Case 3:14-cv-01037-CAB-BGS Document 47 Filed...

Case 3:14-cv-01037-CAB-BGS Document 47 Filed 10/23/15 of 16

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

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

AMISH PATEL, individually and on Case No.: 3:14-CV-1037-CAB-BGS behalf of all others similarly situated,

Plaintiff FINAL APPROVAL OF CLASS SETTLEMENT AND AWARD OF

v. ATTORNEYS' FEES

AXESSTEL, INC. et al.,

Defendants.

This matter is before the Court on Plaintiff’s unopposed motion for final approval of

class action settlement [Doc. No. 39], and Plaintiff’s unopposed motion for attorney’s fees

[Doc. No 39]. The Court held a hearing on these motions on October 15, 2015. As

discussed below, the motions are both GRANTED.

I. Background

On April 24, 2014, Jesse Cowan filed this securities fraud putative class action on

behalf of purchasers of securities of Axesstel, Inc. [Doc. No. 1.] The complaint named

Axesstel, H. Clark Hickock, and Patrick Gray as defendants. On July 22, 2014, the Court

granted an unopposed motion to appoint Amish Patel as lead plaintiff and approving

Glancy Binkow & Goldberg LLP as lead counsel for the putative class. [Doc. No. 9.] On

September 22, 2014, Plaintiffs filed an amended complaint against the same defendants.

3:14-CV-1037-CAB-BGS 1


1 [Doc. No. 13.]

2

On November 6, 2014, Defendants moved to dismiss the amended complaint for

3 failure to state a claim because, according to Defendants, the amended complaint did not

4 adequately allege scienter. The motion was fully briefed and taken under submission

5 without oral argument. On February 13, 2015, the Court denied Defendants’ motion. The

6 allegations against the Defendants are summarized in that order and will not be repeated

7 here.

8

After the motion to dismiss was denied, the parties exchanged initial disclosures,

9 submitted confidential early neutral evaluation conference statements to the assigned

10 Magistrate Judge, and filed a joint case management conference statement. However,

11 before the scheduled early neutral evaluation conference and before more comprehensive

12 formal discovery began, the parties notified the court that they had reached a settlement.

13

The key terms of the parties’ Stipulation of Settlement (the “Stipulation”) include:

14 • Defendants agreeing to pay $1,250,000.00 into a Settlement Fund, 1 to be

15

distributed as follows:

16

i. Settlement administration and notice costs;

17

ii. Plaintiffs’ attorneys’ fees and expenses;

18

iii. A payment to Patel for his costs and expenses, including lost wages;

19

iv. Payment of Taxes and Tax Expenses; and

20 v. Payment to class members pro rata as described in the notice sent to

21

the potential class members.

22 . A settlement class of “all persons and/or entities other than Defendants who

23 purchased Axesstel securities between February 28, 2013, and October 17,

24

2013.”

25

On June 10, 2015, Plaintiffs filed an unopposed motion for preliminary approval of

26 their settlement and establishing notice procedures to the class. [Doc. No. 32.] The Court

27

28 1 This order incorporates by reference the definitions in the Stipulation [Doc. No. 32-2 at 4-30].

3:14-CV-1037-CAB-BGS 2


1 granted this motion and preliminarily approved the settlement on June 19, 2015. [Doc. No.

2 33.] The preliminary approval order set a final approval hearing for October 15, 2015.

3

The final approval hearing took place as scheduled on October 15, 2015. Counsel

4 for both parties attended. No class members filed objections to the settlement, and no class

5 members attended the hearing.

6

II. Final Approval of Settlement

7

A. Certification of the Settlement Class

8

A court “must pay ‘undiluted, even heightened, attention’ to class certification

9 requirements in a settlement context.” Hanlon v. Chrysler Corp. , 150 F.3d 1011, 1019 10 (9th Cir. 1998). Here, the settlement envisions certification of a class of “all persons and/or

11 entities other than Defendants who purchased Axesstel securities between February 28,

12 2013, and October 17, 2013.” Thus, before approving the settlement itself, the Court’s

13 “threshold task is to ascertain whether the proposed settlement class satisfies the

14 requirements of Rule 23(a) of the Federal Rules of Civil Procedure applicable to all class

15 actions, namely: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of

16 representation.” Id. In addition, the Court must determine whether class counsel is

17 adequate (Fed. R.Civ. P. 23(g)), and whether “the action is maintainable under Rule

18 23(b)(1), (2), or (3).” In re Mego Fin. Corp. Sec. Litig. , 213 F.3d 454, 462 (9th Cir. 2000)

19 (quoting Amchem Prod. v. Windsor , 521 U.S. 591, 614 (1997)).

20

1. Numerosity

21

This requirement is satisfied if the class is “so numerous that joinder of all members

22 is impracticable.” Fed. R.Civ. P. 23(a)(1). Although the “requirement is not tied to any

23 fixed numerical threshold . . . courts find the numerosity requirement satisfied when a class

24 includes at least 40 members.” Rannis v. Recchia , 380 Fed. App’x 646, 651 (9th Cir. 2010).

25 Here, notice and proof of claim forms were mailed to at least 5,262 potential class

26 members. Joinder of all these potential plaintiffs would be impracticable. Accordingly,

27 this requirement has been met.

3:14-CV-1037-CAB-BGS

28

3


1

2. Commonality

2

This requirement is satisfied if “there are questions of law or fact common to the

3 class.” Fed. R.Civ. P. 23(a)(2). The Ninth Circuit construes this requirement permissively.

4 Hanlon, 150 F.3d at 1019. “To satisfy the commonality requirement, plaintiffs need only

5 point to a single issue common to the class.” Vasquez v. Coast Valley Roofing, Inc. , 670

6 F. Supp. 2d 1114, 1121 (E.D. Cal. 2009). In the securities fraud context, the Ninth Circuit

7 has held that when “[c]onfronted with a class of purchasers allegedly defrauded over a

8 period of time by similar misrepresentations, courts have taken the common sense approach

9 that the class is united by a common interest in determining whether a defendant’s course

10 of conduct is in its broad outlines actionable, which is not defeated by slight differences in

11 class members’ positions, and that the issue may profitably be tried in one suit.” Blackie

12 v. Barrack, 524 F.2d 891, 901 (9th Cir. 1975). Here, the commonality requirement is

13 satisfied because the issue of whether Axesstel made false and misleading statements in its

14 SEC filings and on conference calls with investors and analysts is common to all class

15 members.

16

3. Typicality

17

This requirement is satisfied if “the claims or defenses of the representative parties

18 are typical of the claims or defenses of the class.” Fed. R.Civ. P. 23(a)(3). “Under the

19 rule’s permissive standards, representative claims are ‘typical’ if they are reasonably co-

20 extensive with those of absent class members; they need not be substantially identical.”

21 Hanlon, 150 F.3d at 1020. “Typicality refers to the nature of the claim or defense of the

22 class representative, and not to the specific facts from which it arose or the relief sought.

23 The test of typicality is whether other members have the same or similar injury, whether

24 the action is based on conduct which is not unique to the named plaintiffs, and whether

25 other class members have been injured by the same course of conduct.” Hanon v.

26 Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). Here, the typicality requirement

27 is satisfied because both Patel’s and the absent class members’ claims are based on the

28 same alleged false statements, and their injuries are the same or similar.

3:14-CV-1037-CAB-BGS 4


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

4. Adequacy of Class Representative

The final Rule 23(a) requirement is that “the representative parties will fairly and

adequately protect the interests of the class.” Fed. R.Civ. P. 23(a)(4). “The proper

resolution of this issue requires that two questions be addressed: (a) do the named plaintiffs

and their counsel have any conflicts of interest with other class members and (b) will the

named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?”

In re Mego Fin. Corp. Sec. Litig. , 213 F.3d 454, 462 (9th Cir. 2000). Here, this requirement

is satisfied because there is no apparent conflict between Patel’s interests and those of the

class members, and Patel is represented by experienced securities class action counsel.

5. Adequacy of Class Counsel

A court certifying a class must consider: “(i) the work counsel has done in

identifying or investigating potential claims in the action; (ii) counsel’s experience in

handling class actions, other complex litigation, and the types of claims asserted in the

action; (iii) counsel’s knowledge of the applicable law; and (iv) the resources that counsel

will commit to representing the class.” Fed. R.Civ. P. 23(g)(1)(A). The Court may also

consider “any other matter pertinent to counsel’s ability to fairly and adequately represent

the interests of the class.” Fed. R.Civ. P. 23(g)(1)(B). Ultimately, when only one applicant

seeks appointment as class counsel, the court must determine that “[c]lass counsel . . . fairly

and adequately represent the interests of the class.” Fed. R.Civ. P. 23(g)(4).

Here, the Court has already approved class counsel when it appointed Patel as lead

plaintiff. [Doc. No. 9.] Moreover, despite the fact that this settlement was reached before

the commencement of formal discovery in this Court, class counsel have performed a

significant amount of work in this case. To that end, attorney Robert Prongay, from the

law firm of Glancy Prongay & Murray LLP, 2 submitted a declaration detailing the types of

work he and his colleagues performed, which amounted to a total of 606.20 hours. [Doc.

2 On May 4, 2015, Plaintiff filed a notice with the court that lead class counsel had changed its firm name from Glancy Binkow & Goldberg LLP to Glancy Prongay & Murray LLP. [Doc. No. 31.]

3:14-CV-1037-CAB-BGS 5


1 No. 41-4.] Mr. Prongay also provided the details of his and his law firm’s extensive

2 experience with securities class action litigation. [Doc. No. 41-3] Based on Mr. Prongay’s

3 declaration and the Court’s observation of class counsel’s work in this case, as well as the

4 result obtained, the Court finds that Glancy Prongay & Murray LLP fairly and adequately

5 represented the interests of the class in connection with this litigation and the settlement

6 itself.

7

6. Predominance and Superiority

8

“In addition to meeting the conditions imposed by Rule 23(a), the parties seeking

9 class certification must also show that the action is maintainable under Fed.R.Civ.P.

10 23(b)(1), (2) or (3).” Hanlon , 150 F.3d at 1022. “Rule 23(b)(3) permits a party to maintain

11 a class action if . . . the court finds that the questions of law or fact common to class

12 members predominate over any questions affecting only individual members, and that a

13 class action is superior to other available methods for fairly and efficiently adjudicating the

14 controversy.” Connecticut Ret. Plans & Trust Funds v. Amgen Inc. , 660 F.3d 1170, 1173

15 (9th Cir. 2011), aff’d , 133 S. Ct. 1184, 185 L. Ed. 2d 308 (2013) (citing Fed. R.Civ. P.

16 23(b)(3)). The Ninth Circuit refers to these questions as the “predominance” and

17 “superiority” inquiries. Hanlon , 150 F.3d at 1022-23.

18

The “predominance inquiry tests whether proposed classes are sufficiently cohesive

19 to warrant adjudication by representation.” Id . (quoting Amchem Prods, Inc. v. Windsor ,

20 521 U.S. 591, 623 (1997)). “[T]he presence of commonality alone is not sufficient. . . .”

21 Id. Further, “[s]ettlement benefits cannot form part of a Rule 23(b)(3) analysis; rather the

22 examination must rest on ‘legal or factual questions that qualify each class member’s case

23 as a genuine controversy, questions that preexist any settlement.’” Id . (quoting Amchem ,

24 521 U.S. at 623).

25

Here, questions of whether Axesstel made false or misleading statements and the

26 movement of the stock price when these allegedly false statements were revealed

27 predominate over questions affecting individual class members, and due to the number of

28 class members and relatively small size of the losses to each individual investor, a class

3:14-CV-1037-CAB-BGS 6


1 action is superior to other methods of adjudicating this dispute. Accordingly, the Court

2 finds that the predominance and superiority inquiries have been satisfied.

3

In light of the foregoing, the Court conditionally certifies the class for the purposes

4 I of settlement.

5

B. Legal Standard for Final Approval of Class Settlement

6

Federal Rule of Civil Procedure 23(e) instructs that “[t]he claims, issues, or defenses

7 of a certified class may be settled, voluntarily dismissed, or compromised only with the

8 court’s approval.” Fed. R. Civ. Pro. 23(e). “Adequate notice is critical to court approval of

9 a class settlement under Rule 23(e).” Hanlon, 150 F.3d at 1025. In addition, Rule 23(e)

10 “requires the district court to determine whether a proposed settlement is fundamentally

11 fair, adequate, and reasonable.” Id. at 1026. This determination requires the Court to

12 “evaluate the fairness of a settlement as a whole, rather than assessing its individual

13 components.” Lane v. Facebook, Inc. , 696 F.3d 811, 818 (9th Cir. 2012).

14

“Assessing a settlement proposal requires the district court to balance a number of

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

16 duration of further litigation; the risk of maintaining class action status throughout the trial;

17 the amount offered in settlement; the extent of discovery completed and the stage of the

18 proceedings; the experience and views of counsel; the presence of a governmental

19 participant; and the reaction of the class members to the proposed settlement.” Hanlon , 150

20 F.3d at 1026. Further, “settlement approval that takes place prior to formal class

21 certification requires a higher standard of fairness.” Id. However, “the question whether

22 a settlement is fundamentally fair within the meaning of Rule 23(e) is different from the

23 question whether the settlement is perfect in the estimation of the reviewing court.” Lane ,

24 696 F.3d at 819. Ultimately, a “district court’s final determination to approve the

25 settlement should be reversed ‘only upon a strong showing that the district court’s decision

26 was a clear abuse of discretion.’” Hanlon , 150 F.3d at 1027 (quoting In re Pacific Enter.

27 Sec. Litig. , 47 F.3d 373, 377 (9th Cir. 1995)).


28

7

1

C. Analysis

2

1. Adequacy of Notice

3

The Court approved notice of this class action and proposed settlement in the

4 Preliminary Approval Order. The claims administrator distributed the Notice to 5262

5 potential class members or nominees. [Doc. No. 41-1 at ¶ 9.] The Notice informed the

6 Class of, among other things: (1) the terms of and reasons for the Settlement; (2) their right

7 to submit a claim and receive their proportional share of the Settlement; (3) the estimated

8 average recovery per share, (4) the amount of attorneys’ fees and expenses that counsel

9 intends to request to be paid out of the Settlement Fund; (5) class members’ right to submit

10 objections, if any; (6) their right to appear in person or by counsel at the final approval

11 hearing and to be heard regarding approval of the Settlement; (7) their right to request

12 exclusion from the Class and the Settlement; and (8) the date set for the Final Approval

13 hearing. Adequate periods of time were provided for each of these procedures. No class

14 members objected to the settlement or the adequacy of the Notice, and no class members

15 requested exclusion from the class. Accordingly, the Court finds that the Notice provided

16 the best notice practicable under the circumstances to all Persons entitled to receive notice

17 of the settlement, and said notices fully satisfied the requirements of Federal Rule of Civil

18 Procedure 23, the Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. § 77z–1

19 et seq., § 78u–4 et seq., the requirements of Due Process, and any other applicable law.

20

2. Strength of Plaintiff’s Case; Risk of Further Litigation; and Risk

21

of Maintaining Class Action Status

22

“In most situations, unless the settlement is clearly inadequate, its acceptance and

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

24

25

26


27

28

8

1 proposed settlement is not to be judged against a speculative measure of what might have

2 been awarded in a judgment in favor of the class.” Nat’l Rural Telecomms. Coop. , 221

3 I F.R.D. at 526.

4

Here, Plaintiff points out that he faces hurdles proving scienter, loss causation and

5 damages. Further, there is no guarantee that a class would be certified. Moreover, at the

6 time of settlement, this case was in its nascency, and significant and costly litigation

7 remained, including discovery, motion practice, experts, trial, and appeals. Defendant is

8 represented by sophisticated counsel who certainly would have vigorously litigated the

9 various legal and factual hurdles Plaintiff would need to overcome to succeed on these

10 claims. The settlement prevents these expenses and the likely long duration of the litigation

11 from eroding or delaying the ultimate recovery, if any, of the class members. Accordingly,

12 the Court agrees with the parties that the benefits of the settlement outweigh any potential

13 recovery that the plaintiff class could have obtained through trial.

14

3. The Amount Offered in Settlement

15

“Settlement is the offspring of compromise; the question we address is not whether

16 the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and

17 free from collusion.”

18

19

20

21

22

23

24

25

26


27

28

9


1

4. Extent of Discovery

2

“[I]n the context of class action settlements, formal discovery is not a necessary

3 ticket to the bargaining table where the parties have sufficient information to make an

4 informed decision about settlement.” In re Mego Fin. Corp. Sec. Litig. , 213 F.3d at 459

5 (internal quotations and citation omitted). Here, although no formal discovery occurred,

6 Plaintiff’s counsel had gathered and reviewed an array of relevant publicly available

7 information related to the claims, consulted with experts, interviewed former Axesstel

8 employees, and successfully opposed a motion to dismiss by Defendants. The information

9 acquired through these efforts was sufficient for Plaintiff to make an informed decision

10 about the settlement.

11

5. Experience of Counsel

12

“The recommendations of plaintiffs’ counsel should be given a presumption of

13 reasonableness.” In re Omnivision Technologies, Inc. , 559 F.Supp. 2d 1036, 1043 (N.D.

14 Cal. 2008) (citation omitted). Here, lead class counsel has provided a declaration detailing

15 his and his law firm’s extensive experience in securities class action litigation, and

16 declaring that in his judgment, the settlement is fair, reasonable and adequate and in the

17 best interest of the class. No party has provided any evidence contradicting the

18 reasonableness of class counsel’s recommendations concerning the settlement.

19 Accordingly, this factor also weighs in favor of approving the settlement.

20

6. Reaction of Class Members

21

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

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

23 action are favorable to the class members.” Nat ’l Rural Telecomms. Coop. , Inc., 221 F.R.D.

24 at 528–29. Here, no class members have opted out of the class, and no class members have

25 objected to the settlement. The absence of a single objection to the settlement “is

26 compelling evidence that the Proposed Settlement is fair, just, reasonable, and adequate.”

27 Id.


28

10


1

7. Signs of Collusion

2

When, “as here, a settlement agreement is negotiated prior to formal class

3 certification, consideration of these . . . factors alone is not enough to survive appellate

4 review.” In re Bluetooth Headset Products Liab. Litig. , 654 F.3d 935, 946 (9th Cir. 2011).

5 “The dangers of collusion between class counsel and the defendant, as well as the need for

6 additional protections when the settlement is not negotiated by a court-designated class

7 representative, weigh in favor of a more probing inquiry than may normally be required

8 under Rule 23(e).” Hanlon , 150 F.3d at 1026. Thus, a final approval order in this

9 circumstance must show “that the settlement is ‘not the product of collusion among the

10 negotiating parties.’” Bluetooth , 654 F.3d at 947 (quoting In re Mego Fin. Corp. Sec. Litig. ,

11 213 F.3d at 458).

12

Along these lines, courts “must be particularly vigilant not only for explicit

13 collusion, but also for more subtle signs that class counsel have allowed pursuit of their

14 own self-interests and that of certain class members to infect the negotiations.” Id.

15 Examples of such subtle collusion include:

16

(1) “when counsel receive a disproportionate distribution of the settlement, or

17 when the class receives no monetary distribution but class counsel are amply rewarded,”

18 Id. (quoting Hanlon , 150 F.3d at 1021);

19

(2) “when the parties negotiate a ‘clear sailing’ arrangement providing for the

20 payment of attorneys’ fees separate and apart from class funds, which carries ‘the potential

21 of enabling a defendant to pay class counsel excessive fees and costs in exchange for

22 counsel accepting an unfair settlement on behalf of the class,’” Id. (quoting Lobatz v. U.S.

23 W. Cellular of Cal., Inc. , 222 F.3d 1142, 1148 (9th Cir. 2000)); and

24

(3) “when the parties arrange for fees not awarded to revert to defendants rather

25 than be added to the class fund,” Id. (citing Mirfasihi v. Fleet Mortg. Corp. , 356 F.3d 781,

26 785 (7th Cir. 2004) (Posner, J.)).

27

None of these indicia of collusion are present in the Stipulation here. Although

28 Defendants have not opposed Plaintiff’s counsel’s motion for attorney’s fees, no

3:14-CV-1037-CAB-BGS 11


1 unawarded fees, if any, would revert to Defendants, and all such unawarded fees would be

2 distributed proportionately amongst participating class members. Moreover, that the

3 settlement equals such a high percentage of Plaintiff’s estimate of the potential damages is

4 itself compelling evidence that there was no collusion. Accordingly, the Court finds that

5 the final Stipulation was not a product of collusion among the parties.

6

III. Plan of Allocation

7

“Assessment of a plan of allocation is governed by the same standard of review

8 applicable to the settlement as a whole; the plan must be fair, reasonable, and adequate.”

9 Nobles v. MBNA Corp. , No. C 06-3723 CRB, 2009 WL 1854965, at *3 (N.D. Cal. June 29,

10 2009). “A plan of allocation that reimburses class members based on the extent of their

11 injuries is generally reasonable.” In re Quintus Sec. Litig. , No. C-00-4263 VRW, 2006

12 WL 3507936, at *4 (N.D. Cal. Dec. 5, 2006). Here, the plan of allocation was laid out in

13 detail in the notice, and no class members objected. See In re Heritage Bond Litig. , No.

14 02-ML-1475 DT, 2005 WL 1594403, at *11 (C.D. Cal. June 10, 2005) (“The fact that there

15 has been no objection to this plan of allocation favors approval of the Settlement.”). The

16 plan allocates the settlement fund to the settlement class pro rata based on the ratio of the

17 member’s recognized loss to the aggregate recognized loss of the entire settlement class.

18 In other words, the plan allocates the settlement fund proportional to the actual injury of

19 each class member. Accordingly, the plan of allocation is fair, reasonable and adequate.

20

IV. Attorney’s Fees

21

“In a certified class action, the court may award reasonable attorney’s fees and

22 nontaxable costs that are authorized by law or by the parties’ agreement.” Fed. R.Civ. P.

23 23(h). The PSLRA contains a similar requirement: “Total attorneys’ fees and expenses

24 awarded by the court to counsel for the plaintiff class shall not exceed a reasonable

25 percentage of the amount of damages and prejudgment interest actually paid to the class.”

26 15 U.S.C. § 77z–1(a)(6), § 78u–4(a)(6). “Where [as is the case here] a settlement produces

27 a common fund for the benefit of the entire class, courts have discretion to employ either

28 the lodestar method or the percentage-of-recovery method.” Bluetooth , 654 F.3d at 942.

3:14-CV-1037-CAB-BGS 12


1

In their unopposed motion, Class Counsel asks for an award of 30% of the gross

2 settlement amount in attorney’s fees, which equals $375,000. Class counsel also points

3 out that the Court could arrive at this total using the lodestar method with a 1.38 multiplier,

4 which is well within the range of 1.0 to 4.0 often used by district courts in common fund

5 cases. See Kakani v. Oracle Corp. , No. 06-06493WHA, 2007 WL 4570190, at *2 (N.D.

6 Cal. Dec. 21, 2007) (“Although the range of multipliers used by district courts in common-

7 fund cases varies widely, an overwhelming majority of district courts have used between

8 1.0-4.0 as the multiplier.”); see also Vizcaino v. Microsoft Corp. , 290 F.3d 1043, 1052 (9th

9 Cir. 2002) (including appendix listing the multiplier used in common fund cases of between

10 $50 and 200 million between 1996 and 2001).

11

Although the benchmark for reasonable fee awards is typically 25% of the common

12 settlement fund ( see Bluetooth , 654 F.3d at 942), “courts may adjust this figure upwards or

13 downwards if the record shows special circumstances justifying a departure.”

14 Bellinghausen v. Tractor Supply Co. , 306 F.R.D. 245, 260 (N.D. Cal. 2015) (internal

15 quotations omitted). “When deciding if a departure from the 25 percent benchmark is

16 appropriate, courts may consider the result achieved, the risk involved in the litigation, the

17 skill required and quality of work by counsel, the contingent nature of the fee, awards made

18 in similar cases, and the lodestar crosscheck.” Id. In light of the result achieved here, the

19 complexity of securities litigation, the lodestar crosscheck, and the lack of any objection

20 from the class members, the circumstances here warrant the requested 30% attorneys’ fee

21 award. Cf. Craft v. Cnty. of San Bernardino , 624 F. Supp. 2d 1113, 1127 (C.D. Cal. 2008)

22 (noting that common fund “[c]ases of under $10 Million will often result in result in fees

23 above 25%.”); In re Heritage Bond Litig. , 2005 WL 1594403, at *19 (finding fee award of

24 33.3% of the common fund warranted in part because the settlement fund represented 36%

25 of the class’ total net loss, which the court described as an “exceptional result.”).

26

Accordingly, the motion for an attorney’s fee award of $375,000 is granted.

27

V. Expenses

28

Class Counsel also seek $11,805.48 in actual litigation costs and expenses, which

3:14-CV-1037-CAB-BGS 13


1 they have declared were all reasonable and necessary to the prosecution of this case. [See

2 Doc. No. 41 at ¶88.] There is no opposition to this request, and the Court finds these

3 expenses to be reasonable.

4

VI. Enhancement Award to Class Representative

5

The Stipulation allows for a $3,000 award to the class representative for his expenses

6 and lost wages, and the Notice states that Mr. Patel would request this amount from the

7 court. The PSLRA “provides in pertinent part that, although class representatives must

8 share the recovery in the same proportion as all other members of the class, ‘[n]othing in

9 this paragraph shall be construed to limit the award of reasonable costs and expenses

10 (including lost wages) directly relating to the representation of the class to any

11 representative party serving on behalf of the class.’” In re Heritage Bond Litig. , 2005 WL

12 1594403, at *3 (quoting 15 U.S.C. § 78u–4(a)(4)). Here, Mr. Patel submitted a declaration

13 describing the work he contributed to the case, and that such work required twenty hours

14 of his time. [Doc. No. 41-7 at ¶ 6]. Mr. Patel declares that his hourly rate as a software

15 engineer is $150 per hour, which is how he arrived at the $3,000 total. In light of Mr.

16 Patel’s contributions to the case, and the lack of any objection from the class members, an

17 award of $3,000 to Mr. Patel is reasonable.

18

VII. Payment to Claims Administrator

19

Finally, the Stipulation allowed Plaintiff’s counsel or the Claims Administrator to

20 withdraw up to $100,000 from the Settlement Fund to be used to pay the reasonable costs

21 of providing notice of the Settlement to the class members, and related administration costs.

22 Although Plaintiff’s motion papers are silent as to the amount actually withdrawn from the

23 Settlement Fund pursuant to this provision, Plaintiff did provide a declaration from the

24 notice manager at the claims administrator describing the work performed in connection

25 with providing notice to the class. Further, at the final approval hearing, Plaintiff’s counsel

26 stated that a total of $32,770.43 had been withdrawn for notice and administration costs to

27 date, and estimated that future costs and expenses will bring the total to approximately

28 $50,000. Based on the work performed, the lack of objections from the class, and the fact

3:14-CV-1037-CAB-BGS 14


1 that this amount is in line with the claims administration fees in other class actions, this fee

2 is reasonable. See generally Barbosa v. Cargill Meat Solutions Corp. , 297 F.R.D. 431, 454

3 (E.D. Cal. 2013) (listing cases approving claims administrator fee awards of various

4 amounts based on the number of notices sent).

5

VIII. Conclusion

6

For all of the foregoing reasons, it is hereby ORDERED as follows:

7

1. The motion for final approval of the class action settlement [Doc. No. 39] is

8

GRANTED .

9

2. The Motion for Attorneys’ Fees [Doc. No. 40] is GRANTED .

10

3. The class is certified for settlement purposes only.

11

4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby

12

approves the Settlement set forth in the Stipulation and finds that said Settlement is,

13

in all respects, fair, reasonable and adequate to, and is in the best interests of the

14

Plaintiffs, the Class, and each of the Class Members. This Court further finds the

15

Settlement set forth in the Stipulation is the result of arm’s-length negotiations

16

between experienced counsel representing the interests of the Plaintiffs, Class

17

Members, and the Defendants. Accordingly, the Settlement embodied in the

18

Stipulation, which is attached hereto for reference, is hereby approved in all respects

19

and shall be consummated in accordance with its terms and provisions. The Parties

20

are hereby directed to perform the terms of the Stipulation.

21

5. The Court approves an award of $3,000 to Amish Patel for his reasonable

22

costs and expenses (including lost wages) related to his representation of the Class

23

in this lawsuit.

24

6. The Court approves an award to class counsel of $375,000 in attorney’s fees

25

and $11,805.48 in expenses, to be paid from the Settlement Fund within ten days of

26

the date of this Order, subject to the terms, conditions, and obligations of the

27

Stipulation and in particular ¶6.2 thereof.

28

7. Without affecting the finality of this Order in any way, this Court hereby

3:14-CV-1037-CAB-BGS 15


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

retains continuing jurisdiction for a period of six months over: (a) implementation

of this Order and the Stipulation and any award or distribution of the Settlement

Fund, including interest earned thereon; (b) disposition of the Settlement Fund; and

(c) all Parties hereto for the purpose of construing, enforcing and administering this

Order and the Stipulation.

8. The Court finds that during the course of the Litigation, the Parties and their

respective counsel at all times complied with the requirements of Federal Rule of

Civil Procedure 11.

9. This lawsuit and all of claims contained herein, including all of the Released

Claims, are DISMISSED WITH PREJUDICE as to the Plaintiffs and the other

Class Members, and as against each and all of the Released Persons. The Parties are

to bear their own costs, except as otherwise provided in the Stipulation or this Order.

This case is CLOSED .

It is SO ORDERED .

Dated: October 23, 2015 ~Z~

Hon. Cathy Ann Bencivengo United States District Judge

3:14-CV-1037-CAB-BGS 16

27

28

Case 3:14-cv-01037-CAB-BGS Document 47 Filed...

Documents

Transcript of Case 3:14-cv-01037-CAB-BGS Document 47 Filed...