Leon D. Milbeck vs. TrueCar, Inc., et al., No. 2:18-CV-02612 (SVW-AGR) (C.D. Cal.)
The Court directed that the Notice be mailed to you because you, someone in your family, or an investment account for which you serve as a custodian may have purchased or otherwise acquired TrueCar common stock during the Settlement Class Period. The Court has directed us to send you the Notice because, as a potential Settlement Class Member, you have a right to know about your options before the Court rules on the Settlement. Additionally, you have the right to understand how this class action lawsuit may generally affect your legal rights.
The purpose of the Notice is to inform you of the existence of this case, that it is a class action, how you might be affected, and how to exclude yourself from the Settlement Class if you wish to do so. It is also being sent to inform you of the terms of the Settlement, and of a hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement, the Plan of Allocation, and the motion by Lead Counsel for an award of attorneys’ fees and reimbursement of Litigation Expenses (the “Settlement Hearing”). See FAQ 17 for details about the Settlement Hearing, including the date and location of the hearing.
Note that at the January 27, 2020 Settlement Fairness Hearing, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here.Back To Top
On March 30, 2018, this Action was commenced in the United States District Court for the Central District of California, styled Leon D. Milbeck vs. TrueCar, Inc., et.al., Case No. 2:18-cv-02612-SVW-AGR (C.D. Cal.), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
By Order dated June 27, 2018, the Court appointed Oklahoma Police Pension and Retirement Fund as Lead Plaintiff and approved Lead Plaintiff’s selection of Saxena White P.A. as Lead Counsel for the class.
On August 24, 2018, Lead Plaintiff filed its Amended Class Action Complaint (the “Amended Complaint”), on behalf of the Settlement Class, adding claims based on TrueCar’s April 26, 2017 secondary offering for violations of Section 11, Section 12(a) and Section 15 of the Securities Act of 1933. The Amended Complaint alleges, among other things, that throughout the Settlement Class Period, Defendants misrepresented TrueCar’s business and failed to disclose to investors that TrueCar’s most important and largest “affinity” partner, USAA, had informed the Company that it planned to significantly redesign its car-buying website by requiring members to answer intrusive personal finance questions before gaining access to the TrueCar website. This change would discourage members from proceeding to the TrueCar website, significantly decreasing web traffic and ultimately negatively impacting TrueCar’s financial results. The Amended Complaint further alleges that TrueCar’s stock price was artificially inflated as a result of Defendants’ false and misleading statements, and that TrueCar’s stock price declined when the truth regarding Defendants’ alleged misrepresentations was revealed.
On October 2, 2018, the Court held a Status Conference during which the Court, after hearing the facts of the case from all parties, set a trial date of August 6, 2019.
On November 5, 2018, Defendants filed their motion to dismiss the Amended Complaint. On December 20, 2018, Lead Plaintiff filed its opposition, and, on January 31, 2019, Defendants filed their reply. On February 5, 2019, the Parties held their first mediation session before the Honorable Gary A. Feess, which concluded with the Parties at an impasse. On the same day, the Court entered an Order denying Defendants’ motion to dismiss in its entirety, finding that the Amended Complaint adequately alleged that Defendants made materially false and misleading statements regarding the risk that USAA’s web redesign would negatively impact traffic on TrueCar’s site. The Court also held that Plaintiff alleged a strong inference of scienter by alleging that Defendants knew, and did not alert the investing public, about USAA’s web redesign and its impact as of January 2017. Defendants filed their Answer to the Amended Complaint on February 19, 2019.
Following the Court’s Order denying Defendants’ motion to dismiss the Amended Complaint, the Parties commenced discovery, propounding document requests. Once discovery requests were propounded, the Parties reviewed the requests and met and conferred on the scope of the responses and productions. Defendants began their rolling production of documents on March 21, 2019. Discovery was conducted over a period of approximately three months. In total, Defendants produced approximately 3.5 million pages of documents. Lead Plaintiff began their production on March 22, 2019. In total, Lead Plaintiff produced over 3,500 pages of documents. The Parties also obtained approximately 78,000 pages of documents from third parties. In addition, Lead Plaintiff was preparing for taking 24 fact witness depositions.
While discovery was underway, Lead Plaintiff filed a Motion for Class Certification on March 8, 2019. On April 3, 2019, Defendants took the deposition of the Executive Director of Lead Plaintiff in Chicago, Illinois. On April 4, 2019, Defendants took the deposition of Lead Plaintiff’s investment manager, and on April 8, 2019, Defendants took the deposition of Lead Plaintiff’s expert on market efficiency, both of which also took place in Chicago, Illinois. Defendants filed their Opposition to the Motion for Class Certification on April 17, 2019. The Court granted the motion by orders dated May 9, 2019 and May 24, 2019.
On June 5, 2019, the Parties and certain of Defendants’ directors’ and officers’ liability insurance carriers participated in a mediation session before nationally recognized mediator Jed Melnick, Esq. During the mediation session, the Parties provided their respective views on liability and damages. The mediation session ended without any agreement to resolve the Action being reached. Thereafter, the Parties continued to negotiate with each other and with Mr. Melnick, culminating in a mediator’s proposal to settle the Action for a cash payment of $28,250,000.00 for the benefit of the Settlement Class, subject to the execution of a customary stipulation and Court approval, which the Parties accepted on July 2, 2019.
Based on their investigation, discovery, prosecution and mediation of the case, Lead Plaintiff and Lead Counsel have concluded that the terms and conditions of the Stipulation are fair, reasonable and adequate to Lead Plaintiff and the other members of the Settlement Class, and in their best interests. Based on Lead Plaintiff’s oversight of the prosecution of this matter and with the advice of its counsel, Lead Plaintiff has agreed to settle and release the claims raised in the Action pursuant to the terms and provisions of the Stipulation, after considering, among other things, (a) the substantial financial benefit that Lead Plaintiff and the other members of the Settlement Class will receive under the Settlement; (b) the significant risks and costs of continued litigation and trial; and (c) the desirability of permitting the Settlement to be consummated as provided by the terms of the Stipulation.
The Stipulation and the Settlement constitute a compromise of matters that are in dispute among the Parties. Defendants have entered into the Stipulation solely to eliminate the uncertainty, distraction, time, burden and expense of further protracted litigation. Each of the Defendants denies any wrongdoing, and the Settlement and Stipulation shall in no event be construed or deemed to be evidence of or an admission or concession on the part of any of the Defendants with respect to any claim or allegation of any fault, liability, wrongdoing, or damage whatsoever, or any infirmity in the defenses that the Defendants have, or could have, asserted. Defendants expressly deny that Lead Plaintiff has asserted any valid claims as to any of them, and expressly deny any and all allegations of fault, liability, wrongdoing, or damages whatsoever. The Stipulation and the Settlement also shall in no event be construed or deemed to be evidence of or an admission or concession on the part of any Lead Plaintiff of an infirmity in any of the claims asserted in the Action, or an admission or concession that any of the Defendants’ defenses to liability had any merit.
On October 15, 2019, the Court preliminarily approved the Settlement, authorized the Notice to be disseminated to potential Settlement Class Members, and scheduled the Settlement Hearing to consider, among other things, whether to grant final approval to the Settlement.
On January 27, 2020, at the Settlement Fairness Hearing, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here.Back To Top
Classes are generally used in lawsuits that affect a large number of individuals. A class action consolidates into a single action all of the claims of individuals allegedly harmed by the same conduct or course of conduct in the same period of time, thus removing the need for members of the class to file their own individual lawsuits to separately seek to recover for the harm alleged. Once the class is certified, the Court resolves all issues on behalf of members of the class, except for those class members, if any, who specifically choose to exclude themselves from the class.Back To Top
If you are a member of the Settlement Class, you are subject to the Settlement, unless you timely requested to be excluded. The Settlement Class means the class certified in the Court’s orders dated May 9, 2019 and May 24, 2019 and consists of:
All persons and entities who purchased or otherwise acquired (1) the publicly traded TrueCar common stock of TrueCar, Inc. from February 16, 2017 through November 6, 2017, inclusive, or (2) the common stock of TrueCar pursuant and/or traceable to the secondary offering of TrueCar common stock conducted on or about April 26, 2017 and were damaged thereby.
Excluded from the Settlement Class are Defendants, the Officers and Directors of TrueCar at all relevant times, and all such excluded persons’ Immediate Family members, legal representatives, heirs, agents, affiliates, predecessors, successors and assigns, and any entity in which any excluded person has or had a controlling interest. Also excluded from the Settlement Class are those persons who filed valid and timely requests for exclusion in accordance with the Preliminary Approval Order. See FAQ 15.
PLEASE NOTE: RECEIPT OF THE NOTICE DOES NOT MEAN THAT YOU ARE A SETTLEMENT CLASS MEMBER OR THAT YOU WILL BE ENTITLED TO RECEIVE PROCEEDS FROM THE SETTLEMENT. IF YOU ARE A SETTLEMENT CLASS MEMBER AND YOU WISH TO BE POTENTIALLY ELIGIBLE TO PARTICIPATE IN THE DISTRIBUTION OF PROCEEDS FROM THE SETTLEMENT, YOU WERE REQUIRED TO SUBMIT THE CLAIM FORM THAT WAS DISTRIBUTED WITH THE NOTICE AND THE REQUIRED SUPPORTING DOCUMENTATION AS SET FORTH THEREIN POSTMARKED NO LATER THAN MARCH 4, 2020.Back To Top
Yes. Only Settlement Class Members, i.e., persons and entities who purchased or otherwise acquired TrueCar common stock during the Settlement Class Period and were damaged as a result of such purchases or acquisitions, will be potentially eligible to share in the distribution of the Net Settlement Fund. Persons and entities that are excluded from the Settlement Class by definition (see FAQ 4) or that excluded themselves from the Settlement Class pursuant to request will not be eligible to receive a distribution from the Net Settlement Fund and should not submit Claim Forms. The only security that is included in the Settlement is TrueCar common stock.Back To Top
If you are still not sure whether you are included, you can ask for free help. You can contact the Claims Administrator toll-free at 1-877-327-1184 or at info@TrueCarSecuritiesSettlement.com, for more information.Back To Top
Subject to Court approval, Lead Plaintiff, on behalf of itself and the Settlement Class, has agreed to settle the Action in exchange for a settlement payment of $28,250,000.00 in cash (the “Settlement Amount”) to be deposited into an escrow account. The Net Settlement Fund (i.e., the Settlement Amount plus any and all interest earned thereon (the “Settlement Fund”) less (a) any Taxes and Tax Expenses, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys’ fees awarded by the Court) will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class.Back To Top
Lead Plaintiff and Lead Counsel believe that the claims asserted against Defendants have merit. They recognize, however, the expense and length of continued proceedings necessary to pursue their claims against Defendants through further motion practice, trial and appeals, as well as the very substantial risks they would face in establishing liability and damages. Lead Plaintiff and Lead Counsel recognized that Defendants had numerous avenues of attack that could preclude a recovery. For example, among other things, Defendants would assert that the statements were not materially false and misleading, and that even if they were, they were not made with the requisite state of mind to support the securities fraud claim alleged. Even if the hurdles to establishing liability were overcome, the amount of damages that could be attributed to the allegedly false statements would be hotly contested. Lead Plaintiff would have to prevail at several stages – including, without limitation, motions for summary judgment, trial, and if they prevailed on those, on the appeals that were likely to follow. Thus, there were very significant risks attendant to the continued prosecution of the Action.
In light of these risks, the amount of the Settlement, and the immediacy of recovery to the Settlement Class, Lead Plaintiff and Lead Counsel believe that the Settlement is fair, reasonable and adequate, and in the best interests of the Settlement Class. Lead Plaintiff and Lead Counsel believe that the Settlement provides a substantial benefit to the Settlement Class, namely $28,250,000.00 in cash (less the various deductions described in the Notice), as compared to the risk that the claims in the Action would produce a smaller, or no, recovery after summary judgment, trial and appeals, possibly years in the future.
Defendants have denied each and all the claims and contentions asserted against them in the Action and deny having engaged in any wrongdoing or violation of law of any kind whatsoever. Defendants have agreed to the Settlement solely to eliminate the burden and expense of continued litigation. Accordingly, the Settlement may not be construed as an admission of any wrongdoing by Defendants.Back To Top
If there were no Settlement and Lead Plaintiff failed to establish any essential legal or factual element of their claims against Defendants, neither Lead Plaintiff nor the other members of the Settlement Class would recover anything from Defendants. Also, if Defendants were successful in proving any of their defenses, either at summary judgment, at trial or on appeal, the Settlement Class could recover substantially less than the amount provided in the Settlement, or nothing at all.Back To Top
As a Settlement Class Member, you are represented by Lead Plaintiff and Lead Counsel, unless you enter an appearance through counsel of your own choice at your own expense. You are not required to retain your own counsel, but if you choose to do so, such counsel must file a notice of appearance on your behalf and must serve copies of his or her appearance on the attorneys listed in FAQ 19.
If you are a Settlement Class Member and do not wish to remain a Settlement Class Member, you could have excluded yourself from the Settlement Class by following the instructions in FAQ 15.
If you are a Settlement Class Member and you wish to object to the Settlement, the Plan of Allocation, or Lead Counsel’s application for attorneys’ fees and reimbursement of Litigation Expenses, and if you did not exclude yourself from the Settlement Class, you had the opportunity to present your objections. Note that objections must have been filed by January 6, 2020.
If you are a Settlement Class Member and you did not exclude yourself from the Settlement Class, you will be bound by any orders issued by the Court. Note that at the January 27, 2020 Settlement Fairness Hearing, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here.Back To Top
To be potentially eligible for a payment from the proceeds of the Settlement, you must be a member of the Settlement Class and you must have timely completed and returned the Claim Form with adequate supporting documentation postmarked no later than March 4, 2020. A Claim Form was included with the Notice. Please retain all records of your ownership of and transactions in TrueCar common stock, as they may be needed to document your Claim. If you requested exclusion from the Settlement Class or did not submit a timely and valid Claim Form, you will not be eligible to share in the Net Settlement Fund.Back To Top
The Court held a hearing on January 27, 2020 at 1:30 p.m. to decide whether to approve the Settlement. Here, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here. The Claims Administrator will complete the administration process and determine how much each Authorized Claimant is entitled to receive. Lead Counsel will then seek permission from the Court to distribute the Settlement Amount on a pro rata basis to Authorized Claimants. This may take several months.
The $28,250,000.00 Settlement Amount and the interest earned thereon, while it is held in escrow before distribution, is referred to as the “Settlement Fund.” If you are entitled to a payment, your share of the Settlement Fund will depend on the number of members of the Settlement Class who submit valid Claim Forms (the “Authorized Claimants”). Payments will be calculated on a pro rata basis, meaning that the Settlement Fund (less all administrative costs, including the costs of notice, attorneys’ fees, and expenses) will be divided among the Authorized Claimants and distributed accordingly after the deadline for submission of Claim Forms has passed.
Your share of the Net Settlement Fund will depend on the number of shares (represented by valid and acceptable Claim Forms) that members of the Settlement Class submit to the Claims Administrator, relative to the Net Settlement Fund, how many shares you purchased or acquired and when you purchased or acquired them, whether you held or sold those shares, the date on which you sold those shares, and the price at which you sold them, among other factors. At this time, it is not possible to determine how much individual Settlement Class Members may receive from the Settlement.
A payment to any Authorized Claimant that would amount to less than $10.00 in total will not be included in the calculation of the Net Settlement Fund, and no payment to those members of the Settlement Class will be made.
For each Authorized Claimant, a Recognized Claim will be calculated. A Claimant’s Recognized Claim will be the sum of his, her, or its Recognized Loss Amounts as calculated pursuant to the formula provided in the Notice with respect to TrueCar common stock. The calculation of a Recognized Claim, as defined in the Plan of Allocation in the Notice, is not intended to be an estimate of, nor does it indicate, the amount that a Settlement Class Member might have been able to recover after a trial. Nor are the calculations pursuant to the Plan of Allocation intended to be estimates of the amounts that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Loss Amount formula provides the basis for proportionately allocating the Net Settlement Fund to Authorized Claimants. That computation is only a method to weigh Settlement Class Members’ Claims against one another. Each Authorized Claimant will receive a pro rata share of the Net Settlement Fund based on his, her, or its Recognized Claim.Back To Top
It is not possible at this time to determine when the Settlement proceeds will be distributed to eligible Settlement Class Members.
The Court held the Settlement Fairness Hearing on January 27, 2020 to decide whether to approve the Settlement. Here, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here.
Your share of the Net Settlement Fund will depend on the overall number of valid claims that Settlement Class Members send in, the amount due under those claims, how many shares of TrueCar common stock you purchased and sold during the Settlement Class Period, and when you bought and sold such shares. All calculations and determinations will be made by the Claims Administrator under the supervision of Lead Plaintiff’s Counsel. Defendants have no role or responsibility in making any claim determinations.Back To Top
The Court determined the amount of any award of attorneys’ fees or reimbursement of Litigation Expenses. Such sums as approved by the Court will be paid from the Settlement Fund. Settlement Class Members are not personally liable for any such fees or expenses.
At the January 27, 2020 Settlement Fairness Hearing, the Court entered an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses; this Order is available here.Back To Top
The deadline to exclude yourself has passed. All requests for exclusion must have been received no later than January 6, 2020.Back To Top
No. If you asked to be excluded from the Settlement Class, you will not be eligible to receive any payment out of the Net Settlement Fund. Please note that the Deadline to Exclude yourself from the Settlement Class was January 6, 2020.Back To Top
The Settlement Hearing was held on January 27, 2020 at 1:30 p.m., before the Honorable Stephen V. Wilson at the United States District Court for the Central District of California, First Street Courthouse, Courtroom 10A, 350 W. 1st Street, 10th Floor, Los Angeles, California 90012. Here, the Court approved the Settlement and noted that an order would be entered. See Minutes. Additionally, the Court approved an Order Awarding Attorneys’ Fees and Reimbursement of Litigation Expenses and an Order Approving Plan of Allocation; these Orders are available here.Back To Top
Settlement Class Members did not need to attend the Settlement Hearing. The Court considered any submission made even if a Settlement Class Member did not attend the hearing. You can participate in the Settlement without having attended the Settlement Hearing.Back To Top
The Settlement Hearing occurred on January 27, 2020. Settlement Class Members who did not request exclusion had an opportunity to file an objection, which must have been received by January 6, 2020.Back To Top
Objecting is simply telling the Court that you do not like something about the Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class and do not want to seek a payment from the Settlement Fund. If you exclude yourself, you have no basis to object because the case no longer affects you. Note that the deadline to exclude yourself and/or object was January 6, 2020.Back To Top
If you are a member of the Settlement Class and you did not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Settlement Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.Back To Top
The Notice contains only a summary of the terms of the Settlement. For more detailed information about the matters involved in this Action, you are referred to the papers on file in the Action, including the Stipulation, which are available by accessing the Court docket in this case, for a fee, through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cacd.uscourts.gov, or by visiting the Office of the Clerk, United States District Court for the Central District of California, United States Courthouse, 312 North Spring Street, Room G-8, Los Angeles, CA 90012 which may be inspected during regular office hours. Additionally, copies of the Stipulation and any related orders entered by the Court will be posted here.
Inquiries, other than requests for the Notice and Claim Form, should be directed to:
SAXENA WHITE P.A.
Lester R. Hooker, Esq.
7777 Glades Road
Boca Raton, FL 33434
TrueCar Securities Litigation
P.O. Box 3410
Portland, OR 97208-3410
DO NOT CALL OR WRITE THE COURT, THE OFFICE OF THE CLERK OF THE COURT, DEFENDANTS, OR THEIR COUNSEL REGARDING THE NOTICE.Back To Top