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
Alan Harris (SBN 146079)
David Zelenski (SBN 231768)
HARRIS & RUBLE
6424 Santa Monica Boulevard
Los Angeles, California 90038
Telephone: (323) 962-3777
Facsimile: (323) 962-3004
aharris@harrisandruble.com
dzelenski@harrisandruble.com
Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
STEPHEN STETSON, SHANE
LAVIGNE, CHRISTINE LEIGH
BROWN-ROBERTS, VALENTIN YURI
KARPENKO, and JAKE JEREMIAH
FATHY, individually and on behalf of all
others similarly situated,
Plaintiffs,
v.
WEST PUBLISHING CORPORATION,
a Minnesota corporation dba BAR/BRI,
and KAPLAN, INC.,
Defendants.
Case No. CV-08-00810 R (Ex)
PLAINTIFFS’ RESPONSE TO
OBJECTIONS TO CLASS-ACTION
SETTLEMENT
Date: June 20, 2011
Time: 11:00 a.m.
Courtroom: 8
Assigned to Hon. Manuel L. Real
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 1 of 15 Page ID #:1538
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
ii
TABLE OF CONTENTS
I. Introduction ............................................................................................................... 1
II. The Objections Should Be Overruled ........................................................................ 2
A. Fewer than One Percent of the Class Has Objected to the
Settlement ........................................................................................................ 2
B. Objections Concerning Late-Submitted Claim Forms .................................... 3
C. The Objection Submitted by the “Center for Class Action
Fairness” Is the Same Pro Forma Objection Filed by the Center
in Opposition to Previous Class-Action Settlements ....................................... 4
D. The Center’s Objection Fails on the Merits .................................................... 6
III. Conclusion ............................................................................................................... 12
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 2 of 15 Page ID #:1539
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
iii
TABLE OF AUTHORITIES
Cases
DeBoer v. Mellon Mortgage Co.
64 F.3d 1171 (8th Cir. 1995) ........................................................................................ 11
Dukes v. Walmart Stores, Inc.
603 F.3d 571 (9th Cir. 2010) .................................................................................. 10, 11
Goldberg v. Kelly
397 U.S. 254 (1970) ...................................................................................................... 11
In re Mercury Interactive Corp. Secs. Litig.
618 F.3d 988 (9th Cir. 2010) ........................................................................................ 10
In re U.S. Bancorp Litig.
291 F.3d 1035 (8th Cir. 2002) ...................................................................................... 11
Pettway v. Am. Cast Iron Pipe Co.
576 F.2d 1157 (5th Cir. 1978) ........................................................................................ 3
Probe v. State Teachers’ Ret. Sys.
780 F.2d 776 (9th Cir. 1985) ........................................................................................ 10
Staton v. Boeing
327 F.3d 938 (9th Cir. 2003) .................................................................................... 9, 10
Wang v. Chinese Daily News, Inc.
623 F.3d 743 (9th Cir. 2010) ........................................................................................ 11
Statutes
28 U.S.C. § 1712 .......................................................................................................... 5, 6, 9
Rules
Fed. R. Civ. P. 23 ............................................................................................. 1, 4, 5, 10, 11
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 3 of 15 Page ID #:1540
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
1
I. Introduction.
The objections to the settlements with Defendants West Publishing Corporation
(“West”) and Kaplan, Inc. (“Kaplan”), as well as to the award of fees and costs to
Plaintiffs’ counsel, are without merit and should be overruled. Plaintiffs respectfully
reiterate their request that this Court grant final approval of the $5,285,000 cash
settlement with West and the valuable Discount Certificate settlement with Kaplan
(collectively, the two settlements are referred to hereinafter as the “Settlement”). As
explained in Plaintiffs’ May 31, 2011, moving papers, the Settlement meets the “fair,
reasonable, and adequate” standard of Federal Rule of Civil Procedure 23, and the
requested fees are supported by the loadstar crosscheck. Accordingly, the Settlement
should be granted final approval, payments should be mailed to participating Class
Members, the Discount Certificates should be activated, and the requested fees and costs
should be awarded.
Significantly, the Class consists not only of law-school graduates, but of hundreds
of law firms that paid for full-service bar-review courses on behalf of newly hired
associates. In this regard, it is striking that, of all the major law firms, not a single one
has filed an objection, whether to the West cash settlement or to the Kaplan Discount
Certificate settlement. (June 13, 2011, Decl. of Alan Harris in Supp. of Pls.’ Resp. to
Objections to Class-Action Settlement (“June 13, 2011, Harris Decl.”) ¶ 3.) The
participation by law firms in this Settlement is particularly significant, given that many
received hundreds of Discount Certificates, all of which will likely be redeemed at some
point in the future.1 (June 13, 2011, Harris Decl. ¶ 3.) This, in turn, benefits both the
1 If the Certificates were truly “worthless” or had a “negative value,” as claimed by
certain Objectors, it stands to reason that at least one firm would have objected to the
Discount Certificate portion of the Settlement. As it stands, however, no such objections
have been filed. (June 13, 2011, Harris Decl. ¶ 3.) Accordingly, the Court is left
principally with the objections advanced by the “Center for Class Action Fairness”—an
institution that, as explained below, has filed the substantially similar—if not identical,
save for some “tweaks”—objections in response to other class-wide settlements. (See
June 13, 2011, Req. for Judicial Notice in Supp. of Pls.’ Resp. to Objections to Class-
Action Settlement (“June 13, 2011, Req. for Judicial Notice”) Exs. 1–2.) These
objections, as also explained below, are without merit and should be denied.
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 4 of 15 Page ID #:1541
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
2
Class Member firms themselves and the full-service bar-review-course market as a
whole, as law firms will now have an obvious economic incentive to begin prospectively
purchasing Kaplan courses rather than those offered by West, fostering competition in an
industry that previously had none. Put differently, participating Class Member firms,
which have previously paid thousands of dollars for courses in the past, will be back in
the market for the indefinite future, again paying for thousands of dollars for additional
courses—this time to Kaplan, not West. The Settlement, in other words, encourages
exactly the kind of competitive behavior the antitrust laws were designed to protect. It
should therefore be approved.
II. The Objections Should Be Overruled.
A. Fewer than One Percent of the Class Has Objected to the Settlement.
As noted by West and Kaplan in their Memorandum in Support of Motion to
Approve Settlement and in Response to Objections,2 fewer than 1% of the Class has
objected to the Settlement.3 (June 13, 2011, West and Kaplan’s Mem. in Supp. of Mot. to
Approve Settlement and in Resp. to Objections at 12:25–18.) Again, this is particularly
striking, given that the Class consists of attorneys who are, no doubt, experienced with
making court filings. It is also particularly striking given the overwhelming Internet
effort made to mobilize objections to the Settlement. (See June 13, 2011, Harris Decl.
Exs. 1 (printout from the www.barbrisettlementobjection.com website seeking
individuals to join in objecting to the Settlement), 2 (printout from the “Center for Class
Action Fairness’ website encouraging Class Members to object to the Settlement).)
Compare, e.g., Pettway v. Am. Cast Iron Pipe Co., 576 F.2d 1157, 1216–17 (5th Cir.
2 Plaintiffs join in West and Kaplan’s arguments, and hereby incorporate them by
reference. (See generally June 13, 2011, West and Kaplan’s Mem. in Supp. of Mot. to
Approve Settlement and in Resp. to Objections.) In the interest of judicial economy,
Plaintiffs will not repeat the arguments made by West and Kaplan in their recent filing.
3 The total number of objecting Class Member is actually less than 0.15%. (See June
13, 2011, Harris Decl. ¶ 4.) Moreover, if the objections filed by the Center for Class
Action Fairness and by Jonathan Hutcheson are each counted only once (as thirty Class
Members joined in the objection filed by the Center for Class Action Fairness and as Mr.
Hutcheson purported to file his objection on behalf of 209 Class Members), the number
falls to approximately 0.03%. (June 13, 2011, Harris Decl. ¶ 4.)
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 5 of 15 Page ID #:1542
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
3
1978) (refusing to approve a settlement opposed by 70% of the settlement class and all of
the active named plaintiffs). This is an outstanding outcome that speaks volumes as to
the Settlement’s fairness, and it should therefore be approved so that participating Class
Members can begin to share in its benefits.
B. Objections Concerning Late-Submitted Claim Forms.
Plaintiffs have conferred with counsel for both West and Kaplan, and the parties
are in agreement that all Claim Forms submitted by Class Members prior to the final-
approval hearing should be processed for payment. (June 13, 2011, Harris Decl. ¶ 2.)
According to the Claims Administrator, approximately 46,440 Class Members have
submitted timely Claim Forms. (June 13, 2011, Harris Decl. ¶ 2.) To date,
approximately 1,355 late Claim Forms have also been submitted. (June 13, 2011, Harris
Decl. ¶ 2.) The parties respectfully request that any and all Claim Forms with postmarks
dated through June 19, 2011, be allowed.4 If all such Claim Forms are processed,
approximately 26% of the Class will have elected to participate—a response rate that
exceeds that in connection with this Court’s earlier approval of the settlement in
Rodriguez v. West Publishing Corp., C.D. Cal. Case No. CV 05-3222 R. (E.g., May 31,
2011, Decl. of Alan Harris in Supp. of Mots. for Final Approval of Class-Action
Settlement and Award of Att’ys Fees and Reimbursement of Costs (“May 31, 2011,
Harris Decl”) ¶ 14 (comparing the above-captioned Settlement with those in two earlier
cases concerning bar-review courses, including the settlement reached in Rodriguez).)
Plaintiffs submit that processing Claim Forms through June 19, 2011, moots those
objections contending that Class Members had insufficient time to opt into the action.
/ / / / /
4 The June 19, 2011, deadline has been chosen to shield against the potential “moral
hazard” that would result were Class Members permitted to submit Claim Forms after the
Court has had an opportunity to issue its final-approval order. In other words, the
deadline should be set for a date prior to the hearing to protect against the information
asymmetry that would arise were Class Members permitted to act knowing whether the
Settlement has actually been approved.
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 6 of 15 Page ID #:1543
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
4
C. The Objection Submitted by the “Center for Class Action Fairness” Is the
Same Pro Forma Objection Filed by the Center in Opposition to Previous
Class-Action Settlements.
A review of the objection filed by the Center for Class Action Fairness (“Center”)
reveals that it is, in fact, a slightly modified version of various objections that have
recently been filed in opposition to other class-wide settlements. (Compare May 24,
2011, Center’s Objection to Proposed Settlement (Center’s objection to the above-
captioned Settlement) with June 13, 2011, Req. for Judicial Notice Exs. 1 (Center’s
objection to Sobel v. Hertz Corp., D. Nev. Case No. 06-CV-00545 LRH-RAM), 2
(Center’s objection to McDonough v. Toy “R” Us, Inc., E.D. Pa Case No. 06-CV-00242-
AB).) In point of fact, Plaintiffs submit that the following portions of the Center’s
objection herein are substantially the same as—if not identical cut-and-pastes of—earlier
objections made by the Center in other, unrelated actions:
Objection to Stetson Objection to Sobel Objection to McDonough
1:26–3:22 (“Under Rule 23,
Preventing an Unfair
Settlement Is This Court’s
Duty”)
5:25–8:4 (“Under Rule 23,
Preventing an Unfair
Settlement Is This Court’s
Duty”)
3:23–28 (“This Coupon
Settlement Violates Federal
Law and Promotes Poor
Public Policy”)
8:6–14 (“This Coupon
Settlement Violates Federal
Law and Creates a Conflict
Between the Class
Attorneys and Their
Clients”)
4:1–5:9 (“This Settlement’s
‘Discount Certificates’ Are
Coupons”)
8:16–10:13 (“This
Settlement’s ‘Certificates’
Are Coupons”)
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 7 of 15 Page ID #:1544
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
5
Objection to Stetson Objection to Sobel Objection to McDonough
5:10–6:12, 7:12–22 (“As a
Matter of Policy, Coupon
Settlements Are Inherently
Problematic”)
10:15–13:21 (“As a Matter
of Policy, Coupon
Settlements Are Inherently
Problematic”)
8:7–9:28 (“As a Matter of
Law, This Coupon
Settlement’s Fee Request
Cannot Pass the Test of 28
U.S.C. § 1712”)
13:23–16:8 (“As a Matter
of Law, This Settlement’s
Fee Request Cannot Pass
the Test of 28 U.S.C.
§ 1712(a)”)
12:14–13:19 (“Class
Counsel Should Not
Collect a Commission on
Notice”)
4–8 (“Class Counsel
Should Not Collect a
Commission on Expenses
or Administration”)
13:20–14:27 (“Class
Counsel Should Not
Collect a Commission on
Settlement Administration
Expenses”)
4–8 (“Class Counsel
Should Not Collect a
Commission on Expenses
or Administration”)
19:20–21:21 (“The ‘Clear
Sailing’ Provisions Are
Deficient Under Rule
23(a)(4)”)
22:4–16:14 (“The ‘Clear
Sailing’ Provision Is
Deficient Under Rule
23(a)(4)”)
21:22–24:6 (“The Court
Should Discount Attempts
by the Settling Parties to
Infer Class Approval from
a Low Number of
26:16–29:21 (“The Court
Should Discount Attempts
by the Settling Parties to
Infer Class Approval from
a Low Number of
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 8 of 15 Page ID #:1545
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
6
Objection to Stetson Objection to Sobel Objection to McDonough
Objections”) Objections”)
The cookie-cutter nature of the Center’s objection should cast doubt not only the
merits therein, but on the underlying reason for the objection, which seems to be to attack
class actions in general. Indeed, as explained both in Plaintiffs’ final-approval papers and
in Kaplan’s June 13, 2011, filing, Kaplan now offers full-service bar-review courses in
most of the states—states that represent over 80% of the population. By agreeing to the
Discount Certificate settlement, Kaplan has undertaken to continue this now-successful
effort to become a real competitor, thereby changing the landscape of the market and
providing the law firms and individuals in the Class with what is, in effect, substantial
injunctive relief. Accordingly, the Center’s objection should be denied.
D. The Center’s Objection Fails on the Merits.
The perfunctory nature of the Center’s objection aside, it should also be overruled
on the merits. The Center’s implicit argument that Plaintiff’s counsel is attempting to
mislead the Court by claiming that the Discount Certificates are anything other than
coupons, subject to the requirements of 28 U.S.C. § 1712 (May 24, 2011, Center’s
Objection to Proposed Settlement 10:25–12:9), is immediately put to rest by review of
the relevant statute, which statute states that, “[i]f a proposed settlement in a class action
provides for a recovery of coupons to class members . . . any attorney’s fee award shall
be based upon the amount of time class counsel reasonably expended working on the
action.”5 28 U.S.C. § 1712(b) (emphasis supplied).
The undersigned shares the concerns of the Center that “coupon settlements are
inherently problematic.” (May 24, 2011, Center’s Objection at 12:10–11.) However, the
Center ignores the unusual circumstances of this case. Here, as noted both above and in
5 In an equally weak argument, the Center seems to admit that there is no authority for
computing the percentage award from the West Settlement on a number that excludes
costs and expenses incurred in connection with the case. (May 24, 2011, Center’s
Objection at 23:10–12 (stating that “this specific argument appears to be a question of
first impression.”).) This argument is addressed below.
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 9 of 15 Page ID #:1546
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
7
Kaplan’s June 13, 2011, filing, Kaplan is increasingly going into competition with West,
and the use of Certificates—especially those many thousands of Certificates awarded to
law-firm Class Members—will inevitably boost Kaplan’s competitive posture, with a
positive impact on both the quality and cost of bar-review courses.6 (May 31, 2011,
Decl. of Professor Dennis W. Rook in Supp. of Pls.’ Mot. for Final Approval of
Settlement (“May 31, 2011, Rook Decl.”) ¶ 17.) Indeed, anecdotal evidence concerning
law-firms Class Members that have asked their young attorneys to give them the Kaplan
coupons while permitting them to keep the West cash strengthens the claim that the use
of coupons in monopolization cases such as this has a great deal of merit. The Center’s
argument that, “in order to receive any direct benefit from the settlement, consumers
must once again do business with the same company which plaintiffs allege originally
overcharged them” (May 24, 2011, Center’s Objection at 13:5–7) reveals the Center’s
lack of analysis here, where Kaplan itself never overcharged anyone. Class Members,
after all, previously purchased from the monopolist West. The purpose of the coupons, in
large part, is to encourage Class Members (and others) to purchase from the new
entrant—Kaplan—helping to destroy the monopoly that gave rise to this case in the first
place.
The Center also incorrectly asserts that the “Kaplan settlement offers coupons of
an especially low value . . . because of the relatively minimal worth of additional
educational offerings from Kaplan to the [C]lass.” (May 24, 2011, Center’s Objection at
13:13–15.) Again, the Center ignores the reality of the law-firm Class Members that
6 Plaintiffs’ final-approval papers stated that “7,293 [Notice Packets] were addressed
to law firms that West indicated had paid for the full-service bar-review course.” (May
31, 2011, Decl. of Markham Sherwood re Mailing of Notice to Class of Proposed
Settlement of Class Action, Claim Form and Discount Certificates and Report on Reqs.
for Exclusion and Objections Received ¶ 4.) In hindsight, Plaintiffs’ counsel submits that
this statement from the Claims Administrator is ambiguous, as it could be interpreted to
mean that 7,293 separate law firms were provided Notice of the Settlement. Plaintiffs’
counsel has since conferred with the Claims Administrator, who has revealed that
approximately 455 separate institutions (e.g., law firms) received Notice of the
Settlement. (Harris Decl. ¶ 3.) In other words, 7,293 Notice Packets were mailed to a
total of 455 unique institutions, all of whom now have an incentive to use the Discount
Certificates enclosed with the Notice. Plaintiffs’ counsel apologizes for any ambiguity in
the earlier filing.
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 10 of 15 Page ID #:1547
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
8
have purchased bar-review courses in the past and that will do so, again, in the future. In
addition, the Center ignores the reality that the individual Class Members have a large
pool of spouses, relatives, friends, and neighbors to whom the coupons can be donated or
sold for use to prepare for the bar examination or a myriad other purposes. (May 31,
2011, Rook Decl. ¶ 11.) While it remains to be seen whether the Center is correct that
“these coupons are not worth anywhere near their face value” (May 24, 2011, Center’s
Objection at 15:6), the truth is that the face value is in excess of $37,000,000, not
counting the additional value of establishing a strong competitor in the marketplace.
Again, the ultimate value of the coupons need not approach the $37,000,000 face value
for this Court to approve the Settlement.
As to the total value of the Settlement, the Center states that “one can derive the
total value of the settlement fund by adding the value that the coupons actually provide to
the [C]lass to the cash that attorneys and named [P]laintiffs will receive.” (May 31, 2011,
Center’s Objection 16:13–15.) Here, the Settlement provides that Kaplan will provide
$450,000 for attorney’s fees and a total of $20,000 for five incentive awards of up to
$4,000 each. The total Kaplan cash is therefore $470,000. Accordingly, if this Court
finds that the coupons have a value of $1,330,000 or more, the requested award of
$450,000 will be justified on the traditional twenty-five-percent-of-recovery theory. As
established by the May 31, 2011, Rook Declaration, the coupon value is substantially in
excess of $1,330,000.7 (May 31, 2011, Rook Decl. ¶ 16.) Of course, the $659,316
lodestar is also greatly in excess of $450,000. (May 31, 2011, Harris Decl. ¶ 19.) This
case in not one in which “counsel are awarded large fees, while leaving the class
members with coupons or other awards of little or no value.” (May 24, 2011, Center’s
Objection at 17:19–20].) Indeed, the amounts are in line with two earlier lawsuits
involving BAR/BRI: the above-mentioned Rodriguez action (that was before this very
Court) and Park v. Thompson Corp., S.D.N.Y. Case No. 05 Civ. 2931 (WHP). (See May
7 The Center acknowledges this conclusion: “If the coupons could reasonably deliver
$1.35 million of value to the class . . . then a $450,000 fee award after redemptions would
arguably be reasonable.” (May 24, 2011, Center’s Objection at 18:25–28.)
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 11 of 15 Page ID #:1548
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
9
31, 2011, Harris Decl. ¶ 14 (describing the average recovery in both Rodriguez and
Park).)
Simply put, the Center’s argument that no fee award can be made on the Kaplan
Settlement until the coupons are actually redeemed is based on an incorrect reading of
CAFA. It is simply not true that the “calculation of attorney fees deriving from coupons
must be controlled by the value that their redemption brings to the class”—that “the Act
cannot be read to permit attorneys’ fees deriving solely from coupon awards to be based
on the amount of work class counsel has put into the settlement.” (May 24, 2011,
Center’s Objection at 18:5–11 (emphasis supplied).) Again, the statute expressly
provides that a coupon settlement may, as here, provide for a fee award “based upon the
amount of time class counsel reasonably expended working on the action” and that
“[n]othing in this subsection shall be construed to prohibit application of a lodestar with a
multiplier method of determining attorney’s fees.” 28 U.S.C. § 1712(b). Indeed, this
construction is explicitly acknowledged in the federal practice guide: “Where the
attorney’s fee is not determined by a percentage of coupons . . . [t]he fee shall be based
on time reasonably expended . . . [a]n appropriate lodestar with a multiplier may be
applied in determining the fee award.” William W. Schwarzer, et al., California Practice
Guide: Federal Civil Procedure Before Trial ¶ 10:888.10 (The Rutter Group 2011).
The Center similarly misleads the Court with respect to its discussion concerning
the exclusion of costs from the percentage recovery. In this regard, the Center itself
admits that there is no authority for computing the percentage on a number that excludes
costs and expenses incurred in connection with the case. (May 24, 2011, Center’s
Objection at 23:10–12.) In this case—in which every penny of the $5,285,000 is going to
the benefit of the Class—the Center’s “first impression” issue is hardly worthy of
consideration, particularly since Class Counsel’s out-of-pocket expenses are less than
$45,000 (i.e., less than one percent of the West settlement fund) and the Center has
utterly misrepresented the holding of Staton v. Boeing 327 F.3d 938 (9th Cir. 2003). In
Staton, the problem, simply, was that there were two notices, which the Ninth Circuit
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 12 of 15 Page ID #:1549
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
10
deemed “excessive” while simultaneously holding that standard notice was a “justifiable
cost” paid by the defendant—a benefit to the class that should be considered in
calculating attorney’s fees. See Staton, 327 F.3d at 974–75.
Finally, contrary to the Center’s contention, Class Counsel has not “induced” the
Court to violate In re Mercury Interactive Corp. Securities Litigation, 618 F.3d 988 (9th
Cir. 2010) (hereinafter, “In re Mercury”). The recent case of In re Lifelock, Inc., 2010
U.S. Dist. LEXIS 102612 (D. Ariz. Aug. 31, 2010), expressly excludes class actions
certified under Federal Rule of Civil Procedure 23(b)(2) from the new In re Mercury
standard (as opposed to cases certified under Rule 23(b)(3), like In re Mercury). In the
above-captioned matter, the Preliminary Approval Order states that, “pursuant to Rule 23
of the Federal Rules of Civil Procedure, the following Class is conditionally certified”
(Mar. 21, 2011, Preliminary Approval Order ¶ 4). The Court nowhere stated that it was
certifying the matter exclusively under subsection (b)(3). As in Lifelock, “certification
pursuant to Rule 23(b)(2) is appropriate herein because the Class Members’ claims for
injunctive relief predominate over their damage requests.” In re Lifelock, Inc., 2010 U.S.
Dist. LEXIS 102612 at *12–13 (citing Dukes v. Walmart Stores, Inc., 603 F.3d 571, 617
(9th Cir. 2010)).
The Ninth Circuit has recognized that “class actions certified under Rule 23(b)(2)
are not limited to actions requesting only injunctive or declaratory relief, but may include
cases that also seek monetary damages.” Probe v. State Teachers’ Ret. Sys., 780 F.2d
776, 780 (9th Cir. 1985). More recently, the Ninth Circuit has recognized that, so long as
claims for damages in a putative class action do not “predominate” over claims for
injunctive relief, the action can and should be certified under Rule 23(b)(2) regardless of
what the plaintiff’s subjective intent was in bringing the lawsuit. Dukes, 603 F.3d at
615–17. The Ninth Circuit has also rejected the requirement in other circuits that
requests for monetary damages be merely “incidental” to the injunctive relief. Id.
Instead of focusing on a plaintiff’s subjective-intent or whether the class-wide
monetary claims are incidental to the demand for injunctive relief, the “predominance”
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 13 of 15 Page ID #:1550
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
11
test looks at “the objective ‘effect of the relief’ sought.” Id. at 617. In applying the
Dukes test, the Ninth Circuit recently noted that a “‘[d]efendant’s future compliance with
the law may be more valuable to the class than the present claims for [damages].’” Wang
v. Chinese Daily News, Inc., 623 F.3d 743, 754 (9th Cir. 2010).
Here, again, Plaintiffs’ counsel’s dogged pursuit of justice eventually caused
Kaplan to create its own bar-review course in competition with former co-conspirator
West, and then Plaintiffs’ counsel’s close scrutiny motivated Kaplan to quickly expand
its bar-review offering from three initial states to—as of the date of this Motion—the
twenty-six most-populous states. In light of the foregoing, as applied to the facts of the
present case, the Court can find that, objectively, the present case’s injunctive effects do
indeed predominate over the monetary relief. Accordingly, the present case is governed
by Rule 23(b)(2), and In re Mercury is inapplicable.
In any event, any concerns stemming from In re Mercury have, effectively, been
mooted by the fact that the Center has now come forward and objected on behalf of all
Class Members concerning the amount of fees requested by Plaintiffs’ counsel. In other
words, the crux of the Center’s In re Mercury objection is that Class Members’ due-
process rights were violated because they were not afforded an adequate opportunity to
review and—presumably—object to the Settlement’s attorney-fee provision. But the
Center has come to their rescue in this respect and objected on their behalf, thereby
rectifying this dilemma. See In re U.S. Bancorp Litig., 291 F.3d 1035 (8th Cir. 2002)
(“We find due process was satisfied. All objectors had an opportunity to be heard at the
settlement hearing, and the intervenors raised their objections to the fee amount both at
the hearing and in writing. See Goldberg v. Kelly, 397 U.S. 254, 267 [] (1970)
(fundamental requisite of due process of law is opportunity to be heard); DeBoer v.
Mellon Mortgage Co., 64 F.3d 1171, 1176 (8th Cir. 1995) [] (due process satisfied where
class members received notice of settlement proposal and were able to argue their
objections to district court), cert. denied, 517 U.S. 1156, [] (1996).”). Because any
objections to the amount of fees has now been heard, the Center’s concerns have
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 14 of 15 Page ID #:1551
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
PLS.’ RESP. TO OBJECTIONS TO CLASS-ACTION SETTLEMENT
12
necessarily been alleviated.
III. Conclusion.
For the foregoing reasons, the Court should conclude that the Settlement is fair,
reasonable, and adequate; it should overrule all submitted objections; it should approve
the Settlement in its entirety; and it should grant the requested fees and expenses.
DATED: June 13, 2011 HARRIS & RUBLE
PERRIN F. DISNER
/s/
Alan Harris
David Zelenski
Perrin F. Disner
Attorneys for Plaintiffs
Case 2:08-cv-00810-R -E Document 91 Filed 06/13/11 Page 15 of 15 Page ID #:1552
