Evans et al v. ZB, N.A.
Filing
105
ORDER signed by Senior Judge William B. Shubb on 11/08/22 GRANTING 102 Motion for Final Approval of Class Action Settlement as fair, reasonable, and adequate. The court APPOINTS the named plaintiffs Ronald Evans, Joan Evans, and Dennis Treadway a s class representative; the court APPOINTS Robert L. Brace and Michael P. Denver as class counsel; Plaintiffs' counsel is entitled to fees in the amount of $4,105,905, and litigation costs of $153,650; The Beverly Group, Inc. is entit led to administration costs in the amount up to $150,000; Plaintiffs Ronald Evans and Joan Evans are entitled to an incentive award in the amount of $5,000; The remaining settlement funds shall be paid to participating class members in accordance with the terms of the Settlement Agreement. This action is DISMISSED with prejudice. The Court shall RETAIN jurisdiction to enforce settlement agreement. CASE CLOSED (Benson, A.)
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 1 of 22
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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----oo0oo----
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RONALD C. EVANS, JOAN M. EVANS,
DENNIS TREADAWAY, and all other
similarly situated,
Plaintiffs,
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No. 2:17-cv-01123 WBS DB
MEMORANDUM AND ORDER RE:
MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT AND
MOTION FOR ATTORNEYS’ FEES,
COSTS, AND REPRESENTATIVE
SERVICE PAYMENT
v.
ZIONS BANCORPORATION, N.A., dba
California Bank and Trust,
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Defendant.
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ZIONS BANCORPORATION, N.A.,
Third-Party
Plaintiff,
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v.
JTS, LARRY CARTER, JACK SWEIGART
AND BRISTOL INSURANCE,
Third-Party
Defendants.
----oo0oo----
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Plaintiffs Ronald Evans, Joan Evans, and Dennis
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Treadaway brought this putative class action against
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Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 2 of 22
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defendant Zions Bancorporation, d/b/a California Bank and
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Trust (“CB&T”), asserting claims based on CB&T’s alleged
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acquiescence in and provision of support for a fraud scheme
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perpetrated by one of its clients against putative class
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members.
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unopposed motion for preliminary approval of class action
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settlement.
8
(Docket No. 101).)
9
approval of the parties’ class action settlement and
On August 1, 2022, the court granted plaintiffs’
(See Order Granting Preliminary Approval
Plaintiffs now move unopposed for final
10
attorneys’ fees, costs, and a class representative service
11
payment.
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November 7, 2022.
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to object to or to opt out of the settlement
14
I.
(See Docket No. 102.)
The court held a hearing on
No class members appeared at the hearing
Discussion1
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The Ninth Circuit has declared a strong judicial policy
16
favoring settlement of class actions.
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of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); see also
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Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009)
19
(“We put a good deal of stock in the product of an arms-length,
20
non-collusive, negotiated resolution[.]”) (citation omitted).
21
Rule 23(e) provides that “[t]he claims, issues, or defenses of a
22
certified class may be settled . . . only with the court’s
23
approval.”
24
Class Plaintiffs v. City
Fed. R. Civ. P. 23(e).
“Approval under 23(e) involves a two-step process in
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27
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The court previously recited the factual and procedural
background in its order granting plaintiff’s unopposed motion for
preliminary approval of the class action settlement. (See Order
Granting Preliminary Approval at 2-3.) Accordingly, the court
will refrain from doing so again.
2
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which the Court first determines whether a proposed class action
2
settlement deserves preliminary approval and then, after notice
3
is given to class members, whether final approval is warranted.”
4
Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523,
5
525 (C.D. Cal. 2004) (citing Manual for Complex Litig. (Third),
6
§ 30.41 (1995)).
7
plaintiff’s unopposed motion for preliminary approval of class
8
action settlement on July 29, 2022.
9
following notice to the class members, the court will consider
This court satisfied step one by granting
(Docket No. 101.)
Now,
10
whether final approval is merited by evaluating: (1) the
11
treatment of this litigation as a class action and (2) the terms
12
of the settlement.
13
876 F.2d 1401, 1408 (9th Cir. 1989).
14
15
A.
See Diaz v. Tr. Territory of Pac. Islands,
Class Certification
A class action will be certified only if it meets Rule
16
23(a)’s four prerequisites and fits within one of Rule 23(b)’s
17
three subdivisions.
18
district court has discretion in determining whether the moving
19
party has satisfied each Rule 23 requirement, the court must
20
conduct a rigorous inquiry before certifying a class.
21
Califano v. Yamasaki, 442 U.S. 682, 701 (1979); Gen. Tel. Co. of
22
Sw. v. Falcon, 457 U.S. 147, 161 (1982).
23
24
25
26
27
28
1.
Fed. R. Civ. P. 23(a)-(b).
Although a
See
Rule 23(a)
Rule 23(a) restricts class actions to cases where:
(1) the class is so numerous that joinder of all
members is impracticable; (2) there are questions
of law or fact common to the class; (3) the claims
or defenses of the representative parties are
typical of the claims or defenses of the class;
and (4) the representative parties will fairly and
3
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adequately protect the interests of the class.
2
Fed. R. Civ. P. 23(a).
These requirements are commonly referred
3
to as numerosity, commonality, typicality, and adequacy of
4
representation.
5
approval of the settlement, the court found that the putative
6
class satisfied the Rule 23(a) requirements.
7
Preliminary Approval at 5-10.)
8
changes that would affect its conclusion that the putative class
9
satisfies the Rule 23(a) requirements, and the parties have not
In the court’s order granting preliminary
(See Order Granting
The court is unaware of any
10
indicated that they are aware of any such developments.
11
Mot. for Final Approval at 9.)
12
the class definition proposed by plaintiffs meets the
13
requirements of Rule 23(a).
(See
The court therefore finds that
14
2.
Rule 23(b)
15
An action that meets all the prerequisites of Rule
16
23(a) may be certified as a class action only if it also
17
satisfies the requirements of one of the three subdivisions of
18
Rule 23(b).
Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th
19
Cir. 2013).
In its order granting preliminary approval of the
20
settlement, the court found that both the predominance and
21
superiority prerequisites of Rule 23(b)(3) were satisfied.
22
Order Granting Preliminary Approval at 10-12.)
23
unaware of any changes that would affect its conclusion that Rule
24
23(b)(3) is satisfied.
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both Rule 23(a) and 23(b)(3), the court will grant final class
26
certification of this action.
(See
The court is
Because the settlement class satisfies
27
3.
Rule 23(c)(2) Notice Requirements
28
If the court certifies a class under Rule 23(b)(3), it
4
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“must direct to class members the best notice that is practicable
2
under the circumstances, including individual notice to all
3
members who can be identified through reasonable effort.”
4
R. Civ. P. 23(c)(2)(B).
5
content of a proposed notice.
6
651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin,
7
417 U.S. 156, 172–77 (1974)).
8
“reasonably certain to inform the absent members of the plaintiff
9
class,” actual notice is not required.
10
11
Fed.
Rule 23(c)(2) governs both the form and
See Ravens v. Iftikar, 174 F.R.D.
Although that notice must be
Silber v. Mabon, 18 F.3d
1449, 1454 (9th Cir. 1994) (citation omitted).
The parties selected The Beverly Group, Inc. (“TBG”) to
12
serve as the Settlement Administrator.
(Denver Decl. ¶ 3 (Docket
13
No. 102-1).)
14
also the overwhelming majority of unsecured creditors in the
15
related IMG bankruptcy matter in which TBG’s founder was serving
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at the Chapter 11 Trustee.
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with the class list, utilizing the bankruptcy proceeding database
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of claimants, derived from the Court-approved claims of the
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Trustee, and addresses.
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class member information from the estate’s own records of court
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approved distribution and claims, list of potential class action
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members from class action counsel, and TBG’s efforts to locate
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additional claimants, 56 settlement class members and 34
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potential net-losers were identified.
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the Court-approved notice packets, the notice form was
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personalized for each recipient and set forth the recipient’s net
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loss amount as reviewed by TBG.
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sent out 90 notice packets.
The potential class members in this matter were
(Id.)
(Id.)
Defendants timely provided TBG
From the combined settlement
(Id.)
When TBG sent out
(Id. ¶¶ 4-5.)
(Id. ¶ 6.)
5
In total, TBG
TBG also ran the Court-
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 6 of 22
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approved publication notice in the Sacramento Bee.
2
(Id. ¶ 7.)
Ten notices were returned to TBG by the U.S. Post
3
Office as undeliverable.
4
class notices.
5
members presenting written or oral requests for exclusion.
6
¶ 10.)
7
presenting written or oral objections to the settlement.
8
11.)
9
their respective net loss amounts.
(Id.)
(Id. ¶ 9.)
TBG was able to email 4
TBG has received zero responses from class
(Id.
TBG has received zero responses from class members
(Id. ¶
TBG received 5 responses from notice recipients questioning
(Id.)
(Id. ¶ 12.)
TBG has resolved
10
4 of the 5 claim disputes.
The remaining notice recipient
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did not provide documents to support a different calculation and
12
has not provided any information to support a different
13
calculation of a net loss other than $0.
(Id.)
14
“Notice is satisfactory if it ‘generally describes the
15
terms of the settlement in sufficient detail to alert those with
16
adverse viewpoints to investigate and to come forward and be
17
heard.’”
18
575 (9th Cir. 2004) (quoting Mendoza v. Tucson Sch. Dist. No. 1,
19
623 F.2d 1338, 1352 (9th Cir. 1980)).
20
parties, explains the nature of the proceedings, defines the
21
class, provides the terms of the settlement, and explains the
22
procedure for objecting or opting out of the class.
23
The notice also explains how class members’ individual settlement
24
awards will be calculated and the amount that class members can
25
expect to receive.
26
Rule 23(c)(2)(B)’s requirements.
Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566,
(Id.)
The notice identifies the
(Id. ¶ 8.)
Accordingly, the notice complies with
27
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B.
Rule 23(e): Fairness, Adequacy, and Reasonableness of
Proposed Settlement
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Having determined that class treatment is warranted,
2
the court must now address whether the terms of the parties’
3
settlement appear fair, adequate, and reasonable.
4
Civ. P. 23(e)(2).
5
reasonableness of the agreement, Rule 23(e) requires the court to
6
consider four factors: “(1) the class representatives and class
7
counsel have adequately represented the class; (2) the proposal
8
was negotiated at arm’s length; (3) the relief provided for the
9
class is adequate; and (4) the proposal treats class members
See Fed. R.
To determine the fairness, adequacy, and
10
equitably relative to each other.”
11
also identified eight additional factors the court may consider,
12
many of which overlap substantially with Rule 23(e)’s four
13
factors:
14
15
16
17
18
19
Id.
The Ninth Circuit has
The strength of the plaintiff’s case; the risk,
expense, complexity, and likely duration of
further litigation; the risk of maintaining class
action status throughout the 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.
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).
20
Because this settlement was reached prior to class
21
certification, it will be subject to heightened scrutiny for
22
purposes of final approval.
23
Performance Litig., 50 F.4th 769, 2022 WL 4492078, at *8 (9th
24
Cir. 2022).
25
be given a presumption of reasonableness, but rather will be
26
subject to close review.
27
particularly scrutinize “any subtle signs that class counsel have
28
allowed pursuit of their own self-interests to infect the
See In re Apple Inc. Device
The recommendations of plaintiff’s counsel will not
See id. at *9.
7
The court will
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 8 of 22
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negotiations.”
See id.
(quoting Roes, 1-2 v. SFBSC Mgmt., LLC,
2
944 F.3d 1035, 1043 (9th Cir. 2019)).
3
1.
Adequate Representation
4
The court must first consider whether “the class
5
representatives and class counsel have adequately represented the
6
class.”
7
“redundant of the requirements of Rule 23(a)(4) . . . ”
8
v. Libre Tech., Inc., No. 3:18-cv-1371-GPC-KSC, 2020 WL 2467060,
9
at *5 (S.D. Cal. May 13, 2020) (quoting Rubenstein, 4 Newberg on
10
Class Actions § 13:48 (5th ed.)) See also In re GSE Bonds Antitr.
11
Litig., 414 F. Supp. 3d 686, 701 (S.D.N.Y. 2019) (noting
12
similarity of inquiry under Rule 23(a)(4) and Rule 23(e)(2)(A)).
13
Fed. R. Civ. P. 23(e)(2)(A).
This analysis is
Hudson
Because the Court has found that the proposed class
14
satisfies Rule 23(a)(4) for purposes of class certification, the
15
adequacy factor under Rule 23(e)(2)(A) is also met.
16
2020 WL 2467060, at *5.
See Hudson,
17
2.
Negotiation of the Settlement Agreement
18
Counsel for both sides appear to have diligently
19
pursued settlement after thoughtfully considering the strength of
20
their arguments and potential defenses.
21
in an arms-length mediation before two experienced litigation
22
mediators.
23
mediation before retired Judge Richard L. Gilbert, but the case
24
did not settle.
25
additional discovery and trial preparation, including taking over
26
50 depositions with thousands of exhibits.
27
2022, the parties participated in a mediation before retired
28
Judge Ronald Sabraw from JAMS, who has expertise in Ponzi scheme
The parties participated
In August of 2020, the parties participated in a
(Denver Decl. ¶ 16.)
8
The parties continued with
(Id.)
In March of
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litigation.
2
March 17, 2022, the case did not settle.
3
agreed to consider a mediator’s proposal as a possible method
4
that might move the discussions forward.
5
2022, Judge Sabraw recommended that the Bank pay the class
6
$14,000,000 to settle approximately $55,000,000 in unrepaid
7
loans.
8
Judge that both sides had accepted the mediator’s proposal. (Id.)
9
On June 17, 2022, the parties drafted and executed a long-form
10
(Id.)
(Id.)
After the first day of this second mediation,
(Id.)
(Id.)
The parties
On March 25,
On April 1, 2022, the parties were informed by the
settlement agreement.
(Id.)
11
Given the sophistication and experience of plaintiff’s
12
counsel, the parties’ representation that the settlement reached
13
was the product of arms-length bargaining over two mediations,
14
and the five-year litigation history, the court finds the
15
proposed settlement is non-collusive and is in the best interest
16
of the class.
17
3.
18
In determining whether a settlement agreement provides
19
adequate relief for the class, the court must “take into account
20
(i) the costs, risks, and delay of trial and appeal; (ii) the
21
effectiveness of any proposed method of distributing relief to
22
the class, including the method of processing class-member
23
claims; (iii) the terms of any proposed award of attorney's fees,
24
including timing of payment; and (iv) any [other] agreement[s]”
25
made in connection with the proposal.
26
23(e)(2)(C); Baker v. SeaWorld Entm’t, Inc., No. 14-cv-02129-MMA-
27
AGS, 2020 WL 4260712, at *6-8 (S.D. Cal. Jul. 24, 2020).
28
Adequate Relief
See Fed. R. Civ. P.
The court notes that, in evaluating whether the
9
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settlement provides adequate relief, it must consider several of
2
the same factors as outlined in Hanlon, including the strength of
3
the plaintiff’s case, the risk, expense, complexity, and likely
4
duration of further litigation, the risk of maintaining class
5
action status throughout the trial, and the amount offered in
6
settlement.
7
See Hanlon, 150 F.3d at 1026.
In determining whether a settlement agreement is
8
substantively fair to class members, the court must balance the
9
value of expected recovery against the value of the settlement
10
offer.
See In re Tableware Antitrust Litig., 484 F. Supp. 2d
11
1078, 1080 (N.D. Cal. 2007).
12
that defendant’s potential exposure could be approximately
13
$55,000,000 (Denver Decl. ¶ 19.)
14
$14,000,000--approximately 25% of the potential damages.
15
Given that 100% success in litigation is uncommon, and based on
16
defendants’ contentions that (1) there is no definitive proof of
17
actual knowledge; (2) the circumstantial evidence offered by
18
plaintiffs to support an inference of actual knowledge is
19
inconclusive and subject to alternate interpretation; (3) it is
20
unrealistic for class members to expect they are due a full
21
return of their funds considering that investments in legitimate
22
companies often result in losses; and (4) the class members
23
themselves were arguably reckless in passing money to IMG without
24
first doing anything to confirm the company was legitimate, which
25
it was not.
26
an average payment of approximately 17% of each class member’s
27
net loss after the proposed deductions for attorneys’ fees, costs
28
of litigation, notice expenses, and an enhancement aware for the
(Id. ¶ 20.)
Here, plaintiffs’ counsel estimates
The case settled for
(Id.)
The Settlement Agreement will result in
10
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plaintiffs.
(Id. ¶ 22.)
2
Plaintiffs’ counsel represents that, absent settlement,
3
further litigation would be costly, time consuming, and uncertain
4
in outcome.
5
any favorable judgment for plaintiff, resulting in further
6
expense and jeopardy for class members.
7
strength of plaintiff’s claims and defendants’ potential
8
exposure, as well as the risk, expense, and complexity involved
9
in further litigation, the court is satisfied that the settlement
10
and resulting distribution provides a strong result for the class
11
and is fair to class members.
12
(See id. at ¶ 71.)
Defendants would likely appeal
(Id.)
Given the
The Settlement Agreement further provides for
13
plaintiffs’ counsel to seek attorney’s fees totaling 30% of the
14
net amount remaining on the $14,000,000 after deductions incurred
15
for litigation costs not to exceed $200,000, claims
16
administration expenses not to exceed $150,000, and an
17
enhancement award of $5,000 for both plaintiff Ronald Evans and
18
plaintiff Joan Evans, for a total of $10,000.
19
(Id. ¶ 23.)
If a negotiated class action settlement includes an
20
award of attorney’s fees, then the court “ha[s] an independent
21
obligation to ensure that the award, like the settlement itself,
22
is reasonable, even if the parties have already agreed to an
23
amount.”
24
935, 941 (9th Cir. 2011).
25
the attorneys’ fees requested are reasonable.
26
these considerations, the court finds that Rule 23(e)’s third
27
factor is satisfied.
28
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d
4.
As discussed in greater detail below,
In light of all of
See Fed. R. Civ. P. 23(e)(C).
Equitable Treatment of Class Members
11
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Finally, the court must consider whether the Settlement
2
Agreement “treats class members equitably relative to each
3
other.”
4
determines whether the settlement “improperly grant[s]
5
preferential treatment to class representatives or segments of
6
the class.”
7
484 F. Supp. at 1079).
8
9
See Fed. R. Civ. P. 23(e)(2)(D).
In doing so, the Court
Hudson, 2020 WL 2467060, at *9 (quoting Tableware,
Here, the Settlement Agreement does not improperly
discriminate between any segments of the class--all class members
10
are entitled to pro rata monetary relief based on their
11
respective net loss.
12
the Settlement Agreement allowed plaintiffs to seek an incentive
13
enhancement award of $5,000 for both plaintiff Ronald Evans and
14
plaintiff Joan Evans, for a total of $10,000,2
15
23), plaintiff has submitted additional evidence documenting
16
their time and effort spent on this case, which, as discussed
17
further below, in Section E, has satisfied the court that their
18
additional compensation above other class members is justified.
19
See Hudson, 2020 WL 2467060, at *9.
20
that the Settlement Agreement treats class members equitably.
21
See Fed. R. Civ. P. 23(e)(D).
(See Mot. for Final Approval at 21.)
While
(Denver Decl. ¶
The court therefore finds
22
5.
Remaining Hanlon Factors
23
In addition to the Hanlon factors already considered as
24
part of the court’s analysis under Rule 23(e)(A)-(D), the court
25
must also take into account “the extent of the discovery
26
27
28
Plaintiff Treadway has elected to forego the request
for the enhancement award so that the $5,000 is added to the
general distribution amount. (Denver Decl. ¶ 23, fn. 3.)
12
2
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1
completed . . . the presence of government participation, and the
2
reaction of class members to the proposed settlement.”
3
150 F.3d at 1026.
4
Hanlon,
Through formal and informal discovery, defendants
5
provided a substantial amount of information that appears to have
6
allowed the parties to adequately assess the value of plaintiff’s
7
and the class’s claims.
8
50 depositions were taken with thousands of exhibits discussed
9
during the depositions.
10
(Denver Decl. ¶ 29.)
(Id.)
For example, over
This factor weighs in favor of
final approval of the settlement.
11
The seventh Hanlon factor, pertaining to government
12
participation, also weighs in favor of approval.
13
F.3d at 1026.
14
proposed settlement must be submitted to the Office of the
15
Comptroller of the Currency (“OCC”) within 10 days of filing the
16
Settlement Agreement with the court.
17
that the Bank provided a copy of the proposed Settlement
18
Agreement to the OCC before June 27, 2022.
19
confirmed that the OCC has not sought to intervene or otherwise
20
objected to the settlement.
21
favor of final approval of the settlement.
22
Hanlon, 150
Under the Class Action Fairness Act (“CAFA”), the
Here, Bank has confirmed
Bank has also
This factor therefore weighs in
The eighth Hanlon factor, the reaction of the class
23
members to the proposed settlement, also weighs in favor of final
24
approval.
25
objected to or sought to opt out of the settlement.
26
See Hanlon, 150 F.3d at 1026.
No class members have
See id.
The court therefore finds that the remaining Hanlon
27
factors weigh in favor of preliminary approval of the Settlement
28
Agreement.
See Ramirez, 2017 WL 3670794, at *3.
13
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1
In sum, the four factors that the court must evaluate
2
under Rule 23(e) and the eight Hanlon factors, taken as a whole,
3
appear to weigh in favor of the settlement.
4
therefore grant final approval of the Settlement Agreement.
5
C.
The court will
Attorneys’ Fees
6
Federal Rule of Civil Procedure 23(h) provides, “[i]n a
7
certified class action, the court may award reasonable attorney’s
8
fees and nontaxable costs that are authorized by law or by the
9
parties’ agreement.”
Fed. R. Civ. P. 23(h).
If a negotiated
10
class action settlement includes an award of attorneys’ fees,
11
that fee award must be evaluated in the overall context of the
12
settlement.
13
Cir. 2002); Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443,
14
455 (E.D. Cal. 2013) (England, J.).
15
independent obligation to ensure that the award, like the
16
settlement itself, is reasonable, even if the parties have
17
already agreed to an amount.”
18
941.
19
Knisley v. Network Assocs., 312 F.3d 1123, 1126 (9th
The court “ha[s] an
Bluetooth Headset, 654 F.3d at
“Under the ‘common fund’ doctrine, ‘a litigant or a
20
lawyer who recovers a common fund for the benefit of persons
21
other than himself or his client is entitled to a reasonable
22
[attorneys’] fee from the fund as a whole.’”
23
Co., 327 F.3d 938, 969 (9th Cir. 2003) (quoting Boeing Co. v. Van
24
Gemert, 444 U.S. 472, 478 (1980)).
25
district court has discretion to determine the amount of
26
attorneys’ fees to be drawn from the fund by employing either the
27
percentage method or the lodestar method.
28
also use one method as a “cross-check[ ]” upon the other method.
14
Staton v. Boeing
In common fund cases, the
Id.
The court may
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 15 of 22
1
See Bluetooth Headset, 654 F.3d at 944.
2
As part of the settlement, the parties agreed that
3
plaintiffs’ counsel would seek attorney’s fees totaling 30% of
4
the net amount remaining from the $14,000,000 payment after the
5
reduction of the following: (1) litigation expenses not to exceed
6
$200,000; (2) settlement administration expenses not to exceed
7
$150,000; (3) a combined $15,000 enhancement award for the Evans
8
plaintiffs ($5,000 each).
9
attorney’s fees will amount to $4,105,905.
(Id. ¶ 36.)
As such, the requested
(Id.) The remaining
10
$9,580,445 will be available to be distributed to members of the
11
settlement class, which is approximately 17% of each class
12
member’s respective net loss.
13
(Id.)
Like other class actions, this case presented both
14
counsel and the class with a risk of no recovery at all.
15
37.)
16
on contingency, it sometimes recovers very little to nothing at
17
all, even for cases that may be meritorious, and that the
18
potential costs that must be expended in such cases are often
19
substantial.
20
rights on behalf of a class, they depend on recovering a
21
reasonable percentage-of-the-fund fee award to enable them to
22
take on similar risks in future cases.
23
counsel argues that, in light of the strong result and
24
substantial risk taken in this case, a 30% fee, as requested
25
here, is reasonable.
26
27
(Id. ¶
Plaintiffs’ counsel represents that, because the firm works
(See id.)
Where counsel do succeed in vindicating
(See id.)
Plaintiffs’
A “lodestar-multiplier” cross-check confirms the
reasonableness of the requested award.
28
15
Plaintiffs’ counsel has
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 16 of 22
1
calculated a lodestar figure in this case of $5,579,002.3
2
Denver Decl. ¶ 44.)
3
kept by plaintiffs’ counsel, attorneys at the two firms have,
4
over the span of five years, dedicated 6,724 hours of work to
5
this case.
6
(See
According to contemporaneous billing logs
(Id. at ¶¶ 41-43.)
Based on plaintiffs’ counsel’s calculated lodestar
7
figure, plaintiff seeks a lodestar multiplier of approximately
8
0.74--in other words, plaintiffs’ counsel seeks less than the
9
lodestar cross-check would indicate she and her firm are entitled
10
to.
In class actions, “[m]ultipliers can range from 2 to 4 or
11
even higher.”
12
224, 255 (2001).4
13
lodestar to reflect the risk of non-payment in common fund
14
cases.’”
15
lodestar cross-check resulted in multiplier of 3.65); see also
16
id. at 1052 n.6, appx. (collecting cases and finding that risk
17
multiplier fell between 1.0 and 4.0 in 83% of cases); In re
18
NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 489
19
(S.D.N.Y. 1998) (awarding 3.97 multiplier and observing that
20
“[i]n recent years multipliers of between 3 and 4.5 have become
21
more common”).
22
23
Wershba v. Apple Computer, Inc., 91 Cal. App. 4th
“Indeed, ‘courts have routinely enhanced the
Vizcaino, 290 F.3d at 1051 (approving fee award where
Factors considered in determining the appropriate
lodestar multiplier generally include: (1) the risks presented by
24
25
26
27
28
The court expresses no opinion as to the proper
lodestar amount in this case.
3
Federal courts incorporate California state law on
deciding an appropriate multiplier when the claims are brought
under California state law. Vizcaino v. Microsoft Corp., 290
F.3d 1043, 1047 (9th Cir. 2002).
16
4
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 17 of 22
1
the contingent nature of the case; (2) the difficulty of the
2
questions involved and the skill requisite to perform the legal
3
service properly; (3) the nature of the opposition; (4) the
4
preclusion of other employment by the attorney from accepting the
5
case; and (5) the result obtained.
6
1122, 1132 (Cal. 2001); Graham v. DaimlerChrysler Corp., 34 Cal.
7
4th 553, 582 (Cal. 2004); Serrano v. Priest, 20 Cal.3d 25, 48-49
8
(Cal. 1977).
9
the defenses likely to be raised by defendant, the strong result
Ketchum v. Moses, 24 Cal. 4th
Given the risks undertaken by plaintiffs’ counsel,
10
for the class, and the fact that courts routinely approve fee
11
awards corresponding with a lodestar of well over 1.0, the court
12
finds that a multiplier of 0.74 is justified this case.
13
Johnson v. Fujitsu Tech. & Bus. of Am., Inc., No. 16-cv-03698-NC,
14
2018 U.S. Dist. LEXIS 80219, at *20 (N.D. Cal. May 11, 2018)
15
(finding multiplier of 4.37 to be reasonable); In re NCAA Ath.
16
Grant-In-Aid Cap Antitrust Litig., 2017 U.S. Dist. LEXIS 201108,
17
at *21 (N.D. Cal. Dec. 6, 2017) (finding multiplier of 3.66 to be
18
“well within the range of awards in other cases.”).
19
20
21
22
See
Accordingly, the court finds the requested fees to be
reasonable and will approve counsel’s motion for attorneys’ fees.
D.
Costs
“There is no doubt that an attorney who has created a
23
common fund for the benefit of the class is entitled to
24
reimbursement of reasonable litigation expenses from that fund.”
25
In re Heritage Bond Litig., Civ. No. 02-1475, 2005 WL 1594403, at
26
*23 (C.D. Cal. June 10, 2005).
27
whether the particular costs are of the type billed by attorneys
28
to paying clients in the marketplace.
The appropriate analysis is
17
Harris v. Marhoefer, 24
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 18 of 22
1
F.3d 16, 19 (9th Cir. 1994).
“Thus, [reimbursement of]
2
reasonable expenses, though greater than taxable costs, may be
3
proper.”
Id. at 20.
4
Here, the parties agreed that plaintiffs’ counsel shall
5
be entitled to recover reasonable litigation costs, not to exceed
6
$200,000.
7
incurred expenses and costs to date in the amount of $69,538.33.
8
(Denver Decl. ¶ 47.)
9
47.)
(Denver Decl. ¶ 47.)
Counsel states that his firm has
Robert Brace expended $64,111.67.
(Id. ¶
These expenses include filing fees, court fees, deposition
10
fees, travel expenses, document and electronic file fees,
11
mediation fees, legal research fees, and data analysis fees.
12
(Id.)
13
expenses, see Heritage, 2005 WL 1594403, at *23, and will
14
therefore grant class counsel’s request for costs up to the
15
amount authorized by the Settlement Agreement, $200,000.
16
The court finds that these are reasonable litigation
E.
17
Representative Service Award
“Incentive awards are fairly typical in class action
18
cases.”
19
compensate class representatives for work done on behalf of the
20
class, to make up for financial or reputational risk undertaken
21
in bringing the action, and, sometimes, to recognize their
22
willingness to act as a private attorney general.”
23
59.
24
Rodriguez, 563 F.3d at 958.
“[They] are intended to
Id. at 958-
Nevertheless, the Ninth Circuit has cautioned that
25
“district courts must be vigilant in scrutinizing all incentive
26
awards to determine whether they destroy the adequacy of the
27
class representatives . . .”
28
Solutions, Inc., 715 F.3d 1157, 1164 (9th Cir. 2013).
Radcliffe v. Experian Info.
18
In
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 19 of 22
1
assessing the reasonableness of incentive payments, the court
2
should consider “the actions the plaintiff has taken to protect
3
the interests of the class, the degree to which the class has
4
benefitted from those actions” and “the amount of time and effort
5
the plaintiff expended in pursuing the litigation.”
6
F.3d at 977 (citation omitted).
7
number of named plaintiffs receiving incentive payments, the
8
proportion of the payments relative to the settlement amount, and
9
the size of each payment.”
10
Staton, 327
The court must balance “the
Id.
In the Ninth Circuit, an incentive award of $5,000 is
11
presumptively reasonable.
Davis v. Brown Shoe Co., Inc., No.
12
1:13-01211 LJO BAM, 2015 WL 6697929, at *11 (E.D. Cal. Nov. 3,
13
2015) (citing Harris v. Vector Marketing Corp., No. C-08-5198
14
EMC, 2012 WL 381202, at *7 (N.D. Cal. Feb. 6, 2012)) (collecting
15
cases).
16
Evans, seek an incentive payment of $5,000 each.
17
48.)
18
significant time and resources to the case over the past five
19
years, including involvement in the appeal to the Ninth Circuit.
20
(Decl. of Ronald and Joan Evans (“Evans Decl.”) ¶ 5 (Docket No.
21
98-3); Denver Decl. ¶ 48.)
22
participate in this litigation as class representatives even
23
though could potentially receive a smaller recovery than if they
24
had acted solely on themselves and despite the professional and
25
reputational risk.
26
these risks were real and substantial, and further warrant
27
awarding an incentive payment to Ronald and Joan Evans for their
28
participation as class representatives.
Two of the three named plaintiffs, Ronald Evans and Joan
(Denver Decl. ¶
The Evans plaintiffs represent that they have devoted
The Evans plaintiffs chose to
(Denver Decl. ¶ 50.)
19
The court finds that
See Staton, 327 F.3d at
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 20 of 22
1
977.
2
service award.
3
II.
4
The court will therefore authorize payment of a $5,000
Conclusion
Based on the foregoing, the court will grant final
5
certification of the settlement class and will approve the
6
settlement set forth in the settlement agreement as fair,
7
reasonable, and adequate.
8
binding upon all participating class members who did not exclude
9
themselves.
10
The settlement agreement shall be
IT IS THEREFORE ORDERED that plaintiffs’ unopposed
11
motion for final approval of the parties’ class action settlement
12
and attorneys’ fees, costs, and a class representative service
13
payment (Docket No. 102) be, and the same hereby are, GRANTED.
14
IT IS FURTHER ORDERED THAT:
15
(1) Solely for the purpose of this settlement, and
16
pursuant to Federal Rule of Civil Procedure 23, the court hereby
17
certifies the following class:
18
19
20
21
22
23
24
25
26
27
28
All Net Losers, including assignees, but excluding Net
Losers who have already released the Bank from IMGrelated claims, and also excluding any governmental
entities, any judge, justice or judicial officer
presiding over this matter, and the members of his or
her immediate family, the Bank, along with its
corporate parents, subsidiaries and/or affiliates,
successors, and attorneys of any excluded Person or
entity referenced above, and any Person acting on
behalf of any excluded Person or entity referenced
above. . . .
“Net Loser” means any Settlement Class Member who
suffered a Net Loss from lending to or investing money
in IMG’s medical supply-related business(es). . . .
“Net Loss” means the total amount transferred by a
Settlement Class Member to IMG minus the total amount
received back from IMG, including, but not limited to
any return on investment, return of principal, fees,
and other payments by IMG to the Settlement Class
20
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 21 of 22
1
2
3
4
5
6
7
Member. For purposes of this settlement, for each
Participating Class Member, the Net Loss shall be the
amount of the allowed claim as reflected in the Claims
Approval Order, provided that such allowed claim only
includes monies provided to IMG for the purpose of
lending to or investing money in IMG’s medical supplyrelated business(es).
(Settlement Agreement (“Agreement”) at §§ 1.11, 1.12,
1.26 (Docket No. 98-1 at 23, 29)
(2) The court appoints the named plaintiffs Ronald
8
Evans, Joan Evans, and Dennis Treadway as class representative
9
and finds that they meet the requirements of Rule 23;
10
(3) The court appoints Robert L. Brace and Michael P.
11
Denver as class counsel and finds that they meet the requirements
12
of Rule 23;
13
(4) The Settlement Agreement’s plan for class notice is
14
the best notice practicable under the circumstances and satisfies
15
the requirements of due process and Rule 23.
16
approved and adopted. The notice to the class complies with Rule
17
23(c)(2) and Rule 23(e) and is approved and adopted;
18
The plan is
(5) The court finds that the parties and their counsel
19
took appropriate efforts to locate and inform all class members
20
of the settlement.
21
to the settlement, the court finds that no additional notice to
22
the class is necessary;
Given that no class member filed an objection
23
(6) As of the date of the entry of this order,
24
plaintiffs and all class members who have not timely opted out of
25
this settlement herby do and shall be deemed to have fully,
26
finally, and forever released, settled, compromised,
27
relinquished, and discharged defendants of and from any and all
28
settled claims, pursuant to the release provisions stated in the
21
Case 2:17-cv-01123-WBS-DB Document 105 Filed 11/08/22 Page 22 of 22
1
parties’ settlement agreement;
2
3
(7) Plaintiffs’ counsel is entitled to fees in the
amount of $4,105,905, and litigation costs of $153,650;
4
5
(8) The Beverly Group, Inc. is entitled to
administration costs in the amount up to $150,000;
6
7
(9)
entitled to an incentive award in the amount of $5,000;
8
9
10
Plaintiffs Ronald Evans and Joan Evans are
(10) The remaining settlement funds shall be paid to
participating class members in accordance with the terms of the
Settlement Agreement; and
11
(11) This action is dismissed with prejudice.
However,
12
without affecting the finality of this Order, the court shall
13
retain continuing jurisdiction over the interpretation,
14
implementation, and enforcement of the Settlement Agreement with
15
respect to all parties to this action and their counsel of
16
record.
17
Dated:
November 8, 2022
18
19
20
21
22
23
24
25
26
27
28
22
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