UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY... · 2020. 11. 3. · Settlement Class Members, and The Toronto-Dominion Bank (“TD”), Bharat B. Masrani Case 1:17-cv-01665-NLH-JS

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

IN RE TORONTO-DOMINION BANK

SECURITIES LITIGATION

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1:17-cv-1665 (NLH/JS)

Class Action

PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF CLASS ACTION

SETTLEMENT, CERTIFICATION OF SETTLEMENT CLASS,

AND APPROVAL OF PLAN OF ALLOCATION

PLEASE TAKE NOTICE that Lead Plaintiff Ethan Silverman and Plaintiff Mark

Blumenthal (together, “Plaintiffs”), by and through their attorneys Pomerantz LLP, individually

and on behalf of all Settlement Class Members, will and hereby do move this Court on October 3,

2019, at 3:30 p.m., the date and time previously set by the Honorable Noel L. Hillman, U.S.D.J.

at the Mitchell H. Cohen Building & U.S. Courthouse, 4th and Cooper Streets, Camden, NJ 08101,

for an order granting final approval of the Settlement, certifying the Settlement Class1, and

approval of the Plan of Allocation. Additionally, pursuant to paragraph 2.7 of the Stipulation,

Plaintiffs hereby request that the Court approve an additional three hundred thousand dollars

($300,000.00) be transferred from the Settlement Account to the Notice & Administration Account

to cover costs and expenses of delivering notice and settlement administration.

This motion is based on the accompanying Memorandum of Law, the Declaration of

Matthew L. Tuccillo, Esq., the Declaration of Ed Barrero, the Declaration of Ethan Silverman, and

the Declaration of Mark Blumenthal, all filed simultaneously herewith, and the pleadings and

1 Unless otherwise stated, all capitalized terms used herein have the same definitions as assigned

in the Stipulation of Settlement, dated June 20, 2019 (Dkt. No. 109-9) (“Stipulation”).

Case 1:17-cv-01665-NLH-JS Document 113 Filed 09/13/19 Page 1 of 3 PageID: 2092

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records on file in this action, including, without limitation, the Stipulation and the exhibits thereto,

and other such matters and argument as the Court may consider at the hearing on this motion.

Dated: September 12, 2019

Respectfully submitted, LITE DEPALMA GREENBERG, LLC /s/ Bruce D. Greenberg Bruce D. Greenberg 570 Broad Street Suite 1201 Newark, NJ 07102 Telephone: (973) 877-3820 Facsimile: (973) 623-0858 Email: [email protected] Plaintiffs’ Liaison Counsel POMERANTZ LLP Jeremy A. Lieberman Matthew L. Tuccillo Jennifer Banner Sobers 600 Third Avenue, 20th Floor New York, New York 10016 Telephone: (212) 661-1100 Facsimile: (212) 661-8665 Email: [email protected]

[email protected] [email protected]

POMERANTZ LLP Patrick V. Dahlstrom 10 South La Salle Street, Suite 3505 Chicago, Illinois 60603 Telephone: (312) 377-1181 Facsimile: (312) 377-1184 Email: [email protected] Plaintiffs’ Lead Counsel


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CERTIFICATE OF SERVICE

I hereby certify that on this, the 12th day of September, 2019, a true and correct copy of the

foregoing was filed electronically and served by mail on anyone unable to accept electronic filing.

Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing

system or by mail to anyone unable to accept electronic filing, as indicated on the Notice of

Electronic Filing. Parties may access this filing through the Court’s CM/ECF System.

/s/ Bruce D. Greenberg Bruce D. Greenberg






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1:17-cv-1665 (NLH/JS)

Class Action

[PROPOSED] ORDER AND FINAL JUDGMENT

On the 3rd day of October, 2019, a hearing having been held before this Court to determine,

among other things: (1) whether the terms and conditions of the Stipulation of Settlement dated

June 20, 2019 (the “Stipulation”) are fair, reasonable, and adequate for the settlement of all claims

asserted by Plaintiffs and the Settlement Class in this Action (the “Settlement”); and (2) whether

to approve the proposed Plan of Allocation as a fair and reasonable method to allocate the Net

Settlement Fund among the Settlement Class Members; and

The Court having considered all matters submitted to it at the hearing and otherwise; and

It appearing that the Notice substantially in the form approved by the Court in the Court’s

Order Preliminarily Approving Settlement and Providing For Notice (“Preliminary Approval

Order”) was mailed to all reasonably identifiable potential Settlement Class Members; and

It appearing that the Publication Notice substantially in the form approved by the Court in

the Preliminary Approval Order was published in accordance with the Preliminary Approval Order

and the specifications of the Court;

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUGED, AND DECREED THAT:

1. Unless indicated otherwise, capitalized terms used herein have the same meanings

defined in the Stipulation.

2. The Court has jurisdiction over the subject matter of the Action, Plaintiffs, all

Settlement Class Members, and The Toronto-Dominion Bank (“TD”), Bharat B. Masrani

Case 1:17-cv-01665-NLH-JS Document 113-1 Filed 09/13/19 Page 1 of 12 PageID: 2095

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(“Masrani”), Riaz E. Ahmed (“Ahmed”), Colleen Johnston (“Johnston”), Teri Currie (“Currie”),

Leo Salom (“Salom”), Mike Pedersen (“Pedersen”), and Mark Chauvin (“Chauvin”) (collectively,

the “Settling Defendants”).

3. In the Preliminary Approval Order the Court certified, for purposes of the

Settlement only, the Action is a class action pursuant to Fed. R. Civ. P. 23(a) and (b)(3) on behalf

of the Settlement Class consisting of all persons or entities who purchased, or otherwise acquired,

U.S.-traded common stock of TD (NYSE: TD) between December 3, 2015 and March 9, 2017,

both dates inclusive (the “Settlement Class Period”). Excluded from the Settlement Class are

Defendants; members of their immediate families and their affiliates; any executive officer or

director of TD during the Settlement Class Period; any entity in which any Defendants had a

controlling or partnership interest during the Settlement Class Period; the judges presiding over

the Action and the immediate family members of such judges; attorneys of record in the Action;

and the successors, heirs, and assigns of any excluded persons and/or entities referenced above.

Per the terms of the Stipulation, the Settling Defendants shall assist in identifying the persons and

entities to be excluded from the Settlement Class. Also excluded are those persons who filed valid

and timely requests for exclusion in accordance with this Order. If any persons have filed such

valid and timely requests for exclusion, they are set forth in Exhibit A hereto.

4. The Court hereby finds that the forms and methods of notifying the Settlement

Class of the Settlement and its terms and conditions met the requirements of due process and Fed.

R. Civ. P. 23 and Section 21D(a)(7) of the Exchange Act, 15 U.S.C. § 78u-4(a)(7), as amended by

the Private Securities Litigation Reform Act of 1995; constituted the best notice practicable under

the circumstances; and constituted due and sufficient notice to all persons and entities entitled

thereto of these proceedings and the matters set forth herein, including the Settlement and Plan of


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Allocation, to all Persons entitled to such notice. No Settlement Class Member is relieved from

the terms of the Settlement, including the releases provided for therein, based upon the contention

or proof that such Settlement Class Member failed to receive actual or adequate notice. A full

opportunity has been offered to the Settlement Class Members to object to the proposed Settlement

and to participate in the hearing thereon. The Court further finds that the notice provisions of the

Class Action Fairness Act, 28 U.S.C. § 1715, were fully discharged and that the statutory waiting

period has elapsed. Thus, it is hereby determined that all members of the Settlement Class are

bound by this Order and Final Judgment, except those persons listed on Exhibit A to this Order

and Final Judgment.

5. The Settlement, whereby Settling Defendants shall cause to be paid per the terms

of the Stipulation an aggregate of thirteen million two hundred fifty thousand dollars

($13,250,000.00) is approved as fair, reasonable, and adequate and in the best interests of the

Settlement Class. Plaintiffs and the Settling Defendants are directed to consummate the Settlement

in accordance with the terms and provisions of the Stipulation.

6. Except with respect to persons who have validly and timely requested exclusion

from the Settlement Class (listed on Exhibit A), this Action is dismissed with prejudice as to the

Settling Defendants.

7. Plaintiffs and the Settlement Class Members hereby release and forever discharge

the Settling Defendants and Released Parties from any and all Released Settlement Class Claims,

whether or not such Plaintiff or Settlement Class Member returns the Proof of Claim or shares in

the Settlement Fund. Plaintiffs and the Settlement Class Members are hereby permanently and

forever enjoined from prosecuting, attempting to prosecute, or assisting others in the prosecution


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of the Released Settlement Class Claims against the Settling Defendants and the Released Parties,

as set forth in the Stipulation. For purposes of this Order and Final Judgment:

a. “Released Settlement Class Claims” means any and all claims, whether known

or Unknown Claims, whether arising under state, federal, local, common,

statutory, administrative or foreign law, or any other law, rule or regulation, at

law or in equity, whether class or individual in nature, whether accrued or

unaccrued, whether liquidated or unliquidated, whether matured or unmatured,

that the Plaintiffs or any other Settlement Class members: (a) asserted in the

FAC; or (b) could have asserted in any court or forum that arise out of or are

based on the allegations, transactions, facts, matters or occurrences,

representations, or omissions set forth in the FAC and that relate to the purchase

or acquisition of shares of TD common stock on the New York Stock Exchange

(NYSE: TD) during the Settlement Class Period. Released Settlement Class

Claims shall exclude, inter alia, claims (i) asserted in the Canadian Action,

except to the extent that such claim(s) impermissibly seek relief that is

duplicative of the relief sought in this Action arising from the Settlement

Class’s purchases or acquisitions of the U.S.-traded common stock of TD

(NYSE: TD) during the Settlement Class Period that are encompassed within

Settlement of this Action, (ii) relating to transactions in TD’s common stock on

non-U.S. exchanges, and/or (iii) relating to the enforcement of the settlement.

b. “Released Parties” means each and every one of the following: (a) Defendant

TD, and its former or present parents, subsidiaries, divisions and affiliates, and

the respective employees, members, partners, principals, executive officers,


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directors, controlling shareholders, attorneys, accountants, auditors, and

insurers; and Defendants Masrani, Ahmed, Johnston, Currie, Salom, Pedersen,

and Chauvin, and the predecessors, successors, estates, spouses, heirs,

executors, trusts, trustees, administrators, agents, legal representatives and

assigns of each of them, in their capacity as such, for the Released Settlement

Class Claims, and (b) Plaintiffs, Lead Counsel and Plaintiffs’ other counsel, and

the Settlement Class members for the Released Defendant Claims.

8. Each of the Settling Defendants and the Released Parties hereby releases and

forever discharges any and all Released Defendant Claims against the Plaintiffs or any Settlement

Class Member, and any of their counsel including Lead Counsel. For purposes of this Order and

Final Judgment:

a. “Released Defendant Claims” means any and all counterclaims and bases for

relief, whether known or Unknown Claims, that the Released Parties could have

raised in the Action against the Plaintiffs, Lead Counsel or Plaintiffs’ other

counsel, or any Settlement Class Member, whether arising under state, federal,

local, common, statutory, administrative or foreign law, or any other law, rule

or regulation, at law or in equity, whether class or individual in nature, whether

accrued or unaccrued, whether liquidated or unliquidated, whether matured or

unmatured, which arise out of or relate to the commencement, prosecution or

settlement of the Action (except for claims to enforce the Settlement) and

claims for violations of Fed. R. Civ. P. 11 or any other fee or cost-shifting claim.

9. Bar Order: All Persons are barred from commencing, prosecuting, or asserting

any Barred Claims (as defined below). All Barred Claims are hereby extinguished, discharged,


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satisfied, and unenforceable. If any term of this Bar Order is held to be unenforceable after the

date of entry, such provision shall be substituted with such other provision as may be necessary to

afford all Released Parties the fullest protection permitted by law from any Barred Claim. For

purposes of this Order and Final Judgment:

a. “Barred Claim” means any claim, if any, however styled, whether for

indemnification, contribution, or otherwise and whether arising under state,

federal, or common law, against the Settling Defendants or Released Parties

(including claims asserted by Released Parties against other Released Parties)

where the claim is or arises from a Released Claim and the alleged injury to

such Person arises from that Person’s alleged liability to the Settlement Class

or any Settlement Class Member, including any claim in which a Person seeks

to recover from any of the Released Parties (i) any amounts such person or

entity has or might become liable to pay to the Settlement Class or any

Settlement Class Member and/or (ii) any costs, expenses, or attorneys’ fees

from defending any claim by the Settlement Class or any Settlement Class

Member.

10. Notwithstanding the foregoing, nothing in this Order and Final Judgment:

a. Will bar the Released Parties from pursuing claims that are outside the scope of

or independent of the Released Claims, including, without limitation, any claim

that any Released Party may have for indemnification related to costs and

expenses incurred in conjunction with the Action;


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b. Will bar or constitute a release of any claim by any of the Released Parties for

insurance or reinsurance coverage arising out of, related to, or in connection

with this Action or the Released Claims; or

c. Shall prevent any Person listed on Exhibit A hereto from pursuing any claim

against any Released Party; if any such Person pursues any such claim against

any Released Party, nothing in this Order and Final Judgment or in the

Stipulation shall operate to preclude such Released Party from (i) asserting any

claim of any kind against such Person, including any Released Claim, (ii) or

seeking contribution or indemnity from any Person, including any other

Released Party, in respect of the claim made by a Person listed on Exhibit A.

11. Plaintiffs’ counsel are awarded attorneys’ fees in the amount of

$___________________________________, and expenses in the amount of

$___________________________________, such amounts to be paid from out of the Settlement

Fund ten (10) calendar days following the entry of this Order. Lead Counsel shall thereafter be

solely responsible for allocating the attorneys’ fees and expenses among other Plaintiffs’ counsel

in a manner in which Lead Counsel in good faith believe reflects the contributions of such counsel

to the initiation, prosecution, and resolution of the Action. In the event that this Judgment does

not become Final, and any portion of the Fee and Expense Award has already been paid from the

Settlement Fund, Lead Counsel and all other plaintiffs’ counsel to whom Lead Counsel has

distributed payments shall within ten (10) business days of entry of the order rendering the

Settlement and Judgment non-Final or notice of the Settlement being terminated or precludes the

Effective Date from occurring, refund the Settlement Fund the Fee and Expense Award paid to

Lead Counsel and, if applicable, distributed to other counsel.


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12. Plaintiffs are each awarded the sum of $____________________, as reasonable

costs and expenses directly relating to the representation of the Settlement Class, as provided in

15 U.S.C. § 78u-4(a)(4), such amounts to be paid from the Settlement Fund upon the Effective

Date of the Settlement.

13. The Court hereby finds that the proposed Plan of Allocation is a fair and reasonable

method to allocate the Net Settlement Fund among Settlement Class Members.

14. The Court finds that all parties and their counsel have complied with each

requirement of Fed. R. Civ. P. 11 as to all proceedings herein.

15. Neither this Order and Final Judgment, the Preliminary Approval Order, the

Stipulation (including the exhibits thereto), the Memorandum of Understanding (“MOU”), nor any

of the negotiations, documents, or proceedings connected with them shall be deemed to be, or be,

argued to be offered or received:

a. Against any of the Settling Defendants or the Released Parties as evidence of,

or construed as evidence of, any presumption, concession, or admission by any

of the Settling Defendants or the Released Parties with respect to the truth of

any fact alleged by the Plaintiffs in this Action or the validity of any claim that

has been or could have been asserted against any of the Settling Defendants or

the Released Parties in this Action, or the deficiency of any defense that has

been or could have been asserted in the Action, or of any wrongdoing or liability

by any of the Settling Defendants or the Released Parties;

b. Against any of the Settling Defendants or the Released Parties as evidence of,

or construed as evidence of, any presumption, concession, or admission of any

fault, misrepresentation, or omission with respect to any statement or written


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document approved or made by any of the Settling Defendants or the Released

Parties;

c. Against any of the Settling Defendants, the Released Parties, the Plaintiffs, or

any Settlement Class Member as evidence of, or construed as evidence of, any

presumption, concession, or admission by any of the Settling Defendants, the

Released Parties, the Plaintiffs, or any Settlement Class Member with respect

to any liability, negligence, fault, or wrongdoing as against any of the Settling

Defendants, the Released Parties, the Plaintiffs, or any Settlement Class

Member in any other civil, criminal, or administrative action or proceeding,

other than such proceedings as may be necessary to effectuate the provisions of

this Stipulation, provided, however, that if this Stipulation is approved by the

Court, the Settling Defendants, the Released Parties, the Plaintiffs, and any

Settlement Class Member may refer to it to effectuate the liability protection

granted them hereunder;

d. Against any of the Settling Defendants or the Released Parties as evidence of,

or construed as evidence of, any presumption, concession, or admission by any

of them that the Settlement Amount represents the amount that could or would

have been received after trial of the Action against them;

e. Against the Plaintiffs or any Settlement Class Member as evidence of, or

construed as evidence of, any presumption, concession, or admission by any of

the Plaintiffs or any Settlement Class Member that any of their claims are

without merit, or that any defenses asserted by the Settling Defendants, or any


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other or former Defendants in the Action have any merit, or that damages

recoverable in the Action would not have exceeded the Settlement Fund;

f. Against the Plaintiffs or any Settlement Class Member or Lead Counsel as

evidence of, or construed as evidence of, any infirmity of the claims alleged by

the Plaintiffs in the FAC or the Action or of any lack of merit to the claims or

the Action or of any bad faith, dilatory motive, or inadequate prosecution of the

claims or the Action; or

g. As evidence of, or construed as evidence of, any presumption, concession, or

admission that class certification is appropriate in this Action, except for

purposes of this Settlement.

16. Notwithstanding the foregoing Paragraph 15, the Parties and other Released Parties

may file or refer to this Order and Final Judgment, the Stipulation, Preliminary Approval Order,

and/or any Proof of Claim Form: (a) to effectuate the liability protections granted hereunder or

thereunder, including, without limitation, to support a defense or counterclaim based on principles

of res judicata, collateral estoppel, release, good-faith settlement, judgment bar or reduction, or

any theory of claim preclusion or issue preclusion or similar defense or counterclaim; (b) to obtain

a judgment reduction under applicable law; (c) to enforce any applicable insurance policies and

any agreements relating thereto; or (d) to enforce the terms of the Stipulation and/or this Order and

Final Judgment.

17. Exclusive jurisdiction is hereby retained over the Parties being released in

conjunction with the Settlement for all matters relating to the Action, including the administration,

interpretation, effectuation or enforcement of the Stipulations, or Settlement and this Order and


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Final Judgment, and including any application for fees and expenses incurred in connection with

administering and distributing the Settlement proceeds to the Settlement Class Members.

18. Without further order of the Court, the Settling Parties may agree to reasonable

extensions of time to carry out any of the provisions in the Stipulation.

19. There is no just reason for delay in the entry of this Order and Final Judgment, and

immediate entry by the Clerk of the Court is directed pursuant to Fed. R. Civ. P. 54(b).

20. The finality of this Order and Final Judgment shall not be affected, in any manner,

by any appeals concerning the Attorneys’ Fees and Expenses awarded herein, the compensatory

award to Plaintiffs, or the Plan of Allocation.

21. In the event that the Settlement does not become Final and effective in accordance

with the terms and conditions set forth in the Stipulation, then the Stipulation, except as otherwise

provided in ¶¶ 2.14 and 8.3 therein, including any amendment(s) thereto, the Preliminary Approval

Order, as set forth in ¶ 28 thereof, and this Order and Final Judgment, except for ¶¶ 14 and 20-22,

shall be rendered null and void of no further force or effect, and all Parties shall be deemed to have

reverted nunc pro tunc to their respective status prior to the execution of the MOU, and all Parties

shall proceed in all respects as if the MOU and the Stipulation had not been executed and the

related orders had not been entered, without prejudice in any way from the negotiation, fact, or

terms of the Settlement, and preserving all of their respective claims and defenses in the Action,

and shall revert to their respective positions in the Action. In such circumstances, all Parties shall

thereafter work together to arrive at a mutually agreeable schedule for resuming litigation of the Action.

22. In the event the Settlement and Judgment do not become Final or the Settlement is

terminated in accordance with the terms and conditions set forth in the Stipulation, within ten (10)

business days of entry of the order rendering the Settlement and Judgment non-Final or notice of

the Settlement being terminated, all monies then held in the Notice & Administration Account and


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Settlement Fund, including interest earned, shall be returned to Settling Defendants’ insurance

carrier(s) who paid such monies into the Settlement Fund, pro rata as had been paid by them

respectively, per their instructions except for any monies paid for Notice & Administration Costs

and Taxes. Under those circumstances, Lead Counsel shall undertake to return those amounts by

taking all steps necessary to cause the Escrow Agent to make the foregoing repayments. Plaintiffs

and the Settlement Class shall have no responsibility for the return of such consideration.

23. Any Court orders entered during this Action relating to the confidentiality of

information shall survive this Settlement.

24. Pursuant to paragraph 2.7 of the Stipulation, the Court approves an additional three

hundred thousand dollars ($300,000.00) be transferred from the Settlement Account to the Notice

& Administration Account to cover costs and expenses to deliver notice and settlement

administration.

Dated: _____________, 2019

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HON. NOEL L. HILLMAN

UNITED STATES DISTRICT JUDGE






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1:17-cv-1665 (NLH/JS)

Class Action

PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR FINAL

APPROVAL OF CLASS ACTION SETTLEMENT, CERTIFICATION OF

SETTLEMENT CLASS, AND APPROVAL OF PLAN OF ALLOCATION


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TABLE OF CONTENTS

I. INTRODUCTION .............................................................................................................. 1

II. SUMMARY OF THE LITIGATION AND PROCEDURAL HISTORY ......................... 2

III. THE SETTLEMENT .......................................................................................................... 4

IV. THE SETTLEMENT SHOULD BE FINALLY APPROVED .......................................... 5

A. The Settlement Bears a Strong Initial Presumption of Fairness ............................. 7

B. The Settlement is Fair, Reasonable, and Adequate Under Girsh ......................... 10

1. Litigating the Securities Claims Would be Long, Complex, and Expensive .................................................................................................. 10

2. The Settlement Class’s Reaction Was Overwhelmingly Positive ............ 12

3. Plaintiffs Had Sufficient Command of the Case’s Merits to Enter the Settlement ................................................................................................. 14

4. There Were Substantial Risks of Establishing Liability and Damages .... 15

5. There Were Substantial Risks of Achieving and Maintaining Class Certification .............................................................................................. 16

6. The Settlement Is an Excellent Result Well Within the Range of Reasonableness ......................................................................................... 18

7. The Settlement Meets All Requirements of Rule 23(e) ............................ 20

8. The Prudential Factors Support Approval ................................................ 21

V. THE SETTLEMENT CLASS SHOULD BE CERTIFIED UNDER RULE 23............... 22

VI. THE COURT SHOULD APPOINT PLAINTIFFS’ COUNSEL AS COUNSEL FOR THE CLASS ..................................................................................................................... 26

VII. NOTICE WAS GIVEN PER THE COURT’S PRELIMINARY APPROVAL ORDER AND SATISFIED RULE 23 AND DUE PROCESS ....................................................... 27

VIII. THE PLAN OF ALLOCATION IS FAIR, ADEQUATE, AND REASONABLE .......... 29

IX. REQUEST FOR ADDITIONAL FUNDS TO BE TRANSFERRED INTO THE NOTICE &ADMINISTRATION ACCOUNT ................................................................................ 30

X. CONCLUSION ................................................................................................................. 30


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TABLE OF AUTHORITIES

Page(s)

Cases

Affiliated Ute Citizens of Utah v. United States,

406 U.S. 128 (1972) .................................................................................................................17

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) ...........................................................................................................23, 25

Anixter v. Home-Stake Prod. Co.,

77 F.3d 1215, 1219 (10th Cir. 1996) .......................................................................................12

Arbuthnot v. Pierson,

607 F. App’x 73 (2d Cir. 2015) .................................................................................................6

Backman v. Polaroid Corp.,

910 F.2d 10 (1st Cir. 1990) ......................................................................................................12

Basic Inc. v. Levinson,

485 U.S. 224 (1988) .................................................................................................................17

Bell Atl. Corp. v. Bolger,

2 F.3d 1304 (3d Cir. 1993).......................................................................................................13

Bryan v. Pittsburgh Plate Glass Co.,

494 F.2d 799 (3d Cir. 1974).......................................................................................................7

City of Detroit v. Grinnell Corp.,

495 F.2d 448 (2d Cir. 1974).....................................................................................................20

City of Providence v. Aéropostale, Inc., No. 11 Civ. 7132 (CM (GWG),

2014 U.S. Dist. LEXIS 64517 (S.D.N.Y. May 9, 2014)......................................................6, 20

Dura Pharm, Inc. v. Broudo,

544 U.S. 336 (2005) .................................................................................................................15

Girsh v. Jepson,

521 F.2d 153 (3d Cir. 1975)...................................................................................1, 6, 7, 10, 22

Haas v. Burlington Cty., No. 08-1102 (NLH/JS),

2019 U.S. Dist. LEXIS 16071 (D.N.J. Jan. 31, 2019) .....................................................1, 6, 18

Halley v. Honeywell Int’l, Inc.,

861 F.3d 481 (3d Cir. 2017).......................................................................................................6


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Halliburton Co. v. Erica P. John Fund, Inc.,

573 U.S. 258 (2014) .....................................................................................................10, 11, 17

Hefler v. Wells Fargo & Co., No. 16-cv-05479-(JST),

2018 U.S. Dist. LEXIS 150292 (N.D. Cal. Sept. 4, 2018) ......................................................21

In re Am. Bank Note Holographics, Inc., Sec. Litig.,

127 F. Supp. 2d 418 (S.D.N.Y. 2001)......................................................................................15

In re AremisSoft Corp. Sec. Litig.,

210 F.R.D. 109 (D.N.J. 2002) ......................................................................................24, 25, 26

In re Auto. Refinishing Paint Antitrust Litig., MDL No. 1426,

2004 U.S. Dist. LEXIS 29161 (E.D. Pa. Sept. 27, 2004) ..........................................................7

In re Cendant Corp. Litig.,

264 F.3d 201 (3d Cir. 2001).....................................................................................7, 10, 16, 20

In re Chambers Dev. Sec. Litig.,

912 F. Supp. 822 (W.D. Pa. 1995) ...........................................................................................11

In re China Sunergy Sec. Litig., No. 07 Civ. 78595 (DAB),

2011 WL 1899715 (S.D.N.Y. May 13, 2011) .........................................................................20

In re Corel Corp. Sec. Litig.,

206 F.R.D. 533 (E.D. Pa. 2002) ...............................................................................................24

In re Corel Corp. Sec. Litig.,

293 F. Supp. 2d 484 (E.D. Pa. 2003) ...................................................................................9, 30

In re Crazy Eddie Sec. Litig.,

824 F. Supp. 320 (E.D.N.Y. 1993) ..........................................................................................20

In re Datatec Sys. Sec. Litig., No. 04-CV-525 (GEB),

2007 U.S. Dist. LEXIS 87428 (D.N.J. Nov. 28, 2007)....................................10, 12, 16, 17, 20

In re DVI Inc. Sec. Litig.,

249 F.R.D. 196 (E.D. Pa. 2008),

aff’d, 639 F.3d 623 (3d Cir. 2011) ...........................................................................................24

In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-cv-3400 (CM) (PED),

2010 WL 4537550 (S.D.N.Y. Nov. 8, 2010) ...........................................................................29

In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig.,

55 F.3d 768 (3d Cir. 1995).........................................................................................................5

In re Genta Sec. Litig., No. 04-2123 (JAG),

2008 U.S. Dist. LEXIS 41658 (D.N.J. May 27, 2008) ................................................10, 12, 16


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In re Gulf Oil/Cities Serv. Tender Offer Litig.,

142 F.R.D. 588 (S.D.N.Y. 1992) .............................................................................................20

In re Ikon Office Sols., Inc. Sec. Litig.,

194 F.R.D. 166 (E.D. Pa. 2000) .....................................................................................9, 29, 30

In re IMAX Sec. Litig.,

283 F.R.D. 178 (S.D.N.Y. 2012) .............................................................................................29

In re Ins. Brokerage Antitrust Litig.,

282 F.R.D. 92 (D.N.J. 2012) ......................................................................................................5

In re Ins. Brokerage Antitrust Litig.,

297 F.R.D. 136 (D.N.J. 2013) ..................................................................................................13

In re Interpublic Sec. Litig., No. 02 Civ. 6527 (DLC),

2004 WL 2397190 (S.D.N.Y. Oct. 26, 2004) ..........................................................................20

In re Johnson & Johnson Derivative Litig.,

900 F. Supp. 2d 467 (D.N.J. 2012) ....................................................................................14, 15

In re Mego Fin. Corp. Sec. Litig.,

213 F.3d 454 (9th Cir. 2000) .............................................................................................14, 20

In re Merck & Co. Vytorin Erisa Litig., No. 08-CV-285 (DMC),

2010 WL 547613 (D.N.J. Feb. 9, 2010) ..................................................................................29

In re Merrill Lynch & Co. Research Reports Sec. Litig., No 02 MDL 1484 (JFK),

2007 WL 313474 (S.D.N.Y. Feb. 1, 2007) ..............................................................................20

In re NFL Players Concussion Injury Litig.,

821 F.3d 410 (3d Cir. 2016).............................................................................14, 15, 23, 24, 25

In re Ocean Power Techs., Inc. Sec. Litig., No. 3:14-CV-3799,

2016 U.S. Dist. LEXIS 158222 (D.N.J. Nov. 15, 2016)............................................................7

In re Online DVD-Rental Antitrust Litig.,

779 F.3d 934 (9th Cir. 2015) ...................................................................................................21

In re Orthopedic Bone Screw Prods. Liab. Litig.,

176 F.R.D. 158 (E.D. Pa. 1997) ...............................................................................................13

In re PAR Pharm. Sec. Litig., No. 06-3226 (ES),

2013 U.S. Dist. LEXIS 106150 (D.N.J. July 29, 2013) .........................................12, 16, 18, 20

In re Priceline.com Inc. Sec. Litig.,

236 F.R.D. 89 (D. Conn. 2006)................................................................................................25


v

In re Priceline.com, Inc. Sec. Litig., No. 3:00-cv-1884 (AVC),

2007 WL 2115592 (D. Conn. July 20, 2007) ..........................................................................18

In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,

148 F.3d 283 (3d Cir. 1998)...............................................................................................21, 22

In re Remeron End-Payor Antitrust Litig., Nos. 02-2007 (FSH), 04-5126 (FSH),

2005 U.S. Dist. LEXIS 27011 (D.N.J. Sept. 13, 2005) .........................................................6, 7

In re Rent-Way Sec. Litig.,

305 F. Supp. 2d 491 (W.D. Pa. 2003) ..................................................................................7, 17

In re Rite Aid Corp. Sec. Litig.,

146 F. Supp. 2d 706 (E.D. Pa. 2001) .......................................................................................20

In re Royal Dutch/Shell Transp. Sec. Litig., No. 04-374 (JAP),

2008 U.S. Dist. LEXIS 124269 (D.N.J. Dec. 8, 2008) ............................................................29

In re Sturm, Ruger, & Co. Sec. Litig., No. 09-cv-1293 (VLB),

2012 WL 3589610 (D. Conn. Aug. 20, 2012) ...................................................................17, 25

In re TD Ameritrade Account Holder Litig., No. C 07-2852 SBA,

2011 WL 4079226 (N.D. Cal. Sept. 13, 2011) ........................................................................14

In re ViroPharma Inc. Sec. Litig., No. 12-2714,

2016 U.S. Dist. LEXIS 8626 (E.D. Pa. Jan. 25, 2016) ..............................................................9

In re Warfarin Sodium Antitrust Litig.,

391 F.3d 516 (3d Cir. 2004).............................................................................................5, 7, 10

La. Mun. Police Emps. Ret. Sys. v. Sealed Air Corp., No. 03-cv-4372 (DMC),

2009 WL 4730185 (D.N.J. Dec. 4, 2009) ................................................................................20

Li v. Aeterna Zentaris, Inc.,

324 F.R.D. 331 (D.N.J. 2018) ............................................................................................24, 25

Linney v. Cellular Alaska P’ship,

151 F.3d 1234 (9th Cir. 1998) .................................................................................................14

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

259 F.3d 154 (3d Cir. 2001).....................................................................................................24

Police & Fire Ret. Sys. of City of Detroit v. Safenet, Inc.,

645 F. Supp. 2d 210 (S.D.N.Y. 2009)......................................................................................15

Pro v. Hertz Equip. Rental Corp., No. 06-3830 (DMC),

2013 U.S. Dist. LEXIS 86995 (D.N.J. June 20, 2013) ............................................................18


vi

Robbins v. Koger Props., Inc.,

116 F.3d 1441 (11th Cir. 1997) ...............................................................................................12

Sala v. Nat’l R.R. Passenger Corp.,

721 F. Supp. 80 (E.D. Pa. 1989) ..............................................................................................12

Schuler v. Meds. Co., No. 14-1149 (CCC),

2016 U.S. Dist. LEXIS 82344 (D.N.J. June 24, 2016) ......................................................14, 15

Serio v. Wachovia Sec., LLC,

No. 06-4681 (MF), 2009 U.S. Dist. LEXIS 27992 (D.N.J. Mar. 31, 2009) ......................13, 16

Shapiro v. All. MMA, Inc., No. 17-2583,

2018 U.S. Dist. LEXIS 108132 (D.N.J. June 28, 2018) ..........................................................26

Stewart v. Abraham,

275 F.3d 220 (3d Cir. 2001).....................................................................................................23

Stoetzner v. U.S. Steel Corp.,

897 F.2d 115 (3d Cir. 1990).....................................................................................................13

UFCW Local 1776 v. Eli Lilly & Co.,

620 F.3d 121 (2d Cir. 2010).....................................................................................................25

Varacallo v. Mass. Mut. Life Ins. Co.,

226 F.R.D. 207 (D.N.J. 2005) ....................................................................................................7

Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) .................................................................................................................17

Wal-Mart Stores, Inc. v. Visa U.S.A. Inc.,

396 F.3d 96 (2d Cir. 2005).......................................................................................................27

Weiss v. Mercedes-Benz of N. Am.,

899 F. Supp. 1297 (D.N.J. 1995),

aff’d, 66 F.3d 314 (3d Cir. 1995) .........................................................................................6, 15

Yedlowski v. Roka Bioscience, Inc., No. 14-CV-8020-FLW-TJB,

2016 U.S. Dist. LEXIS 155951 (D.N.J. Nov. 10, 2016)....................................................14, 15

Statutes

15 U.S.C. §78u ...........................................................................................................................4, 27

Rules

Fed. R. Civ. P. 9 ...................................................................................................................2, 10, 15

Fed. R. Civ. P. 23 .............................................................1, 2, 16, 17, 20, 21, 22, 23, 25, 26, 27, 28


vii

Fed. R. Civ. P. 26 .........................................................................................................................4, 8

Other Authorities

Alba Conte & Herbert B. Newberg, Newberg on Class Actions §11.45 (4th ed. 2002) ................14

Cornerstone Research, Securities Class Action Settlements – 2018 Review and

Analysis (2019) ..............................................................................................................................19

NERA Economic Consulting, Recent Trends in Securities Class Action Litigation:

2018 Full-Year Review (Jan. 29, 2019) .........................................................................................19

William Rubenstein, Alba Conte, & Herbert B. Newberg,

Newberg on Class Actions § 13.44 (5th ed. 2014) ...........................................................................6


1

Pursuant to Fed. R. Civ. P. 23, Lead Plaintiff Ethan Silverman and Plaintiff Mark

Blumenthal (“Plaintiffs”), by and through their Counsel, Pomerantz LLP (“Pomerantz” or “Lead

Counsel”), respectfully submit this Memorandum of Law in Support of their Motion for Final

approval of Settlement with Toronto-Dominion Bank (“TD”) Bharat B. Masrani (“Masrani”),

Riaz E. Ahmed (“Ahmed”), Colleen Johnston (“Johnston”), Teri Currie (“Currie”), Leo Salom

(“Salom”), Mike Pedersen (“Pedersen”), and Mark Chauvin (“Chauvin”) (collectively,

“Defendants”), certification of the Settlement Class1, and approval of the Plan of Allocation.

I. INTRODUCTION

Subject to this Court’s approval, Plaintiffs, on behalf of the Settlement Class, have agreed

to settle all claims in this Action against the Defendants in exchange for a cash payment of

thirteen million two hundred fifty thousand dollars ($13,250,000.00). The relief requested in this

motion is appropriate. First, the $13,250,000.00 Settlement is an excellent result for the

Settlement Class and achieves a result that is more than “fair, reasonable, and adequate” to the

class, and not a product of collusion. Haas v. Burlington Cty., No. 08-1102 (NLH/JS), 2019 U.S.

Dist. LEXIS 16071, at *19-20 (D.N.J. Jan. 31, 2019) (citing Fed. R. Civ. P. 23(e)). Moreover, it

is substantively fair under the factors articulated in Girsh v. Jepson, 521 F.2d 153, 156-57 (3d

Cir. 1975) (citations omitted). Plaintiffs estimate that the proposed Settlement provides the

Settlement Class with a range of 9.7% - 12.5% of the likely recoverable damages, which is more

than three to four times that of the median settlements for similar securities class actions. The

Settlement’s merit is further demonstrated by the fact that to date, there has not been a single

objection and only four requests for exclusion – two of which are nevertheless deficient because

1 Unless otherwise stated, all capitalized terms used herein have the same definitions as

assigned in the Stipulation of Settlement, dated June 20, 2019 (Dkt. No. 109-9) (“Stipulation”).


2

the number of shares was not identified, and, additionally, with respect to one, because the

purchase of shares occurred in the 1990s. The Settlement is entitled to a strong initial

presumption of fairness because it resulted from arm’s length negotiations between highly-

experienced counsel, after roughly two-and-a-half years of highly-contested litigation – entailing

150+ pages of dispositive motion briefing, nearly fifty pages of mediation statements, and nearly

thirty pages of class certification briefing – and was facilitated by a highly experienced mediator.

Furthermore, this substantial and certain recovery compares favorably against the

significant complexity, delay, expense, and uncertainty of potential litigation through trial and

appeals. Beyond the heightened risk from the application of both Rule 9(b) and the Private

Securities Litigation Reform Act of 1995’s (“PSLRA”) amendments to the Exchange Act of

1934 (“Exchange Act”), Plaintiffs would have to establish falsity, materiality, and scienter to a

jury’s satisfaction – a notoriously difficult and risky task. Plaintiffs would also encounter loss-

causation, damages, and fraud-on-the-market/reliance defenses at the summary-judgment phase

and trial, entailing an expensive and risky battle of experts, which could shackle Plaintiffs’

efforts to secure a recovery through years of motion, trial, and appellate practice.

Second, the proposed Settlement Class meets all of requirements of Rule 23 such that the

Court should grant certification of the Class for purposes of the Settlement, including appointing

Lead Counsel, which has diligently prosecuted this complex class action, as Class Counsel.

Third, the Plan of Allocation, distributing the Net Settlement Funds on a pro rata basis, is

a fair, reasonable, and rational method and also warrants approval.

II. SUMMARY OF THE LITIGATION AND PROCEDURAL HISTORY

This is a federal securities class action alleging violations of Sections 10(b) and 20(a) of

the Exchange Act and Rule 10b-5 promulgated thereunder against the Defendants. Plaintiffs

allege that during the Class Period, Defendants made material misrepresentations and omissions


3

concerning: (1) TD’s risk management and internal controls; (2) TD’s business operations; and

(3) TD’s reported results. Plaintiffs allege that the misstatements and omissions caused TD

securities to trade at inflated levels during the Settlement Class Period. Plaintiffs further allege

that the revelation of Defendants’ fraud caused a statistically significant stock decline, thereby

injuring Plaintiffs and the Settlement Class members. Defendants deny any and all liability for

the alleged federal-securities-law violations.

This Action commenced with a complaint filed on March 12, 2017, in this Court, styled

Durigon v. Toronto-Dominion Bank, et al, No. 17-cv-01665 (D.N.J.) (Dkt. No. 1) against TD,

Masrani, Johnston, and Ahmed. On March 15, 2017, Janet Tucci filed a related class action

complaint styled Tucci v. Toronto-Dominion Bank, et al., No. 17-cv-01735 (D.N.J.) against the

same Defendants, asserting claims under the Exchange Act. By Order dated December 13, 2017

(Dkt. No. 34), the Court granted Ethan Silverman’s motion for consolidation and appointment as

Lead Plaintiff, and by Order dated December 21, 2017 (Dkt. No. 37), Pomerantz LLP was

appointed Lead Counsel and Lite DePalma Greenberg, LLC was appointed Liaison Counsel.

On March 5, 2018, Plaintiffs filed the First Amended Complaint (“FAC”) against all

Defendants (Dkt. No. 43), which Defendants moved to dismiss on April 16, 2018. (Dkt. No. 46).

On June 18, 2018, Plaintiffs filed their opposition (Dkt. No. 49) and on July 16, 2018,

Defendants filed a reply. (Dkt. No. 53.) On July 24, 2018, Plaintiffs filed a motion for leave to

file a sur-reply or, in the alternative, to strike an exhibit filed with Defendants’ reply brief along

with the portions of the reply relying on the exhibit. (Dkt. No. 54.) Defendants opposed the

motion on July 26, 2018 (Dkt. No. 55) and, on August 7, 2018, Plaintiffs filed a reply. (Dkt. No.

56.) On September 26, 2018, Defendants filed a letter noting supplemental authority in support

of their motion (Dkt. No. 57), and Plaintiffs filed a response on October 5, 2018. (Dkt. No. 58.)


4

On November 27, 2018, while the motion to dismiss was pending, Plaintiffs filed a motion for

partial lifting of the discovery stay imposed by Section 21(D)(b)(3) of the Exchange Act, as

amended by the PSLRA, 15 U.S.C. §78u-4(b)(3)(B), seeking production of documents provided

by TD to the Financial Consumer Agency of Canada (“FCAC”). (Dkt. No. 59.) On December 6,

2018, the Court entered an Order (Dkt. No. 66) denying, in significant part, Defendants’ motion

to dismiss the FAC (the “MTD Order”). On January 10, 2019, the Court issued an Order (Dkt.

No. 74) denying as moot the November 27, 2018 motion for partial lifting of the stay.

On January 14, 2019, Defendants filed a motion seeking to certify the Court’s December

6, 2018 Order for interlocutory appeal under 28 U.S.C. § 1292(b). (Dkt. No. 77.) On February

12, 2019, Plaintiffs filed their opposition (Dkt. No. 88) and on February 19, 2019, Defendants

filed a reply. (Dkt. No. 91.) This motion remained pending when the parties agreed to settle.

On January 11, 2019, Defendants filed their Answer to the FAC. (Dkt. No. 75.)

On January 4, 2019, the parties’ counsel held a Fed. R. Civ. P. 26(f) conference, filed an

initial joint Rule 26(f) report on February 5, 2019 (Dkt. No. 86) and a revised report on February

19, 2019. (Dkt. No. 95.) In accordance with the Rule 26(f) report, on February 14, 2019, the

parties exchanged initial disclosures and first written discovery requests, and, pursuant to

Plaintiffs’ request for documents that TD produced to the FCAC, Defendants made an initial

production of over 15,500 pages of documents, which Lead Counsel thereafter reviewed.

On May 2, 2019, Plaintiffs filed their motion for class certification (Dkt. No. 103),

supported by a memorandum of law (Dkt. No. 104), declaration (Dkt. No. 105), and the expert

report of Zachary Nye, Ph.D., which was comprised of extensive appendices and exhibits. (Dkt.

No. 105-4.) This motion remained pending when the parties agreed to settle the Action.

III. THE SETTLEMENT

On May 6, 2019, counsel for Plaintiffs and Defendants participated in a full-day


5

mediation before Professor Eric D. Green of Resolutions, LLC in Boston. (Declaration of

Matthew L. Tuccillo, Esq. (“Tuccillo Decl.”), dated September 12, 2019.) In advance, the

parties exchanged detailed confidential mediation statements with numerous exhibits, addressing

liability and damages, which were submitted to Professor Green. At the end of the mediation,

the parties reached an understanding in principle to settle. After subsequent continued

negotiations, they memorialized the Settlement in a Memorandum of Understanding (“MOU”)

dated May 10, 2019. The parties finalized and executed the Stipulation on June 20, 2019. (Dkt.

No. 109-9.) Contemporaneously, the parties also executed a supplemental agreement which the

Court required be submitted for in camera review. Plaintiffs thereafter filed a motion for

preliminary approval of settlement and accompanying documents on June 20, 2019. (Dkt. No.

109.) On July 18, 2019, the Court issued the Order Preliminarily Approving Settlement and

Providing for Notice (“Preliminary Approval Order”) (Dkt. No. 111.) The Court scheduled the

Settlement Fairness Hearing for final approval of the Settlement, attorney’s fees and expenses,

including reimbursement of Plaintiffs’ reasonable costs and expenses, and to hear any objections

by Settlement Class Members for October 3, 2019 at 3:30 p.m. Defendants have paid

$13,250,000.00 into the Escrow Account for the benefit of the Settlement Class, $300,000.00 of

which is initially earmarked for Notice and Administration Costs.

IV. THE SETTLEMENT SHOULD BE FINALLY APPROVED

The Third Circuit has noted that “there is an overriding public interest in settling class

action litigation, and it should therefore be encouraged.” In re Warfarin Sodium Antitrust Litig.,

391 F.3d 516, 535 (3d Cir. 2004). This is “particularly [so] in class actions and other complex

cases where substantial judicial resources can be conserved by avoiding formal litigation.” In re

Ins. Brokerage Antitrust Litig., 282 F.R.D. 92, 102 (D.N.J. 2012) (quoting In re Gen. Motors

Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 784 (3d Cir. 1995) (“General


6

Motors”));2 William Rubenstein, Alba Conte, & Herbert B. Newberg, 4 Newberg on Class

Actions § 13.44 (5th ed. 2014).). A court may approve a class action settlement if it is fair,

adequate, and reasonable, and not a product of collusion. See Haas, 2019 U.S. Dist. LEXIS

16071, at *11-13. In making this determination, courts in this Circuit apply the factors

articulated in Girsh: (1) the litigation’s complexity, expense, and likely duration; (2) the class’s

reaction to the settlement; (3) the stage of the proceedings and amount of discovery completed;

(4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of

maintaining the class action through trial; (7) defendants’ ability to withstand a greater judgment;

and (8) the range of reasonableness of the settlement fund in light of best possible recovery and

all attendant litigation risks. See Haas, 2019 U.S. Dist. LEXIS 16071, at *11-12 (citing Halley v.

Honeywell Int’l, Inc., 861 F.3d 481, 489 (3d Cir. 2017)). When analyzing a settlement

agreement, “a district court must give comprehensive consideration to all relevant factors and

undertake an independent evaluation.” Weiss v. Mercedes-Benz of N. Am., 899 F. Supp. 1297,

1300 (D.N.J. 1995), aff’d, 66 F.3d 314 (3d Cir. 1995); see also City of Providence v.

Aéropostale, Inc., No. 11 Civ. 7132 (CM (GWG), 2014 U.S. Dist. LEXIS 64517, at *10

(S.D.N.Y. May 9, 2014) (“[N]ot every factor must weigh in favor of settlement, rather the court

should consider the totality of these factors in light of the particular circumstances.” (alteration in

original)), aff’d sub nom. Arbuthnot v. Pierson, 607 F. App’x 73 (2d Cir. 2015). “Because a

settlement represents an exercise of judgment by the negotiating parties, cases have consistently

held that the function of a court reviewing a settlement is neither to rewrite the settlement

agreement reached by the parties nor to try the case by resolving issues left unresolved by the

settlement.” In re Remeron End-Payor Antitrust Litig., Nos. 02-2007 (FSH), 04-5126 (FSH),

2 All internal citations and quotations are omitted herein, unless stated otherwise.


7

2005 U.S. Dist. LEXIS 27011, at *46 (D.N.J. Sept. 13, 2005) (“Remeron I”) (citing Bryan v.

Pittsburgh Plate Glass Co., 494 F.2d 799, 801 (3d Cir. 1974)). The Settlement is fair, adequate,

and reasonable and satisfies the Girsh factors.

A. The Settlement Bears a Strong Initial Presumption of Fairness

“The Third Circuit affords an initial presumption of fairness for a settlement ‘if the court

finds that: (1) the negotiations occurred at arm’s length; (2) there was sufficient discovery; (3)

the proponents of the settlement are experienced in similar litigation; and (4) only a small

fraction of the class objected.’” Remeron I, 2005 U.S. Dist. LEXIS 27011, at *44 (quoting In re

Cendant Corp. Litig., 264 F.3d 201, 233 n.18 (3d Cir. 2001)). A strong initial presumption of

fairness attaches to a proposed settlement if it is reached by experienced counsel after arm’s-

length negotiations. See Warfarin, 391 F.3d at 535; Manual for Complex Litigation (Third)

§ 30.42 (1995) (stating a “presumption of fairness, adequacy, and reasonableness may attach to a

class settlement reached in arm’s-length negotiations between experienced, capable counsel after

meaningful discovery”). It is “appropriate” to give “substantial weight to the recommendations

of experienced attorneys” who have engaged in arm’s-length negotiations. In re Auto.

Refinishing Paint Antitrust Litig., MDL No. 1426, 2004 U.S. Dist. LEXIS 29161, at *7-8 (E.D.

Pa. Sept. 27, 2004); Varacallo v. Mass. Mut. Life Ins. Co., 226 F.R.D. 207, 240 (D.N.J. 2005)

(“Class Counsel’s approval of the Settlement also weighs in favor of the Settlement’s fairness.”);

In re Rent-Way Sec. Litig., 305 F. Supp. 2d 491, 509 (W.D. Pa. 2003) (same). And

“participation of an independent mediator in settlement negotiations virtually insures [sic] that

the negotiations were conducted at arm’s length and without collusion between the parties.” In

re Ocean Power Techs., Inc. Sec. Litig., No. 3:14-CV-3799, 2016 U.S. Dist. LEXIS 158222, at

*33 (D.N.J. Nov. 15, 2016) (alteration in original).


8

The Settlement was reached through arm’s-length negotiation which included a full-day

meditation before a highly experienced mediator, Professor Green. Plaintiffs had the benefit of

attorneys who are highly experienced in complex litigation and familiar with the legal and

factual issues of the case. Tuccillo Decl. ¶6-8, 17-18. The efforts of counsel secured a

Settlement that provides substantial benefits to the Settlement Class, especially considering the

expense, risks, difficulties, delays, and uncertainties of litigation, trial, and post-trial proceedings.

The parties and their counsel were eminently knowledgeable about the strengths and

weaknesses of the case prior to their agreement to settle. Lead Counsel conducted a thorough

and ongoing investigation prior to the filing of the initial complaint and the FAC. They

continued the investigation after the Court’s MTD Order, attending the Parties’ Fed. R. Civ. P.

26(f) conference, filing the 26(f) Report and Revised 26(f) Report, reviewing Defendants’

Answer to the FAC, contesting Defendants’ motion to certify the Court’s Order for interlocutory

appeal, exchanging initial disclosures and first written discovery requests with Defendants, and

reviewing over 15,500 pages of documents produced by Defendants pursuant to Plaintiffs’

request for documents TD produced to the FCAC, all of which gave Plaintiffs and Lead Counsel

an even clearer understanding of the facts and law at issue. Specifically, the investigations

included the following: (i) retention of a skilled private investigator team and interviews with

numerous former employees of TD; (ii) extensive consultation with, and analysis by, a damages

consultant; (iii) detailed reviews of TD’s public filings, annual reports, press releases, and other

publicly available information; (iv) review of analysts’ reports and other articles relating to TD;

(v) analysis of the individual Defendants’ and other insiders’ public filings regarding their Rule

10b5-1 stock trading plans and their sales of TD stock; and (vi) research of the applicable law

with respect to the claims and the potential defenses at issue. Tuccillo Decl. ¶8.


9

Moreover, the Settlement was reached after two-and-a-half years of hotly contested

litigation, entailing over 150 pages of dispositive motion briefing, nearly fifty pages of mediation

statements, and nearly thirty pages of class certification briefing. Plaintiffs and Lead Counsel

also had the benefit of seeing Defendants’ merits arguments in over eighty pages of dispositive

motion papers, gaining the Court’s valuable insights as set forth in its MTD Order and seeing

Defendants’ positions on liability, damages, loss causation, available insurance coverage, and

ability to pay through Defendants’ MTD Memo and their mediation statement.

The Settlement does not provide preferential treatment to Plaintiffs or any other

Settlement Class Member. The proposed Plan of Allocation, set forth on pages 13-15 of the

Notice posted to the Claims Administrator’s website, was developed by Plaintiffs’ damages

expert in consultation with Lead Counsel and provides a fair and reasonable method to allocate

the Net Settlement Fund among Settlement Class Members who submit valid Claim Forms. The

Net Settlement Fund will be allocated to Authorized Claimants on a pro rata basis based on the

relative size of their Recognized Claims. Tuccillo Decl. ¶15. Similar plans are routinely

approved by Third Circuit courts. See, e.g., In re Corel Corp. Sec. Litig., 293 F. Supp. 2d 484,

493-95 (E.D. Pa. 2003) (approving plan of allocation that provided for distribution of net

settlement funds on a pro rata basis); In re Ikon Office Sols., Inc. Sec. Litig., 194 F.R.D. 166,

184-85 (E.D. Pa. 2000) (plan of allocation that reimburses class members based on the type and

extent of their injuries is reasonable).

Thus, for all these reasons, the Settlement, which resulted from a thorough arm’s-length

process, enjoys a strong initial presumption of fairness. See, e.g., In re ViroPharma Inc. Sec.

Litig., No. 12-2714, 2016 U.S. Dist. LEXIS 8626, at *23-24 (E.D. Pa. Jan. 25, 2016) (granting


10

presumption of fairness to settlement where it was reached by experienced, fully-informed

counsel after arm’s length negotiations with the assistance of a mediator).3

B. The Settlement is Fair, Reasonable, and Adequate Under Girsh

1. Litigating the Securities Claims Would be Long, Complex, and Expensive

Due to the inherent complexity of securities-fraud litigation, and particularly the stringent

requirements imposed by Rule 9(b) and the PSLRA, as well as developing case law, including

the Supreme Court’s decision in Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258

(2014), a securities class action is inherently complex and lengthy to prosecute. Indeed, courts

within this District have recognized that securities class actions are notably difficult and

notoriously uncertain to litigate. See, e.g., In re Genta Sec. Litig., No. 04-2123 (JAG), 2008 U.S.

Dist. LEXIS 41658, at *10 (D.N.J. May 27, 2008) (“This [securities fraud] action involves

complex legal and factual issues, and pursuing them would be costly and expensive.”); In re

Datatec Sys. Sec. Litig., No. 04-CV-525 (GEB), 2007 U.S. Dist. LEXIS 87428, at *8-9 (D.N.J.

Nov. 28, 2007) (“[R]esolution of [accounting and damages issues] would likely require extensive

and conceptually difficult expert economic analysis. . . . Trial on [scienter and loss causation]

issues would [be] lengthy and costly to the parties.”).

Even assuming it survived Defendants’ pending interlocutory appeal motion, this Action

could have taken several more years to complete discovery, proceed through class certification,

summary judgment, and trial — all of which would be both expensive and risky. The jury would

then have had to determine, inter alia, the following: whether there were misrepresentations or

omissions; whether they were material; whether Defendants acted with scienter; whether TD

3 See also Warfarin, 391 F.3d at 535 (affirming district court’s application of presumption

of fairness because settlement resulted from arms-length negotiations between experienced

counsel after years of litigation and discovery); Cendant, 264 F.3d at 232 n.18 (same).


11

stock traded on an efficient market, entitling Plaintiffs to a presumption of reliance but

permitting Defendants’ now-inevitable rebuttal evidence on price impact under Halliburton;

whether there was artificial inflation of TD securities; and whether declines in TD securities

prices were attributable to what Plaintiffs allege were partial disclosures of information revealing

the fraud. Not only would any recovery be more uncertain, it would inevitably be delayed by

years, particularly with likely appeals.

With respect to merits discovery, the scope is quite large, as visible just from the parties’

Revised 26(f) Report and their initial disclosures served in the Action. The parties would have

had to incur substantial costs and engage in prolonged litigation through summary judgment,

trial, and also likely appeals. Discovery costs (including document production and hosting fees)

and expert costs (including fees for expert reports and expert testimony regarding market

efficiency, price impact, and damages) would be significant. Lead Counsel would anticipate,

given the complexities, reviewing hundreds of thousands of documents and taking a substantial

number of depositions, including those of the Defendants.

In addition to merits discovery, the parties would have had to engage in expert discovery

on questions of class certification, reliance, loss causation, and damages, amongst other topics.

The parties would present dueling experts. Even assuming a favorable trial outcome, Defendants

would likely appeal, further delaying any benefit to the Settlement Class. Moreover, even if a

larger judgment were recoverable at trial, courts recognize that delay occasioned by trial, post-

trial, and appellate processes greatly reduces the value of any award. See, e.g., In re Chambers

Dev. Sec. Litig., 912 F. Supp. 822, 837 (W.D. Pa. 1995) (approving settlement where action’s

continuation “would undoubtedly prove costly, lengthy and consume inordinate chunks of this

Court’s docket, not to mention the legal resources of a phalanx of attorneys, at great cost to their


12

clients and to the available common fund likely to be created at the end of the litigation a long

way down the road,” and “in a case of this complexity, the end of that road might be miles and

years away”). Even very large judgments recovered after lengthy litigation and trial can be

completely lost on appeal or as a result of a post-trial judgment as a matter of law.4

Thus, continued litigation presented great risk and uncertainty. Conversely, the

Settlement provides a gross recovery certain of thirteen million two hundred fifty thousand

dollars ($13,250,000.00) in cash, less the attorneys’ fees, litigation expenses, administration

costs, and Plaintiffs’ awards that the Court may approve. The substantial and certain Settlement

reached in this Action, compared against the significant complexity, delay, expense, and

uncertainty of attempting to litigate to trial, weighs heavily in favor of the Settlement. Genta,

2008 U.S. Dist. LEXIS 41658, at *10-11 (complexity, expense, and duration of litigation

supported settlement approval in securities-fraud class action, based, in part, on numerous

complex legal and factual issues, and possibility of lengthy trial, motion practice, and appellate

processes); Datatec, 2007 U.S. Dist. LEXIS 87428, at *8-9 (complexity, expense, and duration

of litigation supported by complex issues particular to securities fraud claims).

2. The Settlement Class’s Reaction Was Overwhelmingly Positive

The Settlement Class’s reaction “is especially critical to the Court's fairness analysis, as

the reaction of the class ‘is perhaps the most significant factor to be weighed in considering [the

settlement’s] adequacy.’” In re PAR Pharm. Sec. Litig., No. 06-3226 (ES), 2013 U.S. Dist.

LEXIS 106150, at *15 (D.N.J. July 29, 2013) (quoting Sala v. Nat’l R.R. Passenger Corp., 721

4 E.g., Backman v. Polaroid Corp., 910 F.2d 10,11-18 (1st Cir. 1990) (multi-million dollar judgment for plaintiffs reversed on appeal after 11 years of litigation); Anixter v. Home-Stake Prod. Co., 77 F.3d 1215, 1219, 1221-33 (10th Cir. 1996) (overturning, on the basis of 1994 Supreme Court opinion, jury verdict rendered at trial in 1988 for case filed in 1973); Robbins v. Koger Props., Inc., 116 F.3d 1441, 1443-49 (11th Cir. 1997) (reversing $81.3 million jury verdict for plaintiff after seven years of litigation).


13

F. Supp. 80, 83 (E.D. Pa. 1989)). The lack of any objections provides powerful evidence of

fairness. See, e.g., Bell Atl. Corp. v. Bolger, 2 F.3d 1304, 1313-14 (3d Cir. 1993); Stoetzner v.

U.S. Steel Corp., 897 F.2d 115, 118-19 (3d Cir. 1990) (holding that the absence of, or a small

number of objections, is strong evidence that the settlement is fair and reasonable); see also In re

Orthopedic Bone Screw Prods. Liab. Litig., 176 F.R.D. 158, 185 (E.D. Pa. 1997) (holding that

“relatively low objection rate militates strongly in favor of approval of the settlement”).

The Settlement Class overwhelmingly favors the Settlement. Pursuant to the Court’s

Preliminary Approval Order, Epiq Class Action & Claims Solutions, Inc. (“Epiq”), the Claims

Administrator, caused the Notice to be mailed to 554,728 potential Settlement Class Members

and nominees thus far. (Declaration of Ed Barrero (“Barrero Decl.”), dated September 9, 2019,

¶11.) Additionally, the Publication Notice was published once over the PR Newswire to the U.S.

and Canada on August 1, 2019. (Id. ¶13.) To date, zero objections and merely four requests for

exclusion have been received (two of which are deficient), against 10,651 Proofs of Claim forms

thus far submitted by potential Settlement Class Members. (Id. ¶¶18-20.) The Settlement

Class’s favorable reaction supports approving the Settlement. See Bell Atl. Corp., 2 F.3d at

1313-14 (“Less than 30 of approximately 1.1 million shareholders objected. This is an

infinitesimal number. . . . This small proportion of objectors does not favor derailing

settlement.”); Stoetzner, 897 F.2d at 118-19 (finding “only” twenty-nine objections in 281

member class “strongly favors settlement”); In re Ins. Brokerage Antitrust Litig., 297 F.R.D.

136, 145 (D.N.J. 2013) (“dearth of objections by Class Members to the Settlement weighs in

favor of approval”); Serio v. Wachovia Sec., LLC, No. 06-4681 (MF), 2009 U.S. Dist. LEXIS

27992, at *19 (D.N.J. Mar. 31, 2009) (“[t]he low percentage of objections is evidence, in and of

itself, that the Settlement should be approved because the class believes the settlement is fair”).


14

3. Plaintiffs Had Sufficient Command of the Case’s Merits to Enter the Settlement

“There is no precise formula for what constitutes sufficient evidence to enable the court

to analyze intelligently the contested questions of fact. It is clear that the court need not possess

evidence to decide the merits of the issue, because the compromise is proposed in order to avoid

further litigation . . . . [T]he court must possess sufficient information to raise its decision above

mere conjecture.” Alba Conte & Herbert B. Newberg, Newberg on Class Actions §11.45, at 127,

128 (4th ed. 2002). As a result, courts regularly approve settlements reached relatively early in

the formal litigation process. Yedlowski v. Roka Bioscience, Inc., No. 14-CV-8020-FLW-TJB,

2016 U.S. Dist. LEXIS 155951, at *38-39 (D.N.J. Nov. 10, 2016) (“‘Even settlements reached at

a very early stage and prior to formal discovery are appropriate where there is no evidence of

collusion and the settlement represents substantial concessions by both parties’” (quoting In re

Johnson & Johnson Derivative Litig., 900 F. Supp. 2d 467, 482 (D.N.J. 2012))); accord, e.g., In

re NFL Players Concussion Injury Litig., 821 F.3d 410, 436-37 (3d Cir. 2016) (“To the extent

objectors ask us to require formal discovery before presuming that a settlement is fair, we decline

the invitation. In some cases, informal discovery will be enough for class counsel to assess the

value of the class’ claims and negotiate a settlement that provides fair compensation.”); Schuler

v. Meds. Co., No. 14-1149 (CCC), 2016 U.S. Dist. LEXIS 82344, at *18-20 (D.N.J. June 24,

2016) (approving pre-discovery settlement in light of counsel’s investigation).5

For this reason, courts have commended lead counsel for recognizing when — as is the

5 See also, e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (class

counsel’s investigation and research supported settlement approval absent extensive discovery);

Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998) (“In the context of class

action settlements, formal discovery is not a necessary ticket to the bargaining table where the

parties have sufficient information to make an informed decision about settlement.”); In re TD

Ameritrade Account Holder Litig., No. C 07-2852 SBA, 2011 WL 4079226, at *6 (N.D. Cal.

Sept. 13, 2011) (settlement approved before significant discovery after motion to dismiss filed).


15

case here — a prompt resolution is in the best interest of the class. See, e.g., NFL Players, 821

F.3d at 436-37; Yedlowski, 2016 U.S. Dist. LEXIS 155951, at *39-40; Schuler, 2016 U.S. Dist.

LEXIS 82344, at *18-20; Johnson & Johnson, 900 F. Supp. 2d at 482-83. As noted above in

Section IV. A., even absent formal discovery, the parties and their counsel possessed sufficient

information to assess the claims’ merits and enter the Settlement.

4. There Were Substantial Risks of Establishing Liability and Damages

The risks of establishing liability and damages should be balanced against the benefits

afforded to the Settlement Class from the immediacy and certainty of a substantial recovery.

NFL Players, 821 F.3d at 439. To establish damages, Plaintiffs must prove both: (i) “transaction

causation” under the fraud-on-the-market theory, which requires that “the price of a publicly

traded share reflects a material misrepresentation,” and (ii) “loss causation,” which requires “a

causal connection between the material misrepresentation and the loss.” Dura Pharm, Inc. v.

Broudo, 544 U.S. 336, 341-42 (2005).

In addition to the heightened risk from the application of both Rule 9(b) and the PSLRA,

Plaintiffs would have to establish falsity, materiality, and scienter to a jury’s satisfaction, which

is notoriously difficult and risky. See Weiss, 899 F. Supp. at 1301; In re Am. Bank Note

Holographics, Inc., Sec. Litig., 127 F. Supp. 2d 418, 426 (S.D.N.Y. 2001). Additionally,

Defendants’ loss causation defenses at summary judgment and trial would have required

Plaintiffs to disaggregate the portion of the alleged stock drops that arose from the disclosure that

corrected the alleged fraud from those that pertained to other information disclosed on the same

dates. See, e.g., Police & Fire Ret. Sys. of City of Detroit v. Safenet, Inc., 645 F. Supp. 2d 210,

228-29 (S.D.N.Y. 2009) (dismissing claims based on stock drop following press release where

the complaint failed to “explain why the disclosure on page eight—as opposed to all the other

information in the extended 12-page press release—caused the price decline”).


16

These daunting risks of establishing liability and damages favor final approval, and the

inevitable battle of the experts alone poses significant risk, especially in the context of jury

deliberation. See, e.g., PAR, 2013 U.S. Dist. LEXIS 106150, at *20 (citing Cendant, 264 F.3d at

239); Serio, 2009 U.S. Dist. LEXIS 27992, at *26-27; Genta, 2008 U.S. Dist. LEXIS 41658, at

*22-23 (finding risks of proving liability and damages supported settlement, where to have

prevailed on securities claims, plaintiffs must have demonstrated that their injuries were caused

by defendants’ material misstatements made with scienter); Datatec, 2007 U.S. Dist. LEXIS

87428, at *10 (finding “formidable” risks of proving liability and damages supported settlement,

where plaintiffs faced challenges to their securities claims about whether there was scienter and

loss causation, which would have entailed a battle of the experts).

The inevitable battle of the experts alone poses significant risk, especially in the context

of jury deliberation. PAR, 2013 U.S. Dist. LEXIS 106150, at *20 (“Courts in this district have

recognized that competing expert testimony presents significant risks to Lead Plaintiff's success

in establishing damages.” (citing Cendant, 264 F.3d at 239 (same)); Serio, 2009 U.S. Dist.

LEXIS 27992, at *27 (finding “divergent expert testimony leads inevitably to a ‘battle of the

experts’”); Datatec, 2007 U.S. Dist. LEXIS 87428, at *10-11 (finding scienter and loss causation

issues would have entailed a battle of the experts, weighing in favor of settlement approval).

5. There Were Substantial Risks of Achieving and Maintaining Class Certification

The Settlement Class has been preliminarily certified solely for settlement purposes. If

the Settlement fell apart, Defendants would contest any renewed class certification motion, and if

a class is certified, they would surely seek every opportunity to have the class de-certified.

Plaintiffs would face the risk of Defendants’ arguments regarding potential factual dissimilarities

of claims asserted by Plaintiffs and Settlement Class Members. Additionally, to be entitled to

class certification, Plaintiffs must satisfy Rule 23(b)’s predominance requirement. Plaintiffs


17

would likely rely on either: (i) the fraud-on-the-market reliance presumption articulated by the

Supreme Court in Basic Inc. v. Levinson, 485 U.S. 224, 241-47 (1988), and thus the need to

establish that Defendants’ rebuttal price-impact evidence under Halliburton, 573 U.S. 258. 2398,

is unpersuasive, or (ii) the reliance presumption articulated by the Supreme Court in Affiliated

Ute Citizens of Utah v. United States, 406 U.S. 128, 153-54 (1972). Either option would entail a

battle of competing experts. While certification of securities class actions remains the norm, it is

by no means automatic. Without the Settlement, assuming the evolving law does not change

further, the Settlement Class risked that certification would not be granted. See Datatec, 2007

U.S. Dist. LEXIS 87428, at *11; Rent-Way, 305 F. Supp. 2d at 506-07; see also In re Sturm,

Ruger, & Co. Sec. Litig., No. 09-cv-1293 (VLB), 2012 WL 3589610, at *6 (D. Conn. Aug. 20,

2012) (risks of maintaining class certification through trial supported settlement: “[A] contested

class certification motion would likely require extensive discovery and briefing. If the Court

were to grant class certification, Defendants might seek to file an appeal under [Rule] 23(f), the

resolution of which would require an additional round of briefing. Settlement eliminates the risk,

expense, and delay inherent in the litigation process.”).

Moreover, even if a class were certified over Defendants’ objections, it would face

multiple risks in proving the class-wide nature of Defendants’ securities-laws violations at trial.

Indeed, were a class to be certified, the Defendants could petition for immediate interlocutory

appeal pursuant to Rule 23(f), and a class certification order may be “altered or amended before

final judgment” under Rule 23(c). Thus, maintaining certification is an expensive and risky

enterprise. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 347-66 (2011) (reversing

certification order that was obtained in 2004 and affirmed by a Ninth Circuit panel in 2007 and

en banc in 2009); Rent-Way, 305 F. Supp. 2d at 506-07 (finding that there was a risk of


18

maintaining class certification through trial, although the court had already certified the class,

since the prospects of decertification existed in light of defendants’ vigorous opposition to

plaintiffs’ class-certification motions, amongst other reasons); In re Priceline.com, Inc. Sec.

Documents

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY... · 2020. 11. 3. · Settlement Class Members, and The Toronto-Dominion Bank (“TD”), Bharat B. Masrani Case 1:17-cv-01665-NLH-JS