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  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
  • LAURA S LEHMAN VS. TRANSBAY JOINT POWERS AUTHORITY ET AL EMINENT DOMAIN document preview
						
                                

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1 Daniel L. Rottinghaus, Esq., California State Bar No. 131949 Scott M. Mackey, Esq., California State Bar No. 222217 2 Seema N. Kadaba, Esq., California State Bar No. 304952 BERDING & WEIL LLP ELECTRONICALLY 3 2175 N. California Blvd., Suite 500 F I L E D Walnut Creek, California 94596 Superior Court of California, 4 Telephone: 925/838-2090 County of San Francisco Facsimile: 925/820-5592 07/24/2020 5 Clerk of the Court Allan Steyer, Esq., California State Bar No. 100318 BY: SANDRA SCHIRO 6 Deputy Clerk D. Scott Macrae, Esq., California State Bar No. 104663 STEYER LOWENTHAL BOODROOKAS 7 ALVAREZ & SMITH LLP 235 Pine Street, 15th Floor 8 San Francisco, California 94104 Telephone: (415) 421-3400 9 Facsimile: (415) 421-2234 10 Attorneys for Plaintiffs MAUI PEAKS CORPORATION, NGMII LLC, and IAN KAO 11 12 SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 FOR THE COUNTY OF SAN FRANCISCO 14 15 LAURA S. LEHMAN, et al., Lead Case No. CGC-16-553758 16 Plaintiffs, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 17 v. FOR FINAL SETTLEMENT APPROVAL 18 TRANSBAY JOINT POWERS AUTHORITY, et al., 19 Defendants. 20 And Related & Consolidated cases. Date: August 7, 2020 21 Time: 10:00 a.m. This document applies to Location: Courtroom 502 22 Maui Peaks Corporation, et al. v. Mission 23 Street Development, et al. – CGC17-17- 560322 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ........................................................................................................... 5 4 5 II. SUMMARY OF THE LITIGATION .............................................................................. 6 6 III. DESCRIPTION OF THE SETTLEMENT ...................................................................... 8 7 IV. THE SETTLEMENT MEETS THE STANDARDS FOR FINAL APPROVAL ........... 9 8 A. The Settlement was the Result of Arms-Length Bargaining ............................. 10 9 B. The Strength of Plaintiffs’ Case and the Risk, Expense, Complexity and Likely Duration of Further Litigation ................................................................ 11 10 C. The Risk of Maintaining Class Action Status Through Trial ............................ 13 11 D. The Amount Offered in Settlement ................................................................... 14 E. The Extent of Discovery Completed and the Stage of the Proceedings .......... 15 12 F. Experience and Views of Counsel ..................................................................... 16 13 G. The Reaction of the Class Members .................................................................. 17 14 V. THE CLASS IS PROPERLY CERTIFIED FOR SETTLEMENT PURPOSES ........... 17 15 A. The Proposed Class Is Ascertainable and Numerous......................................... 18 16 B. Common Issues of Law and Fact Predominate .................................................. 19 17 C. The Claims of the Plaintiffs Are Typical of the Class Claims ........................... 19 D. The Class Representatives Fairly and Adequately Protected the Class ............. 20 18 E. The Superiority Requirement Is Met.................................................................. 20 19 VI. APPROPRIATE NOTICE WAS GIVEN TO THE SETTLEMENT CLASS 20 PURSUANT TO THE PRELIMINARY APPROVAL ORDER................................... 22 21 VII. THE SOLE OBJECTION SHOULD BE OVERRULED.............................................. 23 22 VIII. CONCLUSION .............................................................................................................. 26 23 24 25 26 27 28 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 TABLE OF AUTHORITIES Page 2 Cases 3 7-Eleven Owners for Fair Franchising v. Southland Corp., 85 Cal. App. 4th 1135 (2000) ............................................................................... 12, 17, 18, 23 4 Anderson v. Nextel Retail Stores, LLC, No. CV 07-4480-SVW FFMX, 2010 WL 591002, (C.D. Cal. Apr. 12, 2010) ...................................................................................................... 24 5 Assilzadeh v. California Fed. Bank, 82 Cal.App.4th 399 (2000) ............................................... 11 6 Basurco v. 21st Century Ins. Co., 108 Cal. App. 4th 110 (2003) .......................................... 14, 21 7 Brown v. China Integrated Energy Inc., No. CV1102559BROPLAX, 2015 WL 12712081 8 (C.D. Cal. Aug. 19, 2015) ........................................................................................................ 15 9 Chan v. Sutter Health Sacramento Sierra Region, No. LACV1502004JAKAGRX, 2017 WL 819903 (C.D. Cal. Feb. 14, 2017) ........................................................................... 17 10 Chavez v. Netflix, Inc., 162 Cal. App. 4th 43 (2008) ................................................................... 26 11 Cho v. Seagate Technology Holdings, Inc. 177 Cal.App.4th 734 (2009) .............................. 18, 23 12 City of San Jose v. Superior Court, 12 Cal.3d 447 (1974) .......................................................... 14 13 Clark v. American Residential Services LLC, 175 Cal. App. 4th 785 (2009).............................. 10 14 Daar v. Yellow Cab. Co., 67 Cal. 2d 695 (1967) ......................................................................... 18 15 Dunk v. Ford Motor Co., 48 Cal.App.4th 1794 (1996) ........................................................ passim 16 Epstein v. MCA, Inc., 50 F.3d 644 (9th Cir. 1995), rev'd sub nom. Matsushita Elec. Indus. 17 Co. v. Epstein, 516 U.S. 367 (1996) ....................................................................................... 24 18 Fireside Bank v. Super. Ct., 40 Cal. 4th 1069 (2007) .................................................................. 19 19 Franchise Tax Bd. Ltd. Liab. Corp. Tax Refund Cases, 25 Cal. App. 5th 369 (2018) ................ 19 20 Global Minerals & Metals Corp. v. Superior Court, 113 Cal.App.4th 836 (2003)..................... 18 21 Hendershot v. Ready to Roll Transp., Inc., 228 Cal. App. 4th 1213 (2014) ................................ 19 22 Hernandez v. Vitamin Shoppe Industries, Inc., 174 Cal. App. 4th 1441 (2009).......................... 18 23 In re Cellphone Fee Termination Cases, 186 Cal. App. 4th 1380 (2010) ............................. 10, 23 24 In re Lithium Ion Batteries Antitrust Litig., No. 13-MD-02420-YGR, 2017 WL 6497597, (N.D. Cal. Dec. 19, 2017) ........................................................................................................ 25 25 Jackson v. SPS Techs., LLC, No. CV 15-09854-AB (JCX), 2018 WL 4440804, (C.D. Cal. 26 Sept. 4, 2018) ........................................................................................................................... 25 27 Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116 (2008) ......................................... 10, 11 28 Leo F. Piazza Paving Co. v. Found. Constructors, Inc., 128 Cal.App.3d 583 (1981) ............... 12 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 Martinez v. Joe's Crab Shack Holdings, 231 Cal. App. 4th 362 (2014) ...................................... 19 2 Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles, 186 Cal. App. 4th 399 (2010) ) ............ 13 3 Nordstrom Comm'n Cases, 186 Cal. App. 4th 576 (2010) ...................................................... 9, 11 4 Pagano v. Krohn, 60 Cal.App.4th 1 (1997) ) ............................................................................... 12 5 Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985)................................................................ 21 6 Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741(9th Cir. 2006) ................................... 24 7 Richmond v. Dart Industries, Inc., 29 Cal. 3d 462 (1981) ..................................................... 17, 21 8 Rosack v. Volvo of Am. Corp., 131 Cal. App. 3d 741 (1982) ...................................................... 20 9 Ryan v. California Interscholastic Federation - San Diego Section, 94 Cal. App. 4th 1048 (2001) ....................................................................................................................................... 21 10 RSB Vineyards, LLC v. Orsi, 15 Cal.App.5th 1089 (2017) 2001) ............................................... 11 11 Safeco Ins. Co. v. J & D Painting, 17 Cal. App. 4th 1199 (1993) ............................................... 12 12 Safeway, Inc. v. Super. Ct., 238 Cal. App. 4th 1138 (2015) ........................................................ 19 13 Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319 (2004) .......................................... 20 14 Valentino v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir. 1996) ................................................ 20 15 Villacres v. ABM Indus. Inc., 189 Cal.App.4th 562 (2010) ) ....................................................... 26 16 Washington Mutual Bank v. Superior Court, 24 Cal.4th 906 (2001) .......................................... 19 17 Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224 (2001) ........................................... 10, 23 18 Statutes 19 California Code of Civil Procedure Section 382..................................................................... 17,18 20 California Rules of Court 3.766 ............................................................................................. 21, 23 21 California Rules of Court Rule 3.769 ........................................................................ 10, 21, 23, 26 22 California Rules of Court Rule 3.771 .......................................................................................... 26 23 Treatises 24 1 Newberg on Class Actions, Section 4.25 (1992) ....................................................................... 19 25 6 Newberg on Class Actions Section 18:20 (5th ed.) ............................................................. 23, 24 26 2 McLaughlin on Class Actions § 6:29 (16th ed.) ....................................................................... 24 27 28 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 I. INTRODUCTION 2 Plaintiffs respectfully submit this memorandum in support of their motion for final 3 approval of the settlement of this class action (the “Settlement”). As shown in this Motion, the 4 Settlement is fair, adequate, and reasonable, and satisfies all of the criteria for final approval. As 5 consideration for this Settlement, Gross Class Settlement Proceeds of $29,844,000 will be 6 established, which is an excellent result for the Class, particularly in light of the fact that an 7 additional $99.1 million upgrade of The Millennium Tower will proceed under the direction of 8 the Millennium Tower Association if the Settlement is approved. The Settlement is all-in with no 9 reversion to Defendants. 10 Pursuant to the Order Granting Preliminary Approval of Class Action Settlement, entered 11 May 8, 2020 (“Preliminary Approval Order”), Class Notice was mailed and emailed to the Class 12 Members and the Class Members’ response was overwhelmingly positive. Claims were filed by 13 the purchasers of 74% of the 161 units comprising the Class. No Class Member opted out of the 14 Class. There was only one objector, and that objection lacks merit and should be overruled. See 15 Section VII below. The Settlement Class meets the requirements for class certification. 16 Accordingly, Plaintiffs respectfully request the Court grant final approval and certify the 17 Settlement Class. 18 Without the Settlement, there would have been substantial litigation risks, including but 19 not limited, to class-certification risks. Continued litigation would result in the further depletion 20 of the limits of insurance policies which provide that ongoing litigation expenses (attorneys’ fees 21 and defense costs) decrease the amount of money remaining to pay judgments or settlements. 22 Moreover, it is in the interest of the Class Members that the upgrade of The Millennium Tower 23 not be delayed by further litigation. Therefore, Plaintiffs respectfully request that this Court grant 24 final approval of the Agreement and enter the proposed order submitted herewith. 25 II. SUMMARY OF THE LITIGATION 26 As part of consolidated litigation before the San Francisco Superior Court addressing The 27 Millennium Tower, a condominium and commercial building, located at 301 Mission Street in 28 San Francisco, a class action settlement has been reached addressing claims brought by certain 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 past and present unit holders in the building. 2 Commencing in May 2016, a number of lawsuits were filed addressing alleged settlement 3 and tilt of The Millennium Tower. These separate suits were brought on behalf of the Millennium 4 Tower Association, individual unit owners, and a putative class of unit holders. The cases were 5 consolidated for pretrial and trial purposes and involved many parties and cross-claims. Maui 6 Peaks Corporation, Ian Kao, and NGMii LLC are the Plaintiffs in this class action and the 7 Defendants are Mission Street Development LLC, Mission Street Holdings LLC, and Transbay 8 Joint Powers Authority. Cross-Defendants in the consolidated actions include many of the 9 contractors on The Millennium Tower, parties alleged to have been involved in the sale of units, 10 and the various developers, contractors, and owners of adjacent properties who were alleged to 11 have caused, impacted, or exacerbated the alleged settlement and tilt. All of these Defendants 12 and Cross-Defendants are parties to the Class Action Settlement and will be released by all 13 Settlement Class Members. 14 On July 21, 2017, Maui Peaks Corporation filed this lawsuit in the Superior Court of the 15 State of California, County of San Francisco on behalf of themselves and two putative classes. 16 The Complaint alleged claims for breach of fiduciary duty, failure to disclose, violation and 17 enforcement of governing documents, and unfair business practices against Mission Street 18 Development LLC and Mission Street Holdings LLC (“the Developer Defendants”), and for 19 express indemnity, specific performance, and declaratory relief against Transbay Joint Powers 20 Authority (“TJPA”). 21 On September 14, 2017, a First Amended Complaint was filed adding NGMii LLC as an 22 additional Plaintiff. The Developer Defendants’ demurrer to the First Amended Complaint was 23 overruled in part and sustained in part with leave to amend. Plaintiffs filed a Second Amended 24 Complaint on January 5, 2018. The Developer Defendants’ demurrer to the fiduciary duty and 25 constructive fraud claims in the Second Amended Complaint was sustained. Numerous cross- 26 claims were filed against contractors of the adjacent properties. Plaintiffs filed a motion for class 27 certification on November 11, 2018. On July 17, 2019, pursuant to a stipulation of the Parties, 28 Plaintiffs filed a Third Amended Complaint adding Plaintiff Ian Kao, removing the causes of 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 action to which the Developer Defendants’ demurrer had been sustained, and amending the class 2 definition to conform with the motion for class certification. 3 The Parties have agreed to a Settlement Class defined as: “All individuals and entities 4 who 1) own one or more condominium units in The Millennium Tower, that they purchased prior 5 to May 10, 2016; 2) purchased one or more condominium units in the Millennium Tower prior to 6 May 10, 2016 and sold such unit or units after May 10, 2016; or 3) own one or more 7 condominium units in The Millennium Tower, that they purchased after May 10, 2016. 8 Agreement at § 2.47”. 1 A Fourth Amended Complaint was later filed at the direction of the Court 9 with a class definition that conformed with the definition of the Settlement Class. 10 Although a settlement has been reached, the Settling Parties deny any liability or 11 wrongdoing of any kind associated with the claims alleged in the Action and further deny that, for 12 any purpose other than settlement, this action is appropriate for class treatment. Nonetheless, 13 without admitting that class certification would be proper if the case were litigated, Settling 14 Parties have agreed that the above Class may be certified for settlement purposes only. The 15 Parties agree that certification for settlement purposes is not an admission that class certification 16 would be proper if the class certification issue were litigated. Solely for purposes of settling the 17 Action, the Parties stipulate and agree that the requisites for establishing class certification with 18 respect to the Class, as defined above, are satisfied. 19 Class Counsel have conducted a thorough investigation of the facts of this case and the 20 cases with which it has been consolidated. Class Counsel has diligently evaluated the Class 21 Members’ claims. The Parties engaged in written discovery including interrogatories, production 22 of documents and reports, and other information, allowing for the full and complete analysis of 23 liabilities and defenses to the claims in this Action. Class Counsel reviewed thousands of pages 24 of documents produced in the litigation, prepared for and attended dozens of depositions, and 25 26 1 The Settlement Class excludes the Developer Defendants, TJPA, and the officers and directors 27 and employees of the Developer Defendants and TJPA, as well as their families and also excludes the plaintiffs named in the individual Millennium Tower actions who have asserted 28 causes of action against TJPA and/or the Developer Defendants. 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 retained experts, including a damages expert who prepared a report which was filed with the class 2 certification motion. Based on the foregoing discovery and their own independent investigation, 3 evaluation and experience, Class Counsel believe that the Settlement is fair, reasonable, and 4 adequate and is in the best interest of the Class in light of all known facts and circumstances. See 5 Declarations of Daniel Rottinghaus (“Rottinghaus Decl.”) ¶ 17 and Allan Steyer (“Steyer Decl.”) 6 ¶ 16 filed herewith. 7 After rigorous analysis, Judge Kiesselbach entered the Preliminary Approval Order on 8 May 8, 2020. Following a robust notice and claims program in conformance with the Preliminary 9 Approval Order, most Settlement Class Members filed claims and none requested exclusion from 10 the Settlement Class. There was only one objection, which is discussed in Section VII below. 11 III. DESCRIPTION OF THE SETTLEMENT 12 Under the Agreement, the Gross Class Settlement Proceeds of $29,844,000.00 will be 13 used for the following payments: (1) payments to the Class Members; (2) payment of attorney’s 14 fees; (3) reimbursement of litigation expenses and settlement administration -- including notice – 15 expenses; and (4) payment of Class Representative Service Awards. Agreement at § 6.6. The 16 Settlement is all-in with no reversion to Paying Settling Parties. Moreover, this Settlement is part 17 of the global settlement of the many actions and cross-actions that make up this litigation. In 18 addition to receiving monetary compensation, the global settlement provides for the Upgrade of 19 The Millennium Tower under the control of the Millennium Tower Association, which will 20 benefit all unit owners including Class Members. 2 21 After deducting the Class Action Settlement Administrator expenses, the Class 22 Representative Service Awards, and the Attorneys Fees and Expenses awarded by the Court from 23 the Gross Class Settlement Proceeds, the remaining Settlement Proceeds (“Net Settlement 24 2 25 Decisions regarding the Upgrade will be made by the Millennium Tower Association subject to controlling law, its governing documents, and permitting requirements. For the avoidance of 26 doubt, the Class Settlement is in no way contingent on the effectiveness of the Upgrade Plan or the Upgrade in remedying, halting, or correcting any movement or tilt of The Millennium Tower, and if 27 approved, the class settlement will remain effective regardless of the effectiveness of the Upgrade, the Upgrade Plan, non-upgrade repairs, or the decisions made by the Millennium Tower 28 Association regarding the Upgrade, the Upgrade Plan, or non-upgrade repairs. 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 Proceeds”) will be allocated among the Settlement Class Members as follows: 1) each of the 2 Class Members who purchased a unit or units after May 10, 2016, when the sinking and tilting of 3 The Millennium Tower was publicly disclosed, who still own the unit(s), and who submit a valid 4 claim will be paid $10,000.00 per unit; and 2) each of the Class Members who purchased a unit 5 or units prior to May 10, 2016 and either sold after May 10, 2016 or still own their unit(s) and 6 who submit a valid claim shall receive a pro rata share of the remaining Net Settlement Proceeds 7 based on the total purchase price of all these units. For example, a Settlement Class Member 8 who paid $1 million for their unit will be paid twice as much as such a Settlement Class Member 9 who paid $500,000 for their unit. 10 Class Members had the right to opt-out of the Settlement by following the directions in the 11 Class Notice. Agreement at § 9.3. None did. All Class Members were given the opportunity to 12 file a claim and will receive a payment if their claims are validated by the Settlement 13 Administrator. Agreement at §§ 6.6, 6.7. The Notice also advised the Class Members of their 14 right to object to the Settlement. Agreement at § 9.1. Only one did and it lacks merit. The 15 Parties agreed to use EPIQ Class Action and Claims Solutions, Inc. (“EPIQ”) as the Settlement 16 Administrator for the Settlement. Agreement at § 2.12. 17 Class counsel will receive reimbursement of litigation expenses and settlement 18 administration expenses, including notice expenses, not to exceed $625,000 from the Gross Class 19 Settlement Proceeds. Agreement at §§ 7.2, 8.1. Subject to Court approval, the Agreement 20 provides for payment from the Gross Class Settlement Proceeds of $7,500 as a Class 21 Representative Service Award to each of the three Plaintiffs or such other amount as may be 22 approved by the Court. Agreement at § 8.1. Subject to Court approval, the Agreement provides 23 for Class Counsel to be awarded attorneys’ fees not to exceed $3 million, which is approximately 24 10% of the Gross Class Settlement Proceeds. Agreement at § 8.1. 25 IV. THE SETTLEMENT MEETS THE STANDARDS FOR FINAL APPROVAL 26 California ‘“[p]ublic policy generally favors the compromise of complex class action 27 litigation.’” Nordstrom Comm'n Cases, 186 Cal. App. 4th 576, 581 (2010). The Court’s analysis 28 of a settlement should be conducted in light of the favorable view of settling disputes. See 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 Stambaugh v. Superior Court, 62 Cal. App. 3d 231, 236 (1976). 2 California Rule of Court 3.769(g) states that “[b]efore final approval, the court must 3 conduct an inquiry into the fairness of the proposed settlement.” Cal. R. Ct. 3.769(g). To be 4 approved, a class action settlement must be “fair, adequate, and reasonable” and fall within the 5 “range of approval.” Dunk v. Ford Motor Co., 48 Cal. App. 4th 1794, 1801-02 (1996); Kullar v. 6 Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 133 (2008); Clark v. Am. Residential Serv. LLC, 7 175 Cal. App. 4th 785, 790, 802-03 (2009). 8 In considering whether a settlement is reasonable, the trial court should consider factors 9 including “the strength of [the] plaintiffs' case, the risk, expense, complexity and likely duration 10 of further litigation, the risk of maintaining class action status through trial, the amount offered in 11 settlement, the extent of discovery completed and the stage of the proceedings, the experience and 12 views of counsel, the presence of a governmental participant, and the reaction of the class 13 members to the proposed settlement.” In re Cellphone Termination Fee Cases, 186 Cal. App. 4th 14 1380, 1388 (2010); Dunk, 48 Cal. App. 4th at 1801. 15 A settlement is subject to the presumption of fairness “where: (1) the settlement is reached 16 through arm's-length bargaining; (2) investigation and discovery are sufficient to allow counsel 17 and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the 18 percentage of objectors is small.” Cellphone Termination, 186 Cal. App. 4th at 1389; Dunk, 48 19 Cal. App. 4th at 1802; Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 245 (2001). 20 A. The Settlement was the Result of Arms-Length Bargaining 21 This Settlement is the result of extensive and hard-fought litigation as well as negotiations 22 before highly experienced and well-respected mediators. See Steyer Decl. ¶ 5; Rottinghaus Decl. 23 ¶ 5. The parties participated in mediation before the Hon. Daniel Weinstein (Ret.), Hon. Ronald 24 Sabraw (Ret.), Gerry Kurland, Esq., and Gard Holby, Esq. Negotiating the details of the 25 Settlement was protracted and difficult, requiring many mediation sessions. Class Counsel 26 prepared for and participated in 16 mediation sessions that resulted in the settlements. Id. After 27 extensive mediation sessions, the mediators made mediators’ proposals which were subsequently 28 accepted by the Plaintiffs, Defendants, and Settling Parties. Id. 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 “The court undoubtedly should give considerable weight to the competency and integrity 2 of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement 3 represents an arm's length transaction entered without self-dealing or other potential misconduct.” 4 Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 129 (2008). 3 5 Here, there can be no dispute that the litigation has been hard-fought with aggressive and 6 capable advocacy on both sides. The Settling Parties were represented by experienced and 7 capable counsel who zealously advocated their positions. Accordingly, “[t]he settlement was 8 clearly the product of arms-length bargaining and negotiation” Nordstrom Com. Cases, 186 Cal. 9 App. 4th at 582. 10 B. The Strength of Plaintiffs’ Case and the Risk, Expense, Complexity, and Likely Duration of Further Litigation 11 Where both sides face significant uncertainty, the attendant risks favor settlement. Dunk, 12 48 Cal. App. 4th at 1801. Here, a number of defenses asserted by the Settling Parties posed 13 serious threats to the claims of the Plaintiffs and the other Class Members. If successful, those 14 defenses could eliminate or substantially reduce recovery by the Class. While Plaintiffs believe 15 that these defenses could be overcome, they present a serious risk to recovery by the Class. 16 While Plaintiffs believe that they would have likely prevailed on the nondisclosure claims 17 against the Developer Defendants and the indemnity claims against TJPA, liability is never 18 certain and was hotly contested. For example, the Developer Defendants asserted that they had 19 insufficient knowledge of the sinking and tilting to require disclosure, that the facts they failed to 20 disclose were not material, and that Plaintiffs and Settlement Class Members did not rely on the 21 nondisclosures. See RSB Vineyards, LLC v. Orsi, 15 Cal.App.5th 1089, 1097 (2017) (affirming 22 summary judgment for seller on nondisclosure claim); Assilzadeh v. California Fed. Bank, 82 23 Cal.App.4th 399, 410 (2000) (affirming summary judgment because “[t]he seller or his or her 24 25 3 The Declaration of Judge Daniel H. Weinstein (Ret.) in Support of Motion for Preliminary 26 Settlement Approval filed herewith as Exhibit 2 to the Steyer Declaration describes the mediation process in this case and sets forth the mediators’ view that the Class Settlement is fair, just, and 27 adequate. 28 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 agent must have actual knowledge in order to be liable for failing to disclose a material fact.”); 2 Pagano v. Krohn, 60 Cal.App.4th 1, 9 (1997) (affirming summary judgment because undisclosed 3 facts were not material). 4 TJPA could have potentially prevailed on Plaintiffs’ indemnity claims under the Easement 5 Agreement either by showing that Plaintiffs were not “transferees” within the meaning of the 6 Easement Agreement or that Plaintiffs’ alleged damages did not arise out of TJPA’s conduct. See 7 Leo F. Piazza Paving Co. v. Found. Constructors, Inc., 128 Cal.App.3d 583, 593 (1981) 8 (affirming summary judgment on indemnity claims where indemnity contract interpreted not to 9 apply to party seeking to enforce it). 10 Recovery of damages was by no means a foregone conclusion. Although Plaintiffs’ 11 liability case against the Defendants was strong, the recovery of the cost of repairing The 12 Millennium Tower as part of the global settlement could have arguably barred some or all of the 13 Class Members from recovery of the diminution-in-value damages they claim. Defendants’ 14 argument that Plaintiffs could not recover both diminution in value and the cost of repairs also 15 presented a serious threat to monetary recovery in this case. See Safeco Ins. Co. v. J & D 16 Painting, 17 Cal.App.4th 1199, 1202 (1993) (granting summary judgment on diminution-in-value 17 claim where the property had already been repaired). This argument was not based on any repairs 18 that have already been made by individual Settlement Class Members, but rather on the repairs to 19 the foundation of The Millennium Tower which will be made as part of the Global Settlement if 20 the Class Settlement is approved. Here, Defendants have explained that they would have argued 21 that because the Settlement Class Members will benefit from the Upgrade repairs, which will 22 ameliorate the sinking and tilting of The Millennium Tower, the Settlement Class Members 23 cannot also recover diminution-in-value damages based on the sinking and tilting. 24 As the court held in 7-Eleven Owners for Fair Franchising v. Southland Corp., 85 25 Cal.App.4th 1135, 1152 (2000) in affirming settlement approval: “Trial itself would have been 26 lengthy and complex. And…the risks of maintaining class action status and pursuing judgment 27 through trial would have been large.” Id. at 1152. Here too, a trial would have been lengthy, 28 complex, and risky with appeal likely regardless of the result. See Glass v. UBS Fin. Servs., Inc., 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 No. C-06-4068 MMC, 2007 WL 221862, *4 (N.D. Cal. Jan. 26, 2007), aff'd, 331 F. App'x 452 2 (9th Cir. 2009) (“Regardless of how this Court might have ruled on the merits of the legal issues, 3 the losing party likely would have appealed, and the parties would have faced the expense and 4 uncertainty of litigating an appeal. ‘The expense and possible duration of the litigation should be 5 considered in evaluating the reasonableness of [a] settlement.’”) 6 Although Plaintiffs were confident that they could prevail at trial, there was no way to 7 guarantee this outcome. Even if Plaintiffs had prevailed at trial, Defendants would have 8 undoubtedly appealed, leading to further expense, delay, and uncertainty. Thus, the further 9 adjudication of this case carried significant risks to Plaintiffs and the Class Members. 10 The proposed Settlement eliminates this possibility that Class Members might not recover 11 anything at all and is justified by the risk, expense, and uncertainty of further litigation. 12 C. The Risk of Maintaining Class Action Status Through Trial 13 A very serious threat the Settlement Class Members faced was the possibility that class 14 certification would have been denied, in which case the absent Settlement Class Members would 15 have recovered nothing. This is a factor that has been consistently recognized by the courts as 16 supporting settlement approval. See e.g., Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles, 17 186 Cal. App. 4th 399, 406 (2010) (affirming approval of class action settlement prior to class 18 certification where settlement amount reflected “significant risk that there would be no 19 certification.”); Kullar, 168 Cal. App. 4th at 128 (“the risk of maintaining class action status 20 through trial.”); Solis v Bottomley Distribution Co., Inc., No. 15-CV-287797, 2017 WL 1046615, 21 at *2 (Cal. Super. Mar. 03, 2017) (granting preliminary approval where “settlement at this stage 22 of the litigation eliminates the risk that the case will not be certified.”). 23 Defendants would have challenged superiority because the Class was seeking significant 24 awards. See Basurco v. 21st Century Ins. Co., 108 Cal. App. 4th 110, 120–21 (2003). Moreover, 25 more than 200 individuals and entities filed their own suits in this Court, showing that individual 26 litigation was viable. 27 While individual issues regarding damages does not necessarily prevent certification, 28 damages to individual property have been found to make class actions unmanageable and defeat 13 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL SETTLEMENT APPROVAL 1783703.1 - MILLENNIUM.TOWER 1 predominance. In City of San Jose v. Superior Court, 12 Cal.3d 447, 460–462 (1974), the Court 2 reversed class certification based on individual issues regarding damage to real property. In 3 Basurco, the court affirmed denial of class certification on the same basis. 108 Cal.App.4th at 4 119-120. 5 The proposed settlement eliminates the risk that the class would not have been certified or