Joint (Unopposed) Settlement Motion
23CV002266: VELASCO, et al. vs THE SMITHFIELD GROUP., A CALIFORNIA CORPORATION, et al. 08/11/2026 Hearing on Motion - Other for Order Approving Settlement in Department 16C
Tentative Ruling
The Joint (Unopposed) Settlement Motion is UNOPPOSED and is GRANTED.
This is a direct and derivative action filed by 21 plaintiffs against Defendants the Smithfield Group, Inc., Jock Paton, and nominal Defendant Pure Safety Group, Inc. (PSG US) for breach of fiduciary duty and fraud claims. Plaintiffs are the beneficial and equitable shareholders in PSG. Plaintiffs filed their initial complaint on May 24, 2023. Pure Safety Group Holdings Limited (Holdco) is PSG USs sole shareholder.
This motion is filed jointly by Plaintiffs and the defendants, including PSG US (collectively, the Parties). The Parties have entered into a settlement agreement (Settlement) and move for a court order, determining that the Settlement is fair to nominal defendant PSG US and its shareholders, ordering effectuation of the Settlement, and dismissing this case with prejudice. (Motion, 2:7-8.)
A shareholder plaintiff in a derivative action must obtain court approval before settling and dismissing the corporations cause of action. (Norman v. Strateman (2025) 112 Cal.App.5th 92, 102.) Court review of a settlement of a shareholder derivative action is analogous to court review of the settlement of a class action. (Robbins v. Alibrandi (2005) 127 Cal.App.4th 438, 449, fn.2.) The focus of the review is protection of the interests of those not involved in the negotiations. (Id.) The court must determine the settlement is fair, adequate, and reasonable. (Dunk v.
Ford Motor Co. (1996) 48 Cal.App.4th1794, 1800-1801.) Courts should consider all relevant factors, which may include, but are not limited to the strength of [the] plaintiffs case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. (Norman, supra, 112 Cal.App.5th at 104-105.)
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The Parties argue that the circumstances support a presumption of fairness to PSG US. Plaintiffs counsel explains that the Settlement is the result of arms-length negotiation occurring throughout a 15-month mediation process. (Declaration of Roger N. Behle Jr. (Behle Decl.), ¶ 6, Exh. 1 at pp. 2, 11.) Counsel for the Parties are competent and experienced in similar litigation. (Id., ¶ 7, Exh. 1 at p. 12.) Both Plaintiffs and Defendants have conducted written discovery and depositions, providing them with sufficient information to act intelligently. (Id., ¶¶ 4-5.) The Settlement is expressly conditioned on Holdcos consent. (Id. at Exh. 1, p. 11, § 6.A.) PSG USs counsel indicates that Holdco has informed her that it consents to and approves the Settlement. (Declaration of Deanna M. Willson (Willson Decl.), ¶ 2.)
23CV002266: VELASCO, et al. vs THE SMITHFIELD GROUP., A CALIFORNIA CORPORATION, et al. 08/11/2026 Hearing on Motion - Other for Order Approving Settlement in Department 16C
The Parties add that the evidence establishes that the Settlement is fair and reasonable to PSG US. They note that Plaintiffs have survived all the pleading challenges, but the alleged claims remain at issue. However, litigating the claims through trial would involve significant expense and significant risk to all Parties. The Parties would need to conduct substantial additional discovery (including expert witness discovery), and additional motion practice (including dispositive motions) would be likely. (Behle Decl., ¶ 5.)
The Settlement also specifically acknowledges that the Parties, and PSG US specifically, have evaluated and considered the burden, expense, uncertainty and risks in continuing the litigation. (Id., Exh. 1 at pp. 2, 11.) The Parties have also concluded that, in consideration of those concerns, settlement is fair and preferable to continued burden, expense, uncertainty and risks of proceeding further with this litigation for an uncertain duration. (Ibid.) The Settlement also benefits PSG US. (See id., Exh. 1 at pp. 1, 10-11.)
There is also no evidence that the settlement is a product of fraud, overreaching, or collusion. (Norman, supra, 112 Cal.App.5th at 102-103.)
The Court has considered the relevant factors, especially the fact that the Holdco does not object to the Settlement, that the Parties reached the Settlement after over one year of mediation, and that the claims in the action are complex and would most likely require substantial additional discovery and motion practice.
The Court therefore approves the Settlement and dismisses the case with prejudice.
The Court will sign the proposed Order and Final Judgment Approving Settlement (including Shareholder Derivative Settlement) and Dismissing Action submitted.
Moving counsels notice of motion does not provide notice of the Courts tentative ruling system, as required by Local Rule 1.06. Moving counsel is directed to contact defense counsel and advise counsel of Local Rule 1.06 and the Courts tentative ruling procedure and the manner to request a hearing. If moving counsel is unable to contact defense counsel prior to hearing, moving counsel is ordered to appear at the hearing.
NOTICE:
Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:
To request limited oral argument, on any matter on this calendar, you must call the Department 16C Oral Argument Request Line at (916) 874-1475 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument;
SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO
23CV002266: VELASCO, et al. vs THE SMITHFIELD GROUP., A CALIFORNIA CORPORATION, et al. 08/11/2026 Hearing on Motion - Other for Order Approving Settlement in Department 16C
and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court. Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.
The Department 16C Zoom Link is https://saccourt-ca-gov.zoomgov.com/j/16030877014 and the Zoom Meeting ID is 160 3087 7014. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.
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A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Courts Approved Official Reporter Pro Tempore list.
Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporters Office and an official reporter will be provided.