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Case 1:05-cv-01908-TWP-TAB Document 734 Filed 08/31/12 Page 1 of 74 PageID #: 20749 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION MARY E. ORMOND, et al., ) On Behalf of Themselves and ) All Others Similarly Situated, ) Plaintiffs, ) ) v. ) Case No. 1:05-cv-01908-TWP-TAB ) ANTHEM, INC., et al., ) Defendants. ) ) DECLARATION OF LYNN LINCOLN SARKO IN SUPPORT OF PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND PLAN OF ALLOCATION - AND – AWARD OF ATTORNEYS’ FEES, COSTS, AND CASE CONTRIBUTION AWARDS Pursuant to 28 U.S.C. § 1746, I, Lynn Lincoln Sarko, declare as follows: 1. I am one of the attorneys for Plaintiffs in the above-captioned matter. I am one of the attorneys personally involved in the litigation of this matter. I make this Declaration based on personal knowledge and am competent to testify to the matters set out herein. 2. I am submitting this declaration in support of Plaintiffs’ application for an award of attorneys’ fees and reimbursement of expenses in connection with the services rendered in the course of the above-captioned litigation of Ormond, et al. v. Anthem, Inc., et al. I am over the age of 21, have personal knowledge of the facts stated herein, and, if sworn as a witness, can competently testify to the facts stated herein. 3. I am the Managing Partner of Keller Rohrback L.L.P., the head of the firm’s Complex Litigation group. Keller Rohrback L.L.P. is a national leader in plaintiffs’ class action 1 Case 1:05-cv-01908-TWP-TAB Document 734 Filed 08/31/12 Page 2 of 74 PageID #: 20750 litigation. Attached hereto as Exhibit A is a copy of the firm’s resume describing our practice and the attorneys in the firm, and setting forth some of our class action experience. 4. In addition to its general expertise, Keller Rohrback L.L.P. is an acknowledged leader in the area of breach of fiduciary duty class actions. We brought the seminal IKON ERISA case,1 which was the first “company stock” case articulating the fiduciary duties owed to retirement plan participants. Since that time, we have served as Lead or Co-Lead Counsel in more than 53 breach of fiduciary class actions in the country. Our experience and skill are demonstrated by the effective prosecution of this action, including successfully surviving summary judgment in order to advance towards trial, and by the substantial Settlement entered into with Defendants. 5. I have been actively engaged in the prosecution of complex litigation for two decades. I received both my M.B.A. degree in accounting and law degree from the University of Wisconsin, where I served as Editor-in-Chief of the Wisconsin Law Review and was selected by faculty as the outstanding graduate of my class. I served as a former Assistant United States Attorney and Ninth Circuit judicial law clerk (Hon. Jerome Farris). I have prosecuted a variety of class actions involving high profile matters including the Exxon Valdez Oil Spill, the Microsoft civil antitrust case, the Vitamins price-fixing cases and the MDL Fen/Phen Diet Drug Litigation. I am a recipient of Trial Lawyer of the Year by the Trial Lawyers for Public Justice Foundation and for the last seven years was named a “Super Lawyer” among civil litigators by Washington Law and Politics magazine in its annual review of the State’s legal profession. 6. In late 2010, I was approached concerning the possibility of Keller Rohrback L.L.P. associating as co-counsel for Plaintiffs in this case. With a small group of partners and my 1 In re IKON Office Solutions, Inc., 277 F.3d 658 (3rd Cir. 2002). 2 Case 1:05-cv-01908-TWP-TAB Document 734 Filed 08/31/12 Page 3 of 74 PageID #: 20751 firm’s Executive Committee, I carefully evaluated the risks and potential benefits of getting involved. The risks were substantial. One significant risk was the fact that the case was already in progress, which in my experience usually presents unique challenges. Another significant risk was the unknown viability of the claims asserted. At that time, most demutualization cases had failed for one reason or another; there was no track record of success. The complaint had survived a motion to dismiss, but the District Judge who issued that ruling was no longer assigned to the case, so future prospects were completely unknown. A major risk was the fact that Keller Rohrback L.L.P. was being asked to make a major commitment of time and money. The case was in a phase of intense discovery, discovery disputes, and briefing, which would likely require the equivalent of two full-time Keller Rohrback L.L.P. partners, plus associates, paralegals and support staff, for a period of years. This “opportunity cost” was a significant disincentive to taking the case. I knew the defense firms personally from my experience in other large class-action matters, and I knew the counsel to be excellent lawyers and zealous advocates who would challenge us every step of the way. And if my firm were to become involved, we would be asked to help finance past and future litigation expenses, which at that time amounted to several million dollars. 7. Because of the risk presented and the large investment of time and money that would likely be required in this particular case, Keller Rohrback L.L.P. would not have represented the Class or any Class member on a pure hourly-fee basis. The only circumstance under which Keller Rohrback L.L.P. would have agreed to represent a plaintiff in this case is (1) on a class-action basis, (2) with the expectation that, if a successful result was obtained, counsel would petition the Court for a percentage of the “common fund” created for the benefit of the class, (3) with the expectation that, if a successful result was obtained, counsel would petition the 3 Case 1:05-cv-01908-TWP-TAB Document 734 Filed 08/31/12 Page 4 of 74 PageID #: 20752 Court for reimbursement of litigation expenses advanced on behalf of the class, and (4) with the expectation that the Court, in awarding attorneys’ fees, would fully consider the various risks assumed by counsel. 8. Rule 23 provides that attorneys’ fees in class actions are set by the Court, not as a matter of contract between client and attorney (as happens in a traditional contingent fee arrangement). If Rule 23 did not control and if we had been in a position to negotiate a contingent fee with “the Class” (assuming a legal structure for such an entity) at the outset of the representation, Keller Rohrback L.L.P. would not have accepted this representation for a contingent fee of less than 33.3%. to 45% (depending on the final stage of litigation) to create positive incentives for performance and to fairly reflect the risk presented. In my judgment, this minimum contingent fee would properly reflect the risk of litigation in this particular case, the complexity of the legal and factual issues presented, Keller Rohrback L.L.P.’s experience and track record in similar cases and other large class action matters, and the market for sophisticated, specialized legal services such as those required here. Keller Rohrback L.L.P. operates in a national legal market for legal services, and a one-third contingency fee is the “going rate” for the legal services we customarily provide and provided in this type of case. 9. This case could not practically have been brought as anything but a class action because of the relatively small amount of damages suffered by each class member and the overwhelming costs of litigation such claims. In my experience, no rational class member would have agreed to hire counsel on a fee-for-service basis in order to pursue this case. 10. In view of these and other risks, Keller Rohrback L.L.P. only agreed to become Class Counsel in the case because we determined: (a) pre-existing counsel had written fee agreements with the class representatives providing for a percentage-based contingent fee of at 4 Case 1:05-cv-01908-TWP-TAB Document 734 Filed 08/31/12 Page 5 of 74 PageID #: 20753 least 33.3% and up to 45% (depending on the stage of litigation); (b) the case was venued within the Seventh Circuit, which provides that fee awards in common-fund cases be based on a determination of the ex ante contingent fee percentage that would have been reasonable; and (c) in compliance with RPC 1.5(e), it was agreed that Keller Rohrback L.L.P. would be jointly responsible for the representation, that attorneys fees would be divided per specific written agreement, and the clients agreed to the fee arrangement in writing. 11. Based on my experience and judgment, the proposed $90 million settlement is a fair, reasonable and adequate result. This case presented extraordinary risks at trial as well as the risk that any favorably jury verdict might be disturbed on appeal. I served as one of the chief negotiators for Plaintiffs in the settlement process and attended in person the first and second mediation sessions in San Francisco in February and May 2012 as well as participated in the numerous telephonic discussions. I attest that the settlement negotiations were among the most challenging I have encountered in thirty years of law practice. Fortunately, the parties selected Hon. Edward A. Infante (Ret.) to serve as mediator. In addition to two formal mediation sessions, Judge Infante provided extensive “shuttle diplomacy” between and after the in-person sessions to keep the lines of communication open over a period of months, despite what appeared to be a potential impasse.

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