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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Case No. 3:09-CV-05142-EMC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JEFFREY F. KELLER (SBN 148005) CAREY G. BEEN (SBN 240996) KELLER GROVER, LLP 1965 Market Street San Francisco, California 94103 Telephone: (415) 543-1305 Facsimile: (415) 543-7861 [email protected] [email protected] JOHN G. JACOBS (PRO HAC VICE) BRYAN G. KOLTON (PRO HAC VICE) JACOBS KOLTON, CHTD. 122 South Michigan Avenue, Suite 1850 Chicago, Illinois 60603 Telephone: (312) 427-4000 Facsimile: (312) 427-1850 [email protected] [email protected] Attorneys for Plaintiff and the Class IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA MOHAMMAD KAZEMI, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. PAYLESS SHOESOURCE, INC., a Missouri corporation, COLLECTIVE BRANDS, INC., a Delaware corporation, and VOICE-MAIL BROADCASTING CORPORATION d/b/a VOICE & MOBILE BROADCAST CORPORATION a/k/a VMBC, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 3:09-CV-05142-EMC CLASS ACTION PLAINTIFFS NOTICE OF MOTION AND MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Location: Courtroom 5, 17th Floor. 450 Golden Gate Avenue San Francisco, California 94102 Date: March 23, 2012 Time: 1:30 p.m. The Honorable Edward M. Chen Case3:09-cv-05142-EMC Document84 Filed02/21/12 Page1 of 24

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Page 1: JEFFREY F. KELLER (SBN 148005) CAREY G. BEEN …...26 27 28 JEFFREY F. KELLER (SBN 148005) CAREY G. BEEN (SBN 240996) KELLER GROVER, LLP 1965 Market Street San Francisco, California

PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR FINAL

APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Case No. 3:09-CV-05142-EMC

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JEFFREY F. KELLER (SBN 148005) CAREY G. BEEN (SBN 240996) KELLER GROVER, LLP 1965 Market Street San Francisco, California 94103 Telephone: (415) 543-1305 Facsimile: (415) 543-7861 [email protected] [email protected] JOHN G. JACOBS (PRO HAC VICE) BRYAN G. KOLTON (PRO HAC VICE) JACOBS KOLTON, CHTD. 122 South Michigan Avenue, Suite 1850 Chicago, Illinois 60603 Telephone: (312) 427-4000 Facsimile: (312) 427-1850 [email protected] [email protected] Attorneys for Plaintiff and the Class

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA MOHAMMAD KAZEMI, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. PAYLESS SHOESOURCE, INC., a Missouri corporation, COLLECTIVE BRANDS, INC., a Delaware corporation, and VOICE-MAIL BROADCASTING CORPORATION d/b/a VOICE & MOBILE BROADCAST CORPORATION a/k/a VMBC, Defendants.

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

Case No. 3:09-CV-05142-EMC CLASS ACTION PLAINTIFF’S NOTICE OF

MOTION AND MOTION FOR

FINAL APPROVAL OF CLASS

ACTION SETTLEMENT

AGREEMENT; MEMORANDUM

OF POINTS AND AUTHORITIES

IN SUPPORT

Location: Courtroom 5, 17th Floor.

450 Golden Gate Avenue

San Francisco, California 94102

Date: March 23, 2012

Time: 1:30 p.m.

The Honorable Edward M. Chen

Case3:09-cv-05142-EMC Document84 Filed02/21/12 Page1 of 24

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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR FINAL

APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Case No. 3:09-CV-05142-EMC

NOTICE OF MOTION AND MOTION

PLEASE TAKE NOTICE that on March 23, 2012, at 1:30 p.m., or at such other time as

the Court may set, the undersigned will appear before the Honorable Edward M. Chen in

Courtroom 5, 17th Floor at the United States Courthouse at 450 Golden Gate Avenue, San

Francisco, California, and then and there move the Court, pursuant to Federal Rule of Civil

Procedure 23(e), to provide final approval of the proposed class action settlement in this matter.

Plaintiff makes this motion on the grounds that the settlement is fair, reasonable and

adequate. The Motion is based on this Notice of Motion and Memorandum of Points

and Authorities in Support Thereof, the declaration of the mediator, The Honorable Nicholas H.

Politan (ret.), the declarations of Class Counsel, the declaration of the Settlement Administrator,

oral argument of counsel, the complete file and record in this action, and such additional matters

as the Court may consider.

Dated: February 17, 2012 Respectfully Submitted,

MOHAMMAD KAZEMI, individually and on

behalf of a class of similarly situated individuals,

/s/ John G. Jacobs ______________

John G. Jacobs (Pro Hac Vice)

Bryan G. Kolton (Pro Hac Vice) JACOBS KOLTON, CHTD. 122 South Michigan Avenue Suite 1850 Chicago, Illinois 60603 Jeffrey F. Keller (SBN 148005) Carey G. Been (SBN 240996) KELLER GROVER, LLP 1965 Market Street San Francisco, California 94103

Case3:09-cv-05142-EMC Document84 Filed02/21/12 Page2 of 24

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PLAINTIFF’S MEMORANDUM IN SUPPORT OF FINAL

APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Case No. 3:09-CV-05142-EMC

ii

MEMORANDUM OF POINTS AND AUTHORITIES IN

SUPPORT OF MOTION

Table of Contents

I. INTRODUCTION ............................................................................................................. 1

II. TERMS OF THE SETTLEMENT .................................................................................. x

III. THE CLASS NOTICE COMPORTS WITH DUE PROCESS AND RULE 23 ............................................................................................... x

IV. THE SETTLEMENT WARRANTS FINAL APPROVAL ........................................... x

A. The Strength Of The Plaintiffs’ Case .................................................................... x

B. The Risk Of Continued Litigation ......................................................................... x

C. The Risk Of Maintaining Class Action Status ...................................................... x

D. The Amount Offered In The Settlement ................................................................ x

E. The Extent Of Discovery Completed And The Stage Of The Litigation .............. x

F. The Experience And Opinion Of Counsel ............................................................. x

G. The Absence Of Collusion Supports Approval ...................................................... x

H. The Presence Of A Governmental Participant ...................................................... x

I. The Reaction of Class Members ............................................................................ x

V. CONCLUSION ................................................................................................................ 17

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PLAINTIFF’S MEMORANDUM IN SUPPORT OF FINAL

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iii

Table of Authorities

Cases: Page(s):

Byrd v. Civil Serv. Comm’n,

459 U.S. 1217 (1983) .......................................................................................................... 8

Churchill Village, LLC v. Gen Elec.,

361 F.3d 566 (9th Cir. 2004) ..................................................................................... 6, 8, 17

Class Plaintiffs v. City of Seattle,

955 F.2d 1268 (9th

Cir. 1992) .............................................................................................. 8

Garner v. State Farm Mut. Auto. Ins. Co.,

2010 WL 1687832 (N.D. Cal. Apr. 22, 2010) .............................................. 8, 9, 12, 15, 16

In re Bluetooth Headset Products Liab. Litig.,

654 F.3d 935 (9th

Cir. 2011) .............................................................................................. 16

In re OmniVision Tech. Inc.,

559 F. Supp. 2d 1036 (N.D. Cal. 2008) ...................................................... 8, 12, 13, 14, 15

Kazemi v. Payless Shoesource, Inc.,

2010 WL 963225 (N.D. Cal. Mar. 16, 2010) ...................................................................... 9

Kent v. Hewlett-Packard Co.,No.

2011 WL 4403717 (N.D. Cal. Sept. 20, 2011) .................................................................. 17

Leckler v. Cashcall, Inc.,

2008 WL 5000528 (N.D. Cal. Nov. 21, 2008) .................................................................. 11

Lewis v. Starbucks Corp.,

2008 WL 4196690 (E.D. Cal. Sept. 11, 2008) .................................................................... 8

Lipuma v. Am. Express Co.,

406 F.Supp. 2d 1298 (S.D. Fla. 2005) ......................................................................... 12, 14

Molski v. Gleich,

318 F.3d 937 (9th Cir. 2003) ............................................................................................... 8

Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306 (1950) ............................................................................................................ 6

Nat’l Rural Telecomms Coop. v. DIRECTV, Inc.,

221 F.R.D. 523 (C.D. Cal. 2004) ................................................................................ 15, 17

Officers for Justice v. Civil Serv. Comm’n,

688 F.2d 615 (9th Cir. 1982) ............................................................................................. 13

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PLAINTIFF’S MEMORANDUM IN SUPPORT OF FINAL

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iv

Protective Comm. for Indep. Stockholders v. Anderson.,

390 U.S. 414 (1968) ............................................................................................................ 9

Rodriguez v. West Publishing Corp.,

563 F.3d 948 (9th

Cir. 2009) ........................................................................................ 15, 16

Satterfield v. Simon & Schuster,

569 F.3d 946, 950 (9th Cir. 2009) ....................................................................................... 9

Silber v. Mabon,

18 F.3d 1449 (9th Cir. 1994) ............................................................................................... 6

Wren v. RGIS Inventory Specialists,

2011 WL 1230826 (N.D. Cal. Apr. 1, 2011) .................................................................... 17

Statutes & Regulations:

28 U.S.C. § 2342 ............................................................................................................... 11

28 U.S.C. § 1715 ............................................................................................................... 16

47 U.S.C. § 227 et seq. ................................................................................ 1, 9, 10, 12, 14

47 C.F.R. § 64.1200 ............................................................................................................ 3

47 C.F.R. § 1200(f)(1). ..................................................................................................... 10

Miscellaneous:

Fed. R. Civ. P. 23(c)(1)(C) ................................................................................................ 13

Fed. R. Civ. P. 23(c)(2)(B) .............................................................................................. 6, 7

Fed. R. Civ. P. 23(e)(1) ....................................................................................................... 5

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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR FINAL

APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Case No. 3:09-CV-05142-EMC

I. INTRODUCTION

In October 2009, Plaintiff initiated this class action asserting that the text-message

marketing campaign employed by Defendants to promote the sales of Payless’s shoe lines to

millions of consumers nationwide constituted a violation of the Telephone Consumer Protection

Act (“TCPA”), 47 U.S.C. § 227 et seq. (See Docket Number (“Dkt. No.” 1). Plaintiff alleged that

Defendants utilized an “automatic telephone dialing system” (“ATDS”) to send text message

advertisements to the cell phones of consumers who had not previously given their "prior express

consent" to such text messages, some of whom had their telephone numbers registered on Do Not

Call lists, and sought injunctive relief and statutory damages. (Id.) In response, Defendants

moved to dismiss. (Dkt. No. 20) After lengthy briefing and argument, the Court denied the

Defendants’ Motion to Dismiss (Dkt. No. 36) and Defendants answered the Complaint. (Dkt. No.

35) The Parties then commenced discovery, but also agreed to try resolving the dispute through

mediation under the supervision of Judge Nicholas H. Politan (ret.). The Parties participated in

two full days of mediation, and at the conclusion of the second session, reached an agreement in

principle on the settlement of the lawsuit and executed a memorandum of understanding at that

time. (Jacobs Fee Decl.1 ¶ ¶ 13-16.) A few months later, a formal settlement agreement was

executed. (Id. ¶ 17.)

Following presentation of the settlement agreement to the Court (Dkt. No. 53), Judge Patel

requested supplemental briefing on specified points, which the Parties supplied (Dkt. Nos. 61 and

63). Following transfer to Judge Chen, additional briefing was requested and supplied by the

Parties (Dkt. Nos. 70 and 72), a corrected Settlement Agreement was filed with the Court (Dkt No.

71), and a hearing was held on August 19, 2011 (Dkt. No. 74), followed by the filing of a second

corrected Settlement Agreement with the Court. (Dkt. No. 75) On September 6, 2011, the Court

1 In connection with the Motion For Approval Of Attorneys’ Fees And Expenses And Class

Representative Incentive Award (Docket No. 79), class counsel John G. Jacobs attached his

Declaration. That declaration, dated October 13, 2011, is referred to herein as “Jacobs Fee Decl.”

In connection with the instant motion for final approval of the settlement, Mr. Jacobs has

submitted a second declaration (attached hereto), referred to herein as “Jacobs Final App. Decl.”

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PLAINTIFF’S MEMORANDUM IN SUPPORT OF FINAL

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granted preliminarily approval of the settlement, certified the Settlement Class, approved the

manner and form of notice to the class, directed the Parties to implement the notice plan giving an

opportunity for class members to opt out of the settlement or object to any of its terms (including

attorneys’ fees and expenses or incentive awards to the representative plaintiff, all of which were

clearly disclosed), and set a date for the final approval hearing. (Dkt. No. 76.) On October 13,

2011, Class Counsel filed their Motion For Award of Attorneys' Fees And Expenses and Class

Representative Incentive Award. (Dkt. No. 79.) Class Counsel thereafter worked with Payless

and the settlement administrator, Heffler, Radetich & Saitta LLP of Philadelphia, Pennsylvania, to

ensure that notice was properly distributed, fielded inquires from class members regarding

settlement details and aided class members in the claims process. (Jacobs Fin. App. Decl. ¶ 3.)2

On February 10, 2012, the Parties filed a stipulation to continue the hearing date for final approval

to March 23, 2012 to accommodate the travel needs of defense counsel (Dkt. No. 82), which the

Court signed into Order on February 14, 2012. (Dkt. No. 83). Pursuant to that Order, the new

hearing date was posted on the settlement website maintained by the Settlement Administrator,

www.paylesstextsettlement.com, and Payless restored the link on its own website,

www.payless.com, directing class members to the settlement website where the first item listed is

a prominent notice of the change of the final approval hearing date. (Hamer Decl. ¶ 6); (Jacobs

Final App. Decl. ¶11.)

The court-approved five-part notice plan has now been successfully implemented, CAFA

notice has been provided to various governmental agencies, and a press release announcing the

settlement has been issued by Class Counsel reminding class members of the filing deadline.

(Jacobs Final App. Decl. ¶¶ 3-6, 14 .) The deadline for submitting exclusions and objections has

now passed and given the terms of the settlement, it is not surprising that there has been not a

2 Detailed descriptions of the litigation history, which for efficiency will not be repeated here, have been summarized

in Plaintiff’s Motion for Preliminary Approval (Dkt. No. 53) and Motion For Award of Attorneys' Fees and Expenses

(Docket No. 79).

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single objection to the settlement and only one opt-out. (Jacobs Decl. ¶ 14; Hamer Decl. ¶ 9.)

Furthermore, over 22,500 claims have been filed. (Hamer Decl. ¶ 8.)

As a result of this settlement, every settlement class member obtains the relief that he or

she will never again receive a text message from Payless (unless they want to, in which case they

will have to specifically text Payless and request receipt of such text offers, with what is known as

a double opt-in requirement). That alone makes the litigation a success. The Settlement directs

that Payless (a) not use any list of cell phone numbers it compiled prior to October 4, 20103 nor

select numbers off of any such list for the purpose of sending any text messages to such numbers;

(b) comply with the TCPA and Federal Communications Commission (“FCC”) regulations, 47

C.F.R. § 64.1200, as applicable to the sending of future SMS text messages; (c) require any entity

through whom it causes SMS text messages to be sent to customers to compare any number to

which it wishes to send a text message to Payless’s internal Do Not Call list and/or any other Do

Not Call list maintained by or on behalf of Payless, and to the listing of persons who have texted

Payless to stop before any text messages are sent; (d) not send or allow to be sent any further text

messages to a customer whose cellular telephone number appears on any such stop or Do Not Call

list, unless and until Payless obtains that customer’s prior express consent authorizing Payless to

resume sending the customer text messages; and (e) provide training to its affected personnel on

compliance with the requirements of the TCPA and the FCC regulations with respect to text

messaging. That relief alone is significant -- not only because the class will no longer be subjected

to the aggravation and invasion of privacy that accompanies unsolicited text messages, but also

because they will no longer have to pay their service providers for receipt of such messages -- and,

without more, would justify approval of the settlement as fair, reasonable and adequate.

But that is not the only relief provided. Each class member that submitted a valid claim

will also receive a fully transferrable Merchandise Certificate with a face value of $25 that can be

used to obtain any items sold by Payless (e.g., shoes, socks, shoelaces, make-up, jewelry,

3 That is the date upon which Payless implemented its requirement of a double opt-in for obtaining numbers for its

texting campaigns.

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handbags, purses, belts, hats, scarves, accessories, sunglasses, umbrellas, wallets and backpacks,

etc.) offered at any of Payless's 3,800 stores throughout the United States, at any time up to 12

months from the date of issuance. As has been extensively discussed in prior briefing, the

Merchandise Certificates can be combined with gift cards or certificates, do not require the

purchase of any particular product or the expenditure of any money, and are worth more than

enough to cover the entire cost of one or more pair of shoes, accessories, and non-footwear items.

(Dkt. No 73.)4 And this settlement contains a particularly important provision: To the extent the

dollar value of redeemed Merchandise Certificates is less than $5 million (under the settlement,

Payless is required to track the dollar amount of certificates actually redeemed), Payless will make

a Cy Pres Contribution in an amount equal to the difference between the amount redeemed and $5

million to tax exempt charities approved by the Court in the form of Merchandise Certificates with

a face value of $15. (Jacobs Final App. Decl. ¶ 7.) Based on past experience with the "Payless

Gives Shoes for Kids” charitable campaign, about 85 percent of such merchandise certificates are

redeemed within three months. (Dkt. No 73.) Per the Court’s urgings, the Merchandise

Certificates donated will have a six-month life. (Second Corrected Settlement Agreement, ¶ 7;

Docket No. 75.)

In addition, Payless has already paid the full costs of providing notice to the class, has and

continues to pay Settlement Administrator administration expenses, and has agreed to pay an

incentive award to Plaintiff for serving as class representative and Class Counsel's attorneys’ fees

and expenses up to a specified amount ($1,250,000 in fees and $20,000 in expenses, as awarded

by the Court). Payment of these items by Payless under the settlement is in addition to the

benefits provided to the Settlement Class and will not reduce the benefits available to the

Settlement Class or the recipient charities. In other words, such fees and costs will not be

deducted from the class's recovery, as is often the case in class action settlements.

4 The average price at which footwear and non-footwear inventory items were offered for sale at Payless stores

located in the United States as of the end of June 2011 was significantly below the $25 amount of the Merchandise

Certificates. As of the end of June 2011, the average price at which footwear items were offered for sale was less than

the amount of the Merchandise Certificates. (Id.)

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Therefore, as a result of this settlement, Payless’s practice of texting unsuspecting and

unconsenting customers will stop, and Payless will pay substantially in excess of $5 million

dollars to the class (directly and indirectly via cy pres, costs of notice and administration,

attorney's fees, etc.). The deterrent effect of a such a result is difficult to monetize, but of

tremendous importance in causing other companies considering a texting program to consider how

they may do so without running afoul of the law and subjecting their companies to substantial

exposure. (Jacobs Final App. Decl. ¶ 13.)

Given the potential hurdles facing Plaintiff in this litigation, the settlement as a whole is

fair, reasonable, and adequate, and merits the Court’s final approval. Plaintiff thus respectfully

requests that the Court now grant final approval of the settlement, and award Class Counsel the

requested attorneys’ fees and expenses and Class Representative the requested incentive award.

II. TERMS OF THE SETTLEMENT

The terms of the settlement preliminarily approved by the Court, which are set forth in the

(second corrected) Settlement Agreement (Dkt. No. 75), insofar as concerns benefits conferred

upon the class have been described above (and in prior filings) and will not be repeated here.

Should the Court grant final approval of the Settlement, and after the time for appeal has

expired, Plaintiff and each and every member of the Settlement Class who has not timely filed a

request to be excluded (or who has rescinded a previous opt-out request pursuant to the Settlement

Agreement), will release and forever discharge Defendants from any and all manner of claims,

whether known or unknown, involving the sending or alleged sending of SMS text messages to

persons by or on behalf of Payless ShoeSource, Inc. from October 29, 2005 through October 4,

2010 that were or could have been alleged or asserted in the lawsuit relating to such text messages.

(See Dkt. No. 75 ¶¶ 18-22 for the full Release language). The Release is tailored to the allegations

of the litigation and is appropriate.

III. THE CLASS NOTICE COMPORTS WITH DUE PROCESS AND RULE 23

Before final approval of a class action can issue, notice of the settlement must be provided

to the class. Fed. R. Civ. P. 23(e)(1). Rule 23 requires that the class receive “the best notice

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

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identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). Actual notice, however, is not

required. Silber v. Mabon, 18 F.3d 1449, 1454 (9th Cir. 1994). Notice to the class must be

“reasonably calculated under all the circumstances, to apprise interested parties of the pendency of

the action and afford them an opportunity to present their objections.” Mullane v. Central

Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). Not only must notice of a class action

settlement be properly disseminated to the class, its content must also “generally describe[] the

terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and

come forward to be heard.” Churchill Village, LLC v. Gen Elec., 361 F.3d 566, 575 (9th Cir.

2004). Rule 23(c)(2)(B) requires that the notice clearly, and in concise, plain, easily understood

language state: (a) the nature of the action; (b) the definition of the class certified; (c) the class

claims, issues, or defenses; (d) that a class member may enter an appearance through an attorney if

he or she desires; (e) that the court will exclude any member of the class upon request; (f) the

method and time to request exclusion; and (g) that the judgment will be binding on class members.

In the Preliminary Approval Order, the Court previously approved, as to form, manner and

content, the Notice Plan specified in the Settlement Agreement and found that the manner and

method of distribution of the Class Notice and Claim Form (as revised) was the “best notice

practicable under the circumstances and that it constitutes due and sufficient notice to all persons

entitled thereto and complies fully with the requirements of the Federal Rules of Civil Procedure

and of Due Process.” (Dkt. 76, ¶ 8.) The Parties and the Settlement Administrator have fully

implemented the directives of that Order and complied with the notice plan. (Hamer Decl. ¶ ¶ 2-7;

Jacobs Final App. Decl. ¶¶ 3-5. )

The Settlement Agreement contemplated, and the Parties and Settlement Administrator

executed, a five-part notice plan designed to reach as many potential settlement class members as

possible through reasonable effort. (Dkt. No. 75 1 ¶ 4; Hamer Decl. ¶ ¶ 2-7.) First, direct notice

of the settlement was sent via email to those class members for whom Payless or VMBC had

email addresses. (Dkt. No. 75 ¶ 4a) By September 19, 2011, email notices in the form called for

by the Settlement Agreement and Preliminary Approval Order were sent to some 1.8 million class

members. (Hamer Decl. ¶ 5.) Second, by September 19, 2011, the Settlement Administrator

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launched and thereafter administered a settlement website at www.paylesstextsettlement.com ,

serving as the “long-form” notice, which provided links to the settlement agreement, the claim

form, and other relevant Court documents, contained answers to Frequently Asked Questions,

provided for the online submission of claims and was supported with internet advertising in the

form of Google AdWords keyword searching, which aided in directing potential members of the

Settlement Class to the settlement website. (Dkt. No. 75 ¶ 4b; Hamer Decl. ¶ 6.) Third, Payless

included on the landing page for www.payless.com, above the global links appearing at the bottom

of the screen, a conspicuous notice announcing the settlement of the text messaging class action

lawsuit and provided a link to the settlement website, as well as the toll-free number of the

Settlement Administrator. (Dkt. No. 75 ¶ 4c; Jacobs Final App. Decl. ¶ 5.) Fourth, Payless

provided In-Store notice throughout the notice period by posting in all of its stores in the United

States in a prominent location as close to its cash registers as practical (and clearly and

conspicuously visible from the cash register) posters announcing the settlement of the text

messaging class action lawsuit. (Dkt. No. 75 ¶ 4d; Jacobs Final App. Decl. ¶ 5.) Fifth, Payless

provided notice on all of its U.S. store register receipts, announcing the settlement and providing

information to a link to the settlement website, as well as the toll free number of the Settlement

Administrator. (Dkt. No. 75 ¶ 4e; Jacobs Final App. Decl. ¶ 5.) During the notice period, over

20 million receipts containing notice of the settlement were provided by Payless to customers.

(Id.)

In addition, Payless provided notice of the settlement to appropriate federal and state

officials under CAFA (Dkt. No. 75 ¶ 35; Jacobs Final App. Decl. ¶ 14) and Class Counsel issued a

press release announcing the settlement. (Dkt. No. 75 ¶ 34; Jacobs Decl. ¶ 10.) This was

comprehensive and robust notice, and clearly the best practicable notice. Thus, notice to the class

complied with the Preliminary Approval Order, Rule 23, and Due Process, and satisfied the

standard of the “best notice practicable under the circumstances.”

IV. THE SETTLEMENT WARRANTS FINAL APPROVAL

The law favors the compromise and settlement of class action suits. See, e.g., Byrd v. Civil

Serv. Comm’n, 459 U.S. 1217 (1983); Churchill Village, 361 F.3d at 576; Class Plaintiffs v. City

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of Seattle, 955 F.2d 1268, 1276 (9th

Cir. 1992). Under Federal Rule of Civil Procedure 23(e),

“[t]he court must approve any settlement, voluntary dismissal, or compromise of the claims, issues

or defenses of a certified class” and such approval may occur “only after a hearing and on finding

that the settlement, voluntary dismissal, or compromise is fair, reasonable, and adequate.” Fed. R.

Civ. P. 23; In re OmniVision Tech. Inc., 559 F. Supp. 2d 1036, 1040 (N.D. Cal. 2008) (citing

Staton v. Boeing Co., 327 F.3d 938, 959 (9th

Cir. 2003)). A settlement is fair, reasonable, and

adequate where, as here, “the interests of the class are better served by the settlement than by

further litigation.” Garner v. State Farm Mut. Auto. Ins. Co., No. CV-08-1365-CW, 2010 WL

1687832, *8 (N.D. Cal. Apr. 22, 2010) (quoting MANUAL FOR COMPLEX LITIG. (FOURTH) § 21.61

(2004)). While the Court has discretion in approving any settlement, “[i]n exercising this

discretion, this circuit has long deferred to the private consensual decision of the parties.” Garner

v. State Farm Mut. Auto. Ins. Co., No. CV-08-1365-CW, 2010 WL 1687832, *8 (N.D. Cal. April

22, 2010 (citing Rodriguez v. West Publishing Corp., 563 F.3d 948, 965 (9th

Cir. 2009)(“We put a

good deal of stock in the product of an arms-length, non-collusive, negotiated resolution . . .”)).

In determining whether a settlement agreement is fair, adequate, and reasonable, a district

court may consider some or all of the following non-exhaustive factors:

the strength of plaintiffs’ case; the risk, expense, complexity, and likely

duration of further litigation; the risk of maintaining class action status

throughout the trial; the amount offered in settlement; the extent of

discovery completed, and the stage of the proceedings; the experience and

views of counsel; the presence of a governmental participant; and the

reaction of the class members to the proposed settlement.

Molski v. Gleich, 318 F.3d 937, 953 (9th

Cir. 2003). While the Court may consider each of the

foregoing factors when considering the final approval of a class action settlement, “[i]n the Ninth

Circuit, a court affords a presumption of fairness to a settlement, if: (1) the negotiations occurred

at arm’s length; (2) there was sufficient discovery; (3) the proponents of the settlement are

experienced in similar litigation; and (4) only a small fraction of the class objected.” Lewis v.

Starbucks Corp., No. 07-cv-00490, 2008 WL 4196690, at *7 (E.D. Cal. Sept. 11, 2008) (citing

Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS § 11:41 (4th

Ed 2002)). As

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discussed above, the Settlement Agreement, to which there has been no objection, was reached

after extensive arm’s length negotiations and mediation under the supervision of a well-respected

mediator, after a sufficient exchange of discovery, by experienced counsel with extensive

experience with the TCPA and class actions. Accordingly, the Court’s analysis of the factors

listed below should be examined with a presumption that the Settlement Agreement is fair. In the

instant case, each of these factors militates in favor of approving the settlement.

A. The Strength of the Plaintiffs’ Case

The first step in assessing the fairness of a class action settlement is to examine “Plaintiff’s

likelihood of success on the merits and the range of possible recovery.” Garner, 2010 WL

1687832, at *9; see also Protective Comm. for Indep. Stockholders v. Anderson, 390 U.S. 414,

424-25 (1968) (“Basic to [analyzing a proposed settlement] in every instance, of course, is the

need to compare the terms of the compromise with the likely rewards of the litigation.”). The

analysis of Plaintiff’s probability of success on the merits, however, is not rigid or beholden to any

particular formula and “the Court may presume that through negotiation, the Parties, counsel, and

mediator arrived at a reasonable range of settlement by considering Plaintiff’s likelihood of

recovery.” Garner, 2010 WL 1687832, *9 (citing Rodriguez, 563 F.3d at 965).

In order to obtain a successful recovery on his First Cause of Action through litigation,

Plaintiff would have needed to obtain certification of a litigation class pursuant to Rule 23(b)(3)

and then prove at trial that Defendants made: (1) unauthorized calls, (2) to class members’ cell

phones, (3) using an ATDS, in violation of 47 U.S.C. § 227 (b)(1)(A)(iii). See Dkt. 1; Satterfield

v. Simon & Schuster, 569 F.3d 946, 950 (9th

Cir. 2009) (citing 47 U.S.C. § 227(b)(1)(A)(iii));

Kazemi v. Payless Shoesource, Inc., No. C 09-5142, 2010 WL 963225, at *2 (N.D. Cal. Mar. 16,

2010). In order to obtain a successful recovery on his Second Cause of Action through litigation,

Plaintiff would have needed to obtain certification of a litigation subclass pursuant to Rule

23(b)(3) and then prove at trial that Defendants made: (1) two or more calls to each subclass

member within a 12 month period; (2) in violation of the Do Not Call List regulations, by making

“solicitation calls” to numbers registered on the national Do-Not-Call registry and by making

calls made for “telemarketing purposes” without having “instituted procedures for maintaining a

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list of persons who request not to receive telemarketing calls made by or on behalf of that person

or entity,” e.g., an internal Do-Not-Call list. 47 USC §227(c); 47 CFR §64.1200(c) and (d).

Defendants’ Answer to the Complaint asserted thirty-five separate affirmative defenses.

(Dkt. No. 35.) The affirmative defenses included that Plaintiff consented to receive the text

messages, that the text messages were not transmitted with an ATDS, that a text message is not a

“call” under the TCPA, that consumers must be charged for the text messages for the TCPA to

apply, that the TCPA is unconstitutional as violative of the First Amendment and Due Process

Clause, that Plaintiff was not injured, harmed or damaged, that Defendants had an established

business relationship with the class, that Defendants had established and implemented, with due

care, reasonable practices and procedures to effectively prevent telephone solicitations in violation

of the regulations, and that a litigation class or subclass could not be certified. (Id.) Only one of

these defenses need gain traction with a judge or jury to defeat Plaintiff’s claims. And, if plaintiff

failed to obtain certification of a contested litigation class, the case would effectively be over.

In the instant case, there was considerable risk in proceeding with litigation. With respect

to Plaintiff’s First Cause of Action, Defendants disputed that the equipment used by VMBC on

behalf of Payless constituted an “automatic telephone dialing system” or ATDS as defined by the

TCPA and the FCC’s rules, i.e., equipment that has “the capacity ... to store or produce telephone

numbers to be called, using a random or sequential number generator” and “to dial such numbers.”

47 U.S.C. §227(a)(l) and 47 C.F.R. § 1200(f)(1). In addition, unlike the few other TCPA text

messaging cases that have been brought in recent years, this case involved unique and untested

questions with respect to the TCPA’s “prior express consent” defense. Here, it was not claimed

that Payless purchased any third party lists of cell phone numbers for use in its text messaging

program. Rather, Defendants claimed that Plaintiff and the class voluntarily provided their

telephone numbers directly to Defendants at the point of sale and that this constituted sufficient

consent to be contacted via telephone (Dkt. No. 35, Answer at ¶ 56) since they argued that under

FCC regulations “[p]ersons who knowingly release their phone numbers have in effect given their

invitation or permission to be called at the number which they have given” and that the provision

of a phone number “reasonably evidences prior express consent to be contacted at that number.”

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(Dkt. No. 20, Motion to Strike and Dismiss at p.4). Defendants further claimed that Plaintiff

would be barred from arguing against the FCC’s purported interpretation of “prior express

consent.” See 28 U.S.C. § 2342; Leckler v. Cashcall, Inc., 2008 WL 5000528, at *2-3 (N.D.Cal.

Nov. 21, 2008) (Hobbs Act, 28 U.S.C. § 2342, in conjunction with judicial review provisions of

Communications Act, 47 U.S.C. § 402(a), vests federal courts of appeals with exclusive

jurisdiction to determine validity of final FCC orders). Defendants also argued that a litigated

class could not be certified since the “prior express consent” issue would devolve into countless

mini-trials as to how each customer provided his or her cell phone number to Defendants and

what each customer was told or understood when providing the number.

With respect to Plaintiff’s Second Cause of Action, Defendants claimed that the TCPA

contains a safe harbor for companies that establish and implemented with due care practices and

procedures to prevent persons from receiving calls who had listed their numbers on Do Not Call

lists. 47 USC § 227(c)(5)(C). Defendants argued, and discovery revealed, that Payless did have a

written Do Not Call List policy, leaving Plaintiff with a much weaker claim: that the written

procedures were not implemented with due care. Defendants also argued that it only sent text

messages to persons with whom Payless had a business relationship, i.e., Payless’s customers, and

thus could avail the “Established Business Relationship” or EBR defense to defeat the claims.

In addition, the Parties previously provided the Court with supplemental briefings

addressing the various strengths and weaknesses of Plaintiff’s claims. (See, Dkt. Nos. 61, 63, 70

and 72) Suffice it to say, while Class Counsel are confident in the strength of Plaintiff’s claims,

they are also cognizant of the risks inherent in proceeding without this Settlement. (Jacobs Fee

Decl. ¶¶ 11-12.) Given the realities of the case (discussed below), the uncertainties of the law, the

potentially harmful facts learned in discovery, the novelty of the issues remaining that underlie

Plaintiff’s claims, the assuredly vigorous defense that would be presented, and the number of

affirmative defenses presented, the strength of Plaintiff’s case could not justify rejection of this

settlement.

The first factor (the strength of plaintiffs’ case) favors approval of the settlement.

B. The Risk Of Continued Litigation

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The second “fairness” factor this Court may consider is “the risk of continued litigation

balanced against the certainty and immediacy of recovery from the Settlement.” In re Omnivision

Tech., Inc., 559 F. Supp. 2d 1036, 1041 (N.D. Cal. 2008) (citing In re Mego Fin. Corp. Sec. Litig.,

213 F.3d 454, 458 (9th

Cir. 2000)). “The Court should consider the vagaries of litigation and

compare the significance of immediate recovery by way of compromise to the mere possibility of

relief in the future, after protracted and expensive litigation.” Lipuma v. Am. Express Co., 406 F.

Supp. 2d 1298, 1323 (S.D. Fla. 2005); see also Garner, 2010 WL 1687832, *10 (“Settlement

avoids the complexity, delay, risk and expense of continuing with the litigation and will produce a

prompt, certain, and substantial recovery for the Plaintiff class”). Further, this factor favors the

approval of a settlement where, as here, significant procedural hurdles remain, including

anticipated summary judgment motions, class certification, Daubert motions, and appeals.

Garner, 2010 WL 1687832, at *10 (citing Rodriguez, 563 F.3d at 966).

Here, it is certain that the expense, duration and complexity of the protracted litigation that

would result in the absence of settlement would be substantial. Significant costs would be

expended by both Parties should this matter proceed to trial, including expenses for expert

witnesses and technical consultants relating to, inter alia, whether an ATDS was used to send the

messages, and the myriad of other costs that accompany the trial of a nationwide class action.

Yet, the added cost and burden of continued litigation would not necessarily produce better results

for the class; for instance, it is difficult to contemplate better injunctive relief than Payless's

agreeing to a complete stoppage of the text messaging practices that gave rise to the litigation.

Moreover, no matter how clear a violation, it is difficult to believe that a judgment of over $4

billion could be obtained and sustained on appeal for “technical” violations of a statute, especially

at this time when consumer claims lead such a difficult life in federal courts.

As a result, Plaintiff certainly faced a significant challenge in proving his case on the

merits. Given the complexity of the issues, the defeated party would likely appeal. As such, the

substantial and prompt relief provided to the class under the Settlement weighs heavily in favor of

its approval compared to the inherent risk of continued litigation, trial, and appeal.

C. The Risk of Maintaining Class Action Status

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The Court certified, for settlement purposes only, a nationwide Settlement Class in the

Preliminary Approval Order. (Dkt. No. 76, ¶¶ 4-5.) However, if the Court fails to grant final

approval of the Settlement Agreement for any reason, the certification of the class will

automatically become void. (Id. ¶ 7) Although Plaintiff and Class Counsel believe they would be

successful in obtaining certification of an adversarial class absent the Settlement, Defendants have

made it clear that in its absence they would vigorously oppose adversarial certification. Further,

even if Plaintiff were successful in a motion for class certification absent the Settlement,

Defendants could move for decertification of the class before or during trial and likely would

challenge certification on appeal. Fed. R. Civ. P.23(c)(1)(C). Accordingly, this factor weighs in

favor of approving the Settlement Agreement because if at any point the Class failed to become

certified or if class certification was reversed, the Class would get nothing.

D. The Amount Offered in the Settlement

The amount of recovery offered by Defendants also strongly supports approval. The

reasonableness of the amount offered can be determined by comparing it to the maximum

potential recovery if Plaintiff were to ultimately succeed at trial. See OmniVision, 559 F. Supp.

2d at 1042 (finding a certain recovery of 6% of the potential recovery after accounting for

attorneys’ fees and costs to be reasonable and favor approval of the settlement). However, it is

well-settled that a settlement amounting to “only a fraction of the potential recovery does not per

se render the settlement inadequate or unfair.” Officers for Justice v. Civil Serv. Comm’n, 688

F.2d 615, 628 (9th

Cir. 1982). Moreover, the certainty and relative immediacy of the benefits

under the Settlement agreement, when compared with the risk associated with seeking more but

receiving nothing, further justifies the reasonableness of accepting less than the maximum

potential recovery. See OmniVision, 559 F. Supp. 2d at 1042.

As noted above, Plaintiff and the Class have secured through this settlement all of the

injunctive relief that they could possibly have sought through litigation. And, with respect to

statutory damages, the maximum potential recovery is, in a sense, largely illusory. For instance, if

Plaintiff was successful in proving Defendants violated the TCPA, Plaintiff and the approximate 8

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million class members would be entitled to at least $500 per violation in statutory damages under

47 U.S.C. § 227(b)(3) and “up to”5 $500 per violation under 47 U.S.C. § 227(c)(5).

6 However,

such a “huge” recovery here is both infeasible and unrealistic. It is infeasible because an award of

over $4 billion would pose a serious problem to Defendants’ financial health and their ability to

pay a judgment. It is unrealistic for the reasons noted earlier (i.e., it is difficult to believe that a

judgment that large could be obtained and sustained on appeal for technical violations of a

statute where no actual damages are sought) and because it likely raises serious due process issues.

Here, the $25 Merchandise Certificates represent a recovery of 5% of the maximum

potential recovery per class member, i.e., $500 in statutory damages. When combined with the

injunctive relief that precisely targets the allegedly unlawful conduct at issue in the litigation, such

recovery provides truly meaningful benefit to the class. Given the inherent risks of continued

litigation and possible non-payment discussed above, the reasonableness of the immediate

payment of $25 Merchandise Certificates, plus injunctive relief, is readily apparent. See Lipuma,

406 F. Supp. 2d at1323 (“[I]t has been held proper to take the bird in hand instead of a prospective

flock in the bush”). Accordingly, this factor too favors final approval of the Settlement.

E. The Extent of Discovery Completed and the Stage of the Litigation

The next factor allows the Court to consider both the extent of the discovery conducted to

date and the stage of the litigation as indicators of class counsel’s familiarity with the case and

ability to make informed decisions. OmniVision, 559 F. Supp. 2d at 1042 (citing In re Mego Fin.

Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000)). Where extensive discovery has occurred, it

is reasonable for the district court to conclude that Class Counsel fully grasped the merits of the

case prior to engaging in settlement or mediation. Rodriguez, 563 F.3d at 967.

5 Unlike § 227(b)(3), statutory damages under § 227(c)(5) are discretionary.

6 Further, if Plaintiff was successful in demonstrating the willful violation of the TCPA, the Court has the discretion to

treble the available damages. 47 U.S.C. § 227(b)(3). However, although treble damages are available under the TCPA,

the Court need not factor their availability into its consideration of the reasonableness of the negotiated amount. See

Rodriguez, 563 F.3d at965-66.

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The Parties’ understanding of the factual and legal issues in this case is extremely well

developed. Following the denial of Defendants’ motions to dismiss the Complaint, the Parties

exchanged both formal and informal discovery, and when Class Counsel appeared at the mediation

with Judge Politan, they were intimately familiar with the applicable case law and were in

possession of sufficient discovery to intelligently negotiate the terms of the instant Settlement to

the ultimate benefit of each class. The Declarations of Judge Politan and of John G. Jacobs, filed

in connection with the motion for attorneys’ fees and expenses (Docket No. 53 specifically

address these matters and will not be repeated here.

Accordingly, this factor too favors approval of the Settlement.

F. The Experience and Opinion of Counsel

The next factor has the Court consider counsel’s experience and views about the adequacy

of the Settlement. Garner, 2010 WL 1687832, *14 (considering views of counsel that settlement

was fair); see aslo OmniVision, 559 F. Supp. 2d at 1043. In fact, “[t]he recommendations of

plaintiff’s counsel should be given a presumption of reasonableness.” OmniVision, 559 F. Supp.

2d at 1043 (quoting Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979)); Nat’l Rural

Telecomms Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528-29 (C.D. Cal. 2004) (“Great weight is

accorded to the recommendation of counsel, who are most closely acquainted with the facts of the

underlying litigation.”). Reliance on such recommendations is premised on the fact that “parties

represented by competent counsel are better positioned than courts to produce a settlement that

fairly reflects each party’s expected outcome in the litigation.” Rodriguez, 563 F.3d at 967

(quoting In re Pacific Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995)).

Class Counsel have regularly engaged in major complex litigation, and have had extensive

experience in prosecuting consumer class action lawsuits of similar size and complexity. (See the

resumes of Class Counsel attached to the Motion For Preliminary Approval, Docket No. 53 .)

Through their investigation, review of discovery materials, litigation, mediation sessions, and the

settlement process, Class Counsel have gained an intimate understanding of the law and facts at

issue and have previously stated under oath their belief that the settlement is “fair, adequate, and

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reasonable.” (Jacobs Fee Decl. ¶ ¶ 18, 26-27.) This factor, therefore, also favors the Court’s final

approval of the Settlement Agreement.

G. The Absence of Collusion Supports Approval

This Court also must also consider the absence or presence of collusion between the

parties. Garner, 2010 WL 1687832, *13. “Before approving a class action settlement, the district

court must reach a reasoned judgment that the proposed agreement is not the product of fraud or

overreaching by, or collusion among, the negotiating parties.” Id. (quoting Class Plaintiffs v. City

of Seattle, 955 F.2d 1268, 1290 (9th Cir. 1992)).

In this case, both the terms of the Settlement and the evidence submitted in support

demonstrate a complete absence of collusion. The Parties here have submitted sworn proof

detailing the steps taken in the mediation process that resulted in both the class relief and attorney

fee amount. The instant Settlement was, in the words of Judge Politan, “negotiated aggressively,

in good faith and at arm’s length and was not the product of collusion.” (Politan Decl. ¶ 10, part

of Docket No. 79.) Moreover, this is not a case where fees are disproportionate to the class award

as in In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 946-47 (9th

Cir. 2011). Unlike

Bluetooth, where fees represented 83.2% of the total value of the settlement, the fees here are

substantially below 25% of the total value of the Settlement. (Dkt. No. 79; Jacobs Fee Decl. ¶¶

18-19.) Here, the quality of the settlement negotiated and the reasonableness of the fees sought

collectively show that Class Counsel did not exchange potential class benefits for increased

attorney fees. Accordingly, the Court should find that this process resulted in a Settlement free

from any taint of collusion.

H. The Presence of a Governmental Participant

Although there were no “governmental coattails for the class to ride” in this case,

Rodriguez, 563 F.3d at 964, Defendants were nonetheless obligated to notify the Unites States

Attorney General and the appropriate state officials as a condition of obtaining Court approval. 28

U.S.C. § 1715. Garner, 2010 WL 1687832, *14. “Although CAFA does not create an affirmative

duty for either the state or federal officials to take any action in response to a class action

settlement, CAFA presumes that, once put on notice, state or federal officials will raise any

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concerns that they may have during the normal course of the class action settlement procedures.”

Id. Defendants timely complied with CAFA’s notice requirement and provided the requisite

notice by April 11, 2011. (Jacobs Final App. Decl. ¶ 14.) No state of federal official has raised

any objection to the settlement. (Id.) Accordingly, this factor favors approval of the Settlement.

I. The Reaction of Class Members

The final factor in the Court’s determination of the fairness, adequacy, and reasonableness

of the Settlement Agreement is the reaction of the class to the settlement. Kent v. Hewlett-

Packard Co.,No. 5:09-CV-05341-JF HRL, 2011 WL 4403717, at *2 (N.D. Cal. Sept. 20, 2011).

“It is established that the absence of a large number of objections to a proposed class action

settlement raises a strong presumption that the terms of a proposed class action settlement are

favorable to the class members.” Nat’l Rural Telecomms Coop. v. DIRECTV, Inc., 221 F.R.D.

523, 528-29 (C.D. Cal. 2004); see also Kent, 2011 WL 4403717,at *2 (finding that twenty-four

exclusions (.0543%) and eight objections (.017%) out of an estimated 45,000 class members was a

“positive response from the class weigh[ing] strongly in favor of approving the settlement”); Wren

v. RGIS Inventory Specialists, C-06-05778 JCS, 2011 WL 1230826, at *10 (N.D. Cal. Apr. 1,

2011) (0.02% objection rate “strongly supports approval of the settlement”). A complete lack of

objections from the class members to the Settlement Agreement further favors its approval.

Churchill Village LLC v. Gen. Elec., 361 F.3d 566, 577 (9th Cir. 2004).

In this case, the court-approved notice procedures were fully implemented by the parties

and the Settlement Administrator, yet they yielded no objections and only one request for

exclusion. (Hamer Decl. ¶ 9; Jacobs Final App. Dec. ¶ 14.) In this day of professional objectors

(both ideologically and venally motivated) and cynicism about class actions, the fact that there is

but a single request for exclusion and not a single objection says much about the appropriateness

of granting final approval of the settlement and indicates that the class does not find the proposed

settlement problematic. Plus, over 22,500 claims were submitted seeking monetary relief under

the settlement. (Hamer Decl. ¶ 8.) Accordingly, this and the other factors all favor this Court’s

entering final approval of the settlement.

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V. CONCLUSION

For the foregoing reasons, Plaintiff respectfully requests that the Court grant final approval

to the settlement agreement, approve Class Counsel’s request for attorneys’ fees and expenses and

Class Representative incentive awards, enter the proposed Final Approval order separately

submitted herewith (which proposed order was also Exhibit F to the Settlement Agreement), and

grant such further relief the Court deems reasonable and just.

Dated: February 17, 2012 Respectfully Submitted,

MOHAMMAD KAZEMI, individually and on

behalf of a class of similarly situated individuals,

/s/ John G. Jacobs ______________

John G. Jacobs (Pro Hac Vice)

Bryan G. Kolton (Pro Hac Vice) JACOBS KOLTON, CHTD. 122 South Michigan Avenue Suite 1850 Chicago, Illinois 60603 Jeffrey F. Keller (SBN 148005) Carey G. Been (SBN 240996) Keller Grover, LLP 1965 Market Street San Francisco, California 94103

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CERTIFICATE OF SERVICE

I, John G. Jacobs, an attorney, certify that on February 21, 2012, I served the above and

foregoing Notice of Motion and Motion for Final Approval of Class Action Settlement by

causing true and accurate copies of such paper to be filed and transmitted to the persons registered

to receive such notice via the Court’s CM/ECF electronic filing system.

/s/ John G. Jacobs

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DECLARATION OF JOHN G. JACOBS IN SUPPORT OF MOTION FOR FINAL APPROVAL OF SETTLEMENT AGREEMENT

CASE NO. 3:09-CV-05142-EMC

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JEFFREY F. KELLER (SBN 148005) CAREY G. BEEN (SBN 240996) KELLER GROVER, LLP 1965 Market Street San Francisco, California 94103 Telephone: (415) 543-1305 Facsimile: (415) 543-7861 [email protected] [email protected] JOHN G. JACOBS (PRO HAC VICE) BRYAN G. KOLTON (PRO HAC VICE) JACOBS KOLTON, CHTD. 122 South Michigan Avenue, Suite 1850 Chicago, Illinois 60603 Telephone: (312) 427-4000 Facsimile: (312) 427-1850 [email protected] [email protected] Attorneys for Plaintiff and the Settlement Class

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA MOHAMMAD KAZEMI, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. PAYLESS SHOESOURCE, INC., a Missouri corporation, COLLECTIVE BRANDS, INC., a Delaware corporation, and VOICE-MAIL BROADCASTING CORPORATION d/b/a VOICE & MOBILE BROADCAST CORPORATION a/k/a VMBC, Defendants.

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

Case No. 3:09-CV-05142-EMC CLASS ACTION DECLARATION OF JOHN G. JACOBS

IN SUPPORT OF MOTION FOR FINAL

APPROVAL OF SETTLEMENT

AGREEMENT

Location: Courtroom 5, 17th Floor.

450 Golden Gate Avenue

San Francisco, California 94102

Date: March 23, 2012

Time: 1:30 p.m.

The Honorable Edward M. Chen

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DECLARATION OF JOHN G. JACOBS IN SUPPORT OF MOTION FOR

FINAL APPROVAL OF SETTLEMENT AGREEMENT CASE NO. 09 CV 5142 - EMC

DECLARATION OF JOHN G. JACOBS

John G. Jacobs, pursuant to 28 U. S. C. § 1746, hereby declares and states as follows:

1. I am President and founder of Jacobs Kolton, Chtd., which at the time this suit was

filed was known as The Jacobs Law Firm, Chtd. I am a member of the bar of Illinois and have

been admitted pro hac vice in this matter. I am one of the attorneys representing Plaintiff and the

Class in this matter and have been named Class Counsel by the Court’s Preliminary Approval

Order. This declaration is based on my own personal knowledge except where expressly noted

otherwise.

2. I have previously filed a declaration in this matter dated October 13, 2011, in

connection with the Motion For Approval Of Attorneys’ Fees And Expenses And Class

Representative Incentive Award (Docket No. 79), as well as a firm resume that was Exhibit 2 to

the Motion For Preliminary Approval Of Class Action Settlement Agreement (Docket No. 53). I

will not repeat here all the information set forth in those documents.

3. After the entry of the Preliminary Approval Order, I and other Class Counsel

worked with Payless and the Settlement Administrator, Heffler, Radetich & Saitta LLP (“Heffler”)

of Philadelphia, Pennsylvania, to ensure that the settlement website was properly constructed and

maintained, including appropriate case documents and FAQs and answers. We worked with

Heffler (principally with Michael E. Hamer) as well concerning the telephone support system used

by Heffler to field class member calls and worked with Mr. Hamer and Payless to try to effect a

user-friendly system that would provide routine information and also make it convenient to speak

to a live person to answer particular inquiries. We also worked with Mr. Hamer to see that the

email notice was sent in compliance with the Court’s order.

4. Shortly after the email notice went out, our office began to receive calls from

Payless customers asking questions about the settlement.

5. The settlement called for Payless to provide a good deal of the notice in this case,

including posting of signs near its cash registers in all of its stores informing customers about the

settlement, including notice of the settlement on all register receipts at all of its stores, and

including a link on its landing page at www.payless.com directing users to the Settlement Website

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DECLARATION OF JOHN G. JACOBS IN SUPPORT OF MOTION

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CASE NO. 3:09-CV-05142-EMC

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maintained by the Settlement Administrator. I was able to confirm that Payless did in fact comply

with this latter requirement (the link on its website) because I checked the website myself.

Similarly, I made it a point to go to a fair number of Payless stores around the country – in San

Francisco, Chicago, New York, Brooklyn, and Oklahoma City – and in each instance, the required

signage was prominently on display right by the cash register, such that it would be virtually

impossible to miss. Similarly, in several instances, I made small purchases (shoelaces, polish,

etc.) in order to obtain a register receipt. In each instance, the receipt contained the information

about the settlement required about the settlement agreement. I noticed a spike in the number of

phone calls our office received about the case after the signs went up and the register receipts

began containing the disclosure about the settlement. I asked several of the callers how they came

to call me and they told me it was as a result of reading their receipt. (I have been advised by

counsel for Payless that more than 20 million such register receipt notices were issued during the

notice period.)

6. I have been advised by counsel for Payless it will be supplying the Court with

appropriate confirmation of its compliance with the notice requirements that devolved upon it

under the Settlement Agreement and Preliminary Approval Order, but I am convinced from my

anecdotal sources as described above that in fact Payless complied with its notice obligations. I

am likewise convinced that the plan of notice called for by the settlement was effective.

7. Prior to the Court’s grant of preliminary approval of the settlement, I informed the

Court that, based on my experience, I did not expect a high claims rate in this case. As I

explained, although people tend to be furious at receiving unwanted text message advertisements,

they tend to be very suspicious when they get a notice that says simply fill out a form, giving

one’s address and phone number and they will receive a payment, even if it is a very high cash

figure in the $150-$200 range, and redundant, comprehensive notice procedures do not seem to

make much of a difference. It was because of those concerns that we had bargained so vigorously

for a guaranteed payout by Payless of $5 million in the form of charity payments if the amount of

redeemed certificates did not total $5 million. The amount of the certificates to be donated to the

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charities ($15 each) and their terms (they can be used for any item in any Payless store in the

United States, can be combined with any other certificates or promotions, are good for a period of

six months, etc.) assures that the benefit of the settlement to the settlement class (both directly and

indirectly through the cy pres donation) is meaningful and that the full amount is likely to be

spent.

8. According to our daily time records, as of yesterday, I had devoted some 733.4

hours to this case and my partner, Bryan G. Kolton, had devoted some 590.9 hours. (As always,

copies of our daily time records are available for in camera inspection by the Court should the

Court so desire.) Time since the filing of the fee application has been devoted, inter alia, to the

preparation of the motion for final approval, responding to class member inquiries, the changing

of the final approval hearing date and the changes to the settlement website and Settlement

Administrator’s telephone system in connection therewith. Additional time will be required to

attend and participate in the final approval hearing in March of this year, but no estimate has been

made for that nor any time included in the calculations. Billed at our 2011 rates (as noted in our

fee application, we expected to – and did – increase our rates in 2012), our current lodestar totals

some $808,830. Mr. Keller has informed me that his firm’s total lodestar, including time devoted

to the case since preliminary approval and at 2011 rates, is $287,975. Thus, our combined

lodestar as of the end of 2011 is some $1,096,805. Thus, the $1,250,000 requested in fees in this

case would result in a multiplier of less than 1.14. If our 2012 rates were used (it is standard

practice to use current rates to compensate counsel for the delay in payment), the requested fees

would result in essentially no multiplier. As with our firm’s time records, copies of the daily time

records of Keller Grover personnel are available for in camera inspection by the Court should the

Court so desire.

9. Expense reimbursement in this case is limited to $20,000 (Settlement Agreement, ¶

11.) As noted in our initial fee petition, as of that time, the combined expenses of our firm and

Keller Grover already totaled more than $22,000 and they will only go up. For instance, there

will be travel expenses in connection with the final approval hearing in March of 2012.

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10. In December of 2011, co-counsel Jeffrey Keller issued a press release on our

behalf, reminding the public of the filing deadline in this case. See, e.g.,

http://www.newyorkinjurynews.com/2012/01/13/Consumer-Attorneys-Reach-6-Million-Dollar-

Nationwide-Settlement-in-Payless-Text-Message-Class-Action-Suit_201201137488.html and

http://www.justicenewsflash.com/2012/01/11/consumer-attorneys-reach-6-million-dollar-

nationwide-settlement-payless-text-message-class-action-suit_201201119446.html.

11. When the final approval hearing date recently got continued, I worked with Mr.

Volner and Mr. Hamer to cause prominent notice of change of the date for the final approval

hearing to be placed on the settlement website, to see that the link to the settlement website was

put back onto the Payless.com site so that anyone would be directed to the settlement website and

its prominent notification of the change of the final approval hearing date and to make sure the

Settlement Administrator’s telephone system also contained the new information. As of the

execution of this declaration, I have personally confirmed that those changes have taken place.

12. Prior to our filing this lawsuit and prior to October of 2010 when Payless changed

its program to require a double opt-in for its texting program, our office regularly received

complaints about unwanted receipt of Payless text messages and the internet was rife with

complaints about unwanted receipt of Payless text messages. In connection with prior briefing on

questions from the Court concerning aspects of the settlement, I have previously supplied

examples of internet complaints about Payless’s texting program (e.g. Docket No. 61, Exs. A and

B). In the last year, those complaints have disappeared. I am not aware of our office’s having

received any such complaints in over a year, nor have I found any web postings that are not

extremely dated. This litigation has eradicated the problem that gave rise to it.

13. Similarly, the result of this litigation, if approved by the Court, will have a

significant deterrent effect on other companies that are considering texting programs. Invariably,

when a TCPA settlement is announced where the company is required to make a significant

payment (as here), texting advertising activity drops. I know this because the number of

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complaints our office receives about unwanted receipt of text messages drops significantly after

any such settlement is announced, whether by our firm or another firm.

14. Under the Court’s order and the Settlement Agreement, our firm is to be provided

copies of any objections to any aspect of the settlement – final approval of it, attorneys’ fees and

expenses, the incentive award for Dr. Kazemi or any other aspect of it. We have received no

objections, nor, after inquiry, am I aware of any other counsel’s having received any objection.

We have checked the Clerk’s docket sheet for this case, and it reflects no objection. Similarly,

while I expect that Payless will file appropriate confirmation of its compliance with CAFA notice,

pursuant to ¶ 35 of the Settlement Agreement, Payless was required to give CAFA notice in

compliance with 28 U.S.C. § 1751(b), and “at the same time provide Class Counsel with a copy of

the notification given thereunder to the appropriate federal and state officials.” On April 11, 2011,

counsel for Payless provided us with such notice.

Executed in Chicago, Illinois this 17th

day of February, 2012.

/s/ John G. Jacobs ______________ John G. Jacobs

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IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MOHAMMAD KAZEMI, individually and on

behalf of a class of similarly situated individuals,

Plaintiff,

v.

PAYLESS SHOESOURCE, INC., a Missouri

corporation, COLLECTIVE BRANDS, INC.,

a Delaware corporation, and VOICE-MAIL

BROADCASTING CORPORATION d/b/a

VOICE & MOBILE BROADCAST

CORPORATION a/k/a VMBC,

Defendants.

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Case No. CV09-5142 EMC

[Proposed] Final Judgment And

Order Of Dismissal With

Prejudice

The Honorable Edward M. Chen

FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE

This matter comes before the Court on Plaintiff’s Motion For Final Approval

Of The (second corrected) Class Action Settlement Agreement. In connection therewith, the

Court has considered (a) the motion and supporting papers, including a Settlement

Agreement and Release dated as of November 16, 2010, which, together with the Exhibits

attached thereto (the “Settlement Agreement”), (b) the submission by Defendant Payless

ShoeSource, Inc. in support of the said motion; (c) the lack of any objections filed or

presented to the Court, and (d) counsel’s arguments. Based upon this review, arguments of

counsel and the findings below, the Court found good cause to grant the motion.

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

1. Terms and phrases in this Order shall have the same meaning as

ascribed to them in the Settlement Agreement.

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2. This Court has jurisdiction over the subject matter of this Action and

over all parties to this Action, including all Settlement Class Members.

3. This Court previously gave its preliminary approval to the Settlement

Agreement. The Court hereby gives its final approval to the settlement set forth in the

Settlement Agreement, finds that said Settlement Agreement is, in all respects, fair,

reasonable and adequate to, and in the best interests of, the Settlement Class, and hereby

directs that it shall be effectuated in accordance with its terms. The Settlement Agreement

and every term and provision thereof shall be deemed incorporated herein as if explicitly set

forth, and shall have the full force of an Order of this Court.

4. The notice of the settlement pursuant to the Preliminary Approval

Order and the Settlement Agreement was the best notice practicable under the circumstances,

including individual email notice to all members of the Settlement Class whose email

addresses was available or ascertainable, the maintenance of a settlement website by the

Settlement Administrator, in-store notices in Payless stores, and notification printed on

register receipts for purchases. The Court finds that Defendant and the Settlement

Administrator carried out their notice obligations in accordance with Paragraph 4 of the

Settlement Agreement and the provisions of paragraphs 8-10 of the Preliminary Approval

Order. Said notice provided valid, due and sufficient notice of those proceedings and of the

matters set forth therein, including the proposed settlement set forth in the Settlement

Agreement, to all persons entitled to such notice, and said notice fully satisfies the

requirements of Rule 23 of the Federal Rules of Civil Procedure and of Due Process.

5. The Court finds that the Defendant properly and timely notified the

appropriate state and federal officials of the Settlement Agreement, pursuant to the Class

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Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1715. The Court has reviewed the

Defendant’s notices and accompanying materials, and finds that they complied with any

applicable requirements of CAFA.

6. The Settlement Class certified for settlement purposes only is defined

as all persons who received one or more SMS text messages by or on behalf of Payless

Shoesource, Inc. during the period from October 29, 2005 through October 4, 2010.

Excluded from the Settlement Class are those persons who have submitted valid and timely

requests for exclusion pursuant to the Preliminary Approval Order and the notice provided to

Settlement Class Members in accordance with the provisions of the Preliminary Approval

Order. Annexed hereto as Appendix 1 is a schedule of one person excluded from the

Settlement Class.

7. Subject to the terms and conditions of the Settlement Agreement, this

Court hereby dismisses the Action on the merits and with prejudice. The dismissal of

defendants Collective Brands, Inc. and Voice-mail Broadcasting Corporation (“VMBC”),

previously designated as without prejudice in the Preliminary Approval Order, is herewith

made with prejudice.

8. Upon the Effective Date of this settlement, the Class Representative

and each and every Settlement Class Member who has not timely filed a request to be

excluded from the Settlement Class or who has rescinded a previous opt-out request

pursuant to the Settlement Agreement, their respective present or past heirs, executors,

estates, administrators, personal representatives, legatees, agents, predecessors, successors,

assigns, parent companies, subsidiaries, associates, affiliates, officers, directors, managing

directors, principals, partners, members, employers, employees, agents, consultants,

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independent contractors, insurers, attorneys, accountants, financial and other advisors,

investment bankers, underwriters, lenders, auditors, controlled and controlling persons and

any other representatives of the foregoing persons or entities (the “Releasing Parties”) shall

be deemed to have released and forever discharged Defendant Payless Shoesource, Inc. and

its parents, affiliates and subsidiaries, their predecessors and successors in interest, and any

of their heirs, executors, estates, administrators, assigns, associates, employees, agents,

consultants, independent contractors, vendors, insurers, directors, managing directors,

officers, partners, principals, members, attorneys, accountants, financial and other advisors,

investment bankers, underwriters, shareholders, lenders, auditors, investment advisors, legal

representatives, and persons, firms, trusts, corporations, officers, directors, other individuals

or entities in which Payless Shoesource, Inc. has a controlling interest or which is related to

or affiliated with any of them, including but not limited to Collective Brands, Inc., and

Payless ShoeSource, Worldwide, Inc. (the “Released Parties”), of and from any and all

actual, potential, filed, known or unknown, fixed or contingent, claimed or unclaimed,

suspected or unsuspected, claims, demands, liabilities, rights, causes of action, contracts or

agreements, extracontractual claims, damages, punitive, exemplary or multiplied damages,

expenses, costs, attorneys’ fees and/or obligations (including “Unknown Claims” as defined

in the Settlement Agreement), whether in law or in equity, accrued or unaccrued, direct,

individual or representative, of every nature and description whatsoever, whether based on

federal, state, local, statutory or common law or any other law, rule or regulation, including

the law of any jurisdiction outside the United States, against any of the Released Parties,

relating to or arising out of any fact, transactions, events, matters, occurrences, acts,

disclosures, statements, misrepresentations, omission or failure to act relating to the alleged

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sending of SMS text messages to persons by or on behalf of Payless Shoesource, Inc. from

October 29, 2005 through October 4, 2010 that were or could have been alleged or asserted

in the Action relating to such text messages. “Released Parties” also means VMBC, its

parents, affiliates and subsidiaries, their predecessors and successors in interest, and any of

their heirs, executors, estates, administrators, assigns, associates, employees, agents,

consultants, independent contractors, insurers, directors, managing directors, officers,

partners, principals, members, attorneys, accountants, financial and other advisors,

investment bankers, underwriters, shareholders, lenders, auditors, investment advisors, and

legal representatives. Plaintiff and all Settlement Class members who did not properly

request exclusion are deemed to have released and discharged Defendant Payless

ShoeSource, Inc. from all released claims under the agreement, and are further barred and

permanently enjoined from asserting, instituting, or prosecuting, either directly or indirectly,

these claims; provided, however, that nothing herein is meant to or shall release any claim

anyone may have against VMBC concerning any text messages other than those that are the

subject of this Action that VMBC sent on behalf of Payless or any other entity that is under

common ownership or control of Collective Brands, Inc.

9. The Settlement Administrator will issue a single Merchandise

Certificate to each Settlement Class Member who submitted a timely Approved Claim form

as provided in the Agreement.

10. The Court approves the payment by Defendant of attorneys' fees in the

amount of $_________________________ and costs and expenses in the amount of $

_________. The Court finds and determines that such payment of attorneys’ fees and

expenses is fair and reasonable and consistent with Ninth Circuit fee jurisprudence. See, e.g.,

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Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002). Such payment shall be sent by

wire transfer in accordance with the provisions of Paragraph 11 of the Settlement Agreement.

11. The Court approves the payment by Defendant of $__________ to

representative plaintiff Mohammad Kazemi as an incentive award for taking on the risks of

litigation and helping to achieve the results to be made available to the Settlement Class, in

accordance with the provisions of paragraph 12 of the Settlement Agreement. The Court

finds and determines that such an award is fair and reasonable. Such payment shall be sent

by check to Class Counsel in accordance with the provisions of paragraph 12 of the

Settlement Agreement.

12. The Parties shall bear their own costs, expenses and attorneys’ fees,

except as otherwise provided in the Settlement Agreement and this Order.

13. This Court hereby directs the entry of this Final Judgment and Order

of Dismissal With Prejudice based upon the Court’s finding that there is no just reason for

delay of enforcement or appeal of this Final Judgment and Order of Approval

notwithstanding the Court’s retention of jurisdiction to oversee implementation and

enforcement of the Settlement Agreement.

14. This Final Judgment and Order of Dismissal With Prejudice, the

Settlement Agreement, the settlement that it reflects, and any and all acts, statements,

documents, or proceedings relating to the Settlement Agreement are not, and shall not be

construed as, or used as an admission by or against Defendant of any fault, wrongdoing, or

liability on Defendant’s part, or of the validity of any Claim or of the existence or amount of

damages.

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15. Without affecting the finality of this Judgment in any way, this Court

hereby retains continuing jurisdiction over, inter alia, (a) implementation, enforcement, and

administration of the Settlement Agreement, including any releases in connection therewith;

(b) resolution of any disputes concerning class membership or entitlement to benefits under

the terms of the Settlement Agreement; and (c) all parties hereto, for the purpose of enforcing

and administering the Settlement Agreement and the Action until each and every act agreed

to be performed by the parties has been performed pursuant to the Settlement Agreement.

Dated: __________________________, 2012

Enter:

_________________________________ United States District Court Judge

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Appendix 1 to the Final Judgment And Order Of Dismissal

PERSON EXCLUDED FROM THE SETTLEMENT CLASS

Marianne R. Freitas, Connecticut

It is so ordered, this ______ day of ______________, 2012.

Enter:

_________________________________ United States District Court Judge

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