IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN … · 2018. 1. 6. · On June 23, 2015, Plaintiffs West and Hollander brought a putative class action against Act II, Kiam Equities

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

CYNTHIA WEST, KRISTINE

HOLLANDER, JENNIFER ZIMMERMAN,

MARY ROMAN, MARIE ESPOSITO, and

MICHELLE BALLON, individually and on

behalf of all others similarly situated,

Plaintiffs,

v.

ACT II JEWELRY, LLC, a Delaware limited

liability corporation d/b/a lia sophia, and

VICTOR K. KIAM, III,

Defendants.

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Case No. 1:15-cv-05569

Judge Samuel Der-Yeghiayan

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION FOR

PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

Submitted by:

Joseph J. Siprut

[email protected]

Todd L. McLawhorn

[email protected]

Ke Liu

[email protected]

SIPRUT PC

17 N. State Street

Suite 1600

Chicago, Illinois 60602

Phone: 312.236.0000

Fax: 312.878.1342

Counsel for Plaintiffs and

the Proposed Settlement Classes

Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 1 of 37 PageID #:754

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii

EXHIBIT LIST .............................................................................................................................. vi

INTRODUCTION ...........................................................................................................................1

BACKGROUND .............................................................................................................................3

THE PROPOSED SETTLEMENT .................................................................................................6

A. Certification of the Proposed Settlement Classes ..........................................................6

B. Class Relief ....................................................................................................................7

C. Class Notice ...................................................................................................................9

D. Incentive Awards to Class Representatives .................................................................11

E. Attorneys’ Fees and Expenses .....................................................................................11

ARGUMENT .................................................................................................................................12

I. The Proposed Settlement is Fair and should be Preliminarily Approved ....................12

A. Strength of the Case Balanced Against the Settlement ....................................12

B. The Risk, Expense, & Complexity of the Case ...............................................15

C. The Opinion of Counsel ...................................................................................16

D. The Extent of Discovery ..................................................................................17

E. The Presence of Governmental Participants ....................................................17

II. The Settlement Classes should be Provisionally Certified ..........................................18

A. Numerosity – Federal Rule of Civil Procedure 23(a)(1) .................................18

B. Commonality/Predominance –

Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3) ...................................20

C. Typicality – Federal Rule of Civil Procedure 23(a)(3) ....................................23

D. Adequacy of Representation – Federal Rule of Civil Procedure 23(a)(4) .......24

E. Superiority – Federal Rule of Civil Procedure 23(b)(3) ..................................25

III. The Form and Method of Service of Class Notice should be Approved .....................26

IV. The Court should Schedule a Hearing for Final Settlement Approval ........................28

CONCLUSION ............................................................................................................................29


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TABLE OF AUTHORITIES

Cases

A & L Indus., Inc. v. P. Cipollini, Inc.,

No. 12-7598, 2014 WL 906180 (D.N.J. Mar. 7, 2014) .................................................... 28

Amchem Prods. Inc. v. Windsor,

521 U.S. 591 (1997) .............................................................................................. 18, 25, 26

Armstrong v. Bd. of Sch. Dirs. of the City of Milwaukee,

616 F.2d 305 (7th Cir. 1980) ............................................................................................ 12

Arnold Chapman & Paldo Sign & Display Co. v. Wagener Equities Inc.,

747 F.3d 489 (7th Cir. 2014) ............................................................................................ 19

Butler v. Sears, Roebuck & Co.,

727 F.3d 796 (7th Cir. 2013) ............................................................................................ 22

Carnegie v. Household Int’l, Inc.,

376 F.3d 656 (7th Cir. 2004) ............................................................................................ 25

Donovan v. Estate of Fitzsimmons,

778 F.2d 298 (7th Cir. 1985) ............................................................................................ 13

Eisen v. Carlisle & Jacquelin,

417 U.S. 156 (1974) .................................................................................................... 26, 27

Fletcher v. ZLB Behring LLC,

245 F.R.D. 328 (N.D. Ill. 2006) ........................................................................................ 22

Gehrich v. Chase Bank USA, N.A.,

No. 12 C 5510, 2016 WL 806549 (N.D. Ill. Mar. 2, 2016) ........................................ 16, 19

Gomez v. Ill. State Bd. of Educ.,

117 F.R.D. 394 (N.D. Ill. 1987) ........................................................................................ 24

Hedges v. Earth Inc.,

No. 14-cv-9858, 2015 WL 10853985 (N.D. Ill. Oct. 14, 2015) ....................................... 28

Hinman v. M & M Rental Ctr., Inc.,

545 F. Supp. 2d 802 (N.D. Ill. 2008) ................................................................................ 24

In re AT & T Mobility Wireless Data Servs. Sales Litig.,

270 F.R.D. 330 (N.D. Ill. 2010) .................................................................................. 13, 27


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In re AT & T Mobility Wireless Data Servs. Sales Tax Litig.,

789 F. Supp. 2d 935 (N.D. Ill. 2011) ................................................................................ 28

In re Capital One Tel. Consumer Protection Act Litig.,

80 F. Supp. 3d 781 (N.D. Ill. 2015) .................................................................................. 28

In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig.,

No. 09-cv-03690, 2014 WL 1017515 (N.D. Ill. Mar. 17, 2014) ...................................... 28

In re Nat’l Collegiate Athletic Ass. Student-Athlete Concussion Injury Litig.,

314 F.R.D. 580 (N.D. Ill. 2016) ........................................................................................ 28

In re Neopharm, Inc. Secs. Litig.,

225 F.R.D. 563 (N.D. Ill. 2004) ........................................................................................ 23

Ira Holtzman, C.P.A. v. Turza,

728 F.3d 682 (7th Cir. 2013) ............................................................................................ 22

Isby v. Bayh,

75 F.3d 1191 (7th Cir. 1996) ............................................................................................ 12

Kessler v. Am. Resorts Int’l,

No. 05 C 5944, 2007 WL 4105204 (N.D. Ill. Nov. 14, 2007) .......................................... 12

Kolinek v. Walgreen Co.,

311 F.R.D. 483 (N.D. Ill. 2015) ........................................................................................ 16

Marcial v. Coronet Ins. Co.,

880 F.2d 954 (7th Cir. 1989) ............................................................................................ 19

Maxwell v. Arrow Fin. Servs., LLC,

No. 03 C 1995, 2004 WL 719278 (N.D. Ill. Mar. 31, 2004) ............................................ 19

Mullins v. Direct Digital, LLC,

795 F.3d 654 (7th Cir. 2015) ............................................................................................ 25

Nicaj v. Shoe Carnival, Inc.,

135 S. Ct. 1429 (2015) ...................................................................................................... 11

Patterson v. Gen. Motors Corp.,

631 F.2d 476 (7th Cir. 1980) ............................................................................................ 20

Pope v. Harvard Banchares, Inc.,

240 F.R.D. 383 (N.D. Ill. 2006) ........................................................................................ 19


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Radmanovich v. Combined Ins. Co. of Am.,

216 F.R.D. 424 (N.D. Ill. 2003) ........................................................................................ 23

Redman v. RadioShack Corp.,

768 F.3d 622 (7th Cir. 2014) ............................................................................................ 11

Rosario v. Livaditis,

963 F.2d 1013 (7th Cir. 1992) .......................................................................................... 20

Scholes v. Stone, McGuire, & Benjamin,

143 F.R.D. 181 (N.D. Ill. 1992) ........................................................................................ 20

Schulte v. Fifth Third Bank,

805 F. Supp. 2d 560 (N.D. Ill. 2011) .......................................................................... 16, 17

Shestopal v. Follett Higher Education Grp., Inc.,

No. 15-cv-8980, Dkt. No. 54 (N.D. Ill. Nov. 17, 2016) ................................................... 28

Smith v. Nike Retail Servs., Inc.,

234 F.R.D. 648 (N.D. Ill. 2006) ........................................................................................ 18

Swanson v. Am. Consumer Indus., Inc.,

415 F.2d 1326 (7th Cir. 1969) .......................................................................................... 19

Synfuel Techs, Inc. v. DHL Express (USA), Inc.,

463 F.3d 646 (7th Cir. 2006) ............................................................................................ 12

Szabo v. Bridgeport Machines, Inc.,

249 F.3d 672 (7th Cir. 2001) ............................................................................................ 18

Wal-Mart Stores, Inc. v. Dukes,

131 S. Ct. 2541 (2011) ...................................................................................................... 20

Whitten v. ARS Nat’l Servs. Inc.,

No. 00 C 6080, 2001 WL 1143238 (N.D. Ill. Sept. 27, 2001) .......................................... 20

Williams v. Chartwell Fin. Serv., Ltd.,

204 F.3d 748 (7th Cir. 2000) ............................................................................................ 18

Wong v. Accretive Health, Inc.,

773 F.3d 859 (7th Cir. 2014) ............................................................................................ 12

Statutes and Rules

28 U.S.C. § 1715 ........................................................................................................................... 17


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Fed. R. Civ. P. 23 ................................................................................................................... passim

Other Authorities

Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS (4th ed. 2002) .............. 19, 26

MANUAL FOR COMPLEX LITIGATION (4th ed. 2004) ............................................................... 18, 28

EXHIBIT LIST


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Settlement Agreement ......................................................................................................... Exhibit 1

Claim Form ...............................................................................................................Exhibit 1-A

Email Notice ............................................................................................................. Exhibit 1-B

Postcard Notice ......................................................................................................... Exhibit 1-C

Long Form Web Notice ............................................................................................Exhibit 1-D

Social Media Notice .................................................................................................. Exhibit 1-E

Publication Notice Description ................................................................................. Exhibit 1-F

Proposed Preliminary Approval Order .....................................................................Exhibit 1-G

Declaration of Todd L. McLawhorn ................................................................................... Exhibit 2

Siprut PC Firm Resume ............................................................................................Exhibit 2-A


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Pursuant to Fed. R. Civ. P. 23, Plaintiffs Cynthia West (“West”), Kristine Hollander

(“Hollander”), Jennifer Zimmerman (“Zimmerman”), Mary Roman (“Roman”), Marie Esposito

(“Esposito”), and Michelle Ballon (“Ballon”) (collectively, the “Plaintiffs”), by their counsel,

respectfully submit the following Memorandum In Support Of Motion For Preliminary Approval

Of Class Action Settlement, and move for an Order: (1) preliminarily approving the Agreement1

as being fair, reasonable, and adequate; (2) preliminarily approving the form, manner, and

content of the Class Notice; (3) setting the date and time of the Final Approval for no earlier than

180 days from the date preliminary approval is granted; (4) provisionally certifying the proposed

Settlement Classes under Rule 23 of the Federal Rules of Civil Procedure for settlement purposes

only; (5) provisionally appointing Plaintiffs as representatives of the Classes; and (6)

provisionally appointing Joseph J. Siprut, Todd L. McLawhorn and Siprut PC as Class Counsel.

INTRODUCTION

Defendants Act II Jewelry, LLC (“Act II”) and Victor K. Kiam, III (“Victor Kiam”)

(collectively, the “Defendants”) and Plaintiffs have entered into a Settlement Agreement (the

“Settlement Agreement” or “Settlement” or “Agreement”) in the above-referenced matter

(attached hereto as Exhibit 1). The Settlement Agreement—a product of over two years of

litigation, extensive discovery, and four mediations—settles the dispute relating to Plaintiffs’

claims of Defendants’ breach of contract, violation of the Illinois Consumer Fraud and Deceptive

Practices Act (“ICFA”), fraud and unjust enrichment.

The cornerstone of the Settlement is the substantial, concrete monetary relief it provides

for Settlement Class Members. The relief achieved by the Settlement is an “all-in,” non-

reversionary, common fund in the amount of $6,700,000—cash (the “Settlement Fund”). All

1 Unless otherwise stated herein, capitalized terms shall have the same meaning as

provided in the Parties’ Settlement Agreement, attached hereto as Exhibit 1.


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Class Members who submit an Approved Claim will be paid cash out of the Settlement Fund.

The Settlement encompasses three Settlement Classes, all of which will receive monetary

payments as detailed infra. The Settlement provides that the best practicable notice be provided

to Class Members, and calls for the designation of a reputable and competent professional

Settlement Administrator, Heffler Claims Group LLC, to disseminate notice of and administer

the Settlement.

The Parties reached the Settlement after voluminous discovery and four mediations,

including two separate sessions with the respected and experienced JAMS mediator, the Hon.

James F. Holderman (Ret.). Defendants raised a number of potential defenses to Plaintiffs’

substantive claims and arguments in opposition to Plaintiffs’ request for class certification.

While Plaintiffs believe that, if litigation were to continue, they could overcome Defendants’

asserted defenses, Plaintiffs nevertheless recognize the risk to them and, more importantly, the

Classes if Plaintiffs were unsuccessful. Plaintiffs also recognize the significant risk concerning

collectability of any judgment, given that Defendant Act II in early 2015 terminated its direct

selling business and entered into an asset foreclosure with a creditor to whom Act II still owes an

eight figure debt.

In sum, although both sides believe their respective positions in the action are

meritorious, they have concluded that, due to the uncertainties and expense of protracted

litigation, it is in the best interest of Plaintiffs, the putative Classes, and Defendants to resolve

this action on the terms provided in the attached Agreement. Accordingly, and for reasons further

detailed below, Plaintiffs and Class Counsel request that this Court enter an order preliminarily

approving this Settlement.


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BACKGROUND

Act II did business as lia sophia, and sold costume jewelry to consumers through a party

planning method that utilized sales advisors who sold jewelry at parties hosted for that purpose,

similar to the method used by Avon and Tupperware. Act II generally sold its full-price jewelry

with a lifetime replacement guarantee. On December 1, 2014, Act II announced that it would

wind down its direct sales business, including fulfillment of claims under the lifetime

replacement guarantee, by the end of the year.

On June 23, 2015, Plaintiffs West and Hollander brought a putative class action against

Act II, Kiam Equities Corporation (“Kiam Equities”), Victor K. Kiam, III, and Elena Kiam, in

the United States District Court for the Northern District of Illinois (the “Court”), case number

15-cv-5569. (Dkt. No. 1.) Plaintiffs West and Hollander alleged causes of action of breach of

contract, violation of the Illinois Consumer Fraud Act, common law fraud, and unjust enrichment

against these Defendants for purportedly revoking the lifetime warranties on their jewelry, and

for purportedly making material misrepresentations or omissions to its sales advisors by inducing

them to continue working as sales advisors, which included the purchase of supplies and jewelry

from the Defendants, even though the Defendants knew the sales advisors would not be able to

recoup those expenditures because Defendants had planned to close the business at least six

months prior to making the announcement. (Id. at ¶¶72-128.)

On October 19, 2015, the Parties held a mediation with Retired District Judge James F.

Holderman in Chicago, Illinois. (Declaration of Todd L. McLawhorn (“McLawhorn Decl.”),

attached hereto as Exhibit 2, ¶5.) Prior to the mediation, the Parties engaged in limited discovery

and exchanged written mediation statements summarizing their respective positions concerning

the factual and legal issues in the litigation. (Id.) This mediation did not result in settlement. (Id.)


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Following the mediation, the Defendants moved to dismiss the complaint on multiple

grounds. (Dkt. No. 35.) After full briefing before the Court, on March 18, 2016, the Court denied

Act II’s motion but granted the remaining Defendants’ motion, dismissing Kiam Equities

Corporation, Victor Kiam, and Elena Kiam from the Litigation (Dkt. No. 58). Act II filed an

answer denying all material allegations, along with affirmative defenses, including that the

claims were barred by the statute of limitations. (Dkt. No. 34.)

Between April 2016 and April 2017, the Parties engaged in multiple rounds of written

and electronic discovery regarding the claims and defenses in this litigation. (McLawhorn Decl.

¶7.) Although the parties produced and analyzed a substantial number of documents, discovery

in the case was significantly complicated by the wind-down of Act II’s active business. For

example, much of the data regarding Act II’s business transactions records are contained in two

large databases that exist only as SQL back-ends with no front-end user interface due to a

business dispute with an information technology vendor and that vendor’s subsequent

bankruptcy. Nevertheless, discovery was extensive, as it involved: (a) review of approximately

12,267 pages of documents produced by Plaintiffs; (b) review of 20,111 pages of documents

produced by Act II; (c) review of approximately 345 pages of documents produced by Victor

Kiam; (d) review of approximately 6 pages of documents produced by Kiam Equities; (e) review

of approximately 203 pages of documents produced by Elena Kiam; (f) review of approximately

963 pages of documents produced by additional third parties in addition to computer media

provided by those third parties; (g) the preparation for taking and/or defending the depositions of

approximately ten fact witnesses from Act II and various third-parties; and (h) the preparation for

taking and/or defending the depositions of the six Class Representatives. (Id.)


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While discovery was ongoing, on November 30, 2016, Plaintiffs filed their First

Amended Class Action Complaint (the “First Amended Complaint”), alleging claims for breach

of contract, violation of the ICFA, fraud and unjust enrichment. (Dkt. No. 75.) Plaintiffs West

and Hollander, now joined by Plaintiffs Zimmerman, Roman, Esposito, and Ballon, sought to

represent three classes: (a) all individuals who purchased jewelry from Act II; (b) all individuals

who sold jewelry for Act II; and (c) all individuals who joined Act II as sales advisors in 2014

and who purchased initial starter kits after May 31, 2014. (Id. at ¶¶130-132.) Plaintiffs’ First

Amended Complaint also re-named Victor Kiam as a co-Defendant. (Dkt. No. 75.) On December

20, 2016, Defendants filed their Answer to Plaintiffs’ First Amended Complaint and denied all

material allegations. (Dkt. No. 77.)

Following the filing of the First Amended Complaint, the Parties continued to engage in

discovery. In the spring of 2017, Defendants deposed three of the Class Representatives.

(McLawhorn Decl. ¶9.) Following those depositions, the Parties resumed settlement discussions

and engaged in three separate, extensive mediations over the course of approximately four

months. (Id. at ¶10.) As a result of those continued discussions and mediations, on July 17, 2017,

during a mediation before Judge Holderman (the fourth mediation in this litigation), the Parties

agreed to a settlement in principal. (Id.) A Settlement Term Sheet was subsequently executed on

August 1, 2017. (Id.)

During August and September 2017, the Parties worked extensively with the proposed

Settlement Administrator, Heffler Claims Group LLC, to analyze confirmatory class data in

order to: (a) finalize the terms of the Settlement; and (b) structure a notice plan consistent with

Fed. R. Civ. P. 23(c)(2)(B). (Id. at ¶11.) In September 2017, after several exchanges of drafts and


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edits, and numerous conference calls, the Parties agreed to the form and content of the

Settlement Agreement. (Id.)

THE PROPOSED SETTLEMENT

The proposed Settlement provides the following:

A. Certification of the Proposed Settlement Classes.

Plaintiffs request that the Court, for the purposes of settlement, certify three Settlement

Classes defined as:

1. Customer Class – All individuals in the United States who

purchased jewelry from Defendant Act II Jewelry, LLC between

June 23, 2011, and December 1, 2014.

2. Sales Advisor Class – All individuals in the United States who

sold at least $250 of jewelry for Defendant Act II Jewelry, LLC

between January 1, 2014, and August 17, 2014.

3. New Sales Advisor Class – All individuals in the United States

who purchased initial starter kits from Defendant Act II Jewelry,

LLC between August 1, 2014, and December 1, 2014.

Specifically excluded from all three Classes are the following

persons: (a) Defendants and their respective affiliates; (b) Class

Counsel and their immediate family members; and (c) the judges

who have presided over this litigation and their immediate family

members.

Based on analysis of the discovery and confirmatory data provided by Defendants, the

Customer Class is estimated to contain approximately 4.0 million individuals, the Sales Advisor

Class is estimated to contain approximately 19,069 individuals, and the New Sales Advisor Class

is estimated to contain approximately 2,709 individuals. (McLawhorn Decl. ¶12.) The Sales

Advisor Class definition uses August 17, 2014, as a cut-off because reliable sales data from after

that date is not reasonably accessible by the parties.


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B. Class Relief.

The Settlement establishes an all-in, non-reversionary Settlement Fund of $6,700,000

cash, to provide relief for the Class Members as well as pay for settlement administration

expenses, Class Counsel’s attorneys’ fees and costs, and Plaintiffs’ incentive awards. First, the

Settlement Fund will be used to pay for settlement administration expenses, which, based on the

Settlement Administrator’s analysis of the confirmatory class data provided by Defendants, are

estimated to be $1,300,000 (resulting in a remaining $5,400,000, the “Net Settlement Fund”).

Class Counsel then intends to seek an attorneys’ fees award not exceeding one-third of the Net

Settlement Fund (approximately $1,800,000), and incentive awards for the Class Representatives

ranging from $2,500 to $7,500, totaling approximately $25,000. This results in an estimated fund

of $3,575,000 cash to provide relief for the Classes (the “Class Fund”).

The Settlement establishes the following relief for Class Members:

Customer Class. Fifty-seven percent (57%) of the Class Fund

(approximately $2,037,750) is allocated to the Customer Class. Each

Customer Class Member who submits a Valid Claim form shall be placed

in one of three “Tiers” depending on the amount of jewelry they purchased

from Act II between June 23, 2011, and December 1, 2014.

Each Customer Class Member who submits a Valid Claim form and

purchased less than $100 of jewelry will be placed into Tier One and will

receive the same amount as each other Customer Class Member in Tier

One – i.e. a pro rata distribution. Each Customer Class Member who

submits a Valid Claim form and purchased between $100 and $299.99 of

jewelry will be placed into Tier Two and will receive double the amount

received by each Customer Class Member in Tier One. Each Customer

Class Member who submits a Valid Claim form and purchased $300 or

more in jewelry will be placed into Tier Three and will receive triple the

amount received by each Customer Class Member in Tier One.

The entire amount allocated to the Customer Class will be distributed to

the Customer Class. The final cash payment to Customer Class Members

will depend on the total number of Valid Claims filed by the Customer

Class. The proposed Settlement Administrator has analyzed Act II’s

records and estimates the following recoveries based on claims rate:


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Customer Class

Claims Rate

Estimated

Recovery

(Tier One)

Estimated

Recovery

(Tier Two)

Estimated

Recovery

(Tier Three)

1% $40.09 $80.18 $120.27

3% $13.36 $26.72 $40.08

5% $8.01 $16.02 $24.03

Customer Class Members who receive direct notice (via email or mail)

will be informed of which Tier the Settlement Administrator has

designated their claim to fall in. The Settlement Administrator shall

implement a method in the online claims process through which Customer

Class Members may challenge their Tier designation and submit evidence

to the Settlement Administrator thereof (e.g. receipts).

Sales Advisor Class. Thirty-eight percent (38%) of the Class Fund

(approximately $1,358,500) is allocated to the Sales Advisor Class. Each

Sales Advisor Class Member who submits a Valid Claim form shall

receive a share of the amount allocated to the Sales Advisor Class

proportional to the amount of sales made by that Sales Advisor Class

Member between January 1, 2014, and August 17, 2014.

The entire amount allocated to the Sales Advisor Class will be allocated to

the Sales Advisor Class. The final cash payment to Sales Advisor Class

Members will depend on the total number of Valid Claims filed by the

Sales Advisor Class. The proposed Settlement Administrator has analyzed

Act II’s records and estimates the following recoveries based on claims

rate:

Sales Advisor Class Claims Rate Estimated Recovery

10% 20.04% of the Member’s 2014 Sales



New Sales Advisor Class. Five percent (5%) of the Class Fund

(approximately $178,750) is allocated to the New Sales Advisor Class.

Each New Sales Advisor Class Member who submits a Valid Claim form

shall receive a full reimbursement for the cost of his or her initial starter

kit, which ranged from $99 to $149.

In the event the number of Valid Claims for New Sales Advisor Class

Members exhausts the amount allocated to the New Sales Advisor Class,

each New Sales Advisor who submits a Valid Claim will have his or her

benefit reduced proportionally so that the total benefit to the New Sales

Advisor Class does not exceed five percent (5%) of the Class Fund. In the

event that there is money remaining in the New Sales Advisor Class Fund

after payment of benefits to all New Sales Advisor Class Members who

submit Valid Claims, the remainder shall be reallocated back to the Class


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Fund and distributed to the Customer Class and the Sales Advisor Class in

the same proportion as other funds distributed to those Classes, as

described above.

No Reversion. No amount of the Settlement Fund shall revert back to

Defendants. Settlement Class Members’ uncashed checks shall be

awarded to a cy pres recipient.

The Settlement is thus designed to afford relief to as many Class members as possible.

C. Class Notice.

Subject to the Court granting preliminary approval of the Settlement, the Settlement

Administrator will provide the Class with notice of the proposed Settlement by the following

methods:

Direct Notice Via Electronic Mail. Within forty (40) days after entry of

the Preliminary Approval Order, the Settlement Administrator shall, for all

Settlement Class Members for whom the Settlement Administrator is able

to determine an email address based on transaction records provided by

Defendant Act II, disseminate direct notice by email in the first instance,

in the form of Exhibit B to the Settlement Agreement.

Direct Notice Via U.S. Mail. Within fifty-five (55) days after entry of the

Preliminary Approval Order, the Settlement Administrator shall, for all

Settlement Class Members for whom the Settlement Administrator is

unable to determine an email address, and for all Settlement Class

Members for whom email notice is sent that is returned, disseminate direct

notice by U.S. mail, in form of Exhibit C to the Settlement Agreement.

The mailing addresses provided on the Notice List shall be run through a

National Change of Address database prior to being mailed. The postage

rate selected for the mailing of the Notice shall provide for notification of

forwarding addresses. If the Notice is returned by the Postal Service with a

forwarding address or other error that can be ascertained and corrected,

then the Settlement Administrator shall re-send the Notice to the new

address within five (5) business days.

Notice Via Settlement Website. Within forty (40) days after entry of the

Preliminary Approval Order, the Settlement Administrator shall create a

Settlement Website where notice, in the form of Exhibit D to the

Settlement Agreement, shall be posted and on which Settlement Class

Members may submit claims.


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Notice Via Social Media. Within forty (40) days after entry of the

Preliminary Approval Order, Defendants shall post notice of the

Settlement on the lia sophia outlet and lia sophia Facebook pages, in the

form of Exhibit E to the Settlement Agreement.

Notice Via Publication. Within forty (40) days after entry of the

Preliminary Approval Order, the Settlement Administrator shall

implement a highly targeted online search and social media outreach effort

to serve over 3,000,000 impressions via Internet banners, as well as issue a

press release to over 7,000 news outlets and journalists, as described in

Exhibit F to the Settlement Agreement.

Toll-Free Phone Line. Within forty (40) days after entry of the

Preliminary Approval Order, the Settlement Administrator shall establish

a phone line with touch-tone and interactive voice response for individuals

to learn more about the Settlement.

CAFA Notice. Pursuant to 28 U.S.C. § 1715, not later than ten (10) days

after the Agreement is filed with the Court, Defendants shall serve upon

the Attorneys General of each U.S. State in which there are members of

the Class, the Attorney General of the United States, and other required

government officials, notice of the proposed settlement, which shall

include: (1) a copy of the most recent complaint and all materials filed

with the complaint or notice of how to electronically access such

materials; (2) notice of all scheduled judicial hearings in the Action; (3) all

proposed forms of Notice to the Settlement Class; and (4) a copy of this

Agreement. To the extent known, the Defendants shall serve upon the

above-referenced government official the names of Class Members who

reside in each respective state and the share of the claims of such members

to the entire settlement, or if not feasible, a reasonable estimate of the

number of Class Members residing in each state and the estimated

proportionate share of the claims of such members to the entire

Agreement. The costs of conducting CAFA Notice shall not be deducted

from the Settlement Fund. Defendants are responsible for paying the costs

of CAFA Notice separate and apart from the Settlement Fund.

In order to receive a Cash Award described above, the Settlement Class Member must

submit a Claim Form within ninety (90) days after the Notice Date. Class Members may submit

their claims via mail or online at the Settlement Website. Class Members who wish to either opt-

out of or object to the Settlement, must do so in accordance with the Agreement within ninety

(90) days after the Notice Date. Within sixty (60) days of the Effective Date, or at another time


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as the Court directs, the Settlement Administrator shall cause distribution of Cash Awards to the

Settlement Class Members who submit Approved Claims.

D. Incentive Awards to Class Representatives.

Subject to Court approval, the Class Representatives will request Incentive Awards

ranging from $2,500 to $7,500, in recognition of their contributions to the Settlement Class and

the risk they incurred in commencing the action, both financial and otherwise. The Court does

not need to award or otherwise rule on Plaintiffs’ Incentive Awards at this time. Class Counsel

will file a motion for the Incentive Awards, pursuant to the schedule in the Preliminary Approval

Order, and will support the request for the awards in detail.

E. Attorneys’ Fees and Expenses.

Class Counsel will request fees and expenses in the amount of one-third of the Net

Settlement Fund (approximately $1,800,000). Importantly, however, this is not a provision of the

Settlement. There is no agreement on attorneys’ fees—i.e., no “clear-sailing” provision—

consistent with recent Seventh Circuit jurisprudence. Redman v. RadioShack Corp., 768 F.3d

622, 637 (7th Cir. 2014) (“Clear-sailing clauses have not been held to be unlawful per se, but at

least in a case such as this, involving a non-cash settlement award to the class, such a clause

should be subjected to intense critical scrutiny by the district court[.]”), cert. denied sub nom.

Nicaj v. Shoe Carnival, Inc., 135 S. Ct. 1429 (2015). Of course, this Settlement is a common

fund, cash settlement and, hence, “intense critical scrutiny” is not warranted. In any event, the

Court does not need to award or otherwise rule on Class Counsel’s fees at this time. Class

Counsel will file a motion for attorneys’ fees separately, pursuant to the schedule in the

Preliminary Approval Order, and will support the request for fees in detail.


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ARGUMENT

I. The Proposed Settlement is Fair and should be Preliminarily Approved.

Both judicial and public policies strongly favor the settlement of class action litigation.

Isby v. Bayh, 75 F.3d 1191, 1199 (7th Cir. 1996) (“We also consider the facts ‘in the light most

favorable to the settlement.’”); Armstrong v. Bd. of Sch. Dirs. of the City of Milwaukee, 616 F.2d

305, 312 (7th Cir. 1980) (“It is axiomatic that the federal courts look with great favor upon the

voluntary resolution of litigation through settlement.”). Although the standards to be applied at

the preliminary approval stage “are ultimately questions for the fairness hearing that comes after

a court finds that a proposed settlement is within approval range, a more summary version of the

same inquiry takes place at the preliminary phase.” Kessler v. Am. Resorts Int’l, No. 05 C 5944,

2007 WL 4105204, at *5 (N.D. Ill. Nov. 14, 2007). The factors considered at this stage include:

“(1) the strength of the case for plaintiffs on the merits, balanced against the extent of settlement

offer; (2) the complexity, length, and expense of further litigation; (3) the amount of opposition

to the settlement; (4) the reaction of members of the class to the settlement; (5) the opinion of

competent counsel; and (6) stage of the proceedings and the amount of discovery completed.”

Wong v. Accretive Health, Inc., 773 F.3d 859, 863 (7th Cir. 2014).2

A. Strength of the Case Balanced Against the Settlement.

“The most important factor relevant to the fairness of a class action settlement is the

strength of the plaintiff’s case on the merits balanced against the amount offered in the

settlement.” Wong, 773 F.3d at 864; Synfuel Techs, Inc. v. DHL Express (USA), Inc., 463 F.3d

646, 653 (7th Cir. 2006). However, “courts should refrain from resolving the merits of the

controversy or making a precise determination of the parties’ respective legal rights.” In re AT &

2 Until notice is provided, there is not an opportunity for Class Members to react to the

Settlement. Hence, factors “(3)” and “(4)” are not analyzed below.


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T Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. 330, 346 (N.D. Ill. 2010) (internal

quotations omitted). Moreover, “[b]ecause the essence of settlement is compromise, courts

should not reject a settlement solely because it does not provide a complete victory to the

plaintiffs.” Id. (internal quotations omitted) Rather, the integral part of the Court’s strength-

versus-merits evaluation is “a consideration of the various risks and costs that accompany

continuation of the litigation.” Donovan v. Estate of Fitzsimmons, 778 F.2d 298, 309 (7th Cir.

1985).

Plaintiffs Hollander and Ballon allege that Defendants breached their contracts, violated

the ICFA, committed common law fraud, and were unjustly enriched by failing to honor their

promise of lifetime warranties on the jewelry they sold and by unilaterally repudiating the terms

of the lifetime replacement guarantee, even though Defendants knew they would not honor the

lifetime guarantee upon closure of their business. (Dkt. No. 75, ¶¶140-171.) Plaintiffs Hollander

and Ballon therefore claim that they, and the Customer Class, have sustained damages through

the diminished value of the jewelry they purchased. (Id.)

Plaintiffs West, Esposito, and Roman allege that Defendants violated the ICFA,

committed common law fraud, and were unjustly enriched by continuing to encourage their Sales

Advisors to purchase jewelry from Act II, by assuring their Sales Advisors that they would never

bypass them and sell directly to the customers, and by taking their Sales Advisors’ customer

information and using it to compete against them. (Id. at ¶¶172-194.) Plaintiffs West, Esposito,

and Roman therefore claim that they, and the Sales Advisor Class, have sustained damages

through their reliance on Defendants’ statements in continuing to work and purchase jewelry and

supplies as Act II Sales Advisors. (Id.)


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Plaintiff Zimmerman alleges that Defendants violated the ICFA and committed common

law fraud by encouraging New Sales Advisors to purchase initial starter kits, even though

Defendants knew the New Sales Advisors would never recoup their expenditures because Act II

was going to close its business. (Id. at ¶¶195-209.) Plaintiff Zimmerman therefore claims that

she, and the New Sales Advisor Class, have sustained damages through their reliance on

Defendants’ statements in purchasing their initial starter kits and by Defendants’ abrupt closure

of business. (Id.)

Defendants deny liability and assert several defenses that would defeat Plaintiffs’ claims

on both substantive and procedural grounds. With respect to the Customers, Defendants contend

that the lifetime warranty was expressly limited only to manufacturers’ defects, that breach of

contract claims are not actionable under the ICFA, that most Customers – including the named

Plaintiffs – had no breach of warranty claim because they never attempted to return their jewelry,

and that determining whether each customer tried and failed to return jewelry with a

manufacturer’s defect is an individualized question not suitable for class treatment. With respect

to the Sales Advisors and New Sales Advisors, Defendants contend that the Advisors expressly

waived their right to participate in class actions pursuant to the terms of their contracts, that Sale

Advisors had no right to continue as sales advisors after their agreements were terminated, that

Sales Advisor claims were defeated by their contracts, that Act II had a right to contact its own

customers, that the Sales Advisors were not the procuring cause of any online sales, and that the

Sales Advisors’ alleged injuries had no connection to their theory of liability. Defendants further

contend that any alleged statements made to the Customers or Advisors were true (or believed to

be true) at the time they were made, that reliance on any allegedly fraudulent statements cannot

be demonstrated on a classwide basis, and that reliance on any allegedly fraudulent statements


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did not cause any actual injury. One of the factors to be considered as to the fairness of a class

action settlement is a defendant’s willingness and ability to mount just such a vigorous defense,

as it demonstrates that the class may not have recovered all (or any) of what it sought at trial.

As explained above, the Settlement allows Class Members to receive direct monetary

relief depending on the claims-rate of each class. If 3% of Customer Class Members submit valid

claim forms, each of those claimants will receive approximately $13 to $40, depending on the

amount of jewelry purchased, to offset the alleged diminished value of their jewelry from the

alleged repudiation of the lifetime guarantee. Similarly, if 15% of Sales Advisor Class Members

submit valid claim forms, each of those claimants will receive payments totaling approximately

13% of their sales of Act II jewelry in 2014, to offset their alleged injuries incurred due to

Defendants’ misappropriation of their customer contacts. Finally, members of the New Sales

Advisor Class will receive relief in the amount of the full cost of the initial starter kits they

purchased, which ranged from $99 to $149. While Plaintiffs believe that their claims are strong,

Plaintiffs are also aware of the inherent risks and costs of continuing with complex litigation of

this nature. If Defendants were to prevail on their asserted defenses, Class Members, including

Plaintiffs, would receive no relief at all. Given this possibility, the Settlement Agreement is a

meaningful achievement. Accordingly, the Settlement provides a tangible benefit to all those

affected by Defendants’ repudiation of the lifetime guarantee and sudden closure of business.

B. The Risk, Expense, & Complexity of the Case.

Due to the nature of Plaintiffs’ case, trial will require the collection of evidence and

witness testimony from across the country. Both Parties would examine a number of Act II’s

current and former employees, as well as the employees and agents of Act II’s affiliates and

other third-parties. Defendants intend to assert several defenses that they contend bar Plaintiffs’

claim in whole or in part, which Plaintiffs would necessarily attempt to rebut. The uncertainty as


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to whether these defenses apply in this case creates substantial risk for both sides. Plaintiffs and

proposed Class Counsel also recognize that the expense, duration, and complexity of protracted

litigation would be substantial, and would require further briefing on numerous substantive

issues, evidentiary hearings, further discovery, and the gathering of witnesses. In addition,

Defendant Act II has subsequently closed, and has few, if any, assets available to satisfy a

judgment.

C. The Opinion of Counsel.

“The opinion of competent counsel is relevant to the question whether a settlement is fair,

reasonable, and adequate under Rule 23.” Schulte v. Fifth Third Bank, 805 F. Supp. 2d 560, 586-

87 (N.D. Ill. 2011). Here, Class Counsel has extensive experience in consumer class actions and

complex litigation. (McLawhorn Decl. ¶15.) See Gehrich v. Chase Bank USA, N.A., No. 12 C

5510, 2016 WL 806549, at *9 (N.D. Ill. Mar. 2, 2016) (“Class Counsel are experienced []

litigators and strongly support the settlement. . . . this factor (whatever its weight) favors

approval.”); Kolinek v. Walgreen Co., 311 F.R.D. 483, 495 (N.D. Ill. 2015) (“Class counsel in

this case are highly experienced class action litigators who strongly support the proposed

settlement. This factor weighs in favor of approval.”).

Based upon proposed Class Counsel’s analysis of the information obtained from

Defendants during discovery and the four mediation sessions, the Settlement Agreement

represents a significant recovery for the Settlement Classes, especially when weighed against

Defendants’ anticipated defenses and the inherent risks of litigation. Class Counsel believes that

the Settlement is beneficial to the Settlement Classes and meets the class-certification

requirements of Rule 23. (McLawhorn Decl. ¶17.)


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D. The Extent of Discovery.

Based upon discovery conducted by the Parties, Plaintiffs believe they possess the

evidence needed to evaluate the strengths and weaknesses of the case. Extensive discovery has

taken place in this litigation. As explained supra, the Parties have reviewed tens of thousands of

pages of documents, including those produced by various third parties. (Id. at ¶7.) In addition,

the Parties have prepared for the taking and/or defending the depositions of approximately ten

fact witnesses from Act II, the six Class Representatives, and various third-parties. (Id.) Three of

the Class Representatives were deposed. (Id. at ¶14.) In sum, counsel for each party has

sufficient information to assess the strengths, weaknesses, and likely expense of taking this case

to trial.

While the Parties have both formally and informally exchanged information critical to

evaluating the strength of Plaintiffs’ contentions (and Defendants’ defenses), the amount of

discovery taken is not a prerequisite to a class action settlement. Courts have noted that, “the

label of ‘discovery’ [either formal or informal] is not what matters. Instead, the pertinent inquiry

is what facts and information have been provided.” Schulte, 805 F. Supp. 2d at 587 (internal

citation omitted). Here, information more than sufficient to make a reasonable and informed

decision has been procured, meaning that there was a reasonable, informed basis to evaluate the

Settlement.

E. The Presence of Governmental Participants.

Although there is no governmental entity participating in this matter as of this time, full

and complete notice is being provided to all appropriate state and federal authorities. Defendants

will provide such notice which will include all appropriate information and documents required

by the Class Action Fairness Act, 28 U.S.C. § 1715(b).


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II. The Settlement Classes should be Provisionally Certified.

Before preliminary approval of a class action settlement can be granted, the Court must

determine that the proposed class is appropriate for certification. Amchem Prods. Inc. v. Windsor,

521 U.S. 591, 620 (1997); MANUAL FOR COMPLEX LITIGATION § 21.632 (4th ed. 2004). Federal

Rule of Civil Procedure 23(a) provides that a class may be certified if (i) the class is so numerous

that joinder of all members is impractical, (ii) there are questions of law or fact common to the

class, (iii) the claims or defenses of the representative parties are typical of those of the class, and

(iv) the representative parties will fairly and adequately protect the interests of the class. Fed. R.

Civ. P. 23(a); Williams v. Chartwell Fin. Serv., Ltd., 204 F.3d 748, 760 (7th Cir. 2000).

Once the requirements of Rule 23(a) have been met, the proposed class must then satisfy

at least one of the three subsections of Rule 23(b). Amchem, 521 U.S. at 614. In this case,

Plaintiffs seek certification of the Classes under Rule 23(b)(3), which requires that (i) the

questions of law or fact common to all class members predominate over issues affecting only

individual members, and (ii) the maintenance of a class action be superior to other available

methods for the fair and efficient adjudication of the controversy. Id. at 615; Szabo v. Bridgeport

Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001).

As discussed further below, the proposed Classes meet each of the requirements of Rules

23(a) and (b), and therefore, certification is appropriate.

A. Numerosity — Federal Rule of Civil Procedure 23(a)(1).

Rule 23(a)’s first requirement, numerosity, is satisfied where “the class is so numerous

that joinder of all members is impractical.” Fed. R. Civ. P. 23(a)(1). There is neither a specific

number required to satisfy this requirement, nor is a plaintiff required to state the exact number

of potential class members. Smith v. Nike Retail Servs., Inc., 234 F.R.D. 648, 659 (N.D. Ill.

2006) (“[A] plaintiff need not identify each class member or even provide an exact number of


-19-

class members to satisfy that element.”) (citing Marcial v. Coronet Ins. Co., 880 F.2d 954 (7th

Cir. 1989)); Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS § 7.20, 66 (4th

ed. 2002). Instead, courts are permitted “to make common-sense assumptions that support a

finding of numerosity.” Maxwell v. Arrow Fin. Servs., LLC, No. 03 C 1995, 2004 WL 719278, at

*2 (N.D. Ill. Mar. 31, 2004).

“[A] class can be certified without determination of its size, so long as it’s reasonable to

believe it large enough to make joinder impracticable and thus justify a class action suit.” Arnold

Chapman & Paldo Sign & Display Co. v. Wagener Equities Inc., 747 F.3d 489, 492 (7th Cir.

2014). “Although no magic number exists for satisfying the numerosity requirement, the Seventh

Circuit has held that ‘[e]ven if the class were limited to 40 [members] … that is a sufficiently

large group to satisfy Rule 23(a) where the individual members of the class are widely scattered

and their holdings are generally too small to warrant undertaking individual actions.’” Gehrich,

2016 WL 806549, at *4 (quoting Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326, 1333 n.

9 (7th Cir. 1969)); Pope v. Harvard Banchares, Inc., 240 F.R.D. 383, 387 (N.D. Ill. 2006)

(granting class certification, distinguishing that “impracticable” does not mean “impossible,” but

rather extremely difficult and inconvenient).

The Settlement Agreement comprises three Classes. There are approximately 4.0 million

individuals in the Customer Class, 19,069 individuals in the Sales Advisor Class, and 2,709

individuals in the New Sales Advisor Class. (McLawhorn Decl. ¶12.) Accordingly, the Classes

easily satisfy the numerosity requirement. See NEWBERG ON CLASS ACTIONS § 3:5, 243-46 (4th

ed. 2002) (“Class actions under the amended Rule 23 have frequently involved classes

numbering in the hundreds, or thousands . . . In such cases, the impracticability of bringing all


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class members before the court has been obvious, and the Rule 23(a)(1) requirement has been

easily met.”).

B. Commonality/Predominance —

Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3).

The commonality element requires that “there are questions of law or fact common to the

class.” Fed. R. Civ. P. 23(a)(2). Courts recognize that there may be factual differences between

class members, but “factual variations among class members’ claims” do not themselves “defeat

the certification of a class.” Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th Cir. 1992) (citing

Patterson v. Gen. Motors Corp., 631 F.2d 476, 481 (7th Cir. 1980), cert. denied, 451 U.S. 914

(1980)), cert. denied, 506 U.S. 1051 (1993). In fact, the threshold for commonality is not high.

Scholes v. Stone, McGuire, & Benjamin, 143 F.R.D. 181, 185 (N.D. Ill. 1992) (granting class

certification, characterizing the commonality requirement as “a low hurdle” easily surmounted).

Rather, commonality exists if a common nucleus of operative fact exists, even if as to one

question of law or fact. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011)

(“[C]ommonality requires that the claims of the class simply “depend upon a common contention

. . . of such a nature that it is capable of class-wide resolution – which means that determination

of its truth or falsity will resolve an issue that is central to the validity of each one of the claims

in one stroke.”); Whitten v. ARS Nat’l Servs. Inc., No. 00 C 6080, 2001 WL 1143238, *3 (N.D.

Ill. Sept. 27, 2001) (commonality is often found where “Defendants have engaged in

standardized conduct toward the members of the proposed class”).

The Settlement Classes share common questions of fact and law that predominate over

issues affecting only individual Settlement Class Members. Those common factual and legal

issues include:


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The Customer Class

a. Whether Defendant Act II offered a lifetime replacement guarantee

on its jewelry;

b. Whether Defendant Act II breached the contract of the terms of its

sale with those customers that purchased products with lifetime

replacement guarantees;

c. Whether Defendant Act II continued to sell jewelry with a lifetime

replacement guarantee while planning to close and repudiate the

guarantee; and

d. Whether Plaintiffs Hollander, Ballon, and the Customer Class,

have been injured by Defendants’ conduct, and the proper measure

of their losses as a result of those injuries.

The Sales Advisor Class

a. Whether Defendants sold supplies and jewelry to their Sales

Advisors, and encouraged their Sales Advisors to purchase

supplies and jewelry, while planning to close and subsequently

precluded the Sales Advisors from recouping those expenditures;

b. Whether Defendants actively concealed the fact that they were

closing from their Sales Advisors;

c. Whether Defendants unfairly usurped the customer networks

developed by their Sales Advisors by firing these Sales Advisors

upon closing the business, and then directly soliciting those same

customers; and

d. Whether Plaintiffs West, Esposito, Roman, and the Sales Advisor

Class, have been injured by Defendants’ conduct, and the proper

measure of their losses as a result of those injuries.

The New Sales Advisor Class

a. Whether Defendants sold initial starter kits to New Sales Advisors,

and encouraged New Sales Advisors to purchase initial starter kits,

while planning to close and subsequently precluded the New Sales

Advisors from recouping those expenditures;

b. Whether Defendants actively concealed the fact that they were

closing from the New Sales Advisors; and


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c. Whether Plaintiff Zimmerman and the New Sales Advisor Class

have been injured by Defendants’ conduct, and the proper measure

of their losses as a result of those injuries.

Additionally, Rule 23(b)(3) provides that a class action may be maintained where the

questions of law and fact common to members of the proposed class predominate over any

questions affecting only individual members. Fed. R. Civ. P. 23(b)(3); Fletcher v. ZLB Behring

LLC, 245 F.R.D. 328, 331-32 (N.D. Ill. 2006). “Predominance . . . is a question of efficiency.”

Butler v. Sears, Roebuck & Co., 727 F.3d 796, 800 (7th Cir. 2013). A class action is the more

efficient procedure for determining liability and damages in a case such as this, where “loss, and

the statutory remedy, are the same for all recipients[.]” Ira Holtzman, C.P.A. v. Turza, 728 F.3d

682, 684 (7th Cir. 2013) reh’g denied (Sept. 24, 2013), cert. denied, 134 S. Ct. 1318 (2014).

In this case, common questions predominate for the Settlement Class because

Defendants’ alleged unlawful conduct presents common questions with regard to all proposed

Settlement Class Members. Holtzman, 728 F.3d at 684. Defendants’ alleged unlawful conduct –

its sale of jewelry with lifetime warranties to the Customer Class, and its sale of supplies and

jewelry to the Sales Advisor Class and the New Sales Advisor Class – presents common

questions with regard to Defendants’ intentions with regard to closing down its business.

Defendants’ liability depends on whether Defendants sold the jewelry and supplies despite

knowing that: (a) customers would not be able to utilize the lifetime guarantee; and (b) sales

advisors would not be able to recoup their expenditures. Thus, in the context of the proposed

class-wide settlement, the predominance requirement is satisfied because liability and damages

would have been decided predominantly, if not entirely, based on common evidence of

Defendants’ conduct.


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C. Typicality — Federal Rule of Civil Procedure 23(a)(3).

Rule 23 also requires that a plaintiff’s claims be typical of other class members’ claims.

Fed. R. Civ. P. 23(a)(3). The typicality requirement is closely related to the commonality

requirement and is satisfied if the plaintiff’s claims arise from “the same event or practice or

course of conduct that gives rise to the claims of other class members and . . . are based on the

same legal theory.” Radmanovich v. Combined Ins. Co. of Am., 216 F.R.D. 424, 432 (N.D. Ill.

2003) (internal quotations omitted). The existence of factual differences will not preclude a

finding of typicality. Id. “Typicality does not mean identical, and the typicality requirement is

liberally construed.” In re Neopharm, Inc. Secs. Litig., 225 F.R.D. 563, 566 (N.D. Ill. 2004)

(citation omitted).

Here, Plaintiffs Hollander, Ballon and the Customer Class allege that they purchased

jewelry from Act II that was accompanied by a lifetime guarantee. (Dkt. No. 75, ¶¶95-101)

Plaintiffs Hollander, Ballon, and the Customer Class allege that they were similarly injured by

Act II when Act II later unilaterally revoked the lifetime guarantee. (Id.) Therefore, Plaintiffs

Hollander and Ballon’s claims are typical of those of the Customer Class.

Similarly, Plaintiffs West, Esposito, Roman and the Sales Advisor Class allege that they

worked as Sales Advisors for Act II, and continued to purchase jewelry and supplies from Act II

based on Defendants’ representations and omissions that Act II was doing business as usual and

had no plans to close. (Id. at ¶¶102-121.) Plaintiffs West, Esposito, Roman, and the Sales

Advisor Class were similarly harmed by Defendant Act II when it suddenly ceased operations

and usurped their customer lists. (Id.) Therefore, Plaintiffs West, Esposito, and Roman’s claims

are typical of those of the Sales Advisor Class.


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Finally, Plaintiff Zimmerman and the New Sales Advisor Class allege that they

purchased initial starter kits from Act II based on Defendants’ representations and omissions that

Act II had no plans to close. (Id. at ¶¶122-129.) Plaintiff Zimmerman and the New Sales Advisor

Class were similarly harmed by Defendant Act II when it suddenly ceased operations. (Id.)

Therefore, Plaintiff Zimmerman’s claims are typical of those of the New Sales Advisor Class.

Accordingly, the claims of each Class Representative is typical of the Class she seeks to

represent. Moreover, there are no defenses that pertain to Plaintiffs that would not also pertain to

their respective Settlement Classes. Accordingly, Plaintiffs’ claims are typical of the other Class

members’ claims.

D. Adequacy of Representation — Federal Rule of Civil Procedure 23(a)(4).

The final Rule 23(a) prerequisite requires that a proposed class representative “fairly and

adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). To satisfy the adequacy

requirement, class representatives must establish that: (1) their claims are not in conflict with

those of the proposed class; (2) they have sufficient interests in the outcome of the case; and (3)

they are represented by experienced, competent counsel. Hinman v. M & M Rental Ctr., Inc., 545

F. Supp. 2d 802, 807 (N.D. Ill. 2008). Furthermore, proposed class counsel must be competent

and have the resources necessary to sustain the complex litigation necessitated by class claims; it

is persuasive evidence that proposed class counsel have been found adequate in prior cases.

Gomez v. Ill. State Bd. of Educ., 117 F.R.D. 394, 401 (N.D. Ill. 1987) (finding class counsel was

adequate and stating if “attorneys have been found to be adequate in the past, it is persuasive

evidence that they will be adequate again.”).

Here, Plaintiffs’ interests are consonant with the interests of the Settlement Classes—

obtaining relief from Defendants for their alleged unlawful conduct in revoking the lifetime


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guarantees on their products and suddenly shutting down operations precluding sales advisors

from recouping their expenditures. Plaintiffs have no interests antagonistic to the interests of the

other Settlement Class Members. (McLawhorn Decl. ¶16.) Moreover, Plaintiffs’ counsel are well

respected members of the legal community, have regularly engaged in major complex litigation,

and have significant experience in consumer class actions involving similar issues, scope, and

complexity. (Id. ¶15; Siprut Firm Resume (attached as Exhibit A to the McLawhorn Decl.).)

Accordingly, Plaintiffs and their counsel would adequately represent the proposed Class.

E. Superiority — Federal Rule of Civil Procedure 23(b)(3).

In addition to satisfying Rule 23(a), a plaintiff seeking certification must satisfy one of

the provisions of Rule 23(b). Rule 23(b)(3) provides that matters pertinent to a finding of

superiority include: “(A) the interest of members of the class in individually controlling the

prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning

the controversy already commenced by or against members of the class; (C) the desirability or

undesirability of concentrating the litigation of the claims in the particular forum; and (D) the

difficulties likely to be encountered in the management of a class action.” Fed. R. Civ. P.

23(b)(3). When settling a class action, Plaintiffs do not have to prove manageability under Rule

23(b)(3) as if the case were being fully litigated because settlement may “eliminate all the thorny

issues that the court would have to resolve if the parties fought out the case.” Carnegie v.

Household Int’l, Inc., 376 F.3d 656, 660 (7th Cir. 2004) (citing Amchem, 521 U.S. at 620).

The burden and expense of individual prosecution of the litigation necessitated by

Defendants’ actions makes a class action superior to other available methods of resolution.

Absent a class action, it would be difficult, if not impossible, for individual members of the Class

to obtain effective relief. See Mullins v. Direct Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015)


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(“[I]n cases involving relatively low-cost goods or services . . . the class device is often essential

‘to overcome the problem that small recoveries do not provide the incentive for any individual to

bring a solo action prosecuting his or her rights.’”) (quoting Amchem, 521 U.S. at 617).

III. The Form and Method of Service of Class Notice should be Approved.

“When the parties reach a settlement agreement before a class determination and seek to

stipulate that the settlement will have class wide scope, a class notice must be sent to provide

absent class members with certain basic information so that they have an opportunity to consider

the terms of the settlement.” NEWBERG ON CLASS ACTIONS, § 11:30, p. 11-62-11-63 (4th ed.

2002). The substance of the notice must describe, in plain language, the nature of the action, the

definition of the certified class, and the class claims and defenses at issue. See Fed. R. Civ. P.

23(c)(2)(B). The notice must also explain that class members may enter an appearance through

counsel if desired, may request to be excluded from the class, and that a class judgment shall

have a binding effect on all class members. Id. Additionally, dissemination of the notice must

comport with both Rule 23 and due process, which require that a class receive “the best notice

practicable under the circumstances, including individual notice to all members who can be

identified through reasonable effort.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974).

The proposed notice plan in this case satisfies Rule 23’s notice requirements as well as due

process considerations, and provides:

a. A brief summary of the claims alleged in the action;

b. An explanation of the proposed terms of the Settlement, the amount the

Settlement Class members are entitled to receive under the Settlement

Agreement, and the method by which Settlement Class members can

claim their Settlement benefit;


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c. An explanation of the right to opt out of and/or object to the Settlement

within given time-frames and subject to certain requirements;

d. An explanation that members of the Settlement Class who do not opt out

will be bound by the proposed Settlement and judgment and will have

released their claims;

e. An explanation that members of the Settlement Class who do not opt out

will be represented by proposed Class Counsel; and

f. An identification of Class Counsel and a means for making inquiries

thereof.

Federal courts authorize service of class notice by a variety of reliable means. In this

regard, “[t]here is no statutory or due process requirement that all class members receive actual

notice by mail or other means; rather, ‘individual notice must be provided to those Class

members who are identifiable through reasonable effort.’” Eisen, 417 U.S. at 175-76.

In this case, the Settlement provides for direct notice via electronic mail and U.S. Mail, as

well as via publication through social media, internet banners, and a press release, and a detailed

settlement website. These notice procedures were determined and agreed to during settlement

negotiations, after the Settlement Administrator analyzed Defendants’ records and determined

the best practical means of effecting notice on the Classes. (McLawhorn Decl. ¶11.)

Courts in this District routinely find the methods of notice proposed in this case to be

reasonably calculated to reach class members by the best means practicable. See In re AT & T

Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. at 351-53 (granting approval of notice

plan that consisted of notice on class members’ monthly bill, via text message, electronic mail,

and U.S. mail, and via print publication); In re AT & T Mobility Wireless Data Servs. Sales Tax


-28-

Litig., 789 F. Supp. 2d 935, 968 (N.D. Ill. 2011) (same); In re Nat’l Collegiate Athletic Ass.

Student-Athlete Concussion Injury Litig., 314 F.R.D. 580, 603 (N.D. Ill. 2016) (granting

approval of notice plan that consisted of both direct and publication notice); In re Dairy Farmers

of Am., Inc. Cheese Antitrust Litig., No. 09-cv-03690, 2014 WL 1017515, at *2 (N.D. Ill. Mar.

17, 2014) (granting approval of notice plan that consisted of mail notice and publication notice);

Hedges v. Earth Inc., No. 14-cv-9858, 2015 WL 10853985, at *2 (N.D. Ill. Oct. 14, 2015)

(same); In re Capital One Tel. Consumer Protection Act Litig., 80 F. Supp. 3d 781, 786 (N.D. Ill.

2015) (granting approval of notice plan that consisted of mail, e-mail, and internet publication

notice); Shestopal v. Follett Higher Education Grp., Inc., No. 15-cv-8980, Dkt. No. 54 (N.D. Ill.

Nov. 17, 2016) (granting approval of notice plan that consisted of mail, e-mail, print and internet

publication notice); see also A & L Indus., Inc. v. P. Cipollini, Inc., No. 12-7598, 2014 WL

906180, at *1 (D.N.J. Mar. 7, 2014) (rejecting arguments that notice had to be served in

accordance with Rule 5(b); “Rule 23(c) should supersede because Rule 23(c) addresses class

notice specifically, whereas Rule 5 addresses service generally.”). Accordingly, this notice plan

should be approved.

IV. The Court should Schedule a Hearing for Final Settlement Approval.

Following notice to the Class, a Fairness Hearing is to be held on the proposed

Settlement. MANUAL FOR COMPLEX LITIGATION § 21.633. Accordingly, Plaintiffs, by proposed

Class Counsel, respectfully request that the Court schedule a hearing on final approval of the

Settlement to be held no earlier than 180 days after entry of the Preliminary Approval Order. The

hearing on the final settlement approval should be scheduled now so that the date can be

disclosed in the class notice. After receiving final approval, the Parties request that the Court

enter a final order approving the Settlement.


-29-

CONCLUSION

Based upon the foregoing, and because the proposed Settlement is fair, reasonable, and

advantageous to the proposed Class, Plaintiffs respectfully request that the Court enter an Order:

A. Preliminarily approving the Settlement as being fair, reasonable, and

adequate;

B. Preliminarily approving the form, manner, and content of the Class

Notice;

C. Setting the date and time of the Final Approval Hearing to be held no

earlier than 180 days after entry of the Preliminary Approval Order;

D. Provisionally certifying the proposed Classes under Rule 23 of the Federal

Rules of Civil Procedure for settlement purposes only;

E. Appointing Plaintiffs as Class Representatives;

F. Appointing Joseph J. Siprut, Todd L. McLawhorn, and Siprut PC as Class

Counsel; and

G. Such other and further relief the Court deems just and proper.

Dated: November 21, 2017 Respectfully submitted,

By: s/ Todd L. McLawhorn

Joseph J. Siprut

[email protected]

Todd L. McLawhorn

[email protected]

Ke Liu

[email protected]

SIPRUT PC

17 N. State Street

Suite 1600


Phone: 312.236.0000

Fax: 312.878.1342

Counsel for Plaintiffs and

the Proposed Settlement Classes


CERTIFICATE OF SERVICE

The undersigned, an attorney, hereby certifies that a true and correct copy of the

foregoing Plaintiffs’ Memorandum In Support Of Motion For Preliminary Approval Of

Class Action Settlement was filed this 21st day of November 2017 via the electronic filing

system of the United States District Court for the Northern District of Illinois, which will

automatically serve all counsel of record.

s/ Todd L. McLawhorn


Exhibit 1

Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 1 of 77 PageID #:791


FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

CYNTHIA WEST, KRISTINE HOLLANDER, JENNIFER ZIMMERMAN, MARY ROMAN, MARIE ESPOSITO, and MICHELLE BALLON, individually and on behalf of all others similarly situated, Plaintiffs, v. ACT II JEWELRY, LLC, a Delaware limited liability corporation d/b/a lia sophia, and VICTOR K. KIAM, III, Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Case No. 1:15-cv-05569


SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (“Agreement) is entered into between and

among the following parties (the “Parties”), by and through their respective counsel: (a)

Plaintiffs Cynthia West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie Esposito,

and Michelle Ballon as Class Representatives on behalf of themselves and as representatives of

the respective Settlement Classes (as hereinafter defined) (collectively “Plaintiffs”) and (b)

Defendants Act II Jewelry, LLC f/k/a lia sophia (“Act II”) and Victor K. Kiam, III (“Victor

Kiam”) (collectively “Defendants”). This Agreement is intended by the Parties to fully, finally

and forever resolve, discharge and settle all the claims specified below, subject to approval by

the Court and the settlement terms set forth below. Capitalized terms have the meaning ascribed

to them in Section II of this Agreement.


Page 2 of 37

I. RECITALS.

A. On June 23, 2015, Plaintiffs West and Hollander filed a putative class action

complaint against Act II, Kiam Equities Corporation, Victor Kiam, and Elena Kiam in the United

States District Court for the Northern District of Illinois, No. 1:15-cv-05569, alleging claims for

breach of contract, violation of the Illinois Consumer Fraud and Deceptive Practices Act

(“ICFA”), fraud and unjust enrichment. Plaintiffs West and Hollander sought to represent two

classes: (1) all purchasers of Act II’s jewelry; and (2) all individuals who sold jewelry for Act II.

B. On October 19, 2015, the Parties held a mediation with Retired District Judge

James F. Holderman in Chicago, Illinois. Prior to the mediation, the Parties engaged in limited

discovery and exchanged written mediation statements summarizing their respective positions

concerning the factual and legal issues in the Litigation. The mediation did not result in

settlement.

C. Act II denied all liability and moved to dismiss the complaint in part on multiple

grounds. Kiam Equities Corporation, Victor Kiam, and Elena Kiam also denied all liability and

moved to dismiss the claims against them in full. After full briefing before the Court, on March

18, 2016, the Court denied Act II’s motion but granted the remaining Defendants’ motion,

dismissing Kiam Equities Corporation, Victor Kiam, and Elena Kiam from the Litigation.

D. Between April 2016 and April 2017, the Parties engaged in multiple rounds of

written and electronic discovery regarding the claims and defenses in the Litigation, including:

(i) the review of approximately 12,267 pages of documents produced by Plaintiffs; (ii) the

review of approximately 20,111 pages of documents produced by Act II; (iii) the review of

approximately 345 pages produced by Victor Kiam; (iv) the review of approximately 6 pages

produced by Kiam Equities Corporation; (v) the review of approximately 203 pages produced by


Page 3 of 37

Elena Kiam; (vi) the review of approximately 963 pages of documents produced by additional

third-party witnesses in addition to computer media provided by those third parties; (vii) the

preparation for taking and/or defending the depositions of approximately ten fact witnesses from

Act II and various third-parties; and (viii) the preparation for taking and/or defending the

depositions of the six Class Representatives.

E. In the meantime, while discovery was ongoing, on November 30, 2016, Plaintiffs

filed the First Amended Class Action Complaint against Act II and Victor Kiam, alleging claims

for breach of contract, violation of the ICFA, fraud and unjust enrichment. Plaintiffs West and

Hollander were joined by Plaintiffs Ballon, Esposito, Roman and Zimmerman. Plaintiffs sought

to represent three classes: (1) all purchasers of Act II jewelry; (2) all individuals who sold

jewelry for Act II; and (3) all individuals who joined Act II as sales advisors on or after May 31,

2014. Defendants denied all liability and filed an answer on December 20, 2016.

F. Following the filing of the First Amended Complaint, the Parties continued to

engage in discovery, and the Defendants took the depositions of three of the Class

Representatives in the spring of 2017. Following those depositions, the parties resumed

settlement discussions and engaged in extensive mediation and settlement discussions over the

course of approximately four months, including two separate mediations administered by Jill

Sperber of Sperber Dispute Resolution (based in California) and an additional mediation session

conducted by Judge Holderman.

G. As a result of those continued discussions and mediations, culminating with the

mediation before Judge Holderman on July 17, 2017, the Parties agreed to a settlement in

principle that would resolve all claims asserted in the Litigation. The parties subsequently

exchanged drafts of a Settlement Term Sheet, and executed same on August 1, 2017.


Page 4 of 37

H. Class Counsel has concluded, after extensive discovery and investigation of the

facts relating to the Litigation, including third-party discovery, and consideration of Defendants’

legal and factual defenses, that it is in the best interests of the Class Representatives and the

Settlement Classes to enter into the Agreement to avoid the uncertainties, burdens and risk of

litigation, and to obtain the substantial benefits provided by the Agreement. Further, Class

Counsel has concluded that the Agreement is fair, reasonable, adequate and in the best interests

of all putative members of the Settlement Classes.

I. Defendants deny and continue to deny any wrongdoing and damages, and further

deny that the Litigation may be maintained as a class action except for settlement purposes.

Nonetheless, without admitting or conceding liability or damages, Defendants have agreed to

settle the Litigation on the terms and conditions set forth in this Agreement to avoid the

substantial expense, burden, and disruption of continued litigation and to avoid the risks and

uncertainty inherent in any litigation.

J. The Parties desire to compromise and settle the Released Claims with prejudice.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and

promises set forth below, and subject to the preliminary and final approval of the Court pursuant

to Fed. R. Civ. P. 23(e), the Parties agree as follows:

II. DEFINITIONS.

A. “Agreement” or “Settlement Agreement” means this Settlement Agreement and

Release, including all exhibits hereto.

B. “Attorneys’ Fee Award” means the total award of attorneys’ fees, costs and

expenses sought by Class Counsel and/or allowed by the Court.


Page 5 of 37

C. “CAFA Notice” means the notice of this Settlement to be served upon State and

Federal authorities as required by the Class Action Fairness Act of 2005, 28 U.S.C. § 1715.

D. “Cash Award” means the payment to each Class Member who submits a Valid

Claim.

E. “Claim Deadline” means the date by which all Claim Forms must be postmarked

or received to be considered timely and shall be set as a date no later than ninety (90) days after

the Notice Date. The Claim Deadline shall be clearly set forth in the Preliminary Approval Order

as well as in the Notice and the Claim Form.

F. “Claim Form” means a document in the form of Exhibit A attached hereto, as

approved by the Court, to be submitted by Settlement Class Members in order to receive a Cash

Award.

G. “Class Fund” means the Net Settlement Fund less the amounts paid for the

Attorneys’ Fee Award and the Incentive Awards.

H. “Class Counsel” means Joseph J. Siprut and Todd L. McLawhorn of Siprut PC.

I. “Class Representatives” means Cynthia West, Kristine Hollander, Jennifer

Zimmerman, Mary Roman, Marie Esposito and Michelle Ballon.

J. “Court” means the United States District Court for the Northern District of

Illinois.

K. “Customer Class” is defined in Section III.

L. “Customer Class Member” means those persons that fall within the definition of

the Customer Class who have not submitted a valid Opt-Out request.

M. “Defense Counsel” means Eric L. Samore, Albert M. Bower, and Ronald D.

Balfour of SmithAmundsen, LLC.


Page 6 of 37

N. “Effective Date” means the date defined in Section XII.

O. “Fairness Hearing” means the hearing to be conducted by the Court under Fed. R.

Civ. P. 23(e) to consider the fairness, reasonableness and adequacy of this Agreement.

P. “Final Order and Judgment” means the Order entered by the Court granting the

Motion for Final Approval of the Settlement and entering judgment.

Q. “Incentive Award” means the amount awarded, if any, to the individual Class

Representatives.

R. “Litigation” means the action captioned West v. Act II Jewelry, LLC, No. 1:15-cv-

05569 (N.D. Ill.).

S. “Net Settlement Fund” means the Settlement Fund less the amounts paid for

Settlement Administration Expenses.

T. “New Sales Advisor Class” is defined in Section III.

U. “New Sales Advisor Class Member” means those persons that fall within the

definition of the New Sales Advisor Class who have not submitted a valid Opt-Out request.

V. “Notice” means the notice of this proposed Settlement Agreement and Final

Approval Hearing, which is to be sent to the Settlement Class substantially in the manner set

forth in this Agreement and is consistent with the requirements of Due Process and Federal Rule

of Civil Procedure 23.

W. “Notice Date” means the first day on which the Settlement Administrator begins

disseminating the Notice.

X. “Notice Plan” means the plan for notifying Settlement Class Members of the

Settlement.


Page 7 of 37

Y. “Opt-Out” means a member of the Settlement Class who properly and timely

submits a request for exclusion from the Settlement in accordance with the Preliminary Approval

Order.

Z. “Opt-Out List” means the list compiled by the Settlement Administrator

identifying those who properly and timely submit a request for exclusion and become Opt-Outs.

AA. “Opt-Out and Objection Deadline” means, respectively, the dates, to be set by the

Court, by which a request for exclusion must be filed with the Settlement Administrator in order

for a Settlement Class Member to be excluded from the Settlement Class, and the date by which

Settlement Class Members must file objections, if any, to the Settlement.

BB. “Parties” means the Plaintiffs and the Settlement Class on the one hand, and

Defendants, on the other hand.

CC. “Person” means without limitation, any individual, corporation, partnership,

limited partnership, limited liability company, association, joint stock company, estate, legal

representative, trust, unincorporated association, government or any political subdivision or

agency thereof, and any business or legal entity and their spouses, heirs, predecessors,

successors, representatives, or assigns. The definition of “Person” is not intended to include any

governmental agencies or governmental actors, including, without limitation, any state Attorney

General’s office.

DD. “Plaintiffs” means the Class Representatives and the Settlement Class.

EE. “Preliminary Approval Date” means the date the Preliminary Approval Order is

entered by the Court.

FF. “Preliminary Approval Order” means the proposed order preliminarily approving

the Settlement Agreement and directing notice thereof to the Settlement Class, to be submitted to


Page 8 of 37

the Court in conjunction with Plaintiffs’ motion for preliminary approval of the Settlement

Agreement. The Preliminary Approval Order shall be in form and substance the same as

attached as Exhibit G.

GG. “Release” means the release and discharge, as of the Effective Date, by the Class

Representatives and all Settlement Class Members (and their respective successors, assigns and

insurers) of the Released Persons of and from all Released Claims and shall include the

agreement and commitment by the Class Representatives and all Settlement Class Members (and

their respective successors, assigns and insurers) to not now or hereafter initiate, maintain or

assert against the Released Persons or any of them any and all causes of action, claims, rights,

demands, actions, claims for damages, equitable, legal or administrative relief, interest, demands

or rights, including without limitation, claims for damages of any kind, including those in excess

of actual damages, whether based on federal, state or local law, statute, ordinance, regulation,

contract, common law or any other sources that have been, could have been, may be or could be

alleged or asserted now or in the future by the Class Representatives or any Settlement Class

Members (and their respective successors, assigns and insurers) against the Released Persons or

any of them in this Litigation or in any other court action or before any administrative body

(including any regulatory entity or organization), tribunal, arbitration panel or other adjudicating

body arising out of or related to the Released Claims, with the exception of any claims by the

Class Representatives or Settlement Class Members in connection with their work for

Adornable.U, or the contemplation of working for Adornable.U.

HH. “Released Claims” means any and all claims, actions, causes of action, rights,

demands, suits, debts, liens, contracts, agreements, offsets or liabilities, including but not limited

to tort claims, negligence claims, claims for breach of contract, breach of the duty of good faith


Page 9 of 37

and fair dealing, breach of statutory duties, actual or constructive fraud, misrepresentations,

fraudulent inducement, statutory and consumer fraud, breach of fiduciary duty, unfair business or

trade practices, false advertising, restitution, rescission, and any other claims, whether known or

unknown, whether asserted or unasserted in the Litigation, which the Class Representatives or

any Settlement Class Member had, now have or may in the future have with respect to any

conduct, acts, omissions, facts, matters, transactions or oral or written statements or occurrences

on or prior to the date of this Agreement arising from or relating to Act II’s business or the

operation thereof, including the sale of merchandise, the replacement or non-replacement of

jewelry, the use of customer information, and the enrollment of Sales Advisors, with the

exception that “Released Claims” does not include any claims by the Class Representatives or

Settlement Class Members, either on an individual or class basis, in connection with their work

for Adornable.U, or the contemplation of working for Adornable.U.

II. “Released Persons” means Act II Jewelry, LLC, Victor K. Kiam, III, Elena Kiam,

Kiam Equities Corporation, and their parents, subsidiaries, affiliates, controlled companies,

officers, directors, managers, shareholders, members, partners, owners, employees, predecessors,

successors, assigns, agents, insurers, and attorneys. For avoidance of doubt, “Released Persons”

includes Mackinac Partners, Keith Maib, and Matthew Beresh in their individual capacities and

as officers of Act II Jewelry, LLC.

JJ. “Releasing Persons” means the Class Representatives on behalf of themselves and

all Settlement Class Members, each Settlement Class Member, and the respective heirs,

administrators, representatives, attorneys, agents, partners, successors, insurers and assigns of

each Class Representative and Settlement Class Member.

KK. “Sales Advisor Class” is defined in Section III.


Page 10 of 37

LL. “Sales Advisor Class Member” means those persons that fall within the definition

of the Sales Advisor Class who have not submitted a valid Opt-Out request.

MM. “Settlement” means the settlement contemplated by this Settlement Agreement.

NN. “Settlement Administration Expenses” means the expenses incurred by the

Settlement Administrator in providing Notice and processing Claim Forms.

OO. “Settlement Administrator” means the independent professional service company

selected by the Parties to oversee the distribution of Notice as well as the processing and

payment of claims to Settlement Class Members as set forth in the Settlement Agreement. The

Parties have agreed that Heffler Claims Group will serve as Settlement Administrator, subject to

the Court’s approval.

PP. “Settlement Class” or “Settlement Classes” means all Persons who fall within any

of the Customer Class, Sales Advisor Class, or New Sales Advisor Class.

QQ. “Settlement Class Member” means those persons that fall within the definition of

the Customer Class, Sales Advisor Class, and/or New Sales Advisor Class, who have not

submitted a valid Opt-Out request.

RR. “Settlement Fund” means a non-reversionary common fund of $6.7 million

established by Defendants to pay all expenses relating to the Settlement, including: (a) Cash

Awards; (b) Settlement Administration Expenses; (c) the Attorneys’ Fee Award; and (d)

Incentive Awards.

SS. “Settlement Website” means the website administered by the Settlement

Administrator on which Settlement Class Members may submit Claim Forms and review

information about the Settlement, including this Agreement, the First Amended Complaint,

Defendants’ Answer, the Notice and the Claim Form.


Page 11 of 37

TT. “Unknown Claims” means claims that could have been raised in the Litigation

and that the Class Members or any or all other Persons and entities whose claims are being

released, or any of them, do not know or suspect to exist, which, if known by him, her or it,

might affect his, her or its agreement to release the Released Parties or the Released Claims or

might affect his, her or its decision to agree, object or not to object to the Settlement. Upon the

Effective Date, Class Members and all other Persons and entities whose claims are being

released shall be deemed to have, and shall have, expressly waived and relinquished, to the

fullest extent permitted by law, the provisions, rights and benefits of § 1542 of the California

Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS 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. Upon the Effective Date, Class Members and all other Persons and entities whose claims

are being released, also shall be deemed to have, and shall have, waived any and all provisions,

rights and benefits conferred by any law of any state or territory of the United States, or principle

of common law, or the law of any jurisdiction outside of the United States, which is similar,

comparable or equivalent to § 1542 of the California Civil Code. Class Members acknowledge

that they may discover facts in addition to or different from those that they now know or believe

to be true with respect to the subject matter of this release, but that it is their intention to finally

and forever to settle and release the Released Claims, notwithstanding any Unknown Claims they

may have, as that term is defined in this Paragraph.


Page 12 of 37

UU. “Valid Claim” means a claim submitted by a Settlement Class Member that is (a)

submitted timely and in accordance with the directions on the Claim Form, (b) fully completed

and (c) signed by the Settlement Class Member.

III. PRELIMINARY CERTIFICATION OF SETTLEMENT CLASSES.

A. Pursuant to Fed. R. Civ. P. 23(b)(3), the Parties stipulate to certification, for

settlement purposes only, of the following three Settlement Classes:

1. All individuals who purchased jewelry from Act II Jewelry, LLC between

June 23, 2011 and December 1, 2014 (“Customer Class”). The Customer Class is

estimated to contain approximately 4 million individuals.

2. All individuals who sold at least $250 of jewelry for Act II between

January 1, 2014, and August 17, 2014 (“Sales Advisor Class”). The Sales Advisor Class

is estimated to contain approximately 19,069 individuals.

3. All individuals who purchased initial starter kits from Act II between

August 1, 2014 and December 1, 2014 (“New Sales Advisor Class”). The New Sales

Advisor Class is estimated to contain approximately 2,709 individuals.

Specifically excluded from the Customer Class, Sales Advisor Class, and New Sales

Advisor Class are the following persons: (a) Defendants and their respective affiliates, (b)

Class Counsel and their immediate family members; and (c) the judges who have presided

over this Litigation and their immediate family members.

B. The Parties agree that some individuals may be members of more than one

Settlement Class. Such individuals may obtain the relief available for each class of which they

are members.


Page 13 of 37

C. Solely for the purpose of implementing this Settlement Agreement and

effectuating the Settlement, the Parties stipulate to the Court entering an order preliminarily

certifying the Customer Class, Sales Advisor Class, and New Sales Advisor Class, appointing

Plaintiffs as representatives of the respective Classes, and appointing the following as Class

Counsel:

Joseph J. Siprut [email protected] Todd L. McLawhorn [email protected] SIPRUT PC 17 North State Street, Suite 1600 Chicago, Illinois 60602 Phone: 312.236.0000 Fax: 312.878.1342

D. Solely for purposes of implementing the Settlement Agreement, the Parties

stipulate to the Court entering an order preliminarily finding that Plaintiffs and Class Counsel are

adequate representatives of the Settlement Class.

E. In the event that the Settlement Agreement is terminated pursuant to its terms or is

not granted final approval by the Court, or such approval is reversed, vacated, or modified in any

material respect by the Court or by any other court, the certification of the Settlement Class shall

be deemed vacated and the Litigation shall proceed as if the Settlement Class had not been

certified, and the Defendants reserve all rights to challenge certification of any class for trial

purposes.

IV. BENEFITS TO SETTLEMENT CLASS MEMBERS.

A. Pursuant to the terms and conditions set forth below, Defendants agree to pay a

Settlement Fund of $6.7 million, which will be used to pay all Settlement costs, including


Page 14 of 37

without limitation Cash Awards, Settlement Administration Expenses, Attorneys’ Fee Award

and Incentive Awards. Defendants need not segregate funds or otherwise create special accounts

to hold the Settlement Fund and will not relinquish control of any money until payments are due.

Defendants’ and their insurers’ maximum liability pursuant to this Settlement shall be the

amount of the Settlement Fund.

B. The Settlement Fund shall be allocated as follows:

1. Settlement Administration Expenses. The amount of $1.3 million will be

allocated from the Settlement Fund to Settlement Administration Expenses

incurred by the Settlement Claims Administrator, Heffler Claims Group.

2. Net Settlement Fund. The amount remaining ($5.4 million) after deducting

the Settlement Administration Expenses from the Settlement Fund shall be

the Net Settlement Fund.

3. Attorneys’ Fee Award and Incentive Awards. Class Counsel will seek a

one-third Attorneys’ Fee Award from the Net Settlement Fund. Class

Counsel will also seek Incentive Awards for the Class Representatives

from the Net Settlement Fund.

4. Class Fund. The amount remaining from the Net Settlement Fund after

deducting the Attorneys’ Fee Award and the Incentive Awards shall be the

Class Fund.

5. The Class Fund will be paid to the Settlement Class, as follows:

a. Customer Class. Fifty-seven percent (57%) of the Class Fund will

be allocated to the Customer Class. Each Customer Class Member

who submits a Valid Claim form shall receive a share of the


Page 15 of 37

amount allocated to the Customer Class based on the total dollar

value of their purchases between June 23, 2011, and December 1,

2014, as reflected in Act II’s records. Each Customer Class

Member who submits a Valid Claim and purchased less than $100

in jewelry from Act II between June 23, 2011, and December 1,

2014 will be deemed to be in “Tier One” of the Customer Class

and will receive the same amount as each other member of Tier

One; each Customer Class Member who submits a Valid Claim

and purchased $100-$299.99 in jewelry from Act II between June

23, 2011, and December 1, 2014 will be deemed to be in “Tier

Two” of the Customer Class and will receive double the amount

received by each member of Tier One; each Customer Class

Member who submits a Valid Claim and purchased $300 or more

in jewelry from Act II between June 23, 2011, and December 1,

2014 will be deemed to be in “Tier Three” of the Customer Class

and will receive triple the amount received by each member of Tier

One. The amount received by each Customer Class Member will

be dependent upon how many Valid Claims are submitted, and the

entire amount allocated to the Customer Class will be distributed to

the Customer Class.

b. Sales Advisor Class. Thirty-eight percent (38%) of the Class Fund

will be allocated to the Sales Advisor Class. Each Sales Advisor

who submits a Valid Claim shall receive a share of the amount


Page 16 of 37

allocated to the Sales Advisor Class based on the amount of sales

made by that Sales Advisor between January 1, 2014 and August

17, 2014 as reflected in Act II’s records, i.e., those Sales Advisors

who submit a Valid Claim will receive an amount in proportion to

the dollar value of their sales during that time period. The entire

amount allocated to the Sales Advisor Class will be distributed to

the Sales Advisor Class.

c. New Sales Advisor Class. Five percent (5%) of the Class Fund will

be allocated to the New Sales Advisor Class. Each New Sales

Advisor Class Member who submits a Valid Claim shall receive

the amount paid by that New Sales Advisor for her initial starter

kit, which ranged from $99 to $149. In the event the number of

Valid Claims for New Sales Advisors exhausts the amount

allocated to the New Sales Advisor Class, each New Sales Advisor

who submits a Valid Claim will have his or her Cash Award

reduced proportionally so that the total amount of Cash Awards

paid to New Sales Advisors will not exceed five percent (5%) of

the Class Fund. In the event that there is money remaining for the

New Sales Advisor Class after the payment of Cash Awards to all

New Sales Advisors who submit Valid Claims, the remainder shall

be added back to the Class Fund and distributed to the Customer

Class and Sales Advisor Class in the same proportion as funds

distributed per the preceding two paragraphs.


Page 17 of 37

C. Tax Withholding. Within fourteen (14) days after the Effective Date, or such other

date the Court may set, the Settlement Administrator shall send to each Class Member who

submitted a Valid Claim a W-9, if the Cash Award to that Class Member exceeds $599. If the

Class Member does not postmark a valid W-9 to the Settlement Administrator within thirty (30)

days, the Settlement Administrator shall take any action necessary to comply with the rules and

regulations of the Internal Revenue Service, including, but not limited to, deducting from the

Cash Award a tax withholding.

D. Issuance Of Checks. Within sixty (60) days after the Effective Date, or such other

date as the Court may set, the Settlement Administrator shall pay from the Settlement Fund all

Valid Claims by check and mail them to the claimants via first-class mail. All payments issued to

Settlement Class Members via check will state on the face of the check that the check will expire

and become null and void unless cashed within ninety (90) days after the date of issuance. To the

extent that a check issued to a Settlement Class Member is not cashed within ninety (90) days

after the date of issuance, the check will be void. Fourteen (14) days before the date on which the

checks become void, the Settlement Administrator may contact Settlement Class Members who

have not cashed their checks in order to urge them to do so and, if requested by the Settlement

Class Member, may issue a new check.

E. Cy Pres. Sixty (60) days after the final date to cash a check, the Settlement

Administrator shall report to the Parties the number of uncashed checks and their total value.

Subject to Court approval, if there are any uncashed checks, such funds will be awarded to a cy

pres recipient selected by Class Counsel in consultation with Defense Counsel.


Page 18 of 37

V. RELEASES. A. The obligations incurred pursuant to this Settlement Agreement shall be a full and

final disposition of the Action and any and all Released Claims and Unknown Claims, as against

all Released Parties for the Settlement Class.

B. Upon the Effective Date, the Releasing Parties, and each of them, shall be deemed

to have, and by operation of the Final Approval Order shall have, fully, finally, and forever

released, relinquished and discharged all Released Claims and Unknown Claims against the

Released Parties, and each of them.

VI. NOTICE TO THE CLASS. A. Upon issuance of Preliminary Approval of this Agreement, the Settlement

Administrator shall disseminate Notice to the Settlement Classes. Such Notice shall comport

with due process and be effectuated pursuant to a Notice Plan. All Settlement Administration

Expenses shall be paid from the Settlement Fund.

B. The following is the Notice Plan contemplated by the Parties and the Settlement

Administrator, subject to approval by the Court.

1. Direct Notice Via Email. For all Settlement Class Members for whom the

Settlement Administrator is able to determine an email address based on transaction

records provided by Act II, direct notice shall be made by email in the first instance, in

the form of Exhibit B.

2. Direct Notice Via U.S. Mail. For all Settlement Class Members for whom

the Settlement Administrator is unable to determine an email address, and for all

Settlement Class Members for whom email notice is sent that is returned, notice shall be


Page 19 of 37

by direct mail, in the form of Exhibit C, provided that the Settlement Administrator is

able to determine a valid mailing address for those individuals based on transaction

records provided by Act II. For those Settlement Class Members without any valid email

or mailing address that the Settlement Administrator can determine from the transaction

records provided by Act II, the notice described in subsubsections 3 through 5 below

shall be deemed sufficient.

3. Notice Via Settlement Website. The Settlement Administrator will create a

Settlement Website where Notice, in the form of Exhibit D, shall be posted and on which

Settlement Class Members may submit claims.

4. Notice Via Social Media. Defendants shall post notice of the Settlement on

the lia sophia outlet and lia sophia Facebook pages, in the form of Exhibit E.

5. Notice Via Publication. The Settlement Administrator shall create a

publication notice plan designed to reach a reasonable portion of Settlement Class

Members. A description of the process to be used by the Settlement Administrator is

attached as Exhibit F.

6. Toll-Free Phone Line. Within thirty (30) days after Preliminary Approval,

the Settlement Administrator shall establish a phone line with touch-tone and interactive

voice responses for individuals to learn more about the Settlement.

7. CAFA Notice. Pursuant to 28 U.S.C. § 1715, not later than ten (10) days

after the Agreement is filed with the Court, Defendants shall serve upon the Attorneys

General of each U.S. State in which there are members of the Class, the Attorney General

of the United States, and other required government officials, notice of the proposed

settlement, which shall include: (1) a copy of the most recent complaint and all materials


Page 20 of 37

filed with the complaint or notice of how to electronically access such materials; (2)

notice of all scheduled judicial hearings in the Action; (3) all proposed forms of Notice to

the Settlement Class; and (4) a copy of this Agreement. To the extent known, the

Defendants shall serve upon the above-referenced government official the names of Class

Members who reside in each respective state and the share of the claims of such members

to the entire settlement, or if not feasible, a reasonable estimate of the number of Class

Members residing in each state and the estimated proportionate share of the claims of

such members to the entire Agreement. The costs of conducting CAFA Notice shall not

be deducted from the Settlement Fund. Defendants are responsible for paying the costs of

CAFA Notice separate and apart from the Settlement Fund.

C. The Notice shall advise the Settlement Class of their rights, including the right to

be excluded from, comment upon, and/or object to the Settlement Agreement or its terms. The

Notice shall specify that any objection to this Settlement Agreement, and any papers submitted

in support of said objection, shall be received by the Court at the Final Approval Hearing, only

if, on or before the Opt-Out And Objection Deadline approved by the Court and specified in the

Notice, the Person making an objection shall file notice of his or her intention to do so and at the

same time: (a) file copies of such papers he or she proposes to submit at the Final Approval

Hearing with the Clerk of the Court; (b) that any objection made by a Settlement Class Member

represented by counsel must be filed through the Court’s CM/ECF system; and (c) send copies of

such papers via mail, hand, or overnight delivery service to both Class Counsel and Defendants’

Counsel.


Page 21 of 37

VII. OBJECTIONS AND OPT-OUTS.

A. Any Settlement Class Member who intends to object must do so on or before the

Opt-Out And Objection Deadline. To be valid, any objections must be appropriately filed with

the Court no later than the Opt-Out And Objection Deadline, or alternatively they must be mailed

to the Court at the address below and postmarked no later than the Opt-Out And Objection

Deadline.

Clerk of Court United States District Court for the Northern District of Illinois 219 South Dearborn Street Chicago, Illinois 60604 Attention: “West v. Act II Jewelry, LLC Case No. 15-cv-05569”

A copy of the objection must also be mailed to the Settlement Administrator at a mailing address

that the Settlement Administrator will establish to receive requests for exclusion or objections,

Claim Forms, and any other communications relating to this Settlement.

B. The Settlement Class Member must include in any such objection the name,

address, telephone number of the Person objecting and, if represented by counsel, of his or her

counsel. An objecting Settlement Class Member must state, specifically and in writing, all

objections and the basis for any such objections, and provide a statement of whether he or she

intends to appear at the Final Approval Hearing, either with or without counsel. Any Settlement

Class Member who fails to timely file and serve a written objection and notice of his or her intent

to appear at the Final Approval Hearing pursuant to this Paragraph, as detailed in the Class

Notice, shall not be permitted to object to the approval of the Settlement at the Final Approval

Hearing and shall be foreclosed from seeking any review of the Settlement or the terms of the

Agreement by appeal or other means.


Page 22 of 37

C. Any Person who objects to the Settlement may be subject to discovery, including

a deposition, by order of the Court. The Parties will work together to respond to any objections

raised to the Settlement.

D. Any payments made from the Settlement Fund to Persons objecting to the

Settlement must receive prior Court approval.

E. A member of the Settlement Class may request to be excluded from the

Settlement Class in writing by a request postmarked on or before the Opt-Out And Objection

Deadline approved by the Court and specified in the Notice. In order to exercise the right to be

excluded, a member of the Settlement Class must timely send a written request for exclusion to

the Settlement Administrator providing his/her name and address, a signature, the name and

docket number of the case, and a statement that he/she wishes to be excluded from the

Settlement Class. A request to be excluded that does not include all of the foregoing information,

or that is sent to an address other than that designated in the Class Notice, or that is not

postmarked within the time specified shall be invalid and the Persons or entities serving such a

request shall be members of the Settlement Class and shall be bound as Settlement Class

Members by the Agreement, if approved. Any member of the Settlement Class who elects to be

excluded shall not: (a) be bound by any orders or the Final Judgment; (b) be entitled to relief

under this Settlement Agreement; (c) gain any rights by virtue of this Settlement Agreement; or

(d) be entitled to object to any aspect of this Settlement Agreement. The request for exclusion

must be personally signed by the Person requesting exclusion. So called “mass” or “class” opt-

outs shall not be allowed. To be valid, a request for exclusion must be postmarked or received by

the date specified in the Notice. A member of the Settlement Class who requests to be excluded

from the Settlement Class cannot also object to the Settlement Agreement. If more than 0.1% of


Page 23 of 37

the Settlement Class Members request to be excluded from the Settlement Class, Defendants

shall have the right to terminate this Settlement Agreement by providing written notice of the

election to do so (“Termination Notice”) to Plaintiffs within twenty (20) days of being notified

that more than 0.1% of Settlement Members requested to be excluded.

VIII. CLAIMS PROCESS.

A. The Class Notice shall provide information regarding the filing of Claim Forms.

Claim Forms shall be available from the Settlement Administrator and on the Settlement

Website.

B. To file a Valid Claim, Settlement Class Members must (i) complete a Claim

Form, in the form of Exhibit A, providing all of the information required by the Claim Form,

including a signature; and (ii) return the completed and signed Claim Form and related

documents, if any, to the Settlement Administrator on or before the Claim Deadline. Customer

Class Members may, but are not required to, include receipts with their respective Claim Forms

in the event they wish to challenge the Tier designation which will be provided to them as part of

the Notice program. Only Settlement Class Members who submit Valid Claims shall be entitled

to a Cash Award.

C. The Settlement Administrator shall be responsible for reviewing all claims to

determine their validity. Any claim that is not substantially in compliance with the instructions

on the Claim Form or the terms of this Settlement Agreement or is postmarked or submitted

electronically later than the Claim Deadline shall be rejected. Following the Claim Deadline, the

Settlement Administrator shall provide a report of all accepted, rejected, or reclassified claims to


Page 24 of 37

Defense Counsel and Class Counsel, who shall have at least thirty (30) days to engage in the

following process:

1. If Class Counsel do not agree with the rejection or reclassification of a claim,

they shall bring it to the attention of Defense Counsel, and the Parties shall meet

and confer and attempt, in good faith, to resolve any dispute regarding the

rejected claim. Following their meet and confer, if the Parties do not reach

agreement, the Parties will provide the Settlement Administrator with their

positions regarding the disputed claim. The Settlement Administrator, after

considering the positions of the Parties and, if appropriate, seeking any

additional information from the Settlement Class Member, will make the final

decision in its sole discretion.

2. If Defense Counsel do not agree with the acceptance or reclassification of a

claim, they shall bring it to the attention of Class Counsel, and the Parties shall

meet and confer and attempt, in good faith, to resolve any dispute regarding the

accepted or reclassified claim. Defense Counsel may object to submitted claims

on the basis of lateness, insufficient information provided by the claimant, and

indicia of fraud. Following their meet and confer, if the Parties do not reach

agreement, the Parties will provide the Settlement Administrator with their

positions regarding the disputed claim. The Settlement Administrator, after

considering the positions of the Parties and, if appropriate, seeking any

additional information from the Settlement Class Member, will make the final

decision in its sole discretion.


Page 25 of 37

D. In the event that any Claim Forms are defective, incomplete, inaccurate or

evidence fraud, the Settlement Administrator may reject those Claim Forms without seeking

additional information or providing an opportunity to cure the defect.

IX. PRELIMINARY APPROVAL ORDER AND FINAL APPROVAL ORDER.

A. Promptly after the execution of this Settlement Agreement, Class Counsel shall

submit this Agreement together with its Exhibits to the Court and shall move the Court for

Preliminary Approval of the settlement set forth in this Agreement, certification of the

Settlement Class for settlement purposes only, appointment of Class Counsel and the Class

Representative, and entry of a Preliminary Approval Order. Among other things, the Preliminary

Approval Order shall set deadlines for submissions of Claim Forms, opt outs and objections, set

a Final Approval Hearing date, and approve the Notice and Claim Form for dissemination in

accordance with the Notice Plan, substantially in the form of Exhibits A through E hereto.

B. At the time of the submission of this Settlement Agreement to the Court as

described above, Class Counsel and Defendant’s Counsel shall request that, after Notice is given,

the Court hold a Final Approval Hearing and approve the settlement of the Action as set forth

herein.

C. After Notice is given, the Parties shall request and obtain from the Court a Final

Approval Order. The Final Approval Order will (among other things):

1. find that the Court has personal jurisdiction over all Settlement Class Members

and that the Court has subject matter jurisdiction to approve the Settlement

Agreement, including Exhibits A through G thereto;


Page 26 of 37

2. approve the Settlement Agreement and the proposed settlement as fair,

reasonable and adequate as to, and in the best interests of, the Settlement Class

Members; direct the Parties and their counsel to implement and consummate the

Settlement Agreement according to its terms and provisions; and declare the

Settlement Agreement to be binding on, and have res judicata and preclusive

effect in all pending and future lawsuits or other proceedings maintained by or

on behalf of Plaintiff and all other Settlement Class Members, Releasing Parties,

and their heirs, executors and administrators, successors and assigns;

3. find that the Notice and the Notice Plan implemented pursuant to the Settlement

Agreement: (i) constitute the best practicable notice under the circumstances;

(ii) constitute notice that is reasonably calculated, under the circumstances, to

apprise Settlement Class Members of the pendency of the Litigation, their right

to object to or exclude themselves from the proposed Agreement and to appear

at the Final Approval Hearing; (iii) are reasonable and constitute due, adequate

and sufficient notice to all Persons entitled to receive notice; and (iv) meet all

applicable requirements of the Federal Rules of Civil Procedure, the Due

Process Clause of the United States Constitution and the rules of the Court;

4. find that the Class Representatives and Class Counsel adequately represented

the Settlement Class for purposes of entering into and implementing the

Agreement;

5. dismiss the Litigation (including all individual claims and Settlement Class

claims presented thereby) on the merits and with prejudice, without fees or costs

to any party except as provided in the Settlement Agreement;


Page 27 of 37

6. incorporate the Releases set forth in Paragraph V, above, make the Releases

effective as of the date of the Final Approval Order, and forever discharge the

Released Parties as set forth herein;

7. permanently bar and enjoin all Settlement Class Members who have not been

properly excluded from the Settlement Class from filing, commencing,

prosecuting, intervening in, or participating (as class members or otherwise) in,

any lawsuit or other action in any jurisdiction based on the Released Claims;

8. authorize the Parties, without further approval from the Court, to agree to and

adopt such amendments, modifications and expansions of the Settlement

Agreement and its implementing documents (including Exhibits A through G to

this Agreement) as: (i) shall be consistent in all material respects with the Final

Judgment; or (ii) do not limit the rights of Settlement Class Members;

9. without affecting the finality of the Final Approval Order for purposes of

appeal, retain jurisdiction as to all matters relating to administration,

consummation, enforcement and interpretation of the Settlement Agreement and

the Final Approval Order, and for any other necessary purpose; and

10. incorporate any other provisions, as the Court deems necessary and just.

X. TERMINATION OR CANCELLATION OF SETTLEMENT.

A. Either Party may terminate the Settlement, by providing notice (“Termination

Notice”) to all other Parties within twenty (20) days of any of the following events: (i) the

Court’s refusal to grant preliminary approval of the Settlement as written; (ii) the Court’s refusal

to grant final approval of the Settlement as written; (iii) the reversal or substantial modification


Page 28 of 37

of the Court’s order granting preliminary or final approval; (iv) a material alteration by the Court

of any of the terms of the Settlement Agreement; or (v) the timely opt out of more than 0.1% of

Settlement Class Members.

B. If, for any reason, this Agreement is terminated or fails to become effective, then

the Settlement shall be null and void, and no stipulation, representation or assertion of fact made

in the Settlement may be used by any Party. The Parties shall, to the fullest extent possible, be

returned to their respective positions in the Litigation as of the date of this Agreement.

XI. ATTORNEYS’ FEE AWARD; INCENTIVE AWARDS.

A. At least fourteen (14) days prior to the Opt-Out And Objection Deadline, Class

Counsel will file its petition for the Attorneys’ Fee Award and Incentive Awards for the Class

Representatives for their efforts in prosecuting this case and achieving a meaningful benefit for

the Class. Subject to Court approval, the Attorneys’ Fee Award and Incentive Awards shall be

paid from the Settlement Fund. Class Counsel intends to seek Incentive Awards for the Class

Representatives ranging from $2,500 to $7,500.

XII. EFFECTIVE DATE AND FINALITY OF SETTLEMENT.

A. The Settlement provided for in this Agreement shall be final and unconditional on

the date immediately upon which the last of the following events and conditions have been

satisfied or waived, such date to be the “Effective Date”:

1. This Agreement has been fully executed by all Parties and their counsel;

2. The Court enters the Preliminary Approval Order;


Page 29 of 37

3. The Notice Administrator causes the Notice to be served in accordance

with the Preliminary Approval Order;

4. The Court issues the Final Order and Judgment;

5. All appeal periods have expired or been resolved as set forth below:

a. If no appeal is taken from a court order or a judgment, the date after

the time to appeal therefrom has expired; or

b. If any appeal is taken from a court order or judgment, the date after all

appeals therefrom, including petitions for rehearing or reargument,

petitions for rehearing en banc, and petitions for certiorari or any other

form of review, have been finally disposed of, such that the time to

appeal therefrom has expired, in a manner resulting in an affirmance

without material modification of the relevant order or judgment.

XIII. NOTICES.

A. All Notices to Class Counsel and Defense Counsel required by the Agreement

shall be made in writing and communicated by email and United States mail to the following

addresses:

To Class Counsel To Defense Counsel

Todd L. McLawhorn Eric L. Samore [email protected] [email protected] SIPRUT PC SmithAmundsen, LLC 17 North State Street 150 N. Michigan Suite 1600 Suite 3300 Chicago, Illinois 60602 Chicago, Illinois 60601


Page 30 of 37

B. The notice recipients and addresses designated in this Section may be changed by

written designation.

C. Upon the request of any Party, the Parties agree to promptly provide each other

with copies of comments, objections, requests for exclusion or other documents or filings

received as a result of the Notice.

XIV. NO ADMISSION OF LIABILITY

A. Defendants’ Denial of Wrongdoing. This Agreement reflects the Parties’

compromise and settlement of the disputed claims. Defendants do not admit any liability or

wrongdoing. The Settlement and its provisions, and all related drafts, communications and

discussions, cannot be construed as or deemed to be evidence of an admission or concession by

Defendant of any wrongdoing.

B. Inadmissibility. This Agreement (whether approved or not approved, revoked, or

made ineffective for any reason) and any proceedings or discussions related to this Agreement

are inadmissible as evidence of any liability or wrongdoing whatsoever in any Court or tribunal

in any state, territory, or jurisdiction. Further, neither this Agreement, the settlement

contemplated by it, nor any proceedings taken under it, will be construed or offered or received

into evidence as an admission, concession or presumption that class certification is appropriate,

except to the extent necessary to consummate this Agreement and the binding effect of the

Approval Order.


Page 31 of 37

XV. MISCELLANEOUS PROVISIONS.

A. Court Approval. Promptly after the execution of this Settlement Agreement,

Plaintiffs’ Counsel shall submit this Agreement to the Court, with the support of Defendants, and

shall move the Court for Approval of the Settlement set forth in this Agreement, certification of

the Class for settlement purposes only, appointment of Class Counsel and the Class

Representatives, and entry of an Preliminary Approval Order in the form attached as Exhibit G.

The Parties (a) acknowledge that it is their intent to consummate this Settlement Agreement; and

(b) agree, subject to their legal obligations, to cooperate to the extent reasonably necessary to

effectuate and implement all terms and conditions of this Agreement and to exercise their

reasonable best efforts to accomplish the foregoing terms and conditions of this Agreement. The

Parties agree to cooperate with one another in seeking Court approval of the Settlement

Agreement and promptly to agree upon and execute all such other documentation as may be

reasonably required to obtain approval of the Agreement.

B. No Reversion to Defendants. No amount of the Settlement Fund shall revert back

to Defendants. Settlement Class Members’ uncashed checks shall be awarded to a cy pres

recipient.

C. Voluntary Agreement. The Parties executed this Agreement voluntarily of the

Party’s own free will and without threat, force, fraud, duress, undue influence or coercion of any

kind.

D. Binding on Successors. This Agreement binds and benefits the Parties’ respective

successors, assigns, legatees, heirs, and personal representatives.

E. Parties Represented by Counsel. The Parties acknowledge that: (a) they have been

represented by independent counsel of their own choosing during the negotiation of this


Page 32 of 37

Settlement and the preparation of this Agreement; (b) they have read this Agreement and are

fully aware of its contents; and (c) their respective counsel fully explained to them the

Agreement and its legal effect.

F. Authorization. Each Party warrants and represents that there are no liens or claims

of lien or assignments, in law or equity, against any of the claims or causes of action released by

this Agreement and, further, that each Party is fully entitled and duly authorized to give this

complete and final release and discharge.

G. Entire Agreement. This Agreement and attached exhibits contain the entire

agreement between the Parties and constitute the complete, final, and exclusive embodiment of

their agreement with respect to the Litigation. This Agreement is executed without reliance on

any promise, representation, or warranty by any Party or any Party’s representative other than

those expressly set forth in this Agreement.

H. Construction and Interpretation. Neither Party nor any of the Parties’ respective

attorneys will be deemed the drafter of this Agreement for purposes of interpreting any provision

in this Agreement in any judicial or other proceeding that may arise between them. This

Agreement has been, and must be construed to have been, drafted by all the Parties to it, so that

any rule that construes ambiguities against the drafter will have no force or affect.

I. Headings. The various headings used in this Agreement are solely for the Parties’

convenience and may not be used to interpret this Agreement. The headings do not define, limit,

extend, or describe the Parties’ intent or the scope of this Agreement.

J. Exhibits. The exhibits to this Agreement are integral parts of the Agreement and

Settlement and are incorporated into this Agreement as though fully set forth in the Agreement.


Page 33 of 37

K. Modifications and Amendments. No amendment, change, or modification to this

Agreement will be valid unless in writing signed by the Parties or their counsel.

L. Governing Law. This Agreement is governed by Illinois law and must be

interpreted under Illinois law and without regard to conflict of laws principles.

M. Further Assurances. The Parties must execute and deliver any additional papers,

documents and other assurances, and must do any other acts reasonably necessary, to perform

their obligations under this Agreement and to carry out this Agreement’s expressed intent.

N. Agreement Constitutes a Complete Defense. To the extent permitted by law, this

Agreement may be pled as a full and complete defense to any action, suit, or other proceedings

that may be instituted, prosecuted or attempted against the Released Parties contrary to this

Agreement.

O. Execution Date. This Agreement is deemed executed on the date the Agreement is

signed by all of the undersigned.

P. Counterparts. This Agreement may be executed in counterparts, each of which

constitutes an original, but all of which together constitutes one and the same instrument. Several

signature pages may be collected and annexed to one or more documents to form a complete

counterpart. Photocopies, PDFs, or facsimiles of executed copies of this Agreement may be

treated as originals.

Q. Recitals. The Recitals are incorporated by this reference and are part of the

Agreement.

R. Severability. If any provision of this Settlement is declared by the Court to be

invalid, void, or unenforceable, the remaining provisions of this Settlement will continue in full

force and effect, unless the provision declared to be invalid, void, or unenforceable is material, at


Page 34 of 37

which point the Parties shall attempt to renegotiate the Settlement or, if that proves unavailing,

either Party can terminate the Settlement Agreement without prejudice to any Party.

S. No Conflict Intended. Any inconsistency between this Agreement and the

attached exhibits will be resolved in favor of this Agreement.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]








Page 36 of 37

Plaintiff Mary Roman

_____________________

Signature _____________________ Date

Plaintiff Marie Esposito

_____________________

Signature _____________________ Date

Plaintiff Michelle Ballon

_____________________

Signature _____________________ Date

11/02/2017


http://www.rightsignature.com/documents/4UUPE4IAB43A2E84SBGLLA


Page 37 of 37

EXHIBIT LIST

Claim Form ......................................................................................................................... A

E-Mail Notice...................................................................................................................... B

Postcard Notice ................................................................................................................... C

Settlement Website Detailed Notice ................................................................................... D

Social Media Notice ............................................................................................................ E

Publication Notice Description ........................................................................................... F

Preliminary Approval Order ............................................................................................... G


Exhibit A


CLAIM FORM

West, et al. v. Act II Jewelry, LLC f/k/a lia sophia, et al., No. 15-CV-05569 (N.D. Ill.)

SUBMIT BY [Claim Deadline]

ONLINE AT [WEBSITE URL]

OR MAIL TO:

[SETTLEMENT ADMINISTRATOR’S ADDRESS]

If you received Notice, select the Settlement Class(es) you are part of as noted on the email or postcard Notice you

received:

□ Customer Class – Tier X.

□ Sales Advisor Class

□ New Sales Advisor Class

Enter your Claim Filing ID found on the email or postcard Notice you received:

___ ___ ___ ___ ___ ___ ___ ___

If you are part of the Customer Class and would like to challenge the Settlement Administrator’s Tier

designation of your claim, you may do so during the online claim submission process at [Website URL]. You

may, but are not required to, include receipts with your claim.

Claimant information:

_______________________________ ___________________________________ First name Last Name

Street address

__________________________________ ___ ___ ___ ___ ___ ___ ___ City State Zip code

________________________________@________.________ Email address

___ ___ ___ - ___ ___ ___ - ___ ___ ___ ___ Phone number

Under penalty of perjury, I certify that I am a member of the above Settlement Classes and Tiers as defined in

the Notice available on the website [Website URL]. I also certify that this is the only claim I am submitting in

connection with this case.

________________________________ ________________________

Signature Dated (mm/dd/yyyy)


Exhibit B


From: Heffler Claims Group LLC

To: [Name]

Subject: Legal Notice

You Could Be Eligible to Receive a Payment from a Class Action Settlement

if you Purchased or Sold Jewelry from Act II Jewelry, LLC Formerly Known As lia sophia.

Name

Email

This is only a summary of the information related to the Settlement. For detailed information, about the

Settlement, your rights, and the benefits that may be available to you, visit: www________.com

A Settlement has been reached in a lawsuit alleging that Act II Jewelry, LLC f/k/a lia sophia (“Act II”)

breached its promise to provide a lifetime warranty, and that Act II harmed its sales advisors by

misappropriating their customer information and making false statements to those sales advisors

concerning the closing of its business. Act II denies these allegations and denies any wrongdoing. The

Court has not decided who is right.

Act II’s records show that you may be a Class Member of one or more of the following Settlement

Classes which include all individuals in the United States who: Customer Class – purchased jewelry from

Act II between June 23, 2011, and December 1, 2014; Sales Advisor Class – sold at least $250 of jewelry

for Act II between January 1, 2014, and August 17, 2014; New Sales Advisor Class – purchased initial

starter kits from Act II between August 1, 2014, and December 1, 2014. In total, the classes contain

approximately 4.0 million members. If the settlement is approved, a settlement fund of $6.7 million

dollars will be created for distribution among those Class Members who submit Valid Claims, attorneys’

fees, incentive awards, and settlement administration expenses.

To get a payment you must submit a claim online or by mail using this unique identifier: [Claim ID]

by [Claim Deadline]. Customer and Sales Advisor Class Members’ cash payments will depend on the

total number of Valid Claims filed. New Sales Advisor Class Members will receive a full reimbursement

of the amount paid for his or her initial starter kit, which ranged from $99 to $149, subject to a cap on

total recovery for the class.

Your Other Options. If you do not want to be legally bound by the Settlement’s terms or you want to

pursue your own case against Act II, you must Opt Out of the Settlement by [Opt Out Deadline], but

you will not get a payment from the Settlement. If you do not Opt Out, you may Object to the Settlement

by [Objection Deadline]. The detailed notice available on the Settlement Website explains how to Opt

Out or Object.

The Court will hold a Hearing on [Final Approval Hearing Date] to consider whether to approve the

Settlement and a request for attorneys’ fees of up to one third of the $6.7 million Settlement Fund after

settlement administration expenses (approximately $1,800,000) and incentive awards of $2,500-$7,500 to

the Class Representatives. The Motion for Fees will be posted on the website after it is filed. You may

appear at the hearing, at your own expense, but you don't have to. For more information, call or visit the

website.

[Website URL] [Settlement Administrator Phone Number]


Exhibit C


FRONT

Important Court-Ordered Legal Notice [Postage Prepaid]

CLAIMS ADMINISTRATOR

ADDRESS LINE 1

ADDRESS LINE 2

ADDRESS LINE 3

You Could Be Eligible to Receive a Payment from a Class Action Settlement

if you Purchased or Sold Jewelry from Act II Jewelry, LLC Formerly Known As lia sophia.

Name

Address

City State Zip

This is only a summary of the information related to the Settlement. For detailed information, about the Settlement, your

rights, and the benefits that may be available to you, visit: www________.com

BACK

A Settlement has been reached in a lawsuit alleging that Act II Jewelry, LLC f/k/a lia sophia (“Act II”) breached its promise to

provide a lifetime warranty, and that Act II harmed its sales advisors by misappropriating their customer information and

making false statements to those sales advisors concerning the closing of its business. Act II denies these allegations and denies

any wrongdoing. The Court has not decided who is right.

Act II’s records show that you may be a Class Member of one or more of the following Settlement Classes which include

all individuals in the United States who: Customer Class – purchased jewelry from Act II between June 23, 2011, and

December 1, 2014; Sales Advisor Class – sold at least $250 of jewelry for Act II between January 1, 2014, and August 17,

2014; New Sales Advisor Class – purchased initial starter kits from Act II between August 1, 2014, and December 1, 2014. In

total, the classes contain approximately 4.0 million members. If the settlement is approved, a settlement fund of $6.7 million

dollars will be created for distribution among those Class Members who submit Valid Claims, attorneys’ fees, incentive

awards, and settlement administration expenses.

To get a payment you must submit a claim online or by mail using this unique identifier: [Claim ID] by [Claim Deadline].

Customer and Sales Advisor Class Members’ cash payments will depend on the total number of Valid Claims filed. New Sales

Advisor Class Members will receive a full reimbursement of the amount paid for his or her initial starter kit, which ranged

from $99 to $149, subject to a cap on total recovery for the class.

Your Other Options. If you do not want to be legally bound by the Settlement’s terms or you want to pursue your own case

against Act II, you must Opt Out of the Settlement by [Opt Out Deadline], but you will not get a payment from the

Settlement. If you do not Opt Out, you may Object to the Settlement by [Objection Deadline]. The detailed notice available

on the Settlement Website explains how to Opt Out or Object.

The Court will hold a Hearing on [Final Approval Hearing Date] to consider whether to approve the Settlement and a request

for attorneys’ fees of up to one third of the $6.7 million Settlement Fund after settlement administration expenses

(approximately $1,800,000) and incentive awards of $2,500-$7,500 to the Class Representatives. The Motion for Fees will be

posted on the website after it is filed. You may appear at the hearing, at your own expense, but you don't have to. For more

information, call or visit the website.

[Website URL] [Settlement Administrator Phone Number]


Exhibit D




EASTERN DIVISION






Plaintiffs,

v.




Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 1:15-cv-05569


NOTICE OF SETTLEMENT

If you purchased jewelry or initial starter kits from, or sold jewelry for,

Act II Jewelry, LLC f/k/a lia sophia, you may benefit from this class action settlement.

A Federal court authorized this notice. This is not a solicitation from a lawyer.

THIS IS A NOTICE OF A SETTLEMENT OF A CLASS ACTION LAWSUIT.

THIS IS NOT A NOTICE OF A LAWSUIT AGAINST YOU.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

SUBMIT A CLAIM BY

[Claim Deadline]

If you submit a Claim Form, available on www._______com, by

[Claim Deadline], your Claim Form will be considered for a Cash

Award.

EXCLUDE YOURSELF

FROM THE

SETTLEMENT BY

[Opt Out Deadline]

You will receive no benefits, but you will retain your legal claims

against the Defendants.

OBJECT BY

[Objection Deadline]

Write to the Court about why you do, or do not, like the settlement.

You must remain in the Settlement Class(es) to object to the

Settlement.


GO TO A HEARING ON

[Hearing Date] Ask to speak in Court about the fairness of the settlement.

1. What is this lawsuit about?

This lawsuit claims that Defendant Act II Jewelry, LLC f/k/a lia sophia (“Act II”) breached its

promise to its customers to provide a lifetime warranty for the jewelry sold by its sales advisors.

The lawsuit further alleges that Act II harmed its sales advisors by misappropriating their

customer information, and making misstatements to those sales advisors concerning the closing

of its business. Act II denies the allegations in the lawsuit and denies any wrongdoing. The Court

has not decided who is right.

2. Why did I get this notice?

You are receiving a notice because Act II’s records show that you: (a) purchased jewelry from

Act II; (b) sold jewelry from Act II; and/or (c) purchased initial starter kits from Act II, within

the definitions of the Settlement Classes listed in Question 5 below.

3. Why is this a class action?

In a class action, one or more people called Class Representatives (in this case, Plaintiffs Cynthia

West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie Esposito, and Michelle

Ballon), sue on behalf of a group or groups (or a “Class” or “Classes”) of people who have

similar claims. In this case, those claims are related to Act II’s revocation of lifetime warranties

on its jewelry and alleged misrepresentations or omissions to its sales advisors.

4. Why is there a settlement?

To avoid the cost, risk, and delay of litigation, the Parties reached a settlement agreement as to

Plaintiffs’ and the Classes’ claims.

5. How do I know if I am a part of the settlement?

For settlement purposes, the Court has certified three Classes consisting of all people who meet

the following definitions:

1. Customer Class – All individuals in the United States who purchased jewelry from

Act II between June 23, 2011, and December 1, 2014. Class Counsel estimates that,

based on Act II’s records, there are approximately 4 million people in the Customer

Class.


2. Sales Advisor Class – All individuals in the United States who sold at least $250 of

jewelry for Act II between January 1, 2014, and August 17, 2014. Class Counsel

estimates that, based on Act II’s records, there are approximately 19,069 people in the

Sales Advisor Class.

3. New Sales Advisor Class – All individuals in the United States who purchased initial

starter kits from Act II between August 1, 2014, and December 1, 2014. Class

Counsel estimates that, based on Act II’s records, there are approximately 2,709

people in the New Sales Advisor Class.

Specifically excluded from the Customer Class, Sales Advisor Class, and New Sales Advisor

Class are the following persons: (a) Defendants and their respective affiliates, (b) Class Counsel

and their immediate family members; and (c) the judges who have presided over this Litigation

and their immediate family members.

YOUR BENEFITS UNDER THE SETTLEMENT

6. What can I get from the settlement?

A Settlement Fund of $6,700,000 has been established to pay valid claims, attorneys’ fees,

service awards, costs, expenses and settlement administration. After deduction of settlement

administration expenses ($1,300,000), attorneys’ fees and expenses (approximately $1,800,000),

and service awards to the Class Representatives (approximately $25,000), a Class Fund of

approximately $3,575,000 will be established to pay valid claims. The attorneys’ fees award and

the service awards are subject to Court approval.

If you submit a Valid Claim form, which is available on this website, by [Claim Deadline], you

will be entitled to a monetary benefit depending on the Class(es) you belong to. Only one Claim

is allowed per Class Member. You may qualify to be a member of more than one Class and may

apply to receive a benefit for each Class you qualify for on the same Claim Form.

Customer Class Members

Fifty-seven percent (57%) of the Class Fund will be allocated to the Customer Class. Customer

Class Members who submit Valid Claims will receive a share of this allocation depending on the

total dollar value of that Customer Class Member’s purchases from Act II between June 23,

2011, and December 1, 2014, as reflected in Act II’s records.

Tier One: Each Customer Class Member who submits a Valid Claim and purchased less

than $100 in jewelry from Act II during this time period will be deemed to be in “Tier

One” of the Customer Class.

Tier Two: Each Customer Class Member who submits a Valid Claim and purchased

between $100 to $299.99 in jewelry from Act II during this time period will be deemed to

be in “Tier Two” of the Customer Class. A Tier Two Customer Class Member will

receive double the amount received by each Customer Class Member in Tier One.


Tier Three: Each Customer Class Member who submits a Valid Claim and purchased

$300 or more in jewelry from Act II during this time period will be deemed to be in “Tier

Three” of the Customer Class. A Tier Three Customer Class Member will receive triple

the amount received by each Customer Class Member in Tier One.

The final cash payment amount to Customer Class Members will depend on the total number of

Valid Claims filed by the Customer Class. Below is a chart that estimates what each Customer

Class Member may receive based on the percentage of Customer Class Members submitting

Valid Claims:

Percentage of Claiming

Class Members

Estimated Settlement

Payment (Tier One)


Payment (Tier Two)


Payment (Tier Three)

1% $40.09 $80.18 $120.27

3% $13.36 $26.72 $40.08

5% $8.01 $16.02 $24.03

These numbers are estimates only. The exact amount that Customer Class Members receive will

depend on the percentage of Customer Class Members who submit Valid Claim forms. That

percentage is still unknown; it could be less than 1% or more than 5%.

Sales Advisor Class Members

Thirty-eight percent (38%) of the Class Fund will be allocated to the Sales Advisor Class. Sales

Advisor Class Members who submit Valid Claims will receive a share of this allocation

proportional to the amount of sales made by that Sales Advisor Class Member between January

1, 2014, and August 17, 2014 as reflected in Act II’s records (“Your 2014 Sales”). You may find

Your 2014 Sales on the online claim form associated with your claim identifier provided on the

Notice you received or from the Settlement Administrator. The final cash payment amount to

Sales Advisor Class Members will depend on the total number of Valid Claims filed by the Sales

Advisor Class. Below is a chart that estimates what each Sales Advisor Class Member may

receive based on the percentage of Sales Advisor Class Members submitting Valid Claims:

Percentage of Claiming Class Members Estimated Settlement Payment

10% 20.04% of Your 2014 Sales

15% 13.36% of Your 2014 Sales

25% 8.02% of Your 2014 Sales

These numbers are estimates only. The exact amount that Sales Advisor Class Members receive

will depend on the percentage of Act II’s sales from January 1, 2014, through August 17, 2014,

made by Sales Advisor Class Members who submit Valid Claim forms. That percentage is still

unknown, it could be less than 10% or more than 25%.

New Sales Advisor Class Members

Five percent (5%) of the Class Fund will be allocated to the New Sales Advisor Class. New Sales

Advisor Class Members who submit Valid Claims will receive a full reimbursement of the

amount paid by that New Sales Advisor for his or her initial starter kit, which ranged from $99 to

$149. In the event the number of Valid Claims for New Sales Advisors exhausts the amount


allocated to the New Sales Advisor Class, each New Sales Advisor who submits a Valid Claim

will have his or her Cash Award reduced proportionally so that the total amount of Cash Awards

paid to New Sales Advisors will not exceed five percent (5%) of the Class Fund. In the event that

there is money remaining for the New Sales Advisor Class after payment of Cash Awards to all

New Sales Advisor Class Members who submit Valid Claims, the remainder shall be added back

to the Class Fund and distributed to the Customer Class and Sales Advisor Class in the same

proportion as described above.

7. When will I receive these benefits?

You will receive these benefits approximately 90 days after the Court enters a Final Approval

Order. This estimate is premised on the assumption that no objections are received and no appeal

is filed.

8. I want to be a part of the settlement. What do I do?

You must submit a claim form, available on this website, either: (1) online at [Website URL]; or

by mail to West, et al. v. Act II Jewelry, LLC, et al. Settlement Administrator, [Settlement

Administrator Address]. You must submit your claim form so it is postmarked by [Claim

Deadline, or file your form online by <<date>> at 11:59 pm Central Time. If your claim form is

approved, you will receive a Cash Award. There can only be one Cash Award per Class

Member. If you do not submit a Valid Claim form, you will not be considered for a Cash Award.

Depending on the value of your Cash Award, you may be asked to fill-out a W-9 for tax

reporting reasons. The W-9 will be mailed to you along with a letter containing further

instructions. If you do not complete a W-9 when requested, your Cash Award may be subject to

automatic backup tax withholding.

9. What am I giving up if I remain in the settlement?

By staying in the Class(es), all of the Court’s orders will apply to you, and you give Defendants

and their affiliates a “release.” A release means you cannot sue or be part of any other lawsuit

against Defendants and their affiliates about the claims or issues in this lawsuit.

10. How much will the Class Representatives receive?

The Plaintiffs, Cynthia West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie

Esposito, and Michelle Ballon, will each receive payments ranging from $2,500 to $7,500 for

their services as Class Representatives. These payments are subject to the Court’s Approval.

EXCLUDING YOURSELF FROM THE SETTLEMENT


If you do not want to remain in the settlement, but you want to keep your legal claims against

Defendants, then you must take steps to exclude yourself from this settlement.

11. How do I get out of the settlement?

To exclude yourself from the settlement, you must send a letter by mail stating that you want to

be excluded from West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.). Be

sure to include your name, address, telephone number, and your signature. You must mail your

exclusion request so that it is postmarked no later than [Opt-Out Date], to:

[Settlement administrator’s address]

12. If I exclude myself, do I still receive benefits from this settlement?

No, you will not receive anything resulting from the settlement, but you will have the right to sue

Defendants over the claims raised in this case, either on your own or as a part of a different

lawsuit. If you exclude yourself, the time you have in which to file your own lawsuit (called the

“statute of limitations”) will begin to run again. You will have the same amount of time to file

the suit that you had when this case was filed.

THE LAWYERS REPRESENTING YOU

13. Do I have a lawyer in this case?

The Court has appointed the law firm of Siprut PC to serve as Class Counsel. You will not be

charged for these lawyers; however, they will receive a payment from the Settlement in an

amount to be determined by the Court on a later date. If you want to be represented by your own

lawyer, you may hire one at your own expense.

14. How will the lawyers be paid?

Class Counsel will be paid reasonable attorneys’ fee and costs from the Settlement Fund. Class

Counsel will seek an Attorneys’ Fee Award of one-third of the Net Settlement Fund after the

deduction of settlement administration expenses.

CLASS COUNSEL’S VIEWS ABOUT THE SETTLEMENT 15. Is this a fair settlement?

Class Counsel believes the settlement is fair. Plaintiffs claim Act II violated the Illinois

Consumer Fraud Act and committed breach of contract and fraud by revoking the lifetime


warranties on its jewelry and by making material misrepresentations or omissions to its sales

advisors. Therefore, Plaintiffs claim that: (a) those who purchased jewelry from Act II – i.e. the

Customer Class – have sustained damages through the diminished value of the jewelry they

purchased; and (b) those who continued to work and purchase jewelry, supplies, and initial

starter kits from Act II – i.e. the Sales Advisor Class and the New Sales Advisor Class – have

sustained damages through their reliance on Act II’s statements.

The Settlement Fund of $6,700,000 will be used to provide direct monetary benefits to Class

Members who submit Valid Claims, as illustrated in Question 6 above. Given the inherent risks

and costs of continuing with complex litigation of this nature, Class Counsel believes this

settlement is a meaningful achievement.

16. What is the Defendants’ view of this settlement?

The Defendants deny any wrongdoing or liability in this lawsuit. However, the Defendants desire

to settle the claims of the Classes to avoid the expense, burden, and uncertainty of further

litigation, and to put to rest all claims and issues in this lawsuit.

OBJECTING TO THE SETTLEMENT

You can tell the Court that you do not agree with the settlement or some part of it.

17. How do I tell the Court that I do not like the Settlement?

If you are a member of one or more of the three Settlement Classes, you can object to the

Settlement. In order to object to the Settlement, you must send a written objection (such as a

letter or legal brief) stating that you object and the reasons why you think the Court should not

approve the Settlement. Your objection must be personally signed by you and include: (1) your

name, address, telephone number; (2) a sentence stating under penalty of perjury that you are a

member of one or more of the Settlement Classes; (3) the name and number of the case: West, et

al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.); (4) the factual basis and legal

grounds for your objection to the Settlement; (5) the identity of any witnesses whom you may

call to testify at the Final Approval Hearing; and (6) copies of any exhibits you may seek to offer

into evidence at the Final Approval Hearing. Your written objection must indicate whether your

lawyer(s) intend to appear at the Final Approval Hearing. If you have a lawyer, your lawyer who

intends to appear at the Final Approval Hearing also must enter a written Notice of Appearance of

Counsel with the Clerk of the Court no later than [Objection Deadline], and must include the full

caption and case number of each previous class action case in which that counsel has represented

an objector. You must also file your objection so that it is postmarked no later than [Objection

Deadline] to:

Clerk of the Court

United States District Court for the Northern District of Illinois

219 South Dearborn Street, Chicago IL 60604

Attention: “West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569”


You must also send a copy of your objection postmarked no later than [Objection Deadline] to:

[Settlement administrator’s address]

THE FINAL APPROVAL HEARING

The Court will hold a hearing to decide whether to approve the settlement. You may attend if

you wish, but you are not required to do so.

18. Where and when is the final approval hearing?

The Court will hold a hearing on [Final Approval Hearing Date] in Courtroom 1903 of the

Everett McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Chicago, IL

60604. The purpose of the hearing will be for the Court to determine whether the proposed

settlement is fair, reasonable, and adequate and in the best interests of the Classes and to

determine the appropriate amount of compensation for Class Counsel and Plaintiffs. At that

hearing, the Court will be available to hear any objections and arguments concerning the fairness

of the proposed settlement.

YOU ARE NOT REQUIRED TO ATTEND THIS HEARING TO BENEFIT FROM THIS

SETTLEMENT. The hearing may be postponed to a later date without notice.

GETTING MORE INFORMATION – CONTACT:

Visit: [Website URL]

Class Counsel, Todd L. McLawhorn of Siprut PC, at

17 N. State Street, Suite 1600, Chicago, IL 60602;

Telephone: (312) 236-0000;

Facsimile: (312) 878-1342;

E-Mail: [email protected]

DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR

THE LITIGATION TO THE CLERK OF THE COURT OR TO THE JUDGE.

They are not permitted to answer your questions.


mailto:[email protected]

Exhibit E





Exhibit F


EXHIBIT F

Publication Notice Description

The Notice program will be supplemented through a highly targeted online search and social media

outreach effort, serving over 3,000,000 impressions across Google, Facebook and Instagram.

Online ads will appear in Google Search results based on users’ keyword or phrase searches, e.g.,

Lia Sophia, Lia Sophia Outlet, Lia Sophia Necklace, Lia Sophia jewelry, Lia Sophia rings, Lia

Sophia earrings, etc. Further, a custom audience list will be created using known class member

email data to match to Google user accounts. When those users are signed in to their Google

account, they can view the ads via Google Search, YouTube, and Gmail, based on their relevant

keyword or phrase search queries.

A similar custom audience approach will be employed on Facebook and Instagram. Users whose

email addresses or phone numbers match Facebook or Instagram accounts will be served ads in

their newsfeeds. Ads will be served to over 200,000 Facebook users who like or follow Lia Sophia

on Facebook and over 4,000 followers of Lia Sophia on Instagram.

To increase visibility and social engagement, the notice program will target those who have hash

tagged relevant topics, e.g., #liasophia, #liasophiajewelry, #liasophiaadvisor, #liasophiaparty,

etc. A hashtag is a social media label for content that helps others who are interested in a certain

topic, quickly find content on that same topic. Anyone sharing content on a relevant topic can add

the hashtag label to a message. Others searching for that topic can search for that label to find

other messages on that same social media platform.

The Notice program will include a press release issued to over 7,000 news outlets and journalists

over PR Newswire’s US1 national distribution.


Exhibit G




EASTERN DIVISION






Plaintiffs,

v.




Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 1:15-cv-05569


[PROPOSED] PRELIMINARY APPROVAL ORDER

Having fully considered Plaintiffs’ Motion For Preliminary Approval Of Class Action

Settlement (the “Motion”), the parties’ arguments and submissions concerning the Motion, and

the applicable facts and law, the Court hereby finds and orders as follows:

1. Except as otherwise provided below, all capitalized terms used in this Preliminary

Approval Order shall have the meanings and/or definitions given them in the Class Action

Settlement Agreement (“Agreement”), attached to the Motion as Exhibit 1.

2. The Court preliminarily approves the Agreement subject to the Final Approval

Hearing, the purpose of which will be to decide whether to grant final approval to the Settlement

Agreement reached by the Parties (the “Settlement”). The Court finds that the Agreement, the

Settlement set forth therein, and all exhibits attached thereto are (a) fair, reasonable, and

adequate, (b) entered into in good faith, (c) free of collusion to the detriment of the Settlement

Class and (d) within the range of possible judicial approval to warrant sending notice of West, et


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al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.) (the “Litigation”) and the

proposed Settlement to the Settlement Classes and to hold a full hearing on the proposed

Settlement.

3. For settlement purposes only, conditioned upon final certification of the proposed

class and upon Final Judgment, the Court finds that the Litigation may be maintained on behalf

of the following classes:

(a) Customer Class – All individuals in the United States who

purchased jewelry from Act II between June 23, 2011, and

December 1, 2014.

(b) Sales Advisor Class – All individuals in the United States

who sold at least $250 of jewelry for Act II between

January 1, 2014, and August 17, 2014.

(c) New Sales Advisor Class – All individuals in the United

States who purchased initial starter kits from Act II

between August 1, 2014, and December 1, 2014.

Specifically excluded from the Customer Class, Sales Advisor

Class, and New Sales Advisor Class are the following persons: (a)

Defendants and their respective affiliates, (b) Class Counsel and

their immediate family members; and (c) the judges who have

presided over this Litigation and their immediate family members.

4. The Court recognizes that Defendants Act II Jewelry, LLC and Victor K. Kiam,

III (collectively, “Defendants”) reserve all of their defenses and objections against and rights to

oppose any request for class certification in the event that the proposed Settlement does not

become Final for any reason. Defendants also reserve all of their defenses to the merits of the

claims asserted in the event the Settlement does not become Final for any reason.

5. For settlement purposes only, the Court preliminarily appoints: (a) Plaintiffs

Kristine Hollander and Michelle Ballon as representatives of the Customer Class; (b) Plaintiffs


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Cynthia West, Marie Esposito, and Mary Roman as representatives of the Sales Advisor Class;

and (c) Plaintiff Jennifer Zimmerman as representative of the New Sales Advisor Class.

6. For settlement purposes only, the Court preliminarily appoints the following

attorneys to act as Class Counsel for the Settlement Class:

Joseph J. Siprut

[email protected]

Todd L. McLawhorn

[email protected]

SIPRUT PC

17 North State Street

Suite 1600


7. The Court appoints Heffler Claims Group LLC as the Settlement Administrator.

The Settlement Administrator will be an agent of the Court and will be subject to the Court’s

supervision and direction as circumstances may require.

8. Notice shall be first provided to the Settlement Class within 40 (forty) days after

entry of this Order (the “Notice Date”). Notice shall be in a form substantially the same as the

Notice Plan provided in the Agreement, including any modification thereto.

9. The Court finds that the Notice and Notice Plan meet the requirements of Rule 23

of the Federal Rules of Civil Procedure and due process, constitute the best notice practicable

under the circumstances, and constitute due and sufficient notice to all potential members of the

Settlement Classes. The Notice is reasonably calculated, under the circumstance, to apprise the

Settlement Classes: (a) of the pendency of the Litigation; (b) of their right to exclude themselves

from the Settlement Class and the proposed Settlement; (c) that any judgment, whether favorable

or not, will bind all members of the Settlement Class who do not request exclusion; and (d) that

any member of the Settlement Class who does not request exclusion may object to the

Settlement, the request for attorneys’ fees and costs and/or the service award and, if he or she


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desires, enter an appearance personally or through counsel. The Court further finds that the

notices are written in plain English and are readily understandable by members of the Settlement

Class.

10. The Court approves the Claim Form in substantially the same form as the Claim

Form attached to the Motion as Exhibit 1-A. Any member of the Settlement Class who wishes to

receive benefits under the Agreement must sign and return a complete and timely Claim Form in

compliance with the process set forth in the Agreement, and such Claim Form shall be

postmarked or submitted online no later than ninety (90) days after the Notice Date (the “Claim

Deadline”). Any Settlement Class Member who does not submit a complete and timely Claim

Form in compliance with the Agreement shall not be entitled to any benefits under the

Settlement, but nonetheless shall be barred by the release provisions of the Agreement and the

Final Judgment and shall be deemed to have released the Released Parties from the Released

Claims.

11. Any member of the Settlement Classes who wishes to opt out or exclude himself

or herself from the Settlement must submit an appropriate, timely request for exclusion sent to

the Settlement Administrator at the address on the Notice and to be postmarked no later than

ninety (90) days after the Notice is first transmitted to the Settlement Classes (the “Opt-Out And

Objection Deadline”). The opt-out request must (a) identify the Settlement Class member by full

name, address, and phone number; and (b) state that he or she wishes to be excluded from the

Settlement. A timely and valid request to opt out of the Settlement shall preclude the person

opting out from participating in the proposed Settlement and he or she will be unaffected by the

Agreement. The Settlement Administrator shall compile a list of all members of the Settlement

Class who properly and timely submit an opt-out request (the “Exclusion List”).


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12. Any member of the Settlement Classes who does not submit a timely and valid

written request for exclusion shall be bound by all subsequent proceedings, orders and judgments

in this Litigation, regardless of whether he or she currently is, or subsequently becomes, a

plaintiff in any other lawsuit, arbitration or other proceeding against any of the Released Parties

asserting any of the Released Claims.

13. The Settlement Administrator shall provide the Opt-Out List to Class Counsel and

Defendants’ Counsel no later than fourteen (14) days after the Opt-Out and Objection Deadline,

and shall file the Opt-Out List along with an affidavit attesting to the completeness and accuracy

thereof with the Court no later than seven (7) days before the Final Approval Hearing.

14. Any member of the Settlement Classes who does not properly and timely submit

an opt-out request and who wishes to object to the fairness, reasonableness or adequacy of the

Agreement or the proposed Settlement or who wishes to object to the award of attorneys’ fees

and expenses or Plaintiffs’ service awards may file with the Court and serve on Class Counsel

and Defendants’ Counsel, postmarked no later than the Opt-Out and Objection Deadline, a

written statement of the objection signed by the Settlement Class Member containing all of the

following information:

(a) A caption or title that identifies it as “Objection to Class Settlement in West, et al.

v. Act II Jewelry, LLC, et al. (Case No. 15-cv-5569)”;

(b) The objector’s full name, address, email address, telephone number, and his or her

counsel’s name, address, email address, and telephone number;

(c) A written statement stating under penalty of perjury that the objector is a member

of one or more of the Settlement Classes;


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(d) A written statement detailing each objection, the facts supporting them, the legal

basis on which they are based, and the relief requested;

(e) A written statement detailing whether he or she intends to appear at the Final

Approval Hearing, either with or without counsel;

(f) A list of witnesses the objector may call to testify at the Final Approval Hearing;

and

(g) Copies of any exhibits the objector may offer into evidence at the Final Approval

Hearing.

15. Any objections must be appropriately filed with the Court no later than the Opt-

Out And Objection Deadline, or alternatively they must be mailed to the Court at the address

below and postmarked no later than the Opt-Out And Objection Deadline.

Clerk of Court

United States District Court for the Northern District of Illinois

219 South Dearborn Street


Attention: “West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569”

A copy of the objection, postmarked no later than the Opt-Out And Objection Deadline, must

also be mailed to the Settlement Administrator at the post office box described in Paragraph 22.

16. No person shall be heard and no paper or brief submitted by any objector shall be

received or considered by the Court unless such person has filed with the Clerk of Court and

timely mailed to the Settlement Administrator, as provided above, the concise written statement

of objections as described above, together with copies of any supporting materials, papers or

briefs. Any Settlement Class Member who does not file a written objection in the time and

manner described above shall be: (a) deemed to have waived and forfeited any objections to the

proposed Settlement; (b) foreclosed from raising any objection to the proposed Settlement at the


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Final Approval Hearing; (c) bound by all of the terms of the Agreement and by all proceedings,

orders and judgments by the Court; and (d) foreclosed from seeking any adjudication or review

of the Settlement by appeal or otherwise.

17. The Court, within its discretion and at the request of Class Counsel or

Defendants’ Counsel, may order the deposition of any Settlement Class Member who objects to

the fairness, reasonableness or adequacy of the Agreement or the proposed Settlement (or any

witness identified in the written objection or notice of appearance) prior to the Final Approval

Hearing. If the objecting Settlement Class Member fails to appear for any such deposition

ordered by the Court, the objection will not be considered by the Court. If any witness fails to

appear for deposition, that witness’s testimony will not be considered by the Court. Any

Settlement Class Member who fails to comply with the orders of the Court or the provisions of

the Agreement regarding objections shall waive and forfeit any and all rights he or she may have

to appear separately and/or object, and shall be bound by all the terms of the Agreement and by

all proceedings, orders, and judgments in this Litigation.

18. Any objecting Settlement Class Member who intends to appear at the Final

Approval Hearing, either with or without counsel, must also file a notice of intention to appear

with the Court postmarked no later than the Opt-Out And Objection Deadline, which notice shall

be filed with, or mailed to, the Clerk of the Court, with a copy to the Settlement Administrator,

as set forth above.

(a) If the objecting Settlement Class Member intends to appear at the Final Approval

Hearing through counsel, he or she must also identify any attorney(s) representing

the objector who will appear at the Final Approval Hearing and include the

attorney’s name, address, phone number, e-mail address, state bar(s) to which


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counsel is admitted and a list identifying all objections such counsel has filed to

class action settlements from January 1, 2013 to the present, the results of each

objection, including any Court opinions ruling on the objections, and any

sanctions by a Court in connection with filing an objection. Any attorney hired by

a Settlement Class Member for the purpose of objecting to the Agreement or to

the proposed Settlement or to the attorneys’ fees and expenses will be at the

Settlement Class Member’s own expense.

(b) If the objecting Settlement Class Member intends to request the Court allow the

Class Member to call witnesses at the Final Approval Hearing, the objecting Class

Member must provide a list of any such witnesses together with a brief summary

of each witness’s expected testimony no later than the Opt-Out And Objection

Deadline. If a witness is not identified in the notice of appearance, such witness

shall not be permitted to object or appear at the Final Approval Hearing.

19. If any objection is deemed frivolous, the Court may award appropriate costs and

fees to Class Counsel and/or Defendants’ Counsel.

20. No payments shall be made from the Settlement Fund for the purpose of

withdrawing a person’s objection to the Settlement without prior Court approval.

21. Any Settlement Class Member who wishes to receive benefits under the

Agreement must not exclude himself or herself from the Settlement.

22. The Settlement Administrator will establish a post office box to be used for

receiving requests for exclusion or objections and any other communications relating to this

Settlement.


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23. The Court preliminarily enjoins all members of the Settlement Classes unless and

until they have timely excluded themselves from the Settlement from: (a) filing, commencing,

prosecuting, intervening in or participating as plaintiff, claimant or class member in any other

lawsuit or administrative, regulatory, arbitration or other proceeding in any jurisdiction based on,

relating to or arising out of the claims and causes of action or the facts and circumstances giving

rise to the Litigation and/or the Released Claims; (b) filing, commencing or prosecuting a lawsuit

or administrative, regulatory, arbitration or other proceeding as a class action on behalf of any

members of the Settlement Classes who have not timely excluded themselves (including by

seeking to amend a pending complaint to include class allegations or seeking class certification

in a pending action), based on, relating to or arising out of the claims and causes of action or the

facts and circumstances giving rise to the Litigation or the Released Claims; and (c) attempting

to effect opt-outs of a class of individuals in any lawsuit or administrative, regulatory, arbitration

or other proceeding based on, relating to or arising out of the claims and causes of action or the

facts and circumstances giving rise to the Litigation or the Released Claims. This Agreement is

not intended to prevent Settlement Class Members from participating in any action or

investigation initiated by a state or federal agency.

24. A hearing to determine (a) whether the Settlement Class should be finally

certified pursuant to Rule 23 of the Federal Rules of Civil Procedure, and (b) whether the

proposed Settlement is fair, reasonable and adequate (the “Final Approval Hearing”), shall be

conducted in the United States Courthouse, United States District Court for the Northern District

of Illinois, Eastern Division, Everett McKinley Dirksen United States Courthouse, 219 South

Dearborn Street, Chicago, Illinois, 60604, Courtroom 1903, commencing on __________, 2018,

at _________.


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25. The Court may reschedule the Final Approval Hearing without further written

notice. If the Final Approval Hearing is rescheduled from the currently scheduled date,

information regarding a rescheduled Final Approval Hearing will be posted on the Court’s

docket.

26. Papers in support of the final approval of the Settlement shall be filed with the

Court no later than seven (7) days before the Final Approval Hearing, and shall include: (a)

responses to objections; (b) a declaration from the Settlement Administrator attesting to

completion of Notice and the number and identity of Settlement Class Members who filed

requests to be excluded from the Settlement and objections to the Settlement.

27. An application of Class Counsel for an award of fees, expenses, and Plaintiffs’

incentive awards shall be filed with the Court no later than fourteen (14) days before the Opt-Out

And Objection Deadline.

28. All discovery and other pre-trial proceedings in this Litigation are stayed and

suspended pending the Final Approval Hearing, except such actions as may be necessary to

implement the Agreement and this Order.

29. Defendants shall file proof of compliance with the notice requirements of The

Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §1715(b), no later than seven (7) days

before the Final Approval Hearing. The Court finds that Defendants may satisfy the notice

requirements of CAFA by delivering an appropriate notice of this Settlement to the United States

Attorney General and the Attorneys General of the 50 states.

30. This Order shall become null and void, and shall be without prejudice to the rights

of the Parties, all of whom shall be restored to their respective positions existing immediately

before this Court entered this Order, if: (a) the proposed Settlement is not finally approved by the


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Court, or does not become Final, pursuant to the terms of the Agreement; or (b) the proposed

Settlement is terminated in accordance with the Agreement or does not become effective as

required by the terms of the Agreement for any other reason. In any such event, the proposed

Settlement and Agreement shall become null and void and be of no further force and effect, and

neither the Agreement nor the Court’s orders, including this Order, shall be used or referred to

for any purpose whatsoever.

31. Neither the Agreement, nor any of its terms or provisions, nor any of its exhibits,

nor any of the negotiations or proceedings connected with it, nor this Order shall be construed as

an admission or concession by any Defendant of the truth of any of the allegations in the

Litigation, or of any liability, fault, or wrongdoing of any kind, or of the appropriateness of the

certification of the Settlement Class for purposes other than for settlement. This Order shall not

be construed or used as an admission, concession or declaration by or against any of the

Released Parties of any fault, wrongdoing, breach, or liability.

32. The terms and provisions of the Agreement may be amended by agreement of the

Parties in writing and approval of the Court without further notice to the Settlement Class, if

such changes are consistent with this Order and do not limit the rights of the Settlement Class.

IT IS SO ORDERED:

November ______, 2017

The Honorable Samuel Der-Yeghiayan,

United States District Court Judge,

Northern District Of Illinois, Eastern Division


Exhibit 2




EASTERN DIVISION






Plaintiffs,

v.




Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 1:15-cv-05569


DECLARATION OF TODD L. MCLAWHORN

I, Todd L. McLawhorn, declare:

1. I am over the age of eighteen and am fully competent to make this declaration. I

make this declaration based upon personal knowledge unless otherwise indicated.

2. I am admitted to practice in the State of Illinois and in the United States District

Court for the Northern District of Illinois, the Seventh Circuit Court of Appeals, and other

federal district courts. I am one of the attorneys for Plaintiffs Cynthia West, Kristine Hollander,

Jennifer Zimmerman, Mary Roman, Marie Esposito, and Michelle Ballon (“Plaintiffs”) and lead

counsel for the Settlement Classes herein. I make this declaration in support of Plaintiffs’ Motion

For Preliminary Approval Of Class Action Settlement (the “Motion”). If called as a witness, I

would and could testify to the following:

3. I am a partner of the law firm Siprut PC (herein “Siprut PC” or “Class Counsel”).

I have personally been involved in the entirety of the prosecution of this class action lawsuit (the

“Litigation”).


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4. On June 23, 2015, Plaintiffs West and Hollander brought a putative class action

against Act II Jewelry, LLC (“Act II”), Kiam Equities Corporation (“Kiam Equities”), Victor K.

Kiam, III (“Victor Kiam”), and Elena Kiam, alleging causes of action of breach of contract,

violation of the Illinois Consumer Fraud Act (“ICFA”), common law fraud, and unjust

enrichment against these Defendants for purportedly revoking the lifetime warranties on their

jewelry, and for purportedly making material misrepresentations or omissions to its sales

advisors by inducing them to continue working as sales advisors (which included the sales

advisors’ purchase of supplies and jewelry from the Defendants), even though the Defendants

knew the sales advisors would not be able to recoup those expenditures because Defendants had

planned to close the business at least six months prior to making the announcement. (Dkt. No. 1.)

5. On October 19, 2015, the Parties held a mediation with Retired District Judge

James F. Holderman. Prior to the mediation, the Parties engaged in limited discovery and

exchanged written mediation statements summarizing their respective positions concerning the

factual and legal issues in the Litigation. This mediation did not result in settlement.

6. Following the mediation, on November 24, 2015, the Defendants filed their

Answer to Plaintiffs’ complaint, denying all liability. (Dkt. No. 34.) On the same day, the

Defendants also moved to dismiss the complaint on multiple grounds. (Dkt. No. 35.) On March

18, 2016, the Court denied in part, and granted in part, the Defendants’ motion, dismissing Kiam

Equities, Victor Kiam, and Elena Kiam from the litigation. (Dkt. No. 58.)

7. Between April 2016 and April 2017, the Parties engaged in multiple rounds of

extensive written and electronic discovery. During discovery, the Parties: (a) reviewed

approximately 12,267 pages of documents produced by Plaintiffs; (b) reviewed approximately

20,111 pages of documents produced by Act II; (c) reviewed approximately 345 pages of


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documents produced by Victor Kiam; (d) reviewed approximately 6 pages of documents

produced by Kiam Equities; (e) reviewed approximately 203 pages of documents produced by

Elena Kiam; (f) reviewed approximately 963 pages of documents produced by additional third

parties in addition to computer media provided by those third parties; (g) prepared for the taking

and/or defending of approximately ten fact witnesses from Act II and various third-parties; and

(h) prepared for the taking and/or defending of the depositions of the six Class Representatives.

8. While discovery was ongoing, on November 30, 2016, Plaintiffs filed their First

Amended Class Action Complaint (the “First Amended Complaint”), alleging claims for breach

of contract, violation of the ICFA, fraud and unjust enrichment. (Dkt. No. 75.) Plaintiffs West

and Hollander, now joined by Plaintiffs Zimmerman, Roman, Esposito, and Ballon, sought to

represent three classes: (a) all individuals who purchased jewelry from Act II; (b) all individuals

who sold jewelry for Act II; and (c) all individuals who joined Act II as sales advisors in 2014

and who purchased initial starter kits after May 31, 2014. (Id. at ¶¶130-132.) Due to evidence

uncovered during discovery, Plaintiffs’ First Amended Complaint also re-added Victor Kiam as

co-Defendant. (Dkt. No. 75.) On December 20, 2016, Defendants filed their Answer to

Plaintiffs’ First Amended Complaint and denied all liability. (Dkt. No. 77.)

9. Following the filing of the First Amended Complaint, the Parties continued to

engage in discovery. In the spring of 2017, Defendants deposed three of the Class

Representatives.

10. Following those depositions, the Parties engaged in settlement discussions and

took part in three separate, extensive mediations over the course of approximately four months.

On July 17, 2017, the Parties held a mediation before Judge Holderman (the fourth mediation in


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the Litigation), during which the Parties agreed to a settlement in principal. A Settlement Term

Sheet was subsequently executed on August 1, 2017.

11. During August and September 2017, the Parties worked extensively with the

proposed Settlement Administrator, Heffler Claims Group LLC, to analyze Act II’s records in

order to: (a) finalize the terms of the settlement; and (b) structure a notice plan consistent with

Fed. R. Civ. P. 23(c)(2)(B). In September 2017, after several exchanges of drafts and edits, and

numerous conference calls, the Parties agreed to the form and content of the settlement.

12. After analyzing Act II’s records, based on the Class definitions proposed in the

Settlement Agreement and in Plaintiffs’ Motion, Class Counsel estimates that there are

approximately 4.0 million individuals in the Customer Class, 19,069 individuals in the Sales

Advisor Class, and 2,709 individuals in the New Sales Advisor Class.

13. The benefit obtained for the Settlement Classes is $6,700,000 cash, minus the

costs of settlement administration, Class Counsel’s proposed attorneys’ fees, and Plaintiffs’

incentive awards.

14. Plaintiffs have contributed substantially to this litigation and have invested

considerable time, at their own expense, to do so. Plaintiffs aided Class Counsel’s investigation

of the claims and made significant contributions during discovery, including producing

approximately 12,267 pages of documentation. In addition, Plaintiffs Hollander, West, and

Zimmerman were deposed by Defendants.

15. I have substantial experience in complex business litigation and class actions. My

Firm, Siprut PC, substantially concentrates its practice in the prosecution of class actions. My

Firm’s resume is attached as Exhibit A hereto.


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16. Throughout this litigation, my Firm has diligently prosecuted this matter,

dedicating substantial resources to the investigation and litigation of the claims at issue, and has

successfully negotiated the settlement of this matter to the benefit of the proposed Classes.

Neither my firm nor the Plaintiffs have any interests antagonistic to the interests of the other

Class members.

17. Plaintiffs and Class Counsel believe that the claims asserted against Defendants in

this Litigation have merit. However, Plaintiffs and Class Counsel recognize and acknowledge the

expense and length of continued proceedings necessary to prosecute the litigation against

Defendants through trial and appeals. Plaintiffs and Class Counsel have also taken into account

the uncertainty and risk of any litigation, especially in complex actions such as this Litigation, as

well as the difficulties and delays inherent in such litigation. This Litigation involves complex

class issues, which would involve protracted and risky litigation if not settled, especially given

the fact that Act II has closed. Moreover, in the event of any judgment against Defendants, an

appeal could postpone any recovery for several years.

18. Accordingly, Plaintiffs and Class Counsel believe that there is substantial benefit

to the Classes of receiving a cash award from Defendants.

19. The Settlement Agreement, and the terms thereof, was reached after rigorous

advocacy and extensive negotiations, in which I directly participated. Plaintiffs and Class

Counsel believe that the terms set forth in the Settlement Agreement confer substantial benefits

upon the proposed Classes, and is a fair, reasonable, and adequate resolution of the Class’ claims

against Defendants. As such, the Settlement is entitled to a good-faith determination and I

respectfully submit that this Court should enter the proposed Preliminary Approval Order and,

ultimately, the Final Order and Judgment, approving this proposed Settlement in all respects.


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I declare under penalty of perjury under the laws of the State of Illinois that the foregoing

is true and correct.

Executed on November 21, 2017 at Chicago, Illinois.

s/ Todd L. McLawhorn


Exhibit A


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SIPRUT PC FIRM RESUME

Siprut PC is a commercial litigation firm based in Chicago, with additional offices in San

Diego, Boston, and Colorado Springs. The firm focuses its practice exclusively on complex

litigation and pre-litigation counseling, encompassing a wide variety of areas and issues. The

firm’s primary litigation groups include plaintiffs’ class action litigation (with an emphasis on

consumer law issues); qui tam and whistleblower litigation; intellectual property and patent

litigation; and business litigation.

Siprut PC and its attorneys have repeatedly been appointed as lead counsel in federal and

state class action lawsuits across the country, and have recovered hundreds of millions of dollars

for its clients. The firm has been prominently featured in the mainstream media for its successes

and advocacy on behalf of consumers nationwide, and our attorneys are frequently invited to

speak at seminars on consumer protection and class action issues.

CLASS ACTION AND CONSUMER LITIGATION

Siprut PC is an established leader in the class action arena. The firm has been recognized

for its “high-stakes, high-profile cases against large defendants.” Siprut PC was named to the

National Law Journal “Hot List” of Plaintiffs’ law firms in 2016, one of only 12 law firms in the

United States to receive this distinction.

As federal courts have further recognized in appointing the firm and its attorneys as lead

counsel in some of the most prominent class cases in the country, Siprut PC has “substantial

class action experience [and has served] as lead counsel” in myriad class litigation. In re

National Collegiate Athletic Association Student-Athlete Concussion Injury Litigation, Case No.

MDL 13-cv-9116 (N.D. IL). The firm’s recent settlements and leadership appointments include

the following:

Jones v. Wal-Mart Stores, Inc. et al. (Case No. 14-cv-06305-LDW-ARL, E.D.N.Y.):

Appointed co-lead counsel in nationwide class action relating to millions of

contaminated baby wipes manufactured by Nutek and sold to consumers nationwide.

Motion for preliminary approval of class-wide settlement granted.

Korolshteyn v. Costco Wholesale Corporation (Case No. 3:15-cv-00709, S.D. CA):

Appointed co-lead counsel in nationwide class action relating to Costco’s ginko

biloba supplements.

Mullins v. Direct Digital LLC (Case No. 15-1776, N.D. IL): Appointed co-lead

counsel in nationwide class action relating to Direct Digital's Instaflex joint health

supplements. $4.5 Million cash settlement granted final approval.

Mednick v. Precor Inc. (Case No. 1:14-cv-03624, N.D. IL): Appointed co-lead

counsel in nationwide class action against Precor relating to Precor treadmills

purporting to measure heart rate.


http://www.siprut.com/aop_classactions.html

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Douglas v. Western Union Company (Case No. 14-cv-01741, N.D. IL): Appointed

lead counsel in nationwide class action asserting claims under the Telephone

Consumer Protection Act. Motion for preliminary approval of $8.5 Million cash

settlement granted.

Chimeno-Buzzi v. Hollister Co. et al. (Case No. 14-cv-23120-MGC, S.D. FL.):

Appointed co-lead counsel in nationwide class action asserting claims under the

Telephone Consumer Protection Act. $10 Million cash settlement granted final

approval.

In re Southwest Airlines Voucher Litigation (Case No. 11-cv-8176, N.D. IL):

Appointed lead counsel in nationwide class action relating to Southwest’s unilateral

cancellation of drink vouchers paid for by business select travelers. Settlement valued

at $29 Million granted final approval, and then affirmed by the Seventh Circuit on

appeal.

In re Energizer Sunscreen Litigation, (Case No. 13-cv-00131, N.D. IL): Appointed

lead counsel in nationwide class action relating to defective sunscreen nozzles

manufactured by Energizer. Settlement valued up to $200 Million granted final

approval.

In re National Collegiate Athletic Association Student-Athlete Concussion Injury

Litigation (Case No. MDL 13-cv-9116, N.D. IL): Appointed co-lead counsel in

consolidated MDL litigation against the NCAA on behalf of current and former

collegiate athletes related to concussions and head injuries. Landmark settlement of

$75 million cash and injunctive relief granted preliminary approval.

Illinois Nut & Candy Home of Fantasia Confections, LLC v. Grubhub, Inc., et al.

(Case No. 14-cv-00949, N.D. IL): Appointed lead counsel in nationwide class action

relating to unsolicited facsimile transmissions by Grubhub, in violation of the

Telephone Consumer Protection Act. Settlement of $2 million granted final approval.

Padilla v. DISH Network LLC (Case No. 12-cv-07350, N.D. IL): Appointed lead

counsel in nationwide class action relating to statutory violations of the Satellite

Home Viewer Extension and Reauthorization Act of 2004 (“SHVERA”). Landmark

settlement providing class-wide injunctive relief – the first class settlement under

SHVERA ever – granted final approval.

Knoch v. Intuit., Inc. (Case No. 15-cv-03650, N.D. Cal.): Appointed to Executive

Committee of consolidated data breach class litigation against Intuit.

Lewert v. P.F. Chang’s China Bistro (Case No. 14-cv-04787, N.D. IL): Appointed

co-lead counsel in nationwide class action relating to a security breach exposing the

personal information of hundreds of thousands of consumers nationwide.


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WHISTLEBLOWER AND FALSE CLAIMS ACT LITIGATION

Siprut PC attorneys have led litigation resulting in settlements in excess of $100 million,

and we are actively prosecuting numerous False Claims Act lawsuits:

U.S. ex rel. Robinson v. Northrop-Grumman Corp. (Case No. 89-cv-6111, N.D. IL):

Qui tam action brought against Northrop-Grumman for fraud in connection with the

B-1 bomber, the B-2 “Stealth” bomber, and the F-15 fighter. Sixteen years after the

case was filed, it was settled prior to trial for a total recovery of $135 million.

U. S. ex rel. Morgan v. Bank of America, et al., Case No. 16-CV-3425, N.D. IL):

Currently pending, the suit alleges mortgage fraud by the four largest financial

institutions which service mortgages – Bank of America, Citibank, Wells Fargo, and

JP Morgan – and billions of dollars in damages.

U.S. ex rel. Solomon v. Lockheed Martin Corp. (Case No. 3:12-DV-4495-D, N.D.

TX): Currently pending, the case seeks more than $100 million in damages for fraud

in connection with the F-35 Joint Strike Fighter, the most expensive weapons

program ever.

U.S. ex rel. Kotwica v. Roundy’s, et al. (Case No. 15 C 5168, N.D. IL): Currently

pending on behalf of the federal government and the States of Illinois, Minnesota, and

Wisconsin, the suit alleges that Roundy’s operated an illegal coupon kickback

scheme.

BUSINESS LITIGATION __________________

Siprut PC attorneys have substantial experience with emergency injunctive relief

proceedings (representing both plaintiffs and defendants), restrictive covenant litigation, and

large commercial contract disputes. Firm partners have contributed to the following matters:

NewSub Magazine Servs. LLC v Heartland Direct, Inc. (Case No. 02-C-4949, N.D.

IL): Pierced an entity's corporate veil to obtain a seven figure judgment against

related corporations and individuals.

In re Estate of Edith-Marie Appleton (Case No. 00-P-103, Cook County, IL):

Successfully defended an estate, throughout a three-week jury trial, from a claim

brought by Florida State University involving a $2,000,001 alleged charitable

pledge.

Edison Mission Energy v Mirant Corp (Case No. 02-CC-0059, Orange County,

CA.): Defended and settled $750 million breach of contract case involving the

purchase of a foreign power facility.


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Johnson v. Sample & Cross Capital Mgmt. (Case No. 07-L-929, Lake County, IL):

Secured dismissal with prejudice of counts brought against a hedge fund by eleven

investors in three separate actions.

American Insurance v. Ingram (Cook Co., IL): Obtained preliminary and permanent

injunctions against former employee who opened competing business and used

previous employer’s confidential information.

Veal v. James and 7-Eleven (Cook Co., IL): Obtained judgment following bench

trial in favor of employee accused of wrongful conduct.

Des Plaines Office Equipment Co. v. Nicolin et al. (Cook Co. IL): Represented

hiring company and former employee in lawsuit brought by prior employer to enjoin

employee from working. Successfully opposed motions for TRO, preliminary and

permanent injunctions.

In re Confidential Arbitration (JAMS Chicago, IL): Following week-long trial

before retired federal judge, successfully defended breach of fiduciary duty and

shareholder dilution claims in excess of $7 million.

In re Confidential Arbitration (AAA St. Louis, MO): Following trial before a three-

member arbitration panel, recently obtained a $1.7 million award, including recovery

of all attorneys' fees and costs. Claims arose from purchase of multiple nursing home

facilities.

Delaware Superior Court and Illinois Chancery Court Litigation. Defended

industrial equipment company in case brought by hedge fund investor

concerning hedge fund's investment in $75 million secured lending loan facility.

Trilegiant v. Sitel Corporation (S.D.N.Y.). Represented Trilegiant in breach of

contract action seeking $34 million in liquidated damages from vendor.

Confidential purchase price adjustment arbitration (AAA Chicago). Represented

plastics manufacturer in arbitration. The Panel found in Client’s favor on claims for

breach of asset purchase agreement entered into as part of reverse spin-off

transaction and public offering.

Advertising Arbitration (AAA Chicago). Arbitrated dispute on behalf of

professional sports team relating to advertising sales and contracts; obtained

favorable result.

Confidential arbitration for aviation company (ICC Chicago). Represented aviation

manufacturer in contract dispute arising from purchase of company. Following

evidentiary hearings, obtained arbitration award in favor of client.


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ANTITRUST, UNFAIR COMPETITION, AND RICO LITIGATION

Siprut PC attorneys have substantial experience handling antitrust and unfair competition

litigation, including RICO claims, against some of the largest corporations in the world.

Representative litigation includes:

Woolsey v. JP Morgan Chase & Co. (S.D. Cal.): Represented putative class alleging

JP Morgan Chase manipulated the price for electricity within the California

electricity market through a series of deceptive bidding strategies, resulting in higher

prices to consumers.

In re Sulfuric Acid (N.D. IL): Represented sulfuric acid manufacturer in putative

nationwide class action pending in federal court in Chicago and indirect purchaser

class action pending in California state court. Plaintiff alleged industry-wide scheme

to constrain the supply and inflate the price of sulfuric acid. After eight years of

litigation, obtained summary judgment on all direct purchaser claims, which was

subsequently affirmed by the Seventh Circuit.

In re Credit Swaps Default Litigation (N.D. IL): Represented financial services

company in putative class action alleging defendants conspired to restrict

competition in the market for credit default swaps by monopolizing the sell-side of

the CDS market and thereby maintaining anti-competitively wide bid-ask spreads.

Rasterex Holdings v Research in Motion, et al (Fulton Co., GA): Represented RIM

and co-defendants in trade secret dispute. Plaintiff alleged RIM misappropriated

trade secrets and incorporated them into RIM’s Blackberry handheld device.

Following summary judgment motions, obtained settlement on eve of trial.

Safelite Glass Corp. (E.D. TX): Obtained summary judgment on behalf of all

defendants, and then won affirmance by U.S. Court of Appeals for the Fifth Circuit,

defeating all claims in Stewart Glass & Mirror, Inc. v. USA GLAS Corp., a suit by

Texas plaintiffs against national corporate competitors asserting conspiracy and

monopolization in violation of federal antitrust laws.

CIVIL RIGHTS AND CONSTITUTIONAL CLAIMS

Siprut PC attorneys have handled landmark, high-impact civil rights and constitutional

claims against municipalities, state and government entities, and corporate employers.

Representative litigation includes:

Doe II and Doe III , Does IV-VIII (N.D. IL): Representing female victims of sexual

assault for claims of civil rights and equal protection violations against The City of

Harvey.

Green v. Village of Winnetka (Cook Co. IL): Representing putative class of

Winnetka property owners who allege Village is violating the Illinois constitution by


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charging utility fees to fund a $42 million stormwater project that includes an eight

mile tunnel to Lake Michigan.

People Who Care v. Rockford Board of Education (Case No. 89-cv-20168, N.D. IL)

Represented African American and Hispanic students in desegregation and

educational equity class action lawsuit against one of the largest school districts in

Illinois. Proved liability across most areas of school operations, including special

education, school building conditions, transportation, and student assignment.

Secured multi-year, comprehensive court-ordered remedies. Represented plaintiffs

throughout 10 years of remedies implementation.

Johnson v. Board of Education of Champaign Unit School District (Case No. 00-cv-

1349, C.D. IL) Represented African American and Hispanic students in race

discrimination and desegregation class action lawsuit. Secured comprehensive

settlement affecting many areas of school district operations, including climate and

discipline, upper level courses, student assignment, special education, and gifted

programs. Represented plaintiff class throughout seven years of settlement

monitoring.

McFadden v. Board. of Education School District U-46 (Case No. 05-cv-0760, N.D.

IL) Represented minority students in educational equity suit against second largest

school district in Illinois. Defendant found liable for intentionally segregating

Hispanic students into separate gifted program.

Ramirez v. Ceisel Masonry (N.D. IL): Represented Hispanic laborers who alleged

they were being discriminated against on the job because of their race. Obtained

favorable settlement on behalf of all plaintiffs.

PATENT LITIGATION ________________________

Siprut PC and its attorneys have successfully represented public companies, mid-size

businesses, small companies, and individuals in their patent disputes all over the United States.

We have litigated cases in a variety of technological fields, including the life sciences (DNA

amplification, screening, and sequencing), computer science (cloud computing, optical character

recognition, and genome sequencing), and orthopedic fields (dental and hip implants). Siprut PC

has recovered millions of dollars for our clients against some of the largest and most aggressive

companies in the country.


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ATTORNEYS

JOSEPH SIPRUT is the founder and managing partner of Siprut PC. He has repeatedly

been named a “Super Lawyer” and “Leading Lawyer” in Illinois for Class Action Litigation, was

named to America’s Top 100 Attorneys, was named one of the “Top 100” in the country by the

National Trial Lawyers Association, and holds an AV Preeminent rating by Martindale Hubble,

the highest possible peer review rating. He has been called a “fearless game-changer in class

actions” by the Chicago Daily Law Bulletin. Mr. Siprut was previously named one of the Top 40

attorneys in Illinois under the age of 40, and was also named one of the “Top 40 Under 40” in

the country by the National Trial Lawyers Association. Mr. Siprut was also selected for

membership in the Multi-Million Dollar Advocates forum, one of the most prestigious groups of

trial lawyers in the United States. Membership is limited to attorneys who have won million and

multi-million dollar verdicts and settlements, and fewer than 1% of U.S. lawyers are members.

Mr. Siprut has appeared in dozens of publications and television and radio broadcasts

worldwide, including CBS Radio, NPR, ESPN, Bloomberg Law, Law360, the Chicago Tribune,

and more. He has been deemed by the media as the “Friend of the Frequent Fliers” for his

successful litigation crusades against the airline industry on behalf of airline customers, as well

as a “Leading Sports Reformer” for his advocacy to combat the problem of concussions and head

injuries in college sports.

Mr. Siprut frequently speaks at national class action and consumer litigation seminars. He

has substantial first-chair trial experience, and previously served as an Adjunct Professor at

Northwestern University School of Law in the Trial Advocacy program. He is also a frequent

author and speaker, having published over 25 articles in the nation's leading law reviews and

legal journals on topics including the right of privacy, copyright litigation, and contract doctrine,

as well as litigation strategy and tactics. He was appointed as a member of the Illinois ARDC

Hearing Board, and is also a member of the Advisory Board for the Fair Contracts Project, an

initiative focused on counteracting the implications of fine print in standard form consumer

contracts.

Mr. Siprut is a graduate of Northwestern University School of Law, where he served as

the Managing Editor of the Northwestern Law Review and was selected to represent

Northwestern in national competition as a member of its National Moot Court team. He was also

awarded the Institute for Humane Studies Fellowship, a national fellowship competition for law

and graduate study.

Prior to founding Siprut PC, Mr. Siprut spent his career practicing at some of the top

corporate litigation firms in the country. Mr. Siprut has been recognized by the Law in Public

Service Committee of the ABA for his dedication to pro bono work. He is admitted to practice in

Illinois, the United States District Court for the Northern District of Illinois (including its Trial

Bar), the Seventh Circuit Court of Appeals, the Eleventh Circuit Court of Appeals, and the

United States Supreme Court. For over five years, Mr. Siprut served as an arbitrator in the Cook

County Arbitration Program.

* * *


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TODD MCLAWHORN is a partner at Siprut PC. He has over twenty years of commercial

litigation trial experience, most of that with three of the country's largest law firms. He has tried

cases and appeared before courts in a variety of jurisdictions, literally spanning the country from

coast to coast. Mr. McLawhorn has significant experience with complex business litigation,

including matters involving contracts, consumer fraud allegations, shareholder disputes and

valuations, commercial real estate, trade secret issues, deceptive trade practices claims, antitrust

issues, and merger and acquisition issues. He has represented assorted clients in a wide array

of industries, including those in the financial services, banking, health care, computer hardware

and software, membership services, manufacturing and professional sports fields. In addition,

Mr. McLawhorn has devoted a substantial portion of his practice to class action litigation,

particularly with respect to antitrust and consumer fraud claims.

Mr. McLawhorn recently received an AV Preeminent Rating, the highest possible rating,

in the Martindale-Hubbell Peer Review Ratings Program. Mr. McLawhorn was previously

recognized by The Chicago Law Bulletin and The Chicago Lawyer as one of the Top 40 lawyers

under 40 in Illinois. He has contributed to several publications, most recently as a Contributor to

the World Banks Group Doing Business 2015, and to various bar association publications. He

has also provided significant pro bono representation, including assisting individuals who flee

their home countries and seek political asylum in the United States, and helping individuals

involved in the Illinois Chancery Court's Foreclosure Mediation Program, in an effort to help

homeowners who are in foreclosure retain their homes.

In addition to being admitted to practice in New York and Illinois, Mr. McLawhorn is

also admitted to practice before the United States Courts of Appeals for the Seventh Circuit,

Federal Circuit, Fifth Circuit, and Eleventh Circuit, as well as the United States District Courts

for the Northern District of Illinois (Trial Bar), Southern District of Illinois, Central District of

Illinois, Southern District of New York, Eastern District of Michigan, Eastern District of

Wisconsin, and Western District of Wisconsin. He is also a member of the American Bar

Association, and is part of the Antitrust, Business Law, and Litigation Sections. As part of the

Litigation Section, he is also a member of the Class Action and Derivatives Suit Committee, the

Commercial and Business Litigation Committee, and the Intellectual Property Committee. Closer

to home, Mr. McLawhorn is a longtime member of the Chicago Bar Association and the Illinois

State Bar Association. In connection with the Chicago Bar Association, he is a member of the

Antitrust, Class Action, and Consumer Law Committees.

Mr. McLawhorn received his law degree, with honors, from the University of North

Carolina at Chapel HIL At the University of North Carolina, he was on both Law Review and

the Holderness Moot Court Bench. Prior to attending law school, Mr. McLawhorn graduated

from East Carolina University, magna cum laude, in three years with a Bachelor of Arts in

Psychology. In 2011 Mr. McLawhorn was elected to the District 101 Board of Education, and

serves on the Building, Finance, and Legislative Committees. He is a former President and

Board Member of the Village Club of Western Springs, a social and service organization. He is

also actively involved in coaching and supporting his children's sports teams, and has served on

various boards in connection with those activities.

* * *


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RICHARD L. MILLER II is a partner at Siprut PC. Richard was previously in-house

counsel at a private equity firm and, before that, a partner at Novack and Macey LLP, where he

specialized in commercial litigation. While there, Richard advised clients and litigated disputes

involving real estate, insurance coverage, creditors’ rights, products liability, licenses, trademark,

employment contract and corporate veil piercing claims, among others.

Richard is an Adjunct Professor at Northwestern University School of Law where he has

served as a Trial Advocacy instructor since 2005 and Advanced Trial Advocacy instructor since

2013. He has been an American Arbitration Association arbitrator since 2010 and, prior to that,

was an arbitrator for the Cook County Mandatory Arbitration Program for two years.

Richard served as a prosecutor for Champaign County, Illinois for two years. He litigated

approximately 50 jury trials, as well as innumerable bench trials. He prosecuted four murder

cases, two of which went to trial, resulting in sentences of 45 and 55 years.

Richard was named one of the “40 Illinois Attorneys Under 40 To Watch” and a

“Leading Lawyer” by the Law Bulletin Publishing Company, publishers of the Chicago Lawyer

and Chicago Daily Law Bulletin. Chicago Magazine has repeatedly recognized Richard as a

"Super Lawyer," “Rising Star” and one of the Top Young Commercial Litigation Attorneys in

Illinois.

Richard has published articles appearing in the Illinois Bar Journal on Class Actions,

Expert Testimony, Emergency Temporary Restraining Orders, The Wage Payment Act, and

Spoliation Claims. He has also served as an author for the Illinois Institute of Continuing Legal

Education (IICLE) for many years, authoring guides for practitioners on: Pleading Under the

Federal Rules, Federal Motion Practice, Deposition Taking, Preparing for Trial, and Preserving

the Record During Trial. Richard has lectured at webinars for ICLE on Motion Practice,

Negotiating Settlements and Cross Examinations, as well as for the Chicago Bar Association on

Class Actions.

Richard served as the President of the University of Illinois College of Law Alumni

Board. He is a member of the Illinois State Bar Association, the American Bar Association, the

Chicago Bar Association and the University Club of Chicago.

* * *

BRUCE HOWARD is a partner at Siprut PC. He was named National Trial Lawyer of the

Year Finalist by the Trial Lawyers for Public Justice, and was named a “Super Lawyer” in

Illinois for Class Action Litigation, Securities Litigation, and ERISA Class Action Litigation. He

was also named as a one of the Top Attorneys in Illinois by Chicago Magazine.

Mr. Howard has over thirty years of commercial litigation trial experience. Mr. Howard

has significant experience with complex business litigation, including matters involving antitrust

issues, shareholder fraud and corporate derivative class action claims, ERISA class actions

claims, mass tort issues, trademark matters, deceptive trade practices issues, insurance defense

matters, actions under the Racketeer Influenced and Corrupt Organizations Act, issues arising

under the Anticybersquatting Consumer Protection Act, and whistle blower actions under the


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False Claims Act. He was also appointed as a Special Assistant Attorney General for the State of

Illinois for purposes of prosecuting eminent domain matters. In addition to having devoted a

substantial portion of his career to antitrust and securities fraud matters, for the last twenty years,

Mr. Howard has devoted a substantial portion of his practice to whistle blower actions for

Medicare, Medicaid, Homeland Security, and defense contractor fraud.

Mr. Howard’s notable cases include: Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., an

antitrust action in which he was involved in several Seventh Circuit appeals and litigation work-

up, resulting in a $77 million jury verdict; Morse v. Abbott Laboratories, Inc., a securities fraud

class action which resulted in a $15.3 million jury verdict; In re Chicago Flood Litigation, in

which he had a prominent role in the work-up of the case, which settled for more than $25

million; Tyco International, Inc., a consolidated securities fraud class action that was jointly

settled as part of a $3.2 billion global settlement – the third largest class action recovery ever;

Robinson v. Northrop Corporation, a whistle blower action which, after 16 years of litigation,

settled prior to trial for $134 million – the largest recovery in a False Claims Act case in this

region at the time.

Mr. Howard received his law degree from Washington & Lee University School of Law.

* * *

STEWART WELTMAN is Of Counsel at Siprut PC. Mr. Weltman has been a lead and trial

counsel in numerous complex litigation matters for both plaintiffs and defendants, ranging from

antitrust, accounting malpractice, legal malpractice, securities fraud, patent issues, contract

actions, and consumer fraud. In addition to his antitrust experience, Mr. Weltman also acted as

lead attorney or lead counsel in several securities fraud matters. He was the lead attorney for his

client Pacific Life Insurance Company in its individual action brought against various

underwriter defendants arising out of the WorldCom frauds. Prior to joining Siprut PC, Mr.

Siprut was a partner with a mid-sized firm in Chicago and an Antitrust and Securities litigation

partner with a Washington D.C.-based litigation boutique.

He is currently co-lead counsel in numerous consumer fraud class actions involving a

wide range of products ranging from glucosamine/chondroitin supplements, vitamin E

supplements, ginko biloba, homeopathic remedies, CoQ10 products, HGH secretalogues, and

other supplements.

* * *

MICHAEL BEHN is Of Counsel at Siprut PC. Mr. Behn is an experienced trial lawyer and

former federal prosecutor who specializes in the civil prosecution of fraud. He founded the

Chicago law firm Behn & Wyetzner, which for years was one of the premier False Claims Act

and whistleblower litigation boutiques in the United States. Mr. Behn primarily represents

citizens who have reported fraud against the government under the qui tam provisions of the

state and federal False Claims Acts.

Mr. Behn was named the first whistleblowers’ “Lawyer of the Year” by the nationwide

organization Taxpayers Against Fraud. The group commended Mr. Behn’s “tenacity,

management skills and dedication” in his representation of relators under the False Claims Act.


-11-

He has also been repeatedly recognized as both a “Super Lawyer” and a “Leading Lawyer” in

Illinois. In a profile of his practice, the Chicago Daily Law Reporter described Mr. Behn as

“exceptionally able to prosecute highly complex financial frauds,” and quoted one judge as

praising him for having “skills not common among litigators.”

Among his many successes, Mr. Behn represented the relator pharmacist in recovering

over $120 million in multi-state Medicaid fraud settlements of drug switching allegations against

Walgreens, CVS and Omnicare (the nation’s largest pharmacy serving nursing homes). In

another settlement handled by Mr. Behn, Northrop Grumman Corp. paid $134 million to resolve

a fraud case involving the B-2 “Stealth” bomber and other military programs. For that case, Mr.

Behn, with his colleagues, was nominated as “Trial Lawyer of the Year” by the Trial Lawyers

for Public Justice. Mr. Behn also served as relator’s counsel in case alleging that Johnson &

Johnson paid kickbacks to influence drug selections in nursing homes, which settled for $149

million.

Mr. Behn also has a record of achievements in prosecuting securities fraud. Recently, Mr.

Behn represented a billion-dollar pension fund and the class of investors in a securities fraud suit

involving the V-22 “Osprey” aircraft. That case was settled for $7 million. Other major cases

have included the felony conviction of the vice-chairman of a New York futures exchange, the

largest securities fraud settlement in Chicago history ($220 million), and a major securities fraud

case involving the merger of a telecommunications company ($239 million).

Mr. Behn is a recognized national expert on the False Claims Act. He has frequently

lectured on the False Claims Act and other topics to prosecutors, investigators, auditors and

others at the invitation of the U.S. Department of Defense, the U.S. Department of Health and

Human Services, the U.S Department of State, the U.S. Department of Justice, the Institute of

Internal Auditors, the Chicago Bar Association and many other groups. He has been quoted in

the New York Times, the Wall Street Journal, the Washington Post, the Chicago Tribune, the

Chicago Sun Times, and in other news media concerning his cases and the False Claims Act.

Before entering private practice, Mr. Behn served as a fraud prosecutor with the U.S.

Attorney’s Office for the Southern District of New York, as a Trial Attorney with the

Commodity Futures Trading Commission, and as a Judicial Clerk in the U.S. District Court for

the District of Vermont.

Mr. Behn holds a J.D. from Northeastern University School of Law (in Boston) and an

A.B. from Dartmouth College.

* * *

LINDA WYETZNER is Of Counsel at Siprut PC. She co-founded Behn & Wyetzner, one of

the premier False Claims Act and whistleblower litigation boutiques in the United States. She is

a seasoned trial lawyer and negotiator, currently specializing in representing citizens who have

reported fraud under the qui tam provisions of the federal and state False Claims Acts. Ms.

Wyetzner was a lead attorney in three groundbreaking pharmaceutical qui tam cases against

Omnicare, CVS and Walgreens. Ms. Wyetzner has substantial experience with false claims act


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cases involving fraud in a diverse range of fields including fraud in the pharmaceutical,

healthcare, telecommunications and defense contracting industries as well as NIH grant fraud.

Ms. Wyetzner also has over twenty years of experience representing employees in

disputes with their employers. As House Counsel to the Screen Actors Guild and the American

Federation of Television and Radio Artists in Chicago, Linda represented Chicago’s broadcast

journalists and disc jockeys in negotiating collective bargaining agreements and other litigation

matters involving major television networks and radio stations.

* * *

RICHARD WILSON is an attorney at Siprut PC. His practice is focused on complex

commercial and class action litigation, with an emphasis on consumer protection. Mr. Wilson’s

practice also encompasses whistleblower actions for Medicare and Medicaid under the False

Claims Act. Mr. Wilson graduated magna cum laude from Chicago-Kent College of Law, where

he served as Executive Articles Editor of the Chicago-Kent Law Review and was elected to the

Order of the Coif. While at Chicago-Kent, Mr. Wilson earned three CALI Awards for achieving

the highest grade in his class, and was named a Kent Legal Scholar. Prior to joining Siprut PC,

Mr. Wilson externed with the United States Court of Appeals for the Seventh Circuit and with

the Circuit Court of Cook County, Chancery Division.

* * *

KE LIU is an attorney at Siprut PC. His practice is focused principally on class-action

litigation, with an emphasis on consumer protection and technology issues. Mr. Liu is licensed to

practice in the State of Illinois and the U.S. District Court for the Northern District of Illinois.

Mr. Liu graduated cum laude from the University of Illinois College of Law in 2015,

where he served as Associate Editor of the University of Illinois Journal of Law, Technology &

Policy. While at the University of Illinois, Mr. Liu received honors and high honors awards in

Legal Research, Legal Writing, and Appellate Advocacy.

Prior to joining Siprut PC, Mr. Liu worked as a law clerk at the City of Chicago

Department of Business Affairs and Consumer Protection, where he regulated Chicago

businesses and prosecuted hundreds of consumer fraud cases. Mr. Liu also externed for the

Honorable Judge Alfred J. Paul, Circuit Court of Cook County, County Division

* * *

MICHAEL CHANG is an attorney at Siprut PC. His practice is focused on commercial

litigation, with an emphasis on information technology infrastructure.

Mr. Chang earned his J.D. from the University of Illinois College of Law, where he

graduated magna cum laude. While at the College of Law, Mr. Chang was selected to the

national team for the Philip C. Jessup International Law Moot Court Competition, and was a

participant in the Jessup Midwest Regional Competition. He additionally received a Pro Bono

Notation upon graduation, in recognition of 60 hours of pro bono legal service. Mr. Chang

received his B.S. in Management Information Systems from the University of Arizona.


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Prior to joining the firm, Mr. Chang prosecuted child support enforcement cases at the

Champaign County State’s Attorney Office for two years as an intern. He also prosecuted cases

as an extern for a specialized drug task force at the Cobb County District Attorney’s Office in

Marietta, Georgia. Mr. Chang served as a judicial extern for the Twelfth Judicial Circuit of

Illinois.

* * *

NATASHA SINGH is an attorney at Siprut PC. Her practice is focused principally on

complex commercial and class action litigation, with an emphasis on consumer protection. Ms.

Singh is licensed to practice in the State of Illinois.

Prior to joining Siprut PC, Ms. Singh worked as a law clerk at a class action firm where

she assisted in all aspects of the litigation process for a broad range of complex litigation matters,

including consumer fraud, invasion of privacy, false advertising, and contract disputes. Ms.

Singh also externed with the Circuit Court of Cook County.

After receiving her B.A. from Boston University, Ms. Singh worked as a legal assistant at

a corporate law firm in New York City. Ms. Singh graduated from the University of Illinois

College of Law in 2016. While at the University of Illinois, Ms. Singh received honors and high

honors awards in Legal Research and Appellate Advocacy.

* * *

MITCHEL OLSON is Of Counsel at Siprut PC. He has a law degree from Stanford Law

School and a medical degree from the University of California, and is licensed to practice both

law and medicine.

Dr. Olson has successfully litigated hundreds of cases involving defective medical

devices, faulty drugs, and negligent medical practice. He has obtained millions of dollars in

recoveries for clients who had “metal on metal” hip implants that caused metal poisoning and

joint breakdown, anesthetic pumps that destroyed shoulder joints in young athletes, breast

implants that leaked silicon and caused scar tissue and systemic immune reactions, and surgical

stapling devices that misfired, resulting in catastrophic complications. He has represented other

clients who took gastric reflux drugs that caused heart arrhythmias and sudden death, a pain

medication that resulted in an epidemic of prescription drug addicts, and recalled diet drugs that

caused heart attacks.

Dr. Olson has recovered millions of dollars on behalf of clients catastrophically injured

by medical negligence, including a six year old girl who lost her legs and arms after an

emergency room physician told the child’s mother that she was “overly concerned” and sent the

child home without treatment, and a man who became a paraplegic after a resident

anesthesiologist at a university hospital failed to monitor fluids being administered, resulting in a

50 lb. weight gain during surgery and heart failure. He obtained a 31 million dollar verdict for a

baby badly brain damaged as a result of an obstetrician’s unwillingness to see the bleeding

mother when called during the night, even though California limits pain and suffering damages

in medical malpractice cases to $250,000. Dr. Olson has also successfully prosecuted claims


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against insurance companies for their bad faith refusal to pay for medical services and attorneys

who committed legal malpractice.

While the majority of Dr. Olson’s practice has been devoted to representing people

injured in the health care system, he has also handled class action lawsuits on behalf of victims

of predatory mortgage lending, California retail electrical consumers who overpaid for electricity

because of market manipulation, gender discrimination by a national brokerage firm, and

purchasers of cell phones overcharged for sales taxes. Dr. Olson has consulted in litigation

involving the oil industry’s use of “fracking,” which can contaminate ground water with

radioactive isotopes and other chemicals.

Dr. Olson holds a AV Preeminent Rating, the highest possible rating, in the Martindale-

Hubbell Peer Review Ratings Program, and has been recognized as a Top Lawyer in San Diego,

California, where his office is located.

* * *

MICHAEL OBERNESSER is Of Counsel at Siprut PC. Michael graduated magna cum laude

from Xavier University in Cincinnati, Ohio with a Bachelor's Degree in Philosophy in 1998.

After graduation, Michael went on to receive his Juris Doctor at the Northwestern University

School of Law in Chicago, Illinois in 2001. While attending Northwestern, Michael was a

member of the Bluhm Legal Clinic, where he represented clients accused of a wide variety of

criminal offenses, including drug and gun possession, assault and battery, and murder. After

graduation, Michael went to work for some of the largest law firms in the nation, including

Morgan, Lewis & Bockius LLP, and Howrey LLC, where he litigated complex matters on behalf

of his clients.

* * *

ALEXANDER SHAPOVAL is Of Counsel at Siprut PC, and heads the Firm's Boston office.

His practice encompasses all manner of civil litigation, including class actions and personal

injury litigation. Alexander is an experienced trial lawyer, with substantial first-chair jury trial

experience. Alexander is a graduate of the Massachusetts School of Law. He is admitted to

practice in Massachusetts and the United States District Court for the District of Massachusetts.

4821-5129-8057, v. 1


Documents

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN … · 2018. 1. 6. · On June 23, 2015, Plaintiffs West and Hollander brought a putative class action against Act II, Kiam Equities