Hohenberg v. Ferrero USA, Inc

Filing 114

MOTION for Settlement Motion for Final Approval of Class Action Settlement, MOTION for Attorney Fees Motion for Attorneys' Fees, Costs, and Incentive Awards by Athena Hohenberg, Laura Rude-Barbato. (Attachments: # 1 Memo of Points and Authorities in Support of Motion for Final Settlement Approval (Redacted Version), # 2 Memo of Points and Authorities in Support of Motion for Approval of Attorneys' Fees, Costs, and Incentive Awards (Redacted Version), # 3 Declaration of Ronald A. Marron, # 4 Declaration of Jack Fitzgerald, # 5 Declaration of Athena Hohenberg, # 6 Declaration of Laura Rude-Barbato, # 7 Affidavit of Charlene Young)(Fitzgerald, John) (ag).

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1 LAW OFFICES OF RONALD A. MARRON, APLC 2 RONALD A. MARRON (175650) 3 ron@consumersadvocates.com MAGGIE REALIN (263639) 4 maggie@consumersadvocates.com B. SKYE RESENDES (278511) 5 skye@consumersadvocates.com 3636 4th Avenue, Suite 202 6 San Diego, California 92103 (619) 696-9006 7 Telephone: Facsimile: (619) 564-6665 8 THE WESTON FIRM GREGORY S. WESTON (239944) greg@westonfirm.com JACK FITZGERALD (257370) jack@westonfirm.com MELANIE PERSINGER (275423) mel@westonfirm.com COURTLAND CREEKMORE (182018) courtland@westonfirm.com 1405 Morena Blvd. Suite 201 San Diego, CA 92110 Telephone: (619) 798-2006 Facsimile: (480) 247-4553 9 Class Counsel 10 11 UNITED STATES DISTRICT COURT 12 CENTRAL DISTRICT OF CALIFORNIA Case No. 3:11-cv-00205-H-KSC Pleading Type: Class Action 13 14 15 16 17 18 19 20 IN RE FERRERO LITIGATION DECLARATION OF JACK FITZGERALD IN SUPPORT OF PLAINTIFFS’ MOTIONS FOR FINAL APPROVAL AND APPROVAL OF ATTORNEY FEES AND INCENTIVE AWARD Judge: The Honorable Marilyn L. Huff Hearing: July 9, 2012 Time: 10:30 a.m. Location: Courtroom 13 21 22 23 24 25 26 27 28 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 I, Jack Fitzgerald, declare: 2 1. I am Class Counsel in this action. I am a member in good standing of the State Bars of 3 California and New York; and of the United States District Courts for the Northern, Central and 4 Southern Districts of California and the Southern and Eastern Districts of New York; and of the United 5 States Court of Appeals for the Ninth Circuit. I make this Declaration in support of Plaintiffs’ Motions 6 for Final Settlement Approval and Approval of Attorney Fees and Inventive Awards. 7 8 Discovery 2. Plaintiffs served Ferrero two sets of Requests for Production, on March 23 and October 9 12, 2011. Ferrero responded to the first set on April 8, 2011, and Class Counsel reviewed the many 10 documents it produced. Ferrero did not respond to the second set because discovery was stayed on 11 October 19. 12 3. Plaintiffs also served two sets of Interrogatories on Ferrero, on March 23 and June 8. 13 Ferrero responded on April 8 and July 15. 14 4. Ferrero served Plaintiffs with Interrogatories on July 25, 2011, to which Plaintiffs 15 responded on August 29, and with Requests for Production on August 31, to which Plaintiffs responded 16 on October 3, including by producing nearly 500 pages of documents. 17 5. Plaintiffs also propounded document subpoenas, and in some cases deposition 18 subpoenas, on nine third parties from whom they obtained documents, including Ferrero vendors, 19 distributors, advertising agencies and consultants. These third parties included: Connie Evers, Isabelle 20 Lambotte, Aspen Logistics, Believe Media, Merkley+Partners, Vision Creative Group, The Wilson 21 Group, Zenithmedia, and MS&L. As a result, Class Counsel reviewed thousands of documents. 22 6. Ferrero also served a third-party subpoena, on Costco, for records relating to Plaintiffs’ 23 purchases. 24 7. Plaintiffs deposed three witnesses: Ferrero’s Chief Executive Officer, Bernard Kreilman 25 (on April 14, 2011); Nutella’s spokesperson, purported children’s nutrition expert Connie Evers (on 26 July 26, 2011); and Nutella’s former nutritional consultant before Evers, Isabelle Lambotte (on October 27 4, 2011). Although the Kreilmann deposition was ostensibly related to venue issues relevant to 28 1 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Ferrero’s Motion to Transfer Venue, it provided valuable merits discovery, such as Nutella’s sales, its 2 manufacturing and distributing process, and the identity of knowledgeable witnesses. 3 8. Ferrero took Plaintiffs’s depositions on Athena Hohenberg and Laura Rude-Barbato on 4 September 29 (Ms. Hohenberg) and 30 (Ms. Rude-Barbato), 2011. 5 6 Settlement Negotiations 9. The parties first discussed settlement during a brief, informal telephone conversation in 7 March, 2011, and then again following Mr. Kreilmann’s deposition on April. Later, in the summer of 8 2011, the parties attempted to schedule a joint mediation with the Plaintiffs in the New Jersey copycat 9 case, Glover v. Ferrero USA, Inc., No. 11-1086-FLW (D.N.J.). The mediation, however, was derailed 10 by New Jersey counsel’s shenanigans in their attempt to wrest away control of the case from Plaintiffs 11 and their counsel. 12 10. Specifically, On July 13, Plaintiffs, Ferrero and Glover agreed they would mediate 13 together, in San Diego, on August 31, with the hopes that the resolution of Glover’s MDL motion 14 scheduled to be heard on July 28 would inform those discussions. 15 11. On July 26, two days before the Judicial Panel on Multidistrict Litigation was to hear 16 Glover’s argument that the first-filed California cases should be centralized with her case in New 17 Jersey, a second plaintiff, Jamie Kaczmarek, filed an action in New Jersey, which was copied verbatim 18 from the Glover complaint (including identical typographical errors), except for the plaintiff-specific 19 allegations. Kaczmarek was represented by counsel who frequently work together with Glover’s 20 counsel. Nevertheless, despite his duty of candor, Glover’s counsel began the hearing by advising the 21 Panel that “since we filed our papers, . . . an action . . . has been recently filed in the District of New 22 Jersey” by “[d]ifferent plaintiffs’ lawyers.” See Excerpts of the Transcript of the July 28, 2011 Hearing 23 before the Judicial Panel on Multidistrict Litigation on Glover’s Motion for Centralization at p.3, 24 attached hereto as Exhibit 1. 25 12. Then, four days after the MDL hearing, apparently confident they would prevail with 26 Ferrero’s support and their piling on in New Jersey, Glover’s counsel unilaterally cancelled the 27 28 2 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 mediation despite their earlier agreement. 1 Because of New Jersey counsel’s gamesmanship 2 surrounding venue, and despite Plaintiffs’ attempts to be inclusive of Glover in settlement proceedings, 3 mediation and further settlement discussions stalled for the next couple months. 4 13. After Plaintiffs filed their Class Certification Motion on August 1 (Dkt. No. 51) and the 5 Court denied Ferrero’s Motion to Dismiss on August 29 (Dkt. No. 69), the Court ordered an Early 6 Neutral Evaluation conference on October 19, 2011, before Honorable Magistrate Judge Cathy Ann 7 Bencivengo (Dkt. No. 70). Two weeks before the ENE, on October 4, 2012, Plaintiffs sent Ferrero a 68 page Memorandum of Understanding constituting an offer of settlement. The MOU suggested 9 injunctive relief comprised of advertising modifications, and a common fund to reimburse class 10 members. It did not discuss attorneys’ fees with any specificity, only generally noting that settlement 11 was not conditioned on Court approval of a fee request. On October 12, 2011, Ferrero said it would 12 discuss the offer further during the ENE the following week. 13 14. During the ENE, which both Plaintiffs attended and participated in, discussions centered 14 on the substantive relief for the class, and attorneys’ fees were not discussed. However, with Plaintiff’s 15 class certification motion still pending, the parties were still far apart in how they valued the case and 16 whether (and how) Ferrero should modify its behavior. Following the ENE, the parties nevertheless 17 agreed to attend a private mediation together with the Glover plaintiffs. 18 15. On November 2, 2011, the parties attended a private mediation session before the 19 Honorable Nichoals J. Politan (Ret.) in West Palm Beach, Florida. Again, there was progress but no 20 resolution. 21 22 1 23 24 25 26 27 Glover was represented by scores of attorneys at several law firms. Nevertheless, according to her counsel, although the three attorneys who were primarily spearheading the New Jersey litigation were available on the date and in the location agreed, another attorney, based in San Diego, had obligations in San Francisco the day before and the day after the mediation, but not on August 31. Glover therefore insisted that all the parties and the San Diego-based mediator travel to San Francisco to accommodate that attorney, rather than proceeding with him available by phone or taking one of the many available daily commuter flights between San Francisco and San Diego, or not mediate at all. By the time that attorney finally agreed on August 10 that he could, in fact, be in San Diego to mediate on August 31, the agreed-upon mediator, the Hon. Leo S. Papas (Ret.), was no longer available. 28 3 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 16. During November, the parties continued to negotiate through periodic email and 2 telephone communications, finally agreeing on approximately November 14, 2011 on most of the 3 injunctive relief provisions embodied in the Settlement Agreement. A few disagreements over some 4 injunctive relief suggested by both parties remained, however, and there was no agreement on the 5 monetary terms of the settlement. 6 17. On November 28, the parties attended a second Settlement Conference before Judge 7 Bencivengo. Again, Plaintiffs were present and active participants, at all times discussing Ferrero’s 8 proposals with counsel, counter-proposals, and assisting in the ultimate decision to accept the terms 9 embodied in the Settlement Agreement. After several hours of negotiation, and with Judge 10 Bencivengo’s ample assistance, the parties finally agreed on all the terms reflected in the Settlement 11 Agreement. The amount of the Injunctive Fee Award Ferrero agreed to pay Class Counsel was the last 12 provision discussed, and then only after the parties had agreed on all the injunctive relief and the class’s 13 common fund. 14 15 Media Coverage of the Settlement 18. The Settlement has received considerable media attention in recent weeks, including 16 being featured on Good Morning America (which interviewed Ms. Rude-Barbato), ABC News, CBS 17 News, npr.org, and many other popular outlets, including online and television. 18 19. A Google News search for “Nutella” on May 22, 2012, showed 6,310 stories about the 19 Settlement in the past month, and a standard Google search for “Nutella AND settlement” generated 20 more than 2.6 million hits. 21 22 Notice to The Attorney General 20. On January 25, 2012, Ferrero provided notice of the Settlement to the Attorney General 23 of the California. 24 21. The notice packet sent to the Attorney General included complete copies of the Master 25 Consolidated Complaint, Plaintiffs’ Memorandum of Points and Authorities in Support of Joint Ex 26 Parte Application for Preliminary Approval of Settlement, the supporting Declaration of Gregory S. 27 Weston and all exhibits attached thereto, including the Claim Form, Publication Notice, and Settlement 28 4 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Notice, a copy of the Order Granting Joint Motion for Preliminary Approval of Settlement, notice of 2 the Fairness Hearing set for July 9, 2012, and a definition of the Settlement Class. 3 22. A true and correct copy of the cover letter sent to the California Attorney General is 4 attached hereto as Exhibit 2. 5 23. To date, the California Attorney General has not requested further information or 6 indicated an intent to object. 7 8 The Strength of the Settlement 24. I believe the Settlement affords the Class a substantial and important benefit, most 9 especially in terms of the injunctive relief whereby Ferrero has agreed to modify Nutella’s advertising 10 wholesale, including changing its label, discontinuing the existing television commercials and shooting 11 new commercials with scripts that Class Counsel has reviewed and provided input on, changes to the 12 Nutella website to remove content attributable to the former Nutella spokesperson, purported children’s 13 nutrition expert Connie Evers, and by agreeing to no longer employ Ms. Evers as Nutella’s 14 spokesperson. 15 25. As laid out in Plaintiffs’ First Amended Consolidated Complaint, the dangers of 16 regularly consuming the amount of sugar and saturated fat in Nutella are well-documented. See FACC 17 ¶¶ 35-43. By prominently disclosing Nutella’s sugar and fat content on the front label (or “Principal 18 Display Panel”) using the Grocery Manufacturers Association front-of-pack nutrition labeling program, 19 consumers will be better informed and able to make choices to promote their health and the health of 20 their children and families. In addition, Ferrero’s agreement to stop using advertising suggestive that 21 Nutella is healthy (such as “balanced breakfast”) will prevent well-meaning health-conscious 22 consumers from inadvertently exposing themselves and their families to increased health risks. 23 26. Even though this alone would be a great benefit for the Class and the public, the 24 Settlement is strong because it also includes a $550,000 fund by which Class Members can be refunded 25 for up to five Nutella purchases. Our calculations based on the sales information Ferrero provided in 26 this case show that this amounts to more than 3% of affected sales. False advertising actions such as 27 this one often settle in that range, but without the addition of the extensive advertising and marketing 28 changes Ferrero has agreed to. 5 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 27. In sum, based on my experience and knowledge of the facts of this case, I believe this 2 Settlement provides the Class and public a strong benefit, primarily from the extensive injunctive relief, 3 but also because of the addition of a monetary component. 4 5 Class Counsel’s Qualifications 28. The Weston Firm’s partners and principal timekeepers on the matter are myself and 6 Gregory Weston. I graduated from New York University, where I was Editor of the Law Review, after 7 which I worked for Baker & Hostetler LLP in New York, then Mayer Brown LLP in Palo Alto, before 8 joining the Weston Firm in 2010. My career has always focused on complex civil litigation, including 9 class actions on both the defense side and, now with the Weston Firm, entirely on the plaintiff side. 10 29. Mr. Weston graduated from Harvard Law School and worked for the law firm now 11 known as Robbins, Geller, Rudman & Dowd until January 2008. Mr. Weston incorporated the Weston 12 Firm on December 31, 2007 and began operations January 7, 2008. During this entire time, all or nearly 13 all of his practice has been representing plaintiffs in consumer fraud and antitrust class actions. 14 30. Courtland Creekmore is a 1994 graduate of the University of San Diego School of Law, 15 and has spent 12 of his 18 years of legal experience litigating class actions, exclusively representing 16 plaintiff consumers, securities investors and homeowners in state and federal courts. From 2004-2010, 17 Mr. Creekmore worked for the law firm now known as Robbins, Geller Rudman & Dowd prosecuting 18 federal securities and accounting fraud cases. From 2001-2004, he worked for Epsten, Grinnell & 19 Howell representing homeowners in construction defect litigation. Mr. Creekmore joined The Weston 20 Firm in 2011. 21 31. Melanie Persinger is a 2010 graduate of University of Michigan Law School where she 22 was Editor of the Michigan Telecommunications and Technology Law Review. She joined the Weston 23 Firm out of law school and has dedicated her entire career to representing plaintiffs in class actions. 24 /// 25 /// 26 /// 27 /// 28 /// 6 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 2 Class Counsel’s Rates 32. The Weston Firm’s requested rates are as follows: 3 Timekeeper Position Graduation Year Hourly Rate 4 Gregory S. Weston Partner 2004 $525 5 Jack Fitzgerald Partner 2004 $525 Courtland Creekmore Associate 1994 $500 Melanie Persinger Associate 2010 $300 - $195 6 7 Paralegals 8 9 33. In June 2011, the Weston Firm was awarded fees based on a rate of $500 in Red v. 10 Unilever United States, No. 10-cv-387-JW (N.D. Cal.). See Unilever Dkt. No. 152 at ¶ 5 (showing $500 11 rate for attorneys Weston and Fitzgerald), Dkt. No. 163 (Order granting Final Approval). In addition, 12 this past April, the Honorable Margaret M. Morrow awarded the Weston Firm fees in connection with 13 settling a lawsuit against Smart Balance, Inc., based on hourly rates of $500 for Weston and Fitzgerald, 14 $275 for Ms. Persinger, and $150 for paralegals. Relevant excerpts of Judge Morrow’s Tentative 15 Order, 2 which has not yet been entered, are attached hereto as Exhibit 3. The firm’s current rates 16 reflect a modest increase since Judge Ware approved its partners’ rates of $500 last June. 17 34. These rates are consistent with the prevailing rates for attorneys of similar experience, 18 skill and reputation. For example, several courts in this district have approved fee ranges into which 19 Class Counsel’s rates easily fall. For example, in Hartless v. Clorox Co., 273 F.R.D. 630, 644 (S.D. 20 Cal. 2011), the Honorable Cathy Ann Bencivengo—who was the Magistrate Judge who assisted in 21 reaching the Settlement Agreement in this case—affirmed rates of “$675 [sic] for an experienced 22 partner’s time to $100 per hour for a paralegal’s time.” Id. at 644. The specific rates approved were as 23 follows: 3 24 2 Because the Tentative Order was 64 pages and discussed a number of issues not relevant here (such as class certification and motion to intervene filed in connection with the settlement), I attach only 26 the relevant portions. 25 3 27 See Hartless v. Clorox Co., No. 06-cv-2705-CAB (S.D. Cal.), Dkt. Nos. 82, 84-85, 87-88 (declarations in support of motion for attorneys fees). 28 7 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Timekeeper 2 Position Rate Blood Hurst & O’Reardon LLP 3 Timothy G. Blood Partner $665 Leslie E. Hurst Partner $585 Thomas J. O’Reardon II Partner $510 - $260 4 5 6 7 Paralegal Robbins Geller Rudman & Dowd LLP 8 Timothy G. Blood Partner $655 10 Kevin K. Green Partner $615 11 Leslie E. Hurst Partner $585 12 Rachel Jensen Partner $565 13 Catherine J. Kowalewski Partner $555 Cory Miller Associate $410 Ivy Ngo Associate $380 Thomas O’Reardon Associate $345 Paula Roach Of Counsel $345 Pamela M. Parker Of Counsel $620 20 John J. Stoia Of Counsel $795 21 Lauren Ledzion Project Attorney $350 22 Vincent M. Serra Project Attorney $345 23 Paralegals - $240 - $295 9 14 15 16 17 18 19 24 25 26 27 Bonnett, Fairbourn, Friedman & Balint, P.C. Andrew S. Friedman Shareholder $650 Elaine A. Ryan Shareholder $575 T. Brent Jordan Associate $500 28 8 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Timekeeper Position Rate Patricia N. Syverson Associate $400 Manfred C. Muecke Associate $375 Todd D. Carpenter Associate $375 Michael D. Sandulak Associate $350 7 Michael C. McKay Associate $250 8 Paralegals - $100 - $175 2 3 4 5 6 Bock Hatch, LLC 9 10 Richard J. Doherty Not Provided $450 11 Phillip A. Bock Not Provided $450 12 James M. Smith Not Provided $350 13 Lisa Vandercruyssen Associate $285 - $100 14 Paralegal 15 LakinChapman, LLC 16 Paul Marks Not Provided $303 Marc W. Parker Not Provided $396 Crystal Duckett Paralegal $108 17 18 19 20 35. In awarding these rates, Judge Bencivengo noted that “the rates charged by the attorneys 21 and paralegals in this action” were reasonable “based on the Court’s familiarity with the rates charged 22 by other firms in the San Diego area[.]” Id. 23 36. In another recent Southern District of California case, the Honorable Herbert B. 24 Hoffman (Special Master) approved a fee award based on attorney rates of $695, $595, and $550 for 25 26 27 28 9 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 partners; $395 and $245 for associates; and $125 to $150 for paralegals. See Cohorst v. BRE Props., 2 2011 U.S. Dist. LEXIS 151719 (S.D. Cal. Nov. 9, 2011). 4 3 37. Similarly, in Iorio v. Allianz Life Ins. Co. of N. Am., Inc., 2011 U.S. Dist. LEXIS 21824, 4 at *31-32 (S.D. Cal. Mar. 3, 2011), the Honorable Janis L. Sammartino approved the following rates: 5 Position 5 Rate Robert S. Gianelli Partner $750 Raymond E. Mattison Partner $750 Don A. Ernst Partner $750 10 Ronald A. Marron Partner $595 11 Dean Goetz Not Provided $595 12 Sherril Neil Babcock Not Provided $575 13 Christopher D. Edgington Associate $575 14 Jully C. Pae Associate $500 Richard R. Fruto Associate $410 Joanne Victor Not Provided $450 Scott Juretic Not Provided $410 - $195 Timekeeper 6 7 8 9 15 16 17 18 Paralegals 19 20 38. Survey data further confirm the reasonableness of Class Counsel’s rates. A 2007 survey 21 by the National Law Journal shows rates for attorneys at Luce, Forward, Hamilton & Scripps’ San 22 Diego offices as between $325 and $725 for partners, with an average of $465 and median of $475, and 23 associates with rates between $220 and $450, with an average of $281 and a median of $280. These 24 rates, adjusted to 2012 dollars, are summarized as follows: 25 4 See Cohorst, No. 10-cv-2666-JM-BGS (S.D. Cal.), Dkt. Nos. 57-4, 57-8, and 57-9 (declarations 26 in support of fee application showing hourly rates). 5 27 See Iorio, No. 5-cv-633-JLS-CAB (S.D. Cal.), Dkt. No. 469 at 16-19 (fee motion describing timekeepers’ experience). 28 10 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Position 2007 Range 2012 Range 2007 Average 2012 Average 2007 Median 2012 Median 3 Partner $325-$725 $360-$804 $465 $516 $475 $527 4 Associate $220-$450 $244-$499 $281 $311 $280 $310 2 5 39. Thus, the firm’s requested partner rate of $525, and requested associate rate of $295, fall 6 within, and below the average/median range of the typical rates of a San Diego law firm that practices 7 complex litigation. See generally Catala v. Resurgent Capital Servs., L.P., 2010 U.S. Dist. LEXIS 8 63501, at *19 n.3 (S.D. Cal. June 22, 2010) (relying on same to award fees). 9 40. A 2010 survey by the National Law Journal shows rates of firms in Los Angeles from 10 $350-$670 for partners and $245-445 for associates. According to the same survey (including the 2009 11 version), 6 although the rates of defense counsel in this case are not provided, the chart below shows the 12 rates charged by the firms currently defending other food companies in cases brought by clients of 13 Class Counsel involving misleading health claims. 7 14 Firm 15 16 Greenberg Traurig 17 (New York Office) 18 Winston & Strawn (Chicago Office) 19 Jenner & Block 20 (Chicago Office) 21 22 41. Median Partner Billing Rate Median Associate Billing Rate $580 (2010) $350 (2010) $660 (2010) $375 (2010) $625 (2009) $400 (2009) The Weston Firm’s blended rate of $431.62 in this case ($511,255 divided by 1,184.5 23 hours) also falls below that recently approved by another Southern District court. Stuart v. RadioShack 24 6 Copies of the NLJ surveys are in Class Counsel’s possession but are not being filed due to their volume. 25 7 See Yumul v. Smart Balance, Inc., No. 10-cv-927 (C.D. Cal.) (Smart Balance represented by 26 Greenberg Traurig); Henderson v. The J.M. Smucker Company, No. 10-cv-4524 (C.D. Cal.) (Smucker 27 represented by Winston & Strawn); Red v. Kraft Foods, Inc. et al., Lead Case No. 10-cv-1028 (C.D. Cal.) (Kraft represented by Jenner & Block). 28 11 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 Corp., 2010 U.S. Dist. LEXIS 92067, at *16-18 (S.D. Cal. Aug. 9, 2010) (finding blended rate of $708 2 reasonable, “particularly when no multiplier is being sought on top of the lodestar”). 3 4 Class Counsel’s Time Billed 42. Our firm’s practice is to keep contemporaneous records for each timekeeper and to 5 regularly record time records in the normal course of business, and we kept time records in this case 6 consistent with that practice. Moreover, our firm’s practice is to bill in 6-minute (tenth-of-hour) 7 increments. The firm’s billing records are available to submit to the Court for in camera review upon 8 request. 9 43. The total lodestar for the Weston Firm in this matter is $509,882.50, reflecting 910 10 attorney hours, and 274.5 paralegal hours (split among 5 paralegals who billed between 6.2 and 130.7 11 hours on the case). 8 The Weston Firm’s lodestar is summarized in Appendix 1 to Plaintiffs’ fee motion. 12 Prior to finalizing the firm’s lodestar, we carefully reviewed our hours and made cuts for time entry 13 errors, duplications, and instances where we determined the hours should be reduced or not billed. 14 44. Although the hours billed may be seemingly high given the length of the litigation, that 15 is because of its intensity, as the Docket evidences, including four complaints (Hohenberg, Rude16 Barbato, Master Consolidated Complaint, First Amended Consolidated Complaint); many substantive 17 and procedural motions and an MDL motion; three settlement conferences or mediations; and 18 substantial written discovery and depositions, including from nine third parties, all in less than a year. 19 The time also reflects Class Counsel’s work on behalf of Plaintiffs in attempting to intervene in the 20 New Jersey action in order to protect the interests of the then-putative class from both inconsistent 21 decisions and judgments which might have an effect in this case, and from a reverse auction scenario 22 by counsel more interested in settling the case away than litigating it for the Class’s benefit. 23 45. Moreover, the hours billed of 127.4 per month are within the range approved as 24 reasonable by other courts in similar false advertising actions. See Brazil v. Dell Inc., 2012 U.S. Dist. 25 LEXIS 47986 (N.D. Cal. Apr. 4, 2012) (in false advertising action, approving fee based on 15,855.5 26 8 27 As noted in Class Counsel’s fee application, App. 1 n.1, Class Counsel’s total lodestar includes post-application time at a blended rate. That time, however, is not specifically addressed here. 28 12 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 hours spent over 55 months, or 288 hours/month); Friedman v. 24 Hour Fitness USA, Inc., 2010 U.S. 2 Dist. LEXIS 143816 (C.D. Cal. July 12, 2010) (in action alleging false advertising under UCL and 3 CLRA, and RICO violation, finding reasonable 22,578.01 hours over 45 months, or 501.7 4 hours/month); Wilson v. Airborne, Inc., 2008 U.S. Dist. LEXIS 110411 (C.D. Cal. Aug. 13, 2008) (in 5 false advertising action, finding reasonable 3,706.6 hours over 24 months, or 154.4 hours/month); 6 Browning v. Yahoo! Inc., 2007 U.S. Dist. LEXIS 86266 (N.D. Cal. Nov. 16, 2007) (finding reasonable 7 4,798.7 hours over 38 months, or 126.3 hours/month); Yoo v. Wendy’s Int’l, Inc., No. 07-4515 (C.D. 8 Cal. Mar. 9, 2009), Dkt. No. 89 (in action alleging false advertising of food, approving fee based on 9 1,630 hours spent over 17 months, or 95.9 hours/month). 10 46. The strongest evidence of the reasonability of Class Counsel’s hours worked, however, 11 comes from comparing the hours to those spent in the New Jersey Glover action. Although the actions 12 consolidated there were filed more than three weeks (Glover, filed February 27, 2011) and almost 6 13 months (Kaczmarek, filed July 26, 2011) later than these actions (February 1 and 4, 2011, respectively), 14 and involved virtually no motion practice, did not have a certified class, relied on the discovery sought 15 and obtained by Plaintiffs in this case, and merely settled on the heels of this action, on identical terms 16 (other than Ferrero’s agreement to pay New Jersey counsel millions more in fees), New Jersey counsel 17 claim 3,000 hours (see Glover Dkt. No. 69-1 at 3, 12), for a total lodestar of $1.8 million (and then 18 request a 2.09 multiplier on top of that for a total fee of $3,750,000, of which $750,000 is to come from 19 that class’s $2,500,000 restitution fund). Class Counsel’s hours here are conservative by comparison. 20 21 The Risk of Non-Payment 47. The Federal Judicial Center published a report in 1996 titled, “Empirical Study of Class 22 Actions in Four Federal District Courts: Final Report to the Advisory Committee on Civil Rules (“FJC 23 Report”). The study was requested by the Judicial Conference Advisory Committee on Civil Rules 24 when it was considering proposals to amend Rule 23 of the Federal Rules of Civil Procedure. The study 25 is based on 407 class actions lawsuits that either settled or went to verdict in the two-year period from 26 July 1, 1992 to June 30, 1994 in the following four federal judicial districts: the Eastern District of 27 Pennsylvania (Philadelphia); the Southern District of Florida (Miami); the Northern District of Illinois 28 (Chicago); and the Northern District of California (San Francisco). FJC Report at 3-4, 7-8. 13 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 48. For the 407 class actions, the FJC Report reports the following regarding class 2 certification: 3 • In 59 cases (14.5%), the class claims were certified for settlement purposes only. Id. at 35. 4 • In 93 cases (22.85%), the class claims were certified unconditionally. Id. 5 • Therefore, a total of 152 cases (37.35%) had certified classes, and the other 255 (62.65%) 6 did not. Id. 7 • In at least 23 of the certified classes, the outcome was unfavorable to Plaintiffs. This is 8 based on Table 39 of the FJC Report (at p. 179), which lists the following outcomes adverse 9 to plaintiffs in certified class cases (excluding classes certified for settlement purposes 10 only): nine dismissals by motion, one stipulated dismissal, one non-class settlement, and 11 twelve summary judgments. Id. at 179, App. C, Table 39. 12 49. Thus, in sum, the successful class claims from the total 407 filed class actions totaled 13 129 or less (152 minus 23). Using the number 129/407 to get a percentage, 31.7% or less of the filed 14 cases resulted in successful class outcomes for plaintiffs. This does not account for degree of success 15 (i.e., some cases could have resulted in minimal or partial success and would still be in the successful 16 claim category). 17 Class Counsel’s Expenses 18 50. A summary of Class Counsel’s expenses in the amount of $9,437.71 is provided in 19 Appendix 2 to Plaintiffs’ fee application. This includes $6,266.19 in recoverable costs, consisting of 20 costs for court fees, deposition costs for transcribing, recording and travel, and service of process fees; 21 and $3,171.52 in costs reasonably necessary to conduct the litigation including, for example, travel 22 costs associated with court hearings, transportation and parking costs, costs for local New Jersey 23 counsel (as required by that court’s local rules), and deposition supplies. 24 51. Class Counsel incurred additional costs for which it does not seek reimbursement, 25 including photocopying (internal and external), postage and overnight delivery, meals, including while 26 traveling, legal research and PACER charges. I estimate these uncharged costs to our firm to be over 27 $3,000. 28 14 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 2 Notice and Administration Costs 52. The parties in this action and the 49-state action coordinated in providing class notice, 3 and are using the same administrator to process class claims (although the claims themselves are being 4 handled separately, with each case’s respective restitution fund being held in a separate account, etc.). 5 The parties agreed that each case should share the costs in proportion to the sales, meaning the 6 California fund is responsible for 12.4% of the costs. According to the claims administrator, as of May 7 23, 2012, based on the current claims filed, the current overall estimate for notice and administration 8 costs relating to both the California and 49-State Settlement is $566,564. The California fund’s 12.4% 9 share is approximately $70,250 (12.7% of the fund), while the 49-State Fund’s share is approximately 10 $501,975 (20% of its fund). 11 12 I declare under penalty of perjury that the foregoing is true and correct to the best of my 13 knowledge. Executed on May 25, 2012 in Santa Clara, California. 14 /s/ Jack Fitzgerald Jack Fitzgerald 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION 1 DATED: May 25, 2012 Respectfully Submitted, 2 /s/ Jack Fitzgerald Jack Fitzgerald 3 THE WESTON FIRM GREGORY S. WESTON JACK FITZGERALD MELANIE PERSINGER COURTLAND CREEKMORE 1405 Morena Blvd., Suite 201 San Diego, CA 92109 Telephone: (619) 798-2006 Facsimile: (480) 247-4553 4 5 6 7 8 9 14 LAW OFFICES OF RONALD A. MARRON, APLC RONALD A. MARRON MAGGIE REALIN B. SKYE RESENDES 3636 4th Street, Suite 202 San Diego, CA 92103 Telephone: (619) 696-9006 Facsimile: (619) 564-6665 15 Class Counsel 10 11 12 13 16 17 18 19 20 21 22 23 24 25 26 27 28 16 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC DECLARATION OF JACK FITZGERALD IN SUPPORT OF FINAL APPROVAL AND FEE APPLICATION EXHIBIT 1 Case NJ/3:11-cv-01086 Document 22 Filed 09/06/11 Page 1 of 17 1 UNITED STATES JUDICIAL PANEL 2 ON 3 MULTIDISTRICT LITIGATION 4 SAN FRANCISCO, CALIFORNIA; CEREMONIAL COURTROOM, NINETEENTH 5 FLOOR; JUDGE DAMRELL, JUDGE VRATIL, JUDGE HEYBURN, JUDGE 6 1 FURGESON, JUDGE JONES 7 IN RE: 8 AND SALES PRACTICES LITIGATION) THURSDAY, JULY 28, 2011 9 ______________________________) ORAL ARGUMENT 10 NUTELLA MARKETING ) MDL NO. 2248 REPORTER'S TRANSCRIPT OF PROCEEDINGS 11 APPEARANCES: 12 FOR THE PLAINTIFF MARNIE GLOVER: 13 15 SCOTT & SCOTT BY: JOSEPH P. GUGLIELMO, ATTORNEY AT LAW (SPEAKER ONE) 500 FIFTH AVENUE, SUITE 40 FOUR MINUTES NEW YORK, NEW YORK 10110-4099 ONE MINUTE REBUTTAL TEL (212) 302-0201 16 FOR THE PLAINTIFF ATHENA HOHENBERG AND LAURA RUDE-BARBATO: 17 THE WESTON FIRM BY: GREGORY S. WESTON, ATTORNEY AT LAW 888 TURQUOISE STREET SAN DIEGO, CALIFORNIA 92109 TEL (858) 488-1672 FAX (480) 247-4553 GREG@WESTONFIRM.COM 14 18 19 (SPEAKER TWO) FIVE MINUTES 20 FOR FERRERO U.S.A., INC: 21 22 23 WILSON SONSINI GOODRICH & ROSATI BY: KEITH E. EGGLETON, ATTORNEY AT LAW (SPEAKER THREE) 650 PAGE MILL ROAD PALO ALTO, CALIFORNIA 94304-1050 TEL (650) 493-9300 FAX (650) 493-6811 24 25 REPORTED BY: STARR A. WILSON, CSR 2462 Case NJ/3:11-cv-01086 Document 22 Filed 09/06/11 Page 3 of 17 3 1 SAN FRANCISCO, CALIFORNIA; THURSDAY, JULY 28, 2011; 10:25 2 A.M., CEREMONIAL COURTROOM, NINETEENTH FLOOR, JUDGE DAMRELL, 3 JUDGE VRATIL, JUDGE HEYBURN, JUDGE FURGESON, JUDGE JONES 4 -oOo- 5 6 Next is MDL 2248. JUDGE HEYBURN: Nutella Marketing and Sales. 7 Mr. Guglielmo. 8 MR. GUGLIELMO: 9 Good morning. Thank you. My name is Joseph Guglielmo from 10 Scott & Scott. 11 is the movant in this action seeking consolidation and 12 centralization to the District of New Jersey before the 13 Honorable Freda Wolfson. 14 I represent the Plaintiff Marnie Glover, who Your Honor, to update the panel briefly, there are 15 now five federal cases pending. 16 filed our papers, have notified the panel of an action that 17 has been recently filed in the District of New Jersey as 18 well as an additional action in the Northern District of 19 California. 20 21 JUDGE FURGESON: These are all with different plaintiffs' lawyers? 22 23 Um, Defendants, since we MR. GUGLIELMO: yes. Different plaintiffs' lawyers, All of these cases are asserting nationwide classes. 24 As we set forth in our papers, and as the 25 Defendants have set forth in their papers, both the EXHIBIT 2 EXHIBIT 3 ,-,* 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 Case No. CV 10-00927 MMM (AJWx) 12 13 14 15 16 In Re NUCOA REAL MARGARINE ORDER CERTIFYING SETTLEMENT LITIGATION CLASS, APPROVING FINAL SETTLEMENT, DENYING MOTION TO INTERVENE, AND AWARDING ATTORNEYS' FEES, INCENTIVE AWARD, AND COSTS 17 18 19 Rebecca Yumul commenced this action of February 8, 2010 on behalf of herself, and all 20 others similarly situated, against Smart Balance, Inc.1 In the currently operative complaint, 21 Yumul pleads claims for violation of California's unfair competition law ("UCL"), California 22 Business & Professions Code § 17200 et seq.; violation of California's false advertising law 23 ("FAL"), California Business & Professions Code § 17500 et seq.; and violation of California's 24 Consumer Legal Remedies Act ("CLRA"), California Civil Code § 1750 et seq.2 Yumul alleges 25 26 'Complaint for Violations of Unfair Competition Law, False Advertising Law, and 27 Consumer Legal Remedies Act ("Complaint"), Docket No. 1 (Feb. 8, 2010). 28 2Fourth Amended Complaint ("FAC"), Docket No. 95 (Jun. 3, 2011).

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