Darish v. Northern Dynasty Minerals Ltd.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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IN RE NORTHERN DYNASTY MEMORANDUM

MINERALS LTD. SECURITIES AND ORDER

LITIGATION 20-CV-5917 (TAM)

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TARYN A. MERKL, United States Magistrate Judge:

This is a consolidated, putative class action brought against Northern Dynasty

Minerals Ltd.; its Chief Executive Officer, Ronald William Thiessen (who is also the

Director of the Pebble Limited Partnership (“Pebble Partnership”), a wholly owned

subsidiary of Northern Dynasty); and the former Chief Executive Officer of the Pebble

Partnership, Thomas Collier. ( Amended Complaint (“Amend. Compl.”), ECF No.

37, ¶¶ 14–16.) Plaintiffs Lawrence Keleman and Charles Hymowitz each purchased

Northern Dynasty’s common stock between December 21, 2017, and November 24, 2020

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

other than Defendants and other specified groups, as set forth more fully below. (

¶¶ 1, 12–13.) 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. §§ 78j(b)

and 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5. ( ¶¶ 142–57.)

Currently pending before the Court is Plaintiffs’ motion for preliminary

settlement approval. For the following reasons, the Court grants Plaintiffs’ motion.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY1

I. Factual Background

Northern Dynasty is a mining exploration and development company, and

“owns 100% of the Pebble Partnership, which was established in mid-2007 to engineer,

permit, construct[,] and operate a mine at the Pebble Project.” (Amend. Compl., ECF

No. 37, ¶ 19.) During the Class Period, “Northern Dynasty’s [proposed] plan [was] to

develop what Defendants deemed ‘one of the world’s most important mineral

resources,’” through its mining efforts in the United States, including Alaska.2 ( ¶ 2.)

Northern Dynasty securities were trading during the Class Period on the New York

Stock Exchange under the ticker symbol “NAK.” ( ¶ 14.) Thiessen served as CEO of

the company from November 2001 to present, and served as the Director of the Pebble

Partnership, established in 2007, to present. ( ¶ 15.) Collier served as CEO of the

Pebble Partnership from February 4, 2014 until September 23, 2020. ( ¶ 16.)

In order to move forward with their plan, Northern Dynasty needed to obtain a

permit under Section 404 of the Clean Water Act, which may be issued by the U.S.

Army Corps of Engineers (“Army Corps”). ( ¶ 23.) “Under [Section] 404(c), however,

1 The Court recites the facts as alleged in the amended complaint.

, No. 19-CV-4349 (NGG) (RER), 2021 WL 1259559, at *1 (E.D.N.Y. Jan. 6, 2021).

Defendants deny these allegations and dispute liability. ( Revised Settlement, ECF No. 64-1,

at 3–4.)

2 Plaintiffs’ amended complaint alleges as follows: “Although the Pebble Project would

have been located on state land, it was still subject to federal permitting requirements.”

(Amend. Compl., ECF No. 37, ¶ 23.)

the Environmental Protection Agency (‘EPA’) may prohibit or restrict fill activities if it

determines that a project would have an ‘unacceptable adverse effect’ on the fishery

habitats . . . .” ( ) The EPA ultimately concluded that given the original proposals

made by Northern Dynasty, it had “reason to believe that mining of the Pebble deposit

at any of [the proposed sizes], even the smallest, could result in significant and

unacceptable adverse effects on ecologically important streams, wetlands, lakes, and

ponds and the fishery areas they support.” ( ¶ 32.) “Northern Dynasty sued the EPA

over the regulatory actions that prevented the Pebble Project from advancing to a

permit application with the Army Corps,” and following the settlement of the lawsuit,

“on December 21, 2017, Northern Dynasty announced its intention to apply for a Clean

Water Act permit with the Army Corps using a significantly smaller footprint and a

closure plan after 20 years.” ( ¶ 33.) “Defendants deliberately crafted a much smaller,

limited, 20-year mining proposal and offered a mine closure plan to obfuscate their

actual plans for future expansions . . . design[ing] this scheme in hopes of securing a

permit from the Army Corps.” ( ¶ 34 (emphasis omitted).)

Plaintiffs allege that in order to obtain the permit, “Northern Dynasty and the

Individual Defendants made false and misleading statements and engaged in a scheme

to deceive the market . . . artificially inflat[ing] the prices of Northern Dynasty’s

securities . . . by misrepresenting the size, scope, and duration of the Pebble Project,”

leading to the fall of Northern Dynasty’s stock price and investor losses, once these

misrepresentations surfaced. ( ¶ 112; ¶¶ 58–128.) More specifically,

Plaintiffs claim that Defendants issued press releases on December 21, 2017 and on

January 5, 2018 (which were also filed with the SEC), collectively misrepresenting the

planned size, scope, and duration of the Pebble Project. ( ¶¶ 59–73.) Ultimately,

Plaintiffs contend Northern Dynasty made “materially false and misleading”

statements on its official website, in SEC filings, and in press releases throughout the

entirety of the Class Period. ( ¶¶ 58–111.)

A series of conversations (“The Pebble Tapes”) recorded between undercover

investigators belonging to a non-profit organization, i.e., the Environmental

Investigation Agency (“EIA”), expressing interest in investment opportunities related to

the Pebble Project, and Defendants Thiessen and Collier, “revealed Northern Dynasty’s

actual plans to build a much larger and long-lived mine than described in Northern

Dynasty’s permit application with the Army Corps, in public SEC filings, and in

Congressional testimony.” ( ¶ 45; ¶¶ 46–57.) The tapes revealed that, when

pitching to individuals whom they had thought were potential investors, Defendants

Thiessen and Collier represented “that the 20-year project described publicly will . . . be

merely the first stage in Northern Dynasty’s planned, expansive development.” (

¶ 46 (emphasis omitted).) Unbeknownst to the public, Defendants had hatched this

plan, from the very beginning of the Class Period, to scheme and mislead for the

purposes of obtaining a permit, while covertly planning to develop one of the largest

mines in the world. ( ¶¶ 57, 44.) “When the truth emerged through a series of

corrective disclosures and materializations of risks that the Pebble Project would not

receive a permit, Northern Dynasty’s stock went into a tailspin, wiping out hundreds of

millions of dollars in market capitalization and injuring hundreds of thousands of

investors.” ( ¶ 6.)

On August 24, 2020, the Army Corps released a statement finding that “‘the

project, as currently proposed, cannot be permitted under [S]ection 404 of the Clean

Water Act.’” ( ¶ 113 (quoting U.S. Army Public Affairs,

, U.S. Army (Aug. 24, 2020),

https://www.army.mil/article/238426/).) With this news, Northern Dynasty’s

common share price fell 37.9%, to close at $0.9 per share on August 24, 2020, damaging

investors who purchased the stock at artificially inflated prices. ( ¶¶ 114, 144.) For the

next several months (leading up until the remainder of the Class Period), news

contradictory to Northern Dynasty’s publicly filed and shared plans emerged from

various sources, including , the EIA, the , ,

the , the office of Alaska Senator Lisa Murkowski, and finally the Army Corps

(again), announcing that it has denied the permit for the Pebble Project. ( ¶¶ 113–

28.3) Each of these instances resulted in a falling of Northern Dynasty’s common share

price, further damaging investors each time. ( )

3 On August 25, 2020, published an article called “Pebble Problems Stack Up,”

reporting that “‘[t]he mitigation projects required may be difficult for the mine developers to

meet . . . push[ing] any final decision on the mine beyond the end of Trump’s first term,

potentially leaving it up to his challenger, Joe Biden, who opposes the project.’” (Amend.

Compl., ECF No. 37, ¶ 115.) On September 21, 2020, the EIA put out a press release containing a

transcript of the Pebble Tapes. ( ¶ 117.) The next day, on September 22, 2020, both the

and published articles in reaction to the tapes. (

¶ 118.) On October 28, 2020, the followed suit, publishing their own article in reaction

to the tapes. ( ¶ 120.) On October 29, 2020, the EIA released additional tapes and emails,

“includ[ing] Thiessen discussing his influence over Alaska’s senators and pro-Pebble governor”

( ¶ 122.) On November 18, 2020, Alaska Senator Lisa Murkowski issued the text of her

remarks at the Resource Development Council 2020 Alaska Resources Conference, where she

II. Procedural History

Plaintiffs filed suit in December 2020, 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 Thiessen and Collier. ( ¶¶ 142–57; Dec. 4, 2020

Compl., ECF No. 1; Dec. 17, 2020 Compl., Case No. 20-CV-6126 (ENV) (TAM), ECF No.

1.) Specifically, investors filed two separate actions, which the Honorable Roanne L.

Mann consolidated on March 17, 2021, appointing Lawrence Kelemen as lead plaintiff

and Pomerantz LLP as lead counsel.4 ( Mem. and Order, ECF No. 32.)

Thereafter, Defendants moved to dismiss the action on December 15, 2021, for

failure to state a claim to relief. ( Mot. to Dismiss, ECF No. 39; Mem. in Supp. of Mot.

to Dismiss, ECF No. 41.) On January 25, 2023, the Honorable Eric N. Vitaliano denied

Defendants’ motion. ( Order Den. Mot. to Dismiss, ECF No. 47.) The undersigned

magistrate judge directed Defendants to file an answer or otherwise respond to the

complaint by February 16, 2023. ( Jan. 26, 2023 ECF Order.) Defendants requested a

stay in order to attempt resolution through mediation. ( Letter Mot. to Stay, ECF No.

48.) The motion was granted, in part, on consent, in light of the parties’ representations

stated “that this is the wrong mine in the wrong place” and that she thought “that the Army

Corps should deny [Northern Dynasty’s] permit application.” ( ¶ 124.)

4 The later filed action, No. 20-CV-6126, was initiated by Charles Hymowitz, whom the

Court notes was named as a plaintiff in the amended complaint filed after case consolidation.

( Amend. Compl., ECF No. 37.) Early on in this action, several class members moved to

consolidate cases, i.e., the original action (20-CV-5917) and Hymowitz’s later filed action (20-

CV-6126), as well as to be appointed as lead plaintiff and lead counsel, pursuant to the

provisions of the PSLRA. ( Mots. to Consolidate Cases and Appoint Counsel and

Lead Pl., ECF Nos. 5, 8, 10, 13, 14, 19.) On March 17, 2021, Judge Mann granted all motions to

consolidate the cases, as well as Lawrence Keleman’s motion for appointment as lead plaintiff

and his choice of counsel as lead counsel. ( Mem. and Order, ECF No. 32.)

that they had a mediation scheduled for March 27, 2023. ( Jan. 30, 2023 ECF Order.)

The parties were directed to file a joint status report by April 3, 2023, providing an

update as to the status of mediation, and, in the event that the parties did not settle at

mediation, Defendants were directed to file an answer by April 10, 2023. ( ) The

mediation was ultimately unsuccessful, and Defendants filed their Answer on April 10,

2023. ( Letter Post-Mediation Update, ECF No. 50; Answer, ECF No. 51.)

On April 17, 2023, Plaintiffs filed a motion to stay proceedings in anticipation of

finalizing a motion for preliminary settlement approval after the parties reached an

agreement-in-principle to settle on April 11, 2023. ( Letter Mot. to Stay Proceedings,

ECF No. 52.) The motion was granted, and the parties filed a status report on May 9,

2023, indicating that they had reached a settlement in principle. ( Apr. 18, 2023 ECF

Order; May 3, 2023 ECF Order; May 9, 2023 Status Report, ECF No. 54.)

Plaintiffs filed their proposed settlement agreement on June 7, 2023, along with a

motion for preliminary settlement approval, a proposed order, and proposed notices.

( Proposed Settlement Agreement (“Settlement”), ECF No. 58; Mot. for Prelim.

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

ECF No. 58-1; Mem. in Supp. of Mot. for Prelim. Settlement Approval (“Supp. Mem.”),

ECF No. 57; Long Notice, ECF No. 58-2; Summary Notice, ECF No. 58-4; Postcard

Notice, ECF No. 58-5; Proposed Final J., ECF No. 58-6.) Per these submissions, the

parties “have agreed to settle this Action for $6,375,000 . . . by the terms stated in the

[proposed settlement agreement].” (Supp. Mem., ECF No. 57, at 1.) Plaintiffs represent

that the agreement “was achieved only after substantial arm’s-length negotiations with

the aid of a highly regarded mediator, Robert Meyer of JAMS.”5 ( ; at 3

(stating that the parties “participated in an all-day private mediation session” on March

27, 2023).) On May 15, 2023, Judge Vitaliano referred Plaintiffs’ pending motion to the

undersigned magistrate judge “to schedule a conference and, at her discretion, any

subsequent motions or rulings arising from the conference.” (May 15, 2023 ECF Referral

Order.)

The Court subsequently held a fairness hearing on July 24, 2023. ( July 24,

2023 ECF Minute Entry and Order; Tr. of July 24, 2023 Fairness Hearing (“Fairness

Hearing”), ECF No. 62.) The Court heard argument regarding Plaintiffs’ pending

motion, including the likelihood of final settlement approval and class certification, as

well as the parties’ proposed notice procedures. ( Fairness Hearing, ECF

No. 62.) The Court noted a discrepancy regarding Plaintiffs’ projected cost estimates,

i.e., the settlement agreement and preliminary approval order indicated potential

administrative costs exceeding those numbers presented to the class in the proposed

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

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

provider.” , JAMS, https://www.jamsadr.com/about/ (last visited Aug. 23, 2023). It

is further represented that Mr. Meyer has been a mediator for more than 12 years, with

experience in “complex business litigation pending throughout the United States, including

securities and derivative class actions.” , JAMS,

https://www.jamsadr.com/meyer/ (last visited Aug. 23, 2023). Courts in this circuit have

observed Mr. Meyer to be “an experienced mediator,” , No. 18-

CV-6716 (TAM), 2022 WL 198491, at *8, 13 (E.D.N.Y. Jan. 21, 2022);

, No. 20-CV-2031 (JSR), 2021 WL 911216, at

*11 (S.D.N.Y. Mar. 7, 2021) (referring to Mr. Meyer of JAMS as “a well-respected and

experienced mediator”).

forms of notice.6 ( at 18:6–21, 19:17–21, 20:3–20, 21:5–15.) In addition, in light of

Plaintiffs’ representation in their motion papers that, along with the proposed

settlement agreement, the parties had entered into a “supplemental agreement,” the

Court directed the parties to submit the supplemental agreement for review.

(Supp. Mem., ECF No. 57, at 21; Fairness Hearing, ECF No. 62, at 29:25–30:8.) 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)(iv). ( Fairness Hearing, ECF No. 62, at 26:17–27:14.) Accordingly, the

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

advisement. ( July 24, 2023 ECF Minute Entry and Order.)

On July 26, 2023, Plaintiffs filed the parties’ supplemental agreement for

review. ( Suppl. Agreement, ECF No. 63.) Plaintiffs also filed revised

versions of their proposed settlement agreement and proposed notices, which

addressed the concerns raised by the Court at the Fairness Hearing. ( Revised

Settlement, ECF No. 64-1; Revised Proposed Order (“Revised Preliminary Approval

Order”), ECF No. 64-3; Revised Long Notice, ECF No. 64-5; Revised Summary Notice,

6 The settlement agreement and preliminary approval order anticipated administrative

costs of up to “$500,000 from the Settlement Fund prior to the Effective Date to pay

Administrative Costs . . . [and] additional amounts, up to $200,000 . . . for any necessary

additional Administrative Costs without further order of the Court.” (Settlement, ECF No. 58,

¶ 3.4; Proposed Order, ECF No. 58-1, ¶ 12; Long Notice, ECF No. 58-2; Summary Notice,

ECF No. 58-4; Postcard Notice, ECF No. 58-5 (making no mention to potential class members

that the attorneys anticipated potential administrative costs of up to $200,000, in addition to the

administrative costs of up to $500,000).)

ECF No. 64-7; Revised Postcard Notice, ECF No. 64-9.) Also on July 26, 2023, the parties

consented to magistrate judge jurisdiction, and the next day, Judge Vitaliano reassigned

the case to the undersigned magistrate judge to conduct all proceedings and order the

entry of a final judgment. ( Consent to Juris., ECF No. 65; Signed Consent to Juris.,

ECF No. 66.)

DISCUSSION

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

the purposes of settlement; (2) preliminarily approve the Settlement as set forth in the

[agreement; and] (3) approve the [proposed] form and manner of notice and direct that

such notice be disseminated to the Settlement Class.” (Supp. Mem., ECF No. 57, at 25–

26.) Plaintiffs also request an order appointing Lead Counsel as class counsel for

purposes of Settlement. ( Revised Preliminary Approval Order, ECF No. 64-3, ¶ 5;

Supp. Mem., ECF No. 57, at 9–10.)

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.” Fed.

R. Civ. P. 23(e). “At the preliminary approval stage, a court makes an initial evaluation

of fairness prior to notifying the class . . . .” , No. 18-CV-6720 (NGG)

(PK), 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 be able to grant final approval and certify

the class.” ,

330 F.R.D. 11, 28 n.21 (E.D.N.Y. 2019); Fed. R. Civ. P. 23(e)(1)(B)(i)–(ii). “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.’”

, 2021 WL 508339, at *4 (quoting Fed. R. Civ. P. 23(e)(1)(B)). The court must

also appoint class counsel for purposes of settlement. , 330 F.R.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).” , 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;

(iii) 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.’” , 2021

WL 508339, at *3 (quoting Fed. R. Civ. P. 23 advisory committee’s note to 2018

amendment).

The substantive factors are supplemented by the nine factors, which

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

reasonableness, and adequacy of the proposed settlement.” (citing

, 495 F.2d 448, 463 (2d Cir. 1974),

, 209 F.3d 43 (2d Cir. 2000)); , 330 F.R.D.

at 29 (noting the “significant overlap” between the and substantive factors).

The 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.

, 2021 WL 508339, at *3 (citing , 495 F.2d at 463).

B. Procedural Factors

1.

“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.’” , 2021 WL 508339, a *4 (quoting

, 502 F.3d 91, 99 (2d Cir. 2007)); ,

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

23(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.’”

, 564 U.S. 338, 348–49 (2011) (quoting

, 431 U.S. 395, 403 (1977)); , 330 F.R.D. at 31

(explaining that the Due Process Clause requires adequate representation). As for class

counsel, “[a] 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.” , 236 F.3d 78, 85 (2d Cir. 2001) (quotation

marks omitted); 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 . . . who purchased

or otherwise acquired Northern Dynasty securities from December 21, 2017 through

November 24, 2020,” with certain exclusions,7 and Plaintiffs themselves purchased

Northern Dynasty securities during the Class Period. (Amend. Compl., ECF No. 37,

¶¶ 1, 12–13.) 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. ( ¶¶ 144–50.) Absent any indication that Plaintiffs’ interests

in this action “are antagonistic to the interest[s] of other members of the class,” the

record demonstrates that Plaintiffs are well positioned to represent the proposed class.

, 502 F.3d at 99.

The Court similarly finds that Plaintiffs are adequately represented by their

attorneys, considering Judge Mann’s previous observation that Lead Counsel “is

experienced, competent, and well-qualified to conduct the class action securities

litigation at hand.” (Mem. and Order, ECF No. 32, at 13; Pomerantz Firm

Resume, ECF No. 17-6.) The Court further notes that Lead Counsel has on several

7 Specified groups excluded from the class include: the Individual Defendants, the

officers and directors of Northern Dynasty, members of the Individual Defendants’ immediate

families and their legal representatives, heirs, successors or assigns, and any entity in which

Individual Defendants have or had a controlling interest. ( Revised Proposed Settlement

Agreement (“Revised Settlement”), ECF No. 64-1, ¶ 1.39.) Also excluded from the class is any

individual or entity, who or which has: asserted claims against any or all of the Defendants in

any cross-border litigation initiated outside of the United States; been deemed by a court to be a

member of a class in such litigation, for settlement purposes or otherwise; is entitled to a

settlement or other distribution payment in connection with the resolution of the cross-border

litigation, regardless of whether such payment is cashed; and those who or which exclude

themselves by submitting a request for exclusion from the class that is accepted by the Court.

( )

occasions been appointed class counsel for the purpose of settlement.

, 317 F. Supp. 3d 858, 863, 876 (S.D.N.Y. 2018);

, 312 F.R.D. 307, 329 (S.D.N.Y. 2016) (appointing Pomerantz LLP as lead counsel).

Both the pleadings and motion papers demonstrate a thorough investigation by Lead

Counsel into the underlying facts and applicable law. ( Amend. Compl.,

ECF No. 37; Pls.’ Mem. in Opp’n to Mot. to Dismiss, ECF No. 40.) Lead Counsel also

“attended a full-day mediation session,” during which “negotiations were at all times

hard-fought.” (Supp. Mem., ECF No. 57, at 15.)

Plaintiffs acknowledge that “the Parties had not begun formal discovery” prior

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

adequately represented the interests of the proposed class. ( at 17.) 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 Private

Securities Litigation Reform Act (“PSLRA”). 15 U.S.C. § 77z-1(b)(1). ( Mot. to

Dismiss, ECF No. 39.) 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. , 502 F.3d at 99.

2.

“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.” , 2021 WL 508339, at *5 (quotation marks omitted).

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

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

pressure.” , 236 F.3d at 85.

As to the parties’ selected mediator, Robert Meyer, several courts in this circuit

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

negotiations were at arm’s length. , No. 18-CV-6716

(TAM), 2022 WL 198491, at *8–9 (E.D.N.Y. Jan. 21, 2022);

, No. 00-CV-1884 (AVC), 2007 WL 2115592, at *3 (D. Conn. July 20, 2007).

Additionally, as noted above, Plaintiffs represent that the mediation was a “full-day”

session and that “negotiations were at all times hard-fought.” (Supp. Mem., ECF No. 57,

at 15.) Based on the record in this case, the Court perceives no “‘evidence or indicia

suggesting that the negotiations were collusive.’” , 2022 WL 4296092, at *4

(quoting , No. 17-CV-1091 (VAB), 2019 WL 1435055, at

*13 (D. Conn. Jan. 14, 2019)). The Court therefore finds that the parties’ proposed

settlement was the result of arm’s length negotiations.

C. Substantive Factors

1.

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)(i). This factor “‘subsumes several 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). , 2021 WL 508339, at *5 (quoting

, 330 F.R.D. at 36). Put simply, courts must assess whether the proposed

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

risk and delay of trial.’” (quoting , 330 F.R.D. at 36).

Plaintiffs have submitted the parties’ proposed settlement agreement, which

indicates that the settlement amount is $6.375 million. ( Revised Settlement, ECF No.

64-1, ¶ 1.38.) Plaintiffs acknowledge that this amount “represents a recovery of

approximately 2.3%” of the total potential maximum damages award, which Plaintiffs’

damages expert estimated at approximately $281 million. (Supp. Mem., ECF No. 57, at

19.) They clarify, however, that the $281 million figure represents Plaintiffs’ best-case

scenario — “if Plaintiffs fully prevailed at summary judgment and trial, and the Court

and jury accepted Plaintiffs’ damages theory.” ( ) Plaintiffs therefore argue that the

$6.375 million settlement amount is reasonable given the costs, risks, and likely

duration of the litigation. ( at 16.) For example, Plaintiffs assert that “[i]f the

Settlement were not reached, the Parties would have to incur substantial costs and

engage in prolonged litigation through class certification, summary judgment, trial[,]

and if applicable, subsequent appeals.” ( ; Fairness Hearing, ECF No. 62, at 13:4–

15:10.) As to the “substantial risks” of continued litigation, Plaintiffs point to the risk of

establishing liability and damages, noting that “[p]roving, not merely alleging, that

Defendants’ statements and omissions were false or misleading . . . would be a difficult

task,” as well as the risks of maintaining the class action through trial. (Supp. Mem.,

ECF No. 57, at 17–18.)

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

The Court next evaluates the parties’ “proposed method of distributing relief to

the class, including the method of processing class-member claims.” Fed. R. Civ. P.

23(e)(2)(C)(ii). “An allocation formula need only have a reasonable, rational basis” and

“need not be perfect.” , 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.” , 2021 WL 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 “ share of the Net Settlement Fund based upon” their

respective losses. (Revised Long Notice, ECF No. 64-5, at 7.) 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 or otherwise acquired the shares, when the

shares were sold, and the inflation of the stock price per share at the time of purchase

and sale. ( at 7–10; Fairness Hearing, ECF No. 62, at 16–17.) No distribution will

be made to claimants “who would otherwise receive a distribution of less than $10.00.”

(Revised Long Notice, ECF No. 64-5, at 12.) Claimants will be required to report their

losses by submitting a proof of claim form, which the Claims Administrator will review

to determine each claimant’s respective share of the settlement amount. (

at 7.) The process for distributing the claims follows a standard formula that was

reviewed by Plaintiff’s retained experts. ( Fairness Hearing, ECF No. 62, at 16–17.)

“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.” , 2021

WL 508339, at *6. Likewise, it appears that the claims processing method imposes a

minimal burden on claimants and will adequately filter out unjustified claims to

settlement funds. The Court therefore finds that the proposed methods of processing

claims and distributing relief are rational and fair.

c. Proposed Award of Attorneys’ Fees

The third factor in the evaluation of whether the settlement provides adequate

relief is an assessment of “the terms of any proposed award of attorneys’ fees, including

timing of payment.” Fed. R. Civ. P. 23(e)(2)(C)(iii). “Courts may award attorneys’ fees in

common fund cases under either the ‘lodestar’ method or the ‘percentage of the fund’

method.” , 396 F.3d 96, 121 (2d Cir. 2005)

(quoting , 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 reimbursement of litigation expenses in

an amount not to exceed $500,000.” (Supp. Mem., ECF No. 57, at 20.) “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.” , 2021 WL 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.8

d. Other Agreements

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

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

proposal.” Fed. R. Civ. P. 23(e)(2)(C)(iv), (e)(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; David F. Herr, Annotated

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.

(Supp. Mem., ECF No. 57, at 21; Suppl. Agreement, ECF No. 63.) Having

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

modification at final settlement approval. , 2021 WL 508339, at *7. Lead Counsel

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

the lodestar. , 2022 WL 198491, at *14–17;

, 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)).

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: “if Settlement Class

Members opt out of the Settlement such that the number of Northern Dynasty securities

represented by such opt-outs exceeds a certain amount, [Northern Dynasty] shall have

the option to terminate the Settlement.” (Supp. Mem., ECF No. 57, at 21.) The precise

terms of the supplemental agreement 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.” ( ) The Court notes that such agreements are

“standard in securities class action settlements.” , No. 15-

MD-2631 (CM) (SDA), 2019 WL 5257534, 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.” , 2022 WL

198491, at *13. The Court therefore finds that the supplemental agreement is unlikely to

preclude final settlement approval.

2.

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

other.” Fed. R. 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

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.’” , 2021

WL 508339, at *7 (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 basis. “In this way, the agreement

appropriately and fairly accounts for . . . point[s] of differentiation among class

members’ claims.”

The Court further notes that the proposed settlement agreement contemplates an

incentive award to Plaintiffs, paid out of the settlement fund. ( Revised Settlement,

ECF No. 64-1, ¶ 8.2(c).) Although the exact amount for the potential incentive award is

not specified in the agreement, the Long Notice provides that “Lead Counsel may apply

for awards to Plaintiffs in connection with their representation of the Settlement Class

in an amount not to exceed $25,000, combined.” (Revised Long Notice, ECF No. 64-5, at

2; at 15 (“Lead Counsel will file a motion asking the Court . . . to make an

award . . . to Plaintiffs collectively not to exceed $25,000 (up to $20,000 for Lead Plaintiff

Lawrence Kelemen and $5,000 for Named Plaintiff Charles Hymowitz).”).) “Incentive

awards are not uncommon in class action cases and are within the discretion of the

court.” , No. 11-CV-1368 (NGG) (VVP), 2014

WL 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 $25,000 total (split between two Plaintiffs, according to their level of

contribution) will preclude final settlement approval, assuming that Plaintiffs

demonstrate “special circumstances” for such an award.9 . (quotation marks omitted).

3. 10

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

adequate information about their claims.” , 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.”

, 80 F. Supp. 2d 164, 176 (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.

As the parties acknowledge, “[they] had not begun formal discovery.” (Supp.

Mem., ECF No. 57, at 17; Fairness Hearing, ECF No. 62, at 7:9–25, 11:20–25.)

Notwithstanding that, Plaintiffs assert that they “conducted a thorough investigation

supporting a detailed Consolidated Amended Complaint” and “thoroughly

9 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),” as well as “any other burdens sustained by that plaintiff in lending himself

or herself to the prosecution of the claim, and of course, the ultimate recovery.”

, No. 11-CV-1368 (NGG) (VVP), 2014 WL 1330957, at *3 (E.D.N.Y.

Mar. 31, 2014) (quotation marks omitted); (“[C]lass actions in . . . securities or antitrust

litigation 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. 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. .

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

at this time. , 2021 WL 508339, at *3; at *4 n.2 (declining to assess this factor at

the preliminary approval stage).

investigat[ed] the case and exchang[ed] mediation statements with Defendants.” (Supp.

Mem., ECF No. 57, at 17.) The Court again notes that discovery was stayed under the

PSLRA. . 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, the Court finds that

Plaintiffs were adequately informed about their claims prior to reaching a proposed

settlement.

4.

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

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

, 2021 WL 508339, at *7. Plaintiffs claim that to their knowledge, Defendants

currently have somewhere between $7 to $9 million cash on hand, which estimate was

derived from publicly filed sources, i.e., relevant SEC filings and quarterly statements to

investors. ( Fairness Hearing, ECF No. 62, at 7:19–8:11, 9:17–25.) Plaintiffs also

represent that, to their knowledge, costs attributable to Defendants’ various litigation

proceedings may eventually exhaust their insurance, leading Plaintiffs to believe that

they should “take what [they] can now as opposed to continue to waste and erode

further policy proceeds.” ( at 10:14–25.)

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

standing alone, does not suggest that the settlement is unfair.” , 874 F.

Supp. 2d at 201 (quotation marks omitted). Accordingly, although the proposed $6.375

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

Plaintiffs’ representations regarding the financial outlook of Northern Dynasty going

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

5.

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.”

, 731 F.3d 241, 247 (2d Cir. 2013); , 330 F.R.D. at 47–

48 (noting that these “two 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.” , 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.” , 396 F.3d at 119 (quotation marks omitted).

Here, Plaintiffs aver that the settlement amount “represents a recovery of

approximately 2.3%” of the total maximum potential damages. (Supp. Mem., ECF No.

57, at 19.) 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.” , 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.”

at 455 n.2. This is because the “best possible recovery” may not be “a realistic” one.

, No. 88-CV-3024 (CPS), 1990 WL 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.”

, No. 20-CV-982 (ENV) (CLP), 2023 WL 2184496, at *16 (E.D.N.Y.

Feb. 16, 2023) (quotation marks omitted). Given the risks of litigation described above,

the heightened legal standards under the PSLRA, the complexity of the case, and the

financial risks Defendants presently face, the Court finds that the parties’ settlement

amount falls within a reasonable range.11

* * * * *

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

set forth in Rule 23 and 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). , 2021 WL 508339, at *8.

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

11 The Court further notes that the approximately 2.3% settlement amount proposed in

this case is somewhat higher than the median settlement for cases with similar estimated losses,

but not dramatically so. NERA Economic Consulting,

, at 18,

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

pdf (last visited Aug. 23, 2023) (estimating a 1.8% median ratio of settlement to investor losses

in cases settled in 2022); Cornerstone Research,

, at 4, https://www.cornerstone.com/wp-

content/uploads/2023/03/Securities-Class-Action-Settlements-2022-Review-and-Analysis.pdf

(last visited Aug. 23, 2023).

compliance with these rules. , 689 F.3d 229, 237 (2d

Cir. 2012) (quotation marks omitted).

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

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

, 2021 WL 508339, at *8; Fed. R. Civ. P. 23(a). “In addition to the explicit

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

ascertainability.” , 330 F.R.D. at 50 (citing , 862 F.3d

250, 266 (2d Cir. 2017)).

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

maintained.” , 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.’” , 330 F.R.D. at 54 (quoting

Fed. R. Civ. P. 23(b)(3)). ( Supp. Mem., ECF No. 57, at 10–12.)

B. Rule 23(a) Requirements

1.

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

joinder of all members is impracticable.’” , 269 F.R.D. 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.”

, 772 F.3d 111, 120 (2d Cir. 2014);

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

members, numerosity is presumed. , 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 likely hundreds, if not thousands of potential Settlement

Class Members as Northern Dynasty’s common stock was actively traded on the New

York Stock Exchange with millions of shares traded during the relevant period.” (Supp.

Mem., ECF No. 57, at 6.) 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.” , 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. at 309;

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

2022) (“[A]n estimate of thousands of class members is sufficient to satisfy the

numerosity requirement.” (quotation marks omitted)).

2.

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

class members.” , 269 F.R.D. at 304 (citing Fed. R. Civ. P. 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.” , 564

U.S. at 349–50 (quoting , 457 U.S. 147, 157 (1982)). “In other

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

‘generat[ing] common apt to drive the resolution of the litigation.’”

, 602 F. App’x 3, 6 (2d Cir. 2015) (alteration in original) (quoting

, 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 calls.’”

, 312 F.R.D. 332, 341 (S.D.N.Y. 2015) (quoting

, 281F.R.D. 150, 156 (S.D.N.Y. 2012)). Given the nature of the allegations in this case,

which 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.

“[T]he 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.’”

, 328 F.R.D. 71, 80 (S.D.N.Y. 2018) (quoting

, 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.” , 987 F.2d 931, 936–37 (2d Cir. 1993). “In securities

actions, in particular, typicality is ‘not demanding.’” , 328 F.R.D. at

80 (quoting , 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.

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.’” , 2022 WL 950953, at *4 (quoting

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

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.

5.

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

membership with definite boundaries.” , 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.” 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.”

, 780 F.3d 70, 81 (2d Cir. 2015); Fed. R. Civ. P. 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. R. Civ. P. 23(b)(3). However, in the settlement context, “‘[s]ome inquiries essential

to litigation [of] 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 common proof,’” are no longer relevant. , 2021 WL 508339, at *10 (quoting

, 689 F.3d at 239). The other factors, however, “demand undiluted,

even heightened, attention.” , 689 F.3d at 239 (quotation marks

omitted).

1.

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

sufficiently cohesive to warrant adjudication by representation.”

, 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

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

substantialthan the issues subject only to individualized proof.’” , 330

F.R.D. at 55 (quoting , 778 F.3d 401, 405 (2d Cir. 2015));

, 2021 WL 508339, at *10.

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

“readily met.” , 689 F.3d at 240 (quotation marks omitted). Class

members’ claims, i.e., that Northern Dynasty 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.” , 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.” , 521 U.S. at 623.

2.

“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.’” , 2021 WL 508339, at *10 (quoting

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

to avoid repetitious litigation and possibility of inconsistent adjudications.”

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

Here, given that Plaintiffs assert that “there are likely 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., ECF No. 57, at

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

* * * * *

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 grants preliminary

settlement approval and finds that notice to “all class members who would be bound by

the proposal” is justified. Fed. R. Civ. P. 23(e)(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;

(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).

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.” , 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.”

, 330 F.R.D. at 58–59 (quotation marks omitted); (collecting cases).

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

form notice, a summary notice, and a postcard notice. ( Revised Long Notice, ECF

No. 64-5; Revised Summary Notice, ECF No. 64-7; Revised Postcard Notice, ECF No. 64-

9.) 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, the Court finds that

the proposed notices contain the information required by Rule 23, set forth “in plain,

easily understood language.” Fed. R. Civ. P. 23(c)(2)(B).

Plaintiffs have also submitted the following proposed schedule of events:

Event Deadline for Compliance

Emailing Summary Notice and/or No later than 21 calendar days after the

mailing Postcard Notice; Creating entry of the Preliminary Approval Order.

website with Stipulation, Long (¶ 11, 16)

Notice, and Claim Form.

Publication of the Summary Notice. No later than 21 calendar days after entry of

Preliminary Approval Order. (¶ 17)

Date for Plaintiffs to file papers in No later than 28 calendar days before the

support of the Settlement, the Plan of Settlement Hearing. (¶ 27)

Allocation, and for application of

attorneys’ fees and expenses.

Submission deadline for requests for No later than 21 calendar days before the

exclusion. Settlement Hearing. (¶ 21)

Submission deadline for objections. No later than 21 calendar days before the

Settlement Hearing. (¶ 25)

Submission deadline for Claim No later than 7 calendar days after the

Forms. Settlement Hearing. (¶ 19)

Date for Plaintiffs to file reply papers No later than 7 calendar days before the

in support of the Settlement, the Plan Settlement Hearing. (¶ 28)

of Allocation, and for application of

attorneys’ fees and expenses.

Date for Settlement Hearing. At the Court’s earliest convenience at least

100 calendar days after the entry of the

Preliminary Approval Order.

(Supp. Mem., ECF No. 57, at 25.) The proposed Preliminary Approval Order also

mandates that Lead Counsel provide Class Members notice of the Settlement by either:

“(a) emailing the Summary Notice to Settlement Class Members for whom the Claims

Administrator is able to obtain email addresses, or (b) mailing the Postcard Notice, if an

email address cannot be obtained, by first class mail to Settlement Class Members who

can be identified with reasonable effort.” ( at 23–24 (footnote omitted).) “After entry

of the proposed [Revised] Preliminary Approval Order, the Stipulation and its exhibits,

the Preliminary Approval Order, and the Long Notice and Claim Form will be posted

on the Claims Administrator’s website. Additionally, Summary Notice will be

published electronically once on and in print once in

.” ( at 24.)

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 summary and

postcard notices.

IV. Appointment of Class Counsel

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

, 330 F.R.D. at 58. Under Rule 23(g)(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.” Fed. R. Civ. P.

23(g)(1)(A). The Court may also “consider any other matter pertinent to counsel’s ability

to fairly and adequately represent the interests of the class.” Fed. R. 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 WL

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 appoints

Lead Counsel as class counsel for the purposes of settlement.

CONCLUSION

For the foregoing reasons, the Court (1) grants Plaintiffs’ motion for preliminary

settlement approval (ECF No. 56); (2) enters the proposed order preliminarily

approving the class action settlement (see Revised Proposed Order, ECF No. 64-3);

(3) directs the parties to issue notice as proposed (see Revised Long Notice, ECF No. 64-

5; Revised Summary Notice, ECF No. 64-7; Revised Postcard Notice, ECF No. 64-9;

Claim Form, ECF No. 58-3); (4) appoints Pomerantz LLP as class counsel for purposes

of settlement; and (5) schedules a final settlement hearing for December 7, 2023 at 10:30

a.m. in Courtroom 324 North.

SO ORDERED.

Dated: Brooklyn, New York

August 24, 2023

eye A Wankel

TARYN A? MERKL

UNITED STATES MAGISTRATE JUDGE

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