Meyer v. United Microelectronics Corporation

Background

Lead Plaintiff Mark Nelson and the defendants—United Microelectronics Corporation, Shan-Chieh Chien, Jason Wang, Po-Wen Yen, and Chitung Liu—entered into a proposed settlement on June 30, 2020. The settlement concerned claims alleged in the amended complaint. The opinion does not describe the underlying allegations or state the settlement amount.

Preliminary class certification

For settlement purposes only, the court preliminarily certified a class consisting of people and entities that purchased or otherwise acquired United Microelectronics Corporation American Depositary Shares between October 28, 2015, and November 1, 2018, inclusive, and were allegedly damaged. The order excluded the defendants, certain current or former officers, directors, and partners of the company and related entities, entities controlled by a defendant, immediate family members of the individual defendants, and anyone who timely and validly requested exclusion.

The court preliminarily found that the requirements for a class action under Federal Rule of Civil Procedure 23 were satisfied. Those findings included that the class was too numerous for individual lawsuits to be practical, that common legal and factual questions existed, that Nelson’s claims were typical, that Nelson and class counsel adequately represented the class, that common questions predominated, and that a class action was the superior method for resolving the dispute. Nelson was conditionally certified as class representative, and Levi & Korsinsky, LLP was conditionally appointed as class counsel.

Preliminary settlement review

The court preliminarily found that the proposed settlement resulted from informed, arm’s-length negotiations conducted by counsel experienced in securities litigation. It also found that the settlement was within the range of what could potentially be considered fair, reasonable, and adequate. This was a preliminary finding; the order left final approval for the later fairness hearing.

Notice and claims process

The court approved the form and substance of the notice of the proposed settlement, the summary notice, and the proof-of-claim form. It appointed Analytics Consulting, LLC as claims administrator and directed notice to be mailed to identifiable class members within 31 calendar days. The order also required publication of the summary notice and posting of the settlement materials on the claims administrator’s website.

A class member seeking payment from the net settlement fund would need to submit a completed and signed proof of claim, supporting transaction documentation, and any required representative-authority certification. The proof of claim would also submit the claimant to the court’s jurisdiction for the submitted claim and, if the settlement became effective, release settled claims. The text’s printed deadline for submitting claims is partially illegible and appears to refer to January 2021.

Class members could request exclusion by mailing a written request with specified identifying and transaction information. Those who did not timely request exclusion would be bound by the settlement and related orders if the settlement became effective. The order also established procedures for written objections to the settlement, the plan of allocation, reimbursement requests, and counsel’s fee and expense application.

Fairness hearing and proposed final relief

The court scheduled a settlement fairness hearing for January 2021 at 10:00 a.m. The exact day is illegible in the opinion text provided. At that hearing, the court would consider final class certification, final appointment of the class representative and class counsel, approval of the settlement and plan of allocation, reimbursement of the lead plaintiff’s expenses, counsel’s fees and expenses, and whether to enter a final judgment dismissing the amended complaint against the defendants with prejudice. The order also contemplated releases and an injunction barring covered claims, but these matters were to be considered in connection with final settlement approval.

The court stayed proceedings against the defendants while settlement approval was pending, subject to actions needed to implement the settlement or comply with the agreement. If the settlement was terminated, not finally approved, or otherwise failed to become effective, the conditional class certification and this order would become void, the parties would be restored to their litigation positions as of September 27, 2019, and the order could not be used as evidence or referred to for any purpose.

Disposition

The court entered an order preliminarily certifying the settlement class, conditionally appointing the class representative and class counsel, preliminarily finding the settlement potentially fair, approving the notice materials, appointing the claims administrator, and setting a final fairness hearing. It did not finally approve the settlement, finally certify the class, award fees or expenses, or dismiss the amended complaint.