case 4:16-cv-04265-cw document 163 filed 07/30/19 page 1 of 20 · laintiffsi28 p ’ motion for...

PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES & NAMED PLAINTIFF INCENTIVE AWARDS

4:16-cv-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mark P. Kindall, Cal. Bar No. 138703 [email protected] Robert A. Izard, pro hac vice [email protected] IZARD KINDALL & RAABE LLP 29 South Main Street, Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6292

Gregory Y. Porter, pro hac vice [email protected] Mark G. Boyko, pro hac vice [email protected] BAILEY & GLASSER LLP 1055 Thomas Jefferson Street, NW Suite 540 Washington, DC 20007 Telephone: (202) 463-2101

Joseph A. Creitz, Cal. Bar. No. 169552 [email protected] CREITZ & SEREBIN LLP 100 Pine Street, Suite 1250 San Francisco, CA 94111 Telephone: (415) 466-3090

Attorneys for the Plaintiffs UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION

MARLON H. CRYER, individually and on behalf of a class of all others similarly situated, and on behalf of the Franklin Templeton 401(k) Retirement Plan,

Plaintiffs,

v.

FRANKLIN RESOURCES, INC., the Franklin Templeton 401(k) Retirement Plan Investment Committee, and DOES 1-25,

Defendants.

Lead Case No. 4:16-cv-04265-CW [Consolidated with Case No. 4:17-cv-06409-CW]

PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES AND NAMED PLAINTIFF INCENTIVE AWARDS Judge: Hon. Claudia Wilken Hearing: Sept. 24, 2019 at 2:30 p.m.

Case 4:16-cv-04265-CW Document 163 Filed 07/30/19 of 20

PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES & NAMED PLAINTIFF INCENTIVE AWARDS

4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

NOTICE OF MOTION

TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

PLEASE TAKE NOTICE THAT on September 24, 2019, at 2:30 p.m. or as soon

thereafter as the matter may be heard in Courtroom 6 of this Court, located at 1301 Clay Street,

Oakland, California 94612, Plaintiffs Marlon Cryer and Nelly Fernandez, will and hereby does

move under Federal Rule 23, for Court of their Motion for Attorneys’ Fees, Reimbursement of

Expenses and Incentive Awards.

Plaintiffs’ Motion is based on this Notice of Motion and Motion, Memorandum of Points

and Authorities, the pleadings in this action, and such other materials and evidence as may be

presented to the Court.

Dated: July 30, 2019 Respectfully submitted,

/s/ Mark G. Boyko (pro hac vice) Gregory Y. Porter (pro hac vice) BAILEY & GLASSER LLP 1055 Thomas Jefferson St. NW, Suite 540 Washington, DC 20007 Telephone: (202) 463-2101 [email protected] [email protected]

Mark P. Kindall (138703) Robert A. Izard IZARD KINDALL & RAABE, LLP 29 South Main St., Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6295 [email protected] [email protected]

Joseph A. Creitz (169552) Lisa S. Serebin (146312) CREITZ & SEREBIN, LLP 100 Pine Street, Suite 1250 San Francisco, CA 94111 Telephone: (415) 466-3090 [email protected] [email protected]

Mark G. Boyko


i PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT

OF EXPENSES & NAMED PLAINTIFF INCENTIVE AWARDS 4:16-cv-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

MEMORANDUM AND POINTS OF AUTHORITY

TABLE OF CONTENTS Page(s)

I. INTRODUCTION .............................................................................................................. 1 II. ARGUMENT ...................................................................................................................... 3

A. The Requested Fee is Reasonable Under the Circumstances. ................................. 3 1. The Court Should Award Attorneys’ Fees Based on a Percentage of the

Settlement .................................................................................................... 3 2. A Fee Equal to 28 Percent of the Cash Portion of the Settlement and

Below 25 Percent of the Present Value of the Overall Class Benefit is Appropriate For this Extraordinary Recovery............................................. 4

3. The Results Achieved ................................................................................. 5 4. Litigation Risk ............................................................................................. 6 5. Non-Monetary Relief .................................................................................. 7 6. Percentage Rate Relative to Market Rate .................................................... 7 7. Contingent Nature of Representation and Opportunity Cost ...................... 8 8. Class Reaction ............................................................................................. 9 9. Lodestar Cross-Check ................................................................................. 9

B. The Court Should Award Reimbursement of Class Counsel’s Costs. .................. 11 C. The Court Should Approve Incentive Awards to the Class Representatives. ....... 11

III. CONCLUSION ................................................................................................................. 12


ii PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIES

Page(s) Cases

In re Activision Sec. Litig., 723 F. Supp. 1373 (N.D. Cal. 1989) ...........................................................................................4

Alberto v. GMRI, Inc., No. CIV 07-1895 WBS DAD, 2008 WL 4891201 (E.D. Cal. Nov. 12, 2008) ...........................4

In re Biolase, Inc. Sec. Litig., No. 13-1300, 2015 WL 12720318 (C.D. Cal. Oct. 13, 2015) .....................................................6

Blum v. Stenson, 465 U.S. 886 (1984) ....................................................................................................................3

Bouman v. Block, 940 F. 2d 1211 (9th Cir. 1991) ..................................................................................................10

Brotherston v. Putnam Investments, No. 15-13825, 2017 WL 2634361 (D. Mass. June 19, 2017) .....................................................2

Dorman v. Charles Schwab Corp., No. 17-cv-285 (N.D. Cal.) ..........................................................................................................2

Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) ................................................................................................................7

Gordan v. Mass. Mutual Life Ins., No. 13-cv-30184, 2016 WL 11272044 (D. Mass. Nov. 3, 2016) .....................................8, 9, 10

Gudimetla v. Ambow Educ. Holding, No. 12-5062, 2015 WL 12752443 (C.D. Cal. Mar. 16, 2015) ....................................................6

Hensley v. Eckerhart, 461 U.S. 424 (1983) ....................................................................................................................5

Johnson v. Fujitsu Technology and Business of American, Inc., No. 16-cv-3698, 2018 WL 2183253 (N.D. Cal. May 11, 2018) ...............................................11

Kanawi v. Bechtel Corp., 2011 WL 782244 (N.D. Cal. Mar. 1, 2011) ...................................................................... passim

Kirchoff v. Flynn, 786 F.2d 320 (7th Cir. 1986) .......................................................................................................4


iii PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Krueger v. Ameriprise Fin., Inc., No. 11-cv-2781, 2015 WL 4246879 (D. Minn. July 13, 2015) ..................................................8

Kruger v. Novant Health, Inc., No. 1:14CV208, 2016 WL 6769066 (M.D.N.C. Sept. 29, 2016) ...................................9, 10, 12

Lee v. JP Morgan Chase & Co, No. 13-cv-511, 2015 WL 12711659 (C.D. Cal. Apr. 28, 2015) .................................................8

In re LJ Int’l Inc. Sec. Litig., No. 07-6076, 2009 WL 10669955 (C.D. Cal. Oct. 19, 2009) .....................................................6

Main v. American Airlines, Inc., No. 16-cv-473, Dkt. 138 (N.D. Tex. Feb. 21, 2018) ...................................................................8

Meiners v. Wells Fargo & Co., No. 16-3981, 2017 WL 2303968 (D. Minn. May 25, 2017) .......................................................2

Mogck v. Unum Life Ins. Co. of Am., 289 F. Supp. 2d 1181 (S.D. Cal. 2003) .......................................................................................9

Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008) .....................................................................................................9

Munro v. Univ. of Southern Cal., 896 F.3d 1088 (9th Cir. 2018) .....................................................................................................7

Nolte v. CIGNA, 2013 WL 12242015 (C.D. Ill. Oct. 15, 2013) .............................................................................8

In re Northrop Grumman ERISA Litig., No. 06-cv-6213 (C.D. Cal. Oct. 24, 2017) ....................................................................10, 11, 12

In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036 (N.D. Cal. 2008) ..................................................................................4, 6

In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) .......................................................................................3, 5, 11, 12

Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268 (9th Cir. 1989) ...................................................................................................3, 4

Price v. Eaton Vance Corp., 18-cv-12098 (D. Mass. May 6, 2019) .........................................................................................5

Radcliffe v. Experian Info. Solutions, 715 F.3d 1157 (9th Cir. 2013) ...................................................................................................11


iv PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Rodriguez v. Disner, 688 F.3d 645 (9th Cir. 2012) .......................................................................................................5

Rodriguez v. W. Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) ...........................................................................................6, 11, 12

Sims v. BB&T Corp., No. 15-cv-732, 2019 WL 1993519 (M.D.N.C. May 6, 2019) ....................................................8

Syed v. M-I LLC, No. 14-cv-742, 2016 WL 310135 (E.D. Cal. Jan. 26, 2016) ......................................................4

Urakchin v. Allianz Asset Mgmt. of Amer., L.P., No. 15-cv-1614, 2018 WL 3000490 (C.D. Cal. Feb. 6, 2018) ...................................................5

Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482 (E.D. Cal. 2010) ..............................................................................................11

Velazquez v. Massachusetts Fin. Services Co., No. 17-cv-11249 (D. Mass) ....................................................................................................5, 6

Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) .........................................................................................4, 5, 8, 9

Wade v. Minatta Transp. Co., No. C10-2796 BZ, 2012 WL 300397 (N.D. Cal. Feb. 1, 2012) .................................................5

Waldbuesser v. Northrop Grumman Corp., 2017 WL 9614818 ......................................................................................................................8

In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994) ...................................................................................................3, 8

Wildman v. Am. Century Servs., LLC, No. 16-737, 2019 WL 283382 (W.D. Mo. Jan. 23, 2019) ..........................................................2

Statutes

29 U.S.C. § 1001, et seq. ......................................................................................................... passim

29 U.S.C. § 1104(a) ..........................................................................................................................1

29 U.S.C. § 1106 ...............................................................................................................................1

Other Authorities

ALBA CONTE, 1 ATTORNEY FEE AWARDS §2:19 (3d. ed.) ..............................................................11

MANUAL FOR COMPLEX LITIG. (Fourth) § 14.121 (2004) .................................................................4


1 PLAINTIFFS’ MOTION FOR ATTORNEYS’

FEES, REIMBURSEMENT OF EXPENSES & NAMED PLAINTIFF INCENTIVE AWARDS

4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I. INTRODUCTION

Plaintiffs brought this case alleging that Defendants’ decisions to maintain underperforming

proprietary investments in the 401(k) plan (the “Plan”) offered to qualified employees of Franklin

Resources, Inc. (“Franklin”), violated Defendants’ duties of prudence and loyalty under Section

404(a) of ERISA, 29 U.S.C. § 1104(a), and constituted prohibited transaction under ERISA Section

406, 29 U.S.C. § 1106.1 Because Class Counsel zealously and successfully litigated this case for

three years, up to the eve of trial, they were able to negotiate one of the largest monetary settlements

in absolute terms and the largest ever when measured on a per class member basis.

Under the proposed Settlement, approximately 8,600 class members will receive their portion

of a collective $26.75 million settlement without the need to complete a claim form or take any

other affirmative act. As an added benefit, many of these participants will receive their recovery

directly as a contribution into their tax-deferred 401(k) accounts.2 Defendants have also agreed to

add a non-proprietary suite of target date funds: starting August 1, 2019, the Plan will offer a series

of target date options managed by State Street, which charge fees less than one-fifth has high as the

Franklin Target Date Funds. (Brown decl. ¶ 5). In addition, after this case was filed but prior to

Settlement, Defendants removed the Franklin Money Market Fund which Plaintiffs had challenged

and replaced it with a non-proprietary capital preservation fund that provides the Plan with over

$600,000 per year in additional interest compared to the Franklin Money Market Fund. (Brown

decl. ¶3). The capital preservation fund and target date fund changes offer a present value to the

Plan of over $3 million over the next three years, assuming half of the target date fund participants

move to the non-proprietary funds. When these considerations are valued over the entire settlement

period, the total monetary benefit to the class exceeds $35.4 million. Brown decl. ¶6.

1 Consistent with this Court’s Procedural Guidance for Class Action Settlements, the factual and procedural background set out in the Memorandum of Law in Support of Plaintiffs’ Motion for Final Approval of Class Action Settlement is incorporated herein by reference. 2 As described in the Settlement Agreement, the Class will receive upfront monetary compensation in the form of a $13.85 million cash payment, plus an additional Plan benefit consisting of an increase in Franklin’s existing matching contributions from 75% to 85% for a period of three years, a benefit that would, based on past contribution levels, add $10.9 million ($4.3 annually) to the Plan through higher payments by Franklin.




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The proposed Settlement is an outstanding result for the Class, particularly because ERISA

class actions challenging the inclusion of proprietary funds in an employers’ 401(k) plans are rare,

complex, uncertain, expensive, and risky. While this Court also has before it a case brought by

participants in the Charles Schwab 401(k) plan alleging similar ERISA violations, (Dorman v.

Charles Schwab Corp., No. 17-cv-285 (N.D. Cal.)), nationwide, only nineteen other such cases

have settled since the passage of ERISA in 1974. See, Exhibit A to Declaration of Gregory Porter.

Only one of these, brought against Bechtel Corporation, was venued in the Northern District of

California. Kanawi v. Bechtel Corp., 2011 WL 782244 (N.D. Cal. Mar. 1, 2011) (Breyer, J.). Id.

Only two have gone to trial; both resulted in defense verdicts. Wildman v. Am. Century Servs., LLC,

No. 16-737, 2019 WL 283382 (W.D. Mo. Jan. 23, 2019); Brotherston v. Putnam Investments, No.

15-13825, 2017 WL 2634361 (D. Mass. June 19, 2017), aff’d with respect to fiduciary breach

allegations but vacated and remanded with respect to alleged prohibited transactions, 907 F.3d 17

(1st Cir. 2018). At least one other case was dismissed. Meiners v. Wells Fargo & Co., No. 16-3981,

2017 WL 2303968 (D. Minn. May 25, 2017), aff’d, 898 F.3d 820 (8th Cir. 2018).

Class Counsel have substantial experience in this narrow area of law, having collectively

represented plan participants in over half of the proprietary fund 401(k) settlements ever reached.

Ex. A to Porter Decl. The experience was essential to the successful prosecution and settlement of

the case. In light of their experience, their three years of effort, the high degree of risk and

uncertainty that these cases represent and, most importantly, the results that have been achieved,

Class Counsel are requesting $7,490,000 in attorneys’ fees, which represents 28% of the $26.75

million cash portion of the settlement. Moreover, the fee request represents only 21.1% of the

monetary benefits when taking into account the present value of the plan reforms achieved through

the litigation and this settlement, even without factoring in the value of any such reforms after the

three-year settlement period. This fee request does not seek any monies for interest earned on the

settlement fund or for additional work to be done in the future, including: (1) three years of

monitoring Defendants’ compliance with the settlement; (2) communication and facilitation of




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

contingency payments at the close of the three-year period; or (3) the risk, burden and expense of

contested arbitration over compliance issues.

Class Counsel’s requested fee is less than the one-third fee that was agreed to by the Named

Plaintiffs in their contingency fee agreements with Class Counsel (Porter Decl. ¶ 19), less than

market rates in other similar cases, and less than the thirty percent contingent fee awarded by Judge

Breyer in Kanawi v. Bechtel, 2011 WL 782244 at *2. Even without considering any of the benefits

other than the $26.75 million monetary portion of the Settlement, the fee request is only slightly

above the 25 percent baseline for class litigation in the Ninth Circuit, and when the entire value of

the Settlement is considered, the requested fee is significantly lower than the 25 percent benchmark.

The requested fee is fair and reasonable regardless of whether benefits beyond the monetary portion

are considered, because (as discussed below), many of the factors that courts have determined

justify a percentage award above the benchmark are present here.

II. ARGUMENT

A. The Requested Fee is Reasonable Under the Circumstances.

Awards in class actions are most often made in reference to the common fund doctrine,

pursuant to which the Supreme Court has observed that “a reasonable fee is based on a percentage

of the fund bestowed on the class.” Blum v. Stenson, 465 U.S. 886, 900 n.16 (1984); Paul, Johnson,

Alston & Hunt v. Graulty, 886 F.2d 268, 271 (9th Cir. 1989). The guiding principle for determining

the amount of a fee award in a common-fund case is that the fee should be “reasonable under the

circumstances.” In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1296 (9th Cir. 1994)

(“WPPSS”) (citation omitted).

1. The Court Should Award Attorneys’ Fees Based on a Percentage of the Settlement

Courts in the Ninth Circuit may award attorneys’ fees in common fund cases based on either

the lodestar method or the percentage-of-recovery method. In re Online DVD-Rental Antitrust

Litig., 779 F.3d 934, 949 (9th Cir. 2015). However, most courts use the percentage-of-the-fund




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

method.3 This method is particularly appropriate “where, as here, ‘the benefit to the class is easily

quantified.’” Syed v. M-I LLC, No. 14-cv-742, 2016 WL 310135, at * 9 (E.D. Cal. Jan. 26, 2016)

(quoting In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir. 2011)).

The Court should use the percentage-of-the-fund method here. Percentage approaches are

the standard contingent-fee arrangements in non-class action cases. Thus, the percentage

approach best emulates the real-world market value of attorney’s services that are provided on a

contingent basis, and properly align the interests of the attorney and the client in achieving the

maximum recovery in shortest possible time. See Kirchoff v. Flynn, 786 F.2d 320, 325–26 and

328 (7th Cir. 1986). Moreover, the “lodestar method is difficult to apply, time-consuming to

administer, inconsistent in result, and capable of manipulation” and “creates inherent incentive to

prolong the litigation until sufficient hours have been expended.” MANUAL FOR COMPLEX LITIG.

(Fourth) § 14.121 (2004); see also Vizcaino, 290 F.3d at 1050 n.5 (“[I]t is widely recognized that

the lodestar method creates incentives for counsel to expend more hours than may be necessary

on litigating a case so as to recover a reasonable fee . . . .”); Syed, 2016 WL 310135, at * 9 (use of

the percentage method avoids “‘the often more time-consuming task of calculating the lodestar’”)

(quoting Bluetooth, 654 F.3d at 942).

2. A Fee Equal to 28 Percent of the Cash Portion of the Settlement and Below 25 Percent of the Present Value of the Overall Class Benefit is Appropriate For this Extraordinary Recovery

In the Ninth Circuit, the “usual range” for a percentage award of attorneys’ fees in a

common fund case is 20–30 percent. Vizcaino, 290 F.3d at 1047. The midpoint of the range is the

“benchmark” (id.), which can be adjusted upwards or downwards “to account for any unusual

circumstances involved in [the] case.” Alberto v. GMRI, Inc., No. CIV 07-1895 WBS DAD, 2008

WL 4891201, at *11 (E.D. Cal. Nov. 12, 2008) (quoting Paul, Johnson, Alston & Hunt v. Graulty,

3 See In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1046 (N.D. Cal. 2008) (stating “use of the percentage method in common fund cases appears to be dominant” and its “advantages ... have been described thoroughly by other courts.”); Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002) (approving use of percentage method); In re Activision Sec. Litig., 723 F. Supp. 1373, 1378 (N.D. Cal. 1989) (“[T]his court concludes that in class action common fund cases the better practice is to set a percentage fee.”).




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

886 F.2d 268, 272 (9th Cir. 1989)); see also Rodriguez v. Disner, 688 F.3d 645, 653 (9th Cir. 2012);

Online DVD-Rental Antitrust Litig., 779 F.3d at 949; Wade v. Minatta Transp. Co., No. C10-2796

BZ, 2012 WL 300397, at *1 (N.D. Cal. Feb. 1, 2012).

Within the Ninth Circuit, courts look at the following factors when considering a proper

percentage “for an award of attorneys’ fees: (1) the results achieved; (2) the risks of litigation; (3)

whether there are benefits to the class beyond the immediate generation of a cash fund; (4) whether

the percentage rate is above or below the market rate; (5) the continent nature of the representation

and the opportunity cost of bringing the suit; (6) reactions from the class; and (7) a lodestar cross-

check.” Kanawi v. Bechtel Corp., 2011 WL 782244 at *1, citing Vizcaino, 290 F.3d at 1048–52;

see also In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 954–55 (9th Cir. 2015). Evaluation

of these factors supports the requested fee in this case. Indeed, Judge Breyer in Kanawi assessed

these same factors in determining “that an upward adjustment of the benchmark to 30% is

warranted.” Id.

3. The Results Achieved

One of the most important factors in determining the reasonableness of a fee is the result

achieved for the class. See Hensley v. Eckerhart, 461 U.S. 424, 436 (1983) (“[The] most critical

factor is the degree of success obtained.”); Vizcaino, 290 F.3d at 1048. Here, the combination of

these benefits is just under one-third of the Class’s potential damages. Dkt. 157 at ECF 16. This

percentage, in and of itself, is a very good result for a proprietary fund 401(k) case. See, e.g.,

Urakchin v. Allianz Asset Mgmt. of Amer., L.P., No. 15-cv-1614, 2018 WL 3000490, at *4 (C.D.

Cal. Feb. 6, 2018) (granting preliminary approval to settlement of proprietary fund 401k ERISA

case that represented between 25.5% of plaintiffs’ losses) and Docket Entries 185 and 186 (final

approval order and judgment of that settlement); Price v. Eaton Vance Corp., 18-cv-12098, Dkt.

32 (D. Mass. May 6, 2019) ($3.45 million settlement constituted 23% of the potential damages);

Velazquez v. Massachusetts Financial Services Co., No. 17-cv-11249 (D. Mass) ($6,975,000

settlement constituted 29% of possible damages). This recovery is substantially higher than




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

percentage recoveries approved by other courts in this circuit,4 and represents a good recovery for

the Class.

On a per-individual basis, the settlement sets a new high for proprietary fund 401(k) cases.

On a gross basis (before accounting for attorneys’ fees and settlement expenses) the per participant

recovery is $3,100. This is a record high among all proprietary fund 401(k) cases. Porter Decl. Ex.

A. The average class member across all other proprietary fund 401(k) settlements has received a

gross recovery of less than $200 — and this excludes the dismissed cases in which class members

received nothing. Only five other settlements achieved gross per-participant recoveries above $500

and the highest after this settlement was under $2,300 per class member. Velazquez v.

Massachusetts Financial Services Co., 17-cv-11249, Dkt. 90 at ECF 7 and 10 (D. Mass)

(Memorandum in Support of Preliminary Approval explaining that class of approximately 3,000

individuals will be eligible to participate in $6,875,000 common fund).

In addition, the Plan is already benefitting from a non-proprietary stable value fund for a low-

risk capital preservation option. Starting next month, the Plan will benefit from a less expensive

and non-proprietary target date fund alternative. These benefits are not included in the per

participant recoveries above, representing an additionally successful result achieved for the Class.

4. Litigation Risk

Risk in ERISA proprietary fund litigation is extreme. This evidenced by the trial court

losses, as well as the substantial risk of intermediate dispositive rulings. Indeed, in Kanawi, Judge

Breyer granted Bechtel’s motion for summary judgment on Plaintiffs’ fiduciary breach claim while

finding that:

4 See Rodriguez v. W. Publ. Corp., 563 F.3d 948, 964-65 (9th Cir. 2009) (approving a 10% recovery in an antitrust case); In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1042 (N.D. Cal. 2008) (“just over 9% of the maximum potential recovery” was “reasonable”); In re Biolase, Inc. Sec. Litig., No. 13-1300, 2015 WL 12720318, at *4 (C.D. Cal. Oct. 13, 2015) (concluding 8% recovery was fair, reasonable, and adequate”); Gudimetla v. Ambow Educ. Holding, No. 12-5062, 2015 WL 12752443, at *5 (C.D. Cal. Mar. 16, 2015) (approving class action settlement where recovery was only 5.6% of estimated damages); In re LJ Int’l Inc. Sec. Litig., No. 07-6076, 2009 WL 10669955, at *4 (C.D. Cal. Oct. 19, 2009) (approving class action settlement where recovery was only 4.5% of maximum possible recovery).




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Plaintiffs have not demonstrated that Defendants’ conduct fell outside of their obligations to the Plan participants. It is easy to opine in retrospect that the Plan’s managers should have made different decisions, but such 20/20 hindsight musings are not sufficient to maintain a cause of action alleging a breach of fiduciary duty.

Kanawi, No. 06-cv-5566, Dkt. 686 at 17. There, as here, “the Committee met regularly to discuss

the Plan’s investments and sought the advice of Callan Associates to ensure that it was making

proper decisions.” Id. Plaintiffs faced the risk of a similar finding at any point, including after trial.

In addition, Plaintiffs here faced risks associated with the severance and other agreements

signed by the named plaintiffs, which Defendants alleged waived their right to pursue class

litigation on behalf of the Plan. While this argument ultimately proved unsuccessful, the merits of

this argument hung on cases pending before the Ninth Circuit and United State Supreme Court

during the pendency of this litigation. Munro v. Univ. of Southern Cal., 896 F.3d 1088 (9th Cir.

2018); Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). These alternative basis for striking

down Plan-wide relief rendered this litigation particularly risky, even among its peers.

5. Non-Monetary Relief

Plaintiffs brought this litigation alleging, among other things, that the Franklin Money Market

Fund was imprudent and should have been replaced by a non-proprietary capital preservation

option. After the litigation commenced, Defendants removed the Franklin Money Market Fund and

replaced it with a non-proprietary stable value fund, which is providing the Plan with over $600,000

per year in additional interest compared to the Franklin Money Market Fund. (Brown decl. ¶ 3). As

part of the settlement, Defendants have also agreed to add a non-proprietary suite of target date

funds, which offers a potential fee-savings of over $1 million over the course of the next three

years. (Brown decl. ¶¶ 5). The capital preservation fund and target date fund changes offer a present

value to the Plan of over $3 million over the next three years, assuming half of the target date fund

participants move to the non-proprietary funds. These plan benefits weigh in favor of awarding the

requested fee.

6. Percentage Rate Relative to Market Rate

In Kanawi, Judge Breyer recognized that a twenty-five percent fee award “is below the

market rate for similar cases” and that this factor “favors an increase in the benchmark rate.”




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Kanawai at *2. Since then, 5 settlements of proprietary fund 401(k) class actions have created

common funds within $10 million of the settlement at issue ($16.75 million to $36.75 million). In

four of those cases, the Court awarded one-third fees, while in the fifth the fee award was thirty

percent. Krueger v. Ameriprise Financial, Inc., No. 11-cv-2781, 2015 WL 4246879, at *5–6 (D.

Minn. July 13, 2015) (one-third fee award in $27.5 million settlement); Nolte v. CIGNA, 2013 WL

12242015, at *2 (C.D. Ill. Oct. 15, 2013) (one-third fee award in $35 million settlement); Sims v.

BB&T Corp., No. 15-cv-732, 2019 WL 1993519 (M.D.N.C. May 6, 2019) (one-third fee award in

$24 million settlement); Gordan v. Mass. Mutual Life Ins., No. 13-cv-30184, 2016 WL 11272044

(D. Mass. Nov. 3, 2016) (awarding one-third fee in $30.9 million settlement); Main v. American

Airlines, Inc., No. 16-cv-473, Dkt. 138 (N.D. Tex. Feb. 21, 2018) (approving 30% fee in $22 million

settlement). In addition, the Central District of California approved a one-third fee award in an

ERISA fiduciary breach case outside of the proprietary fund context. Waldbuesser v. Northrop

Grumman Corp., 2017 WL 9614818 (increasing 25 percent benchmark to award one-third fee in

$16.75 million settlement of claims concerning fiduciary breach related to plan administration).

Since the twenty-five percent benchmark remains below market rates for similar cases, this factor

supports an increase here.

7. Contingent Nature of Representation and Opportunity Cost

Another relevant consideration is that Class Counsel agreed to undertake this action against

a prominent asset manager on a purely contingent basis, and all costs of litigating the matters, and

the attendant financial risks, were borne by Class Counsel for more than three years. “Courts have

recognized that the public interest is served by rewarding attorneys who assume representation on

a contingent basis with an enhanced fee to compensate them for the risk that they might be paid

nothing for their work.” Lee v. JP Morgan Chase & Co, No. 13-cv-511, 2015 WL 12711659, at *8

(C.D. Cal. Apr. 28, 2015) (citing In re Washington Public Power Supply Sys. Sec. Litig., 19 F.3d

1291, 1299 (9th Cir. 1994); Vizcaino, 290 F.3d at 1050). Moreover, “Class Counsel had to turn

down opportunities to work on other cases to devote the appropriate amount of time, resources, and




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

energy necessary to handle this relatively complex case.” Kanawi, 2011 WL 782244 at *2. “This

factor supports an increase in the benchmark rate.” Id.

8. Class Reaction

The Class has received their court-approved notices, but the deadline for objections has not

passed. Currently, Class Counsel are not aware of any objections or other negative reaction from

the Class. Porter Decl. ¶ 22.

9. Lodestar Cross-Check

A lodestar calculation “measures the lawyers’ investment of time in the litigation” and

“provides a check on the reasonableness of the percentage award.” Vizcaino, 290 F.3d at 1050.

Under the lodestar method, the Court “must start by determining how many hours were reasonably

expended on the litigation, and then multiply those hours by the prevailing local rate for an attorney

of the skill required to perform the litigation.” Moreno v. City of Sacramento, 534 F.3d 1106, 1111

(9th Cir. 2008). In ERISA class action litigation, a national rate is appropriate because “ERISA

cases involve a national standard, and attorneys practicing ERISA law in the Ninth Circuit tend to

practice in different districts.” Mogck v. Unum Life Ins. Co. of Am., 289 F. Supp. 2d 1181, 1191

(S.D. Cal. 2003).

Class Counsel have spent nearly 6,000 hours litigating this case, with a lodestar of $3,019,025.

Decl. of Porter at ¶¶ 10; Decl. of Izard at ¶ 8. Thus, the lodestar multiplier of Class Counsel’s $7.49

million request will be approximately 2.48. Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.

2002) (upholding approval of 28% fee where lodestar cross-check resulted in a multiplier of 3.65).

Courts in other 401(k) proprietary fund cases have also approved lodestar multipliers greater than

3. See Gordan, No. 13-30184, Dkt. 144 at 6 (3.66 multiplier was “imminently reasonable”);

Kruger, No. 14-208, Dkt. 61 at 14–15 (M.D. N.C. Sept. 17, 2015) (3.69 multiplier was “within the

range of reasonableness”). Class Counsel’s ordinary hourly rates are provided for in the attached

Declarations of Mr. Porter and Mr. Izard. The lodestar multiplier will be even less by the end of

this litigation in light of Class Counsel’s additional communications with Class Members, oversight




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

of the settlement administrator, cooperation with the Independent Fiduciary, and oversight of

Franklin’s compliance with the Settlement Agreement.

Class Counsel have been extraordinarily efficient. In Kanawi, class counsel spent over 21,000

attorney hours. Kanawi v. Bechtel Corp., No. 06-cv-5566, 2011 WL 782244 (N.D. Cal. Mar. 1,

2011) (awarding 30% fee and $1,571,102.56 in costs).5 In In re Northrop Grumman ERISA Litig.,

class counsel spent over 23,000 hours. In re Northrop Grumman ERISA Litig., No. 06-cv-6213,

Dkt. 803 at 5 (C.D. Cal. Oct. 24, 2017) (awarding 33% fee and $1,159,114 in costs).

Class Counsel’s hourly rates used to calculate the lodestar are less than the rates used by the

few other firms who practice in this narrow area of law. As early as 2016, several courts across the

country approved hourly rates for attorneys bringing class actions alleging fiduciary violation with

respect to 401(k) plans that were far higher than the hourly rates claimed here three years later.6

Kruger, No. 14-208, Doc. 61 at 12–13 (approving hourly rates of $998 for attorneys with at least

25 years of experience; $850 for attorneys with 15–24 years of experience; $612 for attorneys with

5–14 years of experience $460 for attorneys with 2–4 years of experience; and $309 for paralegals

and clerks); Gordan, No. 13-30184, Doc. 120 at 29–30 (Br. 24–25) (same); Spano, Doc. 587, at 6–

7 (same). If these 2016 rates were used here instead of the rates Class Counsel assert, the lodestar

multiple would drop further, from 2.48 to 1.47. More recently, Magistrate Judge Cousins approved

a fee petition in this district in an ERISA 401(k) fiduciary breach class settlement which the lodestar

multiplier was 4.375 and the hourly rates were $600 to $875 per hour for attorneys with more than

10 years of experience, $325 to $575 per hour for attorneys with 10 years or less experience, and

5 Judge Breyer awarded thirty percent of the net settlement after deducting named plaintiff awards, the cost of settlement administration, and the costs and expenses reimbursed to class counsel. Based on the $40,000 requested in total for named plaintiff awards, $50,000 estimated cost of administration, and $430,000 in requested expense reimbursement, the net amount here would be $26,230,000 and the requested fee is 28.56% of that amount. 6 A proper lodestar calculation uses an attorney’s rates at the time of the fee award, rather than rates at the time the case was initiated. “Full compensation requires charging current rates for all work done during the litigation, or by using historical rates enhanced by an interest factor.” W.P.P.S., 19 F.3d at 1305 (using historical rates “inadequately compensate[s] [a] firm for the delay in receiving its fees”); see also Bouman v. Block, 940 F. 2d 1211, 1235 (9th Cir. 1991) (affirming use of current hourly rate “to compensate for the delay in receiving payment”).




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

$250 per hour for paralegals and clerks. Johnson v. Fujitsu Technology and Business of American,

Inc., No. 16-cv-3698, 2018 WL 2183253, *7 (N.D. Cal. May 11, 2018).

B. The Court Should Award Reimbursement of Class Counsel’s Costs.

Class Counsel have incurred $473,882.01 in expenses in litigating this case for the past three

years, and carried them for the duration of the case. Attorneys who have created a common fund

for the benefit of the class are entitled to reimbursement of reasonable litigation expenses from that

fund. Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482 at 483 (E.D. Cal. 2010); ALBA CONTE,

1 ATTORNEY FEE AWARDS §2:19 (3d. ed.). Expenses reimbursable from a common fund include

expert fees, travel, long-distance and conference telephone, postage, delivery services, and

computerized legal research. Id. These expenses are identified in the attached declarations of Mr.

Porter and Mr. Izard. Itemized records are also available if the Court requests to review them.

Counsel brought this case without guarantee of reimbursement or recovery, and thus had a

strong incentive to limit costs. They did so. The total costs in this matter, $473,882.01, are less than

half of the total costs approved in similar litigation in California that has gone past summary

judgment. E.g., Kanawi, 2011 WL 782244 at *2 (approving over $1.5 million in expenses); In re

Northrop Grumman ERISA Litig., Dkt. 803 at 5 (approving over $1.1 million in expenses). Each of

these expenses were actually incurred and were necessary to the successful prosecution of the

actions.7

C. The Court Should Approve Incentive Awards to the Class Representatives.

“Incentive awards that are intended to compensate class representatives for work undertaken

on behalf of a class ‘are fairly typical in class action cases.’” In re Online DVD, 779 F.3d at 943

(quoting Rodriguez v. West Publishing Corp., 563 F.3d 948, 958 (9th Cir. 2009)). Incentive awards

are generally approved so long as the awards are reasonable and do not undermine the adequacy of

the class representatives. See Radcliffe v. Experian Info. Solutions, 715 F.3d 1157, 1164 (9th Cir.

2013) (finding incentive award must not “corrupt the settlement by undermining the adequacy of

7 The request includes $5,000 in anticipated travel expenses to the fairness hearing.




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the class representatives and class counsel”). Such awards recognize class representatives’

“willingness to act as a private attorney general.” Rodriguez, 563 F.3d at 959.

Here, Mr. Cryer and Ms. Fernandez have represented the Class through years of litigation and

have taken the risks associated with having their names associated with this high-profile class case.

The Plaintiffs braved arguments that they were in breach of their severance agreement with Franklin

by virtue of their role in the case. They came forward to initiate their respective actions and

remained in contact with Class Counsel throughout the litigation. They responded to document

requests and interrogatories, reviewed and approved pleadings, assisted with discovery, and Mr.

Cryer sat for deposition. Porter Decl. ¶ 20. After Mr. Cryer was denied leave to amend, Ms.

Fernandez was integral to asserting prohibited transaction claims, which ultimately benefit the

entire Class. Moreover, the amounts that Plaintiffs intend to request — $25,000 for Plaintiff Cryer,

and $15,000 for Plaintiff Fernandez — are consistent with awards in other cases. See, e.g., Kruger

v. Novant Health, Inc., No. 1:14CV208, 2016 WL 6769066, at *6 (M.D.N.C. Sept. 29, 2016)

(awarding class representatives $25,000 each for their contributions); In re Northrop Grumman

ERISA Litig., No. 06-cv-6213, Dkt. 803 at 16 (C.D. Cal. Oct. 24, 2017) (awarding class

representatives $25,000 each from $16.75 million settlement concerning allegedly improper 401(k)

fees and investments).

The total amount requested, $40,000, represents only 0.15% of the monetary settlement. The

Ninth Circuit recently approved similar incentive awards. Online DVD-Rental, 779 F.3d at 948

(approving incentive awards that were “a mere .17% of the total settlement.”).

III. CONCLUSION

For the foregoing reasons, Plaintiffs request that the Court approve a fee award of $7,490,000

and a cost award of $473,882.01 to Class Counsel, and incentive awards of $25,000 to Class

Representative Cryer and $15,000 to Class Representative Fernandez.

Dated: July 30, 2019 Respectfully submitted,

/s/ Mark G. Boyko




4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mark G. Boyko, pro hac vice Gregory Y. Porter, pro hac vice Bailey & Glasser LLP 1055 Thomas Jefferson Street, NW Suite 540 Washington, DC 20007 Telephone: (202) 463-2101 Facsimile: (202) 463-2103 [email protected] [email protected]

Mark P. Kindall, Cal. Bar No. 138703 Robert A. Izard, pro hac vice IZARD KINDALL & RAABE LLP 29 South Main Street, Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6292 Facsimile: (860) 493-6290 [email protected] [email protected]

Joseph A. Creitz, Cal. Bar No. 169552 Lisa S. Serebin, Cal Bar No. 146312 CREITZ & SEREBIN LLP 100 Pine Street, Suite 1250 San Francisco, CA 94111 Telephone: (415) 466-3090 Facsimile: (415) 513-4475 [email protected] [email protected]

Attorneys for Plaintiffs


mailto:[email protected]






4:16-CV-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on this 30th day of July 2019, a true and correct copy of

the foregoing was filed with the Court using the CM/ECF system and service upon all participants

in this case who are CM/ECF users will be accomplished by operation of that system.

/s/ Mark G. Boyko


Declaration of Gregory Y. Porter in Support of Motion for Attorneys’ Fees 4:16-cv-4265-CW consolidated with 3:17-cv-6409-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mark P. Kindall, Cal. Bar No. 138703 [email protected] Robert A. Izard, pro hac vice [email protected] IZARD KINDALL & RAABE LLP 29 South Main Street, Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6292 Gregory Y. Porter, pro hac vice [email protected] Mark G. Boyko, pro hac vice [email protected] Bailey & Glasser LLP 1054 31st Street, NW Suite230 Washington, DC 20007 Telephone: (202) 463-2101 Joseph A. Creitz, Cal. Bar. No. 169552 [email protected] CREITZ & SEREBIN LLP 100 Pine Street, Suite 1250 San Francisco, CA 94111 Telephone: (415) 466-3090 Attorneys for the Plaintiffs

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARLON H. CRYER, individually and ) Case No. 4:16-cv-4265-CW as representative of a class of ) (lead case consolidated with) similarly situated persons, ) Case No. 3:17-cv-6409-CW ) Plaintiffs, ) DECLARATION OF GREGORY Y. ) PORTER IN SUPPORT OF MOTION ) FOR ATTORNEYS’ FEES ) FRANKLIN RESOURCES, INC., et al., ) ) Judge: Hon. Claudia Wilkens Defendants. ) Courtroom: 2, 4th Floor

Case 4:16-cv-04265-CW Document 163-1 Filed 07/30/19 Page 1 of 8







2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I, Gregory Y. Porter, declare as follows:

1. I am a partner at the law firm Bailey & Glasser LLP (“Bailey & Glasser”). Bailey &

Glasser is co-lead counsel for the certified class in this action. I submit this declaration in

support of Plaintiff’s Application for Attorneys’ Fees, Reimbursement of Expenses and

Named Plaintiff Incentive Awards. If called as a witness, I would and could competently

testify to these facts.

2. I have been actively involved in the prosecution of this Action, am familiar with its

proceedings, and have personal knowledge of the matters set forth herein based on my active

supervision and participation in all material aspects of the Actions.

3. As outlined in Plaintiff’s Motion for Class Certification, Dkt. 53, I and my firm have

extensive experience in class action litigation and particular experience in class action

litigation under the Employee Retirement Income Security Act of 1974 (“ERISA”).

4. To my knowledge, nineteen other class actions have been filed since the enactment of

ERISA alleging fiduciary breaches from the selection or continued inclusion of proprietary

funds in a 401(k) plan. Exhibit A to this declaration identifies each action of which I am aware.

5. Exhibit A also identifies the gross settlement amount and the approximate number of

class members identified in court filings for each case, and averages those to calculate a gross

average recovery per class member.

6. My associate, Mark Boyko, and I have extensive experience representing plaintiffs in

this narrow area of law. Exhibit A to my declaration also identifies those settlements in which

Mr. Boyko or I were attorneys of record for the plaintiffs.



3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7. Class Counsel selected the Angeion Group as the Settlement Administrator after

reviewing four competitive bids. In the past two years, Bailey Glasser has not retained the

Angeion Group as an administrator for any class action settlement.

8. In preparation for filing this motion, I reviewed Bailey Glasser’s time and out-of-

pocket expenses in connection with the current litigation, as well as the time and expenses of

local counsel, Joseph Creitz, of the law firm Creitz & Serebin LLP.

9. The information in this declaration regarding my firm’s time and expenses, as well as

that of Mr. Creitz, is taken from contemporaneous time and expense printouts prepared and

maintained by the firms in the ordinary course of business. Time reflected in the lodestar

calculation and the expenses for which payment is sought are reasonable in amount and were

necessary for the effective and efficient prosecution and resolution of the litigation. Class

Counsel prosecuted this case on a wholly contingent basis, and has received no compensation

to date for their litigation expenses or time.

10. Bailey Glasser devoted a total of 4,454.3 hours to the prosecution of this litigation

from inception through July 15, 2019, excluding time spent on the fee petition and supporting

materials. The total lodestar amount for attorney time based on the firm’s current rates is

$2,111,250. A breakdown of Bailey Glasser’s lodestar as of July 15, 2019, as well as the

lodestar of Mr. Creitz, is as follows:

Name Years of Practice Rate Hours Lodestar Greg Porter 23 $750 850 $347,055 Ryan Jenny 20 $600 30.1 $18,060 Tillman Breckenridge 18 $600 33.2 $19,920 Mark Boyko 15 $600 2,210.9 $1,326,540 Alex Serber 2 $300 781.4 $234,420 Melissa Kestner-Clay Sr. Paralegal $225 362.8 $81,630 Sue Polston Sr. Paralegal $225 606.3 $121,260 Annie Dimmick Legal Assistant $150 21.3 $3,195 Joseph Creitz 27 $750 41.9 $31,425 Total Bailey Glasser 4,454.3 $2,111,250 Total Creitz & Serebin 41.9 $31,425



4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11. Attached hereto as Exhibit B is a chart that breaks down the total hours spent by each

attorney by the areas and tasks where their time was spent in the case. In addition, Exhibit B

shows that under the hourly rates approved as market rates for 401(k) proprietary fund class

ERISA litigation in Krueger v. Ameriprise Fin., 2015 WL 4246879 (D. Minn. July 13, 2015),

Bailey Glasser’s lodestar would total $3,966,143 and Mr. Creitz’ lodestar would total $35,615.

12. We anticipate, based on prior experience, spending a minimum of 30 additional hours

in order to communicate with class members, attend the Fairness Hearing, and monitor

Defendants’ compliance with the settlement. The time records above to not include future time

spent on this case.

13. The time records also do not include work performed to date on this Motion or work

performed by summer associates or by attorneys or paralegals who billed fewer than five hours

on this litigation. None of the expenses sought to be reimbursed include any expenses incurred

relating to seeking reasonable attorneys’ fees and expenses in this matter.

14. Biographical details for the Bailey Glasser attorneys who worked on this case are

included in the firm’s resume, which was filed in connection with Plaintiff’s Motion for Class

Certification.

15. The hourly rates show in paragraph 10 are Bailey Glasser’s normal rates for ERISA

litigation. Bailey Glasser’s ERISA work is a specialized national practice; we do not charge

differential rates based on the location where a lawsuit is filed. Courts have approved Bailey

Glasser’s fees in class actions litigated all over the country, most recently in Schultz v. Edward

D. Jones & Co., L.P., 16-cv-1346, Dkt. 113 (E.D. Mo. April 22, 2019) and Johnson v.

Providence Health & Services, 17-cv-1779, Dkt. 69 (W.D. Wash. July 9, 2019).



5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

16. To date, Bailey Glasser’s out-of-pocket expenses for this litigation are $296,240.61,

broken down as follows:

EXPENSE DESCRIPTION AMOUNT

Court costs (pro hac vice fees) $4,154.25

Meals, Hotels & Transportation $65,153.47

Litigation Fund (Experts, Mediation and Data Storage)

$256,192.25

Transcripts $24,913.26

Postage, copying and delivery $3,175.24

PACER and Westlaw $6,260.93

TOTAL EXPENSES: $359,859.40

17. In addition, Mr. Creitz has incurred filing fees of $400 and service of process costs of

$37.95. These expenses include $5,000 in estimated travel expenses related to the Fairness

Hearing and represent costs that would normally be charged to a fee-paying client in the

private legal marketplace.

18. The expenses pertaining to this case are reflected in the books and records of my firm.

These books and records are prepared from expense vouchers, check records and other

documents, and are an accurate record of the expenses incurred in the prosecution of this

matter.

19. In this matter, the representation agreements signed by Plaintiffs Marlon Cryer and

Nelly Fernandez provided for payment of attorneys’ fees up to one-third (33.33%) of the gross

value of any monetary award obtained after the litigation costs advanced by the attorneys are

deducted.



6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

20. Mr. Cryer and Ms. Fernandez were instrumental in the achievement of this settlement.

They responded to document requests and interrogatories, reviewed and approved pleadings,

and assisted with discovery. Mr. Cryer sat for his deposition and Ms. Fernandez was prepared

to until Defendants determined not to take one. After Mr. Cryer was denied leave to amend,

Ms. Fernandez was integral to asserting prohibited transaction claims, which ultimately

benefitted the entire Class.

21. Details and material supporting the time records and expenses referenced in this

declaration are available upon the request of the Court.

22. To date, Class Counsel are not aware of any objections or other negative reaction from

the Class.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 29th day of July, 2019 at Washington, District of Columbia.

By: /s/ Gregory Y. Porter Gregory Y. Porter


EXHIBIT A


Case Recovery Class MembersClass Member

Ave. Gross Recovery

Cryer Attorneys Represented

Plaintiffs

Bilewicz v. FMR Co ., Nos. 13-cv-10636 and 14-cv-10035 (D. Mass.) $12,000,000 92,498 $129.73 XDennard v. Transamerica Corp ., No. 15-cv-30 (N.D. Iowa) $3,800,000 25,581 $148.55 X

Figas v. Wells Fargo , No. 08-cv-4546 (D. Minn.) $17,500,000 230,292 $75.99 XGordan v. Mass. Mutual Life Ins ., No. 13-cv-30184 (D. Mass.) $30,900,000 32,000 $965.63 X

Kanawi v. Bechtel Corp ., No. 06-cv-5566 (N.D. Cal.) $18,500,000 42,733 $432.92 XKrueger v. Ameriprise Fin., No. 11-cv-2781 (D. Minn.) $27,500,000 46,460 $591.91 X

Leber v. Citigroup 401(k) Plan Inv. Comm., No. 07-cv-9329 (S.D.N.Y.) $6,900,000 252,360 $27.34 XMain v. American Airlines, Inc., 16-cv-473 (N.D. Tex.) $22,000,000 103,456 $212.65

Mehling v. New York Life Ins. Co ., No. 99-cv-5417 (E.D. Penn.) $14,000,000 45,643 $306.73Moreno v. Deutsche Bank Am. Holding Corp., No. 15-cv-9936 (S.D.N.Y.) $14,000,000 36,081 $388.02

Nolte v. Cigna Corp., No. 07-cv-2046 (C.D.Ill.) $35,000,000 202,459 $172.87 XRichards-Donald v. Teachers Insurance and Annuity Association of Amer ., No. 15-cv-8040 (S.D. N.Y.) $5,000,000 26,442 $189.09 X

Sims v. BB&T Corp ., No. 15-cv-732 (M.D.N.C.) $24,000,000 72,632 $330.43Urakhchin v. Allianz Asset Mgmt. of Ameri., LP , No. 15-cv-1614 (C.D. Cal.) $12,000,000 5,810 $2,065.40

Will v. General Dynamics Corp ., No. 06-cv-698 (S.D. Ill.) $15,150,000 156,799 $96.62 XVelazquez v. Massachusetts Financial Services Co., No. 17-cv-11249 (D. Mass) $6,875,000 3,000 $2,291.67

Price v. Eaton Vance Corp., 18-cv-12098 (D. Mass) $3,450,000 2,600 $1,326.92Pease v. Jackson National Life Ins. Co., No. 17-cv-284 (W.D. Mich.) $4,500,000 11,454 $392.88

Schapker v. Waddell & Reed Financial Inc., No. 17-cv-2365 (D. Kan.) $4,875,000 4,580 $1,064.41

Cryer v. Franklin $26,750,000 8,629 $3,100.01

Averages of Proprietary Fund Settlements excluding Cryer v. Franklin $14,628,947 73,309 $199.55


IZARD DECLARATION 4:16-cv-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

MARLON H. CRYER, individually and on behalf of a class of all others similarly situated, and on behalf of the Franklin Templeton 401(k) Retirement Plan,

Plaintiffs,

v.

FRANKLIN RESOURCES, INC., the Franklin Templeton 401(k) Retirement Plan Investment Committee, and DOES 1-25,

Defendants.

Lead Case No. 4:16-cv-04265-CW [Consolidated with Case No. 4:17-cv-06409-CW]

DECLARATION OF ROBERT A. IZARD IN SUPPORT OF PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND MOTION FOR AWARD OF ATTORNEYS’ FEES AND EXPENSES Judge: Hon. Claudia Wilken

Robert A. Izard respectfully submits this Declaration in Support of Plaintiffs’ Motion for

Final Approval of Class Action Settlement and Motion for Award of Attorneys’ Fees and Expenses,

and declares under penalty of perjury under the laws of the United States of America:

1. I am a partner at Izard, Kindall & Raabe, LLP (“IKR”), and a member in good

standing of the bar of the State of Connecticut. IKR is co-lead counsel for the certified class in this


2 IZARD DECLARATION 4:16-cv-04265-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

action.

2. I have been actively involved in the prosecution of this Action, am familiar with its

proceedings, and have personal knowledge of the matters set forth herein based on my active

supervision and participation in all material aspects of the Action and if called to do so, I could and

would testify competently thereto.

3. IKR has extensive experience in complex class action litigation and particular

experience in class action litigation under the Employee Retirement Income Security Act of 1974

(“ERISA”). IKR has served as lead or co-lead counsel in numerous ERISA class actions in courts

throughout the country. A copy of the firm’s resume was filed in connection with Plaintiff’s Motion

for Class Certification. ECF No. 53-7.

4. IKR participated in all aspects of this litigation, from inception through settlement.

As a result of detailed factual investigation that preceded the filing of the complaint, the information

obtained in discovery, the lengthy motions practice in this case, and the firm’s extensive experience

in ERISA class action litigation, we support the proposed settlement and believe it to be fair,

reasonable, adequate and in the best interests of the certified Class.

5. Class Counsel selected the Angeion Group as the Settlement Administrator after

reviewing four competitive bids. In the past two years, IKR has not retained the Angeion Group

as an administrator for any class action settlement.

6. In preparation for filing this motion, I reviewed IKR’s time and out-of-pocket

expenses in connection with the current litigation.

7. The information in this declaration regarding my firm’s time and expenses is taken

from contemporaneous time and expense printouts prepared and maintained by my firm in the

ordinary course of business. The time reflected in my firm’s lodestar calculation and the expenses

for which payment is sought are reasonable in amount and were necessary for the effective and

efficient prosecution and resolution of the litigation. IKR prosecuted this case on a wholly

contingent basis, and has received no compensation to date for either its litigation expenses or its

time.



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8. IKR devoted a total of 1490.25 hours to the prosecution of this litigation from

inception through July 15, 2019, excluding time spent on the fee petition and supporting materials.

The total lodestar amount for attorney time based on the firm’s current rates is $876,581.25. A

breakdown of IKR’s lodestar as of July 15, 2019 is as follows:

Name Years of Practice Rate Hours Lodestar Robert A. Izard 36 $925.00 428.25 $396,131.25 Mark P. Kindall 31 $850.00 105 $89,250.00 Douglas P. Needham 12 $550.00 384 $211,200.00 Jennifer Somers 15 $300.00 411 $123,300.00 Oren Faircloth 3 $350.00 162 $56,700.00 Total 1490.25 $876,581.25

9. Attached hereto as Exhibit A is a chart that breaks down the total hours spent by

each attorney by the areas and tasks where their time was spent in the case.

10. Biographical details for the IKR attorneys who worked on the case are included at

the end of the Firm’s resume, which was filed in connection with Plaintiff’s Motion for Class

Certification. ECF No. 53-7.

11. The hourly rates shown in paragraph 8 and Exhibit A are IKR’s normal rates for

both hourly customers and class action work. IKR’s class action work, which represents the large

majority of its business, is a specialized national practice; we do not charge differential rates based

on the location where a lawsuit is filed. Courts have approved IKR’s fees in class actions litigated

all over the country.

12. In the course of our nationwide practice, attorneys at IKR have worked with many

of the firms that typically represent plaintiffs in ERISA class actions nationwide, just as, in this

case, we are working collaboratively with attorneys from Bailey & Glasser. As a result, we are

familiar with the rates charged by other firms in our industry. While there are invariably differences

in rates between different firms – and even between rates for lawyers with within the same firm

with the same number of years of practice – in our experience each firm’s rates are broadly in line

with rates of other firms with nationwide ERISA class action practices, and have been the basis for

awards of fees in courts around the country.



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13. By way of comparison, Defendants in this action are represented by O’Melveny &

Myers LLP, “an international, 800-lawyer firm with 15 offices in the world’s financial and political

centers.” (https://www.omm.com/our-firm/history). While Plaintiffs do not have access to a

comprehensive list of rates charged by attorneys from O’Melveny & Myers, a recent filing in Open

Source Sec., Inc. v. Perens, No. 17-CV-04002-LB, 2018 WL 2762637 (N.D. Cal. June 9, 2018),

shows partners with 13 and 24 years of experience billing at $880 and $995 per hour, respectively,

and junior associates with three years of practice billing at $535 per hour. The Court found these

rates to be “at or below the median rage for lawyers of comparable experience doing comparable

work in the Bay Area.” Id. at *3. IKR’s rates are somewhat lower than the rates approved by the

Open Source court.

14. To date, IKR’s out-of-pocket expenses for this litigation are $101,288.17, broken

down as follows:

EXPENSE DESCRIPTION AMOUNT

Court costs (pro hac vice fees) $620.00

Meals, Hotels & Transportation $21,158.16

Litigation Fund - Experts $87,263.58

Transcripts $4,127.05

Postage & delivery $330.97

PACER $84.90

TOTAL EXPENSES: $113,584.66

15. The expenses shown in paragraph 13 are all of a type that would normally be

charged to a fee-paying client in the private legal marketplace. I have included $2,500 in the

estimated travel expenses related to the Fairness Hearing.

I declare under penalty of perjury that the foregoing is true and correct. Executed this 30th

day of July, 2019, in West Hartford, Connecticut. /s/ Robert A. Izard Robert A. Izard


Declaration of Robert A. Izard

Exhibit A Izard, Kindall & Raabe, LLP Hours/Lodestar Breakdown by Topic Data as of 7/15/2019

Attorney Robert Izard Mark Kindall Douglas Needham Oren Faircloth Jennifer Somers Totals Title Partner Partner Associate Associate Attorney Years of Practice 36 31 12 3 15 Hourly Rate $925.00 $850.00 $550.00 $350.00 $300.00 Hours Lodestar Hours Lodestar Hours Lodestar Hours Lodestar Hours Lodestar Hours Lodestar Factual Inv. 0 0 1.75 1,487.50 32.25 17,737.50 0 0 402.75 120,825 436.75 140,050.00 Client Contact 0 0 0 0 0 0 0 0 0 0 0 0 Pleadings/MTD 13.25 12,256.25 2.75 2,337.50 32.25 17,737.50 0 0 0 0 48.25 32,331.25 Depos/discovery 8.75 8,093.75 0.25 212.50 134.25 73,837.50 0 0 8.25 2,475 151.50 84,618.75 Class Cert 15.50 14,337.50 24.00 20,400.00 14.5 7,975.00 0 0 0 0 54.00 42,712.50 MSJ 4.75 4,393.75 0 0 49 26,950.00 0 0 0 0 54.75 31,343.75 Other Motions 19.25 16,187.50 2.75 2,337.50 9.75 5,362.50 0 0 0 0 30.00 23,887.50 Experts 91.50 84,637.50 35.25 29,962.50 39.5 21,725.00 0 0 0 0 166.25 136,325.00 Trial Prep 105.75 97,818.75 0 0 64.75 35,612.50 162 56,700 0 0 332.50 190,131.25 Settlement 169.50 156,556.25 38.25 32,512.50 7.75 4,262.50 0 0 0 0 215.50 193,331.25 Totals 428.25 396,131.25 105 89,250 384 211,200 162 56,700 411 123,300 1490.25 876,581.25

,


DECLARATION OF STEWART BROWN, PHD., CFA

1. I hold a PhD. in finance from the University of Florida (1974) and the professional

designation of Chartered Financial Analyst (charter# 5831 ). I am currently Professor Emeritus

of Finance at Florida State University. I am author or co-author of six law review articles on

mutual fund investment advisory fees. My vita is included at Appendix A.

2. My assignment was to calculate the savings, going forward, resulting from the settlement

of Cryer v. Franklin Resources, Inc., 16-cv-4265 (N.D. Cal) and certain plan changes made since

the commencement of that litigation. Savings will occur in three areas. First, replacement of the

Franklin US Government Money Fund R6 with a stable value fund managed by Well Fargo.

Second, Franklin has agreed to increase the contribution rate from 75 to 85 percent. Third,

replacement of the Franklin Target Date Funds with funds with lower expense ratios. I calculated

saving over the three-year settlement period as well as for 5 and 10 years in the future under the

assumption that changes are made permanently.

3. Stable Value Fund Savings: Replacement of the Franklin US Government Money Fund

R6 with a stable value fund managed by Well Fargo has resulted and will continue to result in

substantial savings. I obtained the returns on the Franklin US Government Money Fund R6 from

Morningstar. For 2018, the fund yielded 1.34 percent. A stable value fund managed by Well

Fargo returned 2.11 percent over the one-year period ending June 30, 2018. The difference

between these two return numbers (.77 percent) multiplied by the asset level involved represent

annual saving resulting from the change. Since the change occurred as of June of 2018, I

calculated saving as sum of the six-month saving for the end of 2018 and the 3, 5 and 10 year

saving from 2019 forward.

1


Results of my calculations are as follows:

Undiscounted Present Value Saving of Saving

Stable Value Fund Saving

3.5 Year Saving 7118 to 12/21 2,108,899 2,022,243

5.5 Year Saving 7/18 to 12/23 3,313,984 3,101,883

10.5 Years Saving 7/18 to 12/28 6,326,697 5,558,578

Present value calculations are based on US Government bond yields as of February 1, 2019.

4. During the calendar year 2018, Franklin contributions amounted to $32,116, 941 based on

a 75 percent contribution rate. Had the contribution rate been the agreed rate of 85 percent,

Franklin would have contributed $38,896,185. I assumed that the new contribution rate would be

applied as of the beginning of 2020 and the contribution would grow at a 6.86 percent compound

annual rate. This is the compound annual growth rate in the number of covered employees that

occurred between the end of 2010 and June 30, 2018.

Increased Contribution Rate Saving Undiscounted Present Value Growth Rate 6.86 Percent Saving of Saving

3 Year Saving 2020-2022 16,776,135 15,572,701

5 Year Saving 2020-2024 29,966,003 27,089,242

10 Year Saving 2020-2029 71,720,635 60,072,108

2


5. Franklin Target Date Funds had total assets as of the end of 2018 of about $114 million

and I calculated a weighted average expense ratio of .607. The weighted average expense ratio of

the added State Street Target Date funds is .1. Thus, a switch to less expensive funds will result

in saving going forward. On the advice of counsel, I calculated saving under the assumption that

half of the assets were converted to lower expense funds as of the end of 2019. It was assumed

that assets level will continue to grow at a 6.86 percent compound annual rate. The results of that

analysis are as follows.

Target Date Fund Saving

Growth Rate 6.86 Percent Undiscounted Present Value Saving of Saving

3 Year Saving 2020-2022 1,059,465 1,019,777

5 Year Saving 2020-2024 1,892,446 1,786,052

10 Year Saving 2020-2029 4,529,381 4,030,977

6. I calculated the present value of total saving resulting from the settlement as follows:

Present Value of Total Stable Target Total

Saving Value Increased Date Saving

Saving Contribution Saving Rate Saving

3 Year Saving 2,022,243 15,572,701 1,019,777 18,614,721

5 Year Saving 3,101,883 27,089,242 1,786,052 31,977,177

10 Year Saving 5,558,578 60,072,108 4,030,977 69,661,663

3


I declare under penalty of perjury that the foregoing is true and correct.

Executed this 26th day of July, 2019.

4


APPENDIX A


Stewart L. Brown Ph. D, CFA 2364 Cypress Cove Dr. Telephone:(850) 576-6329 Tallahassee, Florida 32306 Cell : (850) 445-3458 E-Mail:[email protected] EDUCATION Ph.D., Business Administration, Major; Finance; Minors Economics, Quantitative

Analysis, University of Florida, December, 1974 MBA, Finance Concentration, University of Florida, June 1971 BSBA, Finance Major, Cum Laude, University of Florida, June 1970 EMPLOYMENT

January 2005 to Present: Professor Emeritus, Florida State University January 2000 to December 2004: Service Professor of Finance, Florida State University.

September 1988 to December 1999: Professor of Finance, Florida State University. August 1985 to March 1986: Executive Director, (Florida) Comptroller's Task

Force on Securities Regulation. September 1979 to August 1988: Associate Professor of Finance, Florida State University. September 1974 to August 1979: Assistant Professor of Finance Florida State University Other Significant Experience

Developed an Internet Course on Investment Planning for the FSU Center for Professional Development. The course is part of a very successful series offered to candidates seeking the Certified Financial Planner professional designation.

Advisor to Florida State Board of Administration, Sept. 1983 to June 2006. The SBA is a 100 billion dollar public pension fund.

Academic Intern, Chicago Board of Trade, June 1980. Conducted several two-week courses on hydrocarbon project evaluation for the

Petroleum Training Institute (Nigeria) and Roy M. Huffington & Co. (Indonesia). Also


conducted one week courses for Amoco and Citgo and lectured on real options for British Petroleum in Aberdeen, Scotland. Awarded Professional Designation - Chartered Financial Analyst, September,1979.(Charter # 5831) Retained by the Securities and Exchange Commission to represent the

Commission in administrative hearings against stockbrokers accused of mishandling retail securities accounts. Testified twice for the Commission.

Presentations in the Broker Dealer Training Program jointly offered by the Florida

Office of the Comptroller and the North American Securities Administrators Association, annually 1992-98. Lecture on churning, suitability, collateralized mortgage obligations, institutional suitability, options and micro cap fraud. Trained securities examiners on computer analysis of retail securities accounts.

Conducted several one-day training seminars on computer evaluation of retail brokerage accounts for the Florida Division of Securities.

Member of Derivatives Task Force sponsored by Florida Association of Court Clerks & Comptrollers, 1995.

Instructor, Florida School of Banking, 1971 to 1991. AFFILIATIONS: Financial Analysts Federation, Jacksonville Financial Analysts Society PUBLICATIONS:

“Mutual Fund Advisory Fees: An Objective Fiduciary Standard”, forthcoming University of Pennsylvania Journal of Business Law, 21

“Some Clarity on Mutual Fund Fees,” with Steven Pomerantz, University of Pennsylvania Journal of Business Law 20, 767-814. “Mutual Funds and the Regulatory Capture of the SEC”, University of Pennsylvania Journal of Business Law 19, 701-749. “Mutual Fund Advisory Fee Litigation: Some Analytical Clarity,” Journal of Business and Securities Law, Spring, 2016.

“Mutual Fund Advisory Fees: New Evidence and a Fair Fiduciary Duty Test,” co-authors, Oklahoma Law Journal, Spring, 2008.

“Mutual Fund Advisory Fees: The Cost of Conflicts of Interest,” co-author, Journal of Corporation Law, Spring 2001.


“On the Existence of Sub-Standard Securities Markets,” co-author in Advances in Financial Economics, Hershey, M., John,K., and Makhija, A., eds., London, Elsevier Sciences Inc., Spring 2001.

“Design Considerations for Large Public Sector Defined Contribution Plans,” co-author, Financial Services Review, Fall 2000. "Measuring Strategic Investment Value." co-author, Papers and Proceedings of The Society of Petroleum Engineers, October, 2000. Fundamentals of Energy Futures and Options, with Steven Errera, Pennwell Press, September, 1999.

“Churning: Excessive Trading in Retail Securities Accounts” Fall-1996, Financial Services Review.

"Limited Partnerships and the Emerging Tort of Suitability Under the Florida

Securities and Investor Protection Act," Florida Bar Journal, co-authors, January 1992.Reprinted in Securities Arbitration 1992, Practising Law Institute, July 1992.

"Investment Aspects Relating to the Suitability of Limited Partnership Interests," co-

authors, in Securities Arbitration1991, Practising Law Institute, New York, July 1991.

"Calculating Damages in Churning and Suitability Cases," in Securities Arbitration 1991, co-author, Practising Law Institute, New York, July 1991.

"Quantitative Measures and Standards of Excessive Trading Activity," in Securities Arbitration 1991, Practising Law Institute, New York, July 1991. "Interest Rate Sensitivity and Maturity Gap (Mis)Management: A Critique", The

Review of Research in Banking and Finance, co-author,(Fall 1988). "Using Stock Index Futures to Adjust Portfolio Betas," Akron Business Review,

co-author, (Fall 1987). "A Reformulation of the Portfolio Model of Hedging:Reply" American Journal of

Agricultural Economics, (November 1986), Trading Energy Futures.QUORUM Books (Westport,CT) with Steven Errera, March 1987. "A Reformulation of the Portfolio Model of Hedging," American Journal of Agricultural Economics, (August 1985),

"Petroleum Futures Trading: Some Practical Applications of the Trade; Discussion," Review of Research in Futures Markets, Vol.3,#2, 1984, co-author.


"Trading the Paper Refinery," Commodities,(July 1983),co-author. "How Bank Bond Traders Use Financial Futures: Discussion," Review of Research

in Futures Markets, Vol. 1, 1982 co-author "Assimilating Earnings and Split Information - Is the Capital Market Becoming More

Efficient?," co-author, Journal of Financial Economics, (December 1981),. "Heating Oil Spreads Ignite in U.S.,U.K.," Commodities, (September 1981) co-author. "Federal Regulation of Currency Futures Trading, "co-author, Florida State University Law Review, (Spring 1981) "Biased Estimates and Unstable Betas," co-author, Journal of Finance, (March,1980),. "Earnings Announcements and Auto-Correlation: An Empirical Test," Journal of

Financial Research, (Fall 1979). "Auto-Correlation, Market Imperfections, and the Capital Asset Pricing Model,"

Journal of Financial and Quantitative Analysis, (December 1979). "Earnings Changes, Stock Prices and Market Efficiency," Journal of Finance,

(March 1978). "Choice Dilemma as a Predictor of Group Risk Behavior," co-author, Decision

Sciences, (November 1976). EXPERT WITNESS EXPERIENCE Testified in excess of seventy times, largely in proceedings related to retail

securities and stockbroker mis-conduct, e.g., churning, suitability and associated damages. Testified in state (Florida) and federal court as well as in arbitration hearings conducted by The American Arbitration Association, The National Association of Securities Dealers and The New York Stock Exchange. Testified for the Securities & Exchange Commission, the Florida Division of Securities and the Iowa Securities Department in administrative hearings related to stockbroker licensing. Grand Jury testimony for the US Justice Department (Middle District of Florida) in the only known criminal churning case. Worked with the FBI (Tampa Office) on screening for micro-cap fraud. Extensive experience in options and penny stock cases. Institutional investments experience including mutual funds, bank trust departments, exchange funds and money management cases.


[PROPOSED] ORDER GRANTING ATTORNEYS’ FEES 4:16-cv-4265-CW consolidated with 3:17-cv-6409-CW

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mark P. Kindall, Cal. Bar No. 138703 [email protected] Robert A. Izard, pro hac vice [email protected] IZARD KINDALL & RAABE LLP 29 South Main Street, Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6292 Gregory Y. Porter, pro hac vice [email protected] Mark G. Boyko, pro hac vice [email protected] Bailey & Glasser LLP 1054 31st Street, NW Suite230 Washington, DC 20007 Telephone: (202) 463-2101 Joseph A. Creitz, Cal. Bar. No. 169552 [email protected] CREITZ & SEREBIN LLP 100 Pine Street, Suite 1250 San Francisco, CA 94111 Telephone: (415) 466-3090 Attorneys for the Plaintiffs

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARLON H. CRYER, individually and ) Case No. 4:16-cv-4265-CW as representative of a class of ) (lead case consolidated with) similarly situated persons, ) Case No. 3:17-cv-6409-CW ) Plaintiffs, ) [PROPOSED] ORDER ON ) PLAINTIFFS’ MOTION FOR ) ATTORNEYS’ FEES, ) REIMBURSEMENT OF EXPENSES v. ) AND NAMED PLAINTIFF ) INCENTIVE AWARDS ) FRANKLIN RESOURCES, INC., et al., ) Hearing Date: ) Time: ) Judge: Hon. Claudia Wilkens Defendants. ) Courtroom: 2, 4th Floor








2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The Court having received and considered Plaintiffs’ Motion for Attorneys’ Fees,

Reimbursement of Expenses and Incentive Awards (the “Fee Motion”) in the above-

captioned action (the “Action”) and the supporting papers, including the Class Action

Settlement Agreement dated February 12, 2019 (the “Settlement Agreement”), the

declarations of counsel and the supporting Memorandum of Law, and having held a hearing

on the Fee Motion on September 24, 2019, and finding good cause for granting the Fee

Motion, makes the following findings of fact and conclusions of law:

1. The Settlement Agreement confers substantial benefits on the Settlement Class.

2. The benefits that the Settlement Agreement confers on the Settlement Class are

immediate and readily quantifiable upon Judgment in the Action becoming Final (as defined

in the Settlement Agreement).

3. Class Counsel, Bailey Glasser LLP and Izard, Kindall & Raabe, LLP, and

Local Counsel Joseph Creitz (collectively, “Class Counsel”), vigorously and effectively

pursued the claims in this complex case on behalf of the Plaintiffs and the Class.

4. The Settlement Agreement was obtained as a direct result of Class Counsel’s

advocacy.

5. The Settlement Agreement was reached following three years of litigation and

extensive, good-faith negotiations between Class Counsel and Counsel for Defendants and

was not the product of collusion.

6. Members of the Settlement Class were advised in the Class Notice approved by

the Court that Class Counsel intended to seek attorneys’ fees of $7,490,000, and to be

reimbursed for the expenses they incurred in prosecuting the Action from the Settlement

Fund.



3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7. Counsel who recover a common benefit for a class of persons other than their

client are entitled to a reasonable attorneys’ fees from the Settlement Fund as a whole. See,

e.g., Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980).

8. Class Counsel’s requested fee is 28 percent of the amount of the Settlement.

9. In the Ninth Circuit, the “usual range” for a percentage award of attorneys’

fees in a common fund case is 20–30 percent. Vizcaino, 290 F.3d at 1047. The midpoint of

the range is the “benchmark” (id.), which can be adjusted upwards or downwards “to account

for any unusual circumstances involved in [the] case.” Alberto v. GMRI, Inc., No. CIV 07-

1895 WBS DAD, 2008 WL 4891201, at *11 (E.D. Cal. Nov. 12, 2008) (quoting Paul,

Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989).

10. A slight upward adjustment from 25 percent to 28 percent is appropriate in this

case. Class Counsel obtained the highest ever per-participant recovery in a case of this type.

The case carried significant risks, including novel risks related to the Named Plaintiffs (and

other members of the Class) previously signing covenants not to sue Defendants. There are

meaningful additional benefits beyond the immediate generation of a cash fund, including

changes to the Plan with respect to the challenged investment options. Class Counsel brought

this as a continent action and have not received any compensation to date. The reaction of the

class and lodestar cross check also justifying the modest adjustment to 28 percent. Finally,

the market for legal services in this specialized area supports the requested fee. See, Kanawi

v. Bechtel Corp., 2011 WL 782244 (N.D. Cal. Mar. 1, 2011).

11. A lodestar cross-check indicates that the requested fee provides a lodestar

multiple of 2.48x, which is at or below multiples that have often been approved in other

cases. The Court finds the rates and hours used to determine the lodestar multiplier to be



4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

reasonable given the relevant market and the complexities of ERISA class litigation such as

this.

12. The Court has duly considered the objections to the Settlement that were filed

and that were raised in the Fairness Hearing. The Court denies those objections for the

reasons stated by Class Counsel in their response to the objections, as well as reasons stated

during the Fairness Hearing.

13. Class Counsel’s request to be reimbursed for the $473,882.01 in expenses they

incurred in prosecuting this case is also reasonable and the Court finds that these expenses

would normally be charged to a fee-paying client.

14. Plaintiffs, Marlon Cryer and Nelly Fernandez, brought their respective lawsuits

on behalf of the entire Plan. In doing so, Plaintiffs expended substantial amounts of time and

effort to protect the interests of the Class and the Settlement is a direct result of Plaintiffs’

commitment. In addition, the Plaintiffs risked alienation by peer and friends and reputational

risk in having brought an action against their prior employer. Mr. Cryer also willingly

subjected himself to a deposition during the course of the litigation.

15. Accordingly, the Court awards Class Counsel fees in the amount of

$7,490,000, and reimbursement of $473,882.01 in expenses. Mr. Cryer is awarded an

Incentive Award in the amount of $25,000 and Ms. Fernandez is awarded an Incentive

Award in the amount of $15,000. All awards to Class Counsel and Plaintiffs shall be paid

from the Settlement Fund.

SO ORDERED this ___ day of _________________, 2019.

_____________________________ The Honorable Claudia A. Wilken U.S. District Court Judge



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


case 4:16-cv-04265-cw document 163 filed 07/30/19 page 1 of 20 · laintiffsi28 p ’ motion for...

Documents