UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Transcription

1 Case 2:06-cv JLL-MF Document 157 Filed 01/23/15 Page 1 of 3 PageID: 3213 Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey Telephone: (973) Facsimile: (973) 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, v. Plaintiffs, CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10, Defendant. Civ. Act. No (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

2 Case 2:06-cv JLL-MF Document 157 Filed 01/23/15 Page 2 of 3 PageID: 3214 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 Telephone: (973) Facsimile: (973) 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 Telephone: (805) Facsimile: (805)

3 Case 2:06-cv JLL-MF Document 157 Filed 01/23/15 Page 3 of 3 PageID: 3215 ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California Telephone: (805) Facsimile: (805) Court-Appointed Class Counsel 3

4 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 1 of 6 PageID: 3216

5 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 2 of 6 PageID: 3217

6 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 3 of 6 PageID: 3218

7 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 4 of 6 PageID: 3219

8 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 5 of 6 PageID: 3220

9 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 6 of 6 PageID: 3221

10 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 1 of 22 PageID: 3222 Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey Telephone: (973) Facsimile: (973) 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, v. Plaintiffs, CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10, Civ. Act. No (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. Defendant. Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey Telephone: (973) Facsimile: (973) i

11 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 2 of 22 PageID: 3223 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 Telephone: (805) Facsimile: (805) J. Paul Gignac, Esq. (admitted pro hac vice) ARIAS OZZELLO & GIGNAC LLP 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California Telephone: (805) Facsimile: (805) Court-Appointed Class Counsel ii

12 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 3 of 22 PageID: 3224 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 iii

13 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 4 of 22 PageID: 3225 D. The Distribution Of Any Uncashed Or Undeliverable Settlement Benefits Will Be Determined By The Court...14 V. CONCLUSION...15 iv

14 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 5 of 22 PageID: 3226 TABLE OF AUTHORITIES Page(s) Aetna Inc. Sec. Litig., 2001 WL (E.D. Pa. Jan. 4, 2001).4 In re Baby Products Antitrust Litigation, 708 F.3d 163 (3 rd 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) 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 (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 (D.N.J. July 29, 2013)...4,5 In re The Mills Corp. Sec. Litig., 265 F.R.D. 246 (E.D. Va. 2009) McCoy v. Health Net, Inc., 569 F.Supp.2d 448 (D.N.J. 2008)...2 v

15 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 6 of 22 PageID: 3227 Walsh v. Great Alt. & Pac. Tea Co., 726 F.2d 956 (3d Cir. 1983)...4 References McLaughlin on Class Actions (11 th ed.)....2 vi

16 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 7 of 22 PageID: 3228 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 1

17 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 8 of 22 PageID: 3229 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 2

18 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 9 of 22 PageID: 3230 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 , *3 (D.N.J. Nov. 28, 2007). See also, In re Cendant Corp. Litig., 264 F.3d 201, 248 (3d Cir. 2001). Courts 3

19 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 10 of 22 PageID: 3231 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 , 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 4

20 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 11 of 22 PageID: 3232 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 5

21 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 12 of 22 PageID: 3233 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 6

22 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 13 of 22 PageID: 3234 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 7

23 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 14 of 22 PageID: 3235 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 8

24 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 15 of 22 PageID: 3236 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 9

25 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 16 of 22 PageID: 3237 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 List as defined in the Settlement Agreement will receive the In-Network Settlement Class Member Calling Unit Amount by means of an 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 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.) 10

26 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 17 of 22 PageID: 3238 G. Disposition Of Returned And/Or Undistributed Calling Unit PINs Any calling unit PINs sent to Settlement Class Members by as to which the Settlement Administrator receives send failure, bounce-back, or other similar 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 11

27 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 18 of 22 PageID: 3239 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 12

28 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 19 of 22 PageID: 3240 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 13

29 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 20 of 22 PageID: 3241 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, ) 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 14

30 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 21 of 22 PageID: 3242 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 Telephone: (973) Facsimile: (973)

31 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 22 of 22 PageID: 3243 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 Telephone: (805) Facsimile: (805) ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California Telephone: (805) Facsimile: (805) Court-Appointed Class Counsel 16

32 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 1 of 12 PageID: 3244 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, Civ. Act. No (JLL) v. Plaintiffs, CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10, Defendant. ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND 0

33 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 2 of 12 PageID: 3245 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 ). 1

34 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 3 of 12 PageID: 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 courtordered 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: 2

35 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 4 of 12 PageID: 3247 a. $ 19,260,000 in attorneys fees and $352, 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, 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; 3

36 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 5 of 12 PageID: 3248 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 4

37 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 6 of 12 PageID: 3249 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 5

38 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 7 of 12 PageID: 3250 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 6

39 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 8 of 12 PageID: 3251 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. 7

40 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 9 of 12 PageID: 3252 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 List as defined in the Settlement Agreement shall receive the In-Network Settlement Class Member Calling Unit Amount by means of an 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 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. 8

41 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 10 of 12 PageID: 3253 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 as to which the Settlement Administrator receives send failure, bounce-back, or other similar 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. 9

42 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 11 of 12 PageID: 3254 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 10

43 Case 2:06-cv JLL-MF Document Filed 01/23/15 Page 12 of 12 PageID: 3255 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 11