JEROME J. SCHLICHTER (SBN 054513) 1 MICHAEL A. WOLFF ... · $25,000 each for class representatives Gary Grabek, Julie Spicer, Mark Geuder, and By: CASE NO. 06-CV-6213 AB (JCX) -1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

JEROME J. SCHLICHTER (SBN 054513) [email protected] MICHAEL A. WOLFF (admitted pro hac vice) [email protected] STEPHEN M. HOEPLINGER (admitted pro hac vice) [email protected] KURT C. STRUCKHOFF (admitted pro hac vice) [email protected] SCHLICHTER, BOGARD & DENTON LLP 100 South Fourth Street, Suite 1200 St. Louis, MO 63102 Telephone: (314) 621-6115 Facsimile: (314) 621-5934 Class Counsel for All Plaintiffs MARY ELLEN SIGNORILLE (admitted pro hac vice) [email protected] AARP Foundation Litigation 601 E Street NW Washington, DC 20049 Telephone: (202) 434-2060 Co-Counsel for Plaintiffs WILLIAM A. WHITE (SBN 121681) [email protected] HILL, FARRER & BURRILL LLP One California Plaza, 37th Floor 300 South Grand Avenue Los Angeles, CA 90071-3147 Telephone: (213) 620-0460 Facsimile: (213) 620-4840 Local Counsel for Grabek Plaintiffs

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

IN RE NORTHROP GRUMMAN

CORP. ERISA LITIGATION

This document applies to:

ALL ACTIONS

Master File No. 06-CV-6213 AB (JCx)

PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES, AND INCENTIVE AWARDS FOR CLASS REPRESENTATIVES Hon. André Birotte Jr.

Final approval hearing:

October 23, 2017, at 10:00 a.m.

Courtroom 7B

Case 2:06-cv-06213-AB-JC Document 783 Filed 08/24/17 Page 1 of 2 Page ID #:24894

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- PLA. MOT FOR ATTYS’ FEES

NOTICE OF MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT

OF EXPENSES, AND INCENTIVE AWARDS FOR CLASS

REPRESENTATIVES

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on October 23, 2017, at 10:00 a.m. in the 1st

Street Courthouse, Courtroom 7B, located at 350 W. 1st Street, Lost Angeles,

California 90012, Plaintiffs will move, and hereby do move, under Federal Rule of

Civil Procedure 23(h) for an award of attorneys’ fees of $5,583,333, reimbursement

of reasonable litigation costs and expenses of $1,159,114, and incentive awards of

$25,000 each for class representatives Gary Grabek, Julie Spicer, Mark Geuder, and

Dwite Russell. For the reasons explained in Plaintiffs’ accompanying

memorandum, these awards are reasonable and appropriate in this case.

This motion is made following the conference of counsel pursuant to L.R. 7-3,

which took place at various times between April 20 and May 23, 2017. Defendants

reserve their right to object to the requested fee award.

DATED: August 24, 2017 Respectfully submitted, By: /s/ Jerome J. Schlichter Jerome J. Schlichter (SBN 054513) Michael A. Wolff (admitted pro hac vice) Kurt C. Struckhoff (admitted pro hac vice) Stephen M. Hoeplinger (admitted pro hac vice) SCHLICHTER, BOGARD & DENTON LLP Class Counsel

Case 2:06-cv-06213-AB-JC Document 783 Filed 08/24/17 Page 2 of 2 Page ID #:24895

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



IN RE NORTHROP GRUMMAN CORPORATION ERISA LITIGATION.

THIS DOCUMENT RELATES TO: All Actions


MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES, AND INCENTIVE AWARDS FOR CLASS REPRESENTATIVES Hon. André Birotte Jr. Final approval hearing: October 23, 2017, at 10:00 a.m.

Courtroom 7B

Case 2:06-cv-06213-AB-JC Document 783-1 Filed 08/24/17 Page 1 of 36 Page ID #:24896

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -ii- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

Table of Contents

Table of Authorities .................................................................................................. iv

INTRODUCTION ..................................................................................................... 1

CASE HISTORY ....................................................................................................... 2

A. Pre-Filing investigation. ........................................................................ 2

B. The unusually complex pre-trial procedural history. ............................ 2

C. Mediations ............................................................................................. 5

D. Trial. ...................................................................................................... 5

E. SBD’s post-trial work on behalf of the class. ....................................... 7

ARGUMENT ......................................................................................................... 7

A. SBD should be awarded 1/3 of the settlement fund as attorney

fees. ....................................................................................................... 7

Standards for fee awards. ................................................................ 7 1.

The factors supporting a 1/3 fee award in this case. ....................... 9 2.

a. A 1/3 fee is the market rate for SBD’s services. .............. 9

b. SBD obtained an exceptional result for the Class. ......... 11

c. SBD expended enormous effort on behalf of the

Class. .............................................................................. 12

d. SBD’s skill and experience are unparalleled and

merit the 1/3 fee other courts have awarded. ................. 13

e. The issues in the case were novel and complex. ............ 18

f. SBD faced extreme risk of obtaining no

compensation at all. ........................................................ 19

g. At this point, only 1 class member has objected to

paying SBD a 1/3 fee. .................................................... 20

h. SBD’s requested 1/3 fee is much less than the

lodestar, no compensation at all for any of the

massive risk of this case. ................................................ 21


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -iii- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

B. The Court should award reimbursement of SBD’s costs. ................... 25

C. The Court should approve incentive awards to the Class

representatives. .................................................................................... 26

CONCLUSION ....................................................................................................... 28


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -iv- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

Table of Authorities

CASES

Abbott v Lockheed Martin Corp., No. 06-701, 2015 U.S.Dist.LEXIS 93206 (S.D.Ill. July 17, 2015) ............................................................................................. 9, 16, 22, 26, 27

Abbott v. Lockheed Martin Corp., 725 F.3d 803 (7th Cir. 2013) .............................................................................. 15

Aguilar v. Wawona Frozen Foods, No. 15-93, 2017 U.S.Dist.LEXIS 76751 (E.D.Cal. May 19, 2017) ................................................................................................................... 11

Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431 (E.D.Cal. 2013) ......................................................... 8, 10, 19, 25

Beck-Ellman v. Kaz USA, Inc., No. 10-2134, 2013 U.S.Dist.LEXIS 189308 (S.D.Cal. June 11, 2013) ................................................................................................................... 24

Beesley v. Int’l Paper Co., No. 06-703, 2014 U.S.Dist.LEXIS 12037 (S.D.Ill. Jan. 31, 2014) ......................................................................................................... 9, 16, 27

Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) .............................................................................................. 7

Bouman v. Block, 940 F.2d 1211 (9th Cir. 1991) ............................................................................ 21

Boyd v. Bank of Am. Corp., No. 13-561-DOC (JPRx), 2014 U.S.Dist.LEXIS 162880 (C.D.Cal. Nov. 18, 2014) ......................................................................... 8, 10, 13

Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir. 2009) .............................................................................. 12

Brink v. DaLesio, 667 F.2d 420 (4th Cir. 1982) .............................................................................. 12

Campbell v. Best Buy Stores, L.P., No. 12-7794-JAK(JEMx), 2016 U.S.Dist.LEXIS 184851 (C.D. Cal. Apr. 5, 2016) ............................................................................................... 19

Cervantez v. Celestica Corp., No. 07-729-VAP (OPx), 2010 U.S. Dist.LEXIS 78342 (C.D.Cal. July 6, 2010) ....................................................................................... 20

Chao v. Graf, No. 01-698, 2002 U.S.Dist.LEXIS 28329 (D.Nev. Feb. 1, 2002) ..................... 12

D’Emanuele v. Montgomery Ward & Co., 904 F.2d 1379 (9th Cir. 1990) ............................................................................ 24


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -v- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

Deaver v. Compass Bank, No. 13-222, 2015 U.S.Dist.LEXIS 166484 (N.D.Cal. Dec. 11, 2015) ......................................................................................................... 8, 11, 13

Donovan v. Bierwirth, 754 F.2d 1049 (2d Cir. 1985) ............................................................................. 12

Donovan v. Dillingham, 688 F.2d 1367 (11th Cir. 1982) .......................................................................... 12

Downey Surgical Clinic, Inc. v. OptumInsight, Inc., No. 09-5457- PSG(JCx), 2016 U.S.Dist.LEXIS 145000 (C.D.Cal. May 16, 2016) .............................................................................. 18, 23

Emmons v. Quest Diagnostics Clinical Labs., Inc., No. 13-474-DAD(BAMx), 2017 U.S.Dist.LEXIS 27249 (C.D.Cal. Feb. 24, 2017) .......................................................................... 8, 11, 25

Fox v. Vice, 563 U.S. 826 (2011) ........................................................................................... 24

Garcia v. Gordon Trucking, Inc., No. 10-324, 2012 U.S.Dist.LEXIS 160052 (E.D.Cal. Oct. 31, 2012) ............................................................................................................... 8, 19

George v. Kraft Foods Global, Inc., Nos. 08-3899, 07-1713, 2012 U.S.Dist.LEXIS 166816 (N.D.Ill. June 26, 2012) ................................................................................................. 9, 26

Gordan v. Mass. Mutual Life Ins. Co., No. 13-30184, Doc. 144 (D.Mass. Nov. 3, 2016) .................................... 9, 22, 24

Grabek v. Northrop Grumman Corp., 346 Fed.Appx. 151 (9th Cir. Sept. 28, 2009) ....................................................... 3

Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009) ........................................................................ 14, 19

Howard v. Shay, 100 F.3d 1484 (9th Cir. 1996) ............................................................................ 12

In re Gen. Instrument Sec. Litig., 209 F.Supp.2d 423 (E.D.Pa. 2001) ..................................................................... 25

In re Heritage Bond Litig., No. 02-ML-1475-DT(RCx) 2005 U.S.Dist.LEXIS 13627 (C.D.Cal. June 10, 2005) .................................................................................... 13

In re Heritage Bond Litig., No. 02-ML-1475-DT(RCx), 2005 U.S.Dist.LEXIS 13555 (C.D.Cal. June 10, 2005) .................................................. 8, 10, 11, 18, 19, 24, 25

In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) .............................................................. 8, 10, 26, 27


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -vi- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

In re Pacific Enters. Sec. Litig., 47 F.3d 373 (9th Cir. 1995) .............................................................................. 7, 8

In re Pub. Serv. Co., No. 91-536, 1992 U.S.Dist.LEXIS 16326 (S.D. Cal. July 28, 1992) ..................................................................................................................... 8

In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994) ............................................................ 19, 20, 21, 24

Ingalls v. Hallmark Retail, Inc., No. 08-4342-VBF (Ex), 2009 U.S.Dist.LEXIS 131078 (C.D.Cal. Oct. 16, 2009) ..................................................................................... 27

Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) .............................................................................. 18

Kanawi v. Bechtel Corp., No. 06-5566, Doc. 828 (N.D.Cal. Mar. 1, 2011) ......................................... 10, 26

Knight v. Red Door Salons, Inc., No. 08-1520, 2009 U.S.Dist.LEXIS 11149 (N.D.Cal. Feb. 2, 2009) ..................................................................................................................... 8

Krueger v. Ameriprise Fin., Inc., No. 11-2781, 2015 U.S.Dist.LEXIS 91385 (D.Minn. July 13, 2015) ......................................................................................................... 9, 15, 27

Kruger v. Novant Health, Inc., No. 14-208, Doc. 61 (M.D.N.C. Sept. 29, 2016) ............................... 9, 22, 24, 27

Loomis v. Exelon Corp., 658 F.3d 667 (7th Cir. 2011) .............................................................................. 14

Martin v. Caterpillar Inc., No. 07-1009, 2010 U.S.Dist.LEXIS 145111 (C.D.Ill. Sept. 10, 2010) ..................................................................................................................... 9

Martin v. Caterpillar, Inc., No. 07-1009, 2010 U.S.Dist.LEXIS 82350 (C.D.Ill. Aug. 12, 2010) ................................................................................................................... 18

Masimo Corp. v. Tyco Health Care Group, L.P., No. 02-4770-MRP (AJWx), 2007 U.S.Dist.LEXIS 101987 (C.D.Cal. Nov. 5, 2007) ..................................................................................... 23

Mogck v. Unum Life Ins. Co. of Am., 289 F.Supp.2d 1181 (S.D.Cal. 2003) ................................................................. 22

Morales v. City of San Rafael, 96 F.3d 359 (9th Cir. 1996) ................................................................................ 12

Multi-Ethnic Immigrant Workers Org. Network v. City of Los Angeles, No. 07-3072-AHM(FMMx), 2009 U.S.Dist.LEXIS 132269 (C.D.Cal. June 24, 2009) ...................................................................................... 9


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -vii- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

Nolte v. Cigna Corp., No. 07-2046, 2013 U.S.Dist.LEXIS 184622 (C.D.Ill. Oct. 15, 2013) ............................................................................................. 9, 16, 17, 26, 27

Pa. v. Del. Valley Citizens’ Council for Clean Air, 483 U.S. 711 (1987) ........................................................................................... 21

Powers v. Eichen, 229 F.3d 1249 (9th Cir. 2000) .......................................................................... 7, 8

Renfro v. Unisys Corp., 671 F.3d 314 (3d Cir. 2011) ......................................................................... 14, 19

Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) .............................................................................. 26

Romero v. Producers Dairy Foods, Inc., No. 05-0484, 2007 U.S. Dist.LEXIS 86270 (E.D.Cal. Nov. 14, 2007) ..................................................................................................................... 9

Singer v. Becton Dickinson & Co., No. 08-821, 2010 U.S.Dist.LEXIS 53416 (S.D.Cal. June 1, 2010) ................................................................................................................... 10

Spano v. Boeing Co., No. 06-743, Doc. 587 (S.D.Ill. Mar. 31, 2016) ...................... 9, 14, 16, 22, 26, 27

Stanger v. China Elec. Motor, Inc., 812 F.3d 734 (9th Cir. 2016) ................................................................................ 8

Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) ................................................................................ 7

Strickland v. Truckers Express, Inc., No. 95-62, 2007 U.S.Dist.LEXIS 10008 (D.Mont. Feb. 12, 2007) ................................................................................................................... 22

Tibble v. Edison Int’l, 135 S.Ct. 1823 (2015) ........................................................................................ 14

Tibble v. Edison Int’l, 843 F.3d 1187 (9th Cir. 2016) ...................................................................... 12, 14

Tibble v. Edison Int’l, No. 07-5359-SVW, Doc. 567 (C.D.Cal. Aug. 16, 2017) ................................... 15

Trujillo v. City of Ontario, No. 04-1015-VAP (SGLx), 2009 U.S.Dist.LEXIS 79309 (C.D.Cal. Aug. 24, 2009) ................................................................................... 27

Tussey v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014) .................................................................. 14, 15, 21

Tussey v. ABB, Inc., No. 06-04305, 2012 U.S.Dist.LEXIS 157428 (W.D.Mo. Nov. 2, 2012) ................................................................................................................... 15


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -viii- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

Tussey v. ABB, Inc., No. 06-4305, 2015 U.S.Dist.LEXIS 164818 (W.D.Mo. Dec. 9, 2015) ................................................................................................................... 16

Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482 (E.D.Cal. 2010) ..................................................................... 8, 25

Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) ............................................ 7, 8, 10, 11, 19, 21, 24

Will v. Gen. Dynamics Corp., No. 06-698, 2010 U.S.Dist.LEXIS 123349 (S.D.Ill. Nov. 22, 2010) ......................................................................................................... 9, 16, 27

STATUTES

29 U.S.C. §1104(a)(1) ............................................................................................... 6

29 U.S.C. §1106 ....................................................................................................... 18

29 U.S.C. §1106(a)(1)(C)–(D) .................................................................................. 6

29 U.S.C. §1106(b)(1)–(2) ........................................................................................ 6

REGULATIONS

29 CFR §2550.408b-2 ............................................................................................. 18

29 CFR §2550.408c-2 .............................................................................................. 18

RULES

Fed.R.Civ.P. 23(h) ..................................................................................................... 7

OTHER AUTHORITIES

Floyd Norris, What a 401(k) Plan Really Owes Employees, N.Y. Times (Oct. 16, 2014) ......................................................................................... 14

Gretchen Morgenson, A Lone Ranger of the 401(k)’s, N.Y. TIMES (Mar. 29, 2014) ................................................................................................... 16

Linda Stern, Stern Advice – How 401(k) Lawsuits Are Bolstering Your Retirement Plan, REUTERS (Nov. 5, 2013) ................................................. 16

Martha Neil, Top Partner Billing Rates at BigLaw Firms Approach $1,500 per ........................................................................................................... 23

Natalie Rodriguez, Meet the $2,000 an Hour Attorney, Law360 (June 11, 2015) ................................................................................................... 23

Richard Posner, Economic Analysis of Law (3d ed. 1986) .................................... 24


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- MEM. IN SUPP. OF PLA. MOT. FOR ATTYS’ FEES.

INTRODUCTION

Schlichter, Bogard & Denton LLP (SBD) requests that the Court award 1/3 of

the settlement fund in this case as its attorney fees. That is the percentage fee for

which the Plaintiffs contracted with SBD to prosecute this case and is the

percentage fee that numerous courts have awarded SBD in other ERISA fiduciary

breach cases that have resulted in settlements of similar (and larger) amounts. That

percentage fee also is amply justified by SBD’s work in this case. SBD devoted

nearly 25,500 hours of attorney and staff time over 11 years to bring this case to a

$16.75 million settlement in the midst of trial. At current market rates, the lodestar

fee for that time is over $16 million, without even adding a multiplier for the

staggering risk of this case as warranted. SBD seeks only $5,583,3331 in attorney

fees, less than 35% of the value of the total time it devoted to the successful

resolution of this case. The $16.75 million settlement is more than what Defendants

contended was the maximum amount Plaintiffs could ever recover if they

succeeded at trial. Given the tremendous results obtained after more than a decade

of work, an award from the settlement fund of $5,583,333 is fair and reasonable

compensation for SBD’s work, as many other courts have concluded.

In addition to their attorney fees award, SBD should receive reimbursement

from the settlement fund of $1,159,114 in out-of-pocket expenses it has expended

over the 11-year history of this case in obtaining this settlement. This is less than

SBD’s total expenses in this case, and is similar to the expenses that courts have

awarded to SBD in similar ERISA fiduciary breach settlements.

Finally, the Class representatives—Gary Grabek, Julie Spicer, Mark Geuder, and

Dwite Russell—each should receive $25,000 in incentive awards for the work they

provided in their perseverance representing the class, including attendance at

1 The $5,583,333 does not include local counsel’s fees, which SBD has already

paid and for which it does not seek reimbursement.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


deposition, mediations, and at trial, an amount which other courts have awarded in

similar cases.

CASE HISTORY

The long and contested 11-year history of this case from its commencement in

2006 to its settlement in 2017 demonstrates the extraordinary efforts that SBD put

in to obtain the outstanding settlement that benefits the Class and the

reasonableness of the fee award SBD seeks.

A. Pre-Filing investigation.

Plaintiffs commenced this case on September 28, 2006. Doc. 1.2 Before filing

this complaint, SBD spent months reviewing publicly filed documents related to the

Plans and investigating potential claims against Defendants. See Declaration of

Jerome J. Schlichter (“Schlichter Decl.”) ¶17. The Class representatives engaged

the services of SBD to prosecute this action under an agreement to pay SBD 1/3 of

the amounts recovered plus reimbursement of all expenses SBD incurred. Id. ¶20.

B. The unusually complex pre-trial procedural history.

Plaintiffs’ initial complaint was brought against the Administrative Committees

and the Investment Committees for the Northrop Grumman Savings Plan and the

Financial Security and Savings Program, J. Michael Hateley, Ian Ziskin, Dennis

Wootan, Ryan Hamlin, and Rose Mary Abelson, as well as Northrop Grumman

Corporation, the Northrop Grumman Corporation Compensation and Management

Development Committee of the Board of Directors, and various individual

directors. Doc. 1.

On February 28, 2007, Judge Real dismissed the initial complaint. Doc. 28.

Plaintiffs filed a first amended complaint on March 14, 2007. Doc. 43. On May 7,

2007, the Administrative Committees, the Investment Committees, Hateley, Ziskin,

Wootan, Hamlin, and Abelson answered that complaint. Doc. 59. Northrop

2 “Doc.” page references are to the ECF header page numbers. All Doc. cites are

hyperlinked.


https://ecf.cacd.uscourts.gov/doc1/031125667960





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Grumman and the other named defendants moved to dismiss the claims against

them. Doc. 61. Judge Real granted that motion. Doc. 64.

On June 22, 2007, Plaintiffs moved for class certification. Doc. 78. Judge Real

denied that motion on August 6, 2007, stating: “This case does not qualify under

[Rule 23], as the case is better taken care of by administrative agencies.” Doc. 102

at 2.

Plaintiffs obtained interlocutory review of that order from the Ninth Circuit,

with the Ninth Circuit staying proceedings in the district court while the appeal was

pending. Docs. 116, 117. The Ninth Circuit held that the “district court abused its

discretion by failing to make any findings whatsoever regarding the class

certification requirements articulated in [Rule] 23,” and remanded the case back for

further proceedings, noting that “this case appears to meet the requirements of

[Rules] 23(a) and (b).” Grabek v. Northrop Grumman Corp., 346 Fed.Appx. 151,

153 (9th Cir. Sept. 28, 2009)(Unpub. Disp.).

Upon remand from the Ninth Circuit, the case was reassigned to Judge Morrow.

Doc. 126. Plaintiffs then filed a renewed motion for class certification. Doc. 172.

The Court granted the motion on March 29, 2011, appointed Gary Grabek, Julie

Spicer, Mark Geuder, and Dwite Russell as Class representatives, and appointed

SBD as class counsel. Doc. 421.

In the course of this litigation, Defendants produced, and SBD reviewed, nearly

2.5 million pages of documents. Declaration of Stephen M. Hoeplinger

(“Hoeplinger Decl.”) ¶9. This was made more difficult by the myriad discovery

disputes between the parties. For example, Defendants initially refused to produce

committee meeting minutes and other documents without redactions of content

Defendants unilaterally determined to be irrelevant. SBD had to file a motion to

compel production of unredacted copies of these materials, which the Court

granted. Docs. 204, 255. The lengthy stay imposed as a result of Judge Real’s

denial of the class certification motion presented other unforeseen difficulties. The





https://ecf.cacd.uscourts.gov/doc1/03112266352?page=2#page=2









1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


parties initially had planned on a trial in June 2008, and Defendants had produced

documents responsive to Plaintiffs’ first set of requests for production only through

the date the complaint was filed (September 28, 2006). See Doc. 280-1 at 2–3. After

the stay was lifted on September 30, 2009, SBD sought additional documents from

the time after the complaint was filed, which Defendants refused to produce. Id. at

4; see also Doc. 261. The Court concluded that Plaintiffs were entitled to

documents dated up to May 11, 2009. Doc. 280-1 at 5. SBD also took 17

depositions of Defendants and non-parties, including experts. Hoeplinger Decl. ¶9.

On May 7, 2010, following review of Defendants’ document production,

Plaintiffs obtained leave to file a second amended complaint (subsequently revised),

which was the operative complaint in this case. Docs. 189, 332, 338.

On March 28, 2011, Defendants filed a massive motion for summary judgment

(Doc. 418), which Plaintiffs opposed (Doc. 500). Defendants’ motion was

supported by a 214-paragraph statement of uncontroverted facts, 8 declarations, and

236 exhibits. See Docs. 419, 440, and 459. SBD vigorously opposed this motion,

not only responding to each of Defendants’ facts, but submitting an additional 372

paragraphs of disputed facts supported by 4 declarations and 122 exhibits. Docs.

423, 424, 479. While the summary judgment motion was outstanding, the Court

stayed the case in February 2014 pending the outcome of Tibble v. Edison

International, another ERISA fiduciary breach action in this District. Doc. 534.

Following the Supreme Court’s unanimous decision favorable to the plaintiffs in

Tibble, 135 S.Ct. 1823 (2015), also handled by SBD, the Court issued its summary

judgment order on November 24, 2015. Doc. 606. The Court granted summary

judgment on Plaintiffs’ investment management fee claims related to two

investment options and their claims concerning the distribution of Plan assets to

Logicon, a Northrop subsidiary. Id. at 34–35, 45–48. In doing so, the Court

dismissed all claims against the Investment Committees, Hamlin, and Abelson. Id.

at 65. The Court denied Defendants’ motion as to claims against the Administrative



















1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Committees, Hateley, Ziskin, and Wootan. Id. at 48–49, 52–61, 65. Both Plaintiffs

and Defendants moved for reconsideration of parts of the Court’s summary

judgment order (Docs. 607, 611), which the Court denied (Doc. 643).

Given the over 4 ½ years the motion for summary judgment had been

outstanding, Plaintiffs moved to re-open the discovery period, the end date of which

had been set by Magistrate Judge Chooljian as May 11, 2009. Docs. 280-1, 644.

The Court denied Plaintiffs’ motion. Doc. 652.3 On July 11, 2016, the Court set trial

for March 14, 2017. Doc. 654.

C. Mediations

The parties attempted mediation on 3 separate occasions. The parties first met

for an all-day mediation with mediator Ronald Dean on March 8, 2011, before

Defendants moved for summary judgment, but could not reach a settlement. Doc.

402. The parties met for a second all-day mediation session on January 15, 2016 in

accordance with the Court’s order (Doc. 606 at 66), but likewise could not reach a

settlement. Doc. 618. The parties once again attempted to mediate their claims on

January 5, 2017 with mediator Margaret A. Levy, as ordered by the Court (Doc.

655), but still were unable settle the case. Doc. 677. SBD traveled for each of these

mediations, and Class representative Grabek traveled for 2 of them. Hoeplinger

Decl. ¶11.

D. Trial.

Plaintiffs designated 228 exhibits for potential use at trial, and 11 witnesses they

intended to call, including 2 experts. Defendants designated an additional 603 trial

exhibits and 11 witnesses, including 3 experts. Doc. 748. The parties also prepared

and submitted a Joint Stipulation of Facts (Doc. 715-1), Proposed Findings of Fact

and Conclusions of Law (Docs. 721-1 (Plaintiffs’—50 pages), 722-1

3 Following the Court’s denial of Plaintiffs’ motion to reopen discovery, a

separate group of class members filed a second action, Marshall v. Northrop Grumman Corp., No. 16-cv-6794 (C.D.Cal.), represented by SBD, to recover for fiduciary breaches after May 11, 2009. The claims in the Marshall are specifically excluded from the Release in this case.




















1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


(Defendants’—36 pages)), and memoranda of Contentions of Fact and Law (Docs.

688 (Plaintiffs’—17 pages), 689 (Defendants’—25 pages)). At trial, Plaintiffs

asserted 3 claims of fiduciary breach and prohibited transactions under 29 U.S.C.

§§1104(a)(1), 1106(a)(1)(C)–(D), and 1106(b)(1)–(2). Doc. 688 at 3 (Mem. 1). All

3 claims were based on the same facts—Northrop executives taking Plan assets to

offset corporate expenses. Id. at 5–12 (Mem. 3–10). Plaintiffs contended that the

Plans’ losses from the breaches were approximately $24 million. Id. at 7 (Mem. 5).

Defendants denied any liability. Doc. 689 at 12–24 (Mem. 4–16). Defendants

contended their maximum exposure if Plaintiffs succeeded in proving liability was

$10.5 million. Doc. 731 at 8–9 (Def. Tr. Br. 3:25–4:1).

Trial commenced on March 14, 2017. The next day Defendants presented the

Court with bench briefs contending that claims related to expenses Northrop

charged for IT and ITA expenses were barred by the Court’s summary judgment

order and that the Court should exclude any evidence regarding these payments.

Docs. 740, 741. These were contentions Defendants did not assert in their pre-trial

Memorandum of Contentions of Fact and Law (Doc. 689). Because the Court found

these contentions to be of prima facie merit, the Court allowed Plaintiffs to file an

opposing brief, which they did on March 17. Doc. 744.

Following opening statements, Plaintiffs examined, and Defendants cross-

examined, Class representatives Grabek, Spicer, and Geuder. Plaintiffs and

Defendants also examined J. Michael Hateley. After Hateley, Plaintiffs began their

examination of Dennis Wootan. Wootan’s examination was still in progress when

the Court recessed for the week on Thursday, March 16. Tr. 372:25–373:9 (Mar.

16, 2017 a.m., Doc. 778).

During the course of trial, the parties continued to work with Ms. Levy on a

potential pre-judgment resolution. On Sunday, March 19, the parties finally reached

a settlement in principle. Doc. 746. Ultimately, in settlement of this case, SBD

obtained a recovery for the Plans and the class of $16.75 million.














1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


E. SBD’s post-trial work on behalf of the class.

SBD continued to negotiate the details of the settlement for over 2 months. See

Docs. 750, 759, 762, 763. In addition to these negotiations, it solicited bids from

potential settlement administrators, coordinated with Defendants on obtaining

current contact information for all Class members, and responded to requests for

information from the independent fiduciary for its review of the settlement.

Hoeplinger Decl. ¶15. Based on its experience in other cases, SBD anticipates

spending an additional 50–100 attorney hours administering the settlement in the

next several months, including monitoring the settlement administrator, ensuring

that all payments are made to Class members in accordance with the settlement, and

answering inquiries from participants in a timely fashion. Id. ¶16.

ARGUMENT

A. SBD should be awarded 1/3 of the settlement fund as attorney fees.

Standards for fee awards. 1.

SBD is entitled to reasonable attorney fees and litigation expenses from the

$16.75 million common fund. Fed.R.Civ.P. 23(h); Staton v. Boeing Co., 327 F.3d

938, 967 (9th Cir. 2003)(quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478

(1980)).4 The Court has discretion over the amount of the fee to award, but must

provide its reasoning. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 (9th Cir.

2002); In re Pacific Enters. Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995). A district

court “abuses its discretion when it uses a mechanical or formulaic approach that

results in an unreasonable reward.” Powers v. Eichen, 229 F.3d 1249, 1256 (9th

Cir. 2000).

The Court can award a percentage of the settlement fund as the attorney fee so

4 “The doctrine rests on the perception that persons who obtain the benefit of a

lawsuit without contributing to its costs are unjustly enriched at the successful litigant’s expense.” Van Gemert, 444 U.S. at 478. “Jurisdiction over the fund involved in the litigation allows a court to prevent this inequity by assessing attorney’s fees against the entire fund, thus spreading fees proportionately among those benefited by the suit.” Id.






1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


long as that percentage is reasonable. Stanger v. China Elec. Motor, Inc., 812 F.3d

734, 738 (9th Cir. 2016); In re Online DVD-Rental Antitrust Litig., 779 F.3d 934,

953 (9th Cir. 2015). There is no requirement that the percentage fee be applied to

the settlement fund in gross or net of litigation expenses, so long as the fee award is

reasonable. Powers, 229 F.3d at 1258.5 Percentage fee arrangements are common in

this area of litigation. See Declaration of Thomas Theado (“Theado Decl.”) ¶16.

The benchmark percentage fee is 25%, but that benchmark is “a starting point

for analysis” that “may be inappropriate in some cases.” Vizcaino, 290 F.3d at

1048; see also Online DVD-Rental, 779 F.3d at 955 (“While the benchmark is not

per se valid, it is a helpful ‘starting point.”). The percentage that the Court awards

must be reasonable and “must be supported by findings that take into account all of

the circumstances of the case.” Vizcaino, 290 F.3d at 1048.

The Court can award a 1/3 fee, and has for settlements larger than this one, in

light of the complexity of the case and the risks undertaken by plaintiffs’ attorneys.

Pacific Enters., 47 F.3d at 379 (approving 1/3 fee from a $12 million fund);

Heritage Bond, 2005 U.S.Dist.LEXIS 13555, *58, 74 (awarding 1/3 fee from $27.8

million fund); In re Pub. Serv. Co., No. 91-536, 1992 U.S.Dist.LEXIS 16326, *19–

21 (S.D. Cal. July 28, 1992)(awarding 1/3 fee from $33 million settlement). Most

common fund fee awards exceed the 25% benchmark. Knight v. Red Door Salons,

Inc., No. 08-1520, 2009 U.S.Dist.LEXIS 11149, *17 (N.D.Cal. Feb. 2,

2009)(citations omitted). Class action fee awards average around 1/3. Id. (quoting

5 See also Emmons v. Quest Diagnostics Clinical Labs., Inc., No. 13-474-

DAD(BAMx), 2017 U.S.Dist.LEXIS 27249, *29 (C.D.Cal. Feb. 24, 2017) (awarding fee from gross settlement amount in addition to the reimbursement of expenses); Deaver v. Compass Bank, No. 13-222, 2015 U.S.Dist.LEXIS 166484, *46 (N.D.Cal. Dec. 11, 2015)(same); Boyd v. Bank of Am. Corp., No. 13-561-DOC (JPRx), 2014 U.S.Dist.LEXIS 162880, * 34 (C.D.Cal. Nov. 18, 2014)(same); Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 448, 55 (E.D.Cal. 2013)(same); Garcia v. Gordon Trucking, Inc., No. 10-324, 2012 U.S.Dist.LEXIS 160052, *32–33 (E.D.Cal. Oct. 31, 2012)(same);In re Heritage Bond Litig., No. 02-ML-1475-DT(RCx), 2005 U.S.Dist.LEXIS 13555, *74, 78 (C.D.Cal. June 10, 2005)(same); Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 493 (E.D.Cal. 2010)(same).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Romero v. Producers Dairy Foods, Inc., No. 05-0484, 2007 U.S. Dist.LEXIS

86270, *4 (E.D.Cal. Nov. 14, 2007)); see also Multi-Ethnic Immigrant Workers

Org. Network v. City of Los Angeles, No. 07-3072-AHM(FMMx), 2009

U.S.Dist.LEXIS 132269, *10–11 (C.D.Cal. June 24, 2009)(“Nationally, the average

percentage of the fund award in class actions is approximately [1/3].”).

The factors supporting a 1/3 fee award in this case. 2.

a. A 1/3 fee is the market rate for SBD’s services.

A 1/3 fee is what the Class representatives in this case agreed to (Schlichter

Decl. ¶20) and is what SBD has been awarded in numerous other ERISA fiduciary

breach actions that have resulted in settlement for similar and larger amounts. See

Gordan v. Mass. Mutual Life Ins. Co., No. 13-30184, Doc. 144 at 7 (D.Mass. Nov.

3, 2016)($33.9 million settlement); Kruger v. Novant Health, Inc., No. 14-208,

Doc. 61 at 14–17 (M.D.N.C. Sept. 29, 2016)($32 million settlement); Spano v.

Boeing Co., No. 06-743, Doc. 587 at 4 (S.D.Ill. Mar. 31, 2016)($57 million

settlement); Krueger v. Ameriprise Fin., Inc., No. 11-2781, 2015 U.S.Dist.LEXIS

91385, *8–9 (D.Minn. July 13, 2015)($27.5 million settlement); Abbott v Lockheed

Martin Corp., No. 06-701, 2015 U.S.Dist.LEXIS 93206, *7–8 (S.D.Ill. July 17,

2015)($62 million settlement); Beesley v. Int’l Paper Co., No. 06-703, 2014

U.S.Dist.LEXIS 12037, *7, 10 (S.D.Ill. Jan. 31, 2014)($30 million settlement);

Nolte v. Cigna Corp., No. 07-2046, 2013 U.S.Dist.LEXIS 184622, *7–9, 16

(C.D.Ill. Oct. 15, 2013)($35 million settlement); George v. Kraft Foods Global,

Inc., Nos. 08-3899, 07-1713, 2012 U.S.Dist.LEXIS 166816, *8–9, 16 (N.D.Ill. June

26, 2012)($9.5 million settlement); Will v. Gen. Dynamics Corp., No. 06-698, 2010

U.S.Dist.LEXIS 123349, *9, 13 (S.D.Ill. Nov. 22, 2010)($15.2 million settlement);

Martin v. Caterpillar Inc., No. 07-1009, 2010 U.S.Dist.LEXIS 145111, *9–11

(C.D.Ill. Sept. 10, 2010)($16.5 million settlement).

Only one court has awarded SBD less than a 1/3 fee, and that case is

distinguishable. Kanawi v. Bechtel Corp., No. 06-5566, Doc. 828 at 4 (N.D.Cal.


https://ecf.mad.uscourts.gov/doc1/09517746928

https://ecf.ncmd.uscourts.gov/doc1/13312503688

https://ecf.ilsd.uscourts.gov/doc1/06913454153

https://ecf.cand.uscourts.gov/doc1/03517775365

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Mar. 1, 2011)(awarding 30% fee). Kanawi did not consider any factors other than

those considered in Vizcaino, even though Vizcaino did not purport to state the

exclusive factors for a fee award. Online DVD-Rental, 779 F.3d at 955. Kanawi

provides little explanation for awarding SBD only 30% instead of 1/3 of the

settlement fund. Its analysis consists of 2 pages. The Kanawi settlement came after

the court granted almost entirely defendants’ motion for summary judgment.

Kanawi, No. 06-5566, Doc. 686 at 22. The settlement also came with no need for a

Ninth Circuit appeal of denial of class certification, no trial, and after just 4 1/2

years of litigation, which is less than half the life of this case. And it even

recognized that “[a] 25% fee award is below the market rate for similar cases.”

Kanawi, No. 06-5566, Doc. 828 at 3. Kanawi has no reasoning that would persuade

a court to contradict the decision in 10 other cases (8 of which came after Kanawi)

and award SBD less than 1/3 of the settlement fund.

This market rate for SBD’s work in other, similar ERISA fiduciary breach

actions is a significant factor supporting an award of the same 1/3 fee in this case.

Vizcaino, 290 F.3d at 1049. See also Boyd, 2014 U.S.Dist.LEXIS 162880, *28–29

(1/3 fee “within the range of percentages which courts have considered reasonable

in other [similar] class action lawsuits”); Barbosa, 297 F.R.D. at 450 (1/3 fee was

“commensurate with percentage-of-the-benefit awards made in other” similar

cases); Singer v. Becton Dickinson & Co., No. 08-821, 2010 U.S.Dist.LEXIS

53416, *22–23 (S.D.Cal. June 1, 2010)(1/3 fee “within the typical range of 20% to

50% awarded in similar cases).

There is no exclusive list of other factors that drives the Court’s determination

of the reasonableness of a fee award. Online DVD-Rental, 779 F.3d at 955. Other

factors are the results obtained for the class, the effort expended by counsel,

counsel’s skill and experience, the complexity of the issues, the risks of non-

payment assumed by counsel, the reaction of the class, and comparison with

counsel’s loadstar. Heritage Bond, 2005 U.S.Dist.LEXIS 13555, *60 (citing cases).




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Each of these factors also show that a 1/3 fee is reasonable here.

b. SBD obtained an exceptional result for the Class.

Obtaining exceptional results for the class is a relevant factor in determining the

reasonableness of a percentage fee award. Vizcaino, 290 F.3d at 1048. District

courts recognize this as “the most critical factor in granting a fee award.” Deaver,

2015 U.S.Dist.LEXIS 166484, *34; see also Heritage Bond, 2005 U.S.Dist.LEXIS

13555, *62–63 (noting factor “weighs strongly” in favor of 1/3 fee).

SBD obtained an exceptional result for the Class. Defendants contended that

their maximum exposure at trial was $10.5 million. Doc. 731 at 9 (Def. Tr. Br. 4:1).

The $16.75 million settlement—obtained only after 3 failed mediations and a week

of trial—is 160% of what Defendants saw as their maximum exposure. The $16.75

million settlement also is 70% of the $24 million that Plaintiffs claimed was

Defendants’ exposure at trial. Even after deducting SBD’s requested fees and costs,

the net payable to the Class ($10 million) is over 40% of the amount Plaintiffs

claimed at trial were the Plans’ losses and just under what Defendants claimed was

their maximum exposure. Courts recognize that such a result justifies an award of

1/3 of the settlement amount as attorney fees. See Aguilar v. Wawona Frozen

Foods, No. 15-93, 2017 U.S.Dist.LEXIS 76751, *13 (E.D.Cal. May 19,

2017)(settlement that “constituted at least 47%, if not 75%, of the total recovery”

justified 1/3 fee); Emmons, 2017 U.S.Dist.LEXIS 27249, *14–15, 20 ( $2.35

million settlement on $8.5 million in claimed damages (27.6%) justified 1/3 fee);

Deaver, 2015 U.S.Dist.LEXIS 166484, *22, 31, 34, 40 ($500,000 settlement of

$3,512,000 “potential liability” (14.2%) was a “very favorable” result justifying 1/3

fee); Heritage Bond, 2005 U.S.Dist.LEXIS 13555, *62–63 (settlement for 23% of

claimed losses, net of requested fees and costs, was a “significant result[]” that

“weigh[ed] strongly in favor of” awarding 1/3 fee).

Moreover, “[s]uccess is measured not only by the amount of the recovery but

also in terms of the significance of the legal issue on which the plaintiff prevailed



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


and the public purpose the litigation served.” Morales v. City of San Rafael, 96 F.3d

359, 365 (9th Cir. 1996). In enacting ERISA, Congress sought “to protect working

men and women from abuses in the administration and investment of private

retirement plans and employee welfare plans.” Donovan v. Dillingham, 688 F.2d

1367, 1370 (11th Cir. 1982); Chao v. Graf, No. 01-698, 2002 U.S.Dist.LEXIS

28329, *17–18 (D.Nev. Feb. 1, 2002). It recognized a clear “need to deter abuses”

in areas “where the temptation to misuse funds may be especially strong.” Donovan

v. Bierwirth, 754 F.2d 1049, 1055 (2d Cir. 1985)(citing Brink v. DaLesio, 667 F.2d

420, 427 (4th Cir. 1982)). As such, ERISA’s stringent duties are “the highest

known to the law.” Tibble v. Edison Int’l, 843 F.3d 1187, 1197 (9th Cir. 2016)(en

banc, quoting Howard v. Shay, 100 F.3d 1484, 1488 (9th Cir. 1996)). Indeed,

“Congress intended that private individuals would plan an important role in

enforcing ERISA’s fiduciary duties.” Braden v. Wal-Mart Stores, Inc., 588 F.3d

585, 598 (8th Cir. 2009). SBD’s work in this case not only provides financial

remuneration for the Class, but also protects important rights for all American

workers. That is especially so in this case, where Northrop executives were accused

of using their employees’ retirement assets to offset corporate benefits department

expenses. Indeed, the Ninth Circuit itself, while urging this Court to reconsider its

position on a separate fee request in an en banc decision in a 401(k) fiduciary

breach case last year, recognized “the significant amount of work” by SBD “to

vindicate an important ERISA principle.” Tibble, 843 F.3d at 1199.

c. SBD expended enormous effort on behalf of the Class.

As shown in the Case History above (at 2), SBD worked tirelessly and

relentlessly on behalf of the Class for nearly 11 years to obtain this settlement,

including attending 3 mediations. In those 11 years, SBD spent 23,498 attorney

hours and 2,999.7 paralegal and law clerk hours litigating this case. Declaration of

Sheri O’Gorman (“O’Gorman Declaration”) ¶4. That equals almost 12 years of an

attorney working full time on this case.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Before even filing this case, SBD spent over a year researching the complex area

of law and becoming expert in issues relating to retirement plans. Schlichter Decl.

¶14. SBD filed 3 complaints in this case, successfully appealed to the Ninth Circuit

the Court’s initial denial of class certification, obtained certification upon remand,

prevailed on the tried claims at the summary judgment stage, and was in trial of the

case when the parties reached the settlement. SBD reviewed millions of pages of

documents, took 17 depositions, and litigated numerous discovery motions. When

the Court would not reopen discovery so that damages information could be

brought up to date in light of the extended time between Defendants’ summary

judgment motion and the decision on it, SBD filed a second action in order to make

sure they could obtain a full recovery for the participants of the Northrop Grumman

retirement plan. See Marshall v. Northrop Grumman Corp., No. 16-6794

(C.D.Cal.). After unsuccessful efforts at mediation, SBD prepared for a trial that

was anticipated to include 16 live witnesses and potentially hundreds of exhibits.

Doc. 748. SBD’s extraordinary efforts justify an upward departure from the 25%

benchmark. See Deaver, 2015 U.S.Dist.LEXIS 166484, *34 (“a deviation from the

25 percent benchmark” was warranted “given that this case has survived multiple

motions to remand, dismiss, transfer venue, and a Ninth Circuit appeal”).

d. SBD’s skill and experience are unparalleled and merit the 1/3

fee other courts have awarded.

Courts award 1/3 fees in cases where class counsel “has significant experience

in the particular type of litigation at issue[.]”Id. at *35 (citing In re Heritage Bond

Litig., No. 02-ML-1475-DT(RCx) 2005 U.S.Dist.LEXIS 13627, *38–39 (C.D.Cal.

June 10, 2005)).6 This Court has found a 1/3 fee to be appropriate where “[c]ounsel

litigated effectively, and their experience was essential for obtaining the result” for

the class. Boyd, 2014 U.S.Dist.LEXIS 162880, *27.

6 Heritage Bond cites other cases that support this point. 2005 U.S.Dist.LEXIS

13627, *38.



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Before 2006, neither the Department of Labor nor any private firm had brought

a 401(k) ERISA fiduciary breach case. Spano, No. 06-743, Doc. 587 at 4. SBD

pioneered this area of law,7 and since then has been at the forefront of 401(k)

excessive fee litigation. Even in an ordinary ERISA fiduciary breach case,

establishing liability is exceedingly difficult. In 401(k) fiduciary breach cases, the

law was undeveloped, and even if plaintiffs proved a fiduciary breach, the issues of

causation and the proper measure of damages also were hotly contested. See Tussey

v. ABB, Inc., 746 F.3d 327, 339 (8th Cir. 2014). Moreover, Defendants successfully

obtained dismissal in 3 of the first 401(k) cases SBD brought. See Loomis v. Exelon

Corp., 658 F.3d 667 (7th Cir. 2011); Renfro v. Unisys Corp., 671 F.3d 314 (3d Cir.

2011); Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009). These early dismissals

emboldened defendants in all 401(k) fiduciary breach cases to vigorously resist any

case SBD brought, which SBD understood would happen when first committing to

bringing this case. As an example of the scope of resources defendants were willing

to devote, the defendants’ legal fees in Tussey, the only 401(k) fiduciary breach case

to ever go to a full trial, exceeded $42 million—through 2010 only. That does not

include fees paid to experts or other expenses, which were substantial, or legal fees

incurred in the nearly 5 years that case has been on appeal. Schlichter Decl. ¶17.

SBD successfully petitioned the U.S. Supreme Court to hear its first ERISA

fiduciary breach case over excessive fees and obtained a landmark, 9–0 decision in

favor of retirement plan participants interpreting ERISA’s statute of limitations in

their favor. Tibble v. Edison Int’l, 135 S.Ct. 1823 (2015). SBD also argued

successfully before the Ninth Circuit en banc for the application of the Supreme

Court’s principles in that case and obtained a reversal of the Ninth Circuit panel’s

dismissal of the plaintiffs’ claims. Tibble, 843 F.3d 1187. SBD tried the case for a

second time in this District in July, 2017. Last week, Judge Wilson issued Findings

7 Floyd Norris, What a 401(k) Plan Really Owes Employees, N.Y. Times (Oct. 16,

2014)(Hoeplinger Decl. Ex. 2, calling SBD “a pioneer” in ERISA fiduciary breach litigation).



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Of Fact And Conclusions Of Law in favor of the plaintiffs, ruling that the

defendants had caused over $7.5 million in damages to the plaintiffs’ retirement

plan, and that the amount should be increased by the plan’s return to the present in

order to make plaintiffs whole. Tibble v. Edison Int’l, No. 07-5359-SVW, Doc. 567

at 24 (C.D.Cal. Aug. 16, 2017).

Further, SBD established standards for class certification in the Seventh Circuit,

when that Circuit previously had rejected a class definition that had been accepted

in most other Circuits. Abbott v. Lockheed Martin Corp., 725 F.3d 803 (7th Cir.

2013). As indicated supra, SBD has obtained numerous settlements of ERISA

fiduciary breach actions for plan participants and obtained a judgment for millions

of dollars after a trial on the merits in Tussey, 746 F.3d at 339. To date, Tussey and

Tibble are the only 401(k) fiduciary breach cases to go to judgment after trial, and

SBD prevailed in both. Though these cases have reached judgment, they are still

pending, as they each have been through multiple appeals. No other law firm has

such expertise in this area of law. That unique expertise is what enabled SBD to

prosecute this case so effectively for 11 years and obtain the exceptional settlement

for this class.

Judges in other ERISA fiduciary breach cases settled by SBD have noted SBD’s

unique expertise. U.S. District Court Judge Susan R. Nelson, in approving a 1/3 fee

in another 401(k) fiduciary breach case, recognized that “litigating the complex

issues in [that] case required the attorneys to exercise extraordinary skill and

determination. In fact, another judge in this Circuit has noted that [SBD] are

‘experts in ERISA litigation.’” Krueger, 2015 U.S.Dist.LEXIS 91385, *6 (quoting

Tussey v. ABB, Inc., No. 06-04305, 2012 U.S.Dist.LEXIS 157428, *10 (W.D.Mo.

Nov. 2, 2012)). Judge G. Patrick Murphy recognized SBD’s exceptional efforts:

Schlichter, Bogard & Denton’s work throughout this litigation illustrates an

exceptional example of a private attorney general risking large sums of

money and investing many thousands of hours for the benefit of employees



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


and retirees. ... Class Counsel performed substantial work..., investigating the

facts, examining documents, and consulting and paying experts to determine

whether it was viable. ... Litigating the case required Class Counsel to be of

the highest caliber and committed to the interests of the participants and

beneficiaries of the General Dynamics 401(k) Plans.

Will, 2010 U.S.Dist.LEXIS 123349, at *8–9. Judge David R. Herndon similarly

noted that SBD “[l]itigat[ed] this case against formidable defendants and their

sophisticated attorneys,” which “required Class Counsel to demonstrate extraordi-

nary skill and determination.” Beesley, 2014 U.S.Dist.LEXIS 12037, *8. Judge

Harold A. Baker of the Central District of Illinois recognized SBD as the

“preeminent firm in 401(k) fee litigation,” noting that it has “invested such massive

resources and persevered in the face of the enormous risks of representing

employees and retirees in this area.” Nolte, 2013 U.S.Dist.LEXIS 184622, at *8.8

SBD’s efforts have also lowered costs for workers and retirees throughout the

United States. Judge Nanette Laughrey, who presided over the Tussey trial,

recognized SBD’s “significant, national contribution” in “clarify[ying] ERISA

standards in the context of investment fees.” Tussey v. ABB, Inc., No. 06-4305, 2015

U.S.Dist.LEXIS 164818, *7–8 (W.D.Mo. Dec. 9, 2015). “The litigation educated

plan administrators, the Department of Labor, the courts and retirement plan

participants about the importance of monitoring recordkeeping fees and separating a

fiduciary’s corporate interest from its fiduciary obligations.” Id.; see also Gretchen

Morgenson, A Lone Ranger of the 401(k)’s, N.Y. TIMES (Mar. 29, 2014)

(Hoeplinger Decl. Ex. 3, “The good news for all 401(k) holders is that [SBD’s]

cases are gaining traction in the courts.”); Linda Stern, Stern Advice – How 401(k)

Lawsuits Are Bolstering Your Retirement Plan, REUTERS (Nov. 5, 2013)(Hoeplinger

8 See also Abbott, 2015 U.S.Dist.LEXIS 93206, at *4 (noting SBD’s “exceptional

commitment and perseverance in representing employees and retirees seeking to improve their retirement plans”); Spano, Doc. 587 at 5 (“Schlichter, Bogard & Denton added great value to the Class throughout the litigation through the persistence and skill of their attorneys.”).



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Decl. Ex. 4, fee litigation brought by SBD has had a “humongous” impact,

according to CEO of 401(k) plan analysis firm Brightscope, Inc.). And in Nolte,

another case involving 401(k) fiduciary breaches in which the court awarded SBD a

1/3 fee, the court observed:

Class Counsel’s enforcement of ERISA’s fiduciary obligations has contribut-

ed to rapid reductions in the level of 401(k) recordkeeping fees paid across

the country. The law firm Schlichter, Bogard & Denton is the leader in

401(k) fee litigation. One independent investment advisory company, NEPC,

has found that 401(k) recordkeeping fees have dropped $38 per account per

year since Class counsel filed their first 401(k) fee cases in 2006. They

attribute the fee reductions to improved fee disclosure requirements from the

Department of Labor and attention brought by 401(k) fee litigation. The

Department of Labor reports an estimated 73 million accounts in the United

States. Accordingly, the fee reduction attributed to Schlichter, Bogard &

Denton’s fee litigation and the Department of Labor’s fee disclosure

regulations approach $2.8 billion in annual savings for American workers

and retirees.

2013 U.S.Dist.LEXIS 184622, *5–6 (emphasis added)(internal citations omitted).

Karen Ferguson, Director of the Pension Rights Center, based on her 4 decades

of experience advocating for retirees’ interests and monitoring of 401(k) plan

ERISA fiduciary breach litigation over the past 11 years, has stated that this $16.75

million settlement could not have been achieved by any other firm. See Declaration

of Karen Ferguson ¶22; see also Theado Decl. ¶15 (“No other law firm in the

United States has the depth and experience in excessive fee cases as [SBD].”). That

expertise and the exceptional result that expertise obtained justifies awarding SBD

1/3 of the settlement amount, as has been done in each of the 11 settlements SBD

has obtained in this space save one (Kanawi), which lasted less than half the time of

this case, had no successful appeal of class certification, and did not reach trial or


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


require trial preparation.

e. The issues in the case were novel and complex.

“Courts have recognized that the novelty, difficulty and complexity of the issues

involved are significant factors in determining a fee award.” Heritage Bond, 2005

U.S.Dist.LEXIS 13555, *66 (citing Johnson v. Georgia Highway Express, Inc., 488

F.2d 714, 718 (5th Cir. 1974)). ERISA 401(k) fiduciary breach class actions are

extremely complex, uncertain, sharply contested, and often protracted (as shown by

this case’s decade-plus duration). See Theado Decl. ¶15 (describing ERISA class

action litigation as “arduous, complex, and arcane”). They require a willingness by

counsel to risk very significant amounts of time and money. Id. ¶12. ERISA

excessive fee litigation is “not only dependent on the statute but also on various

regulations that implement ERISA,” and thus is “relatively unique with limited case

authority in support.” Martin v. Caterpillar, Inc., No. 07-1009, 2010

U.S.Dist.LEXIS 82350, *7 (C.D.Ill. Aug. 12, 2010). As this Court has recognized,

“given the transient nature of standing ERISA law,” ERISA cases “require[] highly

skilled counsel who could understand the complexity of the law and adapt case law

accordingly.” Downey Surgical Clinic, Inc. v. OptumInsight, Inc., No. 09-5457-

PSG(JCx), 2016 U.S.Dist.LEXIS 145000, *32 (C.D.Cal. May 16, 2016). Other than

the cases previously prosecuted by SBD, there are no reported cases with similar

facts. Thus, this was for the most part unprecedented litigation, apart from the

precedents that SBD set.

This case specifically involved prohibited transactions claims under 29 U.S.C.

§1106 for which there are few reported cases at all and no reported cases directly on

point. It involved detailed and complex regulations (29 CFR §§2550.408b-2,

2550.408c-2) and DOL advisory opinions on which there were no reported cases.

See, e.g., Plaintiffs’ Proposed Findings Of Fact And Contentions Of Law, Doc.

721-1 at 31–39 (¶¶30–72). Plaintiffs proposed 133 paragraphs of conclusions of




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


law, further evidence of the legal complexity of this case alone.9 The parties’ 104-

page list of over 800 exhibits also marks this as an exceptionally complex case. See

Doc. 725. As in Heritage Bond, the complexity and novelty of this case justifies a

1/3 fee. 2005 U.S.Dist.LEXIS 13555, *68.

f. SBD faced extreme risk of obtaining no compensation at all.

That a case was “fraught with risk and recovery was far from certain” is a

relevant factor that must be considered in a fee award. Vizcaino, 290 F.3d at 1048

(quoting In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1302 (9th

Cir. 1994)). The risk of non-payment after years of hard-fought litigation “weighs

substantially in favor of approval of” an award of a 1/3 fee. Campbell v. Best Buy

Stores, L.P., No. 12-7794-JAK(JEMx), 2016 U.S.Dist.LEXIS 184851, *20 (C.D.

Cal. Apr. 5, 2016); see also Barbosa, 297 F.R.D. at 449 (“Like this case, where

recovery is uncertain, an award of one-third of the common fund as attorneys’ fees

has been found to be appropriate.”); Garcia, 2012 U.S.Dist.LEXIS 160052, *28–29

(awarding 1/3 fee where “[c]lass [c]ounsel undertook considerable financial risks in

this litigation by accepting this case on a contingency basis,” and “[t]here was no

guarantee they would recoup their fees or the substantial costs involved”). Indeed,

the fact that no other firm filed a 401(k) excessive fee case before SBD did is a

testament to the staggering risk in bringing such novel cases. Defendants won

outright in some of the first 401(k) cases SBD brought. See, e.g., Hecker, 556 F.3d

575; Renfro, 671 F.3d 314. The novelty and complexity of this case (and ERISA

fiduciary breach cases like it generally) shows that success and recovery of any fees

in this case, which has taken 11 years to complete, was extremely uncertain.

Defendants asserted substantial defenses to each of Plaintiffs’ claims. SBD

continued on even after this Court granted Defendants’ initial motion to dismiss,

after it initially denied Plaintiffs’ motion for class certification, and after it partially

granted Defendants’ motion for summary judgment. Decision on summary

9 The Court’s summary judgment order itself was 66 pages long. Doc. 606.




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


judgment itself was delayed for over 4 years pending the Supreme Court’s decision

in Tibble, which directly affected Plaintiffs’ claims and resulted in denial of part of

Defendants’ summary judgment motion. See Docs. 534, 606 at 3, 50–53.

Counsel has borne and has continued to carry the costs of this litigation for over

10 years even before trial began. And even then, prevailing at trial was far from

certain, as “trials of class actions are inherently risky and unpredictable

propositions.” Cervantez v. Celestica Corp., No. 07-729-VAP (OPx), 2010 U.S.

Dist.LEXIS 78342, *10 (C.D.Cal. July 6, 2010). It was very possible that SBD

would not receive any compensation for the work it performed over the last decade.

As the Ninth Circuit has recognized, without being fully compensated for “the risks

of receiving nothing,” “very few lawyers could take on the representation of a class

client given the investment of substantial time, effort, and money.” W.P.P.S., 19

F.3d at 1300 (internal quotation marks and citations omitted). The simple fact here

is that no one took on that risk in any 401(k) fiduciary breach case in the U.S.

before SBD brought this case.

g. At this point, only 1 class member has objected to paying SBD

a 1/3 fee.

On August 14, 2017, the settlement administrator issued to class members

approximately 210,000 notices of this settlement and SBD’s request for a 1/3 fee.

Hoeplinger Decl. ¶18. Before that, SBD announced in the Plaintiffs’ Memorandum

In Support Of Motion For Preliminary Approval Of Class Settlement (June 12,

2017) its intention to seek a 1/3 fee, plus expenses. Doc. 766 at 13–14 (Mem. 8–9).

At least one article, dated June 12, 2017, states that the proposed settlement

“authorizes [SBD] to seek [1/3] of the settlement amount—$5.8 million—as

attorneys’ fees.”10

SBD also published a website,

www.northrop401ksettlement.com, containing the settlement for Class members to

access and review. O’Gorman Decl. ¶6. As of the filing of this motion, SBD has

10

https://www.bna.com/northrop-grumman-settles-n73014453171/ (hyperlinked).





http://www.northrop401ksettlement.com/

https://www.bna.com/northrop-grumman-settles-n73014453171/

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


been in contact with over 300 Class members, and only 1 has given notice that they

object to the requested fee award. Hoeplinger Decl. ¶18. Even if other Class

members object to this fee award, the other factors discussed herein

overwhelmingly demonstrate any such objections would be unfounded.

h. SBD’s requested 1/3 fee is much less than the lodestar, no

compensation at all for any of the massive risk of this case.

A lodestar calculation “measures the lawyers’ investment of time in the

litigation” and “provides a check on the reasonableness of the percentage award.”

Vizcaino, 290 F.3d at 1050.11

As indicated above, SBD has spent over 23,000

attorney hours and nearly 3,000 paralegal and support staff hours on this case.

O’Gorman Decl., ¶4.12

At the stale blended rate of $514.60 per hour approved in

Tussey, 746 F.3d at 340–41, SBD would be entitled to $12,092,070 for its attorneys

alone. The 1/3 fee requested here is less than half of that.

A proper lodestar calculation uses an attorney’s rates at the time of the fee

award, rather than rates at the time the case was initiated. “Full compensation

requires charging current rates for all work done during the litigation, or by using

historical rates enhanced by an interest factor.” W.P.P.S., 19 F.3d at 1305 (using

historical rates “inadequately compensate[s] [a] firm for the delay in receiving its

fees”); see also Bouman v. Block, 940 F.2d 1211, 1235 (9th Cir. 1991)(affirming

use of current hourly rate “to compensate for the delay in receiving payment,”

citing Pa. v. Del. Valley Citizens’ Council for Clean Air, 483 U.S. 711, 716

(1987)); Strickland v. Truckers Express, Inc., No. 95-62, 2007 U.S.Dist.LEXIS

11

Under the lodestar method, the Court “must start by determining how many hours were reasonably expended on the litigation, and then multiply those hours by the prevailing local rate for an attorney of the skill required to perform the litigation.” Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008).

12 Defendants’ prevailing on some claims at summary judgment does not warrant

a reduction in the number of hours used to calculate the lodestar. The $16.75 million settlement is for a release of “all actual or potential” claims raised in this case (Doc. 765-1 §2.39), including those that were dismissed and would have been appealed had the case not settled. There is thus no justification for denying SBD reimbursement for its work related to dismissed claims.



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


10008, *21–22 (D.Mont. Feb. 12, 2007)(calculating lodestar with current rates “to

compensate [plaintiffs’ attorneys] for the delay attended this protracted [11-year]

litigation”). More recently SBD has been awarded higher hourly rates in

recognition of the change in rates since Tussey. Last year, courts in the Middle

District of North Carolina, the District of Massachusetts, and the Southern District

of Illinois all found that SBD was entitled under a lodestar analysis to

compensation at the following hourly rates: $998 for attorneys with at least 25

years of experience; $850 for attorneys with 15–24 years of experience; $612 for

attorneys with 5–14 years of experience; $460 for attorneys with 2–4 years of

experience; and $309 for paralegals and clerks. Kruger, No. 14-208, Doc. 61 at 12–

13; Gordan, No. 13-30184, Doc. 144 at 6 (approving the “reasonable rates

suggested by counsel”); Gordan, No. 13-30184, Doc. 120 at 29–30 (Br. 24–25)

(same rates as Kruger); Spano, Doc. 587, at 6–7.13

At the 2016 rates approved by

federal judges for SBD’s time in handling 401(k) fiduciary breach cases, the

lodestar would be $15,606,423.30.

However, attorney billing rates increase year to year. LexisNexis CounselLink’s

Enterprise Legal Management Trends Report shows that in 2016, partner billing

rates nationwide increased by an average of 3%. Hoeplinger Decl. Ex. 1 at 13. For

litigation attorneys, the average rate increased by 3.5%. Id. at 15. In Los Angeles,

rates increased by an average of just under 5%. Id. at 12. Kruger and Gordan based

their hourly rates on the rates found appropriate earlier that year in Spano, Doc.

587, at 6–7, which in turn were a 3% increase over rates approved the prior year in

Abbott, 2015 U.S.Dist.LEXIS 93206, *12. Thus, a 3% increase in the hourly rate

over what courts found appropriate last year is reasonable. For 2017, appropriate

hourly rates for ERISA class action attorneys and staff would be: $1,027.94 for

13

A national rate is appropriate because “ERISA cases involve a national standard, and attorneys practicing ERISA law in the Ninth Circuit tend to practice in different districts.” Mogck v. Unum Life Ins. Co. of Am., 289 F.Supp.2d 1181, 1191 (S.D.Cal. 2003).








1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


attorneys with at least 25 years of experience; $875.50 for attorneys with 15–24

years of experience; $630.36 for attorneys with 5–14 years of experience; $473.80

for attorneys with 0–4 years of experience; and $318.27 for paralegals and law

clerks.

Those rates are in line with, if not slightly below, the rates of highly skilled

attorneys nationwide. It has become commonplace for leading attorneys to charge

much higher rates than those above—up to $1,500 per hour14

—and rates for

attorneys in specialized fields have reached $2,000 per hour.15

The Honorable

Mariana R. Pfaelzer of this Court previously found—10 years ago—that rates of up

to $1,000 per hour are reasonable for top trial attorneys who “offer[] clients abilities

and a skill set that are largely unique and particularly valuable in a case of this

complexity.” Masimo Corp. v. Tyco Health Care Group, L.P., No. 02-4770-MRP

(AJWx), 2007 U.S.Dist.LEXIS 101987, *18–19 (C.D.Cal. Nov. 5, 2007). ERISA is

a field in which top attorneys command top rates, as heightened skill and labor are

“required to adequately address complex issues of ERISA law.” Downey Surgical

Clinic, 2016 U.S.Dist.LEXIS 145000, *31. SBD is the preeminent firm in this field

and brought this type of action when no one else would or ever had. The rates are

therefore reasonable, given the specialized area of law, SBD’s creation of the field

of 401(k) fiduciary breach litigation, and its skill, reputation, and expertise.

At current rates, then, SBD’s total attorney time in this case would be worth

over $16 million on a lodestar basis ($16,074,616). And that is without applying a

14

Martha Neil, Top Partner Billing Rates at BigLaw Firms Approach $1,500 per Hour, ABA Journal (Feb. 8, 2016)(Hoeplinger Decl. Ex. 5, “Although a billable rate of $1,000 per hour was newsworthy only five years ago, top partners at the nation’s biggest and best-known corporate law firms are now billing at rates nudging $1,500 per hour.”).

15 Natalie Rodriguez, Meet the $2,000 an Hour Attorney, Law360 (June 11,

2015)(Hoeplinger Decl. Ex. 6, “It was just five years ago that the industry was stunned by the Wall Street Journal revelation that some top-tier attorneys had broken the $1,000 per hour benchmark. Then, earlier this year, BTI Consulting Group found that a handful of in-house counsel had paid as much as $2,000 per hour, after discounts, to attorneys in the past year. Several other in-house counsel, meanwhile, had paid highs of $1,900 per hour or $1,800 per hour.”).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


lodestar multiplier to compensate SBD for the risk it faced in litigating this case, as

courts routinely do. W.P.P.S., 19 F.3d at 1299–1300 (“It is an established practice

in the private legal market to reward attorneys for taking the risk of non-payment

by paying them a premium over their normal hourly rates for winning contingency

cases,” citing Richard Posner, Economic Analysis of Law §21.9, at 534–35 (3d ed.

1986)); D’Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1384 (9th Cir.

1990)(lodestar multiplier appropriate where “payment for the attorney’s services is

contingent upon success and the attorney bears the risk of nonpayment in case of

failure”). The Ninth Circuit has approved lodestar calculations with multipliers up

to 3.65. Vizcaino, 290 F.3d at 1051. Courts in other 401(k) fiduciary breach cases

likewise have approved lodestar multipliers greater than 3. See Gordan, No. 13-

30184, Doc. 144 at 6 (3.66 multiplier was “eminently reasonable” where SBD

“faced a high risk of non-payment, not only in light of the novel nature of this case

but also in light of the dismissals in other cases”); Kruger, No. 14-208, Doc. 61 at

14–15 (3.69 multiplier was “within the range of reasonableness” where SBD

“assumed significant risk of nonpayment, particularly in light of the novel nature of

this case and adverse precedents”). SBD is requesting just under $6 million, which

represents less than 35% of the lodestar with no multiplier at all for risk.16

A fee of 1/3 of the settlement fund thus is eminently reasonable under a lodestar

analysis. A request “for substantially less recovery [than the lodestar value] is

indicia that the fee amount requested is reasonable.” Heritage Bond, 2005 U.S.

Dist.LEXIS 13555, *73; see also Beck-Ellman v. Kaz USA, Inc., No. 10-2134, 2013

U.S.Dist.LEXIS 189308, *26 (S.D.Cal. June 11, 2013)(requested fee that was

“actually less than the lodestar, representing only 88% of the calculated value” was

16

These calculations are approximations. Even in cases of awards of attorney fees against defendants on a lodestar basis, the Supreme Court has pointed out that calculating attorney fees should not “result in a second major litigation,” with “green-eyeshade” accounting, but instead need only do “rough justice” in deciding the fee to award. Fox v. Vice, 563 U.S. 826, 838 (2011)(quotation marks and citations omitted).




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


reasonable).

All of the factors that apply to determining a reasonable percentage fee to award

to SBD confirm that 1/3 of the settlement fund is reasonable, as concluded by all

courts but 1 that have addressed the same question in similar cases. The Court

therefore should grant SBD 1/3 of the settlement fund as its attorney fees in this

case.

B. The Court should award reimbursement of SBD’s costs.

SBD has incurred $1,159,114 in expenses in litigating this case for the past

decade, and carried those for the duration of the case. That amount does not include

other expenses it has incurred but for which it does not seek reimbursement.

O’Gorman Decl. ¶3 (SBD not seeking reimbursement for 1 expert who was

withdrawn and 1 who did not testify). “There is no doubt that an attorney who has

created a common fund for the benefit of the class is entitled to reimbursement of

reasonable litigation expenses from that fund.” Heritage Bond 2005

U.S.Dist.LEXIS 13555, *75 (quoting In re Gen. Instrument Sec. Litig., 209

F.Supp.2d 423, 434 (E.D.Pa. 2001)); Barbosa, 297 F.R.D. at 454 (citing Vasquez,

266 F.R.D at 493); Emmons, 2017 U.S.Dist.LEXIS 27249, *23–24; Alba Conte, 1

Attorney Fee Awards §2:19 (3d ed.). Expenses reimbursable from a common fund

include expert fees, travel, long-distance and conference telephone, postage,

delivery services, and computerized legal research. Conte §2:19; Emmons, 2017

U.S.Dist.LEXIS 27249, *23–24 (identifying reimbursable costs). That is what the

expenses submitted here cover. O’Gorman Decl. ¶2.

Counsel brought this case without guarantee of reimbursement or recovery, and

thus had a strong incentive to limit costs. They did so. Given the complexity of this

case, the costs incurred necessarily were substantial, but consistent with what would

be expected in a case of this magnitude. A description of these costs and expenses,

broken down by category, is contained in ¶2 of the Declaration of Sheri O’Gorman

filed herewith. The costs and expenses are the types of costs and expenses that are


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


routinely reimbursed by paying clients, such as experts’ fees, deposition expenses,

travel, and photocopying costs.

A comparison to expense reimbursements awarded in other similar cases

underscores the reasonableness of the expense request here. Like this case, SBD

filed Abbott, No. 06-701 (S.D.Ill.) and Spano, No. 06-743 (S.D.Ill.) in September

2006. Both reached settlement just before trial in 2015 and 2016, respectively.

Thus, SBD had been litigating them for nearly a decade. The court in each case

approved much greater expenses than SBD seeks here. See Spano, No. 06-743,

Doc. 587 at 7, 9 ($1.8 million); Abbott, 2015 U.S.Dist.LEXIS 93206, *12–13, 15

($1.6 million). SBD’s requested $1.16 million reimbursement here also is

comparable to expense reimbursements awarded in other 401(k) fiduciary breach

cases in which SBD has obtained settlements. See Nolte, 2013 U.S.Dist.LEXIS

184622, *3, 14 ($928,045 after 6 years of litigation); George, 2012 U.S.Dist.LEXIS

166816, *4, 13–14 ($1.49 million after 6 years); Kanawi, No. 06-5566, Doc. 828 at

4–5 ($1.5 million).

SBD has borne these expenses for close to 11 years, but does not seek interest

for the time value of this money or the costs associated with advancing these

expenses to the Class. In light of the length and complexity of this litigation, SBD’s

request for reimbursement of costs and expenses is fair and reasonable.

C. The Court should approve incentive awards to the Class

representatives.

“Incentive awards that are intended to compensate class representatives for work

undertaken on behalf of a class are fairly typical in class actions.” Online DVD-

Rental, 779 F.3d at 943 (internal quotation marks and citation omitted). Such

awards recognize class representatives’ “willingness to act as a private attorney

general.” Rodriguez v. West Publishing Corp., 563 F.3d 948, 959 (9th Cir. 2009).

Gary Grabek, Julie Spicer, Mark Geuder, and Dwite Russell have been active

participants in this litigation, spending significant time to benefit the Class. They




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


came forward to initiate this action, undertook substantial risk of having to pay

Defendants’ costs if this case failed, and remained in contact with SBD throughout

the litigation. They responded to document requests and interrogatories, reviewed

and approved pleadings, and assisted with discovery, including sitting for

depositions. Mr. Grabek, Ms. Spicer, and Mr. Geuder traveled from their homes in

the Midwest to Los Angeles to attend and monitor the trial and help protect the

interests of all class members.17

Mr. Grabek also contributed to the resolution of

this matter by attending 2 mediation sessions (1 in California, 1 in New York),

which required him to travel from his home in Illinois. Hoeplinger Decl. ¶11.

The $25,000 award SBD requests for each of the Class representatives is only

.15% of the total settlement fund, and combined are only .60%. The Ninth Circuit

and this Court have approved similar incentive awards. Online DVD-Rental, 779

F.3d at 948 (approving incentive awards that were “a mere .17% of the total

settlement fund”); Ingalls v. Hallmark Retail, Inc., No. 08-4342-VBF (Ex), 2009

U.S.Dist.LEXIS 131078, *6 (C.D.Cal. Oct. 16, 2009)(awarding total of $60,000 to

6 named plaintiffs out of $5.625 million settlement (1.06%)). Indeed, this Court has

approved much larger total awards. Trujillo v. City of Ontario, No. 04-1015-VAP

(SGLx), 2009 U.S.Dist.LEXIS 79309, *13–14 (C.D.Cal. Aug. 24, 2009)($30,000

each to 6 class representatives, plus $10,000 to 10 other plaintiffs). Other courts in

which SBD have obtained similar settlements have provided class representatives

$25,000 awards. Kruger, No. 14-208, Doc. 61 at 18; Spano, No. 06-743, Doc. 587

at 8–9; Abbott, 2015 U.S.Dist.LEXIS 93206, *14–15; Krueger, 2015

U.S.Dist.LEXIS 91385, *10–11; Beesley, 2014 U.S.Dist.LEXIS 12037, *13–14;

Nolte, 2013 U.S.Dist.LEXIS 184622, *14–16; Will, 2010 U.S.Dist.LEXIS 123349,

*12–13.

//

17

Mr. Russell could not do so because of his medical condition. Tr. 9:13–16 (Mar. 14, 2017 a.m., Doc. 776).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


CONCLUSION

For the foregoing reasons, Plaintiffs request that the Court approve a fee award

of $5,583,000 and a cost award of $1,159,114 to Class Counsel, Schlichter, Bogard

& Denton LLP, and incentive awards of $25,000 to Class representatives Gary

Grabek, Julie Spicer, Mark Geuder, and Dwite Russell.

DATED: August 24, 2017 Respectfully submitted, By: /s/ Jerome J. Schlichter____________ Jerome J. Schlichter (SBN 054513) Michael A. Wolff (admitted pro hac vice) Kurt C. Struckhoff (admitted pro hac vice) Stephen M. Hoeplinger (admitted pro hac vice) SCHLICHTER BOGARD & DENTON LLP Class Counsel


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28






ALL ACTIONS


DECLARATION OF JEROME J.

SCHLICHTER

DATE: October 23, 2017

TIME: 10:00 a.m.

Courtroom 7B – 7th floor

Hon. André Birotte Jr.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- DECL. OF JEROME J. SCHLICHTER

I, Jerome J. Schlichter, under penalty of perjury pursuant to 28 U.S.C. §1746,

declare as follows:

1. I am the founding partner of the law firm of Schlichter, Bogard &

Denton LLP, counsel for the Plaintiffs. This declaration is submitted in support of

Plaintiffs’ Motion for Attorneys’ Fees and Reimbursement of Expenses and for

Case Contribution Awards for Named Plaintiffs. I am familiar with the facts set

forth below and able to testify to them.

2. I received my Bachelor’s degree in Business Administration from the

University of Illinois in 1969, with honors and was a James Scholar. I received my

Juris Doctorate from the University of California at Los Angeles (UCLA) Law

School in 1972, where I was an Associate Editor of UCLA Law Review. I am

licensed to practice law in the states of Missouri, Illinois, and California, and am

admitted to practice before the Supreme Court of the United States, the Third, Fifth,

Seventh, Eighth, and Ninth Circuit Courts of Appeal and numerous U.S. District

Courts. I have also been an Adjunct Professor teaching trials at Washington

University in St. Louis School of Law, and have been repeatedly selected by my

peers for the list of The Best Lawyers in America.

3. Through over 40 years of practice, I have handled, on behalf of

plaintiffs, substantial personal injury, civil rights class actions, mass torts and

fiduciary breach litigation under the Employee Retirement Income Security Act

(ERISA). In 2007, I was ranked number 3 in a list of the 100 most influential

people nationally in the 401(k) industry in the industry publication 401(k) Wire.

Examples of class cases I have successfully handled include: Brown v. Terminal

Railroad Association, a race discrimination case in the Southern District of Illinois

on behalf of all African-American and Hispanic employees at a railroad; Mister v.

Illinois Central Gulf Railroad, 832 F.2d 1427 (7th Cir. 1987), a failure-to-hire class

action brought on behalf of hundreds of African-American applicants from East St.

Louis, Illinois at a major railroad, which was tried to conclusion, successfully


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


appealed to the Seventh Circuit Court of Appeals, and finally resulted with more

than $10 million for the class after 12-and-a-half years of litigation; Wilfong v.

Rent-A-Center, No. 00-680-DRH (S.D.Ill. 2002), a nationwide gender

discrimination in employment case on behalf of women, which was successfully

settled for $47 million and substantial affirmative relief to the class of thousands,

after defeating the defendant’s attempt to conduct a reverse auction.

4. My firm has been named Class Counsel in numerous cases involving

claims of fiduciary breaches in large 401(k) Plans. See, e.g., Gordan v. Mass.

Mutual Life Ins. Co., No. 13-30184, Doc. 112 (D.Mass. June 22, 2016)

(preliminarily certifying for purposes of settlement); Kruger v. Novant Health, Inc.,

No. 14-208, Doc. 53 (M.D.N.C. May 17, 2016)(same); Kreuger v. Ameriprise Fin.,

Inc., 304 F.R.D. 559, 574 (D.Minn. 2014); Abbott v. Lockheed Martin, No. 06-701,

Doc. 403 (S.D.Ill. Aug. 1, 2014); Beesley v. Int’l Paper Co., No. 06-703, Doc. 542

(S.D.Ill. Oct. 10, 2013); Spano v. Boeing Co., No. 06-743, Doc. 397 (S.D.Ill. Sept.

19, 2013); Nolte v. Cigna Corp., No. 07-2046, 2013 U.S. Dist. LEXIS 101165, 6–7

(C.D.Ill. July 3, 2013); Martin v. Caterpillar Inc., No. 07-1009, Doc. 173 (C.D.Ill.

April 21, 2010); George v. Kraft Foods Global Inc., 251 F.R.D. 338, 351–52

(N.D.Ill. 2008); Taylor v. United Tech. Corp., No. 06- 1494, 2008 U.S. Dist.

LEXIS 43655, 15 (D.Conn. June 3, 2008); Kanawi v. Bechtel Corp., 254 F.R.D.

102, 111–12 (N.D.Cal. 2008); Tussey v. ABB Inc., No. 06- 305, 2007 U.S. Dist.

LEXIS 88668, 32 (W.D.Mo. Dec. 3, 2007); Loomis v. Exelon Corp., No. 06-4900,

2007 U.S. Dist. LEXIS 46893, 11 (N.D.Ill. June 26, 2007); and Will v. General

Dynamics, No. 06-698, 2010 U.S.Dist.LEXIS 95630, 5–6 (S.D.Ill. Nov. 22, 2010).

In addition, Schlichter, Bogard & Denton has been named Interim Class Counsel in

Cates v. Trustees of Columbia University in the City of New York, No. 16-6524,

Doc. 78 (S.D.N.Y. Feb. 8, 2017).

5. My work in plaintiffs’ class action cases has been taken note of by

federal judges. U.S. District Judge James Foreman, in the Mister case, supra,


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


speaking of my efforts, stated: “This Court is unaware of any comparable

achievement of public good by a private lawyer in the face of such obstacles and

enormous demand of resources and finance.” Order on Attorney’s Fees, Mister v.

Illinois Central Gulf R.R., No. 81-3006 (S.D. Ill. 1993). District Judge David R.

Herndon wrote, regarding my handling of the Wilfong class action supra:

Class counsel has appeared in this court and has been known to this Court for

approximately 20 years. This Court finds that Mr. Schlichter’s experience,

reputation and ability are of the highest caliber. Mr. Schlichter is known well

to the District Court Judge and this Court agrees with Judge Foreman’s

review of Mr. Schlichter’s experience, reputation and ability.

Order on Attorney’s Fees, Wilfong v. Rent-A-Center No. 0068-DRH (S.D.Ill. 2002).

6. Judge Herndon also noted in Wilfong that I “performed the role of a

‘private attorney general’ contemplated under the common fund doctrine, a role

viewed with great favor in this Court” and described my action as “an example of

advocacy at its highest and noblest purpose.” Id.

7. In Beesley v. International Paper, another ERISA excessive fee case,

Judge Herndon observed: “Litigating this case against formidable defendants and

their sophisticated attorneys required Class Counsel to demonstrate extraordinary

skill and determination. Schlichter, Bogard & Denton and lead attorney Jerome

Schlichter’s diligence and perseverance, while risking vast amounts of time and

money, reflect the finest attributes of a private attorney general.” Beesley v. Int’l

Paper Co., No. 06-703-DRH, 2014 U.S. Dist. LEXIS 12037, *8 (S.D.Ill. Jan. 31,

2014).

8. In another ERISA excessive fee case, Will v. General Dynamics, Judge

Murphy found that the litigating the case and achieving a successful result for the

class “required Class Counsel to be of the highest caliber and committed to the

interests of the participants and beneficiaries of the General Dynamics 401(k)


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Plans.” Will v. General Dynamics Corp., No. 06-698-GPM, 2010 U.S. Dist. LEXIS

123349, *9 (S.D. Ill. Nov. 22, 2010).

9. Judge Baker, in Nolte v. Cigna, commented that Schlichter, Bogard &

Denton is the “preeminent firm in 401(k) fee litigation” and has “persevered in the

face of the enormous risks of representing employees and retirees in this area.”

Nolte v. Cigna Corp., Case No. 07-2046, Doc. 413 at 5 (C.D.Ill. Oct. 15, 2013).

10. Judge Laughrey, who presided over the only full trial of an excessive

fee case, Tussey v. ABB, Inc., has recognized “the significant national contribution

made by the Plaintiffs whose litigation clarified ERISA standards in the context of

investment fees. The litigation educated plan administrators, the Department of

Labor, the courts and retirement plan participants about the importance of

monitoring recordkeeping fees and separating a fiduciary’s corporate interest from

its fiduciary obligations.” Tussey v. ABB, Inc., No. 06-4305, 2015 U.S.Dist.LEXIS

164818, *7–8 (W.D.Mo. Dec. 9, 2015), vacated and remanded on other grounds,

850 F.3d 951 (8th Cir. 2017).

11. Schlichter, Bogard & Denton also litigated the landmark Tibble v.

Edison International. Tibble is the only 401(k) excessive fee case ever taken up by

the Supreme Court, which delivered a 9-0 decision affirming that retirement plan

fiduciaries have a duty to continue monitoring investment options for suitability

even after their initially selection for inclusion in the plan. 135 S.Ct. 1823 (2015).

Last year, following remand from the Supreme Court, the Ninth Circuit recognized

in an en banc decision “the significant amount of work” Schlichter, Bogard &

Denton had done “to vindicate an important ERISA principle.” Tibble v. Edison

Int’l, 843 F.3d 1187, 1197 (9th Cir. 2016)(en banc). My firm commenced the

second trial in Tibble in this District this past July, and last week, this Court issued

findings of fact and conclusions of law holding that the defendants had breached

their fiduciary duty, causing damages to participants of more than $7.5 million—


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


before interest. Tibble v. Edison Int’l, No. 06-5359-SVW(AGRx), Doc. 567, *24

(C.D.Cal. Aug. 16, 2017).

12. I have also spoken on ERISA litigation breach of fiduciary duty claims

at national ERISA seminars as well as other national bar seminars.

13. In the decades of my private practice, I have never been sanctioned or

otherwise disciplined with respect to any aspect of the practice of law.

14. Since 2005, my firm and I have been investigating, preparing and

handling, on behalf of plan participants, numerous cases against fiduciaries in large

401(k) cases alleging fiduciary breaches including excessive fees, conflicts of

interests and prohibited transactions under ERISA. My firm has filed these cases in

numerous judicial districts throughout the United States, including districts within

the First, Second, Third, Fourth, Seventh, Eighth, and Ninth Circuits. With respect

to this case, Schlichter, Bogard & Denton spent months researching the retirement

plans at issue, including by reviewing publicly-filed documents, and investigating

potential claims against the Defendants in this case before the complaint was filed

in 2006.

15. In all but one retirement plan excessive fee case my firm has brought,

the presiding judges have found that my firm earned a one-third contingency fee.

The only other case, Bechtel v. Kanawi Corp., differed substantially from this one.

In Bechtel, settlement was reached after summary judgment was granted largely in

favor of the defendants. No. 06-5566, Doc. 686, at 22 (N.D.Cal. Nov. 3, 2008).

Bechtel also settled after just 4 and a half years, less than half the time this case has

lasted. And unlike this case, Bechtel did not involve a successful appeal of a denial

of class certification or intense preparation for trial. And yet the Bechtel court still

found that the firm’s work warranted an upward departure from the Ninth Circuit’s

25% “benchmark” and awarded a 30% fee. No. 06-5566, Doc. 828, at 5 (N.D.Cal.

Mar. 1, 2011).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


16. No law firm brought a 401(k) ERISA fiduciary breach case before my

firm first did so in 2006, the year this case was filed. No other law firm has brought

the number of cases my firm has brought, one of which was the first full trial of

such a case, resulting in a judgment for the plaintiffs that was affirmed in part by

the Eighth Circuit. Tussey v. ABB, Inc., No. 06-4305, 2012 U.S.Dist.LEXIS 45240

(W.D. Mo. Mar. 31, 2012), aff’d in part, rev’d in part, 746 F.3d 327 (8th Cir.

2014). As Judge Laughrey noted in that case, “[i]t is well established that complex

ERISA litigation involves a national standard and specialized expertise. Plaintiffs’

attorneys are clearly experts in ERISA litigation.” Tussey v. ABB, Inc., No. 06-

04305, 2012 U.S.Dist.LEXIS 157428, 9–10 (W.D.Mo. Nov. 2, 2012)(citations

omitted).

17. In the years after 2006, several of the 401(k) cases my office filed

were dismissed and the dismissals upheld by the Courts of Appeals. Hecker v.

Deere & Co., 556 F.3d 575 (7th Cir. 2009); Loomis v. Exelon Corp., 658 F.3d 667

(7th Cir. 2011); Renfro v. Unisys Corp., 671 F.3d 314 (3d Cir. 2011). Others had

summary judgment granted against the plaintiffs in whole or in part. Kanawi v.

Bechtel Corp., 590 F. Supp. 2d 1213 (N.D.Cal. 2008); Taylor v. United Techs.

Corp., No. 06-3194, 2009 U.S.Dist.LEXIS 19059 (D.Conn. Mar. 3, 2009), aff’d,

354 Fed. Appx. 525 (2d Cir. 2009); George v. Kraft Foods Global, Inc., 684

F.Supp.2d 992 (N.D.Ill. 2010), rev’d in part, 641 F.3d 786 (7th Cir. 2011). These

early court decisions emboldened defendants in other 401(k) fiduciary breach cases

to mount a vigorous defense, with the intent to stifle any and all litigation, and to

also cause great financial distress to my firm. As an example of this, it is a matter of

public record that the defendants’ legal fees through trial in Tussey v. ABB, Inc.

were $42.5 million. That does not even include money paid to experts, other

litigation expenses, or legal fees incurred in the nearly 5 years that case has been on

appeal.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


18. In my opinion, the $16.75 million settlement is a positive result for the

Class. This is supported by Defendants’ position that the Plans suffered no more

than $10.5 million in losses. Doc. 731 at 9:1; see also Docs. 740 and 741.

19. As a practical matter, litigants such as Gary Grabek, Julie Spicer, Mark

Geuder, and Dwight Russell could not afford to pursue litigation against well-

funded fiduciaries of a multi-billion dollar plan sponsored by a large employer such

as Northrop Grumman in federal court on any basis other than a contingent fee. I

know of no law firm in the United States, of the very few firms which would even

consider handling such a case as this or that would handle any ERISA class action,

with an expectation of anything but a percentage of the common fund created.

20. The contingency fee agreements entered into between my firm and the

Named Plaintiffs in this case provide for our fee to be one-third of any recovery

plus expenses. The plaintiffs in other ERISA fiduciary breach cases brought by my

firm have also signed similar agreements calling for a one-third contingency fee

plus expenses.

21. These kinds of cases involve tremendous risk, require finding and

obtaining opinions from expensive, unconflicted, consulting and testifying experts

in finance, investment management, and related fields, and are extremely hard

fought and well- defended.

22. Before we filed this case, virtually no firm was willing to bring such a

case, and I know of no other firm that has made the financial and attorney

commitment to such cases to this date.

23. Based on my experience, the market for experienced and competent

lawyers willing to pursue 401(k) ERISA Fee Litigation is a national market, and the

rate of 33 1/3% of any recovery, plus costs is necessary to bring such cases. This is

the rate that a qualified and experienced attorney would negotiate at the beginning

of the litigation, and the rate found reasonable in similar 401(k) ERISA fee cases in

numerous Federal District Courts, including:


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Gordan v. Mass Mutual Life Ins. Co., No. 13-30184, Doc. 144 at 7 (D.Mass.

Nov. 3, 2016);

Kruger v. Novant Health, Inc., No. 14-208, Doc. 61 at 14–17 (M.D.N.C.

Sept. 29, 2016);

Spano v. Boeing Co., No. 06-cv-743, Doc. 587 at 4 (S.D.Ill. Mar. 31, 2016);

Krueger v. Ameriprise Fin., Inc., No. 11-2781, 2015 U.S.Dist.LEXIS 91385,

*8–9 (D.Minn. July 13, 2015);

Abbott v Lockheed Martin Corp., No. 06-701, 2015 U.S.Dist.LEXIS 93206,

*7–8 (S.D.Ill. July 17, 2015);

Beesley v. Int’l Paper Co., No. 06-703, 2014 U.S.Dist.LEXIS 12037, *7, 10

(S.D.Ill. Jan. 31, 2014);


(C.D.Ill. Oct. 15, 2013);

George v. Kraft Foods Global, Inc., Nos. 08-3899, 07-1713, 2012 U.S.Dist.

LEXIS 166816, *8–9, *16 (N.D.Ill. June 26, 2012);

Will v. Gen. Dynamics Corp., No. 06-698, 2010 U.S.Dist.LEXIS 123349, *9,

13 (S.D.Ill. Nov. 22, 2010); and,

Martin v. Caterpillar Inc., No. 07-1009, 2010 U.S.Dist.LEXIS 145111, *9–

11 (C.D.Ill. Sept. 10, 2010).

24. Schlichter, Bogard & Denton does not bill clients on an hourly basis.

However, in September 2016, based on the national market for complex ERISA

fiduciary breach litigation, Judge William L. Osteen of the Middle District of North

Carolina found that a fee rate of up to $998 per hour, depending on years of

attorney experience, was a reasonable national hourly rate for Class Counsel’s time.

Kruger v. Novant Health, Inc., No. 14-208, Doc. 61 at 13 (M.D.N.C. Sept. 29,

2016)(finding that the “appropriate” rate at that time was $998/hour for attorneys

with at least 25 years of experience, $850/hour for attorneys with 15–24 years of

experience, $612/hour for attorneys with 5–14 years of experience, $460/hour for


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


attorneys with 2–4 years of experience, $309/hour for Paralegals and Law Clerks,

and $190/hour for Legal Assistants). These approved 2016 rates were the same as

the rates approved in Spano v. Boeing Co., No. 06-743, Doc. 587, at 6–7 (S.D.Ill.),

which were in turn based on a 3% increase of the rates approved in another 401(k)

fee case settled in 2015. Abbott v. Lockheed Martin Corp., 2015 U.S.Dist.LEXIS

93206 (S.D. Ill. July 17, 2015).

I declare under penalty of perjury that the foregoing is true and correct to the

best of my knowledge and belief.

Executed on August 24, 2017.

/s/ Jerome J. Schlichter

Jerome J. Schlichter


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

JEROME J. SCHLICHTER (SBN 054513) [email protected] MICHAEL A. WOLFF (admitted pro hac vice) [email protected] STEPHEN M. HOEPLINGER (admitted pro hac vice) [email protected] KURT C. STRUCKHOFF (admitted pro hac vice) [email protected] SCHLICHTER, BOGARD & DENTON LLP 100 South Fourth Street, Suite 1200 St. Louis, MO 63102 Telephone: (314) 621-6115 Facsimile: (314) 621-5934 Class Counsel for All Plaintiffs

MARY ELLEN SIGNORILLE (admitted pro hac vice) [email protected] AARP Foundation Litigation 601 E Street NW Washington, DC 20049 Telephone: (202) 434-2060 Co-Counsel for Plaintiffs

WILLIAM A. WHITE (SBN 121681) [email protected] HILL, FARRER & BURRILL LLP One California Plaza, 37th Floor 300 South Grand Avenue Los Angeles, CA 90071-3147 Telephone: (213) 620-0460 Facsimile: (213) 620-4840 Local Counsel for Grabek Plaintiffs


IN RE NORTHROP GRUMMAN CORP. ERISA LITIGATION

This document applies to: ALL ACTIONS


DECLARATION OF KAREN W. FERGUSON




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- DECL. OF KAREN W. FERGUSON

I, Karen Ferguson, hereby declare as follows:

1. I make this declaration of my personal knowledge, and if called as a

witness, I could and would testify competently to the facts stated herein. I am not

being compensated for my time in providing this declaration and I do not have any

financial stake in the outcome of the above-referenced litigation.

2. I am the Director of the Pension Rights Center (the “Center”). I am a

graduate of Bryn Mawr College and Harvard Law School. Before starting at the

Center in 1976, I was an attorney with the National Labor Relations Board, Bell,

Boyd & Lloyd, the Public Interest Research Group, and the UMWA Health and

Retirement Funds. I am also co-author of Pensions in Crisis: Why the System is

Failing America and How You Can Protect Your Future.

3. The Center is a national Washington, D.C. based nonprofit,

nonpartisan consumer organization that has been working for forty-one years to

protect and promote the retirement security of American workers, retirees, and their

families. The Center provides legal and strategic advice on retirement income

issues, and helps individuals communicate their concerns about these issues to

policymakers, courts, and the public. The Center is committed to helping to ensure

that retirement plan assets are invested prudently and exclusively for the benefit of

participants and their beneficiaries.

4. In 1974, a federal private pension law, the Employee Retirement

Income Security Act (“ERISA) was enacted by Congress. The primary purpose of

ERISA was to protect workers’ and retirees’ reasonable expectations and promises

in their traditional defined benefit pension plans.

5. Before the enactment of ERISA, many employees and retirees were

losing their pension benefits as the result of mismanagement of plan assets

inadequate funding of plans, and inequitable rules.

6. The Center’s initial mission was to help people understand their rights

under ERISA and to ensure that those rights were fully implemented by federal


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


agencies. However, it quickly became evident that there were many shortcomings

in the new law. The Center proceeded to identify and document these problems and

then used its technical know-how to develop legislative solutions. Working with

affected individuals and in coalition with women’s organizations, labor unions, and

retiree groups, we secured the enactment of a series of major reform laws.

7. Starting in the mid-1980’s there was a sea change in the American

retirement system. There was an explosive growth in the use of 401(k) plans, first

alongside traditional pension plans, and, in the last two decades, in place of pension

plans. Today, there are over 5 trillion dollars invested in 401(k) plans. These plans

have presented new challenges. Unlike traditional defined benefit pension plans that

generally guarantee a specific amount at the time of retirement, defined

contribution plans, such as 401(k) plans, do not provide a guaranteed benefit.

Rather, the amount accumulated in a person’s 401(k) account is dependent on the

amounts contributed and investment earnings net of fees. In a pension plan the

employer’s money is at risk, while in a 401(k) plan it is the employee’s money that

is at risk. In a 401(k) plan, if fees are high or investments are imprudent, the

employee pays the price.

8. Although a participant can, to some extent, affect the amount of assets

in her 401(k) plan, such as the level of contributions she makes, many factors

beyond her control impact the amount of assets in her retirement plan. Those

factors include, among other things, the fiduciary’s selection and retention of

prudent investments in the 401(k) plan and the level of administrative and

investment fees charged to the 401(k) plan.

9. Including only prudent investments a 401(k) plan and ensuring that

fees paid by participants are no higher than necessary is a vital function of any

fiduciary’s duties under ERISA.

10. Over the last thirty years, the Center has devoted considerable

attention to improving 401(k) plan outcomes. The Center has testified before


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Congress and federal agencies concerning 401(k) fees and fiduciary

responsibilities. Examples include the Center’s testimony on disclosure of 401(k)

fees before the Senate Committee on Health, Education, Labor, and Pensions, and

on conflicted investment advice before the Department of Labor. Center staff have

written fact sheets and blogs on 401(k) fee and other fiduciary issues, have been

quoted in the national media, and have filed amicus briefs on 401(k)-related issues

in the Supreme Court.

11. In recent years, the Center has become aware of the groundbreaking

role the law firm of Schlichter, Bogard & Denton, LLP has played in ensuring that

401(k) plan fiduciaries comply with and satisfy their responsibilities under ERISA.

12. Despite the critical role that 401(k) plans play in America’s private

retirement system, and the fact that ERISA requires fees to be reasonable, no law

firm had ever brought a case for excessive fees until Jerome Schlichter and his law

firm, Schlichter, Bogard & Denton, filed a series of cases in 2006. Up to that time,

the Department of Labor had never brought a case for excessive fees. Mr.

Schlichter and his firm made it their mission to hold fiduciaries accountable for

their failures by ensuring that only prudent investments are included in 401(k) plans

and only reasonable fees are charged.

13. The importance of Mr. Schlichter and his firm’s work, in acting as a

private attorney general in ensuring participants are protected under ERISA, cannot

be overstated.

14. For years thereafter, no defendant in the cases brought by Schlichter,

Bogard & Denton settled.

15. In 2010, shortly after the partial trial of another case in this District,

Tibble v. Edison International, No. 07-5359-SVW (AGRx), Mr. Schlichter and his

firm had the first full trial of a 401(k) excessive fee case on all claims, Tussey v.

ABB, No. 06-4305 (W.D.Mo). That case resulted in a successful judgment after a

month long trial. An illustration of the all-out defense of these cases can be seen


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


from the record, which shows that Defendants in that case spent $42 million on

attorneys’ fees alone, not including expert witness fees, and expenses.

16. The firm of Schlichter, Bogard & Denton has been widely recognized

by Federal Courts as the “preeminent firm in 401(k) fee litigation” Nolte v. Cigna,

No. 07-2046, 2013 U.S.Dist.LEXIS 184622, at *8 (C.D.Ill. Oct. 15, 2013).

17. In Will v. General Dynamics another District Court judge stated:

Jerome Schlichter, and Schlichter, Bogard & Denton’s work throughout this

litigation illustrates an exceptional example of a private attorney general

risking large sums of money and investing many thousands of hours for the

benefit of employees and retirees. No case had previously been brought by

either the Department of Labor or private attorneys against large employers

for excessive fees in a 401(k) plan….Litigating the case required Class

Counsel to be of the highest caliber and committed to the interests of the

participants and beneficiaries of the General Dynamics 401(k) Plans.

Will v. General Dynamics, No. 06-698, 2010 U.S.Dist.LEXIS 123349, at *8–9

(S.D.Ill. Nov. 22, 2010).

18. In Tussey v. ABB, the Honorable Judge Laughrey summed up the

work of Mr. Schlichter and his firm with the following observation:

Of special importance is the significant, national contribution made by the

Plaintiffs whose litigation clarified ERISA standards in the context of

investment fees. The litigation educated plan administrators, the Department

of Labor, the courts and retirement plan participants about the importance of

monitoring recordkeeping fees and separating a fiduciary’s corporate interest

from its fiduciary obligations.

Tussey v. ABB, Inc., No. 06-4305, 2015 U.S.Dist.LEXIS 164818, at *7–8

(W.D.Mo. Dec. 9, 2015)(emphasis added).

19. In Abbott v. Lockheed Martin Corp., the District Court stated:

Since filing this case on September 11, 2006, Class Counsel has been


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


committed to the interests of the participants and beneficiaries of the

Lockheed Martin 401(k) plans in pursuing this case and several other 401(k)

fee cases of first impression. The law firm Schlichter Bogard & Denton has

had a “humongous” impact over the entire 401(k) industry, which has

benefited employees and retirees throughout the country by bringing

sweeping changes to fiduciary practices. Linda Stern, Stern Advice – How

401(k) Lawsuits Are Bolstering Your Retirement Plan, REUTERS, Nov. 5,

2013 (quoting Mike Alfred, co-founder and CEO of Brightscope, an

independent firm that provides data about retirement plans); see also Nolte v.

Cigna, Corp., Case 07-2046, Doc. 413 at 3–4 (C.D.Ill. Oct. 15, 2013)(in

which Judge Baker stated that nationwide, “fee reductions attributed to

Schlichter, Bogard & Denton’s fee litigation and the Department of Labor’s

disclosure regulations approach $2.8 billion in annual savings for American

workers and retirees.”); Gretchen Morgenson, A Lone Ranger of the 401(k)’s,

THE NEW YORK TIMES (March 29, 2014) (Schlichter’s cases have been

“good news for all 401(k) holders”).

Abbott v. Lockheed Martin Corp., No. 06-701, 2015 U.S. Dist. LEXIS 93206, at

*9–10 (S.D. Ill. July 17, 2015).

20. The Ninth Circuit en banc in another of Mr. Schlichter’s early cases

brought in this District similarly recognized “the significant amount of work that

has been required to vindicate an important ERISA principle in [this] court and the

Supreme Court.” Tibble v. Edison Int’l, 843 F.3d 1187, 1199 (9th Cir. 2016).

21. I understand that this case was filed nearly 11 years ago, and that it

required enormous time and effort on the part of Schlichter, Bogard & Denton. The

firm successfully appealed denial of the initial motion for class certification at the

Ninth Circuit, conducted extensive discovery involving millions of pages of

documents, survived a motion for summary judgment, and ultimately began trial


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


before the settlement was reached. These extraordinary efforts are exactly what I

and others familiar with the firm’s work have come to expect.

22. Based on my more than four decades of experience as an ERISA

attorney and my knowledge of the work by Mr. Schlichter and his firm, I am

convinced that the $16.75 million settlement is directly a result of the experience

and expertise of the Schlichter firm. I am not aware of any other private law firm

that could have obtained a settlement as large in this case, particularly in light of the

vigorous opposition from the Defendants.

I declare under penalty of perjury that the foregoing is true and correct.


/s/ Karen W. Ferguson Karen W. Ferguson


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



IN RE NORTHROP GRUMMAN CORP. ERISA LITIGATION This document applies to: ALL ACTIONS


DECLARATION OF THOMAS R. THEADO DATE: October 23, 2017 TIME: 10:00 a.m. Courtroom 7B – 7th floor Hon. André Birotte Jr.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 CASE NO. 06-CV-6213 AB (JCX) -1- DECL. OF THOMAS THEADO

I, Thomas R. Theado, for my declaration pursuant to 28 U.S.C. § 1746 in the

above-captioned action, state the following on my own personal knowledge thereof,

except for those matters set forth on information and belief, and as to those matters

I am informed and believe them to be true. If called upon to testify on the matters

set forth herein, I could and would competently so testify.

1. I am a graduate of Oberlin College with honors in economics. I

received my law degree with honors from Case Western Reserve University where

I earned the American Jurisprudence award in business organization as well as the

Phi Delta Phi award for my graduating class, and I merited membership in both the

Order of Barristers and the Order of the Coif.

2. I was admitted to the practice of law on November 2, 1979. I have

been admitted to permanent practice throughout the courts and agencies of the State

of Ohio, and in the Northern and Southern Districts of Ohio, the Circuit Courts of

Appeals for the Sixth and Tenth Circuits, and the United States Supreme Court. In

addition, I have been admitted pro hac vice in various State Courts and United

States District Courts. I have never been reprimanded, sanctioned, or otherwise

disciplined with respect to any aspect of my uninterrupted practice of law since

November 2, 1979. The national publication LAWYERS WEEKLY included me in its

1995 series of articles featuring the country’s top trial lawyers. I have presented at

many legal seminars throughout the nation and I have authored numerous legal

publications.

3. My practice now primarily focuses on the management of class actions

and other complex civil litigations that require me to coordinate the work of

lawyers from a number of different firms from throughout northern Ohio and

nationally.

4. Courts have appointed me to serve as a Class Counsel, or I have served

or am serving as a lead counsel for the plaintiffs, in numerous class-action lawsuits,

of regional and national scope, including the following: Ansel v. Volkswagen Group


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


of America, Inc., 12th Cir. Manatee Cty. [Florida] No. 2012-CA-008114;

Brandmeier v. Copper Kettle Marina, Inc., Lorain Cty. [Ohio] C.P. No.

89CV102320; CMAF, Inc. v. Thomas, Lorain Cty. [Ohio] C.P. No. 14CV184498;

Costantino v. TRW, Inc., N.D. Ohio No. C86-3368; DeSario v. Industrial Excess

Landfill, Stark Cty. [Ohio] C.P. No. 89-0570; Gattozzi v. Sheehan, Cuyahoga Cty.

[Ohio] C.P. No. CV-14-831933; Hill v. Moneytree of Ohio Inc., Lorain Cty. [Ohio]

C.P. No. 06CV148815; Lintner v. AK Steel Corp. Ret. Accumulation Pension Plan,

S.D. Ohio No. 1:09-CV-0231; McClendon v. Challenge Financial Investors Corp.,

Lorain Cty. [Ohio] C.P. No. 07CV153497; Mikulski v. Centerior Energy Corp.,

Cuyahoga Cty. [Ohio] C.P. No. CV-01-457866; Mikulski v. The Cleveland Electric

Illuminating Co., Cuyahoga Cty. [Ohio] C.P. No. CV-02-490019; Mikulski v.

Centerior Energy Corp., Cuyahoga Cty. [Ohio] C.P. No. CV-02-449020; Mikulski

v. The Toledo Edison Co., Lucas Cty. [Ohio] C.P. No. G-4801-CI-200206364;

Murdocco v. Marathon Oil Co., Summit Cty. [Ohio] C.P. No. CV-95-06-2283;

Murray v. Sunset Mortgage Co., L.P., Lorain Cty. [Ohio] C.P. No. 07CV152784;

Pikas v. The Williams Cos., Inc., N.D. Okla. No. 4:08CV0101; Rybarczyk v. TRW,

Inc., N.D. Ohio No. 1:95CV21800; Satterfield v. Ameritech Mobile Comms., Inc.,

Cuyahoga Cty. [Ohio] C.P. No. CV-03-517318; Smith v. Allied Home Mortgage

Capital Corp., Lorain Cty. [Ohio] C.P. No. 07CV153202; Smith v. Allied Home

Mortgage Capital Corp., N.D. Ohio No. 1-15-cv-02387; Strickler v. First Ohio

Banc & Lending, Inc., Lorain Cty. [Ohio] C.P. No. 07CV151964; US Bank NA v.

Schubert, Lorain Cty. [Ohio] C.P. No. 10CV170414; Walker v. Asea Brown Boveri

Inc. Cash Balance Pension Plan, D. Conn. No. 3:02-CV-0550; West v. AK Steel

Corp. Ret. Accumulation Pension Plan, S.D. Ohio No. 1:02-C V-0001; and White v.

Apt. Management, Inc., Lorain Cty. [Ohio] C.P. No. 15CV187197.

5. In addition to the class action lawsuits mentioned above, I have

participated in the litigation that has led to the successful conclusion obtained in

many other national or regional class actions, including the following: Davidson v.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


U.S. Air, Inc., N.D. Ohio No. 1:90CV2071; DeMarco v. Akron Coca Cola Bottling,

N.D. Ohio No. C88-6702; Elbert v. White Ready Mix Concrete, N.D. Ohio No.

C76-0445; Insalaco v. Ben Venue Laboratories, Inc., Cuyahoga Cty. [Ohio] C.P.

No. CV-01-450549; Rosen v. Fisher Foods, Inc., N.D. Ohio No. C80-0079; Lowe v.

Sun Refining & Marketing, Lucas Cty. [Ohio] C.P. No.88- 0630; Marx v. Copper

Kettle Marina, Inc., Lorain Cty. [Ohio] C.P. No. 88CV100809; Pelletz v.

Weyerhaeuser Co., W.D. Wash. No. 2:08-CV-0334; Ross v. TREX Co., Inc., Santa

Cruz Cty. [CA] Superior Ct. No. 161553; Redington v. Goodyear Tire & Rubber

Co., N.D. Ohio No. 5:07-CV-1999; Streety v. Garfield Alloys, Inc., Cuyahoga Cty.

[Ohio] No. CV-04- 519385; Taylor v. Amerifoods Companies, N.D. Ohio No.

1:92CV1715; White v. Aztec Catalyst Co., Lorain Cty. [Ohio] C.P. No.

93CV111025; and in Wolph v. Acer America Corp., N.D. Cal. No. CV-09-1314.

6. I have served as a Lead Counsel in a number of class actions asserting

ERISA pension-benefit claims, including Costantino v. TRW, Inc., N.D. Ohio No.

C86-3368; Rybarczyk v. TRW, Inc., N.D. Ohio No. 1:95CV21800; West v. AK Steel

Corp. Ret. Accumulation Pension Plan, S.D. Ohio No. 1:02-CV-0001; Walker v.

Asea Brown Boveri Inc. Cash Balance Pension Plan, D. Conn. No. 3:02-CV-0550;

Pikas v. The Williams Cos., Inc., N.D. Okla. No. 4:08CV0101; and Lintner v. AK

Steel Corp. Ret. Accumulation Pension Plan, S.D. Ohio No. 1:09-CV-0231. 7. In addition to appearing as a counsel for plaintiffs-litigants in various

class-action lawsuits, including those set forth above, I have been retained by

attorneys to advise and consult on class-action matters in various litigation matters

in which I did not appear as an attorney of record. I have consulted, and I am

presently consulting, in litigation on behalf of litigants opposing class-certification

efforts.

8. The attorneys of my law firm, Gary, Naegele & Theado, LLC, have

represented the interests of hundreds of thousands, if not millions, of injured

individuals in state and federal cases nationwide. The cases have involved various


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


areas of substantive law, including pension benefit law, consumer fraud,

environmental injuries, personal property damage, real estate value diminution, and

contract damages.

9. In the course of our complex-litigation practice, we have participated

in multi-district litigation proceedings, such as In re Silicone Breast Implant

Litigation, M.D.L. No. 926; In re Orthopedic Bone Screw Litigation, M.D.L. No.

1014; In re Medtronic, Inc., Sprint Fidelis Leads Products Liability Litigation,

M.D.L. No. 1905; In re Chinese-Manufactured Drywall Products Liability

Litigation, M.D.L. No. 2047; and In re Liquid Aluminum Sulfate Antitrust

Litigation, M.D.L. No. 2687. I am presently serving as Ohio counsel in a mass

action involving more than 110 individually named plaintiffs in Baker v. Tunnell

Hill Reclamation, LLC, Licking [Ohio] C.P. No. 2015-CV-00400.

10. Reported cases in which I was actively involved include the following:

Ailiff v. Mar-Bal, Inc., 62 Ohio App.3d 232, 575 N.E.2d 228 (1990); Board of

Educ. of the Strongsville City School Dist. v. Theado, 57 Ohio St.3d 162, 566

N.E.2d 667 (1991); DeSario v. Industrial Excess Landfill, Inc., 68 Ohio App.3d

117, 587 N.E.2d 454 (1991); Duff v. Gary, 87 Ohio App.3d 558, 622 N.E.2d 727

(1993); Turner v. Turner, 67 Ohio St.3d 337, 617 N.E.2d 1123 (1993); Schwochow

v. Chung, 102 Ohio App.3d 348, 657 N.E.2d 312 (1995); Yepko v. State Farm Mut.

Ins. Co., 79 Ohio St.3d 414, 683 N.E.2d 1090 (1997); Yepko v. State Farm Mut.

Ins. Co., 25 F. Supp.2d 831 (N.D. Ohio 1998); Fine v. America Online, Inc., 139

Ohio App.3d 133, 743 N.E.2d 416 (2000); Rybarczyk v. TRW Inc., 235 F.3d 975

(6th Cir. 2000); In re: Hechinger Investment Co. of Delaware, 298 F.3d 219 (3rd

Cir. 2002); Walker v. Asea Brown Boveri, Inc. Cash Balance Pension Plan, 214

F.R.D. 58 (D. Conn. 2003); West v. AK Steel Corp. Retirement Accumulation

Pension Plan, 318 F. Supp.2d. 579 (S.D. Ohio 2004); Mikulski v. Centerior Energy

Corp., 435 F.3d 666 (6th Cir. 2006); West v. AK Steel Corp. Retirement

Accumulation Pension Plan, 484 F.3d 395 (6th Cir. 2007); Mikulski v. Centerior


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


Energy Corp., 501 F.3d 555 (6th Cir. 2007) (en banc); Pikas v. The Williams Cos.,

542 F.Supp.2d 782 (S.D. Ohio 2008); West v. AK Steel Corp. Retirement

Accumulation Pension Plan, 657 F.Supp.2d 914 (S.D. Ohio 2009); and Pikas v. The

Williams Cos., Inc., 822 F.Supp.2d 1163 (N.D. Okla. 2011).

11. In summary, my firm and I have broad experience in ERISA litigation

and other class actions, having litigated major class actions on behalf of hundreds

of thousands of claimants, resulting in substantial compensation to those claimants

through both settlements and judgments.

12. Being an ERISA plaintiff-class litigator is very often a situation where

the successful plaintiffs’ counsel has done good more than done well. While the

media may fixate on the size of some recoveries in this area of the law, the real

facts are that an ERISA plaintiff class litigator regularly represents groups of

individuals whose claims are terribly difficult to communicate succinctly and

convincingly, and whose understanding of the difficult and complex work being

done in their behalf is often marked by misunderstanding and suspicion. These all-

too-often-unavoidable complications make an attorney’s acceptance of the

representation of a plaintiff in an ERISA class case a weighty decision, in which

there must be balanced not merely the prospects of success on the merits but also

the prospects for a legitimately sufficient remuneration after years and years of very

often hammer-and-tongs adversarial opposition. As a result of there being so few

able attorneys from which to choose a lawyer who is competent in conducting a

class action for ERISA benefits and the consequent nationwide scope of their

practice, these lawyers constitute a valuable national market. See, e.g., Tussey v.

ABB, Inc., W.D.Mo. No. 06-04305-CV-C-NKL, 2012 U.S. Dist. LEXIS 157428 at

*9-*10 (Nov. 2, 2012) (“It is well established that complex ERISA litigation

involves a national standard and special expertise.”).

13. In the Summer of 2004 I commenced a focused, professional

consideration of the potentially actionable nature of the disturbing attributes of


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


some 401(k) retirement plans, such as where a mutual fund makes revenue-sharing

payments to vendors who sell investment products to the fund, and the resulting

conflicts of interest or other fiduciary concerns arising from such arrangements. In

tandem with these efforts, I have attentively followed the ERISA litigation practice

of Jerry Schlichter since mid-September 2006. I have never met Mr. Schlichter, but

I have paid careful attention to the cases he has brought, the theories of recovery he

has developed and pursued, and the developments in his ERISA cases as well as

plan sponsors’ responses to those developments. To my knowledge, no one

(including the Department of Labor) had brought suit on fiduciary-based excessive-

fee claims against the plans of large employers prior to Mr. Schlichter. These

efforts of Mr. Schlichter and members of his firm have benefitted plan participants

across the United States, including the participants in the Northrop Grumman Corp.

retirement plans that are the subject of the pending proposed settlement, as well as

the entire ERISA bar as his cases have been instrumental in shaping the emerging

case law pertaining to claims premised on averments of faultful revenue-sharing

arrangements in 401(k) retirement plans. As such, Mr. Schlichter’s firm has been

seen as the pioneer in the field, serving a public good as a “private attorney

general.”

14. Others have recognized the benefit of these efforts. For example, the

Honorable Nanette Laughrey, United States District Judge for the Western District

of Missouri, has observed the following on the significant role that Mr. Schlichter’s

firm has played in this important area of ERISA litigation and rule enforcement:

Of special importance is the significant, national contribution made by

the Plaintiffs whose litigation clarified ERISA standards in the context

of investment fees. The litigation educated plan administrators, the

Department of Labor, the courts and retirement plan participants about

the importance of monitoring recordkeeping fees and separating a

fiduciary’s corporate interest from its fiduciary obligations.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


Tussey v. ABB, Inc., W.D.Mo. No. 06-04305-NKL, 2015 U.S. Dist. LEXIS 164818

at *7–*8 (Dec. 9, 2015).

15. It is likely that Mr. Schlichter would be the advocate accepting

representation of the participants in the Northrop Grumman Corp. retirement plans

involved in this action – the Northrup Grumman Savings Plan and the Northrop

Grumman Financial Security and Savings Program – in the absence of others

willing to take on such arduous, complex, and arcane litigation. Indeed, the instant

action is one of the first excessive fee cases that Mr. Schlichter’s firm filed; before

Mr. Schlichter came along, to my knowledge, no other attorney had brought such a

case. No other law firm in the United States has the depth and experience in

excessive fee cases as Schlichter, Bogard & Denton.

16. My firm typically accepts representation of a named plaintiff in a

putative class action on the basis of the prospective client acknowledging that a fee

award that is equivalent to at least one-third of the gross recovery is a fair and

reasonable attorney fee.

17. My decades of experience litigating ERISA pension-benefits class

actions convince me that the willingness of counsel to litigate zealously, often for

more than a decade without payment other than contingent on the eventual

outcome, is an important element in the probability of a successful conclusion for

the class. The instant action – with two motions to dismiss, a denial of class

certification followed by an appellate reversal of that decision, the class’s survival

from a grant of partial summary judgment, and a week of trial, all marked by

various discovery disputes, amended complaints, and a number of mediation

sessions – is a poster child for that sort of litigation. It accordingly makes sense to

award an attorney who has successfully undertaken such a lengthy struggle at a fee

that might be higher than that awarded in a less complex and difficult case. And

the converse is true, that an inadequate award to class counsel on their having

successfully concluded a lengthy lawsuit to the benefit of their class faced by a


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


determined and well-financed adversary, will prove a marked disincentive to future

attorneys considering whether to undertake a similar contest, to the considerable

disadvantage to that future group of wronged plan participants.

I declare under penalty of perjury that the foregoing is true and correct.

Executed in Amherst, Ohio, on August 16, 2017.

/s/ Thomas R. Theado Thomas R. Theado


JEROME J. SCHL1CHTER (SBN 054513)[email protected] A. WOLFF (admitted pro hac vice )mwo! [email protected]

HEN

1

2

M. HOEPLINGER (admitted pro hac vice)[email protected] C? STRUCKHOFF (admitted pro hac vice)[email protected], BOGARD & DENTON LLP100 South Fourth Street, Suite 1200

STEP3

4

5

c. St. Louis, MO 63102Telephone; (314)621-6115

7 Facsimile: (314)621-5934Glass Counsel for All Plaintiffs

8MARY ELLEN SIGNORILLE (admitted pro hac vice)[email protected] Foundation Litigation601 E Street NWWashington, DC 20049"" " rnhone: (202) 434-2060

Counselfor Plaintiffs

9

10

Tele11Co-

12WILLIAM A. WHITE (SBN 121681)wwhi tejfl^hi 1 1farrer .com13HILL, RRER & BURRILL LLPOne California Plaza, 37th Floor300 South Grand Avenue

14

Los Angeles, CA 9007 1 -3 1 47Telephone: (213) 620-0460Facsimile: (213)620-4840

15

16Local Counselfor Grabek Plaintiffs

17

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA18

19

Master File No. 06-CV-6213 AB (JCx)20IN RE NORTHROP GRUMMAN

CORPORATION ERISA

LITIGATION.

DECLARATION OF SHERI

O'GORMAN

21

22

23THIS DOCUMENT RELATES TO: Hon. Andre Birotte Jr.

24

All Actions Courtroom 7B25

26

27

28


1 I, Sheri O'Gorman, under penalty ofperjury pursuant to 28 U.S.C. §1746,

2 declare as follows:

1 . I am the Office Administrator of Schlichter, Bogard, & Denton, LLP and

4 the Custodian of Records, in charge ofpayment of expenses in this matter. I have

^ examined the records and we have incurred case expenses totaling $ 1 , 1 59, 1 1 4.24 as

3

6 of August 24, 2017.

7 2. Below is a list of expenses according to their categories:

8

TotalDescription9$49,026.96Depositions

Experts and Consultants

Filing, Transcripts, Subpoena Services and Related Costs

10$278,764.59

$9,279.1311

$27,986.06Mediation and Settlement Costs12

$274,958.34Copies, Postage, Phone and Fax

Data Development and Document Organization

Research and Investigation

13 $330,152.05

$22,667.0014

$160,262.06Travel, Lodging, and Parking

Trial Costs15 $6,018.05

$1,159,114.24Total16

17

3. The expenses listed above are those for which Schlichter, Bogard &

Denton, LLP is seeking reimbursement. The firm has incurred other expenses in

litigating this case for which it does not seek reimbursement, including fees paid to

an expert that was withdrawn and a consulting expert who did not testify.

4. I am also in charge of monitoring attorney and staff time billed. During the

litigation in these cases the following chart shows the amount of hours spent by

attorneys broken down by experience:

18

19

20

21

22

23

24

25

26

27

28

Case No. 06-CV-6213 AB (JCx) Decl. of Sheri O'Gorman-1-


1

Total HoursDescription2

10,546.600-4 Years3 T7,076.205-14 Years

4 2,473.0015-24 Years

3,402.2025 and Above523,498.00Total Attorney Hours

6The following chart shows the amount of hours spent by staff:

7

8Total HoursDescription

2,827.80Paralegal9

171.90Law Clerk10

2,999.70Total Hours

115. More detailed billing records can be made available for the Court's review

upon request.

6. On June 26, 2017, Schlichter, Bogard & Denton, LLP published a website,

www.northrop401ksettlement.com, from which Class members could download the

Settlement Agreement (with exhibits) and other documents relating to the

settlement, including the Court's Order granting preliminary approval and the Order

granting the motion to modify the Class definition.

I declare under penalty of perjury under the laws of the United States of

America that the foregoing is true and correct.


12

13

14

15

16

17

18

19

20

21

22 Sheri O'Gorman

23

24

25

26

This includes 1 00 additional hours Class Counsel reasonably expects Kurt

Struckhoff and Stephen M. Hoeplinger to spend over the next several months

administering the settlement.

27

28

Case No. 06-CV-6213 AB (JCx) Decl. of Sheri O'Gorman-2-


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28






ALL ACTIONS


DECLARATION OF STEPHEN M.

HOEPLINGER

DATE: October 23, 2017

TIME: 10:00 a.m.




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- DECL. OF STEPHEN M. HOEPLINGER

I, Stephen M. Hoeplinger, for my declaration pursuant to 28 U.S.C. §1746 in

the above-captioned actions, state the following on my own personal knowledge

thereof and my review of the files and records of Schlichter, Bogard & Denton LLP

(“SBD”), which I believe and understand to be true and accurate:

1. I am an attorney with SBD, the law firm representing the Plaintiffs and

Class in this case.

2. I am licensed to practice in all Courts of the States of Massachusetts

and Missouri. I am admitted pro hac vice in this matter.

3. I received my Bachelor of Arts degree from the University of Notre

Dame in 2005 and my Juris Doctorate from Washington University in St. Louis

School of Law in 2009.

4. I have been in private practice of law for nearly 8 years and have been

actively engaged in complex litigation, including securities, consumer rights, and

ERISA class actions, since 2010.

5. I have been with SBD since May 2016, and since then, I have worked

primarily in securities-related and ERISA fiduciary breach litigation.

6. Since joining SBD, I have been involved in this case, including

preparing for, and litigating, the trial that took place in March 2017, as well as

subsequent negotiations to finalize the settlement. In familiarizing myself with the

case, I reviewed the firm’s files and records as well as key pleadings and Orders of

the Court. I therefore am able to attest as to the facts contained herein.

7. SBD filed the original complaint in this case on September 28, 2006.

That complaint alleged that Defendants violated ERISA by causing the Plans to

enter into agreements with service providers under which participants paid fees that

were unreasonable and not incurred solely for their benefit, and by failing to

appoint and/or monitor Plan fiduciaries in a prudent manner.

8. After the Court granted Defendants’ motion to dismiss that complaint,

SBD filed an amended complaint, which added claims for overpayment of


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


investment management fees on certain investment options and excessive

administrative and management fees charged on the Northrop Grumman Stock

Fund. Doc. 43; Doc. 277 at 2. Some Defendants answered that first amended

complaint (Doc. 53), while others, including Northrop Grumman Corporation, filed

a motion to dismiss (Doc. 56) that the Court granted.

9. In the course of discovery, Defendants produced, and SBD reviewed,

nearly 2.5 million pages of documents. The firm also took 17 depositions of

Defendants and non-parties, including experts.

10. After discovering new conduct by Defendants beyond what was

initially claimed in the original and first amended complaints, SBD moved for leave

to file a second amended complaint adding new factual allegations based on its

document review, which the Court granted. Doc. 332.

11. The parties attempted mediation 3 times prior to trial. Class

representative Gary Grabek attended 2 of these mediation sessions, 1 of which was

held in California and 1 of which was held in New York. Attending the mediations

required Mr. Grabek to travel from his home in Illinois.

12. Before opening statements, Defendants informed the Court that they

intended to submit bench briefings contending that claims related to expenses

Northrop charged for IT and ITA expenses were barred by the Court’s summary

judgment order. They did so the next day. Docs. 740, 741. Plaintiffs opposed

Defendants’ motions (Doc. 744), but the Court indicated it was considering

granting them.

13. Following opening statements, Plaintiffs examined, and Defendants

cross-examined, class representatives Gary Grabek, Julie Spicer, and Mark Geuder.

Plaintiffs and Defendants also examined J. Michael Hateley. After Hateley,

Plaintiffs began their examination of Dennis Wootan. Wootan’s examination was

still in progress when the Court recessed for the week on Thursday, March 16.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


14. During the course of trial, the parties continued to work with mediator

Margaret Levy on a potential pre-judgment resolution. On Sunday, March 19, the

parties finally reached a settlement in principle. Doc. 746.

15. Following the parties’ agreement on a settlement-in-principle, SBD

continued to negotiate the details of the settlement for over 2 months. See Docs.

750, 759, 762, 763. In addition to these negotiations, the firm solicited bids from

several potential settlement administrators in order to minimize costs to the Class,

coordinated with Defendants on obtaining current contact information for all Class

members, and responded to requests for information from the independent fiduciary

for its review of the settlement.

16. Based on the firm’s experience in other cases, I anticipate that it will

spend another 50–100 additional hours administering the settlement in the next

several months, including monitoring the settlement administrator, ensuring that all

payments are made to Class members in accordance with the settlement, and

answering calls from numerous Class members about the settlement in a timely

fashion. Indeed, SBD still receives calls from members of classes in other cases that

settled years ago. As an example, last year, I personally responded to an inquiry

from a class member in Kanawi v. Bechtel Corp., No. 06-5566 (N.D.Cal.), which

settled in 2011. No. 06-5566, Doc. 827 (N.D.Cal. Mar. 1, 2011).

17. On June 26, 2017, after filing the motion for preliminary approval of

the settlement, SBD published a website, www.northrop401ksettlement.com, that

allowed the public, including Class members, to download the settlement, which

stated SBD’s intention to seek a 1/3 fee, reimbursement for expenses up to

$1,240,000, and incentive awards for the Named Plaintiffs. A Google search of

“Northrop Grumman ERISA settlement” shows an article stating that “The deal


http://www.northrop401ksettlement.com/

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


authorizes [Class Counsel] to seek one-third of the settlement amount—$5.8

million—as attorneys’ fees.”1

18. On August 14, 2017, the Settlement Administrator mailed

approximately 210,000 notices to Class members. Since then, SBD has received

over 300 calls from Class members inquiring about the settlement. Only 1of the

Class members who contacted us stated an objection to SBD’s requested fee award.

The deadline for objections to the settlement is September 23, 2017.

19. Attached as Exhibit 1 hereto is a true and correct copy of the

CounselLink Enterprise Legal Management Trends Report: Update on the 6 Key

Metrics (February 2017).

20. Attached as Exhibit 2 hereto is a true and correct copy of Floyd Norris,

What a 401(k) Plan Really Owes Employees, N.Y. Times (Oct. 16, 2014).

21. Attached as Exhibit 3 hereto is a true and correct copy of Gretchen

Morgenson, A Lone Ranger of the 401(k)’s, N.Y. TIMES (Mar. 29, 2014).

22. Attached as Exhibit 4 hereto is a true and correct copy of Linda Stern,

Stern Advice – How 401(k) Lawsuits Are Bolstering Your Retirement Plan,

REUTERS (Nov. 5, 2013).

23. Attached as Exhibit 5 hereto is a true and correct copy of Martha Neil,

Top Partner Billing Rates at BigLaw Firms Approach $1,500 per Hour,” ABA

Journal (Feb. 8, 2016).

24. Attached as Exhibit 6 hereto is a true and correct copy of Natalie

Rodriguez, Meet the $2,000 an Hour Attorney, Law360 (June 11, 2015).

I declare under penalty of perjury that the foregoing is true and correct to the

best of my knowledge and belief.

1 https://www.bna.com/northrop-grumman-settles-n73014453171/ (hyperlinked).


https://www.bna.com/northrop-grumman-settles-n73014453171/

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



/s/ Stephen M. Hoeplinger

Stephen M. Hoeplinger


CounselLink®

CounselLink®

CounselLink Enterprise Legal Management TRENDS REPORT

6KEYMETRICS

UPDATE ON THE

FEBRUARY 2017

Exhibit 1



6KEYMETRICS

UPDATE ON THE

FEBRUARY 2017

Exhibit 1


32017 CounselLink Enterprise Legal Management | TRENDS REPORT

Insights are based on data derived from nearly $26 billion in legal spending,

THE GAP BETWEEN PARTNER HOURLY RATES FOR “LARGEST 50” FIRMS AND THE “SECOND LARGEST” FIRMS CONTINUES TO GROW.

LAW FIRM CONSOLIDATION HAS INCREASED SINCE THE LAST TRENDS REPORT

OVERALL USE OF AFAS SHOWS A SMALL UPTICK

WE CONTINUE TO OBSERVE SIGNIFICANT RATE INCREASES IN THE INDUSTRY, ALTHOUGH GROWTH IS VARIABLE ACROSS GEOGRAPHIES.

CounselLink Enterprise Legal Management Trends Report FEBRUARY 2017

UPDATE ON THE SIX KEY METRICSHighlights

Executive

Exhibit 1


4 2017 CounselLink Enterprise Legal Management | TRENDS REPORT

TABLE OF CONTENTS

4

5

6

8

9

10

11

12

13

14

15

16

17

Exhibit 1


5 | TRENDS REPORT

Each annual update of the CounselLink Enterprise Legal Management Trends Report covers a standard set of key metrics related to hourly legal rates and the corporate procurement of legal services.

CounselLink®


6KEYMETRICS

UPDATE ON THE

FEBRUARY 2017

Exhibit 1



Rate

Timekeeper rate metrics

Median

5 10 48 4 4 35 7 4 2

$800

$700

$600

$500

$400

$300

$200

$100

0

KEYMETRIC

1

Exhibit 1



partner engagement.

• • Environmental• Real Estate• • •

• Commercial and Contracts • • •

Exhibit 1



•

•

20-30%<20%

30%

35%

40%

25%

20%

15%

10%

5%

0

30-40% 40-50% 50-60% 60-70% 70-80% 80-90% 90-100%

% o

f com

pani

es

34%28%

KEYMETRIC

2

Exhibit 1



% OF MATTERS UTILIZING AFA

20%

15%

10%

5%

0

Average 9.9%

and 7.5% of billings in the past year

KEYMETRIC

Exhibit 1



% OF BILLINGS EXECUTED UNDER AFA

$$ $$$$$$$$$$$

$$$$$$$$ $$

$$$$$$

and 7.5% of billings in the past year

KEYMETRIC

20%

15%

10%

5%

0

Average 7.5%

$$$

Exhibit 1



MEDIAN PARTNER HOURLY RATES BY LAW FIRM SIZE

51-1001-50 101-200 201-500 501-750 750+

+

and geographies

KEYMETRIC

4

$625

$250

$425

$447

Exhibit 1



6%

5%

4%

3%

2%

1%

0

ADDITIONAL GROWTH RATES ACROSS THE COUNTRY

4.0%

over both the last year and the last three years

KEYMETRIC

5a

WASHINGTON DC

3.8%4.5%

YoY

CAG

R

5.4%5.0%

SEATTLE

YoY

CAG

R

BOSTON

3.6%5.7%

YoY

CAG

R

Exhibit 1



9.6%9.3%

6.7%

6.6%Utah

$605 median

> 4.0%2.1% to 4.0%0.0% to 2.0%< 0.0%

GROWTH RATE

7.8%$200 median

Indiana

KEYMETRIC

5b

Exhibit 1



$440

$575

$501$455

$400

TM

KEYMETRIC

6a

Exhibit 1



IP-Patent

Corporate, General, Tax

Employment and Labor

Environmental

Insurance

Regulatory and Compliance

4.0%

1%0 2% 3% 4% 5%

>4.0%

<2.5%

METRIC

6b

over both the last year and the last three years

Exhibit 1



TERMINOLOGY:

>

>

>

>

Company Industry

>

>

>

>

>

>

>

>

>

Exhibit 1



area metrics and scorecards.

Con

tributors

Expe

rt

Exhibit 1



® ®

•

•

Blog:

Facebook:

LinkedIn:

Link

Cou

nsel

Exhibit 1



6KEYMETRICS

UPDATE ON THE

FEBRUARY 2017

Exhibit 1


CounselLink®

Exhibit 1


�� !��"��

��#��$��"��$%��&'�"��!��$��(�%'&)*+ ��,

��#��"$��-�.��/

01234522�678

9:;<�;�=>?@AB�CD;E�FG;DDH�IJGKLMNDOHGGKPQR:�S�TOJ�UQE;EVG

WH�UTIXY�ZIFF[\�I]_�?a�b>?=

[c�HOd�:;e�;�V:OQVG�fG<JGGE�<JO�K:;gG�VD;KKGK�Oc�<:G�K;MG�Md<d;D�cdEe�h�<:G�OEDH

eQccGgGEVG�fGQER�<:;<�OEG�VD;KK�V:;gRGe�:QR:Gg�cGGK�;Ee�J;K�<:GgGcOgG�Rd;g;E<GGe�<O

:;iG�NOOgGg�gG<dgEK�h�<:G�V:OQVG�JOdDe�EO<�KGGM�<O�fG�eQccQVdD<_

Wd<�<gdK<GGK�Oc�OEG�VOgNOg;<G�=>?@AB�ND;E�h�<:G�<HNG�Oc�eGcQEGejVOE<gQfd<QOE

ND;E�<:;<�QK�QEVgG;KQERDH�<:G�OEDH�AQEe�Oc�gG<QgGMGE<�ND;E�;i;QD;fDG�<O�kMGgQV;E

JOgAGgK�h�eGVQeGe�<O�<;AG�<:G�OEG�<:;<�V:;gRGe�:QR:Gg�cGGK_

ZOJ�<:G�\dNgGMG�]Odg<�:;K�;RgGGe�<O�:G;g�;�V;KG�<:;<�:QERGK�OE�<:;<�eGVQKQOEa

J:QV:�J;K�M;eG�cOg�GMNDOHGGK�Oc�LeQKOE�[E<GgE;<QOE;Da�<:G�N;gGE<�Oc�\Od<:GgE

];DQcOgEQ;�LeQKOEa�;�d<QDQ<H�VOMN;EH_�[<�JQDD�:G;g�;E�;NNG;D�Oc�;�eGVQKQOE�fH�<:G

lEQ<Ge�\<;<GK�]Odg<�Oc�kNNG;DK�cOg�<:G�ZQE<:�]QgVdQ<�<:;<�GKKGE<Q;DDH�:GDe�<:;<

VOMN;EQGK�JGgG�NgO<GV<Ge�cgOM�DQ<QR;<QOE�gGD;<Ge�<O�QEiGK<MGE<�eGVQKQOEK�M;eG�MOgG

<:;E�KQm�HG;gK�fGcOgG�;�KdQ<�J;K�cQDGe_

WGcOgG�JG�RG<�<O�<:G�eG<;QDKa�DG<nK�;eegGKK�<:G�odGK<QOE�Oc�J:H�KdV:�:QR:jVOK<

cdEeK�JOdDe�fG�V:OKGE�QE�;EH�V;KG_

Exhibit 2


�� !��"��

��#��$��"��$%��&'�"��!��$��(�%'&)*+ ��,

-.�/012345�.67�.892.772�3:�.67�;<=4�21>470�9;�:38�23?@=<<70�87.=1<�@<=2272�3:�27A78=<

B9.9=<�:9402�3::7870�CD�:18B2�<1E7�F1<<1=B�G<=185�H1B@35�IJK5�L=4925�-<<1=4M�=40

J8=4E<14N�O6327�:9402�<7A170�P6=.�=87�E43P4�14�.67�14092.8D�=2�=449=<�QRSCTQ�:7725

P61@6�8=4>70�9;�.3�=C39.�=�.6180�3:�Q�;78@74.�3:�.67�=B394.�=4�14A72.38�6=0�14�.67

:940N

/=@6�3:�.67�:9402�14�U972.134�6=0�=4�V142.1.9.134=<W�@<=22�=2�P7<<5�P61@6�>7478=<<D

87U91870�=�29C2.=4.1=<�B141B9B�14A72.B74.�C9.�6=0�43�29@6�:77N�-.�12297�14�.67

<1.1>=.134�12�P67.678�.67�.892.772�3:�.67�XYQSET�;<=4�A13<=.70�.6718�:109@1=8D�09.172�CD

43.�7A74�@342107814>�.67�142.1.9.134=<�@<=225�=<.639>6�.67D�@39<0�6=A7�14A72.70�14�1.N

-�.6180�3:�Q�;78@74.�0372�43.�23940�<1E7�=�<3.5�C9.�@3B;394070�3A78�RY�38�ZY

D7=82�1.�@=4�=00�9;N�[:�D39�14A72.70�\Q5YYY�=40�7=8470�]�;78@74.�=�D7=8�:38�R�D7=825

D39�P39<0�740�9;�P1.6�47=8<D�QY�;78@74.�B387�B347D�.6=4�1:�D39�6=0�14A72.70�1.�=.

_N_�;[email protected]

-2�P1.6�B32.�XYQSET�;<=425�7B;<3D772�@39<0�@63327�:83B�=�<12.�3:�:9402N�K3B7

6=0�<3P78�:772�.6=4�.67�:9402�14�U972.134N�G9.�.67D�=<23�6=0�01::7874.�14A72.B74.

[email protected]

[.�@32.2�B347D�.3�B=4=>7�=�XYQSET�:940N�b7@3802�B92.�C7�E7;.�:38�7=@6�;<=4

;=8.1@1;=4.5�=40�7=@6�;=8.1@1;=4.�6=2�.67�81>6.�.3�B3A7�B347D�=839405�>7478=.14>

87@380?E77;14>�=40�[email protected]�7c;74272N

/012345�<1E7�B=4D�@3B;=41725�.3<0�P38E782�1.�P39<0�;=D�.6327�=0B1412.8=.1A7

@32.2N�[.�@39<0�6=A7�@63274�3.678P1275�C9.�@6=4>14>�29@6�=�;83A12134�P39<0�43�039C.

=4>78�=�<3.�3:�P38E782N

[42.7=05�/01234�6=0�=�07=<�.3�:38@7�.67�P38E782�.3�;=D�.6839>6�.67�C=@E�0338N

O67�QRSCTQ�:772�.6=.�P787�[email protected]�:83B�.6718�14A72.B74.2�14�.67�V87.=1<W�:9402�P787

87C=.70�14�=�P=D�.6=.�=<<3P70�/01234�.3�927�.67B�.3�;=D�.67�XYQSET�@32.2N�O67�47.

8729<.�P=2�.6=.�/01234d2�;83:1.2�P787�=�<1..<7�61>6785�=40�7B;<3D77�14A72.B74.�87.9842

=�<1..<7�<3P785�.6=4�P39<0�6=A7�C774�.67�@=27�1:�.67�.892.772�6=0�@63274�.67

142.1.9.134=<�@<=2272�3:�26=872N

e

Exhibit 2


�� !��"��

��#��$��"��$%��&'�"��!��$��(�%'&)*+ +�,

-./0�12/30435�6/7�3./8859:5;�<=�>52?@5�>A�B3.843.052C�/�1/20952�49�0.5�B0A�D?E47

8/6�F42@�B3.843.052C�G?:/2;�H�I590?9A�J5�./7�<559�/�14?9552�49�8404:/04?9�3?9352949:

0.5�K@18?=55�L50425@590�M93?@5�B53E240=�N30�?F�OPQRC�6.43.�750�2E857�F?2�3?21?2/05

15974?9�18/97�49�/9�52/�6.59�S420E/88=�/88�7E3.�18/97�6525�;5F495;T<595F40�18/97C

@5/949:�0./0�0.5=�12?@475;�6?2U527�/�3520/49�/@?E90�/0�250425@590C�/9;�40�6/7�0.5

3?@1/9=V7�12?<85@�4F�0.5�FE9;�6/7�9?0�49S5705;�6588A

-./0�8/6�47�59F?235;�<=�0.5�D/<?2�I51/20@590C�<E0�0.5�;51/20@590�./7�9?0

5W/308=�<559�/9�/::25774S5�59F?2352A�X95�F5;52/8�YE;:5C�6.?�.5/2;�/�3/75�F485;�<=�Z2A

B3.843.052�/:/4970�0.5�497E2/935�3?@1/9=�[4:9/C�12/475;�.4@�/9;�0.5�F42@�F?2�/3049:

/7�\/�124S/05�/00?295=�:5952/8]�49�59F?2349:�K247/C�\247U49:�<25/0.0/U49:�/@?E907�?F

04@5�/9;�@?95=�6.485�?S523?@49:�@/9=�?<70/3857�F?2�0.5�<595F40�?F�5@18?=557�/9;

25042557A]

Z2A�B3.843.052�47�8577�1?1E8/2�640.�3?@1/9457�49S?8S5;�49�0.5�RO_U�49;E702=C

6.43.�./S5�71590�8/2:5�7E@7�;5F59;49:�0.5@758S57�F2?@�7E407�0.5=�S456�/7

E9F?E9;5;A�M9�E2:49:�0.5�BE125@5�[?E20�9?0�0?�.5/2�0.5�956�3/75C�K;47?9�/2:E5;

0./0�\[?9:2577�;4;�9?0�59/30�K247/�0?�F/34840/05�/9;�12?@?05�3?708=�<595F40T18/9

8/67E407C�571534/88=�70/85�8/67E407�3./8859:49:�18/9�;53474?97�@/;5�@/9=�=5/27

5/28452A]

M0�aE?05;�F2?@�/�125S4?E7�BE125@5�[?E20�;53474?9C�49�6.43.�[.45F�>E70435�>?.9

bA�L?<5207�>2A�62?05�0./0�\[?9:2577�7?E:.0�0?�325/05�/�7=705@�0./0�47�9?0�7?�3?@185W

0./0�/;@494702/04S5�3?707C�?2�8404:/04?9�5W159757C�E9;E8=�;473?E2/:5�5@18?=527�F2?@

?FF5249:�K247/�18/97�49�0.5�F4270�18/35A]

M9�0.5�3/75�0.5�BE125@5�[?E20�6488�9?6�;534;5C�/�YE;:5�2E85;�0./0�K;47?9V7

02E70557�S4?8/05;�0.542�F4;E34/2=�;E0457�<=�9?0�3?974;5249:�?FF5249:�0.5�497040E04?9/8

38/7757C�<E0�.5�7/4;�0./0�<53/E75�@?70�?F�0.5�FE9;7�49�aE5704?9�./;�<559�F4270�?FF525;

49�0.5�18/9�@?25�0./9�74W�=5/27�<5F?25�0.5�7E40�6/7�F485;�49�c QC�0.5�18/4904FF7�6525

</225;�<=�/�70/0E05�?F�84@40/04?97�F2?@�1E27E49:�0.5�38/4@7A

-.5�YE;:5�7/4;�0./0�49�0.5�3/75�?F�0.255�FE9;7C�.?65S52C�0.5�;53474?9�0?�E75�0.5

250/48�FE9;7�./;�<559�@/;5�2535908=�59?E:.�0./0�0.5�70/0E05�?F�84@40/04?97�;4;�9?0

/118=�/9;�/6/2;5;�deQC^�0?�0.5�18/4904FF7C�0.5�;4FF525935�49�6./0�6/7�5/295;�/9;

6./0�6?E8;�./S5�<559�5/295;�./;�0.5�8577�5W15974S5�FE9;�38/77�<559�E75;A

Exhibit 2


�� !��"��

��#��$��"��$%��&'�"��!��$��(�%'&)*+ ��,

-./�011/023�45678�61./29�8.08�9/4:3:5;<�2/09:;=�85�8./�011/02�85�8./�>617/?/

@5678A

-./�B638:4/�C/1078?/;8<�048:;=�5;�D/.02E�5E�8./�F0D57�C/1078?/;8<�67=/9�8./

45678�85�80G/�8./�403/�0;9�7/H/73/�8./�762:;=�45;4/7;:;=�8./�3:IJK/07�380868/�5E

2:?:808:5;3A�L8�30:9�8.08�8./�87638//3�.09�0;�5D2:=08:5;�85�?5;:857�8./�:;H/38?/;8

4.5:4/3�8./K�M/7/�5EE/7:;=�85�/?125K//3<�0;9�35�:E�8./�E:964:07K�968:/3�M/7/�H:5208/9

DK�0�9/4:3:5;<�8./K�M/7/�H:5208/9�0=0:;�/H/7K�8:?/�8.08�9/4:3:5;�M03�;58�4.0;=/9A

NO5�1769/;8�E:964:07K�M5629�10K�E//3�8.08�07/�.:=./7�8.0;�;/4/3307K<P�8./

B638:4/�C/1078?/;8�07=6/9A�NQ;9�0;K�1769/;8�R7:30�E:964:07K�M5629�45;8:;6/�85

033/33�8./�1/7E57?0;4/�0;9�45383�5E�120;�:;H/38?/;83�0E8/7�8./�:;:8:02�4.5:4/�:3

?09/AP

R9:35;�07=6/9�8.08�5H/7867;:;=�8./�011/023�45678�762:;=�M5629�175H:9/�2:882/

1758/48:5;�E57�/?125K//3�D68�NM5629�;//92/332K�:;47/03/�120;�45383�0;9�8./7/DK

9:345670=/�120;�E57?08:5;<�6;9/7?:;:;=�R7:30S3�?538�:?15780;8�5DT/48:H/AP

>5�E07<�8./�E048�8.08�403/3�.0H/�D//;�E:2/9�0=0:;38�;6?/7563�120;3�95/3�;58�3//?

85�.0H/�9:345670=/9�8./�=75M8.�5E�UVWXGY�120;3A�@5?10;:/3�.0H/�D//;�0D0;95;:;=

9/E:;/9JD/;/E:8�120;3<�M:8.�8./:7�51/;J/;9/9�45383�:;�403/�:;H/38?/;83�95�;58

1/7E57?�M/22A�Q;9�45383�5E�UVWXGY�120;3�.0H/�D//;�9/42:;:;=<�01107/;82K�:;�7/315;3/

85�8./�8.7/08�5E�2:8:=08:5;A�R9:35;�97511/9�8./�9:3168/9�E6;93�K/073�0=5<�0E8/7�8./�36:8

M03�E:2/9A

Q8�8./�./078�5E�?0;K�5E�8./�403/3�E:2/9�DK�Z7A�>4.2:4.8/7�:3�8./�E048�8./�E:;0;4:02

45?10;:/3�:;H52H/9�:;�8./�UVWXGY�:;96387K�5E8/;�.0H/�;6?/7563�58./7�7/208:5;3.:13

M:8.�8./�/?125K/73�8.08�5EE/7�8./�120;3A�-.08�47/08/3�8./�5115786;:8K�E57�45;E2:483�5E

:;8/7/38<�:;�M.:4.�8./�45?10;:/3�45629�=/8�9:3456;83�5;�E//3�8./K�10K�E57�58./7

3/7H:4/3�:;�7/867;�E57�044/18:;=�.:=./7�E//3�85�D/�10:9�DK�8./:7�/?125K//3A

-./�=5H/7;?/;8�42/072K�.03�0;�:;8/7/38�:;�17/H/;8:;=�364.�45;E2:483A�[68�:8�0235

.03�0;�:;8/7/38�:;�0225M:;=�45?10;:/3�85�?0G/�7/035;0D2/�9/4:3:5;3�8.08�M:22�;58�D/

3/45;9J=6/33/9�:E�8./K�95�;58�867;�568�M/22A

Exhibit 2


�� !��"��

��#��$��"��$%��&'�"��!��$��(�%'&)*+ ,�,

-./�012�3143�5.15�67891:;/3�1</�/:5;50/=�57�378/�=/>/</:6/�;:�81?;:@�3A6.

=/6;3;7:3B�1�>165�5.15�5./�6.;/>�CA35;6/�/89.13;D/=�;:�5./�613/�6;5/=�E4�5./�0124/<3�>7<

F=;37:G�HA5�072/<�67A<53�.1I/�390;5�7:�CA35�.72�8A6.�=/>/</:6/�;3�21<<1:5/=B�1:=

5./�JA9</8/�K7A<5�;3�/L9/65/=�57�=/6;=/�015/<�5.;3�4/1<�2./5./<�;5�2;00�./1<�1:�199/10

67:6/<:;:@�5.15�;33A/G�-.15�613/B�;:I70I;:@�MHHB�1:�/0/65<;610�/NA;98/:5�67891:4B

213�1037�>;0/=�E4�O<G�J6.0;6.5/<G

P�Q�!�"��R��"��!�"%��!��"��!"��%��&�!��S��S��T��U��R�� !��V"�"��"��V�"��#��$

W�� !��"��X��

Exhibit 2


��

��!�"��#�$�� #%� ��&�&��'(�� )�� #�� )* %('+,& ��

��!�"��$��# ��-�%�.

/0123411567

89:;<=>;?<@:ABC<DEFGHIJKL>M@N>O<

PQN=RSTURVWX=NRVYXVW8=TUZ[\ZEFD

SC<>@MBCO<BM]]:_;:Ba<KMOb_<@cSC<O:@<A<<KQ:b>QM;Q:@DEFGHIb_>;\BC<

_<KK]>KCQ:J__C>d<A:@@<BM@<O<;Bc

YBM__\A<<KCM <;A@:OdM<e]>;O>H<MBC>@A:@DEFGHIC:_<@KB:AM;:BeC>B

BC<Q>@<b>QM;?cf_>;Kb:;K:@K\K>__Q>;<Ob_:Q<@\C>d<>AM ]M>@Q BQB:

K>A<?>@e:@H<@KJ@<BM@<O<;B>]]:;BKcPBKb:;K:@K:;JB>_e>QKbKCb@:dM<@K

_MH<O B>_A;KB:@< ]<A<<K:@]B]:KBKc

SC>BO>Qa<>a:BB:]C>;?<cX;W>@]CF[\BC<RM?CBCTM@]MBT:@B:A8bb<>_K

M;YBc9:MK>AAM@O<>_:e<@g]:@B@_M;?M;:;<:ABC<AM@KBDEFGHIA<<]>K<KB:?:B:

B@M>_ch;BC>B]>K<\BC<]:@BA:;BC>B8PPh;]c\>b:e<@>;>B:O>BM:;B<]C;:_:?Q

]:Ob>;Q\A>M_<B:O:;MB:@MBKb_>;JKM;B<@;>_]:KBK>;b>M<i]<KKMd<A<<KaQ;:B

;<?:BM>BM;?A:@@<a>B<KA@:OM;d<KBO<;B]:Ob>;M<KeC:K<A;Ke<@<:AA<@<M;BC<

b_>;cSCMK\BC<]:@BK>M\dM:_>B<8PPJKAM ]M>@Q BM<KB:BC<DEFGHIb>@BM]Mb>;BKc

SC<_:e<@]:@B>e>@<jFkcDOM__M:;B:BC<8PPb_>;b>@BM]Mb>;BKM;BC>Bb>@B

:ABC<]>K<c

Exhibit 3


��

��!�"��#�$�� #%� ��&�&��'(�� )�� #�� )* %('+,& ��

-./01231415635/748.109:;132/<8/3=0469>/?73=@AABC80/3=06D7E/94:;

F/0062/87D;630D730790/G/9?E./9/HC4?7:8.13I?7:JG/=73/?7:941=:5169?=:8?

01FD;?>?744/9132;7EK57084:3=06013G/08F/387D81730L8.13I62613B

-./0:1873>/.6;474@AAJ0D;63D698151D6380E6041;/=>?M/97F/MBN5.;15.8/9L6

D6983/968N5.;15.8/9A7269=OP/387313N8BQ7:10BN135/./>/2630:13257FD631/0

7G/941=:5169?461;:9/0/12.8?/690627L./.600/88;/=01<RSTUIV560/0L135;:=13273/0

6261308W/3/96;P?36F150LC38/93681736;X6D/963=Y68/9D1;;69B-./0/88;/F/380

.6G/2/3/968/=ZT[\F1;;173139/57G/91/087]SSLSSSD698151D6380LF13:0;/26;4//0L

63=0/5:9/=F6799/=:58173013D;63570804798./4:8:9/B_1G/F79/560/041;/=>?

`9BN5.;15.8/969/D/3=132a73/E60=10F100/=B

-./277=3/E04796;;RSTUIV.7;=/90108.689BN5.;15.8/9J0560/069/2613132

89658173138./57:980BQ60873=6?L8./N:D9/F/Y7:9801236;/=180138/9/08136560/

./41;/=6261308b=1073C38/93681736;L6Y6;1479316:81;18?Bb=1073.6=D;65/=D;63

D698151D638013.12.K57089/861;F:8:6;4:3=0E./35./6D/9130818:81736;5.715/0E/9/

6G61;6>;/L63=8./.12.57:9860I/=8./c318/=N868/007;1518792/3/96;870868/8./

27G/93F/38J0G1/E0738./100:/0138./560/B

d@08./0/560/0.6G/D9729/00/=63=8./0/88;/F/380755:99/=LF79/:=2/069/

:3=/90863=1328./D965815/063=8./.69F879/819//0Le9BN5.;15.8/9061=Bd@>7=?

74;6E10=/G/;7D132L0/881327:841=:5169?D965815/063=0863=69=0Be

b65.560/=144/90L>:8F70813G7;G/.12.63=748/3.1==/34//0;/G1/=73RSTUIV

D698151D6380B@3/<6FD;/108./560/13G7;G1328.//FD;7?//9/819/F/38D;6374

Q75I.//=69813L8./F1;1869?5738965879BQ75I.//=J0D;631073/748./368173J0

;692/08LE18.TSSLSSSD698151D638063=Z[[>1;;17313600/806074P/5/F>/9[ST[L8./

F7089/5/38D:>;15412:9/06G61;6>;/BN868/N89//8A63I63=-9:0865806013G/08F/38

F6362/963=89:08//878./D;63B

_79?/690L9BN5.;15.8/9061=LQ75I.//=7441516;06;;7E/=N868/N89//8879/5/1G/

;692/63=.1==/34//0497FD;6313G/08F/380136==181738763633:6;9/579=KI//D132

4//74ZRF1;;17387ZfF1;;173BX;63D698151D6380L./5738/3=0L;708.:3=9/=074

F1;;173074=7;;6906069/0:;8B

g

Exhibit 3


��

��!�"��#�$�� #%� ��&�&��'(�� )�� #�� )* %('+,& &��

-./.0-.100./234542205.0670037418/9/:;9:/908<24=00;9>03.809.4<.;49

549./;9;9:492=?45@A0063A/103/965/3AB-;9:20C3.45@<41.742;432;@0.A;3.=<;5/22=

649D.10EF;108F5A8/9/:0809.BGF.-./.0-.100.1050;>067003.4./2;9:HBHI<01509.

47.A0JKL;22;49C<2F33.45@7F960/5A=0/1M645F809.3;9.A02/N3F;.3A4NBO96.A0

5/3A;9.A0?45@A0067F96N09.;9.4/-./.0-.100.;9>03.809.7F96MNA;5A:0901/.06

84107003741.A0L/9@B

-./.0-.100.D36F/214203MP1B-5A2;5A.01549.0963M/224N06;..46;5./.0A4N8F5A

5/3AN4F26L0A026/96.4</=;.3027.48/9/:0.A/.5/3AB

QA0?45@A0065/30M7;206;9IHHKM8/=7;9/22=A0/6.4.1;/2.A;3=0/1BR41649

S4A96140M/3<4@038/9741.A0548</9=M3/;6;9/3./.0809.TU?45@A006P/1.;9

L02;0>03/22/220:/.;4938/60L=<2/;9.;773D54F9302/107/230/96108/;935488;..06

.4607096;9:/:/;93..A;32/N3F;././223./:0347.A02;.;:/.;49BV

O3<4@03N48/9741-./.0-.100.;33F06/3./.0809.3/=;9:.A/..A07;18A/694.

L0093F06/96.A/.UN03.149:2=609=/9=/220:/.;493.A/.N01050;>06F910/349/L20

7003741301>;503.A/.N0<14>;606.4.A0<2/93BVQA03./.0809.549.;9F06TUW0/10

5488;..06.48/@;9:7F226;35243F103.44F152;09.310:/16;9:.A030301>;503/96.A0

.018349NA;5A.A0=/10<14>;606BV

X/3035/9L0543.2=.42;.;:/.0BOGGM7410Y/8<20MA/33<09.JZI8;22;4949

2/N=013D7003607096;9:.A08/..01M54F1.10541633A4NBQA/.8/=L0/10/349.A/.

P1B-5A2;5A.01D37;18;3>;1.F/22=/2490;9L1;9:;9:.A030ZH[\@]5/303B-0>01/270601/2

F6:03A/>02;@0906A;8.4/<1;>/.0/..4190=:0901/2B_;37;18M490F6:03/;6MA/3

1;3@06UL10/.A./@;9:/84F9.347.;80/968490=NA;204>01548;9:8/9=4L3./5203

741.A0L0907;.4708<24=003/9610.;1003BV

X43.3/>;9:37148.A03030..20809.35/9L03;:9;7;5/9.B9.A0X/.01<;22/15/30M

/90Y<01.N;.903303.;8/.06.A/..A0<2/9D35A/9:0354F26:0901/.0JaK8;22;49;9

3/>;9:34>017;>0=0/13B

G/..203/:/;93.ZH[\@]<2/93<493413.A/./103489/8LF2/9.41N4130/10

L1;9:;9:/8F5AC9006063<4.2;:A..4EF03.;49/L20<1/5.;503;9.A030<2/93BGF.490

38/222/N7;185/964492=348F5AB

Exhibit 3


��

��!�"��#�$�� #%� ��&�&��'(�� )�� #�� )* %('+,& ��

-./0123415.67891:.83;1<3.67=3>3/.?3>7</.@.></3:A.</:7</78/7<B11C

81A.312;.3318/DE/:701/;.<FG>?4.1AH8=:7F?>3123I7J7<1.@.></3K=<0>/3.<2

.<73418.@.></3341L.3>7<.AM=8.ANA1?38>?O77:18.3>P1E//7?>.3>7<D

H7@13418F347/1;.3318/@1<18.31281?7P18>1/7BQRSDT;>AA>7<37:A.<

:.83>?>:.<3/DG8DH8=:7.221234.334121:.83;1<3U/B112>/?A7/=818=A1/F:=3><:A.?1

><RVWRF4.P128>P1<27I<?7/3/B78:.83>?>:.<3/D

X>34347=/.<2/7B?7;:.<>1/7BB18><@:A.</?7P18><@;>AA>7</7B?=881<3.<2

B=3=81813>811/FA13U/47:13415.67891:.83;1<3/31:/>3=:D

�Y ��%) �!! ��!��Z��%�&�[��[��\�� ] �� _�� _)�� "�� #

�� a� !��$

Exhibit 3


5/18/2015 Stern Advice-How 401(k) lawsuits are bolstering your retirement plan | Reuters

http://www.reuters.com/article/2013/11/05/us-column-stern-advice-idUSBRE9A40S320131105 1/4

EDITION: SIGN IN REGISTERU.S. Search Reuters

Related: MONEYPersonal | Tue Nov 5, 2013 3:03pm EST

Stern Advice-How 401(k) lawsuits are bolstering yourretirement planNEW YORK | BY LINDA STERN

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013.REUTERS/CARLO ALLEGRI

Jerome Schlichter, the St. Louis attorney credited with literally making a federal case out of401(k) fees, just filed his 14th class action against a company he claims mismanaged itsemployees' retirement savings.

The lawsuit, filed Tuesday in U.S. District Court in Massachusetts against MassachusettsMutual Life Insurance Co, states that the firm "larded" its 401(k) program with overpricedand inferior investments and engaged in "blatant self-dealing" by making money selling itsown services to the plan.

"We will defend vigorously against these baseless allegations," Patricia Norris Lubold, aspokeswoman for MassMutual, said in a statement emailed to Reuters. "We believe thecomprehensive retirement benefits we offer our participants help them save toward asecure financial future."

Coming a year after new Labor Department rules requiring employers to clearly disclose401(k)fees to participants, the case filed by the firm of Schlichter, Bogard and Denton is asign that retirement plan litigation isn't going away. It's also a sign that employee-fundeddefined-contribution retirement plans still are imperfect, despite improvements andincreasing attention from regulators and activists like Schlichter.

Mike Alfred, co-founder and chief executive officer of Brightscope, a firm that collects andpublishes data about company retirement plans, says 401(k) fees have been coming downfor years, thanks to pressure from Schlichter.

HOME BUSINESS MARKETS WORLD POLITICS TECH OPINION BREAKINGVIEWS MONEY LIFE PICTURES VIDEO

Exhibit 4




"His impact has been humongous," Alfred said.

From 2009 to 2011, for example, fees have come down roughly 0.3 percentage points insmall, medium and large plans, he said. They've come down further than that since 2011,but final data isn't in yet.

Still, not every employer has cut plan fees, and there are issues beyond costs that remainof concern to 401(k) participants and their advocates.

The costs and practices of 401(k) plans are important consumer issues because the plansincreasingly supplant traditional employer-provided pensions. Workers use them to savetheir own money for retirement, and employers who provide plans have a fiduciaryresponsibility to offer good investment choices to their workers.

"We continue to see excessive fees being paid, and we also continue to see self-dealing,"says Schlichter, who since filing his first related case in 2006 has been awarded some$175 million in 401(k) fee litigation against seven companies including Caterpillar Inc,General Dynamics Corp and Cigna Corp. "We also see poor selection of funds in the planfrom a performance standpoint."

So watch that space - and watch your 401(k) plan for signs of too many costs, too fewchoices or the feeling that you're being pushed one way or another when you makedecisions.

For 401(k) participants, the news does keep getting better. Here's what the next wave oflitigation should bring.

- Fees are likely to keep falling. If you work for a large company, you should see averageannual management fees for the funds in your plan already below 0.5 percent - and theyshould be headed lower. Smaller companies have to pay more for plan management andthe funds in their plans, so average fees are higher, but they have fallen below 1 percentand should be closer to 0.9 percent now, according to Brightscope data.

Remember that fees matter - an additional 1 percent fee imposed over 35 years ofinvesting would cut a 401(k) account by 28 percent because of compounding, the LaborDepartment has estimated.

If you can't find low-fee funds within your plan, talk to your boss or the person at yourcompany charged with overseeing the plan.

- Advice may improve. The Labor Department has stalled on rules that would requireretirement plan advisers to be fiduciaries with the responsibility of putting the interests ofplan participants above their own. But plans already do have fiduciaries - the employerswho offer the plans to their workers have legal responsibilities to those workers, andlawsuits like the ones Schlichter files are making employers more conscious of those theyhire to choose investments for the plan and to advise employees in the plans, says Alfred.

"The next issue may be the role of advisers in the small plan market," says Sean Hanna,editor of The 401(k) Wire, a trade publication that regularly puts Schlichter on its list ofbiggest 401(k) influencers.

Those advisers choose the funds that are offered inside the plans, but they also may bethe ones presenting employees with their options when it's time to retire or change jobs.That's an issue that could be fraught with conflict as workers try to decide whether to keeptheir money in their 401(k) or move it to an outside firm like the one sending the advisers.

Exhibit 4




Back to top

Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index

More from Reuters Reuters News Agency Brand Attribution Guidelines Delivery Options

Support & Contact Support Corrections

Account Information Register Sign In

Connect with Reuters Twitter Facebook Linkedin RSS Podcast Newsletters Mobile

About Privacy Policy Terms of Use Advertise With Us AdChoices Copyright

- Investment choices will change. They already have, as 401(k) plans now regularly offerlow-cost index funds to participants. But company sponsors (the employers) will be underincreasing pressure to get cheaper funds in their plans because of the 401(k) fee litigation,says Alfred. That may result in fewer actively managed mutual funds being on the menuand more alternative products like exchange traded funds showing up in retirement plans.

- You may find yourself really happy with your plan. The biggest and best plans alreadyoffer low fees and matching employer contributions to employees who might otherwise belost trying to plan and save for their retirements - and the matching contributions aregetting higher. Says Ed Ferrigno, vice president of the Plan Sponsor Council of America,which is made up of employers: "What really gets lost is that for probably half of the planparticipants out there, they are getting better fees than they can get anywhere else. Andthat's before the match, so it's a great deal."

(Linda Stern is a Reuters columnist. The opinions expressed are her own. The SternAdvice column appears weekly, and at additional times as warranted. Linda Stern can bereached at [email protected]; She tweets at www.twitter.com/lindastern .;Read more of her work at blogs.reuters.com/linda-stern; Editing by Douglas Royalty)

Exhibit 4


5/55 18/88 2015 Stern AdAA vice-Howoo 401(k) lawaa suits are bolstering your retirement plan | Reuters

htttt p://// w// ww.reuters.com/article/ee 2013/33 11/05/55 us-column-stern-advice-idUSBRE9A99 4AA 0S320131105 4/44 4//

Our Flagship financialinformation platformincorporating ReutersInsider

An ultra-low latencyinfrastructure forelectronic trading anddata distribution

A connected approach togovernance, risk andcompliance

Our next generation legalresearch platform

Our global taxworkstation

Thomsonreuters.com

About Thomson Reuters

Investor Relations

Careers

Contact Us

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personalfinance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requiresfair presentation and disclosure of relevant interests.

NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Exhibit 4


Exhibit 5


Portfolio Media. Inc. | 111 West 19th Street, 5th floor | New York, NY 10011 | www.law360.comPhone: +1 646 783 7100 | Fax: +1 646 783 7161 | [email protected]

What I t Takes To Earn Top Dollar In The Rate-Crunch Era

By Natalie Rodriguez

Law360, New York (June 10, 2016, 5:01 PM EDT) --

Meet The $2,000 An Hour Attorney

By Natalie Rodriguez

June 11, 2016

He’s the one clients trust to get the job done. He’s at the top of his game. And when

companies find themselves facing business-threatening litigation or high-stakes

transactions, many in-house counsel have him on their short list of go-to attorneys

— and are willing to pay him big bucks for the right result.

Meet the $2,000 an hour attorney, a member of the new elite club of lawyers

commanding 25 percent more than the top hourly rate reported just a year ago,

even as GCs otherwise push down on billing rates.

The top earners stand on one side of a widening rate chasm in the legal industry, in

certain circumstances making double the hourly rate of other successful attorneys

and as much as four times the average hourly rate. And they are prized assets to

law firms, not only for their ability to bring in top-dollar business but also for their

reputational cachet, which helps firms secure a high volume of regular, steady work.

Rate Creep

Exhibit 6


It was just five years ago that the industry was stunned by the Wall Street Journal

revelation that some top-tier attorneys had broken the $1,000 per hour benchmark.

Then, earlier this year, BTI Consulting Group found that a handful of in-house

counsel had paid as much as $2,000 per hour, after discounts, to attorneys in the

past year. Several other in-house counsel, meanwhile, had paid highs of $1,900 per

hour or $1,800 per hour.

“They don’t pay it very often,” said Michael Rynowecer, president of BTI Consulting.

“These are unique matters, and they are matters they hope they don’t encounter

very often.”

* All attorneys pictured were identified as elitepractitioners who in-house counsel and expertssaid could merit top rates. The attorneys’ hourlyrates were unavailable.

Exhibit 6


The rapid ascent of the top hourly rate stands in stark contrast to the stagnation in

billing rates overall.

Hourly work rate growth nosedived about eight years ago, going from 7.6 percent

growth at the end of 2007 to 5.8 percent at the end of 2008, according to Thomson

Reuters Peer Monitor data. In 2012, growth in the average hourly work rate after

negotiations and discounts across lawyer segments — including equity and

nonequity partners, as well as associates — came in at 4 percent. This growth rate

slowed at steady intervals — 3.5 percent in 2013 and 3.1 percent in 2014 —

ultimately hitting 2.7 percent in 2015, according to Leonard Lee, an analyst with

Thomson Reuters Peer Monitor. So far this year, the market has seen a small

rebound with work rate growth of 2.8 percent.

“Overall for large law firms across all the segments, we have seen a gradual

deterioration of work rates,” Lee said.

Much of this has to do with the fact that corporate clients burned by the economic

downturn have gotten thriftier and are increasingly putting pressure on law firms to

keep rates down — at least when it comes to lower-level, more commoditized work,

experts say. At the same time, however, clients are willing to pay top dollar to

ensure that high-level or complex work is done efficiently by the right lawyer

because they believe that will save them more in the long run.

There are “simultaneously two things going on: One is a flight to quality, and one is

a flight to economy,” said Janet Stanton, a partner at law firm economic consulting

firm Adam Smith Esq. LLC.

In the years since elite attorneys broke past the $1,000 per hour mark, the mean

hourly rate for partners has gone from $490 per hour in 2011 to $528.72 per hour

in 2014, according to Real Rate Report data provided by Wolters Kluwer. The mean

hourly rate for associates between 2011 and 2014 has gone from $341.75 per hour

to $367.46 per hour.

Exhibit 6


The elite attorneys who can command $2,000 or more per hour stand a long

distance from the average attorney — and even from the above-average attorney.

Wolters Kluwer data, for example, suggests that the third quartile of partners raked

in about $700 per hour in 2014, while recent data from a LexisNexis CounselLink

Enterprise Legal Management Trends report released in May showed that M&A

partners in the 90th percentile billed an average of $1,032 per hour.

But experts say that the very top of this select group can rake in rates double or

more if the right legal matter presents itself.

How Value Is Structured

Nearly a decade ago, Tom Mars was part of the Wal-Mart legal team that decided to

hire Ted Olson and Ted Boutrous from Gibson Dunn & Crutcher LLP to replace

existing counsel defending the company against a sex-bias class action effort led by

Betty Dukes, which had already made it to the Ninth Circuit and would go to the

U.S. Supreme Court. While Mars declined to disclose the exact rate being paid to the

lawyers, he noted it was in excess of $1,000 per hour.

Exhibit 6


Then, one day, he placed a call to Ken Doran, the managing partner of Gibson Dunn.

“Ken, I’ve been thinking a lot about the rates we’ve been paying Ted Olson and Ted

Boutrous, and I’d like to talk to you about making an adjustment,” Mars recalls

saying. “I hope we can agree on this without taking it to the committee.”

There was a long pause before Doran started to go into why he thought the rates

were justified. But Mars interrupted him.

“Ken, I don’t think you understand. I want to raise the rate,” Mars recalls saying.

Specifically, Mars was asking to bump the rates up by about $200 and wanted to

make sure that would be the highest rate the duo was earning from any client,

“because when they get up in the morning and their feet hit the floor, I want to

Exhibit 6


make sure they are thinking about the Dukes case and not any other case that

charges a higher fee.”

It would be the highest rate they were paid. “Wal-Mart doesn’t just throw money

around,” Mars noted. “This was an exception … [and] when the Supreme Court

unanimously dismissed that action, I didn’t hear anybody complaining about that

rate.”

The episode speaks to the internal calculations that corporate GCs often make when

confronted with a high-stakes legal issue, where making sure the matter is handled

well and efficiently is worth paying top rates.

“The real issue is ‘value’ for every dollar spent,” legal industry consultant Edwin

Reeser noted. “No lawyer is worth $2,000 per hour for every hour they work. Not

today. Some lawyers. Some matters. Some discrete issues, OK.”

For Mars, there are only three situations in which he would be willing to pay top

rates: when a case is going to be argued before the U.S. Supreme Court, when

facing bet-the-company litigation, and when defending against a criminal

indictment.

Others, however, added that $2,000 an hour could also be commanded by top M&A,

antitrust or structured finance attorneys whose expertise and advice on a matter

could make or break a high-stakes deal. Former regulators or former judges who

can provide key insight on a key legal matter might also make that much.

“For five hours of somebody’s time that could save [a company] millions, that could

certainly be worth $2,000 per hour,” said Ken Callander, founder of corporate law

consulting firm Value Strategies.

According to the BTI survey, in-house counsel who paid $2,000 per hour did so for

select matters, ranging from IP and M&A litigation to government investigations and

activist hedge fund work. And in each case, the attorney or one of their close firm

peers had an existing working relationship with the company.

Exhibit 6


“When it came to this very large or risky matter, they were already in the

conversation,” BTI’s Rynowecer said.

For a client to pay these kinds of rates — even on select matters — there has to be

a trust in the lead attorney’s ability to affect the outcome of a legal matter.

“If you have a top partner who is a big difference maker and you can see that

partner making a difference in your case and the stakes are high — which

oftentimes they are — I think clients will pay just about anything to get things done

months or years faster,” said Mark Jungers, co-founder of legal recruiting firm

Lippman Jungers LLC.

That trust, however, no longer automatically continues down the ranks to the

support attorneys, noted Bruce MacEwen of Adam Smith Esq. The same client that

Exhibit 6


is happily paying top dollar for a lead partner may push back against paying $300

per hour for junior associates.

Several other experts echoed this point, though they pointed to $600 or $700 per

hour as associate rates that would get pushback from in-house counsel. Seeing

those rates for junior attorneys, who in some cases haven’t been introduced or even

mentioned to the client beforehand, can get general counsel apoplectic when they

get a legal bill, experts said.

“What drives my cost is not the number of hours that the top person is charging per

hour. I’d rather have that than 10 associates,” said Brian Brooks, general counsel for

Fannie Mae. “The reason he or she is charging that is because he or she has the

ability to get things done faster.”

Who Is the $2,000 Per Hour Attorney?

There is no definitive list, but Law360 has drawn up a list of general characteristics

— as well as a list of potential top earners — based on a series of interviews with

market experts and in-house counsel.

Jungers, who calls the $2,000 an hour lawyers “difference makers,” says they are

worth paying more for upfront to avoid drawn-out matters and larger legal bills at

the end.

Exhibit 6


“Jumbo rates are being created by lawyers people think or know can make a real

difference,” Jungers said. “I think if you are a major corporation and you have a

case in the Supreme Court and you want Paul Clement to argue it, you pay. He is a

difference-making kind of lawyer.”

The Supreme Court or appellate superstar is commonly top-of-mind when experts

consider the elite attorneys who can make top dollar. Bancroft PLLC’s Clement —

who has argued over 80 cases before the high court in his career — and Gibson

Dunn’s Olson were named by multiple experts as worth $2,000 in certain high-

stakes matters.

Representatives for Clement and Olson did not confirm or deny whether the

litigators have hit the $2,000 per hour mark, though Olson is on record in

Exhibit 6


LightSquared Inc.’s bankruptcy proceedings as having charged $1,800 per hour for

just over seven hours of consulting on the complex restructuring over a three-year

period spanning from 2012-15.

Widening out the pool of attorneys who can make top rates are those who are

considered to have niche expertise that can impact a case or a deal.

These are the people you call when “you know there is a very narrow market in

what you’re doing, and you know that there are only one or two lawyers in the world

that [can handle the matter],” Fannie Mae’s Brooks said.

Brooks declined to name attorneys who could possibly command top rates, but

others pointed to antitrust guru David Boies, restructuring expert James H.M.

Sprayregen of Kirkland & Ellis LLP, Silicon Valley fixture Gordon Davidson of Fenwick

& West LLP, and intellectual property expert Morgan Chu of Irell & Manella LLP as

attorneys who could be considered worthy of a jumbo rate if the right matter

presented itself. Representatives for these attorneys either declined to comment or

did not respond to requests for comments.

Exhibit 6


There are most certainly just a handful of an elite group of top tier experts, ranging

across a spectrum of practice areas, who can be considered worthy of a $2,000 or

more per hour rate in the face of bet-the company litigation, government probes or

other high-stakes matters.

Mars calls the select group of attorneys whom he would consider tapping in such

situations “lifeboat lawyers.” Among those he named were Susman Godfrey LLP’s

Neal Manne, who has defended Wal-Mart in some of the largest proposed class

actions in the country and represented a range of companies in antitrust, intellectual

property and insurance coverage disputes.

He also pointed to white collar attorney John Everett, Akin Gump Strauss Hauer &

Feld LLP’s Kim Koopersmith and Greenberg Traurig LLP’s Brian Duffy. Duffy

Exhibit 6


impressed the former GC over the years with his attention to client matters — both

on the legal and business end. “[Duffy] expressed a highly unusual interest in

putting the client first. Achieving higher rates and creating higher invoices was

obviously not on his priority list. … He became someone I would rely on extensively

if I had a difficult situation that I needed legal counsel,” Mars said.

A representative for Koopersmith did not respond to a request for comment.

Duffy and Everett insist they don’t charge $2,000 per hour.

“I don’t think anybody is worth $2,000 per hour,” said Everett, who fields a mix of

civil and criminal litigation from his Fayetteville, Arkansas base. The longtime lawyer

is opposed to advertising — the four-member firm does not have a website — and

receives much of its business through referrals from other lawyers.

To Mars, they are nonetheless worthy of making $2,000 an hour in the right

situation.

“They have an extra gear. … This is a profession where there is plenty of competition

and no shortage of really smart people,” Mars said. “All the people I mentioned are

insanely smart, but they also have some gift: a way of sizing up situations, seeing

around corners, a straightforward transparent way of communicating.”

And it’s these skills that qualify them for the rare spot of being on the short list of

lifeboat lawyers, whose hourly rate is worth the price.

“If you choose the right lawyer, they are priceless,” Mars said.

Value Billing

Pricing and payment, however, are eventually part of the equation. While some

attorneys can and do make $2,000 or more per hour as a straight hourly rate,

others are hitting this benchmark through what some call “value-based billing.”

Exhibit 6


In these arrangements, there are often success fees or bonuses built into an

alternative fee arrangement that incentivizes the lawyer to do a good job quickly

and can lead to a big payday for the attorney when one computes the hours put into

the matter against the actual fee.

Manne, for one, rarely does matters on an hourly basis. But “because I handle cases

on alternative fees, there are cases where the outcome is a lot more than $2,000

per hour,” he said.

In general, there is more movement toward alternative fee structures in the

industry. Last year, an Altman Weil survey of law firm heads showed that 93.3

percent of large and medium-size firms use non-hourly based billing. And while only

88.2 percent of firms with fewer than 100 attorneys use non-hourly billing, 100

percent of firms with 500 or more lawyers employ non-hourly billing. Those larger

firms generated a median of 15 percent of their fees from non-hourly billing.

Exhibit 6


Most alternative fee arrangements are done with the idea of cutting costs for the

clients — think discounted rates or blended fees — and the arrangements don’t

always compute into a good deal for law firms. Firms that are generally doing these

arrangements in reaction to client pressures more often consider them less

profitable than hourly billing rates, the Altman Weil survey showed.

But the subset of alternative fee arrangements known as value-based billing can be

profitable in the hands of the right attorneys and beneficial for both the attorney

and the client, experts say. For example, if an arrangement includes an incentive to

get a potentially company-damaging case dismissed in the early stages, the

company doesn’t focus on the larger attorney bill but on what it saved from beating

the claims.

Exhibit 6


“You can save hundreds of thousands, if not millions, of dollars by not letting it go

into discovery,” said Callander of Value Strategies.

Similarly, some clients may offer success fees if a specific count is dismissed that

will significantly reduce potential liabilities or the size of a potential class.

“It might be worth adding a success fee at that point. It’s all based on value,”

Callander said. “Whereas, if it’s a case that should be pretty much a slam dunk, we

might not offer any success fee.”

Sometimes, these arrangements are done on a more fixed-fee basis that only

proves profitable for the attorney if he or she can be efficient. Say, if a client is

willing to pay $1 million to resolve an issue and a lawyer takes $500,000 worth of

time and effort to make it happen, there is a significant margin he or she can then

collect on, Reeser noted. But if it takes the lawyer $1.5 million to do the same job,

then that lawyer is going to take a hit.

No lawyer is worth $2,000 per hour for every hour they work. Not today. Some lawyers.Some matters. Some discrete issues, OK.

—Edwin Reeser, legal industry consultant

In these arrangements, efficiency and strategy can be key. Manne, for example, said

he likes to keep his trial teams lean — often just a partner and an associate, or four

to five people at the most in what he considers “mega-cases.”

“I think my firm and I are extremely valuable to hourly clients because we are

extremely efficient. There is no fat in what we are doing,” said Manne, who noted his

teams often find themselves facing off against groups of up to 15 litigators in mega-

cases.

Still, there are some high earners who can do work on a matter without a payment

plan in place.

“The very top lawyers at certain firms and in certain fields don’t charge hourly fees

and don’t charge alternative fee arrangements,” Brooks said. “They get it done, and

Exhibit 6


they send you a bill [afterwards] — and they expect you to pay what is fair based on

the value that you think you received.”

The attorneys who can get away with this are the ones who provide a high degree of

certainty to the client just by being part of the legal matter, whether it’s litigation or

a deal, Brooks said. And if the company is happy with the result and wants future

access to the lawyer, that bill usually gets paid.

The Future

Several experts said they expected to see the gap between the lower rate billers and

elite billers continue to grow at both the attorney and firm level.

So far this year, top firms are increasing their rates faster than smaller firms, Lee

noted. And while equity partners at the bottom half of the Am Law 200 firms are

showing small rate increases compared with nonequity partners and associates —

possibly because of an effort to boost firm margins and overall profitability — the

rate growth among all classes in the Am Law 100 is pretty even.

The numbers seem to bolster theories that the industry’s middle ground is getting

erased as clients put pressure on firms to cut rates on commodity work but still

show a willingness to pay top price for high-level experts.

“We see it accelerating at the expense of firms that are neither fish nor fowl,” said

MacEwen, who noted that firms and attorneys working in the middle ground must

start to choose what billing level — higher or lower — that they want to try to

compete on.

On the individual attorney level, rates are likely to keep climbing — though relatively

slowly. Last year, 59.5 percent of law firm managing partners and chairs polled by

Altman Weil said they thought smaller annual billing rate increases were a trend that

was here to stay permanently, while only 19 percent said it was a temporary trend.

The rest said they weren’t sure.

Exhibit 6


And those working the more average rates are often being undercut by both

inflation and issues with collecting on those rates — as clients sometimes negotiate

bills down further after the fact and as some firms agree to write off a certain

percentage of bills because of client pressures. These trends mean that in some

ways, average attorneys are losing ground in the billable-hour scale even as billing

rates technically creep up, experts say.

“We know from industry statistics that given the realization in constant dollars,

prices are going down,” MacEwen said.

If you choose the right lawyer, they are priceless.—Tom Mars, former Walmart general counsel

Meanwhile, however, the top lawyers will most likely continue to gain steady ground

as clients continue to face company-threatening matters. Top London lawyers

surpassed the $2,000 per hour mark a while back, though it has gone largely

unnoticed because of the pound conversion, several experts noted.

For law firms, being able to boast one or more of the $2,000 an hour attorneys can

pay off in spades, experts say. Even though that lawyer won’t necessarily be making

the top rate on every matter, the attorney’s depth of expertise and reputation for

handling the most complex and high-risk situations helps cast a glow on the whole

firm.

These top attorneys also help breed strong client relationships and loyalties. Many

have long-term relationships that bring in a solid flow of lower-rate work, which

eventually develops into the top-rate high-stakes work.

“There are three rules that matter: client first, client first and client first. That’s

what it’s all about,” Reeser said. “When it’s clear that’s the case, you get these

companies where they know they can trust you with their most critically sensitive

matters.”

Reaching the new top hourly rate is akin to a musician reaching rock star status —

where money becomes less of an object when the stage is large enough and

Exhibit 6


important enough, experts say.

“If a lawyer has a proven capability to provide that kind of guidance, it’s worth that

weight in gold,” Stanton said.

Natalie Rodriguez is a feature reporter who regularly covers the legal industry.

Follow Natalie on Tw itter.

All Content © 2003-2017, Portfolio Media, Inc.

Exhibit 6


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA


CORPORATION ERISA

LITIGATION.

THIS DOCUMENT RELATES

TO:

All Actions


[PROPOSED] ORDER GRANTING PLTFS’ MOT. FOR ATTYS’ FEES, REIMBURSEMENT OF EXPENSES, AND INCENTIVE AWARDS FOR CLASS REPRESENTATIVES Hon. André Birotte Jr. Final approval hearing: October 23, 2017, at 10:00 a.m.

Courtroom 7B


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CASE NO. 06-CV-6213 AB (JCX) -1- [PROPOSED] ORDER GRANTING PLA’

MOT. FOR ATTYS’ FEES

Before the Court is Plaintiffs’ motion for attorneys’ fees, reimbursement of

expenses, and incentive awards for class representatives. In the motion, Class

Counsel, Schlichter, Bogard & Denton, LLP (“SBD”), requests this Court’s

approval for a fee relating to its role and significant contributions in obtaining a

settlement of class claims as identified in the Settlement Agreement. Doc. 766-2. In

support of this motion, Plaintiffs have submitted the declarations of Jerome J.

Schlichter, Stephen M. Hoeplinger, Sheri O’Gorman, Karen W. Ferguson of the

Pension Rights Center, and Thomas R. Theado.

The settlement provides a $16.75 million monetary recovery for the

approximately 210,000 current and former participants of the Northrop Grumman

Savings Plan (“NGSP”) and Financial Security and Savings Program (“FSSP”)

(collectively, the “Plans”). This settlement was reached after more than 10 years of

litigation, including Plaintiffs’ successful appeal from this Court’s initial denial of

class certification, partially defeating Defendants’ motion for summary judgment,

and only after trial had begun.

SBD has requested an award of attorneys’ fees in the amount of $5,583,333 (1/3

of the $16.75 million settlement fund), as well as reimbursement of its reasonable

costs and expenses in the amount of $1,159,114. SBD also requests this Court to

approve $25,000 incentive awards to class representatives Gary Grabek, Julie

Spicer, Mark Geuder, and Dwite Russell.

SBD has zealously represented the participants and beneficiaries of these

retirement Plans and enforced important rights under ERISA. After nearly 11 years

of litigation, they have obtained through settlement an outstanding result for the

class. Their requested fees and expenses are reasonable for a case such as this one,

requiring national expertise and uncommon fortitude. For the reasons explained

below, the motion is GRANTED.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



FINDINGS AND CONCLUSIONS

A. Attorneys’ fees.

SBD is entitled to reasonable attorney fees and litigation expenses from the

$16.75 million common fund. Fed.R.Civ.P. 23(h); Staton v. Boeing Co., 327 F.3d

938, 967 (9th Cir. 2003)(quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478

(1980)). The Court has discretion over the amount of the fee to award. Vizcaino v.

Microsoft Corp., 290 F.3d 1043, 1048 (9th Cir. 2002); In re Pacific Enters. Sec.

Litig., 47 F.3d 373, 379 (9th Cir. 1995). The Court can award a percentage of the

settlement fund as the attorney fee so long as that percentage is reasonable. Stanger

v. China Elec. Motor, Inc., 812 F.3d 734, 738 (9th Cir. 2016); In re Online DVD-

Rental Antitrust Litig., 779 F.3d 934, 953 (9th Cir. 2015).

The Ninth Circuit has set a 25% “benchmark” for fee awards in common fund

cases. Vizcaino, 290 F.3d at 1047. However, that benchmark is “a starting point for

analysis” and “may be inappropriate in some cases.” Vizcaino, 290 F.3d at 1048;

see also Online DVD-Rental, 779 F.3d at 955 (“While the benchmark is not per se

valid, it is a helpful ‘starting point.’”). The Court’s award must be reasonable and

“must be supported by findings that take into account all of the circumstances of the

case.” Vizcaino, 290 F.3d at 1048. Courts can award a 1/3 fee, and have for

settlements larger than this one, in light of the complexity of the case and the risks

undertaken by plaintiffs’ attorneys. Pacific Enters., 47 F.3d at 379 (approving 1/3

fee from a $12 million fund); In re Heritage Bond Litig., No. 02-ML-1475-DT,

2005 U.S.Dist.LEXIS 13555, *58, 74 (awarding 1/3 fee from $27.8 million fund);

In re Pub. Serv. Co., No. 91-536, 1992 U.S.Dist.LEXIS 16326, *19–21 (S.D. Cal.

July 28, 1992)(awarding 1/3 fee from $33 million settlement). Most common fund

fee awards exceed the 25% benchmark. Knight v. Red Door Salons, Inc., No. 08-

1520, 2009 U.S.Dist.LEXIS 11149, *17 (N.D.Cal. Feb. 2, 2009)(citations omitted).

Class action fee awards average around 1/3. Id. (quoting Romero v. Producers


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



Dairy Foods, Inc., No. 05-0484, 2007 U.S. Dist. LEXIS 86270, *4 (E.D.Cal. Nov.

14, 2007)); see also Multi-Ethnic Immigrant Workers Org. Network v. City of Los

Angeles, No. 07-3072-AHM(FMMx), 2009 U.S.Dist.LEXIS 132269, *10–11

(C.D.Cal. June 24, 2009) (“Nationally, the average percentage of the fund award in

class actions is approximately [1/3].”).

In virtually every 401(k) fiduciary breach action in which SBD has obtained a

settlement, courts have awarded 1/3 of the monetary settlement as SBD’s fee. See

Gordan v. Mass. Mutual Life Ins. Co., No. 13-30184, Doc. 144 at 7 (D.Mass. Nov.

3, 2016)($33.9 million settlement); Kruger v. Novant Health, Inc., No. 14-208,

Doc. 61 at 14–17 (M.D.N.C. Sept. 29, 2016)($32 million settlement); Spano v.

Boeing Co., No. 06-cv-743, Doc. 587 at 4 (S.D.Ill. Mar. 31, 2016)($57 million

settlement); Krueger v. Ameriprise Fin., Inc., No. 11-2781, 2015 U.S.Dist.LEXIS

91385, *8–9 (D.Minn. July 13, 2015)($27.5 million settlement); Abbott v Lockheed

Martin Corp., No. 06-701, 2015 U.S.Dist.LEXIS 93206, *7–8 (S.D.Ill. July 17,

2015)($62 million settlement); Beesley v. Int’l Paper Co., No. 06-703, 2014

U.S.Dist.LEXIS 12037, *7, 10 (S.D.Ill. Jan. 31, 2014)($30 million settlement);


(C.D.Ill. Oct. 15, 2013)($35 million settlement); George v. Kraft Foods Global,

Inc., Nos. 08-3899, 07-1713, 2012 U.S.Dist.LEXIS 166816, *8–9, 16 (N.D.Ill. June

26, 2012)($9.5 million settlement); Will v. Gen. Dynamics Corp., No. 06-698, 2010

U.S.Dist.LEXIS 123349, *9, 13 (S.D.Ill. Nov. 22, 2010)($15.2 million settlement);

Martin v. Caterpillar Inc., No. 07-1009, 2010 U.S.Dist.LEXIS 145111, *9–11

(C.D.Ill. Sept. 10, 2010)($16.5 million settlement). This is a significant factor

supporting SBD’s requested case. Vizcaino, 290 F.3d at 1049; Boyd v. Bank of Am.

Corp., No. 13-561-DOC (JPRx), 2014 U.S.Dist.LEXIS 162880, *28–29 (C.D.Cal.

Nov. 18, 2014)(1/3 fee “within the range of percentages which courts have

considered reasonable in other [similar] class action lawsuits”). A 1/3 fee also is the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



amount the class representatives agreed to in this case. Doc. ___ (Declaration of

Jerome J. Schlichter ¶20).

The court that did not award SBD a 1/3 fee is the Northern District of California

in Kanawi v. Bechtel, No. 06-5566, Doc. 828 (Mar. 1, 2011). Although the Kanawi

court notes the many reasons for awarding SBD more than the 25% benchmark, it

provides no reason for awarding only 30% in instead of 1/3 of the gross settlement

fund. Kanawi also was a simpler case, involving only 4 ½ years of litigation, no

trial, and no interim appeals. In light of the awards and reasoning of the 10 other

courts noted above (8 of which came after Kanawi) and in light of the factors

discussed below, the Court finds Kanawi to be unpersuasive and the fee awarded in

that case to be an inadequate award in this case.

This evidence of the market rate in numerous courts throughout the United

States in settlements of ERISA fiduciary breach actions for the services of SBD

strongly supports the award of 1/3 of the settlement fund as attorney fee

compensation to SBD in this case.

There is no exclusive list of other factors that drives the Court’s determination

of a fee award’s reasonableness. Online DVD-Rental, 779 F.3d at 955. Other factors

are the results obtained for the class, the effort expended by counsel, counsel’s skill

and experience, the complexity of the issues, the risks of non-payment assumed by

counsel, and comparison with counsel’s loadstar. Heritage Bond, 2005 U.S.Dist.

LEXIS 13555, *60 (citing cases). Each of these factors show that a 1/3 fee is

reasonable and appropriate here.

1. The result obtained for the class.

The result obtained for the Class is “the most critical factor in granting a fee

award.” Deaver v. Compass Bank, No. 13-222, 2015 U.S.Dist.LEXIS 166484, *46

(N.D.Cal. Dec. 11, 2015); see also Heritage Bond, 2005 U.S.Dist.LEXIS 13555,

*62–63 (noting factor “weighs strongly” in favor of 1/3 fee). The $16.75 million


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



settlement is an exceptional result for the class. Defendants contended that their

maximum exposure at trial was $10.5 million. Doc. 731 at 9 (Def. Tr. Br. 4:1). The

$16.75 million settlement is 160% of that figure. It also is 70% of the $24 million

that Plaintiffs claimed at trial were the Plans’ losses. Even after deducting SBD’s

requested fees and costs, the net payable to the Class ($10 million) is over 40% of

the amount Plaintiffs claimed were the Plans’ losses and just under what

Defendants claimed was their maximum exposure. This amply supports a 1/3 fee.

See Aguilar v. Wawona Frozen Foods, No. 15-93, 2017 U.S.Dist.LEXIS 76751,

*13 (E.D.Cal. May 19, 2017)(settlement that “constituted at least 47%, if not 75%,

of the total recovery” justified 1/3 fee); Emmons v. Quest Diagnostics Clinical

Labs., Inc., No. 13-474-DAD(BAMx), 2017 U.S.Dist.LEXIS 27249, *14–15, 20

(C.D.Cal. Feb. 24, 2017)( $2.35 million settlement on $8.5 million in claimed

damages (27.6%) justified 1/3 fee); Deaver, 2015 U.S.Dist.LEXIS 166484, *22, 31,

34, 40 ($500,000 settlement of $3,512,000 “potential liability” (14.2%) was a “very

favorable” result justifying 1/3 fee); Heritage Bond, 2005 U.S.Dist.LEXIS 13555,

*62–63 (settlement for 23% of claimed losses, net of requested fees and costs, was

a “significant result[]” that “weigh[ed] strongly in favor of” awarding 1/3 fee).

Moreover, “[s]uccess is measured not only by the amount of the recovery but also

in terms of the significance of the legal issue on which the plaintiff prevailed and

the public purpose the litigation served.” Morales v. City of San Rafael, 96 F.3d

359, 365 (9th Cir. 1996). ERISA was enacted “to protect working men and women

from abuses in the administration and investment of private retirement plans and

employee welfare plans.” Donovan v. Dillingham, 688 F.2d 1367, 1370 (11th Cir.

1982). As such, ERISA’s stringent duties are “the highest known to the law.”

Tibble v. Edison Int’l, 843 F.3d 1187, 1197 (9th Cir. 2016)(en banc, quoting

Howard v. Shay, 100 F.3d 1484, 1488 (9th Cir. 1996)). That is especially so in this

case, where Northrop executives were accused of using their employees’ retirement


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



assets to offset corporate benefits department expenses. Indeed, the Ninth Circuit

has recognized “the significant amount of work” by SBD “to vindicate an important

ERISA principle.” Tibble, 843 F.3d at 1199.

2. Counsel’s efforts on behalf of the class.

A 1/3 fee is appropriate in light of SBD’s extraordinary efforts on behalf of the

class. SBD worked relentlessly on behalf of the Class for nearly 11 years to obtain

this settlement, including attending 3 mediations. In those 11 years, SBD spent

23,498 attorney hours and 2,999.7 paralegal and law clerk hours litigating this case.

Doc. __ (Declaration of Sheri O’Gorman (“O’Gorman Decl.”) ¶4). SBD reviewed

millions of pages of documents, took 17 depositions, and litigated numerous

discovery motions. It filed 3 complaints, successfully appealed this Court’s initial

denial of class certification, obtained certification upon remand, prevailed on the

tried claims at the summary judgment stage, and was in the midst of trial when the

parties reached the settlement. These extraordinary efforts justify an increase from

the 25% benchmark. See Deaver, 2015 U.S.Dist.LEXIS 166484, *34 (“a deviation

from the 25 percent benchmark” was warranted “given that this case has survived

multiple motions to remand, dismiss, transfer venue, and a Ninth Circuit appeal”).

3. Counsel’s skill and experience.

A 1/3 fee is appropriate in light of SBD’s “significant experience in the

particular type of litigation at issue[.]”Id. at *35 (citing In re Heritage Bond Litig.,

No. 02-ML-1475-DT(RCx) 2005 U.S.Dist.LEXIS 13627, *38–39 (C.D.Cal. June

10, 2005)); see also Boyd, 2014 U.S.Dist.LEXIS 162880, *27 (1/3 fee warranted

where “[c]ounsel litigated effectively, and their experience was essential for

obtaining the result” for the class”).

There is no firm in the country with more skill and experience in 401(k)

fiduciary breach litigation than SBD. The firm pioneered this area of law, bringing

actions before any other private attorney or the Department of Labor had. It


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



successfully litigated Tibble v. Edison International, the first 401(k) fiduciary

breach case heard by the Supreme Court, obtaining a landmark, unanimous victory

on behalf of the plaintiffs. 135 S.Ct. 1823(2015). It also is the only firm to obtain

judgments in the only 401(k) fiduciary breach cases to complete trial. Tibble, No.

07-5359, Doc. 567 at 24 (C.D.Cal. Aug. 16, 2017); Tussey v. ABB, Inc., No. 06-

4305, 2012 U.S.Dist.LEXIS 45240 (W.D.Mo. Mar. 31, 2012), vacated in part, 746

F.3d 327 (8th Cir. 2014). SBD clearly are “‘experts in ERISA litigation.’” Krueger,

2015 U.S.Dist.LEXIS 91385, *6 (quoting Tussey v. ABB, Inc., No. 06-4305, 2012

U.S.Dist.LEXIS 157428, *10 (W.D.Mo. Nov. 2, 2012)). This unique expertise

enabled SBD to prosecute this case so effectively for 11 years and obtain the

exceptional settlement for this class. Indeed, Karen W. Ferguson, director of the

Pension Rights Center, believes that there is no other firm that could have achieved

this type of result for the Class. Doc. __ (Declaration of Karen W. Ferguson ¶ 22).

In addition to the results SBD has obtained for this Class and others it has

represented, its efforts have benefited workers and retirees throughout the United

States. The firm has made a “significant, national contribution” in “clarif[ying]

ERISA standards in the context of investment fees.” Tussey v. ABB, Inc., No. 06-

4305, 2015 U.S.Dist.LEXIS 164818, *7–8 (W.D.Mo. Dec. 9, 2015). Its cases have

“educated plan administrators, the Department of Labor, the courts and retirement

plan participants about the importance of monitoring recordkeeping fees and

separating a fiduciary’s corporate interest from its fiduciary obligations.” Id. SBD’s

efforts have had a dramatic impact on decreasing fees throughout the entire 401(k)

industry, which is of vital importance given that 401(k) plans have substantially

replaced traditional pension plans as the predominant private vehicle for providing

retirement income in America. See Nolte, 2013 U.S.Dist.LEXIS 184622, at *6

(“[t]he fee reduction attributed to [SBD]’s fee litigation and the Department of

Labor’s fee disclosure regulations approach $2.8 billion in annual savings for


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



American Workers and retirees”).

4. The extraordinary level of skill required.

“[T]he novelty, difficulty and complexity of the issues involved are significant

factors in determining a fee award.” Heritage Bond, 2005 U.S.Dist.LEXIS 13555,

*66 (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 718 (5th Cir.

1974)). “[G]iven the transient nature of standing ERISA law,” ERISA cases

“require[] highly skilled counsel who could understand the complexity of the law

and adapt case law accordingly.” Downey Surgical Clinic, Inc. v. OptumInsight,

Inc., No. 09-5457- PSG(JCx), 2016 U.S.Dist.LEXIS 145000, *32 (C.D.Cal. May

16, 2016). ERISA 401(k) fiduciary breach class actions are extremely complex,

uncertain, sharply contested, and often protracted (as shown by this case’s decade-

plus duration). ERISA excessive fee litigation is “not only dependent on the statute

but also on various regulations that implement ERISA,” and thus is “relatively

unique with limited case authority in support.” Martin v. Caterpillar, Inc., No. 087-

1009, 2010 U.S.Dist.LEXIS 82350, *7 (C.D.Ill. Aug. 12, 2010).

This case required counsel of the highest skill. It involved prohibited

transactions claims under 29 U.S.C. §1106 for which there are few reported cases at

all and no reported cases directly on point. It also involved detailed and complex

regulations (29 CFR §§2550.408b-2, 2550.408c-2) and DOL advisory opinions on

which there were no reported cases. And trial, which was to include examination of

16 live witnesses and potentially hundreds of exhibits (Doc. 748), presented

additional logistical challenges. The enormous skill required of counsel warrants

the requested 1/3 fee.

5. The risk of nonpayment.

SBD faced the very real risk of receiving no payment for its efforts on behalf of

the Class over the last 11 years. It bore the costs of this litigation for over a decade

before trial even began. Even then, prevailing at trial was far from certain, as “trials


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



of class actions are inherently risky and unpredictable propositions.” Cervantez v.

Celestica Corp., No. 07-729-VAP (OPx), 2010 U.S. Dist.LEXIS 78342, *10

(C.D.Cal. July 6, 2010). “[W]ithout being fully compensated for “the risks of

receiving nothing,” “very few lawyers could take on the representation of a class

client given the investment of substantial time, effort, and money.” In re Wash.

Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1300 (9th Cir. 1994)(internal

quotation marks and citations omitted). This “weighs substantially in favor of

approval of” a 1/3 fee. Campbell v. Best Buy Stores, L.P., No. 12-7794-JAK

(JEMx), 2016 U.S.Dist.LEXIS 184851, *20 (C.D. Cal. Apr. 5, 2016); see also

Barbosa, 297 F.R.D. at 449 (“Like this case, where recovery is uncertain, an award

of one-third of the common fund as attorneys’ fees has been found to be

appropriate.”); Garcia v. Gordon Trucking, Inc., No. 10-324, 2012 U.S.Dist.LEXIS

160052, *28–29 (E.D.Cal. Oct. 31, 2012)(awarding 1/3 fee where “[c]lass [c]ounsel

undertook considerable financial risks in this litigation by accepting this case on a

contingency basis,” and “[t]here was no guarantee they would recoup their fees or

the substantial costs involved”).

6. Lodestar cross-check.

A lodestar cross-check confirms that the requested fee is reasonable. A proper

lodestar calculation uses an attorney’s rates at the time of the fee award, rather than

rates at the time the case was initiated. “Full compensation requires charging

current rates for all work done during the litigation, or by using historical rates

enhanced by an interest factor.” W.P.P.S., 19 F.3d at 1305 (using historical rates

“inadequately compensate[s] [a] firm for the delay in receiving its fees”). A

national rate is appropriate here, as “ERISA cases involve a national standard, and

attorneys practicing ERISA law in the Ninth Circuit tend to practice in different

districts.” Mogck v. Unum Life Ins. Co. of Am., 289 F.Supp.2d 1181, 1191 (S.D.Cal.

2003); see also, e.g., Spano, No. 06-743, Doc. 587, at 6–7; Abbott, 2015 U.S.Dist.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



LEXIS 93206, *11–12; Nolte, 2013 U.S.Dist.LEXIS 184622, *6; Beesley, 2014

U.S.Dist.LEXIS 12037, at *13; Martin, No. 07-1009, 2010 U.S.Dist. LEXIS

145111, *13–14; Will, 2010 U.S.Dist.LEXIS 123349, *11.

Based on the factual support provided by SBD in its motion, the Court finds

that appropriate rates to use in calculating the lodestar are as follows: $1,027.94 for

attorneys with at least 25 years of experience; $875.50 for attorneys with 15–24

years of experience; $630.36 for attorneys with 5–14 years of experience; $473.80

for attorneys with 0–4 years of experience; and $318.27 for paralegals and law

clerks. These rates are a 3% increase over rates approved by 3 separate courts in

401(k) fiduciary breach cases last year. Kruger, No. 14-208, Doc. 61 at 12–13;

Gordan, No. 13-30184, Doc. 144 at 6 (approving the “reasonable rates suggested

by counsel”); Gordan, No. 13-30184, Doc. 120 at 29–30 (Br. 24–25)(same rates as

Kruger); Spano, Doc. 587, at 6–7.

SBD has spent 23,498 hours of attorney time and 2,999.7 hours of paralegal and

law clerk hours litigating this case over the last 11 years. Doc. __ (O’Gorman Decl.

¶4). At the current rates, SBD’s total time in this case is worth $16,074,616. The

requested $5,583,333 fee is less than 35% of that. A request “for substantially less

recovery [than the lodestar value] is indicia that the fee amount requested is

reasonable.” Heritage Bond, 2005 U.S. Dist.LEXIS 13555, *73; see also Beck-

Ellman v. Kaz USA, Inc., No. 10-2134, 2013 U.S.Dist.LEXIS 189308, *26

(S.D.Cal. June 11, 2013)(requested fee that was “actually less than the lodestar,

representing only 88% of the calculated value” was reasonable).

Moreover, the $16 million lodestar does not include a risk multiplier to

compensate SBD for the risk it faced in litigating this case, which would be

required in this case if the Court awarded a fee based on a lodestar calculation.

W.P.P.S., 19 F.3d at 1299–1300; D’Emanuele v. Montgomery Ward & Co., 904

F.2d 1379, 1384 (9th Cir. 1990).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



Based on all the foregoing factors, the Court concludes that a reasonable fee in

this case is 1/3 of the settlement. The Court further finds that awarding this fee from

the gross $16.75 million settlement amount is reasonable and appropriate. See

Powers, 229 F.3d at 1258 (percentage of fee award may be gross or net of litigation

expenses, so long as the award is reasonable). The Court therefore awards SBD

attorneys’ fees in the amount of $5,583,333.

B. Litigation costs and expenses.

SBD seeks reimbursement for $1,159,114 in litigation costs and expenses. Doc.

__ (O’Gorman Decl. ¶2). “There is no doubt that an attorney who has created a

common fund for the benefit of the class is entitled to reimbursement of reasonable

litigation expenses from that fund.” Heritage Bond 2005 U.S.Dist.LEXIS 13555,

*75 (quoting In re Gen. Instrument Sec. Litig., 209 F.Supp.2d 423, 434 (E.D.Pa.

2001)). Expenses reimbursable from a common fund include expert fees, travel,

long-distance and conference telephone, postage, delivery services, and

computerized legal research. Alba Conte, 1 Attorney Fee Awards §2:19 (3d ed.);

Emmons, 2017 U.S.Dist.LEXIS 27249, *23–24. These are the types of expenses for

which SBD seeks reimbursement, and the Court finds that they were reasonable and

necessary. SBD had every incentive to control costs as much as possible over the

course of this decade-long litigation, and there is no evidence they failed to do so.

The Court thus grants the request for reimbursement of $1,159,114 in costs and

expenses.

C. Incentive awards.

SBD also requests $25,000 incentive awards for the 4 plaintiffs who served as

class representatives throughout this case: Mr. Grabek, Ms. Spicer, Mr. Geuder, and

Mr. Russell. “Incentive awards that are intended to compensate class

representatives for work undertaken on behalf of a class are fairly typical in class

actions.” Online DVD-Rental, 779 F.3d at 943 (internal quotation marks and


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



citation omitted). Such awards recognize class representatives’ “willingness to act

as a private attorney general.” Rodriguez v. West Publishing Corp., 563 F.3d 948,

959 (9th Cir. 2009). Here, the class representatives initiated the action, took on a

substantial risk, remained in contact with SBD, and acted at all times for the benefit

of the Class. Each class representative risked alienating their former employer and

longtime friends loyal to Northrop Grumman. Mr. Grabek, Ms. Spicer, and Mr.

Geuder traveled to Los Angeles to attend trial; Mr. Russell was prevented from

attending due to illness. Mr. Grabek also traveled from his home in Illinois to attend

2 separate mediation sessions in California and New York.

Each incentive award is just .15% of the settlement, and they collectively are

just .60% of the settlement. This is in line with incentive awards approved in other

cases within this Circuit. Online DVD-Rental, 779 F.3d at 948 (approving incentive

awards that were “a mere .17% of the total settlement fund”); Ingalls v. Hallmark

Retail, Inc., No. 08-4342-VBF (Ex), 2009 U.S.Dist.LEXIS 131078, *6 (C.D.Cal.

Oct. 16, 2009)(awarding total of $60,000 to 6 named plaintiffs out of $5.625

million settlement (1.06%)). This Court previously has approved much larger total

awards. Trujillo v. City of Ontario, No. 04-1015-VAP (SGLx), 2009 U.S.Dist.

LEXIS 79309, *13–14 (C.D.Cal. Aug. 24, 2009)($30,000 each to 6 class

representatives, plus $10,000 to 10 other plaintiffs). Incentive awards of $25,000

also are consistent with awards in other 401(k) fiduciary breach cases. Kruger, No.

14-208, Doc. 61 at 18; Spano, No. 06-743, Doc 587 at 8–9; Abbott, 2015 U.S.Dist.

LEXIS 93206, *14–15; Krueger, 2015 U.S.Dist.LEXIS 91385, *10–11; Beesley,

2014 U.S.Dist.LEXIS 12037, *13–14; Nolte, 2013 U.S.Dist.LEXIS 184622, *14–

16; Will, 2010 U.S.Dist.LEXIS 123349, *12–13.

Accordingly, the Court awards $25,000 each to Mr. Grabek, Ms. Spicer, Mr.

Geuder, and Mr. Russell from the settlement fund.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28



CONCLUSION

After consideration of Plaintiffs’ motion, this Court concludes that the

requested attorneys’ fees and cost reimbursement are fair, reasonable, and merited

by SBD’s enormous efforts in obtaining relief for the Class. It is ORDERED that

the requested attorneys’ fees of $5,583,333 are APPROVED. It is FURTHER

ORDERED that the requested reimbursement of $1,159,114 is APPROVED. The

settlement administrator shall pay a combined sum of $6,742,447 to the firm of

Schlichter, Bogard & Denton, LLP from the settlement fund and shall separately

pay Gary Grabek, Julie Spicer, Mark Geuder, and Dwite Russell $25,000 each from

the settlement fund.

Dated: ________________ _______________________

Hon. André Birotte Jr. United States District Judge

Central District of California


Documents

JEROME J. SCHLICHTER (SBN 054513) 1 MICHAEL A. WOLFF ... · $25,000 each for class representatives Gary Grabek, Julie Spicer, Mark Geuder, and By: CASE NO. 06-CV-6213 AB (JCX) -1