Bilinsky v. Gatos Silver, Inc. — Entry #97: ORDER by Chief Judge Philip A

Case No. 1:22-cv-00453-PAB-KAS Document 97 filed 10/15/24 USDC Colorado pg 1 of 19


                         IN THE UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLORADO
                               Chief Judge Philip A. Brimmer

   Civil Action No. 22-cv-00453-PAB-KAS

   MICHAEL BILINSKY, individually and on behalf of all others similarly situated,

          Plaintiff,
   v.

   GATOS SILVER, INC.,
   STEPHEN ORR,
   ROGER JOHNSON,
   PHILIP PYLE,
   JANICE STAIRS,
   ALI ERFAN,
   IGOR GONZALES,
   KARL HANNEMAN,
   DAVID PEAT,
   CHARLES HANSARD, and
   DANIEL MUÑIZ QUINTANILLA,

          Defendants.


                                             ORDER


          This matter comes before the Court on Plaintiffs’ Motion for Final Approval of the

   Settlement and Approval of the Plan of Allocation [Docket No. 89] and Lead Counsel

   and WTO’s Motion for Awards of Attorneys’ Fees, Litigation Expenses, and Reasonable

   Costs and Expenses to Plaintiffs [Docket No. 90]. Lead plaintiff Bard Betz1 and plaintiff

   Jude Sweidan (together, “representative plaintiffs”) filed the motion for final approval of

   the class action settlement and motion for awards of attorneys fees and costs. Docket


          1 On June 3, 2022, Magistrate Judge Kristen L. Mix appointed Bard Betz as lead

   plaintiff in this matter. Docket No. 49 at 7.


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   No. 89 at 1; Docket No. 90 at 1. The Court has jurisdiction pursuant to 28 U.S.C.

   § 1331.

   I. BACKGROUND

          This case arises out of defendants’ alleged misleading statements and omissions

   concerning the mineral reserves at the Cerro Los Gatos mine in Mexico. Docket No. 87

   at 2. Plaintiffs allege that Gatos Silver, Inc. (“Gatos”) and the individual defendants are

   liable for “violations of the Securities Exchange Act of 1934 and the Securities Act of

   1933 resulting from materially false and misleading statements, and omissions of

   material facts required to be disclosed.” Id.; see also Docket No. 54 at 12. Specifically,

   plaintiffs allege that defendants materially overstated the mine’s reserves and resources

   in Gatos’s October 2020 IPO, the July 2021 Offering, and other SEC filings and oral

   statements based on a 2020 Technical Report that contained material errors. Docket

   No. 87 at 2; Docket No. 54 at 12-20, ¶¶ 1-22. Defendants deny these allegations.

   Docket No. 87 at 2.

          On June 13, 2023, the parties engaged in a full-day, in-person mediation session

   before Robert Meyer of Judicial Arbitration and Mediation Services, Inc., resulting in Mr.

   Meyer’s formal mediator’s proposal that the case settle for $21,000,000. Docket No.

   89-1 at 11; Docket No. 91 at 15-16, ¶¶ 22, 24. The parties accepted the proposal and

   signed a settlement agreement. Docket No. 87 at 2; Docket No. 85-1. On February 29,

   2024, the Court preliminarily approved the parties’ settlement agreement. Docket No.

   87 at 23. On April 26, 2024, the representative plaintiffs filed a motion for final approval

   of the settlement and a motion for attorneys fees and costs. Docket Nos. 89, 90. On

   May 31, 2024, the Court held a fairness hearing. Docket No. 96.


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   II. FINAL APPROVAL OF CLASS ACTION CERTIFICATION

          Approval of a class action settlement under Fed. R. Civ. P. 23 takes place in two

   stages. In the first stage, the Court preliminarily certifies a settlement class,

   preliminarily approves the settlement agreement, and authorizes that notice be given to

   the class so that interested class members may object to the fairness of the settlement.

   In the second stage, after notice is given to the putative class, the Court holds a fairness

   hearing at which it addresses (1) any timely objections to the treatment of this litigation

   as a class action, and (2) any objections to the fairness, reasonableness, or adequacy

   of the settlement terms. Fed. R. Civ. P. 23(e)(2); see, e.g., McReynolds v. Richards-

   Cantave, 588 F.3d 790, 803 (2d Cir. 2009).

          District courts have broad discretion in granting or denying class certification.

   Shook v. Bd. of Cnty. Comm’rs of the Cnty. of El Paso, 543 F.3d 597, 603 (10th Cir.

   2008). “[C]ertification is proper only if ‘the trial court is satisfied, after a rigorous

   analysis, that the prerequisites of Rule 23(a) have been satisfied.’” Wal-Mart Stores,

   Inc. v. Dukes, 564 U.S. 338, 350-51 (2011) (quoting Gen. Tel. Co. of the Sw. v. Falcon,

   457 U.S. 147, 161 (1982)). A district court may only certify a settlement class if it is

   “satisfied, after a rigorous analysis,” that the requirements of Rule 23 are met, and

   frequently a district court’s “‘rigorous analysis’ will entail some overlap with the merits of

   the plaintiff’s underlying claim.” Id.

          A district court may certify a class action if the proposed class satisfies the

   prerequisites of Fed. R. Civ. P. 23(a) as well as the requirements of one of the three

   types of classes identified in Rule 23(b). Where the plaintiff applies for class

   certification, plaintiff bears the burden of proving that Rule 23’s requirements are


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   satisfied. DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1194 (10th Cir. 2010) (citing

   Shook v. Bd. of Cnty. Comm’rs of the Cnty. of El Paso, 386 F.3d 963, 968 (10th Cir.

   2004)).

              A. Rule 23(a)

          Rule 23(a) requires that (1) the class be so numerous that joinder is

   impracticable; (2) there are questions of law or fact common to the class; (3) the claims

   of the representative parties are typical of those of the class; and (4) the representative

   parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a).

   In the order on the motion for preliminary approval, Docket No. 87 at 9-14, the Court

   found that each of the requirements was met and incorporates those findings herein.

   Accordingly, the requirements of Rule 23(a) are met.

              B. Rule 23(b)(3)

          The Court preliminarily certified the class under Rule 23(b)(3), id. at 14-16, which

   states that a class action may be maintained if “the questions of law or fact common to

   class members predominate over any questions affecting only individual members, and

   [ ] a class action is superior to other available methods for fairly and efficiently

   adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The Court finds that final

   certification is appropriate for the same reasons it found preliminary approval was

   warranted. See Docket No. 87 at 14-16.


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   III. FINAL APPROVAL OF CLASS ACTION SETTLEMENT

          A. Overview of the Settlement Agreement

          The proposed Settlement Class consists of the members of the Securities Act

   Settlement Class and the Exchange Act Settlement Class. Docket No. 85-1 at 13,

   ¶ 1.52. The Securities Act Settlement Class consists of:

          all Persons and entities who, in domestic transactions or on the NYSE,
          purchased or otherwise acquired Gatos common stock pursuant or
          traceable to the 2020 Registration Statement or the 2021 Registration
          Statement, and were damaged thereby.

   Id. at 12, ¶ 1.49. The Exchange Act Settlement Class consists of:

          (i) all Persons and entities who purchased or otherwise acquired Gatos
          common stock listed on the NYSE, from December 9, 2020 through
          January 25, 2022, both inclusive, and were damaged thereby; (ii) all
          Persons and entities who, in domestic transactions, purchased or
          otherwise acquired publicly traded call options on Gatos common stock,
          from December 9, 2020 through January 25, 2022, both inclusive, and
          were damaged thereby; and/or (iii) all Persons and entities who, in
          domestic transactions, sold publicly traded put options on Gatos common
          stock, from December 9, 2020 through January 25, 2022, both inclusive,
          and were damaged thereby.

   Id. at 7, ¶ 1.16. The proposed Settlement Class excludes:

          Defendants, the current and Class Period officers and directors of the
          Company, the members of the immediate families and the legal
          representatives, affiliates, heirs, successors-in-interest, or assigns of any
          such excluded person, any entity in which such excluded persons have or
          had a majority interest, and the Electrum Group, LLC; provided, however,
          that any “Investment Vehicle” shall not be excluded from the Settlement
          Class.

   Id. at 13, ¶ 1.52.

          The settlement agreement provides for a net settlement fund of $21,000,000. Id.

   at 15, ¶ 2.1. The class members will receive pro rata shares of the net fund based on

   their recognized losses in transactions in Gatos securities. Docket No. 89-1 at 17;


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   Docket No. 85-2 at 29, ¶ 25; see Docket No. 85-1 at 26, ¶ 6.10 (the fund shall be

   distributed “substantially in accordance with a Plan of Allocation described in the Notice

   and approved by the Court”). The settlement agreement permits lead counsel to seek

   attorneys’ fees and costs and permits the representative plaintiffs to seek an award

   pursuant to 15 U.S.C. § 78u-4(a)(4). Docket No. 85-1 at 28, ¶ 7.1; see 15 U.S.C. § 78u-

   4(a)(4). Class counsel seeks an award of $5,880,000 in attorneys’ fees, amounting to

   28 percent of the settlement fund, payment of litigation expenses in the amount of

   $226,314, and service awards for the representative plaintiffs of $15,000 in the

   aggregate. Docket No. 90-1 at 5, 16.

          B. Notice to Settlement Class

          Under Rule 23(e)(1), a district court approving a class action settlement “must

   direct notice in a reasonable manner to all class members who would be bound by the

   proposal.” Fed. R. Civ. P. 23(e)(1). Rule 23(c)(2)(B) provides, in relevant part, that for

   “any class certified under Rule 23(b)(3), the court must direct to class members the best

   notice that is practicable under the circumstances, including individual notice to all

   members who can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B).

   In addition to the requirements of Rule 23, the Due Process Clause also guarantees

   unnamed class members the right to notice of a settlement. DeJulius v. New England

   Health Care Emps. Pension Fund, 429 F.3d 935, 943-44 (10th Cir. 2005). However,

   due process does not require that each class member receive actual notice to be bound

   by the adjudication of a representative action. Id. Instead, the procedural rights of

   absent class members are satisfied so long as “the best notice practicable [is given]

   under the circumstances including individual notice to all members who can be


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   identified through reasonable effort.” In re Integra Realty Resources, Inc., 262 F.3d

   1089, 1110 (10th Cir. 2001) (citation omitted). Thus, the legal standards for satisfying

   Rule 23(c)(2)(B) and the constitutional guarantee of procedural due process are

   “coextensive and substantially similar.” DeJulius, 429 F.3d at 944.

          The parties agreed to provide direct and individual notice, in the form of a self-

   mailer, 2 to be distributed to class members though direct mail. Docket No. 87 at 20.

   They agreed that the claim administrator, Epiq Class Action and Claims Solutions, Inc.

   (“Epiq”), would disseminate the notices using a list from defendants’ securities transfer

   agent of all persons who purchased or otherwise acquired Gatos securities between

   October 28, 2020 and January 25, 2022, as well as Epiq’s proprietary list of U.S. banks,

   brokerage firms, and nominees that purchase securities on behalf of beneficial owners.

   Id. at 21 (citing Docket No. 82-1 at 24). The Court previously approved the parties’

   notice plan, notice forms, and claim form. See id. at 20-21.

          Epiq mailed 71 notices to the addresses listed by defendants’ securities transfer

   agent and 990 notices to addresses from Epiq’s list of nominees. Docket No. 91-4 at 3-

   4, ¶¶ 3-5. The notice directed nominees and brokers who purchased Gatos securities

   for the beneficial interest of a person or organization other than themselves to either

   provide a list of names and addresses of all such beneficial owners to Epiq or request

   from Epiq sufficient copies of the notice to forward to all such beneficial owners. Id. at

   4, ¶ 6. As a result, Epiq received, and mailed notices to, 3,649 additional potential

   Settlement Class Members and provided 5,555 notices to brokers and nominees to


          2 A “self-mailer” is a folded document with eight 10.5” x 6” panels.   Docket No.
   82-1 at 16.
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   forward to their customers. Id. at 5, ¶ 8. In addition, one nominee, Broadridge,

   informed Epiq that it had emailed 3 18,889 copies of the notice to beneficial owners. Id.,

   ¶ 10. Furthermore, Epiq published a summary notice in Investor’s Business Daily,

   transmitted a summary notice over PR Newswire, and published digital notice in the

   form of banner advertisements on the Google Display Network and Yahoo! Finance

   websites. Id. at 6, ¶ 12; Docket No. 91-4 at 6, ¶ 12. Additionally, Epiq maintains a

   website dedicated to the settlement of the action which makes available copies of the

   notice, summary notice, long-form notice, proof of claim form, legal documents filed in

   this action, answers to frequently asked questions, and instructions on how to submit

   claims, opt out of the settlement, and submit objections. Docket No. 91-4 at 7, ¶¶ 14,

   16-17. Finally, Epiq maintains a toll-free telephone line, email address, and P.O. Box

   through which class members can contact the claims administrator. Id. at 8-9, ¶¶ 20-21.

   The Court finds that this notice procedure satisfies Rule 23(c)(2)(B) and (e)(1).


          3 Although the parties did not seek the Court’s approval of notice by email at the

   preliminary settlement approval stage, “[c]ourts have acknowledged that ‘notice by
   email and text is reasonable in today’s mobile society’ and that ‘these methods of
   communication may offer a more reliable means of reaching an individual even if that
   individual is away from home or has moved.’” See Bowling v. DaVita, Inc., No. 21-cv-
   03033-NYW-KLM, 2023 WL 4364140, at *10 (D. Colo. Jul. 6, 2023) (certifying a
   collective action under the Fair Labor Standards Act) (quoting Calvillo v. Bull Rogers,
   Inc., 267 F. Supp. 3d 1307, 1315 (D.N.M. 2017)). The Court finds that email notice to
   Broadridge customers is satisfactory under Rule 23(e)(1). See Wornicki v.
   Brokerpriceopinion.com, Inc., No. 13-cv-03258-PAB-KMT, 2017 WL 3283139, at *4-5
   (D. Colo. Aug. 2, 2017) (holding that proposed plan to give notice to class members via
   email satisfied the requirements of Rule 23(e)(1)); Sobolewski v. Boselli & Sons, LLC,
   No. 16-cv-01573-RM-STV, 2017 WL 4586108, at *3 (D. Colo. Oct. 16, 2017) (approving
   email notice in a class and collective action because “while United States mail may be
   the preferred method of providing notice, it is not the only method”) (quotation and
   citation omitted).
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          C. Analysis of Rule 23(e) Factors

          Rule 23(e) provides that a proposed settlement may only be approved after a

   “finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). In making

   this determination, “trial judges bear the important responsibility of protecting absent

   class members” and must be “assur[ed] that the settlement represents adequate

   compensation for the release of the class claims.” In re Pet Food Prods. Liab. Litig.,

   629 F.3d 333, 349 (3d Cir. 2010); see also Amchem Prods., Inc. v. Windsor, 521 U.S.

   591, 623 (1997) (noting that the Rule 23(e) inquiry “protects unnamed class members

   from unjust or unfair settlements affecting their rights when the representatives become

   fainthearted before the action is adjudicated or are able to secure satisfaction of their

   individual claims by a compromise”) (citations omitted).

          To determine whether a proposed settlement is fair, reasonable, and adequate,

   courts consider the following factors: (1) whether the proposed settlement was fairly and

   honestly negotiated; (2) whether serious questions of law and fact exist, placing the

   ultimate outcome of the litigation in doubt; (3) whether the value of an immediate

   recovery outweighs the mere possibility of future relief after protracted and expensive

   litigation; and (4) the judgment of the parties that the settlement is fair and reasonable.

   Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002). If the

   settling parties can establish these factors, courts usually presume that the proposed

   settlement is fair and reasonable. In re Warfarin Sodium Antitrust Litig., 391 F.3d 516,

   535 (3d Cir. 2004) (applying an “initial presumption of fairness” to a proposed settlement

   where: (1) it is the result of arm’s length negotiations; (2) it is based on sufficient


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  discovery; (3) the proponents of the settlement are experienced in similar litigation; and

  (4) only a small fraction of the class objected).

         In addition, Rule 23(e)(2) states that a court is to consider the following factors

  when determining whether a settlement is fair, reasonable, and adequate:

         (A) the class representatives and class counsel have adequately represented the
         class;
         (B) the proposal was negotiated at arm’s length;
         (C) the relief provided for the class is adequate, taking into account:
                (i) the costs, risks, and delay of trial and appeal;
                (ii) the effectiveness of any proposed method of distributing relief to the
                class, including the method of processing class-member claims;
                (iii) the terms of any proposed award of attorney’s fees, including timing of
                payment; and
                (iv) any agreement required to be identified under Rule 23(e)(3); and
         (D) the proposal treats class members equitably relative to each other.

  Fed. R. Civ. P. 23(e)(2). “The goal of this amendment is . . . to focus the court and the

  lawyers on the core concerns of procedure and substance that should guide the

  decision whether to approve the proposal.” Fed. R. Civ. P. 23(e)(2), advisory

  committee’s note to 2018 amendment.

         The Court determines that the settlement agreement is fair, reasonable, and

  adequate under the factors set forth in Rule 23(e)(2) and Rutter. The Court finds that

  the negotiations were conducted fairly and honestly. The settlement agreement was the

  product of arms-length negotiations between the parties. See Docket No. 89-1 at 10-

  11. The parties participated in an all-day, in-person mediation session before Mr.

  Meyer, and accepted Mr. Meyer’s formal mediator’s proposal that the case settle for

  $21,000,000. Id. There is no evidence that the settlement agreement was the result of

  a collusive agreement between the parties.


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         Furthermore, the Court finds that serious questions of law and fact exist placing

  the ultimate outcome of the litigation in doubt. The parties stipulate that, “[a]lthough

  Plaintiffs and Plaintiffs’ Counsel believe that the claims asserted are meritorious,

  continued litigation nonetheless posed significant risks to securing any recovery” given

  defendants’ previously filed motion to dismiss and defendants’ “significant defenses.”

  Docket No. 91 at 18, ¶¶ 35-37.

         Additionally, the Court finds that the value of an immediate recovery outweighs

  the possibility of future relief after protracted and expensive litigation. The proposed

  settlement amounts to between 9.4% and 63% of plaintiffs’ potential recovery at trial.

  Docket No. 89-1 at 13; Docket No. 91 at 19, ¶¶ 39-41. However, even a 9.4% recovery

  exceeds the median recovery in cases alleging violations of the Securities Exchange

  Act. Moreover, Gatos’ financial position casts doubt on the possibility of a larger

  recovery if plaintiffs were awarded more than $21,000,000 in damages at trial. Docket

  No. 89-1 at 13; Docket No. 91 at 19-20, ¶¶ 40, 42. Given the uncertainty of class

  members’ likelihood of success on the merits, Gatos’ financial position, and the

  prospects of protracted litigation, the Court finds that immediate recovery outweighs the

  time and costs inherent in prolonging this litigation.

         Furthermore, the parties believe that the settlement is fair and reasonable. Class

  counsel have extensive experience in securities actions, see Docket No. 91 at 31-32,

  ¶¶ 82-87, and state that the settlement agreement is “an outstanding result that

  provides the Settlement Class with a valuable, immediate recovery instead of the risk

  and uncertainty of years of further litigation.” Docket No. 89-1 at 5. At the fairness

  hearing, the parties agreed that the settlement is fair and reasonable.


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        Additionally, no class members objected to the settlement agreement. Docket

  No. 89-1 at 15; Docket No. 91-4 at 10, ¶ 27; see also Docket No. 96 at 1 (courtroom

  minutes noting that there were no objectors present at the fairness hearing). Moreover,

  no class members requested exclusion from the settlement. Docket No. 89-1 at 15;

  Docket No. 91-4 at 10, ¶ 27. The reaction of class members indicates that the relief is

  adequate and that class members support the settlement. Finally, the Court finds that

  the settlement treats class members equitably and the representative plaintiffs and

  class counsel have adequately represented the class.

        As a result, the Court finds that the settlement agreement is fair, reasonable, and

  adequate under the factors set forth in Rule 23(e)(2) and Rutter.

  IV. ATTORNEYS’ FEES, COSTS, AND SERVICE AWARDS

        The representative plaintiffs filed a motion for attorneys’ fees, costs, and service

  awards. Docket No. 90. Class counsel requests attorneys’ fees in the amount of

  $5,880,000, 28 percent of the settlement fund, as well as $226,314 in expenses.

  Docket No. 90-1 at 5, 16. The representative plaintiffs request a combined award of

  $15,000. Id. No class members objected to the request for attorneys’ fees, expenses,

  or service awards. Id. at 18; Docket No. 96 at 1.

        In a certified class action, the court may award reasonable attorneys’ fees and

  costs that are authorized by the parties’ agreement provided that (1) the claim for an

  award is made by a motion under Rule 54(d)(2) and notice of the motion is directed to

  class members; (2) a class member or party from whom payment is sought may object;

  and (3) the court finds facts and states its legal conclusions. Fed. R. Civ. P. 23(h). The

  notice provided to class members stated that class counsel would request an attorneys’


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  fee award not to exceed 28% of the settlement fund, costs not to exceed $325,000, and

  service awards of no more than $15,000 in aggregate. Docket No. 91-4 at 17.

         A. Attorneys’ Fees

         In common fund cases, the Tenth Circuit has “recognized the propriety of

  awarding attorneys’ fees . . . on a percentage of the fund, rather than lodestar, basis.”

  Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 853 (10th Cir. 1993);

  accord Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994) (holding that, although either

  method is permissible in common fund cases, “Uselton implies a preference for the

  percentage of the fund method”). Because this is a common fund case and because

  the fee request is for a percentage of the common fund, the Court will consider the

  attorneys’ fees award using the percentage of the fund approach. See Brown v. Phillips

  Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988) (distinguishing common fund and

  statutory fees cases); see also Paulson v. McKowen, No. 19-cv-02639-PAB-NYW, 2023

  WL 2528783, at *7 (D. Colo. Mar. 15, 2023).

         The “percentage reflected in a common fund award must be reasonable” and the

  court “must articulate specific reasons for fee awards.” Brown, 838 F.2d at 454 (citation

  and internal quotations omitted). In determining the reasonableness of a percentage

  award, courts apply the Johnson factors, which are:

         (1) the time and labor involved; (2) the novelty and difficulty of the questions; (3)
         the skill requisite to perform the legal service properly; (4) the preclusion of other
         employment by the attorney due to acceptance of the case; (5) the customary
         fee; (6) any prearranged fee - this is helpful but not determinative; (7) time
         limitations imposed by the client or the circumstances; (8) the amount involved
         and the results obtained; (9) the experience, reputation, and ability of the
         attorneys; (10) the undesirability of the case; (11) the nature and length of the
         professional relationship with the client; and (12) awards in similar cases.


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         Id. at 454-55 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717

  (5th Cir. 1974)); see also Gottlieb, 43 F.3d at 483. “[R]arely are all of the Johnson

  factors applicable; this is particularly so in a common fund situation.” Brown, 838 F.2d

  at 455-56 (“The court here clearly considered all of the relevant Johnson factors and

  applied them appropriately.”). Thus, in evaluating the reasonableness of a fee award, a

  court need not specifically address each Johnson factor. Gudenkauf v. Stauffer

  Commc’ns, Inc., 158 F.3d 1074, 1083 (10th Cir. 1998).

         Class counsel have significant experience in class action cases and securities

  litigation, as reflected in the information provided to the Court. See Docket No. 90-1 at

  13; Docket No. 91-7 at 20-47 (describing experience of the Wheeler Trigg O’Donnell

  LLP attorneys who worked on this case with regard to class action and securities

  litigation); Docket No. 91-8 at 13-14 (describing experience of The Schall Law Firm

  attorneys who worked on this case with regard to class action and securities litigation);

  Docket No. 91-9 at 3, ¶ 3 (describing Susan R. Podolsky’s experience with class actions

  and securities litigation). Class counsel additionally took this case on a contingency

  basis, see Docket No. 90-1 at 15, adding to the risk class counsel incurred by bringing

  the case. See In re Crocs, Inc. Secs. Litig., No. 07-cv-02351-PAB-KLM, 2014 WL

  4670886, at *4 (D. Colo. Sept. 18, 2015) (“A contingent fee arrangement often weighs in

  favor of a greater fee because such a large investment of money and time places

  incredible burdens upon law practices.” (internal alterations, quotations, and citation

  omitted)). A fee of one-third of the common fund is typical in complex cases. See id. at

  *3 (collecting cases). Class counsel’s fee request is 28 percent of the common fund.

  Docket No. 90-1 at 5. The Court finds that, under the Johnson factors, an award of 28


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  percent of the settlement fund in attorneys’ fees to class counsel is reasonable. 4

  Accordingly, the Court awards class counsel $5,880,000 in attorneys’ fees.

         B. Expenses

         Plaintiffs request $226,314 for litigation expenses. Id. at 18. Class counsel state

  that the expenses include fees related to consulting experts, an investigator, counsel for

  a former Gatos employee, mediation fees, legal research, service and filing fees, and

  transportation costs to attend mediation. Id.; see also Docket No. 91-6 at 7; Docket No.

  91-7 at 5, ¶ 11. This request is significantly below the maximum of $325,000 set out in

  the class notice. See Docket No. 91-4 at 17. The Court finds that these costs are

  reasonable and therefore awards class counsel $226,314 for litigation expenses.

         C. Incentive Award

         “Courts have recognized that an award may be appropriate to provide an

  incentive to act as a named plaintiff.” Chieftain Royalty Co. v. Enervest Energy

  Institutional Fund XIII-A, L.P., 888 F.3d 455, 467 (10th Cir. 2017). Additionally, “courts

  regularly give incentive awards to compensate named plaintiffs for the work they

  performed—their time and effort invested in the case.” Id. at 468 (collecting cases); see

  also 15 U.S.C. § 78u-4(a)(4) (permitting an award to a representative party serving on

  behalf of a class that is directly related to the representation of the class). Plaintiffs


         4 Furthermore, class counsel represent that, under the lodestar method, they

  would have incurred $1,853,045 in attorneys’ fees. Docket No. 90-1 at 16. A fee award
  of $5,880,000 is equal to the loadstar with a 3.17 multiplier. Id. Courts have awarded
  fees equivalent to the loadstar with multipliers ranging from 0.8 to 4.6. Mishkin v.
  Zynex, Inc., No. 09-cv-00780-REB-KLM, 2012 WL 4069295, at *2 (D. Colo. Sep. 14,
  2012) (awarding a fee equivalent to the loadstar with a 0.8 multiplier and collecting
  cases approving multipliers ranging from 2.5 to 4.6). The Court finds that the loadstar
  cross-check weighs in favor of the reasonableness of the award.
                                                15


Case No. 1:22-cv-00453-PAB-KAS Document 97 filed 10/15/24 USDC Colorado pg 16 of
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  request an award of $10,000 for Mr. Betz and $5,000 for Mr. Sweidan. Docket No. 90-1

  at 19. Plaintiffs state that these awards “reflect the time that [the representative

  plaintiffs] devoted to overseeing this Action.” Id. Mr. Betz spent 64 hours and Mr.

  Sweidan spent 20 hours overseeing the litigation, which included conferring with class

  counsel and reviewing pleadings, motions, and other filings. Id. In addition, Mr. Betz

  participated in the mediation. Id. The Court finds that the service awards are fair and

  reasonable based on the representative plaintiffs’ involvement in this case. As a result,

  the Court awards Mr. Betz a service award of $10,000 and Mr. Sweidan a service award

  of $5,000.

  VII. CONCLUSION

         Therefore, it is

         ORDERED that Plaintiffs’ Motion for Final Approval of the Settlement and

  Approval of the Plan of Allocation [Docket No. 89] is GRANTED. It is further

         ORDERED that Lead Counsel and WTO’s Motion for Awards of Attorneys’ Fees,

  Litigation Expenses, and Reasonable Costs and Expenses to Plaintiffs [Docket No. 90]

  is GRANTED. It is further

         ORDERED that, pursuant to Rule 23(b)(3) of the Federal Rules of Civil

  Procedure, and for the purposes of settlement only, the settlement class is certified as

  follows:

         All Persons and entities who, in domestic transactions or on the NYSE,
         purchased or otherwise acquired Gatos common stock pursuant or
         traceable to the 2020 Registration Statement or the 2021 Registration
         Statement, and were damaged thereby; all Persons and entities who
         purchased or otherwise acquired Gatos common stock listed on the
         NYSE, from December 9, 2020 through January 25, 2022, both inclusive,
         and were damaged thereby; all Persons and entities who, in domestic
         transactions, purchased or otherwise acquired publicly traded call options

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Case No. 1:22-cv-00453-PAB-KAS Document 97 filed 10/15/24 USDC Colorado pg 17 of
                                     19


          on Gatos common stock, from December 9, 2020 through January 25,
          2022, both inclusive, and were damaged thereby; and/or all Persons and
          entities who, in domestic transactions, sold publicly traded put options on
          Gatos common stock, from December 9, 2020 through January 25, 2022,
          both inclusive, and were damaged thereby. Excluded from the Settlement
          Class are Defendants, the current and Class Period officers and directors
          of the Company, the members of the immediate families and the legal
          representatives, affiliates, heirs, successors-in-interest, or assigns of any
          such excluded person, any entity in which such excluded persons have or
          had a majority interest, and the Electrum Group, LLC; provided, however,
          that any “Investment Vehicle” shall not be excluded from the Settlement
          Class.

  It is further

          ORDERED that that the Court finds, solely for the purposes of this settlement,

  that the prerequisites for a class action under Rules 23(a) and (b)(3) of the Federal

  Rules of Civil Procedure have been satisfied in that: (a) the members of the settlement

  class are so numerous that joinder of all members is impracticable; (b) there are

  questions of law and fact common to the class; (c) the claims of the named plaintiffs are

  typical of the claims of the class; (d) the named plaintiffs and plaintiffs’ counsel have

  fairly and adequately represented and protected the interests of all of the class

  members; and (e) questions of law or fact predominate over any questions affecting

  only individual members and a class action is superior to other available methods for

  fairly and efficiently adjudicating the controversy. It is further

           ORDERED that the Court finds that the notice given to members of the class

  was the best notice practicable under the circumstances, was reasonably calculated

  under the circumstances to apprise such members of the pendency of this action and to

  afford them an opportunity to object to, and meets the requirements of Rule 23 (c)(2)(B)

  and (e)(1). Because the Court has afforded a full opportunity to all class members to be


                                                17


Case No. 1:22-cv-00453-PAB-KAS Document 97 filed 10/15/24 USDC Colorado pg 18 of
                                     19


  heard, the Court further determines that all members of the class are bound by the

  settlement agreement. It is further

         ORDERED that, pursuant to Rule 23(e)(2) of the Federal Rules of Civil

  Procedure, this Court finds that the settlement agreement is fair, reasonable, and

  adequate. Accordingly, the Court gives final approval to the settlement agreement in all

  respects and authorizes and directs the parties to consummate the settlement

  agreement in accordance with its terms and provisions. It is further

         ORDERED that plaintiffs shall file the settlement agreement as a separate docket

  entry within ten days of the entry of this order. It is further

         ORDERED that the representative plaintiffs and all class members are

  permanently enjoined and barred from asserting, initiating, prosecuting, or continuing

  any of the claims released by the settlement agreement. It is further

         ORDERED that class counsel is awarded $5,880,000 from the settlement fund,

  which represents twenty eight percent of the net settlement fund. It is further

         ORDERED that lead plaintiff Bard Betz is awarded a service award of $10,000

  from the settlement fund. It is further

         ORDERED that plaintiff Jude Sweidan is awarded a service award of $5,000

  from the settlement fund. It is further

         ORDERED that class counsel shall be reimbursed $226,314 for litigation

  expenses from the settlement fund. It is further

         ORDERED that neither this order nor the settlement agreement is an admission

  or concession by defendants respecting any facts, liabilities, or wrongdoing. It is further


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Case No. 1:22-cv-00453-PAB-KAS Document 97 filed 10/15/24 USDC Colorado pg 19 of
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         ORDERED that, without affecting the finality of this order, this Court retains

  jurisdiction to consider all further matters arising out of or connected with the settlement

  agreement, including its implementation. It is further

         ORDERED that judgment shall be entered dismissing this case with prejudice.


         DATED October 15, 2024.
                                            BY THE COURT:

                                            ___________________________
                                            PHILIP A. BRIMMER
                                            Chief United States District Judge


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