Free Motion for Miscellaneous Relief - District Court of Colorado - Colorado

Case 1:04-cv-01006-RPM

Document 169

Filed 05/22/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO
Civil Action No. 04-cv- OI006- RPM
III L.P. SPECIAL SITUATIONS FUN SPECIAL SITUATIONS CAYMAN FUN , L.P. SPECIAL SITUATIONS TECHNOLOGY FUN SPECIAL SITUATIONS TECHNOLOGY FUN
similarly situated

NEW , L.P. ; and
L.P. , on behalf of themselves and others

Plaintiffs

LORI R. SWEENEY;
GARY T. SCHERPING; JEFFREY M. KRAUSS; FRED L. BROWN;
1. ANREW

QUOV ADX , INC.

COWHRD;

JAMS B. HOOVER;
CHARES 1. ROESSLEIN , and
JAMS A. GILBERT
Defendants.

LEAD PLAINTIFFS AND DEFENDANT QUOV ADX INC.' UNOPPOSED JOINT MOTION FOR APPROVAL OF NOTICE PLAN

Pursuant to Federal Rules of Civil Procedure 23(c)(2)(B) and 23(e)(I)(B), Lead Plaintiffs
Special Situations Fund

III L.P. ,

Special Situations

Cayman Fund ,

L.P. , Special Situations

Technology Fund New , L.P. , and Special Situations Technology Fund
and Defendant Quovadx ,
Inc. (" Quovadx ) (collectively, "

L.P. (" Lead Plaintiffs

the Moving Parties

) respectfully

request that the Court enter the Moving Parties '

proposed Order Approving Notice Plan

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Approval Order

) that is attached hereto as Exhibit 1.

This

unopposed joint motion is based

upon the grounds stated below.

CERTIFICATION PURSUANT TO D. C.COLO. LCivR 7. 1.A
Pursuant to D.

COLO. LCivR 7. 1. A, Class Counsel and Quovadx s counsel have

conferred , by telephone and e-mail , regarding this motion and have stipulated hereto. Further
Class Counsel and Quovadx s counsel have conferred bye-mail with counsel for " Individual

Defendants " Lorine R. Sweeney and Gary T.

Scherping and with

counsel for " Individual

Defendants " Jeffrey M. Krauss, Fred L. Brown , 1. Andrew Cowherd , James B. Hoover , Charles
1. Roesslein ,

and James A. Gilbert. The attorneys for the Individual Defendants , respectively,

have informed undersigned counsel that the Individual Defendants do not oppose the relief
sought in this joint motion , including the form and contents of the proposed Notice
(defined below).
Materials

The Moving Parties request that the Court enter their proposed Approval Order , in
the form attached hereto as Exhibit 1 ,

by which the Court would accomplish all of the following:

Approve the form , contents , and method of notice to be given to the Class
as set forth in this joint motion , and

direct Class Counsel

to fie with the Court a

declaration of compliance with those notice requirements , as set forth in paragraph 5. G of
the Approval Order;

Establish procedures and schedule deadlines for persons in the Class to
exclude themselves from the Class and to complete and return to their Questionnaires to
the Court-appointed third- party administrator (" Administrator

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Designate Rust Consulting, Inc. I ,

or a similarly

qualified firm , as the

Administrator of the notice plan and instruct the Administrator to perform the following
functions in accordance with the terms of the Approval Order:
Send , by first- class United States Mail , to each Class Member who

has been identified by Quovadx
Notice of

(or Quovadx

s transfer agent) a copy of the
of Individual Defendants

Class Action Lawsuit and Dismissal

Notice ) in the form attached

hereto as Exhibit 3 (or in a substantially similar

form) and a copy of the Request for Information to Class Members

Questionnaire ) in the form attached

hereto as Exhibit 4 (or in a

substantially

similar form) (collectively, " the Notice Materials
11.

Receive , image , and enter into a database the information obtained

from completed Questionnaires that are returned by Class Members;

ll.

Provide to Quovadx s counsel and Class Counsel , within 15

days

after the deadline for the Class Members ' return of the Questionnaires , a copy of
the Administrator s database of

information obtained the Class Members

returned Questionnaires;
IV.

Process Requests for Exclusion from the Class in accordance with

the Approval Order;

Before mailing the Notice Materials to the Class , the Administrator

will obtain address updates utilizing a National Change of Address ("NCOA"

I A summary of Rust Consulting, Inc. s experience and services is attached as Exhibit 2.

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database , and in mailing the Notice Materials , the Administrator will utilize any

updated addresses
database;
V1.

for Class

Members that can be obtained from the NCOA

If any Notice and Questionnaire are returned to the Administrator

bearing a forwarding address for a member of the Class , the Administrator shall
make one attempt to re-mail the Notice and Questionnaire to that Class Member
forwarding address;
V11.

Before mailing the Notice Materials

to the Class , establish an

Internet website that provides information regarding the litigation and a means by
which Class Members can request additional copies of the Notice Materials; and
V111.

Before mailing the Notice Materials to the Class , establish a toll-

free telephone number that Class Members and securities brokers and beneficial

holders can call to request additional copies of the Notice Materials or additional
information regarding the litigation.

Order Quovadx to produce to the Administrator , within 10 days after entry

of the Approval Order , and with a copy to Class Counsel , information within Quovadx
possession , custody, or control , including information within Quovadx s transfer agent's possession ,
custody, or control , that is in readable electronic

or paper format and is
(or Quovadx

suffcient to identify those class

members who are known to Quovadx

transfer agent) or who can be reasonably identified from Quovadx
transfer agent' s) records;

s (or Quovadx

, "

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Federal Rule of

Civil Procedure 23(c)(2)(B) provides that

(fJor any class

certified under Rule 23(b )(3), " such as the Class here

the court must direct to class members the best notice practicable under the circumstances , including individual notice to all members who can be identified
through reasonable effort. The notice must concisely and clearly state in plain

easily understood language:
the nature of the action

the definition of the class certified
the class claims , issues , or defenses

that a class member may enter an appearance through counsel if the member so desires
that the court will exclude from the class any member who requests exclusion , stating when and how members may elect to be excluded , and

the binding effect of a class judgment on class members under
Rule 23(c)(3).

The Moving Parties ' proposed Notice clearly satisfies these requirements of Rule 23(c)(2)(B)?
(See Ex. 2

I.A & I.B (describing nature of action and the class claims , issues , and defenses);
id

id

I.E (providing the definition of the class certified);

II (stating that the Class Members

inform Class Members that they " may enter an appearance through counsel" at this time because the Court already has appointed Lead Plaintiffs and Class Counsel to represent the Class Members , pursuant to the Private Securities Litigation Reform Act , 15 U.S. C. 977z- 1. (See Order , dated Aug. 1 , 2005. ) Thus , the Notice informs Class Members that they have the option to remain a member of the Class and be represented by Lead Plaintiffs and Class Counselor to exclude themselves from the Class and retain their own counsel to represent Ex. 2 II- III.) If the parties were to agree to a class settlement them in a separate action. (See of course , the Class Members then would be given an opportunity to appear at the fairness
not

2 The Notice does

hearing, either on their own or through separate counsel ,
aspect of the proposed settlement or any motion for an award of attorney fees.

for the

purpose of objecting to any
See

Fed. R. Civ.

P. 23(e)(4)(A), 23(h)(2).

,"

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may elect to exclude themselves from the Class and describing the deadline and procedures for
submitted requests for exclusion); id

~ III.C (stating the binding effect of a class judgment on

Class Members).

Federal Rule of Civil Procedure 23(e)(I)(B) provides that

(tJhe court must direct

notice in a reasonable manner to all class members who would be bound by a . . . voluntary
dismissal" of class claims. The Moving Parties ' proposed Notice clearly satisfies this additional
requirement. (See

Ex. 2 ~ I.D.

The Parties have proposed a Notice and a Questionnaire and a plan for

the

dissemination of those Notice Materials by direct mail to the Class Members and their broker or
proxy representatives whose addresses are known to Quovadx or Quovadx
Ex. 1 ~ 5; Exs. 2 & 3. )
and proxy
Quovadx and
s transfer agent.

(See

its agents previously created lists of shareholders , brokers
for all or nearly all of the Class

representatives that contain mailing addresses

Members or the Class Members ' representatives , and which Quovadx used to accomplish the

2003 exchange offer for the outstanding shares of Rogue Wave Software ,
Parties will use Quovadx s lists of shareholders
to send ,

Inc. The Moving
to

by first- class United States Mail ,

every Class Member (or Class Member s broker or representative) whose address is known to
Quovadx or Quovadx s transfer agent , a copy of the Notice and Questionnaire. (Ex. 1 ~ S.
This method of

individual notice constitutes
v. Carlisle

the "

best notice practicable under the
176 (1975).

circumstances.

Eisen

Jacquelin

417 U.S. 156 ,

The Notice and Questionnaire fairly, accurately, and reasonably inform members

of the Class of the nature of the litigation and how to (1) exclude themselves from the Class , if
they wish to do so ,

or (2) if they wish to participate in the litigation and seek compensation from

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Quovadx ,

complete the Questionnaire and return it directly to the Administrator , and the

deadlines for submitting a Request for Exclusion or a Questionnaire. (Exs. 2 & 3. Even though the number of Class Members who will not receive individual notice

by United States Mail is likely to be small, and even though publication of notice is not required
in such circumstances ,

the Moving Parties also propose to publish the Notice Materials

on the

Administrator s Internet website to provide additional notice to the Class. (Ex. 1 ~ 5.

Taken together ,

the Notice Materials and the plan for dissemination and

publication of those materials satisfy the requirements of Rule 23 and due process that the Court

provide to the Class Members the best notice

practicable under the circumstances.

See Eisen
758 F.2d 86

417 US. at
1985).

176;

Zimmer Paper Prods. Inc.

v.

Berger

Montague , pc.

90 (3d Cir.

For the foregoing reasons ,

the Court should grant the Moving Parties ' joint motion and

enter their proposed Order Approving Notice Plan , which is attached hereto as Exhibit
Dated: May 22 , 2006

Respectfully submitted

sf Lawrence M. Rolnick (by consent) Lawrence M. Rolnick Gavin 1. Rooney Lowenstein Sandler PC 65 Livingston Avenue Roseland , New Jersey 07068

sf Michael T. Williams Hugh Q. Gottschalk John M. Vaught Michael T. Williams Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver , Colorado 80202

Attorneys for Lead Plaintiffs and the Class

Attorneys for Defendant Quovadx , Inc.

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CERTIFICATE OF SERVICE (CM/ECF)
I hereby certify that on May 22 , 2006 , I electronically fied the foregoing with the Clerk of Court using the CM/CF system which will send notification of such fiing to the following email addresses:

Frederick J. Baumann
fbaumann rothgerber. com phenke rothgerber. com
Solomon Benjamin Cera

scera gbcslaw. com keg gbcslaw. com

Hugh Gottschalk
gottschalk wtklaw. com hart wtklaw. com;gottesfeld wtklaw. com John Alonzo Hutchings j hutchings dillanddil1. com chuffman dillanddill. com

Marcela A. Kirberger
mkirberger lowenstein. com Marc Bradley Kramer MarcBKramer cs. com MarcBKramerEsq
ao1. com

Evan S. Lipstein
evan li p steinlaw. com eve I yn
li psteinlaw. com

Lawrence M. Rolnick
lrolnick lowenstein. com

Gavin J. Rooney
grooney lowenstein. com mredmon lowenstein. com

Adam Philip Stapen
astapen dillanddill. com chuffman dillanddil1. com John Peter Stigi , III
j stigi
sheppardmullin. com

John Mark Vaught
vaught wtklaw. com como wtklaw. com

Craig Richard Wellng
cwelling rothgerber. com kdail y rothgerber. com

Michael T. Wiliams
williams wtklaw. com shannon wtklaw. com

sf Michael T. Williams by Elizabeth Anadale Michael T. Williams
Attorney for Defendant Quovadx, Inc.

LLP 1801 California Street , Suite 3600 Denver , Colorado 80202 Telephone: (303) 244- 1800 Facsimile: (303) 244- 1879 williams wtklaw. com
Wheeler Trigg Kennedy