zacks - final settlement agreement (sept 21) settlement agreement this settlement agreement...
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SETTLEMENT AGREEMENT
This Settlement Agreement (“Settlement”) is entered into between plaintiffs John Kerr
(“Kerr”), Edward Li (“Li”), Tim Barnard (“Barnard”), and Kenneth Curtis (“Curtis”), and
prospective plaintiffs Arnold Cares (“Cares”), Lia Johnson (“Johnson”), and John Abjanic
(“Abjanic”) (collectively, “Plaintiffs”), individually and on behalf of the settlement classes defined
in Section III below, on the one hand, and defendants Zacks Investment Management, Inc., an
Illinois corporation (“ZIM”); Zacks Investment Research, Inc., an Illinois corporation (“ZIR”);
Response North, LLC, a Utah limited liability company (“Response North”); National Marketing
Resources, LLC, a Missouri limited liability partnership (“NMR”); and Paradigm Direct, LLC, a
Missouri limited liability partnership (“Paradigm”) (collectively, “Defendants”), on the other hand,
subject to the approval of the United States District Court for the Southern District of California (the
“Court”). NMR and Paradigm are sometimes referred to jointly as “NMR/Paradigm.” Plaintiffs and
Defendants are collectively referred to as the “Parties.”
I. RECITALS
A. The original complaint in this action was filed by Kerr on May 6, 2016, San Diego
Superior Court No. 37-2016-15206-CU-MC-CTL. The original complaint alleged that ZIR and/or
its agents placed telephone calls in violation of the Telephone Consumer Protection Act, 47 U.S.C.
§ 227 et seq. (“TCPA”), and recorded certain telephone conversations with California residents in
violation of the California Invasion of Privacy Action, California Penal Code § 630 et seq. (“Privacy
Act”).
B. On June 3, 2016, ZIR removed the action to the United States District Court for the
Southern District of California, where it was assigned Case No. 16-cv-01352-GPC (BLM) (the
“Lawsuit”). That same day, ZIR filed its Answer to the Complaint.
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C. On July 19, 2016, Kerr and ZIR participated in an Early Neutral Evaluation
conference with United States Magistrate Judge Barbara L. Major.
D. Discovery commenced on July 19, 2016. Kerr served multiple sets of interrogatories,
requests for production, and requests for admission on ZIR, and ZIR served interrogatories and
requests for production on Kerr.
E. During the course of the initial discovery, ZIR produced information that led Kerr to
believe that Response North and/or NMR/Paradigm may also bear legal responsibility for certain of
the telephone calls at issue. On September 1, 2016, Kerr filed a Motion for Leave to File a First
Amended Complaint (“FAC”), which proposed to name those entities in the place of fictitious
defendants. In addition, with respect to the claim against ZIR, the proposed FAC sought to add Li,
Barnard, and Curtis as named plaintiffs. ZIR filed its Opposition to Kerr’s Motion for Leave to
Amend on September 16, 2016, and Kerr’s reply was filed on September 23, 2016. The Court
granted the Motion for Leave to Amend on September 29, 2016, and the FAC was filed on October
3, 2016. Discovery continued thereafter.
F. In October 2016, ZIR, Response North, and NMR/Paradigm filed motions to dismiss
the FAC pursuant to Fed. R. Civ. P. 12(b)(6) and motions to stay proceedings.
G. On October 21, 2016, Kerr filed a motion seeking to compel ZIR to produce
documents responsive to Requests for Production Nos. 38 and 79-86. ZIR filed its opposition on
October 28, 2016.
H. On October 31, 2016, ZIR filed a motion to stay discovery pending a ruling on the
motion to stay proceedings.
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I. On January 13, 2017, counsel and representatives of all litigants attended a mediation
session before retired United States Magistrate Judge Leo S. Papas. That mediation session was
unsuccessful.
J. On April 7, 2017, counsel and representatives of all litigants attended a second
mediation session with Judge Papas. That mediation session was also unsuccessful.
K. On April 18, 2017, counsel for plaintiffs took the deposition of Kevin Matras, an
employee of ZIR. Thereafter, on April 21, 2017, the Parties filed a joint motion authorizing
plaintiffs to file a Second Amended Complaint (“SAC”), which named ZIM as a defendant in the
place of a fictitious defendant. That joint motion was granted on April 21, 2017, and the SAC was
filed on April 27, 2017.
L. Plaintiffs served interrogatories and requests for production of documents on ZIM,
NMR/Paradigm, and Response North. ZIM served interrogatories and requests for production of
documents on plaintiffs Li, Barnard, and Curtis.
M. On June 2, 2017, ZIR and NMR/Paradigm filed motions to dismiss pursuant to Rule
12(b)(6) and motions to stay proceedings. Plaintiffs filed oppositions to those motions on June 30,
2017. ZIR and NMR/Paradigm filed their respective reply briefs on July 14, 2017.
N. On June 27, 2017, ZIM filed a motion to dismiss pursuant to Rule 12(b)(6). Plaintiffs
filed an opposition to that motion on July 14, 2017, and ZIM filed its reply brief on July 28, 2017.
O. Although the two mediation sessions had been unsuccessful, the Parties continued to
explore the potential for settlement. With the assistance of Judge Papas, and following extensive
negotiations, the Parties were able to reach a global settlement for resolution of the entire action, on
the terms reflected in this Settlement. At all times, the settlement negotiations, while cordial, were
adversarial, non-collusive, and conducted at arm’s-length.
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P. Prior to the filing of a motion for preliminary approval, the Parties will file a joint
motion requesting that the Court grant leave for plaintiffs to file a Third Amended Complaint. The
Third Amended Complaint will omit allegations against ZIR and ZIM of a direct liability claim for
violation of the Privacy Act. The Third Amended Complaint will also add as named plaintiffs Cares,
Johnson, and Abjanic, who will assert direct liability claims against ZIR and/or ZIM under the
TCPA.
Q. Defendants deny all material allegations in the Lawsuit, that Plaintiffs and the
putative class members are entitled to any relief from Defendants, and that this Lawsuit is amenable
to class certification for any purpose other than this Settlement. Defendants enter into this
Settlement and agree to certification of the settlement classes defined herein only for purposes of this
Settlement and subject to preliminary and final approval of the Settlement and the settlement classes
by the Court, so that Defendants can avoid the significant cost and uncertainty associated with
ongoing litigation in this Lawsuit.
R. Before entering into this Settlement, Plaintiffs conducted formal and informal
investigation and discovery, including written discovery, production of documents, and depositions,
and Plaintiffs and Defendants have exchanged detailed information concerning the claims and
defenses at issue. Plaintiffs and their counsel are sufficiently familiar with the facts of the case and
the applicable law to evaluate the fairness of the Settlement. Plaintiffs and their counsel believe the
Settlement is fair, reasonable, and in the best interests of the settlement class members.
S. During the course of the case and through discovery requests issued by Plaintiffs,
Plaintiffs identified the following persons as putative class members in the Lawsuit: Daniel Dunn,
David Cave, Bob Swanson, Philip Malavenda, Zachary Hayman, Paul Horstmann and Solomon
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Pinczewski. Defendants understand that any claims of these persons are being resolved through this
Settlement as settlement class members defined below.
T. The Parties understand, acknowledge, and agree that the execution of this Settlement
constitutes the settlement and compromise of disputed claims. This Settlement is inadmissible as
evidence against any Party except to enforce the terms of the Settlement and is not an admission of
wrongdoing or liability on the part of any party to this Settlement. By entering into this Settlement,
Defendants do not admit any allegations of liability, fault, or wrongdoing asserted in the Lawsuit.
U. This Settlement is intended by the Parties to fully, finally and forever resolve,
discharge and settle this Lawsuit and the Released Claims, defined herein, upon and subject to the
terms and conditions herein.
II. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SETTLEMENT
A. Unless the Parties otherwise agree in writing, this Settlement will become final and
effective only upon the occurrence of all of the following events:
1. Entry of Order Granting Preliminary Approval. The Court enters an order
preliminarily approving the Settlement and certifying the settlement classes substantially as defined
in Section III. Pursuant to the motion for preliminary approval, Plaintiffs will request that the Court
(a) conditionally certify the settlement classes for settlement purposes only, (b) appoint Dostart
Hannink & Coveney LLP as counsel for the settlement classes for settlement purposes only,
(c) appoint Kerr as class representative of the Response North TCPA Class and the Response North
Privacy Class, as defined below, for settlement purposes only, (d) appoint Li, Barnard, Curtis, Cares,
Johnson, and Abjanic as class representatives of the Zacks Class, as defined below, for settlement
purposes only, (e) preliminarily approve the Settlement as fair, adequate and reasonable, and within
the range of possible final approval, (f) approve the forms of notice and find that the notice program
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set forth herein constitutes the best notice practicable under the circumstances, and satisfies due
process and Rule 23 of the Federal Rules of Civil Procedure, (g) set the Claims Deadline, the
Objection Deadline and the Exclusion Deadline, and (h) set the date and time for the Final Approval
Hearing, which may be continued by the Court from time to time without the necessity of further
notice. The date the Court enters an order granting preliminary approval of the Settlement will be
referred to as the “Preliminary Approval Date.”
2. Entry of Order Granting Final Approval. The Court enters an order granting
final approval of the Settlement. If the Settlement is approved preliminarily by the Court and all
other conditions precedent to the Settlement have been satisfied, no later than twenty-eight (28)
calendar days prior to the Final Approval Hearing, the Parties shall, separately or collectively, file a
motion requesting that the Court grant final approval for the Settlement. Any Party may file a
memorandum addressing any objections submitted with respect to the Settlement. The date the
Court enters an order granting final approval will be referred to as the “Final Approval Date.”
3. Entry of Judgment. The Court enters a judgment. The date the Court enters
judgment will be referred to as the “Judgment Date.”
4. Occurrence of the Effective Date. This Settlement will become final and
effective upon the Effective Date, which is determined as follows:
(a) The Effective Date will be the Judgment Date, unless a settlement
class member files a timely objection to the Settlement that is not withdrawn before the Final
Approval Date.
(b) If a settlement class member files a timely objection to the Settlement
that is not withdrawn before the Final Approval Date, then the Effective Date will be thirty-one (31)
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days following the Judgment Date, unless that settlement class member files a timely notice of
appeal of the Judgment.
(c) If a settlement class member who has filed a timely objection to the
Settlement also files a timely notice of appeal of the Judgment, then the Effective Date will be the
date the appeal is dismissed or the Judgment is affirmed and no longer subject to mandatory or
discretionary appellate review.
B. The Parties and their respective counsel will cooperate with each other and do all
things reasonably necessary to obtain preliminary approval of the Settlement, obtain final approval
of the Settlement, pursue entry of judgment, protect and support the Settlement if an appeal is taken
or any other form of judicial review is sought, and otherwise use their best efforts to ensure that the
Effective Date occurs.
C. Class Counsel will have the right to appeal any award of attorneys’ fees, litigation
expenses, or service payment that is less than the amount permitted under this Settlement, but any
such appeal, if taken, will not otherwise affect the binding nature of the Settlement, including the
release of claims set forth in Section IX below. In the event of any such appeal of attorneys’ fees,
litigation expenses, or service payment, the Parties will cooperate to carry out the other terms of the
Settlement that are unaffected by that appeal.
III. CONDITIONAL CERTIFICATION OF SETTLEMENT CLASSES
A. Defendants dispute that any class would be appropriate pursuant to the requirements
of Federal Rule of Civil Procedure 23, and further deny that a litigation class properly could be
certified on the claims asserted in this Lawsuit. However, solely for purposes of avoiding the
expense and inconvenience of further litigation, Defendants do not oppose the certification for
settlement purposes only of the settlement classes defined herein. Preliminary certification of the
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settlement classes for settlement purposes shall not be deemed a concession that certification of a
litigation class would be appropriate in the absence of this Settlement, nor would Defendants be
precluded from challenging class certification in further proceedings in this Lawsuit or in any other
action in the event that the Settlement is not finalized or finally approved. If the Settlement is not
finally approved by the Court for any reason whatsoever, the certification of the settlement classes
will be void, and no doctrine of waiver, estoppel or preclusion will be asserted in any litigated
certification proceedings in this Lawsuit. No agreements made by or entered into by Defendants in
connection with the Settlement may be used by Plaintiffs, any person in the settlement classes or any
other person to establish any of the elements of class certification in any litigated certification
proceedings, whether in this Lawsuit or any other judicial proceeding.
B. Solely for the purpose of effectuating the Settlement, and subject to Court approval,
the Parties hereby stipulate to certification of the following settlement classes:
1. The “Zacks Class” is defined as follows: “All natural persons nationwide
who, between and including May 6, 2012 and June 30, 2017, received a telephone call that was
(1) made to their cellular telephone and (2) initiated by or on behalf of ZIR or ZIM using an
automatic telephone dialing system. Excluded from the Zacks Class are all employees of
defendants, all employees of defendants’ counsel, all employees of plaintiffs’ counsel, and judicial
officers, their family members, and court staff assigned to the Lawsuit.”
2. The “Response North TCPA Class” is defined as follows: “All natural
persons nationwide who received from Response North a telephone call reflected in contact
databases produced by Response North, which (1) was placed as part of the Zacks Book Campaign
and/or the Options Trading Campaign and (2) was received on a cellular telephone. Excluded from
the Response North TCPA Class are all employees of Response North, all employees of Response
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North’s counsel, all employees of plaintiffs’ counsel, and judicial officers, their family members, and
court staff assigned to the Lawsuit.”
3. The “Response North Privacy Class” is defined as follows: “All California
residents who received from Response North a telephone call reflected in contact databases produced
by Response North, which (1) was made on a telephone line that was subject to recording by
Response North and (2) was received by the recipient in the State of California. Excluded from the
Response North Privacy Class are all employees of Response North, all employees of Response
North’s counsel, all employees of plaintiffs’ counsel, and judicial officers, their family members, and
court staff assigned to the Lawsuit.”
C. The Response North TCPA Class and the Response North Privacy Class are referred
to collectively as the “Response North Classes.” Members of the Response North TCPA Class and
the Response North Privacy Class are sometimes referred to collectively herein as the “Response
North Class Members.”
D. Members of the three settlement classes defined above are sometimes referred to
collectively herein as “Class Members.”
E. Solely for the purpose of effectuating the Settlement, and subject to Court approval,
the Parties stipulate that the law firm of Dostart Hannink & Coveney LLP will be appointed as
counsel for the settlement classes described above.
F. Solely for the purpose of effectuating this Settlement, and subject to Court approval,
the Parties stipulate that Kerr will be appointed as settlement class representative of the Response
North TCPA Class and the Response North Privacy Class.
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G. Solely for the purpose of effectuating this Settlement, and subject to Court approval,
the Parties stipulate that Li, Barnard, Curtis, Cares, Johnson, and Abjanic will be appointed as
settlement class representatives of the Zacks Class.
H. Subject to Court approval, the Parties agree that CPT Group, Inc. will be appointed to
serve as Settlement Administrator. The Settlement Administrator will be responsible for
disseminating the settlement class notices and claim forms; establishing and maintaining the
settlement website; researching and updating addresses through skip-traces and similar means;
receiving and validating claims; reporting on the status of claims, requests for exclusion, and
objections, if any; preparing a declaration regarding its due diligence; administering the Settlement
Accounts; distributing settlement payments; and doing such other things as the Parties may direct.
IV. SETTLEMENT CONSIDERATION
A. Monetary Consideration for the Zacks Class. ZIR and ZIM shall pay for the benefit
of the Zacks Class the sum of Four Million Six Hundred Fifty Thousand Dollars ($4,650,000.00)
(the “Zacks Monetary Consideration”). No later than ten (10) court days following the Preliminary
Approval Date, ZIR, ZIM, or their insurer shall transfer, or cause to be transferred, the sum of
$250,000.00 into an interest-bearing account administered by the Settlement Administrator (the
“Zacks Settlement Fund”), which pending the Effective Date may be utilized only for expenses of
settlement administration, including dissemination of notice to the settlement class. No later than ten
(10) court days following the Effective Date, ZIR, ZIM, or their insurer shall transfer to the
Settlement Administrator the entire remaining amount of the Zacks Monetary Consideration, to
become part of the Zacks Settlement Fund.
B. Monetary Consideration for the Response North Classes. Response North shall pay
for the benefit of the Response North Classes the sum of Eight Hundred Thirty Thousand Dollars
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($830,000.00) (the “Response North Monetary Consideration”). No later than ten (10) court days
following the Preliminary Approval Date, Response North or its insurer shall transfer, or cause to be
transferred, the sum of Two Hundred Thousand Dollars ($200,000.00) into an interest-bearing
account administered by the Settlement Administrator (the “Response North Settlement Fund”),
which pending the Effective Date may be utilized only for expenses of settlement administration,
including dissemination of notice to the settlement classes. No later than ten (10) court days
following the Effective Date, Response North or its insurer shall transfer to the Settlement
Administrator the entire remaining amount of the Response North Monetary Consideration, to
become part of the Response North Settlement Fund.
C. Potential for Supplemental Payments. The Zacks Class and/or the Response North
Classes may become entitled to additional monetary consideration as set forth below. If, between
the date of execution of this Settlement and the Effective Date, ZIR and ZIM incur less than $75,000
in attorneys’ fees and expenses for the court approval and settlement administration process, ZIR and
ZIM will pay the difference as additional Zacks Monetary Consideration, to be added to the Zacks
Settlement Fund. If, between the date of execution of this Settlement and the Effective Date,
Response North incurs less than $10,000 in attorneys’ fees and expenses for the court approval and
settlement administration process, Response North will pay the difference as additional Response
North Monetary Consideration, to be added to the Response North Settlement Fund.
D. As provided in Sections V, VI, VII, and VIII below, the Zacks Monetary
Consideration and the Response North Monetary Consideration will be used to pay Class Counsel’s
attorneys’ fees and litigation expenses (as approved by the Court), service payments to each Plaintiff
(as approved by the Court), the expenses of settlement administration, and the settlement payments
to Class Members. If at the conclusion of settlement administration there are any funds remaining,
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whether due to uncashed settlement checks or otherwise, such funds will be distributed 50% to
Consumer Federation of California and 50% to National Consumer Law Center, as cy pres
recipients, or as otherwise directed by the Court. Provided that the Effective Date occurs, in no
event will any portion of the Zacks Monetary Consideration ever revert to ZIR, ZIM, or their insurer,
nor will any portion of the Response North Monetary Consideration ever revert to Response North or
its insurer. If at any time there is a final order declining to grant final approval, or if it otherwise
becomes certain that the Effective Date cannot occur, then all funds remaining in the Zacks
Settlement Fund shall be returned to ZIR, ZIM, or the entity that remitted the principal amount to the
Settlement Administrator on their behalf, and all funds remaining in the Response North Settlement
Fund shall be returned to Response North or the entity that remitted the principal amount to the
Settlement Administrator on its behalf.
V. ATTORNEYS’ FEES AND LITIGATION EXPENSES
Class Counsel will file a motion for an award of attorneys’ fees of up to twenty-five percent
(25%) of the aggregate sum of the Zacks Monetary Consideration and the Response North Monetary
Consideration, plus actual litigation expenses not to exceed $70,000. Defendants will take no
position regarding these requests. As soon as practicable following the Effective Date, the
Settlement Administrator will pay to Class Counsel from the Settlement Funds the attorneys’ fees
and litigation expenses awarded by the Court. Court approval of any attorney’s fees and litigation
expenses, or the amount thereof, is not a condition of the Settlement. In the event the Court declines
Class Counsel’s request or awards less than the amount sought, this Settlement shall continue to be
effective and enforceable by the Parties.
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VI. SERVICE PAYMENTS TO PLAINTIFFS
Class Counsel will file a motion requesting service payments to the individual
plaintiffs/proposed settlement class representatives not to exceed $30,000 in the aggregate.
Defendants will take no position regarding these requests. As soon as practicable following the
Effective Date, and subject to the provision of an executed W-9 form if requested, the Settlement
Administrator will pay to Kerr from the Response North Settlement Fund, and will pay to Li,
Barnard, Curtis, Cares, Johnson, and Abjanic from the Zacks Settlement Fund, any service payments
awarded by the Court. Court approval of any service payments to Plaintiffs, or the amount thereof, is
not a condition of the Settlement. In the event the Court declines Plaintiffs’ request or awards less
than the amount sought, this Settlement shall continue to be effective and enforceable by the Parties.
VII. SETTLEMENT ADMINISTRATION
A. Response North has produced to Class Counsel Excel spreadsheets (the “Response
North Database”) that together reflect information in Response North’s possession, custody, and
control concerning the name, address, telephone, and/or email information of potential members of
the Response North Classes. No later than three (3) court days following the Preliminary Approval
Date, Class Counsel will provide a copy of the Response North Database to the Settlement
Administrator.
B. ZIR and/or ZIM maintain in electronic form information regarding the name, address,
telephone, and/or email information of potential members of the Zacks Class (the “Zacks
Database”), and will produce a copy of the Zacks Database to Class Counsel. No later than three (3)
court days following the Preliminary Approval Date, Class Counsel will provide a copy of the Zacks
Database to the Settlement Administrator.
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C. The information in the Response North Database and the Zacks Database provided to
the Settlement Administrator and Class Counsel pursuant to this Settlement shall be provided solely
for purposes of providing notice to Class Members and validating claims submitted by Class
Members; shall be kept in strict confidence and subject to the Protective Order entered in the
Lawsuit; shall be used only for purposes of this Settlement; and shall not be disclosed to any third
party.
D. No later than thirty (30) days following the Preliminary Approval Date (the “Notice
Date”), the Settlement Administrator will email the appropriate Court-approved Summary Class
Notice to the last-known email address of each individual whose email address is contained in the
Zacks Database or the Response North Database. Individuals in the Response North TCPA Class
will receive a Summary Class Notice substantially in the form of Exhibit A. Individuals in the
Response North Privacy Class will receive a Summary Class Notice substantially in the form of
Exhibit B. Individuals who are in both the Response North TCPA Class and the Response North
Privacy Class will receive a Summary Class Notice substantially in the form of Exhibit C.
Individuals in the Zacks Database will receive a Summary Class Notice substantially in the form of
Exhibit D. The emailed Summary Class Notice will include a link to the Settlement Website
(discussed below) or other suitable methodology to enable the email recipient to submit a Claim
electronically. For individuals with respect to whom the Zacks Database or the Response North
Database do not contain email information, the Settlement Administrator will mail a copy of the
appropriate Summary Class Notice to the individual’s last-known mailing address, to the extent that
information is available in the Zacks Database or the Response North Database. Prior to the mailing,
the Settlement Administrator will run the Class Members’ last-known addresses through the U.S.
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Postal Service’s National Change of Address (“NCOA”) database and update the respective
Databases as necessary.
E. Within fourteen (14) days following the Notice Date, if any emailed documents are
“bounced back” as undeliverable, the Settlement Administrator will mail a copy of the appropriate
Summary Class Notice to the person’s last-known physical address, to the extent that information is
available in the Zacks Database or the Response North Database, as updated by the NCOA database.
F. For a period of thirty (30) days following the Notice Date, if any mailed Summary
Class Notice is returned to the Settlement Administrator as undeliverable, the Settlement
Administrator will perform a skip-trace and/or other customary address search in an attempt to locate
a valid address, and if a new address is obtained, re-mail the Summary Class Notice to that address.
G. On the Notice Date, or within three (3) days thereafter, the Settlement Administrator
will cause the Publication Notice (Exhibit E) to be published one time in the Wall Street Journal.
H. No later than the Notice Date, the Settlement Administrator will establish a settlement
website (“Website”) on which it will make available the operative complaint, the Settlement
Agreement, the order granting preliminary approval of the Settlement, a Long Form Class Notice
(Exhibit F), the paper Zacks Claim Form (Exhibit G) (in a format that may be printed), the paper
Response North Claim Form (Exhibit H) (in a format that may be printed), and any other materials
agreed to by the Parties.
I. If any individual who does not appear in the Zacks Database contacts the Settlement
Administrator to request a claim form for the Zacks Class, in response to the Publication Notice or
otherwise, the Settlement Administrator will provide that person with a paper Zacks Claim Form
substantially in the form of Exhibit G. If any individual who does not appear in the Response North
Database contacts the Settlement Administrator to request a Claim Form for a Response North Class,
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the Settlement Administrator will provide that person with a paper Response North Claim Form
substantially in the form of Exhibit H.
J. The Website will include a mechanism by which individuals who receive an emailed
Summary Class Notice or a mailed Summary Class Notice may submit a Claim electronically via the
Website.
K. Potential Class Members may also submit a paper Zacks Claim Form (whether with
or without supporting documentation or information) or a paper Response North Claim Form to the
Settlement Administrator via U.S. Mail, personal delivery, or e-mail.
L. The date that is sixty (60) days after the Notice Date shall be referred to as the
“Claim/Exclusion/Objection Deadline.”
M. In order to receive a share of either the Zacks Settlement Fund or the Response North
Settlement Fund, Class Members must file a timely Claim, either electronically via the Website or a
paper Claim Form, and that Claim must be validated by the Settlement Administrator.
1. Completed Claims that are timely submitted electronically through the
Website by individuals to whom the emailed or mailed Summary Class Notice was sent will be
deemed valid.
2. Completed Claims that are submitted in the form of a paper Zacks Claim
Form will be deemed valid if (1) the claimant’s name,telephone number and email address match
information in the Zacks Database or (2) the claimant provides name, telephone number, email
address, telephone records, and/or other information from which ZIM or ZIR is able to determine
from its records that the claimant is likely to have received from ZIM or ZIR a telephone call at issue
in this Lawsuit between May 6, 2012 and June 30, 2017, inclusive. In each instance, the paper Zacks
Claim Form must be fully completed and signed by the claimant.
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3. Completed Claims that are submitted in the form of a paper Response North
Claim Form will be deemed valid if the claimant’s name and telephone number match information in
the Response North Database. In each instance, the paper Response North Claim form must be fully
completed and signed by the claimant.
4. If a Class Member fails to fully complete an appropriate Claim Form
applicable to his or her claim, the Claim will be invalid.
N. To be timely, the Claim must be returned to the Settlement Administrator no later
than sixty (60) days following the Notice Date (the “Claim/Exclusion/Objection Deadline”). If the
Claim is returned via the Website, the date of return will be the date of submission through the
Website. If the Claim is returned by U.S. Mail, the date of return will be the date of postmark. If the
Claim is returned by personal delivery or e-mail, the date of return will be the date the Claim is
received by the Settlement Administrator. Class Counsel in its discretion may direct the Settlement
Administrator to treat as timely a Claim received by the Settlement Administrator after the
Claim/Objection/Exclusion Deadline.
O. If the Settlement Administrator disallows a Claim for any reason, including the failure
to properly complete or sign the Claim Form, the Settlement Administrator will notify the claimant
by postcard of the reason for the disallowance and invite the claimant to cure the deficiency. The
Settlement Administrator will consider any additional information or corrective action by the
claimant so long as the additional information or corrective action is submitted within twenty-one
(21) days after the mailing of the notice of deficiency. Class Counsel shall be kept apprised of the
volume and nature of defective claims and allowed to communicate with Class Members as they
deem appropriate to cure such deficiencies.
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P. Unless otherwise ordered by the Court, the Settlement Administrator’s decision
regarding the validity of any Claim will be final and not subject to review or appeal.
Q. In the event multiple or conflicting claims are submitted with respect to the same
name or telephone number, then subject to any order the Court may make, the Settlement
Administrator shall have authority to resolve the issue as between the claimants.
R. Plaintiffs, Class Counsel, and Defendants and their counsel will not encourage Class
Members to request exclusion or object to the Settlement. If a Class Member attempts to
communicate with Defendants concerning the Settlement, Defendants will direct the Class Member
to Class Counsel.
S. Any Class Member who wishes to be excluded from the Settlement must complete
and return a written request for exclusion via U.S. Mail, e-mail, or personal delivery, and that request
for exclusion must be validated by the Settlement Administrator as provided in this Section. The
request for exclusion must be in writing and must list the Class Member’s name, address, telephone
number, and the statement “I wish to be excluded from the Kerr v. Zacks Investment Research
Settlement,” or words to that effect, and must be dated and signed by the person requesting
exclusion. To be timely, the request for exclusion must be returned to the Settlement Administrator
no later than the Claim/Exclusion/Objection Deadline. If the request for exclusion is returned by
U.S. Mail, the date of return will be the date of the postmark. If the request for exclusion is returned
by personal delivery or e-mail, the date of return will be the date the request for exclusion is received
by the Settlement Administrator. Any Class Member who submits a timely and valid request for
exclusion will be excluded from the settlement classes, will receive no consideration under the
Settlement, and will not be bound by the Settlement. Class Members who do not timely exclude
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themselves will be bound by the terms of this Settlement Agreement, including the releases set forth
in Section IX.
T. Any Class Member who wishes to object to the Settlement must, no later than the
Claim/Exclusion/Objection Deadline, file a written objection with the Court and serve copies of the
objection on Class Counsel, Defendants’ counsel, and the Settlement Administrator. An objection
must set forth the name of the lawsuit (Kerr, et al. v. Zacks Investment Research, Inc., et al., Case
No. 3:16-cv-01352-GPC (BLM)), the objector’s full name, address, and current telephone number;
the telephone number that was used to receive any calls from ZIM, ZIR, or Response North, and the
following statement: “I declare under penalty of perjury that, to the best of my knowledge, I am a
Class Member and I wish to object to the Settlement.” The objection must state the basis of the
objector’s belief that he or she is a Class Member, and must also state, in clear and concise terms, the
legal and factual arguments supporting the objection, and whether the objector intends to appear at
the Final Approval Hearing on his or her own behalf or through counsel. Any and all objections
shall identify any lawyer who assisted, provided advice, or represents the objecting Class Member
with respect to this Lawsuit or such objection. Any documents that the objecting Class Member
wishes for the Court to consider must also be attached to the objection. Class Counsel and
Defendants will respond to any objections, as appropriate, in connection with the Final Approval
Hearing. Any Class Member who objects may appear at the Final Approval Hearing, either in
person or through an attorney hired at the Class Member’s own expense.
U. No later than ten (10) court days following the Claim/Exclusion/Objection Deadline,
the Settlement Administrator will email to Class Counsel and Defendants’ counsel a written report
summarizing the Claims that have been received and the Claims that have been validated, and listing
any request for exclusion or objection that has been received by the Settlement Administrator. In
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advance of the filing of a motion for final approval, the Settlement Administrator shall cooperate
with Class Counsel in the preparation and filing of a declaration regarding the providing of Class
Notice in accordance with the provision of this Settlement and/or the Preliminary Approval Order,
the claims administration status, and any requests for exclusion or objections that may have been
received by the Settlement Administrator.
V. Class Members who submit timely Claims that are validated by the Settlement
Administrator are referred to as the “Participating Class Members.” Only Participating Class
Members will receive settlement payments under the Settlement, in accordance with Section VIII,
below.
VIII. SETTLEMENT PAYMENTS
A. No later than ten (10) court days following the Effective Date, the Settlement
Administrator will calculate the settlement payments to Participating Class Members as follows.
The “Zacks Net Settlement Amount” is the Zacks Monetary Consideration (including any accrued
interest) less the Court-approved attorneys’ fees and litigation expenses, the Court-approved service
payments to Li, Barnard, Curtis, Cares, Johnson, and Abjanic, and the expense of settlement
administration to be paid from the Zacks Monetary Consideration (including expenses previously
incurred and the Settlement Administrator’s good faith estimate of future expenses to be incurred).
The “Response North Net Settlement Amount” is the Response North Monetary Consideration
(including any accrued interest) less the Court-approved attorneys’ fees and litigation expenses, the
Court-approved service payment to Kerr, and the expense of settlement administration to be paid
from the Response North Monetary Consideration (including expenses previously incurred and the
Settlement Administrator’s good faith estimate of future expenses to be incurred).
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B. Each Participating Zacks Class Member will receive a pro-rata share of the Zacks Net
Settlement Amount.
C. The Response North Net Settlement Amount will be allocated among the
Participating Response North Class Members as follows: Each Participating Response North TCPA
Class Member will be allocated three (3) points, and each Participating Response North Privacy Act
Class Member will be allocated ten (10) points. A Participating Response North Class Member who
is a member of both of the Response North settlement classes will be allocated a total of thirteen (13)
points. After tabulating the number of points allocated to each Response North Class Member
(“Individual Points”), the Settlement Administrator will determine the aggregate number of points
allocated to all Participating Response North Class Members combined (“Total Points”). Settlement
Payments for each Response North Class Member shall be calculated by multiplying the Response
North Net Amount by a fraction, the numerator of which is the Participating Response North Class
Member’s Individual Points and the denominator of which is the Total Points.
D. No later than forty-five (45) days following the Effective Date, the Settlement
Administrator will mail to each Participating Class Member a check representing that person’s
settlement payment. Any check that is not cashed within one hundred and twenty (120) days of its
mailing by the Settlement Administrator shall be void. Any portion of the Settlement Amount that
remains unpaid at the end of 120 days will be paid 50% to Consumer Federation of California and
50% to National Consumer Law Center, as cy pres recipients, unless the Court orders otherwise.
IX. RELEASE OF CLAIMS
A. Release by Plaintiffs and Zacks Class Members. Upon the Effective Date, Plaintiffs
and all Zacks Class Members who have not timely requested exclusion from the Settlement, as well
as their respective assigns, executors, administrators, successors and agents, shall be deemed to
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release, resolve, relinquish, and discharge each and all of the Released Parties from each of the
Released Claims (as defined below). With respect to Plaintiffs and the Zacks Class Members,
“Released Parties” means ZIR, ZIM, any of their respective past, present and future parents,
subsidiaries, affiliated companies and corporations, and any of their past, present and future officers,
directors, managers, employees general partners, limited partners, principals, insurers, reinsurers,
shareholders, attorneys, advisors, representatives, predecessor, successors, divisions, assigns, or
related entities, and each of their respective executors, successors, and legal representatives. With
respect to Plaintiffs and the Zacks Class Members, “Released Claims” means any and all claims,
causes of action, suits, obligations, debts, demands, agreements, promises, liabilities, damages,
losses, controversies, costs, expenses and attorneys’ fees of any nature whatsoever, whether based on
any law including federal law, state law, common law, territorial law, contract, rule, regulation, any
regulatory promulgation (including, but not limited to, any opinion or declaratory ruling), common
law or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted,
foreseen or unforeseen, actual or contingent, liquidated or unliquidated, punitive or compensatory,
that arise out of or relate to the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. and/or
the Released Parties’ use of an “automatic telephone dialing system” or an “artificial or prerecorded
voice” to contact or attempt to contact Zacks Class Members from May 6, 2012 to June 30, 2017,
inclusive.
B. Release by Kerr and Response North TCPA Class Members. Upon the Effective
Date, Kerr and all Response North TCPA Class Members who have not timely requested exclusion
from the Settlement, as well as their respective assigns, executors, administrators, successors and
agents, shall be deemed to release, resolve, relinquish, and discharge each and all of the Released
Parties from each of the Released Claims (as defined below). With respect to Kerr and the Response
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North TCPA Class Members, “Released Parties” means Response North, NMR/Paradigm, ZIR,
ZIM, and any of their respective past, present and future parents, subsidiaries, affiliated companies
and corporations, and any of their past, present and future officers, directors, managers, employees
general partners, limited partners, principals, insurers, reinsurers, shareholders, attorneys, advisors,
representatives, predecessor, successors, divisions, assigns, or related entities, and each of their
respective executors, successors, and legal representatives. With respect to Kerr and the Response
North TCPA Class Members, “Released Claims” means any and all claims, causes of action, suits,
obligations, debts, demands, agreements, promises, liabilities, damages, losses, controversies, costs,
expenses and attorneys’ fees of any nature whatsoever, whether based on any law including federal
law, state law, common law, territorial law, contract, rule, regulation, any regulatory promulgation
(including, but not limited to, any opinion or declaratory ruling), common law or equity, whether
known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual
or contingent, liquidated or unliquidated, punitive or compensatory, that arise out of or relate to the
Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. and that relate to Response North’s
use of an “automatic telephone dialing system” or an “artificial or prerecorded voice” to contact or
attempt to contact Response North TCPA Class Members from May 6, 2012 to June 30, 2017,
inclusive.
C. Release by Kerr and Response North Privacy Act Class Members. Upon the
Effective Date, Kerr and all Response North Privacy Class Members who have not timely requested
exclusion from the Settlement, as well as their respective assigns, executors, administrators,
successors and agents, shall be deemed to release, resolve, relinquish, and discharge each and all of
the Released Parties from each of the Released Claims (as defined below). With respect to Kerr and
the Response North Privacy Class Members, “Released Parties” means Response North,
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NMR/Paradigm, ZIR, ZIM, and any of their respective past, present and future parents, subsidiaries,
affiliated companies and corporations, and any of their past, present and future officers, directors,
managers, employees general partners, limited partners, principals, insurers, reinsurers, shareholders,
attorneys, advisors, representatives, predecessor, successors, divisions, assigns, or related entities,
and each of their respective executors, successors, and legal representatives. With respect to Kerr
and the Response North Privacy Act Class Members, “Released Claims” means any and all claims,
causes of action, suits, obligations, debts, demands, agreements, promises, liabilities, damages,
losses, controversies, costs, expenses and attorneys’ fees of any nature whatsoever, whether known
or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or
contingent, liquidated or unliquidated, punitive or compensatory, that arise out of or relate to the
California Invasion of Privacy Act, Cal. Penal Code § 630 et seq., and that relate to Response
North’s recording of telephone calls made to Response North Privacy Class Members during the
relevant period.
D. Waiver of Unknown Claims. Subject to the foregoing, the Released Claims
specifically encompass claims within the scope of the release that Plaintiffs and Class Members do
not know or suspect to exist in their favor at the time that this Settlement becomes effective. To the
extent the provision is applicable, and without limitation as to any other applicable law, this release
constitutes a waiver of any federal or state statute, case law, rules or regulations relating to
limitations on releases similar to Section 1542 of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE. WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Plaintiffs understand and acknowledge, and the Class Members are deemed to understand
and acknowledge, the significance of these waivers of California Civil Code Section 1542 and
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similar federal and state statutes, case law, rules, or regulations relating to limitations on releases. In
connection with such waivers and relinquishment, Plaintiffs and the Class Members acknowledge
that they are aware that they may hereafter discover facts in addition to, or different from, those facts
that they now know or believe to be true with respect to the subject matter of the Settlement, but that
it is their intention to release fully, finally, and forever all Released Claims with respect to the
Released Parties as set forth herein, and in furtherance of such intention, the releases of the Released
Claims will be and remain in effect notwithstanding the discovery or existence of any such
additional or different facts.
E. Covenant Not To Sue. Upon the Effective Date, Plaintiffs agree and covenant, and
each Class Member will be deemed to have agreed and covenanted, that they will not institute any
action or cause of action (in law, in equity or administratively), suits, debts, liens, or claims, known
or unknown, fixed or contingent, which they may have or claim to have, in state or federal court, in
arbitration, or with any state, federal or local government agency or with any administrative or
advisory body arising from the Released Claims, and agree to be forever barred from doing so in any
court of law or equity, arbitration proceeding, or any other forum. However, nothing herein is
intended to restrict any Class Member from contacting, assisting or cooperating with any
government agency.
F. Waiver of Costs. Except as set forth above with respect to the right of Class Counsel
to seek court approval for reimbursement of actual litigation expenses from the Monetary
Consideration, each Party hereby waives any right to seek recovery of costs from any other Party.
X. RIGHT TO WITHDRAW FROM SETTLEMENT
A. If five (5) percent or more of the total number of persons identified in the Zacks
Database either object to or validly exercise the right to be excluded from the Zacks Class, then ZIR
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and ZIM (acting jointly) shall have the right to withdraw from this Settlement; or, if Response North
validly withdraws from this Settlement as set forth in Section B below, then ZIR and ZIM (acting
jointly) shall have the right to withdraw from this Settlement.
B. If five (5) percent or more of the Response North Class Members identified in the
Response North Database either object to or validly exercise the right to be excluded from this
Settlement, Response North shall, subject to the approval of ZIR, which shall not be unreasonably
withheld, have the right to withdraw from this Settlement.
C. To exercise any right to withdraw pursuant to this Section X, the withdrawing party
or parties must email, fax, or personally deliver written notice of withdrawal to counsel for the other
parties within ten (10) days following the later of (i) the date on which counsel are advised that five
(5) percent or more of the members of the relevant settlement class, as specified above, have either
objected to or validly exercised the right to be excluded from this Settlement, or (ii) the Exclusion
Deadline, or (iii) with respect to ZIR and ZIM only, the date of any valid withdrawal by Response
North.
D. In the event of withdrawal from this Settlement, this Settlement shall be of no force
and effect as to the withdrawing Party and the Parties’ rights and defenses shall be restored, without
prejudice, to their respective positions as if this Settlement had never been executed, and any orders
entered by the Court in connection with this Settlement shall be vacated. However, any payments
made to the Settlement Administrator for services rendered to the date of withdrawal shall not be
refunded to ZIR, ZIM and/or Response North.
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XI. COMPLIANCE WITH 28 U.S.C. § 1715
Not later than ten (10) days after a motion for preliminary approval of this Settlement is filed
with the Court, ZIR, ZIM, and Response North shall cause to be served upon the appropriate State
and Federal officials a notice of the proposed settlement that complies with 28 U.S.C. § 1715.
XII. MISCELLANEOUS
A. This Settlement represents a compromise of disputed claims, and Defendants deny
any liability or wrongdoing of any kind associated with the claims in this Lawsuit. Nothing in this
Settlement shall constitute an admission by any Party of wrongdoing or liability, the validity of any
claim or defense asserted in the Lawsuit, or of the truth of any allegations in the Lawsuit. Nothing
herein shall constitute an admission by any Defendant that the Lawsuit is properly brought on a class
or representative basis, or that classes may be certified in the Lawsuit, other than for settlement
purposes. To this end, the settlement of the Lawsuit, the negotiation and execution of this Settlement
Agreement, and all acts performed or documents executed pursuant to or in furtherance of the
Settlement: (i) are not and shall not be deemed to be, and may not be used as, an admission or
evidence of any wrongdoing or liability on the part of Defendants or of the truth of any of the
allegations in the Lawsuit; (ii) are not and shall not be deemed to be, and may not be used as, an
admission or evidence of any fault or omission on the part of Defendants in any civil, criminal or
administrative proceeding in any court, arbitration forum, administrative agency or other tribunal:
and (iii) are not and shall not be deemed to be, and may not be used as, an admission of the
appropriateness of these or similar claims for class certification. Pursuant to Rule 408 of the Federal
Rules of Evidence and any similar provisions under the laws of other states, neither this Settlement
nor any related documents filed or created in connection with this Settlement shall be admissible in
evidence in any proceeding, except as necessary to approve, interpret or enforce this Settlement.
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B. In no event shall Defendants or any of the other Released Parties have any
responsibility or liability for taxes or tax-related expenses arising in connection with the payment or
distribution of the Zacks Settlement Fund or the Response North Settlement Fund to Plaintiffs,
Participating Class Members, Class Counsel or any other person or entity.
C. This Settlement may be modified only by a writing signed by the Parties.
D. This Settlement, including its exhibits constitutes the entire agreement between the
Parties concerning the subject matter hereof. This Settlement and exhibits will be construed each as
a whole, and with reference to one another, according to their fair meaning and intent. The Parties
agree that the rule of construction that ambiguities in agreements must be construed against the
drafting party will not apply in interpreting this Settlement or its exhibits.
E. Each individual signing this Settlement warrants that he or she has the authority to
sign the Settlement on behalf of the Party for which he or she signs. Defendants warrant that they
have obtained all necessary authorizations under their organizational documents and under law to
make this Settlement binding on them.
F. The Parties agree that this Settlement Agreement is entered into in the State of
California and that any dispute between the Parties concerning this Settlement Agreement will be
governed by California law.
G. This Settlement may be executed in counterparts.
H. Except as otherwise specifically provided for herein, each Party will bear its own
attorneys’ fees, costs, and expenses.
I. The United States District Court for the Southern District of California will retain
continuing and exclusive jurisdiction over the Parties to this Settlement, including the Plaintiffs,
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Defendants, and all Class Members, for the purposes of administration, interpretation and
enforcement of this Settlement.
J. This Settlement may be signed in counterparts and the separate signature pages
executed by the Parties and their counsel may be combined to create a document binding on all of
the Parties and together shall constitute one and the same instrument.
K. The time periods and dates described herein are subject to Court approval. Any
deadlines that may be set by Court order may only be modified upon order of the Court.
L. This Agreement may not be amended, modified, altered or otherwise changed in any
manner by the Parties, except by a writing signed by a duly authorized agent of Defendants and
Plaintiffs, all of which shall be subject to approval by the Court.
M. The Parties agree that they will not initiate any publicity of the Settlement and will
not respond to requests by any media (whether print, online, or any traditional or non-traditional
form) about the Settlement. Notice of the Settlement will be delivered exclusively through the
notice process described herein.
N. Unless otherwise stated herein, any notice required or provided for under this
Agreement shall be in writing and may be sent by electronic mail, fax, hand delivery, or U.S. Mail,
postage prepaid as follows:
If to Class Counsel:
James T. Hannink Zach P. Dostart Dostart Hannink & Coveney LLP 4180 La Jolla Village Drive, Suite 530 La Jolla, CA 92037-1474 Telephone: 858-623-4200 Facsimile: 858-623-4299 [email protected] [email protected]
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If to ZIR and ZIM’s Counsel:
Danielle J. Gould Joshua J. Cauhorn Burke, Warren, Mackay & Serritella, P.C. 330 North Wabash Avenue, 21st Floor Chicago, Illinois 60611 Telephone: 312-840-7000 Facsimile: 312-840-7900 [email protected] [email protected]
Shannon Z. Petersen Lisa S. Yun Sheppard, Mullin, Richter & Hampton LLP 12275 El Camino Real, Suite 200 San Diego, CA 92130-2006 Telephone: 858-720-8900 Facsimile: 858-509-3691 [email protected] [email protected]
If to Response North’s Counsel:
Stephen H. Turner Lewis Brisbois Bisgaard & Smith LLP 633 West 5th Street, Suite 4000 Los Angeles, CA 90071 [email protected] Blair R. Jackson Invictus Law, P.L.L.C. 360 S. Technology Court, Suite 200 Lindon, Utah 84602 [email protected]
If to NMR/Paradigm’s Counsel:
Raymond B. Kim Meylan Davitt Jain Arevian & Kim LLP 444 South Flower Street, Suite 1850 Los Angeles, CA 90071 [email protected]
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APPROVED AS TO FORM: Dated: September 22, 2017 DOSTART HANNINK & COVENEY LLP
____________________________________ ZACH P. DOSTART Attorneys for Plaintiffs Dated: September ___, 2017 BURKE, WARREN, MACKAY & SERRITELLA, P.C. ____________________________________ DANIELLE J. GOULD Attorneys for Zacks Investment Research, Inc. and Zacks Investment Management, Inc. Dated: September ___, 2017 LEWIS BRISBOIS BISGAARD & SMITH LLP ____________________________________ STEPHEN TURNER Attorneys for Response North, LLC Dated: September ___, 2017 MEYLAN DAVITT JAIN AREVIAN & KIM LLP ____________________________________ RAYMOND B. KIM Attorneys for National Marketing Resources, LLC and Paradigm Direct, LLC 824458.3