|1.||Why did I get the Settlement Notice?|
The Court authorized that a Settlement Notice be sent to you because you or someone in your family may have purchased or acquired the publicly traded common stock of Intuitive from February 6, 2012 through July 18, 2013, inclusive.
If this description applies to you or someone in your family, you have a right to know about the proposed Settlement of this class action lawsuit, and about all of your options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement, and after any objections and appeals are resolved, an administrator appointed by the Court will make the payments that the Settlement allows.
This Settlement Notice explains the lawsuit, the Settlement, Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.
The Court in charge of this Action is the United States District Court for the Northern District of California, and the case is known as In re Intuitive Surgical Securities Litigation, Civil Action No. 5:13-cv-01920-EJD (N.D. Cal.). The Action is assigned to the Honorable Edward J. Davila, United States District Judge.
The Court did not decide in favor of either Class Representatives or Defendants. Instead, they have agreed to a settlement. For Class Representatives, the principal reason for the Settlement is the certain benefit of a substantial cash recovery for the Class, in contrast to the risk that the Court may grant, in whole or in part, some or all of Defendants’ pending motion for summary judgment, the uncertainty of being able to prove the allegations at a jury trial, and the difficulties and delays inherent in such litigation (including any appeals).
For Defendants, who deny all allegations of wrongdoing or liability whatsoever and deny that any Class Members were damaged, the principal reason for entering into the Settlement is to bring to an end the substantial burden, expense, uncertainty, and risk of further litigation.
|2.||What is this lawsuit about? What has happened so far?|
Class Representatives allege that Intuitive and certain of its executives violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) by making materially false and misleading statements regarding the safety and efficacy of the da Vinci Surgical System and Intuitive’s compliance with FDA regulations. Class Representatives also allege that Defendants violated Section 20(A) of the Exchange Act by profiting from the sale of Intuitive stock while in possession of material nonpublic information. Among other things, Class Representatives allege that Defendants failed to disclose information about the safety and efficacy of the da Vinci Surgical System. Class Representatives further allege that when news of the safety and regulatory issues was released to the public, the price of Intuitive common stock declined and Class Members suffered damages as a result.
Defendants deny all of Class Representatives allegations and further deny that they did anything wrong. Defendants also deny that Class Representatives or the Class suffered damages or that the price of Intuitive common stock was artificially inflated by reasons of alleged misrepresentations, nondisclosures or otherwise.
The Action was commenced on April 26, 2013. On November 18, 2013, the Court issued an Order appointing Hawaii ERS as lead plaintiff pursuant to the PSLRA. In the same Order, the Court approved lead plaintiff’s selection of Labaton Sucharow LLP as lead counsel.
On October 15, 2013, Hawaii ERS and named-plaintiff Greater Pennsylvania filed the Amended Class Action Complaint (the “Complaint”). On December 16, 2013, Defendants filed their motion to dismiss the Complaint, which triggered a stay of discovery under the PSLRA. On January 30, 2014, Plaintiffs filed their memorandum of law in opposition to the motion to dismiss and, on February 28, 2014, Defendants filed their reply papers. On August 21, 2014, the Court entered an Order that granted in part, and denied in part, Defendants’ motion to dismiss. On October 14, 2014, Defendants filed a motion for leave to file a motion for reconsideration. On October 22, 2014, the Court granted the motion and on November 5, 2014, Defendants filed their motion for reconsideration. Plaintiffs opposed the motion on November 19, 2014, and Defendants filed a reply on November 26, 2014. The Court denied the motion for reconsideration on December 15, 2014, and lifted the PSLRA discovery stay.
On September 1, 2015, Plaintiffs filed a motion for class certification. On December 23, 2016, following briefing on the motion and oral argument, the Court entered an Order granting the class certification motion, certifying the Class as defined below, appointing Plaintiffs as “Class Representatives,” and appointing lead counsel as “Class Counsel.” On January 5, 2017, Defendants filed, in the United States Court of Appeals for the Ninth Circuit, a Petition Pursuant to F.R.C.P. 23(f) for Permission to Appeal the District Court’s Order Granting Class Certification. On October 30, 2017, the Ninth Circuit denied the petition. Defendants’ motion for reconsideration was denied by Order dated November 22, 2017.
On January 26, 2017, Class Representatives filed a Second Amended Class Action Complaint (“Second Amended Complaint”) to conform the pleadings to the evidence. On February 9, 2017, Defendants moved to dismiss the Second Amended Complaint and discovery was stayed pursuant to the PSLRA. Class Representatives opposed Defendants’ motion on February 23, 2017, and Defendants filed reply papers on March 2, 2017. The Court denied the motion to dismiss the Second Amended Complaint on September 29, 2017, and discovery resumed.
By Order entered March 12, 2018, the Court granted Class Representatives’ motion, pursuant to Rule 23 of the Federal Rules of Civil Procedure, for approval of the proposed form and content of notices of pendency to be disseminated to the Class. Beginning on April 9, 2018, the Class Notice was mailed to potential Class Members, and on April 23, 2018, the Summary Notice of Pendency of Class Action was published in Investor’s Business Daily and transmitted over PR Newswire. The Class Notice informed investors of the class action, their right to be excluded from the Class, the requirements for requesting exclusion, and of a June 8, 2018 deadline for seeking exclusion.
On February 9, 2018, Defendants moved for summary judgment. Class Representatives filed their opposition papers on March 23, 2018, and, on April 23, 2018, Defendants filed their reply papers. The motion was pending when the Parties agreed to a settlement in principle. Trial of the Action was scheduled by the Court to begin on October 30, 2018.
Class Representatives, through Class Counsel, have conducted a thorough investigation of the claims, defenses, and underlying events and transactions that are the subjects of the Action. This process included reviewing and analyzing: (i) documents filed publicly by the Company with the U.S. Securities and Exchange Commission; (ii) publicly available information, including press releases, news articles, and other public statements issued by or concerning the Company and the Defendants; (iii) research reports issued by financial analysts concerning the Company; (iv) other publicly available information and data concerning the Company; (v) approximately 525,651 pages of documents produced by Defendants during discovery and approximately 28,726 pages of documents produced by third-parties; and (vi) the applicable law governing the claims and potential defenses.
Counsel for Class Representatives and Defendants have also completed voluminous class, fact and expert discovery that included: taking or defending approximately 24 depositions, including the depositions of Class Representatives, the Individual Defendants, and 6 experts; and exchanging 13 expert reports directed at Intuitive’s compliance with FDA regulations, Defendants’ insider trading, loss causation, and damages.
On June 6, 2018, following extensive arm’s-length negotiations, the Parties reached an agreement in principle to settle the Action for $42,500,000, subject to the execution of formal settlement documents.
|3.||How do I know if I am part of the Class?|
The Court has certified the following Class, subject to certain exceptions identified below:
All persons or entities who purchased or acquired the publicly traded common stock of Intuitive Surgical, Inc. during the period from February 6, 2012 through July 18, 2013, inclusive, and who were damaged thereby.
Check your investment records or contact your broker to see if you purchased or acquired the publicly traded common stock of Intuitive during the period from February 6, 2012 through July 18, 2013, inclusive.
|4.||Are there exceptions to being included?|
Yes. Some people are excluded from the Class by definition. Excluded from the Class are: (i) all Defendants; (ii) members of the immediate families of Individual Defendants Guthart, Mohr, and Smith; (iii) any subsidiaries and affiliates of Defendants; (iv) any person who is or was an officer or director of Intuitive or any of Intuitive’s subsidiaries or affiliates; (v) Defendants’ directors’ and officers’ liability insurance carriers, and any affiliates or subsidiaries thereof; (vi) Intuitive’s employee retirement and benefit plan(s); and (vii) the legal representatives, heirs, successors and assigns of any such excluded person or entity.
Also excluded from the Class are Class Members who submitted timely and valid requests for exclusion in connection with the previously mailed Class Notice and Class Members who submit timely and valid requests for exclusion from the Class in accordance with the procedures set forth in Question 8 below.
|5.||What if I am still not sure if I am included?|
If you are still not sure whether you are included in the Class, you can ask for free help. You can call the Claims Administrator toll-free at (844) 850-7746, send an e-mail to the Claims Administrator at firstname.lastname@example.org, or write to the Claims Administrator, In re Intuitive Surgical Securities Litigation, c/o GCG, P.O. Box 10359, Dublin, OH 43017-0359. Or you can fill out and return the Claim Form described in Question 6 to see if you qualify.
|6.||How can I receive a payment?|
To qualify for a payment, you must submit a timely and valid Claim Form. A Claim Form is included with the Settlement Notice. If you did not receive a Claim Form, you can obtain one by clicking here. You can also ask for a Claim Form by calling the Claims Administrator toll-free at (844) 850-7746.
Please read the instructions carefully, fill out the Claim Form, include all the documents the form requests, sign it, and mail or submit it to the Claims Administrator so that it is postmarked or electronically submitted online no later than December 6, 2018.
|7.||What am I giving up to receive a payment or stay in the Class?|
Unless you exclude yourself, or previously excluded yourself, you are staying in the Class, and that means that upon the “Effective Date,” you will release all “Released Claims,” including “Unknown Claims,” as defined below, against the “Released Defendant Parties.”
“Released Claims” means all actions, suits, claims, demands, rights, liabilities, damages, costs, restitution, rescission, interest, attorneys’ fees, expert or consulting fees, expenses, matters and issues known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or unmatured, accrued or unaccrued, apparent or unapparent, whether concealed or hidden, and causes of action of every nature and description, including both known claims and Unknown Claims, whether based on federal, state, local, foreign, statutory or common law or any other law, rule or regulation, including claims under the Securities Act of 1933 or the Securities Exchange Act of 1934 or the securities laws of any state or territory, that have been or that might have been asserted by any Releasing Plaintiff Party against any of the Released Defendant Parties, arising out of, relating to, based upon, or in connection with: (a) any purchase, acquisition, sale, or holding of Intuitive publicly traded common stock during the Class Period and (b) any facts, claims, matters, allegations, activities, transactions, events, disclosures, representations, statements, acts, or omissions or failures to act that were alleged, set forth, referred to, or that could have been alleged in the Action, in the Second Amended Complaint, or in any complaint, against the Released Defendant Parties. Released Claims does not include claims relating to the enforcement of the Settlement.
“Released Defendant Party” or “Released Defendant Parties” means Defendants, and each of their respective past or present parents, subsidiaries, divisions, affiliates, stockholders, officers, directors, insurers, employees, agents, attorneys, general or limited partners, partnerships, limited liability companies, predecessors, successors, assigns, heirs, trustees, administrators, and any of their legal representatives (and the predecessors, heirs, executors, administrators, trustees, successors, immediate family members, purchasers, and assigns of each of the foregoing), in their capacities as such.
“Unknown Claims” means any and all Released Claims that Class Representatives or any other Class Member does not know or suspect to exist in his, her, or its favor at the time of the release of the Released Defendant Parties, and any and all Released Defendants’ Claims that any Defendant does not know or suspect to exist in his, her, or its favor at the time of the release of the Released Plaintiff Parties, which if known by him, her, or it might have affected his, her, or its decision(s) with respect to the Settlement, including the decision to object to the terms of the Settlement or to exclude himself, herself, or itself from the Class. With respect to any and all Released Claims and Released Defendants’ Claims, the Parties stipulate and agree that, upon the Effective Date, Class Representatives and Defendants shall expressly, and each other Class Member shall be deemed to have, and by operation of the Judgment or Alternative Judgment shall have to the fullest extent permitted by law, expressly waived and relinquished any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Class Representatives, other Class Members, or Defendants may hereafter discover facts, legal theories, or authorities in addition to or different from those which any of them now knows or believes to be true with respect to the subject matter of the Released Claims and the Released Defendants’ Claims, but Class Representatives and Defendants shall expressly, fully, finally, and forever waive, compromise, settle, discharge, extinguish, and release, and each Class Member shall be deemed to have waived, compromised, settled, discharged, extinguished, and released, and upon the Effective Date and by operation of the Judgment or Alternative Judgment shall have waived, compromised, settled, discharged, extinguished, and released, fully, finally, and forever, any and all Released Claims and Released Defendants’ Claims as applicable, known or unknown, suspected or unsuspected, contingent or absolute, accrued or unaccrued, apparent or unapparent, which now exist, or heretofore existed, or may hereafter exist, without regard to the subsequent discovery or existence of such different or additional facts, legal theories, or authorities. Class Representatives and Defendants acknowledge, and other Class Members by operation of law shall be deemed to have acknowledged, that the inclusion of “Unknown Claims” in the definition of Released Claims and Released Defendants’ Claims was separately bargained for and was a material element of the Settlement.
Please consult the Stipulation, filed with the Court and posted here, for additional defined terms.
The “Effective Date” will occur when an Order entered by the Court approving the Settlement becomes final and not subject to appeal. If you remain a member of the Class, all of the Court’s orders will apply to you and legally bind you.
|8.||How do I exclude myself from the Class?|
If you already submitted a valid and timely request for exclusion in connection with the Class Notice, you do not need to do so again. If you are not sure whether you did, please call the Claims Administrator at (844) 850-7746.
If you did not previously submit a request for exclusion and do not want a payment from this Settlement, but you want to keep any right you may have to sue or continue to sue Defendants and the other Released Defendant Parties on your own concerning the Released Claims, then you must take steps to remove yourself from the Class. This is called excluding yourself or “opting out.” Please note: if you decide to exclude yourself because you want to bring your own lawsuit to pursue claims alleged in the Action, you should consult with an attorney to discuss whether your individual claim would be time-barred by the applicable statutes of limitations or repose. Also, Defendants may terminate the Settlement if Class Members who purchased in excess of a certain amount of shares of Intuitive common stock seek exclusion from the Class.
To exclude yourself from the Class, you must mail a signed letter stating that you request to be “excluded from the Class in In re Intuitive Surgical Securities Litigation, No. 13-cv-01920 (N.D. Cal.).” You cannot exclude yourself by telephone or e-mail. Your letter must state the date(s), price(s), and number(s) of shares of all purchases, acquisitions, and sales of Intuitive common stock during the period from February 6, 2012 through July 18, 2013. Your letter must include your name, mailing address, telephone number, e-mail address, and signature. You must submit your exclusion request so that it is received no later than November 29, 2018 to:
In re Intuitive Surgical Securities Litigation
P.O. Box 10359
Dublin, OH 43017-0359
Your exclusion request must comply with these requirements in order to be valid. If you ask to be excluded, you will not receive any payment from the Net Settlement Fund, and you cannot object to the Settlement.
|9.||If I do not exclude myself, can I sue Defendants and the other Released Defendant Parties for the same thing later?|
No. Unless you properly exclude yourself, you remain in the Class and you give up any rights to sue Defendants and the other Released Defendant Parties for any and all Released Claims. If you have a pending lawsuit, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is November 29, 2018.
|10.||What if I previously requested exclusion in connection with the Class Notice and now want to be eligible to receive a payment from the Settlement? How do I opt-back into the Class?|
If you previously submitted a valid request for exclusion from the Class in connection with the Class Notice, you may opt-back into the Class and be eligible to receive a payment from the Settlement. If you are not certain whether you previously submitted a request for exclusion, please contact the Claims Administrator at (844) 850-7746 for assistance.
In order to opt-back into the Class, you, individually or through counsel, must submit a written “Request to Opt-Back into the Class” to the Claims Administrator, addressed as follows: In re Intuitive Surgical Securities Litigation, c/o GCG, P.O. Box 10359, Dublin, OH 43017-0359. This request must be received no later than November 29, 2018. Your Request to Opt-Back into the Class must (i) state the name, address, and telephone number of the person or entity requesting to opt-back into the Class; (ii) state that such person or entity “requests to opt-back into the Class in In re Intuitive Surgical Securities Litigation, No. 13-cv-01920 (N.D. Cal.)”; and (iii) be signed by the person or entity requesting to opt-back into the Class or an authorized representative.
Please note: Opting-back into the Class does not mean that you will automatically be entitled to receive proceeds from the Settlement. If you wish to be eligible to participate in the distribution of proceeds from the Settlement, you are also required to submit the Claim Form that is being distributed with the Settlement Notice. See Question 6, above.
|11.||Do I have a lawyer in this case?|
The Court ordered the law firm of Labaton Sucharow LLP to represent all Class Members. These lawyers are called Class Counsel. You will not be separately charged for these lawyers. The Court will determine the amount of Class Counsel’s fees and expenses, which will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense.
|12.||How will the lawyers be paid?|
Class Counsel has been prosecuting the Action on a contingent basis and has not been paid for any of its work. Class Counsel, on behalf of itself and other Plaintiffs’ counsel, will seek an attorneys’ fee award of no more than 19% of the Settlement Fund, which will include accrued interest. Class Counsel was assisted in this case by Local Counsel, Kerr & Wagstaffe LLP; and attorney Anthony Takitani and The Thornton Law Firm, which provided additional legal assistance to Hawaii ERS (collectively “Plaintiffs’ Counsel”). Any attorneys’ fees awarded by the Court to Class Counsel will be allocated by Class Counsel to other Plaintiffs’ Counsel. Class Counsel will also seek payment of litigation expenses incurred by Plaintiffs’ Counsel in the prosecution of this Action of no more than $2,500,000, plus accrued interest, which will include an application in accordance with the PSLRA for the reasonable costs and expenses (including lost wages) of the Class Representatives directly related to their representation of the Class. Any attorneys’ fees and expenses awarded by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses.
|13.||How do I tell the Court that I do not like something about the proposed Settlement?|
If you are a Class Member, you can object to the Settlement or any of its terms, the proposed Plan of Allocation, and/or the Fee and Expense Application. You may write to the Court about your objection. You can ask the Court not to approve the Settlement, however you cannot ask the Court to order a larger settlement; the Court can only approve or deny this Settlement. If the Court denies approval, the Settlement payments will not be sent out and the Parties will return to the posture they were in before the Settlement was agreed to. If you would like the Court to consider your views, you must file a proper objection within the deadline, and according to the following procedures.
To object, you must send a signed letter stating that you object to the proposed Settlement in In re Intuitive Surgical Securities Litigation, No. 13-cv-01920 (N.D. Cal.). You must (i) include your name, address, telephone number, e-mail address, and signature; (ii) identify the date(s), price(s), and number(s) of shares of Intuitive common stock purchased, acquired, and sold; (iii) state the reasons why you object to the Settlement and which part(s) of the Settlement you object to; and (iv) include any legal support and/or evidence, to support your objection. Unless otherwise ordered by the Court, any Class Member who does not object in the manner described in the Settlement Notice will be deemed to have waived any objection and shall be forever foreclosed from making any future objection. Your objection must be submitted to the Court either by mailing the objection to the Clerk of the Court at the address below or by filing the objection in person at the location below, and mailed to Class Counsel and Defendants’ Counsel, so that it is received on or before November 29, 2018:
Clerk of the Court
United States District Court for the Northern District of California
Robert F. Peckham Federal Building & United States Courthouse
280 South 1st Street, Room 2112
San Jose, CA 95113
LABATON SUCHAROW LLP
Jonathan Gardner, Esq.
New York, NY 10005
Defendants’ Counsel Representative
GIBSON DUNN & CRUTCHER LLP
Michael D. Celio, Esq.
1881 Page Mill Road
Palo Alto, CA 94304
|14.||What is the difference between objecting and excluding?|
Objecting is telling the Court that you do not like something about the proposed Settlement, Plan of Allocation, or Fee and Expense Application. You can still recover from the Settlement, and you will still be bound by the Settlement and any Court order in this Action. You can object only if you stay in the Class.
Excluding yourself is telling the Court that you do not want to be part of the Class. If you exclude yourself, you have no basis to object because the Settlement no longer affects you.
|15.||When and where will the Court decide whether to approve the proposed Settlement?|
The Court will hold the Settlement Hearing on December 20, 2018 at 10:00 a.m., in Courtroom 4, 5th Floor of the Robert F. Peckham Federal Building & United States Courthouse, 280 South 1st Street, San Jose, CA 95113.
At this hearing, the Court will consider (i) whether the Settlement is fair, reasonable, and adequate, and should be finally approved; (ii) whether the proposed Plan of Allocation is fair, reasonable, and adequate; and (iii) the application of Class Counsel for an award of attorneys’ fees and payment of litigation expenses.
The Court may change the date and time of the Settlement Hearing without another notice being sent to Class Members. If you want to attend the hearing, you should check with Class Counsel beforehand to be sure that the date and/or time has not changed, periodically check the Court’s website at www.cand.uscourts.gov, or periodically check this website to see if the Settlement Hearing stays as calendared or is changed.
|16.||May I speak at the Settlement Hearing?|
You may ask the Court for permission to speak at the Settlement Hearing. To do so, you must submit a statement that it is your intention to appear in “In re Intuitive Surgical Securities Litigation, No. 13-cv-01920 (N.D. Cal.).” Persons who intend to object to the Settlement, the Plan of Allocation, or Class Counsel’s Fee and Expense Application and desire to present evidence at the Settlement Hearing must also include in their objections (prepared and submitted in accordance with the answer to Question 13) the identity of any witness they may wish to call to testify and any exhibits they intend to introduce into evidence at the Settlement Hearing. You may not speak at the Settlement Hearing if you excluded yourself from the Class or if you have not provided written notice of your objection and/or intention to speak at the Settlement Hearing in accordance with the procedures described in Question 8, 13 and 16.
|17.||What happens if I do nothing at all?|
If you do nothing and you are a member of the Class, you will receive no money from this Settlement and you will be precluded from starting a lawsuit, continuing with a lawsuit, or being part of any other lawsuit against Defendants and the other Released Defendant Parties concerning the Released Claims. To share in the Net Settlement Fund, you must submit a Claim Form (see Question 6). To start, continue, or be a part of any other lawsuit against Defendants and the other Released Defendant Parties concerning the Released Claims in this case, you must exclude yourself from the Class (see Question 8).
|18.||Are there more details about the proposed Settlement?|
The Settlement Notice summarizes the proposed Settlement. More details are in the Stipulation. Class Counsel’s motions in support of final approval of the Settlement, the request for attorneys’ fees and litigation expenses, and approval of the proposed Plan of Allocation will be filed with the Court no later than November 15, 2018 and available from Class Counsel, the Claims Administrator, or the Court, pursuant to the instructions below.
You may review the Stipulation or documents filed in the case at the Office of the Clerk of the United States District Court for the Northern District of California, Robert F. Peckham Federal Building & United States Courthouse, 280 South 1st Street, Room 2112, San Jose, CA 95113, on weekdays (other than court holidays) between 9:00 a.m. and 4:00 p.m. Subscribers to PACER, a fee-based service, can also view the papers filed publicly in the Action through the Court’s on-line Case Management/Electronic Case Files System at www.pacer.gov.
You can also get a copy of the Stipulation and other case documents using this website, by calling the Claims Administrator toll free at (844) 850-7746 or by writing to the Claims Administrator at In re Intuitive Surgical Securities Litigation, c/o GCG, P.O. Box 10359, Dublin, OH 43017-0359. Please do not Call the Court with Questions about the Settlement.