Case 2:12-cv MCA-MAH Document 224 Filed 01/22/18 Page 1 of 2 PageID: 3368

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1 Case 2:12-cv MCA-MAH Document 224 Filed 01/22/18 Page 1 of 2 PageID: 3368 James E. Cecchi Lindsey H. Taylor Donald A. Ecklund CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO P.C. 5 Becker Farm Road Roseland, New Jersey (973) Jonathan Shub KOHN SWIFT & GRAF, LLP One South Broad Street Suite 2100 Philadelphia, Pennsylvania (215) Christopher A. Seeger Parvin K. Aminolroaya SEEGER WEISS LLP 55 Challenger Road, 6th Fl. Ridgefield Park, New Jersey (973) Attorneys for Plaintiffs and the Proposed Settlement Class UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY In re AZEK BUILDING PRODUCTS, INC. MARKETING AND SALES PRACTICES LITIGATION Civil Action No. 2:12-cv-6627 MDL Docket No NOTICE OF MOTION FOR FINAL APPROVAL OF SETTLEMENT, AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF EXPENSES, AND PAYMENT OF INCENTIVE AWARDS To: All Counsel via ECF COUNSEL: PLEASE TAKE NOTICE that at such date and time as the Court shall determine, Plaintiffs, through their undersigned counsel, shall move before the Hon. Madeline Cox Arleo, U.S.D.J. at the Martin Luther King Building & U.S. Courthouse, 50 Walnut Street, Newark, New Jersey, pursuant to Rule 23 of the Federal Rules of Civil Procedure, for (i) entry of a judgment

2 Case 2:12-cv MCA-MAH Document 224 Filed 01/22/18 Page 2 of 2 PageID: 3369 finally certifying the Settlement Class and approving the Settlement as fair, reasonable, and adequate; (ii) awarding attorneys fees and reimbursement of expenses; and (iii) authorizing the payment of incentive awards. PLEASE TAKE FURTHER NOTICE that, in support of the motion, the undersigned intends to rely upon the accompanying Memorandum of Law and Declaration of James E. Cecchi and the exhibits thereto. PLEASE TAKE FURTHER NOTICE that a proposed Order granting the requested relief will be submitted with Plaintiffs reply papers. PLEASE TAKE FURTHER NOTICE that the undersigned hereby requests oral argument. Dated: January 22, 2018 Respectfully submitted, CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, P.C. By: /s/ James E. Cecchi JAMES E. CECCHI 2

3 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 1 of 71 PageID: 3370 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY IN RE AZEK DECKING SALES PRACTICES LITIGATION BRIEF IN SUPPORT OF FINAL APPROVAL OF SETTLEMENT, AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF EXPENSES, AND PAYMENT OF INCENTIVE AWARDS Jonathan Shub KOHN, SWIFT & GRAF, P.C. One South Broad Street 24th Floor Philadelphia, Pennsylvania (215) James E. Cecchi Lindsey H. Taylor CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO P.C. 5 Becker Farm Road Roseland, New Jersey (973) Christopher A. Seeger SEEGER WEISS LLP 55 Challenger Road Ridgefield Park, New Jersey (973) Co-Lead Counsel for Plaintiffs and the Proposed Settlement Class

4 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 2 of 71 PageID: 3371 TABLE OF CONTENTS TABLE OF AUTHORITY... iii I. INTRODUCTION... 1 II. BACKGROUND... 2 The Litigation... 3 Settlement Negotiations... 5 The Terms of the Settlement... 6 D. Preliminary Approval and Class Notice... 7 ARGUMENT... 9 I. THE SETTLEMENT IS FAIR, REASONABLE, AND ADEQUATE, AND SHOULD BE APPROVED II. A. The Girsh Factors Weigh in Favor of Approval The Complexity, Expense, and Duration of Continued Litigation The Reaction of the Class to the Settlement The Stage of the Proceedings The Risks of Establishing Liability The Risks of Establishing Damages The Risks of Certifying and Maintaining a Litigation Class through Trial Defendant s Ability to Withstand Greater Judgment Reasonableness of the Settlement in Light of the Best Possible Recovery And All Attendant Risks Of Litigation B. The Relevant Prudential and Baby Products Factors Also Support Settlement C. Objections to the Settlement Do Not Warrant its Rejection The Aronson Objections Luttringer Objections Tignanelli Objections THE NOTICE PROGRAM IS CONSTITUTIONALLY SOUND AND FULLY IMPLEMENTED i

5 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 3 of 71 PageID: 3372 III. THE SETTLEMENT CLASS SHOULD BE CERTIFIED The Rule 23(a) Factors Are Met Numerosity Commonality Typicality Adequacy The Rule 23(b)(3) Factors Are Met Predominance Superiority IV. The Attorneys Fee Application Should Be Approved A. The Requested/Agreed Upon Attorneys Fees, Expenses, and Incentive Awards Should be Awarded B. The Requested Award Is Presumptively Fair and Reasonable Where that Award Will Not Diminish the Settlement Fund C. The Factors Governing Approval Of Attorneys Fees and Expenses Support The Requested Amount Class Counsel Obtained a Substantial Benefit for Settlement Class Members Class Counsel Brought This Matter to an Efficient Conclusion Class Counsel Undertook the Risk of Non-Payment Class Counsel Devoted Significant Time to This Case D. The Lodestar Cross-Check Supports That the Requested Fees and Expenses Are Fair and Reasonable E. The Class Representative Service Awards Should be Approved F. Class Counsels Expenses are Reasonable and Should Be Approved CONCLUSION ii

6 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 4 of 71 PageID: 3373 Federal Cases TABLE OF AUTHORITY Page(s) In re Am. Family Enters., 256 B.R. 377 (D.N.J. 2000)... 11, 12 In re Am. Inv rs Life Ins. Co. Annuity Mktg. & Sales Practices Litig., 263 F.R.D. 226 (E.D. Pa. 2009)... 30, 58 Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct (2013) In re Apple Computer, Inc. Deriv. Litig., 2008 WL (N.D. Cal. Nov. 5, 2008) In re AremisSoft Corp. Sec. Litig., 210 F.R.D. 109 (D.N.J. 2002) In re AT&T Corp., 455 F.3d 160 (3d Cir. 2006) Barel v. Bank of Am., 255 F.R.D. 393 (E.D. Pa. 2009) Bell Atlantic Corp. v. Bolger, 2 F.3d 1304 (3d Cir. 1993)... 9, 15, 50 Bernhard v. TD Bank, N.A., 2009 WL (D.N.J. 2009) Bezio v. Gen. Elec. Co., 655 F.Supp.2d 162 (N.D.N.Y. 2009)... 46, 58 Bredbenner v. Liberty Travel, Inc., 2011 WL (D.N.J. Apr. 8, 2011)... 10, 12, 17, 21 Careccio v. BMW of N. Am. LLC, No. CIV. A , 2010 WL (D.N.J. Apr. 29, 2010) iii

7 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 5 of 71 PageID: 3374 Carroll v. Stettler, No , 2011 U.S. Dist. LEXIS (E.D. Pa. Oct. 19, 2011) In re Cendant Corp. Sec. Litig., 109 F. Supp. 2d 235 (D.N.J. 2000), aff d 264 F.3d 201 (3d Cir. 2001)... 11, 15 In re CertainTeed Corp. Roofing Shingle Prods. Liab. Litig., 269 F.R.D. 468 (E.D. Pa. 2010)... 9, 20, 50 In re Chambers Dev. Sec. Litig., 912 F. Supp. 822 (W.D. Pa. 1995) City of Livonia Employees Ret. Sys. v. Wyeth, 2013 WL (S.D.N.Y. Aug. 7, 2013) Cohn v. Nelson, 375 F.Supp.2d. 844 (E.D. Mo. 2005) Matter of Cont l Ill. Sec. Litig., 962 F.2d 566 (7th Cir. 1992) DeHoyos v. Allstate Corp., 240 F.R.D. 269 (W.D. Tex. 2007) Dewey v. Volkswagen of Am., 728 F. Supp. 2d 546 (D.N.J. 2010)... 20, 54 Dupler v. Costco Wholesale Corp., 705 F.Supp.2d 231 (E.D.N.Y. 2010) Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir. 2010)... 9 Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974) In re First Capital Holdings Corp. Fin. Prod. Sec. Litig., 1992 WL (C.D. Cal. June 10, 1992), appeal dismissed for class member s lack of standing, 33 F.3d 29 (9th Cir.1994) iv

8 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 6 of 71 PageID: 3375 Gates v. Rohm & Haas Co., 248 F.R.D. 434 (E.D. Pa. 2008) Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975)...passim In re GMC Pick-Up Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (3rd Cir. 1995)...passim Gunter v. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir. 2000)... 49, 51, 52, 56 Hall v. AT&T Mobility LLC, 2010 WL (D.N.J. Oct. 13, 2010) Hensley v. Eckhart, 461 U.S. 424 (1983)... 44, 45 Hicks v. Stanley, No. 01 Civ (RJH), 2005 WL (S.D.N.Y. Oct, 24, 2005) In re Ikon Office Solutions, Inc., 194 F.R.D. 166 (E.D. Pa. 2000)... 22, 52 Ingram v. Coca-Cola Co., 200 F.R.D. 685 (N.D. Ga. 2001) In re Ins. Brokerage Antitrust Litig., 2007 WL (D.N.J. June 5, 2007), aff d, 579 F.3d 241 (3d Cir. 2009) Johnson v. Georgia Hwy. Exp., Inc., 488 F.2d 714 (5th Cir. 1974) Johnston v. HBO Film Mgmt., Inc., 265 F.3d 178 (3d Cir. 2001)... 38, 39 Lenahan v. Sears, Roebuck & Co., No. CIV , 2006 WL (D.N.J. July 24, 2006), aff d, 266 F. App x 114 (3d Cir. 2008) v

9 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 7 of 71 PageID: 3376 In re LG/Zenith Rear Projection Television Class Action Litig., No. CIV.A , 2009 WL (D.N.J. Feb. 18, 2009)... 13, 44, 46, 54 Liberty Lincoln Mercury, Inc. v. Ford Mktg. Corp., 149 F.R.D. 65 (D.N.J. 1993)... 36, 37 M. Berenson Co., Inc. v. Faneuil Hall Marketplace, Inc., 671 F. Supp. 819 (D. Mass. 1987) Marshall v. Nat l Football League, 787 F.3d 502 (8th Cir. 2015) McBean v. City of New York, 233 F.R.D. 377 (S.D.N.Y. 2006)... 46, 48, 49 McCoy v. Health Net, Inc., 569 F. Supp. 2d 448 (D.N.J. 2008) McDonough v. Toys R. Us, Inc., 80 F. Supp. 3d 626, (E.D. Pa. 2015)... 23, 24 In re Mercedes-Benz Antitrust Litig., 213 F.R.D. 180 (D.N.J. 2003) In re Merck & Co., Inc. Vytorin ERISA Litig., 2010 WL (D.N.J. Feb. 9, 2010) In re Mercury Interactive Corp. Sec. Litig., 2011 WL (N.D. Cal. Mar. 3, 2011) Mirakay v. Dakota Growers Pasta Co., Inc., 2014 WL (D.N.J. Oct. 20, 2014) Morris v. Affinity Health Plan, Inc., 859 F. Supp. 2d 611 (S.D.N.Y. 2012) Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950) Mulroy v. Nat l Water Main Cleaning Co. of New Jersey, No. CIV.A WJM, 2014 WL (D.N.J. Dec. 12, 2014) vi

10 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 8 of 71 PageID: 3377 Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154 (3d Cir. 2001) O Brien v. Brain Research Labs, LLC, 2012 WL (D.N.J. Aug. 9, 2012) Officers for Justice v. Civil Serv. Comm n, 688 F.2d 615 (9th Cir. 1982) In re PaineWebber Ltd. Partnerships Litig., 171 F.R.D. 104 (S.D.N.Y.), aff d, 117 F.3d 721 (2d Cir. 1997) Pennsylvania v. Del. Valley Citizens Council for Clean Air, 478 U.S. 546 (1986)... 55, 56 In re Pet Food Prod. Liab. Litig., 629 F.3d 333 (3d Cir. 2010) Phillips Petroleum Co. v. Schutts, 472 U.S. 797 (1985)... 32, 43 Pro v. Hertz Equipment Rental Corp., 2013 WL (D.N.J. June 20, 2013) In re Prudential Ins. Co. of Am. Sales Practice Litig., 106 F.Supp.2d 721 (D.N.J. 2000) In re Prudential Ins. Co. of Am. Sales Practices Litig., 962 F. Supp. 450 (D.N.J. 1997), aff d, 148 F.3d 283 (3d Cir. 1998)...passim In re Prudential-Bache Energy Income Partnerships Securities Litigation, 1994 WL (E.D. La. May 18, 1994) Reyes v. Netdeposit, LLC, 802 F.3d 469 (3d Cir. 2015) In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) Rivera v. Lebanon Sch. Dist., No. 1:11-CV-00147, 2013 WL (M.D. Pa. Aug. 20, 2013) vii

11 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 9 of 71 PageID: 3378 Rossi v. Procter & Gamble Co., 2013 WL (D.N.J. Oct. 3, 2013)... 44, 45, 54 In re Safety Components, Inc. Sec. Litig., 166 F. Supp. 2d 72 (D.N.J. 2001) In re Schering-Plough Corp. Enhance Sec. Litig., No. CIV.A DMC, 2013 WL (D.N.J. Oct. 1, 2013) Shaw v. Toshiba Am. Info. Sys., Inc., 91 F.Supp.2d 941 (E.D. Tex. 2000) In re Sony SXRD Rear Projection Television Class Action Litig., 2008 WL (S.D.N.Y. May 1, 2008) Stewart v. Abraham, 275 F.3d 220 (3d Cir. 2001) Stoetzner v. U. S. Steel Corp., 897 F.2d 115 (3d Cir. 1990) Sullivan v. DB Invs., 667 F.3d 273 (3d Cir. 2011) (en banc)... 10, 41 Sykes v. Harris, No. 09 CIV (DC), 2016 WL (S.D.N.Y. May 24, 2016)... 26, 27 Taft v. Ackermans, No. 02 Civ. 7951(PKL), 2007 WL (S.D.N.Y. Jan. 31, 2007) Varacallo v. Mass. Mutual Life Ins. Co., 226 F.R.D. 207 (D.N.J.2005)... 16, 42, 43 Vasco v. Power Home Remodeling Grp. LLC, No. CV , 2016 WL (E.D. Pa. Oct. 12, 2016) In re Warfarin Sodium Antitrust Litig., 212 F.R.D. 231 (D. Del. 2002), aff d 391 F.3d 516 (3d Cir. 2004) viii

12 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 10 of 71 PageID: 3379 In re Warfarin Sodium Antitrust Litig., 391 F.3d 516 (3d Cir. 2004)...passim In re Warner Communications Securities Litigation, 618 F. Supp. 735 (S.D.N.Y. 1985)... 52, 53 In re Whirlpool, 722 F.3d at In re WorldCom, Inc. Sec. Litig., 388 F. Supp. 2d 319 (S.D.N.Y. 2005) Zanghi v. Freightcar Am., Inc., No. CV 3:13-146, 2016 WL (W.D. Pa. Jan. 19, 2016) State Cases In re AXA Fin., Inc., 2002 WL (Del. Ch. May 22, 2002) Federal Statutes Class Action Fairness Act, 28 U.S.C Rules Rule passim Other Authorities MANUAL FOR COMPLEX LITIGATION, FOURTH (2004) MANUAL FOR COMPLEX LITIGATION, FOURTH (2004) ix

13 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 11 of 71 PageID: 3380 I. INTRODUCTION On August 23, 2017, this Court entered an Order Preliminarily Approving Class Action Settlement between Plaintiffs 1 and Defendants AZEK Building Products, Inc. and CPG International LLC 2 that preliminarily approved the Settlement Agreement 3 and conditionally certified the following Settlement Class for settlement purposes: all current residential owners of AZEK Decking in the United States who purchased AZEK Decking from August 1, 2007 through December 31, 2012 and who still own the property on which that deck is located. Dkt. 219, Preliminary Approval Order, 7. In doing so, the Court preliminarily determined that the Settlement a hard-fought compromise that was the 1 The Named Plaintiffs in this litigation are: Daniel Berkowitz, Mel Beucler, Barbara Derwich, John Edmonds, Joseph Marino, Kevin Mayhew, Christine Merriam, Joseph Solo, and Jeffrey Wayne. (collectively, the Named Plaintiffs, Plaintiffs, or Class Representatives ). 2 After Plaintiffs filed their Consolidated Amended Complaint, AZEK Building Products, Inc. and CPG International Inc. (now CPG International LLC) underwent a corporate restructuring. Dkt For simplicity, CPG shall be used to refer to the entity that designed, manufactured, warranted, advertised, and sold AZEK decking. 3 The Settlement Agreement is attached as Exhibit A to the July 14, 2017 Declaration of James A. Cecchi, and was previously filed with the Court. Dkt All capitalized terms herein have the same meaning as set forth in the Settlement Agreement. 1

14 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 12 of 71 PageID: 3381 culmination of extensive, adversarial, arms -length negotiations following extensive litigation falls well within the range of reason. Id. at 5. In light of the favorable reaction of the Class, the benefits made available by the Settlement, and to avoid the burden, expense, inconvenience, and uncertainty of continued litigation, Plaintiffs now ask the Court to grant final approval to the Settlement. CPG has stated that it joins in requesting final approval and agrees that the Class is properly certifiable for purposes of settlement. It is in the best interest of the Class to resolve and settle this litigation. Tellingly, although Plaintiffs submit that there are thousands of class members and there have been thousands of unique visits to the settlement website, only three have opted out of the settlement and only three other objections have been received. 4 Accordingly, this Court should grant final approval to the Settlement and direct that the benefits be provided to the Class. II. BACKGROUND The Court is familiar with the facts giving rise to Plaintiffs claims and CPG s defenses. Those facts are referenced again below only to the extent that they are pertinent to the issues raised in this Memorandum. The Settlement was reached after extensive discovery, hard-fought litigation, and lengthy negotiations 4 The deadline for opt-outs and objections was December 15, Dkt. 219, 22. 2

15 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 13 of 71 PageID: 3382 between experienced and informed counsel (with the assistance of the Honorable Dennis A. Cavanaugh), and easily meets the standard for final approval. Plaintiffs and Class Counsel based upon their evaluation of the facts, applicable law, and their recognition of the substantial risk and expense of continued litigation believe this Settlement to be fair, adequate and reasonable and submit that it is in the best interests of the Class. The Litigation This class action is about allegations regarding the design of AZEK decking and representations CPG made about it. Plaintiffs allege that AZEK decking, which is made from polyvinyl chloride (PVC), can develop stains, scratches, premature discoloration, chalking, and streaking under normal use. Plaintiffs further allege that CPG made written representations which assured prospective customers that AZEK decking had superior aesthetic durability to other decking alternatives, such as wood. CPG denies that the decking is defective or that misrepresentations were made about it. The decking was sold throughout the United States, and Plaintiffs allege that they share common design features relating to the composition. Plaintiffs claims allege, inter alia, CPG knew or should have known that the PVC decking would undergo various degradations, but made representations contrary to that knowledge. Plaintiffs further allege that the scientific and industrial community also knew that PVC was highly susceptible to 3

16 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 14 of 71 PageID: 3383 degradation if it was exposed to sunlight and heat. Specifically, Plaintiffs bring claims against CPG under state consumer protection statutes, and for breach of express and implied warranties. Plaintiffs seek economic damages based on the purchase of a product that did not conform to its advertised qualities and further claim that it can cause damage to other property. See generally Dkt. 181, 5-30; ; Plaintiffs do not allege any claims for personal injury or emotional distress; accordingly, the Settlement does not release any such claims. CPG has stated that it vigorously disputes Plaintiffs allegations, that the decking did not manifest the alleged defects, and that its representations were accurate. Further, CPG has asserted a number of legal defenses to Plaintiffs claims, reflected in its extensive motion for summary judgment and opposition to Plaintiffs Motion for Class Certification. 5 Indeed, the case has been vigorously litigated since its inception in Plaintiffs filed their consolidated amended complaint on April 22, Dkt. 90. In an Order dated January 30, 2015, Dkt , the Court granted and denied in part Defendants motion to dismiss the consolidated amended complaint. Plaintiffs filed their consolidated second amended complaint on February 20, 2015, Dkt. 5 At the time the parties reached agreement on materials terms of the Settlement, both parties had drafted and exchanged (but not filed) class certification papers. CPG had also exchanged (but not filed) a motion for summary judgment. 4

17 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 15 of 71 PageID: , and a motion for leave to file a consolidated third amended complaint on April 20, 2015, Dkt. 140, which the Court granted on August 26, 2015, Dkt The Court granted Plaintiffs request to file a consolidated fourth amended complaint on January 4, 2016, Dkt. 180, which is the operative complaint for purposes of this Settlement. Plaintiffs, as well as CPG, engaged in extensive research, investigation, discovery, expert work, and motion practice. Declaration of James E. Cecchi ( Cecchi Decl. ) at 6. Class Counsel s investigation of the facts and circumstances underlying the case have included consultations with experts, interviewing and deposing numerous CPG employees and third parties, conducting investigations of the properties of the Named Plaintiffs, reviewing thousands of documents produced by CPG and third parties, and researching and studying the legal principles applicable to issues in the MDL Litigation. Discovery in this case has been time-intensive and vigorously contested. It has included the production of approximately 380,000 pages of documents by CPG, 31,000 pages of documents by third parties, 21 depositions, and nine expert reports. Id. Settlement Negotiations Over the past year, the parties have engaged in numerous arm s-length settlement negotiations, including mediation presided over by Honorable Dennis 5

18 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 16 of 71 PageID: 3385 M. Cavanaugh. Id. 12. As a result of those negotiations, the parties reached agreement on the material terms of substantive relief for the Settlement Class. Only after the parties reached an agreement on all material terms of the settlement did they negotiate the amount of attorneys fees and costs that CPG would agree not to oppose paying to Class Counsel (subject to Court approval) and the amount of service awards Defendant would pay to the Class Representatives (also subject to Court approval). Id. at 13, 14. The Terms of the Settlement The Settlement, the full terms of which are set forth in the Settlement Agreement, provides substantial economic benefits to the Class. The Settlement resolves claims related to the purchase of certain legacy AZEK-branded Decking Boards purchased on or after August 1, 2007 and on or before December 31, 2012, in the following colors: Brownstone, Clay, Slate Gray, Ivory, White, Fawn, Kona, Sedona, Tahoe, Acacia, Morado, and Redland Rose. Settlement Class Members who submit timely and complete claims will receive 10% of what they paid for their AZEK Decking Boards, up to a limit of $2,000 per claimant and restricted to one claim per residential property address. This amount is subject to the following set-offs: (1) a dollar-for-dollar offset for any prior cash refund provided such refund is related to the allegations in the Fourth Amended Complaint; (2) an offset for previously-provided partial or 6

19 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 17 of 71 PageID: 3386 complete Decking replacement (valued at $2 per linear foot); (3) an offset for professional cleaning/conditioning previously provided by CPG to the Class Member (valued at $1 per linear foot); and (4) one $50.00 offset for each bottle of DeckMax previously provided by CPG to the Class Member (whether by coupon/voucher or product itself). CPG agreed to pay for executing and implementing the settlement class notice, for claims administration, and for $5,000 service awards to each Named Plaintiff. Finally, CPG has agreed not to oppose any application of Class Counsel for attorneys fees, costs and expenses provided the aggregate amount does not exceed $5,250,000. That amount represents a steep discount on the actual time and costs expended by Class Counsel litigating these cases. The other terms of the Settlement are in no way contingent on Class Counsel s fees, costs, and expenses request. Defendants will pay administration costs, service awards, and attorneys fees, costs and expenses independent of the compensation that CPG is providing Settlement Class Members as part of the Settlement. D. Preliminary Approval and Class Notice On August 23, 2017, the Court granted preliminary approval to the proposed Settlement. Dkt Pursuant to the Court s Order, the Courtapproved Notice Administrator, Dahl Administration ( Dahl ), disseminated a copy of the Notice to known Settlement Class Members in accordance with the 7

20 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 18 of 71 PageID: 3387 plan for Notice which this Court found to be the best notice practicable under the circumstances, and consistent with the requirements of due process. Dkt Dahl caused copies of the summary notice to be published in the national edition of USA Today newspaper on October 23, 2017, which has a daily print readership of approximately 3.4 million. (Cecchi Decl., Ex. 2 (Declaration of Mark A. Fellows), 12). On October 17, 2017, Dahl also caused the internet banner notice to commence, on a daily basis, until November 13, Id. at 8. During this period, the Banner Notices were placed on selected websites 8,718,237 times. Id. An online search notice campaign was also implemented. Id Ultimately, the internet digital banner notice, online search notice advertisements, and print publication notice resulted in a total of 12.2 million individual impressions. Id. 13. The dedicated settlement website set up to provide Class Members with information related to the Settlement has received over ten thousand unique visits. Although not part of the formal notice program, Class Counsel will also be undertaking direct outreach to over thousands of class members utilizing known addresses. Counsel will keep the Court apprised of all these efforts. 8

21 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 19 of 71 PageID: 3388 ARGUMENT I. THE SETTLEMENT IS FAIR, REASONABLE, AND ADEQUATE, AND SHOULD BE APPROVED. Rule 23(e) requires a determination by the district court that the proposed settlement is fair, reasonable and adequate. Fed. R. Civ. P. 23(e); In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 534 (3d Cir. 2004). There is a strong judicial policy in favor of resolution of litigation before trial, particularly in class actions and other complex cases where substantial judicial resources can be conserved by avoiding formal litigation. In re CertainTeed Corp. Roofing Shingle Prods. Liab. Litig., 269 F.R.D. 468, 484 (E.D. Pa. 2010) (quoting Ehrheart v. Verizon Wireless, 609 F.3d 590, 595 (3d Cir. 2010)); see also GM Trucks, 55 F.3d 768 ( The law favors settlement, particularly in class actions and other complex cases where substantial judicial resources can be conserved by avoiding formal litigation. ). The Ehrheart court held: This presumption is especially strong in class actions and other complex cases where substantial judicial resources can be conserved by avoiding formal litigation. GMC Truck, 55 F.3d at 784. The strong judicial policy in favor of class action settlement contemplates a circumscribed role for the district courts in settlement review and approval proceedings.... Settlement agreements are to be encouraged because they promote the amicable resolution of disputes and lighten the increasing load of litigation faced by the federal courts [and] the parties may also gain significantly from avoiding the costs and risks of a lengthy and complex trial. Ehrheart, 609 F.3d at ; see also Bell Atlantic Corp. v. Bolger, 2 F.3d 1304, 1314 n.16 (3d Cir. 1993). 9

22 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 20 of 71 PageID: 3389 Settlements enjoy a presumption that they are fair and reasonable when they are the product of arm s-length negotiations conducted by experienced counsel who are fully familiar with all aspects of class action litigation. See, e.g., GMC Trucks, 55 F.3d at 785; Sullivan v. DB Invs., 667 F.3d 273, 320 (3d Cir. 2011) (en banc); Gates v. Rohm & Haas Co., 248 F.R.D. 434, 439, 444 (E.D. Pa. 2008) (stressing the importance of arm s length negotiations and highlighting the fact that the negotiations included two full days of mediation ); Bredbenner v. Liberty Travel, Inc., 2011 WL , at *10 (D.N.J. Apr. 8, 2011) ( A class settlement is entitled to an initial presumption of fairness when (1) the negotiations occurred at arm s length; (2) there was sufficient discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only a small fraction of the class objected. ) (quoting GM Trucks, 55 F.3d at 785); see also MANUAL FOR COMPLEX LITIGATION, FOURTH (2004). A fair, reasonable and adequate settlement is not necessarily an ideal settlement. A settlement is, after all, a compromise, a yielding of the highest hopes in exchange for certainty and resolution. In re Prudential Ins. Co. of Am. Sales Practices Litig., 962 F. Supp. 450, 534 (D.N.J. 1997) ( Prudential I ), aff d, 148 F.3d 283 (3d Cir. 1998) ( Prudential II ) (citations omitted). As one court has noted: [T]he court s intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be limited 10

23 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 21 of 71 PageID: 3390 to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned... The proposed settlement is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators. * * * Neither the district court nor this court is empowered to rewrite the settlement agreed upon by the parties. We may not delete, modify, or substitute certain provisions of the consent decree. Of course, the district court may suggest modifications, but ultimately, it must consider the proposal as a whole and as submitted. Approval must then be given or withheld.... In short, the settlement must stand or fall as a whole. Officers for Justice v. Civil Serv. Comm n, 688 F.2d 615, 625, 630 (9th Cir. 1982); see also In re Am. Family Enters., 256 B.R. 377, 421 (D.N.J. 2000) ( Significant weight should be attributed to the belief of experienced counsel that the settlement is in the best interest of the class. ); In re Cendant Corp. Sec. Litig., 109 F. Supp. 2d 235 (D.N.J. 2000), aff d 264 F.3d 201 (3d Cir. 2001). The Third Circuit has adopted a nine-factor test to determine whether a settlement is fair, reasonable, and adequate. The elements of this test known as the Girsh factors are: (1) the complexity and duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining a class action; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement in light of the best recovery; and (9) the range of 11

24 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 22 of 71 PageID: 3391 reasonableness of the settlement in light of all the attendant risks of litigation. GM Trucks, 55 F.3d at 785 (citing Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975)). These factors are a guide and the absence of one or more does not automatically render the settlement unfair. American Family, 256 B.R. at 418. The Settlement meets each of these factors, and thus, should be approved. A. The Girsh Factors Weigh in Favor of Approval 1. The Complexity, Expense, and Duration of Continued Litigation The first Girsh factor is whether the settlement avoids a lengthy, complex and expensive continuation of litigation. This factor captures the probable costs, in both time and money, of continued litigation. Cendant II, 264 F.3d at (internal quotation marks omitted). Where the complexity, expense, and duration of litigation are significant, the Court will view this factor as favoring settlement. Bredbenner, 2011 WL , at *11. This factor undoubtedly weighs in favor of settlement. Here, due to the factual and legal complexities involved in this case, continued litigation would have been rigorously contested by all Parties, and would necessarily be expensive and time-consuming. See GM Trucks, 55 F.3d at 812 (concluding that lengthy discovery and ardent opposition from the defendant with a plethora of pretrial motions were facts favoring settlements, which offer 12

25 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 23 of 71 PageID: 3392 immediate benefits and avoid delay and expense). At the time of the Settlement, the Parties had analyzed more than 400,000 pages of documents, conducted 21 depositions, and assisted in the compilation of nine expert reports. The complexity of this case is inherent to Plaintiffs claims, which involve an analysis of the decking, CPG s internal manufacturing documents, warranty databases and statistical analyses. Indeed, Plaintiffs retained and worked with several experts each of whom performed substantial work. This fact alone weighs in favor of settlement approval. See Hall v. AT&T Mobility LLC, 2010 WL , at *7 (D.N.J. Oct. 13, 2010) (fact that trial would have required substantial expert testimony weighed in favor of approving settlement); McCoy v. Health Net, Inc., 569 F. Supp. 2d 448, 460 (D.N.J. 2008) (same). In addition, seeking certification of a litigation class would present manageability questions not presented by settlement-only class, see, e.g., In re LG/Zenith Rear Projection Television Class Action Litig., No. CIV.A , 2009 WL , at *4 (D.N.J. Feb. 18, 2009), and would require an even more complicated analysis of Plaintiffs claims and the continued costly battle of the experts. Additionally, the risks of substantial delay are palpable. As described above, although the case has been vigorously litigated for over four years, substantial additional work and discovery would be required before the case would be ready to bring to trial. Trial would involve extensive pretrial motions involving 13

26 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 24 of 71 PageID: 3393 complex questions of law and fact, and the trial itself would be lengthy and complicated. See Warfarin Sodium II, 391 F.3d at 536 (finding the first Girsh factor to weigh in favor of settlement after three years of litigation); Weiss, 899 F. Supp. at 1301 (approving settlement that was the result of an arm s length negotiation between two very capable parties and where Mercedes was prepared to contest this class action vigorously. ). Post-trial motions and appeal would further delay resolution and increase costs. Id. at 536 ( it was inevitable that posttrial motions and appeals would not only further prolong the litigation but also reduce the value of any recovery to the class ); In re Merck & Co., Inc. Vytorin ERISA Litig., 2010 WL , at *7 (D.N.J. Feb. 9, 2010) (noting that additional costs associated with trial of multi-district class action and the delayed recovery for the class weighs in favor of settlement). Even if Plaintiffs were successful, Defendants would undoubtedly appeal an adverse judgment, adding further time to a final resolution of this matter if it were litigated. Under all of the circumstances, a certain result now rather than an uncertain result more years in the future of this four year old litigation, weighs in favor of approval of the Settlement. For these reasons, the first Girsh factor weighs in favor of final approval of the Settlement. 14

27 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 25 of 71 PageID: The Reaction of the Class to the Settlement The second Girsh factor attempts to gauge whether members of the class support the Settlement. Prudential II, 148 F.3d at 318. In order to properly evaluate it, the number and vociferousness of the objectors must be examined. GM Trucks, 55 F.3d at 812. Given breadth of the class, and the overall effectiveness of the notice program (which reached over 4,000 members of the Settlement Class through direct notice alone (Kratz Decl. at 4-13)), the fact that there were only three requests for exclusion and three objections is a strong indicator that the Settlement is fair, reasonable and adequate. See, e.g., Cendant, 264 F.3d at (affirming trial court decision that class reaction was extremely favorable, where 478,000 notices were sent, four objections were made, and 234 class members opted out). Under Girsh, such a small number of exclusions and a lack of objections favor approval of a class action settlement agreement. See Bell Atlantic, 2 F.3d at 1314 n.15 (silence is tacit consent to settlement). A paucity of protestors... militates in favor of the settlement, See Bell Atlantic, 2 F.3d at 1314; see also Stoetzner v. U. S. Steel Corp., 897 F.2d 115, 119 (3d Cir. 1990) (objections by 29 members of a class comprised of 281 strongly favors settlement ); Prudential I, 962 F. Supp. at 537 (small number of negative responses to settlement favors approval); Weiss, 899 F. Supp. at 1301 (100 objections out of 30,000 class 15

28 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 26 of 71 PageID: 3395 members weighs in favor of settlement); Careccio v. BMW of N. Am. LLC, No. CIV. A , 2010 WL , at *4 (D.N.J. Apr. 29, 2010) ( Case law in this Circuit holds that a small number of objections is strong evidence that the settlement is fair and reasonable.... In Varacallo v. Mass. Mutual Life Ins. Co., 226 F.R.D. 207, 251 (D.N.J.2005), Judge Linares held where.06% of class members opted out of the settlement before him, and.003% raised objections, these results were extremely low and favored approval of the settlement. ) (citations omitted). Indeed, courts routinely approve settlements in which there is a much greater objection or opt-out response. E.g., Marshall v. Nat l Football League, 787 F.3d 502, (8th Cir. 2015) (affirming settlement approval even though more than 2,000 or almost 10% opted out and 19 class members filed objections). Here, the small magnitude of meaningful negative response to the Settlement reflects strong support from the Class and evinces the quality and value of the Settlement. 3. The Stage of the Proceedings The stage of the proceedings and the amount of discovery completed is another factor that courts consider in determining the fairness, reasonableness and adequacy of a settlement. GM Trucks, 55 F.3d at 785; Girsh, 521 F.2d at 157. This factor considers the degree of case development accomplished by counsel 16

29 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 27 of 71 PageID: 3396 prior to settlement. Bredbenner, 2011 WL at *12. Through this lens... courts can determine whether counsel had an adequate appreciation of the merits of the case before negotiating. GM Trucks, 55 F.3d at 813. Here, the Parties briefed multiple motions to dismiss, both Parties produced, and Plaintiffs have analyzed, more than 400,000 pages of documents and information from databases containing thousands of entries. Factual and expert depositions were also conducted. Further, the Parties participated in inspections of dozens of decks throughout the country and Class Counsel have communicated with hundreds of Class Members throughout the country. Simply put, this matter has been vigorously litigated for several years and, thus, there was no shortage of information and no rush to settlement here. This Settlement was reached after both sides endured the rigors of hard-fought motion practice, discovery, and litigation. 4. The Risks of Establishing Liability This factor should be considered to examine what potential rewards (or downside) of litigation might have been had class counsel decided to litigate the claims rather than settle them. Cendant II, 264 F.3d at 237 (quoting GM Trucks, 55 F.3d at 814). By evaluating the risks of establishing liability, the district court can examine what the potential rewards (or downside) of litigation might have been had class counsel elected to litigate the claims rather than settle them. GM 17

30 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 28 of 71 PageID: 3397 Trucks, 55 F.3d at 814. The inquiry requires a balancing of the likelihood of success if the case were taken to trial against the benefits of immediate settlement. In re Safety Components, Inc. Sec. Litig., 166 F. Supp. 2d 72, 89 (D.N.J. 2001). Although Class Counsel believe that the claims presented in this litigation are meritorious, which CPG contests, they are experienced counsel who understand that the the risks surrounding a trial on the merits are always considerable. Weiss, 899 F. Supp. at CPG has zealously defended against these claims, and would surely continue to do so if the case proceeds to trial. The Settlement here presents the Class with real relief now. Further, although Plaintiffs are confident that their claims are legally sound, Plaintiffs also state that there is always the possibility that the Court may disagree. These risks include the potential denial of a motion to certify a litigation class (which would entail consideration of manageability issues not present here), the granting of summary judgment, the granting of CPG s expert challenge, and loss at trial. Thus, these inherently unpredictable risks in establishing liability weigh in favor of settlement, particularly here, where the Settlement provides the Class with a substantial benefit that is fair, reasonable, and adequate. 5. The Risks of Establishing Damages Like the fourth factor, this inquiry attempts to measure the expected value of litigating the action rather than settling it at the current time. Cendant II,

31 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 29 of 71 PageID: 3398 F.3d at 238. The court looks at the potential damage award if the case were taken to trial against the benefits of immediate settlement. Prudential II, 148 F.3d at 319. In Warfarin Sodium I, the trial court found that the risk of establishing damages strongly favored settlement, observing that [d]amages would likely be established at trial through a battle of experts, with each side presenting its figures to the jury and with no guarantee whom the jury would believe. In re Warfarin Sodium Antitrust Litig., 212 F.R.D. 231, 256 (D. Del. 2002), aff d 391 F.3d 516, 537 (3d Cir. 2004). Similarly, in Cendant II, the Third Circuit reasoned that there was no compelling reason to think that a jury confronted with competing expert opinions would accept the plaintiff s damages theory rather than that of the defendant, and thus the risk in establishing damages weighed in favor of approval of the settlement. 264 F.3d at 239. The same is true here. Both Parties exchanged, but have not filed, competing expert challenges. Thus, this factor weighs in favor of final approval. 6. The Risks of Certifying and Maintaining a Litigation Class through Trial Because the prospects for obtaining certification have a great impact on the range of recovery one can expect to reap from the class action, GM Trucks, 55 F.3d at 817, the Court must measure the likelihood of obtaining and maintaining a certified class if the action were to proceed to trial. Girsh, 521 F.2d at 157. Class Counsel believe that this case is wholly appropriate for class certification in the 19

32 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 30 of 71 PageID: 3399 litigation context. However, CPG denies that a litigation class could or should be certified and has previewed for Class Counsel a host of arguments in opposition to certification of a litigation class. There is always a risk that a Court would find this action not suitable for class certification, or find it not suitable for litigation on a multi-state basis. Further, even if class certification were granted in the litigation context, class certification can always be reviewed or modified before trial, so the specter of decertification makes settlement an appealing alternative. Dewey v. Volkswagen of Am., 728 F. Supp. 2d 546, 585 (D.N.J. 2010). Finally, even if a class is certified, there is no sure bet that Plaintiffs would prevail at trial. CPG has consistently maintained that it has strong merits defenses to the Class s claims. In other words, class litigation is inherently uncertain and subject to many twists and turns. Experienced counsel know this and, consequently, this factor weighs in favor of final approval. 7. Defendant s Ability to Withstand Greater Judgment Although there is no dispute that CPG has sufficient resources, countless settlements have been approved where a settling defendant has had the ability to pay greater amounts, and the Third Circuit has noted that this fact alone does not weigh against settlement approval. See, e.g., Warfarin Sodium II, 391 F.3d at 538. This factor is generally neutral when the defendant s ability to pay greatly exceeds the potential liability, and was not a factor in settlement negotiations. CertainTeed, 20

33 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 31 of 71 PageID: F.R.D. at 489 ( because ability to pay was not an issue in the settlement negotiations, this factor is neutral ); Warfarin Sodium II, 391 F.3d at 538 ( fact that [defendant] could afford to pay more does not mean that it is obligated to pay any more than what the... class members are entitled to under the theories of liability that existed at the time the settlement was reached ); Bredbenner, 2011 WL , at *15 ( courts in this district regularly find a settlement to be fair even though the defendant has the practical ability to pay greater amounts ). 8. Reasonableness of the Settlement in Light of the Best Possible Recovery And All Attendant Risks Of Litigation The final two Girsh factors are the reasonableness of the settlement in light of the best possible recovery, and all the attendant risks of litigation. These factors, too, support approval of this Settlement and its benefits. This Settlement offers real economic benefits to Class Members. Subject to certain offsets described above, Settlement Class Members who submit timely and complete claims will receive 10% of what they paid for their AZEK Decking Boards, up to a limit of $2,000 per claimant and restricted to one claim per residential property address. These amounts were arrived at after careful consultation by Plaintiffs with Plaintiffs damages experts, review of CPG s internal documents, and comparison with settlements involving similar products. The cash payments provided for by the Settlement compare favorably to what Plaintiffs could recover if they prevailed at trial and these amounts are well 21

34 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 32 of 71 PageID: 3401 within the range of settlements commonly approved by Courts. See, e.g., Barel v. Bank of Am., 255 F.R.D. 393, 402 (E.D. Pa. 2009) (approving a settlement with a value of 52% of the low end of the damages range and 5.2% of the high end); In re Ikon Office Solutions, Inc., 194 F.R.D. 166, (E.D. Pa. 2000) (approving a settlement that ranged from 5.2% to 36.4% of the potential recovery). B. The Relevant Prudential and Baby Products Factors Also Support Settlement. The Third Circuit has articulated other factors that can be relevant to the evaluation of some, but not all, class settlements. In Prudential II, 148 F.3d at 323, the Third Circuit identified several additional factors that are illustrative of additional inquiries that in many instances will be useful for a thoroughgoing analysis of a settlement s terms. In re Pet Food Prod. Liab. Litig., 629 F.3d 333, 350 (3d Cir. 2010). Those factors are the following: [1] [T]he maturity of the underlying substantive issues, as measured by experience in adjudicating individual actions, the development of scientific knowledge, the extent of discovery on the merits, and other factors that bear on the ability to assess the probable outcome of a trial on the merits of liability and individual damages; the existence and probable outcome of claims by other classes and subclasses; [2] the comparison between the results achieved by the settlement for individual class or subclass members and the results achieved or likely to be achieved for other claimants; [3] whether class or subclass members are accorded the right to opt out of the settlement; [4] whether any provisions for attorneys fees are reasonable; and [5] whether the procedure for processing individual claims under the settlement is fair and reasonable. Prudential II, 148 F.3d at 323. Although not all of the Prudential II factors are 22

35 Case 2:12-cv MCA-MAH Document Filed 01/22/18 Page 33 of 71 PageID: 3402 relevant to approval of the proposed Settlement, those that are weigh in favor of final approval. First, the underlying substantive issues in this case are mature. As discussed above, there has been significant discovery on the merits and Class Counsel is aware of the complexity and risks inherent in a trial on the merits. Second, all individual Settlement Class Members are being treated fairly. Third, as discussed above, Settlement Class Members were provided with robust notice and were provided with the opportunity to opt-out, which only three individual Class Member elected. Fourth, the fees requested are reasonable, as more fully discussed herein. See infra at Finally, the claims process is clearly set out in the Agreement and accompanying papers, and Settlement Class Members have ample time to seek assistance, if necessary, and to complete a Claim Package. Finally, the Third Circuit added an additional factor in In re Baby Products Antitrust Litigation namely, the degree to which a proposed settlement provided a direct benefit to the class. 708 F.3d at 174; see also McDonough v. Toys R. Us, Inc., 80 F. Supp. 3d 626, (E.D. Pa. 2015) (discussing Baby Products factor ). Here, qualifying Class Members who timely and completely fill out a 6 Because Class Counsel is not aware of other individuals, classes, or subclasses asserting similar claims against CPG, Plaintiffs submit that the Prudential factors calling for comparison to other such claimants is not relevant to the analysis of the proposed Settlement in this matter. 23