Stanford University Law School - Securities Class Action Clearinghouse
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MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN (128661)
MARK SOLOMON (151949)
JOY ANN BULL (138009)
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
- and -
KIMBERLY C. EPSTEIN (169012)
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545
WEISS & YOURMAN
JOSEPH H. WEISS
JACK I. ZWICK
551 Fifth Avenue
Suite 1600
New York, NY 10176
Telephone: 212/682-3025
- and -
KEVIN J. YOURMAN (147159)
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
Telephone: 310/208-2800
BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414
Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
BROOKE GRAUBART, et al., On Behalf of
Themselves and All Others Similarly Situated,
Plaintiffs,
vs.
INSIGNIA SOLUTIONS PLC, et al.,
Defendants.
___________________________________
No. C-97-20265-JW(EAI)
CLASS ACTION
DATE: April 20, 1998
TIME: 9:00 a.m.
COURTROOM: The Honorable
James Ware
NOTICE OF MOTION AND MEMORANDUM
IN SUPPORT OF FINAL APPROVAL OF SETTLEMENT
I. PRELIMINARY STATEMENT
II. THE STANDARDS FOR JUDICIAL APPROVAL OF CLASS ACTION SETTLEMENTS
III. THE SETTLEMENT IS FAIR, REASONABLE AND ADEQUATE
A. The Parties Could Identify The Strengths And Weaknesses Of Their Cases
B. The Settlement Appropriately Balances The Risks Of Litigation And The Benefit To The Class Of A Certain Recovery
1. Continued Litigation Posed Substantial Risk In Establishing Liability And Damages
2. Balancing The Certainty Of An Immediate Recovery Against The Expense And Likely Duration Of Trial Favors Settlement
C. The Recommendations Of Experienced Counsel Heavily Favor Approval Of The Settlement
D. Reaction Of The Class Supports Approval Of The Settlement
IV. CONCLUSION
TO: ALL PARTIES AND THEIR ATTORNEYS OF RECORD
PLEASE TAKE NOTICE that, pursuant to an Order of the Court filed January 22, 1998, on April 20, 1998, at 9:00 a.m., or as soon thereafter as counsel may be heard, at the United States Courthouse, 280 South First Street, San Jose, California, before The Honorable James Ware, United States District Judge, Representative Plaintiffs will and hereby move for a judgment finally approving the settlement of this action and dismissing it with prejudice. Representative Plaintiffs' motion is based on their Memorandum in Support of Final Approval of Settlement, the declarations of counsel for Representative Plaintiffs, the Stipulation of Settlement dated as of August 8, 1997, all other pleadings and matters of record, and such additional evidence or argument as may be presented at the hearing.
Representative Plaintiffs respectfully submit this memorandum of points and authorities in support of their motion for final approval of the settlement of this action for a total cash consideration of $8,000,000. This settlement is the result of vigorous case prosecution and arm's-length settlement negotiations and in Representative Plaintiffs' counsel's view appropriately reflects the relative strengths of the parties' respective claims and defenses and the risks inherent in continuing the litigation.
This case arose out of the alleged conduct of defendants which plaintiffs assert misled the investing public about the true value of Insignia Solutions PLC ("Insignia") American Depository Shares ("ADS") during the period beginning on November 14, 1995 through and including February 26, 1997. The complaint in this Court asserted claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934. The related complaint captioned Sharma v. Insignia Solutions PLC, et al., Case No. CV757058 (Santa Clara Superior Court April 3, 1996), asserted claims for violations of Cal. Corp. Code §§25400-25402, 25500-25502; Cal. Civ. Code §§1709-1710; and §§11 and 15 of the Securities Act of 1933 on behalf of persons who purchased Insignia ADSs between November 14, 1995 and January 2, 1996. An overview of both cases, including the discovery efforts, motion practice and the negotiations leading to this global settlement are set forth in the Declaration of Mark Solomon in Support of Plaintiffs' Application For Approval of Settlement and For an Award of Attorneys' Fees and Reimbursement of Expenses ("Solomon Declaration"), filed herewith. The Court is respectfully referred to the Solomon Declaration for a discussion of the history of the litigation.
Pursuant to an Order of the Court dated January 22, 1998, notices were mailed to approximately 4,564 class members. In addition, a summary notice was published in Investor's Business Daily on February 20, 1998. The last day to file objections was April 3, 1998. No objections to the settlement have been received. Therefore, the settlement appears to enjoy the support of the members of the class.
Representative Plaintiffs' counsel firmly believe that this settlement is fair, reasonable and adequate based on their investigation and analysis of the evidence and past experience in similar actions and recommend that it be approved by this Court.(1)
It is well established in the Ninth Circuit that "voluntary conciliation and settlement are the preferred means of dispute resolution." Officers for Justice v. Civil Service Commission, 688 F.2d 615, 625 (9th Cir. 1982). Class action suits readily lend themselves to compromise because of the difficulties of proof, the uncertainties of the outcome and the typical length of the litigation. "There is an overriding public interest in settling and quieting litigation," and this is "particularly true in class action suits." Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir. 1976); Utility Reform Project v. Bonneville Power Admin., 869 F.2d 437, 443 (9th Cir. 1989).(2)
In approving a proposed settlement of a class action under Federal Rule of Civil Procedure Rule 23(e), the Court must find that the proposed settlement is "fair, adequate and reasonable:"(3)
Although Rule 23(e) is silent respecting the standard by which a proposed settlement is to be evaluated, the universally applied standard is whether the settlement is fundamentally fair, adequate and reasonable. The district court's ultimate determination will necessarily involve a balancing of several factors which may include, among others, some or all of the following: the strength of plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.
Officers for Justice, 688 F.2d at 625 (citations omitted). Accord
Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993); Church v. Consolidated Freightways, Inc., [1993 Transfer Binder] Fed. Sec. L. Rep (CCH) ¶97,743, at 97,540 (N.D. Cal. 1993); In re Washington Public Power Supply System Sec. Litig., 720 F. Supp. 1379 (D. Ariz. 1989), aff'd sub nom. Class Plaintiffs v. Seattle, 955 F.2d 1268 (9th Cir. 1992); In re United Energy Corp. Solar Power Modules Tax Shelter Invest. Sec. Litig., [1989 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶94,376, at 92,460 (C.D. Cal. 1989).
The district court must exercise "sound discretion" in approving a settlement. Torrisi, 8 F.3d at 1375; Ellis v. Naval Air Rework Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980), aff'd, 661 F.2d 939 (9th Cir. 1981). However, "[w]here, as here, a proposed class settlement has been reached after meaningful discovery, after arm's length negotiation, conducted by capable counsel, it is presumptively fair." M. Berenson Co. v. Faneuil Hall Marketplace, Inc., 671 F. Supp. 819, 822 (D. Mass. 1987). 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 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. The Ninth Circuit defines the limits of the inquiry to be made by the court in the following manner:
Therefore, 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.
Id. (emphasis in original).
As explained below and in the Solomon Declaration, application of these criteria shows that this settlement warrants the Court's approval. Moreover, "[t]he recommendations of plaintiffs' counsel should be given a presumption of reasonableness." Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979). The presumption of reasonableness in this action is fully warranted because the settlement is the product of arm's-length negotiations conducted by capable counsel who are well-experienced in securities law litigation. M. Berenson Co., 671 F. Supp. at 822; Ellis, 87 F.R.D. at 18 ("the fact that experienced counsel involved in the case approved the settlement after hard-fought negotiations is entitled to considerable weight"); Manual for Complex Litigation, Third §30.42 (3d ed. 1995).(4) Here, it is the considered judgment of experienced counsel that this settlement is a fair, reasonable and adequate settlement of this case.
"'[T]he stage of the proceedings and the amount of discovery completed'" is a factor which the courts consider in determining the fairness, reasonableness and adequacy of a settlement. In re Warner Communications Sec. Litig., 618 F. Supp. 735, 741 (S.D.N.Y. 1985), aff'd, 798 F.2d 35 (2d Cir. 1986) (citation omitted); Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975); see also Weinberger, 698 F.2d at 74; Ellis, 87 F.R.D. at 18; Boyd, 485 F. Supp. at 616-17.
Representative Plaintiffs' counsel conducted an extensive review and analysis of the information obtained through their investigation and informal discovery efforts. In addition, defendants provided a substantial amount of information to support their view of the case during confidential settlement discussions. At the time the parties reached an agreement to settle, plaintiffs had sufficient information to assess the merits of their claims. Plaintiffs' counsel also consulted accounting and damage experts to assist them in their analysis of the issues. The litigation had reached the stage where "the parties certainly have a clear view of the strengths and weaknesses of their cases." Warner Communications, 618 F. Supp. at 745; Ellis, 87 F.R.D. at 18; Boyd, 485 F. Supp. at 616-17. Therefore, sufficient evidence was before the parties and their counsel to permit them to consider the strengths and weaknesses of their respective cases.
To determine whether the proposed settlement is fair, reasonable and adequate, the Court must balance against the continuing risks of litigation, the benefits afforded to members of the class and the immediacy and certainty of a substantial recovery. Girsh, 521 F.2d at 157; Boyd, 485 F. Supp. at 616-17; Warner Communications, 618 F. Supp. at 741. In the context of approving class action settlements, courts attempting to balance these factors have recognized "that stockholder litigation is notably difficult and notoriously uncertain." Lewis v. Newman, 59 F.R.D. 525, 528 (S.D.N.Y. 1973) (footnote omitted); see also Republic National Life Ins. Co. v. Beasley, 73 F.R.D. 658 (S.D.N.Y. 1977). A balance of these factors in this case supports approval of the settlement.
To prevail on the §10(b) claims at trial, for example, plaintiffs would have the burden of establishing certain elements of liability. To establish liability plaintiffs would have to prove, inter alia, that the alleged misstatements were material, TSC Industries v. Northway, Inc., 426 U.S. 438 (1976), and made with scienter (actual knowledge or reckless disregard for the truth), Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976). Accordingly, in order to prevail in the federal court litigation, plaintiffs would have to prove defendants participated in the public dissemination of misleading information, that the information was material to the investor in determining whether to invest in Insignia ADSs, that the information would have materially affected the price of the ADSs, and that defendants withheld information either with actual intent to deceive, manipulate or defraud, or that defendants recklessly disregarded these facts and their consequences. See id. Although plaintiffs believe their claims have merit and that they could have prevailed, further litigation to establish liability when defendants have denied any wrongdoing posed significant risks.
At the time the agreement to settle was reached, defendants' motion to dismiss was pending in this Court. In moving to dismiss the complaint, defendants argued that the complaint failed to satisfy the standard of the Private Securities Litigation Reform Act of 1995 ("PSLRA") for pleading scienter. Because the law is not yet settled as to what is required to satisfy the pleading requirement of PSLRA, it is possible that the complaint would not have survived the motion to dismiss. In addition, defendants argued that the misstatements relied upon by plaintiffs were not actionable because, among other things, they were accurate statements of historical fact, vague statements of optimism, or are surrounded by cautionary language. In short, defendants' motion to dismiss created a substantial risk that the case would not progress beyond the pleading stage.
Assuming that some or all of plaintiffs' claims survived the motion to dismiss and the likely motion for summary judgment, at trial defendants could be expected to continue to vigorously deny the allegations and assert that they have no liability to plaintiffs. Moreover, because discovery was stayed under PSLRA, plaintiffs also faced the further risk that subsequent developments during the course of discovery might undermine plaintiffs' ability to establish liability.
The risks of establishing liability posed by the conflicting testimony and evidence would be exacerbated by the following risks inherent in this type of litigation:
(a) The unpredictability of a lengthy and complex jury trial -- witnesses could suddenly become unavailable or jurors could react to the evidence in unforeseen ways;
(b) The risk that the jury would find that the misrepresentations were not material; and
(c) The risk that the jury would find that defendants reasonably believed in the appropriateness of their actions at the time and that plaintiffs failed to prove that defendants acted with scienter.
In addition, plaintiffs believe that they would be able to establish they suffered substantial damages as a result of defendants' conduct. However, plaintiffs also faced a real risk in establishing damages because there would likely be starkly contrasting testimony by each side's accounting and damage experts. Defendants' experts would likely contend that much or all of the loss experienced by class members was due to other market factors unrelated to any conduct of defendants, thereby limiting plaintiffs' potential recovery. See Warner Communications, 618 F. Supp. at 744-45 (approving settlement where "it is virtually impossible to predict with any certainty which testimony would be credited, and ultimately, which damages would be found to have been caused by actionable, rather than the myriad of nonactionable factors such as general market conditions"); see Chatelain v. Prudential-Bache Sec., 805 F. Supp. 209, 214 (S.D.N.Y. 1992); Behrens v. Wometco Enterprises, Inc., 118 F.R.D. 534, 542 (S.D. Fla. 1988), aff'd, 899 F.2d 21 (11th Cir. 1990). Thus, even if plaintiffs prevailed in establishing liability, additional risks would remain in establishing the existence of damages.
The general measure of damages in §10(b) cases is the "out-of-pocket" measure. Randall v. Loftsgaarden, 478 U.S. 647, 662 (1986) (citing Blackie v. Barrack, 524 F.2d 891, 909 (9th Cir. 1975)); see also Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1436 (9th Cir. 1987). Under this measure, a defrauded buyer recovers the difference between the price paid for the security and the "fair value" of the security (i.e., value absent the fraud) as of the date of purchase. See Green v. Occidental Petroleum Corp., 541 F.2d 1335, 1344 (9th Cir. 1976); Sirota v. Solitron Devices, Inc., 673 F.2d 566, 577-78 (2d Cir. 1982); see generally Arnold S. Jacobs, The Measure of Damages in Rule 10b-5 Cases, 65 Geo. L.J. 1093, 1099-1102 (1977).
Because "fair value" presumably will differ from the market price of the security (the latter being inflated by the alleged fraud), expert testimony is necessary in order to fix the amount -- and indeed the existence -- of actual damages. See, e.g., Sirota, 673 F.2d at 576-78. Such an evaluation often is based not only on stock price history but on other, more elusive factors as well, including corporate asset value, cash flow, income and growth prospects for the future, industry and economic trends, the quality of management, the nature and amount of liabilities and many other variables. At a trial, defendants' damage experts predictably would reach far different conclusions about true value than plaintiffs' experts. Therefore, in the unavoidable "battle of experts," it is impossible to predict with any certainty which arguments would find favor with the jury.
In summary, although plaintiffs believe that their case is meritorious and that they would ultimately prevail in establishing liability and damages, their counsel's experience has taught them how the above-mentioned factors can make the outcome of a trial extremely uncertain. Moreover, even if plaintiffs were to prevail at trial, risks to the class remain. For example, as this Court knows, in In re Apple Computer Sec. Litig., [1991 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶96,252, at 91,341 (N.D. Cal. 1991), the jury rendered a verdict for plaintiffs after an extended trial. Based upon the jury's findings, recoverable damages could have exceeded $100 million. However, weeks later, this Court overturned the verdict, entering judgment n.o.v. for the individual defendants, and ordered a new trial with respect to the corporate defendant. In another case, the class won a jury verdict and a motion for j.n.o.v. was denied, but on appeal the judgment was reversed and the case dismissed. Backman v. Polaroid Corp., 910 F.2d 10 (1st Cir. 1990). See also West Virginia v. Chas. Pfizer & Co., 314 F. Supp. 710, 743-44 (S.D.N.Y. 1970) ("[i]t is known from past experience that no matter how confident one may be of the outcome of litigation, such confidence is often misplaced"), aff'd, 440 F.2d 1079 (2d Cir. 1971); Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir. 1979) (reversing $87 million judgment after trial); Trans World Airlines, Inc. v. Hughes, 312 F. Supp. 478 (S.D.N.Y. 1970), modified, 449 F.2d 51 (2d Cir. 1971), rev'd, 409 U.S. 363 (1973) (overturning $145 million judgment after years of appeals). Therefore, careful consideration of the above risks further supports approval of the settlement as fair, adequate and reasonable.
The immediacy and certainty of a recovery is a factor for the Court to balance in determining whether the proposed settlement is fair, adequate and reasonable. E.g., Girsh, 521 F.2d at 157. Courts consistently have held that "[t]he expense and possible duration of the litigation are major factors to be considered in evaluating the reasonableness of [a] settlement." Milstein, 600 F. Supp. at 267; Officers for Justice, 688 F.2d at 626; Boyd, 485 F. Supp. at 616-17; Bullock v. Administrator of Estate of Kircher, 84 F.R.D. 1, 10 (D.N.J. 1979). Therefore, the present settlement must also be balanced against the expense of achieving a more favorable result at trial. Young v. Katz, 447 F.2d 431, 433 (5th Cir. 1971).
If not for this settlement, the case would have continued to be fiercely contested by all parties. Defendants have demonstrated a commitment to defend the case through appeal and trial, if necessary, and are represented by well-respected and capable counsel. A trial would further occupy a number of attorneys for many weeks and would require substantial expert testimony on both sides. While Representative Plaintiffs' counsel believe they would ultimately prevail on the merits, the incursion of additional and very substantial expense due to a possible trial would severely deplete any eventual recovery. Moreover, a judgment favorable to plaintiffs would, in light of the highly contested nature of virtually every aspect of the case, unquestionably be the subject of post-trial motions and appeals, which could prolong the case for several more years. See, e.g., Warner Communications, 618 F. Supp. at 745 (delay from appeals is a factor to be considered). Therefore, delay, not just at the trial stage, but through post-trial motions and that appellate process as well, could force members of the class to wait years for any recovery, further reducing its value. Accordingly, early settlement of this litigation before significant additional resources have been expended will benefit the class. As a result of this settlement, class members will be compensated now rather than risk a wholly speculative payment of a potentially larger amount years from now.
Moreover, as the Ninth Circuit has made clear, the very essence of a settlement agreement is compromise, "'a yielding of absolutes and an abandoning of highest hopes.'" Officers for Justice, 688 F.2d at 624 (citation omitted).
"Naturally, the agreement reached normally embodies a compromise; in exchange for the saving of cost and elimination of risk, the parties each give up something they might have won had they proceeded with litigation . . . ."
Id. (citation omitted); Ellis, 87 F.R.D. at 19 (as a quid pro quo for not having to undergo the uncertainties and expenses of litigation, the plaintiffs must be willing to moderate the measure of their demands). Accordingly, the fact that the class potentially could have achieved a greater recovery at trial is not dispositive and does not preclude the Court from finding that the settlement is within a "range of reasonableness" that is appropriate for approval. E.g., Warner Communications, 618 F. Supp. at 745.
Experienced counsel, negotiating at arm's length, have weighed these factors and endorse the settlement. As courts have stated, the view of the attorneys actively conducting the litigation, while not conclusive, "is entitled to significant weight." Fisher Bros. v. Cambridge-Lee Industries, Inc., 630 F. Supp. 482, 488 (E.D. Pa. 1985); Ellis, 87 F.R.D. at 18 ("the fact that experienced counsel involved in the case approved the settlement after hard-fought negotiations is entitled to considerable weight"). In approving a settlement, courts often focus on the "negotiating process by which the settlement was reached." Weinberger, 698 F.2d at 74; Warner Communications, 618 F. Supp. at 741.
This action has been litigated by experienced and competent counsel on both sides of the case. The law firms representing plaintiffs are well known for their experience and success in class action securities litigation. Defense counsel are also from law firms with an abundance of experience in this type of litigation. That such qualified and well-informed counsel, operating at arm's length, all endorse the settlement as being fair, reasonable and adequate to the class heavily favors this Court's approval of the settlement.
Notices of the settlement were sent to approximately 4,564 members of the class. The time period for objecting to the settlement expired on April 3, 1998. There have been no objections to the settlement. The absence of any objections by class members is an important factor in evaluating the fairness, reasonableness and adequacy of the settlement and supports approval of the settlement. Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974); Warner Communications, 618 F. Supp. at 746; Milstein, 600 F. Supp. at 267. Moreover, even a small number of objections to a settlement should not prevent approval of the settlement. Marshall, 550 F.2d at 1178; Hill v. Art Rice Realty Co., 66 F.R.D. 449, 456 (N.D. Ala. 1974) (only one objection is compelling evidence that the attitude of the overwhelming percentage of the class affected by the settlement supports the reasonableness and appropriateness of the settlement), aff'd, 511 F.2d 1400 (5th Cir. 1975).
This settlement is a good result, given the presence of skilled counsel for all parties, the complexity and expense if this litigation were to continue and eventually go to trial, the significant present benefit of the settlement to all members of the class and the arm's-length negotiations themselves. Moreover, the judicial system and the public benefit from the prompt resolution of potentially complex litigation. Therefore, plaintiffs respectfully request that this Court approve the settlement of this litigation as fair, reasonable and adequate.
DATED: April 9, 1998
Respectfully submitted,
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN
MARK SOLOMON
JOY ANN BULL
______________________________
JOY ANN BULL
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
KIMBERLY C. EPSTEIN
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545
WEISS & YOURMAN
JOSEPH H. WEISS
JACK I. ZWICK
551 Fifth Avenue
Suite 1600
New York, NY 10176
Telephone: 212/682-3025
WEISS & YOURMAN
KEVIN J. YOURMAN
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
Telephone: 310/208-2800
BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414
Attorneys for Plaintiffs
INSIGN-2\DLM13145.brf
DECLARATION OF SERVICE BY MAIL
PURSUANT TO NORTHERN DISTRICT LOCAL RULE 23-2(c)(2)
I, the undersigned, declare:
1. That declarant is and was, at all times herein mentioned, a citizen of the United States and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested in the within action; that declarant's business address is 600 West Broadway, Suite 1800, San Diego, California 92101.
2. That on April 10, 1998, declarant served the NOTICE OF MOTION AND MEMORANDUM IN SUPPORT OF FINAL APPROVAL OF SETTLEMENT by depositing a true copy thereof in a United States mailbox at San Diego, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List and that this document was forwarded to the following designated Internet site at:
http://securities.milberg.com
3. That there is a regular communication by mail between the place of mailing and the places so addressed.
I declare under penalty of perjury that the foregoing is true and correct. Executed this 10th day of April, 1998, at San Diego, California.
______________________________
PILAR COLINA
1. In reviewing this settlement under Rule 23, the Court is not required to substitute its business judgment for that of these counsel. See Steinberg v. Carey, 470 F. Supp. 471 (S.D.N.Y. 1979); the settlement should be approved if it is within a "range of reasonableness," Newman v. Stein, 464 F.2d 689, 693 (2d Cir. 1972).
2. The law always favors the compromise of disputed claims, including those asserted in stockholder class actions. See, e.g., Williams v. First Nat'l Bank, 216 U.S. 582, 595 (1910); In re Pacific Enterprises Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995); MWS Wire Industries, Inc. v. California Fine Wire Co., 797 F.2d 799, 802 (9th Cir. 1986); and Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982).
3. Pacific Enterprises, 47 F.3d at 377; Officers for Justice, 688 F.2d at 625; Marshall v. Holiday Magic, Inc., 550 F.2d 1173, 1178 (9th Cir. 1977).
4. Accord Malchman v. Davis, 761 F.2d 893, 903 (2d Cir. 1985); Milstein v. Huck, 600 F. Supp. 254, 262 (E.D.N.Y. 1984).