most to holyoke from the center for class action fairness on behalf of the objector collins mark alan paul your honour's this settlement must be reversed based on the recent rulings in the seventh circuit and redmond v radio shack which is at seven sixty eight  district court must consider the allocation of fairness and that is the division of the settlement between class counsel and the class members but isn't there a real distinction between redmond and you banks would you also rely on because the class members in those cases were not being made bold by the coupons provided for in class in this case they are being made they're getting their drink coupons oh i would i think there's two responses to that the first response factually they are not made whole this case it was about expiration dates so the class numbers they bought a plane ticket and with that came a coupon without an expiration date southwest opt honoring those and so the class action  in response to the settlement the class members receive a coupon with an expiration date i think there's no question that a coupon with an expiration without one is much more valuable than a coupon with an expiration date particularly when as here you have to buy an airline ticket to there was a million dollars going to the attorneys the court there said ok this relief is probably adequate right but and so we don't need to increase the value of the total size of this but we need to look at the proportion and here we're not challenging that there the here we're not arguing that the coupons that was not an adequate relief but you need to look at the settlement the whole what is the class council getting what are the class members getting the class council cannot be the ultimate beneficiaries of this of this action but i think this goes to your second point let's assume that they received exactly what they got and in this settlement even though it was four point five million really should have settled for two million they overpaid for it why should the attorney s get the windfall that makes no sense that should be allocated proportionally let's assume that there was a windfall the cost council should not get that it should be divided fairly among the class members and class council and here it was not but the bigger problem here is the district court never even considered the allocation of fairness instead the court said this is adequate coupon for a coupon and a story but that's we know that in from redmond but that's not enough well actually we don't and i was you know i was on both the redmen and pearson panels and i frankly agree with much of the general principles that are set forth in your your brief which make an awful lot of sense in class settlements where the class gets peanuts and class counsel walk away with millions you all have made a business out of challenging such settlements but here the decisive factor for the district court seems to have been that as judge williams pointed out that this class basically got all it possibly could have expected to get out of a lawsuit and so i'm wondering why that very very very unusual circumstance at least in my experience last settlements doesn't kind of indicate a limiting principle a very practical limit a sorts of poll because this relief doesn't get doesn't happen for free well i think again i a dispute that they got everything out of it that i mean by the difference the difference between a coupon good for a year and one that might be good indefinitely but the airline says is coupons i'm asking for a declaratory judgment that you honor these coupons they ask for cash and that was under state decision sooner or deceptive practices act right and they also argued for contractual and this is pretty trivial stuff but they brought consumer fraud claims under state statutes and i guess i've not sure that really solves your problem there because first of all if those claims are treated as viable at all then there are fee shifting statutes that apply and that puts this clearly into the realm of lodestar feel wards which you don't like in this case and into the realm of feel words that can greatly exceed the relief award on the other hand if we say as perhaps those claims were nonstarters to begin with because of the airline deregulation act preemption applies to them we shouldn't pay any attention to them at all so i don't see how those points help well i think there's a big distinction here i think i do think redmond is appropriate here because i think what we're concerned about is ok you had an out of pocket l right you have we're having a contract claim you have an out of pocket loss from that and you're being completely compensate and that's what the argument here as well in redmond there was no no damages whatsoever it was a statutory claim correct and they received a ten dollar coupon in that it doesn't really make a different claims on the order of one hundred to a thousand dollars per person from a company that was on the edge of an instance going into bankruptcy short and again that goes to accuracy and the same it's similar here i'm not arguing that that five dollar coupon was not enough and i didn't argue that below but if you're looking at the coupons let's put that the council is getting you have to divide that fairly there's no reason for the class council to be the primary beneficiaries of this this holy spirit injunctive aspect to the settlement there was your honor does that and that was what the promise never to do it again ye should serve as providing value for the settlement to sue for their fear request i think also if you look at that injunctive relief it provides perspective relief to future customers and i understand people we know that that's not a real relief to members who've been injured for their past injuries now this moment in terms of the drinking voucher tickets when they got their new vouchers not only were they good for one year but they were fully council but using at lord star methodology the district court reduced to one point three million correct i just don't understand why this district courts you spoke that methodology was not appropriate well i think that the larger problem here is with that separate f agreement and here i think pearson is instructive their class council said yes we have this separate from the goshen action so it's a benefit to the class and the seventh circuit said no that's not realistic because a defendant is a rational economic actor and when they're making these decisions they consider the bottom line and to the reversion the seventh circuit said there should be a strong presumption against its validity and there the seventh circuit panel said they could find quote no justification because quote for such a class the same structure is here and we would say that the clear sailing plus their version should be percent and fair because if you think about it class council are the few do sherry's of this class they should not agree to a settlement structure where defendants throw in three million on the table if they just recorded said pay that three million they would have had to put in that on the table and then allowing the structure where the where if there is a lower fee that southwest gets to take that money they should be fighting for the class and for the fact that if that money if there is a lower fee that money should go to the class you have any objection to the claims process in the settlement no i do not your honor looks about as easy as one can imagine you know but you yes i don't have an objection to that but you have to think of the claims process y ed what we had expected approximate eight percent we had generously assumed there would be ten percent which was resulted in what we value at one point five million pounds compared to the three million of agreed fees that's twice right in red men no i'm sorry i apologize in pearson there was eight hundred thousand in claims and a four point five million they call that absurd that there's no reason why where you have a one point five million coupons here and three million in feet agreed fees twice as much they're going to twice as much with the class actually seems but the bigger problem is that the district court made no attempt to even determine what the class actually given given that we are seeing a settlement the essentially yours class members complete relief at least we're very close to it do you see any remedy for the conflict of interest short of vacating the entire settlement agreement here i do not and that is the problem there is because we know that this relationship right now which was in place when the settlement was negotiated we have no idea how that relationship tainted the c called coupon settlement statute section seventeen twelve could you explain to me and to your theory what works subsection b does as distinct from a c b describes what the the process a describes that you need to have the fees calculated based on the coupons that are redeemed be explains that if you have more than coupons the process is that you have to have you can have lodestar for that portion that are not coupons she explains how does that work all together because subsection a says if you are seeking fees based on coupons and it's all coupon really you need to base it based on the amount of coupons that are actually redeemed let's say that that the attorney comes up and says i'm requesting this case we had there i'm basing this fear quest on the coupons that were provided and as as well as this injunctive relief that's provided that looks like see  how those methodology is are implemented in in a different type of settlement that the majority opinion goes through quite lengthy on how all of that must work and i think there's some some major problems with the dissent particularly she ignores completely the language  shell in both a and c when when they feel should be calculated for coupon settlements it shall be based on the amount of coupons redeemed and she ignores that completely i think what verizon does if she comes was prior to it's in ethernet nothing changes she also substitutes words that make no sense for example she changes  the word attributed to to the coupon title in section a and tells that that should be as a percentage of the fee award of the total coupons awarded language that disappears nowhere based upon the lodestar method in a class action coupon type case or must always use the common fund doctor if the coupon it must but if the fear ward is based soley on coupons then clauses are only problematic when there is good lucian and we have a district court finding here that there was absolutely no collusion in this case why should we rely on this court by i disagree that there are only problematic when there's collusion because there doesn't need to be collusion that the only we're not arguing kluge in the no collusion was argued in pearson redmond or and in your bank there was no subject of collusion no smoke filled room there what we're looking at is the objective settlement how it's valued and that's the fact that the class council were the primary beneficiaries of that is there any evidence that representative levy was in fact an adequate no we are not but the problem with when certification that might be a problem but it doesn't make a problem in solomon because we have no idea how that relationship played into the negotiations one might not have saved the other in other words coupons were taken away from people and under the settlement drink you pounds were given back to people so you can't really do much better than giving back to people in recovering for the class the very thing that was taken away from them the very thing that led to the case that was the way i viewed it when we tried to settle the case and that's the way i continue to view it today i think we got a great result i do want to clarify two quick points on that the your honor you asked about whether there was a consumer fraud claim asserted that one point the answer is yes there was in the original complaint however there was motion practice on that ultimately that count was dismissed under the a t f so there is no longer or there wasn't when the settlement was approved a live operative count for consumer fraud i just want to clarify that so there was no confusion or thought that a fish if doing analysis could apply i think that lodestar a good part of that could be that without reason it would be a loser of an appeal action lawyer no one disputes that it's not a secret he's a very well known class action where i'm a class action layer to i don't think that alone creates a conflict but more importantly if there were a conflict which is evidence of collusion or whatever else you would think that would be reflected in the settlement and as your honour's noted earlier it's not it's also something that ought to be disclosed that relationship ought to be disclosed to the class members to the district court and i'm very troubled by that well i having having one un conflicted class representative really doesn't solve the problem because with respect to each other because of the decision process to approve a settlement if we think there's a problem with a conflict of interest do you see any remedy short of vacating the settlement and remain and that would be appropriate but i understand the point with with respect however i don't accept the premise that there was a conflict i don't think to get we do i disagree with you about that i asking you if we do can you suggest any sanction or remedy that would be appropriate short of vacating the subtle yes the answer is in theory the court could find that mr leavitt is  what's the right word not barred but no longer deemed to be adequate as a class representative and would be removed that would leave one in its place why don't we what about for example removing the special payment made to him perhaps a little more and doing the same for you well i think two different points there i think that commensurate with the removal of mr levitt as a class rep this is purely you know indulging the hypothetical that we get to that point understand i think it would it would probably follow that some portion of the incentive award might need to be also taken off the table on the other hand the fact remains he did genuinely participate as the other class rep did through all aspects of the case  reps south west took mr leavitt's deposition they asked him a bunch of questions about the relationship and you know tried to make hay and see if there was an angle there ultimately they didn't do anything with it because there was no conflict and that's really what i want to emphasize here is that all this stuff about disclosure to be clear if there is a conflict and if there was actually a conflict between me as class counsel the class rep it wouldn't be there in the first place i mean this is what i do for a living so it's not a good practice in addition to being not ethical have class reps who are conflicted so i never do that if by some freak circumstance or set of circumstances i ended up in that situation and i thought there was something to disclosed it would be disclosed here i don't agree with the premise he's not just that he's a class act action lawyer i'm not trying to avoid it your honor i absolutely knowledge if that is true of mr lemon as you might have you have a much more extensive financial relationship with each other  that could obviously wash away it as is trivial the for example incentive payments or any benefits he might individual yet as a class representative in this case that all concern understood and i acknowledge yes we are co counsel in various cases that is equally true of probably one hundred if not more other people who do class action work i mean you all are class reps for each other no not that we're class reps for each other i'm  my point your honor and i understand i think i understand your point i hope i do my point is that it is probably true that there are at least a hundred other people that come to mind that i am in the class action space with where i've been to if any one of those people could never be a class rep in any class action because we all know each other and we all see each other in the same places that would effectively mean that a person like mr levitt could never hire a lawyer and bring a class action i class i'm not suggesting that we all go on saying then that that that really provides a great incentive for representing class members because not only do you get what you would be entitled to the few negotiate and get something as a class member but then you have the opportunity to get the fees to i mean i don't understand why that structure is there yet but it certainly helps to make it more lucrative to bring the class actions but my question is it not even you don't even think it provides an appearance of impropriety to be called counsel and class well i think that under the law of the seventh circuit which we all pay very close attention to europe i would say bright line rules guidelines about who class reps can be and what the relationship can be between the two probably windows is probably the most recent example i can think of where the class council's father in law was the class representative to me it's clear that that is a no go it's equally clear you can't have a blood relative you can't have your fiance i don't think it's at all clear that a lawyer who doesn't work in the same area that you do who you make even less your co counsel that's right  guy even one who's a co counsel i don't think will win you don't disclose it because i think that it's tough to get to the heart of it there was no disclosure so even if we agree with you no real conflict let's give you that no real conflict we agree cases i mean i mean that's it it was not this close i think the obligation to disclose is triggered when there's a conflict i don't think that there's an obligation to disclose a non conflict because if i'm analyzing  a year ago or two years ago i'm thinking to myself is there a problem or not is there a conflict or is there not if there is let's disclose it or not they would all if there's not a conflict one of my disclosing the existence of a non conflict so whatever no one was ever trying to hide anything judge conelly knows mr leopard he appears in court before a judge can only all the time southwest oppose mr levitt i mean there is no secret about any of this we also had a second class representative it all points and so it came out but it didn't come out during his deposition as co counsel no it absolutely did not only did that come up it hundred other things came out that were not bad but everything you ever wanted to know about mr levitt and how he knows me was in that deposition because defense lawyers do what they do they try to get to the bottom of things and if they can throw muck on the wall and you know blow something up they'll do that no disrespect that's that's their job so the idea that this was somehow some secret is just factually not correct everyone knew everything so again as far as disposition then disclosure occurred my position is that i never filed a formal disclosure as such titled notice of disclosure of whatever i'm not confident is in effect the deposition deposition then i guess it's fair to say judge gallies where i wouldn't go that far because i guess as a practical matter judge can only probably never read the dept transcript the only way he'd ever know about it is i a motion saying we're going to move to disqualify levitt which they didn't because he just held me it was the when was the class certified the class was never certified on a contested basis ok it was only those part of the settlement so i had a second class representative i mean if i thought that there was even a hint of impropriety about having mr levitt as a class rep i could have just dumped him i we had other people not only that i could have thrown a rock and gotten ten more because the class consisted of millions of people who flew fly southwest every day so i didn't need levitt i mean the reason why we didn't but it was so i just wanted you know put in the bird like one judge conelly of what troubles me that somehow district judge is not supposed to like see and we're supposed to add things up i just i just want you to know for me that's not persuasive because i don't think you can attribute that kind of knowledge to a district court yeah but i don't think they're going to put all the understood and i don't think that to be clear i don't think my position is oh there was no conflict because judge kelly judge now we should have figured it out and did figure it out my position is there is no conflict as there is no conflict and by the way for what it's worth i'm pretty sure judge can only knew everything there was no anyway but that's not the rep at all times all i had to do was just tell of it we don't need you anymore why didn't i do that it's not because i thought that i would ever be having this conversation with the court it was because i never thought a million years there was any reason why you should be kicked off so now that you had this conversation with the court let me ask you about going forward do you think that it might be prudent to disclose when you have this kind of situation in the future well i go a step further which is handedly having had this conversation regardless of what the outcome is i probably wouldn't have a class rep in the first place even involved that was even within ten thousand feet of the relationship level to have with me as a practical matter here so i don't want to ever begin to situation nor did i think i was here where i'm disclosing some conflict dread have a different class rap that didn't have a conflict in the first place so if there was an error of judgment then i apologize to the court i really didn't think there was and i'm still not sure in retrospect i can fairly be imputed with with this issue given the state of the law but i hear the court loud and clear so that sure and thank you with the indulgence of my colleagues is one of the things i want to take up with you in your brief i'm talking about the separate negotiated theory freeman we see the following  page fifteen of your brief and attorneys fee agreement negotiated after the terms of class settlement have been reached an agreement you separate from the class recovery are should be is entitle to heightened deference see e g stately against boeing three twenty seven f thirty nine thirty eight one hundred sixty four ninth circuit now quoting this is your apparent thought of where defendant inform a priest to pay the fees independently of any monetary award or if you looked at that opinion yes your honor well when i read that apparent fedak i thought that's odd seems kind of an odd way to put it on i view frankly and i looked you know how much space is between is covered by the ellipsis there in that quotation it's two full pages of text which you deleted to completely distort the meaning let me read to you what its ninth circuit actually said that the defendant inform agrees to pay the fees independently of any monetary award or injunctive relief provided to the class where you stopped and put your lips the night sir he went on to say in the agreement does not detract from the need carefully to scrutinize the feel ward ordinarily a defendant is interested only in disposing of the total claim asserted against it between the class payment in the attorney's fees is of little or no interest to the defense which should sound familiar to any reader of pearson so your ellipsis has completely distort the meaning of the citation that you provided and then the second quote it here's what you deleted a mat suppose you deleted and since the proper amount fees are often open to dispute in the parties  compromising precisely to avoid litigation the courts need not inquire into the reason will do so the fees even at the high end with precisely the same level of scrutiny as one of the amount of litigated but here there was no such inquiry at all nor is the record adequate for this is just completely dishonest citation of the fart i'm very troubled by and i'd be interested in your explanation for well i can tell you that there's nothing that i take more seriously as a lawyer or an officer of the court then the accuracy and fairness of citations in my writing i can tell you that i have made that argument with all respect because i hear the court loud and clear and i just want to give you my direct candidate response i have made this argument or cited that case for that proposition many times believing as i did in this instance that it is an actual absolutely fair characterization representation of the  e i will tell you your honor with respect why i saw things differently when the brief was written i hear what your honor saying right now and i'm i get it but i'll tell you why in answer to your restive reading of cases and then there is negotiate i mean i'm paraphrasing now but when parties negotiate a resolution if you want to argue the merits here you're not getting my point thank you well respectfully runner i i am hopefully getting your point and i take it very seriously i really don't know what else to say other than there was no intentional attempt to mislead in my my answer on the substance is that boeing stands for the proposition i think again fairly that when there is a negotiated resolution on fees the district court doesn't have to look at this in a vacuum there ought to be some deference to the negotiated resolution i mean that's really the point i have no reason to overstate anything because that generally answered my questions well if you're going to thank honour's there is the matter of whether the feel word and the claims rate ratio fits within the pearson framework i think that's probably my most important point that i wanted to address today and in my time is up in thirty seconds or less i'd like to just quickly say if i might that's ok that the the outcome here fits within pearson so we don't even need to go outside pearson i think that the almost to the number the number of drinks coupons claim is five hundred three thousand which is two point five million given that each one is worth five bucks i think that's the fees here just can at least number in the end was one point six million which is about our base lodestar a little bit more than our base lodestar under pearson the quote is proof the presumption should be attorneys fees awarded should not exceed a third or at most a half of the total amount going to class members in the council so just under that formula alone where were within the benchmark so virtually everything was holyoake said about how we're outside of pearson or violating it is just flat wrong if you actually just look at the numbers all right we have a point thank you thank you you your honor may it please the court i'm tommy wells from mayor cooper and gail in birmingham alabama i'm sure you could tell i was not from the south side of chicago when i open my mouth you can pick that up  collusion as also admitted by the objectors and made in factual findings by the district court the settlement essentially makes the class whole by replacing unlimited number of news business select drink coupons for other big business or other coupons that can be used on southwest flights just like the first group ons let me say the original coupons indeed expired on the day of the business select flight because they contained a sensually the same information as a boarding pass no one would rationally think that they could use a boarding pass for yesterday's flight on today's flight so the coupons that are being distributed are actually more bad people then the coupons that are allegedly were taken away it's that class council may have gotten too much so what are really silly is this is an objection only to the thing and an objection that if it were sustained would not give any benefit to the clients and this is because we set up intentionally the class relief as the coupons remember that in the settlement agreement we had agreed to replace all of the coupons five and seven million dollars with hindsight as i'm fond of quoting former auburn coach pat always said when someone questioned his play calling hindsight is always fifty fifty with twenty twenty hindsight i would have left the bracket and we probably wouldn't have and pete but in order to manage ris after we had agreed on the settlement which made the class whole in order to manage risk we continue to negotiate for four months to try to come to some agreement on please we alternately were able to come to an agreement that southwest would not object to a figure request of up to three million dollars but this was after the settlement agreement it was after the plymouth area proved the planetary prove the order had the bracket  notice to the class said class council is going to claim seven million dollars and things up to seventy and we disclose the bracket so this is a situation where it's not as  the objectors try to argue a single contact case they use the term allocation all fairness that's a clever samantha pl way of trying to say this is a single common fund case what they're trying to get to of course is the constructive common fund from which they might be able to get feeds but this is not a single common fund case this is not the path where if you take a slice the size of the slice means there is less remaining this is the path of the coupons and the cake of the attorney's fees if as judge can only did he took a slice of the cake it didn't affect the pa the class relief and so we submit your honour's when class relief is adequate when there is demonstrably no collusion class council has skipped so facto not sold out the clients and a separately negotiated and segregated feed is entirely appropriate do you agree with the concerns expressed in pearson where for example if we have what we was a settlement that gave the class a quarter of what the successful suit my bring and then the that the separately negotiated fee would then be a serious problem your honor there are certainly cases like that where a separately negotiated feet could be a problem i'm pretty if you're if you've done a lot of class settlements i assume and have you seen any others where the class got essentially whole relief i did not your honor this is the first that i have handled and quite frankly i think it is a tribute to my client i know one of the western group every one of these that gets used is going to be after somebody bought another ticket right as far as work the ones that weren't used then they  arguing is this is a single packets and any time you take a slice it diminishes the reminder that this is a different situation here auditors southwest agreed to class relief because some its most bad uble passengers those who paid who bought business select take it at a premium price had misconstrued the fact that those coupons could only be used on business select fire on the day of travel so some of our most important customers those who pray pay premium fires were upset our primary motivation in this settlement was to make our business select passengers happy and that is that is why we first negotiated the class really because of that was what was most important to our evaluation the case now in the go shading the class really sure we understood at some point we're going to have to deal with things i think i had a reasonable audio of what a lodestar might be because i keep my time i knew how much time i had billed to my client and so i had at least a range that i thought the lodestar might be mr slipper it was arguing for the seven million dollars at that time arguing that the relief was worth twenty nine million dollars what we agreed to four months after the class relief was agreed to was to minimize on both ends and say if he would give up his request for seven million dollars southwest would not object to three that's as simple as it was so the thieves in this case do not impact the class relief whatsoever around eight to nine hundred thousand initially there was a reconsideration judge conelly went into great detail in examining the rights that were being charged and  and modified those there was a motion to reconsider and he upped them a little bit the final award of the was one point six seven million dollars not the three million and it was based on a lodestar with a multiplier of about one point five is my recollection thank you up if i could address one final point on the class representative i think the court needs to be a way or i did personally depose adam levitt mr levitt complimented me on the thoroughness of my examination after his deposition i can assure you i looked at every conceivable conflict that he might have two things lead me not to raise the issue the first was i didn't believe the conflict that we had disclosed would cause worse because when you are for example if they had been awarded a fee in another case and they had to allocate it there would be stuff there would be money that they would be negotiating he also argued that if he wasn't allowed to use other class counsel as a class represented they would never be able to be in a class action so let me ask you did you have access to the deposition of mr wills to know and i think that is another point your honor that i'd like to make is that they say that southwest had noticed but the class members didn't and another point i'd like to make about that is that to my point that they cannot serve as class members they can still as class re presentatives that doesn't delete their ability to be a class member and to make a claim in any class action that they may be a member in but more importantly in pearson i think your honor asked me whether there was evidence of how this tainted that the negotiation in peers and they found that that conflict was a fatal flaw and there was no evidence on how it actually came to the negotiation and that's true here  thousand claims which equated to two point five million based on the five dollars face value there's two problems with that the first problem is that that the claims came in thirteen months after the fairness hearing or even longer it was after we filed our opening brief we didn't know how many claims th were the district court never considered it but more importantly in redmond v radio shack the seventh circuit looked at ten dollar coupons or eighty three thousand claims eight hundred thirty thousand face value and they said that nominal that nominal value was not  actual value going to the class and for purposes of their analysis they argued that it should be viewed more at sixty percent because things chip away at what that value is if you're going to the coupon that says ten dollars on it things that take away from that actual value if you're going to sell it you're not going to be able to sell it for ten dollars you can sell it first in ninety eight something less than that and then the expiration period also chips away here the same thing we know that o selling for three dollars dollars that's in the docket at two sixty six session but so we can attribute the market value of that and that would be one point five million but there's many things that would also chip away at that nominal value because you need to disproportionate mr wells argues that we're not really arguing twenty three fairness because we're only challenging the fees but that's not true this we are arguing the division of  by as the seventh circuit noted in pierson in redmond and that was the theory that was brought under both of those cases and the problem here is he said there's no pile here because there was a separate negotiation well that is the same exact argument that was made in pierson in redmond they had a separate fee but the class but the district court must look at all of it particularly and our theory where it there should be no version there no justification for having them for the class allowing such a structure one point six million have could have gone back to the class it's just as easy to send a coupon with a two dollars two dollar and sixty cent check even though it's likely that there are many more on the number of class numbers it would be higher than that we don't know the number of class members they reveal the number of claims which is five hundred thousand but but never reveal the number of class numbers but we do know that over two million received nothing so claiming that this is adequate and whole that is not true when i ask you some more oh sure your honor your honor redmon going directly on point to just record ared there as a matter of law because it did not even consider the division the allocation of fairness of that settlement between the class council and class numbers there it was five one