THE KICK LAW FIRM, APC Taras Kick (State Bar No. 143379)s... · THE KICK LAW FIRM, APC ... 643 F.3d 1165 (9th Cir. 2010) Beasley v. ... In re Sutter Health Uninsured Pricing Cases,

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PLAINTIFF’S UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND APPROVAL OF CLASS COUNSEL ATTORNEYS’ FEES AND COSTS

THE KICK LAW FIRM, APC Taras Kick (State Bar No. 143379) ([email protected]) G. James Strenio (State Bar No. 177624) ([email protected]) 201 Wilshire Boulevard Santa Monica, California 90401 Telephone: (310) 395-2988 Facsimile: (310) 395-2088

Attorneys for Plaintiff Wineesa Cole and the Certified Class

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Wineesa Cole, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

Asurion Corporation, a Delaware Corporation, Asurion Insurance Services, Inc., a Tennessee Corporation, T-Mobile USA, Inc., a Delaware Corporation, Liberty Mutual Insurance Company, a Massachusetts Corporation, and DOES 1 through 500,

Defendants.

Case No. CV-06-6649-R (JCx)

Before The Honorable Manuel L. Real

Plaintiff’s Unopposed Memorandum and Points of Authorities in Support of Motion for Final Approval of Class Action Settlement, Attorneys’ Fees and Costs, and Class Representative Service Award (Concurrently Filed Are Supporting Declarations of The Hon. Dickran Tevrizian (Ret.); J. Michael Hennigan; Richard Pearl; Taras Kick; Phil Cooper; Wineesa Cole; Dean Kevin Johnson; and, Elliott Leschen) Date: February 16, 2016 Time: 10:00am Courtroom: 8

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TABLE OF CONTENTS TABLE OF AUTHORITIES ................................. Error! Bookmark not defined.

I. SUMMARY 1 II. THE SETTLEMENT IS FAIR, ADEQUATE, AND REASONABLE 2 A. The Terms of the Settlement and Background 2 B. This Court should grant final approval of the Settlement because it is fair, adequate, and reasonable 4 1. The Settlement is entitled to a presumption of fairness 5 2. Class Counsel’s recommendation is entitled to Substantial weight 6 3. The amount offered in settlement is fair, adequate, And reasonable 7 4. The settlement structure is fair, adequate and reasonable 13 5. The positive response from the absent class members 13 C. The requested attorneys’ fees should be approved 14 1. State law governs the award of attorneys’ fees 15 2. Under state law, the lodestar approach governs the award of attorneys’ fees, and the award is to be fully compensatory 15 3. Plaintiff is entitled to attorneys’ fees under §1021.5 19 4. Class Counsel’s lodestar is reasonable 20 5. Even though the $1.9 million requested fee award represents a negative multiplier, a positive multiplier is supported 23 6. The requested fees are reasonable even under the Inapplicable percentage approach 23 D. The requested litigation costs should be approved 24 E. The service award to the class representative should be approved24 F. The requested fees and costs for notice and claims Administration should be approved 25 G. The proposed cy pres recipient should be approved 25 III. CONCLUSION 25

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TABLE OF AUTHORITIES

CASES Allen v. Bedolla,

787 F.3d 1218 (9th Cir. 2015) .............................................................................. 5 Antoninetti v. Chipotle Mexican Grill, Inc.,

643 F.3d 1165 (9th Cir. 2010) ............................................................................ 17 AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ......................................................................................... 3, 8 Beasley v. Wells Fargo Bank,

235 Cal. App. 3d 1407 (1991) ............................................................................ 19 Building a Better Redondo v. City of Redondo Beach,

203 Cal. App. 4th 852 (2012) ............................................................................. 17 Chavez v. City of Los Angeles,

47 Cal. 4th 970 (2010) ........................................................................................ 15 Chavez v. Netflix, Inc.,

162 Cal.App.4th 43 (2008) ................................................................................. 20 Chavez v. PVH Corp.,

2015 U.S.Dist.LEXIS 170422 (N.D. Cal. 2015) ................................................ 24 Colgan v. Leatherman Tool Grp. Inc.,

135 Cal. App. 4th 663 (2006) ............................................................................. 19 Comcast v. Behrend,

133 S. Ct. 1246 (2013) ....................................................................................... 12 Davis v. City of San Diego,

106 Cal. App. 4th 893 (2003) ............................................................................. 22 DIRECTV, Inc. v. Imburgia,

136 S. Ct. 463 (Dec. 14, 2015) ........................................................................... 12 Dow Corning v. Safety Nat’l Cas.,

335 F.3d 742 (8th Cir. 2003) .............................................................................. 12 Dunk v. Ford Motor Co.,

48 Cal. App. 4th 1794 (1996) ............................................................................. 16 Estrada v. FedEx Ground Package Systems, Inc.,

154 Cal. App. 4th 1 (2006) ................................................................................. 19 Evon v. Law Offices of Sidney Mickell,

688 F.3d 1015 (9th Cir. 2012) ............................................................................ 18 Gaudin v. Saxon Mortg. Servs.,

2015 U.S.Dist.LEXIS 159020 (N.D. Cal. 2015) ................................................ 24 Graham v. DaimlerChrysler Corp.,

34 Cal. 4th 553 (2004) .................................................................................. 15, 19 Hanlon v. Chrysler Corp.,

150 F.3d 1011 (9th Cir. 1997) ........................................................................ 5, 18 Harris v. Marhoefer,

24 F.3d 16 (9th Cir. 1994) .................................................................................. 24

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Hesse v. Sprint Corp., 598 F.3d 581 (9th Cir. 2010) ................................................................................ 4

In re LDK Solar Secs. Litig., 2010 U.S.Dist.LEXIS 87168 (N.D. Cal. 2010) ................................................... 12

In re Sutter Health Uninsured Pricing Cases, 171 Cal.App.4th 495 (2009) ............................................................................... 20

In re TJX Companies Retail Sec. Breach Litig., 584 F. Supp. 2d 395 (D. Mass. 2008) ................................................................. 13

In re Tobacco Cases II, 240 Cal. App. 4th 779 (2015) ............................................................................. 10

In re Toys R Us-Del., Inc.—Fair & Accurate Credit Transactions Act (FACTA) Litig., 295 F.R.D. 438 (C.D. Cal. 2014) ....................................................................... 12

In re Vioxx Class Cases, 180 Cal. App. 4th 116 (2010) ............................................................................. 11

Johnson v. Riverside Healthcare Sys., L.P., 534 F.3d 1116 (9th Cir. 2008) ............................................................................ 15

Ketchum v. Moses, 24 Cal. 4th 1122 (2001) ...................................................................................... 15

Kritzer v. Safelite Solutions, LLC, 2012 U.S. Dist. LEXIS 74994 (S.D. Ohio 2012) ............................................... 24

Linney v. Cellular Alaska P’ship, 151 F.3d 1234 (9th Cir. 1998) .............................................................................. 7

Mangold v. Cal. Pub. Utils. Comm’n, 67 F.3d 1470 (9th Cir.1995) ............................................................................... 15

Maria P. v. Riles, 43 Cal. 3d 1281 (1987) ....................................................................................... 16

Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201 (2012) ....................................................................................... 12

McKenzie v. Fed. Exp. Corp., 2012 WL 2930201 (C.D. Cal. 2012) .................................................................. 10

Mexican Workers v. Arizon Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) ............................................................................ 19

Miller v. CEVA Logistics USA, Inc., 2015 U.S.Dist.LEXIS 104704 (E.D. Cal. 2015) ................................................ 23

Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2007) ............................................................................ 21

Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008) ............................................................................ 21

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523 (C.D. Cal. 2004) ................................................................... 7, 12

Norton v. Maximus Inc., 2015 U.S.Dist.LEXIS 157934 (E.D. Cal. 2015) ................................................... 6

Notrica v. State Comp. Ins. Fund,

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70 Cal. App. 4th 911 (1999) ............................................................................... 17 Officers for Justice v. Civil Serv. Comm’n,

688 F.2d 615 (9th Cir. 1982) .......................................................................... 7, 15 Orkin v. Taylor,

487 F.3d 734 (9th Cir. 2007) .............................................................................. 15 Oxford Health Plans LLC v. Sutter,

133 S. Ct. 2064 (2013) ....................................................................................... 12 Press v. Lucky Stores, Inc.,

34 Cal. 3d 311 (1983) ......................................................................................... 16 Resnick, Resnick v. Frank (In re Online DVD-Rental Antitrust Litig.),

779 F.3d 934 (9th Cir. 2015) ....................................................................... 5, 6, 23 Rodriguez v. Disner,

688 F.3d 645 (9th Cir. 2012) .............................................................................. 15 San Diegans for Open Govt. v. Har Constr., Inc.,

240 Cal. App. 4th 611 (2015) ............................................................................. 19 Schwarz v. Sec’y of Health & Human Servs.,

73 F.3d 895 (9th Cir. 1995) ................................................................................ 21 Serrano v. Priest (Serrano III),

20 Cal. 3d 25 (1977) ............................................................................................ 16 Serrano v. Unruh (Serrano IV),

32 Cal. 3d 621, 639 (1982) .................................................................................. 16 State Compensation Ins. Fund v. Sup. Ct.,

24 Cal. 4th 930 (2001) ........................................................................................ 20 Staton v. Boeing Co.,

327 F. 3d 938 (9th Cir. 2003) ................................................................. 15, 17, 20 Stoetzner v. U.S. Steel Corp.,

897 F.2d 115 (Cir. 1990) .................................................................................... 14 Stovall-Gusman v. W.W. Granger, Inc.,

2015 U.S.Dist.LEXIS 78671 (N.D. Cal. 2015) ................................................... 11 United States v. Bankers Ins.,

245 F.3d 315 (4th Cir. 2001) .............................................................................. 12 Wells v. Allstate Ins. Co.,

557 F. Supp. 2d 1 (D. D.C. 2008) ...................................................................... 23 Wolsey, Ltd. v. Foodmaker, Inc.,

144 F.3d 1205 (9th Cir. 1998) .............................................................................. 8

STATUTORY AUTHORITIES (§1021.5 .................................................................................................................... 16 § 1021.5 .................................................................................................................... 19 28 U.S.C. §1292(b) ................................................................................................. 1, 4 Cal. Bus. & Prof. Code §17200 .................................................................................. 3 Cal. Civ. Code § 3343 ............................................................................................... 10

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False Advertising Act, Cal. Bus. & Prof. Code §17500 ............................................. 3

RULES AND REGULATIONS Fed. R. Civ. P. 23(e) ................................................................................................... 2 Fed. R. Civ. P. Rule 23(e) ......................................................................................... 26

TREATISES William Rubenstein, Alba Conte, & Herbert B. Newberg, Newberg on Class

Actions , §17:25 (4th ed. 2008) ........................................................................... 24

ADDITIONAL AUTHORITIES 2012 U.S.Dist.LEXIS (N.D. Cal. 2012) .................................................................... 17 2015 U.S.Dist.LEXIS (C.D. Cal. 2015) .................................................................. 5, 6

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MEMORANDUM OF POINTS AND AUTHORITIES

I. SUMMARY.

After more than nine years of very thoroughly contested litigation, including

the use of four different neutral mediators, review of over 100,000 documents, and

argument to the Ninth Circuit, the parties finally reached a settlement of this class

action through the acceptance of a mediator’s proposal. (Declaration of Taras Kick

in Support of Unopposed Motion for Final Approval [hereafter “Kick Decl.”],

¶¶41- 48.) At the time of this proposed settlement, this case was pending before the

Ninth Circuit on an interlocutory appeal pursuant to 28 U.S.C. §1292(b), and

actually already had been argued to the Ninth Circuit on July 10, 2015. On October

26, 2015, one of the members of the panel which heard the oral argument called for

an en banc hearing of the argued matter. (Declaration of Taras Kick in Support of

Preliminary Approval [hereafter “Kick Prelim. Decl.”], ¶ 4, Ex. 1.)

At the joint request of all the parties, the Ninth Circuit has granted a remand

of the appeal back to this district court for the limited purpose of enabling the

district court to consider whether it is willing to approve the parties’ proposed

settlement, without prejudice to reinstatement in the event the settlement is not

approved. (Kick Decl. ¶¶30-31.) The Ninth Circuit stated in that limited remand

Order that, “If the parties inform this Court that the settlement will be approved, the

appeal will be dismissed.” (Kick Prelim Decl. ¶5, Ex. 1.)

This Honorable Court preliminarily approved this proposed settlement on

November 23, 2015, stating “The Court has reviewed the relief granted by the

Settlement Agreement and recognizes the significant value to the Class of that

relief.” (Preliminary Approval Order (“Order”) ¶3.) In its Order, this Honorable

Court further found, preliminarily, that “settlement at this time will avoid

substantial additional costs to all parties, as well as the uncertainty and risks that

would be presented to the parties by further litigation of the claims resolved by the

Settlement Agreement,” and that “the Settlement Agreement has been reached as a

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result of intensive, serious, and non-collusive arms-length negotiations.”

This Honorable Court further directed that this motion be filed by January

11, 2016, and that it also be posted on the settlement administrator’s website for

this case, with class members having until January 26 to opt out or object should

they so want. (Order, ¶9.) This, too, has been done. Class Counsel’s fee request is

supported by the concurrently filed declarations of the Honorable Dickran

Tevrizian (Ret.), attorney J. Michael Hennigan, and attorney Richard Pearl, whose

supporting declarations also all have been posted on the settlement website.

This Honorable Court also approved the notice plan proposed in the Motion

for Preliminary Approval, finding that that it meets the requirements of due process

and Federal Rule of Civil Procedure 23(e) (Order ¶6), and appointed Kurtzman

Carson Consultants (KCC) as the settlement administrator to implement the plan.

(Order ¶7.) As described in the accompanying declaration of Phil Cooper of KCC,

this Court’s Order regarding notice and claims handling has been successfully

implemented in every respect. 1 (Cooper Decl. ¶¶3-8.) To date there are 20,211

claims, only five requests for opt out, and no objections. (Cooper Decl. ¶¶11-13.)

In sum, all which had been ordered by this Honorable Court for final

approval has been accomplished, and Plaintiff respectfully requests that final

approval of the class action settlement, attorneys’ fees and costs, and class

representative service award be granted at this time.

II. THE SETTLEMENT IS FAIR, ADEQUATE, AND REASONABLE.

A. The Terms of the Settlement and Background.

This litigation commenced over nine years ago, on October 18, 2006. (Dkt

1 KCC caused the class members to be given direct individual notice by first class postage U.S. mail and caused a longer version of the notice to be posted on KCC’s website. The class members were informed of their choice of making a claim through the U.S. mail or making a claim online through a website which was built for this settlement. (Cooper Decl. ¶¶3-8.)

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1.) It is already certified as a class action for: “[a]ll persons who while residing in

the State of California purchased cellular telephone insurance from Asurion through

T-Mobile USA from August 1, 2003 through April 2, 2008.” (Dkt. 644.) This class

action alleges that the class members who purchased insurance against loss, theft,

or damage of their cell phone were deceived because Defendants did not adequately

disclose that the phones might be replaced with refurbished ones, even though this

fact is disclosed on the third page of the brochure given to consumers. The theory

of damages is that the class members paid too much in monthly premiums for the

insurance because insurance that sometimes replaces phones with refurnished ones

is worth less than insurance that replaces phones with news ones. (Kick Decl. ¶15.)

Plaintiff lost in the individual, nonbinding arbitration (Dkt. 90, 92), but she

persevered with this lawsuit. She carried two common law claims (for negligent

misrepresentation and fraud) and two statutory claims (for violation of the Unfair

Competition Law's “fraudulent” prong, Cal. Bus. & Prof. Code §17200, and

violation of the False Advertising Act, Cal. Bus. & Prof. Code §17500) to the eve

of trial after full discovery (review of over 100,000 documents, 11 percipient and

expert witness depositions, numerous motions to compel discovery) and complete

trial preparation (including 19 motions in limine, trial briefs, witness lists and

exhibit lists, and jury instructions). (Kick Decl. ¶¶8-14.) To come so far, Plaintiff

had to overcome three motions to dismiss (despite a similar lawsuit against Asurion

being thrown out on a demurrer), an opposition to class certification (despite orders

denying class certification in two similar lawsuits), and three motions for summary

judgment (because the question is one of fact to be resolved at trial). (Id.)

On the eve of trial, the United States Supreme Court handed down AT&T

Mobility LLC v. Concepcion, 563 U.S. 333 (2011), holding that the Discover Bank

rule is preempted by the FAA. On June 10, 2011, this Honorable Court entered an

order granting Defendants’ motion to compel arbitration and stayed this action until

one million class members participate in individual, nonbinding arbitration. (Dkt.

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811.) On October 25, 2012, this Court denied Plaintiff’s motion for reconsideration.

(Dkt. 827, 829.) Although this Court also denied a second reconsideration motion,

on April 25, 2013, this Court, over Defendants’ opposition, granted Plaintiff’s

motion to certify its order for interlocutory appeal under 28 U.S.C. §1292(b). (Dkt.

837, 841.) The Ninth Circuit granted Plaintiff’s petition to appeal (Dkt. 1 in 9th

Cir. Case No. 13-80105), also over Defendants’ opposition, and the appeal was

fully briefed and oral argument occurred on July 10, 2015.

Pursuant to the Settlement,2 Defendants shall pay $4.2 million into a

Settlement Fund, which will first be used to pay Class Counsel's fees ($1.9 million)

and costs ($223,061.41), a service award to the Class Representative ($5,000), and

the Settlement Administrator’s costs . (Settlement ¶9; Kick Decl. ¶47.) The

remaining funds (i.e., the Net Settlement Fund) will then be used to pay Class

Members who submit valid claims. They each will receive an equal share of the

Net Settlement Fund, up to a cap of $124, (Settlement ¶9(e)), which is about 150%

of the average of the estimated average of the premiums paid. (Kick Decl. ¶34-35.)

The release by the class members given in consideration of the Settlement is

narrowly tailored, limited to all claims they made, could have made, or in any way

arise out of any allegations by any class member concerning alleged wrongdoing in

the action between August 1, 2003 and April 2, 2008. (Settlement ¶15; see Hesse

v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010) (scope of release is proper where

it only releases claims based on the factual predicate of the complaint). No money

will revert to Defendants. (Settlement ¶9(g).) B. This Court should grant final approval of the Settlement because it is fair, adequate, and reasonable. The Ninth Circuit has “repeatedly noted that `there is a strong judicial policy

2 The Settlement Agreement is attached as Exhibit 1 to the Declaration of Taras Kick in Support of Unopposed Motion for Preliminary Approval (“Kick Prelim. Decl.,” Dkt. 852-3) filed and dated November 2, 2015. Any terms used here that are defined by the Settlement shall have the same meaning as defined therein.

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that favors settlements, particularly where complex class action litigation is

concerned.'” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015). “[T]he court’s

intrusion upon what is otherwise a private consensual agreement negotiated

between the parties to a lawsuit must be limited to the extent necessary to reach a

reasoned judgment that the agreement is not the product of fraud or overreaching

by, or collusion between, the negotiating parties, and that the settlement, taken as a

whole, is fair, reasonable and adequate to all concerned.” Hanlon v. Chrysler

Corp., 150 F.3d 1011, 1027 (9th Cir. 1997)

Whether a settlement is fair, adequate, and reasonable is determined by the

following factors: “`(1) the strength of the plaintiff's case; (2) the risk, expense,

complexity, and likely duration of further litigation; (3) the risk of maintaining

class action status throughout the trial; (4) the amount offered in settlement; (5)

the extent of discovery completed and the stage of the proceedings; (6) the

experience and view of counsel; (7) the presence of a governmental participant;

and (8) the reaction of the class members of the proposed settlement.'” Resnick v.

Frank (In re Online DVD-Rental Antitrust Litig.), 779 F.3d 934, 944 (9th Cir.

2015). As discussed below, these factors demonstrate that the Settlement is fair,

adequate, and reasonable. 1. The Settlement is entitled to a presumption of fairness. “The involvement of experienced class action counsel and the fact that the

settlement agreement was reached in arm's length negotiations, after relevant

discovery had taken place create a presumption that the agreement is fair.” Roberti

v. OSI Sys., 2015 U.S.Dist.LEXIS 164312 (C.D. Cal. 2015). Such a presumption

applies in this case: “[a]t all times, the settlement negotiations were at arms’ length

and adversarial” (Kick Decl. ¶42, 44), conducted by capable and experienced

counsel (id. ¶2), and occurred after nine years of litigation generating 857 docket

entries to date, and after both sides performed complete and formal discovery,

inclusive of 11 percipient and expert witness depositions and review of over

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103,725 pages of documents produced by Defendants; the only thing that did not

occur was the trial itself .3 The parties thus were intimately familiar with the

strengths and weaknesses of their respective cases and negotiating positions. See

Norton v. Maximus Inc., 2015 U.S.Dist.LEXIS 157934, *18-19 (E.D. Cal. 2015)

(“[a] settlement that occurs in an advanced stage of the proceeding indicates the

parties carefully investigated the claims before reaching resolution”).4

Further, the settlement was the product of a mediator’s proposal by an

experienced mediator, the Honorable Peter Lichtman, the former head of settlement

of complex litigation and class actions in the complex courthouse in Los Angeles

County. (Kick Decl. ¶44.) Prior to the parties’ acceptance of the mediator's

proposal on August 14, 2015, all negotiations at all times were arm’s length and

adversarial. (Id. ¶¶42, 44.) The negotiations with Judge Lichtman lasted for a year,

beginning in June 2014 (id.), and, there were prior negotiations involving three

other private mediators, all with JAMS, including a retired California Supreme

Court Justice. (Id. ¶43.) “The assistance of an experience mediator in the

settlement process confirms that the settlement is non-collusive.” Roberti, 2015

U.S.Dist.LEXIS 164312, *10.

2. Class Counsel’s recommendation is entitled to great weight.

‘Great weight’ is accorded to the recommendation of counsel, who are most

closely acquainted with the facts of the underlying litigation.” Nat’l Rural

3 The matter was set for trial, and then continued several times. The case was set to start trial on March 2, 2010. (Dkt. 122.) The trial was continued to September 2010 (Dkt. 672), and then continued to November 15, 2010 (Dkt. 676). The case was next scheduled to go to trial on January 25, 2011 (Dkt. 708), and then continued to February 22, 2011 (Dkt. 747, 770). 4 Because the settlement occurs after class certification (almost six years ago, on April 19, 2010 (Dkt. 644)), whereby this Court already found that Plaintiff and Class Counsel satisfy the adequacy requirement, the settlement is not subject to “heightened scrutiny” for collusion among the parties. Resnick, 779 F.3d at 944 n. 6; see Jones, 654 F.3d at 46-947; Rodriguez, 563 F.3d at 963-64.

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Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004). Class

Counsel — experienced in litigating and settling consumer class actions and other

complex matters, and having acted as lead counsel in numerous successful

consumer class actions (Kick Decl. ¶¶ 2, 3) — recommends approval of the

settlement. (Kick Decl. ¶45.) 3. The amount offered in settlement ($4.2 million) is fair, adequate, and reasonable. Class Counsel believes the settlement not only is fair, reasonable, and

adequate, but is an excellent result for the class. (Kick Prelim. Decl. ¶45.) This

exceeds the standard in the Ninth Circuit, “Naturally, the agreement reached

normally embodies a compromise; in exchange for the saving of cost and

elimination of risk, the parties each give up something they might have won had

they proceeded with litigation.” Officers for Justice v. Civil Serv. Comm’n, 688

F.2d 615, 624 (9th Cir. 1982). Further, “it is well-settled law that a proposed

settlement may be acceptable even though it amounts to only a fraction of the

potential recovery that might be available to the class members at trial.” Nat'l

Rural, 221 F.R.D. at 27 (citing Linney v. Cellular Alaska P’ship, 151 F.3d 1234,

1242 (9th Cir. 1998). Here, “the strength of [the] case relative to the risks of

continued litigation,” more than shows the settlement to be fair, adequate, and

reasonable. Lane, 696 F.3d at 823. a. The Class faced sizable obstacles to recovery, each bearing significant risk: Judge Dickran Tevrizian (Ret.), in his concurrently filed declaration in

support of fees in this case, summarizes some of the risks in this case. (Decl.

Tevrizian ¶12.) They include: i. Risk at the Ninth Circuit The trial in this action was derailed by the Supreme Court’s decision of

Concepcion. (Kick Prelim. Decl. ¶¶12-14.) Following Concepcion, on June 10,

2011, this Court granted Defendants’ motion to compel individual arbitration of

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virtually all of the class members' claims and ordered this action stayed until those

absent class members each participate in individual, non-binding arbitration. (DE

811.) While Class Counsel was able to convince this Court to certify its order for

interlocutory appeal after this Court denied Plaintiff's motion for reconsideration,

and was able to convince the Ninth Circuit to grant permission for an interlocutory

appeal (Kick Decl. ¶¶28-30), the strongest argument against the enforceability of

the arbitration agreement — that the FAA does not apply to arbitration agreements

for non-binding argument — faces the seemingly insurmountable obstacle of ,

Wolsey, Ltd. v. Foodmaker, Inc., 144 F.3d 1205 (9th Cir. 1998), a Ninth Circuit

decision expressly holding that the FAA applies to such arbitration agreements.

The appeal would be reinstated if the settlement is not approved. It is

uncertain as to what the ultimate Ninth Circuit ruling would be. If the Ninth Circuit

affirms this Court order compelling arbitration, likely class members would receive

no recovery at all. As Mr. Hennigan explains, “No rational class member would

pursue an $80 restitution claim in non-binding arbitration.” (Hennigan Decl. ¶15.)

As this Court itself recognized early in this case, if class members were all

first forced to go through a non-binding arbitration before being allowed to be part

of the class action, there would not be any class action, and there likely would not

be any recovery of any sort for the class members: “However, if every class member in a class action suit were forced to individually arbitrate its claims before participating in a class action suit, this would effectively prevent class action suits entirely. Class members with potentially small damage amounts would be strongly discouraged from participating in a class action lawsuit if they were first required to arbitrate their claims before participating in the class action suit. Thus, the arbitration clause would act as an effective barrier to class action lawsuits, rather than being merely an additional procedural step in bringing a class action lawsuit. (Dkt. 83, pp. 3-4.)

ii. the highly subjective nature of the claim:

This case is not a clean case of fraudulent omissions or misrepresentations. It

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is one of alleged inadequate disclosure, alleging that Defendants engaged in

deceptive advertising by selling handset insurance representing that the replacement

phones will be of “like kind, quality and value” to the lost phone without disclosing

that the replacement phones were sometimes refurbished rather than new, and also

might differ in other ways. It cannot be said that this fact is not disclosed at all. It

is disclosed on the third page of the program brochure. (Kick Decl. ¶32). The

question is one of whether the overall marketing of the insurance is nonetheless

misleading. The issue is inherently subjective. As Judge Tevrizian states, this is a

substantial risk. (Tevrizian Decl. ¶12.) Indeed, in an earlier class action involving

Asurion’s cell-phone insurance program for Verizon customers and involving

similar allegations of inadequate disclosures regarding refurbished phones was

dismissed at the demurrer stage by the Superior Court for the State of California,

County of Orange, before Plaintiff commenced the lawsuit in this case. (Kick Decl.

¶32, (Webster v. Verizon Wireless, LLC, Case No. 02CC00284, October 5, 2004.)

iii. Plaintiff’s loss in the nonbinding arbitration:

Class representative Ms. Cole actually went through the non-binding

arbitration, paid $3,250 in fees for the non-binding mediation process, was

represented by two attorneys, put on expert testimony, and lost. (Kick Decl. ¶32).

This was a very telling fact about the risk of the case. (Hennigan Decl. ¶14.)

iv. existing risk of maintaining class certification:

Defendants have stated that, in the event that the Class prevails in the Ninth

Circuit appeal, they will move to decertify the action. (Kick Decl. ¶32.) In fact, in

an earlier action involving a different cell-phone insurer, but also involving alleged

inadequate disclosure regarding refurbished phones, the United States District

Court for the Southern District of Florida denied the motion for class certification.

(Kick Decl. ¶32, (Sanchez v. The Signal and Signal Holdings, USDC Case No.

1:05-cv-22259, April 3, 2007 Class Certification Order).) And more recently, in

another case involving cell phone insurance, this one related to Apple’s iPhone,

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class certification was also denied. (English v. Apple, USDC Case No. 14-cv-

01619-WHO, January 5, 2016 Order Denying Class Certification.) The risk of

maintaining class certification must be accounted for and also favors settlement.

See, e.g., McKenzie v. Fed. Exp. Corp., 2012 WL 2930201, *4 (C.D. Cal. 2012).

v. risk of no restitution award:

Even if the Class were to prevail at trial, there is a risk that no restitution

would be awarded. In a much-watched California consumer case regarding

misrepresentation the California Court of Appeal recently affirmed a denial of

restitutionary relief. In re Tobacco Cases II, 240 Cal.App.4th 779 (2015). Further,

as pointed out by Judge Tevrizian, the damages model presented complicated issues

of proof, measuring the difference in value between a replacement phone program,

which always provides new phones, and one which sometimes provides refurbished

phones. (Tevrizian Decl. ¶12.) b. The most that the Class could reasonably expect to recover was $7.8 million. In a fraud case such as this one, the most likely result, if the Class had

prevailed at trial and received a restitution award at all, would have been an

aggregate class award of $7.8 million. (Declaration of Economist Daniel Linde in

Support of Motion for Preliminary Approval [“Linde Decl.”], ¶15.) Although

total premiums paid for the insurance during the class period are approximately

$90.1 million (Linde Decl. ¶14) and Class Counsel may have argued for this, the

normal measure of damages in cases based on fraud, such as this, is the difference

in value between what was represented and what was received. Civil Code section

3343, subdivision (a), provides: "One defrauded in the purchase, sale or exchange

of property is entitled to recover the difference between the actual value of that with

which the defrauded person parted and the actual value of that which he received..."

As the California Supreme Court explained in Cortez: “[i]n a fraud action,” the

award of damages is based on “the difference between the actual value of that

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which the defrauded person parted and the actual value of that which he received.”

The same is true for violation of the UCL’s fraudulent prong. In re Vioxx Class

Cases, 180 Cal.App.4th 116, 131 (2010).

Class Counsel believes that the most likely restitutionary number the class

would have received in aggregate, had it prevailed at trial, is $7.8 million. (Kick

Decl. ¶¶34-35.) The probability of receiving a refurbished phone under the

program which is the subject of this class action was 57.7%. (Linde Decl. ¶13.) As

economist Daniel Linde explains, therefore the diminution in value as a result of

Defendants’ use of refurbished phones to fulfill claims can be calculated by

determining the probability of receiving a refurbished phone (57.7%), then

factoring in the value of a refurbished phone versus a new phone (85%). (Linde

Decl. ¶14.) As Mr. Linde further explains, by then dividing the aggregate

premiums by the possibility of receiving a refurbished phone, then deducting 85%

of that number, one arrives at a figure of $7.8 million in diminution in value as a

result of Defendants’ use of refurbished phones. (Linde Decl. ¶15.) In other words,

in Class Counsel’s opinion, and as illustrated by economist Linde, the most likely

class award in a fraud-based case such as this one, were the class to prevail, would

be the difference in value between an insurance program which provides new

phones in all cases, and one which provides refurbished phones in 57.7% of cases

as the Defendants did. (Linde Decl. ¶13.)

The $4.2 million settlement amount therefore represents about 54% of the

actual likely recovery at trial were the class to prevail. (Kick Prelim. Decl. ¶36.)

This is an excellent result, well above the amount of settlements granted final

approval by courts within the Ninth Circuit. E.g., Stovall-Gusman v. W.W.

Granger, Inc., 2015 U.S.Dist.LEXIS 78671, *12-13 (N.D. Cal. 2015) (7.3% of the

“estimated trial award”); In re Toys R Us-Del., Inc.—Fair & Accurate Credit

Transactions Act (FACTA) Litig., 295 F.R.D. 438, 453-54 (C.D. Cal. 2014) (3%);

In re LDK Solar Secs. Litig., 2010 U.S.Dist.LEXIS 87168, *6 (N.D. Cal. 2010) (5%

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of “plaintiff's expert estimated damages”); Omnivision, 559 F.Supp.2d at 1042

(9% of “Plaintiffs’ damages expert estimated damages”).

c. Continued litigation would take years.

This Court also should consider that the Settlement provides for payment to

the Class now, rather than a speculative payment sometime in the distant future.

Churchill, 361 F.3d at 575 (holding that courts should consider the “likely duration

of further litigation” in deciding whether to approve class settlements). “In most

situations, unless the settlement is clearly inadequate, its acceptance and approval

are preferable to lengthy and expensive litigation with uncertain results.” Nat’l

Rural, Inc., 221 F.R.D. at 526. A trial in this action cannot even occur unless the

Class prevails in the currently pending appeal, which may necessitate significant

additional time if it is heard by an en banc panel. Even if an en banc panel would

rule in favor of the Class, there is a risk that the issue would go up to the Supreme

Court given that there is a split in the circuits as to whether the FAA covers

nonbinding arbitration, with two circuit decisions holding that the FAA covers

nonbinding arbitration. Dow Corning v. Safety Nat’l Cas., 335 F.3d 742 (8th Cir.

2003); United States v. Bankers Ins., 245 F.3d 315 (4th Cir. 2001).

This risk is heightened given that the Supreme Court has had a particular

interest in arbitration and class action cases in the last several years, exemplified by

Concepcion; Am. Expr. Co. v. Italian Colors Res.,133 S.Ct. 2304 (2013); Comcast

v. Behrend, 133 S. Ct. 1246 (2013); Oxford Health Plans LLC v. Sutter, 133 S.Ct.

2064 (2013); Marmet Health Care Ctr., Inc. v. Brown, 132 S.Ct. 1201 (2012);

and, most recently, DIRECTV, Inc. v. Imburgia, 136 S.Ct. 463 (Dec. 14, 2015).

Even if the Class eventually prevails on the appeal, and then also prevails at

trial, the Class would still have to wait years more for the end of a “likely”

subsequent appeal. (Kick Decl. ¶40.). See LinkedIn, 309 F.R.D. at 587 (“the losing

party is likely to appeal [any judgment following the trial], further raising the costs

in terms of both time and money. Because continued litigation would be risky,

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costly, complex, and long, this factor favors settlement”) (citations omitted).

4. The settlement structure is fair, adequate, and reasonable.

Under the settlement, the net settlement fund will be distributed to all class

members who submit valid claims. The amount each will receive depends on the

participation rate, but all who submit valid timely claims will receive a pro rata

share capped at about 150% the average of the premiums paid. (Settlement

Agreement ¶9(e)(2).) To date, according to the claims administrator, there have

been 20,211 claims filed. (Cooper Decl. ¶13.) This means if fees and costs are

awarded in the full amount as requested, each class member would receive

approximately $81, which on average is equal to approximately a 100% refund of

total premiums paid by that class member, and more than ten times the average

class member’s restitution as calculated by economist Linde. (Kick Decl. ¶35.)

This is arrived at by taking the aggregate restitution of $7.8 million and dividing by

the more than 1 million class members, for an average restitution per class member,

had this case gone to trial, of less than $8 per class member. (Kick Decl. ¶35.)

One additional outstanding feature of this settlement is that the $4.2 million

settlement fund is real, not illusory. Unlike some claims-made settlements where

unclaimed funds revert to the defendant (see, e.g., In re TJX Companies Retail Sec.

Breach Litig., 584 F.Supp. 2d 395, 405 (D. Mass. 2008) (“in ... a claims-made

settlement, the defendant is likely to bear only a fraction of the liability to which it

agrees”)), not a single penny of the $4.2 million settlement fund will revert to

Defendants. Instead, if any of the $4.2 million settlement fund remains after

payment to class members who submit claims, this remainder will be distributed to

cy pres recipients. (Settlement ¶9(g).) 5. The positive response from the absent class members. As of the date of the filing of this motion, although 20,211 already have

made claims, only five class members requested exclusion from the settlement, and

to date no class member has objected. (Cooper Decl. ¶¶11, 12). This positive

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response of the class members to the Settlement further supports final approval.5

C. The requested attorneys’ fees should be approved.

Class Counsel’s timesheets and work have been reviewed by three highly

respected experts, The Honorable Dickran Tevrizian, former judge of the Central

District; fee expert Richard Pearl, the State’s leading experts on attorney fee issues

and the author of state and federal manuals on attorney fee awards, including

California Attorney Fee Awards, 2d Ed., published by CEB in 1994 and updated

annually; and, J. Michael Hennigan, one of California’s most prominent complex

litigation attorneys. All three are in agreement that the full $1.9 million requested

should be awarded, and that in fact the full $3.5 million lodestar was fully earned

and justified. “It is my opinion that the $3.5 million lodestar is reasonable,

appropriate and fully justified, and, in fact, is modest for the complexity of this

case.” (Tevrizian Decl. ¶6.) “Based on my review of counsel’s time records and

miscellaneous work product, the total attorneys’ fees requested by Plaintiff’s

attorneys here are eminently reasonable (Pearl Decl. ¶20.) “It is my opinion that the

attorneys’ fees sought by The Kick Law Firm, APC, are justified and should be

awarded in full.” (Hennigan Decl. ¶6.) These experts also have commented on

Class Counsel’s caliber of work. “I was impressed by the work that TKLF

performed, and the way it approached this case, including its thoroughness and

determination which I believe were necessary to obtain this proposed settlement.”

(Tevrizian Decl. ¶11.) “It is my opinion that the class recovery in this case is due to

the high caliber and tenacious work of The Kick Law Firm.” (Hennigan Decl. ¶11.)

Despite this, Class Counsel seeks only the agreed $1.9 million in fees, a

reduction Class Counsel’s $3.5 million lodestar of about 46%.6 5 Stoetzner v. U.S. Steel Corp., 897 F.2d 115, 118-19 (Cir. 1990) (the response of class members “strongly favors” settlement even when 10 percent object). 6 “In a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’ agreement.” F.R.C.P. Rule 23(h). “Attorneys’ fees provisions included in proposed class action

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In terms of legal basis for fees, in this class action attorney fees are

authorized, inter alia, by the fee-shifting statute of California Civil Procedure Code

§1021.5, California’s codification of the private attorney general doctrine. As

discussed below, the “statutory fee principles” include the principles that the award

of fees is to be determined by the lodestar approach and that the award is to be fully

compensatory in light of the public policy underlying §1021.5.

1. State law governs the award of attorney fees.

In the Ninth Circuit, in a diversity case, state law governs not only

entitlement to fees, but calculation of reasonableness of fees. See Mangold v. Cal.

Pub. Utils. Comm'n, 67 F.3d 1470, 1478–79 (9th Cir.1995); Rodriguez v. Disner,

688 F.3d 645, 653 n.6 (9th Cir. 2012). Therefore, “[t]he task ... is to approximate

state law as closely as possible ....” Orkin v. Taylor, 487 F.3d 734, 714 (9th Cir.

2007). “In interpreting state law, we are bound to follow the decisions of the state’s

highest court. When the state’s highest court has not spoken on an issue, we must

determine what result the court would reach if we were standing in its shoes ....”

Johnson v. Riverside Healthcare Sys., L.P., 534 F.3d 1116, 1125 (9th Cir. 2008). 2. Under state law, the lodestar approach governs the award of attorney fees, and the award is to be “fully compensatory.” The California Supreme Court has repeatedly instructed that the lodestar

approach govern the award of attorney fees, especially in an action involving the

fee-shifting statute of §1021.5. E.g., Chavez v. City of Los Angeles, 47 Cal.4th 970,

985 (2010); Graham v. DaimlerChrysler Corp., 34 Cal.4th 553, 578-79 (2004)

(§1021.5 case); Ketchum v. Moses, 24 Cal.4th 1122, 1131-32 (2001); Maria P. v.

Riles, 43 Cal.3d 1281, 1294-95 (1987); Press v. Lucky Stores, Inc., 34 Cal. 3d 311,

321-22 (1983) (§1021.5 case); Serrano v. Unruh (Serrano IV), 32 Cal. 3d 621,

624-25, 639 (1982) (§1021.5 case); Serrano v. Priest (Serrano III), 20 Cal.3d 25, agreements are, like every other aspect of such agreements, subject to the determination whether the settlement is ‘fundamentally fair, adequate and reasonable.’” Staton v. Boeing Co., 327 F. 3d 938, 963-64 (9th Cir. 2003).

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49 n. 23 (1977) (§1021.5 case). Over the last 40 years, these pronouncements have

been consistent and emphatic. As it instructed in Press: “Serrano III requires the

trial court to first determine a `touchstone' or `lodestar' figure ....” 34 Cal.3d at 321-

22. As summarized in Chavez: “[u]nder §1021.5, if a court determines that

attorney fees should be awarded, computation of those fees is based on the lodestar

adjustment method ....” 47 Cal.4th at 985.

Because the California Supreme Court has not previously squarely addressed

the issue of fees awarded in a class action involving a common fund, there had been

some question as to whether the percentage approach, not uncommon in federal

cases involving such class action cases, could also be used under state law. E.g.,

Dunk v. Ford Motor Co., 48 Cal.App.4th 1794, 1809 (1996) (“[t]he award of

attorney fees based on a percentage of a 'common fund' recovery is of questionable

validity in California”). That issue is now under review by the California Supreme

Court in Laffitte v. Robert Half Int’l, S222996, review granted Feb. 25. 2015, a case

involving a class action where attorney fees were awarded based on the percentage

approach. As such, the only accepted method for calculating appropriate fees in a

California action such as this while Laffitte is reviewed is the lodestar.7 The

California Supreme Court has repeatedly approved its use and the California Court

of Appeal has applied it in class action cases resulting in a common fund. E.g.,

Lealao, 82 Cal.App.4th at 26 (“[i]n a class action governed by California law where

the responsibility to pay attorneys’ fees is statutorily or otherwise transferred from

the prevailing plaintiff or class to the defendant, the primary method for

establishing the amount of reasonable attorneys’ fees is the lodestar method”); Kim

v. Space Pencil, Inc., 2012 U.S.Dist.LEXIS 169922 (N.D. Cal. 2012) (because 7 The California Supreme Court also stated in Serrano III, its seminal decision on this issue: 'The starting point of every fee award ... must be a calculation of the attorney’s services in terms of the time he has expended on the case. [This] is the only way of approaching the problem that can claim objectivity, a claim which is obviously vital to the prestige of the bar and the courts.' 20 Cal.3d at 48 n. 23.

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California state law governs, “[t]he lodestar analysis is the appropriate method to

determine fees in this case”) (citing Lealao). As Judge Tevrizian declares, “I

believe using a lodestar methodology is the appropriate manner of determining fees

in this particular case.” (Tevrizian Decl. ¶14.) This is especially true in this action

involving the fee-shifting statute of §1021.5. In such a case, it is proper to measure

the fees “against statutory fee principles.” Staton, 965 F.2d at 969. Under state

law, the statutory fee principle governing fees under §1021.5 is that the lodestar

approach governs. E.g., Chavez, 47 Cal.4th at 985.

Consistently, the federal courts have repeatedly held that awards under

federal fee-shifting statutes are governed by the lodestar method: “[u]nder a fee-

shifting statute, the court `must calculate awards for attorneys’ fees using the

`lodestar method' ....” Staton, 965 F.3d ; see Jones, 654 F.3d at 941 (“[t]he

‘lodestar method’ is appropriate in class actions brought under fee-shifting

statutes”); Antoninetti v. Chipotle Mexican Grill, Inc., 643 F.3d 1165, 1176 (9th

Cir. 2010) (“under federal fee-shifting statutes ‘the lodestar approach’ is the

guiding light’ in determining a ‘reasonable’ fee”).

Under state law, the statutory fee principle governing fees under §1021.5 also

includes the principle that the fees should be fully compensatory. The California

“Supreme Court has explained that an attorney fee award, including an award under

[§1021.5], `should be fully compensatory' and, absent `circumstances rendering the

award unjust, an … award should ordinarily include compensation for all the hours

reasonably spent, including those relating solely to the fee.'” Building a Better

Redondo v. City of Redondo Beach, 203 Cal.App.4th 852, 870 (2012). This is true

even if, unlike here, the fees are more than the amount of the monetary recovery.

E.g., Notrica v. State Comp. Ins. Fund, 70 Cal.App.4th 911, 955 (1999) (approving

attorney fee award of triple (3x) the compensatory damages as consistent with the

purposes underlying §1021.5 “to encourage litigation in the public interest by

covering such fees”). The Ninth Circuit itself recognizes that the public policy

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underlying consumer protection statutes compels using an approach that does not

decrease the loadstar based on the monetary amount recovered: “We have specifically instructed that `courts should not reduce lodestars based on relief obtained simply because the amount of damages recovered on a claim was less than the amount requested.' Moreover, in City of Riverside, the Supreme Court ... expressly rejected the proposition that fee awards must be in proportion to the amount of damages recovered. See City of Riverside, 477 U.S. at 574 (affirming fee award of $245,456.25 when damages recovered were $13,300). The same is true in consumer protection cases: where the monetary recovery is generally small, requiring direct proportionality for attorney’s fees would discourage vigorous enforcement of the consumer protection statutes.”

Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1033 (9th Cir. 2012).

The use of the lodestar approach also makes the most sense in cases where,

as here, the recovery is not purely pecuniary. Hanlon, 150 F.3d at 1029; see also

Evon, 688 F.3d at 1033 (“that the lawsuit spurred [defendant] to cease unlawful

conduct is an important consideration, see id., that the district court failed to

recognize”). Here, in substantial part as a result of the filing of this action,

Defendants improved disclosures they make to potential customers, specifically

agreeing henceforth to `specifically inform' potential customers, at the time they

make a point-of-sale decision to enroll in an Asurion wireless protection plan

(among other things) the potential use of refurbished or different equipment to

satisfy claims. (Settlement ¶2; Declaration of Asurion VP Elliott Leschen ¶8).

And, in any event, the Ninth Circuit has cautioned courts that “[t]he

benchmark percentage should be adjusted, or replaced by a lodestar calculation,

when special circumstances indicate that the percentage recovery would be either

too small or too large in light of the hours devoted to the case or other relevant

factors.” Six (6) Mexican Workers v. Arizon Citrus Growers, 904 F.2d 1301, 1311

(9th Cir. 1990). So it is here. (Tevrizian Decl. ¶14.)

3. Plaintiff is entitled to attorney fees under §1021.5.

“It is well settled that attorney fees under section 1021.5 may be awarded for

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consumer class action suits benefiting a large number of people.” Graham, 34

Cal.4th at 578. Plaintiff satisfies the requirements for §1021.5 fees. See, e.g.,

Beasley v. Wells Fargo Bank, 235 Cal.App.3d 1407, 1417-18 (1991) (awarding

§1021.5 fees in consumer class action against bank for charging fees that were not

valid as liquidated damages). First, Plaintiff qualifies as a “successful”/“prevailing”

party because she obtained through the Settlement some of the benefit she sought in

this action: “[i]t is undisputed that relief obtained through a settlement may qualify

a plaintiff as the prevailing party, even in the presence of a stipulation disclaiming

liability on the merits.” Lyons, 136 Cal.App.4th at 1345-46. Second, her lawsuit

“concerned the enforcement of the California consumer protection laws—an

important right affecting the public interest.” Colgan v. Leatherman Tool Grp. Inc.,

135 Cal.App.4th 663, 703 (2006). Third, the litigation conferred a “significant

benefit”: the pecuniary benefit to the class members and the nonpecuniary benefit

of causing a change in Defendants’ disclosure practices. See, e.g., Estrada v.

FedEx Ground Package Systems, Inc., 154 Cal.App.4th 1, 16-17 (2006) (“[the

plaintiff] ... pursued this public interest class action not only for himself but on

behalf of a class ... and ultimately obtained awards for 209 [employee] drivers. ...

No more is required to satisfy the ‘significant benefit,’ ‘public interest,’ and ‘large

class of persons’ requirements of [§1021]”). Fourth, the necessity of private

enforcement was such as to make an award appropriate. Public enforcement was

inadequate. Public enforcement was inadequate because the government failed to

take action (e.g., San Diegans for Open Govt. v. Har Constr., Inc., 240 Cal.App.4th

611, 630 (2015)), and, in any event, public enforcement would have been

inadequate due to the Insurance Commissioner’s lack of statutory authority to order

restitution (State Compensation Ins. Fund v. Sup. Ct., 24 Cal.4th 930, 938 (2001).

Fifth, and finally, the financial burden of private enforcement was such as to make

an award appropriate. This is because the “estimated value of the case” (i.e. the

financial benefits obtained of $4.2 million, discounted by the probability of success

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of less than 25% at the time the critical litigation decisions were being made (Kick

Decl. ¶33 ), due to the risks posed by the nature of this case) does not “exceed by a

substantial margin” the actual litigation costs ($3.5 million in attorney fees plus

costs). See Whitley, 50 Cal.4th at 1215-16 (explaining the test for §1021.5’s

financial burden requirement).8 4. Class Counsel’s lodestar is reasonable. The $1.9 million in attorney fees requested is 46% less than the lodestar.

(Kick Decl. ¶¶52-81.)

a. The number of hours were reasonably necessary.

This nine-year old case has generated 857 docket entries to date, manifesting

its vigorously contested nature. Class Counsel’s lodestar is properly documented

by the accompanying declaration of Taras Kick, summarizing and providing a

detailed description and number of hours of work performed. (Kick Decl. ¶¶52-

81.)9 The work also has been reviewed and approved by expert declarants Judge

Tevrizian, Mr. Pearl, and Mr. Hennigan. (See Section II.B., supra.) The work

performed runs the entire gamut of litigation up to the eve of trial and even a fully-

briefed-and-argued interlocutory appeal to the Ninth Circuit concerning the

arbitration clause in the insurance policy. While no reduction in the number of

hours is warranted, the requested amount of attorney fees of $1.9 million constitutes

a $1.6 million reduction from the $3.5 million lodestar. Such a steep 46%

reduction, virtually halving the lodestar, should alleviate any concerns this Court 8 Of course, even if arguendo §1021.5 did not apply, Plaintiff would be entitled to attorney fees under the common fund doctrine: “a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole.” Staton, 327 F.3d at 967; see generally Jones, 654 F.3d at 941 (“[t]he award of attorneys’ fees in a class action settlement is often justified by the common fund or statutory fee-shifting exceptions to the American Rule, and sometimes by both”). 9 California state law does not require the submission of these time sheets. E.g., In re Sutter Health Uninsured Pricing Cases, 171 Cal.App.4th 495, 512 (2009); Chavez v. Netflix, Inc., 162 Cal.App.4th 43, 65 (2008).

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might have regarding the reasonableness of the number of hours spent. As the

Ninth Circuit explains: “The court is not ‘required to set forth an hour-by-hour analysis of the fee request[,] ... [and] when faced with a massive fee application the district court has the authority to make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure as a practical means of trimming the fat from a fee application.’”

Schwarz v. Sec’y of Health & Human Servs., 73 F.3d 895, 906 (9th Cir. 1995).

Even if arguendo there were fat in the lodestar (there is not), the 46% cut already

cut all the fat and then some. See Moreno v. City of Sacramento, 534 F.3d 1106,

1112 (9th Cir. 2007) (allowing trial court to “impose a small reduction, no greater

than 10 percent--a 'haircut'--based on its exercise of discretion and without a more

specific explanation”), 1112-13 (a cut of 25 percent for duplicative work was

unacceptable without a specific explanation, especially given the attorney’s own

reduction of her fees by 9 percent).

Also, the Ninth Circuit teaches that in a risky case, “It must also be kept in

mind that lawyers are not likely to spend unnecessary time on contingency fee

cases in the hope of inflating their fees. The payoff is too uncertain, as to both the

result and the amount of the fee...By and large, the court should defer to the

winning lawyer’s professional judgment as to how much time he was required to

spend on the case.” Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir.

2008) (Kozinski, J.). As already detailed, this case was very risky. (Kick Decl.

¶¶32-33.) Indeed, in an earlier class action involving Asurion’s cell-phone

insurance program for Verizon customers and involving similar allegations of

misrepresentations and/or inadequate disclosures regarding refurbished phones was

dismissed at the demurrer stage by the Superior Court for the State of California,

County of Orange, before the plaintiff commenced the lawsuit in this case. (Kick

Decl. ¶32 (Webster v. Verizon Wireless, LLC, Case No. 02CC00284, October 5,

2004 Minute Order)).) And, in an earlier action involving a different cell-phone

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insurer, but also involving alleged inadequate disclosure regarding refurbished

phones, the United States District Court for the Southern District of Florida denied

the motion for class certification. (Kick Decl. ¶32 (Sanchez v. The Signal and

Signal Holdings, USDC Case No. 1:05-cv-22259, April 3, 2007 Class Certification

Order)).) Recently, in yet another case involving cell phone insurance, this one

related to Apple’s iPhone, class certification was also denied. (Kick Decl. ¶32.)

b. The hourly rates are reasonable.

Class Counsel’s hourly rates are reasonable. The attorneys’ qualifications

and experience well support their respective hourly rates (Kick Decl. ¶¶2-3, 52-81),

as the esteemed Mr. Pearl attests to in detail (Pearl Decl. ¶¶13-19). See Davis v.

City of San Diego, 106 Cal.App.4th 893, 902-03 (2003) (the declaration by the

plaintiff’s counsel is sufficient to attest to the fact that the hourly rates are in line

with those prevailing in the community for similar services by lawyers); United

Steelworkers . v. Phelps Dodge., 896 F.2d 403, 407 (9th Cir. 1990) (“[a]ffidavits of

the plaintiffs’ attorney and other attorneys regarding prevailing fees in the

community, and rate determinations in other cases, particularly those setting a rate

for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market rate”).

Mr. Hennigan (¶19) and Judge Tevrizian (¶15) also attest the rates are reasonable.

In fact, Class Counsel’s same hourly rates have been specifically approved

by courts in other consumer class actions. (Kick Decl. ¶80.) Long, 2014 U.S.Dist.

LEXIS 101670, (“[a] court is justified in relying on a requesting counsel’s recently

awarded fees when setting that counsel’s reasonable hourly rate”). 5. Even though the $1.9 million requested fee award represents a negative multiplier, a positive multiplier is supported. Although the requested fees represent a negative lodestar multiplier

(0.54, i.e., a reduction of 46% of the lodestar), a positive lodestar multiplier would

be justified had Class Counsel not agreed to the reduction. “Multipliers in the 3-4

range are common in lodestar awards for lengthy and complex class action

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litigation.” Miller v. CEVA Logistics USA, Inc., 2015 U.S.Dist.LEXIS 104704, *20

(E.D. Cal. 2015). Several factors justify such a positive lodestar multiplier, and

these are set forth in the declarations of The Hon. Dickran Tevrizian and Mr.

Hennigan. However, Class Counsel does not seek a positive multiplier, only the

agreed not to exceed $1.9 million, which is an approximate 46% reduced lodestar. 6. The requested fees are reasonable even under the inapplicable percentage approach. The requested fees are reasonable even under the inapplicable percentage

approach. The $1.9 million request represents about 45% of the common fund,

which in this case totals $4.2 million. Multiple factors justifying an upward

adjustment of the benchmark are present: “the extent to which class counsel

`achieved exceptional results for the class,' whether the case was risky for class

counsel, whether counsel's performance `generated benefits beyond the cash

settlement fund,' the market rate for the particular field of law (in some

circumstances), the burdens class counsel experienced while litigating the case

(e.g., cost, duration, foregoing other work), and whether the case was handled on a

contingency basis.” Resnick, 779 F.3d at 955 (emphasis added). Other courts have

approved well within this range in a case like this. See, e.g., Wells v. Allstate Ins.

Co., 557 F.Supp.2d 1, 7 (D. D.C. 2008) (fees totaling 45% of fund in consumer

protection action against insurer based on insurance claim mishandling:

approximately 10 years of litigation, 45% of common fund represented 55% of

lodestar, post-certification but no trial or appeal; Kritzer v. Safelite Solutions, LLC,

2012 U.S. Dist. LEXIS 74994, *28-29 (S.D. Ohio 2012) (awarding 52% of

settlement fund as fees: "There is no doubt that the result achieved for the class was

exceptional in this case.)”; See generally William Rubenstein, Alba Conte, &

Herbert B. Newberg, Newberg on Class Actions §17:25 (4th ed. 2008) ("[a]n upper

limit of 50 percent of the fund may be stated as a general rule, although even larger

percentages have been awarded.")

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D. The requested litigation costs should be approved.

This Court should approve payment of $223,061.41 attached as Exhibit “1”

to the Declaration of Taras Kick, as these all were necessary to the prosecution of

the case. (Kick Decl. ¶83(detailing the costs).) These costs are reasonable and

incurred in Class Counsel’s efforts to prosecute the class claims effectively. (Id.)

To the extent any are not recoverable under §1021.5, they are sought and

recoverable under the common fund doctrine. It is well-established that reasonable

costs that would normally be charged to a fee-paying client are recoverable from a

common fund. E.g., Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994); see

Omnivision, 559 F.Supp.2d at 1048-49 (“photocopying, printing, postage and

messenger services, court costs, legal research on Lexis and Westlaw, experts and

consultants, and the costs of travel for various attorneys and their staff throughout

the case”). Further, these costs also have been reviewed by expert Michael

Hennigan, and testified to as appropriate. (Hennigan Decl. ¶ 21.) There also were

more than an additional $200,000 in costs incurred on behalf of the class which are

not being sought to be recovered. . (Kick Decl. ¶83; Hennigan Decl. ¶ 21.)

E. The service award to the class representative should be approved.

It is common in class action cases to provide incentive awards to named

plaintiffs. See Newberg § 11:38 (4th ed. 2008). “The Ninth Circuit has established

$5,000 as a reasonable benchmark award for representative plaintiffs.” Chavez v.

PVH Corp., 2015 U.S.Dist.LEXIS 170422, *27 (N.D. Cal. 2015) ; Gaudin v.

Saxon Mortg. Servs., 2015 U.S.Dist.LEXIS 159020, *28 (N.D. Cal. 2015) (“[m]any

courts in the Ninth Circuit have also held that a $5,000 incentive award is

`presumptively reasonable'”). Such an award is all that is sought in this case, and is

appropriate. The class representative in this case was available for nine years, very

helpful to the prosecution of the case, sat for deposition, provided documents, and

was at all times attentive and involved. (Cole Decl. ¶¶3-5; Kick Decl. ¶84.)

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F. The requested fees and costs for notice and claims administration should be approved. The Settlement Administrator has estimated fees and costs for the Court

approved notice and claims process of $432,000, and has agreed to cap them at

$482,000. (Carameros Decl. ¶9.) The Court previously preliminarily approved

these sums, and the claims administrator has since effectuated the plan.

G. The proposed cy pres recipient should be approved.

Because there are already in excess of 20,000 claims, and each class member

is eligible to claim up to $124, it is likely there will not be much money left for a cy

pres recipient. To the extent there is any residue at all, any residue of the Net

Settlement Fund will not revert to Defendants but instead go to a non-profit

organization(s) to be approved by this Court. (Settlement ¶9(g).) Class Counsel

proposes the cy pres recipient be the University of California Davis School of Law

for the specifically earmarked purpose of an endowed faculty fellowship or chair

focusing on consumer rights, including such as those in this case, in the name of

retired California Supreme Court Justice Cruz Reynoso, as described in more detail

in the concurrently filed declaration of Dean Kevin R. Johnson of the law school.

III. CONCLUSION.

Based on the foregoing, Plaintiff respectfully requests that the Court finally

approve the Settlement — including the requested attorney fees and costs, class

representative incentive award, fees and costs of the settlement administrator, and

the proposed cy pres recipient — as fair, adequate, and reasonable, and, therefore,

in compliance with Federal Rules of Civil Procedure Rule 23(e).

Dated: January 11, 2016 Respectfully submitted,

The Kick Law Firm, APC

By: /s/Taras Kick Taras Kick James Strenio

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Attorneys For Plaintiff Wineesa Cole And the Certified Class

Documents

THE KICK LAW FIRM, APC Taras Kick (State Bar No. 143379)s... · THE KICK LAW FIRM, APC ... 643 F.3d 1165 (9th Cir. 2010) Beasley v. ... In re Sutter Health Uninsured Pricing Cases,