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Presented by: John E. Keefe, Jr., Esq. April 18, 2013 Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions www.keefebartels.com.

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1 Presented by: John E. Keefe, Jr., Esq. April 18, 2013 Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions

2 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Sub headline AGENDA Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr.April 18, 2013 RECENT SUPREME COURT CLASS ACTION DECISIONS CLASS ACTION UPDATE INCLUDES: FEDERAL COURT CLASS ACTION DECISIONS 2 THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES 3 CONCLUSION 4 FINAL THOUGHT ON WHERE WE ARE WITH PLEADINGS 5

3 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Comcast Corp. v. Behrend, 133 S.Ct. 1426, (Mar. 27, 2013) Sub headline AGENDA Mass Tort Case Law Update: Class Actions RECENT SUPREME COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, Customers’ antitrust complaint sought damages for overcharges alleging cable company’s expansion efforts harmed competition and created artificially inflated prices. - Supreme Court (5-4 decision) reversed class certification and extended Wal Mart Stores, Inc. v. Dukes analysis into damages holding that courts must undertake a “rigorous analysis” of class certification requirements and address underlying merits where necessary to carry out that analysis. Applying this standard, Court found plaintiffs failed to show that damages could be proved on a class wide basis. - Court found that 3rd Circuit’s decision not to require review of plaintiffs’ expert models “simply because those argument would also be pertinent to the merits determination” was erroneous because “it ran afoul of our precedents requiring precisely that inquiry.” - Lower court judges cannot avoid the higher level of scrutiny of plaintiff’s damage models and liability theories based on proposition that a merits inquiry is inappropriate at class cert. stage. Supreme Court finds that the lower court’s adopting said proposition would render any method of measurement acceptable, "no matter how arbitrary," and would reduce Rule 23(b)(3)'s predominance requirement to a nullity.

4 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Comcast Corp. v. Behrend, 133 S.Ct. 1426, (Mar. 27, 2013) Sub headline AGENDA Mass Tort Case Law Update: Class Actions RECENT SUPREME COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Dissent: - Justices Ginsburg and Justice Breyer, with whom Justice Sotomayor and Justice Kagan join, dissenting state the case came to the Court “infected by our misguided reformulation of the question presented. Courts shifted the focus of the issue for review from the Rule 23(b)(3) analysis to the admissibility (or lack thereof) of expert testimony. - Rule 23(b)(3) predominance requirement is meant to “tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation,”, but “it scarcely demands commonality as to all questions.” The predominance standard is generally satisfied, even if damages are not provable in the aggregate., particularly when adjudication of questions of liability common to the class will achieve economies of time and expense. - Dissent concludes the majority’s “ruling is good for this day and case only,” and it remains the “black letter rule” that a class may obtain certification under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members.

5 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Comcast Corp. v. Behrend, 133 S.Ct. 1426, (Mar. 27, 2013) Sub headline AGENDA Mass Tort Case Law Update: Class Actions RECENT SUPREME COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Comment: Courts and judges continue their efforts to reconcile the basic premise of Rule 23 to procedurally organize a class case as soon as practicable with the “rigorous analysis” requirement of proving damages on a class wide basis under the pretext of evaluating predominance. - “Active judicial supervision may be required to achieve the most effective balance that expedites an informed certification determination without forcing an artificial and ultimately wasteful division between “certification discovery” and “merits discovery.” (Rule 23 Committee Notes on Rules—2003 Amendment) - Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage.

6 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Amgen v. Connecticut Retirement Plans & Trust Funds, 133 S.Ct (2013) Sub headline AGENDA Mass Tort Case Law Update: Class Actions RECENT SUPREME COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, Security fraud class action in which Supreme Court holds that materiality need not be proven in order to secure class certification by plaintiff with a “fraud-on-the-market” claim.” Issue of materiality is not decided during class certification, but when the case is decided on the merits. - In a 6-3 decision, Justice Ruth Bader Ginsburg concluded that plaintiffs’ assertion was sufficient for purposes of class certification, because the question at that stage was merely whether, in the words of the relevant rule of civil procedure, “questions of law or fact common to class members predominate over any questions affecting only individual members.” - Defendant/Amgen argued that class certification should be denied because the putative class representative had not established that the allegedly false statements were material - i.e., that they misstated or omitted information on which prudent investors in fact would rely. The Court rejected this argument on the ground that materiality is a merits issue. - Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class.

7 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Whirlpool v. Glazer, 2013 WL (U.S. April 1, 2013) Sub headline AGENDA Mass Tort Case Law Update: Class Actions RECENT SUPREME COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, Consumer brought putative class action against Whirlpool washing machines alleging breach of warranty, negligent design and negligent failure to warn. Machines had a design defect which made them prone to mold and noxious odors. - U.S. Supreme Court granted certiorari, summarily vacated the 6th Circuit Court of Appeals’ decision to certify a class of purchasers of Whirlpool washing machines, and instructed 6th Circuit to reconsider its certification decision in light of Comcast Corp. v. Behrend’s ruling that district courts are required to conduct an inquiry into the merits to determine whether class certification is appropriate.

8 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Class certification granted Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Automobiles Neale, et al. v. Volvo Cars of North America, LLC, et al., (March _, 2013): - 8 named plaintiffs represented a putative nationwide class alleging a uniform design defect in the sunroof drainage systems of various Volvo automobiles models - Judge Dennis M. Cavanaugh rejected Volvo’s request and found the issues raised by the suit “are more than sufficient” for the case to continue. Class actions were certified for the 6 states in which named plaintiffs bought their vehicles (Massachusetts, Florida, Hawaii, New Jersey, California and Maryland). Judge Cavanaugh also concluded that New Jersey’s law could not be applied nationwide. - Judge Cavanaugh also precluded the testimony and report of an expert proffered by a defendant in opposition to certification in a consumer product class action…Daubert analysis…. report and testimony of a human factors expert proffered by a motor vehicle company was “speculative, unreliable, and irrelevant.” Although the court may have been unduly proscriptive, the opinion stands as an important reminder that the increased scrutiny of experts at the class certification stage is a two-way street

9 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Class certification granted Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Automobiles Henderson v. Volvo Cars of North America, LLC, 2013 WL (D.N.J. March 22, 2013)(unpublished opinion). - District Judge Cecchi certified class for purposes of settlement and approves the settlement agreement. Court also granted Class Counsel’s application for an award of attorneys’ fees, reimbursement of expenses and incentive award payments. - Plaintiffs class on behalf of thousands of purchasers and/or lessees of designated Volvo models alleged a design defect which caused transmission to fail or malfunction after 4 year/50,000 mile standard warranty. - District Court noted that 3rd Circuit has repeatedly found predominance in cases where proof of liability depends on the conduct of the defendant. Variations in state law do not necessarily defeat predominance and concerns regarding state law variations largely dissipate when court is considering the certification of a settlement class. See Sullivan, 667 F.3d at District Court agreed with plaintiff that lodestar method was appropriate even though case did not involve a fee shifting statute. The combination of reimbursements and software upgrades “evaded the precise evaluation needed for the percentage of recovery method.” Here the Common Fund Analysis was not applicable, though preferred, where the nature of the settlement, here an extended warranty program, “evades the precise evaluation needed for the percentage of recovery method.”

10 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Class certification granted Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Automobiles In re Ford Motor Co. E-350 Van Produs. Liab. Litig., MDL No. 1687, Civ. A. No , Slip op. (D. N. J. Feb. 6, 2012)(unpublished opinion) - Plaintiff class of owners of Ford's E–350 vans alleging that vehicles were defectively designed due to a high center of gravity which lead to an unusually high rollover rate and increased risk of death or injury. - Court denied class certification in “diminished value” case based on omission – failure to disclose that Ford vans were prone to rollover. - Court found that common issues of fact and law did not predominate over individualized inquiries regarding omissions and amounts of information received by class members, and plaintiffs’ proposed class did not withstand “rigorous analysis” under Hydrogen Peroxide.

11 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Class certification granted Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Advertising solicitations Goodrich Management Corp. v. Afgo Mechanical Svcs., Inc., 2012 WL (D.N.J. Dec. 14, 2012) - NJ federal court grants certification in two, Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA") cases involving unsolicited commercial advertising faxed to plaintiffs. - Judge Martini denied defendant’s motion to deny class certifications in two cases brought under the TCPA and determined that TCP Act did not require federal courts to enforce state law restrictions on TCPA claims, rejecting bids by Banco Santander SA and Afgo Mechanical Services Inc. to dismiss separate proposed class actions against them. - TCPA generally prohibits persons and entities from faxing "unsolicited advertisements," i.e., "material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission." 47 U.S.C. § 227(a)(4), (C). - The District Court found that the Federal Rules of Civil Procedure, not New Jersey law, govern determination of class certification in private TCPA actions brought in federal court.

12 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Denial of class certification Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Auto Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir., Aug. 7, 2012) - Product liability suit brought on behalf of all purchasers and lessees of BMW models equipped with defective Bridgestone (run flat) tires sold or leased in NJ. - Circuit Judge Ambro vacated District Court’s order of Judge Hayden certifying plaintiff’s claim as an opt-out class- action suit under FRCP 23(b)(3), finding that claims did not satisfy the numerousity and predominance requirements for a class action suit. - Court of Appeals ruled that common law claims, where the product at issue can fail for a myriad of reasons unrelated to defect could not be tried as a class action due to the inability to establish causation by common proof, but rather would require individual inquiries to determine the cause of failure in each case. Such claims would therefore fail to meet the predominance requirement of Rule 23(b)(3). - District court had presumed causation under the NJCFA because plaintiff’s allegations were based on an omission rather an affirmative misrepresentation. 3rd Circuit found district court had erred in presuming causation because under any analysis, “what a class ‘expected’... depends on what information, if any, about the alleged defects was available during the class period and whether that class member knew about it.” District court also abused its discretion in certifying the class because it failed to make factual determinations as to consumer expectations and whether they were sufficiently common to satisfy the predominance requirement.

13 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Denial of class certification Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Insurance Franco v. Connecticut General Life Insurance Company, ___ F.R.D. ___,, 2013 WL (D.N.J. Jan. 16, 2013). - NJ District Court Judge Chesler denied class certification and addressed commonality and predominance in class action challenging how health insurers pay for services of out-of-network providers and how “reasonable and customary” charges for these services were determined by computer database. - NJ District Court’s predominance analysis focused on the ERISA “arbitrary and capricious” standard applied in reviewing an administrator’s decision and concluded that standard could not be shown on a class wide basis. Court also found that plaintiff failed to show benefit plans at issue had uniform or consistent definitions of “reasonable and customary” charges. -In addition, Court concluded that, consistent with 3rd Circuit law, the ERISA class could not be certified under Rule 23(b)(3) unless subscriber plaintiffs establish, by a preponderance of the evidence, that the injury suffered by class members is measurable on a class wide basis using common proof (citing Behrend). Some standard methodology by which damage amounts could be calculated must be established.

14 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Denial of class certification Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Mortgages Napoli v. HSBC Mortgage Servs., Inc., 2012 WL (D.N.J., April 27, 2012)(unpublished opinion) - District Judge Bumb declined remand request and dismissed a putative class action filed by homeowners against HSBC Mortgage Services Inc. and Mortgage Electronic Registration Systems, where the plaintiffs alleged that defendants fraudulently overcharged them and similarly situated foreclosed-upon borrowers by overstating payoff amounts due on their home loans. Plaintiffs asserted claims for breach of contract and violations of the New Jersey Consumer Fraud Act, the Truth-In-Consumer Contract, the Warranty and Notice Act and the Uniform Commercial Code. - After denying motion for remand, District Court also dismissed the complaint with prejudice on the grounds that New Jersey’s “entire controversy doctrine” required parties to “bring all claims relevant to the underlying controversy in one legal action” and barred their action. Coleman v. Chase Home Finance LLC, 446 F. App’x 469, 471 (3d Cir. 2011). - In New Jersey foreclosure proceedings, the “entire controversy doctrine is a bit more limited, and requires the filing only of any ‘“germane counterclaims’” that ‘“arise out of the mortgage... ’,” which includes “claims relating to payment and discharge, [and] incorrect computation of the amounts due.” Id. District court held plaintiffs’ claims were germane to prior foreclosure and plaintiffs clearly knew about the payoff discrepancy upon which their claims rested, even though the allegedly fraudulent payoff quotes were not received until after judgment. The court reasoned that because the foreclosure courts in New Jersey retain jurisdiction over a matter until at least ten days after the sheriff’s sale, “plaintiffs therefore had a full opportunity to assert their claims during the prior foreclosure action.”

15 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Denial of class certification Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Electronic devices Maloney v. Microsoft Corporation, 2012 WL (D.N.J., Mar. 5, 2012) - Judge Thompson of NJ District Court declined to certify a proposed statewide class in a suit over alleged defects (i.e. cracked LCD screens) in the Zune MP3 player's display screen. Judge Thomason joined other federal & state judges who have recently denied class certification when only a small percentage of a product has a reported problem and evidence shows other possible causes for the alleged problem. - The court had previously denied certification of a nationwide class finding that plaintiffs' proofs failed to establish any of the alleged design defects commonly caused class members‘ injuries, and the plaintiff’s evidence suffered from what the United States Supreme Court has termed a “failure of inference.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2555 (2011). -Internal defendant communications did not establish causation as to each individual class member‘s injury. Generalized statements about an alleged design defect are merely that—general statements; they fail to show that all LCD cracks must have been the result of this alleged defect. Just as in Dukes, anecdotal evidence generally cannot serve as a basis for class certification. - Judge Thompson noted the small one-percent rate of reported cracks and observed: "Numerous courts have rejected class certification based on failure rates similarly as small" (citing Payne v. FujiFilm U.S.A., Inc., 2010 WL (D.N.J. May 28, 2010).

16 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Developing class action areas and cases to watch Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 While, class action continue in all types of civil litigation including consumer products, insurance, banking, employment discrimination, wage & hour claims and antitrust; there has been a substantial increase in such areas as privacy… Privacy and the internet Federal & state statutes try to keep up with constantly changing technology, and courts either apply old laws/statutes to new technology or interpret newly enacted provisions. Google lawsuit (CA District Court): - In December 2012, U.S. Magistrate Judge Paul Grewal dismissed a class action asserting that the universal terms of service Google had imposed in March 2012 violated users' privacy rights, as well as the federal Wiretap Act and California state consumer laws. - Judge said the class could file an amended complaint based on state Right to Publicity Act but said that plaintiffs will have to specifically show how Google used their voice or likeness without their consent..

17 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Developing class action areas & cases to watch Sub headline AGENDA Mass Tort Case Law Update: Class Actions FEDERAL COURT CLASS ACTION DECISIONS Presented by: John E. Keefe, Jr. Example text April 18, 2013 Red Light Cameras - In December 2012, there was a preliminary settlement regarding this case about half-million people who received red-light camera tickets in New Jersey will receive partial refunds under a settlement in a class- action suit. The company isn’t admitting any wrongdoing or liability. - Arizona-based American Traffic Solutions will set up a $4.2 million fund to pay motorists tagged by the company's cameras who were not given ample time to apply the brakes. - Motorists, who received tickets from $85 to $140 will receive an average refund of $6. The refunds will apply to motorists who received tickets at intersections in 18 towns where the timing of the yellow lights wasn’t officially certified until July 25.

18 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Predominance Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 Rule 23(b) - 23(b)(3) requires that “questions of law or fact common to class members predominate over any questions affecting only individual members....” The “predominance inquiry ‘tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.... ’” (citing Sullivan v. D.B. Investments, Inc., 667 F.3d 273, 297 (3d Cir. 2011)). Rule 23(b)(3)’s predominance requirement imposes “a more rigorous obligation upon a reviewing court [than Rule 23(a)(2)’s commonality requirement] to ensure that issues common to the class predominate over those affecting only individual class members.” Id. - Cases say a prospective class need not prove the merits of its case in order to obtain class certification—except to the extent that the merits are relevant to class status. However, a significant problem in the certification process is that the predominance requirement for Rule 23, by its terms, frequently makes the merits relevant to class certification.

19 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Predominance Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 Choice of law issues undermining finding of predominance P.V. v. v. Camp Jaycee, 197 N.J. 132 (2008) - Case involved a 21 year old female with disabilities including Down Syndrome which alleged sexual assault at a PA campsite run by a charitable summer program operated by a NJ not-for-profit corporation. - NJ Supreme Court abandoned the governmental-interest test in conflict-of-law analysis in tort actions in favor of the most significant relationship test which starts with the presumption that law of state in which the injury occurred applies and is only overcome if another state has a more significant relationship to the parties and issues. - This change in the conflict of laws in tort cases will undoubtedly have a significant impact on the ability of a plaintiff to certify a nationwide class in tort cases where class members are alleged to have been injured in several states. (See Neale supra).

20 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Predominance Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 Choice of law issues undermining finding of predominance International Union of Operating Engineers Local No. 68 Welfare v. Merck & C., Inc., 192 N.J. 372 (2007) - Plaintiff class of union Taft-Hartley trust funds which acted as third-party payor for the recalled prescription drug Vioxx sought certification of a nationwide class. - NJ Supreme Court stated that “certification of a nationwide class is rare and application of the law of a single [State} to all members of such a class is even more rare” and reversed the order granting nationwide class certification

21 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Attorney Fees Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 Walker v. Giuffre, 209 N.J. 124 (2012), consolidated appeal with Humphries v. Powder Mill Shopping Plaza - New Jersey Supreme Court reaffirms Redine and rejects Perdue v. Kenny A. - Court found that the mechanisms for awarding attorney’s fees, including contingency enhancements, adopted in Rendine remain in full force and effect as the governing principles for awards made pursuant to New Jersey fee- shifting statutes. - Appellate Division had previously ruled that restrictive principles governing attorneys’ fee awards under federal fee-shifting statutes, as expressed in Perdue v. Kenny A., ___ U.S. ___, 130 S.Ct (2010), were to be applied to fee awards under New Jersey’s fee-shifting statutes such as the Consumer Fraud Act (Walker) and the New Jersey Law Against Discrimination (Humphries). - New Jersey Supreme Court has gone its own way by adopting fee-shifting standards that are more liberal than those of the United States Supreme Court recognizing the need to attract competent counsel to take public interest-oriented litigation.

22 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Attorney Fees Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 In re Baby Products Antitrust Litigation, 2013 U.S. App. LEXIS 3379 (3d Cir. Feb. 19, 2013) - Third Circuit vacated the order of District Court Judge Brody of the Eastern District of Pennsylvania approving a $35.5 million class action settlement - Third Circuit Court of Appeals addressed the use of cy pres distributions in class action settlements and reversed a district judge’s approval of a $35 million antitrust settlement because the district judge did not ask, and the parties did not volunteer, how little of the common fund class members had managed to claim and how much therefore would be distributed to charitable cy pres recipients. - At the fairness hearing, the parties knew that only $3 million of $35.5 million total settlement amount was allocated to class members. The common fund would be distributed to the class. The district judge awarded the plaintiffs’ counsel a $14 million fee, representing 1/3 of the common fund plus $2.2 million in expenses. The remainder of approximately $18 million would be distributed to cy pres recipients that had not been specifically identified in the class notice. - 3rd Circuit Court ultimately vacated the district court’s approval of the settlement including cy pres provision and the attorneys fees awarded based on it, because the parties never advised the district court that such a minimal amount would go directly to the class members.

23 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Attorney Fees Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 In re Baby Products Antitrust Litigation, 2013 U.S. App. LEXIS 3379 (3d Cir. Feb. 19, 2013) - Decision presents a challenge to reaching claims-made settlements. In light of the Third Circuit’s reasoning, the, final approval of a settlement should be contingent on the value of the claims class members. As a result, parties are left to negotiate the value of per-class member benefits. The decision suggests cy pres awards are less valuable than direct class benefits making plaintiff’s attorneys less likely to incorporate them into settlements and push defendants pay higher per-member class benefits.

24 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Attorney Fees Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 In re Schering-Plough Corp. Enhance ERISA Litig., 2012 WL (D.N.J. May 31, 2012) - Plaintiff class representing Schering-Plough employee savings and retirement plans alleged defendants breached financial duties under ERISA particularly with the plans’ holdings of Schering-Plough stock. - District Court Judge Cavanaugh approved plaintiff’s Motion for Final Approval of Class Certification, Class Action Settlement, Proposed Plan of Allocation and for an Award of Attorneys’ fees. Court considered the 7 Gunter factors - Court granted Class Counsel’s request for an award of 33.3% of Settlement Fund, representing a multiplier of counsel’s lodestar of 1.6 [based on 4,640 hours and billing totaling $2,539,991.50], reimbursement of expenses in the amount of $112,207.20, and contribution awards of $10, and $5, to representative plaintiffs. Plymouth County Contributory Retirement System v. Hassan, 2012 WL (D.N.J. Feb. 28, 2012) (unpublished opinion) - Plaintiff class (derivative suit) sought Final Approval of Proposed Settlement and of Award of Attorneys’ Fees of $5,100, which was approved by District Judge Cavanaugh. - Plaintiffs’ counsel had spent over 10,000 hours on case and had a lodestar of $6,115,

25 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Attorney Fees Sub headline AGENDA Mass Tort Case Law Update: Class Actions THE ISSUES OF PREDOMINANCE AND ATTORNEYS’ FEES Presented by: John E. Keefe, Jr. Example text April 18, 2013 In re Merck & Co., Inc. Vytorin ERISA Litigation, 2010 WL (D.N.J. Feb. 9, 2010)(unpublished opinion) - Plaintiffs’ Master and Amended Complaints in multi-district matter consisting of more than 140 putative class actions included allegations of deceptive advertising, concealment and statutory legal & equitable claims related to the marketing of Vytorin as the new and improved Zocor and as effective in reducing cholesterol and arterial plaque. - Proposed settlement included a Master Class and Consumer and 3rd Party Payor subclasses. $12.45 million dollars (30% of total settlement of $41.5 million dollars) was allocated to pay consumer subclass and remaining 70% was allocated between TPPS and independently represented health plans (IRHPs). - District Court Judge Cavanaugh found that the court did not need to apply Gunter factors in a formulaic way. Judge Cavanaugh approved award and noted that 3rd Circuit had not adopted a particular standard for fee awards in common fund cases, the Circuit had generally acknowledged that fee awards ranged from 19% to 45%. - Co-Lead Class Counsel sought $13,819, (33 1/3%) of the value of the settlement along with $141, for reimbursement of expenses. Counsel had spent a total of 8,199 hours and had a lodestar of $4,948, The fee request of Co-Lead Class Counsel represented multiplier of approximately General multiples ranging from 1 to 4 are frequently awarded in common fund cases See In re Diet Drugs, 582 F.3d 524, 545, 41 (3d Cir. 2009).

26 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Conclusion Sub headline AGENDA Mass Tort Case Law Update: Class Actions FINAL THOUGHT ON WHERE WE ARE WITH PLEADINGS Presented by: John E. Keefe, Jr. Example text April 18, Percentage of Fund still preferred as cross check with cross check between 1-4 if the precise evaluation of a common fund case cannot be ascertained, then lodestar is applied. See Henderson

27 Mass Tort 2013: Successfully Navigating Opportunities Mass Tort Case Law Update: Class Actions Presented by: John E. Keefe, Jr. April 18, 2013 Final Thoughts On Where We Are With Pleadings Sub headline AGENDA Mass Tort Case Law Update: Class Actions FINAL THOUGHTS ON WHERE WE ARE WITH PLEADINGS Presented by: John E. Keefe, Jr. Example text April 18, Retraction from Iqbal and Twombly being more appropriate applied - Liberal pleading standard requires only “A short and plain statement of the claim showing that the pleader is entitled to relief.” Expert Janitorial, LLC, v. Williams, 2010 WL (E.D. Tenn. 2010) (citing Bell Atl Corp v. Twombly, 127 S.Ct (2007). - A pleading “must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” Id. at *3.


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