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In Re Limelight Networks, Inc. Securities Litigation 07-CV-01603

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In Re Limelight Networks, Inc. Securities Litigation 07-CV-01603 Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 1 of 26 ) In re LIMELIGHT NETWORKS, INC. ) Master File No. CV07-01603-PHX-SRB SECURITIES LITIGATION ) ) ) This Document relates to: ) ) ) All Actions ) ) ) LODGED: Proposed Lead Plaintiffs’ Unopposed Motion For Preliminary Approval Of Proposed Class Action Settlement And Memorandum Of Points And Authorities In Support Thereof Attached Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 2 of 26 1 TIFFANY & BOSCO, P.A. Richard G. Himelrick, #004738 2 J. James Christian, #023614 Third Floor Camelback Esplanade II 3 2525 East Camelback Road Phoenix, Arizona 85016-4237 4 Telephone: (602) 255-6000 Facsimile: (602) 255-0103 5 [email protected] [email protected] 6 Lead Plaintiffs’ Liaison Counsel 7 BARROWAY TOPAZ KESSLER MELTZER & 8 CHECK, LLP Christopher L. Nelson, Esquire (Pro Hac Vice) 9 Mark S. Danek, Esquire (Pro Hac Vice) 280 King of Prussia Road 10 Radnor, PA 19087 Telephone: (610) 667-7706 11 Facsimile: (610) 667-7056 [email protected] 12 [email protected] 13 LABATON SUCHAROW LLP Christopher J. Keller, Esquire (Pro Hac Vice) 14 Jonathan Gardner, Esquire (Pro Hac Vice) 140 Broadway 15 New York, NY 10005 Telephone: (212) 907-0700 16 Facsimile: (212) 818-0477 [email protected] 17 [email protected] 18 Lead Plaintiffs’ Counsel 19 UNITED STATES DISTRICT COURT 20 FOR THE DISTRICT OF ARIZONA 21 ) In re LIMELIGHT NETWORKS, INC. ) Master File No. CV07-01603-PHX-SRB 22 SECURITIES LITIGATION ) )LEAD PLAINTIFFS’ UNOPPOSED 23 ) MOTION FOR PRELIMINARY This Document relates to: ) APPROVAL OF PROPOSED 24 ) CLASS ACTION SETTLEMENT AND )MEMORANDUM OF POINTS 25 All Actions ) AND AUTHORITIES IN SUPPORT )THEREOF 26 ) ) 27 ) ) 28 ) ) LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF PROPOSED CLASS ACTION SETTLEMENT NO. CV07-01603-PHX-SRB Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 3 of 26 1 TABLE OF CONTENTS 2 TABLE OF AUTHORITIES ii 3 PRELIMINARY STATEMENT 1 4 FACTUAL BACKGROUND 3 5 I. DESCRIPTION OF THE PROCEEDINGS 3 6 II. SETTLEMENT DISCUSSIONS 5 7 III. THE PROPOSED SETTLEMENT 6 8 IV. PROPOSED SCHEDULE OF EVENTS 7 9 ARGUMENT 7 10 I. THE SETTLEMENT MERITS PRELIMINARY APPROVAL 7 11 A. The Settlement Is the Result of a Thorough and Arm’s-Length Process 8 12 B. The Settlement Is Well Within the Range of Reasonableness 9 13 II. THE PROPOSED SETTLEMENT NOTICE SATISFIES THE 14 REQUIREMENTS OF RULES 23(d) AND (e) AND DUE PROCESS 11 15 III. THE COURT SHOULD PRELIMINARILY CERTIFY THE SETTLEMENT CLASS 13 16 A. Standards Applicable to Class Certification 13 17 B. The Settlement Class Meets the Requirements of Rule 23(a) 14 18 1. Rule 23(a)(1): Numerosity 14 19 2. Rule 23(a)(2): Questions of Law or Fact Are Common 15 20 3. Rule 23(a)(3): Lead Plaintiffs’ Claims Are Typical 16 21 4. Rule 23(a)(4): The Lead Plaintiffs Are Adequate 16 22 C. The Settlement Class Meets the Requirements of Rule 23(b)(3) 17 23 1. Common Questions of Law or Fact Predominate 17 24 2. A Class Action Is a Superior Method of Adjudication 18 25 D. Lead Plaintiffs’ Counsel Should Be Appointed Class Counsel 19 26 CONCLUSION 19 27 28 LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF i PROPOSED CLASS ACTION SETTLEMENT, No. CV07-01603-PHX-SRB Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 4 of 26 1 TABLE OF AUTHORITIES 2 Cases Page(s) 3 Amchem Prods. Inc. v. Windsor, 521 U.S. 591 (1997) 17 4 Blackie v. Barack, 5 524 F.2d 891 (9th Cir. 1975) 15 6 Bogner v. Masari Inv. Inc., 257 F.R.D. 529(D. Ariz. 2009) 16 7 Churchill Village, L.L.C. v. Gen. Elec., 8 361 F.3d 566 (9th Cir. 2004) 10, 12 9 Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992) 7 10 In re Cooper Cos. Sec. Litig., 11 254 F.R.D. 628 (C.D. Cal. 2009) 13, 17 12 Desai v. Deutsche Bank Sec. Litig., No. 08-55081, 2009 WL 2245223 (9th Cir. July 29, 2009) 14, 18 13 Dukes v. Wal-Mart, Inc., 14 509 F.3d 1168 (9th Cir. 2007) 14 15 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) 17 16 Horton v. USAA Casualty Ins. Co., 17 266 F.R.D. 360 (D. Ariz. 2009) 8, 10, 13 18 Jaffe v. Morgan Stanley & Co., No. C-06-3903 THE, 2008 WL 346417 (ND. Cal. Feb. 7, 2008) 13 19 Lerwill v. Infligh t Motion Pictures, Inc., 20 582 F.2d 507 (9th Cir. 1978) 16 21 Linney v. Cellular Alaska P’ship, 151 F.3d 1234 (9th Cir. 1998) 7 22 McPhail v. First Command Fin. Planning, Inc., 23 247 F.R.D. 598 (S.D. Cal. 2007) 18 24 Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338 (9th Cir. 1980) 12 25 Mullane v. Central Hanover Bank & Trust Co., 26 339 U.S. 306 (1950) 12 27 Negrete v. Allianz Life Ins. Co. of N. Am., 238 F.R.D. 482 (C.D. Cal. 2006) 18 28 LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF ii PROPOSED CLASS ACTION SETTLEMENT, No. CV07-01603-PHX-SRB Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 5 of 26 1 In re Omnivision Tech. Inc., 559 F. Supp. 2d 1036 (N.D. Cal. 2008) 9 2 Salt River Pima-Maricopa Indian Cmty. v. U.S., 3 266 F.R.D. 375 (D. Ariz. 2010) 15 4 Stratton v. Am. Med. Sec. Inc., 266 F.R.D. 340 (D. Ariz. 2009) 16 5 In re THQ, Inc. Sec. Litig., 6 No. CV-001783 (EX), 2002 WL 1832145 (C.D. Cal. Mar. 22, 2002) 13 7 Weinberger v. Jackson, 102 F.R.D. 839 (N.D. Cal. 1984) 16 8 West v. Circle K Stores, Inc., 9 No. S-04-0438, 2006 WL 1652598 (E.D. Cal. June 13, 2006) 7, 8, 9 10 Yamner v. Boich, No. 92-20597, 1994 WL 514035 (N.D. Cal. Sept. 15, 1994) 13, 15 11 12 13 STATUTES 14 Fed. R. Civ. P. 23(a) 14, 19 15 Fed. R. Civ. P. 23(a)(2) 15 16 Fed. R. Civ. P. 23(b)(3) 17 17 Fed. R. Civ. P. 23(b)(3)(A)-(D) 18 18 Fed. R. Civ. P. 23(g)(1) 19 19 15 U.S.C. §§ 78u-4 2 20 21 22 23 24 25 26 27 28 LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF iii PROPOSED CLASS ACTION SETTLEMENT, No. CV07-01603-PHX-SRB Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 6 of 26 1 PRELIMINARY STATEMENT 2 Mitchell Robbins, David Gechlik, Thaiky Nguyen and Del G. Nuzum (collectively 3 “Lead Plaintiffs”), the Court-appointed Lead Plaintiffs for the proposed class, submit this 4 memorandum of law in support of their unopposed motion, pursuant to Fed. R. Civ. P. 5 23(e), for preliminary approval of the proposed $1,900,000 cash settlement (the 6 “Settlement”) of claims against defendants Limelight Networks, Inc. (“Limelight” or the 7 “Company”); Jeffrey W. Lunsford, Nathan F. Raciborski, Michael W. Gordon, Allan M. 8 Kaplan, Walter D. Amaral, Joseph H. Gleberman, Fredric W. Harman, Mark A. Jung, 9 Peter J. Perrone, David C. Peterschmidt, Gary Valenzuela and Matthew Hale (the 10 “Individual Defendants”); and Goldman, Sachs & Co., Morgan Stanley & Co. 11 Incorporated, Jefferies & Company, Inc., Piper Jaffray & Co., and Friedman, Billings, 12 Ramsey & Co. Inc. (the “Underwriters” and collectively, with Limelight and the 13 Individual Defendants, “Defendants”) in this proposed class action (the “Litigation”), as 14 set forth in the Stipulation of Settlement, dated as of October 29, 2010 (the 15 “Stipulation”). 1 16 If approved, the Settlement will finally resolve Lead Plaintiffs’ appeal of the 17 dismissal of their claims to the United States Court of Appeals for the Ninth Circuit and 18 release all claims, and related claims, in the Litigation. 19 In connection with preliminary approval of the Settlement, and for purposes of 20 settlement only, Lead Plaintiffs respectfully request preliminary certification of a 21 settlement class of all Persons who purchased or acquired the common stock of Limelight 22 Networks, Inc. between June 7, 2007 and August 14, 2007, inclusive (the “Settlement 23 Class Period”), and were allegedly damaged thereby, including those persons or entities 24 who acquired shares of Limelight common stock issued pursuant to or traceable to 25 Limelight’s initial public offering (the “Settlement Class”), and appointment of Lead 26 27 1 All capitalized terms used herein are defined in the Stipulation and have the same meaning as set forth therein. A true and correct copy of the Stipulation, with annexed 28 exhibits, is annexed hereto as Exhibit 1. LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF 1 PROPOSED CLASS ACTION SETTLEMENT, CV-06-5036-R (CWX) Case 2:07-cv-01603-SRB Document 116 Filed 11/15/10 Page 7 of 26 1 Plaintiffs as Class Representatives and Labaton Sucharow LLP (“Labaton Sucharow”) 2 and Barroway Topaz Kessler Meltzer & Check, LLP (“Barroway Topaz,” together with 3 Labaton Sucharow, “Lead Plaintiffs’ Counsel”) as Class Counsel for the Settlement 4 Class. Lead Plaintiffs also seek approval of the form, substance and the requirements of 5 the proposed Notice of Pendency and Proposed Settlement of Class Action (“Notice”), 6 Proof of Claim and Release form (“Proof of Claim”), and the Summary Notice 7 (“Summary Notice”), appended as Exhibits A-1 to A-3 to the Proposed Order 8 Preliminarily Approving Settlement and Providing for Notice (“Preliminary Approval 9 Order”), annexed here to as Exhibit 2, and the means and methods for disseminating 10 notice, as comporting with due process and the Private Securities Litigation Reform Act 11 of 1995 (the “PSLRA”), 15 U.
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