IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE EBIX, INC.

STOCKHOLDER LITIGATION

)

)

 CONSOLIDATED

 C.A. No. 8526-VCS

ORDER GRANTING CLASS CERTIFICATION AND

APPOINTING CLASS REPRESENTATIVES AND CLASS COUNSEL

WHEREAS:

A. On October 31, 2016, plaintiffs, Gilbert C. Spagnola (“Spagnola”) and 

Desert States Employers & UFCW Union Pension Plan (“Desert States,” and 

together with Spagnola, the “Initial Plaintiffs”), filed a Motion for Class 

Certification (the “Motion”) in the above-referenced action;

B. On October 13, 2017, defendants, Hans U. Benz, Pavan Bhalla, Neil D. 

Eckert, Rolf Herter, and Hans U. Keller (together, the “Outside Directors”), filed a 

brief in opposition to the Motion; 

C. On October 17, 2017, defendants, Joseph R. Wright, Jr. and George W. 

Hebard III (the “Barington Defendants,” and together with the Outside Directors and 

Robin Raina, the “Director Defendants”), filed their joinder in the Outside Directors’ 

opposition to the Motion;

D. On November 14, 2017, the Initial Plaintiffs filed their reply in further 

support of their Motion;

E. On January 5, 2018, plaintiff, Amalgamated Bank, as Trustee for 

LongView SmallCap 600 Index Fund and LongView Broadmarket 300 Index Fund
2

(“Amalgamated,” and together with the Initial Plaintiffs, the “Plaintiffs”), filed a 

Motion for Permissive Joinder as Plaintiff, which was granted on April 2, 2018;

F. By Order dated April 4, 2018, the Court directed the parties to submit 

supplemental briefing on the Motion;

G. On May 2, 2018, Plaintiffs filed a supplemental brief in support of their 

Motion; 

H. On May 16, 2018, the Outside Directors filed a supplemental brief in 

opposition to the Motion;

I. Defendants, Ebix, Inc. (“Ebix”) and Robin Raina (“Raina”), do not 

oppose the Motion;

J. On May 23, 2018, the Court heard oral argument on Plaintiffs’ Motion;

K. Plaintiffs, Spagnola, Desert States and Amalgamated1seek to be 

 

1 Amalgamated seeks designation as a co-lead plaintiff in the Verified Supplement to The

Verified Fourth Amended and Supplemented Class Action and Derivative Complaint. 

D.I. 485. The Outside Directors point out that Amalgamated has not otherwise sought an 

order to be appointed as co-lead plaintiff. See Tr. of Hr’g May 23, 2018, 218:22–219:3 

(“MR. SACCA: Amalgamated is in the case, Your Honor, although I do note that they have 

not sought appointment as a co-lead plaintiff yet. They said they were going to. They 

haven’t. I don’t know why they haven’t. But I don’t think they are a co-lead plaintiff.”); 

see also Indep. Directors’ Answering Br. in Opp’n to Plaintiffs’ Supplemental Br. in 

Further Supp. of their Mot. for Class Certification 2 & n.4 (“Moreover, despite the Court 

re-opening class discovery to accommodate Amalgamated’s late entry premised on 

representations that it would seek appointment as a co-lead plaintiff in this Action, 

Amalgamated has never done so.”). Despite this confusion, I am satisfied that Plaintiffs’ 

supplemental briefing on the Motion makes clear that Amalgamated is seeking to be 

appointed as co-lead plaintiff.
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designated as class representatives;

L. Defendants take no position on the proposed class counsel;

NOW THEREFORE, IT IS HEREBY ORDERED, this 17th day of July, 

2018, as follows:

1. Certification of a class under Court of Chancery Rule 23 is a twostep process, which requires that the purported class meet all four criteria within 

Court of Chancery Rule 23(a) and at least one of the criteria within Court of 

Chancery Rule 23(b).

Rule 23(a)

2. Under Rule 23(a), the plaintiff has the burden of demonstrating 

that the proposed class satisfies the following four requirements: 

(1) the class is so numerous that joinder of all members is 

impracticable, (2) there are questions of law or fact common to 

the class, (3) the claims or defenses of the representative parties 

are typical of the claims or defenses of the class, and (4) the

representative parties will fairly and adequately protect the 

interests of the class.2

3. The Court finds that each of the prerequisites of Rule 23(a) has 

been satisfied. 

 

2 See Ct. Ch. R. 23(a).
4

a) As of February 26, 2018, Ebix had 31,487,526 outstanding 

shares of common stock held by 129 stockholders.3 This makes joinder of all 

members impracticable.

4 Plaintiffs thus meet the numerosity requirement of 

Rule 23(a)(1).

5

b) The action involves common questions of law and fact, 

including (i) whether one or more of the Director Defendants breached their 

fiduciary duties in connection with various director and officer compensation 

initiatives; (ii) whether the 2010 Proxy Statement6 was materially misleading; and

(iii) whether the 2010 Plan and the SAR Agreement are invalid. Because these legal 

questions are common to all class members, Plaintiffs meet the requirements of 

Rule 23(a)(2).7

 

3 Ebix Form 10-K (Mar. 1, 2018) at 24, https://www.sec.gov/Archives/edgar/data/814549

/000081454918000008/ebix-2017x10k.htm. 

4 See Marie Raymond Revocable Trust v. MAT Five LLC, 980 A.2d 388, 400 (Del. Ch. 

2008) (“There is no precise cutoff under the numerosity requirement, but ‘numbers in the 

proposed class in excess of forty, and particularly in excess of one hundred, have sustained 

the numerosity requirement.’” (quoting Smith v. Hercules, Inc., 2003 WL 1580603, at *4 

(Del. Super. Ct. Jan. 31, 2003)).

5 Defendants do not dispute that Plaintiffs have satisfied the numerosity requirement. See

Indep. Directors’ Answering Br. in Opp’n to Pls.’ Mot. for Class Certification.

6 Capitalized terms have the meaning as defined in the Order Granting in Part and Denying 

in Part Motions for Summary Judgment. D.I. 534.

7 Defendants also do not dispute that Plaintiffs meet the commonality requirement. 

See Indep. Directors’ Answering Br. in Opp’n to Pls.’ Mot. for Class Certification.
5

c) Rule 23(a)(3) requires that “the claims or defenses of the 

representative parties are typical of the claims or defenses of the class.”8“The test 

of typicality is that the legal and factual position of the class representative must not 

be markedly different from that of the members of the class.”9 To meet the typicality 

requirement, the class representatives’ claims should arise from the same event or

course of conduct and advance the same legal theories as the other class members’ 

claims.10 Plaintiffs’ claims in this action rely on the same legal theories as those of 

the other class members—namely, the Director Defendants’ breaches of fiduciary 

duties and conduct in violation of the DGCL—involving the same allegedly

defective disclosures and compensation decisions/plans. Should Plaintiffs put forth 

a money damages theory at trial that changes Plaintiffs’ position in comparison to 

that of the other class members, the class could be divided into several sub classes 

at that time or, if necessary, be decertified.

11 For now, I am satisfied that Plaintiffs 

meet the typicality requirement of Rule 23(a)(3).

 

8 Ct. Ch. R. 23(a)(3).

9 Leon N. Weiner & Assocs., Inc. v. Krapf, 584 A.2d 1220, 1225 (Del. 1991) (internal 

quotation omitted).

10 See id. at 1226.

11 See Emerald P’rs v. Berlin, 1991 WL 244230, at *4 (Del. Ch. Nov. 15, 1991) (“To the 

extent that plaintiff[s’] claims are not typical of the claims of stockholders who acquired 

their shares after the record date, that problem is better addressed by a possible subdivision 

of the class with a separate representative rather than a blanket denial of certification.”

(citing Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure Civil 2d 
6

d) Rule 23(a)(4) requires that the class representative “fairly 

and adequately protect the interests of the class.”12 To meet this requirement, the 

class representative must retain competent, experienced counsel, have interests that 

are not antagonistic to the interests of the other class members and possess a basic 

understanding of the case.13 To start, it is of no moment that Spagnola and Desert 

States together hold only 300 shares of Ebix common stock, with Spagnola holding 

200 shares and Desert States holding 100 shares. This Court has repeatedly 

determined that holders of a similar number of shares (in relation to the total 

outstanding shares) are capable of vigorously prosecuting a case.14 Defendants’ 

allegation that Desert States sold a significant number of its shares after the initiation

 

§ 1790 (1986))); Johnson v. GEICO Cas. Co., 310 F.R.D. 246, 254 (D. Del. 2015) 

(reevaluating “whether continued class certification as to both liability and damages is 

appropriate” after presentation of damages theory).

12 Ct. Ch. R. 23(a)(4).

13 See In re TD Banknorth S’holders Litig., 2008 WL 2897102, at *2 (Del. Ch. July 29, 

2008). 

14 Van de Walle v. Salomon Bros., Inc., 1997 WL 633288, at *2 (Del Ch. Oct. 2, 1997) 

(finding that a shareholder plaintiff with only 100 shares and $388 in potential losses could

adequately represent the class); Glosser v. Cellcor, Inc., 1995 WL 106527, at *3 (Del. Ch. 

Mar. 10, 1995) (appointing as class representative a shareholder with 200 shares); Joseph 

v. Shell Oil Co., 1985 WL 21125, at *3 (Del. Ch. Feb. 8, 1985) (holding that “[w]ith 100 

shares at risk [plaintiff] ha[d] sufficient interest in the litigation to ensure that he w[ould]

zealously protect the rights of [other members of the class]”); Van De Walle v. Unimation, 

Inc., 1983 WL 8949, at *1, *6 (Del. Ch. Dec. 6, 1983) (designating plaintiff who held 15 

shares as class representative even though his “method of acquiring his shares of stock may 

leave something to be desired”). 
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of this litigation is similarly insufficient to defeat certification absent a showing that 

this conduct was somehow related to the litigation.15 No such showing has been 

made here. 

e) Plaintiffs are members of the class, have retained counsel 

experienced in litigation of this type, have demonstrated a sufficient understanding 

of the claims, facts and issues in this litigation,16 have fairly and adequately 

 

15 See, e.g., N.J. Carpenters Pension Fund v. InfoGROUP, 2013 WL 610143, at *6 (Del. 

Ch. Jan. 17, 2013) (designating plaintiff who sold all but 100 shares following initiation of 

the litigation as class representative). 

16 I note that Defendants’ principal objection with regard to adequacy focuses on 

Amalgamated and its purported lack of understanding of the claims it has asserted in this 

litigation. Amalgamated’s 30(b)(6) witness deposition testimony reveals that 

Amalgamated understands the gravamen of the claims it has asserted but does not, perhaps, 

appreciate the legal nuances of those claims. See, e.g., Transmittal Aff. of Veronica 

Bartholomew in Supp. of the Indep. Directors’ Answering Br. in Opp’n to Pls.’ 

Supplemental Br. in Further Supp. of their Mot. for Class Certification (“Bartholomew 

Aff.”), Ex. 2 (Eleanor Innes Dep., D.I. 460) at 114:12–25 (“Q. In your own words, can 

you describe the allegations in the complaint and the supplement to the complaint? . . . 

A. So broadly, what we’re looking to do is invalidate the ABA, to invalidate the bylaws, 

to fix the corporate structure of Ebix and to claw back any director -- excuse me, any 

executive compensation. In addition . . . also declare the SAR agreement invalid, the stock 

appreciation rights.”); id. at 115:2–12 (“Q. One of the things you testified you were seeking 

to do is invalidate the ABA. Are you aware that the ABA has been terminated? . . . 

THE WITNESS: With Exhibit A, with the SAR agreement, it is based on the ABA and it 

also says that the ABA is valid so there’s still some question as to which is which from my 

perspective.”); id. at 116 (explaining that while she had not read the SAR Agreement, she 

had read the supplement to the FAC and, thus, knew about the SAR Agreement related 

claims). To be sure, this testimony illustrates that Amalgamated’s 30(b)(6) did not fully 

grasp all aspects of the claims that are at issue in this litigation. In this sense, I suppose 

one could reasonably conclude that Amalgamated is not the perfect class representative. 

But “perfection” is not the standard when evaluating whether a plaintiff “qualif[ies] as a 

class representative.” N.J. Carpenters Pension Fund, 2013 WL 610143, at *5; see id. 

(“Absent a conflict between the proposed class representative and members of the class, 

and absent incompetent or unable counsel, it would seem that an unusual set of facts is 
8

protected and represented the interests of the class thus far and can reasonably be 

expected to continue to do so. Nothing indicates that Plaintiffs’ interests conflict 

with those of the class.17 Rule 23(a)(4)’s adequacy requirement is, therefore,

satisfied.

Rule 23(b)

4. A class may be certified only if, in addition to satisfying 

Rule 23(a), it fits into one of the three categories specified in Court of Chancery 

Rule 23(b). Plaintiffs request certification under both Rule 23(b)(1) and

Rule 23(b)(2). 

5. “Typically an action challenging the propriety of director

action . . . is certified as a (b)(1) or (b)(2) class because plaintiff[s] seek[] equitable 

 

required in order for the Court to deny a plaintiff the role of class representative. Such 

instances might occur when a proposed class representative knows practically nothing 

about the case or seemingly has no interest or involvement in the litigation.”). 

17 Defendants allege, “Desert States is uniquely unqualified to serve as class representative 

because it has delegated the authority to settle this class action to a non-party, its investment 

manager, Wedge Capital,” citing, in support, Desert State’s Investment Management

Agreement ¶ 9. Indep. Directors’ Answering Br. in Opp’n to Pls.’ Mot. for Class 

Certification 21. Paragraph nine of Desert State’s Investment Management Agreement, 

however, gives Desert States’ investment manager, at most, the authority to settle “class 

action securities litigation.” Transmittal Aff. of Jessica R. Kunz in Supp. of the Indep.

Directors’ Answering Br. in Opp’n to Pls.’ Mot. for Class Certification, Ex. E. (Investment 

Management Agreement) ¶ 9. This limited delegation, if it is a delegation, does not support 

a finding that Desert States has abdicated its authority with regard to this litigation. 

Defendants’ remaining arguments with regard to adequacy pertain to claims that are no 

longer part of this action. 
9

relief . . . , because all members of the stockholder class are situated precisely 

similarly with respect to every issue of liability . . . and because to litigate the matters 

separately would subject the defendant[s] to the risk of different standards of conduct 

with respect to the same action.”18

6. Certification under Rule 23(b)(1) is appropriate if “prosecution 

of separate actions by or against individual members of the class would create a risk 

of: (A) Inconsistent or varying adjudications with respect to individual members of 

the class which would establish incompatible standards of conduct for the party 

opposing the class, or (B) Adjudications with respect to individual members of the 

class which would as a practical matter be dispositive of the interests of the other 

members not parties to the adjudications or substantially impair or impede their 

ability to protect their interests.”

19

7. The proposed class, in hoc sensor, is properly certified under 

Rule 23(b)(1). The prosecution of separate actions by individual members of the 

class would create a risk of inconsistent and varying adjudications with respect to 

individual members of the class—for example, determinations with regard to 

whether Defendants breached their fiduciary duty by adopting the SAR Agreement 

 

18 In re Mobile Commc’ns Corp. of Am., Inc., Consol. Litig., 1991 WL 1392, at *15 

(Del. Ch. Jan. 7, 1991), aff’d, 608 A.2d 729 (Del. 1992).

19 Ct. Ch. R. 23(b)(1)(A), (B); see also Allen v. El Paso Pipeline GP Co., L.L.C., 2014 WL 

2086371, at *2 (Del. Ch. May 19, 2014).
10

or making awards under the 2010 Plan. Differing and inconsistent determinations

could establish incompatible standards of conduct for the Defendants. Additionally, 

adjudications with respect to individual members of the class, as a practical matter,

would either be dispositive of the interests of the other members of the class who are 

not parties to the adjudications, or substantially impair or impede their ability to 

protect their interests.

8. Certification pursuant to Rule 23(b)(2) is warranted where the 

action concerns the alleged breaches of fiduciary duty by corporate directors 

affecting the stockholder class as a whole and the particular facts pertaining to any 

individual class member will not have any bearing on the appropriate remedy.20 

Accordingly, certification under Rule 23(b)(2) is also appropriate here; the 

Defendants allegedly acted on grounds generally applicable to the class—among 

other things, by allegedly breaching their fiduciary duties to all Ebix stockholders—

making final injunctive, declaratory, rescissory or other equitable relief with respect 

to the class as a whole appropriate. 

9. Finally, contrary to Defendants’ position, class certifications 

under Rules 23(b)(1) and (2) permit damages recoveries as long as adjudication is 

 

20 See Ct. Ch. R. 23(b)(2); In re Resorts Int’l S’holders Litig., 570 A.2d 259, 269–70 (Del. 

1990); Nottingham P’rs v. Dana, 564 A.2d 1089, 1096–97 (Del. 1989).
11

uniform21 and the primary relief sought is equitable in nature.22 Plaintiffs seek, inter 

alia, rescission and cancellation of grants under several compensation plans. To the 

extent Plaintiffs present a uniform damages theory, therefore, certification under 

both rules is appropriate. Moreover, as previously noted, if any damages theory is 

not uniform, then Rule 23(c)(1) allows the Court to alter or amend class certification 

before it reaches its decision on the merits.

The Class is Certified

10. This action is hereby certified as a class action pursuant to 

Delaware Court of Chancery Rules 23(a) and 23(b)(1) and (2) without opt-out rights. 

The Class shall consist of all holders of Ebix common stock and their successors in 

 

21 See, e.g., Sunrise P’rs Ltd. P’ship v. Rouse Props., Inc., 2016 WL 7188104, at *5 n.19 

(Del. Ch. Dec. 8, 2016) (“[O]ur courts will certify a class as a non-opt-out class under Court 

of Chancery Rule 23(b)(1) even where the class is entitled to only monetary relief in cases 

where all members of the class are similarly situated with respect to issues of liability and 

damages and share identical incentives.”); Turner v. Bernstein, 768 A.2d 24, 33–34 (Del. 

Ch. 2000) (finding class treatment appropriate under Rule 23(b)(1) given the “challenge to 

a single course of conduct by the defendants that affects the stockholder class equally in 

proportion to their ownership interest in the enterprise”); see also Noerr v. Greenwood, 

2002 WL 31720734, at *6 (Del. Ch. Nov. 22, 2002) (finding that even though the plaintiff 

sought compensatory damages as a result of defendants’ alleged breach of fiduciary duty, 

the action was more appropriately certified under Rule 23(b)(1) than under Rule 23(b)(3) 

because “any damages to which class members would be entitled would be based solely 

upon the number of shares that they own”). 

22 See In re Celera Corp. S’holder Litig., 59 A.3d 418, 433 (Del. 2012) (“A Rule 23(b)(2) 

class may seek monetary damages in addition to declaratory or injunctive relief, so long as 

the claim for equitable relief predomina[tes].” (citation omitted)); Nottingham, 564 A.2d 

at 1096–97 (affirming certification of a class under Rule 23(b)(2) that included a claim for 

monetary damages where the primary relief sought was equitable relief).
12

interest—excluding Defendants named in this lawsuit and any person, firm, trust, 

corporation or other entity related to or affiliated with any of the Defendants.

11. Spagnola, Desert States and Amalgamated are hereby certified 

as Class Representatives. Counsel representing the Class Representatives are hereby 

designated as follows: 

The law firms PRICKETT, JONES & ELLIOTT, P.A., 1310 N. 

King Street, Wilmington, Delaware 19801; and GRANT & 

EISENHOFER P.A., 123 Justison Street, Wilmington, 

Delaware 19801, are appointed Class Counsel.

 /s/ Joseph R. Slights III 

 Vice Chancellor