Beaver et al v. Tarsadia Hotels et al

Filing 314

ORDER Granting 286 Motion for Final Approval of Class Action Settlement and Judgment; Granting 287 Motion for Attorney Fees; Granting Plaintiffs' Request for Service Awards; Granting Joint 309 Motion Regarding Lien. Signed by Judge Gonzalo P. Curiel on 9/28/17. (All non-registered users served via U.S. Mail Service)(dlg)

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1 ‘ 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 9 10 11 SOUTHERN DISTRICT OF CALIFORNIA DEAN BEAVER AND LAURIE Case No. 11-cv-01842-GPC-KSC BEAVER, HUSBAND AND WIFE; et al., ORDER: 12 13 Plaintiffs, v. 14 15 16 17 18 19 20 21 TARSADIA HOTELS, A CALIFORNIA CORPORATION; et al., Defendants. 1) GRANTING PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND JUDGMENT; 2) GRANTING PLAINTIFFS’ APPLICATION FOR ATTORNEY’S FEES AND COSTS; AND 3) GRANTING PLAINTIFFS’ REQUEST FOR SERVICE AWARDS 4) GRANTING JOINT MOTION REGARDING LIEN [Dkt. Nos. 286, 287, 309.] 22 23 24 25 26 27 28 On August 9, 2017, Plaintiffs Dean Beaver, Laurie Beaver, Steven Adelman, Abraham Aghachi, Dinesh Gauba, Kevin Kenna, and Veronica Kenna (collectively 1 11cv1842-GPC(KSC) 1 “Plaintiffs”) filed a Motion for Final Approval of Class Settlement and Application for 2 Attorneys’ Fees and Costs, and Service Awards. (Dkt. Nos. 286, 287.) Tarsadia 3 Defendants1 and Third Party Defendant Greenberg Traurig LLP (“GT”) do not oppose the 4 motions. On September 1, 2017, Garden City Group, LLC (“GCG”), the Settlement 5 Administrator, filed a declaration regarding exclusions and objections; Plaintiffs filed a 6 status report regarding the response to the Notice Program; and GT filed a non-opposition 7 to the motion for final approval of class action settlement, application for attorneys’ fees 8 and costs, and service awards for class representatives. (Dkt. Nos. 304, 305, 306.) The 9 Court held a final approval hearing on September 15, 2017 at 1:30 p.m., pursuant to the 10 Preliminary Approval Order dated May 24, 2017. (Dkt. No. 307.) Tyler Meade, Esq., 11 Michael Schrag, Esq., and Michael Reiser, Esq. appeared on behalf of Plaintiffs, Lynn 12 Galuppo, Esq. appeared on behalf of Tarsadia Defendants, and Michael McNamara, Esq., 13 Kirsten Spira, Esq. and Wesley Griffith, Esq. appeared on behalf of Third Party Defendant 14 Greenberg Traurig, LLP. Based on the reasoning below, the Court GRANTS Plaintiffs’ motion for final 15 16 approval of class action settlement and judgment and GRANTS Plaintiffs’ application for 17 attorneys’ fees and costs, and service awards. 18 Procedural Background 19 In May 2011, Plaintiffs filed a putative class action alleging that the Tarsadia 20 Defendants violated various federal and state laws, including the Interstate Land Sales Full 21 Disclosure Act, 15 U.S.C. §§ 1701, et seq. (“ILSA”) and the California Unfair 22 Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. (“UCL”), in connection with 23 the sale of condominium units at the Hard Rock. (Dkt. No. 1.) Specifically, in the 24 operative Third Amended Complaint (“TAC”), Plaintiffs alleged, in part, that the Tarsadia 25 Defendants violated ILSA by failing to do three things that the statute required: (1) register 26 the Hard Rock with the U.S. Department of Housing and Urban Development (“HUD”); 27 28 The remaining Tarsadia Defendants are Tarsadia Hotels, Gregory Casserly, 5th Rock LLC, and Gaslamp Holdings, LLC. 1 2 11cv1842-GPC(KSC) 1 (2) obtain and distribute to Class members a HUD property report; and (3) include ILSA- 2 specified cure language in the purchase contracts. (Dkt. No. 69, TAC at ¶¶ 8-10.) As a 3 result, Plaintiffs and Class members had an absolute two-year right under ILSA to rescind 4 their purchase contracts. (Id. at ¶ 10.) The Tarsadia Defendants were required but failed 5 to disclose this rescission right to Plaintiffs. (Id. at ¶¶ 11-12.) This constituted the fourth 6 ILSA violation and these ILSA violations were the unlawful acts central to Plaintiffs’ UCL 7 claim. 8 Tarsadia Defendants failed to disclose this rescission right and told all Class 9 members that they would lose their substantial deposits if they failed to close escrow on 10 their respective condominium units. (Id. at ¶¶ 68-70.) Plaintiffs and most Class members 11 closed escrow in the latter half of 2007, when the real estate market in San Diego was 12 beginning a steep decline and the lending market was constricting. (Id. at ¶¶ 86-88.) 13 Plaintiffs testified that they would have cancelled their purchase contracts prior to closing 14 escrow had the Tarsadia Defendants disclosed their rescission rights under ILSA. (Dkt. 15 No. 81-1 at 32-33.) 16 Tarsadia Defendants disputed liability and class certification through six years of 17 vigorous litigation that included extensive fact and expert discovery and motion practice. 18 The litigation began with defendants filing four motions to dismiss plus a motion for 19 judgment on the pleadings. Defendants did not answer until a year after the case was first 20 filed. A year of intensive discovery followed, with defendants producing more than 21 400,000 pages that Class Counsel had to review and analyze. (Dkt. No. 273-1, Schrag 22 Decl. ¶ 24.) The Parties took more than 20 depositions in 2013. (Id. ¶ 25.) 23 In 2013, Plaintiffs moved to certify a class, and Plaintiffs, the Tarsadia Defendants, 24 and Playground Destination Properties, Inc. (“Playground”), which is no longer in the 25 case, also filed cross-motions for summary judgment. In October 2013, this Court 26 accepted Plaintiffs’ arguments that uncontroverted evidence demonstrated that ILSA 27 applied and that the Tarsadia Defendants violated it such that an unlawful prong UCL 28 violation was established as a matter of law, but nevertheless granted the Tarsadia 3 11cv1842-GPC(KSC) 1 Defendants’ motion for summary judgment on the ground that the UCL claim was barred 2 by ILSA’s three-year statute of limitations. (Dkt. No. 128.) The Court further granted 3 summary judgment as to Playground. (Id.) This ruling represented a complete loss on the 4 merits of the case after two and a half years of intensive litigation. 5 This Court’s initial ruling on the statute of limitations followed several district court 6 decisions interpreting Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1007 n. 3 (9th Cir. 7 2008), to mean that where a plaintiff’s UCL unlawful prong claim is based on a violation 8 of a federal law, the federal and not the UCL statute of limitations applies if the time to file 9 under the federal statute is shorter. (Dkt. No. 128 at 40-41.) Believing that these decisions 10 misinterpreted Silvas, Plaintiffs added appellate counsel Michael Rubin to their team and 11 moved for reconsideration based on preemption principles. (Dkt. No. 138.) 12 Eight months later, in July 2014, Plaintiffs prevailed on this motion, obtaining 13 partial summary judgment on their UCL claim. The Court held that the Tarsadia 14 Defendants violated the unlawful prong of the UCL by failing to comply with ILSA’s 15 disclosure requirements and that the UCL’s four-year statute of limitations applied to this 16 claim. (Dkt. No. 153.) 17 In August 2014, Tarsadia Defendants moved for reconsideration or, in the 18 alternative, for certification of an interlocutory appeal. (Dkt. Nos. 155, 158.) While this 19 motion was pending, Congress amended ILSA to expressly exempt condominiums from 20 ILSA’s registration and disclosure requirements. The Tarsadia Defendants argued this 21 amendment should be applied retroactively to bar this action. (Dkt. No. 163.) In October 22 2014, after extensive briefing on these issues, the Court ruled that the amendment to ILSA 23 should not be applied retroactively, but simultaneously certified three issues for 24 interlocutory appeal: (1) whether the Hard Rock project is subject to ILSA because its 25 condominium units are “lots” to which the Improved Lot Exemption does not apply; (2) 26 whether Plaintiffs’ UCL claim is governed by the UCL’s four-year statute of limitations or 27 ILSA’s shorter limitations period; and (3) whether Congress intended its 2014 amendment 28 to ILSA to apply retroactively to this action. (Dkt. No. 177.) The case was on appeal for 4 11cv1842-GPC(KSC) 1 nearly a year and a half, and on March 10, 2016, the Ninth Circuit affirmed the partial 2 summary judgment ruling in Plaintiffs’ favor on all three issues. See Beaver v. Tarsadia 3 Hotels, 816 F.3d 1170 (9th Cir. 2016). This ruling firmly established that the UCL statute 4 of limitations applies to all UCL actions, including those that “borrow” a federal predicate 5 violation with a shorter limitations period. Id. at 1179-1181. 6 Meanwhile, while the main litigation was proceeding, Tarsadia Defendants claimed 7 in a third-party complaint that GT negligently advised them that ILSA did not apply to the 8 Hard Rock, and that any restitution the Tarsadia Defendants may owe Plaintiffs and Class 9 members is a result of this malpractice. (Dkt. No. 106-2, Third Party Compl.) In its 10 answer, GT denied any wrongdoing whatsoever and raised numerous affirmative defenses. 11 (Dkt. No. 140.) This third-party action had been stayed since June 30, 2014, (Dkt. No. 12 152), but following remand from the Ninth Circuit, GT moved for permission to join the 13 litigation on Tarsadia Defendants’ defense on the two remaining and related issues in the 14 case: class certification and remedies. (Dkt. No. 211.) On June 27, 2016, the Court 15 granted GT permission to participate in the defense of this main action. (Dkt. No. 218.) 16 Earlier, the Court had deferred its ruling on whether to certify a class. (Dkt. No. 17 108.) Plaintiffs filed a renewed motion for class certification on July 1, 2016. (Dkt. No. 18 219.) The Tarsadia Defendants and GT opposed, focusing primarily on the contention that 19 Plaintiffs’ proposed method for calculating UCL restitution was prohibited under Ninth 20 Circuit authority. (Dkt. Nos. 229, 230.) 21 The Court stated that it was likely to certify a class on the issue of liability, but 22 expressed its view that certifying the issue of remedies for class treatment “was a much 23 more complicated question.” (Id. at 4.) The Court explained that it was not yet convinced 24 that Plaintiffs had proffered a viable remedies model that “matche[d] the theory of 25 liability.” Id. The Court allowed the Tarsadia Defendants and GT to file supplemental 26 briefs on Plaintiffs’ proposed restitution model. (Dkt. No. 240.) The Court also 27 encouraged the Parties to attempt to settle the case. (Dkt. No. 273-15 at 7) (“Given that 28 and given the uncertainty that remains with respect to any number of these issues, I would 5 11cv1842-GPC(KSC) 1 expect and I would hope that the parties would look at all of this uncertainty as a means to 2 try to resolve this case amongst yourselves”). In order to pursue mediation and potential 3 settlement, the Parties agreed to stay the action to delay the Court’s ruling on class 4 certification and the Court granted the requested stay. (Dkt. Nos. 248, 251.) 5 The Parties participated in an Early Neutral Evaluation in 2012, an all-day 6 mediation in 2013, and a settlement conference with Magistrate Judge Karen Crawford in 7 2014, none of which resulted in a settlement. Pursuant to the Court’s suggestion at the 8 August 2016 hearing, the Parties engaged in a day-long mediation before Honorable Carl 9 J. West (Ret.) of JAMS on December 15, 2016. Although the Parties did not reach 10 agreement on that day, they made substantial progress and continued negotiations with 11 Judge West’s assistance during the following days. (Dkt. No. 273-1, Schrag Decl. ¶ 26.) 12 Upon the Parties’ joint motion, the Court continued the stay through December 22, 2016. 13 (Dkt. No. 255.) The Parties ultimately settled the entire case, including the third-party 14 claims against GT, on December 21, 2016. Over the next four months, the Parties, with 15 assistance from Judge West, then negotiated the detailed terms of the Settlement. (Dkt. 16 Nos. 258, 259, 260, 263, 265, 266.) On April 24, 2017, Plaintiffs filed their motion for 17 order granting preliminary approval of class action settlement. (Dkt. No. 274.) On May 18 24, 2017, the Court granted Plaintiff’s unopposed motion for preliminary approval of class 19 action settlement, directing issuance of notice, and setting final approval hearing. (Dkt. 20 No. 278.) In compliance with the preliminary approval order, on August 9, 2017, 21 Plaintiffs filed the instant motion for final approval of class settlement and application for 22 attorneys’ fees and costs and for service awards. (Dkt. Nos. 286, 287.) Legal Standard 23 24 The Ninth Circuit adheres to a “strong judicial policy that favors settlements, 25 particularly where complex class action litigation is concerned.” Class Plaintiffs v. City of 26 Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); see also Rodriguez v. W. Publ’g Corp., 563 27 F.3d 948, 965 (9th Cir. 2009) (“We put a good deal of stock in the product of an arms- 28 length, non-collusive, negotiated resolution[.]”). “[T]he decision to approve or reject a 6 11cv1842-GPC(KSC) 1 settlement is committed to the sound discretion of the trial judge[.]” Hanlon v. Chrysler 2 Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). Federal Rule of Civil Procedure 23(e) provides that a court may approve a proposed 3 4 settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.” 5 Fed. R. Civ. P. 23(e)(2); see also Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003). 6 In making this determination, a district court must consider a number of factors, including, 7 but not limited to: 8 the strength of plaintiffs’ 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. 9 10 11 12 13 Staton, 327 F.3d at 959 (internal citation and quotation marks omitted). 14 In examining the settlement for “overall fairness,” a court must review the 15 settlement “as a whole, rather than the individual component parts.” Hanlon, 150 F.3d at 16 1026. A court cannot “delete, modify or substitute certain provisions.” Officers for 17 Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d 615, 630 (9th 18 19 20 21 Cir. 1982). Rather, “[t]he settlement must stand or fall in its entirety.” Hanlon, 150 F.3d at 1026. A. The Settlement is Fair, Adequate and Reasonable 1. 22 The Strength of Plaintiffs’ Case and the Risk, Expense, Complexity, and Likely Duration of Further Litigation2 23 24 25 26 27 28 Plaintiffs do not specifically address the risk of maintaining class action status throughout the trial factor. However, under the analysis in this section, the issue is raised as to whether the Court would have certified a class based on remedies which would result in individualized trials on restitution. Thus, the Court concludes that there is risk that Plaintiffs would not be able to maintain a class action on both liability and remedies if they proceeded to trial. 2 7 11cv1842-GPC(KSC) 1 “The value of a class action ‘depends largely on the certification of the class,’ and... 2 class certification undeniably represents a serious risk for plaintiffs in any class action 3 lawsuit.” Acosta v. Trans Union, LLC, 243 F.R.D. 377, 392 (C.D. Cal. 2007). 4 While Plaintiffs’ case is strong in that they overcame substantial hurdles, including 5 motions to dismiss, an adverse summary judgment ruling, an interlocutory appeal, and 6 they eventually prevailed on liability on the UCL claim, major risks in further litigation of 7 this action remain. First, whether the Court would certify a class and, if so, whether 8 certification would extend to both liability and remedies remains uncertain. 9 10 11 12 13 14 15 16 17 18 19 Certification of a liability-only class would create a complex, uncertain and expensive process for obtaining individualized restitution for absent class members. It would force the parties to spend considerable time and resources on a remedies trial, including engaging expert witnesses for updated reports on the fluid values of Plaintiffs’ and Class members’ units. In addition, a trial and any post-trial motions and appeals would also further delay the resolution of this case, which was initiated in May 2011. Moreover, there is still the possible risk that the Court could deny class certification altogether and the case would dwindle from an action involving a class of approximately 360 unit purchasers, or groups of unit purchasers, to merely purchasers of four units. Most significantly, Plaintiffs faced great risk as to what remedies model the Court 20 would ultimately adopt. Plaintiffs believe their core restitution model, calculated by 21 restoring Plaintiffs’ purchase amounts and then, to avoid a windfall, applying appropriate 22 setoffs such as the current value of the units, is both permissible under the UCL and best 23 fits the facts of this unique case. See Spann v. J.C. Penney Corp., No. SA CV 12-215 24 FMO(RNBx), 2015 WL 1526559 (C.D. Cal. 2015); People v. Superior Court (Jayhill), 9 25 Cal. 3d 283 (1973). The Tarsadia Defendants and GT, however, have strenuously argued 26 that this methodology would not be appropriate under Pulaski & Middleman, LLC v. 27 Google, 802 F.3d 979 (9th Cir. 2015) and In re Tobacco Cases II, 240 Cal. App. 4th 779 28 (2015). Specifically, they argue that under the UCL, Plaintiffs and Class members are only 8 11cv1842-GPC(KSC) 1 entitled to the difference between the purchase prices they paid and the market value of the 2 units at the time of purchase. (Dkt. No. 229 at 15-20; Dkt. No. 230 at 11-12.) Since the 3 Tarsadia Defendants further contend that the market value at the time of purchase was 4 equivalent to the purchase prices paid, they contend that restitution would amount to zero. 5 (Dkt. No. 230 at 11-12.) It is not clear which method the Court would apply. 6 Moreover, there is a question as to whether Plaintiffs are entitled to prejudgment 7 interest. While Plaintiffs sought prejudgment interest, the Tarsadia Defendants and GT 8 claimed that the UCL did not allow any and further argued that the Court should apply 9 equitable offsets far greater than what Plaintiffs would have proposed at a restitution trial. 10 11 12 13 14 15 16 17 Lastly, there is the additional risk that the Tarsadia Defendants would seek attorneys’ fees and costs from the Class Representatives, and that Class Representatives and Class Counsel would be named in a malicious prosecution lawsuit. (Dkt. No. 273-1, Schrag Decl. ¶ 21.) In fact, the named plaintiffs in other cases have suffered significant financial consequences from litigation arising out of the Hard Rock. See Salameh v. Tarsadia Hotel, No. 09cv2739-GPC(BLM), 2014 WL 3797276 (S.D. Cal. Mar. 25, 2014) ($405,371.25 in attorneys’ fees awarded); Royalty Alliance, Inc. v. Tarsadia Hotels, 2014 18 WL 2212492 (Cal. App. 2014) (nearly $1.2 million in attorneys’ fees awarded); Salameh 19 v. 5th and K Master Assoc., 2016 WL 4529438 (Cal. App. 2016) (over $3.6 million in 20 attorneys’ fees awarded); Tarsadia Hotels v. Aguirre & Severson, San Diego Superior 21 Court Case No. 37-2016-00044390, (action for malicious prosecution). In yet another 22 case, Bell v. Tarsadia Hotels, San Diego Superior Court No. 37-2010-00096618, Tarsadia 23 Hotels and 5th Rock LLC unsuccessfully sought attorneys’ fees and costs from the 24 Plaintiffs here after they dismissed that case, which was filed by other counsel, in order to 25 bring the present case. (Dkt. No. 273-1 Schrag Decl. ¶ 22; see also Dkt. No. 273-14 26 (February 13, 2013 letter from counsel for the Tarsadia Defendants threatening to sue 27 Class Counsel for malicious prosecution.) 28 9 11cv1842-GPC(KSC) 1 In sum, while Plaintiffs have a strong case, in this equitable action, there is no clear 2 cut remedies model. Therefore, the Class faced serious risk in continuing to litigate this 3 action against defendants who had a track record of success and aggression. These factors 4 weigh in favor of final approval. 5 2. 6 The amount in Settlement “is generally considered the most important, because the 7 critical component of any settlement is the amount of relief obtained by the class.” Bayat 8 v. Bank of the West, No. C–13–2376 EMC, 2015 WL 1744342, at *4 (N.D. Cal. Apr. 15, 9 2015) (citation omitted). A settlement is not judged against only the amount that might The Amount Offered in Settlement 10 have been recovered had the plaintiff prevailed at trial; nor must the settlement provide full 11 recovery of the damages sought to be fair and reasonable. See Linney v. Cellular Alaska 12 P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998). “Naturally, the agreement reached normally 13 embodies a compromise; in exchange for the saving of cost and elimination of risk, the 14 parties each give up something they might have won had they proceeded with litigation.” 15 Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d 16 615, 624 (9th Cir. 1982) (quoting United States v. Armour & Co., 402 U.S. 673, 681 17 (1971)). Because “the interests of class members and class counsel nearly always diverge, 18 courts must remain alert to the possibility that some class counsel may urge a class 19 settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet 20 treatment on fees.” In re HP Inkjet Printer Litig., 716 F.3d 1173, 1178 (9th Cir. 2013) 21 (internal quotation marks, citation, and footnote omitted). 22 Here, the proposed Settlement of $51,150,000 offers the Class a significant and 23 certain cash award without further delay. Plaintiffs’ proposed restitution model involved 24 restoring the aggregate purchase price paid less the current value of the unit, if still owned, 25 the resale price, if sold by the Class member, or the loan amount, if the Class member lost 26 the unit to foreclosure. Excluding prejudgment interest, the total amount of the core 27 restitution sought is approximately $69 million. (Dkt. No. 273-1, Schrag Decl. ¶ 10.) The 28 gross Settlement Fund represents approximately 74% of this sum. Id. The Settlement will 10 11cv1842-GPC(KSC) 1 provide, on average, approximately $95,000 for each condominium unit purchased by 2 Class members, after fees and expenses. 3 The parties dispute whether prejudgment interest should be awarded in this case, 4 and Plaintiffs acknowledge that there are UCL cases that support both sides on this issue. 5 See Wallace v. Countrywide Home Loans Inc., No. SACV 08-1463-JST(MLGx), 2013 6 WL 1944458, at *7-8 (C.D. Cal. Apr. 29, 2013) (prejudgment interest is a form of 7 restitution and is necessary to fully compensate plaintiffs); but see Rodriguez v. RWA 8 Trucking Co. Inc., 219 Cal. App. 4th 692 (2013) (prejudgment interest not required under 9 the UCL, but is discretionary). The Parties also disagree as to whether, if prejudgment 10 interest was awarded, it should be calculated on the net restitution amount, after setoffs, or 11 on the sum of the purchase prices paid, before setoffs. 12 Based on the risks concerning the restitution the Court would have awarded and the 13 results of any appeal of that award, the $51.15 million offered in Settlement is an excellent 14 result. See, e.g., Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 257 (N.D. Cal. 15 2015) (finding that the amount offered in settlement weighed in favor of preliminary 16 approval where the common fund amounted to between 11 and 27 percent of the total 17 potential recovery); Greko v. Diesel U.S.A., Inc., No. 10-CV-02576 NC, 2013 WL 18 1789602, at *5 (N.D. Cal. 2013) (approving settlement in which average settlement 19 payment amounted to under 3% of gross settlement value). This factor favors final 20 approval of the settlement. 21 3. The Extent of Discovery Completed and the Stage of the Proceeding 22 When trial is near, extensive discovery has been completed, and issues have been 23 thoroughly litigated, the extent of discovery and the stage of the proceedings weigh in 24 favor of the proposed settlement. Low v. Trump Univ., LLC, --F. Supp. 3d --, 2017 WL 25 1275191, at * (S.D. Cal. Mar. 31, 2017) (citation omitted). In this case, (1) the Parties 26 have completed fact and expert discovery, including a review of over 400,000 pages and 27 taking or defending 20 depositions, (2) there is a judgment in Plaintiffs’ favor on liability 28 that has been affirmed by the Ninth Circuit and with certiorari denied, (3) the Parties have 11 11cv1842-GPC(KSC) 1 briefed and argued a motion for class certification, and, (4) as noted above, the only major 2 task left in the case beyond class certification is a remedies trial. This factor weighs 3 strongly in favor of the proposed Settlement. 4 4. The Experience and Views of Class Counsel 5 Where “[b]oth Parties are represented by experienced counsel,” the recommendation 6 of experienced counsel to adopt the terms of the proposed settlement “is entitled to great 7 deal of weight.” In re Immune Response Sec. Litig., 497 F. Supp. 2d 1166, 1174 (S.D. 8 Cal. 2007). In particular, “[t]he recommendations of plaintiffs’ counsel should be given a 9 presumption of reasonableness.” In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 10 11 1043 (N.D. Cal. 2008) (internal citation and quotation marks omitted). As noted in the preliminary approval order, the Court recognized significant 12 knowledge and experience in handling class action litigation, including in-depth 13 knowledge in cases arising under ILSA. (Dkt. No. 278 at 10.) Each Class Counsel 14 strongly believes that the Settlement provides a fair and advantageous benefit to the Class. 15 Thus, this factor weighs in favor of final approval. 16 5. The Presence of a Governmental Participant 17 No governmental agency participated in this litigation or Settlement. After the 18 Court preliminarily approved the Settlement, the Tarsadia Defendants sent CAFA notices 19 to the California Attorney General, Consumer Law Section, and the United States Attorney 20 General. See 28 U.S.C. § 1715; (Dkt. No. 275.) To the Parties’ knowledge, no 21 governmental agency has objected to the Settlement which weighs in favor of the 22 settlement. Schuchardt v. Law Office of Rory W. Clark, 314 F.R.D. 673, 685 (N.D. Cal. 23 2016). 24 6. The Reaction of Class Members 25 No objections have been filed to the Settlement and one class member has elected to 26 opt-out. (Dkt. No. 304, Brasefield Decl. ¶¶ 4, 5.) To date, seventeen Class members have 27 submitted letters to the Court stating they support the Settlement and hope the Court 28 approves it. (Dkt. Nos. 282-83; 288-92; 294-303.) According to Class Counsel, class 12 11cv1842-GPC(KSC) 1 members’ reaction to the Settlement has been overwhelmingly positive based on his 2 conversations with approximately a dozen Class members who have all expressed support 3 for the Settlement. (Dkt. No. 287-1, Meade Decl. ¶¶ 16-17.) This factor supports final 4 approval. 5 In sum, based on a review of the factors, the Court concludes that the Settlement is 6 fair, adequate, and reasonable. 7 B. 8 9 10 11 Request for Class Representative Incentive Awards Plaintiffs seek four service awards of $50,000, paid from the common fund to Class Representatives on a per-unit basis and include (1) Mr. Gauba, (2) Kevin and Veronica Kenna, (3) Dean and Laurie Beaver, and (4) Messrs. Adelman and Aghachi Brown. Incentive awards are designed to “compensate class representatives for work done 12 on behalf of the class, to make up for financial or reputational risk undertaken in bringing 13 the action, and, sometimes, to recognize their willingness to act as a private attorney 14 general.” Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009). 15 “Incentive awards are fairly typical in class action cases,” but are ultimately 16 “discretionary.” Id. at 958. In deciding whether to approve an incentive award, courts 17 consider factors including: 18 19 20 21 22 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. 23 Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995). While most 24 class action service awards are lower, district courts in this circuit and elsewhere have 25 awarded $50,000 or more. Id. at 300 (“Court finds that an incentive award of $50,000 is 26 just and reasonable under the circumstances”); Kifafi v. Hilton Hotels Ret. Plan, 999 F. 27 Supp. 2d 88, 106 (D.D.C. 2013) (approving $50,000 incentive award); McCoy v. Health 28 Net, Inc., 569 F. Supp. 2d 448, 479-80 (D.N.J. 2008) (approving incentive awards of 13 11cv1842-GPC(KSC) 1 $60,000 per plaintiff); Brotherton v. Cleveland, 141 F. Supp. 2d 907, 914 (S.D. Ohio 2 2001) ($50,000 to lead plaintiff); In re Revco Sec. Litig., Nos. 851, 89cv593, 1992 WL 3 118800, *7 (N.D. Ohio 1992) ($200,000 incentive award to named plaintiff); Enterprise 4 Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 250-51 (S.D. Ohio 5 1991) ($50,000 incentive awards to each of the six named plaintiffs); In re Dun & 6 Bradstreet Credit Servs. Customer Litig., 130 F.R.D. 366, 373-74 (S.D. Ohio 1990) (two 7 incentive awards of $55,000 and three incentive awards of $35,000). 8 In this case, each of the Class Representatives spent over six years assisting the 9 litigation of this case by reviewing the complaint, responding to written discovery and 10 producing documents, being deposed by defense counsel, and reviewing and approving the 11 settlement. (Dkt. No. 287-1, Meade Decl. ¶¶ 3-8, 12.) Plaintiffs also stayed in touch with 12 Class Counsel throughout the litigation. (Id. ¶ 12.) Mr. Kenna attended the settlement 13 conference with the Magistrate Judge Crawford. (Id.) Mssrs. Kenna, Aghachi and Gauba 14 also attended the 2016 mediation before Judge West. (Id.) 15 Most importantly, all Class Representatives brought this action in the face of a very 16 real risk that the Tarsadia Defendants would seek attorneys’ fees from them, as they have 17 successfully done in other actions arising out of the Hard Rock. The Class Representatives 18 here were among the many plaintiffs in Bell v. Tarsadia Hotels, (San Diego Superior Court 19 No. 37-2010-00096618). After the Bell court granted defendants’ demurrer, counsel for 20 plaintiffs in Bell encouraged their clients to sign releases in exchange for a waiver of 21 attorneys’ fees and costs because the defendants in the Salameh case that the Bell case was 22 modeled after had just filed a motion seeking $800,000 in attorneys’ fees. Most of the 23 plaintiffs in Bell signed a settlement agreement dismissing their claims with prejudice in 24 exchange for Tarsadia waiving costs and attorneys’ fees. (Dkt. No. 287-1, Meade Decl. ¶ 25 3, Ex. 1.) Despite the obvious risk of a fee motion, the Class Representatives chose not to 26 sign the settlement agreement in Bell so that they could bring this class action. (Id. ¶ 4.) 27 They believed in the ILSA-based claims and stepped forward for the Class at great 28 financial peril to themselves. After this action was filed, Tarsadia filed a motion in Bell 14 11cv1842-GPC(KSC) 1 seeking $63,000 in attorneys’ fees from the Class Representatives. Class Counsel, 2 appearing specially in Bell, defeated this fee motion on September 2, 2011. (Id. ¶ 5.) 3 Then, in three later cases Tarsadia successfully obtained attorneys’ fees from 4 plaintiffs. In Salameh v. Tarsadia Hotels, (S.D. Cal. Case No. No. 09-cv-2739) (“Salameh 5 I”), upon which Bell was modeled, the plaintiffs filed a securities fraud class action against 6 Tarsadia, arising out of the development of the Hard Rock. The district court dismissed the 7 claims before a class was certified and the Ninth Circuit affirmed. Salameh v. Tarsadia 8 Hotel, 726 F.3d 1124 (9th Cir. 2013). The district court then ordered plaintiffs to pay 9 Tarsadia $405,371 in attorneys’ fees. Salameh v. Tarsadia Hotel, No. 09cv2739- 10 GPC(BLM), 2014 WL 3797283, at *1 (S.D. Cal. July 31, 2014). 11 Similarly, the plaintiffs in Royalty Alliance, Inc. v. Tarsadia Hotels, 2014 WL 12 2212492 (Cal. App. 2014), were ordered to pay the Tarsadia over $1.1 million in 13 attorneys’ fees after they lost summary judgment on securities, fraud, and UCL claims 14 stemming from the Hard Rock. In Salameh v. 5th and K Master Assoc., Inc., 2016 WL 15 4529438 (Cal. App. 2016) (“Salameh II”), the California state court ordered the plaintiffs 16 to pay Tarsadia $3.5 million in attorneys’ fees and this award was affirmed on appeal. 17 Under these circumstances, the service awards of $50,000 to the Class 18 Representatives are fair and reasonable in light of the extraordinary risks they accepted and 19 the time and effort they expended for the benefit of the Class. The Court grants Plaintiffs’ 20 request for class representative incentive awards. 21 C. Application for Attorneys’ Fees and Costs 22 Class counsel seek attorneys’ fees in the amount of $17,050,000 representing one- 23 third of the Settlement Fund and reimbursement of their out-of-pocket costs of $195,089. 24 This court has an “independent obligation to ensure that the award, like the 25 settlement itself, is reasonable, even if the parties have already agreed to an amount.” In re 26 Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). At the fee- 27 setting stage, the interests of the plaintiffs and their attorneys diverge and described as 28 15 11cv1842-GPC(KSC) 1 “adversarial”; therefore, the district court assumes a fiduciary role for the class plaintiffs. 2 In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988. 994 (9th Cir. 2010). 3 1. California Law 4 California law governs this fee application because where state law claims 5 predominate, state law applies to determine the right to fees and the method of calculating 6 them. See Mangold v. Cal. Pub. Utilities Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995). 7 The California Supreme Court recently held that in common fund cases, a trial court may 8 award class counsel a fee out of that fund by choosing an appropriate percentage of the 9 fund. Laffitte v. Robert Half Int’l Inc., 1 Cal. 5th 480, 503-06 (2016). A court “may 10 determine the amount of a reasonable fee by choosing an appropriate percentage of the 11 fund created.” Id. at 503. The trial court has discretion to conduct a lodestar cross-check 12 on a percentage fee or to forgo a lodestar cross-check and use other means to assess the 13 reasonableness of the requested fees. Id. at 506. 14 Here, Class Counsel requests a fee of one-third of the common fund. California 15 courts routinely award attorneys’ fees of one-third of the common fund. See Laffitte, 1 16 Cal. 5th at 506 (affirming a fee award of one-third of the gross settlement amount); Chavez 17 v. Netflix, Inc., 162 Cal. App. 4th 43, 66 n.11 (2008) (“Empirical studies show that, 18 regardless whether the percentage method or the lodestar method is used, fee awards in 19 class actions average around one-third of the recovery”). “Under the percentage method, 20 California has recognized that most fee awards based on either a lodestar or percentage 21 calculation are 33 percent . . . .” Smith v. CRST Van Expedited, Inc., NO. 10cv1116- 22 IEG(WMC), 2013 WL 163293, at *5 (S.D. Cal. 2013). 23 In Laffitte, the California Supreme Court affirmed a one-third fee award in a related 24 wage and hour class actions that, like this case, involved extensive discovery, contentious 25 law and motion practice, motions for summary judgment, a class certification motion, a 26 subsequent motion for reconsideration, numerous experts, and two full-day mediations. 27 See Laffitte v. Robert Half Int’l Inc., 180 Cal. Rptr. 3d 136, 140 (2014) (discussion of 28 complexity of case), aff’d 1 Cal. 5th at 506. The court considered that class counsel 16 11cv1842-GPC(KSC) 1 litigated the case on a contingency basis, which involved inherent risk and that 2 uncertainties introduced by recent case law injected “significant doubt” that plaintiffs 3 would be able to maintain class certification through trial. Id. at 142-43. The Laffitte court 4 concluded that the $19 million settlement achieved in the face of the numerous risks—both 5 those overcome and those still looming at the time of settlement—supported the 33 1/3% 6 fee. Id. at 140-43, 154. 7 In this case, Class Counsel litigated this action against tenacious and aggressive 8 defense counsel who prevailed in several other actions brought by Hard Rock purchasers. 9 The action involved novel issues under the UCL’s statute of limitations and issues 10 concerning interpretation of ILSA and a recent Congressional amendment to ILSA that 11 could apply retroactively to bar the Class’s claims. Had Class Counsel lost any one of 12 these three issues they would not have been paid for 9,104 hours of work--and would 13 likely have had to defend a malicious prosecution action. (Dkt. No. 287-1, Meade Decl. ¶¶ 14 9, 11, 24.) Even after the appellate victory, risks remained as to whether this Court would 15 certify the Class and how to calculate UCL restitution. Achieving a $51.15 million cash 16 settlement which will pay significant amounts to all Class Members in the face of these 17 risks merits the requested one-third fee. In further support, Richard M. Pearl, an expert on 18 attorneys’ fee issues and disputes, opines in his expert declaration that “a fee of 33.3% of 19 the fund for this long, heavily contested but highly successful litigation is certainly 20 reasonable.” (Dkt. No. 287-12, Pearl Decl. ¶ 43.) Considering the results achieved, the 21 requested fees are reasonable. 22 2. Ninth Circuit Law 23 Class Counsel also argue that the fee request is reasonable under Ninth Circuit 24 precedent. In common fund cases, a district court has discretion to apply either the 25 percentage of the fund method or the lodestar method. Vizcaino v. Microsoft Corp., 290 26 F.3d 1043, 1047 (9th Cir. 2002); In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 27 1291, 1295-96 (9th Cir. 1994). The Ninth Circuit has adopted a benchmark of 25% of the 28 total settlement; however, that amount may be “adjusted upward or downward to account 17 11cv1842-GPC(KSC) 1 for any unusual circumstances involved in [the] case.” Campbell v, Best Buy Stores, No. 2 LA CV12-7794 JAK (JEMx), 2016 WL 6662719, at *7 (citing Paul, Johnson, Alston & 3 Hunt v. Graulty, 886 F.2d 268, 273 (9th Cir. 1989)). A court that applies the percentage 4 method may cross-check the reasonableness of the fee by calculating the lodestar. Id. 5 (citing Vizcaino, 290 F.3d at 1050). “The 25% benchmark rate, although a starting point 6 for analysis, may be inappropriate in some cases.” Vizcaino, 290 F.3d at 1048. Any 7 percentage-of-the-fund award “must be supported by findings that take into account all of 8 the circumstances of the case.” Id. In determining whether an adjustment from the 9 benchmark is appropriate, courts in the Ninth Circuit consider the following factors: “(1) 10 the results achieved; (2) the risk undertaken by class counsel in pursuing the case; (3) 11 whether the settlement generated benefits beyond a cash payment; (4) the market rate for 12 similar representations; and (5) the nature of the representation, including whether it was 13 executed on a contingency basis.” Taylor v. Shippers Transport Express, Inc., 2015 WL 14 12658458, at *14 (C.D. Cal. 2015) (citing Vizcaino, 290 F.3d at 1048-50). 15 District courts in this circuit have routinely awarded fees of one-third of the 16 common fund or higher after considering the particular facts and circumstances of each 17 case. “[I]n most common fund cases, the award exceeds [the] benchmark.” In 18 reOmnivision Tech., Inc., 559 F. Supp. 2d 1036, 1047 (N.D. Cal. 2008) (citations 19 omitted); Taylor, 2015 WL 12658458, at *17 (holding that 33% was reasonable given the 20 result, the risk, and counsel’s time investment); Campbell, 2016 WL 6662719, at *10 21 (approving a fee of one-third of the common fund); Millan v. Cascade Water Services, 22 2016 WL 3077710, at *11-12 (E.D. Cal. 2016) (approving an award of 33% of the 23 common fund); Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 449 (E.D. Cal. 24 2013) (awarding one-third of the settlement fund). The Ninth Circuit has also upheld 25 awards of one-third of a common fund. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 26 454, 460 (9th Cir. 2000) (affirming an award of one-third of total recovery); In re Pacific 27 Enters. Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (affirming an award of one-third of a 28 $12 million common fund). 18 11cv1842-GPC(KSC) 1 a. 2 “The overall result and benefit to the class from the litigation is the most critical 3 factor in granting a fee award.” In re Omnivision Techs., 559 F. Supp. 2d at 1046. As 4 discussed above, against a rigorous defense, Class Counsel obtained $51,150,000 for the 5 Class, without reversion of any funds to the Tarsadia Defendants, GT, GT’s insurers, or 6 any other contributing party. (Dkt. No. 273-2 at ¶ 8.7.) Class members will receive, on 7 average, approximately $95,000 in settlement funds on a per-unit basis (after fees and 8 expenses). (Dkt. No. 273-1, Schrag Decl. Decl. ¶ 15.) This represents an excellent result. 9 This factor thus favors an upward adjustment from the 25% benchmark to a fee of 33 and 10 The Result Achieved 1/3%. 11 b. The Risks of Litigation 12 From the outset, Class Counsel litigated this case in the face of extraordinary risk of 13 non-payment by taking the case on a pure contingency basis and risked receiving zero 14 compensation for their years of work and out-of-pocket costs. That risk of zero 15 compensation was almost realized when the Court granted summary judgment to 16 defendants on statute of limitations grounds. However, Class Counsel persevered, arguing 17 on reconsideration that the predominant interpretation of Silvas was incorrect. Class 18 Counsel’s steadfastness paid off when the Court not only reversed the grant of summary 19 judgment to defendants, but also granted partial summary judgment on the issue of liability 20 to Plaintiffs. But the risks of litigation remained and new risks emerged. The Tarsadia 21 Defendants filed a motion to reconsider, and then Congress unanimously passed and the 22 President signed legislation that removed condominiums from ILSA’s registration and 23 disclosure requirements. The Tarsadia Defendants argued Congress’ intent was to “clarify” 24 existing law such that the amendment applied retroactively. Though this Court rejected 25 the Tarsadia Defendants’ various arguments, it certified an interlocutory appeal which the 26 Ninth Circuit accepted. Class Counsel then briefed and argued several complex issues 27 before the Ninth Circuit such as the statute of limitations issue, retroactivity, whether to 28 uphold 12 C.F.R. § 1010.5, and whether Plaintiffs had exclusive use of the hotel- 19 11cv1842-GPC(KSC) 1 condominium units at the Hard Rock notwithstanding restrictions on occupancy and the 2 Sixth Circuit’s decision in Becherer, 127 F.3d 478. Beaver, 816 F.3d 1170. 3 After remand, at the August 2016 hearing on Plaintiffs’ renewed motion to certify, 4 the Court observed that the Court and the Parties “have made some law along the way;” 5 and also warned that “[t]here’s been no shortage of novel issues,” suggesting that 6 significant issues and risks remained. (Dkt. No. 273-15 (8/18/16 Trans.) at 5.) Indeed, 7 Class Counsel achieved this settlement even after the Court noted that another issue of first 8 impression -- the question of a proper remedy -- “isn’t as simple as presented by the 9 plaintiffs,” that it was likely to consider the recent Congressional amendment removing the 10 underlying illegality in fashioning an equitable remedy, and more ominously that it had not 11 yet decided that Plaintiffs had a viable remedies model that matches the theory of liability. 12 (Id. at 4-5.) Both the Tarsadia Defendants and GT capitalized on the Court’s invitation for 13 further briefing to file sur-replies arguing that Plaintiffs lacked a viable remedies model. 14 (Dkt. Nos. 245-46.) 15 Even if the court rejected Defendants’ analysis, Plaintiffs remained at risk as the 16 Court noted that Plaintiff had the burden to identify a viable alternative remedies model. 17 (Dkt. No. 273-15 at 5.) If the Court denied class certification, Class Counsel would have 18 received, at most, de minimis fees on the claims relating to the four units owned by the 19 named Plaintiffs. See Acosta v. Trans Union, LLC, 243 F.R.D. 377, 392 (C.D. Cal. 2007) 20 (“The value of a class action ‘depends largely on the certification of the class,’ and … 21 class certification undeniably represents a serious risk for plaintiffs in any class action 22 lawsuit.”). Even if the Court certified a class, there was no guarantee that certification 23 would extend beyond the question of liability; if it did, that Plaintiffs would prevail at the 24 remedies trial; or if they did, that the Court’s broad equitable powers to fashion an 25 appropriate remedy would yield significant relief to the Class. 26 Class Counsel also faced the added risk that if the Tarsadia Defendants had 27 prevailed, they would have sued Class Counsel for malicious prosecution, just as they sued 28 other plaintiffs’ attorneys after prevailing in a related case. See Tarsadia Hotels v. Aguirre 20 11cv1842-GPC(KSC) 1 & Severson, 2016 WL 7488351, at *1 (Ct. App. 2016) (affirming dismissal of malicious 2 prosecution complaint in Tarsadia Hotels v. Aguirre & Severson, San Diego Superior 3 Court Case No. 37-2016-00044390). In fact, Tarsadi Defendants specifically threatened to 4 file such a lawsuit. (Dkt. No. 273-1, Schrag Decl. ¶ 9 & Ex. 2 (February 13, 2013 letter 5 from counsel for the Tarsadia Defendants threatening to sue Class Counsel for malicious 6 prosecution).) 7 Class Counsel undertook extraordinary risk in litigating the case for six years 8 against Defendants who have a track record of aggression; thus, this factor supports and 9 upward adjustment. 10 c. Benefits Beyond a Cash Payment 11 Where class counsel’s performance generates benefits beyond a cash settlement 12 fund, an upward adjustment may be warranted. See Vizcaino, 290 F.3d at 1049 (fact that 13 the litigation benefitted employers and workers nationwide by clarifying the law on worker 14 classification supported upward adjustment). Here, Class Counsel benefitted consumers 15 nationwide by clarifying that where a UCL claim is premised on a violation of federal law, 16 the UCL’s statute of limitations applies. Beaver, 816 F.3d at 1180-81. The UCL’s four- 17 year statute of limitations provides consumers with a viable cause of action even if they 18 are suing based on violations of a federal predicate law with a shorter limitations period 19 that has expired. Id. The Ninth Circuit’s decision in this case also resolved other 20 significant issues, such as whether 12 C.F.R. § 1010.5 imposes a valid limitation on 21 presale contingency clauses, and, therefore, the scope of the Improved Lot Exemption. 22 This issue was particularly important because it was the foundation for GT’s liability and, 23 presumably, the motivating factor behind the firm’s decision to contribute most of the 24 Settlement Fund. According to the Third Party Complaint, GT advised the Tarsadia 25 Defendants that the Improved Lot Exemption to ILSA applied to the Hard Rock. (Dkt. 26 No. 106-2 at 12.) In fact, because the purchase contract included a presale contingency 27 clause that exceeded the duration permitted by 12 C.F.R. § 1010.5, the Improved Lot 28 Exemption was not available to the Tarsadia Defendants. Beaver, 816 F.3d at 1184. 21 11cv1842-GPC(KSC) 1 2 These clarifications in the law will serve a great benefit to the general public, and supports an upward adjustment to a 33 1/3% fee. 3 d. The Skill Required and the Quality of Work 4 Class Counsel overcame several hurdles that reflect their skill and experience. For 5 instance, Class Counsel not only won a motion for reconsideration of a summary judgment 6 motion that represented a total loss on the merits, but also obtained summary judgment on 7 the issue of liability for their UCL claim. This win came despite at least six federal district 8 courts interpreting Silvas to hold that in a UCL claim based on federal law, the federal 9 statute of limitations of the controls. (See Dkt. Nos. 128, 146.) Only one district court 10 case had ruled the other way—that absent preemption, the UCL statute of limitations 11 controlled even where the UCL claim was based on federal law. Sonoda v. Amerisave 12 Mortg. Corp., No. C-11-1803 EMC, 2011 WL 2690451, at *9 (N.D. Cal. 2011). Yet, Class 13 Counsel persuasively argued to this Court and the Ninth Circuit that the UCL’s statute of 14 limitations should apply. 15 Class Counsel also prevailed on the issue of whether a 2014 Congressional 16 amendment to ILSA which exempted condominiums from ILSA’s disclosure provisions 17 would apply retroactively to this case even though the title of the amendment indicated 18 that it was meant “to clarify how [ILSA] applies to condominiums.” Beaver, 816 F.3d at 19 1186-87. This Court and the Ninth Circuit agreed with Class Counsel that despite the 20 word “clarify” in the amendment’s title, the amendment was a substantive change in the 21 law that should not be applied to this case. Id. In briefing this issue, Class Counsel 22 exhaustively reviewed HUD’s agency regulations to ILSA and argued that under Chevron 23 deference principles, ILSA applied to condominiums like those at the Hard Rock. (Dkt. 24 No. 287-1, Meade Decl. ¶ 24.) 25 Even after a complete victory on the merits, Class Counsel faced defendants’ 26 challenges to their novel remedies model. Although the parties settled before the Court 27 could decide whether Plaintiffs’ remedies model was appropriate, Class Counsel’s briefing 28 and arguments on the matter provided enough leverage to settle the case for over $51 22 11cv1842-GPC(KSC) 1 million. This settlement could not have been achieved without the skill and experience that 2 Class Counsel applied in the face of legal hurdles at every turn. This factor thus supports 3 an upward adjustment from the benchmark. 4 e. Market Rate for Similar Representation 5 Class Counsel’s fee request of one-third of the common fund is in line with the 6 market rate for similar representation. See In re Consumer Privacy Cases, 175 Cal. App. 7 4th 545, 557 (2009) (a fee award should be “within the range of fees freely negotiated in 8 the legal marketplace in comparable litigation”). Attorneys with comparable skill and 9 experience, and who litigate class actions on a contingency basis routinely charge one- 10 third of the recovery, or 40% or more if the case goes to trial. Fernandez v. Victoria Secret 11 Stores, LLC, No. CV 06-4149-MMM(SHx), 2008 WL 8150856, at *16 n.59 (C.D. Cal. 12 2008) (fees representing one-third of the recovery are justified based on study showing 13 that standard contingency fee rates are 33% if the case settles before trial, 40% if a trial 14 commences, and 50% if trial is completed). In his declaration, Pearl highlights prevailing 15 market rates for attorneys across the state, and opines that Class Counsels’ rates are well 16 within the norm. (Dkt. No. 287-12, Pearl Decl. ¶¶ 8-10, 66-73, Dkt. No. 273-18, Pearl 17 Decl., Ex. F.) Thus, here, where the action was litigated for six years, through a total loss, 18 reconsideration, an interlocutory appeal and to the brink of trial, a one-third fee is 19 reasonable as it is in line with the legal marketplace for contingent fees. 20 21 f. Contingent Nature of the Representation and the Financial Burden Carried by Class Counsel 22 Class Counsel took this case on an entirely contingent fee basis against well- 23 represented defendants who have a track record of aggression. “A contingent fee must be 24 higher than a fee for the same legal services paid as they are performed. The contingent fee 25 compensates the lawyer not only for the legal services he renders but for the loan of those 26 services.” Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 580 (2004); see also 27 Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 457 (E.D. Cal. 2013) (“Courts have 28 long recognized that the attorneys’ contingent risk is an important factor in determining 23 11cv1842-GPC(KSC) 1 the fee award and may justify awarding a premium over an attorneys’ normal hourly 2 rates.”). Class Counsel assumed all the financial risk of the case, since the fee arrangement 3 required Class Counsel to bear all of the costs of litigation. Even with the Court’s finding 4 in favor of Plaintiffs on liability, there was still a risk that the Court would agree with 5 defendants’ restitution methodology and award zero in restitution – thus leaving Class 6 Counsel with no remuneration for six years and 9,104 hours of work and the nearly 7 $200,000 they spent over the course of this case. That substantial risk warrants an 8 appropriate fee. Barbosa, 297 F.R.D. at 449 (“Like this case, where recovery is uncertain, 9 an award of one-third of the common fund as attorneys’ fees has been found to be 10 appropriate”). This factor further supports the 33 and 1/3 % fee. 11 3. Lodestar Cross-Check 12 In applying the percentage-of-the-fund method, a district court has discretion to 13 “double check the reasonableness of the percentage fee through a lodestar calculation.” 14 Spann v. J.C. Penney Corp., 211 F. Supp. 3d 1244, 1264 (C.D. Cal. 2016) (quoting 15 Laffitte, 1 Cal. 5th at 504). Because the lodestar measures counsel’s time investment in 16 the litigation, it provides a check on the reasonableness of the percentage award. Vizcaino, 17 290 F.3d at 1050 (“. . . the lodestar calculation can be helpful in suggesting a higher 18 percentage when litigation has been protracted. Thus, while the primary basis of the fee 19 award remains the percentage method, the lodestar may provide a useful perspective on the 20 reasonableness of a given percentage award.”). 21 In conducting a lodestar cross-check, a court need not exhaustively catalogue and 22 review counsel’s hours, but can instead focus on “the general question of whether the fee 23 award appropriately reflects the degree of time and effort expended by the attorneys.” 24 Spann, 211 F. Supp. 3d at 1265 (quoting Laffitte, 1 Cal. 5th at 505). To calculate the 25 lodestar, courts multiply the number of hours reasonably expended litigating the case by a 26 reasonable hourly rate, and adjusting the lodestar up or down by an appropriate multiplier 27 reflecting “the quality of representation, the benefit obtained for the class, the complexity 28 and novelty of the issues presented, and the risk of nonpayment.” Jasper v. C.R. England, 24 11cv1842-GPC(KSC) 1 Inc., 2014 WL 12577426 (C.D. Cal. 2014) (citing In re Bluetooth Headset Products Liab. 2 Litig., 654 F.3d 935, 941-942 (9th Cir. 2011)). 3 Here, as summarized in a declaration, Class Counsel expended 9,104 hours litigating 4 this action over more than six years, after the exercise of billing discretion. (Dkt. No. 287- 5 2, Meade Decl. ¶¶ 26, 27). 6 The lodestar for each of the law firms total $5,908,280.50. (Dkt. No. 287-1, Meade 7 Decl. ¶¶ 21, 29, 31, 34, 35; see also Dkt. No. 287-19, Schrag Decl.; Dkt. No. 287-21; 8 Rubin Decl.; Dkt. No. 287-22, Chomiak Decl.; Dkt. No. 287-23, Fostvedt Decl.; Dkt. No. 9 287-24, Reiser Decl.) After a review of Class Counsel’s declarations, the Court concludes 10 that the lodegstar amount is reasonable in light of the work performed and the prevailing 11 rates in the community for attorneys of comparable skill, experience and reputation. 12 The one-third fee Class Counsel seeks reflects a multiplier of 2.89 on the lodestar 13 which is reasonable for a complex class action case. See Hopkins v. Stryker Sales Corp., 14 11CV2786-LHK, 2013 WL 496358, at *4 (N.D. Cal. Feb. 6, 2013) (“Multipliers of 1 to 4 15 are commonly found to be appropriate in complex class action cases.”). In the recent $50 16 million settlement in Spann, Judge Olguin held that a multiplier of 3.07 was “well within 17 the range of reasonable multipliers.” Spann v. J.C. Penney Corp., 211 F. Supp. 3d 1244, 18 1265 (C.D. Cal. 2016); see also Vizcaino, 290 F.3d at 1052–1054 (surveying multipliers in 19 23 class action suits and recognizing that courts applied multipliers of 1.0 to 4.0 in 83% of 20 surveyed cases); Parkinson v. Hyundai Motor Am., 796 F. Supp. 2d 1160, 1170 (C.D. Cal. 21 2010) (observing that “multipliers may range from 1.2 to 4 or even higher”). 22 A cross-check with the lodestar confirms the reasonableness of awarding the 33 and 23 1/3% fee award. See Laffitte, 1 Cal.5th at 496 (“If the implied multiplier is reasonable, 24 then the cross-check confirms the reasonableness of the percentage-based fee”). 25 C. 26 Application for Costs Class Counsel seek reimbursement of $195,089.00 in out-of-pocket costs incurred 27 during this litigation. “There is no doubt that an attorney who has created a common fund 28 for the benefit of the class is entitled to reimbursement of reasonable litigation expenses 25 11cv1842-GPC(KSC) 1 from that fund.” Ontiveros v. Zamora, 303 F.R.D. 356, 375 (C.D. Cal. 2014) (citation 2 omitted). Class counsel assert that all the expenditures were necessary to Class Counsel’s 3 prosecution of the action and are reasonable considering the action spanned over six years, 4 required expert opinions and survived a Ninth Circuit appeal. After a review of the costs 5 sought by seven firms3, the Court concludes the costs are reasonable and awards Class 6 Counsel $195,089.00 in costs. 7 Conclusion 8 Based on the above, IT IS HEREBY ORDERED that: 9 1. Based on Plaintiffs’ Motion for Final Approval of Class Settlement, the 10 argument and comments at the final Fairness Hearing, and its further consideration of the 11 factors identified in the Court’s Preliminary Approval Order, the Court certifies the 12 following Class for Settlement purposes only: 13 All individuals and businesses who agreed to purchase condominiumhotel units at the Hard Rock Hotel & Condominiums in San Diego, California at any time between May 2006 and December 2007 and ultimately closed escrow on units in the project, with the exception of (a) the Tarsadia Defendants and their officers, affiliates, directors, employees and the immediate family members of its officers, directors and employees (the Tarsadia Defendants have determined this exception excludes only Units 602, 639 and 1150), (b) those named plaintiffs in the action entitled Bell et al. v. Tarsadia Hotels et al. (San Diego Superior Court Case No. 37-2010-00096618) who signed the Settlement Agreement And Mutual Release in that case, (c) the named plaintiffs in the action entitled Salameh et al. v. Tarsadia Hotels et al. (Case No. 09-CV-2739), and (d) Persons who file timely Opt-Outs. The Settlement Class shall be construed to include purchasers “Subject to the 2008 Close Defense” and “Subject to the Assignment Defense,” as those phrases are used in Exhibit A to the Class Member Stipulation (Dkt. No. 70), provided that they otherwise fall within the definition of the Settlement Class. Without in any way limiting the foregoing, a list 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Until early 2015, Tyler Meade and Michael Shrag practiced as Meade & Schrag, LLP, and then both continued to work on the case in their new firms, The Meade Firm and Gibbs Law Group, LLP. 3 26 11cv1842-GPC(KSC) 1 2 3 of known Settlement Class members is attached hereto as Exhibit A (the “Class Member List”). 2. The Court confirms its appointment of Plaintiffs Dean Beaver, Laurie 4 Beaver, Steven Adelman, Abraham Aghachi, Dinesh Gauba, Kevin Kenna, and Veronica 5 Kenna as Class Representatives. The Court also confirms its appointment of the following 6 five firms to serve as Class Counsel: Reiser Law, P.C.; Gibbs Law Group LLP; The 7 Meade Firm p.c.; Talisman Law PC; and the Fostvedt Legal Group LLC. 8 3. The Court has reviewed the Declaration of Jacqueline Brasefield Regarding 9 Notice Dissemination, Dkt. No. 279, and finds that Class Notice has been disseminated to 10 the Class in compliance with the Court’s Preliminary Approval Order and that the Notice 11 Program provided the best notice to the Class practicable under the circumstances, fully 12 satisfied due process, met the requirements of Rule 23 of the Federal Rules of Civil 13 Procedure, and complied with all other applicable law. The Court further finds that notice 14 provisions of 28 U.S.C. § 1715 were complied with in this case. 15 4. Only one class member, Jason Brooks, who was a co-purchaser of Unit 1042, 16 has excluded himself from the Class by submitting a timely Request for Exclusion to the 17 Settlement Administrator. See Dkt. No. 304 (Declaration of Jacqueline Brasefield 18 Regarding Exclusions and Objections). Therefore, Jason Brooks (a) is not a Class member 19 as that term is defined and used herein; (b) shall not be bound by this Final Approval 20 Order or any release provided herein; and (c) shall not be entitled to benefits from the 21 Settlement. No other Class members requested exclusion from the Settlement. 22 5. Seventeen members of the Class have written to the Court to express their 23 support for the Settlement. (Dkt. Nos. 282-283, 288-292, 294-303.) The Court has not 24 received any objections to the Settlement. (See also Dkt. No. 304 (Brasefield Decl. re 25 exclusions and objections); (Dkt. No. 305 (Class Counsel’s Status Report Regarding 26 Response to Notice Program).) The absence of any objections bars any appeal. (Dkt. No. 27 278 at ¶ 35 (“Any Class member who does not file a valid and timely objection to the 28 Settlement will be deemed to have waived any objections to the Settlement, will be barred 27 11cv1842-GPC(KSC) 1 from speaking or otherwise presenting any views at the Fairness Hearing, and shall be 2 barred from seeking review of the Settlement by appeal or otherwise”).); see also 3 Newberg on Class Actions § 14:13 (5th ed.) (“[I]t is equally clear that a class member 4 who did not object in the district court cannot pursue an appeal. Indeed, she has nothing to 5 appeal because she waived her rights by not objecting below.”); In re UnitedHealth Group 6 Inc. Shareholder Derivative Litigation, 631 F.3d 913, 917 (8th Cir. 2011) (class member 7 must file a timely and proper objection with the district court before appealing a 8 settlement agreement); Aichele v. City of Los Angeles, Case No. CV 12-10863-DMF 9 (FFMx), 2015 WL 12732003, at *6 (C.D. Cal. Sept. 9, 2015) (“Since there have been no 10 objections to the Settlement, there can be no appeals taken”).4 11 6. No Class member has requested to speak at the Final Fairness Hearing. 12 7. The Court finds that the Settlement is fair, reasonable, adequate and is in the 13 best interests of the Class, has been entered into in good faith, and should be and hereby is 14 fully and finally approved pursuant to Federal Rule of Civil Procedure 23. The Settlement 15 represents a fair resolution of all claims asserted by the Class Representatives on behalf of 16 the Class, and fully and finally resolves all such claims. 17 8. The release set forth in the Settlement will become binding and effective on 18 all Class members upon the Effective Date, which under Paragraph 2.8 of the Settlement 19 Agreement will likely be 31 days from the date of this Order given that no Class member 20 filed a timely objection. (Dkt. No. 273-2 at ¶ 2.8.) To avoid ambiguity, these releases, 21 22 23 24 25 26 4 27 28 The Court orders that any party who attempts to file an appeal shall, within 10 days of filing a notice of appeal, post a bond pursuant to Rule 7 of the Federal Rules of Appellate Procedure in the amount of $500.00. 28 11cv1842-GPC(KSC) 1 which must be read in light of the broad definitions of “Claims” 5 and “Released Parties,”6 2 read as follows: 11.1 Mutual Releases: Upon the Effective Date, this Settlement fully, finally and forever extinguishes and releases all Claims held by, between, and among Plaintiffs, the Settlement Class, Playground Destination Properties, Inc., the Tarsadia Defendants, and GT against all Released Parties that arise out of the facts alleged in the First, Second, and Third Amended Complaints, and/or the Third Party Complaint (collectively, “Complaint”) filed in the Action, including known and Unknown Claims which could have been brought in the Action based on the same set of facts pleaded in the Complaint. The Settlement further extinguishes any and all Claims, including future and Unknown Claims, between the Tarsadia Defendants, Playground Destination Properties, 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 “Claims” means any and all actual or potential claims, actions, causes of action, suits, counterclaims, cross-claims, third party claims, contentions, allegations, and assertions of wrongdoing, and any demands for any and all debts, obligations, liabilities, damages (whether actual, compensatory, treble, punitive, exemplary, statutory, or otherwise), attorneys’ fees, costs, expenses, restitution, disgorgement, injunctive relief, any other type of equitable, legal or statutory relief, any other benefits, or any penalties of any type whatsoever (whether sought by a Party directly or on behalf of a Party by another person), regardless of when such claims accrue, whether known or unknown, suspected or unsuspected, contingent or non-contingent, discovered or undiscovered, whether asserted in federal court, state court, arbitration or otherwise, and whether triable before a judge or jury or otherwise. 6 “Released Parties” (or, individually, “Released Party”) means Plaintiffs, members of the Settlement Class, Class Counsel, Playground Destination Properties, Inc., the Tarsadia Defendants, GT, and GT’s insurers and underwriters, together with their predecessors, successors (including, without limitation, acquirers of all or substantially all of its assets, stock, or other ownership interests) and assigns; their respective insurers, the past, present, and future, direct and indirect, parents (including, but not limited to holding companies), subsidiaries and affiliates in any capacity of any of the above; and the past, present, and future principals, trustees, partners, claims administrators, officers, directors, employees, agents, attorneys, shareholders (including without limitation, Richard Davis, as applicable to GT), advisors, predecessors, successors (including, without limitation, acquirers of all or substantially all of their assets, stock, or other ownership interests), assigns, representatives, heirs, executors, and administrators in any capacity of any of the above. 5 28 29 11cv1842-GPC(KSC) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Inc., and GT that in any way relate to the Hard Rock Hotel & Condominiums in San Diego, California, including but not limited to claims against or by the Tarsadia Defendants, Playground Destination Properties, Inc., GT, and/or their respective predecessors, successors (including, without limitation, acquirers of all or substantially all of its assets, stock, or other ownership interests) and assigns, insurers, past, present, and future, direct and indirect parents (including, but not limited to holding companies), subsidiaries and affiliates in any capacity of any of the above, and the past, present, and future principals, trustees, partners, claims administrators, officers, directors, employees, agents, attorneys, shareholders (including without limitation, Richard Davis, as applicable to GT), advisors, predecessors, successors (including, without limitation, acquirers of all or substantially all of their assets, stock, or other ownership interests), assigns, representatives, heirs, executors, and administrators in any capacity of the above. Nothing in this Agreement shall release any insurer from any obligations to defend or indemnify any Party or non-party to this Agreement with respect to any claims not encompassed within the Complaint or Third-Party Complaint. Without limitation, and for the sake of clarity, the claims, counter and cross-claims of T-2 Three vs. Turner Construction (Orange County Superior Court Case No. 30-2011-00514568-CU-BC-CJC), specifically are not within scope of the releases granted herein. The District Court’s Final Approval Order shall constitute a judgment dismissing the Action with prejudice, but the District Court shall retain jurisdiction to oversee and carryout the Settlement. 11.2 Unknown Claims: Consistent with and subject to Section 11.1, the mutual releases contemplated by this Settlement and provided for in this Agreement extend to Claims that the Parties and Playground Destination Properties, Inc. do not know or suspect to exist at the time of the release, which if known, might have affected the decision to enter into the release (“Unknown Claims”). In releasing their Unknown Claims, the Parties and Playground Destination Properties, Inc. expressly waive (and each Class member by operation of law shall be deemed to waive) any and all protections, provisions, rights and benefits conferred by any law of the United States or any state or territory of the United States, or principle of common law, which governs or limits a person’s release of Unknown Claims, including Section 1542 of the California Civil Code. Section 1542 of the California Civil Code provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS 30 11cv1842-GPC(KSC) 26 OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The Parties and Playground Destination Properties, Inc. understand and acknowledge (and each Class member by operation of law shall be deemed to have acknowledged) the significance of these waivers of California Civil Code Section 1542 and/or of any other applicable law relating to limitations on releases of Unknown Claims. In connection with such waivers and relinquishment, the Parties and Playground Destination Properties, Inc. acknowledge (and each Class member by operation of law shall be deemed to acknowledge) that they are aware that they may hereafter discover facts in addition to, or different from, those facts which they now know or believe to be true with respect to the subject matter of the Settlement, but that they release fully, finally and forever all released Claims, and in furtherance of such intention, the release will remain in effect notwithstanding the discovery or existence of any such additional or different facts. The Parties and Playground Destination Properties, Inc. acknowledge (and all Class members by operation of law shall be deemed to acknowledge) that the release of Unknown Claims as set forth herein was separately bargained for and was a key element of the Settlement. 11.3 Limitation of Release: Consistent with Sections 11.1 and 11.2 above and mentioned here for avoidance of doubt, this Settlement will not in any way impact: (a) the Tarsadia Defendants’ rights against putative class members Frank Issa and/or Ray Hammi relating to, in connection with or arising from any and all judgments, demands, and claims for attorneys’ fees and costs incurred by the Tarsadia Defendants, and others, in connection with other litigation (excluding this Action) brought against them involving the Hard Rock Hotel guestroom condominium units; and (b) the continuing rights and obligations between GT and its insurers. The Settlement and this Agreement shall not affect any debts owed by any of the Class members to the Tarsadia Defendants, and all Class Representatives and Class members will remain fully obligated on any and all such debts. 11.4 Three parties that were previously dismissed as defendants in this Action (B.U. Patel, Tushar Patel, and MKP One, LLC) are not parties to this Settlement but have agreed to mutual releases with GT and Playground via a separate agreement. 27 9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 28 The Settlement Administrator, Garden City Group, LLC, is hereby directed to implement and carry out the Settlement in accordance with the terms and provisions 31 11cv1842-GPC(KSC) 1 thereof, Dkt. No. 273-2, Schrag Decl., Ex. 1, including the Distribution Plan, Dkt. No. 2 273-7, Schrag Decl. Ex. E to Settlement Agreement. 3 10. Class Counsel and the Class Representatives fairly and adequately 4 represented the interests of Class members. The Court finds that Class Counsel’s request 5 for $17,050,000.00 in attorney fees which represents 33 and 1/3% of the Settlement Fund 6 is fair and reasonable, given the high level of risk involved, the result achieved, the high 7 quality of the legal representation, the duration of this case, the novelty of their claim, and 8 the complexity of the issues in this Court and the Court of Appeals. In addition, this Court 9 has cross-checked the fee award and finds that Class Counsel’s combined lodestar of 10 $5,908,280.50 is reasonable under the circumstances of this case and that the 2.89 11 multiplier on this lodestar is fair and reasonable for the reasons discussed above. The 12 Court finds Class Counsel reasonably spent over 9,104 hours representing the Class’s 13 interests over the course of this litigation, that Class Counsel’s hourly rates are reasonable 14 and in line with the prevailing rates in the community for complex class action litigation. 15 The Court further finds that the $195,089 in costs incurred to prosecute the litigation were 16 reasonable. Accordingly, Class Counsel is hereby awarded attorney fees in the amount of 17 $17,050,000.00, and costs in the amount of $195,089.00. 18 11. The Tarsadia Defendants and GT shall make the payments specified in 19 paragraph 8.1 of the Settlement Agreement within the deadline specified in that paragraph 20 (i.e., 15 days from the date of this Order), and the Settlement Administrator shall 21 distribute the $17,050,000.00 in attorneys’ fees and the $195,089.00 in costs to Class 22 Counsel (in the amounts and in the manner specified by them) within five (5) days of the 23 Effective Date. 24 12. The Court further finds the requested service awards are fair and reasonable, 25 given the time and effort expended by the Class Representatives on behalf of the Class, 26 and the risk they incurred in pursuing relief on behalf of the Class. The Court awards four 27 $50,000.00 service awards to: (1) Mr. Gauba, (2) Kevin and Veronica Kenna, (3) Dean 28 and Laurie Beaver, and (4) Messrs. Adelman and Aghachi. These incentive awards shall 32 11cv1842-GPC(KSC) 1 be distributed by the Settlement Administrator at the same time as the attorneys’ fees and 2 costs. 3 13. On August 1, 2017, a Notice of Lien was filed in this case for satisfaction of 4 a money judgment against two Class members (Frank Issa and Ray Hammi) in a separate 5 case, 5th & K Parcel 2 Owners’ Association, Inc. v. Tamer Salameh, et al., San Diego 6 Superior Court Case No, 37-2010-00094424-CUOR- CTL (lead case). Dkt. No. 281 (the 7 “Lien”). At the request of GT and with the agreement of the other parties, the Court 8 confirms that the Lien does not impose any duties or obligations on GT, its insurers, their 9 underwriters and related entities. GT should proceed to honor its payment obligations 10 under the terms of the Settlement Agreement, without regard to the Lien. Should Mr. Issa 11 or Hammi seek relief from the Lien, the Court will address the Lien separately after final 12 approval. 13 14. There being no just reason for delay, the Court, in the interests of justice, 14 expressly directs the Clerk of the Court to enter this Final Order and Judgment, and 15 hereby decrees that, upon entry, it be deemed a Final Judgment. 16 15. Without affecting the finality of this Judgment in any way, this Court hereby 17 retains continuing jurisdiction over (a) implementation and administration of the 18 Settlement; (b) further proceedings, if necessary, on applications for attorneys’ fees and 19 costs in connection with the Action and the Settlement; and (c) the Parties and the Class 20 members for the purpose of construing, enforcing, and administering the Settlement 21 Agreement and all orders and judgments entered in connection therewith. 22 IT IS SO ORDERED. 23 Dated: September 28, 2017 24 25 26 27 28 33 11cv1842-GPC(KSC) BEAVER v. TARSADIA ‐ CLASS MEMBER LIST Buyer No. 1 Unit No. Last Name Buyer No. 2 First Name First Name Last Name Michael Clarissa Rene Christopher Manuel Christopher S Craig   Cecil  Steven Don Jerome Josef Michael Jason Nicole V Dinesh Dean Thomas Smith Povenmire  Doctolero Morgan Diaz Rosibel Daniel Guisela Rachel Fernando Kushen  Becker Tang Kuenster Buyer No. 3 First Name Last Name Buyer No. 4 First Name Last Name Buyer No. 5 First Name Meredith Elizabeth  Thomas Susan Hand Last Name UNITS STILL OWNED BY CLASS MEMBERS 220 222 234 310 312 314 320 322 332 334 338 350 352 354 356 359 408 420 426 427 429 430 431 432 434 438 440 442 503 504 507 510 511 518 520 522 526 530 532 533 535 536 538 541 543 544 546 550 556 559 560 604 605 606 607 608 Smith McPeck Doctolero Morgan  Martinez Miller Kushen Annett Tang Kuenster Zwass Feeney Hand Simpson‐Galligan Gauba Beaver Kimball Fifth Street Investors L L C NCO Properties LLC Godinez Trymax, California GP Marbury‐Hammonds Schindler Erskine Wells Paniccia Lapsi Mauter Volore Kass Schneider Dogan Acharya Hom Goldstein Tassiello Sunabe Sunabe Pruski Hammond Francescon Angulo Baird Salazar Salazar Gay Durfee Clayton Celeste Hetherington Rabindranauth Oriol Moughan Cimo  Modiano Young Paul  Franchesta Mark  Joshua Marc   Mario Amar Keith   Brandon Irving James Jarrod Bella Yau Keung Eyal Richard Jack   Jack   Timothy  Myle Lewis Victor Brian Laurie  Laurie  Stephen Peter Kristopher Leon Roy Premnauth Caesar John Joseph Robert Seldon Olivares Luis Fitzgerald Kevin Frank  Hand Kathy Sheila Beaver Kimball Dobee Laurie Lori Kimball Casie Kimball Kyle Pensco Trust Co. McCormick Jolly Mark Kevin Zabka Sven Mackey Tom Gibbons Brendan Coates Jay  Erskine Wells Paniccia Shane Margaret Rachel Erskine Wells Kirt Christopher Erskine Charlene Grieco Jason Mauter Susan Schneider Blaise Johnstone Candice Heather  Jeffrey Tassiello Sunabe Sunabe Amy Marian Marian Francescon Angulo Baird Kimberly Laura Meagan Ghorbani Jason Ghorbani Adriana Ritaldato Durfee Cortez Celeste Hetherington Zaky Oriol Moughan Cimo Modiano Young Dennis Susan Marcos Lisa Maria Mary Julie Nicole Patricia Nina Heston Gay David Cortez Andrew Cortez Socorro Hesel LLC Page 1 of 7 EXHIBIT A Buyer No. 6 First Name Last Name Buyer No. 1 Unit No. 609 620 626 627 628 630 632 636 638 640 641 642 643 648 650 658 659 701 702 704 708 711 718 726 727 729 730 731 732 738 740 743 744 754 758 802 804 807 809 812 816 818 824 825 826 827 828 829 833 836 837 838 839 840 843 846 854 856 859 902 903 Last Name First Name Scolinos Frank Bakshi Uminderjit Adelman Steven  Schneider Douglas Chen Yei‐Huang  Tayloe Michael Berman Joseph Friedman Gregory  Elbling Ronald Mokharti Mohsen Viesca Las Vegas LLC (David/Margarita McCain) Hand Jason Schmalle Joral Kline Kelly Paniccia Anthony  Wilson Brian Erickson Michael T. Rock Daddy LLC Villasenor Jose Villasenor Jose Dirkson Mark Steven Nye Troy Schwartz Pam Robertson Christopher Parkos Robert Terhune Gentry Ota Bowen Kline Kelly Porcelli Joseph Ou  Joy Pinkerton William Cedar Mountain LLC Garnett John Hugo Jonathon Berman Joseph   Security Fse Ninety‐Eight Inc Wells David Mohler Floyd Amadio Brian Evans Ronald Prime Coordinates, LLC (Sergio Gallego) Sandrian Reza Rowan Doug Usui Mark Strada Nelson  Reese Donald Tkach Adam   Thuy‐Truong Lynn Luttrull Ronald ADD  Properties LLC Valdivieso Lawrence  Viola Alexander Gregory Wiener, MD Profit Sharing Plan Nute James Kenna Kevin Giampaolo  Michael  Kouza Fawaz P. Pennington David Trymax, California GP Castro Ernest V Baker Kathryn Last Name Scolinos Bakshi Aghachi Schneider Tu Johnson Berman Friedman Elbling Buyer No. 2 First Name Maria Jagjit Abraham Anne Marie Ahn Howard Leslie Linda Jacqueline Last Name Buyer No. 3 First Name Scola Linda  Hand Roman‐Schmalle Frank Patricia Hand Mario Elizabeth Paniccia Mezich Ronald Cindy Sunny Sloan‐Ortiz Buyer No. 6 First Name Last Name Joshua Geske Buyer No. 5 First Name Jennifer Susan Parkos Terhune Ota Rutan Last Name Rachel Daniel Ortiz Nye Stewart Buyer No. 4 First Name Kathy Paniccia Wilson Last Name Donna Bonita Alexandra Gina Porcelli Pinkerton Nicole Garnett Bernardo Berman Bonnie M Rainier Leslie Milne Bernardo Shane Jennifer Wells Freshwater Donna Ken King Rodriques Gregory Brian J Sedigheh Rowin Roya Jody Metroyanis Frank Metroyanis Teresa Horrigan Sean Reese Tkach Hung Truong Luttrull Dungan Melanie Angela Richard    Kimberly Richard    Tosh Diane Jan Vicek Cuthbert Raquel Errol R Korn  Ira Erickson  Kenna Giampaolo Terry Veronica Cristine Doherty Sean M. Pozzi Matthew S. Kanafani Ghassan L. Baker Troy Page 2 of 7 Horrigan Krista Buyer No. 1 Unit No. 904 905 911 912 914 916 920 925 927 929 930 931 933 934 936 938 941 942 946 948 952 956 959 1001 1002 1004 1008 1009 1010 1011 1016 1018 1020 1022 1024 1026 1028 1031 1032 1033 1035 1036 1037 1038 1042 1044 1046 1059 1101 1110 1114 1116 1118 1120 1122 1126 1128 1129 1131 1135 1136 Last Name First Name Joral Michael Daniel Grant Joseph Glenn Kristofer Richard Edward  Last Name Roman‐Schmalle Schmalle Erickson Mezich Upchurch Gaertner Gaertner Casper Casper Ong‐Veloso Roberts Racofsky Guanill Guanill 303 Solutions LLC Sherif Oleg Gonzalez Ruben A. Hassen Sam Benaron Joseph Blankenship ER Trust (Parham Soroudi, Trustee) Barrett Robyn Lynn Frankel Family Trust (Douglas and Mindi Frankel) Reed Foletta Mark G. JKE Holdings, Inc. (Erskines) Darby Tvorik Stephen Tvorik Woods Family Trust (Barry K Woods  & Diane W. Woods‐Trustees) Sze Geordie Strauss Family Trust (William  L & Margie A Strauss‐ Trustees) Kushen Craig   Kushen  Trymax, a California GP Pack Scott M Wood Ruiz Miguel Francisco Abed Ruiz Hughes Gary D Hughes Mosley Coleman Mosley Porter Brook F Porter Lee Stephen Lee Low Nelman Low Roberts John  Roberts Shean  Keith   Shean Scibetti Charles J Purdie Miles Dean Richards Take 2 LLC Rosenberger  Catherine M Lindsay Greg Lindsay Estoril, LP Darden Jon   Darden Avedikian Eddie Garnet Sorensen  Matthew  Sorenson Manio  Allan Manio Thielen Brian Kaminski Frank Gough Derek Cohan Ross Cohan Vllasenor Jose Trymax, California GP Contento Louis J Merrell David E Harris Randall S Harris Mirra David  Mirra SHG Holding LLC Dao Mymy Lord John Marc   Lord Fabian Rosie Fabian Painter Robert Painter Chew III Edward  Wedge Signaigo Thomas Mark Buyer No. 2 First Name Denise Last Name Buyer No. 3 First Name Last Name Buyer No. 4 First Name Mark Tiana Susan Upchurch  Pham‐Lukas Bergstrom Dennis Bergstrom Julia Hughes Shelby K Hughes Tracy M Geronime Purdie Lara Edith Geronime Mark Olga Casado Christopher Casado Valerie Christine Noah Joseph Kimberly Duarte Ma Effren Roger Carolan G Kathleen Mirra Mark Shannon Vivian Deborah Gary Fletcher Marcotte Ronald Joe Miranda Leonard Buyer No. 5 First Name Kay Brianne Veronica Last Name Lisa Timothy Jason Kathryn Meredith Kelly D Mauricio Jose Vega Judy Y Ellen Beth A Joji Stephanie Karen Kodama Joanne Charlotte Alexander M. Kurt Morena Page 3 of 7 Miranda Teresa Buyer No. 6 First Name Last Name Buyer No. 1 Unit No. 1137 1139 1142 1143 1144 1146 1148 1154 1156 1158 1159 1201/1209 1208 1210 1211 1212 1218 1222 1226 1229 1230 1232 1233 1234 1235 1238 1239 1244 1250 1252 1259 1260 Last Name Miller Brunnhoelzl Healey Massa Brookes J&D Capital Holding, Inc Sperbeck (Trustee) Funke Magallon Maze Inzunza Villasenor Vargas  Multhauf  Turner Vargas  Sowden Simington 1226 Hard Rock LLC Andrews Nagy Revocable Trust Chappell Padua Osley Jr. Joseph Trymax, a California GP Top of the Rock San Diego, LLC Shakelian James  Callaghan  Sohovich Neu Lopez First Name Richard  Michael Fritz Farid Darren  Nura  T Thomas  M Luis Hobart Joseph Jose James Lloyd Frank James F Douglas S Kenneth Last Name Miller Brunnhoelzl Healey Klein Yune Buyer No. 2 First Name Carla Ann Janine Jeannine Jennifer Jane Jiwon Magallon Maze Inzunza Ofelia Freida Kristi Vargas Multhauf Zinn Vargas Maureen Nagy D'Ambrosia Eric Teresa Shakelian Callaghan Sohovich Neu Lopez Lisa Schneider Mary Jean Nicolay Christy M Rogers Vigil Valentini Dunaway Sapienza Lum Rodil‐Separa Peterson Sarah N Rebecca J Danny T Jennifer G Jennifer L.  Margaret Florem  Jane L Gorne Sanchez Delgado Cheng Goniea DiMeglio Bennett Lee Ann Christine Rose Mary Sharon R. Concepcion B Paul J Leah H Buyer No. 4 First Name Harout Suzanne Debra Esperanza Tracy Heydet Last Name Sandra Christopher  Mosh Joseph Buyer No. 3 First Name Frances Carmen Laurel Frances T Simington Last Name Long Catherine Sargenti Steve Mosh Danielle McCafferty Douglas M Gaffud Berridge Emeline R. Ashley Sanchez Michelle Sargenti Sherri Devone‐McCafferty Yvonne M. Peter N Jason  Anthony   John P Donald L Anto James Gregory  David Brandon  SOLD UNITS 230 318 326 340 348 410 418 422 425 433 446 452 458 514 516 525 529 542 558 610 618 625 629 652 656 703 Tsui Bermeo Heydet Guillet Schneider Garg Chacon Silver Bay Properties, Inc. Chrisman Vigil Valentini Dunaway Sapienza Childre Rodil Peterson   Zeller Folkers Merriman Gorne   Sanchez Delgado Cheng Goniea Loelkes Bennett Albert H. Dennis G. Richard    Christopher G Charles Geeta Robert Robert G David  L Christine F Jerry T John J Kevin Belinda L. Eric  G Kathleen Victoria Hill  Benjamin  Shawne Brian Steve Samuel Tina M. Clifford J Roland X David  S Page 4 of 7 Last Name Buyer No. 5 First Name Buyer No. 6 First Name Last Name Buyer No. 1 Unit No. 705 710 712 716 722 734 739 746 759 760 801 831 835 852 906 907 908 926 940 943 944 1006 1027 1030 1048 1050 1052 1056 1058 1111 1127 1130 1138 1140 1152 1160 1224 1227 1231 1248 Last Name Goniea Kianpour Sanchez Egan Zanotelli Collins Persson Phillips Myhedyn Ripley NCO PROPERTIES, LLC Matiasic Frost Webster Batrez Smith Molitor GTIves Consulting LLC Frankel Jupp Nguyen Peterson Sturm Congtang Rock Star 1048 LLC (Brian Verburg) Melillo Martin Bono Fordham Veliz Rose Davis Salas Souissi Thompson Golledge Johnson Magallon Clements Yasukochi First Name Clifford J Alireza Corey James P Joseph  V William   Lars G Kari A Mark  Rodney J Paul A Sherri R George W Joshua M Todd Derek Michael P Paul  R Peter Doris K Clayton Marco Yenchi  Joseph   Kevin N Christy Robert Jose G Edward A Jr Jason Marco M.  Slim Blake Heidi Richard  M Luis J Jim Takeshi Last Name Goniea Buyer No. 2 First Name Concepcion B Zanotelli Collins Larry E Patricia A Veronica Heather Leigh Kourtney A Stewart‐Jupp Rebecca Martin Mays Nicole D Dennis Michael Rose Schranz Salas Janice A  Jeffrey Fabiola Buyer No. 4 First Name Beth Peterson Last Name Gross  Edward W. Yeager Pauline Peterson Todd Peterson Tara Salas Jorge A Dougherty Stephen Bargoon Martha Dorian Charissa Weginer Justin Shoemaker (J Tenant ‐ DieWilliam   Johnson Magallon Clements Yasukochi Cynthia A Ofelia Lori Joyce S.A. Simeon Van de Zilver Jacqueline A Valerie Dorian Dimacali Baret Arlene B Dorian Benedicto Mariam Alexander Golec Montoya Rajasingam Michael Vickie P Patrick S Chestang Anne E Zlotoff Wesley Kennedy Robert Gollaz (trustee) Lucke James Richard T Gollaz (trustee) Leibner Sandra David Mullen Naito Tobin Risa FORECLOSED UNITS 228 346 414 424 428 435 444 450 505 527 531 548 554 601 603 631 634 646 Simeon  Van de Zilver Faticone Ovanesian  Dimacali Tecson Pitner Montoya Rajasingam Veliz Bollen Attias Loya Doherty Smargon Mullen Tran Geiger Omer T II Eric Carrie Ann Louisa Dexter C Paul C Todd Gabriel H Pat Ernesto Jamin Messod Glenda  Ryan Magdalena Jesse   Bihn Phuong Andrew Last Name Buyer No. 5 First Name Christopher J Tracie Van Frost Webster Batrez Smith Molitor Buyer No. 3 First Name Mary R Lisa Phillips Alstyne Last Name Page 5 of 7 Yeager Michael E Buyer No. 6 First Name Last Name Buyer No. 1 Unit No. 654 660 707 714 725 737 750 752 805 806 808 811 841 844 848 901 910 918 924 935 937 939 950 954 958 960 1007 1014 1034 1039 1040 1041 1043 1054 1060 1112 1133 1134 1216 1242 10 Units Last Name Higgins Gerke Crichton Schroadter Masanes Perez Hammi Sandhu Wayne Yahya Ferrer Marshall Geisen Rosana Kinsey Alber  Okada Walsh Luna Martos  Devito Bluestar Development LLC Ergueta Saragueta Plati Hodlin Corley KAG Hard Rock LLC Burton Jr Morris Investment Properties, LLC Nabors Nguyen Greene Sample Mullen Dunton Martel Jr.  Schroadter Laffen Fu Stanzaz, LLC First Name Quinn John Leslie Adam Edgardo Peter A Ray Harmanjit Singh Brian Adbulilah Frederick Frank Grant Ardith William J J. David  Jr. Michael Patrick Scott Humberto J John Ester E Michael Liliana Matthew R Douglas E Last Name Buyer No. 2 First Name Roper Michelle (Mia?) Rosalee Marshall Geisen Rosana Lizbeth Gregory Ruth E Okada Jolly Saltzman Martos  Knapic Shirley Kevin Kevin Kimberly K Kristina Placencia Karen J Hodlin Lotwis Gordon Bridgette Barbara A Kenneth Martin Roby Adler Coen Avon Wallace Adler Deposki Yahya Emad Yahya Astabrik Geisen Linda Jolly Kevin Walsh Patrick Geisen Grant Geisen Linda Geisen Gregory Morris Nabors John Cuong Duc David  L Kelly Sample Jesse   Sewell N. III Dunton William Adam    Schroadter Gregory E Myong Amy #454,506,612,709,728,822,832,909,932,1124 Ronald L Sandra Kristy L Linn Adrienne Robert Avon Wallace Cynthia Beltran Steven Diane Kami James Nolan James Shane Lashgari Roseanne Mixed Units ‐ Salemeh Non‐Parties 360 512 624 733 748 Cantoral Havluciyan Nolan Alvarenga Family Living Trust Lashgari Buyer No. 5 First Name Sandra Earnest  Anita Stacy Caren Brendan Joseph S. Michele Caren Kenneth Last Name Yahya Mixed Units ‐ Bell Non‐Parties 448 456 635 724 742 756 1214 1225 Buyer No. 4 First Name Frank Hanley Yahya Last Name Susanna Arlene Issa Buyer No. 3 First Name Scott T. Schroadter Masanes Last Name Page 6 of 7 Buyer No. 6 First Name Last Name Buyer No. 1 Unit No. 842 928 Last Name Lovejoy Reyna First Name Mariah Richard Last Name Buyer No. 2 First Name Last Name Buyer No. 3 First Name Page 7 of 7 Last Name Buyer No. 4 First Name Last Name Buyer No. 5 First Name Buyer No. 6 First Name Last Name

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