UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Transcription

1 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 1 of 22 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Katherine Ponce, individually and on behalf of all others similarly situated, v. Lenovo (United States) Inc., Plaintiff, Civil No (JNE/SER) MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF S MOTION FOR ATTORNEYS FEES, EXPENSES, AND CLASS REPRESENTATIVE SERVICE AWARD Defendant. INTRODUCTION 1 In light of the Settlement that has been reached in this matter and the successful outcome it represents for members of the Settlement Class, Plaintiff Katherine Ponce and Class Counsel respectfully petition the Court to award: (1) a class representative service award to Plaintiff in the amount of $5,000; (2) attorneys fees to Class Counsel 2 in the amount of $750,000; and (3) reimbursement of $16, in out-of-pocket expenses that Class Counsel incurred in connection with this action, all as provided in paragraphs of the Parties Class Action Settlement Agreement. ECF No As set forth below, these amounts are fair and reasonable because, among other things: The requested service award is in line with service awards in other class action cases. 1 Unless otherwise defined herein, all capitalized terms have the meanings given in the Parties Settlement Agreement. See ECF No This Court preliminarily appointed Nichols Kaster, PLLP, the University of Minnesota Law School Consumer Law Clinic, and attorney Michael Vanselow as Class Counsel in this action for settlement purposes. See ECF No. 38 at 6. 1

2 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 2 of 22 The requested fee represents less than 6% of the total monetary relief available under the Settlement, which is significantly less than the percentage of the recovery awarded in similar cases. The requested expenses are reasonable and were necessarily incurred in prosecuting this action. The requested amounts will be paid separately by Defendant Lenovo (United States) Inc., and will not reduce the recovery to the Settlement Class. The requested amounts were agreed to by Lenovo and negotiated separately by the Parties, after all material terms of the Settlement were resolved. To date, no Settlement Class Member has filed an objection to the requested attorneys fees, expenses, and service award provided in the Settlement Agreement. Accordingly, pursuant to Fed. R. Civ. P. 23(h) and 54(d)(2), Plaintiff and Class Counsel respectfully request that this Court grant their motion and award the requested fees, expenses, and service award. FACTUAL BACKGROUND I. THE COMPLAINT Plaintiff initiated this action on March 16, 2016 on behalf of herself and other similarly situated consumers. See ECF No. 1. After Lenovo removed the action to this Court, Plaintiff filed an Amended Class Action Complaint ( Complaint ) on May 9, ECF No. 12. The gravamen of the Complaint is that Lenovo engaged in a deceptive false reference or false discount pricing scheme related to computers and tablets sold on its website by advertising inflated starting at or web price reference prices for its products, along with significant purported discounts that deceptively appear to reduce the sale price from these false reference prices. See id. 5-6, According to the 2

3 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 3 of 22 Complaint, Lenovo does not sell products at the purported reference prices in the regular course of its business, but fraudulently induces consumers to purchase products based on the false discounts or savings off the phantom reference prices. See id. Plaintiff is a resident of California, who purchased a Yoga 3 laptop computer from Lenovo s website in June 2015 while attending the University of Minnesota Law School. ECF No. 12 9, At the time, Plaintiff believed she was receiving a special deal on the laptop and receiving a discount off the regular price. Id. 54. However, Plaintiff alleges that the advertised savings were fictitious and she was a victim of Lenovo s false discount scheme. Id Prior to filing the present action, Class Counsel conducted an extensive investigation into the relevant facts and applicable law. Declaration of Kai Richter ( Richter Decl. ) 18. Specifically, under the direction of Professor Prentiss Cox, student attorneys from the Law School s Consumer Protection Clinic researched pricing histories for various Lenovo products on Lenovo s website, archived the relevant web captures, and prepared detailed tables summarizing the results, including the table and web captures that were included in the Complaint. Id.; see also ECF No & Ex. 3. In addition, students from the Clinic, with assistance from the Clinic s co-counsel (Nichols Kaster, PLLP and Mr. Vanselow) researched the potential claims under the laws of various states. Richter Decl. 18. Based on the extensive research that was conducted, the Complaint asserts claims for violation of the Minnesota Unlawful Trade Practices Act ( MUTPA ), Minn. Stat. 325D.09 et seq.; the Minnesota Prevention of Consumer Fraud Act ( MPCFA ), Minn. 3

4 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 4 of 22 Stat. 325F.68 et seq.; the Minnesota False Statements in Advertising Act ( MFSAA ), Minn. Stat. 325F.67; the California Consumer Legal Remedies Act ( CLRA ), Cal. Civ. Code 1750 et seq.; the California False Advertising Law ( CFAL ), Cal. Bus. & Prof. Code et seq.; and the California Unfair Competition Law ( CUCL ), Cal. Bus. & Prof. Code et seq. ECF No. 12 Counts I-VI. In addition, the Complaint asserts an alternative statutory claim for violation of the New York Deceptive Practices Act ( NYDPA ), N.Y. Gen. Bus. Law 349 et seq., based on a choice-of-law provision in Lenovo s Sales Agreement. 3 Id. Count VII. Finally, the Complaint asserts a common law claim for unjust enrichment/restitution. Id. Count VIII. The latter two claims are asserted on a nationwide basis. Id. 64. Lenovo answered the Complaint on May 23, ECF No. 21. In its Answer, Lenovo denied the gravamen of the Complaint and raised numerous defenses to Plaintiff s claims. Id. II. DISCOVERY AND MEDIATION After Lenovo filed its Answer, the Parties met and conferred to discuss, among other things, the possibilities for settlement, as required by Fed. R. Civ. P. 26(f)(2). During this process, the Parties agreed to engage in mediation with retired United States Magistrate Judge Edward Infante, an experienced ADR neutral. 4 Richter Decl Lenovo s standard Sales Agreement contains a choice-of-law provision stating that New York law governs the agreement and orders thereunder. See ECF No Judge Infante was United States Magistrate Judge for the Southern District of California from 1972 to 1986, and Chief Magistrate Judge for the Northern District of California from 1990 to See 4

5 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 5 of 22 Prior to the mediation, Class Counsel served informal discovery requests for mediation purposes, seeking information regarding Lenovo s online pricing and promotions during the relevant timeframe, including pricing strategies, advertised sale prices and reference prices, and alleged discounts related to computers and tablets sold on its website. Id. 21. Lenovo produced the requested information on a rolling basis beginning in June Id. Class Counsel then reviewed the documents and information that were produced, and also retained a consulting firm to assist with analyzing the data and understanding the patterns in Lenovo s discounting strategy. Id. 22. Following this exchange of information, and after the Parties also exchanged detailed mediation statements, the Parties appeared for in-person mediation with Judge Infante in San Francisco on July 20, Id. 23. At the end of the day, the Parties reached agreement on several key terms, and agreed to continue the process with several telephonic sessions led by Judge Infante. Id. On August 2, 2017, the parties had agreed to all of the material terms of a class-wide settlement, and executed a term sheet memorializing this agreement. See Richter Decl. 24 & Ex. 1. However, as reflected in the term sheet, the parties did not come to agreement on an award of attorneys fees and expenses. Id. Despite continued assistance from Judge Infante, the parties reached an impasse with regard to the award of attorneys fees, and considered submitting the issue to the Court for resolution. Richter Decl. 24. However, through continued, persistent negotiation, the parties ultimately agreed on a reasonable fee award of $750,000, and incorporated this agreement into their comprehensive Settlement Agreement. ECF No. 29-1, 35. 5

6 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 6 of 22 III. RELEVANT SETTLEMENT TERMS The terms of the Settlement Agreement were described in detail in Plaintiff s motion for preliminary approval of the Settlement. See ECF No. 28. In relevant part, the Settlement provides for a monetary payment of $50 to each member of the Settlement Class who submits a timely claim to the settlement administrator. ECF 29-1, 13. Notice was sent to 265,301 Settlement Class members, resulting in $13,265,050 in total monetary relief available to the class. Richter Decl. 26. In addition, the Settlement provides for significant prospective relief. Specifically, for a period of at least five years, Lenovo agrees that no price shall be advertised on its website as a former price (however it may be characterized) of a non-thinkpad laptop or tablet, unless the alleged former price was the prevailing market price within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly, accurately, and conspicuously stated in the advertisement. ECF 29-1, 11. Separate from the foregoing relief, the Settlement Agreement also provides that (1) Lenovo will pay all costs of settlement administration, 5 (2) Lenovo will pay $750,000 in attorneys fees, and will reimburse Class Counsel for all costs and expenses incurred in this action, and (3) Plaintiff shall be entitled to a service award of up to $5,000. ECF No. 29-1, 34, 35, 40. Because these amounts will be paid separately by Lenovo, they do not reduce the amount of monetary relief available to the Settlement Class. 5 Based on the bid submitted by the Claims Administrator, Dahl Administration LLC ( Dahl ), the total estimated settlement administration expenses are over $100,000. 6

7 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 7 of 22 IV. SETTLEMENT ADMINISTRATION AND RESPONSE TO CLASS NOTICE Since this Court preliminarily approved the Settlement, Class Counsel have worked to ensure that the notice and claims process set out in the Court s preliminary approval order has been followed. Richter Decl. 27. Class Counsel have regularly communicated with the Claims Administrator, reviewed the language and content of the official settlement website ( and also reviewed and edited scripts for the automated telephone line ( ). Id. In addition, Class Counsel have been fielding inquiries from Class Members, some of whom have contacted Class Counsel directly and some of whom have been forwarded to Class Counsel by the Claims Administrator. Id. Going forward, it is anticipated that Class Counsel will continue to devote significant resources to monitoring the claims administration process, responding to inquiries from Class Members, moving for final approval, appearing at the final approval hearing, and other tasks. Richter Decl. 30. The deadline for Settlement Class members to submit claims, or to opt-out of or object to the Settlement, is June 26, 2017, and Settlement Class members may cure any deficiencies in timely submitted claims by July 26, ECF No. 29-1, 16. Notice was sent to the 265,301 Settlement Class members on April 27, Among other things, the Notice informed members of the Settlement Class that Class Counsel would request $750,000 in fees, plus reimbursement of expenses, and a $5,000 service award for the class representative. See ECF No at pages 31 of 44 and 42 of 44. According to the most recent status report from the Settlement Administrator, as of May 20, 2017, there have been no objections to the Settlement, and only three exclusion requests. Richter 7

8 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 8 of 22 Decl. 28. In contrast, 19,065 claims already have been submitted to date, with several weeks left before the June 26 claims filing deadline. Id. ARGUMENT I. PLAINTIFF S REQUEST FOR A SERVICE AWARD SHOULD BE GRANTED This Court should approve the agreed-upon service award to Plaintiff, in recognition of her contributions to the case and the time she has invested in this matter. Courts often grant service awards to named plaintiffs in class action suits to promote the public policy of encouraging individuals to undertake the responsibility of representative lawsuits. Caligiuri v. Symantec Corp., 855 F.3d 860, 867 (8th Cir. 2017) (quoting Yarrington v. Solvay Pharm., Inc., 697 F.Supp.2d 1057, 1068 (D. Minn. 2010)); see also Hashw v. Dep't Stores Nat'l Bank, 182 F.Supp.3d 935, 951 (D. Minn. 2016) ( Courts have recognized the propriety of such awards, for without a named plaintiff there can be no class action. ) (internal quotation omitted). Whether to grant such an award is within the discretion of the court; the relevant considerations include the actions taken by the named plaintiff to protect the class s interests, the degree to which the class has benefited from those actions, and the amount of time and effort the named plaintiff expended on the litigation. Hashw, 182 F.Supp.3d at 952. The requested service award is reasonable here. The Settlement provides significant benefits to the Class, and these benefits could not have been achieved without Plaintiff s active participation. Among other things, Plaintiff (1) provided Class Counsel with information and documents relating to her claims against Lenovo; (2) personally met with Class Counsel before the action was filed; (3) reviewed the Complaint prior to 8

9 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 9 of 22 filing; (4) reviewed the mediation statement and met with Class Counsel again prior to the mediation; (5) personally attended the mediation in San Francisco; (6) reviewed the Settlement Agreement; (7) submitted a declaration in support of the Settlement (ECF No. 32); and (8) communicated with Class Counsel throughout the litigation. Richter Decl. 38. The proposed $5,000 service award pales in comparison to the millions of dollars in relief made available to the Settlement Class, and is well within the range of reasonable awards. As the Eighth Circuit recently noted, courts in this circuit regularly grant service awards of $10,000 or greater. Caligiuri, 855 F.3d at 867 (affirming service award of $10,000) (citing Huyer v. Njema, 847 F.3d 934, 941 (8th Cir. 2017) (affirming approval of settlement that included $10,000 service awards to named plaintiffs); Zilhaver v. UnitedHealth Group, Inc., 646 F.Supp.2d 1075, 1085 (D. Minn. 2009) (granting named plaintiffs $15,000 each in service awards from settlement of $17,000,000)); see also Hashw, 182 F.Supp.3d at 952 (approving $15,000 service award). Further, granting the proposed service award will not reduce the benefits paid to any class member because Lenovo has agreed to pay this amount separately. Accordingly, the requested award is reasonable and should be approved. II. CLASS COUNSEL ARE ENTITLED TO RECOVERY OF REASONABLE ATTORNEYS FEES AND EXPENSES, AS PROVIDED BY THE SETTLEMENT AGREEMENT This Court also should approve the attorneys fees that Lenovo has agreed to pay to Class Counsel. It is well-settled that plaintiffs attorneys in a class action lawsuit may petition for compensation for any benefits to the class that result from the attorneys 9

10 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 10 of 22 efforts. See, e.g., Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); In re Life Time Fitness, Inc., Tel. Consumer Prot. Act (TCPA) Litig., 847 F.3d 619, 622 (8th Cir. 2017). Indeed, Rule 23 expressly states that the court may award reasonable attorney's fees and nontaxable costs that are authorized by law or by the parties agreement. Fed. R. Civ. P. 23(h) (emphasis added). A request for attorney s fees should not result in a second major litigation. Ideally, of course, litigants will settle the amount of a fee. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). Here, the Parties did just that. The Settlement Agreement provides for an award of attorneys fees to Class Counsel in the amount of $750,000, plus reimbursement for costs and expenses. ECF No. 29-1, Thus, the only question is whether these amounts are reasonable. In making this determination, the Court may use either (1) the percentage of the benefit approach, which awards a fee equal to some fraction of the overall benefit conferred on the class, or (2) the lodestar approach, under which the number of hours expended in the litigation are multiplied by a reasonable hourly rate in order to produce a fee amount, which can be adjusted up or down depending on the specific facts of the case. In re Life Time Fitness, 847 F.3d at 622. However, courts in this District have expressed a preference for the percentage of the benefit method because it aligns the interests of the class with those of class counsel, and encourages the efficient resolution of disputes. In re Xcel Energy, Inc., Sec., Derivative & ''ERISA'' Litig., 364 F.Supp.2d 6 Again, this will be paid separately from payments to Settlement Class members, and will not diminish their recovery. 10

11 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 11 of , (D. Minn. 2005); see also Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 245 n.8 (8th Cir. 1996) (noting that, among other things, the lodestar method creates a disincentive for the early settlement of cases. ). A. Class Counsel s Requested Fee is Reasonable Under the Percentage of the Benefit Approach The Eighth Circuit has held that where, as here, attorneys fees were separately negotiated and will be paid apart from relief awarded to the class, it is appropriate to use the percentage of the benefit approach to determine if the requested fee is reasonable: The district court concluded that because the attorney fees were to be paid by the defendants separate and apart from the settlement funds, the fees did not come from a common fund belonging to the plaintiffs, and thus the percentage of the benefit approach was inappropriate. We disagree. Although under the terms of each settlement agreement, attorney fees technically derive from the defendant rather than out of the class recovery, in essence the entire settlement amount comes from the same source. The award to the class and the agreement on attorney fees represent a package deal. Even if the fees are paid directly to the attorneys, those fees are still best viewed as an aspect of the class recovery. Johnson, 83 F.3d at ; accord Dewey v. Volkswagen Aktiengesellschaft, 558 F. App'x 191, 197 (3d Cir. 2014) ( [W]here the reality is that the fund and the fee are paid from the same source in this case, Volkswagen the arrangement is, for practical purposes, a constructive common fund, and courts may still apply the percent-of-fund analysis in calculating attorney's fees. ) (quotations omitted). In the Eighth Circuit, courts have routinely awarded attorney fees ranging from 25% to 36% of a common fund under the percentage-of-the-fund method. Yarrington, 697 F.Supp.2d at Applying this benchmark, Class Counsel s fee request is clearly reasonable. As noted above, in this case there are 265,301 Settlement Class members, 11

12 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 12 of 22 each of whom are entitled to $50 under the Settlement Agreement, resulting in $13,265,050 in total monetary relief available to the class. 7 Class Counsel s $750,000 fee request represents less than 6% of the benefit provided to the class far below the range of 25% to 36% routinely awarded by courts in the Eighth Circuit. In addition to being well within and, in fact, below the range of reasonable percentages, Class Counsel s fee request is also supported by a number of factors that courts commonly consider when evaluating fee awards. Among other things, courts in the Eighth Circuit may consider: (1) the benefit conferred on the class, (2) the risk to which plaintiffs' counsel were exposed, (3) the difficulty and novelty of the legal and factual issues in the case, including whether plaintiffs were assisted by a relevant governmental investigation, (4) the skill of the lawyers, both plaintiffs and defendants, (5) the time and labor involved, including the efficiency in handling the case, (6) the reaction of the class and (7) the comparison between the requested attorney fee percentage and percentages awarded in similar cases. 7 It is appropriate to consider the total benefit available to the class, even though some class members may not claim the benefits made available to them. See Boeing Co. v. Van Gemert, 444 U.S. 472, 480 (1980) ( [Absentee class members ] right to share the harvest of the lawsuit upon proof of their identity, whether or not they exercise it, is a benefit in the fund created by the efforts of the class representatives and their counsel. ); Gascho v. Glob. Fitness Holdings, LLC, 822 F.3d 269, (6th Cir. 2016) (holding that it is appropriate to award fees based on the size of the entire fund as opposed to the portion of it for which claims had been approved ); Moulton v. U.S. Steel Corp., 581 F.3d 344, 352 (6th Cir. 2009) (rejecting objections to fee award that focus on the amount claimed rather than the amount allocated ); Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 437 (2d Cir. 2007) ( An allocation of fees by percentage should therefore be awarded on the basis of the total funds made available, whether claimed or not. ); Waters v. Int'l Precious Metals Corp., 190 F.3d 1291, 1297 (11th Cir. 1999) ( [n]egotiating a $40 million gross settlement fund created a benefit on behalf of the entire class, even where a significant portion of the fund would go unclaimed); accord, Caligiuri, 855 F.3d at ( [T]he choice of whether to base an attorneys fee award on either net or gross recovery should not make a difference so long as the end result is reasonable. ) (quoting Huyer v. Buckley, 849 F.3d at 395, 399 (8th Cir. 2017)). 12

13 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 13 of 22 In re Xcel Energy, 364 F.Supp.2d at 993. Each of these factors supports the requested fee here. 1. The Settlement Confers a Substantial Benefit to the Class The Settlement in this matter confers a substantial benefit to members of the Settlement Class. The Settlement provides for cash payments to class members, rather than coupon or gift-card settlements often seen in other consumer cases. See, e.g., In re HP Inkjet Printer Litigation, 716 F.3d 1173 (9th Cir. 2013) (coupon settlement); Reibstein v. Rite Aid Corp., 761 F.Supp.2d 241 (E.D. Pa. 2011) (gift-card settlement). Additionally, the Settlement provides significant non-monetary benefits in the form of an agreement by Lenovo to abide by strict standards when using reference prices to promote the sale of products on its website. See supra at 6. Other false discount settlements involving computer manufacturers have not included this prospective relief. See Pls Memo in Support of Motion for Preliminary Approval (ECF No. 28) at 13. Further, the Settlement applies on a nationwide level (unlike other settlements), obviating the need for costly and inefficient state-by-state litigation. Id. In sum, as explained in Plaintiff s motion for preliminary approval, the Settlement here is the most favorable settlement that has ever been negotiated in a false discount suit against a computer manufacturer, id., and one of the most favorable settlements in any false discount suit. Members of the Settlement Class will enjoy a substantial benefit from this litigation, and also benefit from the expeditious manner in which it was resolved (permitting their claims to be paid promptly). 13

14 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 14 of Class Counsel Undertook Significant Risk Class Counsel undertook significant risk in bringing this action. Although false discount cases against certain Defendants (such as Dell) have survived motions to dismiss, 8 numerous false discount cases against other defendants (including two in Minnesota) have been dismissed at the pleading stage. See Nunez v. Best Buy Co., Inc., 315 F.R.D. 245 (D. Minn. 2016); Azimpour v. Select Comfort Corp., 2016 WL (D. Minn. June 13, 2016); Sperling v. DSW, Inc., 2016 WL (C.D. Cal. Jan. 28, 2016); Shaulis v. Nordstrom, Inc., 2015 WL (D. Mass. Aug. 14, 2015); Rubenstein v. Neiman Marcus, 2015 WL (C.D. Cal. Mar. 2, 2015); Kim v. Carter s, Inc., 598 F.3d 362 (7th Cir. 2010). Moreover, courts and litigants have struggled to identify the proper methodology for calculating damages in these cases. For example, in Spann v. J.C. Penney Corp., 2015 WL , *3-8 (C.D. Cal. March 23, 2015), the court recognized several potential models of relief, including complete restitution of the purchase price, transaction value restitution, and restitution based on the defendant s net profits. However, each of these models was expressly rejected in a subsequent case. See Chowning v. Kohl s Dep t Stores, Inc., 2016 WL , *4 (C.D. Cal. Mar. 15, 2016) (finding false discount plaintiff had suffered injury, but has not proposed a viable measure of restitution ). Indeed, some courts have taken the position 8 See Chester v. TJX Cos., Inc., 2016 WL (C.D. Cal. Aug. 18, 2016); Pickles v. Kate Spade & Co., 2016 WL (N.D. Cal. July 26, 2016); Le v. Kohls Dep't Stores, Inc., 2016 WL (E.D. Wis. Feb. 8, 2016); Branca v. Nordstrom, Inc., 2015 WL (S.D. Cal. Oct. 9, 2015); Spann v. J.C. Penney Corp., 2015 WL (C.D. Cal. Mar. 23, 2015); Hinojos v. Kohl s Corp., 718 F.3d 1098 (9th Cir. 2013); Brazil v. Dell, Inc., 2010 WL (N.D. Cal. Dec. 21, 2010). 14

15 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 15 of 22 that there are no damages for false discounts from fake reference prices because the purchaser received a bargained-for product at a bargained-for price. Kim, 598 F.3d at This uncertainty regarding both the claims and the availability of monetary recovery represented a significant risk, and Class Counsel faced a real possibility of receiving no compensation for their work in this matter. 3. The Case Presented Novel and Complex Legal and Factual Issues For the reasons described above, this case involved novel and complex issues regarding both liability and damages. Indeed, this matter was particularly complex in that it includes a nationwide class and allegations under the substantive laws of Minnesota, California, and New York (due to the fact that Plaintiff is a permanent California resident, she was a temporary resident of Minnesota during her time at the Law School, and Lenovo has a New York choice-of-law provision in its standard sales contract). The complexity of this matter required extensive legal research and investigation, and further supports Class Counsel s fee request. Moreover, Class Counsel was not assisted by any government investigation. 4. Both Plaintiff and Defendant Are Represented by Experienced, Highly Skilled Counsel Class Counsel previously submitted declarations summarizing their considerable qualifications and experience in connection with their motion for preliminary approval. See ECF Nos. 29, 30, 31. To briefly summarize: Nichols Kaster has extensive class action and collective action experience. The firm has been appointed lead counsel or co-lead counsel on hundreds of class and collective actions, and has recovered hundreds of millions of dollars for its clients. 15

16 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 16 of 22 ECF No. 29, 27. Lead attorney Kai Richter is the former Manager of the Complex Litigation Division of the Office of the Minnesota Attorney General. Id. 24. Since re-entering private practice, Mr. Richter has been appointed class counsel for litigation or settlement purposes in over a dozen cases, and has negotiated class action settlements providing more than $175 million in available relief to consumers. Id. 22. Mr. Richter is also familiar with the law in the area of false discount schemes, and has presented a nationwide webinar entitled Class Action Claims Against Retailers, which addressed this topic. Id. 23. The University of Minnesota Law School Consumer Protection Clinic ( the Clinic ) represents consumers in matters regarding marketplace fraud and deception, consumer credit, debt collection, motor vehicle fraud, predatory lending, and other similar issues. ECF No. 31, 12. Lead attorney Prentiss Cox is a former Manager of the Consumer Enforcement Division of the Minnesota Attorney General s Office, and has been involved in numerous complex public enforcement cases alleging violations of state consumer protection laws. Id In addition to his practical experience, Professor Cox is a widely published scholar on consumer protection and complex litigation, and he has testified before Committees of the United States Congress on these issues on multiple occasions. Id Michael J. Vanselow has more than 30 years of experience litigating a wide variety of large, complex, and high profile cases in numerous areas, including consumer law, health care law, constitutional law, products liability, media law, education law, and other areas. ECF No. 30, 5. Mr. Vanselow is a former Deputy Attorney General for the Minnesota Attorney General s Office, a former equity partner with Oppenheimer Wolff & Donnelly PLLP, and former Principal Litigation Counsel with Medtronic, Inc. 9 The quality of counsel in this case further supports the requested fee Mr. Vanselow is now Of Counsel to the law firm Lockridge Grindal Nauen, P.L.L.P., also a respected Twin Cities law firm with a national complex litigation practice. 10 Although the Clinic s student attorneys played a valuable role in the litigation, experienced class action counsel were essential in this case, given the nature of the defendant (a global computer manufacturer) and the quality of the lawyers on the other side. Defendant s counsel, K&L Gates LLP and Dykema Gosset PLLC, are both national defense firms with highly skilled and experienced attorneys, including the lead attorneys here, Daniel J. Stephenson and Brian Melendez, both of whom have considerable experience in complex class action litigation. See

17 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 17 of Class Counsel Have Invested a Substantial Amount of Time and Labor in This Matter Although this matter was resolved relatively early in the litigation process, Class Counsel invested a substantial amount of time on the case. Among other things, Class Counsel: (1) undertook a significant factual investigation of Lenovo s sales practices and a thorough analysis of the different theories of liability and damages; (2) drafted and filed a comprehensive Complaint and Amended Complaint; (3) consulted with Plaintiff throughout the case; (4) served Lenovo with informal discovery requests for mediation purposes; (5) reviewed the documents and class data produced by Lenovo; (6) consulted with an outside expert; (7) prepared a mediation statement; (8) traveled to San Francisco for mediation; (9) negotiated a comprehensive class action settlement agreement; (10) prepared the exhibits to the settlement agreement; (11) solicited bids from several potential claims administrators; (12) communicated with the selected Claims Administrator throughout the notice and claims process; (13) drafted and filed the motion for preliminary approval of the Settlement and supporting papers; and (14) drafted and filed the instant motion. Richter Decl. 29. To date, Class Counsel has expended more than 1,200 hours investigating, litigating, and settling this case. Id. 31. The value this time, on a lodestar basis, is more than $455,000. Id. Moreover, it is anticipated that Class Counsel will perform additional work going forward, including (1) preparing a motion for final approval; (2) appearing at the final approval hearing, (3) fielding ongoing class member inquiries, and (4) monitoring the settlement administration process and the distribution of settlement 17

18 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 18 of 22 payments. Id. 30. Thus, Class Counsel s lodestar will approach half a million dollars through the end of the litigation and the settlement administration process. Given the contingent nature of the representation (which entailed a risk of non-payment for these services), the requested fee of $750,000 is reasonable in light of the work performed. See infra at The Reaction of the Class has Been Highly Positive The reaction of the Settlement Class to the Settlement also supports the requested fee. Out of more than a quarter million Settlement Class Members who were sent a Settlement Notice, not a single one has objected to the Settlement or the proposed attorneys fees as of the date of this filing. That this sizeable class did not give rise to a single objection on the fees request further justifies the full award. Pinto v. Princess Cruise Lines, Ltd., 513 F.Supp.2d 1334, 1340 (S.D. Fla. 2007); see also In re Xcel Energy, 364 F.Supp.2d at 999 (lack of objections is strong evidence of the propriety and acceptability of fee request) (quoting Ressler v. Jacobson, 149 F.R.D. 651, 656 (M.D. Fla. 1992)). 7. The Requested Fee Percentage is Well Within the Range Commonly Awarded in Similar Cases Finally, the requested attorneys fees fall within the range of reasonable awards. As noted above, In the Eighth Circuit, courts have routinely awarded attorney fees ranging from 25% to 36% of a common fund under the percentage-of-the-fund method. Yarrington, 697 F.Supp.2d at 1061; see also In re U.S. Bancorp Litig., 291 F.3d 1035, 1038 (8th Cir. 2002) ( we find no abuse of discretion in the district court s awarding 36% 18

19 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 19 of 22 to class counsel who obtained significant monetary relief on behalf of the class ). Here, Plaintiffs are seeking just 6% of the amount made available to the class. B. A Lodestar Crosscheck Supports the Fee Request While not required, courts in the Eighth Circuit may conduct a lodestar crosscheck to ensure that the percentage-of-the-benefit award is not unreasonable. See Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1157 (8th Cir. 1999) (declining to apply lodestar crosscheck, but noting that use of the lodestar approach is sometimes warranted to double-check the result of the percentage of the fund method ). The lodestar cross-check need entail neither mathematical precision nor bean counting but instead is determined by considering the unique circumstances of each case. In re Xcel Energy, 364 F.Supp.2d at 999. In connection with the lodestar cross check, it is well-recognized that counsel who perform work on a contingent-fee basis are entitled to a reasonable multiplier, to account for the risk of nonpayment. See In re Flight Trasp. Corp. Secs. Litig., 685 F.Supp. 1092, 1096 (D. Minn. 1987) ( The fact that counsel for the plaintiff classes prosecuted this case on a contingent fee basis warrants a multiplier of the lodestar. ). The resulting multiplier need not fall within any pre-defined range, so long as the court's analysis justifies the award, such as when the multiplier is in line with multipliers used in other cases. In re Xcel Energy, 364 F.Supp.2d at 999. An analysis of the applicable case law reveals that Courts in this District have approved multipliers ranging from 1.3 to 6.5. See Zilhaver, 646 F.Supp.2d at 1079 (D. Minn. 2009) (1.3); In re Workers Comp. Ins. Antitrust Litig., 771 F.Supp 284 (D. Minn. 19

20 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 20 of ) (2.5); In re St. Paul Travelers Sec. Litig., 2006 WL (D. Minn. April 25, 2006) (3.9); In re Xcel Energy, 364 F.Supp.2d 980 (4.7); Hashw, 182 F.Supp.3d 935 (5.95); In re UnitedHealth Group Inc. PSLRA Litig., 643 F.Supp.2d 1094 (D. Minn. 2009) (6.5). Here, the requested fee would result in a multiplier of approximately 1.65, which is at the lower end of the range. 11 This is clearly reasonable. As the Eighth Circuit held earlier this year, a multiplier of less than two is below the range of multipliers commonly accepted in other cases and well within the range of multipliers awarded in this circuit. Caligiuri, 855 F.3d at 866 (quotation omitted). III. CLASS COUNSEL S REQUEST FOR REIMBURSEMENT OF OUT-OF-POCKET LITIGATION EXPENSES SHOULD BE GRANTED Finally, the Court also should approve Class Counsel s requested costs and expenses. Rule 23 expressly allows the Court to award nontaxable costs that are authorized by the parties agreement. Fed. R. Civ. P. 23(h). These costs commonly include things like photocopying, postage, messenger services, document depository, telephone and facsimile charges, filing and witness fees, computer-assisted legal research, expert fees and consultants, and meal, hotel, and transportation charges for outof-town travel. In re Xcel Energy, 364 F.Supp.2d at Here, the Settlement Agreement provides that Lenovo will reimburse Class Counsel for all costs and expenses incurred by Class Counsel in this Action. ECF No. 29-1, 35. To date, Class Counsel have incurred $16, in out-of-pocket costs, 11 The requested $750,000 fee results in a multiplier of 1.65 based on Class Counsel s current lodestar ($455,166). The multiplier will be 1.5 if Class Counsel s lodestar reaches $500,000 through the conclusion of the case and settlement administration. 20

21 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 21 of 22 primarily for computer-assisted legal research, professional consultants, and out-of-town travel. See Richter Decl. 36. These amounts are exceedingly reasonable for class action litigation such as this, and should be approved by the Court. See, e.g., Keslar v. Bartu, 201 F.3d 1016, 1017 (8th Cir. 2000) (per curiam) (finding no abuse of discretion in $17,000 cost award when case settled for $70,000). CONCLUSION For the foregoing reasons, pursuant to the terms of the Parties Settlement Agreement and Fed. R. Civ. P. 23(h) and 54(d)(2), Plaintiff Katherine Ponce and Class Counsel respectfully request that the Court enter an Order approving the following payments: (1) $5,000 to Plaintiff as a class representative service award; (2) $750,000 in attorneys fees to Class Counsel; and (3) $16, to Class Counsel as reimbursement of litigation expenses, all to be paid by Defendant Lenovo. Respectfully Submitted, Dated May 30, 2017 NICHOLS KASTER, PLLP 21 /s/ Kai Richter Kai Richter (# ) krichter@nka.com Brock J. Specht (# ) bspecht@nka.com 4600 IDS Center 80 South 8th Street Minneapolis, MN Telephone: (612) Facsimile: (612) UNIVERSITY OF MINNESOTA LAW SCHOOL CONSUMER PROTECTION CLINIC Prentiss Cox (# )

22 CASE 0:16-cv JNE-SER Document 45 Filed 05/30/17 Page 22 of 22 Haynes Hansen, Certified Student Attorney th Ave. S. Minneapolis, MN Telephone: (612) MICHAEL VANSELOW, ESQ. Michael Vanselow (# ) 6933 Black Duck Drive Lino Lakes, MN Telephone: (612) Counsel for Plaintiff and the Settlement Class 22