The opinion of the court was delivered by: DAVID HERNDON, District Judge
This matter comes before the Court on the Class plaintiff's Motion
for Final Approval of Class Action Settlement, preliminarily approved by
this Court on December 5, 2003. Pursuant to the Court's Preliminary
Approval Order and the Notice provided to the Class, the Court conducted
a fairness hearing under Rule 23(e), Fed.R.Civ.P., on January 22, 2004.
The Court has reviewed the materials submitted by the parties, and has
heard arguments presented at such hearing. For the reasons cited on the
record as well as those stated hereafter, the Court finds and orders as
1. The Court finds that this action satisfies the requirements of
Rule 23, for the reasons set forth in its prior certification orders and the
Seventh Circuit's August 1, 2003 Order, and further finds that the Class
has at all times been adequately represented by the Named Plaintiffs and
2. The Notice approved by the Court was provided by first class direct
mail notice to the last known address of each individual identified as a
potential Class Member. In addition, follow-up efforts were made to send
the Notice to individuals whose original notice was returned
as undeliverable. The Notice adequately described all the relevant
and necessary parts of the proposed settlement agreement. In the
Matter of VMS Ltd. Partnership Sec. Litig., 26 F.3d 50, 51-52 (7th
Cir. 1994); In the Matter of VMS Ltd. Partnership Sec. Litig.,
1992 WL 203832 at *4 (N.D. Ill. 1992); Torrisi v. Tucson Elec. Power
Co., 8 F.3d 1370 (9th Cir. 1993).
3. The Court finds that the Notice given to the Class fully complied
with Rule 23, was the best notice practicable, satisfied all
constitutional due process concerns, and provides the Court with
jurisdiction over the Class members. Eisen v. Carlisle and
Jacqueline, 417 U.S. 156, 177-78 (1974); Phillips Petroleum v.
Shutts, 472 U.S. 797 (1985).
4. The Court has subject matter jurisdiction over this action pursuant
to 28 U.S.C. § 1331 and 28 U.S.C. § 1367.
5. The Court has considered and applied the factors set forth in
Armstrong v. Board of School Directors of the City of
Milwaukee, 616 F.2d 305, 312 (7th Cir. 1980), and has concluded that
the settlement is fair, reasonable and adequate. Armstrong, 616
F.2d at 312. The Court finds that the delay, potential adverse tax
issues, and the small uncertainty of further litigation, strongly
supports the marginal reduction in the amounts that would have been paid
pursuant to a final judgment.
6. Out of the several thousand individuals identified as potential
Class Members who were notified, only one of the Class members objected
to the proposed settlement on the grounds that it was inadequate. While
the Court disagrees with the objection, the Court also notes that the
objector was not receiving additional benefits under the Court's prior
Orders and is accordingly not receiving additional benefits under the
settlement; therefore, he is without standing to object or appeal.
See In re First Capital Holdings Corp. Financial Products
Securities Litigation, 33 F.3d 29, 30 (9th Cir. 1994)
(dismissing appeal of class member who objected to class counsel fee
award because she lacked standing. The class member was not entitled to
an award of damages and therefore was not "aggrieved" by the attorney's
7. The only other objection to the proposed settlement was lodged by
John E. Layaou, who objected to the release as potentially encompassing
his claim against Xerox. However, the Settlement Agreement specifically
excludes Mr. Layaou's case from the scope of the release and therefore
his objection is without merit and he also lacks standing to interpose
8. The Settlement is hereby APPROVED in its entirety and the
Court hereby approves the compromise of its earlier judgment.
9. A permanent injunction, without the necessity of a bond, is hereby
issued against Class members from prosecuting parallel actions.
10. For the reasons set forth in Class counsel's Motion for Attorneys'
Fees and Costs and Incentive Awards, the Motion for attorney fees and
costs is granted, as modified herein. Specifically, the Court finds based
on the evidence presented by Class counsel, and the Court's awareness of
the market, that a 29% fee and $300,000.00 in costs and expenses award
requested is at or below the market rate for this and similar litigation,
is fully supported by the Seventh Circuit's decisions in In re
Synthroid Marketing Litig., 264 F.3d 712 (7th Cir. 2001)
(Synthroid I), and is otherwise appropriate. See also In re
Synthroid Marketing Litig., 325 F.3d 974 (7th Cir. 2003)
(Synthroid II). Class counsel presented affidavit testimony and
other evidence demonstrating that no competent attorney would have taken
this case on any basis other than a contingent fee basis. Class
representative Gerry Tsupros testified that he would not have hired
Class counsel on an hourly basis, and the individual recoveries of
the other Class members strongly suggest that none of them would have
agreed to pay an hourly fee plus costs in return for the prospect of
recovering less than the final hourly fee and costs bill. The Court is
further aware that Class counsel are nationally recognized experts in
ER1SA pension benefit cases and have testified that they have not and
would not accept a similar case on any basis other than a contingency fee
In addition, Class counsel presented evidence, and the Court agrees,
that an auction for legal services in this litigation would have produced
a percentage at or higher than the 29% fee awarded, and that the large
claimant criterion here supports the 29% fee award. The Synthroid
II Court noted that the sophisticated third-party payors (the
insurance companies) in that litigation negotiated a flat 22% rate even
after the risk of the litigation had passed and a recovery was assured.
325 F.3d at 976 and 978 (explaining the 22% rate was agreed to "after a
good deal of the risk had been dissipated" and that the TPPs still "had
to offer 22% to sign up lawyers on a contingent fee."). Applying this
reasoning to this case, the risk attendant with this litigation and the
difficulty locating experienced counsel to accept such litigation clearly
support a 29% fee.
Thus, the undisputed evidence is that the market for legal services for
this litigation is a contingency fee contract. Class Counsel is awarded
29% of the aggregate Settlement Fund (as defined in the Settlement
Agreement) as and for their fees expenses and costs. Defendants ...