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Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406 Court-Appointed Class Counsel [Additional Class Counsel Listed on Signature Page.]
UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated,
Plaintiffs,
v.
CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,
Defendant.
Civ. Act. No. 06-2163 (JLL) Honorable José L. Linares MOTION FOR ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND Hearing Date: March 30, 2015 Hearing Time: 10:00 a.m. ORAL ARGUMENT REQUESTED
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TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that, on March 30, 2015 at 10:00 a.m., or as
soon thereafter as counsel may be heard, before the Honorable José L. Linares,
U.S.D.J., at the Martin Luther King, Jr. Federal Building and Courthouse, 50
Walnut Street, Newark, New Jersey, plaintiffs Ralph Demmick and Donald
Barth (together, “Plaintiffs”) shall move this Court for an Order Approving the
Plan of Allocation and Distribution of the Settlement Fund in this action.
PLEASE TAKE FURTHER NOTICE that, in support of their motion,
Plaintiffs will rely upon the Memorandum of Law submitted herewith and the
Declaration of J. Paul Gignac.
Dated: January 23, 2015 HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP
By s/ Stephen L. Dreyfuss, Esq. Stephen L. Dreyfuss, Esq. Matthew M. Moloshok, Esq.
One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020
Facsimile: (973) 621-7406
FOLEY BEZEK BEHLE & CURTIS, LLP Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072
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ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401
Court-Appointed Class Counsel
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Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406 Court-Appointed Class Counsel [Additional Class Counsel Listed on Signature Page.]
UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated,
Plaintiffs,
v.
CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,
Defendant.
Civ. Act. No. 06-2163 (JLL) Honorable José L. Linares MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND Hearing Date: March 30, 2015 Hearing Time: 10:00 a.m.
Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406
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Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) FOLEY BEZEK BEHLE & CURTIS, LLP 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072 J. Paul Gignac, Esq. (admitted pro hac vice) ARIAS OZZELLO & GIGNAC LLP 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401 Court-Appointed Class Counsel
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TABLE OF CONTENTS Page
I. INTRODUCTION ...........................................................................................1
II. LEGAL STANDARDS ...................................................................................1
A. Separate Approval Of The Plan Of Allocation Is Permitted.................1
B. The Plan Of Allocation Must Be Fair, Reasonable And Adequate................................................................................................3
III. THE PLAN OF ALLOCATION .....................................................................5
A. Calculation Of The Net Settlement Fund..............................................5
B. Calculation Of The FSP Settlement Class Cash Sub Fund And The In-Network Settlement Class Cash Sub Fund................................6
C. Distribution Of The FSP Settlement Class Cash Sub Fund..................7
D. Distribution Of The In-Network Settlement Class Cash Sub Fund.......................................................................................................8
E. Allocation And Distribution Of The Calling Units Component ...........9
F. Disposition Of Returned And/Or Uncashed Settlement Class Member Checks...................................................................................10
G. Disposition Of Returned And/Or Undistributed Calling Unit PINs .....................................................................................................11
IV. THE PLAN OF ALLOCATION IS FAIR, REASONABLE AND ADEQUATE..................................................................................................11
A. Every Eligible Settlement Class Member Will Receive The Same Amount Of Cash........................................................................11
B. Every Eligible In-Network Settlement Class Member Will Also Receive The Same Amount Of Calling Units .....................................12
C. There Is No Cy Pres Component To The Plan of Allocation .............13
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D. The Distribution Of Any Uncashed Or Undeliverable Settlement Benefits Will Be Determined By The Court.....................14
V. CONCLUSION..............................................................................................15
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TABLE OF AUTHORITIES
Page(s) Aetna Inc. Sec. Litig.,
2001 WL 20928 (E.D. Pa. Jan. 4, 2001)…………………………………….4
In re Baby Products Antitrust Litigation, 708 F.3d 163 (3rd Cir. 2013)………………………………………………..14 In re Agent Orange Product Liability Litigation MDL No.381, 818 F.2d 145 (2d Cir. 1987)……….............................................................2,3
In re Cedant Corp. Litig., 264 F.3d 201 (3d Cir. 2001)………………………………………………....3
In re Computron Software, Inc., 6 F.Supp.2d 313 (D.N.J. 1998)…..……...………………………………….3 In re Corel Corp. Inc. Sec. Litig., 293 F.Supp.2d 484 (E.D. Pa. 2003) …………….…………………………4 In re Datatec Sys., Inc. Sec. Litig., 2007 WL 4225828 (D.N.J. Nov. 28, 2007)…………………………………3 In re Ikon Office Solutions, Inc., Sec. Litig., 194 F.R.D. 166 (E.D. Pa. 2000)…….………………………………………4 In re NASDAQ Market-Makers Antitrust Litig. 187 F.R.D. 465 (S.D.N.Y. 1998)……….……………………………………2 In re Par Pharm. Sec. Litig., 2013 WL 3930091 (D.N.J. July 29, 2013)………………………………...4,5 In re The Mills Corp. Sec. Litig., 265 F.R.D. 246 (E.D. Va. 2009)……..……………………………………...4 McCoy v. Health Net, Inc., 569 F.Supp.2d 448 (D.N.J. 2008)…………………………………………...2
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Walsh v. Great Alt. & Pac. Tea Co., 726 F.2d 956 (3d Cir. 1983)………………………………………………....4 References McLaughlin on Class Actions § 14.03 (11th ed.) ……………………….………....2
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I. INTRODUCTION
In accordance with the parties’ Stipulation and Settlement Agreement
(“SAS”), Plaintiffs Ralph Demmick and Donald Barth (together, “Plaintiffs”), by
their counsel and in their capacities as the Court-certified class representatives in
this action, move this Court for an Order Approving Plan of Allocation and
Distribution of the Settlement Fund in this action.
For the reasons explained herein, Plaintiffs submit that the Plan of
Allocation and Distribution of the Settlement Fund proposed by Class Counsel
(“Plan of Allocation”) is fair, reasonable and adequate and, therefore, merits this
Court’s approval. Accordingly, the Court should grant Plaintiffs’ motion and enter
the Order Approving Plan of Allocation and Distribution of the Settlement Fund
(“Allocation Order”), which has been submitted for the Court’s consideration.
II. LEGAL STANDARDS
A. Separate Approval Of The Plan Of Allocation Is Permitted.
In addition to approving the consideration obtained for the class members in
a common-fund settlement, the court must also approve the allocation of that
consideration among the settlement class members, the class representatives, and
class counsel. “Because court approval of a settlement as fair, reasonable and
adequate is conceptually distinct from the approval of a proposed plan of
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allocation . . . courts frequently approve them separately.” 2 McLaughlin on Class
Actions § 6:23 (11th ed.).
It is “appropriate, and often prudent,” in large class actions for the approval
of the settlement amount to be handled separately from the approval of the plan of
allocation. In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 480
(S.D.N.Y. 1998) (granting final approval to a class-action settlement fund for a
class of “over 1.0 million members” separately from the plan of allocation); see
also McCoy v. Health Net, Inc., 569 F.Supp.2d 448, 469 (D.N.J. 2008)
(considering plan of allocation separately where the parties “separated the Court’s
assessment of the Plan of Allocation and the Agreement to provide the Court with
the option to approve the Agreement even if the Court finds that the Plan of
Allocation needs to be modified”). The court’s “prime function” in approving a
class action settlement is “to determine that the amount paid is commensurate with
the value of the case,” and that “can be done before a distribution scheme has been
adopted so long as the distribution scheme does not affect the obligations of the
defendants under the settlement agreement.” In re Agent Orange Product Liability
Litigation MDL No. 381, 818 F.2d 145, 170 (2d Cir. 1987).
In this case, Plaintiffs request that the Court consider the reasonableness of
the Plan of Allocation as reflected in the proposed Allocation Order separately
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from the fairness and adequacy of the Settlement, which is the subject of
Plaintiffs’ Motion for Orders: (1) Granting Final Approval to Proposed Settlement;
and (2) Entering Final Judgment. Separate consideration of the Settlement and the
Plan of Allocation will simplify the process of concluding this case by separating
the adequacy of the negotiated settlement consideration from the details of
distributing that consideration to millions of Settlement Class Members. See Agent
Orange, 818 F.2d at 170. The “distribution scheme does not affect the obligations
of the defendant[],” Verizon Wireless, which has already paid the cash portion of
the Settlement Fund to the Settlement Administrator and will have only a limited
administrative role in applying some of the cash due to its current customers as
credits on bills, in the amounts and according to the directions specified by the
Settlement Administrator.
B. The Plan Of Allocation Must Be Fair, Reasonable And Adequate.
“Approval of a plan of allocation of a settlement fund in a class action is
‘governed by the same standards of review applicable to approval of the settlement
as a whole: the distribution plan must be fair, reasonable and adequate.’” In re
Computron Software, Inc., 6 F.Supp.2d 313, 321 (D.N.J. 1998) (citations omitted);
In re Datatec Sys., Inc. Sec. Litig., 2007 WL 4225828, *3 (D.N.J. Nov. 28, 2007).
See also, In re Cendant Corp. Litig., 264 F.3d 201, 248 (3d Cir. 2001). Courts
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“generally consider plans of allocation that reimburse class members based on the
type and extent of their injuries to be reasonable.” Aetna Inc. Sec. Litig., 2001 WL
20928, at *12 (E.D. Pa. Jan. 4, 2001), citing In re Ikon Office Solutions, Inc., Sec.
Litig., 194 F.R.D. 166, 194 (E.D. Pa. 2000). See, e.g., In re Corel Corp. Inc. Sec.
Litig., 293 F.Supp.2d 484, 493 (E.D. Pa. 2003) (approving plan of allocation that
“provides that each authorized claimant receive, on a pro rata basis, that share of
the net settlement fund that the claimant’s recognized claim bears to the total
recognized claims of all authorized claimants in accordance with the formula
[proposed by Class Counsel]”) and In re Par Pharm. Sec. Litig., 2013 WL
3930091, at *8 (D.N.J. July 29, 2013) (approving plan of allocation that “provides
for the distribution of the Net Settlement Funds on a pro rata basis based on a
formula tied to liability and damages”).
In the final analysis, “[t]he court’s principal obligation is simply to ensure
that the fund distribution is fair and reasonable as to all participants in the fund.”
Walsh v. Great Alt. & Pac. Tea Co., 726 F.2d 956, 964 (3d Cir.1983). Moreover,
“[t]he proposed allocation need not meet the standards of scientific precision, and
given that qualified counsel endorses the proposed allocation, the allocation need
only have a reasonable and rational basis.” In re The Mills Corp. Sec. Litig., 265
F.R.D. 246, 268 (E.D. Va. 2009). Therefore, where the plan of allocation is
recommended by Class Counsel and no class member has objected to it, the Court
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should find that the balance of factors weighs in favor of approving the plan of
allocation. See, e.g., In re Par Pharm., at *23 (finding that “the balance of factors
weighs in favor of approving the Plan of Allocation” where “[i]t is fully
recommended by Lead Counsel, and, although notice was sent to over 84,572
potential class members, no member has objected to it.”)
III. THE PLAN OF ALLOCATION
A. Calculation Of The Net Settlement Fund
The Settlement in this action establishes a $64.2 million common fund
(“Settlement Fund”) that is comprised of two components: a cash component and a
calling units component. (Gignac Decl., ¶ 4.) The “Cash Component” of the
Settlement Fund consists of the $36.7 million in cash that has already been
transferred by Verizon Wireless to the court-appointed Settlement Administrator
and deposited into an interest-earning account, together with all interest earned
thereon until the date on which checks and/or PINs are mailed to Settlement Class
Members (the “Date of Distribution”). (Gignac Decl., ¶ 5.) The “Calling Units
Component” of the Settlement Fund consists of 275 million total calling units,
valued at $27.5 million based upon a conversion ratio of 10 cents per unit. (Gignac
Decl., ¶ 6.)
Under the proposed Plan of Allocation, the Settlement Administrator will
first deduct from the Settlement Fund the costs of notice and settlement
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administration, court-approved attorneys’ fees and expenses, and incentive awards
to the Class Representatives. (Allocation Order, ¶ 10.) The balance of the cash
remaining in the Settlement Fund after these deductions (“Remaining Cash
Component”), together with the Calling Units Component, will constitute the “Net
Settlement Fund”. (Gignac Decl., ¶ 7.)
B. Calculation Of The FSP Settlement Class Cash Sub Fund And The In-Network Settlement Class Cash Sub Fund
After April 29, 2015, which is the deadline for Settlement Class Members to
submit claims, the Settlement Administrator will determine: (i) the total number of
FSP Settlement Class Members who are eligible to receive benefits from the Net
Settlement Fund; (ii) the total number of In-Network Settlement Class Members
who are eligible to receive benefits from the Net Settlement Fund; and (iii) the
total number of FSP Settlement Class Members and In-Network Class Members
combined who are eligible to receive benefits from the Net Settlement Fund
(“Total Eligible Settlement Class Members”). (Allocation Order, ¶ 11.a.)
Settlement Class Members “eligible to receive benefits” are: (a) the
1,800,836 FSP Settlement Class Members and 401,123 In-Network Settlement
Class Members who are on the Class List provided by Verizon Wireless pursuant
to the Settlement Agreement; and (b) those current or former Verizon Wireless
customers who file timely claims pursuant to the Court’s Preliminary Approval
Order (in each case, provided that the eligible Settlement Class Member did not
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submit a timely and valid Request for Exclusion). Because there will be some
number of Settlement Class Members who are members of both the FSP
Settlement Class and the In-Network Settlement Class, those Settlement Class
Members will be counted twice in this determination and will receive two pro rata
shares of the settlement benefits that are distributed.
The Settlement Administrator will calculate the portion of the Remaining
Cash Component to be allocated to the FSP Settlement Class (“FSP Settlement
Class Cash Sub Fund”) as well as the portion of the Remaining Cash Component
to be allocated to the In-Network Settlement Class (“In-Network Settlement Class
Cash Sub Fund”) by multiplying the Remaining Cash Component by the respective
percentages of the Total Eligible Settlement Class Members represented by the
FSP Settlement Class and the In-Network Settlement Class. (Allocation Order, ¶
11.b. and c.)
C. Distribution Of The FSP Settlement Class Cash Sub Fund
The Settlement Administrator will divide the FSP Settlement Class Cash
Sub Fund by the total number of eligible FSP Settlement Class Members to yield
the “FSP Settlement Class Member Cash Benefit Amount”, which shall be the
same dollar amount for each eligible member of the FSP Settlement Class.
(Allocation Order, ¶ 12.a.) For all eligible FSP Settlement Class Members who are
“Distribution Customers” as defined in the Settlement Agreement, the FSP
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Settlement Class Member Cash Benefit Amount will be distributed to each such
eligible FSP Settlement Class Member by Verizon Wireless, by means of a bill
credit. (Allocation Order, ¶ 12.b.) Verizon Wireless will apply the bill credits in
the amounts and according to the instructions that will be provided to it by the
Settlement Administrator. (SAS, Art. IV, ¶ 3.) For all eligible FSP Settlement
Class Members who are not Distribution Customers, the FSP Settlement Class
Member Cash Benefit Amount will be distributed to each eligible FSP Settlement
Class Member by the Settlement Administrator, by means of a check mailed to the
last known mailing address of each such eligible FSP Settlement Class Member.
(Allocation Order, ¶ 12.c.)
D. Distribution Of The In-Network Settlement Class Cash Sub Fund
The Settlement Administrator will divide the In-Network Settlement Class
Cash Sub Fund by the total number of eligible In-Network Settlement Class
Members to yield the “In-Network Settlement Class Member Cash Benefit
Amount”, which will be the same dollar amount for each eligible member of the
In-Network Settlement Class. (Allocation Order, ¶ 13.a.) For all eligible In-
Network Settlement Class Members who are Distribution Customers, the In-
Network Settlement Class Member Cash Benefit Amount will be distributed to
each such eligible In-Network Settlement Class Member by Verizon Wireless, by
means of a bill credit. (Allocation Order, ¶ 13.b.) Verizon Wireless will apply the
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bill credits in the amounts and according to the instructions that will be provided to
it by the Settlement Administrator. (SAS, Art. IV, ¶ 3.) For all eligible In-
Network Settlement Class Members who are not Distribution Customers, the In-
Network Settlement Class Member Cash Benefit Amount will be distributed to
each such eligible In-Network Settlement Class Member by the Settlement
Administrator, by means of a check mailed to the last known mailing address of
each such eligible In-Network Settlement Class Member. (Allocation Order, ¶
13.c.)
E. Allocation And Distribution Of The Calling Units Component
Under the proposed Plan of Allocation and Distribution, all $27.5 million of
the Calling Units Component will be allocated to the In-Network Settlement Class.
(Allocation Order, ¶ 11.d.)
The Settlement Administrator will determine the total number of In-Network
Settlement Class Members eligible to receive calling units, defined as (i) those who
are on the Class List provided by Verizon Wireless; and (ii) those who file timely
claims (in each case, provided that the eligible Settlement Class Member did not
submit a timely and valid Request for Exclusion). (Allocation Order, ¶ 14.a.) The
Settlement Administrator will then divide the 275 million calling units in the
Calling Units Component by the total number of eligible In-Network Settlement
Class Members to yield the “In-Network Settlement Class Member Calling Unit
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Amount”, which shall be the same number of calling units for each eligible
member of the In-Network Settlement Class and which shall be rounded down to
the nearest calling unit. (Allocation Order, ¶ 14.b.)
The calling units will be distributed to In-Network Settlement Class
Members in two different ways. First, each eligible In-Network Settlement Class
Member on the Email List as defined in the Settlement Agreement will receive the
In-Network Settlement Class Member Calling Unit Amount by means of an email
that conveys: (1) the PIN number needed to access the calling units; (2) how to
access and use the calling units; and (3) the terms and conditions applicable to the
use of the calling units. (Allocation Order, ¶ 14.c.) Second, each eligible In-
Network Settlement Class Member not on the Email List will receive the In-
Network Settlement Class Member Calling Unit Amount by means of a sealed
postcard mailing that conveys the same information. (Allocation Order, ¶ 14.d.)
F. Disposition Of Returned And/Or Uncashed Settlement Class Member Checks
Any check issued to a Settlement Class Member that is returned to the
Settlement Administrator as undeliverable or that is not cashed by the Settlement
Class Member within ninety days of the Date of Distribution will be deemed to
have been forfeited by the Settlement Class Member. (Allocation Order, ¶ 16.)
The Court will determine the manner in which any undeliverable or uncashed
checks should be distributed. (Allocation Order, ¶ 20.)
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G. Disposition Of Returned And/Or Undistributed Calling Unit PINs
Any calling unit PINs sent to Settlement Class Members by email as to
which the Settlement Administrator receives “send failure,” “bounce-back,” or
other similar email failure notices shall be resent to those Settlement Class
Members by mail. (Allocation Order, ¶17.) Any calling unit PINs sent to
Settlement Class Members by mail that are returned to the Settlement
Administrator as “undeliverable” shall be deemed to have been forfeited by those
Settlement Class Members. (Id.) The Court will determine the manner in which
any undeliverable calling unit PINs, or calling unit PINs remaining as a result of
the rounding down procedure described in Section III.E. above, should be
distributed. (Allocation Order, ¶ 20.)
IV. THE PLAN OF ALLOCATION IS FAIR, REASONABLE AND ADEQUATE
Class Counsel submit that the Plan of Allocation is fair, reasonable and
adequate for each of the reasons set forth below. (Gignac Decl., ¶ 15.)
A. Every Eligible Settlement Class Member Will Receive The Same Amount Of Cash
Under the Plan of Allocation, the Cash Component of the Net Settlement
Fund will be allocated and distributed so that every eligible Settlement Class
Member (meaning every member of the FSP Settlement Class and every member
of the In-Network Settlement Class) will receive an equal pro rata share of the
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Cash Component. (Gignac Decl., ¶ 8.) Settlement Class Members who are in both
the FSP Settlement Class and the In-Network Settlement Class will receive two pro
rata shares. (Id.)
B. Every Eligible In-Network Settlement Class Member Will Also Receive The Same Amount Of Calling Units
Under the Plan of Allocation, the Calling Units Component of the Net
Settlement Fund will be allocated and distributed so that every eligible member of
the In-Network Settlement Class will receive an equal pro rata share of the Calling
Units Component. (Gignac Decl., ¶ 9.)
The reason that the Calling Units Component is being distributed solely to
the eligible members of the In-Network Settlement Class (and not to the eligible
members of the FSP Settlement Class) is three-fold. (Gignac Decl., ¶ 10.)
First, the In-Network Settlement Class members’ claims arise out of Verizon
Wireless’ practice of charging them for minutes that should have been free. Thus,
In-Network Settlement Class members lost the use of minutes. Allocating the
Calling Units Component to the In-Network Settlement Class members serves to
restore those lost minutes to them so that they can use them. (Gignac Decl., ¶ 11.)
Second, Class Counsel consider the claims of the In-Network Settlement
Class members to be stronger than the claims of the FSP Settlement Class
members because Verizon Wireless has acknowledged that it was improper to
charge the In-Network Settlement Class members for “in-family” and “in-network”
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calls that were supposed to be free. In fact, Verizon Wireless voluntarily initiated
a program for the purpose of providing credits to In-Network Settlement Class
members who were charged for calls that should have been free. By contrast,
Verizon Wireless has always asserted that the FSP Settlement Class members’
claims have no merit and that the FSP Settlement Class members are not entitled to
any damages. (Gignac Decl., ¶ 12.) The strength of the In-Network Settlement
Class Members’ claims justifies allocating additional consideration to those
Settlement Class Members as compared to the FSP Settlement Class Members.
Third, the average damages, as estimated by NERA in its November 11,
2013 amended report, of the In-Network Settlement Class members ($104.39) are
significantly higher than the average damages of the FSP Settlement Class
members ($17.48) (Gignac Decl., ¶ 13), which again justifies the allocation of
additional consideration to the In-Network Settlement Class Members.
C. There Is No Cy Pres Component To The Plan of Allocation
The Third Circuit has recently expressed skepticism as to the value of cy
pres in certain class action settlements. See, In re Baby Products Antitrust
Litigation, 708 F.3d 163 (3rd Cir. 2013). There can be no such concern with the
Plan of Allocation in this case because it does not have a cy pres component. The
entirety of the Net Settlement Fund is intended to be distributed directly to the
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Settlement Class Members, with the Court to determine the distribution of any
undeliverable or uncashed settlement benefits. (Gignac Decl., ¶ 14.)
D. The Distribution Of Any Uncashed Or Undeliverable Settlement Benefits Will Be Determined By The Court
The proposed Plan of Allocation minimizes the amount of settlement
benefits likely to be forfeited due to being “undeliverable” by: (1) requiring
Verizon Wireless to deliver cash benefits as bill credits for Distribution Customers;
and (2) providing for other Settlement Class Members to receive benefits at the
address that they provide (in the case of those making claims for benefits) or at
their last-known address, which the Settlement Administrator has updated using
the Postal Service’s National Change of Address Databank.
Inevitably, however, there will be some amount of settlement benefits that
are forfeited because they are “undeliverable” or, in the case of checks, uncashed
within 90 days. (Allocation Order, ¶¶ 16-17.) As to those undeliverable or
uncashed settlement benefits, the proposed Allocation Plan allows the Court to
determine the manner in which they should be distributed. (Allocation Order, ¶
20.)
To assist the Court in making this determination, the Plan of Allocation
requires the Settlement Administrator to submit a report to the Court setting forth:
(a) the total dollar amount of the checks deemed to have been forfeited by
Settlement Class Members; (b) the total amount of calling units represented by the
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PINs deemed to have been forfeited by Settlement Class Members; and (c) an
estimate of the cost of further distribution of these forfeited amounts to the
Settlement Class Members. (Allocation Order, ¶ 18.)
The Proposed Plan of Allocation also requires Class Counsel to file with the
Court a Statement of Recommendation with respect to the further allocation and
distribution of: (a) the total dollar amount represented by the checks deemed to
have been forfeited by Settlement Class Members; and (b) the total amount of
calling units represented by the PINs deemed to have been forfeited by Settlement
Class Members. (Allocation Order, ¶ 19.)
V. CONCLUSION
For all of the foregoing reasons, and on the basis of the legal authorities set
forth herein, Plaintiffs respectfully request that the Court enter the Order
Approving Plan of Allocation and Distribution of the Settlement Fund that is
submitted herewith.
Dated: January 23, 2015 HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP
By s/ Stephen L. Dreyfuss, Esq. A Member of the Firm Stephen L. Dreyfuss, Esq. Matthew M. Moloshok, Esq.
One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020
Facsimile: (973) 621-7406
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FOLEY BEZEK BEHLE & CURTIS, LLP Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072 ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401
Court-Appointed Class Counsel
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UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated, Plaintiffs, v. CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,
Defendant.
Civ. Act. No. 06-2163 (JLL)
__________________________________________________________________
ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND
__________________________________________________________________
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The Court, having reviewed the Plan of Allocation and Distribution of the
Settlement Fund proposed by plaintiffs Ralph Demmick and Donald Barth,
individually and in their capacities as the certified Class Representatives, and
finding the Plan of Allocation and Distribution of the Settlement Fund to be fair,
reasonable and in the best interests of the Settlement Class Members (as defined in
the Settlement Agreement and certified in the Preliminary Approval Order and the
Final Approval Order), hereby ORDERS, ADJUDGES, and DECREES as follows:
DEFINED TERMS
1. The capitalized terms used in this Order Approving Plan of Allocation
and Distribution of the Settlement Fund shall have the same meaning as defined in
the Settlement Agreement.
2. “Cash Component” refers to the $36.7 million in cash that was
transferred by Verizon Wireless to the court-appointed Settlement Administrator
and deposited into an interest earning account, together with all interest earned
thereon until the Date of Distribution (as defined herein below).
3. “Calling Units Component” refers to the $27.5 million in calling units
(based upon a conversion ratio of 10 cents per unit for the 275 million total calling
units) to be distributed to the In-Network Settlement Class Members by means of
personal identification numbers (“PINs”).
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4. The Cash Component and the Calling Units Component, together,
constitute the “Settlement Fund” in this action.
5. The “Settlement Classes” consist of : (a) the FSP Settlement Class (as
defined in the Settlement Agreement and certified in the Preliminary Approval
Order); and (b) the In-Network Settlement Class (as defined in the Settlement
Agreement and certified in the Preliminary Approval Order).
6. “Date of Distribution” refers to the date on which checks and/or PINs
are mailed to Settlement Class Members.
7. “Settlement Administrator” refers to Kurtzman Carson Consultants
LLC, the Court-appointed settlement administrator in this action.
8. “Net Settlement Fund” means the portion of the Settlement Fund that
remains for allocation and distribution to the Settlement Classes after the court-
ordered disbursements in paragraph 10 below.
9. “Remaining Cash Component” means the portion of the Cash
Component that is available for allocation and distribution to the Settlement
Classes after the court-ordered disbursements described in paragraph 10 below.
COURT ORDERED DISBURSEMENTS
10. Consistent with the orders entered by this Court, the Settlement
Administrator shall make the following disbursements from the Cash Component
of the Settlement Fund:
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a. $ 19,260,000 in attorneys’ fees and $352,883.00 in expenses
shall be disbursed to Class Counsel as set forth in the Court’s Order Awarding
Attorneys’ Fees and Expenses to Class Counsel, plus a pro rata share of the interest
earned by the Settlement Fund through the date of disbursement;
b. $30,000.00 in incentive awards shall be disbursed to the Class
Representatives as set forth in the Court’s Order Granting Incentive Awards to
Class Representatives, plus a pro rata share of the interest earned by the Settlement
Fund through the date of disbursement; and
c. $2,057,647 in fees and expenses incurred or to be incurred by
the Settlement Administrator for notice and settlement administration services
performed for the benefit of the FSP Settlement Class and the In-Network
Settlement Class.
ALLOCATION OF THE NET SETTLEMENT FUND
11. The allocation of the Net Settlement Fund as between the FSP
Settlement Class and the In-Network Settlement Class shall be as follows:
a. After April 29, 2015, which is the deadline for Settlement Class
Members to submit claims, the Settlement Administrator shall determine: (i) the
total number of FSP Settlement Class Members who are eligible to receive benefits
from the Net Settlement Fund; (ii) the total number of In-Network Settlement
Class Members who are eligible to receive benefits from the Net Settlement Fund;
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and (iii) the total number of FSP Settlement Class Members and In-Network Class
Members combined who are eligible to receive benefits from the Net Settlement
Fund. For purposes of this paragraph, Settlement Class Members “eligible to
receive benefits” are (x) those who are on the Class List provided by Verizon
Wireless as set forth in the Settlement Agreement; and (y) those who file timely
claims pursuant to the process set forth in the Plan of Allocation and Distribution;
in each case provided that the eligible Settlement Class Member did not submit a
timely and valid Request for Exclusion as set forth in the Settlement Agreement.
b. The Settlement Administrator shall calculate the portion of the
Remaining Cash Component to be allocated to the FSP Settlement Class (“FSP
Settlement Class Cash Sub Fund”) by multiplying the Remaining Cash Component
by a fraction represented by (i)/(iii) from paragraph 11. a. above. The fraction
shall be calculated such that each Settlement Class Member who is in both the FSP
Settlement Class and the In-Network Settlement Class shall receive two pro rata
shares of the Net Settlement Fund.
c. The Settlement Administrator shall calculate the portion of the
Remaining Cash Component to be allocated to the In-Network Settlement Class
(“In-Network Settlement Class Cash Sub Fund”) by multiplying the Remaining
Cash Component by a fraction represented by (ii)/(iii) from paragraph 11. a. above.
The fraction shall be calculated such that each Settlement Class Member who is in
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both the FSP Settlement Class and the In-Network Settlement Class shall receive
two pro rata shares of the Net Settlement Fund.
d. All $27.5 million of the Calling Units Component shall be
allocated to the In-Network Settlement Class.
DISTRIBUTION OF THE FSP SETTLEMENT CLASS CASH SUB FUND
12. The FSP Settlement Class Cash Sub Fund calculated under paragraph
11.b. above shall be distributed to the members of the FSP Settlement Class as
follows:
a. The Settlement Administrator shall divide the FSP Settlement
Class Cash Sub Fund by the total number of eligible FSP Settlement Class
Members, as defined in paragraph 11.a above, to yield the “FSP Settlement Class
Member Cash Benefit Amount”, which shall be the same dollar amount for each
eligible member of the FSP Settlement Class;
b. For all eligible FSP Settlement Class Members who are
Distribution Customers as defined in the Settlement Agreement, the FSP
Settlement Class Member Cash Benefit Amount shall be distributed to each such
eligible FSP Settlement Class Member by Verizon Wireless by means of a bill
credit, in accordance with the procedures set forth in Article IV.3 of the Settlement
Agreement; and
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c. For all eligible FSP Settlement Class Members who are not
Distribution Customers, the FSP Settlement Class Member Cash Benefit Amount
shall be distributed to each such eligible FSP Settlement Class Member by the
Settlement Administrator by means of a check mailed to the last known mailing
address of each such eligible FSP Settlement Class Member (which address shall
be updated, in the case of FSP Settlement Class Members on the Class List,
according to Article V.1).
DISTRIBUTION OF THE IN-NETWORK SETTLEMENT CLASS
CASH SUB FUND
13. The In-Network Settlement Class Cash Sub Fund calculated under
paragraph 11.c. above shall be distributed to the members of the In-Network
Settlement Class as follows:
a. The Settlement Administrator shall divide the In-Network
Settlement Class Cash Sub Fund by the total number of eligible In-Network
Settlement Class Members, as defined in paragraph 11.a above, to yield the “In-
Network Settlement Class Member Cash Benefit Amount”, which shall be the
same dollar amount for each eligible member of the In-Network Settlement Class;
b. For all eligible In-Network Settlement Class Members who are
Distribution Customers as defined in the Settlement Agreement, the In-Network
Settlement Class Member Cash Benefit Amount shall be distributed to each such
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eligible In-Network Settlement Class Member by Verizon Wireless by means of a
bill credit in accordance with the procedures set forth in Article IV.3 of the
Settlement Agreement; and
c. For all eligible In-Network Settlement Class Members who are
not Distribution Customers, the In-Network Settlement Class Member Cash
Benefit Amount shall be distributed to each such eligible In-Network Settlement
Class Member by the Settlement Administrator by means of a check mailed to the
last known mailing address of each such eligible In-Network Settlement Class
Member (which address shall be updated, in the case of In-Network Settlement
Class Members on the Class List, according to Article V.1).
DISTRIBUTION OF CALLING UNITS TO THE IN-NETWORK
SETTLEMENT CLASS
14. The $27.5 million Calling Units Component shall be distributed to the
members of the In-Network Settlement Class as follows:
a. The Settlement Administrator shall determine the total number
of In-Network Settlement Class Members eligible to receive calling units, defined
as (i) those who are on the Class List provided by Verizon Wireless as set forth in
the Settlement Agreement; and (ii) those who file timely claims by April 29, 2015;
in each case provided that the eligible Settlement Class Member did not submit a
timely and valid Request for Exclusion as set forth in the Settlement Agreement.
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b. The Settlement Administrator shall divide the 275 million
calling units in the Calling Units Component by the total number of eligible In-
Network Settlement Class Members, as defined in paragraph 14.a, above, to yield
the “In-Network Settlement Class Member Calling Unit Amount”, which shall be
the same number of calling units for each eligible member of the In-Network
Settlement Class and which shall be rounded down to the nearest calling unit;
c. Each eligible In-Network Settlement Class Members who is on
the Email List as defined in the Settlement Agreement shall receive the In-Network
Settlement Class Member Calling Unit Amount by means of an email that
conveys: (1) the PIN number needed to access the calling units; (2) how to access
and use the calling units; and (3) the terms and conditions applicable to the use of
the calling units; and
d. Each eligible In-Network Settlement Class Member who is not
on the Email List shall receive the In-Network Settlement Class Member Calling
Unit Amount by means of a sealed postcard mailing that conveys: (1) the PIN
number needed to access the calling units; (2) how to access and use the calling
units; and (3) the terms and conditions applicable to the use of the calling units.
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RETURNED AND/OR UNCASHED SETTLEMENT CLASS MEMBER
CHECKS
15. In order to encourage every Settlement Class Member who is the
recipient of a cash benefit in the form of a check to promptly cash the check that is
received, each such check shall bear the following notation: “CASH THIS CHECK
PROMPTLY. IT IS VOID IF NOT CASHED BY 90 DAYS AFTER THE
DISTRIBUTION DATE.”
16. Any check issued to a Settlement Class Member that is returned to the
Settlement Administrator as undeliverable or that is not cashed by the Settlement
Class Member within ninety (90) days of the Date of Distribution shall be deemed
to have been forfeited by the Settlement Class Member.
RETURNED AND/OR UNDISTRIBUTED CALLING UNITS PINS
17. Any calling units PIN sent to Settlement Class Members by email as
to which the Settlement Administrator receives “send failure,” “bounce-back,” or
other similar email failure notices shall be resent to those Settlement Class
Members by mail. Any calling units PIN sent to Settlement Class Members by
mail that are returned to the Settlement Administrator as “undeliverable” shall be
deemed to have been forfeited by those Settlement Class Members.
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FURTHER PROCEEDINGS
18. Within 150 days after the Distribution Date, the Settlement
Administrator shall submit a report to the Court setting forth: (a) the total dollar
amount of the checks deemed to have been forfeited by Settlement Class Members
under paragraph 16 above; (b) the total amount of calling units represented by the
PINs deemed to have been forfeited by Settlement Class Members under paragraph
17 above; (c) the total amount of calling units undistributed as a result of the
“rounding down” procedure described in paragraph 14(b) above; and (d) an
estimate of the cost of further distribution of these forfeited amounts to the
Settlement Class Members.
19. Also within 150 days after the Distribution Date, Class Counsel shall
file with the Court a Statement of Recommendation with respect to the further
allocation and distribution of: (a) the total dollar amount represented by the checks
deemed to have been forfeited by Settlement Class Members under paragraph 16
above; (b) the total amount of calling units represented by the PINs deemed to
have been forfeited by Settlement Class Members under paragraph 17 above; and
(c) any calling units remaining as a result of the “rounding down” procedure
described in paragraph 14(b) above
20. After considering the report submitted by the Settlement
Administrator and the Statement of Recommendation by Class Counsel, the Court
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shall issue an Order directing the manner of distribution of: (a) the total dollar
amount represented by the checks deemed to have been forfeited by Settlement
Class Members under paragraph 16 above; (b) the total amount of calling units
represented by the PINs deemed to have been forfeited by Settlement Class
Members under paragraph 17 above; and (c) any calling units remaining as a result
of the “rounding down” procedure described in paragraph 14(b) above.
IT IS SO ORDERED. Dated: _______________________ ___________________________________ Honorable Jose L. Linares United States District Judge
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