec. 23, 2009) ..................................... 9 

In re Mego Fin. Corp. Sec. Litig., 

213 F.3d 454 (9th Cir. 2000) .................................................................................................... 14 

In re Omnivision Techs., Inc., 

559 F. Supp. 2d 1036 (N.D. Cal. 2007) .................................................................................... 12 

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CASE NO. 5:17-cv-00373-LHK iv 

In re Pac. Enters. Sec. Litig., 

47 F.3d 373 (9th Cir. 1995) ...................................................................................................... 14 

In re Painewebber Ltd. P’ships Litig., 

171 F.R.D. 104 (S.D.N.Y. 1997) .............................................................................................. 14 

In re Rite Aid Corp. Sec. Litig., 

146 F. Supp. 2d 706 (E.D. Pa. 2001) ........................................................................................ 13

In re UTStarcom, Inc. Sec. Litig., 

No. C 04-04908 JW, 2010 U.S. Dist. LEXIS 48122 (N.D. Cal. May 12, 2010) ...................... 17 

In re Vivendi Universal, S.A., Sec. Litig., 

No. 02 Civ. 5571 (RJH), 2012 U.S. Dist. LEXIS 21732 (S.D.N.Y. Feb. 6, 2012) .................. 13 

In re Wireless Facilities, Inc. Sec. Litig. II, 

253 F.R.D. 607 (S.D. Cal. 2008) ................................................................................................ 8 

In re Wireless Facilities, Inc. Sec. Litig., 

253 F.R.D. 630 (S.D. Cal. 2008) .............................................................................................. 18 

Kirkorian v. Borelli, 

695 F. Supp. 446 (N.D. Cal. 1988) ....................................................................................... 9, 14

Knight v. Red Door Salons, Inc., 

No. 08-01520 SC, 2009 U.S. Dist. LEXIS 11149 (N.D. Cal. Feb. 2, 2009) ............................ 13 

Lerwill v. Inflight Motion Pictures, Inc., 

582 F.2d 507 (9th Cir. 1978) .................................................................................................... 19 

Mullane v. Cent. Hanover Bank & Tr. Co., 

339 U.S. 306 (1950) .................................................................................................................. 22 

Murillo v. Pac. Gas & Elec. Co., 

266 F.R.D. 468 (E.D. Cal. 2010) ................................................................................................ 8 

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 

221 F.R.D. 523 (C.D. Cal. 2004) .................................................................................... 8, 11, 14 

Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 

688 F.2d 615 (9th Cir. 1982) ................................................................................................ 7, 13 

Perez-Funez v. Dist. Dir., Immigration & Naturalization Serv., 

611 F. Supp. 990 (C.D. Cal. 1984) ........................................................................................... 16 

Rannis v. Recchia, 

380 F. App’x 646 (9th Cir. 2010) ............................................................................................. 22 

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CASE NO. 5:17-cv-00373-LHK v 

Schwartz v. Harp, 

108 F.R.D. 279 (C.D. Cal. 1985) .............................................................................................. 17 

Silverman v. Motorola, Inc., 

No. 07 C 4507, 2012 WL 1597388 (N.D. Ill. May 7, 2012) ...................................................... 9 

Torrisi v. Tucson Elec. Power Co., 

8 F.3d 1370 (9th Cir. 1993) ...................................................................................................... 11 

Van Bronkhorst v. Safeco Corp., 

529 F.2d 943 (9th Cir. 1976) ...................................................................................................... 7 

Wehner v. Syntex Corp., 

117 F.R.D. 641 (N.D. Cal. 1987) .............................................................................................. 17 

Williams v. Costco Wholesale Corp., 

No. O2cv2003 IEG (AJB), 2010 U.S. Dist. LEXIS 19674 (S.D. Cal. Mar. 4, 2010) ................ 8 

Yamner v. Boich, 

No. C-92-20597 RPA, 1994 U.S. Dist. LEXIS 20849 (N.D. Cal. Sept. 15, 1994) .................. 17 

Young v. Polo Retail, LLC, 

No. C-02-4546 VRW, 2006 U.S. Dist. LEXIS 81077 (N.D. Cal. Oct. 25, 2006) ...................... 8 

STATUTES

15 U.S.C. § 78u-4(a)(3)(B) ............................................................................................................. 3 

15 U.S.C. § 78u-4(a)(4) .................................................................................................................. 1 

15 U.S.C. § 78u-4(a)(7) ................................................................................................................ 21 

RULES

Fed. R. Civ. P. 23 ................................................................................................................... passim

OTHER AUTHORITIES 

Manual for Complex Litigation (Third) § 30.41 (1995) ................................................................. 9 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 17-CV-00373 (LHK) 1 

MEMORANDUM OF POINTS AND AUTHORITIES 

Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Lead Plaintiff Sutton View 

Partners LP (“Sutton View”) and Named Plaintiff Nafiz Talukder (“Talukder” and together with 

Sutton View, “Plaintiffs”)1, on behalf of themselves and on behalf of all others similarly situated, 

respectfully submit this memorandum in support of Plaintiffs’ motion seeking: (i) Preliminary 

Approval of the Proposed Settlement (the “Settlement”); (ii) conditional certification of the 

Settlement Class; (iii) approval of the Notice to the Settlement Class; and (iv) a date for a 

Settlement Hearing and deadlines for the mailing and publication of the Notice, the filing of 

Settlement Class Member objections, the submission of Settlement Class Member opt-out 

requests, the filing of Plaintiffs’ Motion for Final Approval of the Settlement, and the filing of 

Lead Counsel’s application for attorneys’ fees and expenses and the reimbursement of Plaintiffs’ 

costs and expenses (the “Motion”).2 Defendants do not oppose the Motion.3 

I. SUMMARY 

Plaintiffs and Defendants Altaba Inc., formerly known as Yahoo! Inc. (“Altaba” or the 

“Company”), Marissa A. Mayer (“Mayer”), Ronald S. Bell (“Bell”), and Alexander Stamos 

(“Stamos”) (collectively, “Individual Defendants” and, together with Altaba, “Defendants”) are 

pleased to inform the Court that they have agreed to a cash settlement of $80 million, which will 

resolve all claims in this Action (the “Settlement”). As demonstrated below, the proposed $80 

million Settlement is not simply fair, reasonable, and adequate, it is an excellent result. 

 

1

 Lead Plaintiff Ben Maher (“Maher”) is currently reviewing the merits of the settlement and has 

declined to join this Motion at this time. In view of their fiduciary duties to the putative class of 

Yahoo shareholders, Sutton View and Talukder believe that $80 million in cash is an excellent 

recovery and that it is in the best interests of the class to proceed with the proposed Settlement. 

See In re BankAmerica Corp. Sec. Litig., 350 F.3d 747, 752 (8th Cir. 2003) (affirming district 

court’s “overruling the objections of a fraction of the NationsBank lead plaintiff group” given the 

court’s “responsibility to safeguard the interests of class members” and what “it viewed as the 

unrealistic expectations of the objecting lead plaintiffs”). 

2

 The Private Litigation Reform Act of 1995 (“PSLRA”) specifically provides that an “award of 

reasonable costs and expenses (including lost wages) directly relating to the representation of the 

class” may be made to “any representative party serving on behalf of a class.” 15 U.S.C. § 78u4(a)(4). 

3

 All capitalized terms used herein have the meanings set forth and defined in the Stipulation and 

Agreement of Settlement (the “Stipulation”) filed contemporaneously herewith. 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 2 

Under the current putative class period, April 30, 2013 through December 14, 2016, both 

dates inclusive (the “Settlement Class Period), the estimated class-wide damages in this case are 

between $230 million to $760, depending on the trading model utilized, representing a recovery 

of 10.5 to 34%––a significant recovery by any measure. Such a recovery is well above the 

median recovery for similar securities class actions. See, e.g., Cornerstone Research, Securities 

Class Action Settlements: 2016 Review and Analysis at 7 (noting that the median securities classaction settlement in 2016 was for 2.5% of estimated damages); Cornerstone Research, Securities 

Class Action Settlements 2013 Review and Analysis, at 8-9 (noting that in 2013, securities 

settlements overall returned a median recovery of 2.1% of damages, with 4.3% for cases with 

damages of between $50-124 million). If, however, Defendants were to successfully argue that 

Plaintiffs failed to allege scienter with respect to the 2013 Data Breach, then the class period 

would end on September 22, 2016, the date on which the 2014 Data Breach was publicly 

disclosed. Under this scenario, maximum class-wide damages would range from $171.5 million 

to $496 million, equating to a recovery range of 16% to 47%, an excellent outcome. 

Moreover, Plaintiffs and their counsel have a thorough understanding of the strengths and 

weaknesses of their claims, including the potential limitations on damages and recovery. The 

Settlement was reached after one year of litigation, including (i) an extensive investigation 

conducted by Class Counsel; (ii) the preparation of two detailed Amended Complaints; (iii) 

contentious motion practice with respect to Defendants’ motion to dismiss; (iv) extensive 

consultations with experts to evaluate loss causation damages issues; (v) the preparation and 

exchange of mediation statements; (vi) extensive, vigorous arm’s-length settlement negotiations 

(including a full-day formal mediation session as well as extensive interim negotiations) 

conducted with an experienced mediator, the Honorable Daniel Weinstein (Ret.); and (vii) a 

review of a significant number of documents produced by Altaba. 

While Plaintiffs believe the merits of the case are strong, the proposed Settlement is an 

excellent result and is in the best interests of the Settlement Class in light of the risks and costs of 

litigating this Action through trial. Accordingly, Plaintiffs respectfully request that the Court 

grant preliminary approval so that notice of the proposed Settlement may be disseminated to the 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 3 

Settlement Class. 

II. FACTUAL BACKGROUND 

This is a federal securities class action asserting claims under the Securities Exchange 

Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 against Defendants Yahoo! Inc. 

(“Yahoo” or the “Company”), Yahoo’s former Chief Executive Officer, Mayer, Yahoo’s former 

General Counsel, Bell, and Yahoo’s former Chief Information Security Officer, Stamos, on 

behalf of investors that purchased or otherwise acquired Yahoo securities during the Settlement 

Class Period. 

At the crux of this action are several data breaches, all of which Plaintiffs alleged caused 

financial harm to Yahoo investors: the 2013 Data Breach (which impacted the personal 

information of three billion Yahoo user accounts); the 2014 Data Breach, which affected the data 

of 500 million user accounts; and two additional data breaches in 2015 and 2016, which affected 

approximately 32 million Yahoo user accounts. 

III. SUMMARY OF THE LITIGATION AND SETTLEMENT 

A. Procedural History 

The Action was commenced with a complaint filed on January 24, 2017 in this District, 

asserting securities fraud claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 

10b-5 promulgated thereunder, against Yahoo, Mayer, and Goldman, on behalf of all persons 

who purchased or otherwise acquired common shares of Yahoo between November 12, 2013 and 

December 14, 2016, inclusive. (ECF No. 1.) A second action asserting securities fraud claims 

against the same defendants was filed on March 21, 2017. 

On March 27, 2017, Maher and Sutton View moved pursuant to Section 21D(a)(3)(B) of 

the Exchange Act, 15 U.S.C. § 78u-4(a)(3)(B), as amended by the PSLRA, and Fed. R. Civ. P. 

Rule 42, to consolidate the two above-referenced actions, to appoint Maher and Sutton View as 

Lead Plaintiffs and to approve Lead Plaintiffs’ selection of Pomerantz LLP (“Pomerantz”) and 

Glancy Prongay & Murray LLP (“Glancy”) as Co-Lead Counsel for the Class. (ECF No. 12.) 

On April 24, 2017, this Court consolidated the cases under Master File No. 17-CV00373, captioned the case In re Yahoo! Inc. Securities Litigation, appointed Maher and Sutton 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 4 

View as Lead Plaintiffs and approved their selection of Pomerantz and Glancy as co-Lead 

Counsel in the consolidated action. (ECF No. 19.) 

On April 26, 2017, at the initial case management conference, the Court set a deadline for 

the filing of a consolidated complaint and a briefing schedule on Defendants’ then contemplated 

motion to dismiss and scheduled a hearing on the motion to dismiss for September 7, 2017. 

(ECF No. 24.) 

On June 7, 2017, Plaintiffs filed the First Amended Complaint, removing Goldman as a 

defendant and adding Bell and Stamos as Defendants. The First Amended Complaint asserted 

securities fraud claims on behalf of Plaintiffs and a class consisting of all persons other than 

Defendants who purchased or otherwise acquired Yahoo securities between April 30, 2013 and 

December 14, 2016. (ECF No. 28.) 

On July 28, 2017, Defendants Yahoo and Mayer filed a motion to dismiss (ECF No. 46), 

to which Defendants Bell and Stamos filed joinders (ECF Nos. 48-49). The motion to dismiss 

was fully briefed by September 21, 2017. (ECF Nos. 56-57.) 

Through a Joint Unopposed Motion to Continue the Motion to Dismiss Hearing filed 

with the Court on October 13, 2017, the parties informed the Court that: 

On October 10, 2017, the parties participated in a mediation session with the 

Honorable Daniel Weinstein of JAMS. At the mediation session, sufficient 

progress was made that the parties believe deferring a hearing and ruling on 

Defendants’ pending motion to dismiss the First Amended Complaint would 

benefit the mediation process and increase the likelihood that a settlement can be 

reached in this matter. Judge Weinstein agrees that deferring decision on the 

pending motion to dismiss would benefit the mediation process. The parties 

jointly request that the Court continue the hearing on Defendants’ motion to 

dismiss, currently scheduled for October 19, 2017, to a date on or after November 

20, 2017, that is convenient to the Court, and jointly request that the Court defer 

ruling on the motion to dismiss until a date on or after November 20, 2017. 

(ECF No. 59.) The Court granted the parties’ Joint Unopposed Motion and continued the 

hearing on Defendants’ motion to dismiss the First Amendment Complaint to November 30, 

2017. (ECF No. 60.) 

On November 1, 2017, the parties submitted a Joint Case Management Statement 

informing the Court that: 

The Parties’ settlement discussions are continuing. The Parties and the Mediator 

believe that further discussions may result in a settlement. Accordingly, the 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 5 

Parties hereby jointly request that the Case Management Conference currently set 

for November 8, 2017, be continued until a date convenient to the Court 

following the November 30, 2017 hearing on Defendants’ motion to dismiss. The 

Parties will notify the Court promptly in the event that a settlement is reached. 

(ECF No. 61.) 

On November 20, 2017, the Court ordered the parties to file a joint settlement status 

update by November 22, 2017. (ECF No. 63.) On November 21, 2017, the parties filed a Joint 

Settlement Status Update and Joint Unopposed Motion to Continue the Hearing Date of 

Defendants’ Motion to Dismiss. (ECF No. 64.) The parties informed the Court that: 

The parties have continued their negotiations and, with the ongoing support and 

assistance of Judge Weinstein, have made substantial further progress. Although 

no settlement has been reached at this point, the parties are optimistic that a 

settlement can be achieved with additional time and effort. Therefore, the parties 

request that the Court continue the hearing on Defendants’ motion to dismiss, and 

not rule on the motion, until a date on or after December 18, 2017, at the Court’s 

convenience. 

(Id.) 

On November 22, 2017, the Court entered an Order Denying Without Prejudice the 

Motion to Dismiss and Motion for Joinder as Moot, advising the parties that it “will not continue 

the motion to dismiss hearing indefinitely” and setting a modified schedule as a result of 

“sufficiently plead circumstances” to warrant granting Plaintiffs leave to amend their First 

Amended Complaint in light of Verizon’s disclosure on October 3, 2017, that “the 2013 data 

breach affected an additional two billion Yahoo user accounts.” (ECF No. 65.) The Court set a 

deadline of February 2, 2018, for Plaintiffs to file a Second Amended Class Action Complaint. 

Id. On January 10, 2018, the Court ordered the parties to file a joint settlement status update by 

January 16, 2018. (ECF No. 66.) 

On January 16, 2018, the parties filed a Joint Settlement Status Update, informing the 

Court that Plaintiffs Sutton View and Talukder, and all Defendants “are negotiating, and believe 

they are close to reaching, a settlement agreement, subject to formal documentation and court 

approval.” (ECF No. 67.) On January 23, 2018, the parties executed a Memorandum of 

Understanding (“MOU”), which memorialized the terms and conditions of a settlement in 

principle for $80 million. On the same day, the parties filed another Joint Settlement Status 

Update, informing the Court that Plaintiffs Sutton View and Talukder and all Defendants “have 

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reached a settlement agreement, subject to formal documentation and Court approval,” and that 

“Plaintiff Ben Maher has not agreed to the settlement at this time.” (ECF No. 68.) The parties to 

the settlement also informed the Court that they “plan to file a motion with the Court no later 

than March 2, 2018, attaching a stipulation of settlement and requesting that the Court enter a 

preliminary approval order certifying a settlement class, approving the form of notice to the 

class, granting preliminary approval of the settlement, and setting a date for a hearing on final 

approval of the settlement.” Id. Given that agreement, the parties to the settlement requested 

that the Court vacate the deadlines set by the Court in its November 22, 2017, Order Denying the 

Motion to Dismiss and Motion for Joinder as Moot. Id. The Court denied that request on 

January 24, 2018. (ECF No. 69.) On February 2, 2018, Plaintiffs filed their Second Amended 

Class Action Complaint. (ECF No. 70.) Defendants are filing their motion to dismiss that 

complaint on March 2, 2018. 

B. Settlement Discussions, the Settlement Stipulation, and Due Diligence 

On October 10, 2017, the parties participated in an all-day mediation session led by Hon. 

Daniel Weinstein (Ret.), a respected and experienced mediator with JAMS. Before the 

mediation session, the parties prepared and exchanged extensive mediation statements outlining 

their settlement positions. At the mediation, the parties made substantial progress toward 

reaching a settlement, but did not reach an agreement. Over the next three months, Judge 

Weinstein conducted further discussions with the parties, which included many hours of 

telephonic discussions. Those discussions culminated in the settlement MOU, fully executed on 

January 23, 2018. 

Following the execution of the settlement MOU, the parties began to negotiate and 

document all terms and conditions of a settlement and prepare all related documentation. The 

Stipulation memorializes the agreement between the parties to fully and finally settle the Action 

and, among other things, fully releases all Released Claims against all Defendants and the 

Released Parties with prejudice in return for $80 million cash. 

As provided in the Stipulation, the parties have agreed to a process of informal discovery 

that would allow Lead Counsel to conduct due diligence and determine that the proposed 

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Settlement is fair, reasonable, and adequate. To this end, the parties negotiated and agreed on the 

scope of Defendants’ confirmatory discovery, which was expressly made a term of the MOU. 

Between January 23, 2018 and February 16, 2018, Altaba made a substantial document 

production to Plaintiffs. Lead Counsel has reviewed a significant portion of these documents 

and anticipates that confirmatory discovery will be substantially complete by the preliminary 

approval hearing date on May 3, 2018. 

IV. THE PROPOSED SETTLEMENT WARRANTS PRELIMINARY APPROVAL 

At the Settlement Hearing, the Court will have before it extensive papers submitted in 

support of approval of the proposed Settlement and will be asked to make a determination as to 

whether the Settlement is fair, reasonable, and adequate under all of the circumstances 

surrounding the litigation of this Action. At this juncture, however, the Settling Parties request 

only preliminary approval of the Settlement. 

A. Standards for Preliminary Approval 

Federal Rule of Civil Procedure 23(e) requires judicial approval of any compromise of 

claims brought on a class-wide basis. Fed. R. Civ. P. 23(e) (“The Claims . . . of a certified class 

may be settled . . . only with the court’s approval.”). “In deciding whether to approve a proposed 

settlement, the Ninth Circuit has a ‘strong judicial policy that favors settlements, particularly 

where complex class action litigation is concerned.’” In re Heritage Bond Litig., No. 02-ML1475 DT, 2005 U.S. Dist. LEXIS 13555, at *9 (C.D. Cal. June 10, 2005); see also Officers for 

Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 

1982). “[T]here is an overriding public interest in settling and quieting litigation,” which is 

“particularly true in class action suits.” Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th 

Cir. 1976); see also Browning v. Yahoo! Inc., No. C04-01463 HRL, 2007 U.S. Dist. LEXIS 

86266, at *39 (N.D. Cal. Nov. 16, 2007) (“public and judicial policies strongly favor settlement 

of class action suits”). The Supreme Court has cautioned that in reviewing a proposed class 

settlement, courts should “not decide the merits of the case or resolve unsettled legal questions.” 

Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n.14 (1981). 

Approval of a class action settlement requires two stages of judicial approval: (i) 

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preliminary approval, followed by the distribution of notice to the class, and (ii) final approval. 

Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010) (“Procedurally, the 

approval of a class action settlement takes place in two stages.”); see also Nat’l Rural 

Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004). “In the first stage 

of the approval process, the court preliminarily approve[s] the Settlement pending a fairness 

hearing, temporarily certifie[s] the Class . . . and authorize[s] notice to be given to the Class.” 

Murillo, 266 F.R.D. at 473 (alterations in original) (internal quotations omitted). 

At this initial preliminary approval stage, the “Court need only determine whether the 

proposed settlement appears on its face to be fair” and “falls within the range of possible 

approval.” Williams v. Costco Wholesale Corp., No. O2cv2003 IEG (AJB), 2010 U.S. Dist. 

LEXIS 19674, at *15-*16 (S.D. Cal. Mar. 4, 2010); see also In re Wireless Facilities, Inc. Sec. 

Litig. II, 253 F.R.D. 607, 612 (S.D. Cal. 2008). In considering whether to grant preliminary 

approval of a proposed class action settlement, “Fed. R. Civ. P. 23(e) requires the district court to 

determine whether a proposed settlement is fundamentally fair, adequate, and reasonable.” 

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). The Court need not make a final 

determination as to whether the proposed Settlement will ultimately be found to be fair, 

reasonable, and adequate. Rather, that evaluation is made only at the final approval stage, after 

notice of the proposed Settlement has been given to the Settlement Class Members and those 

Settlement Class Members have had an opportunity both to voice their views of the proposed 

Settlement and to exclude themselves from the Settlement Class if they so choose. See Williams, 

2010 U.S. Dist. LEXIS 19674, at *14-*15 (“Given that some ... factors cannot be fully assessed 

until the Court conducts the Final Approval Hearing, ‘a full fairness analysis is unnecessary at 

this stage.’”). 

By their motion, Plaintiffs respectfully request that the Court find that “the proposed 

settlement appears to be the product of serious, informed, non-collusive negotiations, has no[] 

obvious deficiencies, does not improperly grant preferential treatment to class representatives or 

segments of the class, and falls within the range of possible approval,” and accordingly “direct 

that the notice be given to the class members of a formal fairness hearing.” Young v. Polo Retail, 

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LLC, No. C-02-4546 VRW, 2006 U.S. Dist. LEXIS 81077, at *12-*13 (N.D. Cal. Oct. 25, 2006). 

B. The Proposed Settlement Merits a Presumption of Fairness 

“To determine whether preliminary approval is appropriate, the settlement need only be 

potentially fair, as the Court will make a final determination of its adequacy at the hearing on 

Final Approval, after such time as any party has had a chance to object and/or opt out.” Acosta v. 

Trans Union, LLC, 243 F.R.D. 377, 386 (C.D. Cal. 2007) (alteration in original) (cited in Deaver 

v. Compass Bank, No. 13-cv-00222-JSC, 2015 U.S. Dist. LEXIS 111170, at *20 (N.D. Cal. Aug. 

21, 2015)). Accordingly: 

If the preliminary evaluation of the proposed settlement does not disclose grounds 

to doubt its fairness or other obvious deficiencies, such as unduly preferential 

treatment of class representatives or of segments of the class, or excessive 

compensation for attorneys, and appears to fall within the range of possible 

approval, the court should direct that notice under Rule 23(e) be given to the class 

members of a formal fairness hearing, at which arguments and evidence may be 

presented in support of and in opposition to the settlement. 

Manual for Complex Litigation (Third) § 30.41 (1995). 

Here, the proposed Settlement merits a presumption of fairness because it has no obvious 

deficiencies and the settlement recovery falls within the range of possible approval. Indeed, it is 

both procedurally and substantively fair—it is the product of arm’s-length negotiations among 

well-informed and experienced counsel aided by an experienced mediator, and it provides the 

Settlement Class with an excellent recovery. See Kirkorian v. Borelli, 695 F. Supp. 446, 451 

(N.D. Cal. 1988) (“The recommendation of experienced counsel carries significant weight in the 

court’s determination of the reasonableness of the settlement.”). 

As aforementioned, settlement negotiations proceeded over a period of several months, 

involving mediation led by an internationally respected mediator, Hon. Daniel Weinstein, on 

whom both Plaintiffs and Defendants’ counsel relied for judicious and impartial evaluation of 

their respective positions. See In re Marsh & McLennan Cos. Sec. Litig., No. 04 Civ. 8144 

(CM), 2009 WL 5178546, at *8 (S.D.N.Y. Dec. 23, 2009) (finding “no reason to doubt that the 

Settlement is procedurally fair” when “negotiations were conducted with the assistance of Judge 

Weinstein, a highly regarded mediator with extensive experience in securities litigation”); 

Silverman v. Motorola, Inc., No. 07 C 4507, 2012 WL 1597388, at *3 (N.D. Ill. May 7, 2012) 

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(approving settlement and describing Judge Weinstein as “a nationally-recognized and highlyrespected mediator”). In advance of the mediation session, the parties exchanged detailed 

mediation statements addressing liability and damages. During the mediation session, both sides 

made adversarial presentations about the merits of Plaintiffs’ claims and the defenses to those 

claims. The negotiations were at all times adversarial, and they eventually produced a result that 

the parties believe to be in their respective best interests. The arm’s-length nature of the 

settlement negotiations and the involvement of an experienced mediator support the conclusion 

that the Settlement is fair and was achieved free of collusion. See D’Amato v. Deutsche Bank, 

236 F.3d 78, 85 (2d Cir. 2001) (a “mediator’s involvement in . . . settlement negotiations helps to 

ensure that the proceedings were free of collusion and undue pressure”); Harris v. Vector Mktg. 

Corp., No. C-08-5198 EMC, 2011 U.S. Dist. LEXIS 48878, at *25 (N.D. Cal. Apr. 29, 2011) 

(finding the fact that the settlement was negotiated during a mediation with an experienced 

mediator “suggests that the parties reached the settlement in a procedurally sound manner and 

that it was not the result of collusion or bad faith by the parties or counsel”). 

In addition, the Settlement has no obvious deficiencies. It provides a substantial nonreversionary cash recovery to the Settlement Class, and there is no preferential treatment to 

Plaintiffs or any other Settlement Class Members. The proposed Plan of Allocation (as set forth 

in the Notice) was developed by a damages expert in consultation with Class Counsel and 

provides a fair and reasonable method to allocate the Net Settlement Fund among Settlement 

Class Members who submit valid claims. 

C. Proposed Settlement Recovery Falls Within the Range of Possible Approval 

The Settlement also fares well in light of the applicable factors used in evaluating classaction settlements for final approval. These factors include: “(1) the strength of the plaintiffs’ 

case; (2) the risk, expense, complexity, and 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 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) the reaction of the class 

members to the proposed settlement.” Churchill Vill., L.L.C. v. GE, 361 F.3d 566, 575 (9th Cir. 

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2004). The factors are non-exclusive and not all need be shown. Id. at 576 n.7. In fact, “one 

factor alone may prove determinative in finding sufficient grounds for court approval.” Nat’l 

Rural Telecomms., 221 F.R.D. at 525-26; see, e.g., Torrisi v. Tucson Elec. Power Co., 8 F.3d 

1370, 1376 (9th Cir. 1993). 

1. Amount Offered Compared to the Potential Total Recovery 

Employing an aggressive damages methodology, Plaintiffs’ damages consultant has 

estimated that the maximum recoverable damages in this case are $764.1 million using a multitrader model.4

 The analysis would assume that 100 percent of the company specific returns 

used to measure price inflation (deflation) were caused by the revelation of alleged fraud on 

September 22, 2016, September 23, 2016, and December 15, 2016. In that regard, the company 

specific returns on those dates are not disentangled from any non-fraud related company specific 

information that might have been disclosed contemporaneously. Using the first-in, first out 

institutional investor model (“FIFO”), estimated damages are approximately $348.2 million, 

while using the last in, first out institutional investor model (“LIFO”), estimated damages are 

approximately $234.2 million. 

Plaintiffs contend that a significant part of the price decline following each disclosure 

was attributable to the disclosure of new information correcting earlier misrepresentations, and 

thus recoverable as damages. However, Plaintiffs recognize and must account for the fact that 

some portion of these price declines was attributable to confounding information. Indeed, 

Defendants contended that recoverable damages, if any, are limited to a range of $15 million to 

$160 million. For example, Defendants contended that there will be no evidence that any Yahoo 

executive was aware of the 2013 Data Breach, hence elimination of the 2013 Data Breach results 

 

4

 The proportional 80/20 Multi-Trader Model posits two active traders (e.g., institutions and 

individuals) with different holdings and propensities to trade. The so-called “80/20” split 

between the two sets of traders specifies a large set of “slow” traders (i.e., they hold 80% of 

shares available, but trade 20% of the volume) and a small set of “fast” traders (i.e., they hold 

20% of shares available, but trade 80% of the volume). This model has been advocated by 

representative authors from Cornerstone Research, an economic consulting firm frequently 

engaged by defendants in class action securities litigation. See W. Beaver, et al., Stock Trading 

Behavior and Damage Estimation in Securities Cases, Cornerstone Research Working Paper 

(1993). 

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in a substantial shortening of the class period. Defendants also argued that the September 23, 

2016 price decline should not be included in estimating damages because, in an efficient market, 

the price decline on the prior date (i.e., September 22, 2016) fully accounted for the relevant 

corrective disclosure. In other words, Defendants argued that, in an efficient market, a two-day 

price decline window is improper because the news revealed is reflected in the stock prices 

almost immediately. Eliminating the September 23, 2016, price decline and employing 

corrective disclosure dates of September 22, 2016 and December 15, 2016 only, Plaintiffs’ 

damages consultant has estimated that the maximum recoverable damages are $558.1 million 

using a multi-trader model, $251.4 million using an institutional trading model under FIFO, and 

$175.6 million using an institutional trading model under LIFO. 

As noted above, using each of these models, the Settlement represents an excellent 

recovery for the Settlement Class: 

• using the multi-trader model, Plaintiffs estimate that the Settlement returns 

approximately (i) 14% percent of the estimated damages suffered by the Class 

using corrective disclosures accompanied by price declines that are statistically 

significant at the 95% confidence level; or (ii) 10% of the estimated damages 

suffered by the Class using corrective disclosures accompanied by price declines 

that are statistically significant at the 90% confidence level; 

• using the FIFO Institutional Trading Model, Plaintiffs estimate that the Settlement 

returns approximately (i) 32% percent of the estimated damages suffered by the 

Class using corrective disclosures accompanied by price declines that are 

statistically significant at the 95% confidence level; or (ii) 23% of the estimated 

damages suffered by the Class using corrective disclosures accompanied by price 

declines that are statistically significant at the 90% confidence level; 

• using the LIFO Institutional Trading Model, Plaintiffs estimate that the Settlement 

returns approximately (i) 46% percent of the estimated damages suffered by the 

Class using corrective disclosures accompanied by price declines that are 

statistically significant at the 95% confidence level; or (ii) 34% of the estimated 

damages suffered by the Class using corrective disclosures accompanied by price 

declines that are statistically significant at the 90% confidence level. 

Each of these results is well above the median settlement for similar securities class 

actions. See, e.g., Securities Class Action Settlement 2016 Review and Analysis, supra, at 7-8 

(noting that in 2016, securities settlements overall returned a median of 2.5% of damages, with 

3.0% where damages are between $250-$499 million); Securities Class Action Settlements 2013 

Review and Analysis, supra, at 8-9 (noting that in 2013, securities settlements overall returned a 

median of 2.1% of damages, with 4.3% where damages are between $50-124 million); In re 

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Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1042 (N.D. Cal. 2007) (approving 6% recovery 

of maximum damages) (citing In re Heritage Bond, 2005 U.S. Dist. LEXIS 13555, at *27-*28 

(average recovery between 2% to 3% of maximum damages)); In re Rite Aid Corp. Sec. Litig., 

146 F. Supp. 2d 706, 715 (E.D. Pa. 2001) (citing studies indicating that the average securities 

fraud class action settlement since 1995 has resulted in a recovery of 5.5% – 6.2% of estimated 

losses); see also Officers for Justice, 688 F.2d at 628 (“It is well-settled law that a cash 

settlement amounting to only a fraction of the potential recovery will not per se render the 

settlement inadequate or unfair”); Knight v. Red Door Salons, Inc., No. 08-01520 SC, 2009 U.S. 

Dist. LEXIS 11149, at *10 (N.D. Cal. Feb. 2, 2009) (“The immediacy and certainty of the 

settlement award justifies a recovery smaller than the Class Members could seek in the case”). 

Accordingly, the $80 million Settlement Amount easily falls “within the range of possible 

approval” and warrants preliminary approval. 

2. Strength of Plaintiffs’ Case; Risk, Expense, Complexity, and Likely 

Duration of Further Litigation 

While Plaintiffs believe their case is strong, the “risk, expense, complexity, and likely 

duration of further litigation” were substantial. Securities-fraud cases are inherently complex 

and frequently take an exceptionally long time to litigate, in part because they often involve 

significant post-trial motions and appeals. See, e.g., In re Vivendi Universal, S.A., Sec. Litig., No. 

02 Civ. 5571 (RJH), 2012 U.S. Dist. LEXIS 21732, at *19 (S.D.N.Y. Feb. 6, 2012) (noting that, 

two years after jury verdict in plaintiffs’ favor and ten years after the case was filed, shareholders 

had still received no recovery), reconsideration denied, 861 F. Supp. 2d 262 (S.D.N.Y. 2012). 

Plaintiffs believe their case was strong with respect to falsity and scienter, two elements 

of Plaintiffs’ 10(b) claims. Scienter is, however, notoriously difficult to prove, however, in 

securities-fraud cases. See, e.g., Hayes v. MagnaChip Semiconductor Corp., No. 14-cv-01160-

JST, 2016 U.S. Dist. LEXIS 162120, at *16 (N.D. Cal. Nov. 21, 2016); In re Am. Bank Note 

Holographics, Inc., 127 F. Supp. 2d 418, 426 (S.D.N.Y. 2001). Plaintiffs also would have 

encountered other difficulties. For example, with respect to class certification, Defendants likely 

would have argued that the alleged misstatements had no impact on Yahoo’s stock price. See 

Halliburton Co. v. Erica P. John Fund, Inc., 134 S.Ct. 2398 (2014). Moreover, with respect to 

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the element of loss causation, disentangling the market’s reaction to various pieces of corrective 

disclosures would have required expert testimony based on methodologies that are highly 

contested among economists, resulting in an unpredictable and expensive “battle of the experts.” 

See, e.g., In re Celera Corp. Sec. Litig., No. 5:10-cv-02604-EJD, 2015 U.S. Dist. LEXIS 157408, 

at *17 (N.D. Cal. Nov. 20, 2015) (finding that this weighed in favor of settlement approval); In 

re Cendant Corp. Litig., 264 F.3d 201, 239 (3d Cir. 2001) (finding no error in district court’s 

determination “that establishing damages at trial would lead to a ‘battle of experts,’ with each 

side presenting its figures to the jury and with no guarantee whom the jury would believe”). At 

the very least, these arguments were likely to impose significant limits on potential damages. 

And not only would any recovery be very uncertain, considering the near-certainty of appeals, it 

would inevitably be delayed by years. 

Accordingly, the immediacy and certainty of an $80 million recovery is of significant 

benefit to the Class and strongly supports granting preliminary approval. 

3. The Extent of Discovery Completed, the Stage of the Proceedings, and 

the Experience and Views of Counsel 

Co-Lead Counsel Pomerantz and Glancy are highly experienced in litigating federal 

securities class action cases. Counsel’s informed determination, in harmony with the 

instrumental guidance of Judge Weinstein as an experienced mediator that the Settlement is in 

the best interest of the Settlement Class, should be afforded significant weight. See Nat’l Rural 

Telecomms., 221 F.R.D. at 528 (“‘Great weight’ is accorded to the recommendation of counsel . . 

. because ‘parties represented by competent counsel are better positioned than courts to produce 

a settlement that fairly reflects each party’s expected outcome in the litigation’”) (citing In re 

Painewebber Ltd. P’ships Litig., 171 F.R.D. 104, 125 (S.D.N.Y. 1997) and In re Pac. Enters. 

Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995)); see also Kirkorian, 695 F. Supp. at 451 (“The 

recommendation of experienced counsel carries significant weight in the court’s determination of 

the reasonableness of the settlement.”). 

Although there has been no formal discovery to date, “formal discovery is not a 

necessary ticket to the bargaining table where the parties have sufficient information to make an 

informed decision about settlement.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th 

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Cir. 2000) (internal quotation marks omitted). Such is the case here. Lead Counsel conducted 

an extensive and thorough factual investigation, including obtaining statements from confidential 

witnesses who worked at Yahoo during the Class Period. Lead Counsel also reviewed, among 

other things: Defendants’ SEC filings, press releases, and other public statements; transcripts of 

Yahoo’s earnings calls and investor conferences; public documents; federal indictments; articles 

and analyst reports regarding Yahoo; and documents obtained in the shareholder class action 

litigation against Yahoo, including documents produced in response to a demand for corporate 

books and records pursuant to Section 220 of the Delaware General Corporations Law and in 

response to expedited discovery. In addition, Lead Counsel opposed Defendants’ motion to 

dismiss, engaged in a mediation process that entailed significant briefing, and prepared the 

Second Amended Complaint. Thus, Lead Counsel understands the strengths and weaknesses of 

Plaintiffs’ case and has enough information to recommend that the Court preliminarily approve 

the Settlement. Moreover, pursuant to the MOU and for purposes of confirmatory discovery, 

Altaba has made a substantial document production, of which Lead Counsel has already 

reviewed a significant portion. Lead Counsel is continuing to review this production and 

anticipates that confirmatory discovery will be substantially complete by the preliminary 

approval hearing date on May 3, 2018. 

Accordingly, Lead Counsel’s determination that the settlement is in the best interest of 

the Class is entitled to significant weight in this case. 

V. CERTIFICATION OF THE SETTLEMENT CLASS IS APPROPRIATE 

The preliminary approval process is also utilized to certify a settlement class when a class 

has not previously been certified by the court. The Supreme Court recognizes the utility and 

necessity of certifying settlement classes so long as absent class members’ rights are protected. 

See Amchem Prods., Inc., v. Windsor, 521 U.S. 591, 620 (1997). The Ninth Circuit has long 

recognized that class actions may be certified for the purpose of settlement only as long as the 

class meets the certification requirements under Rule 23. See Hanlon, 150 F.3d at 1019. 

Rule 23 has two sets of requirements for class certification. First, subsection (a) sets 

forth four prerequisites, providing that one or more members of a class may sue as representative 

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CASE NO. 5:17-cv-00373-LHK 16 

parties on behalf of the class if: (1) the class is so numerous that joinder of all members is 

impracticable; (2) there are questions of law or fact common to the class; (3) the claims or 

defenses of the representative parties are typical of the claims or defenses of the class; and (4) 

the representative parties will fairly and adequately protect the interests of the class. See Fed. R. 

Civ. P. 23(a). In addition, under the pertinent subdivision of subsection (b) applicable to this 

case, Rule 23(b)(3) provides that an action may be maintained as a class action if the “court finds 

that the questions of law or fact common to class members predominate over any questions 

affecting only individual members, and that a class action is superior to other available methods 

for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). 

Here, the proposed Settlement Class is defined in the Stipulation as all persons who 

purchased or otherwise acquired Yahoo securities on the open market during the Settlement 

Class Period. Excluded from the Settlement Class are (i) Defendants and the Individual 

Defendants’ family members, heirs, successors, or assigns; (ii) directors and officers of Altaba 

and their families; (iii) any entity in which Defendants have a controlling interest; and (v) any 

Person who submits a request for exclusion from the Settlement Class that is accepted by the 

Court. 

Courts have generally found securities claims to be particularly well-suited for class 

treatment because they allow for the policies behind the securities laws to be enforced in 

circumstances where there are numerous investors with small individual claims that otherwise 

would effectively be barred from litigation. See Blackie v. Barrack, 524 F.2d 891, 902 (9th Cir. 

1975). This action is no exception and, as explained below, the proposed Settlement Class 

satisfies each of the requirements of Rule 23. In support of their contention that proper and 

sufficient grounds to conditionally certify the class exist under Rule 23(a) and 23(b)(3), Plaintiffs 

demonstrate the following: 

A. Numerosity – Rule 23(a)(1) 

Rule 23(a)(1) requires that the class be so numerous that joinder of all class members is 

impracticable. Classes consisting of 25 members have been held to be large enough to justify 

certification. See Perez-Funez v. Dist. Dir., Immigration & Naturalization Serv., 611 F. Supp. 

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990, 995 (C.D. Cal. 1984). The exact size of the class need not be known so long as general 

knowledge and common sense indicate that the class is large. See In re Cirrus Logic Sec. Litig., 

155 F.R.D. 654, 656 (N.D. Cal. 1994); see also Schwartz v. Harp, 108 F.R.D. 279, 281-82 (C.D. 

Cal. 1985) (“A failure to state the exact number in the proposed class does not defeat class 

certification[.]”). Courts widely recognize that numerosity is met in securities cases involving 

nationally traded securities. Yamner v. Boich, No. C-92-20597 RPA, 1994 U.S. Dist. LEXIS 

20849, at *7-*8 (N.D. Cal. Sept. 15, 1994). 

Here, millions of Yahoo shares were traded during the Settlement Class Period. In 

addition, beneficial holders of Yahoo securities are believed to number in the thousands and are 

geographically located throughout the United States. Accordingly, joinder of all Settlement 

Class Members in consolidated individual actions would clearly be impracticable. Hence, the 

numerosity element is satisfied. 

B. Commonality – Rule 23(a)(2) 

Rule 23(a)(2) is satisfied where the proposed class representative(s) share at least one 

question of law or fact with the claims of the prospective class. Wehner v. Syntex Corp., 117 

F.R.D. 641, 644 (N.D. Cal. 1987). Further, there may be varying fact situations among 

individual members of the class as long as the claims of the plaintiff and other class members are 

based on the same legal or remedial theory. Blackie, 524 F.2d at 902. Here, questions that are 

common to the proposed Settlement Class include, among others: (i) whether the Settling 

Defendants’ alleged acts violated the federal securities laws; (ii) whether alleged statements or 

omissions made by the Settling Defendants to the investing public during the Settlement Class 

Period misrepresented material facts about Yahoo; (iii) whether the price of Yahoo securities 

was artificially inflated during the Settlement Class Period; and (iv) whether the Settlement Class 

Members have sustained damages and the proper measure of such damages. See also In re 

UTStarcom, Inc. Sec. Litig., No. C 04-04908 JW, 2010 U.S. Dist. LEXIS 48122, at *15-*16 

(N.D. Cal. May 12, 2010) (finding common questions of law and fact as to whether “Defendants 

engaged in a fraudulent scheme and omitted or misrepresented material facts,” whether the 

“publicly traded securities were artificially inflated,” and whether “Defendants’ . . . omissions 

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CASE NO. 5:17-cv-00373-LHK 18 

caused class members to suffer economic losses”). Here, there are common questions of law and 

fact because the Settling Defendants’ alleged misconduct affected all Settlement Class Members 

in the same manner, i.e., the Settling Defendants’ alleged false and misleading statements and 

omissions allegedly artificially inflated the price of Yahoo securities. 

Securities actions raising common questions such as the ones listed above have 

repeatedly been held to be prime candidates for class certification. In short, because the core 

complaint of all Settlement Class Members is that they purchased Yahoo securities at artificially 

inflated prices and suffered damages as a result of the alleged securities violations, the 

commonality requirement of Rule 23(a)(2) is satisfied. See In re Wireless Facilities, Inc. Sec. 

Litig., 253 F.R.D. 630, 635 (S.D. Cal. 2008) (finding “core issue” in a securities litigation to be 

plaintiffs’ acquisition of “[defendant’s] common stock at artificially inflated prices”). 

C. Typicality – Rule 23(a)(3) 

Pursuant to Rule 23(a)(3), a representative’s claim is typical if each class member’s claim 

arose from the same course of conduct and is based on the same legal theories. The typicality 

requirement recognizes that a class representative “with claims typical of the class will, in 

pursuing and defending his own self-interest in the litigation, be concomitantly advancing or 

defending the interests of the class.” Dubin v. Miller, 132 F.R.D. 269, 274 (D. Colo. 1990). 

“The test of typicality is whether other members have the same or similar injury, whether the 

action is based on conduct which is not unique to the named plaintiffs, and whether other class 

members have been injured by the same course of conduct.” Hanon v. Dataproducts Corp., 976 

F.2d 497, 508 (9th Cir. 1992) (internal quotation marks omitted). 

The typicality requirement is met if Plaintiffs and each member of the represented group 

have an interest in prevailing on similar legal claims. Differences in the amount of damages, the 

size or manner of purchase, the nature of the purchaser, and the date of purchase are insufficient 

to defeat class certification. See Alfus v. Pyramid Tech. Corp., 764 F. Supp. 598, 606 (N.D. Cal. 

1991). In other words, typicality exists “even where factual distinctions exist between the claims 

of the named representative and the other class members.” Danis v. USN Commc’ns, Inc., 189 

F.R.D. 391, 395 (N.D. Ill. 1999). 

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CASE NO. 5:17-cv-00373-LHK 19 

Here, the proposed representatives’ and the Settlement Class Members’ claims arise from 

the same alleged conduct by the Settling Defendants. Plaintiffs Sutton View and Talukder allege 

that they, like the other Settlement Class Members, purchased Yahoo securities at artificially 

inflated prices because the Settling Defendants, in violation of the federal securities laws, 

allegedly issued false and materially misleading statements and/or omissions during the 

Settlement Class Period. The proof that the proposed representatives would present to establish 

their claims would also prove the claims of the rest of the Settlement Class. Further, neither 

proposed representative is subject to any unique defenses that would make it an atypical 

Settlement Class Member. 

D. Adequacy – Rule 23(a)(4) 

Rule 23(a)(4) adequacy requires that class representatives must be capable of fairly and 

adequately protecting the interests of absent class members. This requirement has traditionally 

entailed a two-pronged determination: first, that the interests of the proposed representatives will 

not conflict with the interests of the absent class members; second, that counsel chosen by the 

representative parties is qualified, experienced and able to vigorously conduct the proposed 

litigation. To satisfy this requirement, the proposed class representative must be free of interests 

that are antagonistic to the other members of the class, and counsel representing the class must 

be qualified, experienced, and capable of conducting the litigation. Lerwill v. Inflight Motion 

Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978); Hanlon, 150 F.3d at 1020. Further, pursuant to 

Rule 23(g), adequacy of class counsel is now considered separately from the determination of the 

adequacy of the class representatives. Both prongs of the adequacy requirement are satisfied 

here. 

The proposed Settlement Class representatives purchased Yahoo securities during the 

Settlement Class Period and have no interests antagonistic to those of the members of the 

proposed Settlement Class. The proposed representatives seek to recover from Defendants, on 

their own behalf and on behalf of all members of the Settlement Class, damages allegedly caused 

by Defendants’ unlawful conduct. The representatives’ interests are therefore congruent with 

and not antagonistic to other Settlement Class Members’ interests. 

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CASE NO. 5:17-cv-00373-LHK 20 

Rule 23(g) requires a court to assess the adequacy of proposed class counsel. To that 

end, the court must consider the following: (1) the work counsel has done in identifying or 

investigating potential claims in the action; (2) counsel’s experience in handling class actions, 

other complex litigation, and claims of the type asserted in the action; (3) counsel’s knowledge 

of the applicable law; and (4) the resources counsel will commit to representing the class. 

Aarons v. BMW of N. Am., LLC, No. CV 11-7667 PSG (CWx), 2014 U.S. Dist. LEXIS 118442, 

at *20-*21 (C.D. Cal. Apr. 29, 2014) (final approval). 

As set forth above, Lead Counsel have drafted three complaints, interviewed confidential 

witnesses, uncovered publicly available materials including unredacted Yahoo documents that 

would be presented in evidence at trial, and have negotiated zealously with Defendants’ counsel 

under and alongside the guidance of Judge Weinstein. These activities by themselves 

demonstrate a significant commitment of resources and human capital. Moreover, Lead 

Counsel’s firm resumes demonstrate that they have extensive experience in handling complex 

securities class actions and that Lead Counsel are amply capable of devoting necessary resources 

to successfully resolve this litigation for the benefit of the proposed Settlement Class. See ECF 

Nos. 13-4 & 13-5. 

E. Predominance and Superiority -- Rule 23(b)(3) 

In addition to the four requirements of Rule 23(a), a class must also satisfy one of the 

three requirements of Rule 23(b). Here, little question exists that a class action is superior to 

other available methods for litigation of the claims asserted here, as required by Rule 23(b)(3). 

To ensure that the class action is more efficient than individual actions, Rule 23(b) requires that 

common issues predominate over issues that are particular to a class representative. Generally, 

common questions will predominate if the common issue constitutes a significant part of each of 

the class members’ individual cases. Predominance exists were the class members “have more 

issues keeping them together than driving them apart.” In re Cooper Cos. Sec. Litig., 254 F.R.D. 

628, 640 (C.D. Cal. 2009) (explaining that “questions related to liability” have “primacy” over 

any theoretical defenses that “only affect certain members of the class.”). Further, “the 

superiority of class actions in large securities fraud [matters] is well recognized.” In re Intelcom 

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CASE NO. 5:17-cv-00373-LHK 21 

Grp., Inc. Sec. Litig., 169 F.R.D. 142, 149 (D. Colo. 1996). The predominance test is met in this 

action: the same set of operative facts applies to each Settlement Class Member. “The Ninth 

Circuit has repeatedly found that common issues predominate in federal securities actions where 

the proposed class members have all been injured by the same alleged course of conduct.” In re 

First Capital Holdings Corp. Fin. Prods. Sec. Litig., MDL No. 901, 1993 U.S. Dist. LEXIS 

21272, at *16-*17 (C.D. Cal. Feb. 26, 1993). Further, the fact that a class action is the superior 

method to efficiently and effectively pursue the claims alleged here is shown by the fact that if 

Plaintiffs Sutton View and Talukder, and each of the Settlement Class Members were to bring 

individual actions, they each would be required to prove the same wrongdoing by the Settling 

Defendants to establish liability. See Eisenberg v. Gagnon, 766 F.2d 770, 785 (3d Cir. 1985) 

(class actions are a particularly appropriate and desirable means to resolve claims based on 

securities laws). 

By reason of the foregoing, all of the pertinent requirements of Rule 23(a) and (b)(3) are 

satisfied. Accordingly, the Court should certify the proposed Settlement Class for settlement 

purposes only and appoint Co-Lead Plaintiff Sutton View and Named Plaintiff Talukder as the 

class representatives. 

VI. THE PROPOSED NOTICE PROGRAM IS APPROPRIATE 

The parties have negotiated the form of a Notice of Proposed Class Action Settlement 

(the “Notice”) to be disseminated to the Settlement Class to notify them of the terms of the 

Settlement and of their rights in connection therewith, as well as a Summary Notice of Proposed 

Class-Action Settlement (the “Publication Notice”), which will be published in a national 

business publication or via a national business newswire. The Notice will also be posted on the 

Settlement Administrator’s website.5 The Notice and Publication Notice have been drafted to 

comply with the provisions of the PSLRA. See 15 U.S.C. § 78u-4(a)(7). The Notice provides 

detailed information concerning: (1) the proposed Settlement; (2) the nature, history, and 

 

5

 The Notice, Publication Notice, and Proof of Claim are attached to the Stipulation as Exhibits 

B, C, and D. These documents currently contain blanks for dates to be ordered by the Court, 

which will be filled in with the appropriate dates before dissemination. 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 22 

progress of the Action; (3) the date of the Final Approval Hearing; (4) the proposed Plan of 

Allocation; (5) the fees and expenses to be sought by Plaintiffs’ Counsel; (6) the rights of 

Settlement Class Members, including the procedures for filing a Proof of Claim, requesting 

exclusion from the Settlement Class, or objecting to the Settlement or Plan of Allocation or 

request for fees and expenses; and (7) how to contact Lead Counsel, access the Court’s docket, 

or otherwise learn more about the Action and Settlement. 

Under the proposed Preliminary Approval Order, the Settlement Administrator will: 

(1) mail the Notice and Proof of Claim to all purchasers of Yahoo securities during the 

Settlement Class Period, (2) post the Notice and Proof of Claim to the Settlement 

Administrator’s website, and (3) cause the Publication Notice to be published to be published in 

a national business publication or via a national business newswire. The Settlement 

Administrator will also make additional copies of the Notice available to nominee holders such 

as brokerage firms who held Yahoo stock. Such nominee holders will be requested to forward 

copies of the Notice to all beneficial owners of such shares or, alternatively, to provide the 

Settlement Administrator with their names and addresses so the Settlement Administrator can 

mail them the Notice directly. 

Lead Counsel believes that providing the Notice by mail, along with publishing the 

Publication Notice in a national business publication or via a national business newswire and 

posting the Notice and Proof of Claim on the Settlement Administrator’s website, is the best 

notice practicable under the circumstances, is typical of the notice plans approved by courts in 

other class actions and satisfies the requirements of Rule 23 and due process. See Rannis v. 

Recchia, 380 F. App’x 646, 650 (9th Cir. 2010) (mail to last-known address of class members 

sufficient); In re Celera Corp., 2015 U.S. Dist. LEXIS 157408, at *13 (mailing notice, 

publishing summary notice, and posting on settlement-specific website sufficient). Accordingly, 

Plaintiffs respectfully request that the Court find that the Notice, Publication Notice, and the 

procedures for dissemination are “reasonably calculated, under all the circumstances, to apprise 

interested parties of the pendency of the action and afford them an opportunity to present their 

objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 23 

VII. PROPOSED SCHEDULE 

Plaintiffs respectfully propose the following schedule of events leading to the Final 

Approval Hearing as set forth in the Preliminary Approval Order in the form filed with the 

Court: 

Event Deadline for Compliance 

Deadline for mailing Notice, publication of 

Publication Notice, and posting of Notice and 

Stipulation on Settlement website (“Notice Date”) 

Twenty (20) calendar days after entry 

of the Preliminary Approval Order 

Deadline for Plaintiffs to file papers in support of 

final Settlement approval and Fee and Expense Award 

Thirty-five (35) calendar days before 

the Settlement Hearing 

Objection Deadline Twenty-one (21) calendar days before 

the Settlement Hearing 

Opt-Out Deadline Twenty-one (21) calendar days before 

the Settlement Hearing 

Deadline for Plaintiffs to file reply papers in support 

of Settlement and Fee and Expense Award and in 

response to any objections 

Seven (7) calendar days before the 

Settlement Hearing 

Deadline to submit Proofs of Claim Five (5) calendar days before the 

Settlement Hearing 

Settlement Hearing 

At the Court’s convenience, but at 

least 120 calendar days after entry of 

the Preliminary Approval Order 

CONCLUSION 

The Court should preliminarily approve the proposed Settlement by issuing the 

Preliminary Approval Order submitted herewith, certify the proposed Settlement Class for 

settlement purposes only, approve the proposed form and method of providing notice to the 

proposed Settlement Class, and set the dates for a Settlement Hearing and related deadlines. 

 

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MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT 

CASE NO. 5:17-cv-00373-LHK 24 

Dated: March 2, 2018 Respectfully submitted, 

GLANCY PRONGAY & MURRAY LLP 

By: s/ Joshua L. Crowell 

Joshua L. Crowell 

Jennifer M. Leinbach 

1925 Century Park East, Suite 2100 

Los Angeles, California 90067 

Telephone: (310) 201-9150 

Facsimile: (310) 201-9160 

jcrowell@glancylaw.com 

POMERANTZ LLP 

Jeremy A. Lieberman 

Emma Gilmore 

Michael Grunfeld 

600 Third Avenue, 20th Floor 

New York, New York 10016 

Telephone: (212) 661-1100 

Facsimile: (212) 661-8665 

jalieberman@pomlaw.com 

egilmore@pomlaw.com 

mgrunfeld@pomlaw.com 

Lead Counsel for Plaintiffs 

BRONSTEIN, GEWIRTZ 

& GROSSMAN, LLC 

Peretz Bronstein 

60 East 42nd Street, Suite 4600 

New York, NY 10165 

Telephone: (212) 697-6484 

Facsimile (212) 697-7296 

peretz@bgandg.com 

Additional Counsel for Plaintiffs 

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PROOF OF SERVICE BY ELECTRONIC POSTING 

 I, the undersigned say: 

 I am not a party to the above case, and am over eighteen years old. On March 2, 2018, I 

served true and correct copies of the foregoing document, by posting the document electronically to 

the ECF website of the United States District Court for the Northern District of California, for receipt 

electronically by the parties listed on the Court’s Service List. 

 I affirm under penalty of perjury under the laws of the United States of America that the 

foregoing is true and correct. Executed on March 2, 2018, at Los Angeles, California. 

 s/ Joshua L. Crowell 

 Joshua L. Crowell 

Case 5:17-cv-00373-LHK Document 73 Filed 03/02/18 Page 32 of 34
Mailing Information for a Case 5:17-cv-00373-LHK In Re Yahoo! Inc. Securities

Litigation

Electronic Mail Notice List

The following are those who are currently on the list to receive e-mail notices for this case.

Edward Andrew Bayley

ebayley@keker.com,laure-mandin-6675@ecf.pacerpro.com,lmandin@keker.com,efiling@keker.com,ed-bayley0392@ecf.pacerpro.com

Martha A Boersch

mboersch@boerschshapiro.com,lkollios@boerschshapiro.com,rvorkoeper@boerschshapiro.com,frizvi@boerschshapiro.com

Joshua L Crowell

jcrowell@glancylaw.com,dmanning@glancylaw.com

Jordan Eth

jeth@mofo.com,jordan-eth-3756@ecf.pacerpro.com,tkhadoo@mofo.com,trina-khadoo-5939@ecf.pacerpro.com

Emma Gilmore

egilmore@pomlaw.com

Jo W. Golub

jgolub@keker.com,mvillagra@keker.com,julie-selby-5502@ecf.pacerpro.com,sandy-giminez6735@ecf.pacerpro.com,efiling@keker.com,jselby@keker.com,molly-villagra5677@ecf.pacerpro.com,SHarmison@keker.com,jah@keker.com,jo-golub-8129@ecf.pacerpro.com

Michael Grunfeld

mgrunfeld@pomlaw.com

J Alexander Hood , II

ahood@pomlaw.com,abarbosa@pomlaw.com

Adam G. Kurtz

agkurtz@pomlaw.com

Jeremy A Lieberman

jalieberman@pomlaw.com,disaacson@pomlaw.com,abarbosa@pomlaw.com,lpvega@pomlaw.com

Judson Earle Lobdell

jlobdell@mofo.com,magdalena-blackmer-3352@ecf.pacerpro.com,judson-lobdell6493@ecf.pacerpro.com,mblackmer@mofo.com

Jennifer Pafiti

jpafiti@pomlaw.com,kmsaletto@pomlaw.com,disaacson@pomlaw.com,abarbosa@pomlaw.com

Robert Vincent Prongay

rprongay@glancylaw.com,info@glancylaw.com,bmurray@glancylaw.com

Manual Notice List

The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual

noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices

or labels for these recipients.

Jennifer Leinbach 

CAND-ECF- https://ecf.cand.uscourts.gov/cgi-bin/MailList.pl?912101799366943-L_1_0-1

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Case 5:17-cv-00373-LHK Document 73 Filed 03/02/18 Page 33 of 34
Glancy Prongay & Murray LLP

1925 Century Park East

Suite 2100

Los Angeles, CA 90067

CAND-ECF- https://ecf.cand.uscourts.gov/cgi-bin/MailList.pl?912101799366943-L_1_0-1

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