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KBC Asset Management NV v. 3D Systems Corp.

United States District Court, D. South Carolina, Rock Hill Division

September 28, 2017

KBC ASSET MANAGEMENT NV, Individually and on Behalf of All Others Similarly Situated, Plaintiff,




         This is a federal securities action. Plaintiff KBC Asset Management NV (KBC), individually and on behalf of all others similarly situated, brought this lawsuit against Defendants 3D Systems Corporation (3D Systems), Abraham N. Reichental, Damon J. Gregoire, and Ted Hull under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) and 78t(a), and Security Exchange Commission Rule 10b-5, promulgated thereunder. See 17 C.F.R. § 240.10b-5. The Court has jurisdiction over the matter in accordance with 28 U.S.C. § 1331 and Section 26 of the Exchange Act, 15 U.S.C. § 78aa.

         Pending before the Court is KBC's motion as per Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure asking the Court to certify this lawsuit as a class action on behalf of a class comprised of all persons or entities who, between October 29, 2013, and May 5, 2015 (the Class Period), purchased or otherwise acquired common stock of 3D Systems and were damaged as a result (the Class). Excluded from the Class are: Defendants, the officers and directors of 3D Systems, members of their immediate families and their legal representatives, heirs, successors, or assigns, and any entity in which the defendants have or had a controlling interest. KBC also moves the Court to certify it as the Class Representative and appoint Motley Rice and Robbins Gellar as Class Counsel for this litigation.

         Having considered the motion, Defendants' response, KBC's reply, the record, and the applicable law, the Court will grant the motion (1) for class certification, (2) to certify KBC as the class representative, and (3) to appoint Motley Rice and Robbins Gellar as class counsel.


         The factual and procedural history of this action is well known to the parties. For the one who is unfamiliar, the information is available in the Court's order denying Defendants' motion to dismiss: KBC Asset Mgmt. NV v. 3D Sys. Corp., No. 0:15-CV-02393-MGL, 2016 WL 3981236, at *1-2 (D.S.C. July 25, 2016). After the Court denied that motion, KBC filed this one.

         The Court, having been fully briefed on the pertinent issues, will now explain why it concludes KBC's motion should be granted.


         The Fourth Circuit has long “stressed . . . it is not the defendant who bears the burden of showing that the proposed class does not comply with Rule 23, but that it is the plaintiff who bears the burden of showing that the class does comply with Rule 23.” Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 321 (4th Cir. 2006). Coupled with “the plaintiffs' burden to demonstrate compliance with Rule 23 [is] the district court['s] independent obligation to perform a rigorous analysis to ensure that all of the prerequisites have been satisfied.” EQT Prod. Co. v. Adair, 764 F.3d 347, 358 (4th Cir. 2014).

         “The class-action device, which allows a representative party to prosecute his own claims and the claims of those who present similar issues, is an exception to the general rule that a party in federal court may vindicate only his own interests.” Thorn, 445 F.3d at 318. The “class representative must be part of the class and possess the same interest and suffer the same injury as the class members.” Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 625-26 (1997) (citation omitted) (internal quotation marks omitted) (alteration omitted).

         “To be certified, a proposed class must satisfy Rule 23(a).” Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 423 (4th Cir. 2003). “The requirements of Rule 23(a) are familiar: numerosity of parties, commonality of factual or legal issues, typicality of claims and defenses of class representatives, and adequacy of representation.” Thorn, 445 F.3d at 318.

         In addition to meeting the requisites of Rule 23(a), the movant “must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b).” Id. Here, KBC seeks to fulfill the mandate of Rule 23(b)(3), “which requires a court to find that the questions of law or fact common to class members predominate over any questions affecting only individual members.” Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (internal quotation marks omitted).

         The predominance criterion in Rule 23(b)(3) “is even more demanding than Rule 23(a). Rule 23(b)(3), as an adventuresome innovation, is designed for situations in which class-action treatment is not as clearly called for.” Id. That may account for “Congress's addition of procedural safeguards for (b)(3) class members beyond those provided for (b)(1) or (b)(2) class members (e.g., an opportunity to opt out), and the court's duty to take a close look at whether common questions predominate over individual ones.” Id.

         The Court will “take a close look at the facts relevant to the certification question and, if necessary, make specific findings on the propriety of certification.” Thorn, 445 F.3d at 319 (internal quotation marks omitted). “Such findings can be necessary even if the issues tend to overlap into the merits of the underlying case.” Id. “The likelihood of the plaintiffs' success on the merits, however, is [ir]relevant to the issue of whether certification is proper.” Id.

         The Fourth Circuit has counseled the district courts to construe Rule 23 liberally. Gunnells, 348 F.3d at 424. Nevertheless, it remains true the appellate court accords this Court “broad discretion in deciding whether to allow the maintenance of a class action.” Brown v. Nucor Corp., 576 F.3d 149, 161 (4th Cir. 2009) (quoting Roman v. ESB, Inc., 550 F.2d 1343, 1348 (4th Cir. 1976) (internal quotation marks omitted); Gunnells, 348 F.3d at 434 (The Fourth Circuit “accord[s] the district court's class certification decision substantial deference.”).

         “As with any other decision that appellate courts review for abuse of discretion, [the Fourth Circuit will] affirm a certification decision even if it is convinced that ‘reasons clearly existed for taking the other course.'” Brown, 785 F.3d at 929 (quoting Lewis v. Bloomsburg Mills, Inc., 773 F.2d 561, 564 (4th Cir.1985)).

         The abuse-of-discretion standard represents “one of the most deferential standards of review.” Matthew Bender & Co. v. West Publ'g Co., 240 F.3d 116, 121 (2d Cir. 2001). “Under it, the appellate court may reverse only when ‘the [trial] court's exercise of discretion, considering the law and the facts, was arbitrary and capricious.'” Brown, 785 F.3d at 928 (quoting United States v. Mason, 52 F.3d 1286, 1289 (4th Cir. 1995)). The Fourth Circuit will “act only when the decision could not ‘have been reached by a reasonable jurist, ' or when [it] may call it “fundamentally wrong, ” “clearly unreasonable, arbitrary, or fanciful.” Id. (quoting Bluestein v. Cent. Wis. Anesthesiology, S.C., 769 F.3d 944, 957 (7th Cir. 2014)).

         “Issues of class action manageability are properly committed to the district court's discretion, because that court ‘generally has a greater familiarity and expertise' with the ‘practical . . . and primarily . . . factual' problems of administering a lawsuit ‘than does a court of appeals.'” Cent. Wesleyan Coll. v. W.R. Grace & Co., 6 F.3d 177, 185 (4th Cir. 1993) (quoting Windham v. Am. Brands, Inc., 565 F.2d 59, 65 (4th Cir. 1977) (en banc)).

         IV. ...

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