Free Motion to Seal Document - District Court of Colorado - Colorado

Case 1:04-cv-01006-RPM

Document 248

Filed 02/05/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-01006-RPM SPECIAL SITUATIONS FUND III, L.P.; SPECIAL SITUATIONS CAYMAN FUND, L.P.; SPECIAL SITUATIONS TECHNOLOGY FUND NEW, L.P.; and SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P., on behalf of themselves and others similarly situated, Plaintiffs, QUOVADX, INC.; LORINE R. SWEENEY; GARY T. SCHERPING; JEFFREY M. KRAUSS; FRED L. BROWN; J. ANDREW COWHERD; JAMES B. HOOVER; CHARLES J. ROESSLEIN; and JAMES A. GILBERT, Defendants.

JOINT MOTION FOR LEAVE TO FILE UNDER SEAL THE PARTIES' CONFIDENTIAL SUPPLEMENTAL AGREEMENT

Pursuant to D.C.COLO.LCivR 7.2 and 7.3, Lead Plaintiffs and Defendant Quovadx, Inc. ("Quovadx") jointly move for an order permitting the parties to file under seal their Confidential Supplemental Agreement regarding their proposed class settlement. A proposed Order Granting Joint Motion for Leave to File Under Seal is attached hereto as Exhibit 1. This joint motion is based on the grounds stated below.

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CERTIFICATION PURSUANT TO D.C.COLO.LCivR 7.1.A Pursuant to D.C.COLO.LCivR 7.1.A, the parties' respective counsel have conferred with each other, by telephone and e-mail, and have stipulated to the relief requested here. 1. On January 26, 2007, the parties executed a Stipulation of Settlement

("Stipulation") providing for a proposed settlement to resolve all claims that were asserted or could have been asserted in this action. Pursuant to and in accordance with the provisions of Paragraph 7.5 of the Stipulation, the parties executed a Confidential Supplemental Agreement on February 2, 2007 ("Supplemental Agreement"). The Supplemental Agreement contains the parties' agreement that, if Class Members who represent a certain number of shares were to opt out of the Class, then Quovadx would have the option to withdraw from the settlement. 2. In Lead Counsel's and Quovadx's counsel's experience, such "blow-out" or "opt-

out" provisions often are not disclosed to avoid any incentive on the part of unscrupulous attorneys to organize individual class members to "hold out" or opt-out of the settlement in the hope of obtaining additional compensation or, as is more often the case, an award of attorney's fees for the attorney representing the "opt-out class."1 3. The decision whether to opt-out of the settlement should be made by individual

Class Members based on the substantive terms and fairness of the proposed settlement to the

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Unfortunately, there are a number of class-action attorneys who routinely profit by holding class settlements hostage. Cf., e.g., Deborah R. Hensler et al., CLASS ACTION DILEMMAS: PURSUING PUBLIC GOALS FOR PRIVATE GAIN (Rand 2000) ("[A]ttorneys who fear that a class settlement will not serve their clients or themselves well may advise their clients to opt out; they may even attempt to scuttle the settlement altogether by mounting large-scale print or broadcast advertising campaigns urging prospective class members to opt out.").

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Class, not on the parties' blow-out provision in the Supplemental Agreement. Indeed, the blowout provision does not concern the reasonableness, fairness, or adequacy of the settlement. 4. If the Court or the parties were to publicly disclose the percentage or number of

shares necessary to void the settlement, such public disclosure would serve no legitimate purpose and allow unscrupulous persons to solicit Class Members to opt out for the sole purpose of holding up the settlement and extorting money from the parties for the benefit and personal gain of a small fraction of the Class Members and their attorney or attorneys. 5. Contemporaneously with the filing of this motion, the parties have filed their

Supplemental Agreement under seal pursuant to D.C.COLO.LCivR 7.2(C), pending the Court's resolution of this motion. 6. The Supplemental Agreement is the only settlement document that the parties

request be sealed, and good cause exists for this request. All substantive terms of the proposed settlement have been publicly disclosed in the parties' January 26, 2007, court filings. 7. No party to this action, nor any Class Member, will be adversely affected by the

relief requested. The parties respectfully request that the Court grant the parties' joint motion and enter their proposed Order Granting Joint Motion for Leave to File Under Seal, attached hereto as Exhibit 1.

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Dated: February 5, 2007

Respectfully submitted,

_s/Lawrence Rolnick______ ______ Lawrence M. Rolnick Gavin J. Rooney Michael J. Hahn Lowenstein Sandler PC 65 Livingston Avenue Roseland, New Jersey 07068 Attorneys for Lead Plaintiffs and the Class

s/Michael Williams Hugh Q. Gottschalk John M. Vaught Michael T. Williams Wheeler Trigg Kennedy LLP 1801 California Street, Suite 3600 Denver, Colorado 80202 Attorneys for Defendant Quovadx, Inc.

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on February 5, 2007, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses:
· · · · · · · · · · · · ·

Frederick J. Baumann [email protected],[email protected] Solomon Benjamin Cera [email protected],[email protected] Hugh Gottschalk [email protected],[email protected],[email protected] Michael Jeffrey Hahn [email protected],[email protected] Marcela A. Kirberger [email protected] Marc Bradley Kramer [email protected],[email protected] Evan S. Lipstein [email protected],[email protected] Lawrence M. Rolnick [email protected] Gavin J. Rooney [email protected],[email protected] John Peter Stigi , III [email protected] John Mark Vaught [email protected],[email protected] Craig Richard Welling [email protected],[email protected] Michael T. Williams [email protected],[email protected],[email protected]

s/Michael Williams Michael T. Williams Attorney for Defendant Quovadx, Inc. Wheeler Trigg Kennedy LLP 1801 California Street, Suite 3600 Denver, Colorado 80202 Telephone: (303) 244-1800 Facsimile: (303) 244-1879

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