throbber
Electronically Filed
`by Superior Court of CA,
`County of Santa Clara,
`on 9/25/2020 9:04 AM
`
`Reviewed By: R. Walker
`Case #19CV341522
`
`Envelope: 4997217
`
`19CV341522
`Santa Clara — Civil
`
`BOTTINI & BOTTINI, INC.
`Francis A. Bottini, Jr. (SBN 175783)
`Albert Y. Chang (SBN 296065)
`Anne B. Beste (SBN 326881)
`Yury A. Kolesnikov (SBN 271173)
`7817 Ivanhoe Avenue, Suite 102
`
`La J011a, California 92037
`
`(858) 914-2001
`Telephone:
`(858) 914—2002
`Facsimile:
`fbottini@bottinilaw.com
`achang@bottini1aw.com
`abeste@bottinilaw.com
`ykolesnikov@bottinilaw.com
`
`COHEN MILSTEIN SELLERS & TOLL PLLC
`
`Julie Goldsmith Reiser (pro hac vice)
`Molly Bowen (pro hac vice)
`1100 New York Avenue, N.W., Suite 500
`Washington, DC. 20005
`Telephone:
`(202) 408-4600
`Facsimile:
`(202) 408—4699
`jreiser@cohenmilstein.com
`mbowen@cohenmilstein.com
`
`Co-Lead Counselfor Plaintififs
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`IN AND FOR THE COUNTY OF SANTA CLARA
`
`
`This Document Relates To:
`
`ALL ACTIONS.
`
`IN RE ALPHABET INC. SHAREHOLDER
`DERIVATIVE LITIGATION
`
`
`
`
`Lead Case No.: 19CV341522
`
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT OF
`PLAINTIFFS’ UNOPPOSED MOTION
`FOR PRELIMINARY APPROVAL OF
`SETTLEMENT
`
`Hearing Date:
`Time:
`Judge:
`Department:
`
`October 22, 2020
`1:30 pm.
`Hon. Brian C. Walsh
`1
`
`PUBLIC REDACTS MATERIALS FROM CONDITIONALLY SEALED RECORD
`
`
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`BRIEF ISO PLS.’ MOTION FOR PRELIM. APPROVAL OF SETTLEMENT
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`Lead Case No. 19CV341522
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`

`

`W
`
`I.
`
`II.
`
`INTRODUCTION ............................................................................................................... 1
`
`BACKGROUND ................................................................................................................. 2
`
`A.
`
`B.
`
`Summary of Allegations .......................................................................................... 2
`
`Procedural History ................................................................................................... 5
`
`1.
`
`2.
`
`3.
`
`California Actions ....................................................................................... 5
`
`Federal Actions ........................................................................................... 5
`
`Delaware Action .......................................................................................... 5
`
`III.
`
`SETTLEMENT DISCUSSIONS AND TERMS ................................................................ 6
`
`A.
`
`B.
`
`Industry-Leading Commitment to Workplace Equity ............................................. 6
`
`The Attorneys’ Fees and Expense Award ............................................................... 8
`
`IV.
`
`THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED ............................. 8
`
`A.
`
`B.
`
`C.
`
`D.
`
`The Settlement Was Reached Following Extensive Arm’s-Length
`Bargaining ............................................................................................................... 9
`
`The Settlement Was Negotiated After Substantial Investigation by Counsel
`with Extensive Experience in Complex Derivative Litigation .............................. 10
`
`The Strength of Plaintiffs’ Claims Weighs in Favor of Preliminary
`Approval ................................................................................................................ l l
`
`The Risk, Expense, Complexity, and Likely Duration of the Action Weighs
`in Favor of Preliminarily Approving the Settlement ............................................. 12
`
`E.
`
`The Settlement Is in the Best Interests of Alphabet and Its Shareholders ............ 15
`
`V.
`
`THE PROPOSED NOTICE TO SHAREHOLDERS SHOULD BE APPROVED .......... 15
`
`VI.
`
`CONCLUSION ................................................................................................................. l7
`
`PROPOSED SCHEDULE OF EVENTS ...................................................................................... 20
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`CASES
`
`TABLE OF AUTHORITIES
`
`7-Eleven Owners for Fair Franchising v. Southland Corp,
`85 Cal. App. 4th 1135 (2000) ........................................................................................... 11, 15
`
`Buccellato v. AT&T Operations, Inc,
`No. C10-00463-LHK, 2011 WL 3348055 (N.D. Cal. June 30, 2011) ..................................... 8
`
`Churchill Vill, LLC v. Gen. Elec.,
`361 F.3d 566 (9th Cir. 2004) .................................................................................................. 16
`
`Cohn v. Nelson,
`375 F. Supp. 2d 844 (ED. M0. 2005) ...................................................................................... 8
`
`Dunk v. Ford Motor Co,
`48 Cal. App. 4th 1794 (1996) ............................................................................................. 9, 11
`
`Frame v. Hillman,
`N0. 01-CV-2193 H(LAB), 2002 WL 34520817 (S.D. Cal. July 31, 2002) ........................... 12
`
`In re Omnivision Techs., Inc.,
`559 F. Supp. 2d 1036 (N.D. Cal. 2008) ................................................................................. 11
`
`Litwin v. iRenew Bio Energy Solutions,
`LLC, 226 Cal. App. 4th 877 (2014) ....................................................................................... 16
`
`Luckey v. Super. Ct,
`228 Cal. App. 4th 81 (2014) ............................................................................................... 9, 12
`
`Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc.,
`221 F.R.D. 523 (CD. Cal. 2004) ........................................................................................... 11
`
`Robbins v. Alibrana’i,
`127 Cal. App. 4th 438 (2005) ................................................................................................... 9
`
`Vizcaino v. Microsoft Corp,
`290 F.3d 1043 (9th Cir. 2002) .................................................................................................. 8
`
`Wershba v. Apple Computer, Inc.,
`91 Cal. App. 4th 224 (2001) ................................................................................................... 11
`
`Zepeda v. PayPal, Inc.,
`No. C 10—2500 SBA, 2017 WL 1113293 (ND. Cal. Mar. 24, 2017) .................................... 11
`
`OTHER AUTHORITIES
`
`MANUAL FOR COMPLEX LITIGATION
`
`§ 21.632 .................................................................................................................................... 9
`§ 21.633 .................................................................................................................................... 9
`§ 21.634 .................................................................................................................................... 9
`
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`RULES
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`Cal. R. Ct. 3.769 ...................................................................................................................... 15, 16
`
`Cal. R. Ct. 3.769(1) .................................................................................................................. 15, 16
`
`DOCKETED
`
`In re McKesson Corp. Derivative Litig,
`N0. 4:17-cv-0185-CW (N.D. Cal. Apr. 22, 2020) ................................................................... 8
`
`In re Yahoo! Inc. S ’holder Litig,
`Lead Case No. 17CV307054 (Cal. Super. CL, Cty. of Santa Clara Jan. 9, 2019) ............. 8, 17
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`l
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`I.
`
`INTRODUCTION
`
`Co-Lead Plaintiffs Northern California Pipe Trades Pension Plan (“NCPTPP”), Teamsters
`
`Local 272 Labor Management Pension Fund (“Local 272”), and James Martin (“Plaintiffs”) move
`
`for preliminary approval of the proposed settlement (“Settlement”) as set forth in the Stipulation
`
`and Agreement of Settlement dated August 20, 2020 (“Stipulation”).1 The Settlement resolves the
`
`claims brought in this shareholder derivative action (“California Action”) on behalf of Alphabet
`
`Inc. (“Alphabet” or the “Company”) and against certain current and former officers and directors
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`of the Company (“Individual Defendants”). It also resolves substantially similar derivative actions
`
`pending in the US. District Court for the Northern District of California (“Federal Action”) and
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`Delaware Court of Chancery (“Delaware Action”) (collectively, the “Litigations”), as well as
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`certain litigation demands (“Demands”) (together with the Litigations, the “Settled Matters”).
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`The Settlement is an excellent result for Alphabet and its current shareholders, avoids
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`further lengthy and costly litigation, and mitigates the risk and expense of proceeding in multiple
`
`fora.
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`It is the product of extensive arm’s-length negotiations between the Settling Parties with the
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`assistance of mediator, the Hon. James P. Kleinberg (Ret.). As detailed below, the Settlement is
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`unquestionably fair, reasonable, and adequate, and warrants preliminary approval.
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`Through the Settlement, Alphabet has agreed to implement holistic workplace reforms,
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`including governance reforms to the Company’s Board of Directors (“Board”). These Workplace
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`Measures and Corporate Governance reforms address and are designed to prevent sexual
`
`harassment, sexual misconduct, discrimination, and retaliation. Further, Alphabet will establish
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`and maintain for at least five years a Diversity, Equity, and Inclusion Advisory Council (“DEI
`
`Advisory Council”), which will be responsible for overseeing the creation, implementation, and
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`ongoing operation of the initiatives that support diversity, equity, and inclusion described in
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`paragraph 1.2 of the Stipulation, and whose membership will consist of both external experts and
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`internal members, including, in its first year, Alphabet’s CEO (Sundar Pichai). Alphabet will also
`
`The Stipulation is attached as Exhibit 1 to the Joint Declaration of Francis A. Bottini, Jr. and
`1
`Julie Goldsmith Reiser (“Joint Declaration” or “JD”), filed concurrently herewith. Unless
`otherwise noted, all capitalized terms have the same meaning as defined in the Stipulation, all
`internal citations and quotation marks have been omitted, and all emphasis has been added.
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`fund a $310 million commitment to workplace initiatives and programs (“Workplace Initiative”)
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`spanning 10 years
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`focusing on (1) expanding the pool of historically underrepresented
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`technologists;
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`(2) hiring, progression, and retention of historically underrepresented talent at
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`Alphabet and, in particular, Google; (3) fostering respectful, equitable, and inclusive workplace
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`cultures; and (4) helping historically underrepresented groups and individuals succeed with their
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`businesses and in the digital economy and tech industry.
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`The Settlement is an excellent resolution of the multi-jurisdictional stockholder litigation
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`on behalf of Alphabet, particularly because it includes specific reforms designed to increase
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`transparency surrounding claims of sexual misconduct and the consequences when such
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`misconduct occurs, thereby reducing the likelihood that the Company will face these types of
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`breach-of-fiduciary-duty claims in the future. Accordingly, Plaintiffs, on behalf of the Settling
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`Parties, respectfully request
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`that
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`the Court (1) grant preliminary approval of the proposed
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`Settlement as within the range of what is fair, reasonable, and adequate, (2) approve the form of
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`notice to Alphabet’s current shareholders, and (3) schedule a Settlement Hearing at which the Court
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`will consider final approval of the Settlement, the application for an award of attorneys’ fees and
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`expenses, and entry of a final judgment.
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`II.
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`BACKGROUND
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`A.
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`Summary of Allegations
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`Plaintiffs allege that Alphabet is a male-dominated company with a male-dominated culture,
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`like the tech industry at large.
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`1] 7.2 According to numerous critics, the gender imbalance in the
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`tech industry is not just the result of a “pipeline” problem; rather, persistent sexism and
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`discrimination have kept women out, held them back, and, ultimately, forced them to leave the
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`industry altogether. Id. Alphabet’s leadership in the tech industry also has regrettably included a
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`leadership culture that limited opportunities for women.
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`1i 8. Complaints about the Company
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`demonstrate that, for years, management fostered a “brogrammer” culture, where women were
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`sexually harassed and valued less than their male counterparts.
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`1W 8, 169—171. Reports indicate
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`2 All “11 _” references are to Plaintiffs’ August 16, 2019 Consolidated Stockholder Derivative
`Complaint.
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`that
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`the Company’s procedures for investigating complaints about sexual harassment and
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`discrimination were grossly inadequate if higher level executives were implicated.
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`1111 8, 174—177.
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`And Alphabet’s former policy of forcing sexual harassment claims into arbitration helped to keep
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`formal challenges to those policies out of the public eye.
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`11 8.
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`Touting its mottos of “Don’t Be Evil” and “Do the Right Thing,” Google frequently states
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`that the Board is held to the highest level of ethics.
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`1111 9; 100—102. Plaintiffs allege, however, that
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`in practice, under the Individual Defendants’
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`leadership, Alphabet employed a dual and
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`contradictory standard. For low-level employees, Google acted decisively, firing for cause and
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`without payouts.
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`11 10. But when faced with allegations about a high-level male executive
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`responsible for generating millions of dollars in revenue, Google looked the other way (111 113,
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`118—119, 122) or, if that failed, allowed the male executive to quietly resign with severance
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`packages exceeding tens of millions of dollars (1111 129—130, 151—153). Through this double
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`standard, Alphabet and the Board maintained superficial compliance with Alphabet’s code of
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`conduct, internal rules, and laws regarding sexual harassment.
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`11 10. By appearing to take swift
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`action against low—level employees, the Board hoped to avoid a much bigger scandal.
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`1111 10, 105.
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`This toxic culture was exposed by an October 25, 2018 article in The New York Times,
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`which revealed that certain of the Company’s officers and directors knew that senior Google
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`executives had been credibly accused of sexual harassment and that
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`internal
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`investigations
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`substantiated the accusations.
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`1111 14, 107; see also 1111 112—114, 117, 121, 127, 148—149, 158—160,
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`165. Despite this misconduct, the Individual Defendants awarded lucrative exit packages to
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`Defendant Andrew E. Rubin (the creator of Android mobile software), who received $90 million,
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`and Defendant Amit Singhal (another senior executive), who received $15 million, and concealed
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`their harassment.
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`1111 128—130, 140—147, 150—153. No mention was made about the true reason for
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`Rubin’s “resignation”—his egregious sexual harassment while at Google. 111 131, 138. Worse yet,
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`after Rubin left, Google invested millions of dollars in his next venture.
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`11 132. Similarly, Singhal
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`was allowed to quietly resign rather than be fired for cause.
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`11 155. Unaware of the real reason for
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`Singhal s
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`resignation,” Uber then hired him. 111 156—157. In February 2017, when the true reasons
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`for Singhal’s departure from Google were revealed, he resigned from Uber. Id.
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`Plaintiffs allege that Defendant David C. Drummond, Alphabet’s Chief Legal Officer,
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`began an extramarital affair with at least one woman whom he supervised (there have been rumors
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`of additional affairs), all the while violating the Company’s policies requiring that executives report
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`romantic relationships with other employees.
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`1111 112—114. Amidst public scrutiny, and during the
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`pendency of this litigation, Drummond “retired” in January 2020, after being allowed to sell $222
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`million of Google stock in the three preceding months while under investigation for sexual
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`harassment.
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`Alphabet has also struggled with other indicators of sex discrimination in its workplace. A
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`class action filed in San Francisco Superior Court on behalf of female Google employees employed
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`in California, where the Company has its headquarters, asserts that the Company persistently
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`discriminates against women by, among other things, assigning them to jobs in lower compensation
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`“bands” than similarly situated men, promoting women more slowly and at lower rates than
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`similarly situated men, and simply paying women less.
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`1111 12, 178—180. On March 27, 2018, the
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`Court found that the plaintiffs alleged sufficient facts to state a claim for intentional discrimination.
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`The practices described above—which epitomize the Company’s cultural complacency
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`concerning credible accounts of unlawful sex-discrimination—prompted immediate employee
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`outrage. Alphabet, however, failed to act promptly to respond to employees’ concerns. Alphabet
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`management’s “dismissive” response sparked a historic reaction—on November 1, 2018, 20,000
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`Alphabet employees around the globe staged a “Google Walkout” to protest the events described
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`in The New York Times article as well as the Company’s generally inadequate approach to sexual
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`harassment and discrimination in its workforce.
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`1111 15, 192—199.
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`Following the Walkout and under the pressure of significant public backlash and the filing
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`of the derivative lawsuits, a few changes occurred at the Company: Chief Legal Officer Drummond
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`resigned; and Defendant Eric Schmidt—whose open affairs and flouting of Company policies set
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`the tone for Google’s executives—left the Board. Additionally, Alphabet has refreshed its Board,
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`adding Robin L. Washington, an African American woman and preeminent business executive, and
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`Frances Arnold, the first American woman to win the Nobel Prize in chemistry.
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`1
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`These belated actions, however, failed to remedy Google’s systemic, cultural problems,
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`including pay inequity and discrimination that officers and directors long permitted to fester.
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`Underscoring the inadequacy of the Company’s response, several organizers of the Walkout
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`claimed they faced retaliation as a result of their participation in the event, prompting over a
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`thousand Alphabet employees to hold a “sit in” protest in mid-2019.
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`111] 16, 205.
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`In September
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`2019, a document leaked to Vice Media revealed 45 employees’ alleged claims of retaliation. By
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`December 2019, allegedly five organizers of the Walkout also claimed they were fired because of
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`their efforts.
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`B.
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`Procedural History
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`1.
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`California Actions
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`This action is a consolidation of several related shareholder derivative actions filed on behalf
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`of Alphabet and against certain of the Individual Defendants. On May 16, 2019, this Court
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`consolidated the related actions for all purposes and appointed NCPTPP, Local 272, and Martin as
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`Co-Lead Plaintiffs and Bottini & Bottini, Inc. and Cohen Milstein Sellers & Toll PLLC as Plaintiffs’
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`Co-Lead Counsel. On August 16, 2019, the Co-Lead Plaintiffs filed a consolidated complaint. At
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`a status conference on June 14, 2019, Alphabet’s counsel advised the Court that the Board had
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`formed a Special Litigation Committee (“SLC”) to evaluate and investigate Plaintiffs’ claims. The
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`parties agreed to delay the response date to the operative complaints pending an investigation by
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`the SLC and then—subsequent to a request from the SLC that the parties attempt to resolve the
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`dispute—to allow the parties to engage in the mediation process.
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`2.
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`Federal Actions
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`The Federal Actions were commenced between January and March 2019, asserting claims
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`for breach of fiduciary duty, corporate waste, unjust enrichment, and violations of the federal
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`securities laws. On February 5, 2020, the federal court granted Defendants’ motion to stay the
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`Federal Actions pending resolution of this action.
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`3.
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`Delaware Action
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`On May 14, 2019, Plaintiff Irving Fire commenced the Delaware Action, containing the
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`same allegations as alleged in the California Action. On June 14, 2019, Defendants moved to stay
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`the Delaware Action in favor of this action, which was denied. On July 22, 2019, the SLC moved
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`to stay the Delaware Action pending completion of the SLC’s process, which was granted. The
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`parties agreed to extend the stay in the Delaware Action while the parties engaged in mediation.
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`III.
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`SETTLEMENT DISCUSSIONS AND TERMS
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`Counsel for certain of the Settling Parties engaged in extensive efforts to resolve the Settled
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`Matters, including participating in a two-day mediation on January 22 and 23, 2020 before Judge
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`Kleinberg in San Francisco and in another full-day mediation on February 25, 2020 before Judge
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`Kleinberg in Palo Alto.
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`Prior to that,
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`the Settling Parties exchanged and provided to
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`Judge Kleinberg detailed mediation statements addressing liability and damages. Although the
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`participants were not able to reach a settlement at the mediations, they continued arm’s-length
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`negotiations in the months that followed the mediations, and ultimately reached an agreement-in-
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`principle to resolve the Settled Matters on the terms set forth in the Stipulation.
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`A.
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`Industry-Leading Commitment to Workplace Equity
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`The Settlement is broad in scope and designed to address all aspects of workplace equity.
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`It modifies Alphabet’s policies and procedures, funds a $310 million contribution to the Workplace
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`Initiative, and forms a DEI Advisory Council, which includes external members with expertise in
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`diversity, inclusion, equity, and/or sexual harassment. Stipulation 1H] 1.3, 1.4(b).
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`The DEI Advisory Council is one of the most important features of the Settlement.
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`It will
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`include Alphabet’s CEO for the first year and will report directly to the Board’s Leadership,
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`Development, and Compensation Committee (“LDCC”), whose mandate, formalized by this
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`Settlement,
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`is to oversee management’s efforts to promote a workplace environment that is
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`respectful and free from employment discrimination, including harassment, and retaliation. The
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`three external members of the DEI Advisory Council are nationally recognized for their expertise
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`in diversity, inclusion, equity, and/or sexual harassment.
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`The Settlement also provides for an historic $310 million commitment to DEI initiatives
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`over ten years, with accountability at the Board level and public reporting available to stockholders.
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`Furthermore, the Settlement substantially increases transparency surrounding executive
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`misconduct arising from sexual harassment, discrimination, and retaliation at Alphabet through the
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`waiver of mandatory arbitration of harassment, discrimination, and retaliation claims across all
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`Alphabet entities. Additionally, Google has agreed to limit confidentiality restrictions when settling
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`sexual harassment and retaliation claims, so that complainants can publicly discuss underlying facts
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`and circumstances of incidents, which will reduce the likelihood of executives repeatedly engaging
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`in sexual misconduct. Stipulation ll 1.2(b). The Settlement also precludes Google from paying
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`severance and accelerating unvested equity awards for all employees,
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`including Senior Executives
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`(defined as a member of the C-Suite, Senior Vice President, Country Manager, Head of a Business
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`Unit, or Site Lead) who are the subject of an investigation or have been terminated for sexual
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`harassment, misconduct, or retaliation, and requires the LDCC to report to the Board compensation
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`decisions for any Senior Executive found to have engaged in serious misconduct involving sexual
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`harassment, sexual misconduct, or retaliation (along with the substantiated complaints, underlying
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`allegations, and any corrective action).
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`Beyond these terms that promote a more equitable and transparent workforce, Alphabet also
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`has agreed to focus on attracting and retaining diverse employees, with Board-level oversight over
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`these initiatives. These commitments provide an extraordinary benefit to the workforce, which the
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`Company recognizes is “among our best assets,” and, correspondingly, to Alphabet’s long-term
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`value. The benefit Alphabet will derive from this Settlement cannot be overstated.
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`At a policy level, the Board has agreed to make numerous changes to enhance its oversight
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`of legal and regulatory compliance, sexual harassment, and other aspects of workplace equity, all
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`with the intent of improving communications and transparency, which will
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`lead to stronger
`
`decision-making by the Board. The changes include:
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`0
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`0
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`additional meetings of the Audit and Compliance (“AC”) Committee, focused on
`legal and regulatory compliance matters, and a formal reporting structure from the
`Google heads of compliance and investigations to the AC Committee;
`
`providing the LDCC with data regarding reports and resolution of claims of sexual
`harassment, discrimination, and retaliation, and requiring the LDCC to report
`annually to the Board regarding workforce equity issues and compensation decisions
`for any senior executive found to have engaged in serious misconduct involving
`sexual harassment, sexual misconduct, or retaliation; and
`
`-
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`requiring the Nominating and Corporate Governance Committee to annually review
`Board committee membership and to review every three years chairs of every Board
`-7-
`BRIEF ISO PLS.’ MOTION FOR PRELIM. APPROVAL OF SETTLEMENT
`Lead Case No. l9CV341522
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`committee to consider whether rotation of members is appropriate.
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`B.
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`The Attorneys’ Fees and Expense Award
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`Following the execution of the Stipulation, the Settling Parties separately negotiated, with
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`the assistance of the Hon. Layn Phillips (Ret), reasonable attorneys’ fees and expenses for the
`
`Stockholders’ Counsel (other than Delaware Counsel) to be paid by Defendants and/or their
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`insurance cam'ers. Pursuant to the Settling Parties’ agreement, Defendants have agreed not to
`
`oppose an application by Plaintiffs’ Counsel for an award of attorneys’ fees and expenses not to
`
`exceed
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`, reflecting less than
`
`of the concrete value conferred on Alphabet by the
`
`Settlement, including the reforms, the DEI Advisory Council, and Workplace Initiative funding
`
`commitment ($310 million).
`
`The agreed—to fees are fair and reasonable under both the “percentage of the fund” approach
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`and a “lodestar cross—check” because they represent a multiplier of approximately
`
`of Plaintiffs’
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`lodestar, which is well within the acceptable range. See JD W 69—72; see also In re Yahoo! Inc.
`
`S’hola’er Litig, Lead Case No. 17CV307054 (Cal. Supcr. Ct., Cty. of Santa Clara Jan. 9, 2019)
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`(Walsh, J.) (JD, Ex. 4) (awarding fees amounting to 30% of the settlement amount in a derivative
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`action and performing a lodestar cross—check); In re McKesson Corp. Derivative Litig, No. 4:17—
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`cv-0185-CW (N.D. Cal. Apr. 22, 2020) (JD, Ex. 5) (finding a 2.9 multiplier reasonable in a
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`derivative action); Cohn 12. Nelson, 375 F. Supp. 2d 844, 862 (ED. Mo. 2005) (“In shareholder
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`litigation, courts typically apply a multiplier of 3 to 5 to compensate counsel for the risk of
`
`contingent representation”) (collecting cases); Vizcaino v. Microsoft Corp, 290 F.3d 1043, 1051i
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`54 & n.6 (9th Cir. 2002) (surveying the range of multipliers approved by other courts and finding
`
`that multiples ranging from 1.0 to 4.0 are frequently awarded in common fund cases); Buccellaio
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`v. AT&T Operations, Inc, No. C10-00463—LHK, 2011 WL 3348055, at *2 (ND. Cal. June 30,
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`2011) (awarding 4.3 lodestar multiplier) (collecting cases).
`
`IV.
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`THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED
`
`At the preliminary approval stage, the sole issue before the court is whether the proposed
`
`settlement is within a range of what might be found fair, reasonable, and adequate, so that notice
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`of the proposed settlement can be given to shareholders and a date set for a final hearing to consider
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`-8-
`BRIEF ISO PLS.’ MOTION FOR PRELIM. APPROVAL OF SETTLEMENT
`Lead Case No. 19CV341522
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`final settlement approval. See MANUAL FOR COMPLEX LITIGATION §§ 21.632, 21.633 (4th ed.
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`2016). Thus, preliminary approval does not require the court to answer the ultimate question of
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`whether a proposed settlement is fair, reasonable, and adequate. Dunk v. Ford Motor Co., 48 Cal.
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`App. 4th 1794, 1801 (1996). Rather, this determination is made only after notice of the settlement
`
`has been given to shareholders and after they have been given the opportunity to comment on the
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`settlement. See MANUAL FOR COMPLEX LITIGATION §§ 21.633, 21.634.
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`In determining whether a proposed derivative settlement is fair, the criteria for evaluating
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`the fairness of a class action settlement provide a useful analogy. Robbins v. Alibrandi,
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`127 Cal. App. 4th 438, 449 n.2 (2005). To that end, the Court “should consider relevant factors,
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`such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further
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`litigation, the risk of maintaining class action status through trial, the amount offered in settlement,
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`the extent of discovery completed and the stage of the proceedings, the experience and views of
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`counsel, the presence of a governmental participant, and the reaction . . . to the proposed settlement.”
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`Dunk, 48 Cal. App. 4th at 1801. This list of factors “is not exhaustive and should be tailored to
`
`each case.” Id. Notably, “a presumption of fairness exists where:
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`(1) the settlement is reached
`
`through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and
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`the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage
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`of objectors is small.” Id. at 1802; see also Luckey v. Super. CL, 228 Cal. App. 4th 81, 94 n.13
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`(2014). Here, the consideration of the Dunk factors warrants preliminary approval.
`
`A.
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`The Settlement Was Reached Following Extensive Arm’s-Length Bargaining
`
`The Settlement is the product of difficult and vigorous arm’s-length negotiations between
`
`the parties, who were represented by highly experienced attorneys. Moreover, the negotiations
`
`were conducted for over a year, and benefited from the assistance of an independent mediator, Hon.
`
`James P. Kleinberg, who presided over three full days of in-person mediations (on January 22—23,
`
`2020 and February 25, 2020) and has attested to the hard-fought nature of the settlement
`
`negotiations. See JD, Ex. 2. The involvement of a retired judge serving as an independent mediator
`
`is strong evidence of the integrity of the settlement negotiations. For example, in Dunk, the Court
`
`of Appeal found the settlement to be fair and reasonable where, inter alia, “[t]he independent
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`BRIEF ISO PLS.’ MOTION FOR PRELIM. APPROVAL OF SETTLEMENT
`Lead Case No. 19CV341522
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`mediator, a retired superior court judge and appellate justice with substantial experience and respect
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`in the legal community, recommended the settlement.” 48 Cal. App. 4th at 1802-03.
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`B.
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`The Settlement Was Negotiated After Substantial Investigation by Counsel
`with Extensive Experience in Complex Derivative Litigation
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`Plaintiffs’ Counsel has determined that the proposed Settlement confers significant benefits
`
`to Alphabet and that it is fair, reasonable, and in the best interests of Alphabet and its shareholders.
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`Plaintiffs’ Counsel reached this conclusion after: (1) researching the applicable law with respect to
`
`the claims asserted (or which could be asserted) in the Settled Matters and the potential defenses
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`thereto; (2) reviewing and analyzing information in Alphabet’s public filings with the SEC, press
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`releases, announcements, and transcripts of investor conference calls, and securities analyst,
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`business, and financial me

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