0 I FRANCIS M. GREGOR-EK (144785) FILEIP-...I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22...

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FRANCIS M. GREGOR-EK (144785)[email protected] C. MANIFOLD (182450)[email protected] R. RICKERT (190634)[email protected] C. LIVESAY (223247)[email protected] HALDENSTEIN ADLERFREEMAN & HERZ LLP

.750 B Street, Suite 2770San Diego, CA 92 101Telephone: 619/239-4599Facsimile: 619/234-4599

JEFFREY G. SMITH (133113)[email protected] IWOLF HALDENSTEIN ADLERFREENL&N & HERZ LLP270 Madison AvenueNew York, New York 100 16Telephone: 212/545-4600Facsimile: 212/545-4653

A ttorneysfor Plaintiff Christopher M. Litty

FILEIP-Superior Court of California

County of Los Angeles

OCT .112016Sherri R. Carter, Becittive Officer/Clerk

By ,U e~,~el 1eA"KJ. Deputy.Isabel Arellanes

CITICASE: BC582127

LEA/DEF#:

RECEIPT #: CCW621060041

DATE P~ID: 10111/16 03:36PAYMENT: $60.00

RECEIVED:CHECK

SUPERIOR COURT OF THE STATE OF C'-:'~""

CARD:FOR THE COUNTY OF LOS ANGELES

CHRISTOPHER M. LITTY, On Behalf ofHimself and All Others Similarly Situated,

Plaintiff,

V.

MERRILL LYNCH & CO., INC., MERRILLLYNCH, PIERCE, FENNER & SMITH, INC.,and BANK OF AMERICAN CORPORATION,

Defendants.

Case No. BC582127

P M3) 10

$60.00$0.00$0.00$0.00

PLAINTIFF'S NOTICE OF MOTIONAND UNOPPOSED MOTION FORFINAL APPROVAL OF CLASSACTION SETTLEMENT;MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORT

Date:Time:.Judge:Dept.:

November 2, 201611:00 am.Hon. William F. Highberger322

PLAINTIFF'S NOT. OF MOT. AND UNOPPOSED MOT. FOR FINAL APPROVAL OF CLASS ACTIONSETTLEMENT

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TO THE HONORABLE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF

RECORD:

PLEASE TAKE NOTICE that on November 2, 2016 at 11:00 a.m., or as soon thereafter

as counsel may be heard, in Department 322 of the above-captioned court, located at 600 South

Commonwealth Avenue, Los Angeles, California 90005, the Honorable William F. Highberger

pr6iding, Plaintiff Christopher M. Litty will, and hereby does, move this Court for entry of an

order and judgment granting final approval of the class action settlement and all agreed upon

terms therein. This Motion, unopposed by Defendants Merrill Lynch & Co., Inc., Merrill Lynch,

Pierce, Fenner & Smith, Inc., and Bank of American Corporation (collectively "Defendants"),

seeks final approval of. (1) Joint Stipulation for Class Action Settlement ("Settlement" or

"Settlement Agreement" or "JS"); (2) settlement payments to participating Class Members; (3) a

payment to the California Labor and Workforce Development Agency. ("LWDA"); (4)

costs/expenses to the claims administrator, Rust Consulting, Inc. ("Rust"); (5) final approval of

the Settlement Class; and (6) dismissal according to the terms of the Settlement. If final

approval and dismissal is granted by the Court, the existing website set up to provide class

members with notice, www.littyfareimbursementsettlement.com, will also be used to provide

class members with notice of the final judgment pursuant to California Rules of Court, rule

3.771(b).

This unopposed motion is made pursuant to California Code of Civil Procedure ("CCP")

section 382 and California Rules of Court, rule 3.760, et seq. on the grounds that the proposed

settlement is fair, reasonable, and adequate. This Motion is based upon: (1) this Notice of

Motion and Motion; (2) the concurrently filed Memorandum of Points and Authorities in

Support of Motion for Final Approval of Class Action Settlement; (3) the Unopposed Motion for

Attorneys' Fees, Costs, and Class Representative Enhancement Payment filed on August 9, 2016

("Fee Motion"); (4) the Declaration of Christopher M. Litty ("Litty Decl."); (5) the Declaration

of Betsy C. Manifold ("Manifold Decl."); (6) the Declaration of Chris Pikus on behalf of Rust

("Pikus Decl."); (7) the [Proposed] Order Granting Final Approval of Class Action Settlement;

(8) the [Proposed] Judgment; (9) the records, pleadings, and papers filed in this action; and (10)

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upon such other documentary and/or oral evidence as may be presented to the Court at the

hearing.

DATED: October 11, 2016 WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLP

By: rB

J~ 1~4 j ~r S

FRANCIS M. [email protected] C. [email protected] R. [email protected] C. [email protected] B Street, Suite 2770San Diego, CA 92 101Telephone: 619/239-4599;Facsimile: 619/234-4599

WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLPJEFFREY G. SMITH (13 3113)[email protected] Madison AvenueNew York, New York 100 16Telephone: 212/545-4600Facsimile: 212/5454653

Attorneys for Plaintiff Christopher M. Litty

-2-

PLAINTIFF'S NOT. OF MOT. AND UNOPPOSED MOT. FOR FINAL APPROVAL OF CLASS ACTION,qF.TTT.F,MF,NT

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TABLE OF CONTENTS

PAGEI. INTRODUCTION Iii. OVERVIEW OF THE LITIGATION 2Ill. SETTLEMENT TERMS 3

A. The Proposed Settlement Fully Resolves Plaintiff's Claims 3B. The Release is Narrowly Tailored to the Claims 4C. Notice and Claims Administration Completed As Ordered 5

IV. ARGUMENT 6A. All Relevant Factors Under California Law Support Final Approval 6

1 . The Relevant Factors for Final Approval 62. Plaintiff Conducted A Thorough Investigation

of the Factual and Legal Issues of this Litigation

Which Formed the Context for the Settlement Negotiations 73. Settlement Is the Result of Arm's-Length

Bargaining by Experienced Counsel 84. Weighing the Strengths of Plaintiff's Claims

Against the Risks and Expenses of Continued

Litigation Render Settlement Reasonable 95. The Settlement Class Has Responded Positively

to the Settlement I IB. The Proposed PAGA Settlement Is Reasonable 12C. The Claims Administration Expenses and Fees Are Reasonable 13D. The Settlement Class Should be Certified 13

1 . An Ascertainable Settlement Class Exists and Is Numerous 142. There is a Clear Community of Interest Here 143. A Class Action' is Superior 15

V. CONCLUSION 15

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TABLE OF AUTHORITIES

PAGE

Cases

7-Eleven Ownersfor Fair Franchising v. Southland Corp.,85 Cal. App. 4th 1135 (2000) 61

Aguiar v. Cintas Corp. N6.2,144 Cal. App. 4th 121 (2006) 10

Archer v. United Rentals, Inc.,195 Cal. App. 4th 807 (2011) 14

Badami v. Grassroots Campaigns, Inc.,No. C 07-03465 JSW, ECF No. 85,slip op. (N.D. Cal. Sept. 15, 2008) 12

Bararsani v. Coldwell Banker Residential Brokerage Co.,No. BC495767, slip op. (L.A. Super. Ct. Aug. 28, 2013) 10

Behaein v. Pizza Hut, Inc.,No. BC541415, slip op. (L.A. Super. Ct. July 15, 2015) 10

Brinker Restaurant Corp. v. Super. Ct.,53 Cal. 4th 1004 (2012) ' 9,10

Cellphone Termination Fee Cases,18 0 Cal. App. 4th I 110 (2009) 6

Ching v. Siemens Indus., Inc.,No. I I -ev-0483 8-MEJ, 2014 U.S. Dist.LEXIS 89002 (N.D. Cal. June 27,2014) 7

Cochran v. Schwan's Home Serv., Inc.,228 Cal. App. 4th 1137 (2014) 10

Contreras v. United Food Group, LLC,No. BC389253, slip op. (L.A. County Super. Ct. Aug. 31, 2009) 12

D'Amato v. Deutsche Bank,236 F.3d 78 (2d Cir. 2001) 9

Daar v. Yellow Cab Co.,67 Cal. 2d 695 (1967) 14


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Doty v. Costco Wholesale Corp.,No. CV05-3241 FMC-JWJx, ECF No. 45,slip op. (C.D. Cal. May 14, 2007) 12

Garnett v. ADT, LLC,No. 2:14-0285 1, slip op. (E.D. Cal. Jun. 27, 2016) 7

Global Minerals &Metals Corp. v. Superior Court,113 Cal. App. 4th 836 (2003) 14

Hamidi v. Service Employees Int 7 Union Local 1000,No. CV 14-319, ECF No. 53, slip op. (E.D. Cal. May 22, 2015) 10

Hammitt v. Lumber Liquidators, Inc.,19 F. Supp. 3d 989 (S.D. Cal. 2014) 11

Hopson v. Hanes Brands Inc.,No. 08-00844EDL, 2009 U.S. Dist.LEXIS 3 3 900 (N.D. Cal. Apr. 3, 2009) 13

In re Apple Computer, Inc. Derivative Litig.,No. C 06-4128 JF (HRL), 2008 U.S. Dist.LEXIS 1.08195 (N.D. Cal. Nov. 5,2008) 9

In re Atmel Corp. Derivative Litig,No. C 06-4592 JF (HRL), 2010 U.S. Dist.LEXIS 145551 (N.D. Cal. Mar. 31, 2010) 9

In re Austrian & German Bank Holocaust Litig.,80 F. Supp. 2d 164 (S.D.N.Y. Jan. 6,2000) 12

In re Autozone, Inc.,289 F.R.D. 526 (N.D. Cal. 2012)

In re Baycol Cases I & II,51 Cal. 4th 751 (2011) 1

In re Morgan Stanley Smith Barney LLC Wage and Hour Litig.,No. CV 11-3121, ECF No. 146, slip op. (E.D.N.J. Apr. 11, 2016) 11

Jaimez v. Daiohs USA, Inc.,181 Cal. App. 4th 1286 (2010) 10

Lindell v. Synthes United States,155 F. Supp. 3d 1068 (E.D. Cal. 2016) 10


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Linder v. Thrifty Oil Co.,23 Cal. 4th 429 (2000)

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Litty v Merrill Lynch & Co., Inc.No. 2:14-cv-00425-PA-PJW (C.D. Cal. 2014) 1

Luckey v. Superior Court,228 Cal. App. 4th 81 (2014) 13

Mallick v. Super. Ct.,89 Cal. App. 3d 434 (1979) 6

McGhee v. Bank of,4m.,60 Cal. App. 3d 442 (1976) 15

Morgan v. Wet Seal, Inc.,210 Cal. App. 4th 1341 (2012) 10

Mullane v. Cent. Hanover Bank & Trust Co.,339 U.S. 306 (1950) 12

Neary v. Regents of University of California,3 Cal. 4th 273 (1992) 11

Nordstrom Com. Cases186 Cal. App. 4th 576 (2010) 6,13

Restoration Hardware Wage and Hour Cases,No. JCCP4794, slip op. (L.A. Super. Ct.) 10

Richmond v. Dart Indus., Inc.,29 Cal. 3d 462 (1981) 10,14,15

Ruch v. Am. Retail Group, Inc.,No. 14-cv-05352-MEJ, slip op. 7,12

Ruch v. Am. Retail Group, Inc.,No. 14-cv-05352-MEJ, slip op. (N.D. Cal. Sept. 28, 2016) 7

Sav-on Drug Stores, Inc. v. Super. Ct.,34 Cal. 4th 319 (2004) 10,15

Schuchardt v. Law Office of Rory W. Clark,314 F.R.D. 673 (N.D. Cal. 2016) 12

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Sinohui v. CEC Entmt, Inc.,No. EDCV 14-2516, ECF No. 55,slip op. (C.D. Cal. Mar. 16, 2016) 10

Smith v. Super. Ct.,39 Cal. 4th 77 (2006) 10

Sorenson v. PetSmart, Inc.,No. 2:06-CV-02674-JAM-DAD, ECF No. 28,slip op. (E.D. Cal. Dec. 17, 2008) 12

State v. Levi Strauss & Co.,41 Cal. 3d 460 (1986) 8

Vasquez v. Superior Court,4 Cal. 3d 800 (1971) 14,15

Washington Mut. Bank; FA v. Superior Court,24 Cal. 4th 906 (2001) 14

Wershba v. Apple Computer,91 Cal. App. 4th 224 (2001) 6

StatutesBus. and Prof Code

§ 17200 3,4Labor Code§ 2698 3,4§ 2699 4§ 2802 3,4

Other Authorities

4 CONTE & NEWBERG, NEWBERG ON CLASS ACTIONS§ 11.26 (4th ed. 2002) 6,9

Rules

Code Civ. Proc.§ 128(a)(8) 11§ 382 14

Cal. R. Ct.3.769 6

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1. INTRODUCTION

Plaintiff respectfully requests that this Court grant final approval of the arm's-length

agreement by Plaintiff and Defendants to settle the claims of current and former Financial

Advisors ffAs") employed by Defendants as an FA Trainee Oob code BK025), or an FA (job

code BKO16) in California.' This non-reversionary Settlement resolves claims for unreirnbursed

business expenses and deductions from wages on behalf of the Class. On May 13, 2016, this Court

granted preliminary approval of the Settlemen? and approved distribution of the Notice of Class

Action Settlement ("Class Notice") to all Class Members. On July 22, 2016, the Court-appointed

claims administrator mailed copies of the Class Notice to all Class Members. Class Members were

given 45 days to submit Requests for Exclusion or objections to the Settlement. Now that the 45-

day period has passed, Plaintiff is pleased to report that 1,432 Class Members submitted valid

claim forms, only ten Class Members opted out (out of a Settlement Class of 2,501 members) and

not a single Class Member objected to the Settlement, resulting in a 57% claims rate. See Pikus

Decl., 1115, 16.

Plaintiff now brings this motion - unopposed by Defendants (collectively with Plaintiff, the

"Parties") - for final approval. The basic terms of the Settlement provide $2.465 million in expense

reimbursement to the Class, with no

reversion back to Defendants. An objective evaluation

confirms that the relief negotiated on the Class' behalf is fair, reasonable, and adequate. The

I The Settlement Class is defined as: "All persons in the State of California from January 17,2010 through the date that the Court enters an order granting preliminary approval of the classaction settlemeni [("Class Period")] who are or who have been employed by one or more of theDefendants as a Financial Advisor in internal job codes BKO16 and/or BK025." JS, T 1.Defendants have agreed to toll the statute of limitations based on Plaintiffs previous action in theUnited States District Court for the Central District of California, Litty v. Merrill Lynch & Co., Inc.et. al, No. 2:14-cv-00425-PA-PJW (the "Litty I Action"), based on the Unfair Competition Lawclaims subject to a four-year statute of limitations. The Settlement is limited to these two jobcodes, both of which Plaintiff held while employed by Defendants (see Verified Class ActionComplaint ("Complaint"), T 26 and Litty Decl., T 26), and does not release claims for timeemployed outside of such job codes as defined by the Settlement.2 Unless indicated otherwise, all capitalized terms used herein have the same meaning asthose defined by the Settlement Agreement.

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Settlement confers substantial benefits and was negotiated at arm's length with the helpful

guidance from David Rotman, an experienced and well-respected class action mediator. The relief

offered averages approximately $1,147 per Class Member and is impressive when viewed against

the difficulties encountered by plaintiffs pursuing wage and hour cases for expense reimbursement

(see

in ,fra). By settling now, Class Members will not have to wait (possibly years) for relief by

summary adjudication or trial, nor will they have to bear the risk of class certification being

denied, or Defendants prevailing in whole or in part by motion or trial.

Accordingly, given the Settlement's favorable terms negotiated at arm's-length and

received by Class Members with no objection, Plaintiff respectfully requests that the Court: (1)

grant final approval of the Settlement as well as the related claims administration costs/expenses;

(2) finally certify the Settlement Class; (3) enter judgment pursuant to the Settlement Agreement;

and (4) retain jurisdiction to enforce the Settlement. Settlement provides Class Members with

immediate and certain relief and avoids further litigation delays and potential appeals.

H. OVERVIEW OF THE LITIGATION

Plaintiff initially filed the Litty I Action on January 17, 2014. On May 27, 2014, the federal

court denied Defendants' motion to dismiss, upholding Plaintiff s California labor law claims, and

denying Defendants' motion to strike the collective and class allegations. ECF No. 75 at 4, 8. The

federal court twice denied an extension of the class certification filing deadline to conduct class

discovery (ECF Nos. 16, 20), then granted a short continuance on May 30, 2014 for "limited

precertification discovery" (documents produced documents by Defendants on July 3, 2014 and

one-hour depositions of three of Defendants' in-district declarants on June 26, 2014.) ECF No. 76.

On August 4, 2014, the federal court denied Plaintiffs Class and Collective Motions. ECF No.90.3 On November 10, 2014, the court granted Defendants' motion to strike the class and

collective allegations under Rules 12(f) and 23(d)(1)(D) and (E) of the Federal Rules of Civil

Procedure. ECF No. 10 1 at 2-3.

3 Plaintiff filed a petition for permission for interlocutory appeal pursuant to Federal Rule ofCivil Procedure 23(f), which the Ninth Circuit denied on November 20, 2014. ECF No. 102.

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On November 21, 2014, the Parties engaged in an all-day mediation before respected

mediator David Rotman which was unsuccessful, but Mr. Rotman continued to assist in the

Parties' arm's-length negotiations. Manifold Decl., IT 8, 11. On or about December 12, 2014, theParties agreed to a proposed Settlement to resolve all class, collective, and representative action

claims asserted on behalf of FAs and FA Trainees Oob codes BKOI 6 and BK025) arising out of the

alleged misclassification of them as "exempt" from overtime under state and federal law as well as

certain alleged violations of California labor law. Id., T 12. The parties filed a joint motion forpreliminary approval on March 10, 2015 (ECF No. 106), which the federal court denied April 27,

2015 (ECF No. 13 1). As part of the voluntary dismissal (entered on May 19, 2015 [ECF No. 135])

and to avoid the expense, time and uncertainty of an appeal in the federal action, the parties agreed

to toll the section 2802 expense claims on behalf of the Class.

This action arises from the claims alleged in Plaintiff's Verified Complaint (filed May 18,

2015) on behalf of the Class for: (1) failure to reimburse expenses in violation of California Labor

Code section 2802; (2) violation of California Business & Professions Code sections 17200, et

seq'.; and (3) civil penalties pursuant to the Labor Code "Private Attorneys General Act of 2004,"

California Labor Code section 2698, et seq. ("PAGA"). On July 17, 2015, Defendants filed their

Verified Answer to Plaintiffs Verified Complaint. The Parties exchanged and responded to each

other's initial written discovery requests and produced responsive documents. On December 17,

2015, the Parties attended a full-day mediation with Mr. Rotman. At the conclusion of that

mediation, the Parties agreed in general terms to a proposed settlement to resolve all class and

representative action claims asserted in the Verified Complaint on behalf of the FAs and FA

Trainees in job codes BKO16 and BK025.

111. SETTLEMENT TERMS

A. The Proposed Settlement Fully Resolves Plaintiff's Claims

The Parties have agreed to settle the underlying Class claims in exchange for the non-

reversionary Class Settlement Amount of $2.645 million, which includes the following:

(1) Settlement payments to Class Members;

(2) Attorneys' fees in the amount of $881,666.67 (or 33 1/3% of the Settlement Fund)

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and litigation costs and expenses of $61,601 (litigations costs actually incurred by

counsel in connection with this litigation), to Wolf Haldenstein Adler Freeman &

Herz LLP ('Tlaintiff's Counsel' );4

(3) S ettlement 'Administration Costs of $35,000, to be paid to the jointly selected

settlement administrator, Rust; 5

(4) A $18,750 payment to the California Labor and Workforce Development Agency

(LWDA) pursuant to the Labor Code Private Attorneys General Act of 2004

(PAqA); and

(5) A Class Representative Enhancement Payment of $5,000 to named Plaintiff

Ch

,

ristopher M. Litty as a fair and reasonable compensation for Plaintiffs services

on behalf of the Settlement Class and for his general release of claims, which is

considerably broader than the releases required of Class Members. Settlement

Agreement T 99.

Subject to the Court approving the requested Attorneys' Fees and Costs, Settlement

Administration Costs, the payment to the LWDA, and Class Representative Enhancement

Payment, the Net Settlement Amount of $1,642,982, will be allocated to all Class Members on a

pro-rata basis according to the number of weeks each Class Member worked during the Class

Period. Settlement Agreement T 62. Because the Class Settlement Amount is non-

reversionary, 100% of the Net Settlement Amount will be paid to all Class Members who did

not opt out of the Settlement Class. Id.

B. The Release is Narrowly Tailored to the Claims

In exchange for the Class Settlement Amount, Plaintiff and Class Members will agree to

release the Released Claims under §§ 2698, 2699, and 2802 of the Labor Code and § 17200 of the

4 In connection with the Litty I Action, Plaintiffs counsel incurred costs of $49,028, and inconnection with this action, $12,573 in costs, for a total of $61,601 in costs.5 As set forth in greater detail in Exhibit I to the Pikus Decl., the Claims Administrator'scosts exceeded their initial estimate of $29,487 due to a greater claims rate than anticipated.

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6Bus. and Prof Code. Settlement Agreement IT 20, 93. The Released Claims are set forth in the

Settlement Agreement, and in short, are expense claims that accrued while the Class Members

were employed in either the BKO16 or BK025 positions during the Class Period of January 17,

2010 through May 13, 2016. Id.

C. Notice and Claims Administration Completed As Ordered

As authorized by the Court~ Rust was engaged to provide settlement administration

services. Pikus Decl., 13. Rust's duties included: (1) printing and mailing Class Notices, (2)

calculating settlement payments (including distribution of funds and tax-reporting following final

approval), and (3) answering Class Members' questions. Id.

On or about May 19, 2016, Rust received the Class Notice prepared by Plaintiffs Counsel

and approved by Defendants' counsel and the Court. Id., T 8. The Class Notice summarized the

Settlement's principal terms, provided Class Members with an estimate of how much they would

be paid if the Settlement received final approval, and advised Class Members about how to opt out

of or object to the Settlement. Manifold Decl., T 16. Separately, counsel for Defendants provided

Rust with a mailing list (the "Class List"), which included each Class Member's full name, last

known address, Social Security Numbers, and information necessary to calculate payments. Pikus

Decl., T 9. Mailing addresses contained in the Class List were processed and updated using the

National Change of Address Database maintained by the U.S. Postal Service. Id., 10. On July

22, 2016, Rust mailed Class Notices to Class Members via First-Class U.S. mail. Id. Class

Members were given until September 6, 2016 to opt out or object to the Settlement. Id. '

Plaintiff is pleased to report that 1,432 Class Members filed valid claims, and only ten

Class Members opted out, and not a single Class Member objected to the Settlement, resulting in a757% claims rate. Pikus Decl., TT 16, 18, 20. The Class' positive response to the Settlement and

6 The Parties have also executed an Addendum to clarify an inadvertent draffing error in theSettlement paperwork which misstated in one section the relevant Released Claims. A true andcomplete executed copy of the Addendum is attached to the Manifold Declaration as Ex. B.7

The current calculations provided by Rust exclude those workweeks disputed by certainClass Members. Manifold Decl., T 41. Should the final determination impact the awards, theparties will submit a supplemental declaration to advise the Court forthwith. Id.

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favorable claims rate is due, in part, to the significant monetary relief and the ease of the claiming

process.

IV. ARGUMENT

A. All Relevant Factors Under California Law Support Final Approval

1. The Relevant Factors for Final Approval 1,

'Tublic policy generally favors the compromise of complex class action litigation."

Cellphone Termination Fee Cases, 180 Cal. App. 4th 1110, 1118 (2009) (citation and quotations

omitted), see, also, 7-Eleven Owners for Fair Franchising v. Southland Corp., 85 Cal. App. 4th

1135, 1151 (2000) ("voluntary conciliation and settlement are the preferred means of dispute

resolution. This is especially true in complex class action litigation "The proposed

settlement is not to be judged against a hypothetical or speculative measure of what might have

been achieved had plaintiffs prevailed at trial." Wershba v. Apple Computer, 91 Cal. App. 4th 224,

246 (2001). As the Wershba court emphasized, there is a strong initial presumption that the

compromise is fair and reasonable because courts. do not substitute their judgment for that of the

parties who negotiated the settlement. Id., at 245-46.

Class action settlement approval occurs in two steps: (1) a preliminary review by the trial

court, followed by (2) a subsequent (final) review after notice has been distributed to Class

Members for objection. Cal. R. Ct. 3.769. Here, preliminary approval was granted on May 13,

2016 and notice was distributed on July 22, 2016 with no objection received from Class Members.

Given this positive response, Plaintiff now seeks final approval.

"[T]he trial court has broad powers to determine whether a proposed settlement in a class

action is fair." Mallick v. Super. Ct., 89 Cal. App. 3d 434, 438 (1979). Fairness is presumed

when: (1) the settlement is reached through arm's-length bargaining, (2) investigation and

discovery are sufficient to allow counsel and the court to act intelligently, (3) counsel is

experienced in similar litigation, and (4) the percentage of objectors is low. Nordstrom Com.

Cases, 186 Cal. App. 4th 576, 581 (2010). Where the settlement terms are fair and reasonable, the

settlement is presumptively valid, subject only to objections that may be raised at a final hearing.

4 CONTE & NEWBERG, NEWBERG ON CLASS ACTIONS § 11.26 (4th ed. 2002). "Generally, unless

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the settlement is clearly inadequate, its acceptance and, approval are preferable to lengthy and

expensive litigation with uncertain results." Ching v. Siemens Indus., Inc., No. I 1-cv-04838-MEJ,

2014 U.S. Dist. LEXIS 89002, at *3 (N.D. Cal. June 27, 2014) (citations and quotations omitted).

Cases involving similar allegations for unreimbursed expenses are frequently awarded final

approval by California courts. See Manifold Decl., Ex. C (September 28, 2016 Order Granting

Final approval of Class Action Settlement, Ruch v. Am. Retail Group, Inc., No. 14-cv-05352-MEJ,

slip op. (N.D. Cal. Sept. 28, 2016) (granting final approval of settlement for 1.15 million to class

for claims including unreimbursed expenses); June 27, 2016 Order re: Motion for Final approval of

Class Action Settlement, Garnett v. ADT, LLC, No. 2:14-02851, slip op. (E.D. Cal. Jun. 27, 2016)

(same).

By granting preliminary approval, this Court has already determined that the Settlement

Agreement is fair and reasonable, subject to objections. With no objections to the Settlement, the

Court's preliminary assessment has been separately endorsed by the Settlement Class.

Accordingly, the facts and circumstances of this Settlement compel the conclusion that final

approval is warranted.

2. Plaintiff Conducted A Thorough Investigation of the Factual andLegal Issues of this Litigation Which Formed the Context for theSettlement Negotiations

Beginning shortly before the Litty I Action was filed and continuing over the next few years

and through the inception of this action, Plaintiffs Counsel conducted a thorough investigation of

the factual and legal issues of the claims. Plaintiffs Counsel's investigation entailed, among other

things, the exchange of information pursuant to formal and informal discovery, special

interrogatories, requests for admission, and requests for production of documents. In response to

this discovery, Plaintiff received among other things the following information and evidence with

which to properly evaluate the claims: (1) - Class Member demographic information (e.g.,

information bearing on the Class size); (2) handbooks and procedure manuals regarding, e.g.,

expense reimbursement and business development programs at Merrill Lynch; and (3) Class

Member employment records (including the number of weeks worked in the relevant positions by

Class Members). Using this information, Plaintiffs Counsel were able to determine (or estimate):

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(i) the types of expenses and their potential average cost, incurred by Class Members; (ii) the total

approximate number of former and current employees who worked during the Class Period; and

(iii) the total approximate number of weeks worked by all Class Members during the Class Period.

Manifold Decl., T 7. Additionally, Plaintiffs Counsel interviewed Plaintiff and conducted onlineresearch to determine the extent and frequency of Labor Code violations and to learn more about

the day-to-day circumstances giving rise to the alleged violations. Id.

Overall, Plaintiffs Counsel performed an exhaustive investigation into the claims at issue,

which included: (1) determining Plaintiffs suitability as a putative class representative through

interviews, background investigations, and analyses of his employment files and related records;

(2) evaluating all of Plaintiffs potential claims; (3) researching similar wage and hour class

actions to the claims brought, the nature of the positions, and the type of employer; (4) gathering

information about potential claims, identifying additional witnesses, and obtaining relevant

documents; (5) analyzing Defendants' labor policies and practices; (6) researching settlements in

similar cases; (7) evaluating Plaintiffs claims and estimating Defendants' liability for purposes of

settlement; (8) drafting the mediation brief; (9) participating in the mediation; and (10) finalizing

the Settlement Agreement. The document exchanges between the Parties have also allowed

Plaintiff's Counsel to appreciate the strengths and weaknesses of the claims against Defendants

and the benefits of the proposed Settlement. Manifold Decl., T 8.

By engaging in a thorough investigation and evaluation of Plaintiffs claims, Plaintiff s

Counsel can confidently opine that the Settlement, for the consideration and on the terms set forth

in the Settlement Agreement, is fair, reasonable, and adequate, and is in the best interests of Class

Members in light of all known facts and circumstances, including the risk of significant delay and

uncertainty associated with litigation, various defenses asserted by Defendants, the prospect of an

adverse judgment on liability by the jury, and potential appellate issues.

3. Settlement Is the Result of Arm's-Length Bargaining by ExperiencedCounsel

"[W]hat transpires in settlement negotiations is highly relevant to the assessment of a

propose d settlement's fairness." State v. Levi Strauss & Co., 41 Cal. 3d 460, 482 (1986). Courts

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presume the absence of fraud or collusion in the negotiation of a settlement, unless evidence to the

contrary (none exists here) is offered. See Newberg, § 11.51 (presumption of good faith).

Here, David Rotman, a respected mediator of wage and hour class actions, provided a

useful, neutral analysis of the issues and risks to both sides, which helped to manage the Parties'

expectations with their respective positions on the issues. In re Apple Computer, Inc. Derivative

Litig., No. C 06-4128 JF (HRL), 2008 U.S. Dist. LEXIS 108195 (N.D. Cal. Nov. 5, 2008)

(mediator's participation weighs considerably against any inference of a collusive settlement); In

re Atmel Corp. Derivative Litig, No. C 06-4592 JF (HRL), 2010 U.S. Dist. LEXIS 145551 (N.D.

Cal. Mar. 31, 2010) (same); DAmato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001) (a

"mediator's involvement in pre-certification settlement negotiations helps to ensure that the

proceedings were free of collusion and undue pressure."). At all times, the Parties' negotiations

were contentious, adversarial and non-collusive. Both sides are represented by experienced and

respected class action counsel. Ms. Manifold, a partner at Wolf Haldenstein Adler Freeman &

Herz LLP, is a seasoned class action attorney who regularly litigates wage and hour claims through

certification and on the merits, and has considerable experience settling wage and hour class

actions. Manifold Decl., $ 30. Defendants' counsel, McGuire Woods LLP, is a nationally

recognized defense firm with a prominent wage and hour defense practice.

4. Weighing the Strengths of Plaintiff's Claims Against the Risks andExpenses of Continued Litigation Render Settlement Reasonable

Throughout the litigation, Plaintiffs Counsel continually evaluates the Plaintiffs claims in

light of the risks of continued litigation in order to determine a reasonable range of relief versus

potential damages and risks of victory or loss at trial. Although Plaintiffs Counsel believes the

reimbursement claims are strong, significant legal and factual hurdles always exist that could

prevent the Class from obtaining any recovery. One of the strengths is that employment related

claims are amenable to class resolution, 8 especially reimbursement claims for business related

8 See Brinker Restaurant Corp. v. Super. Ct., 53 Cal. 4th 1004, 1033 (2012) ("Claimsalleging that

a uniform policy consistently applied to a group of employees is in violation of thewage and hour laws are of the sort routinely, and properly, found suitable for class treatment . . .The theory of liability that [the employer] has a uniform policy, and that that policy, measured

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expenses. See, e.g., Cochran v. Schwan's Home Serv., Inc., 228 Cal. App. 4th 1137, 1140-41

(2014); Manifold Decl., Ex. E (Sinohui v. CEC Entm't, Inc., No. EDCV 14-2516, ECF No. 55, slip

op. at 22-23 (C.D. Cal. Mar. 16, 2016) (granting class certification specifically with respect to

claims for reimbursement of employees' mobile telephones); Ex. F (Behaein v. Pizza Hut, Inc., No.

BC541415, slip op. (L.A. Super. Ct. July 15, 2015) (granting class certification of vehicle

reimbursement claim)); Ex. G (Hamidi v. Service Employees Int'l Union Local 1000, No. CV 14-

319, ECF No. 53, slip op. (E.D. Cal. May 22, 2015)); Ex. H (Bararsani v. Coldwell Banker

Residential Brokerage Co., No. BC495767, slip op. (L.A. Super. Ct. Aug. 28, 2013) (denying

demurrer as to expense reimbursement claims (among others) of real estate brokers)); Ex. I (April

28, 2016 Order granting final approval of Restoration Hardware Wage and Hour Cases, No.

JCCP4794, slip op. (L.A. Super. Ct.)); Lindell v. Synthes United States, 155 F. Supp. 3d 1068

(E.D. Cal. 2016) (denying summary judgment as to certain expense reimbursement claims).

However, in contrast, another line of cases have found that some of the very claims at issue

here for failure to reimburse expenses, were not suitable for class adjudication because they raised

too many individualized issues, particularly with respect to ascertainability and proof of damages.

See, e.g., Morgan v. Wet Seal, Inc., 210 Cal. App. 4th 1341 (2012) (upholding denial of class

certification of expense reimbursement claims where no class-wide method of proof); Hammitt v.

agamst wage order requirements, allegedly violates the law - is by its nature a common questioneminently suited for class treatment."). Litigation of wage and hour claims on class-wide bases (1)encourages the vigorous enforcement of wage laws (Smith v. Super. Ct., 39 Cal. 4th 77, 82(2006)); (2) "eliminates the possibility of repetitious litigation" (Sav-on Drug Stores, Inc. v. Super.Ct., 34 Cal. 4th 319, 340 (2004)); (3) affords small claimants a method of obtaining redress (id.);(4) "deter[s] and redress[es] alleged wrongdoing" (Jaimez v. Daiohs USA, Inc., 181 Cal. App. 4th1286, 1298 (2010) (citation and quotations omitted)); (5) "avoid[s]) windfulls to defendants"(Brinker, 53 Cal. 4th at 1054); (6) avoids "inconsistent or varying adjudications" (Aguiar v. CintasCorp. No.Z 144 Cal. App. 4th 121, 129 (2006)); and (7) alleviates the concerns of employeesabout retaliation (Jaimez 181 Cal. App. 4th at 1308). These policies are so strongly favored that6cclass certifications should not be denied [in wage and hour cases] so long as the absent classmembers' rights are adequately protected." Richmond v. Dart Industries, Inc., 29 Cal. 3d 462, 474(1981); see, also, Sav-0n, supra, 34 Cal. 4th 319 (upholding certification of an overtime classaction based on a showing that all plaintiffs' performed jobs that were highly standardized, and asa result, class members performed essentially the same tasks, most of which were non-exempt as amatter of law).

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Lumber Liquidators, Inc., 19 F. Supp. 3d 989, 1000 (S.D. Cal. 2014) (granting summary judgment

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re plaintiff chose not to submit expense reimbursement reports); In re Autozone, Inc., 289

F.R.D. 526, 547 (N.D. Cal. 2012) (denying certification of expense reimbursement subclass for

lack of common questions); In re Morgan Stanley Smith Barney LLC Wage and Hour Litig., No.

CV 11-3121, ECF No. 146, slip op. (E.D.N.J. Apr. 11, 2016) (order denying certification of an

expense reimbursement class) (Manifold Decl., Ex. J).

As the above examples illustrate, class certification is always uncertain, and the risk of

denial (as Plaintiff discovered in the federal action for his overtime claims) militates in favor of

settlement. A denial of class certification effectively forecloses continued litigation, as neither the

individual nor his or her attorney will have any incentive to proceed with an individual case when

such small claims are at stake. See In re Baycol Cases, I & 11, 51 Cal. 4th 751, 758 (2011)

(explaining that a dismissal of class claims is effectively the "death knell" of the case, despite

survival of individual claims). In other words, for cases where individual damages are relatively

small, denial of class certification results in a near-complete loss for plaintiff as well as no

recovery for the employees, who are shut out of the action.

Finally, early resolution saves time and money that would otherwise go to litigation. The

Parties' resources, as well as the Court's, would be further taxed by continued litigation, and if this

action had settled following additional litigation, the settlement amount would likely have taken

into account the additional costs incurred, and there may have been less available for Class

Members. Cost savings is one reason why California policy strongly favors early settlement. See

Neary v. Regents of University of California, 3 Cal. 4th 273, 277 (1992) (explaining the high value

placed on settlements and observing that "[s]ettlement is perhaps most efficient the earlier the

settlement comes in the litigation continuum."), superseded by Code Civ. Proc. § 128(a)(8)

(amended 1999) on other grounds. This concern also supports settlement. In summary, after

balancing the relative strengths of Plaintiffs claims and Defendants' defenses, Plaintiffs Counsel

determined that the settlement is fair and reasonable

5. The Settlement Class Has Responded Positively to the Settlement

The Class Members' response demonstrates their support for this settlement — 1,432 Class


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Members submitted valid claim forms, only ten Class Members opted out and not a single Class

Member objected to the Settlement. Pikus Decl., 1115, 18, 19. This claiming rate of 57%, is

above average for these types of settlements.9 The absence of any objectors strongly supports the

fairness, reasonableness and adequacy of the Settlement. See In re Austrian & German Bank

Holocaust Litig., 80 F. Supp. 2d 164, 175 (S.D.N.Y. Jan. 6, 2000) ("If only a small number of

objections are received, that fact can be viewed as indicative of the adequacy of the settlement.").

Here, the overwhelming approval of the Class is evident.

In addition, the average settlement payment is approximately $1,147 and the highest is

$3,968.14. Pikus Decl., T 16. This recovery significantly exceeds other wage and hour class

action settlements approved by California courts and favors final approval here as well. See, e.g.,

Manifold Decl., Ex. K (Badami v. Grassroots Campaigns, Inc., No. C 07-03465 JSW, ECF No. 85,

slip op. (N.D. Cal. Sept. 15, 2008) (average net recovery of approximately $195)); Ex. L

(Contreras v. United Food Group, LLC, No. BC3 89253, slip op. (L.A. County Super. Ct. Aug. 3 1,

2009) (average net recovery of approximately $120)); Ex. M (Doty v. Costco "olesale Corp., No.

CV05-3241 FMC-JWJx, ECF No. 45, slip op. (C.D. Cal. May 14, 2007) (average net recovery of

approximately $65)); and Ex. N (Sorenson v. PetSmart, Inc., No. 2:06-CV-02674-JAM-DAD, ECF

No. 28, slip op. (E.D. Cal. Dec. 17, 2008) (average net recovery of approximately $60)).

B. The Proposed PAGA Settlement Is Reasonable

Pursuant to the Settlement Agreement, $25,000 from the Class Settlement Amount shall be

allocated to the resolution of the PAGA claim, of which 75% ($18,750) will be paid directly to the

9 With respect to those Settlement Class Members whose Notice Packets were not delivered,due process simply requires notice be given in a manner "reasonably calculated, under all thecircumstances, to apprise interested parties of the pendency of the action and afford them anopportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S.306, 314-15, 319 (1950) ("Therefore notice reasonably certain to reach most of those interested inobjecting is likely to safeguard the interests of all, since any objections sustained would inure tothe benefit of all. We think that under such circumstances reasonable risks that notice might notactually reach every beneficiary are justifiable."). See September 28, 2016 Order Granting Finalapproval of Class Action Settlement, Ruch v. Am. Retail Group, Inc., No. 14-cv-05352-MEJ, slipop. at 9 (finding notice by U.S. Mail best notice available under circumstances) (Manifold Decl.,Ex Q; Schuchardt v. Law Offlce ofRory W. Clark, 314 F.R.D. 673, 680 .(N.D. Cal. 2016) (same).

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LWDA. JS, T 17. This result was reached after good-faith negotiation between the parties. Here,because PAGA penalties have been negotiated in good faith and "there is no indication that [the]

amount was the result of self-interest at the expense of other Class Members," such amounts are

generally considered reasonable. Hopson v. Hanes Brands Inc., No. 08-00844EDL, 2009 U.S.

Dist. LEXIS 33900, at *24 (N.D. Cal. Apr. 3, 2009); see, e.g., Nordstrom Com. Cases, 186 Cal.

App. 4th at 579 ("[T]rial court did not abuse its discretion in approving a settlement which does

not allocate any damages to the PAGA claims."). In addition, on April 21, 2016, notice was given

to the LVV`DA of this resolution of the PAGA claim as well as the allocation to be paid directly to

the LWDA. Manifold Decl., Ex. A. To date, after almost six months, no response or objection to

the resolution or allocation has been received from the LV*rDA.

C. The Claims Administration Expenses and Fees Are Reasonable

Plaintiff requests final approval of claims administration costs in the amount of $35,000.

Pikus Decl., T 20. Rust has promptly and properly distributed the Class Notice to all Class

Members and completed its duties in accordance with the settlement terms and the Court's

preliminary approval Order. See generally Pikus Decl. The costs of administering the Settlement

have risen slightly since the estimate provided to the Court in connection with the motion for

preliminary approval of the Settlement due to the higher volume of claims received. Id.

Accordingly, the $35,000 payment is fair and reasonable and should be accorded final approval

along with the rest of the Settlement terms.

D. The Settlement Class Should be Certified

This Court's May 13, 2016 Preliminary Approval Order conditionally certified the

Settlement Class. The Court should now finally certify the Settlement Class for purposes of this

Settlement. CRC, Rule 3.769 sets forth the procedure to be followed when a class action is

provisionally settled prior to class certification. Certification and settlement approval occur

simultaneously. See, also, Luckey v. Superior Court, 228 Cal. App. 4th 81, 93 (2014). There are

two requirements to certify a class: (1) the class must be ascertainable; and (2) there must be a

well-defined community of interest in the questions of law and fact involved affecting the parties

to be represented. Daar v. Yellow Cab Co., 67 Cal. 2d 695, 704 (1967). California courts apply a

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"lesser standard of scrutiny" to certification of settlement classes. Global Minerals & Metals

Corp. v. Superior Court, 113 Cal. App. 4th 836, 859 (2003). Each of the criteria for class

certification is clearly satisfied in this case.1. An Ascertainable Settlement Class Exists and Is Numerous

The Class is defined by objective characteristics and common transactional facts, i.e., all

persons who were employed by Defendants during the Class Period in the same two job codes as

Plaintiff — BKO16 (FA Trainee) and BK025 (FA). Therefore, Class Members are readily

ascertainable. Archer v. United Rentals, Inc., 195 Cal. App. 4th 807, 828 (2011). Moreover,

certification of a class is appropriate when "the parties are numerous, and it is impracticable to

bring them all before the court." CCP § 382; see also Richmond v. Dart Indus., Inc., 29 Cal. 3d

462, 470 (1981). With over 2,500 Class Members, it is impracticable to bring them all before the

Court.

2. There is a Clear Community of Interest Here

"The community of interest requirement involves three factors: '(1) predominant common

questions of law or fact; (2) class representatives with claims or defenses typical of the class; and

(3) class representatives who can adequately represent the class."' Linder v. Thrij~y Oil Co., 23

Cal. 4th 429, 43 5 (2000) (citation omitted).

The first factor means that it would be more efficient to jointly try the issues in the action,

rather than requiring "each member ... to individually litigate numerous and substantial questions

to determine his or her right to recover following the class judgment . . . ." Washington Mut.

Bank, FA v. Superior Court, 24 Cal. 4th 906, 913 (2001) (citation and quotations omitted). All

Class Members were subject to the same expense reimbursement practices raising common

questions of law and fact that predominate over any questions as to individual Class Members.

The second factor, typicality, requires that Mr. Litty's interests be similar to those of other

class members. Richmond, 29 Cal. 3d at 470-75; Vasquez v. Superior Court, 4 Cal. 3d 800, 811

(1971). Plaintiff Litty, employed by Defendants during the Class Period in both the FA Trainee

and FA position, was subject to Defendants' expense reimbursement policies, including inter alia,

incurring business expenses which Defendants did not reimburse as a policy and practice. Litty

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Decl., 18, 9. Therefore, Plaintiff, like the Class, paid for business expenses that California law

required be funded by Defendants, and is therefore entitled to reimbursement.

With respect to the third factor, Mr. Litty must adequately protect the interests of the class

with (1) no disabling conflict of interest with the Class; and (2) be represented by counsel who are

competent and experienced in the kind of litigation to be undertaken. McGhee v. Bank ofAm., 60

Cal. App. 3d 442, 450 (1976); See also Richmond, 29 Cal. 3d at 478. During the pendency of this

action (and Litty 1), Mr. Litty has clearly demonstrated his ability and his willingness to vigorously

prosecute this action through competent and experienced counsel with no possibility of a conflict

because he and Class Members seek the same thing — the reimbursement of reasonable business

expenses. Litty Decl., 113, 6, 7, 20.

3. A Class Action is Superior

The California Supreme Court has consistently recognized that class actions provide

accessible judicial review and deter unfair and illegal conduct and are therefore favored in

California. See Sav-0n Drug Stores, Inc., 34 Cal. 4th at 340; Richmond, 29 Cal. 3d at 474;

Vasquez, 4 Cal. 3d'at 807-08; Daar, 67 Cal. 2d at 715. Almost no FA here could justify the eff6rt

and expense involved in filing an individual claim for reimbursement of necessary business

expenses against Defendants, nor would any attorney take such a case, when the amount at stake

for any one individual is at the very most in the hundreds of dollars. An overwhelming majority of

the class would have no realistic means of recovery absent a class action.

V. CONCLUSION

The Parties have negotiated a fair Settlement of this expense claim that likely would not

have been brought, let alone successfully resolved, but for the effort and resolve of the Plaintiff

and his counsel. The Class Members' positive response indicates that the Settlement is fair and

reasonable. Accordingly, Plaintiff respectfully requests that this Court grant final approval of the

Settlement Agreement, certify the Settlement Class, and enter judgment.

DATED: October 11, 2016 WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLP

By: BETV C.

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MERRILL LYNCH: 23375

FRANCIS M. [email protected] C. [email protected] R. [email protected] C. [email protected] '750 B Street, Suite 2770San Diego, CA 92101Telephone: 619/239-4599;Facsimile: 619/234-4599

WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLPJEFFREY G. SMITH (13 3113)[email protected] Madison AvenueNew York, New York 10016Telephone: 212/545-4600Facsimile: 212/545-4653

Attorneysfor Plaintiff Christopher M Litty

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