PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL 

Christopher A. Slater, OSB # 97398 

cslater@slaterross.com 

Michael J. Ross, OSB # 91410 

mjross@slaterross.com 

SLATER ROSS 

Sovereign Hotel, 4th Floor 

710 S.W. Madison Street 

Portland, Oregon 97205 

Telephone: (503) 227-2024 

Facsimile: (503) 224-7299 

 

Local Counsel for Plaintiffs 

[Additional Counsel Listed on Signature Page] 

UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

PORTLAND DIVISION 

In re GALENA BIOPHARMA INC. 

DERIVATIVE LITIGATION 

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Case No.: 3:14-cv-00382-SI 

LEAD 

3:14-cv-00514-SI 

3:14-cv-00516-SI 

3:15-cv-01465-SI 

This Document Relates To: 

ALL ACTIONS. 

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PLAINTIFFS’ UNOPPOSED MOTION 

FOR FINAL APPROVAL OF PROPOSED 

SETTLEMENT, AWARD OF AGREED-TO 

ATTORNEYS’ FEES AND 

REIMBURSEMENT OF EXPENSES, AND 

INCENTIVE AWARDS 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 1 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -iTABLE OF CONTENTS 

Page 

L.R. 7-1 CERTIFICATION ......................................................................................................... viii

MOTION...................................................................................................................................... viii

MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1

I. INTRODUCTION .................................................................................................................. 1

II. FACTUAL BACKGROUND ................................................................................................. 4

A. Procedural History of the Action ............................................................................ 4

1. The Oregon Action ..................................................................................... 4

2. The Delaware Action .................................................................................. 5

3. The Oregon Action and Delaware Action Are Coordinated ....................... 6

4. Settlement Negotiations .............................................................................. 7

B. Preliminary Approval and Notice to Galena Stockholders ..................................... 7

III. TERMS OF THE SETTLEMENT ...................................................................................... 8

A. Financial Consideration .......................................................................................... 8

B. Corporate Governance Reforms ............................................................................. 9

1. Reforms to Galena’s Option Granting Practices ......................................... 9

2. Reforms to Galena’s Corporate Governance Practices and Policies ........ 10

IV. THE SETTLEMENT IS FAIR, REASONABLE AND ADEQUATE AND 

SHOULD BE FINALLY APPROVED ............................................................................ 11

A. Legal Standard for Final Settlement Approval ..................................................... 11

B. The Settlement Confers Substantial Monetary and Non-Monetary Benefits 

Upon Galena and Current Galena Stockholders ................................................... 13

C. The Settlement Was Reached Through Arm’s-Length Bargaining with the 

Assistance of a Highly Competent and Experienced Mediator ............................ 15

D. The Strength of Plaintiffs’ Claims and the Risk of Continued Litigation ............ 16

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 2 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -iiE. The Expense, Complexity and Likely Duration of Further Litigation .................. 19

F. The Extent of Discovery Completed and the Stage of Proceedings ..................... 22

G. The Experience and Views of Counsel ................................................................. 23

H. The Reaction of Current Galena Stockholders to the Settlement ......................... 24

V. THE AGREED-TO FEE AWARD SHOULD BE FINALLY APPROVED AS FAIR 

AND REASONABLE ...................................................................................................... 25

A. Legal Standard ...................................................................................................... 26

B. The Agreed-to Fee Award Is Fair and Reasonable in Light of the Benefits 

Achieved and Awards in Similar Cases ................................................................ 27

C. The Other Ninth Circuit Factors Support the Unopposed Fee Award .................. 31

1. The Risks of Litigation ............................................................................. 31

2. The Skill Required and the Quality of Work ............................................ 31

3. The Contingent Nature of the Fee and Burdens on Plaintiffs’ 

Counsel ..................................................................................................... 32

D. The Unopposed Fee Award Is Supported by Plaintiffs’ Counsel’s Lodestar ....... 33

VI. THE INCENTIVE AWARDS SHOULD BE APPROVED ............................................. 35

VII. CONCLUSION ................................................................................................................. 35

 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 3 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -iiiTABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re AOL Time Warner S’holder Derivative Litig., 

2006 WL 2572114 (S.D.N.Y. 2006) ..................................................................................20, 23 

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

2008 U.S. Dist. LEXIS 61995 (D. Ariz. Aug. 4, 2008) ...........................................................19 

In re Apple Computer, Inc. Derivative Litig., 

2008 WL 4820784 (N.D. Cal. Nov. 5, 2006) ..........................................................................29 

Arnett v. Bank of America, N.A., 

2014 WL 4672458 (D. Or. Sept. 18, 2014) ..................................................................... passim

In re ArthroCare Corp. S’holder Litig., 

C.A. No. 9313-VCL, Settlement Hearing and Rulings of the Court 

(Del. Ch. Nov. 6, 2014)............................................................................................................29 

In re Atmel Corp. Derivative Litig., 

2010 WL 9525643 (N.D. Cal. Mar. 31, 2010) .......................................................13, 14, 16, 29 

Buccallato v. AT&T Operations, Inc., 

2011 WL 3348055 (N.D. Cal. June 30, 2011) .........................................................................34 

In re Chickie’s & Pete’s Wage and Hour Litig., 

2014 WL 911718 (E.D. Pa. Mar. 7, 2014) ...............................................................................16 

Chrysler Corp. v. Dann, 

223 A.2d 384 (Del. 1966) ........................................................................................................30 

City of Pontiac Gen. Employees’ Ret. Sys. v. Langone, 

No. 2006-cv-122304, Findings of Fact in Support of Order and Final 

Judgment (Fulton County, Ga. June 10, 2008) ........................................................................31 

Clark v. Ecolab Inc., 

2010 WL 1948198 (S.D.N.Y. May 11, 2010) .........................................................................13 

Cohen v. Beneficial Ind. Loan Corp., 

337 U.S. 541 (1949) .................................................................................................................21 

Cohn v. Nelson, 

375 F. Supp. 2d 844 (E.D. Mo. 2005)......................................................................................20 

Destefano v. Zynga, Inc., 

2016 WL 537946 (N.D. Cal. Feb. 11, 2016) ...........................................................................34 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 4 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -ivDel Monte Foods Co. S’holder Litig., 

2011 WL 2535256 (Del. Ch. June 7, 2011) .............................................................................32 

In re F5 Networks, Inc. Derivative Litig., 

No. 06-0794, Order and Final Judgment (W.D. Wash. Jan. 6, 2011) ................................ 30-31 

Frederick v. Range Res.-Appalachia, LLC, 

2011 WL 1045665 (W.D. Pa. Mar. 17, 2011) .........................................................................29 

Friedman v. Dolan, 

2015 WL 4040806 (Del. Ch. June 30, 2015) ...........................................................................18 

In re General Motors Corp. Derivative Litig., 

MDL No. 06-1749, Order Approving Settlement (E.D. Mich. Dec. 22, 2008) .......................31 

In re Global Crossing Sec. and ERISA Litig., 

225 F.R.D. 436 (S.D.N.Y. 2004) .............................................................................................21 

In re Google Inc. S’holder Derivative Litig., 

No. CV-11-04248, Order (N.D. Cal. Jan. 21, 2015) ................................................................31 

Gregg v. U.S. Indus., Inc., 

887 F.2d 1462 (11th Cir. 1989) ...............................................................................................19 

In re GSI Commerce, Inc. S’holder Litig., 

Consol. C.A. No. 6346-VCN (Del. Ch. Nov. 15, 2011) (TRANSCRIPT) ..............................28 

Harger v. Dept. of Labor, 

569 F.3d 898 (9th Cir. 2009) ...................................................................................................27 

Hensley v. Eckerhart, 

461 U.S. 424 (1983) .................................................................................................................25 

In re Infinity Broad. Corp. S’holders Litig., 

802 A.2d 285 (Del. 2002) ........................................................................................................27 

Ingram v. Coca- Cola, 

200 F.R.D. 685 (N.D. Ga. 2001) ..............................................................................................25

In re Jefferies Group, Inc. S’holders Litig., 

2015 WL 3540662 (Del. Ch. June 5, 2015) .......................................................................28, 29 

Johansen v. Combustion Eng’g., Inc., 

170 F.3d 1320 (11th Cir. 1999) ...............................................................................................19 

Kamen v. Kemper Fin. Servs., 

500 U.S. 90 (1991) ...................................................................................................................11 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 5 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -vKlein v. City of Laguna Beach, 

810 F.3d 693 (9th Cir. 2016) ...................................................................................................27 

In re Lloyd’s Am. Trust Fund Litig., 

2002 WL 31663577 (S.D.N.Y. Nov. 26, 2002) .......................................................................17 

Maher v. Zapata Corp., 

714 F.2d 436 (5th Cir. 1983) ...................................................................................1, 17, 21, 30 

MCI Commc’ns Corp. v. Am. Tel. & Tel. Co., 

708 F.2d 1081 (7th Cir. 1983) .................................................................................................19 

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

213 F.3d 454 (9th Cir. 2000) .............................................................................................22, 23 

In re MRV Commc’ns, Inc. Derivative Litig., 

2013 WL 2897874 (C.D. Cal. June 6, 2013) ................................................................... passim

In re NVIDIA Corp. Derivative Litig., 

2009 U.S. Dist. LEXIS 24973 (N.D. Cal. Dec. 22, 2008) ............................................... passim

Officers for Justice v. Civil Serv. Comm’n, 

688 F.3d 615 (9th Cir. 1992) .......................................................................................12, 13, 25 

In re Omnivision Techs., Inc., 

559 F. Supp. 2d 1036 (N.D. Cal. 2008) .............................................................................17, 24 

In re Pac. Enters. Sec. Litig., 

47 F.3d 373 (9th Cir. 1995) .................................................................................................1, 16 

Plumbers Local No. 137 Pension Fund v. Davis, 

2012 WL 104776 (D. Or. Jan. 11, 2012) .................................................................................11 

Prezant v. DeAngelis, 

636 A.2d 915 (Del. 1994) ..................................................................................................11, 12 

In re Rambus Inc. Derivative Litig., 

2009 WL 166689 (N.D. Cal. Jan. 20, 2009) ......................................................................14, 26 

Ret. Sys. v. Citrix Sys, Inc., 

2001 WL 1131364 (Del. Ch. Sept. 19, 2001) ..........................................................................26 

Roberti v. OSI Sys., Inc., 

2015 WL 8329916 (C.D. Cal. Dec. 8, 2015) ...............................................................24, 33, 34 

Ryan v. Gifford, 

2009 WL 18143 (Del. Ch. Jan. 2, 2009) ......................................................................13, 14, 20 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 6 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -viRyan v. Gifford, 

935 A.2d 258 (Del. Ch. 2007)..................................................................................................18 

Seinfeld v. Coker, 

847 A.2d 330 (Del. Ch. 2000)..................................................................................................34 

Seinfeld v. Robinson, 

246 A.D.2d 291 (N.Y. App. 1st Dep’t 1998) ...........................................................................30 

Silverberg v. Gold, 

2013 WL 6859282 (Del. Ch. Dec. 31, 2013) ...........................................................................19 

In re SmithKline Beckman Corp. Sec. Litig., 

751 F. Supp. 525 (E.D. Pa. 1990) ............................................................................................20

In re Tyson Foods, Inc. Consol. S’holder Litig., 

919 A.2d 563 (Del. Ch. 2007)............................................................................................18, 28 

Unite Nat’l Ret. Fund v. Watts, 

2005 WL 2877899 (D.N.J. Oct. 29, 2005)...............................................................................31 

Unitrin, Inc. v. Am. Gen. Corp., 

651 A.2d 1361 (Del. 1995) ......................................................................................................27 

Velez v. Novartis Pharm., 

2010 WL 4877852 (S.D.N.Y. Nov. 30, 2010) .........................................................................21 

Villanueva v. Morpho Detection, Inc., 

2015 WL 4760464 (N.D. Cal. Aug. 12, 2015) ........................................................................15 

Vizcaino v. Microsoft Corp., 

290 F.3d 1043 (9th Cir. 2002) ...............................................................................27, 28, 33, 34 

In re Warner Commun’s Sec. Litig., 

618 F. Supp. 735 (S.D.N.Y. 1985), aff’d, 798 F.2d 35 (2d Cir. 1986) ....................................32 

Warner v. Lesar, 

No. 2011-09567, Order Approving Settlement and Judgment 

(Tex. Dist. Ct., Harris Cnty. Oct. 1, 2012) ...............................................................................31 

Young v. Polo Retail, LLC, 

2007 WL 951821 (N.D. Cal. Mar. 8, 2007) .............................................................................33 

Statutes 

8 Del. C. § 102(b)(7) ......................................................................................................................17 

8 Del. C. § 220 .................................................................................................................................5 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 7 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -viiRules 

Fed. R. Civ. P. 23.1(c) ...................................................................................................................11 

Other Authorities 

Deutsche Bank, Beyond the Numbers, Materiality of Corporate Governance 

(2005) .......................................................................................................................................15 

Lawrence D. Brown & Marcus L. Caylor, Corporate Governance and Firm 

Performance (2004) .................................................................................................................15 

McKinsey & Company, Global Investor Opinion Survey on Corporate 

Governance (2002) ..................................................................................................................15 

McKinsey & Company, Putting a Value on Board Governance (1996) .......................................15 

Paul A. Gompers, et al., Corporate Governance and Equity Prices, 

Q.J. ECON. 118(1) (2003) .......................................................................................................15 

 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 8 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -viiiL.R. 7-1 CERTIFICATION 

Pursuant to Local Rule 7-1, counsel for all parties have conferred. No party opposes the 

relief requested in the underlying Motion. 

MOTION 

Plaintiffs Jeffrey Klein (“Klein”), David W. Fuhs (“Fuhs”), Pratik Rathore (“Rathore”), 

and Harold Spradling (“Spradling” and collectively with Klein, Fuhs, and Rathore, “Plaintiffs”), 

respectfully submit this unopposed motion for an order finally approving the proposed settlement 

of the above-captioned stockholder derivative action (the “Action”), the award of agreed-to 

attorneys’ fees and reimbursement of expenses pursuant to Federal Rule of Civil Procedure 54, 

and incentive awards for certain of the Plaintiffs (the “Motion”). This unopposed Motion is 

based on the following Memorandum of Points and Authorities submitted in support thereof; the 

Declaration of Brett D. Stecker in support thereof (“Stecker Decl.”) and the exhibits attached 

thereto; the pleadings, records, and papers on file in this Action; such other papers as may be 

filed at or before the hearing on this Motion; and oral argument of counsel and any other matters 

that properly may be brought before the Court. 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 9 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL 

MEMORANDUM OF POINTS AND AUTHORITIES 

I. INTRODUCTION 

Plaintiffs and Plaintiffs’ Counsel are very pleased to present this Settlement1 for the 

Court’s final approval. As stated by the U.S. Court of Appeals for the Ninth Circuit, “the odds of 

winning [a] derivative lawsuit [are] extremely small” because “derivative lawsuits are rarely 

successful.”2

 Plaintiffs and Plaintiffs’ Counsel respectfully submit that this Settlement represents 

the “rare” example of a successful derivative suit because it recoups a significant amount of the 

alleged damages and is an excellent result for Galena and Current Galena Stockholders. 

The Settlement fully resolves this Action brought derivatively under Delaware law on 

behalf of nominal defendant Galena against certain of Galena’s current and former officers and 

directors for alleged breaches of fiduciary duties, unjust enrichment and other misconduct.3

 

Specifically, the Action arises from allegations that certain officers and/or directors of Galena 

secretly hired a stock promotion firm to “pump up” Galena’s stock price, so that they could later 

sell Galena stock while in possession of non-public information and at a time when Galena stock 

was trading at artificially inflated prices. Plaintiffs also allege that certain of Galena’s directors 

used inside information to improperly grant stock options to themselves and fellow officers 

 

1

 Unless otherwise indicated, all capitalized terms shall have the same definitions as set forth in 

the Amended Stipulation and Agreement of Settlement dated February 1, 2016 (the 

“Stipulation”) and filed with the Court on the same day. 

2 In re Pac. Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (affirming approval of 

derivative settlement); accord Maher v. Zapata Corp., 714 F.2d 436, 455 (5th Cir. 1983) 

(“Settlements of shareholder derivative actions are particularly favored because such litigation 

is ‘notoriously difficult and unpredictable.’”). 

3

 The Settlement also resolves related derivative litigation pending in Multnomah County Circuit 

Court, captioned Fagin v. Ahn, et al., No. 140202384 (Or. Cir. Ct.) and Zhang v. Hillsberg, et al., 

No. 140403987 (Or. Cir. Ct.). In a February 4, 2016 letter, the plaintiffs to those actions 

informed this Court that they “agreed to coordinate [their] efforts with [Plaintiffs]” in this Action 

and supported Plaintiffs’ motion for preliminary approval. 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 10 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -2- 

and/or directors which violated Delaware law because such options were spring-loaded, i.e., 

granted just prior to the release of material information that was reasonably expected to drive the 

market price of Galena stock higher, and also failed to comply with the statutory requirements of 

the Delaware General Corporation Law (“DGCL”). The Settlement is the culmination of more 

than two years of contentious litigation and extensive, arm’s-length settlement negotiations 

amongst experienced counsel for the Parties with the substantial assistance and oversight of an 

experienced mediator, the Honorable Layn R. Phillips (Ret.). 

The Settlement is eminently fair, reasonable and adequate to Galena and Current Galena 

Stockholders, as it confers both substantial monetary and non-monetary benefits on Galena. 

Plaintiffs respectfully submit that this is an uncommonly good result, as most derivative 

settlements typically only include therapeutic relief, and have no financial component. First, the 

Settlement requires the payment of $15 million to Galena by its D&O insurance carriers. In 

addition, as part of the Settlement, a total of 1.2 million stock options which Plaintiffs allege 

were improperly granted to the director defendants have been cancelled in their entirety. Further, 

defendant Mark J. Ahn (“Ahn”), Galena’s former Chief Executive Officer (“CEO”), forfeited 

over $800,000 of contractual severance payments due to him and over 1.1 million stock options 

with an intrinsic value of approximately $503,062. In total, the Settlement provides Galena with 

financial consideration worth over $16.3 million, which represents approximately 43% of the 

Company’s reported cash and cash equivalents as of February 2016. 

Second, the Settlement requires the implementation of significant corporate governance 

reforms at Galena specifically designed to protect against future instances of wrongdoing as 

alleged in the Action. These measures include reforms to Galena’s stock option granting 

practices, the appointment of a new independent director, reforms to the Board and management 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 11 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -3- 

structure and policies, the adoption of a formal Enterprise Risk Management (“ERM”) program, 

and other reforms designed to make Galena’s officers and directors more effective and 

responsive fiduciaries. In sum, the Settlement is an outstanding package of relief that provides 

Galena with substantial and immediate financial benefits as well as significant non-monetary 

benefits which will provide value to Galena and its stockholders for years to come. Accordingly, 

the Settlement, negotiated at arm’s-length and in good faith by the Parties, deserves final 

approval by this Court as it is undoubtedly fair, reasonable and adequate. 

As part of the Settlement and in recognition of the substantial benefits conferred by 

Plaintiffs’ Counsel on Galena and Current Galena Stockholders, the Parties, with the assistance 

of Judge Phillips, negotiated the amount of attorneys’ fees and expenses that Galena would pay 

to Plaintiffs’ Counsel. As a result of those negotiations, the Parties accepted Judge Phillips’ 

mediator’s proposal, and with the approval of the Board in an exercise of its independent 

business judgment, Galena has agreed to pay Plaintiffs’ Counsel $5 million for their fees and 

expenses. The Fee Award was negotiated after the principal terms of the settlement were agreedto and will be paid by Galena’s D&O insurance carriers. The Fee Award is being paid separate 

and apart from the $15 million payment to the Company, thus bringing the total financial benefit 

of the Settlement to more than $21 million. The agreed-to Fee Award is clearly supported by 

Plaintiffs’ Counsel’s significant results achieved through their investigation, litigation and 

negotiation of the Settlement. Additionally, the nominal Incentive Awards in the amount of 

$5,000 each are respectfully requested for certain Plaintiffs identified below, payable from the 

Fee Award. As of the date of this submission, Plaintiffs’ Counsel are unaware of any objections 

to the Settlement, the Fee Award or Incentive Awards, which is indicative of their fairness and 

reasonableness. 

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PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -4- 

For all the reasons set forth herein, including the outstanding results obtained for Galena 

and Current Galena Stockholders, Plaintiffs respectfully submit that the Court should finally 

approve the Settlement, including the negotiated Fee Award, as it is undoubtedly fair, reasonable 

and adequate in light of the substantial benefits that flow to Galena and as compared with the 

significant challenges faced by Plaintiffs from the continued prosecution of the Action, and the 

potential recovery that could have possibly been achieved at any trial. 

II. FACTUAL BACKGROUND 

A. Procedural History of the Action 

1. The Oregon Action 

The Oregon Action was initiated in this Court in March 2014 when the Oregon Plaintiffs 

filed complaints on behalf of Galena alleging breaches of fiduciary duty against the Board which 

were later consolidated on April 11, 2014. See Stecker Decl. ¶22. Defendants filed the Motion 

to Dismiss the Oregon Action that was subsequently withdrawn by Defendants. Id. On June 10, 

2014, the Oregon Plaintiffs filed an amended complaint. Id. ¶23. On September 11, 2014, 

Galena filed the Motion to Stay, which the Court denied on October 22, 2014. Id. ¶¶23-24. 

Defendants filed the Second Motion to Stay, pending the resolution of the Federal 

Securities Action4

 and in deference to the Delaware Action. Id. ¶25. Simultaneously, 

Defendants filed the Second Motion to Dismiss the Oregon Action. Id. On February 4, 2015, 

the Court entered orders and opinions granting in part and denying in part the Second Motion to 

Dismiss and Second Motion to Stay. Id. ¶26. In response to the Second Motion to Stay, the 

Court declined to stay the Oregon Action in favor of the related Delaware Action, but 

temporarily stayed discovery pending the Court’s decision on the motion to dismiss in the 

 

4

 The Federal Securities Action refers to the case currently pending in the Federal Court 

captioned In Re Galena Biopharma, Inc. Secs. Litig., No 14-cv-00367-SI (D. Or.). 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 13 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -5- 

Federal Securities Action. Id. The Court also declined to dismiss the majority of the claims 

challenged in the Second Motion to Dismiss and granted the Oregon Plaintiffs leave to amend 

the claims that were dismissed. Id. The Oregon Plaintiffs filed their Verified Second Amended 

Consolidated Shareholder Derivative Complaint on March 6, 2015. Id. 

2. The Delaware Action 

In March 2014, the Delaware Plaintiffs each served separate demands pursuant to 8 Del. 

C. § 220 (“Section 220”) to inspect Galena’s books and records related to stock option grants 

made to certain insiders in November 2013, stock sales made by certain insiders in January 2014, 

and related matters. Id. ¶27. On March 18, 2014, Plaintiff Fuhs filed the 220 Action in the 

Delaware Court of Chancery, and from April 14, 2014 to May 29, 2014, Galena produced on a 

rolling basis documents responsive to the 220 Demands. Id. Ultimately, Galena produced 

approximately 4,660 pages of documents. Id. 

On June 20, 2014, the Delaware Plaintiffs filed a Verified Stockholder Derivative 

Complaint in the Delaware Court of Chancery on behalf of Galena, alleging breaches of 

fiduciary duty by Galena’s officers and directors. Id. ¶28. On August 12, 2014, Galena filed the 

Delaware Stay Motion and thereafter the Delaware Plaintiffs stipulated to a stay of the Delaware 

Action until November 24, 2014, which the Delaware Court of Chancery granted on October 13, 

2014. Id. On November 14, 2014, after this Court declined to stay the proceedings before it 

based on the SLC investigation, the Delaware Plaintiffs filed a motion seeking to vacate the stay 

of the Delaware Action under their reservation of rights in the Stay Order. Id. ¶29. The 

Delaware Plaintiffs agreed to voluntarily dismiss the Delaware Action and to file a complaint in 

this Court in order to coordinate their efforts with the Oregon Plaintiffs. Id. ¶30. Fuhs and 

Spradling voluntarily dismissed the Delaware Action in February 2015. Id. 

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PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -6- 

3. The Oregon Action and Delaware Action Are Coordinated 

On August 4, 2015, Plaintiffs Fuhs and Spradling filed a Verified Stockholder Derivative 

Complaint and an Unopposed Motion to File Verified Stockholder Derivative Complaint Under 

Seal in order to consolidate their action with the Oregon Action. Id. The Court consolidated the 

pending actions on August 19, 2015, and, on August 31, 2015, the Court granted Plaintiffs’ 

Unopposed Motion to File the operative Complaint. Id. 

Plaintiffs filed the Complaint on August 28, 2015 which alleges, inter alia, that Galena’s 

directors and senior officers unlawfully abused their positions as fiduciaries of Galena for their 

own personal financial gain. Id. ¶31. Specifically, the Complaint alleges that the Individual 

Defendants manipulated and artificially pumped up Galena’s stock price in order to later dump a 

significant portion of their Galena stock, including improperly granted stock option awards, 

when Galena stock was trading at artificially inflated prices. Id. The Complaint also alleges that 

the Individual Defendants improperly used inside information to spring-load stock options to 

themselves, i.e., options that are granted just prior to a company’s release of material information 

reasonably expected to drive the market price of the shares higher, and in their haste to grant the 

options, failed to comply with the requirements of the DGCL. Id. The Complaint alleges seven 

counts: (1) breach of fiduciary duty for disseminating false and misleading information; (2) 

invalidity of stock options; (3) breach of fiduciary duty for insider selling and/or granting springloaded stock option awards; (4) unjust enrichment in connection with insider selling and/or 

receipt of spring-loaded stock options; (5) breach of fiduciary duty in connection with the 

enactment and attempted enforcement of the forum selection clause; (6) breach of fiduciary duty 

in connection with excessive 2013 stock option awards and cash compensation to the outside 

directors; and (7) unjust enrichment in connection with excessive 2013 stock option awards. Id. 

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PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -7- 

4. Settlement Negotiations 

On May 8, 2015, in advance of the Mediation to be held before Judge Phillips, Plaintiffs 

sent a joint settlement demand to Defendants. Id. ¶32. As a precondition to attending the 

Mediation, Plaintiffs required Defendants to produce certain non-public documents, including 

documents produced to the U.S. Securities and Exchange Commission (“SEC”) and reviewed by 

the Board’s Special Committee and SLC. Id. As a result, Defendants produced nearly 24,000 

documents (totaling approximately 53,000 pages) to Plaintiffs. Id. The full-day Mediation took 

place in New York City on September 19, 2015. Id. ¶33. While the Mediation did not result in a 

resolution of the Action, the Parties’ submissions and other communications in connection with 

the Mediation served as the basis for subsequent negotiations, also overseen by Judge Phillips. 

Id. With the substantial assistance of Judge Phillips, the Parties reached an agreement in 

principle to settle the Oregon Action and executed a term sheet dated December 4, 2015 and 

subsequently negotiated and executed the Stipulation on February 1, 2016. Id. 

B. Preliminary Approval and Notice to Galena Stockholders 

On February 4, 2016, the Court entered the Preliminary Approval Order preliminarily 

approving the Settlement and approving the proposed Notice and Summary Notice. Id. ¶5; 

Preliminary Approval Order [ECF No. 115]. The Court also set an April 7, 2016 deadline for 

any Current Galena Stockholder to object to the Settlement. Id. Pursuant to the terms of the 

Stipulation, and in accordance with the Preliminary Approval Order, Galena: (i) filed with the 

SEC a Form 8-K on February 16, 2016 that contains the contents of the Summary Notice, 

attached a copy of the Stipulation to the 8-K and provided a link in the 8-K to the Stipulation and 

Notice that is posted on the Investor Relations portion of Galena’s website; (ii) issued a press 

release that contains the contents of the Summary Notice on February 16, 2016; and (iii) 

published a copy of the Summary Notice one time in Investor’s Business Daily, The Oregonian, 

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and The Wall Street Journal on February 17, 2016. Id. The Notice and Summary Notice set 

forth, inter alia, the date and location of the final Settlement Hearing, the history of the Action, 

the Parties’ contentions, the reasons for the Settlement, the claims that will be released if the 

Settlement is approved, the Fee Award and Incentive Awards sought by Plaintiffs’ Counsel, the 

procedure for objecting to the Settlement, including objecting to the Fee Award and Incentive 

Awards, and the deadline to file such objections. See Preliminary Approval Order, Exhibits C 

and D. As of the date of this submission, Plaintiffs’ Counsel is unaware of any objections. Id.

III. TERMS OF THE SETTLEMENT 

A. Financial Consideration 

The Settlement includes several valuable financial components. First, the Settlement 

requires a $15 million cash payment to be paid to Galena by the Individual Defendants’ D&O 

insurance carriers. See Stipulation ¶2.1. Second, the Settlement requires the cancellation of 1.2 

million challenged stock options granted to director defendants Hillsberg, Kriegsman, Nisi, 

Galliker, Chin and Ashton. Id at ¶2.2. Third, defendant Ahn, Galena’s former CEO, forfeited 

the following benefits as part of the Settlement: (1) $600,000 in salary; (2) $250,000 in bonus; 

(3) 1,181,250 stock options with an intrinsic value of approximately $503,062 (as of August 21, 

2014, the date of the public announcement of Ahn’s resignation); and (4) health related costs 

valued between $24,000 and $30,000. Id at ¶2.4. Finally, as part of the Settlement, Galena 

agreed to cancel the outstanding stock options awarded to Lidingo5

 in August 2013. Id. at ¶2.4. 

 

5

 On September 25, 2014, Galena issued the Special Committee’s report publicly, which 

concluded, inter alia, that Lidingo “paid bloggers to write promotional articles about Galena and 

that the Company was aware of this fact” and that in August 2013, Lidingo was granted 250,000 

Galena stock options as compensation, in violation of Galena’s policies. According to the 

Special Committee report, as of July 15, 2014, Lidingo had over 100,000 options outstanding. 

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B. Corporate Governance Reforms 

In addition to the significant and immediate financial benefits Galena will receive as a 

result of the Settlement, the Settlement provides for valuable corporate governance reforms 

which are specifically tailored to address the allegations in the Action and to improve Galena’s 

overall corporate governance structure. See Stipulation ¶2.3, Exhibit A. 

1. Reforms to Galena’s Option Granting Practices 

The Settlement includes significant reforms to Galena’s stock option granting practices 

which are specifically designed to prevent the type of wrongdoing that gave rise to the Action. 

For example, the Settlement requires options to be granted on pre-set dates that will be 

determined prior to the end of the first quarter of the calendar year in which the options are to be 

granted, and the Compensation Committee must disclose to Galena stockholders the methods 

used to determine those pre-set dates in the fiscal year’s proxy statement in which the method is 

established. See Stipulation, Exhibit A at I.A. The granting of options on pre-set dates will not 

only help prevent spring-loading in the future, but also will help prevent other types of potential 

misconduct relating to the manipulation of option grants. The other reforms to the option 

granting practices include: 

 Prohibiting stock option grants from being made through unanimous written consent 

(Stipulation, Exhibit A at I.B); 

 Requiring the Compensation Committee to determine grantees, amounts, dates and 

prices of stock options and prohibiting changes after the grant is approved 

(Stipulation, Exhibit A at I.C); 

 Requiring outside counsel or the Company’s General Counsel to participate in any 

Board or committee meetings at which stock options are granted and meeting minutes 

to be drafted and circulated within 30 days following the meeting (Stipulation, 

Exhibit A at I.D); 

 Requiring the exercise price of stock options to be no less than the Company’s 

closing stock price on the grant date (Stipulation, Exhibit A at I.E); 

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 Prohibiting the lowering of exercise prices or exchanging options with lower exercise 

prices (Stipulation, Exhibit A at I.F); 

 Requiring strict record keeping with respect to option grants (Stipulation, Exhibit A at 

I.G); and 

 Prohibiting the right to extend vesting of stock options or otherwise modify the terms 

of the grant unless specific criteria are met (Stipulation, Exhibit A at I.H). 

2. Reforms to Galena’s Corporate Governance Practices and 

Policies 

The Settlement further includes reforms to various segments of Galena’s corporate 

governance practices and policies. For example, the Settlement implements changes at the 

Board level, including: (1) the appointment of one new independent director as of the 2016 

Annual Meeting (Stipulation, Exhibit A at II.N); (2) revisions to the Audit Committee Charter 

(Stipulation, Exhibit A at II.D and I); and (3) the appointment of a new chair of the 

Compensation Committee (Stipulation, Exhibit A at III.E). As a result of the Settlement, Board 

approval is required for all contracts greater than $200,000 as the matrix for the authority to 

conduct business was modified (Stipulation, Exhibit A at III.A). 

The Settlement also includes reforms to Galena’s management, including the 

appointment of a new CEO (Stipulation, Exhibit A at III.D) and the hiring of a new General 

Counsel, Tom Knapp (Stipulation, Exhibit A at III.C). The new General Counsel has additional 

oversight responsibilities as a result of the Settlement, including serving as Galena’s Trading 

Compliance Officer pursuant to Galena’s Insider Trading Policy (Stipulation, Exhibit A at II.A-B 

and F). 

Finally, the Settlement requires reforms to Galena’s Insider Trading Policy (Stipulation, 

Exhibit A at II.A-B), the adoption of a formal ERM program, which will identify and address 

corporate risk (Stipulation, Exhibit A at II.C), training for personnel in the areas associated with 

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IR/PR cross-functionality (Stipulation, Exhibit A at II.J), the retention of an independent 

Compensation Consultant (Stipulation, Exhibit A at II.L) and the deletion of Galena’s forum 

selection clause in its bylaws (Stipulation, Exhibit A at II.O). 

The Settlement’s prophylactic governance reforms allow Galena not only to offer more 

transparency to investors, but also help the Company avoid future litigation. Together, the 

financial benefits and governance reforms achieved by Plaintiffs through this Settlement are 

considerable and will provide immediate relief in addition to ongoing valuable benefits to Galena 

and its stockholders for years after this Settlement is approved. In sum, the Settlement confers 

substantial benefits upon Galena and Current Galena Stockholders and is a very favorable 

resolution for Galena of derivative litigation of substantial complexity. 

IV. THE SETTLEMENT IS FAIR, REASONABLE AND ADEQUATE AND 

SHOULD BE FINALLY APPROVED 

A. Legal Standard for Final Settlement Approval 

“There is a strong policy favoring compromises that resolve litigation, and case law in the 

Ninth Circuit reflects that strong policy.” In re NVIDIA Corp. Derivative Litig., 2009 U.S. Dist. 

LEXIS 24973, at *6 (N.D. Cal. Dec. 22, 2008).6

 “There is an overriding public interest in 

settling and quieting litigation.” Id. “Because shareholder derivative actions are notoriously 

difficult and unpredictable . . . settlements are favored.” Id. 

Fed. R. Civ. P. 23.1(c) requires court approval of a settlement of a derivative action. Fed. 

R. Civ. P. 23.1(c); In re MRV Commc’ns, Inc. Derivative Litig., 2013 WL 2897874, at *2 (C.D. 

Cal. June 6, 2013); Prezant v. DeAngelis, 636 A.2d 915, 921-22 (Del. 1994).7

 The general 

 

6

 All citations and internal quotations marks are omitted and emphasis is supplied herein, unless 

otherwise indicated. 

7 Galena is subject to Delaware corporate law, which set the substantive law in this Action. 

Kamen v. Kemper Fin. Servs., 500 U.S. 90 (1991). Courts in this district look to Delaware law 

on corporate law issues. See Plumbers Local No. 137 Pension Fund v. Davis, 2012 WL 104776, 

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standard for final approval of a proposed derivative settlement is whether the settlement is 

“fundamentally fair, adequate and reasonable.” Id. The Ninth Circuit considers the following 

factors in evaluating the fairness of a derivative settlement: (1) the strength of the plaintiff’s 

case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the amount 

offered in settlement; (4) the extent of discovery completed and the stage of the proceedings; (5) 

the experience and views of counsel; and (6) the reaction of the stockholders to the proposed 

settlement. NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *8-9 (citing Officers for Justice v. Civil 

Serv. Comm’n, 688 F.3d 615, 625 (9th Cir. 1992)); MRV, 2013 WL 2897874, at *2.

8

 “[These] 

factors are not exclusive, and one factor may deserve more weight than the others depending on 

the circumstances. In some instances, one factor alone may prove determinative in finding 

sufficient grounds for court approval.” MRV, 2013 WL 2897874, at *2. The Ninth Circuit has

cautioned that: 

“the settlement or fairness hearing is not to be turned into a trial or 

rehearsal for trial on the merits. Neither the trial court nor this court is to 

reach any ultimate conclusions on the contested issues of fact and law 

which underlie the merits of the dispute, for it is the very uncertainty of 

outcome in litigation and avoidance of wasteful and expensive litigation 

that induce consensual settlements. The proposed settlement is not to be 

judged against a hypothetical or speculative measure of what might have 

been achieved by the negotiators.” 

Officers for Justice, 688 F.3d at 625 (emphasis in original). Therefore, in exercising its 

discretion, “the court’s intrusion upon what is otherwise a private consensual agreement 

negotiated between the parties to a lawsuit must be limited to the extent necessary to reach a 

 

at *3 n.3 (D. Or. Jan. 11, 2012). Accordingly, Plaintiffs rely on both Delaware and federal 

authority throughout this Motion. 

8

 Because this Action is a derivative action, rather than a class action, Plaintiffs’ analysis will 

disregard two of the factors - the risk of maintaining class action status throughout the trial and 

the presence of a governmental participant - as they are inapplicable to the case sub judice. 

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reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion 

between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and 

adequate to all concerned.” Officers for Justice, 688 F.2d at 625. “Absent fraud or collusion, 

[courts] should be hesitant to substitute [their] judgment for that of the parties who negotiated the 

settlement.” Clark v. Ecolab Inc., 2010 WL 1948198, at *4 (S.D.N.Y. May 11, 2010). 

Based upon the record in this Action and the valuable monetary and non-monetary relief 

achieved by Plaintiffs in the Settlement for the benefit of the Company, these factors weigh 

squarely in favor of granting final approval of the Settlement. 

B. The Settlement Confers Substantial Monetary and Non-Monetary 

Benefits Upon Galena and Current Galena Stockholders 

“The principal factor to be considered in determining the fairness of a settlement 

concluding a shareholders’ derivative action is the extent of the benefit to be derived from the 

proposed settlement by the corporation, the real party in interest.” In re Atmel Corp. Derivative 

Litig., 2010 WL 9525643, at *12 (N.D. Cal. Mar. 31, 2010). As a result of the filing, prosecution 

and settlement of this Action, the Individual Defendants’ D&O insurance carrier has made a $15 

million payment to Galena, defendant Ahn forfeited over $1.3 million in salary, bonus and stock 

options, the director defendants forfeited a total of 1.2 million stock options, and outstanding 

stock options awarded to Lidingo will be cancelled. See Stipulation ¶¶2.1, 2.2, 2.4. The 

financial relief to Galena is substantial, immediate, and certain, and will be available much 

sooner than any potential judgment if the Action proceeded to trial. See, e.g., Ryan v. Gifford, 

2009 WL 18143, at *10 (Del. Ch. Jan. 2, 2009) (approving settlement of derivative action which 

provided financial relief for the company, because financial relief “provides benefits to [the 

company] that are substantial and certain.”); see also NVIDIA, 2009 U.S. Dist. LEXIS 24973, at 

*6, 11 (approving derivative settlement that provided for, among other things, “significant 

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financial benefits valued at $15.8 million,” including a cash payment of $8 million); Atmel, 2010 

WL 9525643, at *12 (approving derivative settlement providing for “a cash payment of $9.65 

million to Atmel” which “exceeds the average recovery in shareholder derivative litigation”). 

As part of the Settlement, Galena is also required to implement a comprehensive series of 

important and meaningful corporate governance reforms. See Stipulation, Exhibit A. These 

reforms are directly related and responsive to the allegations and claims asserted in the Action. 

Specifically, the option granting reforms will allow Galena to continue using stock options to 

incentivize and reward performance of Galena employees, while ensuring that the award process 

is governed by specific criteria which are transparent, i.e., granted on pre-set dates, disclosed to 

stockholders and in accord with proper granting practices.9

 The various other reforms at both the 

Board and management levels will leave Galena as a better-governed company with stronger 

internal controls and greater independent oversight, and are designed to make Galena’s directors 

and officers more effective representatives of the stockholders. These reforms confer substantial 

benefits upon Galena and Current Galena Stockholders and, importantly, could not have been 

obtained even if Plaintiffs prevailed at trial. See, e.g., NVIDIA, 2009 U.S. Dist. LEXIS 24973, at 

*11; MRV, 2013 WL 2897874, at *4; In re Rambus Inc. Derivative Litig., 2009 WL 166689, at 

*3 (N.D. Cal. Jan. 20, 2009). While it is difficult to assign a specific monetary value to these 

reforms, similar reforms have formed the basis of many derivative settlements and expert studies 

have long shown that strong corporate governance increases the market value of a company and 

 

9 See Ryan, 2009 WL 18143, at *10 (recognizing that the company “will also receive the 

benefit of substantial corporate governance changes designed to address the problems that led to 

the backdating of options. These changes are designed to assure that Maxim’s options grant 

process is transparent and properly monitored, while still providing Maxim with the flexibility to 

use options to incentivize its employees.”); Atmel, 2010 WL 9525643, at *12 (“these [corporate 

governance] reforms are designed to prevent future improperly backdated options as well as 

other acts of corporate misbehavior. . . at the very least, potential buyers of Atmel stock likely 

will view such reforms as an additional reason to purchase the stock.”). 

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that “the influence of corporate governance standards on a company’s long-term equity 

performance is beyond doubt.”10 

In short, the Settlement is an outstanding resolution for Galena and Current Galena 

Stockholders in a case of substantial complexity and cost, and it provides Galena immediate 

monetary benefits and strong governance and compliance enhancements which will help the 

Company avoid future litigation. Thus, the Settlement should be approved. 

C. The Settlement Was Reached Through Arm’s-Length Bargaining 

with the Assistance of a Highly Competent and Experienced Mediator 

A settlement enjoys a presumption of fairness if it “is recommended by ... counsel after 

arm’s-length bargaining.” Villanueva v. Morpho Detection, Inc., 2015 WL 4760464, at *6 (N.D. 

Cal. Aug. 12, 2015). See also MRV, 2013 WL 2897874, at *2 (“The involvement of experienced 

[ ] counsel and the fact that the settlement agreement was reached in arm’s length negotiations, 

after relevant discovery ha[s] taken place create a presumption that the agreement is fair.”). 

Here, the Settlement was reached after extensive arm’s-length negotiations between 

sophisticated counsel for the Parties. These negotiations began approximately 15 months ago, 

and included Plaintiffs’ review of approximately 24,000 non-public documents (53,000 pages) in 

advance of the Mediation, a full-day in-person mediation session with Judge Phillips, a well-

 

10 Deutsche Bank, Beyond the Numbers, Materiality of Corporate Governance (2005). See also

Lawrence D. Brown & Marcus L. Caylor, Corporate Governance and Firm Performance (2004) 

(concluding that “poorly governed firms... have lower operating performance, lower valuations, 

and pay out less cash to their shareholders, while better governed firms have higher operating 

performance, higher valuations, and pay out more cash to their shareholders”); Paul A. Gompers, 

et al., Corporate Governance and Equity Prices, Q.J. ECON. 118(1), at 107-155 (2003) (finding 

that firms with stronger governance traded at a “corporate governance premium” and had higher 

firm value, higher profits, higher sales growth, and lower capital expenditures); McKinsey & 

Company, Global Investor Opinion Survey on Corporate Governance (2002) (finding that 75% 

of institutional investors responded to a survey stating that board practices are at least as 

important to them as financial performance and 80% responding that they would pay more for a 

company with good governance than bad governance); McKinsey & Company, Putting a Value 

on Board Governance, (1996) (concluding that institutional investors were willing to pay an 

average of 11% more for well governed companies).

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respected and experienced mediator who is well-versed in the field of complex stockholder 

litigation, and numerous telephonic follow-up meetings with Judge Phillips for several months 

following the Mediation. See Stecker Decl. ¶17. Indeed, “Judge Phillips’ participation weighs 

considerably against any inference of a collusive settlement.” Atmel, 2010 WL 9525643, at *13. 

This factor thus weighs in favor of approving the Settlement. See, e.g., MRV, 2013 WL 

2897874, at *5 (derivative settlement finally approved where “the negotiations and mediation 

were conducted at arm’s-length and were in no way collusive”); NVIDIA, 2009 U.S. Dist. LEXIS 

24973, at *10-11 (approving settlement where “the parties engaged in significant negotiations, 

including at least four formal mediation sessions, and the parties were assisted by an experienced 

mediator in reaching the Settlement,” which “weighs considerably against any inference of a 

collusive settlement”); Atmel, 2010 WL 9525643, at *13 (“the involvement of multiple counsel 

from different firms suggests a lack of collusion”). 

Furthermore, the Parties did not begin negotiating the Fee Award until after all of the 

substantive terms of the Settlement were agreed upon. See Stecker Decl. ¶19. This factor further 

demonstrates the fairness of the arm’s-length Settlement because “the amount of attorneys’ fees 

could not have affected the amount of Plaintiffs’ recovery.” In re Chickie’s & Pete’s Wage and 

Hour Litig., 2014 WL 911718, at *4 (E.D. Pa. Mar. 7, 2014). 

D. The Strength of Plaintiffs’ Claims and the Risk of Continued 

Litigation 

Plaintiffs believed and continue to believe that their claims are meritorious. Considering 

that their allegations were based in substantial part upon Galena’s own books and records, 

Plaintiffs believe they had a strong likelihood of establishing liability at trial, at least as to the 

director defendants on certain of their claims. However, had Plaintiffs continued to litigate, there 

was a real risk that Plaintiffs would not have been successful. See, e.g., Pac. Enters., 47 at 378 

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(affirming approval of derivative settlement and noting that “the odds of winning [a] derivative 

lawsuit [are] extremely small” because “derivative lawsuits are rarely successful”); Maher, 714 

F.2d at 455 (“Settlements of shareholder derivative actions are particularly favored because such 

litigation is notoriously difficult and unpredictable.”). Although Plaintiffs defeated the Second 

Motion to Dismiss, Plaintiffs still faced considerable future challenges. See In re Omnivision 

Techs., Inc., 559 F. Supp. 2d 1036, 1041 (N.D. Cal. 2008) (“Although Plaintiffs’ case has 

survived two motions to dismiss...it still faces numerous hurdles.”). 

As Defendants noted in the Second Motion to Dismiss, to prevail at trial, Plaintiffs would 

have had to prove that the director defendants (Ahn, Hillsberg, Chin, Galliker, Kriegsman, Nisi 

and Ashton) committed non-exculpated breaches of fiduciary duty. See ECF No. 52, at 10 n.6. 

Galena maintains an exculpatory provision pursuant to 8 Del. C. § 102(b)(7) which “eliminate[s] 

or limit[s] the personal liability of a director to a corporation or its stockholders for monetary 

damages” for breaches of the duty of care. Thus, in order to recover damages in this Action, 

Plaintiffs would have had to prove that the director defendants breached the duty of loyalty – a 

difficult proposition.11 Even had Plaintiffs proved a non-exculpated breach of fiduciary duty, the 

question of whether Galena suffered actual damages related to the breach would have been hotly 

contested, and subject to “dueling experts.”12 Absent Settlement, Plaintiffs faced the real 

possibility that, even if they were successful at trial, they would obtain only a modest recovery 

for the Company. 

 

11 Although the Court noted in its Opinion and Order on Motion to Dismiss that “Plaintiffs have 

alleged sufficient facts stating a non-exculpated claim against Defendants,” ECF No. 76 at 15, 

there is no guarantee that Plaintiffs could prove at trial that Defendants breached their fiduciary 

duty of loyalty. 

12 See, e.g., In re Lloyd’s Am. Trust Fund Litig., 2002 WL 31663577, at *21 (S.D.N.Y. Nov. 26, 

2002) (“The determination of damages ... is a complicated and uncertain process, typically 

involving conflicting expert opinions. The reaction of a jury to such complex expert testimony is 

highly unpredictable.”). 

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Indeed, had the Action gone to trial, Plaintiffs would have faced significant risks proving 

their insider trading and spring-loading option claims. With respect to the spring-loading option 

claims, as to the director defendants, the issue would be whether the option grants were entirely 

fair to Galena. See, e.g., In re Tyson Foods, Inc. Consol. S’holder Litig., 919 A.2d 563, 592-93 

(Del. Ch. 2007). As to the officer defendants who were not Board members and did not approve 

spring-loaded stock options (Schwartz and Dunlap), Plaintiffs would be required to prove they 

acted in bad faith by receiving spring-loaded stock options, which would have been difficult as 

these individuals were not involved in approving the awards.13 As a result of the Settlement and 

Plaintiffs’ efforts, the alleged improperly-granted options received by the director defendants 

have been cancelled. Thus, the Settlement fully remedies the director defendants’ alleged 

breaches of duty in connection with the option grants by eliminating any unjust enrichment they 

received. The only challenged options which are not subject to the Settlement are the collective 

450,000 options granted to officer defendants Schwartz and Dunlap, who did not participate in 

granting of the options. As to those defendants, Plaintiffs would be required to prove that they 

each acted in bad faith by receiving spring-loaded options. Therefore, after considering that risk 

when compared to the significant value obtained for Galena as a result of the Settlement, 

Plaintiffs agreed to the Settlement which does not include cancelling these individuals’ stock 

options. Indeed, proving liability as to all Defendants was not assured and involved substantial 

risks. The Settlement, however, eliminates those risks and provides a complete victory against 

the director defendants on these claims. 

 

13 See Friedman v. Dolan, 2015 WL 4040806, at *9 (Del. Ch. June 30, 2015) (“[Defendants] did 

not award themselves compensation, and there is no basis in the complaint to infer that either of 

the two engaged in behavior that coerced or influenced the Compensation Committee Defendants 

to act inconsistently with their responsibilities as directors.”); Ryan v. Gifford, 935 A.2d 258, 270 

(Del. Ch. 2007) (the receipt of “backdated options without any additional allegation of 

knowledge that the options were wrongfully granted is not a breach of fiduciary duty.”). 

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With respect to their insider trading claims, Plaintiffs would have to prove that the 

Individual Defendants (except Dunlap) possessed material, nonpublic information and that they 

used that information improperly by making trades because they were motivated, in whole or in 

part, by the substance of that information. Silverberg v. Gold, 2013 WL 6859282, at *10 (Del. 

Ch. Dec. 31, 2013). This would be no easy task. See id. at *14 (“insider trading claims depend 

importantly on proof that the selling defendants acted with scienter.”). Further, Plaintiffs allege 

that the trading proceeds totaled nearly $16.1 million. As a result of the Settlement, Galena will 

receive over $16.3 million in financial relief. Thus, Galena is positioned to recover a large 

portion of the damages alleged in the Action, and the Settlement eliminates the risks of continued 

litigation, including recovering significantly less than the alleged damages or none at all. 

Last, even if Plaintiffs were successful at trial, there is no guarantee that any judgment 

would ultimately be sustained on appeal or by the trial court. For example, in In re Apollo Grp., 

Inc. Sec. Litig., 2008 U.S. Dist. LEXIS 61995 (D. Ariz. Aug. 4, 2008), the court on a motion or 

judgment as a matter of law overturned a jury verdict of $277 million in favor of stockholders.14 

Accordingly, the strength of Plaintiffs’ case and the risks of continued litigation support 

approving the Settlement. See, e.g., NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *16-17 

(approving derivative settlement after analyzing risks of continued litigation). 

E. The Expense, Complexity and Likely Duration of Further Litigation 

Another factor militating in favor of the Settlement is the complexity, expense and likely 

duration of the litigation. NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *9. It is important to note 

 

14 See also Johansen v. Combustion Eng’g., Inc., 170 F.3d 1320, 1340 (11th Cir. 1999) 

(affirming reduction of $45 million damages award to $4.35 million); Gregg v. U.S. Indus., Inc., 

887 F.2d 1462, 1477 (11th Cir. 1989) (affirming reduction of $18.5 million damages award to $2 

million); MCI Commc’ns Corp. v. Am. Tel. & Tel. Co., 708 F.2d 1081 (7th Cir. 1983) 

(remanding $1.8 billion judgment for a new trial on damages, ultimately producing a much 

smaller award). 

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that “[s]tockholder litigation is notably difficult and notoriously uncertain even in the best of 

circumstances.” In re SmithKline Beckman Corp. Sec. Litig., 751 F. Supp. 525, 529 (E.D. Pa. 

1990) (approving settlement of stockholder class action); see also Cohn v. Nelson, 375 F. Supp. 

2d 844, 852 (E.D. Mo. 2005) (“Settlements of shareholder derivative actions are particularly 

favored because such litigation is notoriously difficult and unpredictable.”). This Action would 

not have been an exception to this rule. 

If not for the Settlement, the Action would have continued to be fiercely contested by the 

Parties. Continued litigation would have been complex, costly and of substantial duration. See 

In re AOL Time Warner S’holder Derivative Litig., 2006 WL 2572114, at *5 (S.D.N.Y. 2006) 

(noting that “the prosecution of this action would require the Company to incur substantial costs” 

and that approving the settlement “will allow the Company to direct its full attention to its 

substantive business”).15 Conducting discovery would have presented a lengthy and expensive 

endeavor. Formal document discovery would need to be propounded, reviewed and completed. 

The breadth of document discovery would result in substantial expense for all Parties. 

Depositions would also have to be taken and Plaintiffs would likely need to depose many of the 

nine Individual Defendants, and likely numerous current and former employees of Galena. In 

addition, the Parties would need to designate experts and conduct expert discovery, as well as 

research, prepare and oppose any motions for summary judgment. 

Lastly, a trial on the merits would have to be conducted, which would occupy the Parties 

and the Court for a substantial period of time. Any trial in this Action would likely be complex, 

 

15 See also Ryan, 2009 WL 18143, at *9 (noting that savings to the nominal defendant 

corporation in legal and other professional fees that would have been incurred but for the 

settlement of the litigation “directly benefit [the company] and its shareholders, just as a 

monetary judgment would, and these savings are properly considered by the Court when 

deciding whether a settlement is fair, reasonable, and adequate. Should the litigation proceed, 

any potential recovery would be diminished by the cost of achieving the judgment.”). 

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expensive and time consuming. In re Global Crossing Sec. and ERISA Litig., 225 F.R.D. 436, 

456 (S.D.N.Y. 2004). A trial in this instance where Plaintiffs have brought derivative claims on 

behalf of Galena would present special complexities as it calls for a stockholder to step into the 

corporation’s shoes. See Cohen v. Beneficial Ind. Loan Corp., 337 U.S. 541, 548 (1949) 

(explaining nature of derivative suits). Moreover, any judgment favorable to Plaintiffs would 

likely be the subject of post-trial motions and appeals, which would prolong the Action for years 

with the ultimate outcome uncertain. The Settlement eliminates these risks and provides Galena 

with immediate and certain financial relief which equates to a significant percentage of the total 

alleged insider trading proceeds. Velez v. Novartis Pharm., 2010 WL 4877852, at *13 (S.D.N.Y. 

Nov. 30, 2010) (“Settlement at this juncture results in a substantial and tangible present recovery, 

with the attendant risk and delay of post-trial motions and appeals.”); Maher, 714 F.2d at 466 

(derivative settlement approved where “the parties’ conclusion that any possible benefit to [the 

company] from pursuing the causes of action would be more than offset by the additional cost of 

litigation was based on an intelligent evaluation of the case”). In addition, any judgment would 

not include the substantial governance benefits obtained through the Settlement. And even a 

verdict is no guarantee that Galena and its stockholders would recover a significant portion of the 

alleged damages, a feat which has been achieved through this Settlement. See Section IV.D, 

supra. 

Plaintiffs’ Counsel also considered the best interests of Galena, as the Action is brought 

on its behalf, including the risks that on-going litigation could result in loss or substantial 

diminution of available D&O insurance and financial hardship to Galena with risk that the 

Individual Defendants (absent insurance) would be unable to satisfy fully any judgment that 

might be entered in the Action and that the Defendants would also be unable to settle the related 

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Federal Securities Action. See Stipulation §II. Defendants’ insurance carriers were asserting 

defenses to coverage, making collection of insurance either to reimburse Galena for settling the 

Federal Securities Action or in the event of a judgment against any insured individual subject to 

doubt. As a result of the Settlement, Plaintiffs achieved a significant $15 million payment to be 

made to Galena by the D&O carriers, despite their reservation of rights. 

In sum, the Settlement provides immediate financial consideration to Galena worth over 

$16.3 million, in addition to the cancellation of the 1.2 million improperly-granted stock options 

received by the director defendants, as well as significant governance reforms which will provide 

meaningful value to Galena and its stockholders for years to come. The Settlement avoids years 

of potential delay, added expense and uncertainty. See, e.g., MRV, 2013 WL 2897874, at *4 

(“The Settlement Agreement, in addition to minimizing delay, guarantees Plaintiffs’ recovery 

and the implementation of substantial corporate governance reforms. Thus, the risks and 

potential expenses of further litigation weigh in favor of final approval, consistent with the 

policy preferring settlement over further time consuming litigation.”). 

F. The Extent of Discovery Completed and the Stage of Proceedings 

The stage of the proceedings and the amount of discovery completed is another factor 

that courts consider in determining the fairness, reasonableness and adequacy of a settlement. 

NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *9. Ninth Circuit law is clear that “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 Cir. 2000); MRV, 2013 WL 2897874, at *4. Here, the proceedings have reached a stage 

where Plaintiffs’ Counsel were able to make an intelligent evaluation of the Action and the 

propriety of the Settlement. 

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Before filing the Complaint and continuing thereafter, Plaintiffs’ Counsel conducted an 

extensive investigation of the allegations asserted in the Action. Plaintiffs’ Counsel obtained the 

220 Documents and reviewed and analyzed voluminous public documents, including financial 

reports, press releases, and SEC filings, concerning the allegations in the Complaint. The Parties 

filed detailed amended complaints and fully briefed the Second Motion to Dismiss and Second 

Motion to Stay. In addition, the lengthy settlement negotiations and mediation process provided 

the Parties with an opportunity to conduct extensive analysis of their respective positions, 

including Plaintiffs obtaining and reviewing nearly 24,000 non-public documents in advance of 

the Mediation and analyzing the merits of Plaintiffs’ claims and the Individual Defendants’ 

potential defenses thereto. See, e.g., AOL Time Warner, 2006 WL 2572114, at *3 (negotiations 

“spanned an extended period of time and benefited from multiple proposals passed between the 

parties throughout this period”). In light of the stage of the proceedings, and the substantial work 

of counsel, Plaintiffs and Plaintiffs’ Counsel were able to make an informed decision regarding 

the merits of the Settlement versus continued litigation. See Mego Fin., 213 F.3d at 459. Thus, 

this factor supports approval of the Settlement. 

G. The Experience and Views of Counsel 

Significant weight should be attributed to the belief of experienced counsel that 

settlement is in the best interests of those affected by the Settlement – here, Galena and Gurrent 

Galena Stockholders. See MRV, 2013 WL 2897874, at *5 (“Great weight is accorded to the 

recommendation of counsel, who are most closely acquainted with the facts of the underlying 

litigation.”). Plaintiffs and Defendants, acting by and through the Board, and the counsel for 

each, have independently considered the Settlement and all agree that it is in the best interests of 

the Company and Current Galena Stockholders. See Stipulation §§II-III; ¶2.3. 

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Plaintiffs’ Counsel are experienced litigators with substantial experience litigating 

stockholder derivative actions. See Stecker Decl. Exhibits A - J. As a result of their unparalleled 

experience in these types of cases, Plaintiffs’ Counsel have unique insight into the legal and 

factual issues presented. Plaintiffs’ Counsel used that expertise and experience to effectively and 

efficiently prosecute the Action and reach an excellent result for Galena and Current Galena 

Stockholders. “The recommendations of plaintiffs’ counsel should be given a presumption of 

reasonableness.” Omnivision Techs., 559 F. Supp. 2d at 1043 (approving settlement of class 

action where plaintiffs’ counsel had substantial experience in securities litigation and “[t]here 

[wa]s nothing to counter the presumption that Lead Counsel’s recommendation is reasonable.”). 

Furthermore, counsel for Defendants — King and Spalding LLP, Perkins Coie LLP and 

Debevoise & Plimpton LLP — are worthy adversaries. The experience of counsel supports 

approval of the Settlement. 

H. The Reaction of Current Galena Stockholders to the Settlement 

Having received adequate notice of the Settlement, see Section II.B, supra, no Current 

Galena Stockholder has served Plaintiffs’ Counsel with an objection to the Settlement (including 

the Fee Award and Incentive Awards) or notified Plaintiffs’ Counsel of their intention to appear 

at the Settlement Hearing. See Stecker Decl. ¶56.16 Here, the absence of objections to the 

proposed Settlement from Current Galena Stockholders strongly supports final approval of the 

Settlement.17 See, e.g., Roberti v. OSI Sys., Inc., 2015 WL 8329916, at *5 (C.D. Cal. Dec. 8, 

2015) (“By any standard, the lack of objections of the Class Members favors final approval.”); 

 

16 Current Galena Stockholders have until April 7, 2016 to file any objections. Of course, to the 

extent that any objections are received going forward, Plaintiffs’ Counsel will address them once 

the deadline for objections passes. 

17 Galena currently has approximately 181.75 million shares outstanding. See 

http://finance.yahoo.com/q/ks?s=GALE+Key+Statistics, the Yahoo! finance page for Galena. 

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MRV, 2013 WL 2897874, at *5 (approving settlement of derivative action where “Plaintiffs 

[were] not aware of a single objection to any aspect of the Settlement.”). 

V. THE AGREED-TO FEE AWARD SHOULD BE FINALLY APPROVED AS 

FAIR AND REASONABLE 

Galena and Current Galena Stockholders have received substantial benefits as a result of 

Plaintiffs’ Counsel’s efforts in initiating and prosecuting the Action and negotiating the 

Settlement. Plaintiffs and Defendants agree that the Settlement confers substantial benefits upon 

Galena and is in the best interests of Galena and Current Galena Stockholders. See Stipulation 

§§II-III, ¶2.3. In recognition of the substantial monetary and non-monetary benefits conferred 

upon Galena by the Settlement, after negotiating the material terms of the Settlement, Plaintiffs’ 

Counsel and the Company, with the substantial assistance of Judge Phillips, separately 

negotiated the amount of the Fee Award to be paid to Plaintiffs’ Counsel. As a result, the Board 

accepted Judge Phillips’ mediator’s proposal and will cause Galena’s D&O insurer to pay 

Plaintiffs’ Counsel the $5 million Fee Award to compensate Plaintiffs’ Counsel for their efforts. 

See Stipulation ¶5.1; Stecker Decl. ¶¶19, 59.18 The Fee Award is to be paid on top of the $15 

million payment to the Company. The Parties’ agreement on the amount of the Fee Award is an 

appropriate resolution of the issue of fees and expenses and is fair and reasonable in light of the 

factors the Ninth Circuit considers when awarding counsel fees and when cross-checked against 

Plaintiffs’ Counsel’s lodestar. Thus, the Fee Award warrants the Court’s approval. 

 

18 “A request for attorney’s fees should not result in a second major litigation. Ideally, of course, 

litigants will settle the amount of a fee.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). 

Where, as here, there is no evidence of collusion and no detriment to the parties, the Court 

should give “substantial weight to a negotiated fee amount.” Ingram v. Coca- Cola, 200 F.R.D. 

685, 695 (N.D. Ga. 2001); see also Officers for Justice, 688 F.2d at 625. 

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A. Legal Standard 

A “[r]equest for attorney’s fees must be made by a motion pursuant to Federal Rule of 

Civil Procedure 54(d)(2)[.]” Arnett v. Bank of America, N.A., 2014 WL 4672458, at *11 (D. Or. 

Sept. 18, 2014). “Under the ‘substantial benefit’ doctrine, counsel who prosecute a shareholders’ 

derivative case which confers benefits on the corporation are entitled to an award of attorneys’ 

fees and costs.” NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *12 (citing Mills v. Elec. Auto-Lite 

Co., 396 U.S. 375 (1970)). “The basic principle behind this doctrine holds simply that 

stockholders who benefit from the litigious efforts of another should share in the costs of 

achieving that benefit.” La. State Emps.’ Ret. Sys. v. Citrix Sys, Inc., 2001 WL 1131364, at *4 

(Del. Ch. Sept. 19, 2001). “Ninth Circuit courts have consistently approved attorneys’ fees and 

expenses in derivative [] actions where plaintiff’s efforts resulted in significant monetary 

recoveries, as well as non-pecuniary benefits in the form of valuable corporate governance 

reforms.” NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *12-13. See also MRV, 2013 WL 

2897874, at *6; Rambus, 2009 WL 166689, at *3. 

As a threshold matter, the Fee Award was only negotiated after the Parties completed 

their settlement negotiations, and it is the product of a “mediator’s proposal” made by Judge 

Phillips and accepted by the Parties. As set forth in the Stipulation, with the approval of the 

current Board in an exercise of its independent business judgment, Galena has agreed to pay the 

Fee Award based on the substantial benefits conferred upon the Company and Current Galena 

Stockholders by the Settlement. This exercise of the Board’s independent business judgment 

strongly supports final approval of the Fee Award, because it is an objective indicator of the 

fairness and reasonableness of the Fee Award. Because “Courts will not substitute their business 

judgment for that of the directors, but will determine if the directors’ decision was, on balance, 

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within a range of reasonableness” the Court’s inquiry as to the fairness and reasonableness can 

end there. Unitrin, Inc. v. Am. Gen. Corp., 651 A.2d 1361, 1386 (Del. 1995). 

Still, the Ninth Circuit has enumerated several factors to consider when determining the 

reasonableness of attorneys’ fees, including: (1) the results achieved; (2) the risks of litigation; 

(3) the skill required and the quality of work; (4) the contingent nature of the fee; (5) the burdens 

carried by plaintiffs’ counsel; and (6) the awards made in similar cases. MRV, 2013 WL 

2897874, at *6.19 As set forth below, the Fee Award is reasonable and appropriate in light of the 

factors the Ninth Circuit traditionally considers in determining reasonable fee awards. 

B. The Agreed-to Fee Award Is Fair and Reasonable in Light of the 

Benefits Achieved and Awards in Similar Cases 

The Supreme Court has stated that “the most critical factor in determining the 

reasonableness of a fee award is the degree of success obtained.” Klein v. City of Laguna Beach, 

810 F.3d 693, 698-99 (9th Cir. 2016) (quoting Farrar v. Hobby, 506 U.S. 103, 114 (1992)). In 

this Action, Plaintiffs’ Counsel’s efforts produced a strong result: the Settlement includes 

substantial monetary and non-monetary benefits, for which the agreed-to Fee Award is fair and 

reasonable compensation. “Under the common fund doctrine, a litigant or lawyer who recovers a 

common fund for the benefit of persons other than himself or his client is entitled to a reasonable 

attorney’s fee from the fund as a whole.” Harger v. Dept. of Labor, 569 F.3d 898, 903 n.8 (9th 

Cir. 2009). Under the “common fund” doctrine, courts award attorneys’ fees as a percentage of 

the fund created. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). The 

 

19 Delaware courts use similar factors: (1) the results accomplished for the benefit of the 

shareholders; (2) the efforts of counsel and the time spent on the case; (3) the contingent nature 

of the fee; (4) the difficulty of the litigation; (5) and the standing and ability of counsel involved. 

In re Infinity Broad. Corp. S’holders Litig., 802 A.2d 285, 293 (Del. 2002) (citing Sugarland 

Indus., Inc. v. Thomas, 420 A.2d 142, 149 (Del. 1980)). 

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Ninth Circuit “benchmark” is to award 25% of the monetary benefit achieved to compensate 

plaintiffs’ counsel in representative litigation. See id.; Arnett, 2014 WL 4672458, at *12. 

Here, Galena will receive total financial consideration worth over $16.3 million as a 

result of the Settlement. See Section III.A, supra.; Stipulation ¶5.1 The $5 million agreed-to 

Fee Award will be paid in addition to, and not out of, the $16.3 million financial consideration, 

as the entirety of the Settlement’s financial consideration will remain with Galena. In the typical 

monetary settlement, the defendants or its insurance carrier (as is the case here) pay a fund and 

the court awards fees for the benefit of creating the fund based on a percentage of the entire fund, 

not the net amount that remains in the fund after the fees are paid. Where the fee is paid on top 

of a settlement fund, the fee award should be considered as a percentage of the gross sum of the 

fund and the fee award, not as a percentage of the fund which represents the net amount to 

remain with the company. For example, as Vice Chancellor Noble succinctly explained in In re 

GSI Commerce, Inc. S’holder Litig, when the negotiated attorneys’ fees are to be paid in addition 

to the settlement fund, the court will “look at it under what I think is a more traditional fashion 

where we would add the attorneys’ fees and expenses to the recovery and then use that as the 

denominator for finding a percentage of fees and expenses.” In re GSI Commerce, Inc. S’holder 

Litig., Consol. C.A. No. 6346-VCN, at 23 (Del. Ch. Nov. 15, 2011) (TRANSCRIPT) (Stecker 

Decl. Exhibit U). Indeed, in In re Jefferies Group, Inc. S’holders Litig., 2015 WL 3540662, at 

*2 (Del. Ch. June 5, 2015), Chancellor Bouchard rejected defendants’ argument that the fee 

award should be calculated on a net basis and noted that the court “traditionally has granted fee 

awards in common fund settlements based on a percentage of the gross settlement value” and 

that defendants “were unable to identify a single case in which this Court made a considered 

judgment to award a fee based on a percentage of the net recovery that stockholders would 

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receive in a common fund case” Id; see also; In re ArthroCare Corp. S’holder Litig., C.A. No. 

9313-VCL, Settlement Hearing and Rulings of the Court, at 34 (Del. Ch. Nov. 6, 2014) (Stecker 

Decl. Exhibit V) (“Now I have to factor in that the defendants are paying the fee, which is an 

additional benefit”); Frederick v. Range Res.-Appalachia, LLC, 2011 WL 1045665, at *8 (W.D. 

Pa. Mar. 17, 2011) (including “contribution to attorney fees” in calculating total amount of a 

common fund). In sum, by negotiating the Fee Award in addition to the financial consideration, 

it is functionally equivalent to a larger all-in settlement fund, i.e., $21.3 million ($16.3 million 

Settlement consideration plus $5 million Fee Award), where all fees are paid from that gross 

fund. 

Accordingly, the $5 million agreed-to Fee Award, which will be paid on top of, not out of 

the $16.3 million in financial consideration, represents 23% of the total monetary recovery 

($21.3 million), which is less than the 25% benchmark and is therefore presumptively 

reasonable. See, e.g., NVIDIA, 2009 U.S. Dist. LEXIS 24973, at *14-19 (approving fee in excess 

of 25% and noting that “the Ninth Circuit has held that a 28 percent fee award was reasonable 

where plaintiffs’ counsel achieved an exceptional result...and obtained benefits beyond cash 

payment”); In re Apple Computer, Inc. Derivative Litig., 2008 WL 4820784, at *4 (N.D. Cal. 

Nov. 5, 2006) (approving fee of $8.85 million, which equaled 63% of the cash payment to the 

company); Atmel, 2010 WL 9525643, at *12 (approving fee of $4.94 million, which equaled 

51% of the cash portion of the settlement); Arnett, 2014 WL 4672458, at *15 (approving fee of 

$7.75 million, which equaled 25% of the settlement fund). 

In addition to the considerable and immediate financial benefits, as a result of the 

Settlement, Plaintiffs have also obtained valuable, long-term corporate governance reforms for 

Galena and Current Galena Stockholders. The therapeutic benefits enjoyed by Galena and 

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Current Galena Stockholders as a result of the Settlement are clearly compensable.20 The 

Settlement requires significant reforms to Galena’s stock option granting practices. These 

reforms require, inter alia, that options be granted on pre-set dates with full public disclosure of 

the methodology used to set those dates. See Section III.B, supra. The option granting reforms 

also require additional oversight at meetings where options are granted, and that such granting 

documents are preserved for at least seven years. Id. The reforms to Galena’s compensation 

practices produced under the Settlement directly address claims alleged in the Complaint and are 

designed to prevent the recurrence of the type of misconduct alleged. The Settlement also 

provides for significant reforms to Galena’s overall corporate governance practices and policies, 

including reforms at both the Board and management level, which will improve the internal 

policies and procedures of Galena. Id. These substantial reforms alone support the Fee Award, 

irrespective of the considerable financial relief obtained. For example, in In re F5 Networks, Inc. 

Derivative Litig., No. 06-0794 (W.D. Wash.), the district court awarded a $5 million fee in a 

settlement that achieved corporate governance reforms similar to those achieved in this 

Settlement, including, among other things: (i) reforms to the company’s stock option granting 

practices; (ii) requiring the retention of a compensation consultant; and (iii) reforms to the 

 

20 In the oft-cited Chrysler Corp. v. Dann, 223 A.2d 384 (Del. 1966) decision, the Delaware 

Supreme Court held that changes in corporate policy or a heightened level of protection for 

stockholders justifies an award of counsel fees. Id. at 386; see also Maher, 714 F.2d at 466 

(approving attorney’s fees in a therapeutic derivative settlement because “influencing the future 

conduct may serve the interests of the corporation as fully as a recovery for past misconduct 

...”); Seinfeld v. Robinson, 246 A.D.2d 291, 298 (N.Y. App. 1st Dep’t 1998) (awarding fees in a 

derivative action which resulted in the corporation “implementing procedures that will prevent 

the exact sequence of events from reoccurring, [therefore] plaintiffs have furnished a benefit to 

all shareholders”). 

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composition of the Board. See F5 Networks, Order and Final Judgment (W.D. Wash. Jan. 6, 

2011) (Stecker Decl. Exhibit W).21

Accordingly, Plaintiffs respectfully submit that the Fee Award is fair and reasonable in 

light of the substantial monetary and non-monetary benefits obtained in the Settlement. 

C. The Other Ninth Circuit Factors Support the Unopposed Fee Award 

1. The Risks of Litigation 

As discussed in Section IV.D, supra, pursuing this litigation is inherently risky as 

“derivative lawsuits are rarely successful.” Accordingly, for the reasons stated above, this factor 

supports the reasonableness of the unopposed Fee Award. 

2. The Skill Required and the Quality of Work 

The skill required by Plaintiffs’ Counsel to prosecute and settle the Action and their 

quality of work are additional factors that support Plaintiffs’ requested Fee Award. See MRV, 

2013 WL 2897874, at *6 (approving unopposed fee and finding that “the successful prosecution 

of this action required knowledge and expertise in the fields of shareholder derivative litigation 

and options backdating.”). Plaintiffs’ Counsel are nationally-recognized law firms that 

specialize in stockholder derivative litigation. See Stecker Decl. Exhibits K - T. Here, Plaintiffs’ 

Counsel provided extensive, high-quality representation throughout the pendency of the Action. 

 

21 The reasonableness of the Fee Award is also supported by fee awards approved in other 

governance-only derivative settlements where there was no financial relief. See, e.g., City of 

Pontiac Gen. Employees’ Ret. Sys. v. Langone, No. 2006-cv-122304, Findings of Fact in Support 

of Order and Final Judgment (Fulton County, Ga. June 10, 2008) (Stecker Decl. Exhibit X) 

(awarding $14.5 million fee); In re Google Inc. S’holder Derivative Litig., No. CV-11-04248. 

Order (N.D. Cal. Jan. 21, 2015) (Stecker Decl. Exhibit Y) (awarding $9.9 million fee) Unite 

Nat’l Ret. Fund v. Watts, 2005 WL 2877899, at *5 (D.N.J. Oct. 29, 2005) (awarding $9.2 million 

fee); Warner v. Lesar, No. 2011-09567, Order Approving Settlement and Judgment (Tex. Dist. 

Ct., Harris Cnty. Oct. 1, 2012) (awarding $7.75 million fee) (Stecker Decl. Exhibit Z); In re 

General Motors Corp. Derivative Litig., MDL No. 06-1749, Order Approving Settlement (E.D. 

Mich. Dec. 22, 2008) (Stecker Decl. Exhibit AA) (awarding $5.38 million fees). 

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As stated supra, Plaintiffs’ Counsel expended significant time prosecuting and negotiating the 

Settlement of the Action. See Section II, supra; Stecker Decl. ¶¶69. The quality of Plaintiffs’ 

Counsel and their efforts throughout the Action demonstrate that the Fee Award should be 

approved. See Del Monte Foods Co. S’holder Litig., 2011 WL 2535256, at *13 (Del. Ch. June 7, 

2011) (“More important than hours is effort, as in what plaintiffs’ counsel actually did.”) 

(citation and quotation omitted); In re Warner Commun’s Sec. Litig., 618 F. Supp. 735, 749 

(S.D.N.Y. 1985) (“The quality of opposing counsel is also important in evaluating the quality of 

plaintiffs’ counsels’ work.”) (citation omitted), aff’d, 798 F.2d 35 (2d Cir. 1986). 

3. The Contingent Nature of the Fee and Burdens on Plaintiffs’ 

Counsel 

Plaintiffs’ Counsel undertook the litigation of the Action with the expectation that they 

would have to devote many hours of hard work to the prosecution of a case involving complex 

factual and legal issues without any guarantee of successful resolution or of compensation for 

their efforts. See Stecker Decl. ¶¶65-68. Plaintiffs’ Counsel diligently investigated the claims, 

commenced litigation of the Action, pursued the interests of their clients and nominal defendant 

Galena with appropriate aggressiveness, and successfully brought the Action to an amicable 

resolution. Id. ¶15. The prosecution of the Action involved the expenditure of significant 

resources, including the time spent by attorneys and professional staff, as well as the substantial 

expenses that were incurred during the litigation, for which Plaintiffs’ Counsel received no 

compensation during the course of litigation. Id. ¶69. Accordingly, the contingent nature of 

Plaintiffs’ Counsel’s representation fully supports the requested Fee Award. See MRV, 2013 WL 

2897874, at *6 (“the fifth factor is clearly satisfied here as well, as [t]he litigation was 

undertaken by Plaintiffs’ Counsel on a wholly contingent basis with the understanding that they 

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were embarking on a complex, expensive, and lengthy litigation with no guarantee of ever being 

compensated for the investment of time and money the case required.”). 

D. The Unopposed Fee Award Is Supported by Plaintiffs’ Counsel’s 

Lodestar 

A so-called “lodestar cross-check” also supports the reasonableness of the unopposed Fee 

Award. See Roberti, 2015 WL 8329916, at *7 (“The reasonableness of [the fee award] is 

confirmed by a cross-check with a lodestar comparison.”); Vizcaino, 290 F.3d 1043 

(“Calculation of the lodestar, which measures the lawyers’ investment of time in the litigation, 

provides a check on the reasonableness of the percentage award.”).22 The “lodestar” is produced 

by multiplying the number of hours expended by counsel’s hourly rate. Roberti, 2015 WL 

8329916, at *6.23

Here, Plaintiffs’ Counsel expended 6,105.10 hours and incurred $3,334,092.75 in lodestar 

during the successful prosecution of the Action. See Stecker Decl. ¶69, Exhibits K-T. In 

connection therewith, Plaintiffs’ Counsel also incurred $153,081.02 in unreimbursed expenses in 

connection with the litigation of the Action. Id. After subtracting Plaintiffs’ Counsel’s 

expenses, the requested Fee Award represents a lodestar multiplier of 1.45.24 The requested 

multiplier is eminently reasonable under Ninth Circuit law, which holds that lodestar multipliers 

 

22 “[W]here [the lodestar method is] used as a mere cross-check, the hours documented by 

counsel need not be exhaustively scrutinized.” Young v. Polo Retail, LLC, 2007 WL 951821, at 

*6 (N.D. Cal. Mar. 8, 2007). 

23 As courts in the Ninth Circuit recognize, there is no requirement to employ lodestar in a 

settlement which includes the creation of a monetary settlement fund. Vizcaino, 290 F.3d 1043 

& n.5 (“the primary basis of the fee award remains the percentage method” and “it is widely 

recognized that the lodestar method creates incentives for counsel to expend more hours than 

may be necessary on litigating a case so as to recover a reasonable fee, since the lodestar method 

does not reward early settlement”). Nonetheless, a cross-check of Plaintiffs’ Counsel’s lodestar 

demonstrates that the unopposed Fee Award is reasonable. 

24 $5,000,000 - $153,081.02 = $4,846,918.98. $4,846,918.98 ÷ $3,334,092.75 = 1.45. 

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can range from two to four or even higher. See, e.g., Vizcaino, 290 F.3d at 1051 (affirming fee 

award equal to lodestar multiplier of 3.65, and listing 23 settlements and multipliers for each 

where the average multiplier is 3.28); Buccallato v. AT&T Operations, Inc., 2011 WL 3348055, 

at *2 (N.D. Cal. June 30, 2011) (approving 4.3 lodestar multiplier and listing cases approving 

multipliers ranging from 4.3 to 9.3); Destefano v. Zynga, Inc., 2016 WL 537946, at *21 (N.D. 

Cal. Feb. 11, 2016) (“Multipliers of 1 to 4 are commonly found to be appropriate in complex 

class action cases.”). 

The time spent by Plaintiffs’ Counsel is reasonable under the circumstances of this 

Action. Plaintiffs’ Counsel expended significant time and expenses in order to achieve the 

benefits of the Settlement. These efforts include: (i) inspecting, reviewing and analyzing 

Galena’s filings with the SEC; (ii) obtaining and reviewing the 220 Documents; (iii) filing 

multiple complaints; (iv) successfully opposing multiple motions to stay and motions to dismiss; 

(v) inspecting, reviewing, and analyzing over 53,000 pages of non-public documents provided by 

Galena in advance of the Mediation; (vi) researching corporate governance issues; (vii) 

researching the applicable law with respect to the claims asserted in the Action and potential 

defenses thereto; (viii) attending the all-day mediation session with Judge Phillips; and (ix) 

negotiating the Settlement of the Action over the course of many months. Stecker Decl. ¶15. 

In addition, the hourly rates charged by Plaintiff’s Counsel are unquestionably 

reasonable. See Roberti, 2015 WL 8329916, at *7 (Lead Counsel’s attorney rates – between 

$525 to $975 – are reasonable given that each has at least 15 years of litigation experience 

(upwards of over 40 years of litigation experience), with the exception of ....the day-to-day 

litigation associate.”); Seinfeld v. Coker, 847 A.2d 330, 337-38 (Del. Ch. 2000) (awarding fee 

amounting to more than $1,300 per hour where the litigation was not hard fought, expedited 

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proceedings were not sought, and no motion practice occurred). Indeed, the hourly rates charged 

by Plaintiffs’ Counsel are comparable to the fees charged by Defendants’ counsel.25 

Accordingly, the lodestar “cross-check” confirms that the unopposed Fee Award is fair 

and reasonable compensation for the time and labor Plaintiffs’ Counsel expended in achieving 

the benefits of the Settlement. 

VI. THE INCENTIVE AWARDS SHOULD BE APPROVED 

As provided for in the Stipulation, Plaintiffs Klein and Rathore may apply for 

incentive awards of $5,000 each, to be paid from the Fee Award. See Stipulation ¶5.6. As 

this Court has noted, “[i]ncentive awards are payments to class representatives for their 

service...in bringing the lawsuit...[and] are often taken from a common settlement fund.” 

Arnett, 2014, WL 4672458, at *11. Here, “given the size of the....[settlement fund], the 

incentive awards are not unreasonably high” and should be approved. See id. (awarding 

incentive awards of $2,500 for each of the ten names representatives for a total incentive award 

of $25,000 and noting that “the incentive awards are reasonable and do not undermine the 

adequacy of the names representatives.”).

VII. CONCLUSION 

For the foregoing reasons, Plaintiffs respectfully request that the Court approve the 

Settlement as fair, reasonable and adequate, approve the agreed-to Fee Award in the amount of 

$5 million as fair and reasonable, and approve the Incentive Awards as fair and reasonable. 

 

25 See National Law Journal, Billing Rates Across the County, Jan. 13, 2014 (available at 

http://www.nationallawjournal.com/id=1202636785489/Billing-Rates-Across-the-Country) 

(reporting partner billing rates at Gibson Dunn between $995 and $545 per hour and associate 

billing rates between $735 and $125 per hour; reporting partner billing rates at Perkins Coie 

between $940 and $320 per hour and associate billing rates between $595 and $215 per hour; 

reporting partner billing rates at Debevoise & Plimpton between $1,075 and $955 per hour and 

associate billing rates between $760 and $120 per hour). 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 44 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -36- 

Dated: March 31, 2016 SLATER ROSS 

/s/ Christopher A. Slater 

Christopher A. Slater, OSB # 97398 

Michael J. Ross, OSB # 91410 

Sovereign Hotel, 4th Floor 

710 S.W. Madison Street 

Portland, Oregon 97205 

Telephone: (503) 227-2024 

Facsimile: (503) 224-7299 

cslater@slaterross.com 

mjross@slaterross.com 

Local Counsel for Plaintiffs 

THE WEISER LAW FIRM, P.C. 

Robert B. Weiser 

Brett D. Stecker 

James M. Ficaro 

22 Cassatt Avenue, First Floor 

Berwyn, PA 19312 

Telephone: (610) 225-2677 

Facsimile: (610) 408-8062 

rw@weiserlawfirm.com 

bds@weiserlawfirm.com 

jmf@weiserlawfirm.com 

THE WEISER LAW FIRM, P.C. 

Kathleen A. Herkenhoff 

CA Bar ID 168562 

12707 High Bluff Drive, Suite 200 

San Diego, CA 92130 

Telephone: (858) 794-1441 

Facsimile: (858) 794-1450 

kah@weiserlawfirm.com 

HYNES KELLER & HERNANDEZ, LLC 

Michael J. Hynes 

Ligaya Hernandez 

Hynes Keller & Hernandez, LLC 

1150 First Avenue, Suite 501 

King of Prussia, PA 19406 

Telephone: (610) 994-0292 

Facsimile: (914) 752-3041 

mhynes@hkh-lawfirm.com 

lhernandez@hkh-lawfirm.com 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 45 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -37- 

FARUQI & FARUQI, LLP 

Nadeem Faruqi 

685 3rd Avenue 

26th Floor 

New York, NY 10017 

Telephone: (212) 983-9330 

Facsimile: (212) 983-9331 

FEDERMAN & SHERWOOD 

William B. Federman 

Sara E. Collier 

10205 N Pennsylvania Ave 

Oklahoma City, OK 73120 

Telephone: (405) 235-1560 

Facsimile: (405) 239-2112 

wbf@federmanlaw.com 

sec@federmanlaw.com

Counsel for Plaintiffs Klein and Rathore 

PRICKETT, JONES & ELLIOTT, P.A. 

Michael Hanrahan 

Paul A. Fioravanti, Jr. 

Kevin H. Davenport 

1310 N. King Street 

Wilmington, Delaware 19801 

Telephone: (302) 888-6500 

Facsimile: (302) 658-8111 

Mhanrahan@prickett.com 

PAFioravanti@prickett.com 

KHDavenport@Prickett.com 

KESSLER TOPAZ 

 MELTZER & CHECK, LLP 

Eric L. Zagar 

Robin Winchester 

Matthew A. Goldstein 

280 King of Prussia Road 

Radnor, Pennsylvania 19087 

Telephone: (610) 667-7706 

Facsimile: (267) 948-2512 

ezagar@ktmc.com 

rwinchester@ktmc.com 

mgoldstein@ktmc.com 

GRANT & EISENHOFER P.A. 

Stuart Grant 

Cynthia Calder 

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 46 of 47
PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL -38- 

123 Justison Street 

Wilmington, DE 19801 

Telephone: (302) 622-7000 

Facsimile: (302) 622-7100 

sgrant@gelaw.com 

ccalder@gelaw.com 

GARDY & NOTIS, LLP 

James S. Notis 

Kira German 

Tower 56 

126 East 56th Street, 8th Floor 

New York, NY 10022 

Telephone: (212) 905-0509 

Facsimile: (212) 905-0508 

jnotis@gardylaw.com 

SQUITIERI & FEARON LLP 

Lee Squitieri 

32 East 57th Street, 12th Floor 

New York, NY 10022 

Telephone: (212) 421-6492 

Facsimile: (212) 421-6553 

lee@sfclasslaw.com 

Counsel for Plaintiffs Fuhs and Spradling

Case 3:15-cv-01465-SI Document 45 Filed 03/31/16 Page 47 of 47