United States District Court, D. Oregon
ELIA AZAR and DEAN ALFANGE, on behalf of themselves and all others similarly situated, Plaintiffs,
BLOUNT INTERNATIONAL, INC., JOSHUA L. COLLINS, DAVID A. WILLMOTT, ROBERT E. BEASLEY, JR., RONALD CAMI, ANDREW C. CLARKE, NELDA J. CONNORS, E. DANIEL JAMES, HAROLD E. LAYMAN, MAX L. LUKENS, and DANIEL J. OBRINGER, Defendants.
J. McGaughey, Aurelia J. Erickson, and Kevin Kress, McGaughey
Erickson, W. Scott Holleman, Johnson Fistel LLP, and Shannon
L. Hopkins, Levi & Korsinsky LLP, Lead Counsel for
M. Sasaki and Ian Christy, Miller Nash Graham & Dunn LLP,
Of Attorneys for Defendants Blount International, Inc.,
Robert E. Beasley, Jr., Ronald Cami, Andrew C. Clarke, Nelda
J. Connors, E. Daniel James, Harold E. Layman, Max L. Lukens,
and Daniel J. Obringer.
A. Bornstein and Nicole D. Valente, Cravath, Swaine &
Moore LLP, Of Attorneys for Defendants Blount International,
Inc., Andrew C. Clarke, Nelda J. Connors, E. Daniel James,
and Harold E. Layman.
Lawrence J. Portnoy and Rebecca L. Martin, Davis Polk &
Wardwell LLP, Of Attorneys for Defendants Robert E. Beasley,
Jr., Ronald Cami, Max L. Lukens, and Daniel J. Obringer.
John Casey, K&L Gates LLP, Jay P. Lefkowitz and Nathaniel
J. Kritzer, Kirkland & Ellis LLP, Of Attorneys for
Defendants Joshua L. Collins and David A. Willmott.
OPINION AND ORDER APPROVING IN PART SETTLEMENT,
ATTORNEY'S FEES, EXPENSES, AND SERVICE AWARDS
Michael H. Simon United States District Judge.
matter comes before the Court on Plaintiffs' unopposed
motion for final approval of class settlement (“Final
Approval Motion”) and Plaintiffs' counsel's
motion for attorney's fees, costs, and a service award
for each class representative, submitted as part of
Plaintiffs' Final Approval Motion. ECF 148. The
Court held an initial final approval hearing on September 9,
2019, to determine: (1) whether the terms and conditions of
the Stipulation of Settlement, ECF 145,
(“Stipulation” or “Settlement”) are
fair, reasonable, and adequate for the settlement of all
claims asserted by Lead Plaintiffs Elia Azar and Dean Alfange
(collectively, “Lead Plaintiffs”) against Blount
International, Inc. (“Blount”), Joshua L.
Collins, David A. Willmott, Robert E. Beasley, Jr., Ronald
Cami, Andrew C. Clarke, Nelda J. Connors, E. Daniel James,
Harold E. Layman, Max L. Lukens, and Daniel J. Obringer
(collectively “Defendants”); (2) whether to
approve the proposed plan of allocation as a fair and
reasonable method to allocate the Settlement
among Class Members; (3) whether to approve the requested
attorney's fees and expenses; and (4) whether to approve
the requested service, or incentive, awards for the Lead
Plaintiffs. The Court continued the hearing because counsel
for Defendants failed to comply with the requirements of the
Class Action Fairness Act (“CAFA”), specifically,
to provide the notice required under 28 U.S.C. §
1715(b), (d). The Court continued the Fairness Hearing and
consideration of Plaintiffs' motion until after
Defendants' counsel provided notice under CAFA.
Court has considered the Final Approval Motion, the
Stipulation, the papers submitted in connection with the
motion, the arguments of counsel, the response of Class
Members to the Notice of Pendency and Proposed Settlement of
Class Action (“Notice”), and the files, records,
and proceedings in the above-captioned action
(“Action”). The Court finds good cause to give
final approval to the Settlement and the Plan of Allocation.
The Court also grants in part Plaintiff's counsel's
requested attorney's fees, expenses, and service awards.
Approval of Class Action Settlement
Rule 23(e) of the Federal Rules of Civil Procedure,
“[t]he claims, issues, or defenses of a certified class
may be settled, voluntarily dismissed, or compromised only
with the court's approval.” “The purpose of
Rule 23(e) is to protect the unnamed members of the class
from unjust or unfair settlements affecting their
rights.” In re Syncor ERISA Litig., 516 F.3d
1095, 1100 (9th Cir. 2008). Thus, to approve a class action
settlement, a court must find that the settlement is
“fair, reasonable, and adequate.” Fed.R.Civ.P.
23(3); Lane v. Facebook, Inc., 696 F.3d 811, 818
(9th Cir. 2012).
settlement must be considered as a whole, and although there
are “strict procedural requirements on the approval of
a class settlement, a district court's only role in
reviewing the substance of that settlement is to ensure it is
‘fair, adequate, and free from collusion.'”
Lane, 696 F.3d at 818-19 (quoting Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998).
There are a number of factors guiding this review, including:
(1) the strength of the plaintiffs' case; (2) the risk,
expense, complexity, and likely duration of further
litigation; (3) the risk of maintaining class action status
throughout the trial; (4) the amount offered in settlement;
(5) the extent of discovery completed and the stage of the
proceedings; (6) the experience and views of counsel; (7) the
presence of a governmental participant; and (8) the reaction
of the class members to the proposed settlement. Id.
at 819. Courts within the Ninth Circuit “put a good
deal of stock in the product of an arms-length
[sic], non-collusive, negotiated resolution.”
Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 965
(9th Cir. 2009).
action settlements involve “unique due process concerns
for absent class members who are bound by the court's
judgments.” Radcliffe v. Experian Info. Solutions
Inc., 715 F.3d 1157, 1168 (9th Cir. 2013) (quotation
marks and citation omitted). When the parties negotiate the
settlement agreement before formal class certification, as in
this case, the court should engage in “an even higher
level of scrutiny for evidence of collusion or other
conflicts of interest than is ordinarily required under Rule
23(e).” Id. (quotation marks and citation
omitted). This more “exacting review” is
warranted “to ensure that class representatives and
their counsel do not secure a disproportionate benefit at the
expense of the unnamed plaintiffs who class counsel had a
duty to represent.” Lane, 696 F.3d at 819.
Ninth Circuit has recognized, however, that “[j]udicial
review also takes place in the shadow of the reality that
rejection of a settlement creates not only delay but also a
state of uncertainty on all sides, with whatever gains were
potentially achieved for the putative class put at
risk.” Staton v. Boeing Co., 327 F.3d 938, 952
(9th Cir. 2003). Thus, there is a “strong judicial
policy that favors settlements, particularly where complex
class action litigation is concerned.” In re
Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 556
(9th Cir. 2019) (en banc). (quoting Allen v.
Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015)).
Approval of Attorney's Fees and Expenses
for attorney's fees must be made by a motion pursuant to
Federal Rules of Civil Procedure 54(d)(2) and 23(h), and
notice of the motion must be served on all parties and class
members. Fed.R.Civ.P. 23(h). When settlement is proposed
along with a motion for class certification, notice to class
members of the fee motion ordinarily accompanies the notice
of the settlement proposal itself. Advisory Committee Notes
to Fed.R.Civ.P. 23(h). The deadline for class members to
object to requested fees must be set after the motion for the
fees and documents supporting the motion have been filed.
In re Mercury Interactive Corp. Sec. Litig., 618
F.3d 988, 993 (9th Cir. 2010). “Allowing class members
an opportunity thoroughly to examine counsel's fee
motion, inquire into the bases for various charges and ensure
that they are adequately documented and supported is
essential for the protection of the rights of class
members.” Id. at 994.
considering the amount of attorney's fees for class
counsel where there is a common fund, “courts have
discretion to employ either the lodestar method or the
percentage-of-recovery method.” In re Bluetooth
Headset Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir.
2011). Under either method, the court must exercise its
discretion to achieve a “reasonable” result.
Id. Because reasonableness is the goal,
“mechanical or formulaic application of either method,
where it yields and unreasonable result, can be an abuse of
discretion.” Fischel v. Equitable Life Assurance
Soc'y of the U.S., 307 F.3d 997, 1006 (9th Cir.
2002). When using the percentage method, 25 percent is the
“benchmark” fee award, but the Court may adjust
this amount upward or downward when “special
circumstances” warrant a departure. In re
Bluetooth, 654 F.3d at 942. Courts must place in the
record the relevant special circumstances. Id.
Factors that a court may consider in making such a departure
include: (1) the result obtained; (2) the effort expended by
counsel; (3) counsel's experience; (4) counsel's
skill; (5) the complexity of the issues; (6) the risks of
nonpayment assumed by counsel; (7) the reaction of the class;
(8) non-monetary or incidental benefits, including helping
similarly situated persons nationwide by clarifying certain
laws; and (9) comparison with counsel's lodestar. See
Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048-50 (9th
Cir. 2002); In re Heritage Bond Litig., 2005 WL
1594403, at *18 (C.D. Cal. June 10, 2005).
Final Certification of the Settlement Class
Notice to the Class
Court granted preliminary approval to the parties'
proposed notice procedure after the parties made certain
amendments to the notice requested by the Court. See
ECF 142, 143, 144, 145. The Court is satisfied that the
notice procedure was carried out according to the applicable
standards. The Court finds that notice of the Stipulation was
given to the Settlement Class by the best means practicable
under the circumstances, including mailing the Notice to
Class Members, posting the Notice, Proof of Claim,
Stipulation, and Preliminary Approval Order on a dedicated
website, and publishing the Summary Notice in
Investor's Business Daily and on PR
Notice provided Class Members with all required information
including, among other things: (1) a summary of the Action
and the claims asserted; (2) a clear definition of the
Settlement Class; (3) a description of the material terms of
the Stipulation; (4) the fact that no affirmative action was
needed to receive the benefit of class membership, but notice
that Class Members could opt out of the Settlement Class; (5)
an explanation of Class Members' opt-out rights, the date
by which Class Members must opt out, and information about
how to do so; (6) explaining the release of claims should
Class Members choose to remain in the Settlement Class; (7)
instructions about how to object to the Stipulation and the
deadline for Class Members to submit any objections; (8)
instructions about how to object to the requested
attorney's fees, expenses, and service awards and the
deadline for Class Members to submit any objections; (9) the
date, time, and location of the final approval hearing; (10)
the internet address for the settlement website and the
telephone number from which Class Members could obtain more
information on the Stipulation; (11) contact information for
the settlement administrator and the Court; and (12)
information about how Lead Counsel and the Class
Representative would be compensated. The notice is
sufficient. See Lane v. Facebook, Inc., 696 F.3d
811, 826 (9th Cir. 2012) (reaffirming that a class notice
need only “generally describe the terms of the
settlement in sufficient detail to alert those with adverse
viewpoints to investigate and to come forward and be
heard” (alteration in original) (quoting Rodriguez
v. W. Publ'g Corp., 563 F.3d 948, 962 (9th Cir.
form and method of notifying the Settlement Class fairly and
adequately advised Class Members of all relevant and material
information about the Action and the proposed Stipulation.
The Court finds that the notice satisfies the requirements of
due process and Rule 23 and the Private Securities Litigation
Reform Act of 1995, 15 U.S.C. § 78u-4, et seq.,
as amended (“PSLRA”).
move without objection to resolve this case as a settlement
class defined as:
all persons who held Blount common stock continuously from
March 4, 2016, the record date for voting on the Transaction,
through April 12, 2016, when the Transaction was completed.
Excluded from the Class are Defendants, the Purchasers, the
officers and directors of the Company at all relevant times,
members of the immediate families of the Individual
Defendants and their legal representatives, heirs, successors
or assigns, any entity in which Defendants have or had a
controlling interest, and any Person who timely and validly
seeks exclusion from the Class.
certify a settlement class, the requirements of Rule 23 of
the Federal Rules of Civil Procedure must be satisfied.
See Hanlon, 150 F.3d at 1019. Under Rule 23, the
plaintiff “must be prepared to prove” that each
of the requirements of the Rule is satisfied. Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Rule 23
sets forth more than a “mere pleading standard.”
Id. On the other hand, Rule 23 provides district
courts with broader discretion to certify a class than to
deny certification. See Abdullah v. U.S. Sec. Assocs.,
Inc., 731 F.3d 952, 956 (9th Cir. 2013).
seeking class certification must satisfy each of the
requirements of Rule 23(a) and at least one requirement of
Rule 23(b). Wang v. Chinese Daily News, Inc., 737
F.3d 538, 542 (9th Cir. 2013). Under Rule 23(a), a district
court may certify a class only if:
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law and fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly
and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a). In other words, a proposed class must
meet the requirements of numerosity, commonality, typicality,
and adequacy of representation. Mazza v. Am. Honda
Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012).
Rule 23 also requires, implicitly, that the members of the
proposed class be ascertainable based on objective criteria.
Ott v. Mortg. Inv'rs Corp. of Ohio, Inc., 65
F.Supp.3d 1046, 1064 (D. Or. 2014). Along with the five
requirements of Rule 23(a), the party seeking to maintain a
class action also must “satisfy through evidentiary
proof at least one of the provisions of Rule 23(b).”
Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013).
Rule 23 analysis is “rigorous” and may
“entail some overlap with the merits of the
plaintiff's underlying claim.” Wal-Mart,
564 U.S. at 351 (quotation marks omitted); Comcast
Corp., 569 U.S. at 33-34. This “rigorous”
review applies even when certification is for settlement
purposes only. See, e.g., In re Hyundai,
926 F.3d at 556. Still, Rule 23 “grants courts no
license to engage in free-ranging merits inquiries at the
certification stage.” Amgen Inc. v. Conn. Ret.
Plans & Trust Funds, 568 U.S. 455, 466 (2013).
“Merits questions may be considered to the extent-but
only to the extent-that they are relevant to determining
whether the Rule 23 prerequisites for class certification are
satisfied.” Id. A district court, however,
“must consider the merits if they overlap with
the Rule 23(a) requirements.” Ellis v. Costco
Wholesale Corp., 657 F.3d 970, 981 (9th Cir. 2011)
(emphasis in original).
parties agreed to certification of the class for settlement
purposes, and the Court previously agreed that the class met
the requisite factors in conditionally certifying the class
for settlement purposes in the preliminary approval of the
Stipulation. The Court, however, must now conduct a
“rigorous” analysis of the factors.
district, there is a “rough rule of thumb” that
40 class members is sufficient to meet the numerosity
requirement. Giles v. St. Charles Health Sys., Inc.,
294 F.R.D. 585, 590 (D. Or. 2013); see also Wilcox Dev.
Co. v. First Interstate Bank of Or., N.A., 97 F.R.D.
440, 443 (D. Or. 1983) (same); 1 McLaughlin on Class
Actions § 4:5 (15th ed.) (“The rule of thumb
adopted by most courts is that proposed classes in excess of
40 generally satisfy the numerosity requirement.”). The
claims administrator sent 5, 304 Notice packets to potential
Class Members and their Nominees. This shows that there
likely are thousands of Class Members. The Court finds that
the numerosity requirement is met.
satisfy the commonality requirement, Plaintiffs must show
that the class members suffered the “same
injury”-that their claims depend upon a “common
contention.” Wal-Mart, 564 U.S. at 350
(quotation marks omitted). “That common contention,
moreover, must be of such a nature that it is capable of
classwide resolution-which means that determination of its
truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.”
Id. Class members, however, need not have
every issue in common: commonality requires only
“a single significant question of law or fact” in
common. Mazza, 666 F.3d at 589; see also
Wal-Mart, 564 U.S. at 359. The Class Members have the
significant issues of law and fact in common, including
whether Defendants misstated or omitted material facts in
public statements and filings with the U.S. Securities and
Exchange Commission and whether Defendants violated
securities laws. See, e.g., In re Hot Topic,
Inc. Sec. Litig., 2014 WL 12462472, at *4 (C.D. Cal.
Nov. 3, 2014) (finding commonality in a case involving
similar allegations); In re VeriSign, Inc. Sec.
Litig., 2005 WL 7877645, at *5 (N.D. Cal. Jan. 13,
2005), amended sub nom. In re Verisign, Inc. Sec.
Litig., 2005 WL 226154 (N.D. Cal. Jan. 31, 2005) (noting
that “commonality ‘is easily met in cases where
class members all bought or sold the same stock in reliance
on the same disclosures made by the same parties, even when
damages vary'” (quoting Alba Conte & Herbert
Newberg, Newberg On Class Actions § 22:21 (4th ed.
2002))). Thus, the commonality requirement is satisfied.
the typicality requirement, Plaintiffs must show that the
named parties' claims or defenses are typical of the
claims or defenses of the class. Fed.R.Civ.P. 23(a)(3). Under
the “permissive standards” of Rule 23(a)(3), the
“representative's claims are ‘typical' if
they are reasonably co-extensive with those of absent class
members; they need not be substantially identical.”
Hanlon, 150 F.3d at 1020. “The purpose of the
typicality requirement is to assure that the interest of the
named representative aligns with the interests of the
class.” Hanon v. Dataproducts Corp., 976 F.2d
497, 508 (9th Cir. 1992). To determine whether claims and
defenses are typical, courts look to “whether other
members have the same or similar injury, whether the action
is based on conduct which is not unique to the named
plaintiffs, and whether other class members have been injured
by the same course of conduct.” Id. (quotation
marks omitted); see also Wolin v. Jaguar Land Rover N.
Am., LLC, 617 ...