BAR/BRI Review Course Class Action Settled

" `will affirm if the district judge applies the proper legal stan- we are not persuaded otherwise by objectors' further sub- or collusion between, the negotiating parties, and elizabeth de long, in every antitrust class action. in this case, the settlement is on other grounds as recognized by u.s. football league v. quacy of the settlement was held on june 18 and july 9, 2007. jams, a provider of adr services, who had extensive expe- this case." moreover, the participation of two firms that did the fund, the non-monetary relief, class counsel's intent to b 361 f.3d 566, 575 (9th cir. 2004) (quoting mendoza v. tuc- (rodriguez, frailich, nesci, brazeal, and gintz) had entered this brings us back to the incentive agreements. object (objectors) appeal. their principal objection relates to motion for incentive awards to the class representatives. this ryan rodriguez, et al. counsel "ha[d] as their primary goal achieving the maximum schafer, david oriol, and jason tingle. that the district court improperly denied fees attributable to is for abuse of discretion, powers v. eichen, 229 f.3d 1249, although we have not previously encountered incentive through one round of summary judgment proceedings. from miller, incentive awards to class action plaintiffs: an not signal the possibility of collusion because, by agreeing to a sum cer- act, 15 u.s.c. § 2, by west for bar/bri's anticompetitive breach occurred." id. ment notice was mailed to 376,301 people and published in (brewer v. west publishing corp.) that was consolidated with not have the benefit of fruits from underlying government [16] reaction to proposed settlement. the court had dis- acknowledge. it gave no weight to the objectors' role in rodriguez, et al., interest or otherwise interfere with their ability or motivation 4761rodriguez v. west publishing corp. 4 $500,000, class counsel would seek a $10,000 award for each the sale of west bar review to kaplan by entering a market states that whether incentive awards should be awarded to quantified the expected value of fully litigating the matter. for to "reach any ultimate conclusions on the contested issues of tlement fund far exceeded the ten million dollar trigger for the west publishing corp. and kaplan, inc. entered a settle- we review approval of a class action settlement for a "clear major provider of bar preparation courses throughout the and present a "considerable danger of individuals bringing approve a class action settlement is extremely limited. it is the actions; there were no controlling precedents, especially with culus for determining a reasonable settlement value. sidering the likelihood of a plaintiffs' or defense verdict, the been waived, or otherwise contained, but the point is that from day one. compensate class representatives for work done on behalf of cludes the recovery of fees for conflicting representation. a few years later, in 2001, west bought bar/bri. into account ethics concerns arising out of the incentive participated. nor did the district court clearly abuse its discre- effect, the settlement amount represents approximately ten brewer and rimson were also separately represented. there local joint executive bd. of culinary/bartender trust fund class representatives, as well as attorney's fees, will be deter- rodriguez, et al., successfully opposing kaplan's motion for summary judg- semination were adequate, and that the settlement was fair, because the incentive agreements prevented the class repre- march 3, 2009--pasadena, california tatives meet the rule 23(a)(4) standard; as long as one of the [4] in sum, we disapprove of the incentive agreements vides preparation courses for state bar exams.) the district is there any dispute that counsel had considerable experience ment did not mean that the class had established liability or before: diarmuid f. o'scannlain, pamela ann rymer and tlement by a certified class. the settlement must be "fair, rea- error for the court to consider only estimates of single dam- 4758 rodriguez v. west publishing corp. u.s. 591, 625 (1997). "[a] class representative must be part enced counsel such as those representing all the parties in this range of possible outcomes and ascrib[e] a probability to each to be allocated pro rata to class members based on the amount the class. see wash. pub. power supply sys. sec. litig., 19 ues to be involved in the case.").6 prods. liab. litig., 55 f.3d 768, 806 (3d cir. 1995). ment is not the product of fraud or overreaching by, expense, complexity, and likely duration of further control over their attorneys is limited does not permit even the objectors suggest that the "clear sailing" provision by which west and cv-05-03222-appellants, only five of the seven class representatives had an incentive 2001); 7a charles a. wright et al., federal practice and both issues need to be revisited. bri; kaplan, inc., a delaware for inspection at the clerk's office. rodriguez, nesci, and on behalf of themselves and "[a]ll persons who purchased a tral to adequacy and, in turn, to due process for absent mem- settlement, attested that the negotiations were conducted at -- to a sliding scale based on the amount recovered, the 8 claims against west and kaplan related to the conduct alleged from the incentive agreements. tain, west and kaplan were acting consistently with their own interests in propriate and contrary to public policy for a number of rea- patton; rachel schwartz; greg by the time the motion was filed, brazeal and frailich had but see in re compact disc minimum advertised price antitrust litig., to whom notice of the settlement had been sent, 52,000 sub- corporation, the litigation, and any recovery by class members, for years. evans & mullinix, p.a.; sarah percent of the class's estimate of its own trebled damages and (9th cir. 1995), the court could weigh this factor in favor of settlement negotiations began in november 2006. the ses- treble damages that should also be distributed to class mem- mediated resolution, were before it. objectors do not explain award of $25,000 for frailich, brazeal, brewer, and rimson, sion agreement; and violation of section 2 of the sherman appellants, that the statute of limitations and tolling principles would allow only a comes, and to consider treble damages. agreed to include on the form used to enroll law students a of the proposed settlement versus the probable outcome of a tingle, david oriol; and george schneider, jonathan m. slomba, james trial on the merits of liability and damages as to the claims, how reversing the math on the record would have yielded a class actions, and are sometimes harmed, such as where . . . (b) unjustified comprehensively all factors," id., but a court is not required advertising; paying fees to law schools for preferable access; charles a. sturm, steele sturm pllc, houston, texas, on counsel. it was inserted into the retainer agreement. " `the federal trade commission act and similar laws, regulations class members predominate over any questions affecting only cv-05-03222-v. r(mc) lorraine rimson were named plaintiffs in a related action igation to the class.' " id. at 653 (quoting reynolds v. iv ment as it applies to class members at large." see staton, 327 would seek decertification of the nationwide class and suc- fees and expenses, and counsel's plan to request incentive the danger is exacerbated if the named plain- ethics rules that prohibit representation of clients with con- rule 23(b) provides that a class "may be maintained if rule 23(a) is in part. apart from other members of the class. further, agreements of to represent the class. other factors indicate that the class was take steps to protect the interests of absentee class members. tlement be sent to the class, defined as all persons who pur- adequate, and reasonable even though it evaluated the mone- beneficial settlement. all things considered, the district court molski, 318 f.3d at 953; accord staton, 327 f.3d at 959. exists has not been adjudicated. the first amended complaint alleges the who had no incentive agreements and whose separate counsel david oriol; jason tingle, no. 07-56646 agreements had on class counsel's request for an award of d.c. no. remand the denial of fees to objectors' counsel for a determi- [8] while neither the settlement notice nor the settlement and a "sharing of interests between representatives and absen- mitment to full payment; and west agreed "that it is commit- this factor, too, favors the settlement. three non-party witnesses. the parties also conducted deposi- ment agreement in an antitrust class action brought by those tion in determining that the amount of the settlement favored daniel schafer, gintz, nesci, and rodriguez. it indicated that a final settle- with clients and among lawyers; and they encourage figure- understood the implications, this did not create a conflict of tives. mcguirewoods llp was appointed class counsel. brewer and rimson. see hanlon, 150 f.3d at 1020. the court point out is a disfavored substitute for distribution of benefits bers." pub. l. no. 109-2, § 2(a)(3), 119 stat. 4. the court found it particularly problematic that the incentive services provided before the conflict arose and the ethical [15] discovery completed; state of proceedings. extensive benefit, like some other antitrust classes, of previous litigation wake of that objection, the court denied the motion for incen- rodriguez, et al., this the district court could find that counsel had a good grasp ment. they were separately represented, by finkelstein then trading on that leverage in the course of negotiations." agreements correlated the incentive request solely to the set- serv., 136 f.3d at 1358. "an attorney may claim fees only for pres kicks in. we therefore decline to consider the propriety 4745rodriguez v. west publishing corp. flicting interests (and without written informed consent) is an on the merits balanced against the amount offered in settle- 653. unreasonable and the incentive agreements were inappropriate required to reject the settlement for inadequate representation. plaintiff-appellee, members to the proposed settlement. any, consideration to treble damages.8 no. 07-56647richard p. le blanc, february 2, 2007, though class representatives rodriguez, in reality, parties, counsel, mediators, and district judges ages without considering the treble damages that are an auto- incentive agreements that were entered into at the onset of liti- tions of five expert witnesses. troversy. the matters pertinent to these findings include: 4765rodriguez v. west publishing corp. wasteful and expensive litigation that induce consensual set- whether counsel could represent both the class representatives opinion courts do not traditionally factor treble damages into the cal- tlement and dissemination of the settlement notice, but corporation, potential recovery, and the chances of obtaining it, discounted and the stage of the proceedings; [6] the experience with incentive awards in staton v. boeing co., 327 f.3d 938 the settlement. it describes the aggregate amount of the settle- their counsel, and the rest of the class. we disapprove of tives), their counsel (later certified as class counsel), and the at least, implicated. we realize that conflicts of interest sidney k. kanazawa, mcguirewoods llp, los angeles, rest of the class. it was inappropriate not to disclose these pamela collins, no. 07-56651 fornia, on behalf of objectors-appellants david feldman, nia rules of professional conduct prohibiting fee-sharing tective order, that group did not take advantage of access which was pro- . . . the likelihood of a treble as well as a single damages recov- corp., 290 f.3d 1043, 1051 (9th cir. 2002). therefore, we puntumapanitch, justice head, ryan helfrich. we refer to these groups 4776 rodriguez v. west publishing corp. apprise class members of the essential terms and conditions of cv-05-03222-v. r(mc) award payments to the class representatives was filed. in the amchem prods., 521 u.s. at 627. by the class expert -- $158 million to $168 million. this anal- and the risks of establishing liability and damages." f.3d at 1302. it may be that the record is insufficient for the we conclude that the district court did not clearly abuse its not enter incentive agreements, finkelstein thompson and six groups of objectors have timely appealed.2 this sort infect the class action environment with the troubling collectively as "objectors" and treat the issues as if raised by all of them. naturally arrive at a reasonable range for settlement by con- behalf of objectors-appellants james juranek, audrey litig., 19 f.3d 1291, 1294 n.2 (9th cir. 1994), and our review the pleading also alleges that bar/bri erected and main- own] incentives than with judging the adequacy of the settle- the incentive agreements that bear on whether the settlement § 11:38 (4th ed. 2008); theodore eisenberg & geoffrey p. rodriguez. all were eventually designated as class representa- 4754 rodriguez v. west publishing corp. the very uncertainty of outcome in litigation and avoidance of reverse and remand the award of attorney's fees to class coun- effect on its decision to deny the request for incentive awards; u.s. 147, 160 (1982). west and kaplan vigorously opposed fully opposing the incentive awards and should be allowed vate consensual agreement negotiated between the dard and his or her findings of fact are not clearly errone- justice, 688 f.2d at 625, and have never prescribed a particu- may put the class representative in a conflict with the class objectors suggest that an intra-class conflict exists based on speculation r(mc) class counsel. entered into between the named plaintiffs and class counsel in counsel weighs in favor of approving the settlement. all class members who would be bound by the proposal." fed. tives not likely served by including the adversarial positions boggio; sandeep gopalan; no. 07-56650 accordingly. [7] "the court must direct notice in a reasonable manner to in the class action fairness act of 2005 (cafa), congress made the fol- class members, without affecting the entitlement to fees. "that may bear on review of a settlement" is "the advantages benefitted the class members, and to award attorney's fees age to attain a remunerative settlement for themselves and sibility of conflict was disclosed to the court so that it could numerous other acts of anticompetitive conduct such as enter- [1] the strength of plaintiffs' case; [2] the risk, cameron gharabiklou, emily grant, jeff lang, sarah bar/bri then acquired west bar review in the fall of 1997. to the extent not addressed, we are not persuaded of their merit. called west bar review that competed with bar/bri in the satisfied and if: 4764 rodriguez v. west publishing corp. class members given that, of 376,301 putative class members finally, we believe that the incentive agreements may have 602, 607 (9th cir. 1997)). here it adopted the lodestar. a nation of a reasonable amount given their contribution to the representation requirement is satisfied as long as one of the linney v. cellular alaska p'ship, 151 f.3d 1234, 1239 (9th matic component of the recovery of antitrust damages. 15 have adversely affected the adequacy of representation. see 6 sure to the class -- of the incentive agreements. in particular, considered its effect in determining whether the conflicted ing both damages and liability. the problem is that the district notices are supposed to present information about a proposed approval to the settlement agreement in a thirty-seven page meaningfully different result. accordingly, the court did not gation of the claims in the particular forum; and clusions of law. it found that the settlement notice and dis- ment fund. id. (quoting in re coordinated pretrial tive; and, as the second circuit indicated in city of detroit v. did not materialize and there is no cognizable prejudice. see generally court nowhere appears to have considered the effect on the c a $25,000 award; if it were $5 million or more, counsel would sons: they obligate class counsel to request an arbitrary award louisiana state university, a bar/bri competitor for prepa- negotiated resolution, hanlon, 350 f.3d at 1027; officers for during discovery, class counsel reviewed more than to produce only a "ballpark valuation." synfuel, 463 f.3d at david feldman; cameron defendants-appellees. subclass to pursue the section 7 claim, but whether a subclass actually this they rely on the seventh circuit's opinion in synfuel rodriguez, et al., through application of the cy pres doctrine. west and kaplan ated conflicts among them (later certified as class representa- primary market through acquisition of west bar review. sion when the attorney's fees were to be paid on top of the settlement fund 526 f.3d 499, 508-09 (9th cir. 2008) (en banc). settlement; [5] the extent of discovery completed, francisco, 688 f.2d 615, 625 (9th cir. 1982). sel for consideration of the effect, if any, of the incentive told the district court about the incentive agreements. even fed. r. civ. p. 23(e) requires judicial approval of any set- non-refundable option for bar/bri's course when they grad- litig., 213 f.3d 454, 463 (9th cir. 2000), and are intended to [11] strength of the plaintiffs' case. the court noted that daubert v. merrell dow pharm., inc., 509 u.s. 579 (1993) (establish- appellants, d.c. no. 2002 included an incentive award to class representatives). -- objec- that the settlement, taken as a whole, is fair, reason- sions applicable to the act and rules. c.d. cal. l.r. 83-3.1.2. informed judicial consideration of the adequacy of class rep- 2006. the settlement notice informed class members of the contracting class representatives' incentive agreements. james p. tallon, shearman & sterling llp, new york, new resentatives, finding that the amount was unreasonable in contracting class representatives' interests actually different conflicted class representatives with non-conflicted counsel 4759rodriguez v. west publishing corp. kaplan agreed not to contest attorney's fees or incentive awards of no [13] risk, expense, complexity, and likely duration of fur- to verdict, seeking injunctive relief, and insisting on compen- here, their argument goes, the settlement agreement distrib- delicate balancing, gross approximations and rough justice." utes funds to class members up to thirty percent of the amount acquired west in 1996 and sought to divest itself of west bar york (marino bar review); including non-compete clauses in nent; and the fund in this case may well be depleted before cy division agreement with kaplan whereby bar/bri agreed to two class representatives, was party to an incentive agree- controversy already begun by or against class members; defendants-appellees. here, the court balanced each of the relevant factors in of the incentive agreements on the request by class counsel defendants-appellees. incentive awards will be sought. in the circumstances this was bers"); in re gen. motors corp. pick-up truck fuel tank also gave rise to a disturbing appearance of impropriety. and incentive awards are fairly typical in class action cases. see n. albert bacharach, jr., n. albert bacharach, jr., p.a., clearly abused its discretion in approving the settlement. approval, whether compared to the likely recovery of single, court's determination is nothing more than an amalgam of point out that much heavy-lifting had already been done, a because the section 7 claim was worth treble the class expert's defendants-appellees. orders denying any fee award to objectors and granting the point on the range.' " id. however, our approach, and the fac- arrived at through arm's length negotiations by counsel who the district court should have recognized that objectors' ments were posted at www.barbri-classaction.com, and pro- untimely, which it had discretion to do. see united states v. w.r. grace, with west or kaplan at that time, allegedly sought to thwart plaintiff-appellee, by virtue of the district court's local rules, california law appellants, they "did not add anything to the court's order denying" the [10] objectors who challenged the incentive awards argue each party shall bear its own costs on appeal. we think it appropriate for the district court to consider 4757rodriguez v. west publishing corp. we conclude that incentive agreements, entered into as part j. darrell palmer, law offices of darrell palmer, solana minnesota corporation, dba bar- lar formula by which that outcome must be tested. as we lon, 150 f.3d at 1026 (internal citation omitted). "to survive much of the appeal turns on the presence -- and nondisclo- oppose any application for an incentive award seeking no v. cv-05-03222- and lengthy to try. the class in this case does not have the value of fully litigating the case. in our view, the notice con- bri; kaplan, inc., a delaware undertaken, or the time spent on the litigation; they create at who were skilled and knowledgeable about the facts and law remained that the nationwide class might be decertified; it million is in cash, not in kind, which is a good indicator of a iii plaintiff-appellee, depriving the court, and the class, of the safeguard of gharabiklou; emily grant; jeff tary portion of the settlement based only on an estimate of the incentive agreements did not just happen, nor was it a con- adequacy inquiry. see amchem prods., inc. v. windsor, 521 nat'l football league, 887 f.2d 408, 415-16 (2d cir. 1989), 4771rodriguez v. west publishing corp. objectors contend that they benefitted the class by success- attorney's fees. `the court's intrusion upon what is otherwise a pri- recover fees for such conflicting representation." image tech. minimizing liability. cf. weinberger v. great n. nekoosa corp., 925 f.2d v court to make a reasoned judgment; if so, an opportunity d.c. no.appellants, ery. we have never precluded courts from comparing the set- corporation, mcdonald, cara patton, rachel schwartz, greg thomas; sarah siegel, r.r., 627 f.2d 631, 634 (2d cir. 1980) (requiring the class notice to be nesci, and gintz, the district court granted preliminary in fact, the incentive agreements came to the fore when certification of a nationwide class, sought (albeit unsuccess- were skilled and knowledgeable about the facts and law of 07-56833justin head; ryan helfrich litigation. as we have held that "[p]arties represented by com- kaplan moved for summary judgment, which the district agreement discloses the incentive agreements, both show that ranges by both parties and their experts, and the results of a thus leaving the decision whether actually to make one to the gleich, 318 f.3d 937, 955 (9th cir. 2003) (noting that ade- appellate review, the district court must show it has explored head cases and bounty payments by potential class counsel. cannot reasonably be evaluated without measuring it against 4760 rodriguez v. west publishing corp. in litigation," in re pac. enters. sec. litig., 47 f.3d 373, 378 bar review by early august 1997. bar/bri, unaffiliated to do this, the seventh circuit directs courts to " `estimate the zwerling, shachter & zwerling, assuages any additional con- lang; sarah mcdonald; cara no. 07-56645 ingly, we affirm approval of the settlement. we reverse the damages are a fact of life in antitrust litigation. in some cases district judge, these agreements tied the promised request to appellants, d.c. no. objectors added value that increased the fund or substantially agreements created actual conflicts of interest in violation of was fair, adequate, and reasonable. the most serious have to plaintiffs -- rodriguez, frailich, nesci, brazeal, and gintz -- tech., inc. v. dhl express (usa), inc., 463 f.3d 646 (7th to us. the court was not focused on the incentive agreements a 4774 rodriguez v. west publishing corp. resentation. york, on behalf of defendant-appellee west publishing cor- the ultimate recovery and in so doing, put class counsel and siegel; jennifer brown mcelroy; no. 07-56649 explained in officers for justice, "[u]ltimately, the district rules of professional conduct of the state bar of california, and the deci- section 7 claim on behalf of the entire class, and the settlement provides allow. a notice of class certification was sent to putative class cretion to find a favorable reaction to the settlement among panitch, justin head, and ryan helfrich. service or value they will provide to the class. each group does, however, make discrete arguments. we have considered minnesota corporation, dba bar- for publication to provide a meaningful description of the terms of the settle- of stock in the product of an arms-length, non-collusive, context the district court held that the agreements were inap- particular case warrants it; but they are not obliged to do so course, correct. it noted the difficulty of proving an antitrust ryan rodriguez and reena b. frailich brought this action were not conflicted. they provided adequate representation trial (thus undercutting the point of a negotiated resolution [17] for these reasons, we cannot say that the district court united states court of appeals pay kaplan and to withdraw from markets for other test prep- by all other class members who file an allowable claim. each 4743 between the defendants and the government. while objectors [6] accordingly, we conclude that the presence of con- 518, 524 (1st cir. 1991) (inferring collusion from a "clear sailing" provi- award of attorney's fees of the conflict of interest that resulted mission that the court should have specifically weighed the abused its discretion in weighing the amount offered in settle- approving the settlement. qualification." image tech. serv., 136 f.3d at 1358; flatt, 885 plaintiff-appellee, of the strengths and weaknesses of the claims and defenses james juranek, audrey juranek, richard p. leblanc; robert gaudet, resentatives. given this, we cannot let stand a ruling that plaintiff-appellee, reject the settlement negotiated in this case because two non- ment by " `quantifying the net expected value of continued lit- securing denial of incentive awards, nor did the court take gintz disclosed the existence of the incentive agreements in f.3d 1370, 1373-74 (9th cir. 1993); marshall v. holiday cv-05-03222-v. 4751rodriguez v. west publishing corp. substantive relief that they could," and agreement "was minnesota corporation, dba bar- was met, the agreements created a disincentive to go to trial; class counsel filed a motion seeking incentive awards for monetary component of a settlement to the estimated treble benefitted the class members. see vizcaino v. microsoft west publishing corporation, a parties' failure to disclose their agreement to the court, and to jr., andrea boggio, sandeep gopalan, elizabeth de long. what we require. see torrisi v. tucson elec. power co., 8 members) for each claim, treble damages, and injunctive and $75,000 for rodriguez, nesci, and gintz to compensate incentive agreements could tempt potential plaintiffs to sell interests of the contracting representatives from the class. as bers. however, this issue becomes ripe only if the entire set- ciently balanced, accurate, and informative way to satisfy due of five named plaintiffs' retainer agreement with counsel, cre- objectors press a number of issues apart from the effect of petent counsel are better positioned than courts to produce a august 1997 to the present. west and kaplan sought interloc- before the final fairness hearing. it turns out that, as part of beneficial nat'l bank, 288 f.3d 277, 284-85 (7th cir. 2002)). twenty-eight percent of settled class actions between 1993 and before objectors took exception to them after the motion to 4775rodriguez v. west publishing corp. [9] objectors contend that the settlement notice also failed the objectors' remaining arguments lack force. accord- conduct. the class seeks recovery of actual damages of at minnesota corporation, dba bar- united states for decades. in 1995, west started a business the contracting representatives an interest in a monetary set- tains adequate information, presented in a neutral manner, to settlement taken as a whole, rather than the individual compo- court denied. west had yet to file a motion for summary judg- tained various entry barriers to the market for bar preparation act, 15 u.s.c. § 18, by west for the acquisition of west bar through to a fair settlement with the participation of two non- dural defenses to all three of the class's claims (including a found their representation was adequate; and judge wein- 23(a)(4), (g)(4). class counsel vigorously prosecuted the case superior court of california, san francisco county) of 4766 rodriguez v. west publishing corp. fee award to class counsel, and remand. least $300 million ($1,000 for each of the estimated 300,000 llp, seattle, washington, on behalf of plaintiffs-appellees int'l union, united auto., aerospace, & agric. implement workers of proceedings in petroleum prods. antitrust litig., 109 f.3d is to the class as a whole and it includes reporting potential the class to ride. counting this factor in favor of settlement process concerns. andrea boggio, sandeep gopalan, elizabeth delong; pamela collins; kim mclane wardlaw, circuit judges. a marginal individual gain even if the verdict were signifi- tlement fund is not distributed to class members. see six (6) flict with the class. the class, to make up for financial or reputational risk appeal from the united states district court [18] we require only that fee awards be reasonable in the and rules." in exchange, class members agreed to release all procedure § 1765, at 326 (2005) ("[i]f there is more than one defendants-appellees. responsibility of class counsel to absent class members whose damages. sation greater than $10 million. it further observed that the and it should have considered what effect, if any, the ethics lowing finding: "class members often receive little or no benefit from corporation, west publishing corporation, a we expect those interests to be congruent. see molski v. tlement to the likely recovery of treble, as well as single, who is party to one can adequately represent the class. how- bri; kaplan, inc., a delaware injury' as the class members." e. tex. motor freight sys. inc. cess because it omitted material information about the agree- therefore, we affirm approval of the settlement. we ment fund and the plan for allocation, thereby complying with implications of a conflict of interest created by the incentive agreement. brewer and rimson did not. "[t]he adequacy-of- also agreed to terminate their marketing agreement; west agreed to pay $49 million into a settlement fund. the fund is case, and that kaplan and west had substantive and proce- ant to either a lodestar or a straight percentage of the settle- a court, asked to approve a settlement, may believe the class's 4752 rodriguez v. west publishing corp. in litigating antitrust matters, class actions, and other complex scott l. nelson, public citizen litigation group, washing- least the appearance of impropriety; they violate the califor- settlement that fairly reflects each party's expected outcome vided and sought to unseal those records more than three weeks after the expect the district court to revisit all aspects of the award to amount offered in settlement. objectors claim it was legal son sch. dist. no. 1, 623 f.2d 1338, 1352 (9th cir. 1980)). the settlement fund, the district court has a fiduciary role for a final, adverse judgment. at the time of settlement, the risk rience in this type of case. an agreement was executed on west publishing corporation, a large incentive award will be made that is untethered to any promised in the incentive agreement, but gintz, nesci, and f.3d at 977-78. we explained that excess incentive awards ted to accurate advertising as required by the lanham act, the it follows that the settlement notice was not fatally defec- dana nesci, jennifer brazeal, and lisa gintz. kari brewer and regard to the section 7 claim; defense counsel were skilled 1313 (9th cir. 1990) (fernandez, j., concurring). that trigger conflict issues. neither the incentive agreements nor the pos- seek twenty-five percent of the settlement fund for attorney's sions were mediated by the honorable daniel weinstein (ret. defense expert had opined that there likely would be no dam- ing out of the existence of incentive agreements. id. (quoting officers for justice, 688 f.2d at 625). 1020 (9th cir. 1998). the notice does not detail the content of objections, or analyze tors we identify, are somewhat different. we put a good deal representatives is adequate, the requirement will be met."). thompson llp, and zwerling, shachter & zwerling, llp. and the court was not required to reject the settlement on this rodriguez, et al., settlement fund, and that west and kaplan agree not to fact and law which underlie the merits of the dispute, for it is review. kaplan entered into a letter of intent to acquire west sion to deny incentive awards. this seems clearly erroneous the section 7 claim, adequacy of the monetary portion of the aration courses, while kaplan agreed not to enter bar/bri's damages; thus, the cy pres provision effectively substitutes for representatives were "more concerned with maximizing [their ing threshold standards for admissibility of expert scientific testimony). for the central district of california claims are stated for violation of section 7 of the clayton cantly greater than the settlement. the agreements also gave possibly in other respects. this could call the nationwide class tlement, as distinguished from other remedies, that set them bri; kaplan, inc., a delaware ysis compared the settlement amount to the best possible out- position on the impropriety of incentive agreements had some single damages. courts are not precluded from comparing the the record, that the case is complex and likely to be expensive and formidable; and there were a number of hurdles in prov- v. cv-05-03222- dized students considering a competitor's course; and paying of them; if it were $1.5 million or more, counsel would seek ment when a settlement was reached. this case. they created an unacceptable disconnect between them. nevertheless, there were two other class representatives we express no opinion on the impact of these principles on 216 f.r.d. 197, 210 n.30 (d. me. 2003); in re auction houses antitrust 9 been and where it was plainly relevant, at the class certifica- single damages estimate -- or $360 million. it reasoned that assuming these two knew about the incentive agreements and cerns. see id. majority (hence, not all) of the class representatives approve 4755rodriguez v. west publishing corp. interests (and without informed written consent) is an auto- was not a clear abuse of discretion. bri; kaplan, inc., a delaware each paid for bar/bri courses relative to the amounts paid west publishing corporation, a p.2d at 955. under california law, "[a]n attorney cannot sentatives from providing adequate representation. relatedly, bers of the class. hanlon v. chrysler corp., 150 f.3d 1011, for the ninth circuit would undoubtedly have appealed certification if there were failing to disclose the incentive arrangements in connection class representatives is an adequate class representative." corporation, and contrary to public policy. the net effect was to leave abuse of discretion." molski, 318 f.3d at 953. this court tion stage. had it been, the district court would certainly have awards are generally sought after a settlement or verdict has amount of the alleged overcharge, the estimated recovery bar review course from bar/bri in the united states from flicting interests.3 4768 rodriguez v. west publishing corp. 688 f.2d at 625 (internal quotation marks and citation omit- d.c. no.thomas, r(mc)west publishing corporation, a bri; kaplan, inc., a delaware ceed in the endeavor, as objectors suggest, to weigh this fac- possible outcomes and ascribe a probability to those out- tlements," officers for justice v. civil serv. comm'n of san and views of counsel; [7] the presence of a govern- denied the motion for incentive awards to all seven class rep- offering a purported scholarship program that actually subsi- lumber co., 51 f.3d 1449, 1465 (9th cir. 1995) (quoting sul- required to use the service. it avers that bar/bri engaged in a final hearing on the fairness, reasonableness, and ade- arm's length; there was no evidence of collusion;5 "was arrived at through arm's length negotiations by counsel of objectors. we therefore conclude that the notice communi- v. livan v. chase inv. servs. of boston, inc., 79 f.r.d. 246, 258 ley, pasadena, california, on behalf of objectors-appellants twenty-five percent of the settlement fund. percent of the settlement fund, is grossly excessive. we rodriguez, who objected to the settlement, did not. incentive ous.' " id. (quoting in re mego fin. corp. sec. litig., 213 83-3.1.2. "simultaneous representation of clients with con- [5] this said, we do not believe the district court was a class at any time. see gen. tel. co. of sw. v. falcon, 457 r. civ. p. 23(e)(1). "notice is satisfactory if it `generally or treble, damages. by any measure, this settlement is fair, ment in favor of approving the settlement. vice-versa. in addition, these agreements implicate california merits of the class's case against the settlement amount and mitted claims forms and only fifty-four submitted objections. (d) the likely difficulties in managing a class action." nesci, and gintz objected and refused to authorize execution v. reservists comm. to stop the war, 418 u.s. 208, 216 the prosecution or defense of separate actions; with whom there was an incentive agreement, and absentee r(mc)west publishing corporation, a u.s.c. § 15(a). the district court found that the $49 million parties to a lawsuit must be limited to the extent nec- flicted representatives was harmless. similarly, the adequacy mental participant; and [8] the reaction of the class an application would be made to the court for an incentive also indicated that the settlement agreement and related docu- adequately represented: judge weinstein, who mediated the tial retention of counsel in this case, however, are quite differ- the class representatives after preliminary approval of the set- for an attorney's fee award. damages if, in their informed judgment, the strength of the of cy pres at this time. ton, d.c., on behalf of objectors-appellants robert gaudet, corporation, tiffs have an advance guarantee that a request for a relatively r(mc) adequate, and reasonable. court approved the settlement, and several class members who approval of the settlement and directed that notice of the set- rymer, circuit judge: named representative, it is not necessary that all the represen- v. rodriguez, 431 u.s. 395, 403 (1977) (quoting schlesinger ing into an agreement that eliminated a competitor in new in the complaint. in judge weinstein's opinion, the settlement id. at 976-77.4 an antitrust action. likewise, the mediator in this case. as we we agree that the ex ante incentive agreements created been achieved. at the same time, treble do with the district court's evaluation of the amount offered an effect on attorney's fees that the district court did not seek $50,000; and if it were $10 million or more, counsel consisting of all persons who purchased a case will certainly be aware of exposure to treble damages in agreement where the awards request indicated that the class 4769rodriguez v. west publishing corp. deadline for filing objections was may 21, 2007. the settle- contracts with law school faculty and other staff to prevent 1 cerns that a conflict created by the incentive agreements may p. 23(b)(3) class1 and july 31, 2006. (bar/bri is a subsidiary of west that pro- $325,000 in the settlement fund -- for distribution to the class which the district court did. wash. pub. power supply sys. (a) the class members' interests in individually controlling all of the arguments even though we may not discuss them specifically. come for the class, without taking into account the significant complex litigation § 21.62, at 316 (4th ed. 2004) (one factor point has not been reached; no cy pres disbursement is immi- alert those with adverse viewpoints to investigate and to come magic, inc., 550 f.2d 1173, 1177-78 (9th cir. 1977). while available methods for fairly and efficiently adjudicating the con- does not require the notice to set forth every ground on which class mem- them from working for competitors; destroying competitors' trict court improperly failed to compare the amount of the set- among class members are not uncommon and arise for many and the class they seek to represent is a critical purpose of the agreements when it awarded attorney's fees to class counsel. right to opt-out of the class before august 13, 2006. nent parts, that must be examined for overall fairness." han- the central district of california has adopted the state bar act, the relief. ages but if there were any, they would not exceed $7 million. discovery had been conducted, and the parties had gone 2 any remaining funds are to be distributed by the district court litigation; [3] the risk of maintaining class action sta- "[s]imultaneous representation of clients with conflicting 4767rodriguez v. west publishing corp. doing so would presuppose that plaintiffs prevail at the end of accordingly, we remand for the district court to consider in stuart n. senator, munger, tolles & olson llp, los ange- award to each class representative to be paid from the gross into an incentive arrangement with van etten suzumoto & (1974)); see also amchem prods., 521 u.s. at 625-26. an 7 [12] in this case, the negotiated amount is fair and reason- was not so minimal that this factor could not weigh in favor grinnel corp., 495 f.2d 448, 458 (2d cir. 1974), overruled minnesota corporation, dba bar- court "may consider some or all of the following factors" from the class's interests in settling a case instead of trying it juranek, and richard p. leblanc. made from the settlement fund, capped at $49 million. this scenario does 4762 rodriguez v. west publishing corp. have emphasized, which inquires could be sent. the settlement agreement itself duties to the class and duty of candor to the court. the class, violated the contracting representatives' fiduciary cv-05-03222-v. objectors argue the amount of the fee award to class coun- their lawsuits to attorneys who are the highest bidders, and ment, including the content of objections and the expected awards of $25,000 for class representatives brazeal, brewer, corporation, am. v. gen. motors corp., 497 f.3d 615, 630 (6th cir. 2007) ("rule 23(e) ment hearing would be held on june 18, 2007, and that the sel, including the 1.75 multiplier and the cap at twenty-five the settlement notice advised absent class members that compensation to the entire class for this claim. thus, any potential conflict see, e.g., churchill village, 361 f.3d at 577 (affirming agreed to lower their request to $25,000 from the $75,000 kodak co., 136 f.3d 1354, 1358 (9th cir. 1998) (noting that essary to reach a reasoned judgment that the agree- on their behalf. under the agreement, west and kaplan class counsel will submit an application for an incentive enrolled in a bar/bri course; and advertising constantly on claim is so strong that the merits of the amount negotiated bers might object to the settlement."); in re traffic executive ass'n-e. nos. 07-56643,slomba; james puntumapanitch; would obtain a favorable, unanimous jury verdict. this is, of california; dan drachler, zwerling, schachter & zwerling, as a whole -- that otherwise would have gone to the class rep- became class representatives. they also contend that the dis- in any event, the court declined to accept objectors' argument collins. on march 26, 2007, over the objections of rodriguez, more than $25,000. several national periodicals. fifty-four objections were filed. tlement amount to both single and treble damages. by the gation between class counsel and five named plaintiffs who sufficient to alert class members to follow-up if they had con- 10 decision of the parties. see hanlon, 150 f.3d at 1027. experi- in an argument related to their position on treble damages, on may 15, 2006, the district court certified a fed. r. civ. 4744 rodriguez v. west publishing corp. 885 p.2d 950, 955 (cal. 1994). attorney's fees for the effort. conversely, they question the more than twice that estimated by west and kaplan. the $49 account. at thirty percent of the amount that member paid to bar/bri. agreements at the class certification stage, because an ex ante [14] risk of maintaining class action status. the court did stein, who oversaw the settlement negotiations, believed that of this case," and it was "fair, reasonable and adequate in light this circuit has long deferred to the private consensual westlaw, which often has a captive audience of law students 5 steven f. helfand, helfand law offices, san francisco, cali- a document filed with the court on march 6, 2007. the notice substantial and meets the standard for approval by any mea- tive for failing to disclose the actual or potential conflict aris- cated the essentials of the proposed settlement in a suffi- 4750 rodriguez v. west publishing corp. behalf of the class, and that the petition for incentive awards, of these five in an amount that slid with the end settlement or the interests of the contracting representatives and class coun- cases as class actions principally to increase their own lever- objectors assert that the settlement notice offends due pro- sure. "scrupulously neutral"); grunin v. int'l house of pancakes, 513 f.2d 114, the operative complaint alleges that bar/bri has been the difference between the class's estimate and the defense's. the would seek $75,000. neither brewer nor rimson, the other tive awards in its entirety because the amounts requested were forward and be heard.' " churchill vill., llc v. gen. elec., and rimson. j. garrett kendrick and c. benjamin nutley, kendrick & nut- review by bar/bri; violation of section 1 of the sherman verdict amount: if the amount were greater than or equal to objectors submit only that brewer and rimson should have describes the terms of the settlement in sufficient detail to mexican workers v. ariz. citrus growers, 904 f.2d 1301, evans & mullinix, p.a., jennifer brown mcelroy, daniel schafer, jason (b) the extent and nature of any litigation concerning the utory review of the certification order, which we declined to manuel l. real, district judge, presiding individual members, and that a class action is superior to other nize their willingness to act as a private attorney general. issues, or defenses of the class and individual class mem- able and adequate to all concerned.' 4772 rodriguez v. west publishing corp. ted). the seventh circuit also recognizes that precision is light of the work and risk undertaken, and that the incentive appearance of shopping plaintiffships. if allowed, ex ante mcdonald, cara patton, rachel schwartz, and greg thomas. feb. 22, 2001). settlement order and fifty pages of findings of fact and con- objectors did nothing that increased the fund or substantially market for state bar preparation courses. thomson company deadline for filing objections. the district court denied that motion as of the settlement. bar review courses are given on a state-by- public policy. it denied fees to objectors' counsel because discretion in finding that the $49 million settlement was fair, although the district court did not put it this way, the no other adequacy-based ground for rejecting the settlement appears. 4 william b. rubenstein et al., newberg on class actions could adequately represent the class. the conflict might have matic ethics violation in california"); flatt v. superior court, see image tech. serv., inc. v. eastman august 1997 to the present" against west and kaplan. they number of serious hurdles remained -- daubert motions,9 agreements, we expressed concern about similar problems class member's allocation from the settlement fund is capped george schneider; jonathan m. tus throughout the trial; [4] the amount offered in them for their participation in, and prosecution of, this case on should be afforded for the parties to develop the record. ii ments, and that the settlement itself should have been rejected incentive agreements disjoined the contingency financial happened after preliminary approval of the settlement. in that potential statute of limitations defense that could decrease the tor in favor of the settlement. a district court may decertify mullinix, p.a., sarah siegel, jennifer brown mcelroy, daniel chased a bar review course from bar/bri anywhere in the to the extent one group of objectors claims this is misleading because [19] at the fee-setting stage when fees are to come out of between class representatives and class members. the court f.3d at 458). "our review of the district court's decision to argued and submitted david feldman, cameron gharabiklou, emily grant, jeff lang, sarah the expected value, we do not see why it should. settlement settlement neutrally, simply, and understandably7 each paid to bar/bri; this is based on an estimate of single 4777rodriguez v. west publishing corp. fully) to take an interlocutory appeal from that order, and of the class and `possess the same interest and suffer the same members in the summer of 2006, informing them of their poration. west's anticipated motion for summary judgment, and a litig., no., 00 civ. 0648 (lak), 2001 wl 170792, at *7-10 (s.d.n.y. motion for incentive awards, but awarded class counsel its that work. the court rejected their request for fees on the foot- conflicted law firms that represented class representatives automatic ethics violation in california and grounds for dis- settlement, not providing for the break-up of bar/bri, the cy bar review course from bar/bri in the united states from where defendants do not admit liability); it would be specula- to present value. see federal judicial center, manual for v. las vegas sands, inc., 244 f.3d 1152, 1162 n.2 (9th cir. d.c. no. becker, which preceded mcguirewoods llp. the incentive [3] we agree. by tying their compensation -- in advance sonable, and adequate." fed. r. civ. p. 23(e)(2). a district west publishing corporation, a objectors also challenge the cy pres provision, which they district courts to determine the strength of the plaintiff's case on the merits of their case before settlement talks began. nor having upheld approval of the settlement agreement, we robert gaudet, jr.; andrea order. on september 10, 2007, the district court gave final [1] the incentive agreements entered into as part of the ini- (9th cir. 2003). there, we declined to approve a settlement must consider the award of attorney's fees to class counsel. going to trial would put their $75,000 at risk in return for only clearly abuse its discretion in concluding that this factor the first instance the effect, if any, of the conflict arising out tlement or litigated recovery, as the effect was to make the adequate, and reasonable despite the conflict of interest in settlement, in particular, its failure to estimate the range of decline to address this argument at this time. on remand, we and took one deposition pursuant to fed. r. civ. p. 30(b)(6). meets this standard: awards in the amount of $25,000 were also sought for brewer incentive agreement is relevant to whether a named plaintiff size of the class). also, there were no government coattails for uncovering conflicts of interest between the named parties mined at the final settlement hearing. it also provides that settlement represented thirty percent of the damages estimated is no evidence or contention that these two had any other con- plaintiff-appellee, (3) the court finds that the questions of law or fact common to $49 million settlement fund, the methodology for allocating tees") (internal quotation marks and citation omitted). they cir. 2006), which follows that circuit's precedent requiring minnesota corporation, dba bar- the fees request in this case, but it is apparent that they are, pensates the class for past injuries, without giving much, if affirmed in part; reversed and remanded controls whether an ethical violation occurred. c.d. cal. l. r. quate representation consists of an "absence of antagonism" congress has also expressed concern with the potential abuses of not have to analyze the probabilities that west and kaplan "[e]ach side aggressively advocated their positions," class minnesota corporation, dba bar- opinion defendants-appellees. with class certification compounded these problems by circumstances, in re wash. pub. power supply sys. sec. 4753rodriguez v. west publishing corp. ever, this impropriety did not require the district court to appearance of divided loyalties of counsel.' " kayes v. pac. impossible, and that even its more structured approach is apt directly to class members. see molski, 318 f.3d at 954-55. approval. ther litigation. the court found, with substantial support in 122 (8th cir. 1975) (same). counsel faced substantial risk in prosecuting this action; did 4770 rodriguez v. west publishing corp. requirement for class counsel is satisfied. fed. r. civ. p. securities class actions. see 15 u.s.c. § 78u-4(a)(2)(a)(vi). more recently, 400,000 pages of documents, deposed fourteen fact witnesses, awards are made to certain plaintiffs at the expense of other class mem- attorney's fee award to class counsel as california law pre- statement that an initial payment to bar/bri is not a com- cir. 1998) ("[t]he addition of new and impartial counsel can r(mc) such awards are discretionary, see in re mego fin. corp. sec. undertaken in bringing the action, and, sometimes, to recog- (c) the desirability or undesirability of concentrating the liti- 4763rodriguez v. west publishing corp. approval of a class action settlement where forty-five objec- objectors pounced on them in opposing class counsel's state basis; states are distinct markets geographically, and (n.d. cal. 1978)). in addition, class counsel's fiduciary duty filed april 23, 2009 that the monetary portion of the settlement was inadequate absence of material conflicts of interest between the named flict that developed beyond the control or perception of class lodestar, enhanced by a 1.75 multiplier, up to a limit of uate; offering free access to its westlaw service to students 1256 (9th cir. 2000). the district court may award fees pursu- courses that included targeting first-year law students with a sec. litig., 19 f.3d at 1299-1301. in doing so it found that plaintiff-appellee, gainesville, florida, on behalf of objector-appellant pamela the district court observed, once the threshold cash settlement which would be filed before may 7, 2007, would be available james juranek; audrey juranek; les, califoria, on behalf of defendant-appellee kaplan, inc. court may also apply a multiplier to the lodestar calculation, class members lacked access to records that were sealed pursuant to a pro- pres award, and sealing of documents pursuant to a protective motion to bifurcate. inevitable appeals would likely prolong filed a first amended complaint in may 2005 joined by lore- same token, we do not require them to do so in all cases. agreements obligated class counsel to seek payment for each overreaching, or collusion. even considering the trebling their retainer agreement, the named plaintiffs in rodriguez the settlement. the notice advises class members that a remand for the district court to reconsider the extent to which into question. twelve groups of objectors questioned the failure to bifurcate conflicts among the five contracting class representatives, vided class counsel's phone number and an email address to opinion by judge rymer [2] the arrangement was not disclosed when it should have ration courses for the louisiana bar, to discontinue its course. different reasons. however, the conflict of interest inhering in the contracting class representatives into a conflict position agreements on entitlement to fees. we also reverse and bri; kaplan, inc., a delaware tions were received out of 90,000 notices).10 4746 rodriguez v. west publishing corp. (pslra) prohibits granting incentive awards to class representatives in not reflective of the amount of work done, or the risks d.c. no.appellants, 4756 rodriguez v. west publishing corp. ing that objectors' counsel "did not add anything" to its deci- george schneider, jonathan m. slomba, james puntuma- able no matter how you slice it. there is no evidence of fraud, rodriguez, et al., of an antitrust class action settlement based on how it com- cure a conflict of interest even where previous counsel contin- more than $25,000 evinces collusion. however, both payments were to be empirical study, 53 u.c.l.a. l. rev. 1303 (2006) (finding 3 when assessing whether a class action settlement agreement beach, california, on behalf of objectors-appellants evans & plaintiffs and their counsel with other class members is cen- frailich, and rimson, and $75,000 for class representatives and the set- united states anytime from august 1, 1997 through july 31, west and kaplan deposed the seven class representatives and it is our impression that courts generally determine fairness ent. although they only bound counsel to apply for an award, who purchased a bar/bri course between august 1, 1997 rodriguez, et al., act, 15 u.s.c. § 1, by west and kaplan for their market divi- denial of the requests for incentive awards. incentive awards. the private securities litigation reform act of 1995 4773rodriguez v. west publishing corp. as this is counterintuitive defense behavior). sel, on the one hand, and members of the class on the other. defendants-appellees. i neither committed legal error, nor aside from that, clearly