UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
____________________________________
VALERIE BEZDEK, Individually and on )
Behalf of All Others Similarly Situated, ) Case No. 12-10513-DPW
Leave to File Granted on August 4, 2014
)
Plaintiff, )
)
v. )
)
VIBRAM USA INC. and VIBRAM )
FIVEFINGERS LLC, )
)
Defendants. )
)
____________________________________)
BRIAN DE FALCO, Individually and on )
Behalf of All Others Similarly Situated, ) Case No. 13-10764-DPW
Leave to File Granted on August 4, 2014
)
Plaintiff, )
)
v. )
)
VIBRAM USA INC. and VIBRAM )
FIVEFINGERS LLC, )
)
Defendants. )
)
____________________________________)
PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION
FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ......................................................................................................... iii
I. INTRODUCTION .............................................................................................................. 1
II. THE SETTLEMENT WARRANTS FINAL APPROVAL ................................................ 4
A. The Standard for Final Approval of a Class Action Settlement ............................. 4
B. The Settlement Satisfies the Criteria for Final Approval ........................................ 6
1. Arm’s-Length Negotiations ........................................................................ 7
2. Investigation and Discovery Completed ..................................................... 7
3. Quality of Counsel ...................................................................................... 9
4. The Complexity, Expense, and Likely Duration of the Litigation ........... 10
5. The Reaction of the Class to the Settlement ............................................. 11
6. The Risks of Establishing Liability and Damages .................................... 12
7. The Risk of Maintaining the Class Action Through Trial ........................ 14
8. The Range of Reasonableness of the Settlement Fund in Light of the Best
Possible Recovery and the Range of Reasonableness of the Settlement
Fund to a Possible Recovery in Light of All the Attendant Risks of
Litigation ................................................................................................... 14
III. CLASS CERTIFICATION ............................................................................................... 15
IV. NOTICE TO PROSPECTIVE CLASS MEMBERS WAS ADEQUATE ....................... 16
V. PLAINTIFFS’ FEE AND EXPENSE APPLICATION AND PLAINTIFF SERVICE
AWARDS SHOULD BE APPROVED ............................................................................ 18
A. Legal Standard ...................................................................................................... 18
B. The Requested Percentage of the Settlement is a Reasonable Fee Award Under
Factors Considered by Courts in the First Circuit ................................................ 20
1. The Extent of the Benefit Obtained .......................................................... 20
2. Reaction of the Class Members ................................................................ 21
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3. The Skill and Efficiency of the Attorneys Involved ................................. 21
4. Complexity and Duration of the Litigation ............................................... 22
5. The Risk that the Litigation Will Be Unsuccessful .................................. 24
a. Success at Trial Was Far From Granted ............................................... 24
b. The Contingent Nature of Plaintiffs’ Counsel’s Representation Also
Supports the Requested Fee ...................................................................... 24
6. The Amount of Time Devoted to the Case by Plaintiffs’ Counsel ........... 27
a. Investigation, Complaints, Motions to Dismiss and Discovery ........... 27
b. Settlement Negotiations ....................................................................... 29
C. The Requested Fees Fall Well Within the Range of Fees Awarded in Cases
Within the First Circuit ......................................................................................... 30
D. Plaintiffs’ Counsel’s Lodestar Supports Their Fee Request ................................. 31
E. Plaintiffs’ Counsel’s Request for Reimbursement of Expenses
Should Be Granted ................................................................................................ 33
F. Each Plaintiff Should Be Awarded a Service Award ........................................... 34
VI. CONCLUSION ................................................................................................................. 36
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TABLE OF AUTHORITIES
CASES Page(s)
In re Aetna Inc. Securities Litigation,
No. MDL 1219, 2001 U.S. Dist. LEXIS 68 (E.D. Pa. Jan. 4, 2001) ..........................................33
In re American Bank Note Holographics, Inc., Securities Litigation,
127 F. Supp. 2d 418 (S.D.N.Y. 2001) ......................................................................................... 25
Anixter v. Home-Stake Production Co.,
77 F.3d 1215 (10th Cir. 1996) ................................................................................................... 26
Applegate v. Formed Fiber Technologies, LLC,
No. 10-473, 2013 U.S. Dist. LEXIS 166171 (D. Me. Nov. 21, 2013) ......................................... 31
Backman v. Polaroid Corp.,
910 F.2d 10 (1st Cir. 1990) ...................................................................................................... 26
Beane v. Bank of N.Y. Mellon,
No. 07 Civ. 09444 (RMB), 2009 U.S. Dist. LEXIS 27504
(S.D.N.Y. Mar. 31, 2009) ...........................................................................................................34
In re Blech Securities Litigation,
Nos. 94 CIV. 7696(RWS), 95 CIV. 6422(RWS),
2000 U.S. Dist. LEXIS 6920 (S.D.N.Y. May 19, 2000).............................................................32
Boeing Co. v. Van Gemert,
444 U.S. 472 (1980) ..............................................................................................................18, 31
Bussie v. Allmerica Financial Corp.,
No. 97-CV-40204, 1999 U.S. Dist. LEXIS 7793 (D. Mass. May 19, 1999) ............................ 35
City of Detroit v. Grinnell Corp.,
495 F.2d 448 (2d Cir. 1974) ................................................................................................ 4, 5
City Partnership Co. v. Atlantic Acquisition Limited Partnership,
100 F.3d 1041 (1st Cir. 1996) ...............................................................................................4, 5, 7
Comcast Corp. v. Behrend,
133 S. Ct. 1426 (2013) .................................................................................................................. 23
In re Computron Software, Inc., Securities Litigation,
6 F. Supp. 2d 313 (D.N.J. 1998) ................................................................................................. 22
Conley v. Sears, Roebuck & Co.,
222 B.R. 181 (D. Mass. 1998) ....................................................................................................19
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 4 of 48
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In re Continental Illinois Securities Litigation,
962 F.2d 566 (7th Cir. 1992) ......................................................................................................26
Covillo v. Specialty’s Café,
No. C-11-00594 DMR, 2014 U.S. Dist. LEXIS 29837 (N.D. Cal. Mar. 6, 2014) .....................32
In re CVS Corp. Securities Litigation,
C.A. No. 01-11464 (JLT), slip op. (D. Mass. Sept. 7, 2005) ......................................................33
Duhaime v. John Hancock Mutual Life Insurance Co.,
989 F. Supp. 375 (D. Mass. 1997) .................................................................................................19
Durrett v. Housing Authority of the City of Providence,
896 F.2d 600 (1st Cir. 1990) .........................................................................................................3
Elkins v. Equitable Life Insurance Co.,
No. 96-296-CV-T-17B, 1998 U.S. Dist. LEXIS 1557 (M.D. Fla. Jan. 27, 1998) ......................30
In re Equity Funding Corp. Securities Litigation,
438 F. Supp. 1303 (C.D. Cal. 1977) ...........................................................................................22
In re Fidelity/Micron Securities Litigation,
167 F.3d 735 (1st Cir. 1999) .................................................................................................18, 33
In re Fleet/Norstar Securities Litigation,
935 F. Supp. 99 (D.R.I. 1996) ..................................................................................................... 5, 19
Giusti-Bravo v. United States Veterans Administration,
853 F. Supp. 34 (D.P.R. 1993) ......................................................................................................9
Greenspun v. Bogan,
492 F.2d 375 (1st Cir. 1984) ........................................................................................................... 5, 16
Hensley v. Eckerhart,
461 U.S. 424 (1983) .................................................................................................................... 29
Hotel Holiday Inn de Isla Verde v. N.L.R.B.,
723 F.2d 169 (1st Cir. 1983) .........................................................................................................6
In re Immune Response Securities Litigation,
497 F. Supp. 2d 1166 (S.D. Cal. 2007) .......................................................................................34
In re Initial Public Offering Securities Litigation,
671 F. Supp. 2d 467 (S.D.N.Y. 2009).........................................................................................32
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 5 of 48
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In re Integra Realty Resources, Inc.,
262 F.3d 1089 (10th Cir. 2001) ..................................................................................................16
Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714 (5th Cir. 1974) .....................................................................................................30
Kwaak v. Pfizer, Inc.,
71 Mass. App. Ct. 293 (Mass. App. Ct. 2008) ............................................................................13
Latorraca v. Centennial Technologies, Inc.,
834 F. Supp. 2d 25 (D. Mass. 2011) ............................................................................................ 30
Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp.,
487 F.2d 161 (3d Cir. 1973) .......................................................................................................32
Lindy Brothers Builders v. American Radiator & Standard Sanitary Corp.,
540 F.2d 102 (3d Cir. 1976) .....................................................................................................32
In re Lupron Marketing & Sales Practices Litigation,
228 F.R.D. 75 (D. Mass. 2005) .............................................................................................. 6, 12
In re Lupron Marketing and Sales Practices Litigation,
No. 01-CV-10861, 2005 U.S. Dist. LEXIS 17456
(D. Mass. Aug. 17, 2005) ................................................................................................... passim
Malanka v. de Castro,
Nos. 85-CV-2154, 88-CV-3505, 1990 U.S. Dist. LEXIS 18171,
(D. Mass. Nov. 20, 1990) ...........................................................................................................31
Masters v. Wilhelmina Model Agency, Inc.,
473 F.3d 423 (2d Cir. 2007)........................................................................................................31
M. Berenson Co. v. Faneuil Hall Marketplace, Inc.,
671 F. Supp. 819 (D. Mass. 1987) ..............................................................................................30
Mills v. Electric Auto-Lite Co.,
396 U.S. 375 (1970) ................................................................................................................... 33
Mullane v. Central Hanover Bank & Trust Co.,
339 U.S. 306 (1950) ......................................................................................................................... 16
National Association of Chain Drug Stores v. New England Carpenters Health Benefits Fund,
582 F.3d 30 (1st Cir. 2009) ...................................................................................................... 4
New England Carpenters Health Benefits Fund v. First Databank, Inc.,
No. 05-11148, 2009 U.S. Dist. LEXIS 68419 (D. Mass. Aug. 3, 2009) ........................... 31, 33
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 6 of 48
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In re PaineWebber Limited Partnerships Litigation,
171 F.R.D. 104 (S.D.N.Y. 1997) ................................................................................................................... 6
In re Prudential Securities Limited Partnerships Litigation,
985 F. Supp. 410 (S.D.N.Y. 1997) .........................................................................................25
In re Puerto Rican Cabotage Antitrust Litigation,
815 F. Supp. 2d 448 (D.P.R. 2011) ............................................................................ 24, 27, 36
In re Pharmaceutical Industry Average Wholesale Price Litigation,
252 F.R.D. 83 (D. Mass. 2008) ...................................................................................................13
In re Relafen Antitrust Litigation,
231 F.R.D. 52 (D. Mass. 2005) ........................................................................................... passim
Ressler v. Jacobson,
149 F.R.D. 651 (M.D. Fla. 1992) ............................................................................................21
Robbins v. Koger Properties,
116 F.3d 1441 (11th Cir. 1997) ................................................................................................... 26
Rolland v. Celluci,
191 F.R.D. 3 (D. Mass. 2000) .......................................................................................................9
Saccoccio v. JP Morgan Chase Bank, North America,
297 F.R.D. 683 (S.D. Fla. 2014) .................................................................................................20
In re San Juan Dupont Plaza Hotel Fire Litigation,
50 F. Supp. 2d 100 (D.P.R. 1999) ................................................................................................ 25
Scovil v. FedEx Ground Package System,
No. 10-515, 2014 U.S. Dist. LEXIS 33361 (D. Me. Mar. 14, 2014) ........................................... 31
Simonet v. GlaxoSmithKline,
No. 06-1230 (GAG/CVR), 2009 U.S. Dist. LEXIS 82508
(D.P.R. Sept. 10, 2009) ...............................................................................................................12
Slomovics v. All for a Dollar, Inc.,
906 F. Supp. 146 (E.D.N.Y. 1995)........................................................................................................ 11
In re StockerYale, Inc. Securities Litigation,
No. 1:05cv00177-SM, 2007 U.S. Dist. LEXIS 94004 (D.N.H. Dec. 18, 2007) .......................31
Teachers’ Retirement System v. A.C.L.N. Ltd.,
No. 01-CV-11814, 2004 U.S. Dist. LEXIS 8608 (S.D.N.Y. May 14, 2004) ..........................24
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 7 of 48
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In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza Hotel Fire Litigation,
56 F.3d 295 (1st Cir. 1995) ........................................................................................................ 19
Thompson v. Metropolitan Life Insurance Co.,
216 F.R.D. 55 (S.D.N.Y. 2003) ....................................................................................................5
In re TJX Companies Retail Security Breach Litigation,
584 F. Supp. 2d 395 (D. Mass. 2008) ....................................................................................20
In re Tyco International, Ltd. Multidistrict Litigation,
535 F. Supp. 2d 249 (D.N.H. 2007) ....................................................................................... 4, 25
United States v. 8.0 Acres of Land,
197 F.3d 24 (1st Cir. 1999) ........................................................................................................ 19
In re Visa Check/Mastermoney Antitrust Litigation,
297 F. Supp. 2d 503 (E.D.N.Y. 2003) ........................................................................................33
Vizcaino v. Microsoft Corp.,
290 F.3d 1043 (9th Cir. 2002) ....................................................................................................31
Wexler v. United Air Lines, Inc.,
496 F. Supp. 2d 150 (D.D.C. 2007) ..................................................................................... 15, 21
Wildman v. Lerner Stores Corp.,
771 F.2d 605 (1st Cir. 1985) .......................................................................................................33
Williams v. MGM-Pathe Communications Co.,
129 F.3d 1026 (9th Cir. 1997) ....................................................................................................31
STATUTES AND RULES
California Consumer Legal Remedies Act, Civil Code § 1750 .....................................................28
California Unfair Competition Law, Business & Professions Code § 17200 ................................28
Class Action Fairness Act of 2005
28 U.S.C. § 1715(b) ....................................................................................................................17
Federal Rules of Civil Procedure
(23) ....................................................................................................................................... 15, 16
(23)(c)(2) .....................................................................................................................................18
(23)(e) ...........................................................................................................................................4
(23)(e)(2) .......................................................................................................................................4
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 8 of 48
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Florida Statutes § 501.201 .............................................................................................................28
Massachusetts General Laws
Chapter 26, § 91 ..........................................................................................................................28
OTHER AUTHORITIES
Manual for Complex Litigation, Fourth (2004)
§ 21.62...........................................................................................................................................6
Newberg & Conte, Newberg on Class Actions (4th ed. 2002)
§ 11.42...........................................................................................................................................6
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Plaintiffs Valerie Bezdek (the “Class Representative”), Brian De Falco and Ali Safavi
(collectively, including the Class Representative, “Plaintiffs”) respectfully submit this
memorandum in support of the motion for final approval of class action settlement and Plaintiffs’
request for an award of attorneys’ fees, reimbursement of expenses, and a service award for
Plaintiffs. See ECF Nos. 77 (the Second Amended Settlement Agreement (the “Settlement
Agreement”), 76 (“Order Authorizing Notice”).1
I. INTRODUCTION
Plaintiffs seek final approval of the proposed nationwide Settlement of this class action
against Defendants Vibram USA Inc. and Vibram FiveFingers LLC (collectively “Vibram” or
“Defendant”). The Settlement was reached following vigorous litigation, including substantial
discovery from parties and subpoenaed non-parties, as well as motion practice that included the
filing of two motions to dismiss in the Bezdek action alone. The Parties also attended an arm’s-
length mediation, which generated subsequent settlement negotiations over the course of a year
between the Parties, and ultimately resulted in the Settlement.
The Settlement provides for the creation of a $3.75 million non-reversionary Settlement
Fund. Class Members are eligible for monetary awards for each pair of footwear purchased and
no proof of purchase is required for the first two pairs. Under no circumstances will any amount
in the Settlement Fund revert to Vibram. Moreover, the Settlement provides additional benefits
to Class Members as Vibram has agreed, inter alia, to discontinue the marketing campaign that
gave rise to this litigation. See Settlement Agreement, § IV.B.2. Plaintiffs’ objectives in the
litigation are fully met by the terms of the Settlement.
1 All capitalized terms have the same meaning as set forth in the Settlement Agreement.
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The Claim Form is exceedingly simple and straightforward, as demonstrated by the
number of claims already filed. See Settlement Agreement, Ex. 1 (the Claim Form). Although
very unlikely, if not all of the Settlement Fund is used, the remainder will be distributed pursuant
to the cy pres doctrine to the American Heart Association with specific directions that such funds
be used for research regarding health benefits associated with running or exercise or substantially
similar research. See Settlement Agreement, § III.C. The American Heart Association is an
appropriate nonprofit entity with nationwide reach that will use the leftover funds for relevant
purposes.
The award of attorneys’ fees and expenses requested by Plaintiffs’ Counsel, and to which
the parties agreed in the Settlement, is well within the ranges established by relevant case law.
The Settlement provides that Vibram will not oppose an award of attorneys’ fees up to $937,500,
plus reimbursement of out-of-pocket expenses not to exceed $70,000. See Settlement
Agreement, § VIII.A. Thus, the award of attorneys’ fees represents only 25% of the Settlement
Fund. Plaintiffs’ Counsel seek reimbursement of $62,133.68 in actual expenses - less than the
amount Vibram agreed to not oppose and less than what was stated in the Notice. Moreover,
Plaintiffs’ Counsel have prosecuted the Actions on a completely contingent basis, accruing over
$1,243,539.75 in attorneys’ fees based on 2,262.10 hours worked. Thus, and as detailed below,
the $937,500 fee award amounts to a fractional multiplier of Plaintiffs’ Counsel’s lodestar.
Accordingly, Plaintiffs’ Counsel’s requested Attorneys’ Fees and Expenses are well within the
accepted range of attorney fee awards in class settlements.
The Settlement represents an excellent recovery for the Class – a point confirmed by the
fact that, as of July 31, 2014, just 16 Class Members, to date, have elected to opt-out and no
Class Member has objected to the Settlement. See Declaration of James R. Prutsman, MBA, In
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Support of Motion for Final Approval of Class Action Settlement (“Prutsman Decl.,” attached as
Exhibit 2), ¶¶ 9, 20-21.2 The Settlement Administrator also implemented a robust, Court-
approved Class Notice program which included (1) direct notice sent to 217,761 email addresses,
with follow up mailings of postcard notices to 77,441 potential Class Members for whom the
initial email bounced back or was otherwise undeliverable; (2) publication in print and electronic
versions of Runner’s World, a national magazine with an estimated print circulation of
approximately 673,000 and readership of 2.86 million; (3) four weeks of Internet publication by
banner advertising on Facebook (specifically targeting Class Members’ demographics), and
several online networks that include hundreds of highly trafficked websites throughout the
United States that generated more than 300 million impressions; and (4) publication for four
weeks on a mobile network with close to 50,000 apps across all mobile and tablet platforms
targeted towards adults 25-54 who run, walk or participate in other fitness activity (including,
inter alia, New York Times Health and Fitness, Everyday Health and ESPN News). See id., ¶¶
6-7, 11-15. Additionally, there have been more than 900 online news mentions and more than
31,400 Tweets concerning the Settlement. Id., ¶ 16.
For final review of a class action settlement, it must not be overlooked that there is a
“clear policy in favor of encouraging settlements.”3 Durrett v. Housing Auth. of the City of
Providence, 896 F.2d 600, 604 (1st Cir. 1990). Where, as here, “sufficient discovery has been
provided and the parties have bargained at arms-length, there is a presumption in favor of the
2 The objector and opt-out figures are current through July 31, 2014. Pursuant to the Order
Authorizing Notice, the deadline for opting out or objecting to the Settlement is August 15, 2014.
Further pursuant to that Order, Plaintiffs will respond to all objections, if any, on or before
October 15, 2014.
3 Internal quotes and citations omitted unless otherwise specified.
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settlement.” City Partnership Co. v. Atlantic Acquisition Ltd. Partnership, 100 F.3d 1041, 1043
(1st Cir. 1996). As demonstrated below, the proposed Settlement is, under all circumstances,
“fair, reasonable and adequate” under Fed. R. Civ. P. 23(e)(2) and thus warrants final approval
by this Court. Id. Likewise, as demonstrated below, the Class meets all the applicable
requirements; therefore, the Court should grant final certification of the Settlement Class.
Finally, the Court should grant approval of the award of Attorneys’ Fees and Expenses and
Service Awards, which are also fair and reasonable.
II. THE SETTLEMENT WARRANTS FINAL APPROVAL
A. The Standard for Final Approval of a Class Action Settlement
Pursuant to Rule 23(e), after directing notice to all class members in a reasonable manner
and prior to granting final approval to the proposed settlement, the Court must conduct a fairness
hearing and determine whether the settlement’s terms are “fair, reasonable, and adequate.” Fed.
R. Civ. P. 23(e)(2). “In the First Circuit, this requires a wide-ranging review of the overall
reasonableness of the settlement that relies on neither a fixed checklist of factors nor any specific
litmus test.” In re Tyco Int’l, Ltd. Multidistrict Litig., 535 F. Supp. 2d 249, 259 (D.N.H. 2007).
As the First Circuit has explained:
Rule 23’s reasonableness standard has been given substance by case law offering
laundry lists of factors, most of them intuitively obvious and dependent largely on
variables that are hard to quantify; usually, the ultimate decision by the judge
involves balancing the advantages and disadvantages of the proposed settlement as
against the consequences of going to trial or other possible but perhaps
unattainable variations on the proffered settlement.
Nat’l Ass’n of Chain Drug Stores v. New England Carpenters Health Benefits Fund, 582 F.3d
30, 44 (1st Cir. 2009) (citing, among other sources omitted here, City of Detroit v. Grinnell
Corp., 495 F.2d 448, 463 (2d Cir. 1974)). Nevertheless, courts within the First Circuit have
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looked to factors set forth in Grinnell, 495 F.2d at 463 (the “Grinnell factors”). The Grinnell
factors are:
(1) the complexity, expense and likely duration of the litigation; (2) the reaction
of the class to the settlement; (3) the stage of the proceedings and the amount of
discovery completed; (4) the risks of establishing liability; (5) the risks of
establishing damages; (6) the risks of maintaining the class action through the
trial; (7) the ability of the defendants to withstand a greater judgment; (8) the
range of reasonableness of the settlement fund in light of the best possible
recovery; (9) the range of reasonableness of the settlement fund to a possible
recovery in light of all the attendant risks of litigation.
Id. at 463; see also In re Relafen Antitrust Litig., 231 F.R.D. 52, 72 (D. Mass. 2005). While
instructive, courts reviewing settlements recognize that not all Grinnell factors employed in
evaluating a settlement must be satisfied. Instead, a court should look at the factors in light of
the circumstances of each case. See Thompson v. Metro. Life Ins. Co., 216 F.R.D. 55, 61
(S.D.N.Y. 2003). Further, the Court should neither substitute its judgment for that of the parties
who negotiated the settlement, nor conduct a mini-trial on the merits of the action. See
Greenspun v. Bogan, 492 F.2d 375, 381 (1st Cir. 1984) (“[A]ny settlement is the result of a
compromise – each party surrendering something in order to prevent unprofitable litigation, and the
risks and costs inherent in taking litigation to completion. A district court, in reviewing a settlement
proposal, need not engage in a trial of the merits, for the purpose of settlement is precisely to avoid
such a trial.”).
Settlement approval is committed to the Court’s discretion, which should be exercised in
light of the strong public policy favoring settlement. See City P’ship, 100 F.3d at 1043-44; see
also In re Fleet/Norstar Sec. Litig., 935 F. Supp. 99, 105 (D.R.I. 1996) (“The district court’s
discretion is circumscribed by the long-recognized policy of encouraging settlements.”). Where, as
here, “sufficient discovery has been provided and the parties have bargained at arms-length, there
is a presumption in favor of the settlement.” City P’Ship, 100 F.3d at 1043; see also Hotel Holiday
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Inn de Isla Verde v. N.L.R.B., 723 F.2d 169, 173 n.1 (1st Cir. 1983) (citing the principle that
“settlement agreements are highly favored in the law and will be upheld whenever possible
because they are a means of amicably resolving doubts and preventing lawsuits”) In re Lupron
Mktg. & Sales Practices Litig., 228 F.R.D. 75, 88 (D. Mass. 2005) (“When a settlement class is
proposed, it is incumbent on the district court to give heightened scrutiny to the requirements of
Rule 23 in order to protect absent class members. This cautionary approach notwithstanding, the
law favors class action settlements.”). “So long as the integrity of the arm’s length negotiation
process is preserved . . . a strong initial presumption of fairness attaches to the proposed
settlement.” In re PaineWebber Ltd. P’ships Litig., 171 F.R.D. 104, 125 (S.D.N.Y. 1997); see also
Manual for Complex Litigation, Fourth § 21.62 (2004); Newberg & Conte, Newberg On Class
Actions § 11.42 (4th ed. 2002) (“As a practical matter, the overwhelming majority of proposed
settlements are approved when the court is satisfied that arm’s-length bargaining took place
during settlement negotiations and experienced class counsel has recommended approval of the
settlement.”).
B. The Settlement Satisfies the Criteria for Final Approval
As demonstrated below, the Settlement satisfies the criteria for final approval. In the
experienced judgment of Plaintiffs’ Counsel, the risks faced by Plaintiffs and the Class in
proceeding with the litigation, and the uncertainty that a more favorable result could be obtained if
this case were litigated against Defendant through trial and the inevitable post-trial motions and
appeals, militate strongly in favor of approving the Settlement. Class Members submitting claims
will receive refunds of a portion of the purchase price of the FiveFingers footwear and Defendant
will be enjoined from continuing the marketing and advertising campaigns at issue. When the
Settlement is considered in balance against the needless risk and expense of proceeding through
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trial, it is more than adequate for final approval. Furthermore, individual criteria used by courts
in the First Circuit also weigh in favor of final approval of the Settlement, as described more
fully below. See, e.g., In re Relafen Antitrust Litig., 231 F.R.D. at 71-74.
1. Arm’s-Length Negotiations
The Parties engaged in many pre-settlement discussions and arm’s-length negotiations
prior to achieving the Settlement. See ECF No. 72-1 (Declaration of Janine L. Pollack in
Support of Motion for Preliminary Review of Class Action Settlement, Authorization of Class
Notice and Setting of Final Approval Hearing (“Pollack Preliminary Review Decl.”)), ¶ 19
(describing how initial mediation efforts before an independent mediator failed, but the Parties
continued to negotiate for a year even during extensive discovery and motion practice). Each
side vigorously advocated its positions during multiple rounds of often spirited negotiations and
weighed the costs and benefits of engaging in further litigation. Through these comprehensive
negotiations, Lead Class Counsel advocated the best case possible while pressing for the
maximum recovery achievable. The time and effort spent, and the circumstances of the
negotiations are persuasive indicators that there was no collusion in either the negotiation
process or the result achieved. This factor supports a presumption of fairness. See City P’Ship,
100 F.3d at 1043.
2. Investigation and Discovery Completed
Plaintiffs’ Counsel’s in-depth knowledge of the litigation resulting from their
investigation and discovery supports the Settlement. Prior to entering into the Settlement,
Plaintiffs’ Counsel conducted a thorough investigation and analysis of Plaintiffs’ legal claims, and
conducted an extensive fact investigation. Plaintiffs’ Counsel vetted Defendant’s numerous
advertisements and other representations pertaining to its FiveFingers footwear products across
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several different forms of media – including print and Internet ads. This review included
advertisements for the FiveFingers footwear on Vibram’s www.vibramfivefingers.com website.
Plaintiffs’ Counsel reviewed Defendant’s public documents, including press releases, as well as
reports on Defendant’s advertising campaign in industry news sources to build a detailed
understanding of Defendant’s sales and marketing strategy and results. See Pollack Preliminary
Review Decl., ¶ 14. Furthermore, Plaintiffs’ Counsel reviewed numerous published scientific
studies concerning exercise physiology and biomechanics and conferred with experts in the
relevant fields, including a professor who is an expert in the orthopedic and physiological
effects of footwear on the human body, to develop a complete understanding of the alleged lack
of scientific support for Vibram’s claims about muscle strengthening and injury prevention. See
id.
In addition, Plaintiffs engaged in significant formal discovery. On July 10, 2013,
Plaintiffs served on Vibram fifty-eight (58) requests for production, fourteen (14) interrogatories
and eighteen (18) requests for admission. See id., ¶ 10. This resulted in the production by
Vibram of over 52,000 pages, primarily in electronic form, but including some in hard copy. See
id., ¶ 14. Lead Class Counsel established a dedicated document database for this litigation to
review and categorize documents received by Defendant and third-parties. See id.
Lead Class Counsel also sought and obtained substantial discovery through third-party
subpoenas to four third-parties. See id., ¶ 15. Lead Class Counsel engaged in meet and confer
efforts with certain of these subpoenaed parties to obtain responsive documents, which
ultimately resulted in the production of tens of thousands of pages of documents which were
reviewed by Lead Class Counsel. See id.
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Plaintiffs’ Counsel used the product of these efforts to help shape their case and the
Settlement. Thus, this litigation had advanced to a stage where the Parties certainly have a clear
view of the strengths and weaknesses of their case, which they determined favored a settlement.
Taken as a whole, this investigatory work and discovery favor a settlement and provide a basis
for the Court to grant final approval of the Settlement.
3. Quality of Counsel
In approving class settlements, courts give great weight to the opinion and judgment of
experienced counsel who have conducted arm’s-length negotiations. “When the parties’
attorneys are experienced and knowledgeable about the facts and claims, their representations to
the court that the settlement provides class relief which is fair, reasonable, and adequate should
be given significant weight.” Rolland v. Celluci, 191 F.R.D. 3, 10 (D. Mass. 2000). With
respect to the quality of counsel, courts have looked at various factors, including “the length of
their involvement with the litigation, their competence, and their experience in this type of
litigation.” Giusti-Bravo v. United States Veterans Admin., 853 F. Supp. 34, 40 (D.P.R. 1993).
Plaintiffs’ Counsel respectfully submit that the quality of their work in this case is
apparent from their vigorous prosecution of the Actions, and certain of Plaintiffs’ Counsel’s
background and expertise gained in other deceptive advertising litigation in general, and those
having to do with footwear toning products in particular. For example, Ms. Pollack and her co-
counsel from Blood Hurst & O’Reardon (“BHO”) have recently prosecuted a number of false
advertising class actions concerning the advertised scientific substantiation relating to toning and
strengthening benefits provided by Reebok, Skechers, and FitFlop footwear, among others. Ms.
Pollack and Tim Blood from BHO worked as co-lead counsel on these matters along with certain
other of Plaintiffs’ Counsel in this case. In two of these actions, against Reebok and Skechers,
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Ms. Pollack and Mr. Blood worked with the Federal Trade Commission to bring about unique
and historic settlements. In the current litigation, Mr. Blood again worked closely with Lead
Class Counsel, providing his expertise in this field and assisting with all aspects of the litigation.
Indeed, Lead Class Counsel’s and Mr. Blood’s experience and expertise gained in other
deceptive advertising litigations, including working with scientific experts and reaching
nationwide settlements, contributed to counsel’s ability in this matter to (1) research and
understand the purported scientific basis for Vibram’s advertised claims prior to filing the
complaint; (2) efficiently pursue discovery relating to complex issues of science; (3) obtain
necessary evidence concerning issues of science, marketing and damages; and then (4) resolve
the claims without further litigation.
Lead Class Counsel believes that this Settlement meets each of the requirements for final
approval. Based on experience in other cases involving similar issues and retail products, this
Settlement, news of which was widely disseminated through the extensive Class Notice program,
provides Class Members with an efficient opportunity to recover a portion of the purchase price
they paid for FiveFingers footwear. Coupled with the injunctive relief, the Settlement is fair,
reasonable and adequate. Thus, the quality and opinions of experienced Plaintiffs’ Counsel
militate in favor of final approval of this Settlement.
4. The Complexity, Expense, and Likely Duration of the Litigation
The complexity, expense, and likely duration of the litigation also weigh in favor of
approving the Settlement. Here, prevailing on the claims advanced by Plaintiffs would involve
numerous legal and factual issues that would require many depositions and extensive expert
discovery and testimony, significantly adding to the expense and duration of the litigation. This
is particularly true in regards to the applicability of these claims on a nationwide basis to provide
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the most effective and efficient relief to all consumers who purchased the FiveFingers footwear,
as well as the challenges associated with assessing the complex, scientific issues concerning
Vibram’s marketing claims. In addition, Plaintiffs would be required to prove both their theory
and calculations of recoverable damages with the help of expert testimony. Plaintiffs would also
have to retain a marketing expert to opine on the materiality of the challenged advertising based
either on a review of market research possessed by Vibram or through independent survey(s). Thus,
conducting the balance of fact and expert discovery with regard to these claims would be a
complex and expensive endeavor. Absent a settlement, Vibram would challenge the merits of
Plaintiffs’ claims at every stage of pretrial proceedings and through trial, resulting in
additional years of expensive and hotly contested litigation. Moreover, even if the Class could
recover a judgment after a trial, the additional delay through post-trial motions and the appellate
process could deny the Class any recovery for years and, with the passage of time, make it more
difficult to locate and pay Class Members if and when a favorable judgment became final.
The Settlement consists of cash payments to Class members from a total Settlement Fund
of $3.75 million (less fees and expenses), as well as changes in the Defendant’s marketing
campaigns resulting in an immediate tangible recovery without the considerable risk, expense, and
delay of trial. This result weighs heavily in favor of the proposed Settlement. See Slomovics v.
All for a Dollar, Inc., 906 F. Supp. 146, 149 (E.D.N.Y. 1995) (“The potential for this litigation to
result in great expense and to continue for a long time suggest that settlement is in the best interests
of the Class.”).
5. The Reaction of the Class to the Settlement
The reaction of the Class to the Settlement has been overwhelmingly positive. Out of a
nationwide class consisting of purchasers of millions of pairs of FiveFingers footwear, as of July
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31, 2014 no objections to the Settlement have been received, and there have been only 16
requests for exclusion. See Prutsman Decl., ¶ 9. Given the extensive nationwide Notice
submitted in this case, the overall reaction of the Class supports, rather than detracts from, the
reasonableness, fairness and adequacy of the Settlement. See Simonet v. GlaxoSmithKline, No.
06-1230 (GAG/CVR), 2009 U.S. Dist. LEXIS 82508, at *9-10 (D.P.R. Sept. 10, 2009)
(approving settlement in light of, among other things, “the overwhelming, nearly unanimous
support for the settlement demonstrated by the absence of any other objections, and the small
number of exclusion requests”).
6. The Risks of Establishing Liability and Damages
While Plaintiffs’ Counsel believe Plaintiffs would ultimately prevail at trial, they
recognize that ultimate success is far from assured and believe this substantial Settlement, when
viewed in light of the risks of proving liability and greater recoverable damages, is undoubtedly
fair, adequate, and reasonable. See Lupron, 228 F.R.D. at 97 (“As any experienced lawyer
knows, a significant element of risk adheres to any litigation taken to binary adjudication.”).
Vibram has been ably represented by its counsel, and, in recognition of the strength of
Plaintiffs’ claims, agreed to work with Plaintiffs to resolve those claims in a manner that will
provide Class Members with meaningful monetary relief and implement changes that enjoin
Defendant from engaging now and in the future in the type of marketing campaigns challenged
by Plaintiffs. And, even though Plaintiffs asserted nationwide applicability of Massachusetts law
on a Massachusetts headquartered Defendant, Plaintiffs recognize that Defendant may have been
able to raise challenges to Plaintiffs’ ability to prevail on class certification and may have further
challenged Plaintiffs’ substantive claims for relief with countervailing evidence and argument
concerning, e.g., myriad reasons why absent class members purchased the products at issue. See,
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e.g., In re Pharm. Indus. Average Wholesale Price Litig., 252 F.R.D. 83, 94 (D. Mass. 2008)
(“While numerous courts have talked-the-talk that grouping of multiple state laws is lawful and
possible, very few courts have walked the grouping walk. . . . Some courts have rejected efforts
to certify a class under multiple state consumer protection laws, finding that the variances in the
substantive prerequisites of such laws render certification too daunting.”); Kwaak v. Pfizer, Inc.,
71 Mass. App. Ct. 293, 301-302 (Mass. App. Ct. 2008) (denying certification of consumer class
related to allegedly deceptive Listerine mouthwash marketing; “There were [] too many different
reasons why consumers purchased these particular products, too many different types of
advertisements, too much variation in exposure to the advertisements, too fine a line between
permissible puffery and actionable deception in the different advertisements, and too little
information on the market impact of the deceptive aspects of the advertising campaign to support
a conclusion that the consumers in the class certified were similarly situated and similarly injured
by a common deceptive act or practice.”). For example, Vibram has already argued that
“[c]ertainly, the motivations and expectations of potential class members…are different” and
class members’ “purchasing experience, and their exposure to Vibram’s marketing, would
necessarily be substantially different from Plaintiff’s.” See ECF No. 11 at 17-18; see also Safavi
Dkt., ECF No. 19 at 17 (arguing that the class action allegations should be stricken because, inter
alia, “FiveFingers shoes are worn for many reasons, and many consumers use them for purposes
unrelated to the Complaint, including water sports, travel, hiking, yoga, and even just fashion.
Indeed, some consumers buy FiveFingers merely because they look different.”). Furthermore,
Plaintiffs faced risks in establishing the amount of individual relief to which individual Class
Members were entitled, if any. See ECF No. 1 (Complaint), ¶ 4 (alleging that on the basis of
their health benefit claims, Vibram “charge[s] a premium for FiveFingers” over conventional
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running shoes), ¶¶ 84 and 86 (same). Plaintiffs’ Counsel anticipates that Defendant would have
likely argued that any recoverable premium would have been a mere fraction of the purchase
price of the footwear given that, as noted above, Defendant argued that purchases of FiveFingers
bought them for a variety of reasons.
While Plaintiffs’ Counsel remain confident in their ultimate ability to prove the claims
asserted at both the class certification and trial phases of this litigation, the risks of losing at
either or both of those stages, particularly when weighed against the immediate benefits of the
Settlement, indicate that the Settlement is in the best interests of the Class.
7. The Risk of Maintaining the Class Action Through Trial
Although Plaintiffs’ Counsel believe Plaintiffs would be successful in obtaining a litigated
class certification, class certification always poses a substantial risk in consumer litigation. A
nationwide or even multi-state class greatly increases those risks, as discussed above.
8. The Range of Reasonableness of the Settlement Fund in Light of the
Best Possible Recovery and the Range of Reasonableness of the
Settlement Fund to a Possible Recovery in Light of All the
Attendant Risks of Litigation
The Settlement immediately confers monetary benefits on the Class in the form of cash
payments based on Class Members’ purchases of FiveFingers footwear as well as significant
injunctive relief. This is a particularly good result given the various risks of continued
litigation and the fullness of the relief achieved through the Settlement. Plaintiffs were able to
negotiate the creation of a non-reversionary cash Settlement Fund of $3.75 million will provide
cash refunds to consumers. Given the risks discussed above associated with Defendant’s
anticipated arguments regarding the amount of premium paid, and that the jury could find no
premium or that such premium was only a small portion of the purchase price of the footwear,
the fact that Class Members will receive cash payouts now militates strongly in favor of the
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Settlement. Class Members are also able to submit their claims electronically, significantly
reducing any meaningful burden on or barrier to Class Member participation in the Settlement.
Furthermore, the Settlement mitigates future harm to consumers as Vibram has already
changed its marketing campaign and will continue to comply in the future with the terms of the
Settlement. See, e.g., Wexler v. United Air Lines, Inc., 496 F. Supp. 2d 150, 154 (D.D.C. 2007)
(“[t]he value of injunctive relief for determining the amount in controversy can be calculated as
the cost to the defendant.”).
Thus, considering the substantial benefit received by the Class under the Settlement, the
probability of lengthy litigation in the absence of the Settlement, the risk that the Class would
not have been able to succeed on the merits, and the likelihood that damages awarded by the
Court would have been lower than those demanded by the Class, the Settlement is well
within the range of reasonableness.
Weighing the benefits of the proposed Settlement against the risks of continued litigation,
Plaintiffs’ Counsel respectfully submit that the Settlement is a reasonable compromise under the
facts and circumstances of this case and falls well within the range for approval.
III. CLASS CERTIFICATION
As the Court found in its Order Authorizing Notice, and as shown in Plaintiffs’
Memorandum in Support of Motion for Preliminary Review of Class Action Settlement (ECF No.
72), the Settlement Class is appropriately certified for settlement purposes, meeting all of the
relevant requirements of Rule 23. Therefore, the Court should affirm its certification of the
Settlement Class.
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IV. NOTICE TO PROSPECTIVE CLASS MEMBERS WAS ADEQUATE
In determining whether to grant final approval of a proposed settlement, the Court must
find that adequate notice was issued to all prospective class members, in accordance with due process
concerns and Rule 23 of the Federal Rules of Civil Procedure. In order to satisfy due process
considerations, notice to class members must be “reasonably calculated, under all the circumstances,
to apprise interested parties of the pendency of the action and afford them an opportunity to present
their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). In
other words, the notice must describe fairly, accurately and neutrally the claims and parties in the
litigation and the terms of the proposed settlement. See Greenspun, 492 F.2d at 382.
The Court has already determined that the form of the Notice was proper. The Court
approved the long form Class Notice, Postcard Notice, Summary Settlement Notice and the
notice methodology described in the Settlement Agreement. See Order Authorizing Notice at 5-
7. The Court further found that these notices constitute “the best practicable notice;” are
reasonably calculated to apprise class members of the terms of the Settlement and their rights;
“constitute[] due and sufficient notice [] to all persons entitled thereto;” and “[are] in full
compliance with the requirements of Fed. R. Civ. P. 23, applicable law, and due process.” Id. at
7.
Plaintiffs now seek Court determination that the notice program actually engaged in was
fair, adequate, and appropriate. It is not necessary that every Class Member receive actual notice
to meet due process considerations, so long as class counsel acted reasonably in selecting means
likely to inform persons affected. See In re Integra Realty Res., Inc., 262 F.3d 1089, 1110-11
(10th Cir. 2001) (holding Rule 23 and Due Process requisites satisfied where the record indicated
that 77% of class members actually received notice of the settlement).
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In accordance with the requirements of the Order Authorizing Notice, notice was
implemented pursuant to the plan approved by the Court and as described in the declaration of
the Notice Administrator. See Order Authorizing Notice at 6-7; Prutsman Decl. The Notice
Program exceeded the Notice Administrator’s original projections, delivering over 300,000,000
impressions, or opportunities to see the Notice, through traditional media, news articles, online
advertising, mobile advertising, social media, and blogs. See Prutsman Decl., ¶ 15.
As detailed in the Notice Administrator’s Declaration, the Court-approved multi-faceted
notice program included the following components:
Direct e-mail notice to reasonably identifiable Class Members consisting of
217,661 e-mail addresses;
Direct postcard notice to reasonably identifiable Class Members consisting of
77,411 physical addresses;
CAFA Notice to appropriate state and federal government officials;4
Publication of a short-form notice (the “Summary Settlement Notice”) in
Runner’s World, a nationally-circulated consumer magazine used by Vibram itself
to advertise FiveFingers footwear;
Banner advertising on highly trafficked Internet websites;
Mobile advertising on widely visited mobile and tablet websites;
Facebook advertising targeting adults 25-54 who are interested in Vibram,
FiveFingers, barefoot running, and fitness;
An informational website (www.FiveFingersSettlement.com) on which the
notices and other important Court documents are posted; and
A toll-free information line (1-844-491-5740), available 24 hours per day, seven
days per week, where Class Members could call for more information about the
Settlement, including, but not limited to, requesting copies of the claim packet.
4 Pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1715(b), and
in accord with the Court’s Order Authorizing Notice, the Notice Administrator on behalf of
Vibram served a CAFA Notice and accompanying enclosures by Federal Express overnight
delivery to the Attorney General of the United States, and the attorneys general of all states and
territories, informing them of the proposed Settlement. See Prutsman Decl., ¶ 10.
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See Prutsman Decl., ¶¶ 11-18. Class Members were also able to electronically submit proof of
claim forms through the simple one-page claim form on the Settlement website, resulting in high
Class Member participation in the Settlement.
As required by Federal Rule of Civil Procedure 23(c)(2), the Class Notice informed Class
Members of the claims alleged in the Actions, the terms of the Settlement and their rights as
members of the Settlement Class to object to the Settlement, or otherwise object to the proposed
attorneys’ fees and expenses and/or the individual service awards to the Plaintiffs. Additionally,
Class Members were advised of their rights to request exclusion from the Class. See Order
Authorizing Notice at 7.
Accordingly, the notice program fairly apprised Class Members of the Settlement and
their options and satisfies the requirements of due process.
V. PLAINTIFFS’ FEE AND EXPENSE APPLICATION AND PLAINTIFF SERVICE
AWARDS SHOULD BE APPROVED
As provided in the Settlement Agreement, Plaintiffs’ Counsel also petitions the Court for
an award of attorneys’ fees of $937,500, representing 25% of the $3.75 million Settlement Fund,
and reimbursement of $62,133.68 in actual expenses. As explained, the requested award of
attorneys’ fees represents a fractional multiplier of counsel’s lodestar. Both the attorneys’ fees
and expenses are reasonable and justified in this litigation. In addition, the requested Plaintiff
service awards are also fair and reasonable and should be approved.
A. Legal Standard
The Supreme Court has recognized that when attorneys’ efforts create a fund, those
efforts entitle the attorneys to reasonable attorneys’ fees from that fund. See Boeing Co. v. Van
Gemert, 444 U.S. 472, 478 (1980); see also In re Fidelity/Micron Sec. Litig., 167 F.3d 735, 737
(1st Cir. 1999) (“lawyers whose efforts succeed in creating a common fund for the benefit of a
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class are entitled not only to reasonable fees, but also to recover from the fund, as a general
matter, expenses, reasonable in amount, that were necessary to bring the action to a climax”).
This policy equitably provides that those who have profited from successful litigation
should share in its costs. See In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza
Hotel Fire Litig., 56 F.3d 295, 305 n.6 (1st Cir. 1995) (“The common fund doctrine is founded
on the equitable principle that those who have profited from litigation should share its costs”).
In the First Circuit, a trial court enjoys “extremely broad latitude” in determining an
appropriate fee award “and may calculate such an award either on the basis of a reasonable
percentage of the fund, or using a lodestar method to multiply a reasonable hourly rate by the
compensable hours the attorney worked on the matter.” United States v. 8.0 Acres of Land, 197
F.3d 24, 33 (1st Cir. 1999); see also Thirteen Appeals, 56 F.3d at 309. Courts possess broad
discretion ‘“because each common fund case presents its own unique set of circumstances,”‘ so
each court ‘“must assess each request for fees and expenses on its own terms.”‘ 8.0 Acres, 197
F.3d at 33 (quoting In re Fidelity/Micron, 167 F.3d at 737).
Numerous courts in the First Circuit have awarded attorneys’ fees from a common fund
on a percentage of the fund basis. See, e.g., Thirteen Appeals, 56 F.3d at 307 (describing the
advantages of the percentage of the fund approach over the lodestar/multiplier approach); Conley
v. Sears, Roebuck & Co., 222 B.R. 181, 187 (D. Mass. 1998) (measuring attorneys’ fees in a
class action settlement as a percentage of the common fund); Duhaime v. John Hancock Mut.
Life Ins. Co., 989 F. Supp. 375, 377 (D. Mass. 1997) (same); In re Fleet/Norstar, 935 F. Supp. at
108 (same).
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B. The Requested Percentage of the Settlement is a Reasonable Fee Award
Under Factors Considered by Courts in the First Circuit
Although the First Circuit has not established specific factors to be used in evaluating the
reasonableness of a fee request, district courts within the First Circuit have applied factors
developed by other courts outside the First Circuit. For example, in In re TJX Cos. Retail Sec.
Breach Litig., 584 F. Supp. 2d 395, 401 (D. Mass. 2008), the court looked to the following
factors to assess reasonableness for attorneys’ fees: (1) the reaction of class members to the
settlement and proposed attorneys’ fees; (2) the skill and efficiency of the attorneys involved; (3)
the complexity and duration of the litigation; (4) the risk that the litigation will be unsuccessful;
(5) the amount of time devoted to the case by counsel; and (6) the extent of the benefit obtained.
See also In re Relafen Antitrust Litig., 231 F.R.D. at 79; In re Lupron Mktg. and Sales
Practices Litig., No. 01-CV-10861, 2005 U.S. Dist. LEXIS 17456, at *12 (D. Mass. Aug. 17,
2005). Applying these factors to this case demonstrates that the requested attorneys’ fees of
$937,500 (25% of $3.75 million) are reasonable.
1. The Extent of the Benefit Obtained
The Settlement provides significant benefits to the Class. Pursuant to the Parties’
Settlement Agreement, Vibram will establish a non-reversionary Settlement Fund of $3.75
million. See Settlement Agreement, § III.A.1. The Settlement makes these monetary benefits
available to Class Members for up to two pairs of FiveFingers footwear without a requirement
for submitting proof of purchase. See id., § III.B.5.
In addition to creating a non-reversionary monetary benefit for the Class, as
indicated in the Settlement Agreement, Vibram agreed to implement numerous changes in its
challenged advertising. See Settlement Agreement, § III.D. This relief is significant as it
provides important protection to consumers against future improper conduct. See, e.g.,
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Saccoccio v. JP Morgan Chase Bank, N.A., 297 F.R.D. 683, 698 (S.D. Fla. 2014) (rejecting
objector’s argument that injunctive relief should not be used as support for requested attorney’s
fees); Wexler, 496 F. Supp. 2d at 154 (“[t]he value of injunctive relief for determining the
amount in controversy can be calculated as the cost to the defendant.”) (citing Comm. for GI
Rights, 518 F.2d at 472-73). Here, the fee award of 25% of the settlement value does not take
into account any value of the injunctive relief achieved through this Settlement, but further
supports the reasonableness of the requested fees.
2. Reaction of the Class Members
Although the August 15, 2014 deadline for Class Members to object to any aspect of
the Settlement or to the application for attorneys’ fees and expenses has not yet passed, so far, as
of July 31, 2014, there have been no objections to the fee request.5
Furthermore, as discussed in further detail in the Final Approval portion of this
Motion, the reaction of the Class to the Settlement has been extremely positive. Indeed, to
date, there have been no objections to any aspect of the Settlement, fees or expenses, or
Plaintiff service awards, and only 16 Class Members have excluded themselves from the
Settlement. See Prutsman Decl., ¶ 9. Accordingly, this factor strongly weighs in favor of this
Court’s approval of the fee request here.
3. The Skill and Efficiency of the Attorneys Involved
The quality of the representation and the standing of counsel at the bar are important
factors in determining the reasonableness of the requested fee. See Ressler v. Jacobson, 149
F.R.D. 651, 654 (M.D. Fla. 1992). Here, Lead Class Counsel are nationally known leaders
5 As set forth in § V above, and in the Prutsman Declaration, notice to prospective Class
Members was adequate.
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in complex representative litigation, including consumer fraud class actions. See concurrently
submitted Declaration of Janine L. Pollack in Support of Motion for Final Approval of Class
Action Settlement (“Pollack Final Approval Decl.,” attached as Exhibit 1) Ex. A (Lead Class
Counsel’s firm resume); § II.B.3 above (discussing the experience of Lead Class Counsel and
certain of Plaintiffs’ Counsel). Indeed, as demonstrated in the detailed complaint and motion to
dismiss briefing, and by virtue of the previous experience Lead Class Counsel and certain of
Plaintiffs’ Counsel have had successfully litigating false advertising actions in general and those
involving footwear products marketed as providing toning and strengthening benefits in
particular, this Settlement was made possible because of the reputation of Lead Class Counsel
and the other Plaintiffs’ Counsel. Plaintiffs’ Counsel’s skillful and efficient litigation clearly
demonstrates their quality here. From their extensive, thorough, and detailed complaint and
related briefing, the extensive discovery they conducted, and their skillful settlement
negotiations, Plaintiffs’ Counsel obtained a settlement that will provide a value of $3.75
million (in addition to changes already implemented by Vibram). This factor supports the
reasonableness of Plaintiffs’ Counsel’s fee request.6
4. Complexity and Duration of the Litigation
Nationwide consumer fraud class actions, like the Actions here, are difficult and
complex. From the outset, Plaintiffs’ Counsel faced highly complex questions about the
6 Courts have frequently viewed the quality of opposing counsel as an important factor in
evaluating the quality of the services rendered by plaintiff’s counsel. See In re Computron
Software, Inc., Sec. Litig., 6 F. Supp. 2d 313, 323 (D.N.J. 1998) (“performance and quality of
opposing counsel” was factor in determining appropriate fee); In re Equity Funding Corp. Sec.
Litig., 438 F. Supp. 1303, 1337 (C.D. Cal. 1977) (same). Here, Vibram was represented
vigorously by experienced and able counsel from Jones Day, a prominent and highly respected
firm with ample resources, which proved a formidable opponent throughout the duration of the
Actions.
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benefits of Vibram’s FiveFingers footwear and whether the effects squared with Vibram’s
advertising and marketing representations. Indeed, for over two and a half years, Plaintiffs’
Counsel investigated and litigated Vibram’s advertising and marketing claims.
If the litigation continued, Plaintiffs anticipate intricate arguments by Vibram that its acts
did not cause any injury-in-fact or damages to Plaintiffs and the Class and that a class could
not be certified in this case. For example, as noted above, Vibram has already argued at the
motion to dismiss stage, and would likely continue to argue, that (1) Plaintiffs and the Class
Members saw and relied on different advertisements; (2) bought the shoes for different purposes,
uses and reasons; (3) the shoes at issue do in fact provide the health benefits represented in
Vibram’s advertising and marketing; and (4) certain proposed Class Members purchased
Vibram’s shoes for reasons unrelated to the advertising at issue in the Actions. Indeed, Vibram
moved to strike the class allegations in the Action based on an argument that “members of the
proposed class might have purchased various styles of FiveFingers, for any number of different
purposes, by several different means, based on any number of representations, and at a variety of
prices.” See ECF No. 38 at 25. Vibram would also likely restate its argument made at the
pleadings stage that a nationwide or multi-state class is unconstitutional and precluded under
applicable choice of law principles (see ECF No. 38 at 26), and that a class-wide damages
methodology fails under Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). These and other
complex issues would have required extensive expert testimony and there is no guarantee that a
jury would believe Plaintiffs and their experts over those of Vibram. Further, as discussed above,
the quality of opposing counsel is an important factor in evaluating the quality of the services
rendered by Plaintiffs’ Counsel. Here, Vibram was represented by formidable attorneys who are
highly experienced in complex litigation.
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Accordingly, this factor also strongly supports the reasonableness of the fee request.
5. The Risk that the Litigation Will Be Unsuccessful
a. Success at Trial Was Far from Guaranteed
Although Plaintiffs and Plaintiffs’ Counsel strongly believe in the merits of the Actions,
the proposed Class faced a very real risk of recovering nothing at all if the case continued. As
discussed above, Vibram already raised numerous issues that could have led to the dismissal of
Plaintiffs’ claims prior to trial. For example, Plaintiffs’ claims might not have survived Vibram’s
pre-trial attacks regarding, inter alia, class certification and liability, as discussed above.
Furthermore, victory at trial for the Class was by no means assured. A trial of liability and
damages issues would most certainly involve substantial attorney and expert resources,
voluminous documentary and deposition evidence, vigorously contested motions, and
considerable judicial resource expenditures. In negotiating the Settlement, Plaintiffs’ Counsel had
to recognize the substantial risk of recovering nothing in light of the uncertainties inherent in class
litigations.
Even assuming the Class could recover a judgment at trial, the delay through trial, post-
trial motions, and the appellate process would likely deny the Class any recovery for years.
Thus, in light of these risks, Plaintiffs’ Counsel achieved a substantial recovery for the
Class and, as such, the requested fees and expenses are fully justified and should be awarded.
b. The Contingent Nature of Plaintiffs’ Counsel’s Representation
Also Supports the Requested Fee
“Little about litigation is risk-free, and class actions confront even more substantial risks
than other forms of litigation.” Teachers’ Ret. Sys. v. A.C.L.N. Ltd., No. 01-CV-11814, 2004
U.S. Dist. LEXIS 8608, at *11 (S.D.N.Y. May 14, 2004); see also In re Puerto Rican Cabotage
Antitrust Litig., 815 F. Supp. 2d 448, 460 (D.P.R. 2011) (noting that “whenever an attorney
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25
takes a case on a contingency basis, as [l]ead [c]ounsel has done, there is always the risk of
non-payment. Certainly there are instances where diligent and experienced plaintiffs attorneys
pour thousands of hours and dollars into their class action case only to recover little or nothing
at trial or on appeal”); In re Lupron, 2005 U.S. Dist. LEXIS 17456, at *15 (“Many cases
recognize that the risk assumed by an attorney is perhaps the foremost factor in
determining an appropriate fee award.”); In re Am. Bank Note Holographics, Inc., Sec. Litig.,
127 F. Supp. 2d 418, 433 (S.D.N.Y. 2001) (concluding it is “appropriate to take this
[contingent fee] risk into account in determining the appropriate fee to award”); In re
Prudential Sec. Ltd. P’ships Litig., 985 F. Supp. 410, 417 (S.D.N.Y. 1997) (“Numerous
courts have recognized that the attorney’s contingent fee risk is an important factor in
determining the fee award.”).
This risk encompasses the risk of no payment and even underpayment. See In re Tyco
Int’l, Ltd., 535 F. Supp. 2d at 268 (“Co-Lead Counsel, it must be remembered, took this case on
a wholly contingent basis. Had they lost on summary judgment or fallen short of establishing
liability at trial, they would have lost the tens of millions of dollars in expenses and all of the
attorney time that they collectively invested in the case.”); In re Relafen, 231 F.R.D. at 80
(“As class counsel notes, indeed, when Class Counsel undertook representation of the End-
Payor Purchaser Class, there were no assurances that any fees would be received. Class Counsel
were aware that they would likely have to expend thousands of hours, and hundreds of
thousands of dollars, in prosecuting this case over an extended period of time before having even
a possibility of recovering a fee. Class Counsel alone bore the risk of the case being dismissed at
the pretrial stage, of not prevailing at trial, or even losing on appeal.”); In re San Juan Dupont
Plaza Hotel Fire Litig., 50 F. Supp. 2d 100, 104 (D.P.R. 1999) (“[C]ounsel have undertaken this
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26
litigation subject to substantial risks of loss on the merits and have devoted many hours to the
prosecution of this cause with virtually no assurances of payment of their fees.”); In re Cont’l Ill.
Sec. Litig., 962 F.2d 566, 569-70 (7th Cir. 1992) (reversing district court’s fee award where court
failed to account for, among other things, risk of underpayment to counsel).
Evaluating the risks undertaken by Plaintiffs’ Counsel in prosecuting this complex
consumer class action fully supports the reasonableness of the requested fee. Plaintiffs’ Counsel
undertook the Actions on a wholly contingent basis. Plaintiffs’ Counsel have not been
compensated for their time or expenses since the Actions began, and would have received no
compensation or expense reimbursement had this case not been successful.7
From the beginning, Plaintiffs’ Counsel understood they were embarking on a complex,
expensive, and lengthy litigation with no guaranteed compensation for the enormous investment
of time and money the case would require. Because of the nature of a contingent practice where
predominantly complex cases last several years, not only do contingent litigation firms have to
pay regular overhead, but they also must advance substantial litigation expenses. Under
these circumstances, the financial burden for contingent-fee counsel is far greater than for
firms paid on an ongoing basis. The factor labeled by the courts as “the risks of litigation” is
not an empty phrase. Indeed, meaningful settlements in actions such as this can occur because
7 The risk of no recovery in complex cases of this type is real and heightened when, as
here, counsel press to achieve the very best result for those they represent. There are
numerous class actions in which plaintiffs’ counsel expended thousands of hours and yet
received no remuneration despite their diligence and expertise. See, e.g., Robbins v. Koger
Props., 116 F.3d 1441 (11th Cir. 1997) (jury verdict of $81 million for plaintiffs against an
accounting firm reversed on appeal); Anixter v. Home-Stake Prod. Co., 77 F.3d 1215 (10th
Cir. 1996) (Tenth Circuit overturned securities fraud class action jury verdict for plaintiffs in
case filed in 1973 and tried in 1988 on basis of 1994 Supreme Court opinion); Backman v.
Polaroid Corp., 910 F.2d 10 (1st Cir. 1990) (en banc) (class won on a substantial jury
verdict and a motion for judgment n.o.v. was denied, but on appeal the judgment was reversed
and the case dismissed, after 11 years of litigation).
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defendants and their counsel know that leading members of the plaintiffs’ bar (such as here)
stand ready to force a resolution on the merits and force a trial in the case.8
6. The Amount of Time Devoted to the Case by Plaintiffs’ Counsel
Plaintiffs’ Counsel, and their professional support staff, expended substantial time and
effort (over 2,262.10 hours for a lodestar of $1,243,539.75 as of July 30, 2014), pursuing the
Actions on behalf of the Class. See Pollack Final Approval Decl., ¶¶ 4-8; Plaintiffs’ Counsel’s
concurrently filed declarations, attached as Exhibits 3-11. Accordingly, the requested fee award
of $937,500 represents a fractional multiplier of 0.75.9 Further, Lead Class Counsel will need to
devote additional time to bring the Settlement to a final resolution, time that will not be part of
time currently being submitted to the Court. See Pollack Final Approval Decl., ¶ 6.
a. Investigation, Complaints, Motions to Dismiss and Discovery
Plaintiffs’ Counsel conducted an extensive and thorough investigation prior to and after
filing the initial complaints, which included, inter alia, retaining and working with a scientific
expert with expertise in the orthopedic and physiological effects of footwear on the human body,
gathering and analyzing studies and research concerning barefoot (minimalist) footwear,
searching for and reviewing Vibram’s advertising and marketing materials for its FiveFingers
8 To this end, public policy considerations, which is another factor some courts consider
in evaluating attorneys’ fees requests, favor awarding Plaintiffs’ Counsel the fees requested
here because Plaintiffs’ Counsel provided an “invaluable service by aggregating the seemingly
insignificant harms” of Class Members who would likely not pursue redress for harms on an
individual basis. See In re Puerto Rican Cabotage, 815 F. Supp. 2d at 463; see also In re Lupron,
2005 U.S. Dist. LEXIS 17456, at *22-23 (“While in the abstract, the public has no particular
interest in whether or not lawyers are paid a fee for bringing class actions, there is a significant
societal interest in obtaining redress for prescription drug consumers whose harms could not,
given the cost of litigation, be pursued on an individual basis. The public interest is also served
by the defendants’ disgorgement of the proceeds of predatory marketplace behavior.”).
9 Even considering the hours and lodestar without the later-transferred De Falco action from
Illinois, Plaintiffs’ Counsel has worked 2,043.43 hours for a lodestar of $1,106,922.25, which is still a
fractional multiplier of 0.85.
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products, and researching and analyzing available financial and sales information about Vibram
generally, and marketing research and strategy analysis and financial and sales information
related to Vibram’s FiveFingers products in particular. See Pollack Preliminary Review Decl., ¶
4.
On March 21, 2012, Plaintiff Bezdek filed the first above-captioned action in this Court,
Bezdek v. Vibram USA Inc., et al., Case Number 1:12-cv-10513-DPW (D. Mass.), alleging
violations of Mass. Gen. Laws ch. 26, § 91, Florida Statutes § 501.201 et seq., and unjust
enrichment. (ECF No. 1). On July 9, 2012, a putative class action captioned Safavi v. Vibram
USA Inc., et al., Case Number CV 12-5900-BRO-JCG (C.D. Cal.) was filed in the United States
District Court for the Central District of California. Plaintiff Safavi is represented by the same
counsel as Plaintiff Bezdek, and his complaint is substantially similar to hers. Safavi’s
Complaint includes claims for violations of California’s Unfair Competition Law, Business and
Professions Code § 17200 et seq., California’s Consumers Legal Remedies Act, Civil Code §
1750 et seq., and breach of express warranty. Plaintiffs’ Counsel successfully opposed Vibram’s
motion to dismiss the Bezdek complaint and, in the alternative, to strike its class allegations. See
ECF No. 38.10
Following this Court’s motion to dismiss ruling, the Bezdek Action proceeded into party
and non-party discovery, which is described in detail in the memorandum in support of the
10 On August 8, 2012, Plaintiff De Falco, through different counsel, filed an action in the
Superior Court for Will County, Illinois, No. 2012L601. On September 11, 2012, the De Falco
action was removed to the Northern District of Illinois and docketed as De Falco v. Vibram USA
LLC et al., 1:12-CV-07238 before Hon. Virginia M. Kendall. On March 18, 2013, Judge
Kendall denied De Falco’s motion to remand, granted in part and denied in part Vibram’s
Motion to Dismiss De Falco’s Complaint, and granted Vibram’s motion to transfer. See De
Falco Dkt., ECF No. 36. On December 20, 2013, Plaintiff De Falco moved jointly with Plaintiff
Bezdek for a stay in light of settlement negotiations. See Bezdek Dkt., ECF No. 58.
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motion for preliminary review as well as the Pollack Preliminary Review Declaration. See ECF
No. 72 at 8-9; Pollack Preliminary Review Decl., ¶¶ 9-15. For example, after serving discovery
requests, Plaintiffs received documents and information that included the FiveFingers’ products’:
(i) product design, testing, and development; (ii) scientific studies and research about the
marketing claims; (iii) marketing, advertising, media, and public relations; and (iv) sales and
accounting records. Vibram served deposition subpoenas on Plaintiffs Bezdek and De Falco,
while Plaintiffs served a 30(b)(6) deposition notice on Vibram. Lead Class Counsel also served
document subpoenas on third parties involved in the relevant marketing and science issues.
Thus, at the time that the Parties reached a potential settlement agreement and sought a stay,
Plaintiffs had prepared and were ready to file their motion for certification of a plaintiff class,
and had worked with an expert and were prepared to identify their expert on class issues. The
litigation was thus well advanced and much work had been done that put Lead Class Counsel in
a position to evaluate the merits of settlement proposals and to engage in arm’s-length settlement
negotiations.
b. Settlement Negotiations
Plaintiffs’ Counsel obtained an excellent result for the Class through their skillful
settlement negotiations. As detailed more fully in the Pollack Preliminary Review Declaration,
beginning in late 2012, the Parties agreed to attend a two-day mediation session with Professor
Eric Green of Resolution, LLC, in Boston, Massachusetts. The mediation was scheduled to
extend over January 9 and 10, 2013. However, differences in the Parties’ positions remained so
significant after the first day that the Parties agreed that it would not be productive to return for
the second day. See Pollack Preliminary Review Decl., ¶ 19. As such, the Parties continued
with litigation.
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Beginning in late November 2013, following the Court’s motion to dismiss ruling, and in
the midst of discovery and preparation of the class certification motion, settlement negotiations
resumed directly between Lead Class Counsel and Vibram’s Counsel. Discussions continued
over the following weeks, during which the Parties communicated numerous times by phone and
email over the terms of a potential settlement. See id., ¶ 20. The Parties reached an agreement in
principle on December 12, 2013.
Although the essential terms of the Settlement were negotiated by December 12, 2013,
the Parties still had work to do on details of the Settlement. This included negotiating terms of
the notice program and the documents comprising the notice. As part of this process, the Parties
worked with a class action notice specialist and refined aspects of the Settlement Agreement
and its exhibits. See id., ¶ 20.
C. The Requested Fees Fall Well Within the Range of Fees Awarded in Cases
Within the First Circuit
The requested fee award is 25% of the $3.75 million monetary value of the Settlement.
The requested amount is within if not below the range of percentage awards in numerous
litigations throughout this Circuit. “Courts in this circuit generally award attorneys’ fees in the
range of 20-30%, with 25% as ‘the benchmark[.]’” Latorraca v. Centennial Techs., Inc., 834 F.
Supp. 2d 25, 27-28 (D. Mass. 2011) (collecting cases). While 25% has been described as a
benchmark, district courts have granted awards of attorneys’ fees at or above a 30% fee. See,
e.g., In re StockerYale, Inc. Sec. Litig., No. 1:05cv00177-SM, 2007 U.S. Dist. LEXIS 94004, at
*21 (D.N.H. Dec. 18, 2007) (awarding 33% of gross settlement fund); In re Relafen, 231
F.R.D. at 82 (awarding 1/3 of settlement fund); Malanka v. de Castro, Nos. 85-CV-2154, 88-
CV-3505, 1990 U.S. Dist. LEXIS 18171, at *3 (D. Mass. Nov. 20, 1990) (awarding 1/3 of
settlement fund); Scovil v. FedEx Ground Package Sys., No. 10-515, 2014 U.S. Dist. LEXIS
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 39 of 48
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33361, at *20-22 (D. Me. Mar. 14, 2014) (awarding 1/3 of settlement fund); Applegate v. Formed
Fiber Techs., LLC, No. 10-473, 2013 U.S. Dist. LEXIS 166171, at *3 (D. Me. Nov. 21, 2013)
(awarding 1/3 of settlement fund).
Importantly, in determining the amount of the benefit conferred, the appropriate measure
is the total recovery available for the class, not the amount actually claimed by class members.
See Boeing, 444 U.S. at 480-81; see also Williams v. MGM-Pathe Commc’ns Co., 129 F.3d
1026, 1027 (9th Cir. 1997). This method recognizes that the efforts of class counsel established
the entire settlement, including non-monetary benefits, for the benefit of the entire class. See
Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 437 (2d Cir. 2007) (citing Williams,
129 F.3d at 1027); Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1049 (9th Cir. 2002) (“Incidental
or nonmonetary benefits conferred by the litigation are a relevant circumstance.”).
Accordingly, the requested percentage of 25% of the Settlement Fund for attorneys’
fees here is, Plaintiffs submit, fair and reasonable and should be awarded by the Court. Vibram
agreed not to oppose any request by Plaintiffs’ Counsel for attorneys’ fees up to 25% of the
Settlement Fund, to be paid for from the Settlement Fund.
D. Plaintiffs’ Counsel’s Lodestar Supports Their Fee Request
The requested fees are also reasonable when evaluated in relation to Plaintiffs’ Counsel’s
lodestar. In the First Circuit, the lodestar approach, though not required, can serve as a check on
the appropriateness of the percentage of funds fee. See New England Carpenters Health Benefits
Fund v. First Databank, Inc., No. 05-11148, 2009 U.S. Dist. LEXIS 68419, at *8 (D. Mass.
Aug. 3, 2009); see also In re Relafen, 231 F.R.D. at 81-82. Under the lodestar method, a
court must engage in a two-step analysis: first, to determine the lodestar, the court multiplies
the number of hours each attorney spent on the case by each attorney’s reasonable hourly rate;
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and second, the court adjusts that lodestar figure (by applying a multiplier) to reflect such
factors as the risk and contingent nature of the litigation, the result obtained and the quality
of the attorney’s work. See, e.g., Lindy Bros. Builders, Inc. v. Am. Radiator & Standard
Sanitary Corp., 487 F.2d 161, 167-69 (3d Cir. 1973), subsequently refined in Lindy Bros.
Builders v. Am. Radiator & Standard Sanitary Corp., 540 F.2d 102, 116-18 (3d Cir. 1976) (en
banc). Performing the lodestar cross-check here confirms the reasonableness of the fee
requested by Plaintiffs’ Counsel.
Plaintiffs’ Counsel spent more than 2,262.10 hours in the prosecution of the Actions,
resulting in a lodestar of $1,243,539.75. Thus, the requested fee of $937,500 results in a
fractional multiplier of approximately 0.75 of Plaintiffs’ Counsel’s time.11 Courts have held that
a fractional or negative multiplier is highly suggestive of the reasonableness of requested
attorneys’ fees. See, e.g., Covillo v. Specialty’s Café, No. C-11-00594 DMR, 2014 U.S. Dist.
LEXIS 29837, at *24 (N.D. Cal. Mar. 6, 2014); see also In re Initial Pub. Offering Sec. Litig.,
671 F. Supp. 2d 467, 515 (S.D.N.Y. 2009) (awarding fees of 33 1/3%, noting that even in a
mega-fund case, there is “no real danger of overcompensation” where the award represents a
fractional multiplier to the lodestar); In re Blech Sec. Litig., Nos. 94 CIV. 7696(RWS), 95 CIV.
6422(RWS), 2000 U.S. Dist. LEXIS 6920, at *15 (S.D.N.Y. May 19, 2000) (awarding lead
counsel 30% of the settlement, and confirming that the award was reasonable because it
represented a fractional multiplier of lead counsel’s lodestar).12
11 As noted above, Plaintiffs’ Counsel had a fractional multiplier of 0.85 without the later-
transferred De Falco action.
12 This multiplier is further reasonable because the First Circuit has noted that multipliers as
high as 4.5 have been appropriately awarded in protracted complex litigation. See Wildman v.
Lerner Stores Corp., 771 F.2d 605, 613 (1st Cir. 1985) (“While multiples of 2, 3, 4, and 4.5 have
(continued…)
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E. Plaintiffs’ Counsel’s Request for Reimbursement of Expenses Should Be
Granted
In addition to attorneys’ fees, Plaintiffs’ Counsel also respectfully request the approval of
the reimbursement of expenses incurred while prosecuting the Actions. A total of $62,133.68 in
expenses was reasonably and actually incurred. See Pollack Final Approval Decl., ¶ 10. It is
well-settled that attorneys who have created a common fund for the benefit of a class are
entitled to reimbursement for their expenses incurred in creating the fund. See, e.g., Mills
v. Electric Auto-Lite Co., 396 U.S. 375, 389-90 (1970); In re Fidelity/Micron Sec. Litig., 167
F.3d at 737 (“lawyers whose efforts succeed in creating a common fund for the benefit of a
class are entitled . . . to recover from the fund, as a general matter, expenses, reasonable in
amount, that were necessary to bring the action to a climax.”).
The submitted expenses in this case were all reasonable, necessary, and directly related to
the prosecution of the Action.13 The expenses are attributable to items such as mediation and
filing fees, the costs of computerized research, an electronic document review database, copying
documents and other expenses incurred in the ordinary course of litigation, such as travel and
____________________
(…continued)
occasionally been given, these multipliers occur primarily in protracted multidistrict antitrust and
securities cases involving recoveries of ten million dollars or more”); see also New England
Carpenters, 2009 U.S. Dist. LEXIS 68419, at *9-10 (approving 8.3 lodestar multiplier); Conley,
222 B.R. at 182 (8.9 multiplier). Moreover, the 0.75 multiplier here falls well below the range of
multipliers awarded by courts within this Circuit and elsewhere. See, e.g., In re CVS Corp. Sec.
Litig., C.A. No. 01-11464 (JLT), slip op., at 7 (D. Mass. Sept. 7, 2005) (awarding 25% of $110
million, representing 3.27 multiplier); In re Visa Check/Mastermoney Antitrust Litig., 297 F.
Supp. 2d 503, 524 (E.D.N.Y. 2003) (3.5 multiplier); In re Aetna Inc. Sec. Litig., No. MDL 1219,
2001 U.S. Dist. LEXIS 68, at *59 (E.D. Pa. Jan. 4, 2001) (awarding 30% of $82.5 million
settlement fund, representing 3.6 multiplier).
13 The expenses incurred in the Actions are described in further detail in the accompanying
Plaintiffs’ Counsel’s Declarations, attached as Exhibits 3-11.
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34
related expenses. See Exs. 1, 3-11. All of these expenses were reasonably and necessarily
incurred, and are of the sort that would typically be billed to paying clients in the marketplace.
See In re Immune Response Sec. Litig., 497 F. Supp. 2d 1166, 1177-78 (S.D. Cal. 2007)
(awarding as reasonable and necessary, reimbursement for “1) meals, hotels, and transportation;
2) photocopies; 3) postage, telephone, and fax; 4) filing fees; 5) messenger and overnight
delivery; 6) online legal research; 7) class action notices; 8) experts, consultants, and
investigators; and 9) mediation fees”); Beane v. Bank of N.Y. Mellon, No. 07 Civ. 09444 (RMB),
2009 U.S. Dist. LEXIS 27504, at *25-26 (S.D.N.Y. Mar. 31, 2009) (awarding as “properly
chargeable to the Settlement Fund,” because they “are the type for which the paying, arms’
length market reimburses attorneys,” reimbursement for court fees, photocopying and
reproduction, deposition transcripts, postage and messenger services, transportation and lodging,
telephone bills, and expert and electronic litigation database support).
Accordingly, Plaintiffs’ Counsel respectfully submit that their request for
reimbursement of these expenses of $62,133.68 (which is less than the $70,000 stated in the
Notice) is reasonable and should be approved.
F. Each Plaintiff Should Be Awarded a Service Award
The Plaintiffs in the Actions seek service awards to compensate them for their efforts.
Plaintiffs Bezdek and De Falco each seek an award of $2,500 in light of their involvement in
their respective litigations as detailed in the declarations that they have submitted in support of
this motion. See Declaration of Valerie Bezdek (“Bezdek Decl.,” attached as Exhibit 12);
Declaration of Brian De Falco (“De Falco Decl.,” attached as Exhibit 13). Plaintiff Safavi seeks
an award of $1,500 due to his active involvement in his Action until it was stayed by the District
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35
Court for the Central District of California, and subsequent efforts in connection with the
Settlement. See Declaration of Ali Safavi (“Safavi Decl.,” attached as Exhibit 14).
Federal courts often approve case contribution awards to plaintiffs who prosecuted
actions on the theory that there would be no class-wide benefit absent their suits. These awards
recognize the burdens assumed by plaintiffs in instituting and prosecuting the actions, the time
spent on communicating with counsel and fulfilling responsibilities of supervision, and the risks
that plaintiffs bear in bringing the suit. See In re Relafen, 231 F.R.D. at 82 (“Because a named
plaintiff is an essential ingredient of any class action, an incentive award can be appropriate to
encourage or induce an individual to participate in the suit.”); In re Lupron, 2005 U.S. Dist.
LEXIS 17456, at *24-25 (“Incentive awards serve an important function in promoting class
action settlements, particularly where, as here, the named plaintiffs participated actively in the
litigation.”).
“In granting incentive awards to named plaintiffs in class actions, courts consider not
only the efforts of the plaintiffs in pursuing the claims, but also the important public policy of
fostering enforcement laws and rewarding representative plaintiffs for being instrumental in
obtaining recoveries for persons other than themselves.” Bussie v. Allmerica Fin. Corp., No.
97-CV-40204, 1999 U.S. Dist. LEXIS 7793, at *11-12 (D. Mass. May 19, 1999).
The Plaintiffs here have been actively involved in all stages of the litigation. They
vigorously pursued the interests of the Class by undertaking the responsibilities attendant with
serving as a named plaintiff, including searching their files for relevant records, communicating
with Plaintiffs’ Counsel, and making themselves available whenever needed. See Pollack Final
Approval Decl., ¶ 11; Bezdek Decl.; De Falco Decl.; Safavi Decl. Plaintiffs likewise kept
themselves informed of the various attempts at resolution of the Actions and, after extensive
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36
discussions with Plaintiffs’ Counsel, agreed to the terms of the proposed Settlement. See
Pollack Final Approval Decl., at ¶ 11. Moreover, the awards sought represent amounts that are
less than or even with other awards approved in similar class actions in this Circuit.14
In sum, the requested modest awards to the named Plaintiffs are fair and reasonable and
should be approved by the Court.
VI. CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that the Court (1) confirm
certification of the Class for Settlement purposes; (2) grant final approval of the Settlement;
(3) approve Lead Class Counsel’s application for attorneys’ fees in the amount of $937,500
and reimbursement of expenses in the amount of $62,133.68; and (4) approve $2,500 service
awards for Plaintiffs Bezdek and De Falco and a $1,500 service award for Plaintiff Safavi.
Dated: August 4, 2014 BERMAN DEVALERIO
By: /s/ Nathaniel L. Orenstein
GLEN DEVALERIO (BBO #122010)
NATHANIEL L. ORENSTEIN (BBO #664513)
One Liberty Square
Boston, MA 02109
Telephone: 617-542-8300
Facsimile: 617-542-1194
gdevalerio@bermandevalerio.com
norenstein@bermandevalerio.com
Local Counsel for Plaintiffs
(Continued)
14 See, e.g., In re Puerto Rican Cabotage, 815 F. Supp. 2d at 469 (awarding an $8,000
service award per class representative totaling $48,000); In re Relafen, 231 F.R.D. at 82
(awarding $8,000 to each named consumer plaintiff, $9,000 to each consumer organization,
and $14,000 for each named third party payor plaintiff); In re Lupron, 2005 U.S. Dist.
LEXIS 17456, at *24-25 (granting 18 plaintiff awards ranging from $2,500 to $25,000 each).
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 45 of 48
37
WOLF HALDENSTEIN ADLER FREEMAN
& HERZ LLP
JANINE L. POLLACK
270 Madison Avenue, 10th Floor
New York, New York 10016
Telephone: 212-545-4600
Facsimile: 212-686-0114
pollack@whafh.com
Lead Class Counsel
BLOOD HURST & O’REARDON, LLP
TIMOTHY G. BLOOD
THOMAS J. O’REARDON II
701 B Street, Suite 1700
San Diego, CA 92101
Telephone: 619-338-1100
Facsimile: 619-338-1101
tblood@bholaw.com
toreardon@bholaw.com
SHEPHERD, FINKELMAN, MILLER
& SHAH, LLP
JAMES C. SHAH
35 East State Street
Media, Pennsylvania 19063
Telephone: 610-891-9880
Facsimile: 610-891-9883
jshaw@sfmslaw.com
GARY ROBERTS & ASSOCIATES, P.A.
MICHAEL K. BECK
324 Datura Street
Suite 223
West Palm Beach, FL 33401
Telephone: 561-686-1800
Facsimile: 561-686-1533
michael@palmbeachtrialattorney.net
(Continued)
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 46 of 48
38
POMERANTZ LLP
JAYNE A. GOLDSTEIN
1792 Bell Tower Lane, Suite 203
Weston, FL 33326
Telephone: 954-313-3454
Facsimile: 954-313-3455
jagoldstein@pomlaw.com
MILBERG LLP
JOSHUA E. KELLER
One Pennsylvania Plaza
49th Floor
New York, NY 10119
Telephone: 212-594-5300
Facsimile: 212-868-1229
jkeller@milberg.com
THE BREEDEN LAW FIRM
TONY W. BREEDEN
578 Washington Boulevard, Suite 552
Marina Del Rey, CA 90292
Telephone: 310-984-6861
Facsimile: 310-984-6849
tony@breedenlawfirm.com
SWEETNAM LLC
WILLIAM M. SWEETNAM
582 Oakwood Avenue, 200
Lake Forest, IL 60045
Telephone: 847-559-9040
Facsimile: 847-235-6618
wms@sweetnamllc.com
mmr@sweetnamllc.com
WHATLEY KALLAS, LLC
PATRICK J. SHEEHAN (BBO # 639320)
60 State Street, Seventh Floor
Boston, Massachusetts 02109
Telephone: 617-573-5118
Fascimile: 617-573-5090
psheehan@whatleykallas.com
Plaintiffs’ Counsel
Case 1:13-cv-10764-DPW Document 81 Filed 08/04/14 Page 47 of 48
CERTIFICATE OF SERVICE
I hereby certify that this document(s) filed through the ECF system will be sent
electronically to the registered participants as identified on the Notice of Electronic Filing (NEF)
and paper copies will be sent to those indicated as non-registered participants on August 4, 2014.
/s/ Nathaniel L. Orenstein
Nathaniel L. Orenstein
39
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