Final Hearing

PARTIES:

THE COURT


MR. BARNOW


MR. HARKE


MR. PHALEN


MR. GIBBS


MR. GERAGHTY


MR. BURGESS


MR. PRESTON


MR. MELODIA


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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION
DANA M. LOCKWOOD, on behalf of Herself and others similarly situated,
Plaintiff,
VS. CASE NO: 8:07-CR-1657-T-23TGW August 22, 2008 CERTEGY CHECK SERVICES, INC. Tampa, Florida
8:30 A.M.
Defendant, _________________________/
TRANSCRIPT OF PROCEEDINGS FINAL FAIRNESS HEARING BEFORE THE HONORABLE STEVEN D. MERRYDAY UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the plaintiffs: Ben BARNOW, ESQ. One North LaSalle Street, Ste. 4600 Chicago, Illinois 60602
LANCE HARKE, ESQ. 155 South Miami Avenue, Ste. 600 Miami, Florida 33130
JONATHAN LEVINE, ESQ. 601 California Street, 14th Floor San Francisco, California 94108
MITCHELL BURGESS, ESQ. 1000 Broadway, Ste. 400 Kansas City, Missouri 64105
FOR DEFENDANT: MARK MELODIA, ESQ. 136 Main Street, Ste. 250 Princeton, New Jersey 08543
COURT REPORTER: JANIE GIBBS, RPR 7227 Hamilton Road Bradenton, Florida 34209
Proceedings recorded and transcribed by computer-aided stenography.
JANIE GIBBS, RPR
(941) 518-7141 PROCEEDINGS

THE COURT: Well, good morning. We are together in cases 07 Civil 1434 and 07 Civil 1657. I wonder if counsel for the plaintiffs would like to make an appearance, one and all?

MR. BARNOW: Yes, Your Honor, thank you. My name is Ben Barnow and I'm one of the three co-lead settlement class counsel amongst a larger group of plaintiffs' counsel.

THE COURT: Yes, sir.

MR. BARNOW: With the Court's permission, if the Court so desires, am I to have my colleagues introduce themselves also?

THE COURT: Either way, however you would like to do it.

MR. HARKE: Good morning, Your Honor.

THE COURT: Good morning.
MR. HARKE: Lance Harke from the Miami law firm of Harke and Clasby. It's a pleasure to be here.
THE COURT: Good to see you.
MR. PHALEN: Good morning, Your Honor. Ralph Phalen.
THE COURT: Good morning.
MR. GIBBS: Good morning, Your Honor. Jonathan Levine, Girard-Gibbs, San Francisco.
THE COURT: Good morning.
MR. GERAGHTY: Good morning, Your Honor. Patrick Geraghty, Fort Myers. Geraghty, Gerrard and Edwards.
THE COURT: Good morning, Mr. Geraghty.
MR. BURGESS: Good morning, Your Honor. Mitch Burgess, Burgess

THE COURT: Good morning, sir. Thank you all. And for the defense this morning?
MR. PRESTON: Brett Preston from Ward-Henderson for the defense, Your Honor.
THE COURT: Good morning, Mr. Preston.
MR. MELODIA: Good morning, Your Honor. Mark Melodia from Reed-Smith. I'm here with my colleague Paul Bond, also on behalf of the defendant Certegy Check Services and Fidelity.
THE COURT: Good morning, Mr. Melodia and Mr. Bond. It's a pleasure to have everyone here this morning. I'm surprised that the weather is still as unpleasant as it is, but we are deluged in tropical rains courtesy of this accursed storm Faye, which just will not go away. Although unwelcome.
I believe our principle business here this morning is to evaluate for final disposition the proposed settlement in Lockwood versus Certegy and Beringer versus Certegy. A motion seeking that final approval of this class action settlement appears in the record as Document 88. There are, consequent upon Document 88, an array of papers in the record, correspondence from several prospective beneficiaries of settlement, a number of papers describable as objections, some perhaps not accurately described as an objection, some withdrawn and some, I suppose, pending.
I have taken a look across that array of papers and given them at least an initial consideration. I have also looked at the papers that have been filed, of course, attached to and in connection with the memorandum and motion seeking approval, including particularly the matter of fees and costs and the terms of
settlement itself and the matters that prompt counsel to both offer the settlement on the one hand and accept it on the other. My typical approach in this sort of hearing is to recognize movement in Document 88 to make an initial presentation and explanation with respect to the merits of Document 88. Well, let me not presume. Who chooses to make that presentation on behalf of Document 88?

MR. MELODIA: Your Honor, with the consensus and total agreement of my learned colleagues, Mr. Barnow would like to step forward and satisfy all the Court's questions with regard to settlement.

THE COURT: Excellent, you may proceed.

MR. BARNOW: Thank you.
First of all, Your Honor, as the Court and everybody else knows, I appear here today by what I would phrase as special admission and I thank the Court for the consideration and granting of the order that allows me to proceed in this matter and appear here not only at the preliminary approval hearing, but also here today.
I think it's hard to be in a room with me and discuss class actions without my stating something that I feel strongly about and that is my belief in class actions. I think this came about probably from a lot of concerns of the public and lawyers and legislators regarding small claims and how difficult it is for a person or group of persons to get any kind of a remedy or relief in those situations, and of course, there were other remedies available in the law. But in any event, state after state, not all of the states have provided for them and, of course, the federal system does also.
What is the end of the path in any class action is to get a good result
and the standard is fair, reasonable, and adequate; although, in other incantations it has sometimes been called fair, adequate, and reasonable. The passage of time has moved the letters. But in any event, it's the same thing. It's got to be a good deal. I don't think any of the lawyers that are here today would be here if they didn't believe it was a good deal. One, we have the scrutiny of this Court and any court sitting on for a settlement and everybody wants the Court to be satisfied with the settlement, otherwise, number one, you're embarrassed by not doing a good job. We have had a number of objections, and I would respectfully suggest to the Court, that based upon the size of this case, they're less than diminutus. I never want to, and I surely try not to, denigrate any class member review.
The legal issues are not always simple and the entitlement that somebody might think they should be getting may come from a different place than the provisions of the law. And so sometimes the vituperativeness, a quality I myself am sometimes capable of, is understandable. It's almost always understandable. But in a situation where it comes from a lack of recognition of what the settlement is, it has to be dealt with, and I think respectfully that we have dealt with the various questions that were raised in the pro se objections.
I'm actually quite proud with regard to what the arena of professional objectors brought forth in this case. One, they were, I think, all the last day. Number two, I recognized two of the names, one in particular, as being a frequent visitor to that campus, while one I did not, Mr. Bandus. I am pleased to say that in a series of conversations, both between myself and my colleagues, Mr. Harke and Mr. Phalen, with these objectors' counsel, they did review the matters. And as we showed in the court and as we would be obligated, showed in the court papers and
as we would be obligated in saying, there was no money passed. We said you should review it and, you know, whether or not Mr. Phalen, Mr. Harke and Mr. Barnow might have suggested their strong views as to the nature of those settlements, at least they listened to those words or the appropriate review of the settlement. I would have to say that not all class actions plaintiffs' counsel are thrilled by objectors. I actually believe in the process. But where I don't believe in the process is where it becomes knee-jerk or creates chaos in order to accomplish something that does not inure to the benefit of the class. I'm particularly sensitive to avoid a filing that does nothing but attempt to delay a settlement. And again, as we said at the preliminary approval hearing, and respectfully I think the Court recognized, timeliness is very important with the settlement. It happens to be a major ingredient. Frankly, we did not take kindly to the disruption that those objections could have caused had these lawyers not, in my view, honorably reviewed the settlement. I don't know how well prepared they came to it, but at the end of the day I would respectfully suggest that even those people that are not unwilling to nay-say a deal, and nay-saying isn't always bad, I have looked at it and said, you know what, you're right, and we are right.
This settlement is groundbreaking in a lot of ways. As we said at the preliminary approval hearing, we did have some benefit of the TJX settlement and the experience that was there. But, you know, there's always nuances and differences in a case. This situation creates both the credit monitoring and the bank account monitoring in significant ways. There are those people that fall into both categories and, of course, they get that compensation there. We also have the identity theft insurance with the nuance from New York because of legislative situations and in that state those people pick up the coverage through the $4 million cap and available monies to deal with those issues. We also pick up expenses, such as having to redo your checks and other items that are listed there up to the cap of a million dollars. We also have the changes in policies which the defendant has put in place and we have the commitment to an annual SAS 70 review, which basically is an independent and external test of their security measures. And frankly, I was advised this morning that they just went through one of those. It's hearsay to me, but I believe my opponent counsel, and no reason not to by the way, he believes and I believe that that was completed about two weeks ago. So that inures to the benefit of each of these class members. They also had the benefit of a very comprehensive notice plan. We all know that notice is very important. In fact, it's due process mandated and we can, some of us can recite a lot of cases that deal with that and I can probably recite one or two. But in any event, I know the Court knows more than I do and enough in that area. The reality is that we utilize Hillsoft notifications. I probably said earlier, and I probably don't have to say it again, it's truncated a little bit, which is what I'm capable of once I get an idea. I met them some time ago in other litigation and their work is superb and it continues to be superb. And I think the Court's review of Shannon Wheatman's affidavit, which I believe is in the record as number 83, don't hold me to it but I think so, it shows a comprehensive nature of the efforts. In fact, her estimate is based upon scientific tools and experience that they have developed and utilized over the years shows that over 80 percent of the class members have been reached at least three times. That's a pretty heavy standard to set and it's an excellent standard to meet, and we've met it. We also had phone lines of people making calls and there's documentation regarding the minutes on that, et cetera. We have a claims administration --by the way, Your Honor, in our papers we mentioned --I'll back up a little bit here, I apologize. The cost for the notice program with Hillsoft through the various publications that they utilize, I believe it's in excess of 3.4 million, you know, in excess of 3.4. The claims administration has already hit, by our papers, 1.2 million and claims administration continues. And I would respectfully suggest that the claims administration process we have here not only is another excellent element of the settlement, but adds a continuum of value to the extent that when you have, if they do have, disputes, it will go to end dispute. And all those expenses, other than should a class member choose to hire their own separate counsel, are borne by Certegy. The review process and claims class counsel is involved in it. It's a continuum. I have many cases where I get calls for quite a period after, and it's just an obligation you take at the inception. The work really doesn't end here until the matter becomes a calm sea and not too many seas get too calm. It takes a long time. And maybe it's in the creation, I don't know, but I get calls in some cases that are pretty antiquated. I think I probably had gray hairs at the beginning of them, but I've got more now. So the benefits are not only those things that are brought here to date, but it's the continuation of those benefits. And I think an example of the between-the-line elements of this settlement, to me, when you read it, it obviously shows let's cover the waterfront and give people a real avenue to redress relief in all of the areas that this type of situation creates. That there will be additional letters going out, we mentioned, I believe, in some of our earlier footnotes in the paper, giving people an additional 45 days to get in information should there be a shortfall in what they sent and perceived otherwise. These are things that I frankly think are inherent in a situation that is negotiated in good faith as this one was. And respectfully, it's not only a credit to the plaintiffs' counsel in the case, but it's also a credit to defendants' counsel and importantly the defendant or defendants whose honor has to continue through this litigation in terms of dealing with the claims issues which, of course, class counsel will be watching. But it shows evidence to this Court, I think, of the depth of the settlement and the commitment to do it well. Once again, as to the objections, I think we have handled them as to the pro ses to basically a lack of understanding. I think the three, what I would call, professional objectors, and I mean no disparity by that, it's just my characterization and someone will probably recognize it. I think one lawyer called it a recreational objector. It did draw a laugh. A pretty nice guy. But in any event, whatever you call it, there were objectors with the client and the clients, et cetera. I think that they were generalized. They have all filed motions to withdraw. Your Honor has already granted one and that was Mr. Pense's client's objection. I believe that was Mr. Siegel. And then there was a motion filed, I believe, yesterday by Attorney Ed Shapiro on behalf of his client Mr. Ellis. And then Mr. Bandus, on behalf of his client Mr. Stephens, I'm advised, mailed his in, probably because he hadn't registered for the electronic. Although his was granted. He did apply for that. The others I don't think did. But Mr. Harke was diligent enough and kind enough and good enough yesterday, I think, to make a notice of filing of the Stephens motion to withdraw. So, once again, as I said earlier, we even have the concurrence of those three professional objectors. And I didn't do a call here today and it wouldn't be for me to do it anyways, but I don't believe any other objector has appeared otherwise.

If the Court would like, I could switch to the other point the Court mentioned and that would be the issue of the compensation for counsel, if the Court would like to hear about that.

THE COURT: Why don't we at least offer Mr. Melodia an opportunity to contribute to the issues that you have raised so far, and perhaps it would be useful if I at least make an inquiry as to the presence of any objector and whether any objector wants now to be heard.

MR. BARNOW: We stand ready at the Court's pleasure.

THE COURT: Mr. Melodia.

MR. MELODIA: Thank you, Your Honor. And thank you for hearing me in this Court again. Happy to be back and thank you in advance to your staff who's worked very hard on this, because this sort of an effort is a group effort to get something like this done. Mr. Barnow often speaks of mutuality of interest and integrity and honor in the process, and I can say that there has been much of that throughout and none of the seamy underbelly that sometimes invades class actions. I'm pleased to be able to stand up in support of Docket Number 88 in the motion to approve, in final terms, this settlement. Just to comment on a few of the items that Mr. Barnow touched to emphasize a few points. He mentioned that there had been some between-the•lines and items of good faith negotiations beyond what the settlement requires and I just wanted to draw those to the Court's attention. We think that the settlement as it was drafted in strict form more than meets the fair, adequate and reasonable standard. However, it is important to my client, Certegy Check Services, and to its parent, Fidelity National Information Services, that this be done right and that know, because we have realized we're getting significant releases in return for this process, we want to make sure that everybody truly had an opportunity to be heard, because this is a peace of mind settlement. It's a peace of mind settlement in our view for the plaintiffs and the class and that is what we're trying to offer through this settlement. And it is also a peace of mind settlement for my client, because we want to know that we're done here.
So with that in mind, we have extended certain deadlines and have agreed to remail certain opportunities to the class to give them a second bite at the apple to make sure that whatever claims are going to come in, come in now. It is not to our benefit either to have people who thought they had submitted a legitimate claim for, let's say, credit monitoring or bank monitoring or for one of the reimbursement categories only to find out that they didn't attach the documentation or they didn't do something else right in terms of what's required by the settlement agreement. So where there have been claims submitted, first of all, but they are incomplete and the settlement administrator has said this doesn't pass muster under the settlement agreement, we have asked that there be a remailing to each and every one of those people in order to allow them another chance to submit their claim. Ultimately, as Mr. Barnow said, if they don't come forward the second time and they still don't meet the requirements of the settlement agreement that Your Honor preliminarily approved on February 15th, the hearing was February and you approved it in March, I believe, that that person has another chance, and I want to make that a little clearer perhaps than we did earlier. There is an arbitration process at the end of this. So to the extent that any of the correspondence Your Honor saw or people who are unhappy with this deal and objected and opted out --I'm sorry --of the process or tried to submit claims and are trying to be a part of this but failed to do it and don't like our resolution of their claim, they think they do have a legitimate, for example, identity theft claim, and we don't, and the settlement administrator thinks they don't, they still get to make that case to an arbitrator. Not only do they get to make the case to an arbitrator, but they get to make their case to an arbitrator on our dime. They have to get their own lawyer if they want one, but other than that the process is an expense to us, that we're willing to bear. I also mentioned extending deadlines with the same idea of making sure this process is truly final. We didn't want the vagaries of the mail or perhaps a tropical storm to make somebody miss a deadline by a few days. So as Your Honor knows, you approved a notice program and a schedule that had a July 31 cutoff date for one of the major categories of this settlement, which was claims for credit monitoring and bank monitoring. Before that deadline there were quite a few claims made, tens of thousands of claims made before the deadline. But in fact, since that deadline through August 15th, there were about another forty-five hundred claims that came in. We could have rejected those claims under the terms of the settlement. We haven't. We have brought those in and we have agreed with the settlement administrator and class counsel to extend the July 31 deadline to August 15, and thereby bringing forty-five hundred more claims into the process. The other thing that Mr. Barnow mentioned, but I think is worth emphasizing in terms of the take rate or claims response rate, is that we don't know here today exactly what that is. There are two significant open components. One is, through November 10th, people can continue to make claims for out-of-pocket reimbursement. That is, people who actually went out and bought identity theft protection, credit insurance on their own and people who were charged to replace bank cards or checks. Those people can continue to make claims through November 10th. In addition --and those claims are capped at a million dollars under the settlement.

The second category is more significant and a more significant, I think, ultimate protection, which is a four-million-dollar-amount of money that will be made available if there are claims of identity theft which developed and are reported anytime through the end of 2010. In fact, they can be reported, I believe, under the settlement agreement, for 90 days after the end of 2010, as long as they occurred before the end of 2010. That, I think, goes a long way toward our responding to some of the objections and some of the correspondence that we have all seen, which says, how do I know what might happen in the future. The reality is standing here today, just as we said on February 15th, we are still unaware of any single instance of identity theft, account takeover or other true harm of the sort that people worry about in connection with the unauthorized access and sharing of their information. And we have no reason to believe that if I stood here a year from today and two years from today that I couldn't say the same thing, but none of us can guarantee that, which is why that credit insurance is there and it's why we agreed in the original settlement to extend through 2010 the protection, if you will, because again, for us this is a peace of mind settlement. We don't believe there is any legally cognizable harm here. We believe if we had litigated this case we could show that, but you know, this company, as Your Honor knows, because you sentenced Mr. Sullivan to over four years in jail as a result of this incident -•
THE COURT: I did.
MR. MELODIA: --Your Honor knows a lot about the background and Your Honor knows that my client submitted a victim impact statement in connection with that proceeding and my client has been praised by the Florida attorney general in terms of their response to this incident. So we're trying to do the right thing. I think this settlement does the right thing. Thank you.
THE COURT: And thank you, Mr. Melodia. Let me inquire if there's anyone in the courtroom, or otherwise within the sound of my voice, who perceives themselves as an objector or a representative of an objector to this settlement who would like to be heard with respect to the merits of his or her objection. If so, if you will make your presence known I will give you an opportunity to be heard. Mr. Watts, has anyone responded to my invitation?
COURTROOM MARSHAL: No, Your Honor, no response.
THE COURT: Well, I looked, nonetheless, as I said earlier, across the array of objections, some to the question of fees, to which we have not addressed our attention at this moment, others to the substance of the settlement or the pendency of the claim. And I'll just say for summary purposes now, my staff and I were unable to find any that we thought presented a matter of genuine concern with respect to the settlement. I'll defer further comment for the moment unless we have some late arriving objector, and I'll revert again to Mr. Barnow if you want to be heard with respect to the question of fees and costs.
MR. BARNOW: Thank you, Your Honor. For completeness of the record, I would.
THE COURT: As I said, I looked at that also at some length at Ms. Harris' affidavit and the submissions, so I'm familiar with the issue, but nonetheless, I think you should be heard on it.

MR. BARNOW: Thank you, Judge. One of the things that I guess everybody needs, whether in a profession or a business, in my view, is that the law remains a profession even though sometimes the other word creeps in, the realities of college tuitions and I guess they even add gasoline. But having said that, our entire system, and most systems, probably even the old communist systems, are based upon, I think, fair reward for good work done.
We have done good work and there's a lot of ways to measure it. Since we gave up --we've been using dollars, I think, and dollars are what come into play here, just like the class members have access to dollars, et cetera, et cetera. I think, as do my colleagues, that the agreed upon fee, expense, and cost award, as well as incentive awards, are reasonable. You know, I don't have to say they're high or low. If I were to say it, I would say I think they're low. But actually I they're fair, accurate and reasonable and they're certainly acceptable to us. I think it's no secret to the Court, from not only the notice that was put out that we're going to seek fees up to 4.3, but also the Court's now vastly appreciated intervention, direction, and guidance by appointing Mr. Grilly as a mediator. Those processes have been few, can be kind of gut wrenching because you kind of have to come to the town hall meeting and get pounded on. That really applies to both sides. But we did get guidance there and our papers say so.
In terms of the number that came about, 2.350, including both fees and expenses, there's lots of measures, each of which we put in our papers as to show their reasonableness, the overall generalized multiplier of 1.86. And quite frankly, that's a vision at a point in time and that point of time actually continues because there will be continuing work. I'm not going to say it's a lot or a little. It certainly wouldn't be as much as we put in to date, but the commitment continues. Having said that, by any measure of the value of the settlement, this number is very much within the range of what should be approved. Even if you just took bare elements, as they say, and that would be, let's say, the notice of 3.4, the cost of administration of 1.2, which is 4.6, the cases say you add in the legal fees, so we'll put the 2.3 in there. Now you're up to about seven. You add in all the other things that go on. If you just take a standard, just a standard percentage of a third or 40 percent, we're way above the 2.350 without counting the availability of all the other benefits and the four million dollars in available --I doubt it will all be claimed. I hope it isn't because it's compensation for misery to people, quite frankly, but it's there. Similarly with the million dollars and similarly with the bank monitoring and the credit card monitoring.
By the way, Your Honor, the creation of that bank monitoring in large part comes from this instrument. I wouldn't tell the Court that it's not something that would not have happened but for this particular litigation or class concept, but what I will say is they always believe that the imminency of class actions and the pendency of class actions and the presence of class counsel knowledgeable in the area, in my view adds a certain humbling effect and positive effect to whatever internal aspects companies choose to develop, and this company did choose to develop it. I'm not here to say that they wouldn't have done it without us, I would just have to personally take some pride and say the process added to it. Those, quote --I don't want to get my counsel all aggravated here --but injunctive aspects, I put it in quotes, a lot of them are voluntary. They would say we put it in our paper, but they were also overviewed by us. A number of them have great significance which we haven't put a dollar value on. We did put some, because it had to do it and I don't think we need to do it. Certainly our time is evidence and the Court obviously can and will draw its own conclusions. With regard to the internal aspects, we have had the calculations in our papers. We had the calculations in our papers of the triple or what it would normally cost a consumer. We also have done, I guess, a parity analysis of the bank account, which is two years --some people, by the way, are in both categories so they would get both. So, it's not only --I think we estimated $72 or $74 a year for that one part, but it would also get the bank account. And when you get at those numbers and surely would admit because they wouldn't have any choice to do otherwise, it's honest, and I wouldn't do anything else, the numbers are stratospheric in terms of opportunity. Everybody knows those aren't going to be hit, but it's still what you have created for the consumers. I guess in the land of Einstein, you know, theoretics that all things are possible, it even gets more so in quantum mechanics. But in this reality world of class actions, there's no way it's going to be accepted. But I will say --and all of it. But I will say that there's plenty of class action law that says one of the measures is what you have created for people. Now, you know, there's disagreements in that, et cetera, particularly under capital with a voucher deal with which we are not a coupon. This is not a coupon case. But having said that as our papers do, and I think I can fairly and honorably do here today, no matter what measure you look at, this number meets the standard.
You know, I believe the Court appointed Mr. Grilly, and my own taking a look at his website or whatever, shows his knowledge and expertise. Now, you know, he's not here to give an opinion, and it wouldn't be for him to say really, but I would like to draw on the fact that this was an item that evolved through a much
larger request from class counsel through, let's just say a lower amount from defense. And you know, how close either one of us got to a particular fence, we're in a yard that we're willing to accept as being adequate. I note that I believe at least one of the withdrawal motions indicates they now considered the fee reasonable, and the deposition of one of the people we did take, Mr. Ellis who is I believe Mr. Siegle's client, I believe when he was posed a hypothetical, which there may have been an objection to or whatever, I didn't take his deposition, Mr. Burgess did, but even he indicated he thought, probably, not that he knows, but he came to the view that that number, based upon inclusions in the settlement, of which he wasn't at that time aware of, would be a fair amount. Other than that, Your Honor, I stand ready to answer the Court's questions.

THE COURT: Okay. Thank you very much, Mr. Barnow. I don't really have any questions at the moment, but I wanted to give Mr. Melodia, again, an opportunity to make any contribution that he wanted to with respect to the question of fees and costs.

MR. MELODIA: Thank you, Your Honor. The defense does not object to the fee application.
THE COURT: All right. Well, as counsel have suggested in their memorandum, I think I wrote in some opinion one time that I suspected that there was no phrase of frequent utilization in the legal profession with which more lawyers had more knowledge than the meaning of the phrase "reasonable fee." So I looked at your writings with my own reservoir of knowledge on the subject, particularized, of course, to the Eleventh Circuit. But in point of fact, the Eleventh
Circuit's law is quite representative of that elsewhere and in some respects has been a leader of that law. And I experienced no discomfort with the result.
Let me ask again if there is anyone in the courtroom or within the sound of my voice, which sometimes, gentlemen, is broadcast elsewhere, who believe they are an objector to this or any part of this proposed settlement, and if so, if they will make their presence known, I'll be happy to give them an opportunity to be heard on either the merits of --substantive merits of the settlement fees and costs proposed in compensation of the plaintiffs' counsel or any other matter to which they persist in objecting. Mr. Watts, is there any response to my invitation?
THE BAILIFF: No, Your Honor.
THE COURT: All right. Mr. Barnow, did you have any other distinct issue that you choose to address on behalf of the settlement this morning?
MR. BARNOW: The only issue that I would have to the extent the Court has any questions, I stand ready to answer on my own part, I thank the Court for its time.
THE COURT: Mr. Melodia, did you have any other matter about which you wish to make a distinct presentation this morning?
MR. MELODIA: Nothing further, Your Honor.
THE COURT: As I said, I looked at the papers and reviewed the case in general and reviewed, as a matter of fact, the discussions that we had with respect to the underlying claim and the notion of settlement of such a claim. As one or both of you concede, this action is not in all respects typical. It may become more typical of identifiable strata of class action cases. But close inspection of it, I think, leaves the disinterested observer satisfied that benefits that have been
negotiated on behalf of the plaintiff class, which include, as was discussed, credit insurance, credit card and bank account monitoring and enhancement in periodic review of security practices and the like and other benefits are a real benefit to a large class of persons and they are the result of the focused attention of skilled counsel for a protracted time. I find them altogether fair and reasonable, and borrowing from Mr. Barnow, a good deal. The defendant has made a knowing and intelligent decision to participate in the settlement, in the best position to assess the defendant's interest and to appraise the costs and the benefits. And again, it seems to me that however viewed, from the vantage of the plaintiffs, from the vantage of the defendant, from the vantage of the Court, the matter is fair and reasonable, fairly and reasonably arrived at. It is inherent, to a certain extent, in these transactions that the Court gives great weight to the assessment of counsel, particularly when those counsel are themselves conspicuously able to assess and assign a weight, with the benefit of many comparators and counsel in this case, both for the plaintiffs and for the defendants, are well able to do so. So, of course, I have listened carefully to the assessment of counsel. The plaintiffs are represented by a battery of counsel. I think any of them are capable of pressing a valuable claim to a point at or near its maximum value and resisted by able counsel, able to resist a claim and minimize the threat to their client of that claim. Such counsel, with time and deliberation, find a common value to assign to a dispute, albeit not a dispute particularized frequently in history, and present that assessment to the Court, and it seems fair and reasonable. So there is every reason in the world to accept the judgment of counsel and approve the settlement. Mr. Shapiro withdrew his objection, I believe. I, nonetheless, looked
at his objection and I looked at the writing that was attached to it as Exhibit C, I believe. I think it perhaps should have been designated as Exhibit B, but anyway, it was designated as Exhibit C. It was interesting and that's all. I didn't find any merit to it sufficient to alter or even waiver in my judgment of acceptance with respect to the settlement. It represents a point of view which is not unknown, but is also not at this time certainly prevailing, and I suppose, at least, likely to prevail in the foreseeable future. The balance of and assessment of benefit versus cost in the case is well within accepted norms, so I didn't find Mr. Shapiro's objection to be, frankly, one that would create much cause withdrawn or not withdrawn. I, similarly with my staff, reviewed the correspondence from Hayes and Mr. & Mrs. Fairbanks and Dorsey, the Dozier-Carter objection, that was the one who complained of having her credit apprehended by the Los Angeles Lakers, and Capanoski, Mitch, Shay and Vareen, Ellis and Stephens. I'll pause a minute.
I thought there was at least some chance that the Ellis objector would appear, so I paid closer attention to Ellis, who also submitted some paper. But again, I found that objection unpersuasive. I'll address the fee issue in a moment, but which issue was addressed by Ellis. And frankly, I found the objections, as I said, unpersuasive. Stephens, with a p-h. Stravett. Larkins. Ms. Larkins was one of the persons who didn't like the form of the attorneys fee announcement, setting a cap on the fee request as being quote, up to $4.3 million dollars, unquote. There were other objections, Clark, Mitchell, and Debuc, Shada. I suppose there were another eight or ten, including Mr. Shapiro's. Frankly, I found none of them to be very persuasive. Some seem to have complaints not unwarranted, about being required, again, to provide banking and
personal financial information to an unfamiliar website, having been already, at least, having been already subject to disruption because of reasons associated with providing permanent information. I didn't treat those as objections that related, of course, to the merits of the settlement, although they were understandable, nor did they relate to the reasonableness of the fee. And I know that there were some adjustments and mitigations superimposed on the website in attempt to adjust that. I don't think in the scheme of this case that was a material item, although, it is an item from the viewpoint of a class member that is understandable and should inform further settlements in other cases hereafter.
But anyway, I looked at the objections, whether the objectors appeared or whether they were withdrawn, whether they were with or without counsel and with respect to whether they were articulate or inarticulate in attempt to glean whether there was in them, or any of them, a matter that deserved the focused attention of the parties, the Court, or anyone else. And I'm satisfied in general in overruling any objections without --I don't frankly think that any of them warrant protracted treatment here today. Many of them are, if not most of them, are subject to being overruled upon a reading and quick assessment. So with respect to the settlement, I think it's due to be approved upon entry of an order. With respect to the fees, the requested amount strikes me as reasonable. Speaking in round terms, the plaintiffs seek compensation for about 3,000 hours, which is about one full-time lawyer and a half for a year, given the generous assumption that a lawyer in 2008 is expected to work 2,000 billable hours a year. That may be an aspiration in some quarters, but we'll use that for our purposes as a firm average of partners and associates, for example, given the time that has elapsed since work began on this case, of course, before it was filed. Up
to now that effort is well within the bounds of reason and, in fact, reflects the skill and familiarity with both the form of action and the subject matter of the action of those involved. So it's a reasonable number of hours, the rates are certainly representative of comparable counsel available in comparable markets, including this one, most particularly this one, and the amount is reasonable. The multiplier that is displayed at page 22 of Document 88 is a modest modifier, not a wholesale one, but not an immodest multiplier. And again, I find the result of that multiplication to be well within the definition, well known and frequently discussed definition of a reasonable fee.
So I am prepared to enter an order approving not only the settlement as described and administered, but as well the award of fees and costs that are described and tell in Document 88. And I wonder if either counsel or both had anticipated the submission of some form of order with respect to that approval? Do I remember that you were going to, or have you already given it to me? Mr. Patch, do you know the answer to that? He doesn't remember either.

MR. BARNOW: Your Honor, if I might?
THE COURT: Yes.
MR. BARNOW: We have brought with us copies of the proposed judgment which hones itself off those exhibits that were attached merely as to fill in the numbers, because we wouldn't have done that in anticipation. So with the Court's permission, I would show this copy to counsel so that their values would be seen and then we can fill it in and tender it to the Court.
THE COURT: Mr. Watts, if you will stand by while Mr. Melodia looks at that and then retrieve it for me, I would appreciate it.

MR. MELODIA: Your Honor, I'm not Evelyne Wood, I haven't read every word, but this appears to be the document that we had all prepared together in support of the settlement agreement. The only two changes I noticed are ones that we made together, which is the addition of the affidavit of Shannon Wheatman and the date of Your Honor's preliminary approval of March 21. So I think we can fill out these numbers as Mr. Barnow has suggested and submit it to Your Honor.
THE COURT: Why don't you let Mr. Watts have that draft and we'll take it from there. If you have any second thoughts, if you will let me know that Monday by noon or so. Just let us know and -•
MR. MELODIA: Absolutely, Your Honor.
MR. BARNOW: Your Honor, I have taken the liberty of doing a minor tweak to the fees and costs, put them together and added those numbers as well as the incentive awards. With your permission I'll hand it to Mr. Watts.
THE COURT: That's fine. That's fine. The same for you, Mr. Barnow. We'll not enter that before Monday at noon. Probably will enter it shortly thereafter or something very close to it. So if you see something that needs to be adjusted, just let us know. Just call Mr. Patch. You all know Patch's number, I know that, by now. Anything else from the plaintiffs?
MR. BARNOW: And unfortunately he knows ours.
THE COURT: I stirred him up to call you a few times, yes.
MR. BARNOW: I imagine.
THE COURT: Anything else from the plaintiffs?
MR. BARNOW: I don't think so.
THE COURT: Anything else from the defense?
MR. MELODIA: No, Your Honor.

THE COURT: Thank you. I'll enter that order in due course and thank you all for your time, attention and good work. We're in adjournment.
(Proceedings concluded at 11:09 a.m.) CER TIFICA TE
I, Janie Gibbs, RPR, certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter.
S/Janie Gibbs Court Reporter
JANIE GIBBS, RPR
(941) 518-7141

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