1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438
JEFF S. WESTERMAN (94559)
jwesterman@jswlegal.com
WESTERMAN LAW CORP.
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Tel: (310) 698-7450
Fax: (310) 201-9160
SUSAN G. KUPFER (141724)
skupfer@glancylaw.com
GLANCY BINKOW & GOLDBERG LLP
One Embarcadero Center, Suite 760
San Francisco, CA 94111
Tel: (415) 972-8160
Fax: (415) 972-8166
MARC M. SELTZER (54534)
mseltzer@susmangodfrey.com
SUSMAN GODFREY L.L.P.
1901 Avenue of the Stars, Suite 950
Los Angeles, CA 90067
Tel: (310) 789-3100
Fax: (310) 789-3150
Plaintiffs’ Settlement Class Counsel
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
In re KOREAN AIR LINES CO., LTD.
ANTITRUST LITIGATION
MDL NO. 1891
Master File No.
CV 07-05107 SJO (AGRx)
MEMORANDUM IN SUPPORT
OF PLAINTIFFS’ MOTION FOR
IMPOSITION OF APPEAL
BONDS PURSUANT TO RULE 7
OF THE FEDERAL RULES OF
APPELLATE PROCEDURE
AND FOR AN ORDER
ALLOWING DISCOVERY OF
OBJECTORS
Date: July 28, 2014
Time: 10:00 a.m.
Place: Courtroom of the Hon.
S. James Otero
This Document Relates To:
All Actions
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 1 of 26 Page ID #:9527
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 i
TABLE OF CONTENTS
I. INTRODUCTION ......................................................................................... 1
II. BACKGROUND ......................................................................................... 3
A. The Litigation ....................................................................................... 3
B. The Settlement Agreement and Attorneys’ Fees ................................. 4
1. Terms of the Settlement Agreement .......................................... 4
2. Class Notice Process .................................................................. 4
3. Attorneys’ Fees .......................................................................... 5
C. The Objections ..................................................................................... 5
1. The Johnson Objection Was Filed by a Discredited Serial
Objector ..................................................................................... 5
2. The Nedlouf Objection Was Filed by a Close Relative
Who Swore Under Oath That Nedlouf’s Objection Was
Motivated By Spite Towards Korean Air .................................. 7
3. This Court Found that Both Objectors Lacked Standing
and Issued an Order to Show Cause .......................................... 8
4. The Objectors’ Failed to Meet Their Burden to Show
They Were Class Members, They Failed to Appear at the
Final Settlement Hearing, and They Never Rebutted
Plaintiffs’ Arguments Against Their Substantive
Objections or Their Lack of Standing ....................................... 9
D. Final Settlement Approval and Award of Attorneys’ Fees ............... 10
E. Costs Resulting from Objectors’ Appeals ......................................... 11
III. ARGUMENT ....................................................................................... 11
A. Requiring an Appeal Bond is Appropriate ........................................ 11
B. All of the Factors that the Ninth Circuit Requires this Court to
Consider Support the Imposition of a Bond ...................................... 13
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 2 of 26 Page ID #:9528
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 ii
1. The burden is on the Objectors to prove they are unable to
post a bond, and there is no evidence that Objectors are
unable to do so. ........................................................................ 15
2. There is a substantial risk, particularly with out-of-state
objectors, that Objectors will not pay the costs if their
appeals are unsuccessful. ......................................................... 16
3. There is a substantial likelihood that Objectors will lose
their appeals and be subject to costs. ....................................... 17
C. Plaintiffs Seek Discovery of the Appealing Objectors ...................... 18
IV. CONCLUSION ....................................................................................... 20
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 3 of 26 Page ID #:9529
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 iii
TABLE OF AUTHORITIES
Cases
Azizian v. Federated Dep't Stores, Inc.,
499 F.3d 950 (9th Cir. 2007) .............................................................................. 12
Dennings v. Clearwire Corp.,
928 F. Supp. 2d 1270 (W.D. Wash. 2013) ............................................. 11, 12, 18
Embry v. ACER America Corp.,
2012 WL 2055030 (N.D. Cal. June 5, 2012) .......................................... 15, 16, 17
Figure Eight Holdings, LLC v. Dr. Jays, Inc.,
534 F. App'x 670 (9th Cir. 2013) ........................................................................ 15
Fleury v. Richemont North America, Inc.,
Case No. 05-C-4525 EMC, 2008 WL 4680033
(N.D. Cal. Oct. 21, 2008) .............................................................................. 15, 18
Gemelas v. Dannon Co., Inc.,
Case No. 08-CV-236, 2010 WL 3703811 (N.D. Ohio Aug. 31, 2010).............. 16
Glanzman v. Uniroyal, Inc.,
892 F.2d 58 (9th Cir. 1989) ................................................................................ 18
Hanlon v. Chrysler Corp.,
150 F.3d 1011 (9th Cir. 1998) ............................................................................ 17
In re Broadcom Corp. Secs. Litig.,
Case No. 01-SACV-275 DT (MLGx), 2005 U.S. Dist. LEXIS 45656
(C.D. Cal. Dec. 5, 2005) ..................................................................................... 12
In re Cathode Ray Tube Antitrust Litig.,
281 F.R.D. 531 (N.D.Cal. 2012) ........................................................................ 20
In re Countrywide Fin. Corp. Customer Data Sec. Breach Litig.,
Case No. 3:08-MD-01998, 2010 WL 5147222 (W.D. Ky. Dec. 13, 2010) ....... 14
In re Law Office of Jonathan E. Fortman, LLC,,
2013 U.S. Dist. LEXIS 13903 (E.D. Mo. Feb. 1, 2013) ...................................... 8
In re Magsafe Apple Power Adapter Litig.,
Case No. 12-15757, 2014 WL 1624493 (9th Cir. Apr. 24, 2014) ...................... 15
In re Netflix Privacy Litig.,
2013 WL 6173772, (N.D. Cal. Nov. 25, 2013) ................................ 12, 13, 15, 19
In re Oil Spill, No. MDL 2179 Section J,,
2013 U.S. Dist. LEXIS 4595 (E.D. La. Jan. 11, 2013) .................................... 2, 5
In re Toyota Motor Corp.,
2013 WL 5775118 (C.D. Cal. Oct. 21, 2013) .................................................... 14
In re Uponor,
2012 WL 3984542 (D. Minn. Sept. 11, 2012) ...................................................... 6
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 4 of 26 Page ID #:9530
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 iv
In Re Wal-Mart Wage & Hour Empl. Practices Litig.,
Case No. 06-CV-00225 PMP-PAL, MDL 1735, 2010 U.S. Dist. LEXIS 21466
(D. Nev. Mar. 8, 2010) ....................................................................................... 13
Miletak v. Allstate Ins. Co.,
Case No. 06-C-03778 JW, 2012 WL 3686785
(N.D. Cal. Aug. 27, 2012) ...................................................................... 12, 15, 17
Nalder v. United Auto. Ins.,
Case No. 2:09-CV-1348-ECR-GWF, 2011 WL 4905717
(D. Nev. Oct. 14, 2011) ...................................................................................... 13
Schulken v. Washington Mut. Bank,
Case No. 09-CV-02708 LHK, 2013 WL 1345716
(N.D. Cal. Apr. 2, 2013) ......................................................................... 14, 15, 16
TFT-LCD (Flat Panel) Antitrust Litig.,
2013 U.S. Dist. LEXIS 34845 (N.D. Cal. Mar. 12, 2013) ................................... 6
Torrisi v. Tuscan Elec. Power Co.,
8 F.3d 1370 (9th Cir. 1993) ................................................................................ 18
Statutes
28 U.S.C. § 1920(6) ......................................................................................... 13, 14
Rules
Fed. R. App. P. 7 .............................................................................................. passim
Fed. R. App. P. 39 ....................................................................................... 12, 14, 15
Fed. R. Civ. P. 23(e)(5) ............................................................................................. 9
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 5 of 26 Page ID #:9531
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 1
Plaintiffs, by Plaintiffs’ Settlement Class Counsel, respectfully request that,
pursuant to Rule 7 of the Federal Rules of Appellate Procedure, this Court impose
appeal bonds in an amount of at least $290,000 on Stuart Johnson and Said Nedlouf,
(collectively “Objectors”) who have appealed the Court’s final judgment approving
the settlement with defendant Korean Air Lines, Ltd. (“Korean Air”). These bonds
are appropriate under Ninth Circuit law because there is a substantial likelihood that
the Objectors will lose their appeals and be subject to costs. If so, their appeals will
have served no purpose other than to delay the distribution of the settlement to
members of the Class. Plaintiffs also respectfully request an order allowing limited
discovery of the Objectors to verify basic information concerning their ability to post
a bond and their objections and appeals.
I. INTRODUCTION
This litigation commenced in August 2007, and has been, as this Court
characterized it, a “complex, lengthy, and hard-fought” case. (Doc. 684 at 1.) After
several years of litigation and months of arm’s-length negotiations and mediation,
the plaintiffs and defendant Korean Air agreed to a settlement that provides $39
million in cash and $26 million in coupons to the Class. (Doc. 596-2.) (settlement
agreement.) This Court approved the settlement agreement and an award of
attorneys’ fees on December 23, 2013. (Docs. 694, 695.) Prior to the Korean Air
settlement agreement, this Court approved a settlement between plaintiffs and
defendant Asiana Airlines, Inc. (“Asiana”) that provides an additional $11 million in
cash and $10 million in coupons to the Class. (Doc. 505) (order approving
settlement) (Doc. 422-2) (Asiana settlement agreement).
Despite the remarkable recovery obtained for the benefit of the Class, the
Objectors seek to hold up the settlement and appeal this Court’s final judgment
approving the settlement with Korean Air and the orders striking their objections,
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 6 of 26 Page ID #:9532
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 2
and granting attorneys’ fees and costs.1 Without exception, the objections filed by
these Objectors were rejected by the Court. Indeed, at the December 2, 2013 final
approval hearing, the Court exhaustively considered the fairness of the settlement
and rejected all of the objections made to the settlement and fees and cost application
and found them to be without merit. (Doc. 679) (Ex. C) (transcript of final approval
hearing).2 Furthermore, the Court provided the Objectors with numerous
opportunities to show that they were members of the Class with standing to object.
Despite repeated chances to do so, none of the Objectors met their burden of
showing they had standing. This Court extensively evaluated their submissions and
concluded that they lacked standing, and that, in any event, their claims failed on the
merits. (Doc. 684.) In approving both the settlement and the award of attorneys’
fees, the Court again concluded that the substantive objections were meritless and
that the Objectors lacked standing to assert them.
One of the two Objectors is represented by an attorney who has objected to
class action settlements, taken appeals from the orders overruling his objections and
then attempted to extract payment from the fees of class counsel in return for
dismissing those appeals. See In re Oil Spill, No. MDL 2179 Section J, 2013 U.S.
Dist. LEXIS 4595, at *154 n.40 (E.D. La. Jan. 11, 2013) (noting that Mr. Joseph
Darrell Palmer, Objector Johnson’s counsel, “has been deemed a ‘serial objector’ by
several courts”).
Despite their clear lack of merit, their appeals of this Court’s orders overruling
the objections will delay the distribution of settlement proceeds to the more than
1 The Objectors have each appealed three orders of this Court: (1) Amended Final
Judgment and Order of Dismissal With Prejudice as to Defendant Korean Air Lines
Co., Ltd., (Doc. 694); (2) Order Granting Plaintiffs’ Motion for an Award of
Attorneys’ Fees and Reimbursement of Expenses, (Doc. 695); and (3) Order Striking
Objections for Failure to Show Class Membership (Doc. 684).
2 References to “Ex.__” are to the exhibits attached to the Declaration of Jeff S.
Westerman, filed concurrently herewith.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 7 of 26 Page ID #:9533
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 3
90,000 members of the Class who have filed claims. To ensure that these Objectors
are able to pay costs when they lose their appeals, the Court should require each
Objector to post an appeal bond in the amount of at least $290,000. As set forth
below, these amounts are appropriate under the Federal Rules of Appellate
Procedure and Ninth Circuit case law based on the likelihood that the Objectors’
appeals will fail and the risk that they will avoid paying costs.
II. BACKGROUND
A. The Litigation
The litigation commenced in August 2007. The parties engaged in substantial
motion practice and litigated several important issues. Korean Air and Asiana each
filed initial motions to dismiss. (Docs. 99, 102.) After extensive briefing, on June 25,
2008, this Court granted these motions in part thereby excluding the claims of airline
passengers with so-called “pass through claims,” whose air travel did not originate in
the U.S. or Korea and terminate in the other. (Doc. 155.)
On October 9, 2010, after extensive arm’s-length negotiations, Plaintiffs filed
a motion for preliminary approval of a settlement with Asiana. (Doc. 422.) This
Court granted preliminary approval on February 18, 2011. (Doc. 462.) On March 11,
2011, Plaintiffs moved for final approval of the settlement. (Doc. 467.) On July 15,
2011, this Court approved the settlement (doc. 505), and entered judgment and
dismissed Asiana from the case (doc. 507).
After the Asiana settlement, plaintiffs and Korean Air continued to engage in
discovery and zealously litigate the case. On July 3, 2013, after months of arm’s-
length negotiations and mediation, plaintiffs filed a motion for preliminary approval
of a settlement agreement with Korean Air. (Doc. 595.) On July 31, 2013, this Court
granted preliminary approval of the settlement agreement. (Doc. 608.) On October 4,
2013, Plaintiffs filed a motion for attorneys’ fees and reimbursement of expenses.
(Doc. 623.)
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 8 of 26 Page ID #:9534
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 4
B. The Settlement Agreement and Attorneys’ Fees
1. Terms of the Settlement Agreement
The Korean Air settlement resulted from arm’s-length negotiations conducted
under the supervision and with the assistance of former United States District Judge
Layn Phillips as the parties’ mediator. It confers substantial benefits on the Class in
the form of $39 million in cash and coupons providing $26 million in credits against
the cost of air travel. Id. The Court appointed the Chicago Clearing Corporation to
create a market for the sale and exchange of the coupons for Class members who do
not wish to use them for their own travel. (Doc. 608 ¶ 17.) Together with the
settlement with Asiana, the entire settlement sum totals $86 million, including $50
million in cash and $36 million in coupons. See (Doc. 679 (Ex. C) at 7.)3 This Court
found that “this is a significant settlement sum.” Id. at 8.
2. Class Notice Process
Plaintiffs’ Settlement Class Counsel went to great lengths to notify
approximately potential Class members of the proposed settlement. Notice was
provided to one million potential Class members through direct mail, and 340,000
emails were sent to potential Class members. Id. at 9; (Doc. 694 at ¶ 9) (finding that
the notice was the “best notice practicable”). The Court has reiterated that notice was
provided through paid media, news media, a settlement website, a toll-free support
line with English and Korean speakers, and postcards mailed with English and
Korean taglines directing potential Class members to the website. Id. The
advertisements were in both Korean and English and ran in 35 Korean publications
in addition to several major newspapers, and news stories appeared more than 270
times. Id. at 9-10. This Court found that “[a]ll reasonable efforts were made to
3 This Court made several findings related to the coupons that it labeled “important,”
including that they are “freely transferable,” “not subject to any blackout dates,” not
subject to any redemption or other fees, are “valid for a significant period of time”
and can be exchanged “for cash” through the market created by the Chicago
Clearing Corporation. (Doc. 679 (Ex. C) at 8.)
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 9 of 26 Page ID #:9535
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 5
identify [and] to notify class members.” Id. at 11. As a result, more than 90,000
Class members have filed claims.
3. Attorneys’ Fees
Plaintiffs’ Settlement Class Counsel requested attorneys’ fees at the Ninth
Circuit’s benchmark of 25% of the Class recovery. See Doc. 624. As this Court
found, the fees are “fair, appropriate and reasonable whether expressed as a
percentage of the cash and coupon components of the settlements or by reference to
the total attorneys’ fee lodestar.” (Doc. 695 at ¶ 4.) Plaintiffs briefed extensively the
basis for the fee award, (doc. 624), and responded to each objection raised by the
Objectors, (doc. 661 at 17-24); see also doc. 679 (Ex. C). The fee award provides
that “counsel will be paid in the same coupons as the Class for the portion of the
settlements attributable to the coupons.” (Doc. 695 at ¶ 5.) As this Court stated, the
structure of the fee award “set a high bar for other cases.” (Doc. 679 (Ex. C) at 20.)
C. The Objections
More than 90,000 individuals filed claims with the court-appointed claims
administrator, and only three objections were submitted. Two of the objectors
(Johnson and Nedlouf) have appealed this Court’s orders.
1. The Johnson Objection Was Filed by a Discredited Serial
Objector
Joseph Darrell Palmer, Objector Johnson’s counsel, is a serial objector whose
business model is to file minimal paperwork with conclusory assertions, as he did
here, and then appeal and hold hostage the relief to the class in the hopes that counsel
will pay him off to withdraw his objection or drop his appeal.
As this Court noted, “Mr. Palmer has been deemed or found to be a serial
objector.” (Doc. 679 (Ex. C)); see id. at 12 (citing cases). Mr. Palmer has been
discredited and sanctioned by many courts. See, e.g., In re Oil Spill, 2013 U.S. Dist.
LEXIS 4595, at *154 fn. 40 (E.D. La. Jan. 11, 2013). Courts have noted that as a
professional objector, Palmer’s intervention in cases consists of filing many,
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 10 of 26 Page ID
#:9536
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 6
ultimately rejected, objections, “suggesting that the actions were to disrupt and
delay.” Arthur v. Sallie Mae, Inc., No. C10-198JLR (W.D. Wa. Sept. 14, 2012) (Ex.
D) at 16; see also In re Uponor, 2012 WL 3984542, at *3 (D. Minn. Sept. 11, 2012)
(“The Palmer Objectors’ objections and subsequent appeal appear little more than
dilatory tactics of questionable motivation.”). Courts have also found that Palmer has
repeatedly engaged in “bad faith and vexatious conduct” as an objector to class
action settlements. See e.g., In re Uponor, 2012 WL 3984542, at *3-4 (imposing
$170,000 appeal bond on the Palmer objectors). Mr. Palmer was recently held in
contempt of court and sanctioned for his refusal to respond to discovery. In re TFT-
LCD (Flat Panel) Antitrust Litig., 2013 U.S. Dist. LEXIS 34845, at *42-44 (N.D.
Cal. Mar. 12, 2013) (finding Palmer and his objector clients—his wife and aunt—in
civil contempt and awarding monetary sanctions).
Mr. Palmer also has a well-documented history of making misrepresentations
to the courts and his clients. In fact, Mr. Palmer’s sworn misrepresentations have
recently resulted in a disciplinary proceeding brought against him by the California
State Bar. See Exs. K, L. The proceedings involve claims that he made false
statements in petitions seeking pro hac vice admission in order to pursue objections
to class action settlements. In addition, this past March one of Mr. Palmer’s objector-
“clients” withdrew her supposed objection to a class action settlement, declaring
under penalty of perjury, “I have never before in my life met Darrell Palmer, I never
retained Mr. Palmer. . . never authorized anyone to file any documents on my
behalf” and explained that Mr. Palmer—her sister’s previous employer—had
fraudulently used her name to lodge an objection and an appeal its denial. In re:
Netflix Privacy Litig., Case No. 11-CV-00379 (EJD) Doc. 343-1 ¶ 8 (March 7, 2014)
(Ex. E). Only a few months prior to that case, another group of Mr. Palmer objectors
moved to dismiss their own appeal because “unbeknownst to [the objectors], Mr.
Palmer made inaccurate representations to the District Court” and the Fifth Circuit.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 11 of 26 Page ID
#:9537
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 7
In re Deepwater Horizon, Case No. 13-30221, Doc. 512341347 (5th Cir. Nov. 22,
2013) (Ex. I) at 14.
In Sallie Mae, a class action case filed in this circuit, the district court
excoriated Mr. Palmer for repeatedly lying to the court. See Ex. D at 4-18. Mr.
Palmer represented two objectors (and an intervenor) to the settlement and then
submitted a motion for attorneys’ fees seeking over $1 million. In rejecting this
application, the court pointed out that (1) his stated basis for claiming attorneys’ fees
was false; (2) he had an associate who was not admitted sign court filings; (3) it was
“undisputed that Mr. Palmer made a false statement in his pro hac vice application”;
(4) he “submitted false pro hac vice applications in at least three other cases”; and (5)
he “made several other misrepresentations in his motions for attorneys’ fees.” Id. He
should not be permitted to continue his delay tactics against the interests of the Class.
2. The Nedlouf Objection Was Filed by a Close Relative Who
Swore Under Oath That Nedlouf’s Objection Was
Motivated By Spite Towards Korean Air
Nedlouf’s objection is no more credible than Johnson’s. In his counsel’s own
words, Nedlouf’s objection is animated by personal animosity against Korean Air for
reasons totally unrelated to the merits of the settlement. This admission was made in
January 2014, when Mr. Arter, representing his own sister in objecting to a different
class action settlement, attempted to avoid being deposed. See Ex. F. Mr. Arter
swore in his affidavit that Nedlouf objects here because he “had very specific
problems with Korean Air in the way they treated him and his now deceased first
wife when they attempted to take [sic] ‘second honeymoon’ to Korea” and because
the settlement lacked “meaningful consideration.” Id. (Arter Aff. ¶ 15 attached
thereto as Ex. 4).4
4 His assertion that the settlement, which provides to the Class $39 million in cash
and $26 million in valuable coupons, does not provide “meaningful consideration”
is obviously untrue, leaving only personal animus as the genuine motive for his
objection.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 12 of 26 Page ID
#:9538
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 8
Although Nedlouf claims he has never personally objected in other class
actions, Mr. Arter represents his brother-in-law in this case and recently represented
his sister in objecting to a different class settlement only to dismiss her objections in
order to avoid being deposed. See Exs. F, G, H. Only after plaintiffs’ counsel raised
the issue and requested discovery of Nedlouf did Nedlouf admit his relation to his
counsel. See Doc. 657 at 5. Nedlouf’s assertions and their veracity are, to say the
least, highly suspect.
Where objectors purport to represent the interests of the class, and are
represented by a family member courts apply heightened scrutiny as to whether the
objector’s motivation is to benefit their counsel over the class. Cf. In re: Law Office
of Jonathan E. Fortman, LLC, 2013 U.S. Dist. LEXIS 13903, at *3 (E.D. Mo. Feb. 1,
2013) (“When assessing the merits of an objection to a class action settlement, courts
consider the background and intent of objectors and their counsel, particularly when
indicative of a motive other than putting the interest of the class members first.”).
Finally, Nedlouf never even bothered to submit a claims form in this action
(either on his own behalf or on behalf of Ms. Bizjak’s estate). His only apparent
purpose in objecting to the settlement in this case is to be paid to go away.
3. This Court Found that Both Objectors Lacked Standing and
Issued an Order to Show Cause
The initial Johnson and Nedlouf declarations provided nothing more than
unsupported conclusory assertions of their Class membership. See Docs. 635-1, 642.
Neither Objector attached any records of their alleged purchases or anything
whatsoever to substantiate their bald assertions. In response to the Objectors’ failure
to establish that they were potential Class members with standing to object, Plaintiffs
moved to compel discovery. (Doc. 655.) Because of the narrow window for taking
depositions before the final settlement hearing, this Court denied the discovery of
Objectors and their counsel, and instead filed an Order for Objectors to Show Cause
Regarding Class Membership. (Doc. 663.) The Court ruled:
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 13 of 26 Page ID
#:9539
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 9
None of the Objectors have established their class membership.
All of these statements of class membership are deficient. Nedlouf’s and
Johnson’s assertions repeat the class definition without specificity and
detail. . . . As such, the Court is unable to determine whether Objectors
are class members as required under FRCP 23(e)(5).
Objectors are hereby ordered to show cause in writing . . . to
demonstrate why their Objections should not be struck due to lack of
class membership.
Id. at 2.
4. The Objectors’ Failed to Meet Their Burden to Show They
Were Class Members, They Failed to Appear at the Final
Settlement Hearing, and They Never Rebutted Plaintiffs’
Arguments Against Their Substantive Objections or Their
Lack of Standing
In response to the Order to Show Cause, Nedlouf and Johnson each filed
supplemental declarations—Johnson filed his late. (Docs. 667, 670.) Despite being
given this second chance to show their Class membership and standing to object, the
Objectors failed to meet their burden. (Doc. 683.) Plaintiffs also filed a detailed
supplemental memorandum rebutting each objection on the merits, (doc. 661), to
which Objectors never responded.
This Court held a final settlement hearing on December 2, 2013. See Doc. 679
(Ex. C). The hearing was a third opportunity for Objectors to present evidence of
their status as Class members with standing to object, and another opportunity to
present the merits of their objections. Despite their promises to appear at the hearing,
see docs. 635 at 2, 640 at 1, neither Objector nor their counsel appeared. Three court
days prior to the hearing, Nedlouf filed a notice that he would not appear because he
“does not see any benefit to his appearance via counsel at the final approval
hearing.” (Doc. 668 at 2.) Thus, Nedlouf and Johnson avoided being questioned by
the court, forfeited their opportunity to offer further explanation, and offered no
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 14 of 26 Page ID
#:9540
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 10
evidence to rebut Plaintiffs’ arguments as to why the objections were meritless and
why their supplemental declarations failed to meet Objectors’ burden to prove Class
membership and standing. At the hearing, this Court carefully considered each and
every objection on the merits. See Doc. 679 (Ex. C). Plaintiffs also raised several
specific objections to both Objectors’ standing to object. See Id. at 30-37.
On December 6, this Court issued an Order Striking Objections for Failure to
Show Class Membership. (Doc. 684.) This Court ruled that Johnson had failed to
show that he was a potential Class member or had standing to object. Id. at 3. This
Court also ruled that Nedlouf had failed to show that he was a potential Class
member or had standing to object on behalf of his “deceased former spouse.” Id. at 4.
On the basis of these factual findings, the Court struck the objections “due to lack of
class membership” and found, in any event, that the objections lacked merit. Id.
D. Final Settlement Approval and Award of Attorneys’ Fees
On December 23, 2013, the Court issued its Amended Final Judgment
approving the settlement. (Doc. 694.) The Court found and concluded that the
Objectors’ objections were “without merit” and that the Objectors “lack standing to
object” for the reasons set forth in its previous order striking the objections. Id. at
¶ 10 (citing Doc. 684). Thus, the Court “overrule[d] the objections in all respects.”
Id. The Court stated further that the “settlement is, in all respects, fair, adequate and
reasonable to the Class.” Id. at ¶ 11.
On the same date, the Court issued its Order Granting Plaintiffs’ Motion for an
Award of Attorneys’ Fees and Reimbursement of Expenses. (Doc. 695.) Therein, this
Court found that the requested award of 25% of the cash and coupon components
was “fair, appropriate and reasonable.” Id. at 2. The Court reviewed at length the
reasons why the coupons were valuable and noted that “plaintiffs’ counsel will be
paid in the same coupons as the Class for the portion of the settlements attributable
to the coupons.” Id. at ¶ 5. The court found that the settlements with Korean Air and
Asiana “were reached following extensive, arm’s length negotiations between the
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 15 of 26 Page ID
#:9541
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 11
parties, and that the settlements were negotiated in good faith.” Id. at ¶ 7. Again, the
Court found that the objections were “without any merit” and that the Objectors
“lack standing to object.” Id. at ¶ 10.
E. Costs Resulting from Objectors’ Appeals
As set forth in the Westerman Declaration, Plaintiffs conservatively estimate
that Class Counsel will incur $762 in copying and binding costs for each appeal
pursued by an Objector. These costs are conservative because, as one example, they
do not include the costs of filing any motion for summary disposition and/or
sanctions, which is understated given the lack of merit of these appeals.
In addition, for each additional month the settlement funds remain open, the
court-appointed claims administrator incurs significant costs and expenses, including
such items as maintaining the post office box, staffing the call center with customer
services representatives available through a toll-free number, updating the website,
and responding to Class member inquiries (which increase as more time passes).
Based on the claims administrator’s experience to date in responding to class
member inquiries and its background in settlements of similar size and complexity,
additional incremental administrative costs caused by the delay will run
approximately $25,000 per month, amounting easily to over $290,000 total,
assuming even a year’s delay for the appeals to be heard. See Declaration of
Niemiec. These estimates might more realistically assume a 17-month delay because
non-prisoner civil appeals to the Ninth Circuit take an average of more than 17
months to be resolved. See Ex. A.5
III. ARGUMENT
A. Requiring an Appeal Bond is Appropriate
Rule 7 of the Federal Rules of Appellate Procedure provides that “[i]n a civil
case, the district court may require an appellant to file a bond or provide other
5 See also Dennings v. Clearwire Corp., 928 F.Supp.2d 1270, 1272 (W.D. Wash.
2013) (noting that the median length of a Ninth Circuit appeal is 17.4 months).
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 16 of 26 Page ID
#:9542
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 12
security in any form and amount necessary to ensure payment of costs on appeal.”
The determination of the amount of a bond imposed under Rule 7 is left to the
discretion of the district court. See Fed. R. App. P. 7, 1979 Advisory Committee
notes (“The amended rule would leave the question of the need for a bond for costs
and its amount in the discretion of the court.”).
In addition to the costs permitted under Rule 39 of the Federal Rules of
Appellate Procedure,6 it has been held that the administrative costs associated with
the delay in implementing a settlement are properly included in a Rule 7 bond
“because distribution of the settlement proceeds will be unnecessarily delayed until
the appeal is exhausted.” In re Broadcom Corp. Secs. Litig., Case No. 01-SACV-275
DT (MLGx), 2005 U.S. Dist. LEXIS 45656, at *9-10 (C.D. Cal. Dec. 5, 2005)
(imposing a Rule 7 bond that included $517,700 in administrative delay costs)
(internal quotation marks omitted).7 Courts within the Ninth Circuit have frequently
included such administrative delay costs in Rule 7 bonds. See In re Netflix Privacy
Litig., 2013 WL 6173772, at *4 (imposing a Rule 7 bond including $21,344 in
projected administrative delay costs including the cost of “maintaining and
administering the settlement website and toll-free phone number” and “answering
questions from class members”); Dennings, 928 F. Supp. 2d at 1272 (imposing Rule
7 bond amount including $39,150 associated with additional settlement
administration costs); Miletak v. Allstate Ins. Co., Case No. 06-C-03778 JW, 2012
WL 3686785, at *2 & n.5 (N.D. Cal. Aug. 27, 2012) (imposing a Rule 7 bond
6 See Fed. R. App. P. 39(e) (itemizing (1) the preparation and transmission of the
record; (2) the reporter’s transcript, if needed to determine the appeal; (3) premiums
paid for a supersedeas bond or other bond to preserve rights pending appeal; and (4)
the fee for filing the notice of appeal).
7 The costs do not include additional damages or attorneys’ fees unless allowed
under a fee-shifting statute. See In re Netflix Privacy Litig., Case No. 11-CV-00379,
2013 WL 6173772, at *4 (N.D. Cal. Nov. 25, 2013) (citing Azizian v. Federated
Dep’t Stores, Inc., 499 F.3d 950, 958-59 (9th Cir. 2007)).
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 17 of 26 Page ID
#:9543
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 13
including administrative costs “to continue to service and respond to class members’
needs pending the appeal”); In Re Wal-Mart Wage & Hour Empl. Practices Litig.,
Case No. 06-CV-00225 PMP-PAL, MDL 1735, 2010 U.S. Dist. LEXIS 21466, at
*18 (D. Nev. Mar. 8, 2010) (imposing a Rule 7 bond of $500,000 on each objector to
cover, inter alia, the “administrative costs” resulting from delay).
As set forth in the attached declaration of Robin M. Niemiec of Rust
Consulting, Inc., the court-appointed Claims Administrator, Objectors’ appeals will
cause the Class to incur several types of administrative costs associated with the
delay such as remaining in contact with Class members, sending notices to apprise
the Class of Objectors’ appeals and to keep them informed about the status of the
appeal, paying monthly fees for maintaining the settlement website, providing call
center representatives for phone support to answer inquiries and maintaining updated
contact information for all of the roughly 90,000 class members who have submitted
claims in the case while the appeal is pending. Those expenses are estimated to be
approximately $290,000, assuming one year’s delay.8
B. All of the Factors that the Ninth Circuit Requires this Court
to Consider Support the Imposition of a Bond
There is clear statutory basis for imposing the administrative delay costs at
issue here. A district court may include in a Rule 7 bond the administrative cost of
court-appointed experts pursuant to Rule 7 and 28 U.S.C. § 1920(6). Section 1920
provides that a “judge or clerk of any court of the United States may tax as costs the
following: . . . (6) Compensation of court appointed experts . . . .” And Rule 7
includes the “costs” contained in § 1920. See Nalder v. United Auto. Ins., 2:09-CV-
1348-ECR-GWF, 2011 WL 4905717 (D. Nev. Oct. 14, 2011) (noting that the Ninth
8 Each Objector should be jointly and severally liable for the full amount of the delay
costs as each is individually responsible for the delay, and thus each Rule 7 Bond
may include the full cost associated with the delay. See, e.g., In re Netflix Privacy
Litig., 2013 WL 6173772 at *4 (imposing full bond amount on each objector).
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 18 of 26 Page ID
#:9544
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 14
Circuit has held “that the costs enumerated in Rule 39 are among the costs available
on appeal but not necessarily the only costs allowable on appeal” and thus “the idea
of costs on appeal suggests that they would be limited to the sort of costs described
in Rule 39(c), 39(e), and 28 U.S.C. § 1920” and certain attorneys’ fees); In re
Countrywide Fin. Corp. Customer Data Sec. Breach Litig., 3:08-MD-01998, 2010
WL 5147222 (W.D. Ky. Dec. 13, 2010) (“The costs referenced by Rule 7 are
contained in 28 U.S.C. § 1920 and Federal Rule of Appellate Procedure 39.”); 20
MOORE’S FEDERAL PRACTICE § 307.10[2] (3d ed. 2003) (“The costs of appeal for
which the [Rule 7] bond ensures payment are those authorized by 28 U.S.C. § 1920
and Appellate Rule 39.”); 16A WRIGHT & MILLER, FEDERAL PRACTICE &
PROCEDURE § 3953 (4th ed. database updated April 2014) (“Costs on appeal for
which a Rule 7 bond can be required include the costs authorized in 28 U.S.C.
§ 1920 to the extent those costs relate to the appeal.”).
Here, plaintiffs have clearly identified the basis for their cost estimate and 28
U.S.C. § 1920(6) provides clear statutory basis for recovering the costs of court-
appointed experts in this case. See Doc. 608 ¶ 16 (“Rust Consulting, Inc. is hereby
appointed to be the Settlement Administrator” and subject to the Court’s
jurisdiction). Thus, this case is readily distinguishable from cases in which plaintiffs
provided no statutory basis for imposing certain costs.9
9 See Schulken v. Washington Mut. Bank, Case No. 09-CV-02708 LHK, 2013 WL
1345716, at *8-9 (N.D. Cal. Apr. 2, 2013) (declining to award administrative delay
costs in a Rule 7 appeal bond where plaintiff did not “concretely identify the basis
for their $10,000 estimate, nor clearly distinguish the projected costs from those that
could be claimed as attorney’s fees”); In re Toyota Motor Corp., 2013 WL 5775118,
at *2 (C.D. Cal. Oct. 21, 2013) (declining to award administrative cost delays
because class plaintiffs could not “identify any applicable fee-shifting statute” that
would entitled them to costs on appeal). Because the costs here are recoverable
under 28 U.S.C. § 1920(6), this case is also distinguishable from In re Magsafe,
where in a non-precedential memorandum, the Ninth Circuit held that the district
court erred in requiring an appeals bond “given that the only applicable fee-shifting
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 19 of 26 Page ID
#:9545
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 15
Rule 7 does not provide explicit guidance regarding the factors to be
considered in deciding whether the imposition of an appeal bond is appropriate.
However, in applying Ninth Circuit authority, district courts in this Circuit have
articulated three potentially relevant factors: (i) appellant’s financial ability to post a
bond; (ii) the risk that appellant would not pay the costs if the appeal loses; and (iii)
an assessment of the likelihood that appellant will lose the appeal and be subject to
costs. In re Netflix Privacy Litig., 2013 WL 6173772, at *3 (citing cases); Miletak,
2012 WL 3686785, at *1; see also Figure Eight Holdings, LLC v. Dr. Jays, Inc., 534
F. App’x 670, 670 (9th Cir. 2013) (relying on these three factors where the district
court relied on them and the parties did not dispute their use on appeal).
1. The burden is on the Objectors to prove they are unable to
post a bond, and there is no evidence that Objectors are
unable to do so.
In applying these factors, courts within the Ninth Circuit have found that
under the first factor, if the appellant does not submit financial information to
indicate that she is financially unable to post a bond, this weighs in favor of requiring
the bond. See, e.g., Schulken, 2013 WL 1345716, at *4; Embry v. ACER America
Corp., 2012 WL 2055030, at *1 (N.D. Cal. June 5, 2012) (“In the absence of
evidence that posting a bond will pose a substantial hardship, this factor weighs in
favor of requiring a bond.”); Fleury v. Richemont North America, Inc., Case No. 05-
C-4525 EMC, 2008 WL 4680033, at *7 (N.D. Cal. Oct. 21, 2008) (finding
insufficient appellant’s mere contention that she would be unable to pursue an appeal
if the court imposed a bond of $380,644.88).
Plaintiffs seek leave to take discovery from each objector to ascertain the
ability of each objector to post a bond, and satisfy the first factor of the test. As the
record now stands, there is no evidence either way regarding either Objector’s ability
statute” in that case was Rule 39. In re Magsafe Apple Power Adapter Litig., Case
No. 12-15757, -- Fed. Appx. --, 2014 WL 1624493, at *1 (9th Cir. Apr. 24, 2014).
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 20 of 26 Page ID
#:9546
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 16
to post a bond. Each of the Objectors is represented by counsel. Each of the
Objectors has paid the $505.00 docketing fee to take his appeal. See Gemelas v.
Dannon Co., Inc., Case No. 08-CV-236, 2010 WL 3703811, at *2 (N.D. Ohio Aug.
31, 2010) (finding it persuasive that objector “apparently has the funds to appeal
class action settlements”) (relied on by Schulken, 2013 WL 1345716, at *4). And
Objector Johnson’s failure to initially pay the filing and docketing fees provides
additional evidence that he, and Mr. Palmer, will shirk any responsibility to pay
costs. See Doc. 702.
2. There is a substantial risk, particularly with out-of-state
objectors, that Objectors will not pay the costs if their
appeals are unsuccessful.
In considering the second factor, courts have held that if the appellant resides
outside of the jurisdiction of the Ninth Circuit, this also “weighs in favor of requiring
a bond.” Embry, 2012 WL 2055030, at *1; Fleury, 2008 WL 46680033, at *7.
There is a substantial risk that Objectors will not pay the costs if their appeals
are unsuccessful. Ninth Circuit courts have recognized that collecting costs from out-
of-state appellants may be difficult, and all of the Objectors are out-of-state. (Doc.
635-1 at 2) (Nedlouf resides in Georgia); (Doc. 642) (Johnson resides in Dubai,
United Arab Emirates).10 Indeed, Johnson’s attorney, Mr. Palmer, has explicitly
indicated that neither he nor his client is inclined to comply with legal process. See
Ex. B (email from Mr. Palmer). As discussed supra, Johnson did not initially pay the
required appellate fees. Still further, as this Court has already articulated, “Mr.
Palmer has been found to be a serial objector sanctioned by courts for his conduct.”
Ex. C at 12 (citing cases). It seems evident that Mr. Palmer may not have fully
informed Johnson of the costs he may be liable to pay upon losing his appeal, and
that Johnson may then refuse to pay them.
10 See Schulken, 2013 WL 1345716, at *5; Embry, 2012 WL 2055030, at *1; Fleury,
2008 WL 46680033, at *7.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 21 of 26 Page ID
#:9547
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 17
3. There is a substantial likelihood that Objectors will lose
their appeals and be subject to costs.
Finally, as made clear in the discussion above, there is a substantial likelihood
that Objectors will lose their appeals and be subject to costs. Where the district court
has “carefully considered” objections and found them lacking merit, this factor
“weighs heavily in favor of requiring a bond.” Embry, 2012 WL 2055030, at *1; see
also Fleury, 2008 WL 46680033, at *8 & n.3 (concluding the same even where
appeal was in good faith and not frivolous); Miletak, 2012 WL 3686785, at *2
(imposing $60,000 appeal bond where court thoroughly considered objections and
found them to be meritless).
Here, this Court carefully considered every objection being appealed, and the
Court found them all meritless. See Doc. 684 at 4, Doc. 694 at ¶ 10; Doc. 695 at
¶ 10; see generally Doc. 679 (Ex. C). Moreover, this Court concluded that the
Objectors lack standing. See Doc. 684. The Court provided multiple opportunities to
the Objectors to present evidence of their standing and to substantiate their
objections. The Objectors did not—and could not—do so.
Particularly given this Court’s meticulous review of every aspect of the
settlement and each category of objection lodged to the settlement, and the discretion
that review will be afforded,11 the Ninth Circuit is likely to conclude that the
Objectors lack standing to take an appeal in the first place.12 Furthermore, given the
11 See, e.g., Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (“We
have repeatedly stated that the decision to approve or reject a settlement is
committed to the sound discretion of the trial judge because he is ‘exposed to the
litigants, and their strategies, positions and proof.’” (citation omitted)); see also id. at
1027 (“The district court’s final determination to approve the settlement should be
reversed ‘only upon a strong showing that the district court’s decision was a clear
abuse of discretion.’” (citation omitted)).
12 Plaintiffs have already briefed this issue in their motions to dismiss the Objectors’
appeals, and the Ninth Circuit has ordered that those arguments may be incorporated
into the merits briefing.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 22 of 26 Page ID
#:9548
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 18
Objectors’ dubious motives in filing their objections, it is likely that the Ninth
Circuit will see these Objectors as more concerned with exerting leverage for their
own benefit than attempting to improve any aspect of the settlement for the benefit
of the Class.13
C. Plaintiffs Seek Discovery of the Appealing Objectors
Plaintiffs seek discovery of the appealing Objectors. Plaintiffs have never had
an opportunity to pursue such discovery, and recent developments highlight why
such discovery is necessary. Plaintiffs seek to depose each Objector well before
Plaintiffs answering brief is filed on September 29, 2014.14
First, as discussed above, it is important that plaintiffs be able to build a record
as to the financial ability of each of the Objectors to post an appeal bond, which will
also aid in enforcing the bond after the Objectors lose their appeals.
Second, discovery will expose the Objectors’ motivations for appealing.15 It
appears entirely possible that Mr. Palmer may have misled his client-objector Mr.
Johnson. Recently, several of Palmer’s objector-clients have withdrawn their
13 Cf. Torrisi v. Tuscan Elec. Power Co., 8 F.3d 1370, 1378 (9th Cir. 1993)
(characterizing objectors as “spoilers” when only 20 of 113,000 class members
objected and only two appealed the settlement’s approval); Glanzman v. Uniroyal,
Inc., 892 F.2d 58, 61 (9th Cir. 1989) (imposing sanctions and recognizing, outside of
class action context that “parties may use the costs of defending meritless appeals to
coerce reductions in amounts properly awarded”).
14 The briefing schedule, which has already been extended, is as follows: Objectors
opening brief is due August 4, 2014; Plaintiffs answering brief is due September 29,
2014; and Objectors reply is due October 20, 2014. Ninth Cir. Case No. 14-55010,
Dkt. 20.
15 In cases where there is evidence of appellants’ bad faith or vexatious conduct,
courts will sometimes consider such evidence as an additional factor warranting
imposition of a bond. See, e.g., Dennings, 928 F. Supp. 2d at 1271; but see Fleury,
2008 WL 4680033, at *7 (N.D. Cal. Oct. 21, 2008) (concluding that the frivolity of
an appeal cannot be considered as a separate factor in the Ninth Circuit). Regardless
of whether this Court considers appellants’ bad faith or vexatious conduct as a
factor, Plaintiffs seek discovery.
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 23 of 26 Page ID
#:9549
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 19
objections and stated that Palmer lied to the court and misrepresented them. See In
re: Netflix Privacy Litig., (Ex. E) ¶ 10 (explaining supposed objector “never retained
Mr. Palmer” and Palmer fraudulently used her name to lodge an objection and appeal
its denial); In re Deepwater Horizon (Ex. I) at 14 (moving to dismiss own appeal
because “unbeknownst to [the objectors], Mr. Palmer made inaccurate
representations to the District Court” and the Fifth Circuit).
In response to plaintiffs’ motion to dismiss the Ninth Circuit appeal in this
case, Palmer recently produced new evidence for the first time. He filed a new
Johnson declaration, changing the language of the previous two declarations in a
failed attempt to demonstrate his Class membership. Ninth Circuit Case No. 14-
55010 Dkt. 14-2 (Ex. J). Yet, Johnson’s new declaration does not mention his
objection or appeal whatsoever, or indicate that he has any understanding at all of
how Palmer is purporting to represent him. In fact, contrary to the proceedings in this
Court, Johnson alleges that he merely submitted a claims form and has “not received
rejection of the claim or any request for additional information.” Id. at ¶ 4. His
declaration raises further doubts as to whether Johnson even knows he is objecting to
the settlement, rather than merely submitting a claim.
Similarly, Mr. Arter recently dismissed his sister’s objection to the In re Cobb
EMC class action settlement to avoid being deposed. See Exs. F, G, H. His actions
raise serious questions about his practice of lodging objections on behalf of close
family members and then avoiding scrutiny by the court and counsel to test their
viability. Moreover, he swore in his affidavit in that case that Nedlouf’s motivation
for objecting was personal animus directed toward Korean Air. Ex. F. (Arter
Affidavit ¶ 15, attached as Ex. 4 thereto).
These concerns collectively warrant discovery of objectors. See In re Netflix
Privacy Litig., 2013 WL 6173772, at *2 (“Discovery regarding objections to a
settlement agreement may be used to seek information regarding the objector’s
standing, the bases for the objections, his role in objecting to this and other class
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 24 of 26 Page ID
#:9550
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 20
settlements, and his relationships with the counsel that may affect the merits of the
objection.”); id. at *5 (simultaneously ordering discovery of objectors and imposing
an appeal bond on each of them); see also In re Cathode Ray Tube Antitrust Litig.,
281 F.R.D. 531, 532 (N.D.Cal. 2012).
IV. CONCLUSION
In order to ensure that Objectors can pay costs when the Ninth Circuit rejects
their appeals, plaintiffs respectfully request that this Court impose appeal bonds in
the amount of at least $290,000 against each of the Objectors. Plaintiffs also seek
discovery of the Objectors in further support of the record for appeal bonds.
///
///
///
///
///
///
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 25 of 26 Page ID
#:9551
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3228315v1/010438 21
Respectfully submitted,
DATED: June 30, 2014
SUSMAN GODFREY L.L.P.
MARC M. SELTZER
/s/ Marc M. Seltzer
Marc M. Seltzer
1901 Avenue of the Stars, Suite 950
Los Angeles, CA 90067
Tel: (310) 789-3100
Fax: (310) 789-3150
GLANCY BINKOW & GOLDBERG
LLP
SUSAN G. KUPFER
/s/ Susan G. Kupfer
Susan G. Kupfer
One Embarcadero Center, Suite 760
San Francisco, California 94111
Telephone: (415) 972-8160
Facsimile: (415) 972-8166
WESTERMAN LAW CORP.
JEFF S. WESTERMAN
/s/ Jeff S. Westerman
Jeff S. Westerman
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Tel: (310) 698-7450
Fax: (310) 201-9160
Plaintiffs’ Settlement Class Counsel
Case 2:07-cv-05107-SJO-AGR Document 716 Filed 06/30/14 Page 26 of 26 Page ID
#:9552
