Evans v. Zions Bancorporation, N.A.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 RONALD C. EVANS, JOAN M. EVANS, No. 2:17-cv-01123 WBS DB DENNIS TREADAWAY, and all other 13 similarly situated, 14 Plaintiffs, MEMORANDUM AND ORDER RE: MOTION FOR FINAL APPROVAL OF 15 v. CLASS ACTION SETTLEMENT AND MOTION FOR ATTORNEYS’ FEES, 16 ZIONS BANCORPORATION, N.A., dba COSTS, AND REPRESENTATIVE California Bank and Trust, SERVICE PAYMENT 17 Defendant. 18

19 ZIONS BANCORPORATION, N.A., 20 Third-Party Plaintiff, 21 v. 22 JTS, LARRY CARTER, JACK SWEIGART 23 AND BRISTOL INSURANCE, 24 Third-Party Defendants. 25 26 ----oo0oo---- 27 Plaintiffs Ronald Evans, Joan Evans, and Dennis 28 Treadaway brought this putative class action against 1 defendant Zions Bancorporation, d/b/a California Bank and 2 Trust (“CB&T”), asserting claims based on CB&T’s alleged 3 acquiescence in and provision of support for a fraud scheme 4 perpetrated by one of its clients against putative class 5 members. On August 1, 2022, the court granted plaintiffs’ 6 unopposed motion for preliminary approval of class action 7 settlement. (See Order Granting Preliminary Approval 8 (Docket No. 101).) Plaintiffs now move unopposed for final 9 approval of the parties’ class action settlement and 10 attorneys’ fees, costs, and a class representative service 11 payment. (See Docket No. 102.) The court held a hearing on 12 November 7, 2022. No class members appeared at the hearing 13 to object to or to opt out of the settlement 14 I. Discussion1 15 The Ninth Circuit has declared a strong judicial policy 16 favoring settlement of class actions. Class Plaintiffs v. City 17 of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); see also 18 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009) 19 (“We put a good deal of stock in the product of an arms-length, 20 non-collusive, negotiated resolution[.]”) (citation omitted). 21 Rule 23(e) provides that “[t]he claims, issues, or defenses of a 22 certified class may be settled . . . only with the court’s 23 approval.” Fed. R. Civ. P. 23(e). 24 “Approval under 23(e) involves a two-step process in 25

26 1 The court previously recited the factual and procedural background in its order granting plaintiff’s unopposed motion for 27 preliminary approval of the class action settlement. (See Order Granting Preliminary Approval at 2-3.) Accordingly, the court 28 will refrain from doing so again. 1 which the Court first determines whether a proposed class action 2 settlement deserves preliminary approval and then, after notice 3 is given to class members, whether final approval is warranted.” 4 Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 5 525 (C.D. Cal. 2004) (citing Manual for Complex Litig. (Third), 6 § 30.41 (1995)). This court satisfied step one by granting 7 plaintiff’s unopposed motion for preliminary approval of class 8 action settlement on July 29, 2022. (Docket No. 101.) Now, 9 following notice to the class members, the court will consider 10 whether final approval is merited by evaluating: (1) the 11 treatment of this litigation as a class action and (2) the terms 12 of the settlement. See Diaz v. Tr. Territory of Pac. Islands, 13 876 F.2d 1401, 1408 (9th Cir. 1989). 14 A. Class Certification 15 A class action will be certified only if it meets Rule 16 23(a)’s four prerequisites and fits within one of Rule 23(b)’s 17 three subdivisions. Fed. R. Civ. P. 23(a)-(b). Although a 18 district court has discretion in determining whether the moving 19 party has satisfied each Rule 23 requirement, the court must 20 conduct a rigorous inquiry before certifying a class. See 21 Califano v. Yamasaki, 442 U.S. 682, 701 (1979); Gen. Tel. Co. of 22 Sw. v. Falcon, 457 U.S. 147, 161 (1982). 23 1. Rule 23(a)

24 Rule 23(a) restricts class actions to cases where: (1) the class is so numerous that joinder of all 25 members is impracticable; (2) there are questions 26 of law or fact common to the class; (3) the claims or defenses of the representative parties are 27 typical of the claims or defenses of the class; and (4) the representative parties will fairly and 28 1 adequately protect the interests of the class. 2 Fed. R. Civ. P. 23(a). These requirements are commonly referred 3 to as numerosity, commonality, typicality, and adequacy of 4 representation. In the court’s order granting preliminary 5 approval of the settlement, the court found that the putative 6 class satisfied the Rule 23(a) requirements. (See Order Granting 7 Preliminary Approval at 5-10.) The court is unaware of any 8 changes that would affect its conclusion that the putative class 9 satisfies the Rule 23(a) requirements, and the parties have not 10 indicated that they are aware of any such developments. (See 11 Mot. for Final Approval at 9.) The court therefore finds that 12 the class definition proposed by plaintiffs meets the 13 requirements of Rule 23(a). 14 2. Rule 23(b) 15 An action that meets all the prerequisites of Rule 16 23(a) may be certified as a class action only if it also 17 satisfies the requirements of one of the three subdivisions of 18 Rule 23(b). Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th 19 Cir. 2013). In its order granting preliminary approval of the 20 settlement, the court found that both the predominance and 21 superiority prerequisites of Rule 23(b)(3) were satisfied. (See 22 Order Granting Preliminary Approval at 10-12.) The court is 23 unaware of any changes that would affect its conclusion that Rule 24 23(b)(3) is satisfied. Because the settlement class satisfies 25 both Rule 23(a) and 23(b)(3), the court will grant final class 26 certification of this action. 27 3. Rule 23(c)(2) Notice Requirements 28 If the court certifies a class under Rule 23(b)(3), it 1 “must direct to class members the best notice that is practicable 2 under the circumstances, including individual notice to all 3 members who can be identified through reasonable effort.” Fed. 4 R. Civ. P. 23(c)(2)(B). Rule 23(c)(2) governs both the form and 5 content of a proposed notice. See Ravens v. Iftikar, 174 F.R.D. 6 651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin, 7 417 U.S. 156, 172–77 (1974)). Although that notice must be 8 “reasonably certain to inform the absent members of the plaintiff 9 class,” actual notice is not required. Silber v. Mabon, 18 F.3d 10 1449, 1454 (9th Cir. 1994) (citation omitted). 11 The parties selected The Beverly Group, Inc. (“TBG”) to 12 serve as the Settlement Administrator. (Denver Decl. ¶ 3 (Docket 13 No. 102-1).) The potential class members in this matter were 14 also the overwhelming majority of unsecured creditors in the 15 related IMG bankruptcy matter in which TBG’s founder was serving 16 at the Chapter 11 Trustee. (Id.) Defendants timely provided TBG 17 with the class list, utilizing the bankruptcy proceeding database 18 of claimants, derived from the Court-approved claims of the 19 Trustee, and addresses. (Id.) From the combined settlement 20 class member information from the estate’s own records of court 21 approved distribution and claims, list of potential class action 22 members from class action counsel, and TBG’s efforts to locate 23 additional claimants, 56 settlement class members and 34 24 potential net-losers were identified. (Id.) When TBG sent out 25 the Court-approved notice packets, the notice form was 26 personalized for each recipient and set forth the recipient’s net 27 loss amount as reviewed by TBG. (Id. ¶¶ 4-5.) In total, TBG 28 sent out 90 notice packets. (Id. ¶ 6.) TBG also ran the Court- 1 approved publication notice in the Sacramento Bee. (Id. ¶ 7.) 2 Ten notices were returned to TBG by the U.S. Post 3 Office as undeliverable. (Id. ¶ 9.) TBG was able to email 4 4 class notices. (Id.) TBG has received zero responses from class 5 members presenting written or oral requests for exclusion. (Id. 6 ¶ 10.) TBG has received zero responses from class members 7 presenting written or oral objections to the settlement. (Id. ¶ 8 11.) TBG received 5 responses from notice recipients questioning 9 their respective net loss amounts. (Id. ¶ 12.) TBG has resolved 10 4 of the 5 claim disputes. (Id.) The remaining notice recipient 11 did not provide documents to support a different calculation and 12 has not provided any information to support a different 13 calculation of a net loss other than $0. (Id.) 14 “Notice is satisfactory if it ‘generally describes the 15 terms of the settlement in sufficient detail to alert those with 16 adverse viewpoints to investigate and to come forward and be 17 heard.’” Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 18 575 (9th Cir. 2004) (quoting Mendoza v. Tucson Sch. Dist. No. 1, 19 623 F.2d 1338, 1352 (9th Cir. 1980)). The notice identifies the 20 parties, explains the nature of the proceedings, defines the 21 class, provides the terms of the settlement, and explains the 22 procedure for objecting or opting out of the class. (Id. ¶ 8.) 23 The notice also explains how class members’ individual settlement 24 awards will be calculated and the amount that class members can 25 expect to receive. (Id.) Accordingly, the notice complies with 26 Rule 23(c)(2)(B)’s requirements. 27 B. Rule 23(e): Fairness, Adequacy, and Reasonableness of 28 Proposed Settlement 1 Having determined that class treatment is warranted, 2 the court must now address whether the terms of the parties’ 3 settlement appear fair, adequate, and reasonable. See Fed. R. 4 Civ. P. 23(e)(2). To determine the fairness, adequacy, and 5 reasonableness of the agreement, Rule 23(e) requires the court to 6 consider four factors: “(1) the class representatives and class 7 counsel have adequately represented the class; (2) the proposal 8 was negotiated at arm’s length; (3) the relief provided for the 9 class is adequate; and (4) the proposal treats class members 10 equitably relative to each other.” Id. The Ninth Circuit has 11 also identified eight additional factors the court may consider, 12 many of which overlap substantially with Rule 23(e)’s four 13 factors: The strength of the plaintiff’s case; the risk, 14 expense, complexity, and likely duration of further litigation; the risk of maintaining class 15 action status throughout the trial; the amount offered in settlement; the extent of discovery 16 completed and the stage of the proceedings; the experience and views of counsel; the presence of 17 a governmental participant; and the reaction of the class members to the proposed settlement. 18 19 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). 20 Because this settlement was reached prior to class 21 certification, it will be subject to heightened scrutiny for 22 purposes of final approval. See In re Apple Inc. Device 23 Performance Litig., 50 F.4th 769, 2022 WL 4492078, at *8 (9th 24 Cir. 2022). The recommendations of plaintiff’s counsel will not 25 be given a presumption of reasonableness, but rather will be 26 subject to close review. See id. at *9. The court will 27 particularly scrutinize “any subtle signs that class counsel have 28 allowed pursuit of their own self-interests to infect the 1 negotiations.” See id. (quoting Roes, 1-2 v. SFBSC Mgmt., LLC, 2 944 F.3d 1035, 1043 (9th Cir. 2019)). 3 1. Adequate Representation 4 The court must first consider whether “the class 5 representatives and class counsel have adequately represented the 6 class.” Fed. R. Civ. P. 23(e)(2)(A). This analysis is 7 “redundant of the requirements of Rule 23(a)(4) . . . ” Hudson 8 v. Libre Tech., Inc., No. 3:18-cv-1371-GPC-KSC, 2020 WL 2467060, 9 at *5 (S.D. Cal. May 13, 2020) (quoting Rubenstein, 4 Newberg on 10 Class Actions § 13:48 (5th ed.)) See also In re GSE Bonds Antitr. 11 Litig., 414 F. Supp. 3d 686, 701 (S.D.N.Y. 2019) (noting 12 similarity of inquiry under Rule 23(a)(4) and Rule 23(e)(2)(A)). 13 Because the Court has found that the proposed class 14 satisfies Rule 23(a)(4) for purposes of class certification, the 15 adequacy factor under Rule 23(e)(2)(A) is also met. See Hudson, 16 2020 WL 2467060, at *5. 17 2. Negotiation of the Settlement Agreement 18 Counsel for both sides appear to have diligently 19 pursued settlement after thoughtfully considering the strength of 20 their arguments and potential defenses. The parties participated 21 in an arms-length mediation before two experienced litigation 22 mediators. In August of 2020, the parties participated in a 23 mediation before retired Judge Richard L. Gilbert, but the case 24 did not settle. (Denver Decl. ¶ 16.) The parties continued with 25 additional discovery and trial preparation, including taking over 26 50 depositions with thousands of exhibits. (Id.) In March of 27 2022, the parties participated in a mediation before retired 28 Judge Ronald Sabraw from JAMS, who has expertise in Ponzi scheme 1 litigation. (Id.) After the first day of this second mediation, 2 March 17, 2022, the case did not settle. (Id.) The parties 3 agreed to consider a mediator’s proposal as a possible method 4 that might move the discussions forward. (Id.) On March 25, 5 2022, Judge Sabraw recommended that the Bank pay the class 6 $14,000,000 to settle approximately $55,000,000 in unrepaid 7 loans. (Id.) On April 1, 2022, the parties were informed by the 8 Judge that both sides had accepted the mediator’s proposal. (Id.) 9 On June 17, 2022, the parties drafted and executed a long-form 10 settlement agreement. (Id.) 11 Given the sophistication and experience of plaintiff’s 12 counsel, the parties’ representation that the settlement reached 13 was the product of arms-length bargaining over two mediations, 14 and the five-year litigation history, the court finds the 15 proposed settlement is non-collusive and is in the best interest 16 of the class. 17 3. Adequate Relief 18 In determining whether a settlement agreement provides 19 adequate relief for the class, the court must “take into account 20 (i) the costs, risks, and delay of trial and appeal; (ii) the 21 effectiveness of any proposed method of distributing relief to 22 the class, including the method of processing class-member 23 claims; (iii) the terms of any proposed award of attorney's fees, 24 including timing of payment; and (iv) any [other] agreement[s]” 25 made in connection with the proposal. See Fed. R. Civ. P. 26 23(e)(2)(C); Baker v. SeaWorld Entm’t, Inc., No. 14-cv-02129-MMA- 27 AGS, 2020 WL 4260712, at *6-8 (S.D. Cal. Jul. 24, 2020). 28 The court notes that, in evaluating whether the 1 settlement provides adequate relief, it must consider several of 2 the same factors as outlined in Hanlon, including the strength of 3 the plaintiff’s case, the risk, expense, complexity, and likely 4 duration of further litigation, the risk of maintaining class 5 action status throughout the trial, and the amount offered in 6 settlement. See Hanlon, 150 F.3d at 1026. 7 In determining whether a settlement agreement is 8 substantively fair to class members, the court must balance the 9 value of expected recovery against the value of the settlement 10 offer. See In re Tableware Antitrust Litig., 484 F. Supp. 2d 11 1078, 1080 (N.D. Cal. 2007). Here, plaintiffs’ counsel estimates 12 that defendant’s potential exposure could be approximately 13 $55,000,000 (Denver Decl. ¶ 19.) The case settled for 14 $14,000,000--approximately 25% of the potential damages. (Id.) 15 Given that 100% success in litigation is uncommon, and based on 16 defendants’ contentions that (1) there is no definitive proof of 17 actual knowledge; (2) the circumstantial evidence offered by 18 plaintiffs to support an inference of actual knowledge is 19 inconclusive and subject to alternate interpretation; (3) it is 20 unrealistic for class members to expect they are due a full 21 return of their funds considering that investments in legitimate 22 companies often result in losses; and (4) the class members 23 themselves were arguably reckless in passing money to IMG without 24 first doing anything to confirm the company was legitimate, which 25 it was not. (Id. ¶ 20.) The Settlement Agreement will result in 26 an average payment of approximately 17% of each class member’s 27 net loss after the proposed deductions for attorneys’ fees, costs 28 of litigation, notice expenses, and an enhancement aware for the 1 plaintiffs. (Id. ¶ 22.) 2 Plaintiffs’ counsel represents that, absent settlement, 3 further litigation would be costly, time consuming, and uncertain 4 in outcome. (See id. at ¶ 71.) Defendants would likely appeal 5 any favorable judgment for plaintiff, resulting in further 6 expense and jeopardy for class members. (Id.) Given the 7 strength of plaintiff’s claims and defendants’ potential 8 exposure, as well as the risk, expense, and complexity involved 9 in further litigation, the court is satisfied that the settlement 10 and resulting distribution provides a strong result for the class 11 and is fair to class members. 12 The Settlement Agreement further provides for 13 plaintiffs’ counsel to seek attorney’s fees totaling 30% of the 14 net amount remaining on the $14,000,000 after deductions incurred 15 for litigation costs not to exceed $200,000, claims 16 administration expenses not to exceed $150,000, and an 17 enhancement award of $5,000 for both plaintiff Ronald Evans and 18 plaintiff Joan Evans, for a total of $10,000. (Id. ¶ 23.) 19 If a negotiated class action settlement includes an 20 award of attorney’s fees, then the court “ha[s] an independent 21 obligation to ensure that the award, like the settlement itself, 22 is reasonable, even if the parties have already agreed to an 23 amount.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 24 935, 941 (9th Cir. 2011). As discussed in greater detail below, 25 the attorneys’ fees requested are reasonable. In light of all of 26 these considerations, the court finds that Rule 23(e)’s third 27 factor is satisfied. See Fed. R. Civ. P. 23(e)(C). 28 4. Equitable Treatment of Class Members 1 Finally, the court must consider whether the Settlement 2 Agreement “treats class members equitably relative to each 3 other.” See Fed. R. Civ. P. 23(e)(2)(D). In doing so, the Court 4 determines whether the settlement “improperly grant[s] 5 preferential treatment to class representatives or segments of 6 the class.” Hudson, 2020 WL 2467060, at *9 (quoting Tableware, 7 484 F. Supp. at 1079). 8 Here, the Settlement Agreement does not improperly 9 discriminate between any segments of the class--all class members 10 are entitled to pro rata monetary relief based on their 11 respective net loss. (See Mot. for Final Approval at 21.) While 12 the Settlement Agreement allowed plaintiffs to seek an incentive 13 enhancement award of $5,000 for both plaintiff Ronald Evans and 14 plaintiff Joan Evans, for a total of $10,000,2 (Denver Decl. ¶ 15 23), plaintiff has submitted additional evidence documenting 16 their time and effort spent on this case, which, as discussed 17 further below, in Section E, has satisfied the court that their 18 additional compensation above other class members is justified. 19 See Hudson, 2020 WL 2467060, at *9. The court therefore finds 20 that the Settlement Agreement treats class members equitably. 21 See Fed. R. Civ. P. 23(e)(D). 22 5. Remaining Hanlon Factors 23 In addition to the Hanlon factors already considered as 24 part of the court’s analysis under Rule 23(e)(A)-(D), the court 25 must also take into account “the extent of the discovery 26

27 2 Plaintiff Treadway has elected to forego the request for the enhancement award so that the $5,000 is added to the 28 general distribution amount. (Denver Decl. ¶ 23, fn. 3.) 1 completed . . . the presence of government participation, and the 2 reaction of class members to the proposed settlement.” Hanlon, 3 150 F.3d at 1026. 4 Through formal and informal discovery, defendants 5 provided a substantial amount of information that appears to have 6 allowed the parties to adequately assess the value of plaintiff’s 7 and the class’s claims. (Denver Decl. ¶ 29.) For example, over 8 50 depositions were taken with thousands of exhibits discussed 9 during the depositions. (Id.) This factor weighs in favor of 10 final approval of the settlement. 11 The seventh Hanlon factor, pertaining to government 12 participation, also weighs in favor of approval. Hanlon, 150 13 F.3d at 1026. Under the Class Action Fairness Act (“CAFA”), the 14 proposed settlement must be submitted to the Office of the 15 Comptroller of the Currency (“OCC”) within 10 days of filing the 16 Settlement Agreement with the court. Here, Bank has confirmed 17 that the Bank provided a copy of the proposed Settlement 18 Agreement to the OCC before June 27, 2022. Bank has also 19 confirmed that the OCC has not sought to intervene or otherwise 20 objected to the settlement. This factor therefore weighs in 21 favor of final approval of the settlement. 22 The eighth Hanlon factor, the reaction of the class 23 members to the proposed settlement, also weighs in favor of final 24 approval. See Hanlon, 150 F.3d at 1026. No class members have 25 objected to or sought to opt out of the settlement. See id. 26 The court therefore finds that the remaining Hanlon 27 factors weigh in favor of preliminary approval of the Settlement 28 Agreement. See Ramirez, 2017 WL 3670794, at *3. 1 In sum, the four factors that the court must evaluate 2 under Rule 23(e) and the eight Hanlon factors, taken as a whole, 3 appear to weigh in favor of the settlement. The court will 4 therefore grant final approval of the Settlement Agreement. 5 C. Attorneys’ Fees 6 Federal Rule of Civil Procedure 23(h) provides, “[i]n a 7 certified class action, the court may award reasonable attorney’s 8 fees and nontaxable costs that are authorized by law or by the 9 parties’ agreement.” Fed. R. Civ. P. 23(h). If a negotiated 10 class action settlement includes an award of attorneys’ fees, 11 that fee award must be evaluated in the overall context of the 12 settlement. Knisley v. Network Assocs., 312 F.3d 1123, 1126 (9th 13 Cir. 2002); Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 14 455 (E.D. Cal. 2013) (England, J.). The court “ha[s] an 15 independent obligation to ensure that the award, like the 16 settlement itself, is reasonable, even if the parties have 17 already agreed to an amount.” Bluetooth Headset, 654 F.3d at 18 941. 19 “Under the ‘common fund’ doctrine, ‘a litigant or a 20 lawyer who recovers a common fund for the benefit of persons 21 other than himself or his client is entitled to a reasonable 22 [attorneys’] fee from the fund as a whole.’” Staton v. Boeing 23 Co., 327 F.3d 938, 969 (9th Cir. 2003) (quoting Boeing Co. v. Van 24 Gemert, 444 U.S. 472, 478 (1980)). In common fund cases, the 25 district court has discretion to determine the amount of 26 attorneys’ fees to be drawn from the fund by employing either the 27 percentage method or the lodestar method. Id. The court may 28 also use one method as a “cross-check[ ]” upon the other method. 1 See Bluetooth Headset, 654 F.3d at 944. 2 As part of the settlement, the parties agreed that 3 plaintiffs’ counsel would seek attorney’s fees totaling 30% of 4 the net amount remaining from the $14,000,000 payment after the 5 reduction of the following: (1) litigation expenses not to exceed 6 $200,000; (2) settlement administration expenses not to exceed 7 $150,000; (3) a combined $15,000 enhancement award for the Evans 8 plaintiffs ($5,000 each). (Id. ¶ 36.) As such, the requested 9 attorney’s fees will amount to $4,105,905. (Id.) The remaining 10 $9,580,445 will be available to be distributed to members of the 11 settlement class, which is approximately 17% of each class 12 member’s respective net loss. (Id.) 13 Like other class actions, this case presented both 14 counsel and the class with a risk of no recovery at all. (Id. ¶ 15 37.) Plaintiffs’ counsel represents that, because the firm works 16 on contingency, it sometimes recovers very little to nothing at 17 all, even for cases that may be meritorious, and that the 18 potential costs that must be expended in such cases are often 19 substantial. (See id.) Where counsel do succeed in vindicating 20 rights on behalf of a class, they depend on recovering a 21 reasonable percentage-of-the-fund fee award to enable them to 22 take on similar risks in future cases. (See id.) Plaintiffs’ 23 counsel argues that, in light of the strong result and 24 substantial risk taken in this case, a 30% fee, as requested 25 here, is reasonable. 26 A “lodestar-multiplier” cross-check confirms the 27 reasonableness of the requested award. Plaintiffs’ counsel has 28 1 calculated a lodestar figure in this case of $5,579,002.3 (See 2 Denver Decl. ¶ 44.) According to contemporaneous billing logs 3 kept by plaintiffs’ counsel, attorneys at the two firms have, 4 over the span of five years, dedicated 6,724 hours of work to 5 this case. (Id. at ¶¶ 41-43.) 6 Based on plaintiffs’ counsel’s calculated lodestar 7 figure, plaintiff seeks a lodestar multiplier of approximately 8 0.74--in other words, plaintiffs’ counsel seeks less than the 9 lodestar cross-check would indicate she and her firm are entitled 10 to. In class actions, “[m]ultipliers can range from 2 to 4 or 11 even higher.” Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 12 224, 255 (2001).4 “Indeed, ‘courts have routinely enhanced the 13 lodestar to reflect the risk of non-payment in common fund 14 cases.’” Vizcaino, 290 F.3d at 1051 (approving fee award where 15 lodestar cross-check resulted in multiplier of 3.65); see also 16 id. at 1052 n.6, appx. (collecting cases and finding that risk 17 multiplier fell between 1.0 and 4.0 in 83% of cases); In re 18 NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 489 19 (S.D.N.Y. 1998) (awarding 3.97 multiplier and observing that 20 “[i]n recent years multipliers of between 3 and 4.5 have become 21 more common”). 22 Factors considered in determining the appropriate 23 lodestar multiplier generally include: (1) the risks presented by 24 3 The court expresses no opinion as to the proper 25 lodestar amount in this case.

26 4 Federal courts incorporate California state law on 27 deciding an appropriate multiplier when the claims are brought under California state law. Vizcaino v. Microsoft Corp., 290 28 F.3d 1043, 1047 (9th Cir. 2002). 1 the contingent nature of the case; (2) the difficulty of the 2 questions involved and the skill requisite to perform the legal 3 service properly; (3) the nature of the opposition; (4) the 4 preclusion of other employment by the attorney from accepting the 5 case; and (5) the result obtained. Ketchum v. Moses, 24 Cal. 4th 6 1122, 1132 (Cal. 2001); Graham v. DaimlerChrysler Corp., 34 Cal. 7 4th 553, 582 (Cal. 2004); Serrano v. Priest, 20 Cal.3d 25, 48-49 8 (Cal. 1977). Given the risks undertaken by plaintiffs’ counsel, 9 the defenses likely to be raised by defendant, the strong result 10 for the class, and the fact that courts routinely approve fee 11 awards corresponding with a lodestar of well over 1.0, the court 12 finds that a multiplier of 0.74 is justified this case. See 13 Johnson v. Fujitsu Tech. & Bus. of Am., Inc., No. 16-cv-03698-NC, 14 2018 U.S. Dist. LEXIS 80219, at *20 (N.D. Cal. May 11, 2018) 15 (finding multiplier of 4.37 to be reasonable); In re NCAA Ath. 16 Grant-In-Aid Cap Antitrust Litig., 2017 U.S. Dist. LEXIS 201108, 17 at *21 (N.D. Cal. Dec. 6, 2017) (finding multiplier of 3.66 to be 18 “well within the range of awards in other cases.”). 19 Accordingly, the court finds the requested fees to be 20 reasonable and will approve counsel’s motion for attorneys’ fees. 21 D. Costs 22 “There is no doubt that an attorney who has created a 23 common fund for the benefit of the class is entitled to 24 reimbursement of reasonable litigation expenses from that fund.” 25 In re Heritage Bond Litig., Civ. No. 02-1475, 2005 WL 1594403, at 26 *23 (C.D. Cal. June 10, 2005). The appropriate analysis is 27 whether the particular costs are of the type billed by attorneys 28 to paying clients in the marketplace. Harris v. Marhoefer, 24 1 F.3d 16, 19 (9th Cir. 1994). “Thus, [reimbursement of] 2 reasonable expenses, though greater than taxable costs, may be 3 proper.” Id. at 20. 4 Here, the parties agreed that plaintiffs’ counsel shall 5 be entitled to recover reasonable litigation costs, not to exceed 6 $200,000. (Denver Decl. ¶ 47.) Counsel states that his firm has 7 incurred expenses and costs to date in the amount of $69,538.33. 8 (Denver Decl. ¶ 47.) Robert Brace expended $64,111.67. (Id. ¶ 9 47.) These expenses include filing fees, court fees, deposition 10 fees, travel expenses, document and electronic file fees, 11 mediation fees, legal research fees, and data analysis fees. 12 (Id.) The court finds that these are reasonable litigation 13 expenses, see Heritage, 2005 WL 1594403, at *23, and will 14 therefore grant class counsel’s request for costs up to the 15 amount authorized by the Settlement Agreement, $200,000. 16 E. Representative Service Award 17 “Incentive awards are fairly typical in class action 18 cases.” Rodriguez, 563 F.3d at 958. “[They] are intended to 19 compensate class representatives for work done on behalf of the 20 class, to make up for financial or reputational risk undertaken 21 in bringing the action, and, sometimes, to recognize their 22 willingness to act as a private attorney general.” Id. at 958- 23 59. 24 Nevertheless, the Ninth Circuit has cautioned that 25 “district courts must be vigilant in scrutinizing all incentive 26 awards to determine whether they destroy the adequacy of the 27 class representatives . . .” Radcliffe v. Experian Info. 28 Solutions, Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). In 1 assessing the reasonableness of incentive payments, the court 2 should consider “the actions the plaintiff has taken to protect 3 the interests of the class, the degree to which the class has 4 benefitted from those actions” and “the amount of time and effort 5 the plaintiff expended in pursuing the litigation.” Staton, 327 6 F.3d at 977 (citation omitted). The court must balance “the 7 number of named plaintiffs receiving incentive payments, the 8 proportion of the payments relative to the settlement amount, and 9 the size of each payment.” Id. 10 In the Ninth Circuit, an incentive award of $5,000 is 11 presumptively reasonable. Davis v. Brown Shoe Co., Inc., No. 12 1:13-01211 LJO BAM, 2015 WL 6697929, at *11 (E.D. Cal. Nov. 3, 13 2015) (citing Harris v. Vector Marketing Corp., No. C-08-5198 14 EMC, 2012 WL 381202, at *7 (N.D. Cal. Feb. 6, 2012)) (collecting 15 cases). Two of the three named plaintiffs, Ronald Evans and Joan 16 Evans, seek an incentive payment of $5,000 each. (Denver Decl. ¶ 17 48.) The Evans plaintiffs represent that they have devoted 18 significant time and resources to the case over the past five 19 years, including involvement in the appeal to the Ninth Circuit. 20 (Decl. of Ronald and Joan Evans (“Evans Decl.”) ¶ 5 (Docket No. 21 98-3); Denver Decl. ¶ 48.) The Evans plaintiffs chose to 22 participate in this litigation as class representatives even 23 though could potentially receive a smaller recovery than if they 24 had acted solely on themselves and despite the professional and 25 reputational risk. (Denver Decl. ¶ 50.) The court finds that 26 these risks were real and substantial, and further warrant 27 awarding an incentive payment to Ronald and Joan Evans for their 28 participation as class representatives. See Staton, 327 F.3d at 1 977. The court will therefore authorize payment of a $5,000 2 service award. 3 II. Conclusion 4 Based on the foregoing, the court will grant final 5 certification of the settlement class and will approve the 6 settlement set forth in the settlement agreement as fair, 7 reasonable, and adequate. The settlement agreement shall be 8 binding upon all participating class members who did not exclude 9 themselves. 10 IT IS THEREFORE ORDERED that plaintiffs’ unopposed 11 motion for final approval of the parties’ class action settlement 12 and attorneys’ fees, costs, and a class representative service 13 payment (Docket No. 102) be, and the same hereby are, GRANTED. 14 IT IS FURTHER ORDERED THAT: 15 (1) Solely for the purpose of this settlement, and 16 pursuant to Federal Rule of Civil Procedure 23, the court hereby 17 certifies the following class: 18 All Net Losers, including assignees, but excluding Net Losers who have already released the Bank from IMG- 19 related claims, and also excluding any governmental entities, any judge, justice or judicial officer 20 presiding over this matter, and the members of his or her immediate family, the Bank, along with its 21 corporate parents, subsidiaries and/or affiliates, successors, and attorneys of any excluded Person or 22 entity referenced above, and any Person acting on behalf of any excluded Person or entity referenced 23 above. . . . 24 “Net Loser” means any Settlement Class Member who suffered a Net Loss from lending to or investing money 25 in IMG’s medical supply-related business(es). . . . 26 “Net Loss” means the total amount transferred by a Settlement Class Member to IMG minus the total amount 27 received back from IMG, including, but not limited to any return on investment, return of principal, fees, 28 and other payments by IMG to the Settlement Class 1 Member. For purposes of this settlement, for each Participating Class Member, the Net Loss shall be the 2 amount of the allowed claim as reflected in the Claims Approval Order, provided that such allowed claim only 3 includes monies provided to IMG for the purpose of lending to or investing money in IMG’s medical supply- 4 related business(es). 5 (Settlement Agreement (“Agreement”) at §§ 1.11, 1.12, 6 1.26 (Docket No. 98-1 at 23, 29) 7 (2) The court appoints the named plaintiffs Ronald 8 Evans, Joan Evans, and Dennis Treadway as class representative 9 and finds that they meet the requirements of Rule 23; 10 (3) The court appoints Robert L. Brace and Michael P. 11 Denver as class counsel and finds that they meet the requirements 12 of Rule 23; 13 (4) The Settlement Agreement’s plan for class notice is 14 the best notice practicable under the circumstances and satisfies 15 the requirements of due process and Rule 23. The plan is 16 approved and adopted. The notice to the class complies with Rule 17 23(c)(2) and Rule 23(e) and is approved and adopted; 18 (5) The court finds that the parties and their counsel 19 took appropriate efforts to locate and inform all class members 20 of the settlement. Given that no class member filed an objection 21 to the settlement, the court finds that no additional notice to 22 the class is necessary; 23 (6) As of the date of the entry of this order, 24 plaintiffs and all class members who have not timely opted out of 25 this settlement herby do and shall be deemed to have fully, 26 finally, and forever released, settled, compromised, 27 relinquished, and discharged defendants of and from any and all 28 settled claims, pursuant to the release provisions stated in the nn enn nee nn nnn nnn nen ene NO OS OSE

1 parties’ settlement agreement; 2 (7) Plaintiffs’ counsel is entitled to fees in the 3 amount of $4,105,905, and litigation costs of $153,650; 4 (8) The Beverly Group, Inc. is entitled to 5 administration costs in the amount up to $150,000; 6 (9) Plaintiffs Ronald Evans and Joan Evans are 7 entitled to an incentive award in the amount of $5,000; 8 (10) The remaining settlement funds shall be paid to 9 | participating class members in accordance with the terms of the 10 Settlement Agreement; and 11 (11) This action is dismissed with prejudice. However, 12 without affecting the finality of this Order, the court shall 13 retain continuing jurisdiction over the interpretation, 14 implementation, and enforcement of the Settlement Agreement with 15 respect to all parties to this action and their counsel of 16 record. : - ak. ah tle (LA. 17 Dated: November 8, 2022 WILLIAMB SHUBB 18 UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28 22