Free Motion for Miscellaneous Relief - District Court of Arizona - Arizona

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SUSAN MARTIN (AZ#014226) DANIEL L. BONNETT (AZ#014127) JENNIFER KROLL (AZ#019859) MARTIN & BONNETT, P.L.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Telephone: (602) 240-6900 [email protected] [email protected] [email protected] Attorneys for Plaintiffs DAVID B. ROSENBAUM (AZ#009819) DAWN L. DAUPHINE (AZ#010833) OSBORN MALEDON P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Telephone: (602) 640-9000 [email protected] [email protected] MICHAEL L. BANKS, Pro Hac Vice AZEEZ HAYNE, Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] Attorneys for Defendants HOWARD SHAPIRO, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Telephone: (504) 310-4088 [email protected] Attorneys for Defendants

Case 2:04-cv-00424-ROS

Document 386

Filed 01/24/2008

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan, Defendants. No. CV04-0424 PHX ROS JOINT MOTION FOR ORDER AND JUDGMENT PURSUANT TO FED R. CIV. P. 54(b) APPROVING PARTIAL SETTLEMENT (Fairness Hearing scheduled for February 7, 2008, at 9:00 a.m.)

Pursuant to the terms of the Scheduling Order, (Doc. 322), Plaintiffs, Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates, and Walter G. West, individually and on behalf of all others similarly situated ( Plaintiffs ), and Defendants, the Honeywell Retirement Earnings Plan ( Retirement Plan ), the Honeywell Secured Benefit Plan ( Secured Benefit Plan ), the Plan Administrator of the Honeywell Retirement Earnings Plan, and the Plan Administrator of the Honeywell Secured Benefit Plan (collectively, Defendants ), jointly by and through undersigned

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Counsel, respectfully move the Court to enter a Final Partial Judgment And Order pursuant to Fed. R. Civ. P. 54(b) approving the Partial Settlement. MEMORANDUM OF POINTS AND AUTHORITIES Background Plaintiffs commenced this lawsuit on March 1, 2004 on behalf of themselves and all others similarly situated. The lawsuit asserted claims that Defendants violated ERISA and the terms of the Garrett Retirement and Severance Plans and applicable successor plans by allegedly, inter alia, reducing accrued pension benefits, failing to give notice of reductions in future pension benefit accruals, applying improper offsets that reduced pension benefits and failing to provide requested documents on a timely basis. On behalf of themselves and all Settlement Class members, Plaintiffs sought to have the Settlement Class members benefits retroactively recalculated and paid with interest, and also sought prospective increases in the amount of pension benefits and injunctive, declaratory and other equitable relief. After Plaintiffs complaint was filed, Defendants moved to dismiss Plaintiffs Complaint and thereafter made a motion to dismiss Plaintiffs Amended Complaint. Plaintiffs cross-moved for partial summary judgment. On July 19, 2005, the Court ruled in Plaintiffs favor on some of their claims. Specifically, the Court ruled that: A. Defendants violated ERISA s anti-cutback rule by i) increasing the interest rate used to project a portion of Secured Benefit Account ( SBA ) balances to age 65 for purposes of calculating the SBA offset for participants who terminated their employment or retired before age 65; ii) applying a Social Security offset to benefits attributable to years of service worked prior to the adoption of the offset, and iii) eliminating the fractional reduction to the SBA offset for participants with more than 35 years of service, and 2
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B. Defendants violated the terms of the Signal Retirement Plan by applying an SBA offset to the minimum benefit formulas of Section 4.2(c)(i) of the Signal Retirement Plan, and that Defendants violated ERISA s anti-cutback rule and notice requirements by amending the Signal Retirement Plan to apply an SBA offset to the minimum benefit formulas. In the July 19, 2005 Order, the Court also dismissed Plaintiffs claims that Defendants violated: C. ERISA s nonforfeitability provisions; D. ERISA s anti-backloading provisions; E. ERISA s notice and anti-cutback provisions by failing to notify participants of an amendment changing the Signal Retirement Plan to refer to the Garrett Division rather than Garrett Corporation; F. ERISA s notice provisions by failing to provide Plaintiffs with copies of benefit calculation worksheets upon request; G. ERISA s notice provisions by failing to adequately disclose certain information in the Retirement Plan s summary description; H. the terms of the Signal Retirement Plan by failing to apply the 1.25% minimum formula; and I. the terms of the Signal Retirement Plan by failing to apply a 3.5% interest projection rate for calculating the SBA offset of participants eligible to commence benefits on December 31, 1983. Several claims asserted by the Plaintiffs have not yet been decided by the Court, including Plaintiffs claims that Defendants violated: J. ERISA by adopting certain Retirement Plan amendments in 2000 that altered the manner in which the SBA offset was applied to participants benefits; K. ERISA s anti-cutback and notice provisions, as well as the terms of the plan, by adopting an amendment charging administrative fees to participants Secured Benefit Accounts; L. ERISA s written document requirement; M. ERISA s plan merger rules; and N. the terms of the Retirement Plan by adopting amendments increasing the 3
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interest rate used to project a portion of SBA balances to age 65 for purposes of calculating the SBA offset for participants who terminated their employment or retired before age 65 and applying a Social Security offset to benefits attributable to years of service worked prior to the adoption of the offset. The parties have engaged in substantial discovery in this case. Class Counsel has conducted an extensive investigation, and commenced broad based discovery that has already resulted in the production of millions of pages of documents from Defendants. At the time settlement negotiations commenced, Plaintiffs had served several sets of interrogatories and requests for production and were in the process of scheduling Rule 30(b)(6) depositions as well as the individual deposition of Craig Chapman, which had been previously noticed. As is clear from the briefing on Defendants November 16, 2007 motion for reconsideration, the actuaries for the parties have engaged in substantial analysis of the claims and defenses. The remaining claims in the case continue to be vigorously contested following the parties submission of the motion for approval of the Partial Settlement agreement. Defendants have filed a second motion for reconsideration and the parties have each filed motions for summary judgment on the statute of limitations. In addition, the possibility of appeal presents a real risk of loss on the merits, and the possibility that there would be no monetary recovery on the Three Remaining Claims1 in this litigation. Description of the Settlement Agreement The Class Action Partial Settlement Agreement (the Agreement ) provides

substantial benefits to the entire Settlement Class while removing the risk of nonrecovery and lessening significantly the delay and expense inherent in a complex ERISA case such as this. The parties engaged in a high-level, arms length adversarial mediation The capitalized terms in this motion, to the extent not otherwise defined herein, have the meaning ascribed to them in the Settlement Agreement. (Doc. 312, Exhibit A.) This motion describes certain provisions of the Settlement Agreement and, to the extent there is any ambiguity or discrepancy in this description, the provisions of the Settlement Agreement are controlling. 4
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process in attempts to reach resolution. In January 2007, the parties jointly retained two mediators, one with expertise in large class action mediation, Eric Green, and the other with specialized expertise in ERISA matters, John Utz. Beginning in April 2007, the parties and their attorneys participated in several meetings with the mediators and spent hundreds of hours in meetings, phone calls and preparation of written communications in an effort to reach the Partial Settlement. Class Counsel has extensive ERISA and

litigation experience and is fully familiar with the factual and legal issues of this case. Plaintiffs and Defendants executed the Agreement and jointly sought preliminary approval of the Partial Settlement on October 26, 2007. The Partial Settlement provides Class Members with $35 million in Settlement benefits and attorneys fees and costs regardless of the outcome of the Three Remaining Claims. Plaintiffs and Class Counsel believe that the proposed Partial Settlement is fair, reasonable and adequate for the Class. The principal terms of the Partial Settlement are summarized below: A. Scope: The Partial Settlement will settle all Released Claims as to all

Released Parties, with the exception of the Three Remaining Claims. The parties retain the right to fully litigate the Three Remaining Claims, but have agreed to cap or limit the amount of any relief for which Defendants may be liable to the Settlement Class members (including any attorneys fees and costs) in further litigation proceedings on the Three Remaining Claims and attorneys fees and costs in connection therewith to the amount of $500 million. The Three Remaining Claims are detailed in the Agreement, and consist of (a) the SBA Offset Claim, (b) the Social Security Offset Claim, and (c) the Minimum Benefits Claim as set forth in the Agreement and any proceedings for attorneys fees and costs in connection with those claims. B. Settlement Benefits:

1. The Partial Settlement provides that the Retirement Plan will be amended to provide Eligible Participants, Eligible Beneficiaries and Eligible Estate Representatives with additional benefits of $35 million, minus any amounts 5
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awarded for attorneys fees and costs pursuant to Class Counsel s Initial Fee Application. A. Fractional Reduction Benefits. Fractional Reduction Participants

are those participants who worked more than 35 years and whose SBA offset did not have a fractional reduction in the SBA offset. Fractional Reduction

Participants will receive approximately 90% of the value of damages calculated for this benefit loss.2 Benefits to these participants will be paid to all eligible class members who are entitled to the benefits and sign and return the claim form in timely fashion beginning as of the Earliest Distribution Date as defined in the Agreement. The amount of past and future Fractional Reduction Benefits due each individual is determined by multiplying each Fractional Reduction Participant s Fractional Reduction Difference (the difference between benefits paid with and without the challenged amendments that eliminated the Fractional Reduction in the SBA offset for participants who worked in excess of 35 years) by the Applicable Percentage, which is determined by the following formula: $35,000,000 minus the Initial Fee Award divided by $35,000,000 times 90%. Past Fractional Reduction Settlement Benefits will be paid in a lump sum including Interest. The Actuarial Equivalent of all remaining Fractional Reduction

Settlement Benefits will be paid in the form elected or to be elected by the participant at their Benefit Commencement Date. B. Per Capita Settlement Benefits. After allocation for the Initial Fee

Award and the Fractional Reduction benefits, the entire balance of the remaining amount $35,000,000 will be allocated equally among all Eligible Participants, Eligible Beneficiaries, and Eligible Estate Representatives who timely submit Claim Forms as of the Partial Settlement Calculation Date and will be paid to them Prior to adjustment for attorneys fees and costs. 6
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in the form they elect. 2. If Settlement Class members prevail on all or any of the Three Remaining Claims, the maximum amount of total Subsequent Relief to be paid by Defendants, including attorneys fees and costs, is limited to the $500 million Cap Amount. 3. When the Partial Settlement is Final, the Retirement Plan will pay to the Named Plaintiffs as Special Incentive Awards the total sum of $150,000, to be paid as a Retirement Plan administrative expense and to be allocated among the Named Plaintiffs as set forth in the Agreement. The Special Incentive Awards are in addition to and not paid out of the $35 million in benefits set forth in Paragraph 1 above. A separate motion has been filed by Class Counsel seeking approval of the Special Incentive Awards which contains declarations from each of the Named Plaintiffs. (Doc. 384.) 4. Commencing for plan years beginning after December 31, 2007, the Company will cease charging Ordinary Administrative Fees to the Secured Benefit Plan s trust and thereafter no such fees will be deducted or paid from SBA Participants Secured Benefit Accounts. C. Settlement Class: As part of the Partial Settlement, Defendants have agreed not to seek to decertify the Settlement Class in the remainder of the Litigation. D. Released Claims: Upon entry of the Order and Final Judgment pursuant to Fed. R. Civ. P. 54(b) approving the Partial Settlement, Named Plaintiffs and each Settlement Class member will be deemed to have released and discharged the Released Parties from: any and all actions, causes of action, claims, demands, liability, obligations, promises, rights and suits whatsoever, whether equitable, legal or administrative, whether arising under Federal, state, local or foreign law, whether based on statute, ordinance, regulation, constitutional provision, common law, contract, the terms of the Retirement Plan, the terms of the Secured Benefit Plan or any other source, 7
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whether known or unknown, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or unliquidated, that were asserted or could have been asserted by or on behalf of one or more of the Settlement Class members (a) pursuant to the administrative claims procedures of the Retirement Plan or the Secured Benefit Plan, and/or (b) in any court or other proceeding, including any claim for attorneys fees or expenses, and that arise out of or relate to the Garrett Retirement Plan, the Signal Retirement Plan, the Allied Signal Retirement Program, the Retirement Plan, the Garrett Severance Plan, the Garrett Secured Benefit Account and/or the Secured Benefit Plan (said plans as amended and in effect from time to time through and including October 1, 2007, without regard to any amendment adopted thereafter), with the sole exception of the Three Remaining Claims and the Subsequent Fee Award (subject to the Cap Amount and Paragraph 3.10 of the Settlement Agreement). Notwithstanding the previous sentence, nothing in the Partial Settlement shall release the Released Parties from Settlement Class members individual claims for benefits based on allegations that the Retirement Plan and/or Secured Benefit Plan made an Individual Mistake as to an individual s claim for benefits, the intent being to preserve an individual Settlement Class member s rights to challenge an individual issue as to his or her benefits. For the avoidance of doubt, the Released Claims include, without limitation (1) any and all claims (other than the Three Remaining Claims not in excess of the Cap Amount) that the terms of the Retirement Plan and/or Secured Benefit Plan, as amended through and including October 1, 2007, violate or violated ERISA, the Code, or any other source of law; (2) any and all claims arising out of the prosecution, defense or settlement of this Litigation, including, without limitation, any claim or allegation that the Agreement or any aspect of its implementation violates any applicable law or right of any Settlement Class member; and (3) any and all claims for the recovery of attorneys fees or costs incurred in the Litigation (other than the Initial Fee Award and any Subsequent Fee Award. Settlement Class members are also enjoined from commencing a separate action with respect to the Three Remaining Claims or the Released Claims. Notice of the Partial Settlement and Class Member Inquiries On November 6, 2007, the Court granted preliminary approval of the proposed settlement and ordered that notice be provided to the Settlement Class. As set forth in the attached Declaration of Jennifer O. Keogh, Garden City Group, the company the parties 8
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retained to handle the mailing of the Notice, mailed the Notice to the last known addresses of a total of 19,168 participants on November 23, 2007 and mailed Notices to an additional 1,215 Notices to Settlement Class members on December 6, 2007 after receiving updated and corrected addresses from Defendants records. Notices that are returned from the post office and for whom Garden City receives updated address information from the Postal Service are promptly re-mailed. To date, Garden City has remailed 266 Notices that were returned by the Postal Service. On November 28, 2007, the summary notice for publication was published in the Arizona Republic, the Arizona Daily Star, the Los Angeles Times and USA Today. In addition, on November 22, 2007, the Claim Form and Notice were also published on the website maintained by the Garrett Retirees Action Committee along with a list of Frequently Asked Questions about the lawsuit at http://www.garrettaction.com. Garden City also maintained a toll-free number for Settlement Class members, which was listed on the Notice sent to participants, in the newspaper notices and also on the Garrett Retirees Action Committee website. The number contains a voice menu with questions and answers to frequently asked questions. The interactive voice response system dedicated to this Settlement is accessible 24 hours a day, 7 days a week. As of January 20, 2008, there were 3,078 phone calls to the toll free number. Of these calls, Garden City responded to 638 inquiries from Settlement Class members and mailed out additional notice packets to 251 individuals who requested them. Garden City will continue to promptly respond to Class Member inquiries.

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Settlement Class members have until January 28, 2008 to submit claim forms, however under Section 2.13 of the Agreement for good cause, Class Counsel may, in their discretion, accept and forward to Defendants Claim Forms returned after the sixty (60) day period, which shall also be deemed timely and eligible for payment of Partial Settlement Benefits provided the Claim Forms are received before the Partial Settlement becomes Final (which, if no person seeks rehearing, reconsideration, or appellate review, is defined as when the time to seek such rehearing, reconsideration, or appellate review has expired). As of January 20, 2008, Garden City had received 8,200 claim forms. No Class Member Has Objected To Date The Notice advised class members of the procedure to follow if they wished to object to the proposed settlement. Class members were advised that they had until January 24, 2008 to object to the proposed partial settlement. Of the 19,166 class members who were sent notices, not a single class member has filed an objection as of the filing of this motion.
I.

THE PARTIAL SETTLEMENT MEETS THE STANDARDS FOR APPROVAL UNDER RULE 23 District courts have wide discretion in analyzing and deciding to approve a

proposed settlement. Evans v. Jeff D., 475 U.S. 717, 742 (1986); In re Mego Financial Corp. Securities Lit. v. Nadler, 213 F.3d 454, 458 (9th Cir. 2000). The Supreme Court has stated that approval of a class action settlement is committed to the sound discretion of the district courts to appraise the reasonableness of particular class-action settlement on a case-by-case basis, in light of all the relevant circumstances. Evans, 475 U.S. at 742; see also Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (the decision to approve or reject a settlement is committed to the sound discretion of the trial

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judge because he is exposed to the litigants, and their strategies, positions and proof ) (internal quotations omitted). The Supreme Court has cautioned that in reviewing a proposed class settlement, courts should not decide the merits of the case or resolve unsettled legal questions. Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n. 14 (1981);

Evans, 475 U.S. at 726-27; Staton v. Boeing Co., 327 F.3d 938, 963 n.16 (9th Cir. 2003). Instead, courts have consistently held that the function of the court reviewing a settlement is to determine whether the proposed settlement, taken as a whole, is fundamentally fair, adequate, and reasonable, not to rewrite the settlement agreement or to resolve issues intentionally left unresolved by the parties. Hanlon, 150 F.3d at 1026 (citing Officers for Justice v. Civil Serv. Comm n, 688 F.2d 615, 628 (9th Cir. 1982)). The Ninth Circuit has stated that [a]lthough Rule 23(e) is silent respecting the standard by which a proposed settlement is to be evaluated, the universally applied standard is whether the settlement is fundamentally fair, adequate and reasonable. Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir.1982). The Ninth Circuit has set forth eight factors that should be considered in determining whether a settlement agreement is fundamentally fair, adequate, and reasonable: (1) the strength of plaintiffs case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed, and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members to the proposed settlement. See, e.g., Staton, 327 F.3d at 959 (citing Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 2003)); Mego Financial Corp., 213 F.3d at 458; Hanlon, 150 F.3d at 1026; Draney v. 11
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Wilson, Morton, Assaf & McElligott, Civ. 79-1029, 1985 WL 5820, *1 (D. Az. Sept. 30, 1985). The Ninth Circuit has further noted that because of the danger that class action settlements could compromise the interests of class members due to the individual interests and incentives of class representatives and class counsel, the district court must also consider whether there was fraud, overreaching, or collusion in reaching the settlement. Staton, 327 F.3d at 960. As set forth in the parties joint memorandum in support of the motion for preliminary approval of the Partial Settlement, (Doc. 312), and as summarized herein, the Partial Settlement is fair, reasonable, and adequate and an excellent result for class members. (1) The Strength of Plaintiffs Case and the Risk, Expense, Complexity, and Likely Duration of Further Litigation. As this Court is aware, this case has been vigorously contested since it was filed in March 2004. The Partial Settlement resolves all of the claims that were dismissed by the Court and all of the claims that have not yet been litigated except for the Three Remaining Claims. The Partial Settlement also resolves one of Plaintiffs anti-cutback claims, the claim that Defendants violated ERISA s anti-cutback rule by eliminating the fractional reduction to the SBA offset for participants with more than 35 years of service, by paying Fractional Reduction Participants at 90% of the calculated value of that claim (before adjustment for the Initial Fee Award). The Partial Settlement is an excellent result. By providing a $35,150,000

recovery, it eliminates the significant risk that there could be no monetary recovery whatsoever. While ensuring payment of additional benefits to vested retirement plan Participants, it also provides for the opportunity to seek further recovery up to an additional $500 million on the Three Remaining Claims. Although the Court ruled in Plaintiffs favor on the anti-cutback claims, the Court expressed reluctance to do so, and Defendants continue to assert their intent to appeal that claim. Defendants also have filed

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a second motion for reconsideration on that issue. Each party has also moved for summary judgment on the statute of limitations and Defendants have claimed that class members should not receive any damages because they waited too long to bring this lawsuit. Defendants have endeavored and will continue to endeavor to pursue these defenses vigorously. Plaintiffs cannot discount the fact that a ruling in favor of

Defendants could deprive some or all of the Settlement Class members of the right to any monetary or other relief. The Partial Settlement assures that virtually every eligible Settlement Class member will derive some benefits from this litigation, including providing those who were affected or who will be affected when they retire by the elimination of the 35 year reduction in the SBA offset with 90% of the value of their damages (prior to adjustment for the Initial Fee Award). In addition, the risks, delay and expense that will be avoided by withdrawal of the Released Claims through the Partial Settlement is significant. The Partial Settlement significantly minimizes the delay entailed in litigation of the Released Claims, and advances a monetary recovery to Settlement Class members by as much as several years. See Nat l Rural Telecom. Coop. v. DirecTV, Inc., 221 F.R.D. 523, 526 (C.D.Cal. 2004) (unless settlement is clearly inadequate, approval is preferable to lengthy and expensive litigation with uncertain results). Where, as here, the vast majority of the Settlement Class members are retirees, (many of whom are in their later years), this factor is particularly important and supports preliminary approval of the Partial Settlement. Given the risks inherent in continuing the Litigation, Named Plaintiffs believe that the Partial Settlement, which provides for significant additional benefits and other relief including payment of additional benefits to all Participants, payment of 90% of the value of the Fractional Reduction Claim, and the elimination of Ordinary Administrative Fees on SBA accounts on a going forward basis is adequate, fair, reasonable and in the best interests of all Settlement Class members. (2) The Risk of Maintaining Class Action Status Throughout the Trial. 13
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Although this Court certified the action as a class action pursuant to Fed. R. Civ. P. 23(b)(3) on September 6, 2006, a court may decertify a class at any time if recognized grounds exist to do so. Defendants vigorously opposed class certification on grounds relating to the statute of limitations, laches, and remedy defenses that they asserted placed the class at risk of decertification. Under the Agreement, Defendants have agreed to not move for decertification of the Settlement Class throughout the Remaining Litigation. (3) The Amount Offered in Settlement.

The amount offered in the Partial Settlement, once it becomes Final, is $35 million, including attorney s fees and costs not to exceed $8.75 million. This amount is in addition to any benefits that Participants and Beneficiaries are currently entitled to or would be entitled to under the terms of the Retirement Plan as it currently exists or under any other benefit plan sponsored by Honeywell. Prospective elimination of administrative fees on SBA accounts, also included in the Partial Settlement, represents additional valuable relief above the $35 million. In addition, a Special Incentive Amount of $150,000, to be allocated among the Named Plaintiffs, will be paid by the Retirement Plan. The Partial Settlement also provides Named Plaintiffs and the Settlement Class with the opportunity to recover up to an additional $500 million through the Remaining Litigation of the Three Remaining Claims. Considering the uncertainties of trial, the expected duration of litigation, and the potential for an additional recovery of up to $500 million on the Three Remaining Claims, the amount offered in Partial Settlement is highly favorable. See Mego Financial Corp., 213 F.3d at 459. In contrast, the Released Claims either would not provide significant additional monetary recovery (e.g., the document claims and the claims related to the fees charges on SBA accounts) or would provide monetary relief that overlaps and would be duplicative of the relief that could be granted on the Three Remaining Claims. (4) The Extent of Discovery Completed and the Stage of the Proceedings. 14
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As set forth above, the proposed Partial Settlement was reached after more than three years of contested litigation. During this time, Class Counsel has conducted an extensive investigation, and commenced broad based discovery that has already resulted in the production of millions of pages of documents from Defendants. Class Counsel has vigorously prosecuted this case and has undertaken extensive review of the governing law, relevant facts and documents produced in discovery. Throughout the litigation, Class Counsel has worked with actuarial experts to determine damages and has substantial and credible information on which to base an informed decision about the Partial Settlement. See Mego Financial Corp., 213 F.3d at 459 (citing Linney v. Cellular Alaska P ship, 151 F.3d 1234, 1239 (9th Cir. 1998). A settlement following sufficient discovery and genuine arms-length negotiation is presumed fair. Nat l Rural Telecom. Coop., 221 F.R.D. at 528 (citing City P ship C. v. Atlantic Acquisition Ltd P ship, 100 F.3d 1041, 1043 (1st Cir. 2006)). (5) Experience and View of Counsel.

As set forth in the parties motion for preliminary approval, Class Counsel include both of the founding partners of the law firm Martin & Bonnett, PLLC in Phoenix, Arizona. Class Counsel has extensive experience in ERISA litigation and is, therefore, extremely well equipped to negotiate a fair settlement for Named Plaintiffs and the Settlement Class. Class Counsel s opinion demands great weight both because of its familiarity with the Litigation and because of its extensive experience in similar actions. See In re Washington Pub. Power Supply Sys. Sec. Lit., 720 F.Supp. 1379, 1392 (D. Ariz. 1989) (citing Officers for Justice, 688 F.2d at 625). Based on an exhaustive review of the relevant factors in this case, Class Counsel is satisfied that the Partial Settlement is fair, reasonable, adequate and in the best interests of Named Plaintiffs and the Settlement Class. (6) No Collusion between the Parties.

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As set forth in the parties motion for preliminary approval of the settlement, and as described in declarations submitted by Plaintiffs in support of the motion for attorneys fees, (Doc. 385, Exh. 1A, 1B), the Partial Settlement is the result of a high level, arm s length hard fought and adversarial negotiation and mediation process. The parties engaged in mediation with John Utz and Eric Green, two nationally recognized and highly experienced mediators with substantial ERISA and complex class action knowledge. All parties represented the interests of their clients vigorously and devoted a considerable amount of time, effort and resources to secure the terms of the Partial Settlement before this Court. (7) The Reaction of the Settlement Class Is Highly Favorable

The reaction of the Settlement Class to the proposed Partial Settlement is perhaps one of the best indications of its reasonableness. A large number of the class members in this case are knowledgeable about the litigation and have been vocal about their claimed rights under the Plan. As of this filing, which is the day objections are due, not a single class member has filed an objection. Even if objections are filed, however, it is clear that as a whole, the Settlement Class overwhelmingly supports the settlement. Even

settlements with significant numbers of objectors (which is not the case here) have been upheld as fair and adequate. See, e.g., Van Horn v. Trickey, 840 F.2d 604, 606 (8th Cir. 1988) (settlement approved despite objections of 45 percent of class members).
CONCLUSION

For the foregoing reasons and for the reasons set forth in the parties motion for preliminary approval of the Partial Settlement, the Parties jointly and respectfully request that the Court enter the order submitted herewith approving the Partial Settlement and entering judgment pursuant to Rule 54(b).

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Respectfully submitted this 24th day of January, 2008.

MARTIN AND BONNETT, P.L.L.C.

s/Susan Martin Susan Martin Daniel L. Bonnett Jennifer Kroll Martin & Bonnett, P.L.L.C. 3300 North Central Avenue, Suite 1720 Phoenix, AZ 85012-2517 Telephone: (602) 240-6900 ATTORNEYS FOR PLAINTIFFS

OSBORN MALEDON, P.A s/David Rosenbaum
David Rosenbaum Dawn L. Dauphine 2929 North Central Avenue Suite 2100 Phoenix, AZ 85012-2794 Michael L. Banks, pro hac vice William J. Delany, pro hac vice Azeez Hayne, pro hac vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] [email protected]

Howard Shapiro, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Telephone: (504) 310-4088 17
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[email protected] Amy Covert Proskauer Rose, LLP One Newark Center, 18th Floor Newark, NJ 07102-5211 Telephone: (973) 274-3258 [email protected]

ATTORNEYS FOR DEFENDANTS

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Case 2:04-cv-00424-ROS Document 386 Filed 01/24/2008 Page 19 of 20

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CERTIFICATE OF SERVICE I hereby certify that on January 24, 2008, I electronically transmitted the attached document to the Clerk s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the Following CM/ECF registrants: David B. Rosenbaum Dawn L. Dauphine Osborn Maledon, P.A. 2929 North Central Ave., Suite 2100 Phoenix, AZ 85012-2794 Michael Banks Azeez Hayne Morgan Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 Howard Shapiro Proskauer Rose LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112 Amy Covert Proskauer Rose LLP One Newark Center, 18th Floor Newark , NJ 07102-5211 Christopher Landau Eleanor R. Barrett Craig Primis Kirkland & Ellis LLP 655 Fifteenth Street, N.W. Washington, D.C. 20005 Attorneys for the Defendants s/ J. Kroll

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Case 2:04-cv-00424-ROS

Document 386

Filed 01/24/2008

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