In re 3D Systems Securities Litigation

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MEMORANDUM & ORDER

IN RE 3D SYSTEMS SECURITIES LITIGATION —_—_91_cy-1920 (NGG) (TAM)

NICHOLAS G. GARAUFIS, United States District Judge.

This is a securities class action against 3D Systems Corporation

brought by a putative class of investors in the company’s stock.

Plaintiffs filed the operative Amended Complaint on September

13, 2021. (Am. Compl. (Dkt. 43).) On December 19, 2022, Plain-

tiffs filed with the court a copy of a proposed settlement

agreement, along with a motion for entry of an order preliminar-

ily approving settlement and establishing notice procedures. (See

Proposed Settlement Agreement (Dkt. 55}; Mot. for Prelim. Set-

tlement Approval (Dkt. 56).) The court referred this motion to

Magistrate Judge Taryn A. Merkl on December 22, 2022. (De-

cember 22, 2022, Order Referring Mot.) Magistrate Judge Merkl

issued the annexed R&R on June 5, 2023, recommending that

the court: (1) grant Plaintiffs’ motion for preliminary settlement

approval; (2) enter the proposed order preliminarily approving

the class action settlement; (3) direct the parties to issue notice

as proposed; (4) appoint The Rosen Law Firm as class counsel

for purposes of settlement; and (5) schedule a final settlement

hearing for a specific date, time, and place. (R&R (Dkt. 63).)

No party has objected to Judge Merkl’s R&R and the time to do

so has passed. See Fed. R. Civ. P. 72(b)(2). Therefore, the court

reviews this R&R for clear error. See Rubinstein & Assocs., PLLC v.

Entrepreneur Media, Inc., 554 F. Supp. 3d 506, 510 (E.D.N.Y.

2021). The court notes only that evenly dividing the $21,500 in-

centive award five ways results in $4,300 per recipient. (See R&R

at 16 (calculating this to be $5,375 per recipient).)! With the ex-

ception of this one minor modification, the court ADOPTS the

R&R in full.

Plaintiffs’ motion for preliminary settlement approval is thus

GRANTED. The court also enters the attached order preliminarily

approving a class action settlement, directs the parties to issue

notice as outlined in Judge Merkl’s R&R, and appoints The Rosen

Law firm as class counsel for the purposes of settlement. Lastly,

the court schedules a final settlement hearing for November 21,

2023 at 10:00 a.m. in Courtroom 4D South.

SO ORDERED.

Dated: Brooklyn, New York

July | ¥ 2023

s/Nicholas G. Garaufis

INTCHOLAS G. GARAURG

United States District Judge

1 This calculation in the R&R does actually impact the distribution of the

incentive award to Plaintiffs. The size and distribution of the incentive

award will be finalized at a later date. Nonetheless, the court notes the

correct calculation for the sake of accuracy.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK x

IN RE 3D SYSTEMS SECURITIES □□□ AN ON

21-CV-1920 (NGG) (TAM)

on XK

TARYN A. MERKL, United States Magistrate Judge:

This is a consolidated, putative class action brought against 3D Systems

Corporation; its Chief Executive Officer, Vyomesh I. Joshi, and his successor, Jeffrey A.

Graves; and its Chief Financial Officer, Todd A. Booth, and his successors, Wayne

Pensky and Jagtar Narula. (See Amend. Compl, ECF:No=43, {{ 25-30.) Plaintiffs

Darrell Cline, Troy Kehoe, Alfonzo Woods, Osiel Herrera Martinez, and Diane Van

Alstyne each purchased 3D Systems common stock between May 6, 2020 and March 5,

2021 (the “Class Period”), and have filed suit on behalf of all similarly situated

purchasers. (Id. J 1.) Plaintiffs claim monetary harm resulting from Defendants’ alleged

violations of Sections 10(b) and 20(a) of the Exchange Act of 1934, 15 'U.S.C.-§§ 78)(b)

and 78t(a), and Rule 10b-5, □□□□□□□□□□□□□□□□□□□□□□□ Ud. |] 206-21.)

Currently pending before the Court is Plaintiffs’ motion for preliminary

settlement approval, which the Honorable Nicholas G. Garaufis referred to the

undersigned magistrate judge for a report and recommendation. As explained below,

the Court respectfully recommends granting Plaintiffs’ motion.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY:

3D Systems is a 3D printing and digital manufacturing company that “sold 3D

printers, materials used for 3D printing, printer software, and on-demand printing

services” during the Class Period. (Amend. Compl, ECF No. 43, { 2.) 3D Systems

securities were traded during the Class Period on the New York Stock Exchange under

the ticker symbol “DDD.” (Id. { 25.) Joshi served as CEO of the company from April 4,

2016 to May 25, 2020, and was succeeded by Graves, who served as CEO for the

remainder of the Class Period. (Id. ¢{ 26, 28.) Booth served as CFO from September 3,

2019 until May 14, 2020, and was succeeded by Pensky, who served until September 13,

2020. (Id. TF 27, 29.) Pensky, in turn, was succeeded by Narula, who served as CFO for

the remainder of the Class Period. Ud. 29-36.)

Plaintiffs allege that Defendants made false or misleading statements and

material omissions in several of the company’s public filings issued during the Class

Period, which ultimately led to the fall of 3D Systems’ stock price and investor losses.

(See generally id.) Specifically, Plaintiffs point to quarterly reports filed with the SEC on

May 6, 2020, August 5, 2020, and November 5, 2020, each attesting to the effectiveness

of the company’s internal control over financial reporting. (id. □□ 95, 119, 154.) 3D

Systems subsequently issued press releases on February 23, 2021, and March 1, 2021,

each indicating that the company’s annual report for the 2020 fiscal year would be

delayed on account of “certain internal control deficiencies.” (Id. ag 182, 185.) On March

2, 2021, following the filing of a Form NT 10-K, indicating that 3D Systems could not file

1 The Court recites the facts as alleged in the amended complaint. See Mikhlin v. Oasmia

Pharm. AB, No. 19-CV-4349 (NGG) (RER), 2027 .WL1259559, at *1 (E.D.N.Y. Jan. 6, 2021).

Defendants deny these allegations and dispute liability. (See Proposed Settlement Agreement

(“Settlement”), ECF No. 55, § LD; Tr. of May 2, 2023 Fairness Hearing (Fairness Hearing”), ECF

No. 62, at 33:25-34:8,)

its annual report, and an earnings call, 3D Systems’ stock price began to fall, dropping

19.6% by market close and another 11.8% the following day. Ud. {q 14-15; 190-91.)

3D Systems ultimately filed its annual report on March 5, 2021, the last day of the

Class Period. (id. { 192.) For the first time, 3D Systems disclosed an accounting error

that had resulted in an inflated profit margin over the first three quarters of the 2020

fiscal year. (Id.) The market responded accordingly. (See id. {J 194-95.)

Plaintiffs filed suit in April 2021, alleging causes of action under Section 10(b) of

the Exchange Act and Rule 10b-5 against all Defendants, and Section 20{a) of the

Exchange Act against Joshi, Booth, Graves, Pensky, and Narula. (See id. at 206-221;

see also Apr. 9, 2021 Compl., ECF-'No.1; Apr. 29, 2021 Compl., Case No. 21-CV-2383

(NGG) (TAM), ECE'No=.) Specifically, investors filed two separate actions, which the

Court consolidated on July 13, 2021, appointing Darrell Cline as lead plaintiff and The

Rosen Law Firm as Lead Counsel? (See generally Mem. and Order, ECF.No- 41.)

Thereafter, Defendants moved to dismiss the action on May 16, 2022. (See Letter □

Mot. for Pre-Mot. Conf., ECF No. 46; Jan. 7, 2022 ECF Minute Entry; Mot. to Dismiss,

ECF No: 50.) Defendants argued that Plaintiffs had failed to state a claim to relief and

that certain putative class members’ claims were barred under the Private Securities

Litigation Reform Act (PSLRA). (See Mem. in Supp. of Mot. to Dismiss, ECE No. 50-1, at

1-3.)

After fully briefing the motion, the parties requested a stay in order to attempt

resolution through mediation. (See Letter Mot. to Stay, ECF No. 51; see also Opp’n Mem.,

later-filed action, No. 21-CV-2383, was initiated by Ramesh Kumar, whom the

Court notes was not named as a plaintiff in the Amended Complaint filed after case

consolidation. (See Amend. Compl, ECF No. 43.) During the fairness hearing held on May 2,

2023, Plaintiffs’ counsel represented that Mr. Kumar still qualifies as a class member for

purposes of settlement. (See Fairness Hearing, ECF No, 62, at 5:20-6:8.)

ECF No: 50-9; Reply in Supp. of Mot. to Dismiss, ECF-No.:50-16.) Judge Garaufis

granted the stay, and the parties later filed a status report on October 28, 2022,

indicating that they had reached a settlement in principle. (Aug. 22, 2022 ECF Order;

Oct. 28, 2022 Status Report, ECF:No.:53.)

Plaintiffs filed a copy of their proposed settlement agreement on December 19,

2022, along with a motion for preliminary settlement approval and a proposed order.

(See Proposed Settlement Agreement (“Settlement”), ECF-No.55; Mot. for Prelim.

Settlement Approval, ECF No. 56; Proposed Order (“Preliminary Approval Order”),

ECF No, 56-1; Mem. in Supp. of Mot. for Prelim. Settlement Approval (“Supp. Mem.”),

ECE 57.) Per these submissions, the parties “have agreed to settle this putative class

action for $4,000,000 by the terms stated in the” proposed settlement agreement. (Supp.

Mem., ECF No: 57-at‘'t.) Plaintiffs represent that the agreement “was achieved after

substantial arm’s-length negotiations with the aid of Jed Melnick, Esq., an experienced

JAMS®! mediator,” whom the parties retained. (Id.; see also Letter Mot. to Stay, ECF No,

51; Settlement, ECF No. 55, § LB (stating that the parties “participated in an in-person,

all-day mediation” on October 12, 2022).) On December 22, 2022, Judge Garaufis

referred Plaintiffs’ pending motion to the undersigned magistrate judge “to hold a

3JAMS, previously known as Judicial Arbitration and Mediation Services, Inc.,

represents itself to be “the world’s largest private alternative dispute resolution (ADR)

provider.” About Us, JAMS, https: / / www .jamsadr.com/about/ (last visited June 1, 2023). Mr.

Melnick represents that he “has resolved over one thousand disputes,” Jed D. Melmick, Esq.,

JAMS, https: / / www.jamsadr.com/melnick/ (last visited June 1, 2023), and courts in this circuit

have observed that Mr. Melnick is “a highly qualified mediator,” Gordon v. Vanda Pharms. Inc.,

No. 19-CV-1108 (FB) (LB), 2022' WE 4296092, at *4 (E.D.N.Y. Sept. 15, 2022) (quotation marks

omitted); see also Fulton Cnty. Enpps.’ Ret. Sys. ex rel. Goldman Sachs Grp. Inc. v. Blankfein, No. 19-

CV-1562 (VSB), 2022: WL 4292894, at *3 (S.D.NLY. Sept. 16, 2022). (See also Fairness Hearing, ECF

No. 62, at 3:24—4:7 (“The parties wanted to retain a mediator that could bring benefit to the

discussion[] [and] understood the complexities of similar cases.”).)

fairness hearing under Federal Rule of Civil Procedure 23(e) and for a Report and

Recommendation.” (Dec. 22, 2022 ECF Referral Order.)

The Court subsequently held a fairness hearing on May 2, 2023. (See May 2, 2023

ECF Minute Entry and Order; Tr. of May 2, 2023 Fairness Hearing (“Fairness Hearing”),

ECF'No: 62.) Lead Counsel represented Plaintiffs at the hearing; counsel for Defendants

were also present. (See May 2, 2023 ECF Minute Entry and Order; Fairness Hearing, ECF

No. 62, at 1.) The parties discussed Plaintiffs’ pending motion, including the likelihood

of final settlement approval and class certification, as well as the parties’ proposed

notice procedures. (See generally Fairness Hearing, ECF No- 62.) In light of Plaintiffs’

representation in their motion papers that, in addition to the proposed settlement

agreement, the parties had entered into a “supplemental agreement,” the Court directed

the parties to submit the supplemental agreement for review under seal. (Supp. Mem.,

ECE-NG:'57, at 16; see Fairness Hearing, ECF at 25:25-26:8.) The Court also

expressed a concern regarding the parties’ proposed notices ~— specifically, that certain

of the notices did not clearly indicate that class members could appear through their

own attorney if desired, as required by Federal Rule of Civil Procedure 23(c)2)(B)Gv).

(See Fairness Hearing, ECF No: 62, at 17:1-6, 20:18-22:1.) Accordingly, the Court

directed the parties to submit revised notices and took the pending motion under

advisement. (See May 2, 2023 ECF Minute Entry and Order.)

Plaintiffs filed the parties’ supplemental agreement under seal on May 3, 2023.

(See Stipulation, ECF-N6. 60.) Plaintiffs also filed a supplemental letter and revised

proposed notices, (See May 3, 2023 Letter, ECENo:61; Revised Summary Notice, ECF

No. 6121: Revised Postcard Notice, ECF No-61-3.)

DISCUSSION

Plaintiffs “request that the Court: (1) preliminarily certify the Settlement Class;

(2) preliminarily approve the Settlement as set forth in the [agreement; and| (3) approve

the [proposed] form and manner of notice.” (Supp. Mem., ECE No. 57, at-21.) Plaintiffs

also request an order appointing Lead Counsel as class counsel for purposes of

settlement. (See Proposed Order, ECF No. 56-1, { 4; see also Supp. Mem., ECE No. 57,-at

5-6.)

Under Federal Rule of Civil Procedure 23(e), “[t]he claims, issues, or defenses of

a certified class — or a class proposed to be certified for purposes of settlement — may

be settled, voluntarily dismissed, or compromised only with the court’s approval.” “At

the preliminary approval stage, a court makes an initial evaluation of fairness prior to

notifying the class... Rosenfeld v. Lenich, No. 18-CV-6720 (NGG) (PR), 2021-WL

508339, at *3 (E.D.N.Y. Feb. 11, 2021).

Preliminary approval is guided by a “likelihood standard,” i.e., “whether the

parties have shown that the court will likely be able to grant final approval and certify

the class.” In re Payment Card Interchange Fee & Merchant Discount Antitrust Litig., 330

PRD. 28 n.21 (E.D.N.Y. 2019); see also Fed: R: Civ: P. 23(e)(1)(B)G)-Gi). “If the court

determines that notice to class members is ‘justified by the parties’ showing’” as to the

likelihood of final approval and class certification, “it ‘must direct notice in a reasonable

manner to all class members who [would] be bound by the proposal.” Rosenfeld, 2021

WE 508339, at *4 (quoting Fed: R. Civ. P, 23(e)(1)(B)). The court must also appoint class

counsel for purposes of settlement. Payment Card, 330 FAR.D, at 58.

The Court begins with an analysis of the likelihood of final settlement approval

and class certification, then assesses the proposed form and manner of notice, and

concludes with appointment of class counsel.

I. Likelihood of Final Settlement Approval.

A. Legal Principles

In assessing the likelihood of final approval, courts “look{] to the factors

contained in the text of Rule 23(e)(2).” Payment Card, 330-F-R.D.'at 28. Under Rule

23(e)(2) courts must consider whether:

(A) the class representatives and class counsel have adequately

represented the class;

(B) the proposal was negotiated at arm’s length;

(C) the relief provided for the class is adequate, taking into account:

(i) the costs, risks, and delay of trial and appeal;

(ii) the effectiveness of any proposed method of distributing relief to

the class, including the method of processing class-member claims;

(iti) the terms of any proposed award of attorney’s fees, including

timing of payment; and

(iv) any agreement required to be identified under Rule 23(e)(3); and

(D) the proposal treats class members equitably relative to each other.

Fed: R: Civ--P:23(e)(2). “[P]aragraphs (A) and (B) are ‘procedural’ factors that address

‘the conduct of the litigation and of the negotiations leading up to the proposed

settlement,’ whereas... paragraphs (C) and (D) are ‘substantive’ factors that address

the ‘relief that the settlement is expected to provide to class members.” Rosenfeld, 2024

WEL'508339, at *3 (quoting Fed. Civ. P: 23 advisory committee’s note to 2018

amendment).

‘The substantive factors are supplemented by the nine Grinnell factors, which

“courts in this Circuit have traditionally considered” when “evaluating the fairness,

reasonableness, and adequacy of the proposed settlement.” Id. (citing City of Detroit v.

Grinnell Corp., 495 F:2d 448,463 (2d Cir. 1974), abrogated on other grounds by Goldberger v.

Integrated Res., Inc., 209° F.3d 43 (2d Cir. 2000)); Payment Card, 330 F.R:D. at 29 (noting the

“significant overlap” between the Grinnell and substantive factors). The Grinnell factors

include:

(1) the expense, complexity, and likely duration of the litigation; (2) the

class’s reaction to the settlement; (3) the stage of the proceedings and

amount of discovery completed; (4) the risks of establishing damages;

(5) the risks of establishing liability; (6) the risks of maintaining the class

throughout the litigation; (7) defendants’ ability to withstand greater

judgment; (8) the range of reasonableness of the settlement amount

considering the best possible recovery; and (9) the range of reasonableness

of the settlement amount{,] given the risks of litigation.

Rosenfeld, 2021 WL 508339, at “3 (citing Grinnell, 495 F.2d at 463).

B. Procedural Factors

1. Adequate Representation

“In determining the adequacy of class representatives and counsel, courts

consider ‘whether (1) plaintiff[s’] interests are antagonistic to the interests of other

members of the class and (2) plaintiff[s’] attorneys are qualified, experienced and able to

conduct the litigation.” Rosenfeld, 2021 W1L'508339, at *4 (quoting Cordes & Co. Fin.

Servs. v. A.G. Edwards & Sons, Inc., 502-F.3d°91,99 (2d Cir. 2007)); see Payment Card, 330

E:R:D: at 30 n.25 (explaining that “Rule 23(a)(4) case law ... guide[s]” the Rule

93(e)(2)(A) analysis). Class representatives “must be part of the class and possess the

same interest and suffer the same injury as the [other] class members.” Wal-Mart Stores,

Inc. v. Dukes, 564.U.S.338; 348-49 (2011) (quoting E. Tex. Motor Freight Sys., Inc. v.

Rodriguez, 431°U.S. 395, 403 (1977)); see also Payment Card, 330-F.R-D. at 34 (explaining

that the Due Process Clause requires adequate representation). As for class counsel, “Fal

court reviewing a proposed settlement must pay close attention to the negotiating

process, to ensure that... counsel have possessed the experience and ability, and have

engaged in the discovery, necessary to effective representation of the class’s interests.”

D’Amato v. Deutsche Bank, 236-F.3d-78,85 (2d Cir. 2001); see Fed: R. Civ. P.23 advisory

committee’s note to 2018 amendment (“For example, the nature and amount of

discovery in this or other cases ... may indicate whether counsel negotiating on behalf

of the class had an adequate information base.”).

Here, the record illustrates that Plaintiffs’ interests are aligned with those of the

proposed class. Plaintiffs seek to represent “all persons and entities that purchased the

publicly-traded common stock of [3D Systems] from May 6, 2020, to March 5, 2021,”

and Plaintiffs themselves purchased 3D Systems stock during the Class Period.

(Amend. Compl., ECF No. 43, 1.) Plaintiffs also claim financial harm resulting from

Defendants’ alleged violations of the Exchange Act — harm that the other proposed

class members are also alleged to have suffered. (Id. at { 214.) Additionally, during the

fairness hearing, Lead Counsel represented that Plaintiffs themselves “were very active

in this case,” “communicated regularly with” their attorneys, and, particularly, “were

very involved with the approval of the [proposed] settlement.” (Fairness Hearing, ECF

No. 62, at'8:11-16.) Absent any indication that Plaintiffs’ interests in this action “are

antagonistic to the interests of other members of the class,” the record demonstrates that

Plaintiffs are well positioned to represent the proposed class. Cordes, 502°F.3d at 99.

The Court similarly finds that Plaintiffs are adequately represented by their

attorneys, having previously observed that Lead Counsel has “extensive experience

handling securities actions.” (Mem. & Order, ECF No. 41, at 12; see also Rosen Law

Biography, ECF N6.:26-4.) The Court further notes that Lead Counsel has on several

occasions been appointed class counsel for the purpose of settlement. See, e.¢., Puddu v.

6D Glob. Techs., Inc., No. 15-CV-8061 (AJN), 2021: WL 1910656, at “1 (S.D.N.Y. May 12,

2021) (discussing prior preliminary settlement approval); Burns v. FalconStor Software,

Inc., No. 10-CV-4572 (ERK) (CLP), 2013:WL-12432583, at “4 (E.D.N.Y. Oct. 9, 2013), report

and recommendation adopted, Oct. 28, 2013 ECF Order. Both the pleadings and motion

papers demonstrate a thorough investigation by Lead Counsel into the underlying facts

and applicable law. (See generally Amend. Compl, ECF No. 43; see also Fairness Hearing,

ECF No: 62, at 8:17-9:1 (explaining that Lead Counsel “retained investigators,

accounting experts, as well as damages experts” in preparing the amended complaint,

and responded to Defendants’ pre-motion conference letter and subsequent motion to

dismiss).) Lead Counsel also participated in “an all-day [mediation] session,” during

which “negotiations were hard-fought” and the parties “exchang[ed] frank views over

the course of many hours.” (Supp. Mem., ECF No. 57, at 21-12.)

Plaintiffs acknowledge that “there was no formal discovery conducted” prior to

settlement, a fact that could call into question whether Lead Counsel has adequately

represented the interests of the proposed class. (Fairness Hearing, ECE Nor 627at'9:15—

16.) The Court is mindful, however, that Defendants promptly moved to dismiss after

Plaintiffs filed the amended complaint, thereby triggering the discovery stay mandated

by the PSLRA. See 15°U.S.C.§ 77z-4(b)(1). (See Letter Mot. for Pre-Mot. Conf., ECF-No.

46; Mot. to Dismiss, ECF’No. 50.) Given that statutory limitation, and in light of Lead

Counsel’s extensive pre- and post-filing efforts to investigate and substantiate the

alleged violations, the Court finds that Plaintiffs are being represented by “qualified,

experienced” legal counsel. Cordes, 502:P.3d at 99.

2. Arnt’s Length Negotiation

“A class settlement reached through arm’s-length negotiations between

experienced, capable counsel knowledgeable in complex class litigation is entitled to a

presumption of fairness.” Rosenfeld, 2021 □□□ 508339, at *5 (quotation marks omitted).

Likewise, “a court-appointed mediator’s involvement in pre-certification settlement

10

negotiations helps to ensure that the proceedings were free of collusion and undue

pressure.” D'Amato, 236 F:3d at 85.

As to the parties’ selected mediator, Jed D. Melnick, several courts in this circuit

have held that Mr. Melnick’s involvement has supported a finding that settlement

negotiations were at arm’s length. See Gordon v. Vanda Pharm. Inc., No. 19-CV-1108 (FB)

(LB), 2022 WL 4296092, at *4 (E.D.N.Y. Sept. 15, 2022); Fulton Cty. Emps.’ Ret. Sys. ex rel.

Goldman Sachs Grp. Inc. v. Blankfein, No. 19-CV-1562 (VSB), 2022 WL 4292894, at *3

(S.D.N.Y. Sept. 16, 2022). Additionally, as noted above, Plaintiffs represent that the

mediation was an “all-day” proceeding and that “negotiations were hard-fought.”

(Supp. Mem., ECF'No-57,-at 11-12.) Based on the record in this case, as well as the

parties’ representations during the Fairness Hearing, the Court perceives no “evidence

or indicia suggesting that the negotiations were collusive.’” Gordon, 2022-WL 4296092, at

“4 (quoting Simerlein v. Toyota Motor Corp., No. 17-CV-1091 (VAB), 2019: WL 1435055, at

*13 (D. Conn. 2019)). The Court therefore finds that the parties’ proposed settlement

was the result of arm’s length negotiations.

C. Substantive Factors

1. Adequate Relief

a. Costs, Risks, and Delay of Trial and Appeal

The first factor in assessing whether the proposed settlement provides adequate

relief for the putative class is an evaluation of the “costs, risks, and delay of trial and

appeal.” Fed. R. Civ. P.23(e)(2)(C)G@). This factor ““subsumes several Grinnell factors,’

including the complexity, expense and likely duration of litigation, the risks of

establishing liability, the risks of establishing damages, and the risks of maintaining the

class through trial” (factors 1, 4, 5, and 6). Rosenfeld, 2021 508339, at *5 (quoting

Payment Card, 330 B.R:D.at36). Put simply, courts must assess whether the proposed.

11

settlement “results in substantial and tangible present recovery, without the attendant

risk and delay of trial.” Id. (quoting Payment Card, 330.F.R.D- at-36).

Plaintiffs have submitted the parties’ proposed settlement agreement, which

indicates that the settlement amount is $4 million. (See Settlement, ECF -No55,

§ I1.C.A.2.0.) Plaintiffs acknowledge that this amount “equates to approximately 1% of

the total maximum potential damages calculated by Plaintiffs’ expert, an estimated

$414.1 million.” (Supp. Mem., ECF No.57,-at‘12.) They clarify, however, that the $414.1

million figure represents Plaintiffs’ best-case scenario — “if everything went [their]

way” up to and at trial. (Fairness Hearing, ECF No: 62;-at'13:3-10.) Plaintiffs therefore

argue that the $4 million settlement amount is reasonable given the costs, risks, and

likely duration of litigation, which, in their view, “would take at least several more

years to resolve.” (Supp. Mem., ECR'No-57; at 13.) For example, Plaintiffs assert that the

costs of document production, hosting fees, and depositions in this case “could run to

hundreds of thousands of dollars.” Ud.) As to the “substantial risks” of continued

litigation, Plaintiffs point to Defendants’ pending motion to dismiss, the overall

challenges of litigating under the PSLRA, and the unique difficulties of locating

witnesses in this case, “in light of the fact that [3D Systems] cut 20% of its workforce

during the alleged Class Period.” (id. at 14-15.)

The Court agrees that the costs, risks, and likely duration of continuing to litigate

this matter are significant and that a settlement would result in a tangible present

recovery, This factor therefore weighs in favor of preliminary approval of the parties’

proposed settlement.

b. Effectiveness of Proposed Method of Distributing Relief

Second, the Court must evaluate the parties’ “proposed method of distributing

relief to the class, including the method of processing class-member claims.” Fed: R.

12

Give 23(@)\(2)(C)Gi). “An allocation formula need only have a reasonable, rational

basis” and “need not be perfect.” Payment Card, 330-F.R.D: at 40 (quotation marks

omitted). As to claims processing, the proposed method should “deter or defeat

unjustified claims’ without imposing an undue demand on class members.” Rosenfeld,

2021 WE 508339, at “6 (quoting Fed.-R: Civ: P. 23 advisory committee’s note to 2018

amendment).

The parties have submitted a Proposed Plan of Allocation, indicating that

claimants are to receive a “pro rata share of the Net Settlement Fund based upon” their

respective losses. (Long Notice, ECF No.'55-2, at 6.) As a general matter, shares of the

fund will be calculated by evaluating each claimant's estimated loss per share based on

when the claimant purchased the shares, when the shares were sold, and the inflation of

the stock price per share at the time of purchase and sale. (See id. at 7-10.) No

distribution will be made to claimants “where the potential distribution amount is less

than ten dollars ($10.00).” (id. at 6.) Claimants will be required to report their losses by

submitting a proof of claim form, which the parties’ designated claims processor will

review to determine each claimant's respective pro rata share of the settlement amount.

(See id, at 10.) “This allocation plan appears to be rational and fair, as it treats class

members equitably while taking into account variations in the magnitude of their

injuries.” Rosenfeld, 2021 WI508339, at *6. Likewise, it appears that the claims

processing method imposes a minimal burden on claimants and will adequately filter

unjustified claims to settlement funds. The Court therefore recommends finding that the

proposed methods of processing claims and distributing relief are rational and fair.

c. Proposed Award of Attorneys’ Fees

The third factor is an assessment of “the terms of any proposed award of

attorneys’ fees, including timing of payment.” Fed.-R. Civ. PP B(O2K(CO)Gz). “Courts

13

may award attorneys’ fees in common fund cases under either the ‘lodestar’ method or

the ‘percentage of the fund’ method.” Wal-Mart Stores, Inc. v. Visa ULS.A., Inc., 396 F.3d

96,121. 2d Cir. 2005) (quoting Goldberger, 209-F.3d at 50).

Here, Plaintiffs’ counsel “intends to seek an award of attorneys’ fees of no more

than one-third of the Settlement Amount and recover litigation expenses in an amount

not to exceed $50,000.” (Supp. Mem., ECF'No.57; at-15.) “Courts in this Circuit

routinely find that requests for attorney’s fees totaling one-third of the settlement fund

are well within the range of reasonableness” — particularly “in cases with funds of less

than $10 million.” Rosenfeld, 2021 WI. 508339, at “6 (quotation marks omitted).

Assuming that Lead Counsel’s request for litigation expenses is documented and

substantiated, the Court finds that the requested award for attorneys’ fees will likely be

found to be reasonable.

d. Other Agreements

The fourth factor requires courts to consider “any agreement required to be

identified under Rule 23{e)(3),” Le., “any agreement made in connection with the

proposal.” Fed: Civ: P:23(e\(2)(C)iv), (3). Rule 23(e)(3) is aimed at revealing

“undertakings that, although seemingly separate, may have influenced the terms of the

settlement by trading away possible advantages for the class in return for advantages

for others,” namely, the representative plaintiffs or their attorneys. Fed. R. Civ. P: 23

advisory committee’s note to 2003 amendment; see also David F. Herr, Annotated

4 The Court notes that Lead Counsel’s requested award is, of course, subject to

modification at final settlement approval. See Rosenfeld, 2021-WE 508339, at *7. Lead Counsel

should be prepared to submit contemporaneous time records to facilitate a cross-check against

the lodestar. See In re PPDAI Grp. Inc. Secs. Litig., No. 18-CV-6716 (TAM), 2022 WL 198491, at

*14-17 (E.D.N.Y. Jan. 21, 2022); see also Marion S, Mishkin Law Off. v. Lopalo, 767-F.3d 144,-148-49

(2d Cir. 2014) (discussing the “strict rule” that any request for attorneys’ fees must be

“accompanied by contemporaneous time records” (quotation marks omitted)).

14

Manual for Complex Litigation § 21.631 (4th ed. 2022) (“Requiring the parties to file the

complete agreement might elicit comments from class members and facilitate judicial

review.”).

Here, Plaintiffs have entered a “supplemental agreement” with Defendants, filed

under seal as instructed during the fairness hearing. (Supp. Mem., ECF'No-57,'at-16; see

also Stipulation, ECF No. 60.) Having reviewed the parties’ filing, the Court finds that

Plaintiffs have accurately described the terms of the supplemental agreement in their

motion for preliminary settlement approval. Specifically, the supplemental agreement

provides that 3D Systems shall have “the option to terminate the Settlement” if “the

ntmber of shares of [3D Systems] common stock represented by . . . opt out[]

[claimants] equals or exceeds a certain number.” (Supp. Mem., ECF.No. 57, at 16.) The

precise terms of the supplemental agreement, including the number of shares necessary

to trigger the option to terminate, are to be kept “confidential to avoid creating

incentives for a small group of class members to opt out solely to leverage the threshold

to exact an individual settlement.” Ud.) The Court notes that such agreements are

“standard in securities class action settlements.” Christine Asia Co. v. Yun Ma, No. 15-

MD-2631 (CM) (SDA), 2019°Wi5257534, at *15 (S.D.N.Y. Oct. 16, 2019). “Given the

specific function of this separate agreement, it does not appear to bear upon the overall

fairness of the settlement agreement itself.” In re PPDAI Grp. Inc. Secs. Litig., No. 18-CV-

6716 (TAM), 2022 WE 198491, at *13 (E.D.N.Y. Jan. 21, 2022). The Court therefore finds

that the supplemental agreement is unlikely to preclude final settlement approval.

2. Equitable Treatment

The proposed settlement must “treat[] class members equitably relative to each

other.” Féd Re Civ. P!23(e)(2)(D). In making this assessment, “the court may weigh

‘whether the apportionment of relief among class members takes appropriate account of

15

differences among their claims, and whether the scope of the release may affect class

members in different ways that bear on the apportionment of relief.’” Rosenfeld, 2021

WE 508339. (quoting Fed R-Civ-P:23 advisory committee’s note to 2018 amendment).

As explained above, under the Proposed Plan of Allocation, the settlement funds are to

be distributed on a pro rata basis. “In this way, the agreement appropriately and fairly

accounts for... point(s] of differentiation among class members’ claims.” Id. at *7.

The Court further notes that the proposed settlement agreement contemplates an

incentive award to Plaintiffs, paid out of the settlement fund. (See Settlement, ECF:No:

55, V9 2.1, 6.1.) Although the exact amount for the potential incentive award is not

specified in the agreement, the Long Notice provides that “Lead Counsel will ask the

Court to award... a total case contribution award to Plaintiffs not to exceed $21,500.”

(Long Notice, ECF No. 55-2,at 1; see also id. at 12 (“Lead Counsel will apply to the Court

for...an award to Plaintiffs not to exceed $21,500 in total.”).) “Incentive awards are not

uncommon in class action cases and are within the discretion of the court.” Torres v.

Toback, Bernstein & Reiss LLP, No. 11-CV-1368 (NGG) (VVP), 2014: WE 1330957, at *3

(E.D.N.Y. Mar. 31, 2014) (quotation marks omitted). At this juncture, given the size of

the settlement fund, the Court finds it unlikely that a requested award of up to $21,500

total (split five ways among Plaintiffs, for up to $5,375 each) will preclude final

settlement approval, assuming that Plaintiffs demonstrate “special circumstances” for

such an award.* Id.

5 Special circumstances include “the personal risk (if any) incurred by the plaintiff

applicant in becoming and continuing as a litigant, the time and effort expended by that

plaintiff in assisting in the prosecution of the litigation or in bringing to bear added value (e.g.,

factual expertise), any other burdens sustained by that plaintiff in lending himself or herself to

the prosecution of the claim, and of course, the ultimate recovery.” Torres v. Toback, Bernstein &

Reiss LLP, No. 11-CV-1368 (NGG) (VVP), 2074 WT1330957, at *3 (E.D.N.Y. Mar. 31, 2014)

(quotation marks omitted); see id. (“[C]lass actions in .. . securities or antitrust litigation

16

3. Stage of Proceedings and Amount of Discovery Completed (Grinnell Factor 3)

“This [Grinnell] factor requires the Court to consider whether the parties have

adequate information about their claims.” Charron v. Pinnacle Grp. N.Y. LLC, 874 F.

Supp: 2d 179, 198 (S.D.N.Y. 2012). “To approve a proposed settlement,” however, “the

Court need not find that the parties have engaged in extensive discovery.” In re Austrian

& German Bank Holocaust Litig., 80 F.Supp: 24164, (S.D.N.Y. 2000), The Court need

only ensure that the parties have sufficiently investigated the facts such that the

settlement is fair and reasonable. See id.

As the parties acknowledge, “there has been no formal discovery in this case.”

(Supp. Mem., ECF No::57; at 17.) Notwithstanding that, Plaintiffs assert that they

“conducted a thorough and informed investigation” of Defendants’ alleged violations

prior to filing suit. (/d.) At the fairness hearing, Plaintiffs represented that their

investigation included a thorough review of relevant “SEC filings, analyst reports,

news,” and any other “readily available” sources, in addition to hiring “accounting

experts” to assist in the preparation of the pleadings. (Fairness Hearing, ECF No. 62,-at

9:21-10:4.) The Court again notes that, in light of Defendants’ pending motion to

dismiss, discovery was stayed under the PSLRA. See supra. Under these circumstances,

and given that the well-developed allegations of the pleadings substantiate Plaintiffs’

representations as to the investigative efforts that have been undertaken in this matter,

generally do not carry the same risk to named plaintiffs.”), The reasonableness and amount of

the incentive award may also depend on the average amount ultimately paid to similarly

situated individual claimants out of the settlement fund. Cf id. at “4 (reducing proposed

incentive award based, in part, on estimated compensation to be paid to other class members).

Plaintiffs “are encouraged to be mindful of [these] concerns when” making any future request

for an incentive award. Id.

6 The second Grinnell factor, “the class’s reaction to the settlement” cannot be assessed at

this time. Rosenfeld, 2021 WI: 508339, at *3; see id. at *4 n.2 (declining to assess this factor at the

preliminary approval stage).

17

the Court finds that Plaintiffs were adequately informed about their claims prior to

reaching a proposed settlement.

4. Defendants’ Ability to Withstand a Greater Judgment (Grinnell Factor 7)

“Under the Grinnell analysis, the [C]ourt also considers Defendants’ ability to

withstand a greater judgment than that provided for in the proposed settlement.”

Rosenfeld, 2021: WI 508339, at *7, Plaintiffs represent that securities filings submitted by

3D Systems in December 2022 indicate that the company has “cash [or] cash equivalents

and short-term investments of 568.7 million.” (Fairness Hearing, ECF-No- 62,-at 28:6—

19.) This suggests, at least at first blush, that Defendants could withstand a greater

judgment than the proposed $4 million settlement amount.

Plaintiffs further represent, however, that the company’s prior filings illustrate

significant losses since 2021. (See id. at 28:6-15 (“That was even down from the end of

2021, when they had 734 million.”).} Plaintiffs also have “concerns that there are still

some operational issues at” 3D Systems, such that a favorable judgment at trial “could

potentially decimate the company and put them out of business.” (Id. at 28:15-29:2.)

The Court notes that a defendant's “ability to withstand a greater judgment,

standing alone, does not suggest that the settlement is unfair.” Charron, 874-F. Supp. 2d

at‘201 (quotation marks omitted). Accordingly, although the proposed $4 million

settlement amount may be less than Defendants’ theoretical capacity to pay, based on

Plaintiffs’ representations regarding the financial outlook of 3D Systems moving

forward, the Court finds that this factor is not likely to preclude settlement approval.

5. Range of Reasonableness of Settlement Fund (Grinnell Factors 8 and 9)

The Court next considers “the range of reasonableness of the settlement fund in

light of [both] the best possible recovery” and “the attendant risks of litigation.” Charron

v. Wiener, 731:F:3d 241; 247 (2d Cir. 2013); see Payment Card, 330 F-R-D. at 48 (noting that

18

these “two Grinnell factors ... are often combined for the purposes of analysis”). To

calculate the best possible recovery, courts “assume complete victory on both liability

and damages as to all class members on every claim asserted against each defendant in

the [a]ction.” Payment Card, 330 F.R.D. at 48 (quotation marks omitted). The risks of

litigation include “the uncertainties of law and fact in any particular case and the

concomitant risks and costs necessarily inherent in taking any litigation to completion.”

Wal-Mart Stores, 396 F.3d at 119.

Here, as stated above, Plaintiffs aver that the settlement amount “equates to

approximately 1% of the total maximum potential damages.” (Supp. Mem., ECF 'No.57;

at-12.) That said, “|t]he fact that a proposed settlement may only amount to a fraction of

the potential recovery does not... mean that the proposed settlement is grossly

inadequate and should be disapproved.” Grinnell, 495'F 2d at 455. “[T]here is no reason,

at least in theory, why a satisfactory settlement could not amount to a hundredth or

even a thousandth part of a single percent of the potential recovery.” Id. at 455 n.2. This

is because the “best possible recovery” may not be “a realistic” one. Cagan v. Anchor Sav.

Bank FSB, No. 88-CV-3024 (CPS), 1990 73423, at “13 (E.D.N.Y. May 22, 1990).

Accordingly, it remains important to evaluate the settlement amount “in light of the

strengths and weaknesses of plaintiffs’ case.” Rodriguez v. CPI Aerostructures, Inc., No.

20-CV-0982 (ENV) (CLP), 2023-WL 2184496, at *16 (E.D.N.Y. Feb. 16, 2023) (quotation

marks omitted). Given the risks of litigation described above, including the risk of an

adverse ruling for Plaintiffs on Defendants’ pending motion to dismiss, the heightened

_ legal standards under the PSLRA, and the challenges of locating relevant witnesses, the

19

Court recommends finding that the parties’ settlement amount falls within a reasonable

range.”

* * * * *

On balance, the Court concludes that both the procedural and substantive factors

set forth in Rule 23 and Grinnell suggest that the parties’ proposed settlement is fair and

reasonable.

II. Likelihood of Class Certification

A. Legal Principles

“In order to conclude that giving notice to the putative class is justified, the court

must also determine that it will likely be able to certify the class for purposes of

judgment on the proposal” under Rule 23(a) and (b). Rosenfeld, 2021. WL 508339, at “8. It

is the burden of the party seeking class certification to “affirmatively demonstrate”

compliance with these rules. fre Am. Int'l Grp., Inc. See. Litig., 689:F.3d-229, 237 (2d Cir.

2012).

Rule 23(a) sets forth the familiar “four prerequisites for class certification”:

(1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation.

Rosenfeld, 2021 WL 508339, at *8; see Fed -RsCiv. P, 23(a). “In addition to the explicit

requirements of Rule 23(a), the class must satisfy the implied requirement of

7 The Court further notes that the approximately 1% settlement amount proposed in this

case, although somewhat lower than the median settlement for cases with similar estimated

losses, is not dramatically so. See NERA Economic Consulting, Recent Trends in Securities Class

Action Litigation: 2022 Full-Year Review, at 17,

https: □ / www.nera.com/ content / dam /nera/ publications /2023 / PUB_2022_Full_Year_Trends.

pdf (last visited June 1, 2023) (estimating a 1.6% median settlement amount for similarly valued

cases filed and settled from December 2011 to December 2022); see also Cornerstone Research,

Securities Class Action Settlements: 2022 Review and Analysis, at 4,

https: / / www.cornerstone.com / wp-content/ uploads / 2023 /03 /Securities-Class-Action-

Settlements-2022-Review-and-Analysis.pdf (last visited June 1, 2023).

20

ascertainability.” Payment Card, 330:F-R.D- at 50 (citing In re Petrobras Sec., 862: F.3d 250,

266 (2d Cir. 2017).

Rule 23(b) “lays out three alternative ‘types’ of class actions that may be

maintained.” Rosenfeld, 2021:WL 508339, at “9. Relevant here, Plaintiffs seek certification

under Rule 23(b)(3), which “requires both that (1) ‘questions of law or fact common to

class members predominate over any questions affecting only individual members,’

and that (2)’a class action is superior to other available methods for fairly and

efficiently adjudicating the controversy.” Payment Card, 330 F-R.D.-at 54 (quoting Fed.

R. Civ. P.23(b)(3)). (See Supp. Mem., ECF No. 57, at 6-8.)

B. Rule 23(a} Requirements

1. Numerosity

“The numerosity requirement mandates that the class be ‘so numerous that

joinder of all members is impracticable.’” In re Sadia, S.A. Sec, Litig., 269 F-RD, 298, 304

(S.D.N.Y. 2010) (quoting Fed: R. Civ. P: 23(a)(1)). The “inquiry is not strictly

mathematical but must take into account the context of the particular case.” Penn. Public

Sch. Emps.’ Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 120 (2d Cir. 2014); see id.

(listing factors to consider). As a general rule, when a class consists of forty or more

members, numerosity is presumed. Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d:473,

483 (2d Cir. 1995).

Here, Plaintiffs assert that, “[a]lthough the exact size of the Settlement Class is

not yet known... there are hundreds if not thousands of potential Settlement Class

Members as [3D Systems] common stock publicly traded on the NYSE during the Class

Period.” (Supp. Mem., ECF No. 57, at 3; see also Fairness Hearing, ECF No.-62, at 30:24-

32:5 (explaining that, of the “124 million shares outstanding” indicated in the

company’s 2020 annual report, Plaintiffs’ damages expert estimated that “61.8 million

21

shares” were impacted by the alleged violations).) The Court notes that, “[i]n securities

fraud class actions relating to publicly owned and nationally listed corporations, the

numerosity requirement may be satisfied by a showing that a large number of shares

were outstanding and traded during the relevant period.” In re Sadia, 269-F.R.D, at 304

(quotation marks omitted). Due to the large number of impacted shares and possible

class members, numerosity can be presumed in this case. See id. at 309; see also Balestra v.

ATBCOIN LLC, No. 17-CV-10001 (VSB), 2022°WL 950953, at *4 (S.D.N.Y. Mar. 29, 2022)

(“LA jn estimate of thousands of class members is sufficient to satisfy the numerosity

requirement.” (quotation marks omitted)).

2. Commonality

“Commonality requires a showing that common issues of fact or law affect all

class members.” I re Sadia, 269-E.RD. at'304 (citing Fed: R. Civ. Ps 23(a)(2)). It “requires

the plaintiff to demonstrate that the class members ‘have suffered the same injury,” not

“merely that they have all suffered a violation of the same provision of law.” Dukes, 564

U.S! at 349-50 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457-U.S. 147,157 (1982)). “In other

words, the relevant inquiry is whether a classwide proceeding is capable of

‘generat[ing] common answers apt to drive the resolution of the litigation.” Jacob v.

Duane Reade, Inc., 602F: App’x'3;6 (2d Cir. 2015) (alteration in original) (quoting Dukes,

564 U:S.-at 350).

“Common questions of law and fact are present where the alleged fraud

involves material misrepresentations and omissions in documents circulated to the

investing public, press releases and statements provided to the investment community

and the media, and investor conference cails.’” In re Facebook, Inc., IPO Sec. & Derivative

Litig., 312 F.R.D. 332; 341 (S.D.N.Y. 2015) (quoting Billhofer v. Flamel Techs., S.A., 281

FRD.150;156 (S.D.N-Y. 2012)). Given the nature of the allegations in this case, which

22

center on material misrepresentations and omissions in public filings, the Court

concludes that the pleadings establish that the class members have suffered the same

injury. As a result, commonality is present.

3. Typicality

“[Tlhe typicality requirement|] is satisfied by a showing that ‘each class

member's claim arises from the same course of events and each class member makes

similar legal arguments to prove the defendant's liability.” In re Deutsche Bank AG See.

Litig., 328-F:R.D: 71, 80 (S.D.N.Y. 2018) (quoting In re Flag Telecom Holdings, Ltd. Sec.

Litig., 574-F.3d 29, 35 (2d Cir. 2009)). It “is usually met” where “the same unlawful

conduct was directed at or affected both the named plaintiff and the class sought to be

represented.” Robidoux v. Celani, 987-F:2d:931, 936-37 (2d Cir. 1993). “In securities

actions, in particular, typicality is ‘not demanding.’” In re Deutsche Bank, 328°-F.R.D: at-80

(quoting Tsereteli v. Residential, 283 F.R.D. 199, 208 (S.D.N.Y. 2012)). The Court therefore

finds that Plaintiffs have met the typicality requirement in this case.

4, Adequacy of Representation

To satisfy the adequacy requirement, “|p]laintiffs must meet two standards —

that ‘class counsel ... be qualified, experienced[,] and generally able to conduct the

litigation,’ and that ‘the class members .. . not have interests that are antagonistic to one

another.” Balestra, 2022°WL 950953, at *4 (quoting In re Drexel Burnham Lambert Grp.,

960-F.2d 285, 291 (2d Cir. 1992)). Based on the Court’s determinations supra regarding

the parallel requirements under Rule 23(e){2), the Court finds that the proposed class is

adequately represented by Plaintiffs and Lead Counsel, and that the adequacy □

requirement will likely be found at the time of final settlement approval and judgment.

23

5. Ascertainability

“T A] class is ascertainable if it is defined using objective criteria that establish a

membership with definite boundaries.” In re Petrobras Sec., 862 F.3d at 257. The Second

Circuit has observed that defining a class based on “securities purchases identified by

subject matter, timing, and location” is both a “clearly objective” means of doing so and

“sufficiently definite.” Id. at 269. Accordingly, given the defined class period, and the

allegations and claims at issue in this case, the proposed class appears to be sufficiently

ascertainable.

C. Rule 23(b)(3) Requirements

“Rule 23(b\3) imposes two additional burdens on plaintiffs attempting to

proceed by class action, namely, predominance and superiority.” Sykes v. Mel S. Harris

& Assocs. LLC, 780 F.3d:70;8% (2d Cir. 2015); see Fed: R: Civ. 23(b)(3) (requiring “that

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

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

methods for fairly and efficiently adjudicating the controversy”). These inquiries are

ordinarily guided by four factors:

(A) the class members’ interests in individually controlling the

prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy

already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the

claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed: Re PR. 23(b)(3). However, in the settlement context, “’[s]ome inquiries essential

to litigation class certification, including the issue of ‘manageability — how the case

will or can be tried, and whether there are questions of fact or law that are capable of

24

common proof,” are no longer relevant. Rosenfeld, 2021 WE. 508339, at *L0 (quoting In re

Am. Int'l Grp., 689 F.3d. at 239), The other factors, however, “demand undiluted, even

heightened, attention.” In re Am. Int'l Grp., 689 F.3d at 239 (quotation marks omitted).

1. Predominance

“The Rule 23(b}(3) predominance inquiry tests whether proposed classes are

sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., Inc. v.

Windsor, 521-U:S.591;-623 (1997 ). Again, because the prospect of settlement obviates the

manageability concerns ordinarily assessed as part of this inquiry, the focus is instead

whether “the legal or factual questions that qualify each class member's case . . . can be

achieved through generalized proof, and if these particular issues are more substantial

than the issues subject only to individualized proof.” Payment Card, 330 P.R:.D-at'55

(quoting Roach v. T.L. Cannon Corp., 778 £34 401, 405 (2d Cir. 2015)); see also Rosenfeld,

2021 WL 508339, at “10.

Because this action concerns claims of securities fraud, the predominance test is

“readily met.” In re Am. Int'l Grp., 689 F.3d at 240 (quotation marks omitted). Class

members’ claims, i.e., that 3D Systems made misrepresentations and omissions

regarding the company to the public that harmed shareholders, involve similar, if not

identical, questions of law and fact. To the extent there are unique issues as to each class

member, for instance, the amount of stock held by each class member, the common

questions are “more substantial.” Payment Card, 330-F.R.D. at'55 (quotation marks

omitted). Accordingly, the Court finds that common questions of law and fact

predominate over individual questions, and the proposed class is “sufficiently cohesive

to warrant adjudication by representation.” Amchem Prods., Inc., 521 U.S-at 623.

25

2, Superiority

“Rule 23(b)(3)’s superiority requirement may be satisfied when ‘the costs of

bringing individual actions outweigh the expected recovery,’ and when consolidation

‘will achieve significant economies of time, effort and expense, and promote uniformity

of decision.” Rosenfeld, 2021 WI 508339, at *10 (quoting In re U.S. Foodservice Inc. Pricing

Litig., 729°F.3d:108, 130 (2d Cir. 2013)). “The superiority requirement is designed to

avoid repetitious litigation and possibility of inconsistent adjudications.” Payment Card,

330 F:R:D. at 57 (quotation marks omitted).

Here, given that Plaintiffs assert that “there are hundreds if not thousands of

potential Settlement Class Members,” the prospect of individual actions would certainly

prove less efficient than a class-wide proceeding. (Supp. Mem., ECE No.'57, at 3.) The

Court therefore finds it likely that the superiority requirement will be met.

koe *

For the above reasons, the Court finds that Plaintiffs have demonstrated a good

likelihood of class certification. Having concluded that Plaintiffs have also

demonstrated a likelihood of final settlement approval, the Court recommends granting

preliminary settlement approval and finding that notice to “all class members who

would be bound by the proposal” is justified. Ped. R. CiveP. 23(€)(1\(B).

III. Notice

Under Rule 23, notice may be issued by either “United States mail, electronic

means, or other appropriate means.” Fed. R. Civ. 23(c)(2\(B). Additionally:

The notice must clearly and concisely state in plain, easily understood

language:

(i) the nature of the action;

(ii) the definition of the class certified;

26

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if

the member so desires;

(v) that the court will exclude from the class any member who requests

exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under Rule

23(c)(3).

Td.

Ultimately, “[t]he standard for the adequacy of a settlement notice in a class

action under either the Due Process Clause or the Federal Rules is measured by

reasonableness.” Wal-Mart Stores, 396 F:3d.at 113-14. Courts in this Circuit have found

that a settlement notice is sufficient “when it describe[s| the terms of the settlement

generally, inform[s] the class about the allocation of attorneys’ fees, and provide[s]

specific information regarding the date, time, and place of the final approval hearing.”

Payment Card, 330°F.R-D.:at 58 (quotations omitted); see id. (collecting cases).

Plaintiffs have submitted several! notices for the Court's review, including a long

form notice and — per the Court's instruction — revised summary and postcard

notices. (See Long Notice, ECE No, 55-2; Revised Summary Notice, ECF'No. 61-1;

Revised Postcard Notice, ECF No. 61-3.) The long form notice sets forth a more

extensive description of the action and claims process, while the summary and postcard

notices contain abbreviated versions of the same information. Having carefully

reviewed the parties’ filings, including the revised summary and postcard notices, the

Court finds that the proposed notices contain the information required by Rule 23, set

forth “in plain, easily understood language.” Fed: Re Civ: P. 23(c)(2)(B).

27

Plaintiffs have also submitted the following proposed schedule of events:

Deadline for Compliance

Creating Settlement Website No later than 40 calendar days after the entry of

the Preliminary Approval Order (415)

Emailing Links to the Long Notice and Claim | No later than 40 calendar days after the entry of

Form, and/or Mailing Postcard Notice the Preliminary Approval Order (17)

Publication of the Summary Notice No later than 40 calendar days after entry of the

Preliminary Approval Order (16)

Date for Plaintiffs to file papers in support of | No later than 35 calendar days before the

the Settlement, the Plan, and for Application | Settlement Hearing. (32)

of attorneys’ fees and expenses.

Submission Deadline for Claim Forms. No later than 28 calendar days before the

Settlement Hearing (2 1(a))

Submission Deadline for Requests for|No later than 28 calendar days before the

Exclusion Settlement Hearing (23)

Submission Deadline for Objections No later than 28 calendar days before the

Settlement Hearing (929)

Date for Plaintiffs to file Reply Papers in| No later than 7 calendar days before the

Support of the Settlement, the Plan, and for | Settlement Hearing (4/33)

Application of Attorneys’ Fees and Expenses.

Dated for the Settlement Hearing Approximately 120 days after entry of the

Preliminary Approval Order

(Supp. Mem., ECF No. 57, at 21.) Plaintiffs’ proposed schedule also details that Plaintiffs

will take the following steps:

(a) emailing a copy of the Summary Notice and links to the location of the

Long Notice and Claim Form, or if no email address can be obtained,

mailing the Postcard Notice, to Settlement Class Members who can be

identified with reasonable effort; (b) posting the Long Notice, Claim Form,

Preliminary Approval Order, and Stipulation on a website maintained by

the [parties’ selected] Claims Administrator; (c) upon request, mailing

copies of the Long Notice and/or Claim Form, and (d) disseminating the

Summary Notice over GlobeNewswire and in Investor’s Business Daily.

(Id. at 20.)

The Court finds that Plaintiffs’ proposed schedule and manner of notice comply

with Rule 23 and adequately afford due process. Notice should be ordered as proposed

by the parties, including distribution of the long form notice and revised summary and

postcard notices.

28

IV. Appointment of Class Counsel

“When a district court certifies a class, it must appoint class counsel.” Payment

Card, 330°F-R:D. at 58. Under Rule 23(¢)(1)(A), the Court “must consider: (i) the work

counsel has done in identifying or investigating potential claims in the action;

(ii} counsel’s experience in handling class actions, other complex litigation, and the

types of claims asserted in the action; (iii) counsel’s knowledge of the applicable law;

and (iv) the resources that counsel will commit to representing the class.” The Court

may also “consider any other matter pertinent to counsel’s ability to fairly and

adequately represent the interests of the class.” Fed. Ry Civ. P.-23(g¢)(1)(B). “The

adequacy of counsel requirement is [ordinarily] satisfied where the class attorneys are

experienced in the field or have demonstrated professional competence in other ways,

such as by the quality of the briefs and the arguments during the early stages of the

case.” Mendez v. MCSS Rest. Corp., No. 16-CV-2746 (NGG) (RLM}, 2019: WI, 2504613, at

*13 (E.D.N.Y. June 17, 2019) (quotation marks omitted).

As discussed above, the filings in this case show that Lead Counsel has engaged □

in significant investigation of the underlying claims, that they are experienced in class

action securities litigation and are knowledgeable in the applicable area of law, and that

they have the resources necessary to represent the class. The Court therefore

recommends appointing Lead Counsel as class counsel for the purposes of settlement.

CONCLUSION

For the foregoing reasons, the Court respectfully recommends (1) granting

Plaintiffs’ motion for preliminary settlement approval; (2) entering the proposed order

preliminarily approving the class action settlement (see Proposed Order, ECF No. 56-1)

(“Preliminary Approval Order”); (3) directing the parties to issue notice as proposed,

consistent with the revised submissions (see Long Form Notice, ECF°No.55-2; Claim

29

Form, ECF No-55-3; Revised Summary Notice, ECF No. 61-1; Revised Postcard Notice,

ECF No. 61:3); (4) appointing The Rosen Law Firm as class counsel for purposes of

settlement; and (5) scheduling a final settlement hearing for a specific date, time, and

place, to be held approximately 120 days after entry of the Preliminary Approval Order.

tok & & &

Objections to this Report and Recommendation must be filed, with a courtesy

copy sent to the Honorable Nicholas G. Garaufis, at 225 Cadman Plaza East, Brooklyn,

New York 11201, within fourteen (14) days of filing. Failure to file objections within the

specified time waives the right to appeal both before the district court and appellate

courts. See 28 U.S.C 636(b)(1); Fed R: Civ: P 72(b)(2); see also Fed. R. Civ. P.6(a)

(providing the method for computing time). Failure to file objections within the □

specified time waives the right to appeal the District Court’s order. See, ¢.g., Caidor v.

Onondaga County, 517 F.3d 601/604 (2d Cir. 2008) (explaining that “failure to object

timely to a... report [and recommendation] operates as a waiver of any further judicial

review of the magistrate [judge’s] decision” (quotation marks omitted)).

SO ORDERED.

Dated: Brooklyn, New York

June 5, 2023

Zag Werke

TARYN A. MERKL

UNITED STATES MAGISTRATE JUDGE

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