Case 2:11-md TON Document 128 Filed 04/29/14 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

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1 Case 2:11-md TON Document 128 Filed 04/29/14 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN RE: CertainTeed Fiber Cement Siding Litigation MDL NO This Document Relates to: All Actions PLAINTIFFS MOTION TO REQUIRE AN APPEAL BOND Pursuant to Rule 7 of the Federal Rules of Appellate Procedure and the Court s inherent authority, Plaintiffs and the Settlement Class respectfully move the Court to require appellantobjectors Amirali Jabrani, Janet Jabrani and Real Homes, Inc., jointly and severally, to post an appeal bond. In support of their motion, Plaintiffs rely on the accompanying memorandum of law and Declaration of Michael McShane. Respectfully submitted, Date: April 29, 2014 /s/ Michael McShane Michael McShane (SB ) mmcshane@audetlaw.com AUDET & PARTNERS, LLP 221 Main Street, Suite 1460 San Francisco, CA Telephone: (415) Facsimile: (415) H. Laddie Montague, Jr. Shanon J. Carson BERGER & MONTAGUE, P.C Locust Street Philadelphia, PA (215) Telephone (215) Facsimile Co-Lead Class Counsel

2 Case 2:11-md TON Document Filed 04/29/14 Page 1 of 18 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN RE: CertainTeed Fiber Cement Siding Litigation MDL NO This Document Relates to: All Actions I. INTRODUCTION MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION TO REQUIRE AN APPEAL BOND To the extreme detriment of over one thousand Settlement Class Members who have already filed claims (and potentially thousands more who will file claims during the Claims Period) and who stand to benefit under this class action settlement, three unsuccessful objectors filed an appeal challenging this Court s March 20, 2014 order granting final approval and March 19, 2014 order denying their motion to file supplemental objections. The attorney behind this frivolous appeal, Christopher Bandas of Corpus Christi, Texas, has been repeatedly criticized by courts around the country for his behavior with respect to his pattern of objections and appeals to class action settlements. 1 Class Counsel has already briefed the Court on Mr. Bandas prior conduct in class action settlements around the country and incorporates by reference the report filed on February 13, 2014, and Plaintiffs Opposition to Attorneys Fees and Incentive Payments. (See, Docket Nos. 103 and 126.) 1 Mr. Bandas failed to make an appearance before this Court as part of the objection process and instead chose to hide himself behind a parade of local counsel despite no court order requiring local counsel participation. (See Objections by Amirali Jabrani, Janet Jabrani, and Real Homes, Inc., Docket No. 50, signed by Christopher Arfaa; Notice of Withdrawal of Appearance by Christopher Arfaa, Docket No. 77; Notice of Appearance by Glenn Manochi, Docket No. 90.) It was not until Mr. Bandas wanted an award of attorneys fees and costs that he formally subjected himself to this Court s jurisdiction by filing a declaration in support of his recently filed request for fees. (Docket No. 120.) 1

3 Case 2:11-md TON Document Filed 04/29/14 Page 2 of 18 Plaintiffs and the Settlement Class request that the objectors and their attorneys who have appealed the final approval of the class action settlement, while simultaneously requesting fees from the settlement fund if their appeal is rejected, be required to post an appeal bond. See, e.g., In re Currency Conversion Fee Antitrust Litig., 2010 U.S. Dist. LEXIS (S.D.N.Y. March 5, 2010); see also Class Action Professional Objectors: What To Do About Them, John E. Lopatka and D. Brooks Smith, 9 Fla. St. U. L. Rev. 865 (2012) (in which Third Circuit Judge Smith discusses that the imposition of an appeal bond is an appropriate remedy to deter professional objectors to class action settlements) (See Docket No. 103, Declaration of Michael McShane, Ex. P.) 2 Indeed, the objectors and their attorney are expecting to pay a bond given Mr. Bandas conduct and history of frivolous objections and being required to post a bond by other federal courts in similar circumstances. See, e.g., In re Wal-Mart Wage & Hour Empl. Prac. Litig., 2010 U.S. Dist. LEXIS 21466, at *18-*19 (D. Nev. March 8, 2010) (requiring Mr. Bandas and his objector client to post an appeal bond of $500,000 following an appeal of an overruled objection to class action settlement); In re Gen. Elec. Co. Sec. Litig., 2014 U.S. Dist. LEXIS (S.D.N.Y. Feb. 11, 2014); Dennings v. Clearwire Corp., 2013 U.S. Dist. LEXIS (W.D. Wash. July 26, 2013) (issuing sanctions against Mr. Bandas for failing to timely post appeal bond pursuant to court order); see also Docket No. 103, pp This appeal, much like the objections on which it is based, is without merit. The Court s approval orders are highly likely to be affirmed based upon the excellent result achieved for the 2 The attorneys actually filing the Notice of Appeal are Gary P. Lightman and Glenn A. Manochi. Although neither has Mr. Bandas track record of frivolous appeals, both are aware of Mr. Bandas history of objections, and his conduct in this case. As noted in Plaintiffs Report on Objections, attorneys who have assisted Mr. Bandas in the past, even when they did not actually know of his history, were nonetheless sanctioned by their State Bar Disciplinary Board because they should have known. (See Docket No. 103.) In this case Lightman and Manochi are being funded by Mr. Bandas and know full well that Mr. Bandas is only objecting to and appealing this settlement in order to extort money from the class. Under the circumstances they too, just like Mr. Bandas, cannot argue that a bond is not expected or appropriate. 2

4 Case 2:11-md TON Document Filed 04/29/14 Page 3 of 18 class, the extensive and comprehensive notice, the streamlined claims procedure, this Court's detailed findings and the applicable abuse-of-discretion review standard on appeal. Appeals from Amirali Jabrani, Janet Jabrani and Real Homes, Inc. (collectively the Jabrani Objectors ) now challenge this Court s approval of the class action settlement. 3 The appellants underlying objections to the Settlement are baseless and driven by Mr. Bandas. The objections themselves displayed a fundamental lack of understanding of the settlement and its benefits, and were filed with the sole intent of blackmailing class counsel for unearned fees. Thus, the appeal exhibits bad faith and vexatious purpose. Indeed, the only thing that the frivolous appeal will accomplish is injury to the Class. The appeal will delay by a year or more the otherwise immediate distribution of millions of dollars to hundreds of Settlement Class Members. Therefore, pursuant to both Rule 7 of the Federal Rules of Appellate Procedure and the Court's inherent authority to protect the interests of the Class members, Plaintiffs respectfully request that this Court direct appellants, and their attorneys, to post jointly and severally a bond in the amount deemed appropriate by the Court to ensure partial reimbursement of the costs being forced upon the Class members as a result of the Jabrani Objectors meritless appeal. II. ARGUMENT A. Appellants must secure by bond the costs that will be incurred by the Settlement Class due to Appellants frivolous appeal. Rule 7 of the Federal Rules of Appellate Procedure authorizes this Court to require an appellant to post a bond to ensure payment of costs on appeal: 3 The objectors Amirali Jabrani and Janet Jabrani are husband and wife, and Real Homes, Inc. is a corporation over which they have exclusive control. 3

5 Case 2:11-md TON Document Filed 04/29/14 Page 4 of 18 Rule 7. Bond for Costs on Appeal in a Civil Case In a civil case, the district court may require an appellant to file a bond or provide other security in any form and amount necessary to ensure payment of costs on appeal. The purpose of Rule 7 as expressed by the Court of Appeal is the protection of an appellee against the risk of nonpayment by an unsuccessful appellant. Hirschensohn v. Lawyers Title Ins. Corp., 1997 U.S. App. LEXIS 13793, at *3-*4 (3d Cir. June 10, 1997); see also In re AOL Time Warner, Inc., MDL No. 1500, 2007 U.S. Dist. LEXIS 69510, at *4-*5 (S.D.N.Y. Sept. 20, 2007) (citing Adsani v. Miller, 139 F.3d 67, 70 (2d Cir. 1998), cert. denied, 525 U.S. 875 (1998)). [A] district court, familiar with the contours of the case appealed, has the discretion to impose a bond which reflects its determination of the likely outcome of the appeal. Star Pac. Corp. v. Star Atl. Corp., 2013 U.S. Dist. LEXIS 22644, at *3-*4 (D.N.J. Feb. 20, 2013) (quoting Adsani, 139 F. 3d at 79). In many cases, an appeal bond is 'necessary to provide some level of security to Lead Plaintiffs who have no assurances that Appellants have the ability to pay the costs and fees associated with opposing their appeals.'" In re Nutella Mktg. & Sales Practices, 2012 U.S. Dist. LEXIS , at *3 (D.N.J. Nov. 20, 2012) (quoting In re Ins. Brokerage Antitrust Litig., 2007 U.S. Dist. LEXIS (D.N.J. July 2, 2007)). Accordingly, the decision to impose a bond under Rule 7 is within the discretion of the district court. In re Nutella Mktg. & Sales Practices, 2012 U.S. Dist. LEXIS , at *3 (citing Pedraza v. United Guar. Corp., 313 F.3d 1323, 1328 (11th Cir. 2002)). When deciding whether to require an appellant to post an appeal bond, district courts consider several factors, including (1) the appellant s financial ability to post a bond, (2) the risk that the appellant would not pay appellee s costs if appellee prevailed, (3) the merits of the appeal, and (4) whether the appellant has shown any bad faith or vexatious conduct. AOL Time 4

6 Case 2:11-md TON Document Filed 04/29/14 Page 5 of 18 Warner, 2007 U.S. Dist. LEXIS 69510, at *5; see also Harris v. Members of the Bd. of Governors of Wayne State Univ., 2011 U.S. Dist. LEXIS , at *4-*5 (E.D. Mich. Baker v. Urban Outfitters, Inc., No. 01 CV 5440 (LAP), 2006 U.S. Dist. LEXIS 90120, at *2-*4 (S.D.N.Y. Dec. 12, 2006) (citing cases). Further [t]his court has the power to hold the Objectors' attorneys liable for unreasonably and vexatiously multiplying proceedings under its inherent equitable powers and 28 U.S.C In re Diet Drugs Prods. Liab. Litig., 2000 U.S. Dist. LEXIS 16085, at *18 n.10 (E.D. Pa. Nov. 6, 2000) (citing Hall v. Cole, 412 U.S. 1, 4-5, 36 L. Ed. 2d 702, 93 S. Ct. 1943; Williams v. Giant Eagle Mkts., Inc., 883 F.2d 1184, 1191 (3d Cir. 1989)). The costs that will be incurred by the Settlement Class include taxable costs specified by rule, the costs associated with the disruption of the settlement administration process, the delay in payment to the class, and attorneys fees (as provided by the underlying statute). Under these circumstances, this Court should exercise its considerable discretion to require appellants to post a bond to secure payment of appeal costs. It is fairly common for District Courts to require objector appellants or their counsel to post bond in large class action settlements. For example, in In re Compact Disc Minimum Advertised Price Antitrust Litig., No. MDL 1361, 2003 U.S. Dist. LEXIS 25788, *6 (D. Me. Oct. 7, 2003), the district court required an objector to post a bond because that appeal might be frivolous, and because imposition of sanctions on appeal pursuant to Rule 38, was a real probability. The court specifically concluded that a bond for damages resulting from delay or disruption of settlement administration caused by a frivolous appeal may be included in a Rule 7 bond. Id., *5. B. Appellants Undeveloped Objections Will Not Withstand Review By the Third Circuit. 5

7 Case 2:11-md TON Document Filed 04/29/14 Page 6 of 18 Appellants have three arguments on appeal. While they purport to appeal all objections asserted by anyone in the final approval process in the form of their last minute motion to adopt those objections, there is not any legal basis to conclude that an objector can belatedly adopt wholesale every other objection submitted to this Court. In addition, arguments made in passing and not supported by citations to the record or to case authority are generally deemed waived. Conroy v. Leone, 316 Fed. Appx. 140, 144 n.5 (3d Cir. 2009) (citing Bagot v. Ashcroft, 398 F.3d 252, 256 (3d Cir. 2005)); see also Western Radio Servs. Co. v. Qwest Corp., 678 F.3d 970, 979 (9th Cir. 2012) ( We will not do an appellant s work for it, either by manufacturing its legal arguments, or by combing the record on its behalf for factual support. ); United States v. Graf, 610 F.3d 1148, 1166 (9th Cir. 2010) ( Arguments made in passing and not supported by citations to the record or to case authority are generally deemed waived. ); Terry v. Reno, 101 F.3d 1412, 1415 (D.C. Cir. 1996) ( Simply listing the issues on review without briefing them does not preserve them. ) As discussed below, Mr. Bandas has proffered boilerplate objections for the sole purpose of delaying the process; thereby allowing him to use the economic pressure which the delay places on class members and their counsel to extract for himself some money from the settlement fund. This Court s Order overruling these objections was not an abuse of discretion, and the Third Circuit is highly likely to uphold the Court s rulings. C. The factors to be considered by the Court in determining whether to require a bond support Plaintiffs request. 1. Appellants have not demonstrated financial inability to post a bond. The first factor courts consider in determining whether to require a bond is the financial ability of the appellant to post a bond. Where an appellant fails to submit information demonstrating financial inability to post a bond, this factor weighs in favor of requiring of a 6

8 Case 2:11-md TON Document Filed 04/29/14 Page 7 of 18 bond. See Urban Outfitters, 2006 U.S. Dist. LEXIS 90120, at *2 ( [Plaintiff] has submitted no financial information, and thus I conclude that he is not arguing that he does not have the financial ability to post a bond ); see also Chiaverini, Inc. v. Frenchie s Fine Jewelry, Coins & Stamps, Inc., No. 04-CV DT, 2008 U.S. Dist. LEXIS 45726, at *7 (E.D. Mich. June 12, 2008) ( There is no indication that plaintiff is financially unable to post bond, and thus this factor weighs in favor of a bond. ); Fleury v. Richemont North America, Inc., No. C EMC, 2008 U.S. Dist. LEXIS 88166, at *21-*22 (N.D. Cal. Oct. 21, 2008) (finding financial ability factor weighs in favor of a bond where objector did not submit financial information to indicate that she was financially unable to post a bond). In this case, Mr. Bandas is an attorney who specializes in objecting to class actions. Several publicly available opinions specific to objections made by Mr. Bandas have required him to post an appeal bond. As a result, Mr. Bandas, Lightman and Manochi cannot claim surprise that intentionally delaying the distribution of a $103.9 million fund will result in the necessity of a bond posting. Specific to financial means, in each of the fee agreements produced during discovery regarding these objections, Mr. Bandas himself guaranteed payment of the local counsel attorneys fees incurred by his clients, the Jabranis. Accordingly, as Mr. Bandas apparently has the means to fund a team of lawyers when it comes to trying to undo this settlement, there is no reason for this Court to assume that Mr. Bandas does not have the means to post a bond. (See Docket No. 103, Declaration of Michael McShane in Support of Class Counsel s Status Report Regarding Objectors Exs. D, E, and F.) 2. The risk of nonpayment is great. Absent a bond, Settlement Class members face a substantial risk that they will not be reimbursed for the economic injury imposed by this appeal. Collecting payment from the 7

9 Case 2:11-md TON Document Filed 04/29/14 Page 8 of 18 appellants would likely be an arduous task, especially given that all objectors and Mr. Bandas reside out of state and outside of the Third Circuit, making collection of appellate costs even more difficult. See Fleury, 2008 U.S. Dist. LEXIS 88166, at *22 (acknowledging that objector s residence in a state outside the governing circuit would make it more difficult for the Settling Parties to collect their costs... and weighs in favor of a bond ); see also Urban Outfitters, Inc., 2006 U.S. Dist. LEXIS 90120, at *3 (noting that because plaintiff is not a resident of the country and does not have assets in the U.S., recovery of appeal costs through the judicial process seems unlikely. ). In addition, as the Court is aware, Mr. Bandas record of not entering an appearance even though he is orchestrating the objection process, underscore the likelihood that he would be harder to find should the class exercise its right to seek redress for appellate costs and expenses against him. This factor weighs in support of requiring appellants to post bonds. 3. The appeal lacks merit and was filed for inappropriate reasons. The lack of merit in the Jabrani Objectors appeal further dictates that the Court should require an appeal bond. Where the appellee is likely to prevail, and the appeal is without merit, courts have required the appellant to post a bond. See Urban Outfitters, Inc., 2006 U.S. Dist. LEXIS 90120, at *3 (requiring appeal bond where the determination of the likely outcome of the appeal was that appellees would prevail easily, and the appeal was without merit) (quoting Adsani v. Miller, 139 F. 3d at 79)); see also Fleury, 2008 U.S. Dist. LEXIS 88166, at *22 (in finding that the third factor weighs in favor of a bond, the court stated that it has considered each of [objector s] objections and finds them meritless. The Court finds [objector] is not likely to succeed on the merits of her appeal. ). In addition, the Third Circuit will review this Court s approval for an abuse of discretion, a high standard that Mr. Bandas will be unable to meet given the nature of his 8

10 Case 2:11-md TON Document Filed 04/29/14 Page 9 of 18 objections. See In re Cendant Corp. Litig., 264 F.3d 201, 231 (3d Cir. 2001) (citing In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liability Litig., 55 F.3d 768, 782 (3d Cir. 1995)). The Jabrani objectors make the following objections: (1) The settlement lacked a provision for the distribution of residual funds. This is not true. The Settlement expressly provides that residual funds are paid to prior claimants at the end of the claims process on a pro-rated basis. (See Docket No. 25, Declaration of Michael McShane in Support of Motion for Preliminary Approval, Exhibit A, Settlement Agreement 7.5.) In addition, the basis of the attorneys fees motion Mr. Bandas recently filed with this Court is essentially that he deserves attorneys fees because this supposed flaw in the settlement was fixed by his efforts. (See Docket No. 120.) In short, at the very least Mr. Bandas admits that this objection to the Settlement is no longer valid. Nonetheless, even after filing the fee motion with this Court, Mr. Bandas filed an appeal which fails to advise the Court that this particular Objection has been effectively withdrawn. (2) The settlement requires class members to engage in a second adversarial process. This is not true and mischaracterizes the claims process which is typical of this type of settlement and only requires the claimant to fill out a claim form (either in hard copy or on-line). There has to be some method to distribute the money to a claimant and filling out the necessary paperwork is hardly adversarial. In addition, Class Counsel are overseeing the claims process and if claimants disagree with the handling of their claim they can appeal that process, by themselves, with the aid of Class Counsel without cost, or by retaining their own attorney. (See Docket No. 25, Settlement Agreement 6.) The fact that 1,446 class members have already successfully completed a claim even though the Settlement is not yet final underscores the 9

11 Case 2:11-md TON Document Filed 04/29/14 Page 10 of 18 relative ease with which a claim can be submitted and approved. (See Declaration of Richard Simmons Concerning Report of Claims Received to Date; Docket No. 126.) (3) The value of the settlement should only be the incremental value over what CertainTeed would have paid under the warranty. This issue was previously addressed by Class Counsel to the Court. The value of the materials only warranty is de minimus ($3.8 million, at most), meaning that the $103.9 million settlement fund is still substantial and does not and will not affect the determination that the settlement is fair, adequate and reasonable. (See Docket No. 87, Declaration of Michael McShane In Support of Motion for Final Approval of Class Action Settlement, 10.) Moreover, the Jabrani Objectors ignore that the settlement now provides that a person with 5% or more damage to a building side can get the whole side replaced, not just the boards that are impacted. (4) Class members have to wait six year to receive money. This is not true. Claims will begin to be paid immediately and class members will receive a second prorated distribution in six years based upon the number and size of claims received. (Docket No. 25 Settlement Agreement 7.3) This concern for delayed payments is belied by Mr. Bandas actions. The only thing that can be said with certainty is that for the over 1,400 class members who have already filed a claim, they will have to wait twelve to eighteen additional months to receive their first payments solely on account of Mr. Bandas filing this appeal. The Court rightly found each of these objections to be without merit. (See Docket No. 120.) Appellate Courts have found that an objection, such as here, which consists solely of a summary unsubstantiated statement, is not sufficiently developed to justify or sustain an appeal.) Conroy v. Leone, 316 Fed. Appx. 140, 144 n.5 (3d Cir. 2009) (citing Bagot v. Ashcroft, 398 F.3d 10

12 Case 2:11-md TON Document Filed 04/29/14 Page 11 of , 256 (3d Cir. 2005)), making it unlikely that the Court of Appeal in this case will conclude that this Court abused its discretion in overturning these objections. (5) Jabranis belated me too objections. The Jabranis attempt to adopt objections submitted by the other class members by filing a motion for that purpose two days before the February 19, 2014, final approval hearing before this Court will fail. See Docket No The motion was filed even though the objection deadline was December 31, 2013 and, notably, after those underlying objections had been withdrawn. (See Docket Nos. 76, 97, 104.) As noted above, issues which are not fully raised by a party at the trial court level are deemed waived on appeal. The Jabrani Objectors cannot simply say me too to objections submitted and withdrawn in the hopes of creating further appellate delays. More importantly, there is little doubt the Court of Appeal will not allow Mr. Bandas and his colleagues to pursue these objections. Finally, the fact that Mr. Bandas and his colleagues are willing to first file such a motion, and then use this Court s denial of the motion as the basis to further delay the implementation of this settlement, further underscores their cavalier attitude toward this Court, the Class and the appeal process. 4. Appellants are acting in bad faith and are vexatious litigants. Finally, courts may impose bond requirements where objectors appeals are frivolous, brought in bad faith, or involve vexatious conduct. This factor particularly supports a bond requirement where, as here, the appeal is driven by an attorney whose legal practice appears to consist entirely of objecting to class settlements to extort unearned fees. Plaintiffs counsel have briefed the Court extensively on Mr. Bandas and his welldocumented history of filing frivolous objections and appeals in order to delay class action 11

13 Case 2:11-md TON Document Filed 04/29/14 Page 12 of 18 settlements and extract unearned fees. Accordingly, Mr. Bandas history may be considered by the Court in determining the amount of the appeal bond. (See Docket No. 103.) Since the filing set forth at Docket No. 103, another Court found that Mr. Bandas mere presence in the objection process is enough to justify the issuance of a bond. The Hon. Denise Cote of the Southern District of New York, recognizing Mr. Bandas role as a professional objector who routinely represents objectors purporting to challenge class settlements, and does not do so to effectuate changes to settlements, but does so for his own financial gain, held that an appellant s relationship with Mr. Bandas further supports a finding that [the appellant] brings this appeal in bad faith. In re Gen. Elec. Co. Sec. Litig., 2014 U.S. Dist. LEXIS 17213, at *27- *28 (Feb. 11, 2014 S.D.N.Y.) (citing In re Cathode Ray Tube (CRT) Antitrust Litig., 281 F.R.D. 531, 533 (N.D. Cal. 2012)). In another recent case in the Southern District of California, Mr. Bandas objections were struck from the record after the court found credible testimony that Mr. Bandas said that he didn't care about changing one word of the settlement and that he filed the objections because it was a large settlement and Plaintiff's counsel stood to make millions of dollars. Mr. Bandas said that he was willing to wager that Mr. Reid's client would gladly pay him somewhere in the neighborhood of $400,000 to make his objection go away-otherwise, he could hold the settlement process up for two to three years through the appeal process. In re Hydroxycut Marketing and Sales Practices Litigation, 2013 WL , at *5 (S.D. Cal. Sept. 17, 2013). In sum, whatever may be the threshold that an attorney has to cross to be considered a vexatious litigant, Mr. Bandas crossed it long ago and this Court can be assured that treating him and his colleagues as such in this case is consistent with the conclusion reached by numerous federal courts throughout the United States. 12

14 Case 2:11-md TON Document Filed 04/29/14 Page 13 of 18 D. The Court has the inherent power to protect the settlement class s interests. This Court also may order the objector-appellants to post bonds pursuant to the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases. Chambers v. NASCO, 501 U.S. 32, 49 (1991); see also In re Mroz, 65 F.3d 1567, 1575 (11th Cir. 1995). This includes the power to require security for costs. Ehm v. Amtrak Bd. of Directors, 780 F.2d 516, 517 (5th Cir. 1986) (district court has inherent power to require security for costs when warranted by the circumstances of the case); Zebrowski v. Hanna, 973 F.2d 1001 (1st Cir. 1992) (district court has inherent power to regulate litigation before it, upholding requirement for posting security). Moreover, the Court has authority to order a bond under Rule 23(d)(1) of the Federal Rules of Civil Procedure, which provides that a court may issue orders that... (D) deal with similar procedural matters. A requirement to post security has been held to be a procedural matter. Aggarwal v. Ponce Sch. of Med., 745 F.2d 723, 726 (1st Cir. 1984) (question of security for costs is procedural in nature and trial court has discretion in administrating procedural matters). Finally, as noted above the potential prejudice to the thousands of Settlement Class Members as a result of this appeal is substantial. Courts have held that the actions of appellants in jeopardizing a settlement agreement causes prejudice to the existing parties to a lawsuit. In re NASDAQ Market-Makers Antitrust Litigation, 184 F.R.D. 506, 514 (S.D.N.Y. 1999) (citation omitted). Notice has been delivered to class members who are making claims that must now wait to be paid until this frivolous appeal is resolved. Accordingly, irrespective of Rule 7, this Court has and should exercise its power to require the objectors to post a bond. 13

15 Case 2:11-md TON Document Filed 04/29/14 Page 14 of 18 E. Amount to be included in the bond. 1. Attorneys Fees The Second, Sixth, Eleventh, and Ninth Circuits all hold that it is within a district court's discretion to include projected attorneys' fees in an appeal bond made pursuant to Rule 7. There is a single unreported Third Circuit decision that concluded that Rule 7 did not allow attorney fees in that particular case. See Rossi v. P&G, 2014 U.S. Dist. LEXIS 34180, at *4 (D.N.J. March 17, 2014) (citing Azizian v. Federated Dep't Stores, Inc., 499 F.3d 950, 955 (9th Cir. 2007); Hirschensohn, 1997 U.S. App. LEXIS 13793). However, because the only Third Circuit case to address the question of whether attorneys fees may be included is both unreported and predates many of the other Circuit Court decisions on the issue, courts in this district have allowed for at least the possibility of attorneys fees being included as part of a bond. See Star Pac. Corp. v. Star Atl. Corp., 2013 U.S. Dist. LEXIS 22644, at *5-7 n.3 (D.N.J. Feb. 20, 2013) (collecting cases); In re Am. Investors Life Ins. Co. Annuity Marketing and Sales Prac. Litig., 695 F. Supp. 2d 157, (E.D. Pa. 2010). In this case, Plaintiffs believe that given Mr. Bandas abusive and vexatious track record, that a bond including attorneys fees is appropriate. Class Counsel estimates that they will incur an estimated $175,000 in attorneys fees and $5,000 in costs related to the appeal. (See Declaration of Michael McShane in Support of Plaintiffs Motion to Require an Appeal Bond), 2. Cost of Administration The cost of continued administration of the settlement fund is properly included. In re Nutella Mktg. & Sales Practices, 2012 U.S. Dist. LEXIS , at *6 (D.N.J. Nov. 20, 2012) (citing In re Cardizem CD Antitrust Litigation, 391 F.3d 812, 818 (6th Cir. 2004)). As set forth in the Simmons Declaration, the cost to maintain the settlement administration process during the 14

16 Case 2:11-md TON Document Filed 04/29/14 Page 15 of 18 appeal is between $2,000 and $2,500 per month, or between $20,000 and $25,000, during the estimated 10 month appeal process, assuming this appeal is resolved in the current median time for appeals in the Third Circuit. (See Declaration of Richard Simmons; filed concurrently herewith.) 3. Damage to class members Finally, as described in detail below, the class members are being deprived of over $8 million in payments that could be made immediately in compensation for actual pending claims but for the appeal of the Jabranis and their counsel. As noted in the Declaration of Richard W. Simmons, Class members have already filed 1,446 claims. The total estimated value by the Claims Administrator of the claims received to date is approximately $21,660, and the first distribution to the class would be for approximately $8,664, but for the Jabranis appeal delaying the process. Based on this claims data, the average value of each claim is $14,979.74, and the average first payment will be $5, As the Court is aware, this case and these claims relate to a product (e.g., siding on a house) the proper functioning of which is necessary to protect the Claimants homes from damage. By interfering with the distribution of funds to the Claimants, the Objectors are potentially interfering with the homeowners ability to protect what is likely their most valuable asset. Given that the average appeal in this Circuit is 10 months, each claimant s home will be subjected to another rainy season and winter before repair is an option for many claimants. See U.S. COURT OF APPEALS FOR THE THIRD CIRCUIT PRACTICE GUIDE, THE BAR ASSOCIATION FOR THE THIRD CIRCUIT (2012) (available at 15

17 Case 2:11-md TON Document Filed 04/29/14 Page 16 of 18 Pursuant to the applicable statute the post-judgment interest rate is.012 per annum. 4 Even if the Court is not inclined to order a bond which covers the full amount of the payments which are presently due Claimants, applying the post judgment rate to the $8,664,281 value of the first payments which will be delayed by the appeal is appropriate. The interest accrued over 10 months on the $8.6 million is $86, This sum represents the value of the money lost, and permanently unrecoverable by class members, and is reasonably included in the bond amount given the circumstances. Finally, the appeal delays the obligation of CertainTeed to release the $103.9 million to Plaintiffs. (See Simmons Decl.; Settlement Agreement 6.) The money in the fund not paid out immediately to the existing claimants will also earn interest for the benefit of the class. The lost interest earned will not be recoverable even after Mr. Bandas appeal is denied, and it is fair and reasonable given the circumstances to require a bond for this amount too. The post-judgment interest earned for 10 months in the Settlement Fund at the applicable rate will total $1,019,000, and Plaintiffs respectfully request that this Court consider this sum in determining the bond amount. III. CONCLUSION Based upon the reasons set forth above, Plaintiffs respectfully request that the Court order an appeal bond to be paid jointly and severally by the Jabrani Objectors, and their counsel Messrs. Mr. Bandas, Manochi and Lightman in the sum which includes all or some of the categories set forth below, at the Court s discretion: (1) Attorneys Fees and Costs - $180,000 (2) Costs of Administration - $22,500 (the estimated mid-point) 4 The post-entry interest rate is the weekly average one year constant maturity Treasury yield for the calendar week preceding the date of the entry of judgment. 28 U.S.C

18 Case 2:11-md TON Document Filed 04/29/14 Page 17 of 18 (3) Post-Judgment Cost to Class Members a. Post-Judgment Interest on payments due to claimants- $86, b. Post-Judgment Interest on $103.9 million fund - $1,019,000 Respectfully submitted, Date: April 29, 2014 /s/ Michael McShane Michael McShane (admitted pro hac vice) mmcshane@audetlaw.com AUDET & PARTNERS, LLP 221 Main Street, Suite 1460 San Francisco, CA Telephone: (415) Facsimile: (415) H. Laddie Montague, Jr. Lawrence Deutsch Shanon J. Carson BERGER & MONTAGUE, P.C Locust Street Philadelphia, PA (215) Telephone (215) Facsimile Co-Lead Class Counsel Arnold Levin Charles E. Schaffer LEVIN, FISHBEIN, SEDRAN & BERMAN 510 Walnut Street, Suite 500 Philadelphia, PA (215) Telephone (215) Facsimile Ellen Meriwether CAFFERTY FAUCHER LLP 1717 Arch Street, Suite 3610 Philadelphia, PA (215) Telephone (215) Facsimile 17

19 Case 2:11-md TON Document Filed 04/29/14 Page 18 of 18 Jennifer W. Sprengel Christopher B. Sanchez CAFFERTY FAUCHER LLP 30 North LaSalle Street, Suite 3200 Chicago, IL (312) Telephone (312) Facsimile Charles J. LaDuca Brendan S. Thompson CUNEO, GILBERT & LADUCA, LLP 507 C Street, NE Washington, DC (202) Telephone (202) Facsimile Counsel for Plaintiffs 18

20 Case 2:11-md TON Document Filed 04/29/14 Page 1 of 21 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN RE: CertainTeed Fiber Cement Siding Litigation MDL NO This Document Relates to: All Actions DECLARATION OF MICHAEL McSHANE IN SUPPORT OF PLAINTIFFS MOTION TO REQUIRE AN APPEAL BOND I, Michael McShane, hereby declare under penalty of perjury pursuant to 28 U.S.C that the following is true and correct: 1. I am a partner with Audet & Partners, LLP ( Audet & Partners ) and a member in good standing of the Bar of the State of California. I respectfully submit this Declaration in support of Plaintiffs Motion to Require an Appeal Bond. Except as otherwise noted, I have personal knowledge of the facts set forth in this Declaration, and could testify competently to them if called upon to do so. 2. I am the lead attorney from Audet & Partners, and have been appointed as Co- Lead Counsel in this litigation. 3. Attached hereto as Exhibit A is a true and correct copy of a motion for an appeal bond filed against Christopher Bandas and his clients in the United States District Court for the District of Nevada in In re Wal-Mart Wage and Hour Employment Practices Litigation, No. 2:06-cv PMP-PAL (D. Nev.). 4. I have been licensed to practice law since 1987 and since 1988 have practiced exclusively in the field of complex class actions.

21 Case 2:11-md TON Document Filed 04/29/14 Page 2 of Based on my experience, I estimate that Class Counsel will spend approximately $175,000 worth of attorney time and $5,000 in costs in order to oppose the appeal filed by Amirali Jabrani, Janet Jabrani and Real Homes, Inc. Dated: April 29, 2014 /s/ Michael McShane Michael McShane

22 Case 2:11-md TON Document Filed 04/29/14 Page 3 of 21 EXHIBIT A

23 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 41 of of UNITED STATES DISTRICT COURT DISTRICT OF NEVADA IN RE: WAL-MART WAGE AND HOUR EMPLOYMENT PRACTICES LITIGATION THIS DOCUMENT RELATES TO ALL CASES EXCEPT KING v. WAL-MART STORES, INC., CASE NO WY MDL 1735 Docket No. 2:06-CV PMP-PAL (BASE FILE) PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS GAONA, SWIFT, ANDREWS AND MADDOX AND THEIR ATTORNEYS TO POST APPEAL BONDS, AND SEEKING ANY OTHER APPROPRIATE RELIEF TO PROTECT THE CLASS PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

24 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 52 of of I. INTRODUCTION On November 2, 2009, the Court granted final approval of a settlement that provides substantial monetary and injunctive relief to a Class comprising nearly 3,200,000 employees, expressly finding that the settlement was a remarkable result in this case. This settlement is now under attack by a pack of professional objectors who filed notices of appeal for the sole purpose of extorting money from the settlement fund in exchange for dropping frivolous appeals. The objectors motivation is not theoretical. Professional objectors Bandas, Pentz, Cochran and Siegel are well known to the courts, and have been repeatedly chastised and sanctioned for misusing the judicial process for personal gain. Indeed, Bandas and Pentz have preyed on most of the Wal-Mart wage and hour class settlements this year, objecting to at least six other settlements. The courts in each of those cases have rejected the objections as baseless, and have further recognized the objectors for what they are, extortionists. Declaration of Carolyn Beasley Burton ( Burton Decl. ), Exh. 1, paragraph 19-20; see also Dkt No , Bandas filed appeals in at least three of those cases, only to abruptly drop each such appeal shortly thereafter. Burton Decl., Exhs. 1-3, Sarda v. Wal-Mart, Case No. 1D , Florida First District Court of Appeal; Carter v. Wal-Mart, 2006 CP , South Carolina Charleston County Common Pleas Court; and Hale v. Wal-Mart Stores, Inc., Case No , Circuit Court of Jackson County. Significantly, Bandas dropped those appeals without any substantive changes being made to the underlying settlements. But that was never the point. The point was to extort money from the class by threatening to tie up those settlements for years on appeal. This is a clear abuse of process. Quite simply, the appellate courts are not vehicles for unethical lawyers to use to extort money from settlement funds that were created to compensate the plaintiffs and the class counsel whose work created the fund PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

25 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 63 of of But Bandas and his ilk are at it again, 1 this time threatening to tie up the settlement in MDL The Court has already found that these objections lack any merit. And, indeed, these same unfounded objections have been recycled and rejected by the courts in each of the other Wal-Mart cases, clearly indicating that Bandas, Pentz and the other professional objectors intentionally filed frivolous objections here. The Court must put an end to this sort of abuse, both through the imposition of an appropriately substantial appeal bond and through any other exercise of the Court s power to prevent such abuse. II. SUMMARY OF PROCEEDINGS The counsel who filed the objections and appeals at issue here are professional objectors. The objections they filed were unsupported by applicable law, conflict with the facts in the record, and were merely recycled from canned objections that were advanced and rejected in the other Wal-Mart class action settlements where these professional objectors likewise tried to harm those classes. Objector Gaona (represented by Bandas and Rasmussen), for example, asserted that the mailed notice program was inadequate, when the evidence instead showed that notice was sent to each of the nearly 3,200,000 Class Members via first class mail, and was extraordinarily thorough, reaching some 98% of Class Members. The notice was also published nationally and on the designated website set up by the claims administrator. Objectors Swift, Andrews and Maddox (represented by Siegel, Sweeney, Pentz and Cochran) also argued, contrary to federal law, that the attorneys fees should not have been based upon the ceiling amount of the Settlement. These objections are contrary to applicable law (see, e.g., Boeing Co. v. Van Gamert, 444 U.S. 472, 478 (1980); Williams v. MGM-Pathe Communications Co., Fellow objectors, Siegel and Pentz, also have a colorful history of filing frivolous objections and appeals in class actions. See In re AT&T Corp., 455 F.3d 160 (3rd Cir. 2006) (unsuccessful objection to attorney fee award); Carlson v. Xerox Corp, 2009 WL (2nd Cir. 2009) (Unsuccessful objection to attorney fee award, cost award and class notice); In re Ins. Brokerage Antitrust Litigation, 579 F.3d 241 (3rd Cir. 2009) (unsuccessful appeal of settlement and attorney fees) and In re Bristol-Myers Squibb Securities Litigation, 2007 WL (3rd Cir. 2007) (unsuccessful appeal of attorney fees); Taubenfeld v. AON Corp., 415 F.3d 597 (7th Cir. 2005) (unsuccessful appeal of attorney fee award); Spark v. MBNA Corp., 48 Fed.Appx. 383 (3rd Cir. 2002) (unsuccessful appeal of settlement). 2 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

26 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 74 of of F.3d 1026, 1027 (9th Cir. 1997)), and thus, evidence bad faith. Objectors Andrews and Maddox also argue that the Court should have awarded a fee of only 10% of the settlement fund, citing only inapposite caselaw pertaining to coupon settlements, unlike the cash settlement provided here, again indicative of bad faith. The Court held a hearing on October 19, 2009, on Plaintiffs motion for final approval of the settlement. None of the Objectors or their counsel appeared at the Final Approval Hearing, despite notice to the Court of their intention to appear, and the Court overruled their objections. In so ruling, the Court observed that the objections were frivolous. After receiving briefing and argument from both Wal-Mart s counsel and Plaintiffs counsel that these same professional objectors made virtually identical objections in several other Wal-Mart cases, ostensibly to demand ransom by hijacking class action settlements, the Court indicated that it would promptly hold a hearing to determine whether to impose a Rule 7 bond or other sanctions if they used similar tactics here. Fed. R. App. P. 7. (Docket # 482, p. 3, Docket # 491, 4.) The Court thereafter issued a written Order granting final approval on November 2, On November 23, 2009, Objector Jessica Lynn Gaona, represented by Nevada counsel Lisa A. Rasmussen and Texas counsel Christopher A. Bandas, filed a notice of appeal of this Court s November 2, 2009 Order approving the settlement in this MDL 1735 class action. On December 1, 2009, Objectors Stephanie Swift and Fatima Andrews, represented by Ohio counsel Edward Cochran and Massachusetts counsel John Pentz, filed a notice of appeal of the November 2, 2009 Order and the November 20, 2009 Minute Order, as did Objector Deborah Maddox, represented by Ohio attorneys Edward Siegel and Francis Sweeney. Because the proposed appeals will damage both Class Members and Class Counsel by delaying their receipt of settlement funds, and because the Objectors have no credible basis for appealing the Court s rulings of November 2 and November 20, 2009, Class Counsel respectfully request that Objectors and their attorneys be required to post bonds of at least $715,000 for each appeal ($990,000 if attorneys fees are allowed), pursuant to Fed. R. App. P. 7. This amount includes damages for delay 3 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

27 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 85 of of in the use of the settlement funds, increased administrative costs, as well as the Rule 39 costs for this appeal. Fed. R. App. P. 39. III. AN APPEAL BOND IS APPROPRIATE IN THIS CASE. Any appeal of the approval of this settlement is substantively baseless. Under Fed. R. Civ. P. 23(e), a district court has broad discretion to determine whether a class action settlement is fair, adequate, and reasonable, based on the law, facts and circumstances of the case. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). It is well-established that the standard for appellate review of this Court s fee award is abuse of discretion. See In re FPI/Agretech Securities Litig., supra, 105 F.3d at 472. Although Objectors have filed flimsy notices of appeal, the scope of each appeal is limited to issues raised in the district court. Sckolnick v. Harlow, 820 F.2d 13, 14 (1st Cir. 1987) (summarily rejecting two of appellant s three issues on appeal because the issues were not brought to the attention of the district court. ). The objections in the district court relied upon assertions of fact that were contradicted by the facts in the record (e.g., the asserted shortcomings of the notice procedure) and inapposite legal support (Objectors Swift and Andrews relied upon caselaw dealing with coupon settlements). Unquestionably, this Court acted well within its discretion in rejecting such ill considered and unfounded objections. Undeterred, the professional objectors have filed notices of appeal, thus warranting a bond hearing. Rule 7 of the Federal Rules of Appellate Procedure provides: In a civil case, the district court may require an appellant to file a bond or provide other security in any form and amount necessary to ensure payment of costs on appeal. There is a split among the Circuit Courts of Appeal as to what may be covered in a cost bond on appeal of a class action settlement, some allowing attorneys fees, and interest, while others do not. The Supreme Court has yet to address this split. It should be noted that none of the Objectors resides in the Ninth Circuit. Three of the four Objectors, Maddox, Andrews and Swift, reside in Ohio, in the Sixth Circuit, as do three of the six Objectors attorneys, Siegel, Sweeney and Cochran. The 4 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

28 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 96 of of remaining Objector, Gaona, resides in Texas, in the Fifth Circuit, as does one of her two attorneys, Bandas. Of the remaining attorneys, Pentz resides in Massachusetts, in the First Circuit, and only Rasmussen resides in the Ninth Circuit, in Nevada. The nature and amount of the bond is a matter left to the sound discretion of the district court. Sckolnick v. Harlow, supra, 820 F.2d at 15; see also Adsani v. Miller, 139 F.3d 67, 79 (2d Cir. 1998) ( [A] district court, familiar with the contours of the case appealed, has the discretion to impose a bond which reflects its determination of the likely outcome of the appeal. ). The Ninth Circuit has held that the costs that may be included in a Rule 7 bond are not strictly defined. Azizian v. Federated Department Stores, Inc., 499 F.3d 950, 958 (9th Cir. 2007) ( Rule 7 does not define costs on appeal. ) While a Rule 7 bond may include the costs allowable under Fed. R. App. P. 39(e), such as record preparation and filing fees, the bond is not limited to these costs. Azizian, 499 F.3d at 958 ( the costs identified in Rule 39(e) are among, but not necessarily the only, costs available on appeal. ) Here, a major cost that should be covered by the bond is the delay in receipt of the settlement funds by Class Members and Class Counsel, as well as the increased claims administration expense that would be caused by appeals that could well last two years. At present, without considering the additional costs caused by these appeals, Wal-Mart is obligated to pay approximately $70 million to the Class Members, Class Counsel, named Plaintiffs and the Claims Administrator. 2 Applying the modest interest rate set by the Federal Reserve for the week ending December 11, 2009 of.35%, the estimated loss to the Parties caused by the delay from these frivolous appeals would be $245,000 per year, or, $490,000 here. In addition, the Claims Administrator has estimated that the additional administration costs of a two year appeal would be approximately $200,000. See 2 As described in Plaintiffs fee petitions, the actual amount Wal-Mart is obligated to pay is approximately $70 million, when the $65 million Floor is increased by the anticipated claims administration costs (without delay due to appeals), FICA payroll taxes on benefits paid to Class Members, and the costs of administering the Home Office Class. 5 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

29 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 107 of accompanying Declaration of Amanda Myette of Rust Consulting, Inc. Additionally, Plaintiffs anticipate incurring Rule 39 costs of at least $25,000. Burton Decl., 6. 3 Accordingly, Plaintiffs request a bond of $715,000, or $990,000 if the Court allows for attorneys fees, to be paid in regard to each appeal to secure an amount sufficient to protect the Class against these additional costs. It is fairly common for the District Court to require objector appellants or their counsel to post bond in large class action settlements. For example, in In re Compact Disc Minimum Advertised Price Antitrust Litig., No. MDL 1361, 2003 U.S. Dist. LEXIS 25788, *6 (D. Me. Oct. 7, 2003), the district court required the objector, who was represented by Mr. Pentz, to post a bond because that appeal might be frivolous, and because imposition of sanctions on appeal pursuant to Rule 38, was a real probability. The court specifically concluded that a bond for damages resulting from delay or disruption of settlement administration caused by a frivolous appeal may be included in a Rule 7 bond. Id., *5. Mr. Pentz and his client voluntarily dismissed their appeal thirteen days later. (MDL 1361 Docket item number 325.) Other courts, too, have had similar reactions to frivolous appeals by objectors. For example, the Court in the Central District of California in In re Broadcom Corp. Sec. Litig., 2005 U.S. Dist. LEXIS (C.D. Cal. Dec. 5, 2005) required objector s attorney to post bond, holding: Objector s appeal is tantamount to a stay of the judgment approving the class settlement. While Objector did not formally move to stay the Judgment, its appeal effectively imposes a stay, forcing the Class to bear the same risks. Because there is no supersedeas bond to protect the Class from these risks, this Court finds it proper to impose a Rule 7 bond to serve the same purpose. Indeed, Objector's appeal effectively postpones distribution of the entire judgment for well over a year. The Class will incur administrative costs of delay, such as those described [by] the Court-appointed Claims Administrator. As such, the bond shall include the costs of delay in the amount of $517, Id., at *11-*12. 3 Some courts have also permitted the recovery of attorneys fees, including the Ninth Circuit where there is a fee shifting statute, such as here, under the Fair Labor Standard Act. If the Court deems this measure appropriate, Plaintiffs anticipate that it will cost at least $275,000 litigating the various appeals filed here, which work will include moving to dismiss, seeking sanctions, and litigating the underlying appeals if necessary. 6 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

30 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 118 of The concerns expressed by the Broadcom Court are applicable here, and similar protection should be provided to the Class in MDL IV. OBJECTORS ATTORNEYS ARE NOTORIOUS PROFESSIONAL OBJECTORS Objectors attorneys frequently make meritless objections to class action settlements and then file appeals, for no purpose other than to extort a lucrative payoff from class counsel. This Court appears to have recognized such during the Final Approval Hearing (Dkt 482, p. 3), as have other judges in this Circuit. In Conroy v. 3M Corp., 2006 U.S. Dist. LEXIS 96169, (N.D. Cal. Aug. 10, 2006), Judge Wilken ordered a substantial appeal bond after finding that the Bandas Law Firm repeatedly made frivolous objections to class action settlements. The Court finds that the Bandas Law Firm and [objector/client] Ms. Roger's objections to the proposed settlement were unfounded, and therefore views their appeals as unlikely to succeed. Ms. Rogers objections were patently frivolous: her cookie-cutter written objection bore no particular relationship to the circumstances of the settlement here [ ] Under the circumstances of this case, the Court finds that requiring objectors to post an appellate costs bond covering estimated taxable costs ( $ 7,500),... and expected interest on the cash portion of the settlement ($239,667) is appropriate Id. at *10-*11 (emphasis added). Courts across the nation, in likewise recognizing that John Pentz has misused the judicial process by asserting meritless objections and appeals, have imposed appropriate appeal bonds. Plaintiffs note that the counsel that represent these objectors are professional objectors. For instance, they inform the Court that attorney John Pentz has been criticized by courts for his canned objections. See In re AOL Time Warner ERISA Litig., No. 02 Civ. 8853, 2007 U.S. Dist. LEXIS 79545, 2007 WL , at *3 (S.D.N.Y. Nov. 28, 2007) (calling Pentz and another attorney's arguments counterproductive and irrelevant or simply incorrect ); In re Royal Ahold N.V. Sec. & ERISA Litig., 461 F. Supp. 2d 383, 386 (D. Md. 2006) (noting that Pentz is a professional objector who attached himself to a plaintiff and holding that his objection was not well reasoned and was not helpful. ); Taubenfeld v. AON Corp., 415 F.3d 597, 599 (7th Cir. 2005) (faulting Pentz for failing to articulate his client's argument and putting forth conclusory assertions in his client's written objection). In re Initial Pub. Offering Sec. Litig., 2009 U.S. Dist. LEXIS 93162, *81-*82 (S.D.N.Y. Oct. 5, 2009). Furthermore, Judge Hornby in the District of Maine stated in In re Compact Disc Antitrust Lit., MDL 1361, 2003 U.S. Dist. LEXIS 25788, at *6 and n.3 (D. Me. 2003): I have previously noted that 7 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

31 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 129 of Attorney Pentz filed a groundless objection following the fairness hearing,... and he appears to be a repeat objector in class action cases. See, e.g., Spark v. MBNA Corp., 48 Fed. Appx. 385, 386 (3d Cir. 2002) (listing Mr. Pentz, from The Objectors Group, as counsel for objectors); Tenuto v. Transworld Sys., 2002 U.S. Dist. LEXIS 1764, 2002 WL (E.D. Pa. Jan. 31, 2002), at *2 (same). Some of the many other class action settlements in which Mr. Pentz has filed objections that were rejected as meritless include In re Warfarin Sodium Antitrust Lit., 212 F.R.D. 231 (D. Del. 2002), aff d, 391 F.3d 516, 533 (3d Cir. 2004); Schwartz v. Citibank, 50 Fed. Appx. 832, 2002 U.S. App. LEXIS (9th Cir. Sept. 10, 2002); Morris v. Lifescan, Inc., 54 Fed. Appx. 663, 2003 U.S. App. LEXIS 820 (9th Cir. Jan. 16, 2003) (Pentz appeal of objection to award by district court 33-1/3% of the common fund for attorney s fees summarily rejected); Spark v. MBNA Corp., 48 Fed. Appx. 385, 2002 U.S. App. LEXIS (3d Cir. Sept. 16, 2002); In re Relafen Antitrust Litig., 231 F.R.D. 52, *76-*82 (D. Mass. 2005) (Judge Young overruled objections filed by Pentz and Cochran, among others); In re Serzone Products Liability Litig., 231 F.R.D. 221 (S.D. W.Va. 2005) (Pentz fee objection overruled); In re PayPal Litig., No. C JF PVT, 2004 U.S. Dist. LEXIS 22470, 2004 WL (N.D. Cal. Oct. 13, 2004); In re Lucent Technologies, Inc. Sec. Litig., 327 F. Supp. 2d 426 (D.N.J. 2004); In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503, 525 (E.D.N.Y. 2003), aff d, 396 F. 3d 96 (2d Cir.), cert. denied, 544 U.S (2005) (Pentz objection to 18% percentage of fund fee award resulting in $220,290, in fees overruled). Undoubtedly John Pentz objections and appeals are not truly made to advance the interest of the class members. Indeed, Mr. Pentz has admitted that the bulk of his income does not come from court-awarded fees, and that the payments he receives from the parties to drop his objections usually dwarf court awards : So how does Pentz make a living? He refuses to generalize, arguing that every case is unique. But he will acknowledge that the bulk of his income does not come from court-awarded fees [T]hat kind of fee is the exception rather than the rule, Pentz says. 8 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

32 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of Instead, objectors make most of their money when class counsel pay them to drop their objections. Pentz concedes that payments from class counsel usually dwarf court awards. Joe Whatley of Birmingham-based Whatley Drake, who faced off with Pentz in three different cases, says he has always paid Pentz to drop objections without making changes to the settlement. It s like having to pay a tax, Whatley says. Lisa Lerer, Fringe Player, The Objector, John Pentz, Class Action Fairness Group, Sudbury, Massachusetts, Litigation 2004, a supplement to The American Lawyer & Corporate Counsel, Oct. 1, Burton Decl., Exh. 4. A District Court in Minnesota recently made short shrift of a request for fees filed by Objectors counsel Edward Cochran and Edward Siegel: The remoras are loose again. The Court has received a motion from attorneys Edward Siegel [and] Edward Cochran (styling themselves Objectors Counsel ), seeking an award of fees. Their motion is emphatically denied. [ ] These objectors have contributed nothing. Instead, in a pleading which may charitably be described as disingenuous, Objectors' Counsel argue they assisted the Court in finding class counsel's fee request unreasonable. [ ] Their suggestion is laughable. If the Court may be permitted an egregious paraphrase of Winston S. Churchill: Seldom in the field of securities litigation was so little owed by so many to so few. Their goal was, and is, to hijack as many dollars for themselves as they can wrest from a negotiated settlement. [ ] Objectors request and their motion ill-befit attorneys admitted to the bar. Accordingly, the Court holds, as a matter of fact and law, objectors have conferred no benefit whatsoever on the class or on the Court. Objectors Counsel are entitled to an award equal to their contribution... nothing. In re UnitedHealth Group PSLRA Litig., 643 F. Supp. 2d 1107, *7, *9-*11 (D. Minn. 2009). The frivolous and illogical objections made here by professional objectors are a transparent attempt to extort money from Class Counsel, and they make no bones about it. Indeed, these professional objectors filed similar appeals this past year in three like class action settlements involving Wal-Mart. Burton Decl., Exhs // // // 9 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

33 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of As shown in the summary of those appellate proceedings below, the professional objectors promptly dropped those appeals, without first obtaining any resolution on appeal, nor any changes or enhancements to the underlying settlement. Burton Decl., Exhs Sarda (Ouellette) v. Wal-Mart case - Florida First District Court of Appeal - Case 1D /25/ Notice of Appeal, filed 10/22/ Motion for Voluntary Dismissal 10/29/ Dismissal Carter v. Wal-Mart, 2006 CP , Charleston County Common Pleas Court (South Carolina) 05/01/ Objection to Class settlement 11/19/2009 Dismissal Order from court of appeals Hale v. Wal-Mart - Case No , Circuit Court of Jackson County (Missouri), Debbie Taylor Objector (Bandas) 07/02/ Notice of Appeal 11/09/ Motion for Dismissal of Appeal 11/10/ Dismissal This curious activity strongly suggests that the professional objectors were paid off in those cases, or, in the words of counsel Whatley, were paid a de facto tax before allowing the class members to receive payment under their respective settlements. But even if this were not the case, it is clearly frivolous to file serial appeals in class action cases only to drop them shortly thereafter. This egregious behavior clearly demonstrates that these professional objectors are not pursuing any legitimate legal issues on appeal, nor are they seeking any serious consideration by the appellate courts of any supposed deficiency in the challenged settlement. V. THESE OBJECTIONS TO THE SETTLEMENT ARE PATENTLY FRIVOLOUS. The lack of merit of the appeals is also readily apparent in the nature of the objections. The primary complaints raised by the professional objectors are that the notice is deficient, and the attorneys fees are too high PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

34 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of A. Appealing the Form of Notice Is Frivolous. In appealing the form of notice, it is telling that the professional objectors do not identify any legal or factual deficiency with the manner and form of notice authorized here. As this Court is aware, the Claims Administrator, Rust Consulting, sent the Notice Documents by first class mail to 3,177,706 Settlement Class Members. Declaration of Amanda J. Myette in Support of Final Approval of Proposed Settlement (Docket No. 423) 10. The claim forms provided with the Notice are similar to those used and accepted by other courts, and conformed to the claim forms the Court approved in its Preliminary Approval Order. Id. 10, 13. The Claims Administrator updated Class Members addresses through the National Change of Address Database and used skip tracing to find addresses for Notices that were returned. Id. 9, 11; Settlement Agreement Just under 98% of the returns were successfully redelivered. Id. 11. In addition, a Summary Notice was published nationally in Parade Magazine on August 16, 2009, and in El Nuevo Dia and El Vocero, two newspapers published in Spanish in Puerto Rico, on August 15 and 16, Id. 12. The Claims Administrator also established both a website for the Class Members to access information regarding the Settlement and a toll-free number to respond to inquiries from Class Members, all in accordance with the Settlement Agreement. Settlement Agreement ; Myette Decl In view of this comprehensive and tremendously successful notice program, it is quite frankly preposterous for the Objectors to have appealed the Court s rejection of their objections regarding the form and dissemination of notice. To comport with due process, notice must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 94 L. Ed. 865 (1950). As for the content of the notice, Rule 23(c)(2) requires that the notice inform prospective class members of (i) the nature of the action; (ii) the definition of the 11 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

35 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through counsel if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on class members under Rule 23(c)(3). Rule 23(e) more generally requires that the notice of a proposed settlement must inform class members: (i) of the nature of the pending litigation; (ii) of the settlement s general terms; (iii) that complete information is available from the court files; and (iv) that any class member may appear and be heard at the Fairness Hearing. Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1374 (9th Cir. 1993) ( Notice is satisfactory if it generally describes the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard. ); 2 Newberg, Newberg on Class Actions 8.32 at (citations and quotations omitted). As the Court found in issuing preliminary approval and thereafter finally approving the Settlement, the class notices that were provided met all of these requirements. The objectors have not identified any manner in which the class notices were in any way deficient or otherwise failed to comport with the law. But, again, this is not the point of their appeal. B. Objections to the Attorneys Fees Are Frivolous. The objections to the attorneys fee awarded here are equally baseless. To begin with, the professional objectors wrongly fault the Court for issuing the award without first inquiring about the claims process. Although such inquiry is not legally required, the objectors assertion is factually incorrect. The Court received briefing from Plaintiffs on this issue and then held a hearing on November 20, 2009 to evaluate the claims process and determine how the fees should be calculated. The objectors also incorrectly contend, without the support of any applicable legal authority, that the Court should not have awarded more than 10% of the floor of the settlement fund to the attorneys, which would amount to approximately $6.5 million in fees. This appellate issue is legally and factually unsupportable. 12 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

36 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of Contrary to the objectors claim, [t]he Supreme Court has stated that attorneys fees sought under a common fund theory should be assessed against every class members share, not just the claiming members. Six Mexican Workers, supra, 904 F.2d at 1311, citing Boeing Co. v. Van Gemert, 444 U.S. 472, 480, 62 L. Ed. 2d 676, 100 S. Ct. 745 (1980). The law of the Ninth Circuit requires that a fee award be based on the entire benefits available to the Class and not on the benefits actually claimed by class members. Williams v. MGM-Pathe Communications Co., 129 F.3d 1026, 1027 (9th Cir. 1997); see also International Precious Metals Corp. v. Waters, 530 U.S. 1223, 1225 (U.S. 2000) (noting that Williams is the law in the Ninth Circuit); Young v. Polo Retail, LLC, 2007 U.S. Dist. LEXIS 27269, (N.D. Cal. 2007) (concluding that Williams is the law in the Ninth Circuit). The District Court in Hopson v. Hanesbrands Inc., 2009 U.S. Dist. LEXIS (N.D. Cal. Apr. 3, 2009) likewise found that [t]he appropriate measure of the fee amount is against the potential amount available to the class, not a lesser amount reflecting the amount actually claimed by the members. Id. at *32-33, citing Boeing Co. v. Van Gemert, 444 U.S. at ; Williams, 129 F.3d at Clearly, it is frivolous for the objectors to appeal and argue that the Court should have violated applicable precedent by awarding fees based upon the amount claimed by the class members, or the Floor amount rather than the Ceiling. It is equally frivolous for the objectors to appeal the fee award claiming that it should have been no more than 10% of the floor amount. The Ninth Circuit has established 25% of the common fund as the benchmark award for attorney fees, which is merely a starting point that can and should be adjusted when the Court considers the excellent results achieved for the Class, the complexity of the issues, the risk of no recovery, and the effort expended by counsel. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 (9th Cir. 2002), cert. denied 537 U.S. 1018; Six Mexican Workers, 904 F.2d at 1311 (exceptional results require an upward adjustment); In re Pacific Enterprises Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (complexity and risks warrant upward adjustment). It is also worth noting that the trial court has broad authority over awards of attorneys fees in class actions, and the award 13 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

37 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of may be reviewed only for abuse of discretion. In re FPI/Agritech Sec. Litig., 105 F.3d 469, 472 (9th Cir. 1997). The objectors have cited no case law supporting their contention that the fee should have been a meager 10% here, which would be $6.5 million in this complex and challenging case. 4 In claiming that this Court committed reversible error in failing to impose such a significant downward adjustment, without any evidentiary support or legal authority, the objectors wholly ignore the record in this case. For instance, Professor William Rubenstein, a leading class action expert and editor of Newberg on Class Actions, concluded that the fees awarded here were reasonable for a variety of reasons, among them: that the results achieved by counsel for the class are extraordinary and deserving of an enhanced fee, Rubenstein Decl. in Support of Settlement Approval and Fee Petition (Docket No. 417) ( Rubenstein Decl. ) 27; that the risk counsel undertook here was quite significant, noting that It is one thing to take on a difficult case, another to take it on after certification denials in many of the underlying states courts, another to keep going after certification has been denied, but yet another thing altogether to take these risks against a corporation the size and tenacity of Wal-Mart, Rubenstein Decl. 29; and, that the lawyering effort overcame significant complexities including the facts that [T]his case is at the cutting edge of multi-state litigation and that the lawyers and this Court confronted procedural complexities rarely seen in federal court MDL practice before 2006, (Rubenstein Decl. 28), and that The litigation of this consolidation of 30-state wide class actions based on 30 different state wage and hour regimes involving 3.2 million individual class members with distinct work histories and its resolution was significantly more complex than a standard federal class action. Rubenstein Decl. 28. In such circumstances, [f]ederal courts have consistently approved of attorney fee awards over the 25% benchmark. In re Heritage Bond Litig., 2005 U.S. Dist. LEXIS 13555, *59 n. 12 (C.D. Cal. 2005); see also In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 460 (9th Cir. 2000) (affirming award 4 The caselaw cited by the objectors pertains to settlements where the benefit provided to the class consists of disfavored coupon settlements, unlike the cash benefits provided here. 14 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

38 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of of fees equal to one-third of total recovery); In re Pub. Serv. Co., 1992 U.S. Dist. LEXIS 16326, 1992 WL , at *1, *12 (S.D. Cal. 1992) (awarding one-third); Antonopulos v. North American Thoroughbreds, Inc., 1991 U.S. Dist. LEXIS 12579, 1991 WL , at *1, *4 (S.D. Cal. May 6, 1991) (awarding one-third). In the present case, the Court expressly found that Class Counsel achieved an "exceptionally favorable result for the members of the Settlement Classes by diligently [pursuing] this complex litigation for years despite the substantial risk of no recovery." Dkt 482, 11. Put simply, there is no credible appealable issue concerning the award of attorneys fees in this case, as the award comports with well established federal law. VI. CALCULATION OF APPROPRIATE AMOUNT OF BOND. As stated above, a court may impose a bond to cover costs to the class that result from the delay caused by the appeal and for other costs under Fed. R. App. P. Rules 7 and 39. This Court should require a bond for all these reasons in regard to each of the three appeals. The most compelling reason to require a bond is that this baseless appeal will delay a disbursement of nearly $70 million in economic benefits to the Class, named Plaintiffs, Class Counsel and the Claims Administrator. Interest on the delayed payments would be substantial. 28 U.S.C provides: Interest. (a) Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefore may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[.] the date of the judgment. The Director of the Administrative Office of the United States Courts shall distribute notice of that rate and any changes in it to all Federal judges. (b) Interest shall be computed daily to the date of payment... and shall be compounded annually PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

39 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page of of The interest rate for the week ending December 11, 2009, was.35%. Interest on the $70 million tied up by these appeals for two years (a reasonable estimate for the time of an appeal) is calculated according to statute at $490,000. Aside from the opportunity cost of not having the money sooner, a delay will be additionally detrimental to the Class in that the delay will substantially decrease the chances that settlement checks will reach Class Members who have changed their residence addresses since submitting claim forms. An appeal will also require the Claims Administrator to expend resources in answering calls from Class Members who are confused as to why they have not received their checks. Beyond the interest caused by the delay, Plaintiffs anticipate Rule 39 costs of $25,000, additional costs in the amount of $200,000 for updating and maintaining the website, and settlement telephone service, and $275,000 in attorneys fees. Burton Decl. 6; Myette Decl. Thus, Plaintiffs respectfully request that the Court require the Objectors and their attorneys to post bond in an amount equal to interest on the settlement funds, Rule 39 costs and additional claims administration and litigation costs. The amount requested is $715,000, or $990,000 if attorneys fees are permitted. VII. COURT HAS INHERENT POWERS TO PROTECT THE SETTLEMENT Having independently determined that this settlement was fair, reasonable and adequate under Fed. R. Civ. P. 23(e), the Court is both obligated and authorized to protect the Settlement and the Class. Plaintiffs request that this Court order objectors/appellants to appear at a bond hearing and set an appropriate bond under Fed. R. App. P. Rules 7 and 39. Plaintiffs have demonstrated above that the bond amount should be $715,000 (or $990,000) to protect the Settlement Class and Class Counsel from damages that will result from wholly frivolous and vexatious appeals that are intended only to line the professional objectors' pockets and that will in no way benefit the Class. It is also worth noting that these objectors may be sanctioned by the appellate court for filing baseless appeals. Under Fed. R. App. P. 38, we may award just damages and single or double costs to the appellee for defending against a frivolous appeal. See also 28 U.S.C. 16 PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

40 Case 2:06-cv PMP-PAL 2:11-md TON Document Filed 04/29/14 12/18/09 Page 218 of of This may include attorney's fees. McConnell v. Critchlow, 661 F.2d 116, 118 (9th Cir.1981). An appeal is considered frivolous when the result is obvious or the appellant's arguments of error are wholly without merit. Id. (citations omitted). Operating Engineers Pension Trust v. Cecil Backhoe Service, Inc., 795 F.2d 1501 (9th Cir. 1986). See also Ingle v. Circuit City, 408 F.3d 592, (imposing sanctions in the form of double costs and reasonable attorney's fees under Rule 38). Thus, for this additional reason, it is critical that the Court issue an appropriate bond and document its findings as to the merits of the underlying objections, for later use in the appellate proceeding. VIII. CONCLUSION For the foregoing reasons, Plaintiffs request that this Court enter an Order requiring each objector/appellant to post a bond in the amount of $715,000, or $990,000, and that the Court provide such other relief as may be appropriate Dated: December 17, 2009 Respectfully submitted, /s/ Carolyn Beasley Burton Carolyn Beasley Burton Robert W. Mills THE MILLS LAW FIRM 880 Las Gallinas Avenue, Suite 2 San Rafael, CA PLAINTIFFS MEMORANDUM IN SUPPORT OF MOTION TO REQUIRE OBJECTORS AND THEIR ATTORNEYS TO POST APPEAL BONDS

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