throbber

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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 1 of 35
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`COTCHETT, PITRE & MCCARTHY, LLP
`Anne Marie Murphy (SBN 202540)
`Mark C. Molumphy (SBN 168009)
`Tyson C. Redenbarger (SBN 294424)
`Julia Q. Peng (SBN 318396)
`San Francisco Airport Office Center
`840 Malcolm Road, Suite 200
`Burlingame, CA 94010
`Telephone: (650) 697-6000
`Facsimile: (650) 697-0577
`amurphy@cpmlegal.com
`mmolumphy@cpmlegal.com
`tredenbarger@cpmlegal.com
`jpeng@cpmlegal.com
`
`KAPLAN FOX & KILSHEIMER LLP
`Matthew B. George (SBN 239322)
`Kathleen A. Herkenhoff (SBN 168562)
`Laurence D. King (SBN 206423)
`1999 Harrison Street, Suite 1560
`Oakland, CA 94612
`Telephone: 415-772-4700
`Facsimile: 415-772-4707
`mgeorge@kaplanfox.com
`kherkenhoff@kaplanfox.com
`lking@kaplanfox.com
`
`Interim Co-Lead Counsel for Plaintiffs
`
`In Re: Robinhood Outage Litigation
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`Master File No. 3:20-cv-01626-JD
`
`CLASS ACTION
`
`PLAINTIFFS’ NOTICE OF MOTION AND
`MOTION FOR PRELIMINARY
`APPROVAL OF PROPOSED CLASS
`ACTION SETTLEMENT; MEMORADUM
`OF POINTS AND AUTHORITIES IN
`SUPPORT THEREOF
`
`Date: September 22, 2022
`Time: 10:00 a.m.
`Judge: Hon. James Donato
`Ctrm: 11, 19th Floor
`
`
`
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 2 of 35
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`(ii)
`
`NOTICE OF MOTION AND MOTION
`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
`PLEASE TAKE NOTICE that on September 22, 2022 at 10:00 a.m., or as soon thereafter
`
`as the matter may be heard, before the Honorable James Donato, United States District Judge for
`the Northern District of California, at the San Francisco Courthouse, 450 Golden Gate Avenue,
`Courtroom 11, 19th Floor, San Francisco, CA 94102, Plaintiffs will and hereby do move for an
`Order pursuant to Rule 23 of the Federal Rules of Civil Procedure (“Rule”):
`(i)
`preliminarily approving the proposed Class Action Settlement Agreement and Release
`dated August 4, 2022 (attached as Exhibit A to the Joint Declaration of Anne Marie
`Murphy and Matthew B. George in Support of Plaintiffs’ Motion for Preliminary
`Approval of Proposed Class Action Settlement (“Joint Decl.”), filed concurrently
`herewith);
`finding that, for purposes of effectuating the proposed Settlement, the prerequisites for
`class certification under Federal Rule of Civil Procedure 23(a) are likely to be found
`satisfied;
`approving the form and manner of notice to the Settlement Class;
`approving the selection of the Settlement Administrator;
`appointing Cotchett, Pitre & McCarthy (“CPM”) and Kaplan Fox & Kilsheimer LLP
`(“Kaplan Fox”) as Co-Lead Class Counsel for purposes of the settlement;
`appointing Plaintiffs Daniel Beckman, Emma Jones, Mahdi Heidari Moghadam,
`Howard Morey, Colin Prendergast, Raghu Rao, Michael Riggs, and Jason Steinberg as
`Class Representatives for purpose of the settlement; and
`(vii)
`scheduling a Fairness Hearing before the Court.
`Plaintiffs’ motion is based upon this Notice of Motion and Motion, the Memorandum of
`Points and Authorities set forth below, the Joint Declaration, the Settlement Agreement, the
`Declaration of Cameron R. Azari, Esq. on Notice Plan and Notices (“Azari Decl.”), Declaration of
`Scott Walster (“Walster Decl.”), all exhibits attached thereto, the pleadings and records on file in
`
`(iii)
`(iv)
`(v)
`
`(vi)
`
`
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 3 of 35
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`this Action, and other such matters and argument as the Court may consider at the hearing of this
`motion.
`
`1.
`2.
`
`
`
`Dated: August 5, 2022
`
`STATEMENT OF ISSUES TO BE DECIDED
`Whether the Court should grant conditional certification of the Settlement Class; and
`Whether the Court should grant preliminary approval of the Settlement.
`Respectfully submitted,
`/s/ Anne Marie Murphy
`COTCHETT, PITRE & MCCARTHY, LLP
`Anne Marie Murphy (SBN 202540)
`Mark C. Molumphy (SBN 168009)
`Tyson C. Redenbarger (SBN 294424)
`Julia Q. Peng (SBN 318396)
`San Francisco Airport Office Center
`840 Malcolm Road, Suite 200
`Burlingame, CA 94010
`Telephone: (650) 697-6000
`Facsimile: (650) 697-0577
`amurphy@cpmlegal.com
`mmolumphy@cpmlegal.com
`tredenbarger@cpmlegal.com
`jpeng@cpmlegal.com
`/s/ Matthew B. George
`KAPLAN FOX & KILSHEIMER LLP
`Matthew B. George (SBN 239322)
`Kathleen A. Herkenhoff (SBN 168562)
`Laurence D. King (SBN 206423)
`1999 Harrison Street, Suite 1560
`Oakland, CA 94612
`Telephone: 415-772-4700
`Facsimile: 415-772-4707
`mgeorge@kaplanfox.com
`kherkenhoff@kaplanfox.com
`lking@kaplanfox.com
`
`Interim Co-Lead Counsel for Plaintiffs
`
`Dated: August 5, 2022
`
`
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 4 of 35
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`
`TABLE OF CONTENTS
`
` Page
`
`
`MEMORANDUM OF POINTS AND AUTHORITIES .................................................................. 1 
`I. 
`INTRODUCTION ................................................................................................................ 1 
`
`II. 
`
`BACKGROUND .................................................................................................................. 1 
`

`

`
`The Litigation and Class Counsel’s Efforts .............................................................. 1 
`
`Fact and Expert Discovery ........................................................................................ 3 
`
`PROPOSED SETTLEMENT ............................................................................................... 4 
`

`

`

`

`

`

`
`The Settlement Class and Release ............................................................................ 4 
`
`The Settlement’s Monetary Benefits ........................................................................ 5 
`
`The Settlement’s Notice Plan.................................................................................... 5 
`
`Service Awards ......................................................................................................... 6 
`
`Attorneys’ Fees and Expenses .................................................................................. 6 
`
`Settlement Administrator .......................................................................................... 6 
`
`ARGUMENT ........................................................................................................................ 7 
`
`
`III. 
`
`
`IV. 
`

`

`
`The Proposed Class Representatives Adequately Represent the Class ........ 8 
`
`The Court Should Grant Preliminary Approval of the Settlement Because It is Fair,
`Reasonable, and Adequate ........................................................................................ 7 
`
`i. 
`
`ii. 
`
`iii. 
`
`The Parties Negotiated the Settlement at Arm’s Length .............................. 8 
`
`The Advanced Stage of Litigation and Completed Discovery Support the
`Settlement ..................................................................................................... 9 
`
`Guidance 1(a) and 1(b): Differences between Class Definitions, Claims . 10 
`
`Guidance 1(c): Settlement Value v. Potential Recovery at Trial ............... 11 
`
`The Settlement Satisfies the Northern District’s Procedural Guidance for Class
`Action Settlements .................................................................................................. 10 
`
`i. 
`
`ii. 
`
`iii. 
`
`iv. 
`
`
`Guideline 1(d): Other Cases Affected by the Settlement ............................ 13 
`
`Guidance 1(e): The Proposed Plan of Allocation for the Settlement Fund 13 
`
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`
`Guidance 1(f): Estimate of Number of Claims .......................................... 15 
`
`Guidance 1(g): Reversions ......................................................................... 15 
`
`Guidance 3: Notice .................................................................................... 16 
`
`v. 
`
`vi. 
`
`vii. 
`
`viii.  Guidance 4 and 5: Requests for Exclusion and Objections ....................... 16 
`
`ix. 
`
`x. 
`
`xi. 
`
`xii. 
`
`xiii.  Guidance 11: Comparable Outcomes with Past Distributions ................... 18 
`
`Guidance 6: Attorneys’ Fees and Expenses ............................................... 16 
`
`Guidance 7: Service Awards ...................................................................... 17 
`
`Guidance 8: Cy Pres................................................................................... 18 
`
`Guidance 10: CAFA Notice ....................................................................... 18 
`

`

`

`
`The Court Should Conditionally Certify the Class for Settlement Purposes .......... 19 
`
`i. 
`
`ii. 
`
`iii. 
`
`iv. 
`
`v. 
`
`vi. 
`
`This Settlement Meets the Prerequisites of Subdivision (a) of Rule 23 ..... 20 
`
`Numerosity Rule 23(a)(1) ........................................................................... 20 
`
`Commonality............................................................................................... 20 
`
`Typicality .................................................................................................... 20 
`
`Adequacy of Representation ....................................................................... 21 
`
`This Settlement Meets the Requirements of Subdivision (b)(3)
`of Rule 23 .................................................................................................... 22 
`
`
`vii.  Common Liability Questions Predominate Over Individual Damages
`Questions..................................................................................................... 22 
`
`
`viii.  Class Action is Superior to Other Available Methods for Fairly and
`Efficiently Adjudicating the Controversy ................................................... 23 
`
`The Court Should Appoint CPM and Kaplan Fox as Co-Lead Class Counsel for
`Purposes of Settlement ............................................................................................ 23 
`
`The Court Should Appoint Plaintiffs as Class Representatives for Purposes of
`Settlement ............................................................................................................... 23
`
`PROPOSED SCHEDULE FOR PROCEEDINGS .............................................................. 24 
`
`CONCLUSION ................................................................................................................... 24 
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`V. 
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`VI. 
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 6 of 35
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`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Abante Rooter & Plumbing, Inc. v. Pivotal Payments Inc.
`2018 WL 8949777 (N.D. Cal. Oct. 15, 2018) ............................................................................ 22
`Accord Noll et al. v. eBay, Inc.
`309 F.R.D. 593 (N.D. Cal. 2015) ................................................................................................ 16
`Amchem Prods., Inc. v. Windsor
`521 U.S. 591 (1997) .................................................................................................. 19, 20, 22, 23
`Bellinghausen v. Tractor Supply Co.
`306 F.R.D. 245 (N.D. Cal. 2015) ................................................................................................ 17
`Briseno v. Henderson
`998 F.3d 1014 (9th Cir. 2021) .................................................................................................. 7, 9
`compare Roes, 1-2 v. SFBSC Mgmt., LLC
`944 F.3d 1035 (9th Cir. 2019) ....................................................................................................... 8
`Gen. Tel. Co. of Southwest v. Falcon
`457 U.S. 147 (1982) .................................................................................................................... 20
`Hampton v. Aqua Metals, Inc.
`2021 WL 4553578 (N.D. Cal. Oct. 5, 2021) .......................................................................... 7, 10
`Hanlon v. Chrysler Corp.
`150 F.3d 1011(9th Cir. 1998) ......................................................................................... 20, 21, 22
`Hanon v. Dataproducts Corp.
`976 F.2d 497 (9th Cir. 1992) ...................................................................................................... 21
`In re Anthem, Inc. Data Breach Litig.
`327 F.R.D. 299 (N.D. Cal. 2018) ................................................................................................ 22
`In re Apple Inc. Device Performance Litig.
`2021 WL 1022866 (N.D. Cal. Mar. 17, 2021) ............................................................................ 17
`In re Bluetooth Headset Prods. Liab. Litig.
`654 F.3d 935 (9th Cir. 2011) ................................................................................................ 7, 8, 9
`In re Celera Corp. Sec. Litig.
`2015 WL 7351449 (N.D. Cal. Nov. 20, 2015) ........................................................................... 19
`In re Consumer Privacy Cases
`175 Cal. App. 4th 545 (2009) ..................................................................................................... 17
`In re January 2021 Short Squeeze Trading
`2022 WL 255350 (S.D. Fla. Jan. 27, 2022) .................................................................................. 2
`
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 7 of 35
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`
`In re January 2021 Short Squeeze Trading Litigation
`2022 WL 255350 (S.D. Fla. Jan. 27, 2022) ................................................................................ 12
`In re LDK Solar Sec. Litig.
`2010 WL 3001384 (N.D. Cal. July 29, 2010) ............................................................................. 19
`In re Linkedin User Privacy Litig.
`309 F.R.D. 573 (N.D. Cal. 2015) ................................................................................................ 18
`In re Netflix Privacy Litig.
`2012 WL 2598819 (N.D. Cal. July 5, 2012) ............................................................................... 10
`In re Omnivision Techs., Inc.
`559 F. Supp. 2d 1036 (N.D. Cal. 2008) ...................................................................................... 19
`In re Online DVD-Rental Antitrust Litig.
`779 F.3d 934 (9th Cir. 2015) .................................................................................................. 7, 23
`In re Portal Software Sec. Litig.
`2007 WL 4171201 (N.D. Cal. Nov. 26, 2007) ............................................................................. 9
`In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prods. Liab. Litig.
`2016 WL 6248426 (N.D. Cal. Oct. 25, 2016) .............................................................................. 9
`In re Zynga Inc. Sec. Litig.
`2015 WL 6471171 (N.D. Cal. Oct. 27, 2015) ............................................................................ 19
`Just Film, Inc. v. Buono
`847 F.3d 1108 (9th Cir. 2017) .................................................................................................... 23
`Mazza v. Am. Honda Motor Co.,
`666 F.3d 581 (9th Cir. 2012) ...................................................................................................... 20
`Meek v. SkyWest, Inc.
`562 F. Supp. 3d 488 (N.D. Cal. 2021) ........................................................................................ 22
`Parsons v. Ryan
`754 F.3d 657 (9th Cir. 2014) ...................................................................................................... 21
`Phillips Co. v. Shutts
`472 U.S. 797 (1985) .................................................................................................................... 23
`Radcliffe v. Experian Info. Solutions, Inc.
`715 F.3d 1157 (9th Cir. 2013) .................................................................................................... 18
`Rodriguez v. Hayes
`591 F.3d 1105 (9th Cir. 2010) .................................................................................................... 20
`Rosado v. Ebay Inc.
`2016 WL 3401987 (N.D. Cal. June 21, 2016) ...................................................................... 18, 22
`Russell v. Kohl’s Dept. Stores, Inc.
`2016 WL 6694958 (C.D. Cal. Apr. 11, 2016) ............................................................................ 16
`Sandoval v. Roadlink USA Pac., Inc.
`2011 WL 5443777 (C.D. Cal. Oct. 9, 2011) ............................................................................... 20
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 8 of 35
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`
`Saucillo v. Peck
`25 F.4th 1118 (9th Cir. 2022) ....................................................................................................... 9
`Schneider v. Chipotle Mexican Grill, Inc.
`2020 WL 511953 (N.D. Cal. Jan. 31, 2020) ............................................................................... 10
`Smith v. CRST Van Expedited, Inc.
`2013 WL 163293 (S.D. Cal. Jan. 14, 2013) ................................................................................ 17
`Staton v. Boeing Co.
`327 F.3d 938 (9th Cir. 2003) ...................................................................................................... 21
`Tyson Foods, Inc. v. Bouaphakeo
`577 U.S. 442 (2016) .................................................................................................................... 22
`Vizcaino v. Microsoft Corp.
`290 F.3d 1043 (9th Cir. 2002) .................................................................................................... 17
`Wal-Mart Stores, Inc. v. Dukes
`564 U.S. 338 (2011) .................................................................................................................... 20
`Williamson v. McAfee, Inc.
`2016 WL 4524307 (N.D. Cal. Aug. 30, 2016) ........................................................................... 16
`Wolin v. Jaguar Land Rover N. Am. LLC
`617 F.3d 1168 (9th Cir. 2010) .................................................................................................... 20
`
`Statutes
`
`28 U.S.C. § 1715 ............................................................................................................................. 18
`
`Rules
`
`Fed. R. Civ. P. Rule 23 ............................................................................................................. 19, 20
`Fed. R. Civ. P. Rule 23(a) ............................................................................................................... 21
`Fed. R. Civ. P. Rule 23(b)(3) .................................................................................................... 22, 23
`Fed. R. Civ. P.Rule 23(c) ................................................................................................................ 16
`Fed. R. Civ. P. Rule 23(e)(1)(B) ..................................................................................................... 16
`Fed R. Civ. P. Rule 23(e)(2) ............................................................................................................. 7
`Fed R. Civ. P. Rule 23(a)(4) ........................................................................................................... 21
`Fed R. Civ. P. Rule 23(b)(3) ........................................................................................................... 22
`Fed R. Civ. P. Rule 23(c)(2)(B) ...................................................................................................... 16
`Fed R. Civ. P. Rule 23(e)(2)(A) ........................................................................................................ 8
`Fed R. Civ. P. Rule 23(e)(5) ........................................................................................................... 16
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 9 of 35
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`Fed. R. Civ. P. Rule 23(2)(c)(iii) .................................................................................................... 17
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 10 of 35
`
`I.
`
` MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`After two years of contentious litigation, followed by months of settlement negotiations,
`Plaintiffs request preliminary approval of a $9.9 million non-reversionary cash settlement on behalf
`of approximately 150,000 Robinhood investors who experienced losses associated with the March
`2020 Outages of Robinhood’s trading platform. The Settlement provides for direct distribution of
`payments to Settlement Class Members, without requiring claims forms. Settlement Class Members
`will be apprised of their estimated recovery from this Settlement in their individualized Long Form
`Notice.
`The Settlement is the product of well-informed, arms’-length settlement negotiations—
`between experienced counsel facilitated by an experienced mediator. It arrives at a fully informed,
`critical juncture in the litigation, after the completion of discovery and extensive motions, but before
`the Plaintiffs and Settlement Class Members must face the risks of pending class certification,
`Daubert challenges, and summary judgment proceedings. The Settlement presents a strong recovery
`and delivers tangible and immediate compensation to the Settlement Class, particularly considering
`the substantial risks protracted litigation would present. The Court should grant preliminary
`approval.
`
`II.
`
`BACKGROUND
` The Litigation and Class Counsel’s Efforts
`Between March 2 and 3, 2020, Robinhood experienced an Outage of its securities trading
`app and website that began just after Monday’s market open and extended well into Tuesday,
`rendering systems nonfunctional or inaccessible to Robinhood’s millions of customers. On March
`9, users again found themselves unable to access their accounts or transact on the markets due to an
`outage of Robinhood’s systems throughout the morning. Beginning March 5, 2020, a series of
`putative class actions were filed against Robinhood in state and federal court asserting claims arising
`from the Outages. Joint Decl. ¶¶ 4-5. Over a dozen subsequent related actions were filed in,
`removed to, or transferred to this District, and they were eventually consolidated on July 14, 2020.
`ECF No. 59.
`
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`After appointment of interim co-lead class counsel, ECF No. 65, Plaintiffs filed a
`consolidated amended complaint (“Complaint”) on August 21, 2020. ECF No. 74. On October 5,
`2020, Robinhood moved to dismiss the complaint, strike the Plaintiffs’ class allegations, and stay
`discovery. ECF Nos. 76-77. On November 5, 2020, the Court denied Robinhood’s Motion to Stay.
`At the February 18, 2021, Motion to Dismiss hearing, the Court gave its findings on the record,
`largely denying Robinhood’s Motion with the exception of dismissing Defendant Robinhood
`Markets, Inc., without prejudice. ECF No. 95. At the Court’s direction to select a mediator, the
`parties chose David Geronemus of JAMS. ECF No. 100. The parties attended a mediation with Mr.
`Geronemus on July 27, 2021, although the matter did not settle.
`On October 22, 2021, Plaintiffs filed a motion for class certification, supported by over 50
`documentary exhibits and deposition excerpts, the Declarations of Plaintiffs, and their expert reports.
`ECF No. 138-40. Robinhood opposed Plaintiffs’ Motion on December 3, 2021, and also filed a
`Daubert motion to exclude the testimony and report of Plaintiffs’ damages expert, Scott E. Walster
`of Global Economics Group. ECF Nos. 145-46. Each motion was fully briefed and heard by the
`Court in-person on February 24, 2022. At the hearing, the Court had multiple questions about
`Plaintiffs’ damages theories and requested a “hot tub” hearing featuring the parties’ respective
`economist experts that was set for June 9, 2022. ECF Nos. 161, 167-68.
`On February 18, 2022, prior to the class certification hearing, Robinhood filed a Motion for
`Summary Judgment on all of Plaintiffs’ claims, relying heavily on the terms of Robinhood’s
`Customer Agreement and a recent federal court decision in a separate multi-district litigation against
`Robinhood that dismissed those Plaintiffs’ claims in In re January 2021 Short Squeeze Trading
`Litigation, No. 21-02989-MDL, 2022 WL 255350 (S.D. Fla. Jan. 27, 2022). ECF No. 160.
`Robinhood filed a Daubert Motion to Exclude the opinions and testimony of Plaintiffs’ brokerage
`operations expert, Peter Vinella. ECF No. 159. At the class certification hearing, the Court stayed
`briefing on those Motions pending the “hot tub” hearing with the parties’ economists.
`While these Motions were pending, the parties continued efforts to resolve the matter,
`facilitated by Mr. Geronemus, over the course of many months. Joint Decl. ¶¶ 28-29. On May 10,
`2022, the parties reached a settlement in principle that was then commemorated into a written
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 12 of 35
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`memorandum of understanding and a notice of settlement was filed with the Court on May 26, 2022.
`Id. at ¶ 29. The Parties engaged in several rounds of negotiations before finalizing the terms of the
`Settlement Agreement now submitted for the Court’s approval.
` Fact and Expert Discovery
`Discovery in this case was thorough and robust. The parties engaged in extensive
`negotiations over the production of Robinhood’s documents and customer account and trading
`information. Joint Decl. ¶¶ 12-13. Robinhood produced over 50,000 documents and Plaintiffs took
`ten depositions of key Robinhood executives and engineers. Id. at ¶¶ 14-16. Given that the Outages
`prevented Robinhood’s systems from being able to receive and execute most orders, the bulk of the
`account information available included: (1) account and trading history information for the months
`preceding the Outages; and (2) some limited trade information before and during the Outages as well
`as trading activity that occurred once Robinhood’s systems were back online. In consultation with
`Plaintiffs’ damages expert, Plaintiffs negotiated a sampling protocol that eventually led to the
`production of account and trading information for approximately 40,000 Robinhood active users.
`Id. at ¶ 13.
`Robinhood took extensive discovery of the Plaintiffs, serving document requests and
`interrogatories and deposing nine of them. Id. at ¶ 18. Additionally, Robinhood requested
`inspections of Plaintiffs’ cell phones/devices that were used to access and/or trade on Robinhood’s
`app, which all Plaintiffs provided through data extractions. Id. Even with a compressed discovery
`schedule, the parties completed discovery prior to the April 7, 2021 cutoff by completing multiple
`depositions simultaneously. Id. at ¶ 19.
`The Parties exchanged initial expert reports on June 25, 2021, with Plaintiffs producing three
`experts on regulatory issues, securities brokerage operations, and Plaintiffs’ proposed damages
`models. Id. at ¶ 22. Robinhood submitted an initial expert report and then submitted three rebuttal
`reports challenging each of Plaintiffs’ experts’ opinions. The Parties engaged in expert discovery
`and deposed each expert. Id. at ¶¶ 23-24.
`
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 13 of 35
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`III.
`
`PROPOSED SETTLEMENT
` The Settlement Class and Release
`The proposed Settlement Class Members are a subset of Robinhood customers in March of
`2020 who fall within one or more of three categories and were originally proposed as the “VWAP
`Subclass,” the “SPY Option Subclass,” and the “Failed Trade Subclass” in Plaintiffs’ Class
`Certification Motion. The Class Members are identified by Plaintiffs’ damages expert based on the
`Customer Trading Information, using the “Ex Post” methodologies described in the Expert Report
`of Scott E. Walster (“Walster Report”). Walster Decl. ¶ 4. Based on the sampled data produced by
`Robinhood, Plaintiffs anticipate that there will be approximately 150,000 Settlement Class Members
`incurring approximately $20.4 million in losses under Plaintiffs’ damages methodologies. Joint
`Decl. ¶ 36; Walster Decl. ¶ 4. Given that sampling was used to determine these estimates, Plaintiffs
`submit these figures as close estimates but anticipate that the final numbers may differ. Id.
`Settlement Class Members have one or more Qualifying Trades in the following groups:
`1. VWAP Loss Trades includes any person who closed one or more position(s) on March 3,
`2020, at a loss relative to the Volume Weighted Average Price “(VWAP”) of those positions
`during the March 2 and 3, 2020 Outages.
`2. SPY Options Trades includes any person who held a SPDR S&P 500 (“SPY”) option
`position expiring on March 2, 2020, and experienced a loss relative to the VWAP of those
`options during the March 2, 2020 Outage.
`3. Failed Marketable Trades includes any person who experienced a Failed Equity Trade that
`became marketable during the March 2 and 3 Outages at a loss relative to the price at the end
`of the March 2 and 3 Outages and/or the transaction price obtained through March 4, 2020;
`or who experienced a Failed Equity Trade that became marketable during the March 9
`Outage at a loss relative to the price at the end of the March 9 Outage and/or the transaction
`price obtained through March 10, 2020.
`Joint Decl. ¶ 35; Walster Decl. ¶ 4. All Settlement Class Members will be identified through
`Robinhood’s Customer Trading Information and Settlement Payment will be determined by
`Plaintiffs’ damages expert pursuant to the Plan of Allocation. Walster Decl. ¶¶ 5-6. Importantly,
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`Case 3:20-cv-01626-JD Document 173 Filed 08/05/22 Page 14 of 35
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`Settlement Class Members will not have to file a claim to obtain their Settlement Payment. SA § 2;
`Joint Decl. ¶ 31.
` The Settlement’s Monetary Benefits
`The Settlement provides substantial monetary relief in the form of a non-reversionary $9.9
`m

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