USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 1 of 19

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1 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 1 of 19 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA SOUTH BEND DIVISION In re FEDEX GROUND PACKAGE SYSTEM, INC., EMPLOYMENT PRACTICES LITIGATION THIS DOCUMENT RELATES TO: John Humphreys, et al. v. FedEx Ground Package System, Inc., Civil No. 3:05-cv RLM-CAN (TX Case No. 3:05-MD-527-RM (MDL 1700 Judge Robert L. Miller Jr. MEMORANDUM OF LAW IN SUPPORT OF UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF PROPOSED TEXAS CLASS ACTION SETTLEMENT

2 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 2 of 19 TABLE OF CONTENTS I. PROCEDURAL AND FACTUAL BACKGROUND... 1 II. THE PROPOSED SETTLEMENT AGREEMENT... 4 III. ARGUMENT... 7 A. The Standard For Preliminary Approval Of The Settlement The Strength of Plaintiffs Case Compared to the Terms of the Proposed Settlement Opinion of Competent Counsel IV. CONCLUSION i

3 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 3 of 19 Cases TABLE OF AUTHORITIES Page(s Alexander v. FedEx Ground Package Sys. Inc., 765 F.3d 981 (9th Cir Anderson v. Torrington Co., 755 F. Supp. 834 (N.D. Ind , 11 Armstrong v. Bd. of School Dist. of City of Milwaukee, 616 F.2d 305 (7th Cir overruled on other grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir , 12 Carlson v. FedEx Ground Package Sys., Inc., 787 F.3d 1313 (11th Cir Craig, et al. v. FedEx Ground Package System, Inc., 335 P.3d 66 (Kan Durbin v. Culberson County, 132 S.W.3d 650 (Tex. App Fortune Prod. Co. v. Conoco, 52 S.W.3d 671 (Tex Gautreaux v. Pierce, 690 F.2d 616 (7th Cir Gray v. FedEx Ground Package Sys., Inc., 799 F.3d 995 (8th Cir Gregory v. FedEx Ground Package Sys., Inc., No. 2:10-cv-630, 2012 WL (E.D. Va. May 9, In re FedEx Ground Package Sys., Inc., Employment Practices Litig., 381 F.Supp.2d 1380 (J.P.M.L In re General Motors Corp. Engine Interchange Litig., 594 F.2d 1106 (7th Cir. 1979, cert. denied, 444 U.S. 870 ( , 12, 13 In re Telectronics Pacing Systems, Inc., 137 F. Supp. 2d 985 (S.D. Ohio Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of America, 341 S.W.3d 323 (Tex ii

4 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 4 of 19 Kaufman v. American Express Travel Related Services, Co., No. 07-cv-1707, 2016 WL Mars Steel Corp. v. Continental Illinois Nat l Bank and Trust Co. of Chicago, 834 F.2d 677 (7th Cir Reynolds v. Beneficial National Bank, 288 F.3d 277 (7th Cir Slayman v. FedEx Ground Package Sys., Inc., Nos. 3:05-cv-1127, 3:07-cv-818, 2012 WL (D. Or. May 25, Slayman v. FedEx Ground Package Sys. Inc., 765 F.3d 1033 (9th Cir (Oregon...8 Swift v. Direct Buy, Inc., No. 2:11-cv-401, 2013 WL (N.D. Ind. Oct. 24, , 13 Synfuel Techs., Inc. v. DHL Express (USA, Inc., 463 F.3d 646 (7th Cir , 8 Williams v. Rohm & Haas Pension Plan, 658 F.3d 629 (7th Cir Wong v. Accretive Health, Inc., 773 F.3d 859 (7th Cir , 8, 12 Zolkos v. Scriptfleet, Inc., No. 12-cv-8230, 2014 WL (N.D. Ill. Dec. 12, Statutes 28 U.S.C iii

5 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 5 of 19 Named Plaintiffs John Humphreys, David Meredith, Jeffrey Quebe, Tim Mershon and Charles Campbell ( Named Plaintiffs submit this brief in support of Plaintiffs Unopposed Motion for Preliminary Approval of Class Action Settlement. The settlement obtained in this case was reached after years of vigorous litigation, including a pending appeal to the Seventh Circuit Court of Appeals, and is the result of extensive arms-length negotiations with the assistance of a skilled neutral mediator. The settlement reached is well within the range of reasonableness sufficient for this Court to preliminarily approve the settlement and to order that the settlement class receive notice of their rights and the benefits of the settlement. Plaintiffs are confident this Court will ultimately find the settlement is fair, reasonable and adequate. For the reasons stated below and in the Omnibus Memorandum of Law submitted herewith, Plaintiffs ask the Court to preliminarily approve the settlement, order that Notice be issued in accordance with the plan presented below, and schedule a hearing on final approval of the settlement. I. PROCEDURAL AND FACTUAL BACKGROUND This action was commenced on March 4, 2005 in the United States District Court for the Western District of Texas by the Named Plaintiffs on behalf of a putative class against FedEx Ground Package System, Inc. ( FXG. Joint Declaration of Co-Lead Counsel, ( Joint Decl., filed herewith, 4. FXG employs thousands of drivers to pick up and deliver packages nationwide. As a condition of employment, each FXG Driver is required to execute a contract with FXG, known as the FedEx Ground Pickup and Delivery Contractor Operating Agreement ( OA. The OA classifies the Drivers as independent contractors, but grants FXG substantial rights to control the manner and means of their work. It requires that Drivers provide daily package pick-up and delivery service to FXG customers on assigned routes, wearing FXG uniforms, driving FXG-branded trucks, using FXG scanners, and following FXG work methods. 1

6 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 6 of 19 In their Complaint, Plaintiffs asserted common law claims of rescission and unjust enrichment, premised on the allegation that FXG improperly classified its pick-up and delivery drivers as independent contractors rather than employees. Joint Decl., 4. On August 10, 2005, the Judicial Panel on Multidistrict Litigation found that a number of putative class actions challenging FXG drivers independent contractor status, including the Texas action, involved common questions, consolidated them into a multidistrict litigation ( MDL docket, and transferred them pursuant to 28 U.S.C to this Court for coordinated pretrial proceedings. See In re FedEx Ground Package Sys., Inc., Employment Practices Litig., 381 F.Supp.2d 1380 (J.P.M.L All of these transferred cases are referred to collectively as the Class Cases. Joint Decl., 4. As described in the Omnibus Memorandum, following transfer, this Court designated Co-Lead Counsel for Plaintiffs in all of the Class Cases for purposes of all pretrial proceedings. MDL Doc. No. 52. Joint Decl., 5. Following extensive written discovery, depositions and expert work, Co-Lead Counsel, with the assistance of many local counsel in the Class Cases (together MDL Counsel prepared class certification motions for all of the Class Cases. On April 23, 2007, the Texas Plaintiffs filed a motion for class certification. This Court granted the motion on March 25, 2008, certifying the following Class pursuant to Federal Rule of Civil Procedure 23(b(3: All persons who: 1 entered or will enter into a FXG Ground or FXG Home Delivery form Operating Agreement (now known as form OP-149 and form OP-149 RES; 2 drove or will drive a vehicle on a full-time basis (meaning exclusive of time off for commonly excused employment absences since March 6, 2001, to provide package pick-up and delivery services pursuant to the Operating Agreement; and 3 were dispatched out of a terminal in the state of Texas. 2

7 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 7 of 19 MDL Doc. No This Court certified the claims for rescission, unjust enrichment, and declaratory relief. Joint Decl., 6. The Court appointed Co-Lead Counsel as Class Counsel for the Texas Class and approved Class Notice on May 12, MDL Doc. No Notice was promptly sent out to 1740 Class members, 19 of whom opted out. Joint Decl., 7. On April 25, 2008, the parties filed cross-motions for summary judgment on the question of whether the Class members had been properly classified as independent contractors. On December 13, 2010, this Court ruled on the Texas summary judgment motions. MDL Doc. No In that order, this Court found Plaintiffs and the Class were independent contractors as a matter of law for purposes of their certified claims, resulting in the dismissal of those claims. Joint Decl., 8. Plaintiffs filed a timely appeal in the U.S. Court of Appeals for the Seventh Circuit. The Seventh Circuit stayed the Texas action while it certified two questions addressing Kansas Plaintiffs employment status under Kansas law to the Supreme Court of Kansas, which accepted the certified questions in January In October 2014, the Kansas Supreme Court issued its opinion on the certified questions, holding that Plaintiffs were employees for purposes of the Kansas Wage Payment Act and their other common law claims. Craig, et al. v. FedEx Ground Package System, Inc., 335 P.3d 66, (Kan As discussed in more detail in the Omnibus Memorandum, after remand of the Kansas action to this Court, the parties ultimately agreed to a process of mediation for each of the Class Cases, including Texas. The parties expressly agreed that each case would be mediated on its own merits and that the outcome of any one negotiation was not contingent upon nor did it affect any other negotiation. The parties 1 On April 4, 2008, this Court ordered that the class period in the class definition should not be open-ended, and ordered that the class notice be amended to include October 15, 2007 as the end date of the class period. MDL Doc. No

8 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 8 of 19 exchanged comprehensive mediation briefs and extensive data relating to Texas Plaintiffs compensation and potential damages arising from misclassification that were recoverable under Texas law. Joint Decl., The Texas mediation was scheduled to occur on February 11, Prior to that date, Plaintiffs received FXG s settlement offer and began extensive discussions and analysis of the offer vis a vis the potential risks and recovery. The parties mediated the Texas case over several days via teleconference, with extended calls with the mediator between February 11 and February 19, Co-Lead Counsel and Local Counsel participated in the mediation, and Named Plaintiffs were available by phone and consulted throughout the negotiation process. The parties finally reached a settlement in principle on February 19, 2016 as the result of a mediator s proposal. The parties subsequently entered into a Deal Point Memorandum, which formed the basis for the Settlement Agreement presented here for the Court s approval. II. THE PROPOSED SETTLEMENT AGREEMENT On June 14, 2016, the Parties formally entered into a comprehensive written Settlement Agreement (the Agreement, attached hereto as Exhibit A. The key provisions of the Agreement are as follows: FXG will pay the gross sum of $8,900,000 to resolve the class claims asserted in Plaintiffs Fourth Amended Complaint. The entirety of the Net Settlement Fund the total settlement amount after payment of attorney s fees, litigation costs, service payments to Named Plaintiffs who participated in the litigation, and settlement administration expenses will be distributed to the Class with no reversion to FXG. The parties have agreed that settlement checks will be issued to all members of the Texas Class after the notice period has closed without a claim form. The funds will be distributed through a qualified settlement fund ( QSF 4

9 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 9 of 19 and Rust Consulting will act as the settlement administrator. Costs of the class settlement notice and administration will be paid from the settlement fund. The $8,900,000 Class Settlement Fund will be allocated and distributed as follows: Approximately $5,966,000 of the Fund will be distributed to the Class ( the Net Settlement Fund ; Up to 30% for attorneys fees and costs (a maximum of $2,670,000; Settlement administration fees of approximately $65,000; Service awards totaling $75,000 (up to $15,000 for the five Class Representatives who were deposed; and A Reserve Fund of $89,000 (or 1% of settlement. The Net Settlement Fund will be distributed among the Class Members who meet the Class definition of a full-time driver, based on their pro rata weeks worked within the Class Period. All class members will receive a settlement payment of $19.51 for each workweek during which it appears, from FXG records, that they personally drove one of their FXG routes 35 or more hours, and a lower payment of $5.85 for workweeks in which they drove between 16 and 35 hours per week. Class members who, according to FXG records, did not personally drive more than 16 hours in any workweek during the recovery period will receive a flat minimum payment of $250 dollars. The average per class member recovery, net of costs for settlement administration and attorneys fees and costs, will be $3,938. The range of settlement payments will be between $250 and $13, Any unclaimed funds following the first distribution will be redistributed to the Class members on a pro rata basis based on their weeks worked within the Class Period. After the second round distribution, any uncashed checks will go to a cy pres fund to be mutually agreed upon by the parties. Joint Decl., 17, 27, 28. 5

10 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 10 of 19 Class Counsel will file their motion for approval of an award of attorney s fees and litigation costs of up to 30% of the settlement amount, subject to the filing of a fee motion in order to give the Class time to review the request prior to Court approval. Class Counsel will apply for service payments to the Named Plaintiffs who participated in the litigation of up to $15,000 each. Joint Decl., 29. In return for the above consideration to be provided by FedEx Ground, the settlement, if it receives final approval, will result in a general release by Named Plaintiffs and a release by all Class Members of all claims that were brought or which could have been brought in this action arising out of or relating to allegations of misclassification as independent contractors set forth in the Operative Complaint. Upon entry of the Final Approval Order, this action shall be dismissed with prejudice and all Released Claims shall be conclusively settled as to Plaintiffs and the Class Members. The proposed settlement is the product of arm s-length negotiations with a respected mediator and is fair and reasonable in light of the risks Plaintiffs and Class Members face in connection with continued litigation over liability, proof of damages and class membership, the length of the class period, and other defenses asserted by Defendant. Accordingly, Plaintiffs request that the Court (1 grant preliminary approval of the proposed settlement; (2 approve the form, content, and plan for distribution of the Notice; (3 appoint Rust Consulting as the Settlement Administrator; and (4 schedule a hearing regarding final approval of the proposed Settlement, attorneys fees and costs, and service payments to the Named Plaintiffs. FXG does not oppose Plaintiffs Motion and agrees with the proposed schedule for notice and case deadlines. 6

11 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 11 of 19 III. ARGUMENT A. The Standard For Preliminary Approval Of The Settlement The standard for preliminary approval of a class action settlement in the Seventh Circuit is set forth in Plaintiffs Omnibus Memorandum of Law, incorporated herein. Below, Plaintiffs address two of the five factors relevant to the Court s analysis of whether the settlement is fair and adequate: (1 the strength of plaintiffs case compared to the terms of the proposed settlement; and (4 the opinion of competent counsel. The second, third and fifth factors and other considerations relevant to the Court s preliminary approval analysis are detailed in Plaintiffs Omnibus Memorandum. 1. The Strength of Plaintiffs Case Compared to the Terms of the Proposed Settlement The Seventh Circuit has held that the most important factor relevant to the fairness of a class action settlement is the strength of plaintiff s case on the merits balanced against the amount offered in the settlement. Wong v. Accretive Health, Inc., 773 F.3d 859, (7th Cir. 2014; Synfuel Techs., Inc. v. DHL Express (USA, Inc., 463 F.3d 646, 653 (7th Cir. 2006; Armstrong v. Bd. of School Dist. of City of Milwaukee, 616 F.2d 305, 313 (7th Cir overruled on other grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998; In re General Motors Corp. Engine Interchange Litig., 594 F.2d 1106, 1132 (7th Cir. 1979, cert. denied, 444 U.S. 870 (1979. A court cannot make an informed judgment about the fairness, reasonableness, and adequacy of a class without assessing the likelihood and value to the class of the case s possible outcomes, referred to as the net expected value of the litigation. See Wong, 773 F.3d at 863; see also Williams v. Rohm & Haas Pension Plan, 658 F.3d 629, 634 (7th Cir (citing Synfuel Techs., Inc., 463 F.3d at 653; Reynolds v. Beneficial National Bank, 288 F.3d 277, (7th Cir (in analyzing this factor, courts should attempt to quantify the net expected 7

12 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 12 of 19 value of continued litigation to the class... Determining that value would require estimating the range of possible outcomes and ascribing a probability to each point on the range. ; Mars Steel Corp. v. Continental Illinois Nat l Bank and Trust Co. of Chicago, 834 F.2d 677, 682 (7th Cir ( A settlement is fair to the plaintiffs in a substantive sense... if it gives them the expected value of their claim if it went to trial, net of the costs of trial ; Wong, 773 F.3d at 863. While a high degree of precision cannot be expected in valuing a litigation, the court should nevertheless insist that the parties present evidence that would enable possible outcomes to be estimated, so that the court can at least come up with a ballpark valuation. Synfuel Techs., Inc., 463 F.3d at 653 (citing Reynolds. While the court must avoid conducting a trial on the merits in evaluating this factor, the court should make an independent determination of the strengths of the plaintiffs case weighed against the terms of the settlement. Anderson v. Torrington Co., 755 F. Supp. 834, 838 (N.D. Ind Plaintiffs appeal of the ruling holding them to be independent contractors is pending before the Seventh Circuit and the outcome of that appeal is not certain. To date, the Kansas Supreme Court and the Court of Appeals for the Ninth Circuit 2 have concluded that FXG drivers are employees as a matter of law under the common law employment tests in Kansas, California and Oregon. The Eleventh and Eighth Circuits have held that, under Florida and Missouri law, FXG drivers employment status cannot be determined as a matter of law and must be resolved at trial. 3 Unlike the law in many states, Texas law indicates that the contractual recitations of independent contractor status give rise to a presumption of independent contractor status and may even be determinative of the question. See Durbin v. Culberson County, 132 S.W.3d 650, 2 See Alexander v. FedEx Ground Package Sys. Inc., 765 F.3d 981 (9th Cir (California law; Slayman v. FedEx Ground Package Sys. Inc., 765 F.3d 1033 (9th Cir (Oregon. 3 See Carlson v. FedEx Ground Package Sys., Inc., 787 F.3d 1313 (11th Cir (Florida law; Gray v. FedEx Ground Package Sys., Inc., 799 F.3d 995 (8th Cir (Missouri law. 8

13 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 13 of (Tex. App (citing Newspapers, Inc. v. Love, 380 S.W.2d 582 (Tex (holding that an agreement providing that a person shall be an independent contractor and providing no right of control is controlling in determining the relationship between the parties.. While Plaintiffs believe FXG s reservation of control could overcome this label, Plaintiffs recognize a comparatively increased risk relating to the issue of employment status under Texas law as opposed to the law in the majority of jurisdictions. While Plaintiffs believe there is some likelihood they would prevail in overturning the adverse summary judgment under Texas law, it is also possible that the judgment could be affirmed on appeal. And, in any event, under Texas precedent, Plaintiffs would ultimately need to try the threshold employment status issue to a jury and overcome the presumption of independent contractor status that the Court could apply in their case. Because of the lack of a statutory remedy in Texas, the only claims certified for the Texas Plaintiffs were rescission and unjust enrichment. Plaintiffs theory is that the OA should be rescinded on the basis that it is void as against public policy because its various provisions contravened Texas law, particularly the Texas Workers Compensation Act. 4 Plaintiffs and their damages expert calculated the maximum achievable recovery to be $33,340,000 (exclusive of interest which FXG strenuously argued at mediation is not available due to the lack of a sum certain under this theory, representing the difference between what Plaintiff drivers received in net compensation (after all deductions had been taken by FXG pursuant to the OA and the compensation paid by FXG s sister company, FedEx Express, to its employee drivers during the same time period for performing substantially similar work. Of course, this maximum assumes 4 Like most jurisdictions, Texas law holds that when a valid express contract covers the subject matter of the parties dispute, there can be no recovery under a quasi-contract theory, such as unjust enrichment. Fortune Prod. Co. v. Conoco, 52 S.W.3d 671, 684 (Tex

14 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 14 of 19 the ultimate failure of all FXG s defenses and arguments, albeit after vigorous, expensive motion practice, expert analysis and discovery, and a trial. FXG raised a variety of common law defenses to these claims, including (1 severability of any offending provisions of the OA; (2 delay in seeking rescission or avoidance; (3 inability to return the parties to the status quo; and (4 set-off of any benefits Plaintiffs received under the OA. While Texas law is not fully developed on the question of what constitutes a reasonable time within which to seek rescission, it (unlike some other states does require a defendant asserting unreasonable delay to show some prejudice resulting from the delay. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of America, 341 S.W.3d 323, 344 (Tex Nevertheless, Plaintiffs had to acknowledge that FXG had succeeded in asserting these common law defenses against rescission/unjust enrichment claims in other states. 5 As a result, Plaintiffs considered the risk that their claims for rescission and unjust enrichment could be dismissed upon continued litigation. In addition, Plaintiffs considered the prospect that even if they prevail on their common law claims they could well recover less than the maximum damages. First, FXG disputed several of the core assumptions underlying Plaintiffs damages computation, and offered expert testimony to show that even if FXG lost on all its affirmative defenses and Plaintiffs succeeded on their claims - the maximum Plaintiffs could recover was between $5.85 and $6.9 million 5 FXG succeeded in dismissing Plaintiffs common law rescission/unjust enrichment claims in four similar cases that were either remanded out of the MDL or filed after the MDL docket concluded. See Slayman v. FedEx Ground Package Sys., Inc., Nos. 3:05-cv-1127, 3:07-cv-818, 2012 WL (D. Or. May 25, 2012 (dismissing claim for rescission under Oregon law and summarizing dismissals of rescission claims in Maine, Massachusetts and Michigan actions. Plaintiffs in the Virginia action did obtain an initial denial of FXG s motion to dismiss this claim. Gregory v. FedEx Ground Package Sys., Inc., No. 2:10-cv-630, 2012 WL (E.D. Va. May 9,

15 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 15 of 19 dollars. Plaintiffs disagreed with this analysis but had to consider the risk that that the court or a jury could find otherwise, putting at risk more than 80% of their claimed damages. Finally, FXG intended to bring a motion to decertify the class for the first five years of the class period on the ground that there are no accessible records to show which putative class members met the full time driving requirement during this time frame. Plaintiffs believe that a defendant is not permitted to use its own lack of record keeping as a basis to decertify a class, and that FXG had the ability to make this argument prior to certification and waived it. However, the lack of evidence is a risk to class cohesiveness through trial, counseling in favor of this settlement. FXG also intended to file motions to cut off the liability period at December 2010 on the basis that it made substantial changes to its business model, and to exclude from the class persons who assigned their contracts to incorporated entities after the class was initially certified on the basis that the incorporated entities do not meet the class definition. If FXG were to succeed on any one of these defenses its liability to the class could be reduced by 40-50%; it were to succeed on more than one of these defenses, its liability to the class could be reduced by 60% or more. The negotiated class settlement of $8,900,000 was the result of a mediator s proposal and represents 27% of the maximum achievable recovery of $33,340,000 as calculated by Plaintiffs expert. In light of the substantial risks posed by this case as describe above, the settlement exceeds the net estimated value of continued litigation and is entitled to preliminary approval. 4. Opinion of Competent Counsel In evaluating the fairness of the proposed settlement, courts are entitled to rely heavily on the opinion of competent counsel. Gautreaux v. Pierce, 690 F.2d 616, 634 (7th Cir (quoting Armstrong, 616 F.2d at 325; Anderson, 755 F. Supp. at 846 (same; Swift v. Direct Buy, Inc., No. 2:11-cv-401, 2013 WL , at *5 (N.D. Ind. Oct. 24, 2013 (court found it 11

16 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 16 of 19 appropriate to place significant weight on the opinion of counsel in concluding that the Settlement is reasonable in light of the value of further litigation.. As the Seventh Circuit has stated: While the court, of course, should not abdicate its responsibility to review a class action settlement merely because counsel support it, the court is entitled to rely heavily on the opinion of competent counsel... Counsel for the plaintiff class and counsel for the defendants had been extensively involved in the litigation through virtually all of its history, giving the court ample time to evaluate their competence and the weight to be accorded their opinions... [S]ettlement of this litigation was reached at a very late stage, after the issues had been clearly identified, liability and impact had been decided, and a massive record had been compiled. The district court found, and we agree, that the litigation had progressed to a point at which counsel and the court were fully capable of evaluating the merits of plaintiffs case and the probable course of future litigation. Armstrong, 616 F.2d at 325. See In re Telectronics Pacing Systems, Inc., 137 F. Supp. 2d 985, 1016 (S.D. Ohio 2001 ( The Court should always give significant weight to the belief of experienced Counsel that the settlement is in the best interest of the class.. In addition to the opinion of counsel, the court must consider whether the class members were properly represented by their counsel and class representatives. In re General Motors Corp. Engine Interchange Litig., 594 F.2d The opinions of counsel are especially reliable when the proposed settlement is the result of arm s-length negotiations with an experienced mediator. See Wong, 773 F.3d at 864 (district court did not abuse its discretion in approving settlement where the settlement was reached through extensive arm s-length negotiations with an experienced third-party mediator. ; Zolkos v. Scriptfleet, Inc., No. 12-cv-8230, 2014 WL , at *2 (N.D. Ill. Dec. 12, 2014 (preliminary approval granted where two experienced class action employment mediators, Mark Rudy and Michael E. Dickstein, assisted the parties with the settlement negotiations and presided 12

17 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 17 of 19 over two full-day mediations. ; Swift, 2013 WL , at *4 ( An agreement was reached only after extensive arm s-length negotiations during three days of in-person formal mediation. ; Kaufman v. American Express Travel Related Services, Co., No. 07-cv-1707, 2016 WL , **9-10 (N.D. Ill. Mar. 2, In addition to the opinion of counsel, the court must consider whether the class members were properly represented by their counsel and class representatives. In re General Motors Corp. Engine Interchange Litig., 594 F.2d Here, the Plaintiffs and FXG undertook lengthy telephonic mediation over the course of multiple days with an experienced class action employment mediator, Michael Dickstein. The parties reached the Agreement not only after arm s-length negotiations with a qualified mediator, but also after significant investigation and discovery, as well as mediation briefing, that enabled Class Counsel to evaluate on an informed basis the claims and defenses in this case. Consequently, Class Counsel is well aware of the strengths and weaknesses of Plaintiffs claims. As discussed above, Class Counsel thoroughly analyzed and researched the legal claims in the Texas case under the common law governing their rescission and unjust enrichment theories. In formulating their settlement position and ultimate decision to accept the settlement, Class Counsel carefully considered the likelihood of success on certain issues and the risk of loss on other issues. Counsel considered the court in the transferee district, the jury pool, and the potential ways that each would view this case. Counsel considered the risk on employment status, of dismissal on a motion to dismiss the substantive claims, and the issues that would likely be tried. Counsel also considered the length of time in which the litigation could proceed to a final judgment or verdict compared to the value to the Class of receiving the settlement funds now, particularly in light of the length of time that this case already has been pending. 13

18 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 18 of 19 The settlement obtained was an amount proposed by the mediator after several days of continued negotiations. The settlement met with the approval of Co-Lead Counsel and Local Counsel who actively participated in the mediation. All Counsel agreed after engaging in the thorough analysis described above, that the settlement obtained was in the best interests of the Class and represents, in terms of the percentage of the total possible damages, a good result for the Texas Class compared to the risk of loss of continued litigation. Because the settlement, in the opinion of Class Counsel, was fair, adequate and reasonable, it should be approved. Joint Decl., 37. IV. CONCLUSION For the foregoing reasons, the Parties respectfully request that the Court grant their motion and enter the proposed Order Granting Preliminary Approval to Class Action Settlement in the Texas case, Humphreys v. FedEx Ground Package Sys., Inc. Dated: June 15, 2016 Respectfully submitted, LOCKRIDGE GRINDAL NAUEN P.L.L.P. s/ Susan E. Ellingstad Susan E. Ellingstad 100 Washington Avenue South, Suite 2200 Minneapolis, MN Tel: ( Fax: ( seellingstad@locklaw.com 14

19 USDC IN/ND case 3:05-md RLM-CAN document 2672 filed 06/15/16 page 19 of 19 Beth A. Ross LEONARD CARDER, LLP 1330 Broadway, Suite 1450 Oakland, CA Tel: ( Fax: ( Robert I. Harwood Matthew M. Houston HARWOOD FEFFER LLP 488 Madison Avenue, 8th Floor New York, NY Tel: ( Fax: ( Plaintiff s Co-Lead Counsel Donald R. Taylor Jennifer Tatum Lee TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue, Suite 1050 Austin, TX Tel: ( Fax: ( dtaylor@taylordunham.com jtatum@taylordunham.com Plaintiffs Co-Counsel 15