Kerr v. Zacks Investment Research, Inc. et al

Filing 116

ORDER Granting 108 Motion for Preliminary Approval of Settlement and Providing for Notice. Final Approval Hearing set for 4/6/2018 at 1:30 PM before Judge Gonzalo P. Curiel. Signed by Judge Gonzalo P. Curiel on 11/17/17. (dlg)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

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JOHN KERR, EDWARD LI,
11 TIM BARNARD, and KENNETH
CURTIS, individually and on behalf of
12 all others similarly situated,
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Plaintiffs,

14 vs.

CASE NO. 16-CV-01352 GPC BLM
ORDER GRANTING
PRELIMINARY APPROVAL OF
SETTLEMENT AND PROVIDING
FOR NOTICE
[DKT. NO. 108]

15 ZACKS INVESTMENT RESEARCH,
INC., an Illinois corporation,
16 NATIONAL MARKETING
RESOURCES, LLC, a Missouri limited
17 liability company; PARADIGM
DIRECT LLC, a Delaware limited
18 liability company; RESPONSE
NORTH, LLC, a Utah limited liability
19 company; ZACKS INVESTMENT
MANAGEMENT, INC. an Illinois
20 corporation; and DOES 6-50, inclusive,
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Defendants.

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Pending before the Court is Plaintiffs’ Unopposed Motion for Preliminary

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2 Approval of Settlement (“Motion”) relating to the settlement between plaintiffs John
3 Kerr (“Kerr”), Edward Li (“Li”), Tim Barnard (“Barnard”), Kenneth Curtis (“Curtis”),
4 (collectively, “Plaintiffs”) and defendants Zacks Investment Management, Inc.
5 (“ZIM”) and Zacks Investment Research, Inc. (“ZIR”) (together, “Zacks”); Response
6 North, LLC (“Response North”); National Marketing Resources, LLC (“NMR”); and
7 Paradigm Direct LLC (“Paradigm”) (collectively, “Defendants”).1 Dkt. No. 108. A
8 hearing was held as to this matter on November 9, 2017, where the Court ordered the
9 parties to submit supplemental briefing. Dkt. No. 113. On November 15, 2017,
10 plaintiffs filed a supplemental brief and revised Class Notices. Dkt. No. 115.
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Having read and considered the moving papers, including the Settlement

12 Agreement, and finding good cause, the Court finds and orders as follows:
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1.

Based upon the Court’s review of the Settlement Agreement, the Motion

14 (Dkt. No. 108), the supporting memorandum, the supporting declaration and attached
15 exhibits, Plaintiffs’ Supplemental Briefing and the attached exhibits (Dkt. No. 115),
16 and the entire record, Plaintiffs’ Unopposed Motion for Preliminary Approval of
17 Settlement is GRANTED.
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2.

The Court hereby conditionally certifies the following classes for

19 settlement purposes only (the “Classes”):
The “Zacks Class” is defined as follows:
“All natural persons nationwide who, between and including May
6, 2012 and June 30, 2017, received a telephone call that was
(1) made to their cellular telephone and (2) initiated by or on
behalf of ZIR or ZIM using an automatic telephone dialing
system. Excluded from the Zacks Class are all employees of
defendants, all employees of defendants’ counsel, all employees
of plaintiffs’ counsel, and judicial officers, their family members,
and court staff assigned to the Lawsuit.”

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Capitalized terms, not defined herein, have the same meaning as in the
Settlement Agreement (Dkt. No. 108-3).
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The “Response North TCPA Class” is defined as follows: 2
“All natural persons nationwide who received from Response
North a telephone call reflected in contact databases produced by
Response North, which (1) was placed as part of the Zacks Book
Campaign and/or the Options Trading Campaign and (2) was
received on a cellular telephone. Excluded from the Response
North TCPA Class are all employees of Response North, all
employees of Response North’s counsel, all employees of
plaintiffs’ counsel, and judicial officers, their family members,
and court staff assigned to the Lawsuit.”

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The “Response North Privacy Class” is defined as follows:
“All California residents who received from Response North a
telephone call reflected in contact databases produced by
Response North, which (1) was made on a telephone line that was
subject to recording by Response North and (2) was received by
the recipient in the State of California. Excluded from the
Response North Privacy Class are all employees of Response
North, all employees of Response North’s counsel, all employees
of plaintiffs’ counsel, and judicial officers, their family members,
and court staff assigned to the Lawsuit.”

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3.

The Court finds, for settlement purposes only, that the Classes meet the

14 requirements for certification under Fed. R. Civ. P. 23(a) and 23(b)(3) in that: (i) the
15 Classes are so numerous that joinder is impracticable; (ii) there are questions of law
16 and fact that are common to all Class Members, which predominate over individual
17 issues; (iii) regarding typicality: (a) Kerr’s claims are typical of the claims of the
18 Response North TCPA Class and the Response North Privacy Class and (b) the claims
19 of Li, Barnard, Curtis, Cares, Johnson, and Abjanic are typical of the claims of the
20 Zacks Class; (iv) Kerr, Li, Barnard, Curtis, Cares, Johnson, Abjanic, and Class
21 Counsel will fairly and adequately protect the interests of the Classes; and (v) a class
22 action is superior to other available methods for the fair and efficient adjudication of
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As stated in Exhibit 1 to Plaintiff’s Supplemental Briefing, the Zacks Book
Campaign refers to “certain telephone calls to the cellular telephones of certain
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individuals in connection with telemarketing efforts relating to a book
26 published by ZIR.” The Options Trading Campaign refers to “certain telephone
calls to the cellular telephones of certain individuals in connection with
27 telemarketing efforts . . . relating to an educational seminar regarding options
trading.” See Dkt. No. 115.
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1 the controversy. The Court appoints Kerr as the representative of the Response North
2 TCPA Class and the Response North Privacy Class; Li, Barnard, Curtis, Cares,
3 Johnson, and Abjanic as the representatives of the Zacks Class; Dostart Hannink &
4 Coveney, LLP as Class Counsel; and CPT Group, Inc. as the Settlement
5 Administrator.
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4.

The Court preliminarily approves the Settlement, including the monetary

7 relief, procedure for payment of Class Counsel’s attorneys’ fees and litigation
8 expenses to the extent ultimately awarded by the Court, and procedure for payment of
9 class representative incentive awards to the extent ultimately awarded by the Court.
10 The Court has reviewed the monetary relief that has been provided as part of the
11 Settlement and recognizes its significant value to the Classes. It appears to the Court
12 on a preliminary basis that the Settlement is fair, adequate, and reasonable as to all
13 potential Class Members when balanced against the cost and uncertainty associated
14 with further litigation of liability and damages issues. It further appears that settlement
15 of the Litigation at this time will avoid substantial additional costs by all Parties, as
16 well as the delay and risks that would be presented by the further prosecution of the
17 Litigation. It also appears that the Settlement has been reached as a result of intensive,
18 serious, and non-collusive arm’s-length negotiations.
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5.

The Court approves the Amended Summary Class Notices, the Amended

20 Publication Notice, and the Amended Long Form Class Notice, which are attached as
21 Exhibits 1-7 to the Supplemental Brief in Support of Plaintiffs’ Unopposed Motion
22 for Preliminary Approval (“Supplemental Brief”) (ECF No. 115). The Settlement
23 Administrator shall use for all purposes the Amended Notices (Exhibits 1-7 of the
24 Supplemental Brief), rather than the original notices (Exhibits A-F of the Settlement
25 Agreement).

The Court approves the Claim Forms (Exhibits G and H to the

26 Settlement Agreement). The Court also approves the Parties’ revised agreement, as
27 set forth in the Supplemental Brief, to publish the Amended Publication Notice three
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1 times in the Wall Street Journal. Along with the foregoing, the notice procedure
2 described in the Settlement meets the requirements of Fed. R. Civ. P. 23 and due
3 process and constitutes the best practicable notice under the circumstances. The
4 Settlement Administrator is directed to distribute the Amended Summary Class
5 Notices via email or mail no later than thirty (30) days after entry of this Order, and
6 to take all steps necessary to establish a settlement website. The date on which the
7 Amended Summary Class Notices are emailed or mailed by the Settlement
8 Administrator is the “Notice Date.”
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Any objections to the Settlement or to any of its provisions must be filed

10 with this Court and served upon Class Counsel, Defendants’ counsel, and the
11 Settlement Administrator no later than sixty (60) days following the Notice Date, or
12 else such objection will be waived.
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7.

As set forth in the Settlement, any Class Member who wishes to be

14 excluded from a Class shall mail, email, or personally deliver to the Settlement
15 Administrator a written request to be excluded no later than sixty (60) days following
16 the Notice Date. Individuals in the Classes who do not timely request exclusion shall
17 be bound by all determinations of the Court, the Settlement, and any Judgment that
18 may be entered thereon.
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If they have not already done so, Zacks and Response North shall

20 promptly comply with the requirements of 28 U.S.C. § 1715.
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The Parties shall file any motion for final approval, and Class Counsel

22 shall file its motion for attorneys’ fees, litigation expenses, and service payments to
23 Kerr, Li, Barnard, Curtis, Cares, Johnson, and Abjanic, on the dates required under
24 the Local Rules and under controlling law.
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10.

A final approval hearing shall be held in this Court on April 6, 2018, at

26 1:30 p.m., at which time the Court will determine whether the Settlement should be
27 granted final approval. At that time, the Court will also consider Class Counsel’s
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1 motion for attorneys’ fees, litigation expenses, and the proposed service payments to
2 Kerr, Li, Barnard, Curtis, Cares, Johnson, and Abjanic.
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11.

Any Class Member may appear at the Final Approval Hearing and object

4 to the Settlement (“Objectors”). Objectors may present evidence and file briefs or
5 other papers that may be proper and relevant to the issues to be heard and determined
6 by the Court. No Class Member or any other person shall be heard or entitled to
7 object, and no papers or briefs submitted by any such person shall be received or
8 considered by the Court, unless on or before the date that is sixty (60) days after the
9 original date of emailing or mailing of the Summary Class Notices, that person has
10 filed the objections, papers, and briefs with the Clerk of this Court and has served by
11 hand or by first-class mail copies of such objections, papers, and briefs upon Class
12 Counsel (Dostart Hannink & Coveney, LLP, Attention Zach P. Dostart, 4180 La Jolla
13 Village Drive, Suite 530, San Diego, California 92037) and Defendants’ counsel
14 (Burke, Warren, MacKay & Serritella, P.C., Attention Danielle J. Gould, 330 North
15 Wabash Avenue, 22nd Floor, Chicago, Illinois 60611; Lewis Brisbois Bisgaard &
16 Smith LLP, Attention Stephen Turner, 633 West 5th Street, Suite 4000, Los Angeles,
17 California 90071; and Meylan Davitt Jain Arevian & Kim LLP, Attention Raymond
18 B. Kim, 444 South Flower Street, Suite 1850, Los Angeles, California 90071). Any
19 Participating Class Member who does not object in the manner provided for in this
20 order shall be deemed to have waived such objection and shall forever be foreclosed
21 from objecting to the Settlement.
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12.

If the Settlement does not become effective in accordance with the terms

23 of and as defined in the Settlement, or if the Settlement is not finally approved by the
24 Court, or is terminated, canceled or fails to become effective for any reason, this order
25 shall be rendered null and void and shall be vacated, and the Parties shall revert to
26 their respective positions before entering into the Settlement. Accordingly, if the
27 Settlement does not become effective for any reason: (i) the Settlement shall be null
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1 and void and shall have no further force and effect with respect to any Party in this
2 Litigation, and shall not be used in this Litigation or in any other proceeding for any
3 purpose and (ii) all negotiations, proceedings, documents prepared, and statements
4 made in connection therewith shall be without prejudice to any person or Party hereto,
5 shall not be deemed or construed to be an admission by any Party of any act, matter,
6 or proposition, and shall not be used in any manner or for any purpose in any
7 subsequent proceeding in this Litigation, provided, however, that the termination of
8 the Settlement shall not shield from subsequent discovery any factual information
9 provided in connection with the negotiation of the Settlement that would ordinarily be
10 discoverable but for the attempted settlement.
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13.

The Court reserves the right to adjourn or continue the date of the Final

12 Approval Hearing and all dates provided for in the Settlement without further notice
13 to Class Members, and retains jurisdiction to consider all further matters arising out
14 of or connected with the proposed Settlement.
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14.

In accordance with the terms of the Settlement, the Court hereby adopts

16 the following dates for performance of the specified activities leading to the Final
17 Approval Hearing:
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November 22, 2017

Deadline for Class Counsel to provide the
Settlement Administrator with the Zacks
Database and the Response North Database.

December 1, 2017

ZIR, ZIM, or their insurer shall transfer the sum
of $250,000.00 into an interest-bearing account
administered by the Settlement Administrator.

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Response North or its insurer shall transfer the
sum of $200,000.00 into an interest-bearing
account administered by the Settlement
Administrator.

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December 18, 2017

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Deadline for Settlement Administrator to email
or mail the Summary Class Notices to all
persons listed in the Zacks Database and the
Response North Database. This is the “Notice
Date.”
Deadline for Settlement Administrator to
establish a website on which it will make
available the operative complaint, the Settlement
Agreement, the order granting preliminary
approval of the Settlement, a Long Form Class
Notice, the Zacks Claim Form (in a format that
may be printed), the Response North Claim
Form (in a format that may be printed), and any
other materials agreed to by the Parties.

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The date on or after which the Settlement
Administrator will cause the Publication Notice
to be published in the Wall Street Journal (may
be within 3 days after the Notice Date).

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February 16, 2018

Claim/Exclusion/Objection Deadline; Last day
for Class Members to submit a Claim; Last day
for Class Members to submit a request for
exclusion or to file and serve any written
objection to the Settlement and any notice of
intent to appear at Final Approval Hearing

March 2, 2018

Deadline for Claims Administrator to provide to
Class Counsel and Defendants’ counsel a
written report summarizing the Claims that have
been received and the Claims that have been
validated, and listing any request for exclusion
or objection that has been received by the
Settlement Administrator.

April 6, 2018 at 1:30 PM

Final Approval Hearing

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The parties are ordered to carry out the Settlement in the manner provided

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1 IT IS SO ORDERED.
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Dated: November 17, 2017

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