so it looks like we have a number of lawyers here representing the objector appellants and it's been communicated to me that each and so you want to also reserve within your five minutes rebuttal time can somebody come here whoever is going to start please come forward i just question whether that the best use of your time but it's up to you minute is that true for everybody i can't speak for everybody i want to know up front right now because i'm just trying to figure out how much of a yes i mean revolving door we're going to have here today  palin's brief where they say that the arbitration clause here is materially identical across the class and that's not true because there's a subclass of persons who did not have any contractual relationship with wells fargo such as children or the ward mr geyser brock who are class members but clearly couldn't be bound by the  appears from the limited discovery that was done in this matter that there was no discovery with regard to the issue of the number of people or the percentage of the millions of people  affected who had no contractual relationship with wells fargo and therefore with not be bound by any arbitration agreement i think that there's no argument that arbitration is a contractual remedy and if there's no briefs but those only involves state causes of action so i'm trying to figure out how does that help you were wrong because what we're really looking at here is whether the obligations under twenty three eat to with regard to of fairness reasonable as an act with c are met by a settlement which doesn't deal with the subclass of people who remedies are not restricted by the arbitration agreement that the district court found would prevent the entire class from moving forward that there was a federal claim that's correct so why doesn't that make a difference it doesn't make a difference because the the arbitration defense is not available against people who have no contractual a ship with wells fargo so the you have looking at the cases as it develops cases filed among the issues for the district court is the issue of arbitration the district court finds that the issue of arbitration is not an issue that can even be dealt with by the district court an arbitrator us to decide whether or not these are are our principle all issues under the arbitration language it goes on appeal to this court wallace on appeal in this court the mediator for the circuit contacts the parties and then wells fargo's attorneys do a fine are only great job they've done an analysis that shows that although there may be a small percentage of chance that the plaintiffs appellants will win in the th circuit on the issue arbitration there's still some chance that the wells fargo defendant apple e's lose on that issue so did you presented choice of law analysis to the district court i did not do you want to reserve the balance of your time i do ok have objector opponent scott johnson in our brief we set forth over ten reasons why certification should be precluded and each of these individually would be sufficient for this court to overrule and remand this classification however when we look at the do it how do circumstances surrounding both negotiations settlement agreements and certifications of this class it becomes clear that this class sort of a case must be remanded first the district court failed to take into consideration major case developments one of those was the arbitration agreement which is arbitration agreement between the parties and wells fargo was a foundational principle and a key determination in the settlement and that was mentioned in many of the briefs this arbitration agreement was waived by the c e o of wells fargo thames on october rd two thousand and seventeen or before congress he said wells fargo has not we are not and we will not use force arbitration for any of these fraudulent accounts and this was a this was not taken into consideration or applied to the settlement further in the mitchell v wells fargo case in utah one which my firm was involved in we we saw that wells fargo waived that arbitration provision second arbitration  counsel has mentioned who are minors or i haven't agreed to that arbitration agreement as it applies to project on accounts of the nd major case development that wasn't taken into consideration is the amount of people involved in the settlement and the dilution of the settlement per class member wasn't taken into consideration in march about forty dollars per account and this really underscores another issue that we have is the need for subclasses and separate representation and made of the opposing  parties have done a clever way of opening a back in a blank check for most fargo but during this process all of these subclasses needed to be represented and they all needed to make sure that somebody was fighting to prevent them from having their share diluted from newcomers or from the old people and i would like to reserve the balance of my time thank but in our bluetooth it has to be done in such a managed to achieve a reasonable result as mr pence will discuss the four points of the multiplier is not a reasonable result under the circumstances of this case but this court the courts or the or in this case doesn't even mention the four dollars multiplier at all and our position is that's not consistent with the i do she of occasions to the class saying that a lodestar cross check is required believe that's i don't think that is the current state of the law i do believe that a lot of lodestar cross check should be required in this case there's no no that's not required then how could it be used to district judge's discretion to not mention beyond the percentage and to consider the hours reasonably expended and the case and that would be the bluetooth opinion and washington public power and we have several circumstances several red flags that should have called the court's attention to the to the lodestar particularly when it was right before we have a it's the material before the court evidence a four point seven multiplier in the court failed to engage it and those factors include  the very brief nature of the litigation no formal discovery and a settlement that came directly on the heels of a settlement involving governmental actors so it's it's our position that this case falls under the special circumstances exception in washington public power in bluetooth it's not enough to say that these are below the twenty five percent benchmark is as a consequence will have so it must be a reasonable ward the washington public power opinion rejected that same argument when the attorney said a thirteen percent fee was reasonable because because it was also under the benchmark as a court said in washington public power there's a danger in selecting percentages in the ass in the abstract without reference to labor and it should be noted that the fifteen percent the here came from class counsel wasn't something that the court arrived at through its own analysis let me address the fischel opinion cited by class council which they suggest stands for the proposition that it's ok to disregard lodestar and cross checked to be clear the court has never said it's free to different courts are free to disregard across check and fishel does not support that proposition fishel is class counsel complaining they didn't pay enough they didn't get paid enough under the lodestar method not the percentage miss that that there is no concern as there is here that too much was being taken from the class and light of the actual labor of council money lastly address the fore the fact that the four points of the multiplier shouldn't be watered down with future work the class council anticipated the supreme court in hensley discusses lodestar as reasonable hours expended it doesn't say hours that they are likely to expand no circuit disarming the class this class counsel was just as disarmed as class counsel wasn't hyundai and in fact on page forty eight of their brief class counsel admit that being disarmed was a problem in one day and tried to distinguish this case from that one on that basis but there was no difference because class council had no chance of winning their appeal this court i think lam's plus shows that there was no opening any more for arguing that the f a a is not  does not enforce arbitration agreements in all cases class counsel was simply the fortunate beneficiary of wells fargo's decision to settle and put all of its problems behind it when it decided to settle with the city of los angeles and the consumer financial protection bureau i think it's very clear based on the timing of when these things occurred that wells fargo use this case to distribute the compensation to the class members or their injured customers and and wanted to extend the class period to get a bigger release class counsel states on page thirty two of their brief that the district court abuses its discretion when findings are illogical well this is this is such a case it's true that risk in a class action cases in general is to be assessed at the time of the filing of the complaint but it is also equally true that settlement eliminates risk and that's been all recognized by many court hundred future hours that have not been occurred or may not been to be occurred there are no risk i mean they're guaranteed to be paid but they want those hours to also believe multiplied by three so in other words they anticipate one  mr couper argued sure but didn't the district court ultimately do a percentage yes it did and instead of the benchmark percentage of twenty five percent the district court did fifteen percent percentage without looking at the factors which include the lodestar and the quick settlement here in fact i don't i don't speak he had he had to look at a lot of things including everything that had been submitted across the board i'm just  confirmatory discovery lodestar and here you know we're applying a multiplier of three to post settlement time in the future so the class council will be paid four and a half one million dollars for one and a half one million dollars of lodestar i mean if that is the new rule then i think all california lawyers are going to start tripling their bills before they send them their non contingent client site the post sort of and here post settlement lodestar here is no different from the co atory discovery lodestar the judge i could have questioned in one day because this case settled so quickly after it was filed and was dismissed four months after it was filed on the based on the arbitration clause something class council had to anticipate it was in mediation for another year and then it settled the certainly the lodestar that was incurred prior to settlement should be mult increased by a multiplier but everything after that really shouldn't and that should lead to a much lower percentage thank you thank you your hon good morning you are ours there closure for the settlement class again i'd like to start very briefly with just what the settlement achieved i understand that the objectors have a variety of things that they thought should have gone differently judge did carefully review this settlement and did and did so rigorously there are things about the settlement a number of things that are exceptional this is a non reversionary one hundred and forty two million dollars settlement that makes class members more than a whole that's exceedingly rare in the world of class action settlements it was something in the box wagging case where the court noted that the fact that was make whole relief well this is make whole relief as well i think it's also exceptional that all the risk of uncertainty is shifted to wells fargo here this is something that's very rare in a class action settlement we did not happened nobody had perfect knowledge in this case about the number of unauthorised accounts that's just the nature of the problem here and so in order to solve that problem we negotiated a path that shifts all of the risk of uncertainty to wells fargo it's simply not true that anyone's claims were deluded that anything was diluted it has a uncapped guarantee so if our estimates of the class size were off wells fargo has to put in more money i think it's also worth noting that there's a very small number of objectors here there were twenty nine dollars total only five of which have appealed and that's not because the class didn't know about this settlement there were over two hundred million emails email notices sent out to people millions of direct mail notices this was widely widely noticed that the district court judge referred to it as robust and extensive notice and there was a reason for that we wanted to make sure that everybody who could potentially have been impacted learned about the settlement so they could submit a claim and that in fact of the claims themselves have been robust as of the latest count the deadline was back in july seven hundred and thirty thousand people have submitted claims in this case this case has none of the red this court has identified class council is not seeking a disproportionate amount of the common fund there is no clear sailing provision on the on fees and none of the settlement can revert to the sentence this settlement took hard devoted work of class counsel and the result is in fact exceptional and i want to go back to the the standard here it's an abuse of discretion standard and judge char be a took that very very seriously he reviewed the settlement closely this court has said that when deciding whether a settlement is fair or deciding whether settlements fair is ultimately an amalgam of delicate balancing gross approximation and rough justice best left to the district judge who has or can develop a st hand grasp of the claims the class the evidence in the course of the proceedings the whole just salt of the case here judge certainly demonstrated a st hand grasp of the whole stall of the case anyone who has been before the district court judge on class settlements knows how careful he is to pay attention to every term and he in fact had multiple hearings both a preliminary hearing a final hearing and multiple status converses in between required extensive briefing including written questions on a before preliminary approval and then throughout the process between preliminary and final approval hearings in which his questions could be addressed and which objectors could be heard and which he could evaluate whether the settlement was fair just i'll try and summarize quickly the arguments some of the arguments that you've heard from the are brand new and obviously have been waived the arbitration argument that mr pence made has never been made before but i would like to talk why don't we focus a few don't mind at least initially on the ones that were made here today and that's i think  challenging the predominance because of the different state laws that may have applied here and then the attorneys write the predominance question your honor kind of hit the nail on the head this case the central feature of this case the core claim is a federal claim it's that's the claim for which the most damages were available it provided the potential for punitive damages it provided the potential for attorney's fees and it was the most viable path to placer cation is the center of the case that's not the issue and  t is a case involving a national class action based upon state laws now the fact the matter is the objectors relied on an opinion that was withdrawn and in the on bank decision you know everything about that decision is is clearly a political here as well this is there's no trial manageability concerns here because there was a settlement this is a consumer fraud case and there were there was no as counsel admitted there was no conflict analysis at all so the one hundred i buy and bank decision clearly applies but beyond that it's a completely different circumstance it's a federal claim maza is not a political here because we're dealing with a unifying federal cause of action is there any is authority though that says that even when there's a federal claim a district courts not required to conduct a choice of law analysis for state claims the question it's not simply that there is a claim it's that there is a federal claim that is the the core feature of the case so there is authority that one of the objectors cites the nexus case i believe in which the choice of law analysis was necessary where there was a federal claim but was a it was a magnuson mosse warranty case in which the federal law was based upon state law so there it was relevant to conduct stale analysis it's just not relevant here and for that reason the objectors can't find support in the one hundred i dissent either because they're the dissent was faulting the district court for not conducting a a choice of law analysis among the fifty states but again that was a class that sought to certify a state law claims across fifty states and that's just not not what we have  here the federal claim in this case provides a path to certification which as judged noted when he evaluated this exact issue the state law came claims that they point to have a host of class sort of a case in problems in the in the th circuit the court when addressing a similar argument that objectors made here about you know we did something wrong we're not adequate because we didn't we didn't pursue state claims the court noted why they should have an obligation to find some way to defeat class treatment is a mystery it is best to bypass marginal theories if their presence would spoil the use of the aggregation device than on a whole is favorable to holders of small claims so that's exactly the circumstance here there is neither before your time so here as the court noted the district court has the option of choosing a lodestar method or a percentage method here the district court judge that shows the percentage method and it didn't willy nilly just pick a fee and didn't do any analysis the court analyzed the visit kaino factors applied them and based upon the circumstances of the case determined that the fee we sought was appropriate that's exactly what this court instructs the district court to do nor is it the case that the court wouldn't be applied the benchmark the fact the matter is he applied a percentage that is ten percent below the benchmark the court obviously took into account the circumstances of this case including the size of the settlement and w evaluating the fee he noted the factors that support the fee including reference to studies that indicated that the feed was below the median for settlements of this size and the council not the multiplier should should not that the multiplier should not have included future work there was two thousand five hundred hours of future work can you please address that sure i'll address that and also the notion that we're seeking a four seven multiplier which is just frankly wrong  information was all presented to the district court at final approval and as i noted he chose the percentage method not the lodestar method but he had all the information which the northern the district court requires anyway and the loads are actually three dollars at the time of final approval future ours is it's routine to include future hours when a court is conducting a lodestar cross check the purpose of a lodestar cross checked when it's performed is to determine whether there's been a windfall in order to determine whether there's a windfall you as obviously have to consider all of the hours that will be required by the case that includes the extensive amount of work that needs to be done following preliminary or final approval itself so we  estimate it was a reasonable estimate the court evaluated that we submitted in our briefs what our estimate was it was fully explained to the court and you know it's if you're going to do a lodestar cross check you do need to consider all of the work and here we proposed it would be two thousand five hundred hours we explain why one of the reasons why that amount of time was necessary was designing and implementing the credit impact damage model which requires working with wells fargo the three credit reporting agencies among others the credit expert was extremely time consuming extremely important important we knew it was going to take a significant amount of time the fact the matter is we told the court it was a conserve ask them and it was as of our last update to the court we have actually build then and it's even more wrong now that you were nearly five minutes for the yes thank you for reminding me let's find you four minutes and forty five seconds oh i'm sorry absent at i used to give you so i'm sorry you have five more minutes i'm sorry i thought it was twenty minutes so somehow an important time which has been likened to confirmatory discovery which frankly can be important here as we explain to the district court the time that we needed to spend was exceedingly important to the resolution that occurred here for one there was  ongoing complex difficult negotiations that went right up until final approval and then the process of designing and implementing implementing this credit damaged model is extremely important for the settlement extremely time consuming and results  something that we think is it is extraordinary every class member who checks the box on the claim form indicating that happen that they have credit damage will then have an analysis of years of their credit history to figure out what impact on their credit score wells fargo's conduct had any but for credit score is calculated which is then applied to up to seven years of their borrowing before and after each of these unauthorized accounts to determine a dollar figure for that person that for some people will be thousands of dollars and for some people less depending on how much they've borrowed that is an extraordinary feature of the settlement it's innovative as the district court noted we're not aware of it ever being done before and it's one of the reasons why the settlement is exceptional and the work that we did here is exceptional and i think it'll serve as a model going forward in cases like this where there's been credit damage not true we structured this settlement to take into account the fact that the actual number of unauthorised accounts is something that is hard to identify and we shifted the risk to wells fargo so that our estimate which initially was three million five hundred thousand if in fact there were many more claims than that with many more accounts wells fargo would simply have to put in more money if all of the compensatory damage calculations used up the fund we also prevented dilution of the twenty five million dollars reserve by having that reserve adjust if in fact our estimates were low and there were more the reserve would have to adjust precisely so there was no dilution we also were very careful in structuring the settlement to prevent any situation where one class members claim would reduce another class members claim and that preventing any kind of zero sum game that that was apparent in the literary literary works case from  the nd circuit where you have different pools of claims and some can take money from others harming people that cannot happen under this settlement as far as the different there are different pools that have to do with the time periods that were referenced the initial settlement was one hundred and ten million dollars when based on information that was became public it became clear that wells fargo's conduct started earlier we created a nd pool we protected the recovery for the st pool we negotiated for the nd pool there's no possibility that  hearings when these objections were made and in his orders that he didn't think that wells fargo we didn't think it likely that they would be able to prevail on their class arbitration argument or their arbitration clause argument anyway so it's simply not true to say that somehow  court found that the arbitration clause was the reason why this was a good settlement that is not what the court did he recognized the possibility that we would get over the arbitration clause and frankly the results show that in negotiating the settlement  not prevent us from achieving outstanding results for the club thank you thank you and i apologize for the time mix them i don't right may please the court ben for which on behalf of the wells fargo judgment i might try to answer your question about is there authority with respect to choice of law when there's a federal claim and i don't know of a case but the reason it wouldn't exist is because of of course federal law we know for certain applies to everyone so it's not a situation as in one day where you might have a question while this california law apply or does virginia law apply and it's an either or so the real question from the from the point of view of the state law claims is what do they add by asserting them and as mr logar pointed out it's can be a mystery why you would assert claims that would tend to defeat class certification as opposed to improve it so there's actually a very practical point here which just recognize which is that you're not going to see more recovery under a law that provides you relative to a law like figure out where there's already in the settlement compensatory damages there's already a non compensatory component there's a non monetary kind of remedial efforts in the settlement and so the the question is why would you go trying to add other state law claims on top like what's the practical way forward for the class doing that  there's not been an answer that judge chabria couldn't didn't hear an answer from the objectors in that and in this court they haven't offered that and i think that's that's actually emblematic of all of the objections here and just how to recognize this repeatedly is that the objections but they don't actually point to a different or better way forward for the class or point to something that would change what you would see in this settlement and so i encourage encourage the court to look at judge has questions in that think the we recently granted the objectors request for judicial notice of consent order showing that certain wells fargo executives had to pay several one million i think was fifty eight million in civil penalties objectors claim that this shows that the one hundred and fifty two million settlement was too low and i guess i wanted to hear from you to see what your thoughts and whether those penalties are relevant to our analysis here i think you are it's a good question so i would say a couple things about those documents the st thing is that in terms of the the facts in those c's consent order with the bank through the c f p b s consent order with the bank through the report of the independent directors and so all of the facts that were on the table then and all of those things i just mentioned happened before plaintiffs even move for  are essentially reiterated in these documents so in some sense i think it actually tells us that the settlement was negotiated in light of all the information that would be relevant to it so in some ways i think it confirms the point that the settlement is sort of soundly negotiated with respect to the size of the penalties something that something the court should i think be cognizant of is that there are a number of different ways that these bad events have harmed different people in different ways and we're here talking about just one piece of that which is the people you know in whose names on authorized accounts were opened but there's there are obviously these events pose larger issues so one of those and in particular the concern of  banks safety and soundness so the o c c is concerned not just with individual customers of the bank but with such as the members of the class here but with anyone who does business with the bank and the soundness of the bank's operations and in fact the general national confidence in the banking system and the safe and sound practices of the bank and all of us as taxpayers who are responsible for deposit insurance for example so the o c c is operating on a operating under other laws that have other considerations and so what the o c c has done is part of the is part of the picture here this class settlement is part of the picture what the consumer financial protection bureau did in the fall of two thousand and sixteen as part of that picture there are references to securities actions there are references to the bank clawing back compensation there's a number of pieces of it and so i think this court should and should recognize that each of those pieces has a role to play this this settlement is a very important piece of that but it's not the only thing and so i think the court should look at it kind of cumulatively in that way in that way does that help your honor with that topic but yes i want to hear from from you know regarding the relevancy of that ok i see my time is expired if the court has other questions i'm happy to answer them let me just ask  notice of the fifty eight million dollars because we think it is entirely appropriate for the court to consider the balance between what's a handful of employees were fined by the federal government with regard to this behavior and what a one dollar trillion dollar company is paying for the same behavior to the class members triple fifty eight million dollars in your past what's being paid by a whole lot this is a case that was driven by the arbitration clause that was settled at five percent of the two billion four hundred million dollars worth of value that this case had to the class members under the federal law  looking at state law whatsoever the settlement runs into in or to the fire board issue which i was trying to point out earlier that is the name plaintiffs in this case i have truck show relationships with wells fargo and to the extent that the arbitration issue is relevant to the settlement there is certainly the people who have an arbitration agreement with wells fargo that my client has christiansen's client they do not have this relationship they belong to a subclass of people who do not have a contractual relationship with wells fargo therefore their interests are entirely different and separate and were valuable then class council clients who have to deal with the arbitration issue it's one thing for the judge to say he's not sure whether or not in the long one arbitration is going to drive the cart it's another thing for the judge to let the case go to you all in the th circuit on the issue of whether arbitration is going to prevent a class action and then while it sits here without being briefed on the new thing happening the case for a tiny percentage of the potential damages thank you the state all claims is they are ten thousand dollars in some states under figure we have one hundred dollars to one thousand dollars which if we do the math would be three hundred and fifty million dollars to three billion five hundred million dollars for an admitted wrongdoing by wells fargo and they're paying more money to the stockholders by two dollars and a half times than they are to the victims that they exploited further there was no notice in this case which is a constitutional requirement to my client's children and we would just request that this go back to be remanded to the district court to prevent a company that's too big to fail too from trampling over honors this court recognizes the district court abuses its discretion if it fails to address meritorious objections the objection that a four point seven multiplier is excessive should have been addressed and of course fielder but it was not the court didn't offer any that concludes our docket for this morning thank you all