MEMORANDUM AND ORDER
P. KEVIN CASTEL, District Judge.
The class plaintiff in In re Terraform Global, Inc. Securities Litigation has challenged two opt-out notices submitted by members of the proposed shareholder class. Class counsel asserts that the opt-out submissions did not include adequate "documentary proof" and asserts that they are therefore ineffective. The shares held by the two shareholders assertedly exceed the threshold number of opt outs that triggers defendants' option to terminate the settlement, which option defendants have purportedly exercised.
On April 27, 2018, the Court presided at a hearing on class counsel's challenge to the two opt-out submissions. For the reasons that will be explained, the Court finds that the optout notices complied with the Court-ordered notice of settlement and Rule 23, Fed. R. Civ. P.
On December 19, 2017, the Court granted lead plaintiff's unopposed motion for preliminary approval of class action settlement, and approved the class-wide notice of settlement (the "Notice"). (Dock # 269.) Rule 23(c)(2)(B) requires, among other things, that notice to any proposed class certified under Rule 23(b)(3) "must clearly and concisely state in plain, easily understood language . . . (v) that the court will exclude from the class any member who requests exclusion; [and] (vi) the time and manner for requesting exclusion . . . ."
Paragraph 11 of the Court-approved Notice sets forth the manner for requesting exclusion. It states in part:
In order to be valid, such request for exclusion must be submitted with documentary proof (i) of each purchase and, if applicable, sale transaction of Global common stock and (ii) demonstrating your status as a beneficial owner of the Global common stock. Any such request for exclusion must be signed and submitted by you, as the beneficial owner, under penalty of perjury.
(Bodnar Dec. Ex. A.) Requests for exclusion were to be submitted to the claims administrator no later than March 27, 2018. (Id.)
On March 27, 2018, Balyasny Asset Management L.P. ("Balyasny") and Luxor Capital Group, LP ("Luxor") submitted requests for exclusion. The Court reviews each submission in turn.
Counsel for Balyasny, Lowenstein Sandler LLP, wrote to the claims administrator, Garden City Group, on or before the opt-out deadline, identifying funds owned by Balyasny, and stating that they "hereby request to be excluded from the Settlement Class in In re TerraForm Global Inc. Securities Litigation . . . and retain their rights and claims vis-à-vis TerraForm Global." (Amin-Giwner Dec. Ex. 1; emphasis in original.) The letter included contact information for attorneys at Lowenstein Sandler and for an individual at Balyasny. (Id.) Attached to the letter is a signed statement submitted under penalty of perjury by Adam Finger, general counsel to Balyasny. (Docket # 346-1.) Finger's submission states, "For the avoidance of doubt, each of [sic] every one of the Balyasny Funds, as defined above, requests to be excluded from the Settlement Class . . . ." (Id. ¶ 4.) It states, "The Balyasny Funds are the beneficial owners of the applicable securities." (Id. ¶ 5.) The submission attaches a 31-page spreadsheet that reflects the Balyasny funds' transactions in TerraForm Global common stock, including date, share price and quantity of sale or purchase. (Docket # 346-1.) Each page contains data on approximately 45 transactions. Paragraph six of Finger's "certification" describes the source of this trading data:
I understand that correct and complete trading data taken from the Investment Manager's internal systems has been transmitted to counsel for the Balyasny Funds, Lowenstein Sandler LLP, to be formatted for submission. I understand this data, or parts thereof, will be submitted as part of this exclusion.
Luxor also wrote to the claims administrator by letter from its counsel,
Lowenstein Sandler, with the same boldfaced request for exclusion from the settlement class as submitted by Balyasny. The letter, submitted before the opt-out date, includes contact information for outside counsel and for the general counsel of Luxor. (Docket # 346-2.) It attaches a signed statement submitted under penalty of perjury by Norris Nissim, general counsel to Luxor. (Docket # 346-2.) The submission states that the Luxor funds "are the beneficial owners of the applicable securities," and states, "For the avoidance of doubt, each of [sic] every one of the Luxor Funds, as defined above, requests to be excluded from the Settlement Class . . .." (Id. ¶¶ 4-5.) The submission attaches a six-page spreadsheet that lists the Luxor funds' transactions in TerraForm Global common stock, including date, share price and quantity of sales and purchases. (Docket # 346-2.) Each page contains data on approximately 45 transactions. Paragraph six of the Nissim Certification states: "The trading data being submitted with this request for exclusion is maintained and relied upon by the Investment manager in the ordinary course of its business."
Upon application of the lead plaintiff, this Court issued an Order to Show Cause on April 29, 2018, directing the Balyasny and Luxor funds to show cause as to why their requests for exclusion from the class should not be deemed invalid. (Docket # 343.) Lead plaintiff urges that the submissions of Balyasny and Luxor do not satisfy the requirements of the Notice because they fail to attach "documentary proof" in the form of "trade confirmations, brokerage statements or similar documentation . . . ." (Docket # 344 at 6.)
Balyasny and Luxor note that the Notice to the class does not specify any particular forms of "documentary proof," such as brokerage statements. They argue that it would be inconsistent with due process and Rule 23(c)(2)(B) to improvise additional documentation requirements. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985) ("due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an `opt out' or `request for exclusion' form to the court."). A Lowenstein Sandler attorney states that he personally created the trading-data charts based on raw data delivered by the two funds, and that brokerage statements on behalf of the Balyasny funds alone would exceed 30,000 pages and include transactions unrelated to TerraForm Global. (Bodnar Dec. ¶¶ 7-8, 13.)
Having reviewed the exclusion requests of Balyasny and Luxor, the Court comfortably finds that they satisfy the requirements of the Notice. The Notice does not specify that any particular types of documentation must be submitted. It requires "documentary proof (i) of each purchase and, if applicable, sale transaction of Global common stock and (ii) demonstrating your status as a beneficial owner of the Global common stock." Signed statements from Balyasny and Luxor, submitted under penalty of perjury, specifically state that the entities "are the beneficial owners of the applicable securities," and annex a summary of transactions prepared by counsel, based on the trading data maintained by those entities.
The opt-out submissions must satisfy the requirements of the Notice, which in turn, must satisfy the "plain, easily understood" language requirement of Rule 23(c)(2)(B). In Plummer v. Chemical Bank, 668 F.2d 654, 657 n.2 (2d Cir. 1982), which involved a class certified under Rule 23(b)(2), the Court noted that Rule 23, as it then existed, does not require opt-out plaintiffs "to file written reasons for their exercise of choice. Any reasonable indication of a desire to opt out should suffice." In In re WorldCom, Inc. Securities Litigation, 2005 WL 1048073 (S.D.N.Y. May 5, 2005), a dispute arose as to whether a class member mailed a request for exclusion. Judge Cote observed that "the sparse case law on the issue suggests, and the practicalities of class action administration require, that the burden be on the class member to establish that he or she made a sufficient effort to communicate an intent to opt out through the appropriate channels. The class member must show that notice was effectively and timely communicated." Id. at *4. "Because flexibility in making this determination is appropriate, `any written evidence' containing a `reasonable indication of a desire to opt out ought to be sufficient.'" Id. (quoting In re Four Seasons Sec. Laws Litig., 493 F.2d 1288, 1291 (10th Cir. 1974)). Balyasny and Luxor's unmistakable intent to opt out also weighs in favor of their exclusion from the class.
For the foregoing reasons, the Court finds that the opt-out submissions of Balyasny and Luxor complied with the Court-approved Notice to the Class. Balyasny and Luxor are excluded from the proposed settlement class in the above-captioned action.
SO ORDERED.
