Kuhne v. Gossamer Bio, Inc.

United States District Court for the Southern District of California

Kuhne v. Gossamer Bio, Inc.

Trial Court Opinion

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3

4 SCOTT KUHNE, individually and on Case No.: 3:20-cv-00649-DMS-DEB 5 behalf of all others similarly situated, JUDGMENT APPROVING CLASS 6 Plaintiff, ACTION SETTLEMENT 7 v. 8

9 GOSSAMER BIO, INC., SHEILA 10 GUJRATHI, M.D., BRYAN GIRAUDO, FAHEEM HASNAIN, 11 JOSHUA H. BILENKER, M.D., 12 KRISTINA BUROW, RUSSELL COX, THOMAS DANIEL, M.D., 13 RENEE GALA, OTELLO 14 STAMPACCHIA, Ph.D., MERRILL LYNCH, PIERCE, FENNER & 15 SMITH INCORPORATED, SVB 16 LEERINK LLC, BARCLAYS 17 CAPITAL INC., and EVERCORE GROUP L.L.C., 18

19 Defendants.

20 21 22 23 24 25 26 27 28 1 WHEREAS, a class action is pending in this Court entitled Kuhne v. 2 Gossamer Bio, Inc., et al., Case No. 3:20-cv-00649-DMS-DEB (the “Action”); 3 WHEREAS, (a) Lead Plaintiff Scott Kuhne (“Lead Plaintiff”), on behalf of 4 himself and the Class (defined below) and (b) Defendants Gossamer Bio, Inc. 5 (“Gossamer” or “the Company”), Sheila Gujrathi, M.D., Bryan Giraudo, Faheem 6 Hasnain, Joshua H. Bilenker, M.D., Kristina Burow, Russell Cox, Thomas Daniel, 7 M.D., Renee Gala, Otello Stampacchia, Ph.D, Merrill Lynch, Pierce, Fenner & 8 Smith Incorporated, SVB Leerink LLC, Barclays Capital Inc., and Evercore Group 9 L.L.C. (the “Defendants”) (collectively with Lead Plaintiff, the “Settling Parties”) 10 have determined to settle all claims asserted against Defendants in this Action with 11 prejudice on the terms and conditions set forth in the Stipulation and Agreement of 12 Class Action Settlement dated February 1, 2022 (the “Stipulation”) subject to 13 approval of this Court (the “Settlement”); 14 WHEREAS, unless otherwise defined in this Judgment, the capitalized terms 15 herein shall have the same meaning as they have in the Stipulation; 16 WHEREAS, by Order dated March 14, 2022 (the “Preliminary Approval 17 Order”), this Court: (a) preliminarily approved the Settlement; (b) certified the Class 18 solely for the purpose of effectuating the Settlement, finding the prerequisites for 19 class action certification under Rule 23 of the Federal Rules of Civil Procedure with 20 respect to the Settlement Class were satisfied; (c) ordered that notice of the proposed 21 Settlement be provided to potential Class Members; (d) provided Class Members 22 with the opportunity either to exclude themselves from the Class or to object to the 23 proposed Settlement; (e) scheduled a hearing regarding final approval of the 24 Settlement (“Settlement Hearing”) for June 24, 2022; and (f) postponed the 25 Settlement Hearing to September 30, 2022; 26 WHEREAS, due and adequate notice has been given to the Class; 27 WHEREAS, the Court conducted the Settlement Hearing on September 30, 28 2022 to consider, among other things, (a) whether the terms and conditions of the 1 Settlement are fair, reasonable and adequate to the Class, and should therefore be 2 approved; and (b) whether a judgment should be entered dismissing the Action with 3 prejudice as against the Defendants; 4 WHEREAS, the Court having reviewed and considered the Stipulation, all 5 papers filed and proceedings held herein in connection with the Settlement, all oral 6 and written comments received regarding the Settlement, and the record in the 7 Action; and WHEREAS, “when a settlement precedes class certification . . . , the district 8 9 court must apply an even higher level of scrutiny[,]” McKinney-Drobnis v. 10 Oreshack,

16 F.4th 594, 606

(9th Cir. 2021) (internal quotation omitted) and “This 11 additional scrutiny requires the court to look for and scrutinize ‘any subtle signs that 12 class counsel have allowed pursuit of their own self-interests to infect the 13 negotiations[,]’” In Re Apple Inc. Device Performance Litigation, 2022 DJDAR 14 10250 (9th Cir., filed Sept. 28, 2022) (internal citations and quotations omitted); and 15 WHEREAS, the Court has so scrutinized and finds good cause appearing 16 therefor; 17 IT IS HEREBY ORDERED, ADJUDGED AND DECREED: 18 1. Jurisdiction – The Court has jurisdiction over the subject matter of the 19 Action, and all matters relating to the Settlement, as well as personal jurisdiction 20 over all of the Settling Parties and each of the Class Members. 21 2. Incorporation of Settlement Documents – This Judgment 22 incorporates and makes a part hereof: (a) the Stipulation filed with the Court on 23 February 1, 2022; and (b) the Notice, the Summary Notice, and the Proof of Claim 24 form, all of which were filed with the Court on February 2, 2022. 25 3. Certification of the Class for Purposes of Settlement – Pursuant to 26 Rule 23 of the Federal Rules of Civil Procedure, this Court certifies, solely for 27 purposes of effectuating the Settlement, this Action as a class action on behalf of the 28 1 Class defined as: all Persons who purchased Gossamer common stock between 2 February 8, 2019 and December 13, 2019, inclusive (the “Class Period”), and/or who 3 acquired Gossamer shares pursuant or traceable to Gossamer’s Registration 4 Statement and Prospectus in connection with the IPO. Excluded from the Class are 5 Defendants and their families, the officers, directors, and affiliates, and their legal 6 representatives, heirs, successors or assigns, and any entity in which Defendants 7 have or had a controlling interest. The foregoing exclusion shall not cover 8 Investment Vehicles. Also excluded from the Class are the Persons who timely and 9 validly submitted a request for exclusion from the Class that was accepted by the 10 Court; such Persons are listed on the attached Exhibit A. 11 4. Lead Plaintiff is hereby appointed, for purposes of effectuating the 12 Settlement only, as representative for the Class for purposes of Federal Rule of Civil 13 Procedure 23. Block & Leviton LLP, who was appointed by the Court to serve as 14 Lead Counsel, is hereby appointed, for settlement purposes only, as counsel for the 15 Class pursuant to Rules 23(c)(1)(B) and (g) of the Federal Rules of Civil Procedure. 16 5. Notice – The Court finds that the dissemination of the Notice, the online 17 posting of the Notice, and the publication of the Summary Notice: (a) were 18 implemented in accordance with the Preliminary Approval Order; (b) constituted the 19 best notice practicable under the circumstances; (c) constituted notice that was 20 reasonably calculated, under the circumstances, to apprise Class Members of (i) the 21 pendency of the Action; (ii) the effect of the proposed Settlement (including the 22 Releases to be provided thereunder); (iii) Lead Counsel’s motion for an award of 23 attorneys’ fees and reimbursement of Litigation Expenses; (iv) their right to object 24 to any aspect of the Settlement, the Plan of Allocation and/or Lead Counsel’s motion 25 for attorneys’ fees and reimbursement of Litigation Expenses; (v) their right to 26 exclude themselves from the Class; and (vi) their right to appear at the Settlement 27 Hearing; (d) constituted due, adequate, and sufficient notice to all Persons entitled 28 to receive notice of the proposed Settlement; and (e) satisfied the requirements of 1 Rule 23 of the Federal Rules of Civil Procedure, the United States Constitution 2 (including the Due Process Clause), the Private Securities Litigation Reform Act of 3 1995, 15 U.S.C. § 77z-1(a)(7), as amended, and all other applicable law and rules. 4 6. Final Settlement Approval and Dismissal of Claims – Pursuant to, 5 and in accordance with, Rule 23 of the Federal Rules of Civil Procedure, this Court 6 hereby fully and finally approves the Settlement set forth in the Stipulation in all 7 respects (including, without limitation: the amount of the Settlement; the Releases 8 provided for therein; and the dismissal with prejudice of the claims asserted against 9 Defendants in the Action), and finds that the Settlement is, in all respects, fair, 10 reasonable and adequate to the Class. The Settling Parties are directed to implement, 11 perform and consummate the Settlement in accordance with the terms and provisions 12 contained in the Stipulation. 13 7. The Action and all of the claims asserted against Defendants in the 14 Action by Lead Plaintiff and the other Class Members are hereby dismissed with 15 prejudice. The Settling Parties shall bear their own costs and expenses, except as 16 otherwise expressly provided in the Stipulation. 17 8. Binding Effect – The terms of the Stipulation and of this Judgment 18 shall be forever binding on Defendants, Lead Plaintiff and all other Class Members 19 (regardless of whether or not any individual Class Member submits a Claim Form 20 or seeks or obtains a distribution from the Net Settlement Fund), as well as their 21 respective successors and assigns. 22 9. Releases – The Releases set forth in paragraph 5 of the Stipulation, 23 together with the definitions contained in paragraph 1 of the Stipulation relating 24 thereto, are expressly incorporated herein in all respects. The Releases are effective 25 as of the Effective Date. Accordingly, this Court orders that: 26 (a) Without further action by anyone, and subject to paragraph 10 27 below, upon the Effective Date, Lead Plaintiff and each of the Class Members shall 28 be deemed to have, and by operation of the Judgment shall have, fully, finally, and 1 forever released, relinquished, and discharged against the Released Defendant 2 Parties (whether or not such Class Member executes and delivers a Proof of Claim 3 and Release form) any and all Released Claims (including, without limitation, 4 Unknown Claims). The Settling Parties acknowledge, and the Class Members shall 5 be deemed by operation of law to acknowledge, that the waiver of Unknown Claims, 6 and of the provisions, rights and benefits of § 1542 of the California Civil Code, was 7 bargained for and is a key element of the Settlement of which the release in this 8 paragraph is a part. Upon the Effective Date, Lead Plaintiff and each of the Class 9 Members and anyone claiming through or on behalf of them, shall be permanently 10 barred and enjoined from the commencement, assertion, institution, maintenance, 11 prosecution, or enforcement against any Released Defendant Parties of any action 12 or other proceeding in any court of law or equity, arbitration tribunal, administrative 13 forum, or forum of any kind, asserting any of the Released Claims. 14 (b) Without further action by anyone, and subject to paragraph 10 15 below, upon the Effective Date, Defendants will release as against Released Plaintiff 16 Parties, all claims and causes of action of every nature and description, whether 17 known or Unknown Claims, whether arising under federal, state, local, common, 18 statutory, administrative, or foreign law, or any other law, rule, or regulation, at law 19 or in equity, whether fixed or contingent, whether foreseen or unforeseen, whether 20 accrued or unaccrued, whether liquidated or unliquidated, whether matured or 21 unmatured, whether direct, representative, class, or individual in nature that arise out 22 of or relate in any way to the institution, prosecution, or settlement of the claims 23 against Defendants. 24 10. Notwithstanding paragraphs 9(a) – (b) above, nothing in this Judgment 25 shall bar any action by any of the Settling Parties to enforce or effectuate the terms 26 of the Stipulation or this Judgment. 27 11. Rule 11 Findings – The Court finds and concludes that the Parties and 28 their respective counsel have complied in all respects with the requirements of Rule 1 11 of the Federal Rules of Civil Procedure in connection with the institution, 2 prosecution, defense, and settlement of the Action. 3 12. No Admissions – Neither this Judgment, the Term Sheet, the 4 Stipulation (whether or not consummated), including the exhibits thereto and the 5 Plan of Allocation contained therein (or any other plan of allocation that may be 6 approved by the Court), the negotiations leading to the execution of the Term Sheet 7 and the Stipulation, nor any proceedings taken pursuant to or in connection with the 8 Term Sheet, the Stipulation and/or approval of the Settlement (including any 9 arguments proffered in connection therewith): 10 (a) shall be offered against any of the Released Defendant Parties as 11 evidence of, or construed as, or deemed to be evidence of any presumption, 12 concession, or admission by any of the Released Defendant Parties with respect to 13 the truth of any fact alleged by Lead Plaintiff or the validity of any claim that was or 14 could have been asserted or the deficiency of any defense that has been or could 15 have been asserted in this Action or in any other litigation, or of any liability, 16 negligence, fault, or other wrongdoing of any kind of any of the Released Defendant 17 Parties or in any way referred to for any other reason as against any of the Released 18 Defendant Parties, in any civil, criminal or administrative action or proceeding, other 19 than such proceedings as may be necessary to effectuate the provisions of the 20 Stipulation; 21 (b) shall be offered against any of the Released Plaintiff Parties, as 22 evidence of, or construed as, or deemed to be evidence of any presumption, 23 concession or admission by any of the Released Plaintiff Parties that any of their 24 claims are without merit, that any of the Released Defendants Parties had 25 meritorious defenses, or that damages recoverable under the Complaint would not 26 have exceeded the Settlement Amount or with respect to any liability, negligence, 27 fault or wrongdoing of any kind, or in any way referred to for any other reason as 28 against any of the Released Plaintiff Parties, in any civil, criminal or administrative 1 action or proceeding, other than such proceedings as may be necessary to effectuate 2 the provisions of the Stipulation; or 3 (c) shall be construed against any of the Released Plaintiff Parties or 4 Released Defendant Parties as an admission, concession, or presumption that the 5 consideration to be given under the Settlement represents the amount which could 6 be or would have been recovered after trial; provided, however, that the Settling 7 Parties and the Released Plaintiff Parties and Released Defendant Parties and their 8 respective counsel may refer to this Judgment and the Stipulation to effectuate the 9 protections from liability granted hereunder and thereunder or otherwise to enforce 10 the terms of the Settlement. 11 13. Retention of Jurisdiction – Without affecting the finality of this 12 Judgment in any way, this Court retains continuing and exclusive jurisdiction over: 13 (a) the Settling Parties for purposes of the administration, interpretation, 14 implementation and enforcement of the Settlement; (b) the disposition of the 15 Settlement Fund; (c) any motion for an award of attorneys’ fees and/or Litigation 16 Expenses by Lead Counsel in the Action that will be paid from the Settlement Fund; 17 (d) any motion to approve the Plan of Allocation; (e) any motion to approve the 18 Class Distribution Order; and (f) the Class Members for all matters relating to the 19 Action. 20 14. Separate orders shall be entered regarding approval of a plan of 21 allocation and the motion of Lead Counsel for an award of attorneys’ fees and 22 reimbursement of Litigation Expenses. Such orders shall in no way affect or delay 23 the finality of this Judgment and shall not affect or delay the Effective Date of the 24 Settlement. 25 15. Modification of the Agreement of Settlement – Without further 26 approval from the Court, Lead Plaintiff and Defendants are hereby authorized to 27 agree to and adopt such amendments or modifications of the Stipulation or any 28 exhibits attached thereto to effectuate the Settlement that: (a) are not materially inconsistent with this Judgment; and (b) do not materially limit the rights of Class Members in connection with the Settlement. Without further order of the Court, Lead Plaintiff and Defendants may agree to reasonable extensions of time to carry out any provisions of the Settlement. 16. Termination of Setthement — If the Settlement is terminated as provided in the Stipulation or the Effective Date of the Settlement otherwise fails to occur, this Judgment shall be vacated, rendered null and void and be of no further force and effect, except as otherwise provided by the Stipulation, and this Judgment shall be without prejudice to the rights of Lead Plaintiff, the other Class Members and Defendants, and the Settling Parties shall revert to their respective positions in the Action as of October 15, 2021, as provided in the Stipulation. 17. Entry of Final Judgment — There is no just reason to delay the entry of this Judgment as a final judgment in this Action. Accordingly, the Clerk of the Court is expressly directed to immediately enter this final judgment in this Action. IT IS SO ORDERED. Dated: September 30, 2022 > gf p a Yn. Hon. Dana M. Sabraw, Chief Judge United States District Court

Reference

Status
Unknown