Case 6:08-Cv-03109-GAF Document 239 Filed 02/03/12 Page 1 of 51 TABLE of CONTENTS
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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI SOUTHERN DIVISION JEREMY BRADEN, individually and on behalf ) of all others similarly situated, ) Case No. 6:08-cv-3109-GAF ) Plaintiff; ) Hon. Gary A. Fenner ) v. ) CLASS ACTION ) WAL-MART STORES, INC., et al., ) ) Defendants. ) DECLARATION OF LYNN LINCOLN SARKO IN SUPPORT OF (1) NAMED PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT, CERTIFICATION OF SETTLEMENT CLASS, APPROVAL OF FORMS AND METHODS OF NOTICE, APPROVAL OF THE PLAN OF ALLOCATION, AND ENTRY OF FINAL ORDER AND JUDGMENT AND (2) LEAD COUNSEL’S MOTION FOR ATTORNEYS’ FEES, REIMBURSEMENT OF COSTS AND EXPENSES, AND CASE CONTRIBUTION AWARD TO NAMED PLAINTIFF Case 6:08-cv-03109-GAF Document 239 Filed 02/03/12 Page 1 of 51 TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................ 1 II. PROCEDURAL AND LITIGATION HISTORY............................................................ 2 A. Investigation and Preparation of Comprehensive Claims..................................... 2 B. The Motions to Dismiss and the Appeal............................................................... 4 C. Discovery.............................................................................................................. 9 1. Preliminary Discovery and Scheduling Matters....................................... 9 2. Written Discovery Requests Among the Parties: Interrogatories, Requests for Production, and Requests for Admission. .............................................................................................. 11 3. Third Party Discovery............................................................................. 12 4. Document Discovery. ............................................................................. 13 5. Depositions. ............................................................................................ 15 6. Expert Witnesses..................................................................................... 15 7. Discovery Disputes................................................................................. 16 D. Class Certification............................................................................................... 16 E. Settlement Negotiations...................................................................................... 17 F. Terms of the Settlement...................................................................................... 19 1. Settlement Amount. ................................................................................ 19 2. Injunctive Relief...................................................................................... 20 3. Plan of Allocation................................................................................... 20 4. Independent Fiduciary Approval. ........................................................... 21 III. THE SETTLEMENT WARRANTS THE COURT’S APPROVAL.............................. 21 A. The Wireless Factors........................................................................................... 21 IV. CLASS CERTIFICATION............................................................................................. 27 A. Confirmation of Class Certification is Warranted Here. .................................... 27 Case 6:08-cv-03109-GAF Documenti 239 Filed 02/03/12 Page 2 of 51 B. Lead Counsel Easily Meet the Requirements of Rule 23(g)............................... 27 V. THE FORMS AND METHODS OF NOTICE EMPLOYED HERE SATISFY RULE 23 AND DUE PROCESS................................................................... 28 VI. THE PROPOSED PLAN OF ALLOCATION SHOULD BE APPROVED.................. 29 VII. TIME AND EFFORT DEDICATED TO THIS CASE.................................................. 31 VIII. THE RECORD FULLY SUPPORTS THE AWARD OF REQUESTED ATTORNEYS’ FEES ..................................................................................................... 35 A. The Westerhaus Factors...................................................................................... 36 B. The Allen Factors. ............................................................................................... 38 a. Lead Counsel. ............................................................................. 40 b. Additional Plaintiff’s Counsel. ................................................... 43 c. Defense Counsel. ........................................................................ 43 IX. PLAINTIFF’S COUNSEL SHOULD BE REIMBURSED FOR THEIR REASONABLE EXPENSES ADVANCED IN THE LITIGATION............................ 45 X. NAMED PLAINTIFF SHOULD BE GRANTED A CASE CONTRIBUTION AWARD .......................................................................................... 46 XI. CONCLUSION............................................................................................................... 47 Case 6:08-cv-03109-GAF Documentii 239 Filed 02/03/12 Page 3 of 51 Pursuant to 28 U.S.C. § 1746, I, Lynn Lincoln Sarko, declare as follows: I. INTRODUCTION 1. I am a member in good standing of the State Bar of Washington, the Managing Partner of Keller Rohrback L.L.P., head of the firm’s Complex Litigation Group, and attorney for Plaintiff Jeremy Braden (“Braden” or “Named Plaintiff”). On December 5, 2011, the Court entered its Order Preliminarily Approving Class Action Settlement, Conditionally Certifying Settlement Class, Directing Distribution of Class Notice, Appointing Class Counsel and Class Representative, and Setting Hearing for Final Approval of Class Action Settlement (“Preliminary Approval Order”) (Dkt. No. 231), in which it conditionally approved and appointed Keller Rohrback as Lead Counsel and Aleshire Robb P.C. as Liaison Counsel (collectively, “Class Counsel”). 2. I submit this declaration in support of (a) Named Plaintiff’s Motion for Final Approval of Class Action Settlement, Certification of Settlement Class, Approval of Forms and Methods of Notice, Approval of the Plan of Allocation, and Entry of Final Order and Judgment and (b) Lead Counsel’s Motion for Attorneys’ Fees, Reimbursement of Costs and Expenses, and Case Contribution Award to Named Plaintiff. 3. The purpose of this Declaration is to summarize the factual and procedural history of this litigation—which has spanned nearly four years—including, without limitation, the initial filing and investigation of this matter, amending the complaint, motions practice, appellate practice, discovery, mediation and settlement negotiations, coordination of the efforts of all Plaintiff’s Counsel, and litigation expenses. As Lead Counsel for Braden and the Class, we have been intimately involved in all aspects of this litigation from the outset to the present. Case 6:08-cv-03109-GAF Document1 239 Filed 02/03/12 Page 4 of 51 4. Under the Class Action Settlement Agreement (Dkt. No. 229-1), 1 a Settlement Fund of $13.5 million has been established, as well as the provision of other Non-Monetary Considerations that will continue to improve the Plan and benefit the Settlement Class. The Settlement represents an excellent result that will provide significant benefits to the Settlement Class, while removing the risk and delay associated with further litigation. 5. As directed by the Court in Preliminary Approval Order, the Parties have provided notice to the Settlement Class. Thus far, no objections have been received. We have received inquiries from the lawyer for one Plan participant, whose questions regarding whether Merrill Lynch actually contributed to the Settlement Fund we answered. 6. The Settlement is the result of hard-fought litigation in the face of a highly complex and risky case, extensive briefing in this Court and before the Eighth Circuit, discovery, and contentious settlement negotiations. I am pleased to present the Settlement to the Court for its consideration and believe strongly that it should be approved. II. PROCEDURAL AND LITIGATION HISTORY A. Investigation and Preparation of Comprehensive Claims. 7. On March 27, 2008, Braden filed this ERISA action (Dkt. No. 2) challenging the Wal-Mart Defendants’ 2 conduct in relation to excessive fees paid by the Wal-Mart Profit Sharing and 401(k) Retirement Plan (the “Plan”) and—ultimately—the Plan’s participants. 8. On July 21, 2010, after significant discovery and one mediation session, Braden filed his Amended Complaint for Violations of the Employee Retirement Income Security Act (ERISA) (“Complaint”) (Dkt. No. 107) against the Wal-Mart Defendants and added claims 1 All capitalized terms not otherwise defined in this Declaration have the same meaning given them in the Settlement Agreement. 2 The Wal-Mart Defendants (“Wal-Mart”) and the Merrill Lynch Defendants (“Merrill Lynch”) discussed herein refer to the same groups defined in the Final Approval Memo and the Fee Petition. Case 6:08-cv-03109-GAF Document2 239 Filed 02/03/12 Page 5 of 51 against the Merrill Lynch Defendants, including that Merrill Lynch charged undisclosed excessive fees to the Plan and Plan participants. 9. In his eleven-count Complaint, Braden alleges that the Wal-Mart and Merrill Lynch Defendants violated their fiduciary and co-fiduciary duties under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”) by, inter alia , (a) failing to prudently and loyally manage the Plan and Plan assets; (b) failing to provide complete and accurate information; (c) knowing of, participating in, and/or enabling breaches of fiduciary