# In re Portland General Electric Company Securities Litigation

> District Court, D. Oregon · March 22, 2022

URL: https://www.frixlaw.com/law-library/cases/10394524

## Case

- **Court:** District Court, D. Oregon
- **Decided:** March 22, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## How later opinions describe it (automated extraction)

- reaffirming that a class notice need only “generally describe[] the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard” (alteration in original

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

In re PORTLAND GENERAL ELECTRIIC Case No. 3:20-cv-1583-SI (Lead)
SECURITIES LITIGATION Case No. 3:20-cv-1786-SI (Consolidated)

OPINION AND ORDER APPROVING
SETTLEMENT, ATTORNEY’S FEES,
AND EXPENSES

Keith S. Dubanevich and Keil M. Mueller, STOLL STOLL BERNE LOKTING & SHLACHTER PC,
209 SW Oak Street. Suite 500, Portland, OR 97204; Daniel L. Berger, Barbara Hart, and Caitlin
M. Moyna, GRANT & EISENHOFER PA, 485 Lexington Avenue, 29th Floor, New York, NY 10017.
Of Attorneys for Plaintiffs and the Putative Class.

David B. Markowitz, Dallas S. DeLuca, and Stanton R. Gallegos, MARKOWITZ HERBOLD PC,
1455 SW Broadway, Suite 1900, Portland, OR 97201; Susan L. Salzstein, Alexander C.
Drylewski, Shaud G. Tavakoli, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, One Manhattan
West, New York, NY 10001; and Peter B. Morrison and Virginia Milstead, SKADDEN, ARPS,
SLATE, MEAGHER & FLOM LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, CA 90071.
Of Attorneys for Defendants.

Michael H. Simon, District Judge.

Lead Plaintiff Public Employees Retirement System of Mississippi brings this securities
fraud class action individually and on behalf of others similarly situated against Portland General
Electric Company, its President and Chief Executive Officer Maria Pope, and its Chief Financial
Officer James F. Lobdell (collectively, Defendants). In Claim One, Lead Plaintiff alleges that
Defendants violated Section 10(b) of the Securities and Exchange Act (Act) and Rule 10b-5
promulgated thereunder. In Claim Two, Lead Plaintiff alleges that Defendants Pope and Lobdell
violated Section 20(a) of the Act. Defendants filed a motion to dismiss, and the Lead Plaintiff
responded. Before Defendants filed their reply brief, however, the parties reached a Stipulation
of Settlement dated July 10, 2021 (Settlement Agreement).1 ECF 45-1. The Court preliminarily

approved the Settlement Agreement and appointed Grant & Eisenhofer, P.A. as Lead Counsel for
the Settlement Class. ECF 46. Now before the Court is Lead Plaintiff’s unopposed Motion for
Final Approval of Class Action Settlement and Lead and Liaison Counsel’s (collectively, Class
Counsel) Motion for Award of Attorney’s Fees and Expenses. ECF 50.
BACKGROUND
This action arises from Defendants’ alleged misrepresentations about PGE’s energy
trading practices. Lead Plaintiff alleges that PGE maintained a risk-averse, conservative profile,
that lead investors and analysts to characterize PGE as a low-risk investment. Lead Plaintiff
further alleges that this low-risk profile was especially important to PGE given its relationship
with Enron before Enron filed for bankruptcy. As with other power companies, PGE allegedly

traded within the energy market to hedge against the uncertainty of future energy prices. This
price-hedging form of energy trading is known as trading for “retail purposes.” Lead Plaintiff
also alleges that beginning in early 2020, PGE engaged in energy trading for “non-retail
purposes,” that is, energy trading for the purpose of generating profit. As a result, Lead Plaintiff
contends, PGE’s statements in its filings with the Securities and Exchange Commission stating
that PGE did not engage in energy trading practices for “non-retail purposes” were false and

1 Unless otherwise indicated, all capitalized terms used in this Opinion and Order have
the same meanings as defined in the Settlement Agreement.
misleading. In August 2020, PGE announced that it suffered a $127 million loss due to these
high-risk non-retail trades. After PGE’s announcement, its stock price dropped from $41.64 to
$37.16. This lawsuit followed. As noted above, the parties have reached a settlement, which is
before the Court for final approval.
DISCUSSION

A. Settlement Class Certification
1. Notice to the Class
The Court granted preliminary approval to the parties’ proposed notice procedure.
ECF 46. The Court is satisfied that the notice procedure was carried out according to the
applicable standards. The Court finds that notice of the Stipulation was given to the Settlement
Class by the best means practicable under the circumstances, including mailing the Notice to
Class Members, posting the Notice, Proof of Claim, Stipulation, and Preliminary Approval Order
on a dedicated website, and publishing the Summary Notice in Investor’s Business Daily and on
PR Newswire.
The Notice provided Class Members with all required information including, among
other things: (1) a summary of the Action and the claims asserted; (2) a clear definition of the

Settlement Class; (3) a description of the material terms of the Stipulation; (4) the fact that no
affirmative action was needed to receive the benefit of class membership, but notice that Class
Members could opt out of the Settlement Class; (5) an explanation of Class Members’ opt-out
rights, the date by which Class Members must opt out, and information about how to do so;
(6) explaining the release of claims should Class Members choose to remain in the Settlement
Class; (7) instructions about how to object to the Stipulation and the deadline for Class Members
to submit any objections; (8) instructions about how to object to the requested attorney’s fees,
expenses, and service awards and the deadline for Class Members to submit any objections;
(9) the date, time, and location of the final approval hearing; (10) the internet address for the
settlement website and the telephone number from which Class Members could obtain more
information on the Stipulation; (11) contact information for the settlement administrator and the
Court; and (12) information about how Lead Counsel and the Class Representative would be
compensated. The notice is sufficient. See Lane v. Facebook, Inc., 696 F.3d 811, 826 (9th

Cir. 2012) (reaffirming that a class notice need only “generally describe[] the terms of the
settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come
forward and be heard” (alteration in original) (quoting Rodriguez v. W. Publ’g Corp., 563
F.3d 948, 962 (9th Cir. 2009))).
The form and method of notifying the Settlement Class fairly and adequately advised
Class Members of all relevant and material information about the Action and the proposed
Stipulation. The Court finds that the notice satisfies the requirements of due process and Rule 23
and the Private Securities Litigation Reform Act.
2. Rule 23 Requirements
To certify either a settlement class or a litigation class, the requirements of Rule 23 of the

Federal Rules of Civil Procedure must be satisfied. See Hanlon v. Chrysler Corp., 150
F.3d 1011, 1019 (9th Cir. 1998). Rule 23 of the Federal Rules of Civil Procedure affords this
Court with “broad discretion over certification of class actions . . . .” Stearns v. Ticketmaster
Corp., 655 F.3d 1013, 1021 (9th Cir. 2011). A plaintiff seeking class certification must satisfy
each requirement of Rule 23(a)—numerosity, commonality, typicality, and adequacy of
representation—and one subsection of Rule 23(b). See, e.g., Lozano v. AT & T Wireless Servs.,
Inc., 504 F.3d 718, 724 (9th Cir. 2007). Rule 23 sets forth more than a “mere pleading standard.”
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). On the other hand, Rule 23 provides
district courts with broader discretion to certify a class than to deny certification. See Abdullah v.
U.S. Sec. Assocs., Inc., 731 F.3d 952, 956 (9th Cir. 2013).
“The criteria for class certification are applied differently in litigation classes and
settlement classes.” In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 2019) (en
banc). In considering a litigation class, the court “must be concerned with manageability at trial,”

whereas in considering a settlement class, “such manageability is not a concern . . . [because], by
definition, there will be no trial.” Id. at 556-57. “[I]n deciding whether to certify a settlement
class, a district court must give heightened attention to the definition of the class or subclasses.”
Id. at 557. This determination “demand[s] undiluted, even heightened, attention in the settlement
context” because the court “lack[s] the opportunity, present when a case is litigated, to adjust the
class, informed by the proceedings as they unfold.” Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 620 (1997); see also Ortiz v. Fibreboard Corp., 527 U.S. 815, 848-49 (1999) (“When a
district court, as here, certifies for class action settlement only, the moment of certification
requires heightened attention.”).

The Rule 23 analysis is “rigorous” and may “entail some overlap with the merits of the
plaintiff’s underlying claim.” Wal-Mart, 564 U.S. at 351 (quotation marks omitted); Comcast
Corp., 569 U.S. at 33-34. Nevertheless, Rule 23 “grants courts no license to engage in free-
ranging merits inquiries at the certification stage.” Amgen Inc. v. Conn. Ret. Plans & Trust
Funds, 568 U.S. 455, 466 (2013). “Merits questions may be considered to the extent—but only
to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class
certification are satisfied.” Id. A district court, however, “must consider the merits if they overlap
with the Rule 23(a) requirements.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981 (9th
Cir. 2011) (emphasis in original).
Plaintiffs move without objection to certify the Settlement Class defined as:
All persons or entities who, directly or through an intermediary,
purchased or otherwise acquired common stock of PGE at any time
during the period of February 13, 2020 through August 24, 2020,
inclusive. Excluded from the Settlement Class are: (i) Defendants;
(ii) the present or former executive officers or members of the
Board of Directors of PGE and their immediate family members
(as defined in 17 C.F.R. § 229.404 (Instructions to Item 404(a)
(1)(a)(iii), substituting “PGE” for “the registrant”)) of any
excluded person; (iii) any entity in which any Defendant has, or
had during the Class Period, a controlling interest; and (iv) any
affiliate of PGE. Also excluded from the Settlement Class are any
persons and entities who exclude themselves by submitting a
request for exclusion that is accepted by the Court.
The Court previously agreed that the Class met the requisite factors in conditionally certifying
the Class for settlement purposes in the preliminary approval of the Settlement. The Court,
however, must now conduct a “rigorous” analysis of the Rule 23 factors.
a. Numerosity
Rule 23(a)(1) requires Plaintiffs to demonstrate that the proposed class “is so numerous
that joinder of all members is impracticable.” Rule 23(a)(1) provides no bright-line test or
minimum number of class members necessary to meet the numerosity requirement. Instead, the
court must evaluate the specific facts of each case. Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446
U.S. 318, 330 (1980). In general, classes of 20 members or fewer are too small, classes of 21
to 40 members may or may not be sufficiently numerous depending on the facts of the case, and
classes of 41 and higher are sufficiently numerous. See 5 James Wm. Moore et al., Moore’s
Federal Practice - Civil § 23.22(1)(b) (3d ed. 2021). In this district, there is a “rough rule of
thumb” that more than 40 class members meets the numerosity requirement. Giles v. St. Charles
Health Sys., Inc., 294 F.R.D. 585, 590 (D. Or. 2013); see also Wilcox Dev. Co. v. First Interstate
Bank of Or., N.A., 97 F.R.D. 440, 443 (D. Or. 1983) (same); 1 McLaughlin on Class Actions
§ 4:5 (17th ed.) (“The rule of thumb adopted by most courts is that proposed classes in excess
of 40 generally satisfy the numerosity requirement.”); 5 Moore’s Federal Practice - Civil
§ 23.22(1)(b) (“A class of 41 or more is usually sufficiently numerous. Once again, many courts
have ruled that classes with more than 40 members satisfy the numerosity requirement.”). The
claims administrator mailed over 67,000 Notice packets to potential Class Members, which
shows there are likely thousands of Class members. The Court therefore finds that the Class

meets the numerosity requirement.
b. Commonality
Rule 23(a)(2) states that class certification is appropriate only when the case presents
“questions of law or fact common to the class.” To satisfy the commonality requirement,
Plaintiffs must show that the class members suffered the “same injury” and that their claims
depend upon a “common contention.” Wal-Mart, 564 U.S. at 350. “That common contention,
moreover, must be of such a nature that it is capable of classwide resolution—which means that
determination of its truth or falsity will resolve an issue that is central to the validity of each one
of the claims in one stroke.” Id. But class members need not have every issue in common.
Commonality requires only “a single significant question of law or fact” in common. Mazza v.

Am. Honda Motor Co., 666 F.3d 581, 589 (9th Cir. 2012); see also Wal-Mart, 564 U.S. at 359.
“These common questions may center on ‘shared legal issues with divergent factual predicates
[or] a common core of salient facts coupled with disparate legal remedies.’” Jimenez v. Allstate
Ins. Co., 765 F.3d 1161, 1165 (9th Cir. 2014) (alteration in original) (quoting Hanlon, 150 F.3d
at 1019).
Lead Plaintiff alleges that the Class incurred losses due to Defendants’
misrepresentations about PGE’s high-risk energy trading practices. Specifically, Lead Plaintiff
alleges that Defendants repeatedly represented that PGE maintained only low-risk trading
practices when in fact, between February and August of 2020, PGE allegedly engaged in risky
energy trading for non-retail purposes. There are common issues of law and fact stemming from
these allegations, including whether Defendants materially misrepresented the risk of PGE’s
trading practices, whether Defendants made any alleged misrepresentations with an intent to
deceive, and whether any alleged misrepresentation caused Plaintiffs’ harm. The Court finds that
the Settlement Class meets the commonality requirement.

c. Typicality
To meet the typicality requirement, Plaintiffs must show that the named parties’ claims or
defenses are typical of the claims or defenses of the class. Fed. R. Civ. P. 23(a)(3). Under the
“permissive standards” of Rule 23(a)(3), the “representative’s claims are ‘typical’ if they are
reasonably co-extensive with those of absent class members; they need not be substantially
identical.” Hanlon, 150 F.3d at 1020. “The purpose of the typicality requirement is to assure that
the interest of the named representative aligns with the interests of the class.” Hanon v.
Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). To determine whether claims and
defenses are typical, courts look to “whether other members have the same or similar injury,
whether the action is based on conduct which is not unique to the named plaintiffs, and whether

other class members have been injured by the same course of conduct.” Wolin v. Jaguar Land
Rover N. Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010) (quoting Hanon, 976 F.3d at 508).
Lead Plaintiff’s claims are based on the same conduct as the claims of the Settlement
Class and there is nothing to suggest that Lead Plaintiff’s claims are not coextensive with the
Class. Thus, the Class meets the typicality requirement.
d. Adequacy of Representation
Rule 23(a)(4) states that before a class can be certified, a court must find that “the
representative parties will fairly and adequately protect the interests of the class.” This
requirement turns on two questions: (1) whether “the named plaintiffs and their counsel have any
conflicts of interest with other class members”; and (2) whether “the named plaintiffs and their
counsel [will] prosecute the action vigorously on behalf of the class.” Hanlon, 150 F.3d at 1020;
see also Fed. R. Civ. P. 23(g) (setting out factors to consider before appointing class counsel).
The adequacy requirement is based on principles of constitutional due process. Accordingly, a
court cannot bind absent class members if class representation is inadequate. Hansberry v.

Lee, 311 U.S. 32, 42-43 (1940); Hanlon, 150 F.3d at 1020.
Lead Plaintiff is an adequate representative of the class because there is no evidence to
suggest that Lead Plaintiff has any conflicts of interest with other Class members. Lead Counsel
has extensive experience prosecuting securities fraud class actions and has vigorously pursued
the interests of the Class by conducting a private investigation, preparing a Consolidated
Amended Complaint in anticipation of Defendants’ motion to dismiss, opposing Defendants’
motion to dismiss, and participating in mediation. Thus, the Court finds that the Lead Plaintiff
and Lead Counsel are adequate to represent the Class.
e. Predominance
Rule 23(b)(3) requires a court to find 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.” This analysis, in accord with Rule 23’s “principal purpose” of “promot[ing]
efficiency and economy of litigation,” inquires into “the relationship between the common and
individual issues in the case, and tests whether the proposed class is sufficiently cohesive to
warrant adjudication by representation.” Abdullah, 731 F.3d at 963-64 (simplified). The focus of
this inquiry, however, is on “questions common to the class.” Amgen Inc. v. Conn. Ret. Plans &
Tr. Funds, 568 U.S. 455, 459 (2013) (emphasis in original). Plaintiffs need not, at this threshold,
“prove that the predominating question[s] will be answered in their favor.” Id. at 468.
“[T]here is substantial overlap between” the test for commonality under Rule 23(a)(2)
and the predominance test under 23(b)(3). Wolin, 617 F.3d at 1172. The predominance test,
however, “is ‘far more demanding,’ and asks ‘whether proposed classes are sufficiently cohesive
to warrant adjudication by representation.’” Id. (citation omitted) (quoting Amchem, 521 U.S.
at 623-24). To determine whether common questions predominate, the Court begins with “the

elements of the underlying cause of action.” Erica P. John Fund, Inc. v. Halliburton Co., 563
U.S. 804, 809 (2011).
The common questions relevant to Plaintiffs’ claims predominate over any issues
relevant to any individual Plaintiff. Plaintiffs’ claims share essential factual issues including
whether Defendants misrepresented PGE’s trading practices, whether Defendants made any
misrepresentations with an intent to deceive, and whether any misrepresentations caused
Plaintiffs’ losses. See Amchem, 521 U.S. at 625 (“Predominance is a test readily met in certain
cases alleging consumer or securities fraud or violations of the antitrust laws.”). Thus, the Class
meets the predominance requirement.

f. Superiority
Rule 23(b)(3)’s superiority requirement tests whether “classwide litigation of common
issues will reduce litigation costs and promote greater efficiency.” Valentino v. Carter-Wallace,
Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). To make this determination, a court looks to “whether
the objectives of the particular class action procedure will be achieved in the particular case.”
Hanlon, 150 F.3d at 1023. In turn, this inquiry “necessarily involves a comparative evaluation of
alternative mechanisms of dispute resolution.” Id. The Ninth Circuit recognizes that “[d]istrict
courts are in the best position to consider the most fair and efficient procedure for conducting
any given litigation, and so must be given wide discretion to evaluate superiority.” Bateman v.
Am. Multi-Cinema, Inc., 623 F.3d 708, 712 (9th Cir. 2010) (quotation marks and citation
omitted). Relating to superiority, the purpose of Rule 23(b)(3) is “to allow integration of
numerous small individual claims into a single powerful unit.” Id. at 722. This allows plaintiffs
that otherwise likely would be “unable to proceed as individuals because of the disparity between
their litigation costs and what they hope to recover. . . . ‘to pool claims which would be
uneconomical to litigate individually.’” Local Joint Exec. Bd. of Culinary/Bartender Tr. Fund v.

Las Vegas Sands, Inc., 244 F.3d 1152, 1163 (9th Cir. 2001) (quoting Phillips Petroleum Co. v.
Shutts, 472 U.S. 797, 809 (1985)).
Rule 23(b)(3) provides four non-exhaustive factors for courts to consider. These factors
are:
(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).
As to the first factor, “[w]here recovery on an individual basis would be dwarfed by the
cost of litigating on an individual basis, this factor weighs in favor of class certification.”
Wolin, 617 F.3d at 1175. The cost of litigating individual securities fraud claims is high when
compared to the amount of damages at stake for putative class members. See In re Synchrony
Fin. Sec. Litig., 988 F.3d 157, 161 (2d Cir. 2021) (“Securities fraud cases are often complex
and costly . . . .”). Accordingly, “[b]ecause individual damages pale in comparison to the costs of
litigation, this factor points toward certification.” In re Anthem, Inc. Data Breach Litig., 327
F.R.D. 299, 316 (N.D. Cal. 2018).
As to the second factor, all outstanding related cases, apart from the derivative suit, have
been consolidated into this action. The second factor therefore favors certification. As to the third
factor, concentrating this litigation in the District of Oregon is appropriate because the
challenged conduct occurred in Oregon and potential Class Members are not centralized in any
one geographic location.
The Court need not consider the fourth factor because the parties only seek certification
of a settlement class, not a litigation class. Amchem, 521 U.S. at 620 (“Confronted with a request

for settlement-only class certification, a district court need not inquire whether the case, if tried,
would present intractable management problems, see Fed. Rule Civ. Proc. 23(b)(3)(D), for the
proposal is that there be no trial.”). The Court finds that he Class meets the superiority
requirement.
3. Conclusion
The Class meets the requirements for class certification. The Court finally certifies for
settlement purposes the following class: all persons or entities who, directly or through an
intermediary, purchased or otherwise acquired common stock of PGE at any time during the
period of February 13, 2020, through August 24, 2020, inclusive. Excluded from the Settlement
Class are: (i) Defendants; (ii) the present or former executive officers or members of the Board

of Directors of PGE and their immediate family members (as defined in 17 C.F.R. § 229.404
(Instructions to Item 404(a) (1)(a)(iii), substituting “PGE” for “the registrant”)) of any excluded
person; (iii) any entity in which any Defendant has, or had during the Class Period, a controlling
interest; and (iv) any affiliate of PGE. Also excluded from the Settlement Class are any persons
and entities who exclude themselves by submitting a request for exclusion that is accepted by the
Court.
B. Settlement Approval
1. General Standards
Under Rule 23(e) of the Federal Rules of Civil Procedure, “[t]he claims, issues, or
defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the
court’s approval.” “The purpose of Rule 23(e) is to protect the unnamed members of the class
from unjust or unfair settlements affecting their rights.” In re Syncor ERISA Litig., 516

F.3d 1095, 1100 (9th Cir. 2008). Thus, to approve a class action settlement, a court must find
that the settlement is “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2); Lane v.
Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012).
The settlement must be considered as a whole, and although there are “strict procedural
requirements on the approval of a class settlement, a district court’s only role in reviewing the
substance of that settlement is to ensure it is ‘fair, adequate, and free from collusion.’” Lane, 696
F.3d at 818-19 (quoting Hanlon, 150 F.3d at 1027). A court 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; and (D) the
proposal treats class members equitably relative to each other.” Fed. R. Civ. P. 23(e)(2). The

Ninth Circuit has articulated a number of factors guiding this review, including: (1) the strength
of the plaintiffs’ case; (2) the risk, expense, complexity, and likely duration of further litigation;
(3) the risk of maintaining class action status throughout the trial; (4) the amount offered in
settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the
experience and views of counsel; (7) the presence of a governmental participant; and (8) the
reaction of the class members to the proposed settlement. Lane, 696 F.3d at 819. Courts within
the Ninth Circuit “put a good deal of stock in the product of an arms-length, non-collusive,
negotiated resolution.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009).
Class action settlements involve “‘unique due process concerns for absent class
members’ who are bound by the court’s judgments.” Radcliffe v. Experian Info. Sols. Inc., 715
F.3d 1157, 1168 (9th Cir. 2013) (quoting In re Bluetooth Headset Prods. Liab. Litig., 654
F.3d 935, 946 (9th Cir. 2011)). When the settlement agreement is negotiated before formal class
certification, as in this case, the court should engage in “an even higher level of scrutiny for

evidence of collusion or other conflicts of interest than is ordinarily required under Rule 23(e).”
Id. (quoting In re Bluetooth, 654 F.3d at 946). This more “exacting review” is warranted “to
ensure that class representatives and their counsel do not secure a disproportionate benefit at the
expense of the unnamed plaintiffs who class counsel had a duty to represent.” Lane, 696 F.3d
at 819.
The Ninth Circuit has recognized, however, that “[j]udicial review also takes place in the
shadow of the reality that rejection of a settlement creates not only delay but also a state of
uncertainty on all sides, with whatever gains were potentially achieved for the putative class put
at risk.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Thus, there is a “strong judicial

policy that favors settlements, particularly where complex class action litigation is concerned.”
In re Hyundai, 926 F.3d at 556 (quoting Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015)).
2. Strength of Plaintiffs’ Case; Risk, Expense, Complexity, and Likely Duration of
Future Litigation; and Risk of Maintaining Class Action Status Throughout
Trial
Lead Plaintiff contends that although it believes it has meritorious claims, proceeding
with this litigation would be risky. Lead Plaintiff notes that it faced challenges opposing
Defendant’s motion to dismiss, which the Court had not resolved before the parties reached a
settlement. Lead Plaintiff also notes that even if its claims had survived a motion to dismiss, it
would continue to face additional hurdles at the summary judgment stage and lengthy litigation
beyond that, including a trial and likely appeals. Besides the risk of dismissal before trial or loss
at trial, continued litigation would be expensive and time-consuming. Further, class certification
had not begun at the time the parties reached a settlement, and both sides bore the risk that a
class would or would not be certified. Thus, given the parties’ uncertainty of the outcome and the
complexity of this case, these factors favor approval of the Settlement Agreement.
3. Amount Offered in Settlement

The Settlement amount is $6.75 million. The Plan of Allocation awards each claimant a
pro rata share of the Settlement Fund based on the claimant’s losses. Lead Plaintiff’s damages
expert calculated the total possible damages to be from $46.1 million to $51.3 million. The
Settlement amount therefore provides a recovery of 13.2 percent to 14.6 percent of the total
estimated damages. This factor favors approval. See Vataj v. Johnson, 2021 WL 5161927, at *6
(N.D. Cal. Nov. 5, 2021) (“This 2% aggregate recovery is consistent with the 2–3% average
recovery that the parties identified in other securities class action settlements.”); Ontiveros v.
Zamora, 303 F.R.D. 356, 370 (E.D. Cal. 2014) (“[I]t is well-settled law that a proposed
settlement may be acceptable even though it amounts to only a fraction of the potential recovery
that might be available to the class members at trial.” (quoting Nat’l Rural Telecomms. Coop. v.

DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004)).
4. Extent of Discovery Completed
Formal discovery is not required before a class action settlement. Linney v. Cellular
Alaska P’ship, 151 F.3d 1234, 1239-40 (9th Cir. 1998). Rather, “[a]pproval of a class action
settlement is proper as long as discovery allowed the parties to form a clear view of the strengths
and weaknesses of their cases.” Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 454 (E.D.
Cal. 2013). The parties assert that although this case settled before resolution of Defendants’
motion to dismiss, they nevertheless exchanged sufficient information to adequately determine
the strengths and weaknesses of their positions. The parties exchanged information during
negotiations, during mediation sessions, in mediation statements, and in briefing Defendants’
motion to dismiss. Thus, this factor does not weigh against approval. See Zepeda v. PayPal,
Inc., 2017 WL 1113293, at *14 (N.D. Cal. Mar. 24, 2017) (concluding that although the parties
had not engaged in formal discovery, “the parties informally exchanged information and
documents in connection with the three prior mediations conducted in this action,” which

favored approval of the settlement).
5. Experience and Views of Counsel
“Parties represented by competent counsel are better positioned than courts to produce a
settlement that fairly reflects each party’s expected outcome in litigation.” In re Pac. Enters. Sec.
Litig., 47 F.3d 373, 378 (9th Cir. 1995). While counsel’s views are instructive, they do not entitle
the settlement to a presumption of fairness. See Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035,
1049 (9th Cir. 2019). The Court is satisfied that Lead Counsel has extensive experience litigating
securities fraud class actions. Thus, Lead Counsel’s recommendation that the Settlement is fair,
reasonable, and adequate favors approval.
6. Presence of a Government Participant
The Class Action Fairness Act (CAFA) provides in relevant part:

Not later than 10 days after a proposed settlement of a class action
is filed in court, each defendant . . . shall serve upon the
appropriate State official of each State in which a class member
resides and the appropriate Federal official, a notice of the
proposed settlement[.]
* * *
An order giving final approval of a proposed settlement may not be
issued earlier than 90 days after the later of the dates on which the
appropriate Federal official and the appropriate State official are
served with the notice required under subsection (b).
28 U.S.C. § 1715(b), (d). Defendants mailed notices of the proposed settlement to the U.S.
Attorney General and state Attorneys General of all 50 states, the District of Columbia, and the
United States Territories by the required deadline under CAFA. Defendants also sent notices to
officials at the Oregon Public Utility Commission and the Securities and Exchange Commission.
No state or federal official has objected to the Settlement or otherwise become involved in the

case. This factor therefore favors approval.
7. Reaction of the Class Members to the Settlement
No Class members objected to the Settlement and only two members opted out. The low
rate of opt-outs and the lack of objections show that Class members favor the Settlement. This
factor favors approval.
8. Evidence of Collusion
When the settlement agreement is negotiated before formal class certification, as in this
case, the court should engage in “an even higher level of scrutiny for evidence of collusion or
other conflicts of interest than is ordinarily required under Rule 23(e).” In re Bluetooth, 654 F.3d
at 946. The Ninth Circuit has identified three signs of collusion: (1) class counsel receives a
disproportionate distribution of the settlement, or when the class receives no monetary

distribution but counsel is amply awarded; (2) the parties negotiate a “clear sailing” arrangement
providing for the payment of attorneys’ fees separate and apart from class funds without
objection by a defendant; or (3) the parties arrange for payments not awarded to revert to a
defendant rather than to be added to the class fund. Id. at 947.
Class Counsel seeks 25 percent of the Settlement amount, which is not a disproportionate
share. Further, the Settlement contains no “clear sailing” or reversion provisions. The Court
identifies no evidence of collusion or other conflicts of interest, which favors approval.
9. Conclusion
The above factors support approval of the Settlement Agreement. The Court therefore
finds that the Settlement and Plan of Allocation are fair, reasonable, and adequate.
C. Attorney’s Fees and Expenses
Requests for attorney’s fees must be made by a motion pursuant to Rule 54(d)(2) and
Rule 23(h) of the Federal Rules of Civil Procedure. In addition, notice of the motion must be

served on all parties and class members. Fed. R. Civ. P. 23(h). When settlement is proposed
along with a motion for class certification, notice to class members of the fee motion ordinarily
accompanies the notice of the settlement proposal itself. Fed. R. Civ. P. 23(h) advisory
committee’s notes to 2003 amendment. The deadline for class members to object to requested
fees must be set after the motion for the fees and documents supporting the motion have been
filed. In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 993 (9th Cir. 2010). “Allowing
class members an opportunity thoroughly to examine counsel’s fee motion, inquire into the bases
for various charges and ensure that they are adequately documented and supported is essential
for the protection of the rights of class members.” Id. at 994. Here, Class Counsel filed its motion
for attorney’s fees and supporting documents four weeks before the deadline to file objections,

thereby complying with In re Mercury.
In considering the amount of attorney’s fees for class counsel where there is a common
fund, “courts have discretion to employ either the lodestar method or the percentage-of-recovery
method.” In re Bluetooth, 654 F.3d at 942. Under either method, the court must exercise its
discretion to achieve a “reasonable” result. Id. Because reasonableness is the goal, “mechanical
or formulaic application of either method, where it yields and unreasonable result, can be an
abuse of discretion.” Fischel v. Equitable Life Assurance Soc’y of the U.S., 307 F.3d 997, 1006
(9th Cir. 2002). When using the percentage method, 25 percent is the “benchmark” fee award,
but this amount may be adjusted upward or downward when “special circumstances” warrant a
departure. In re Bluetooth, 654 F.3d at 942. Courts must place in the record the relevant special
circumstances. Id. As the Ninth Circuit has explained,
In Vizcaino, we identified several factors courts may consider
when assessing requests for attorneys’ fees calculated pursuant to
the percentage-of-recovery method: (1) the extent to which class
counsel achieved exceptional results for the class; (2) whether the
case was risky for class counsel; (3) whether counsel’s
performance generated benefits beyond the cash settlement fund;
(4) the market rate for the particular field of law; (5) the burdens
class counsel experienced while litigating the case; (6) and whether
the case was handled on a contingency basis.
Vizcaino did not establish an exhaustive list of factors for assessing
fee requests calculated using the percentage-of-recovery method,
but district courts have frequently referred to the factors it
identified when considering fee awards for class counsel.
Ultimately, district courts must ensure their fee awards are
“supported by findings that take into account all of the
circumstances of the case.”
In re Optical Disk Drive Prods. Antitrust Litig., 959 F.3d 922, 930 (9th Cir. 2020) (citations
omitted) (quoting Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 (9th Cir. 2002)); see also In
re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 954-55 (9th Cir. 2015) (noting that the
Vizcaino factors “include the extent to which class counsel achieved exceptional results for the
class, whether the case was risky for class counsel, whether counsel’s performance generated
benefits beyond the cash settlement fund, the market rate for the particular field of law (in some
circumstances), the burdens class counsel experienced while litigating the case (e.g., cost,
duration, foregoing other work), and whether the case was handled on a contingency basis” and
that in addition, “a court may cross-check its percentage-of-recovery figure against a lodestar
calculation” (quotation marks omitted)).
The Court exercises its discretion to use the percentage-of-recovery method in this case.
As described above, this case presents complex legal issues and litigation risks, and Class
Counsel secured a favorable Settlement amount in comparison to the Class’s estimated damages.
These factors favor the 25 percent benchmark fee. Further, a lodestar cross check confirms that
a 25 percent fee is appropriate. Lead Counsel expended 924.6 hours at hourly rates ranging from
$220 to $1,000. Liaison Counsel expended 60.95 hours at hourly rates of $470 and $635. Liaison
Counsel represents that these rates are standard rates in Oregon. Lead Plaintiff also notes that

Lead and Liaison Counsel made an effort to staff the case leanly in order to avoid duplicative
work. The total lodestar amount is $624,015.25. The requested 25 percent fee is $1,687,500,
which represents a 2.7 multiplier of the lodestar cross check. A 2.7 multiplier is reasonable,
given the complexity of this case and Class Counsel’s efforts to curb repetitive work. See Van
Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 298 (N.D. Cal. 1995) (“Multipliers in the 3–4
range are common in lodestar awards for lengthy and complex class action litigation.”). The
Court therefore finds that a 25 percent fee is reasonable.
Class Counsel also seeks recovery of $86,382.59 in expenses. These costs include
expenses for an energy trading expert, an economics expert, an investigative firm to develop the

facts of the case, an experienced mediator, as well as travel, filing fees, and legal research. The
Court finds that these expenses have been reasonably and necessarily incurred in this case and
are recoverable from the Settlement Fund. See, e.g., Wininger v. SI Mgmt., L.P., 301 F.3d 1115,
1120-21 (9th Cir. 2002) (“[J]urisdiction over a fund allows for the district court to spread the
costs of the litigation among the recipients of the common benefit.”); In re Media Vision Tech.
Sec. Litig., 913 F. Supp. 1362, 1366 (N.D. Cal. 1996) (“Reasonable costs and expenses incurred
by an attorney who creates or preserves a common fund are reimbursed proportionately by those
class members who benefit by the settlement.”).
CONCLUSION
The Court GRANTS Lead Plaintiff’s unopposed Motion for Final Approval of Class
Action Settlement and Class Counsel’s unopposed Motion for Award of Attorney’s Fees and
Expenses (ECF 50). The Court awards Class Counsel $1,687,500 in attorney’s fees and
$86,382.59 in costs, to be paid from the Settlement Fund. This case is dismissed, but the Court

retains jurisdiction over the parties and all matters relating to the Lawsuit and Settlement,
including the administration, interpretation, construction, effectuation, enforcement, and
consummation of the Settlement and this Opinion and Order.
IT IS SO ORDERED.

DATED this 22nd day of March, 2022.

/s/ Michael H. Simon
Michael H. Simon
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10394524. Public record. Not legal advice.