Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. … for... · Aetna Inc. Sec. Litig., ... In re Computron Software, Inc.,., ., 6 . 20.) Stephen L. Dreyfuss, Esq. One Gateway Center

Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406 Court-Appointed Class Counsel [Additional Class Counsel Listed on Signature Page.]

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated,

Plaintiffs,

v.

CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,

Defendant.

Civ. Act. No. 06-2163 (JLL) Honorable José L. Linares MOTION FOR ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND Hearing Date: March 30, 2015 Hearing Time: 10:00 a.m. ORAL ARGUMENT REQUESTED

Case 2:06-cv-02163-JLL-MF Document 157 Filed 01/23/15 Page 1 of 3 PageID: 3213

2

TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that, on March 30, 2015 at 10:00 a.m., or as

soon thereafter as counsel may be heard, before the Honorable José L. Linares,

U.S.D.J., at the Martin Luther King, Jr. Federal Building and Courthouse, 50

Walnut Street, Newark, New Jersey, plaintiffs Ralph Demmick and Donald

Barth (together, “Plaintiffs”) shall move this Court for an Order Approving the

Plan of Allocation and Distribution of the Settlement Fund in this action.

PLEASE TAKE FURTHER NOTICE that, in support of their motion,

Plaintiffs will rely upon the Memorandum of Law submitted herewith and the

Declaration of J. Paul Gignac.

Dated: January 23, 2015 HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP

By s/ Stephen L. Dreyfuss, Esq. Stephen L. Dreyfuss, Esq. Matthew M. Moloshok, Esq.

One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020

Facsimile: (973) 621-7406

FOLEY BEZEK BEHLE & CURTIS, LLP Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072


3

ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401

Court-Appointed Class Counsel


Case 2:06-cv-02163-JLL-MF Document 157-1 Filed 01/23/15 Page 1 of 6 PageID: 3216






i

Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406 Court-Appointed Class Counsel [Additional Class Counsel Listed on Signature Page.]


RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated,

Plaintiffs,

v.

CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,

Defendant.

Civ. Act. No. 06-2163 (JLL) Honorable José L. Linares MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND Hearing Date: March 30, 2015 Hearing Time: 10:00 a.m.

Stephen L. Dreyfuss, Esq. Matthew E. Moloshok, Esq. HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020 Facsimile: (973) 621-7406


ii

Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) FOLEY BEZEK BEHLE & CURTIS, LLP 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072 J. Paul Gignac, Esq. (admitted pro hac vice) ARIAS OZZELLO & GIGNAC LLP 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401 Court-Appointed Class Counsel


iii

TABLE OF CONTENTS Page

I. INTRODUCTION ...........................................................................................1

II. LEGAL STANDARDS ...................................................................................1

A. Separate Approval Of The Plan Of Allocation Is Permitted.................1

B. The Plan Of Allocation Must Be Fair, Reasonable And Adequate................................................................................................3

III. THE PLAN OF ALLOCATION .....................................................................5

A. Calculation Of The Net Settlement Fund..............................................5

B. Calculation Of The FSP Settlement Class Cash Sub Fund And The In-Network Settlement Class Cash Sub Fund................................6

C. Distribution Of The FSP Settlement Class Cash Sub Fund..................7

D. Distribution Of The In-Network Settlement Class Cash Sub Fund.......................................................................................................8

E. Allocation And Distribution Of The Calling Units Component ...........9

F. Disposition Of Returned And/Or Uncashed Settlement Class Member Checks...................................................................................10

G. Disposition Of Returned And/Or Undistributed Calling Unit PINs .....................................................................................................11

IV. THE PLAN OF ALLOCATION IS FAIR, REASONABLE AND ADEQUATE..................................................................................................11

A. Every Eligible Settlement Class Member Will Receive The Same Amount Of Cash........................................................................11

B. Every Eligible In-Network Settlement Class Member Will Also Receive The Same Amount Of Calling Units .....................................12

C. There Is No Cy Pres Component To The Plan of Allocation .............13


iv

D. The Distribution Of Any Uncashed Or Undeliverable Settlement Benefits Will Be Determined By The Court.....................14

V. CONCLUSION..............................................................................................15


v

TABLE OF AUTHORITIES

Page(s) Aetna Inc. Sec. Litig.,

2001 WL 20928 (E.D. Pa. Jan. 4, 2001)…………………………………….4

In re Baby Products Antitrust Litigation, 708 F.3d 163 (3rd Cir. 2013)………………………………………………..14 In re Agent Orange Product Liability Litigation MDL No.381, 818 F.2d 145 (2d Cir. 1987)……….............................................................2,3

In re Cedant Corp. Litig., 264 F.3d 201 (3d Cir. 2001)………………………………………………....3

In re Computron Software, Inc., 6 F.Supp.2d 313 (D.N.J. 1998)…..……...………………………………….3 In re Corel Corp. Inc. Sec. Litig., 293 F.Supp.2d 484 (E.D. Pa. 2003) …………….…………………………4 In re Datatec Sys., Inc. Sec. Litig., 2007 WL 4225828 (D.N.J. Nov. 28, 2007)…………………………………3 In re Ikon Office Solutions, Inc., Sec. Litig., 194 F.R.D. 166 (E.D. Pa. 2000)…….………………………………………4 In re NASDAQ Market-Makers Antitrust Litig. 187 F.R.D. 465 (S.D.N.Y. 1998)……….……………………………………2 In re Par Pharm. Sec. Litig., 2013 WL 3930091 (D.N.J. July 29, 2013)………………………………...4,5 In re The Mills Corp. Sec. Litig., 265 F.R.D. 246 (E.D. Va. 2009)……..……………………………………...4 McCoy v. Health Net, Inc., 569 F.Supp.2d 448 (D.N.J. 2008)…………………………………………...2


vi

Walsh v. Great Alt. & Pac. Tea Co., 726 F.2d 956 (3d Cir. 1983)………………………………………………....4 References McLaughlin on Class Actions § 14.03 (11th ed.) ……………………….………....2


1

I. INTRODUCTION

In accordance with the parties’ Stipulation and Settlement Agreement

(“SAS”), Plaintiffs Ralph Demmick and Donald Barth (together, “Plaintiffs”), by

their counsel and in their capacities as the Court-certified class representatives in

this action, move this Court for an Order Approving Plan of Allocation and

Distribution of the Settlement Fund in this action.

For the reasons explained herein, Plaintiffs submit that the Plan of

Allocation and Distribution of the Settlement Fund proposed by Class Counsel

(“Plan of Allocation”) is fair, reasonable and adequate and, therefore, merits this

Court’s approval. Accordingly, the Court should grant Plaintiffs’ motion and enter

the Order Approving Plan of Allocation and Distribution of the Settlement Fund

(“Allocation Order”), which has been submitted for the Court’s consideration.

II. LEGAL STANDARDS

A. Separate Approval Of The Plan Of Allocation Is Permitted.

In addition to approving the consideration obtained for the class members in

a common-fund settlement, the court must also approve the allocation of that

consideration among the settlement class members, the class representatives, and

class counsel. “Because court approval of a settlement as fair, reasonable and

adequate is conceptually distinct from the approval of a proposed plan of


2

allocation . . . courts frequently approve them separately.” 2 McLaughlin on Class

Actions § 6:23 (11th ed.).

It is “appropriate, and often prudent,” in large class actions for the approval

of the settlement amount to be handled separately from the approval of the plan of

allocation. In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 480

(S.D.N.Y. 1998) (granting final approval to a class-action settlement fund for a

class of “over 1.0 million members” separately from the plan of allocation); see

also McCoy v. Health Net, Inc., 569 F.Supp.2d 448, 469 (D.N.J. 2008)

(considering plan of allocation separately where the parties “separated the Court’s

assessment of the Plan of Allocation and the Agreement to provide the Court with

the option to approve the Agreement even if the Court finds that the Plan of

Allocation needs to be modified”). The court’s “prime function” in approving a

class action settlement is “to determine that the amount paid is commensurate with

the value of the case,” and that “can be done before a distribution scheme has been

adopted so long as the distribution scheme does not affect the obligations of the

defendants under the settlement agreement.” In re Agent Orange Product Liability

Litigation MDL No. 381, 818 F.2d 145, 170 (2d Cir. 1987).

In this case, Plaintiffs request that the Court consider the reasonableness of

the Plan of Allocation as reflected in the proposed Allocation Order separately


3

from the fairness and adequacy of the Settlement, which is the subject of

Plaintiffs’ Motion for Orders: (1) Granting Final Approval to Proposed Settlement;

and (2) Entering Final Judgment. Separate consideration of the Settlement and the

Plan of Allocation will simplify the process of concluding this case by separating

the adequacy of the negotiated settlement consideration from the details of

distributing that consideration to millions of Settlement Class Members. See Agent

Orange, 818 F.2d at 170. The “distribution scheme does not affect the obligations

of the defendant[],” Verizon Wireless, which has already paid the cash portion of

the Settlement Fund to the Settlement Administrator and will have only a limited

administrative role in applying some of the cash due to its current customers as

credits on bills, in the amounts and according to the directions specified by the

Settlement Administrator.

B. The Plan Of Allocation Must Be Fair, Reasonable And Adequate.

“Approval of a plan of allocation of a settlement fund in a class action is

‘governed by the same standards of review applicable to approval of the settlement

as a whole: the distribution plan must be fair, reasonable and adequate.’” In re

Computron Software, Inc., 6 F.Supp.2d 313, 321 (D.N.J. 1998) (citations omitted);

In re Datatec Sys., Inc. Sec. Litig., 2007 WL 4225828, *3 (D.N.J. Nov. 28, 2007).

See also, In re Cendant Corp. Litig., 264 F.3d 201, 248 (3d Cir. 2001). Courts


4

“generally consider plans of allocation that reimburse class members based on the

type and extent of their injuries to be reasonable.” Aetna Inc. Sec. Litig., 2001 WL

20928, at *12 (E.D. Pa. Jan. 4, 2001), citing In re Ikon Office Solutions, Inc., Sec.

Litig., 194 F.R.D. 166, 194 (E.D. Pa. 2000). See, e.g., In re Corel Corp. Inc. Sec.

Litig., 293 F.Supp.2d 484, 493 (E.D. Pa. 2003) (approving plan of allocation that

“provides that each authorized claimant receive, on a pro rata basis, that share of

the net settlement fund that the claimant’s recognized claim bears to the total

recognized claims of all authorized claimants in accordance with the formula

[proposed by Class Counsel]”) and In re Par Pharm. Sec. Litig., 2013 WL

3930091, at *8 (D.N.J. July 29, 2013) (approving plan of allocation that “provides

for the distribution of the Net Settlement Funds on a pro rata basis based on a

formula tied to liability and damages”).

In the final analysis, “[t]he court’s principal obligation is simply to ensure

that the fund distribution is fair and reasonable as to all participants in the fund.”

Walsh v. Great Alt. & Pac. Tea Co., 726 F.2d 956, 964 (3d Cir.1983). Moreover,

“[t]he proposed allocation need not meet the standards of scientific precision, and

given that qualified counsel endorses the proposed allocation, the allocation need

only have a reasonable and rational basis.” In re The Mills Corp. Sec. Litig., 265

F.R.D. 246, 268 (E.D. Va. 2009). Therefore, where the plan of allocation is

recommended by Class Counsel and no class member has objected to it, the Court


5

should find that the balance of factors weighs in favor of approving the plan of

allocation. See, e.g., In re Par Pharm., at *23 (finding that “the balance of factors

weighs in favor of approving the Plan of Allocation” where “[i]t is fully

recommended by Lead Counsel, and, although notice was sent to over 84,572

potential class members, no member has objected to it.”)

III. THE PLAN OF ALLOCATION

A. Calculation Of The Net Settlement Fund

The Settlement in this action establishes a $64.2 million common fund

(“Settlement Fund”) that is comprised of two components: a cash component and a

calling units component. (Gignac Decl., ¶ 4.) The “Cash Component” of the

Settlement Fund consists of the $36.7 million in cash that has already been

transferred by Verizon Wireless to the court-appointed Settlement Administrator

and deposited into an interest-earning account, together with all interest earned

thereon until the date on which checks and/or PINs are mailed to Settlement Class

Members (the “Date of Distribution”). (Gignac Decl., ¶ 5.) The “Calling Units

Component” of the Settlement Fund consists of 275 million total calling units,

valued at $27.5 million based upon a conversion ratio of 10 cents per unit. (Gignac

Decl., ¶ 6.)

Under the proposed Plan of Allocation, the Settlement Administrator will

first deduct from the Settlement Fund the costs of notice and settlement


6

administration, court-approved attorneys’ fees and expenses, and incentive awards

to the Class Representatives. (Allocation Order, ¶ 10.) The balance of the cash

remaining in the Settlement Fund after these deductions (“Remaining Cash

Component”), together with the Calling Units Component, will constitute the “Net

Settlement Fund”. (Gignac Decl., ¶ 7.)

B. Calculation Of The FSP Settlement Class Cash Sub Fund And The In-Network Settlement Class Cash Sub Fund

After April 29, 2015, which is the deadline for Settlement Class Members to

submit claims, the Settlement Administrator will determine: (i) the total number of

FSP Settlement Class Members who are eligible to receive benefits from the Net

Settlement Fund; (ii) the total number of In-Network Settlement Class Members

who are eligible to receive benefits from the Net Settlement Fund; and (iii) the

total number of FSP Settlement Class Members and In-Network Class Members

combined who are eligible to receive benefits from the Net Settlement Fund

(“Total Eligible Settlement Class Members”). (Allocation Order, ¶ 11.a.)

Settlement Class Members “eligible to receive benefits” are: (a) the

1,800,836 FSP Settlement Class Members and 401,123 In-Network Settlement

Class Members who are on the Class List provided by Verizon Wireless pursuant

to the Settlement Agreement; and (b) those current or former Verizon Wireless

customers who file timely claims pursuant to the Court’s Preliminary Approval

Order (in each case, provided that the eligible Settlement Class Member did not


7

submit a timely and valid Request for Exclusion). Because there will be some

number of Settlement Class Members who are members of both the FSP

Settlement Class and the In-Network Settlement Class, those Settlement Class

Members will be counted twice in this determination and will receive two pro rata

shares of the settlement benefits that are distributed.

The Settlement Administrator will calculate the portion of the Remaining

Cash Component to be allocated to the FSP Settlement Class (“FSP Settlement

Class Cash Sub Fund”) as well as the portion of the Remaining Cash Component

to be allocated to the In-Network Settlement Class (“In-Network Settlement Class

Cash Sub Fund”) by multiplying the Remaining Cash Component by the respective

percentages of the Total Eligible Settlement Class Members represented by the

FSP Settlement Class and the In-Network Settlement Class. (Allocation Order, ¶

11.b. and c.)

C. Distribution Of The FSP Settlement Class Cash Sub Fund

The Settlement Administrator will divide the FSP Settlement Class Cash

Sub Fund by the total number of eligible FSP Settlement Class Members to yield

the “FSP Settlement Class Member Cash Benefit Amount”, which shall be the

same dollar amount for each eligible member of the FSP Settlement Class.

(Allocation Order, ¶ 12.a.) For all eligible FSP Settlement Class Members who are

“Distribution Customers” as defined in the Settlement Agreement, the FSP


8

Settlement Class Member Cash Benefit Amount will be distributed to each such

eligible FSP Settlement Class Member by Verizon Wireless, by means of a bill

credit. (Allocation Order, ¶ 12.b.) Verizon Wireless will apply the bill credits in

the amounts and according to the instructions that will be provided to it by the

Settlement Administrator. (SAS, Art. IV, ¶ 3.) For all eligible FSP Settlement

Class Members who are not Distribution Customers, the FSP Settlement Class

Member Cash Benefit Amount will be distributed to each eligible FSP Settlement

Class Member by the Settlement Administrator, by means of a check mailed to the

last known mailing address of each such eligible FSP Settlement Class Member.

(Allocation Order, ¶ 12.c.)

D. Distribution Of The In-Network Settlement Class Cash Sub Fund

The Settlement Administrator will divide the In-Network Settlement Class

Cash Sub Fund by the total number of eligible In-Network Settlement Class

Members to yield the “In-Network Settlement Class Member Cash Benefit

Amount”, which will be the same dollar amount for each eligible member of the

In-Network Settlement Class. (Allocation Order, ¶ 13.a.) For all eligible In-

Network Settlement Class Members who are Distribution Customers, the In-

Network Settlement Class Member Cash Benefit Amount will be distributed to

each such eligible In-Network Settlement Class Member by Verizon Wireless, by

means of a bill credit. (Allocation Order, ¶ 13.b.) Verizon Wireless will apply the


9

bill credits in the amounts and according to the instructions that will be provided to

it by the Settlement Administrator. (SAS, Art. IV, ¶ 3.) For all eligible In-

Network Settlement Class Members who are not Distribution Customers, the In-

Network Settlement Class Member Cash Benefit Amount will be distributed to

each such eligible In-Network Settlement Class Member by the Settlement

Administrator, by means of a check mailed to the last known mailing address of

each such eligible In-Network Settlement Class Member. (Allocation Order, ¶

13.c.)

E. Allocation And Distribution Of The Calling Units Component

Under the proposed Plan of Allocation and Distribution, all $27.5 million of

the Calling Units Component will be allocated to the In-Network Settlement Class.

(Allocation Order, ¶ 11.d.)

The Settlement Administrator will determine the total number of In-Network

Settlement Class Members eligible to receive calling units, defined as (i) those who

are on the Class List provided by Verizon Wireless; and (ii) those who file timely

claims (in each case, provided that the eligible Settlement Class Member did not

submit a timely and valid Request for Exclusion). (Allocation Order, ¶ 14.a.) The

Settlement Administrator will then divide the 275 million calling units in the

Calling Units Component by the total number of eligible In-Network Settlement

Class Members to yield the “In-Network Settlement Class Member Calling Unit


10

Amount”, which shall be the same number of calling units for each eligible

member of the In-Network Settlement Class and which shall be rounded down to

the nearest calling unit. (Allocation Order, ¶ 14.b.)

The calling units will be distributed to In-Network Settlement Class

Members in two different ways. First, each eligible In-Network Settlement Class

Member on the Email List as defined in the Settlement Agreement will receive the

In-Network Settlement Class Member Calling Unit Amount by means of an email

that conveys: (1) the PIN number needed to access the calling units; (2) how to

access and use the calling units; and (3) the terms and conditions applicable to the

use of the calling units. (Allocation Order, ¶ 14.c.) Second, each eligible In-

Network Settlement Class Member not on the Email List will receive the In-

Network Settlement Class Member Calling Unit Amount by means of a sealed

postcard mailing that conveys the same information. (Allocation Order, ¶ 14.d.)

F. Disposition Of Returned And/Or Uncashed Settlement Class Member Checks

Any check issued to a Settlement Class Member that is returned to the

Settlement Administrator as undeliverable or that is not cashed by the Settlement

Class Member within ninety days of the Date of Distribution will be deemed to

have been forfeited by the Settlement Class Member. (Allocation Order, ¶ 16.)

The Court will determine the manner in which any undeliverable or uncashed

checks should be distributed. (Allocation Order, ¶ 20.)


11

G. Disposition Of Returned And/Or Undistributed Calling Unit PINs

Any calling unit PINs sent to Settlement Class Members by email as to

which the Settlement Administrator receives “send failure,” “bounce-back,” or

other similar email failure notices shall be resent to those Settlement Class

Members by mail. (Allocation Order, ¶17.) Any calling unit PINs sent to

Settlement Class Members by mail that are returned to the Settlement

Administrator as “undeliverable” shall be deemed to have been forfeited by those

Settlement Class Members. (Id.) The Court will determine the manner in which

any undeliverable calling unit PINs, or calling unit PINs remaining as a result of

the rounding down procedure described in Section III.E. above, should be

distributed. (Allocation Order, ¶ 20.)

IV. THE PLAN OF ALLOCATION IS FAIR, REASONABLE AND ADEQUATE

Class Counsel submit that the Plan of Allocation is fair, reasonable and

adequate for each of the reasons set forth below. (Gignac Decl., ¶ 15.)

A. Every Eligible Settlement Class Member Will Receive The Same Amount Of Cash

Under the Plan of Allocation, the Cash Component of the Net Settlement

Fund will be allocated and distributed so that every eligible Settlement Class

Member (meaning every member of the FSP Settlement Class and every member

of the In-Network Settlement Class) will receive an equal pro rata share of the


12

Cash Component. (Gignac Decl., ¶ 8.) Settlement Class Members who are in both

the FSP Settlement Class and the In-Network Settlement Class will receive two pro

rata shares. (Id.)

B. Every Eligible In-Network Settlement Class Member Will Also Receive The Same Amount Of Calling Units

Under the Plan of Allocation, the Calling Units Component of the Net

Settlement Fund will be allocated and distributed so that every eligible member of

the In-Network Settlement Class will receive an equal pro rata share of the Calling

Units Component. (Gignac Decl., ¶ 9.)

The reason that the Calling Units Component is being distributed solely to

the eligible members of the In-Network Settlement Class (and not to the eligible

members of the FSP Settlement Class) is three-fold. (Gignac Decl., ¶ 10.)

First, the In-Network Settlement Class members’ claims arise out of Verizon

Wireless’ practice of charging them for minutes that should have been free. Thus,

In-Network Settlement Class members lost the use of minutes. Allocating the

Calling Units Component to the In-Network Settlement Class members serves to

restore those lost minutes to them so that they can use them. (Gignac Decl., ¶ 11.)

Second, Class Counsel consider the claims of the In-Network Settlement

Class members to be stronger than the claims of the FSP Settlement Class

members because Verizon Wireless has acknowledged that it was improper to

charge the In-Network Settlement Class members for “in-family” and “in-network”


13

calls that were supposed to be free. In fact, Verizon Wireless voluntarily initiated

a program for the purpose of providing credits to In-Network Settlement Class

members who were charged for calls that should have been free. By contrast,

Verizon Wireless has always asserted that the FSP Settlement Class members’

claims have no merit and that the FSP Settlement Class members are not entitled to

any damages. (Gignac Decl., ¶ 12.) The strength of the In-Network Settlement

Class Members’ claims justifies allocating additional consideration to those

Settlement Class Members as compared to the FSP Settlement Class Members.

Third, the average damages, as estimated by NERA in its November 11,

2013 amended report, of the In-Network Settlement Class members ($104.39) are

significantly higher than the average damages of the FSP Settlement Class

members ($17.48) (Gignac Decl., ¶ 13), which again justifies the allocation of

additional consideration to the In-Network Settlement Class Members.

C. There Is No Cy Pres Component To The Plan of Allocation

The Third Circuit has recently expressed skepticism as to the value of cy

pres in certain class action settlements. See, In re Baby Products Antitrust

Litigation, 708 F.3d 163 (3rd Cir. 2013). There can be no such concern with the

Plan of Allocation in this case because it does not have a cy pres component. The

entirety of the Net Settlement Fund is intended to be distributed directly to the


14

Settlement Class Members, with the Court to determine the distribution of any

undeliverable or uncashed settlement benefits. (Gignac Decl., ¶ 14.)

D. The Distribution Of Any Uncashed Or Undeliverable Settlement Benefits Will Be Determined By The Court

The proposed Plan of Allocation minimizes the amount of settlement

benefits likely to be forfeited due to being “undeliverable” by: (1) requiring

Verizon Wireless to deliver cash benefits as bill credits for Distribution Customers;

and (2) providing for other Settlement Class Members to receive benefits at the

address that they provide (in the case of those making claims for benefits) or at

their last-known address, which the Settlement Administrator has updated using

the Postal Service’s National Change of Address Databank.

Inevitably, however, there will be some amount of settlement benefits that

are forfeited because they are “undeliverable” or, in the case of checks, uncashed

within 90 days. (Allocation Order, ¶¶ 16-17.) As to those undeliverable or

uncashed settlement benefits, the proposed Allocation Plan allows the Court to

determine the manner in which they should be distributed. (Allocation Order, ¶

20.)

To assist the Court in making this determination, the Plan of Allocation

requires the Settlement Administrator to submit a report to the Court setting forth:

(a) the total dollar amount of the checks deemed to have been forfeited by

Settlement Class Members; (b) the total amount of calling units represented by the


15

PINs deemed to have been forfeited by Settlement Class Members; and (c) an

estimate of the cost of further distribution of these forfeited amounts to the

Settlement Class Members. (Allocation Order, ¶ 18.)

The Proposed Plan of Allocation also requires Class Counsel to file with the

Court a Statement of Recommendation with respect to the further allocation and

distribution of: (a) the total dollar amount represented by the checks deemed to

have been forfeited by Settlement Class Members; and (b) the total amount of

calling units represented by the PINs deemed to have been forfeited by Settlement

Class Members. (Allocation Order, ¶ 19.)

V. CONCLUSION

For all of the foregoing reasons, and on the basis of the legal authorities set

forth herein, Plaintiffs respectfully request that the Court enter the Order

Approving Plan of Allocation and Distribution of the Settlement Fund that is

submitted herewith.

Dated: January 23, 2015 HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP

By s/ Stephen L. Dreyfuss, Esq. A Member of the Firm Stephen L. Dreyfuss, Esq. Matthew M. Moloshok, Esq.

One Gateway Center Newark, New Jersey 07102-5386 Telephone: (973) 621-9020

Facsimile: (973) 621-7406


16

FOLEY BEZEK BEHLE & CURTIS, LLP Peter J. Bezek, Esq. (admitted pro hac vice) Robert A. Curtis, Esq. (admitted pro hac vice) 15 West Carrillo Street Santa Barbara, California 93101 Telephone: (805) 962-9495 Facsimile: (805) 962-0072 ARIAS OZZELLO & GIGNAC LLP J. Paul Gignac, Esq. (admitted pro hac vice) 115 S. La Cumbre Lane, Suite 300 Santa Barbara, California 93105 Telephone: (805) 683-7400 Facsimile: (805) 683-7401

Court-Appointed Class Counsel


0


RALPH DEMMICK, on behalf of himself and all others similarly situated; DONALD BARTH, on behalf of himself and all others similarly situated, Plaintiffs, v. CELLCO PARTNERSHIP, a Delaware General Partnership doing business as Verizon Wireless; and DOES 1 through 10,

Defendant.

Civ. Act. No. 06-2163 (JLL)

__________________________________________________________________

ORDER APPROVING PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND

__________________________________________________________________


1

The Court, having reviewed the Plan of Allocation and Distribution of the

Settlement Fund proposed by plaintiffs Ralph Demmick and Donald Barth,

individually and in their capacities as the certified Class Representatives, and

finding the Plan of Allocation and Distribution of the Settlement Fund to be fair,

reasonable and in the best interests of the Settlement Class Members (as defined in

the Settlement Agreement and certified in the Preliminary Approval Order and the

Final Approval Order), hereby ORDERS, ADJUDGES, and DECREES as follows:

DEFINED TERMS

1. The capitalized terms used in this Order Approving Plan of Allocation

and Distribution of the Settlement Fund shall have the same meaning as defined in

the Settlement Agreement.

2. “Cash Component” refers to the $36.7 million in cash that was

transferred by Verizon Wireless to the court-appointed Settlement Administrator

and deposited into an interest earning account, together with all interest earned

thereon until the Date of Distribution (as defined herein below).

3. “Calling Units Component” refers to the $27.5 million in calling units

(based upon a conversion ratio of 10 cents per unit for the 275 million total calling

units) to be distributed to the In-Network Settlement Class Members by means of

personal identification numbers (“PINs”).


2

4. The Cash Component and the Calling Units Component, together,

constitute the “Settlement Fund” in this action.

5. The “Settlement Classes” consist of : (a) the FSP Settlement Class (as

defined in the Settlement Agreement and certified in the Preliminary Approval

Order); and (b) the In-Network Settlement Class (as defined in the Settlement

Agreement and certified in the Preliminary Approval Order).

6. “Date of Distribution” refers to the date on which checks and/or PINs

are mailed to Settlement Class Members.

7. “Settlement Administrator” refers to Kurtzman Carson Consultants

LLC, the Court-appointed settlement administrator in this action.

8. “Net Settlement Fund” means the portion of the Settlement Fund that

remains for allocation and distribution to the Settlement Classes after the court-

ordered disbursements in paragraph 10 below.

9. “Remaining Cash Component” means the portion of the Cash

Component that is available for allocation and distribution to the Settlement

Classes after the court-ordered disbursements described in paragraph 10 below.

COURT ORDERED DISBURSEMENTS

10. Consistent with the orders entered by this Court, the Settlement

Administrator shall make the following disbursements from the Cash Component

of the Settlement Fund:


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a. $ 19,260,000 in attorneys’ fees and $352,883.00 in expenses

shall be disbursed to Class Counsel as set forth in the Court’s Order Awarding

Attorneys’ Fees and Expenses to Class Counsel, plus a pro rata share of the interest

earned by the Settlement Fund through the date of disbursement;

b. $30,000.00 in incentive awards shall be disbursed to the Class

Representatives as set forth in the Court’s Order Granting Incentive Awards to

Class Representatives, plus a pro rata share of the interest earned by the Settlement

Fund through the date of disbursement; and

c. $2,057,647 in fees and expenses incurred or to be incurred by

the Settlement Administrator for notice and settlement administration services

performed for the benefit of the FSP Settlement Class and the In-Network

Settlement Class.

ALLOCATION OF THE NET SETTLEMENT FUND

11. The allocation of the Net Settlement Fund as between the FSP

Settlement Class and the In-Network Settlement Class shall be as follows:

a. After April 29, 2015, which is the deadline for Settlement Class

Members to submit claims, the Settlement Administrator shall determine: (i) the

total number of FSP Settlement Class Members who are eligible to receive benefits

from the Net Settlement Fund; (ii) the total number of In-Network Settlement

Class Members who are eligible to receive benefits from the Net Settlement Fund;


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and (iii) the total number of FSP Settlement Class Members and In-Network Class

Members combined who are eligible to receive benefits from the Net Settlement

Fund. For purposes of this paragraph, Settlement Class Members “eligible to

receive benefits” are (x) those who are on the Class List provided by Verizon

Wireless as set forth in the Settlement Agreement; and (y) those who file timely

claims pursuant to the process set forth in the Plan of Allocation and Distribution;

in each case provided that the eligible Settlement Class Member did not submit a

timely and valid Request for Exclusion as set forth in the Settlement Agreement.

b. The Settlement Administrator shall calculate the portion of the

Remaining Cash Component to be allocated to the FSP Settlement Class (“FSP

Settlement Class Cash Sub Fund”) by multiplying the Remaining Cash Component

by a fraction represented by (i)/(iii) from paragraph 11. a. above. The fraction

shall be calculated such that each Settlement Class Member who is in both the FSP

Settlement Class and the In-Network Settlement Class shall receive two pro rata

shares of the Net Settlement Fund.

c. The Settlement Administrator shall calculate the portion of the

Remaining Cash Component to be allocated to the In-Network Settlement Class

(“In-Network Settlement Class Cash Sub Fund”) by multiplying the Remaining

Cash Component by a fraction represented by (ii)/(iii) from paragraph 11. a. above.

The fraction shall be calculated such that each Settlement Class Member who is in


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both the FSP Settlement Class and the In-Network Settlement Class shall receive

two pro rata shares of the Net Settlement Fund.

d. All $27.5 million of the Calling Units Component shall be

allocated to the In-Network Settlement Class.

DISTRIBUTION OF THE FSP SETTLEMENT CLASS CASH SUB FUND

12. The FSP Settlement Class Cash Sub Fund calculated under paragraph

11.b. above shall be distributed to the members of the FSP Settlement Class as

follows:

a. The Settlement Administrator shall divide the FSP Settlement

Class Cash Sub Fund by the total number of eligible FSP Settlement Class

Members, as defined in paragraph 11.a above, to yield the “FSP Settlement Class

Member Cash Benefit Amount”, which shall be the same dollar amount for each

eligible member of the FSP Settlement Class;

b. For all eligible FSP Settlement Class Members who are

Distribution Customers as defined in the Settlement Agreement, the FSP

Settlement Class Member Cash Benefit Amount shall be distributed to each such

eligible FSP Settlement Class Member by Verizon Wireless by means of a bill

credit, in accordance with the procedures set forth in Article IV.3 of the Settlement

Agreement; and


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c. For all eligible FSP Settlement Class Members who are not

Distribution Customers, the FSP Settlement Class Member Cash Benefit Amount

shall be distributed to each such eligible FSP Settlement Class Member by the

Settlement Administrator by means of a check mailed to the last known mailing

address of each such eligible FSP Settlement Class Member (which address shall

be updated, in the case of FSP Settlement Class Members on the Class List,

according to Article V.1).

DISTRIBUTION OF THE IN-NETWORK SETTLEMENT CLASS

CASH SUB FUND

13. The In-Network Settlement Class Cash Sub Fund calculated under

paragraph 11.c. above shall be distributed to the members of the In-Network

Settlement Class as follows:

a. The Settlement Administrator shall divide the In-Network

Settlement Class Cash Sub Fund by the total number of eligible In-Network

Settlement Class Members, as defined in paragraph 11.a above, to yield the “In-

Network Settlement Class Member Cash Benefit Amount”, which shall be the

same dollar amount for each eligible member of the In-Network Settlement Class;

b. For all eligible In-Network Settlement Class Members who are

Distribution Customers as defined in the Settlement Agreement, the In-Network

Settlement Class Member Cash Benefit Amount shall be distributed to each such


7

eligible In-Network Settlement Class Member by Verizon Wireless by means of a

bill credit in accordance with the procedures set forth in Article IV.3 of the

Settlement Agreement; and

c. For all eligible In-Network Settlement Class Members who are

not Distribution Customers, the In-Network Settlement Class Member Cash

Benefit Amount shall be distributed to each such eligible In-Network Settlement

Class Member by the Settlement Administrator by means of a check mailed to the

last known mailing address of each such eligible In-Network Settlement Class

Member (which address shall be updated, in the case of In-Network Settlement

Class Members on the Class List, according to Article V.1).

DISTRIBUTION OF CALLING UNITS TO THE IN-NETWORK

SETTLEMENT CLASS

14. The $27.5 million Calling Units Component shall be distributed to the

members of the In-Network Settlement Class as follows:

a. The Settlement Administrator shall determine the total number

of In-Network Settlement Class Members eligible to receive calling units, defined

as (i) those who are on the Class List provided by Verizon Wireless as set forth in

the Settlement Agreement; and (ii) those who file timely claims by April 29, 2015;

in each case provided that the eligible Settlement Class Member did not submit a

timely and valid Request for Exclusion as set forth in the Settlement Agreement.


8

b. The Settlement Administrator shall divide the 275 million

calling units in the Calling Units Component by the total number of eligible In-

Network Settlement Class Members, as defined in paragraph 14.a, above, to yield

the “In-Network Settlement Class Member Calling Unit Amount”, which shall be

the same number of calling units for each eligible member of the In-Network

Settlement Class and which shall be rounded down to the nearest calling unit;

c. Each eligible In-Network Settlement Class Members who is on

the Email List as defined in the Settlement Agreement shall receive the In-Network

Settlement Class Member Calling Unit Amount by means of an email that

conveys: (1) the PIN number needed to access the calling units; (2) how to access

and use the calling units; and (3) the terms and conditions applicable to the use of

the calling units; and

d. Each eligible In-Network Settlement Class Member who is not

on the Email List shall receive the In-Network Settlement Class Member Calling

Unit Amount by means of a sealed postcard mailing that conveys: (1) the PIN

number needed to access the calling units; (2) how to access and use the calling

units; and (3) the terms and conditions applicable to the use of the calling units.


9

RETURNED AND/OR UNCASHED SETTLEMENT CLASS MEMBER

CHECKS

15. In order to encourage every Settlement Class Member who is the

recipient of a cash benefit in the form of a check to promptly cash the check that is

received, each such check shall bear the following notation: “CASH THIS CHECK

PROMPTLY. IT IS VOID IF NOT CASHED BY 90 DAYS AFTER THE

DISTRIBUTION DATE.”

16. Any check issued to a Settlement Class Member that is returned to the

Settlement Administrator as undeliverable or that is not cashed by the Settlement

Class Member within ninety (90) days of the Date of Distribution shall be deemed

to have been forfeited by the Settlement Class Member.

RETURNED AND/OR UNDISTRIBUTED CALLING UNITS PINS

17. Any calling units PIN sent to Settlement Class Members by email as

to which the Settlement Administrator receives “send failure,” “bounce-back,” or

other similar email failure notices shall be resent to those Settlement Class

Members by mail. Any calling units PIN sent to Settlement Class Members by

mail that are returned to the Settlement Administrator as “undeliverable” shall be

deemed to have been forfeited by those Settlement Class Members.


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FURTHER PROCEEDINGS

18. Within 150 days after the Distribution Date, the Settlement

Administrator shall submit a report to the Court setting forth: (a) the total dollar

amount of the checks deemed to have been forfeited by Settlement Class Members

under paragraph 16 above; (b) the total amount of calling units represented by the

PINs deemed to have been forfeited by Settlement Class Members under paragraph

17 above; (c) the total amount of calling units undistributed as a result of the

“rounding down” procedure described in paragraph 14(b) above; and (d) an

estimate of the cost of further distribution of these forfeited amounts to the

Settlement Class Members.

19. Also within 150 days after the Distribution Date, Class Counsel shall

file with the Court a Statement of Recommendation with respect to the further

allocation and distribution of: (a) the total dollar amount represented by the checks

deemed to have been forfeited by Settlement Class Members under paragraph 16

above; (b) the total amount of calling units represented by the PINs deemed to

have been forfeited by Settlement Class Members under paragraph 17 above; and

(c) any calling units remaining as a result of the “rounding down” procedure

described in paragraph 14(b) above

20. After considering the report submitted by the Settlement

Administrator and the Statement of Recommendation by Class Counsel, the Court


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shall issue an Order directing the manner of distribution of: (a) the total dollar

amount represented by the checks deemed to have been forfeited by Settlement

Class Members under paragraph 16 above; (b) the total amount of calling units

represented by the PINs deemed to have been forfeited by Settlement Class

Members under paragraph 17 above; and (c) any calling units remaining as a result

of the “rounding down” procedure described in paragraph 14(b) above.

IT IS SO ORDERED. Dated: _______________________ ___________________________________ Honorable Jose L. Linares United States District Judge


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