Case3:06-cv-03903-TEH Document1 Filed06/22/06 Page1 of 17

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James M . Finberg (State Bar No. 114850) Kelly M. Dennody (State Bar No. 171716) Heather H . Wo ng (State Bar No. 238546) LlEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 275 Battery Street, 30th Floor San Francisco, CA 941 11-3339 Telephone: (41 5) 956- 1000 Facsimile: (415) 956-1008 email: jfinberg@lchb.com email: kderrnody@llchb.com email: hwong@lchb.com
Elizabeth A. Alexander LlEFF, CABRAS ER, HEIMANN & BERN STEIN, LLP 150 Fourth Avenue. North, Suite 1650 Nashville, TN 37219-242 3 Telephone: (615) 313-9000 Facsimile: (615) 313-9965 email : ealexander@ lchb.com

12

13 Allorneys for the Plaintiffs

Adam T. Klein Piper Hoffman Justi n M . Swartz OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor
New York, New York 10016 Telephone: (212) 245-1000
Facsimile: (212) 977-4005 email : atk@outtengolden .com
email: ph@outtengo lden.com email :jms@outtengolden.com

14

UN ITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

/"

16

SAN FRANCISCO I OAKLAND DIVISION

17

18

l ) 'A~
DAISY JAFFE, on behalf ofherseled all , / ase No.

19 others similarly situated,

20

Pla intiffs,

21

v.

22 MORGAN STANLEY DW,INC.,

23 Defendant .
24

25

CLASS ACTION COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND DAMAGES FOR VIOLATIONS OF TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, 42 U.S.C. §§ 2000e et seq. AND THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV'T CODE §§ 12940 et seq.
DEMAND FOR JURY TRIAL

26

27

28

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[ndividual and Representative Plaintiff Daisy Jaffe ("Plaintiff') on behalf of herself and

2 all others simi larly situated, alleges, upon personal knowledge as to herself and upon infonnation
3 and belief as to other matters, as follows:
4

5

NATURE OF THE CLAIM

6

I. Defendant Morgan Stanley OW. Inc. (hereinafter "MSDW" or "the

7 Company") is a retail financial services finn that discriminates against female Financial Advisors

8 on the bas is of gender with respect to business opportunities, compensation, and other terms and

9 conditions ofemploymenl in vio lation o f Title VB o f the Civil Rights Act of 1964, 42 U.S.C . §§

10 20DOe e/ seq., and the California Fair Employment and Housing Act, Cal. Gov' t Code §§ 12940

11 etseq.

12

2. The vio lations are systemic, constituting a pattern and practice that

13 pervades the corporate culture ofMSDW. They are not isolated or exceptional incidents, but

14 rather the regular and predictable result of Defendant's policies and practices. Put simply,

15 MSDW's policies and practices with regard to the di stribution of the busi ness opportunities and

16 investment accounts under its control have the effect, and have been undertaken with the pwpose,

17 of denying equal opportunities for compensation to qualified female Financial Advisors.

18

3. MSDW generally pays its Financial Advi sors (also called "FAs" or

19 "brokers") on a commiss ion basis- a percentage of the revenue generated by the investment

20 accounts assigned to the FA.

21

4. FAs acquire investment accounts through "leads" and "referrals" (e.g.,

22 when a Financial Advisor is told of a potential client, the FA contacts the potential client, and the

23 FA enroll s the potential client as a MSDW customer); by transfers from one Financial Advisor to

24 another (e.g., when another FA moves to another brokerage firm, retires or leaves the business);

25 through partnerships with other Financial Advisors, and through "walk-ins" and "call-ins" (e.g.,

26 when a potential client calls or walks into the branch and inquires about opening an account).

27

5. MSDW has implemented company-wide policies and practices for the

28 distribution of accounts, leads, referral s, partnership opportunities, walk-ins, call-ins, and other

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business opportunities that delegate substantial di scretion to MSDW' s virtually all-male Branch

2 Managers. MSDW Branch Managers have extraordinary discretion to di stribute acco unts and

3 business opportunities as they choose, allowing their gender stereotypes and the company-wide

4 culture of gender di scrimination to influence their decisions. As a result, it has been MSDW 's

5 practice for years to distribute accounts and other business opportunities to male Financial

6 Advi sors in numbers disproportionate to those distributed to s imi larly~situated female Financial

7 Advi sors.

8

6. Because Financial Advi sors obtain so many accounts through this process,

9 rather than on the FAs' own initiative, the distribution of accounts and the allocation of business

10 opportunities are substantial factors affecting the compensation ofMSDW Financial Advisors .

11

7. These di scriminatory policies and practices intentionally and systematically

12 di sadvantage female Financial Advi sors at MSDW and prevent them from fairl y competing for

13 business opportunities and higher compensation.

14

8. As troubling as these discriminatory policies and practices are, more

15 di sturbing still is the cavalier way in whi ch MSDW treats the subject of gender di scrimination

16 against its fema le Financial Advisors. While MSDW says, " We focus recruiting efforts on

17 women and provide career development programs including internal women ' s conferences led by

18 seni or women executives," these statements of inclusion are illusory in light o f MSDW's

19 exclusionary practices.

20

9. Accordingly, thi s class acti on is brought by a female Financial Advisor on

21 behalf of herself individually and al l similarly~situated female Financial Advi sors in the United

22 States against whom MSDW has di scriminated o n the basis of gender. This action seeks to end

23 MSDW 's discriminatory policies and/or practices and to make the Plaintiff class whole by

24 requesting the foll owin g remedies: injunctive relief to remedy systemic gender di scrimination at

25 MSDW ; an award of back pay and front pay; and compensatory and punitive damages.

26

JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT

27

10. Thi s Court has j urisdiction over thi s action pursuant to 28 U. S.c. § 1331 .

28

11. Venue is proper in thi s District pursuant to 28 U.S.C. § 139 1(b). Members

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of the Plaintiff class reside in California and througho ut the United States. Defendant MSDW is a

2 Delaware corporation, headquartered in New York, and licensed to do business in Cal ifornia. It

3 has branch offices throughout California and thi s District. Many of the acts complained of

4 occ urred in this State and this District and gave rise to the claims alleged.

5

12. Assignment to the San Francisco/Oakland Division of thi s Court is proper

6 because the Plaintiff resides within thi s Division and many of the acts complained of took place

7 in this Division.

8

PARTIES

9

13. Plaintiff Daisy Jaffe is a female resident of Hil lsboro, California. She was

to employed as a Financial Advisor in the San Mateo, California office ofMSDW from on or about

II August 1982 unti l August 11,2005. During the course of her employment as a Financial Adv isor

12 at MSDW , MSDW denied Ms. Jaffe business opportunities on the basis of her gender and age

13 that directly impacted her compensation. MSDW wrongfully tenninated Ms. Jaffe because she is

14 female and ove r the age of 40.

15

14. MSDW is a wholly-owned subsidiary of Morgan Stanley.

16

15. Morgan Stanley is a global financial firm that provides brokerage and

17 investment banking management services to corporations, governments and individuals around

18 the world. It maintains leading market positions in each of its business segments - Institutional

19 Securities, Retail Brokerage, Asset Management and Discover (Credit Services). Morgan Stanley

20 employs approxi mately 53,870 employees worldwide . It is a Fortune 500 company doing

21 busi ness in 30 countries and is one of the largest financial institutions in the United States. It

22 recently reported annual revenues of $52.1 billion, a net income of $4.9 billion and assets of

23 $898.5 billion. As of March 17, 2006, Morgan Stanley had a market value of$64.7 billion.

24

16. MSDW is the retail broker-dealer subsidiary o f Morgan Stanley. MSDW

25 provides comprehensive financial services to clients through a network of approximately 9,500

26 Financial Advisors with over 530 global locations , including 485 U.S. retaillocatioos. As of

27 November 30, 2005, MS DW had $61 7 billion in client assets.

28

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I

CLASS ACTION ALLEGATIONS

2

17. Plaintiff Jaffe brings this Class Acti on pursuant to Fed. R. Civ. P. 23(a),

3 (b)(2), and (b)(3) on behalf ofa Class of all female Financial Advisors employed by MSDW in

4 the United States at any time from January 5. 2005 to the prese nt. Plaintiff also brings this Class

5 Action pursuant to Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a Subclass of all female

6 Financial Advisors employed by MSDW in California at any time from November 1. 2004 to the

7 present. Plaintiff reserves the right to amend the definitions o f the Class and Subclass based on

8 discovery or legal developments.

9

18. Plaintiff is a member of the Class she seeks to represent.

10

19. The members of the Class identified herein are so nwnerous that joinder of

11 all members is impracticable. As o f the filing of this Comp laint, MSDW has approximately

12 9,500 Financial Advisors . Although the precise number of female Financial Advisors is currently

13 unknown, it is far greater than can be feasibly addressed through joinder.

14

20. There are questions of law and fact common to the Class, and these

15 questions predominate over any questions affecting only individual members. Common

16 questions include, among others: (1) whether MSDW's policies or practices discriminate against

17 female Financia l Advisors; (2) whether MSDW's policies or practi ces violate Title VII andlor the

18 California Fair Employment and Housing Act; and (3) whether equitable remedies, injunctive

19 relief, compensatory, and punitive damages for the Class are warranted.

20

21. The Represe ntative Plaintiffs claims are typical of the claims of the Class.

21

22. The Representative Plaintiff will fairly and adequately represent and

22 protect the interests of the members of the Class. Plaintiff has retained counsel competent and

23 experienced in complex class actions, employment discrimination litigation, and the intersection

24 thereof.

25

23. Class certification is appropriate pursuant to Fed. R. Civ. P. 23(b)(2)

26 because MSDW has acted and/or refused to act on grounds generally applicable to the class,

27 making appropriate declaratory and injlUlctive relief with respect to Plaintiff and the Class as a

28 whole. The Class members are entitled to injunctive relief to end MSDW's common, unifonn ,

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unfair and di scriminatory policies and practiccs.

2

24. C lass certification is also appropriate pursuant to Fed. R. C iv. P. 23(b)(3)

3 because common questions of fact and law predominate over any questi ons affecting only

4 individual members of the C lass, and because a class action is superi or to other available methods

5 for the fair and efficient adjudication of this litigation. The Class members have been damaged

6 and are entitled to recovery as a result o fMSDW 's common, uniform , unfair, and discriminatory

7 policies and practices. MSDW has computerized account data, payroll and personnel data that

8 will make calculation of damages for specific Class members relativel y simple. The propriety

9 and amount of punitive damages are based on the conduct of the Defendant, making these issues

10 common to the Class.

11

GENERAL POLICIES OR PRACTICES OF DISCRIMINATION

12

25. The denial s and abridgments of employment opportunities suffered by the

13 Represe ntative Plaintiff are part of a general po licy or practice of discrimination on the basis o f

14 gender in employment that has existed at MSDW throughout the relevant time period. These are

15 not isolated examples o f empl oyment practices or individual deci sions. On the contrary, these

16 incidents are representative of MSDW ' s systematic discrimination against fem ale Financial

17 Advisors in fav or o f male Financial Advisors.

18

26. Because virtually all indicia o f success, advancement, and achievement at

19 MSDW are based on the total dollar amount o f the assets a Financial Advi sor manages or on the

20 amount or revenue he o r she has produced, the ability to acquire new and lucrative accounts is

2 1 essential to a Financial Advisor's success in the business. Promotion at MSDW are also based on

22 gross production, total assets, or both. For exampl e, officer titles, such as "First Vice President"

23 are awarded when a Financial Advisor reaches at least $500,000 in gross production in the course

24 ofa year.

25

27. MSDW' s nationwide account di stribution policies and practices (as well as

26 its policies and practices for distributing other business opportunities) discriminate against

27 women . They permit excessive subj ectivity by Branch Managers in account assignment and the

28 allocation o f business opportunities. This is a uniform practice across MSDW o ffices . Thus,

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Branch Managers distribute accounts, referrals, leads, call-ins, walk-ins, and other business

2 opportunities to the FAs based on the Branch Managers' biased personal preferences.

3

28. By entrusting Branch Managers, virtually all of whom are men, with undue

4 discretion in these matters, MSDW maintains a system whereby the Branch Managers apply their

5 own personal preferences and biases in making distribution decisions in a way that systematically

6 disadvantages women and limits their compensation.

7

29. MSDW has implemented policies or practices that have denied or restricted

8 the availability of business opportunities, compensation, and other favorable employment

9 conditions to qualified female Financial Advisors. Such discriminatory policies or practices

10 include, without limitation:

11

a.

Systematically discriminating against women in allocating accounts

12 and business opportunities that impact their opportunities for increased compensation, including,

13 but not limited to, leads, call-ins, walk-ins, accounts from departing or retiring brokers ' books,

14 and other sources ofbusiness~

15

b. Establishing and maintaining arbitrary and subjective policies or

16 systems regarding business allocation and account distribution that have had the effect of denying

17 compensation to qualified women;

18

c. Relying upon unweighted , subjective, gender-based andlor arbitrary

19 criteria utilized by a nearly all-male managerial workforce in making business allocation

20 decisions that directly impact FAs' compensation;

21

d. Denying women opportunities to increase their commissions and

22 other earnings;

23

e. Maintaining a discriminatory and gender-biased corporate culture;

24 and

25

f.

Making employment decisions based on gender stereotypes.

26

CLAIMS OF REPRESENTATIVE PLAINTIFF

27

30. Plaintiff Daisy Jaffe worked as a Financial Advisor from approximately

28 August 1982 to August II , 2005 in the San Mateo, California office ofMSDW. During the

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course of her employment, MSDW denied her compensation, business opportunities, titles and

2 other conditions of employment that it made available to similarly-situated male Financial

3 Advisors.

4

31. In what MSDW called a "reduction in force ," it terminated Ms. Jaffe's

5 employment on August J I, 2005. Morgan Stanl ey unlawfully terminated Ms. Jaffe because she is

6 a female and is over 40.

7

32. Since the beginning of her employment with MSDW. MSDW has denied

8 Ms. Jaffe compensation that it made available to similarly-situated male Financial Advisors.

9 MSDW routinely distributed business opportunities, including accounts from departing and

10 retiring brokers, referrals, leads, call-ins and walk-ins, and potential cl ients, to male Financial

11 Advisors, rather than to female Financial Advisors . As a result of the inequitable and

12 di scriminatory di stribution of accounts and account prospects, fema le Financial Advisors have

13 diminished income potential and diminished actual income as compared to simi larly-situated

14 male employees, MSDW has also fav ored younger Financial Advi sors in account distribution

15 and the allocati on of bus iness opportunities, For example, in 2005 , MSDW distributed almost all

16 the accounts ofa retiring Financial Advisor. Frank Donohue, to male Financial Advisors who

17 were younger than Ms. Jaffe and who had no more qualifications than she . Similarly. MSDW

18 di stributed almost all the accounts of two other departing Financial Advisors. Phil Tucker and

19 Paul Roach, to younger, male Financial Advisors who were no more qualified than Ms. Jaffe.

20

33. During the course o f her employment, MSDW also did not allocate any

21 s ignificant walk-in or call-in business to Ms. Ja ffe, while it did allocate such business to

22 sim ilarly-situated younger male Financial Advisors. MSDW denied Ms. Jaffe these opportunities

23 due to her gender and age,

24

34. MSDW also discriminated against Ms. Jaffe as an individual based on

25 gender by denying her desirable office assignments. At the same time, it provided desirable

26 o ffice assignments to similarly-s ituated male Financial Advisors. MSDW did not pennit Ms.

27 Jaffe to have a desirable upstai rs offi ce, where the offi ces o f similarly-situated male broker were
28 located. Similarly, MSDW denied Ms. Jaffe 's request to relocate to the Palo Alto o ffice after the

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San Mateo office was evacuated in October 2004 due to a flood. MSDW permitted similarly·

2 situated male Financial Advi sors to relocate while it forced Ms. Jaffe to work from home. By

3 discriminating against her with respect to these terms and co nditio ns of her employment, MSDW

4 dimini shed the amount o f Ms. Jaffe's compensation.

5

35. By denying compensation to Ms. Jaffe that it made available to similarly·

6 situated male Financial Advi sors, MSDW has also denied her the ability to reach earnings tiers

7 with prestigious titles and greater income opportunities, which MSDW awarded based on a

8 Financial Advi sor's level of compensation.

9

36. MSDW terminated Ms. Jaffe 's employment due to the fact that she is

10 female and over the age of 40. At the time she was terminated, she held the title of First Vice

11 President. Thi s title was a title given to her because her annual production was at least $500,000.

12 At the time MSDW tenninated Ms. Jaffe, similarly-situated men (including yo unger men) with

13 fewer qualifications than she were not terminated. MSDW's stated reason for her termination at

14 the time was that her production levels were not adequate. Ms. Jaffe' s production levels were

15 dimini shed, however, only because MSDW di scriminated against her with respect to account

16 distribution and business opportunities, and through its refusal to pennit her to relocate to a

17 working office in 2004.

18

37. On or about November I, 200 5, Ms. Jaffe filed a charge of discrimination

19 with the California Department o f Fair Employment and Housing ("DFEH" ) and the Equal

20 Employment Opportunity Co mmi ssion ("EEOC"). On June 22 , 2006, she received a Notice of

2 1 Right to Sue from the EEOC. Her charge and Notice o f Right to Sue from the EEOC are attached

22 to thi s Complaint as Exhibit A and are incorporated by reference.

23

FIRST CLAIM FOR RELIEF

(Intentional Discrimination)

24

(Title VII .flbe Civil Righls Act.f 1964, 42 U.S.C. §§ 2000e e/ seq.)

(On behalf of Plaintiff aDd tbe Class)
25

26

38. Plaintiff incorporates the preceding paragraphs as alleged above.

27

39 . Thi s Claim is brought by the Representative Plaintiff on behalf of herself

28 and the Class she represents. Plaintiff Daisy Jaffe has timely filed a charge with the EEOC

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making classwide claims of discrimination as well as individual claims. On June 22, 2006,

2 Plaintiff received a Notice of Right to Sue from the EEOC. Plaintiff has exhausted her

3 administrative remedies on her own behalf and on behalf of the Class at the time of filing .

4

40. MSDW has maintained a system that is discriminatory, excessively

5 subjective, standardless, and/or arbitrary with respect to the distribution of accounts and business

6 opportunities, compensation and other terms and conditions of employment. MSDW' s

7 discriminatory policies or practices described ahove have denied female Financial Advisors

8 business opportunities and compensation, including past and future wages and other job benefits,

9 as compared to similarly-situated male Financial Advisors.

10

41. Defendant has intentionally discriminated against Plaintiff and the Class by

11 maintaining a pattern or practice of denying business opportunities and accounts that directly

12 affect compensation to qualified female Financial Advisors on the basi s of sex. The foregoing

13 conduct constitutes illegal, intentional discrimination as unjustified disparate treatment prohibited

14 by 42 U.S.C. §§ 2000. e( seq.

15

42. Plaintiff requests relief as hereinafter described .

16

SECOND CLAIM FOR RELIEF

(Disparate Impact Discrimination)

17

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiff and the Class)

18

19

43. Plaintiff incorporates the preceding paragraphs as alleged above.

20

44. This Claim is brought by the Representative Plaintiff on behalf of herself

21 and the Class she represents. Plaintiff Daisy Jaffe has timely filed a charge with the EEOC

22 making classwide claims of di scrimination as well as individual claims. On June 22, 2006,

23 Plaintiff received a Notice of Right to Sue from the EEOC. Plaintiff has exhausted her

24 administrative remedies on her own behalf and on behalf of the class at the time of filing.

25

45. MSDW has maintained a system and/or policies that are di sc riminatory,

26 excessively subjective, standardless, and/or arbitrary with respect to the distribution of accounts

27 and business opportunities which affect compensation and other terms and conditions of

28 employment. This system has an adverse impact on female employees and is not, and cannot be,

·9 ·

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justified by business necessity. Even if this system could be justified by business necessity, less

2 discriminatory alternatives exist and would equally serve any alleged necessity.

3

46. Plaintiff requests relief as hereinafter described .

4

THIRD CLAIM FOR RELIEF

(Geuder Discrimination)

5

(California Fair Employment and Housing Act, Cal. Gov't Code §§ 12940 et seq.)

(On behalf of Plaintiff and tbe California Subclass)

6

7

47. Plaintiff incorporates the preceding paragraphs as alleged above.

8

48. This claim is brought on behalf of Plaintiff Daisy Jaffe and the Subclass of

9 female Financial Advisors from California offices.

10

49. As described herein, MSDW' s actions constitute gender discrimination in

I I violation o f the California Fair Employment and Housing Act (FEHA). Plaintiff Daisy Jaffe

12 received a Right to Sue letter from the EEOC on June 22 , 2006. The pendency o f an EEOC

13 investigation into Plaintiffs charge tolled the time limit for filing a civil action pursuant to the

14 Fair Employment and Housing Act. Plaintiff has timely complied with all prerequisites to sue.

15

50. Plaintiff requests relief as hereinafter provided.

FOURTH CLAIM FOR RELIEF

16

(Age Discrimination)

17

(Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 el seq.)

(On behalf of Plaintiff only)

18

5 1. Plaintiff incorporates the preceding paragraphs as alleged above.

19

52. This claim is brought on behalf of Daisy Jaffe only.

20

53 . As described herein, MSDW 's actions constitute age discrimination against

21 Daisy Jaffe in violation of the Age Di scrimination in Employment Act of 1967, 29 U.S.C. §§ 621

22 el seq.

23

54. Plaintiff Dai sy Jaffe has timely filed a charge with the EEOC making

24
individual claims o f age di scrimination. On June 22, 2006, Plaintiff received a Notice of Right to

25 Sue from the EEOC. Plaintiff has exhausted her administrative remedies on her own behalf with

26 respect to this claim at the time of filing.

27

55. Plaintiff Jaffe requests relief as hereinafter provided.

28

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FIITH CLAfM FOR RELIEF

2

(Age Discrimination)

3

(California Fair Employment aod Housing Act, Cal. Gov" Code §§ 12940 et seq.)

(On behalf of Plaintiff only)

4

56. Plaintiff incorporates the preceding paragraphs as alleged above.

5

57. This claim is brought on behalf of Dai sy Jaffe only.

6

58. As described herein, MSDW's actions constitute age di scrimination against

7 Daisy Jaffe in violation of the California Fair Employment and Ho using Act (FEHA). Plaintiff

8 Daisy Jaffe received a Right to Sue letter from the EEOC on June 22, 2006. The pendency of an

9 EEOC investigation into Plaintitrs charge tolled the time limit for filing a civil action pursuant to

10 the Fair Employment and Housing Act. Plaintiff has timely complied with all prerequisites to

II sue.

12

59. Plaintiff requests relief as hereinafter provided .

13 ALLEGATIONS REGARDING RELIEF

14

60. Plaintiff and the Class she seeks to represent have no plain , adequate, o r

15 complete remedy at law to redress the wrongs alleged herein, and the injunctive relief sought in

16 this action is the only means of securing complete and adequate relief. Plaintiff and the Class she

17 seeks to represent are now suffering, and will continue to suffer, irreparable injury from

18 Defendant' s discriminatory acts and omissions.

19

61. MSDW's actions have caused and co ntinue to cause Plaintiff and all Class

20 members substantial losses in earnings and other employment benefits.

21

62 . In addition, Plaintiff and the Class suffer and continue to suffer

22 humil iation, embarrassment, and anguish, all to their damage in an amount according to proof.

23

63. MSDW perfonned the acts herein alleged with malice or reckless

24
indifference. Plaintiff and Class members are thus entitled to recover punitive damages in an

25
amount according to proo f.

26 PRAYER FOR RELIEF
27 WHEREFORE, Plaintiff and the Class pray for relief as foll ows :
28

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64. Certification of the case as a class action on behaJf of the proposed Class;

2

65. Designation o f Representative Plaintiff Daisy Jaffe as representative of the

3 Class;

4

66. Designation of Representative Plaintiffs counsel of record as Class

5 counsel;

6

67. A declaratory judgment that the practices complained of herein are

7 unlawful and violate 42 U.S.c. §§ 2000e, el seq., and the California FEHA, Cal. Gov't Code §§

8 12940 el seq.;

9

68. A preliminary and permanent injunction against MSDW and its officers,

10 agents. successors, employees, representatives , and any and all persons acting in concert with

11 them , from engaging in each of the unlawful policies, practices, customs, and usages set forth

12 herein;

13

69. An order that MSDW institute and carry out policies, practices, and

14 programs that provide equal employment opportunities for all employees regardless of gender.

15 and that it eradicate the effects of its past and present unlawful employment practices;

16

70. An o rder resto ring Plaintiff to her rightful position at MSDW. or in lieu of

17 reinstatement. an order for front pay benefits;

18

71. Back pay (including interest and benefits) for Plaintiff and individual Class

19 members;

20

72. All damages sustained as a result of MSDW's conduct, including damages

21 for em otional distress, humiliation, embarrassment, and anguish, according to proof;

22

73. Exemplary and punitive damages in an amount commensurate with

23 MSDW's ability to pay and to detcr future conduct;

24

74. Costs incurred herein, including reasonable attorneys ' fees to the extcnt

25 allowable by law;

26

75. Pre.j udgment and post-judgment interest, as provided by law; and

27

28

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76. Such other and further legal and equitable relief as this Court deems

2 necessary. just, and proper.

3 Dated: June 22, 2006

Respectfully submitted,

4

LlEFF, CABRAS ER, HEIMANN &

BERNSTEIN, LLP 5

6

By:~'A~J(),;;::;;L==;:_==-------

7

? e l lYM. Dermody

8

James M. Finberg (State Bar No. 114850)

Kelly M. Dermody (State Bar No. 171716)

9

Heather H. Wong (State Bar No. 238546)

UEFF, CABRASER, HEIMANN &

10

BERNSTEIN, LLP

Embarcadero Center West

I I

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

12

Telephone: (415) 956-1000

Facsimile: (415) 956-1008 13

Elizabeth A. Alexander

14

UEFF, CABRASER, HEIMANN &

BERNSTEIN, LLP

15

150 Fourth Avenue, Nonh, Suite 1650

Nashville, TN 372 19-2423

16

Telephone: (6 15) 3 13-9000

Facsimile: (615) 313-9965 17

18

Adam T. Klein Piper Hoffman

Justin M . Swartz

19

OUTTEN & GOLDEN LLP

3 Park Avenue, 29th Floor

20

New York, New York 10016

Telephone: (2 12) 245-1000

21

Facsimile: (2 12) 977-4005

22

Atlorneysfor Plaintiffs

23

24

25

26

27

28

545596. I

- 13 -

Cl.ASS ACTION COMPLArNT

Case3:06-cv-03903-TEH Document1 Filed06/22/06 Page15 of 17

DEMAND FOR .JURY TRIAL

2

Plaintiff hereby demands a trial by jury as to all issues so triable .

3 Dated: June 22, 2006
4
5

Respectfully submitted,
UEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

6

7

8

9

James M. Fin g (State Bar No. 114850) Kelly M. Dennody (State Bar No. 171 7 16)

Heather H . Wong (State Bar No. 238546)

10

UEFF, CABRASER, HEIMANN &

I I

BERNSTEIN, LLP Embarcadero Center West

12

275 Battery Street, 30th Floor San Francisco, CA 94111-3339

Telephone: (415) 956-1000

13

Facsimile: (415) 956-1008

14

Elizabeth A. Alexander

15

UEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

16

150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423

17

Telephone : (615) 313-9000 Facsimile: (615) 313-9965

18

Adam T. Klein

19

Piper Hoffman Justin M. Swartz

20

OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor

21

New York, New York 10016 Telephone: (212) 245-1000

22

Facsimile: (212) 977-4005

23

Attorneys for the Plaintiffs

24

25

26

27

28

S4SS96. I

- 14 -

CLASS ACTION COMPLAINT

Case3:06-cv-03903-TEH Document1 Filed06/22/06 Page16 of 17

)

,
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Case3:06-cv-03903-TEH Document1 Filed06/22/06 Page17 of 17

eS/ 22! 2ee6 16: 19 6153139965

LQ-IB NASHVILLE

PAGE 132/ 13 3

U.S. EQUAL EMPLOYMENT OPPORtUNITY CoMutSSlON

To: .... Dais)' Jaffe
3135 "-'ston AVWlu.
Hirtsboro., CA 9401 0

NOTICE OF RIGHT TO SUE (lsSUEO ON REQUEST)

From:

£an FrancIsco Cictrict Oftfc... SSG 350 The Em~ro
SUite 500
s.n Fraocolsco. CA 94105

o
Charge NO.

Eeoc Representative
T'I\Ornas P. Mig••, Investigator

Tefephone No.
{41S)G2. . . . . .

HaTlce: T'C 'THe P!!JtsoN AMJttaVI;D:

Thtc VII of the Cwll RJght.I: Act of 1964 and/or tM American. wtth DIsabilities Act (ADA): ThIs is your NotIce Qf Right to sue, 155Ued

underTItle VII andJor the NJA tes.d on the aDoVe-nUl'l'lOer charge. It has been $sued.1 your reQt.I8Sl YOW' lawsuit underTJue "" or

*1. hAOA must.,. filed In feden! orsbte courtW!THIN?O PAYS dyourNllOelpt ofthl& Notice oryour tight to Bue bEued on tNs c::hatge

wiG be:

(The tina limit for filing suit baSed on a state dailm may be dfff.m1t.)

o o

MOfe than 1eo days /'lave passed sjooe the fAJng at tM c:harga.
L.csa than 180 days t.av. paSMd since the: 1Vi'I; 01 this cNJrge. bUt I t.av. determined th.t It fI, unDcaly that 1110 eeoc will

o o

be able to COf1lJkM Its adminlslrattv. pmoessinv wlttlin '80 days from the IUlng of Ole d1afge. The EEOC is tal'l'rirm!ng its processing of \his c:harel$, Tht EEOC will continue to pnx:ess this charge.

Age Discrimination In Employment Act (AOEA): You may 11M under !he AOeA at any 1Eme fl"otn eo cbyI: ett.tr the d'1arve was filed
until 90 dayS aftl:lr you reeelva notice that wa have eomplet~ action on tho charge. In ~ reg.reI, the paragraph l1'I&ltced baCow
o appliu to your case ~ The EEOC tc closlng your ease, TherefI:Q, yoort.wsuit I.InderUle: AOEAmust be ftled In federal or state courtW1TH1N 90 CAYS of your receipt ofthls Notice. Othen.vlae. your right to 1Wi! based on the I'!bo\l~*, cnargtt will ~ lOst

o The eEOC is c:ootinuing il.5 handling of your ADeA Q!lIM. HQWCVer, it 150 dllY5 have passed since the 'filing of your et'Iarge, you may ftle suit In fedel'll 0( state court under the AD~ al thillirne,

'qual Pay Act(EPA): You afrea~ hWQ the right tow. undet!"« ePA (ftIing an IiiEOC charge is not required.) EPAsub must be brought In t.detwJ 01' st.t. QQurt within 2 years (3 yelll'S forwiltfUf vfolations) afthe illIegod EPA underpayment This.,..1\.$ thIIt baclqJay due for
ttl. any "'alations that occurred mOre than 2 y_rs (3 yearf) beforD you ft.. sUit may not be coIler;tfble.
If you file suit bas«! on tNt charge, p~ali8 senct a copy OIyo~ court complaint to offt<».
On behalf of the Comm~lon

Enclosure(s)
cc: Ms, Sonia T. Banerjl
Law Division MORGAN STANLEY D~ WITTER
101 caUfomla Street. 2"" FIOO7' San fFitnclsco, CA 941 11

tots. elizabeth A.. A~r

Uefll, Cabr.sser, ~Im.nn & Bernstein, LLP

One NastlVtll. ptace

.

150 FOI.Irth Avonu., North

Sult.1&50

N•• hville, TN 37219..2423

 
 Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page1 of 26

1 Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 email: kdermody@lchb.com email: hwong@lchb.com
6

7 Elizabeth A. Alexander (pro hac vice)

8

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

9

150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423

10

Telephone: (615) 313-9000 Facsimile: (615) 313-9965

11 email: ealexander@lchb.com

12 [Additional counsel listed on signature page] Attorneys for the Plaintiffs
13

14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO / OAKLAND DIVISION

16

17 DAISY JAFFE, DENISE WILLIAMS, and

18

MARGARET BENAY CURTIS-BAUER, on behalf of themselves and all others

19 similarly situated,

20

Plaintiffs,

21

v.

22

MORGAN STANLEY & CO. INCORPORATED, f/k/a MORGAN

23 STANLEY DW INC.

24 Defendant.
25

Case No. C-06-3903 TEH
SECOND AMENDED CLASS ACTION COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND DAMAGES FOR VIOLATIONS OF TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, 42 U.S.C. §§ 2000e et seq., 42 U.S.C. § 1981, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV’T CODE §§ 12940, et seq. and the ELLIOT-LARSEN CIVIL RIGHTS ACT, M.C.L.A. §§ 37.2101 et seq.
DEMAND FOR JURY TRIAL

26

27

28

720105.5

SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page2 of 26

1

Individual and Representative Plaintiffs Daisy Jaffe, Denise Williams, and Margaret

2 Benay Curtis-Bauer (“Plaintiffs”) on behalf of themselves and all others similarly situated, allege,

3 upon personal knowledge as to themselves and upon information and belief as to other matters, as

4 follows:

5

NATURE OF THE CLAIM

6

1. Defendant Morgan Stanley & Co. Incorporated. f/k/a Morgan Stanley DW

7 Inc. (hereinafter “MS ” or “the Company”) contains Global Wealth Management Group (MS-

8 GWMG), which manages MS’s retail financial services firm. MS’s retail financial services firm

9 discriminates against African American and Latino (hereinafter, collectively “minority”) and

10 female Financial Advisors and Registered Financial Advisor Trainees on the basis of gender, race

11 and/or color with respect to business opportunities, compensation, and other terms and conditions

12 of employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et

13 seq., 42 U.S.C. § 1981, the California Fair Employment and Housing Act, Cal. Gov’t Code §§

14 12940 et seq., and the Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.

15

2. The violations are systemic, constituting a pattern and practice that

16 pervades the corporate culture of MS. They are not isolated or exceptional incidents, but rather

17 the regular and predictable result of Defendant’s policies and practices. Put simply, MS’s

18 policies and practices with regard to, among other things, the distribution of the business

19 opportunities, investment accounts, and sales support under its control have the effect, and have

20 been undertaken with the purpose, of denying equal opportunities for compensation to qualified

21 female and minority Financial Advisors and Registered Financial Advisor Trainees.

22

3. MS generally pays its Financial Advisors (also called “FAs” or “brokers”)

23 on a commission basis—a percentage of the revenue generated by the investment accounts

24 assigned to the FA.

25

4. FAs acquire investment accounts through “leads” and “referrals” (e.g.,

26 when a Financial Advisor is told of a potential client, the FA contacts the potential client, and the

27 FA enrolls the potential client as a MS customer); by transfers from one Financial Advisor to

28 another (e.g., when another FA moves to another brokerage firm, retires or leaves the business);

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page3 of 26

1 through partnerships with other Financial Advisors, and through “walk-ins” and “call-ins” (e.g.,

2 when a potential client calls or walks into the branch and inquires about opening an account).

3

5. MS has implemented company-wide policies and practices for the

4 distribution of accounts, leads, referrals, partnership opportunities, walk-ins, call-ins, and other

5 business opportunities that delegate substantial discretion to MS’s virtually all-white-male Branch

6 Managers and allow Branch Managers to rely on inappropriate criteria causing an unlawful

7 adverse impact on women and minorities. MS Branch Managers have extraordinary discretion to

8 distribute accounts and business opportunities as they choose, allowing their gender and race

9 stereotypes and the company-wide culture of gender and race discrimination to influence their

10 decisions. As a result, it has been MS’s practice for years to distribute accounts and other

11 business opportunities to white male Financial Advisors in numbers disproportionate to those

12 distributed to similarly-situated female and minority Financial Advisors.

13

6. Because Financial Advisors obtain so many accounts through this process,

14 rather than on the FAs’ own initiative, the distribution of accounts and the allocation of business

15 opportunities are substantial factors affecting the compensation of MS Financial Advisors.

16

7. These discriminatory policies and practices intentionally and systematically

17 disadvantage female and minority Financial Advisors at MS and prevent them from fairly

18 competing for business opportunities and higher compensation.

19

8. As troubling as these discriminatory policies and practices are, more

20 disturbing still is the cavalier way in which MS treats the subject of gender and race

21 discrimination against its female and minority Financial Advisors and Registered Financial

22 Advisor Trainees. For example, while MS says, “We focus recruiting efforts on women and

23 provide career development programs including internal women’s conferences led by senior

24 women executives,” these statements of inclusion are illusory in light of MS's exclusionary

25 practices.

26

9. Accordingly, this class action is brought by female and minority Financial

27 Advisors and Registered Financial Advisor Trainees on behalf of themselves individually and all

28 similarly-situated female and minority Financial Advisors and Registered Financial Advisor

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page4 of 26

1 Trainees in the United States against whom MS has discriminated on the basis of gender, race

2 and/or color. This action seeks to end MS’s discriminatory policies and/or practices and to make

3 the Plaintiff class whole by requesting the following remedies: injunctive relief to remedy

4 systemic gender, race, and/or color discrimination at MS; an award of back pay and front pay;

5 and compensatory and punitive damages.

6

JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT

7

10. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331.

8

11. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b). Members

9 of the Plaintiff class reside in California and throughout the United States. Defendant MS is a

10 Delaware corporation, headquartered in New York, and licensed to do business in California. It

11 has branch offices throughout California and this District. Many of the acts complained of

12 occurred in this State and this District and gave rise to the claims alleged.

13

12. Assignment to the San Francisco/Oakland Division of this Court is proper

14 because Plaintiffs Daisy Jaffe and Margaret Benay Curtis-Bauer reside within this Division and

15 many of the acts complained of took place in this Division.

16

PARTIES

17

13. Plaintiff Daisy Jaffe is a female resident of Hillsboro, California. She was

18 employed as a Financial Advisor in the San Mateo, California office of MS from on or about

19 August 1982 until August 11, 2005. During the course of her employment as a Financial Advisor

20 at MS, MS denied Ms. Jaffe business opportunities on the basis of her gender and age that

21 directly impacted her compensation. MS wrongfully terminated Ms. Jaffe because she is female

22 and over the age of 40.

23

14. Plaintiff Denise Williams is an African-American female who resides in

24 Northville, Michigan. She is currently employed as a Financial Advisor in the Detroit, Michigan

25 office of MS. Her employment as a Financial Advisor at MS in Detroit began in March 2004.

26 During the course of her employment, MS has denied Ms. Williams business opportunities on the

27 basis of her gender, race, and color that directly impacted her compensation.

28

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page5 of 26

1

15. Plaintiff Margaret Benay Curtis-Bauer is an African-American female who

2 resides in Emeryville, California. She was employed in the San Francisco, California office of

3 MS from approximately October or November 1989 until November 2002. She started at MS as

4 a Financial Advisor trainee, and became a registered Financial Advisor in or around 1990.

5 During the course of her employment, MS has denied Ms. Curtis-Bauer business opportunities on

6 the basis of her race and color that directly impacted her compensation. MS wrongfully

7 terminated Ms. Curtis-Bauer because she is African-American.

8

16. MS was formerly known as Morgan Stanley D.W., a wholly-owned

9 subsidiary of Morgan Stanley.

10

17. Morgan Stanley is a global financial firm that provides brokerage and

11 investment banking management services to corporations, governments and individuals around

12 the world. It maintains leading market positions in each of its business segments – Institutional

13 Securities, Retail Brokerage, Asset Management and Discover (Credit Services). Morgan Stanley

14 employs approximately 58,333 employees worldwide. It is a Fortune 500 company doing

15 business in 32 countries and is one of the largest financial institutions in the United States. It

16 recently reported annual revenues of almost $52.5 billion, a net income of $7.4 billion and assets

17 of $898.5 billion. Morgan Stanley reported a market value of over $63 billion in its November

18 2006 SEC 10-K filing.

19

18. MS-GWMG is the retail broker-dealer subsidiary of Morgan Stanley. MS

20 provides comprehensive financial services to clients through a network of approximately 8,000

21 Financial Advisors with over 500 global locations, including over 450 U.S. retail locations. As of

22 June 20, 2007, MS had $728 billion in client assets.

23

CLASS ACTION ALLEGATIONS

24

19. Plaintiffs Jaffe and Williams bring this Class Action pursuant to Fed. R.

25 Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a Class of all female Financial Advisors and

26 Registered Financial Advisor Trainees employed by MS in the United States at any time from

27 August 5, 2003 to the present (the “Gender Class”). Plaintiff Williams brings this Class Action

28 pursuant to Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a Class of all African American

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page6 of 26

1 Financial Advisors and Registered Financial Advisor Trainees employed by MS in the United

2 States at any time from October 12, 2002 to the present (the “African American Class”), and

3 Plaintiff Curtis Bauer brings this Class Action pursuant to Fed. R. Civ. P. 23(a), (b)(2), and (b)(3)

4 on behalf of a Class of all minority Financial Advisors and Registered Financial Advisor Trainees

5 employed by MS in the United States at any time from October 12, 2002 to the present (the

6 “Minority Class”). Plaintiff Jaffe also brings this Class Action pursuant to Fed. R. Civ. P. 23(a),

7 (b)(2), and (b)(3) on behalf of a Subclass of all female Financial Advisors and Registered

8 Financial Advisor Trainees employed by MS in California at any time from November 1, 2004 to

9 the present (the “California Gender Subclass”). Plaintiff Williams brings this action pursuant to

10 Fed. R. Civ. P. 23(a), (b)(2) and (b)(3) on behalf of Subclasses of female and African American

11 Financial Advisors and Registered Financial Advisor Trainees employed by MS in Michigan at

12 any time from October 12, 2003 to the present (the “Michigan Gender Subclass” and the

13 “Michigan Race Subclass”). Plaintiffs reserve the right to amend the definitions of the Classes

14 and Subclasses based on discovery or legal developments.

15

20. Plaintiffs are members of the Classes and/or Subclasses they seek to

16 represent.

17

21. The members of the Classes and Subclasses identified herein are so

18 numerous that joinder of all members is impracticable. As of the filing of this Complaint, MS has

19 approximately 8,000 Financial Advisors. Although the precise number of female and minority

20 Financial Advisors and Registered Financial Advisor Trainees is currently unknown, it is far

21 greater than can be feasibly addressed through joinder.

22

22. There are questions of law and fact common to the Classes and Subclasses,

23 and these questions predominate over any questions affecting only individual members. Common

24 questions include, among others: (1) whether MS’s policies or practices discriminate against

25 female and minority Financial Advisors and Registered Financial Advisor Trainees; (2) whether

26 MS’s policies or practices violate Title VII, Section 1981, the California Fair Employment and

27 Housing Act and/or Michigan’s Elliot-Larsen Civil Rights Act; and (3) whether equitable

28 remedies, injunctive relief, compensatory, and punitive damages for the Class are warranted.

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page7 of 26

1

23. The Representative Plaintiffs’ claims are typical of the claims of the

2 Classes and Subclasses. Ms. Jaffe and Ms. Williams are female current or former Financial

3 Advisors of MS who allege gender discrimination. In addition, Ms. Williams and Ms. Curtis-

4 Bauer are African American current or former Financial Advisors or Financial Advisor Trainees

5 who allege race and color discrimination.

6

24. The Representative Plaintiffs will fairly and adequately represent and

7 protect the interests of the members of the Classes and Subclasses. There are no conflicts

8 between Ms. Jaffe and Ms. Williams and the Gender Class, and there are no conflicts between

9 Ms. Williams and Ms. Curtis-Bauer and the African American and Minority Classes. Because

10 MS utilizes the same discriminatory practices against both African Americans and Latinos, Ms.

11 Curtis-Bauer is an adequate representative of the Minority Class. Plaintiffs have retained counsel

12 competent and experienced in complex class actions, employment discrimination litigation, and

13 the intersection thereof.

14

25. Class certification is appropriate pursuant to Fed. R. Civ. P. 23(b)(2)

15 because MS has acted and/or refused to act on grounds generally applicable to the Class and

16 Subclasses, making appropriate declaratory and injunctive relief with respect to Plaintiffs and the

17 Classes and Subclasses. The Class and Subclass members are entitled to injunctive relief to end

18 MS’s common, uniform, unfair, and discriminatory policies and practices.

19

26. Class certification is also appropriate pursuant to Fed. R. Civ. P. 23(b)(3)

20 because common questions of fact and law predominate over any questions affecting only

21 individual members of the Classes and Subclasses, and because a class action is superior to other

22 available methods for the fair and efficient adjudication of this litigation. The Class members

23 have been damaged and are entitled to recovery as a result of MS’s common, uniform, and

24 discriminatory policies and practices. MS has computerized account, payroll, and personnel data

25 that will make calculation of damages for specific Class and Subclass members relatively simple.

26 The propriety and amount of punitive damages are based on the conduct of the Defendant,

27 making these issues common to the Classes and Subclasses.

28

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page8 of 26

1

GENERAL POLICIES OR PRACTICES OF DISCRIMINATION

2

27. The denials and abridgments of employment opportunities suffered by the

3 Representative Plaintiffs are part of a general policy or practice of discrimination on the basis of

4 gender, race, and color in employment that has existed at MS throughout the relevant time period.

5 These are not isolated examples of employment practices or individual decisions. On the

6 contrary, these incidents are representative of MS’s systematic discrimination against female and

7 minority Financial Advisors and Registered Financial Advisor Trainees in favor of white males.

8

28. MS systematically recruits, hires, promotes, and retains white males to

9 Financial Advisors and Registered Financial Advisor Trainees positions in all branches

10 throughout the United States. MS’s uniform and company-wide practices exclude women and

11 minorities from Financial Advisors and Financial Advisor Trainees positions.

12

29. Because virtually all indicia of success, advancement, and achievement at

13 MS are based on the total dollar amount of the assets a Financial Advisor manages or on the

14 amount or revenue he or she has produced, the ability to acquire new and lucrative accounts is

15 essential to a Financial Advisor’s success in the business. Titles at MS are also based on gross

16 production, total assets, or both. For example, officer titles, such as “First Vice President” are

17 awarded when a Financial Advisor reaches at least $500,000 in gross production in the course of

18 a year. First

19

30. MS’s nationwide account distribution policies and practices (as well as its

20 policies and practices for distributing other business opportunities) discriminate against women

21 and minorities. They permit excessive subjectivity by Branch Office Managers and Sales

22 Managers in account assignment and the allocation of business opportunities. This is a uniform

23 practice across MS offices. Thus, Branch Office Managers and Sales Managers distribute

24 accounts, referrals, leads, call-ins, walk-ins, and other business opportunities to the FAs based on

25 the Branch Office Managers’ and Sales Managers’ biased personal preferences.

26

31. By entrusting Branch Office Managers and Sales Managers, virtually all of

27 whom are white men, with undue discretion in these matters, MS maintains a system whereby the

28 Branch Office Managers and Sales Managers apply their own personal preferences and biases in

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page9 of 26

1 making distribution decisions in a way that systematically disadvantages women and minorities,

2 and limits their compensation.

3

32. MS has implemented policies or practices that have denied or restricted the

4 availability of business opportunities, compensation, and other favorable employment conditions

5 to qualified female and minority Financial Advisors and Registered Financial Advisor Trainees.

6 Such discriminatory policies or practices include, without limitation:

7

a. Systematically discriminating against women and minorities in

8 allocating accounts and business opportunities that impact their opportunities for increased

9 compensation, including, but not limited to, leads, call-ins, walk-ins, accounts from departing or

10 retiring brokers’ books, sales support, office allocation, partnership formation and partnership

11 splits, and other sources of business and production;

12

b. Establishing and maintaining arbitrary and subjective policies or

13 systems regarding business allocation and account distribution that have had the effect of denying

14 compensation to qualified women and minorities;

15

c. Relying upon unweighted, subjective, gender-based, race-based,

16 color-based, and/or arbitrary criteria utilized by a nearly all-white-male managerial workforce in

17 making business allocation decisions that directly impact FAs’ compensation;

18

d. Denying women and minorities opportunities to increase their

19 commissions and other earnings;

20

e. Maintaining a discriminatory, gender-biased, race-biased, and

21 color-biased, corporate culture;

22

f. Establishing and maintaining discriminatory recruitment, hiring,

23 and assignment policies or systems that have had the effect of denying Financial Advisor and

24 Registered Financial Advisor Trainee positions to qualified women and minorities; and

25

g. Making employment decisions based on gender or race stereotypes.

26

33. Further compounding each of these discriminatory policies or practices,

27 MS has failed to monitor its policies and practices to determine how these policies and practices

28 systematically disadvantage women and minorities.

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page10 of 26

1

CLAIMS OF REPRESENTATIVE PLAINTIFF JAFFE

2

34. Plaintiff Daisy Jaffe worked as a Financial Advisor from approximately

3 August 1982 to August 11, 2005 in the San Mateo, California office of MS. During the course of

4 her employment, MS denied her compensation, business opportunities, titles and other conditions

5 of employment that it made available to similarly-situated male Financial Advisors.

6

35. In what MS called a “reduction in force,” it terminated Ms. Jaffe’s

7 employment on August 11, 2005. Morgan Stanley unlawfully terminated Ms. Jaffe because she is

8 a female and is over 40.

9

36. Since the beginning of her employment with MS, MS has denied Ms. Jaffe

10 compensation that it made available to similarly-situated male Financial Advisors. MS routinely

11 distributed business opportunities, including accounts from departing and retiring brokers,

12 referrals, leads, call-ins and walk-ins, and potential clients, to male Financial Advisors, rather

13 than to female Financial Advisors. As a result of the inequitable and discriminatory distribution of

14 accounts and account prospects, female Financial Advisors have diminished income potential and

15 diminished actual income as compared to similarly-situated male employees. MS has also

16 favored younger Financial Advisors in account distribution and the allocation of business

17 opportunities. For example, in 2005, MS distributed almost all the accounts of a retiring

18 Financial Advisor to male Financial Advisors who were younger than Ms. Jaffe and who had no

19 more qualifications than she. Similarly, MS distributed almost all the accounts of two other

20 departing Financial Advisors to younger, male Financial Advisors who were no more qualified

21 than Ms. Jaffe.

22

37. During the course of her employment, MS also did not allocate any

23 significant walk-in or call-in business to Ms. Jaffe, while it did allocate such business to

24 similarly-situated younger male Financial Advisors. MS denied Ms. Jaffe these opportunities due

25 to her gender and age.

26

38. MS also discriminated against Ms. Jaffe as an individual based on gender

27 by denying her desirable office assignments. At the same time, it provided desirable office

28 assignments to similarly-situated male Financial Advisors. MS did not permit Ms. Jaffe to have a

720105.5

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case3:06-cv-03903-TEH Document81 Filed08/17/07 Page11 of 26

1 desirable upstairs office, where the offices of similarly-situated male broker were located.

2 Similarly, MS denied Ms. Jaffe’s request to relocate to the Palo Alto office after the San Mateo

3 office was evacuated in October 2004 due to a flood. MS permitted similarly-situated male

4 Financial Advisors to relocate while it forced Ms. Jaffe to work from home. By discriminating

5 against her with respect to these terms and conditions of her employment, MS diminished the

6 amount of Ms. Jaffe’s compensation.

7

39. By denying compensation to Ms. Jaffe that it made available to similarly-

8 situated male Financial Advisors, MS has also denied her the ability to reach earnings tiers with

9 prestigious titles and greater income opportunities, which MS awarded based on a Financial

10 Advisor’s level of compensation.

11

40. MS terminated Ms. Jaffe’s employment due to the fact that she is female

12 and over the age of 40. At the time she was terminated, she held the title of First Vice President.

13 This title was given to her because her annual production was at least $500,000. At the time MS

14 terminated Ms. Jaffe, similarly-situated men (including younger men) with fewer qualifications

15 than she were not terminated. MS’s stated reason for her termination at the time was that her

16 production levels were not adequate. Ms. Jaffe’s production levels were diminished, however,

17 only because MS discriminated against her with respect to account distribution and business

18 opportunities, and through its refusal to permit her to relocate to a working office in 2004.

19

41. On or about November 1, 2005, Ms. Jaffe filed a charge of discrimination

20 with the California Department of Fair Employment and Housing (“DFEH”) and the Equal

21 Employment Opportunity Commission (“EEOC”). On April 12, 2006, she received a Notice of

22 Right to Sue from the DFEH. On June 22, 2006, she received a Notice of Right to Sue from the

23 EEOC. Her charge and Notices of Right to Sue from the EEOC and DFEH are attached to this

24 Complaint as Exhibit A and are incorporated herein by reference.

25

CLAIMS OF REPRESENTATIVE PLAINTIFF DENISE WILLIAMS

26

42. Plaintiff Denise Williams has worked as a Financial Advisor since March

27 2004 in the Detroit, Michigan office of MS. Ms. Williams is a current employee in that office.

28 During the course of her employment, MS denied her compensation, business opportunities,

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1 corporate-officer titles and other conditions of employment that it made available to similarly-

2 situated white male Financial Advisors.

3

43. Since the beginning of her employment with MS, MS has denied Ms.

4 Williams compensation that it made available to similarly-situated white male Financial

5 Advisors. MS routinely distributed business opportunities, including accounts from departing

6 and retiring brokers, referrals, leads, call-ins and walk-ins, and potential clients, to white male

7 Financial Advisors, rather than to Ms. Williams. As a result of the inequitable and

8 discriminatory distribution of accounts and account prospects, female and African American

9 Financial Advisors have diminished income potential and diminished actual income as compared

10 to similarly-situated white male employees. As a result of the inequitable and discriminatory

11 distribution of accounts and account prospects, Ms. Williams had diminished income potential

12 and diminished actual income as compared to similarly-situated white male employees.

13

44. On or about November 2005, MS transferred a group of accounts from a

14 senior broker to a white male Financial Advisor with fewer qualifications than Ms. Williams. MS

15 did not provide Ms. Williams with similar account distributions.

16

45. Also, since approximately October 2005, a number of Financial Advisors

17 have resigned from the Detroit office of MS, including one who resigned in approximately May

18 or June 2006. MS distributed accounts of greater value from these brokers’ books of business to

19 a white male Financial Advisor who is similarly-situated to Ms. Williams than it distributed to

20 her. In some cases, MS gave Ms. Williams no accounts from these departing brokers.

21

46. Also, while a similarly-situated white male broker was permitted to enter

22 into a lucrative partnership with a senior broker, Ms. Williams’ Branch Office Manager told her

23 that no one wanted to enter a partnership with her.

24

47. By discriminating against her with respect to these and other business

25 opportunities, MS diminished Ms. Williams’ compensation. MS denied Ms. Williams these

26 opportunities due to her gender and race.

27

48. Ms. Williams was also subject to retaliation for complaints of gender and

28 race discrimination she made to her Branch Office Manager starting in the Summer of 2005.

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1 Among other things, Ms. Williams complained that she was not given the same opportunities for

2 compensation as her white male colleagues. Ms. Williams also complained to her Branch Office

3 Manager of the hostile environment she suffers as a result of her race.

4

49. After Ms. Williams complained of gender and race discrimination to her

5 Branch Office Manager, MS isolated her, including excluding her from Company functions. MS

6 also moved her from her office into the bull pen, which is a space reserved for rookie brokers.

7 Other similarly-situated white male employees were not required to move into the bull pen.

8

50. By discriminating against her with respect to these terms and conditions of

9 her employment, MS has diminished the amount of Ms. Williams’ compensation.

10

51. By denying compensation to Ms. Williams that it made available to

11 similarly-situated white male Financial Advisors, MS has also denied her the ability to reach

12 earnings tiers with prestigious titles and greater income opportunities, which MS awarded based

13 on a Financial Advisor’s level of compensation.

14

52. On or about October 10, 2006, Ms. Williams filed a charge of

15 discrimination with the Michigan Department of Civil Rights (“MDCR”) and the Equal

16 Employment Opportunity Commission (“EEOC”), which she subsequently amended. On

17 December 5, 2006, she received a Notice of Right to Sue from the EEOC. Her charges and

18 Notice of Right to Sue from the EEOC are attached to this Complaint as Exhibit B and are

19 incorporated herein by reference.

20 CLAIMS OF REPRESENTATIVE PLAINTIFF MARGARET BENAY CURTIS-BAUER

21

53. Plaintiff Margaret Benay Curtis-Bauer was employed in the San Francisco,

22 California office of MS from approximately October or November 1989 until November 2002.

23 She started at MS as a Financial Advisor Trainee, and became a registered Financial Advisor in or

24 around 1990. During the course of her employment, MS denied her compensation, business

25 opportunities, titles and other conditions of employment that it made available to similarly-

26 situated non-minority Financial Advisors.

27

54. Since the beginning of her employment with MS, MS has denied Ms.

28 Curtis-Bauer compensation that it made available to similarly-situated non-minority Financial

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1 Advisors. MS routinely distributed business opportunities, including accounts from departing

2 and retiring brokers, referrals, leads, call-ins and walk-ins, and potential clients, to white

3 Financial Advisors, rather than to Ms. Curtis-Bauer. As a result of the inequitable and

4 discriminatory distribution of accounts and account prospects, minority Financial Advisors like

5 Ms. Curtis-Bauer have diminished income potential and diminished actual income as compared to

6 similarly-situated white employees.

7

55. During the course of her employment at MS, MS distributed the accounts

8 of departing and/or retiring brokers to non-minority Financial Advisors with fewer qualifications

9 than Ms. Curtis-Bauer. In some cases, MS gave Ms. Curtis-Bauer no accounts from these

10 departing and/or retiring brokers.

11

56. On the rare occasions when MS assigned a lead or referral to Ms. Curtis-

12 Bauer, the accounts were of minimal value or had debits. For the accounts assigned to Ms.

13 Curtis-Bauer with a debit, she had to collect the money owed by the client for the inactivity fee or

14 IRA fee. If Ms. Curtis-Bauer was unable to collect the fee from the client, MS required her to

15 either sell assets to pay the fee or MS would take the fee out of Ms. Curtis-Bauer’s commission.

16

57. Also, while similarly-situated non-minority brokers were permitted to enter

17 into lucrative partnership with senior brokers, Ms. Curtis-Bauer was not given this opportunity.

18 Ms. Curtis-Bauer’s Branch Office Managers often helped junior white brokers partner with senior

19 brokers, but none of her Branch Office Managers helped Ms. Curtis-Bauer enter into a

20 partnership.

21

58. MS also discriminated against Ms. Curtis-Bauer as an individual based on

22 race by denying her desirable office assignments. At the same time, it provided desirable office

23 assignments to similarly-situated white Financial Advisors. MS did not assign Ms. Curtis-Bauer

24 to an office until after she had worked at MS for over 10 years. Instead, MS kept Ms. Curtis-

25 Bauer in the bullpen, an open area intended for Financial Advisor trainees and rookie brokers.

26 During the more than 10 years that MS kept Ms. Curtis-Bauer in the bullpen, MS assigned

27 similarly-situated non-minority Financial Advisors to offices. Ms. Curtis-Bauer knows that

28 offices were available for her during the more than 10 years she remained in the bullpen because

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1 MS assigned similarly-situated non-minority Financial Advisors who started after her to available

2 offices.

3

59. MS also denied Ms. Curtis-Bauer other business opportunities and

4 advancement into management arising out of low production. For example, Ms. Curtis-Bauer

5 asked her Branch Office Manager if she could be appointed as the point person for ICS Managed

6 Accounts business, which would have provided her the opportunity to inform Financial Advisors

7 about recent developments with managed accounts. Despite her requests, MS assigned this

8 position to non-minority employees who were no more qualified than Ms. Curtis-Bauer, including

9 a Sales Assistant who was not a registered broker.

10

60. In addition, MS denied Ms. Curtis-Bauer the opportunity to put on targeted

11 seminars to build her book of business. For example, Ms. Curtis-Bauer planned a seminar

12 targeted to accountants in an effort to increase her business. Her Branch Office Manager did not

13 allow her to proceed with the seminar, even though she had already paid a deposit for a room and

14 had printed special invitations. Ms. Curtis-Bauer’s Branch Office Manager told her that other

15 non-minority Financial Advisors had a monopoly on the accountant seminars.

16

61. MS also did not support Ms. Curtis-Bauer in her networking efforts. For

17 example, Ms. Curtis-Bauer asked her Branch Office Manager if she could stay at MS’s company-

18 owned hotel room while she attended a roundtable for Black Enterprise Magazine, in which she

19 had been invited to speak. Although Ms. Curtis-Bauer offered to pay for her own airfare, MS

20 denied her request to stay in its company-owned room. Her Branch Office Manager told her that

21 her participation in this event would not result in any business.

22

62. By discriminating against her with respect to these and other business

23 opportunities, MS diminished Ms. Curtis-Bauer’ compensation. MS denied Ms. Curtis-Bauer

24 these opportunities due to her race and color.

25

63. By denying compensation to Ms. Curtis-Bauer that it made available to

26 similarly-situated non-minority Financial Advisors, MS has also denied her the ability to reach

27 earnings tiers with prestigious titles and greater income opportunities, which MS awarded based

28 on a Financial Advisor’s level of compensation.

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1

64. In what MS called a “reduction in force,” it terminated Ms. Curtis-Bauer’s

2 employment in or around November 2002. MS unlawfully terminated Ms. Curtis-Bauer because

3 she is African American.

4

65. At the time MS terminated Ms. Curtis-Bauer, non-minority Financial

5 Advisors with less seniority than her were not terminated. MS’s stated reason for her termination

6 at the time was that her production levels did not meet MS’s threshold. Ms. Curtis-Bauer’s

7 production levels were diminished, however, only because MS discriminated against her with

8 respect to account distribution and business opportunities.

9

10

FIRST CLAIM FOR RELIEF

(Intentional Gender Discrimination)

11

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiffs Jaffe and Williams and the Gender Class) 12

13

66. Plaintiffs incorporate the preceding paragraphs as alleged above.

14

67. This Claim is brought by Representative Plaintiffs Jaffe and Williams on

15 behalf of themselves and the Gender Class they represent. Plaintiffs have timely filed charges

16 with the EEOC making classwide claims of discrimination as well as individual claims, and have

17 received Notices of Right to Sue from the EEOC. Plaintiffs have exhausted their administrative

18 remedies on their own behalf and on behalf of the Gender Class at the time of filing.

19

68. MS has maintained a system that is discriminatory, excessively subjective,

20 standardless, and/or arbitrary with respect to the distribution of accounts and business

21 opportunities, compensation and other terms and conditions of employment. MS’s discriminatory

22 policies or practices described above have denied female Financial Advisors and Registered

23 Financial Advisor Trainees business opportunities and compensation, including past and future

24 wages and other job benefits, as compared to similarly-situated male Financial Advisors and

25 Registered Financial Advisor Trainees.

26

69. Defendant has intentionally discriminated against Plaintiffs Jaffe and

27 Williams and the Gender Class by maintaining a pattern or practice of denying business

28 opportunities and accounts that directly affect compensation to qualified female Financial

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1 Advisors and Registered Financial Advisor Trainees on the basis of sex. The foregoing conduct

2 constitutes illegal, intentional discrimination as unjustified disparate treatment prohibited by 42

3 U.S.C. §§ 2000e et seq.

4

70. The class period for the Title VII gender class is from August 5, 2003 to

5 present.

6

71. Plaintiffs request relief as hereinafter described.

7

SECOND CLAIM FOR RELIEF

(Disparate Impact Gender Discrimination)

8

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiffs Jaffe and Williams and the Gender Class) 9

10

72. Plaintiffs incorporate the preceding paragraphs as alleged above.

11

73. This Claim is brought by Representative Plaintiffs Jaffe and Williams on

12 behalf of themselves and the Gender Class they represent. Plaintiffs Jaffe and Williams filed

13 timely charges of discrimination with the EEOC making classwide claims of discrimination as

14 well as individual claims, and have received Notices of Right to Sue from the EEOC. Plaintiffs

15 Jaffe and Williams have exhausted their administrative remedies on their own behalf and on

16 behalf of the Class at the time of filing.

17

74. MS has maintained a system and/or policies that are discriminatory,

18 excessively subjective, standardless, and/or arbitrary with respect to the distribution of accounts

19 and business opportunities which affect compensation and other terms and conditions of

20 employment. This system has an adverse impact on female employees and is not, and cannot be,

21 justified by business necessity. Even if this system could be justified by business necessity, less

22 discriminatory alternatives exist and would equally serve any alleged necessity.

23

75. The class period for the Title VII gender class is from August 5, 2003 to

24 present.

25

76. Plaintiffs request relief as hereinafter described.

26

27

28

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1

THIRD CLAIM FOR RELIEF

(Intentional Race and Color Discrimination)

2

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiff Williams and the African American Class)

3

4

77. Plaintiffs incorporate the preceding paragraphs as alleged above.

5

78. This Claim is brought by Representative Plaintiff Williams on behalf of

6 herself and the African American Class she represents. Plaintiff has timely filed a charge with the

7 EEOC making classwide claims of discrimination as well as individual claims, and has received a

8 Notice of Right to Sue from the EEOC. Plaintiff Williams has exhausted her administrative

9 remedies on her own behalf and on behalf of the Class at the time of filing.

10

79. MS has maintained a system that is discriminatory, excessively subjective,

11 standardless, and/or arbitrary with respect to the distribution of accounts and business

12 opportunities, compensation and other terms and conditions of employment. MS’s discriminatory

13 policies or practices described above have denied African American Financial Advisors and

14 Registered Financial Advisor Trainees business opportunities and compensation, including past

15 and future wages and other job benefits, as compared to similarly-situated white Financial

16 Advisors and Registered Financial Advisor Trainees.

17

80. Defendant has intentionally discriminated against Plaintiff Williams and

18 the Class by maintaining a pattern or practice of denying business opportunities and accounts that

19 directly affect compensation to qualified African American Financial Advisors and Registered

20 Financial Advisor Trainees on the basis of race and/or color. The foregoing conduct constitutes

21 illegal, intentional discrimination as unjustified disparate treatment prohibited by 42 U.S.C. §§

22 2000e et seq.

23

81. The class period for the Title VII race class is from December 14, 2005 to

24 present.

25

82. Plaintiffs request relief as hereinafter provided.

26

27

28

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1

FOURTH CLAIM FOR RELIEF

(Disparate Impact Race and Color Discrimination)

2

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiff Williams and the African American Class)

3

4

83. Plaintiffs incorporate the preceding paragraphs as alleged above.

5

84. This Claim is brought by Representative Plaintiff Williams on behalf of

6 herself and the African American Class she represents. Plaintiff Williams filed a timely charge of

7 discrimination with the EEOC making classwide claims of discrimination as well as individual

8 claims, and has received a Notice of Right to Sue from the EEOC. Plaintiff Williams has

9 exhausted her administrative remedies on her own behalf and on behalf of the Class at the time of

10 filing.

11

85. MS has maintained a system and/or policies that are discriminatory,

12 excessively subjective, standardless, and/or arbitrary with respect to the distribution of accounts

13 and business opportunities which affect compensation and other terms and conditions of

14 employment. This system has an adverse impact on African American employees and is not, and

15 cannot be, justified by business necessity. Even if this system could be justified by business

16 necessity, less discriminatory alternatives exist and would equally serve any alleged necessity.

17

86. The class period for the Title VII race class is from December 14, 2005 to

18 present.

19

87. Plaintiffs request relief as hereinafter provided.

20

FIFTH CLAIM FOR RELIEF

42 U.S.C. § 1981

21

(On behalf of Plaintiff Curtis-Bauer and the Minority Class)

22 88. Plaintiffs incorporate the preceding paragraphs as alleged above.
23 89. This Claim is brought by Representative Plaintiff Curtis-Bauer on behalf of
24 herself and the Minority Class she represents.
25 90. As described herein, MS’s constitutes illegal intentional race, and/or color
26 discrimination with respect to the making, performance, modification, and termination of
27 contracts prohibited by 42 U.S.C. § 1981.
28

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1

91. The class period for the § 1981 race class is from October 12, 2002 to

2 present.

3

92. Plaintiffs request relief as hereinafter provided.

4

SIXTH CLAIM FOR RELIEF

42 U.S.C. § 1981

5

(On behalf of Plaintiff Williams and the African American Class)

6 93. Plaintiffs incorporate the preceding paragraphs as alleged above.
7 94. This Claim is brought by Representative Plaintiff Williams on behalf of
8 herself and the African American Class she represents.
9 95. As described herein, MS’s constitutes illegal intentional race, and/or color
10 discrimination with respect to the making, performance, modification, and termination of
11 contracts prohibited by 42 U.S.C. § 1981.
12 96. The class period for the § 1981 race class is from October 12, 2002 to
13 present.
14 97. Plaintiffs request relief as hereinafter provided.
15

SEVENTH CLAIM FOR RELIEF

16

(Gender Discrimination)

(California Fair Employment and Housing Act, Cal. Gov’t Code §§ 12940 et seq.)

17

(On behalf of Plaintiff Jaffe and the California Gender Subclass)

18 98. Plaintiffs incorporate the preceding paragraphs as alleged above.
19 99. This claim is brought on behalf of Plaintiff Daisy Jaffe and the California
20 Gender Subclass she represents.
21 100. As described herein, MS’s actions constitute gender discrimination in
22 violation of the California Fair Employment and Housing Act (FEHA). Plaintiff Daisy Jaffe
23 received a Right to Sue letter from the DFEH on April 12, 2006. The pendency of an EEOC
24 investigation into Plaintiff Jaffe’s charges tolls the time limit for filing a civil action pursuant to
25 the FEHA. Plaintiffs have timely complied with all prerequisites to sue.
26 101. The class period for the FEHA gender subclass is from November 1, 2004
27 to present.
28

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1

102. Plaintiffs request relief as hereinafter provided.

2

EIGHTH CLAIM FOR RELIEF

(Gender Discrimination)

3

(Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.)

(On behalf of Plaintiff Williams and the Michigan Gender Subclass) 4

5

103. Plaintiffs incorporate the preceding paragraphs as alleged above.

6

104. This claim is brought on behalf of Plaintiff Denise Williams and the

7 Michigan Gender Subclass she represents.

8

105. As described herein, MS’s actions constitute gender discrimination in

9 violation of Michigan’s Elliot-Larsen Civil Rights Act. Plaintiff Denise Williams has filed a

10 Charge of Discrimination with the Michigan Department of Civil Rights. Plaintiff has timely

11 complied with all prerequisites to sue on her own behalf and on behalf of the Subclass at the time

12 of filing.

13

106. The class period for the Elliot-Larsen Civil Rights Act gender subclass is

14 from October 12, 2003 to present.

15

107. Plaintiffs request relief as hereinafter provided.

16

NINTH CLAIM FOR RELIEF

(Race Discrimination)

17

(Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.)

(On behalf of Plaintiff Williams and the Michigan Race Subclass) 18

19

108. Plaintiffs incorporate the preceding paragraphs as alleged above.

20

109. This Claim is brought by the Representative Plaintiff Williams on behalf of

21 herself and the Michigan Race Subclass she represents.

22

110. As described herein, MS’s actions constitute race discrimination in

23 violation of Michigan’s Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq. Plaintiff

24 Williams has filed a charge of discrimination making classwide claims with the Michigan

25 Department of Civil Rights. Plaintiff has timely complied with all prerequisites to sue on her own

26 behalf and on behalf of the Subclass at the time of filing.

27

111. The class period for the Elliot-Larsen Civil Rights Act Race subclass is

28 from October 12, 2003 to present.

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1

112. Plaintiffs request relief as hereinafter provided.

2

TENTH CLAIM FOR RELIEF

(Age Discrimination)

3

(Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 et seq.)

(On behalf of Plaintiff Jaffe only) 4

5

113. Plaintiff Jaffe incorporates the preceding paragraphs as alleged above.

6

114. This claim is brought on behalf of Daisy Jaffe only.

7

115. As described herein, MS’s actions constitute age discrimination against

8 Plaintiff Jaffe in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§

9 621 et seq.

10

116. Plaintiff Jaffe has filed a timely charge with the EEOC making individual

11 claims of age discrimination and has received a Notice of Right to Sue from the EEOC. Plaintiff

12 has exhausted her administrative remedies on her own behalf with respect to this claim at the time

13 of filing.

14

117. Plaintiff Jaffe requests relief as hereinafter provided.

15

ELEVENTH CLAIM FOR RELIEF

(Age Discrimination)

16

(California Fair Employment and Housing Act, Cal. Gov’t Code §§ 12940 et seq.)

(On behalf of Plaintiff Jaffe only) 17

18

118. Plaintiff Jaffe incorporates the preceding paragraphs as alleged above.

19

119. This claim is brought on behalf of Daisy Jaffe only.

20

120. As described herein, MS’s actions constitute age discrimination against

21 Daisy Jaffe in violation of the California FEHA. Plaintiff Daisy Jaffe received a Right to Sue

22 letter from the DFEH on April 12, 2006. The pendency of an EEOC investigation into Plaintiff

23 Jaffe’s charges tolled the time limit for filing a civil action pursuant to the FEHA. Plaintiff has

24 timely complied with all prerequisites to sue.

25

121. Plaintiff Jaffe requests relief as hereinafter provided.

26

ALLEGATIONS REGARDING RELIEF

27

122. Plaintiffs and the Classes and Subclasses they seeks to represent have no

28 plain, adequate, or complete remedy at law to redress the wrongs alleged herein, and the

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1 injunctive relief sought in this action is the only means of securing complete and adequate relief.

2 Plaintiffs and the Classes and Subclasses they seek to represent are now suffering, and will

3 continue to suffer, irreparable injury from Defendant’s discriminatory acts and omissions.

4

123. MS’s actions have caused and continue to cause Plaintiffs and all Class and

5 Subclass members substantial losses in earnings and other employment benefits.

6

124. In addition, Plaintiffs, the Classes, and Subclasses suffer and continue to

7 suffer humiliation, embarrassment, and anguish, all to their damage in an amount according to

8 proof.

9

125. MS performed the acts herein alleged with malice or reckless indifference.

10 Plaintiffs, the Class and Subclass members are thus entitled to recover punitive damages in an

11 amount according to proof.

12

PRAYER FOR RELIEF

13

WHEREFORE, Plaintiffs, the Classes and Subclasses pray for relief as follows:

14

126. Certification of the case as a class action on behalf of the proposed Classes

15 and Subclasses;

16

127. Designation of Representative Plaintiffs Jaffe and Williams as

17 representatives of the Gender Class, designation of Representative Plaintiff Curtis-Bauer as the

18 representative of the Minority Class, designation of Representative Plaintiff Williams as the

19 representative of the African American Class, designation of Representative Plaintiff Jaffe as the

20 representative of the California Gender Subclass, designation of Representative Williams as the

21 representative of the Michigan Gender Subclass, and designation of Representative Williams as

22 the representative of the Michigan Race Subclass;

23

128. Designation of Representative Plaintiffs’ counsel of record as Class

24 counsel;

25

129. A declaratory judgment that the practices complained of herein are

26 unlawful and violate 42 U.S.C. §§ 2000e, et seq., 42 U.S.C. § 1981; the California FEHA, Cal.

27 Gov’t Code §§ 12940 et seq., and the Elliot-Larsen Civil Rights Act, M.C.L.A. § 37.2101, et seq.;

28

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1

130. A preliminary and permanent injunction against MS and its officers,

2 agents, successors, employees, representatives, and any and all persons acting in concert with

3 them, from engaging in each of the unlawful policies, practices, customs, and usages set forth

4 herein;

5

131. An order that MS institute and carry out policies, practices, and programs

6 that provide equal employment opportunities for all employees regardless of gender, race and

7 color, and that it eradicate the effects of its past and present unlawful employment practices;

8

132. An order restoring Plaintiffs Jaffe and Curtis-Bauer to their rightful

9 positions at MS, or in lieu of reinstatement, an order for front pay benefits;

10

133. Back pay (including interest and benefits) for Plaintiffs and individual

11 Class and Subclass members;

12

134. All damages sustained as a result of MS’s conduct, including damages for

13 emotional distress, humiliation, embarrassment, and anguish, according to proof;

14

135. Exemplary and punitive damages in an amount commensurate with MS’s

15 ability to pay and to deter future conduct;

16

136. Costs incurred herein, including reasonable attorneys’ fees to the extent

17 allowable by law;

18

137. Pre-judgment and post-judgment interest, as provided by law; and

19

138. Such other and further legal and equitable relief as this Court deems

20 necessary, just, and proper.

21

22

23

24

25

26

27

28

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1 Dated: August 17, 2007
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
720105.5

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
By: /s/ Kelly M. Dermody Kelly M. Dermody
Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423 Telephone: (615) 313-9000 Facsimile: (615) 313-9965
Adam T. Klein Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064
Attorneys for Plaintiffs

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

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1

DEMAND FOR JURY TRIAL

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Plaintiff hereby demands a trial by jury as to all issues so triable.

3 Dated: August 17, 2007
4
5

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

6

7

By: /s/ Kelly M. Dermody

8

Kelly M. Dermody

9

Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)

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LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

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Embarcadero Center West 275 Battery Street, 30th Floor

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San Francisco, CA 94111-3339 Telephone: (415) 956-1000

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Facsimile: (415) 956-1008

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Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN &

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BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650

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Nashville, TN 37219-2423 Telephone: (615) 313-9000

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Facsimile: (615) 313-9965

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Adam T. Klein Piper Hoffman (pro hac vice)

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Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP

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3 Park Avenue, 29th Floor New York, New York 10016

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Telephone: (212) 245-1000 Facsimile: (212) 977-4005

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James M. Finberg (State Bar No. 114850)

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ALTSHULER BERZON

177 Post Street, Ste. 300

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San Francisco, CA 94108

Telephone: (415) 421-7151

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Facsimile: (415) 362-8064

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Attorneys for Plaintiffs

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28

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SECOND AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Daisy Jaffe, Denise Williams, and Margaret

)

Benay Curtis-Bauer, on behalf of themselves )

and all others similarly situated,

)

)

Plaintiffs,

)

)

v.

)

)

Morgan Stanley & Co. Incorporated, formerly )

known as Morgan Stanley DW Inc.,

)

)

Defendant.

)

)

)

)

)

Case No. C-06-3903 (TEH) CLASS ACTION

SETTLEMENT AGREEMENT

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TABLE OF CONTENTS

Page

I. INTRODUCTION ....................................................................................................1 II. NATURE AND RESOLUTION OF THE CASE.....................................................1 III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT ..............................5
A. Definitions.........................................................................................5 B. Duration of the Settlement ................................................................8 C. Cooperation.......................................................................................9 D. Persons Covered by this Settlement Agreement ...............................9 IV. COURT APPROVAL/NOTICE AND FAIRNESS HEARING...............................9 A. Jurisdiction and Venue......................................................................9 B. Preliminary Approval......................................................................10 C. Notice and Settlement Hearing .......................................................10 V. RELEASE/BAR OF CLAIMS................................................................................15 A. Class Member Release ................................................................................15 B. Named Plaintiff Release..............................................................................15 VI. NO ADMISSION, NO DETERMINATION..........................................................17 VII. PROGRAMMATIC RELIEF .................................................................................18 A. Communications .............................................................................18 B. Hiring ..............................................................................................18 C. Branch Management/Mobility and Training...................................19 D. Account Distribution.......................................................................21 E. Development Opportunities ............................................................28 F. Complaint Process and Training .....................................................28 G. Appointments ..................................................................................29 H. General Non-Discrimination Provisions .........................................34 VIII. MONETARY RELIEF ...........................................................................................35 A. Settlement Fund ..............................................................................35 B. Administration by Trustee ..............................................................36
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TABLE OF CONTENTS (continued)

Page

C. Claims Filing Procedures for Settlement of Claims of Named Plaintiff and Class Members ...........................................................36
D. Allocation Formula .........................................................................38 E. Non-Admissibility of Fact of Award (or Non-Award) ...................41 F. Tax Treatment .................................................................................41 G. Morgan Stanley Has No Further Obligation, Liability or
Responsibility..................................................................................44 IX. MONITORING .......................................................................................................45
A. Data Collection ...............................................................................45 B. Monitoring System..........................................................................46 C. Reports ............................................................................................46 D. Meetings..........................................................................................46 X. ENFORCEMENT ...................................................................................................46 A. No Third Parties ..............................................................................46 B. Dispute Resolution ..........................................................................47 XI. CONFIDENTIALITY.............................................................................................47 A. Documents and Information Produced by Morgan Stanley
and Class Counsel ...........................................................................47 B. Return or Disposal of Confidential Documents and
Information......................................................................................47 XII. ATTORNEYS’ FEES AND EXPENSES OF CLASS COUNSEL........................49 XIII. GOVERNING LAW...............................................................................................50 XIV. OTHER CONDITIONS OF SETTLEMENT .........................................................50
A. Exhibits ...........................................................................................50 B. Notices to Counsel ..........................................................................50 C. Failure to Insist on Strict Compliance.............................................51 D. Settlement Agreement Binding .......................................................51 E. Modifications to this Agreement.....................................................51
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TABLE OF CONTENTS (continued)

Page

F. No Drafting Presumption ................................................................51 G. Dispute As To Meaning of Agreement Terms................................51 H. Interpretation of Terms ...................................................................52 I. Paragraph and Section Headings.....................................................52 J. Counterparts ....................................................................................52 K. Agreement Binding .........................................................................52

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I. INTRODUCTION Subject to approval by the United States District Court for the Northern District of
California (the “Court”), this Settlement Agreement (“Settlement Agreement,” “Settlement” or “Agreement”) sets forth the full and final terms by which Margaret Benay Curtis-Bauer (the “Named Plaintiff”), on behalf of herself and members of the Class defined herein, and Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. (“Morgan Stanley,” “Defendant,” “Firm,” or “Company”)1 have settled and resolved all claims that have been raised in the Second Amended Complaint filed by the Named Plaintiff on August 1, 2007. This Action and Settlement applies to African American and Latino Financial Advisors and Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley (“MS-GWMG”) and its predecessor(s). II. NATURE AND RESOLUTION OF THE CASE
A. After filing an administrative complaint with the United States Equal Employment Opportunity Commission (“EEOC”), Daisy Jaffe filed a Complaint with the Court, on June 22, 2006, on behalf of herself as an individual and on behalf of a nationwide class of women employees against Morgan Stanley, pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq., (“Title VII”), and for a California Class under California state law prohibiting sex discrimination. In addition to these class claims, Ms. Jaffe asserted an individual, non-class age discrimination claim.
1 Following the filing of the Complaint in June 2006, Morgan Stanley DW Inc. merged into Morgan Stanley & Co. Incorporated. The Named Plaintiff and the Class Members all work or worked as Financial Advisors or Registered Financial Advisor 1
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B. On October 12, 2006, Ms. Jaffe and Denise Williams filed an Amended Complaint against Morgan Stanley adding additional allegations that the Company had discriminated against Ms. Williams on the basis of her race in violation of Title VII, 42 U.S.C. § 1981 and Michigan state law with regard to several aspects of her employment. Ms. Williams also filed an administrative complaint with the EEOC in October of 2006. On December 5, 2006 Ms. Williams received a Notice of Right to Sue from the EEOC.
C. On August 2, 2007, Ms. Jaffe, Ms. Williams and Margaret Benay CurtisBauer filed a Second Amended Complaint in this action, in which Ms. Williams and Ms. Curtis-Bauer collectively alleged, among other things, on behalf of themselves and members of the Class defined herein, that African Americans and Latinos who are or were employed with MS-GWMG as Financial Advisors or Registered Financial Advisor Trainees have been and are afforded fewer business opportunities than comparable white Financial Advisors and Registered Financial Advisor Trainees, and that they experienced race and color discrimination in numerous aspects of their employment. The Named Plaintiff has further alleged, on behalf of herself and members of the Class defined herein, that aspects of her employment in which she has experienced race and color discrimination include, but are not limited to, career advancement, distribution of accounts, work assignments, compensation, and/or other terms and conditions of employment and/or termination.
The class-wide gender discrimination claims of Jaffe and Williams will be addressed in connection with the recently announced settlement of the nationwide Augst-
Trainees in what is now referred to as the Global Wealth Management Group. 2
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Johnson gender class action in the District of Columbia. Thus, Jaffe and Williams will no longer pursue their gender discrimination claims or seek certification of a class of female Morgan Stanley FAs in this matter.
D. Morgan Stanley denies the allegations in the administrative charges, the Complaint, the Amended Complaint and the Second Amended Complaint, and in connection therewith denies any liability under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §1981 as amended, or any other federal, state or local laws, and specifically denies that Morgan Stanley unlawfully discriminated against Plaintiff or Class Members on the basis of race or color, or that Plaintiff or Class Members are otherwise entitled to the relief requested.
E. This Settlement was reached under the supervision of experienced mediator Hunter Hughes, Esq. Counsel for the parties are experienced class action lawyers who retained Mr. Hughes for his expertise in mediating many complex class actions, including those involving race discrimination in employment. Mr. Hughes also has familiarity with Morgan Stanley’s practices through his work as mediator in the Augst-Johnson action, a related gender discrimination class action against Morgan Stanley. Mr. Hughes conducted multiple mediation sessions between the parties here, both in San Francisco and New York. At all times during this process, counsel bargained vigorously and at arms’ length on behalf of their clients.
F. In order to facilitate settlement discussions, the parties executed tolling agreements and stipulated to court ordered stays of the action for the time period through August 2, 2007, at which point the Second Amended Complaint in this Action was filed.
G. The parties to this Agreement have conducted a thorough examination and 3
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investigation of the facts and law relating to the subject matters set forth in the Second Amended Complaint and the claims set forth therein. In order to evaluate Settlement positions, Class Counsel requested and Morgan Stanley provided substantial documents (including vast amounts of data) from which Class Counsel conducted expert data analyses. This information, along with witness interviews and information regarding Morgan Stanley’s policies and practices, informed counsel regarding the strengths and weaknesses of their respective positions and provided them a full opportunity to assess the litigation risks presented in this case.
H. Class Counsel and counsel for Morgan Stanley recognize the costs and risks of prosecuting this litigation through class certification, summary judgment, trial, and appeal. Class Counsel believe that it is in the interest of all members of the Settlement Class to resolve finally and completely the potential claims of the Class Members against Morgan Stanley. Class Counsel believe that the terms of the Settlement Agreement are in the best interests of the Class and are fair, reasonable, and adequate. Morgan Stanley wishes to bring the litigation to a conclusion on the terms set forth in this Settlement Agreement.
I. Without any admission or concession by Morgan Stanley of any liability or wrongdoing with respect to the allegations in any administrative charge or in the Complaint, the Amended Complaint and the Second Amended Complaint, all released claims shall be finally and fully compromised, settled, and released subject to the terms and conditions of this Settlement Agreement, which were the subject of negotiation and agreement by the parties.
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III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT A. Definitions. In addition to terms identified and defined elsewhere in this
Settlement Agreement, and as used in this Settlement Agreement, the terms below shall have the following meanings:
1. “Action” means the lawsuit described above and the allegations contained in the Second Amended Complaint filed on August 1, 2007.
2. “Amended Complaint” means the First Amended Complaint filed in this Action on October 12, 2006.
3. “Augst-Johnson Action” or “Augst-Johnson matter” means Joanne Augst-Johnson, et. al. v. Morgan Stanley & Co. Incorporated, Case No. 1:06-CU-01142 (RWR) (D.D.C.).
4. “Claims Administrator” means Settlement Services, Inc. (“SSI”) which has been jointly designated by counsel for the parties to administer the Settlement Fund pursuant to Section VIII below and orders of the Court.
5. “Claim Form” means the form agreed to by the parties and attached to the Notice. The Claim Form must be submitted by eligible Class Members to the Claims Administrator as part of the claims process.
6. “Claimant” means a Class Member who has submitted a timely Claim Form.
7. “Class Counsel” means the law firms of Lieff Cabraser Heimann & Bernstein, LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP.
8. “Class Member” means any person who meets the criteria set forth in the definition of “Settlement Class” below.
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9. “Class Member Release” means the Release and Indemnification Agreement in the form agreed to by counsel for the parties, and attached hereto as Exhibit A, with respect to those Class Members other than Plaintiff Curtis-Bauer, as referenced in Section V.A. hereof.
10. “Complaint” means the Complaint filed in this Action on June 22, 2006.
11. “Court” means the United States District Court for the Northern District of California.
12. “Defendant” or “Morgan Stanley” or “Firm” or “Company” means Morgan Stanley & Co. Incorporated and its predecessors in interest.
13. “Defendant’s Counsel” means the law firm of Morgan, Lewis & Bockius LLP.
14. “Depository Bank” means Citibank or another bank jointly selected by counsel for the parties to receive, hold, invest, and disburse the Settlement Fund, subject to the direction of the Claims Administrator.
15. “Diversity Monitor” means the individual appointed to carry out the duties specified in Section VII.G.1. of this Agreement.
16. “Effective Date” means the date on which all of the following have occurred: (1) the Court has finally approved this Settlement Agreement and has signed and entered an order so indicating; (2) the Court has entered an Order and Judgment dismissing the Action with prejudice, with continuing jurisdiction limited to enforcing this Settlement Agreement; and (3) the time for appeal has either run without an appeal being filed or any appeal (including any requests for rehearing en banc, petitions for certiorari or appellate
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review) has been finally resolved. 17. “Final Approval” means the date on which the United States District
Court grants final approval of the Settlement. 18. “Financial Advisor” means a person employed by MS-GWMG as a
Financial Advisor. 19. “Lead Class Counsel” means Lieff Cabraser Heimann & Bernstein
LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP. 20. “MS-GWMG” means the Global Wealth Management Group of
Morgan Stanley & Co. Incorporated and its predecessor, Morgan Stanley DW Inc. 21. “Named Plaintiff Release” means the General Release and
Indemnification Agreement in the form, attached hereto as Exhibit B, agreed to by counsel for the parties with respect to Plaintiff Curtis-Bauer as referenced in Section V.B.
22. “Notice” means the Notice of Class Action, Proposed Settlement Agreement, and Settlement Hearing, which is to be mailed directly to Class Members, substantially in the form attached hereto as Exhibit C.
23. “Notice of Award” means the letter sent to each eligible Claimant specifying the amount of that Claimant’s award, as determined by the Special Master.
24. “Plaintiff” or “Named Plaintiff” means Margaret Benay CurtisBauer named in the caption of the Second Amended Complaint.
25. “Preliminary Approval” means the Order of the Court preliminarily certifying the Settlement Class and preliminarily approving this Settlement Agreement and the form of Notice to be sent to Class Members.
26. “Registered Financial Advisor Trainee” means a person employed 7
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by MS-GWMG as a registered financial advisor trainee who has not yet become a Financial Advisor.
27. “Second Amended Complaint” means the Second Amended Complaint filed in this Action on August 1, 2007.
28. “Settlement,” “Agreement,” and “Settlement Agreement” each mean the settlement as reflected in this Settlement Agreement.
29. “Settlement Class” or “Class” means the class that the parties jointly seek to have certified, solely for the purposes of this Settlement Agreement, which is defined as all African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in MS-GWMG or its predecessor at any time between October 12, 2002 and the date of preliminary approval.
30. “Settlement Fund” or “Fund” means the settlement monies transferred by Morgan Stanley to the Depository Bank, pursuant to this Settlement Agreement, including all interest earned thereon, to be held, invested, administered, and disbursed pursuant to this Settlement Agreement.
31. “Settlement Hearing” means the hearing at which the Court will consider final approval of this Settlement Agreement and related matters.
32. “Special Master” means the individual jointly selected by counsel for the parties, and approved by the Court, who is charged with carrying out the Special Master duties set forth in Section VIII of this Agreement.
B. Duration of the Settlement. The programmatic relief embodied in this Settlement Agreement and the agreements incorporated in it shall remain binding on the parties and their agents and successors for a five-year period following the Effective Date.
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C. Cooperation. The parties agree that they will cooperate to effectuate and implement all terms and conditions of this Settlement Agreement, and exercise good faith efforts to accomplish the terms and conditions of this Settlement Agreement. The parties agree to accept non-material and procedural changes to this Settlement Agreement if so required by the Court in connection with Final Approval of the Settlement, but are not obligated to accept any changes in the monetary amount of relief or the substantive programmatic relief provided for herein, or any other substantive change.
D. Persons Covered by this Settlement Agreement 1. Definition of “Settlement Class,” “Class” or “Class Members.”
Solely for purposes of Settlement and judicial approval of this Settlement Agreement, the parties stipulate to the certification of the following Settlement Class:
All African Americans and Latinos who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between October 12, 2002 and the date of preliminary approval. 2. Certification. The Class will be certified pursuant to Fed. R. Civ. P. 23(b)(2) and 23(b)(3). IV. COURT APPROVAL/NOTICE AND FAIRNESS HEARING A. Jurisdiction and Venue 1. The parties agree that the Court has jurisdiction over the parties and the subject matter of this Action and that venue is proper. The Court shall retain jurisdiction of this Action for five years from the Effective Date of the Settlement Agreement solely for the purpose of entering all orders and judgments authorized
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hereunder that may be necessary to implement and enforce the relief provided herein. B Preliminary Approval 1. Prior to execution of this Settlement Agreement, the parties have
agreed upon a form for written Notice of this Settlement Agreement to Class Members, subject to Court approval.
2. Within forty-five (45) days after the execution of this Settlement Agreement, the parties shall petition the Court for the following orders:
(a) preliminarily certifying the Settlement Class; preliminarily approving this Settlement Agreement; approving the Notice to be sent to Class Members describing the terms of the Settlement and informing them of their rights to submit objections and to opt out; and
(b) Pending Final Approval, preliminarily enjoining each member of the Settlement Class, including any members who make an irrevocable election to exclude themselves from the monetary relief provisions of the Settlement, from commencing, prosecuting or maintaining in any court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of the Court in connection with this Settlement Agreement. Effective as of the date specified for class members to opt out of the settlement, further enjoining any member of the Settlement Class who has not made an irrevocable election to exclude themself from the monetary relief provisions of the Settlement from commencing, prosecuting or maintaining either directly, representatively or in any other capacity any claim that is subsumed within the Settlement Agreement.
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1. MS-GWMG shall identify all Class Members and will provide to the Claims Administrator, within ten (10) days after Preliminary Approval of this Settlement Agreement, the name, social security number, and last known address of each Class Member. MS-GWMG will ask each Class Member who is a current employee of MSGWMG via electronic mail to confirm that the Firm has their current home address. The Claims Administrator shall utilize Class Members’ social security numbers only for the purpose of locating and identifying Class Members and shall keep those social security numbers confidential.
2. Within twenty (20) days after Preliminary Approval of the Settlement Agreement, the Claims Administrator will mail the Notice to each Class Member in the form agreed upon by the parties or such other form as approved by the Court. The parties intend to provide actual notice to each Class Member, to the extent practicable. The Claims Administrator shall mail a Claim Form to each Class Member at the same time the Notice is sent.
3. The Claims Administrator shall provide to Lead Class Counsel a list of those Class Members who have not been located and the Claims Administrator may engage third party vendors in order to locate Class Members. The Claims Administrator will maintain a log of its activities undertaken pursuant to this section.
4. Class Member objections to this Settlement Agreement must be submitted in writing, and must include a detailed description of the basis of the objection. Objections must be filed with the Court, with copies served on Lead Class Counsel and counsel for Morgan Stanley, within forty-five (45) days after the Notice is mailed to Class Members. No one may appear at the Settlement Hearing for the purpose of objecting to
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the Settlement Agreement without first having filed and served his or her objection(s) in writing within forty-five (45) days after the Notice was mailed to Class Members.
5. Any Class Member who wishes to opt out of the Settlement Class must mail to Lead Class Counsel and counsel for Morgan Stanley a written, signed statement that she or he is opting out, as set forth below. Lead Class Counsel shall file with the Court all opt-out statements that are timely received. The Settlement Class will not include those individuals who file and serve a timely opt-out statement, and individuals who opt out are not entitled to any monetary award under this Settlement Agreement. With respect to each such individual, the statute of limitations for them to assert any claims for individual relief will resume running on the postmark date when he or she mails his or her signed, written statement that he or she is opting out of the Settlement Class. The Notice mentioned above shall include the following language: “Any Class Member who wishes to opt out of the Settlement Class must mail a written, signed statement that he or she is opting out of the Settlement Class to Lead Class Counsel and counsel for Morgan Stanley at the addresses as listed in the Notice. To be effective, this opt-out statement must be received by Lead Class Counsel and counsel for Morgan Stanley on or before forty-five (45) days after the Notice is to be mailed to Class Members. To be effective, the opt-out letter and statement must include the language specified in the Notice confirming that the individual is aware that by opting out he or she will forego the opportunity to receive monetary benefits from this Settlement. Class Members who file opt-outs may rescind their opt-outs. To be effective, such rescissions must be in writing and must be received by either Lead Class Counsel, counsel for Morgan Stanley, or the Claims Administrator on or before sixty (60) days from the date that the Notice is to be mailed to the class.
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6. Upon Preliminary Approval, a briefing schedule and Settlement Hearing date will be set at the Court’s convenience. The parties’ Motion for Final Approval and for Certification of the Settlement Class will be due no earlier than thirty (30) days following the close of the objection and opt-out period, and the Settlement Hearing will be held no earlier than forty-five (45) days following the close of the objection and opt-out period.
7. The time periods referenced in this Section IV.C. are guidelines; actual dates will be inserted in the Preliminary Approval Order by the Court.
8. In the event that this Settlement Agreement does not become final and binding, no party shall be deemed to have waived any claims, objections, rights or defenses, or legal arguments or positions, including, but not limited to, claims or objections to class certification, and claims and defenses on the merits. Neither this Settlement Agreement nor the Court’s Preliminary or Final Approval hereof shall be admissible in any court regarding the propriety of class certification or regarding any other issue or subject (except for the purpose of enforcing this Settlement Agreement). Each party reserves the right to prosecute or defend this Action in the event that the Settlement Agreement does not become final and binding.
9. If the number of Class Members who have duly requested exclusion from the Settlement Class in the manner provided in the Court’s Preliminary Approval Order equals or exceeds the numbers set forth in Appendix 1 filed with the Court under seal concurrently with this Settlement Agreement, Morgan Stanley shall have the right, for thirty (30) days after the deadline for Class Members to opt out, to either withdraw from and fully terminate this Settlement Agreement by providing written notice to Class
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Counsel and the Court, or not to withdraw from this Settlement Agreement and take the opt out credit described below. Failure to provide written notice to withdraw within the aforesaid thirty (30) day period constitutes a waiver and termination of Morgan Stanley’s right to withdraw pursuant to this paragraph. The opt out credit to which Morgan Stanley is entitled shall be a pro rata share of the Settlement Fund based on the number of Class Members who have opted out in relation to the total number of Class Members. Regardless of the number of Class Members who opt out, Morgan Stanley shall also have no obligation to pay the employer’s share of taxes and contributions pertaining to such opt outs, as discussed in Section VIII.F.2 of this Settlement Agreement.
10. If Morgan Stanley exercises its option to withdraw from the Settlement or if this Settlement Agreement is not approved by the Court or for any other reason is terminated or fails to become effective in accordance with its terms (or, if following approval by this Court, such approval is reversed or substantively modified), the parties shall be restored to their respective positions that existed in this Action prior to entering into this Settlement Agreement; the terms and provisions of this Settlement Agreement shall have no force or effect and shall not be used in this Action or in any proceeding for any purpose; the Settlement Fund shall be returned to Morgan Stanley, including the interest earned by the Settlement Fund through the date of termination (after deducting all costs and expenses, including costs of providing Notice to Class Members, paid or incurred by the Claims Administrator as of the date of termination); any Judgment entered by the Court in accordance with the terms of this Settlement Agreement shall be treated as vacated, nunc pro tunc; and the litigation of the Action will resume as if there had been no Settlement Agreement, with no stipulated Class. The parties retain all rights,
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claims, and defenses as to class certification and otherwise as to any of the allegations asserted in this Action. This Settlement Agreement will not be considered an admission of liability by Morgan Stanley nor represent a cap on damages available to the Named Plaintiff or the Class. V. RELEASE/BAR OF CLAIMS
A. Class Member Release. All Class Members, other than the Named Plaintiff, as a condition of receiving a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator a Class Member Release in the form agreed to by counsel for the parties and attached hereto as Exhibit A. The Class Members, excluding the Named Plaintiff, will release all claims, known and unknown, existing through the date of preliminary approval, under any federal, state or local legal theory, for race and/or color discrimination based on allegations in the Second Amended Complaint, including facts or circumstances relating to compensation, production, account distribution, team or partnership formation, allocation of support or business opportunities or other allegations in the Second Amended Complaint. Termination and advancement into management claims for race and/or color discrimination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions-inforce, other production based performance related terminations and any claims for constructive discharge based on the same set of facts or circumstances shall be released but any other termination, advancement into management, constructive discharge or harassment claims shall not.
B. Named Plaintiff Release. The Named Plaintiff, as a condition of receiving 15
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a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator the Named Plaintiff Release in the form agreed to by counsel for the parties and attached hereto as Exhibit B. The Named Plaintiff Release is not a limited release of claims of race or color discrimination but instead releases all claims of any nature against Morgan Stanley under federal, state and local laws for any period up through the date of Preliminary Approval.
C. The Claims Administrator shall provide all Class Members with the Class Member Release at the time the Notice of Award is provided to them.
D. The terms of the Releases, attached hereto as Exhibits A and B, are a material part of this Settlement Agreement and are hereby incorporated as if fully set forth in the Settlement Agreement; if these Releases, attached hereto as Exhibits A and B, are not finally approved by the Court, or the Settlement Agreement cannot become effective for any reason and the Settlement set forth in this Settlement Agreement shall terminate as provided in Sections IV.C.8 and 10 of this Settlement Agreement, then the Named Plaintiff Releases and Class Member Releases shall terminate nunc pro tunc and be of no force and effect.
E. In the event that any Class Member does not execute and timely deliver a Class Member Release, or if any Named Plaintiff does not execute and timely deliver the Named Plaintiff Release, he or she shall be ineligible for, and forever barred from receiving, monetary relief under this Settlement Agreement, even if said Class Member or Named Plaintiff has not opted out.
F. Class Members who neither timely opt out nor timely file a Claim Form shall, upon the Effective Date, be ineligible to receive any monetary award pursuant to this
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Settlement Agreement and be deemed to have fully, finally and irrevocably waived, released and discharged Morgan Stanley from any and all claims of race discrimination, to the same extent as specified in Section V.A. above, whether known or unknown, actual or potential, from October 12, 2002 to the date of Preliminary Approval. VI. NO ADMISSION, NO DETERMINATION
A. This Settlement Agreement does not, and is not intended to constitute, nor shall it be deemed to constitute, an admission by any party as to the merits, validity or accuracy of any of the allegations, claims or defenses of any party in this case. The Class Members continue to assert the merits and validity of their claims under Title VII, 42 U.S.C. § 1981 or parallel state and local laws prohibiting race discrimination. By entering into this Agreement, Morgan Stanley does not admit or concede, expressly or impliedly, but denies that it has in any way violated Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Neither the Court nor any other court has made any findings or expressed any opinion concerning the merits, validity or accuracy of any of the allegations, claims or defenses in this case.
B. Nothing in this Settlement Agreement, nor any action taken in implementation thereof, nor any statements, discussions or communications, nor any materials prepared, exchanged, issued or used during the course of the mediation or negotiations leading to this Settlement Agreement, is intended by the parties to, nor shall any of the foregoing constitute, be introduced, be used or be admissible in any way in this case or any other judicial, arbitral, administrative, investigative or other proceeding of
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whatsoever kind or nature (including, without limitation, the results of the Claims Process established under this Settlement Agreement) as evidence of discrimination, retaliation or racial harassment or as evidence of any violation of Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Notwithstanding the foregoing, this Settlement Agreement may be used in any proceeding in the Court or in mediation or arbitration to enforce or implement any provision of this Settlement Agreement or implement any orders or judgments of the Court entered into in connection herewith. VII. PROGRAMMATIC RELIEF
A. Communications. MS-GWMG shall distribute its Non-Discrimination and Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and then on an annual basis via email from Morgan Stanley's CEO. Employees shall be required to submit an acknowledgment of receipt.
In addition, the President and COO of MS-GWMG shall issue a separate statement in support of the Policy and its underlying tenets. The Policy will be available on the Firm’s intranet site and will be incorporated into various other Firm policies including its Code of Conduct and its Internet and Electronic Communications Usage Policy.
The Non-Discrimination and Anti-Harassment Policy itself and the behaviors it seeks to promote and prevent shall be the subject of a mandatory training that all employees will be required to complete upon hire.
B. Hiring: MS-GWMG agrees to maintain its commitment to increase diversity in the Financial Advisor position including the representation rate of Latino and
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African American Financial Advisors. MS-GWMG agrees to maintain a dedicated position within MS-GWMG whose primary function is the sourcing and recruitment of qualified diverse candidates, including qualified Latinos and African Americans. MSGWMG further agrees to work with the Industrial Psychologists to identify and develop sourcing alternatives for qualified Latino and African American Financial Advisors, including but not limited to, developing relationships with organizations and educational institutions with high representation rates of Latinos and African Americans and historical connections with those communities. MS-GWMG agrees to continue to source qualified diverse candidates for its various entry level positions including the Summer Internship Program, the Richard B. Fischer Scholarship Program and/or successor or similar programs. Furthermore, MS-GWMG agrees to inform any third-party recruiter or executive search firm which it utilizes in its sourcing efforts that MS-GWMG expects that the vendor will present a diverse slate of candidates, where possible.
C. Branch Management/Mobility and Training. All available field sales management positions will be posted on MS-GWMG’s Internal Job Bank. These positions currently are titled: Branch Manager; Financial Advisor in Charge; Sales Manager; and Assistant Branch Manager. Minimum requirements for qualification for a management position are available on MS-GWMG’s internal job bank. All positions will be posted for a minimum of five (5) business days. Either the hiring manager or Human Resources will follow up with each applicant/candidate in a timely manner. In addition, MS-GWMG shall develop and implement a computerized system to generate an electronic mail notification to Financial Advisors who request to be informed of new management job postings.
MS-GWMG’s Learning and Development department has developed and 19
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implemented a comprehensive management assessment and development program. The program will provide candidates with a formal and transparent path to assessment and selection as branch managers, and provide field management with an established and tested protocol for selection of high-potential candidates by trained assessors.
MS-GWMG shall provide all management-level field personnel with diversity training no less than every other year. The format of such training may vary from jurisdiction to jurisdiction depending on the relevant legal requirements. However, all managers shall, at a minimum, be required to complete an interactive, customized, elearning training program. The positions to be trained are: Division Directors, Associate Division Directors, District Managers, Non-Producing and Producing Branch Managers, Financial Advisors in Charge, Risk Managers, Assistant Branch Managers, Sales Managers, and Service Managers.
In addition, Morgan Stanley agrees to provide diversity related training to field sales branch management which incorporates elements of the Implicit Association Test or similar tool agreed upon by the parties.
Morgan Stanley’s Learning and Development Department will make available additional study materials and resources to assist the Financial Advisor Trainees in obtaining the Series 7 registration.
Branch Manager compensation shall have a meaningful diversity component designed to measure and reward efforts at diversifying representation rates in the Financial Advisor position including the recruiting, training, and retaining qualified African American and Latino Financial Advisors. MS-GWMG agrees that it shall develop and implement a process whereby field sales management shall be required to report on their
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best efforts and results in the areas of sourcing, recruiting, mentoring, training, and

promoting a diverse workforce, including qualified African American and Latino Financial

Advisors and Registered Financial Advisor Trainees, and whereby field sales management

will be reviewed and held accountable by senior MS-GWMG management for these

efforts. The Diversity Monitor will review the diversity-related quarterly self-assessment

process for field sales management and the diversity component of the branch manager

compensation process.

D. Account Distribution

1.

Since 2002, MS-GWMG has utilized a “Power Ranking” system to

rank Financial Advisors on performance factors to determine the distribution of the

accounts of departing Financial Advisors. Under this Settlement, MS-GWMG has agreed

to make significant changes to the Power Ranking system, including reducing reliance on

historical factors and more heavily weighting criteria which reflect recent performance.

MS-GWMG has also agreed to automate the account distribution process based on the

revised Power Rankings and to limit the exceptions that can be made to the Power

Rankings. The revised Power Ranking factors are set forth in Appendix 2 filed under seal

along with this Settlement Agreement.

2.

Power Rankings

a. All Power Ranking factors that measure performance from

the previous twelve-month period will be adjusted to encompass a 12 month period

exclusive of absence for parental leave or short-term disability leave. For example, if a

Financial Advisor was on a leave of absence for four of the preceding 12 months, the

previous 12 months measure will instead count the last 12 months that the employee was 21

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active. b. The methodology for calculating the Power Rankings will be
provided to each Financial Advisor, including the name of each factor, an explanation of each factor, and how each factor is weighted. Upon hire, each Financial Advisor will be individually provided with the methodology of the objective measures utilized in the Power Ranking calculation and the manner in which calculations are completed and this will be available to all Financial Advisors electronically. MS-GWMG agrees to provide notice to Financial Advisors regarding any modification to the Power Ranking methodology.
c. MS-GWMG shall inform each Financial Advisor of his or her individual ranking at the time any distribution is made. The actual distribution of a departing Financial Advisor’s book will be made available to a Financial Advisor in the Branch confidentially upon request, and such communication shall include the rankings and (without identification of any particular Financial Advisor by name) the number of accounts and the assets distributed to each ranked Financial Advisor.
d. Review of Account Distributions. After a full calendar year has passed following implementation of these new Power Ranking criteria, the Industrial Psychologists to be appointed as set forth in Section VII.G.2 below will review how the process has been operating, including all exceptions and complaints. In addition, the Industrial Psychologists will also review annually the actual account distributions and related compensation data and the rankings of African American and Latino Financial Advisors on each of the individual factors and use such information in considering recommendations, if any, for changes to the Power Ranking formula. On an annual basis,
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the Industrial Psychologists shall report their findings and recommendations, if any, to the

Diversity Monitor. Lead Class Counsel and counsel for Morgan Stanley will reconvene to

discuss the findings of the Industrial Psychologists and whether further appropriate

changes to the Power Ranking criteria or distribution process should be made. The parties

recognize that the Power Ranking system is subject to the Settlement Agreement in both

this case and the Augst-Johnson case pending in the United States District Court for the

District of Columbia and that any material changes must be effectuated by mutual

agreement among all parties. Notwithstanding this requirement, Morgan Stanley may

petition the Courts for permission to modify the system if Lead Counsel in both cases do

not agree to a proposed modification.

3.

Account Distribution Policies

a. MS-GWMG senior management will issue a comprehensive

account distribution policy statement, which shall include policies covering the distribution

of the accounts of departing Financial Advisors, retiring Financial Advisors, departing

partners, and leads, call-ins, and walk-ins. The statement shall be issued via email to all

field employees and shall be posted on MS-GWMG’s intranet site and shall include a

prohibition on discrimination. In addition, MS-GWMG will train all current Branch

Managers on account distribution policies and procedures at the time the settlement

becomes effective, and will similarly train all new managers that are subsequently hired.

b. Financial Advisors are not eligible for account distributions

if they are: (1) currently on “heightened supervision” consistent with industry standards;

(2) subject to any regulatory action reportable as a ‘yes’ answer on Form U-4 questions

14C-G; (3) subject to discipline reported on Form RE-3 in the last 12 months; or (4) 23

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subject to any written performance or workplace conduct warning in the last 90 days. Lateral recruits to MS-GWMG will be ineligible for account distributions during their first 12 months of employment with MS-GWMG. New hire Financial Advisor Trainees are ineligible until they have successfully satisfied the preliminary production thresholds established under the Training Program. Financial Advisors who are on parental or shortterm disability leave at the time an account distribution is made will participate as if they were not on leave, and the distributed accounts will be handled in the same manner as their other accounts are handled while on leave.
c. Where an exception is made to the Power Ranking process because of client choice (which choice cannot be based on race or color) or business exigency (such as client service needs) each individual exception shall be approved by the Complex or District Manager or his/her designee in writing, including the legitimate business reasons for the exception. Records of all such exceptions shall be kept for purposes of monitoring policy compliance. In addition, except for a lateral recruit who receives a distribution in his or her first 12 months of employment because of business exigencies including staffing or qualifications issues not satisfied by other eligible Financial Advisors in the Branch, the Financial Advisor receiving a distribution through an exception will be disqualified from receiving other distributions of approximately equal asset value in the same or subsequent distributions. An individual Financial Advisor who does not receive a specific distribution as a result of an exception shall receive additional accounts in the same or subsequent distributions of approximately equal asset value.
d. MS-GWMG shall enhance its technology to allow its account distribution process to be computer automated, subject to branch manager review
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to ensure compliance with regulatory requirements. Account distributions will be made

through this automated process, subject to exceptions described in Section VII.D.3.c.

above. The results of all account distributions shall be stored and readily retrievable for

monitoring to ensure compliance with account distribution policies.

4.

Retiring Financial Advisors

a. The book of business formerly serviced by the retiring

Financial Advisor will be distributed through the Power Ranking system set forth in

Sections VII.D.1. and VII.D.2. above unless a Joint Production Arrangement/Agreement

(JPA) has been in effect for twenty-four (24) months or longer at the time of retirement.

b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the receipt of retiring

Financial Advisor’s books of business. These recommendations shall be made in

accordance with Section VII.G.2. below.

5.

Partnerships

a. Unless a JPA has been in effect for twenty-four (24) months

or longer at the time of departure, the book of business formerly serviced by the departing

Financial Advisor will be distributed through the Power Ranking system.

b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the partnerships. These

recommendations shall be made in accordance with Section VII.G.2. below.

c. For purposes of a Financial Advisor’s Power Rankings, MS-

GWMG will count partnership assets under management based on the percentage of the

commission split specified in the partnership agreement. 25

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6.

Leads, Call-ins, and Walk-ins

a. Each Branch Office shall implement a “Financial Advisor of

the Day” program. Pursuant to this program, all client prospects who either walk in or

telephone the branch and who are seeking a Financial Advisor shall be directed to the

Financial Advisor serving as the Financial Advisor of the Day. The daily assignments shall

be made alphabetically and announced on a monthly basis on or before the last day of the

preceding month. The monthly roster shall be openly posted in a conspicuous location

within the branch where all other Firm policies are posted. Participation among eligible

Financial Advisors shall be voluntary each month.

b. Each Financial Advisor of the Day shall complete a

“Financial Advisor of the Day Activity Log” that will detail all telephone calls and walk-in

prospects fielded by the Financial Advisor and the disposition of each. The logs shall be

maintained in a Branch Financial Advisor of the Day file for a three-year period.

c. If a prospect insists on speaking to the Branch Manager, the

Branch Manager will direct the individual to the Financial Advisor of the Day. If the

Financial Advisor of the Day is not qualified to handle the prospect’s account, the Branch

Manager shall ask the prospective client to interview a diverse slate of Financial Advisors,

to the extent available.

d. If the branch manager determines that the Financial Advisor

of the Day is not qualified to handle a walk-in prospect, the branch manager shall complete

an exception report detailing the reason why the Financial Advisor of the Day was not

selected.

e. All Financial Advisors and Registered Financial Advisor 26

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Trainees who have successfully satisfied the preliminary production thresholds established

under the Training Program shall be eligible to participate.

f. Unauthorized failure to perform Financial Advisor of the

Day obligations as designated shall render a Financial Advisor ineligible to participate in

the Program for a period of six (6) months. The branch shall maintain a list of those

Financial Advisors who elected not to participate or who otherwise were ineligible.

7.

Distribution Upon Transfer to Non-Producing Manager

Where no JPA has been in existence for at least 24 months at the time of transfer,

the book of business serviced by a producing manager who is transferred to a non-

producing branch manager position or a Financial Advisor who moves to a non-producing

sales manager position will be distributed through the Power Ranking system as set forth

in Sections VII.D.1-5. above.

8.

Disputes Concerning Account Distributions

The parties agree that if at any time during the term of this Settlement Agreement a

dispute shall arise between MS-GWMG and a Financial Advisor or a Registered Financial

Advisor Trainee concerning any account distribution, such dispute shall initially go

through the MS-GWMG’s internal complaint process which includes access to mediation

under MS-GWG’s alternative dispute resolution mechanism (“CARE”). As to claims

arising out of MS-GWMG, MS-GWMG agree to continue the existing tolling provisions

under the CARE program guidelines for the duration of this Agreement. However, nothing

herein shall prevent any Class Member or Named Plaintiff from individually pursuing any

legal claim not released under this Settlement through any applicable governmental agency

or court of law if he or she is otherwise entitled to do so. 27

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E. Development Opportunities. MS-GWMG shall work with the jointly appointed Industrial Psychologists to develop workplace initiatives designed to attract African Americans and Latinos to MS-GWMG as Financial Advisors, and to retain them and enhance their success, including targeted mentoring and training. Training and mentoring may include but is not limited to training conference calls, online courses, and in person seminars. The Industrial Psychologists shall make recommendations for increasing participation of African American and Latino Financial Advisors and Registered Financial Advisor Trainees in development opportunities. These recommendations will be made in accordance with Section VII.G.2. below.
MS-GWMG additionally agrees to conduct exit interviews of Financial Advisors and Registered Financial Advisor Trainees who terminate voluntarily in order to gain a better understanding as to the reason for the departures. MS-GWMG shall report the results of the exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees annually to the Industrial Psychologists, the Diversity Monitor and individuals within MS-GWMG responsible for hiring Financial Advisors and Registered Financial Advisor Trainees.
MS-GWMG agrees to maintain its commitment to the biannual Minority Business Exchange.
F. Complaint Process and Training. The complaint process, including MSGWMG’s prohibition against retaliation, as provided in the Non-Discrimination and AntiHarassment Policy, shall be communicated in writing to all Financial Advisors and Financial Advisor Trainees upon hire, and annually to all Financial Advisors. New hires shall be required to submit an acknowledgment of receipt of this communication.
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MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding compliance with state, federal, and local EEO laws; MS-GWMG’s anti-discrimination and harassment policies; and this Settlement Agreement.
MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding best practices for complaint investigation and resolution. Human Resources will be trained to treat all complaints or inquiries as confidentially as legally possible and to carry out their duties in a manner consistent with the law. In addition, Human Resources will implement controls designed to ensure that only non-complaining employees or managers with a need-to-know will be advised of a complaint or investigation. In all instances, upon being informed of a complaint or investigation, the non-complaining employees and managers so informed will be reminded of MS-GWMG’s policy against retaliation.
MS-GWMG will retain documents sufficient to show complaints by African American and Latino Financial Advisors and Registered Financial Advisor Trainees of race or color discrimination, race or color bias, and/or retaliation related to such complaints for the term of the Settlement Agreement.
G. Appointments. 1. Diversity Monitor. The parties shall jointly appoint a Diversity
Monitor, and have mutually agreed to the appointment of Fred W. Alvarez, Esq. The Diversity Monitor shall be external to and independent of the MS-GWMG, but will report directly to the COO and President of MS-GWMG. She or he shall monitor MS-GWMG’s efforts to carry out the terms of the Settlement Agreement. This shall include the
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following: a. The Diversity Monitor will receive monthly reports
regarding complaints of Financial Advisors and Registered Financial Advisor Trainees alleging race discrimination and resolution of investigations of such complaints through the CARE program or otherwise.
b. The Diversity Monitor will review quarterly reports regarding the branches in which Branch Managers have filed exception reports reflecting a deviation from the account distribution process.
c. The Diversity Monitor will review account distribution data, exception reports, and complaints to monitor policy compliance. If the Diversity Monitor identifies issues of potential non-compliance, the Diversity Monitor will inform MSGWMG and Lead Class Counsel. After consultation with Lead Class Counsel, MSGWMG will take appropriate corrective actions to address instances of non-compliance. MS-GWMG shall inform the Diversity Monitor and Lead Class Counsel of any such corrective action taken. Where potential non-compliance has been identified, the Diversity Monitor shall have the right to audit the activities in a branch, by reviewing documents, asking branch management to provide explanations and, if necessary, speaking to Financial Advisors in the branch. Nothing herein shall alter or restrict Lead Class Counsel’s right to enforce this Settlement Agreement under the Dispute Resolution provisions of this Settlement Agreement.
d. The Diversity Monitor will review the diversity-related quarterly self-assessment process for field sales management and the diversity component of the branch manager compensation process.
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e. The Diversity Monitor will monitor bi-annual training of management on EEO policies, and policies against discrimination and retaliation, and ensure that the training agreed to was implemented.
f. The Diversity Monitor will review how Human Resources handles investigations and the resolution process for inquiries and complaints.
g. The Diversity Monitor will review the annual results of the exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees.
h. The Diversity Monitor will provide reports to Lead Class Counsel and MS-GWMG at least semi-annually regarding the items monitored, including the analysis of the account distribution system. The Diversity Monitor shall report any incidents of potential material non-compliance with this Settlement Agreement to Lead Class Counsel and MS-GWMG and may do so on a more frequent basis than semiannually.
i. The Diversity Monitor will maintain records for the term of this Settlement Agreement.
2. Industrial Psychologists a. The parties shall jointly appoint Industrial Psychologists
Dr. Kathleen Lundquist and Dr. Irwin Goldstein, who shall work with MS-GWMG and Class Counsel to develop innovative, meaningful, novel, state of the art programs, conduct a job analysis of the Financial Advisor position and make recommendations:
• Concerning sourcing and recruitment strategies and programs to improve the representation rates of African Americans and Latinos in 31
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the Financial Advisor and Registered Financial Advisor Trainee positions; • For increasing the Series 7 passage rates of African American and Latino Financial Advisor Trainees. • For increasing the production and earnings of African American and Latino Financial Advisors, including policies and practices with respect to training, development, and mentoring; • For increasing participation of African American and Latino Financial Advisors in the receipt of retiring Financial Advisors’ books of business; • For increasing participation of African American and Latino Financial Advisors in partnerships; • Concerning policies and practices with respect to training, development, and mentoring, that will enhance opportunities for African American and Latino Financial Advisors and Financial Advisor Trainees. Training and development may include but is not limited to training conference calls, online courses, and in-person seminars; • Concerning a mentoring program for all Registered Financial Advisor Trainees and Financial Advisors; and • Concerning a system of semi-annual internal data collection and a monitoring process.
b. The Industrial Psychologists shall monitor the actual
implementation of the programs, policies and initiatives which MS-GWMG is obligated to
undertake by virtue of this Agreement and shall, on an annual basis, report MS-GWMG’s
process to the Diversity Monitor. In addition, the Industrial Psychologists shall monitor on
an annual basis the increase in the representation rates of African Americans and Latinos in
the Registered Financial Advisor Trainee and Financial Advisor positions and shall report
MS-GWMG’s progress to the Diversity Monitor. MS-GWMG shall report to the Diversity
Monitor on an annual basis the efforts made to recruit African American and Latino 32
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candidates to the Registered Financial Advisor Trainee and Financial Advisor positions including its sourcing and recruiting strategies, including but not limited to, targeted marketing and recruiting efforts, relationship/networking building with diverse organizations and schools, diversity career nights, internships and other sponsorships and scholarship programs.
c. The Industrial Psychologists shall present such recommendations to a senior executive panel of MS-GWMG consisting of: the Senior Learning & Development officer; the Senior Diversity officer; the Senior Employment Attorney; the Senior Human Resources officer; and a representative from National Sales Management. A copy of the recommendations will also be provided to Lead Class Counsel. If MS-GWMG does not agree with the recommendations, but Lead Class Counsel still thinks they should be implemented notwithstanding MS-GWMG’s objections, the Industrial Psychologists, along with Lead Class Counsel, will have the opportunity to present the recommendations to the COO and President of MS-GWMG or the then Head of National Sales for MS-GWMG. All recommendations of the Industrial Psychologists will be designed to advance the purposes of this Settlement Agreement consistent with MS-GWMG s business needs and objectives.
d. The Industrial Psychologists shall provide the Diversity Monitor with their findings of deviations from the account distribution system.
e. Subject to signing an appropriate confidentiality agreement, and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists described in Sections VII.G.1. and VII.G.2. above will have reasonable access to relevant documents, data, and MS-GWMG employees. The Diversity Monitor
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and the Industrial Psychologists will be compensated by MS-GWMG. 3. If it becomes necessary to replace the Diversity Monitor or either
Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement. H. General Non-Discrimination Provisions. Pursuant to MS-GWMG’s Non-
Discrimination and Anti-Harassment Policy, African American and Latino Financial Advisors and Registered Financial Advisor Trainees will enjoy terms and conditions of employment comparable to their white counterparts.
MS-GWMG shall assert the following general policies using a method agreed to by the parties:
1. Prohibition against discrimination on the basis of race or color in hiring, compensation and business opportunity allocations.
2. Prohibition against retaliation for reporting race or color discrimination, participating in the CARE program, participating in this or any discrimination settlement, filing a lawsuit or complaint with any outside agency or entity alleging race discrimination, or for refusing to participate in race discrimination.
3. The parties agree that it shall be a violation of this Settlement Agreement for a Morgan Stanley supervisor to retaliate against any Class Member for his or her participation in the prosecution of the allegations contained in the charge underlying this Settlement or in the Settlement itself. However, nothing in this Settlement will prevent a Class Member from pursuing whatever legal rights or remedies he or she otherwise may have with respect to any individual claim not covered by the claims released through this Settlement.
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VIII. MONETARY RELIEF A. Settlement Fund. No later than ten (10) days after the Effective Date
Morgan Stanley shall pay by wire transfer to the Depository Bank the sum of Sixteen Million Dollars ($16,000,000) plus an amount equal to 5% (per annum) on that $16,000,000, calculated from the date of Preliminary Approval until the money is transferred (“Settlement Sum”). The Total Settlement Sum will be placed in an interestbearing account titled in the name of MS-GWMG Financial Advisor Race discrimination Settlement Fund, a Qualified Settlement Fund organized and existing under the laws of the State of Florida, intended by the parties to be a “Qualified Settlement Fund” as described in Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-1, et seq. This payment is made in order to satisfy the claims of the Named Plaintiff and Class Members, as well as for other purposes identified in this paragraph. The monies so transferred, together with interest subsequently earned thereon, shall constitute the Settlement Fund. The Settlement Sum transferred into the Settlement Fund by Morgan Stanley shall, with the additional Employer Payroll Tax Payment described below, constitute the total Settlement cash outlay by Morgan Stanley in connection with: (1) the resolution of this matter; (2) this Settlement Agreement (and attachments); and (3) the dismissal of this Action. Except as provided in Section VIII.F.2. (i.e., employment taxes), this sum is inclusive of payment for: (a) all amounts paid to Class Members, including the Named Plaintiff, which are to be distributed pursuant to Section VIII.D. below; (b) all attorneys’ fees and costs awarded by the Court, including those in connection with securing court approval of the Settlement, the claims process and monitoring the Settlement Agreement, other than fees and costs awarded in connection with any
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successful proceeding to enforce the terms of this Settlement Agreement; (c) all costs in connection with the Settlement Fund including, but not limited to, those related to notice, claims processing, legal advice obtained by the Fund Administrator relating to the establishment of the Qualified Settlement Fund and tax treatment and tax reporting of awards to claimants, preparation of the Fund’s tax returns (and the taxes associated with such tax returns as defined below), and the Special Master’s fees and expenses; and (d) applicable federal, state and local income taxes, and all federal and state unemployment taxes required by law to be withheld and/or paid by Morgan Stanley. The Settlement Sum payment to the Settlement Fund does not include Morgan Stanley’s share of taxes or contributions (i.e., FICA, FUTA, SUTA and Medicare) which will be paid separately by Morgan Stanley to the Claims Administrator. Morgan Stanley shall, upon notice from the Claims Administrator as required in Section VIII.F.2. below, remit any required tax payment to the Claims Administrator. Nothing in the foregoing provisions of this Section, however, shall release MS-GWMG from expending the resources required to fulfill its responsibilities under this Settlement Agreement.
B. Administration by Trustee. The Claims Administrator shall serve as Trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling, management and distribution of the Settlement Fund. The Claims Administrator shall act in a manner necessary to qualify the Settlement Fund as a “Qualified Settlement Fund” under Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-1, et seq., and to maintain that qualification.
C. Claims Filing Procedures for Settlement of Claims of Named Plaintiff and Class Members. Class Members shall be entitled to submit their Claim Forms to the
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Special Master in accordance with the procedures set forth on the Claim Form. Any Class Member who previously released claims which would otherwise be covered by this Settlement Agreement, or who obtained a final judicial determination concerning claims that would otherwise be covered by this Settlement Agreement, is not eligible to receive a monetary award for those claims.
In order to be eligible for an award from the Settlement Fund, Class Members, including the Named Plaintiff, must submit a Claim Form which must be postmarked or actually received by the date established by the Court, unless good cause exists for a late claim form submission (which in no event may be submitted after the time that claims are paid from the Settlement Fund). The Claim Form shall be completed in its entirety to the extent applicable, including the survey of information to identify, among other things, individual evidence of alleged race discrimination.
The Claims Administrator will provide counsel for Morgan Stanley and MSGWMG’s payroll department with the names and social security numbers of Class Members who submitted Claim Forms (“Claimants”). The identity of the Claimants will not be disclosed to anyone at MS-GWMG other than counsel for Morgan Stanley and MSGWMG’s payroll department. The content of the Claims Form will be kept confidential.
After receiving the Claimant information discussed in the paragraph above, Morgan Stanley, through its counsel, will provide the Claims Administrator with the dates each Claimant was employed in the MS-GWMG as a Financial Advisor and/or a Registered Financial Advisor Trainee and earnings information for those Claimants. The Claims Administrator will provide that information to each Claimant. To the extent there is any disagreement relating to the accuracy of the information provided to the Claimants, the
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disagreement shall be resolved by the Special Master. The Special Master shall provide any corrected data to Plaintiff’s experts.
D. Allocation Formula. Class Members who submit a Claim Form will be eligible to receive monies based on a formula (the “Allocation Formula”) which will have two components: (1) an Earnings Regression Component developed by Class Counsel’s statistical experts and (2) a Claim Form Survey Component to be determined by a jointly selected Special Master. Eighty-five percent (85%) of the formula will be allocated to the Claim Form Survey Component, and fifteen percent (15%) of the formula will be allocated to the Earnings Regression Component.
1. Earnings Regression Component. A Financial Advisor Class Member, including the Named Plaintiff, whose annual earnings in any year during the liability period fall below an annual earnings curve which is set at two standard deviations above the mean earnings curve for white Financial Advisors (controlling for registration date and branch/office location), shall be eligible to receive a monetary award from the earnings regression component for that year.
Once it is determined that a claimant is eligible for a monetary reward from the earnings regression component for a particular year, the calculation of the monetary award will take into account the Claimant’s earnings during that year, and shall control for the following variables: a) the Claimant’s length of tenure at MS-GWMG as a Financial Advisor; b) the Claimant’s registration date; and c) the Claimant’s branch office location.
A separate, comparable earnings regression model will be conducted with respect to Registered Financial Advisor Trainees. The earnings regression component will be developed by Class Counsel’s expert with input from MS-GWMG.
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2. Claim Form Survey Component. The Special Master shall make allocations under the Claim Form survey component by assigning points based on Claimants’ responses to the Claim Form Survey. Points for the Claim Form Survey will be allocated as follows: (1) Each claimant will receive 1 point for each week worked between October 12, 2002 and December 3, 2007 as a Financial Advisor or a Registered Financial Advisor Trainee; (2) Claimants will be eligible for up to 50 points for responses to questions on the Claim Form about extreme emotional distress; and (3) Claimants will be eligible for up to 50 points for responses to questions on the Claim Form about termination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions-in-force, other production based performance related terminations and/or any claims for constructive discharge based on the same set of facts or circumstances. Based on information provided by MS-GWMG, the Special Master may modify allocations to be made under the Allocation Formula based on any data or information specific to the Claimant’s branch/office, including information regarding persons who previously signed a release that covered race and/or color discrimination claims. Subject to Court approval of the rationale and methodology upon which the proposed allocation and distribution are based, the Special Master will have sole and final authority as to the final distribution.
3. Special Master Authority to Determine Award Eligibility. a. Within a reasonable time period after the date specified for
receipt of the Claim Forms, the Special Master shall render a determination as to the monetary award, if any, that should be paid to each Claimant from the Settlement Fund.
b. The total amount of such awards shall not exceed the net 39
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amount of the Settlement Fund after all costs and Class Counsel’s attorney’s fees, as discussed in Section VIII.A. above, are considered.
c. After determining the proposed allocation, the Special Master shall submit a Report and Recommendation including the proposed allocation and distribution plan, together with a full explanation of the rationale and methodology upon which the proposed allocation and distribution are based, to the Court under seal for in camera review and approval of the rationale and methodology, with copies to Lead Class Counsel. If there is no objection or suggested modification by the Court within thirty (30) days following submission to the Court, the rationale and methodology shall be deemed approved, the allocation and distribution plan contained in the Report and Recommendation shall be deemed final, and the Special Master shall submit the distribution plan to the Claims Administrator to send the Notices of Awards to the eligible Claimants.
d. Following approval by the Court, the Claims Administrator shall send a Notice of Award to each eligible Claimant, along with the Named Plaintiff Release or a Class Member Release, whichever is applicable. Within a reasonable time period after receipt of an executed Named Plaintiff Release from the Named Plaintiff or an executed Class Member Release from a Class Member, the Claims Administrator shall send the Named Plaintiff or Class Member his or her award payment. If the Named Plaintiff does not execute and timely deliver an executed Named Plaintiff Release, or if any Class Members do not execute and timely deliver an executed Class Member Release to the Claims Administrator within six (6) months of the date the Notice of Award was mailed to them, they shall be ineligible for, and forever barred from receiving, monetary
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relief under this Settlement Agreement, even if said Named Plaintiff or Class Member has not opted out. Any undistributed funds that remain after six (6) months from the mailing of the Notice of Award due to unsubmitted releases shall be distributed to 501(c)(3) organizations advancing opportunities for African Americans and/or Latinos, including opportunities in the financial services industry, as jointly selected by Lead Class Counsel and MS-GWMG.
e. The Special Master shall maintain the distribution plan and allocation list for a period of five (5) years. Morgan Stanley shall have access to individual allocation amounts only upon written notice to Class Counsel and a showing of good cause (e.g., actual or threatened litigation by a Claimant). Any dispute as to whether good cause exists for such a requested disclosure shall be resolved through the Dispute Resolution process set forth in this Settlement Agreement.
4. Confidentiality Regarding Amount of Monetary Award. All Claimants receiving monetary awards will be asked to keep the amount of their award confidential.
E. Non-Admissibility of Fact of Award (or Non-Award). Except to the extent that it would constitute a set off in an action for damages claimed for any period covered by this settlement, neither the fact nor amount of an award, nor the fact of any non-award, shall be admissible in any other proceeding for any purpose other than to enforce the Named Plaintiff Release or a Class Member Release executed in accordance with this claims process, nor shall it be deemed to be a finding as to the merits of any claim.
F. Tax Treatment 41
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1.

Qualified Tax Status and Tax Responsibilities. The Settlement

Fund shall be established as a Qualified Settlement Fund within the meaning of Section

468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-

1, et seq., and shall be administered by the Claims Administrator under the Court’s

supervision. The parties shall cooperate to ensure such treatment and shall not take a

position in any filing or before any tax authority inconsistent with such treatment.

2.

Payment of Federal, State and Local Taxes. The parties recognize

that the awards to eligible Claimants will be subject to applicable tax withholding and

reporting, which will be handled as follows: The Claims Administrator shall serve as

trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling,

management, and distribution of the Settlement, including the handling of tax-related

issues and payments. Specifically, the Claims Administrator shall be responsible for

withholding, remitting and reporting of the Claimant’s share of the payroll taxes from the

Settlement Fund, and Morgan Stanley shall be responsible for the employer’s share of

payroll taxes as set forth in this section.

The Special Master will establish, for tax purposes, the allocation of the

payments made to Claimants to wages, interest, compensatory damages, or such other tax

character of such payout as the Special Master may determine, based on the principles set

forth in Treas. Reg. §1.468B-4 by reference to the claims pursuant to which distributions

are made and as if Morgan Stanley made such payments directly to Claimants.

The Claims Administrator shall inform Morgan Stanley in writing of the

employer’s share of all taxes or contributions (i.e., FICA, FUTA, SUTA, and Medicare)

required to be paid by Morgan Stanley. Morgan Stanley shall, within ten (10) business 42

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days of such notice, remit all such payments (net of the credit for opt outs, if any, as provided for in Section IV.C.9. above) to the Claims Administrator for payment to appropriate taxing authorities (“Employer Payroll Tax Payment”).
The Claims Administrator shall be responsible for the timely reporting and remitting of the Employer Payroll Tax Payment to the appropriate taxing authorities and shall indemnify Morgan Stanley for any penalty arising out of an incorrect calculation and/or interest with respect to late deposit of the same. Subject to the Claims Administrator’s obligation to comply with applicable laws, the parties anticipate that any amounts designated as interest shall not be subject to withholding and shall be reported, if required, to the IRS on Form 1099-INT. The amounts paid for emotional distress shall not be subject to withholding and shall be reported to the IRS on Form 1099-MISC.
Except with respect to the Employer Payroll Tax Payment, the Claims Administrator shall be responsible to satisfy from the Settlement Fund any and all federal, state and local employment and withholding taxes, including, without limitation, federal and state income tax withholding, FICA, FUTA, SUTA, Medicare and any state employment taxes. The Claims Administrator shall satisfy all federal, state, local, and other reporting requirements (including any applicable reporting with respect to attorneys’ fees and other costs subject to reporting), and any and all taxes, penalties and other obligations with respect to the payments or distributions from the Settlement Fund not otherwise addressed herein.
The Claims Administrator shall be responsible for procuring an executed Named Plaintiff or Class Member Release and Form W-9 from each Named Plaintiff prior to making any monetary allocations to such Named Plaintiff. The Claims Administrator
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shall be responsible for procuring an executed Class Member Release and Form W-9 from each eligible Claimant who is not a Named Plaintiff prior to making any monetary allocations to such Claimant.
All (i) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund, including any taxes or tax detriments that may be imposed on Morgan Stanley with respect to income earned for any period during which the Settlement Fund does not qualify as a “Qualified Settlement Fund” for federal and state income tax purposes (hereinafter “Settlement Fund Taxes”), and (ii) expenses and costs incurred in connection with the operation and implementation of this paragraph (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) any returns described herein or otherwise required to be filed pursuant to applicable authorities) (hereinafter “Settlement Fund Tax Expenses”), shall be paid out of the Settlement Fund. Further, Settlement Fund Taxes and Settlement Fund Tax Expenses shall be treated as a cost of the administration of the Settlement Fund. The parties hereto agree to cooperate with the Claims Administrator, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions set forth in this paragraph.
G. Morgan Stanley Has No Further Obligation, Liability or Responsibility. Other than Morgan Stanley’s responsibility for the employer’s share of payroll taxes as discussed in Section VIII.F.2. above, Morgan Stanley shall have no withholding, reporting or any other tax reporting or payment responsibilities with regard to the Settlement Fund or its distribution to Class Members. Moreover, Morgan Stanley shall
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have no liability, obligation, or responsibility for the administration of the Settlement Fund, the determination of any formulas for disbursement, or the disbursement of any monies from the Settlement Fund except for (1) its obligation to pay the Settlement Sum specified in Section VIII.A. no later than ten (10) days after the Effective Date; (2) its obligation related to the Employer Payroll Tax Payment as set forth in Section VIII.F.2.; and (3) its agreement to cooperate in providing information which is necessary for Settlement administration set forth herein.
H. The parties anticipate that MS-GWMG will spend approximately $7,500,000 on diversity efforts during the period of this Settlement Agreement, including programs for training, re-education, and other development programs for African American and Latino Financial Advisors and Registered Financial Advisor Trainees. This includes costs associated with settlement compliance, such as costs for the retention of the Industrial Psychologists, compensation for the Diversity Monitor, compensation and all expenses for employees who will be working on the diversity programs, and the costs associated with the Minority Business Exchange and other training and development programs for African American and Latino Financial Advisors and Registered Financial Advisor Trainees. IX. MONITORING
A. Data Collection. MS-GWMG will collect data which will include, but not be limited to: (1) sourcing, recruitment and hiring of Financial Advisors; (2) compensation of Financial Advisors; (3) partnerships between active Financial Advisors or partnerships between active and retiring Financial Advisors; (4) account distributions, defined to include all transfers of accounts from one Financial Advisor to another within MS-GWMG
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such as those of retiring and deceased Financial Advisors, not just the distribution of the accounts of departing Financial Advisor; (5) race or color discrimination complaints made by African American or Latino Registered Financial Advisor Trainees or Financial Advisors; (6) retention of Financial Advisors and (7) any other areas agreed upon by MSGWMG and Lead Class Counsel. MS-GWMG will include several variables in its data collection, including but not limited to, race, production and length of experience.
B. Monitoring System. MS-GWMG, with input from the Industrial Psychologists and consent from Lead Class Counsel, will create and implement a system of monitoring compliance with each policy described herein, including, without limitation, the account distribution policy using the Power Ranking methodology.
C. Reports. Lead Class Counsel will receive semi-annual reports from the Diversity Monitor regarding the data and information collected through the monitoring system including the analysis of the account distribution system and the other areas reviewed by the Diversity Monitor under this Agreement as specified in Section VII.G.1. herein.
D. Meetings. MS-GWMG and Lead Class Counsel will meet at least once every six (6) months regarding compliance, and may confer more frequently at their discretion or as dictated by information either side gathers. X. ENFORCEMENT
A. No Third Parties. Enforcement of this Settlement Agreement shall be prosecuted by Lead Class Counsel or counsel for Morgan Stanley only, not third parties. Lead Class Counsel shall meet and confer with counsel for Morgan Stanley prior to commencement of any enforcement proceedings.
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B. Dispute Resolution. The parties will work diligently and in good faith to resolve all disputes that may arise during the term of this Settlement Agreement concerning the rights, obligations and duties of the parties to this Settlement Agreement. In the event the parties cannot agree, the parties will attempt to resolve the dispute with the facilitation of a mutually selected mediator. If mediation fails to resolve the dispute(s) at issue, the parties agree to submit the dispute(s) to binding resolution by a mutually appointed arbitrator. Either party may seek Court review and reversal of the arbitrator’s decision on the basis of an abuse of discretion or error of law standard. XI. CONFIDENTIALITY
A. Documents and Information Produced by Morgan Stanley and Class Counsel. All proprietary and confidential documents or information that have previously been provided to either Morgan Stanley or Class Counsel as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provision of this Settlement Agreement shall, unless otherwise agreed, be treated as, and thereafter remain, confidential. Said documents and information shall not be disclosed to anyone other than the mediator, arbitrator or the Court in connection with any proceeding to enforce any provision of this Settlement Agreement. If such disclosure is deemed necessary by Class Counsel or Morgan Stanley, Class Counsel or the Company shall identify and disclose to the other party such documents and information deemed necessary to disclose at least ten (10) business days prior to filing such documents with the Court, and, if a party so requests, shall seek permission to file said documents with this Court under seal.
B. Return or Disposal of Confidential Documents and Information. All 47
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proprietary and confidential documents or information that have previously been provided to Class Counsel or to Morgan Stanley as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provision of this Settlement Agreement, shall be destroyed or returned to counsel as follows:
After the expiration of the five (5) year term of the Settlement all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley and designated “Confidential for Settlement Purposes Only” or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the expiration of the five (5) year term of the Settlement. Certification of such destruction shall be provided to counsel for the producing party.
The preceding paragraphs of this Section are intended to supersede those provisions of the “Confidentiality Agreement For Settlement Discussions” earlier executed by counsel for the parties that address the timing of the return or destruction of proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley. All other provisions of the “Confidentiality Agreement For Settlement Discussions” remain in full effect.
Nothing in the preceding paragraphs shall preclude any party from responding to a lawful discovery request, subpoena or court order; provided, however, that the party against whom such discovery is sought or such subpoena or order is directed agrees to
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provide immediate notice and a copy of same to counsel for the other parties to this Settlement Agreement.
In the event that this Settlement Agreement is terminated for any reason, all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley and designated “Confidential for Settlement Purposes Only” or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the date on which this Settlement Agreement is terminated. Certification of such destruction shall be provided to counsel for the producing party. XII. ATTORNEYS’ FEES AND EXPENSES OF CLASS COUNSEL.
As discussed above in Section VIII.A., all of Class Counsel’s fees and costs, including those in connection with securing Court approval of this Settlement Agreement, the claims process and any monitoring of this Settlement Agreement, shall be paid from the Settlement Fund, following approval of those attorney’s fees and costs by the Court. Morgan Stanley shall not oppose Class Counsel’s request for an award of attorneys’ fees and expenses in the amount of $800,000, plus $150,000 per year during the five-year term of the Settlement to cover future fees and expenses relating to monitoring and enforcing the Settlement, plus interest accruing on all fees and expenses from the date on which the Settlement is funded until such fees and expenses are disbursed to Class Counsel.
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XIII. GOVERNING LAW The parties agree that federal law shall govern the validity, construction and
enforcement of this Settlement Agreement. To the extent that it is determined that the validity, construction or enforcement of this Settlement Agreement or the Named Plaintiff Release or Class Member Release executed pursuant to its terms is governed by state law, the law of the State of California shall apply.
This Settlement Agreement, including the Exhibits hereto, contains the entire agreement and understanding of the parties with respect to the Settlement. This Settlement Agreement does not impose any obligations on the parties beyond the terms and conditions stated herein. Accordingly, this Settlement Agreement shall not prevent or preclude MSGWMG from revising its employment practices and policies or taking other personnel actions during the term of this Settlement Agreement so long as they are consistent with this Settlement Agreement.
Except as specifically provided for herein, this Settlement Agreement may not be amended or modified except with the express written consent of the parties. XIV. OTHER CONDITIONS OF SETTLEMENT
A. Exhibits. The Exhibits to this Settlement Agreement are material and integral parts hereof and are fully incorporated herein by this reference.
B. Notices to Counsel. All notices to counsel required or desired to be given under this Settlement Agreement shall be in writing and by overnight mail and e-mail to counsel for the respective parties (specifically, to Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein, LLP, James M. Finberg of Altshuler Berzon, LLP, Adam T. Klein
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of Outten & Golden, LLP, Alexa B. Pappas of Morgan Stanley, and Mark S. Dichter of Morgan, Lewis & Bockius LLP) at their respective addresses set forth below (or to such other address as any such party or counsel may designate in a notice). Notices sent to Alexa B. Pappas under this paragraph shall be addressed to Ms. Pappas at the following address: 2000 Westchester Avenue, Purchase, New York, 10577-2530.
C. Failure to Insist on Strict Compliance. The failure of any party to insist in any one or more instances on strict compliance with the terms and conditions hereof shall not be construed to be a waiver of remedies available with respect to any prior or subsequent breach.
D. Settlement Agreement Binding. This Settlement Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, dependents, executors, administrators, trustees, legal representatives, personal representatives, agents, successors and assigns; provided, however, that this Settlement Agreements shall not inure to the benefit of any third party.
E. Modifications to this Agreement. No material modifications to this Agreement may be made without prior Court approval.
F. No Drafting Presumption. All parties hereto have participated, through their respective counsel, in the drafting of this Settlement Agreement and, therefore, this Settlement Agreement shall not be construed more strictly against one party than another.
G. Dispute As To Meaning of Agreement Terms. In the event of any dispute or disagreement with respect to the meaning, effect or interpretation of this Settlement Agreement or any Exhibit hereto, or in the event of a claimed breach of the Settlement Agreement, the parties agree that such dispute will be resolved and adjudicated only in
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accordance with the dispute resolution provisions of Section X.B. of this Settlement Agreement.
H. Interpretation of Terms. Whenever possible, each provision and term of this Settlement Agreement shall be interpreted in such a manner as to be valid and enforceable.
I. Paragraph and Section Headings. Paragraph and section headings are for convenience of reference only and are not intended to create substantive rights or obligations.
J. Counterparts. This Settlement Agreement may be executed in counterparts. Each signed counterpart together with the others shall constitute the full Settlement Agreement.
K. Agreement Binding. As of the date on which counsel for the parties execute this Settlement Agreement, this Settlement Agreement will be binding in all respects, unless the Court fails to approve this Settlement Agreement and the Settlement Agreement is thus vacated.
[Remainder of this page intentionally left blank.]
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DATED: ______________, 2008

By: _______________________________ Kelly M. Dermody, Esq. Email: Kdermody@lchb.com Heather H. Wong, Esq. LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

By: _______________________________ James M. Finberg, Esq. E-mail: Jfinberg@altshulerberzon.com Eve H. Cervantez , Esq. ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

By: _______________________________ Adam T. Klein, Esq. Email: atk@outtengolden.com Piper Hoffman, Esq. Justin M. Swartz, Esq. OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
Attorneys for Plaintiffs and the Class

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DATED: _______________, 2008
By: _______________________________ Mark S. Dichter, Esq. Email: mdichter@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5299
By: _______________________________ L. Julius M. Turman, Esq, Email: jturman@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442.1361 Facsimile: (415) 442.1001
Attorneys for Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc.
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 Case 3:06-cv-03903-TEH Document 25-1 Filed 10/12/2006 Page 1 of 20

1 James M. Finberg (State Bar No. 114850) Kelly M. Dermody (State Bar No. 171716)
2 Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN &
3 BERNSTEIN, LLP 275 Battery Street, 30th Floor
4 San Francisco, CA 94111-3339 Telephone: (415) 956-1000
5 Facsimile: (415) 956-1008 email: jfinberg@lchb.com
6 email: kdermody@lchb.com email: hwong@lchb.com
7 Elizabeth A. Alexander (pro hac vice)
8 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
9 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423
10 Telephone: (615) 313-9000 Facsimile: (615) 313-9965
11 email: ealexander@lchb.com
12
13 Attorneys for the Plaintiffs

Adam T. Klein Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005 email: atk@outtengolden.com email: ph@outtengolden.com email: jms@outtengolden.com

14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

16

SAN FRANCISCO / OAKLAND DIVISION

17 DAISY JAFFE and DENISE WILLIAMS
18 on behalf of themselves and all others similarly situated,
19 Plaintiffs,
20 v.
21
22 MORGAN STANLEY DW, INC.,

23

Defendant.

24

25

26

Case No. C-06-3903 TEH
FIRST AMENDED CLASS ACTION COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND DAMAGES FOR VIOLATIONS OF TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, 42 U.S.C. §§ 2000e et seq., THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV’T CODE §§ 12940, et seq. and the ELLIOT-LARSEN CIVIL RIGHTS ACT, M.C.L.A. §§ 37.2101 et seq.
DEMAND FOR JURY TRIAL

27

28

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FIRST AMENDED CLASS ACTION COMPLAINT CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 25-1 Filed 10/12/2006 Page 2 of 20

1

Individual and Representative Plaintiffs Daisy Jaffe and Denise Williams (“Plaintiffs”) on

2 behalf of themselves and all others similarly situated, allege, upon personal knowledge as to

3 themselves and upon information and belief as to other matters, as follows:

4

NATURE OF THE CLAIM

5

1. Defendant Morgan Stanley DW, Inc. (hereinafter “MSDW” or “the

6 Company”) is a retail financial services firm that discriminates against female Financial Advisors

7 on the basis of gender with respect to business opportunities, compensation, and other terms and

8 conditions of employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§

9 2000e et seq., the California Fair Employment and Housing Act, Cal. Gov’t Code §§ 12940 et seq

10 and the Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.

11

2. The violations are systemic, constituting a pattern and practice that

12 pervades the corporate culture of MSDW. They are not isolated or exceptional incidents, but

13 rather the regular and predictable result of Defendant’s policies and practices. Put simply,

14 MSDW’s policies and practices with regard to the distribution of the business opportunities and

15 investment accounts under its control have the effect, and have been undertaken with the purpose,

16 of denying equal opportunities for compensation to qualified female Financial Advisors.

17

3. MSDW generally pays its Financial Advisors (also called “FAs” or

18 “brokers”) on a commission basis—a percentage of the revenue generated by the investment

19 accounts assigned to the FA.

20

4. FAs acquire investment accounts through “leads” and “referrals” (e.g.,

21 when a Financial Advisor is told of a potential client, the FA contacts the potential client, and the

22 FA enrolls the potential client as a MSDW customer); by transfers from one Financial Advisor to

23 another (e.g., when another FA moves to another brokerage firm, retires or leaves the business);

24 through partnerships with other Financial Advisors, and through “walk-ins” and “call-ins” (e.g.,

25 when a potential client calls or walks into the branch and inquires about opening an account).

26

5. MSDW has implemented company-wide policies and practices for the

27 distribution of accounts, leads, referrals, partnership opportunities, walk-ins, call-ins, and other

28 business opportunities that delegate substantial discretion to MSDW’s virtually all-male Branch

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1 Managers. MSDW Branch Managers have extraordinary discretion to distribute accounts and

2 business opportunities as they choose, allowing their gender stereotypes and the company-wide

3 culture of gender discrimination to influence their decisions. As a result, it has been MSDW’s

4 practice for years to distribute accounts and other business opportunities to male Financial

5 Advisors in numbers disproportionate to those distributed to similarly-situated female Financial

6 Advisors.

7

6. Because Financial Advisors obtain so many accounts through this process,

8 rather than on the FAs’ own initiative, the distribution of accounts and the allocation of business

9 opportunities are substantial factors affecting the compensation of MSDW Financial Advisors.

10

7. These discriminatory policies and practices intentionally and systematically

11 disadvantage female Financial Advisors at MSDW and prevent them from fairly competing for

12 business opportunities and higher compensation.

13

8. As troubling as these discriminatory policies and practices are, more

14 disturbing still is the cavalier way in which MSDW treats the subject of gender discrimination

15 against its female Financial Advisors. While MSDW says, “We focus recruiting efforts on

16 women and provide career development programs including internal women’s conferences led by

17 senior women executives,” these statements of inclusion are illusory in light of MSDW's

18 exclusionary practices.

19

9. Accordingly, this class action is brought by female Financial Advisors on

20 behalf of themselves individually and all similarly-situated female Financial Advisors in the

21 United States against whom MSDW has discriminated on the basis of gender. This action seeks

22 to end MSDW’s discriminatory policies and/or practices and to make the Plaintiff class whole by

23 requesting the following remedies: injunctive relief to remedy systemic gender discrimination at

24 MSDW; an award of back pay and front pay; and compensatory and punitive damages.

25

JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT

26

10. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331.

27

11. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b). Members

28 of the Plaintiff class reside in California and throughout the United States. Defendant MSDW is a

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1 Delaware corporation, headquartered in New York, and licensed to do business in California. It

2 has branch offices throughout California and this District. Many of the acts complained of

3 occurred in this State and this District and gave rise to the claims alleged.

4

12. Assignment to the San Francisco/Oakland Division of this Court is proper

5 because Plaintiff Daisy Jaffe resides within this Division and many of the acts complained of took

6 place in this Division.

7

PARTIES

8

13. Plaintiff Daisy Jaffe is a female resident of Hillsboro, California. She was

9 employed as a Financial Advisor in the San Mateo, California office of MSDW from on or about

10 August 1982 until August 11, 2005. During the course of her employment as a Financial Advisor

11 at MSDW, MSDW denied Ms. Jaffe business opportunities on the basis of her gender and age

12 that directly impacted her compensation. MSDW wrongfully terminated Ms. Jaffe because she is

13 female and over the age of 40.

14

14. Plaintiff Denise Williams is a female resident of Sylvania, Ohio. She is

15 currently employed as a Financial Advisor in the Detroit, Michigan office of MSDW. Her

16 employment as a Financial Advisor at MSDW in Detroit began in March 2004. During the

17 course of her employment, MSDW has denied Ms. Williams business opportunities on the basis

18 of her gender and race that directly impacted her compensation.

19

15. MSDW is a wholly-owned subsidiary of Morgan Stanley.

20

16. Morgan Stanley is a global financial firm that provides brokerage and

21 investment banking management services to corporations, governments and individuals around

22 the world. It maintains leading market positions in each of its business segments – Institutional

23 Securities, Retail Brokerage, Asset Management and Discover (Credit Services). Morgan Stanley

24 employs approximately 53,870 employees worldwide. It is a Fortune 500 company doing

25 business in 30 countries and is one of the largest financial institutions in the United States. It

26 recently reported annual revenues of $52.1 billion, a net income of $4.9 billion and assets of

27 $898.5 billion. As of March 17, 2006, Morgan Stanley had a market value of $64.7 billion.

28

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1

17. MSDW is the retail broker-dealer subsidiary of Morgan Stanley. MSDW

2 provides comprehensive financial services to clients through a network of approximately 9,500

3 Financial Advisors with over 530 global locations, including 485 U.S. retail locations. As of

4 November 30, 2005, MSDW had $617 billion in client assets.

5

CLASS ACTION ALLEGATIONS

6

18. Plaintiffs Jaffe and Williams bring this Class Action pursuant to Fed. R.

7 Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a Class of all female Financial Advisors employed by

8 MSDW in the United States at any time from August 5, 2003 to the present. Plaintiff Jaffe also

9 brings this Class Action pursuant to Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a

10 Subclass of all female Financial Advisors employed by MSDW in California at any time from

11 November 1, 2004 to the present. Plaintiff Williams brings this action pursuant to Fed. R. Civ. P.

12 23(a), (b)(2) and (b)(3) on behalf of a Subclass of female Financial Advisors employed by

13 MSDW in Michigan at any time from December 13, 2005 to the present. Plaintiffs reserve the

14 right to amend the definitions of the Class and Subclass based on discovery or legal

15 developments.

16

19. Plaintiffs are members of the Class and/or Subclasses they seek to

17 represent.

18

20. The members of the Class and Subclasses identified herein are so

19 numerous that joinder of all members is impracticable. As of the filing of this Complaint,

20 MSDW has approximately 9,500 Financial Advisors. Although the precise number of female

21 Financial Advisors is currently unknown, it is far greater than can be feasibly addressed through

22 joinder.

23

21. There are questions of law and fact common to the Class and Subclass, and

24 these questions predominate over any questions affecting only individual members. Common

25 questions include, among others: (1) whether MSDW’s policies or practices discriminate against

26 female Financial Advisors; (2) whether MSDW’s policies or practices violate Title VII, the

27 California Fair Employment and Housing Act and/or Michigan’s Elliot-Larsen Civil Rights Act;

28

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1 and (3) whether equitable remedies, injunctive relief, compensatory, and punitive damages for the

2 Class are warranted.

3

22. The Representative Plaintiffs claims are typical of the claims of the Class

4 and Subclasses.

5

23. The Representative Plaintiffs will fairly and adequately represent and

6 protect the interests of the members of the Class and Subclasses. Plaintiffs have retained counsel

7 competent and experienced in complex class actions, employment discrimination litigation, and

8 the intersection thereof.

9

24. Class certification is appropriate pursuant to Fed. R. Civ. P. 23(b)(2)

10 because MSDW has acted and/or refused to act on grounds generally applicable to the Class and

11 Subclasses, making appropriate declaratory and injunctive relief with respect to Plaintiffs and the

12 Class and Subclasses. The Class and Subclass members are entitled to injunctive relief to end

13 MSDW’s common, uniform, unfair and discriminatory policies and practices.

14

25. Class certification is also appropriate pursuant to Fed. R. Civ. P. 23(b)(3)

15 because common questions of fact and law predominate over any questions affecting only

16 individual members of the Class and Subclasses, and because a class action is superior to other

17 available methods for the fair and efficient adjudication of this litigation. The Class members

18 have been damaged and are entitled to recovery as a result of MSDW’s common, uniform and

19 discriminatory policies and practices. MSDW has computerized account data, payroll and

20 personnel data that will make calculation of damages for specific Class and Subclass members

21 relatively simple. The propriety and amount of punitive damages are based on the conduct of the

22 Defendant, making these issues common to the Class and Subclasses.

23

GENERAL POLICIES OR PRACTICES OF DISCRIMINATION

24

26. The denials and abridgments of employment opportunities suffered by the

25 Representative Plaintiffs are part of a general policy or practice of discrimination on the basis of

26 gender in employment that has existed at MSDW throughout the relevant time period. These are

27 not isolated examples of employment practices or individual decisions. On the contrary, these

28

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1 incidents are representative of MSDW’s systematic discrimination against female Financial

2 Advisors in favor of male Financial Advisors.

3

27. Because virtually all indicia of success, advancement, and achievement at

4 MSDW are based on the total dollar amount of the assets a Financial Advisor manages or on the

5 amount or revenue he or she has produced, the ability to acquire new and lucrative accounts is

6 essential to a Financial Advisor’s success in the business. Titles at MSDW are also based on

7 gross production, total assets, or both. For example, officer titles, such as “First Vice President”

8 are awarded when a Financial Advisor reaches at least $500,000 in gross production in the course

9 of a year. First

10

28. MSDW’s nationwide account distribution policies and practices (as well as

11 its policies and practices for distributing other business opportunities) discriminate against

12 women. They permit excessive subjectivity by Branch Office Managers and Sales Managers in

13 account assignment and the allocation of business opportunities. This is a uniform practice across

14 MSDW offices. Thus, Branch Office Managers and Sales Managers distribute accounts,

15 referrals, leads, call-ins, walk-ins, and other business opportunities to the FAs based on the

16 Branch Office Managers’ and Sales Managers’ biased personal preferences.

17

29. By entrusting Branch Office Managers and Sales Managers, virtually all of

18 whom are men, with undue discretion in these matters, MSDW maintains a system whereby the

19 Branch Office Managers and Sales Managers apply their own personal preferences and biases in

20 making distribution decisions in a way that systematically disadvantages women and limits their

21 compensation.

22

30. MSDW has implemented policies or practices that have denied or restricted

23 the availability of business opportunities, compensation, and other favorable employment

24 conditions to qualified female Financial Advisors. Such discriminatory policies or practices

25 include, without limitation:

26

a. Systematically discriminating against women in allocating accounts

27 and business opportunities that impact their opportunities for increased compensation, including,

28

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1 but not limited to, leads, call-ins, walk-ins, accounts from departing or retiring brokers’ books,

2 and other sources of business;

3

b. Establishing and maintaining arbitrary and subjective policies or

4 systems regarding business allocation and account distribution that have had the effect of denying

5 compensation to qualified women;

6

c. Relying upon unweighted, subjective, gender-based and/or arbitrary

7 criteria utilized by a nearly all-male managerial workforce in making business allocation

8 decisions that directly impact FAs’ compensation;

9

d. Denying women opportunities to increase their commissions and

10 other earnings;

11

e. Maintaining a discriminatory and gender-biased corporate culture;

12 and

13

f. Making employment decisions based on gender stereotypes.

14

CLAIMS OF REPRESENTATIVE PLAINTIFF JAFFE

15

31. Plaintiff Daisy Jaffe worked as a Financial Advisor from approximately

16 August 1982 to August 11, 2005 in the San Mateo, California office of MSDW. During the

17 course of her employment, MSDW denied her compensation, business opportunities, titles and

18 other conditions of employment that it made available to similarly-situated male Financial

19 Advisors.

20

32. In what MSDW called a “reduction in force,” it terminated Ms. Jaffe’s

21 employment on August 11, 2005. Morgan Stanley unlawfully terminated Ms. Jaffe because she is

22 a female and is over 40.

23

33. Since the beginning of her employment with MSDW, MSDW has denied

24 Ms. Jaffe compensation that it made available to similarly-situated male Financial Advisors.

25 MSDW routinely distributed business opportunities, including accounts from departing and

26 retiring brokers, referrals, leads, call-ins and walk-ins, and potential clients, to male Financial

27 Advisors, rather than to female Financial Advisors. As a result of the inequitable and

28 discriminatory distribution of accounts and account prospects, female Financial Advisors have

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1 diminished income potential and diminished actual income as compared to similarly-situated

2 male employees. MSDW has also favored younger Financial Advisors in account distribution

3 and the allocation of business opportunities. For example, in 2005, MSDW distributed almost all

4 the accounts of a retiring Financial Advisor to male Financial Advisors who were younger than

5 Ms. Jaffe and who had no more qualifications than she. Similarly, MSDW distributed almost all

6 the accounts of two other departing Financial Advisors to younger, male Financial Advisors who

7 were no more qualified than Ms. Jaffe.

8

34. During the course of her employment, MSDW also did not allocate any

9 significant walk-in or call-in business to Ms. Jaffe, while it did allocate such business to

10 similarly-situated younger male Financial Advisors. MSDW denied Ms. Jaffe these opportunities

11 due to her gender and age.

12

35. MSDW also discriminated against Ms. Jaffe as an individual based on

13 gender by denying her desirable office assignments. At the same time, it provided desirable

14 office assignments to similarly-situated male Financial Advisors. MSDW did not permit Ms.

15 Jaffe to have a desirable upstairs office, where the offices of similarly-situated male broker were

16 located. Similarly, MSDW denied Ms. Jaffe’s request to relocate to the Palo Alto office after the

17 San Mateo office was evacuated in October 2004 due to a flood. MSDW permitted similarly-

18 situated male Financial Advisors to relocate while it forced Ms. Jaffe to work from home. By

19 discriminating against her with respect to these terms and conditions of her employment, MSDW

20 diminished the amount of Ms. Jaffe’s compensation.

21

36. By denying compensation to Ms. Jaffe that it made available to similarly-

22 situated male Financial Advisors, MSDW has also denied her the ability to reach earnings tiers

23 with prestigious titles and greater income opportunities, which MSDW awarded based on a

24 Financial Advisor’s level of compensation.

25

37. MSDW terminated Ms. Jaffe’s employment due to the fact that she is

26 female and over the age of 40. At the time she was terminated, she held the title of First Vice

27 President. This title was given to her because her annual production was at least $500,000. At

28 the time MSDW terminated Ms. Jaffe, similarly-situated men (including younger men) with

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1 fewer qualifications than she were not terminated. MSDW’s stated reason for her termination at

2 the time was that her production levels were not adequate. Ms. Jaffe’s production levels were

3 diminished, however, only because MSDW discriminated against her with respect to account

4 distribution and business opportunities, and through its refusal to permit her to relocate to a

5 working office in 2004.

6

38. On or about November 1, 2005, Ms. Jaffe filed a charge of discrimination

7 with the California Department of Fair Employment and Housing (“DFEH”) and the Equal

8 Employment Opportunity Commission (“EEOC”). On April 12, 2006, she received a Notice of

9 Right to Sue from the DFEH. On June 22, 2006, she received a Notice of Right to Sue from the

10 EEOC. Her charge and Notices of Right to Sue from the EEOC and DFEH are attached to this

11 Complaint as Exhibit A and are incorporated herein by reference.

12

CLAIMS OF REPRESENTATIVE PLAINTIFF DENISE WILLIAMS

13

39. Plaintiff Denise Williams has worked as a Financial Advisor since March

14 2004 in the Detroit, Michigan office of MSDW. Ms. Williams is a current employee in that

15 office. During the course of her employment, MSDW denied her compensation, business

16 opportunities, corporate-officer titles and other conditions of employment that it made available

17 to similarly-situated male, non-minority Financial Advisors.

18

40. Since the beginning of her employment with MSDW, MSDW has denied

19 Ms. Williams compensation that it made available to similarly-situated male, non-minority

20 Financial Advisors. MSDW routinely distributed business opportunities, including accounts from

21 departing and retiring brokers, referrals, leads, call-ins and walk-ins, and potential clients, to

22 male, non-minority Financial Advisors, rather than to Ms. Williams. As a result of the

23 inequitable and discriminatory distribution of accounts and account prospects, Ms. Williams had

24 diminished income potential and diminished actual income as compared to similarly-situated

25 male, non-minority employees.

26

41. On or about November 2005, MSDW gave a male, non-minority Financial

27 Advisor with fewer qualifications that Ms. Williams a group of accounts from a senior broker.

28 MSDW did not provide Ms. Williams with similar account distributions.

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1

42. Also, since approximately October 2005, a number of Financial Advisors

2 have resigned from the Detroit office of MSDW, including one who resigned in approximately

3 May or June 2006. MSDW distributed accounts of greater value from these brokers’ books of

4 business to a male, non-minority Financial Advisor who is similarly-situated to Ms. Williams

5 than it distributed to her. In some cases, MSDW gave Ms. Williams no accounts from these

6 departing brokers.

7

43. Also, while a similarly-situated male, non-minority broker was permitted to

8 enter into a lucrative partnership with a senior broker, Ms. Williams’ Branch Office Manager told

9 her that no one wanted to enter a partnership with her.

10

44. By discriminating against her with respect to these and other business

11 opportunities, MSDW diminished Ms. Williams’ compensation. MSDW denied Ms. Williams

12 these opportunities due to her gender and race.

13

45. Ms. Williams was also subject to retaliation for complaints of gender and

14 race discrimination she made to her Branch Office Manager starting in the Summer of 2005.

15 Among other things, Ms. Williams complained that she was not given the same opportunities for

16 compensation as her male, non-minority colleagues. Ms. Williams also complained to her Branch

17 Office Manager of the hostile environment she suffers as a result of her race. For example, she

18 complained that a male, non-minority broker made derogatory remarks regarding a potential

19 client who was African American, including calling the potential client a “stupid nigger,” a

20 “stupid idiot,” and a “worthless fool.” These comments were made in Ms. Williams presence so

21 that she could hear them.

22

46. After Ms. Williams complained of gender and race discrimination to her

23 Branch Office Manager, MSDW isolated her, including excluding her from Company functions.

24 MSDW also moved her from her office into the bull pen, which is a space reserved for rookie

25 brokers. Other similarly-situated male, non-minority employees were not required to move into

26 the bull pen.

27

47. By discriminating against her with respect to these terms and conditions of

28 her employment, MSDW has diminished the amount of Ms. Williams’ compensation.

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1

48. By denying compensation to Ms. Williams that it made available to

2 similarly-situated male, non-minority Financial Advisors, MSDW has also denied her the ability

3 to reach earnings tiers with prestigious titles and greater income opportunities, which MSDW

4 awarded based on a Financial Advisor’s level of compensation.

5

49. On or about October 9, 2006, Ms. Williams filed a charge of discrimination

6 with the Michigan Department of Civil Rights (“MDCR”) and the Equal Employment

7 Opportunity Commission (“EEOC”). She has requested a right to sue letter. Her charge is

8 attached to this Complaint as Exhibit B and is incorporated herein by reference.

9

FIRST CLAIM FOR RELIEF

(Intentional Gender Discrimination)

10

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiffs and the Class) 11

12

50. Plaintiffs incorporate the preceding paragraphs as alleged above.

13

51. This Claim is brought by the Representative Plaintiffs on behalf of

14 themselves and the Class they represents. Plaintiffs have timely filed charges with the EEOC

15 making classwide claims of discrimination as well as individual claims, and have received or

16 requested Notices of Right to Sue from the EEOC. Plaintiffs have exhausted their administrative

17 remedies on their own behalf and on behalf of the Class at the time of filing.

18

52. MSDW has maintained a system that is discriminatory, excessively

19 subjective, standardless, and/or arbitrary with respect to the distribution of accounts and business

20 opportunities, compensation and other terms and conditions of employment. MSDW’s

21 discriminatory policies or practices described above have denied female Financial Advisors

22 business opportunities and compensation, including past and future wages and other job benefits,

23 as compared to similarly-situated male Financial Advisors.

24

53. Defendant has intentionally discriminated against Plaintiffs and the Class

25 by maintaining a pattern or practice of denying business opportunities and accounts that directly

26 affect compensation to qualified female Financial Advisors on the basis of sex. The foregoing

27 conduct constitutes illegal, intentional discrimination as unjustified disparate treatment prohibited

28 by 42 U.S.C. §§ 2000e et seq.

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1

54. Plaintiffs request relief as hereinafter described.

2

SECOND CLAIM FOR RELIEF

(Disparate Impact Gender Discrimination)

3

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiffs and the Class) 4

5

55. Plaintiffs incorporate the preceding paragraphs as alleged above.

6

56. This Claim is brought by the Representative Plaintiffs on behalf of

7 themselves and the Class they represent. Plaintiffs filed timely charges of discrimination with the

8 EEOC making classwide claims of discrimination as well as individual claims, and have received

9 or requested Notices of Right to Sue from the EEOC. Plaintiffs have exhausted their

10 administrative remedies on their own behalf and on behalf of the Class at the time of filing.

11

57. MSDW has maintained a system and/or policies that are discriminatory,

12 excessively subjective, standardless, and/or arbitrary with respect to the distribution of accounts

13 and business opportunities which affect compensation and other terms and conditions of

14 employment. This system has an adverse impact on female employees and is not, and cannot be,

15 justified by business necessity. Even if this system could be justified by business necessity, less

16 discriminatory alternatives exist and would equally serve any alleged necessity.

17

58. Plaintiffs request relief as hereinafter described.

18

THIRD CLAIM FOR RELIEF

(Gender Discrimination)

19

(California Fair Employment and Housing Act, Cal. Gov’t Code §§ 12940 et seq.)

(On behalf of Plaintiff Jaffe and the California Subclass) 20

21

59. Plaintiff Jaffe incorporates the preceding paragraphs as alleged above.

22

60. This claim is brought on behalf of Plaintiff Daisy Jaffe and the Subclass of

23 female Financial Advisors from California offices.

24 61. As described herein, MSDW’s actions constitute gender discrimination in
25 violation of the California Fair Employment and Housing Act (FEHA). Plaintiff Daisy Jaffe
26 received a Right to Sue letter from the DFEH on April 12, 2006. The pendency of an EEOC
27

28

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1 investigation into Plaintiff Jaffe’s charges tolls the time limit for filing a civil action pursuant to

2 the FEHA. Plaintiffs have timely complied with all prerequisites to sue.

3

62. Plaintiff Jaffe requests relief as hereinafter provided.

4

FOURTH CLAIM FOR RELIEF

(Gender Discrimination)

5

(Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.)

(On behalf of Plaintiff Williams and the Michigan Subclass) 6

7

63. Plaintiff Williams incorporates the preceding paragraphs as alleged above.

8

64. This claim is brought on behalf of Plaintiff Denise Williams and the

9 Subclass of female Financial Advisors from Michigan offices.

10

65. As described herein, MSDW’s actions constitute gender discrimination in

11 violation of Michigan’s Elliot-Larsen Civil Rights Act. Plaintiff Denise Williams has filed a

12 Charge of Discrimination with the Michigan Department of Civil Rights and has requested a

13 Notice of Right to Sue. The pendency of an EEOC investigation into Plaintiff Williams’ charges

14 of gender discrimination tolled the time limit for filing a civil action pursuant to the Elliot-Larsen

15 Civil Rights Act. Plaintiff has timely complied with all prerequisites to sue.

16

66. Plaintiff Williams requests relief as hereinafter provided.

17

FIFTH CLAIM FOR RELIEF

(Age Discrimination)

18

(Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 et seq.)

(On behalf of Plaintiff Jaffe only) 19

20

67. Plaintiff Jaffe incorporates the preceding paragraphs as alleged above.

21

68. This claim is brought on behalf of Daisy Jaffe only.

22

69. As described herein, MSDW’s actions constitute age discrimination against

23 Plaintiff Jaffe in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§

24 621 et seq.

25

70. Plaintiff Jaffe has filed a timely charge with the EEOC making individual

26 claims of age discrimination and has received a Notice of Right to Sue from the EEOC. Plaintiff

27 has exhausted her administrative remedies on her own behalf with respect to this claim at the time

28 of filing.

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1

71. Plaintiff Jaffe requests relief as hereinafter provided.

2

SIXTH CLAIM FOR RELIEF

(Age Discrimination)

3

(California Fair Employment and Housing Act, Cal. Gov’t Code §§ 12940 et seq.)

(On behalf of Plaintiff Jaffe only) 4

5

72. Plaintiff Jaffe incorporates the preceding paragraphs as alleged above.

6

73. This claim is brought on behalf of Daisy Jaffe only.

7

74. As described herein, MSDW’s actions constitute age discrimination against

8 Daisy Jaffe in violation of the California FEHA. Plaintiff Daisy Jaffe received a Right to Sue

9 letter from the DFEH on April 12, 2006. The pendency of an EEOC investigation into Plaintiff

10 Jaffe’s charges tolled the time limit for filing a civil action pursuant to the FEHA. Plaintiff has

11 timely complied with all prerequisites to sue.

12

75. Plaintiff requests relief as hereinafter provided.

13

SEVENTH CLAIM FOR RELIEF

(Race Discrimination)

14

(Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.)

(On behalf of Plaintiff Williams Only) 15

16

76. Plaintiff Denise Williams incorporates the preceding paragraphs as alleged

17 above.

18

77. This Claim is brought by Denise Williams individually.

19

78. Denise Williams has filed a timely charge with the EEOC making

20 individual claims of race discrimination and has thus exhausted her administrative remedies as of

21 the filing of this Amended Complaint.

22

79. MSDW has maintained a system and/or policies that are discriminatory,

23 subjective, standardless, and/or arbitrary with respect to the distribution of accounts and business

24 opportunities which affect compensation and other terms and conditions of employment. This

25 system has an adverse impact on minority employees. This system is not, and cannot be, justified

26 by business necessity. Even if such system could be justified by business necessity, less

27 discriminatory alternatives exist and would equally serve any alleged necessity.

28

80. MSDW’s discriminatory policies or practices, including those described

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1 above, have denied Ms. Williams business opportunities and compensation, in the loss of past and

2 future wages and other job benefits, as compared to similarly-situated non-minority Financial

3 Advisors.

4

81. Defendant has intentionally discriminated against Denise Williams by

5 maintaining a pattern and practice of denying business opportunities and accounts that directly

6 affect compensation to qualified Financial Advisors on the basis of race. The foregoing conduct

7 constitutes illegal, intentional discrimination as unjustified disparate treatment prohibited by 42

8 U.S.C. §§ 2000e et seq.

9

82. Plaintiff requests relief as hereinafter described.

10

EIGHTH CLAIM FOR RELIEF

(Race Discrimination)

11

(Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq.)

(On behalf of Plaintiff Williams Only) 12

13

83. Plaintiff Williams incorporates the preceding paragraphs as alleged above.

14

84. This claim is brought on behalf of Plaintiff Denise Williams.

15

85. As described herein, MSDW’s actions constitute race discrimination in

16 violation of Michigan’s Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq. Plaintiff

17 Williams has filed a charge of discrimination alleging race discrimination with the Michigan

18 Department of Civil Rights and has requested a Notice of Right to sue. Plaintiff has timely

19 complied with all prerequisites to sue.

20

86. Plaintiff Williams requests relief as hereinafter provided.

21

NINTH CLAIM FOR RELIEF

(Race Discrimination)

22

42 U.S.C. § 1981

(On behalf of Plaintiff Williams only) 23

24

87. Plaintiff Denise Williams incorporates the preceding paragraphs as alleged

25 above.

26

88. This claim is brought on behalf of Plaintiff Williams only.

27

89. The foregoing conduct constitutes intentional racial discrimination in

28 violation of 42 U.S.C. § 1981.

551161.4

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Case 3:06-cv-03903-TEH Document 25-1 Filed 10/12/2006 Page 17 of 20

1

90. Plaintiff Williams requests relief as hereinafter provided

2

ALLEGATIONS REGARDING RELIEF

3

91. Plaintiffs and the Class and Subclasses they seeks to represent have no

4 plain, adequate, or complete remedy at law to redress the wrongs alleged herein, and the

5 injunctive relief sought in this action is the only means of securing complete and adequate relief.

6 Plaintiffs and the Class and Subclasses they seek to represent are now suffering, and will continue

7 to suffer, irreparable injury from Defendant’s discriminatory acts and omissions.

8

92. MSDW’s actions have caused and continue to cause Plaintiffs and all Class

9 and Subclass members substantial losses in earnings and other employment benefits.

10

93. In addition, Plaintiffs, the Class and Subclasses suffer and continue to

11 suffer humiliation, embarrassment, and anguish, all to their damage in an amount according to

12 proof.

13

94. MSDW performed the acts herein alleged with malice or reckless

14 indifference. Plaintiffs, the Class and Subclass members are thus entitled to recover punitive

15 damages in an amount according to proof.

16

PRAYER FOR RELIEF

17

WHEREFORE, Plaintiffs, the Class and Subclasses pray for relief as follows:

18

95. Certification of the case as a class action on behalf of the proposed Class

19 and Subclasses;

20

96. Designation of Representative Plaintiffs as representatives of the Class,

21 designation of Representative Plaintiff Daisy Jaffe as the representative of the California

22 Subclass, and designation of Representative Denise Williams as the representative of the

23 Michigan Subclass;

24

97. Designation of Representative Plaintiffs’ counsel of record as Class

25 counsel;

26

98. A declaratory judgment that the practices complained of herein are

27 unlawful and violate 42 U.S.C. §§ 2000e, et seq., the California FEHA, Cal. Gov’t Code §§

28 12940 et seq., and the Elliot-Larsen Civil Rights Act, M.C.L.A. § 37.2101, et seq.;

551161.4

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1

99. A preliminary and permanent injunction against MSDW and its officers,

2 agents, successors, employees, representatives, and any and all persons acting in concert with

3 them, from engaging in each of the unlawful policies, practices, customs, and usages set forth

4 herein;

5

100. An order that MSDW institute and carry out policies, practices, and

6 programs that provide equal employment opportunities for all employees regardless of gender,

7 and that it eradicate the effects of its past and present unlawful employment practices;

8

101. An order restoring Plaintiff Jaffe to her rightful position at MSDW, or in

9 lieu of reinstatement, an order for front pay benefits;

10

102. Back pay (including interest and benefits) for Plaintiffs and individual

11 Class and Subclass members;

12

103. All damages sustained as a result of MSDW’s conduct, including damages

13 for emotional distress, humiliation, embarrassment, and anguish, according to proof;

14

104. Exemplary and punitive damages in an amount commensurate with

15 MSDW’s ability to pay and to deter future conduct;

16

105. Costs incurred herein, including reasonable attorneys’ fees to the extent

17 allowable by law;

18

106. Pre-judgment and post-judgment interest, as provided by law; and

19

107. Such other and further legal and equitable relief as this Court deems

20 necessary, just, and proper.

21

22

23

24

25

26

27

28

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Case 3:06-cv-03903-TEH Document 25-1 Filed 10/12/2006 Page 19 of 20

1 Dated: October 12, 2006
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
551161.4

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
By: /s/ Kelly M. Dermody Kelly M. Dermody
James M. Finberg (State Bar No. 114850) Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423 Telephone: (615) 313-9000 Facsimile: (615) 313-9965
Adam T. Klein Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
Attorneys for Plaintiffs

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1

DEMAND FOR JURY TRIAL

2

Plaintiff hereby demands a trial by jury as to all issues so triable.

3 Dated: October 12, 2006
4
5

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

6

7

By: /s/ Kelly M. Dermody

8

Kelly M. Dermody

9

James M. Finberg (State Bar No. 114850) Kelly M. Dermody (State Bar No. 171716)

10

Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN &

11

BERNSTEIN, LLP Embarcadero Center West

12

275 Battery Street, 30th Floor San Francisco, CA 94111-3339

13

Telephone: (415) 956-1000 Facsimile: (415) 956-1008

14

Elizabeth A. Alexander (pro hac vice)

15

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

16

150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423

17

Telephone: (615) 313-9000 Facsimile: (615) 313-9965

18

Adam T. Klein

19

Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice)

20

OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor

21

New York, New York 10016 Telephone: (212) 245-1000

22

Facsimile: (212) 977-4005

23

Attorneys for the Plaintiffs

24

25

26

27

28

551161.4

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 Case 3:06-cv-03903-TEH Document 37 Filed 10/24/2006 Page 1 of 21

1 James M. Finberg (State Bar No. 114850) Kelly M. Dermody (State Bar No. 171716)
2 Bill Lann Lee (State Bar No. 108452) Heather H. Wong (State Bar No. 238546)
3 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
4 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
5 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
6 email: jfinberg@lchb.com email: kdermody@lchb.com
7 email: hwong@lchb.com

8 Adam T. Klein Piper Hoffman (pro hac vice)
9 Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP
10 3 Park Avenue, 29th Floor New York, New York 10016
11 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
12 email: atk@outtengolden.com email: ph@outtengolden.com
13 email: jms@outtengolden.com
14 Attorneys for the Plaintiffs [Additional counsel on signature page]
15

James N. Penrod (State Bar No. 43030) Rebecca D. Eisen (State Bar No. 96129 ) Kent M. Roger (State Bar No. 95987 ) L. Julius M. Turman (State Bar No. 226126) Gregg Paris Yates (State Bar No. 224641) MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Tower San Francisco, CA 94105 Direct: 415.442.1361 Fax: 415.442.1001
Attorneys for Defendant

UNITED STATES DISTRICT COURT

16

NORTHERN DISTRICT OF CALIFORNIA

17

SAN FRANCISCO / OAKLAND DIVISION

18

19

DAISY JAFFE and DENISE WILLIAMS on behalf of themselves and all others

20 similarly situated,

21

Plaintiffs,

22

v.

23 MORGAN STANLEY DW, INC.,

24

Defendant.

25

Case No. C-06-3903 TEH
JOINT CASE MANAGEMENT CONFERENCE STATEMENT AND RULE 26(F) REPORT
Conference Date: October 30, 2006 1:30 p.m.

26

27

28
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Case No. C-06-3903 TEH
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Case 3:06-cv-03903-TEH Document 37 Filed 10/24/2006 Page 2 of 21

1

The parties to the above-entitled action jointly submit this Case Management

2 Statement.

3

SUMMARY OF CASE

4

Plaintiffs’ View

5

Plaintiffs Daisy Jaffe (“Jaffe”) and Denise Williams (“Williams”) (collectively,

6 “Plaintiffs”) have brought this class action lawsuit against Defendant Morgan Stanley DW, Inc.

7 (hereinafter “Defendant”, “MSDW”, or “Morgan Stanley”), alleging that Morgan Stanley has

8 engaged in a nationwide pattern, practice and policy of discriminating against female Financial

9 Advisors in compensation, business opportunities, and other terms and conditions of employment.

10 Plaintiffs claim that Morgan Stanley’s conduct has violated Title VII of the Civil Rights Act of

11 1964, 42 U.S.C. §§ 2000e, et seq., the California Fair Employment and Housing Act, Cal. Gov’t

12 Code § 12940 et seq. (“FEHA”), and the Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et

13 seq. (“Elliott-Larsen”), among others. This is the second pattern and practice discrimination case

14 filed against Morgan Stanley by Plaintiffs’ counsel here alleging systematic gender discrimination

15 relating to the compensation of female financial services professionals. The first,

16 EEOC/Schieffelin v. Morgan Stanley, involved the Institutional Equity Division of the company

17 and ultimately settled in 2004 for $54 million - including $12 million for Allison Schieffelin, the

18 lead plaintiff - and substantial injunctive relief.

19

Plaintiffs’ respectfully submit that there is no legitimate basis for staying this case.

20 Defendant has stated that it is in settlement talks in a similar action, Augst-Johnson v. Morgan

21 Stanley DW, Inc., Case No. 06-C-01142-RWR (D.D.C.), filed the same day as this case, that

22 could impact Plaintiffs’ claims here. If so, Plaintiffs have requested to be included in such

23 discussions to protect their interests and those of the proposed Class. Moreover, this action is

24 now progressing more rapidly than the D.C. action, with the parties here having completed their

25 Rule 26(f) conference and discovery having been served. There is no guarantee that talks in the

26 D.C. case will result in any settlement or that, if it does, such talks will ultimately benefit

27 Plaintiffs here.

28
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1

Plaintiffs’ counsel also respectfully submit that they are likewise experienced

2 employment lawyers with substantial previous experience representing Wall Street employees,

3 including Financial Advisors at Morgan Stanley and other Wall Street companies, in individual

4 and class cases. The Outten & Golden firm, Plaintiffs’ counsel in this action, recently represented

5 the lead plaintiff in the EEOC/Schieffelin v. Morgan Stanley case, and was directly involved in

6 the development, prosecution, and settlement of that case, including filing the first pattern and

7 practice claim; retaining and working with experts developing the systemic evidence and legal

8 strategy for all purposes (EEOC and intervenors); and prosecuting the case with the EEOC.

9 Morgan Stanley’s statements below about Plaintiffs’ counsel’s participation in the prior litigation

10 are inaccurate.

11

Plaintiffs’ counsel from both firms here have also worked extensively and

12 successfully with the mediator retained in the D.C. case in numerous other class action cases,

13 including cases involving Financial Advisors alleging gender discrimination, such as is alleged

14 here.

15

Defendant’s View

16

Morgan Stanley denies that it discriminated against the named plaintiffs or that it

17 has engaged in a nationwide pattern, practice and policy of discriminating against female

18 Financial Advisors in compensation, business opportunities, and other terms and conditions of

19 employment, and denies each and every allegation of discrimination in the Amended Complaint.

20 Morgan Stanley submits that Plaintiffs’ class claims of gender discrimination should be stayed by

21 this Court because those claims are subsumed in a nationwide gender discrimination class action

22 pending before Honorable Judge Richard W. Roberts in the United States District Court for the

23 District of Columbia, captioned Augst-Johnson v. Morgan Stanley DW, Inc., Case No. 06-C-

24 01142-RWR (D.D.C.) (the “D.C. Action”). The D.C. Action involves a putative class of current

25 and former female Financial Advisors that includes all of the putative class members sought to be

26 represented by Plaintiffs in this action. The putative class members in the D.C. Action are

27 represented by competent counsel, experienced in litigating large, complex class actions

28 involving employment discrimination issues, including Mehri & Skalet, PLLC and Sprenger &

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1 Lang. The parties in the D.C. Action have been engaged in settlement discussions since April,

2 2005 and are using the services of a prominent mediator, Hunter Hughes, to aid in their settlement

3 discussions. Throughout the settlement discussions in the D.C. Action, the parties have

4 exchanged voluminous data and information and have made significant progress towards

5 settlement. In light of the advanced stage of those settlement discussions, Morgan Stanley

6 respectfully submits that in the interests of fairness and judicial economy, the Court should stay

7 Plaintiffs’ class claims of gender discrimination, while allowing their individual, non-class claims

8 of age and race discrimination (and their gender discrimination claims if they choose to litigate

9 them individually) to proceed in this court. Morgan Stanley will be filing a motion to stay the

10 class action aspects of this case.

11

Defendant believes that Plaintiffs misrepresent the EEOC/Schiefflin case and the

12 role of one of Class Counsel's firms in that case. The EEOC/Schiefflin case was not against

13 Morgan Stanley DW Inc., the defendant in this case. It was against a different Morgan Stanley

14 company. The class that plaintiffs seek to represent in this case are retail stockbrokers who are

15 paid entirely on a commission like basis. The employees in the EEOC/Schiefflin case were the

16 Institutional Equities Division of Morgan Stanley who were involved in institutional business and

17 paid a salary and bonus not on a commission basis. The Outten & Golden firm's role in that case

18 was to represent an individual- intervenor in the case.

19

Defendants also believe that it would be extreme ly disruptive and

20 counterproductive to add at this time two more law firms to the settlement negotiations which

21 have been going on in the DC action since April of 2005. The two plaintiffs in this case will have

22 the option if the DC action is settled, to either object to the settlement if they are not pleased with

23 it, opt out of that settlement or participate in it. It is also misleading to suggest that this case is

24 proceeding more rapidly than the DC action merely because a request was served. As plaintiffs'

25 counsel are well aware there has been an extensive exchange of information in the DC action over

26 the past 18 months. Even if the DC case does not settle, it could proceed to trial much more

27 expeditiously given the extensive exchange of information.

28
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1

AGENDA ITEMS

2 I. Jurisdiction

3

A. Plaintiffs’ View

4

The Court has subject matter jurisdiction over all claims. Such jurisdiction is

5 based on federal question (Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq.,

6 and 42 U.S.C. § 1981) and supplemental jurisdiction (FEHA and Elliott-Larsen claims). All

7 Plaintiffs timely filed administrative charges with the Equal Employment Opportunity

8 Commission (EEOC). All parties before the Court are subject to the Court’s jurisdiction.

9 Plaintiffs are residents of California and Ohio who were employed by Defe ndant in California

10 and Michigan. Plaintiffs have served process on Defendant. There appears to be no argument

11 that the Court has jurisdiction over all gender discrimination and age discrimination claims, and

12 all race discrimination claims under § 1981. To the extent there is any legitimate concern about

13 the Court’s jurisdiction over Plaintiff Williams’ Title VII race discrimination charge, this may

14 easily be cured.

15

B. Defendant’s View

16

The Court has original subject jurisdiction over Plaintiff Jaffe’s federal claim

17 asserted under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in

18 Employment Act, and supplemental jurisdiction over Jaffe’s state law claims asserted under the

19 California Fair Employment and Housing Act.

20

The Court has original jurisdiction over Plaintiff Williams’ federal claim asserted

21 under 42 U.S.C. §1981 and supplemental jurisdiction over Williams’ state law claims asserted

22 under Michigan’s Elliot-Larsen Civil Rights Act. The Court does not have jurisdiction over

23 Plaintiff Williams’ race discrimination claims under Title VII because the EEOC has not issued

24 Williams a right to sue notice, which is a condition precedent to her bringing those claims in

25 court.

26

27

28
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1 II. The Principal Factual Issues In Dispute and Bases for Claims/Defenses

2

A. Plaintiffs’ View

3

Plaintiffs allege the following facts:

4

(1) Morgan Stanley has denied female Financial Advisors accounts and

5 business opportunities by utilizing a discriminatory and subjective account distribution policy and

6 practice that favors male Financial Advisors across its offices nationwide.

7

(2) Morgan Stanley perpetuates the historical exclusion of women from

8 account distribution, business lead assignment, and partnerships, by using biased and tainted

9 variables based on historical discrimination to determine the assignment of account s and other

10 business opportunities. This is a uniform practice across Morgan Stanley offices.

11

(3) By entrusting Branch Managers, virtually all of whom are men, with

12 undue discretion in compensation and business opportunity decisions, Morgan Stanley maintains

13 a system whereby the Branch Managers may apply their own personal preferences and biases in

14 making decisions that directly and detrimentally affect the earning potential of female Financial

15 Advisors. 16

(4) Morgan Stanley creates terms and conditions of employment that

17 discriminate against female Financial Advisors and in favor of men by creating a hostile work

18 environment in which the concerns and complaints of female employees are ignored or ridiculed.

19

(5) These discriminatory actions are taken pursuant to corporate policies

20 and practices determined at, and communicated from, the highest levels of the Company.

21

(6) Morgan Stanley implements these discriminatory policies and practices

22 by ensuring that corporate employees and regional managers exercise substantial control over

23 each branch’s employment practices.

24

(7) Plaintiffs Daisy Jaffe and Denise Williams represent a range of

25 experience in the industry, with Plaintiff Jaffe working for over 20 years for Defendant Morgan

26 Stanley or its predecessor companies.

27

(8) Plaintiff Daisy Jaffe is a female resident of Hillsboro, California. She

28 was employed by Morgan Stanley as a Financial Advisor from August 1982 to August 2005.

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1 During the course of her employment, Morgan Stanley denied Ms. Jaffe business opportunities

2 and compensation on the basis of her gender and age.

3

(9) Plaintiff Denise Williams is a female resident of Sylvania, Ohio. She is

4 currently employed by Morgan Stanley as a Financial Advisor in the Detroit, Michigan, office.

5 She has been employed by Morgan Stanley since March 2004. During the course of her

6 employment, Morgan Stanley has denied Ms. Williams business opportunities and compensation

7 on the basis of her gender and race.

8

B. Defendant’s View

9

Morgan Stanley vigorously disputes Plaintiffs’ allegations and denies that its

10 business policies and practices are discriminatory on any basis. Morgan Stanley’s Financial

11 Advisors (“FAs”), including the named plaintiffs, are compensated entirely on a formulaic which

12 is based mathematically on the revenue each FA generates, primarily from clients they attracted

13 to Morgan Stanley. While re-distribution of accounts does occur on occasion, the revenue

14 streams from those accounts make up a very small portion of a Financial Advisor's compensation.

15 Moreover, Morgan Stanley utilizes an objective standards for distributing accounts.

16

Further, Morgan Stanley maintains policies and procedures for the prevention of

17 discrimination in its workplace. Managers and employees receive periodic guidance and training

18 as to the detection, reporting and prevention of discrimination. Managers and employees are held

19 accountable for such acts, which may include discipline up to and including termination. Morgan

20 Stanley specifically denies that it has denied Jaffe, or any of it Financial Advisors, business

21 opportunities or compensation on the basis of gender or age. Morgan Stanley specifically denies

22 that it has denied Williams, or any of its Financial Advisors, business opportunities or

23 compensation on the basis of gender or race.

24 III. The Principal Legal Issues In Dispute

25

A. Plaintiffs’ View

26

The following legal questions are genuinely in dispute:

27

(1) For the class: Whether Morgan Stanley has violated Title VII of the Civil

28 Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq.;

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1

(2) For the California subclass: Whether Morgan Stanley has violated the

2 California Fair Employment and Housing Act, Cal. Gov’t Code § 12940 et seq. (“FEHA”); and

3

(3) For the Michigan subclass: Whether Morgan Stanley has violated the Elliot-

4 Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq. (“Elliott-Larsen”).

5

B. Defendant’s View

6

Morgan Stanley submits that in addition to the above issues, there are several

7 threshold lega l issues to be decided, including:

8

(1) Whether, in the interest of fairness and judicial economy, Plaintiffs’ class

9 claims of gender discrimination should be stayed. The claims of the putative class members are

10 already being aggressively pursued in the D.C. Action, where the exchange of information and

11 data and settlement discussions have been ongoing for more than 18 months. Those discussions

12 are at an advanced stage, the interests of the putative class are being fully represented in that

13 action by competent counsel, and the settlement discussions are being overseen by a nationally

14 recognized mediator.

15

(2) Whether this action can be maintained as a class action under Rule 23 of the

16 Federal Rules of Civil Procedure. Resolution of this issue involves several sub- issues, including:

17

(a) Whether Plaintiffs’ are adequate representatives of the class and/or sub-

18 classes they purport to represent.

19

(b) Whether Plaintiffs’ claims are typical of the claims of others in the class

20 and/or sub-classes they purport to represent.

21

(c) Whether common questions of law and fact predominate over questions

22 affecting only the individual named Plaintiffs.

23

(d) Whether a class action is superior to other means of deciding the claims

24 asserted by Plaintiffs.

25

(e). Whether there is the likelihood of inconsistent or varying adjudications

26 that would establish incompatible standards of conduct for Defendant.

27

28
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1

(f) Whether there is a risk of adjudication with respect to individual

2 putative class members that would be dispositive of the interests of third parities or impair their

3 ability to protect their interests.

4

(g) Whether Defendant has acted on grounds that are generally applicable

5 to the entire class, making injunctive or declaratory relief an appropriate remedy.

6

(h) Whether putative class members have a greater interest in pursuing

7 separate actions.

8

(i) Whether litigation with respect to similar issues has already

9 commenced in any other forum.

10

(j) Whether there is a desirability of concentrating the action in this forum.

11

(k) Whether difficulties are likely to be encountered in managing this class

12 action.

13 IV. 14

Narrowing of Issues At this time, the parties know of no issues that can be narrowed by agreement.

15 V. 16 17

Anticipated Motions A. Plaintiffs’ View
Plaintiffs intend to file a motion for class certification pursuant to Rule 23.

18 Plaintiffs will oppose Defendant’s motion to stay for the reasons set forth above, and will oppose

19 any motion to strike class claims. The time for deciding class certification issues is in connection

20 with a properly- filed motion for class certification, which Morgan Stanley may oppose. To the

21 extent that Morgan Stanley raises any legitimate concern about Plaintiff Williams’ EEOC right to

22 sue, such problems may easily be cured. Plaintiffs anticipate opposing Defendant’s motion for

23 summary judgment.

24

B. Defendant’s View

25

Morgan Stanley intends to file several motions at the outset challenging the ability

26 of Plaintiffs to pursue their purported nationwide gender discrimination class action, as well as

27 motions directed to the merits of Plaintiffs’ individual claims, including:

28
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1

(1) Motion to Stay Class Claims. As noted above, Plaintiffs’ nationwide class

2 claims are subsumed in the nationwide class action being pursued in the D.C. Action. The

3 putative class in the D.C. action includes the same class members that would be covered in this

4 action, though the class period in the D.C. Action is arguably broader in temporal scope than in

5 this action, and the interests of the putative class members are being represented by competent

6 class action counsel. Given the advanced stage of the information exchange and settlement

7 discussions in the D.C. Action, a stay of Plaintiffs’ class action claims is appropriate. Plaintiffs’

8 separate individual claims of age and race discrimination should proceed in this court and can be

9 much more promptly and efficiently resolved without simultaneously litigating the same class

10 issues which are likely to be resolved by the D.C. Action.

11

(2) Motion to Strike Class Claims. If the action is not stayed, Morgan Stanley

12 intends to file a motion to strike the class allegations, insofar as Plaintiffs are not adequate class

13 representatives and do not have claims typical of the class and/or sub-classes they purport to

14 represent.

15

(3) Motion to Dismiss. Morgan Stanley intends to file a motion to dismiss the

16 Title VII race discrimination claim of Plaintiff Williams, insofar as the EEOC has not issued

17 Williams a right to sue notice, which is a condition precedent to her bringing that claim in court.

18

(4) Motion for Summary Judgment. Morgan Stanley intends to file summary

19 judgment motions on Plaintiffs’ individual claims of discrimination.

20 VI. 21 22

Intended Discovery and Possible Discovery Limitations A. Plaintiffs’ View
Plaintiffs intend to seek discovery directed to, among other things, Morgan

23 Stanley’s personnel, human resources, and EEO policies; compensation and business allocation

24 policies and practices; electronic and personnel databases containing compensation and business

25 allocation information pertaining to Financial Ad visors; EEO- and retaliation-related complaints

26 and investigations; and the company structure and organization.

27

Plaintiffs believe that they may need to exceed the deposition and interrogatory

28 limitations provided under the Federal Rules, and will meet and confer as necessary to address

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1 these issues as they arise before bringing such issues before the Court. Plaintiffs do not believe

2 bifurcation of discovery into “class” and “merits” phases is necessary, practical, or appropriate

3 here. Because there will be significant overlap among the issues relevant to class certification

4 and class liability, Plaintiffs believe that any attempt to bifurcate discovery will result in greater

5 inefficiency and may generate endless disputes about line-drawing.

6

In addition, as courts have recognized, there is no requirement that “class”

7 discovery be bifurcated from merits or individual discovery. See Gray v. First Winthrop Corp.,

8 133 F.R.D. 39, 41 (N.D. Cal. 1990) (“[a]n order restricting discovery to class issues would be

9 impracticable because of the closely linked issues, and inefficient because it would be certain to

10 require ongoing supervision of discovery”); Harriss v. Pan Am. World Airways, Inc., 74 F.R.D.

11 24, 36 (N.D. Cal. 1977) (facts relevant to the class action determination and definition may

12 largely overlap with those relevant to the merits); Barnhart v. Safeway Stores, Inc., No. S92-0803

13 WBS, 1992 WL 443561, *9 (E.D. Cal. Dec. 14, 1992) (declining to limit discovery to “class”

14 related matters noting that the court should have all information that it might find relevant).

15 Indeed, as the Manual for Complex Litigation -- Fourth makes clear, “Courts have recognized

16 that information about the nature of the claims on the merits and the proof that they require is

17 important to deciding certification. Arbitrary insistence on the merits/class discovery distinction

18 sometimes thwarts the informed judicial assessment that current class certification practice

19 emphasizes.” See Federal Judicial Center, Manual for Complex Litigation – Fourth, § 21.14

20 (2004).

21

To the extent Defendant believes that Plaintiffs’ discovery is burdensome or

22 otherwise objectionable, the proper way to address that is through the meet and confer process.

23

B. Defendant’s View

24

Morgan Stanley believes that class discovery should be stayed insofar as Plaintiffs’

25 class claims should be stayed in favor of the more mature proceedings in the D.C. Action.

26 Morgan Stanley submits that discovery on Plaintiffs’ individual claims of discriminationcan

27 proceed on the following schedule:

28
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1 Last Day for fact discovery Last day for expert discovery:
2 Last day to file dispositive motions:

February 16, 2007 March 16, 2007 May 31, 2007

3

Morgan Stanley does not agree at this time to any waiver of the limitations

4 imposed by the Federal Rules of Civil Procedure concerning the number of depositions and

5 interrogatories, but will meet and confer with Plaintiffs should they request such a waiver.

6 VII. Confidentiality/Protective Orders

7

The parties anticipate submitting a stipulated protective order applying to

8 nonpublic trade- mark, copyright, trade secret, or confidential personnel information. Plaintiffs

9 provided a draft protective order to Defendant on October 23, 2006.

10 VIII. Relief Sought; Amount Of Damages; Computation Of Damages

11

Plaintiffs on behalf of themselves and the Class1 seek injunctive relief in the form

12 of a preliminary and permanent injunction preventing Morgan Stanley from continuing to

13 discriminate against female Financial Advisors in the manner described in the Amended

14 Complaint, an order that Morgan Stanley institute equal employment policies for women and

15 eradicate the effects of its past and present discrimination; and equitable relief in the form of back

16 pay and front pay. Plaintiffs on behalf of themselves and the Class also seek compensatory and

17 punitive damages subject to proof. Plaintiffs’ calculation of damages will depend on information

18 to be received from Morgan Stanley in discovery.

19

Defendant’s position is that Plaintiffs, individually and on behalf of the class they

20 purport to represent, are not entitled to relief.

21 IX. 22

ADR Processes The parties have discussed the various ADR alternatives. Plaintiffs believe that

23 private mediation, at an early practicable time, would be appropriate for all Plaintiffs' claims,

24

25 1 The Class is defined as all female Financial Advisors employed by MSDW in the United States at any time from August 5, 2003 to the present. Plaintiff Jaffe also brings this Class Action
26 pursuant to Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) on behalf of a Subclass of all female Financial Advisors employed by MSDW in California at any time from November 1, 2004 to the present.
27 Plaintiff Williams brings this action pursuant to Fed. R. Civ. P. 23(a), (b)(2) and (b)(3) on behalf of a Subclass of female Financial Advisors employed by MSDW in Michigan at any time from
28 December 13, 2005 to the present.

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1 while Defendant ha s proposed private mediation of Plaintiffs' individual claims. Defendant

2 intends to file a motion to stay the class aspects of the case and thus the parties have been unable

3 to reach agreement as to class claims. Plaintiffs respectfully submit that, if Defendant is

4 considering a resolution that would compromise Plaintiffs’ claims, Defendant should include

5 Plaintiffs’ counsel in that discussion. This is particularly true given Plaintiff counsel’s prior

6 successful litigation efforts in the EEOC/Schieffelin v. Morgan Stanley case, and other similar

7 financial services industry discrimination cases.

8

Defendant takes the position that any settlement of the DC action would not

9 compromise plaintiffs' claims. If settlement is reached in that case, plaintiffs will have the option

10 to object to the settlement if they find it unacceptable, opt out of the settlement should they wish

11 to pursue their own claims or participate in that settlement as class members. It would be

12 enormously disruptive and would substantially delay the settlement discussions in the DC action

13 to inject two new law firms at this late stage after the extensive negotiations and information

14 exchange have taken place over the past 18 months. As noted above, the Outten & Golden firm

15 misrepresents its role in the EEOC/Schiefflin settlement negotiations. Their only substantive role

16 was to represent one individual plaintiff and not the class on whose behalf the EEOC sought

17 relief.

18 X. 19

Settlement Prospects Plaintiffs have informed Morgan Stanley that they are willing to discuss settlement

20 with Defendant at an early practicable date, and have been informed that Morgan Stanley has

21 been engaged in settlement talks with another group of plaintiffs in a related case, filed the same

22 day as this case, pending on the East Coast. Plaintiffs’ counsel here have worked extensively and

23 successfully with the mediator in that other case in numerous other class action cases, including

24 cases involving Financial Advisors alleging gender discrimination. To date, Morgan Stanley has

25 refused to involve Plaintiffs here in those discussions.

26

Morgan Stanley has informed Plaintiffs that the members of the purported class of

27 female Financial Advisors they seek to represent are already being represented by competent

28 counsel in the D.C. Action. The settlement discussions in the D.C. Action have been ongoing for

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1 more than 18 months and are being overseen by a prominent mediator. It would be enormously

2 disruptive and counterproductive to introduce two new law firms into those negotiations after 18

3 months. Morgan Stanley has informed Plaintiffs that it is prepared to promptly mediate the

4 individual age and race claims of the plaintiffs and to the extent they wish to pursue settlement of

5 their own individual gender claims outside of the ongo ing class action settlement discussions in

6 the D.C. Action, Morgan Stanley is also willing to discuss settlement of those individual claims.

7 XI. 8

Magistrate Judge Trials The parties do not consent to having a Magistrate Judge conduct all further

9 proceedings.

10 XII. Trial Issues

11

The Plaintiffs respectfully submit that it is premature to set trial dates or estimate

12 the length of trial. Plaintiffs have requested a jury trial. Plaintiffs believe that bifurcation into

13 class liability and individual damages phases may be appropriate here. Defendant believes it is

14 premature to decide this issue.

15

Defendant believes that plaintiffs’ individual claims can be tried, if not settled or

16 dismissed by summary judgment within one week. Defendant would be prepared for such trial if

17 the Court denies summary judgment within 30 days of the court’s denial of the summary

18 judgment motions.

19 XIII. Related Cases

20

The parties are unaware of any related cases in this Court. As noted above, there

21 is a similar case pending in the District of Columbia District Court, Augst-Johnson v. Morgan

22 Stanley DW, Inc., Case No. 06-C-01142-RWR (D.D.C.), filed the same day as this case, which is

23 also a nationwide class action purporting to represent the female Financial Advisors who are or

24 were employed by Morgan Stanley. Defendant asserts, though Plaintiffs disagree, that the

25 temporal scope of the putative class covered in the D.C. Action is arguably broader than the

26 temporal scope of the putative class that would be covered in this action. Defendant also

27 maintains that the D.C. Action is much further advanced in terms of document and information

28 exchanges, and settlement discussions in that case have been ongoing since April 2005.

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1

Plaintiffs note that the temporal scope of both cases is identical, but submit that

2 this case also includes subclasses for California and Michigan employees. Plaintiffs believe that

3 the prosecution of this case, not the D.C. case, is farther along in terms of the Rule 26(f)

4 conference, formal document requests (which Plaintiffs here have served), and the initial CMC.

5 Plaintiffs further submit that the exchange of documents in connection with settlement

6 discussions in the D.C. case does not in any way guarantee that the case has progressed at all,

7 much less that it has progressed quickly.

8

Defendant disagrees that the instant matter is farther along, in any respect, than the

9 matter pending in the District of Columbia. Defendant has been engaged in an 18 month process

10 of information exchanges, mediation and negotiations with experienced counsel representing a

11 putative class that claims to be identical to plaintiffs in the instant action. The extensive

12 negotiations process is being conducted by a nationally recognized dispute resolution expert.

13 Tremendous time and resources have been allocated to the endeavor in the District of Columbia,

14 which will include also provide plaintiffs in the instant case with an ability to object to the

15 settlement if they find it unacceptable, opt out of the settlement should they wish to pursue their

16 own claims or participate in that settlement as class members. As noted above, it would be

17 enormously disruptive and would substantially delay the settlement discussions in the DC action

18 to inject two new law firms at this late stage.

19 XIV. Class Certification

20

A. Plaintiffs’ View

21

Pursuant to Civil L.R. 16-9(a), any party seeking to maintain a case as a class

22 action must include in the case management statement the following additional information:

23

1. The Specific Paragraphs of Fed. R. Civ. P. 23 under which the Action

is Maintainable as a Class Action: 24

Plaintiffs contend that this action is maintainable under Rule 23 paragraphs (a),

25

(b)(2) and (b)(3).

26

27

28
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1

2. A Description of the Class or Classes in Whose Behalf the Action is

Brought:

2

Plaintiffs bring this action on behalf of all female Financial Advisors employed by

3 Morgan Stanley in the United States at any time from August 5, 2003 to the present (from

4 November 1, 2004 to the present for those in California, and from December 13, 2005 for those in

5 Michigan).

6

3. Facts Showing that Plaintiffs are Entitled to Maintain the Action

7

under Fed. R. Civ. P. 23(a) and (b):

8

The members of the Class are so numerous that joinder of all members is

9 impractical, if not impossible. Plaintiffs are informed and believe that the total number of Class 10 Members is likely to be at least thousands of individuals. Membership in the Class will be 11 determined by analysis of employee payroll and other records maintained by Defendant, as well

12 as by reliable methods of extrapolation to account for records destroyed by the Defendant.

13

Plaintiffs’ claims are typical of those of the Class because Plaintiffs, like each

14 member of the Class, are female current and former Financial Advisors who suffered

15 discrimination in connection with compensation, account distribution, business leads, 16 partnerships, sales support, and other terms and conditions of employment due to their gender.

17

Plaintiffs are adequate representatives of the Class because Plaintiffs’ claims are

18 typical of those of the Class, and Plaintiffs have the same interests in the litigation of this case as

19 the other Class Members. Plaintiffs are committed to vigorous prosecution of this case, and have

20 retained competent counsel, experienced in litigating large, complex class actions of this nature, 21 including class actions involving employment discrimination issues. Plaintiffs are not subject to 22 any individual defenses unique from those conceivably applicable to the Class as a whole.

23 Plaintiffs anticipate no management difficulties in this litigation.

24

A class may be certified and maintained under Federal Rule of Civil Procedure

25 23(b)(2) because Defendant has acted on grounds generally applicable to the entire Class by

26 discriminating against female Financial Advisors, thereby making appropriate final injunctive or 27 corresponding declaratory relief with respect to the Class as a whole.

28
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1

In addition, a class may be also be certified under Federal Rule of Civil Procedure

2 23(b)(3). Each member of the Class has been damaged and is entitled to recovery as a result of

3 Morgan Stanley’s common, uniform, and unfair personnel policies and practices that discriminate

4 against female Financial Advisors.

5

There are questions of law and fact common to the Class that predominate over

6 any questions affecting only individual members of the Class, including without limitation, all of

7 the following:

8

(1) Whether Morgan Stanley has discriminated against women in allocating

9 accounts and business opportunities that impacts their opportunities for increased compensation,

10 including, but not limited to, leads, call- ins, walk- ins, accounts from departing brokers’ books,

11 and other sources of business;

12

(2) Whether Morgan Stanley has relied upon biased, subjective, gender-

13 based and/or arbitrary criteria utilized by a nearly all- male managerial workforce in making

14 business allocation decisions that directly impact compensation;

15

(3) Whether Morgan Stanley has established and maintained an arbitrary

16 and biased policy or system regarding business allocation that has had the effect of denying

17 compensation to qualified women;

18

(4) Whether Morgan Stanley has failed and refused to take reasonable and

19 adequate steps to eliminate the effects of Defendant’s past discriminatory practices;

20

(5) Whether Morgan Stanley has maintained a compensation system that

21 perpetuates past discrimination;

22

(6) Whether Morgan Stanley has maintained a discriminatory and gender-

23 biased corporate culture; and

24

(7) Whether Morgan Stanley has made employment decisions based on

25 gender stereotypes.

26

A class action is superior to other means of deciding this controversy.

27

28
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1

4. A Proposed Date for the Court to Consider whether the Case can be

Maintained as a Class Action:

2

Plaintiffs propose the following schedule for class certification briefing, which

3 takes into account the fact that Defendant has not yet begun to produce documents and gives the

4 parties more time to oppose and reply than is usual under regular motion practice:

5 Plaintiffs' Motion for Class Certification:

June 15, 2007

Defendant’s Opposition: 6 Plaintiffs' Reply:

July 20, 2007 August 10, 2007

7

Plaintiffs believe that discovery of experts, to the extent necessary, can readily be

8 completed within this proposed briefing schedule, particularly given that “dueling” between

9 experts “is not relevant to the certification determination. ” Caridad v. Metro-North Commuter

10 R.R., 191 F.3d 283, 292 (2d Cir. 1999) (internal quotations and citations omitted).

11

Plaintiffs propose that the parties agree beforehand to use a common database,

12 make experts available in designated periods, and otherwise to work cooperatively to facilitate

13 any discovery on an expedited basis.

14

Plaintiffs disagree with Defendant’s allegations regarding Plaintiff Williams’

15 suitability to serve as a class representative, but submit that such allegations may properly be

16 explored during the discovery process.

17

B. Defendant’s Statement Regarding Class Allegations

18

Morgan Stanley does not understand itself to have an obligation under Local Rule

19 16.9 to respond to Plaintiffs’ statement regarding class allegations. Morgan Stanley believes,

20 however, that Plaintiffs cannot maintain a class action for several reasons, including the fact that

21 Plaintiffs are not adequate class representatives because their claims are not typical of those in the

22 purported class or sub-classes and their claims are subject to unique, individual defenses given

23 their individual circumstances. For example, Plaintiff Williams is a Morgan Stanley Relationship

24 Migration Financial Advisor (“RMFA”), and as an RMFA, she is subject to different policies than

25 are the Financial Advisors she purports to represent. Indeed, Williams is not even an adequate

26 class representative for the sub-class of Michigan Financial Advisors she purports to represent.

27 Morgan Stanley plans to move to strike the class allegations and oppose Plaintiffs’ class action

28 allegations at the appropriate time.
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1

Further, Morgan Stanley believes that it is premature to set a schedule for the

2 determination of whether a class can be maintained insofar as discovery with respect to the class

3 should be stayed in favor of the more mature proceedings in the D.C. Action. Furthermore, the

4 schedule as proposed by Plaintiffs’ counsel is inadequate for the consideration of substantive and

5 vigorous analysis as mandated by Federal Rule of Civil Procedure 23(a) & (b). Should this Court

6 consider the class certification issues, Plaintiffs proposed schedules also fails to provide for

7 adequate time and consideration of expert disclosure and discovery. Moreover, proposed

8 schedule should encompass a dispositive motion date that is far in advance of any filing for

9 certification of the class.

10 XV. Scheduling: Dates For Discovery Cutoff, Pretrial Conference, And Trial

11

Defendant maintains that, if Plaintiffs’ class claims are stayed, discovery and

12 dispositive motion cutoff dates can be as set forth above in Section VI.B. Plaintiffs disagree with

13 this schedule, as it appears to assume a non-class schedule or a distinction between merits and

14 class discovery that is inappropriate. If the class claims are not stayed, the parties respectfully

15 submit that it is premature to set cut-off dates for discovery and dispositive motions, the Pretrial

16 Conference, or Trial and that such dates should not be set until the scope of this action is

17 determined.

18 XVI. Other Matters

19

A. ALTERNATIVE DISPUTE RESOLUTION

20

1. ADR Certifications

21

On September 5, 2006, and October 20, 2006, respectively, Plaintiffs Daisy Jaffe

22 and Denise Williams filed and served their ADR Certifications pursuant to Civil L.R. 16-8.

23 Defendant shall file and serve its ADR Certification, pursuant to Civil L.R. 16-8, by October 27,

24 2006.

25

2. ADR Process or Deadline

26

The parties have not yet participated in an ADR Phone Conference, and none is

27 scheduled at this time.

28
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1

B. DISCLOSURES

2

Plaintiffs certify that Plaintiff Jaffe has served her initial disclosures pursuant to

3 Fed. R. Civ. P. 26. Because Plaintiff Williams just joined the case as a new Plaintiff, she will be

4 serving her initial disclosures shortly. Defendant will serve disclosures in the time and manner

5 prescribed by the Federal Rules of Civil Procedure.

6

C. COUNSEL AND SERVICE

7

Plaintiffs’ counsel are the firms of Lieff, Cabraser, Heimann & Bernstein LLP; and

8 Outten & Golden LLP. Defense counsel is the firm of Morgan, Lewis & Bockius LLP. For

9 documents other than those served through the Court’s electronic filing system, Plaintiffs shall

10 serve one copy of any pleading, motion, or other document on Morgan Stanley’ s defense

11 counsel; and Defendants shall serve one copy of any pleading, motion, or other document on the

12 two Plaintiffs’ counsel firms.

13 Respectfully submitted,

14 Dated: October 24, 2006
15

By: /s/ Kelly M. Dermody Kelly M. Dermody

16 Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN &
17 BERNSTEIN, LLP One Nashville Place
18 150 Fourth Avenue N., Suite 1650 Nashville, TN 37219-2423
19 Telephone: (615) 313-9000 Facsimile: (615) 313-9965
20
21 Adam T. Klein
22 Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice)
23 OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor
24 New York, New York 10016 Telephone: (212) 245-1000
25 Facsimile: (212) 977-4005

James M. Finberg (State Bar No. 114850) Kelly M. Dermody (State Bar No. 171716) Bill Lann Lee (State Bar No. 108452) Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

26

Attorneys for Plaintiffs

27

28
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1 Dated: October 24, 2006
2
3
4
5
6
7

By: /s/ L. Julius M. Turman L. Julius M. Turman
James N. Penrod (State Bar No. 43030) Rebecca D. Eisen (State Bar No. 96129 ) Kent M. Ro ger (State Bar No. 95987 ) L. Julius M. Turman (State Bar No. 226126) Gregg Paris Yates (State Bar No. 224641 MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Tower San Francisco, CA 94105 Direct: 415.442.1361 Fax: 415.442.1001

8

Attorneys for Defendant

9

10

11

12

13

14

15

16

17

18

19

20

21

22

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28
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 Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 1 of 163

1 Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 email: kdermody@lchb.com email: hwong@lchb.com
6 Adam T. Klein
7 Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice)
8 OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor
9 New York, New York 10016 Telephone: (212) 245-1000
10 Facsimile: (212) 977-4005

James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

11 [Additional counsel listed on signature page]

12 Attorneys for the Plaintiffs

13

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

14

SAN FRANCISCO / OAKLAND DIVISION

15

16 DAISY JAFFE, DENISE WILLIAMS, and MARGARET BENAY CURTIS-BAUER,
17 on behalf of themselves and all others similarly situated,
18

19

Plaintiffs,

20

v.

21 MORGAN STANLEY & CO. INCORPORATED, f/k/a MORGAN
22 STANLEY DW INC.

Case No. C-06-3903 TEH
PLAINTIFF’S SEPARATE MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF JOINT MOTION FOR: (1) PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT; (2) PROVISIONAL CERTIFICATION OF SETTLEMENT CLASS; (3) APPROVAL AND DISTRIBUTION OF NOTICE OF SETTLEMENT; AND (4) APPROVAL OF A SCHEDULE FOR THE FINAL SETTLEMENT APPROVAL PROCESS

23 Defendant.
24

Date:

November 26, 2007

Time:

1:30 p.m.

Courtroom: 12

25

26

27

28

725261.1

PLAINTIFFS’ MPA ISO MOTION FOR ORDER GRANTING PRELIM APP OF PROPOSED SETTLEMENT CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 2 of 163

1

TABLE OF CONTENTS

2

Page

3 INTRODUCTION .......................................................................................................................... 1

4 FACTUAL AND PROCEDURAL BACKGROUND.................................................................... 2

I. Litigation History.................................................................................................... 2

5

II. Settlement Negotiations .......................................................................................... 4

6 SUMMARY OF SETTLEMENT TERMS..................................................................................... 4

7

I. Injunctive Relief...................................................................................................... 4

II. Monetary Relief .................................................................................................... 11

8 CLASS ACTION SETTLEMENT PROCEDURE....................................................................... 13

9 ARGUMENT ................................................................................................................................ 14

10

I. Preliminary Approval of the Settlement Is Appropriate ....................................... 14

A. The Terms of the Proposed Settlement Are Fair and Within the

11

Range of Reasonableness.......................................................................... 15

12

1. The Settlement Is the Product of Experienced Counsels’ Serious, Arms’ Length, Informed Negotiations............................ 16

13

2. The Proposed Settlement Amount and the Allocation

Process are Fair and Reasonable ................................................... 17

14

3. The Settlement’s Terms Provide Meaningful Injunctive

15

Relief ............................................................................................. 17

4. Liability Is Contested, and the Settlement Provides

16

Reasonable Compensation for Class Members’ Damages in

Light of the Risks of Proceeding through Class

17

Certification, Summary Judgment, Trial and Appeal ................... 18

18

5. Trial and Appeal of This Action Would Be Complex, Expensive and Time Consuming, and Would Delay

19

Recovery ....................................................................................... 18

II. Provisional Certification of the Class Is Appropriate ........................................... 19

20

1. Numerosity Is Satisfied ................................................................. 19

21

2. Commonality Is Satisfied.............................................................. 20

22

3. Typicality Is Satisfied ................................................................... 21

4. Adequacy Is Satisfied.................................................................... 22

23

5. Certification of the Class Is Proper under Rule 23(b)................... 22

24

a. Final Certification Under 23(b)(2) is Appropriate ............ 22

25

b. Certification Under 23(b)(3) is Appropriate ..................... 23

III. Plaintiff’s Counsel Should Be Appointed as Class Counsel................................. 24

26

IV. The Proposed Class Notice Is Appropriate ........................................................... 25

27

A. The Proposed Class Notice Satisfies Due Process.................................... 25

28

B. The Notice Plan and Claims Process Are Appropriate ............................. 25

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1

2

3

V.

4

VI.

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

725261.1

TABLE OF CONTENTS (continued)

Page

The Proposed Scheduling Order; A Final Approval Hearing Should Be Scheduled .............................................................................................................. 26
Conclusion ............................................................................................................ 27

PLAINTIFFS’ MPA ISO MOTION FOR ORDER GRANTING

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1

TABLE OF AUTHORITIES

2

Page

3

4 Alaniz v. California Processors, Inc.,

CASES

5

73 F.R.D. 269 (N.D. Cal. 1976)................................................................................................. 16

Amchem Prods. Inc. v. Windsor,

6

521 U.S. 591 (1997)............................................................................................................. 23, 25

7 Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439 (N.D. Cal. 1994)............................................................................................... 20

8 Barefield v. Chevron U.S.A., Inc.,

9

No. C 86-2427 THE,1987 WL 65054 (N.D. Cal. 1987)...................................................... 22, 23

Boyd v. Bechtel Corp.,

10

485 F. Supp. 610 (N.D. Cal. 1979) ................................................................................ 15, 16, 17

11 Brown v. Title Ticor Ins. Co., 982 F.2d 386 (9th Cir. 1992)...................................................................................................... 24

12 Churchill Village, L.L.C. v. General Elec.,

13

361 F.3d 566 (9th Cir. 2004)...................................................................................................... 15

Class Plaintiffs v. City of Seattle,

14

955 F.2d 1268 (9th Cir. 1992).................................................................................................... 15

15 Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977).................................................................................................... 15

16 Dukes v. Wal-Mart, Inc.,

17

474 F.3d 1214 (9th Cir. 2007)........................................................................................ 21, 22, 24

Ellis v. Naval Air Rework Facility,

18

87 F.R.D. 15 (N.D. Cal. 1980)................................................................................................... 17

19 Ellis. v. Costco Wholesale Corp., 240 F.R.D. 627 (N.D. Cal. 2007)......................................................................................... 21, 24

20 General Tele. Co. of Southwest v. Falcon,

21

457 U.S. 147 (1982)................................................................................................................... 22

Glass v. UBS Fin. Serv., Inc.,

22

No. C-06-4068 MMC, 2007 WL 221862 (N.D. Cal. January 26, 2007) ................................... 20

23 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1988)............................................................................................. passim

24 In re DJ Orthopedics, Inc. Sec. Litig.,

25

No. 01-CV-2238KRBB, 2004 W.L. 1445101 (S.D. Cal. June 21, 2004).................................. 16

In re General Motors Corp. Pick-up Truck Fuel,

26

55 F.3d 768 (3d Cir. 1995)................................................................................................... 14, 20

27 In re Tableware Antitrust Litigation, 484 F. Supp.2d 1078 (N.D. Cal. 2007) ...................................................................................... 18
28

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1

TABLE OF AUTHORITIES

(continued)

2

Page

3 In re United Energy Corp. Solar Power Modules Tax Shelter Investments, Nos. CV 87-3962KN(GX), CV 86-3538KN(GX), 1989 WL 73211
4 (C.D. Cal. March 9, 1989) ......................................................................................................... 17

5

L.H. v. Schwarzenegger, No. CIV. S-06-2042 LKK/GGH, 2007 WL 662463 (E.D.Cal. Feb. 28, 2007) ......................... 20

6 Linney v. Cellular Alaska P’ship,

Nos. C-96-3008 DLJ, C-97-0203 DLJ, C-97-0425 DLJ, C-97-0457 DLJ, 1997 W.L. 450064

7

(N.D. Cal. July 18, 1997) ........................................................................................................... 16

8 Molski v. Gleich,

318 F.3d 937 (9th Cir. 2003)................................................................................................ 23, 24

9 Murray v. Local 2620, Dist. Counsel 57, American Federation of State, County and Municipal

10

Empl., AFL-CIO, 192 F.R.D. 629 (N.D. Cal. 2000)............................................................................................... 22

11 Officers for Justice v. Civil Serv. Comm’n,

688 F.2d 615 (9th Cir. 1982), cert. denied, Byrd v. Civil Serv. Comm’n, 459 U.S. 1217

12

(1983) ......................................................................................................................................... 15

13 Ortiz v. Fibreboard Corp.,

527 U.S. 815 (1999)................................................................................................................... 24

14 Robinson v. Metro-North Commuter R.R.,

15

267 F.3d 147 (2d Cir. 2001)....................................................................................................... 23

Rosenburg v. Int’l Business Mach. Corp.,

16

No. CV 06-00430 PJH, 2007 WL 2043855 (N.D. Cal. July 12, 2007) ..................................... 20

17 Safeco Corp. v. Van Bronkhorst,

529 F.2d 943 (9th Cir. 1976)...................................................................................................... 15

18 Savino v. Computer Credit, Inc.,

19

172 F.R.D. 346 (E.D.N.Y. 1997), aff’d, 164 F.3d 81 (2d Cir. 1998)......................................... 21

Staton v. Boeing,

20

327 F.3d 938 (9th Cir. 2003)..................................................................................................... 22

21 Ste. Marie v. Eastern Railroad Assoc.,

72 F.R.D. 443 (S.D. N.Y. 1976), rev’d on other grounds, 650 F.2d 395 (2d Cir. 1982) .......... 25

22 Stender v. Lucky Stores, Inc.,

23

No. C 88-1467 MHP, 1990 WL 192734 (N.D. Cal. June 8, 1990)............................................ 22

Torrisi v. Tucson Elec. Power Co.,

24

8 F.3d 1370 (9th Cir. 1993)........................................................................................................ 27

25 Weinberger v. Kendrick,

698 F.2d 61 (2d Cir. 1982)......................................................................................................... 16

26 Young v. Polo Retail, LLC,

27

No. C-02-4546 VRW, 2006 WL 3050861 (N.D. Cal. Oct. 25, 2006) ....................................... 16

28

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1

TABLE OF AUTHORITIES

(continued)

2

Page

3

STATUTES

29 U.S.C. § 621, et seq..................................................................................................................... 3

4 42 U.S.C. § 1981 ........................................................................................................................ 3, 20

5 42 U.S.C. § 2000e, et seq. ................................................................................................................ 2

6 California Gov’t Code § 12940........................................................................................................ 2

7 Federal Rule of Civil Procedure

RULES

8

Rule 23(g)(1)(C)(i)..................................................................................................................... 25

Federal Rules of Civil Procedure

9

Rule 23(a)....................................................................................................................... 20, 21, 23

10 Federal Rules of Civil Procedure 23 ........................................................................................ 14, 26

11 Federal Rules of Civil Procedure 23(a)(4) ............................................................................... 23, 25

Federal Rules of Civil Procedure

12

23(e) ....................................................................................................................................... 1, 14

13 Federal Rules of Civil Procedure

Rule 23(a)(1) ........................................................................................................................ 20, 21

14 Federal Rules of Civil Procedure

15

Rule 23(a)(2) .............................................................................................................................. 21

Federal Rules of Civil Procedure

16

Rule 23(b) ............................................................................................................................ 20, 23

17 Federal Rules of Civil Procedure

Rule 23(b)(2)........................................................................................................................ 23, 24

18 Federal Rules of Civil Procedure

19

Rule 23(b)(3).............................................................................................................................. 24

Federals Rule of Civil Procedure

20

Rule 23(c)(3) .............................................................................................................................. 26

21 Federals Rule of Civil Procedure

Rule Rule 23(c)(2)(B) ................................................................................................................ 26

22 Federl Rule of Civil Procedure

23

Rule 23(g)(1)(C)(ii).................................................................................................................... 25

Fedral Rule of Civil Procedure

24

Rule 23(g) .................................................................................................................................. 25

25

TREATISES

1 Newberg § 3.5 ............................................................................................................................. 20

26 4 Herbert B. Newberg and Alba Conte,

27

Newberg on Class Actions, (4 ed. 2002)§ 11.22, et seq............................................................. 14

28

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1

TABLE OF AUTHORITIES

(continued)

2

Page

3 4 Newberg

§ 11.26....................................................................................................................................... 18

4 4 Newberg

5

§ 11.27.................................................................................................................................. 14, 20

4 Newberg

6

§ 11.41........................................................................................................................................ 15

7 4 Newberg

§ 11:24 et seq. ............................................................................................................................ 15

8 Manual for Complex Litigation

9

§ 21.632...................................................................................................................................... 16

Manual for Complex Litigation

10

§ 21:62........................................................................................................................................ 16

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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1

PLAINTIFF’S MEMORANDUM AND POINTS OF AUTHORITIES

2

INTRODUCTION

3

The parties respectfully seek certification of a Settlement Class and request that the Court

4 grant preliminary approval of the Settlement and Settlement Agreement, attached as Exhibit 1 to

5 the Proposed Order. Subject to Court approval, the parties have settled Plaintiff’s and Class

6 Members’ claims for comprehensive injunctive relief and significant monetary relief of

7 approximately $16,000,000. The proposed Settlement Agreement resolves all of Plaintiff’s and

8 Class Members’ outstanding claims except the non-class claims asserted individually by Plaintiff 9 Jaffe. See Second Amended Complaint, ¶¶ 113-121 (Ms. Jaffe’s individual claims).1

10

The parties’ proposed Settlement satisfies all of the criteria for preliminary approval under

11 federal law. The Settlement was negotiated at arms’ length and falls well within the range of

12 possible approval. Not only is the monetary relief provided to Class Members substantial, but the

13 extensive injunctive relief provided for in the Settlement Agreement will materially advance the

14 goal of equal employment opportunity for African American and Latino Financial Advisors and

15 Registered Financial Advisor Trainees at MS-GWMG. Accordingly, the parties respectfully

16 request that the Court grant preliminary approval of the proposed Settlement Agreement (attached

17 as Exhibit 1 to the Proposed Order), direct distribution of Class Notice and a Claim Form

18 (attached as Exhibits 2 and 3 to the Proposed Order), and approve the proposed schedule for final

19 approval. The parties also respectfully request that in connection with the settlement process, the

20 Court certify a Settlement Class consisting of all African American and Latinos who were

21 employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth

22 Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time

23 between October 12, 2002 and the date of the preliminary approval of the Settlement.

24

25

26

27

1 Denise Williams has informed Class Counsel that she intends to opt out, and to file her own individual lawsuit alleging both the claims she has brought in the complaint and her attached

28

EEOC charge, including an age discrimination claim not addressed in the complaint. Dermody Decl. ¶ 35.

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1

FACTUAL AND PROCEDURAL BACKGROUND

2 I. Litigation History

3

After an extensive investigation, Ms. Jaffe filed a Class Action Complaint on June 22,

4 2006, asserting claims on behalf of a nationwide Class of female Financial Advisors employed by

5 MS-GWMG and a Subclass of all female Financial Advisors employed by MS-GWMG in

6 California. The Complaint asserted claims for gender discrimination under Title VII, 42 U.S.C.

7 § 2000e, et seq., and, with respect to California Subclass, the California Fair Employment and

8 Housing Act, Cal. Gov’t Code § 12940 (“FEHA”). The Complaint also asserted non-class claims

9 of age discrimination on behalf of Ms. Jaffe individually under the Age Discrimination in

10 Employment Act of 1967, 29 U.S.C. § 621, et seq. and under California’s FEHA. (Complaint at 11 ¶¶ 51-58.)2

12

A First Amended Complaint adding Plaintiff Denise Williams as a class representative

13 and her individual claims of race discrimination under Title VII, Michigan’s Elliot-Larsen Civil

14 Rights Act, and 42 U.S.C. § 1981 was filed on October 12, 2006. The First Amended Complaint

15 also added a Subclass of female Financial Advisors who reside in Michigan under Michigan’s

16 Elliot-Larsen Civil Rights Act, M.C.L.A. § 37.2101, et seq.

17

Plaintiff’s counsel continued to investigate claims of race discrimination against African

18 American and Latino Financial Advisors and Registered Financial Advisor Trainees at Morgan

19 Stanley. In January of 2007, Ms. Williams also informed Morgan Stanley of her intention to file

20 a Second Amended Complaint to add allegations that the company engaged in class-wide race

21

22

2 Simultaneously with the filing of the original Complaint by Ms. Jaffe, another class action complaint against Morgan Stanley alleging gender discrimination against a class of female

23

Financial Advisors in violation of Title VII was filed in the United States District Court in the District of Columbia, Augst-Johnson v. Morgan Stanley DW, Inc., Case No. 06-C-01142-RWR.

24

Because of the advanced stage of settlement talks in that putative class action, the Court stayed the class claims of gender discrimination in this case on January 19, 2007, until August 6, 2007.

25

The parties in the Augst-Johnson matter eventually reached a tentative settlement of the nationwide gender claims and received preliminary approval of the gender class settlement on

26

July 17, 2007. The court approved the Augst-Johnson settlement following a final approval hearing on October 11, 2007. The class-wide gender discrimination claims of Plaintiffs Jaffe and

27

Williams will therefore be addressed in connection with the settlement of the Augst-Johnson gender class action in the District of Columbia. Jaffe and Williams thus no longer pursue their

28

gender discrimination claims or seek certification of a class of female Financial Advisors in this case.

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1 discrimination. MS-GWMG agreed to toll the race claims and stay the filing of the Second

2 Amended Complaint to pursue settlement discussions with Plaintiff Williams in hopes of

3 resolving the class-wide race claims.

4

In connection with settlement discussions, MS-GWMG produced a substantial number of

5 documents (including vast amounts of data) from which Plaintiff’s counsel’s experts conducted

6 numerous data analyses. This information, along with witness interviews and information

7 regarding MS-GWMG policies, alerted Plaintiff to the scope of systemic problems affecting

8 African American and Latino Financial Advisors and Registered Financial Advisor Trainees.

9

Plaintiff Curtis-Bauer subsequently joined the case. On August 2, 2007, Plaintiff filed a

10 Second Amended Complaint adding Curtis-Bauer as a class representative. See Second Amended

11 Complaint at ¶ 19. Ms. Curtis-Bauer alleges, on behalf of herself and others similarly situated,

12 that Morgan Stanley discriminated against African American and Latino Financial Advisors and

13 Registered Financial Advisor Trainees. Specifically, she alleges discrimination against African

14 Americans and Latinos in compensation, account distributions, partnerships, business

15 opportunities, and other terms and conditions of employment.

16

Consistent with the Second Amended Complaint, the Settlement Class defined herein and

17 in the Settlement Agreement consists of all African Americans and Latinos who were employed

18 as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth

19 Management Group of Morgan Stanley & Co. Incorporated or its predecessor at any time

20 between October 12, 2002 and the date of the preliminary approval of the settlement. See

21 Settlement Agreement, § III.D.1.

22

As described herein, the parties have conducted a thorough examination and investigation

23 of the facts and law relating to Plaintiff’s claims. This investigation informed counsel regarding

24 the strengths and weaknesses of their respective positions and provided them a full opportunity to

25 assess the litigation risks presented in this case. Accordingly, approval of this settlement is

26 appropriate.

27

28

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1 II. Settlement Negotiations

2

The parties participated in negotiations with the assistance of an experienced mediator,

3 Hunter Hughes, Esq. of Atlanta, Georgia. Counsel for the parties are experienced class action

4 lawyers who retained Mr. Hughes for his expertise in mediating many complex actions, including

5 those involving race discrimination in employment. Mr. Hughes also has familiarity with MS-

6 GWMG’s practices through his work as a mediator in the Augst-Johnson action, the related

7 gender discrimination case against MS-GWMG. The parties here had multiple face-to-face

8 negotiating sessions in March, July and August 2007. Dermody Decl. ¶¶ 36-39. Under the

9 supervision of the mediator, the parties’ negotiations were conducted at arms’ length. Id. The

10 terms of the parties’ agreement following those negotiations are contained in the Settlement

11 Agreement, attached as Exhibit 1 to the proposed preliminary approval order, and are summarized

12 below.

13

SUMMARY OF SETTLEMENT TERMS

14

The proposed Settlement Agreement provides comprehensive injunctive relief and

15 substantial monetary relief.

16 I. Injunctive Relief

17

MS-GWMG has agreed to implement comprehensive relief addressing the claims in this

18 action. During the five-year period of the Settlement Agreement, the parties anticipate that MS-

19 GWMG will spend approximately $7,500,000 on diversity efforts, including programs for

20 training, re-education, and other development programs for African American and Latino

21 Financial Advisors and Registered Financial Advisor Trainees. MS-GWMG will also retain two

22 jointly-appointed Industrial Psychologists, a Diversity Monitor and employees who will work on

23 diversity programs. The Settlement Agreement also obligates MS-GWMG to the following

24 injunctive relief:

25

A. Hiring: MS-GWMG will maintain its commitment to increase diversity in the

26 Financial Advisor position, including the representation rate of Latino and African American

27 Financial Advisors. MS-GWMG will maintain a dedicated position within MS-GWMG whose

28 primary function is the sourcing and recruitment of qualified diverse candidates, including

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1 qualified Latinos and African Americans. See Settlement Agreement, § VII.B. MS-GWMG will

2 work with the Industrial Psychologists to identify and develop sourcing alternatives for qualified

3 Latino and African American Financial Advisors, including but not limited to, developing

4 relationships with organizations and educational institutions with high representation rates of

5 Latinos and African Americans and historical connections with those communities. MS-GWMG

6 will continue to source qualified diverse candidates for its various entry-level positions, including

7 the Summer Internship Program, the Richard B. Fischer Scholarship Program and/or successor or

8 similar programs. Furthermore, MS-GWMG will inform any third-party recruiter or executive

9 search firm it utilizes in its sourcing efforts that MS-GWMG expects that the vendor will present

10 a diverse slate of candidates, where possible.

11

B. Development Opportunities. MS-GWMG will work with the Industrial

12 Psychologists to develop initiatives designed to attract and retain African Americans and Latinos

13 to MS-GWMG as Financial Advisors, and to enhance their success. See Settlement Agreement,

14 § VII.E. The Industrial Psychologists shall make recommendations for increasing participation of

15 African American and Latino Financial Advisors and Registered Financial Advisor Trainees in

16 development opportunities. MS-GWMG will provide additional resources to assist Registered

17 Financial Advisor Trainees in obtaining the Series 7 registration (and passing the Series 7 test)

18 necessary to be a licensed broker.

19

MS-GWMG will also conduct exit interviews of Financial Advisors and Registered

20 Financial Advisor Trainees who terminate voluntarily and will report the results annually to the

21 Industrial Psychologists, the jointly-appointed Diversity Monitor and individuals within MS-

22 GWMG responsible for hiring Financial Advisors and Registered Financial Advisor Trainees.

23 See Settlement Agreement, § VII.E.

24

MS-GWMG will maintain its commitment to the biannual Minority Business Exchange.

25 See Settlement Agreement, § VII.E.

26

C. Diversity-Related Compensation: Branch Manager compensation will have a

27 meaningful diversity component designed to measure and reward efforts at diversifying

28 representation rates in the Financial Advisor position including the recruiting, training, and

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1 retaining qualified African American and Latino Financial Advisors. Id. at § VII.C. Field sales

2 management will be required to report on their best efforts and results in the areas of sourcing,

3 recruiting, mentoring, training and promoting a diverse workforce, including qualified African

4 American and Latino Financial Advisors and Registered Financial Advisor Trainees. Field sales

5 management will be reviewed and held accountable (including through bonus compensation) by

6 senior MS-GWMG management for these efforts. Id. The Diversity Monitor will review the

7 diversity-related quarterly self-assessment for field sales management and the diversity

8 component of the Branch Manager compensation process. Id.

9

D. Branch Management Posting. MS-GWMG will post all available field sales

10 management positions on its Internal Job Bank, as well as minimum requirements for

11 qualification for those management positions, for a minimum of five (5) business days. See

12 Settlement Agreement, § VII.C. MS-GWMG will also develop and implement a computerized

13 system to generate an electronic mail notification to Financial Advisors who request to be

14 informed of new management job postings. Id. Either the hiring manager or Human Resources

15 will follow up with each applicant/candidate for field sales management positions in a timely

16 manner. Id.

17

E. Branch Management Training. MS-GWMG has developed and implemented a

18 comprehensive management assessment and development program to make the assessment and

19 selection process for branch managers formalized and transparent. See Settlement Agreement,

20 § VII.C. MS-GWMG will provide all management-level field personnel with diversity training

21 no less than every other year. Id. at § VII.C. MS-GWMG will also provide diversity-related

22 training to field sales branch management that incorporates elements of the Implicit Association

23 Test or similar tool agreed upon by the parties.

24

F. Account Distribution. The Power Ranking system, which is used to determine

25 account distributions, will be revised to ensure fairness by reducing reliance on historical factors

26 and weighting more heavily criteria that reflect recent performance. See Settlement Agreement,

27 § VII.D.1-2. MS-GWMG will provide the methodology for calculating the Power Rankings to

28 each Financial Advisor upon hire and will make it available to all Financial Advisors

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1 electronically. Id. at § VII.D.2.b. MS-GWMG will also inform each Financial Advisor of his or

2 her individual ranking at the time an account distribution is made. Id. at § VII.D.2.c. The actual

3 distribution of a departing Financial Advisor’s book will be made available to a Financial Advisor

4 in the Branch confidentially upon request. Id.

5

After a full calendar year has passed following implementation of these new Power

6 Ranking criteria, the Industrial Psychologists will review how the process has been operating,

7 including all exceptions and complaints. In addition, the Industrial Psychologists will review

8 annually the actual account distributions and related compensation data and the rankings of

9 African American and Latino Financial Advisors on each of the individual factors and use such

10 information in considering recommendations, if any, for changes to the Power Ranking formula.

11 See Settlement Agreement, § VII.D.2.d. They will report their findings and recommendations to

12 the Diversity Monitor on an annual basis. Id. Class counsel and counsel for Morgan Stanley will

13 discuss annually the findings of the Industrial Psychologists and whether further appropriate

14 changes to the Power Ranking criteria or distribution process should be made. Id.

15

MS-GWMG will issue a comprehensive account distribution policy statement that will

16 include policies covering the distribution of the accounts of departing Financial Advisors, retiring

17 Financial Advisors, departing partners, and leads, call-ins, and walk-ins. See Settlement

18 Agreement, § VII.D.3.a. MS-GWMG will also train Branch Managers on the policy. Id. MS-

19 GWMG will enhance its technology to allow its account distribution process to be computer

20 automated, subject to branch manager review to ensure compliance with regulatory requirements.

21 The results of all account distributions shall be stored and readily retrievable for monitoring to

22 ensure compliance with account distribution policies Id. at § VII.D.3.d.

23

Any book of business formerly serviced by a retiring or departing Financial Advisor,

24 serviced by a producing manager who is transferred to a non-producing branch manager position,

25 or serviced by a Financial Advisor who moves to a non-producing sales manager position, will be

26 distributed through the Power Ranking system unless a Joint Production Arrangement/Agreement

27 has been in effect for twenty-four (24) months or longer. See Settlement Agreement, § VII.D.4.a;

28 VII.D.5.a; § VII.D.7. The Industrial Psychologists will also make recommendations for

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1 increasing participation of African Americans and Latinos in the receipt of retiring Financial

2 Advisor’s books of business. Id. at § VII.D.4.b; § VII.D.5.b.

3

Each Branch Office will implement a “Financial Advisor of the Day” program in which

4 all client prospects who either walk in or telephone the branch and who are seeking a Financial

5 Advisor shall be directed to the Financial Advisor serving as the Financial Advisor of the Day.

6 See Settlement Agreement, § VII.D.6.a-f.

7

Any disputes between MS-GWMG and a Financial Advisor or a Registered Financial

8 Advisor Trainee concerning any account distribution will initially go through MS-GWMG’s

9 internal complaint process, which includes access to mediation and tolling of administrative

10 charge deadlines. See Settlement Agreement, § VII.D.8.

11

G. Complaint Process and Training. The complaint process will be communicated

12 in writing to all Financial Advisors and Registered Financial Advisor Trainees upon hire and

13 annually. See Settlement Agreement, § VII.F.

14

MS-GWMG will provide its Human Resources staff supporting Financial Advisors and

15 Registered Financial Advisor Trainees with appropriate training regarding compliance with state,

16 federal, and local EEO laws; MS-GWMG’s anti-discrimination and harassment policies; the

17 Settlement Agreement; and the best practices for complaint investigation and resolution. See

18 Settlement Agreement, § VII.F. Human Resources will be trained to treat all complaints or

19 inquiries as confidentially as legally possible and to carry out their duties in a manner consistent

20 with the law. In addition, Human Resources will implement controls designed to ensure that only

21 non-complaining employees or managers with a need to know will be advised of a complaint or

22 investigation. In all instances, upon being informed of a complaint or investigation, the non-

23 complaining employees and managers so informed will be reminded of MS-GWMG’s policy

24 against retaliation. MS-GWMG will retain documents sufficient to show complaints by African

25 American and Latino Financial Advisors and Registered Financial Advisor Trainees of race or

26 color discrimination, race or color bias, and/or retaliation related to such complaints for the term

27 of the Settlement Agreement. Id.

28

H.

Communications. MS-GWMG shall distribute its Non-Discrimination

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1 and Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and

2 then on an annual basis via email from Morgan Stanley's CEO. See Settlement Agreement,

3 § VII.A. The President and COO of MS-GWMG will also issue a separate statement annually in

4 support of the Policy and its underlying tenets.

5

I. Appointments. The parties will jointly appoint a Diversity Monitor who shall be

6 external to and independent of the MS-GWMG, but will report directly to the COO and President

7 of MS-GWMG. The Diversity Monitor will monitor MS-GWMG’s effort to carry out the terms

8 of the Settlement Agreement, and report to Lead Counsel and MS-GWMG semi-annually. See

9 Settlement Agreement, § VII.G.1.a-i. The Diversity Monitor will monitor by (a) receiving

10 monthly reports regarding complaints of Financial Advisors and Registered Financial Advisor

11 Trainees alleging race discrimination and resolution of investigations of such complaints through

12 the CARE program or otherwise; (b) reviewing quarterly reports regarding the branches in which

13 Branch Managers have filed exception reports reflecting a deviation from the account distribution

14 process; (c) reviewing account distribution data, exception reports, and complaints to monitor

15 policy compliance and, if potential non-compliance is identified, will inform MS-GWMG and

16 Class Counsel (and MS-GWMG shall be required to take appropriate corrective actions to address

17 instances of non-compliance); (d) reviewing the diversity-related quarterly self-assessment

18 process for field sales management and the diversity component of the branch manager

19 compensation process; (e) monitoring bi-annual training of management on EEO policies, and

20 policies against discrimination and retaliation, and ensure that the training agreed to was

21 implemented; (f) reviewing how Human Resources handles investigations and the resolution

22 process for inquiries and complaints; (g) reviewing the annual results of the exit interviews of

23 African American and Latino Financial Advisors and Registered Financial Advisor Trainees;

24 (h) providing reports to Class Counsel and MS-GWMG at least semi-annually regarding the items

25 monitored, including the analysis of the account distribution system; and (i) maintaining records

26 for the term of this Settlement Agreement. Id.

27

The parties will also jointly appoint Industrial Psychologists Dr. Kathleen Lundquist and

28 Dr. Irwin Goldstein to work with MS-GWMG and Class Counsel to improve the representation

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1 and success rates of African Americans and Latinos in the Financial Advisor and Registered

2 Financial Advisor Trainee positions. See Settlement Agreement, § VII.G.2.a. The Industrial

3 Psychologists will monitor the implementation of the programs, policies and initiatives set forth

4 in the Settlement Agreement and will report their findings to the Diversity Monitor. Id. at

5 § VII.G.2.b. They will report annually on the representation rates and efforts to recruit African

6 Americans and Latinos in the Registered Financial Advisor Trainee and Financial Advisor

7 positions and present recommendations to a senior executive panel of MS-GWMG and Class

8 Counsel. Id. at § VII.G.2.b-c. The Industrial Psychologists will also review how the revised

9 account distribution process has been operating and provide the Diversity Monitor with findings

10 of any deviations from the account distribution system. Id. at § VII.G.2.d. They will make

11 recommendations (a) concerning sourcing and recruitment strategies and programs to improve the

12 representation rates of African Americans and Latinos in the Financial Advisor and Registered

13 Financial Advisor Trainee positions; (b) for increasing the Series 7 passage rates of African

14 American and Latino Registered Financial Advisor Trainees; (c) for increasing the production

15 and earnings of African American and Latino Financial Advisors, including policies and practices

16 with respect to training, development, and mentoring; (d) for increasing participation of African

17 American and Latino Financial Advisors in the receipt of retiring Financial Advisors’ books of

18 business; (e) for increasing participation of African American and Latino Financial Advisors in

19 partnerships; (f) concerning policies and practices with respect to training, development, and

20 mentoring, that will enhance opportunities for African American and Latino Registered Financial

21 Advisors and Financial Advisor Trainees; (g) concerning a mentoring program for all Registered

22 Financial Advisor Trainees and Financial Advisors; and (h) concerning a system of semi-annual

23 internal data collection and a monitoring process.

24

J. Term of Settlement Agreement: The Settlement Agreement will be for five

25 years. During that time, as set forth above, MS-GWMG will collect data regarding hiring,

26 retention, compensation, partnerships, account distributions, and complaints of race or color

27 discrimination, among other things. See Settlement Agreement, § IX.A. MS-GWMG, with input

28 from the Industrial Psychologists and consent from Class Counsel, will create and implement a

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1 system for monitoring compliance with the policies designed under the Settlement Agreement,

2 including the account distribution policy. Id. at § IX.B. The Diversity Monitor will provide

3 Class Counsel with semi-annual reports regarding the data collected through the monitoring

4 system, including the analysis of the account distribution system. Id. at § IX.C. MS-GWMG and

5 Class Counsel will meet at least once every six months regarding compliance. Id. at § IX.D.

6 II. 7

Monetary Relief In addition to the significant, comprehensive injunctive relief described above, MS-

8 GWMG will establish a Settlement Fund of $16 million plus interest at the rate of 5% per annum

9 from the date of Preliminary Approval until the deposit into the Settlement Fund less the specified

10 credits for opt outs, if any. See Settlement Agreement, § § IV.C.9 and VIII.A. This sum includes

11 payment for (a) all amounts to be paid to Class Members, including the Named Plaintiff; (b) all

12 attorney’s fees and costs awarded by the Court; and (c) all costs in connection with the Settlement

13 Fund. Id. The Settlement Sum does not include Morgan Stanley’s share of taxes or contributions

14 (i.e., FICA, FUTA, SUTA and Medicare) which will be paid separately by Morgan Stanley to the

15 Claims Administrator in addition to the $16 million fund. Id.

16

The Claims Administrator will serve as Trustee of the Settlement Fund and will act as a

17 fiduciary in the handling, management and distribution of the Settlement Fund. See Settlement

18 Agreement, § VIII.B. Although the Claims Administrator will provide MS-GWMG’s counsel

19 and payroll department with the names and social security numbers of those Class Members who

20 submitted Claim Forms (“Claimants”), the identity of the Claimants and the content of the

21 Claims Forms will otherwise be confidential. Id. at § VIII.C.

22

Morgan Stanley, through its counsel, will provide the dates each Claimant was employed

23 by MS-GWMG as a Financial Advisor and/or a Registered Financial Advisor Trainee and

24 earnings information for those Claimants to the Claims Administrator, who will in turn provide

25 the information to each Claimant. See Settlement Agreement, § VIII.C. Any disagreement

26 regarding the accuracy of this information shall be resolved by the Special Master. Id.

27

Under the Settlement, 85% of the Class monetary fund will be paid to Claimants based on

28 their responses to a Claim Form. The responses will generate points for Claimants based on the

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1 number of weeks they worked during the class period, with the potential for an enhancement of

2 payment if on their Claim Form they describe extraordinary emotional distress, termination,

3 and/or constructive discharge. The allocation formula provides that both Financial Advisors and

4 Registered Financial Advisor Trainees will receive 1 point for each week worked during the class

5 period. The enhancement for emotional distress provides that the Special Master may allocate up

6 to 50 additional points for extraordinary emotional distress as described on the Claim Form. See

7 Settlement Agreement, § VIII.D.2. The enhancement for termination/constructive discharge

8 provides that the Special Master may allocate up to 50 additional points for responses to questions

9 on the Claim Form about termination and constructive discharge. See id.

10

Fifteen percent of the Class monetary fund will be paid to Claimants based upon an

11 Earnings Regression Analysis developed by Class Counsel’s statistical expert. Class Members

12 whose annual earnings in any year during the class period fall two standard deviations below the

13 mean earnings curve for Caucasian Financial Advisors and Registered Financial Advisor Trainees

14 in their branch are eligible for a monetary award under the Earnings Regression Component. See

15 Settlement Agreement, § VIII.D.2. Eligible Class Members will be paid based upon the Class

16 Member’s earnings during that year controlling for (a) the Class Member’s length of tenure at

17 Morgan Stanley; (b) the Class Member’s registration date; and (c) the Class Member’s branch

18 office location. Id.

19

The Special Master will determine the monetary award to be paid to each Claimant from

20 the Settlement Fund. See Settlement Agreement, § VIII.D.3.a. The Special Master will submit

21 the proposed allocation to the Court under seal for in camera review. Id., § VIII.D.3.c. The

22 Claims Administrator will then send Notice and/or Releases to the Claimants and make awards

23 after Releases are executed. Id. § VII.D.3.d. Any undistributed funds that remain after six

24 months from the mailing of the Notice of Award due to unsubmitted releases shall be distributed

25 to 501(c)(3) organizations advancing opportunities for African Americans and/or Latinos,

26 including opportunities in the financial services industry, as jointly selected by Class Counsel and

27 MS-GWMG. Id.

28

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1

The Settlement Agreement provides that the Special Master shall maintain the allocation

2 list for a period of five years. See Settlement Agreement, § VIII.D.3.e. MS-GWMG will not be

3 permitted to have access to it except upon notice to Class Counsel and a showing of good cause.

4 Id.

5

CLASS ACTION SETTLEMENT PROCEDURE

6

Judicial proceedings under Federal Rule of Civil Procedure 23 have led to a defined

7 procedure and specific criteria for settlement approval in class action settlements. The Rule 23(e)

8 settlement approval procedure describes three distinct steps:

9

(1) Certification of a settlement class and preliminary approval of

the proposed settlement after submission to the Court of a written

10

motion for preliminary approval;

11

(2) Dissemination of mailed and/or published notice of settlement

to all affected Class members; and 12

(3) A formal fairness hearing, or final settlement approval hearing,

13

at which Class members may be heard regarding the settlement, and

at which evidence and argument concerning the fairness, adequacy,

14

and reasonableness of the settlement is presented.

15

These procedures safeguard Class members’ procedural due process rights and enable the

16 Court to fulfill its role as the guardian of class interests. See 4 Herbert B. Newberg and Alba

17 Conte, Newberg on Class Actions, § 11.22, et seq. (4th ed. 2002).

18

With this Motion, the parties request that the Court take the first step in the settlement

19 approval process and grant certification of a Settlement Class and preliminary approval of the

20 proposed Settlement and Settlement Agreement.

21

Settlement Class certification is appropriate at the preliminary approval stage where, as

22 here, the proposed Settlement Class — as it is defined in the parties’ Settlement Agreement —

23 has not previously been certified by the Court, and where, as here, the Plaintiff asserts the

24 requirements for certification are met and Defendant, for settlement purposes only, consents to

25 Settlement Class certification. 4 Newberg § 11.27; Settlement Agreement, § III.D.1. The

26 practical purpose of the Settlement Class certification is to avoid the costs of litigating class status

27 while facilitating a global settlement, to ensure distribution to all Settlement Class members of the

28

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1 notice of the terms of the proposed Settlement Agreement, and to set the date and time of the final

2 approval hearing. In re Gen. Motors Corp. Pick-up Truck Fuel, 55 F.3d 768, 784 (3d Cir. 1995).

3

The parties also request that the Court appoint Plaintiff’s counsel as Class Counsel and the

4 Named Plaintiff as adequate Class Representative. The additional rulings sought on this Motion

5 — approving the form, content and distribution of Class Notice, and scheduling a formal fairness

6 hearing — facilitate the settlement approval process, and are also typically made at the

7 preliminary approval stage. 4 Newberg § 11:24, et seq.

8 9 I. 10

ARGUMENT Preliminary Approval of the Settlement Is Appropriate It is well established that the law favors and prefers the compromise and settlement of

11 class action suits. Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982),

12 cert. denied, Byrd v. Civil Serv. Comm’n, 459 U.S. 1217 (1983); Safeco Corp. v. Van Bronkhorst,

13 529 F.2d 943, 950 (9th Cir. 1976) (emphasizing that the policy in favor of settlement is

14 “particularly true in class actions”); see also 4 Newberg § 11.41 (citing cases); Churchill Village,

15 L.L.C. v. General Elec., 361 F.3d 566, 576 (9th Cir. 2004) (quoting Class Plaintiffs v. City of

16 Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)); Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.

17 1977) (“the policy favoring settlement is even stronger in view of the emphasis placed upon

18 voluntary reconciliation.”).

19

The approval of a proposed settlement class action is a matter of discretion for the trial

20 court. Churchill, 361 F.3d at 575. In exercising that discretion, however, the court should

21 recognize that as a matter of sound policy, settlements of disputed claims are encouraged and a

22 settlement approval hearing should “not be turned into a trial or rehearsal for trial on merits.”

23 Officers for Justice, 688 F.2d at 650; see also Boyd v. Bechtel Corp., 485 F. Supp. 610, 617 (N.D.

24 Cal. 1979). Furthermore, courts must give “proper deference to the private consensual decision

25 of the parties,” since “the court’s intrusion upon what is otherwise a private consensual agreement

26 negotiated between the parties to a lawsuit must be limited to the extent necessary to reach a

27 reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion

28 between, the negotiating parties, and the settlement, taken as a whole, is fair, reasonable and

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1 adequate to all concerned.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1988). If

2 the settlement was achieved through experienced counsels’ arm’s-length negotiations, in the

3 absence of fraud, collusion or the like, the Court should be hesitant to substitute its own judgment

4 for that of counsel. Linney v. Cellular Alaska P’ship, Nos. C-96-3008 DLJ, C-97-0203 DLJ,

5 C-97-0425 DLJ, C-97-0457 DLJ, 1997 W.L. 450064, at *5 (N.D. Cal. July 18, 1997) (Jensen, J.);

6 Weinberger v. Kendrick, 698 F.2d 61, 74 (2d Cir. 1982).

7

To grant preliminary approval of this class action settlement, the Court need only find that

8 the settlement falls within the range of possible approval, or “the range of reasonableness.” See,

9 e.g., Young v. Polo Retail, LLC, No. C-02-4546 VRW, 2006 WL 3050861, at *5 (N.D. Cal. Oct.

10 25, 2006); In re DJ Orthopedics, Inc. Sec. Litig., No. 01-CV-2238KRBB, 2004 W.L. 1445101, at

11 *3 (S.D. Cal. June 21, 2004); Boyd, 485 F. Supp. at 615; Alaniz v. California Processors, Inc.,

12 73 F.R.D. 269, 273 (N.D. Cal. 1976). The Manual for Complex Litigation, Fourth (Fed. Judicial

13 Center 2004) (“Manual”) characterizes the preliminary approval stage as an “initial evaluation”

14 of the fairness of the proposed settlement made by the court on the basis of written submissions

15 and informal presentation from the settling parties. Manual, §21.632. The Manual summarizes

16 the preliminary approval criteria as follows:

17

Fairness calls for a comparative analysis of the treatment of the

class members vis-à-vis each other and vis-à-vis similar individuals

18

with similar claims who are not in the class. Reasonableness

depends on an analysis of the class allegations and claims and the

19

responsiveness of the settlement to those claims. Adequacy of the

settlement involves a comparison of the relief granted to what class

20

members might have obtained without using the class action

process. 21

22 Id. at § 21:62.

23

A. The Terms of the Proposed Settlement Are Fair and Within the Range of

Reasonableness 24

25

In determining whether a settlement is fair and reasonable, the court should consider

26 several factors, including the experience and views of counsel; whether the settlement is the

27 product of good faith negotiations conducted at arms’ length; the amount offered in settlement;

28 and the risks, complexity and duration of further litigation. Roberts v. Heim, Nos. C 84-8069

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1 THE, C 87-6174 THE, C 88-3373 THE, 1991 WL 427888, at * 2 (N.D. Cal. Aug. 28, 1991). For

2 the reasons set forth below, the Court should find that these factors weigh in favor of preliminary

3 approval of the Settlement Agreement.

4

1. The Settlement Is the Product of Experienced Counsels’ Serious,

Arms’ Length, Informed Negotiations 5

6

Each lawyer representing the Plaintiff has had substantial experience in employment

7 discrimination class actions. See Dermody Decl., Ex. A; Klein Decl., Ex. B; Finberg Decl.,

8 Ex. C. Their assessment that the settlement is reasonable and fair should be given “significant

9 weight.” In re United Energy Corp. Solar Power Modules Tax Shelter Investments, Nos. CV 87-

10 3962KN(GX), CV 86-3538KN(GX), 1989 WL 73211, at *3 (C.D. Cal. March 9, 1989); see also

11 Boyd, 45 F. Supp. at 622; Ellis v. Naval Air Rework Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980);

12 Linney, 1997 W.L. 450064, at *5.

13

Moreover, as described in the Dermody Declaration ¶¶ 28-33, Plaintiff’s counsel

14 vigorously investigated the claims asserted against MS-GWMG by collecting information about

15 MS-GWMG’s practices from the Named Plaintiff and numerous unnamed Class Members.

16 Plaintiff also received information from MS-GWMG related to the representation of African

17 American and Latino Financial Advisors and Registered Financial Advisor Trainees at MS-

18 GWMG, their retention rates, and their compensation. Using that data, Plaintiff’s counsels’

19 statistical expert performed representation and compensation analyses, as well as a damages

20 analysis. Experts for MS-GWMG conducted similar analyses. These expert calculations formed

21 the basis for negotiations regarding the monetary terms of the settlement. As a result of the

22 complete and substantial investigation of the claims and the informal discovery that was

23 conducted, the parties negotiated the proposed settlement with complete knowledge regarding the

24 strengths and weaknesses of the case and the amounts necessary to compensate class members for

25 the harm suffered.

26

Further, the settlement in this case resulted only after extensive arms’ length settlement

27 negotiations and under the supervision of experienced mediator Hunter Hughes. See Dermody

28 Decl. at ¶¶ 36-39. The negotiations were protracted and the mediation itself required multiple

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1 lengthy sessions. In sum, the proposed settlement is the non-collusive product of the parties’

2 well-intentioned efforts to avoid protracted litigation. All of these factors weigh in favor of

3 finding the settlement reasonable and in favor of its approval.

4

2. The Proposed Settlement Amount and the Allocation Process are Fair

and Reasonable 5

6

The determination of a “reasonable” settlement is not susceptible to a mathematical

7 equation yielding a particular sum. Rather, settlements may fall within a range of reasonableness.

8 In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1078 (N.D. Cal. 2007) (Walker, J.);

9 4 Newberg § 11.26.

10

Given that the proposed Settlement Agreement creates a $16 million Settlement Fund for

11 approximately 1300 unnamed Class Members, the proposed Agreement provides a significant

12 recovery to the Class and easily falls within the range of reasonableness.

13

Likewise, the proposed plan of allocation, which has both a Claim Form Survey

14 Component and an Earnings Regression Analysis Component, takes into account several factors,

15 including weeks worked, extraordinary emotional distress and termination/constructive discharge

16 claims to ensure that the ultimate division of the settlement proceeds among class members is fair

17 and reasonable, while at the same time preserving the intended efficiencies of class action

18 litigation. See Settlement Agreement, § VIII.D.

19

Under the weeks worked component, each Financial Advisor and Registered Financial

20 Advisor Trainee will receive one point for each week worked. The Claim Form Survey

21 Component takes into account the Claimant’s individual statements of race and/or color

22 discrimination, the Claimant’s individual statements supporting an award of compensatory

23 damages, and whether the Claimant has been terminated or constructively discharged. The

24 parties agree that the division of settlement proceeds that will be made with this allocation plan

25 will be fair and reasonable.

26

3. The Settlement’s Terms Provide Meaningful Injunctive Relief

27

As set forth above in detail, the Settlement Agreement provides significant and valuable

28 injunctive relief to the entire class, including the creation of a fair and transparent account

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1 distribution system, increased efforts at diversity training, increased efforts to hire, retain and

2 develop African American and Latino Financial Advisors, as well as the appointment of two

3 Industrial Psychologists and a Diversity Monitor to develop and monitor the programs created by

4 the Settlement Agreement.

5

4. Liability Is Contested, and the Settlement Provides Reasonable

Compensation for Class Members’ Damages in Light of the Risks of

6

Proceeding through Class Certification, Summary Judgment, Trial

and Appeal 7

8

Although the Plaintiff believe her claims have merit, she also recognizes that she would

9 face significant legal, factual, and procedural obstacles to recovering damages on her claims.

10 Defendant has available legal and factual grounds for defending this action. MS-GWMG denies

11 that its treatment of its African American or Latino Financial Advisors or Registered Financial

12 Advisor Trainees is unlawful or discriminatory, and contest the propriety of class certification

13 here. MS-GWMG would challenge Plaintiff’s claims at each step of litigation including at

14 summary judgment. Notwithstanding Plaintiff’s risks and MS-GWMG’s defenses, the overall

15 settlement commits Morgan Stanley to pay $16 million to compensate the class — a substantial

16 amount ensuring that the recoveries by the individual Class Members will be meaningful. In light

17 of the strengths and weaknesses of the case, Plaintiff’s counsel believe the settlement fits easily

18 within the range of reasonableness because it achieves significant benefits for the class in a case

19 where failure at trial is certainly possible. Class Members will also receive settlement benefits

20 faster than they would receive awards obtained after trial and likely appeal. By any measure, the

21 relief obtained is an excellent result for the Settlement Class.

22

5. Trial and Appeal of This Action Would Be Complex, Expensive and

Time Consuming, and Would Delay Recovery 23

24

Other factors considered by Courts in approving a settlement are the complexity, expense,

25 and likely duration of the litigation. Roberts, 1991 WL 427888, at *2; Hanlon, 150 F.3d at 1026;

26 Rosenburg v. Int’l Business Mach. Corp., No. CV 06-00430 PJH, 2007 WL 2043855, at *2 (N.D.

27 Cal. July 12, 2007); Glass v. UBS Fin. Serv., Inc., No. C-06-4068 MMC, 2007 WL 221862, at *3

28

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1 (N.D. Cal. January 26, 2007); Marshall v. Holiday Magic, Inc., 550 F.2d 1173, 1178 (9th Cir.

2 1977).

3

The factual and legal issues in this action are complex. The trial of Plaintiff’s class claims

4 (involving approximately 1300 class members) would require substantial preparation and

5 ultimately the presentation, at a minimum, of dozens of witnesses and numerous experts. In

6 contrast to the delay that would result from trial and likely appeal if liability is found, the

7 proposed Settlement Agreement will yield a certain, substantial, and prompt recovery for the

8 Class both in monetary relief and injunctive relief. Such a result will benefit the parties and the

9 court system.

10 II. 11

Provisional Certification of the Class Is Appropriate To grant preliminary approval of this class action settlement, this Court should also make

12 a determination that the proposed Settlement Class satisfies Rule 23(a)’s requirements of

13 numerosity, commonality, typicality and adequacy of representation, and at least one of the

14 subsections of Rule 23(b). See 4 Newberg § 11:27 (citing In re Gen. Motors Corp. Pick-up Truck

15 Fuel Tank Prod. Liab. Litig., 55 F.3d 768 (3rd Cir 1995)). As discussed below, all the

16 requirements of certification for settlement purposes are met for this proposed Settlement Class.

17

1. Numerosity Is Satisfied

18

The proposed Class is so numerous that “joinder of all members is impracticable.” Fed.

19 R. Civ. P. 23(a)(1). Courts do not require evidence of the exact size of the class nor the identity

20 of class members to satisfy the numerosity requirement. Instead, “A reasonable estimate of the

21 class size, based on common sense assumptions of numerosity, is sufficient.” L. H. v.

22 Schwarzenegger, No. CIV. S-06-2042 LKK/GGH, 2007 WL 662463, at *10 n.2 (E.D.Cal.

23 Feb. 28, 2007) (citing Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439, 448 (N.D.

24 Cal. 1994)). The proposed class of approximately 1300 African American and Latinos Financial

25 Advisors and Registered Financial Advisor Trainees plainly satisfies the numerosity requirement.

26 1 Newberg § 3.5 (“In light of prevailing precedent, the difficulty inherent in joining as few as 40

27 class members should raise a presumption that joinder is impracticable, and the plaintiff whose

28 class is that large or larger should meet the test of Rule 23(a)(1) on that fact alone.”).

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1

2. Commonality Is Satisfied

2

Rule 23(a)(2) requires that there be questions of law or fact common to the class. The

3 commonality requirement of Rule 23(a) examines the group characteristics of the class as a whole

4 and seeks to determine whether the class shares common questions of fact or law. It does not

5 require that all questions of law or fact be common to every single member of the class; rather, at

6 least one issue must be common to the claims of all the class members. Hanlon, 150 F.3d at

7 1019; Dukes v. Wal-Mart, Inc., 474 F.3d 1214, 1225 (9th Cir. 2007) (citing Savino v. Computer

8 Credit, Inc., 172 F.R.D. 346, 352 (E.D.N.Y. 1997), aff’d, 164 F.3d 81 (2d Cir. 1998)). Courts do

9 not treat commonality as a difficult hurdle, but construe the requirement “permissively” and

10 require a “minimal” showing. Hanlon, 150 F.3d at 1019-1020.

11

Plaintiff alleges numerous common issues of fact: (1) uniform personnel and

12 management structures across branch offices; (2) MS-GWMG’s headquarters’ extensive

13 oversight of branch operations, (3) company-wide policies governing pay decisions, (4) a strong,

14 centralized corporate culture; (5) consistent race and color-related disparities in the

15 representation, retention and compensation of African American and Latino Financial Advisors

16 and Registered Financial Advisor Trainees; and (6) racial stereotyping. Cf. Dukes, 474 F.3d at

17 1225-26 (approving class certification where these same common issues were present). In the

18 instant case, all Class Members were subjected to the same company-wide compensation process,

19 crafted and imposed by the highest-level management at MS-GWMG. These policies and

20 practices are uniform — all MS-GWMG Financial Advisors and Registered Financial Advisor

21 Trainees are subject to the same compensation system. Common evidence — including anecdotal

22 evidence from Plaintiff and Class Members and expert statistical analysis — all establish

23 common questions of fact. See Dukes, 474 F.3d at 1225 (“It is well established that commonality

24 may be established by raising an inference of class-wide discrimination through the use of

25 statistical evidence.”). Plaintiff has collected enough evidence to raise at least one common issue

26 of triable fact. See Ellis. v. Costco Wholesale Corp., 240 F.R.D. 627, 638 (N.D. Cal. 2007)

27 (Patel, J.). Common legal issues include whether MS-GWMG violated Section 1981, among

28

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1 others.3 In the absence of class certification and settlement, each individual Settlement Class

2 Member would be forced to litigate core common issues of law and fact.

3

3. Typicality Is Satisfied

4

Rule 23 requires that the Named Plaintiff’s claims be typical of those of the class. “[T]he

5 named plaintiff need not have suffered an identical wrong. It is sufficient if his allegations are

6 derived from the same remedial and legal theories.” Murray v. Local 2620, Dist. Counsel 57,

7 American Federation of State, County and Municipal Empl., AFL-CIO, 192 F.R.D. 629, 635

8 (N.D. Cal. 2000)(Patel, J). Under the rule’s “permissive standards,” representative claims are

9 typical “if they are reasonably co-extensive with those of absent class members; they need not be

10 substantially identical.” Hanlon, 150 F.3d at 1020; Staton, 327 F.3d at 957; Dukes, 474 F.3d at

11 1232 (“Some degree of individuality is to be expected in all cases, but that does not necessarily

12 defeat typicality.”). The “commonality and typicality requirements of Rule 23(a) tend to merge.”

13 General Tele. Co. of Sw. v. Falcon, 457 U.S. 147, 157, n.13 (1982). A finding of commonality

14 will ordinarily satisfy the requirement of typicality as well. Barefield v. Chevron U.S.A., Inc., No.

15 C 86-2427 THE, 1987 WL 65054, at *5 (N.D. Cal. 1987).

16

The Named Plaintiff in this case is a member of the Class she seeks to represent. She has

17 worked for MS-GWMG as a Financial Advisor and a Registered Financial Advisor Trainee. The

18 claims of all Class Members flow from the same factual, legal and remedial theories. Cf. Stender

19 v. Lucky Stores, Inc., No. C 88-1467 MHP, 1990 WL 192734, at *3-5 (N.D. Cal. June 8, 1990);

20 Staton v. Boeing, 327 F.3d 938, 957 (9th Cir. 2003) (no requirement that plaintiffs work in each

21 job category for each type of discrimination claimed). She was subjected to MS-GWMG’s

22 discriminatory compensation system and alleges that she and the Class Members suffered adverse

23 treatment with respect to compensation. Accordingly, the typicality requirement is satisfied.

24

25

26 3 Common legal issues include: (1) whether MS’s policies or practices discriminate against

27

African American and Latino Financial Advisors and Registered Financial Advisor Trainees; (2) whether MS’s conduct constitutes illegal intentional race and/or color discrimination with

28

respect to the making, performance, modification and termination of contracts; and (3) what injunctive relief is appropriate to remedy MS’s discriminatory practices.

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1

4. Adequacy Is Satisfied

2

Rule 23(a)(4) requires that the named representative “will fairly and adequately protect

3 the interests of the class.” This requirement is satisfied where the class representative’s claims

4 are sufficiently interrelated with and not antagonistic to the claims of the class. Hanlon, 150 F.3d

5 at 1020. The interests of the Class Members and the interests of the Named Plaintiff in this case

6 are the same—the elimination of race and color discrimination against African American and

7 Latino Financial Advisors and Registered Financial Advisor Trainees at MS-GWMG. There is

8 no antagonism between the Named Plaintiff’s claims and those of the Class she seeks to

9 represent. Further, the Named Plaintiff has affirmed her willingness to undertake the

10 responsibilities of serving as class representative. For these reasons, the adequacy requirement is

11 satisfied.

12

5. Certification of the Class Is Proper under Rule 23(b)

13

Rule 23 requires that, in addition to the Rule 23(a) prerequisites, a proposed class must

14 also meet the definition of one of the Rule 23(b) categories.

15

a. Final Certification Under 23(b)(2) is Appropriate

16

Rule 23(b)(2) is an appropriate basis for certification when the defendant “has acted or

17 refused to act on grounds generally applicable to the class,” thereby making appropriate final

18 injunctive relief or corresponding declaratory relief with respect to the class as a whole. Fed. R.

19 Civ. P. 23(b)(2). “Civil rights cases against parties charged with unlawful, class-based

20 discrimination are prime examples” of Rule 23(b)(2) classes. Amchem Prods. Inc. v. Windsor,

21 521 U.S. 591, 614 (1997); Barefield, 1988 WL 188433, at *2. Certification under Rule 23(b)(2)

22 is appropriate where, as here, meaningful declaratory and injunctive relief is sought. Fed. R. Civ.

23 P. 23(b)(2); Molski v. Gleich, 318 F.3d 937, 949-50 (9th Cir. 2003); Robinson v. Metro-North

24 Commuter R.R., 267 F.3d 147, 163-64 (2d Cir. 2001).

25

Certification under Rule 23(b)(2) is appropriate in this case because Plaintiff has alleged

26 that MS-GWMG has acted and refused to act on grounds generally applicable to the Class.

27 Plaintiff seeks declaratory and injunctive relief with respect to the Class as a whole. Logic fully

28 supports the Class Representative’s contentions that her request for injunctive and declaratory

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1 relief predominate. Dukes, 474 F.3d at 1234-35 (“In cases involving discrimination, it is

2 especially likely that even those plaintiffs safe from immediate harm will be concerned about

3 protecting those class members that are suffering as they once did.”); see also Ellis, 240 F.R.D. at

4 643 (holding that declarations satisfied the court that reasonable plaintiffs would bring a lawsuit

5 alleging sex discrimination to obtain injunctive relief even in the absence of monetary recovery).

6

Accordingly, certification under Rule 23(b)(2) is appropriate.

7

b. Certification Under 23(b)(3) is Appropriate

8

Certification under Rule 23(b)(3) will allow class members to opt out of the monetary-

9 relief aspect of the settlement and preserve their right to seek damages independently. See

10 Brown v. Title Ticor Ins. Co., 982 F.2d 386, 392 (9th Cir. 1992). This approach protects class

11 members’ due process rights, and is consistent with the Supreme Court’s decision in Ortiz v.

12 Fibreboard Corp., 527 U.S. 815 (1999), and the Ninth Circuit’s decision in Brown, which explain

13 that due process requires an opportunity to opt out of significant monetary relief but not equitable

14 relief. Ortiz, 527 U.S. at 846–48; Brown, 982 F.2d at 392. Indeed, in Molski v. Gleich, the Ninth

15 Circuit recognized that certification under both Rule 23(b)(2) and Rule 23(b)(3) is appropriate in

16 cases like this one that involve substantial injunctive and monetary relief. See Molski, 318 F.3d.

17 at 951 n.16 (certification under both Rule 23(b)(2) and Rule 23(b)(3) is one way to address due

18 process concerns raised by the release of substantial damages claims).

19

Accordingly, the class action device proposed here “is superior to other available methods

20 for the fair and efficient adjudication of the controversy.” Fed. R. Civ. P. 23(b)(3). Employing

21 the class device here will not only achieve economies of scale for the Settlement Class, but will

22 also conserve the resources of the judicial system and preserve public confidence in the integrity

23 of the system by avoiding the waste and delay of repetitive proceedings and prevent the

24 inconsistent adjudications of similar issues and claims. See Hanlon, 150 F.3d at 1023. There is

25 no other mechanism by which all of the putative Settlement Class members’ claims will be as

26 fairly, adequately, and efficiently resolved as through a class action. Indeed, in employment

27 cases like this, the alternative to a class case is often no case at all due to employees’

28 understandable fear of retaliation. Ste. Marie v. Eastern R.R. Assoc., 72 F.R.D. 443, 449 (S.D.

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1 N.Y. 1976), rev’d on other grounds, 650 F.2d 395 (2d Cir. 1982) (“[t]he risks entailed in suing

2 one’s employer are such that the few hardy souls who come forward should be permitted to speak

3 for others when the vocal ones are otherwise fully qualified.”). In addition, issues of

4 manageability relating to the trial of the action are no longer of consequence as a result of the

5 settlement. See Amchem, 521 U.S. at 620 (“[c]onfronted with a request for settlement-only class

6 certification, a [trial] court need not inquire whether the case, if tried, would present intractable

7 management problems, for the proposal is that there be no trial.”).

8 III. Plaintiff’s Counsel Should Be Appointed as Class Counsel

9

Rule 23(g), governing the standards and framework for appointing class counsel for a

10 certified class,4 sets forth four criteria the district court must consider in evaluating the adequacy

11 of proposed counsel: (1) the work counsel has done in identifying or investigating potential

12 claims in the action; (2) counsel’s experience in handling class actions, other complex litigation,

13 and claims of the type asserted in the action; (3) counsel’s knowledge of the applicable law; and

14 (4) the resources counsel will commit to representing the class. Fed. R. Civ. Proc. 23(g)(1)(C)(i).

15 The court may also consider any other matter pertinent to counsel’s ability to fairly and

16 adequately represent the interests of the class. Fed. R. Civ. Proc. 23(g)(1)(C)(ii). The Advisory

17 Committee noted that “[n]o single factor should necessarily be determinative in a given case.”

18 Fed. R. Civ. Pro. 23(g) advisory committee’s note.

19

Information relevant to each of these criteria is set forth in the accompanying declarations

20 of the Named Plaintiff’s counsel. See Dermody Decl., Ex. A; Klein Decl., Ex. B; Finberg Decl.,

21 Ex. C. As their declarations evidence, each lawyer has had substantial experience in employment

22 discrimination class actions and each is well-qualified to represent the interests of the Class. The

23 Court should appoint Named Plaintiff’s Counsel, Lieff, Cabraser, Heimann & Bernstein; Outten

24 & Golden; and Altshuler Berzon, to represent the Settlement Class in this action.

25

26

27

28

4 The adequacy of Plaintiff’s counsel is no longer evaluated under Rule 23(a)(4), which is now limited to determining the adequacy of the class representative.

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1 IV. The Proposed Class Notice Is Appropriate

2

A. The Proposed Class Notice Satisfies Due Process

3

The content of the proposed Notice of Class Action Settlement, which is attached to the

4 proposed preliminary approval order as Exhibit 2, fully complies with due process and Fed. R.

5 Civ. P. 23. Pursuant to Rule 23(c)(2)(B), the notice must provide “the best notice practicable

6 under the circumstances, including individual notice to all members who can be identified

7 through reasonable effort. The notice must concisely and clearly state in plain, easily understood

8 language: the nature of the action; the definition of the class certified; the class claims, issues, or

9 defenses; that a class member may enter an appearance through counsel if the member so desires;

10 that the court will exclude from the class any member who requests exclusion, stating when and

11 how members may elect to be excluded; and the binding effect of a class judgment on class

12 members under Rule 23(c)(3).”

13

The Notice proposed here satisfies each of these requirements. The Notice also describes

14 the terms of the settlement, informs the class about the attorneys’ fees terms of the agreement,

15 and provides specific information regarding the date, time, and place of the final approval

16 hearing. Accordingly, the detailed information in the proposed Notice is more than adequate to

17 put Class Members on notice of the proposed settlement and is well within the requirements of

18 Rule 23(c)(2)(B).

19

B. The Notice Plan and Claims Process Are Appropriate

20

The Settlement Agreement provides that MS-GWMG will provide the Claims

21 Administrator with the name, social security number and last known address of each Class

22 Member within 10 days of preliminary approval of this settlement. See Settlement Agreement at

23 § IV.C.1. Within 20 days after Preliminary Approval of the settlement, the Claims Administrator

24 will mail the Notice and a Claim Form to each Class Member in the form agreed upon by the

25 parties or such other form as approved by the Court. Id. at § IV.C.2. Class Members will have 45

26 days from the date Notice is mailed to the Class Members to object to the settlement by filing

27 their objection with the Court and serving copies of the objection on Class Counsel and counsel

28 for MS-GWMG. Id. at § IV.C.4. This is sufficient time to give Settlement Class Members a fair

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1 opportunity to respond. Cf. Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993)

2 (approving notice sent 31 days before the deadline for objections and 45 days before the hearing).

3 For those Class Members who wish to opt-out of the settlement, their opt-out statement must be

4 received by Class Counsel and counsel for Morgan Stanley on or before 45 days after the Notice

5 is to be mailed to Class Members. Id. at § IV.C.5. Class Members will have a number of days to

6 be determined by the Court from the mailing of Notice to submit a Claim Form and release. See

7 Settlement Agreement at § VIII.C. Within a reasonable time after receipt of a Named Plaintiff or

8 Class Member release, the Claims Administrator will send the Claimant his or her award

9 payment. Id. at § VIII.D.3.d.

10 V. 11

The Proposed Scheduling Order; A Final Approval Hearing Should Be Scheduled The last step in the settlement approval process is the formal hearing, at which the Court

12 may hear all evidence and argument necessary to evaluate the settlement. The parties propose the

13 following schedule for final approval:

14 Last day for the Claims Administrator to mail Notice and

15

December 17, 2007 Claim form to Class Members.

16

January 31, 2008

Last day for objections and comments in favor of the settlement.

17

18

January 31, 2008

Last day to opt out.

19

February 15, 2008 Last day for Class Members who file opt-outs to rescind their

20

opt-outs.

21 February 15, 2008 Last day for Class Members to submit a Claim Form.
22 February 25, 2008 Motion for final approval and fee application due.
23

24

March 24, 2008

Reply papers due.

25

March 31, 2008,

Final approval hearing.

10:00 a.m.

26

27

28

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1 VI. Conclusion

2

For all of the foregoing reasons, the parties respectfully request that the Court issue an

3 order: (1) preliminarily approving the parties’ class action settlement, (2) certifying a Settlement

4 Class, (3) appointing named Plaintiff’s counsel to represent the Class, (4) approving and directing

5 distribution to the Class of Notice of Settlement and a Claim Form, and (5) setting a schedule for

6 the final approval process.

7 Dated: October 22, 2007
8
9

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

10

11

By:

/s/ Kelly M. Dermody

Kelly M. Dermody 12

Kelly M. Dermody (State Bar No. 171716)

13

Heather H. Wong (State Bar No. 238546)

LIEFF, CABRASER, HEIMANN &

14

BERNSTEIN, LLP

Embarcadero Center West

15

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

16

Telephone: (415) 956-1000

Facsimile: (415) 956-1008 17

Elizabeth A. Alexander (pro hac vice)

18

LIEFF, CABRASER, HEIMANN &

BERNSTEIN, LLP

19

150 Fourth Avenue, North, Suite 1650

Nashville, TN 37219-2423

20

Telephone: (615) 313-9000

Facsimile: (615) 313-9965 21

Adam T. Klein

22

Piper Hoffman (pro hac vice)

Justin M. Swartz (pro hac vice)

23

OUTTEN & GOLDEN LLP

3 Park Avenue, 29th Floor

24

New York, New York 10016

Telephone: (212) 245-1000

25

Facsimile: (212) 977-4005

26

27

28

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064
Attorneys for Plaintiffs

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EXHIBIT A

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 37 of 163

1 Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 email: kdermody@lchb.com email: hwong@lchb.com
6 Elizabeth A. Alexander (pro hac vice)
7 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
8 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423
9 Telephone: (615) 313-9000 Facsimile: (615) 313-9965
10 email: ealexander@lchb.com

11

12 Attorneys for the Plaintiffs

13

UNITED STATES DISTRICT COURT

14

NORTHERN DISTRICT OF CALIFORNIA

15

SAN FRANCISCO / OAKLAND DIVISION

16 DAISY JAFFE, DENISE WILLIAMS, and Case No. C-06-3903 TEH

MARGARET BENAY CURTIS-BAUER,

17 on behalf of themselves and all others

DECLARATION OF KELLY M. DERMODY

similarly situated,

IN SUPPORT OF MOTION FOR ORDER

18

GRANTING PRELIMINARY APPROVAL OF

Plaintiffs,

THE PROPOSED SETTLEMENT

19

AGREEMENT

v.

20

Date:

November 26, 2007

MORGAN STANLEY & CO.

Time:

1:30 p.m.

21 INCORPORATED, f/k/a MORGAN

Courtroom: 12

STANLEY DW INC.

22

23

Defendant.

24

25

26 I, Kelly M. Dermody, declare:
27 1. I am a partner in the firm Lieff, Cabraser, Heimann & Bernstein, LLP, one
28

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1 of the firms serving as counsel for Plaintiff in this matter. I make these statements based on

2 personal knowledge and would so testify if called as a witness.

3

2. I am a member in good standing of the bars of the State of California; the

4 United States District Court for the Northern District of California; the United States District

5 Court for the Central District of California; the United States District Court for the District of

6 Colorado; and the United States Courts of Appeals for the Third, Seventh, and Ninth Circuits.

7

3. This Declaration is submitted in support of the parties’ Joint Motion for

8 Order Granting Preliminary Approval of the Proposed Settlement Agreement.

9

10

I. Background and Experience

11

12

4. I graduated magna cum laude from Harvard University in 1990, where I

13 majored in History. I graduated from the University of California at Berkeley Boalt Hall School

14 of Law in 1993.

15

5. Immediately after I graduated from law school, I clerked for the Honorable

16 John T. Nixon, Chief Judge of the United States District Court for the Middle District of

17 Tennessee.

18

6. Since 1994, I have practiced with Lieff, Cabraser, Heimann & Bernstein,

19 LLP (“LCHB”), where I became a partner in June 1998. At LCHB, I have focused on

20 representing plaintiffs in employment litigation (including discrimination and wage and hour

21 disputes) and consumer fraud cases.

22

7. I, along with other attorneys from my firm and co-counsel, served as

23 plaintiffs’ counsel in Butler v. Home Depot, Case No. C94-4335 SI (N.D. Cal.), a gender

24 discrimination class action on behalf of 25,000 women in Home Depot’s West Coast Division.

25 After defeating the defendant’s motion for summary judgment, the plaintiffs negotiated a

26 settlement involving comprehensive injunctive relief regarding hiring, promotions, compensation,

27 training, and evaluations, as well as payment of a common fund of $87.5 million.

28
727952.4

8. I served as one of plaintiffs’ lead counsel in Gonzalez v. Abercrombie &

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1 Fitch Stores, Inc., Case No. 03-2817 SI (N.D. Cal.), a nationwide race, color, and gender

2 discrimination class action that resulted in a $50 million settlement on behalf of African

3 American and Latino and female applicants and employees, with comprehensive injunctive relief

4 in the areas of hiring, job assignment, and compensation at stores nationwide.

5

9. I served as plaintiffs’ counsel in Buttram v. United Parcel Service, Civ. No.

6 C97-01590-MJJ (N.D. Cal.), a race discrimination class action brought on behalf of African-

7 American part-time hourly employees in the company’s Northwest and Pacific Regions that

8 resulted in a settlement involving comprehensive injunctive relief regarding initial assignment

9 and promotions, as well as a common fund of $12.14 million.

10

10. I was lead counsel in Lyon v. TMP Worldwide, Case No. 993096 (San

11 Francisco County Super. Ct.), a wage and hour class action that resulted in a $1.25 million

12 settlement on behalf of a class of approximately 140 California employees alleging that they had

13 been misclassified as exempt from California labor law overtime provisions.

14

11. I served as plaintiffs’ counsel in Trotter v. Perdue Farms, Inc., Case No.

15 99-893 (RRM) (D. Del.), a collective and class action under the Fair Labor Standards Act, the

16 Employee Retirement Income Security Act of 1974, and state wage and hour laws. The class

17 members were chicken processing employees challenging the company’s failure to pay wages

18 and overtime, or provide pension credits, for off-the-clock work. The case resolved for a

19 payment of $10 million.

20

12. I was co-lead counsel in Foster v. Great Atlantic and Pacific Tea Co., Inc.

21 d/b/a A&P, Case No. 99 CV 3860 (CM) (S.D.N.Y.), an FLSA collective action that resulted in a

22 $3.05 million settlement on behalf of 855 opt-in plaintiffs who challenged the company’s failure

23 to pay wages and overtime for off-the-clock work.

24

13. I was co-lead counsel in Senior v. Adecco USA, Inc. d/b/a Adecco, Inc.

25 (San Francisco County Super. Ct. 2005); and Hyatt v. Adecco USA, Inc. d/b/a Adecco, Inc.

26 (Alameda County Super. Ct. 2005), two related class actions challenging a temporary

27 employment agency’s failure to pay both its regular staff and its temporary staff earned vacation

28 wages. The cases together resulted in settlements of over $3.8 million.

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1

14. I am co-lead counsel in LaMarca v. Great Atlantic and Pacific Tea

2 Company, Inc. d/b/a A&P, Case No. 04601973 (Cahn) (County of N.Y. Sup. Ct.), a wage and

3 hour class action on behalf of full-time employees denied overtime and forced to work off the

4 clock in defendants’ stores across New York State.

5

15. I am co-lead counsel in Amochaev v. Citigroup Global Markets, Inc., d/b/a

6 Smith Barney, Case No. C-05-1298 PJH (N.D. Cal.), a gender discrimination class action brought

7 on behalf of national class of female financial advisors alleging discrimination in compensation

8 and business opportunities.

9

16. I am co-lead counsel in Holloway v. Best Buy Co., Inc., Case No. C-05-

10 5056 PJH (N.D. Cal.), a race and gender discrimination class action challenging hiring, initial job

11 assignment, compensation and promotion practices at Best Buy stores nationwide.

12

17. I am co-lead counsel in Wynne v. McCormick & Schmick’s Seafood

13 Restaurants, Inc., Case No. C-06-3153 CW (N.D. Cal.), a race discrimination class action on

14 behalf of a national class of African Americans alleging discrimination in hiring, initial job

15 assignment, compensation and promotions.

16

18. I have also successfully litigated a wide variety of complex federal and

17 state civil matters during my professional career, including several consumer class actions. Class

18 action cases I have successfully prosecuted to judgment or settlement, in addition to the

19 foregoing, include: Citigroup Loan Cases, J.C.C.P. No. 4197 (San Francisco County Super. Ct.)

20 (plaintiffs’ co-liaison counsel in national consumer class action challenging alleged predatory

21 mortgage lending practices that resulted in $263 million settlement); Curry v. Fairbanks Capital

22 Corp., Civil Action No. 03-10895-DPW (D. Mass) (plaintiffs’ co-lead counsel in national

23 consumer class action challenging alleged predatory mortgage servicing practices that resulted in

24 $55.5 million settlement and business practice changes in the areas of customer service, payment

25 processing, collections, lender placed insurance, and delinquent loan resolution); Providian

26 Credit Card Cases, J.C.C.P. No. 4085 (San Francisco County Super. Ct.) (co-lead class counsel

27 in national consumer class action against major credit card company that resulted in $105 million

28 settlement); Sutter Health Uninsured Pricing Cases, Case No. JCCP 4388 (Sacramento Super.

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1 Ct.) (lead class counsel in consumer class action that resulted in over $275 million settlement and

2 comprehensive pricing and collections policy changes for uninsured patients across all Sutter

3 hospitals); Catholic Healthcare West Cases, Case No. JCCP 4453 (San Francisco County Super.

4 Ct.) (lead class counsel in consumer class action that resulted in over $423 million settlement and

5 pricing and collections policy changes for uninsured patients across all CHW hospitals).

6

19. I am also involved as co-lead counsel in the following cases: In re

7 Ameriquest Mortgage Company Mortgage Lending Practices Litigation, Case No. MDL 1715

8 (N.D.Ill.) (court-appointed plaintiffs’ co-lead counsel in national consumer class action MDL

9 challenging mortgage lender’s practice of imposing improper fees and charging improper interest

10 rates and pre-payment penalties on mortgage accounts); Ricci v. Ameriquest Mortgage Company,

11 Case No. 27-CV-05-2546 (Hennepin County, Minn. Dist. Ct.) (court-appointed plaintiffs’ class

12 counsel in certified statewide consumer class action challenging mortgage lender’s practice of

13 imposing improper fees and charging improper interest rates and pre-payment penalties on

14 mortgage accounts); In re Ocwen Federal Bank FSB Mortgage Servicing Litigation, Case No.

15 MDL 1604 (N.D. Ill.) (court-appointed plaintiffs’ co-lead counsel national consumer class action

16 MDL challenging mortgage servicer’s practice of imposing improper fees and insurance on

17 mortgage accounts); Schaffer v. Litton Loan Servicing, LP, Case No. 05-7673-MMM (C.D. Cal.)

18 (plaintiffs’ co-lead counsel in certified national consumer class action challenging mortgage

19 servicer’s practice of imposing improper fees in violation of RESPA).

20

20. In addition to being an active litigator, I have long been involved in many

21 educational and legal groups, including the ABA Labor and Employment Law Section where I

22 currently serve as the Vice-Chair of the Section’s Annual Conference. Previously I have served

23 as Co-Chair of the Section’s Committee on Equal Opportunity in the Legal Profession, Co-Chair

24 of the Section’s Equal Employment Opportunity Committee, and member of the Section’s

25 Katrina Task Force. I am currently a member of the Board of Directors of the Bar Association of

26 San Francisco, for which I previously served on the Executive Committee of BASF’s Litigation

27 Section. I am a member of the National Employment Lawyers’ Association, the Consumer

28 Attorneys of California, and the Bay Area Lawyers for Individual Freedom.

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1

21. I have written articles for a variety of legal publications and conferences,

2 including “Class Actions: Latest Developments in Litigating and Settling Employment

3 Discrimination Class Actions” (American Bar Association Labor and Employment Section Equal

4 Employment Opportunity Committee, Midwinter Meeting 2001); “A Road Map to Discovery in

5 Employment Discrimination and Wage/Hour Class Actions” (with James M. Finberg) (Glasser

6 Legal Works Seminar, 2000); “Employment Discrimination Class Actions in the Wake of Allison

7 v. Citgo Petroleum Corp.,” (American Bar Association Litigation Section Annual Meeting 2000);

8 “Employment Discrimination Class Actions in the Wake of Allison v. Citgo Petroleum Corp. and

9 Fed. R. Civ. P. 23(f)” (Federal Bar Association Convention, 1999); “Discovery in Employment

10 Discrimination Class Actions” (with James Finberg) in Litigation and Settlement of Complex

11 Class Actions (1998).

12

22. I have been a presenter or moderator at numerous legal conferences,

13 including: Moderator, Religious Discrimination, Reasonable Accommodation, and Religious

14 Practices in the Workplace (ABA Labor and Employment Law Section Equal Employment

15 Opportunity Committee, Midwinter Conference 2007); Panelist, How Not to Take a Deposition

16 (BASF Program, July 2006); Moderator, Evolving Concepts of Family, Including Domestic

17 Partnerships, Same-Sex Marriages and Civil Unions and the Impact of these New Legal and

18 Social Definitions of Family on Workplace Policies, Practices and Benefits (ABA Labor and

19 Employment Law Section Equal Employment Opportunity Committee, Midwinter Conference

20 2005); Presenter, BASF Deposition Skills Workshop (BASF Program, February 2004); Moderator,

21 Sexual Orientation Discrimination, Same-Sex Sexual Harassment and Transgender

22 Discrimination (ABA Annual Meeting, August 2003); Panelist, Class Actions: Latest

23 Developments in Litigating and Settling Employment Discrimination Class Actions (ABA Labor

24 and Employment Law Section Equal Employment Opportunity Committee, Midwinter Meeting

25 2001); Panelist, Litigation and Settlement of Complex Class Actions (Glasser Legal Works,

26 September 2000, April 1998); Panelist, Class Actions: The End Game - Trial or Settlement? How

27 to Bring a Class Action to a Successful Conclusion (ABA Litigation Section Annual Meeting,

28 April 2000); Panelist, Basic Class Actions (ABA EEO Committee Midwinter Meeting, March

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1 2000); Panelist, The Fourth National Conference for Women Law Firm Partners (Business

2 Development Associates, March 1999). Moderator, Equal Employment Opportunity Committee

3 Program: “Pattern and Practice Enforcement and Trends” and “Reeves v. Sanderson Plumbing

4 Products, Inc.: The Argument and the Aftermath” (ABA Annual Meeting, July 2000); Moderator,

5 Recent Developments in the Trial of Class Actions (ABA Section of Labor and Employment Law,

6 Equal Employment Opportunity Committee, Midwinter Meeting, March 1999).

7

23. In 2001, I taught Employment Law as an Adjunct Professor of Law at the

8 Golden Gate University School of Law.

9

24. I received a California Lawyer Attorney of the Year (CLAY) Award from

10 the California Lawyer in 2007; was named one of California’s “Top Women Litigators” by the

11 Daily Journal in 2007; and was named as one of the Daily Journal’s “Top 20 Lawyers Under

12 Age 40” in 2006. I was a finalist for Trial Lawyer of the Year (2007) from the Public Justice

13 Foundation, and for Consumer Attorney of the Year (2006) from Consumer Attorneys of

14 California. I also received the following awards: Northern California Super Lawyer (2004, 2005,

15 2006, 2007); Lawyers’ Committee for Civil Rights “Living the Dream Partner” (2005);

16 President’s Award, Phillips Exeter Academy (1999) (for admissions committee work dedicated to

17 recruiting low-income applicants of color on the West Coast).

18

25. LCHB, along with other Plaintiff’s counsel, has done significant work in

19 identifying and investigating the claims in this action.

20

26. LCHB is committed to representing the Class in this matter, including

21 devoting significant time and energy to ensuring that the monitoring and reporting requirements

22 set forth in the Settlement Agreement are completed.

23

27. Attached as Exhibit 1 to this Declaration is a true and correct copy of the

24 firm resume for Lieff, Cabraser, Heimann & Bernstein, LLP.

25

26

II. History of Litigation and Discovery

27

28
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28. Plaintiff’s counsel were initially contacted by Plaintiff Daisy Jaffe

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1 regarding claims of gender discrimination. Ms. Jaffe subsequently filed an EEOC charge of

2 discrimination. After an extensive investigation, she filed a Class Action Complaint on June 22,

3 2006, asserting claims on behalf of a nationwide Class of female Financial Advisors employed by

4 MS-GWMG and a Subclass of all female Financial Advisors employed by MS-GWMG in

5 California. The Complaint asserted claims for gender discrimination under Title VII, 42 U.S.C.

6 § 2000e, et seq., and, with respect to California Subclass, the California Fair Employment and

7 Housing Act, Cal. Gov’t Code § 12940 (“FEHA”). The Complaint also asserted non-class claims

8 of age discrimination on behalf of Ms. Jaffe individually under the Age Discrimination in

9 Employment Act of 1967, 29 U.S.C. § 621, et seq. and under California’s FEHA. (Complaint at

10 ¶¶ 51-58.)

11

29. On October 12, 2006, plaintiffs filed a First Amended Complaint adding

12 Plaintiff Denise Williams as a class representative and her claims of race discrimination under

13 Title VII, Michigan’s Elliot-Larsen Civil Rights Act, and 42 U.S.C. § 1981. The First Amended

14 Complaint also added a Subclass of female Financial Advisors who reside in Michigan under

15 Michigan’s Elliot-Larsen Civil Rights Act, M.C.L.A. § 37.2101, et seq.

16

30. Plaintiff’s counsel continued to investigate claims of race discrimination

17 against African American and Latino Financial Advisors and Financial Advisor Trainees at

18 Morgan Stanley. In January 2007, Ms. Williams also informed Morgan Stanley of her intention

19 to file a Second Amended Complaint to add allegations that the company engaged in class-wide

20 race discrimination. MS-GWMG agreed to toll the race claims and stay the filing of the Second

21 Amended Complaint to pursue settlement discussions with Plaintiff Williams in hopes of

22 resolving the class-wide race claims.

23

31. In connection with settlement discussions, MS-GWMG produced a

24 substantial number of documents relating to its compensation and employment practices. In

25 addition, MS-GWMG provided Plaintiff’s counsel with electronic data, which was extracted from

26 Morgan Stanley’s Human Resources database, that contained comprehensive payroll (including

27 all wage information) and job history information for each person who held a registered Financial

28 Advisor Trainee or full Financial Advisor position at any time between October 12, 2002 and July

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1 11, 2007. Finally, MS-GWMG provided Plaintiff’s counsel with electronic payroll data in the

2 form of monthly medicare wages for Financial Advisors and Financial Advisor Trainees for the

3 same date range and detailed data on accounts and partnerships.

4

32. Counsel engaged the services of the professional labor-economics firm

5 Econsult to conduct an extensive analysis of all of the claims in this case, including whether

6 African American and Latino Financial Advisors and Financial Advisor Trainees were

7 systematically disadvantaged by policies and practices at Morgan Stanley relating to

8 compensation and other terms and conditions of employment.

9

33. This information, along with witness interviews and information regarding

10 MS-GWMG policies, confirmed Plaintiff’s understanding of the scope of systemic problems

11 affecting African American and Latino Financial Advisors and Financial Advisor Trainees.

12

34. Plaintiff Curtis-Bauer subsequently joined the case. On August 2, 2007,

13 Plaintiff filed a Second Amended Complaint adding Curtis-Bauer as a class representative. See

14 Second Amended Complaint at ¶ 19. Ms. Curtis-Bauer and Ms. Williams collectively alleged, on

15 behalf of themselves and others similarly situated, that Morgan Stanley discriminated against

16 African American and Latino Financial Advisors and Registered Financial Advisor Trainees.

17 Specifically, they alleged discrimination against African Americans and Latinos in compensation,

18 account distributions, partnerships, business opportunities, and other terms and conditions of

19 employment.

20

35. Immediately prior to this filing, Daniel Hutchinson of my office and I have

21 again spoken with Ms. Williams, and Heather Wong of my office has again spoken with Ms.

22 Curtis-Bauer at my instruction. Ms. Curtis-Bauer has informed us that she fully supports the

23 settlement. Ms. Williams has informed us that she intends to opt out so that she can file an

24 individual lawsuit alleging the claims she has brought in the Second Amended Complaint as well

25 as an age discrimination claim.

26

27 Settlement Negotiations 28
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1

36. The parties participated in negotiations with the assistance of an

2 experienced mediator, Hunter Hughes, Esq. of Atlanta, Georgia. Counsel for the parties are

3 retained Mr. Hughes for his expertise in mediating many complex actions, including those

4 involving race discrimination in employment, such as the class action against Abercrombie &

5 Fitch (described above) litigated and settled in this District. Mr. Hughes also has familiarity with

6 MS-GWMG’s practices through his work as a mediator in the Augst-Johnson action, the related

7 gender discrimination case against MS-GWMG.

8

37. The parties here had multiple face-to-face negotiating sessions in San

9 Francisco, New York, and Charleston, South Carolina, in March, July and August 2007, as well

10 as numerous discussions by telephone. Under the supervision of the mediator, the parties’

11 negotiations were conducted at arms’ length.

12

38. Before reaching a settlement, the parties conducted a thorough examination

13 and investigation of the facts and law relating to Plaintiff’s claims. This investigation informed

14 counsel regarding the strengths and weaknesses of their respective positions and provided them a

15 full opportunity to assess the litigation risks presented in this case. In August 2007, the parties

16 reached a settlement in principle of their claims.

17

39. Consistent with the Second Amended Complaint, the Settlement Class

18 defined in the Settlement Agreement consists of all African Americans and Latinos who were

19 employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth

20 Management Group of Morgan Stanley & Co. Incorporated or its predecessor at any time

21 between October 12, 2002 and the date of the preliminary approval of the settlement.

22

23

III. Factual Record for Class Certification

24

25

40. Plaintiff’s counsels’ investigation of the claims alleged in this matter

26 allowed them to determine that there is a sufficient basis to move for settlement class certification

27 under Rule 23 of the Federal Rules of Civil Procedure. Those facts include:

28
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41. During the class period there were approximately 1300 African American

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1 and Latino Financial Advisors and Registered Financial Advisor Trainees. This number is

2 sufficient to establish that joinder is impracticable and that the numerosity requirement is satisfied

3 under Rule 23(a)(1).

4

42. MS-GWMG has maintained uniform personnel and management structures

5 across branch offices, and exercises extensive control over branch operations, compensation, and

6 account distribution policies affecting Class members.

7

43. Plaintiff’s expert conducted statistical analyses of compensation data and

8 representation rates sufficient to demonstrate common patterns across the Class.

9

44. Plaintiff Curtis-Bauer is an African American former Financial Advisor

10 who alleges discrimination in compensation on behalf of herself and a class of African American

11 Financial Advisors and Registered Financial Advisor Trainees. Her allegations of harm are

12 typical of the class as a whole.

13

45. As set forth above and in the Declarations of Adam Klein and James M.

14 Finberg, also filed herewith as Exhibits B and C in support of the Joint Motion for Order Granting

15 Preliminary Approval of the Proposed Settlement Agreement, the attorneys for the Representative

16 Plaintiff are qualified, experienced, and generally able to conduct the litigation.

17

18 IV. The Proposed Settlement is Fair and Reasonable and is in the Best Interest of the Class 19

20

46. While Plaintiff is convinced that she has a compelling case, there is

21 substantial risk in proceeding to class certification and to trial. Pretrial preparation would be

22 arduous and trial lengthy, involving dozens of witnesses nationwide.

23

47. Even if Plaintiff was victorious at class certification, past summary

24 judgment, and through trial, the judgment would likely be appealed, further delaying the result

25 and increasing the cost of litigation. Nor would a victory at a merits trial guarantee Plaintiff and

26 the Class Members any affirmative class-wide relief whatsoever. Were the Plaintiff to prevail at

27 trial, the parties would likely enter into negotiations to determine the parameters of relief.

28 Ultimately, even an overwhelming court victory for Plaintiff would not ensure that the

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EXHIBIT A

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 50 of 163

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000
Facsimile: (415) 956-1008

780 Third Avenue 48th Floor
New York, NY 10017-2024 Telephone: (212) 355-9500 Facsimile: (212) 355-9592

One Nashville Place 150 Fourth Avenue North, Suite 1650
Nashville, TN 37219-2415 Telephone: (615) 313-9000 Facsimile: (615) 313-9965

E-mail: mail@lchb.com Website: www.lieffcabraser.com

FIRM PROFILE:
Lieff Cabraser Heimann & Bernstein, LLP, is a fifty-plus attorney, AV-rated law firm founded in 1972 with offices in San Francisco, New York and Nashville. Lieff Cabraser has a diversified practice, successfully representing plaintiffs in the fields of personal injury and mass torts, securities fraud, employment discrimination and unlawful employment practices, product defect, antitrust, consumer protection, aviation, environmental and toxic exposure, and human rights. Our clients include individuals, classes or groups of persons, businesses, and public and private entities.
Lieff Cabraser has served as court-appointed Plaintiffs’ Lead or Class Counsel in state and federal coordinated, multi-district, and complex litigation throughout the United States. With co-counsel, we have represented clients across the globe in cases filed in American courts. We have litigated and resolved thousands of individual lawsuits and hundreds of class and group actions, including some of the most important civil cases in the United States over the last decade.
Lieff Cabraser is among the largest firms in the United States that only represent plaintiffs. Described by The American Lawyer as “one of the nation’s premier plaintiffs’ firms,” Lieff Cabraser enjoys a national reputation for professional integrity and the successful prosecution of our clients’ claims. We possess sophisticated legal skills and the financial resources necessary for the handling of large, complex cases, and for litigating against some of the nation’s largest corporations. We take great pride in the leadership roles our firm plays in many of this country’s major cases, including those resulting in landmark decisions and precedent-setting rulings.
In the 2006 edition of its annual list of the plaintiffs’ law firms “doing the most to shape the law,” The National Law Journal selected Lieff Cabraser as one of the nation’s top plaintiffs’ firms. Lieff Cabraser was also a member of The National Law Journal’s Plaintiffs’ “Hot List” from 2003 through 2005. We are one of only three plaintiffs’ law firms in the nation to receive this award the last four years.
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CASE PROFILES:
A. Personal Injury and Products Liability Litigation
Lieff Cabraser has obtained over $400 million in verdicts, judgments and settlements for our clients in individual personal injury and wrongful death lawsuits. Since 1995, and working with co-counsel, we have achieved verdicts, judgments and settlements in excess of $10 billion in product liability class action lawsuits.
We only represent plaintiffs. In many of these cases, we assisted our clients in persuading the corporate defendants to issue recalls or improve their safety procedures for the protection of all consumers and patients. Currently, we are prosecuting scores of lawsuits involving injuries and deaths from all types of negligent conduct, manufacturing errors and design defects. Our cases range from vehicle and aviation accidents to faulty medical devices. We also represent patients prescribed drugs with dangerous, undisclosed side effects and consumers sickened by contaminated food products.
Our successful personal injury and products liability cases, with the exception of aviation cases which are profiled separately, include:
1. Individual Vehicle Injury Lawsuits. Lieff Cabraser has an active practice prosecuting claims for clients injured, or the families of loved ones who have died, by the wrongful conduct of other drivers or due to unsafe and defective vehicles, tires and other automotive equipment. We are representing clients in actions involving fatalities and serious injuries due to rollover accidents of fifteen passenger vans and sports utility vehicles. Plaintiffs allege that the vans and SUVs were defectively designed because they pose an unreasonable risk of rollover during foreseeable driving conditions. We also represent clients in many other vehicle cases including ones where defective cruise control switches resulted in fires, transmission defects that caused the vehicle to shifted suddenly from park into reverse and design defects with the Yamaha Rhino that have resulted in the vehicle rolling even during turns at low speeds on flat surfaces.
In March 2007, in Mraz v. DaimlerChrysler, No. BC 332487 (Cal. Supr. Ct.), we obtained a $54.4 million verdict, including $50 million in punitive damages, against DaimlerChrysler for intentionally failing to cure a known defect in millions of its vehicles that led to the death of Richard Mraz, a young father. Mr. Mraz suffered fatal head injuries when the 1992 Dodge Dakota pickup truck he had been driving at his work site ran him over after he exited the vehicle believing it was in park. The jury found that a defect in the Dodge Dakota’s automatic transmission, called a park-to-reverse defect, played a substantial factor in Mr. Mraz’s death and that DaimlerChrysler was negligent in the design of the vehicle for failing to warn of the defect and then for failing to adequately recall or retrofit the vehicle.

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2. Multi-State Tobacco Litigation. Lieff Cabraser represented the Attorneys’ General of Massachusetts, Louisiana and Illinois, several additional states, and 18 cities and counties in California, in litigation against Philip Morris, R.J. Reynolds and other cigarette manufacturers. The suits were part of the landmark $206 billion settlement announced in November 1998 between the tobacco industry and the states’ attorneys general. The states, cities and counties sought both to recover the public costs of treating smoking-related diseases and require the tobacco industry to undertake extensive modifications of its marketing and promotion activities in order to reduce teenage smoking. In California alone, Lieff Cabraser’s clients were awarded an estimated $12.5 billion to be paid over the next 25 years.
3. Fen-Phen (“Diet Drugs”) Litigation. Lieff Cabraser represents individuals pursuing personal injury claims due to injuries from the “FenPhen” diet drugs fenfluramine (sold as Pondimin) and/or dexfenfluramine (sold as Redux). We served as counsel for the plaintiff that filed the first nationwide class action lawsuit against the diet drug manufacturers alleging that they had failed to adequately warn physicians and consumers of risks associated with the drugs. Since the recall was announced in 1997, Lieff Cabraser has represented over 400 persons in individual actions who have suffered heart and/or lung damage, most often consisting of cardiac valve damage and/or Primary Pulmonary Hypertension, after ingesting Pondimin or Redux. In In re Diet Drugs (Phentermine / Fenfluramine / Dexfenfluramine) Products Liability Litigation, MDL No. 1203 (E.D. Pa.), the Court appointed Elizabeth J. Cabraser to the Plaintiffs’ Management Committee which organized and directed the FenPhen diet drugs litigation filed across the nation in federal courts. In August 2000, the Court approved a $4.75 billion settlement offering both medical monitoring relief for persons exposed to the drug and compensation for persons with qualifying damage. Lieff Cabraser also served on the Plaintiffs’ Executive Committee in the California Coordinated Proceedings in California state court, and as class counsel in the State of Washington certified medical monitoring action.
4. In re ConAgra Peanut Butter Products Liability Litigation, MDL No. 1845 (N.D. Ga.). In September 2007, the federal court appointed Elizabeth Cabraser as Plaintiffs’ Lead Counsel in the litigation arising out of the recall of Peter Pan and Great Value peanut butter. Tens of thousands of consumers nationwide contracted Salmonella poisoning from eating contaminated peanut butter produced at a single ConAgra plant in Sylvester, Georgia. In February 2007, the FDA confirmed the presence of Salmonella in opened jars of Peter Pan and Great Value peanut butter obtained from inflected persons.
5. In re ReNu With MoistureLoc Contact Lens Solution Products Liability Litigation, MDL No. 1785 (D. S.C.). Lieff Cabraser partner Wendy R.
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Fleishman serves on Plaintiffs’ Executive Committee in litigation in federal court arising out of Bausch & Lomb’s recall in 2006 of its product ReNu with MoistureLoc. Consumers nationwide allege that the contact lens solution caused Fusarium keratitis, a rare and dangerous fungal eye infection , as well as other serious eye infections because the solution failed to disinfect and cleanse contact lenses, contrary to its claims. Many contact lens wearers were forced to undergo painful corneal transplant surgery to save their vision; others have lost all or part of their vision permanently.
6. In re Guidant Implantable Defibrillators Products Liability Litigation, MDL No. 1708. Lieff Cabraser serves on the Plaintiffs' Lead Counsel Committee in litigation in federal court arising out of the recall of Guidant cardiac defibrillators implanted in patients because of potential malfunctions in the devices. At the time of the recall, Guidant admitted it was aware of 43 reports of device failures, and two patient deaths. Guidant subsequently acknowledged that the actual rate of failure may be higher than the reported rate and that the number of associated deaths may be underreported, since implantable cardio-defibrillators are not routinely evaluated after death.
7. In re Vioxx Products Liability Litigation, MDL No. 1657 (E.D. La.). Lieff Cabraser represents patients that suffered heart attacks or strokes, and the families of loved ones who died, after having being prescribed the arthritis and pain medication Vioxx. In individual personal injury lawsuits against Merck, the manufacturer of Vioxx, our clients allege that Merck falsely promoted the safety of Vioxx and failed to disclose the full range of the drug’s dangerous side effects. In April 2005, in the federal multidistrict litigation, the Court appointed Elizabeth J. Cabraser to the Plaintiffs’ Steering Committee, which has the responsibility of conducting all pretrial discovery of Vioxx cases in Federal court and pursuing all settlement options with Merck. In August 2006, a federal jury in New Orleans found unanimously that Merck had failed to warn doctors about Vioxx’s risks and was responsible for the heart attack suffered by retired FBI agent, Gerald Barnett and awarded $51 million in damages. Lieff Cabraser was co-counsel in the Barnett case. Lieff Cabraser attorneys Don Arbitblit and Jennifer Gross participated in the trial, working closely with attorneys Mark Robinson and Andy Birchfield. The Court subsequently vacated the jury award and ordered a new trial. Lieff Cabraser is continuing to work with co-counsel in the prosecution of the Federal court Vioxx cases.
8. In re Bextra/Celebrex Marketing Sales Practices and Products Liability Litigation, MDL 1699. Lieff Cabraser serves as Plaintiffs’ Liaison Counsel to oversee and direct all personal injury and consumer litigation now pending in Federal courts nationwide arising out of the sale and marketing of the COX-2 inhibitors Bextra, Celebrex, and Parecoxib
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manufactured by Pfizer, Inc and its predecessor companies Pharmacia Corporation and G.D. Searle, Inc. In this ongoing litigation, over 2,500 individuals have brought personal injury claims, and hundreds more individuals and institutions allege that Bextra, Celebrex, and Percoxib were marketed deceptively. In addition to serving as Liaison Counsel, Lieff Cabraser is also directly representing patients injured by Bextra, Celebrex, and Parecoxib.
9. Blood Factor VIII And Factor IX Litigation. Working with counsel in Asia, Europe, Central and South America and the Middle East, Lieff Cabraser represents hundreds of hemophiliacs worldwide, or their survivors and estates, who contracted HIV and/or Hepatitis C (HCV), and Americans with hemophilia who contracted HCV, from contaminated and defective blood factor products produced by American pharmaceutical companies. In 2004, Lieff Cabraser was appointed Plaintiffs’ Lead Counsel of the “second generation” Blood Factor MDL litigation presided over by Judge Grady in the Northern District of Illinois. This groundbreaking litigation follows upon a two-month trial directed by Richard M. Heimann in 2003 in California state court on behalf of a person with hemophilia who is HIV-positive.
10. Sulzer Hip and Knee Implants Litigation. In December 2000, Sulzer Orthopedics, Inc., announced the recall of approximately 30,000 units of its Inter-Op Acetabular Shell Hip Implant, followed in May 2001 with a notification of failures of its Natural Knee II Tibial Baseplate Knee Implant. In coordinated litigation in California state court, In re Hip Replacement Cases, JCCP 4165, Lieff Cabraser served as Court-appointed Plaintiffs’ Liaison Counsel and Co-Lead Counsel. In the federal litigation, In re Sulzer Hip Prosthesis and Knee Prosthesis Liability Litigation, MDL 1410, Lieff Cabraser played a significant role in negotiating a revised settlement with Sulzer valued at more than $1 billion. In May 2002, the Court granted final approval to the revised settlement. Lieff Cabraser serves as Class Counsel for Subclass V of the settlement (class members with unrevised reprocessed Inter-Op shells).
11. In re Baycol Products Litigation, MDL No. 1431 (D. Minn.). Baycol was one of a group of drugs called statins, intended to reduce cholesterol. In August 2001, Bayer A.G. and Bayer Corporation, the manufacturers of Baycol, withdrew the drug from the worldwide market based upon reports that Baycol was associated with serious side effects and linked to the deaths of over 100 patients worldwide. In the federal multi-district litigation, Lieff Cabraser serves as a member of the Plaintiffs’ Steering Committee (PSC) and the Executive Committee of the PSC. In addition, Lieff Cabraser represented approximately 200 Baycol patients who have suffered injuries or family members of patients who died allegedly as a result of ingesting Baycol. In these cases, our clients reached confidential favorable settlements with Bayer.
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12. In re Silicone Gel Breast Implants Products Liability Litigation, MDL No. 926 (N.D. Ala.). Lieff Cabraser serves on the Plaintiffs’ Steering Committee and was one of five members of the negotiating committee which achieved a $4.25 billion global settlement with certain defendants of the action. This was renegotiated in 1995, and is referred to as the Revised Settlement Program (“RSP”). Over 100,000 recipients have received initial payments, reimbursement for the explantation expenses and/or long term benefits.
13. In re Telectronics Pacing Systems Inc., Accufix Atrial “J” Leads Products Liability Litigation, MDL No. 1057 (S.D. Ohio). Lieff Cabraser served on the court-appointed Plaintiffs’ Steering Committee in a nationwide products liability action alleging that defendants placed into the stream of commerce defective pacemaker leads. In April 1997, the district court re-certified a nationwide class of “J” Lead implantees with subclasses for the claims of medical monitoring, negligence and strict product liability. A summary jury trial utilizing jury instructions and interrogatories designed by Lieff Cabraser occurred in February 1998. A partial settlement was approved thereafter by the district court, but reversed by the Court of Appeals. In March 2001, the district court approved a renewed settlement that included a $58 million fund to satisfy all past, present and future claims by patients for their medical care, injuries, or damages arising from the lead.
14. In re Felbatol Products Liability Litigation, MDL No. 1048 (N.D. Cal.). Lieff Cabraser served as Co-Lead Class Counsel and Plaintiffs’ Liaison Counsel in this nationwide litigation asserting medical monitoring, compensatory and punitive damages claims on behalf of 100,000 users of the anti-epilepsy drug Felbatol, who alleged present and potential injuries from its serious adverse effects, including liver failure and aplastic anemia. The nationwide Plaintiff class was certified in 1995; certification was vacated for further findings by the Ninth Circuit in Valentino v. Carter-Wallace, 97 F.3d 1277 (9th Cir. 1996), which affirmed the viability of nationwide mass tort class actions. In 1997, the litigation was settled favorably on behalf of all major injury claimants.
15. In re Cordis Pacemaker Product Liability Litigation, MDL No. 850 (S.D. Ohio). Lieff Cabraser represented a certified nationwide class of Cordis pacemaker recipients on personal injury, emotional distress, fraud, equitable relief, and pacemaker explant compensation claims. In 1995, shortly before trial, Lieff Cabraser negotiated and obtained Court approval of a $21 million settlement of the action.
16. In re Copley Pharmaceutical, Inc., “Albuterol” Products Liability Litigation, MDL No. 1013 (D. Wyo.). Lieff Cabraser served on the Plaintiffs’ Steering Committee in a class action lawsuit against Copley Pharmaceutical, which manufactured Albuterol, a bronchodilator
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prescription pharmaceutical. Albuterol was the subject of a nationwide recall in January 1994 after a microorganism was found to have contaminated the solution, allegedly causing numerous injuries including bronchial infections, pneumonia, respiratory distress and, in some cases, death. In October 1994, the district court certified a nationwide class on liability issues. In re Copley Pharmaceutical, 161 F.R.D. 456 (D. Wyo. 1995). In November 1995, the district court approved a $150 million settlement of the litigation.
B. Securities and Investment Fraud
1. In re Scorpion Technologies, Inc. Securities Litigation I, No. C-9320333-EAI (N.D. Cal.); Dietrich v. Bauer, No. C-95-7051-RWS (S.D.N.Y.); Claghorn v. Edsaco, No. 98-3039-SI (N.D. Cal.). Lieff Cabraser served as Co-Lead Counsel in class action suits arising out of an alleged fraudulent scheme by Scorpion Technologies, Inc., certain of its officers, accountants, underwriters and business affiliates to inflate the company’s earnings through reporting fictitious sales. In Scorpion I, the Court found plaintiffs had presented sufficient evidence of liability under Federal securities acts against the accounting firm Grant Thornton for the case to proceed to trial. In re Scorpion Techs., 1996 U.S. Dist. LEXIS 22294 (N.D. Cal. Mar. 27, 1996). In 1988, the court approved a $5.5 million settlement with Grant Thornton. In 2000, the Court approved a $950,000 settlement with Credit Suisse First Boston Corporation. In April 2002, a federal jury in San Francisco, California returned a $170.7 million verdict against Edsaco Ltd. The jury found that Edsaco aided Scorpion in setting up phony European companies as part of scheme in which Scorpion reported fictitious sales of its software to these companies, thereby inflating its earnings. Included in the jury verdict, one of the largest verdicts in a securities fraud suit in the U.S. in 2002, was $165 million in punitive damages. Richard M. Heimann conducted the trial for plaintiffs.
Following the Edsaco trial, the parties reached a settlement of the action on favorable monetary terms to the class, which included Edsaco’s relinquishment of its right to appeal and the plaintiff’s agreement to vacate the jury verdict. On June 14, 2002, U.S. District Court Judge Susan Illston commented on Lieff Cabraser’s representation: “[C]ounsel for the plaintiffs did a very good job in a very tough situation of achieving an excellent recovery for the class here. You were opposed by extremely capable lawyers. It was an uphill battle. There were some complicated questions, and then there was the tricky issue of actually collecting anything in the end. I think based on the efforts that were made here that it was an excellent result for the class… [T]he recovery that was achieved for the class in this second trial is remarkable, almost a hundred percent.”

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2. Merrill Lynch Fundamental Growth Fund and Merrill Lynch Global Value Fund, Inc., v. McKesson HBOC, Inc., et al., No. 02-405792 (Cal. Supr. Ct.). Lieff Cabraser served as counsel for two Merrill Lynch mutual funds in a private lawsuit filed alleging that a massive accounting fraud occurred at HBOC & Company (“HBOC”) before and following its 1999 acquisition by McKesson Corporation (“McKesson”). The funds charged that defendants, including the former CFO of McKesson HBOC, the name McKesson adopted after acquiring HBOC, artificially inflated the price of securities in McKesson HBOC, through misrepresentations and omissions concerning the financial condition of HBOC, resulting in approximately $150 million in losses for plaintiffs. In a significant discovery ruling in 2004, the California Court of Appeal held that defendants waived the attorney-client and work product privileges in regard to an audit committee report and interview memoranda prepared in anticipation of shareholder lawsuits by disclosing the information to the U.S. Attorney and SEC. McKesson HBOC, Inc. v. Supr. Court, 115 Cal. App. 4th 1229 (2004). In October 2005, the parties entered into a settlement on favorable terms to Merrill Lynch Funds.
3. Alaska State Department of Revenue, et al. v. America Online, Inc., et al., No. 1JU-04-503 (Alaska Supr. Ct.). In December 2006, a $50 million settlement was reached in a securities fraud action brought by the Alaska State Department of Revenue, Alaska State Pension Investment Board and Alaska Permanent Fund Corporation against defendants America Online, Inc. ("AOL"), Time Warner Inc. (formerly known as AOL Time Warner ("AOLTW")), Historic TW Inc. When the action was filed, the Alaska Attorney General estimated the losses at $70 million. The lawsuit, filed in 2004 in Alaska State Court, alleged that defendants misrepresented advertising revenues and growth of AOL and AOLTW along with the number of AOL subscribers, all of which was intended to, and did, artificially inflate the stock price of AOL and AOLTW to the detriment of Alaska State funds.
The Alaska Department of Law retained Lieff Cabraser to lead the litigation efforts under its direction. "We appreciate the diligence and expertise of our counsel in achieving an outstanding resolution of the case," said Mark Morones, spokesperson for the Department of Law, following announcement of the settlement.
4. In re Qwest Communications International, Inc. Securities and “ERISA” Litigation (No. II), No. 06-cv-17880-REB-PAC (MDL No.1788) (D. Colo.). We represent the New York State Common Retirement Fund, Fire and Police Pension Association of Colorado, Denver Employees’ Retirement Plan, San Francisco Employees’ Retirement System, and over thirty separate mutual funds in individual securities fraud actions filed in federal court against Qwest Communications International, Inc., Philip F. Anschutz, former co-
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chairman of the Qwest board of directors and other senior executives at Qwest as well as Arthur Andersen LLP. In each action, defendants are charged with significantly overstating Qwest’s publicly-reported growth, revenues, earnings, and earnings per share from 1999 through 2002. Defendants’ unlawful conduct served to maintain Qwest’s common share price at artificially high levels and enabled the individual defendants to sell Qwest common shares at inflated values.
5. In re Broadcom Corporation, No. CV 06-3252-R (C.D. Cal.). Lieff Cabraser serves as court-appointed Lead Counsel in a stockholders’ derivative action against the board of directors of Broadcom Corporation. The suit alleges defendants intentionally manipulated their stock option grant dates between 1997 and at least the end of 2002 in order to enrich themselves at the expense of Broadcom and Broadcom shareholders. Defendants made it appear as if stock options were granted earlier than they actually were in order to maximize the value of the grant. By making it seem as if stock option grants occurred on dates when Broadcom stock was trading at a comparatively low per share price, Broadcom executives were able to exercise their stock option grants at exercise prices that were lower than the fair market value of Broadcom stock on the day the options were actually granted.
6. In re Brooks Automation, Inc. Securities Litigation, No. 06 CA 11068 (D. Mass.). Lieff Cabraser serves as Court-Appointed Lead Counsel for Lead Plaintiff the Los Angeles County Employees Retirement Association in a class action lawsuit on behalf of all persons who purchased securities of Brooks Automation between July 25, 2001 and May 22, 2006. Plaintiff charges that Brooks Automation, its senior corporate officers and directors violated federal securities laws by participating in a scheme to backdate Brooks Automation stock options over a six year period for the purpose of increasing the value of the stock options.
7. In re Cablevision Systems Corp. Shareholder Derivative Litig., No. 06cv-4130-DGT-AKT (E.D.N.Y.). Lieff Cabraser serves as Co-Lead Counsel in a stockholders’ derivative action against the board of directors of Cablevision. The suit alleges defendants intentionally manipulated their stock option grant dates between 1997 and 2002 in order to enrich themselves at the expense of Cableivision and Cablevision shareholders. Defendants made it appear as if stock options were granted earlier than they actually were in order to maximize the value of the grant. By making it seem as if stock option grants occurred on dates when Cablevision stock was trading at a comparatively low per share price, Cablevision executives were able to exercise their stock option grants at exercise prices that were lower than the fair market value of Cablevision stock on the day the options were actually granted.

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8. Albert, et al. v. Alex. Brown Management Services, Inc., et al.; Baker , et al. v. Alex. Brown Management Services, Inc., et al. (Del. Supr. Ct.). In May 2004, on behalf of investors in two investment funds controlled, managed and operated by Deutsche Bank and advised by DC Investment Partners, Lieff Cabraser filed lawsuits for alleged fraudulent conduct that resulted in an aggregate loss of hundreds of millions of dollars. The suits name as defendants Deutsche Bank and its subsidiaries Alex Brown Management Services and Deutsche Bank Securities, members of the funds’ management committee, as well as DC Investments Partners and two of its principles. Among the plaintiff-investors are 70 high net worth individuals.
9. Kofuku Bank Ltd. and Namihaya Bank Ltd. v. Republic New York Securities Corp., et al., No. 00 CIV 3298 (S.D.N.Y.); and Kita Hyogo Shinyo-Kumiai v. Republic New York Securities Corp., et al., No. 00 CIV 4114 (S.D.N.Y.). Lieff Cabraser represented Kofuku Bank, Namihaya Bank and Kita Hyogo Shinyo-Kumiai (a credit union) in individual lawsuits against, among others, Martin A. Armstrong and HSBC, Inc., the successor-in-interest to Republic New York Corporation, Republic New York Bank and Republic New York Securities Corporation for alleged violations of federal securities and racketeering laws. Through a group of interconnected companies owned and controlled by Armstrong – the Princeton Companies – Armstrong and the Republic Companies promoted and sold promissory notes, known as the “Princeton Notes,” to more than eighty of the largest companies and financial institutions in Japan. Lieff Cabraser’s lawsuits, as well as the lawsuits of dozens of other Princeton Note investors, alleged that the Princeton and Republic Companies made fraudulent misrepresentations and non-disclosures in connection with the promotion and sale of Princeton Notes, and that investors’ moneys were commingled and misused to the benefit of Armstrong, the Princeton Companies and the Republic Companies. In December 2001, the claims of our clients and those of the other Princeton Note investors were settled. As part of the settlement, our clients recovered more than $50 million, which represented 100% of the value of their principal investments less money they received in interest or other payments.
10. Lehman Brothers/First Alliance Mortgage Litigation, No. SA CV 01971 (C.D. Cal.). On June 16, 2003, a federal jury in California held Lehman Brothers, Inc., liable for knowingly assisting First Alliance Mortgage Corporation in committing fraud. First Alliance was accused of misrepresenting the true cost of home loans and of charging borrowers as much as 24% in loan origination and other fees. The jury found that First Alliance systematically defrauded borrowers, and that Lehman Brothers aided and abetted the fraudulent scheme. The verdict showed that the community will hold Wall Street responsible for knowingly serving as a financial backer to abusive lenders. Lieff Cabraser partner Hector D.
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Geribon served as co-counsel in the trial for the plaintiffs. The Ninth Circuit Court of Appeals affirmed class wide liability against Lehman Brothers.
11. Allocco, et al. v. Gardner, et al., No. GIC 806450 (Cal. Supr. Ct.). Lieff Cabraser represents Lawrence L. Garlick, the co-founder and former Chief Executive Officer of Remedy Corporation and 24 other former senior executives and directors of Remedy Corporation in a private (non-class) securities fraud lawsuit against Stephen P. Gardner, the former Chief Executive Officer of Peregrine Systems, Inc., John J. Moores, Peregrine’s former Chairman of the Board, Matthew C. Gless, Peregrine’s former Chief Financial Officer, Peregrine’s accounting firm Arthur Andersen and certain entities that entered into fraudulent transactions with Peregrine. The lawsuit, filed in California state court, arises out of Peregrine’s August 2001 acquisition of Remedy. Plaintiffs charge that they were induced to exchange their Remedy stock for Peregrine stock on the basis of false and misleading representations made by defendants. Within months of the Remedy acquisition, Peregrine began to reveal to the public that it had grossly overstated its revenue during the years 2000-2002, and eventually restated more than $500 million in revenues.
12. In re National Century Financial Enterprises, Inc. Investment Litigation, MDL 1565 (S.D. Ohio). Lieff Cabraser serves as Lead Counsel for the New York City Employees’ Retirement System, Teachers’ Retirement System for the City of New York, New York City Police Pension Fund, and New York City Fire Department Pension Fund in a securities fraud and breach of fiduciary duties lawsuit against Bank One, JPMorgan Chase Bank, Credit Suisse First Boston LLC, and additional defendants. The complaint charges that plaintiffs suffered $89 million in losses as a result of a massive Ponzi scheme orchestrated and implemented by National Century Financial Enterprises and defendants. Lieff Cabraser reached settlements with several of the defendants for the benefit of the Funds and continues to prosecute the case against the non-settling defendants.
13. In re Network Associates, Inc. Securities Litigation, No. C-99-1729WHA (N.D. Cal.). Following a competitive bidding process, the Court appointed Lieff Cabraser as Lead Counsel for the Lead Plaintiff and the class of investors. The complaint alleged that Network Associates improperly accounted for acquisitions in order to inflate its stock price. In May 2001, the Court granted approval to a $30 million settlement.
In reviewing the Network Associates settlement, U.S. District Court Judge William H. Alsup observed, “[T]he class was well served at a good price by excellent counsel . . . We have class counsel who’s one of the most foremost law firms in the country in both securities law and class actions.
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And they have a very excellent reputation for the conduct of these kinds of cases and their experience and views . . .”
14. In re California Micro Devices Securities Litigation, No. C-94-2817VRW (N.D. Cal.). Lieff Cabraser served as Liaison Counsel for the Colorado Public Employees’ Retirement Association and the California State Teachers’ Retirement System, and the class they represented. Prior to 2001, the Court approved $19 million in settlements. In May 2001, the Court approved an additional settlement of $12 million, which, combined with the earlier settlements, provided class members an almost complete return on their losses. The settlement with the company included multimillion dollar contributions by the former Chairman of the Board and Chief Executive Officer.
Commenting in 2001 on Lieff Cabraser’s work in Cal Micro Devices, U.S. District Court Judge Vaughn R. Walker stated, “It is highly unusual for a class action in the securities area to recover anywhere close to the percentage of loss that has been recovered here, and counsel and the lead plaintiffs have done an admirable job in bringing about this most satisfactory conclusion of the litigation.” One year later, in a related proceeding and in response to the statement that the class had received nearly a 100% recovery, Judge Walker observed, “That’s pretty remarkable. In these cases, 25 cents on the dollar is considered to be a magnificent recovery, and this is [almost] a hundred percent.”
15. In re FPI/Agretech Securities Litigation, MDL No. 763 (D. Haw., Real, J.). Lieff Cabraser served as Lead Class Counsel on behalf of multiple classes of investors defrauded in a limited partnership investment scheme. The Court approved $15 million in partial pretrial settlements. At trial, the jury returned a $25 million verdict, which included $10 million in punitive damages plus costs, interest, and attorneys’ fees, against non-settling defendant Arthur Young & Co. on securities and tort claims arising from its involvement in the fraud. Richard M. Heimann served as Lead Trial Counsel in the class action trial. On appeal, the compensatory damages judgment was affirmed and the case was remanded for retrial on punitive damages. In 1994, the Court approved a $17 million class settlement with Ernst & Young.
16. Informix/Illustra Securities Litigation, No. C-97-1289-CRB (N.D. Cal.). Lieff Cabraser represented Richard H. Williams, the former Chief Executive Officer and President of Illustra Information Technologies, Inc. (“Illustra”), and a class of Illustra shareholders in a class action suit on behalf of all former Illustra securities holders who tendered their Illustra preferred or common stock, stock warrants or stock options in exchange for securities of Informix Corporation (“Informix”) in connection with Informix’s 1996 purchase of Illustra. Pursuant to that acquisition, Illustra stockholders received Informix securities representing approximately 10%
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of the value of the combined company. The complaint alleged claims for common law fraud and violations of Federal securities law arising out of the acquisition. In October 1999, U.S. District Judge Charles E. Breyer approved a global settlement of the litigation for $136 million, constituting one of the largest settlements ever involving a high technology company alleged to have committed securities fraud. Our clients, the Illustra shareholders, received approximately 30% of the net settlement fund.
17. In re Media Vision Technology Securities Litigation, No. CV-94-1015 (N.D. Cal.). Lieff Cabraser serves as Co-Lead Counsel in a class action lawsuit which alleged that certain of Media Vision’s officers, outside directors, accountants and underwriters engaged in a fraudulent scheme to inflate the company’s earnings, and issued false and misleading public statements about the company’s finances, earnings and profits. By 1998, the Court had approved several partial settlements with many of Media Vision’s officers and directors, accountants and underwriters which totaled $31 million. The settlement proceeds have been distributed to eligible class members. The evidence that Lieff Cabraser developed in the civil case led prosecutors to commence an investigation and ultimately file criminal charges against Media Vision’s former Chief Executive Officer and Chief Financial Officer. The civil action against Media Vision’s CEO and CFO was stayed pending the criminal proceedings against them. In the criminal proceedings, the CEO pled guilty on several counts, and the CFO was convicted at trial. In October, 2003, the Court granted Plaintiffs’ motions for summary judgment and entered a judgment in favor of the class against these two defendants in the amount of $188 million.
18. Nguyen v. FundAmerica, No. C-90-2090 MHP (N.D. Cal., Patel, J.), 1990 Fed. Sec. L. Rep. (CCH) ¶¶ 95,497, 95,498 (N.D. Cal. 1990). Lieff Cabraser served as Plaintiffs’ Class Counsel in this securities/RICO/tort action seeking an injunction against alleged unfair “pyramid” marketing practices and compensation to participants. The District Court certified a nationwide class for injunctive relief and damages on a mandatory basis and enjoined fraudulent overseas transfers of assets. The Bankruptcy Court permitted class proof of claims. Lieff Cabraser obtained dual District Court and Bankruptcy Court approval of settlements distributing over $13 million in FundAmerica assets to class members.
19. In re First Capital Holdings Corp. Financial Products Securities Litigation, MDL No. 901 (C.D. Cal.). Lieff Cabraser served as Co-Lead Counsel in a class action brought to recover damages sustained by policyholders of First Capital Life Insurance Company and Fidelity Bankers Life Insurance Company policyholders resulting from the insurance companies’ allegedly fraudulent or reckless investment and financial practices, and the manipulation of the companies’ financial statements. This policyholder settlement generated over $1 billion in restored life insurance policies, and was approved by both federal and
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state courts in parallel proceedings and then affirmed by the Ninth Circuit on appeal.
20. In re Precious Metals Dealers/Safrabank Securities Litigation, MDL No. 804 (C.D. Cal.) Lieff Cabraser served as Lead Counsel for a class of purchasers who were allegedly fraudulently induced to purchase precious metal through similar high pressure sales pitches. The case resulted in a $10 million settlement.
C. Employment Discrimination and Unfair Employment Practices
1. Butler v. Home Depot, No. C94-4335 SI (N.D. Cal.). Lieff Cabraser and co-counsel represented a class of approximately 25,000 female employees and applicants for employment with Home Depot’s West Coast Division who alleged gender discrimination in connection with hiring, promotions, pay, job assignment, and other terms and conditions of employment. The class was certified in January 1995. In January 1998, the court approved a $87.5 million settlement of the action that included comprehensive injunctive relief over the term of a five-year Consent Decree. Under the terms of the settlement, Home modified its hiring, promotion, and compensation practices to ensure that interested and qualified women were hired for, and promoted to, sales and management positions.
On January 14, 1998, U.S. District Judge Susan Illston commented that the settlement provides “a very significant monetary payment to the class members for which I think they should be grateful to their counsel… Even more significant is the injunctive relief that’s provided for . . .” By 2003, the injunctive relief had created thousands of new job opportunities in sales and management positions at Home Depot, generating the equivalent of over approximately $100 million per year in wages for female employees.
In 2002, Judge Illston stated that the injunctive relief has been a “win/win . . . for everyone, because . . . the way the Decree has been implemented has been very successful and it is good for the company as well as the company’s employees.”
2. In Re Farmers Insurance Exchange Claims Representatives’ Overtime Pay Litigation, MDL No. 1439 (D. Or.). Lieff Cabraser and co-counsel represent personal lines claims representatives of Farmers’ Insurance Exchange seeking unpaid overtime. In November 2003, after a threeweek liability phase trial, the court held that Farmers’ claims adjusters who handle auto and low level property claims are entitled to overtime. 300 F. Supp. 2d 1020 (2003). The court further found that Farmers’ actions were willful and were not taken in good faith, entitling the workers to liquidated damages. In January and May 2005, the court entered judgments totaling $52.5 million against Farmers, the largest judgments

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ever entered in as the result of the trial of a Fair Labor Standards Act (“FLSA”) trial. In October 2006, the Ninth Circuit Court of Appeals reversed the judgment for plaintiffs under the FLSA and certain state laws, and remanded the case for further proceedings under the laws of Minnesota, Oregon, and Colorado.
3. Rosenburg, et al. v. IBM, No. C06-0430 JDC (N.D. Cal.). In July 2007, the Court granted final approval to a $65 million settlement of a class action suit by current and former technical support workers for IBM seeking unpaid overtime. The settlement constitutes a record amount in litigation seeking overtime compensation for employees in the computer industry. Plaintiffs alleged that IBM illegally misclassified its employees who install or maintain computer hardware or software as “exempt” from the overtime pay requirements of federal and state labor laws.
4. Satchell, et al. v. FedEx Express, No. C 03-2659 SI; C 03-2878 SI (N.D. Cal.). In 2007, the court approved a $54.9 million settlement of the race discrimination class action lawsuit by African American and Latino employees of FedEx Express. The settlement requires FedEx to reform its promotion, discipline, and pay practices. Under the settlement, FedEx will implement multiple steps to promote equal employment opportunities, including making its performance evaluation process less discretionary, discarding use of the "Basic Skills Test" as a prerequisite to promotion into certain desirable positions, and changing employment policies to demonstrate that its revised practices do not continue to foster racial discrimination. The settlement, covering 20,000 hourly employees and operations managers who have worked in the western region of FedEx Express since October 1999, was approved by the Court in August 2007.
5. Amochaev et al. v. Citigroup Global Markets, Inc., d/b/a Smith Barney, No. C05-1298 PJH (N.D. Cal.). Female Financial Advisors allege that Smith Barney discriminated against them in account distributions, business leads, referral business, partnership opportunities, sales support, and other terms of employment. The suit is brought on behalf of a national class of all female Financial Advisors, employed at Smith Barney since August 30, 2003, and a California subclass of all female Financial Advisors employed at Smith Barney in California since June 25, 2003. Lieff Cabraser serves as co-counsel for plaintiffs.
6. Gonzalez et al. v. Abercrombie & Fitch Stores, Inc. et al., No. C03-2817 SI (N.D. Cal.). In April 2005, the Court approved a settlement, valued at approximately $50 million, which requires the retail clothing giant Abercrombie & Fitch to provide monetary benefits of $40 million to the class of Latino, African American, Asian American and female applicants and employees who charged the company with discrimination. The settlement also requires the company to institute a range of policies and programs to promote diversity among its workforce and to prevent
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discrimination based on race or gender. Lieff Cabraser serves as Lead Class Counsel and prosecuted the case with a number of co-counsel firms, including the Mexican American Legal Defense and Education Fund, the Asian Pacific American Legal Center and the NAACP Legal Defense and Educational Fund, Inc. Implementation of the consent decree continues into 2011.
7. Frank v. United Airlines, Inc., No. C-92-0692 MJJ (N.D. Cal.). Lieff Cabraser and co-counsel obtained a $36.5 million settlement in February 2004 for a class of female flight attendants who were required to weigh less than comparable male flight attendants.
Former U.S. District Court Judge Charles B. Renfrew (ret.), who served as a mediator in the case, stated, “As a participant in the settlement negotiations, I am familiar with and know the reputation, experience and skills of lawyers involved. They are dedicated, hardworking and able counsel who have represented their clients very effectively.” U.S. District Judge Martin J. Jenkins, in granting final approval to the settlement, found “that the results achieved here could be nothing less than described as exceptional,” and that the settlement “was obtained through the efforts of outstanding counsel.”
8. Winnett, et al. v. Caterpillar, Inc., No. 3:06-cv-00235 (M.D. Tenn.). Lieff Cabraser serves as co-counsel representing retirees in a nationwide class action lawsuit against Caterpillar, Inc. In October 2004 Caterpillar began charging monthly premiums despite longstanding contracts that promise free healthcare to certain participants and their spouses. The lawsuit seeks to end these charges and restore the plaintiffs and similarly situated retirees to the position they would have been but for Caterpillar’s contractual violations. In July 2007, the Court granted the plaintiffs’ class certification motion.
9. Barnett v. Wal-Mart, No. 01-2-24553-SNKT (Wash.); Gamble v. WalMart, No. 7121-01 (N.Y.). Lieff Cabraser and co-counsel represent proposed classes of hourly wage earners at Wal-Mart in Washington and New York who allegedly have been forced to work “off-the-clock” (without pay). Plaintiffs, current and former Wal Mart employees, allege that, in violation of state wage and hour laws, Wal-Mart forces employees to work through breaks and to work without pay after they have clocked out. In October 2004, in the Washington Wal-Mart action, the Court certified a class of approximately 40,000 current and former Wal-Mart employees.
10. Holloway, et al. v. Best Buy, No. C05-5036 PJH (N.D. Cal.). Lieff Cabraser, with co-counsel, represents a proposed class of current and former employees of Best Buy in a federal class action civil rights lawsuit. Plaintiffs allege that Best Buy stores nationwide discriminate against
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women and minorities, specifically African Americans and Latinos. These employees charge that they are paid less than white males, denied promotions, and assigned to less desirable positions. The suit also alleges that Best Buy discriminates against women and minorities in hiring decisions.
11. Giannetto v. Computer Sciences Corporation, 03-CV-8201 (C.D. Cal.). In one of the largest overtime pay dispute settlements ever in the information technology industry, the Court in July 2005 granted final approval to a $24 million settlement with Computer Sciences Corporation. Plaintiffs charged that the global conglomerate had a common practice of refusing to pay overtime compensation to its technical support workers
involved in the installation and maintenance of computer hardware and software
in violation of the Fair Labor Standards Act, California’s Unfair Competition Law, and the wage and hour laws of 13 states.
12. Foster v. The Great Atlantic & Pacific Tea Company, Inc. (“A&P”), No. 99 Civ. 3860 (CM) (S.D.N.Y.). Lieff Cabraser, along with cocounsel, represented approximately 870 current and former employees of New York area supermarkets suing under the Fair Labor Standards Act. The Opt-In Plaintiffs in the certified collective action sought unpaid overtime compensation resulting from Defendants’ alleged failure to compensate employees for work performed “off-the-clock.” In May 2004, the Court approved a settlement providing $3.11 million to the Opt-In Plaintiffs. In June 2004, current and former full-time hourly employees of The Great Atlantic & Pacific Tea Company filed a new lawsuit against defendants in New York state court. The plaintiffs allege that defendants systematically failed to pay overtime wages and deleted hours worked from time records in violation of New York labor law. In July 2007, the Court certified the class of thousands of cashiers, clerks, bakers, deli and other hourly-paid workers.
13. Goddard, et al. v. Longs Drug Stores Corporation, et al., No. RG04141291 (Cal. Supr. Ct.). Store managers and assistant store managers of Longs Drugs charged that the company misclassified them as exempt from overtime wages. Managers regularly worked in excess of 8 hours per day and 40 hours per week without compensation for their overtime hours. Following mediation, in 2005, Longs Drugs agreed to settle the claims for a total of $11 million. Over 1,000 current and former Longs Drugs managers and assistant managers were eligible for compensation under the settlement, over 98% of the class submitted claims.
14. Zuckman v. Allied Group, No. 02-5800 SI (N.D. Cal.). In September 2004, the Court approved a settlement with Allied Group and Nationwide Mutual Insurance Company of $8 million plus Allied/Nationwide’s share of payroll taxes on amounts treated as wages, providing plaintiffs a 100%
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recovery on their claims. Plaintiffs, claims representatives of Allied / Nationwide, alleged that the company misclassified them as exempt employees and failed to pay them and other claims representatives in California overtime wages for hours they worked in excess of eight hours or forty hours per week. In approving the settlement, U.S. District Court Judge Susan Illston commended counsel for their “really good lawyering” and stated that they did “a splendid job on this” case.
15. Trotter v. Perdue Farms, Inc., No. C 99-893-RRM (JJF) (MPT) (D. Del.). Lieff Cabraser represented a class of chicken processing employees of Perdue Farms, Inc., one of the nation’s largest poultry processors, for wage and hour violations. The suit challenged Perdue’s failure to compensate its assembly line employees for putting on, taking off, and cleaning protective and sanitary equipment in violation of the Fair Labor Standards Act, various state wage and hour laws, and the Employee Retirement Income Security Act. Under a settlement approved by the Court in 2002, Perdue paid $10 million for wages lost by its chicken processing employees and attorneys’ fees and costs. The settlement was in addition to a $10 million settlement of a suit brought by the Department of Labor in the wake of Lieff Cabraser’s lawsuit.
16. Sandoval v. Mountain Center, Inc., et al. No. 03CC00280 (Cal. Supr. Ct.). Cable installers in California charged that defendants owed them overtime wages, as well as damages for missed meal and rest breaks and reimbursement for expenses incurred on the job. In 2005, the Court approved a $7.2 million settlement of the litigation, which was distributed to the cable installers who submitted claims.
17. Gottlieb v. SBC Communications, No. CV-00-04139 AHM (MANx) (C.D. Cal.). With co-counsel, Lieff Cabraser represented current and former employees of SBC and Pacific Telesis Group (“PTG”) who participated in AirTouch Stock Funds, which were at one time part of PTG’s salaried and non-salaried savings plans. After acquiring PTG, SBC sold AirTouch, which PTG had owned, and caused the AirTouch Stock Funds that were included in the PTG employees’ savings plans to be liquidated. Plaintiffs alleged that in eliminating the AirTouch Stock Funds, and in allegedly failing to adequately communicate with employees about the liquidation, SBC breached its duties to 401k plan participants under the Employee Retirement Income Security Act. In 2002, the Court granted final approval to a $10 million settlement.
18. Thomas v. California State Automobile Association, No. CH217752 (Cal. Supr. Ct.). With co-counsel, Lieff Cabraser represented 1,200 current and former field claims adjusters who worked for the California State Automobile Association (“CSAA”). Plaintiffs alleged that CSAA improperly classified their employees as exempt, therefore denying them
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overtime pay for overtime worked. In May 2002, the Court approved an $8 million settlement of the case.
19. Church v. Consolidated Freightways, No. C90-2290 DLJ (N.D. Cal.). Lieff Cabraser was the Lead Court-appointed Class Counsel in this class action on behalf of the exempt employees of Emery Air Freight, a freight forwarding company acquired by Consolidated Freightways in 1989. On behalf of the employee class, Lieff Cabraser prosecuted claims for violation of the Employee Retirement Income Security Act, the securities laws, and the Age Discrimination in Employment Act. The case settled in 1993 for $13.5 million.
20. Buttram v. UPS, Inc., No. C-97-01590 MJJ (N.D. Cal.). Lieff Cabraser and several co-counsel represented a class of approximately 14,000 African-American part-time hourly employees of UPS’s Pacific and Northwest Regions alleging race discrimination in promotions and job advancement. In 1999, the Court approved a $12.14 million settlement of the action. Under the injunctive relief portion of the settlement, among other things, Class Counsel continues to monitor the promotions of African-American part-time hourly employees to part-time supervisor and full-time package car driver.
21. Lyon v. TMP Worldwide, Inc., No. 993096 (Cal. Supr. Ct.). Lieff Cabraser served as Class Counsel for a class of certain non-supervisory employees in an advertising firm. The settlement, approved in 2000, provided almost a 100% recovery to class members. The suit alleged that TMP failed to pay overtime wages to these employees.
22. Kahn v. Denny’s, No. BC177254 (Cal. Supr. Ct.). Lieff Cabraser brought a lawsuit alleging that Denny’s failed to pay overtime wages to its General Managers and Managers who worked at company-owned restaurants in California. The Court approved a $4 million settlement of the case in 2000.
23. Giles v. Allstate, JCCP Nos. 2984 and 2985. Lieff Cabraser represented a class of Allstate insurance agents seeking reimbursement of out-of-pocket costs. The action settled for approximately $40 million.
24. Bogan v. Fleetwood Enterprises, Inc., No. CIV 00-0440-S-BLW (D. Idaho). Lieff Cabraser, along with co-counsel, represents a nationwide class of women production associates who allegedly have been discriminated against on the basis of sex with respect to promotions and compensation, and who allegedly have been subjected to rampant sexual harassment. In 2002, the Court approved a settlement that included comprehensive injunctive relief.

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Lieff Cabraser attorneys have also had experience working on several other employment cases, including cases involving race, gender, and age discrimination, ERISA, breach of contract claims, and wage/hour claims. Lieff Cabraser attorneys frequently write amici briefs on cuttingedge legal issues involving employment law. Lieff Cabraser is currently investigating charges of race, gender and/or age discrimination, and wage/hour violations against several companies.
In 2004, Kelly M. Dermody, who oversees the firm’s employment law practice, was included by The Recorder in a list of the best employment lawyers in the San Francisco Bay Area, and has also been selected as a Northern California Super Lawyer. In 2007, the Daily Journal recognized Ms. Dermody as one of the “Top Women Litigators in California,” and she also received a California Lawyer Attorney of the Year (CLAY) Award from California Lawyer magazine.
D. Consumer Protection
1. Sutter Health Uninsured Pricing Cases, J.C.C.P. No. 4388. Plaintiffs alleged that they and a Class of uninsured patients treated at Sutter hospitals were charged substantially more than patients with private or public insurance, and many times above the cost of providing their treatment. In December 2006, the Court granted final approval to a comprehensive and groundbreaking settlement of the action. As part of the settlement, Class members will be entitled to make a claim for refunds or deductions of between 25% to 45% from their prior hospital bills, at an estimated total value of $276 million. For the next three years, Sutter will maintain discounted pricing policies for uninsureds that will make Sutter’s pricing for uninsureds comparable to or better than the pricing for patients with private insurance. In addition, Sutter agreed to maintain more compassionate collections policies that will protect uninsureds who fall behind in their payments. Lieff Cabraser served as Lead Counsel in the coordinated action.
2. Catholic Healthcare West Cases, J.C.C.P. No. 4453. Plaintiff alleged that Catholic Healthcare West (“CHW”) charged uninsured patients excessive fees for treatment and services, at rates far higher than the rates charged to patients with private insurance or on Medicare. In January 2007, the Court approved a settlement that provides discounts, refunds and other benefits for CHW patients valued at $423 million. The settlement requires that CHW lower its charges and end price discrimination against all uninsured patients, maintain generous charity case policies allowing lowincome uninsureds to receive free or heavily discounted care, and protect uninsured patients from unfair collections practices. Lieff Cabraser served as Lead Counsel in the coordinated action.
3. Ricci v. Ameriquest Mortgage Company, No. 27-CV-05-2546 (Minn. District Court). Lieff Cabraser serves as Plaintiffs’ Lead Counsel for a certified class of Minnesota property owners who obtained mortgage loans from Ameriquest Mortgage Company. Plaintiffs charge that Ameriquest

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has engaged in a deceptive and unlawful business practices in violation of Minnesota law. Plaintiffs allege that Ameriquest trains its sales force to target economically vulnerable persons in a predatory lending scheme based on the sale of loans with illegal and undisclosed fees and terms.
4. R.M. Galicia v. Franklin; Franklin v. Scripps Health, Case No. IC 859468 (San Diego Supr. Ct.). Lieff Cabraser serves as Lead Class Counsel in a certified class action lawsuit against the Scripps Health hospital system for overcharging uninsured patients for medical treatment. The class action originated in July 2006, when uninsured patient Phillip Franklin filed a class action cross-complaint against Scripps Health after Scripps sued Mr. Franklin through a collection agency. Mr. Franklin alleged that he, like all other uninsured patients of Scripps Health, was charged unreasonable and unconscionable rates for his medical treatment. In June 2007, the Court granted class certification on behalf of over 50,000 uninsured patients who were treated in Scripps' emergency department since 2002 and who challenge excessive prices for medical services.
5. Brazil v. Dell, No. C-07-01700 RMW (N.D. Cal.). Lieff Cabraser serves as counsel for consumers that charge Dell has engaged in a scheme to deliberately cheat large numbers of consumers. The complaint charges that Dell advertises “limited time” specific-dollar discounts from expressly referenced former prices, but that the discounts are false because the reference prices are inflated beyond Dell’s true regular prices. On August 3, 2007, U.S. District Court Judge Ronald M. Whyte Dell’s motions to enforce a class action waiver clause and to compel arbitration. The Court found that the provisions in Dell's purchase agreement requiring disputes to be resolved through individual arbitration proceedings and prohibiting class actions are unconscionable under California law.
6. Schaffer v. Litton Loan Servicing, LP, No. CV 05-07673 (C.D. Cal.). Plaintiffs, all homeowners with a mortgage loan serviced by Litton Loan Servicing, charge that Litton has engaged in a scheme by which it fails to accurately service its borrowers’ loans, including misapplying or failing to apply payments made. In July 2007, the Court certified a nationwide class of borrowers who have claims against Litton for violation of 12 U.S.C. § 2605(d), a provision of the Real Estate Settlement Procedures Act. This provision creates a 60-day grace period following the transfer of servicing of a mortgage loan, and prohibits loan servicers from imposing late fees or otherwise treating as late any payment that was "received by the transferor servicer (rather than the transferee servicer who should properly receive payment) before the due date applicable to such payment." 12 U.S.C. § 2605(d).
7. In re Tri-State Crematory Litigation, MDL No. 1467 (N.D. Ga.). In March 2004, Lieff Cabraser delivered opening statements and began
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testimony in a class action by families whose loved ones were improperly cremated and desecrated by Tri-State Crematory in Noble, Georgia. The families also asserted claims against the funeral homes that delivered the decedents to Tri-State Crematory for failing to ensure that the crematory performed cremations in the manner required under the law and by human decency. One week into trial, settlements with the remaining funeral home defendants were reached and brought the settlement total to approximately $37 million. Trial on the class members’ claims against the operators of crematory began in August 2004. Soon thereafter, these defendants entered into a $80 million settlement with plaintiffs. As part of the settlement, all buildings on the Tri-State property were razed. The property will remain in a trust so that it will be preserved in peace and dignity as a secluded memorial to those whose remains were mistreated, and to prevent crematory operations or other inappropriate activities from ever taking place there. Earlier in the litigation, the Court granted plaintiffs’ motion for class certification in a published order. 215 F.R.D. 660 (2003).
8. Morris v. AT&T Wireless Services, No. C-04-1997-MJP (W.D. Wash.). Lieff Cabraser served as class counsel for a nationwide settlement class of cell phone customers subjected to an end of billing cycle cancellation policy implemented by AT&T Wireless in 2003 and alleged to have breached customers’ service agreements. In May 2006, the New Jersey Superior Court granted final approval to a class settlement that guarantees delivery to the class of $40 million in benefits. Class members received cash-equivalent calling cards automatically, and had the option of redeeming them for cash. Lieff Cabraser had been prosecuting the class claims in the Western District of Washington when a settlement in New Jersey state court was announced. Lieff Cabraser objected to that settlement as inadequate because it would have only provided $1.5 million in benefits without a cash option, and the court agreed, declining to approve it. Thereafter, Lieff Cabraser negotiated the new settlement providing $40 million to the class, and the settlement was approved.
9. Estate of Holman, et al. v. Noble Energy, Inc., No. 03 CV 9 (Dist. Ct., Weld County, Colorado). Lieff Cabraser served as Co-Lead Counsel for a class of royalty owners with mineral interests in Colorado. Plaintiffs alleged that Noble Energy and Patina, its predecessor company, underpaid Class members for natural gas production royalties in violation of state law. In June 2007, the Court granted preliminary approval to a $53 million settlement of the action. The settlement also provided for a significant improvement in the calculation of future royalty payments, which were estimated to benefit the Class an additional $50 million.
10. Strugano v. Nextel Communications, Inc., No. BC 288359 (Los Angeles Supr. Crt). In May 2006, the Los Angeles Superior Court granted final approval to a class action settlement on behalf of all California customers
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of Nextel from January 1, 1999 through December 31, 2002, for compensation for the harm caused by Nextel’s alleged unilateral (1) addition of a $1.15 monthly service fee and/or (2) change from second-bysecond billing to minute-by-minute billing, which caused “overage” charges (i.e., for exceeding their allotted cellular plan minutes). The total benefit conferred by the Settlement directly to Class Members was between approximately $13.5 million and $55.5 million, depending on which benefit Class Members selected. Class Counsel secured these benefits for a Class of approximately 308,000 customers with 1.1 million cell phone plans.
11. Thompson, et al. v. WFS Financial, Inc., No. 3-02-0570 (M.D. Tenn.); Pakeman, et al. v. American Honda Finance Corporation, No. 3-020490 (M.D. Tenn.); Herra v. Toyota Motor Credit Corporation, No. CGC 03-419 230 (San Francisco Supr. Ct.). For the past five years, Lieff Cabraser with co-counsel litigated against several of the largest automobile finance companies in the country to compensate victims of – and stop future instances of – racial discrimination in the setting of interest rates in automobile finance contracts. The litigation led to substantial changes in the way Toyota Motor Credit Corporation (“TMCC”), American Honda Finance Corporation (“American Honda”) and WFS Financial, Inc., sell automobile finance contracts, limiting the discrimination that can occur.
TMCC, American Honda and WFS Financial allow independent automobile dealers to add a discretionary markup (often several percentage points) to the objective, credit-based interest rates determined by the finance company. Plaintiffs charged that African-American and Latino customers paid more in finance charges than similarly situated nonminority customers due to the practice by TMCC, American Honda and WFS Financial of allowing dealers to increase, or “mark up,” a customer’s Annual Percentage Rate (“APR”) on contracts. The discretionary markup amounts were not based on objective credit-worthiness information, but were wholly subjective. Statistical analyses showed that the discretionary markups had a disparate impact on African American and Latino customers.
In the nationwide class action litigation against TMCC, American Honda and WFS Financial, the respective parties entered into landmark settlements for African American and Latino consumers which collectively provided:
• Cash or credit payments of up to $400 per class member.
• Broad refinancing programs reducing rates charged to
existing African-American and Latino customers whose
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markups were 1% or more. These benefits were valued at $1 billion in the WFS Financial case alone.
• New pre-approved offers of credit (that cannot be marked
up) to 1.5 million African American and Latino consumers.
• Limits on discretionary markups on new loans of 1.75% to
2.50% (depending on the length of the loan). This compression of the discretionary range substantially reduced the likelihood that any markups in the future will occur as the result of racial discrimination.
• New disclosures on all contracts explaining that the interest
rate may be negotiable.
• Donations of $1.9 million to non-profit organizations
involved in consumer education and assistance.
In approving the settlement in Thompson v. WFS Financial, the Court recognized the “innovative” and “remarkable settlement” achieved on behalf of the nationwide class. In 2006 in Herra v. Toyota Motor Credit Corporation, the Court granted final approval to a nationwide class action settlement on behalf of all African-American and Hispanic customers of TMCC who entered into retail installment contracts that were assigned to TMCC from 1999 to 2006. The monetary benefit to the class was estimated to be between $159 and $174 million.
12. Providian Credit Card Cases, No. JCCP 4085 (San Francisco Supr. Ct.). Lieff Cabraser served as Co-Lead Counsel for a certified national Settlement Class of Providian credit cardholders who alleged that Providian had engaged in widespread misconduct by charging cardholders unlawful, excessive interest and late charges, and by promoting and selling to cardholders “add-on products” promising illusory benefits and services. In November 2001, the Court granted final approval to a $105 million settlement of the case, which also required Providian to implement substantial changes in its business practices. The $105 million settlement, combined with an earlier settlement by Providian with Federal and state agencies, represents the largest settlement ever by a U.S. credit card company in a consumer protection case.
13. California Title Insurance Industry Litigation. Lieff Cabraser, in coordination with parallel litigation brought by the Attorney General, reached settlements in 2003 and 2004 with the leading title insurance companies in California, resulting in historic industry-wide changes to the practice of providing escrow services in real estate closings. The settlements brought a total of $50 million in restitution to California consumers, including cash payments. In the lawsuits, plaintiffs alleged,
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among other things, that the title companies received interest payments on customer escrow funds that were never reimbursed to their customers. The defendant companies include Lawyers’ Title, Commonwealth Land Title, Stewart Title of California, First American Title, Fidelity National Title, and Chicago Title.
14. Kline v. The Progressive Corporation, Circuit No. 02-L-6 (Circuit Court of the First Judicial Circuit, Johnson County, Illinois). Lieff Cabraser served as settlement class counsel in a nationwide consumer class action challenging Progressive Corporation’s private passenger automobile insurance sales practices. Plaintiffs alleged that the Progressive Corporation wrongfully concealed from class members the availability of lower priced insurance for which they qualified. In 2002, the Court approved a settlement valued at approximately $450 million, which included both cash and equitable relief. The claims program, implemented upon a nationwide mail and publication notice program, was completed in 2003.
15. Citigroup Loan Cases, JCCP No. 4197 (San Francisco Supr. Ct.). In 2003, the Court approved a settlement that provided approximately $240 million in relief to former Associates’ customers across America. Prior to its acquisition in November 2000, Associates First Financial, referred to as The Associates, was one of the nation’s largest “subprime” lenders. Lieff Cabraser represented former customers of The Associates charging that the company added on mortgage loans unwanted and unnecessary insurance products and engaged in improper loan refinancing practices. Lieff Cabraser served as nationwide Plaintiffs’ Co-Liaison Counsel.
16. In re Ocwen Federal Bank FSB Mortgage Servicing Litigation, MDL No. 1604 (Northern District of Illinois). Lieff Cabraser serves as Co-Lead Plaintiffs’ Counsel in a nationwide class action against Ocwen Financial Corporation, Ocwen Federal Bank FSB, and their affiliates (“Ocwen”). This lawsuit arises out of charges against Ocwen of misconduct in servicing its customers’ mortgage loans and in its provision of certain related services, including debt collection and foreclosure services.
17. Curry v. Fairbanks Capital Corporation, No. 03-10895-DPW (D. Mass.). In 2004, the Court approved a $55 million settlement of a class action lawsuit against Fairbanks Capital Corporation arising out of charges against Fairbanks of misconduct in servicing its customers’ mortgage loans. The settlement also required substantial changes in Fairbanks’ business practices and established a default resolution program to limit the imposition of fees and foreclosure proceedings against Fairbanks’ customers. Lieff Cabraser served as nationwide CoLead Counsel for the homeowners.

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18. In re Synthroid Marketing Litigation, MDL No. 1182 (N.D. Ill.). Lieff Cabraser served as Co-Lead Counsel for the purchasers of the thyroid medication Synthroid in litigation against Knoll Pharmaceutical, the manufacturer of Synthroid. The lawsuits charged that Knoll misled physicians and patients into keeping patients on Synthroid despite knowing that less costly, but equally effective drugs, were available. In 2000, the District Court gave final approval to a $87.4 million settlement with Knoll and its parent company, BASF Corporation, on behalf of a class of all consumers who purchased Synthroid at any time from 1990 to 1999. In 2001, the Court of Appeals upheld the order approving the settlement and remanded the case for further proceedings. 264 F. 3d 712 (7th Circ. 2001). The settlement proceeds were distributed in 2003.
19. Reverse Mortgage Cases, JCCP No. 4061 (San Mateo County Supr Ct., Cal.). Transamerica Corporation, through its subsidiary Transamerica Homefirst, Inc., sold “reverse mortgages” marketed under the trade name “Lifetime.” The Lifetime reverse mortgages were sold exclusively to seniors, i.e., persons 65 years or older. Lieff Cabraser, with co-counsel, filed suit on behalf of seniors alleging that the terms of the reverse mortgages were unfair, and that borrowers were misled as to the loan terms, including the existence and amount of certain charges and fees. In 2003, the Court granted final approval to an $8 million settlement of the action.
20. In re American Family Enterprises, MDL No. 1235 (D.N.J.). Lieff Cabraser served as co-lead counsel for a nationwide class of persons who received any sweepstakes materials sent under the name “American Family Publishers.” The class action lawsuit alleged that defendants deceived consumers into purchasing magazine subscriptions and merchandise in the belief that such purchases were necessary to win an American Family Publishers’ sweepstakes prize or enhanced their chances of winning a sweepstakes prize. In September 2000, the Court granted final approval of a $33 million settlement of the class action. In April 2001, over 63,000 class members received refunds averaging over $500 each, representing 92% of their eligible purchases. In addition, American Family Publishers agreed to make significant changes to the way it conducts the sweepstakes.
21. In re Sears Automotive Center Consumer Litigation, Civ. No. C-92-2227 RHS (N.D. Cal.). Lieff Cabraser served as Plaintiffs’ Co-Lead Counsel for a certified nationwide class of Sears auto center customers for purposes of approval of a combined injunctive relief/refund settlement. As part of the settlement, Sears distributed to class members merchandise coupons valued at $25 million.
22. Roberts v. Bausch & Lomb, Civ. No. 94-C-1144-W (N.D. Ala.). Lieff Cabraser was designated as one of several Class Counsel in November
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1994 in this nationwide consumer fraud class action involving deceptive marketing of contact lenses. In 1996, the Court approved a settlement valued at $68 million ($34 million cash and $34 million in eye care products).
23. In re Miracle Ear Consumer Litigation, Civ. No. 94-1696 (4th Jud. Dist. Minn.). Lieff Cabraser served as Co-Lead Class Counsel in a nationwide class action certified in late 1994 involving claims arising from misrepresentations regarding performance of a hearing aid device. State courts in Minnesota and Alabama granted final approval to the nationwide settlement.
E. Antitrust/Trade Regulation/Intellectual Property
1. Microsoft Private Antitrust Litigation. Representing businesses and consumers, Lieff Cabraser prosecuted multiple private antitrust cases against Microsoft Corporation in state courts across the country, including Florida, New York, North Carolina, and Tennessee. Plaintiffs alleged that Microsoft engaged in anticompetitive conduct and/or violated state deceptive and unfair business practices statutes to harm competition and monopolize the markets for Intel-compatible, personal computer operating system software, as well as word processing and spreadsheet software. In August 2006, the New York Supreme Court granted final approval to a settlement that makes available up to $350 million in benefits for New York businesses and consumers. In August 2004, the Court in the North Carolina action granted final approval to a settlement valued at over $89 million. In June 2004, the Court in the Tennessee action granted final approval to a $64 million settlement. In November 2003, in the Florida Microsoft litigation, the Court granted final approval to a $202 million settlement, one of the largest antitrust settlements in Florida history. Lieff Cabraser served as Co-Lead Counsel in the New York, North Carolina and Tennessee cases, and held leadership roles in the Florida case.
2. Natural Gas Antitrust Cases, J.C.C.P. Nos. 4221, 4224, 4226 & 4228 (Cal. Supr. Ct.). In December 2006, the Court granted final approval to a $92 million partial settlement of a series of class action lawsuits brought by California business and residential consumers of natural gas against a group of natural gas suppliers, Coral Energy Resources, L.P.; Dynegy Inc. and affiliates; EnCana Corporation; WD Energy Services, Inc.; and The Williams Companies, Inc. and affiliates. In June 2007, the Court granted final approval to another settlement with Reliant Energy Services, Inc., Duke Energy Trading and Marketing LLC, CMS Energy Resources Management Company, and Aquila Merchant Services, Inc., for an additional $67.39 million.
Plaintiffs charged defendants with manipulating the price of natural gas in California during the California energy crisis of 2000-2001 by a variety of

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means, including falsely reporting the prices and quantities of natural gas transactions to trade publications, which compiled daily and monthly natural gas price indices; prearranged wash trading; and, in the case of Reliant, “churning” on the Enron Online electronic trading platform, which was facilitated by a secret netting agreement between Reliant and Enron.
The 2006-2007 settlements follow a landmark $1.5 billion settlement of class action litigation in 2003 against El Paso Natural Gas Co. for manipulating the market for natural gas pipeline transmission capacity into California. Lieff Cabraser has served as Plaintiffs’ Co-Lead Counsel in the Natural Gas Antitrust Cases I-IV.
3. Wholesale Electricity Antitrust Cases I & II, J.C.C.P. Nos. 4204 & 4205 (Cal. Supr. Ct.). Lieff Cabraser served as co-lead counsel in the private class action litigation against Duke Energy Trading & Marketing Reliant Energy, and The Williams Companies for claims that the companies manipulated California’s wholesale electricity markets during the California energy crisis of 2000-2001. Extending the landmark victories for California residential and business consumers of electricity, in September 2004, plaintiffs reached a $206 million settlement with Duke Energy Trading & Marketing, and in August 2005, plaintiffs reached a $460 million settlement with Reliant Energy, settling claims that the companies manipulated California’s wholesale electricity markets during the California energy crisis of 2000-01. Lieff Cabraser earlier entered into a settlement for over $400 million with The Williams Companies.
4. In re TFT-LCD (Flat Panel) Antitrust Litigation, MDL No. 1827 (N.D. Cal.). Representing direct purchasers of flat-panel TV screens and other products incorporating liquid crystal displays, Lieff Cabraser serves as one of two Interim Lead Counsel in nationwide class action litigation against the world’s leading manufacturers of Thin Film Transistor Liquid Crystal Displays. TFT-LCDs are used in flat-panel televisions as well as computer monitors, laptop computers, mobile phones, personal digital assistants and other devices. The plaintiffs allege that from at least January 1, 1998 through December 31, 2005 defendants conspired to raise, fix and stabilize the prices of TFT-LCDs.
5. Azizian v. Federated Department Stores, 3:03 CV 03359 SBA (N.D. Cal.). In March 2005, the Court granted final approval to a settlement that Lieff Cabraser and co-counsel reached with numerous department store cosmetics manufacturers and retailers. The settlement is valued at $175 million and includes significant injunctive relief, for the benefit of a nationwide class of consumers of department store cosmetics. The complaint alleged the manufacturers and retailers violated antitrust law by engaging in anticompetitive practices to prevent discounting of department store cosmetics.
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6. In re ATM Antitrust Litigation, No. C-04-2676 (N.D. Cal.). Lieff Cabraser represents a putative class of ATM users against a number of banks comprising the Star ATM Network, alleging that those banks conspired to fix the price of ATM interchange fees, thereby unlawfully inflating fees paid by ATM users in the network.
7. In re Static Random Access Memory (SRAM) Antitrust Litigation, MDL No. 1819 (N.D. Cal.). Lieff Cabraser serves as one of four members of the Steering Committee for indirect purchasers of SRAM, which is used for a variety of applications, including on the motherboards of computers, as well as in cellular telephones, other handheld devices, and game consoles. In the nationwide class action, the plaintiffs allege that defendant manufacturers of SRAM conspired in restraint of trade to artificially raise, fix, maintain, and stabilize prices for SRAM, allocate markets for SRAM, and allocate production of SRAM.
8. In re Flash Memory Antitrust Litigation, MDL No. 1852. Lieff Cabraser is class counsel for purchasers of flash memory, which is commonly used in a variety of applications, including circuit boards, memory cards, digital cameras, USB storage devices, portable music players, mobile wireless technology, game consoles and personal computers. Plaintiffs allege that they have been deprived of free and open competition, and that prices for flash memory sold by defendants have been fixed, raised, maintained and stabilized at artificially high levels throughout the United States.
9. In re Publication Paper Antitrust Litigation, MDL No. 1631 (D. Conn.). Lieff Cabraser serve as class counsel in this nationwide antitrust class action on behalf of printing companies. Plaintiffs allege that the defendants, who are among the world’s largest paper manufacturers, conspired illegally to fix the price of publication paper that is used to print magazines.
10. Spectrum Stores, Inc., et al. v. Citgo Petroleum Corp., H-06-3569 (S.D. Tex.). Lieff Cabraser serves as class counsel on behalf of direct purchasers of gasoline and other oil-based products from Citgo. The plaintiffs allege antitrust damages for Citgo’s participation in OPEC’s oil cartel.
11. In re High Pressure Laminates Antitrust Litigation, MDL No. 1368 (S.D.N.Y.). Lieff Cabraser served as Trial Counsel on behalf of a class of direct purchasers of high pressure laminates. The case in 2006 was tried to a jury verdict. The case settled for over $40 million.
12. In re Buspirone Antitrust Litigation, MDL No. 1413 (S.D.N.Y.). In November 2003, Lieff Cabraser obtained a $90 million cash settlement for individual consumers, consumer organizations, and third party payors that purchased BuSpar, a drug prescribed to alleviate symptoms of anxiety.
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Plaintiffs alleged that Bristol-Myers Squibb Co. (BMS), Danbury Pharmacal, Inc., Watson Pharmaceuticals, Inc. and Watson Pharma, Inc. entered into an unlawful agreement in restraint of trade under which BMS paid a potential generic manufacturer of BuSpar to drop its challenge to BMS’ patent and refrain from entering the market. Lieff Cabraser served as Plaintiffs’ Co-Lead Counsel.
13. In re Lupron Marketing and Sales Practices Litigation, MDL No. 1430 (D. Mass.). In May 2005, the Court granted final approval to a settlement of a class action lawsuit by patients, insurance companies and health and welfare benefit plans that paid for Lupron, a prescription drug used to treat prostate cancer, endometriosis and precocious puberty. The settlement requires the defendants, Abbott Laboratories, Takeda Pharmaceutical Company Limited, and TAP Pharmaceuticals, to pay $150 million, inclusive of costs and fees, to persons or entities who paid for Lupron from January 1, 1985 through March 31, 2005. Plaintiffs charged that the defendants conspired to overstate the drug’s average wholesale price (“AWP”), which resulted in plaintiffs paying more for Lupron than they should have paid. Lieff Cabraser served as Co-Lead Plaintiffs’ Counsel.
14. California Vitamin Cases, J.C.C.P. No. 4076 (Cal. Supr. Ct.). Lieff Cabraser served as Co-Liaison Counsel and Co-Chairman of the Plaintiffs’ Executive Committee on behalf of a class of California indirect vitamin purchasers in every level of the chain of distribution. In January 2002, the Court granted final approval of a $96 million settlement with certain vitamin manufacturers in a class action alleging that these and other manufacturers engaged in price fixing of particular vitamins. In December 2006, the Court granted final approval to over $8.8 million in additional settlements.
15. Ciprofloxacin Federal and State Antitrust Litigation, MDL No. 1383 (E.D.N.Y.). Lieff Cabraser serves as Co-Lead Counsel for consumers who purchased Cipro, the top selling antibiotic in the world. Plaintiffs allege that Bayer Corporation, Barr Laboratories, two other generic drug companies, and other defendants entered into an unlawful agreement to keep a generic version of the drug off the market that allowed Bayer to sell Cipro at inflated prices. Lieff Cabraser also represents purchasers of Cipro in a class action lawsuit filed in California state court. In July 2004, the California Court of Appeal upheld the trial court’s grant of class certification of an antitrust and unfair competition action against defendants.
16. Pharmaceutical Cases I, II, and III, J.C.C.P. Nos. 2969, 2971 & 2972 (Cal. Supr. Ct.). Lieff Cabraser served as Co-Lead and Co-Liaison Counsel representing a certified class of indirect purchasers (consumers) on claims against the major pharmaceutical manufacturers for violations of the Cartwright Act and the Unfair Competition Act. The class alleged
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that defendants unlawfully fixed discriminatory prices on prescription drugs to retail pharmacists in comparison with the prices charged to certain favored purchasers, including HMOs and mail order houses. In April 1999, the Court approved a settlement providing $148 million in free, brand-name prescription drugs to health agencies that serve California’s poor and uninsured. In October 2001, the Court approved a settlement with the remaining defendants in the case, which provided an additional $23 million in free, brand-name prescription drugs to these agencies.
17. Coalition for Elders’ Independence, Inc. v. Biovail Corporation, No. CV023320 (Cal. Supr. Ct.). Lieff Cabraser serves as Co-Lead Counsel for class of consumers who purchased the drug Adalat, also known as Nifedipine. Plaintiffs allege that two generic manufacturers of Adalat entered into an agreement to allocate the dosages markets for generic Adalat, thereby substantially reducing competition and unlawfully inflating prices on both generic and brand-name Adalat, in violation of state antitrust laws.
18. In re Electrical Carbon Products Antitrust Litigation, MDL No. 1514 (D.N.J.). Lieff Cabraser represents the City and County of San Francisco and a class of direct purchasers of carbon brushes and carbon collectors on claims that producers fixed the price of carbon brushes and carbon collectors in violation of the Sherman Act.
19. Electrical Carbon Products Cases, J.C.C.P. No. 4294 (San Francisco Supr. Court). Lieff Cabraser represents the City and County of San Francisco and a class of indirect purchasers of carbon brushes and carbon collectors on claims that producers fixed the price of carbon brushes and carbon collectors in violation of the Cartwright Act and the Unfair Competition Law. Lieff Cabraser also represents the People of the State of California in claims arising from the Unfair Competition Law.
20. In re Compact Disc Antitrust Litigation, MDL No. 1216 (C.D. Cal.). Lieff Cabraser served as Co-Lead Counsel for the direct purchasers of compact discs on claims that the producers fixed the price of CDs in violation of the federal antitrust laws.
21. In re Carpet Antitrust Litigation, MDL No. 1075 (N.D. Ga.). Lieff Cabraser served as Class Counsel and a member of the trial team for a class of direct purchasers of twenty-ounce level loop polypropylene carpet. Plaintiffs, distributors of polypropylene carpet, alleged that Defendants, seven manufacturers of polypropylene carpet, conspired to fix the prices of polypropylene carpet by agreeing to eliminate discounts and charge inflated prices on the carpet. In 2001, the Court approved a $50 million settlement of the case.
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22. In re Lasik/PRK Antitrust Litigation, No. CV 772894 (Cal. Supr. Ct.). Lieff Cabraser served as a member of Plaintiffs’ Executive Committee in class actions brought on behalf of persons who underwent Lasik/PRK eye surgery. Plaintiffs alleged that defendants, the manufacturers of the laser system used for the laser vision correction surgery, manipulated fees charged to ophthalmologists and others who performed the surgery, and that the overcharges were passed onto consumers who paid for laser vision correction surgery. In December 2001, the Court approved a $12.5 million settlement of the litigation.
23. In re Toys ‘R’ Us Antitrust Litigation, MDL No. 1211 (E.D.N.Y.). Lieff Cabraser served as Co-Lead Counsel representing a class of direct purchasers (consumers) who alleged that Toys ‘R’ Us conspired with the major toy manufacturers to boycott certain discount retailers in order to restrict competition and inflate toy prices. In February 2000, the Court approved a settlement of cash and product of over $56 million.
24. In re Travel Agency Commission Antitrust Litigation, MDL No. 1058 (D. Minn.). Lieff Cabraser served as Co-Lead Counsel for a certified class of U.S. travel agents on claims against the major U.S. air carriers, who allegedly violated the federal antitrust laws by fixing the commissions paid to travel agents. In 1997, the Court approved an $82 million settlement.
25. Sanitary Paper Cases I & II, J.C.C.P. Nos. 4019 & 4027 (Cal. Supr. Ct.). Lieff Cabraser served as Liaison Counsel on behalf of indirect purchasers of commercial paper products. Plaintiffs alleged that from 1993 to 2000 Defendants fixed the price of commercial tissue, toilet paper, toilet seat covers, and other commercial paper products in violation of the Cartwright Act and Unfair Competition Act. In February 2001, the Court approved a $3 million settlement of the case.
26. Schwartz v. National Football League, No. 97-CV-5184 (E.D. Pa.). Lieff Cabraser served as counsel for individuals who purchased the “NFL Sunday Ticket” package of private satellite transmissions in litigation against the National Football League for allegedly violating the Sherman Act by limiting the distribution of television broadcasts of NFL games by satellite transmission to one package. In August 2001, the Court approved of a class action settlement that included: (1) the requirement that defendants provide an additional weekly satellite television package known as Single Sunday Ticket for the 2001 NFL football season, under certain circumstances for one more season, and at the defendants’ discretion thereafter; (2) a $7.5 million settlement fund to be distributed to class members; (3) merchandise coupons entitling class members to discounts at the NFL’s Internet store which the parties value at approximately $3 million; and (4) $2.3 million to pay for administering the settlement fund and notifying class members.
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27. In re Commercial Explosives Antitrust Litigation, MDL No. 1093 (D. Utah). Lieff Cabraser served as Class Counsel on behalf of direct purchasers of explosives used in mining operations. In 1998, the Court approved a $77 million settlement of the litigation.
28. In re California Indirect-Purchaser X-Ray Antitrust Litigation, No. 960886 (Cal. Supr. Ct.). Lieff Cabraser served as Class Counsel on behalf of indirect purchasers (consumers) of medical x-ray film who alleged violations of the Cartwright and Unfair Competition Acts. In 1998, the Court approved a $3.75 million settlement of the litigation.
29. In re Brand Name Prescription Drugs, MDL No. 997 (N.D. Ill.). Lieff Cabraser served as Class Counsel for a class of tens of thousands of retail pharmacies against the leading pharmaceutical manufacturers and wholesalers of brand name prescription drugs for alleged price-fixing from 1989 to 1995 in violation of the federal antitrust laws. Class Plaintiffs charged that defendants engaged in price discrimination against retail pharmacies by denying them discounts provided to hospitals, health maintenance organizations, and nursing homes. In 1996 and 1998, the Court approved settlements with certain manufacturers totaling $723 million.
30. In re K-Dur Prescription Drug Antitrust Litigation, MDL No. 1419. Lieff Cabraser serves as Class Counsel on behalf of indirect purchasers of K-Dur, a potassium supplement often prescribed in conjunction with high blood pressure medication. K-Dur is the fourth most frequently prescribed drug to seniors. The complaint alleges the defendants illegally agreed not to compete in the sale of K-Dur which prevented any generic version of K-Dur from coming onto the market.
31. In re Flat Glass Antitrust Litigation, MDL 1200 (W.D. Pa.). Lieff Cabraser served as Class Counsel on behalf of a class of direct purchasers of flat glass.
32. In re Linerboard Antitrust Litigation, MDL 1261 (E.D. Pa.). Lieff Cabraser served as Class Counsel on behalf of a class of direct purchasers of linerboard. The court recently approved a settlement totaling $202 million.
33. Carbon Fiber Cases I, II, III, J.C.C.P. Nos. 4212, 4216 & 4222 (Cal. Supr. Ct.). Lieff Cabraser served as Co-Liaison Counsel on behalf of indirect purchasers of carbon fiber. Plaintiffs alleged that defendants illegally conspired to raise prices of carbon fiber. Settlements have been reached with all of the defendants.
34. Methionine Cases I and II, J.C.C.P. Nos. 4090 & 4096 (Cal. Supr. Ct.). Lieff Cabraser served as Co-Lead Counsel on behalf of indirect purchasers
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of methionine, an amino acid used primarily as a poultry and swine feed additive to enhance growth and production. Plaintiffs alleged that the companies illegally conspired to raise methionine prices to supercompetitive levels. The case settled.
35. McIntosh v. Monsanto, No. 4:01CV65RSW (E.D. Mo.). Lieff Cabraser served as Co-Lead Counsel in a class action lawsuit against Monsanto Company and others alleging that a conspiracy to fix prices on genetically modified Roundup Ready soybean seeds and Yieldgard corn seeds. The case settled.
36. Tortola Restaurants, L.P. v. Minnesota Mining and Manufacturing, No. 314281 (Cal. Supr. Ct). Lieff Cabraser served as Co-Lead Counsel on behalf of indirect purchasers of Scotch-brand invisible and transparent tape. Plaintiffs alleged that defendant 3M conspired with certain retailers to monopolize the sale of Scotch-brand tape in California. This case has been resolved as part of a nationwide settlement that Lieff Cabraser negotiated, along with co-counsel.
F. Non-Personal Injury Defective Products
1. Richison v. American Cemwood Corp., No. 005532 (San Joaquin Supr. Ct., Cal.). Lieff Cabraser served as Co-lead Class Counsel for an estimated nationwide class of 30,000 owners of homes and other structures on which defective Cemwood Shakes were installed. In November 2003, the Court granted final approval to a $75 million Phase 2 settlement in the American Cemwood roofing shakes national class action litigation. This amount was in addition to a $65 million partial settlement approved by the Court in May 2000, and brought the litigation to a conclusion. The claims period runs through 2015.
2. Williams v. Weyerhaeuser, No. 995787 (San Francisco Supr. Ct.). Lieff Cabraser served as Class Counsel on behalf of a nationwide class of hundreds of thousands or millions of owners of homes and other structures with defective Weyerhaeuser hardboard siding. A California-wide class was certified for all purposes in February 1999, and withstood writ review by both the California Court of Appeal and Supreme Court of California. In 2000, the Court granted final approval to a nationwide settlement of the case which provides class members with compensation for their damaged siding, based on the cost of replacing or, in some instances, repairing, damaged siding. The settlement has no cap, and requires Weyerhaeuser to pay all timely, qualified claims over a nine year period. The claims program is underway and paying claims.
3. Foothill/DeAnza Community College District v. Northwest Pipe Company, No. C-00-20749 (N.D. Cal.). In June 2004, the court approved the creation of a settlement fund of up to $14.5 million for property

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owners nationwide with Poz-Lok fire sprinkler piping that fails. Since 1990, Poz-Lok pipes and pipe fittings were sold in the U.S. as part of fire suppression systems for use in residential and commercial buildings. After leaks in Poz-Lok pipes caused damage to its DeAnza Campus Center building, Foothill/DeAnza Community College District in California retained Lieff Cabraser to file a class action lawsuit against the manufacturers of Poz-Lok. The college district charged that Poz-Lok pipe had manufacturing and design defects that resulted in the premature corrosion and failure of the product. Under the settlement, owners whose Poz-Lok pipes are leaking today, or over the next 15 years, may file a claim for compensation.
4. Toshiba Laptop Screen Flicker Settlement. Lieff Cabraser negotiated a settlement with Toshiba America Information Systems, Inc. (“TAIS”) to provide relief for owners of certain Toshiba Satellite 1800 Series, Satellite Pro 4600 and Tecra 8100 personal notebook computers whose screens flickered, dimmed or went blank due to an issue with the FL Inverter Board component. Under the terms of the Settlement, owners of affected computers who paid to have the FL Inverter issue repaired by either TAIS or an authorized TAIS service provider recovered the cost of that repair, up to $300 for the Satellite 1800 Series and the Satellite Pro 4600 personal computers, or $400 for the Tecra 8100 personal computers. TAIS also agreed to extend the affected computers’ warranties for the FL Inverter issue by 18 months.
5. ABS Pipe Litigation, JCCP No. 3126 (Contra Costa County Supr. Ct., Cal.). Lieff Cabraser served as Lead Class Counsel on behalf of property owners whose ABS plumbing pipe was allegedly defective and caused property damage by leaking. Six separate class actions were filed in California against five different ABS pipe manufacturers, numerous developers of homes containing the ABS pipe, as well as the resin supplier and the entity charged with ensuring the integrity of the product. Between 1998 and 2001, we achieved 12 separate settlements in the class actions and related individual lawsuits for approximately $78 million.
Commenting on the work of Lieff Cabraser and co-counsel in the case, California Superior Court (now appellate) Judge Mark B. Simons stated on May 14, 1998: “The attorneys who were involved in the resolution of the case certainly entered the case with impressive reputations and did nothing in the course of their work on this case to diminish these reputations, but underlined, in my opinion, how well deserved those reputations are.”
6. McManus, et al. v. Fleetwood Enterprises, Inc., No. SA-99-CA-464-FB (W.D. Tex.). Lieff Cabraser served as Class Counsel on behalf of original owners of 1994-2000 model year Fleetwood Class A and Class C motor homes. In 2003, the Court approved a settlement that resolved lawsuits
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pending in Texas and California about braking while towing with 1994 Fleetwood Class A and Class C motor homes. The lawsuits alleged that Fleetwood misrepresented the towing capabilities of new motor homes it sold, and claimed that Fleetwood should have told buyers that a supplemental braking system is needed to stop safely while towing heavy items, such as a vehicle or trailer. The settlement paid $250 to people who bought a supplemental braking system for Fleetwood motor homes that they bought new.
7. Cox v. Shell, No. 18,844 (Obion County Chancery Ct., Tenn.). Lieff Cabraser served as Class Counsel on behalf of a nationwide class of approximately 6 million owners of property equipped with defective polybutylene plumbing systems and yard service lines. In November 1995, the Court approved a settlement involving an initial commitment by Defendants of $950 million in compensation for past and future expenses incurred as a result of pipe leaks, and to provide replacement pipes to eligible claimants. The settlement claims program will continue past 2010, under the continuing supervision of the trial court.
8. Naef v. Masonite, No. CV-94-4033 (Mobile County Circuit Ct., Ala.). Lieff Cabraser Heimann & Bernstein served as Class Counsel on behalf of a nationwide Class of an estimated 4 million homeowners with allegedly defective hardboard siding manufactured and sold by Masonite Corporation, a subsidiary of International Paper, on their homes. The Class was certified in November 1995, and the Alabama Supreme Court twice denied extraordinary writs seeking to decertify the Class, including in Ex Parte Masonite, 681 So. 2d 1068 (Ala. 1996). A month-long jury trial in 1996 established the factual predicate that Masonite hardboard siding was defective under the laws of most states. The case settled on the eve of a second Class-wide trial, and in January 1998, the Court approved a Class Settlement. Under the Settlement, Class members with failing Masonite hardboard siding installed and incorporated in their property between January 1, 1980 and January 15, 1998 can make claims through 2008 and have their homes evaluated by independent inspectors. Class members with qualifying damage to their siding recover damages associated with the siding. To date, the Settlement has paid out over $750 million to homeowners across the country, and claims continue to be made and paid.
9. Lundell v. Dell, No. C05-03970 (N.D. Cal.). Lieff Cabraser served as Lead Class Counsel for consumers who experienced power problems with the Dell Inspiron 5150 notebook. In December 2006, the Court granted final approval to a settlement of the class action which extended the oneyear limited warranty on the notebook for a set of repairs related to the power system. In addition, class members that paid Dell or a third party for repair of the power system of their notebook were entitled to a 100% cash refund from Dell.
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10. Kan v. Toshiba American Information Systems, No. BC327273 (Los Angeles Super. Ct.). Lieff Cabraser served as Co-Lead Counsel for a class of all end-user persons or entities who purchased or otherwise acquired in the United States, for their own use and not for resale, a new Toshiba Satellite Pro 6100 Series notebook. Consumers alleged a series of defects were present in the notebook. In 2006, the Court approved a settlement that extended the warranty for all Satellite Pro 6100 notebooks, provided cash compensation for certain repairs, and reimbursed class members for certain out-of-warranty repair expenses.
11. In re Louisiana-Pacific Inner-Seal Siding Litigation, No. C-95-879-JO (D. Or.). Lieff Cabraser served as Co-Lead Class Counsel on behalf of a nationwide class of homeowners with defective exterior siding on their homes. Plaintiffs asserted claims for breach of warranty, fraud, negligence, and violation of consumer protection statutes. On April 26, 1996, U.S. District Judge Robert E. Jones entered an Order, Final Judgment and Decree granting final approval to a nationwide settlement requiring Louisiana-Pacific to provide funding up to $475 million to pay for inspection of homes and repair and replacement of failing siding over the next seven years.
12. In re Intel Pentium Processor Litigation, No. CV 745729 (Santa Clara Supr. Ct., Cal.). Lieff Cabraser served as one of two court appointed Co-Lead Class Counsel, and negotiated a settlement, approved by the Court in June 1995, involving both injunctive relief and damages having an economic value of approximately $1 billion. The chip replacement program has been implemented, and is ongoing.
13. Gross v. Mobil, No. C 95-1237-SI (N.D. Cal.). Lieff Cabraser served as Plaintiffs’ Class Counsel in this nationwide action involving an estimated 2,500 aircraft engine owners whose engines were affected by Mobil AV-1, an aircraft engine oil. Plaintiffs alleged claims for strict liability, negligence, misrepresentation, violation of consumer protection statutes, and for injunctive relief. Plaintiffs obtained a preliminary injunction requiring Defendant Mobil Corporation to provide notice to all potential class members of the risks associated with past use of Defendants’ aircraft engine oil. In addition, Plaintiffs negotiated a proposed Settlement, granted final approval by the Court in November 1995, valued at over $12.5 million, under which all Class Members were eligible to participate in an engine inspection and repair program, and receive compensation for past repairs and for the loss of use of their aircraft associated with damage caused by Mobil AV-1.
14. In re General Motors Corp. Pick-Up Fuel Tank Products Liability Litigation, MDL No. 961. Lieff Cabraser served as court-appointed CoLead Counsel representing a class of 4.7 million plaintiffs who owned 1973-1987 GM C/K pickup trucks with allegedly defective gas tanks. The
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Consolidated Complaint asserted claims under the Lanham Act, the Magnuson-Moss Act, state consumer protection statutes, and common law. In 1995, the Third Circuit vacated the District Court settlement approval order and remanded the matter to the District Court for further proceedings. In July 1996, a new nationwide class action was certified for purposes of an enhanced settlement program valued at a minimum of $600 million, plus funding for independent fuel system safety research projects. Final approval was granted in November 1996.
15. Hanlon v. Chrysler Corp., No. C-95-2010-CAL (N.D. Cal.). In 1995, the district court approved a $200+ million settlement enforcing Chrysler’s comprehensive minivan rear latch replacement program, and to correct alleged safety problems with Chrysler’s pre-1995 designs. As part of the settlement, Chrysler agreed to replace the rear latches with redesigned latches. The settlement was affirmed on appeal by the Ninth Circuit in Hanlon v. Chrysler Corp., 150 F.3d 1011 (1998).
G. Environmental and Toxic Exposures
1. In re Unocal Refinery Litigation, No. C 94-04141 (Cal. Supr. Ct.). Lieff Cabraser served as one of two Co-Lead Class Counsel and on the Plaintiffs’ Steering Committee in this action against Union Oil Company of California (“Unocal”) arising from a series of toxic releases from Unocal’s San Francisco refinery in Rodeo, California. The action was settled in 1997 on behalf of approximately 10,000 individuals for $80 million.
2. Kentucky Coal Sludge Litigation. On October 11, 2000, near Inez, Kentucky, a coal waste storage facility ruptured, spilling 300 million gallons of coal sludge (a wet mixture produced by the treatment and cleaning of coal) into waterways in the region and contaminating hundreds of properties. This was one of the worst environmental disasters in the Southeastern United States. With co-counsel, Lieff Cabraser represented over 400 clients in property damage claims, including claims for diminution in the value of their homes and properties. In April 2003, the parties reached a confidential settlement agreement on favorable terms to the plaintiffs.
3. Toms River Childhood Cancer Incidents. With co-counsel, Lieff Cabraser represented 69 families in Toms River, New Jersey, each with a child having cancer, that claimed the cancers were caused by environmental contamination in the Toms River area. Commencing in 1998, the parties – the 69 families, Ciba Specialty Chemicals, Union Carbide and United Water Resources, Inc., a water distributor in the area – participated in an unique alternative dispute resolution process, which lead to a fair and efficient consideration of the factual and scientific issues in

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the matter. In December 2001, under the supervision of a mediator, a confidential settlement favorable to the families was reached.
4. In re Exxon Valdez Oil Spill Litigation (District of Alaska/Alaska Supr. Ct.). The Exxon Valdez ran aground in March of 1989, spilling 11 million gallons of oil into Prince William Sound. Lieff Cabraser served as one of the court-appointed Plaintiffs’ Class Counsel. The class consisted of 32,000 fisherman, Alaska natives, landowners and others whose livelihoods were gravely affected by the disaster. In addition, Lieff served on the Class Trial Team in 1994. A class action jury trial was held in federal court in 1994. That jury awarded $5 billion in punitive damages to the plaintiff class. The punitive damages award has been on repeated appeal by the Exxon Corporation ever since. In 2001, the Ninth Circuit Court of Appeals ruled that the original $5 billion punitive damages verdict was excessive. In 2002, U.S. District Court Judge H. Russell Holland reinstated the award at $4 billion. Judge Holland stated that, “Exxon officials knew that carrying huge volumes of crude oil through Prince William sound was a dangerous business, yet they knowingly permitted a relapsed alcoholic to direct the operation of the Exxon Valdez through Prince William Sound.” In 2003, the Ninth Circuit again directed Judge Holland to reconsider the punitive damages award under United States Supreme Court punitive damages guidelines. In January 2004, Judge Holland issued his order finding that Supreme Court authority did not change the Court’s earlier analysis. In December 2006, the Ninth Circuit Court of Appeals issued its ruling, setting the punitive damages award at $2.5 billion. The case remains on appeal.
5. West v. G&H Seed Co., Aventis CropSciences USA, LLP, et al., No. 99C-4984-A (La. State Ct). With co-counsel, Lieff Cabraser represented a class of 1,500 Louisiana crawfish farmers. The farmers sued Bayer CropScience LP claiming the pesticide ICON killed their crawfish and caused economic ruin. In 2004, the Court granted approved a $45 million settlement. The settlement was reached after the parties had presented nearly a month’s worth of evidence at trial, and were on the verge of making closing arguments to the jury.
6. Craft v. Vanderbilt University, Civ. No. 3-94-0090 (M.D. Tenn.). Lieff Cabraser served as Lead Counsel of a certified class of over 800 pregnant women and their children who were intentionally fed radioactive iron without their consent while receiving prenatal care at defendant Vanderbilt’s hospital in the 1940’s. The facts surrounding the administration of radioactive iron to the pregnant women and their children in utero came to light as a result of Energy Secretary Hazel O’Leary’s 1993 disclosures of government sponsored human radiation experimentation during the Cold War. Defendants’ attempts to dismiss the claims and decertify the class were unsuccessful. The case was settled
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in July 1998 for a total of $10.3 million and a formal apology from Vanderbilt.
7. In re GCC Richmond Works Cases, J.C.C.P. No. 2906. Lieff Cabraser served as Co-Liaison Counsel and Lead Class Counsel in coordinated litigation arising out of the release of a massive toxic sulfuric acid cloud which injured an estimated 50,000 residents of Richmond, California on July 26, 1993. The Coordination Trial Court granted final approval to a $180 million class settlement for exposed residents.
8. In re Sacramento River Spill Cases I and II, J.C.C.P. Nos. 2617 & 2620 (Cal. Supr. Ct.). Lieff Cabraser served as Court-appointed Plaintiffs’ Liaison Counsel, Lead Class Counsel, and chaired the Plaintiffs’ Litigation Committee in an action arising out of a July 14, 1991 Southern Pacific train derailment and toxic spill near Dunsmuir, California. Settlement proceeds of approximately $16 million were distributed pursuant to Court approval of a plan of allocation to four certified plaintiff classes: personal injury, business loss, property damage/diminution, and evacuation.
H. Aviation Law
1. In re Air Crash near Athens, Greece on August 14, 2005, MDL No. 1773. On August 14, 2005, a Boeing 737 operating as Helios Airways flight 522 crashed north of Athens, Greece, resulting in the deaths of all passengers and crew. The aircraft was heading from Larnaca, Cyprus to Athens International Airport when ground controllers lost contact with the pilots, who had radioed in to report problems with the air conditioning system. Press reports about the official investigation indicate that a single switch for the pressurization system on the plane was not properly set by the pilots, and eventually both were rendered unconscious, along with most of the passengers and cabin crew. Lieff Cabraser represents the families of several victims, and filed complaints alleging that a series of design defects in the Boeing 737-300 contributed to the pilots’ failure to understand the nature of the problems they were facing. Foremost among those defects was a confusing pressurization warning “horn” which uses the same sound that alerts pilots to improper takeoff and landing configurations. The Judicial Panel on Multidistrict Litigation granted Lieff Cabraser’s motion to consolidate all Helios cases before the U.S. District Court for the Northern District of Illinois in Chicago, where the headquarters of The Boeing Company are located and where Lieff Cabraser filed its clients’ cases.
2. Barbosa Garcia et al. v. Excelaire Service, Inc., and Honeywell International, Inc., No. CV 06-5964 (E.D. N.Y.). Lieff Cabraser, with co-counsel, represents over twenty families whose loved ones died in the Gol Airlines Flight 1907 crash. On September 29, 2006, a brand-new

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Boeing 737-800 operated by Brazilian air carrier Gol plunged into the Amazon jungle after colliding with a smaller plane owned by the American company Excelaire Service, Inc. None of the 149 passengers and six crew members on board the Gol flight survived the accident. The complaint charges that the pilots of the ExcelAire jet were flying at an incorrect altitude at the time of the collision, failed to operate the jet’s transponder and radio equipment properly, and failed to maintain communication with Brazilian air traffic control in violation of international civil aviation standards. If the pilots of the ExcelAire aircraft had followed these standards, plaintiffs charge that the collision would not have occurred. At the time of the collision, the ExcelAire aircraft’s transponder manufactured by Honeywell was not functioning. A transponder transmits a plane’s altitude and operates its automatic anticollision system. The complaint charges that Honeywell shares responsibility for the tragedy because it defectively designed the transponder on the ExcelAire jet, and failed to warn of dangers resulting from foreseeable uses of the transponder.
3. In re Air Crash at Lexington, Kentucky, August 27, 2006, No. 07 CV 006 (E.D. Ky.). A Bombardier CRJ-100 commuter plane operated by Comair, Inc., a subsidiary of Delta Air Lines, crashed on August 27, 2006 shortly after takeoff at Blue Grass Airport in Lexington, Kentucky, killing 47 passengers and two crew members. The aircraft attempted to take off from the wrong runway. Lieff Cabraser and co-counsel represent families of passengers who died on the flight.
4. Crash of West Caribbean Airways Flight 708. On August 16, 2005, a McDonnell Douglas MD-82 operated by West Caribbean Airways lost engine power and crashed near La Cucharita, Venezuela, during a flight from Panama City to Fort de France, Martinique. Martinique is a province of France. A large number of the victims’ families retained French attorneys to represent them. In light of Lieff Cabraser’s work on the Flash Air case (see below), those French attorneys asked Lieff Cabraser to advise them on the substance of U.S. laws which may be applicable to a claim against The Boeing Company (successor to McDonnell Douglas) or Pratty & Whitney, the manufacturer of the aircraft’s engines. Lieff Cabraser now serves in that advisory capacity.
5. Crash of Manhattan Tourist Helicopter. On June 14, 2005 a Bell 206 helicopter operated by Helicopter Flight Services, Inc. fell into the East River shortly after taking off for a tourist flight over New York City. The pilot and six passengers were immersed upside-down in the water as the helicopter overturned. Lieff Cabraser represents a passenger on the helicopter.
6. Crash of “Legend” Aircraft in Tucson, AZ. On November 19, 2005, a single engine “Turbine Legend” kit plane operated by its owner crashed
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shortly after takeoff from a private airstrip in Tucson, Arizona, killing both the owner/pilot and a passenger. Lieff Cabraser represents the widow of the passenger. Witnesses report that the aircraft left the narrow runway during the takeoff roll and although the pilot managed to get the plane airborne, it rolled to the left and crashed. Lieff Cabraser is investigating the liability of the pilot and others, including the manufacturer of the kit and the operator of the airport from which the plane took off. The runway was 16 feet narrower than the minimum width recommended by the Federal Aviation Administration.
7. Crash of Air Algerie Boeing 737. Together with French co-counsel, Lieff Cabraser represents the families of several passengers who died in the March 6, 2003 crash of a Boeing 737 airplane operated by Air Algerie. The aircraft crashed soon after takeoff from the Algerian city of Tamanrasset, after one of the engines failed. All but one of the 97 passengers were killed, along with six crew members.
8. Crash of Flash Air Boeing 737. On January 3, 2004, all 148 passengers and crew were killed when a Flash Airlines Boeing 737 plunged into the Red Sea off the coast of Egypt, after the pilots encountered a malfunction in the flight control system. Most of the passengers were from France and were vacationing at the seaside resort of Sharm el Sheikh. After the families retained French attorneys to represent them, those French attorneys conducted several rounds of interviews of U.S. law firms with the intention of engaging one of those firms to file an action in the United States against Boeing, which manufactured the aircraft in the United States. Lieff Cabraser was selected to be that firm, and filed complaints in federal court in Los Angeles on behalf of the families of more than 120 victims. Although the U.S. District Court ruled that the case could be more conveniently tried in France, the plaintiffs have contested the jurisdiction of the French court over the case against Boeing. If the French courts rule against jurisdiction, the case in the United States will be reactivated. Otherwise, Lieff Cabraser will act as consultants to the French attorneys on technical issues and questions of U.S. law.
9. Tower Collision of U.S. Army Blackhawk Helicopter. Lieff Cabraser represents the family of a pilot who died in the November 29, 2004 crash of a U.S. Army Black Hawk Helicopter. The Black Hawk was flying during the early morning hours at an altitude of approximately 500 feet when it hit cables supporting a 1,700 foot-tall television tower, and subsequently crashed 30 miles south of Waco, Texas, killing both pilots and five passengers, all in active Army service. The tower warning lights required by FCC regulations were inoperative, and the aviation and weather experts retained by Lieff Cabraser will testify that had the lights been operating as they should have, the helicopter’s pilots would have been warned away from the tower before they hit the cable. LCHB will be filing an action shortly.
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10. Crash of China Eastern Airlines Bombardier CRJ200. Lieff Cabraser represents families of over 30 passengers who died in the November 21, 2004, crash of China Yunnan Airlines Flight 5210. The plane, a Bombardier CRJ-200 built in Canada with engines from a General Electric plant in Massachusetts, was headed for Shanghai with 47 passengers and six crew members when it crashed into a lake, seconds after taking off from Baotou, Inner Mongolia. The lawsuit filed by Lieff Cabraser in the Los Angeles Superior Court alleges that the crash was the result of a combination of pilot error and defects in the aircraft and its engines. The defendants’ attempt to transfer the case to the federal court failed when Lieff Cabraser’s motion to remand was granted by that court. The case is now pending in the Los Angeles Superior Court.
11. Crash of Macedonian Presidential Aircraft. Lieff Cabraser represents the families of 8 victims of the February 26, 2004 crash of a Beech King Air 200 in Bosnia-Herzegovina. The crash killed the President of Macedonia, Boris Trajkovski, and a number of his advisors and cabinet members.
12. Crash of Mandala Airlines Flight 91. On September 5, 2005, a Boeing 737 operating as Mandala Flight 091 crashed immediately after takeoff form the airport in Medan, Indonesia, killing 101 of the 117 people on board, as well as 44 people on the ground. Lieff Cabraser represents a number of injured persons and families of deceased victims.
13. Aeroflot-Russian International Airlines Airbus Disaster. Lieff Cabraser represented the families of passengers who were on Aeroflot-Russian International Airlines Flight SU593 that crashed in Siberia on March 23, 1994. The plane was in route from Moscow to Hong Kong. All passengers on board died. According to a transcript of the cockpit voice recorder, the pilot’s two children entered the cockpit during the flight and took turns flying the plane. The autopilot apparently was inadvertently turned off during this time, and the pilot was unable to remove his son from the captain’s seat in time to avert the plane’s fatal dive. Lieff Cabraser, alongside French co-counsel, filed suit in France, where Airbus, the plane’s manufacturer, was headquartered. All the families Lieff Cabraser represented obtained substantial economic recoveries in settlement of the action.
14. United Airlines Boeing 747 Disaster, MDL No. 807 (N.D. Cal.). Lieff Cabraser served as Plaintiffs’ Liaison Counsel on behalf of the passengers and families of passengers injured and killed in the United Airlines Boeing 747 cargo door catastrophe near Honolulu, Hawaii on February 24, 1989. Lieff Cabraser organized the litigation of the case, which included claims brought against United Airlines and The Boeing Company. Among our work, we developed a statistical system for settling the passengers’ and families’ damages claims with certain defendants, and coordinated the
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prosecution of successful individual damages trials for wrongful death against the non-settling defendants.
15. German Air Force Lockheed F-104 Star Fighter Litigation: In the late 1960s and extending into the early 1970s, the United States sold F-104 Star Fighter jets to the German Air Force that were manufactured by Lockheed Aircraft Corporation in California. Although the F-104 Star Fighter was designed for high-altitude fighter combat, it was used in Germany and other European countries for low-level bombing and attack training missions. Consequently, the aircraft had an extremely high crash rate, with over 300 pilots killed. Commencing in 1971, the law firm of Belli Ashe Ellison Choulos & Lieff filed hundreds of lawsuits for wrongful death and other claims on behalf of the widows and surviving children of the pilots. Robert Lieff continued to prosecute the cases after the formation of our firm. In 1974, the lawsuits were settled with Lockheed on terms favorable to the plaintiffs. This litigation helped establish the principle that citizens of foreign countries could assert claims in United States courts, and obtain substantial recoveries, against an American manufacturer based upon airplane accidents or crashes occurring outside of the United States.
I. International and Human Rights Litigation
1. Holocaust Cases. Lieff Cabraser is one of the leading firms that prosecuted claims by Holocaust survivors and the heirs of Holocaust survivors and victims against banks and private manufacturers and other corporations who enslaved and/or looted the assets of Jews and other minority groups persecuted by the Nazi Regime during the Second World War era. We serve as Settlement Class Counsel in the case against the Swiss banks that the Court approved a U.S. $1.25 billion settlement in July 2000. Lieff Cabraser donated its attorneys’ fees in the Swiss Banks case, in the amount of $1.5 million, to endow a Human Rights clinical chair at Columbia University Law School. We were also active in slave labor and property litigation against German and Austrian defendants, and Nazi-era banking litigation against French banks. In connection therewith, Lieff Cabraser participated in multi-national negotiations that led to Executive Agreements establishing an additional approximately U.S. $5 billion in funds for survivors and victims of Nazi persecution. Our website provides links to the websites of settlement and claims administrators in these cases.
Commenting on the work of Lieff Cabraser and co-counsel in the litigation against private German corporations, entitled In re Holocaust Era German Industry, Bank & Insurance Litigation (MDL No. 1337), U.S. District Court Judge William G. Bassler stated on November 13, 2002:

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Up until this litigation, as far as I can tell, perhaps with some minor exceptions, the claims of slave and forced labor fell on deaf ears. You can say what you want to say about class actions and about attorneys, but the fact of the matter is, there was no attention to this very, very large group of people by Germany, or by German industry until these cases were filed. . . . What has been accomplished here with the efforts of the plaintiffs’ attorneys and defense counsel is quite incredible. . . I want to thank counsel for the assistance in bringing us to where we are today. Cases don’t get settled just by litigants. It can only be settled by competent, patient attorneys.
2. Cruz v. U.S., Estados Unidos Mexicanos, Wells Fargo Bank, et al., No. 01-0892-CRB (N.D. Cal.). In April 2001, Lieff Cabraser filed a class action on behalf of contract workers (known as “Braceros”) who came from Mexico to the United States pursuant to bilateral agreements from 1942 through 1949 to aid American farms and industries hurt by employee shortages. The agreements provided that ten percent of the Braceros’ wages would be withheld from them and transferred via United States and Mexican banks to savings accounts for each Bracero. Plaintiffs claim they were never reimbursed for the portion of their wages placed in the forced savings accounts. In June 2005, U.S. District Court Judge Charles Breyer denied motions to dismiss filed by Mexico and the Mexican banks charged with illegally withholding the savings funds from the Braceros in an extensive opinion, permitting the case to go forward against the Mexican defendants. The case is pending on appeal in the Ninth Circuit Court.
3. The Presbyterian Church of Sudan v. Talisman Energy and Republic of Sudan, No. 01 CV 9882 (S.D. N.Y.). With co-counsel, Lieff Cabraser represents the Presbyterian Church of Sudan and current and former residents of southern Sudan who allege that that they were victims of genocide, crimes against humanity and other violations of international law by Talisman Energy, Inc. (“Talisman”), the largest independent Canadian oil producer, and the Sudanese government. Plaintiffs charge that in the late 1990s through 2003, Talisman and Sudan participated in a joint military strategy of ethnic cleansing against non-Muslim in order to create a buffer zone for the exploitation of oil reserves in the Western Upper Nile region of the nation. In meetings with government officials, plaintiffs charge that Talisman mapped out areas it intended to explore, and the parties would then discuss how to “dispose of” the civilians living in those areas. Talisman allegedly was aware that the result of these decisions was to cause genocide and war crimes as government military forces destroyed villages and killed, maimed, raped and tortured civilians
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of ethnic and religious minority backgrounds. The case is presently on appeal.
4. Ali, et al. v. Rumsfeld, No. 05-C-1201 (N.D. Ill.) On March 1, 2005, Lieff Cabraser joined the ACLU and Human Rights First in representing seven individuals who claim that they were tortured by American military forces when they were held in U.S. Army detention facilities in Iraq and Afghanistan. Numerous Defense Department reports have found that torture was “widespread.” The suit alleges that Defense Secretary Donald Rumsfeld and high-ranking military commanders were responsible for authorizing torture or failing to stop torture after they learned of it. A former Rear Admiral and former Brigadier General also serve as cocounsel. The consolidated case is pending in the U.S. District Court in Washington, D.C.

FIRM BIOGRAPHY:
PARTNERS
ELIZABETH J. CABRASER, born Oakland, California, June 23, 1952. Admitted to practice in California,1978; California Supreme Court,1978; U.S. Supreme Court, 1996; U.S. District Court, Northern District of California, 1978; Eastern District of California, 1979; Central District of California and Southern District of California, 1992; U.S. Court of Appeals, Second Circuit, 2000; Third Circuit, 1994; Fifth Circuit, 1992; Sixth Circuit, 1992; Seventh Circuit, 2001; Ninth Circuit, 1979; Tenth Circuit, 1992; Eleventh Circuit, 1992; U.S. Tax Court, 1979; U.S. District Court, District of Hawaii, 1986. Education: Boalt Hall School of Law, University of California (J.D., 1978); University of California at Berkeley (A.B., 1975). Awards and Honors: "Lawdragon 500 Leading Plaintiffs' Lawyers," Lawdragon, Winter 2007; “Top Women Litigators in California,” The San Francisco and Los Angeles Daily Journal, 2007; Distinguished Leadership Award, Legal Community Against Violence, 2006; “One Hundred Most Influential Lawyers in America,” The National Law Journal, 2006, 2000 and 1997; “Top 75 Women Litigators,” California Daily Journal, 2005-2006; Women of Achievement, Legal Momentum (formerly the NOW Legal Defense & Education Fund), 2006; “Best Lawyer,” Best Lawyers in America, 2006; “Top 100 Lawyers,” California Daily Journal, 2002-2007; “Top 30 Securities Litigator,” California Daily Journal, 2005; “Top 100 and Top 50 Female Northern California Super Lawyer,” Law & Politics, 2005-2006; “Northern California Super Lawyer,” Law & Politics, 2004-2007; “Top 50 Women Litigators,” California Daily Journal, 2004; Citation Award, University of California, Berkeley Boalt Hall, 2003; “Top 30 Women Litigators,” California Daily Journal, 2002; Distinguished Jurisprudence Award, AntiDefamation League, 2002; “Top Ten Women Litigators,” The National Law Journal, 2001; “California Law Business Top 100 Lawyers,” California Daily Journal, 2000-1998; Matthew O. Tobriner Public Service Award, Legal Aid Society, 2000; Presidential Award of Merit, Consumer Attorneys of California, 1998; “Fifty Most Influential Women Lawyers,” The National Law Journal, 1998; “Lawyers of the Year,” California Lawyer, 1998; Public Justice Achievement Award, Trial Lawyers for Public Justice, 1997. Publications: “The Manageable

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Nationwide Class: A Choice-of-Law Legacy of Phillips Petroleum Co. v. Shutts,” University of Missouri- Kansas City Law Review, Volume 74, Number 3, Spring 2006; Co-Author with Fabrice N. Vincent, “Class Actions Fairness Act of 2005,” California Litigation, Vol. 18, No. 3 (2005); Editor in Chief, California Class Actions Practice and Procedures (2003); Co-Author, “Decisions Interpreting California’s Rules of Class Action Procedure,” Survey of State Class Action Law, updated and re-published in 5 Newberg on Class Actions (ABA 2001-2004); CoAuthor, “Mass But Not (Necessarily) Class: Emerging Aggregation Alternatives Under the Federal Rules,” ABA 8th Annual National Institute on Class Actions, New York (Oct. 15, 2004), New Orleans (Oct. 29, 2004); Co-Author, “2004 ABA Toxicology Monograph-California State Law,” (January 2004); “Current Issues Involving Rule 12(b)(6) and Rule 9(b),” in Civil Practice and Litigation Techniques in Federal and State Courts (ALI-ABA Course of Study 2004); “New Developments in Mass Torts and Class Actions: ‘Issues’ Certification The Mass Torts Top Ten of 2003; Rule 23’s New Provision and Action Trial Plans; And the FJC ‘New Plain Language’ Class Notice,” in Civil Practice and Litigation Techniques in Federal and State Courts (ALIABA Course of Study, February 2004); “Human Rights Violations as Mass Torts: Compensation as a Proxy for Justice in the United States Civil Litigation System”; Coordinating Editor and CoAuthor of California section of the ABA State Class Action Survey (2001-02); “Unfinished Business: Reaching the Due Process Limits of Punitive Damages in Tobacco Litigation Through Unitary Classwide Adjudication,” 36 Wake Forest Law Review 979 (Winter 2001); “Symposium: Enforcing the Social Contract through Representative Litigation,” 33 Connecticut Law Review 1239 (Summer 2001); “Equity for the Victims, Equity for the Transgressor: The Classwide Treatment of Punitive Damages Claims,” 74 Tulane Law Review 2005 (June 2000); “Class Action Trends and Developments After Amchem and Ortiz,” in Civil Practice and Litigation Techniques in Federal and State Courts (ALI-ABA Course of Study 1999); Contributor/Editor, Moore’s Federal Practice (1999); “Life After Amchem: The Class Struggle Continues,” 31 Loyola Law Review 373 (1998); “Recent Developments in Nationwide Products Liability Litigation: The Phenomenon of Non-Injury Products Cases, the Impact of Amchem and the Trend Toward State Court Adjudication,” Products Liability (ABA February 1998); Contributor/Editor, California Causes of Action (1998); “Beyond Bifurcation: Multi-Phase Structure in Mass Tort Class Actions,” Class Actions & Derivative Suits (Spring 1997); “The Road Not Taken: Thoughts on the Fifth Circuit’s Decertification of the Castano Class,” SB24 ALI-ABA 433 (1996); “Getting the Word Out: Pre-Certification Notice to Class Members Under Rule 23(d)(2),” Class Actions & Derivative Suits Newsletter (October 1995); “Mass Tort Class Action Settlements,” 24 CTLA Forum 11 (Jan./Feb. 1994); “Do You Know the Way from San Jose? The Evolution of Environmental and Toxic Nuisance Class Actions,” Class Actions & Derivative Suits (Spring 1994); “An Oracle of Change? Realizing the Potential of Emerging Fee Award Methodologies for Enhancing The Role and Control of Investors in Derivative and Class Action Suits,” Principles of Corporate Governance (ALI October 1994); “How To Streamline Complex Litigation: Tailor a Case Management Order to Your Controversy,” 21 The Brief 12 (ABA/TIPS Summer 1992); “The Applicability of the Fraud-On-The-Market Theory to ‘Undeveloped’ Markets: When Fraud Creates the Market, 12 Class Action Reports 402 (1989); “The Applicability of the Fraud-On-The-Market Theory to ‘Undeveloped’ Markets: When Fraud Creates the Market,” 12 Class Action Reports 402 (1989); “Mandatory Certification of Settlement Classes,” 10 Class Action Reports 151 (1987); Co-author with Alexandra L. Foote and Fabrice N. Vincent, “Ethics and Admissibility: Failure to Disclose Conflicts of Interest in and/or Funding of Scientific Studies and/or Data May Warrant Evidentiary Exclusions,”

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Mealey’s December Emerging Drugs Reporter (December 2002); Co-author with Fabrice N. Vincent, “The Shareholder Strikes Back: Varied Approaches to Civil Litigation Claims Are Available to Help Make Shareholders Whole,” Mealey’s Emerging Securities Litigation Reporter (September 2002). Member: American Law Institute, Council; American Bar Association (Past Co-Chair, Committee on Mass Torts; Committee on Class Actions and Derivative Suits; Tort and Insurance Practice Section (TIPS); Past Vice-Chair, Rules & Procedures Committee, Contributor, Civil Procedure & Evidence News Letter; Business Law Section, Corporate & Litigation Group); Federal Bar Association, Northern District of California Chapter; Bar Association of San Francisco (Past President, Securities Litigation Section; Board of Directors, 1997-1998; Past Member, Judiciary Committee); Advisor, American Law Institute International Jurisdiction and Judgments and Aggregate Litigation Projects; California Constitution Revision Commission, 1993-1996; National Center for State Courts Mass Tort Conference Planning Committee; Northern District of California Civil Justice Reform Act (CJRA) Advisory Committee, and Advisory Committee on Professional Conduct; Lawyer-Delegate, Ninth Circuit Judicial Conference, 1992-1995; American Bar Association (Litigation Section and Committee on Class Actions and Derivative Suits; Co-Chair, Committee on Mass Torts); Consumer Attorneys of California (CAOC); Trial Lawyers for Public Justice (TLPJ); Bar Association of the Fifth Federal Circuit; Fight for Justice Campaign; (California State Liaison, Women Trial Lawyers Caucus); California Women Lawyers; Lawyers Club of San Francisco; Queen’s Bench; Association of Business Trial Lawyers; Bay Area Lawyers for Individual Freedom; ABA National Institute on Class Actions (Organizer/ Participant, 19972000).
RICHARD M. HEIMANN, born Miami, Florida, August 23, 1948. Admitted to practice in Pennsylvania, 1972; District of Columbia, 1974; California, U.S. District Court, Northern District of California and U.S. Court of Appeals, Ninth Circuit, 1975; U.S. Supreme Court, 1980; U.S. Court of Appeals, Second Circuit, 1980; U.S. District Court, District of Hawaii, 1986. Education: Georgetown University (J.D., 1972); Georgetown Law Journal, 1971-72; University of Florida (B.S.B.A., with honors, 1969). Employment: Mr. Heimann served as Deputy District Attorney and Acting Assistant District Attorney for Tulare County, California, and as an Assistant Public Defender in Philadelphia, Pennsylvania, 1972-74. As a private civil law attorney, Mr. Heimann has tried over 30 civil jury cases, including complex cases such as the successful FPI/Agretech and Edsaco securities class action trials. In April 2002 in the Edsaco case, a federal jury in San Francisco, California returned a $170.7 million verdict against Edsaco Ltd., which included $165 million in punitive damages. Member: State Bar of California; Bar Association of San Francisco. Awards and Honors: “Northern California Super Lawyers,” Law & Politics, 2004 - 2007.
WILLIAM BERNSTEIN, born York, Pennsylvania, July 5, 1950. Admitted to practice in California, 1975; U.S. Court of Appeals, Ninth Circuit, 1975; U.S. District Court, Northern District of California, 1975; New York and U.S. Supreme Court, 1985; U.S. District Court, Central and Eastern Districts of California, 1991; U.S. District Court, Southern District of California, 1992. Education: University of San Francisco (J.D., 1975); San Francisco Law Review, 1974-75; University of Pennsylvania (B.A., general honors, 1972). Community Service: Adjunct Professor of Law, University of San Francisco, Settlement Law (2006-Present); Judge Pro Tem for San Francisco Superior Court, 2000-present; Marin Municipal Court, 1984; Discovery Referee for the Marin Superior Court, 1984-89; Arbitrator for the Superior Court of

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Marin, 1984-1990. Publications/Presentations: “The Rise and Fall of Enron’s One-To-Many Trading Platform” (American Bar Association Antitrust Law Section, Annual Spring Meeting, 2005); Co-author with Donald C. Arbitblit, “Effective Use of Class Action Procedures in California Toxic Tort Litigation”, 3 Hastings West-Northwest Journal of Environmental Law and Policy, No. 3 (Spring 1996). Member: State Bar of California; State Bar of New York; Marin County Bar Association (Admin. of Justice Committee, 1988); Bar Association of San Francisco. Awards and Honors: Who’s Who Legal, 2007; Northern California Super Lawyers, Law & Politics, 2004 – 2007; Unsung Hero Award, Appleseed, 2006.
JOSEPH R. SAVERI, born San Francisco, California, August 18, 1962. Admitted to practice in California, 1987; U.S. District Court, Northern District of California; U.S. District Court, Central District of California; U.S. District Court, Southern District of California; U.S. Court of Appeals, First Circuit; U.S. Court of Appeals, Second Circuit; U.S. Court of Appeals, Seventh Circuit; U.S. Court of Appeals, Eighth Circuit; U.S. Court of Appeals, Ninth Circuit; U.S. Supreme Court. Education: University of Virginia (J.D., 1987); University of California at Berkeley (B.A., 1984). Publications and Presentations: “Dagher: An Admirable Exercise in Restraint,” Competition: The Journal of the Antitrust and Unfair Competition Law Section of the State Bar of California, Vol. 15, No. 2 (Fall/Winter 2006); Panelist, Soaring Prices for Prescription Drugs: Just Rewards for Innovations or Antitrust Violations?, University of San Francisco Law Review (November 13, 2004); California Antitrust & Unfair Competition Law 3d (Antitrust and Unfair Competition Law Section of the State Bar of California 2003); Panelist, Fordham Conference on Electronic Discovery, Discovery Subcommittee of Advisory Committee on the Rules of Civil Procedure; Contributing Author, California Class Actions Practice and Procedure (Elizabeth J. Cabraser editor in chief, 2003); “RICO Update,” 22 Review of Securities and Commodities Regulation, No. 18 (Oct. 25, 1989). Member: Faculty Member, Sedona Conference on Antitrust Law and Litigation, 2006; Northern District of California’s Civil Rules and Practice Committee; Bar Association of San Francisco; State Bar of California; Italian American Bar Association; Lawyers Club of San Francisco. Awards and Honors: “Northern California Super Lawyers,” Law & Politics, 2006 & 2007.
DONALD C. ARBITBLIT, born Jersey City, New Jersey, May 5, 1951. Admitted to practice in Vermont, 1979; California and U.S. District Court, Northern District of California, 1986. Education: Boalt Hall School of Law, University of California (J.D., 1979); Order of the Coif; Tufts University (B.S., magna cum laude, 1974). Publications: Co-Author with Wendy Fleishman, “The Risky Business of Off-Label Use,” Trial (March 2005); “Comment on Joiner: Decision on the Daubert Test of Admissibility of Expert Testimony,” 6 Mealey’s Emerging Toxic Torts, No. 18 (December 1997); Co-author with William Bernstein, “Effective Use of Class Action Procedures in California Toxic Tort Litigation,” 3 Hastings West-Northwest Journal of Environmental Law and Policy, No. 3 (Spring 1996); “The Plight of American Citizens Injured by Transboundary River Pollution,” 8 Ecology Law Quarterly, No. 2 (1979). Appointments: Member of the Federal Court-appointed Science Executive Committee, and Chair of the Epidemiology/Clinical Trials Subcommittee, In re Vioxx Products Liability Litigation, MDL No. 1657 (E.D. La.); Member of the Federal Court-appointed Science and Expert Witness Committees in In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation, MDL No. 1203 (E.D. Pa.), In re Baycol Products Litigation, MDL No. 1431 (D. Minn.) and Rezulin Products Liability Litigation, MDL No. 1348 (S.D.N.Y.). Member: Bar

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Association of San Francisco; State Bar of California. Awards and Honors: “Northern California Super Lawyers,” Law & Politics, 2004-07.
STEVEN E. FINEMAN, born Los Angeles, California, February 13, 1963. Managing Partner. Admitted to practice in California, 1989; U.S. District Court, Northern, Eastern and Central Districts of California and U.S. Court of Appeals, Ninth Circuit, 1995; U.S. Court of Appeals, Fifth Circuit, 1996; New York, U.S. District Court, Eastern and Southern Districts of New York, U.S. Court of Appeals, Second Circuit and U.S. Supreme Court, 1997; District of Columbia, 1997. Education: University of California, Hastings College of the Law (J.D., 1988); University of California, San Diego (B.A., 1985); Stirling University, Scotland (English Literature and Political Science, 1983-84). Honors/Appointments: “New York Super Lawyers,” Law & Politics, 2006-2007; “The New York Area’s Best Lawyers,” Best Lawyers in America (published by American Lawyer Media), 2005-2007; “40 under 40”, The National Law Journal, 2002, selected as one of the country’s most successful litigators under the age of 40; Editorial Board, “Bill of Particulars, A Review of Developments in New York State Trial Law,” New York State Trial Lawyers Institute, Quarterly (June 2005-present); Trial Lawyers for Public Justice, Executive Committee Member (July 2006-present), Board of Directors (July 2002present); Board of Trustees, Civil Justice Foundation (January 2004-present) Executive Committee (July 2006-present), Co-Chair & Class Action Preservation Project (July 2005present); Board of Directors, New York State Trial Lawyers Association (July 2001-July 2004); Plaintiff Toxic Tort Advisory Council, Lexis/Nexis, Mealey’s Publications and Conferences Group (January 2002-2005). Publications/Presentations: Stanford University Law School and The Centre for Socio-Legal Studies, Oxford University, Panel Member, The Globalization of Class Actions (December 13 and 14, 2007, Oxford, England); “Bill of Particulars, A Review of Developments in New York State Trial Law,” Federal Court Jurisdiction: Getting to Federal Court By Choice or Removal (Winter 2007); Stanford University Law School, Guest Lecturer for Professor Deborah Hensler’s course on Complex Litigation, Foreign Claimants in U.S. Courts (April 17, 2007, Stanford, California); American Constitution Society for Law and Policy, 2006 National Convention, Panel Member, Finding the Balance: Federal Preemption of State Law (June 16, 2006, Washington, D.C.); Lieff, Cabraser, Heimann & Bernstein, LLP, Global Justice Forum, Conference Moderator and Panel Member on securities litigation (May 19, 2006, Paris, France); Stanford University Law School, Guest Lecturer for Professor Deborah Hensler’s course on Complex Litigation, Foreign Claimants in U.S. Court (April 25, 2006, Stanford, California); Lieff, Cabraser, Heimann & Bernstein, LLP, Global Justice Forum, Conference Moderator and Speaker and Papers, The Basics of Federal Multidistrict Litigation: How Disbursed Claims are Centralized in U.S. Practice and Basic Principles of Securities Actions for Institutional Investors (May 20, 2005, London, England); New York State Trial Lawyers Institute, Federal Practice for State Practioners, Speaker and Paper, Federal Multidistrict Litigation Practice, (March 30, 2005, New York, New York), published in “Bill of Particulars, A Review of Developments in New York State Trial Law” (Spring 2005); Stanford University Law School, The Stanford Center on Conflict and Negotiation, Interdisciplinary Seminar on Conflict and Dispute Resolution, Guest Lecturer, In Search of “Global Settlements”: Resolving Class Actions and Mass Torts with Finality (March 16, 2004, Stanford, California); Lexis/Nexis, Mealey’s Publications and Conferences Group, Wall Street Forum: Mass Tort Litigation, Co-Chair of Event (July 15, 2003, New York, New York); Northstar Conferences, The Class Action Litigation Summit, Panel Member on Class Actions in the Securities Industry, and Paper, Practical Considerations for Investors’ Counsel - Getting the Case (June 27, 2003, Washington, D.C.); The Manhattan

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Institute, Center for Legal Policy, Forum Commentator on Presentation by John H. Beisner, “Magnet Courts: If You Build Them, Claims Will Come” (April 22, 2003, New York, New York); Stanford University Law School, Guest Lecturer for Professor Deborah Hensler’s Courses on Complex Litigation (“Selecting The Forum For a Complex Case -- Strategic Choices Between Federal And State Jurisdictions”) and Alternative Dispute Resolution (“ADR In Mass Tort Litigation”) (March 4, 2003, Stanford, California); American Bar Association, Tort and Insurance Practice Section, Emerging Issues Committee, Member of Focus Group on Emerging Issues in Tort and Insurance Practice (coordinated event with New York University Law School and University of Connecticut Law School, August 27, 2002, New York, New York); Duke University and University of Geneva, Debates Over Group Litigation in Comparative Perspective, Panel Member on Mass Torts and Products Liability (July 21-22, 2000, Geneva, Switzerland); New York Law Journal, Article, Consumer Protection Class Actions Have Important Position, Applying New York’s Statutory Scheme (November 23, 1998); Leader Publications, Litigation Strategist, “Fen-Phen” Articles, The Admissibility of Scientific Evidence in Fen-Phen Litigation and Daubert Developments: Something for Plaintiffs, Defense Counsel (June 1998, New York, New York); The Defense Research Institute and Trial Lawyer Association, Toxic Torts and Environmental Law Seminar, Article and Lecture, A Plaintiffs’ Counsels’ Perspective: What’s the Next Horizon? (April 30, 1998, New York, New York); Lexis/Nexis, Mealey’s Publications and Conference Group, Mealey’s Tobacco Conference: Settlement and Beyond 1998, Article and Lecture, The Expanding Litigation (February 21, 1998, Washington, D.C.); New York State Bar Association, Expert Testimony in Federal Court After Daubert and New Federal Rule 26, Article and Lecture, Breast Implant Litigation: Plaintiffs’ Perspective on the Daubert Principles (May 23, 1997, New York, New York). Member: American Bar Association; New York Bar Association; California Bar Association; District of Columbia Bar Association; Public Justice Foundation, Board of Directors (July 2002-present); Executive Committee (July 2006-present); Co-Chair, Class Action Preservation Project ( July 2005-present); Secretary (July 2007-present); Association of the Bar of the City of New York; Fight for Justice Campaign; New York State Trial Lawyers Association; Trial Lawyers For Public Justice; Association of Trial Lawyers of America; Human Rights First; American Constitution Society for Law and Policy; Supreme Court Historical Society.
ROBERT J. NELSON, born New York, New York, October 20, 1960; admitted practice in California, 1987; U.S. District Court, Central District of California, 1987; U.S. District Court, Northern District of California, 1988; U.S. Court of Appeals, Ninth Circuit, 1988; U.S. Court of Appeals, Sixth Circuit, 1995; District of Columbia, 1998; New York, 1999; U.S. District Court, Eastern District of New York, Southern District of New York, 2001. Education: N.Y.U. School of Law (J.D., 1987): Order of the Coif, Articles Editor, New York University Law Review, RootTilden Scholarship Program; Cornell University (A.B., cum laude 1982): Member, Phi Beta Kappa, College Scholar Honors Program; London School of Economics (General Course, 198081): Graded First. Employment: Law Clerk to Judge Stephen Reinhardt, U.S. Court of Appeals, Ninth Circuit, 1987-88; Assistant Federal Public Defender, Northern District of California, 198893; Legal Research and Writing Instructor, University of California-Hastings College of the Law, 1989-91 (Part-time position). Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003); “The Importance of Privilege Logs,” The Practical Litigator, Vol. II, No. 2 (March 2000)(ALI-ABA Publication); “To Infer or Not to Infer a Discriminatory Purpose: Rethinking Equal Protection Doctrine,”

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61 New York University Law Review 334 (1986). Member: State Bar of California; Bar of the District of Columbia; State Bar of New York; Bar Association of San Francisco; Fight for Justice Campaign; American Bar Association. Awards and Honors: “Northern California Super Lawyers,” Law & Politics, 2004 - 2007.
KELLY M. DERMODY, born Ithaca, New York, June 16, 1967. Admitted to practice in California, 1994; U.S. District Court, Northern District of California, 1995; U.S. Court of Appeals for the Third Circuit (2001); U.S. Court of Appeals for the Seventh Circuit (2006); U.S. Court of Appeals for the Ninth Circuit (2007); U.S. District Court of Colorado (2007). Education: Boalt Hall School of Law, University of California, Berkeley (J.D. 1993); Moot Court Executive Board (1992-1993); Articles Editor, Industrial Relations Law Journal/Berkeley Journal of Employment and Labor Law (1991-1992); Harvard University (A.B. magna cum laude, 1990), Senior Class Ames Memorial Public Service Award. Employment: Law Clerk to Chief Judge John T. Nixon, U.S. District Court, Middle District of Tennessee, 1993-1994; Adjunct Professor of Law, Golden Gate University School of Law, Employment Law (Spring 2001). Awards: "Trial Lawyer of the Year Finalist," Public Justice Foundation, 2007; “Top Women Litigators in California,” The San Francisco and Los Angeles Daily Journal, 2007; “California Lawyer Attorney of the Year (CLAY) Award,” California Lawyer, 2007; “Lawdragon 500 Leading Plaintiffs' Lawyers," Lawdragon, Winter 2007; Consumer Attorney of the Year Finalist, Consumer Attorneys of California, 2006; Daily Journal Magazine: Named as one of California’s “Top 20 Lawyers Under 40” (2006); Northern California Super Lawyer, Law & Politics, 2004 – 2007; “Top 100 Super Lawyers” and “Top 50 Female Super Lawyers” Awards, Law & Politics, 2007; “Trial Lawyer of the Year Finalist,” Public Justice Forum, 2007; "Living the Dream Partner," Lawyers Committee for Civil Rights of the San Francisco Bay Area, 2005. Publications/Presentations: “Class Actions: Latest Developments in Litigating and Settling Employment Discrimination Class Actions” (American Bar Association Labor and Employment Section Equal Opportunity Committee, Mid-Year Meeting, 2001); Co-Author with James M. Finberg, “A Road Map to Discovery in Employment Discrimination and Wage/Hour Class Actions” (Glasser Legal Works Seminar, 2000); “Employment Discrimination Class Actions in the Wake of Allison v. Citgo Petroleum Corp.” (American Bar Association Litigation Section Annual Meeting, 2000); “Employment Discrimination Class Actions in the Wake of Allison v. Citgo Petroleum Corp. and Fed. R. Civ. P. 23(f)” (Federal Bar Association Convention, 1999); Co-Author with James M. Finberg, “Discovery in Employment Discrimination Class Actions,” in Litigation and Settlement of Complex Class Actions (Glasser Legal Works 1998). Member: American Bar Association, Labor and Employment Law Section Annual Conference (Vice-Chair, 2007-present), Committee on Equal Opportunity in the Legal Profession (Co-Chair, 2006-2007); American Bar Association Labor and Employment Law Section Equal Employment Opportunity Committee (Co-Chair, 2003-present; Midwinter Meeting Planning Committee, 2000-2006); ABA Labor and Employment Law Section Katrina Task Force (Member, 2005-2007); Bar Association of San Francisco (Board of Directors, 2005present; Litigation Section, Executive Committee, 2002-2005); Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (Board of Directors, 1998-2005; Secretary, 1999-2003; Co-Chair, 2003-2005); National Center for Lesbian Rights (Board of Directors, 2002-present; Board Co-Chair, 2005-2006); Pride Law Fund (Board of Directors, 1995-2002; Secretary, 19951997; Chairperson, 1997-2002); Equal Rights Advocates (Litigation Committee, 2000-

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2002); State Bar of California; Consumer Attorneys of California; National Employment Lawyers’ Association; Bay Area Lawyers for Individual Freedom.
JONATHAN D. SELBIN, born Baton Rouge, Louisiana, May 11, 1967. Admitted to practice in California, 1994; New York, 2001; District of Columbia, 1999; U.S. Court of Appeals, Fifth Circuit, 1994; U.S. District Court, Northern District of California, 1995; U.S. District Court, Central District of California, 1997; U.S. District Court, Southern District of New York, 2001. Education: Harvard Law School (J.D., magna cum laude, 1993); University of Michigan (B.A., summa cum laude, 1989). Employment: Law Clerk to Judge Marilyn Hall Patel, U.S. District Court, Northern District of California, 1993-95. Awards and Honors: “New York Super Lawyers,” Law & Politics, 2006. Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor-in-chief, 2003); “Bashers Beware: The Continuing Constitutionality of Hate Crimes Statutes After R.A.V.,” 72 Oregon Law Review 157 (Spring, 1993). Member: State Bar of California; State Bar of New York; Bar of the District of Columbia; American Bar Association; New York State Trial Lawyers Association.
BARRY R. HIMMELSTEIN, born Philadelphia, Pennsylvania, March 14, 1958. Admitted to bar, 1992, California; U.S. District Court, Northern District of California, 1992. Education: Hastings College of the Law (J.D., magna cum laude, 1991); Note and Articles Editor, Hastings Law Journal (1990-91); University of Michigan at Ann Arbor (B.G.S., with distinction, 1982). Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003). Employment: Law Clerk to Judge Charles A. Legge, U.S. District Court, Northern District of California, 1991-92. Member: State Bar of California; Bar Association of San Francisco.
MICHELE C. JACKSON, born Redwood City, California, January 17, 1954. Admitted to bar, 1979, California; U.S. District Court, Northern District of California, 1979; United States Supreme Court, 1988; U.S. Court of Appeals, Ninth Circuit, 1981; U.S. District Court, Central District of California, 1985; U.S. Court of Appeals, Fifth Circuit, 1989. Education: University of San Francisco School of Law (J.D., cum laude, 1979); Stanford University (B.A., with honors, 1976). Employment: Judicial Extern to Justice Wiley W. Manuel, California Supreme Court, Summer 1977. Publications and Panels: Panelist, “Antitrust Dispute Resolution in Complex Business Torts and Antitrust Cases: Is There Really a Class Arbitration?” (April 2007), American Bar Association Antitrust Law Spring Meeting; Panelist, “Settlement and Mediation of Unfair Competition Disputes” (May, 2006) and other panels, State Bar of California Antitrust and Unfair Competition Section; Author, Recent Judicial Opinions On Class And Multi-Party Arbitration In Antitrust And Consumer Cases, And Principles Underlying Those Opinions (February 2007), American Bar Association; Chapter Co-Author with Marc Seltzer, “State Antitrust Law and Intellectual Property” in California Antitrust & Unfair Competition Law (Third), Vol. 1: Antitrust; Author, Asserted Defenses to a §17200 Class Action Based on Korea Supply -- The Interplay With Indirect Purchaser Litigation (2005) American Bar Association; Contributing Author, California Class Actions Practice and Procedure (2003). Awards and Honors: Northern California Super Lawyer, Law & Politics, 2007; Recipient of State Bar Board of Governors Award. Appointments: Officer, Advisor and Executive Committee Member, State Bar of California Antitrust and Unfair Competition Section (terms September, 2001-2007).

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Member: American Bar Association; State Bar of California; Bar Association of San Francisco; McAuliffe Law Honor Society.
MICHAEL W. SOBOL, born Mt. Kisco, New York, October 5, 1961. Admitted to practice in Massachusetts, 1989; California, 1998; United States District Court, District of Massachusetts, 1990; U.S. District Court, Northern District of California, 2001. Education: Boston University (J.D., 1989); Hobart College (B.A., cum laude, 1983). Employment: Lecturer in Law, Boston University School of Law, 1995-1997. Member: State Bar of California; Bar Association of San Francisco.
FABRICE N. VINCENT, born Paris, France, June 15, 1966. Admitted to practice in California, 1992; U.S. District Court, Northern District of California, Central District of California, Eastern District of California, Ninth Circuit Court of Appeals, 1992. Education: Cornell Law School (J.D., cum laude, 1992); University of California at Berkeley (B.A., 1989). Publications: Co-Author with Elizabeth J. Cabraser, “Class Actions Fairness Act of 2005,” California Litigation, Vol. 18, No. 3 (2005); Co-Editor, California Class Actions Practice and Procedures (2003-06); Co-Author, “Ethics and Admissibility: Failure to Disclose Conflicts of Interest in and/or Funding of Scientific Studies and/or Data May Warrant Evidentiary Exclusions,” Mealey’s December Emerging Drugs Reporter (December 2002); Co-author, “The Shareholder Strikes Back: Varied Approaches to Civil Litigation Claims Are Available to Help Make Shareholders Whole,” Mealey’s Emerging Securities Litigation Reporter (September 2002); Co-Author, “Decisions Interpreting California’s Rules of Class Action Procedure,” Survey of State Class Action Law (ABA 2000-06), updated and re-published in 5 Newberg on Class Actions (2001-06); Coordinating Editor and Co-Author of California section of the ABA State Class Action Survey (2001-06); Co-Editor-In-Chief, Fen-Phen Litigation Strategist (Leader Publications 1998-2000) and author of “Off-Label Drug Promotion Permitted” (Oct. 1999); Co-Author, “The Future of Prescription Drug Products Liability Litigation in a Changing Marketplace,” and “Six Courts Certify Medical Monitoring Claims for Class Treatment,” 29 Forum 4 (Consumer Attorneys of California 1999); Co-Author, Class Certification of Medical Monitoring Claims in Mass Tort Product Liability Litigation (ALI-ABA Course of Study 1999); Co-Author, “How Class Proofs of Claim in Bankruptcy Can Help in Medical Monitoring Cases,” (Leader Publications 1999); Co-Author, Introduction, “Sanctioning Discovery Abuses in the Federal Court,” (LRP Publications 2000); “With Final Approval, Diet Drug Class Action Settlement Avoids Problems That Doomed Asbestos Pact,” (Leader Publications 2000). Awards & Honors: Northern California Super Lawyer, Law & Politics, 2006 – 2007. Member: State Bar of California; Bar Association of San Francisco; American Bar Association; Fight for Justice Campaign; Association of Business Trial Lawyers.
DAVID S. STELLINGS, born New Jersey, April 23, 1968. Admitted to practice in New York, 1994; New Jersey; 1994; U.S. District Court, Southern District of New York, 1994. Education: New York University School of Law (J.D., 1993); Editor, Journal of International Law and Politics; Cornell University (B.A., cum laude, 1990). Member: State Bar of New York; State Bar of New Jersey; Bar Association of the City of New York; New York State Bar Association; American Bar Association.
ERIC B. FASTIFF, born San Francisco, California. Admitted to practice in California, 1996; District of Columbia, 1997; U.S. Court of Appeals for the Ninth Circuit, U.S. District Courts for the Northern, Southern, Eastern, and Central Districts of California, District of

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Columbia; U.S. Court of Federal ClaiMs. Education: Cornell Law School (J.D., 1995); Editorin-Chief, Cornell International Law Journal; London School of Economics (M.Sc. (Econ.), 1991); Tufts University (B.A., cum laude, magno cum honore in thesi, 1990). Employment: Law Clerk to Hon. James T. Turner, U.S. Court of Federal Claims, 1995-1996. Publications: Co-Editor, California Class Actions Practice and Procedures (Elizabeth J. Cabraser, Editor-inChief, 2003-2006); Coordinating Editor and Co-Author of California section of the ABA State Class Action Survey (2003-06); Author, “US Generic Drug Litigation Update,” 1 Journal of Generic Medicines 212 (2004); Author, “The Proposed Hague Convention on the Recognition and Enforcement of Civil and Commercial Judgments: A Solution to Butch Reynolds’s Jurisdiction and Enforcement Problems,” 28 Cornell International Law Journal 469 (1995). Member: State Bar of California; District of Columbia Bar Association; Bar Association of San Francisco; Bar of the U.S. Court of Federal Claims; Editorial Board Member, Journal of Generic Medicines, 2003-present.
WENDY FLEISHMAN, born Philadelphia, Pennsylvania, 1954. Admitted to practice in Pennsylvania, 1977; New York, 1992. Education: University of Pennsylvania (PostBaccalaureate Pre-Med, 1982); Temple University (J.D., 1977); Sarah Lawrence College (B.A., 1974). Employment: Skadden, Arps, Slate, Meagher & Flom LLP in New York (Counsel in the Mass Torts and Complex Litigation Department), 1993-2001; Fox, Rothschild O’Brien & Frankel (partner), 1988-93 (tried more than thirty civil, criminal, employment and jury trials, and AAA arbitrations, including toxic tort, medical malpractice and serious injury and wrongful death cases); Ballard Spahr Andrews & Ingersoll (associate), 1984-88 (tried more than thirty jury trials on behalf of the defense and the plaintiffs in civil personal injury and tort actions as well as employment- and construction-related matters); Assistant District Attorney in Philadelphia, 1977-84 (in charge of and tried major homicide and sex crime cases). Awards and Honors: “New York Super Lawyers,” Law & Politics, 2006-2007. Publications: Editor, Brown & Fleishman, "Proving and Defending Damage Claims: A Fifty-State Guide," (2007); Co-Author with Donald C. Arbitblit, “The Risky Business of Off-Label Use,” Trial (March 2005); CoAuthor, “From the Defense Perspective,” in Scientific Evidence, Chapter 6, (Aspen Law Pub, 1999); American Bar Association, Editor, Trial Techniques Newsletter, Tort and Insurance Practices Section, 1995-96; and 1993-94. Appointments: Mealey's Drug & Medical Device Litigation Conference, Co-Chair (2007); Executive Committee In re ReNu MoistureLoc Product Liability Litigation, MDL; In re Guidant Product Liability Litigation, Discovery; In re Baycol MDL Litigation – Co Chair Science Committee; In re Vioxx MDL Litigation – Pricing Committee. Member: New York State Trial Lawyers Association (Board of Directors, 2004Present); Association of the Bar of the City of New York (Judiciary Committee, 2004-Present); American Bar Association (2000, Affair Chair, ABA Annual Meeting, Torts & Insurance Practices Section, NYC; 1997, Chair, Trial Techniques Committee, Tort & Insurance Practices; 1996, Chair Elect, Trial Techniques Committee, Tort & Insurance Practices); Pennsylvania Bar Association (Committee on Legal Ethics and Professionalism, 1993-Present; Committee on Attorney Advertising, 1993-Present; Vice-Chair, Task Force on Attorney Advertising, 1991-92); State Bar of New York, Federal Bar Association; Member, Gender and Race Bias Task Force of the Second Circuit, 1994-present; Deputy Counsel, Governor Cuomo’s Screening Committee for New York State Judicial Candidates, 1993-94; New York State Trial Lawyers Association; New York Women’s Bar Association; Association of the Bar of the City of New York (Product Liability Committee, 2007-present); New York County Lawyers; Fight for Justice Campaign;

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NYTLA; PATLA; Philadelphia Bar Association (Member of Committee on Professionalism 1991-92).
PAULINA DO AMARAL, born New York, New York, February 1966. Admitted to practice in New York, 1997; California, 1998; U.S. Court of Appeals, Ninth Circuit, 1999; U.S. District Court, Southern District of New York, 2004; U.S. District Court, Western District of Michigan, 2004; U.S. District Court, Eastern District of Michigan, 2007. Education: University of California Hastings College of Law (J.D., 1996); Executive Editor, Hastings Constitutional Law Quarterly; National Moot Court Competition Team, 1995; Moot Court Executive Board; University of Rochester (B.A., 1988). Employment: Law Clerk to Chief Judge Richard Alan Enslen, U.S. District Court, Western District of Michigan, 1996-98. Member: Association of the Bar of the City of New York, (2007-2010, Committee on the Judiciary); American Bar Association; State Bar of New York; State Bar of California; Bar Association of San Francisco; American Trial Lawyers Association; New York State Trial Lawyers Association.
HECTOR D. GERIBON, born Montevideo, Uruguay, November 5, 1966. Admitted to practice in New Jersey and New York, 1997; California, 1999; U.S. District Court, District of New Jersey, 1997; U.S. Court of Appeals for the Ninth Circuit, U.S. District Courts for the Northern and Central Districts of California, 1999; U.S. Court of Appeals, Third Circuit, 2001; U.S. District Court, Southern District of New York, 2003; U.S. District Court, Eastern District of New York, 2006; U.S. District Court, Colorado, 2006. Education: Brooklyn Law School (J.D., 1996); Moot Court Honor Society; American Jurisprudence Award for Health Law; Recipient, Edward V. Sparer Public Interest Law Fellowship; St. John’s University, (B.S., Dean’s List, 1988). Employment: Law Clerk to Judge Manuel L. Real, U.S. District Court, Central District of California, 1997-98; Judicial Extern to Chief Judge Peter C. Dorsey, U.S. District Court, District of Connecticut, 1995. Member: State Bar of New York; Bar Association of the City of New York, American Bar Association, Hispanic National Bar Association.
KATHRYN E. BARNETT, born Chapel Hill, North Carolina, October 23, 1967. Admitted to practice in Tennessee, 1992; U.S. District Court, Middle District of Tennessee, 1997; U.S. 6th Circuit, 2000; U.S. District Court, Western District of Tennessee, 2001; U.S. 11th Circuit, 2003; U.S. District Court, Eastern District of Tennessee, 2005. Education: Vanderbilt University School of Law (J.D., 1992); American Jurisprudence Awards: Torts I and Jurisprudence; Davidson College (B.A., with Honors in Philosophy, 1989), Dean Rusk Grant for International Studies. Awards & Honors: “Best of the Bar,” Nashville Business Journal (2003, 2005-2007); Mid-South Super Lawyer, Law & Politics, 2006-2007; “Best Lawyers in Tennessee,” Business Tennessee, (2006-2007). Litigation Experience: Ms. Barnett has tried over 15 civil and criminal trials, including complex and class action cases, as well as catastrophic personal injury cases. In 2000, Ms. Barnett obtained a verdict of nearly $6 million on behalf of parents whose unborn fetus died tragically due to medical malpractice. In March, 2004 and in August, 2004 Ms. Barnett served as co-lead trial counsel in the class action lawsuit of In re TriState Crematory Litigation, Multi-District Litigation Docket No. 1467. The case was settled during the second week of trial. The settlements in the Tri-State litigation exceed $40 million. Employment: Judicial Intern to Judge John T. Nixon, U.S. District Court, Middle District of Tennessee, Fall 1990; Assistant Public Defender, Davidson County, Tennessee, Sept. 1991-Dec. 1995. Publications/Presentations: “Civil Procedure and Evidence Update,” Tennessee Trial Lawyers (Oct. and Nov. 2006); “Pre-Trial Skills: Thinking on Your Feet,” National Business

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Institute (Nov. 2006), “Trial Practice Institute,” Nashville Bar Association (Sept. 2005); “State Law Class Actions,” American Bar Association, Business Law Section (April 2005); "Power Windows Can Kill," Trial (April 2005); “Auto Defect Cases,” Tennessee Trial Lawyers (Feb. 2005); “Limiting the Harmful Testimony of Experts on the Law,” Trial (Jan. 2001); “Letting Focus Groups Work for You,” Trial (April 1999); “Knocking Out Opposing Experts,” Tennessee Trial Lawyers (October and November, 2004), Nashville Bar Association (July, 2004); “Trial Practice Tips: Powerful Trial Strategies for the Absolute Litigator,” Nashville Bar Association (April, 2004); “Damages,” Tennessee Trial Lawyers (Oct. and Nov. 2003); “Trying the Wrongful Death Case in Tennessee,” National Business Institute (Aug. 2003); “Advanced Personal Injury,” National Business Institute (July 2003); “Mass Torts,” Tennessee Bar Association (July 2002); “Superior Depositions Strategies in Civil Trial Practice,” National Business Institute (Jan. 2002, Dec. 1999); “Lawsuits Against the Nursing Home Industry,” Tennessee Trial Lawyers (Feb. 2000); “How to Prepare for Mediation and other Practice Tips,” Nashville Bar Association (Oct. 2000); “Tennessee Expert Witness,” Lorman Education Services (July 2000); “Using Focus Groups to Get the Settlement or Verdict Your Client Deserves,” Tennessee Trial Lawyers (Feb. 1999). Member: Tennessee Trial Lawyers (Secretary, 2007; Board of Governors, 2002-2005; Chair Continuing Legal Education Committee 2004-05); Nashville Bar Foundation (Fellow); Tennessee Justice Center, Inc. (Board of Directors, 2002-05, Secretary-Treasurer, 2003-04); Nashville Lawyer’s Association for Women (President, 2004-05; President-elect 2003-04; Director, 2002-03; Treasurer, 2000-02; Board, 1998-present); Davidson County, Tennessee Metropolitan Board of Equalization, 2000-04; Harry Phillips American Inn of Courts (Executive Committee, 2004-05; Member, 2004 - 2008, 1997-99); Nashville Bar Association; Tennessee Bar Association; American Association of Trial Lawyers.
JOY A. KRUSE, born Buffalo, New York, February 24, 1955. Admitted to practice in Washington, D.C., 1984; California; U.S. Supreme Court; U.S. Courts of Appeals for the District of Columbia, Ninth, and Federal Circuits; U.S. District Courts for the Northern and Eastern Districts of California, 1989. Education: Harvard Law School (J.D., 1984); Wellesley College (B.A., 1977). Employment: Assistant Federal Public Defender, Northern District of California, 1992-96; Public Defender Service, Washington D.C., 1984-89. Member: Phi Beta Kappa; State Bar of California; Bar Association of San Francisco.
CARYN BECKER, born Johannesburg, South Africa, January 10, 1973. Admitted to practice in California, 1998; U.S. District Court, Northern District of California, U.S. District Court, Central District of California; U.S. Court of Appeals, Ninth Circuit, 1999. Education: Duke Law School (J.D., with honors, 1998); Technical Editor, Law and Contemporary Problems; Articles Editor, Duke Journal of Gender Law & Policy; Phi Beta Kappa; University of California at Berkeley (B.A., with high honors, 1995). Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003). Member: American Bar Association; State Bar of California; Bar Association of San Francisco.
STEPHEN H. CASSIDY, born Pittsburgh, Pennsylvania, May 14, 1964. Admitted to practice in California, 1989; U.S. District Court, Northern District of California and U.S. Court of Appeals, Ninth Circuit, 1997. Education: Hastings College of the Law (J.D., magna cum laude, 1989); Associate Managing Editor, Hastings International and Comparative Law Review, 1988-89; Order of the Coif; Member, Thurston Society; Recipient, American Jurisprudence Awards for Real Property, Evidence and American Legal History; Georgetown University

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(B.S.F.S., 1986). Employment: Law Clerk to Magistrate-Judge Joan S. Brennan, U.S. District, Northern District of California, 1989-90; Motions Attorney, U.S. Court of Appeals, Ninth Circuit, 1992-94, 1996-97. Publications/Presentations: “Internet Marketing for Plaintiffs’ Firms,” CAOC Conference (May 2004); “Enhancing the Role of Law Firm Marketing Departments,” LexisNexis Law Firm Marketers’ Roundtable (November 2003); Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003); Co-Author, “Decisions Interpreting California’s Rules of Class Action Procedure,” in Survey of State Class Action Law (ABA 2001); “The Newest Member of the Nuclear Club: Pakistan’s Drive for a Nuclear Weapon’s Capability,” 12 Hastings Int’l & Comp. L. Rev. 679 (1989). Member: State Bar of California; Bar Association of San Francisco; American Bar Association (Litigation Section); Trial Lawyers for Public Justice; Fight for Justice Campaign; Consumer Attorneys of California.
RACHEL GEMAN, born Northampton, Massachusetts, August 7, 1971. Admitted to practice in New York, 1998; Southern and Eastern Districts of New York, 1999; U.S. District Court, Eastern District of Michigan, 2005; U.S. District Court of Colorado, 2007. Education: Columbia University School of Law (J.D. 1997); Stone Scholar; Equal Justice America Fellow; Human Rights Fellow; Editor, Columbia Journal of Law and Social Problems; Harvard University (A.B. cum laude 1993). Employment: Adjunct Professor, New York Law School; Special Advisor, United States Mission to the United Nations, 2000; Law Clerk to Judge Constance Baker Motley, U.S. District Court, Southern District of New York, 1997-98. Awards and Honors: Distinguished Honor Award, United States Department of State, 2001. Publications/Presentations: ”The New York Employee Advocate,” Co-Editor, 2005-Present (Volumes 12 and forward); “Evidence and Jury Instructions in FLSA Actions,” Georgetown Law Center/ACL-ABA (2007); “Crucial Events in the ‘Life’ of an FLSA Collective Action: Filing Considerations and the Two-step ‘Similarly-Situated’ Analysis,” National Employment Lawyers Association, Annual Convention (2006) (Author & Panelist); “Time is Money, Except When It’s Not: Compensable Time and the FLSA,” National Employment Lawyers Association, Impact Litigation Conference (2005) (Author & Panelist); “Electronic Discovery,” Federal Judicial Center & Institute of Judicial Administration, Workshop on Employment Law for Federal Judges (2005) (Panelist); “Image-Based Discrimination and the BFOQ Defense,” EEO Today (Vol. 9, Issue 1, Fall 2004) (Author); “Fair Labor Standards Act Overtime Exemptions: Proposed Regulatory Changes,” New York State Bar Association Labor and Employment Newsletter (Spring 2004) (Author); “Current Topics in Fair Labor Standards Act Litigation,” Conference, Association of the Bar of the City of New York (2003, Chair & Panelist); “Workforce Without Borders,” ABA Section of Labor & Employment Law, EEOC 2003 Midwinter Meeting (Moderator). Member: Board Member, National Employment Lawyers’ Association/New York; American Bar Association, Sections of Labor and Employment Law, EEO Committee (Plaintiffs’ Vice Chair).
BRUCE W. LEPPLA, born Oakland, California, September 6, 1949. Admitted to practice in California, 1976; U.S. District Court, Northern District of California; U.S. District Court, Central District of California, 2007; U.S. Court of Appeals, Ninth Circuit, 1976; New York, 1978. Education: Boalt Hall School of Law, University of California (J.D., 1975); M.G. Reade Scholarship Prize, Boalt Hall School of Law; University of California, Berkeley (M.A., Economics, with honors, 1974); Yale University (B.A., magna cum laude, Highest Honors in Economics, 1971). Employment: California Bankers Insurance Services Inc. (CEO, President

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and General Counsel), 1998-2000; Redwood Bank (CEO, President and General Counsel), 198698; Lasky, Haas, Cohler & Munter, 1980-82; Brobeck, Phleger & Harrison, 1980; Davis, Polk & Wardwell, 1976-80. Teaching Positions: Lecturer, California Bankers Association General Counsel Seminars, Lending Documentation, Financial Institutions Litigation and similar topics, 1994-97; Lecturer, University of California at Berkeley, Haas School of Business, Real Estate Law and Finance, 1993-96. Publications: “Stay in the Class or Opt-Out? Institutional Investors Are Increasingly Opting-Out of Securities Class Litigation,” Securities Litigation Report, Vol. 3 No. 8, September 2006, West Legalworks; reprinted by permission of the author in Wall Street Lawyer, October 2006, Vol. 10. No. 10, West Legalworks; “Selected Waiver: Recent Developments in the Ninth Circuit and California", Part 1; Elizabeth J. Cabraser, Joy A. Kruse and Bruce W. Leppla; Securities Litigation Report, May 2005, vol. 1, no.9. pp. 1, 3 – 7; “Selected Waiver: Recent Developments in the Ninth Circuit and California", Part 2; Elizabeth J. Cabraser, Joy A. Kruse and Bruce W. Leppla; Securities Litigation Report, June 2005, vol. 1, no. 10. pp. 1, 3 – 9; Author or co-author of 11 different U.S. and International patents in electronic commerce and commercial product design, including “A Method for Storing and Retrieving Digital Data Transmissions,” United States Patent No. 5,659,746, issued August 19, 1997; Author, “Securities Powers for Community Banks,” California Bankers Association Legislative Journal (Nov. 1987). Member: Wall Street Lawyer, a Thompson West publication (Editorial Board); State Bar of California; State Bar of New York; Yale University Alumni Board of Directors (Director, 2001-present); California Bankers Association (Director, 1996-98); California State Small Business Development Board, 1989-1997; University of California at Berkeley, Boalt Hall Alumni Board of Directors, 1993-96; Leadership Council, San Francisco Chamber of Commerce, 1990-1992; Community Reinvestment Institute (Founding Director, 1989-1990).
SCOTT P. NEALEY, born Champaign, Illinois, July 28, 1966. Admitted to practice in California, 1997; U.S. District Court, Northern District of California, 1998; U.S. District Court, Eastern District of California, 1998; U.S. Court of Appeals, Ninth Circuit, 1999; U.S. District Court, Central District of California, 2000. Education: Boalt Hall School of Law, University of California (J.D., 1996); University of California at Berkeley (B.A., 1988). Employment: Law Clerk to Chief Justice Joseph R. Weisberger, Supreme Court of Rhode Island, 1996-97. Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003). Member: Bar Association of San Francisco; State Bar of California.
ELIZABETH A. ALEXANDER, born Morristown, Tennessee, October 4, 1971. Admitted to practice in Tennessee, 1998; U.S. Court of Appeals, Sixth Circuit, 2001; U.S. District Court, Middle District of Tennessee, 2000; U.S. District Court, Eastern District of Tennessee, 2002. Education: Vanderbilt University Law School (J.D., 1998); President, Criminal Law Association; Moot Court Board Member; Vanderbilt University Honor Committee; Hollins College (B.A., 1993). Honors & Awards: “Lawdragon 500 New Stars” and "Lawdragon 3000 Leading Plaintiffs' Lawyers in America," Lawdragon magazine, 2006-2007. Publications: ABA Survey of State Class Action Law (2003-2007), Tennessee section; “Consumer Class Actions Against Financial Institutions,” Lorman Education Services, July 2004. Prior Employment: Associate, Dodson, Parker, Dinkins & Behm (2002-03); Associate, Wyatt, Tarrant & Combs (2000-2002); Law Clerk, Honorable Thomas A. Higgins, U.S. District Court for the Middle District of Tennessee (1998-2000). Member: State Bar of Tennessee;

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Tennessee Bar Association; Nashville Bar Association (Board of Directors, Young Lawyers Division); American Bar Association; Lawyers’ Association for Women (2003-2005); American Bar Association Labor and Employment Law Section Equal Employment Opportunity Committee, Co-Chair, Basics Committee (2005-2006); Chair of Internal Marketing and Mentoring Committee (2006-2007); National Employment Lawyers’ Association.
DANIEL E. BARENBAUM, born Boston, Massachusetts. Admitted to practice in California, 2000; U.S. Court of Appeals for the Ninth Circuit, U.S.; District Court for the Northern District of California; U.S. District Court for the Central District of California; U.S. District Court for the Southern District of California. Education: Emory School of Law (J.D., 2000); Goizueta Business School, Emory University (M.B.A., 2000, Award: Most Outstanding Academic Accomplishment); Tufts University (B.A., 1994). Publications: “Delineating Covered Class Actions Under SLUSA,” Securities Litigation Report, December-January 2005; Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor-in-chief, 2003); Co-Author, Class Certification of Medical Monitoring Claims in Mass Tort Product Liability Litigation (ALI-ABA Course of Study, 1999). Member: State Bar of California; Bar Association of San Francisco.
DANIEL P. CHIPLOCK, born Albany, New York. Admitted to practice in New York, 2001; U.S. District Court, Southern District of New York, 2001; U.S. District Court, Eastern District of New York, 2001. Education: Stanford Law School (J.D., 2000); Article Review Board, Stanford Environmental Law Journal; Recipient, Keck Award for Public Service; Columbia University (B.A., summa cum laude, 1994); Phi Beta Kappa. Member: State Bar of New York; American Association for Justice; Fight for Justice Campaign; Public Justice.
MARK P. CHALOS, born New York, New York, September 3, 1973. Admitted to practice in Tennessee, 1998; U.S. Court of Appeals, Sixth Circuit, 1998; U.S. District Court, Middle District of Tennessee, 2000; U.S. District Court, Western District of Tennessee, 2002; U.S. District Court, Eastern District of Tennessee, 2006; U.S. District Court, Northern District of Florida, 2006; U.S. District Court, Northern District of California, 2007. Education: Emory University School of Law (J.D., 1998); Dean’s List; Award for Highest Grade, Admiralty Law; Research Editor, Emory International Law Review; Phi Delta Phi Legal Fraternity; Vanderbilt University (B.A., 1995). Publications, Presentations, Appointments: “The End of Meaningful Punitive Damages,” Nashville Bar Journal, November 2001; “Is Civility Dead?” Nashville Bar Journal, October 2003; “The FCC: The Constitution, Censorship, and a Celebrity Breast,” Nashville Bar Journal, April 2005. Member: American Bar Association; Fight for Justice Campaign; Tennessee Bar Association; Board of Directors, Tennessee Trial Lawyers Association; Nashville Bar Association; Past-Chair, ABA YLD Criminal & Juvenile Justice Committee; American Bar Association Tort Trial and Insurance Practice Section Professionalism Committee YLD liaison; Board of Directors, Nashville Bar Association YLD; Chair, Nashville Bar Association YLD Continuing Legal Education; Nashville Bar Journal, Editorial Board; Member, Harry Phillips American Inn of Court (2002-2004); Grant Review Panelist, Metropolitan Nashville Arts Commission; Founding Member, Young Professionals Program, Frist Center for the Visual Arts; President, Kappa Chapter of Kappa Sigma Fraternity Alumni Association.

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NICHOLAS R. DIAMAND, born London, England. Admitted to practice in New York, 2003; U.S. District Court, Southern, Eastern, Northern, and Western Districts of New York; US. Court of Appeals, Seventh Circuit. Education: Columbia University School of Law (LL.M., Stone Scholar, 2002); College of Law, London, England (C.P.E.; L.P.C.; Commendation, 1997); Columbia University (B.A., magna cum laude, 1992). Employment: Solicitor, Herbert Smith, London (1999-2001); Law Clerk to the Honorable Edward R. Korman, Chief Judge, U.S. District Court, Eastern District of New York (2002-03). Publications/Presentations: Contributing Author, California Class Actions Practice and Procedure (Elizabeth J. Cabraser, Editor-in-Chief), 2006; Panelist, “Obstacles to Access to Justice in Pharmaceutical Cases,” Pharmaceutical Regulation and Product Liability, British Institute of International and Comparative Law, April 21, 2006; Panelist, “Pre-Trial Discovery in the United States,” Union Internationale des Avocats, Winter Seminar, February 2006; Columnist, The New York Employee Advocate, NELA/NY, February 2006-present. Member: New York City Bar Association, Trial Lawyers for Public Justice, American Society of International Law, Law Society of England and Wales.
OF COUNSEL
ROBERT L. LIEFF, born Bridgeport, Connecticut, September 29, 1936. Admitted to practice in California, 1966; U.S. District Court, Northern District of California and U.S. Court of Appeals, Ninth Circuit, 1969; U.S. Supreme Court, 1969; U.S. Court of Appeals, Seventh Circuit, 1972; U.S. Tax Court, 1974; U.S. District Court, District of Hawaii, 1986. Education: Columbia University (M.B.A., 1962; J.D., 1962); Cornell University; University of Bridgeport (B.A., 1958). Member, Columbia Law School Dean’s Council; Member, Columbia Law School Board of Visitors (1992-present); Member, Columbia Law School Center on Corporate Governance Advisory Board (2004). Member: Bar Association of San Francisco; State Bar of California (Member: Committee on Rules of Court, 1971-74; Special Committee on Multiple Litigation and Class Actions, 1972-73); American Bar Association (Section on Corporation, Banking and Business Law); Lawyers Club of San Francisco; San Francisco Trial Lawyers Association; California Trial Lawyers Association; Consumer Attorneys of California; Fight for Justice Campaign. Awards and Honors: “Northern California Super Lawyers,” Law & Politics, 2005 - 2007.
MORRIS A. RATNER, born San Jose, California, November 13, 1966. Admitted to practice in California, 1991; District of Columbia, 1999; New York, 2000; U.S. District Court, Northern, Central and Southern Districts of California; and U.S. Court of Appeals, Second, Third, Sixth and Ninth Circuits. Education: Harvard University (J.D., 1991); Stanford University (B.A., with distinction, 1988); Phi Beta Kappa. Publications: Contributing Author, California Class Actions Practice and Procedures (Elizabeth J. Cabraser editor in chief, 2003); “Factors Impacting the Selection and Positioning of Human Rights Class Actions in United States Courts: A Practical Overview,” 58 New York University Annual Survey of American Law 623 (2003); “The Settlement of Nazi-Era Litigation Through the Executive and Judicial Branches,” 20 Berkeley Journal of International Law 212 (No. 1, March 2002). Member: State Bar of California; State Bar of New York; Bar of the District of Columbia; Bar Association of San Francisco.

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WILLIAM B. HIRSCH, born Los Angeles, California, May 19, 1951. Admitted to practice in California, 1983; U.S. District Court, Northern District of California; U.S. District Court, District of Hawaii, 1991. Education: Harvard University ( J.D., 1983); Princeton University (M.A., 1975); University of California at Santa Cruz (B.A., with highest honors, 1973). Awards and Honors: Trial Lawyer of the Year, Trial Lawyers for Public Justice, 1995. Publications: "Justice Delayed: Seven Years Later & No End In Sight," in The Exxon Valdez Disaster: Readings on a Modern Social Problem (Kendall & Hunt Pub. Co. 1996). Member: Bar Association of San Francisco; State Bar of California; Trial Lawyers for Public Justice; The Association of Trial Lawyers of America; ACLU of Northern California (Steering Committee, 1993-94).
ASSOCIATES
REBECCA BEDWELL-COLL, born Ridgewood, New Jersey, May 27, 1971. Admitted to practice in California, 1996; U.S. District Court, Northern District of California, 1996; U.S. District Court, Central District of California, 1996; District of Columbia, 2007. Education: Boalt Hall School of Law, University of California, Berkeley, (J.D., 1996); University of Michigan, Ann Arbor, (B.A. 1993).
NANCY CHUNG, born Los Angeles, February 21, 1972. Admitted to practice in California, 2003; U.S. Court of Appeals for the Ninth Circuit, 2003; U.S. District Court, Northern District of California, 2007. Education: Hasting College of Law (J.D., 2002); University of California, Santa Cruz (B.A., Language Studies, 1995). Prior Employment: International Labor Organization, Geneva, Switzerland (2000-2001); Peace Corps Volunteer, Romania (1995-1997). Member: Bar Association of San Francisco. Languages: French, Romanian and Korean.
CHRISTOPHER E. COLEMAN, born Mobile, Alabama, March 30, 1971. Admitted to practice in Georgia, 2005. Education: Northwestern University School of Law (J.D., cum laude, 2003); Order of the Coif; Associate Editor, Northwestern University Law Review (2002-2003); John Paul Stevens Public Interest Fellowship (2002); Northwestern University (M.A., History, 2000); University of Virginia (M.A., English, 1995); Vanderbilt University (B.A., magna cum laude, 1993). Publications & Presentations: Contributing Author, “California Class Actions Practice and Procedures” (Elizabeth J. Cabraser, Editor-in-Chief, 2006); “Decades-Old Murder Case Needs Review,” Op-Ed, Chicago Sun-Times, February 2, 2003; Co-Author, “Social Movements and Social Change Litigation: Synergy in the Montgomery Bus Protest,” Law and Social Inquiry (Fall 2005); “Fingerprints and False Confessions: The William Heirens Case,” Conference Presentation, Conference on False Confessions, Center on Wrongful Convictions, Northwestern University, Chicago, Illinois, March 2002. Prior Employment: Judicial Clerkship, Honorable Joan Humphrey Lefkow, U.S. District Court, Northern District of Illinois, 2003-2005. Leadership Council for Metropolitan Open Communities (Chicago, Illinois, 2002); Central Alabama Fair Housing Center (Montgomery, Alabama, 1997-1998). Member: American Bar Association; Tennessee Bar Association; Tennessee Trial Lawyers Association; Lawyers Association for Women; Nashville Bar Association YLD (Board of Directors); American Constitution Society, Nashville Lawyers' Chapter (Board of Directors).

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NIMISH R. DESAI, born Coventry, England, June 25, 1980. Admitted to practice in California, 2006; US District Court; Northern District of California, 2007. Education: Boalt Hall School of Law, University of California, Berkeley (J.D., 2006), Finalist and Best Brief, McBaine Moot Court Competition (2006), Moot Court Best Brief Award (2004); University of Texas, Austin, (B.S. & B.A., High Honors, 2002). Prior Employment: Extern, Sierra Club Environmental Law Program, 2004; Researcher, Public Citizen, 2003; Center for Energy and Environmental Resources, 2001-2002. Publications: “American Chemistry Council v. Johnson: Community Right to Know, But About What? D.C. Circuit Takes Restrictive View of EPCRA,” 33 Ecology L.Q. 583 (Winter 2006); “Lessons Learned and Unlearned: A Case Study of Medical Malpractice Award Caps in Texas,” The Subcontinental, (Winter 2004, Vol. 1, Issue 4, pp. 8187); “Separation of Fine Particulate Matter Emitted from Gasoline and Diesel Vehicles Using Chemical Mass Balancing Techniques”, Environmental Science Technology, (2003; 37(17) pp. 3904-3909). Member: State Bar of California; Bar Association of San Francisco; Consumer Attorneys of California. Languages: Gujarati (conversational).
ALLISON S. ELGART, born Manhasset, New York, January 27, 1978. Admitted to practice in California, 2006; New York, 2007. Education: Harvard Law School (J.D., 2005), Editor-in-Chief, Harvard Civil Rights-Civil Liberties Law Review, Vol. 40; Student Attorney, Harvard Legal Aid Bureau, (2003-2005); Brown University (B.A., magna cum laude 2000). Prior Employment: Law Clerk to Judge Robert P. Patterson, Jr., U.S. District Court, Southern District of N.Y., 2005-2006; Health Advocacy Fellow, Medicare Rights Center, (2000-2002). Publications: “Hamdi v. Rumsfeld: Due Process Requires That Detainees Receive Notice and Opportunity to Contest Basis for Detention,” 40 Harv. C.R-C.L. L. Rev. 239 (2005). Member: American Bar Association; Bar Association of San Francisco; Consumer Attorneys of California; State Bar of California.
HEATHER A. FOSTER, born Washington, D.C., October 2, 1970. Admitted to practice in California in 1996; U.S. District Court, Northern District of California, 1996. Education: University of the Pacific, McGeorge School of Law (J.D., 1996); Moot Court Honors Board, 1995-96; Trial Advocacy Honors 1996; Boston College (B.A., 1992). Employment: Adjunct Professor, San Francisco State University – College of Extended Learning, Paralegal and LNC program (Fall 2000 – Spring 2001). Publications: Co-Author, Class Certification of Medical Monitoring Claims in Mass Tort Product Liability Litigation (ALI-ABA Course of Study, 1999). Member: American Association for Justice; American Bar Association (Litigation Section); Association of Legal Administrators; Bar Association of San Francisco; Legal Assistant Management Association; Phi Alpha Delta; State Bar of California (Volunteer Legal Services Program: Liaison for the Summer Associate Public Service Program – Homeless Advocacy Program, 2002; Teachers in the Schools Program, 2002; Pro Bono Attorney – Family Law Clinic, 1999); Trail Lawyers for Public Justice.
DAVID P. GOLD, born New York, New York, December 29, 1967. Admitted to practice in New York, 2004; District of Colorado, 2006; Court of Appeals, Second Circuit, 2007. Education: Columbia Law School (J.D., 2002), James Kent Scholar, Articles Editor, Columbia Law Review; University of Pennsylvania (Ph.D., 2002), William Penn Fellow; Brown University (A.B., magna cum laude, 1990). Employment: Law Clerk to Honorable Stephen Reinhardt, U.S. Court of Appeals, Ninth Circuit, 2002-03. Publications: “Wildlife Protection and Public Welfare Doctrine,” 27 Colum. J. Envtl. L. 633 (2002); “A Hitherto Unknown Sanskrit Work Concerning

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Mādhava’s Power Series for Sine and Cosine,” 42 Historia Scientiarum 49 (1991). Member: State Bar of New York, Southern District of New York, Eastern District of New York; District of Colorado.
JENNIFER GROSS, born Sleepy Hollow, New York, July 1, 1969. Admitted to practice in California, 1994; U.S. District Court, Central District of California, 1994. Education: RAND Graduate School (M. Phil., 1997); University of Southern California (J.D., 1994); Emory University (B.A., 1991). Publications: Co-Author, Intelligence, Surveillance, and Reconnaissance Force Mix Study: Final Report (RAND 2003); Co-Author, Asbestos Litigation Costs and Compensation: An Interim Report (RAND 2002); Co-Author, Asbestos Litigation in the U.S.: A New Look at an Old Issue (RAND 2001); Co-Author, Class Action Dilemmas: Pursuing Public Goals for Private Gain (RAND, 2000); Co-Author, Potential Vulnerabilities of U.S. Air Force Information Systems (RAND, 1999); Co-Author, “Preliminary Results of the RAND Study of Class Action Litigation,” (RAND, 1997). Member: State Bar of California.
DANIEL M. HUTCHINSON, born Oakland, California, May 25, 1977. Admitted to practice in California, 2005; U.S. Court of Appeals for the Ninth Circuit, 2005; U.S. District Court, Northern District of California, 2005. Education: Boalt Hall School of Law, University of California, Berkeley (J.D., 2005), Senior Articles Editor, African-American Law & Policy Report, Prosser Prizes in Constitutional Law and Employment Law; University of California, Berkeley Extension (Multiple Subject Teaching Credential, 2002); Brown University (B.A., 1999), Mellon Minority Fellowship (1997-1999). Employment: Judicial Extern to the Hon. Martin J. Jenkins, U.S. District Court, Northern District of California, 2004; Law Clerk, Lewis & Feinberg, P.C., 2003-2004; Teacher, Oakland Unified School District, 1999-2002. Member: State Bar of California; National Bar Association.
ANDREW S. KINGSDALE, born Boston, Massachusetts, November 4, 1974. Admitted to practice in Massachusetts, 2007; New York, 2007. Education: Temple University School of Law (J.D. 2006); Temple Journal of Science Technology and Environmental Law; Dartmouth College (B.A. 1996).
KENT L. KLAUDT, born Jamestown, North Dakota, September 6, 1968. Admitted to practice in California, 1996; U.S. District Court, Northern District of California, 1997; U.S. District Court, Eastern District of California, 1998; U.S. District Court, Central District of California, 2007. Education: University of Minnesota Law School (J.D., 1996); Outside Articles Editor, Journal of Law & Inequality: A Journal of Theory & Practice; National Association of Public Interest Law (Summer Fellowship, 1995); University of Minnesota (B.A., 1991). Prior Employment: BlueDog, Olson & Small, PLLP, 1995-96; Cartwright & Alexander, LLP, 1996-2001; The Cartwright Law Firm, Inc., 2001-2004. Publications: “Hungary After the Revolution: Privatization, Economic Ideology, and the False Promise of the Free Market,” 13 Law & Inequality: A Journal of Theory & Practice 301. Member: American Trial Lawyers Association; Consumer Attorneys of California; Trial Lawyers for Public Justice; San Francisco Trial Lawyers Association; National Lawyers Guild.
KRISTEN E. LAW, born Parkersburg, West Virginia, April 3, 1974. Admitted to practice in California, 2002. Education: Boalt Hall School of Law, University of California, Berkeley (J.D. 2002); Executive Editor, Ecology Law Quarterly; Moot Court Advocacy Award;

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Moot Court Board; Hopi Appellate Clinic; Ohio Wesleyan University (B.A., summa cum laude, 1995); Presidential Scholar. Member: Phi Beta Kappa; State Bar of California.
SHARON M. LEE, born Richmond, B.C., Canada, January 19, 1975. Admitted to practice in New York 2002; U.S. District Court, Southern District of New York, 2003; U.S. District Court, Eastern District of New York, 2003; Washington State, 2005. Education: St. John’s University School of Law, (J.D. 2001); New York International Law Review, Notes & Comments Editor, 2000-2001; St. John’s University, (M.A. 1998); St. John’s University, (B.A. 1997). Employment: Milberg Weiss & Bershad, LLP, 2003-2007. Member: American Bar Association; Washington State Bar Association.
ANNIKA K. MARTIN, born New York, New York, September 13, 1979. Admitted to practice in New York, 2005; U.S. District Court, Southern District of New York, 2005. Education: Law Center, University of Southern California (J.D., 2004); Review of Law & Women’s Studies; Jessup Moot Court; Medill School of Journalism, Northwestern University (B.S.J., 2001); Stockholm University (Political Science, 1999). Publications: “Stick a Toothbrush Down Your Throat: An Analysis of the Potential Liability of Pro-Eating Disorder Websites,” Texas Journal of Women & the Law (Volume 14 Issue 2, Spring 2005); “Welcome to Law School,” monthly column on www.vault.com (2001-2004). Awards and Honors: 2005 Wiley W. Manuel Award for Pro Bono Legal Services awarded by the State Bar of California for voluntary provision of legal services to the poor. Member: New York State Bar Association (General Practice Section and Young Lawyers Section); Swedish American Bar Association; American Association for Justice; New York State Trial Lawyers Association; New York County Lawyer’s Association. Languages: Swedish (fluent); French (DFA1-certified in Business French); Spanish (conversational).
SHARMILA L. MURTHY, Smithtown, New York, February 4, 1977. Admitted to practice in New York, 2005; Tennessee, 2004; U.S. District Court, Middle District of Tennessee, 2004; U.S. Court of Appeals for the Sixth Circuit (2004). Education: Harvard Law School, (J.D., cum luade 2003); Harvard Legal Aid Bureau, (2001-2003); South Asian Law Students Association, (2000-2003); International Law Journal, (2000); Reginald Lewis Summer Fellowship, (2001); Kennedy School of Government, Harvard University, (M.P.A., 2003); Cornell University, (B.S. with honors 1997). Awards: Tennessee Alliance for Legal Services New Advocate of the Year, 2006; Nashville Bar Journal Article of the Year, 2006; Skadden Fellowship, 2004; Betty Allebach Award for Public Service at Harvard Legal Aid Bureau, 2003; Kennedy Scholarship at JFK School of Government, 1999; U.S. Fulbright Award, 1998-1999. Publications: “Lost in Translation?” Interpreters in the Courts,” The Nashville Bar Journal (2006 ); "SEWA's Rural Savings and Credit Program in Gujarat, India," Kennedy School Review: Student Perspectives 2000. Employment: Law clerk to Judge Martha Craig Daughtrey, U.S. Court of Appeals for the Sixth Circuit, 2003-2004. Skadden Fellow and Staff Attorney at Legal Aid Society of Middle Tennessee and the Cumberlands, 2004 – 2007. Member: Nashville Bar Association; Tennessee Bar Association; Lawyers Association for Women; Inn of Court; American Constitution Society; Tennessee Immigrants and Refugee Rights Coalition; Harvard Legal Aid Bureau Alumni Advisory Board.
JAHAN C. SAGAFI, born Philadelphia, Pennsylvania, December 26, 1971. Admitted to practice in California, 2003. Education: Harvard Law School (J.D., 2001); Senior Editor,

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Harvard Civil Rights-Civil Liberties Law Review, (1999-2001); President, Board of Student Advisers; Harvard College (B.A., magna cum laude, 1994). Employment: Law Clerk to Judge William W. Schwarzer, U.S. District Court, Northern District of California, 2001-02. Member: State Bar of California (Litigation Section Executive Committee); National Employment Lawyers’ Association; Association of Trial Lawyers of America; Consumer Attorneys of California; American Bar Association; Bar Association of San Francisco; Fight for Justice Campaign.
DANIEL E. SELTZ, born Alexandria, Virginia, April 24, 1974. Admitted to practice in New York, 2004; U.S. District Court, Southern District of New York; Eastern District of New York. Education: New York University School of Law (J.D., 2003); Review of Law and Social Change, Managing Editor; Hiroshima University (Fulbright Fellow, 1997-98); Brown University (B.A., magna cum laude, Phi Beta Kappa, 1997). Employment: Law Clerk to Honorable John T. Nixon, U.S. District Court, Middle District of Tennessee, 2003-04. Publications: “Remembering the War and the Atomic Bombs: New Museums, New Approaches,” in Memory and the Impact of Political Transformation in Public Space (Duke University Press, 2004), originally published in Radical History Review, Vol. 75 (1998); “Issue Advocacy in the 1998 Congressional Elections,” with Jonathan S. Krasno (Urban Institute, 2001); Buying Time: Television Advertising in the 1998 Congressional Elections, with Jonathan S. Krasno (Brennan Center for Justice, 2000); “Going Negative,” in Playing Hardball, with Kenneth Goldstein, Jonathan S. Krasno and Lee Bradford (Prentice-Hall, 2000). Member: American Association for Justice; State Bar of New York.
JENNA M. WHITMAN, born Palo Alto, California, December 29, 1972. Admitted to practice in California, 2001; U.S. District Court, Northern District of California, 2002; U.S. Court of Appeals, Ninth Circuit, 2002. Education: Georgetown University Law Center (J.D., 2001); Journal of Gender and the Law, Symposium Committee; Yale College (B.A., with distinction in American Studies, 1995). Employment: Law Clerk to U.S. Attorney’s Office, Economic Crimes Unit (2000-2001); Howard, Rice, Nemerovski, Canady, Falk & Rabin, P.C. (2001-2004). Member: American Bar Association; Bar Association of San Francisco; California Bar Association; Bay Area Lawyers for Individual Freedom; Board Member, AIDS Legal Referral Panel.
BARBRA L. WILLIAMS, born Bellflower, California, July 10, 1974. Admitted to practice in California, 2007; U.S. District Court, Northern District of California, 2007; U.S. District Court, Central District of California, 2007; U.S. Court of Appeals, Ninth Circuit, 2007. Education: University of California, Hastings College of the Law, (J.D., 2006, Concentration in Civil Litigation); Notes Editor, Hastings Race & Poverty Law Journal; UC Hastings Civil Justice Clinic, Individual Wage & Hour Representation; UC Hastings Admissions Policy Committee; Teaching Assistant, Legal Writing & Research; National Black Law Students Association (Sub-Regional Director); Hastings Black Law Students Association (Co-President); University of California, Irvine (B.A., 1997). Member: State Bar of California; American Bar Association (Labor & Employment Section); National Bar Association; California Association of Black Lawyers; Bar Association of San Francisco; Charles Houston Bar Association.
HEATHER H. WONG, born San Diego, California, July 5, 1978. Admitted to practice in California, 2005; U.S. Court of Appeals, Ninth Circuit, 2005; U.S. District Court,

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Central District of California, 2005; U.S. District Court, Northern District of California, 2006; U.S. District Court, District of Colorado, 2006. Education: University of San Francisco (J.D. & M.B.A., 2005); Beta Gamma Sigma Honor Society (2005); Technical Editor, Maritime Law Journal; University of California, Berkeley (B.A., 2000). Member: State Bar of California; Bar Association of San Francisco; American Bar Association; Consumer Attorneys of California; Association of Business Trial Lawyers.
Notice on the Firm’s AV Rating: AV is a registered certification mark of Reed Elsevier Properties, Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review process that rates lawyers. Ratings reflect the confidential opinions of members of the Bar and the Judiciary. Martindale-Hubbell Ratings fall into two categories – legal ability and general ethical standards.

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EXHIBIT B

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 118 of 163

Kelly M. Dermody (State Bar No. 171716) 1 Heather H. Wong (State Bar No. 238546)
LIEFF, CABRASER, HEIMANN & 2 BERNSTEIN, LLP
275 Battery Street, 30th Floor 3 San Francisco, CA 94111-3339
Telephone: (415) 956-1000 4 Facsimile: (415) 956-1008
email: kdermody@lchb.com 5 email: hwong@lchb.com

6 Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN &
7 BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650
8 Nashville, TN 37219-2423 Telephone: (615) 313-9000
9 Facsimile: (615) 313-9965 email: ealexander@lchb.com
10

11 Attorneys for the Plaintiffs
12

13

UNITED STATES DISTRICT COURT

14

NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO / OAKLAND DIVISION

15
DAISY JAFFE, DENISE WILLIAMS, and 16 MARGARET BENAY CURTIS-BAUER,
on behalf of themselves and all others 17 similarly situated,

18

Plaintiffs,

19

v.

Case No. C-06-3903 TEH
DECLARATION OF ADAM T. KLEIN IN SUPPORT OF MOTION FOR ORDER GRANTING PRELIMINARY APPROVAL OF THE PROPOSED SETTLEMENT AGREEMENT

20 MORGAN STANLEY & CO. INCORPORATED, f/k/a MORGAN
21 STANLEY DW INC.

22 Defendant.
23

24

25

26

I, Adam T. Klein, declare:

27

1. I am a partner in the firm of Outten & Golden LLP (“O&G”), co-counsel for the

28 Plaintiffs in the above-captioned proposed class action. I make these statements based on

733709.1

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Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 119 of 163

personal knowledge and would so testify if called as a witness at trial. 1
2. This Declaration is submitted in support of Plaintiffs’ Motion for Preliminary 2
Approval of Class Action Settlement. 3

4

BACKGROUND AND EXPERIENCE OF CO-LEAD COUNSEL

5

3. I received my undergraduate degree from the School of Industrial and Labor

6 Relations at Cornell University in 1987, and my law degree from Hofstra University in 1990. I

7 was admitted to the New York bar in 1991.

8

4. My legal practice is limited to the prosecution of class action and impact litigation

9 of employment discrimination and wage and hour claims. I presently serve as lead or co-lead

10 plaintiffs' counsel in a variety of statutory-discrimination class actions in addition to this action,

11 including cases against Smith Barney and Gristede’s; I was co-lead plaintiffs' class counsel in a

12 now settled "glass ceiling" gender discrimination class action against MetLife, based on

13 discrimination in promotions and compensation. This list is not exhaustive. I also serve as lead

14 or co-lead plaintiffs’ counsel on a number of wage and hour class and collective actions.

15

5. I am a member of the National Employment Lawyers Association (NELA), served

16 on the Executive Board of its New York Affiliate (NELA/NY) from 2000 to 2006, and am the

17 former co-chair of the Class Action Committee of NELA. I served on the Executive Board of the

18 Employee Rights Section of the American Trial Lawyers Association. I am a member of the

19 American Bar Association, where I served as the Plaintiffs' Co-Chair of the Committee on

20 Technology and Federal Law Clerks Training Program, and am a member of the Committee on

21 Employee Rights and Responsibilities of the Section of Labor and Employment Law and the

22 Class Action and Derivative Suits Committee of the Section of Litigation. I am the plaintiffs’ co-

23 chair of the largest Committee within the ABA’s Labor and Employment Section – the Equal

24 Employment Opportunity Committee. I am also a member of the Federal Bar Council, a Fellow

25 of the American Bar Foundation, and a member of the Advisory Board of the Labor and

26 Employment Law Program of Cornell University’s ILR School. I am the chair of Outten &

27 Golden’s class action practice group.

28

6.

733709.1

I am admitted in New York and in the federal Second, Ninth, and Eleventh - 2 -

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 120 of 163

Circuits and the Southern, Eastern, and Western Districts of New York. 1
7. I have written articles for a variety of legal publications and have had articles 2
printed and distributed in several publications, including The Employee Rights and Employment 3
Policy Journal and Employee Rights Quarterly. I have also prepared materials for numerous 4
American Bar Association and National Employment Lawyers Association (NELA) programs. In 5
addition to authoring articles on a variety of employment and litigation-related subjects, I have 6
lectured on employment law matters at meetings, conferences, and MCLE programs sponsored by 7
the American Bar Association, the National Employment Lawyers Association, NELA New 8
York, the New York County Lawyers’ Association, the New York City Bar Association, the 9
American Conference Institute, Cornell University’s Labor and Employment Law Program, the 10
Human Resources Executive Conference, the Law Education Institute, the Practicing Law 11
Institute, the American Inns of Court, Georgetown University Law Center, New York University 12
School of Law, the Federal Judicial Center, the Federal Bar Council, the Training Program for 13
Regional Solicitor's Office of the U.S. Department of Labor, Snowmass National CLE 14
Conference, the NAACP Legal Defense and Education Fund, Inc., and at the Second Circuit Staff 15
Attorney Training Seminar. I have also testified before the Equal Employment Opportunity 16
Commission. 17
8. O&G has the resources and ability to prosecute this case and will continue to 18
properly represent the interests of the class. 19
9. Attached to this Declaration as Exhibit A is a O&G’s firm resume. 20
I declare, under penalty of perjury, under the laws of the State of New York that the 21
foregoing is true and correct. Executed this 22th day of October, 2007 at New York, New York. 22

23

____/s/ Adam T. Klein_________________

ADAM T. KLEIN 24

25

26

27

28
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EXHIBIT A TO EXHIBIT B

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 122 of 163

3 Park Avenue 29th Floor New York, NY 10016 212-245-1000

Four Landmark Square Suite 201 Stamford, CT 06901 203-363-7888
www.outtengolden.com

OUTTEN & GOLDEN LLP is one of the preeminent law firms representing employees -- “Advocates for Workplace Fairness.” The firm’s credo is “Excellence and Integrity Above All Else.”
O&G focuses on advising and representing individuals in employment, partnership, and related matters. The firm advises individuals on employment and severance agreements; it also handles compensation and benefits issues, including bonuses, commissions, stock and option awards, and family/medical leaves. The firm represents employees with a wide variety of claims, including claims of discrimination and harassment based on sex, sexual orientation, gender identity and expression, race, disability, national origin, religion, and age, as well as retaliation, whistleblower, and contract claims. The firm also handles class and collective wage-andhour and discrimination cases.
O&G represents clients in administrative proceedings (such as EEOC and Department of Labor), arbitrations (e.g., NYSE, NASD, and American Arbitration Association), and cases in federal and state trial and appellate courts. Before beginning proceedings, the firm often negotiates with employer representatives; it also helps clients help themselves by developing and implementing negotiation tactics and strategies. O&G has substantial experience mediating employment disputes.
The firm’s seven Practice Groups are Executives & Professionals, Securities & Financial Services Industry, Sexual Harassment, Disability & Family Responsibilities, LGBT Workplace Rights, Discrimination & Retaliation, and Class Actions.

Wayne N. Outten, O&G’s managing partner, has represented thousands of employees since 1979. He was named one of the top lawyers in New York by SuperLawyers, one of the “500 Leading Plaintiffs’ Lawyers in America” and the “500 Leading Lawyers in America” by Lawdragon, one of “The Best Lawyers in New York” by New York Magazine, one of the “Nation’s Best Litigators in Employment Law” by the National Law Journal, and one of the world’s Leading Labor & Employment Lawyers by Euromoney Publications, and has been listed in The Best Lawyers in America since 1993. He co-authored The Rights of Employees and Union Members and has written dozens of articles and chapters and given hundreds of presentations on employment law. He was a founding director of the National Employment Lawyers Association, founder and president of its New York affiliate (16 years), and co-founder of Workplace Fairness. He served on the founding Board of the College of Labor & Employment Lawyers, serves on the Council of the ABA Labor & Employment Law Section, and has held many other bar positions.
Anne Golden has practiced law since 1979 and has represented employees in trials, appeals, mediations, arbitrations, and negotiations since 1985 in every aspect of employment law. She has appeared as a speaker or panelist on many employment law programs, prepares a periodic digest of employment cases, and co-hosts a monthly seminar for NELA/NY members. Several of her cases have established important principles in the field of employment law. She is a member of the Executive Board and an officer of the National Employment Lawyers Association/New York. She has been listed in "The Best Lawyers in New York" by New York Magazine and The Best Lawyers in America, and has been named in SuperLawyers.
Adam T. Klein has represented employees in a full range of employment cases since 1991. A noted authority on class action litigation, he has written numerous articles and is a frequent speaker on class-based statutory discrimination and wage and hour claims. He is a past officer of the National Employment Lawyers

Case 3:06-cv-03903-TEH Document 88 Filed 10/22/2007 Page 123 of 163
Association/New York and co-chairs several committees of the American Bar Association’s Labor & Employment Law Section.
Laurence S. Moy has been practicing law since 1985 and is Co-Chair of the firm’s Securities and Financial Services Industry practice group. He has extensive experience in arbitration before the NASD and NYSE, as well as trials and other litigation before federal and state courts concerning employment and commercial disputes. He is the author of numerous publications, including "Preparing for Arbitration: A Plaintiff Lawyer’s View" in the book How ADR Works. He has been listed in The Best Lawyers in America and has been named in SuperLawyers.
Gary Phelan, head of O&G’s Connecticut office, practices in Connecticut and New York. He has represented employees since 1989 in all aspects of employment law, including discrimination, wage and hour, and health benefits. He was named one of The Best Lawyers in America as well as a SuperLawyer and co-authored a leading treatise, Disability Discrimination in the Workplace. He has written and lectured on many employment-related topics and has been an adjunct professor at the Quinnipiac University School of Law. He is on the Executive Board of the National Employment Lawyers Association, served as co-chair of its disability rights committee, and served as President of the Connecticut Employment Lawyers Association.
Kathleen Peratis has practiced employment, civil rights, and labor law, representing individuals and classes, since 1969. She has written many books and articles on employment issues. She has served as head of the women’s rights divisions of the American Civil Liberties Union and of Human Rights Watch and as president of the New York Civil Liberties Union.
Piper Hoffman joined O&G in February 2002 after a federal clerkship and after litigating at the Animal Legal Defense Fund. She has advocated for women's rights, prisoners of conscience, abuse victims, and the homeless. She earned her B.A. magna cum laude from Brown University in 1994 and her J.D. cum laude from Harvard Law School in 1999.
Justin M. Swartz received his J.D. with honors from DePaul University in 1998. He has litigated class, multiplaintiff, and individual cases against public and private employers and has represented employees in alternative dispute resolution procedures. He joined O&G in December 2003.
Allegra L. Fishel has represented plaintiffs in civil rights and employment matters since 1986. She has been active in professional organizations related to employee rights, serving as an officer of the National Employment Lawyers Association/New York and as co-chair of the Individual Rights and Responsibilities Committee of the NYSBA’s Labor and Employment Law Section. Ms. Fishel lectures frequently on employment law topics.
Jack A. Raisner has practiced employment law since 1985. He authored the Pregnancy Discrimination and Parental Leave Handbook (2000), as well as many chapters, articles, and columns on employment topics. He is a tenured Professor of Law at the Tobin College of Business, St. John’s University.
Lewis M. Steel has practiced since 1963, primarily in the fields of employment, civil rights, labor, and criminal law. He has tried and argued cases nationally, including in the U.S. Supreme Court. His successful employment discrimination class actions have established important legal rights for employees. He has been listed in The Best Lawyers in America since 1991.
Wendi S. Lazar has been practicing law since 1993 in many areas of employment law, with a focus on executive employment agreements, non-competition and severance agreements, and multinational employment issues. She also advises clients and attorneys concerning employment-related immigration law. Ms. Lazar's clients are predominantly in the financial services, advertising, entertainment, and new media industries. She has written numerous articles on employment and immigration law and appears frequently on panels in her areas of expertise.

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Nantiya Ruan has practiced employment law since completing a federal judicial clerkship in 1999-2000. She also has experience as a social worker with a Master’s in social work, reflecting her commitment to social justice issues.
Deborah L. McKenna has represented plaintiffs in a wide variety of employment matters since 1996. Throughout her legal career, she has been active in the Young Lawyers’ Section of the Connecticut Bar Association, and she is a frequent panelist on employment law issues and participates in numerous women’s rights organizations in Connecticut.
René S. Roupinian has practiced employment law since 1995. She represents employees in class and multiplaintiff suits under the federal Worker Adjustment and Retraining Notification (WARN) Act. She received her B.A. from the University of Michigan and her J.D. from Michigan State University College of Law.
Rachel Bien came to O&G in October 2006 after a clerkship on the U.S. Court of Appeals for the Ninth Circuit. She earned her B.A. from Brown University in 2000 and her J.D. cum laude from Brooklyn Law School in 2005, where she also received an Edward V. Sparer Public Interest Law Fellowship.
Cara E. Greene joined O&G in August 2005. She received her B.A. from Gordon College in 2000 and her J.D. from Fordham University School of Law in 2005.
Mark R. Humowiecki joined O&G in September 2004 after a federal clerkship and a Skadden Fellowship focusing on workers’ rights at the Legal Aid Society. He earned his B.A. magna cum laude in 1994 from Yale University and his J.D. in 2001 from Yale Law School.
Carmelyn P. Malalis joined O&G in February 2004 after clerking in the Southern District of New York and working at Sullivan & Cromwell LLP. She received her B.A. from Yale University in 1996 and her J.D. from Northeastern University School of Law in 2001.
Stephanie M. Marnin joined the Connecticut office of O&G in 2006. She earned her B.A. in 1992 and her M.A. in 1994 from the University at Albany, SUNY, and her J.D. from the University of Connecticut School of Law in 2006.
Tammy Marzigliano joined O&G in April 2004 after practicing employment law with Gary Phelan, LLC in West Hartford, Connecticut. Tammy received her B.A. from Hofstra University and her J.D. magna cum laude from Quinnipiac University School of Law in 2001. She is admitted to practice in Connecticut and New York.
Ossai Miazad joined O&G in July 2007. She received her B.A. from Vassar College in 1998. Since receiving her J.D. with honors from the American University Washington College of Law in 2004, she has represented plaintiffs in civil rights and employment matters.
ReNika C. Moore came to O&G in October 2004 after a federal clerkship in the Southern District of New York. She earned her A.B. cum laude from Harvard-Radcliffe in 1999 and her J.D. from Harvard Law School in 2003.
Linda A. Neilan joined O&G in September 2002 after a federal clerkship. She received her B.S. magna cum laude from the University of Scranton in 1994, her M.A. from San Francisco State University in 1999, and her J.D. with honors from Rutgers School of Law-Newark in 2001.
Tara Lai Quinlan joined O&G in August 2006 after a clerkship with the United States Court of Appeals for the Second Circuit. She received her B.A. from the University of California, Berkeley, in 1998, and her J.D. from Northeastern University School of Law in 2004.
Anjana Samant joined O&G in July 2004 after a federal judicial clerkship with the Honorable Martha Vazquez, Chief District Judge in the District of New Mexico. She received her B.A. from Cornell University in 1997 and her J.D. from New York University School of Law in 2001, where she also completed a research and teaching fellowship in constitutional law as the 2001-2002 Derrick A. Bell Fellow.

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EXHIBIT A

 
 Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 1 of 28

1 ROBERT S. NELSON (SBN# 220984) NELSON LAW GROUP
2 900 Cherry Avenue, Suite 300 San Bruno, CA 94066
3 (650) 794-2760 (phone) (650) 794-2761 (fax)
4 rnelson@nelsonlawgroup.net

5 MARY STOWELL (Pro hac vice pending)

LINDA D. FRIEDMAN (Pro hac vice pending)

6 STOWELL & FRIEDMAN LTD

321 S. Plymouth Court, Suite 1400

7 Chicago, Illinois 60604

(312) 431-0888

8 mstowell@sfltd.com

lfriedman@sfltd.com

9 Attorneys for PUTATIVE CLASS MEMBERS AND OBJECTORS Ronald Moore, Morris Allen,

10

Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker and

11 Carlton McDowell

12

UNITED STATES DISTRICT COURT

13

NORTHERN DISTRICT OF CALIFORNIA

14

SAN FRANCISCO DIVISION

15
16
17 DAISY JAFFE, et al.,
18 Plaintiffs,
19
20 v. 21 MORGAN STANLEY & CO., INC. 22
Defendant. 23
24

)

Case No. C-06-3903

)

)

OBJECTIONS OF PUTATIVE

)

CLASS MEMBERS TO MOTION

)

FOR CLASS CERTIFICATION &

)

PRELIMINARY APPROVAL

)

)

Date: December 3, 2007

)

Time: 10:00 am

)

Dept: Courtroom 12

)

Judge: Thelton E. Henderson

)

)

)

)

)

25

26

27

28

OBJECTIONS OF PUTATIVE CLASS MEMBERS TO MOTION FOR CLASS CERTIFICATION AND PRELIMINARY APPROVAL OF PROPOSED SETTLEMENT - CASE NO. C-06-3903 (TEH)

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 2 of 28

1
TABLE OF CONTENTS
2

3 FACTUAL AND PROCEDURAL BACKGROUND ...................................................... 1 I. Evolution of Jaffe v. Morgan Stanley and Augst-Johnson v. Morgan Stanley

4

Lawsuits ......................................................................................................................... 1

II. Simultaneous Negotiations Between The Moore Group and Morgan Stanley.............. 5 5

6 LEGAL STANDARD ......................................................................................................... 7

7 ARGUMENT ....................................................................................................................... 8 I. The Proposed Class Does Not Meet The Rule 23 Standard for Certification, A

8

Necessary Pre-Condition to Preliminary Approval. ...................................................... 8

A. Ms. Curtis-Bauer Is Not An Adequate Class Representative. ............................. 9

9

B. The Proposed Class Does Not Meet The Rule 23 Requirements of

10

Typicality. ............................................................................................................ 12 II. The Proposed Settlement Does Not Meet The Standard For Preliminary

11

Approval. ....................................................................................................................... 13

A. The Record Establishes This Was A Settlement In Search of A

12

Representative, Not An Arm’s Length Negotiation Between Class

Representatives And Defendant. .......................................................................... 13

13

B. No Formal Discovery Was Conducted And Morgan Stanley Proved

14

Itself Unreliable By Failing To Disclose The Nature Of The Moore Group’s Claims. ................................................................................................... 16

15 III. The Proposed Settlement Is Not Fair or Adequate To The Class. ................................. 17 A. The Settlement Fund Does Not Provide Fair or Adequate Compensation

16

To Class Members Harmed By Morgan Stanley’s Race Discrimination............. 17

B. The “Programmatic Relief” Is Inadequate to Remedy the Firm’s

17

Rampant Race Discrimination And May Serve To Institutionalize This

18

Discrimination. ..................................................................................................... 20 C. The Settlement Is Inadequate Because It Does Not Ensure Access To

19

Courts For Discrimination Claims And Excludes FAs With

Management Responsibilities From The Class. ................................................... 22

20

1. Any Meaningful Settlement Should Include Morgan Stanley’s

Agreement To Maintain Class Members’ Access to Court for

21

Discrimination Claims. ....................................................................................... 22

22

2. The Class Definition is Unfairly Restrictive............................................... 23

IV. The Proposed Notice Is Confusing and Inaccurate and Does Not Provide Class

23

Members Adequate Information Or Opportunity To Exercise Their Rights. ............... 25

24 CONCLUSION.................................................................................................................... 25

25

26

27

28

i
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Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 3 of 28

1

TABLE OF AUTHORITIES

2 Bartelson v. Dean Witter & Co. ................................................................................... 12,14
3 86 F.R.D. 657, 669 (E.D. Pa. 1980)

4 Flockhart v. Iowa Beef Processors ................................................................................... 20 192 F. Supp. 2d 947, 979 (N.D. Ia. 2001)
5 General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig. ................................. 9
6 55 F. 3d 768 (3d Cir. 1995)

7 Linney v. Cellular Alaska Partnership................................................................................ 9 151 F.3d 1234, 1242 (9th Cir. 1998)
8 O’Neal v. Wackenhut Servs. Inc........................................................................................ 14
9 2006 U.S. Dist. LEXIS 34634 (E.D. Tenn. May 25, 2006)

10 Payne v. Travenol Labs., Inc............................................................................................. 12 673 F.2d 798 (5th Cir. 1982)
11 Silber v. Mabon ................................................................................................................. 24
12 957 F.2d 697 (9th Cir. 1992)

13 Simer v. Rios ..................................................................................................................... 10 661 F.2d 655 (7th Cir. 1981)
14 Special Master's Report, Livingston v. Toyota Motor Sales, USA, Inc............................. 15
15 1995 U.S. Dist. LEXIS 21757 (N. D. Cal. June 1, 1995)

16 Staton v. Boeing Co........................................................................................................ 9,13 327 F.3d 938 (9th Cir. 2003)
17 Wolf v. Toyota Motor Sales, USA, Inc .............................................................................. 15
18 1997 U.S. DIST. LEXIS 16457 (N.D. CAL. SEP. 24, 1997)

19 Wright v. Collins ............................................................................................................... 24 766 F.2d 841 (4th Cir. 1985)
20

21

22

23

24

25

26

27

28

ii

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 4 of 28

1

OBJECTIONS OF PUTATIVE CLASS MEMBERS TO MOTION FOR CLASS

CERTIFICATION AND PRELIMINARY APPROVAL OF PROPOSED SETTLEMENT

2 Putative class members and current and former Morgan Stanley & Co., Inc. (“Morgan

3 Stanley” or “the Firm”) employees Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony

4 Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Mark Lewers,

5 Maurice Mabon, Brian Roy, Marion Tucker, Carlton McDowell, and applicant Justin Harris,

6 (collectively the “Moore group” or “Objectors”) through counsel, respectfully submit their

7 Objections to the Motion for Class Certification and Preliminary Approval of Proposed

8 Settlement (“Settlement”). The Moore group is joined in its opposition by additional class

9 members who have joined and signed a letter respectfully expressing their objections. See Exs. 6,

10 7.

11 FACTUAL AND PROCEDURAL BACKGROUND

12 I.

Evolution of Jaffe v. Morgan Stanley and Augst-Johnson v. Morgan Stanley Lawsuits

13 On June 22, 2006, Daisy Jaffe filed this lawsuit alleging class-wide gender discrimination

14 against Morgan Stanley and seeking to represent a nationwide class of female Financial Advisors

15 (“FAs”) and Financial Advisor-Trainees (“FA-Trainees”) at Morgan Stanley. See Complaint, at

16 Docket No. 1. Ms. Jaffe is Caucasian, and her complaint did not include any individual or class

17 claims of race or color discrimination. Id. Ms. Jaffe’s complaint did include an individual claim

18 for age discrimination. Id.1

19 On the same day that Ms. Jaffe filed her complaint in this Court, a nearly identical gender

20 discrimination lawsuit seeking class action status, Augst-Johnson et al. v. MSDW, Case No. 06-

21 1142, was filed in federal district court in Washington, D.C. See, e.g., 1/19/07 Order, Docket No.

22 67, at 1. From the record, it appears that the Augst-Johnson plaintiffs were in the midst of

23 settlement negotiations with Morgan Stanley when the two lawsuits were filed. Id.

24 On October 12, 2006, the Jaffe complaint was amended to add an additional plaintiff,

25

26 27 1 As of Tuesday, November 6, 2007, the lawsuit was still identified on the website of counsel for
the Jaffe plaintiff as a gender discrimination class action. See Ex. 10. 28

1
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Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 5 of 28

1 Denise Williams, who also sought to represent a class of female FAs.2 See First Amended

2 Complaint, at Docket No. 25. As Plaintiffs informed this Court, “the central allegations of the

3 complaint have not changed in any material respect. It remains a national gender discrimination

4 class action challenging compensation and business allocation practices. Besides the new named

5 Plaintiff, the only change is that the amended complaint adds overlapping and identical gender

6 claims under Michigan law … on behalf of a Michigan subclass.” See Docket No. 32 at 2.

7

Plaintiff Williams, an African-American, also brought “certain individual race

8 discrimination claims, which have not been brought on behalf of anyone but Ms. Williams at this

9 time.” Docket No. 32 at 2. Indeed, Plaintiffs stated that “[c]ontrary to Defendant’s assertions, the

10 recently-filed Amended Complaint merely adds one plaintiff, who brings certain individual race

11 claims not previously alleged, but does not in any way modify the original allegations challenging

12 Morgan Stanley’s nationwide pattern, practice and policy of discrimination against female

13 Financial Advisors in compensation, business opportunities, and other terms and conditions of

14 employment.” See Plaintiffs’ Opp. to Ex Parte App. to Continue Case Mgmt. Conf., Docket No.

15 32 at 1 (emphasis in original).

16

In January 2007, this Court ordered a stay of the Jaffe proceedings until March 15, 2007

17 after investigating the status of negotiations between the Augst-Johnson plaintiffs and Morgan

18 Stanley. See Docket No. 67. On April 24, 2007, the Augst-Johnson parties moved for

19 preliminary approval of a pre-certification settlement class of female FAs and FA-Trainees and a

20 settlement agreement providing a monetary fund of $46 million and programmatic relief. See Ex.

21 13, Augst-Johnson et al. v. Morgan Stanley Settlement Agreement.

22

By stipulation of the parties and Court order, the Jaffe stay was extended again at least

23 three times, to April 15, May 15, and August 6, 2007. See, e.g., Docket No. 77, at 1, 3; see also

24 Docket Nos. 73, 74, 75. The individual age and race claims of Plaintiffs Jaffe and Williams were

25 also stayed. Docket No. 70, at 1. The District Court in Washington, D.C. preliminarily approved

26 27 2 According to the Amended Complaint, Williams is a Financial Advisor who began her
employment at Morgan Stanley in March 2004. Docket No. 25, at 3. 28

2

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 6 of 28

1 the Augst-Johnson Settlement on July 17, 2007. Docket No. 78, at 2. Prior to August 2, 2007,

2 neither the Jaffe Plaintiffs nor Defendant ever reported to this Court in any filing that the nature

3 of the Jaffe lawsuit had changed from a putative gender discrimination class action lawsuit.

4

On August 2, 2007, counsel for the Jaffe Plaintiffs issued a press release announcing

5 settlement of class race and color discrimination claims for 1,200 African-Americans and Latinos

6 as part of their dormant putative gender class action lawsuit. See, e.g., Ex. 11. Also on August 2,

7 the Jaffe parties filed a Joint Status Report informing the Court that the settlement in the Augst-

8 Johnson gender class action had been preliminarily approved, notice had been sent to the class,

9 and a fairness hearing date had been scheduled. Docket No. 78 at 3. The parties further informed

10 the Court that “Jaffe and Williams will no longer pursue their gender discrimination claims or

11 seek certification of a class of female Morgan Stanley FAs.” Docket No. 78 at 3. Instead, the

12 Jaffe Plaintiffs sought to amend their First Amended Complaint to add another plaintiff, Margaret

13 Benay Curtis-Bauer (“Curtis-Bauer”), and to add class-wide race and color discrimination 14 claims.3 See Joint Stipulation Re: Filing of Sec. Am. Cmplt., Docket No. 80 at 2, 7, 23.

15

The Jaffe Second Amended Complaint alleged for the first time claims of class-wide race

16 and color discrimination on behalf of classes of African-American and Latino FAs and FA-

17 Trainees. See generally Sec. Am. Cmplt., Docket No. 81. Ms. Williams was identified as a class

18 representative for the African-American class for purposes of Title VII and Section 1981 claims,

19 but not as a class representative for the “Minority” or Latino class. Id. at 5-6, counts 1, 2, 3, 4, 6,

20 8, 9. Ms. Curtis-Bauer was identified as a class representative solely for the Section 1981 claims

21 for the “Minority” class, which included African-Americans and Latinos. Id. The Complaint did

22 not identify any of the putative class representatives as Latino. See id. at 6.

23

The Jaffe parties claimed to have reached a settlement in principle of these class-wide race

24 and color discrimination claims on August 2, 2007, despite the fact that no class race and color

25

26 3 According to the Second Amended Complaint, Curtis-Bauer is an African-American female 27 who was employed as a Financial Advisor at Morgan Stanley from 1989 until November 2002.
Docket No. 81, at 4, para. 15.
28

3

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 7 of 28

1 discrimination claims had been prosecuted before August 2, 2007. Docket No. 87. The terms of

2 the settlement were not disclosed, nor was the settlement agreement filed with the Court at that

3 time.

4

On August 30, 2007, Morgan Stanley’s Human Resources department sent an e-mail to

5 Financial Advisors entitled “A Message From Human Resources.” See Ex. 12. This e-mail

6 informed the employees of the “settlement of a race discrimination lawsuit filed on behalf of

7 current and former African American and Latino” FAs and FA-Trainees and said the “details of

8 the settlement will be made public upon the filing of the settlement papers with the U.S. District

9 Court for the Northern District of California shortly.” Id. The e-mail further stated that it

10 anticipated “a number of inquiries from FAs regarding participation in this settlement” and

11 directed all such “inquiries to the attorneys who filed the case” and listed the firm names and

12 contact information for plaintiffs’ counsel Kelly Dermody, James Finberg and Adam Klein. Id.

13

The Augst-Johnson settlement was approved by the D.C. Court on October 26, 2007. See

14 Augst-Johnson v. Morgan Stanley Final Order Approving Settlement Agreement. The eligible

15 Jaffe Plaintiffs (Daisy Jaffe and Denise Williams) opted out of the Augst-Johnson settlement.

16

Just before approval of the Augst-Johnson settlement – and nearly two months after first

17 announcing the existence and settlement of the Jaffe class race discrimination claims – the Jaffe

18 parties sought Class Certification and Preliminary Approval of the Proposed Settlement on

19 October 22, 2007. See Docket Nos. 83, 85. As the Court is aware, the Proposed Settlement

20 included a fund of $16 million, that includes (a) all payments to class members, including to the

21 named plaintiff, (b) all attorneys’ fees and costs, (c) all costs related to the Settlement (including

22 but not limited to all costs related to notice, claims processing, legal and tax advice for the Fund

23 Administrator, tax preparation, and the Special Master’s fees and expenses), and (d) taxes. See

24 Docket No. 87-2 at 52 (Stlmt. at 36). The Proposed Settlement also provides for programmatic

25 relief nearly identical to that established by the Augst-Johnson gender class action settlement. See

26 generally Ex. 13, at 18-31.

27

The parties agreed upon a class period beginning October 12, 2002, nearly five years prior

28 to the date the Second Amended Complaint was filed and four years after the First Amended

4

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 8 of 28

1 Complaint added plaintiff Denise Williams, who did not allege class claims of race discrimination

2 in that complaint, nor had she filed a representative EEOC charge alleging class-wide

3 discrimination at that time. See Settlement and Sec. Am. Cmplt.

4

According to the Joint Motion for Order Granting Preliminary Approval, named Jaffe

5 plaintiff Denise Williams now intends to opt out of the Jaffe race and color settlement and to

6 pursue her own discrimination claims. See Docket No. 87 at 2, n. 2. (“Denise Williams has

7 informed Class Counsel that she intends to opt out, and to file her own individual lawsuit alleging

8 both the claims she has brought in the complaint and her attached EEOC charge….”) Ms.

9 Williams will not serve as a class representative. As a result, the class has a sole representative,

10 Ms. Curtis-Bauer, who left the employ of Morgan Stanley in November 2002. See, Jaffe Sec.

11 Am. Cmplt., at 5. Ms. Curtis-Bauer was therefore employed by Morgan Stanley for only about

12 one month of the over five year class period. Ms. Curtis-Bauer is African-American and is not

13 Latino.

14 II. Negotiations Between The Moore Group and Morgan Stanley

15

On August 8, 2006 – nearly a year before the Jaffe Plaintiffs announced the existence and

16 settlement of their class race discrimination claims – a group of African-American current and

17 former Morgan Stanley FAs informed the Firm of their individual and class claims of race

18 discrimination. These individuals made representative allegations “of a nationwide pattern and

19 practice of intentional race discrimination by Morgan Stanley against African-American Financial

20 Advisors and result from employment practices that have a disparate impact on African-

21 Americans.” Ex. 14, M. Stowell Letter.

22

The Moore group indicated its willingness to assist Morgan Stanley in addressing its

23 systemic race discrimination and in exploring the possibility of resolving their individual and

24 class claims without full-blown litigation. Morgan Stanley claimed to be interested in proactively

25 addressing its problems and entered into tolling agreements with the Moore group’s members so

26 the parties could attempt to address these issues. These tolling agreement preserve the claims of

27 the signatories and those similarly situated beginning August 6, 2006.

28

Other current and former employees joined the Moore group’s efforts on behalf of

5

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 9 of 28

1 African-Americans at Morgan Stanley. On December 14, 2006, counsel for the Moore group met

2 with lawyers for Morgan Stanley, including Jaffe and Augst-Johnson counsel Mark Dichter, in

3 New York. Additionally, between April 24, 2007 and June 26, 2007, the Moore group met with

4 Morgan Stanley representatives in Chicago and Washington D.C. to explain the systemic

5 obstacles and patterns of discrimination facing African-Americans at Morgan Stanley. During

6 these meetings, the parties engaged the services of a well-respected professional neutral, Linda

7 Singer.

8

Morgan Stanley led the Moore group to believe, falsely, that the Firm was interested in

9 improving the condition of African-Americans by reforming the policies, practices and hostile

10 culture that disadvantaged African-Americans and instituting meaningful, company-wide relief

11 for African-Americans. After it became clear to Morgan Stanley that the Moore group would not

12 resolve class claims for insufficient monies and it became clear to the Jaffe lawyers that Morgan

13 Stanley had settled the Augst-Johnson gender case, Morgan Stanley began negotiating with the

14 Jaffe plaintiffs to settle yet un-filed class race discrimination claims as part of their dormant

15 putative class action gender discrimination lawsuit. Only on August 1, 2007, did Mr. Dichter

16 inform counsel for the Moore group of its negotiations with the Jaffe plaintiffs regarding class

17 race discrimination claims.

18

As described above, on August 2, 2007, the Jaffe Plaintiffs issued a press release

19 announcing settlement of the yet-unfiled class race discrimination claims. Tellingly, however, on

20 August 1, 2007, the night before the Jaffe settlement was announced and the Second Amended

21 Complaint filed, Mary Evans, an African-American producing Assistant Branch Manager in the

22 Menlo Park office, received a phone call from an attorney for the Jaffe Plaintiffs, who appeared to

23 be attempting to solicit her as a named plaintiff in the Jaffe case. See Ex. 9. Counsel for the

24 Moore group is aware of other individuals subsequently receiving similar telephone calls from

25 counsel for the Jaffe Plaintiffs.

26

Due to the manner in which the Jaffe settlement was negotiated and converted from a

27 gender class, as well as Morgan Stanley’s conduct while negotiating with them, the Moore group

28 was concerned that the Jaffe settlement would not benefit the putative class of African-

6

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 10 of 28

1 Americans. Counsel for the Moore group shared their concerns with counsel for the plaintiffs,

2 but those concerns fell on deaf ears. Worse yet, Morgan Stanley’s attorney advised the Moore

3 group’s attorneys that if they challenged the lawsuit, they would be the “pariahs of the plaintiffs

4 bar” because between the Augst-Johnson and the Jaffe lawsuits, five law firms sided with Morgan

5 Stanley on settlement.

6

On October 3, 2007, the Moore group filed a lawsuit alleging individual and class claims

7 of systemic race discrimination against Morgan Stanley, captioned Moore et al. v. Morgan

8 Stanley & Co., Inc., Case No. 07 C 5606 (N.D. Ill.). See Ex. 15, Moore Complaint. Unlike the

9 Jaffe lawsuit, the Moore putative class includes applicants and producing managers and includes

10 class-wide hiring and promotion claims. See id.

11

The fourteen named plaintiffs in the Moore lawsuit represent a broad cross section of

12 Morgan Stanley employees. They include current and former Morgan Stanley FAs of varying

13 levels of production and tenure, applicants and producing managers. Members of the Moore

14 group have worked at over ten different Morgan Stanley offices across the country for a number

15 of different managers. Collectively, the Moore group has a wealth of knowledge about the Firm

16 and the manner in which its policies and practices operate to disadvantage and exclude African-

17 Americans, and how to address these shortcomings. Presumably, all would be class members in

18 the new Jaffe race and color class action, but none were consulted during negotiation of the

19 claims of an entire class of African-Americans or in crafting appropriate relief.

20

LEGAL STANDARD

21

The district court plays a critical role in ensuring the fairness and adequacy of proposed

22 class action settlements. A class action settlement may be approved only when its proponents

23 meet their burden to show that it is fundamentally fair, adequate, and reasonable. Linney v.

24 Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 1998).

25

The Court must first determine that the proposed class meets the requirements for Rule 23

26 certification. In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d

27 768, 794 (3d Cir. 1995). If the conditions for Rule 23 are met, the court must examine the

28 settlement with special care and skepticism in those cases where the settlement was reached prior

7

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 11 of 28

1 to class certification. Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). This is so in part

2 because pre-certification settlements present unique temptations and opportunities for collusion.

3 See, e.g., Simer v. Rios, 661 F.2d 655, 664-66 (7th Cir. 1981) (requiring that settlement

4 proponents show that the compromise met a higher standard of fairness where negotiations

5 occurred before certification). Pre-certification settlements also merit heightened judicial scrutiny

6 because the court must protect the interests of class members who are not yet notified of the

7 action and therefore lacked any opportunity to ensure that their voices were heard during

8 negotiations. In re General Motors Corp., 55F.3d at 796 (discussing the problems presented by

9 pre-certification settlements and the duty of courts to examine them with extra care).

10

ARGUMENT

11 I. 12

The Proposed Class Does Not Meet The Rule 23 Standard for Certification, A Necessary Pre-Condition to Preliminary Approval.

13

Rule 23 governs the rights and obligations of parties who desire to bind not only

14 themselves but also to resolve the claims of others. As a preliminary matter, to approve a pre-

15 certification class settlement, the Court must first conclude that the proposed class meets the

16 requirements for Rule 23 certification.

17

Morgan Stanley asks the Court to “conditionally” certify a class and award preliminary

18 and final approval to the class settlement while allowing Morgan Stanley to retain the right to

19 disavow the settlement if too many putative class members opt out. Under the express terms of

20 the Settlement, Morgan Stanley has the right to return to the pre-settlement, pre-certification

21 status quo. Presumably, Morgan Stanley could then object to class certification under Rule 23.

22 The Settlement provides that Morgan Stanley alone shall decide whether the Settlement will

23 proceed if the opt-out bar is exceeded. See Docket No. 87-2 at 30 (Stlmt. at 14, ¶9).

24

Rule 23, however, provides no special treatment or conditional certification for settlement

25 purposes. The same Rule 23 requirements must be met for classes that settle and those that

26 proceed to trial, and for good reason. If the parties settle, there is no adversary to test whether the

27 case is proper for class certification. Yet for the absent class members, the impact of certification

28 is the same, and a settlement extinguishes their claims. Here, the situation is magnified because

8

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1 the parties settled the class suit before it was filed. Thus, the absent class members were notified

2 with one press release that there was a putative class action and that it was resolved. There was

3 no opportunity for absent class members to participate in the settlement discussions or to assist

4 counsel with the remedial relief. If preliminary approval is granted, class members cannot object

5 to the settlement and opt out. Thus, the only time for absent class members who disagree with the

6 settlement to be heard is prior to preliminary approval.

7

The Moore group proposes that in the absence of a true adversarial process, the best way

8 for the Court to determine whether to certify the class is to consider (1) what Morgan Stanley

9 would argue against class certification if it were to disavow the Settlement and challenge the

10 class, and (2) what the absent class members would argue if they had known this putative class

11 was filed and had an opportunity to participate in the settlement discussions.

12

As explained below, were Morgan Stanley not seeking to settle this lawsuit, it surely

13 would have argued that the lone class representative, Ms. Curtis-Bauer, is not an adequate class

14 representative and that her claims are not typical of the class. Perhaps the most egregious aspect

15 of the putative settlement is that the lone class representative negotiated for herself a payout of

16 $125,000 from the class fund for “non-class claims,” in addition to the $25,000 class bonus and

17 her award from the Settlement. Had the Moore group participated in the settlement negotiations,

18 they would have opposed the special treatment of one named plaintiff to the disadvantage of the

19 class. For the reasons set forth below, Rule 23’s requirement has not been met and the class

20 should not be certified. The Jaffe plaintiff and Morgan Stanley should not be allowed to bind the

21 absent class members. Because no class should be certified, the Court need not even consider the

22 adequacy of the Settlement.

23

A. Ms. Curtis-Bauer Is Not An Adequate Class Representative.

24

Before approving a settlement, the Court must ensure that the named plaintiffs and class

25 counsel have fairly and adequately protected the interests of the class. Fed. R. Civ. P. 23(a)(4).

26 The proposed class includes all African-American and Latino FAs and FA-Trainees employed

27 by Morgan Stanley since October 12, 2002. Docket No. 87-2, at 25. To properly understand and

28 consider the ways in which any proposed relief would affect the class, and to negotiate fair and

9

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1 effective equitable relief for all class members, the class should have been represented by

2 African-American and Latino FAs and FA-Trainees of various levels of tenure and production.

3 Because the Settlement seeks to extinguish promotion claims, class members denied promotions

4 should have also been included in the negotiations and among the class representatives. Here,

5 the sole class representative was a former employee who worked for Morgan Stanley during one

6 month, the first month, of a class period that exceeds five years.

7

It does not appear that Ms. Curtis-Bauer participated in the settlement negotiations, but in

8 any event, she is not an adequate class representative. Ms. Curtis-Bauer is African-American,

9 and not Latino. The absence of a Latino class representative precludes a finding of adequacy of

10 representation on behalf of Latino class members. Payne v. Travenol Labs., Inc., 673 F.2d 798, 11 810 (5th Cir. 1982) (holding that black males and black females were not interchangeable, so a

12 black female could not be the sole representative for a class including black males); see also

13 Bartelson v. Dean Witter & Co., 86 F.R.D. 657, 669, (E.D. Pa. 1980) (noting that while not

14 necessarily antagonistic, claims of other minority class members “would be asserted with less

15 vigor than they deserve” by white female class representative).

16

Moreover, Ms. Curtis-Bauer was employed by Morgan Stanley only for the first month of

17 a class period that dates from 2002 through 2007 and, thus, lacks knowledge as to the practices at

18 issue during the vast majority of the class period and of the experiences of her fellow class

19 members during that same time. As a result of her limited experience, she lacks sufficient

20 knowledge of current practices necessary to critically assess the proposed injunctive relief (which

21 will only apply prospectively to current and future employees).

22

Adequacy of representation also requires that the class representative and her counsel not

23 have any conflicts of interest with the class. Payne, 673 F.2d at 810 (“It is axiomatic that a

24 putative representative cannot adequately protect the class if his interests are antagonistic to or in

25 conflict with the objectives of those he purports to represent”) (internal citations omitted). Ms.

26 Curtis-Bauer, as an African-American, may have a conflict of interest with Latino class members

27 whom she seeks to represent. She also has a broader conflict because she is to receive additional

28 payments and execute a different release than all other class members who participate in the

10

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1 Settlement. While class members will, on average, receive payments of less than $12,000, Ms.

2 Curtis-Bauer will receive over ten times that amount as a plaintiff in this lawsuit. In addition to a

3 $25,000 bonus for serving as a class representative, Ms.-Curtis-Bauer is receiving $125,000 to

4 settle her “non-class” claims despite her one-month employment during the class period. Docket

5 No. 87-2, at 105 (Notice to Class at 15).

6

Class representatives cannot receive disproportionately special treatment. The size and

7 nature of the additional relief for Ms. Curtis-Bauer is troubling. Payments for non-class claims

8 should not be paid from a fund established to resolve class members’ race discrimination claims.

9 It is also unclear what other claims Ms. Curtis-Bauer could have that are still timely, given that 10 she left Morgan Stanley in 2002.4

11

In Staton v. Boeing Co., 327 F.3d 938, 960 (9th Cir. 2003), the Ninth Circuit recognized

12 that named plaintiffs have a stronger incentive to maximize their own recovery than to maximize

13 the shared fund from which unnamed plaintiffs’ awards will be drawn. Id. at 975. Where named

14 plaintiffs receive special awards “in addition to their share of the recovery, they may be tempted

15 to accept suboptimal settlements at the expense of class members whose interests they are

16 appointed to guard.” Id. Therefore, where, as here, the sole class representative negotiated a

17 large and unique benefit for herself -- the settlement of her “non-class claims” for $150,000 to be

18 drawn from the common fund -- it does not appear that the settlement is fair to all members of the

19 class.

20

While Plaintiffs’ Counsel may have done a commendable job negotiating a settlement for

21 Ms. Curtis-Bauer, their fiduciary responsibilities are to the class as a whole, not just to the named

22 plaintiffs, or to those class members who have contributed toward the prosecution of the suit.

23 Staton, 327 F.3d at 960 (9th Cir. 2003) (noting that the “incentives for the negotiators to pursue

24 their own self-interest and those of certain class members are implicit in the circumstances and

25
26 4 The nature of these “non-class” claims should be disclosed so that the Court can examine whether the additional $125,000 payment may have served as an improper incentive for Ms.
27 Curtis-Bauer to support the class settlement. Staton v. Boeing Co., 327 F3.d 938, 960 (9th Cir. 2003)
28

11

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1 can influence the result of the negotiations without an explicit expression or secret cabals”).

2 Allowing Ms. Curtis-Bauer to receive extra money from the fund for non-class claims raises

3 questions about whether putative class counsel have adequately represented the class as a whole.

4

B. The Proposed Class Does Not Meet The Rule 23 Requirements of Typicality.

5

A class representative’s claims should be typical of those of the class. First, the payment

6 that Ms. Curtis-Bauer is receiving for her non-class claims is many times what she and class

7 members will recover for their race and color discrimination claims. Ms. Curtis-Bauer’s “other”

8 individual claims appear to predominate over her race discrimination claims, so they cannot be

9 typical of the class. See, e.g., O’Neal v. Wackenhut Servs. Inc., No. 03-397, 2006 U.S. Dist.

10 LEXIS 34634, at *57 (E.D. Tenn. May 25, 2006) (refusing to certify a class because the named

11 plaintiffs’ claims were noticeably weaker than those of most class members and were therefore

12 atypical).

13

Second, the race discrimination claims of Ms. Curtis-Bauer, an African-American, are not

14 necessarily typical of those of Latino class members. The parties have not explained the basis

15 for their decision to create a single “race and color” class for all discrimination claims of

16 African-Americans and Latinos. Under the circumstances, it does not appear that typicality can

17 be met under Rule 23(a) by conflating a class of African-Americans and Latinos. See, e.g.,

18 Bartelson v. Dean Witter & Co., 86 F.R.D. 657, 669 (E.D. Pa. 1980) (denying class certification

19 for minority class and holding that white female class representative’s claims were not typical of

20 the claims of blacks and other minority groups). It is naïve and dangerous to assume that Latinos

21 and African-Americans necessarily have the same experiences, and the same claims, or that the

22 discrimination they face can be remedied with the same programs.

23

Based on the experiences of the Moore group, the challenges and patterns of

24 discrimination that face African-Americans are different than those that face Latinos at Morgan

25 Stanley. The parties have not disclosed any analysis of Morgan Stanley’s workforce data, even

26 to disclose the relative size and representation of African-Americans and Latinos in the proposed

27 class. This data should be available to the Court and class members. This data, properly

28 analyzed, would likely reveal the experiences of the two groups. The Moore group understands

12

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 16 of 28

1 that African-Americans fare far worse under Morgan Stanley’s policies and culture than do

2 Latinos. On information and belief, African-Americans have lower representation as FAs and in

3 management, lower compensation and higher rates of attrition than Latinos and certainly than

4 Caucasians.

5 II. The Proposed Settlement Does Not Meet The Standard For Preliminary Approval.

6

Assuming, arguendo, that the class is certified, the Court should deny preliminary

7 approval to the Settlement because it is not adequate, fair or the product of arms’-length

8 negotiations. To grant preliminary approval, the court must determine that the proposed

9 settlement “is based upon findings that (a) the negotiations occurred at arm’s length; (b) there was

10 sufficient discovery; (c) the proponents of the settlement are experienced in similar litigation; and

11 (d) only a small fraction of the class objected.” Special Master's Report, Livingston v. Toyota

12 Motor Sales, USA, Inc., No. C-94-1377, 1995 U.S. Dist. LEXIS 21757, at *24 (N.D. Cal. June 1,

13 1995), adopted at Wolf v. Toyota Motor Sales, USA, Inc., No. C-94-1377, 1997 U.S. Dist. LEXIS

14 16457 (N.D. Cal. Sep. 24, 1997). Here, it does not appear that the negotiations occurred at arms’

15 length or that sufficient discovery was exchanged, resulting, predictably, in an inadequate and

16 unfair settlement, as well as objections by a substantial number, 20, of class members. See, e.g.,

17 Exs. 1-7. Class Member Letters to Court.

18

A. The Record Establishes This Was A Settlement In Search of A

Representative, Not An Arm’s Length Negotiation Between Class

19

Representatives And Defendant.

20

A number of facts demonstrate that the settlement was not negotiated at arm’s length. The

21 Jaffe lawsuit was filed as a class action gender discrimination lawsuit, and converted to a race and

22 color class case only after the plaintiffs’ lawyers lost the gender case to a competing group of 23 plaintiffs and lawyers in the Augst-Johnson v. Morgan Stanley case.5 The Jaffe settlement was

24 announced the same day the parties sought to amend the complaint to first include class claims of

25
26 5 Indeed, as set forth on p. 2, Jaffe plaintiffs repeatedly represented to the Court that theirs was a class-wide gender case, including when the lawsuit was amended to add plaintiff Denise
27 Williams. As late as November 5, 2007, the Jaffe case was still described on class counsel’s website as a gender class action. See Ex. 10.
28

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1 race and color discrimination, some 14 months after the lawsuit was originally filed.6

2

It does not appear that any putative class members or their representatives (other than

3 counsel) engaged in any negotiations of the Jaffe settlement, much less arm’s length negotiations,

4 before a settlement was reached. Unlike the Moore group, who attended a series of mediations

5 with Morgan Stanley, the Jaffe class representative was not present at the mediations that resulted

6 in the race and color settlement. Indeed, there is no evidence that Curtis-Bauer, the sole

7 remaining class representative, played any role in the negotiations resolving the claims of the

8 class she seeks to represent. And there is no evidence any Latino putative class member

9 participated in the case at any time.

10

Further, at the time the Jaffe settlement was reached, only one of the two named plaintiffs

11 was African-American. That plaintiff, Denise Williams, is no longer serving as a class

12 representative and has announced her intent to opt out of the race and color settlement to pursue

13 her own individual discrimination claims. See Docket No. 87-1 at 2 n.2. The decision of

14 Williams to relinquish her class representative status casts doubt on the credibility and fairness of

15 the negotiations – as well as the terms of the settlement.

16

Other putative class members were not contacted until the deal was done. For example,

17 on August 1, 2007, the night before the Jaffe settlement was announced and the amended

18 complaint filed, Mary Evans, a Financial Advisor and Assistant Branch Manager of the Menlo

19 Park Morgan Stanley office, received a phone call from a Lieff Cabreser attorney who appeared

20

21 6 It appears that Morgan Stanley orchestrated this eleventh hour conversion in part to silence the 22 Jaffe plaintiffs and their attorneys, who would have been the most likely to object to the Augst-
Johnson gender lawsuit and to achieve a global resolution of all civil rights claims against the 23 Firm for the foreseeable future. Having previously sought to represent the same class, the Jaffe
plaintiffs and their lawyers were in the best position to object to the Augst-Johnson settlement. 24 However, prior to the Augst-Johnson opt-out period, the Jaffe case was converted into a “race and
color” class settlement that mirrored the Augst-Johnson settlement. Morgan Stanley’s offer to the 25 Jaffe plaintiffs to settle a race discrimination class left little incentive for them to challenge the
Augst-Johnson case, which was inextricably linked to their own lawsuit. Apparently, however, 26 neither of the named Jaffe plaintiffs believed the Augst-Johnson settlement was in their best
interest, as they both opted out of the settlement. As a result of these machinations, the Augst27 Johnson case was settled at an artificially low value as compared to other similar broker class
action lawsuits.
28

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1 to be attempting to solicit her as a named plaintiff in the Jaffe case. See Ex. 9, Declaration of M.

2 Evans. The Moore group suspects that Curtis-Bauer, like Ms. Evans, was contacted only after the

3 settlement was reached by Morgan Stanley and counsel for the Jaffe plaintiffs. As previously

4 explained, Ms. Curtis-Bauer is not an adequate representative regardless of her participation in

5 the negotiations.

6

Plaintiffs’ counsel are apparently still searching for named class representative plaintiffs.

7 As recently as last week, an attorney from Lieff Cabreser contacted a putative class member and

8 asked whether he would be interested in serving as a named plaintiff and class representative in

9 the Jaffe lawsuit and would write a letter to this Court supporting the settlement. See Ex. 8, Decl.

10 of M. Miller. The attorney provided the class member with inaccurate and incomplete

11 information about the Settlement. She did not inform the class member that one of the named

12 plaintiffs had decided to opt out of her own lawsuit to pursue her race discrimination claims

13 individually and sent him a Settlement agreement that included Ms. Williams as a named plaintiff 14 and class representative.7 Id.

15

Further evidencing the lack of arm’s length negotiations, Plaintiffs’ counsel is relying on

16 Morgan Stanley to garner support for the settlement. After the Jaffe Settlement was reached,

17 Morgan Stanley sent an e-mail to all class member employees with the names, firms and contact

18 information of Plaintiffs’ attorneys and directed class members to call Plaintiffs’ counsel with 19 questions.8 Ex. 12. Support by class members after the settlement was reached, however, does

20 not diminish the importance of the lack of class member input and involvement during the

21 negotiation of the Settlement.

22

23 7 Plaintiffs’ counsel are apparently also trying to garner letters of support from class members for 24 the settlement to present to this Court. See, e.g., Ex. 8, M. Miller Decl. Plaintiffs’ counsel has a
duty to provide full and fair disclosures to class members about the lawsuit and the settlement but 25 are not doing so as part of their outreach effort and solicitation of “support.” See id. Any support
can only be meaningful if it is based on full and complete information about the history of this 26 litigation, the terms of the settlement, its impact on themselves and other class members, and the
concerns of the Moore group. 27 8 It is hard to imagine another circumstance under which an employer would willingly distribute
contact information for three of the largest plaintiffs’ law firms to a large group of employees.
28

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1

Perhaps the most astonishing evidence of the lack of arm’s length negotiations is the

2 parties’ decision to include Latinos as part of the class. None of the named plaintiffs are Latino,

3 and the class lacks a Latino class representative. The Moore group understands that the working

4 conditions, experiences, and outcomes for African-Americans and Latinos vary widely at Morgan

5 Stanley, as does their compensation and rates of attrition and representation. As a result, different

6 relief may be appropriate. The willingness to negotiate and accept a settlement on behalf of a

7 class of Latinos without the benefit of at least one Latino class representative is inconsistent with

8 an arm’s-length negotiations process. Rather, Morgan Stanley’s inclusion of Latinos in the class

9 definition appears designed to mask the low numbers of African-Americans at the Firm, dilute the

10 ability of African-Americans to challenge the proposed settlement, and to release the claims of

11 (and the Firm’s liability for) a vast majority of its minority employees, including Latinos.

12

Given the facts, Morgan Stanley’s decision to negotiate with the Jaffe Plaintiffs’ counsel

13 is unsurprising. Morgan Stanley chose not to negotiate with the Moore group because it was not

14 interested in a fair resolution negotiated at arm’s-length that would actually benefit African-

15 Americans and result in meaningful change at the Firm. Thus, Morgan Stanley converted a

16 Settlement in the gender case that it wished to implement to limit liability for its rampant race

17 discrimination. Morgan Stanley was well aware that the Moore group would not agree to one-

18 sided terms and insufficient relief for African-Americans, nor would they agree to release the

19 rights of Latinos, and would litigate rather than accept relief that would not benefit other African-

20 Americans but would restrict their rights. Morgan Stanley therefore went searching for plaintiffs

21 who would accept the inadequate settlement.

22

B. No Formal Discovery Was Conducted And Morgan Stanley Proved Itself

Unreliable By Failing To Disclose The Nature Of The Moore Group’s Claims.

23 The Jaffe Settlement was reached without any formal discovery and without any
24 meaningful involvement of class members. Although the parties contend that Morgan Stanley
25 provided certain information as part of the mediation process, including workforce data, this
26 information was not produced under the Court’s discovery rules nor made available to class
27 members. When combined with the lack of involvement of class members in the mediation and
28

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1 settlement process, this discovery failed to provide sufficient basis for an appropriate settlement.

2

Further, it does not appear that Morgan Stanley provided the Jaffe plaintiffs with

3 meaningful information to make decisions on behalf of unnamed class members. For example,

4 Morgan Stanley did not inform Plaintiffs or their counsel about the existence of the Moore group

5 or the nature of their claims. Morgan Stanley’s failure to disclose this key piece of information

6 undermines the reliability of any information exchanged informally.

7

Moreover, it appears that Plaintiffs’ counsel ignored the relevant information gleaned from

8 even the modest information provided. Specifically, during a phone conference with counsel for

9 the Moore group, counsel for the Jaffe Plaintiffs conceded that the workforce data revealed

10 significant differences in the outcomes for African-Americans and Latinos, including their

11 representation, retention, and compensation. Nevertheless, Plaintiffs’ counsel agreed to include

12 Latinos in the class, even without a representative to protect their interests, so that Morgan

13 Stanley could cross another group of potential plaintiffs off of its list.

14 III. The Proposed Settlement Is Not Fair or Adequate To The Class.

15

A. The Settlement Fund Does Not Provide Fair or Adequate Compensation To

Class Members Harmed By Morgan Stanley’s Race Discrimination. 16

17

Morgan Stanley seeks to release the claims of approximately 1,300 African-American and

18 Latino Financial Advisors and Trainees for a Settlement Fund of $16 million. This Fund is

19 grossly inadequate and will not provide meaningful relief or adequate compensation to the

20 victims of the Firm’s systemic racial discrimination, nor will it provide any incentive for the Firm

21 to address its entrenched discriminatory practices and culture.

22

The $16 million Fund pales in comparison with amounts recovered for class members in

23 other cases in the retail brokerage industry. For example, in Cremin v. Merrill Lynch, Case No.

24 96 C 3773 (N.D. Ill.), a similar nationwide gender discrimination class action lawsuit against

25 another retail brokerage firm, 900 claimants recovered in excess of $225 million. The Martens et

26 al. v. Smith Barney, Case No. 96 C 3779 (S.D.N.Y.), gender discrimination lawsuit yielded over

27

28

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Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 21 of 28

1 $100 million for class members.9 Other nationwide race discrimination class action lawsuits

2 against major companies such as Coca-Cola and Texaco have resulted in far greater relief for a

3 comparable number of class members, approximately $193 million and $115 million,

4 respectively.

5

The proposed settlement fund is inferior even to other recent class action settlements by

6 Morgan Stanley. The Augst-Johnson v. MSDW gender discrimination class action settlement

7 established a settlement fund of $46 million, a value that appeared artificially low as a result of

8 competition between that case and the Jaffe gender case. In the Schieffelin v. Morgan Stanley

9 gender discrimination lawsuit, a class of 340 women in the Firm’s institutional equities division

10 recovered $54 million for gender discrimination claims plus a separate recovery for attorneys’

11 fees. Morgan Stanley recently settled a Fair Labor Standards Act case brought on behalf of

12 brokers in a single state, California, for $42.5 million. If anything, the race and color claims at

13 issue in this lawsuit under Section 1981 are more valuable than the gender discrimination claims

14 under Title VII given that Section 1981 has a longer statute of limitations and no cap on

15 compensatory damages.

16

Aggravating the problem, a substantial portion of the Settlement Fund will not be

17 available to class members, as it will be depleted for payments to the named plaintiff, all

18 attorneys’ fees and costs, all costs related to the Settlement (including for notice, claims

19 processing, legal and tax advice and preparation, and the Special Master’s fees and expenses), and

20 taxes. See Docket No. 87-2 at 52 (Stlmt. at 36). The Settlement neither specifies these fees and

21 costs, nor sets limits on fees and costs to be paid from the Fund. The Settlement also allows for

22 Morgan Stanley to receive a “credit,” further reducing the Settlement Fund, if more than an

23 undisclosed number of class members opt out. See Docket No. 87-2 at 30 (Stlmt. at 14). It is

24
25 9 Morgan Stanley sought to justify the comparatively low Augst-Johnson settlement gender settlement fund by asserting, essentially, that the industry’s treatment of women had changed in
26 the decade since the large Cremin and Martens cases. Without conceding the accuracy of this statement, the same cannot be said about the discriminatory treatment of African-Americans.
27 Based on the Objectors’ experiences at Morgan Stanley and knowledge of the industry, conditions for African-Americans at Morgan Stanley have not improved in the last decade.
28

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1 therefore not possible for this Court or class members to assess what amount will actually be

2 available for relief to class members.

3

In any event, the relief for an individual class member will be grossly inadequate.

4 Putative Class Counsel have requested approximately $1.55 million for attorneys fees. Docket

5 No. 87-2 at 105 (Notice to Class at 15). After subtracting just these attorneys’ fees, and without

6 consideration of any other costs and fees that will come from the fund, class members could

7 receive a maximum of $11,000 on a pro rata basis for discrimination suffered over a period

8 exceeding five years. This amount is trivial compared to the losses suffered by class members,

9 and in light of the Firm’s rampant discrimination and the fact that the annual earnings of Morgan 10 Stanley’s FAs routinely exceed $200,000.10 Because of their high earnings potential, it is not

11 uncommon to see discrimination verdicts for individual Financial Advisors in the millions. See,

12 e.g., Ex. 16, Sumner v. Merrill Lynch (sex discrimination verdict of $2.2 million); Keys v. Smith

13 Barney (sex discrimination verdict of $3 million); Flockhart v. Iowa Beef Processors, 192 F.

14 Supp. 2d 947, 979 (N.D. Ia. 2001) (damages in excess of $500,000 awarded in individual sex

15 discrimination case where plaintiff, a supply clerk, earned under $10 per hour).

16

The inadequacy of the Settlement’s financial provisions is also demonstrated by the

17 actions of the named plaintiffs. One of the best tests of the fairness of a proposed settlement is

18 whether the named plaintiffs and class representatives will agree, without added incentives or

19 side-deals, to participate in the settlement on the same terms as other class members. Plaintiff

20 Williams apparently concluded that the proposed settlement would not provide sufficient relief

21 for her legal claims and has opted out of the Jaffe Settlement to pursue her individual claims of

22 discrimination. Plaintiff Curtis-Bauer has not been forced to stand in the shoes of the class in

23 order to gauge the fairness of the Settlement, as she will receive an additional $150,000 in

24 payments from the fund that are not available to other class members. Without these additional

25
26 10 These damages include denial of business opportunities and management positions and loss of FA positions. Damages that result from discriminatory terminations and constructive discharge
27 can also be substantial, including losses of a broker’s book of business. See, e.g., Ex. 5, Ltr. from M. Mabon.
28

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1 payments, would Ms. Curtis-Bauer have accepted this Settlement as fair to her or to absent class

2 members?

3

B.

4

The “Programmatic Relief” Is Inadequate Because It Was Not Negotiated By Adequate Class Representatives And Does Not Constitute Consideration For This Lawsuit.

5

The Moore group anticipates that much emphasis will be placed on the Programmatic

6 Relief by the proponents of the Settlement. However, the Programmatic Relief was not

7 negotiated as part of this Settlement, as it is nearly a carbon copy of the relief set forth in the

8 Augst-Johnson gender discrimination settlement. Morgan Stanley is legally obligated to

9 implement the vast majority of this relief under the Augst-Johnson consent decree, regardless of

10 whether the Jaffe settlement is approved, including company-wide policies that apply to all FAs,

11 regardless or race or color. As a result, it cannot be consideration for the relinquishment of class

12 members’ rights in this case. Morgan Stanley cannot use as consideration in two different

13 lawsuits the same programs or funds.

14

For example, proponents of the Settlement herald the Power Ranking system and account

15 distribution policy, yet concede that these same policies were presented to the Augst-Johnson

16 class and as part of that settlement. Clearly, if Morgan Stanley is obligated to follow the Power

17 Ranking, it cannot constitute the consideration for this Settlement.

18

Comparing the diversity initiatives presented in Augst-Johnson to those presented here

19 confirms that there are few new obligations undertaken by Morgan Stanley that are above and

20 beyond what has been ordered by the Court in Augst-Johnson. Nevertheless, Morgan Stanley

21 attempts to “double-count” the $7.5 million value of this relief designated under the Augst-

22 Johnson consent decree. Thus, Morgan Stanley simply seeks to settle two claims for the price of

23 one. As an analogy, no Court would allow Morgan Stanley to deplete the Augst-Johnson

24 common monetary fund to satisfy race or color claims. Yet what Morgan Stanley proposes is

25 that without notice to the Augst-Johnson class the same consultants and diversity monitors

26 address both gender and race or color concerns. Clearly, the Augst-Johnson class was never told

27 that the initiatives would have to satisfy not only gender concerns but race or color as well. The

28 flip side of this situation is that sharing the Augst-Johnson programmatic relief not only

20

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1 shortchanges the Augst-Johnson class, it also deprives the Jaffe class of its own independent

2 consultants and narrowly crafted programmatic relief to address the problems of race or color 3 discrimination.11

4

Second, because the class was not adequately represented during the negotiations, the

5 Programmatic Relief was not negotiated by or with the assistance of knowledgeable class

6 members, like the Moore group, with a broad range of experiences and insight. Morgan

7 Stanley’s one-size-fits-all approach to “diversity” demonstrates it’s misunderstanding of the

8 obstacles facing its African-American and Latino employees. The working conditions and

9 treatment of women and African-Americans at Morgan Stanley are not identical, nor are the

10 reforms necessary to change the Firm’s discriminatory practices and attitudes the same. For

11 example, due in part to the low numbers of African-Americans, the isolation of and hostility

12 faced by African-Americans at Morgan Stanley is not a phenomenon systematically faced by

13 women at Morgan Stanley. Likewise, African-Americans face the additional hurdle of the racial

14 steering of clients. The Moore group understands that the results for African-Americans in terms

15 of compensation and attrition disparities are dramatically worse under Morgan Stanley’s

16 discriminatory practices and culture than for nearly any other demographic group. Involvement

17 of those directly affected by these practices is essential to developing effective solutions.

18

Likewise, Morgan Stanley has shut out the class members in both Augst-Johnson and

19 Jaffe from challenging the Power Ranking because Morgan Stanley refuses to disclose the Power

20 Ranking. Indeed, even though the Power Ranking has been approved by the Augst-Johnson

21 consent decree, Morgan Stanley and the putative Class Counsel filed the Power Ranking under

22

23 11 The Settlement seeks to double-count the same (inflated) $7.5 million value the parties placed 24 on the identical relief in the Augst-Johnson settlement. See, e.g., Ex 13, Augst-Johnson Stlmt at
41; Jaffe Stlmt at 46. The few provisions that do vary from the Augst-Johnson settlement merely 25 is a change the words from “women” to “African Americans and Latinos.” Compare, for
example, Section VII.C.4.b of the Augst-Johnson Settlement (“The Industrial Psychologists shall 26 make recommendations for increasing participation of women in the receipt of retiring Financial
Advisor’s [sic] books of business”) with Section VII.D.4.b of the Jaffe Settlement (“The 27 Industrial Psychologists shall make recommendations for increasing participation of African
Americans and Latinos in the receipt of retiring Financial Advisor’s [sic] books of business”).
28

21

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1 seal in this case. Thus, the only challenge that the Moore group can launch to the Power

2 Ranking is a general challenge to the concept of a Power Ranking. Had the Moore group been

3 allowed to participate in the discussion about whether a Power Ranking should be adopted to

4 distribute accounts, they certainly would have argued that until the gap in wages between

5 African-American and white FAs narrows, awarding points based on commission generated or

6 assets under management only institutionalizes and perpetuates the bias.

7

Further, it follows that if African-Americans are excluded from partnerships, and assets of

8 retiring FAs transfer through teams, African-Americans are disadvantaged by teams. The

9 transfer of team assets takes place as an exception to the Power Ranking but taints future Power

10 Rankings. FAs who receive assets through teams generate more commissions and increase their

11 Power Rankings. The Moore group certainly would have argued that until progress is made

12 under the Programmatic Relief, no Power Ranking should be used.

13

Finally, while meaningful injunctive relief should be a part of any resolution, it is

14 important to acknowledge the limitations of such relief. For years, Morgan Stanley has had a

15 high and racially disproportionate rate of attrition of African-Americans, allegedly over 80%.

16 Any programmatic relief will not benefit the majority of the class that has been driven out of

17 Morgan Stanley and whose careers have been irreparably harmed as a result of the Firm’s

18 rampant discrimination. Thus, for those class members, the only relief is monetary.

19

C. The Settlement Is Inadequate Because It Does Not Ensure Access To Courts

For Discrimination Claims And Excludes FAs With Management

20

Responsibilities From The Class.

1. Any Meaningful Settlement Should Include Morgan Stanley’s Agreement

21

To Maintain Class Members’ Access to Court for Discrimination Claims.

22 One of the most meaningful reforms brought about by litigation in the 1990s against Wall
23 Street firms was the end to mandatory arbitration of all claims before the National Association of
24 Securities Dealers and the New York Stock Exchange. Most employees of retail brokerage firms
25 now have the right to pursue their civil rights claims in the courts with full due process rights,
26 but some firms are attempting to return to mandatory arbitration and class action bans. Morgan
27 Stanley represents that it has an internal dispute resolution process that does not mandate
28

22

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1 arbitration of civil rights claims. Any meaningful settlement should include Morgan Stanley’s

2 agreement to continue to provide employees access to court, and not mandatory arbitration of

3 their civil rights claims, for the duration of any consent decree.

4

2. The Class Definition Is Unfairly Restrictive.

5

The class consists of FAs and FA Trainees at Morgan Stanley, but does not include FAs

6 who also hold management titles or responsibilities, such as Sales Managers, Assistant Branch

7 Managers, or FAs “In Charge” of Morgan Stanley offices. The settlement definition is too

8 narrow, as most of these “assistant” manager positions are, in fact, held by Morgan Stanley

9 employees who continue to manage a retail book of business, and thus act as both FAs and

10 managers. These “producing” managers are equally subjected to Morgan Stanley’s

11 discriminatory practices and should not be excluded from seeking relief for the harm they

12 suffered as a result of race discrimination.
13 IV. The Proposed Notice Is Confusing and Inaccurate and Does Not Provide Class Members Adequate Information Or Opportunity To Exercise Their Rights.
14 The Proposed Notice is confusing and inaccurate and would mislead class members about
15 the terms of the Settlement and their options. The inaccuracy in the Notice does not meet due
16 process requirements. Silber v. Mabon, 957 F.2d 697, 700 (9th Cir. 1992); Wright v. Collins, 766
17 F.2d 841, 848 (4th Cir. 1985). Most notably, the Notice does not clearly or accurately describe
18 what claims a class member will release and what award they can expect to receive, or how that
19 award will be calculated. See, e.g., Docket No. 87-2, Notice at ¶ 7, at 12-13. The Notice does
20 not inform class members how much of Fund will be available to the class, or what a class
21 member can reasonably expect in terms of an award.12 The Allocation Formula is confusing and
22 does not include information necessary for class members to assess whether they should
23 participate in the settlement or opt out. For example, class members are unlikely to know, or
24 have access to information explaining, whether their earnings are more or less than two standard
25

26 12 Other than the $1.55 million in attorneys fees, and the $150,000 additional payment to the 27 named plaintiff, no other information is disclosed as to the amount of fees, costs, and expenses
that will be paid from the funds and not available to class members.
28

23

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 27 of 28

1 deviations above Caucasian mean earnings, and consequently whether they are eligible for any

2 monetary award for the Earnings Regression Component of the formula. Further, this formula

3 does not consider the possibility that high performing African-Americans could have been

4 discriminated against as compared to high earnings non African-Americans, nor does it appear to

5 control for or take into account factors that would be necessary to value earnings disparities for

6 appropriate comparators.

7

The Notice and Settlement also describe very different Allocation Formulas for the

8 determination of class member settlement awards. Compare Docket No. 87-2 at 39-40 (Stlmt.

9 VIII.D. at 39), with Notice, Docket No. 87-2 at 103 (Notice at 8, 13-14). Settlement awards to

10 class members will be largely determined by a Claim Form Survey, which is 85% of the award

11 Allocation Formula. The Notice provides:

12

Points for the Claim Form survey will be allocated as follows: (1) Each claimant will

receive 1 point for each week worked between October 12, 2002 and [preliminary

13

approval date]…, (2) Claimants will be eligible for up to 50 points for responses to

questions … about extreme emotional distress; and (3) Claimants will be eligible for up to

14

50 points for responses to questions on the Claim Form about termination and

constructive discharge.

15 Docket No. 87-2 at 103 (Notice, ¶8 at 13) (also providing example of calculation).

16

17 The Settlement provides a different formula and calculation that includes no mention of points for

18 weeks employed by Morgan Stanley, and states that the:

Special Master shall make allocations under the Claim Form survey component by taking

19

into consideration: (1) information provided by Class Counsel and information contained

in the Claim Form submitted to the Special master concerning the Claimant’s (1)

20

individual contribution to the prosecution of this action; (ii) individual statements of

alleged race and/or color discrimination presented on the Claimant’s Claim Form; (iii)

21

individual statements supporting an award of compensatory damages; and (2) the release

of individual claims that go beyond the scope of the settled claims. 22

Docket No. 87-2 at 55 (Stlmt, VIII.D.2. at 40) 23
Class members’ awards could vary significantly under these two approaches, and class 24
members are entitled to accurate information in deciding whether to support or participate in the 25
settlement. 26
The Notice also provides inadequate time for class members to opt out, object, or file a 27
claim. The parties have proposed sending notice in December. Particularly in light of the holiday 28

24

Case 3:06-cv-03903-TEH Document 95 Filed 11/09/2007 Page 28 of 28

1 season, when many people travel, a number of class members may not receive timely notice.

2 Given the length and lack of clarity of the Notice and the important issues involved, class

3 members need adequate time to review and consider the materials and their options, consult with

4 an attorney if they so choose, and draft opt-outs, objections, or prepare and submit the fairly

5 extensive claims forms.

6

CONCLUSION

For the reasons stated herein, among others, the parties’ motion to preliminarily approve

7 the proposed settlement, provisionally certify the settlement class, issue notice, and order a

8 schedule for the settlement approval process should be denied with prejudice.

9

10 Dated: November 9, 2007 11

STOWELL & FRIEDMAN

12 13 14 15 Dated: November 9, 2007

By:____/S/ Mary Stowell__________________ Mary Stowell (Pro Hac Vice Pending)
NELSON LAW GROUP

16

17

By:_____/S/ Robert S. Nelson______________

18

Robert S. Nelson (SBN 220984)

19

Attorneys for PUTATIVE CLASS MEMBERS

AND OBJECTORS Ronald Moore, Morris Allen,

20

Jr., Michael Barnett, Anthony Bell, Patrick Carter,

Martin Dixon, Ernest Dorsey, Mary Evans, Janice

21

Grant, Justin Harris, Mark Lewers, Maurice Mabon,

22

Brian Roy, Marion Tucker and Carlton McDowell

23

24

25

26

27

28

25

 
 Case 3:06-cv-03903-TEH Document 101 Filed 11/19/2007 Page 1 of 19

1 James M. Finberg (SBN 114850) Eve H. Cervantez (SBN 164709)
2 ALTSHULER BERZON LLP 177 Post Street, Suite 300
3 San Francisco, CA 94108 Telephone: (415) 421-7151
4 Facsimile: (415) 362-8064 Email: jfinberg@altshulerberzon.com
5 Email: ecervantez@altshulerberzon.com
6 Kelly M. Dermody (SBN 171716) Heather H. Wong (SBN 238546)
7 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
8 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
9 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
10 Email: kdermody@lchb.com Email: hwong@lchb.com
11

Adam T. Klein (pro hac vice) Piper Hoffman (pro hac vice) Justin Schwartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005 Email: atk@outtengolden.com Email: ph@outtengolden.com Email: jms@outtengolden.com

12 Attorneys for the Plaintiffs

13

14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

16

17

DAISY JAFFE, DENISE WILLIAMS, and MARGARET BENAY CURTIS-BAUER,

18

on behalf of themselves and all others similarly situated,

19

Plaintiffs,

20

v.

21 MORGAN STANLEY DW, INC.,

22

Defendant.

23

24

Case No. C 06-3903 TEH

CLASS ACTION

REPLY MEMORANDUM OF PLAINTIFF CURTIS-BAUER IN SUPPORT OF MOTION FOR PRELIMINARY SETTLEMENT APPROVAL AND CLASS CERTIFICATION

Date: Time: Location:

December 3, 2007 10:00 a.m. Courtroom of the Hon. Thelton E. Henderson

25

26

27

28
REPLY MEMORANDUM OF PLAINTIFFS IN SUPPORT OF MOTION FOR PRELIMINARY SETTLEMENT APPROVAL
AND CLASS CERTIFICATION; CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 101 Filed 11/19/2007 Page 2 of 19

1

TABLE OF CONTENTS

2 TABLE OF AUTHORITIES .......................................................................................................... ii

3 INTRODUCTION .......................................................................................................................... 1

4 STATEMENT OF FACTS ............................................................................................................. 3

5

I. The Experienced Mediator Who Presided Over The Mediation

6

Discussions Confirms That The Proposed Settlement Was

Negotiated At Arms Length. ................................................................................... 3

7

II. The Interests Of African-American and Latino Financial Advisors

8

And Financial Advisor Registered Trainees Are Co-Extensive, And

Not Antagonistic, With Respect To The Claims In This Case,

9

And The Injunctive Relief Provided By The Proposed Settlement

10

Materially Benefits Both Groups. ........................................................................... 4

11 ARGUMENT .................................................................................................................................. 6

12

I. THE PROPOSED SETTLEMENT FALLS WITHIN THE RANGE

OF REASONABLENESS. ..................................................................................... 6 13

14

A. The Proposed Settlement Provides Extensive Injunctive

Relief. .......................................................................................................... 6

15 B. The Proposed Settlement Will Provide Substantial Monetary

16

Relief. .......................................................................................................... 8

17

II. MS. CURTIS-BAUER IS A TYPICAL AND ADEQUATE CLASS

REPRESENTATIVE. ........................................................................................... 11

18

A. Since the Interests of African-Americans and Latinos are

19

Co-Extensive, Not Antagonistic, Ms. Curtis-Bauer is a

20

Typical and Adequate Representative of both Latinos and

African-Americans.................................................................................... 11

21

B. The Settlement of Ms. Curtis-Bauer’s Non-Class Claims

22

and Payment of a Service Payment do not defeat Adequacy

or Typicality. ............................................................................................. 13 23

24 CONCLUSION ............................................................................................................................. 15

25

26

27

28

REPLY MEMORANDUM OF PLAINTIFFS IN SUPPORT OF

i

MOTION FOR PRELIMINARY SETTLEMENT APPROVAL

AND CLASS CERTIFICATION; CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 101 Filed 11/19/2007 Page 3 of 19

1

TABLE OF AUTHORITIES

2

FEDERAL CASES

3 Bartelson v. Dean Witter & Co.,

86 F.R.D. 657 (E.D. Pa. 1980) ................................................................................................ 13 4

Dukes v. WalMart Stores,

5

474 F.3d 1214 (9th Cir. 2007)....................................................................................... 5, 12, 13

6 Gaines v. Boston Herald, Inc.,

998 F. Supp. 91 (D. Mass. 1998) ............................................................................................ 12 7

Hanlon v. Chrysler Corp.,

8

150 F.3d 1011 (9th Cir. 1998)................................................................................................. 11

9 Jones v. Milwaukee County,

68 F.R.D. 638 (E.D. Wis. 1975) ............................................................................................. 12 10

Krzensniak v. Cendant Corp.,

11

2007 WL 1795703 (N.D. Cal. 2007)....................................................................................... 14

12 Leonard v. Southtec, LLC,

2005 WL 2177013 (M.D. Tenn. 2005) ................................................................................... 12 13

Martens v. Smith Barney, Inc.,

14

2003 U.S. Dist. LEXIS 11587 (S.D.N.Y. 2003) ....................................................................... 8

15 N.O.W. v. Bank of California,

1972 WL 246 (N.D. Cal. 1972) .............................................................................................. 12 16

O'Neal v. Wackenhut Servs. Inc.,

17

2006 U.S. Dist. LEXIS 34634 (E.D. Tenn. 2006) .................................................................. 14

18 Payne v. Travenol Labs., Inc.,

673 F.2d 798 (5th Cir. 1982), cert. denied 459 U.S. 1038................................................ 12, 13 19

Satchell v. FedEx Express,

20

2006 WL 3507913 (N.D. Cal. 2006)....................................................................................... 14

21 Staton v. Boeing,

327 F.3d 938 (9th Cir. 2003)............................................................................................. 11, 15 22

Tennie v. City of N.Y. Dept. of Social Servs.,

23

1987 WL. 6156 (S.D.N.Y. 1987) ............................................................................................ 12

24

MISCELLANEOUS

25 8 Newberg on Class Actions §24.54 (4th ed. 2002)...................................................................... 11

26 8 Newberg on Class Actions §24.129 (4th ed. 2002).............................................................. 13, 14

27

28

REPLY MEMORANDUM OF PLAINTIFFS IN SUPPORT OF

ii

MOTION FOR PRELIMINARY SETTLEMENT APPROVAL

AND CLASS CERTIFICATION; CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 101 Filed 11/19/2007 Page 4 of 19

1

INTRODUCTION

2

The question before this Court on Plaintiffs’ Motion for Preliminary Settlement Approval

3 is whether the proposed settlement is within the range of reasonableness such that notice to the

4 class of the settlement terms is appropriate. The answer is yes.

5

The proposed settlement, which was negotiated at arms-length by experienced and

6 informed counsel over many months in mediation sessions presided over by a skilled and

7 experienced mediator, will provide extensive injunctive relief and substantial monetary relief.

8 The injunctive relief, which exceeds the injunctive relief provided by the Settlement Agreement

9 in the Augst-Johnson gender discrimination action, will materially advance the goal of equal

10 opportunity for African-Americans and Latinos at Morgan Stanley. The $16 million of monetary

11 relief, which compares favorably to other settlements when viewed on an apples-to-apples basis,

12 will make over $14 million available to a relatively small number of class members without the

13 risk and expense of future litigation. The putative class members in this case should be given the

14 opportunity to learn of the terms of the proposed settlement and to comment on those terms.

15

Race discrimination class actions present an opportunity to make the world in which we

16 live a better place. Unlike most other settlement contexts, where the primary, and in most cases

17 the sole, measure of the success of the settlement is the amount of monetary relief available to

18 redress past harms, the mark of whether the resolution of a race discrimination class action is

19 truly successful is whether the agreed upon injunctive relief addresses the problems confronted by

20 class members so that current and future class members enjoy equal employment opportunity.

21 Judged by that measure, this proposed settlement is a success. Under the proposed Settlement

22 Agreement, Morgan Stanley will modify its account distribution, hiring, recruitment,

23 compensation, and retention policies and practices in ways that will advance opportunities and

24 equity for African-Americans and Latinos. The proposed Settlement Agreement ensures that

25 African-Americans and Latinos will benefit from changes in policies and practices, as well as

26 new programs, that are part of the Settlement Agreement in the Augst-Johnson gender

27 discrimination settlement (which largely addressed account distribution and compensation

28 issues). In addition, the proposed settlement provides relief beyond that provided for in the

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1 Augst-Johnson gender discrimination settlement, including relief focused on hiring, recruitment,

2 and retention issues that are of particular concern to African-Americans and Latinos.

3

In addition to providing extensive injunctive relief, the proposed settlement will provide

4 substantial monetary relief. When viewed on a per-class-member basis, taking into account the

5 weeks worked by class members, the proposed monetary relief provided for in this case is higher

6 than the monetary relief provided in the Augst-Johnson settlement that recently received final

7 settlement approval from the District Court of the District of Columbia. Many members of the

8 proposed class have contacted the firms serving as class counsel and indicated that they would be 9 interested in submitting claim forms in this proceeding.1 Individuals who do not believe the

10 monetary relief is adequate, including the persons objecting to preliminary approval, can opt out 11 of the settlement monetary relief class.2

12

Not only are the injunctive relief and monetary relief terms of the proposed settlement

13 well within the range of reasonableness, but Ms. Curtis-Bauer is a typical and adequate

14 representative of the claims of settlement class members. Ms. Curtis-Bauer was employed by

15 Morgan Stanley as a financial advisor during the class period. She was injured by the same

16 policies and practices that injured other class members in a similar manner. Compared to whites,

17 African-Americans and Latinos employed as Financial Advisors or Financial Advisor Registered

18 Trainees during the class period were compensated less, had higher turnover, received fewer

19 resources to do their jobs, and were hired in smaller numbers than one might have expected given

20 the available labor pool. The injunctive relief provided for in the proposed settlement addresses

21 these issues common to African-Americans and Latinos and will benefit both African-Americans

22 1 The Stowell & Friedman firm emphasizes that it represents individuals who worked in a variety
23 of positions, with a variety of seniorities, in a variety of locations. As the letters in support of the settlement, attached to the Declaration of Heather Wong as Exhibits A through J indicate, persons
24 in a variety of positions and seniorities, including Latinos and current employees, express support for the proposed settlement terms.
25 2 Plaintiffs note that of the twenty persons identified in the brief submitted by the Stowell & 26 Friedman firm, some are not members of the proposed class. For example, Mary Evans is a
Branch Manager, a job position not included within the proposed class. In addition, Justin Harris 27 was an applicant, but applicants are not included within the class definition. Since those persons
are not class members, they do not have standing to object to the proposed settlement. The 28 settlement in this case does not release their claims.

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1 and Latinos. The interests of African-Americans and Latinos in this case are not antagonistic, but

2 co-extensive. Accordingly, Ms. Curtis-Bauer is an appropriate class representative for the 3 proposed settlement class.3

4

Since Ms. Curtis-Bauer is a typical and adequate class representative, and it is uncontested

5 that the other prerequisites for class certification are met, class certification is appropriate. And

6 since the proposed settlement falls within the range of reasonableness, the standard for

7 preliminary approval is met. Based on the record before it, this Court should certify the class,

8 approve mailing of notice to the class informing class members of the settlement terms, and set a 9 final approval hearing where the response of class members can be considered.4

10

STATEMENT OF FACTS

11

I. The Experienced Mediator Who Presided Over The Mediation Discussions

Confirms That The Proposed Settlement Was Negotiated At Arms Length. 12

13

Hunter Hughes, the experienced mediator who presided over the negotiations in this case,

14 in addition to the negotiations in the Augst-Johnson case, confirms that the proposed settlement in

15 this case is non collusive and was negotiated at arms’ length:

16

The mediation of this litigation was difficult and time consuming. It

17

first involved informal discovery, data collection, and expert analyses. In conjunction therewith and thereafter, there were multiple in-person sessions

18

in San Francisco, New York, and Charleston, South Carolina; scores of

telephonic conferences and settlement calls; and finally negotiations over

19

numerous proposals and counter-proposals between the parties. I actively

oversaw the negotiations between the parties over a period of

20

approximately five months.

21 3 The Stowell & Friedman law firm attempts to make much of the fact that Ms. Curtis-Bauer will
22 be applying to the Court for a relatively modest service payment and is settling her non-class claims. Neither of those things is unusual, and neither renders her inadequate or atypical as a
23 class representative. See infra at Part II.B, pp.14-15. Both will be fully disclosed in the notice to class members.
24 4 The Brief of the Stowell & Friedman firm contains a number of inaccurate and misleading 25 statements. Because most of them are irrelevant to the issues before this Court, Counsel for
Plaintiff Curtis-Bauer will not attempt to rebut each of them in this response, but instead only 26 address those that are most egregious and relevant. For example, the suggestion that counsel for
Plaintiff Curtis-Bauer were soliciting plaintiffs is baseless; as the Declaration of Health Wong 27 makes clear, counsel for Plaintiff Curtis-Bauer investigated the facts of their case by interviewing
class members, and kept class members informed of case developments by responding to class 28 member inquires – exactly the tasks counsel should perform. Wong Decl. at ¶¶3-13.

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Case 3:06-cv-03903-TEH Document 101 Filed 11/19/2007 Page 7 of 19

1

Throughout the process, counsel for the parties advocated their

clients’ positions vigorously and at arms’ length. In fact, negotiations

2

almost reached impasse on more than one occasion when one side or the

3

other chose not to negotiate off what I considered principled positions.

The proposed settlement that voluntarily was reached was the result of

4

well-informed, non-collusive negotiations. There was no discussion of

attorneys’ fees until after the parties had reached resolution on the class

5

claims. Notably, attorneys’ fees and costs were in my experience very

reasonable for a case of this magnitude. More importantly, though, they

6

were not a factor in the substantive negotiations of class issues.

7

As a result of Class Counsel’s strongly advanced and argued

8

positions, the injunctive relief in this settlement includes provisions that

are tailored to the specific facts and issues in this case and go beyond the

9

injunctive relief in the Augst-Johnson case in significant ways that can

materially benefit African-Americans and Latinos. 10

11

Based on my own observation of (and participation in) the mediation sessions and the information exchanged, I strongly

12

recommended to the parties that the parties accept the terms of the

settlement which are reflected in the proposed Settlement Agreement.

13

While it is, of course, ultimately the Court’s responsibility to exercise its

independent judgment to determine whether this proposed settlement in

14

this case is fair, adequate and reasonable, based on having mediated and

15

litigated more than 40 large class discrimination settlements, I believe the proposed decree is an excellent settlement, and I support its approval.

16 Report of Mediator Hunter R. Hughes III at ¶¶3 to 6.

17

18

II. The Interests Of African-American and Latino Financial Advisors And

Financial Advisor Registered Trainees Are Co-Extensive, And Not

19

Antagonistic, With Respect To The Claims In This Case, And The Injunctive

Relief Provided By The Proposed Settlement Materially Benefits Both

20

Groups.

21

On average, African-American and Latino Financial Advisors at Morgan Stanley are

22 compensated less than white Financial Advisors. (Reply Decl. of Adam Klein at ¶4.) Plaintiffs

23 in this case have asserted that this was based in large part on Morgan Stanley’s system of account

24 distribution, which was weighted heavily toward historical factors such as assets under

25 management and past production. (Second Amended Complaint at ¶¶2-8, 27-32.) As part of the

26 injunctive relief in this case, Morgan Stanley will de-emphasize the importance of those historical

27 factors, allowing brokers who may not have benefited under the prior compensation scheme to

28

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1 compete more favorably going forward. (Settlement Agreement, Section VII.C.) That change

2 will benefit both African-Americans and Latinos.

3

African-American and Latino Financial Advisor Registered Trainees and Financial

4 Advisors are also similarly situated in that both groups are hired into Financial Advisor and 5 Financial Advisor Registered Trainee positions at lower rates than some might expect.5 (Reply

6 Decl. of Adam Klein at ¶5.) The proposed Settlement Agreement requires Morgan Stanley to

7 take specific steps to increase the representation of qualified African-Americans and Latinos in 8 Financial Advisor and Financial Advisor Registered Trainee positions.6 (Settlement Agreement

9 Sections VII.A., VII.B, VII.G.)

10

African-Americans and Latinos are also similarly situated with respect to turnover from

11 the Financial Advisor Registered Trainee and Financial Advisor positions. Both groups have

12 substantially higher rates of turnover than whites. (Reply Decl. of Adam Klein at ¶6.) The

13 proposed Settlement Agreement contains provisions designed to increase retention and decrease

14 the turnover rates of African-American and Latino Financial Advisor Registered Trainees and

15 Financial Advisors. (Settlement Agreement Section VII.C, VII.G.) These provisions will benefit 16 both African-American and Latino class members.7

17

18

19

20 5 Not surprisingly, counsel for plaintiff Curtis-Bauer and counsel for Morgan Stanley disagree 21 about the appropriate qualified labor pool.
6 Notwithstanding this substantial injunctive relief, there is no release of applicant claims under 22 the Settlement Agreement.
23 7 The Stowell & Friedman firm assumes that African-Americans and Latinos have different interests, but has presented no evidence that the interests of these groups are antagonistic, as
24 opposed to co-extensive. Counsel for plaintiff Curtis-Bauer do not know what the Stowell & Friedman firm is referring to on p.18 of its brief where it states, without citation, that “during a
25 phone conversation with counsel for the Moore group, counsel for the Jaffe plaintiffs conceded that the workforce data revealed significant differences in outcomes for African-Americans and
26 Latinos, including their representation, retention, and compensation.” The numbers for the two groups are not identical, but that is not the standard. See Dukes v. WalMart Stores, 474 F.3d
27 1214, 1232 (9th Cir. 2007) (even if different class members “may have received different levels of pay and were denied promotion at different rates,” typicality is satisfied if “the discrimination
28 they allegedly suffered occurred through an alleged common practice”).

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1

ARGUMENT

2 I. 3

THE PROPOSED SETTLEMENT FALLS WITHIN THE RANGE OF REASONABLENESS.

4

A. The Proposed Settlement Provides Extensive Injunctive Relief.

5

The proposed settlement provides extensive injunctive relief. The proposed Settlement

6 Agreement ensures that the policy changes and new programs of the Augst-Johnson settlement

7 will benefit African-Americans and Latinos, and provides substantial injunctive relief beyond that

8 provided in the Augst-Johnson settlement.

9

With respect to account distribution and compensation issues, this Settlement Agreement,

10 unlike the one in Augst-Johnson, ensures that “the Industrial Psychologists will also review

11 annually the actual account distributions and related compensation data and the rankings of

12 African American and Latino Financial Advisors on each of the individual factors and use such

13 information considering recommendations, if any, for changes to the Power Ranking Formula.”

14 (Section VII.D.2.d.) Under this Settlement Agreement, not only will the system used for account

15 distribution de-emphasize historical measures such as assets under management and past 16 production8 – which have disadvantaged African-Americans, Latinos, and women in a similar

17 way – but, in addition, the system will be continuously monitored, and, if appropriate, further

18 improved. Id.

19

This Settlement Agreement also contains provisions, not included in the Augst-Johnson

20 Settlement Agreement, designed to address hiring, recruitment, and retention issues of particular

21 concern to African-Americans and Latinos. For example, Section VII.B specifies a number of

22 specific steps Morgan Stanley must take to increase the recruitment of qualified diverse

23 candidates, including qualified Latinos and African-Americans. Sections VII.C and VII.G require

24 reporting on the success of recruiting efforts. Section VII.C requires that a meaningful

25 component of Branch Manager compensation be tied to diversity success.

26 8 Significantly, the participation of counsel for plaintiff Curtis-Bauer in the negotiations over the 27 formula to be used for account distribution led to even greater de-emphasis on historical factors
than had originally been contemplated by counsel for the plaintiffs in Augst-Johnson and counsel 28 for Morgan Stanley. (Reply Decl. of Adam Klein at ¶9.)

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1

In order to make Morgan Stanley’s recruitment and retention efforts more successful,

2 Section VII.G.2 provides that Morgan Stanley shall retain Industrial Organizational Psychologists

3 to conduct a job analysis for the Financial Advisor position, and to make recommendations about

4 ways of improving representation rates and decreasing departure rates of African-Americans and

5 Latinos in the Financial Advisor position. Section VII.E requires Morgan Stanley to conduct exit

6 interviews of Financial Advisors and Financial Advisor Registered Trainees who terminate

7 voluntarily in order to get a better understanding as to the reason for the departure.

8

With respect to retention, Section VII.C of the Decree requires that Morgan Stanley assist

9 Financial Advisor Trainees to obtain the Series 7 registration. In Section VII.G.2, the Industrial

10 Psychologists are tasked with making recommendations on how to increase Series 7 passage rates

11 of African-American and Latino Advisor Trainees.

12

Section VII.C also requires diversity training that incorporates elements of the Implicit

13 Association Test – a measure of implicit bias – or a similar tool agreed upon by the parties.

14 Counsel for plaintiff Curtis-Bauer believe this provision, which recognizes the importance of

15 implicit bias, is ground-breaking. Recognizing that much diversity training is unsuccessful since

16 the persons being trained often say “this does not apply to me,” these provisions use the latest

17 research to make the diversity training provided truly meaningful.

18

All of these provisions were negotiated as part of this lawsuit. None are part of the Augst-

19 Johnson Decree. Accordingly, the suggestion that Morgan Stanley would be legally obligated to 20 implement this injunctive relief without the approval of this Settlement is not accurate.9

21

The injunctive relief provided by this proposed Settlement Agreement is real and

22 meaningful. It will enhance equal opportunity for Latino and African-American Financial

23 Advisors and Financial Advisor Registered Trainees at Morgan Stanley. The injunctive relief

24 alone makes this settlement worthy of preliminary approval.

25

26
27 9 The fact the Stowell & Friedman law firm sent a letter to this Court on October 23, 2007, criticizing the settlement as inadequate before it “fully” read the terms of the injunctive relief is
28 telling. (October 23, 2007 Letter at 1 n.1.)

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1

B. The Proposed Settlement Will Provide Substantial Monetary Relief.

2

The proposed settlement provides monetary relief in the amount of $16 million, plus

3 interest at a rate of 5% from the date of preliminary approval until ten days after the Effective

4 Date (i.e., after final approval and the resolution of any appeals), and then will earn additional

5 interest as part of the Qualified Settlement Fund until all settlement amounts have been paid. If

6 the settlement funds are distributed approximately six months after preliminary approval, the

7 settlement fund will increase by approximately $400,000. The interest earned on the settlement

8 fund is expected to be sufficient to cover the cost of claims administration, opt out credits, any

9 service payment awarded to Ms. Curtis-Bauer, and the settlement of Ms. Curtis-Bauer’s non-class

10 claims. Accordingly, assuming the Court awards the attorneys’ fees and service payments 11 requested,10 after deduction of attorneys’ fees for work prior to approval ($800,000), attorneys’

12 fees for five years of monitoring ($750,000), the cost of notice and claims administration (less 13 than $50,000),11 service payment ($25,000), and the settlement of Ms. Curtis-Bauer’s non-class

14 claims ($125,000), over $14.65 million will be left for distribution to members of the settlement

15 class who submit a timely and valid claim form. This money will be available to all settlement

16 class members who submit a timely and valid claim form, without the need for any additional 17 litigation or arbitration proceedings.12

18
19 10 The Notice correctly states that class counsel will move for an award of $1.55 million in fees (less than 10% of the common fund), and that Ms. Curtis-Bauer will apply for a service award of
20 $25,000. To the extent the Court reduces the attorneys’ fees or service payments requested, the settlement fund will be even higher.
21 11 See Reply Finberg Declaration, ¶5.
22 12 In the Martens case cited by the Stowell & Friedman law firm, in contrast, there was no settlement fund at all. Class members could only participate and obtain money by going through
23 (and winning) an adversary arbitration proceeding. The overwhelming majority of potential class members chose not to do so, and over 92% of class members released their claims but received
24 nothing at all. Only approximately 8% of the class members who were willing to go through that adversarial arbitration proceeding collected any money. Martens v. Smith Barney, Inc., 2003 U.S.
25 Dist. LEXIS 11587 (S.D.N.Y. 2003) (“[t]his [Martens v. Smith Barney] was a case with approximately 23,000 class members . . . . Roughly 1,900 initial submissions were filed with
26 Smith Barney . . . .”) (internal quotations omitted). Taking into account the total class of approximately 23,000 persons who released claims, the total recovery per person in Martens was
27 only an average payment of $4,347 per class member, which is slightly over one third of the average monetary recovery in this case, assuming 100% participation by class members who
28 released claims.

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1

Before negotiating class monetary relief, counsel for plaintiff Curtis-Bauer obtained

2 comprehensive personnel and compensation data from defendant, retained an expert statistician to

3 help them analyze that data, and reviewed both liability and damages analyses. The $16 million

4 settlement fund was arrived at after a good faith negotiation that took into account the maximum

5 amount that plaintiffs could recover if a class was certified and plaintiffs prevailed on liability,

6 but reflected the risk that plaintiffs would lose at one or more stages of the proceeding or receive

7 less in damages than they requested at trial.

8

The law firm challenging this settlement asserts that the $16 million negotiated by

9 informed counsel is inadequate, but concedes that they have not obtained or reviewed any data.

10 Accordingly, they have no factual basis for rendering an opinion on either the class’s likelihood

11 of succeeding on its compensation claims, or on the amount the class would likely recover if it

12 succeeded. Their opinion that the $16 million is inadequate is not supported by the facts in this

13 case.

14

In an attempt to bolster their position that the $16 million in monetary relief proposed in

15 this case is inadequate, objectors point to a number of other settlements that they describe as

16 comparable settlements. Those settlements, however, were reached in cases involving different

17 industries (soda bottling and petroleum exploration, refining, and distribution), different claims

18 (wage/hour), different companies (Merrill Lynch), different facts, and much larger numbers of

19 class members. Some of these cases did not even involve settlement funds at all, but instead

20 required class members to participate in adversarial proceedings in order to recover.

21 Comparisons to cases involving such widely different claims and facts are not meaningful or 22 useful.13

23

The closest comparable to which objectors point is the Augst-Johnson gender

24 discrimination case against Morgan Stanley involving compensation discrimination claims arising

25 out of Morgan Stanley’s account distribution and compensation policies – claims and policies at

26
27 13 The District Court in the Augst-Johnson case rejected an almost identical objection by the Stowell & Friedman firm to the Augst-Johnson settlement, when it approved that settlement on
28 October 27, 2007. (Reply Decl. of James M. Finberg, Exh. C.)

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1 issue in this case with respect to the same company. An analysis of the monetary relief in that

2 settlement compared to the monetary relief in the proposed settlement before this Court, however,

3 establishes that the proposed monetary relief in this case is even stronger than the monetary relief

4 that was approved in Augst-Johnson. That is true for several reasons, even though the total

5 nominal amount of the Augst-Johnson settlement is higher then the total nominal amount here.

6 First, a much higher amount of attorneys’ fees was claimed in the Augst-Johnson settlement --

7 $13,500,000 in fees in Augst-Johnson, compared to only $1,550,000 in this case, covering both

8 work through final approval and five years of monitoring. (Augst-Johnson Final Order, Reply

9 Finberg Decl. Exh. C; Jaffe Proposed Notice of Settlement, Docket Entry 87(2), Exh. C.)

10 Second, the Augst-Johnson class contained many more class members – 2,867 class members,

11 compared to only approximately 1,300 in this case. (Augst-Johnson Final Order, Reply Finberg

12 Decl. Exh. C; Reply Klein Decl. ¶7.) Third, because African-Americans and Latinos have

13 particularly high turnover compared to whites, members of this class had fewer average weeks 14 worked than the members of the Augst-Johnson class.14 (Reply Klein Decl. ¶8.) In order to

15 make an apples-to-apples comparison between the monetary relief in the two settlements, one

16 must take these factors into account. If one does, the comparison is favorable to the proposed

17 settlement before this Court. The per-person average award in the proposed settlement and the

18 Augst-Johnson settlement, net after attorneys’ fees and assuming equal participation rates, are

19 nearly identical. When number of weeks worked is taken into account, the per-person per-week 20 amount paid in this proposed settlement is higher than in the Augst-Johnson settlement.15

21 14 In addition, the class release in this case is narrower than the claims released by the class in
22 Augst-Johnson. (Settlement Agreement Section V.)
23 15 Objectors’ criticisms of the proposed notice are without merit. The proposed notice does not include a specific statement of the amount that each class member can expect in terms of an
24 award, because award amounts cannot be determined until all claims have been submitted. With respect to items to be deducted from the settlement fund, counsels’ expectation is that the costs of
25 claims administration (less than $50,000), combined with the service payment ($25,000) and 26 settlement of non-class claims to plaintiff Curtis-Bauer ($125,000), can be paid out of the interest
that will accrue on the settlement fund ($400,000).
27 The allocation formula set forth in the proposed notice gives class members adequate
28 information and mirrors similar formulas typically approved in class settlements. The allocation

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1 II. 2 3 4

MS. CURTIS-BAUER IS A TYPICAL AND ADEQUATE CLASS REPRESENTATIVE.
A. Since the Interests of African-Americans and Latinos are Co-Extensive, Not Antagonistic, Ms. Curtis-Bauer is a Typical and Adequate Representative of both Latinos and African-Americans.

5

Where, as here, African-Americans and Latinos were subject to the same discriminatory

6 policies and suffered harm in the same way from those policies, a member of one of the two

7 protected groups can represent one class consisting of both protected groups. As Newberg on

8 Class Actions states:

9

In suits alleging racial or national origin discrimination when claims of

sex discrimination are not at issue, courts appear willing to allow one

10

plaintiff to represent another or several minority or affected groups in

11

employment suits, when the several groups are similarly situated with

respect to the discrimination issues in the pleadings. For example, classes

12

have been certified in which African-Americans have represented

Mexican-Americans, Chicanos, those with Spanish surnames, Native

13

Americans, and Asians.

14 8 Newberg on Class Actions §24.54 (4th ed. 2002).

15

The Newberg treatise is fully consistent with the Ninth Circuit’s holdings regarding the

16 adequacy and typicality requirements. Staton v. Boeing, 327 F.3d 938, 957 (9th Cir. 2003);

17 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). A class representative is

18 adequate absent any conflicts of interest with the proposed class. See, e.g., Staton, 327 F.3d at

19 957. Under the “permissive standards” for typicality, a class representative’s claims are typical

20 formula takes into account whether a class member’s earnings are within two standard deviations
21 of the mean earnings of Caucasians. The court-approved settlement agreement in Augst-Johnson

included the same factor. Eighty-five percent of the allocation formula is determined by each 22 individual’s tenure at Morgan Stanley and personal circumstances, factors about which class

23

members have knowledge. Contrary to the Stowell & Friedman firm’s assertions, the allocation formula set forth in the proposed notice is entirely consistent with the allocation formula in the

24 Settlement Agreement. The description of the allocation formula in the proposed notice is simply more specific than the description in the Settlement Agreement, and gives class members even
25 more information to assist their decision-making.

With respect to the release, the notice quotes the express language of the release of claims, 26 so class members can easily assess which claims would be preserved and released.

27

Of course, the parties are certainly open to suggestions the Court might offer that would

reasonably improve the effectiveness of the proposed notice.

28

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1 “‘if they are reasonably coextensive with those of absent class members; they need not be

2 substantially identical.’” Dukes v. Wal-Mart Stores, 474 F.3d 1214, 1232 (9th Cir. 2007) (citing

3 Hanlon, 150 F.3d at 1020). “‘The test of typicality is whether other members have the same or

4 similar injury, whether the action is based on conduct which is not unique to the named plaintiffs,

5 and whether other class members have been injured by the same conduct.’” Dukes, 474 F.3d at

6 1232 (citing Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)).

7

As long as a class representative satisfies these standards, there is no requirement that he

8 or she be of the same race or ethnicity as all of the class members. See, e.g., N.O.W. v. Bank of

9 California, 1972 WL 246, *4 (N.D. Cal. 1972) (African-American named plaintiff can represent

10 all African-American and Chicano class members discriminated against on the basis of race);

11 Leonard v. Southtec, LLC, 2005 WL 2177013, at *10-11 (M.D. Tenn. 2005) (African-American

12 named plaintiffs can represent Hispanic class members because “there is a common injury of

13 discriminatory treatment and a common interest in ending the alleged discriminatory treatment”

14 and no conflicts of interest); Gaines v. Boston Herald, Inc., 998 F. Supp. 91, 112 (D. Mass. 1998)

15 (African-American named plaintiff can represent Hispanic class members because both groups

16 were affected by same employment practices and any injunctive relieve award would cover class

17 as a whole); Tennie v. City of N.Y. Dept. of Social Servs., 1987 WL 6156, at *3 (S.D.N.Y. 1987)

18 (African-American female named plaintiffs can represent Hispanic female class members because

19 both allege “they have been discriminated against in precisely the same manner”); Jones v.

20 Milwaukee County, 68 F.R.D. 638, 640-641 (E.D. Wis. 1975) (African-American named

21 plaintiffs can represent Spanish-surnamed and American Indian class members).

22

The cases cited by objectors are distinguishable. In Payne v. Travenol Labs., Inc., 673

23 F.2d 798, 810 (5th Cir. 1982), cert. denied 459 U.S. 1038, the Fifth Circuit held that an African-

24 American female could not represent African-American male class members because there was

25 an actual conflict between men and women. The female plaintiffs alleged that men were favored

26 at their expense; and the interests of the male class members directly conflicted with the interests 27 of the female plaintiffs. Payne, 673 F.2d at 810-11.16

28 16 Moreover, the Fifth Circuit emphasized that its holding was not a per se rule: “the court must

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1

Here, in contrast, there is no allegation of any conflict between African-Americans and

2 Latinos. No one has suggested that either group benefited at the expense of the other. Indeed,

3 objectors speculate only that African-Americans might have suffered more than Latinos from

4 Morgan Stanley’s discriminatory practices. But the class representative’s claims “‘need not be

5 substantially identical’” to the claims of all class members. Dukes, 474 F.3d at 1232 (citing

6 Hanlon, 150 F.3d at 1020). Indeed, even if there were differences in the degree of negative

7 impact resulting from discriminatory policies and practices, those differences would not defeat

8 adequacy or typicality; class members need only suffer a “similar injury from a general policy of

9 employment discrimination.” Dukes, 474 F.3d at 1232. The Ninth Circuit has explicitly held that

10 even if different class members “may have received different levels of pay and were denied

11 promotion or promoted at different rates,” typicality is satisfied if “the discrimination they

12 allegedly suffered occurred through an alleged common practice.” Dukes, 474 F.3d at 1232.

13 African-Americans and Latinos here were subject to the same discriminatory policies and

14 suffered harm in the same way from those policies, and the remedies provided in the proposed

15 settlement agreement will benefit all class members in the same way. Therefore, Ms. Curtis-

16 Bauer satisfies the settled standard for typicality in the Ninth Circuit. Dukes, 474 F.3d at 1232

17 (citing Hanon, 976 F.2d at 508).

18 B. 19

The Settlement of Ms. Curtis-Bauer’s Non-Class Claims and Payment of a Service Payment do not defeat Adequacy or Typicality.

20

The settlement of non-class claims by, and payment of a service payment to, a class

21 representative do not create conflicts between the class representative and the class members; nor

22 do they destroy typicality or adequacy. As the Newberg treatise states, “[s]ettlement agreements

23 in employment discrimination class actions may contain provisions awarding monetary recoveries

24 examine the interlacing allegations of race and sex discrimination to determine whether an actual
25 conflict exists. For example, if a black female plaintiff argues that the employer favors white males to the detriment of both females and blacks, there is no inherent obstacle to her
26 representation of both groups.” Payne, 673 F.2d at 811. In Bartelson v. Dean Witter & Co., 86 F.R.D. 657, 669 (E.D. Pa. 1980), a white female class representative with sex discrimination
27 claims sought to represent minority class members with race discrimination claims. The court held that the factual circumstances and legal theory underlying the class representative’s claim for
28 sex discrimination were not typical of claims of race discrimination. Bartelson, 86 F.R.D. at 661.

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1 and other special benefits to named plaintiffs for their unique claims.” 8 Newberg on Class 2 Actions §24.129 (4th ed. 2002). This District has made clear that non-class claims alleged by a

3 class representative do not render the class representative non-typical. Satchell v. FedEx Express,

4 2006 WL 3507913, at *1 (N.D. Cal. 2006). Similarly, the existence of non-class claims does not

5 render the class representative inadequate unless those claims lead to an unfavorable settlement

6 agreement or refusal to enter a settlement agreement. Krzensniak v. Cendant Corp., 2007 WL

7 1795703 (N.D. Cal. 2007) (James, M.J.) (citing In re Activision Sec. Litigation, 621 F. Supp. 415

8 (N.D. Cal. 1985)). Here, the proposed settlement agreement is favorable to all class members; the

9 settlement of Ms. Curtis-Bauer’s non-class claims does not affect the injunctive relief, and does

10 not significantly diminish the amount of monetary relief available to the remainder of the class,

11 since it is a relatively small sum (less than 1% of the monetary relief to the class) that can be paid 12 from the interest earned on the settlement fund.17 Ms. Curtis-Bauer is signing a much broader

13 release of claims against the defendant than will other class members. While Ms. Curtis-Bauer 14 will release all claims of any kind against Morgan Stanley,18 other class members will release

15 only claims based on race and/or color discrimination based on the facts alleged in the Second

16 Amended Complaint. Specifically, class members will not release any termination, advancement

17 into management, constructive discharge or harassment claims arising from circumstances other

18 than low production, failure to satisfy position requirements, failure to satisfy requirements of the

19 training program, production related reductions-in-force, or other production based performance

20

21 17 Objectors conflate the issue of typicality with the requirements of Rule 23(b), arguing that because Ms. Curtis-Bauer will receive a settlement payment for her non-class claims, her

22 “individual claims appear to predominate over her race discrimination claims, so they cannot be typical of the class.” (Brf. at 12 (citing O’Neal v. Wackenhut Servs. Inc., 2006 U.S. Dist. LEXIS

23 34634, at *57 (E.D. Tenn. 2006).) Here, however, the extensive injunctive relief provided predominates over any individual claims. The case cited by objectors is factually distinguishable

24 in several other respects as well. In O’Neal, the court found the class representatives to be inadequate and non-typical representatives of a class of applicants because one had been

25 terminated from two previous jobs, and there was evidence that the other had been unprofessional and rude to defendants’ staff during his job interview. In this case, there are no facts indicating

26

that Ms. Curtis-Bauer has weaker claims than the remainder of the class. 18 Ms. Curtis-Bauer heard racial epithets in her workplace and was terminated; she has a variety

27 of non-class claims including race harassment, constructive discharge, wrongful termination, and interference with prospective business advantage, all of which she releases as part of a broader

28 release than the class.

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1 based performance related terminations. The settlement agreement therefore preserves any

2 additional class member claims, and the fact of Ms. Curtis-Bauer’s separate release does not

3 indicate any conflict of interest with those class members.

4

Further, “named plaintiffs . . . are eligible for reasonable incentive payments.” Staton, 327

5 F.3d at 977. The requested service payment of $25,000 to Ms. Curtis-Bauer would compensate

6 her for the time and effort she expended to protect the interests of the class and the risk she has

7 taken that her future career prospects in the financial services industry will be diminished due to

8 her efforts on behalf of the class. See Staton, 327 F.3d at 977. If this Court finds that $25,000

9 exceeds the value of the time and effort Ms. Curtis-Bauer expended, it can reduce, or deny, her

10 application for the service payment, and any excess amount will revert to the class.

11

The objectors cite Staton for the proposition that “[c]lass representatives cannot receive

12 disproportionately special treatment” (brf. at 11), but the facts in Staton are distinguishable from

13 the present case. In Staton, a group of 264 individuals, less than 2% of the class, negotiated

14 separate payments totaling $3.77 million, more than half of the total $7.3 million monetary

15 award. Staton, 327 F.3d at 948. Here, even if the settlement of Ms. Curtis-Bauer’s non-class

16 claims and the service payment are combined, the $150,000 payment to Ms. Curtis-Bauer is less

17 than 1% of the total settlement amount. Ms. Curtis-Bauer will not receive “disproportionately

18 special treatment” – instead, she will receive a modest settlement of her non-class claims and, if

19 approved by this Court, a service payment to compensate her for her services on behalf of the

20 class.

21

CONCLUSION

22

For the reasons set forth in plaintiffs’ moving papers, and this reply, and based on the

23 record before the Court, this Court should certify the proposed class, approve mailing notice of

24 the proposed settlement, and set a date for a fairness hearing.

25 Dated: November 19, 2007 26 27 28

/s/ James M. Finberg
James M. Finberg (SBN 114850) Eve H. Cervantez (SBN 164709) ALTSHULER BERZON LLP 177 Post Street, Suite 300

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1

San Francisco, CA 94108

Telephone: (415) 421-7151

2

Facsimile: (415) 362-8064

Email: jfinberg@altshulerberzon.com

3

Email: ecervantez@altshulerberzon.com

4

Kelly M. Dermody (SBN 171716)

Heather H. Wong (SBN 238546)

5

LIEFF, CABRASER, HEIMANN &

BERNSTEIN, LLP

6

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

7

Telephone: (415) 956-1000

Facsimile: (415) 956-1008

8

Email: kdermody@lchb.com

Email: hwong@lchb.com 9

Adam T. Klein (pro hac vice)

10

Piper Hoffman (pro hac vice)

Justin Schwartz (pro hac vice)

11

OUTTEN & GOLDEN LLP

3 Park Avenue, 29th Floor

12

New York, NY 10016

Telephone: (212) 245-1000

13

Facsimile: (212) 977-4005

Email: atk@outtengolden.com

14

Email: ph@outtengolden.com

Email: jms@outtengolden.com 15

16

17

18

19

20

21

22

23

24

25

26

27

28

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
MORGAN, LEWIS & BOCKIUS LLP
ATTORNEYS AT LAW SAN FRANCISCO

James N. Penrod (State Bar No. 43030) Rebecca D. Eisen (State Bar No. 96129 ) L. Julius M. Turman (State Bar No. 226126) MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Tower San Francisco, CA 94105 Direct: 415.442.1361 Fax: 415.442.1001
Mark S. Dichter, admitted Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Tel: 215.963.5000 Fax: 215.963.5001
Kenneth L. Turnbull, admitted Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178 Tel: 212.309.6000 Fax: 212.309.6001
Attorneys for Defendant Morgan Stanley & Co. Incorporated
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

DAISY JAFFE, DENISE WILLIAMS, and MARGARET BENAY CURTIS-BAUER on behalf of themselves and all others similarly situated,
Plaintiffs,
vs.
MORGAN STANLEY & CO. INCORPORATED, f/k/a/ MORGAN STANLEY DW, INC.,
Defendant.

Case No. C 06 3903 (TEH)
DEFENDANT'S RESPONSE TO OBJECTIONS OF PUTATIVE CLASS MEMBERS TO MOTION FOR CLASS CERTIFICATION & PRELIMINARY APPROVAL
DATE: DECEMBER 3, 2007 TIME: 10:00 AM

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Table of Contents
I. INTRODUCTION ................................................................................................................... 1
II. FACTS ................................................................................................................................. 1
III. ARGUMENT ....................................................................................................................... 2
A. Standards Applicable To Preliminary Approval .................................................................. 2
B. Class-Wide Race Discrimination Claims Were Raised By The Jaffe Plaintiffs In The Normal Course And Were Not The Product Of Collusion Between The Jaffe Plaintiffs And Morgan Stanley............................................................................................ 4
1. The Jaffe Plaintiffs Indicated That They Were Going To Add Class-Wide Race Discrimination Claims In Late 2006 and Early 2007, Leading To Settlement Discussions To Resolve Those Claims. ........................................................................... 4
2. Following The Standstill Agreement, The Parties In Jaffe Engaged In Meaningful, Arm’s Length Negotiations Over Several Months........................................................... 6
C. Morgan Stanley Also Engaged In Meaningful And Arm's Length Settlement Discussions With The Moore Group With Respect To Their Threatened Individual Race Discrimination Claims. .............................................................................................. 8
D. The Jaffe Settlement Was The Result of Legitimate, Arm's Length Negotiations Between The Parties.......................................................................................................... 10
E. Morgan Stanley’s E-Mail To Putative Class Members Was Motivated By Legitimate Business Interests, Not Improper Motives As Alleged By The Moore Group..................................................................................................................... 12
F. The Proposed Settlement Should Be Preliminarily Approved Because The Terms Of Settlement Agreement Are Within The Range Of Reasonableness............................. 13
1. The Proposed Settlement Contains Significant Monetary Relief, And FarReaching And Meaningful Programmatic Relief, That Will Greatly Benefit The Settlement Class. ............................................................................................................ 13
2. Settlement Provisions Providing For Opt-Out Credits and Morgan Stanley's Option To Terminate The Agreement Are Standard In Class Agreements And Do Not Provide A Basis To Deny Approval............................................................................... 22
3. The Exclusion Of Branch Managers From The Settlement Class Does Not Undermine Conditional Class Certification. .................................................................. 23
IV. CONCLUSION .................................................................................................................. 24

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Table of Authorities
Cases
Abdallah v. The Coca-Cola Company Case No. 98-CV-379 (RWS) (N.D.Ga.) .................................................................................... 22
Armstrong v. Board of Sch. Directors of Milwaukee 616 F.2d 305 (7th Cir. 1980), overruled on other grounds, 134 F.3d 873 (7th Cir. 1998) ......... 3
Churchill Village, LLC v. General Elec. 361 F.3d 566 (9th Cir. 2004); ...................................................................................................... 2
Class Plaintiffs v. City of Seattle 955 F.2d 1268 (9th Cir. 1992).................................................................................................. 2, 4
Gonzalez, et al. v. Abercrombie & Fitch Case Nos. 03-2817 SI, 04-4730 and 04-4731 (N.D. Cal.) ......................................................... 22
Hanlon v. Chrysler Corp. 150 F.3d 1011 (9th Cir. 1998.)................................................................................................. 2, 3
Lucas v. KMart Corp. 234 F.R.D. 688 (D. Colo. 2006)................................................................................................... 2
Murillo v. Texas A&M Univ. Sys. 921 F.Supp.2d 443 (S.D. Tex. 1996.) ....................................................................................... 10
Officers for Justice v. Civil Serv. Comm’n 688 F.2d 615 (9th Cir. 1982), cert. denied, 480 U.S. 934............................................................ 3
San Francisco NAACP v. San Francisco Unified Sch. Dist. 59 F. Supp. 2d 1021 (N.D. Cal. 1999) ..................................................................................... 2, 4
Satchell, et al. v. Federal Express Corp. Case No. 03-CV-02659 (N.D. Cal)............................................................................................ 22
Tenuto v. Transworld Sys., Inc. 2001 WL 1347235 (E.D. Pa. 2001) ............................................................................................. 2
Young v. Polo Retail, LLC No. C-02-4546 VRW, 2006 WL 3050861, (N.D. Cal. Oct. 26, 2006) ........................................ 3
Other Authorities
Manual for Complex Litigation (4th ed., Fed. Judicial Center 2004) .............................................. 2

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I. INTRODUCTION Defendant Morgan Stanley & Co. Incorporated (“Defendant” or “Morgan Stanley”)
hereby responds to the objections raised by putative class members Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker, Carlton McDowell, and applicant Justin Harris (the “Moore group”) to the Joint Motion for Class Certification and Preliminary Approval. Because the proposed settlement meets the standard of being fair, reasonable, adequate and free from collusion, this Court should grant the parties’ request for preliminary approval. Contrary to the speculations and distortions that comprise the Moore group’s objection brief, a review of the record demonstrates that the parties arrived at the settlement after: the initiation of the Jaffe plaintiffs’ class-wide race claims; arm’s-length negotiations between the parties; and agreed-upon settlement terms that are fair and reasonable to resolve the class-wide race claims between the parties. II. FACTS
After filing an amended EEOC charge alleging class-wide discrimination against minorities in November 2006 and after receiving a Right to Sue Notice in December 2006, Plaintiff Denise Williams (“Plaintiff Williams” or “Ms. Williams”) notified Morgan Stanley in January 2007 of her intention to amend her complaint in this action to bring nationwide claims of class-wide discrimination against minorities and offered to enter into a tolling agreement and engage in settlement discussions. Effective January 23, 2007, the parties entered into a tolling agreement and commenced a 10 month negotiation and mediation process which culminated in a settlement agreement which was presented to this Court for preliminary approval on October 22, 2007. On October 23, 2007, Stowell & Friedman faxed a letter to this Court from a number of purported African-American class members (who now have filed a competing class action) objecting to this settlement. By Order of October 29, 2007, this Court permitted members of the proposed class to submit objections by November 9, 2007 and directed that replies be filed by November 19, 2007.

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III. ARGUMENT A. Standards Applicable To Preliminary Approval

The approval of a class settlement is committed to the sound discretion of the trial judge.

See Churchill Village, LLC v. General Elec., 361 F.3d 566, 575 (9th Cir. 2004); see also Hanlon

v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998.) According to the Manual for Complex

Litigation, the preliminary approval stage is merely an “initial evaluation” of the fairness of the

proposed settlement made by the court on the basis of written submissions and informal

presentations by the parties. See Manual for Complex Litigation (4th ed., Fed. Judicial Center

2004) at 21.632. The Manual further notes that the preliminary approval stage is one in which the

court may “raise questions . . . if there are reservations about the settlement” so that the parties

may “have an opportunity to resume negotiations in an effort to remove potential obstacles to

court approval,” implying that the assertion of objections designed to wholly thwart approval of

the settlement should not be determinative at the preliminary approval stage but would be best

raised at the final fairness hearing. See id. at 21.632; see also Lucas v. KMart Corp., 234 F.R.D.

688, 693 (D. Colo. 2006) (the purpose of obtaining preliminary approval is to determine whether

there is reason not to notify class members of the terms of the proposed settlement and to proceed

to the fairness hearing). Thus, “[a]t the stage of preliminary approval, the questions are simpler,

and the court is not expected to, and probably should not, engage in any analysis as rigorous as is

appropriate for final approval.” Manual for Complex Litigation, Author's Notes at 465 (citing

Tenuto v. Transworld Sys., Inc., 2001 WL 1347235 (E.D. Pa. 2001)) (“In evaluating a settlement

for preliminary approval, the court determines whether the proposed settlement discloses grounds

to doubt its fairness or other obvious deficiencies such as unduly preferential treatment of class

representatives or segments of the class, or excessive compensation of attorneys, and whether it

appears to fall within the range of possible approval.”)

The standard by which a proposed settlement is to be evaluated is “whether the settlement

is fundamentally fair, adequate and reasonable.” San Francisco NAACP v. San Francisco Unified

Sch. Dist., 59 F. Supp. 2d 1021, 1027 (N.D. Cal. 1999) (quoting Class Plaintiffs v. City of Seattle,

955 F.2d 1268, 1276 (9th Cir. 1992)). “The issue is not whether settlement could be better, but

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whether it is fair, reasonable, and adequate and free from collusion.” Id. at 1028-29 (citing Hanlon, 150 F.3d at 1027.) Preliminary approval is appropriate where a settlement is sufficiently within the range of possible approval (or the “range of reasonableness”) to justify notification to the proposed class of its contents and to proceed to a fairness hearing. Armstrong v. Board of Sch. Directors of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other grounds, 134 F.3d 873 (7th Cir. 1998); Young v. Polo Retail, LLC, No. C-02-4546 VRW, 2006 WL 3050861, at *5 (N.D. Cal. Oct. 26, 2006.)
A court's “intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982), cert. denied, 480 U.S. 934; see also Hanlon, 150 F.3d at 1027 (same). A court should give preliminarily approval if a settlement is sufficiently within the range of possible approval (the “range of reasonableness”) to justify notifying the proposed class of its contents and proceed to a fairness hearing. See Armstrong, 616 F.2d at 314; Young, 2006 WL 3050861, at *5.
Here, the proposed settlement should receive preliminary approval because it was the product of bona fide arm's length negotiations between the parties, not any fraud or collusion. This fact is supported not only by the representations of the parties, but by those of the wellrespected, independent mediator who assisted the parties in resolving these claims throughout the lengthy, detailed and contentious process that led to an agreement. (See generally Report of Mediator Hunter R. Hughes, III (“Hughes Report”) at ¶¶ 3-4.) Moreover, preliminary approval is appropriate because the settlement provides significant monetary relief, as well as substantial, meaningful and innovative programmatic relief designed to foster the careers of AfricanAmerican and Latino Financial Advisors and Registered Financial Advisor Trainees in Morgan Stanley's Global Wealth Management Group, that is well within the “range of reasonableness” central to the Court's review at the preliminary approval stage. Finally, the strong judicial policy

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in favor of the settlement of complex, class action litigation articulated by the Ninth Circuit, and recognized by courts of this District, amplifies the support for preliminary approval here. See City of Seattle, 955 F.2d at 1276; see also San Francisco NAACP, 59 F. Supp. 2d at 1029 (citing City of Seattle with respect to the judicial preference for the settlement of class actions).
B. Class-Wide Race Discrimination Claims Were Raised By The Jaffe Plaintiffs In The Normal Course And Were Not The Product Of Collusion Between The Jaffe Plaintiffs And Morgan Stanley. 1. The Jaffe Plaintiffs Indicated That They Were Going To Add ClassWide Race Discrimination Claims In Late 2006 and Early 2007, Leading To Settlement Discussions To Resolve Those Claims.
Central to the Moore group's attack on this settlement is the assertion that the Jaffe case was a class action gender discrimination case that the parties colluded to artificially convert into a class action race discrimination case after Morgan Stanley reached a settlement in another class action gender discrimination case – the Augst-Johnson case. This is simply false. Allegations of class-wide race discrimination were initiated by the Jaffe plaintiffs entirely independent of Morgan Stanley. In fact, such claims were asserted by Plaintiff Williams in an amended Title VII charge of discrimination filed in November 2006 – long before: (a) Morgan Stanley began to discuss the possible settlement of individual claims of race discrimination with counsel for the Moore group, (b) Morgan Stanley and the Jaffe plaintiffs initiated settlement discussions and mediation to address their class claims of gender and race discrimination, or (c) Morgan Stanley reached a settlement with the plaintiffs in the Augst-Johnson gender discrimination class action. As shown below, the relevant language of the charge of discrimination by Ms. Williams is not subject to interpretation—it is express and clear in asserting a “class claim” of race discrimination on behalf of “minorities.”
Shortly after the Jaffe Complaint was amended on October 12, 2006 to add the individual claims of race discrimination asserted by Ms. Williams pursuant to Section 1981 (Jaffe Doc #25), Ms. Williams filed an amended charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) alleging that Morgan Stanley had engaged in class-wide race

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discrimination in violation of Title VII. Her amended charge, filed on November 2, 2006, under the heading “Class Claims,” expressly stated:
It is my understanding and belief that MSDW has engaged in a continuing pattern and practice of discrimination against female and minority Financial Advisors with respect to compensation, business allocation, and other terms and conditions of employment in the Detroit, Michigan office and in other MSDW facilities. Jaffe Doc. # 81, Ex. B. Because the filing of a charge of discrimination is a legal prerequisite to the filing of a Title VII lawsuit alleging class-wide race discrimination, the language in Ms. Williams' amended charge could only reasonably be understood by Morgan Stanley to mean one thing—that Ms. Williams intended to amend the complaint in Jaffe to assert class claims of race discrimination. That alone would have been sufficient basis for Morgan Stanley to engage in settlement discussions with the Jaffe plaintiffs to resolve class-wide race discrimination claims. Thereafter, on December 5, 2006, Ms. Williams received a 90-day Notice of Right to Sue from the EEOC with respect to her amended charge of discrimination. (Id.) This increased the likelihood that Morgan Stanley would face such claims in Jaffe.1 In January 2007, counsel for the Jaffe plaintiffs notified Morgan Stanley that Ms. Williams had received a Notice of Right to Sue from the EEOC on her Title VII class charge and that she intended to file a second amended complaint to include class-wide claims of race discrimination on behalf of herself and a class of minority Financial Advisors. (Declaration of Mark S. Dichter (“Dichter Decl.”) at ¶ 3.) Counsel for Ms. Williams specifically informed Morgan Stanley that Plaintiffs intended to amend the Jaffe complaint to assert claims that minority Financial Advisors were afforded fewer business opportunities than comparable Caucasian Financial Advisors and that they experienced race discrimination with respect to various terms and conditions of their employment. (Id.) In response to the Jaffe plaintiffs informing Morgan Stanley of their intent to amend the Complaint by adding class-wide race discrimination claims, the parties agreed to a Tolling and

1 See Second Amended Complaint filed August 17, 2007. Ms. Williams filed an initial charge of race discrimination on October 10, 2006, and amended her to charge to add class-based allegations of race discrimination on November 2, 2006. (See Jaffe Doc. # 81, Ex. B).

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Standstill Agreement, effective January 23, 2007, to allow them time through mediation to negotiate a resolution of the class claims of race discrimination. (Id. at ¶ 4 and Ex. A (Standstill Agreement)). This Standstill Agreement was reached approximately three months before Morgan Stanley's first mediation session with the Moore group on April 24, 2007. (Id. at ¶¶ 4, 15.) Moreover, contrary to the suggestion that class-wide claims of race discrimination were concocted on the eve of settlement by Morgan Stanley and the Jaffe plaintiffs, the Standstill Agreement entered into by the parties – approximately eight months before the terms of the settlement agreement in this case had been reached – itself expressly referenced Ms. Williams' intention to assert class-wide claims of race discrimination against Morgan Stanley. (See id., Ex. A, at 1) (“Denise Williams asserts, and MSDW denies, that she has certain causes of action for race discrimination against MSDW, individually and on behalf of herself and other similarly situated minority employees of MSDW.”) (emphasis added). In fact, the Standstill Agreement went even farther and expressly noted the desire of the parties to engage in settlement discussion with respect to those claims. The Standstill Agreement stated:

WHEREAS, Williams and MSDW desire at this time to take no action regarding Williams' individual and class claims of race discrimination and instead wish to pursue settlement discussions. (Id.)

Thus, the timeline associated with the class-wide race claim by the Jaffe plaintiffs and

Morgan Stanley's settlement discussions with both the Jaffe plaintiffs and the Moore group, do

not support the conclusion that the parties in this case colluded to create a class-wide race claim

where none otherwise existed just on the eve of settlement in August 2007.

2. Following The Standstill Agreement, The Parties In Jaffe Engaged In Meaningful, Arm’s Length Negotiations Over Several Months.
Morgan Stanley representatives, counsel for Morgan Stanley, and counsel for the Jaffe

plaintiffs (represented by attorneys from the Lieff Cabraser, Altschuler Berzon, and Outten &

Golden firms) met on February 28, 2007 in San Francisco, California. (Dichter Decl. at ¶ 5.) At

this meeting, the parties agreed to engage the services of prominent mediator Hunter R. Hughes

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III, Esq. (“Mr. Hughes”) to assist in the mediation of all claims. (Id.) It was also at the February 2007 meeting that counsel for the Jaffe plaintiffs requested detailed data and information from Morgan Stanley in connection with their claims. (Id.) That data was provided to the Jaffe plaintiffs approximately one week after the February meeting. (Id.)
In March and May 2007, Morgan Stanley representatives, Morgan Stanley's counsel, and counsel for the Jaffe plaintiffs met with Mr. Hughes to attempt to resolve the class-wide race discrimination claims asserted by the Jaffe plaintiffs. (Id. at ¶¶ 6-7.) Thereafter, however, a third mediation session with Mr. Hughes – scheduled to take place in mid-June 2007 – was cancelled by the Jaffe plaintiffs as a result of their dissatisfaction with the settlement terms offered by Morgan Stanley. (Id. at ¶ 8.) The parties met again with Mr. Hughes in July 2007 and, during that session, reached an agreement in principle to resolve the class-wide race discrimination claim. (Id. at (Id. at ¶ 9.) That agreement was later memorialized in a formal settlement agreement, the language of which was negotiated by the parties until it was filed with the Court on October 22, 2007. (Id.) Mediation of the plaintiffs' class claims was difficult and time consuming, and involved multiple in-person mediation sessions, scores of telephonic conferences and settlement calls, significant informal discovery, data collection by the Plaintiffs and expert analyses of collected data over at least a five-month period. (Id. at ¶ 10; Hughes Report at ¶ 3.) Far from readily agreeing to a settlement, the parties nearly reached impasse on several occasions due to conflicting settlement positions. (Hughes Report at ¶ 4.)
Notably, Morgan Stanley and the Jaffe plaintiffs were engaged in mediation with respect to class-wide race discrimination claims even before Morgan Stanley began to engage in mediation with the Moore group regarding their race discrimination claims. As noted below, mediation with the Moore group did not begin until April 24, 2007, three months after the parties in Jaffe entered into the Standstill Agreement expressly indicating a desire to mediate class-wide

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race discrimination claims, and nearly two months after a private settlement meeting and one month after a mediator-assisted session had already been conducted in Jaffe. Significantly, even assuming that Morgan Stanley and the Moore group had been able to commence mediation prior to the Spring of 2007, the focus of Morgan Stanley's settlement discussions with the Moore group was the resolution of the individual claims of race discrimination threatened by members of the group, not settlement on a class-wide basis. (Dichter Decl. at ¶ 16.)
C. Morgan Stanley Also Engaged In Meaningful And Arm's Length Settlement Discussions With The Moore Group With Respect To Their Threatened Individual Race Discrimination Claims.
Contrary to the Moore group's suggestion that Morgan Stanley effectively engaged in sham settlement discussions with them while "orchestrating" a settlement of race discrimination claims with the Jaffe plaintiffs, those settlement discussions were also meaningful, protracted, and involved the participation of a respected mediator. However, as reflected in the Standstill Agreement, Morgan Stanley and the Jaffe plaintiffs entered into settlement discussions in early 2007 with the express intention of seeking to resolve class-wide race discrimination claims; while, conversely, settlement discussions between Morgan Stanley and counsel for the Moore group focused almost entirely on the resolution of individual claims of race discrimination threatened by members of that group, not a class settlement.2
The mediation sessions with the Moore group began after counsel for the Moore group, Mary Stowell, informed Morgan Stanley's in-house counsel that they were willing to consider settlement of the claims of members of the Moore group on an individual, non-class basis.

2 The suggestion that “Morgan Stanley chose not to negotiate with the Moore group because it was not interested in a fair resolution negotiated at arm's length that would actually benefit African-Americans and result in meaningful change at the Firm,” (Objections of Putative Class Members To Motion For Class Certification & Preliminary Approval (“Moore Objs.”) at 16), amounts to faulty revisionist history and irresponsible conjecture. Morgan Stanley indisputably engaged in real, arm's length settlement discussions with both the Jaffe plaintiffs and the Moore group over many months in 2007. However, negotiations with the Moore group broke down over the amounts of the individual settlement demands during the parties’ final mediation session in late June 2007. Until that time, Morgan Stanley earnestly participated in lengthy mediation sessions assisted by a highly respected mediator.

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(Declaration of Alexa B. Pappas (“Pappas Decl.”) at ¶ 4.) Counsel for the Moore group did threaten to bring a class action, however, if the claims could not be resolved on an individual basis (and now have just filed a competing class action in the U.S. District Court for the Northern District of Illinois). (Id.)
Over the course of three separate mediation sessions in April 2007 (in Chicago, Illinois), May 2007 (Washington, D.C.), and June 2007 (Chicago, Illinois), Morgan Stanley representatives and counsel for Morgan Stanley engaged in settlement discussions addressing individual claims of race discrimination with counsel for the Moore group and almost all of individuals who were part of the Moore group. (Dichter Decl. at ¶¶ 15-16; Pappas Decl. at ¶¶ 7-8.) Because counsel for the Moore group also raised programmatic concerns during the course of the mediation sessions, Morgan Stanley reported to the Moore group the actions Morgan Stanley would be taking in connection with the Augst-Johnson gender settlement, as well as the similar types of actions Morgan Stanley would be prepared to take in connection with programmatic relief addressing race issues. (Dichter Decl. at ¶¶ 16, 17.) These planned actions reported to the Moore group were, in fact, based on the programmatic relief actions that Morgan Stanley was discussing with the Jaffe plaintiffs. (Id. at ¶ 17.)
Mediation of the individual claims with the Moore group eventually broke down over the amounts of the individual settlement demands at the final mediation session in June 2007, well before a settlement was ultimately reached in the Jaffe case. (Id. at ¶ 18.) After settlement discussions with the Moore group ended, Morgan Stanley continued to mediate the class-wide race discrimination claims with the Jaffe plaintiffs, just as it had since early 2007, and reached an agreement in principle on July 23, 2007. (Id. at ¶ 9.)3

3 Though counsel for the Moore group has alleged that Mark Dichter, counsel for Morgan Stanley, “advised the

Moore group's attorneys that if they challenged the lawsuit, they would be ‘pariahs of the plaintiffs bar’ because

between the Augst-Johnson and the Jaffe lawsuits, five law firms sided with Morgan Stanley on settlement,” that

statement has been badly distorted and presented without context. The statement actually made by Mr. Dichter was

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D. The Jaffe Settlement Was The Result of Legitimate, Arm's Length Negotiations Between The Parties.
In assessing proposed class action settlements at the preliminary approval stage, an “initial presumption of fairness [arises] when a proposed class settlement was negotiated at arm's length by counsel for the class.” Murillo v. Texas A&M Univ. Sys., 921 F.Supp.2d 443, 445 (S.D. Tex. 1996.) Here, the Moore group brazenly suggests, without any actual factual support, that “the [Jaffe] settlement was not negotiated at arm’s length. The Jaffe lawsuit was filed as a class action gender discrimination lawsuit, and converted to a race and color class case only after the plaintiffs’ lawyers lost the gender case to a competing group of plaintiffs and lawyers in the Augst-Johnson v. Morgan Stanley case.” (Moore Objs. at 13.) The support offered for this conclusion is mere speculation compounded by even more speculation. As explained at length above, there is conclusive, direct evidence that the Jaffe plaintiffs and Morgan Stanley began bona fide settlement discussions of the class action race discrimination claims before the settlement of Augst-Johnson.4
The proposed settlement in this case was reached as the result of well-informed, adversarial, arm's length settlement discussions that spanned many months and many meetings, and which were supplemented by the production of extensive information and data relevant to Plaintiffs' class claims. This is not simply Morgan Stanley's position, but the position of the

made in response to threats from the counsel for the Moore group that they would challenge the settlements in both the Augst-Johnson and Jaffe cases, and would claim that the plaintiffs’ counsel in both cases had all colluded with Morgan Stanley to reach settlements that were not negotiated at arm’s length and were not in the best interests of the respective classes. Mr. Dichter responded to those threats by pointing out that the two settlements were negotiated by five of the most highly-respected plaintiffs' employment discrimination law firms and that attacking the credibility and motivations of those firms and alleging that they engaged in collusive activity and failed to adequately represent their clients by knowingly entering into inadequate settlement agreements would make the Moore group’s counsel the pariahs of the plaintiffs’ bar. (Id. at ¶ 21.)

4 Contrary to the Moore group's objection, the Jaffe counsel were aware of the existence of the claims of the Moore group. See Moore Objs. at 17 (“Morgan Stanley did not inform [the Jaffe] Plaintiffs or their counsel about the existence of the Moore group or the nature of their claims.”); Dichter Decl. at ¶ 7) Thus, the Moore group's suggestion that Morgan Stanley was somehow “unreliable” in the course of its settlement discussions with the Jaffe plaintiffs is unfounded. This assertion appears to be yet another example of the Moore group's surprising willingness, in a court filing, to make inflammatory accusations without any factual support.

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independent mediator who actually participated in the settlement negotiations. According to Mediator Hunter Hughes:
[C]ounsel for the parties advocated their clients' positions vigorously and at arms' length. In fact, negotiations almost reached impasse on more than one occasion when one side or the other chose not to negotiate off what I considered principled positions. The proposed settlement that voluntarily was reached was the result of well-informed, non-collusive negotiations. (Hughes Report at 4.) Though still fueled by speculation, the Moore group's suggestion that negotiations between the Jaffe plaintiffs and Morgan Stanley were not at arm's length might appear more credible had the parties carried out their settlement negotiations in a “back room” setting, without neutral third parties present. Here, however, a neutral third-party was present for, and was responsible for directing, those negotiations. Curiously, the Moore group fails to disclose Mr. Hughes's role in the Jaffe settlement when alleging that the settlement was the product of collusion and was not reached at arm's length. (See, e.g., Moore Objs. at 13-16.) There is, then, on the one hand, ample evidence of a mediated, arm's length negotiation resulting in a fair and reasonable settlement, and on the other, rampant speculation (with no basis in fact) that the parties reached an unfair, “backroom” settlement. Morgan Stanley suggests that, given the facts at hand, the only conclusion to be drawn is that the settlement in this case was reached at arm's length by willing and educated parties, assisted by a neutral third party. This Court should conclude that the settlement was negotiated at arm's length and, as such, is entitled to a presumption of fairness at the preliminary approval stage. E. Morgan Stanley’s E-Mail To Putative Class Members Was Motivated By
Legitimate Business Interests, Not Improper Motives As Alleged By The Moore Group. The Moore group claims that Morgan Stanley sent an e-mail to putative African-American and Latino settlement class member employees in an effort to assist Plaintiffs' counsel in “garner[ing] support for the settlement.” This unsupported conjecture is, again, false.

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On August 30, 2007, shortly after the public announcement and press reports of the settlement in this case, Morgan Stanley’s Human Resources group sent an e-mail to all African American and Latino Financial Advisors and Registered Financial Advisor Trainees informing them of the settlement, reminding them of Morgan Stanley’s non-retaliation policy and telling them they could direct any “inquiries . . . regarding participation in this settlement” to Plaintiffs’ counsel. (Pappas Decl., Ex. A (8/30/2007 E-Mail). This e-mail was a preemptive measure designed to prevent a problem that arose following the public announcement of the settlement in the Augst-Johnson sex discrimination class action, when Morgan Stanley's Managers and Human Resources representatives received numerous inquiries from current employees/potential class members regarding the settlement. (Pappas Decl. at 8/30/2007 ¶ 10). The Managers and Human Resources group, in turn, had to direct each individual caller to contact plaintiffs’ counsel in Augst-Johnson case so their questions could be answered. (Id.) Thus, Morgan Stanley's motive in sending the email was not collusive – it simply sought to take the most efficient approach possible to direct potential class members to the appropriate sources of information regarding the settlement, just as it did with the sex discrimination settlement.
F. The Proposed Settlement Should Be Preliminarily Approved Because The Terms Of Settlement Agreement Are Within The Range Of Reasonableness. 1. The Proposed Settlement Contains Significant Monetary Relief, And Far-Reaching And Meaningful Programmatic Relief, That Will Greatly Benefit The Settlement Class. a. Agreed-To Monetary Relief Will Provide Reasonable Monetary Awards To A Significant Portion Of The Settlement Class.
The Moore group attacks the monetary relief portion of the proposed settlement under the general rubric that the proposed $16 Million fund is “grossly inadequate.” They specifically argue that (a) a substantial portion of the fund will not be available to class members; (b) “the relief for individual class members will be grossly inadequate”; and (c) the monetary relief is

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inadequate in comparison to “other cases in the brokerage industry.” (See Moore Objs. at 17-20). These objections are completely unjustified.
First, the suggestion that “a substantial portion of the Settlement Fund will not be available to class members,” is erroneous. The $16 Million Settlement Fund will increase at an annual percentage rate of 5% from the date of preliminary approval until the funds are transferred once the settlement is finally approved and becomes effective. Thus, the actual amount of the Settlement Fund will be more than $16 Million. The amounts being sought for attorney's fees and costs and the service payment to Plaintiff Curtis-Bauer and payment for the settlement of her nonclass claims represent a relatively small percentage of the total fund. Importantly, the amount available to class members will be available to all who do not opt out and who submit a timely and valid Claim Form. That is, unlike class action settlements in which no defined settlement fund is set up and class members are at the mercy of an adversarial claims process (sometimes involving additional litigation or arbitration), valid and timely claimants in this case will receive a monetary award from an already established fund.
Second, the Moore group has compared the settlement in this case to the settlement in a number of cases that bear little resemblance to this case in terms of scope, class size, relevant claims, relevant facts, potential exposure, and the manner in which class members might recover monetary awards. For example, the Moore group, without context, compares the monetary relief portion of this settlement to Morgan Stanley's settlement of a wage and hour case involving Financial Advisors and Financial Advisor Trainees (regardless of race or gender) in California. That settlement, which included a maximum settlement amount (dependent on the number of claims filed) of $42.5 Million (including $10.6 Million for attorney's fees and costs) bears little, if any, resemblance to the Jaffe action. Moreover, the class in that case was more than twice as large as the putative class in this case. (Pappas Decl. at ¶ 11.)
The Moore group fails to distinguish the settlement in the directly comparable AugstJohnson sex discrimination class action. That settlement, which has been approved by a highly respected federal judge, Richard W. Roberts of the U.S. District Court for the District of

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Columbia, provides for almost identical monetary relief on a per-class member basis.5 In contrast, reliance on highly distinguishable settlements to illustrate the purported inadequacy of the monetary relief, like its unsupported attack on the breadth of the monetary relief in this case, is deliberately misleading and is of no value to the relevant inquiry here—whether the settlement, taken as a whole, is within the "range of reasonableness" for preliminary approval purposes. Given the significant number of African-American and Latino Financial Advisors and Financial Advisor Trainees who are expected to participate in the non-adversarial claims process, the monetary relief is not simply within the range of reasonableness, but is fair and adequate as well.
b. The Proposed Programmatic Relief Will Significantly Enhance The Recruitment, Development, Success And Retention Of AfricanAmerican And Latino Financial Advisors.
Contrary to the Moore group's characterization of the programmatic relief in the proposed settlement as "inadequate" and duplicative of the programmatic relief in the Augst-Johnson case, the non-monetary relief agreed to in this case will provide for the development and implementation of unique and innovative policies and programs that will attract and benefit African-American and Latino Financial Advisors and Registered Financial Advisor Trainees during all phases of their careers within Morgan Stanley's Global Wealth Management Group. These policies, programs and initiatives will address the recruitment, hiring, development, success and retention of African-American and Latino Financial Advisors in meaningful ways.

5 Not coincidentally, the Stowell & Friedman firm levied similarly bald assertions and invalid arguments about the

adequacy of the monetary relief in the Augst-Johnson case on behalf of one of the members of the Moore group,

Janice Grant. The observation of the federal court addressing those objections in Augst-Johnson applies with equal

application here. In relevant part, in rejecting the objection as to the adequacy of the monetary relief raised by

Stowell & Friedman, the court observed that "[t]he objection to the adequacy of the monetary awards reflects a

misunderstanding of the potential size of an individual award and the means by which an individual’s award will be

determined. It also attempts to measure the monetary award in this case against awards in cases that are not fairly

comparable, and differ in critical ways as to facts, time periods, types and numbers of employees, claims, legal

issues, and ease of proof." (See Augst-Johnson Final Order Approving Settlement, attached to Dichter Decl. as Ex.

B, at ¶ 8.) It does not appear that Stowell & Friedman made any better effort to understand the monetary relief

available under this settlement.
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For example, with respect to hiring and recruitment, the proposed settlement requires Morgan Stanley to focus significant, specific efforts on the recruitment of diverse individuals to fill Financial Advisor positions, including African-Americans and Latinos. These efforts include the maintenance of a dedicated position within Morgan Stanley's Global Wealth Management Group whose primary function will be the "sourcing and recruitment" of qualified diverse candidates, reporting on recruitment efforts, and the identification and development of sourcing alternatives for qualified African-American and Latino Financial Advisors. (See Proposed Settlement Agreement at VII.B-C, G). Moreover, under the terms of the settlement agreement, branch managers' compensation will be tied to that manager's performance on diversity issues.
To enhance the success, development and retention of African-American and Latino Financial Advisors, the settlement agreement, among other things, calls for Industrial Psychologists to analyze the Financial Advisor position and, in addition to considering ways to increase representation rates, to consider how Morgan Stanley can decrease the departures of those Financial Advisors. The same Industrial Psychologists will also be tasked with the annual review of "actual account distributions and related compensation data and the rankings of African American and Latino Financial Advisors on each of the individual factors and use such information in considering recommendations, if any, for changes to the Power Ranking Formula." (Id. at VII.D.2.d). Moreover, as a result of the negotiations with counsel in this case to address the concerns of African-American and Latino Financial Advisors, specific changes to the new Power Rankings formula used by Morgan Stanley's Global Wealth Management Group to rank Financial Advisors and determine account distributions have been agreed to.
These significant and meaningful injunctive relief provisions are far more than fair, adequate and reasonable—they are far reaching and, in many respects, groundbreaking and innovative within the financial services industry.6

6 The Moore group's blanket criticism that the programmatic relief agreed to in this case is inadequate because it

mirrors the programmatic relief agreed to in the Augst-Johnson gender settlement demonstrates a lack of

understanding of the programmatic relief in both cases. First, the adoption of certain significant and meaningful

injunctive relief provisions from another settlement agreement presents no bar to the approval of the settlement in

this case. This is particularly true where, as here, the settlement agreement borrows provisions that can enhance the

recruitment, development, success and retention of African-American and Latino Financial Advisors in much the

same ways that they will enhance the careers of female Financial Advisors. Second, the settlement agreement in this
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c. The Moore Group's Criticism Of Morgan Stanley's Expenditure Of Millions Of Dollars On Diversity Efforts Misstates The Facts.
The Moore group's allegation that "The Settlement seeks to double-count the same (inflated) $7.5 Million value the parties placed on the identical relief in the Augst-Johnson settlement," (Moore Objs. at 20, 21 n.11), represents another example of uninformed speculation on the part of the Stowell & Friedman firm. As an initial matter, the $7.5 Million referenced in the proposed settlement agreement in this case represents an approximate amount that Morgan Stanley anticipates spending on diversity efforts during the period applicable to the proposed settlement. Far from “double-counting” the cost of diversity efforts required by the AugstJohnson settlement, Morgan Stanley will unquestionably spend millions of additional dollars on diversity initiatives that are aimed squarely at the class members in this case—African-American and Latino Financial Advisors and Registered Financial Advisor Trainees. A portion of the diversity expenditures envisioned by the settlement agreement will involve, among other racebased diversity initiatives, the development and implementation of race-based diversity development programs reflecting its commitment to increase diversity in the Financial Advisor position (including the representation rate of African-American and Latino Financial Advisors and Financial Advisor Trainees), the hiring of diversity recruiters, the implementation of racespecific programs and initiatives recommended by the Industrial Psychologists as a result of the Jaffe settlement, scholarship programs, mentoring programs, networking groups, and diversity training. (Pappas Decl. at ¶¶ 12-13.)
The notion posited by the Moore group in an effort to impugn the programmatic relief in this case – that "the [Augst-Johnson] initiatives would have to satisfy not only gender concerns but race or color as well" -- is thus false. As a result of the proposed settlement, Morgan Stanley anticipates spending at least $7.5 Million on diversity measures that benefit the proposed class.

case provides for significant programmatic relief that goes beyond what is required by the Augst-Johnson settlement agreement and that is focused on issues specifically affecting African-American and Latino Financial Advisors. Finally, nothing in the Augst-Johnson settlement agreement bound Morgan Stanley to undertake any programmatic relief initiatives with respect to African-Americans and/or Latinos – those additional initiatives on behalf of AfricanAmerican and Latino Financial Advisors are mandated only by the proposed settlement in this case.

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d. The Moore Group's Criticism Of The Role Industrial Psychologists Will Play In The Settlement In This Case Is Misplaced.
The Moore group also attacks the proposed programmatic relief on the grounds that both
the approved Augst-Johnson settlement and the proposed settlement in this case call for the same
Industrial Psychologists, Dr. Kathleen Lundquist and Dr. Irwin Goldstein, to play integral roles in
the development of policies and programs, among other things. This argument fails to recognize:
(a) the distinct roles that the Industrial Psychologists will play in connection with the
programmatic relief agreed to in this case; (b) the advantages inherent in having the same
Industrial Psychologists develop and recommend programs and initiatives as to both gender and
race at the same firm; and (c) the unique qualifications of Drs. Lundquist and Goldstein to serve
in this proposed capacity in connection with a class-wide race discrimination settlement.
That Drs. Lundquist and Goldstein would be retained in connection with both the Augst-
Johnson gender settlement and the settlement of race claims in this case raises no obstacle to
preliminary (or final) approval because the proposed settlement agreement details specific race-
related tasks they are to perform. For example, under the terms of the proposed settlement
agreement, Drs. Lundquist and Goldstein will, among other things:
• work with Morgan Stanley's Global Wealth Management Group to "identify and develop sourcing alternatives for qualified Latino and African-American Financial Advisors;
• review annually the actual account distributions and related compensation data and the rankings of African-American and Latino Financial Advisors on each of the individual factors;
• use information gathered in the course of their review of actual African-American and Latino account distributions and related compensation data to consider recommendations for changes to the Power Rankings;
• make recommendations for increasing African-American and Latino representation in the receipt of retiring Financial Advisor's books of business, in partnerships, and in development opportunities;
• review Morgan Stanley’s hiring practices and exit interviews; and
• make recommendations for increasing Series 7 passage rates for African-American and Latino Financial Advisor Trainees.

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These tasks are specific to the race aspect of this case and are separate and distinct from responsibilities Drs. Lundquist and Goldstein have via the Augst-Johnson settlement.
Moreover, there are significant advantages and important efficiencies inherent in having the same team of Industrial Psychologists addressing issues affecting both gender and race issues at Morgan Stanley. This notion is endorsed by the very Industrial Psychologists to be retained in the connection with the Augst-Johnson and Jaffe settlements. (See Declaration of Kathleen K. Lundquist ("Lundquist Decl.") at ¶¶ 5-10; Declaration of Irwin Goldstein ("Goldstein Decl.") at ¶¶ 5-9.) As Dr. Lundquist has noted:
While the programmatic relief provisions of the settlements in the race and gender settlements differ, there is substantial overlap in the HR processes addressed in those settlements. These overlaps include: EEO and Problem Resolution; Posting and selection for Branch Management positions; Diversity training; Compensation for management to reinforce diversity efforts; Account Distribution; and Development, Training and Mentoring. Because of this overlap, Dr. Goldstein and I can leverage the knowledge already gained in connection with the gender case and apply it to develop programs to be designed for the race case. It will be more effective and efficient to have the same industrial psychologists reviewing these processes.
(Lundquist Decl. at ¶ 6; see also Goldstein Decl. at ¶ 6.)
Utilizing the same Industrial Psychologists in connection with both settlements will result
in a built-in coordination of the settlement efforts. The work that these experts have already
performed and will perform in connection with the gender discrimination settlement will
undoubtedly enhance the work they perform in connection with this race discrimination
settlement; a different set of Industrial Psychologists would come to Morgan Stanley without the
base of knowledge about the firm's policies, practices and initiatives that Drs. Lundquist and
Goldstein will already have and would need to just begin educating themselves on issues critical
to their work.
Finally, in challenging the role that Drs. Lundquist and Goldstein would play in
connection with this class-wide race discrimination settlement, the Moore group ignores the

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unique qualifications of each to handle such a commitment. There are, in fact, perhaps no two other Industrial Psychologists with the relevant experience in such matters as Drs. Lundquist and Goldstein. For example, Drs. Lundquist and Goldstein both served as designated Joint Experts for the Coca-Cola Discrimination Task Force, a designation approved by the court and the plaintiffs representing a class of minorities in a class action lawsuit against Coca-Cola. (See Lundquist Decl. at ¶ 2.) For her part, Dr. Lundquist has also served (and thus was approved by the court and plaintiffs) as the designated Industrial Psychologist in connection with class action race discrimination settlements involving Ford, New Jersey State Troopers, Sodexho, and Pepco, a class action gender discrimination settlement involving the FBI, and class action race and gender discrimination settlements involving Abercrombie & Fitch and Woodward Governor. (Id. at ¶¶ 3-4.) Dr. Goldstein has served as an expert in numerous matters involving human resources practices in the context of alleged race and/or sex discrimination, and is currently a courtappointed member of the task force providing oversight to the federal Drug Enforcement Agency on Human Resources best practices and, in that capacity, advises the African-American Monitoring oversight group. (Goldstein Decl. at ¶ 4.) Both thus have extraordinary credentials and experience to draw from in carrying out the roles proposed for them in the Jaffe settlement. Their role in this settlement, if anything, provides great support for the fairness and reasonableness of the programmatic relief provisions of the Jaffe settlement.
e. The Power Rankings, As Changed Pursuant To The Proposed Settlement, Are Not Adverse To African-Americans.

The Moore group also attacks the programmatic relief in this proposed settlement by challenging, without any factual basis, the “concept of a Power Ranking,” and suggests that “awarding points based on commission generated or assets under management only institutionalizes and perpetuates the bias.” Neither of those assertions has any basis in fact. As counsel for the Moore group is well aware (because they raised the same claim in their challenge

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to the Augst-Johnson settlement), before finalizing the changes to the Power Rankings formula in connection with the Augst-Johnson settlement, Morgan Stanley: (a) made changes to the formula originally negotiated with the Augst-Johnson plaintiffs as a result of race-based concerns raised by the Jaffe plaintiffs and (b) tested the final formula for an adverse impact on minority Financial Advisors. (See Augst-Johnson Final Approval Order, attached to Dichter Decl. at Ex. B, ¶ 8) (“The objector’s contention that none of the proposed injunctive relief was studied for possible unfair disparate impact upon African-American employees is countered by Morgan Stanley’s uncontradicted response that revised factors for account distributions were examined for such adverse impact and that no such adverse impact was shown.”); see also Pappas Decl. at ¶ 14.) Race-based concerns touching on the Power Rankings formula were extensively discussed and addressed in the course of the negotiations that led to the Jaffe settlement and the concerns expressed by the Moore group as to the Power Rankings, based on nothing more than false speculation, should give way to the judgment of counsel for the Jaffe plaintiffs, who personally addressed those issues.7

2. Settlement Provisions Providing For Opt-Out Credits and Morgan Stanley's Option To Terminate The Agreement Are Standard In Class Agreements And Do Not Provide A Basis To Deny Approval.
The Moore group also suggests that terms in the proposed settlement allowing Morgan
Stanley to (1) take a credit against the Settlement Fund for class members who opt out and
(2) elect to terminate the settlement agreement should a certain number of class members opt out
requires that the settlement not be approved. They provide, however, no authority to support that
notion. Such “opt out credit” and so-called “bust-up” provisions are commonly included in class
action settlement agreements to protect defendants from situations where the number of opt outs

7 The Moore group also falsely alleges that Morgan Stanley has “shut out the class members in Augst-Johnson and Jaffe from challenging the Power Ranking” by protecting them from public disclosure. To the contrary, Morgan Stanley has merely acted to protect its strong proprietary interest in maintaining the confidentiality of its Power Rankings system and formula since it would be at a competitive disadvantage if its competitors in the financial services industry were able to access the Power Rankings formula and to use the formula for their own competitive advantage. The legitimacy of this proprietary interest as a basis for protecting against the public disclosure has been recognized by each of the two federal courts, including this Court, that approved the sealing of the Power Rankings formula associated with the respective settlement agreements in Augst-Johnson and Jaffe. (See Dichter Decl. at ¶20, Exs. C and D). Moreover, the counsel and class representatives in Augst-Johnson and Jaffe cases were given full opportunity to review and request changes to the formula in the course of settlement negotiations.

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is so high that, despite agreeing to pay significant monetary relief, the defendant is unexpectedly exposed to many individual claims asserted in private actions by opt outs. Both provisions fairly protect Morgan Stanley from such a scenario and should not impede settlement approval.
The inclusion of such provisions is common and settlement agreements that include them are regularly approved by the federal courts. For example, similar provisions are present in the Augst-Johnson settlement agreement that has already been approved by the U.S. District Court for the District of Columbia. Moreover, courts in this District and others have routinely approved proposed class action settlement agreements containing language providing for an “opt-out credit” or allowing a party to terminate the agreement given a particular number of opt-outs. See, e.g., Gonzalez, et al. v. Abercrombie & Fitch, Case Nos. 03-2817 SI, 04-4730 and 04-4731 (N.D. Cal.) (containing an "opt-out credit" provision); Satchell, et al. v. Federal Express Corp., Case No. 03-CV-02659 (N.D. Cal) (same); Abdallah v. The Coca-Cola Company, Case No. 98-CV379 (RWS) (N.D.Ga.) (containing an opt-out related termination provision).8 These provisions are reasonable and fair, and should not impede preliminary approval.9
3. The Exclusion Of Branch Managers From The Settlement Class Does Not Undermine Conditional Class Certification.
Finally, the Moore group's argument that the exclusion of Financial Advisors with management responsibilities from the class is "unfairly restrictive" ignores conflicts of interest that would arise from the presence of both Financial Advisors and those who supervise and manage them in the same class. Though the Moore group attempts to artfully limit the managers

8 Such terms are also recognized by the Manual for Complex Litigation. See Manual for Complex Litigation at 21.652 (“The parties sometimes propose a precertification settlement that permits the settling parties to withdraw from the settlement if a specified number of persons opt out of the class or settlement. . . An alternative approach is to provide that the benefits paid to the class will be reduced in proportion to the number of opt outs . . . ”).

9 In addition, the Moore group objects on the grounds that the proposed settlement does not contain language through which Morgan Stanley agrees to “continue to provide employees access to court, and not mandatory arbitration of their civil rights claims, for the duration of any consent decree.” (Moore Objs. at 22-23.) The foundation for this objection is unclear, though, since Morgan Stanley does not require employees to arbitrate civil rights claims, nor does it currently plan to do so. See Augst-Johnson Final Approval Order, attached to Dichter Decl. at Ex. B, ¶ 8 (addressing the same argument raised by Stowell & Friedman in the Augst-Johnson case and stating that "[C]ontrary to the objector’s fear, the Settlement Agreement does not bar a Class Member from pursuing in court any legal claim not released under the Settlement Agreement if she is otherwise entitled to do so.")

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at issue to "assistant" managers, the fact remains that the Jaffe plaintiffs have put at issue alleged discrimination against African-American and Latino Financial Advisors by branch management, assistant or otherwise. One member of the Moore group, Mary Harris Evans, claimed in a submission to this Court that, in her capacity as an Assistant Branch Manager, she performs the duties of a Branch Manager. (See Ex. 3 to Moore Objs.). Having both Financial Advisors and the managers/decision-makers accused of engaging in race discrimination would create a conflict of interest that would prevent class certification under Fed. R. Civ. P. 23. (See, e.g., AugstJohnson Final Approval Order, Dichter Decl., Ex. B, at ¶ 8) (rejecting the same objection when raised by the Stowell & Friedman firm in the Augst-Johnson case because "The objection that the Class should include management personnel does not take account of the fact that including management personnel would present possible conflicts of interest with Class Members."). IV. CONCLUSION
As demonstrated above, the Moore group's objections to the preliminary approval of this proposed class action settlement are premised on misstatements of fact, unjustified and unsupported allegations of collusion, baseless conjecture regarding the actions and motives of the parties to the settlement, and baseless speculation as to the effect of this settlement. These types of objections should not impede the preliminary approval of this settlement where the factual record before the Court demonstrates that the proposed settlement was negotiated at arm’s length by the parties with assistance from experienced and knowledgeable counsel and a highly respected and skilled neutral mediator and is fundamentally fair, adequate and reasonable. Far from preventing preliminary approval, a presumption of fairness should arise under the circumstances presented. Contrary to the allegations levied by the Moore group, the proposed settlement provides significant monetary relief, as well as meaningful and innovative programmatic relief, that is well within the “range of reasonableness” for approval purposes. /// /// ///

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For these reasons, and those stated above, Defendant Morgan Stanley & Co. Incorporated respectfully requests that the Court reject the objections filed by these putative class members and issue an order preliminarily approving the proposed settlement agreement in this case.

Dated: November 19, 2007

By: /s/ L. Julius M. Turman L. Julius M. Turman
MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442-1361 Facsimile: (415) 442-10001
Attorneys for Defendant Morgan Stanley & Co. Incorporated

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1 James M. Finberg (SBN 114850) Eve H. Cervantez (SBN 164709)
2 ALTSHULER BERZON LLP 177 Post Street, Suite 300
3 San Francisco, CA 94108 Telephone: (415) 421-7151
4 Facsimile: (415) 362-8064 Email: jfinberg@altshulerberzon.com
5 Email: ecervantez@altshulerberzon.com

6 Kelly M. Dermody (SBN 171716) Daniel M. Hutchinson (SBN 239458)
7 Heather H. Wong (SBN 238546) LIEFF, CABRASER, HEIMANN &
8 BERNSTEIN, LLP 275 Battery Street, 30th Floor
9 San Francisco, CA 94111-3339 Telephone: (415) 956-1000
10 Facsimile: (415) 956-1008 Email: kdermody@lchb.com
11 Email: hwong@lchb.com

Adam T. Klein (pro hac vice) Piper Hoffman (pro hac vice) Justin Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005 Email: atk@outtengolden.com Email: ph@outtengolden.com Email: jms@outtengolden.com

12

13 Attorneys for the Plaintiffs

14 UNITED STATES DISTRICT COURT
15

16

NORTHERN DISTRICT OF CALIFORNIA

17

SAN FRANCISCO/OAKLAND DIVISION

18

19
DAISY JAFFE, DENISE WILLIAMS, and 20 MARGARET BENAY CURTIS-BAUER,
on behalf of themselves and all others 21 similarly situated,

22

Plaintiffs,

23

v.

24 MORGAN STANLEY DW, INC.,

25

Defendant.

26

Case No. C 06-3903 TEH
CLASS ACTION
FURTHER MEMORANDUM OF PLAINTIFF CURTIS-BAUER IN SUPPORT OF MOTION FOR PRELIMINARY SETTLEMENT APPROVAL AND PROVISIONAL CERTIFICATION OF SETTLEMENT CLASS

27

28
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1 I. INTRODUCTION

2

This memorandum, along with the previously-submitted supplemental declarations of

3 Adam Klein and Margaret Benay Curtis-Bauer (filed on January 10, 2008, Dkt. No. 132), and the

4 accompanying modified and corrected settlement agreement, notice, and claim form, are

5 submitted pursuant to this Court’s December 12, 2007 order. The Klein declaration confirms that

6 the $16 million in monetary relief provided by the proposed settlement is indeed “a healthy 43%

7 of the possible recovery” for lost income, assuming plaintiffs were to prevail on liability issues,

8 including establishing a causal connection between defendant’s policies and practices and the 9 lower earnings of class members.1 The supplemental Curtis-Bauer declaration, together with this

10 memorandum, confirm that Ms. Curtis-Bauer will be releasing valuable, timely non-class claims, 11 and that Ms. Curtis-Bauer was actively engaged as a class representative.2 The supplemental

12 declaration of Ms. Curtis-Bauer also confirms that Ms. Curtis-Bauer understands that the $25,000

13 her counsel are requesting as payment for her services to the class is subject to the Court’s

14 approval and discretion, and she will support the settlement even if the Court reduces, or even 15 denies entirely, that requested sum.3

16 1 Since Mr. Klein’s declaration contains work product that Plaintiff’s counsel would not want to
17 share with defendant in the event that the settlement is not approved, Plaintiff’s counsel have requested that Mr. Klein’s declaration be submitted in camera. Defendant does not oppose that
18 request. Defendant has also agreed that it will not seek to have the Court disqualified from this action as a result of the Court’s in camera review of Plaintiff’s work product.
19

20

2 Plaintiff Curtis-Bauer is submitting parts of her declaration addressing solely her personal, individual, non-class claims under seal, subject to Court approval.

21 3 This supplemental brief, and accompanying declarations, establish that Ms. Curtis-Bauer is an

22 adequate class representative. If, even in light of the additional evidence and argument the Court

remains concerned about Ms. Curtis-Bauer serving as the sole representative of the class, counsel

23 for Ms. Curtis-Bauer submit that they could ask one of the 10 other Class Members who have

reviewed the settlement and submitted letters of support (see Exhibits to Reply Declaration of

24 Heather Wong in Support of Preliminary Approval, filed November 19, 2007), if they would be

willing to serve as a class representative. Courts have held that a class representative can be

25 adequate even when she first becomes involved post-settlement. Olden v. LaFarge Corp., 472 F.

Supp. 2d 922, 937-39 (E.D. Mich. 2007) (allowing substitution post-settlement where the prior

26 class representatives were inadequate because they opposed the settlement); Heit v. Van Ochten,

126 F. Supp. 2d 487, 495 (W.D. Mich. 2001) (granting Plaintiff's counsel’s Motion to substitute

27 new named plaintiff post-settlement). In Olden, 472 F. Supp. 2d 922, the prior class

representatives presented evidence raising questions about the new class representatives’

28 knowledge of the litigation. Nonetheless, the court held the new representatives to be adequate

because they were “capable of protecting the interests of the class as the litigation winds down.”

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1

The changes and corrections to the settlement agreement and notice (1) confirm that,

2 under the plan of allocation, class members will recover based on an earnings regression analysis,

3 time served in a Class position during the class period, and claimants’ reported emotional distress

4 or production-related termination or constructive discharge – not on the release of non-class

5 claims or service to the class; (2) confirm that this Court will retain jurisdiction to enforce the

6 terms of the settlement; (3) confirm the amounts of attorneys’ fees sought by counsel; and (4)

7 inform this Court that Fred Alvarez, a former Commissioner of the Equal Employment

8 Opportunity Commission, will serve as Diversity Monitor. The revised claim form deletes the

9 requirement that class members state they believe that they were victims of discrimination.

10

As to the value of the injunctive relief, counsel for plaintiff Curtis-Bauer submit that the

11 value of the injunctive relief should be measured by what it accomplishes. Morgan Stanley may

12 submit a further declaration regarding the cost of providing the required programs and making the

13 required changes. Regardless of the cost to Morgan Stanley of providing these programs and

14 making these changes (which does not go directly to the fairness, reasonableness, and adequacy

15 of the settlement, but instead to whether the statements in the notice are accurate), the injunctive

16 relief provided in this settlement, which the Court has found “represent[s] a genuine expansion

17 rather than a dilution of relief already ordered in Augst-Johnson” Dec. 12, 2007 (Order at p. 6),

18 will foster equal employment opportunity at Morgan Stanley, to the benefit of Class Members.

19 II. ARGUMENT

20

A. Ms. Curtis-Bauer satisfies Rule 23(a)(4)’s Adequacy Requirement.

21

1. Ms. Curtis Bauer, Unlike Other Class Members, Is Releasing

Valuable, Timely, Non-Class Claims. 22

Ms. Curtis-Bauer’s supplemental declaration describes the factual basis for her non-class 23

claims. Those claims are beyond the scope of the limited class release. Those claims include 24

claims for race harassment, wrongful termination, and breach of contract. Supp. Curtis-Bauer 25

Decl., ¶¶ 3-9. Ms. Curtis-Bauer’s declaration describes how she was subjected to ongoing race 26

harassment. She was subject to derogatory language in the workplace and racially offensive 27

28 Id. at 939.
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1 comments from both co-worker and management. Id., ¶¶ 3-4. Despite Ms. Curtis-Bauer’s

2 complaints to Morgan Stanley’s management, Ms. Curtis-Bauer states that Morgan Stanley did

3 not address these issues; instead Morgan Stanley failed to respond to Ms. Curtis-Bauer’s several

4 complaints. Following her legitimate complaints about offensive racially-based conduct and

5 comments, Morgan Stanley terminated Ms. Curtis-Bauer. Id., ¶¶ 3-5. As a result of Morgan

6 Stanley’s conduct relating to matters not covered by the class claims or release, Ms. Curtis-Bauer

7 lost income and suffered emotional distress damages. Supp. Curtis-Bauer Decl.

8

Contrary to the arguments of objectors, Ms. Curtis-Bauer has valid grounds for arguing

9 that her non-class claims were timely when settled. Those claims arise under, among other

10 statutes, California Business and Professional Code Section 17200 (for terminating someone in

11 violation of public policy); the California Civil Code provisions regarding contract; and Section

12 1981 – all of which have four year statutes of limitation. Since Ms. Curtis-Bauer did not leave

13 Morgan Stanley until November, 2002, all of those claims were still timely in October 2006.

14 Those claims were thus alive and preserved in August 2006 when Morgan Stanley signed a

15 tolling agreement with the Moore Group regarding claims of race discrimination. In addition,

16 Ms. Curtis-Bauer has a legitimate argument that her claims should relate back to the filing of the

17 Jaffe case in June 2006, or its first amendment to include race claims in October 2006.

18

The settlement of non-class claims by a class representative in exchange for consideration

19 separate from the class settlement does not render a class representative inadequate. 8 Newburg

20 on Class Actions § 24.129 (4th ed. 2002). See Krensniak v. Cendant Corp., 2007 WL 1795703

21 (N.D. Cal. 2007) (citing In re Activision Sec. Litig., 621 F. Supp. 415 (N.D. Cal. 1985); see also

22 Satchell v. FedEx, 2006 WL 350791 at *1 (N.D. Cal. 2006) (proposed class representatives not

23 rendered atypical by virtue of non-class claims).

24

The proposed service payment of $25,000 that Ms. Curtis-Bauer’s counsel are requesting

25 for her appropriately recognizes the time and effort she expended on behalf of the plaintiff class.4

26 “Courts routinely approve incentive awards to compensate named plaintiffs for the services they

27 4 Ms. Curtis-Bauer understands that the proposed $25,000 service payment is subject to Court

28 approval and supports the proposed Settlement regardless of whether she receives a service

payment. Supp. Curtis-Bauer Decl., ¶ 11.

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1 provided and the risks they incurred during the course of the class action litigation.” Ingram v.

2 The Coca-Cola Co., 200 F.R.D. 685, 694 (N.D. Ga. 2001) (quoting In re S. Ohio Correctional

3 Facility, 175 F.R.D. 270, 272 (S.D. Ohio 1997). In Staton v. Boeing, 327 F.3d 938, 977 (9th Cir.

4 2003), the Ninth Circuit reaffirmed that “named plaintiffs . . . are eligible for reasonable incentive

5 payments.” Such awards are particularly appropriate in employment discrimination actions

6 because “the plaintiff is frequently a present or past employee whose present position or

7 employment credentials or recommendation may be at risk by reason of having prosecuted the

8 suit, who therefore lends his or her name and efforts to the prosecution of litigation at some

9 personal peril.” Roberts v. Texaco, Inc., 979 F. Supp. 185, 201 (S.D.N.Y. 1997) (approving

10 individual incentive awards of $85,000 and $50,000 to plaintiffs who had initiated the class

11 action, and $25,000 to named plaintiffs who joined lawsuit after its commencement).

12

In this case, Ms. Curtis-Bauer performed important services for the benefit of the plaintiff

13 class. Supp. Curtis-Bauer Decl., ¶¶ 10-16. She provided information to counsel during lengthy

14 interviews, actively worked with Plaintiff’s counsel since she became involved in the case, and

15 took the significant risk of stepping forward on behalf of the class in an industry where

16 challenging the employer can be career ending. Id. The valuable efforts of the class

17 representative, her willingness to litigate and pursue her representative claims, and the strength of

18 her claims have resulted in a settlement that will benefit all Settlement Class Members. Id. A

19 $25,000 service payment is appropriate.

20

2. Ms. Curtis-Bauer Has Been an Active and Engaged Class

Representative. 21

22

Ms. Curtis-Bauer’s December 5, 2007 declaration in support of preliminary approval,

23 and most recent supplemental declaration provides detailed information regarding her

24 participation in this lawsuit. See Declaration of Margaret Benay Curtis-Bauer in Support of

25 Preliminary Settlement Approval (“Curtis-Bauer Decl.”); Supp. Curtis-Bauer Decl., ¶¶ 2, 10-16.

26 Ms. Curtis-Bauer’s primary motivation for her involvement in this litigation is to “effectuate

27 systematic change at Morgan Stanley.” Supp. Curtis-Bauer Decl., ¶ 10. She has been an engaged

28 class representative since joining the case, and has vigorously represented the class’ interests

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1 pursuant to her fiduciary duties to the class she seeks to represent. Id., ¶ 10-16.

2

Ms. Curtis-Bauer’s declarations delineate the timeline over which she participated in this

3 lawsuit, including her first contact with counsel in May 2007. She has monitored and contributed

4 to this case since she became involved; provided all relevant information about Defendant and her

5 claims to her counsel; carefully reviewed drafts of the operative Complaint, all Settlement terms,

6 and other documents before authorizing her attorneys to file them; provided input on these key

7 documents; participated in regular conversations with her counsel; and ensured that the Second

8 Amended Complaint and Settlement submitted to the Court addressed her concerns. Curtis-Bauer

9 Decl., ¶¶ 4-5; Supp. Curtis-Bauer Decl., ¶¶ 2, 10-16. Her Supplemental Declaration details two

10 specific contributions that Ms. Curtis-Bauer sought to have included in the Settlement. Supp.

11 Curtis-Bauer Decl., ¶ 14. She has appropriately ensured that the approach taken by her counsel

12 has been well-informed and well-suited to achieve the goals of this lawsuit. Id.

13

The true test of adequacy is measured by the litigation outcomes. Where a class

14 representative has secured a settlement that is fair, adequate and reasonable, like Ms. Curtis-

15 Bauer has done here, she is presumptively adequate. See Hemphill, 225 F.R.D. at 622 (“It is,

16 ultimately, in the settlement terms that the class representatives’ judgment and the adequacy of

17 their representation is either vindicated or found wanting. If the terms themselves are fair,

18 reasonable and adequate, the district court may fairly assume that representation was adequate.”)

19 (quoting In re Corrugated Container Antitrust Litig., 643 F.2d 195 (5th Cir. 1981). As

20 demonstrated by the fair, adequate, and reasonable settlement negotiated on her behalf, and her

21 engaged actions on behalf of the class since joining this lawsuit, Ms. Curtis-Bauer is an adequate

22 representative of the class she seeks to represent.

23

B. The Supplemental Declaration of Adam Klein Confirms That the Monetary

Relief Provided by the Proposed Settlement is a “Healthy 43% of the Possible

24

Recovery” of Lost Earnings, Assuming Plaintiff Were To Prevail on Liability,

Including Establishing Causation. 25

In its Order, the Court invited Plaintiff to submit evidence in support of Plaintiff’s 26

counsel’s statement at the hearing that Plaintiff estimated the value of the lost earnings claims of 27

the class, if the class were to prevail at trial, at $36,000,000. The Supplemental Declaration of 28

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1 Adam Klein, and the contemporaneous e-mail report from Plaintiff’s counsels’ independent

2 statistical expert provide evidentiary support for Plaintiff’s counsels’ statement at the hearing, and

3 confirm that the monetary relief provided is “fair, reasonable, and adequate.”

4

5

C. Regardless of its Precise Cost, the Injunctive Relief Provided by This Settlement Has Great Value to Class Members.

6

7

This Court has already found that “[t]he programmatic relief set at in Sections VII.B,

8 VII.C, VII.D.2.d, VII.E, and VII.G appears to represent a genuine expansion rather than a dilution

9 of the relief already ordered in Augst-Johnson.” (Dec. 12, 2007 Order at p.6). Regardless of the

10 precise cost to Morgan Stanley of making the required changes and providing the required

11 programs, the injunctive relief afforded by this proposed settlement will foster equal employment

12 opportunity at Morgan Stanley, and benefit Class Members.

13

The “value” of the programmatic relief is not the same as the $7.5 million estimate listed

14 in the Settlement Agreement and Notice. The $7.5 million estimate merely describes the

15 estimated “cost” of implementing programs for the benefit of the Class, not their “value” to the

16 Class. The true “value” of the Settlement’s programmatic relief is likely significantly greater than

17 the amount that Defendant will pay to implement these changes. The true “value” of the

18 proposed Settlement will include the increased earnings to African Americans and Latinos who

19 secure employment, receive support to succeed, and enjoy greater accounts and compensation due

20 to enhanced opportunities and fair distributions.

21

Counsel for Plaintiff Curtis-Bauer understand that Morgan Stanley may make a further

22 submission regarding the cost of the injunctive relief, which really bears more on the accuracy of

23 the notice than on the fundamental fairness of the relief provided.

24 D. The Parties Have Modified the Settlement Agreement to Correct Certain

25

Errors Noted By, and Make Certain Modifications Suggested By, the Court.

26 Filed together with this brief, attached to the Revised [Proposed] Preliminary Approval
27 Order, are a revised settlement agreement, notice, and claim form.
28

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1

The revised settlement agreement (1) confirms this Court will retain jurisdiction to

2 enforce the terms of the settlement agreement; (2) confirms the plan of allocation – based on the

3 earnings regression analysis, time served in a Class position during the class period, and

4 claimants’ reported emotional distress or production-related termination or constructive discharge

5 – not on the release of non-class claims or service to the class; (3) confirms the amount of

6 attorneys’ fees sought by counsel; and (4) informs the Court that Fred Alvarez will serve as the

7 Diversity Monitor. Counsel have also corrected typographical errors where they were observed.

8

The changes to the notice and claim form track those changes to the Agreement. In

9 addition, the claim form no longer requires a claimant to state that he or she believes he or she

10 was discriminated against in order to recover.

11 II. 12

CONCLUSION For all of the foregoing reasons and those presented in Plaintiff’s pleadings filed on

13 October 22, 2007 and November 19, 2007 and the arguments made at the December 3, 2007

14 hearing, Plaintiff respectfully requests that the Court preliminarily approve the settlement and

15 provisionally certify a settlement class.

16

17 Dated: January 14, 2008
18
19

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

20

By: ______ /s/ Kelly M. Dermody

Kelly M. Dermody 21

Kelly M. Dermody

22

Daniel M. Hutchinson

Heather H. Wong

23

LIEFF, CABRASER, HEIMANN &

BERNSTEIN, LLP

24

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

25

Telephone: (415) 956-1000

Facsimile: (415) 956-1008 26

27

28
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
743676.1

James M. Finberg Eve H. Cervantez ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064
Adam T. Klein Piper Hoffman Justin Swartz OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
Attorneys for Plaintiffs

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 Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 1 of 8

James N. Penrod (State Bar No. 43030) Rebecca D. Eisen (State Bar No. 96129) 2 L. Julius M. Tunnan (State Bar No. 226126) MORGAN, LEWIS & BOCKIUS LLP 3 One Market, Spear Tower San Francisco, CA 94105 4 Direct: 415.442.1361 Fax: 415.442.1001
5 Mark S. Dichter, admitted Pro Hac Vice
6 MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street
7 Philadelphia, PA 19103 Tel: 215.963.5000
8 Fax: 215.963.5001

9 Kenneth J. Turnbull, admitted Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP
10 101 Park Avenue NewYork,NY 10178
11 Tel: 212.309.6000 Fax: 212.309.6001
12 Attorneysfor Defendant
13 Morgan Stanley & Co. Incorporated.

14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

16

SAN FRANCISCO DIVISION

17 DAISY JAFFE, DENISE WILLIAMS, and MARGARET BENAY CURTIS-BAUER
18 on behalf of themselves and all others similarly situated,
19 Plaintiffs,
20
vs. 21
MORGAN STANLEY & CO. 22 INCORPORATED, f/kla/ MORGAN
STANLEY DW, INC., 23
Defendant. 24

Case No. C 06 3903 (TEB)
DEFENDANT'S SUPPLEMENTAL MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY SETTLEMENT APPROVAL AND PROVISIONAL CERTIFICATION OF SETTLEMENT CLASS

25 I. INTRODUCTION

26

Defendant Morgan Stanley & Co. Incorporated ("Morgan Stanley" or "Defendant") hereby

27 submits this memorandum, along with the accompanying supplemental declarations of Kathleen K.

28
MORCA:\, LEWIS & BOCKllS LLP

Lundquist ("Lundquist Supp. Dec.") and Alexa B. Pappas ("Pappas Supp. Dec."), pursuant to this

SF17653591.1

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SUPP. MEMO ISO Or PRELIMINARY APPROVAL (C 06 3903 (TEll»

Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 2 of 8

Court's Order of December 12, 2007. Defendant submits this information to provide the Court

2 with additional evidence about the programmatic relief agreed to by the parties and the value such

3 relief can be anticipated to provide to the proposed class of African American and Latino Financial

4 Advisors and Financial Advisor Trainees ("minority FAs").

5

As Dr. Lundquist's declaration confirms, it is premature to determine the exact

6 recommendations the industrial psychologists will make to Morgan Stanley. However, based on

7 her extensive knowledge and experience in formulating such programs, as well as the commitment

8 that Morgan Stanley has already shown to working with the industrial psychologists, she is

9 confident that the programmatic relief will further enhance Morgan Stanley's success in attracting

10 and retaining minority FAs and increase their productivity during employment. Making modest

11 assumptions about the level of success to be achieved by the changes, Dr. Lundquist believes that

12 millions of dollars of value will be delivered to the minority FAs over the term of the settlement

13 agreement in addition to the $16 million monetary settlement fund.

14

The supplemental Pappas declaration demonstrates that Morgan Stanley'S management has

15 made very significant commitments above and beyond the implementation of the recommendations

16 of the industrial psychologists. Morgan Stanley has agreed to adopt new diversity programs and

17 maintain and improve upon its race-based diversity programs, policies and initiatives throughout

18 the five-year term of the settlement agreement. This commitment, which includes an agreement by

19 Morgan Stanley not to discontinue or eliminate certain of its existing diversity programs, will also

20 deliver significant value to the minority FAs. Morgan Stanley also agreed to make changes to its

21 Power Rankings formula in addition to the changes originally agreed to in the Augst-Johnson

22 gender discrimination matter. These changes were designed to specifically address the concerns

23 raised by class counsel on behalf of African American and Latino Financial Advisors, by placing

24 more emphasis on current performance and activities of Financial Advisors, and significantly

25 reducing the reliance on historical performance. As a result, African American and Latino

26 Financial Advisors who are currently performing well will likely enjoy increased participation in

27 the account distributions.

28
MOReAI'<, LEWIS & BOCKfUS LLP

While the ultimate value of the new and committed programmatic changes cannot be 2
SUPP. MEMO ISO OF PRELIMINARY APPROVAL
\.
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determined at this time with precision, the programmatic changes agreed upon, and those to be

2 developed by the industrial psychologists, are estimated to cost approximately $7.5 million. These

3 progran1s and changes can be expected to deliver many millions of dollars of value to the proposed

4 class of African American and Latino FAs.

5 II.

ARGUMENT

6

This Court has already found that "[t]he programmatic relief set out in sections VII.B,

7 VII.C, VILD.2.d., VIl.E and VILG [of the proposed settlement agreement] appears to represent a

8 genuine expansion rather than a dilution of relief already ordered in [the] Augst-Johnson [gender

9 discrimination settlement agreement]." (December 12, 2007, Order at pg. 6). Morgan Stanley

10 estimates that it will spend approximately $7.5 million to implement the programmatic relief. This

II relief will result in improved success in hiring, training, developing, retaining minority FAs and

12 enhance their production.

13

A. The Industrial Psychologists Believe, Based On Their Experience And

Expertise, That The Programmatic Changes Will Increase Morgan Stanley's

14

Success In Attracting, Developing And Retaining Minority FAs And Increase

The Production Of Those Minoritv FAs.

15

16

As set forth in Dr. Lundquist's declaration, she has extensive experience as an

17 industrial psychologist in some of the nation's largest and most well-known class action race

18 discrimination settlements. (Lundquist Supp. Dec. ~~2-3). She also has experience designing

19 recommendations and programs to meet the injunctive relief provisions oflarge race and gender

20 class action settlements. (See Lundquist Supp. Dec. ~~2-7).

21

The parties' settlement agreement in the instant matter gives the industrial

22 psychologists broad responsibilities and empowers them to make recommendations to improve

23 Morgan Stanley's hiring practices; EEO and problem resolution processes; posting and selection
24 procedures for Branch Management positions; diversity training; compensation for management to

25 reinforce diversity efforts; account distribution processes; development, training and mentoring

26 programs; and exit interviews. (Lundquist Supp. Dee. '15); see also Sections VII.B, VILC,

27 VII.D.2.d., VIl.E and VILG of the proposed settlement agreement). The work has already begun.

28
MORCAt\, LEWIS & BOCKluS LLP

Dr. Lundquist, along with the other appointed industrial psychologist, Dr. Irwin Goldstein, has 3
SUPP. MEMO ISO OF PRELIMINARY APPROVAL
1-
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I reviewed FA compensation information and analyzed documents and policies to get a base

2 understanding of Morgan Stanley's policies, practices and initiatives. They have begun job

3 observations and evaluations, and have conducted numerous interviews of Morgan Stanley's FAs.

4 They have also interviewed the Human Resource professionals responsible for hiring, mentoring

5 and training, and have met with Regional Management and the firm's senior-most executives.

6 (Lundquist Supp. Dec. ~6). Morgan Stanley has demonstrated it is committed to bring about

7 change, and it is prepared to implement changes recommended by the industrial psychologists that

8 are likely to enable it to improve its hiring, development and retention of minority FAs. (Pappas

9 Supp. Dec. ~'18-9; Lundquist Supp. Dec. ~7).

10

Although it is too early in the process for Dr. Lundquist to state the actual program

11 recommendations that will be presented to Morgan Stanley for implementation, her past

12 experiences in similar situations provide a framework for identifying certain factors that she

13 believes will enhance Morgan Stanley's success in attracting, retaining and increasing the

14 productivity of minority FAs during their employment at Morgan Stanley. (Lundquist Supp. Dec.

15 ~8). Based upon her work in other matters, Dr. Lundquist expects the recommended changes will

16 deliver significant value to the class.

17

Even with conservative estimates as to the improvement in productivity, retention

18 and hiring that will be accomplished as a result of the changes, Dr. Lundquist expects the

19 programmatic relief will deliver millions of dollars of value to the minority FAs. (Lundquist Supp.

20 Dec. ~9). For example, if the programmatic changes enable Morgan Stanley to attract and retain

21 just three additional African American and/or Latino FAs in each of the next five years, this would

22 also represent a value of approximately $4 million to the class of minority FAs over the settlement

23 tenn. (Lundquist Supp. Dec. ~9(c».

24

Similarly, if the programmatic changes enable Morgan Stanley to retain five

25 minority FAs each year for just one additional year of service over the course of the settlement,

26 this would also represent a value of approximately $4 million to the class of minority FAs over the

27 settlement term. (Lundquist Supp. Dec. ~9(b».

28
MORGA\:, LEWIS & BOCKIGS LLl-'
AnO"I''''-\'; A1 LAW SAN FRA'KI""

Finally, in addition to improvement in hiring and retaining minority FAs, Dr. 4
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Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 5 of 8

Lundquist expects the programmatic changes to improve the productivity, and thus the earnings, of

2 minority FAs during the course of their employment with Morgan Stanley. If the earnings of

3 minority FAs increase just 2% each year of the settlement agreement, this will represent a value of

4 approximately $4 million over the settlement tenn. (Lundquist Supp. Dec. ~9(a)).

5

Dr. Lundquist believes the above-referenced goals are attainable based upon her past

6 experience in similar situations. She is also encouraged by the enthusiastic feedback she has

7 received from Morgan Stanley and the level of cOl1ll1litment and participation that Morgan Stauley

8 has already demonstrated with regard to the injunctive relief provisions of the settlement

9 agreement. (Lundquist Supp. Dec. ~7). Such factors are not only a strong indication that Morgan

10 Stanley will accept the recommendations of the industrial psychologists, but they bolster the stated

II commitment to bring about change and increase benefits to minority FAs.

12

B. Morgan Stanley's Commitment To Programmatic Relief And Its Agreement To

Adopt And Implement Race-Based Initiatives And Changes To The Power

13

Rankings Formula Will Deliver Significant Value To The Class.

14

As a result of the settlement negotiations with counsel in this case, and in response

15 to the concerns of African American and Latino Financial Advisors raised by their counsel,

16 Morgan Stanley agreed to programmatic changes involving several race-based diversity programs,

17 policies and initiatives that reflect its commitment to increase its recruiting, hiring and retention of

18 African Americans and Latinos. The minority-focused programs, policies and initiatives include:

19

a.

Maintaining a dedicated position within the Global Wealth Management

20

Group ("GWMG") whose primary function is sourcing and recruitment of diverse

21

candidates.

22

b.

Sourcing diverse candidates for entry level jobs through Morgan Stanley's

23

Summer Internship, Richard Fischer Scholarship and similar programs.

24

c.

Conducting a biannual Minority Business Exchange, a national program

25

for African Americans, Latinos and other minorities Financial Advisors, where the

26

different pathways to success at Morgan Stanley are discussed and

27

recommendations for business development and growth are shared.

28
;-viORCM\, LE,VlS &
B()CKIUS LLP
>\IT')~NF)~ Al LA'" SAN r'A>.;Q,,-,'

d. SF17653591.1

Providing additional study materials and resources to assist the Financial 5
SUPP. MEMO ISO OF PRELIMINARY APPROVAL
1·

Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 6 of 8

Advisor Trainees in obtaining the Series 7 registration.

2

e.

Conducting exit interviews of Financial Advisors and Registered Financial

3

Advisor Trainees who terminate voluntarily in order to gain a better understanding

4

as to the reason for the departures. (Pappas Supp. Dec. '4).

5

Many of the programmatic changes agreed to in connection with the Augst-

6 Johnson gender discrimination matter have been extended to include and address race-based

7 concerns. These programs include:

8

a. Including a diversity component III Branch Manager compensation designed to

9

measure and reward efforts at recruiting, training, and retaining diverse Financial

10

Advisors, including African Americans and Latinos (although the monitoring of

11

this process is enhanced in the Jaffe agreement).

12

b. Developing workplace initiatives designed to attract certain employee populations

13

(e.g., women in Augst-Johnson, and African Americans and Latinos in the Jaffe

14

agreement) to encourage their recruitment, retention and enhanced success (with

15

enhanced emphasis in the Jaffe agreement on scholarships, targeted mentoring and

16

training, and access to networking groups). (Pappas Supp. Dec. '5).

17

Furthennore, certain of the programs agreed to in the Augst-Johnson settlement

18 inure to the benefit of the African American and Latino Financial Advisors. These programs

19 include:

20

a. Increasing opportunities for Branch Manager mobility by posting all

21

available Branch Manager, Financial Advisor in Charge, Sales Manager, and

22

Assistant Branch Manager positions on GWMG's Internal Job Bank; and

23

b. Using GWMG's newly-developed comprehensive management assessment

24

and development program to provide candidates with a fonnal and transparent path

25

to assessment and selection as branch managers, and provide field management

26

with an established and tested protocol for selection of high-potential candidates

27

by trained assessors. (Pappas SUpp. Dec. '6).

28
>-lORCA\:, LEWIS & BOCKIUS LLP

Some programs and initiatives, such as providing additional study materials and 6
SUPP. MEMO ISO OF PRELIMINARY APPROVAL 1·
SF17653591.1

Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 7 of 8

resources to assist the Financial Advisor Trainees in obtaining the Series 7 registration are new

2 initiatives for Morgan Stanley and are being implemented as a result of the parties' settlement.

3 Some. such as including a component in Branch Manager compensation designed to measure and

4 reward their efforts in recruiting diverse candidates, represent an enhancement of Morgan

5 Stanley's existing programs. Other programs, such as the Minority Business Exchange, have been

6 conducted in the past, but the settlement incorporates Morgan Stanley'S agreement to continue and

7 not to eliminate such programs throughout the term of settlement. (Pappas Supp. Dec. '\[7).

8

Morgan Stanley'S commitment to meeting the concerns of minority FAs is further

9 demonstrated by its agreement to change the Power Ranking formula. For the Court's review, the

10 modified formula has been filed with the Court under seal. (Dkt. #I 00). The changes place more

11 emphasis on current performance and activities of FAs and reduce tile reliance on historical

12 performance. (Pappas Supp. Dec. '\[3). As a result, minority FAs who are currently perfonning

13 well will likely enjoy increased participation in the account distributions than they otherwise would

14 have under the old factors. (Pappas Supp. Dec. '\[3).

15

It is estimated that Morgan Stanley will spend $7.5 million implementing the

16 programmatic relief that is aimed squarely at the class members in this case - African American

17 and Latino Financial Advisors and Registered Financial Advisor Trainees. The policies, programs

18 and initiatives implemented as a result of this settlement will attract and benefit African American

19 and Latino Financial Advisors and Registered Financial Advisor Trainees during all phases of their

20 careers at Morgan Stanley. These efforts will result in significantly increasing the number of

21 African American and Latino Financial Advisors Morgan Stanley hires, improving its ability to

22 retain those individuals, and increasing their success at Morgan Stanley, all of which will result in

23 increased earnings and significant value to its African American and Latino popUlation.

24 III. CONCLUSION

25

As demonstrated by the declarations of Dr. Lundquist and Alexa Pappas, the programmatic

26 relief provisions of the settlement agreement is expected to provide millions of dollars of value to

27 the minority FAs. Morgan Stanley respectfully submits that this Court should grant the parties'

28
I'v10RGAt\, LE\VIS & BOCK!US LLP
ATfURN,)" At LAW SAO: FRA1'';(";''-O

joint motion for preliminary approval and provisional certification of the class. 7
SUPP. MEMO ISO OF PRELIMINARY APPROVAL
I·
SF/7653591.1

Case 3:06-cv-03903-TEH Document 141 Filed 01/14/2008 Page 8 of 8

Dated: January 14,2008 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
MORGA"', LEiVl5 & BOCklUS LLP
SF17653591.1

By: /s/1. Julius Ai Turman L Julius M. Turman MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442-1361 Facsimile: (415) 442-10001
Attorneys for Defendant Morgan Stanley & Co. Incorporated

8
I-

SUPP. MEMO ISO OF PRELIMINARY APPROVAL

 
 Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 1 of 60

1 Kelly M. Dermody (SBN 171716) Heather H. Wong (SBN 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 Email: kdermody@lchb.com Email: hwong@lchb.com
6 James M. Finberg (SBN 114850)
7 Eve H. Cervantez (SBN 164709) ALTSHULER BERZON LLP
8 177 Post Street, Suite 300 San Francisco, CA 94108
9 Telephone: (415) 421-7151 Facsimile: (415) 362-8064
10 Email: jfinberg@altshulerberzon.com Email: ecervantez@altshulerberzon.com
11
12 Attorneys for the Plaintiffs

Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423 Telephone: (615) 313-9000 Facsimile: (615) 313-9965 Email: ealexander@lchb.com
Adam T. Klein (pro hac vice) Piper Hoffman (pro hac vice) Justin Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005 Email: atk@outtengolden.com Email: ph@outtengolden.com Email: jms@outtengolden.com

13 UNITED STATES DISTRICT COURT
14

15

NORTHERN DISTRICT OF CALIFORNIA

16

SAN FRANCISCO/OAKLAND DIVISION

17

18 DAISY JAFFE, DENISE WILLIAMS, and
MARGARET BENAY CURTIS-BAUER, 19 on behalf of themselves and all others
similarly situated, 20

21

Plaintiffs,

Case No. C 06-3903 TEH
CLASS ACTION
NOTICE OF FILING OF REVISED SETTLEMENT AGREEMENT

22

v.

23 MORGAN STANLEY & CO.
INCORPORATED, f/k/a MORGAN 24 STANLEY DW, INC.,

25

Defendant.

26

27

28

748839.1

NOTICE OF FILING OF REVISED SETTLEMENT AGREEMENT
Case No. C 06-3903 TEH

Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 2 of 60

1

In accordance with footnote 5 of the Court’s February 7, 2008 Order granting preliminary

2 settlement approval, the parties hereby submit the attached revised Settlement Agreement.

3

4 Dated: February 11, 2008
5
6

Respectfully submitted, LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

7

By:

/s/ Heather H. Wong

8

Heather H. Wong

9

Kelly M. Dermody (State Bar No. 171716)

Heather H. Wong (State Bar No. 238546)

10

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

Embarcadero Center West

11

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

12

Telephone: (415) 956-1000

Facsimile: (415) 956-1008 13

Elizabeth A. Alexander (pro hac vice)

14

LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

150 Fourth Avenue, North, Suite 1650

15

Nashville, TN 37219-2423

Telephone: (615) 313-9000

16

Facsimile: (615) 313-9965

17

Adam T. Klein

Piper Hoffman (pro hac vice)

18

Justin M. Swartz (pro hac vice)

OUTTEN & GOLDEN LLP

19

3 Park Avenue, 29th Floor

New York, New York 10016

20

Telephone: (212) 245-1000

Facsimile: (212) 977-4005 21

James M. Finberg (State Bar No. 114850)

22

ALTSHULER BERZON

177 Post Street, Ste. 300

23

San Francisco, CA 94108

Telephone: (415) 421-7151

24

Facsimile: (415) 362-8064

25

Attorneys for Plaintiffs

26

27

28

748839.1

- 1 -

NOTICE OF FILING OF REVISED SETTLEMENT AGREEMENT
Case No. C 06-3903 TEH

Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 3 of 60

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Daisy Jaffe, Denise Williams, and Margaret

)

Benay Curtis-Bauer, on behalf of themselves )

and all others similarly situated,

)

)

Plaintiffs,

)

)

v.

)

)

Morgan Stanley & Co. Incorporated, formerly )

known as Morgan Stanley DW Inc.,

)

)

Defendant.

)

)

)

)

)

Case No. C-06-3903 (TEH) CLASS ACTION

SETTLEMENT AGREEMENT

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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 4 of 60

TABLE OF CONTENTS

Page

I. INTRODUCTION ....................................................................................................1 II. NATURE AND RESOLUTION OF THE CASE.....................................................1 III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT ..............................5
A. Definitions.........................................................................................5 B. Duration of the Settlement ................................................................8 C. Cooperation.......................................................................................9 D. Persons Covered by this Settlement Agreement ...............................9 IV. COURT APPROVAL/NOTICE AND FAIRNESS HEARING...............................9 A. Jurisdiction and Venue......................................................................9 B. Preliminary Approval......................................................................10 C. Notice and Settlement Hearing .......................................................10 V. RELEASE/BAR OF CLAIMS................................................................................15 A. Class Member Release ................................................................................15 B. Named Plaintiff Release..............................................................................15 VI. NO ADMISSION, NO DETERMINATION..........................................................17 VII. PROGRAMMATIC RELIEF .................................................................................18 A. Communications .............................................................................18 B. Hiring ..............................................................................................18 C. Branch Management/Mobility and Training...................................19 D. Account Distribution.......................................................................21 E. Development Opportunities ............................................................28 F. Complaint Process and Training .....................................................28 G. Appointments ..................................................................................29 H. General Non-Discrimination Provisions .........................................34 VIII. MONETARY RELIEF ...........................................................................................35 A. Settlement Fund ..............................................................................35 B. Administration by Trustee ..............................................................36
-i-

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TABLE OF CONTENTS (continued)

Page

C. Claims Filing Procedures for Settlement of Claims of Named Plaintiff and Class Members ...........................................................36
D. Allocation Formula .........................................................................38 E. Non-Admissibility of Fact of Award (or Non-Award) ...................41 F. Tax Treatment .................................................................................41 G. Morgan Stanley Has No Further Obligation, Liability or
Responsibility..................................................................................44 IX. MONITORING .......................................................................................................45
A. Data Collection ...............................................................................45 B. Monitoring System..........................................................................46 C. Reports ............................................................................................46 D. Meetings..........................................................................................46 X. ENFORCEMENT ...................................................................................................46 A. No Third Parties ..............................................................................46 B. Dispute Resolution..........................................................................47 XI. CONFIDENTIALITY.............................................................................................47 A. Documents and Information Produced by Morgan Stanley
and Class Counsel ...........................................................................47 B. Return or Disposal of Confidential Documents and
Information......................................................................................47 XII. ATTORNEYS’ FEES AND EXPENSES OF CLASS COUNSEL........................49 XIII. GOVERNING LAW...............................................................................................50 XIV. OTHER CONDITIONS OF SETTLEMENT .........................................................50
A. Exhibits ...........................................................................................50 B. Notices to Counsel ..........................................................................50 C. Failure to Insist on Strict Compliance.............................................51 D. Settlement Agreement Binding .......................................................51 E. Modifications to this Agreement.....................................................51
-ii-

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TABLE OF CONTENTS (continued)

Page

F. No Drafting Presumption ................................................................51 G. Dispute As To Meaning of Agreement Terms................................51 H. Interpretation of Terms ...................................................................52 I. Paragraph and Section Headings.....................................................52 J. Counterparts ....................................................................................52 K. Agreement Binding .........................................................................52

-iii-
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 7 of 60
I. INTRODUCTION Subject to approval by the United States District Court for the Northern District of
California (the “Court”), this Settlement Agreement (“Settlement Agreement,” “Settlement” or “Agreement”) sets forth the full and final terms by which Margaret Benay Curtis-Bauer (the “Named Plaintiff”), on behalf of herself and members of the Class defined herein, and Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. (“Morgan Stanley,” “Defendant,” “Firm,” or “Company”)1 have settled and resolved all claims that have been raised in the Second Amended Complaint filed by the Named Plaintiff on August 1, 2007. This Action and Settlement applies to African American and Latino Financial Advisors and Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley (“MS-GWMG”) and its predecessor(s). II. NATURE AND RESOLUTION OF THE CASE
A. After filing an administrative complaint with the United States Equal Employment Opportunity Commission (“EEOC”), Daisy Jaffe filed a Complaint with the Court, on June 22, 2006, on behalf of herself as an individual and on behalf of a nationwide class of women employees against Morgan Stanley, pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq., (“Title VII”), and for a California Class under California state law prohibiting sex discrimination. In addition to these class claims, Ms. Jaffe asserted an individual, non-class age discrimination claim.
1 Following the filing of the Complaint in June 2006, Morgan Stanley DW Inc. merged into Morgan Stanley & Co. Incorporated. The Named Plaintiff and the Class Members all work or worked as Financial Advisors or Registered Financial Advisor 1
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 8 of 60
B. On October 12, 2006, Ms. Jaffe and Denise Williams filed an Amended Complaint against Morgan Stanley adding additional allegations that the Company had discriminated against Ms. Williams on the basis of her race in violation of Title VII, 42 U.S.C. § 1981 and Michigan state law with regard to several aspects of her employment. Ms. Williams also filed an administrative complaint with the EEOC in October of 2006. On December 5, 2006 Ms. Williams received a Notice of Right to Sue from the EEOC.
C. On August 2, 2007, Ms. Jaffe, Ms. Williams and Margaret Benay CurtisBauer filed a Second Amended Complaint in this action, in which Ms. Williams and Ms. Curtis-Bauer collectively alleged, among other things, on behalf of themselves and members of the Class defined herein, that African Americans and Latinos who are or were employed with MS-GWMG as Financial Advisors or Registered Financial Advisor Trainees have been and are afforded fewer business opportunities than comparable white Financial Advisors and Registered Financial Advisor Trainees, and that they experienced race and color discrimination in numerous aspects of their employment. The Named Plaintiff has further alleged, on behalf of herself and members of the Class defined herein, that aspects of her employment in which she has experienced race and color discrimination include, but are not limited to, career advancement, distribution of accounts, work assignments, compensation, and/or other terms and conditions of employment and/or termination.
The class-wide gender discrimination claims of Jaffe and Williams will be addressed in connection with the recently announced settlement of the nationwide Augst-
Trainees in what is now referred to as the Global Wealth Management Group. 2
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 9 of 60
Johnson gender class action in the District of Columbia. Thus, Jaffe and Williams will no longer pursue their gender discrimination claims or seek certification of a class of female Morgan Stanley FAs in this matter.
D. Morgan Stanley denies the allegations in the administrative charges, the Complaint, the Amended Complaint and the Second Amended Complaint, and in connection therewith denies any liability under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §1981 as amended, or any other federal, state or local laws, and specifically denies that Morgan Stanley unlawfully discriminated against Plaintiff or Class Members on the basis of race or color, or that Plaintiff or Class Members are otherwise entitled to the relief requested.
E. This Settlement was reached under the supervision of experienced mediator Hunter Hughes, Esq. Counsel for the parties are experienced class action lawyers who retained Mr. Hughes for his expertise in mediating many complex class actions, including those involving race discrimination in employment. Mr. Hughes also has familiarity with Morgan Stanley’s practices through his work as mediator in the Augst-Johnson action, a related gender discrimination class action against Morgan Stanley. Mr. Hughes conducted multiple mediation sessions between the parties here, both in San Francisco and New York. At all times during this process, counsel bargained vigorously and at arms’ length on behalf of their clients.
F. In order to facilitate settlement discussions, the parties executed tolling agreements and stipulated to court ordered stays of the action for the time period through August 2, 2007, at which point the Second Amended Complaint in this Action was filed.
G. The parties to this Agreement have conducted a thorough examination and 3
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 10 of 60
investigation of the facts and law relating to the subject matters set forth in the Second Amended Complaint and the claims set forth therein. In order to evaluate Settlement positions, Class Counsel requested and Morgan Stanley provided substantial documents (including vast amounts of data) from which Class Counsel conducted expert data analyses. This information, along with witness interviews and information regarding Morgan Stanley’s policies and practices, informed counsel regarding the strengths and weaknesses of their respective positions and provided them a full opportunity to assess the litigation risks presented in this case.
H. Class Counsel and counsel for Morgan Stanley recognize the costs and risks of prosecuting this litigation through class certification, summary judgment, trial, and appeal. Class Counsel believe that it is in the interest of all members of the Settlement Class to resolve finally and completely the potential claims of the Class Members against Morgan Stanley. Class Counsel believe that the terms of the Settlement Agreement are in the best interests of the Class and are fair, reasonable, and adequate. Morgan Stanley wishes to bring the litigation to a conclusion on the terms set forth in this Settlement Agreement.
I. Without any admission or concession by Morgan Stanley of any liability or wrongdoing with respect to the allegations in any administrative charge or in the Complaint, the Amended Complaint and the Second Amended Complaint, all released claims shall be finally and fully compromised, settled, and released subject to the terms and conditions of this Settlement Agreement, which were the subject of negotiation and agreement by the parties.
4
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 11 of 60
III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT A. Definitions. In addition to terms identified and defined elsewhere in this
Settlement Agreement, and as used in this Settlement Agreement, the terms below shall have the following meanings:
1. “Action” means the lawsuit described above and the allegations contained in the Second Amended Complaint filed on August 1, 2007.
2. “Amended Complaint” means the First Amended Complaint filed in this Action on October 12, 2006.
3. “Augst-Johnson Action” or “Augst-Johnson matter” means Joanne Augst-Johnson, et. al. v. Morgan Stanley & Co. Incorporated, Case No. 1:06-CU-01142 (RWR) (D.D.C.).
4. “Claims Administrator” means Settlement Services, Inc. (“SSI”) which has been jointly designated by counsel for the parties to administer the Settlement Fund pursuant to Section VIII below and orders of the Court.
5. “Claim Form” means the form agreed to by the parties and attached to the Notice. The Claim Form must be submitted by eligible Class Members to the Claims Administrator as part of the claims process.
6. “Claimant” means a Class Member who has submitted a timely Claim Form.
7. “Class Counsel” means the law firms of Lieff Cabraser Heimann & Bernstein, LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP.
8. “Class Member” means any person who meets the criteria set forth in the definition of “Settlement Class” below.
5
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 12 of 60
9. “Class Member Release” means the Release and Indemnification Agreement in the form agreed to by counsel for the parties, and attached hereto as Exhibit A, with respect to those Class Members other than Plaintiff Curtis-Bauer, as referenced in Section V.A. hereof.
10. “Complaint” means the Complaint filed in this Action on June 22, 2006.
11. “Court” means the United States District Court for the Northern District of California.
12. “Defendant” or “Morgan Stanley” or “Firm” or “Company” means Morgan Stanley & Co. Incorporated and its predecessors in interest.
13. “Defendant’s Counsel” means the law firm of Morgan, Lewis & Bockius LLP.
14. “Depository Bank” means Citibank or another bank jointly selected by counsel for the parties to receive, hold, invest, and disburse the Settlement Fund, subject to the direction of the Claims Administrator.
15. “Diversity Monitor” means the individual appointed to carry out the duties specified in Section VII.G.1. of this Agreement.
16. “Effective Date” means the date on which all of the following have occurred: (1) the Court has finally approved this Settlement Agreement and has signed and entered an order so indicating; (2) the Court has entered an Order and Judgment dismissing the Action with prejudice, with continuing jurisdiction limited to enforcing this Settlement Agreement; and (3) the time for appeal has either run without an appeal being filed or any appeal (including any requests for rehearing en banc, petitions for certiorari or appellate
6
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 13 of 60
review) has been finally resolved. 17. “Final Approval” means the date on which the United States District
Court grants final approval of the Settlement. 18. “Financial Advisor” means a person employed by MS-GWMG as a
Financial Advisor. 19. “Lead Class Counsel” means Lieff Cabraser Heimann & Bernstein
LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP. 20. “MS-GWMG” means the Global Wealth Management Group of
Morgan Stanley & Co. Incorporated and its predecessor, Morgan Stanley DW Inc. 21. “Named Plaintiff Release” means the General Release and
Indemnification Agreement in the form, attached hereto as Exhibit B, agreed to by counsel for the parties with respect to Plaintiff Curtis-Bauer as referenced in Section V.B.
22. “Notice” means the Notice of Class Action, Proposed Settlement Agreement, and Settlement Hearing, which is to be mailed directly to Class Members, substantially in the form attached hereto as Exhibit C.
23. “Notice of Award” means the letter sent to each eligible Claimant specifying the amount of that Claimant’s award, as determined by the Special Master.
24. “Plaintiff” or “Named Plaintiff” means Margaret Benay CurtisBauer named in the caption of the Second Amended Complaint.
25. “Preliminary Approval” means the Order of the Court preliminarily certifying the Settlement Class and preliminarily approving this Settlement Agreement and the form of Notice to be sent to Class Members.
26. “Registered Financial Advisor Trainee” means a person employed 7
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 14 of 60
by MS-GWMG as a registered financial advisor trainee who has not yet become a Financial Advisor.
27. “Second Amended Complaint” means the Second Amended Complaint filed in this Action on August 1, 2007.
28. “Settlement,” “Agreement,” and “Settlement Agreement” each mean the settlement as reflected in this Settlement Agreement.
29. “Settlement Class” or “Class” means the class that the parties jointly seek to have certified, solely for the purposes of this Settlement Agreement, which is defined as all African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in MS-GWMG or its predecessor at any time between October 12, 2002 and the date of preliminary approval.
30. “Settlement Fund” or “Fund” means the settlement monies transferred by Morgan Stanley to the Depository Bank, pursuant to this Settlement Agreement, including all interest earned thereon, to be held, invested, administered, and disbursed pursuant to this Settlement Agreement.
31. “Settlement Hearing” means the hearing at which the Court will consider final approval of this Settlement Agreement and related matters.
32. “Special Master” means the individual jointly selected by counsel for the parties, and approved by the Court, who is charged with carrying out the Special Master duties set forth in Section VIII of this Agreement.
B. Duration of the Settlement. The programmatic relief embodied in this Settlement Agreement and the agreements incorporated in it shall remain binding on the parties and their agents and successors for a five-year period following the Effective Date.
8
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 15 of 60
C. Cooperation. The parties agree that they will cooperate to effectuate and implement all terms and conditions of this Settlement Agreement, and exercise good faith efforts to accomplish the terms and conditions of this Settlement Agreement. The parties agree to accept non-material and procedural changes to this Settlement Agreement if so required by the Court in connection with Final Approval of the Settlement, but are not obligated to accept any changes in the monetary amount of relief or the substantive programmatic relief provided for herein, or any other substantive change.
D. Persons Covered by this Settlement Agreement 1. Definition of “Settlement Class,” “Class” or “Class Members.”
Solely for purposes of Settlement and judicial approval of this Settlement Agreement, the parties stipulate to the certification of the following Settlement Class:
All African Americans and Latinos who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between October 12, 2002 and the date of preliminary approval. 2. Certification. The Class will be certified pursuant to Fed. R. Civ. P. 23(b)(2) and 23(b)(3). IV. COURT APPROVAL/NOTICE AND FAIRNESS HEARING A. Jurisdiction and Venue 1. The parties agree that the Court has jurisdiction over the parties and the subject matter of this Action and that venue is proper. The Court shall retain jurisdiction of this Action for five years from the Effective Date of the Settlement Agreement solely for the purpose of entering all orders and judgments authorized
9
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 16 of 60
hereunder that may be necessary to implement and enforce the relief provided herein. B Preliminary Approval 1. Prior to execution of this Settlement Agreement, the parties have
agreed upon a form for written Notice of this Settlement Agreement to Class Members, subject to Court approval.
2. Within forty-five (45) days after the execution of this Settlement Agreement, the parties shall petition the Court for the following orders:
(a) preliminarily certifying the Settlement Class; preliminarily approving this Settlement Agreement; approving the Notice to be sent to Class Members describing the terms of the Settlement and informing them of their rights to submit objections and to opt out; and
(b) Pending Final Approval, preliminarily enjoining each member of the Settlement Class, including any members who make an irrevocable election to exclude themselves from the monetary relief provisions of the Settlement, from commencing, prosecuting or maintaining in any court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of the Court in connection with this Settlement Agreement. Effective as of the date specified for class members to opt out of the settlement, further enjoining any member of the Settlement Class who has not made an irrevocable election to exclude themself from the monetary relief provisions of the Settlement from commencing, prosecuting or maintaining either directly, representatively or in any other capacity any claim that is subsumed within the Settlement Agreement.
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1. MS-GWMG shall identify all Class Members and will provide to the Claims Administrator, within ten (10) days after Preliminary Approval of this Settlement Agreement, the name, social security number, and last known address of each Class Member. MS-GWMG will ask each Class Member who is a current employee of MSGWMG via electronic mail to confirm that the Firm has their current home address. The Claims Administrator shall utilize Class Members’ social security numbers only for the purpose of locating and identifying Class Members and shall keep those social security numbers confidential.
2. Within twenty (20) days after Preliminary Approval of the Settlement Agreement, the Claims Administrator will mail the Notice to each Class Member in the form agreed upon by the parties or such other form as approved by the Court. The parties intend to provide actual notice to each Class Member, to the extent practicable. The Claims Administrator shall mail a Claim Form to each Class Member at the same time the Notice is sent.
3. The Claims Administrator shall provide to Lead Class Counsel a list of those Class Members who have not been located and the Claims Administrator may engage third party vendors in order to locate Class Members. The Claims Administrator will maintain a log of its activities undertaken pursuant to this section.
4. Class Member objections to this Settlement Agreement must be submitted in writing, and must include a detailed description of the basis of the objection. Objections must be filed with the Court, with copies served on Lead Class Counsel and counsel for Morgan Stanley, within forty-five (45) days after the Notice is mailed to Class Members. No one may appear at the Settlement Hearing for the purpose of objecting to
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the Settlement Agreement without first having filed and served his or her objection(s) in writing within forty-five (45) days after the Notice was mailed to Class Members.
5. Any Class Member who wishes to opt out of the Settlement Class must mail to Lead Class Counsel and counsel for Morgan Stanley a written, signed statement that she or he is opting out, as set forth below. Lead Class Counsel shall file with the Court all opt-out statements that are timely received. The Settlement Class will not include those individuals who file and serve a timely opt-out statement, and individuals who opt out are not entitled to any monetary award under this Settlement Agreement. With respect to each such individual, the statute of limitations for them to assert any claims for individual relief will resume running on the postmark date when he or she mails his or her signed, written statement that he or she is opting out of the Settlement Class. The Notice mentioned above shall include the following language: “Any Class Member who wishes to opt out of the Settlement Class must mail a written, signed statement that he or she is opting out of the Settlement Class to Lead Class Counsel and counsel for Morgan Stanley at the addresses as listed in the Notice. To be effective, this opt-out statement must be received by Lead Class Counsel and counsel for Morgan Stanley on or before forty-five (45) days after the Notice is to be mailed to Class Members. To be effective, the opt-out letter and statement must include the language specified in the Notice confirming that the individual is aware that by opting out he or she will forego the opportunity to receive monetary benefits from this Settlement. Class Members who file opt-outs may rescind their opt-outs. To be effective, such rescissions must be in writing and must be received by either Lead Class Counsel, counsel for Morgan Stanley, or the Claims Administrator on or before sixty (60) days from the date that the Notice is to be mailed to the class.
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6. Upon Preliminary Approval, a briefing schedule and Settlement Hearing date will be set at the Court’s convenience. The parties’ Motion for Final Approval and for Certification of the Settlement Class will be due no earlier than thirty (30) days following the close of the objection and opt-out period, and the Settlement Hearing will be held no earlier than forty-five (45) days following the close of the objection and opt-out period.
7. The time periods referenced in this Section IV.C. are guidelines; actual dates will be inserted in the Preliminary Approval Order by the Court.
8. In the event that this Settlement Agreement does not become final and binding, no party shall be deemed to have waived any claims, objections, rights or defenses, or legal arguments or positions, including, but not limited to, claims or objections to class certification, and claims and defenses on the merits. Neither this Settlement Agreement nor the Court’s Preliminary or Final Approval hereof shall be admissible in any court regarding the propriety of class certification or regarding any other issue or subject (except for the purpose of enforcing this Settlement Agreement). Each party reserves the right to prosecute or defend this Action in the event that the Settlement Agreement does not become final and binding.
9. If the number of Class Members who have duly requested exclusion from the Settlement Class in the manner provided in the Court’s Preliminary Approval Order equals or exceeds the numbers set forth in Appendix 1 filed with the Court under seal concurrently with this Settlement Agreement, Morgan Stanley shall have the right, for thirty (30) days after the deadline for Class Members to opt out, to either withdraw from and fully terminate this Settlement Agreement by providing written notice to Class
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Counsel and the Court, or not to withdraw from this Settlement Agreement and take the opt out credit described below. Failure to provide written notice to withdraw within the aforesaid thirty (30) day period constitutes a waiver and termination of Morgan Stanley’s right to withdraw pursuant to this paragraph. The opt out credit to which Morgan Stanley is entitled shall be a pro rata share of the Settlement Fund based on the number of Class Members who have opted out in relation to the total number of Class Members. Regardless of the number of Class Members who opt out, Morgan Stanley shall also have no obligation to pay the employer’s share of taxes and contributions pertaining to such opt outs, as discussed in Section VIII.F.2 of this Settlement Agreement.
10. If Morgan Stanley exercises its option to withdraw from the Settlement or if this Settlement Agreement is not approved by the Court or for any other reason is terminated or fails to become effective in accordance with its terms (or, if following approval by this Court, such approval is reversed or substantively modified), the parties shall be restored to their respective positions that existed in this Action prior to entering into this Settlement Agreement; the terms and provisions of this Settlement Agreement shall have no force or effect and shall not be used in this Action or in any proceeding for any purpose; the Settlement Fund shall be returned to Morgan Stanley, including the interest earned by the Settlement Fund through the date of termination (after deducting all costs and expenses, including costs of providing Notice to Class Members, paid or incurred by the Claims Administrator as of the date of termination); any Judgment entered by the Court in accordance with the terms of this Settlement Agreement shall be treated as vacated, nunc pro tunc; and the litigation of the Action will resume as if there had been no Settlement Agreement, with no stipulated Class. The parties retain all rights,
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claims, and defenses as to class certification and otherwise as to any of the allegations asserted in this Action. This Settlement Agreement will not be considered an admission of liability by Morgan Stanley nor represent a cap on damages available to the Named Plaintiff or the Class. V. RELEASE/BAR OF CLAIMS
A. Class Member Release. All Class Members, other than the Named Plaintiff, as a condition of receiving a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator a Class Member Release in the form agreed to by counsel for the parties and attached hereto as Exhibit A. The Class Members, excluding the Named Plaintiff, will release all claims, known and unknown, existing through the date of preliminary approval, under any federal, state or local legal theory, for race and/or color discrimination based on allegations in the Second Amended Complaint, including facts or circumstances relating to compensation, production, account distribution, team or partnership formation, allocation of support or business opportunities or other allegations in the Second Amended Complaint. Termination and advancement into management claims for race and/or color discrimination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions-inforce, other production based performance related terminations and any claims for constructive discharge based on the same set of facts or circumstances shall be released but any other termination, advancement into management, constructive discharge or harassment claims shall not.
B. Named Plaintiff Release. The Named Plaintiff, as a condition of receiving 15
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a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator the Named Plaintiff Release in the form agreed to by counsel for the parties and attached hereto as Exhibit B. The Named Plaintiff Release is not a limited release of claims of race or color discrimination but instead releases all claims of any nature against Morgan Stanley under federal, state and local laws for any period up through the date of Preliminary Approval.
C. The Claims Administrator shall provide all Class Members with the Class Member Release at the time the Notice of Award is provided to them.
D. The terms of the Releases, attached hereto as Exhibits A and B, are a material part of this Settlement Agreement and are hereby incorporated as if fully set forth in the Settlement Agreement; if these Releases, attached hereto as Exhibits A and B, are not finally approved by the Court, or the Settlement Agreement cannot become effective for any reason and the Settlement set forth in this Settlement Agreement shall terminate as provided in Sections IV.C.8 and 10 of this Settlement Agreement, then the Named Plaintiff Releases and Class Member Releases shall terminate nunc pro tunc and be of no force and effect.
E. In the event that any Class Member does not execute and timely deliver a Class Member Release, or if any Named Plaintiff does not execute and timely deliver the Named Plaintiff Release, he or she shall be ineligible for, and forever barred from receiving, monetary relief under this Settlement Agreement, even if said Class Member or Named Plaintiff has not opted out.
F. Class Members who neither timely opt out nor timely file a Claim Form shall, upon the Effective Date, be ineligible to receive any monetary award pursuant to this
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Settlement Agreement and be deemed to have fully, finally and irrevocably waived, released and discharged Morgan Stanley from any and all claims of race discrimination, to the same extent as specified in Section V.A. above, whether known or unknown, actual or potential, from October 12, 2002 to the date of Preliminary Approval. VI. NO ADMISSION, NO DETERMINATION
A. This Settlement Agreement does not, and is not intended to constitute, nor shall it be deemed to constitute, an admission by any party as to the merits, validity or accuracy of any of the allegations, claims or defenses of any party in this case. The Class Members continue to assert the merits and validity of their claims under Title VII, 42 U.S.C. § 1981 or parallel state and local laws prohibiting race discrimination. By entering into this Agreement, Morgan Stanley does not admit or concede, expressly or impliedly, but denies that it has in any way violated Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Neither the Court nor any other court has made any findings or expressed any opinion concerning the merits, validity or accuracy of any of the allegations, claims or defenses in this case.
B. Nothing in this Settlement Agreement, nor any action taken in implementation thereof, nor any statements, discussions or communications, nor any materials prepared, exchanged, issued or used during the course of the mediation or negotiations leading to this Settlement Agreement, is intended by the parties to, nor shall any of the foregoing constitute, be introduced, be used or be admissible in any way in this case or any other judicial, arbitral, administrative, investigative or other proceeding of
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whatsoever kind or nature (including, without limitation, the results of the Claims Process established under this Settlement Agreement) as evidence of discrimination, retaliation or racial harassment or as evidence of any violation of Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Notwithstanding the foregoing, this Settlement Agreement may be used in any proceeding in the Court or in mediation or arbitration to enforce or implement any provision of this Settlement Agreement or implement any orders or judgments of the Court entered into in connection herewith. VII. PROGRAMMATIC RELIEF
A. Communications. MS-GWMG shall distribute its Non-Discrimination and Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and then on an annual basis via email from Morgan Stanley's CEO. Employees shall be required to submit an acknowledgment of receipt.
In addition, the President and COO of MS-GWMG shall issue a separate statement in support of the Policy and its underlying tenets. The Policy will be available on the Firm’s intranet site and will be incorporated into various other Firm policies including its Code of Conduct and its Internet and Electronic Communications Usage Policy.
The Non-Discrimination and Anti-Harassment Policy itself and the behaviors it seeks to promote and prevent shall be the subject of a mandatory training that all employees will be required to complete upon hire.
B. Hiring: MS-GWMG agrees to maintain its commitment to increase diversity in the Financial Advisor position including the representation rate of Latino and
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African American Financial Advisors. MS-GWMG agrees to maintain a dedicated position within MS-GWMG whose primary function is the sourcing and recruitment of qualified diverse candidates, including qualified Latinos and African Americans. MSGWMG further agrees to work with the Industrial Psychologists to identify and develop sourcing alternatives for qualified Latino and African American Financial Advisors, including but not limited to, developing relationships with organizations and educational institutions with high representation rates of Latinos and African Americans and historical connections with those communities. MS-GWMG agrees to continue to source qualified diverse candidates for its various entry level positions including the Summer Internship Program, the Richard B. Fischer Scholarship Program and/or successor or similar programs. Furthermore, MS-GWMG agrees to inform any third-party recruiter or executive search firm which it utilizes in its sourcing efforts that MS-GWMG expects that the vendor will present a diverse slate of candidates, where possible.
C. Branch Management/Mobility and Training. All available field sales management positions will be posted on MS-GWMG’s Internal Job Bank. These positions currently are titled: Branch Manager; Financial Advisor in Charge; Sales Manager; and Assistant Branch Manager. Minimum requirements for qualification for a management position are available on MS-GWMG’s internal job bank. All positions will be posted for a minimum of five (5) business days. Either the hiring manager or Human Resources will follow up with each applicant/candidate in a timely manner. In addition, MS-GWMG shall develop and implement a computerized system to generate an electronic mail notification to Financial Advisors who request to be informed of new management job postings.
MS-GWMG’s Learning and Development department has developed and 19
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implemented a comprehensive management assessment and development program. The program will provide candidates with a formal and transparent path to assessment and selection as branch managers, and provide field management with an established and tested protocol for selection of high-potential candidates by trained assessors.
MS-GWMG shall provide all management-level field personnel with diversity training no less than every other year. The format of such training may vary from jurisdiction to jurisdiction depending on the relevant legal requirements. However, all managers shall, at a minimum, be required to complete an interactive, customized, elearning training program. The positions to be trained are: Division Directors, Associate Division Directors, District Managers, Non-Producing and Producing Branch Managers, Financial Advisors in Charge, Risk Managers, Assistant Branch Managers, Sales Managers, and Service Managers.
In addition, Morgan Stanley agrees to provide diversity related training to field sales branch management which incorporates elements of the Implicit Association Test or similar tool agreed upon by the parties.
Morgan Stanley’s Learning and Development Department will make available additional study materials and resources to assist the Financial Advisor Trainees in obtaining the Series 7 registration.
Branch Manager compensation shall have a meaningful diversity component designed to measure and reward efforts at diversifying representation rates in the Financial Advisor position including the recruiting, training, and retaining qualified African American and Latino Financial Advisors. MS-GWMG agrees that it shall develop and implement a process whereby field sales management shall be required to report on their
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best efforts and results in the areas of sourcing, recruiting, mentoring, training, and

promoting a diverse workforce, including qualified African American and Latino Financial

Advisors and Registered Financial Advisor Trainees, and whereby field sales management

will be reviewed and held accountable by senior MS-GWMG management for these

efforts. The Diversity Monitor will review the diversity-related quarterly self-assessment

process for field sales management and the diversity component of the branch manager

compensation process.

D. Account Distribution

1.

Since 2002, MS-GWMG has utilized a “Power Ranking” system to

rank Financial Advisors on performance factors to determine the distribution of the

accounts of departing Financial Advisors. Under this Settlement, MS-GWMG has agreed

to make significant changes to the Power Ranking system, including reducing reliance on

historical factors and more heavily weighting criteria which reflect recent performance.

MS-GWMG has also agreed to automate the account distribution process based on the

revised Power Rankings and to limit the exceptions that can be made to the Power

Rankings. The revised Power Ranking factors are set forth in Appendix 2 filed under seal

along with this Settlement Agreement.

2.

Power Rankings

a. All Power Ranking factors that measure performance from

the previous twelve-month period will be adjusted to encompass a 12 month period

exclusive of absence for parental leave or short-term disability leave. For example, if a

Financial Advisor was on a leave of absence for four of the preceding 12 months, the

previous 12 months measure will instead count the last 12 months that the employee was 21

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active. b. The methodology for calculating the Power Rankings will be
provided to each Financial Advisor, including the name of each factor, an explanation of each factor, and how each factor is weighted. Upon hire, each Financial Advisor will be individually provided with the methodology of the objective measures utilized in the Power Ranking calculation and the manner in which calculations are completed and this will be available to all Financial Advisors electronically. MS-GWMG agrees to provide notice to Financial Advisors regarding any modification to the Power Ranking methodology.
c. MS-GWMG shall inform each Financial Advisor of his or her individual ranking at the time any distribution is made. The actual distribution of a departing Financial Advisor’s book will be made available to a Financial Advisor in the Branch confidentially upon request, and such communication shall include the rankings and (without identification of any particular Financial Advisor by name) the number of accounts and the assets distributed to each ranked Financial Advisor.
d. Review of Account Distributions. After a full calendar year has passed following implementation of these new Power Ranking criteria, the Industrial Psychologists to be appointed as set forth in Section VII.G.2 below will review how the process has been operating, including all exceptions and complaints. In addition, the Industrial Psychologists will also review annually the actual account distributions and related compensation data and the rankings of African American and Latino Financial Advisors on each of the individual factors and use such information in considering recommendations, if any, for changes to the Power Ranking formula. On an annual basis,
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the Industrial Psychologists shall report their findings and recommendations, if any, to the

Diversity Monitor. Lead Class Counsel and counsel for Morgan Stanley will reconvene to

discuss the findings of the Industrial Psychologists and whether further appropriate

changes to the Power Ranking criteria or distribution process should be made. The parties

recognize that the Power Ranking system is subject to the Settlement Agreement in both

this case and the Augst-Johnson case pending in the United States District Court for the

District of Columbia and that any material changes must be effectuated by mutual

agreement among all parties. Notwithstanding this requirement, Morgan Stanley may

petition the Courts for permission to modify the system if Lead Counsel in both cases do

not agree to a proposed modification.

3.

Account Distribution Policies

a. MS-GWMG senior management will issue a comprehensive

account distribution policy statement, which shall include policies covering the distribution

of the accounts of departing Financial Advisors, retiring Financial Advisors, departing

partners, and leads, call-ins, and walk-ins. The statement shall be issued via email to all

field employees and shall be posted on MS-GWMG’s intranet site and shall include a

prohibition on discrimination. In addition, MS-GWMG will train all current Branch

Managers on account distribution policies and procedures at the time the settlement

becomes effective, and will similarly train all new managers that are subsequently hired.

b. Financial Advisors are not eligible for account distributions

if they are: (1) currently on “heightened supervision” consistent with industry standards;

(2) subject to any regulatory action reportable as a ‘yes’ answer on Form U-4 questions

14C-G; (3) subject to discipline reported on Form RE-3 in the last 12 months; or (4) 23

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subject to any written performance or workplace conduct warning in the last 90 days. Lateral recruits to MS-GWMG will be ineligible for account distributions during their first 12 months of employment with MS-GWMG. New hire Financial Advisor Trainees are ineligible until they have successfully satisfied the preliminary production thresholds established under the Training Program. Financial Advisors who are on parental or shortterm disability leave at the time an account distribution is made will participate as if they were not on leave, and the distributed accounts will be handled in the same manner as their other accounts are handled while on leave.
c. Where an exception is made to the Power Ranking process because of client choice (which choice cannot be based on race or color) or business exigency (such as client service needs) each individual exception shall be approved by the Complex or District Manager or his/her designee in writing, including the legitimate business reasons for the exception. Records of all such exceptions shall be kept for purposes of monitoring policy compliance. In addition, except for a lateral recruit who receives a distribution in his or her first 12 months of employment because of business exigencies including staffing or qualifications issues not satisfied by other eligible Financial Advisors in the Branch, the Financial Advisor receiving a distribution through an exception will be disqualified from receiving other distributions of approximately equal asset value in the same or subsequent distributions. An individual Financial Advisor who does not receive a specific distribution as a result of an exception shall receive additional accounts in the same or subsequent distributions of approximately equal asset value.
d. MS-GWMG shall enhance its technology to allow its account distribution process to be computer automated, subject to branch manager review
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to ensure compliance with regulatory requirements. Account distributions will be made

through this automated process, subject to exceptions described in Section VII.D.3.c.

above. The results of all account distributions shall be stored and readily retrievable for

monitoring to ensure compliance with account distribution policies.

4.

Retiring Financial Advisors

a. The book of business formerly serviced by the retiring

Financial Advisor will be distributed through the Power Ranking system set forth in

Sections VII.D.1. and VII.D.2. above unless a Joint Production Arrangement/Agreement

(JPA) has been in effect for twenty-four (24) months or longer at the time of retirement.

b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the receipt of retiring

Financial Advisor’s books of business. These recommendations shall be made in

accordance with Section VII.G.2. below.

5.

Partnerships

a. Unless a JPA has been in effect for twenty-four (24) months

or longer at the time of departure, the book of business formerly serviced by the departing

Financial Advisor will be distributed through the Power Ranking system.

b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the partnerships. These

recommendations shall be made in accordance with Section VII.G.2. below.

c.

For purposes of a Financial Advisor’s Power Rankings, MS-

GWMG will count partnership assets under management based on the percentage of the

commission split specified in the partnership agreement. 25

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6.

Leads, Call-ins, and Walk-ins

a. Each Branch Office shall implement a “Financial Advisor of

the Day” program. Pursuant to this program, all client prospects who either walk in or

telephone the branch and who are seeking a Financial Advisor shall be directed to the

Financial Advisor serving as the Financial Advisor of the Day. The daily assignments shall

be made alphabetically and announced on a monthly basis on or before the last day of the

preceding month. The monthly roster shall be openly posted in a conspicuous location

within the branch where all other Firm policies are posted. Participation among eligible

Financial Advisors shall be voluntary each month.

b. Each Financial Advisor of the Day shall complete a

“Financial Advisor of the Day Activity Log” that will detail all telephone calls and walk-in

prospects fielded by the Financial Advisor and the disposition of each. The logs shall be

maintained in a Branch Financial Advisor of the Day file for a three-year period.

c. If a prospect insists on speaking to the Branch Manager, the

Branch Manager will direct the individual to the Financial Advisor of the Day. If the

Financial Advisor of the Day is not qualified to handle the prospect’s account, the Branch

Manager shall ask the prospective client to interview a diverse slate of Financial Advisors,

to the extent available.

d. If the branch manager determines that the Financial Advisor

of the Day is not qualified to handle a walk-in prospect, the branch manager shall complete

an exception report detailing the reason why the Financial Advisor of the Day was not

selected.

e. All Financial Advisors and Registered Financial Advisor 26

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Trainees who have successfully satisfied the preliminary production thresholds established

under the Training Program shall be eligible to participate.

f. Unauthorized failure to perform Financial Advisor of the

Day obligations as designated shall render a Financial Advisor ineligible to participate in

the Program for a period of six (6) months. The branch shall maintain a list of those

Financial Advisors who elected not to participate or who otherwise were ineligible.

7.

Distribution Upon Transfer to Non-Producing Manager

Where no JPA has been in existence for at least 24 months at the time of transfer,

the book of business serviced by a producing manager who is transferred to a non-

producing branch manager position or a Financial Advisor who moves to a non-producing

sales manager position will be distributed through the Power Ranking system as set forth

in Sections VII.D.1-5. above.

8.

Disputes Concerning Account Distributions

The parties agree that if at any time during the term of this Settlement Agreement a

dispute shall arise between MS-GWMG and a Financial Advisor or a Registered Financial

Advisor Trainee concerning any account distribution, such dispute shall initially go

through the MS-GWMG’s internal complaint process which includes access to mediation

under MS-GWG’s alternative dispute resolution mechanism (“CARE”). As to claims

arising out of MS-GWMG, MS-GWMG agree to continue the existing tolling provisions

under the CARE program guidelines for the duration of this Agreement. However, nothing

herein shall prevent any Class Member or Named Plaintiff from individually pursuing any

legal claim not released under this Settlement through any applicable governmental agency

or court of law if he or she is otherwise entitled to do so. 27

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E. Development Opportunities. MS-GWMG shall work with the jointly appointed Industrial Psychologists to develop workplace initiatives designed to attract African Americans and Latinos to MS-GWMG as Financial Advisors, and to retain them and enhance their success, including targeted mentoring and training. Training and mentoring may include but is not limited to training conference calls, online courses, and in person seminars. The Industrial Psychologists shall make recommendations for increasing participation of African American and Latino Financial Advisors and Registered Financial Advisor Trainees in development opportunities. These recommendations will be made in accordance with Section VII.G.2. below.
MS-GWMG additionally agrees to conduct exit interviews of Financial Advisors and Registered Financial Advisor Trainees who terminate voluntarily in order to gain a better understanding as to the reason for the departures. MS-GWMG shall report the results of the exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees annually to the Industrial Psychologists, the Diversity Monitor and individuals within MS-GWMG responsible for hiring Financial Advisors and Registered Financial Advisor Trainees.
MS-GWMG agrees to maintain its commitment to the biannual Minority Business Exchange.
F. Complaint Process and Training. The complaint process, including MSGWMG’s prohibition against retaliation, as provided in the Non-Discrimination and AntiHarassment Policy, shall be communicated in writing to all Financial Advisors and Financial Advisor Trainees upon hire, and annually to all Financial Advisors. New hires shall be required to submit an acknowledgment of receipt of this communication.
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MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding compliance with state, federal, and local EEO laws; MS-GWMG’s anti-discrimination and harassment policies; and this Settlement Agreement.
MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding best practices for complaint investigation and resolution. Human Resources will be trained to treat all complaints or inquiries as confidentially as legally possible and to carry out their duties in a manner consistent with the law. In addition, Human Resources will implement controls designed to ensure that only non-complaining employees or managers with a need-to-know will be advised of a complaint or investigation. In all instances, upon being informed of a complaint or investigation, the non-complaining employees and managers so informed will be reminded of MS-GWMG’s policy against retaliation.
MS-GWMG will retain documents sufficient to show complaints by African American and Latino Financial Advisors and Registered Financial Advisor Trainees of race or color discrimination, race or color bias, and/or retaliation related to such complaints for the term of the Settlement Agreement.
G. Appointments. 1. Diversity Monitor. The parties shall jointly appoint a Diversity
Monitor, and have mutually agreed to the appointment of Fred W. Alvarez, Esq. The Diversity Monitor shall be external to and independent of the MS-GWMG, but will report directly to the COO and President of MS-GWMG. She or he shall monitor MS-GWMG’s efforts to carry out the terms of the Settlement Agreement. This shall include the
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following: a. The Diversity Monitor will receive monthly reports
regarding complaints of Financial Advisors and Registered Financial Advisor Trainees alleging race discrimination and resolution of investigations of such complaints through the CARE program or otherwise.
b. The Diversity Monitor will review quarterly reports regarding the branches in which Branch Managers have filed exception reports reflecting a deviation from the account distribution process.
c. The Diversity Monitor will review account distribution data, exception reports, and complaints to monitor policy compliance. If the Diversity Monitor identifies issues of potential non-compliance, the Diversity Monitor will inform MSGWMG and Lead Class Counsel. After consultation with Lead Class Counsel, MSGWMG will take appropriate corrective actions to address instances of non-compliance. MS-GWMG shall inform the Diversity Monitor and Lead Class Counsel of any such corrective action taken. Where potential non-compliance has been identified, the Diversity Monitor shall have the right to audit the activities in a branch, by reviewing documents, asking branch management to provide explanations and, if necessary, speaking to Financial Advisors in the branch. Nothing herein shall alter or restrict Lead Class Counsel’s right to enforce this Settlement Agreement under the Dispute Resolution provisions of this Settlement Agreement.
d. The Diversity Monitor will review the diversity-related quarterly self-assessment process for field sales management and the diversity component of the branch manager compensation process.
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e. The Diversity Monitor will monitor bi-annual training of management on EEO policies, and policies against discrimination and retaliation, and ensure that the training agreed to was implemented.
f. The Diversity Monitor will review how Human Resources handles investigations and the resolution process for inquiries and complaints.
g. The Diversity Monitor will review the annual results of the exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees.
h. The Diversity Monitor will provide reports to Lead Class Counsel and MS-GWMG at least semi-annually regarding the items monitored, including the analysis of the account distribution system. The Diversity Monitor shall report any incidents of potential material non-compliance with this Settlement Agreement to Lead Class Counsel and MS-GWMG and may do so on a more frequent basis than semiannually.
i. The Diversity Monitor will maintain records for the term of this Settlement Agreement.
2. Industrial Psychologists a. The parties shall jointly appoint Industrial Psychologists
Dr. Kathleen Lundquist and Dr. Irwin Goldstein, who shall work with MS-GWMG and Class Counsel to develop innovative, meaningful, novel, state of the art programs, conduct a job analysis of the Financial Advisor position and make recommendations:
• Concerning sourcing and recruitment strategies and programs to improve the representation rates of African Americans and Latinos in 31
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the Financial Advisor and Registered Financial Advisor Trainee positions; • For increasing the Series 7 passage rates of African American and Latino Financial Advisor Trainees. • For increasing the production and earnings of African American and Latino Financial Advisors, including policies and practices with respect to training, development, and mentoring; • For increasing participation of African American and Latino Financial Advisors in the receipt of retiring Financial Advisors’ books of business; • For increasing participation of African American and Latino Financial Advisors in partnerships; • Concerning policies and practices with respect to training, development, and mentoring, that will enhance opportunities for African American and Latino Financial Advisors and Financial Advisor Trainees. Training and development may include but is not limited to training conference calls, online courses, and in-person seminars; • Concerning a mentoring program for all Registered Financial Advisor Trainees and Financial Advisors; and • Concerning a system of semi-annual internal data collection and a monitoring process.
b. The Industrial Psychologists shall monitor the actual
implementation of the programs, policies and initiatives which MS-GWMG is obligated to
undertake by virtue of this Agreement and shall, on an annual basis, report MS-GWMG’s
process to the Diversity Monitor. In addition, the Industrial Psychologists shall monitor on
an annual basis the increase in the representation rates of African Americans and Latinos in
the Registered Financial Advisor Trainee and Financial Advisor positions and shall report
MS-GWMG’s progress to the Diversity Monitor. MS-GWMG shall report to the Diversity
Monitor on an annual basis the efforts made to recruit African American and Latino 32
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candidates to the Registered Financial Advisor Trainee and Financial Advisor positions including its sourcing and recruiting strategies, including but not limited to, targeted marketing and recruiting efforts, relationship/networking building with diverse organizations and schools, diversity career nights, internships and other sponsorships and scholarship programs.
c. The Industrial Psychologists shall present such recommendations to a senior executive panel of MS-GWMG consisting of: the Senior Learning & Development officer; the Senior Diversity officer; the Senior Employment Attorney; the Senior Human Resources officer; and a representative from National Sales Management. A copy of the recommendations will also be provided to Lead Class Counsel. If MS-GWMG does not agree with the recommendations, but Lead Class Counsel still thinks they should be implemented notwithstanding MS-GWMG’s objections, the Industrial Psychologists, along with Lead Class Counsel, will have the opportunity to present the recommendations to the COO and President of MS-GWMG or the then Head of National Sales for MS-GWMG. All recommendations of the Industrial Psychologists will be designed to advance the purposes of this Settlement Agreement consistent with MS-GWMG s business needs and objectives.
d. The Industrial Psychologists shall provide the Diversity Monitor with their findings of deviations from the account distribution system.
e. Subject to signing an appropriate confidentiality agreement, and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists described in Sections VII.G.1. and VII.G.2. above will have reasonable access to relevant documents, data, and MS-GWMG employees. The Diversity Monitor
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and the Industrial Psychologists will be compensated by MS-GWMG. 3. If it becomes necessary to replace the Diversity Monitor or either
Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement. H. General Non-Discrimination Provisions. Pursuant to MS-GWMG’s Non-
Discrimination and Anti-Harassment Policy, African American and Latino Financial Advisors and Registered Financial Advisor Trainees will enjoy terms and conditions of employment comparable to their white counterparts.
MS-GWMG shall assert the following general policies using a method agreed to by the parties:
1. Prohibition against discrimination on the basis of race or color in hiring, compensation and business opportunity allocations.
2. Prohibition against retaliation for reporting race or color discrimination, participating in the CARE program, participating in this or any discrimination settlement, filing a lawsuit or complaint with any outside agency or entity alleging race discrimination, or for refusing to participate in race discrimination.
3. The parties agree that it shall be a violation of this Settlement Agreement for a Morgan Stanley supervisor to retaliate against any Class Member for his or her participation in the prosecution of the allegations contained in the charge underlying this Settlement or in the Settlement itself. However, nothing in this Settlement will prevent a Class Member from pursuing whatever legal rights or remedies he or she otherwise may have with respect to any individual claim not covered by the claims released through this Settlement.
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VIII. MONETARY RELIEF A. Settlement Fund. No later than ten (10) days after the Effective Date
Morgan Stanley shall pay by wire transfer to the Depository Bank the sum of Sixteen Million Dollars ($16,000,000) plus an amount equal to 5% (per annum) on that $16,000,000, calculated from the date of Preliminary Approval until the money is transferred (“Settlement Sum”). The Total Settlement Sum will be placed in an interestbearing account titled in the name of MS-GWMG Financial Advisor Race discrimination Settlement Fund, a Qualified Settlement Fund organized and existing under the laws of the State of Florida, intended by the parties to be a “Qualified Settlement Fund” as described in Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-1, et seq. This payment is made in order to satisfy the claims of the Named Plaintiff and Class Members, as well as for other purposes identified in this paragraph. The monies so transferred, together with interest subsequently earned thereon, shall constitute the Settlement Fund. The Settlement Sum transferred into the Settlement Fund by Morgan Stanley shall, with the additional Employer Payroll Tax Payment described below, constitute the total Settlement cash outlay by Morgan Stanley in connection with: (1) the resolution of this matter; (2) this Settlement Agreement (and attachments); and (3) the dismissal of this Action. Except as provided in Section VIII.F.2. (i.e., employment taxes), this sum is inclusive of payment for: (a) all amounts paid to Class Members, including the Named Plaintiff, which are to be distributed pursuant to Section VIII.D. below; (b) all attorneys’ fees and costs awarded by the Court, including those in connection with securing court approval of the Settlement, the claims process and monitoring the Settlement Agreement, other than fees and costs awarded in connection with any
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successful proceeding to enforce the terms of this Settlement Agreement; (c) all costs in connection with the Settlement Fund including, but not limited to, those related to notice, claims processing, legal advice obtained by the Fund Administrator relating to the establishment of the Qualified Settlement Fund and tax treatment and tax reporting of awards to claimants, preparation of the Fund’s tax returns (and the taxes associated with such tax returns as defined below), and the Special Master’s fees and expenses; and (d) applicable federal, state and local income taxes, and all federal and state unemployment taxes required by law to be withheld and/or paid by Morgan Stanley. The Settlement Sum payment to the Settlement Fund does not include Morgan Stanley’s share of taxes or contributions (i.e., FICA, FUTA, SUTA and Medicare) which will be paid separately by Morgan Stanley to the Claims Administrator. Morgan Stanley shall, upon notice from the Claims Administrator as required in Section VIII.F.2. below, remit any required tax payment to the Claims Administrator. Nothing in the foregoing provisions of this Section, however, shall release MS-GWMG from expending the resources required to fulfill its responsibilities under this Settlement Agreement.
B. Administration by Trustee. The Claims Administrator shall serve as Trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling, management and distribution of the Settlement Fund. The Claims Administrator shall act in a manner necessary to qualify the Settlement Fund as a “Qualified Settlement Fund” under Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-1, et seq., and to maintain that qualification.
C. Claims Filing Procedures for Settlement of Claims of Named Plaintiff and Class Members. Class Members shall be entitled to submit their Claim Forms to the
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Special Master in accordance with the procedures set forth on the Claim Form. Any Class Member who previously released claims which would otherwise be covered by this Settlement Agreement, or who obtained a final judicial determination concerning claims that would otherwise be covered by this Settlement Agreement, is not eligible to receive a monetary award for those claims.
In order to be eligible for an award from the Settlement Fund, Class Members, including the Named Plaintiff, must submit a Claim Form which must be postmarked or actually received by the date established by the Court, unless good cause exists for a late claim form submission (which in no event may be submitted after the time that claims are paid from the Settlement Fund). The Claim Form shall be completed in its entirety to the extent applicable, including the survey of information to identify, among other things, individual evidence of alleged race discrimination.
The Claims Administrator will provide counsel for Morgan Stanley and MSGWMG’s payroll department with the names and social security numbers of Class Members who submitted Claim Forms (“Claimants”). The identity of the Claimants will not be disclosed to anyone at MS-GWMG other than counsel for Morgan Stanley and MSGWMG’s payroll department. The content of the Claims Form will be kept confidential.
After receiving the Claimant information discussed in the paragraph above, Morgan Stanley, through its counsel, will provide the Claims Administrator with the dates each Claimant was employed in the MS-GWMG as a Financial Advisor and/or a Registered Financial Advisor Trainee and earnings information for those Claimants. The Claims Administrator will provide that information to each Claimant. To the extent there is any disagreement relating to the accuracy of the information provided to the Claimants, the
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disagreement shall be resolved by the Special Master. The Special Master shall provide any corrected data to Plaintiff’s experts.
D. Allocation Formula. Class Members who submit a Claim Form will be eligible to receive monies based on a formula (the “Allocation Formula”) which will have two components: (1) an Earnings Regression Component developed by Class Counsel’s statistical experts and (2) a Claim Form Survey Component to be determined by a jointly selected Special Master. Eighty-five percent (85%) of the formula will be allocated to the Claim Form Survey Component, and fifteen percent (15%) of the formula will be allocated to the Earnings Regression Component.
1. Earnings Regression Component. A Financial Advisor Class Member, including the Named Plaintiff, whose annual earnings in any year during the liability period fall below an annual earnings curve which is set at two standard deviations above the mean earnings curve for white Financial Advisors (controlling for registration date and branch/office location), shall be eligible to receive a monetary award from the earnings regression component for that year.
Once it is determined that a claimant is eligible for a monetary reward from the earnings regression component for a particular year, the calculation of the monetary award will take into account the Claimant’s earnings during that year, and shall control for the following variables: a) the Claimant’s length of tenure at MS-GWMG as a Financial Advisor; b) the Claimant’s registration date; and c) the Claimant’s branch office location.
A separate, comparable earnings regression model will be conducted with respect to Registered Financial Advisor Trainees. The earnings regression component will be developed by Class Counsel’s expert with input from MS-GWMG.
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2. Claim Form Survey Component. The Special Master shall make allocations under the Claim Form survey component by assigning points based on Claimants’ responses to the Claim Form Survey. Points for the Claim Form Survey will be allocated as follows: (1) Each claimant will receive 1 point for each week worked between October 12, 2002 and December 3, 2007 as a Financial Advisor or a Registered Financial Advisor Trainee; (2) Claimants will be eligible for up to 50 points for responses to questions on the Claim Form about extreme emotional distress; and (3) Claimants will be eligible for up to 50 points for responses to questions on the Claim Form about termination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions-in-force, other production based performance related terminations and/or any claims for constructive discharge based on the same set of facts or circumstances. Based on information provided by MS-GWMG, the Special Master may modify allocations to be made under the Allocation Formula based on any data or information specific to the Claimant’s branch/office, including information regarding persons who previously signed a release that covered race and/or color discrimination claims. Subject to Court approval of the rationale and methodology upon which the proposed allocation and distribution are based, the Special Master will have sole and final authority as to the final distribution.
3. Special Master Authority to Determine Award Eligibility. a. Within a reasonable time period after the date specified for
receipt of the Claim Forms, the Special Master shall render a determination as to the monetary award, if any, that should be paid to each Claimant from the Settlement Fund.
b. The total amount of such awards shall not exceed the net 39
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amount of the Settlement Fund after all costs and Class Counsel’s attorney’s fees, as discussed in Section VIII.A. above, are considered.
c. After determining the proposed allocation, the Special Master shall submit a Report and Recommendation including the proposed allocation and distribution plan, together with a full explanation of the rationale and methodology upon which the proposed allocation and distribution are based, to the Court under seal for in camera review and approval of the rationale and methodology, with copies to Lead Class Counsel. If there is no objection or suggested modification by the Court within thirty (30) days following submission to the Court, the rationale and methodology shall be deemed approved, the allocation and distribution plan contained in the Report and Recommendation shall be deemed final, and the Special Master shall submit the distribution plan to the Claims Administrator to send the Notices of Awards to the eligible Claimants.
d. Following approval by the Court, the Claims Administrator shall send a Notice of Award to each eligible Claimant, along with the Named Plaintiff Release or a Class Member Release, whichever is applicable. Within a reasonable time period after receipt of an executed Named Plaintiff Release from the Named Plaintiff or an executed Class Member Release from a Class Member, the Claims Administrator shall send the Named Plaintiff or Class Member his or her award payment. If the Named Plaintiff does not execute and timely deliver an executed Named Plaintiff Release, or if any Class Members do not execute and timely deliver an executed Class Member Release to the Claims Administrator within six (6) months of the date the Notice of Award was mailed to them, they shall be ineligible for, and forever barred from receiving, monetary
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relief under this Settlement Agreement, even if said Named Plaintiff or Class Member has not opted out. Any undistributed funds that remain after six (6) months from the mailing of the Notice of Award due to unsubmitted releases shall be distributed to 501(c)(3) organizations advancing opportunities for African Americans and/or Latinos, including opportunities in the financial services industry, as jointly selected by Lead Class Counsel and MS-GWMG.
e. The Special Master shall maintain the distribution plan and allocation list for a period of five (5) years. Morgan Stanley shall have access to individual allocation amounts only upon written notice to Class Counsel and a showing of good cause (e.g., actual or threatened litigation by a Claimant). Any dispute as to whether good cause exists for such a requested disclosure shall be resolved through the Dispute Resolution process set forth in this Settlement Agreement.
4. Confidentiality Regarding Amount of Monetary Award. All Claimants receiving monetary awards will be asked to keep the amount of their award confidential.
E. Non-Admissibility of Fact of Award (or Non-Award). Except to the extent that it would constitute a set off in an action for damages claimed for any period covered by this settlement, neither the fact nor amount of an award, nor the fact of any non-award, shall be admissible in any other proceeding for any purpose other than to enforce the Named Plaintiff Release or a Class Member Release executed in accordance with this claims process, nor shall it be deemed to be a finding as to the merits of any claim.
F. Tax Treatment 41
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1.

Qualified Tax Status and Tax Responsibilities. The Settlement

Fund shall be established as a Qualified Settlement Fund within the meaning of Section

468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-

1, et seq., and shall be administered by the Claims Administrator under the Court’s

supervision. The parties shall cooperate to ensure such treatment and shall not take a

position in any filing or before any tax authority inconsistent with such treatment.

2.

Payment of Federal, State and Local Taxes. The parties recognize

that the awards to eligible Claimants will be subject to applicable tax withholding and

reporting, which will be handled as follows: The Claims Administrator shall serve as

trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling,

management, and distribution of the Settlement, including the handling of tax-related

issues and payments. Specifically, the Claims Administrator shall be responsible for

withholding, remitting and reporting of the Claimant’s share of the payroll taxes from the

Settlement Fund, and Morgan Stanley shall be responsible for the employer’s share of

payroll taxes as set forth in this section.

The Special Master will establish, for tax purposes, the allocation of the

payments made to Claimants to wages, interest, compensatory damages, or such other tax

character of such payout as the Special Master may determine, based on the principles set

forth in Treas. Reg. §1.468B-4 by reference to the claims pursuant to which distributions

are made and as if Morgan Stanley made such payments directly to Claimants.

The Claims Administrator shall inform Morgan Stanley in writing of the

employer’s share of all taxes or contributions (i.e., FICA, FUTA, SUTA, and Medicare)

required to be paid by Morgan Stanley. Morgan Stanley shall, within ten (10) business 42

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days of such notice, remit all such payments (net of the credit for opt outs, if any, as provided for in Section IV.C.9. above) to the Claims Administrator for payment to appropriate taxing authorities (“Employer Payroll Tax Payment”).
The Claims Administrator shall be responsible for the timely reporting and remitting of the Employer Payroll Tax Payment to the appropriate taxing authorities and shall indemnify Morgan Stanley for any penalty arising out of an incorrect calculation and/or interest with respect to late deposit of the same. Subject to the Claims Administrator’s obligation to comply with applicable laws, the parties anticipate that any amounts designated as interest shall not be subject to withholding and shall be reported, if required, to the IRS on Form 1099-INT. The amounts paid for emotional distress shall not be subject to withholding and shall be reported to the IRS on Form 1099-MISC.
Except with respect to the Employer Payroll Tax Payment, the Claims Administrator shall be responsible to satisfy from the Settlement Fund any and all federal, state and local employment and withholding taxes, including, without limitation, federal and state income tax withholding, FICA, FUTA, SUTA, Medicare and any state employment taxes. The Claims Administrator shall satisfy all federal, state, local, and other reporting requirements (including any applicable reporting with respect to attorneys’ fees and other costs subject to reporting), and any and all taxes, penalties and other obligations with respect to the payments or distributions from the Settlement Fund not otherwise addressed herein.
The Claims Administrator shall be responsible for procuring an executed Named Plaintiff or Class Member Release and Form W-9 from each Named Plaintiff prior to making any monetary allocations to such Named Plaintiff. The Claims Administrator
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shall be responsible for procuring an executed Class Member Release and Form W-9 from each eligible Claimant who is not a Named Plaintiff prior to making any monetary allocations to such Claimant.
All (i) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund, including any taxes or tax detriments that may be imposed on Morgan Stanley with respect to income earned for any period during which the Settlement Fund does not qualify as a “Qualified Settlement Fund” for federal and state income tax purposes (hereinafter “Settlement Fund Taxes”), and (ii) expenses and costs incurred in connection with the operation and implementation of this paragraph (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) any returns described herein or otherwise required to be filed pursuant to applicable authorities) (hereinafter “Settlement Fund Tax Expenses”), shall be paid out of the Settlement Fund. Further, Settlement Fund Taxes and Settlement Fund Tax Expenses shall be treated as a cost of the administration of the Settlement Fund. The parties hereto agree to cooperate with the Claims Administrator, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions set forth in this paragraph.
G. Morgan Stanley Has No Further Obligation, Liability or Responsibility. Other than Morgan Stanley’s responsibility for the employer’s share of payroll taxes as discussed in Section VIII.F.2. above, Morgan Stanley shall have no withholding, reporting or any other tax reporting or payment responsibilities with regard to the Settlement Fund or its distribution to Class Members. Moreover, Morgan Stanley shall
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have no liability, obligation, or responsibility for the administration of the Settlement Fund, the determination of any formulas for disbursement, or the disbursement of any monies from the Settlement Fund except for (1) its obligation to pay the Settlement Sum specified in Section VIII.A. no later than ten (10) days after the Effective Date; (2) its obligation related to the Employer Payroll Tax Payment as set forth in Section VIII.F.2.; and (3) its agreement to cooperate in providing information which is necessary for Settlement administration set forth herein.
H. The parties anticipate that MS-GWMG will spend approximately $7,500,000 on diversity efforts during the period of this Settlement Agreement, including programs for training, re-education, and other development programs for African American and Latino Financial Advisors and Registered Financial Advisor Trainees. This includes costs associated with settlement compliance, such as costs for the retention of the Industrial Psychologists, compensation for the Diversity Monitor, compensation and all expenses for employees who will be working on the diversity programs, and the costs associated with the Minority Business Exchange and other training and development programs for African American and Latino Financial Advisors and Registered Financial Advisor Trainees. IX. MONITORING
A. Data Collection. MS-GWMG will collect data which will include, but not be limited to: (1) sourcing, recruitment and hiring of Financial Advisors; (2) compensation of Financial Advisors; (3) partnerships between active Financial Advisors or partnerships between active and retiring Financial Advisors; (4) account distributions, defined to include all transfers of accounts from one Financial Advisor to another within MS-GWMG
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such as those of retiring and deceased Financial Advisors, not just the distribution of the accounts of departing Financial Advisor; (5) race or color discrimination complaints made by African American or Latino Registered Financial Advisor Trainees or Financial Advisors; (6) retention of Financial Advisors and (7) any other areas agreed upon by MSGWMG and Lead Class Counsel. MS-GWMG will include several variables in its data collection, including but not limited to, race, production and length of experience.
B. Monitoring System. MS-GWMG, with input from the Industrial Psychologists and consent from Lead Class Counsel, will create and implement a system of monitoring compliance with each policy described herein, including, without limitation, the account distribution policy using the Power Ranking methodology.
C. Reports. Lead Class Counsel will receive semi-annual reports from the Diversity Monitor regarding the data and information collected through the monitoring system including the analysis of the account distribution system and the other areas reviewed by the Diversity Monitor under this Agreement as specified in Section VII.G.1. herein.
D. Meetings. MS-GWMG and Lead Class Counsel will meet at least once every six (6) months regarding compliance, and may confer more frequently at their discretion or as dictated by information either side gathers. X. ENFORCEMENT
A. No Third Parties. Enforcement of this Settlement Agreement shall be prosecuted by Lead Class Counsel or counsel for Morgan Stanley only, not third parties. Lead Class Counsel shall meet and confer with counsel for Morgan Stanley prior to commencement of any enforcement proceedings.
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B. Dispute Resolution. The parties will work diligently and in good faith to resolve all disputes that may arise during the term of this Settlement Agreement concerning the rights, obligations and duties of the parties to this Settlement Agreement. In the event the parties cannot agree, the parties will attempt to resolve the dispute with the facilitation of a mutually selected mediator. If mediation fails to resolve the dispute(s) at issue, the parties agree to submit the dispute(s) to binding resolution by a mutually appointed arbitrator. Either party may seek Court review and reversal of the arbitrator’s decision on the basis of an abuse of discretion or error of law standard. XI. CONFIDENTIALITY
A. Documents and Information Produced by Morgan Stanley and Class Counsel. All proprietary and confidential documents or information that have previously been provided to either Morgan Stanley or Class Counsel as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provision of this Settlement Agreement shall, unless otherwise agreed, be treated as, and thereafter remain, confidential. Said documents and information shall not be disclosed to anyone other than the mediator, arbitrator or the Court in connection with any proceeding to enforce any provision of this Settlement Agreement. If such disclosure is deemed necessary by Class Counsel or Morgan Stanley, Class Counsel or the Company shall identify and disclose to the other party such documents and information deemed necessary to disclose at least ten (10) business days prior to filing such documents with the Court, and, if a party so requests, shall seek permission to file said documents with this Court under seal.
B. Return or Disposal of Confidential Documents and Information. All 47
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proprietary and confidential documents or information that have previously been provided to Class Counsel or to Morgan Stanley as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provision of this Settlement Agreement, shall be destroyed or returned to counsel as follows:
After the expiration of the five (5) year term of the Settlement all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley and designated “Confidential for Settlement Purposes Only” or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the expiration of the five (5) year term of the Settlement. Certification of such destruction shall be provided to counsel for the producing party.
The preceding paragraphs of this Section are intended to supersede those provisions of the “Confidentiality Agreement For Settlement Discussions” earlier executed by counsel for the parties that address the timing of the return or destruction of proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley. All other provisions of the “Confidentiality Agreement For Settlement Discussions” remain in full effect.
Nothing in the preceding paragraphs shall preclude any party from responding to a lawful discovery request, subpoena or court order; provided, however, that the party against whom such discovery is sought or such subpoena or order is directed agrees to
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provide immediate notice and a copy of same to counsel for the other parties to this Settlement Agreement.
In the event that this Settlement Agreement is terminated for any reason, all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley and designated “Confidential for Settlement Purposes Only” or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the date on which this Settlement Agreement is terminated. Certification of such destruction shall be provided to counsel for the producing party. XII. ATTORNEYS’ FEES AND EXPENSES OF CLASS COUNSEL.
As discussed above in Section VIII.A., all of Class Counsel’s fees and costs, including those in connection with securing Court approval of this Settlement Agreement, the claims process and any monitoring of this Settlement Agreement, shall be paid from the Settlement Fund, following approval of those attorney’s fees and costs by the Court. Morgan Stanley shall not oppose Class Counsel’s request for an award of attorneys’ fees and expenses in the amount of $800,000, plus $150,000 per year during the five-year term of the Settlement to cover future fees and expenses relating to monitoring and enforcing the Settlement, plus interest accruing on all fees and expenses from the date on which the Settlement is funded until such fees and expenses are disbursed to Class Counsel.
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XIII. GOVERNING LAW The parties agree that federal law shall govern the validity, construction and
enforcement of this Settlement Agreement. To the extent that it is determined that the validity, construction or enforcement of this Settlement Agreement or the Named Plaintiff Release or Class Member Release executed pursuant to its terms is governed by state law, the law of the State of California shall apply.
This Settlement Agreement, including the Exhibits hereto, contains the entire agreement and understanding of the parties with respect to the Settlement. This Settlement Agreement does not impose any obligations on the parties beyond the terms and conditions stated herein. Accordingly, this Settlement Agreement shall not prevent or preclude MSGWMG from revising its employment practices and policies or taking other personnel actions during the term of this Settlement Agreement so long as they are consistent with this Settlement Agreement.
Except as specifically provided for herein, this Settlement Agreement may not be amended or modified except with the express written consent of the parties. XIV. OTHER CONDITIONS OF SETTLEMENT
A. Exhibits. The Exhibits to this Settlement Agreement are material and integral parts hereof and are fully incorporated herein by this reference.
B. Notices to Counsel. All notices to counsel required or desired to be given under this Settlement Agreement shall be in writing and by overnight mail and e-mail to counsel for the respective parties (specifically, to Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein, LLP, James M. Finberg of Altshuler Berzon, LLP, Adam T. Klein
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of Outten & Golden, LLP, Alexa B. Pappas of Morgan Stanley, and Mark S. Dichter of Morgan, Lewis & Bockius LLP) at their respective addresses set forth below (or to such other address as any such party or counsel may designate in a notice). Notices sent to Alexa B. Pappas under this paragraph shall be addressed to Ms. Pappas at the following address: 2000 Westchester Avenue, Purchase, New York, 10577-2530.
C. Failure to Insist on Strict Compliance. The failure of any party to insist in any one or more instances on strict compliance with the terms and conditions hereof shall not be construed to be a waiver of remedies available with respect to any prior or subsequent breach.
D. Settlement Agreement Binding. This Settlement Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, dependents, executors, administrators, trustees, legal representatives, personal representatives, agents, successors and assigns; provided, however, that this Settlement Agreements shall not inure to the benefit of any third party.
E. Modifications to this Agreement. No material modifications to this Agreement may be made without prior Court approval.
F. No Drafting Presumption. All parties hereto have participated, through their respective counsel, in the drafting of this Settlement Agreement and, therefore, this Settlement Agreement shall not be construed more strictly against one party than another.
G. Dispute As To Meaning of Agreement Terms. In the event of any dispute or disagreement with respect to the meaning, effect or interpretation of this Settlement Agreement or any Exhibit hereto, or in the event of a claimed breach of the Settlement Agreement, the parties agree that such dispute will be resolved and adjudicated only in
51
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Case 3:06-cv-03903-TEH Document 159 Filed 02/11/2008 Page 58 of 60
accordance with the dispute resolution provisions of Section X.B. of this Settlement Agreement.
H. Interpretation of Terms. Whenever possible, each provision and term of this Settlement Agreement shall be interpreted in such a manner as to be valid and enforceable.
I. Paragraph and Section Headings. Paragraph and section headings are for convenience of reference only and are not intended to create substantive rights or obligations.
J. Counterparts. This Settlement Agreement may be executed in counterparts. Each signed counterpart together with the others shall constitute the full Settlement Agreement.
K. Agreement Binding. As of the date on which counsel for the parties execute this Settlement Agreement, this Settlement Agreement will be binding in all respects, unless the Court fails to approve this Settlement Agreement and the Settlement Agreement is thus vacated.
[Remainder of this page intentionally left blank.]
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DATED: ______________, 2008

By: _______________________________ Kelly M. Dermody, Esq. Email: Kdermody@lchb.com Heather H. Wong, Esq. LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

By: _______________________________ James M. Finberg, Esq. E-mail: Jfinberg@altshulerberzon.com Eve H. Cervantez , Esq. ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

By: _______________________________ Adam T. Klein, Esq. Email: atk@outtengolden.com Piper Hoffman, Esq. Justin M. Swartz, Esq. OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
Attorneys for Plaintiffs and the Class

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DATED: _______________, 2008
By: _______________________________ Mark S. Dichter, Esq. Email: mdichter@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5299
By: _______________________________ L. Julius M. Turman, Esq, Email: jturman@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442.1361 Facsimile: (415) 442.1001
Attorneys for Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc.
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722029.7

 
 Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 1 of 30

1 ROBERT S. NELSON (SBN# 220984) NELSON LAW GROUP
2 900 Cherry Avenue, Suite 300 San Bruno, CA 94066
3 (650) 794-2760 (phone) (650) 794-2761 (fax)
4 rnelson@nelsonlawgroup.net

5 MARY STOWELL (Pro hac vice) LINDA D. FRIEDMAN (Pro hac vice)
6 STOWELL & FRIEDMAN LTD 321 S. Plymouth Court, Suite 1400
7 Chicago, Illinois 60604 (312) 431-0888
8 mstowell@sfltd.com lfriedman@sfltd.com
9
BARI S. ROBINSON (SBN# 91743) 10 LAW OFFICES OF BARI S. ROBINSON 11 1970 Broadway, Suite 1250
Oakland, California 94612 12 (510) 625-1507
barirobinson@aol.com 13
Attorneys for OBJECTORS, DEBRA FRAZIER, JONATHAN GLOVER, LATRISSA 14 GORDON, PETER MEME, MARSHELL MILLER, JEROME SENEGAL, MARILYN WHITE, 15 KENNETH WINN

16

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

17

SAN FRANCISCO DIVISION

18

19

DAISY JAFFE, et al.,

20

Plaintiff, v.

21 MORGAN STANLEY & CO., INC.,
22 Defendant.
23

Case No. C 06-3903 TEH
OBJECTORS’ OBJECTIONS TO APPROVAL OF PROPOSED CLASS SETTLEMENT

24

25

26

27

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OBJECTORS’ OBJECTIONS TO APPROVAL OF PROPOSED SETTLEMENT - CASE NO. C-06-3903 (TEH)

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 2 of 30

1
TABLE OF CONTENTS
2

3 OBJECTIONS OF PUTATIVE CLASS MEMBERS TO 4 APPROVAL OF PROPOSED SETTLEMENT............................................................... 1

5 RELEVANT FACTUAL BACKGROUND...................................................................... 1

6 A. B.
7

Facts Previously Presented to the Court. ............................................................ 1 Facts Not Previously Considered By The Court .................................................. 4

8 ARGUMENT ....................................................................................................................... 6 A. Lawyers Are Not A Substitute For Clients. .......................................................... 7

9 B. The Lack of Clients Resulted In An Inadequate and Unfair Settlement ........... 8

1. The Objectors would have brought a healthy skepticism and distrust

10

of Morgan Stanley and would have required lasting and meaningful

11

Court involvement and supervision. ..................................................................... 9 2. The Objectors would have required Morgan Stanley to agree to

12

concrete, measurable goals and timetables to remedy its discriminatory

practices. ................................................................................................................. 10

13

3. The Objectors would have insisted on transparency and disclosed all

relevant information about the Settlement and its terms to class

14

members so they could understand and properly evaluate the

15

Settlement in order to decide whether to participate, opt-out or object. ......... 11 4. The Objectors would not have approved a Power Ranking for account

16

distributions because of the historical and ongoing discrimination

against African-Americans and women at Morgan Stanley. ............................ 12

17

5. The Objectors would never have agreed to a Settlement that did not

reform partnerships, or teams of FAs, which work to the huge

18

disadvantage of African-Americans ..................................................................... 14

19

6. The Objectors would have understood and been empathetic to the

plight of African-American class members, who are frequently isolated

20

and excluded at Morgan Stanley, and tailored appropriate injunctive

relief. ........................................................................................................................ 16

21

7. The Objectors would have calculated the damages suffered by the class

to properly measure the losses suffered by class members and to value

22

and include all recoverable damages.................................................................... 17

23

8. The Objectors would have insisted upon a higher financial recovery to

the class.................................................................................................................... 18

24

9. The Objectors would have asked class members to release claims for

which they were not being compensated, including termination and

25

promotion claims .................................................................................................... 19

10. The Objectors would not have allowed special treatment of any class

26

representatives ........................................................................................................ 20

27

11. The Objectors would not have agreed to a single class of African-

Americans and Latinos, particularly with a single common fund to be

28

distributed by a single formula ............................................................................. 20

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 3 of 30

1

12. The Objectors would have been typical plaintiffs who bring with them

what some may consider unreasonable expectations. ....................................... 21

2

13. The Objectors would have insisted that Morgan Stanley guarantee

3

class members, and all employees, access to the courts for civil rights

claims. ...................................................................................................................... 22

4

14. The Objectors would have ensured that the class received adequate

notice and full information about the Settlement and its negotiations. ............ 22

5

15. The Objectors would have known that the task they performed may

have been a one-shot opportunity for change given Ledbetter v.

6

Goodyear Tire......................................................................................................... 23

7 C. Other Indicia Of Inadequacy Of Settlement ........................................................ 24
8 REQUEST TO APPEAR AND BE HEARD .................................................................... 25
9

10 CONCLUSION.................................................................................................................... 25

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ii

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 4 of 30

1

TABLE OF AUTHORITIES

2 Albermarle Paper v. Moody 422 U.S. 405, 419 (1975) .......................................................................................... 17
3

4 Augst-Johnson et al. v. MSD 06-1142 (D.D.C.) .................................................................................................... 1

5

Dodson v. Morgan Stanley DW, Inc.

6

No. 06-5669, 2007 U.S. Dist. LEXIS 85535 (W.D. Wa. Nov. 8, 2007)................... 15

7 EEOC v. O&G Spring

8

38 F.3d 872, 880 (7th Cir. 1994); 42 U.S.C. § 2000e-5(g)(1). Section 1981 ........... 17

9 Employees Committed for Justice v. Eastman Kodak
407 F. Supp. 2d 423 (W.D.N.Y. 2005) ..................................................................... 10 10

11

General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig. 55 F.3d 768, 794 (3rd Cir. 1995). ........................................................................... 6

12 Heit v. Van Ochten

13

126 F.Supp.2d 487, 494 -495 (W.D. Mich. 2001) .................................................... 6

14 Ledbetter v. Goodyear Tire

15

127 S.Ct. 2162 (2007) ............................................................................................... 23

16 Linney v. Cellular Alaska Partnership 151 F.3d 1234, 1242 (9th Cir. 1998)....................................................................... 6

17

Martens et al. v. Smith Barney

18

No. 96-3779, 1998 U.S. Dist. LEXIS 17666 (S.D.N.Y. Jul. 24, 1998) ................ 10

19 Olden v. LaFarge Corp.

20

472 F.Supp.2d 922, 937-39 (E.D. Mich. 2007) ........................................................ 6

21 Simer v. Rios 661 F.2d 655, 664-66 (7th Cir. 1981) ....................................................................... 6
22

23 Puffer v. Allstate Case No. 04-5764 (N.D. Ill.)..................................................................................... 11

24

Roberts, et al. v. Texaco

25

No. 94-2015, 1997 U.S. Dist. LEXIS 23848 (S.D.N.Y. Mar. 21, 1997) .................. 9

26 Smith v. Nike Retail Services

27

No. 03-9110 (N.D. Ill. 2006) .................................................................................... 6

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 5 of 30

1 Taxman v. Bd. of Educ 91 F.3d 1547, 1552 (3d Cir. 1996)............................................................................ 17
2

3 Williams v. Pharmacia 137 F.3d 944, 951-52 (7th Cir. 1998) ....................................................................... 17

4

Zhang v. Am. Gem Seafoods, Inc.

5

339 F.3d 1020, 1044 (9th Cir. 2003)......................................................................... 17

6 Zubulake v. UBS Warburg LLC

7

No. 02-1243 (S.D.N.Y. 2005) ................................................................................... 19

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

iv

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 6 of 30

1

The following class members, through counsel, respectfully submit these Objections to the

2 proposed class certification and class settlement (“Settlement”) for the Court’s consideration:

3 Debra Frazier, Jonathan Glover, Latrissa Gordon, Peter Meme, Marshell Miller, Jerome

4 Senegal, Marilyn White, Kenneth Winn (“the Objectors”). The Objectors understand that the

5 Court permitted certain class members who have not opted out, the Moore Group, to participate in

6 this proceeding prior to the preliminary approval of this class action and settlement. The

7 Objectors appreciate the Court’s diligence and willingness to consider the voices of absent class

8 members. The Objectors respectfully ask the Court to consider at this stage the objections,

9 arguments and evidence presented by the Moore Group in Docket Nos. 95, 119, 123, 129, 145,

10 152 in light of the entire record and new information presented to the Court. So as not to burden

11 the Court with an extensive or duplicative submission, the Objectors state that they agree with the

12 Objections and Supplemental Objections of the Moore Group and incorporate those objections as

13 their own as if fully stated herein. In addition to the reasons contained in the previously filed

14 objections of the Moore group, the Objectors urge the Court to deny class certification and final

15 approval on the settlement on the grounds set forth below:

16

RELEVANT FACTUAL BACKGROUND

17 A. Facts Previously Presented to the Court.

18

The Jaffe lawsuit was filed on June 22, 2006 as a class action gender discrimination

19 lawsuit, on behalf of female Financial Advisors (“FAs”). The Jaffe case lost the opportunity to

20 proceed as a gender class action when Morgan Stanley chose to negotiate and ultimately settle

21 with plaintiffs in a competing class action lawsuit that had been filed on the same day, Augst-

22 Johnson et al. v. MSDW, Case No. 06-1142 (D.D.C.)

23

On August 8, 2006, a group of African-American current and former Morgan Stanley FAs

24 (the “Moore Group”) informed Morgan Stanley of their individual and class claims of race 25 discrimination.1 Docket 95, at Ex. 14, Stowell Letter. The Moore Group entered into a class

26

27 1 The fourteen members of the Moore Group include current and former Morgan Stanley FAs of varying levels of production and tenure, FAs who are producing managers, and one rejected

28

(Footnote cont’d on next page)

1
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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 7 of 30

1 tolling agreement and met with lawyers and executives from Morgan Stanley a number of times

2 over the next 10 months to discuss the systemic obstacles and patterns of discrimination facing

3 African-Americans at Morgan Stanley. The parties were assisted by a well-respected professional

4 mediator, Linda Singer of JAMS.

5

This Court stayed the Jaffe lawsuit from January 2007 to August 2007, pending

6 proceedings in the Augst-Johnson case. Docket Nos. 67, 72-76. On April 24, 2007, the Augst-

7 Johnson parties moved for preliminary approval of a pre-certification settlement establishing

8 programmatic relief and a monetary fund of $46 million. Docket 95, at Ex. 13.

9

Prior to August 2, 2007, neither of the Jaffe parties ever reported to this Court that the

10 nature of the Jaffe lawsuit had changed from a putative gender discrimination class action lawsuit.

11 Indeed, when Denise Williams, an African-American, was added as a plaintiff in October 2006,

12 she brought only “individual race discrimination claims” on her own behalf and the case

13 remained a gender class action. Docket No. 32 at 2.

14

On August 2, 2007, counsel for the Jaffe plaintiffs issued a press release announcing the

15 settlement of class race and color discrimination claims for 1,200 African-Americans and Latinos

16 via the dormant putative gender class action lawsuit. See Docket No. 95, at Ex. 11. On that same

17 day, the parties informed the Court that the settlement in the Augst-Johnson gender class action

18 had been preliminarily approved and that they would no longer seek certification of a gender

19 class; they also sought to amend the Jaffe complaint to add another plaintiff and class-wide race

20 discrimination claims based on the settlement of the new race class. See Docket No. 80 at 2, 3, 7,

21 23.

22

On August 1, 2007, the night before the Jaffe settlement was announced and the Second

23

24 (Footnote cont’d from previous page.)
25 applicant. Members of the Moore Group have worked at over ten different Morgan Stanley offices across the country and collectively, have a wealth of knowledge about the Firm and the
26 manner in which its policies and practices operate to disadvantage and exclude AfricanAmericans, and how to address these shortcomings. Despite their simultaneous attempts to
27 address the Firm’s systemic discrimination, none were consulted during negotiation of the claims of an entire class of African-Americans or in crafting appropriate relief.
28

2

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 8 of 30

1 Amended Complaint filed, Morgan Stanley’s counsel, Mark Dichter, first informed counsel for

2 the Moore Group of the Firm’s simultaneous, dual negotiations with the Moore Group and

3 plaintiff’s counsel in the Jaffe lawsuit. He further informed the Moore Group that Morgan

4 Stanley had settled a “race and color” class action lawsuit for African-Americans and Latinos,

5 although the case had not been filed.

6

Also on August 1, Mary Evans, an African-American producing Assistant Branch

7 Manager in the Menlo Park office, received a phone call from an attorney for the Jaffe plaintiffs, 8 who appeared to be attempting to solicit her as a named plaintiff in this case.2 See Ex. 9. Evans

9 is a member of the Moore Group.

10

The Jaffe Second Amended Complaint filed on August 2 alleged, for the first time, claims

11 of class-wide race and color discrimination on behalf of classes of African-American and Latino

12 FAs and FA-Trainees. See generally Sec. Am. Cmplt., Docket No. 81. Named plaintiff Williams

13 was identified as a class representative for the African-American class for purposes of Title VII

14 and Section 1981 claims, but not as a class representative for the “Minority” or Latino class. Id.

15 at 5-6, counts 1, 2, 3, 4, 6, 8, 9.

16

Margaret Benay Curtis-Bauer was first added as a named plaintiff in the Second Amended

17 Complaint and identified as a class representative solely for the Section 1981 claims for the

18 “Minority” class, which included African-Americans and Latinos. Id. The Complaint did not

19 identify any of the putative class representatives as Latino. See id. at 6. The terms of the

20 settlement were not disclosed, nor was the settlement agreement filed with the Court at that time.

21

The parties agreed upon a class period beginning October 12, 2002, nearly five years prior

22 to the date the Second Amended Complaint was filed and four years after the First Amended

23 Complaint added plaintiff Denise Williams, who did not allege class claims of race discrimination

24 in that complaint, nor had she filed a representative EEOC charge alleging class-wide

25

26 2 The Objectors are aware of other class members contacted during that time frame. In addition, after the Moore Group first raised its objections to the Settlement, African-American FA Marshell
27 Miller received a similar call asking for support and to be a named plaintiff. See Ex. I.

28

3

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 9 of 30

1 discrimination. See Settlement and Sec. Am. Cmplt. There was no Latino class representative.

2 In exchange for serving as a class representative, Curtis-Bauer would receive a $25,000 service

3 bonus and $125,000 from the common class fund to resolve her individual non-class claims,

4 which are time-barred.

5

B. Facts Not Previously Considered By The Court

6

No class representative knew of or consented to the terms of the Settlement agreement

7 when it was reached on July 23, 2007. See, e.g., Docket No. 107, Dichter Dec., at ¶ 9 (defense

8 counsel Mark Dichter testified that the parties reached a tentative settlement agreement on July

9 23, 2007, during the parties’ final day of mediation).

10

Denise Williams, an African-American woman and named plaintiff in this lawsuit, did not

11 participate in any way in the negotiations of the settlement of the lawsuit that bore her name. See

12 generally Ex. A, Williams Dec. Williams was not invited to attend any mediation sessions or

13 allowed to participate in the negotiations of the class settlement. Id. at ¶ 5.

14

On July 30, 2007, Williams’ lawyers e-mailed her a draft Second Amended complaint that

15 identified only Williams and Daisy Jaffe as named plaintiffs. Ex. A, at A-1. Ms. Curtis-Bauer

16 was not identified as a named plaintiff in the complaint. Id.

17

The July 30 draft complaint identified Williams as a class representative for a “minority”

18 class that included African-Americans and Latinos. Ex. A at A-1. After Williams received and

19 reviewed the draft complaint, she informed her lawyers that she would not serve as a class

20 representative for Latinos because she believed she had insufficient knowledge of the experiences 21 of Latino FAs and believed that the interests of the two groups were not aligned.3 Ex. A, at ¶ 7.

22 Thereafter, the lawyers attempted to locate another class representative. Indeed, on August 1, the

23 day before the settlement was announced and the Second Amended Complaint filed, an attorney

24 from Lieff Cabraser contacted Moore Group member Mary Evans about the case. Ex. D, Evans

25

26 3 In response to Williams’ refusal, the complaint was later re-drafted to eliminate Williams as a 27 class representative for “minorities” and to limit her role as a representative for African-American
FAs.
28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 10 of 30

1 11/9/07 Dec.

2

Within a day or two after Williams refused to serve as a class representative for Latino

3 Financial Advisors, she was told by her lawyers that they “had found someone else” to represent

4 Latinos. Ex. A, at ¶ 8. Thus, the Second Amended Complaint named Williams a class

5 representative for only an “African-American class,” while Margaret Benay Curtis-Bauer was

6 added as a plaintiff and class representative for the “minority” class, which also included Latinos.

7 As of August 2, 2007, Williams was not aware of the terms of any class settlement with Morgan

8 Stanley. Ex. A, at ¶ 6. Williams was also not aware of the participation of Ms. Curtis-Bauer,

9 whom she has never met. Ex. A, at ¶ 8.

10

Curtis-Bauer had only become involved in the litigation after a Settlement was reached

11 and admittedly in a very limited role. See, e.g., Exs. C, E, F. On November 27, 2007, Ms. Curtis-

12 Bauer spoke with Mary Evans, whom she considered a friend and has known for over 10 years,

13 by telephone. Ex. C, Evans 12/13/07 Dec., at ¶¶ 3-5. During two calls, Curtis-Bauer told Evans

14 that an attorney from Lieff Cabraser called and pressured her to participate in the Jaffe lawsuit

15 and told her she only had three days to file, or words to that effect. Ex. C, at ¶ 6.c.-6.f. Curtis-

16 Bauer admitted that she was torn about her participation in the lawsuit because she did not believe

17 the settlement went “far enough” to remedy Morgan Stanley’s discrimination, a sentiment she

18 said she had shared with her lawyers. See Ex. C, at ¶ 6.g. Curtis-Bauer also told Evans that she

19 thought the lawsuit only covered Morgan Stanley employees who worked in California. Ex. C, at

20 6.a.

21

Curtis-Bauer gave her home phone number to Evans and asked that other members of the

22 Moore Group call her, which a few of them did. Curtis-Bauer made the same admissions to

23 Moore Group members Brian Roy and Maurice Mabon about her late involvement and how she

24 became involved in the lawsuit. See generally Ex. E, Roy Dec.; Ex. F, Mabon Dec. Curtis-Bauer

25 told both men that she did not want to be an active participant but had agreed to lend her name to

26 the lawsuit, or words to that effect. See Ex. E, at 5.f.; Ex. F, at 5.f. Roy and Mabon attended the

27 Court’s December 3, 2007 hearing prepared to testify about their conversations with Curtis-Bauer

28 and the admissions she made to them, and Roy testified to his conversation before the Court with

5

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 11 of 30

1 Curtis-Bauer.

2

ARGUMENT

3

Rule 23 governs the rights and obligations of parties who desire to bind not only

4 themselves but also to resolve the disputes of others. Before approving a pre-certification class

5 settlement, the Court must first conclude that the proposed class meets the requirements for Rule

6 23 certification. In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig., 55

7 F.3d 768, 794 (3rd Cir. 1995).

8

Likewise, the district court plays a critical role in ensuring the fairness and adequacy of

9 proposed class action settlements. Thus, a class action settlement may be approved only when the

10 Court finds that that the settlement’s proponents have met their burden to show that it is

11 fundamentally fair, adequate, and reasonable. Linney v. Cellular Alaska Partnership, 151 F.3d

12 1234, 1242 (9th Cir. 1998). Where a settlement was reached prior to class certification, the court

13 must examine the settlement with special care and skepticism. Staton v. Boeing Co., 327 F.3d

14 938, 952 (9th Cir. 2003). Pre-certification settlements merit heightened judicial scrutiny because

15 the court must protect the interests of class members who are not yet notified of the action and

16 therefore lacked any opportunity to ensure that their voices were heard during negotiations. In re

17 General Motors Corp., 55 F.3d at 796 (discussing the problems presented by pre-certification

18 settlements and the duty of courts to examine them with extra care). Pre-certification settlements

19 also warrant extra scrutiny because they present unique temptations and opportunities for

20 collusion. See, e.g., Simer v. Rios, 661 F.2d 655, 664-66 (7th Cir. 1981) (requiring that settlement

21 proponents show that the compromise met a higher standard of fairness where negotiations

22 occurred before certification).

23

Clearly, if the Court must view a pre-certification class settlement with skepticism, a

24 settlement reached before a lawsuit was even filed merits the greatest possible judicial care to

25 protect absent class members. Now that Denise Williams has offered her testimony, there can be

26 no serious doubt that the settlement before the Court is lawyer-driven. see Ex. A. No current or

27 former African-American or Latino FAs were present or participated in the negotiations. Id.

28 More importantly, before a settlement in principle was reached, no current or former African-

6

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 12 of 30

1 American Financial Advisor were apprised of or approved its terms. Id.

2

Before the Court is a group of approximately 30 African-American FAs (including class

3 members who opted out) who would have proudly served as class representatives and devoted

4 their personal experiences and collective minds to negotiating fair compensation and injunctive

5 relief for their colleagues. No lawyer would credibly argue that the settlement negotiations would

6 not have been enhanced with client participation.

7

Thus, the question this case presents is whether Rule 23 authorizes lawyers to negotiate

8 and settle the class action lawsuit that has not been filed, without the participation or consent of a

9 client.. The Objectors respectfully suggest that clients are essential to Rule 23 and that the class

10 was irreparably short-changed when lawyers met and negotiated class claims without the

11 assistance of a steering committee of (or any) interested class representative who were present

12 and willing or able to participate in the negotiations. To allow otherwise would only further the

13 public’s distrust for the legal profession by sanctioning the wholesale settlement of claims

14 without requiring bargained-for exchange between real parties of interest.

15 A. Lawyers Are Not A Substitute For Clients.

16

Denise Williams’ declaration leaves undisputed the fact that Morgan Stanley and lawyers

17 spent months negotiating a class action lawsuit, before it was filed and without any client

18 participation, consent or involvement. See Ex. A, Williams Dec. Clients, of course, are essential

19 to every lawsuit because they bring both good and bad to the discussion and only resolve claims

20 following compromise by both sides and a bargained-for exchange. Most lawyers would agree

21 that it would be easier to win a motion without opposing counsel present for the argument and

22 likewise easier to settle a case if the lawyer could just make the decision that the lawyer thought

23 was in the best interest of the client. Our system does not work this way because clients, not

24 lawyers, own their claims.

25

While one could make an argument that class counsel (post-class certification) may have a

26 different duty than non-class lawyers in protecting the interests of the class, the law does not

27 authorize a lawyer to negotiate a settlement for a putative class against the wishes of the only

28 client who hired that lawyer and then search to substitute another client in the first client’s stead,

7

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 13 of 30

1 all without ever filing a lawsuit, let alone litigating the lawsuit or seeking class certification.

2 There is nothing in the law that authorizes the approach of a settlement with a plaintiff-to-be3 named-later approach.4

4

The analytical approach of just skipping the question of how the deal was struck and

5 conducting a post-hoc review of the result might seem reasonable. But that analytical framework

6 entirely misses the mark. To extinguish the rights of absent class members, Rule 23 requires not

7 only adequacy of counsel but also adequate class representation – two very different things.

8 Here, the lawyers met and resolved a class claim without the knowledge or consent of their only

9 client at the time, Denise Williams. As a result, we will never know what agreement would have

10 resulted had Morgan Stanley been forced to debate and negotiate with their real opponents,

11 African-American FAs. For the fifteen reasons identified below, the Objectors believe that the

12 outcome would have been different and that the class was unlawfully and irreparably denied the

13 rightful representation it deserved under Rule 23. Because these matters are of substance, the

14 Court should deny class certification and final approval to the Settlement and require Morgan

15 Stanley to engage in settlement discussions with the direct involvement of class members.

16

B. The Lack of Clients Resulted In An Inadequate and Unfair Settlement

17

The Objectors set forth below some of the deficiencies they believe would have been

18 addressed had informed and engaged class members who suffered first-hand from Morgan

19 Stanley’s discriminatory practices been involved in the negotiations.

1. The Objectors would have brought a healthy skepticism and distrust of Morgan

20

Stanley and would have required lasting and meaningful Court involvement and

21

supervision.

22 4 This is not a situation where plaintiffs actively negotiated the settlement and decided not to 23 participate or the replacement of a class representative post-certification. The cases plaintiffs cite
where courts approve late substitution of the named plaintiff are inapposite. In both cases, the 24 class had been certified, and class counsel appointed, for a considerable period of time prior to
the settlement. See Olden v. LaFarge Corp., 472 F.Supp.2d 922, 937-39 (E.D. Mich. 2007), 25 citing Moore's Federal Practice § 23.25 (court may substitute a new representative after class
certification); Heit v. Van Ochten, 126 F.Supp.2d 487, 494 -495 (W.D. Mich. 2001). In addition, 26 the named plaintiffs backed out only after voicing approval of the settlement. In other words, in
those cases, the class had an active representative throughout the process who, at least initially, 27 approved of the settlement. Here, class counsel acted alone during the negotiations, and the sole
named plaintiff objected to the terms of the settlement.
28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 14 of 30

1

Most of the important legal gains in civil rights for employees, as with other aspects of

2 society, have been achieved with ongoing, active court supervision. The Settlement does not

3 require Morgan Stanley to provide any reporting to the Court regarding its progress, or lack

4 thereof, in increasing the representation, tenure, compensation, and membership in management

5 of African-Americans and Latinos. Worse, the Settlement seeks to strip this Court of jurisdiction 6 and prohibits class members from seeking to enforce the terms of the Settlement.5 All disputes

7 can be raised only by class counsel and only in confidential, binding arbitration rather than before

8 this Court. See Stlmt. at 46.

9

The Objectors would have insisted that Morgan Stanley submit regular reports to the

10 Court and that the Court retain jurisdiction over the Settlement to ensure its enforcement and hear

11 disputes. Compare Smith v. Nike Retail Services, No. 03-9110 (N.D. Ill. 2006)

12 http://www.nikediscrimination.com/NikeConsentDecree.pdf (race discrimination settlement

13 requiring data compilation and analysis, reporting to court at 6 month intervals; court maintains

14 jurisdiction over parties and settlement to enforce terms and ensure relief); Roberts, et al. v.

15 Texaco, No. 94-2015, 1997 U.S. Dist. LEXIS 23848 (S.D.N.Y. Mar. 21, 1997) (grants EEOC

16 right to enforce and court jurisdiction over parties and race discrimination class settlement to

17 enforce terms). Having seen Morgan Stanley introduce many “diversity” initiatives that failed to

18 make any positive impact, the Objectors firmly believe that court involvement and oversight is an

19 essential ingredient of success.

2. The Objectors would have required Morgan Stanley to agree to concrete,

20

measurable goals and timetables to remedy its discriminatory practices.

21

The Settlement does not require Morgan Stanley to remedy its systemic race

22

23 5 The Settlement limits prosecution of enforcement of its terms to Lead Class Counsel or Morgan 24 Stanley, and expressly precludes “third parties,” including class members, from attempting to
enforce any terms of the agreement. Stlmt., at X.A. This agreement was negotiated on behalf of 25 a nationwide class of current and former Morgan Stanley employees and seeks to impose policies
that will continue to affect Morgan Stanley employees for a period of at least five years. Class 26 members and others affected by the Settlement should have standing to seek to enforce its modest
terms. Moreover, due to the important issues at stake in this case, which affect thousands of 27 employees, disputes regarding the enforcement of an agreement should be governed and resolved
by this Court, and not in a private arbitration proceeding.
28

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1 discrimination. Morgan Stanley need not hire or promote a single African-American, or achieve

2 any measurable results in terms of eliminating, or narrowing, the racial disparities in

3 compensation, retention, hiring, teaming, and promotion. Morgan Stanley has agreed only to use

4 its “best efforts” and to retain experts to study and make proposals regarding these issues, which 5 Morgan Stanley can then adopt, water down, or ignore altogether.6

6

Given Morgan Stanley’s long history of discrimination, the Objectors would have been

7 skeptical of the Firm’s willingness or ability to voluntarily understand and resolve its entrenched

8 racial discrimination. They would have therefore required the same types of measurable, concrete

9 goals and timetables established in other employment discrimination class actions. See, e.g.,

10 Martens et al. v. Smith Barney, No. 96-3779, 1998 U.S. Dist. LEXIS 17666 (S.D.N.Y. Jul. 24,

11 1998) (gender discrimination class settlement against brokerage firm that set hiring and

12 promotion goals and timetables and provided financial penalties for failure to meet goals).

13

The Objectors would not have authorized the selection of the same industrial

14 psychologists commissioned by the Augst-Johnson settlement to study gender issues to also study

15 and make proposals regarding issues facing African-American FAs. Nor would the Objectors

16 have agreed to experts who routinely represent and testify for defendant-employers in class action

17 employment discrimination lawsuits.

18

The role of the experts in this Settlement is central. Although Dr. Kathleen Lundquist is

19 an accomplished expert, she has defended employers’ policies in cases such as McReynolds v.

20 Sodexho, a race discrimination class action settled for $80 million, in which the consent decree

21 required the defendant to dismantle practices that “barred meaningful advancement for its black 22 employees for years.”7 Dr. Lundquist is currently an expert for the defense in the nationwide race

23 discrimination case, Employees Committed for Justice v. Eastman Kodak, 407 F. Supp. 2d 423

24

25 6 Moreover, the vast majority of the Programmatic Relief will occur under the terms of the Augst-

26

Johnson Settlement, regardless of the outcome of this case 7 “Sodexho Set for Overhaul After Lawsuit”. Workforce Management, June 08, 2005.

27 (available at http://www.workforce.com/section/00/article/24/07/43.html)

28

10

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 16 of 30

1 (W.D.N.Y. 2005). The allegations in this case are severe and shocking. After a four-year

2 investigation, the EEOC concluded that Kodak’s African-American employees suffered pay and

3 promotion disparities and a shockingly hostile work environment, and over 700 complaints of

4 racial discrimination were reported. Id; see also Puffer v. Allstate, Case No. 04-5764 (N.D.

5 Ill.)(Lundquist serving as defense expert supporting employer’s policies and culture despite

6 statistically significant compensation disparities).

7

Victims of discrimination tend to credit others who allege similar practices, and class

8 members would likely have preferred an expert not currently working to defend other firms

9 accused of discrimination. There are a wealth of academics who have devoted their careers to

10 addressing these important issues who are not litigation consultants and who would have instilled

11 confidence in both sides. The Objectors are also concerned that Dr. Lundquist lacks financial

12 services experience so will need to invest substantial time learning about the firm and the industry

13 before her work can begin in earnest.

3. The Objectors would have insisted on transparency and disclosed all relevant

14

information about the Settlement and its terms to class members so they could

15

understand and properly evaluate the Settlement in order to decide whether to

participate, opt-out or object.

16

Class members have been denied access to key information necessary to make informed

17 decisions regarding their own options and to provide well-informed, meaningful input to the

18 Court about the Settlement. First, the class has been denied access and the opportunity to review,

19 understand and critique the proposed Account Distribution Policy and Power Ranking, which

20 have been filed under seal, despite the fact they are to be published and provided to every FA at

21 the Firm.8 Class members’ experiences bear directly upon the effectiveness of any proposed

22 policy revisions and they may have important information to help the Court understand and assess

23 the impact of these policies. The Court cannot effectively review the policy without fully

24

25
26 8 Morgan Stanley offers no logical rationale for refusing to show the Power Rankings to class members prior to final approval of the Settlement. Had their been any real interest to adopt a
27 policy that was fair and responsive to the complaints of African-Americans, there would be no reason to hide the policy from its beneficiaries.
28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 17 of 30

1 informed input from class members.

2

The vast majority of class members are also likely unaware of Morgan Stanley’s

3 duplicitous, simultaneous negotiations with the Moore Group and Jaffe counsel, including its

4 failure to disclose to Jaffe counsel the existence of a large group of putative class members

5 concerned with the same issues challenged in this lawsuit. This is no small point given that the

6 Settlement requires reliance on the good faith of Morgan Stanley.

7

In addition, class members, even named plaintiffs, have been denied access to Morgan

8 Stanley’s workforce data and damages calculations so they can provide information for the

9 Court’s consideration of the sufficiency of the Settlement’s monetary relief, the appropriate scope

10 of class member releases, and whether a conflict exists between African-American and Latino

11 class members. See Docket No. 129. Without access to the above information, Class members

12 cannot therefore make informed decisions about whether to participate or opt out nor can they

13 provide the Court with complete objections based on all relevant facts.

14

4. The Objectors would not have approved a Power Ranking for account

distributions because of the historical and ongoing discrimination against African-

15

Americans and women at Morgan Stanley.

16

The Settlement’s “new” account distribution policy and Power Ranking will not reform

17 the Firm’s discriminatory account transfer practices but will only serve to institutionalize the

18 discrimination and widen the current client base and compensation gap between African-

19 Americans and other FAs.

20

Although a new policy and Power Ranking was established under the Augst-Johnson

21 gender settlement and has been instituted by Morgan Stanley, these policies have not been

22 disclosed to class members. The Objectors understand that the “Power Rankings” still

23 improperly rely on factors tainted by discrimination in order to determine an FA’s ranking to

24 receive lucrative account distributions. Because of preferential and discriminatory account

25 assignments and partnerships, among other things, non African-American FAs have substantially

26 larger books of business and revenue production. As a result, they will fare better under the

27 Power Ranking, ensuring that African-Americans will lose out in future account distributions.

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 18 of 30

1 The Objectors would not have agreed to a policy that locks white men at the top of the rankings

2 and rewards them for past and ongoing discrimination.

3

Other Wall Street firms have grappled with issues regarding equal opportunities in

4 account distributions for years. One firm, UBS PaineWebber, recently agreed to the random

5 distribution of accounts to tackle the problem. The Objectors offer the Court one explanation of

6 why a power ranking will never work. No rational person could assert that race discrimination

7 does not exist in society. A simple example is helpful to explain. Suppose a manger gave a

8 presentation to a group of prospective clients. At the end of the presentation, the manager

9 directed the group to either of the two FAs sitting at the back of the room to open an account.

10 One FA is African-American, and the other is a white male. The prospective customers know

11 nothing else about these persons, although in fact the African-American FA graduated from

12 Stanford and has been with the Firm for 20 years, while the white FA has no college degree and is

13 a rookie FA. If at the end of this experiment, the white broker signed up double the number of

14 clients, the Objectors would argue that Morgan Stanley has isolated a near-perfect measure of

15 racism in society. Under the Power Ranking, however, Morgan Stanley would simply label and

16 reward the white broker for being “better” at developing new business. A Power Ranking

17 punishes African-Americans for societal racism and rewards white brokers for the same. This is

18 the kind of debate that the Moore Group began and would have continued with Morgan Stanley to

19 determine how to devise an equitable system of account distributions.

20

Morgan Stanley’s decision to step aside from this debate and to instead work with lawyers

21 from whom Morgan Stanley hid the existence of the Moore Group is shameful. Clearly, Morgan

22 Stanley preferred the Power Ranking because it would not disturb the status quo and would allow

23 Morgan Stanley to guarantee that its top producing white male FAs would continue to receive the

24 lion’s share of distributions. The Court will never know how the Power Ranking worked because

25 there is no obligation on the part of Morgan Stanley to report the results to the Court.

26

5. The Objectors would never have agreed to a Settlement that did not reform

partnerships, or teams of FAs, which work to the huge disadvantage of African-

27

Americans.

28

13

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 19 of 30

1

Any settlement that does not seriously reform Morgan Stanley’s team policies will

2 accomplish little in terms of improving the outcome for African-American FAs. The Settlement

3 not only fails to meaningfully modify the Firm’s teaming policies or ensure African-Americans

4 inclusion in favorable teams, it aggravates the disparate impact of the teaming policies by

5 codifying and prohibiting from challenge the cumulative advantage created by these segregated 6 teams.9

7

For example, the Settlement expressly provides that assets of retiring brokers who have

8 been in a “team” for two years do not pass through the power ranking system.10 The Objectors

9 would not have allowed this end-run around the account distribution policy, which permits white

10 men to select their successors and “team” for the last two years of their employment in order to

11 transfer assets. To illustrate, if a high producing FA decides to retire rather than leaving Morgan

12 Stanley’s employ, he often teams for two years with another FA who, in essence, buys the book

13 over two years by working it and giving the high producer a cut of the production. African-

14 Americans are excluded from these types of arrangements due to racial bias. The Objectors

15 would have made sure that counsel understood and rejected this practice as unlawful, as it is the

16

17 9 The Settlement expressly codifies the discriminatory practices of (1) allowing accounts to 18 transfer through partnerships rather than according to ranking or through the account distribution
policy, see Stlmt. at VII.D.5, and (2) allowing FAs to garner points under the Power Ranking 19 system for assets received through partnerships, and not developed from their own efforts, see id.
at VII.D.5.c. Because African-Americans do not receive these “gifts,” they are at a competitive 20 disadvantage.
10 The sole limitation proposed on partnership transfers is that a partnership be in place for two

21 years before distribution of an entire book to remaining partners upon the retirement of one

partner. Stlmt., at 26. Two years is not a long time to wait to inherit a substantial book of 22 business, and is less than many firms require. This rule will not curb the frequent “gaming” of

23

the partnership system, e.g. the use of 98% -2% ownership interests, or a partnership where the retiring partner remains employed but seldom comes into the office while the team waits for the

24 two years to pass. In short, the two-year requirement will have no impact on the discriminatory operation of sham partnerships to deny African-Americans access to quality accounts and high
25 net worth clients. The ineffectiveness of this proposal is illustrated by the failure of a similar

policy that has been in place for years at another firm; this firm’s even longer 3-year wait period 26 has not improved the discriminatory operation of partnerships on African-Americans. See Ex.

27 145-21. McReynolds et al. v. Merrill Lynch Complaint, Case No. 05-C-6583 (N.D. Ill.), at 14, 15 (regarding impact of partnerships).

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 20 of 30

1 single greatest contributor to the exclusion of African-American FAs from account transfers.

2

Morgan Stanley has not been forthcoming about teams in its statements to this Court and

3 to class counsel. Teams are a firm-wide initiative promoted at the highest levels of Morgan

4 Stanley. See, e.g., Docket 145-6, at ¶¶ 12-21; 145-7, at ¶¶ 19-28; 145-8, at ¶¶ 26-37; 145-9, at ¶¶

5 18-20. FAs are strongly encouraged, and sometimes pushed, to be on teams, and managers are

6 trained to facilitate the formation of teams. Id. Most importantly, all teams must be approved

7 by management, which also presides over team dissolutions. Id. In the collective experience of

8 the Objectors, management is intimately involved in the formation of, and frequently arranges,

9 teams. Id.

10

Because they lacked class member involvement, class counsel relied upon on Morgan

11 Stanley’s misrepresentations that there were no teaming policies and that nothing could be done

12 about teams and tailored the Settlement accordingly. As class counsel explained to this Court:

We looked at Injunctive relief in partnerships from the perspective of if we win what

13

can we do about it? And what we concluded was it wasn’t a company policy and we

14

wouldn’t be able to get direct injunctive relief about this. This isn’t Shelly versus

Kramer where the company giving approval, but they’re saying you can’t have a

15

partnership with people of different colors. … so we were cognizant of it, but we did what

we thought we could, but still something that we don’t think we could do if we litigate it.

16

12/4/07 Tr. at 69, 81 (emphasis added).

17

Again, Morgan Stanley was not forthcoming. As Morgan Stanley is well aware, the

18 EEOC and at least one federal court have determined that the Firm does have teaming policies

19 and that those policies may constitute discrimination under the civil rights laws. In July 26, 2006,

20 after an investigation, the U.S. Equal Employment Opportunity Commission (“EEOC”), found

21 reasonable cause to believe that Morgan Stanley's policy of allowing financial advisors to

22 subjectively choose partners for lucrative agreements resulted in a female FA being unlawfully

23 denied a partnership because of her sex. See Ex. H, EEOC Cause Finding; Ex. F Dodson Article.

24 In denying Morgan Stanley summary judgment, a federal court agreed that a jury could find the

25 Firm’s teaming practices discriminatory. Dodson v. Morgan Stanley DW, Inc., No. 06-5669,

26 2007 U.S. Dist. LEXIS 85535 (W.D. Wa. Nov. 8, 2007)..

27

The Objectors would not have accepted that there can be no equitable relief of Morgan

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 21 of 30

1 Stanley’s teaming policies. Again when one looks at the history of gains in the civil rights

2 movement, there are parallels. For example, male police officers feared partnering with female

3 officers thirty years ago. Perhaps they worried that their wives would object or thought that

4 women partners increased danger, but the law did not allow police officers to team only men with

5 men. Today, virtually every police department in the country is integrated by gender due to the

6 hard work of the Justice Department and the unwillingness of the law to accept that the personal

7 preferences of some employees trumps the equal employment rights of others.

8 Similarly, many employers, including law firms, assign teams of employees to work on various

9 clients and matters, and Morgan Stanley could certainly do the same. If segregated teams are the

10 result of racial preference among employees, Morgan Stanley cannot permit, let alone promote,

11 teams. Morgan Stanley’s policies could similarly be revised so as not to reward FAs in teams by

12 including team assets in their power ranking. Without a meaningful solution to the problem of

13 teams, the Settlement will not improve the outcome for African-American FAs.

6. The Objectors would have understood and been empathetic to the plight of

14

African-American class members, who are frequently isolated and excluded at Morgan

15

Stanley, and tailored appropriate injunctive relief.

16

It is likely that only an African-American FA who has worked as the “only” African-

17 American in his office would be in a position to explain why some of the proposed diversity

18 initiatives will not work or will create additional problems.

19

As a result, when crafting proposals, the Objectors would have taken into careful

20 consideration the heightened scrutiny, exclusion and isolation faced by most African-American

21 FAs at Morgan Stanley. For example, in attempting to “reform” the account distribution policies,

22 the Settlement does not require that information regarding account distributions be published but

23 requires an FA to ask his manager to review supporting documentation (albeit limited

24 information) regarding account distributions. Managers play important roles in branch offices, as

25 they implement Firm-wide policies and distribute valuable resources and opportunities.

26 Therefore, even if they believe the rules are not being followed, many African-American FAs

27 already feel as if they are under a microscope and would be reluctant to challenge management’s

28 decisions for fear of retaliation or being branded a “troublemaker.” See Ex. J, Barnett Dec.

16

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 22 of 30

1 (explaining difficulty and strain of relationship with manager when asked for information

2 regarding account distribution).

3

The Objectors would have insisted that full information about account distributions be

4 published and available to all FAs in the office. There is precedent for such a policy as the class

5 reps in the Cremin v. Merrill Lynch class action insisted upon such a provision so account

6 distributions could be studied for fairness.

7. The Objectors would have calculated the damages suffered by the class to

7

properly measure the losses suffered by class members and to value and include all

8

recoverable damages.

9

Had class members been involved in negotiating the Settlement, they would have insisted

10 on a class damages calculation that valued all damages recoverable under the law, for all class

11 claims. The civil rights laws provide substantial “make-whole” relief for victims of

12 discrimination. Albermarle Paper v. Moody, 422 U.S. 405, 419 (1975). To further the goals of

13 Title VII and Section 1981, backpay is presumptively due to prevailing plaintiffs. See EEOC v. 14 O&G Spring, 38 F.3d 872, 880 (7th Cir. 1994); 42 U.S.C. § 2000e-5(g)(1). Section 1981

15 plaintiffs may seek unlimited damages for emotional distress and punitive damages, unlike Title

16 VII plaintiffs whose compensatory damages are capped. See, e.g., Zhang v. Am. Gem Seafoods,

17 Inc., 339 F.3d 1020, 1044 (9th Cir. 2003). Front pay is allowed, Williams v. Pharmacia, 137 F.3d

18 944, 951-52 (7th Cir. 1998), and wage losses also may include lost fringe benefits, such as

19 retirement benefits, health insurance costs and other compensatory amounts. See, e.g., Taxman v.

20 Bd. of Educ. 91 F.3d 1547, 1552 (3d Cir. 1996).

21

Toward establishing the adequacy of the $16 million common fund, plaintiff’s counsel

22 argued that the maximum possible damages the class could ever recover was $36 million.

23 Transcript, Docket No. 131, at 13. Plaintiff’s counsel recently disclosed that its $36 million

24 damages calculation was based on a simplistic “compensation shortfall” analysis, which captures

25 wage differentials for current employees and thus measures earnings disparities only for the

26 period during which class members worked at the Firm. See Motion For Leave To File Under

27 Seal, Docket No. 132, at 2-3; Docket No. 133, Finberg Dec., at ¶¶ 2-3; Docket No. 145-2.

28 Goldman Dec. It does not appear that plaintiff’s counsel made any attempt to value losses based

17

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 23 of 30

1 on account transfers lost as a result of the Firm’s discriminatory account distribution and teaming

2 practices, nor did they value the loss of opportunities to join management.

3

The compensation shortfall damages calculation does not capture the losses of class

4 members or the damages recoverable as a matter of law. In addition to failing to consider the

5 possibility of punitive or compensatory damages, class counsel’s approach omits all post-

6 employment losses, including post-employment backpay and front pay. Thus, although the

7 proposed settlement requires class members to release termination claims due to low production,

8 the damages calculation did not value losses that result from termination, which can be

9 catastrophic. Docket No. 87-2, Notice at 13. The undervalued losses from termination are

10 acutely felt by African-American class members, who suffer an extremely high rate of attrition.

11

The compensation shortfall analysis similarly undervalues the claims of currently

12 employed African-American class members by excluding front pay. Due to the denial of

13 resources and opportunities, African-American FAs who survive at Morgan Stanley are

14 disproportionately grouped in the lower range of client assets, production and income levels as

15 compared to Caucasians and Latinos. See, e.g., Ex. 6; Ex. 7. Therefore, a compensation shortfall

16 analysis that ends in 2007 will not accurately determine the harm that will be suffered in the

17 future by tenured African-American FAs. Any damage model must include front pay to value the

18 ongoing cumulative disadvantage to African-American FAs.

19

Jaffe counsel also offer no explanation for why the Settlement model did not include

20 emotional distress damages. Here again, the involvement of class members in the discussion

21 would have caused counsel to better understand and include this element of damages in the

22 discussion.

23

8. The Objectors would have insisted upon a higher financial recovery to the class.

24

The Objectors would never have agreed to extinguish the claims of 1,300 class members

25 in exchange for a class fund that averages $12,000 per class member for losses over a five-year

26 class period. Class members have suffered substantial losses as a result of Morgan Stanley’s

27 discrimination, particularly given that an average Morgan Stanley FA earns annual compensation

28 of well over six figures.

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 24 of 30

1

Indeed, Morgan Stanley recently agreed to settle an individual discrimination lawsuit

2 brought by a Financial Advisor based in part on management’s exclusion of the plaintiff from a

3 lucrative partnership in favor of a male FA. See Ex. G, Dodson v. Morgan Stanley DW, Inc.

4 Article. Dodson’s sex discrimination claims are nearly identical to the race discrimination claims

5 of many members of the class, and her recovery of $750,000 at the settlement stage demonstrates 6 the insufficiency of the Settlement’s monetary relief.11 As the cases cited by the Moore Group 7 demonstrate, the $16 million settlement fund pales in comparison to that in similar class cases.12

8

9. The Objectors would have asked class members to release claims for which they

were not being compensated, including termination and promotion claims.

9 Having only sought damages for the limited wage claims captured by a “compensation

10 shortfall” analysis, class members should release claims for only the limited wage losses and

11 claims captured by this analysis. Class members should not be required to release claims or

12 damages not included in the compensation shortfall analysis that was the starting point for

13 negotiations or claims for which they are not being offered compensation, including claims for

14 termination, denial of promotion, emotional distress, punitive damages, front pay and others not

15 sought by the class.

16

10. The Objectors would not have allowed special treatment of any class

17
18 11 Sumner v. Merrill Lynch Arbitration Award ($2.2 million awarded to individual FA in sex discrimination case); Hardin v. Merrill Lynch ($501,979 award); Marcus v. Merrill Lynch
19 ($558,000 award); Twombly v. Merrill Lynch ($210,000 award); Wyatt v. Merrill Lynch ($284,712 discrimination award); Zubulake v. UBS Warburg LLC, No. 02-1243 (S.D.N.Y. 2005)
20 (jury awarded $29 million in compensatory and punitive damages to equities broker terminated for reporting gender discrimination); Sojaji v. Merrill Lynch & Co. (NASD panel awarded
21 $400,000 in compensatory damages and $1.2 million in punitive damages to broker fired because of his race). See Docket No. 145, Exs. 13-17, 21-22.
22 12 See, e.g., Cremin v. Merrill Lynch, Docket No. 145, Ex. 11 ($200 million paid to resolve claims 23 of class members); Martens v. Smith Barney, Docket No. 145, Ex. 25. See also Roberts v. Texaco,
Inc., No. 94-2015, 1997 U.S. Dist. LEXIS 23848, at *4 (S.D.N.Y. Mar. 21, 1997) (class of 24 salaried African-American employees attained a settlement valued at over $193 million, with
average awards in excess of $63,000, along with pay equity corrections (i.e., raises) averaging 25 more than 11%, a benefit valued at more than $4 million in the first year alone); Ingram v. The
Coca-Cola Co., 200 F.R.D. 685, 688 (N.D. Ga. 2001) (African-American salaried employees 26 settled for overall value of $176 million and received guaranteed cash awards averaging $38,000
per class member, as well as $10 million bonus fund for class members promoted during next ten27 year period and a pay equity provision worth $43.5 million in employee raises).

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 25 of 30

1

representatives.

2

The Objectors would have required that class representatives be willing to stand in the

3 shoes of absent class members so that they could fairly evaluate the Settlement. They would not

4 have permitted any class representative to be compensated for their non-class claims from the

5 common fund established to compensate class members for class claims. The $125,000 paid to

6 Curtis-Bauer for her time-barred, non-class claims is likely 10 times what she will receive for

7 filing a claim and created an improper incentive for her to rubber-stamp the settlement that had

8 been negotiated before she joined the lawsuit. This irreconcilable conflict of interest gave Curtis-

9 Bauer little incentive to critically assess the Settlement, and provides class members with no

10 confidence that Curtis-Bauer was acting in the best interest of the class.

11. The Objectors would not have agreed to a single class of African-Americans and

11

Latinos, particularly with a single common fund to be distributed by a single formula.

12

The Objectors do not believe that the experiences and discrimination suffered by African-

13 Americans and Latinos at Morgan Stanley are the same, and they would not have agreed that they

14 be joined in a single class. Nor would the Objectors have considered a Settlement affecting the

15 rights of Latinos without a Latino class representative.

16

African-Americans and Latinos are treated differently and have different outcomes and

17 opportunities at Morgan Stanley. Latinos have access to markets where they need not compete

18 with Caucasian FAs; African-Americans do not. See, e.g., Docket Nos.145-6, at ¶¶ 3-9. The

19 Objectors also understand that Latinos do not face the same barriers regarding teams. Id. As a

20 result, Latinos will likely fare better on the Power Ranking. Thus, there is an antagonism

21 between the groups, as Latinos out-earn African-Americans and the two groups compete for

22 resources and opportunities. The Settlement’s establishment of a single fund allocated by a single

23 formula that appears to favor Latinos over African-Americans, due to their higher attrition rates,

24 also creates an actual conflict between the groups.

25

More importantly, the Objectors strongly believe that when Wall Street firms consider all

26 minorities “diverse” and do not focus on the unique issues facing any particular group, the

27 probability of fixing the problems is substantially reduced. African-American and Latino FAs

28

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Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 26 of 30

1 face different impediments in the marketplace and the workplace. The Objectors believe that just

2 as women were in a separate class with initiatives designed to address their issues, the same

3 should have been done for African-American FAs. The idea that the problems are the same

4 because the compensation shortfall shows losses that are “close enough” is naïve, and debunked

5 by the differences in attrition rates.

12. The Objectors would have been typical plaintiffs who bring with them what some

6

may consider unreasonable expectations.

7

As the Court has acknowledged, the monetary relief offered to class members is low, the

8 Objectors believe extraordinary low, in relation to the class members’ losses. The plaintiffs’

9 lawyers justify this low dollar amount by asserting that this case is about change and offering the

10 programmatic relief as the Settlement’s centerpiece. However, the overwhelming majority of

11 class members are former employees who suffered catastrophic career losses due to

12 discrimination. They will not benefit from the diversity initiatives and had a right to participate in

13 the dialogue of whether their claims were traded off for injunctive relief. Alternatively, they

14 might have insisted that the fund get distributed differently. Oddly, under the plan for

15 distribution, a current employee who has been with the Firm since 2002 will get the benefit of the

16 initiatives and more money than a class member who suffered career-ending losses. Again, this

17 debate never took place because no plaintiffs were in the negotiating room. In two similar cases

18 (Martens and Cremin), there were 20 and 8 class representatives in the negotiating room, and the

19 end-result was agreement as to alternative dispute resolution process whereby claims would be

20 treated individually so that any monies paid by the Defendant would be paid to the most serious

21 claims.

22

13. The Objectors would have insisted that Morgan Stanley guarantee class

members, and all employees, access to the courts for civil rights claims.

23

The Objectors would have insisted that the Firm agree not to institute mandatory

24 arbitration during the period of the Settlement and consent decree. One of the most meaningful

25 reforms brought about by litigation in the 1990s against Wall Street firms was the end to

26 mandatory arbitration of civil rights claims. Most employees of retail brokerage firms now have

27 the right to pursue their civil rights claims in the courts with full due process rights. Any

28

21

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 27 of 30

1 meaningful settlement should include Morgan Stanley’s agreement not to force mandatory

2 arbitration of civil rights claims for at least the duration of any consent decree in this case. Any

3 progress made as a result of access to the courts will be lost if the right to pursue one’s civil rights

4 in a court of law are lost.

14. The Objectors would have ensured that the class received adequate notice and

5

full information about the Settlement and its negotiations.

6

So that all class members would have an opportunity to carefully weigh their options and

7 critically assess the Settlement, the Objectors would have insisted on effective notice and full and

8 fair disclosure of all important information regarding the history of the lawsuit, the Settlement

9 and its negotiations. As an initial matter, the Objectors question how many class members

10 actually received the Notice and had the opportunity to learn of and act upon their rights in this

11 Settlement. For a class that dates back nearly six years, and given the extraordinarily high

12 attrition rates of class members, the last known addresses maintained by Morgan Stanley may not

13 be accurate. Indeed, the Objectors are aware of many class members who did not receive the

14 Notice, which does not appear to be contained or referenced on the websites of plaintiffs’ counsel.

15 See, e.g., http://www.lieffcabraser.com/class_notices.htm

16

Even class members who received the Notice did not have access to full and complete

17 information regarding the case. The Notice repeatedly refers class members to a website for

18 additional information, including case pleadings.13 See Notice, at pages 1, 15, 16. That website,

19 however, has never been activated. A class member who enters the website is taken to a site that

20 simply says “Text to come.” See Ex. B. Additional notice and time for class members to act is

21 warranted under the circumstances.

22

Class members are likely not aware of the history of this lawsuit and its negotiations, or

23 the parallel negotiations of the Moore Group. The class will not know that the named plaintiff

24 Denise Williams is opposed to this Settlement and has opted out, or that the class was represented

25
26 13 The name of the case was also changed in the Notice to Curtis-Bauer v. Morgan Stanley, rather than using the Jaffe moniker that may be known to class members, which may have been
27 confusing and precluded class members from accurately performing internet or other research on the case.
28

22

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 28 of 30

1 by a person involved in the case for, at most, one week prior to the execution of a Settlement.

2 Had class members known of these, or other facts or objections, they may have made different

3 choices, and may have objected or chosen to opt out of the Settlement.

15. 4

The Objectors would have known of Ledbetter v. Goodyear Tire.

As this Court is aware, the Supreme Court’s decision in Ledbetter v. Goodyear Tire, 127 5

S.Ct. 2162 (2007), has resulted in employers arguing that each paycheck does not trigger a new 6

violation. Morgan Stanley does not dispute the statistically significant compensation disparities 7

between white and African-American FAs. If Ledbetter were not the law, Jaffe class members 8

could continue to fight for equal wages with each paycheck that resulted in lower pay. Thus a 9

settlement in 2008 would not bar an African American FA from brining a suit in 2009 for 10

paychecks received that year due to conduct in 2008. Following Ledbetter, however, Morgan 11

Stanley will no doubt argue in defense of a class member’s compensation claim brought in the 12

year 2009 that the FA released and cannot recover for the discrimination that occurred in the class 13

period even if that discrimination resulted in continued lower wages. It is in this light that the 14

$16,000,000.00 common fund must be judged. The $16,000,000.00 is not fair, adequate or 15

reasonable to compensate past, present and future wage loss and retirement losses caused by the 16

discrimination during the class period. This amount never would have been accepted by a 17

thoughtful, committed group of African-American FAs representing the class. 18

C. Other Indicia Of Inadequacy Of Settlement 19

Perhaps the most telling evidence of the inadequacy of this Settlement is that none of the 20

law firms who represent the class appear to be very proud of it. Lead counsel Lieff Cabraser does 21

not include this case or Settlement under the list of cases on its website, although other 22

employment cases are prominently displayed, along with press releases and links to additional 23
information and websites.14 The other law firms’ websites similarly contain little mention or 24

additional information about the case, nor do they provide class members with any information 25

about their rights under the Settlement. 26

27 14 See http://www.lieffcabraser.com/current_cases.htm. 28

23

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 29 of 30

1

While the Notice to class members from the Court included repeated references to a web

2 site that exists to help class members understand their rights, the only information on the class

3 website, racecaseagainstMorganStanley.com is the words “text to follow.” See Ex. B. The

4 Objectors hope and pray for relief for the class and that the “text to follow” will be an Order from

5 this Court denying class certification and final approval to the settlement.

6

REQUEST TO APPEAR AND BE HEARD

7

The Objectors respectfully request that their counsel and certain members of their group

8 be permitted to appear at the Fairness Hearing and present their objections to the Court on their

9 behalf.

10

CONCLUSION

11

Because there is opposition to the settlement and it was not the product of a bargained-for

12 exchange between the clients, the Court should deny final approval to the Settlement and require

13 Morgan Stanley to negotiate with a steering committee of victims who undertake (without

14 promise of special treatment) to represent the class alongside their lawyers.

15

16

17

18

19

20

21

22

23

24

25

26

27

28

24

Case 3:06-cv-03903-TEH Document 161 Filed 04/28/2008 Page 30 of 30

1

2

Respectfully submitted,

3 Mary Stowell /s/ (pro hac vice)
4

5

STOWELL & FRIEDMAN LTD.

6

7

Robert Nelson /s/

8

NELSON LAW GROUP

9

10 ROBERT S. NELSON (SBN# 220984)

11

NELSON LAW GROUP 900 Cherry Avenue, Suite 300

12

San Bruno, CA 94066 (650) 794-2760 (phone)

13

(650) 794-2761 (fax) rnelson@nelsonlawgroup.net

14

15 Mary Stowell (pro hac vice) Linda D. Friedman (pro hac vice)
16 STOWELL & FRIEDMAN LTD 321 S. Plymouth Court
17 Suite 1400 Chicago, Illinois 60604
18 (312) 431-0888

19

20

21

22

23

24

25

26

27

28

25

 
 Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 1 of 6

1 ROBERT S. NELSON (SBN# 220984) NELSON LAW GROUP
2 900 Cherry Avenue, Suite 300 San Bruno, CA 94066
3 (650) 794-2760 (phone) (650) 794-2761 (fax)
4 rnelson@nelsonlawgroup.net

5 MARY STOWELL (Pro hac vice)

6

LINDA D. FRIEDMAN (Pro hac vice) SUZANNE E. BISH (Pro hac vice)

7 STOWELL & FRIEDMAN LTD 321 S. Plymouth Court, Suite 1400

8 Chicago, Illinois 60604

(312) 431-0888 9 mstowell@sfltd.com

10

lfriedman@sfltd.com sbish@sfltd.com

11 BARI S. ROBINSON (SBN# 91743)

12 LAW OFFICES OF BARI S. ROBINSON

1970 Broadway, Suite 1250 13 Oakland, California 94612

14

(510) 625-1507 barirobinson@aol.com

15

Attorneys for MOORE GROUP AND CLASS MEMBER OPT-OUTS Ronald Moore, Morris 16 Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary 17 Evans, Janice Grant, Vincent Griffin, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy,
Marion Tucker, Theron Cyrus, Lanta Evans-Mott, Carlton McDowell, Sarah Nyamuswa, James 18 Owens, Hubert Stalling, Denise Williams.

19 IN THE UNITED STATES DISTRICT COURT

20

FOR THE NORTHERN DISTRICT OF CALIFORNIA

21 DAISY JAFFE, et al.,
22 Plaintiffs,
23
24 25 v.
26 MORGAN STANLEY & CO., INC.
27 Defendant.
28

)

STATEMENT AND OBJECTIONS

)

OF MOORE GROUP AND

)

OTHER OPT-OUT

)

CLASS MEMBERS TO

)

PROPOSED SETTLEMENT

)

)

Date: June 16, 2008

)

Time: 10:00 am

)

Dept: Courtroom 12

)

Judge Thelton E. Henderson

)

)

Case No. C-06-3903

)

OBJECTIONS OF PUTATIVE CLASS MEMBERS TO MOTION FOR CLASS CERTIFICATION AND PRELIMINARY APPROVAL OF PROPOSED SETTLEMENT - CASE NO. C-06-3903 (TEH)

Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 2 of 6

1 The Moore Group and additional class members who have opted out of the proposed
2 settlement (the “Opt-Out Objectors”), through counsel, respectfully submit this Statement and
3 Objections to the Proposed Class Settlement (“Settlement”).
4 The twenty-one Opt-Out Objectors appreciate the Court’s willingness to hear the
5 objections of the Moore Group during preliminary approval and are mindful of the Court’s
6 admonition against “repetitive submissions.” Docket No. 158, at 1. The Opt-Out Objectors do
7 not desire to burden the Court or subject themselves to sanctions.
8 With great respect to the Court, however, the Opt-Out Objectors believe they have a moral
9 obligation to reaffirm their belief that, based on their individual and collective experiences, the
10 Settlement is not adequate, fair or reasonable and is not in the best interest of the class. They
11 therefore respectfully request that the Court accept and consider the objections, evidence and
12 submissions presented by the Moore Group prior to preliminary approval of the Settlement
13 (Docket Nos. 95, 119, 123, 129, 145, 152) in light of additional facts and arguments contained in
14 the objections filed by class members who have objected to the Settlement but not opted out. The
15 Opt-Out Objectors agree with and join in those objections.
16 The Opt-Out Objectors provide the following information about themselves to the Court:
17

18

Name of

19

Individual

Opting Out

Background and/or Experience

20

Morris Allen Mr. Allen is a Graduate of the University of Illinois Urbana who

21

obtained a BS degree in Accounting. Prior to joining Morgan Stanley he worked as a trader and owned his own consulting

22

business. Mr. Morris has passed the following industry/state

securities exams: Series 7, 31, 65 and 66.

23

Michael Barnett Mr. Barnett has been an employee of Morgan Stanley for 13

years, where he currently holds the position of Senior Vice

24

President. Prior to joining Morgan Stanley, he had several years

25

of experience as a Financial Advisor, including at Merrill Lynch. Mr. Barnett is a graduate of Southern Illinois University.

26

Anthony Bell Mr. Bell is a certified public accountant who currently owns his

own accounting practice. Mr. Bell has an MBA and a Master of

27

Finance from Saint Louis University as well as an undergraduate

degree in accounting with a concentration on managerial 28

1
OBJECTIONS OF PUTATIVE CLASS MEMBERS TO MOTION FOR CLASS CERTIFICATION AND PRELIMINARY APPROVAL OF PROPOSED SETTLEMENT - CASE NO. C-06-3903 (TEH)

Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 3 of 6

1

communications from Eastern Kentucky University. He currently

holds the following industry/state securities licenses: Series 7 and

2

Series 66.

3

Patrick Carter Mr. Carter joined Morgan Stanley directly after graduating from

Catawba College where he obtained a degree in Business

4

Administration. He worked for Morgan Stanley for over 16 years

and is currently an Assistant Vice-President at Merrill Lynch.

5

Mr. Carter holds the Series 7, 31, 63 and 65 licenses.

6

Theron Cyrus Mr. Cyrus, prior to joining Morgan Stanley, had experience in the financial industry from a competitor firm. After leaving Morgan

7

Stanley, he joined Merrill Lynch as a Financial Advisor.

Currently, he is an independent advisor and certified financial

8

planner. He currently holds the Series 7, Series 31 and Series 66

licenses.

9

Martin Dixon Mr. Dixon is a graduate of Cornell and Howard University

10

graduate where he obtained a Masters and a Bachelor’s degree in

management, respectively. Prior to joining Morgan Stanley he

11

had significant business experience. He holds the Series 7, 63, 65

and 31 licenses.

12

Ernest Dorsey Mr. Dorsey. prior to joining Morgan Stanley, had years of

experience in the financial services industry, including at

13

Wachovia Securities and Bank One. He currently holds the Series

14

7 and 63 licenses.

Lanta Evans-Mott Ms. Evans has an undergraduate degree in accounting as well as

15

an MBA in Finance. Prior to joining Morgan Stanley, she had

nearly a decade of work experience, including significant years in

16

management. She is currently employed at Raymond James

17

Financial Services and is the immediate past President of the Association of African-American Financial Advisors.

18

Janice Grant Ms. Grant is a graduate of Boston University and Cornell

University where she obtained an undergraduate degree in

19

economics and a Master of Business Administration respectively.

Ms. Grant also possesses an Advanced Professional Certificate

20

from New York University and a Financial Planning Certificate

21

from DePaul University. Prior to joining Morgan Stanley, she

was employed by Xerox and Motorola and was the president and

22

owner of her own business.

John Greer Mr. Greer was employed by Morgan Stanley for over 18 years

23

and obtained an associate vice-president position. He has passed

the following industry/state securities exams: Series 7, 31, 65 and

24

66.

25

Vincent Griffin Mr. Griffin has an MBA degree from Case Western University.

Prior to joining Morgan Stanley, Mr. Griffin had significant

26

industry experience, including work for Wachovia Securities. He

is currently employed at Merrill Lynch and holds the Series 7, 31,

27

63 and 65 licenses.

28

Mark Lewers Mr. Lewers attended the United States Naval Academy and

2

Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 4 of 6

1

received a bachelor of science degree in Mechanical Engineering

from Purdue University. Prior to joining Morgan Stanley, he had

2

over 15 years of sales and engineering experience, including

3

experience with Charles Schwab.

Maurice Mabon Mr. Mabon is a graduate of Indiana University where he obtained

4

degrees in Economics and Finance. Prior to joining Morgan

Stanley, he had over 20 years of work sales and management

5

experience at US Steel and US Foodservice. At Morgan Stanley,

6

Mr. Mabon was ranked #1 for his entire FA trainee class based on production and asset gathering.

7 Carlton McDowell Mr. McDowell has over 12 years of experience in the financial services industry. He has an undergraduate degree in business

8

management and is currently employed by Smith Barney.

Mr. McDowell holds the Series 7, 63 and 65 licenses.

9

Ron Moore Mr. Moore is a graduate of Loyola University. He brought over

10

nineteen years of sales experience including thirteen years with

Allstate Insurance to Morgan Stanley. After leaving Morgan

11

Stanley he was employed by Merrill Lynch as a financial advisor.

He is currently employed by Edward Jones.

12 Sarah Nyamuswa Mr. Nyamuswa, prior to joining Morgan Stanley, had over ten

years of work experience, including significant financial services

13

experience with Wells Fargo and Northwestern Mutual. Ms.

14

Nyamuswa holds the Series 7, 31, 63 and 65 licenses.

James Owens Mr. Owens has been employed by Morgan Stanley for over a

15

decade. He is a graduate of DePaul University where he obtained

a bachelor’s degree in commerce. Prior to joining the firm, he

16

had four years of experience with Merrill Lynch. He currently

17

Brian Roy

holds the following licenses: Series 9, 10, 3, 7, 63 and 65. Mr. Roy was employed by Morgan Stanley for over ten years

18

where he obtained the position of Sales Manager. He has

currently been accepted and will be attending law school.

19

Hubert Stalling Mr. Stalling, prior to joining Morgan Stanley, had over 15 years

of work experience, including significant sales experience with

20

Polaroid and Bank of America. He is a graduate of Bradley

21

University where he obtained an undergraduate degree in

communications. He is currently employed at Allstate Financial

22

Services and holds the Series 6, 7, 31 and 66 licenses.

Marion Tucker Mr. Tucker has over 15 years of corporate management

23

experience. In 2000, he was recognized as one of the top 40

financial planners at Morgan Stanley and earned the VIP award

24

for outstanding sales of insurance products. He holds the Series 7,

25

65 and 31 brokerage licenses, as well as, life and health insurance

licenses.

26 Denise Williams Ms. Williams is a current Financial Advisor for Morgan Stanley

who has been employed by the Firm since March of 2004. She

27

was one of the original named plaintiffs in the Jaffe v. Morgan

28

Stanley litigation who has now objected to and opted out of the

3

Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 5 of 6

1

proposed settlement.

2 The Opt-Out Objectors believe that they have standing to object because they are bound
3 by, and were unable to opt out of, the Settlement’s injunctive provisions. Thus, the Opt-Out
4 Objectors, particularly current employees such as Michael Barnett and former named plaintiff
5 Denise Williams, should have standing to challenge those provisions.1 The Opt-Out Objectors
6 therefore seek to join in the objections raised by class members who did not opt out of the
7 Settlement’s injunctive relief.
8

9 REQUEST TO APPEAR AND BE HEARD

10

The Opt-Out Objectors respectfully request that their counsel and the members of their

11 group who are current employees of Morgan Stanley be permitted to appear and speak at the

12 Fairness Hearing.

13

14

Respectfully submitted on behalf of the Opt-Out Objectors,

15 Linda D. Friedman /s/ (pro hac vice)
16

17

STOWELL & FRIEDMAN LTD.

18

19

Robert Nelson /s/

20

NELSON LAW GROUP

21

22 ROBERT S. NELSON (SBN# 220984) NELSON LAW GROUP
23 900 Cherry Avenue, Suite 300 San Bruno, CA 94066
24 (650) 794-2760 (phone) (650) 794-2761 (fax)
25 rnelson@nelsonlawgroup.net

26 1 The Settlement provides that all class members, even those who opt out of monetary relief, are bound by and cannot opt out of the injunctive relief provisions of the settlement. Indeed, each
27 class member who opted out was required to sign a statement confirming that “I also understand that I may not seek exclusion from the class for injunctive relief and that I am bound by the
28 injunctive provisions of the Settlement Agreement.” Order, Docket No. 158, at 20.

4

Case 3:06-cv-03903-TEH Document 162 Filed 04/28/2008 Page 6 of 6

1

Mary Stowell (pro hac vice)

2 Linda D. Friedman (pro hac vice)

3

Suzanne E. Bish (pro hac vice) STOWELL & FRIEDMAN LTD

4 321 S. Plymouth Court Suite 1400

5 Chicago, Illinois 60604

(312) 431-0888 6

7

BARI S. ROBINSON (SBN# 91743) LAW OFFICES OF BARI S. ROBINSON

8 1970 Broadway, Suite 1250 Oakland, California 94612

9 (510) 625-1507

barirobinson@aol.com 10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

 
 Case 3:06-cv-03903-TEH Document 169 Filed 05/12/2008 Page 1 of 46

1 Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 email: kdermody@lchb.com email: hwong@lchb.com
6 Adam T. Klein
7 Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice)
8 OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor
9 New York, New York 10016 Telephone: (212) 245-1000
10 Facsimile: (212) 977-4005

James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

11 [Additional counsel listed on signature page]

12 Attorneys for the Plaintiff

13

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

14

SAN FRANCISCO / OAKLAND DIVISION

15

16 MARGARET BENAY CURTIS-BAUER, on behalf of herself and all others similarly
17 situated,

18

Plaintiff,

19

v.

20 MORGAN STANLEY & CO. INCORPORATED, f/k/a MORGAN
21 STANLEY DW INC.

22

Defendant.

23

24

Case No. C-06-3903 TEH

PLAINTIFF’S SEPARATE MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF JOINT MOTION FOR: (1) FINAL APPROVAL OF CLASS ACTION SETTLEMENT; (2) CERTIFICATION OF SETTLEMENT CLASS; (3) APPROVAL AND (4) DISTRIBUTION OF SETTLEMENT FUNDS

Date: Time: Place:

June 16, 2008 10:00 a.m. Courtroom 12, 19th Floor

25

26

27

28

760801.5

PLTF'S SEPARATE MPA ISO JOINT MOT. FOR FINAL APPROVAL OF CLASS SETTLEMENT AND CERTIFICATION
CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 169 Filed 05/12/2008 Page 2 of 46

1

TABLE OF CONTENTS

2

Page

3 INTRODUCTION .......................................................................................................................... 1

4 SUMMARY OF SETTLEMENT TERMS..................................................................................... 2

I. INJUNCTIVE RELIEF........................................................................................... 2

5

II. MONETARY RELIEF ........................................................................................... 8

6

III. RELEASE OF CLAIMS ....................................................................................... 10

7 LEGAL STANDARD................................................................................................................... 11

ARGUMENT ................................................................................................................................ 13

8

I. THE COURT SHOULD GRANT FINAL APPROVAL TO THE

9

SETTLEMENT AND SETTLEMENT AGREEMENT....................................... 13

A. The Settlement Agreement Provides Exceptional Injunctive And

10

Monetary Relief To The Class .................................................................. 13

11

1. The Settlement Agreement Provides Exceptional Injunctive Relief. ............................................................................................ 13

12

2. The Monetary Relief Provided by the Settlement Agreement

Is Substantial and Fairly Allocated. .............................................. 15

13

B. The Reaction Of The Class Supports Approval Of The Settlement ......... 16

14

C. The Objections Are Without Merit ........................................................... 16

15

1. The Moore Group Objectors’ Objections Have Previously Been Considered and Rejected and/or Are Otherwise

16

Meritless........................................................................................ 17

a. The Moore Opt Out Objectors Lack Standing to

17

Object. ............................................................................... 18

18

b. Even if they Had Standing, the Moore Group Opt Out Objections Have Previously Been Considered

19

and Rejected and Have Been Re-Filed in Violation of the Court’s February 7, 2008 Order.............................. 19

20

2. The Supplemental Moore Group Objectors’ Objections

Likewise Have Previously Been Considered and Rejected

21

and/or Are Otherwise Meritless. ................................................... 19

22

a. The Objection Regarding The Alleged Lack of Client Involvement in Settlement Discussions Was

23

Previously Considered. ..................................................... 20

b. The Supplemental Moore Group Objectors’

24

Objections Regarding the Adequacy and Fairness of

the Settlement Were Previously Considered and

25

Rejected and Otherwise Lack Merit.................................. 22

26

i. The Objection that Jurisdiction is Not Retained and that there is No Meaningful

27

Supervision Was Previously Considered and/or is Otherwise Without Merit. ...................... 22

28

760801.5

PLTF’S’ SEPARATE MPA ISO JOINT MOT. FOR FINAL

-i-

APPROVAL OF CLASS SETTLEMENT AND CERTIFICATION

CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 169 Filed 05/12/2008 Page 3 of 46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
760801.5

TABLE OF CONTENTS (continued)

Page

ii. The Objection Regarding Settlement Goals and Timetables and the Industrial Psychologists Was Previously Considered. .......... 23
iii. The Objection Regarding Transparency Was Previously Considered. ......................................... 25
iv. The Objection Regarding Changes to the Power Ranking Formula Was Previously Considered. ........................................................... 26
v. The Objection Regarding Changes to Partnerships and Teams Was Previously Considered. ........................................................... 27
vi. The Objection Regarding Isolation of African-Americans Was Previously Considered. ........................................................... 28
vii. The Objection Regarding Damages Calculation Was Previously Considered............... 28
viii. The Objection Regarding Sufficiency of Monetary Relief Was Previously Considered. ...... 29
ix. The Objection Regarding the Scope of the Release Was Previously Considered..................... 30
x. The Objection To Ms. Curtis-Bauer’s Settlement of Individual Claims Was Previously Considered. ......................................... 31
xi. The Objection Regarding Inclusion of Latinos In the Settlement Classes Was Previously Considered. ......................................... 32
xii. The Objection Regarding The Adequacy of the Monetary Relief Was Previously Considered. ........................................................... 33
xiii. The Objection Regarding Arbitration Was Previously Considered. ......................................... 34
xiv. The Objection Regarding Adequacy of Notice Was Previously Considered In Part and is Otherwise Without Merit............................ 34
xv. The Objection Regarding Ledbetter Was Previously Considered. ......................................... 36
3. Billy Manning’s Objections Regarding the Inclusion of Latinos in the Class, the Adequacy of Ms. Curtis-Bauer, the Adequacy of the Monetary Portion of the Settlement, and the Scope of the Release Lack Merit............................................. 36
4. Conclusion Regarding Objectors .................................................. 38
D. The Litigation Involved Substantial Potential Risks................................. 38

PLTF’S’ SEPARATE MPA ISO JOINT MOT. FOR FINAL
-ii- APPROVAL OF CLASS SETTLEMENT AND CERTIFICATION
CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 169 Filed 05/12/2008 Page 4 of 46

1

TABLE OF CONTENTS

(continued)

2

Page

3

E. The Parties Conducted Extensive Investigation And Analysis And

The Settlement Was Reached through Arms’ Length Negotiations. ........ 39

4

F. The Recommendations Of Experienced Counsel Favor Approval Of

5

The Settlement. ......................................................................................... 40

II. THE COURT SHOULD GRANT FINAL CLASS CERTIFICATION. .............. 40

6 CONCLUSION ............................................................................................................................. 40

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

760801.5

-iii-

PLTF’S’ SEPARATE MPA ISO JOINT MOT. FOR FINAL APPROVAL OF CLASS SETTLEMENT AND CERTIFICATION
CASE NO. 06-3903 TEH

Case 3:06-cv-03903-TEH Document 169 Filed 05/12/2008 Page 5 of 46

1

TABLE OF AUTHORITIES

2

Page

3

CASES

4 Boyd v. Bechtel Corp.,

5

485 F.Supp. 610 (N.D. Cal. 1979) ............................................................................................. 12

6

Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992).................................................................................................... 12

7 Ellis v. Naval Air Rework Facility,

8

87 F.R.D. 15 (N.D. Cal. 1980)................................................................................................... 12

9

Glass v. UBS Fin. Serv., Inc., No. C-06-4068 MMC, 2007 WL 221862 (N.D.Cal. Jan. 26, 2007) .......................................... 18

10 Hanlon v. Chrysler Corp.,

11

150 F.3d 1011 (9th Cir. 1998).............................................................................................. 12, 13

12

Jenson v. Continental Fin. Corp., 591 F.2d 477 (8th Cir. 1979)...................................................................................................... 18

13 Mayfield v. Barr,

14

985 F.2d 1090 (D.C.Cir. 1993) .................................................................................................. 18

15

Officers for Justice v. Civil Servo Comm’n, 688 F.2d 615 (9th Cir. 1982)................................................................................................ 12, 13

16 Staton v. Boeing Co.,

17

327 F.3d 938 (9th Cir. 2003)...................................................................................................... 12

RULES

18

Fed. R. Civ. P.

19 23(e) ................................................................................................................................. 1, 12, 40

20 Fed. R. Civ. P. 23(a) ..................................................................................................................................... 11, 40
21 Fed. R. Civ. P.
22 23(b)(2) ...................................................................................................................................... 40

23 Fed. R. Civ. P. 23(b)(3) ................................................................................................................................ 11, 40
24

25

26

27

28

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1

INTRODUCTION

2

The parties have agreed to a settlement that provides comprehensive injunctive relief and

3 monetary relief totaling $16,000,000 plus interest accruing since Preliminary Approval. The

4 parties’ settlement, embodied in the Settlement Agreement, easily satisfies the “fair, reasonable,

5 and adequate” standard for final approval. See Federal Rule of Civil Procedure 23(e).1

6

The Settlement Agreement provides exceptional relief to African-American and Latino

7 Financial Advisors and Registered Financial Advisor Trainees at Morgan Stanley & Co.,

8 Incorporated (“Morgan Stanley”). The Settlement Agreement’s extensive injunctive relief 9 provisions address class members’ claims, and will materially advance the goal of equal 10 employment opportunity for Morgan Stanley’s African-American and Latino Financial Advisors

11 and Registered Financial Advisor Trainees. The monetary relief provided to class members is

12 also substantial and fairly allocated. Taken together, the injunctive and monetary provisions of

13 the Settlement Agreement will provide class members with prompt, certain, and comprehensive

14 relief — in contrast to the complexity, delay, expense, and risk of continuing litigation.

15

Class members have generally responded favorably to the settlement. Class notice was

16 mailed to 1,331 class members on February 27, 2008 and to 35 class members on April 30, 2008.2

17 The deadline for submitting claim forms is not until May 23, 2008 for those whose notice was

18 mailed on February 27, 2008 and on May 30, 2008 for those whose notice was mailed on

19 April 30, 2008. As of May 1, 2008, the Claims Administrator had received 253 claim forms.

20 Twenty-five class members have opted out, and nine class members who have not opted out have

21 submitted objections. Class counsel, who are experienced in litigating employment

22 discrimination and class action cases, firmly believe that this proposed settlement is in the best 23 interest of the class.

24

25

26 1 The Settlement Agreement was revised and filed as Docket No. 159. 2 The deadline for postmarking objections and opt outs is April 28, 2008 for those whose notice
27 was mailed on February 27, 2008 and May 30, 2008 for those whose notice was mailed on April 30, 2008. (See Stipulation and Order Re Class Members Inadvertently Left Off Class List,
28 Docket No. 164.) Plaintiff will address any objections received after May 30, 2008 in a reply brief.

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1

SUMMARY OF SETTLEMENT TERMS

2

The proposed Settlement Agreement provides comprehensive injunctive relief and

3 substantial monetary relief.

4 I. INJUNCTIVE RELIEF

5

Morgan Stanley has agreed to implement comprehensive relief addressing the claims in

6 this action. During the five-year period of the Settlement Agreement, the parties anticipate that

7 Morgan Stanley will spend approximately $7,500,000 on diversity efforts, including programs for

8 training, re-education, and other development programs for African-American and Latino

9 Financial Advisors and Registered Financial Advisor Trainees. Morgan Stanley will retain two

10 jointly-appointed Industrial Psychologists, a Diversity Monitor and employees who will work on

11 diversity programs. The Settlement Agreement also obligates Morgan Stanley to provide

12 extensive injunctive relief, including the following:

13

A. Hiring: Morgan Stanley will maintain its commitment to increase diversity in the

14 Financial Advisor position, including the representation rate of Latino and African-American

15 Financial Advisors. Morgan Stanley will maintain a dedicated position within Morgan Stanley

16 whose primary function is the sourcing and recruitment of qualified diverse candidates, including

17 qualified Latinos and African-Americans. (See Settlement Agreement, § VII.B.) Morgan Stanley

18 will work with the Industrial Psychologists to identify and develop sourcing alternatives for

19 qualified Latino and African-American Financial Advisors, including but not limited to,

20 developing relationships with organizations and educational institutions with high representation

21 rates of Latinos and African-Americans and historical connections with those communities.

22 Morgan Stanley will continue to source qualified diverse candidates for its various entry-level

23 positions, including the Summer Internship Program, the Richard B. Fischer Scholarship Program

24 and/or successor or similar programs. (Id.) Furthermore, Morgan Stanley will inform any third-

25 party recruiter or executive search firm it utilizes in its sourcing efforts that Morgan Stanley

26 expects that the vendor will present a diverse slate of candidates, where possible. (Id.)

27

B. Development Opportunities. Morgan Stanley will work with the Industrial

28 Psychologists to develop initiatives designed to attract and retain African-Americans and Latinos

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1 to Morgan Stanley as Financial Advisors, and to enhance their success. (See Settlement 2 Agreement, § VII.E.) The Industrial Psychologists shall make recommendations for increasing 3 participation of African-American and Latino Financial Advisors and Registered Financial 4 Advisor Trainees in development opportunities. Morgan Stanley will provide additional 5 resources to assist Registered Financial Advisor Trainees in obtaining the Series 7 registration

6 (and passing the Series 7 test) necessary to be a licensed broker.

7

Morgan Stanley will also conduct exit interviews of Financial Advisors and Registered

8 Financial Advisor Trainees who terminate voluntarily and will report the results annually to the

9 Industrial Psychologists, the jointly-appointed Diversity Monitor and individuals within Morgan

10 Stanley responsible for hiring Financial Advisors and Registered Financial Advisor Trainees.

11 (See Settlement Agreement, § VII.E.)

12

Morgan Stanley will maintain its commitment to the biannual Minority Business

13 Exchange. (See Settlement Agreement, § VII.E.)

14

C. Diversity-Related Compensation: Branch Manager compensation will have a

15 meaningful diversity component designed to measure and reward efforts at diversifying

16 representation rates in the Financial Advisor position including the recruiting, training, and

17 retaining qualified African-American and Latino Financial Advisors. (Id. at § VII.C.) Field sales

18 management will be required to report on their best efforts and results in the areas of sourcing,

19 recruiting, mentoring, training and promoting a diverse workforce, including qualified African-

20 American and Latino Financial Advisors and Registered Financial Advisor Trainees. Field sales

21 management will be reviewed and held accountable (including through bonus compensation) by

22 senior Morgan Stanley management for these efforts. (Id.) The Diversity Monitor will review

23 the diversity-related quarterly self-assessment for field sales management and the diversity

24 component of the Branch Manager compensation process. (Id.)

25

D. Branch Management Posting. Morgan Stanley will post all available field sales

26 management positions on its Internal Job Bank, as well as minimum requirements for

27 qualification for those management positions, for a minimum of five (5) business days. (See 28 Settlement Agreement, § VII.C.) Morgan Stanley will also develop and implement a

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1 computerized system to generate an electronic mail notification to Financial Advisors who

2 request to be informed of new management job postings. (Id.) Either the hiring manager or

3 Human Resources will follow up with each applicant/candidate in a timely manner. (Id.)

4

E. Branch Management Training. Morgan Stanley has developed and

5 implemented a comprehensive management assessment and development program to make the

6 assessment and selection process for branch managers formalized and transparent. (See

7 Settlement Agreement, § VII.C.) Morgan Stanley will provide all management-level field

8 personnel with diversity training no less than every other year. (Id. at § VII.C.) Morgan Stanley

9 will also provide diversity-related training to field sales branch management that incorporates

10 elements of the Implicit Association Test or similar tool agreed upon by the parties. (Id.)

11

F. Account Distribution. Morgan Stanley has agreed to make significant changes to

12 its Power Ranking system, including reducing reliance on historical factors and weighting more

13 heavily criteria that reflect recent performance. (See Settlement Agreement, § VII.D.1-2.)

14 Morgan Stanley will provide the methodology for calculating the Power Rankings to each 15 Financial Advisor upon hire and will make it available to all Financial Advisors electronically. 16 (Id. at § VII.D.2.b.) Morgan Stanley will also inform each Financial Advisor of his or her 17 individual ranking at the time an account distribution is made. (Id. at § VII.D.2.c.) The actual 18 distribution of a departing Financial Advisor’s book will be made available to a Financial Advisor

19 in the Branch confidentially upon request. (Id.)

20

After a full calendar year has passed following implementation of these new Power

21 Ranking criteria, the Industrial Psychologists will review how the process has been operating, 22 including all exceptions and complaints. In addition, the Industrial Psychologists will review 23 annually the actual account distributions and related compensation data and the rankings of 24 African-American and Latino Financial Advisors on each of the individual factors and use such 25 information in considering recommendations, if any, for changes to the Power Ranking formula.

26 (See Settlement Agreement, § VII.D.2.d.) They will report their findings and recommendations

27 to the Diversity Monitor on an annual basis. (Id.) Class counsel and counsel for Morgan Stanley 28

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1 will discuss annually the findings of the Industrial Psychologists and whether further appropriate

2 changes to the Power Ranking criteria or distribution process should be made. (Id.)

3

Morgan Stanley will issue a comprehensive account distribution policy statement that will

4 include policies covering the distribution of the accounts of departing Financial Advisors, retiring

5 Financial Advisors, departing partners, and leads, call-ins, and walk-ins. (See Settlement

6 Agreement, § VII.D.3.a.) Morgan Stanley will also train Branch Managers on account

7 distribution and procedures at the time the Settlement becomes effective and will similarly train 8 all new managers that are subsequently hired. (Id.) Morgan Stanley will enhance its technology 9 to allow its account distribution process to be computer automated, subject to branch manager 10 review to ensure compliance with regulatory requirements. The results of all account distributions 11 shall be stored and readily retrievable for monitoring to ensure compliance with account

12 distribution policies. (Id. at § VII.D.3.d.)

13

Any book of business formerly serviced by a retiring or departing Financial Advisor,

14 serviced by a producing manager who is transferred to a non-producing branch manager position, 15 or serviced by a Financial Advisor who moves to a non-producing sales manager position, will be 16 distributed through the Power Ranking system unless a Joint Production Arrangement/Agreement 17 has been in effect for twenty-four (24) months or longer. (See Settlement Agreement, 18 § VII.D.4.a; VII.D.5.a; § VII.D.7.) The Industrial Psychologists will also make recommendations

19 for increasing participation of African-Americans and Latinos in the receipt of retiring Financial

20 Advisor’s books of business. (Id. at § VII.D.4.b; § VII.D.5.b.)

21

Each Branch Office will implement a “Financial Advisor of the Day” program in which

22 all client prospects who either walk in or telephone the branch and who are seeking a Financial

23 Advisor shall be directed to the Financial Advisor serving as the Financial Advisor of the Day.

24 (See Settlement Agreement, § VII.D.6.a-f.)

25

Any disputes between Morgan Stanley and a Financial Advisor or a Registered Financial

26 Advisor Trainee concerning any account distribution will initially go through Morgan Stanley’s

27 internal complaint process, which includes access to mediation and tolling of administrative 28 charge deadlines. (See Settlement Agreement, § VII.D.8.)

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1

G. Complaint Process and Training. The complaint process will be communicated

2 in writing to all Financial Advisors and Registered Financial Advisor Trainees upon hire and

3 annually. (See Settlement Agreement, § VII.F.)

4

Morgan Stanley will provide its Human Resources staff supporting Financial Advisors

5 and Registered Financial Advisor Trainees with appropriate training regarding compliance with

6 state, federal, and local EEO laws; Morgan Stanley’s anti-discrimination and harassment policies;

7 the Settlement Agreement; and the best practices for complaint investigation and resolution. (See 8 Settlement Agreement, § VII.F.) Human Resources will be trained to treat all complaints or 9 inquiries as confidentially as legally possible and to carry out their duties in a manner consistent 10 with the law. In addition, Human Resources will implement controls designed to ensure that only 11 non-complaining employees or managers with a need to know will be advised of a complaint or

12 investigation. In all instances, upon being informed of a complaint or investigation, the non-

13 complaining employees and managers so informed will be reminded of Morgan Stanley’s policy

14 against retaliation. Morgan Stanley will retain documents sufficient to show complaints by

15 African-American and Latino Financial Advisors and Registered Financial Advisor Trainees of

16 race or color discrimination, race or color bias, and/or retaliation related to such complaints for

17 the term of the Settlement Agreement. (Id.)

18

H. Communications. Morgan Stanley shall distribute its Non-Discrimination and

19 Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and then

20 on an annual basis via email from Morgan Stanley's CEO. (See Settlement Agreement, § VII.A.)

21 The President and COO of Morgan Stanley will also issue a separate statement annually in

22 support of the Policy and its underlying tenets.

23

I. Appointments. The parties will jointly appoint a Diversity Monitor, Fred W.

24 Alvarez, Esq., who is external to and independent of Morgan Stanley, but will report directly to

25 the COO and President of Morgan Stanley. The Diversity Monitor will monitor Morgan

26 Stanley’s effort to carry out the terms of the Settlement Agreement, and report to Lead Counsel

27 and Morgan Stanley semi-annually. (See Settlement Agreement, § VII.G.1.a-i.) The Diversity 28 Monitor will monitor by (a) receiving monthly reports regarding complaints of Financial

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1 Advisors and Registered Financial Advisor Trainees alleging race discrimination and resolution 2 of investigations of such complaints through the CARE program or otherwise; (b) reviewing 3 quarterly reports regarding the branches in which Branch Managers have filed exception reports 4 reflecting a deviation from the account distribution process; (c) reviewing account distribution 5 data, exception reports, and complaints to monitor policy compliance and, if potential non-

6 compliance is identified, will inform Morgan Stanley and Class Counsel (and Morgan Stanley

7 shall be required to take appropriate corrective actions to address instances of non-compliance); 8 (d) reviewing the diversity-related quarterly self-assessment process for field sales management 9 and the diversity component of the branch manager compensation process; (e) monitoring bi10 annual training of management on EEO policies, and policies against discrimination and 11 retaliation, and ensure that the training agreed to was implemented; (f) reviewing how Human

12 Resources handles investigations and the resolution process for inquiries and complaints;

13 (g) reviewing the annual results of the exit interviews of African-American and Latino Financial

14 Advisors and Registered Financial Advisor Trainees; (h) providing reports to Class Counsel and

15 Morgan Stanley at least semi-annually regarding the items monitored, including the analysis of

16 the account distribution system; and (i) maintaining records for the term of this Settlement

17 Agreement. (Id.)

18

The parties will also jointly appoint Industrial Psychologists Dr. Kathleen Lundquist and

19 Dr. Irwin Goldstein to work with Morgan Stanley and Class Counsel to improve the

20 representation and success rates of African-Americans and Latinos in the Financial Advisor and

21 Registered Financial Advisor Trainee positions. (See Settlement Agreement, § VII.G.2.a.) The 22 Industrial Psychologists will monitor the implementation of the programs, policies and initiatives 23 set forth in the Settlement Agreement and will report their findings to the Diversity Monitor. (Id. 24 at § VII.G.2.b.) They will report annually on the representation rates and efforts to recruit 25 African-Americans and Latinos in the Registered Financial Advisor Trainee and Financial

26 Advisor positions and present recommendations to a senior executive panel of Morgan Stanley

27 and Class Counsel. (Id. at § VII.G.2.b-c.) The Industrial Psychologists will also review how the 28 revised account distribution process has been operating and provide the Diversity Monitor with

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1 findings of any deviations from the account distribution system. (Id. at § VII.G.2.d.) They will 2 make recommendations (a) concerning sourcing and recruitment strategies and programs to 3 improve the representation rates of African-Americans and Latinos in the Financial Advisor and 4 Registered Financial Advisor Trainee positions; (b) for increasing the Series 7 passage rates of 5 African-American and Latino Registered Financial Advisor Trainees; (c) for increasing the

6 production and earnings of African-American and Latino Financial Advisors, including policies

7 and practices with respect to training, development, and mentoring; (d) for increasing 8 participation of African-American and Latino Financial Advisors in the receipt of retiring 9 Financial Advisors’ books of business; (e) for increasing participation of African-American and 10 Latino Financial Advisors in partnerships; (f) concerning policies and practices with respect to 11 training, development, and mentoring, that will enhance opportunities for African-American and

12 Latino Registered Financial Advisors and Financial Advisor Trainees; (g) concerning a mentoring

13 program for all Registered Financial Advisor Trainees and Financial Advisors; and

14 (h) concerning a system of semi-annual internal data collection and a monitoring process.

15

J. Term of Settlement Agreement: The Settlement Agreement will be for five

16 years. During that time, as set forth above, Morgan Stanley will collect data regarding hiring,

17 retention, compensation, partnerships, account distributions, and complaints of race or color

18 discrimination, among other things. (See Settlement Agreement, § IX.A.) Morgan Stanley, with

19 input from the Industrial Psychologists and consent from Class Counsel, will create and

20 implement a system for monitoring compliance with the policies designed under the Settlement

21 Agreement, including the account distribution policy. (Id. at § IX.B.) The Diversity Monitor will 22 provide Class Counsel with semi-annual reports regarding the data collected through the 23 monitoring system, including the analysis of the account distribution system. (Id. at § IX.C.) 24 Morgan Stanley and Class Counsel will meet at least once every six months regarding 25 compliance. (Id. at § IX.D.)

26 II. 27

MONETARY RELIEF In addition to the comprehensive injunctive relief described above, Morgan Stanley will

28 establish a Settlement Fund of approximately $ 16 million plus interest at the rate of 5% per

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1 annum from the date of Preliminary Approval until the deposit into the Settlement Fund less the

2 specified credits for opt outs. (See Settlement Agreement, §§ VIII.A; IV.C.9.) This Fund will

3 compensate all Class Members, including the Named Plaintiff, who do not opt out and who

4 submit timely claims; will provide a service payment to the Named Plaintiff and payment for the

5 settlement of the Named Plaintiff’s individual claims; will provide all attorney’s fees and costs

6 awarded by the Court; and notice fees and costs. (Id.) The Settlement Sum does not include

7 Morgan Stanley’s share of taxes or contributions (i.e., FICA, FUTA, SUTA and Medicare) which

8 will be paid separately by Morgan Stanley to the Claims Administrator in addition to the

9 $16 million fund. (Id.)

10

Approximately $14,000,000 of the Settlement Fund is allocated for payment directly to

11 Class members, reduced only by the service payment and release of non-class claims by the

12 Named Plaintiff (or less than 1% of the Settlement Fund), by the attorneys fees and costs (5% of

13 the Settlement Fund), $150,000 per year for the five-year term of the Settlement for future fees

14 and expenses related to monitoring and enforcing the settlement, by the actual cost of providing 15 notice, and any opt-out credits. (See Settlement Agreement, Section VIII.A.)3

16

Each class member who does not opt out of the settlement will receive a share of the net

17 Settlement Fund based on an Allocation Formula consisting of two components: (1) a Claim

18 Form Survey Component to be determined by a jointly-selected Special Master and (2) an

19 Earnings Regression Component developed by Class Counsel’s statistical experts. (See

20 Settlement Agreement, Section VIII.)

21

The Claim Form Survey will constitute 85% of the Allocation Formula. Claimants are to

22 be awarded 1 point for each week worked between October 12, 2002 and December 3, 2007 as a

23 Financial Advisor or Registered Financial Advisor Trainee. Claimants may also receive up to 50

24 additional points for extreme emotional distress. Claimants will also be eligible for up to 50

25 additional points for responses to questions about termination arising out of low production,

26 3 Morgan Stanley is entitled to a credit for each class member who submits a timely and complete
27 opt-out request and who does not rescind that opt out as provided in Section IV.C.5 of the Settlement Agreement. The opt out credit to which Morgan Stanley is entitled shall be a pro rata
28 share of the Settlement Fund based on the number of Class Members who have opted out in relation to the total number of Class Members. (Id. at IV.C.9.)

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1 failure to satisfy position requirements, failure to satisfy requirements of the training program,

2 production related reductions-in-force, other production based performance related termination

3 and/or any claim for constructive discharge based on the same set of facts or circumstances.

4 (Settlement Agreement at VIII.D.2.)

5

The remaining 15% of the Allocation Formula will be paid to Claimants based upon the

6 Earnings Regression Component. Class Members whose annual earnings in any year between

7 October 12, 2002 and December 3, 2007 fall below an annual earnings curve which is set at two 8 deviations above the mean earnings curve for white Financial Advisors are eligible for a 9 monetary award under the Earnings Regression Component. For eligible Claimants, the Earnings 10 Regression Component will take into account the Claimant’s earnings during that year and will 11 control for the length of tenure at Morgan Stanley as a Financial Advisor, registration date and

12 branch office location. (See Settlement Agreement, § VIII.D.1.) A separate comparable earnings

13 regression model will be conducted with respect to Registered Financial Advisor Trainees.

14

The Special Master will determine the monetary award to be paid to each Claimant from

15 the Settlement Fund. (See Settlement Agreement, § VIII.D.3.a.) The Special Master will submit

16 the proposed allocation to the Court under seal for in camera review. (Id., § VIII.D.3.c.) The

17 Claims Administrator will then send Notice and/or Releases to the Claimants and make awards

18 after Releases are executed. (Id., § VIII.D.3.d.) Any undistributed funds that remain after six

19 months from the mailing of the Notice of Award due to unsubmitted releases shall be distributed

20 to 501(c)(3) organizations advancing opportunities for African-Americans and/or Latinos,

21 including opportunities in the financial services industry, as jointly selected by Class Counsel and

22 Morgan Stanley. (Id.)

23 III. RELEASE OF CLAIMS

24

If the Court grants final approval to the parties’ settlement and the proposed Settlement

25 Agreement, the Settlement Class Members who do not timely opt out will release all race and/or

26 color discrimination claims against Morgan Stanley under federal and state laws that are certified

27 by the Court on June 16, 2008, for the liability period of October 12, 2002, through December 3, 28

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1 2007.4 (See Settlement Agreement, § V.A.)

2

The Release states:

3

I hereby waive, release and discharge (herein collectively referred to as "Release

of Claims") Morgan Stanley & Co. Incorporated ("Morgan Stanley"), including its

4

officers, directors, subsidiaries, predecessors, successors, fiduciaries, insurers.

employees and agents ("Released Parties"), from any and all claims, known and

5

unknown, for race and/or color discrimination based on the allegations in the

Second Amended Complaint of the Litigation, including acts or circumstances

6

relating to compensation, production, account distribution, team or partnership

formation, allocation of support or business opportunities or other allegations in

7

the Second Amended Complaint that I may have against the Released Parties

relating to my employment at Morgan Stanley. Based on this Agreement, this

8

Release of Claims also shall apply to termination and advancement into

management claims for race and/or color discrimination, as referenced in the

9

Second Amended Complaint, arising out of low production, failure to satisfy

position requirements, failure to satisfy requirements of the training program,

10

production related reductions-in-force, other production based performance

related terminations and any claims for constructive discharge based on the same

11

set of facts or circumstances, it being understood that such Release of Claims does

not apply to any other termination, advancement into management, constructive

12

discharge or harassment claims. I understand that this release includes all race

and/or color discrimination claims, as referenced herein and in the Second

13

Amended Complaint, that I have or may have arising at any time on or before

February 7, 2008. I also understand that my release includes all related claims for

14

monetary damages, injective, declaratory or equitable relief, and costs and

attorneys' fees, whether arising under Title VII of the Civil Rights Act of 1964, as

15

amended, 42 U.S.C. Section 1981, or any other federal, state, local or common

laws or regulations. 16

17 (Settlement Agreement, Exhibit A.)

18

The release does not include other claims of discrimination “such as sex, age, or national

19 origin discrimination, or claims arising under the Fair Labor Standards Act or the Employment

20 Retirement Income Security Act.” (Id.)

21

LEGAL STANDARD

22

The Ninth Circuit has recognized a strong policy favoring voluntary settlement of

23 4 For purposes of injunctive and declaratory relief, the injunctive-relief class which was
24 preliminarily approved by the Court in its February 7, 2008 Order under Federal Rules of Civil Procedure 23(a) and 23(b)(2) consists of: “All African-Americans and Latinos employed as
25 Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor, Morgan Stanley DW Inc. at any
26 time between October 12, 2002 and December 3, 2007.” (Doc. No. 158 at 4.) For purposes of the monetary relief provided under the Settlement Agreement, the “Settlement Class” under
27 Rule 23(a) and Rule 23(b)(3) consists of: “All African-American and Latinos employed as Financial Advisor or Registered Financial Advisor Trainees in the Global Wealth Management
28 Group of Morgan Stanley & Co. Incorporated or its predecessor, Morgan Stanley DW Inc. at any time between October 12, 2002 and December 3, 2007, who do not timely opt out.” (Id.)

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1 complex class actions. “[V]oluntary conciliation and settlement are the preferred means of dispute 2 resolution.” Officers for Justice v. Civil Servo Comm’n, 688 F.2d 615, 625 (9th Cir. 1982). This is 3 “especially true in complex class action” cases, id., which lend themselves to compromise 4 because ‘of the difficulties of proof, uncertainty of outcome, and length and complexity of 5 litigation. See also Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)

6 (“strong judicial policy ... favors settlements, particularly where complex class action litigation is

7 concerned”).

8

Public policy also favors the settlement of Title VII cases. In Carson v. American Brands,

9 Inc., 22 450 U.S. 79 (1981), the Supreme Court explained that “[i]n enacting Title VII, Congress

10 expressed a strong preference for encouraging voluntary settlement of employment discrimination

11 claims.” Id. at 88, n.14; see also Officers for Justice, 688 F.2d at 625. This Court has reached the

12 same conclusion. See Ellis v. Naval Air Rework Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980)

13 (“settlement is favored in resolving Title VII litigation”).

14

Federal Rule of Civil Procedure 23(e) requires that a class action settlement be “fair,

15 adequate and reasonable” in order to merit approval. The Ninth Circuit has identified a non-

16 exhaustive list of factors to guide the final approval inquiry, including (1) the amount offered in

17 settlement, (2) the reaction of the class to the proposed settlement, (3) the strength of the

18 plaintiff’s case balanced against the “risk, expense, complexity, and likely duration of further

19 litigation” and the “risk of maintaining class action status throughout the trial,” (4) the “extent of

20 discovery completed” and the “stage of the proceedings,” and (5) the informed views of

21 experienced counsel. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998); see also 22 Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003). With respect to the last factor, the 23 “recommendations of plaintiffs’ counsel should be given a presumption of reasonableness,” 24 particularly when counsel has significant experience litigating similar cases. Boyd v. Bechtel 25 Corp., 485 F.Supp. 610, 622 (N.D. Cal. 1979); Ellis, 87 F.R.D. at 18 (“the fact that experienced

26 counsel involved in the case approved the settlement after hard-fought negotiations is entitled to

27 considerable weight”).

28

When determining whether to grant final approval, “the court’s intrusion upon what is

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1 otherwise a private consensual agreement negotiated between the parties to a lawsuit must be 2 limited to the extent necessary to reach a reasoned judgment that the agreement is not the product 3 of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, 4 taken as a whole, is fair, reasonable and adequate to all concerned.” Officers for Justice, 688 F.2d 5 at 625; see also Hanlon, 150 F.3d at 1026 (“It is the settlement taken as a whole, rather than the

6 individual component parts, that must be examined for overall fairness.”).

7 8 I. 9 10 11 12

ARGUMENT
THE COURT SHOULD GRANT FINAL APPROVAL TO THE SETTLEMENT AND SETTLEMENT AGREEMENT
A. The Settlement Agreement Provides Exceptional Injunctive And Monetary Relief To The Class
1. The Settlement Agreement Provides Exceptional Injunctive Relief. As described above, the proposed Settlement Agreement provides exceptional injunctive

13 relief that will materially advance the goal of equal employment opportunity for African-

14 American and Latino brokers and broker trainees at Morgan Stanley.

15

The Settlement Agreement provides that Morgan Stanley will take steps to increase hiring

16 of minority candidates, including maintaining a dedicated position within the company whose

17 function will be to recruit diverse candidates, and working with the Industrial Psychologists and

18 recruiters toward that goal.

19

Morgan Stanley must also develop initiatives to attract and retain African-Americans and

20 Latinos, provide resources to assist them in obtaining their Series 7 registration, and conduct exit

21 interviews of those who terminate their employment voluntarily. Branch Manager compensation

22 will be tied to diversity efforts.

23

Field sales management will be required to report efforts to increase diversity and those

24 reports will be reviewed by the Diversity Monitor. Field sales management will be held

25 accountable for their efforts.

26

Branch management positions will be posted and notifications of openings in management

27 will be provided to those who request it. Morgan Stanley will also provide diversity training to 28 management-level field personnel.

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1

The Power Ranking system will be revised to ensure fairness by reducing reliance on

2 historical factors. Information regarding the system and each broker’s respective ranking will be

3 provided to him/her. This process and the results of its implementation will be reviewed by the

4 Industrial Psychologists and the findings will be reported to the Diversity Monitor. Class counsel

5 and counsel for Morgan Stanley will also monitor the system to determine if any further changes

6 are necessary. Changes will also be made to ensure that the accounts of retiring and departing

7 Financial Advisors are distributed fairly.

8

The complaint process will be communicated to all Financial Advisors and Financial

9 Advisor trainees. Appropriate training and will be given to Human Resources and investigation

10 processes will be subject to increased controls and record keeping.

11

The Non-Discrimination and Anti-Harassment Policies will be distributed to all

12 employees upon hire and a separate annual statement will be issued by the President and COO in

13 support of the policy.

14

The parties will jointly appoint an external independent Diversity Monitor to monitor

15 Morgan Stanley’s efforts to carry out the terms of the Settlement Agreement. The Diversity

16 Monitor will provide at least semi-annual reports to Class Counsel and Morgan Stanley regarding

17 the data collected and items monitored, including the analysis of the account distribution system.

18

The parties will also jointly appoint two Industrial Psychologists to work with Morgan

19 Stanley and Class Counsel to improve representation and success rates of African-Americans and

20 Latinos in the Financial Advisor and Registered Financial Advisor Trainee positions. They will

21 monitor the implementation of programs, policies and initiatives set forth in the Settlement 22 Agreement and report their findings to the Diversity Monitor. Annually, they will also provide 23 reports regarding representation rates and recruiting efforts for African-Americans and Latinos in 24 the Financial Advisor and Registered Financial Advisor Trainee positions. They will also review 25 the implementation of the account distribution process and report their findings to the Diversity

26 Monitor.

27

28

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1

2. The Monetary Relief Provided by the Settlement Agreement Is

Substantial and Fairly Allocated.

2

3

The Settlement Agreement provides substantial monetary relief. The total fund created by

4 the Settlement will be $16 million plus interest, with approximately $14 million allocated for

5 payments directly to the Class. In order to claim monetary benefits, the Class members must

6 complete a three and a half page form which asks for (1) contact information; (2) racial or ethnic

7 background; (3) a short description of any facts regarding emotional or physical effects of

8 discriminatory conduct; and (4) a short description of any facts related to termination or

9 constructive discharge arising out of low production, failure to satisfy position requirements,

10 failure to satisfy requirements of the training program, production related reductions-in-force,

11 other production based performance related termination and/or any claims for constructive

12 discharge based on the same set of facts and circumstances.

13

Each Class member’s monetary recovery will be determined based on an Allocation

14 Formula consisting of two components: (1) a Claim Form Survey Component to be determined

15 by a jointly-selected Special Master and (2) an Earnings Regression Component developed by

16 Class Counsel’s statistical experts.

17

The Claim Form Survey will constitute 85% of the Allocation Formula. Claimants are to

18 be awarded 1 point for each week worked between October 12, 2002 and December 3, 2007 as a

19 Financial Advisor or Registered Financial Advisor Trainee. Claimants may also receive up to 50

20 additional points for extreme emotional distress and up to 50 additional points for responses to

21 questions about termination arising out of low production, failure to satisfy position requirements,

22 failure to satisfy requirements of the training program, production related reductions-in-force,

23 other production based performance related termination and/or any claim for constructive

24 discharge based on the same set of facts or circumstances. Settlement Agreement at § VIII.D.2.

25

The remaining 15% of the Allocation Formula will be paid to Claimants based upon the

26 Earnings Regression Component. Class Members whose annual earnings in any year between

27 October 12, 2002 and December 3, 2007 below an annual earnings curve which is set at two

28 deviations above the mean earnings curve for white Financial Advisors are eligible for a

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1 monetary award under the Earnings Regression Component. For eligible Claimants, the Earnings

2 Regression Component will take into account the Claimant’s earnings during that year and will

3 control for the length of tenure at Morgan Stanley as a Financial Advisor, registration date and

4 branch office location. See Settlement Agreement, § VIII.D.1. A separate comparable earnings

5 regression model will be conducted with respect to Registered Financial Advisor Trainees.

6

B. The Reaction Of The Class Supports Approval Of The Settlement

7

Class notice and claim forms were sent to 1,331 class members on February 27, 2008 and

8 to 35 Class members on April 30, 2008. (Declaration of Mark Patton (“Patton Decl.”) at ¶ 2.)

9 Thirty-five notices and claim forms were also sent on April 30, 2008 after it was determined that

10 they were omitted from the first mailing due to a clerical error. (Id. at ¶ 3.) The list of notice

11 recipients was determined using data provided by Morgan Stanley and data gathered by class

12 counsel during the course of litigation. (Id. at ¶ 4.) The settlement also generated substantial

13 news coverage.

14

For the 1,331 Class members whose notices and claim forms were mailed on February 27,

15 2008, Class member claims must be postmarked by May 23, 2008. (See Patton Decl. at ¶ 5.) As

16 of May 1, 2008, the claims administrator had already received approximately 253 claims. Id. ¶ 6.

17 Twenty-five class members have opted out, and nine Class members who have not opted out have 18 submitted a objections.5 Class Counsel, who are experienced in litigating employment

19 discrimination and class action cases, respectfully submit that this proposed settlement is in the

20 best interest of the Class.

21

C. The Objections Are Without Merit

22

The objections filed to date fall into 2 categories: (1) 29 Objections filed by counsel for

23 the Moore Group (the Moore Group Opt Out Objectors and Supplemental Moore Group 24 Objectors) 6; and (2) 1 objection filed by an objector, Billy Manning, who reiterates allegations of

25 5 The deadline for receipt of objections and opt outs is April 28, 2008 for those whose notice was 26 mailed on February 27, 2008 and May 30, 2008 for those whose notice was mailed on April 30,
2008. (See Stipulation and Order Re Class Members Inadvertently Left Off Class List, Docket 27 No. 164.) Plaintiff will address any objections received after May 30, 2008 in a reply brief.
6 Marilyn White, who is one of the Supplemental Moore Group Objectors listed in Docket 28 No. 161 also submitted a separate letter of objection dated April 24, 2008. Ms. White’s letter
does not reference any new objections aside from those included in the Moore Group Objections

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1 the Moore Group but who so far appears to be unrepresented by Moore counsel. At least 21 of

2 these objections were improperly filed by Moore Group Opt Outs who lack standing to object,

3 and all objections filed by Moore Group Opt Outs and Supplemental Moore Group counsel

4 merely rehash prior concerns raised by the Moore Group that the Court addressed and cautioned 5 Moore counsel not to refile. None of the objections has merit.7 Moreover, none of the other

6 approximately 1,366 Class members who have considered the settlement based on the notice

7 objected. Instead, over 250 Class members have already indicated by submitting their claim

8 forms that they want the settlement to go forward.

9

1. The Moore Group Objectors’ Objections Have Previously Been

Considered and Rejected and/or Are Otherwise Meritless. 10

11

On November 9, 2007, fourteen putative class members and one non-class member

12 applicant (the “Moore Group Objectors”) filed objections to the Parties’ Joint Motion for

13 Preliminary Settlement Approval of Class Action Settlement, Provisional Certification of the

14 Settlement Class, Approval and Distribution of Notice of Settlement, and Approval of a Schedule

15 for the Final Settlement Approval Process. (See Docket No. 95.) Arguments in favor of those

16 objections were made by counsel for the Moore Group Objectors at the preliminary approval

17 hearing on December 2, 2007. On December 12, 2007, the Court considered and rejected a

18 number of issues raised by the Moore Group Objectors and requested further briefing on the

19 Motion for Preliminary Settlement Approval. (Order, Docket No. 130.)

20

After further briefing by counsel for the Moore Group Objectors regarding their

21 objections and the submission of additional evidence from the parties in support of settlement, by

22 Order entered February 7, 2008, the Court granted preliminary approval of the settlement.

23 (Docket No. 158.) In its Order, the Court stated that it “carefully considered the arguments of

24 Objectors presented in their properly filed briefs and motions, specifically in Docket Nos. 95, 129

25 and Supplemental Moore Group Objections. Because she is among those listed as making the
26 Supplemental Moore Group Objections and because her separate letter raises no other issues, her letter will not be addressed here separately. (See Dermody Decl., Ex. C.)
27 7 One of the “Opt Out” Objectors included in the Statement and Objections of Moore Group and Other Opt-Out Class Members to Proposed Settlement (Docket No. 162) is Vincent Griffin.
28 Neither Class Counsel nor the Claims Administrator have a record of this person having submitted an opt-out letter.

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1 and 152, and the declarations and other documents supporting them, and the arguments of both 2 the Parties and Objectors at the hearing held December 3, 2007.” (Id. at 11-12.) It stated that 3 “the Parties’ additional submissions have assuaged its concerns about both the adequacy of 4 representation and the fairness of the settlement, which appears at this stage to be fundamentally 5 fair, adequate and reasonable when viewed as a whole. The Court therefore GRANTS

6 provisional class certification and preliminary approval of the settlement.” (Id. at 2.)

7

The Order addressed the concerns of the Moore Group Objectors in detail. It also warned,

8 “The Court will not consider a motion for reconsideration of this Order. Counsel for the Moore

9 Group Objectors are forewarned that further repetitive submissions may subject them to sanctions

10 under 28 U.S.C. § 1927 for vexatiously multiplying this litigation.” (See Docket No. 158 at 1,

11 n. 1.)

12

Nevertheless, on April 28, 2008, counsel for the Moore Group Objectors filed a Statement

13 and Objections to the Proposed Class Settlement on behalf of certain “Opt-Out Objectors,” some

14 of whom were also members of the Moore Group Objectors. (See Docket No. 162.) These

15 objections not only lack merit but should be stricken as improper under the Court’s prior Order

16 (Docket No. 158) as improper repetitive submissions and because the Objectors lack standing.

17

a. The Moore Opt Out Objectors Lack Standing to Object.

18

None of the twenty-one opt out objectors has standing to object to the settlement;

19 particularly the monetary relief portion of the settlement. Glass v. UBS Fin. Serv., Inc., No. C-

20 06-4068 MMC, 2007 WL 221862, at *8 (N.D.Cal. Jan. 26, 2007) (citing Mayfield v. Barr,

21 985 F.2d 1090 (D.C.Cir. 1993) as holding “[t]hose who are not class members, because they are 22 outside the definition of the class or have opted out” lack standing to object to class settlement); 23 and Jenson v. Continental Fin. Corp., 591 F.2d 477, 482, n.7 (8th Cir. 1979) as stating “Opt24 outs . . . are not members of the class and hence are not entitled to the protection of Rule 23(e).”). 25 These objections should be stricken from the record.

26

27

28

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1

b. Even if they Had Standing, the Moore Group Opt Out

Objections Have Previously Been Considered and Rejected and

2

Have Been Re-Filed in Violation of the Court’s February 7,

2008 Order.

3

The Moore Group Opt Outs ask the Court to “accept and consider the objections, evidence 4

5 and submissions presented by the Moore Group prior to preliminary approval of the Settlement

6 (Docket Nos. 95, 119, 123, 129, 145, 152) in light of additional facts and arguments contained in

7 the objections filed by class members who have objected to the Settlement but not opted out. The
8 Opt-Outs agree with and join in those objections.” (Docket No. 162, at 1.) The only basis for
9 refiling their prior objections is that they believe that it is their “moral obligation to reaffirm 10
their” prior objections and request that the Court again consider those prior objections. (Id. at 1.) 11
Accordingly, other than making additional irrelevant accusations addressed below, the Moore 12 13 Group Opt Outs do not state any legitimate new grounds on which to seek reconsideration of their
14 prior objections. (See infra note 6.) Thus, even if these opt out objectors had standing to object,

15 which they do not, their objections were previously raised, addressed by the parties and the Court,

16 lack merit and constitute a “repetitive submission that may subject [the Counsel for the Moore

17 Group Objectors] to sanctions.” (Docket No. 158 at 1, n.1.)

18

2. The Supplemental Moore Group Objectors’ Objections Likewise Have

19

Previously Been Considered and Rejected and/or Are Otherwise

Meritless.

20

21

On April 28, 2008, counsel for the Moore Group Objectors also filed objections on behalf

22 of eight additional objectors who were not included in the original Moore Group. (See Docket

23 No. 161.) These Supplemental Moore Group objectors asked the Court to consider “the

24 objections, arguments and evidence presented by the Moore Group in Docket Nos. 95, 119, 123,

25 129, 145, 152 in light of the entire record and new information presented to the Court.” (Id. at 1.)

26 They also “incorporated” the Objections and Supplemental Objections of the Moore Group “as

27 their own as if fully stated herein.” (Id.)

28

The Supplemental Moore Group objectors’ new submissions are nothing more than

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1 reassertions of points the Moore Group Objectors previously made to the Court in one of their six 2 previous submissions.8 (Docket Nos. 95, 119, 123, 129, 145, 152.) These resubmissions

3 constitute a blatant violation of the Court’s admonition that “further repetitive submissions may

4 subject [counsel for the Moore Group] to sanctions.” (Docket No. 158, at 1 n.1). As set forth

5 below, the Court has previously considered these restated objections and found them to be

6 meritless.

7

The Supplemental Moore Group Objectors make two primary arguments in support of

8 their objections, the second of which was broken into fifteen subparts, some of which address

9 multiple issues. Each of these objections was previously raised and considered by the Court or is

10 otherwise meritless as set forth below.

11

a. The Objection Regarding The Alleged Lack of Client

Involvement in Settlement Discussions Was Previously

12

Considered.

13

The Supplemental Moore Group objector’s first primary objection, that “lawyers are not

14 substitutes for clients,” raises here again Ms. Curtis-Bauer’s alleged lack of participation in the

15 settlement and her resulting lack of adequacy to represent the Class. (See Docket No. 161 at 7-8.)

16 This issue was raised by the Moore Group in their objections to preliminary settlement approval.

17 (See Docket No. 95 at 9-12; 14-15). The objectors also raised this issue in their Motion for

18 Discovery. (Docket No. 129 at 13 (“The limited record, therefore, is consistent with the Moore

19 Group’s belief that Ms. Curtis-Bauer only joined this lawsuit after the settlement was largely

20 complete.”) They also raised this issue in their Supplemental Briefing. (See Docket No. 145 at 1-

21 8 (“The presence and involvement of class counsel during negotiations is not a substitute for the

22 active representation of a named plaintiff, regardless of whether class counsel are experienced

23 and able at their task.”)).

24

25 8 Indeed, the only so-called “new” information are alleged “facts” supporting Moore counsel’s previous accusations about the involvement of clients directly in mediation. Notably, most of this
26 information is supplied by a former client of Class Counsel. While Class Counsel disagrees with much of what has been said, as Moore counsel no doubt knows, Class Counsel is ethically
27 prohibited from clarifying the record lest they disclose attorney-client communications. However, if the Court seeks a supplemental response from Class Counsel on these matters, Class
28 Counsel respectfully request that they be allowed to do so ex parte under seal so as not to reveal any of Ms. Williams’ client confidences to Morgan Stanley.

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1

Numerous declarations previously filed by the Objectors are also filed again here

2 regarding the facts and circumstances surrounding Ms. Curtis-Bauer’s involvement in the lawsuit.

3 For instance, Docket Entry No. 161-5, was also previously filed as Docket No. 145-4

4 (Declaration of Mary Harris Evans). Likewise, Docket Entry No. 161-6 was also filed as Docket

5 No. 95-10 (another Declaration of Mary Harris Evans). Docket Entry No. 126-4, the Declaration 6 of Brian Roy, was also refiled as Docket No. 161-7.9 The Declaration of Maurice Mabon was

7 filed as both Docket No. 145-5 and 161-8. Accordingly, these declarations were previously

8 considered and raise no new issues.

9

The Supplemental Moore Group objectors also voiced their concern regarding Ms. Curtis-

10 Bauer’s participation in the settlement at the preliminary settlement hearing. (Declaration Of

11 Kelly M Dermody In Support Of Final Settlement Approval, Plaintiff’s Application For

12 Attorneys’ Fees And Reimbursement Of Costs And Expenses, And Application Of Plaintiff For

13 Approval Of Service Payment (“Dermody Decl.”) Exh. A, Transcript of Proceedings held

14 December 3, 2007, at 31-33.) Plaintiff responded in her submissions to the Court and at the

15 preliminary settlement approval hearing. (Docket No. 137 at 5-6; Dermody Decl., Exh. A, at 64-

16 65.)

17

The Court has considered this issue a number of times. In its Order of December 12,

18 2007, the Court stated, “There is no requirement that the class representative, rather than class

19 counsel, negotiate the terms of a settlement, and the Court’s decision about whether Ms. Curtis-

20 Bauer is an adequate representative will not turn on the number of days, weeks, or months before

21 the settlement that she joined the litigation.” (Docket No. 130 at 3.) The Court later determined

22 that Ms. Curtis-Bauer “was not presented with the settlement as a fait accompli before joining the

23 suit; instead, she expressed interest in becoming a plaintiff, and then evaluated the proposed

24 settlements. Her declaration shows that she was aware of her fiduciary duties to the class, felt

25 capable of assessing the settlement and the approach of counsel, and found that approach

26 appropriate to meeting the goals of the suit. She suggested substantive changes which were

27

28 9 A different declaration for Mr. Roy was also filed as Docket No. 145-25 stating that he is part of the Moore Group.

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1 ultimately incorporated into the settlement agreement.” (Docket No. 158 at 7; see also Dermody

2 Decl., Exh. A, at 10, 92.) Accordingly, this argument was previously raised, addressed by the

3 parties and the Court and lacks merit.

4

b. The Supplemental Moore Group Objectors’ Objections

Regarding the Adequacy and Fairness of the Settlement Were

5

Previously Considered and Rejected and Otherwise Lack

Merit. 6

7

The Supplemental Moore Group objectors next contend that the “lack of clients resulted in

8 an inadequate and unfair settlement.” (Docket No. 161 at 8.) In support of this proposition, the

9 objectors state fifteen purported arguments, some of which raise multiple issues. These

10 objections have been previously raised and lack merit.

11

i. The Objection that Jurisdiction is Not Retained and that

there is No Meaningful Supervision Was Previously

12

Considered and/or is Otherwise Without Merit.

13

The first issue raised by the objectors regarding the substance of the settlement is that it

14 did not require the Court to retain jurisdiction over the settlement and receive regular reports from 15 Morgan Stanley. (Docket No. 161 at 9.) The objectors raised this concern during the preliminary 16 approval hearing. (Dermody Decl., Exh. A at 62) (“And another concern, Your Honor, is this 17 settlement divests this Court of jurisdiction to hear any disputes about the settlement.”). 18 Plaintiff’s counsel responded at that time. (Id. at 70) (“that’s certainly our understanding, that the

19 final judgment will reserve continuing jurisdiction.”). The Settlement Agreement filed on

20 February 11, 2008, provides that the Court does maintain jurisdiction to enforce the terms of the

21 Settlement Agreement. (See Settlement Agreement, Docket No. 159, at 47; see also Post-Hearing

22 Memorandum of Plaintiff Curtis-Bauer, Docket No. 137 at 3.) Accordingly, this objection has

23 previously been raised and is without merit.

24

In addition, this objection ignores the very extensive and on-going monitoring of the

25 Settlement that will be conducted by the independent Diversity Monitor, Fred W. Alvarez, Esq.

26 Mr. Alvarez will monitor by, among other things: (a) receiving monthly reports regarding

27 complaints of Financial Advisors and Registered Financial Advisor Trainees alleging race 28 discrimination and resolution of investigations of such complaints through the CARE program or

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1 otherwise; (b) reviewing quarterly reports regarding the branches in which Branch Managers have 2 filed exception reports reflecting a deviation from the account distribution process; (c) reviewing 3 account distribution data, exception reports, and complaints to monitor policy compliance and, if 4 potential non-compliance is identified, will inform Morgan Stanley and Class Counsel (and 5 Morgan Stanley shall be required to take appropriate corrective actions to address instances of

6 non-compliance); (d) reviewing the diversity-related quarterly self-assessment process for field

7 sales management and the diversity component of the branch manager compensation process; 8 (e) monitoring bi-annual training of management on EEO policies, and policies against 9 discrimination and retaliation, and ensure that the training agreed to was implemented; 10 (f) reviewing how Human Resources handles investigations and the resolution process for 11 inquiries and complaints; (g) reviewing the annual results of the exit interviews of African-

12 American and Latino Financial Advisors and Registered Financial Advisor Trainees;

13 (h) providing reports to Class Counsel and Morgan Stanley at least semi-annually regarding the

14 items monitored, including the analysis of the account distribution system; and (i) maintaining

15 records for the term of this Settlement Agreement. (See Settlement Agreement, § VII.G.1.a-i.)

16 Mr. Alvarez will also report to Lead Counsel and Morgan Stanley semi-annually. (See id.) This

17 extensive monitoring will ensure implementation of the Class relief.

18

ii. The Objection Regarding Settlement Goals and

Timetables and the Industrial Psychologists Was

19

Previously Considered.

20

The second issue raised by the objectors regarding the substance of the settlement is that it

21 does not require “concrete, measurable goals and timetables to remedy” Morgan Stanley’s

22 discriminatory practices and that Industrial Psychologist Kathleen Lundquist should not be

23 appointed here because she is also serving in Augst-Johnson and has routinely represented

24 employers. (Docket No. 161 at 9-11.)

25

The objectors raised their concern that the programmatic relief did not include sufficiently

26 measurable goals during the preliminary settlement approval hearing. (Dermody Decl., Exh. A at

27 37-38; 62) (“We believe that a key part of the change is actual concrete goals and timetables, as 28 well as financial penalties and having to adequately compensate African-Americans for their

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1 losses.”) Plaintiff’s counsel responded during the hearing and addressed this concern. (Id. at 68

2 and 75) (“the literature says that affecting manager compensation is a particularly effective way

3 of making change in a company;” “There is going to be a five-year consent decree, they have

4 reporting requirements regarding compensation, account distribution, hiring and turnover. Class

5 counsel will look at the numbers and the diversity monitor will look at the numbers. . . . If they do

6 not do anything, it will have serious consequences.”).

7

The issue of Dr. Lundquist serving as the industrial psychologist for both the gender and

8 race settlements was also addressed at the preliminary settlement approval hearing. Counsel for

9 Plaintiff explained that, “as Dr. Lundquist set forth in her Declaration, [there are]actually

10 advantages having the same person because we already started with them on the huge learning

11 curve . . . . Already several meetings with all the managers in the organization to get them up to

12 speed to understand those things. . . . We all agreed, including counsel in that case, there’s an

13 advantage in having the same consultants.” (Dermody Decl., Exh. A at 78.) Moreover,

14 Dr. Lundquist filed a Declaration with the Court setting out her qualifications and noting her 15 work in the same capacity in numerous other cases, including on behalf of employees.10 (See

16 Docket Entry No. 143 at 2.)

17

In its Order of December 12, 2007, the Court found that “the injunctive relief package is

18 not simply a ‘carbon copy’ of the relief that Morgan Stanley has already agreed to in the Augst-

19 Johnson settlement.” (Docket No. 130 at 6). It further found that “the industrial psychologists

20 and diversity monitor provided for in the settlement will be devoting additional time, analysis,

21 and resources to address race issues, and not displacing relief already agreed to in Augst-Johnson.

22 (Id.)

23

In its Order of February 7, 2008, the Court relied on Dr. Lundquist’s opinion that “the

24 programmatic changes that Morgan Stanley will make as a result of the settlement and of her

25 recommendations will improve productivity, retention, and hiring of minority financial advisors.”

26 (Docket No. 158 at 15.) Based on this and other facts, the Court found that “the programmatic

27 10 Dr. Lundquist has worked as an expert for Class Counsel in other discrimination cases, and
28 Class Counsel submit that it is a reflection of her tremendous skill and integrity that she is highly sought after by both plaintiffs and defendants in litigation.

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1 relief set out in the Settlement Agreement is substantive, meaningful, and valuable to the class.”

2 (Id. at 16.) Accordingly, this argument was previously raised, addressed by the parties and the

3 Court and lacks merit.

4

iii. The Objection Regarding Transparency Was Previously

Considered. 5

6

The third issue raised by the objectors regarding the substance of the settlement is that it

7 does not require transparency. (Docket No. 161 at 11-12.) Specifically, the objectors argue that

8 they should be permitted to have access to the power ranking system and to the relevant

9 workforce data. (Id.)

10

The objectors raised this concern in their previously-filed objections, stating “Morgan

11 Stanley refuses to disclose the Power Ranking.” (See Docket No. 95 at 21.) They also raised it

12 extensively in their Motion for Discovery Regarding Proposed Class Settlement. (See Docket

13 No. 129 at 11-13) (Section IV titled, “The Power Ranking Should Be Disclosed To Class

14 members and Any Adverse Impact Studies Produced”). Likewise, the objectors complained 15 during the preliminary settlement approval hearing that they were not provided with 16 compensation and other workforce data. (Dermody Decl., Exh. A at 33) (“we tried to get data 17 from Morgan Stanley about compensation and account distribution and partnerships and 18 representation and for longer period than one year, we wanted it for the class period. . . we would

19 like the opportunity to study the data ourselves.”).

20

The objectors also again raise the issue of the lack of disclosure to the settlement class of

21 the Moore Group’s objections and previous negotiations with Morgan Stanley. (Docket No. 161

22 at 12.) This issue too was raised in their previously filed objections. (See Docket No. 95 at 17)

23 (“Morgan Stanley did not inform Plaintiffs or the counsel about the existence of the Moore group

24 or the nature of their claims.”).

25

After analysis, the Court held “this Court will not grant Objectors discovery of workforce

26 data, or order disclosure of the privileged work product in Mr. Klein’s declaration filed under

27 seal, so that the Objectors can provide an alternative valuation of damages.” (Docket No. 158 at 28 14.) The Court also found that the settlement was the result of “extensive, arms’ length

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1 negotiations between the Parties after Class Counsel investigated the class claims and became

2 familiar with the strengths and weaknesses of Plaintiffs’ case.” (Id. at 12.) Finally, the Court

3 found that it would not order disclosure of the Power Ranking formula. (Id. at 16, n.7.)

4 Specifically, the Court stated that “The Power Ranking formula is already in place as part of the

5 Augst-Johnson settlement; disclosure of the formula here will serve no purpose.” (Id.)

6 Accordingly, this argument was previously raised, addressed by the parties and the Court and

7 lacks merit.)

8

iv. The Objection Regarding Changes to the Power

Ranking Formula Was Previously Considered. 9

10

The fourth issue raised by the objectors regarding the substance of the settlement is that

11 the changes to the Power Ranking formula are inadequate.11 (Docket No. 161 at 12-13; Docket

12 No. 161-12 (Declaration of Michael Barnett).) They also again complain that the Power Ranking

13 formula was not provided to them. (Id.)

14

The objectors have raised this issue at least three times with the Court. (Docket No. 95 at

15 22 (“Had the Moore group been allowed to participate in the discussion about whether a Power

16 Ranking should be adopted to distribute accounts, they certainly would have argued that until the

17 gap in wages between African-American and white FAs narrows, awarding points based on

18 commission generated or assets under management only institutionalizes and perpetuates the

19 bias.”); Docket No. 145 at 13 (“Plaintiff does not allege that she conducted a statistical analysis of

20 account transfers for purposes of determining damages or the impact of the account transfer and

21 teaming policies on African-Americans and Latinos”); Docket No. 145-7 (Declaration of Michael

22 Barnett) at 8 (“It is my understanding that the Power Ranking system proposed by Morgan

23 Stanley will perpetuate this discrimination because the proposed settlement expressly states that

24 accounts from team relationships will be counted in the Power Ranking.”); Dermody Decl.,

25 Exh. A at 46, 88 (“And then the fifth thing, sir, I think, there has to be, programmatically has to

26 be some relief in the area of power rankings.”).

27

The Court has considered these arguments and found disclosure of the Power Ranking

28 11 Curiously, objectors assert this complaint while acknowledging they have not seen the formula.

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1 formula would “serve no purpose” and that “the programmatic relief set out in the Settlement

2 Agreement is substantive, meaningful and valuable to the class.” (Docket No. 158 at 16 and n.7).

3 Accordingly, this argument was previously raised, addressed by the parties and the Court and

4 lacks merit.

5

v. The Objection Regarding Changes to Partnerships and

Teams Was Previously Considered. 6

7

The fifth issue raised by the objectors regarding the substance of the settlement is that it

8 does not reform partnerships or teams. (Docket No. 161 at 13-14.) This concern was also raised

9 multiple times in the objectors’ previously-filed objections and in the preliminary approval

10 hearing. (See Docket No. 95 at 22 (“Further, it allows that if African-Americans are excluded

11 from partnerships, and assets of retiring FAs transfer through teams, African-Americans are

12 disadvantaged by teams.”); Docket No. 129 at 7, n.8 (“The Moore Group does not accept the

13 settlement proponents’ contention that Morgan Stanley can do nothing about its teaming policies

14 because FAs are ‘entrepreneurs.’”); Docket No. 145 at 13 (“unlike African-Americans, Latinos

15 are not excluded from favorable teams.”); Docket No. 145-7 (Declaration of Michael Barnett);

16 Docket No. 145-8 at 8-10 (Declaration of Maurice Mabon); Docket No. 145-9 (Declaration of

17 Ronald Moore); Dermody Decl., Exh. A at 44, 88-90 (arguing that the settlement should “make it

18 mandatory for African-Americans to be included on teams in every office in the United States”

19 and that “teams are formed and then accounts go from team to team during end run around the

20 power ranking process. So yes, we have trouble with teams.”).) During the preliminary approval

21 hearing, counsel for Plaintiff explained that teams are not created by “a company policy per se”

22 and that the industrial psychologists will be charged with the duty of reviewing the team 23 structure. (Id. at 73-74.)12

24

In granting preliminary approval of the settlement, after analysis the Court held that “all

25 these factors convince the court that the programmatic relief set out in the Settlement Agreement

26 12 In so far as the objectors compare the terms of this settlement to any other settlement reached in
27 any other employment discrimination class action lawsuit, the comparisons are without merit in that those settlements involved different companies with different compensation and partnership
28 schemes where different allegations were made. The only viable comparison here is to the settlement with Morgan Stanley in Augst-Johnson, to which this Settlement compares favorably.

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1 is substantive, meaningful, and valuable to the class.” (Docket No. 158 at 16.) Accordingly, this

2 argument was previously raised, addressed by the parties and the Court and lacks merit.

3

vi. The Objection Regarding Isolation of African-

Americans Was Previously Considered. 4

5

The sixth issue raised here by the objectors regarding the substance of the settlement is

6 that it did not address the isolation of African-American class members in the workplace.

7 (Docket No. 161 at 6). The objectors raised this issue previously. (See Docket No. 95 at 21 (“the 8 isolation of and hostility faced by African-Americans at Morgan Stanley is not a phenomenon 9 systematically faced by women at Morgan Stanley.”); Docket No. 129 at 6 (“African-Americans 10 are also far more isolated within the Morgan Stanley branch office system.”)) After consideration 11 of the objections, the Court held that “the programmatic relief set out in the Settlement

12 Agreement is substantive, meaningful, and valuable to the class.” (Docket No. 158 at 16.)

13 Notably, the training, monitoring, exit interviews, and Industrial Psychologist input mandated by

14 the Agreement all support this finding. Accordingly, this argument was previously raised,

15 addressed by the parties and the Court and lacks merit.

16

vii. The Objection Regarding Damages Calculation Was

Previously Considered. 17

The seventh issue raised here by the objectors regarding the substance of the settlement is

18

that the damages calculation was deficient because it was limited to consideration of the

19

compensation shortfall. (Docket No. 161 at 17-18.) This issue was briefed extensively in the

20

objectors’ Supplemental Brief in Opposition to Class Certification and Proposed Settlement. (See

21

Docket No. 145 at 8-10.) (“A ‘compensation shortfall’ analysis, however, does not capture the

22

losses of class members or damages recoverable as a matter of law.”) The objectors also raised

23

this issue in the preliminary settlement approval hearing. (Dermody Decl., Exh. A at 33) (“The

24

damages estimated suggested seem enormously low.”).) Additionally, the objectors raised this

25

issue in their Administrative Motion for Production of Materials Filed Under Seal and In Camera.

26

(Docket No. 152 at n.1 (“based on their understanding of the compensation shortfall analysis,

27

they do not believe this method accurately captures the losses caused by the claims the Jaffe

28

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1 settlement seeks to release.”).)

2

The Court has addressed this issue stating, “The settlement is not unfair, either overall or

3 to African-Americans as a subgroup, because it chooses to compensate class members primarily

4 on the basis of their tenure at Morgan Stanley during the class period. Compensation shortfalls

5 are susceptible of easy calculation, and the complaint alleges that the shortfalls stem in part from

6 nationwide use of a formula with an adverse impact on class members. . . . The Parties can

7 reasonably choose to focus monetary relief on the strongest or most easily proved portion of their

8 claims as a means of compromising their claims.” (See Docket No. 158 at 13.) The Court further

9 held that, although the “estimate of the amount of compensation shortfalls does not capture

10 emotional distress damages, or damages from terminations arising from low production or

11 constructive determination. . . . Plaintiffs can reasonable choose to focus on pay disparities.” (Id.

12 at 14.) Accordingly, this argument was previously raised, addressed by the parties and the Court 13 and lacks merit.13

14

viii. The Objection Regarding Sufficiency of Monetary Relief

Was Previously Considered. 15

16

The eighth issue raised by the objectors regarding the substance of the settlement is that

17 the monetary relief is insufficient. (Docket No. 161 at 18-19.) Again, the Moore Group

18 Objectors raised their concern regarding the monetary portion of the settlement multiple times in

19 their previously-filed objections. They stated, “This fund is grossly inadequate and will not

20 provide meaningful relief or adequate compensation to the victims of the Firm’s systemic racial

21 discrimination.” (Docket No. 95 at 17; see also Docket No. 129 at 9 (“The Moore Group

22 respectfully submits that even the $36 million starting point . . . is extremely low and would not

23 make whole the victim of Morgan Stanley’s discrimination.”); see also Docket No. 145 at 8-12.)

24 The objectors also raised their concerns regarding the adequacy of the monetary portion of the

25 settlement during the preliminary approval hearing. (Dermody Decl., Exh. A at 33, 39-50, 58 (“I

26 want to speak to the topic of whether $16,000 give or take as an average for individuals is

27

28 13 To the extent the Moore Group Opt Out Objectors also incorporate this objection, they clearly lack standing to challenge the sufficiency of the monetary relief.

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1 adequate. We contend it certainly isn’t.”)

2

In approving the settlement, however, the Court found that, for the reasons set forth above

3 regarding the use of the compensation shortfall damage analysis, the settlement amount “is

4 obviously not deficient, and a sizeable discount is to be expected in exchange for avoiding

5 uncertainties, risks, and costs that come with litigating a case to trial. Again, the issue is not

6 whether the settlement ‘could be better,’ but whether it falls within the range of appropriate

7 settlements. This settlement certainly does.” (Docket No. 158 at 14 (citation omitted).)

8 Accordingly, this argument was previously raised, addressed by the parties and the Court and

9 lacks merit.

10

ix. The Objection Regarding the Scope of the Release Was

Previously Considered. 11

12

The ninth issue raised by the objectors regarding the substance of the settlement is that the

13 class member release is too broad. The Moore Group Objectors raised this issue in their Motion

14 for Discovery Regarding Proposed Settlement. (Docket No. 129 at 9 (“however, class members

15 are required to waive claims for termination based on low production.”)) This objection was also

16 raised in the Objectors’ Supplemental Brief in Opposition to Class Certification and Proposed

17 Settlement. (See Docket No. 145 at 10 (“Class members should not be required to release claims

18 or damages not included in the ‘compensation shortfall’ analysis, including claims for

19 termination, emotional distress, punitive damages, front pay and others not sought by the class.”))

20 It was raised again in the Objector’s Administrative Motion for Production of Materials Filed

21 Under Seal and In Camera. (Docket No. 152)(“The Objectors believe that the proposed

22 settlement requires release of termination claims, but plaintiff’s compensation shortfall damages

23 calculation does not take account of or value relief required by law for these claims.”)

24

Having considered this objection previously, the Court rejected it, recognized the value of

25 the class monetary relief, and observed that “the programmatic relief set out in the Settlement

26 Agreement is substantive, meaningful, and valuable to the class.” (Docket No. 158 at 14, 16.) 27 Accordingly, this argument was previously raised and lacks merit.14

28 14 To the extent the Moore Group Opt Out Objectors also incorporate this objection, they clearly

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1

x. The Objection To Ms. Curtis-Bauer’s Settlement of

Individual Claims Was Previously Considered.

2

3

The tenth issue raised by the objectors regarding the substance of the settlement is that it

4 provided for settlement of Ms. Curtis-Bauer’s individual claims, thereby conferring “special

5 treatment.” (Docket No. 161 at 19-20.) They also contend Ms. Curtis-Bauer’s claims are time-

6 barred. (Id.)

7

These objections have been raised numerous times. (Docket No. 95 at 11 (“Class

8 representatives cannot receive disproportionately special treatment. . . . It is also unclear what

9 other claims Ms. Curtis-Bauer could have that are still timely, given that she left Morgan Stanley

10 in 2002.”); Docket No. 129 (“her special award of $150,000 may have left her disinterested in

11 testing the formula for distribution of the remaining common fund. This special treatment left no

12 class representative to stand in the shoes of absent class members and to test the sufficiency of the

13 fund or the method of distributing its proceeds.”); Docket No. 152 at 3-4 (“in light of the

14 substantial difference between the monetary award Ms. Curtis-Bauer will receive for her non-

15 class claims as compared to her class claims, it is appropriate to examine whether there is even an

16 appearance that the sole class representative is being provided with an improper incentive to

17 support the proposed settlement and whether the circumstances of this settlement create a conflict

18 of interest that renders her an inadequate class representative.”) The objectors also voiced these

19 issues during the preliminary settlement approval hearing. (Dermody Decl., Exh. A at 32-33)

20 (“those claims are time-barred”).

21

Plaintiff responded to these concerns at the hearing by explaining, “these are not claims

22 that were time barred, your honor, these were legitimate claims and that’s why she’s entitled to a

23 payment for signing a release that’s considerably broader than the release that class members are

24 governed by.” (Id. at 66.) The legitimacy of her individual claims was also addressed

25 extensively in the Post-Hearing Memo of Plaintiff Curtis-Bauer. (Docket No. 137 at 3-5.)

26

The Court considered these objections in its February 7, 2008 Order. It concluded that

27 Ms. Curtis-Bauer’s individual claims were “distinct from the claims asserted in this action.”

28 lack standing to challenge the scope of the class release.

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1 (Docket No. 158 at 7.) It further found that she is an adequate representative who participated in

2 the decision to settle the case and the relief negotiated on behalf of the Class. (Id. at 7-9.)

3 Specifically, the Court stated that it “declines to reject her as a representative merely because

4 Objectors perceive an appearance of impropriety where there is no evidence and only Objectors’

5 speculation that any improprieties have taken place.” (Id. at 9.) In finding her to be an adequate

6 representative, the Court concluded that Ms. Curtis-Bauer “is an engaged representative, that she

7 has taken her duties as a class representative seriously, that she has released distinct non-class

8 claims, and that her interests are aligned with those of the class.” (Id.) Accordingly, this 9 argument was previously raised, addressed by the parties and the Court and lacks merit.15

10

xi. The Objection Regarding Inclusion of Latinos In the

Settlement Classes Was Previously Considered. 11

12

The eleventh issue raised by the objectors regarding the substance of the settlement is that

13 the class included both African-Americans and Latinos. (Docket No. 161 at 20.) The objectors

14 have raised this concern in their prior objections. (Docket No. 95). They stated, “The parties

15 have not explained the basis for their decision to create a single ‘race and color’ class for all

16 discrimination claims of African-Americans and Latinos. . . . It is naive and dangerous to

17 assume that Latinos and African-Americans necessarily have the same experiences, and the same

18 claims, or that the discrimination they face can be remedies with the same programs.” (Id. at 12,

19 16). They also repeated this objection in their Supplemental Briefing. (See Docket No. 129 at 6

20 (“The Moore Group believes that Morgan Stanley’s workforce data will reveal different outcomes

21 for Latino and African-American Financial Advisors at Morgan Stanley and actual antagonism

22 within the proposed class that prevents certification in one lawsuit of both groups.); Docket No.

23 145 (“The Moore group respectfully submits that the challenged practices do not affect African-

24 Americans and Latinos in the same way and that the working conditions and outcomes of the two

25 groups at Morgan Stanley are very different. . . . actual conflicts exist between African-

26 Americans and Latino class members that should prevent a single class.”)) The objectors also

27

28 15 To the extent the Moore Group Opt Out Objectors also incorporate this objection, they clearly lack standing to challenge class and non-class monetary relief.

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1 voiced their concern that Latinos are not as disadvantaged in comparison to African-American

2 brokers during the preliminary approval hearing. (Dermody Decl., Exh. A at 35-36.) Counsel for

3 Plaintiff addressed these concerns at the hearing. (Id. at 65-66) (“We have this power ranking

4 system which adversely affected both African-American and Latinos in the same way.”).

5

The Court addressed this issue in its December 12, 2007 Order. It stated “Although

6 Objectors argue on ‘information and belief’ that African-Americans have lower representation

7 rates, lower compensation, and higher rates of attrition than Latinos, they have not suggested that 8 those differences are related to different discriminatory practices. . . . Rule 23(a)(3)’s typicality 9 requirement can be satisfied even if class members are ‘denied promotion or promoted at 10 different rates,’ provided that the ‘discrimination they allegedly suffered occurred through an 11 alleged common practice.’” (Docket No. 130 at 4 (citations omitted.)) It also stated that it

12 “rejects Objectors’ vague arguments that inclusion of Latinos in the settlement makes it unfair.”

13 (Id. at 6, n.3.)

14

Additionally, in approving the settlement, the Court stated that it was “satisfied by the

15 information provided in the Supplemental Declaration of Adam T. Klein, filed under seal for in

16 camera inspection, that the disparities in compensation are not so great that it is unfair or

17 inappropriate to treat African-Americans and Latinos in a similar fashion for the purposes of the

18 monetary relief.” (Docket No. 158 at 13.) After analysis of the settlement, the Court found that

19 “the programmatic relief set out in the Settlement Agreement is substantive, meaningful, and

20 valuable to the class.” (Docket No. 158 at 16.) Accordingly, this argument was previously

21 raised, addressed by the parties and the Court and lacks merit.

22

xii. The Objection Regarding The Adequacy of the

Monetary Relief Was Previously Considered. 23

24

The twelfth issue raised by the objectors regarding the substance of the settlement is that

25 the monetary portion of the settlement is insufficient. (Docket No. 161 at 21.) This issue was

26 addressed above (paragraph 8) and will not be addressed again here. The objection is thus

27 without merit. 28

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1

xiii. The Objection Regarding Arbitration Was Previously

Considered.

2

3

The thirteenth issue raised by the objectors regarding the substance of the settlement is

4 that the settlement provides that disputes will be resolved by arbitration for the term of the

5 settlement. (Docket No. 161 at 21.) This issue was previously raised by the objectors. (Docket

6 Entry No. 95 at 23) (“Any meaningful settlement should include Morgan Stanley’s agreement to

7 continue to provide employees access to the court, and not mandatory arbitration of their civil

8 rights claims, for the duration of any consent decree.”). The objectors also raised this issue

9 during the preliminary approval hearing. (Dermody Decl., Exh. A at 62) (“And another concern,

10 Your Honor, is this settlement divests this Court of jurisdiction to hear any disputes about the

11 settlement and only the parties are allowed to bring any claims and they must bring it in

12 arbitration.”).

13

Notably, there is no evidence in the record that Morgan Stanley compels brokers with

14 discrimination claims to arbitration. In fact, the evidence shows the opposite. This is an

15 objection in search of a problem.

16

Counsel for Plaintiff also addressed this concern at the hearing, stating “that’s certainly

17 our understanding, that final judgment will reserve continuing jurisdiction.” (Id. at 71.) The

18 Settlement Agreement filed on February 11, 2008, provides that the Court does maintain

19 jurisdiction to enforce the terms of the Settlement Agreement. (See Settlement Agreement,

20 Docket No. 159, at 47; see also Post-Hearing Memorandum of Plaintiff Curtis-Bauer, Docket

21 No. 137 at 3.) Accordingly, this objection has been considered and is without merit.

22

xiv. The Objection Regarding Adequacy of Notice Was

Previously Considered In Part and is Otherwise Without

23

Merit.

24

The fourteenth issue raised by the objectors regarding the substance of the settlement is

25 that notice was inadequate. (Docket No. 161 at 22.) This issue, too, was previously raised by the

26 objectors. (Docket Entry No. 95 at 23) (asserting that the Notice is “confusing and inaccurate.”).

27 The objectors now contend that the Notice is ineffective because the use of Morgan Stanley’s last

28 known address to locate class members may contain inaccurate information.

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1

This complaint is absurd on its face. The Order preliminarily approving the settlement

2 directs that the Claims Administrator “will update any new address information for potential class

3 members as may be available through the National Change of Address (“NCOA”) system.”

4 (Docket No. 158 at 19.) It further provides that “The Claims Administrator will trace all returned

5 undeliverable notices and re-mail to the most recent address available.” (Id.) Here, the Claims

6 Administrator traced and remailed all returned undeliverable notices to the most recent addresses

7 available. (Declaration of Mark Patton, ¶ 3.)

8

The objectors also complain that those Class members who received the Notice did not

9 have full information about the case because the Notice references an incorrect website address16

10 through which class members could receive a copy of the Notice and other documents. (Docket

11 No. 161 at 22.) Given the fact that the only way class members would even know about the

12 incorrect web address were if they had already received the Notice, the incorrect web address

13 certainly did not affect the delivery of actual Notice of the settlement terms to the Class.

14 Moreover, the Order approving the settlement does not reference a website as a material

15 component of Notice. (Docket No. 158 at 18.) Instead, the Order reflects that “the Claims

16 Administrator will distribute the Class Notice and Claim Form to Settlement Class members by

17 first class U.S. Mail to their last known addresses. There is no additional method of distribution

18 that would be reasonably likely to notify Class Members who may not receive notice pursuant to

19 the proposed distribution plan.” (Id.)

20

Accordingly, anyone who received the Notice with the incorrect website was already

21 provided with full information about the settlement through the Notice they received. Any

22 information that Class members could have received by visiting the website was entirely

23 redundant to the Notice. In addition, the Notice contained information regarding the case name

24 and number and the contact information for counsel, the Claims Administrator, and the Court.

25 Any Class member wishing to view the actual settlement documents could have obtained them by

26 contacting either the Clerk’s office, the Claims Administrator, Class Counsel, or Morgan Stanley.

27

28 16 Class Counsel discovered the problem with the web posting independently in late April 2008 and corrected the problem as soon as it was identified.

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1 There was no requirement that Notice be given via the Internet, and no class members were

2 prejudiced by any inability to locate the information via a web posting. Thus, this objection is

3 without merit.

4

xv. The Objection Regarding Ledbetter Was Previously

Considered. 5

6

The fifteenth issue raised by the objectors regarding the substance of the settlement is that

7 it did not take Ledbetter into account. The objectors raised this issue with the Court in the

8 preliminary settlement approval hearing. (Dermody Decl., Exh. A at 26.) (”Under Supreme Court

9 in recent rulings Ledbetter following the earlier decision in Morgan, said even though they affect

10 current earnings you can’t look at them, you need to look at what decision did the employer make

11 in the relevant time frame, that is the statute of limitations period.”).) Accordingly, this argument

12 was previously raised, addressed by the parties and the Court and lacks merit.

13

3. Billy Manning’s Objections Regarding the Inclusion of Latinos in the

Class, the Adequacy of Ms. Curtis-Bauer, the Adequacy of the

14

Monetary Portion of the Settlement, and the Scope of the Release Lack

Merit 15

Class member Billy Manning individually submitted a letter setting forth objections to the

16

settlement on April 28, 2008. (Dermody Decl., Exh. B.) He states four grounds for objections to

17

the settlement, all of which were raised by the Moore Group Objectors, were considered and

18

rejected by the Court prior to preliminary approval of the settlement, and are otherwise without

19 merit.17

20

Mr. Manning’s first objection is that the settlement class includes both African-Americans

21

and Latinos. (Dermody Decl., Exh. B at 2.) As set forth above (see supra §C.1.b.iv) this issue has

22

been raised and rejected by the Court. Specifically, the Court has found that, “Although

23

Objectors argue on ‘information and belief’ that African-Americans have lower representation

24

rates, lower compensation, and higher rates of attrition than Latinos, they have not suggested that

25

26 17 Mr. Manning does not appear to be represented by Counsel for the Moore Group Objectors.
27 However, it is apparent that Mr. Manning is, at minimum, in communication with the Moore Group Objectors, if not part of their Group, because his objections are nearly identical to a
28 number of those raised by the Moore Group Objectors and are based on issues not described in the Notice. (See Dermody Decl., Exh. B.)

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1 those differences are related to different discriminatory practices. . . . Rule 23(a)(3)’s typicality 2 requirement can be satisfied even if class members are ‘denied promotion or promoted at 3 different rates,’ provided that the ‘discrimination they allegedly suffered occurred through an 4 alleged common practice.’” (Docket No. 130 at 4 (citations omitted.)) The Court also stated that 5 it “rejects Objectors’ vague arguments that inclusion of Latinos in the settlement makes it unfair.”

6 (Id. at 6, n.3.)

7

Mr. Manning next complains that Ms. Curtis-Bauer became involved in this action only

8 after members of the Moore Group had attempted to negotiate a settlement with Morgan Stanley.

9 (Dermody Decl., Exh. B at 2.) The Court addressed this issue when it was raised by the Moore

10 Group Objectors. The Court stated that it “declines to reject [Ms. Curtis-Bauer] as a

11 representative merely because Objectors perceive an appearance of impropriety where there is no

12 evidence and only Objectors’ speculation that any improprieties have taken place.” (Docket No.

13 158 at 9.) In finding her to be an adequate representative, the Court concluded that Ms. Curtis-

14 Bauer “is an engaged representative, that she has taken her duties as a class representative

15 seriously, that she has released distinct non-class claims, and that her interests are aligned with

16 those of the class.” (Id.)

17

Mr. Manning next contends that the monetary portion of the settlement is insufficient.

18 (See Dermody Decl., Exh. B at 2.) (“$ 16 million dollars is a miniscule amount of money to the

19 firm.”) This issue, as set forth above, has been raised many times by the Moore Group Objectors

20 and has been rejected by the Court. (See supra § C.1.b.viii.) Specifically, the Court found that the

21 settlement amount “is obviously not deficient” and “certainly” falls within the range of

22 appropriate settlements. (Docket No. 158 at 14.) Accordingly, this argument was previously

23 raised, addressed by the parties and the Court, and lacks merit. (Id. at 1, n.1.)

24

Finally, Mr. Manning objects that the release is too broad. (Dermody Decl., Exh. B at 2.)

25 This issue was raised by the Moore Group Objectors and rejected by the Court. (See supra §

26 C.1.b.ix; Docket No. 158 at 16.)

27

Because each objection raised by Mr. Manning has been raised by the Moore Group

28 Objectors (sometimes verbatim) and rejected by the Court, Plaintiff respectfully requests that the

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1 Court similarly reject Mr. Manning’s objections.

2

4. Conclusion Regarding Objectors

3

The Moore Group Objectors — both original and supplemental — have simply restated

4 the objections they previously made to this settlement in direct contravention of the Court’s

5 admonition that they should not raise objections that have already been raised. No new

6 information is presented, and no new arguments of substance are made which would have any

7 bearing on the Court’s prior ruling. Likewise, Billy Manning’s objections – seemingly lifted

8 from the Moore Group filings - are without merit. The Court’s preliminary determination of

9 fairness should not be changed.

10

D. The Litigation Involved Substantial Potential Risks.

11

The “risk, expense, complexity, and likely duration of further litigation” are factors to be

12 considered in assessing a proposed settlement. Hanlon, 150 F.3d at 1026.

13

The factual and legal issues in this case are complex, as demonstrated by the parties’ years

14 of hard-fought litigation and the terms of the Settlement Agreement itself. Any liability phase trial 15 of plaintiff’s claims - which involve thousands of class members employed throughout Morgan 16 Stanley would also be complex and would require substantial additional preparation and many 17 fact and expert witnesses. Remedial phase proceedings would add to this complexity. All of these 18 complex proceedings would be expensive and would result in significant delay before any

19 potential recovery.

20

Litigating the case to trial also presents substantial risks. Although plaintiff and class

21 counsel believe class members’ claims are strong, it is clear that Morgan Stanley would put on a 22 vigorous defense, and it would ultimately be up to the fact-finder to determine, for example, 23 whether Morgan Stanley acted with a prohibited discriminatory intent or whether its policies had 24 a prohibited discriminatory impact that cannot be defended on job relatedness or business 25 necessity grounds.

26

In contrast to the complexity, delay, risk and expense of continuing litigation, the

27 proposed settlement will yield a prompt, certain, and substantial recovery for class members. 28

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1

E. The Parties Conducted Extensive Investigation And Analysis And The

Settlement Was Reached through Arms’ Length Negotiations.

2 The parties engaged in extensive fact-gathering and informal discovery before agreeing to

3 the terms of the proposed Settlement Agreement. In connection with settlement discussions,

4 Morgan Stanley produced a substantial number of documents (including vast amounts of data)

5 from which Plaintiff’s counsel’s experts conducted numerous data analyses. This information,

6 along with witness interviews and information regarding Morgan Stanley’s policies, alerted

7 Plaintiff to the scope of systemic problems affecting African-American and Latino Financial
8 Advisors and Registered Financial Advisor Trainees.
9 The parties participated in negotiations with the assistance of an experienced mediator,
10 Hunter Hughes. The parties’ negotiations were protracted and required multiple lengthy sessions,
11 including face-to-face meetings in March, July and August, 2007. (Dermody Decl., at ¶ 6.)

12 Under the supervision of the mediator, all negotiations were conducted at arms’ length and in

13 good faith. (Id.)

14 The extensive fact-gathering and informal discovery allowed class counsel — who are
15 experienced employment discrimination attorneys - to assess the strengths and weaknesses of the
16 claims against Morgan Stanley and the benefits of the proposed settlement under the
17 circumstances of this case. (Dermody Decl. at ¶ 7.) As a result of discovery exchanges and
18 communications with class members, class counsel were well informed regarding Morgan

19 Stanley’s policies and practices and relied on that information in negotiating the injunctive relief

20 terms of the Settlement Agreement. (Id.)
21 Class counsel were also well informed regarding the potential for monetary recovery.
22 Plaintiff’s statistical experts performed promotions and compensation analyses, and then a
23 damages analysis, using the computerized personnel and payroll data provided by Morgan
24 Stanley. (Dermody Decl. at ¶ 8.) Morgan Stanley’s experts did the same. (Id.) The parties’
25 expert calculations formed the basis for negotiations regarding the monetary terms of the

26 settlement. (Id.)

27 In sum, the, proposed Settlement Agreement is the non-collusive result of extensive
28 factual and legal analysis and protracted arms’ length negotiations between experienced and well-

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1 informed counsel under the supervision of an experienced mediator.

2

F. The Recommendations Of Experienced Counsel Favor Approval Of The

Settlement. 3

4

The judgment of experienced counsel regarding the settlement is entitled to significant

5 weight, see, e.g., Hanlon, 150 F.3d at 1026, and the recommendation of experienced class counsel

6 should be given a presumption of reasonableness. See Boyd, 485 F.Supp. at 622.

7

Class Counsel have extensive experience prosecuting and litigating employment

8 discrimination cases and complex class actions. (See Dermody Decl. ¶¶ 13-26; Klein Decl. ¶¶ 3-

9 4; Finberg Decl. ¶ 10.) Class Counsel conducted a comprehensive legal and factual investigation

10 into the claims in this case, see discussion supra, and class counsel firmly believe that the

11 proposed Settlement Agreement easily satisfies Rule 23(e)’ s requirements and is in the best

12 interest of all class members. (Dermody Decl. ¶ 10.) This considered view of experienced

13 counsel weighs heavily in favor of final approval.

14 II. 15

THE COURT SHOULD GRANT FINAL CLASS CERTIFICATION. The Court’s February 7, 2008 preliminary approval order conditionally certified an

16 injunctive relief class under Rule 23(b)(2) and a monetary relief Settlement Class under

17 Rule 23(b)(3). (See Doc. 158 at 4). The Court ruled that the injunctive-relief class satisfied all of

18 the requirements of Rule 23(a) and 23(b)(2) and that the Settlement Class satisfies all of the

19 requirements of Rule 23(a) and Rule 23(b)(3). (Id. at 5-11.) The Court also appointed the named

20 plaintiff as Class representative and plaintiff’s counsel as Class Counsel. (Id. at 11.)

21

For the reasons stated in plaintiff’s motion for preliminary approval and in the Court’s

22 February 7, 2008 Order, the Court should grant final certification to the injunctive- relief and

23 monetary-relief class and should confirm the appointment of the Class representatives and Class

24 Counsel.

25

CONCLUSION

26

For the foregoing reasons, Plaintiff respectfully requests that the Court grant final

27 approval to the parties’ settlement, grant final certification to the proposed class, and enter the 28 proposed Settlement Agreement.

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1 Dated: May 12, 2008
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
760801.5

Respectfully submitted, LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

By:

/s/ Kelly M. Dermody

Kelly M. Dermody

Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

Elizabeth A. Alexander (pro hac vice) LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 150 Fourth Avenue, North, Suite 1650 Nashville, TN 37219-2423 Telephone: (615) 313-9000 Facsimile: (615) 313-9965

James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

Adam T. Klein Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005

Attorneys for Plaintiff

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1 Kelly M. Dermody (State Bar No. 171716) Heather H. Wong (State Bar No. 238546)
2 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3 275 Battery Street, 30th Floor San Francisco, CA 94111-3339
4 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
5 email: kdermody@lchb.com email: hwong@lchb.com
6 Adam T. Klein
7 Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice)
8 OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor
9 New York, New York 10016 Telephone: (212) 245-1000
10 Facsimile: (212) 977-4005

James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

11 [Additional counsel listed on signature page]
12 Attorneys for Plaintiff

13

UNITED STATES DISTRICT COURT

14

NORTHERN DISTRICT OF CALIFORNIA

15

SAN FRANCISCO DIVISION / OAKLAND

16

17 MARGARET BENAY CURTIS-BAUER, on behalf of herself and all others similarly
18 situated,

19

Plaintiffs,

Case No. C-06-3903 TEH
PLAINTIFF’S REPLY IN SUPPORT OF FINAL SETTLEMENT APPROVAL

20 v.

21 MORGAN STANLEY & CO. INCORPORATED, f/k/a MORGAN
22 STANLEY DW INC.,

23

Defendant.

24 Pursuant to the Order granting preliminary approval of the settlement of this matter, the
25
26 parties moved for final settlement approval on May 12, 2008. (Docket No. 168.) Plaintiff also
27 petitioned for approval of attorneys’ fees and reimbursement of costs and approval of a service

28 payment for the named plaintiff at that time. (Docket Nos. 171 and 172.) The deadline for filing

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1 responses to the parties’ motion for final approval of the settlement, plaintiff’s petition for

2 attorneys’ fees, and plaintiff’s petition for approval of a service payment was May 27, 2008. (See
3 Docket No. 158 at 23.) No briefs were filed in response to the parties’ motion or plaintiff’s
4 petitions.
5 As set forth in the Supplemental Declaration of Trae Smith, filed herewith, class
6
7 members have submitted 422 claim forms, for a participation rate of over 30 %. This response by

8 class members favors final approval of the settlement.

9

Since the filing of the motion for final settlement approval, there have been no additional

10 opt outs submitted by class members. In all, twenty-three class members requested that they be
11 excluded from the settlement, and one of those class members, John P. Greer, III, rescinded his
12 request to opt-out, making a final total of twenty-two class members who have opted out of the
13
14 settlement.

15

No objections have been submitted since the parties’ motion for final settlement approval

16 was filed on May 12, 2008. The objections submitted previously on April 28, 2008, in response

17 to the parties’ motion for preliminary settlement approval, fell into the following two categories:

18 (1) 29 Objections filed by counsel for the Moore Group Objectors (the Moore Group Opt Out
19 Objectors and Supplemental Moore Group Objectors); and (2) one objection filed by an objector,
20
Billy Manning. 21

22

As set forth more fully in Plaintiff’s previous brief in support of Plaintiff’s motion for

23 final settlement approval, at least 21 of the objections were improperly filed by Moore Group Opt

24 Out Objectors who lack standing to object. Thus, there have been a total of nine objections by

25 class members who have standing to object. Eight of the nine objectors are represented by
26 counsel for the Moore Group Objectors and one, Billy Manning, simply reiterates allegations of
27 the Moore Group Objectors but appears to be unrepresented by Moore counsel. Moreover, the
28

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1 objections filed on April 28, 2008 by Moore Group Opt Outs and Supplemental Moore Group

2 Objectors merely rehash prior concerns raised by the Moore Group Objectors that the Court

3 addressed at the preliminary approval hearing and cautioned Moore counsel not to refile in its
4 Order granting preliminary approval. (See Docket No. 158 at 1, n.1.) None of the objections has
5
merit. 6

7

For the reasons set forth herein and in Plaintiff’s Memorandum of Points and Authorities

8 in Support of Joint Motion for (1) Final Approval of Class Action Settlement; (2) Certification of

9 Settlement Class; (3) Approval and (4) Distribution of Settlement Funds, Plaintiff respectfully 10 requests that the Court grant final approval of the settlement. 11

12

13 Dated: June 3, 2008
14
15

Respectfully submitted,
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

16

17

By: /s/ Kelly M. Dermody

Kelly M. Dermody 18

Kelly M. Dermody (State Bar No. 171716)

19

Heather H. Wong (State Bar No. 238546)

LIEFF, CABRASER, HEIMANN &

20

BERNSTEIN, LLP

Embarcadero Center West

21

275 Battery Street, 30th Floor

San Francisco, CA 94111-3339

22

Telephone: (415) 956-1000

Facsimile: (415) 956-1008 23

Elizabeth A. Alexander (pro hac vice)

24

LIEFF, CABRASER, HEIMANN &

BERNSTEIN, LLP

25

150 Fourth Avenue, North, Suite 1650

Nashville, TN 37219-2423

26

Telephone: (615) 313-9000

Facsimile: (615) 313-9965 27

28

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Adam T. Klein Piper Hoffman (pro hac vice) Justin M. Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
James M. Finberg (State Bar No. 114850) ALTSHULER BERZON 177 Post Street, Ste. 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064
Attorneys for Plaintiff

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
MORGAN, LEWIS & BOCKIUS LLP
ATTORNEYS AT LAW SAN FRANCISCO

James N. Penrod (State Bar No. 43030) Rebecca D. Eisen (State Bar No. 96129 ) L. Julius M. Turman (State Bar No. 226126) MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Tower San Francisco, CA 94105 Direct: 415.442.1361 Fax: 415.442.1001
Mark S. Dichter, admitted Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Tel: 215.963.5000 Fax: 215.963.5001
Kenneth L. Turnbull, admitted Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178 Tel: 212.309.6000 Fax: 212.309.6001
Attorneys for Defendant Morgan Stanley & Co. Incorporated

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

MARGARET BENAY CURTIS-BAUER on behalf of herself and all others similarly situated,
Plaintiffs
vs.
MORGAN STANLEY & CO. INCORPORATED, f/k/a/ MORGAN STANLEY DW, INC.,
Defendant.

Case No. C 06 3903 (TEH)

DEFENDANT'S REPLY MEMORANDUM IN RESPONSE TO THE OBJECTORS’ OBJECTIONS AND IN SUPPORT OF FINAL APPROVAL

Date: Time: Dept.: Before:

June 16, 2008 10:00 AM Courtroom 12, 19th Fl Hon. Thelton E. Henderson

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MORGAN, LEWIS & BOCKIUS LLP
ATTORNEYS AT LAW SAN FRANCISCO

I. INTRODUCTION
Defendant Morgan Stanley & Co. Incorporated (“Defendant” or “Morgan Stanley”) hereby replies to the objections filed on April 28, 2008 by the Moore Group of Opt-Outs, additional Opt-Outs 1, and Objectors Debra Frazier, Jonathan Glover, Latrissa Gordon, Peter Meme, Marshell Miller, Jerome Senegal, Marilyn White2, and Kenneth Winn3 (the “Objectors”). The Moore Group4, which filed objections during the preliminary approval stage of these proceedings (See Docket Nos. 95, 119, 123, 145 and 152) reasserts the same objections, along with the additional Opt-Outs, against final approval (See Docket No. 162). The Objectors5 now also assert the identical objections raised by the Moore Group during the preliminary approval hearing (See Docket No. 161). The Moore Group, the additional Opt-Outs and the Objectors are all represented by Stowell & Friedman (“Objectors’ counsel”).
Plaintiff responded to these objections in Plaintiff’s Separate Memorandum of Points and Authorities in Support of Joint Motion for: (1) Final Approval of Class Action Settlement; (2) Certification of Settlement of Class; and (3) Approval and (4) Distribution of Settlement Funds. No objections or responses to the Motion for Final Approval were filed by the May 27, 2008 deadline. In this Reply Brief, Defendant responds only to the objections that relate specifically to it and to those which Defendant believes it may more effectively address.

1 The Moore Group of Opt-Outs and additional opt-Outs includes Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Theron Cyrus, Lanta Evans-Mott, Janice Grant, John Greer, Vincent Griffin, Mark Lewers, Maurice Mabon, Carlton McDowell, Sarah Nyamuswa, James Owens, Brian Roy, Hubert Stallings, Marion Tucker, and Denise Williams. John Greer, who was initially identified as a member of the Moore Group, filed a timely rescission of his Opt-Out and, thus, may not be a member of the Moore Group.

2 Marilyn White does not have standing to object to the settlement, as she is not a member of the class by virtue of executing a General Release of All Claims against Morgan Stanley on April 21, 2006, which followed her termination. See Supplemental Declaration of Alexa B. Pappas ¶2, Exhibit A, ¶¶6-8.

3 Kenneth Winn does not have standing to object to the settlement, as he is not a member of the class by virtue of the fact that his employment with Morgan Stanley was terminated on August 30, 2002. Thus, Mr. Winn’s employment with Morgan Stanley is outside of the class period of October 12, 2002 to December 3, 2007. See Supplemental Declaration of Alexa B. Pappas ¶3.

4 The Moore Group includes Ernest Dorsey. However, Mr. Dorsey does not have standing to object the settlement. During Dorsey’s employment with Morgan Stanley, he was neither a Financial Advisor nor a Registered Financial Advisor Trainee. Thus, he is not a class member, as defined by the settlement agreement. See Supplemental Declaration of Alexa B. Pappas ¶2, Exhibit A, ¶4.

5 Objector Billy Manning also filed objections, which also reiterates allegations of the Moore Group but who so far appears to be unrepresented by Moore counsel.

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Among the arguments Objectors make in support of their claim that the settlement is unfair are: (1) the Court does not retain jurisdiction; (2) there is no reporting of the progress of the settlement to the Court; (3) only Class Counsel can enforce its provisions; (4) there are no goals and timetables, and Morgan Stanley is only required to use its “best efforts” with respect to increasing representation numbers of African-Americans and Latinos in hiring, compensation, retention, partnerships and promotions; (5) it is inappropriate to use Dr. Kathleen Lundquist as one of the Industrial Psychologists; (6) the agreement does not address mandatory arbitration; (7) that the new account distribution policy was not made available to former employees; (8) the Supreme Court’s Ledbetter decision justifies a higher settlement amount; and (9) Morgan Stanley should be required to reform its teaming policies.
As demonstrated below, these arguments ignore or misread specific provisions in the Settlement Agreement, are inconsistent with agreements Objectors’ counsel entered into and rely upon, and are based on erroneous understandings of the facts and law. Therefore, this Court should reject these objections and grant final approval of the settlement. II. ARGUMENT
THIS COURT SHOULD GRANT FINAL APPROVAL OF THE SETTLEMENT AGREEMENT BECAUSE THE OBJECTIONS RAISED ARE WITHOUT MERIT.
A. Contrary To The Assertion Of The Objectors, This Court Maintains Jurisdiction Over the Enforcement of This Settlement Agreement.

Objectors argue that the settlement is unfair because this Court does not retain jurisdiction over the settlement. (See Docket No. 161 at Pg. 9). This objection is based on a misreading of the settlement agreement. The settlement agreement filed by the parties on February 11, 2008, provides that the Court retains jurisdiction to enforce the terms of the settlement agreement (see Settlement Agreement, Docket No. 159, at Pg. 47).6
This objection with which the Court has already dealt should be overruled.

6 Objectors’ counsel raised this concern during the preliminary approval hearing. The parties represented to the Court at that time that it was their understanding that the final judgment did indeed reserve continuing jurisdiction in the Court. The Settlement Agreement was revised to specifically state that the Court would retain jurisdiction to enforce the terms of the settlement throughout the settlement term.

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B. Objectors Ignore the Extensive Reporting Requirements of the Settlement Agreement.

Objectors also argue that the settlement is unfair because it does not require Morgan

Stanley to report its progress with respect to African-American and Latino representation,

compensation and promotion into management directly to the Court. (See Docket No. 161, Pg. 9).

This objection fails to consider the extensive reporting schemes that the settlement

agreement requires of Morgan Stanley, including extensive reporting to the Diversity Monitor,

Fred W. Alvarez, Esq. (Docket No. 159 at Pg. 29, Sec. VII G.1.). The Diversity Monitor will

receive monthly reports from Morgan Stanley regarding complaints of race discrimination and

resolution of investigations of such complaints. (Id. at. pg. 30, Sec. VII G.1.a). The Diversity

Monitor will also receive quarterly reports regarding branches in which Branch Managers have

filed reports reflecting that they have deviated from the account distribution process. (Id. pg. 30).

The Diversity Manager will also monitor account distribution data, exception reports, and

complaints about policy compliance. (Id.) If the Diversity Monitor identifies issues of potential

non-compliance, the Diversity Monitor will inform Morgan Stanley and Class Counsel. Where

potential non-compliance has been identified, the Diversity Monitor shall have the right to audit

the activities in a branch, by reviewing documents, asking Branch Managers to provide

explanations and, if necessary, speaking to Financial Advisors in the branch. (Id.)

Diversity Monitor will also review the diversity-related quarterly self assessment process

for field sales management and the diversity component of the branch management compensation

process (Id. at Pg. 30.) and monitor the bi-annual training of management on EEO policy, and

policies against discrimination and retaliation, and ensure that all training agreed to has been

implemented. (Id. at g. 31.). The Diversity Monitor’s role will include review of how Human

Resources handles investigations and the resolution process for inquiries and complaints as well

as annual results of the exit interviews of African Americans and Latino Financial Advisors and

Registered Financial Advisor Trainees. (Id. at Pg. 32.)

The Diversity Monitor will also be responsible for providing reports to Class Counsel and

Morgan Stanley at least semi-annually regarding the items monitored including the analysis of

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account distribution system. (Id. at pg. 31.) The Diversity Monitor shall report any incidents of potential material non-compliance with the settlement agreement to Class Counsel and Morgan Stanley and may do so on a more frequent basis than semi-annually. (Id. at pg. 31.) The Diversity Monitor will also maintain records throughout the terms of this settlement. (Id. at pg. 31.)
In addition, the settlement agreement also provides for the joint appointment of Industrial Psychologists Dr. Kathleen Lundquist and Dr. Irwin Goldstein (Docket No. 159, at pg. 31, VII G.2.) Drs. Lundquist and Goldstein shall work with Morgan Stanley to develop innovative, meaningful, novel, state-of-the-art programs. The Industrial Psychologists shall monitor the implementation of the policies and initiatives that Morgan Stanley is obligated to undertake and on an annual basis monitor the representation rates of African-Americans and Latino in the Registered Financial Advisor Trainee and Financial Advisor positions and shall make Morgan Stanley’s Diversity Monitor aware of the progress. (Id.)
Ironically, a review of the two settlement agreements cited most by Objector’s counsel, and for which they served as Class Counsel (Martens v. Smith Barney Inc., 96 C-3779 (CBM) (S.D.N.Y.) (“Martens”) and Cremin v. Merrill Lynch, Case No. 96 C-3773 (N.D. Ill.) (“Cremin”)), do not require reporting of ongoing progress of the settlements to the court. (See Supplemental Declaration of Mark S. Dichter, (“Dichter Supp. Decl.”) ¶¶ 2-3, Exhibits A and B). Thus, Objectors counsel’s argument that a failure to include provisions requiring ongoing reporting to the Court demonstrates the unfairness of a settlement is extremely disingenuous. Given that neither the Cremin nor Martens settlements include a Diversity Monitor or Industrial Psychologists with such extensive reporting roles, the instant settlement provides for far more reporting that Objector’s counsel has previously required in its settlements.
C. The Limitation of Enforcement To Class Counsel Is Identical to the Provisions in the Cremin and Martens Settlements

Objectors’ counsel, again, is disingenuous in their efforts to advance false issues as a

means to defeat approval of the settlement. Both the Cremin and Martens settlement agreements

contain the identical provisions limiting enforcement to Class Counsel that they now raise

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objections about.7 Objectors counsel’s argument that inclusion of the same provision in the instant Settlement Agreement is unfair should be rejected.
D. The Requirement To Use “Best Efforts,” Is Similar To the Provisions in the Cremin Settlement.
The Objectors attack the settlement because it does not include measurable goals and timetables, but only requires Morgan Stanley to use its best efforts to meet the diversity goals of the settlement agreement. (Docket No. 161 at 9-10.) Objectors’ counsel cite their July 1998 settlement in Martens, which included goals and timetables, as precedent that such provisions are necessary in employment discrimination cases. (Id.).
However, Objectors’ counsel conveniently ignore their stipulated settlement in Cremin, a gender discrimination class action against Merrill Lynch which was settled after Martens in September of 1998, and which contained no goals and timetable terms. (See Dichter Supp. Decl., Ex. B.) In fact, like the settlement in the instant matter, Cremin required Merrill Lynch to comply in “good faith” with diversity programs. (Dichter Supp. Decl., Ex. B, Sec. 8, pg 58).
As Objectors’ counsel have sought and obtained court approval of a settlement with provisions that mirror the ones they now complain about in the instant case, this Court should overrule any such objections.
E. Plaintiff’s Objection to the Role of Dr. Lundquist And Unwarranted Attack On Her Credentials Is Based on Erroneous Allegations
The Objectors object to the joint appointment of Industrial Psychologist Kathleen Lundquist because of her work in other cases (Docket No. 161 at 9 11.) and because she is also serving as the industrial psychologist for Augst-Johnson settlement. Dr. Lundquist is a highly experienced professional, who brings an exceptional level of skill based on her expert experience working with both employers and employees in discrimination matters and the implementation of

7 In Martens, the settlement stipulation provided that “only Class Counsel [Stowell & Friedman], on behalf of the class, and Smith Barney shall have standing authority to bring any action to enforce this settlement stipulation. (Dichter Supp. Decl., ¶2, Exhibit A, ¶16.6.) Likewise, in Cremin, the agreement provides “except with respect to [the internal dispute resolution process], Class Counsel and the firm shall have the exclusive right to enforce the provisions of the settlement stipulation, and no other person shall have the right to enforce the provisions of the settlement stipulation. . . .” (Dichter Supp. Decl. ¶3 Exhibit B, ¶ 16.9)

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programmatic relief. This issue was also addressed at the preliminary approval stage. The Court

found that “the injunctive relief package is not simply a ‘carbon copy’ of the relief that Morgan

Stanley has already agreed to in the Augst-Johnson settlement” (Docket No. 130 at 6) and that

“the industrial psychologists and diversity monitor provided for in the settlement will be devoting

additional time, analysis, and resources to address race issues, and not displacing relief already

agreed to in Augst-Johnson.” (Id.)

In ordering preliminary approval and citing the declaration of Dr. Lundquist, the Court

found that “the programmatic changes that Morgan Stanley will make as a result of the settlement

and of [Lundquist’s] recommendations will improve productivity, retention, and hiring of

minority financial advisors.” (Docket No. 158 at 15.) Based on this and other facts, the Court

found that “the programmatic relief set out in the settlement agreement is substantive,

meaningful, and valuable to the class.” (Id. at 16.)

The unwarranted attacks on the credentials of Dr. Lundquist and the suggestions that she

is somehow biased in favor of employers are completely unjustified and based on erroneous

claims. For example, in the McReynolds v. Sodexho case where Objectors claim that Dr.

Lundquist “defended employers’ policies,” Dr. Lundquist was in fact, the designated industrial

psychologist in the settlement, jointly selected by the parties and approved by the court, rather

than defending the employers’ policies (See Supplemental Declaration of Kathleen K. Lundquist

(“Lundquist Supp. Decl.” at ¶3)). Dr. Lundquist’s role was to develop new Human Resource

processes, including job analyses and selection processes, and to help the company become

compliant with the uniform guidelines. (Id.). Furthermore, Objectors conveniently ignore the fact

that Dr. Lundquist has testified on behalf of plaintiffs in a number of employment discrimination

class actions. (Lundquist Supp. Decl. at ¶7). Finally, Objectors “concern” that Dr. Lundquist

lacks financial services expertise is completely wrong. Dr. Lundquist has served as a consultant

for Citigroup, UBS, Goldman Sachs, Smith Barney and American Express; all of which are

financial services companies, (See Lundquist Decl. at ¶8). There simply is no valid basis to

challenge Dr. Lundquist.

///
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F. Morgan Stanley Does Not Make Arbitration Mandatory Objectors also take issue with the settlement because it does not include an agreement not
to force mandatory arbitration of civil rights claims. (Docket No. 161 at 21.) Again, this objection has been previously rejected by the Court at the preliminary approval stage. (Docket No. 95 at 23). Further, the objection is without substance as there is no evidence in the record that Morgan Stanley requires Financial Advisors to arbitrate discrimination claims. There is no reason to reconsider this argument and it should be rejected.
G. The Account Distribution Policy And PowerRankings Are Available To Current Morgan Stanley Employees
The Objectors reassert the argument made by the Moore Group during the preliminary approval proceedings that they should be permitted to have access to the Account Distribution Policy and PowerRanking system (Docket No. 161 at 11-12.). This argument fails for the same reasons that this Court previously rejected them.
As the Court noted in its preliminary approval order, “The Power Ranking formula is already in place as part of the Augst-Johnson settlement; disclosure of the formula here will serve no purpose.” (Docket No. 158 at 16). Additionally, the Account Distribution Policy and PowerRanking System are now available to all current Morgan Stanley employees through the Augst-Johnson settlement. Therefore, this objection should be rejected.
H. The Supreme Court’s Decision In Ledbetter v. Goodyear Tire Supports A Lower, Not Higher, Settlement Amount

In attacking the settlement, Objectors make reference to a statement by plaintiffs’ counsel

of a $36 million “compensation shortfall.” However, any attempt to equate a compensation

shortfall to a measure of potential damages in this case ignores the nature of the compensation

system at issue and the claims in this case. Financial Advisors are compensated on a commission

basis, based on the revenue that they generate. Thus, any difference or “shortfall” in

compensation is directly attributable to the difference in the revenue generated. The relevant

question is “what are the monetary effects, if any, of the actions that Morgan Stanley took that

were both discriminatory and impacted a Financial Advisors’ earnings?” The existence of a

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compensation disparity simply reflects that a Financial Advisor generates less revenue, but does

not at all establish the ultimate issue of whether there was a discriminatory act for which Morgan

Stanley was responsible that caused the disparity.

Objectors’ counsel argue that Morgan Stanley will have the benefit of Ledbetter v. Good

Year Tire, 127 S. Ct. 2162 (2007) to argue that claims of compensation disparities, resulting from

actions taken during the settlement period, cannot be brought following the termination of the

settlement period. (Docket No.161 at page 15). Objectors misconstrue and misunderstand the

holding of Ledbetter and the effects it has on compensation claims.

In Ledbetter, the Court held that a Plaintiff must complain about discriminatory decisions

within their actionable statute of limitations period. 127 S. Ct. at 2169. Furthermore, a Plaintiff

cannot recover for a discriminatory decision that falls outside of the statute of limitations period,

even if those decisions have a present effect. Id. at 2172. Thus, under Ledbetter, the Objectors’

argument fails to appreciate that claims for past discrimination are no longer actionable, if not

previously complained about. Present-day complaints about compensation disparities based on

claims of discrimination that occurred earlier in the careers of Financial Advisors are likely no

longer actionable or recoverable, even if there were no settlement of the claims.

Thus, Ledbetter has significantly changed the value of claims based on prior acts. As for

future or present claims, neither Ledbetter nor the settlement agreement limits the ability to raise

new claims of discrimination. In fact, the settlement agreement provides for several avenues to

raise complaints, require monitoring to ensure compliance with non-discriminatory policies and a

structured mechanism to raise and pursue claims. This objection should be rejected. I. The Settlement Does Appropriately Address Partnerships and Teams

Objectors further raise an objection to the settlement because they argue that it does not

reform partnerships or teams. (Docket No. 161 at 13-14.) This concern was also raised multiple

times in the Objectors’ previously-filed objections and in the preliminary approval hearing. (See

Docket No. 95 at 22. During the preliminary approval hearing, Class Counsel also explained that

teams are not created by “a company policy per se” and that the Industrial Psychologists will be

charged with the duty of reviewing the team structure. (Id. at 73-74.).

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In an effort to support their otherwise untenable objections Objectors cite to the EEOC probable cause finding in Dodson v. Morgan Stanley, 2007 U.S. Dist. Lexis 85535 (W.D. Wash. November 8, 2007), as holding that Morgan Stanley has teaming practices which could be found to be discriminatory. Objectors’ counsel outrageously distorts the facts and procedural background of the Dodson case. Dodson involved a senior male Financial Advisor and a more junior female Financial Advisor and their mutual agreement to enter into a limited partnership to service a portion of the senior broker’s business. When the senior broker selected a male broker instead of Dodson as his partner to service a larger portion of the business, Dodson filed a claim for gender discrimination. See 2007 U.S. Dist. Lexis 85535 pg. 6.
In finding only probable cause the EEOC did not find that Morgan Stanley had partnership policies but that Morgan Stanley’s policy was to allow Financial Advisors to choose partners for themselves, which in that case resulted in “probable cause” to believe that the Charging Party was denied a partnership based on her sex. (Docket # 161, Ex. H).
Moreover, after initially dismissing Dodson’s disparate impact claim regarding discriminatory partnership policies, the Court did not find on reconsideration that Morgan Stanley had partnership policies. Instead the Court said “it is not appropriate for the Court to examine into the sufficiency of Plaintiff’s disparate impact claim [regarding partnership policies] on this Motion for Reconsideration because it is simply not appropriately before the Court at this time. Dodson v. Morgan Stanley, 2007 U.S. Dist. Lexis 85631 at pg 4 (W.D. Wash. November 20, 2007).
As the parties have determined, it is in the interest of the African-American and Latino Financial Advisors for Morgan Stanley to work with the Industrial Psychologists to develop such appropriate policies and increase minority representations in partnerships. III. CONCLUSION
This Court should overrule each and every objection raised by the Objectors and grant final approval to the settlement. As demonstrated above, the Objectors and their counsel have had meaningful participation in the settlement proceedings and have repeatedly raised objections

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which this Court, Class Counsel and Defendant have demonstrated as insufficient to defeat final approval.

Dated: June 3, 2008

By: /s/ L. Julius M. Turman L. Julius M. Turman
MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Telephone: (415) 442-1361 Facsimile: (415) 442-10001
Attorneys for Defendant Morgan Stanley & Co. Incorporated

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 Case3:06-cv-03903-TEH Document248 Filed10/22/08 Page1 of 4

1 Kelly M. Dermody (SBN 171716)
2 Heather H. Wong (SBN 238546) LIEFF, CABRASER, HEIMANN &
3 BERNSTEIN, LLP 275 Battery Street, 30th Floor
4 San Francisco, CA 94111-3339 Telephone: (415) 956-1000
5 Facsimile: (415) 956-1008 Email: kdermody@lchb.com
6 Email: hwong@lchb.com
7 James M. Finberg (SBN 114850) Eve H. Cervantez (SBN 164709)
8 ALTSHULER BERZON LLP 177 Post Street, Suite 300
9 San Francisco, CA 94108 Telephone: (415) 421-7151
10 Facsimile: (415) 362-8064 Email: jfinberg@altshulerberzon.com
11

Adam T. Klein (pro hac vice) Piper Hoffman (pro hac vice) Justin Swartz (pro hac vice) OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005 Email: atk@outtengolden.com Email: ph@outtengolden.com Email: jms@outtengolden.com

12 Attorneys for the Plaintiff [Additional Counsel Listed on Signature Page]
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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO/OAKLAND DIVISION

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MARGARET BENAY CURTIS-BAUER, on behalf of herself and all others similarly

18 situated,

Case No. C 06-3903 TEH CLASS ACTION

19

Plaintiff,

20

v.

21 MORGAN STANLEY & CO.

22

INCORPORATED, f/k/a MORGAN STANLEY DW, INC.,

23

Defendant.

24

[PROPOSED] ORDER GRANTING APPLICATION OF PLAINTIFF FOR ATTORNEYS FEES AND REIMBURSEMENT OF COSTS AND EXPENSES

Date: Time: Place: Judge:

June 16, 2008 10:00 a.m. Courtroom 12 Thelton E. Henderson

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1

The parties to this class action lawsuit alleging race discrimination against Defendant

2 Morgan Stanley & Co., Incorporated (“Morgan Stanley”) settled the action and entered into a

3 proposed Settlement Agreement that provides for comprehensive injunctive and monetary relief

4 for the class. The proposed Settlement also provides, inter alia, for an award of $800,000 in

5 attorneys’ fees and costs to Class Counsel, plus $150,000 per year during the five-year term of the

6 Settlement to cover future fees and expenses related to monitoring and enforcing the Settlement,

7 plus interest accruing on all fees and expenses from the date on which the Settlement is funded

8 until such fees and expenses are disbursed to Class Counsel. (See Settlement Agreement, Docket

9 No. 159, § XII.)

10

Plaintiff applied to this Court for preliminary approval of the Settlement Agreement and

11 the terms thereof. On February 7, 2008, this Court granted preliminary approval to the Settlement

12 Agreement attached as Exhibit 1 to this Court’s February 7, 2008 Preliminary Approval Order.

13 (Docket No. 158).

14

The Preliminary Approval Order directed that notice of the Settlement Agreement, its

15 terms, and the applicable procedures and schedules be provided to the proposed class (including

16 specific notice about the amount of attorneys fees and costs requested) and set a final Fairness

17 Hearing for June 16, 2008, to determine whether the Settlement Agreement should be granted

18 final approval, pursuant to Federal Rule of Civil Procedure 23(e), as “fair, adequate and

19 reasonable.” Proposed Class members were given an opportunity to comment on the settlement,

20 including the provision for an award of attorneys’ fees and costs to Class Counsel. No Class

21 member objected to the amount of attorneys’ fees and costs requested.

22

Class Counsel filed an Application of Plaintiff for Attorneys’ Fees and for Reimbursement

23 of Costs and Expenses (“Plaintiff’s Application”), requesting that the Court find the requested

24 amount of $800,000 in attorneys’ fees and costs to Class Counsel, plus $150,000 per year during

25 the five-year term of the settlement to cover future fees and expenses related to monitoring and

26 enforcing the settlement, plus interest accruing on all fees and expenses from the date on which

27 the settlement is funded until such fees and expenses are disbursed to Class Counsel to be fair,

28 reasonable, and adequate.

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1

NOW, THEREFORE, IT IS HEREBY ORDERED, upon consideration of the Settlement

2 Agreement; Plaintiff’s Application and supporting declarations, and the proceedings in this action

3 to date, that the Application of Plaintiff for Attorneys’ Fees and for Reimbursement of Costs and

4 Expenses in the amount of $800,000 in attorneys’ fees and costs to Class Counsel, plus $150,000

5 per year during the five-year term of the settlement to cover future fees and expenses related to

6 monitoring and enforcing the settlement, plus interest accruing on all fees and expenses from the

7 date on which the settlement is funded until such fees and expenses are disbursed to Class

8 Counsel is GRANTED.

9

Pursuant to Plaintiff’s Application and the terms of the Settlement Agreement, the Court

10 awards $800,000 in attorneys’ fees and costs to Class Counsel, plus $150,000 per year during the

11 five-year term of the settlement to cover future fees and expenses related to monitoring and

12 enforcing the settlement, plus interest accruing on all fees and expenses from the date on which

13 the settlement is funded until such fees and expenses are disbursed to Class Counsel. These

14 amounts were negotiated by the parties under the terms of the Settlement Agreement. The Court

15 finds that the amount requested in attorneys’ fees, costs, and expenses, which Morgan Stanley has

16 agreed to pay as part of the settlement of this matter, is fair and reasonable under both the

17 “lodestar” and the “common fund” methods. Specifically, the Court finds that Class Counsel’s

18 reasonable lodestar exceeds the amount Plaintiff requests in attorneys’ fees and costs. Analyzed

19 under the percentage method, the Court finds that the attorneys’ fees sought by Plaintiff are only

20 5% of the monetary relief set forth in the Settlement. That percentage is well under the Ninth

21 Circuit’s 25% benchmark, and is fair and reasonable in this case. Further, the Court finds that the

22 number of hours expended by Class Counsel in this matter is reasonable, as are the hourly rates of

23 Counsel.

24

Accordingly, this Court hereby awards $800,000 in attorneys’ fees and costs to Class

25 Counsel, plus $150,000 per year during the five-year term of the settlement to cover future fees

26 and expenses related to monitoring and enforcing the settlement, plus interest accruing on all fees

27 and expenses from the date on which the settlement is funded until such fees and expenses are

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1 disbursed to Class Counsel, and finds that those amounts are fair, reasonable, and adequate.

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3

IT IS SO ORDERED.

4 5 Dated: __1_0_/2_1_/_0_8_ 6 7

TATESTDheIltSoTn RE.ICHTenCderson
United States District Judge

UNITED S ALIFORNIA

OURT NORTH

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Judge Thelton E. Henderson

11 12

ERN DISTRICT OF C

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 United States District Court, N.D. California.
Daisy JAFFE, et al., Plaintiffs, v.
MORGAN STANLEY DW, INC., Defendant. No. C06-3903 TEH.
Jan. 19, 2007.

based on California and Michigan anti-discrimination statutes. Plaintiffs do not contend that Defendant's liability would differ under these state laws as compared with Title VII, but they do argue, without rebuttal from Defendant, that the two state statutes allow for unlimited compensatory and punitive damages while Title VII does not. Thus, the D.C. action duplicates the class claims in this case but not the subclass claims. However, the parties agree that, because the liability issues between the class and subclass claims overlap, a stay only on the class claims without a stay on the subclass claims would be meaningless.

Kelly M. Dermody, Heather H. Wong, Leiff Cabraser Heimann & Bernstein LLP, Eve H. Cervantez, James M. Finberg, Altshuler Berzon LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Bill Lann Lee, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, CA, Elizabeth A. Alexander, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, for Plaintiffs.
Rebecca D. Eisen, Gregg Paris Yates, Kent M. Roger, L. Julius M. Turman, Morgan Lewis & Bockius, LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan Lewis & Bockius LLP, New York, NY, Mark S. Dichter, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO STAY CLASS AND SUBCLASS GENDER DISCRIMINATION CLAIMS

While the parties' briefs focused primarily on the first-to-file rule, this Court need not rely on that rule because it concludes, for the reasons discussed below, that a short stay would be an appropriate exercise of the Court's inherent powers to manage its own docket. As the Ninth Circuit has explained:
A trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case. This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court. In such cases the court may order a stay of the action pursuant to its power to control its docket and calendar and to provide for a just determination of the cases pending before it.

THELTON E. HENDERSON, United States District Court Judge.

Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir.1979).

*1 This matter came before the Court on Monday, December 18, 2006, on Defendant's motion to stay Plaintiffs' class and subclass gender discrimination claims. The parties agree that the proposed class definition and class claims in this case are identical to those in Augst-Johnson v. Morgan Stanley DW, Inc., Case No. 06-C-01142-RWR, filed in the District Court for the District of Columbia on the same day as Plaintiffs filed this case.
Augst-Johnson (“the D.C. action”) does not, however, plead any claims based on state law, whereas the two subclass gender discrimination claims in this case are

At the October 30, 2006 case management conference, the parties notified the Court of the existence of the D.C. action, and Defendant represented that extensive settlement negotiations had been ongoing in that case since April 2005. The parties in the D.C. action retained Hunter Hughes as a mediator, and the parties in this case gave oral consent to this Court to contact Mr. Hughes, provided that the Court discussed only procedural matters and not the merits of the class claims or the substance of any settlement discussions in the D.C. action. Staying within these constraints, the Court spoke with Mr. Hughes by telephone in late November 2006.
Upon consideration of Mr. Hughes's comments, the Court

concludes that settlement negotiations in the D.C. action are, as Defendant represented to the Court, at a very advanced stage. Plaintiffs' doubts to the contrary are simply unfounded. Moreover, there does not appear to be any indication of collusion between the parties in the D.C. action, nor is there any sign that the plaintiffs' counsel in that case are incapable of representing the best interests of the class.

2007, at 1:30 PM. The parties shall meet and confer and file a joint case management conference statement on or before April 2, 2007.
IT IS SO ORDERED.

*2 Although the Court would be highly reluctant to dismiss the class and subclass claims in this case or indefinitely stay such claims pending resolution of the D.C. action in its entirety, Defendant does not request such extreme relief. To the contrary, Defendant asks only for a stay until March 15, 2007-a date less than two months away-and acknowledged at oral argument that, if this Court were to grant a stay, Defendant would bear a “very high burden” if they sought an extension of the stay. The Court finds Defendant's request to be reasonable in light of the advanced stage of the settlement negotiations in the D.C. action and the Court's estimation, in consultation with Mr. Hughes, of the probability that those negotiations will be successfully completed prior to Defendant's proposed deadline. Plaintiffs have also failed to persuade the Court that their interests, either individually or on behalf of the proposed class, would be prejudiced in any significant way by a two-month stay of this action.

Accordingly, with good cause appearing, IT IS HEREBY ORDERED that Defendant's motion to stay Plaintiffs' class and subclass gender discrimination claims is GRANTED. Such claims are hereby stayed until March 15, 2007.FN1 If a class settlement is reached in the D.C. action prior to that date, then the Court may consider briefly extending the stay to allow time for the class notice and opt-out process to run its course. If, however, the parties have not reached a settlement by March 15, then, as Defendant's counsel admitted at oral argument, Defendant will bear an extremely high burden of persuading the Court that an extension of the stay is warranted. The Court's decision to grant the stay is influenced by the short duration of the requested stay, and the Court will not lightly grant an extension.

FN1. Defendant does not seek a stay on Plaintiffs' individual race and age discrimination claims, and this order therefore does not affect those claims.

IT IS FURTHER ORDERED that the parties shall appear for a case management conference on Monday, April 9,

 
 DAISY JAFFE, et al., Plaintiffs v.
MORGAN STANLEY & CO., INC., Defendant No. C 06-3903 TEH
U.S. District Court, Northern District of California December 12, 2007
Elizabeth A. Alexander (Lieff Cabraser Heimann & Bernstein, LLP), Nashville, Tenn., Kelly M. Dermody and Heather H. Wong (Lieff Cabraser Heimann & Bernstein, LLP), San Francisco, Calif., Eve Hedy Cervantez and James M. Finberg (Altshuler Berzon LLP), San Francisco, Calif., and Piper Hoffman, Adam T. Klein, and Justin Swartz (Outten & Golden LLP), New York, N.Y., for plaintiffs.
Mark S. Dichter (Morgan Lewis & Bockius, LLP), Philadelphia, Pa., Kenneth J. Turnbull (Morgan Lewis & Bockius, LLP), New York, N.Y., and Rebecca Dianne Eisen, Kent Michael Roger, L. Julius M. Turman, and Gregg Paris Yates (Morgan Lewis & Bockius, LLP), San Francisco, Calif., for defendant.
Mary Stowell, Suzanne Elaine Bish, and Linda D. Friedman (Stowell and Friedman Ltd.), Chicago, Ill., Robert S. Nelson (Nelson Law Group), San Bruno, Calif., and Bari Susan Robinson (Law Offices of Bari S. Robinson), Oakland, Calif., for putative class members/objectors and third-party defendants.
Full Text of Opinion
THELTON E. HENDERSON, Senior District Judge. *991
ORDER SEEKING FURTHER BRIEFING AND SUBMISSIONS ON JOINT MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND PROVISIONAL CERTIFICATION OF SETTLEMENT
CLASS, AND VACATING HEARING DATE
This matter came before the Court on December 3, 2007 on the Parties' Joint Motion for Preliminary Approval of Class Action Settlement, Provisional Certification of Settlement Class, Approval and Distribution of Notice of Settlement, and Approval of a Schedule for the Final Settlement Approval Process.
When parties seek certification of a settlement class and approval of a class settlement agreement, this Court is responsible for ensuring fairness to all members of the purported class. Heightened judicial scrutiny is appropriate where the parties reach a settlement before class certification. 4 Newberg on Class Actions ("Newberg") § 11.27 at 51 (heightened judicial scrutiny appropriate where settlement before class certification); Manual for Complex Litigation, Fourth §§ 21.13, 21.612 (same). First, the Court must assess whether a class exists, and "pay 'undiluted, even heightened, attention' to class certification requirements . . . ." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003) (citation omitted). "Such attention is of vital importance, for a court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold." Id., quotingAmchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997). Second, this Court must carefully consider " 'whether a proposed settlement is fundamentally fair, adequate, and reasonable,' recognizing that ' i t

is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness. . . .' " Id., quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).
At the start of the hearing on the parties' Joint Motion, the Court outlined some of its concerns with certification of the provisional settlement class and preliminary approval of the settlement. Some of those concerns were assuaged at the hearing; some were not. This Order surveys those issues and seeks further briefing or supplemental submissions in support of the settlement.
Provisional Certification of a Settlement Class
1 Ms. Curtis-Bauer lacks many of the indicia upon which courts typically rely to determine that a named plaintiff will vigorously and adequately represent the class. Although a plaintiff's claims are not atypicalmerely because they include non-class claims, Satchell v. FedEx Exp., 2006 WL 3507913, *1 (N.D. Cal. December 5, 2006), In re Activision Sec. Litigation, 621 F.Supp. 415, 434 (N.D. Cal. 1985), class members provided with special "incentives" in a settlement agreement "may be more concerned with maximizing those incentives than with judging the adequacy of the settlement as it applies to class members at large." Staton,327 F.3d at 975. The significant disparity between a typical class member's monetary award and the $150,000 in additional payments Ms. Curtis-Bauer is slated to receive in combined incentive payments and settlement of non-class claims [FN1] does not necessarily create a conflict between her interests and those of the class. However, it does deprive the Court of an important indicator that her interests are aligned with those of the class.
Moreover, "class members who have actively participated in the litigation are the ones likely to be most aware of the dynamic at the negotiating table, the strength of the class claims, and the costs of pursuing the litigation."Staton, 327 F.3d at 977. But Ms. Curtis-Bauer has not been participating all along. She submitted evidence, in the form of her declaration, that she became actively involved in the suit in "July, 2007"-- presumably at least a few days before the settlement was publicly announced on August 2, 2007. There is no requirement that the class representative, rather than class counsel, negotiate the terms of a settlement, and the Court's decision about whether Ms. Curtis-Bauer is an adequate representative will not turn on the number of days, weeks, or months before the settlement *992 that she joined the litigation. Cf. Staton, 327 F.3d at 959 ("The class members are not at the table; class counsel and counsel for the defendants are.") But here, the Court cannot point to any extended involvement in the litigation by Ms. Curtis-Bauer to establish her adequacy. Accordingly, the Court is forced to look elsewhere for assurance that she has been an engaged representative since joining the case and vigorously represents the interests of the class.
The Court still lacks adequate information to make a determination whether the adequacy certification requirement has been met. See generally 4 Newberg § 11.27, quoting In re General Motors Corp. Pick-up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 792 (3rd Cir. 1995); Manual for Complex Litigation, Fourth § 22.921 at 450. The Court therefore requests supplemental briefing from the parties only about how it can judge Ms. Curtis-Bauer's adequacy as a representative under the conditions presented here--where Ms. Curtis-Bauer is receiving a significant additional payment in the form of settlement of her non-class claims, and she is relatively new to the suit. The Court also invites, but does not require, declarations describing the substance of Ms. Curtis-Bauer's involvement in the litigation and review of the settlement, or any other evidence that can show her adequacy as a representative (see also n.1 supra).

2 The Court rejects Objectors' other arguments on the propriety of provisional settlement class certification. There has been no showing that Ms. Curtis-Bauer is an unsuitable class representative for Latinos. In race discrimination suits, "courts appear willing to allow one plaintiff to represent another or several minority or affected groups . . . when the several groups are similarly situated with respect to the discrimination issues in the pleadings." 8 Newberg § 24.54. In Gaines v. Boston Herald, Inc., 998 F.Supp. 91 76 FEP Cases 1429 (D.Mass. 1998), for example, an African-American plaintiff could represent both African-American and Spanish-surnamed applicants because "evidence in this case suggests that all non-white applicants without friends and relatives at the Herald were excluded by the same hiring practices and decisions. The defendant's nepotistic hiring system made no meaningful distinction, either in its motivation or its effect, between members of different minority groups." Id.at 112-113. Another court noted that "if a class representative can present evidence that she has been discriminated against in the same general fashion as the class members, no more is necessary to satisfy the typicality requirement of Rule 23(a)." Tenniev. City of N.Y. Dept. of Social Services of N.Y. City Human Resources Admin.1987 WL 6156, *3 (S.D.N.Y. 1987); see also Leonard v. Southtec, LLC,2005 WL 2177013, *11 (M.D. Tenn. September 8, 2005) (African-American can represent African-Americans and Latinos where there is "a common injury of discriminatory treatment and a common interest in ending the alleged discriminatory treatment").
Here, Plaintiffs allege that unitary practices and policies of distributing accounts (and, consequently, compensation, business opportunity, and opportunities for advancement) applied to African-Americans and Latinos. They allege that they affected African-Americans and Latinos the same way: Plaintiffs' statistical analyses of "compensation data and representation rates" demonstrated "common patterns across the class." Dermody Decl. ¶43. Although Objectors argue on "information and belief" that African-Americans have lower representation rates, lower compensation, and higher rates of attrition than Latinos, they have not suggested that those differences are related to different discriminatory practices (and not, as one objector suggested, to some other characteristic, such as language ability). Rule 23(a)(3)'s typicality requirement can be satisfied even if class members are "denied promotion or promoted at different rates," provided that "the discrimination they allegedly suffered occurred through an alleged common practice." 474 F.3d at 1232.
The cases on which the Objectors rely all involve genuine potential conflicts between class members. In Bartleson v. Dean Witter & Co., 86 F.R.D. 657, 669 24 FEP Cases 367 (E.D. Pa. 1980), the white plaintiff alleged that she suffered from race discrimination because she was denied the benefits of an integrated workplace--an experience of discrimination fundamentally different from the discrimination that minority class members themselves allegedly suffered. The court in Payne v. Travenol Laboratories, Inc., 673 F.2d 798 28 FEP Cases 1212 (5th Cir. 1982) refused to allow a black woman to represent black males because the two groups had antagonistic *993 interests--they were literally competing for the same material handler jobs, which had previously been assigned to men. There is no discernable conflict based on race here.
Objectors have not shown how there could be a genuine conflict of interest between financial advisors and trainees of various levels of production and tenure, such that they should be represented by additional individuals. Nor have they shown that Ms. Curtis-Bauer's lack of personal knowledge about Morgan Stanley's practices today prevents her from adequately representing the class; the Plaintiffs are not litigating or settling on the basis of her personal knowledge alone.

Fairness of the Settlement
The "universally applied standard" for evaluating a settlement under Rule 23 is whether the settlement is "fundamentally fair, adequate and reasonable." In re Immune Response Securities Litigation, 497 F.Supp.2d 1166, 1169 (S.D. Cal. 2007), quoting Officers for Justice v. Civil Service Commission of the City and County of San Francisco, 688 F.2d 615, 625 29 FEP Cases 1473 (9th Cir. 1982). The court should grant preliminary approval if the settlement "appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class, and falls within the range of possible approval." Young v. Polo Retail, LLC,2006 WL 3050861at *5 (N.D. Cal. October 25, 2006) (Walker, J.) The issue is not whether the settlement "could be better," but whether it is fair, reasonable, and adequate and free from collusion. [FN2] Hanlon, 150 F.3d at 1027. " S ettlements that take place prior to formal class certification require a higher standard of fairness." Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 2003).
A disproportionately large payment to a named plaintiff can raise serious concerns about the fairness and adequacy of a settlement. Staton, 327 F.3d at 975, 977. However, although the Court is troubled by the high total payments to Ms. Curtis-Bauer, approval of those payments is not before the Court at this time, and it does appear that there are other factors the Court can review to determine if the settlement as a whole is fair. [FN3]
The parties present the injunctive relief as the centerpiece of the settlement. In light of the additional information provided at the hearing, the Court is satisfied that the injunctive relief package is not simply a "carbon copy" of the relief Morgan-Stanley has already agreed to in the Augst-Johnson settlement. The programmatic relief set out in sections VII.B, VII.C, VII.D.2.d, VII.E and VII.G appears to represent a genuine expansion rather than a dilution of relief already ordered in Augst-Johnson.Counsel clarified that the industrial psychologists and diversity monitor provided for in the settlement will be devoting additional time, analysis, and resources to addressing race issues, and not displacing relief already agreed to in Augst-Johnson.
The value of injunctive relief is, however, notoriously difficult to judge. The plaintiffs described the monetary value of the programmatic relief first as $7.5 million for both cases, then as "millions of dollars" for "diversity initiatives that are aimed squarely at the class members in this case." Pappas Decl. ¶12. At the hearing, counsel for Morgan Stanley stated *994 that the estimated dollar value of the programmatic relief includes the estimated amounts Morgan Stanley plans to spend on programs in response to recommendations made by the industrial psychologists pursuant to their analyses. The Court cannot identify anything in the Settlement Agreement that obliges Morgan Stanley to follow those recommendations, however. The Court could greatly benefit from the submission of additional evidence about the value of the programmatic relief, whether from additional experts, individuals at Morgan Stanley who can discuss in greater detail how they arrived at the estimated value, or some other source.
The Settlement Agreement also provides for a fund of approximately $16,000,000, which, after deductions for class counsel work done prior to approval ($800,000), fees for five years' worth of monitoring ($750,000), notice and claims expenses (less than $50,000), and service and individual payments to Curtis-Bauer ($25,000

and $125,000, respectively) leaves well over $14,000,000 to be divided among class members who make claims.
The Objectors have offered no analogous cases which show this monetary relief is plainly inadequate or unfair. [FN4] Before a liability finding, "a settlement likely will be less favorable to plaintiffs, and can provide only a fraction of the relief that would be appropriate post-liability." Martens, 181 F.R.D. at 265. Moreover, the settlement approval process is not supposed to be "turned into a trial or rehearsal for trial on the merits," and the settlement "is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators." Officers for Justice, 688 F.2d at 625. Nonetheless, courts do look to whether the parties have given some explanation for a discount.
The briefing submitted in advance of the hearing gave the Court no benchmark with which to judge the adequacy of the monetary relief. At the hearing, however, Plaintiff's counsel suggested that at some point, Plaintiffs estimated the value of the claims were they to prevail at trial at $36,000,000--making the $16,000,000 award a healthy 43% of the possible recovery. The Court invites the Plaintiffs to submit some evidence in support of this statement, whether by declaration of counsel, a retained expert, or some other means, which will help the Court review the fairness of the monetary award.
Finally, at the hearing, the Court raised concerns about two portions of the formula for the claim form component of class member compensation set out in the Settlement Agreement (specifically the portions which provide a Special Master will determine the amount of each award based in part on "(i) individual contribution to prosecution of the action" and "(iv) the release of individual claims that go beyond the scope of the settled class claims." Settlement Agreement VIII.D.2, at 40). At the hearing, the parties indicated that this formula was included in the Settlement Agreement in error, and that the parties intended to use the formula set out in Plaintiff's brief in support of their motion and the class notice. That formula assigns points for the number of weeks each claimant was employed during the class period, extraordinary emotional distress, and termination or constructive discharge claims. Plaintiff's Memorandum in Support of Motion at 11-12; Notice § 8, Proposed Order Exh. 2 at 13. The parties are invited to submit a corrected version of this portion of the Settlement Agreement.
Discovery Motion
At the hearing, the Court granted Objectors leave to file a supplemental brief regarding their entitlement to discovery or disclosure of work force data that Morgan Stanley revealed to the Plaintiffs during settlement negotiations. In response, Objectors noticed a discovery motion for January 21, 2008, a court holiday. Hearing on Objectors' Motion for Discovery is hereby VACATED. After the Court reviews the Motion, if it desires responsive briefing or a hearing, it will so order. *995
Conclusion
The parties are HEREBY ORDERED to submit supplemental briefing not to exceed fifteen pages, and any supplemental evidence in support of their motion, on or before January 14, 2007.
IT IS SO ORDERED.

FN1. At the hearing, Plaintiffs' counsel stated that Ms. Curtis-Bauer was releasing racial harassment claims in addition to the class claims in exchange for the non-class claim settlement of $125,000, and mentioned details not set out in the Second Amended Complaint or the parties' briefing. Plaintiff is invited to submit a declaration further detailing the nature of her non-class claims to further satisfy the Court that the additional settlement is a release of genuine claims above and beyond the class claims.
FN2. As the Court stated at the hearing, the Court finds no collusion. The Objectors intimated that the parties expanded the class definition at the last moment in exchange for the Jaffeplaintiffs' acquiescence in 2007 settlement of a parallel gender discrimination lawsuit against Morgan Stanley, Augst-Johnson v. Morgan Stanley & Co., United States District Court for the District of Columbia Case No. 06-1142. However, Plaintiff Williams filed an EEOC charge alleging "pattern and practice" discrimination against "female and minority" financial advisors in November, 2006, and the Jaffeplaintiffs entered into a tolling agreement with Morgan Stanley in January, 2007. Moreover, mediator Hunter Hughes submitted a detailed statement confirming that the negotiation of this settlement was at arm's length.
FN3. The Court rejects Objectors' vague arguments that inclusion of Latinos in the settlement makes it unfair. Objectors correctly pointed out that the inclusion of Latinos in the class might undermine the ability of African-Americans to show their dissatisfaction with the settlement if the number of African Americans in the class is in fact low - the Court could not know, for example, whether the 20 African-American objectors represent 1% or 50% of the African-American class members. However, Plaintiffs' counsel represented at the hearing that African Americans make up approximately half of the class. The parties allege that all class members are affected by the targeted practice in the same manner. The Settlement Agreement distributes monetary relief primarily according to length of service, and the programmatic relief is not necessarily "one size fits all," as the industrial psychologists are free to make recommendations tailored to recruitment, retention, and nondiscrimination of African-Americans and Latinos separately.
FN4. Objectors argue--without support by reference to authority or by declaration--that the settlement in Chemin v. Meriel Lynchwas similar and resulted in a $225 million dollar settlement to 900 class members. However, that settlement established a claims procedure under which some claimants in fact recovered nothing. See Chemin v. Meriel Lynch Pierce, Feiner & Smith, Inc., 328 F.Supp.2d 865 867 (N.D. Ill. 2004); 454 F.Supp.2d 554 (N.D. Ill 2006) (confirming arbitration award). Martens v. Smith Barney, Inc., 181 F.R.D. 243 261 77 FEP Cases 532 (S.D. N.Y. 1998) involved a similar dispute resolution process. Those settlements do not, therefore, parallel this one, where each class member will be entitled to a monetary settlement without the risks attendant in proving Morgan Stanley's liability for race discrimination.

 
 United States District Court, N.D. California.
Daisy JAFFE, et al., Plaintiffs, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH.
Feb. 7, 2008.
Kelly M. Dermody, Heather H. Wong, Leiff Cabraser Heimann & Bernstein LLP, Eve Hedy Cervantez, James M. Finberg, Altshuler Berzon LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Elizabeth A. Alexander, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, for Plaintiffs.
L. Julius M. Turman, Rebecca Dianne Eisen, Gregg Paris Yates, Kent Michael Roger, Morgan Lewis & Bockius LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan Lewis & Bockius LLP, New York, NY, Mark S. Dichter, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Defendant.
ORDER (1) PRELIMINARILY APPROVING CLASS ACTION SETTLEMENT; (2) PROVISIONALLY CERTIFYING SETTLEMENT CLASSES; (3)
DIRECTING DISTRIBUTION OF NOTICE OF THE SETTLEMENT; (4) SETTING A SCHEDULE FOR THE FINAL APPROVAL PROCESS; (5) DENYING
OBJECTORS' MOTION FOR LEAVE TO FILE ADDITIONAL BRIEFS, AND (6) DENYING MOTION FOR ACCESS TO DOCUMENTS FILED
UNDER SEAL

settlement. Both parties submitted additional briefs and declarations in support of the settlement, including an amended settlement agreement and notice.FN1 Objectors to the settlement (“the Moore Group”) have also requested discovery and move for access to certain documents filed in support of the settlement under seal.
FN1. Although the Court explicitly sought additional submissions “from the parties only,” counsel for Objectors have sought leave to file a 20-page brief and nearly two and half inches of supporting documents that address Ms. Curtis-Bauer's adequacy as a representative and point out perceived deficiencies in the settlement agreement. The request for leave to file additional submissions is DENIED. The Court will not consider a motion for reconsideration of this Order. Counsel for the Moore Group Objectors are forewarned that further repetitive submissions may subject them to sanctions under 28 U.S.C. § 1927 for vexatiously multiplying this litigation.
The Court has carefully reviewed all the documents filed by the Parties in this action in support of the settlement, and all the documents properly filed by Objectors. As set out more fully below, because the Court now has sufficient facts before it to evaluate the settlement, the Objectors' request for discovery is DENIED, and their request to obtain access to documents filed under seal is also DENIED. The Court finds that the Parties' additional submissions have assuaged its concerns about both the adequacy of representation and the fairness of the settlement, which appears at this stage to be fundamentally fair, adequate and reasonable when viewed as a whole. The Court therefore GRANTS provisional class certification and preliminary approval of the settlement.

THELTON E. HENDERSON, District Judge.

I. JURISDICTION

*1 This matter came before the Court on December 3, 2007 on the Parties' Joint Motion for Preliminary Approval of Class Action Settlement, Provisional Certification of Settlement Class, Approval and Distribution of Notice of Settlement, and Approval of a Schedule for the Final Settlement Approval Process. The Court did not grant preliminary approval of the settlement at that time. Instead, by Order dated December 12, 2007 (“Order”), the Court invited the parties to submit additional evidence and briefing in support of the

This Court has jurisdiction over the subject matter of the litigation and over all parties to this litigation, including all members of the Settlement Classes, as defined below.
II. NO DETERMINATION
This Court hereby decrees that neither the Settlement Agreement, nor this preliminary approval order, nor the fact of a settlement, are an admission or concession by the

Defendant of any liability or wrongdoing. III. REQUEST FOR DISCOVERY

disapprove the settlement. In re General Tire & Rubber Co. Sec. Litig., 726 F.2d at 1084 n. 6, citing Detroit v. Grinnell, 495 F.2d 448, 463-468 (2d Cir.1974).

The Moore Group Objectors seek discovery from the parties. First, they want “the workforce data Morgan Stanley provided to plaintiff's counsel,” including human resources, payroll, account transfer and team data. Second, the Moore Group also asks the Court to require Morgan Stanley to respond to several questions in order to allow it to evaluate the adequacy of the injunctive relief. Third, Objectors seek disclosure of the Power Ranking and the adverse impact studies Plaintiffs performed on the Power Ranking formula, along with the underlying data. Finally, Objectors want to be permitted to depose or cross-examine named Plaintiff Margaret Benay Curtis-Bauer.

Hemphill v. San Diego Ass'n of Realtors, Inc. 225 F.R.D. 616, 619-620 (S.D.Cal.2005).
As set out more fully below, this Court finds that Objectors have had meaningful participation in the settlement proceedings, the Court has sufficient facts before it to intelligently evaluate the settlement, and discovery would cause unnecessary delay. Accordingly, the Moore Group's request for discovery is DENIED. Each individual request is discussed below in the context of provisional class certification or approval of the settlement.

This Court may, in its discretion, grant discovery necessary to enable objectors to have meaningful participation in settlement proceedings. As one California district court recently summarized:
*2 Class members who object to a class action settlement do not have an absolute right to discovery; the Court may, in its discretion, limit the discovery or presentation of evidence to that which may assist it in determining the fairness and adequacy of the settlement. See e.g., In re Domestic Air Transp. Antitrust Litig., 144 F.R.D. 421, 424 (N.D.DGa.1992); In re Lorazepam & Clorazepate AntitrustLitig., 205 F.R.D. 24, 26 (D.D.C.2001); In re Ford Motor Co. Bronco II Prods. Liability Litig., Civ. A. No. MDL-991, 1994 WL 593998, 1994 U.S. Dist. LEXIS 15867 (E.D.La. Oct.28, 1994); Glicken v. Bradford, 35 F.R.D. 144, 148 (S.D.N.Y.1964); see generally A. Conte and H. Newberg, NEWBERG ON CLASS ACTIONS § 11:57 at 184 (4th ed.2002) (“NEWBERG”). “While objectors are entitled to ‘meaningful participation’ in the settlement proceedings, Girsh v. Jepson, 521 F.2d 153, 158 (3rd Cir.1975) and ‘leave to be heard,’ Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.1977), they are not automatically entitled to discovery or ‘to question and debate every provision of the proposed compromise.’ “ In re General Tire & Rubber Co. Sec. Litig., 726 F.2d 1075, 1084 n. 6 (6th Cir.1984), citing Cotton, 559 F.2d at 1331. Objectors should be allowed “meaningful participation in the fairness hearing without unduly burdening the parties or causing an unnecessary delay.” Domestic Air, 144 F.R.D. at 424. The fundamental question is whether the district judge has sufficient facts before him to intelligently approve or

IV. CERTIFICATION OF SETTLEMENT CLASSES
This Court must review the propriety of class certification under Fed. R. Civ. Pro. 23(a) and (b) in order to preliminarily approve a settlement under Fed. R. Civ. Pro. 23(e). Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir.2003). The Court “must pay ‘undiluted, even heightened, attention’ to class certification requirements....” Id. (citation omitted).
For settlement purposes, the Parties have proposed conditional certification of the following settlement classes:
• For purposes of the injunctive and declaratory relief provided in the Settlement Agreement, an injunctive-relief class certified under Federal Rules of Civil Procedure 23(a) and 23(b)(2) and consisting of:
*3 All African-Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor, Morgan Stanley DW Inc. at any time between October 12, 2002 and December 3, 2007.
• For purposes of the monetary relief provided in the Settlement Agreement, a Settlement Class certified under Federal Rules of Civil Procedure 23(a) and 23(b)(3) and consisting of:

All African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor, Morgan Stanley DW Inc. at any time between October 12, 2002 and December 3, 2007, who do not timely opt out.

Amended Complaint (“SAC”) ¶¶ 30-32 (alleging discriminatory practices and policies). The Court rejected the objection that Ms. Curtis-Bauer's claims could not be typical of those of Latino FAs and FA Trainees, even if African-American employees suffered greater harm from the same practices. Cf. Dukes, 509 F.3d at 1184 (claims typical even if some class members received different levels of pay or were denied promotion at different rates because alleged discrimination stemmed from common practice).

The injunctive relief and monetary relief settlement classes allege claims for race and color discrimination under 42 U.S.C. § 1981.
The Court hereby FINDS and CONCLUDES that these classes satisfy all the requirements for certification under Rule 23.
A. Rule 23(a)
Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is impracticable.” The proposed classes of approximately 1200 Financial Advisors (“FAs”) and Registered Financial Advisor Trainees (“FA trainees”) is sufficiently numerous that joinder is impracticable.
Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” Commonality focuses on the relationship of common facts and legal issues among class members, and has been construed permissively. Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1177 (9th Cir.2007), citing Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir.1998). Class members share common issues of fact and law regarding whether defendant Morgan Stanley's policies and practices had an adverse impact on them and whether Morgan Stanley violated 42 U.S.C. § 1981.

*4 The Court expressed concerns, however, about whether Ms. Curtis-Bauer could be an adequate representative under Rule 23(a) (4), which permits certification only if “the representative parties will fairly and adequately protect the interests of the class.” This factor requires the Court to inquire whether named plaintiffs and their counsel have any conflicts of interest with other class members, and whether they will prosecute the action vigorously on behalf of the class. Hanlon, 150 F.3d at 1020.FN2 Although the Court found that Ms. Curtis-Bauer could adequately represent Latino FAs and FA trainees and Morgan Stanley employees with other levels of production or tenure, December 12, 2007 Order at 3-5, the Court questioned 1) how it could evaluate whether Ms. Curtis-Bauer's interests were aligned with those of the class when she was slated to receive a far greater payment in combined incentive and non-class settlement awards than the average class member; and 2) how it could be assured that Ms. Curtis-Bauer has been and will be an adequate, engaged representative who can vigorously represent the interests of the class when she joined the litigation late in the settlement process. Order at 2-3. The Court invited additional briefing and submission of evidence relating to how it should judge Ms. Curtis-Bauer's adequacy as a representative under these conditions.
FN2. The Court has no doubt that Plaintiffs are represented by qualified and competent counsel.

Rule 23(a)(3) requires that “the claims or defenses of the representative parties be typical of the claims or defenses of the class.” The Court should consider whether the injury allegedly suffered by the named plaintiff and the rest of the class “resulted from the same allegedly discriminatory practice.” Dukes, 509 F.3d at 1184. In its December 12, 2007 Order, the Court found that the claims of the named Plaintiff, Ms. Curtis-Bauer, are typical because she was allegedly injured by the same discriminatory nationwide policies and practices with respect to account distribution, business opportunities, and compensation as other class members. See Second

The additional briefing and submissions by the Parties provide information apart from the economic incentives created by the class and additional awards by which the Court can judge Ms. Curtis-Bauer's adequacy as a class representative, and show that her interests parallel those of the class.
1. Ms. Curtis-Bauer Can Vigorously Represent The Class Despite Her Late Involvement

Courts have found that even class representatives who join litigation after a settlement has been reached can adequately represent the class. See, e.g., Olden v. LaFarge Corp., 472 F.Supp.2d 922, 937-39 (E.D.Mich.2007), citing Moore's Federal Practice § 23.25[6] (court may substitute a new representative after class certification); Heit v. Van Ochten, 126 F.Supp.2d 487, 494-495 (W.D.Mich.2001) (relying on the assertion of Plaintiffs' counsel that substitute named plaintiff has requisite judgment and experience to represent class well in order to approve new class representative).

Curtis-Bauer Decl.”) ¶ 10. Her first discussion with Plaintiffs' counsel about the case was in May, 2007. Id. ¶ 12. She was not presented with the settlement as a fait accompli before joining the suit; instead, she expressed interest in becoming a plaintiff, became a plaintiff, and then evaluated the proposed settlement. Id. ¶ 13. Her declaration shows that she was aware of her fiduciary duties to the class, felt capable of assessing the settlement and the approach of counsel, and found that approach appropriate to meeting the goals of the suit. Id. ¶¶ 10, 14. She suggested substantive changes which were ultimately incorporated into the settlement agreement. Id. ¶ 14.

Plaintiffs argue that the Court may conclude Ms. Curtis-Bauer is an adequate representative where the settlement secured for the class members is fair, adequate, and reasonable:
It is, ultimately, in the settlement terms that the class representatives' judgment and the adequacy of their representation is either vindicated or found wanting. If the terms themselves are fair, reasonable and adequate, the district court may fairly assume that they were negotiated by competent and adequate counsel; in such cases, whether another team of negotiators might have accomplished a better settlement is a matter equally comprised of conjecture and irrelevance.
*5 Hemphill v. San Diego Ass'n of Realtors, Inc., 225 F.R.D. 616, 622 (S.D.Cal.2005), quoting In re Corrugated Container Antitrust Litig., 643 F.2d 195, 212 (5th Cir.1981). However, the Supreme Court teaches that the Court cannot look to the settlement itself to determine that Rule 23(a) and (b)'s requirements have been met-“whether a proposed class has sufficient unity so that absent members can fairly be bound by decisions of class representatives.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 619-622, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). But while the fact of or terms of the settlement cannot show commonality, typicality, or whether there are conflicting interests within the putative class, a good settlement can, logically speaking, show that the representative was engaged, informed, and able to represent others vigorously.
Both the fairness of the settlement, discussed more fully below, and Ms. Curtis-Bauer's supplemental declaration show that she is an “adequate” representative in this sense. Her declaration explains that she is serving as class representative primarily because she wants to effect systemic change at Morgan Stanley. Supplemental Declaration of Margaret Benay Curtis-Bauer (“Suppl.

2. Payments to Curtis-Bauer
The most problematic part of the request for certification and approval of the settlement remains the large payments to Ms. Curtis-Bauer. Ms. Curtis-Bauer will seek a $25,000 incentive payment for serving as the named Plaintiff, but the Court is not obliged to approve of the payment, and Ms. Curtis-Bauer states she will support the settlement whether or not she receives the incentive payment. Suppl. Curtis-Bauer Decl. ¶ 11. This payment is not before the Court at this time.
In addition, as a material part of the Settlement Agreement, see Settlement Agreement § § III.C and V.D, Ms. Curtis-Bauer is to receive $125,000 for releasing her non-class claims.
The portion of Ms. Curtis-Bauer's declaration filed under seal shows that the non-class claims she is releasing are distinct from the class claims asserted in this action. She alleges that she endured racial harassment, including being exposed to derogatory epithets, during her employment. Although she complained about the offensive comments and conduct, Morgan Stanley allegedly failed to respond and then terminated her.
*6 These claims may well be time-barred.FN3 On the other hand, Morgan Stanley may have determined it is in its interest to forego a statute of limitations defense and settle the claims rather than defend against the suit and suffer adverse publicity stemming from allegations of racial harassment. But this Court is not called upon to determine the merit of Ms. Curtis-Bauer's separate claims or the wisdom of the settlement. Instead, it must determine whether the settlement of her non-class claims renders Ms. Curtis-Bauer an inadequate class representative (or makes the class settlement as a whole unfair).

FN3. A four-year statute of limitations applies to Ms. Curtis-Bauer's non-class claims (under 42 U.S.C. § 1981, for contract claims in California, and for “unlawful” business practices under Cal. Bus. & Prof.Code § 17200). Ms. Curtis-Bauer was terminated from Morgan Stanley in November, 2002, and the tolling agreement for class race claims in this case became effective only on January 23, 2007 (more than four years later). Plaintiffs argue that they have “legitimate” arguments that Curtis-Bauer's individual claims are timely under tolling agreements between the Objectors and Morgan Stanley, which tolled the Moore Group's individual and class race discrimination claims as of August 8, 2006, or, alternately, that Curtis-Bauer's individual claims “relate back” to the amendment of this case in October, 2006 to include plaintiff Denise Williams's individual race claims.

Nor are Objectors entitled to discovery about “the nature and precise timing of [her] involvement in this lawsuit and the settlement negotiations as well as the nature and settlement of her non-class claims” to support their speculation. Because there is no evidence of collusion between the parties during the settlement negotiations process, see December 12, 2007 Order at 6 n. 2, Objectors are not entitled to discovery concerning settlement negotiations between the parties. See In re Domestic Air Transp. Antitrust Litigation, 144 F.R.D. 421, 424 (N.D.Ga.,1992), citing Mars Steel Corp. v. Continental Illinois Nat'l Bank & Trust Co., 834 F.2d 677, 684 (7th Cir.1987). Moreover, Ms. Curtis-Bauer's supplemental declaration provides this Court with sufficient facts to determine that she is an engaged representative, that she has taken her duties as a class representative seriously, that she has released distinct non-class claims, and that her interests are aligned with those of the class. FN4 Accordingly, at this juncture, the Court finds Ms. Curtis-Bauer is an adequate representative.

Courts are traditionally concerned that plaintiffs who receive large incentives may be “tempted to accept suboptimal settlements at the expense of the class members whose interests they are appointed to guard,” and become “more concerned with maximizing those incentives than with judging the adequacy of the settlement as it applies to class members at large.” Staton v. Boeing Co., 327 F.3d 938, 975, 977 (9th Cir.2003). Here, there is no evidence that Ms. Curtis-Bauer did, in fact, fail to evaluate the settlement, sacrifice the interests of absent class members to her own, or accept an unfair settlement. As discussed more fully below, the settlement meets the standards for preliminary approval under Fed. R. Civ. Pro. 23(e). The Court is swayed by the fact that the District Court for the District of Columbia approved of a nearly identical settlement in Augst-Johnson v. Morgan Stanley, United States District Court for the District of Columbia Case No. 06-1142, with a monetary fund that provided a similar per-plaintiff award when controlled for length of service. The fact that the relief agreed to here is so close to that approved in Augst-Johnson is persuasive evidence that Ms. Curtis-Bauer did not bargain away absent class members' claims in exchange for settlement of her non-class claims. While Ms. Curtis-Bauer may or may not have been able to settle her non-class claims without the class action, there is no evidence that she has benefitted at the expense of the class . The Court declines to reject her as a representative merely because Objectors perceive an appearance of impropriety where there is no evidence and only Objectors' speculation that any improprieties have taken place.

FN4. Objectors are not entitled to view those portions of her declaration filed under seal. Plaintiff has identified her agreement regarding non-class claims made in connection with the settlement, as required by Fed. R. Civ. Pro. 23(e)(2), to the satisfaction of the Court. As the Advisory Committee Notes to the 2003 Amendments to the Rule state, “[f]urther inquiry into the agreements identified by the parties should not become the occasion for discovery by the parties or objectors.... Some agreements may include information that merits protection against general disclosure.” Here, the Court found good cause to allow the declaration describing Ms. Curtis-Bauer's allegations to be filed under seal because Morgan Stanley would suffer the loss of the confidentiality it bargained for if the allegations were made public. See Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 1212 (9th Cir.2002) (courts have granted protective orders to protect confidential settlement agreements).
B. Rule 23(b)
*7 In addition to meeting the prerequisites of Rule 23(a), a proposed class must be appropriate for certification under one of the categories in Rule 23(b). Plaintiffs seek provisional certification under both Rule 23(b)(2) and (b)(3).

To be entitled to certification under Rule 23(b)(2), Plaintiffs must show that “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief ... with respect to the class as a whole.” Fed.R.Civ.P. 23(b)(2). Civil rights cases alleging unlawful class-based discrimination are “prime examples” of such cases, Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), which can include claims for monetary damages so long as such damages are not the “predominant” relief sought. Dukes, 509 F.3d at 1186. To certify a class under Rule 23(b)(2), the court must satisfy itself that:
(1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits.
Id. (citations omitted).

at 620. Accordingly, the Court CERTIFIES the monetary relief Settlement Class as set forth above, under Rules 23(a) and 23(b)(3).
V. APPOINTMENT OF CLASS REPRESENTATIVE AND CLASS COUNSEL
As set out above, the Court finds that Class Representative Margaret Benay Curtis-Bauer has claims typical of class members and is an adequate representative of class members. The Court appoints her to serve as Class Representative of both the injunctive relief and monetary relief classes.
*8 The Court finds that Lieff, Cabraser, Heimann & Bernstein, LLP, Altshuler Berzon LLP, and Outten & Golden LLP, have, separately and collectively, extensive experience and expertise in prosecuting employment discrimination class action cases. The Court appoints these firms as Class Counsel for both the injunctive relief and monetary relief classes.

This action clearly alleges that Morgan Stanley acted on grounds generally applicable to the class-specifically, that it had “nationwide account distribution policies and practices” (including nationwide use of the Power Ranking formula) and other practices and policies that denied or restricted availability of business opportunities, compensation, and other favorable employment conditions on the basis of race. Second Amended Complaint, ¶¶ 27-33. The parties have agreed upon extensive injunctive relief which reasonable plaintiffs would have brought suit to obtain. Moreover, because Plaintiffs complain primarily of ongoing discriminatory practices, declaratory and injunctive relief would be necessary and appropriate were Plaintiffs to succeed. Accordingly, the Court hereby CERTIFIES the injunctive-relief class under Rules 23(a) and 23(b)(2).
Certification of the monetary-relief Settlement Class described above is appropriate under Rule 23(b)(3) if the Court finds that common questions of law or fact predominate over questions affecting only individual members. Here, common questions of law or fact clearly predominate, and a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Because the Plaintiffs seek class certification for settlement purposes, the Court need not inquire whether the case, if tried, would present intractable management problems. Amchem Products, Inc., 521 U.S.

VI. PRELIMINARY APPROVAL OF SETTLEMENT AGREEMENT
The Court has reviewed the terms of the [Proposed] Settlement Agreement attached as Exhibit 1, including specifically the injunctive relief provisions and the plan of allocation, and the description of the settlement in both Parties' briefs in support of preliminary approval. The Court has also read and considered the declarations, and, in some cases, supplemental declarations of plaintiff Curtis-Bauer, attorneys Kelly M. Dermody, Adam T. Klein, James M. Finberg, Mark S. Dichter, and Alexa B. Pappas, and industrial psychologists Kathleen K. Lundquist and Irwin L. Goldstein, and the report of mediator Hunter R. Hughes, in support of preliminary approval. The Court has also carefully considered the arguments of Objectors presented in their properly filed briefs and motions, specifically, in Docket Nos. 95, 129, and 152 and the declarations and other documents supporting them, and the arguments of both the Parties and Objectors at the hearing held December 3, 2007.
At the December 3, 2007 hearing and in its December 12, 2007 Order, the Court found that despite the Moore Group's suspicions, there was no evidence of collusion between the Parties during the settlement process. The settlement and Settlement Agreement are the result of

extensive, arms' length negotiations between the Parties after Class Counsel investigated the class claims and became familiar with the strengths and weaknesses of Plaintiffs' case. The involvement of an experienced mediator in the settlement process and the submission of supplemental evidence concerning Plaintiffs' analysis of workforce data it received from Morgan Stanley confirm that the settlement was not collusive.
The Court's review of the materials listed above and its familiarity with the case lead it to conclude that the proposed Settlement Agreement FN5 is within the range of possible settlement approval, such that notice to the Class is appropriate.
FN5. The revised Settlement Agreement submitted by the parties contains typographical errors in the Table of Contents. The Parties are ordered to submit a revised Settlement Agreement with a Table of Contents that correctly reflects page numbers in the agreement within five court days of the date of this Order.
In its December 12th Order, the Court concluded that the settlement was not unfair because it included Latinos as well as African Americans. The Moore Group objectors now seek discovery of the workforce data Morgan Stanley provided to Plaintiffs' counsel, including human resources, payroll, account transfer, and team data. They again argue that they believe Latino and African-American financial advisors have had different experiences at Morgan-Stanley, stemming from different stereotypes, the existence of a Latino client base, and Objectors' understanding that Latinos are not excluded from teams to the same extent that African-Americans are. They claim that access to the workforce data will show the impact of these differences on tenure and attrition, inclusion in teams, and compensation.
*9 As set out in this Court's December 12, 2007 Order, the core allegation of the Second Amended Complaint is that unitary practices and policies of distributing accounts (and, therefore, compensation and business and advancement opportunities) applied to African-Americans and Latinos. The Court is satisfied by the information provided in the Supplemental Declaration of Adam T. Klein, filed under seal for in camera inspection, that the disparities in compensation are not so great that it is unfair or inappropriate to treat African-Americans and Latinos in a similar fashion for the purposes of monetary relief.FN6 To the extent that African-American financial advisors earned

less than their Latino counterparts, that difference will be accounted for in part by the Earnings Regression Component of the monetary relief, described in the § VIII.D.1 of the Settlement Agreement, which will account for 15% of the monetary relief to each plaintiff. To the extent that African-Americans experienced higher termination or attrition rates due to low production caused by discriminatory account distribution procedures, they will be able to seek additional compensation through the Claim Form Survey component relating to termination. Settlement Agreement § VIII.D.2.
FN6. This same information satisfies the Court that there is no disparity so great as to create a conflict of interest between the two groups, such that subclasses are necessary.
The settlement is not unfair, either overall or to African-Americans as a subgroup, because it chooses to compensate class members primarily on the basis of their tenure at Morgan Stanley during the class period. Compensation shortfalls are susceptible of easy calculation, and the complaint alleges that the shortfalls stem in part from nationwide use of a formula with an adverse impact on class members. Termination claims are far more difficult to prove. The Parties can reasonably choose to focus monetary relief on the strongest or most easily proved portion of their claims as a means of compromising their claims. Accordingly, Objectors are not entitled to discovery of workforce data to attack the fairness of the settlement for African-Americans versus Latinos.
The supplemental information contained the Declaration of Adam T. Klein and supporting documents also satisfies this Court's concerns about how it could evaluate monetary relief. This declaration provides a basis for the Plaintiffs' claim at the preliminary approval hearing that the $16,000,000 settlement fund represented approximately 43% of the approximately $36,000,000 total observed race-based compensation disparities during the class period. The estimate of the amount of compensation shortfalls does not capture emotional distress damages, or damages for terminations arising from low production or constructive terminations. But again, Plaintiffs can reasonably choose to focus on pay disparities for FAs who are working at Morgan Stanley-disparities they allege stem from nationwide use of a certain formula-rather than on substantially more difficult termination claims.

This is not a case like Acosta v. Trans Union, LLC, 243 F.R.D. 377, 396 (C.D.Cal.2007), where the court denied approval under Rule 23(e) because plaintiffs' counsel had acquired virtually no information from the defendants (other than a procedures manual so heavily redacted as to be “worthless”), failed to engage an expert until after the settlement had been reached, and had only a thin understanding of the factual basis for plaintiffs' claims, how the proposed settlement remedy would work, or cost to the defendants of the settlement. Id. Here, in contrast, the Plaintiffs have had access to extensive data, have had an economics professor analyze it as part of the settlement negotiation process, have extensive knowledge of Morgan Stanley's policies and practices and of the proposed injunctive relief gained from months of active involvement in the case, and have negotiated a settlement fund that represents over 40% of the predicted disparity in compensation. The settlement amount could undoubtedly be greater, but it is not obviously deficient, and a sizeable discount is to be expected in exchange for avoiding the uncertainties, risks, and costs that come with litigating a case to trial. Again, the issue is not whether the settlement “could be better,” but whether it falls within the range of appropriate settlements. Hanlon, 150 F.3d at 1027. This settlement does so. Accordingly, this Court will not grant Objectors discovery of workforce data, or order disclosure of the privileged work product in Mr. Klein's declaration filed under seal, so that Objectors can provide an alternative valuation of damages.
*10 Next, in its December 12, 2007 Order, the Court concluded that the substantial injunctive relief provided by the settlement is an expansion, rather than a dilution, of the relief provided in the Augst-Johnson settlement, but expressed concerns about how to judge the value of that relief. Morgan Stanley submitted further briefing on the injunctive relief and the supplemental declaration of Kathleen Lundquist, one of the industrial psychologists already appointed under the Augst-Johnson settlement to work on gender issues at Morgan Stanley, and slated to work on race issues under the proposed settlement here.
Lundquist explains that based on her extensive experience, she believes that the programmatic changes that Morgan Stanley will make as a result of the settlement and of her recommendations will improve productivity, retention, and hiring of minority financial advisors. Supp. Lundquist Decl. ¶ 8. She explains that even a conservative estimate of success in those areas will increase the collective compensation to African-American and Latino FAs and FA trainees by millions of dollars over the life of the settlement agreement. Id. ¶ 9. In addition, although nothing in the settlement obliges Morgan Stanley to follow

the recommendations of the industrial psychologists, Dr. Lundquist states that based on Morgan Stanley's “stated commitment to bring about change” and the “enthusiastic feedback” she and Dr. Goldstein have already received as they start their work, she has “a high degree of confidence that our recommendations will be accepted by Morgan Stanley.” Id. ¶ 7.
Next, Morgan Stanley's counsel has submitted a declaration stating that Morgan Stanley estimates it will spend $7.5 million on “diversity initiatives that are aimed squarely at class members in this case.” Suppl. Pappas Decl. ¶ 9.
The injunctive relief in this case seems comparable to that found to be substantive and meaningful in several other race discrimination cases. See, e.g., Thomas v. Christopher, 169 F.R.D. 224, 232-233 (D.D.C.1996), rev'd in part on other grounds, Thomas v. Albright, 139 F.3d 227 (D.C.Cir.1998) (programmatic relief in settlement of foreign service officers' race discrimination case, under which defendant would create a group to monitor and advance equal employment opportunities in the Department; hire an expert consultant to evaluate job requirements, revise and expand diversity training, appoint working group to review an awards nomination process, make efforts to include an African-American on certain selection panels, improve employment data collection, revise its affirmative action plan, and agree to allow for monitoring of compliance with settlement, provided “significant reforms”); Plummer v. Chemical Bank, 579 F.Supp. 1364, 1374 (D.C.N.Y., 1984) (accelerating affirmative action goals, implementing a dispute resolution procedure, and appointing a special master to hear complaints is significant injunctive relief in race discrimination case against bank); Lurns v. Russell Corp., 604 F.Supp. 1335, 1337 (D.C.Ala.1984) (settlement that provides “backpay fund, scholarships, a minority vendor program, and substantially increased opportunities for hiring, training, transfer, and promotion,” recruiting efforts, and hiring goals provides “broad and substantial benefits to class members”).
*11 Finally, this Court notes that in the Augst-Johnson case the district court for the District of Columbia approved of a less extensive version of the injunctive relief proposed here.
Together, all these factors convince the court that the programmatic relief set out in the Settlement Agreement is substantive, meaningful, and valuable to the class.

Because the information cited above is sufficient for the Court to evaluate the proposed settlement, the Court will not allow Objectors to serve its proposed interrogatories about the adequacy of injunctive relief.FN7

The Court hereby enjoins disclosure to third parties of the documents and information discussed or exchanged during the Parties' confidential settlement negotiations and mediation to any third party not specified in the Parties' confidentiality agreements.

FN7. Nor will this Court require disclosure of the Power Ranking formula. The Power Ranking formula is already in place as part of the Augst-Johnson settlement; disclosure of the formula here will serve no purpose. Objectors are plainly not entitled to Plaintiffs' adverse impact analysis of the Power Ranking formula performed during settlement negotiations, which is their privileged work product.
Finally, the Court invited the Parties to correct the Settlement Agreement so that the formula for the Claim Form Component of class member compensation would correspond to the formula described in the proposed Class Notice. The Parties have done so.
The Court concludes that the proposed settlement is sufficiently “fair, adequate, and reasonable” viewed as a whole, such that preliminary approval of the settlement is warranted. See Officers for Justice v. Civil Service Commission of the City and County of San Francisco, 688 F.2d 615, 625 (9th Cir.1982) (“universally applied standard” is whether the settlement is “fundamentally fair, adequate, and reasonable”).

VIII. OTHER CASES ENJOINED
Pending Final Approval, the Court hereby preliminarily enjoins each member of the Settlement Classes, including any member who makes an irrevocable election to exclude himself or herself from the monetary relief Settlement Class, from commencing, prosecuting or maintaining in any court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of this Court in connection with the Settlement Agreement. The Court further enjoins any member of the Settlement Class who has not, by the deadline for opting out, made a timely, irrevocable election to exclude himself or herself from the monetary relief provisions of the Settlement Class from commencing, prosecuting or maintaining, either directly, representatively or in any other capacity, any claim that is subsumed within the Settlement Agreement.
IX. APPROVAL OF THE FORM AND MANNER OF DISTRIBUTING CLASS NOTICE AND CLAIM FORM

Therefore, IT IS HEREBY ORDERED THAT:
1. The [Proposed] Settlement Agreement (with the changes required in footnote 5, supra ) and the settlement it embodies are hereby PRELIMINARILY APPROVED. Final approval and entry of the Settlement Agreement is subject to the hearing of any objections of members of the Settlement Class to the proposed settlement embodied in the Settlement Agreement, other than objections by members of the Moore Group that this Court has already considered and ruled upon.
2. Pending the determination of the fairness of the Settlement Agreement, all further litigation of this action is hereby STAYED.
VII. CONFIDENTIALITY

*12 The parties have also submitted for this Court's approval a proposed Class Notice, attached hereto as Exhibit 2, and a proposed Claim Form, attached hereto as Exhibit 3, which the Court has carefully reviewed. The Court finds and concludes as follows:
1. The proposed Class Notice is the best notice practicable under the circumstances and allows Class Members a full and fair opportunity to consider the proposed Settlement. The proposed plan for distributing the Class Notice and Claim Form, which are attached as exhibits to the Settlement Agreement, likewise is a reasonable method calculated to reach all members of the Class who would be bound by the Settlement. Under this plan, the Claims Administrator will distribute the Class Notice and Claim Form to Settlement Class Members by first class U.S. Mail to their last known addresses. There is no additional method of distribution that would be reasonably likely to notify Class Members who may not receive notice pursuant to the proposed distribution plan.

2. The Class Notice fairly, plainly, accurately, and reasonably informs Class Members of: (1) appropriate information about the nature of this litigation, the settlement class, the identity of Class Counsel, and the essential terms of the Settlement Agreement, including injunctive relief and the plan of allocation; (2) appropriate information about Class Counsel's forthcoming application for attorneys' fees, the proposed service payments to Class Representative and other payments that will be deducted from the settlement fund; (3) appropriate information about how to participate in the Settlement; (4) appropriate information about this Court's procedures for final approval of the Settlement Agreement and Settlement, and about class members' right to appear through counsel if they desire; (5) appropriate information about how to challenge or opt-out of the Settlement, if they wish to do so; and (6) appropriate instructions as to how to obtain additional information regarding this litigation, the Settlement Agreement.
3. Similarly, the proposed Claim Form allows members of the Settlement Classes a full and fair opportunity to submit a claim for proceeds in connection with the Settlement. Moreover, the Claim Form fairly, accurately, and reasonably informs Settlement Class Members that failure to complete and submit a Claim Form, in the manner and time specified, shall constitute a waiver of any right to obtain any share of the Settlement Payment.
4. The Court finds and concludes that the proposed plan for distributing the Notice and Claim Form (“Notice Materials”) will provide the best notice practicable, satisfies the notice requirements of Rule 23(e), and satisfies all other legal and due process requirements.
5. Accordingly, the Court hereby ORDERS as follows:

Morgan Stanley shall provide the Claims Administrator with computer readable information, in a format acceptable to the Claims Administrator, that contains the full names, social security numbers, last known addresses, start dates and, as applicable, end dates of employment in Class positions with Morgan Stanley from October 12, 2002 to December 3, 2007.
E. Prior to the mailing of the Notices, the Claims Administrator will update any new address information for potential class members as may be available through the National Change of Address (“NCOA”) system.
F. Within 20 days of the Preliminary Approval Date, the Claims Administrator shall mail, via first class postage, the Notice Materials to all known potential Settlement Class members at their last known address or at the most recent address that may have been obtained through the NCOA. The Claims Administrator will trace all returned undeliverable notices and re-mail to the most recent address available.
G. The Claims Administrator shall take all reasonable steps to obtain the correct address of any Class Members for whom the notice is returned by the post office as undeliverable. The Claims Administrator shall notify Class Counsel and counsel for Morgan Stanley of any mail sent to Class Members that is returned as undeliverable after the first mailing as well as any such mail returned as undeliverable after any subsequent mailing(s).
H. The Claims Administrator shall take all other actions in furtherance of claims administration as are specified in the Settlement Agreement.

A. The form of the Notice Materials is approved.

X. PROCEDURES FOR FINAL APPROVAL OF THE SETTLEMENT

B. The manner of distributing the Notice Materials is

approved.

A. Fairness Hearing

C. Promptly following the entry of this Order, the Claims Administrator shall prepare final versions of the Notice Materials, incorporating into the Notice the relevant dates and deadlines set forth in this Order.
*13 D. Within ten days following entry of this Order,

The Court hereby schedules a hearing to determine whether to grant final certification of the Settlement Classes, and final approval of the Settlement Agreement (including the proposed plan of allocation, injunctive relief, payment of attorneys' fees and costs, and service payments to the Class Representative) (the “Fairness Hearing”) for June 16, 2008 at 10:00 a.m. at the United

States District Court for the Northern District of California, Courtroom 12, 19th Floor, 450 Golden Gate Avenue, San Francisco, California.
B. Deadline to Request Exclusion from the Settlement
1. Class members may exclude themselves, or opt-out, of the monetary relief provisions of the class settlement. Any request for exclusion must be in the form of a written “opt-out” statement sent to Class Counsel and Counsel for Morgan Stanley. A person wishing to opt-out must sign a statement which includes the following language:
I understand that I am requesting to be excluded from the class monetary settlement and that I will receive no money from the settlement fund created under the Settlement Agreement entered into by Morgan Stanley. I understand that if I am excluded from the class monetary settlement, I may bring a separate legal action seeking damages, but might receive nothing or less than what I would have received if I had filed a claim under the class monetary settlement procedure in this case. I also understand that I may not seek exclusion from the class for injunctive relief and that I am bound by the injunctive provisions of the Settlement Agreement entered into by Morgan Stanley.
*14 2. To be effective, this opt-out statement must be received by Class Counsel and counsel for Morgan Stanley on or before sixty one (61) days after the Notice is to be mailed to Class Members, that is, by April 28, 2008. Only those class members who request exclusion in the time and manner set forth herein shall be excluded from the class for monetary relief purposes. Pursuant to Federal Rules of Civil Procedure 23(b)(3) and (c)(2), the terms and provisions of the Settlement Agreement concerning monetary relief shall have no binding effect on any person who makes a timely request for exclusion in the manner required by this Order.
3. Class Counsel shall file copies of all timely requests for exclusion, not timely rescinded, with the Court prior to the Fairness Hearing, redacting Social Security numbers and home addresses.

statement shall include the following language:
I previously submitted an opt-out statement seeking exclusion from the class monetary settlement. I have reconsidered and wish to withdraw my opt-out statement. I understand that by rescinding my opt-out I may be eligible to receive an award from the claims settlement fund and may not bring a separate legal action against Morgan Stanley seeking damages with respect to the Released Claims.
A class member wishing to submit such a rescission statement shall sign and date the statement and cause it to be delivered to Class Counsel and counsel for Morgan Stanley no later than 75 days after the Notice is to be mailed to class members, that is, before May 12, 2008.
C. Defendant's Right to Rescind Agreement
If the number of individuals who opt out of the Settlement Class in the manner provided in this Order exceeds the number in Appendix 1 to the Settlement Agreement, Docket No. 100, filed in this Court under seal on November 15, 2007 (not including persons who have, before August 2, 2007, filed and served lawsuits, alleging race or color discrimination), Morgan Stanley, at its sole option, shall have the right to void the Settlement on the 30th day after the deadline for requests for exclusion. If Morgan Stanley exercises this option, all of Morgan Stanley's obligations under the Settlement Agreement shall cease to be of any force and effect, and the Settlement Agreement and any orders entered in connection therewith shall be vacated, rescinded, cancelled, and annulled, and the parties shall return to the status quo in the Civil Action as if the parties had not entered into the Settlement Agreement. In addition, in such event, the Settlement Agreement and all negotiations, court orders, and proceedings related thereto shall be without prejudice to the rights of any and all parties thereto, and evidence relating to the Settlement Agreement and all negotiations shall not be admissible or discoverable in the Civil Action or otherwise.
D. Deadline for Filing Objections to Settlement and [Proposed] Settlement Agreement

4. Class members shall be permitted to withdraw or rescind their opt-out statements by submitting a “rescission of opt-out” statement to the Class counsel and counsel for Morgan Stanley. The rescission of opt-out

*15 1. Any Class Member who has not opted out of the monetary relief Settlement Class and wishes to object to the fairness, reasonableness or adequacy of the Settlement

Agreement or the Settlement must do so in writing. Class Members who have timely objected to the Settlement in writing may also appear at the Fairness Hearing. To be considered, any objection to the final approval of the Settlement Agreement must state the basis for the objection and be mailed to Class Counsel and Counsel for Morgan Stanley, at the addresses provided in the Class Notice, via First Class United States mail, postage prepaid, received no later than sixty one (61) days after the Notice is to be mailed to Class Members, that is, by April 28, 2008. An objector who wishes to appear at the Fairness Hearing, either in person or through counsel hired by the objector, must state his or her intention to do so at the time the objector submits his/her written objections. Objections raised at the Fairness Hearing will be limited to those previously submitted in writing. Any member of the class who does not timely file and serve such a written objection shall not be permitted to raise such objection, except for good cause shown, and any member of the class who fails to object in the manner prescribed herein shall be deemed to have waived, and shall be foreclosed from raising, any such objection.
2. Class Counsel shall file copies of all timely objections with the Court prior to the Fairness Hearing, redacting Social Security numbers and home addresses.
E. Deadline for Submitting Claims Forms

her address. Failure of a Settlement Class member to keep the Claims Administrator apprised of his or her address may result in the claim being denied or forfeited.
F. Deadline for Submitting Motion Seeking Final Approval
No later than 35 days before the Fairness Hearing, May 12, 2008, Plaintiff shall file a Motion for Final Approval of the Settlement and Settlement Agreement. Any objections or responses to the Motion shall be filed no later than 20 days before the Fairness Hearing, by May 27, 2008. On or before 13 days before the Fairness hearing, June 3, 2008, the Parties may file with the Court a reply brief responding to any filed objections.
G. Deadline for Petition for Attorneys Fees
*16 Class Counsel shall file with this Court their petition for an award of attorneys' fees and reimbursement of expenses no later than 35 days before the Fairness Hearing, May 12, 2008. Any objections or responses to the petition shall be filed no later than 20 days before the Fairness Hearing, by May 27, 2008. Class Counsel may file a reply to any opposition to memorandum filed by any objector no later than 13 days before the Fairness hearing, June 3, 2008.

A Class Member who does not opt out will be eligible to a share of the settlement benefit. To receive this share, such a Class Member must properly and timely complete a Claim Form in accordance with the terms of the Settlement Agreement. To be effective, the Claim Form must be sent to the Claims Administrator at the address provided in the Class Notice postmarked no later than 86 days after the Notice is to be mailed to Class Members, that is, by May 23, 2008. Failure to postmark a completed Claim Form by the Claim Filing Deadline shall bar the Settlement Class member from receiving any monetary award pursuant to the proposed Settlement Agreement. Absent a showing of good cause for late Claim Form, Settlement Class members who do not file timely and valid Claim Forms shall nonetheless be bound by the judgment and release in this action as set forth in the proposed Settlement Agreement, unless that Settlement Class member timely opts out of the Settlement.

H. Deadline for Petition for Approval of Service Payments
Class Counsel shall file with this Court their petition for an award of service payments to the Class Representative no later than 35 days before the Fairness Hearing, May 12, 2008. Any opposition or responses to the petition shall be filed no later than 20 days before the Fairness Hearing, by May 27, 2008. Class Counsel may file a reply to any opposition to memorandum filed by any objector no later than 13 days before the Fairness hearing, June 3, 2008.
XI. PLAINTIFF'S AND CLASS MEMBERS' RELEASE

It shall be the sole responsibility of each member of the Settlement Class who seeks a monetary award to notify the Claims Administrator if the class member changes his or

If, at the Fairness Hearing, this Court grants Final Approval to the Settlement and Settlement Agreement, Named Plaintiff and each individual Settlement Class member who does not timely opt out will release claims,

as set forth in Settlement Agreement, by operation of this Court's entry of the Judgment and Final Approval, regardless of whether he or she submits a Claim Form or receives any share of the Settlement Fund.
XII. APPOINTMENT OF CLAIMS ADMINISTRATOR
Settlement Services, Inc. of Tallahassee, Florida is hereby appointed Claims Administrator to carry out the duties set forth in this Order and the Settlement Agreement.
IT IS SO ORDERED.

 
 FACTUAL BACKGROUND

United States District Court, N.D. California.
Daisy JAFFE, et al., Plaintiffs, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH.
June 2, 2008.
Kelly M. Dermody, Heather H. Wong, Lieff Cabraser Heimann & Berstein LLP, Eve Hedy Cervantez, James M. Finberg, Altshuler Berzon LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Elizabeth A. Alexander, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, for Plaintiffs.

This is an ongoing employment discrimination class action against Defendant Morgan Stanley. Denise Williams, an African-American financial advisor at Morgan Stanley, became a named plaintiff in this action in 2006. In the Amended Complaint, filed October 12, 2006, Williams asserted class gender discrimination claims under federal and Michigan law, and individual race discrimination claims under Title VII, 42 U.S.C. § 1981, and Michigan law. The parties stipulated to dismissal of her Title VII claims until she obtained a right-to-sue letter from the EEOC, and then stayed her remaining claims to coincide with the Court-imposed stay of the class gender claims during mediation of class gender claims against Morgan Stanley in Augst-Johnson v. Morgan Stanley, United States District Court for the District of Columbia Case No. 06-01142 RWR.

L. Julius M. Turman, Morgan Lewis & Bockius LLP, San Francisco, CA.
Rebecca Dianne Eisen, Gregg Paris Yates, Kent Michael Roger, Morgan Lewis & Bockius LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan Lewis & Bockius LLP, New York, NY, Mark S. Dichter, Philadelphia, Philadelphia, PA, for Defendant.
ORDER VACATING HEARING DATE AND DENYING DENISE WILLIAMS' MOTION FOR LEAVE TO FILE INDIVIDUAL COMPLAINT AND TO TRANSFER TO THE EASTERN DISTRICT OF
MICHIGAN

In January, 2007, after Williams received her right-to-sue letter, she informed Morgan Stanley of her intent to amend the complaint to add class-wide race discrimination claims. The parties entered into a tolling agreement so that they could explore settlement of the race discrimination claims, effective January 23, 2007, which provided that as of that date,
the running of any unexpired statute of limitations applicable to the individual and class claims for race discrimination arising from Williams' employment ... shall be tolled indefinitely, until the expiration of this Agreement .... this Agreement will not have the effect of reviving any claims that were already time-barred as of the Effective Date of this Agreement.

THELTON E. HENDERSON, District Judge.
*1 The Court has reviewed Denise Williams' Motion for Leave to File an Individual Complaint and Transfer the Complaint to the Eastern District of Michigan, along with Defendant Morgan Stanley's Opposition to the Motion. Ms. Williams did not timely file a Reply. The Court has determined this matter is appropriate for resolution without oral argument. The hearing on the motion, currently set for June 9, 2008 is hereby VACATED, and Williams' ex parte motion to change the hearing date is DENIED. The Motion for Leave to File Individual Complaint is DENIED.

Declaration of Mark S. Dichter in Support of Defendant's Response to Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval, filed November 19, 2007, Exh. A.
In approximately August, 2007, a settlement was reached on the race claims, and on August 17, 2007, the parties filed both a Second Amended Complaint alleging class race claims and a settlement agreement with the Court. As Ms. Williams explains in a declaration in support of class members' objections to the settlement, filed April 28, 2008, she felt the settlement agreement was inadequate and that she could not adequately represent a class of Latino plaintiffs. While the parties were preparing for preliminary approval of the settlement, she informed

plaintiffs' counsel that she would opt out.
*2 Accordingly, Williams and Morgan Stanley entered into a second Tolling Agreement on October 30, 2007, which provided that, as of the effective date of the agreement, the parties would “suspend all actions related to Williams' individual claims of race and age discrimination, known and unknown.” The parties further agreed:

and Michigan law. (Counts, IV, V, and VII). The individual complaint also adds claims for racial steering of clients in violation of 42 U.S.C. § 1981 (Count III), and breach of contract, promissory estoppel, breach of implied contract and unjust enrichment, fraud in the inducement, tortious interference with business relationships, and intentional infliction of emotional distress. (Counts VIII-XIII).

... that all applicable statutes of limitations for Williams' individual race and age discrimination claims shall be tolled for forty-five (45) days from the postmark date of Williams' notification that she elects to opt out of the monetary portion of the Settlement.... Thereafter, Williams may dismiss her claims alleged in the Northern District of California without prejudice, and refile individual claims of race and age discrimination in another judicial district in New York or Michigan.

In her Motion, Williams explains that she fears Morgan Stanley may raise a statute of limitations defense if she simply dismisses her claims in this case and re-files in Michigan, because she has “not received confirmation that Defendant will consider her claims as filed and preserved from the time she filed a charge of discrimination and was added to this lawsuit.” Motion at 2. Presumably, Ms. Williams hopes to argue that the amendment will relate back to the date of her original complaint under Fed. R. Civ. Pro. 15(c), and thereby avoid a statute of limitations defense.

Williams' Motion for Leave To File Individual Complaint

(“Motion”), Exh. B.

Morgan Stanley opposes the motion.FN2

Williams sent her opt-out notice on March 20, 2008. The opt-out notice provides that “I understand that, by this request to be excluded from the monetary settlement of the case, I am foregoing all monetary benefits from this settlement ... I understand that I may bring a separate legal action seeking damages, but might receive nothing or less” than she would have received in the Jaffe class monetary settlement procedure. Declaration of Mark Dichter in Opposition to Williams' Motion for Leave To File Individual Complaint, Exh. 2.

FN2. Plaintiffs do not oppose the motion.
DISCUSSION
There are multiple reasons why the Court will not permit Williams to file her individual Complaint in this Court and then request transfer to Michigan.

On May 2, 2008 (forty three days after the opt-out notice), instead of dismissing her claims in this Court and refiling in Michigan (where she lives) or New York, Ms. Williams filed a bare-bones Motion for Leave to File Individual Complaint and to Transfer Complaint to the Eastern District of Michigan. The individual Complaint, attached as Exh. A to the Motion, adds nine previously unnamed individual defendants and ten new causes of action under federal and state law.FN1
FN1. Although the Second Amended Complaint alleged that Williams suffered retaliation, it had no separate retaliation causes of action; Williams's individual complaint adds claims for retaliation under Title VII, 42 U.S.C. § 1981,

First, it appears that this Court has no personal jurisdiction over the newly-named individual defendants. Williams' Complaint asserts various common law causes of action, claims under 42 U.S.C. § 1981, and claims under the Michigan Elliott-Larsen Civil Rights Act against nine individual defendants who are Morgan Stanley executives, managers, or financial advisors.
*3 The Ninth Circuit recently reiterated that for a district court to have personal jurisdiction over a defendant, the defendant must have certain “minimum contacts” with the forum:
Where, as here, there is no applicable federal statute governing personal jurisdiction, the district court

applies the law of the state in which the district court sits. See Fed.R.Civ.P. 4(k) (1)( A); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir.1998). Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same. See Panavision, 141 F.3d at 1320 (citing Cal.Civ.Proc .Code § 410.10). For a court to exercise personal jurisdiction over a nonresident defendant, that defendant must have at least “minimum contacts” with the relevant forum such that the exercise of jurisdiction “does not offend traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotation marks and citation omitted).
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-801 (9th Cir.2004).
There are no factual allegations in the Complaint tying the individual defendants to the Northern District of California. Because Williams did not file a Reply that suggests any ties to this District, the Court will assume it has no personal jurisdiction over the majority of the named defendants.

employment practice.” The Complaint makes no allegations that Williams would have worked in California but for the alleged unlawful practices.
Alternately, “if the respondent is not found within any such district,” plaintiff may bring suit “within the judicial district in which the respondent has his principal office”-in this case, New York. Id. In sum, while venue might be proper in Michigan or New York, it is not proper here.
Third, the tolling agreement that Ms. Williams signed requires her to dismiss her individual claims and file a new lawsuit in Michigan or New York, and there is no reason to allow her to circumvent that agreement to manipulate applicable statutes of limitation. Ordinarily, after opting out of a class action settlement, a plaintiff has a right to 1) pursue their individual claims against the defendant in the same case, or 2) file a new action before the statute of limitations runs. Martens v. Smith Barney, 191 F.R.D. 54, 55 (S.D.N.Y.2000). The statute of limitations is tolled for class claims until the plaintiff opts out. Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350-52, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983) (commencement of a class action suspends the applicable statute of limitations for all members of the putative class until plaintiff elects to opt out and to file individual claims); Bonilla v. Las Vegas Cigar Co., 61 F.Supp.2d 1129, 1135 (D.Nev.1999).

Second, this Court is not the proper venue for Williams's individual Title VII claims. Venue in Title VII actions is governed by Title VII's venue provision, 42 U.S.C. § 2000e-5(f)(e). Johnson v. Payless Drug Stores Northwest, Inc., 950 F.2d 586, 587 (9th Cir.1991). That provision authorizes Title VII suits
• “in any judicial district in the State in which the unlawful employment practice is alleged to have been committed”-here, in Livonia, Michigan. See proposed Complaint ¶ 8, 9.

*4 The standstill agreement that Williams signed with Morgan Stanley tolled not only her individual race claims, but any “age discrimination” claims she might have as well. Motion Exh. B. The agreement made no mention of other claims. As Morgan Stanley points out, nothing in the agreement prevents Morgan Stanley from asserting statute of limitations defenses to other claims, and there is no reason Williams should be entitled to “assurances” that Morgan Stanley will not do so. Nor is there anything in the Agreement between Williams and Morgan Stanley that relates to the ability of the previously unnamed individual defendants to assert limitations defenses.

• “in the judicial district in which the employment records relevant to such practice are maintained and administered.” There are no allegations in the Complaint about the relevant employment records are maintained, but the Complaint alleges that Williams worked in Michigan, and Morgan Stanley is a Delaware corporation headquartered in New York.
• “in the judicial district in which the aggrieved person would have worked but for the alleged unlawful

Moreover, the agreement explicitly required Williams to “dismiss her claims alleged in the Northern District of California without prejudice, and refile individual claims of race and age discrimination in another judicial district in New York or Michigan.” Id. Williams has not explained why she should be allowed to ignore the language of the tolling agreement, or allow procedural maneuvering to extend its terms to other claims or defendants.

Finally, the Court will deny the Motion because it appears that Ms. Williams seeks to amend in bad faith. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (leave to amend under Fed. R. Civ. Pro. 15(a) should be freely given unless there is some apparent reason not to, such as undue delay, bad faith or dilatory motive, or prejudice to the opposing party); Sorosky v. Burroughs Corp., 826 F.2d 794, 805 (9th Cir.1987) (bad faith motive is a proper ground for denying leave to amend). Here, she is trying to file in a forum where it appears plain that the individual defendants are not subject to personal jurisdiction and venue is improper. She explicitly states that she has no intention of prosecuting her claims in this forum, and presumably seeks to file in this Court solely to circumvent the actual terms of her standstill agreement and to have her amendments relate back and toll the statutes of limitation.FN3 Her failure to Reply does nothing to dispel the appearance of bad faith.
FN3. Many courts have refused to toll the statute of limitations when the plaintiff filed in the wrong district, knowing there was serious doubt about jurisdiction. See, e.g., Biby v. Kansas City Life Insurance Co., 629 F.2d 1289, 1294 (8th Cir.1980) (no tolling where there was doubt about jurisdiction over defendants; “[s]ome measure of good faith expectation of proceeding in the court in which the complaint is filed is essential to tolling the statutes of limitations”); Griffin v. Dana Point Condominium Ass'n 765 F.Supp. 498, 502 (N.D.Ill.1991) (“palpably untenable” filing in jurisdiction where suit was “doomed to fail” does not toll statute of limitations); see also Crown, Cork & Seal, 462 U .S. at 354 (Powell, J., concurring) (“[t]he tolling rule of American Pipe is a generous one, inviting abuse[,]” and it “should not be read ... as leaving a plaintiff free to raise different or peripheral claims following denial of class status”).
CONCLUSION
Ms. Williams apparently wants the advantages of the tolling agreement, but doesn't want to be held to its terms. The Court will not be a party to this procedural maneuvering. The Motion for Leave to File the complaint is DENIED.
IT IS SO ORDERED.

 
 United States District Court, N.D. California.
Margaret Benay CURTIS-BAUER, et al., Plaintiffs, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH.
July 7, 2008.
Kelly M. Dermody, Leiff Cabraser Heimann & Bernstein LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Elizabeth A. Alexander, Heather H. Wong, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, Eve Hedy Cervantez, James M. Finberg, Altshuler Berzon LLP, San Francisco, CA, for Plaintiffs.
Rebecca Dianne Eisen, Gregg Paris Yates, James Norman Penrod, Kent Michael Roger, L. Julius M. Turman, Morgan Lewis & Bockius, LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan Lewis & Bockius, LLP, New York, NY, Mark S. Dichter Morgan Lewis & Bockius, LLP, Philadelphia, PA, for Defendant.
ORDER OF REFERENCE TO MAGISTRATE JUDGE FOR EVIDENTIARY HEARING AND REPORT AND
RECOMMENDATION
THELTON E. HENDERSON, District Judge.

ordinarily judge a representative's adequacy. See December 12, 2007 Order at 2-3. After seeking additional briefing, however, the Court found she was an adequate representative and provisionally certified the class. February 7, 2008 Order at 5-9. The Court looked to the fairness of the settlement as an indicator that Ms. Curtis Bauer was engaged, informed, and able to represent class members vigorously. Id. at 7. Ms. Curtis-Bauer had not been confronted with the settlement as a fait accompli; she declared that she reviewed the proposed settlement, made suggestions, felt capable of assessing the settlement, and supported it. Id. at 5-7. The Court found that the non-class claims she was releasing were distinct from the class claims. Id. at 7-8. Although the $125,000 settlement of those claims was problematic, there was no evidence that it had induced her to sacrifice the interests of absent class members, and there were other ways the Court could judge whether the settlement was fair-including the fact that the District of Columbia court had approved a nearly identical settlement in the Augst-Johnson case. Id. at 8. The Court therefore refused to deny preliminary approval where there was only the appearance of impropriety, and no evidence of actual impropriety. Id. at 9.
But Objectors to the settlement have submitted new testimony that calls the adequacy of representation in this case into question again.FN1 When the Parties moved for preliminary approval, the Court was aware that the predecessor named plaintiff Denise Williams was dissatisfied with the settlement and planned to opt out, but it assumed that she had been involved in advising class counsel and negotiating the settlement. The Court therefore focused on whether Ms. Curtis-Bauer was an adequate substitute representative. FN2

*1 This matter came before the Court on June 16, 2008 on the Parties' Joint Motion for Final Approval of Class Action Settlement, Certification of Settlement Class, and Approval and Distribution of Settlement Funds. The Court has carefully considered the pleadings, evidence, and argument offered by the proponents of the Settlement and objectors to it. In light of new evidence suggesting that the terms of the Settlement may have been reached without the involvement of any class member, the Court concludes it must revisit its provisional certification of the class and make further inquiry into whether absent class members have been adequately represented.
At the time the Parties first sought provisional certification of the class, Ms. CurtisBauer's adequacy as a representative was far from obvious; as the Court noted, she lacked many of the indicators by which courts

FN1. As Plaintiffs' counsel noted in his June 17, 2008 letter to the Court, the Court stated in its Order provisionally certifying the class and preliminarily approving the settlement that it would not re-hear objections it had already considered, or entertain a motion for reconsideration. The Court's intent was to foreclose further repetitive filings by Objectors, not to abdicate its duty to continually scrutinize whether absent class members are adequately represented. See Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir.1983) (district court is charged with “monitoring its class decisions in light of the evidentiary development of the case”). The Court can reevaluate class certification and adequacy of representation in light of new evidence and subsequent developments at any time. General Telephone

Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982); Lyons v. Georgia-Pacific Corp. Salaried Employees Retirement Plan, 221 F.3d 1235, 1253 n. 32 (11th Cir.2000), citing Wright & Miller, 7A FEDERAL PRACTICE AND PROCEDURE § 1765, at 293 (2d ed. 1986) (“[A] favorable decision under Rule 23(a)(4) is not immutable”); Bywaters v. U.S., 196 F.R.D. 458, 468 (E.D.Tex.2000).
FN2. The preliminary approval order noted that “[c]ourts have found that even class representatives who join litigation after a settlement has been reached can adequately represent a class,” citing Olden v. LaFarge Corp., 472 F.Supp.2d 922, 937-39 (E.D.Mich.2007) and Heit v. Van Ochten, 126 F.Supp.2d 487, 494-495 (W.D.Mich.2001); February 7, 2008 Order at 6. Both were cases that involved substitution of a new class representative for an earlier one who had been involved in the litigation and settlement process.
Ms. Williams now objects that she was never involved in advising class counsel on plaintiffs' race discrimination claims. Declaration of Denise Williams, Exh. A to Objector's Objections to Approval of Proposed Class Settlement, filed April 28, 2008. Ms. Williams' Declaration suggests that, although she was the sole African-American named plaintiff in the suit until August, 2007, she had no opportunity to offer her “opinions and experiences” in negotiating settlement of the race claims. Id. ¶ 10. She was never “invited to attend any mediation sessions or allowed to participate in the negotiations of the class settlement,” id. ¶ 5, even though Plaintiffs' counsel were negotiating a settlement of race claims with Morgan Stanley from March, 2007 until they reached settlement in July, 2007.FN3 At the time the settlement was announced to the Court on August 2, 2007, she was unaware of its terms, and was “furious” when she learned the details of the settlement. Id. ¶¶ 6-7. She received the settlement documents only in October, 2007. Id. ¶ 9. She says she was pressured to serve as a class representative. Id. ¶ 12. She rejected the settlement because she believed “the monetary relief was insufficient and that there was not any chance that the programs would fix the problems facing African-Americans at Morgan Stanley.” ¶ 11.
FN3. As Plaintiffs' counsel testified at the Preliminary Fairness Hearing, they reached an agreement in principle on July 23, 2007, which

was later reduced to a Memorandum of Understanding. See Reporter's Transcript of Preliminary Fairness Hearing, November 3, 2007 (“PFH RT”) at 14.
*2 It would be naive to think that clients ordinarily drive the day-to-day conduct of class action litigation, or even settlement.FN4 Nonetheless, the allegation that Plaintiffs' counsel negotiated the settlement without involvement, advice, or input from any class member, if accurate, raises serious due process and representation concerns.
FN4. “Experience teaches that it is counsel for the class representative and not the named parties, who direct and manage these actions. Every experienced federal judge knows that any statement[ ] to the contrary is [ ] sheer sophistry.” Greenfield v. Villager Industries, Inc., 483 F.2d 824, 832 n. 9 (3rd Cir.1973), quoted in Culver v. City of Milwaukee, 277 F.3d 908, 913 (7th Cir.2002); see also In re Chiron Corp. Securities Litigation, 2007 WL 4249902, 15 (N.D.Cal. Nov.30, 2007), quoting Mars Steel Corp. v. Continental Illinois National Bank & Trust, 834 F.2d 677, 681-82 (7th Cir.1987) (Posner) (“[o]rdinarily the named plaintiffs are nominees, indeed pawns, of the lawyer”).
Commentators have also “generally agreed” that the class representative is “more a figurehead than an actual decisionmaker.” After a survey of all class actions completed in the Northern District of California from 1985 to 1993, one concluded that
[I]n practice, class representatives serve little beyond a nominal function. They are largely ignored by class counsel and the court and are not assured full participation in the class action proceedings.... Whereas in non-class litigation an attorney has a legal duty to abide by the client's decision on substantial issues such as settlement and appeal, he need not do so in class actions. In fact, even the attorney's duty to keep the client reasonably informed has limited application in the class action setting. Class counsel generally do not communicate with class representatives, thereby effectively removing the representatives from the loop.

Howard M. Downs, “Federal Class Actions: Diminished Protection for the Class and the Case for Reform,” 73 NEB. L.REV. 646, 651, 659 (1994); (footnotes omitted) citing Jean W. Burns, “Decorative Figureheads: Eliminating Class Representatives in Class Actions,” 42 HASTINGS L.J. 165 (1990); see also Edward H. Cooper, “The (Cloudy) Future of Class Actions,” 40 ARIZ. L.REV. 923, 927 (1998) (“class representatives often are recruited by class counsel, play no client role whatsoever, and-when deposed ...-commonly show no understanding of their litigation.”). In an empirical survey of nearly 1,000 federal class certification opinions, one commentator found that “the vast majority of courts conduct virtually no gate-keeping function and approve class representatives and class counsel with little or no analysis.” Robert H. Klonoff, “The Judiciary's Flawed Application of Rule 23's ‘Adequacy of Representation’ Requirement,” 2004 MICH ST. L.REV. 671, 673. This Court must hew to the Constitution and laws, however, and not to common practice.
Fed. R. Civ. Pro. 23(a)(4)'s requirement that the representative “fairly and adequately protect the interests of the class” unquestionably has constitutional dimensions. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir.1998). A judgment cannot bind absent class members unless “the procedure adopted[ ] fairly insures the protection of the interests of absent parties who are to be bound by it.” Hansberry v. Lee, 311 U.S. 32, 42, 61 S.Ct. 115, 85 L.Ed. 22 (1940). The Due Process Clause therefore “requires that the named plaintiff at all times adequately represent the interests of the absent class members.” Phillips Petroleum Co. v. Shutts 472 U.S. 797, 812, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), citing Hansberry, 311 U.S. at 42-43; see also Conte & Newberg, NEWBERG ON CLASS ACTIONS § 1:13 at 41-43. The entire class action mechanism, which finally and permanently determines the rights of absent class members, turns on adequacy of representation.

Systems, Inc. Securities Litigation, 1993 WL 623310, *6 (C.D.Cal.1993). Representatives are required “to participate to some minimal degree in the lawsuit.” In re Gaming Lottery Securities Litigation, 58 F.Supp.2d 62, 76 (S.D.N.Y.1999). Thus, for example, a class representative who is unfamiliar with basic facts and claims of the case, delegates decisions about the case to another person, and “agreed to lend his name to this suit only upon the condition that it would take a minimal amount of time” is inadequate under Rule 23. In re Sepracor Inc., 233 F.R.D. 52, 55 (D.Mass.2005); see also Quarterdeck Office Systems, supra at *6 (plaintiffs inadequate where “they relied on investigations by counsel to support their claims,” and one said she would “leave the conduct of the litigation to her attorneys”); Ballan v. Upjohn Co., 159 F.R.D. 473, 486 (W.D.Mich.1994) (named plaintiff is inadequate where record is silent on his participation in any of the “crucial decisions” which could affect class members' rights).
Although the Supreme Court observed in Shutts, supra, that due process requires the named plaintiff to adequately represent the class “at all times,” 472 U.S. at 812, the Court does not read that statement to mean that representation must be absolutely continuous at all times. The Court therefore inquires whether there are critical aspects of litigation in which a representative must participate, how continuous representation must be, or whether late addition of a representative can “cure” an earlier absence of representation.
*3 Few cases address the consequences of having no plaintiff involvement at critical junctures.FN5 One appellate court refused to approve of a settlement reached without participation by the class representative. In Saylor v. Lindsley, 456 F.2d 896 (2nd Cir.1972), the plaintiff's attorney in a derivative stockholder's action entered into a stipulation of settlement with defendants even though the plaintiff himself had not authorized the settlement and did not learn of its terms until weeks later. Id. at 898-900. The named plaintiff later objected to the settlement. The Second Circuit observed that while the assent of the named plaintiff was not always essential to a settlement,

To provide those assurances, Rule 23(a)(4) requires that the class representative be genuinely involved in the litigation, not just a figurehead “lending his name to a suit controlled entirely by the class attorney.” Beck v. Status Game Corp., 1995 WL 422067, 6 (S.D.N.Y. July 14, 1995), quoting Wright & Miller, 7A FEDERAL PRACTICE AND PROCEDURE § 1766 (2d Ed.1986) A mere “stand-in” party, “selected by lawyers to fill a required role,” is insufficient. In re Quarterdeck Office

FN5. One district court case refused to find a representative adequate where “both the Complaint and the Amended Complaint were filed well before [the named plaintiff] ever spoke with or retained any of the attorneys who are representing her in this case,” and she did not want to pursue many of the claims being made in her name-the Court was “unable to understand

and certainly unwilling to accept so many ‘curious facts.’ ” Efros v. Nationwide Corp., 98 F.R.D. 703, 707 (D.Ohio 1983). On the other hand, in the consolidated Agent Orange litigation, Judge Pratt granted class certification on the strength of class counsel alone, before a class representative had even been chosen. Mullenix, “Taking Adequacy Seriously: The Inadequate Assessment of Adequacy in Litigation and Settlement Classes,” 57 Vand. L.Rev. 1687, 1722-23 (2004) (“Taking Adequacy Seriously”), citing In re Agent Orange Product Liability Litigation, 506 F.Supp. 762, 785, 788 (E.D.N.Y.1980).
we are not willing to go to the other extreme and accept the view that attorney for the plaintiff is the dominus litis and the plaintiff only a key to the courthouse door dispensable once entry has been effected. The attorney remains bound to keep his client fully informed of settlement negotiations, to advise the client before signing a stipulation of settlement on his behalf. Id. at 900. Accordingly, the court held that the record before it was “inadequate to sustain the conclusion that this obligation was met here-whatever the timing of the initial agreement in principle on the settlement.” Id. After noting the limited discovery that had taken place, and discussing the possibility of a recovery far more substantial than the settlement, the court reversed the lower court's approval of the settlement. Id. at 900-905.
The Supreme Court considered a settlement reached without a client in Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). Discussing why class certification was improper, the Supreme Court explained the connection between equitable distribution in settlement, intra-class structural conflicts, and adequacy of representation. Id. at 857. It commented that the adequacy inquiry involves both the adequacy of counsel and the named representatives, but noted disparagingly that
“[i]n this case, of course, the named representatives were not even named until after the agreement in principle was reached, and they then relied on class counsel in subsequent settlement negotiations.”
Id. at 857 n. 31 (citations to record omitted). One influential commentator argues that the Court's “distaste” for the fact that class representatives were not even named until the agreement in principle was reached teaches that “class representatives should be named before the deal is

done.” Mullinex, “Taking Adequacy Seriously,” at 1714-15.FN6
FN6. Indeed, Mullinex (whom Judge Young calls a “leading commentator” on adequacy issues, In re Relafen Antitrust Litigation, 231 F.R.D. 52, 85 (D.Mass.2005)) argues that “the [Supreme] Court recognized that adequate representation must be in place during all phases of class proceedings” with its holdings in Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) and Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) that “the fairness of a settlement agreement cannot itself bootstrap a finding of adequacy (or satisfaction of the other class certification requirements.” Id. at 1715, citing Amchem, 521 U.S. at 622; Ortiz, 527 U.S. at 858. Those holdings do, at least, call into doubt earlier cases holding that courts can retroactively analyze whether the “defect of inadequacy of representation” has “infected the merits” of findings of fact and conclusions of law by examining whether the new representatives are satisfied with the outcome. See, e.g., Hill v. Western Electric Company, 672 F.2d 381, 388-389 (4th Cir.1982).
None of these cases squarely answers whether failure to have client involvement during settlement creates due process or representation problems if a class member later scrutinizes and approves the settlement. The Court therefore turns to the rationales underlying the adequacy requirement for guidance.
Most cases that discuss the need for an involved plaintiff focus on the plaintiff's role as a check on class counsel. Judge Orrick, for example, refused to approve of a representative in a securities case who “failed to exhibit an interest in supervising the attorneys,” “expressed an intention not to supervise the amount of time spent by his attorneys in prosecuting the case,” and who “appear[ed] to have ceded control to his lawyers.” Welling v. Alexy, 155 F.R.D. 654, 659 (N.D.Cal.1994); see also Griffin v. GK Intelligent Systems, Inc., 196 F.R.D. 298, 302 (S.D.Tex.2000) (plaintiffs inadequate where “were solicited for this lawsuit and have taken little or no supervisory role over lead counsel. They do not participate in litigation decisions, do not receive regular cost/expense information, and they learn of activity in the case when they are copied on matters already completed”); Gaming

Lottery Securities Litigation, 58 F.Supp.2d at 76 (plaintiff participation cannot be “so minimal as to indicate a virtual abdication to the attorneys of the conduct of the case”).
*4 Judge Walker explained the reasons for emphasizing the representative's ability to monitor class counsel in In re California Micro Devices Securities Litigation, 168 F.R.D. 257 (N.D.Cal.1996).
Permitting class counsel who are not effectively monitored to prosecute a class action is the functional equivalent of allowing that counsel to serve as both class representative and class attorney. Such a situation directly implicates the danger of collusion between plaintiff and defense counsel recognized in FRCP 23, which assigns to the courts both broad responsibility and broad power to monitor the conduct of class actions to ensure their essential fairness.
Id. at 260.FN7 Thus, “[d]uring settlement negotiations the putative class representatives' primary duty” is to ensure that class counsel do not “sacrifice the interests of the class in order to maximize [counsel's] own recovery.” Id. at 262. In California Micro Devices, Judge Walker found that class counsel had effectively made itself the class representative by operating without client monitoring, and concluded that “when putative class counsel are not monitored by an independent and informed client and when that counsel has taken significant action in the case without court oversight or approval, the only adequate class representative ... is a class member who is well-informed about the action and independent of its counsel.” Id. at 275; see also Susman, 561 F.2d at 90 (collecting cases which discuss the danger of conflict); Apple Computer, Inc. v. Superior Court, 126 Cal.App.4th 1253, 1264, 24 Cal.Rptr.3d 818 (2005) and cases cited therein.

Plaintiffs' counsel seek a relatively modest fee-approximately ten percent of the monetary fund. Cf. Vizcaino v. Microsoft Corp., 290 F.3d at 1043, 1047-1048 (9th Cir.2002) (25% attorney's fee is benchmark in Ninth Circuit). Plaintiffs' counsel's lodestar now exceeds the amount of fees agreed upon in the settlement (excluding the amounts allotted for future fees and expenses). Application for Attorney's Fees and Expenses, filed May 12, 2008, at 7-8, and Declarations in support thereof. The Court has no doubt that Plaintiffs' counsel are representing their clients in good faith, and do not seek to maximize their profits at their clients' expense. Counsel are, if anything, sacrificing their own interests.FN8
FN8. Of course, a different set of incentives may develop over time as class counsel's costs exceed the settlement fees. See The Settlement Black Box, 75 Boston Univ. L. Rev 1257, 1264-5 (1995), citing Saylor v. Lindsley, 456 F.2d 896, 900-901 (2d Cir.1972) (discussing conflicts of interest in any contingent fee litigation, where lawyer stands to lose significant investment of time and costs).
There is another rationale for requiring an engaged representative, however, that has more application here. A representative provides not only supervision but knowledge and advice. For example, an Oregon district court explained that the class is entitled to a representative who will both check the unfettered discretion of counsel and “provide his personal knowledge of the facts underlying the complaint.....” Rolex Employees Retirement Trust v. Mentor Graphics Corp. 136 F.R.D. 658, 665-666 (D.Or.,1991), citing Greenspan v. Brassler, 78 F.R.D. 130, 133-34 (S.D.N.Y.1978) and Saylor v. Lindsley, 456 F.2d 896, 900 (2d Cir.1972). The Court in Goldchip Funding, supra, similarly linked both the ability to supervise and a plaintiff's personal knowledge to due process requirements:

FN7. For this reason, “[the] majority of courts ... have refused to permit class attorneys, their relatives, or business associates from acting as the class representative.” Susman v. Lincoln American Corp. 561 F.2d 86, 90 and n. 5, 6 & 7 (7th Cir.1977).
One of the core motives for requiring an active representative, then, is to protect absent class members from counsel tempted to maximize their fees at the expense of the class. But this class, in this case, is in no need of such protection. As the Court has observed,

*5 Because absent members of the class would be conclusively bound by the results obtained by these representatives and their attorneys, due process requires that they be more than pro forma representatives. Cf. Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22 (1940). The class is entitled to more than blind reliance upon even competent counsel by uninterested and inexperienced representatives. A proper representative can offer more to the prosecution of a class action than mere fulfillment of the procedural requirements of Rule 23. He can, for example, offer his personal knowledge of the factual circumstances, and

aid in renderingecisions on practical and non-legal problems which arise during the course of itigation. An attorney who prosecutes a class action with unfettered discretion becomes, in fact, the representative of the class. This is an unacceptable situation because of the possible conflicts of interest involved.
Goldchip Funding, 61 F.R.D. at 594-595 (emphasis added); Twyman v. Rockvill Housing Authority, 99 F.R.D. 314, 322-23 (D.C.Md.1983) (same). FN9 In Burkhalter Travel Agency v. MacFarms Intern., Inc., 141 F.R.D. 144, 154 (N.D.Cal.1991), the court observed that the representative is required to be familiar with the basic elements of the claim to show there is “an actual party behind counsel's prosecution of the action.” Id. at 153. The Bukhalter court found that the proposed representative had an “alarming unfamiliarity” with the facts and claims in the case, and because “plaintiff's counsel would be acting on behalf of an essentially unknowledgeable client,” certifying a class with that client as a representative “would risk a denial of due process to the absent class members.” Id. at 154. See also Greenspan v. Brassler, 78 F.R.D. 130, 134 (S.D.N.Y.1978) (“Plaintiffs' limited personal knowledge of the facts underlying this suit, as well as their apparently superfluous role in this litigation to date, indicate their inadequacy as class representatives”).
FN9. Cf. Coffee, “Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation,” 100 COLUM. L.REV. 370, 373 (2000) (arguing the Supreme Court's Amchem and Ortiz decisions focused on particular potential abuses, and stopped short of announcing constitutional norms for adequacy of representation; “[a]t most, the Court has warned that it holds in reserve an embryonic theory of ‘adequacy of representation,’ which it may develop as a due process limitation upon the ability of class counsel to resolve the legal rights of absent or non-consenting class members”).
In certain cases, a class representative's personal knowledge may be unimportant-as Objectors' counsel put it, a class representative is unlikely to have special insights crucial to settling a consumer class action involving broken toasters. And here, there are undoubtedly some components of the litigation-such as the effects of the Power Ranking formula on account distribution-that Plaintiffs' counsel can understand as well or even better than the individual plaintiffs.

But other cases-like this employment discrimination action-would seem to require counsel to rely on some class member's firsthand knowledge. It is difficult for the Court to imagine, for example, how counsel could understand all the dynamics that affect African-American and Latino financial advisors at Morgan Stanley, and craft an appropriate settlement of Plaintiffs' discrimination suit, without drawing on the personal experience and advice of some class member.FN10 And courts considering employment discrimination cases have, indeed, required a representative with certain knowledge and involvement. One held that a “named party's familiarity with the conditions he seeks to challenge on behalf of the class” was a factor in adequacy, and found that the named party was not adequate because he had not worked at the company for eight years and knew nothing of its current policies and practices. Linder v. Litton Systems, Inc., Amecom Division, 81 F.R.D. 14, 19-20 (D.C.Md.1978).FN11 Another held that in employment cases, there was no reason not to insist on client involvement:
FN10. Objectors note several examples of how such personal knowledge could affect this case. They argue, for instance, that the Settlement Agreement, as drafted, serves to single minority financial advisors out as troublemakers by requiring them to affirmatively ask managers for information about account distribution and rankings under the Power Ranking system, rather than making such information readily available. See Objections, filed April 28, 2008 Exh. J, Declaration of Michael Barnett (“Barnett Decl.”) ¶¶ 6-7. They also argue that an informed representative could have relied on his or her personal knowledge to insist that the formation of teams and partnerships is a business practice of Morgan Stanley that should be altered as a component of the settlement. Compare Objections, filed April 28, 2008 at 13-16, and Barnett Decl. ¶¶ 18-28 (arguing that Morgan Stanley's policy of allowing financial advisors to choose partners is an employment practice) with PFH RT at 69, 73, 81 (Plaintiffs' counsel accepted Morgan Stanley's explanation that individual brokers form teams on their own, and concluded they could not get injunctive relief relating to teams in though this litigation).
FN11. Other courts are more willing to rely on lawyers to provide the facts as well as the law: “In a massive class action such as the one at hand, it is counsel for the class who has the

laboring oar. The class representatives furnish the factual basis to invoke the jurisdiction of the court and provide the outline of the controversy, but the lawyers shape the claims for adjudication by the compilation of factual and expert testimony and the presentation of statistical and documentary evidence.” Goodman v. Lukens Steel Co., 777 F.2d 113, 124 (3rd Cir.1985)

satisfies these due process and representation requirements is a mixed question of law and fact that depends on a number of factors, including but not limited to:
• how crucial the stage of litigation is to the outcome of the case;

*6 [A] named plaintiff must display some minimal level of interest in the action, familiarity with the practices challenged, and ability to assist in decisionmaking as to the conduct of the litigation. In re Goldchip Funding Company, 61 F.R.D. 592, 594-595 (M.D.Pa.1974); see Marshall v. Target Stores, Inc., 11 F.E.P.Cases 775 (E.D.Mo.1975); Hyatt v. United Aircraft Corp., 50 F.R.D. 242, 245 (D.Conn.1970). Employment discrimination cases do not rest on such sophisticated legal or economic theories as to preclude understanding by named plaintiffs.... Nor are they cases in which injury to any possible representative is so small that the role of the named plaintiff is merely formal.... There would appear to be no other reason to accede to the notion that a class action “belongs to no one so much as to the plaintiff's lawyer,” Satterwhite v. City of Greenville, Tex., 557 F.2d [414, 426 (5th Cir.1977) ] (Gee, J., dissenting), and the potential for conflict of interest which that position entails. In these cases, a Court can and should insist on a named plaintiff who takes some active interest and has some ability to contribute to the action. Wofford v. Safeway Stores, Inc., 78 F.R.D. 460, 487 (N.D.Cal.1978). FN12

• whether the case is seeking to remedy objectively measurable harm or harm that can easily be monetized, as opposed to harm or conditions involving more subjective or complex issues where critical facts lie exclusively or primarily within the knowledge of class members alone;
• the likelihood that the decisions or outcomes at the stage of litigation in question would have been different had class members been more involved by, for example, providing personal knowledge of critical facts;
• whether any class member was involved at the stage of litigation at issue, and, if so, to what extent; and
• whether any decisions or outcomes from a stage of litigation in which an adequate representative did not participate were approved or ratified by a subsequently added representative and, if so, whether that approval was meaningful-in other words, whether it involved genuine scrutiny and a willingness and/or ability to revisit the earlier decision or outcome, or cursory and perfunctory review.

FN12. The Woford court rejected the defendants' argument that the named representative could not be adequate because he lived far away. “It is entirely possible that an enthusiastic plaintiff residing at some distance from other class members and from the forum could, by letter, telephone, or personal visit participate in the conduct of the litigation to an equal or greater extent than a local plaintiff.” Id.
This Court therefore concludes that there are some cases in which having a class representative's “personal knowledge of the factual circumstances, and aid in rendering decisions,” Goldchip Funding, 61 F.R.D. at 594-95, at crucial stages of the litigation is necessary to ensure due process and adequate representation of absent class members. The Court further holds that whether a class representative's participation (or lack thereof)

The Court does not have before it sufficient facts to weigh these factors. This matter is therefore referred to Magistrate Judge Joseph Spero for an evidentiary hearing,FN13 and for a Report and Recommendation as to 1) whether, under the standard set out above and other applicable standard under Fed. R. Civ. Pro. 23(a)(4), there was sufficient involvement by an adequate representative to meet the requirements of the Due Process Clause and Rule 23; and 2) if not, what a pragmatically appropriate remedy would be in this case.
FN13. See Johnson v. Georgia Highway Exp., Inc. 417 F.2d 1122, 1125 (5th Cir.1969) (court may hold evidentiary hearing to explore representation issues), cited in Wright, Miller, and Kane 7A FEDERAL PRACTICE AND PROCEDURE § 1765 at 328 (3d Ed.2005).

*7 The Court expects that the evidentiary hearing in this case will likely touch upon, at a minimum, the involvement of class members, including Ms. Williams, in advising counsel about the conditions and practices challenged in the suit; on the degree to which any class member, including Ms. Williams, was involved in settlement negotiations, developing settlement terms, or discussing settlement options; on Ms. Curtis-Bauer's involvement in the suit and the settlement, her knowledge of the conditions and practices challenged in the suit; and on her understanding of the terms of the Settlement Agreement and its consequences.
Magistrate Judge Spero may undertake any proceedings he deems are appropriate in furtherance of this Referral. The Court also recognizes that the hearing may raise difficult questions of attorney-client privilege, and may require testimony in camera. The Court leaves the role of the Objectors and/or Ms. Williams in the evidentiary hearing or any further briefing to the sound discretion of the Magistrate Judge.
CONCLUSION
During the early years of Title VII class action litigation, one judge observed that the “broad brush approach” to adequacy of representation in some Title VII cases stands

in this case with great enthusiasm. But it is bound to protect the interests of absent class members, see Davis v. City and County of San Francisco, 890 F.2d 1438, 1444 n. 5 (9th Cir.1989), and must apply heightened scrutiny and attention to class certification requirements, where, as here, the parties reach settlement without adversarial class certification proceedings. Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir.2003); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.1998). Ultimately, the Court's entire review of the settlement for fairness under Rule 23(e) is based on the premise that the settlement was negotiated with an adequate representative. The Court examines the fairness of the settlement as a whole, rather than parsing the adequacy of its component parts to see if the terms “could be better,” Hanlon, 150 F.3d at 1027, precisely because it assumes a vigorous and informed representative arrived at those terms. If the settlement was, in fact, reached without involvement of an adequate representative, those assumptions unravel. The Court would be left with the impossible task of evaluating the fairness of the settlement without the benefit of either adversarial proceedings and factual development, or the structural assurances of adequacy that meaningful representation provides. In the Supreme Court's words, “standards set for the protection of absent class members” in the Rule 23(a) and (b) class-qualifying criteria “serve to inhibit appraisals of the chancellor's foot kind-class certifications dependent upon the court's gestalt judgment or overarching impression of the settlement's fairness.” Amchem, 521 U.S. at 621. The Court must investigate the adequacy of representation not only to make certain due process guarantees are met, but to ensure its review of the fairness of the settlement is meaningful.

in sharp contrast to the diligence with which in other areas we carefully protect those whose rights may be affected by litigation. If this were [an] individual cross-action against an employee at one of appellee's remote terminals we would turn intellectual handsprings over questions of notice and process to him and opportunity to protect his interestssuch issues as whether the marshal dropped the notice at the door or handed it to the child at the front gate. But when the problem is multiplied many-fold, counsel, and at times the courts, are moving blithely ahead tacitly assuming all will be well for surely the plaintiff will win and manna will fall on all members of the class. It is not quite that easy.

*8 IT IS SO ORDERED.

Johnson v. Georgia Highway Exp., Inc., 417 F.2d 1122, 1127 (5th Cir.1969) (Godbold, J., concurring).

The Court does not revisit the adequacy of representation

 
 United States District Court, N.D. California.
Daisy JAFFE, et al., Plaintiffs, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH.
July 16, 2008.

settlement reached between the Plaintiffs and Morgan Stanley in approximately August, 2007 was inadequate, and while the parties were preparing for preliminary approval of the settlement, she informed class counsel that she planned to opt out of the class. Class counsel negotiated a tolling agreement with Morgan Stanley which Plaintiff entered into on October 30, 2007. The tolling agreement provided that, as of the effective date of the agreement, the parties would “suspend all actions related to Williams' individual claims of race and age discrimination, known and unknown.” The parties further agreed:

Kelly M. Dermody, Heather H. Wong, Leiff, Cabraser, Heimann & Bernstein LLP, Eve Hedy Cervantez, James M. Finberg, Altshuler, Berzon LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Elizabeth A. Alexander, Lieff, Cabraser, Heimann & Bernstein, LLP, Nashville, TN, for Plaintiffs.
Rebecca Dianne Eisen, Gregg Paris Yates, James Norman Penrod, Kent Michael Roger, L. Julius M. Turman, Morgan, Lewis & Bockius, LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan, Lewis & Bockius LLP, New York, NY, Mark S. Dichter, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Defendant.
ORDER GRANTING PLAINTIFF DENISE WILLIAMS' MOTION TO TRANSFER CLAIMS AGAINST MORGAN STANLEY TO THE EASTERN DISTRICT OF MICHIGAN, VACATING HEARING, AND DENYING LEAVE TO FILE SUR-REPLY
THELTON E. HENDERSON, District Judge.

... that all applicable statutes of limitations for Williams' individual race and age discrimination claims shall be tolled for forty-five (45) days from the postmark date of Williams' notification that she elects to opt out of the monetary portion of the Settlement.... Thereafter, Williams may dismiss her claims alleged in the Northern District of California without prejudice, and refile individual claims of race and age discrimination in another judicial district in New York or Michigan.
Plaintiff's new counsel, Stowell & Friedman, sought to clarify whether the tolling agreement meant that Morgan Stanley agreed not to raise statute of limitations defenses if Plaintiff dismissed and refiled in Michigan. Morgan Stanley did not respond. See Declaration of Linda D. Friedman In Support of Motion to Transfer ¶¶ 6-7, 9.
On June 6, 2008, Plaintiff filed an individual Complaint in the Eastern District of Michigan. Complaint, United States District Court for the Eastern District of Michigan Case No. 2:08-cv-12435-PJD-VMM (“Michigan Complaint”).

*1 The Court has reviewed Plaintiff Denise Williams' Motion to Transfer Existing Pending Individual Claims Against Morgan Stanley to the Eastern District of Michigan, Morgan Stanley's Response thereto, and Plaintiff's Reply. The Court has determined this matter is appropriate for resolution without oral argument. The hearing on the motion, currently set for July 21, 2008 is hereby VACATED. The Motion to Transfer is GRANTED.
The relevant factual and procedural background is set out in this Court's June 2, 2008 Order denying Plaintiff's motion to amend and then transfer her complaint, and will not be repeated in full here. In short, Plaintiff felt that the

Plaintiff also moves to transfer her existing individual suit before this Court to the Eastern District of Michigan pursuant to 28 U.S.C. § 1404(a).
DISCUSSION
Title 28 U.S.C. § 1404(a) provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil matter to any other district or division where it might have been brought.” The moving party bears the burden of showing that transfer will serve those purposes. Commodity Futures Trading Commission v. Savage, 611 F.2d 270, 279 (1979). To exercise its discretion under § 1404(a),

this Court should make an “individualized, case-by-case consideration of convenience and fairness.” Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (citation omitted). It should look to the convenience of the parties, the convenience of the witnesses, and the interests of justice to make its decision. Florens Container v. Cho Yang Shipping, 245 F.Supp.2d 1086, 1088 (N.D.Cal.2002), citing Kasey v. Molybdenum Corp., 408 F.2d 16, 20 (9th Cir.1969).
*2 There are multiple reasons to transfer the case to Michigan. First, Plaintiff and likely all the witnesses to her individual claims live in Michigan. See Second Amended Complaint ¶¶ 14 (Williams employed as Financial Advisor in Detroit from March 2004-present), 42-29 (Williams factual allegations). Second, at this point, the proper venue for Plaintiff's Title VII claims is in Michigan, not in this Court.FN1
FN1. Venue in Title VII actions is governed by Title VII's venue provision, 42 U.S.C. § 2000e-5(f)(e). Johnson v. Payless Drug Stores Northwest, Inc., 950 F.2d 586, 587 (9th Cir.1991). See discussion in Order, filed June 2, 2008, at 4-5.

Morgan Stanley contends that Plaintiff should be held to the terms of the Second Tolling Agreement which require her to dismiss her claims and refile in Michigan or New York. It argues that the tolling agreement is, in essence, a forum selection clause which the Court should enforce. See Stewart Org., Inc., 487 U.S. at 29 (forum selection clause should be a “significant factor that figures centrally in the district court's calculus” of whether to transfer under § 1404(a)); Flake v. Medline Industries, Inc., 882 F.Supp. 947, 950 (E.D.Cal.1995) (strong presumption in favor of forum selection clauses). But the dismiss-and-refile agreement is not a forum selection clause. Both parties agree that the Eastern District of Michigan is a proper forum. They disagree about what procedural mechanism the Plaintiff is entitled to use to get her case to Michigan. The agreement does not strip the Court of its authority to transfer Plaintiff's claims under § 1404(a).FN2 The factors cited above weigh heavily in favor of transfer. Morgan Stanley is free to argue in the Michigan court that Plaintiff is not entitled to the benefits of the tolling agreement because her case was transferred rather than dismissed and refiled. Accordingly, the Court GRANTS the motion to transfer under 28 U.S.C. § 1404(a).FN3 In so doing, the Court makes no determination about the effect of the tolling agreement or the transfer on the timeliness of Plaintiff's claims.

Third, ample authority holds that transfer is in the interests of justice if the plaintiff would be unable to refile her cause of action in another district because it is time-barred. In such cases,

FN2. Even if it were a forum selection clause, such clauses are not dispositive of motions to transfer. See Stewart Org., Inc., 487 U.S. at 30-31.

“ ‘the interest of justice’ requires that the cause be transferred” rather than dismissed. Burnett v. N.Y. Cent. R.R. Co., 380 U.S. 424, 430 n. 7, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965); see also Roberson v. Norwegian Cruise Line, 897 F.Supp. 1285, 1289 (C.D.Cal.1995) (“Since plaintiff may have a statute of limitations problem if this action is dismissed, the ‘interests of justice,’ 28 U.S.C. 1406(a), dictate that the case be transferred ....”); Nutracea v. Langley Park Investments, 2007 WL 135699 * 1 (E.D.Cal. Jan.16, 2007).
Bereola v. Holland America Line, Inc., 2008 WL 149131, *2 (N.D.Cal. January 14, 2008); see also Phillips v. Seiter, 173 F.3d 609, 610 (7th Cir.1999) (possibility that plaintiff's case will be time-barred if it is dismissed is a compelling reason to transfer under 28 U.S.C. § 1631). If Plaintiff were to dismiss her claims and refile in Michigan, Morgan Stanley may argue those claims are time-barred.

FN3. Morgan Stanley argues the Court should analyze the motion under 28 U.S.C. § 1406(a), which governs transfer of actions where venue is improper. But venue was proper in this Court when Ms. Williams was added as a plaintiff to Plaintiff Jaffe's putative class action, and this Court's analysis would be the same under either § 1404(a) or 1406(a). The parties' dispute over whether Morgan Stanley has waived any objection to venue is therefore irrelevant to the Court's analysis, and the Court DENIES as moot Morgan Stanley's motion for leave to file a Sur-Reply on this issue.
*3 IT IS SO ORDERED.

 
 .
This decision was reviewed by West editorial staff and not assigned editorial enhancements.
United States District Court, N.D. California,
San Francisco/Oakland Division. Margaret Benay CURTIS-BAUER, on behalf of herself
and all others similarly situated, Plaintiff, v.
MORGAN STANLEY & CO., INCORPORATED, f/k/a Morgan Stanley DW, Inc., Defendant. No. C 06-3903 TEH.

Hearing for June 16, 2008, to determine whether the Settlement Agreement should be granted final approval, pursuant to Federal Rule of Civil Procedure 23(e), as “fair, adequate and reasonable.” Proposed Class members were given an opportunity to comment on the settlement, including the payment of the service award. After Notice was sent, no objections were made to the payment to the Class representative service award. (Docket Entry No. 161 at 19-20.)
The Preliminary Approval Order directed Class Counsel to file a petition seeking the service payment to the Class Representative. (Docket Entry No. 158 at 24.) Class Counsel filed an Application requesting that the Court approve the service award to the Class Representative in the amount of $25,000.

Oct. 22, 2008.
Kelly M. Dermody, Heather H. Wong, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA, James M. Finberg, Eve H. Cervantez, Altshuler Berzon LLP, San Francisco, CA, Adam T. Klein, Piper Hoffman, Justin Swartz, Outten & Golden LLP, New York, NY, for the Plaintiff.
[PROPOSED] ORDER GRANTING APPLICATION OF PLAINTIFF FOR APPROVAL OF SERVICE PAYMENT
THELTON E. HENDERSON, District Judge.
*1 The parties to this class action lawsuit alleging race discrimination against Defendant Morgan Stanley & Co., Inc. (“Morgan Stanley”) settled the action and entered into a proposed Settlement Agreement that provides for comprehensive injunctive and monetary relief for the Class. (See Settlement Agreement, Docket No. 159.) Plaintiff applied to this Court for preliminary approval of the Settlement Agreement and the terms thereof. On February 7, 2008, this Court granted preliminary approval to the Settlement Agreement.

NOW, THEREFORE, IT IS HEREBY ORDERED, upon consideration of the Settlement Agreement; Plaintiff's Application and supporting declarations, and the proceedings in this action to date, that the Application for approval of the service award in the amount of $25,000 is GRANTED.
The Court awards $25,000 to be paid to Ms. Curtis-Bauer for the time and effort she devoted to representing the Class in this case. This amounts was negotiated by the parties and agreed to by Defendant under the terms of the Settlement Agreement. There is no evidence that Ms. Curtis-Bauer failed to evaluate the settlement, sacrificed the interests of the absent Class members to her own, or accepted an unfair settlement on behalf of the Class. Instead, she has been an engaged class representative since joining the case, has vigorously represented the Class' interests pursuant to her fiduciary duties to the Class she seeks to represent, and has taken risks in her own career by stepping forward as a class representative here. Accordingly, a service award of $25,000 to compensate Ms. Curtis-Bauer for the time and effort she devoted to representing the Class in this case is fair and reasonable. Staton v. Boeing, 327 F.3d 938, 977 (9th Cir.2003).
This Court awards $25,000 to Ms. Curtis-Bauer for her time and efforts on behalf of the Class.

The Preliminary Approval Order directed that notice of the Settlement Agreement, its terms, and the applicable procedures and schedules be provided to the proposed Class (including specific notice about the amount of attorneys fees and costs requested) and set a final Fairness

IT IS SO ORDERED.

 
 United States District Court, N.D. California.
Margaret Benay CURTIS-BAUER, et al., Plaintiffs, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH.
Oct. 22, 2008.

amended the Complaint, adding named plaintiff Denise Williams, an African-American financial advisor at Morgan Stanley who also asserted individual race claims.
In January, 2007, this Court stayed this action pending resolution of Augst-Johnson. In February, 2007, the Augst-Johnson parties announced they had reached a settlement, which the court preliminarily approved in July, 2007.

Kelly M. Dermody, Heather H. Wong, Leiff Cabraser Heimann & Bernstein LLP, Eve Hedy Cervantez, James M. Finberg, Altshuler Berzon LLP, San Francisco, CA, Adam T. Klein, Justin Swartz, Piper Hoffman, Outten & Golden LLP, New York, NY, Elizabeth A. Alexander, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, Suzanne Elaine Bish, Stowell and Friedman Ltd., Chicago, IL, for Plaintiffs.
Rebecca Dianne Eisen, Gregg Paris Yates, James Norman Penrod, Kent Michael Roger, L. Julius M. Turman, Morgan Lewis & Bockius, LLP, San Francisco, CA, Kenneth J. Turnbull, Morgan Lewis & Bockius LLP, New York, NY, Mark S. Dichter, Morgan, Lewis & Bockius LLP, Philadelphia , PA, for Defendant.
ORDER GRANTING RECONSIDERATION OF COURT'S JULY 7, 2008 ORDER, CONFIRMING FINAL CLASS
CERTIFICATION, AND GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT

In the interim, the Plaintiffs had informed Morgan Stanley of their intent to add class race discrimination claims to this action. The parties began negotiating a possible settlement of race claims. On July 23, 2007, the parties reached agreement in principle on settlement. On August 2, 2007, the Parties sought to file a Second Amended Complaint, adding Margaret Benay Curtis-Bauer as a named plaintiff and asserting class discrimination claims on behalf of a “minority” class of African-American and Latino current and former financial advisors (“FAs”) and financial advisor trainees at Morgan Stanley. They simultaneously announced settlement of those claims.
In October, 2007, the Parties sought provisional class certification and preliminary approval of the settlement. The Court was aware that Ms. Williams was dissatisfied with the settlement and planned to opt out, but found that Ms. Curtis-Bauer adequately represented the plaintiffs, even though she had become involved late in the settlement process. Order Preliminarily Approving Class Action Settlement, filed February 7, 2008 (“2/7/08 Order”), at 5-9.

THELTON E. HENDERSON, District Judge.
*1 Plaintiffs move for reconsideration of this Court's July 7, 2008 Order, which declined to grant final approval to the parties' settlement and instead referred this matter to a Magistrate Judge for an evidentiary hearing. For the reasons set out below, the Court grants reconsideration, withdraws its July 7, 2008 Order, and grants final class certification and approval of the settlement.

Objectors opposed final approval of the settlement. They submitted, for the first time, a declaration that Denise Williams, the sole African-American named Plaintiff in the suit until August, 2007, had never been involved in advising class counsel on Plaintiffs' class race discrimination claims. Declaration of Denise Williams, Exh. A to Objector's Objections to Approval of Proposed Class Settlement, filed April 28, 2008. As this Court observed, her declaration suggested that

The relevant factual and procedural background are by now familiar. This action was originally filed in June of 2006 as a Title VII gender discrimination class action against Morgan Stanley. A competing gender class action, Augst-Johnson v. Morgan Stanley DW, Inc., Case No. 06-C-01142 RWR, was filed in the United States District Court for the District of Columbia on the same day. In October, 2006, the Plaintiffs

she had no opportunity to offer her “opinions and experiences” in negotiating settlement of the race claims. Id. ¶ 10. She was never “invited to attend any mediation sessions or allowed to participate in the negotiations of the class settlement,” id. ¶ 5, even though Plaintiffs' counsel were negotiating a settlement of race claims with Morgan Stanley from March, 2007 until they reached settlement in July, 2007. At the time the settlement was announced to the

Court on August 2, 2007, she was unaware of its terms, and was “furious” when she learned the details of the settlement. Id. ¶¶ 6-7. She received the settlement documents only in October, 2007. Id. ¶ 9. She says she was pressured to serve as a class representative. Id. ¶ 12. She rejected the settlement because she believed “the monetary relief was insufficient and that there was not any chance that the programs would fix the problems facing African-Americans at Morgan Stanley.” ¶ 11.
*2 Order of Reference, filed July 7, 2008, at 3.

requirements demand has proved unnecessary, however. As set out more fully below, Plaintiffs have submitted evidence for in camera review which assures the Court that Ms. Williams was involved litigation and settlement process. Counsel spent many hours communicating with her. Her involvement, and that of Ms. Curtis-Bauer, were adequate by any standard to satisfy representation and due process requirements.
Under these circumstances, the Court chooses to withdraw its Order rather than make law where none is needed. The Court's Order of July 7, 2008 is hereby WITHDRAWN.

The allegation that no named plaintiff had been involved in reaching the settlement raised serious due process and representation concerns for the Court. Noting that there are limits to what actions and decisions class counsel can undertake on behalf of the class without involvement of a class member, the Court held that “there are some cases in which having a class representative's ‘personal knowledge of the factual circumstances, and aid in rendering decisions' at crucial stages of the litigation is necessary to endure due process and adequate representation of absent class members.” Id. at 11:17-20 (citation omitted). The Court went on to set out a non-exclusive list of factors relevant to whether due process and representation requirements had been satisfied in a particular case, id. at 12, and referred the case to a Magistrate Judge for an evidentiary hearing to explore whether, in light of those factors, there had been sufficient involvement by an adequate representative. Id. at 12-13.

* * *
The Parties in this action have entered into a Settlement Agreement attached hereto as Exhibit 1.FN1 After the Court granted preliminary approval of the settlement and conditional class certification, the Court ordered that notice of the settlement, its terms, and applicable procedures be provided to class members. All class members were given an opportunity to comment on the settlement at the final Fairness Hearing held on June 16, 2008.
FN1. This Settlement Agreement (“SA”) was revised during the pendency of the litigation and is the one submitted to this Court on June 13, 2008.

On reconsideration, the Court concludes its Order was ill-advised. The unfortunate and likely unique procedural history of this case (such as simultaneous expansion of the claims and settlement, and Ms. Curtis-Bauer's late involvement) had already raised hard questions extensively catalogued in this Court's earlier Orders. Ms. Williams' declaration charged that fact-intensive employment discrimination class claims had been settled by Plaintiffs' attorneys alone-before a class complaint had even been filed, let alone before a class had been certified. The Court had to investigate whether the Objectors' allegation was true; as a practical matter, its factual exploration had to be guided by criteria for what could constitute adequate representation. The Court was required to forge into largely uncharted doctrinal territory to articulate standards relevant in this unique situation-where claims had shifted, there had been successive named representatives, and there was no concern whatsoever that the plaintiffs' attorneys were sacrificing the interests of class members to their own.
The Court's analysis of what due process and representation

*3 The Court now grants final approval to the Settlement Agreement pursuant to Fed. R. of Civil Procedure 23(e).
This Court must review the propriety of class certification under Fed. R. Civ. Pro. 23(a) and (b) in order to preliminarily approve a settlement under Fed. R. Civ. Pro. 23(e). Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir.2003). As set out in this Court's February 7, 2008 Order preliminarily approving the settlement, the proposed classes satisfy the numerosity, commonality, and typicality requirements of Rule 23(a)(1), (2), and (3), and are appropriate for certification under Rules 23(b)(2) and (b)(3). See 2/7/08 Order at 4-5, 10-11. The Court also finds that the representation requirement of Rule 23(a)(4) has been met here. Margaret Benay Curtis-Bauer is an adequate representative. See 2/7/08 Order at 5-9. Moreover, Plaintiffs presented abundant evidence for in camera review to refute Ms. Williams' allegation that she was not involved in the litigation or settlement. After reviewing the declarations of Plaintiffs' counsel, their time records, and other supporting evidence, the Court is satisfied that Plaintiffs' counsel interviewed Ms. Williams thoroughly about her experiences at Morgan Stanley, gaining knowledge that informed their ability

to craft an appropriate settlement. The Court is also convinced that counsel discussed settlement terms with Ms. Williams before even entering into settlement discussions. Ms. Williams was kept informed of and consulted about the settlement process; even though the parties contradict each other about her evolving reaction to the settlement terms. Even though Ms. Williams ultimately rejected the settlement and her relationship with class counsel broke down, the extent of her involvement was sufficient, particularly given the subsequent review and approval of the settlement by Ms. Curtis-Bauer.

settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

Fed.R.Civ.P. 23(e) also requires the district court to determine whether a proposed class action settlement is fundamentally fair, adequate, and reasonable. Staton, 327 F.3d at 959, citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.1998). In making this determination, the court may consider any or all of the following factors, if applicable:
the strength of plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.
Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir.1982); National Rural Telecommunications Cooperative v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D.Cal.2004), citing Linney v. Cellular Alaska P'ship, 151 F.3d 1234, 1242 (9th Cir.1998) (same). This list is not intended to be exhaustive; the court must consider the applicable factors in the context of the case at hand. See Officers for Justice, 688 F.2d at 625.FN2 In some cases, one factor alone may prove determinative in finding sufficient grounds for court approval. See, e.g., Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir.1993).
FN2. Another list of factors, for example, recently endorsed in In re Lupron Marketing and Sales Practices Litigation, 228 F.R.D. 75, 93 (D.Mass.2005) comes originally from City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir.1974), overruled on other grounds by Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989). The Grinnell factors are:
(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the

Grinnell, 495 F.2d at 463 (citations omitted).
*4 Where, as here, the parties agree to settle the dispute prior to certification of the class, the court must be particularly vigilant in its scrutiny of the settlement. Hanlon, 150 F.3d at 1026. Yet despite the importance of fairness, the court must also be mindful of the Ninth Circuit's policy favoring settlement, particularly in class action law suits. See, e.g., Officers for Justice, 688 F.2d at 625 (“Finally, it must not be overlooked that voluntary conciliation and settlement are the preferred means of dispute resolution. This is especially true in complex class action litigation ....”).
These factors show that the settlement is fair, adequate and reasonable.
The Plaintiffs would face considerable risks were they to proceed to trial. Their action alleges that Morgan Stanley's nationwide account distribution policies and practices and other policies and practices denied or restricted the availability of business opportunities, compensation, and other favorable employment conditions on the basis of race. See Second Amended Complaint, filed August 17, 2007, ¶¶ 2, 5, 37-32. Plaintiffs would likely face a vigorous defense, and difficulties proving that Morgan Stanley's objectively neutral policies and procedures caused the disparities in compensation and other harm, such as terminations based on low production. The uncertainty and complexity of proceeding to trial would be substantial. Settlement avoids the complexity, delay, risk and expense of continuing with the litigation and will produce a prompt, certain, and substantial recovery for the Plaintiff class.
The settlement was reached after extensive investigation, analysis, and arm's-length negotiation. See Order, filed December 12, 2007, at 6 n. 2, 2/7/08 Order at 12. The Court finds that collectively, Plaintiffs' counsel have extensive expertise and experience not only with class action discrimination cases, but in litigating employment and

discrimination cases against defendants in the financial services industry, including Morgan Stanley. Their thoughtful assessment of the terms of the settlement-particularly their considered and strong support for the efficacy of the proposed injunctive relief-weighs in favor of approval. See, e.g., Reporter's Transcript of Preliminary Fairness Hearing (“RT PFH”), November 3, 2007, at 11-17, 67-70, and Reporter's Transcript of Final Fairness Hearing (“RT FFH”), June 16, 2008, at 73-75. Moreover, as the Court observed on preliminary approval of the settlement, they arrived at the terms of the settlement after months of active involvement in the case, and after receiving and analyzing compensation data extracted from Morgan Stanley's human resources database, 2/7/08 Order at 14, and with the involvement and advice of class representatives. See discussion, supra, and 2/7/08 Order at 7.
The reaction of the class members also weighs in favor of approval. Of the over 1,300 class members, nine have chosen to remain class members but lodge objections, and only 24 have opted out. By the close of the claim period, 422 class members had submitted claims, a participation rate of approximately 31%. FN3 Plaintiffs submitted numerous letters and declarations in support of the settlement, both from African-American and Latino class members as well. See Letters of Nathan Lewis, Anthony Baker, Beverly Bishop, Steve Cota, and Eric Berry, Exhs A, B, F, I, and J to Declaration of Heather Wong, filed November 19, 2007, and Declarations of Daniel Correa, Erick Ibarra, Christian Iglecias, Edward Jiminez, Mark Morales, and Stanley Sykes, filed July 23, 2008.
FN3. At the Preliminary Fairness Hearing, Objectors' counsel called the 31% participation rate in a discrimination case against Merrill Lynch, Cremin v. Merrill Lynch, United States District Court for the Northern District of Illinois Case No. 96-C 3773 (“Cremin” ) “a very high percentage in our view.” RT PFH at 59.
*5 Most important, however, are the strength of the injunctive and monetary relief the Settlement provides. This Court has already found, on preliminary approval of the settlement, that the Settlement Agreement provides substantial injunctive relief to the Plaintiff class. 2/7/08 Order at 14-16. The relief represents an expansion of the relief provided in the settlement of a parallel gender discrimination case against Morgan Stanley, Augst-Johnson, supra, and is substantive, meaningful, and valuable to the class. 2/7/08 Order at 14-16. The Court will not revisit its analysis here.

Objectors' arguments to the contrary are unavailing. They argue that the Settlement is inadequate because it does not include Court supervision or actually require Morgan Stanley to remedy racial disparities in compensation, retention, hiring, teaming or promotion by setting goals and timetables for decreasing those disparities (Objections No. 1 and 2). But the Parties explained at the Preliminary Fairness Hearing that goals and timetables can backfire, because employers quickly hire minorities to meet goals, and then they “just fall out of the system again.” RT PFH at 68, 80. Instead, the parties have chosen to stress programmatic change and diversity and inclusion programs that will encourage managers to attract and retain individuals who are likely to succeed. Id.FN4 The Settlement provides ongoing monitoring, analysis, and review by an independent Diversity Monitor who will report to both Morgan Stanley and class counsel. Monitoring will allow Plaintiffs' counsel to track the effectiveness of the Settlement, and provide data which Plaintiffs can use to enforce the general nondiscrimination provision of the Settlement Agreement. SA § VII.H (African American and Latino financial advisors and trainees “will enjoy terms and conditions of employment comparable to” those of their white counterparts); RT FFH at 72-73. Particularly where Plaintiffs' counsel can turn to the Court to enforce the nondiscrimination provision, the absence of Court monitoring does not render the settlement inadequate.FN5
FN4. The Court also rejects Objectors' unsupported claim that the industrial psychologist chosen to study race issues and make proposals, Kathleen Lundquist, is inappropriate because she has been a defense expert on numerous occasions. Although Objectors state that Lundquist was a defense expert in “McReynolds v. Sodexho,” (no citation) referred to in a web article, and Employees Committed For Justice v. Eastman Kodak Co., 407 F.Supp .2d 423 (W.D.N.Y.2005), a case where the EEOC found rampant discrimination, Objections, filed April 28, 2008, at 10-11, neither source mentions Lundquist. Objectors state she was a defense expert “supporting employer's policies and culture” in Employees Committed for Justice and “Puffer v. Allstate, Case No. 04-5764 (N.D.Ill.),” id., without proffering a declaration, document, or even docket number of a filing in support. Lundquist declares that she was not a defense expert in McReynolds, testified about limited matters in Employees Committed for Justice, and did not testify about company culture in Puffer. Lundquist Declaration, filed June 3, 2008; see also RT FFH at 38-39.
FN5. The Court notes that although Objectors argue reporting and monitoring are crucial, neither the

Cremin settlement nor that negotiated by Objectors' counsel in Martens v. Smith Barney, United States District Court for the Southern District of New York Case No. 96 Civ. 3779 (“Martens” ) require reporting to or monitoring by the court. See Supplemental Declaration of Mark S. Dichter, filed June 3, 2008, Exh. A and B (settlement agreements).
Objectors' also argue that the Settlement Agreement improperly strips the Court of jurisdiction, forces the parties into confidential, binding arbitration, and unfairly precludes “third parties” other than class counsel-including class members-from enforcing the terms of the Settlement Agreement. (Objections Nos. 1 and 13). The parties revised the Settlement Agreement to reflect their shared understanding that although disputes about the settlement initially go to arbitration, the Court retains jurisdiction to review the arbitrator's decisions. SA § X at 47. No other claims are precluded or forced into arbitration by the Settlement Agreement. Finally, the provision limiting enforcement of the Settlement Agreement to class counsel is not unusual; in fact, the settlements that Stowell and Friedman negotiated in two financial services discrimination cases, Martens, supra, and Cremin, supra, contain the same limitation. See Supplemental Declaration of Mark S. Dichter, filed June 3, 2008, Exh. A and B (settlement agreements).

members. When a member of the partnership or team leaves Morgan Stanley, that member's accounts pass to other members; moreover, brokers get credit in the Power Ranking system (and therefore the ability to get even more business) for assets they accrue as part of partnerships. Although the Settlement provides that the Industrial Psychologists will try to increase minority representation in partnerships, SA § VII.D.4 and 5, at 25, it continues to allow financial advisors to transfer assets and accrue credit through partnerships and teams. SA § VII.D.5, 5.c, at 25.
Objectors contend that the policy creates an end-run around any transparent, equitable account distribution system (Objection No. 5). They contend that African-American FAs are routinely excluded from teams, and because teams are either formed with the express approval of management or the direct involvement of managers, Morgan Stanley's “policy of allowing established financial advisors to choose partners for lucrative agreements” should have been treated as an employment practice and addressed in the Settlement. Class counsel, relying on explanations from counsel for Morgan Stanley, apparently concluded that team formation was a practice of individual brokers beyond the reach of this lawsuit. See RT PFH at 69, 73 (Plaintiffs' counsel James Finberg); 81 (Morgan Stanley counsel Mark Dichter).

*6 Objectors next argue that because the Power Ranking FN6 system rewards those who already have bigger books of business as a result of discrimination, it perpetuates and institutionalizes existing bias (Objection No. 4). The Power Ranking formula is already in place as part of the Augst-Johnson settlement. As a result of concerns raised by counsel for the Plaintiffs in this action, Morgan Stanley changed the Power Ranking formula to de-emphasize past performance, tested the revised Power Ranking formula to see if it would have an adverse impact on minorities, and found that it did not. Declaration of Mark Dichter, filed November 19, 2007, ¶ 19; RT PFH at 65. Moreover, the Settlement Agreement provides for annual review of the Power Ranking formula so that it can be adjusted if the revised version turns out to have a disparate impact. SA § VII.D.2.d, at 22-23; RT FFH at 31-32.
FN6. The Power Ranking formula is the algorithm used to distribute accounts to financial advisors.
Objectors also contend the Settlement will not bring about meaningful change because it allows minorities to be excluded from teams and partnerships. There is no real dispute that partnerships provide important financial benefits for their

Even if the exclusion of minorities from teams and partnerships were attributable to Morgan Stanley, the fact that the Settlement Agreement still allows assets to transfer and credits to accrue through partnership is not fatal to the settlement. Again, the standard is not whether the settlement “could be better,” but whether it is fair, reasonable, and adequate. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir.1998). The Settlement Agreement provides for some efforts to increase minority representation on teams and partnerships. Given the extensive programmatic and monetary relief the settlement provides to class members, the Parties' decision to focus on other issues is acceptable.
*7 The monetary relief provided by the settlement is also fair, adequate, and reasonable. As set out in the Court's Order preliminarily approving the settlement, the monetary relief represents over 40% of the predicted disparity in compensation which Plaintiffs sought as damages. 2/7/08 Order at 13-14. The Settlement Agreement provides for a fund of approximately $16,000,000, approximately $14,000,000 of which is to be distributed to claiming class members-a per class member average of approximately $12,000. The monetary relief is comparable to that approved by the District Court for the District of Columbia in settlement of the parallel Augst-Johnson case, which called for distribution of approximately $32 million of a $46 million monetary fund to

claimants in a class of over 2,800 people (a per capita average of less than $12,000). See Declaration of James M. Finberg in Support of Reply Memorandum, filed November 19, 2007, Exh. A Augst-Johnson Second Revised Settlement Agreement (“Augst-Johnson SRSA”); Exh. C (October 26, 2007 Order finally approving Augst-Johnson settlement); see also Augst-Johnson, Docket No. 33-3, Declaration of Cyrus Mehri In Support of Joint Motion for Final Approval of Class Action Settlement, filed October 1, 2007, at ¶ 34 ($32 million of fund goes to class)). The Court also takes judicial notice of the settlement in another parallel gender discrimination case against brokerage firm Smith Barney, Amochaev et al. v. Citigroup Global Markets Inc., United States District Court for the Northern District of California Case No. C-05-1298-PJH. The district court recently found that the settlement agreement there, which provided similar injunctive relief and a monetary fund of approximately $25 million to a class of approximately 2,400 plaintiffs, was fair, adequate, and reasonable. See Id., Docket Nos. 194, filed August 13, 2008 (final approval) and 186, filed July 24, 2008 (memorandum in support of final approval).
Objectors again argue that the monetary relief is inadequate, both in absolute terms, and to the extent that it compensates Plaintiffs for “compensation shortfall” alone, rather than all recoverable damages (such as emotional distress, punitive damages, front pay, fringe benefits, and damages stemming from termination or constructive termination). (Objections 7, 8 and 12). The Court has already rejected these arguments. See 2/7/08 Order at 12-14. Again, the settlement is not unfair, either overall or to African-Americans as a subgroup, because it chooses to compensate class members primarily on the basis of their tenure at Morgan Stanley during the class period, with added compensation for termination. Compensation shortfalls can be readily calculated, and the Parties can choose to have monetary relief focus on pay disparities rather than on constructive or actual terminations as a means of compromising a complex set of claims. Id.
Objectors again argue that African-American and Latino class members should be represented by different subclasses and should not receive compensation according to a common formula. (Objection 11). The Court rejected the argument that a single class was inappropriate in its December 12, 2007 Order, finding that the central discriminatory practice at issue (account distribution) affected both groups in the same way, and there was no obvious conflict between the two. Id. at 4-5. After in camera inspection of data provided by Plaintiffs, the Court also concluded that the differences in compensation were not so great that compensating African Americans and Latinos according to the same formula was unfair. 2/7/08 Order at 13-14.

*8 Next, Objectors contend the monetary compensation is inadequate in light of the Supreme Court's decision in Ledbetter v. Goodyear Tire, 550 U.S. 618, 127 S.Ct. 2162, 167 L.Ed.2d 982 (2007). (Objection 15). They argue that now, Morgan Stanley will argue that class members are releasing all discrimination claims that arose during the class period, even if that discrimination results in lower wages in the future.
But Ledbetter, which came down while the parties were negotiating the settlement, actually makes the settlement more favorable. The Settlement Agreement gives class members approximately 43% of the calculated “compensation shortfall” between minority FAs and white FAs. Even assuming that the entire disparity in compensation is due to discriminatory acts such as discriminatory account distribution (a fact that has not been proven), many of those acts likely took place outside of the limitations period.FN7 After Ledbetter, complaints about compensation disparities that stem from acts outside the limitations period are no longer actionable. So, in effect, the settlement is likely greater than 43% of the recoverable compensation shortfall. Plaintiffs will release claims for any discriminatory conditions occurring during the class period, but that is the nature of any release. Moreover, the injunctive relief (including changes to the account distribution formula) will mitigate any future harm stemming from discrimination during the class period.
FN7. Objectors argued that account distribution and access to resources early in a financial advisor's career can make an enormous difference in later compensation, as the FA's book of business grows exponentially through referrals and asset growth. See, e.g., RT PFH at 42, 46-47 (testimony of Marian Tucker).
The remaining objections to the settlement as a whole have no merit.FN8 Objectors argue that class members have been denied the opportunity to review key components of the settlement because the proposed Account Distribution Policy and Power Ranking formula have been filed under seal in this case. (Objection No. 3). The formula was filed under seal because the parties agreed it was confidential, proprietary business information. See 10/24/07 Motion to File Under Seal. The Power Ranking was reformulated as part of the Augst-Johnson case; Plaintiffs' counsel were already negotiating with Morgan Stanley while that case was being settled, and they were able to suggest changes to the formula so that it would not adversely affect minority FAs.
FN8. The Court further finds that objections raised by class member Billy Manning and Marilyn White raise

arguments that have already been considered and rejected by this Court.
Like the Settlement Agreement in this action, the Augst-Johnson settlement, approved in October, 2007 required Morgan Stanley to provide each Financial Advisor with “the methodology for calculating the Power Rankings ... including the name of each factor, an explanation of each factor, and how each factor is weighted” and to “inform each Financial Advisor of her or his individual ranking at the time any distribution is made,” along with information about the actual distribution of each account, and the number of accounts and assets distributed to each ranked Financial Advisor. Augst Johnson SRSA at 21, § VII.C.2.b and c. As of late April, 2008, the Account Distribution Policy and Power Ranking System have been available to all current Morgan Stanley employees. RT FFH at 39-42. Although Objectors argue that the policy was disclosed too late to allow the Plaintiffs here to evaluate the settlement, they offered no additional arguments based on the formula that could show that class members were prejudiced.
*9 Objectors next argue generally that they-as African American FAs with a broad range of experiences with Morgan Stanley-would have been “more empathetic to the plight” of African-American class members and crafted a settlement more sensitive to their day-to-day experience. (Objection No. 6). This Court has found, however, that class members were appropriately and adequately represented, and that Plaintiffs' counsel received input and advice about conditions of employment at Morgan Stanley throughout the settlement negotiations.
Objectors next contend that the settlement improperly requires class members to release claims for which they are not being compensated, including termination and promotion claims. (Objection No. 9). But the settlement does give additional monetary relief to class members who were terminated or suffered extraordinary emotional distress. SA § VIII.D.2 at 39. Moreover, class members release only termination, promotion, constructive discharge and harassment claims “arising from” “low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions in force, or other production based performance related terminations.” Id. § V.A at 15. They do not, for example, release harassment claims arising from use of racial epithets. RT PFH at 20. The Augst-Johnson court approved a settlement in which the plaintiffs released all termination and sexual harassment claims. Augst-Johnson SRSA at 15, § V.A. The release is not overly broad.
Objectors reassert their argument that payments to named

representative Ms. Curtis-Bauer in settlement of her individual claims and as an incentive payment are improper. (Objection No. 10). The Court previously rejected this argument, 2/7/08 Order at 5-6, 8-9, and will not revisit it here.
Finally, Objectors argue that notice to class members was flawed and inadequate because the web site listed in the notice malfunctioned and class members were not explicitly informed about the Moore Group Objectors and their arguments against settlement. (Objection No. 14). Notice was adequate. Notice was sent to class members in accordance with this Court's orders, and access to the web site is not required to make notice adequate. In any case, although the “racecaseagainstmorganstanley.com” website, to which the notice referred, was not active until near the end of the claim period, counsel for Plaintiffs explained that a website was set up under a similar name (“morganstanleyracesettlement”) and that website was accessed even more times than the site listed in the notice. FFH at 76-78. Moreover, approximately 33% of the class responded in some way to the notice, and approximately 31% filed claims-a rate that even Objectors' counsel considers “very high.” RT PFH at 59.
In sum, the Court finds that the settlement is fair, adequate, and reasonable under the criteria set out in Officers for Justice, 688 F.2d at 625.
*10 THEREFORE, IT IS HEREBY ORDERED, on consideration of the Settlement Agreement attached hereto as Exhibit 1, the briefs, declarations, and oral arguments in support thereof, the submissions of the Objectors, evidence and argument submitted to the Court for in camera review, and the proceedings in this action to date,
1. Except as otherwise specified herein, the Court for the purposes of this Order adopts all defined terms set forth in the Settlement Agreement, attached hereto as Exhibit 1.
2. This Court has jurisdiction over the subject matter of this litigation and all matters relating thereto, and over the Representative Plaintiff and the Defendant.
3. The Court confirms as final its conditional certification for the purposes of settlement of the injunctive-relief Settlement Class defined in the Settlement Agreement and in Section IV of the Court's February 7, 2008 Order as “All African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or

its predecessor at any time between October 12, 2002 and December 3, 2007” and the monetary relief Settlement Class consisting of “All African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor at any time between October 12, 2002 and December 3, 2007 who did not timely opt out.”
4. At their request, twenty-four (24) Class Members initially opted out of the monetary settlement class FN9 and one (1) has since rescinded his opt-out. The Parties acknowledged at the final fairness hearing that an additional class member opted out on the last day of the opt-out period. RT FFH at 10-11. Therefore twenty-four (24) Class Members have been permitted to opt-out of the monetary settlement class without releasing any of their monetary claims. They are listed on Appendix A to this Order.
FN9. An additional opt-out was submitted, but Morgan Stanley's employment records establish that, although he was employed by Morgan Stanley, he was neither a Registered Financial Advisor Trainee nor Financial Advisor. Thus, he is not a Class Member and his opt-out is immaterial.
5. The Court confirms as final the appointment of Margaret Benay Curtis-Bauer as class representative as stated in Section V of the February 7, 2008 Order.
6. The Court confirms as final the appointment of the following as Class Counsel: Lieff, Cabraser, Heimann & Bernstein, LLP; Outten & Golden, LLP; and Altshuler Berzon LLP.
7. The distribution of the Class Notice and Claim Form to Class members by mail delivery, pursuant to this Court's orders, constituted the best notice practicable under the circumstances, were accomplished in all material respects, and fully met the requirements of Rule 23 of the Federal Rules of Civil Procedure, due process, the United States Constitution and any other applicable law.
8. Notice was sent on February 26, 2008 to the United States Attorney General and the Attorneys General of all 50 states and the District of Columbia pursuant to the Class Action Fairness Act. No objections were received from any federal or state officials.

*11 9. Pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, this Court grants final approval to the Settlement Agreement attached hereto as Exhibit 1 and to the terms of the settlement set forth therein. The Court finds that the Settlement Agreement is fair, reasonable, and adequate in all respects. The Court finds that the Settlement Agreement, revised after Court review and a hearing on December 3, 2007, was the culmination of more than a year of ongoing discussions and negotiations between the parties. This Court also finds that the Settlement Agreement is the result of arms-length negotiations between experienced counsel representing the interests of the Plaintiff and Defendant, after thorough factual and legal investigation, with the assistance of an experienced, professional mediator. Staton, 327 F.3d at 960; Class Plaintiffs v. City of Seattle, 955 F.2d 1268,1291 (9th Cir.1992). The Court specifically finds that the settlement is rationally related to the strength of Plaintiff's and Class members' claims given the risk, expense, complexity, and duration of further litigation. The mechanisms and procedures set forth in the Settlement Agreement by which payments are to be calculated and made to class members filing timely claims are fair, reasonable and adequate. Individual Class Members' monetary awards shall be determined in accord with the procedures set forth in the Settlement Agreement.
10. By operation of this Order and the Final Judgment, all released Class member and named Plaintiff claims are fully, finally and forever released, relinquished and discharged, pursuant to the terms of the Settlement Agreement, as to all monetary-relief Settlement Class members other than those listed in Appendix A hereto, who timely opted out pursuant to the terms of the Court's February 7, 2008 Order and the Settlement Agreement. The Court has reviewed the release provisions in the Settlement Agreement, and the Court finds the releases to be fair, reasonable, and enforceable under applicable law. Each member of the Settlement Class, including any member who makes an irrevocable election to exclude himself or herself from the monetary relief Settlement Class, is hereby enjoined from commencing, prosecuting or maintaining in any Court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of this Court in connection with the Settlement Agreement. The Court further enjoins all members of this Settlement Class except those listed in Appendix A, who have timely opted out of the monetary-relief Settlement Class, from commencing, prosecuting or maintaining, either directly, representatively or in any other capacity, any claim that is subsumed within the Settlement Agreement and from asserting any and all class and other claims that were released pursuant to the Settlement Agreement.

11. The Settlement Agreement attached hereto as Exhibit 1 is

hereby approved and incorporated herein and shall become effective according to its terms. The allocation plan for individual Class Members' monetary awards procedures as set forth in the Settlement Agreement is approved.
*12 12. The Second Amended Complaint shall automatically be dismissed with prejudice ten business days after the Effective Date, as that term is defined in the Settlement Agreement, except that the Court shall retain continuing jurisdiction, pursuant to the terms of the Settlement Agreement.
13. Neither the Settlement Agreement, nor this Order, nor the certification of the Class, nor any communication or action by the parties in connection with the Settlement constitutes or shall be deemed to constitute an admission by Morgan Stanley of any liability or wrongdoing whatsoever, or to constitute a finding by this Court as to the merits of any claim or defense asserted or that could have been asserted in this action, or as to any wrongdoing by Morgan Stanley. Neither the Settlement Agreement nor this Order is or shall be used or deemed to be an admission in any action or proceeding of any fault, liability or wrongdoing by any person or entity; and neither the Settlement Agreement, nor any negotiations or proceedings related thereto, nor this Order, nor any related document or communication, shall be offered or received in evidence against any person or entity in any action or proceeding as an admission, concession, presumption or inference as to the merits of any claim or defense; however, the Settlement Agreement or this Order may be received in evidence in any proceeding in this Court as may be necessary to consummate or enforce the Settlement Agreement or this Order.
14. The Court hereby enjoins disclosure to third parties of the documents and information discussed or exchanged during the parties' confidential settlement negotiations and mediation to any third party not specified in the Parties' confidentiality agreements.
15. The Court retains jurisdiction over this matter, pursuant to the terms of the Settlement Agreement.
IT IS SO ORDERED.
Appendix A
Timely Opt-Out Requests

Last Name Rivera Cruz Tucker Roy Moore Mcdowell Mabon Lewers Grant Evans Carter Bell Barnett Allen Jr. Owens Stalling Howard Montes Gordillo Williams Lowell Nyamuswa Cyrus Dixon Griffin Rescinded Opt-Out Request
John Peter Greer, III

First Name Juan Luis Marion J Brian Keith Ronald Eugene Carlton Thomas Maurice Gene Mark Janice Lanta Larnett Patrick Eugene Anthony T Michael Leon Morris James Dewitt Hubert Jacqueline D Joseph F. Oscar Jose Denise Lavern Carlos Sarah Sarayi Theron Martin Vincent

 
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TATES DISTRICT C

UNITED S
ALIFORNIA

OURT NORTH

9/7/2011 !<PPPPPPPPPPPPPPPPPPPPPPPP

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ERN DISTRICT OF C

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 Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 1 of 8

1 James M. Finberg (SBN 114850) Eve H. Cervantez (SBN 164709)
2 Altshuler Berzon LLP 177 Post Street, Suite 300
3 San Francisco, CA 94108 T: (415) 421-7151
4 F: (415) 362-8064 jfinberg@altber.com
5 ecervantez@altber.com

6 Kelly M. Dermody (SBN 171716) Lieff, Cabraser, Heimann

7

& Bernstein LLP Embarcadero Center West

8

275 Battery Street 29th Floor

9

San Francisco, CA 94111-3339

10

Tel. (415) 956-1000 Fax. (415) 956-1008

kdermody@lchb.com 11

12

Adam T. Klein Outten & Golden LLP

13

3 Park Avenue 29th Floor

New York, NY 10016 14 T: (212) 245-1000

F: (212) 977-4005

15 atk@outtengolden.com

Mark S. Dichter MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5001 mdichter@morganlewis.com
Attorneys for Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. and Morgan Stanley Smith Barney LLC

16 Class Counsel

17

IN THE UNITED STATES DISTRICT COURT

18

FOR THE NORTHERN DISTRICT OF CALIFORNIA

19 Daisy Jaffe, Denise Williams, and Margaret

) Case No. C-06-3903 (TEH)

20 Benay Curtis-Bauer, on behalf of themselves )

and all others similarly situated,

) CLASS ACTION

21

)

Plaintiffs, 22

) STIPULATION AND [PROPOSED] ) ORDER TO EXTEND JAFFE

23

v.

) SETTLEMENT AGREEMENT )

24 Morgan Stanley & Co., Incorporated, formerly )

known as Morgan Stanley DW, Inc.,

)

25

)

26

Defendant.

)

27

28

STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 2 of 8

1

STIPULATION

2 Counsel for the parties hereby stipulate, subject to the approval of the Court, to the following
3 terms:
4

5 1. 6 7 2. 8 9 10 11 12 13

The Jaffe Settlement Agreement shall be extended for two additional years, subject to the terms below.
Effective October 1, 2015 through September 30, 2017, the parties shall jointly appoint Fred Alvarez, Esq. as the diversity monitor (“Diversity Monitor” or “DM”). The Diversity Monitor shall be external to and independent of MSSB, but will report directly to the Head of the Field for Wealth Management. The Diversity Monitor shall monitor MSSB’s efforts to carry out the terms of this Extension of the Consolidated Settlement Agreement. The role of the Diversity Monitor during the Extension will be limited to the tasks set forth below:
a. review annual bonus data and information provided by the Company related to the diversity component of each Complex and Branch Manager’s compensation to monitor compliance with the 2015 Managerial Diversity Compliance Program, as it exists or may be modified based on input from the Industrial Psychologists “IPs.”

14

b. review account re-distribution data and exception reports.

15

c. review the participation and splits of female, African American and Latino FAs in

16

teams within and across branches.

17

d. review the Partnership Dispute Reports on female FAs and will report on these to

the Industrial Psychologists.

18 e. monitor bi-annual training of management on EEO policies, and policies against

19

discrimination and retaliation, and ensure that the training agreed to was implemented.

20

f. review exception reports regarding the Financial Advisor of the Day program.

21

g. review the exit questionnaire responses completed by departing female, African

22

American and Latino Financial Advisors, as well as information regarding the retention of female, Latino and African American Financial Advisors annually, and report findings

23

of this review to Human Resources and report as part of the Diversity Monitor’s Report

to the Parties.

24

h. monitor on an annual basis the representation rates of women, Latinos and

25

African Americans in the Financial Advisor Associate and Financial Advisor positions.

26

i. review the FAA selection process and the conversion rates from FAA to FA.

27

28
1
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 3 of 8

1 3. 2 3 4 5 6 7 8 4. 9
5. 10 11 6. 12 13 7.

The Diversity Monitor will provide reports to Lead Class Counsel and MSSB at least semi-annually regarding the items monitored, including in this Section and including the analysis of the account re-distribution system. The Diversity Monitor may report incidents of potential material non-compliance with this Consolidated Settlement Agreement to Lead Class Counsel and MSSB on a more frequent basis. It is understood that the role of the Diversity Monitor shall be to evaluate and report on MSSB’s progress under and compliance with its specific obligations during this extended term. While the parties share an objective of increasing diversity and enhancing the success of diverse individuals through, among other things, the continuation of the initiatives set forth herein, this extension does not require that any statistical outcome be achieved and MSSB’s compliance shall not be measured by any statistical outcome.
Paragraph VII.G.1. of the Jaffe Settlement Agreement shall remain in effect during the extended term.
The complaint reporting process and the Diversity Monitor’s role in the review of individual complaints will expire on September 30, 2015.
The Diversity Monitor will maintain records for the term of this Jaffe Settlement Agreement and the Extension.

14

a. During the period October 1, 2015 to September 30, 2017, except as specified

below), the role of the IPs will be extended, limited to the tasks set forth below,

15

although MS may engage the IPs on additional matters, outside the scope of the

Agreements, at any time. 16

17

(i) FAA Selection Process

18

(1) Continue to work with MS management in evaluating the SRT test

which has been implemented as a replacement for the SIFMA Test

19

and provide recommendations, if any, with respect to

modifications of that test.

20

(2) Continue to develop three additional FAA selection products: the

21

entrepreneurial assessment, a structured interview and a role

22

playing tool.

23

(3) Evaluate the effectiveness of those new selection tools and make

recommendations for modification and/or continued use of the

24

tools.

25

(ii) Managerial Diversity Compensation – The 2015 program will be

continued through 2017 subject to further minor refinements to, for

26

example, better capture results on teaming and partnering, with results

27

reported to the Diversity Monitor, the IPs, and the Class Counsel. The

28 2
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 4 of 8

1

Industrial Psychologists will be available for consultation at the request of

MS. 2

3

(iii) Teaming/Partnerships

4

Continue to provide recommendations for increasing participation of

female, African American and Latino Financial Advisors in teams and

5

partnerships, including splits between male and female partners and

between white and Latino and African American partners, and dissolution

6

of partnerships and teams.

7

(iv) The IPs shall report on the management leadership assessment program, to

8

the extent continued by MSSB, to MSSB, the Diversity Monitor and Class Counsel.

9 (v) The IPs shall report on skills training to diverse FAAS and FAS, to the

10

extent offered, to MSSB, the Diversity Monitor and Class Counsel.

11

(vi) Consistent with the Jaffe Agreement, the IPs shall report on their work to

the Diversity Monitor and Class Counsel. Consistent with existing

12

procedure under the Jaffe Settlement Agreement, the IPs shall meet with

13

the Diversity Monitor and Class Counsel at least semi-annually. In

advance of those meetings the IPs will provide MSSB with the agenda and

14

a copy of their presentation and data to be presented. The two IPs shall

coordinate their work to avoid un necessary duplication.

15

b. Subject to signing an appropriate confidentiality agreement, and upon reasonable

16

advance notice, the Diversity Monitor and the Industrial Psychologists will have

17

reasonable access to relevant documents, data, and MSSB employees. This specifically includes data with respect to female, African American, and/or Latino

18

Financial Advisor participation in teams or partnerships, including splits between

male and female partners and white and Latino and African American partners

19

and dissolution of partnerships and teams.

20

c. The Diversity Monitor will be compensated by MSSB for his remaining work on

21

a fixed fee basis acceptable to the DM and MSSB. The Industrial Psychologists will be compensated by MSSB for their remaining work on a fixed fee basis

22

acceptable to the IPs and MSSB.

23
24 8.
25
26
27

d. If it becomes necessary to replace the Diversity Monitor or either Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement.
Additional matters not involving the Industrial Psychologists.
a. Account Redistribution Issues (i) Pre-Existing Client Relationships

28 3
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 5 of 8

1

(1) MS will initiate a pilot process which includes a prescribed

dialogue between branch management and a client where an FA

2

leaves the Firm and the branch learns that another FA has a pre-

3

existing relationship with the household but that FA did not

originate the relationship and the household has not been part of a

4

JPN for 12+ months. The outline for such dialogue shall be open-

ended and not suggest that a client select a particular FA. 5

(2) MS will report to class counsel no later than January 31, 2016 on

6

the effectiveness of this process and whether it can be implemented

7

more broadly or whether refinements should be made. If further refinements are needed, class counsel and MS will negotiate them

8

in good faith in to achieve a constructive solution that is

reasonably crafted to maximize client retention while minimizing

9

any risk of abuse of the pre-existing client relationship exception. `

10

(ii) Debit-Credit Resolution

11

MS agrees to further modify the debit/credit resolution process to continue

12

to enhance the pace of resolutions, including (a) implementation of revised

system logic that will provide an additional round of credit/debit

13

resolutions per cycle, and (b) modifying the system so that a round of

debit/credit resolutions precede each power ranking cycle, making the

14

largest number of households available for the resolution process. The

15

Diversity Monitor will continue to work with MS in evaluating additional modifications to the Account Redistribution program to reduce the

16

existing debit and credit balances. With respect to the credits created

pursuant to paragraph VII.D.3.d. of the Jaffe Settlement Agreement, FAs

17

who have, at the expiration of the extended agreement, credits which have

been outstanding for two or more years, will have the option of converting

18

those credits into supplemental contributions, in addition to such

19

contributions as the FAs may otherwise qualify for, into their Business Development Account at the rate of $1 for each $1,000 in outstanding

20

credits resulting from prior exceptions involving households of less than

$10 million and $1 for each $2,000 in outstanding credits resulting from

21

prior exceptions involving households of $10 million or more. To the

extent the credit based Business Development funds resulting from such

22

conversion exceed $10,000, the excess will be contributed in subsequent

23

years, subject to a maximum of $10,000 per year. Such supplemental BDA contributions may be used towards coaching and other business

24

development expenses, consistent with MSSB’s policies and procedures.

25 9. Role of Management

26

Kara Underwood or her successor shall have primary responsibility ensuring the day to

27

day compliance with this agreement and with respect to compliance with this agreement shall report to Shelley O’Connor or her successor who shall have ultimate responsibility

28 4
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 6 of 8

1

ensuring that MSSB fulfills its duties in this agreement and the underlying settlement

agreements. 2

3 10. Monitoring Fees

4

Class Counsel collectively shall be reimbursed at the rate of $150,000 per year for work

completed in the extended decree monitoring.

5 11. Teaming/Partnerships

6

For one year following the expiration of the extended agreements, MSSB will continue

7

programs implemented during the extension of the agreements related to increasing

8

participation of female, African American and Latino Financial Advisors in teams and partnerships, including splits between male and female partners and between white and

9

Latino and African American partners. Prior to the expiration of the agreements, the IPs

will provide any recommendations they have for refinements to the program(s) and

10

MSSB will report to Class Counsel within a reasonable period which of those

refinements, if any, they intend to implement. 11

DATED: September 29, 2015 12

DATED: September 29, 2015

13 _/s/ Kelly M. Dermody__________
14 Kelly M. Dermody LIEFF, CABRASER, HEIMANN &
15 BERNSTEIN, LLP
275 Battery Street, 30th Floor 16 San Francisco, CA 94111-3339
17 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
18 kdermody@lchb.com

__/s/ James M. Finberg_________ James M. Finberg ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064 jfinberg@altshulerberzon.com

19 20 DATED: September 29, 2015

21 ___/s/ Adam Klein__________

22 Adam Klein

OUTTEN & GOLDEN LLP 23 3 Park Avenue, 29th Floor

24

New York, NY 10016 Telephone: (212) 245-1000

25 Facsimile: (212) 977-4005 atk@outtengolden.com

26

Class Counsel 27

28 5
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 7 of 8

1 DATED: September 29, 2015

2

3 __/s/ Mark S. Dichter_________ Mark S. Dichter

4 MORGAN, LEWIS & BOCKIUS LLP

1701 Market Street

5 Philadelphia, PA 19103

6

Telephone: (215) 963-5291 Facsimile: (215) 963-5001

7 mdichter@morganlewis.com

8 Attorneys for Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. and
9 Morgan Stanley Smith Barney LLC
10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

Case 3:06-cv-03903-TEH Document 301 Filed 09/30/15 Page 8 of 8

1

ORDER

2

The foregoing stipulation to extend the Jaffe settlement agreement is approved, and the

3 extension, pursuant to the terms of the stipulation, IS SO ORDERED.
4 The Court will continue to exercise jurisdiction over the case during the term of the
5

6 extension. 7

TATES DISTRICT C

8 Dated: 09/30/2015

UNITED S
ALIFORNIA

OURT NORTH

9

Hon. Thelton E. Henderson

10

United States District Judge

11

Judge Thelton E. Henderson

12

13

ERN DISTRICT OF C

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7
STIPULATION AND [PROPOSED] ORDER TO EXTEND JAFFE SETTLEMENT AGREEMENT

 
 Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 1 of 37
ADRMOP,APPEAL,CLOSED,E−Filing
U.S. District Court California Northern District (San Francisco) CIVIL DOCKET FOR CASE #: 3:06−cv−03903−TEH

Jaffe, et al v. Morgan Stanley DW, Inc. Assigned to: Hon. Thelton E. Henderson Demand: $0 Case in other court: 08−17599 Cause: 42:2000e Job Discrimination (Employment)
Plaintiff

Date Filed: 06/22/2006 Date Terminated: 10/22/2008 Jury Demand: Plaintiff Nature of Suit: 442 Civil Rights: Jobs Jurisdiction: Federal Question

Daisy Jaffe

represented by Kelly M. Dermody Leiff Cabraser Heimann & Bernstein LLP 275 Battery Street, 29th Floor San Francisco, CA 94111−3339 415−956−1000 Fax: 415−956−1008 Email: kdermody@lchb.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Adam T. Klein Outten & Golden LLP 685 Third Avenue, 25th Floor New York, NY 10017 212−245−1000 Fax: 646−509−2060 Email: atk@outtengolden.com ATTORNEY TO BE NOTICED

Bill Lann Lee Lewis Feinberg Lee & Jackson, P.C. 476 9th Street Oakland, CA 94607 510−839−6824 Fax: 510−839−7839 Email: blee@creeclaw.org TERMINATED: 02/27/2007 ATTORNEY TO BE NOTICED

Elizabeth A. Alexander Lieff Cabraser Heimann & Bernstein, LLP 150 4th Avenue North, Suite 1650 Nashville, TN 37219−2423 615−313−9000 Fax: 615−313−9965 Email: ealexander@lchb.com ATTORNEY TO BE NOTICED

Eve Hedy Cervantez Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 (415) 421−7151 Fax: 415−362−8064 Email: ecervantez@altshulerberzon.com ATTORNEY TO BE NOTICED

Heather H. Wong Lieff Cabraser Heimann & Berstein LLP 275 Battery Street, 30th Floor San Francisco, CA 94111−3339

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 2 of 37

415−956−1000 x2150 Fax: 415−956−1008 Email: hwong@lchb.com ATTORNEY TO BE NOTICED

James M. Finberg Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 415−421−7151 Fax: 415−362−8064 Email: jfinberg@altshulerberzon.com ATTORNEY TO BE NOTICED

Justin Swartz Outten & Golden LLP 685 Third Avenue 25th Floor New York, NY 10017 212−245−1000 Fax: 646−509−2060 Email: jms@outtengolden.com ATTORNEY TO BE NOTICED

Piper Hoffman Outten & Golden LLP 3 Park Avenue, 29th Floor New York, NY 10016 212−245−1000 Fax: 212−977−4005 Email: ph@outtengolden.com ATTORNEY TO BE NOTICED

Plaintiff
Denise Williams on behalf of themselves & all others similarly situated TERMINATED: 07/16/2008

represented by Kelly M. Dermody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Adam T. Klein (See above for address) ATTORNEY TO BE NOTICED

Bill Lann Lee (See above for address) TERMINATED: 02/27/2007 ATTORNEY TO BE NOTICED

Elizabeth A. Alexander (See above for address) ATTORNEY TO BE NOTICED

Eve Hedy Cervantez (See above for address) ATTORNEY TO BE NOTICED

Heather H. Wong (See above for address) ATTORNEY TO BE NOTICED

James M. Finberg (See above for address) ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 3 of 37

Justin Swartz (See above for address) ATTORNEY TO BE NOTICED

Piper Hoffman (See above for address) ATTORNEY TO BE NOTICED

Suzanne Elaine Bish Stowell & Friedman Ltd. 303 W. Madison Suite 2600 Chicago, IL 60606 (312) 431−0888 Fax: (312) 431−0228 Email: sbish@sfltd.com PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff Margaret Benay Curtis−Bauer

represented by Kelly M. Dermody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Adam T. Klein (See above for address) ATTORNEY TO BE NOTICED

Elizabeth A. Alexander (See above for address) ATTORNEY TO BE NOTICED

Eve Hedy Cervantez (See above for address) ATTORNEY TO BE NOTICED

Heather H. Wong (See above for address) ATTORNEY TO BE NOTICED

James M. Finberg (See above for address) ATTORNEY TO BE NOTICED

Justin Swartz (See above for address) ATTORNEY TO BE NOTICED

Piper Hoffman (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Kathy Frazier

represented by Suzanne Elaine Bish (See above for address) ATTORNEY TO BE NOTICED

V. Defendant Morgan Stanley DW, Inc.

represented by

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 4 of 37
Rebecca Dianne Eisen Morgan Lewis & Bockius, LLP One Market Plaza , Spear Street Tower San Francisco, CA 94105 415/442−1328 Fax: 415−442−1001 Email: reisen@morganlewis.com (Inactive) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Daryl Steven Landy Morgan Lewis & Bockius LLP 600 Anton Blvd. Suite 1800 Costa Mesa, CA 92626 714−830−0600 Fax: 714−830−0700 Email: dlandy@morganlewis.com ATTORNEY TO BE NOTICED
Gregg Paris Yates Morgan, Lewis & Bockius LLP One Market Spear Tower San Francisco, CA 94105 415−442−1000 Email: gyates@morganlewis.com ATTORNEY TO BE NOTICED
James Norman Penrod Morgan Lewis & Bockius LLP One Market, Spear Street Tower San Francisco, CA 94105 415−442−1000 Fax: 415−442−1001 Email: jpenrod@morganlewis.com ATTORNEY TO BE NOTICED
Kenneth J. Turnbull Morgan Lewis & Bockius LLP 101 Park Avenue New York, NY 10178 212−309−6000 Fax: 212−309−6001 ATTORNEY TO BE NOTICED
Kent Michael Roger Morgan Lewis & Bockius LLP One Market, Spear Street Tower San Francisco, CA 94105 (415) 442−1140 Fax: (415) 442−1001 Email: kroger@morganlewis.com ATTORNEY TO BE NOTICED
L. Julius M. Turman Reed Smith LLP 101 Second St. Suite 1800 San Francisco, CA 94105 415−459−4740 Fax: 415−391−8269 Email: jturman@reedsmith.com ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 5 of 37

3rd party defendant Patrick Carter
3rd party defendant Martin Dixon Claimant Arthur Villanueva
Miscellaneous Ronald Moore

Mark S. Dichter Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 215.963.5299 Fax: 877.432.9652 Email: mdichter@morganlewis.com ATTORNEY TO BE NOTICED
Philip James Smith Reed Smith LLP 101 2nd Street Suite 1800 San Francisco, CA 94105 (415) 659−4743 Fax: (415) 391−8269 Email: psmith@reedsmith.com ATTORNEY TO BE NOTICED
represented by Robert S. Nelson Nelson Law Group 900 Cherry Avenue Suite 300 San Bruno, CA 94066 (650) 794−2760 Fax: (650) 794−2761 Email: rnelson@nelsonlawgroup.net ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Brad Naley Baker Baker, Burton and Lundy 515 Pier Avenue Hermosa Beach, CA 90254 310−802−7760 Fax: 310−376−7483 Email: brad@bakerburtonlundy.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Linda D. Friedman Stowell & Friedman Ltd. 321 S. Plymouth Court, 14th Floor Chicago, IL 60604 (312) 431−0888 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson ,

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 6 of 37

449 15th Street, Suite 201 Oakland, CA 94612 510−625−1507 Fax: (510) 836−3339 Email: barirobinson@aol.com ATTORNEY TO BE NOTICED

Mary Stowell Stowell & Friedman Ltd. 321 S. Plymouth Court, Suite 1400 Chicago, IL 60604 (312) 431−0888 ATTORNEY TO BE NOTICED

Robert S. Nelson Nelson Law Group 900 Cherry Avenue, Suite 300 San Bruno, CA 94066 (650) 794−2760 Fax: (650) 794−2761 Email: rnelson@nelsonlawgroup.net ATTORNEY TO BE NOTICED

Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Miscellaneous Morris Allen, Jr.

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Michael Barnett

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 7 of 37

Miscellaneous Anthony Bell
Miscellaneous Martin Dixon
Miscellaneous Ernest Dorsey
Miscellaneous Mary Evans

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 8 of 37

ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Janice Grant

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Harris Harris

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Mark Lewers

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 9 of 37

Miscellaneous Maurice Mabon
Miscellaneous Brian Roy
Miscellaneous Marion Tucker
Miscellaneous Carlton McDowell

represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Linda D. Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Bari Susan Robinson , (See above for address)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 10 of 37

ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Ronald Moore

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Morris Allen

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Michael Barnett

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Anthony Bell

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Ernest Dorsey

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Mary Evans

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Janice Grant

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Justin Harris

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Mark Lewers

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Miscellaneous Maurice Mabon

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 11 of 37

Miscellaneous Brian Roy Miscellaneous Marion Tucker Miscellaneous Carlton McDowell Miscellaneous Jonathan Glover
Miscellaneous Latrissa Gordon
Miscellaneous Marilyn White

represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Robert S. Nelson (See above for address) ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto Law Offices of Eric S. Oto 801 S. Flower Street, 5th Floor Los Angeles, CA 90017 (213) 623−8891 Fax: (213) 622−7575 Email: eso@otoesq.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto (See above for address)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 12 of 37

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Miscellaneous Peter Meme

represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Miscellaneous Marshell Miller

represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Miscellaneous Jerome Senegal

represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 13 of 37

Miscellaneous Hubert Stalling
Miscellaneous Lanta Evans−Mott
Miscellaneous Sarah Nyamuswa

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED
Mary Stowell (See above for address) ATTORNEY TO BE NOTICED
Suzanne Elaine Bish

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 14 of 37

(See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Miscellaneous Theron Cyrus

represented by Eric Satoru Oto (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Linda D. Friedman (See above for address) ATTORNEY TO BE NOTICED

Mary Stowell (See above for address) ATTORNEY TO BE NOTICED

Suzanne Elaine Bish (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Date Filed 06/22/2006
06/22/2006 06/22/2006 06/22/2006 07/14/2006 07/31/2006 07/31/2006 07/31/2006 08/01/2006 08/03/2006

# Docket Text
1 CLASS ACTION COMPLAINT for Injunctive & Declaratory Relief & Damages for Violations of Title VII of the Civil Rigths Act of 1964 & The California Fair Employment & Housing Act & Demand for Jury Trial − [Summons Issued] against Morgan Stanley DW, Inc., [Filing Fee: $350.00, Receipt Number 3387018]. Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 6/22/2006) Additional attachment(s) added on 7/10/2006 (tn, COURT STAFF). (Entered: 06/23/2006)
SUMMONS Issued as to Defendant Morgan Stanley DW, Inc.. (tn, COURT STAFF) (Entered: 06/23/2006)
2 ADR SCHEDULING ORDER: Case Management Statement due 9/19/2006 & Initial Case Management Conference set for 9/26/2006 at 10:00 A.M. (Attachments: #(1) Standing Order). (tn, COURT STAFF) (Filed on 6/22/2006) (Entered: 06/23/2006)
CASE DESIGNATED for Electronic Filing. (tn, COURT STAFF) (Entered: 06/23/2006)
3 STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 7/14/2006) (Entered: 07/14/2006)
4 APPLICATION of Attorney Elizabeth A. Alexander for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00 Receipt Number 3388365] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/31/2006) (Entered: 08/03/2006)
RECEIVED ORDER: [Proposed] Order Granting re 4 Application for Admission of Attorney Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Entered: 08/03/2006)
5 CERTIFICATE OF SERVICE Filed by Plaintiff Daisy Jaffe re 4 Application for Leave to Appear in Pro Hac Vice & [Proposed] Order. (tn, COURT STAFF) (Filed on 7/31/2006) (Entered: 08/03/2006)
7 ORDER GRANTING Application of Elizabeth Alexander for admission of attorney Pro Hac Vice 4 − Signed by Magistrate Judge Elizabeth D. Laporte. (lmh, COURT STAFF) (Filed on 8/1/2006) (Entered: 08/04/2006)
6 APPLICATION of Attorney Justin M. Swartz for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00 Receipt Number 3388583] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 8/3/2006) (Entered: 08/03/2006)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 15 of 37

08/03/2006 08/04/2006 08/04/2006 08/04/2006 08/04/2006 08/08/2006 08/14/2006 08/14/2006 09/05/2006 09/14/2006 09/14/2006 09/14/2006 09/14/2006 09/14/2006 09/15/2006
09/18/2006 09/20/2006 09/20/2006 09/21/2006

RECEIVED ORDER: [Proposed] Order re 6 Application for Leave to Appear in Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Entered: 08/03/2006)
8 ORDER GRANTING Application of Justin Swartz for admission of attorney Prop Hac Vice 6 − Signed by Magistrate Judge Elizabeth D. Laporte (lmh, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/04/2006)
9 APPLICATION of Attorney Piper Hoffman for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3388630] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/07/2006)
RECEIVED ORDER: [Proposed] Order Granting re 9 Application for Admission of Attorney Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Entered: 08/07/2006)
10 CERTIFICATE OF SERVICE by Daisy Jaffe re 9 MOTION for leave to appear in Pro Hac Vice & [Proposed] Order. (tn, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/07/2006)
11 ORDER GRANTING Application of Piper Hoffman for admission of attorney Pro Hac Vice 9 − Signed by Magistrate Judge Elizabeth D. Laporte. (lmh, COURT STAFF) (Filed on 8/8/2006) (Entered: 08/09/2006)
12 STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 8/14/2006) (Entered: 08/14/2006)
13 CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 12 Stipulation (Yates, Gregg) (Filed on 8/14/2006) (Entered: 08/14/2006)
14 NOTICE of need for ADR Phone Conference (ADR L.R. 3−5 d) (Alexander, Elizabeth) (Filed on 9/5/2006) (Entered: 09/05/2006)
15 Declination to Proceed Before a U.S. Magistrate Judge by Morgan Stanley DW, Inc. and Request for Reassignment to a United States District Judge. (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)
16 CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 15 Declination to Proceed Before a U.S. Magistrate Judge (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)
17 CLERK'S NOTICE of Impending Reassignment to U.S. District Judge (lmh, COURT STAFF) (Filed on 9/14/2006) (Entered: 09/14/2006)
18 STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)
19 CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 18 Stipulation (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)
20 ORDER REASSIGNING CASE. Case reassigned to Judge Thelton E. Henderson for all further proceedings. Judge Elizabeth D. Laporte no longer assigned to the case.. Signed by Executive Committee on 9/15/06. (as, COURT STAFF) (Filed on 9/15/2006) (Entered: 09/15/2006)
21 CLERK'S NOTICE: Initial Case Management Conference set for 10/2/2006 at 01:30 PM. (rbe, COURT STAFF) (Filed on 9/18/2006) (Entered: 09/18/2006)
22 STIPULATION RESETTING DATE OF CASE MANAGEMENT CONFERENCE AND [PROPOSED] ORDER THEREON by Morgan Stanley DW, Inc.. (Roger, Kent) (Filed on 9/20/2006) (Entered: 09/20/2006)
23 CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 22 Stipulation (Roger, Kent) (Filed on 9/20/2006) (Entered: 09/20/2006)
24 STIPULATION AND ORDER: Initial Case Management Conference rescheduled to 10/30/2006 at 01:30 PM. Signed by Judge Thelton E. Henderson on 09/21/06. (rbe, COURT STAFF) (Filed on 9/21/2006) (Entered: 09/21/2006)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 16 of 37

10/12/2006
10/17/2006
10/17/2006 10/18/2006 10/18/2006
10/18/2006 10/18/2006 10/18/2006 10/18/2006
10/19/2006
10/20/2006 10/23/2006 10/23/2006
10/24/2006 10/24/2006 10/25/2006

25 AMENDED COMPLAINT , First Amended Class Action Complaint For Injunctive And Declaratory Relief And Damages, etc. against all defendants. Filed byDaisy Jaffe. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Dermody, Kelly) (Filed on 10/12/2006) (Entered: 10/12/2006)
30 APPLICATION of Attorney Adam T. Klein for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3391350] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 10/17/2006) Additional attachment(s) added on 10/24/2006 (tn, COURT STAFF). (Entered: 10/18/2006)
RECEIVED ORDER: [Proposed] Order Granting Application for Admission of Attorney Pro Hac Vice re 30 Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Entered: 10/18/2006)
26 Ex Parte Application to Continue Case Management Conference filed by Morgan Stanley DW, Inc.. (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)
27 Declaration of Gregg P. Yates in Support of 26 Ex Parte Application to Continue Case Management Conference filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit 1−3)(Related document(s) 26 ) (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)
28 Proposed Order re 26 Ex Parte Application to Continue Case Management Conference by Morgan Stanley DW, Inc.. (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)
29 CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 26 Ex Parte Application to Continue Case Management Conference (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)
31 CERTIFICATE OF SERVICE by Daisy Jaffe of Notice of Judge Henderson's Standing Orders (Wong, Heather) (Filed on 10/18/2006) (Entered: 10/18/2006)
32 MEMORANDUM in Opposition TO EX PARTE APPLICATION TO CONTINUE CASE MANAGEMENT CONFERENCE filed byDaisy Jaffe. (Attachments: # 1 Affidavit OF KELLY M DERMODY IN SUPPORT OF PLAINTIFFS OPPOSITION TO EX PARTE APPLICATION TO CONTINUE CASE MANAGEMENT CONFERENCE)(Dermody, Kelly) (Filed on 10/18/2006) (Entered: 10/18/2006)
33 ORDER DENYING 26 Ex Parte Application to Continue Case Management Conference filed by Morgan Stanley DW, Inc. Signed by Judge Thelton E. Henderson on October 19, 2006. (tehlc1, COURT STAFF) (Filed on 10/19/2006) (Entered: 10/19/2006)
34 NOTICE of need for ADR Phone Conference (ADR L.R. 3−5 d) (Alexander, Elizabeth) (Filed on 10/20/2006) (Entered: 10/20/2006)
35 STIPULATION AND PROPOSED ORDER RE FILING JOINT CASE MANAGEMENT CONFERENCE STATEMENT by Daisy Jaffe. (Dermody, Kelly) (Filed on 10/23/2006) (Entered: 10/23/2006)
38 ORDER Signed by Judge Thelton E. Henderson GRANTING APPLICATION of Attorney Adam T. Klein for Leave to Appear in Pro Hac Vice re 30 . (tn, COURT STAFF) (Filed on 10/23/2006) Additional attachment(s) added on 10/26/2006 (tn, COURT STAFF). (Entered: 10/25/2006)
36 STIPULATION AND ORDER re: filing joint case management conference statement. Signed by Judge Thelton E. Henderson on 10/24/06. (rbe, COURT STAFF) (Filed on 10/24/2006) (Entered: 10/24/2006)
37 JOINT CASE MANAGEMENT STATEMENT AND RULE 26F REPORT filed by Daisy Jaffe. (Dermody, Kelly) (Filed on 10/24/2006) (Entered: 10/24/2006)
39 APPLICATION of Attorney Mark S. Dichter for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3391649] Filed by Defendant Morgan Stanley DW, Inc.. (tn, COURT STAFF) (Filed on 10/25/2006) Additional attachment(s) added on 10/26/2006 (tn, COURT STAFF). (Entered: 10/26/2006)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 17 of 37

10/25/2006 10/25/2006 10/25/2006 10/25/2006
10/26/2006 10/26/2006 10/27/2006 10/27/2006 10/30/2006 10/30/2006
10/30/2006 10/30/2006 10/30/2006 10/30/2006

RECEIVED ORDER: [Proposed] Order Granting re 39 Application for Admission of Mark S. Dichter Pro Hac Vice Submitted by Defendant Morgan Stanley DW, Inc.. (tn, COURT STAFF) (Entered: 10/26/2006)
40 APPLICATION of Attorney Kenneth J. Turnbull for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3391649] Filed by Defendant Morgan Stanley DW, Inc.. (tn, COURT STAFF) (Filed on 10/25/2006) Additional attachment(s) added on 10/26/2006 (tn, COURT STAFF). (Entered: 10/26/2006)
RECEIVED ORDER: [Proposed] Order Granting re 40 Application for Admission of Kenneth J. Turnbull Pro Hac Vice Submitted by Defendant Morgan Stanley DW, Inc..(tn, COURT STAFF) (Entered: 10/26/2006)
41 CERTIFICATE OF SERVICE Filed by Defendant Morgan Stanley DW, Inc. re 39 Application for leave to appear in Pro Hac Vice, re 40 Application for leave to appear in Pro Hac Vice & Lodged Proposed Order. (tn, COURT STAFF) (Filed on 10/25/2006) Additional attachment(s) added on 10/26/2006 (tn, COURT STAFF). (Entered: 10/26/2006)
42 STIPULATION to File Errata to Joint Case Management Conference Statement and Rule 26(f) Report by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 10/26/2006) (Entered: 10/26/2006)
43 EXHIBITS re 42 Stipulation to File Errata to Joint Case Management Conference Statement and Rule 26(f) Report filed byMorgan Stanley DW, Inc.. (Related document(s) 42 ) (Turman, L. Julius) (Filed on 10/26/2006) (Entered: 10/26/2006)
44 ORDER Signed by Judge Thelton E. Henderson on 10/27/2006 GRANTING Application for Admission of Attorney Kenneth J. Turnbull Pro Hac Vice re 40 .(tn, COURT STAFF) (Filed on 10/27/2006) Additional attachment(s) added on 10/30/2006 (tn, COURT STAFF). (Entered: 10/30/2006)
45 ORDER Signed by Judge Thelton E. Henderson on 10/27/2006 GRANTING Application for Admission of Attorney Mark S. Dichter Pro Hac Vice re 39 .(tn, COURT STAFF) (Filed on 10/27/2006) Additional attachment(s) added on 10/30/2006 (tn, COURT STAFF). (Entered: 10/30/2006)
46 Minute Entry: Initial Case Management Conference held on 10/30/2006 before Judge Thelton E. Henderson. (not reported) (rbe, COURT STAFF) (Date Filed: 10/30/2006) (Entered: 10/30/2006)
47 NOTICE by Morgan Stanley DW, Inc. Notice of Motion and Motion of Defendant Morgan Stanley DW, Inc. To Dismiss Plaintiff Denise Williams' Individual Claim for Race Discrimination, Under Title VII; Memorandum of Points and Authorities In Support of Defendant's Motion (Turman, L. Julius) (Filed on 10/30/2006) (Entered: 10/30/2006)
48 Proposed Order GRANTING DEFENDANT MORGAN STANLEY DW, INC.'S MOTION TO DISIMISS PLAINITFF DENISE WILLIAMS' INDIVIDUAL CLAIM FOR RACE DISCRIMINATION, UNDER TITLE VII by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 10/30/2006) (Entered: 10/30/2006)
49 NOTICE by Morgan Stanley DW, Inc. Notice of Motion & Motion of Def. Morgan Stanley DW, Inc. to Plainitffs' Class and Sub−Class Gender Discrimination Claims; Memorandum of Points & Authorities in Support of Defendant's Motion (Turman, L. Julius) (Filed on 10/30/2006) (Entered: 10/30/2006)
50 Proposed Order GRANTING DEFENDANT MSDW, INC.'S MOTION TO STAY PLAINTIFFS' CLASS AND SUB−CLASS GENDER DISCRIMINATION CLAIMS by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 10/30/2006) (Entered: 10/30/2006)
51 Declaration of MARK S. DICHTER ISO Morgan Stanley DW, Inc.'s Motion to Stay Plaintiffs' Class and Sub−Class Gender Discrimination Claims filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Turman, L. Julius) (Filed on 10/30/2006) (Entered: 10/30/2006)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 18 of 37

11/13/2006
11/14/2006
11/20/2006 11/20/2006
11/22/2006 11/22/2006
11/22/2006 11/27/2006
11/29/2006 11/29/2006 11/29/2006
12/06/2006 12/18/2006 01/02/2007 01/02/2007 01/19/2007 01/29/2007

52 STIPULATION AND [PROPOSED] ORDER REGARDING DEFENDANT'S MOTION TO DISMISS PLAINTIFF DENISE WILLIAMS' CLAIM FOR RACE DISCRIMINATION UNDER TITLE VII AND TIME FOR DEFENDANT TO FILE A RESPONSE by Daisy Jaffe. (Alexander, Elizabeth) (Filed on 11/13/2006) (Entered: 11/13/2006)
53 STIPULATION AND ORDER re: defendant's motion to dismiss plaintiff Williams' claim for race discrimination and time for defendant to file a response. Signed by Judge Thelton E. Henderson on 11/14/06. (rbe, COURT STAFF) (Filed on 11/14/2006) (Entered: 11/14/2006)
54 Memorandum in Opposition TO DEFENDANT'S MOTION TO STAY filed byDaisy Jaffe. (Alexander, Elizabeth) (Filed on 11/20/2006) (Entered: 11/20/2006)
55 AFFIDAVIT in Support of Memorandum in Opposition to Defendant's Motion to Stay byDaisy Jaffe. (Attachments: # 1 Exhibit 1 to Klein Declaration# 2 Exhibit 2 to Klein Declaration# 3 Exhibit 3 to Klein Declaration# 4 Exhibit 4 to Klein Declaration)(Alexander, Elizabeth) (Filed on 11/20/2006) (Entered: 11/20/2006)
56 Ex Parte Application to Continue the Deadline for Reply to Plaintiffs' Opposition to its Motion to Stay filed by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 11/22/2006) (Entered: 11/22/2006)
57 Declaration of Gregg P. Yates in Support of 56 Ex Parte Application to Continue the Deadline for Reply to Plaintiffs' Opposition to its Motion to Stay filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit 1)(Related document(s) 56 ) (Yates, Gregg) (Filed on 11/22/2006) (Entered: 11/22/2006)
58 Proposed Order re 56 Ex Parte Application to Continue the Deadline for Reply to Plaintiffs' Opposition to its Motion to Stay by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 11/22/2006) (Entered: 11/22/2006)
59 ORDER by Judge Thelton E. Henderson granting 56 Ex Parte Application to continue deadline for reply. The motion hearing is continued to Monday, 12/18/06 at 10:00 AM. (rbe, COURT STAFF) (Filed on 11/27/2006) Modified on 11/27/2006 (rbe, COURT STAFF). (Entered: 11/27/2006)
60 Reply to Opposition to Defendant's Motion to Stay filed byMorgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/29/2006) (Entered: 11/29/2006)
61 Request for Judicial Notice in Support of Reply Brief and Further Support of Motion to Stay filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit)(Turman, L. Julius) (Filed on 11/29/2006) (Entered: 11/29/2006)
62 Declaration of Mark S. Dichter in Reply to Plaintiffs' Opposition and in Further Support of Morgan Stanley DW, Inc.'s Motion to Stay Plaintiffs' Class and Sub−Class Gender Discrimination Claims filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit)(Turman, L. Julius) (Filed on 11/29/2006) (Entered: 11/29/2006)
63 ASSOCIATION of Counsel for Fred H. Altshuler by Daisy Jaffe. (Altshuler, Fred) (Filed on 12/6/2006) (Entered: 12/06/2006)
64 Minute Entry: Motion Hearing held on 12/18/2006 before Judge Thelton E. Henderson. The motion to stay is taken under submission. (Court Reporter: Sahar McVickar) (rbe, COURT STAFF) (Date Filed: 12/18/2006) (Entered: 12/18/2006)
65 NOTICE of Change of Address by James M. Finberg (Finberg, James) (Filed on 1/2/2007) (Entered: 01/02/2007)
66 NOTICE of Appearance by Eve H. Cervantez (Cervantez, Eve) (Filed on 1/2/2007) (Entered: 01/02/2007)
67 ORDER granting 49 Defendant's motion to stay class and subclass gender discrimination claims. Signed by Judge Thelton E. Henderson on 01/19/07. (tehlc3, COURT STAFF) (Filed on 1/19/2007) (Entered: 01/19/2007)
68 REPORTER'S TRANSCRIPT of Proceedings Held on 12/18/2007 before Judge Thelton E. Henderson − [Court Reporter: Sahar McVickar]. (tn, COURT STAFF) (Filed on 1/29/2007) (Entered: 01/30/2007)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 19 of 37

02/15/2007 02/21/2007 02/27/2007 03/15/2007 03/21/2007 04/13/2007 04/17/2007 06/22/2007 06/25/2007 08/02/2007 08/02/2007 08/08/2007 08/17/2007
08/30/2007 10/02/2007 10/05/2007

69 STIPULATION and Order Regarding Defendant's Time in Which to Respond to Plaintiffs' Individual Age and Race Claims by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 2/15/2007) (Entered: 02/15/2007)
70 STIPULATION AND ORDER re: defendant's time to respond to age and race claims. Signed by Judge Thelton E. Henderson on 02/20/07. (rbe, COURT STAFF) (Filed on 2/21/2007) (Entered: 02/21/2007)
71 NOTICE by Denise Williams, Daisy Jaffe NOTICE OF WITHDRAWAL OF COUNSEL (Lee, Bill) (Filed on 2/27/2007) (Entered: 02/27/2007)
72 STIPULATION and Order Extending the Stay of Gender Discrimination Claims by Morgan Stanley DW, Inc.. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Turman, L. Julius) (Filed on 3/15/2007) (Entered: 03/15/2007)
73 STIPULATION AND ORDER extending the stay of gender discrimination claims. Signed by Judge Thelton E. Henderson on 03/21/07. (rbe, COURT STAFF) (Filed on 3/21/2007) (Entered: 03/21/2007)
74 STIPULATION and Order extending the Stay of Gender Discrimination Claims by Morgan Stanley DW, Inc.. (Attachments: # 1 Proposed Order Stipulation and Order Extending the Stay of Gender Discrimination Claims)(Turman, L. Julius) (Filed on 4/13/2007) (Entered: 04/13/2007)
75 STIPULATION AND ORDER extending the stay of gender discrimination claimsThe Case Management Conference is continued to 6/25/2007 at 01:30 PM. Signed by Judge Thelton E. Henderson on 04/16/07. (rbe, COURT STAFF) (Filed on 4/17/2007) (Entered: 04/17/2007)
76 STIPULATION AND ORDER EXTENDING THE STAY OF GENDER DISCRIMINATION CLAIMS by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 6/22/2007) (Entered: 06/22/2007)
77 STIPULATION and ORDER continuing the Case Management Conference to 9/24/2007 01:30 PM. Signed by Judge Thelton E. Henderson on 06/25/07. (rbe, COURT STAFF) (Filed on 6/25/2007) (Entered: 06/25/2007)
78 STATUS REPORT (Joint) of Parties by Denise Williams, Daisy Jaffe. (Dermody, Kelly) (Filed on 8/2/2007) (Entered: 08/02/2007)
79 STATUS REPORT (Joint) and Proposed Order with Exhibits by Denise Williams, Daisy Jaffe. (Dermody, Kelly) (Filed on 8/2/2007) (Entered: 08/02/2007)
80 STIPULATION AND ORDER GRANTING FILING OF SECOND AMENDED COMPLAINT re 79 filed by Daisy Jaffe, Denise Williams. Signed by Judge Thelton Henderson on 8/2/2007. (cgk, COURT STAFF) (Filed on 8/8/2007) (Entered: 08/08/2007)
81 AMENDED COMPLAINT SECOND AMENDED CLASS ACTION COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND DAMAGES FOR VIOLATIONS OF TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, 42 U.S.C. §§ 2000e, et seq., 42 U.S.C. § 1981, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV'T CODE §§ 12940, et seq., and the ELLIOT−LARSEN CIVIL RIGHTS ACT, M.C.L.A. §§ 37.2101, et seq. against Morgan Stanley DW, Inc.. Filed byDenise Williams, Daisy Jaffe. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Dermody, Kelly) (Filed on 8/17/2007) (Entered: 08/17/2007)
82 CLERK'S NOTICE: Further Case Management Conference continued to 10/15/2007 at 01:30 PM. (rbe, COURT STAFF) (Filed on 8/30/2007) (Entered: 08/30/2007)
83 STIPULATION AND [PROPOSED] ORDER TO CONTINUE THE CASE MANAGEMENT CONFERENCE AND FOR THE FILING OF THE MOTION FOR PRELIMINARY APPROVAL by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 10/2/2007) (Entered: 10/02/2007)
84 STIPULATION AND ORDER continuing the Case Management Conference to 11/26/2007 at 10:00 AM. The hearing on the Motion for Preliminary Approval of Settlement is set for 11/26/2007 at 10:00 AM in Courtroom 12, 19th Floor, San Francisco. Signed by Judge Thelton E. Henderson on 10/04/07. (rbe, COURT STAFF)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 20 of 37

10/15/2007 10/17/2007 10/22/2007
10/22/2007
10/23/2007 10/23/2007 10/24/2007 10/24/2007 10/29/2007 11/06/2007
11/06/2007 11/06/2007

(Filed on 10/5/2007) (Entered: 10/05/2007)
85 STIPULATION AND [PROPOSED] ORDER TO CONTINUE THE CASE MANAGEMENT CONFERENCE AND MOTION FOR PRELIMINARY APPROVAL by Morgan Stanley DW, Inc., Daisy Jaffe. (Turman, L. Julius) (Filed on 10/15/2007) (Entered: 10/15/2007)
86 STIPULATION AND ORDER continuing the CMC and motion hearing. Further Case Management Conference set for 11/26/2007 01:30 PM. Motion Hearing set for 11/26/2007 01:30 PM in Courtroom 12, 19th Floor, San Francisco. Signed by Judge Thelton E. Henderson on 10/16/07. (rbe, COURT STAFF) (Filed on 10/17/2007) (Entered: 10/17/2007)
87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule for the Final Settlement Approval Process filed by Margaret Benay Curtis−Bauer. Motion Hearing set for 11/26/2007 01:30 PM in Courtroom 12, 19th Floor, San Francisco. (Attachments: # 1 Proposed Order)(Dermody, Kelly) (Filed on 10/22/2007) (Entered: 10/22/2007)
88 MEMORANDUM in Support re 87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule for the Final Settlement Approval Process filed byMargaret Benay Curtis−Bauer. (Related document(s) 87 ) (Dermody, Kelly) (Filed on 10/22/2007) (Entered: 10/22/2007)
89 *** FILED IN ERROR. PLEASE SEE DOCKET # 90 . *** Joint MOTION for Leave to File Certain Documents Under Seal filed by Morgan Stanley DW, Inc.. (Attachments: # 1 Affidavit Declaration ISO of Motion# 2 Proposed Order Proposed Order ISO of Motion to File Under Seal)(Turman, L. Julius) (Filed on 10/23/2007) Modified on 10/24/2007 (ewn, COURT STAFF). (Entered: 10/23/2007)
RECEIVED DOCUMENT: [Faxed] Letter, dated 10/23/2007 from a group of current & former African−American Employees of Morgan Stanley to Judge Henderson. (tn, COURT STAFF) (Entered: 10/26/2007)
90 Joint MOTION for Leave to File Certain Documents Under Seal filed by Morgan Stanley DW, Inc.. (Attachments: # 1 Affidavit Declaration of Turman# 2 Proposed Order Proposed Order to File Certain Documents Under Seal)(Turman, L. Julius) (Filed on 10/24/2007) (Entered: 10/24/2007)
91 Letter from James M. Finberg. (Finberg, James) (Filed on 10/24/2007) (Entered: 10/24/2007)
92 ORDER Continuing Hearing. Signed by Judge Thelton E. Henderson on 10/29/07. (tehlc4, COURT STAFF) (Filed on 10/29/2007) (Entered: 10/29/2007)
93 APPLICATION of Attorney Linda D. Friedman for Leave to Appear in Pro Hac Vice −[Filing Fee: $210.00, Receipt Number 34611012271] Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. (tn, COURT STAFF) (Filed on 11/6/2007) (Entered: 11/07/2007)
RECEIVED ORDER: [Proposed] Order Granting re 93 Application of Linda D. Friedman for Leave to Appear in Pro Hac Vice Submitted by Putative Class Members & Objectors. (tn, COURT STAFF) (Entered: 11/07/2007)
94 APPLICATION of Attorney Mary Stowell for Leave to Appear in Pro Hac Vice −[Filing Fee: $210.00, Receipt Number 34611012271] Filed by Putative Class Members & Objectors. (tn, COURT STAFF) (Filed on 11/6/2007) (Entered: 11/07/2007)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 21 of 37

11/06/2007 11/09/2007
11/13/2007 11/13/2007 11/14/2007 11/15/2007 11/15/2007 11/19/2007
11/19/2007 11/19/2007 11/19/2007 11/19/2007 11/19/2007 11/19/2007

RECEIVED ORDER: [Proposed] Order Granting re 94 Application of Mary Stowell for Leave to Appear in Pro Hac Vice Submitted by Putative Class Members & Objectors. (tn, COURT STAFF) (Entered: 11/07/2007)
95 OBJECTIONS to re 87 Motion for Class Certicication & Preliminary Approval Filed by Putative Class Members Ronald Moore, Morris Allen, Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. (Attachments: #(1) Exhibit 1, #(2) Exhibit 2, #(3) Exhibit 3, #(4) Exhibit 4, #(5) Exhibit 5, #(6) Exhibit 6, #(7) Exhibit 7, #(8) Exhibit 8, #(9) Exhibit 9, #(10) Exhibit 10, #(11) Exhibit 11, #(12) Exhibit 12, \ #(13) Exhibit 13, #(14) Exhibit 14, #(15) Exhibit 15, #(16) Exhibit 16, #(17) Exhibit 17). (Nelson, Robert) (Filed on 11/9/2007) (Entered: 11/09/2007)
96 ORDER by Judge Thelton E. Henderson granting 94 Motion for Pro Hac Vice (tehlc4, COURT STAFF) (Filed on 11/13/2007) (Entered: 11/13/2007)
97 ORDER by Judge Thelton E. Henderson granting 93 Motion for Pro Hac Vice (tehlc4, COURT STAFF) (Filed on 11/13/2007) (Entered: 11/13/2007)
98 ORDER by Judge Thelton E. Henderson granting 90 Motion for Leave to File certain documents under seal. (cgk, COURT STAFF) (Filed on 11/14/2007) (Entered: 11/14/2007)
99 NOTICE by Morgan Stanley DW, Inc. and Plaintiffs of Filing Under Seal Pursuant to Court Order (Turman, L. Julius) (Filed on 11/15/2007) (Entered: 11/15/2007)
100 [FILED UNDER SEAL]...APPENDICES 1 & 2 to the Parties Proposed Settlement Agreement Filed by Plaintiffs Denise Williams & Margaret Benay Curtis−Bauer.(tn, COURT STAFF) (Filed on 11/15/2007) (Entered: 11/16/2007)
101 Reply Memorandum re 87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule "Reply Memorandum of Plaintiff Curtis−Bauer in Support of Motion for Preliminary Settlement Approval and Class Certification" filed byMargaret Benay Curtis−Bauer. (Finberg, James) (Filed on 11/19/2007) (Entered: 11/19/2007)
102 Declaration of James M. Finberg in Support of 101 Reply Memorandum,, filed byMargaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Related document(s) 101 ) (Finberg, James) (Filed on 11/19/2007) (Entered: 11/19/2007)
103 Declaration of Mediator Hunter R. Hughes, III in Support of 101 Reply Memorandum,, "Report of Mediator Hunter R. Hughes, III" filed byMargaret Benay Curtis−Bauer. (Related document(s) 101 ) (Finberg, James) (Filed on 11/19/2007) (Entered: 11/19/2007)
104 Declaration of Adam T. Klein in Support of 101 Reply Memorandum,, filed byMargaret Benay Curtis−Bauer. (Related document(s) 101 ) (Finberg, James) (Filed on 11/19/2007) (Entered: 11/19/2007)
105 Declaration of Heather H. Wong in Support of 101 Reply Memorandum,, filed byMargaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit A − J)(Related document(s) 101 ) (Finberg, James) (Filed on 11/19/2007) (Entered: 11/19/2007)
106 Defendant's RESPONSE to re 95 Objections of Putative Class Members to Motion for Class Certification & Preliminary Approval filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)
107 DECLARATION of Mark S. Dichter in Support of re 106 Defendant's Response to re 95 Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 22 of 37

11/19/2007 11/19/2007 11/19/2007 11/19/2007 11/19/2007 11/29/2007 11/29/2007
11/29/2007 12/03/2007 12/03/2007 12/03/2007
12/03/2007 12/05/2007 12/05/2007

108 DECLARATION of Irwin L. Goldstein in Support of re 106 Defendant's Reponse to re 95 Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)
109 *** FILED IN ERROR. PLEASE SEE DOCKET # 112 . *** Declaration of Kathleen K. Lundquist in Support of Defendant's Response to Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval filed byMorgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) Modified on 11/20/2007 (ewn, COURT STAFF). (Entered: 11/19/2007)
110 DECLARATION of Alexa B. Pappas in Support of re 106 Defendant's Response to re 95 Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)
111 STATUS REPORT of Mediator Hunter R. Hughes, III by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)
112 DECLARATION of Kathleen K. Lundquist in Support of re 106 Defendant's Response to re 95 Objections of Putative Class Members to Motion for Class Certification and Preliminary Approval filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 11/19/2007) (Entered: 11/19/2007)
113 NOTICE of Appearance by Robert S. Nelson (Nelson, Robert) (Filed on 11/29/2007) (Entered: 11/29/2007)
114 MOTION to Strike Portions of Defendant's Response to Objections & Attorney Declarations that Violate a Mediation Agreement, Rule 408 & California Law. Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. Motion Hearing set for 12/3/2007 at 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Attachments: #(1) Exhibit 1)(Nelson, Robert). (Filed on 11/29/2007) (Entered: 11/29/2007)
115 [PROPOSED] Order Granting re 114 Motion to Strike Portions of Defendant's Response to Objections & Attorney Declarations that Violate a Mediation Agreement, Rule 408 & California Law Filed by Putative Class Members Ronald Moore, et al.. (Nelson, Robert) (Filed on 11/29/2007) (Entered: 11/29/2007)
116 RESPONSE to re 114 Putative Class Members' Motion to Strike Portions of Defendant's Response to Objections & Attorney Declarations that Violate a Mediation Agreement, Rule 408 & California Law Filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 12/3/2007) (Entered: 12/03/2007)
117 Minute Entry: Motion Hearing held on 12/3/2007 before Judge Thelton E. Henderson. The motion for preliminary approval of settlement is taken under submission. The motion to strike is denied as moot. (Court Reporter: Jim Yeomans) (rbe, COURT STAFF) (Date Filed: 12/3/2007) (Entered: 12/03/2007)
124 APPLICATION of Attorney Linda D. Friedman for Leave to Appear in Pro Hac Vice − [Filing Fee: $210.00, Receipt Number 34611013065] Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr, Michael Barnett, Anthony Bell, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Mark Lewers, Brian Roy, Marion Tucker, Carlton McDowell, Patrick Carter, Justin Harris & Maurice Mabon. (tn, COURT STAFF) (Filed on 12/3/2007) (Entered: 12/07/2007)
RECEIVED ORDER: [Proposed] Order Granting re 124 Application for Admission of Suzanne Bish Pro Hac Vice Submitted by Putative Class Members & Objectors.(tn, COURT STAFF) (Entered: 12/07/2007)
118 ORDER granting motion for pro hac vice of Suzanne Bish. Signed by Judge Thelton E. Henderson on 12/05/07. (rbe, COURT STAFF) (Filed on 12/5/2007) (Entered: 12/05/2007)
119 MEMORANDUM of Points & Authorities in RESPONSE the Court's Oral Request for Authority Regarding the Admissibility of Declarations Filed by Putative Class

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 23 of 37

12/05/2007
12/05/2007
12/06/2007 12/07/2007 12/10/2007
12/10/2007 12/10/2007 12/11/2007 12/11/2007

Members & Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. (Attachments: *** #(1) Exhibit 1 FILED IN ERROR. PLEASE SEE DOCKET # 123 . *** , #(2) Exhibit 2). (Nelson, Robert) (Filed on 12/5/2007) Modified on 12/17/2007 (ewn, COURT STAFF). (Entered: 12/05/2007)
120 Declaration of MARGARET BENAY CURTIS−BAUER in Support of 87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule filed byMargaret Benay Curtis−Bauer. (Related document(s) 87 ) (Wong, Heather) (Filed on 12/5/2007) (Entered: 12/05/2007)
121 Declaration of JON BAUER in Support of 87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule filed byMargaret Benay Curtis−Bauer. (Related document(s) 87 ) (Wong, Heather) (Filed on 12/5/2007) (Entered: 12/05/2007)
122 EXHIBITS re 120 Declaration in Support,, Exhibit A to Declaration of Margaret Benay Curtis−Bauer in Support of Preliminary Settlement Approval filed byMargaret Benay Curtis−Bauer. (Related document(s) 120 ) (Wong, Heather) (Filed on 12/6/2007) (Entered: 12/06/2007)
123 EXHIBITS CORRECTION OF DOCKET #119 (Part 2) filed byRonald Moore. (Nelson, Robert) (Filed on 12/7/2007) (Entered: 12/07/2007)
125 NOTICE OF MOTION for Discovery Regarding Proposed Class & Settlement Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. Motion Hearing set for 1/21/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Nelson, Robert) (Filed on 12/10/2007) (Entered: 12/10/2007)
126 *** FILED IN ERROR. PLEASE SEE DOCKET # 128 . *** MPA ISO re 125 Motion for Discovery Regarding Proposed Class & Settlement Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., et al.. (Attachments: #(1) Exhibit 1, #(2) Exhibit 2, #(3) Exhibit 3, #(4) Exhibit 4, #(5) Exhibit 5, #(6) Exhibit 6). (Nelson, Robert) (Filed on 12/10/2007) Modified on 12/20/2007 (ewn, COURT STAFF). (Entered: 12/10/2007)
127 [PROPOSED] Order Granting re 125 Putative Class Members' Motion for Discovery Regarding Proposed Class Settlement Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., et al.. (Nelson, Robert) (Filed on 12/10/2007) (Entered: 12/10/2007)
128 *** FILED IN ERROR. PLEASE SEE DOCKET # 129 . *** [DOCKETED IN ERROR....CORRECTION OF DOCKET # 126 Filed by Ronald Moore. (Nelson, Robert) (Filed on 12/11/2007) Modified on 12/20/2007 (ewn, COURT STAFF). (Entered: 12/11/2007)
129 BRIEF (Points & Authorities) in Support of re 125 Motion for Discovery Regarding Proposed Class & Settlement Filed by Putative Class Members & Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker & Carlton McDowell. (Nelson, Robert) (Filed on 12/11/2007) (Entered: 12/11/2007)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 24 of 37

12/12/2007 12/12/2007 01/10/2008 01/10/2008 01/10/2008 01/10/2008 01/11/2008 01/11/2008 01/11/2008 01/14/2008
01/14/2008 01/14/2008 01/14/2008

130 ORDER Seeking Further Briefing and Submissions on Joint Motion for Preliminary Approval of Class Action Settlement and Provisional Certification of Settlement Class, and Vacating Hearing Date, Signed by Judge Thelton E. Henderson on 12/12/07. (tehlc4, COURT STAFF) (Filed on 12/12/2007) (Entered: 12/12/2007)
131 *** FILED IN ERROR. PLEASE SEE DOCKET # 259 . *** REPORTER'S TRANSCRIPT of Proceedings Held on 11/3/2007 before Judge Thelton E. Henderson − [Court Reporter: James Yeomans]. (tn, COURT STAFF) (Filed on 12/12/2007) Modified on 1/26/2009 (ewn, COURT STAFF). (Entered: 12/14/2007)
132 MOTION for Leave to File Declaration Under Seal for In Camera Review; Joint Administrative Motion and Motion of Parties to File Declaration Under Seal; Memorandum of Points and Authorities in Support of Motions filed by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 1/10/2008) (Entered: 01/10/2008)
133 Declaration of James M. Finberg in Support of 132 MOTION for Leave to File Declaration Under Seal for In Camera Review; Joint Administrative Motion and Motion of Parties to File Declaration Under Seal; Memorandum of Points and Authorities in Support of Motions filed byMargaret Benay Curtis−Bauer. (Related document(s) 132 ) (Finberg, James) (Filed on 1/10/2008) (Entered: 01/10/2008)
134 Declaration of Julius M. Turman in Support of 132 MOTION for Leave to File Declaration Under Seal for In Camera Review; Joint Administrative Motion and Motion of Parties to File Declaration Under Seal; Memorandum of Points and Authorities in Support of Motions filed byMargaret Benay Curtis−Bauer. (Related document(s) 132 ) (Finberg, James) (Filed on 1/10/2008) (Entered: 01/10/2008)
135 Proposed Order re 132 MOTION for Leave to File Declaration Under Seal for In Camera Review; Joint Administrative Motion and Motion of Parties to File Declaration Under Seal; Memorandum of Points and Authorities in Support of Motions by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 1/10/2008) (Entered: 01/10/2008)
136 CERTIFICATE OF SERVICE by Margaret Benay Curtis−Bauer (Finberg, James) (Filed on 1/11/2008) (Entered: 01/11/2008)
150 [FILED UNDER SEAL]...Declaration of Adam T. Klein in Support of re 87 MOTION for Order Granting Preliminary Approval of the Proposed Settlement Agreement Filed by Plaintiffs. (Related document(s) 87 ). (tn, COURT STAFF) (Filed on 1/11/2008) (Entered: 01/17/2008)
151 [FILED UNDER SEAL]...Supplemental Declaration of Margaret Benay Curtis−Bauer in Further Support of re 87 MOTION for Preliminary Settlementa ApprovalFiled by Plaintiffs. (Related document(s) 87 ). (tn, COURT STAFF) (Filed on 1/11/2008) (Entered: 01/17/2008)
137 Brief re 87 MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule MOTION for Settlement Joint Notice of Motion; Motion for: (1) Preliminary Approval of Class Action Settlement; (2) Provisional Certification of Settlement Class; (3) Approval and Distribution of Notice of Settlement; and (4) Approval of a Schedule filed byMargaret Benay Curtis−Bauer. (Related document(s) 87 ) (Dermody, Kelly) (Filed on 1/14/2008) (Entered: 01/14/2008)
138 Declaration of Margaret Benay Curtis−Bauer in Support of 137 Brief,, (Redacted) filed byMargaret Benay Curtis−Bauer. (Related document(s) 137 ) (Dermody, Kelly) (Filed on 1/14/2008) (Entered: 01/14/2008)
139 Declaration of Heather Wong in Support of 137 Brief,, filed byMargaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit Exhibit A to Heather Wong Declaration, # 2 Exhibit Exhibit B to Heather Wong Declaration, # 3 Exhibit Exhibit C to Heather Wong Declaration, # 4 Exhibit Exhibit D to Heather Wong Declaration)(Related document(s) 137 ) (Dermody, Kelly) (Filed on 1/14/2008) (Entered: 01/14/2008)
140 Proposed Order re 137 Brief,, Appendices 1 and 2 filed as Docket #100, by Margaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit 1 − Settlement Agreement, # 2 Exhibit

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 25 of 37

01/14/2008 01/14/2008
01/14/2008
01/14/2008 01/14/2008
01/15/2008 01/15/2008 01/15/2008 01/15/2008 01/24/2008 01/24/2008 01/24/2008 02/05/2008 02/05/2008 02/06/2008 02/07/2008

2 − Class Notice, # 3 Exhibit 3 − Claim Form)(Dermody, Kelly) (Filed on 1/14/2008) (Entered: 01/14/2008)
141 Supplemental MOTION for Settlement Approval and Provisional Certification of Settlement Class filed by Morgan Stanley DW, Inc.. (Eisen, Rebecca) (Filed on 1/14/2008) (Entered: 01/14/2008)
142 Declaration of Alexa B. Pappas in Support of 141 Supplemental MOTION for Settlement Approval and Provisional Certification of Settlement Class filed byMorgan Stanley DW, Inc.. (Related document(s) 141 ) (Eisen, Rebecca) (Filed on 1/14/2008) (Entered: 01/14/2008)
143 Declaration of Kathleen K. Lundquist in Support of 141 Supplemental MOTION for Settlement Approval and Provisional Certification of Settlement Class filed byMorgan Stanley DW, Inc.. (Related document(s) 141 ) (Eisen, Rebecca) (Filed on 1/14/2008) (Entered: 01/14/2008)
144 MOTION for Leave to File filed by Ronald Moore. (Nelson, Robert) (Filed on 1/14/2008) (Entered: 01/14/2008)
145 Brief Memo in support of motion for supp. filing [#144] filed byRonald Moore. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25)(Nelson, Robert) (Filed on 1/14/2008) (Entered: 01/14/2008)
146 EXHIBITS re 145 Brief,, Ex. 26 to Objectors' Supplemental Brief filed byRonald Moore. (Related document(s) 145 ) (Bish, Suzanne) (Filed on 1/15/2008) (Entered: 01/15/2008)
147 EXHIBITS re 145 Brief,, Ex 27 to Objectors' Supplemental Brief filed byRonald Moore. (Related document(s) 145 ) (Bish, Suzanne) (Filed on 1/15/2008) (Entered: 01/15/2008)
148 ORDER by Judge Thelton E. Henderson granting 132 Motion for Leave to File under seal. (rbe, COURT STAFF) (Filed on 1/15/2008) (Entered: 01/15/2008)
149 Proposed Order re 144 MOTION for Leave to File Supplemental Brief Instanter by Ronald Moore. (Bish, Suzanne) (Filed on 1/15/2008) (Entered: 01/15/2008)
152 MOTION Access to document under seal filed by Ronald Moore. (Nelson, Robert) (Filed on 1/24/2008) (Entered: 01/24/2008)
153 Declaration of Suzanne E. Bish in support of motion for access to document under seal 152 filed byRonald Moore. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Nelson, Robert) (Filed on 1/24/2008) (Entered: 01/24/2008)
154 Proposed Order on motion for access to document 152 by Ronald Moore. (Nelson, Robert) (Filed on 1/24/2008) (Entered: 01/24/2008)
155 STATUS REPORT by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 2/5/2008) (Entered: 02/05/2008)
156 Declaration of Mark S. Dichter in Support of 155 Status Report filed byMorgan Stanley DW, Inc.. (Related document(s) 155 ) (Turman, L. Julius) (Filed on 2/5/2008) (Entered: 02/05/2008)
157 Response re 155 Status Report byRonald Moore. (Bish, Suzanne) (Filed on 2/6/2008) (Entered: 02/06/2008)
158 ORDER by Judge Thelton E. Henderson Preliminarily Approving Settlement; 87 141 ; denying 144 Motion for Leave to File; denying 152 Motion For Access to Sealed Documents (Attachments: # 1 Exhibit 1: Settlement Agreement, # 2 Exhibit 2: Notice, # 3 Exhibit 3: Claim Form) (tehlc4, COURT STAFF) (Filed on 2/7/2008) (Entered: 02/07/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 26 of 37

02/11/2008 04/28/2008 04/28/2008 04/28/2008 04/28/2008 04/28/2008 05/02/2008 05/02/2008 05/02/2008 05/12/2008
05/12/2008
05/12/2008 05/12/2008

159 NOTICE by Denise Williams, Margaret Benay Curtis−Bauer, Daisy Jaffe re 158 Order on Motion for Settlement,,,, Order on Motion for Leave to File,, Order on Motion for Miscellaneous Relief, [NOTICE OF FILING OF REVISED SETTLEMENT AGREEMENT] (Wong, Heather) (Filed on 2/11/2008) (Entered: 02/11/2008)
160 NOTICE of Appearance by Suzanne Elaine Bish (Bish, Suzanne) (Filed on 4/28/2008) (Entered: 04/28/2008)
161 OBJECTIONS to Proposed Class Settlement by Objectors by Ronald Moore. (Attachments: # 1 Exhibit A, # 2 Exhibit A−1, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J)(Bish, Suzanne) (Filed on 4/28/2008) (Entered: 04/28/2008)
162 OBJECTIONS to Proposed Settlement of Moore Group and Opt−Out Class Members by Ronald Moore. (Bish, Suzanne) (Filed on 4/28/2008) (Entered: 04/28/2008)
163 STIPULATION AND [PROPOSED] ORDER RE CLASS MEMBERS INADVERTENTLY LEFT OFF CLASS LIST by Denise Williams, Margaret Benay Curtis−Bauer, Daisy Jaffe. (Attachments: # 1 Exhibit A)(Finberg, James) (Filed on 4/28/2008) (Entered: 04/28/2008)
164 ORDER granting 163 Stipulation Re: Class Members Inadvertently Left Off Class List filed by Daisy Jaffe, Margaret Benay Curtis−Bauer, Denise Williams. Signed by Judge Thelton E. Henderson on 4/28/2008. (mat, COURT STAFF) (Filed on 4/28/2008) (Entered: 04/29/2008)
165 MOTION for Leave to File individual complaint filed by Denise Williams. Motion Hearing set for 6/9/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Nelson, Robert) (Filed on 5/2/2008) (Entered: 05/02/2008)
166 Declaration of Linda D. Friedman in support of motion for leave to file [#165] filed byDenise Williams. (Nelson, Robert) (Filed on 5/2/2008) (Entered: 05/02/2008)
167 Proposed Order on motion for leave to file [#165] by Denise Williams. (Nelson, Robert) (Filed on 5/2/2008) (Entered: 05/02/2008)
168 MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agreement filed by Margaret Benay Curtis−Bauer. Motion Hearing set for 6/16/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
169 Brief re 168 MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree ment; Plaintiffs Separate Memorandum Of Points And Authorities In Support Of Joint Motion For: (1) Final Approval Of Class Action Settlement; (2) Certification Of Settlement Class; (3) Approval And (4) Distribution Of Settlement Funds filed byMargaret Benay Curtis−Bauer. (Related document(s) 168 ) (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
170 STIPULATION And [Proposed] Order Regarding Expansion Of Page Limitations For Final Settlement Approval Pleadings by Margaret Benay Curtis−Bauer. (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
171 NOTICE by Margaret Benay Curtis−Bauer Notice Of Application Of Plaintiff For Attorneys Fees And For Reimbursement Of Costs And Expenses (Attachments: # 1 Application Of Plaintiff For Attorneys Fees And For Reimbursement Of Costs And Expenses, # 2 Proposed Order Granting Application Of Plaintiff For Attorneys Fees And Reimbursement Of Costs And Expenses)(Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 27 of 37

05/12/2008
05/12/2008
05/12/2008 05/12/2008 05/12/2008 05/13/2008 05/14/2008 05/14/2008 05/16/2008 05/19/2008 05/19/2008 05/30/2008 05/30/2008 05/30/2008 06/02/2008

172 NOTICE by Margaret Benay Curtis−Bauer Notice Of Application Of Plaintiff For Approval Of Service Payment (Attachments: # 1 Application Of Plaintiff For Approval Of Service Payment, # 2 Proposed Order Granting Application Of Plaintiff For Approval Of Service Payment)(Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
173 Declaration of Kelly M. Dermody in Support of 168 MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree, 171 Notice (Other), Notice (Other), 172 Notice (Other), Notice (Other) filed byMargaret Benay Curtis−Bauer. (Related document(s) 168 , 171 , 172 ) (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
174 Declaration of Mark Patton With Respect To Final Settlement Approval filed byMargaret Benay Curtis−Bauer. (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
175 Declaration of Adam T. Klein in Support of 171 Notice (Other), Notice (Other) Plaintiffs Application For Attorneys Fees And Reimbursement Of Costs And Expenses filed byMargaret Benay Curtis−Bauer. (Related document(s) 171 ) (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
176 Declaration of James M. Finberg in Support of 171 Notice (Other), Notice (Other) Plaintiffs Application For Attorneys Fees And Reimbursement Of Costs And Expenses filed byMargaret Benay Curtis−Bauer. (Related document(s) 171 ) (Dermody, Kelly) (Filed on 5/12/2008) (Entered: 05/12/2008)
177 EXHIBITS re 173 Declaration in Support,, filed byMargaret Benay Curtis−Bauer. (Related document(s) 173 ) (Dermody, Kelly) (Filed on 5/13/2008) (Entered: 05/13/2008)
178 STIPULATION AND ORDER regarding expansion of page limitations. Signed by Judge Thelton E. Henderson on 05/13/08. (rbe, COURT STAFF) (Filed on 5/14/2008) (Entered: 05/14/2008)
179 STIPULATION AND [PROPOSED] ORDER FOR DISMISSAL OF PLAINTIFF'S INDIVIDUAL CLAIMS WITH PREJUDICE. (Turman, L. Julius) (Filed on 5/14/2008) (Entered: 05/14/2008)
180 STIPULATION AND ORDER for dismissal of plaintiff's individual claims with prejudice. Signed by Judge Thelton E. Henderson on 05/15/08. (rbe, COURT STAFF) (Filed on 5/16/2008) (Entered: 05/16/2008)
181 Memorandum in Opposition re 165 MOTION for Leave to File individual complaint filed byMorgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 5/19/2008) (Entered: 05/19/2008)
182 DECLARATION of Mark S. Dichter in Opposition to 165 MOTION for Leave to File individual complaint filed byMorgan Stanley DW, Inc.. (Related document(s) 165 ) (Turman, L. Julius) (Filed on 5/19/2008) (Entered: 05/19/2008)
183 Ex Parte Application to change hearing date filed by Denise Williams. Motion Hearing set for 6/16/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Nelson, Robert) (Filed on 5/30/2008) (Entered: 05/30/2008)
184 Declaration of Robert S. Nelson in support of application to change hearing date [#183] filed byDenise Williams. (Attachments: # 1 Exhibit 1, # 2 Errata 2)(Nelson, Robert) (Filed on 5/30/2008) (Entered: 05/30/2008)
185 Proposed Order on application to change hearing date [#183] by Denise Williams. (Nelson, Robert) (Filed on 5/30/2008) (Entered: 05/30/2008)
186 ORDER by Judge Thelton E. Henderson Denying 165 Motion for Leave to File; Denying 183 Ex Parte Application (tehlc4, COURT STAFF) (Filed on 6/2/2008) (Entered: 06/02/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 28 of 37

06/03/2008 06/03/2008 06/03/2008 06/03/2008 06/03/2008 06/03/2008 06/11/2008 06/13/2008 06/13/2008 06/13/2008 06/13/2008 06/13/2008
06/13/2008 06/16/2008 06/17/2008 06/27/2008

187 Reply Memorandum In Support of Final Settlement Approval filed byMargaret Benay Curtis−Bauer. (Alexander, Elizabeth) (Filed on 6/3/2008) (Entered: 06/03/2008)
188 Declaration of Trae Smith in Support of 187 Reply Memorandum To Motion For Final Settlement Approval filed byMargaret Benay Curtis−Bauer. (Related document(s) 187 ) (Alexander, Elizabeth) (Filed on 6/3/2008) (Entered: 06/03/2008)
189 Reply Memorandum In Response to the Objectors' Objections and In Support of Final Approval filed byMorgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 6/3/2008) (Entered: 06/03/2008)
190 Declaration of Mark S. Dichter in Support of 189 Reply Memorandum In Response to the Objectors' Objections and In Support of Final Approval filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Related document(s) 189 ) (Turman, L. Julius) (Filed on 6/3/2008) (Entered: 06/03/2008)
191 Declaration of Alexa B. Pappas in Support of 189 Reply Memorandum In Response to the Objectors' Objections and In Support of Final Approval filed byMorgan Stanley DW, Inc.. (Related document(s) 189 ) (Turman, L. Julius) (Filed on 6/3/2008) (Entered: 06/03/2008)
192 Declaration of Kathleen K. Lundquist in Support of 189 Reply Memorandum In Response to the Objectors' Objections and In Support of Final Approval filed byMorgan Stanley DW, Inc.. (Related document(s) 189 ) (Turman, L. Julius) (Filed on 6/3/2008) (Entered: 06/03/2008)
193 STATUS REPORT Plaintiff's Status Report Regarding Plaintiff's Application For Attorneys Fees And For Reimbursement Of Costs And Expenses And For Approval Of Service Payment by Margaret Benay Curtis−Bauer. (Dermody, Kelly) (Filed on 6/11/2008) (Entered: 06/11/2008)
194 MOTION to Transfer Case filed by Denise Williams. Motion Hearing set for 7/21/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Nelson, Robert) (Filed on 6/13/2008) (Entered: 06/13/2008)
195 Brief in support of motion to transfer 194 filed byDenise Williams. (Nelson, Robert) (Filed on 6/13/2008) (Entered: 06/13/2008)
196 Declaration of Linda D. Friedman in support of motion to transfer 194 filed byDenise Williams. (Nelson, Robert) (Filed on 6/13/2008) (Entered: 06/13/2008)
197 Proposed Order on motion to transfer 194 by Denise Williams. (Nelson, Robert) (Filed on 6/13/2008) (Entered: 06/13/2008)
198 Proposed Order re 168 MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree MOTION for Settlement Joint Notice Of Motion; Motion For Order: (1) Granting Final Approval To The Parties Class Action Settlement; (2) Finally Certifying The Proposed Settlement Classes; And (3) Approving And Entering The Proposed Settlement Agree by Margaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit 1)(Wong, Heather) (Filed on 6/13/2008) (Entered: 06/13/2008)
199 Proposed Order re 198 Proposed Order,, [PROPOSED] FINAL JUDGMENT by Morgan Stanley DW, Inc., Margaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit A)(Wong, Heather) (Filed on 6/13/2008) (Entered: 06/13/2008)
200 Minute Entry: Motion Hearing held on 6/16/2008 before Judge Thelton E. Henderson. The motion for final approval of settlement is taken under submission.(Court Reporter: Debra Pas) (rbe, COURT STAFF) (Date Filed: 6/16/2008) (Entered: 06/16/2008)
201 Letter from James M. Finberg. (Finberg, James) (Filed on 6/17/2008) (Entered: 06/17/2008)
202 Transcript of Proceedings held on 6−16−2008, before Judge Thelton Henderson. Court Reporter/Transcriber Debra L. Pas, Telephone number (415) 431−1477. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 29 of 37

06/27/2008 06/30/2008 06/30/2008 07/07/2008 07/07/2008 07/10/2008 07/16/2008 07/21/2008
07/21/2008
07/21/2008 07/21/2008 07/21/2008

Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 9/22/2008. (Pas, Debra) (Filed on 6/27/2008) (Entered: 06/27/2008)
203 Letter from Linda D. Friedman. (Bish, Suzanne) (Filed on 6/27/2008) (Entered: 06/27/2008)
204 OPPOSITION to re 194 to Denise Williams' Motion to Transfer Existing Pending Individual Claims Against Morgan Stanley to the Eastern District of Michigan Filed by Morgan Stanley DW, Inc.. (Turman, L. Julius) (Filed on 6/30/2008) (Entered: 06/30/2008)
205 Declaration of L. Julius M. Turman in Support of re 204 I>Defendant's Opposition to Denise Williams' Motion to Transfer Existing Pending Individual Claims Against Morgan Stanley to the Eastern District of Michigan Filed by Morgan Stanley DW, Inc.. (Related document(s) 204 ) (Turman, L. Julius) (Filed on 6/30/2008) (Entered: 06/30/2008)
206 ORDER by Judge Thelton E. Henderson Referring 168 Motion for Settlement to Magistrate Judge for Evidentiary Hearing and Report and Recommendation (tehlc4, COURT STAFF) (Filed on 7/7/2008) (Entered: 07/07/2008)
207 Reply Memorandum re 194 MOTION to Transfer Case Pending Individual Claims filed byDenise Williams. (Bish, Suzanne) (Filed on 7/7/2008) (Entered: 07/07/2008)
208 MOTION for Leave to File A Surreply to Plaintiff's Reply Brief in Support of Her Motion to Transfer Existing Pending Individual Claims Against Morgan Stanley to the Eastern District of Michigan filed by Morgan Stanley DW, Inc.. Motion Hearing set for 7/21/2008 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Turman, L. Julius) (Filed on 7/10/2008) (Entered: 07/10/2008)
209 ORDER by Judge Thelton E. Henderson Granting Motion to Transfer Claims, Vacating Hearing, and Denying 208 Motion for Leave to File (tehlc4, COURT STAFF) (Filed on 7/16/2008) (Entered: 07/16/2008)
210 MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] filed by Margaret Benay Curtis−Bauer. (Attachments: # 1 [PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER, FILED UNDER SEAL], # 2 [[PROPOSED] ORDER GRANTING PLAINTIFF LEAVE TO FILE MOTION FOR RECONSIDERAITON OF JULY 7, 2008 ORDER], # 3 [PROOF OF SERVICE BY FEDERAL EXPRESS TO MS. DENISE WILLIAMS ONLY C/O MS. WILLIAMS' COUNSEL])(Finberg, James) (Filed on 7/21/2008) (Entered: 07/21/2008)
211 MOTION to Seal Document 210 MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] filed by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 7/21/2008) (Entered: 07/21/2008)
212 Declaration of JAMES M. FINBERG [IN SUPPORT OF PLAINTIFF'S ADMINISTRATIVE MOTION TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW] filed byMargaret Benay Curtis−Bauer. (Related document(s) 211 ) (Finberg, James) (Filed on 7/21/2008) (Entered: 07/21/2008)
213 STIPULATION AND [PROPOSED] ORDER REGARDING LEAVE TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW] by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 7/21/2008) (Entered: 07/21/2008)
RECEIVED [PROPOSED] "SEALED" DOCUMENTS: (1) Notice of Motion & Motion for Leave to File Motion for Reconsideration of July 7, 2008 Order, (2)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 30 of 37

07/21/2008 07/21/2008 07/21/2008 07/21/2008 07/21/2008 07/22/2008
07/23/2008 07/23/2008
07/23/2008 07/23/2008 07/23/2008 07/25/2008

Memorandum of Points & Authorities in Support of Motion for Leave to File Motion for Reconsideration of July 7, 2008 Order, (3) [Redacted] Memorandum of Points & Authorities in Support of Motion for Leave to File Motion for Reconsideration of July 7, 2008 Order, (4) [Redacted] Notice of Motion & Motion for Reconsideraetion & Memorandum of Points & Authorities in Support ThereofSubmitted by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Entered: 07/23/2008)
215 CERTIFICATE OF SERVICE Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe of Lodged Sealed Documents. (tn, COURT STAFF) (Filed on 7/21/2008) (Entered: 07/23/2008)
221 [FILED UNDER SEAL]...NOTICE OF MOTION & MOTION for Leave to File Motion for Reconsideration of July 7, 2008 Order Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/21/2008) (Entered: 07/29/2008)
222 [FILED UNDER SEAL]...[REDACTED] MEMORANDUM of Points & Authorities in Support of re 221 MOTION for Leave to File Motion for Reconsideration of July 7, 2008 Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (Related document(s) 221 ). (tn, COURT STAFF) (Filed on 7/21/2008) (Entered: 07/29/2008)
223 [FILED UNDER SEAL]...MEMORANDUM of Points & Authorities in Support of re 221 MOTION for Leave to File Motion for Reconsideration of July 7, 2008 Order Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (Related document(s) 221 ). (tn, COURT STAFF) (Filed on 7/21/2008) (Entered: 07/29/2008)
224 [FILED UNDER SEAL]...NOTICE OF MOTION & MOTION for Reconsideration & MEMORANDUM of Points & Authorities in Support Thereof Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/21/2008) (Entered: 07/29/2008)
214 AMENDED DOCUMENT by Margaret Benay Curtis−Bauer. Amendment to 210 MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] MOTION for Leave to File [PLAINTIFF'S NOTICE OF MOTION; MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER] Amended Proof of Service. (Finberg, James) (Filed on 7/22/2008) (Entered: 07/22/2008)
216 NOTICE of Amended Lodgment Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/23/2008) (Entered: 07/23/2008)
RECEIVED [PROPOSED] "SEALED" DOCUMENTS: (1) [Redacted] AMENDED Notice of Motion & Motion for Reconsideration & Memorandum of Points & Authorities in Support Thereof, and (2) AMENDED Notice of Motion & Motion for Leave to File Motion for Reconsideration of July 7, 2008 Order Submitted by PlaintiffsMargaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Entered: 07/23/2008)
217 CERTIFICATE OF SERVICE Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe of re 216 Notice of Amended Lodgment & Lodged [Proposed] Amended Sealed Documents. (tn, COURT STAFF) (Filed on 7/23/2008) (Entered: 07/23/2008)
226 [FILED UNDER SEAL]...[REDACTED] AMENDED NOTICE OF MOTION & MOTION for Reconsideration & Memorandum of Points & Authorities in Support Thereof Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/23/2008) (Entered: 07/29/2008)
225 [FILED UNDER SEAL]...AMENDED NOTICE OF MOTION & MOTION for Leave to File Motion for Reconsideration of July 7, 2008 Order Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/23/2008) (Entered: 07/29/2008)
218 ORDER by Judge Thelton E. Henderson granting 211 Motion to Seal Document. (rbe, COURT STAFF) (Filed on 7/25/2008) (Entered: 07/25/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 31 of 37

07/28/2008 07/29/2008 07/31/2008 08/08/2008 08/08/2008 08/11/2008 08/14/2008
08/14/2008
08/14/2008
08/14/2008
08/14/2008 08/14/2008 08/15/2008 08/18/2008 08/18/2008 08/20/2008 08/20/2008

219 Letter from L. Friedman. (Bish, Suzanne) (Filed on 7/28/2008) (Entered: 07/28/2008)
220 ORDER by Judge Thelton E. Henderson granting 210 Motion for Leave to File Motion for Reconsideration of July 7, 2008 Order (tehlc4, COURT STAFF) (Filed on 7/29/2008) (Entered: 07/29/2008)
227 CLERK'S LETTER Transferring Plaintiff Denise Williams' Existing Pending Claims against Morgan Stanley to the Eastern District of Michigan. (tn, COURT STAFF) (Filed on 7/31/2008) (Entered: 07/31/2008)
228 STIPULATION and [proposed] order enlarging time by Denise Williams. (Nelson, Robert) (Filed on 8/8/2008) (Entered: 08/08/2008)
229 Declaration of Suzanne E. Bish ISO Stipulation and [Proposed] Order 228 filed byDenise Williams. (Nelson, Robert) (Filed on 8/8/2008) (Entered: 08/08/2008)
230 STIPULATION AND ORDER changing time for opposition to motion for reconsideration. Signed by Judge Thelton E. Henderson on 08/08/08. (rbe, COURT STAFF) (Filed on 8/11/2008) (Entered: 08/11/2008)
231 NOTICE of Administrative Motion Pursuant to Local Rule 7−11 Filed by Plaintiffs Denise Williams, et al. For Leave To File Opposition & Supporting Documents Under Seal In Camera Review & MEMORANDUM of Points & Authorities in Support Thereof (Bish, Suzanne) (Filed on 8/14/2008) (Entered: 08/14/2008)
232 Declaration of Suzanne E. Bish IN SUPPORT OF re 231 ADMINISTRATIVE MOTION TO FILE OPPOSITION AND SUPPORTING DOCUMENTS UNDER SEAL FOR IN CAMERA REVIEW filed byDenise Williams. (Bish, Suzanne) (Filed on 8/14/2008) (Entered: 08/14/2008)
233 CERTIFICATE OF SERVICE by Denise Williams VIA HAND DELIVERY TO PLAINTIFF MARGARET BENAY CURTIS−BAUER ONLY (THROUGH COUNSEL−OF−RECORD JAMES M. FINBERG) (Bish, Suzanne) (Filed on 8/14/2008) (Entered: 08/14/2008)
234 Proposed Order GRANTING re 231 DENISE WILLIAMS ADMINISTRATIVE MOTION TO FILE OPPOSITION AND SUPPORTING DOCUMENTS UNDER SEAL FOR IN CAMERA REVIEW by Denise Williams. (Bish, Suzanne) (Filed on 8/14/2008) (Entered: 08/14/2008)
235 Memorandum in Opposition to re 226 Plaintiff's Motion for Reconsideration of July 7, 2008 Order Filed by Ronald Moore. (Bish, Suzanne) (Filed on 8/14/2008) (Entered: 08/14/2008)
RECEIVED Proposed 'SEALED' DOCUMENT: Denise Williams' Opposition to Plaintiff's Motion to Reconsider the Court's July 7, 2008 Order Submitted by PlaintiffDenise Williams. (tn, COURT STAFF) (Entered: 08/15/2008)
236 Declaration of BISH in Support of 234 Proposed Order, 232 Declaration in Support, 231 Notice (Other) CORRECTED filed byDenise Williams. (Related document(s) 234 , 232 , 231 ) (Bish, Suzanne) (Filed on 8/15/2008) (Entered: 08/15/2008)
237 ORDER GRANTING Denise Williams' motion to file documents under seal for in camera review. Signed by Judge Thelton E. Henderson on 08/18/08. (rbe, COURT STAFF) (Filed on 8/18/2008) (Entered: 08/18/2008)
243 [FILED UNDER SEAL]..MEMORANDUM in Opposition to re 226 MOTION for Reconsideration Filed by Plaintiff Denise Williams. (Related document(s) 226 ).(tn, COURT STAFF) (Filed on 8/18/2008) (Entered: 08/20/2008)
238 CERTIFICATE OF SERVICE by Margaret Benay Curtis−Bauer BY FEDERAL EXPRESS TO MS. DENISE WILLIAMS ONLY C/O MS. WILLIAMS' COUNSEL (Finberg, James) (Filed on 8/20/2008) (Entered: 08/20/2008)
239 MOTION to Seal Document 238 Certificate of Service [PLAINTIFFS NOTICE OF ADMINISTRATIVE MOTION; ADMINISTRATIVE MOTION TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION] filed by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 8/20/2008) (Entered: 08/20/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 32 of 37

08/20/2008
08/20/2008 08/20/2008 08/20/2008
08/22/2008 08/22/2008 08/22/2008 10/22/2008 10/22/2008 10/22/2008 10/22/2008
11/03/2008 11/04/2008

240 Declaration in Support of 239 MOTION to Seal Document 238 Certificate of Service [PLAINTIFFS NOTICE OF ADMINISTRATIVE MOTION; ADMINISTRATIVE MOTION TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION] MOTION to Seal Document 238 Certificate of Service [PLAINTIFFS NOTICE OF ADMINISTRATIVE MOTION; ADMINISTRATIVE MOTION TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION] [DECLARATION OF JAMES M. FINBERG IN SUPPORT OF PLAINTIFFS ADMINISTRATIVE MOTION TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW] filed byMargaret Benay Curtis−Bauer. (Related document(s) 239 ) (Finberg, James) (Filed on 8/20/2008) (Entered: 08/20/2008)
241 STIPULATION AND [PROPOSED] ORDER REGARDING LEAVE TO FILE MATERIALS UNDER SEAL FOR IN CAMERA REVIEW by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 8/20/2008) (Entered: 08/20/2008)
242 Brief [PLAINTIFF'S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF JULY 7, 2008 ORDER (IN RESPONSE TO OPPOSITION FILED BY OBJECTORS) filed byMargaret Benay Curtis−Bauer. (Finberg, James) (Filed on 8/20/2008) (Entered: 08/20/2008)
RECEIVED Proposed "Sealed" DOCUMENTS: (1) Plaintiffs' REPLY BRIEF in Support of Motion for Reconsideration of July 7, 2008 Order (in response to opposition filed by Denise Williams) & (2) DECLARATION of Daniel M. Hutchinson in Support of Plaintiffs' Reply Briefs in Support of Motion for Reconsideration Submitted by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe. (tn, COURT STAFF) (Entered: 08/20/2008)
244 STIPULATION and ORDER by Judge Thelton E. Henderson granting 239 Motion to Seal Document. (rbe, COURT STAFF) (Filed on 8/22/2008) (Entered: 08/22/2008)
245 [FILED UNDER SEAL]..REPLY BRIEF in Support of re 226 MOTION for Reconsideration of July 7, 2008 Order (in response to opposition filed by Denise Williams) Filed by Plaintiffs Margaret Benay Curtis−Bauer & Daisy Jaffe.(tn, COURT STAFF) (Filed on 8/22/2008) (Entered: 08/28/2008)
246 [FILED UNDER SEAL]..DECLARATION of Daniel M. Hutchinson in Support of re 245 Reply Brief in Support of Motion for Reconsideration Filed by PlaintiffsMargaret Benay Curtis−Bauer & Daisy Jaffe. (Related document(s) 245 ).(tn, COURT STAFF) (Filed on 8/22/2008) (Entered: 08/28/2008)
247 ORDER GRANTING application for approval of service payment. Signed by Judge Thelton E. Henderson on 10/21/08. (rbe, COURT STAFF) (Filed on 10/22/2008) (Entered: 10/22/2008)
248 ORDER GRANTING application for attorneys fees and reimbursement of costs and expenses. Signed by Judge Thelton E. Henderson on 10/21/08. (rbe, COURT STAFF) (Filed on 10/22/2008) (Entered: 10/22/2008)
249 FINAL JUDGMENT. Signed by Judge Thelton E. Henderson on 10/21/08. (rbe, COURT STAFF) (Filed on 10/22/2008) (Entered: 10/22/2008)
250 ORDER GRANTING RECONSIDERATION OF COURT'S JULY 7, 2008 ORDER CONFIRMING FINAL CLASS CERTIFICATION AND GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT. Signed by Judge Thelton E. Henderson on 10/22/08. (Attachments: # 1 Exhibit Revised Settlement Agreement, # 2 Exhibit Exhibits to Revised Settlement Agreement)(tehlc4, COURT STAFF) (Filed on 10/22/2008) (Entered: 10/22/2008)
251 STIPULATION AND [PROPOSED] ORDER REGARDING VINCENT GRIFFIN by Margaret Benay Curtis−Bauer. (Wong, Heather) (Filed on 11/3/2008) (Entered: 11/03/2008)
252 STIPULATION AND ORDER re: Vincent Griffin. Signed by Judge Thelton E. Henderson on 11/04/08. (rbe, COURT STAFF) (Filed on 11/4/2008) (Entered: 11/04/2008)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 33 of 37

11/21/2008
11/21/2008 11/21/2008 11/21/2008 11/24/2008 12/01/2008 12/05/2008 12/08/2008 01/23/2009

253 NOTICE OF APPEAL to the United States Court of Appeals for the Ninth Circuit as to the Court's re 250 Order, re 249 Final Judgment & re 158 Order Filed by Plaintiff Denise Williams & Objectors Ronald Moore, Anthony Bell, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Mark Lewers, Marion Tucker, Carlton McDowell, Michael Barnett, Jonathan Glover, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert Stalling, Lanta Evans−Mott, Sarah Nyamuswa & Theron Cyrus − [Filing Fee:$455.00, Receipt Number 34611025793]. (tn, COURT STAFF) (Filed on 11/21/2008) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 1 Order Filed 2/7/2008 (Doc. #158)) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 2 Final Judgment Filed 10/22/2008 (Doc. #249)) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 3 Order Filed 10/22/2008 (Doc. #250)) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 4 Settlement Agreement (Doc. #250−2)) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 5 Exhibit A − (Doc. #250−3)) (tn, COURT STAFF). (Additional attachment(s) added on 11/24/2008: # 6 Civil Appeals Docketing Statement) (tn, COURT STAFF). (Entered: 11/24/2008)
254 REPRESENTATION STATEMENT re 253 Notice of Appeal Filed by Plaintiff Denise Williams & Objectors Jonathan Glover, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Michael Barnett, Ronald Moore, Anthony Bell, Mary Evans, Janice Grant, Martin Dixon, Ernest Dorsey, Mark Lewers, Marion Tucker, Hubert Stalling, Lanta Evans−Mott, Carlton McDowell, Sarah Nyamuswa & Theron Cyrus. (tn, COURT STAFF) (Filed on 11/21/2008) (Entered: 11/24/2008)
CIVIL APPEALS Docketing Statement re 253 Notice of Appeal Submitted by Plaintiff Denise Williams & Objectors Jonathan Glover, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Michael Barnett, Ronald Moore, Anthony Bell, Mary Evans, Janice Grant, Martin Dixon, Ernest Dorsey, Mark Lewers, Marion Tucker, Hubert Stalling, Lanta Evans−Mott, Carlton McDowell, Sarah Nyamuswa & Theron Cyrus. (tn, COURT STAFF) (Entered: 11/24/2008)
255 PROOF OF SERVICE Filed by Plaintiff Denise Williams & Objectors Ronald Moore, Michael Barnett, Anthony Bell, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Mark Lewers, Marion Tucker, Carlton McDowell, Jonathan Glover, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert Stalling, Lanta Evans−Mott, Sarah Nyamuswa & Theron Cyrus of re 254 Representation Statement, re 253 Notice of Appeal & Civil Appeals Docketing Statement. (tn, COURT STAFF) (Filed on 11/21/2008) (Entered: 11/24/2008)
Transmission of Notice of Appeal & Docket Sheet to United States Court of Appeals for the Ninth Circuit re 253 Notice of Appeal. (tn, COURT STAFF) (Entered: 11/24/2008)
256 United States Court of Appeals CASE NUMBER 08−17599 for re 253 Notice of Appeal Filed by Michael Barnett, Marshell Miller, Ernest Dorsey, Hubert Stalling, Marilyn White, Janice Grant, Marion Tucker, Peter Meme, Ronald Moore, Martin Dixon, Latrissa Gordon, Sarah Nyamuswa, Jerome Senegal, Mark Lewers, Carlton McDowell, Theron Cyrus, Lanta Evans−Mott, Anthony Bell, Jonathan Glover, Denise Williams & Mary Evans. (tn, COURT STAFF) (Filed on 12/1/2008) (Additional attachment(s) added on 12/4/2008: # 1 USCA Case Number) (tn, COURT STAFF). (Entered: 12/02/2008)
257 SUPPLEMENTAL Certificate of Interested Parties Filed by Defendant Morgan Stanley & Co. Incorporated. (Turman, L. Julius) (Filed on 12/5/2008) (Entered: 12/05/2008)
258 TRANSCRIPT DESIGNATION & ORDERING FORM for Proceedings Held on 12/3/2007 − C/R: Jim Yeomans & 6/16/2008 − C/R: Debra Pas before Judge Thelton E. Henderson.(tn, COURT STAFF) (Filed on 12/8/2008) (Entered: 12/09/2008)
259 Amended Transcript of Proceedings held on 12/03/07, before Judge Thelton E. Henderson. Court Reporter/Transcriber James Yeomans, Telephone number (415) 863−5179. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 34 of 37

04/09/2009 06/26/2009 06/26/2009 01/14/2010
05/18/2010 05/24/2010 07/27/2010
08/17/2010 08/17/2010 08/19/2010 09/02/2010 05/11/2011
05/23/2011 08/11/2011

Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 4/20/2009. (jjy, COURT STAFF) (Filed on 1/23/2009) (Entered: 01/23/2009)
260 CERTIFICATE OF RECORD Mailed to United States Court of Appeals for the Ninth Circuit re 253 Notice of Appeal. (tn, COURT STAFF) (Filed on 4/9/2009) (Entered: 04/09/2009)
261 *** FILED IN ERROR. PLEASE SEE DOCKET # 262 . *** Certificate of Interested Entities by Morgan Stanley DW, Inc. (Turman, L. Julius) (Filed on 6/26/2009) Modified on 6/29/2009 (ewn, COURT STAFF). (Entered: 06/26/2009)
262 Certificate of Interested Entities by Morgan Stanley DW, Inc. CORRECTION OF DOCKET # 261 (Turman, L. Julius) (Filed on 6/26/2009) (Entered: 06/26/2009)
263 United States Court of Appeals for the Ninth Circuit ORDER as to re 253 Notice of Appeal filed by Michael Barnett, Marshell Miller, Ernest Dorsey, Hubert Stalling, Marilyn White, Janice Grant, Marion Tucker, Peter Meme, Ronald Moore, Martin Dixon, Latrissa Gordon, Sarah Nyamuswa, Jerome Senegal, Mark Lewers, Carlton McDowell, Theron Cyrus, Lanta Evans−Mott, Anthony Bell, Jonathan Glover, Denise Williams & Mary Evans. (tn, COURT STAFF) (Filed on 1/14/2010) (Entered: 01/14/2010)
264 Certified & Transmitted Record on Appeal to United States Court of Appeals for the Ninth Circuit re 253 Notice of Appeal. (tn, COURT STAFF) (Filed on 5/18/2010) (Entered: 05/18/2010)
265 RECEIPT of Appeal Record re 253 Notice of Appeal. (tn, COURT STAFF) (Filed on 5/24/2010) (Entered: 05/25/2010)
266 United States Court of Appeals for the Ninth Circuit ORDER as to re 253 Notice of Appeal filed by Michael Barnett, Marshell Miller, Ernest Dorsey, Hubert Stalling, Marilyn White, Janice Grant, Marion Tucker, Peter Meme, Ronald Moore, Martin Dixon, Latrissa Gordon, Sarah Nyamuswa, Jerome Senegal, Mark Lewers, Carlton McDowell, Theron Cyrus, Lanta Evans−Mott, Anthony Bell, Jonathan Glover, Denise Williams, Mary Evans. (tn, COURT STAFF) (Filed on 7/27/2010) (Entered: 07/27/2010)
267 JOINT NOTICE OF MOTION & MOTION to Rescind Opt Out & Permit Certain Objectors and Opt−Outs to File Claims Forms filed by Morgan Stanley DW, Inc.. Motion Hearing set for 9/27/2010 10:00 AM in Courtroom 12, 19th Floor, San Francisco. (Turman, L. Julius) (Filed on 8/17/2010) (Entered: 08/17/2010)
268 Declaration of Linda D. Friedman in Support of re 267 Joint MOTION to Rescind Opt Out and Permit Certain Objectors and Opt−Outs to File Claims Forms filed by Morgan Stanley DW, Inc.. (Related document(s) 267 ) (Turman, L. Julius) (Filed on 8/17/2010) (Entered: 08/17/2010)
269 ORDER Signed by Judge Thelton E. Henderson Granting re 267 Joint Motion to rescind opt−outs and permit certain objectors and opt−outs to file claims forms. (tehlc3, COURT STAFF) (Filed on 8/19/2010) (Entered: 08/19/2010)
270 Appeal Record Returned re: 253 Notice of Appeal. (tn, COURT STAFF) (Filed on 9/2/2010) (Entered: 09/03/2010)
271 ADMINISTRATIVE MOTION to Consider Whether Cases Should Be Related and Attached Declaration filed by Jesse Blount, III, Steve Parker & Tiffany Peres.. (tn, COURT STAFF) (Filed on 5/11/2011) (tn, COURT STAFF). (Additional attachment(s) added on 5/17/2011: # 1 Proposed Order) (tn, COURT STAFF). (Additional attachment(s) added on 5/17/2011: # 2 Proof of Service) (tn, COURT STAFF). (Entered: 05/17/2011)
272 ORDER Signed by Magistrate Judge Maria−Elena James withdrawing re 271 Motion to Relate Case. (cdnS, COURT STAFF) (Filed on 5/23/2011) (Entered: 05/23/2011)
273 Renewed Administrative MOTION to Consider Whether Cases Should Be Related, Declaration of Peter Haberfeld, and Copy of Complaint. Filed by Jesse Blount III,

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 35 of 37

08/15/2011 08/15/2011 08/15/2011 08/15/2011 08/18/2011 08/23/2011
08/23/2011 08/25/2011 09/07/2011 05/10/2012
05/10/2012 05/15/2012

Steve Parker & Tiffany Perez. (cdnS, COURT STAFF) (Filed on 8/11/2011) (Additional attachment(s) added on 8/11/2011: # 1 Proposed Order) (cdnS, COURT STAFF). (Entered: 08/11/2011)
274 Defendants Morgan Stanley Smith Barney LLC's and Jim Nielsen's Response/Opposition to re 273 Plaintiffs' Renewed Administrative Motion to Consider Whether Cases Should Be Related filed by Morgan Stanley DW, Inc.. (Smith, Philip) (Filed on 8/15/2011) (Entered: 08/15/2011)
275 Declaration of L. Julius M. Turman in Support of re 274 Opposition/Response to re 273 Renewed Administrative Motion to Consider Whether Cases Should Be Related filed by Morgan Stanley DW, Inc.. (Related document(s) 274 ) (Smith, Philip) (Filed on 8/15/2011) (Entered: 08/15/2011)
276 [Proposed] Order Denying re 273 Plaintiffs' Renewed Administrative Motion to Consider Whether Cases Should Be Related filed by Morgan Stanley DW, Inc.. (Smith, Philip) (Filed on 8/15/2011) (Entered: 08/15/2011)
277 CERTIFICATE OF SERVICE filed by Morgan Stanley DW, Inc. of re 275 Declaration in Support, re 276 Proposed Order, re 274 Opposition/Response to Renewed Motion. (Smith, Philip) (Filed on 8/15/2011) (Entered: 08/15/2011)
278 Order Signed by The Honorable Thelton E. Henderson denying re 273 Plaintiffs' Renewed Administrative Motion to Consider Whether Cases Should be Related. Cases C06−3903 TEH and C11−2227 MEJ are found not to be Related.(tmi, COURT STAFF) (Filed on (Entered: 08/18/2011)
279 *** FILED IN ERROR. REFER TO DOCUMENT 281 . *** Joint STIPULATION and [PROPOSED] ORDER APPROVING MODIFIED SETTLEMENT AGREEMENT filed by Morgan Stanley DW, Inc., Daisy Jaffe, Denise Williams, Margaret Benay Curtis−Bauer. (Attachments: #(1) Exhibit Modified Settlement Agreement (FINAL), #(2) Exhibit Modified and Approved Settlement Agreements (Compare Version))(Turman, L. Julius) (Filed on 8/23/2011) Modified on 8/25/2011 (feriab, COURT STAFF). (Entered: 08/23/2011)
280 Declaration of L. Julius M. Turman in Support of re 279 Joint Stipulation and [Proposed] Order APPROVING MODIFIED SETTLEMENT AGREEMENT filed by Morgan Stanley DW, Inc.. (Related document(s) 279 ) (Turman, L. Julius) (Filed on 8/23/2011) (Entered: 08/23/2011)
281 Joint Stipulation and [Proposed] Order Approving Modified Settlement Agreement filed by Morgan Stanley DW, Inc., Daisy Jaffe, Denise Williams, Margaret Benay Curtis−Bauer. (Attachments: #(1) Exhibit 1 − Corrected Modified Settlement Agreement (with signature pages), #(2) Exhibit 2 − Redline Comparison)(Turman, L. Julius) (Filed on 8/25/2011) (Entered: 08/25/2011)
282 JOINT STIPULATION AND ORDER Approving Modified Settlement Agreement. Signed by Judge Thelton E. Henderson on 09/07/2011. (tmi, COURT STAFF) (Filed on 9/7/2011) (Entered: 09/07/2011)
283 Notice of Administrative Motion; Administrative Motion to File Report & Recommendation of Special Master Thomas A. Warren UNDER SEAL In Camera Review; Memorandum in Support Thereof −TO FILE REPORT AND RECOMMENDATION OF SPECIAL MASTER THOMAS A. WARREN− filed by Margaret Benay Curtis−Bauer. (Attachments: #(1) Declaration, #(2) Proposed Order)(Finberg, James) (Filed on 5/10/2012) (Entered: 05/10/2012)
284 [Proposed] Order APPROVING REPORT AND RECOMMENDATION OF SPECIAL MASTER AND AUTHORIZING DISTRIBUTION OF SETTLEMENT FUND filed by Margaret Benay Curtis−Bauer. (Finberg, James) (Filed on 5/10/2012) (Entered: 05/10/2012)
285 Order Signed by The Honorable Thelton E. Henderson granting re 283 Administrative Motion to File Report & Recommendation of Special Master Thomas A. Warren and the Exhibits UNDER SEAL. (tmi, COURT STAFF) (Filed on 5/15/2012) (Entered: 05/15/2012)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 36 of 37

05/15/2012
05/17/2012 10/05/2012 10/11/2012 11/05/2012
11/05/2012
11/05/2012 11/19/2012 11/19/2012 11/26/2012 12/06/2012 01/02/2013 02/19/2013 02/20/2013 09/29/2015

286 DOCUMENT E−FILED UNDER SEAL re 285 Order on Administrative Motion to File Under Seal REPORT AND RECOMMENDATION OF SPECIAL MASTER by Margaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit Exhibit A−Asencio Release, # 2 Exhibit Exhibit B−Claim Form, # 3 Exhibit Exhibit C−Award Info, # 4 Exhibit Exhibit D−Lien Letter, # 5 Exhibit Exhibit E−J Grant)(Finberg, James) (Filed on 5/15/2012) (Entered: 05/15/2012)
287 ORDER APPROVING REPORT AND RECOMMENDATION OF SPECIAL MASTER AND AUTHORIZING DISTRIBUTION OF SETTLEMENT FUND. Signed by Judge Thelton E. Henderson on 5/17/2012. (tehlc2, COURT STAFF) (Filed on 5/17/2012) (Entered: 05/17/2012)
288 Report and Recommendation of Special Master Thomas A. Warren re Claim of Janice Grant filed by Margaret Benay Curtis−Bauer. (Attachments: # 1 Exhibit A Part 1, # 2 Exhibit A Part 2)(Finberg, James) (Filed on 10/5/2012) (Entered: 10/05/2012)
289 ORDER re. Special Master's October 2, 2012 Report & Recommendation.Signed by Judge Thelton E. Henderson on 10/11/2012. (tehlc2, COURT STAFF) (Filed on 10/11/2012) (Entered: 10/11/2012)
290 NOTICE OF MOTION & MOTION of Proposed Class Member Arthur Villanueva for Leave to File Late Claim Based on Delayed Postal Processing of Claim Form; Memorandum of Points & Authorities filed by Arthur Villanueva. (Attachments: # 1 Certificate/Proof of Service, # 2 Declaration, # 3 Declaration, # 4 Declaration, # 5 Proposed Order, # 6 Certificate/Proof of Service)(Baker, Brad) (Filed on 11/5/2012) (Entered: 11/05/2012)
Set/Reset Deadlines as to 290 MOTION for Leave to File Late Claim Based on Delayed Postal Processing of Claim Form. Responses due by 11/19/2012. Replies due by 11/26/2012. Motion Hearing set for 12/17/2012 10:00 AM in Courtroom 2, 17th Floor, San Francisco before Hon. Thelton E. Henderson. (tmi, COURT STAFF) (Filed on 11/5/2012) (Entered: 11/05/2012)
291 ORDER APPROVING AND ADOPTING Special Master's re 288 October 2, 2012 Report & Recommendation. Signed by Judge Thelton E. Henderson on 11/05/2012. (tehlc2, COURT STAFF) (Filed on 11/5/2012) (Entered: 11/05/2012)
292 RESPONSE to (re 290 MOTION for Leave to File Late Claim Based on Delayed Postal Processing of Claim Form) filed by Margaret Benay Curtis−Bauer. (Attachments: #(1) Declaration of Loree Kovach)(Finberg, James) (Filed on 11/19/2012) (Entered: 11/19/2012)
293 PROOF OF SERVICE filed by Margaret Benay Curtis−Bauer of re 292 Opposition/Response to Motion, of Proof of Service (Finberg, James) (Filed on 11/19/2012) (Entered: 11/19/2012)
294 REPLY of Proposed Class Member Arthur Villanueva in Support of (re 290 MOTION for Leave to File Late Claim Based on Delayed Postal Processing of Claim Form) filed by Arthur Villanueva. (Baker, Brad) (Filed on 11/26/2012) (Entered: 11/26/2012)
295 CLERK'S NOTICE Vacating Motion Hearing scheduled for 12/17/2012. (tmi, COURT STAFF) (Filed on 12/6/2012) (Entered: 12/06/2012)
296 ORDER by Judge Thelton E. Henderson granting 290 Motion for Leave to File Late Claim. (tehlc2, COURT STAFF) (Filed on 1/2/2013) (Entered: 01/02/2013)
297 STIPULATION and [PROPOSED] ORDER Authorizing Claims Administrator to Make Distribution to Class Member Arthur Villanueva filed by Margaret Benay Curtis−Bauer, Morgan Stanley & Co., Incorporated. (Finberg, James) (Filed on 2/19/2013) (Entered: 02/19/2013)
298 STIPULATION AND ORDER Authorizing Claims Administrator to Make Distribution to Class Member Arthur Villanueva re 297 . Signed by Judge Thelton E. Henderson on 02/19/2013. (tmi, COURT STAFF) (Filed on 2/20/2013) (Entered: 02/20/2013)
299 Joint Status Report And Request For Status Conference filed by Margaret Benay Curtis−Bauer, Daisy Jaffe, Denise Williams. (Finberg, James) (Filed on 9/29/2015) (Entered: 09/29/2015)

Case: 3:06-cv-3903 As of: 11/06/2016 10:21 AM PST 37 of 37

09/29/2015 09/30/2015 10/30/2015 11/03/2015
11/05/2015

300 STIPULATION WITH [PROPOSED] ORDER to Extend Jaffe Settlement Agreement filed by Margaret Benay Curtis−Bauer, Daisy Jaffe, Denise Williams. (Finberg, James) (Filed on 9/29/2015) (Entered: 09/29/2015)
301 Order by Hon. Thelton E. Henderson granting 300 Stipulation to Extend Jaffe Settlement Agreement.(tmiS, COURT STAFF) (Filed on 9/30/2015) (Entered: 09/30/2015)
302 Administrative Motion to Consider Whether Cases Should Be Related filed by Kathy Frazier. (Attachments: #(1) Declaration, #(2) Proposed Order)(Bish, Suzanne) (Filed on 10/30/2015) (Entered: 10/30/2015)
303 RESPONSE to (re 302 Administrative Motion to Consider Whether Cases Should Be Related); −Defendants Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC and Morgan Stanley's Opposition to Plaintiff Kathy Frazier's Administrative Motion to Consider Whether Cases Should Be Related filed by Morgan Stanley DW, Inc.. (Landy, Daryl) (Filed on 11/3/2015) (Entered: 11/03/2015)
304 CLERK'S NOTICE re 302 Administrative Motion to Consider Whether Cases Should Be Related. The court has reviewed the motion and determined that C−06−3903−TEH and C−15−4512−PJH are not related and no reassignments shall occur. (tmiS, COURT STAFF) (Filed on 11/5/2015) (Entered: 11/05/2015)

 
 United States District Court, N.D. California. San Francisco Division
Daisy JAFFE, et al., Plaintiff, v.
MORGAN STANLEY & CO., INC., Defendant. No. C 06-3903 TEH. January 14, 2008.
Objectors' Supplemental Brief in Opposition to Class Certification and Proposed Settlement
Robert S. Nelson (SBN# 220984), Nelson Law Group, 900 Cherry Avenue, Suite 300, San Bruno, CA 94066, (650) 794-2760 (phone), (650) 794-2761 (fax), rnelson @nelsonlawgroup.net, Mary Stowell (Pro hac vice), Linda D. Friedman (Pro hac vice), Suzanne E. Bish (Pro hac vice), Stowell & Friedman Ltd., 321 S. Plymouth Court, Suite 1400, Chicago, Illinois 60604, (312) 431-0888, Mstowell@sfltd.com, Lfriedman@sfltd.com, Bari S. Robinson (SBN # 91743), Law Offices of Bari S. Robinson, 1970 Broadway, Suite 1250, Oakland, California 94612, (510) 625-1507, barirobinson@aol.com, Attorneys for Putative Class Members and Objectors Ronald Moore, Morris Allen, Jr., Michael Barnett, Anthony Bell, Patrick Carter, Martin Dixon, Ernest Dorsey, Mary Evans, Janice Grant, Justin Harris, Mark Lewers, Maurice Mabon, Brian Roy, Marion Tucker and, Carlton McDowell.
TABLE OF AUTHORITIES
Albermarle Paper Co. v. Moody, 422 U.S. 405 (1975) ... 9
Armour v. Network Associates, Inc. 171 F. Supp. 2d 1044 (N.D. Cal. 2001) ... 4
Augst-Johnson v. Morgan Stanley, Case No. 06-1142 (D.D.C.) ... 14
Chiron Corp. Securities Litigation No. 04-4293, 2007 U.S. Dist. LEXIS 91140 (N.D. Cal. Nov. 30, 2007) ... 2
Cremin v. Merrill Lynch Case No 96 C 3773 (N.D Ill) ... 21
EEOC v. O&G Spring 38 F.3d at 880; see 42 U.S.C. § 2000e-5(g)(1) ... 13
EEOC v. Morgan Stanley No. 01-8421 (S.D.N.Y.) ... 17
Guenther V. Pacif. Telecom, Inc. 123 F.R.D. 341, 344 (D. Ore. 1987) ... 1
Ingram v. The Coca-Cola Co 200 F.R.D. 685, 688 (N.D. Ga. 2001) ... 12
Kayes v. Pacif. Lumber Co 51 F.3d 1449, 1465 (9th Cir. 1995) ... 3

Kraszewski v. State Farm No. 79-1261 (N.D. Cal.) ... 7, 12 Krim v. PCORDER.Com 210 F.R.D. 581 (2002) ... 5 Lerwill v. Inflight Motion Pictures, Inc. 582 F.2d 507 (9th Cir. 1978) ... 3 Linder v. Litton Systems, Inc. 81 F.R.D. 14 (D. Md. 1978) ... 5, 6 Martens v. Smith Barney, Case No. 96-3779 (S.D.N.Y.) ... 21 Merriweather v. Family Dollar Stores of Ind. 103 F.3d 576, 578 (7th Cir. 1996) ... 9 Peregrine Systems, Inc. Securities Litigation No. 02-870, 2002 U.S. Dist. LEXIS 27690, *37 (S.D. Cal. Oct. 9, 2002) ... 3 Quarterdeck Office Systems, Inc. Securities Litigation No. 92-3970, 1993 U.S. Dist. LEXIS 19806 (C.D. Cal. Sep. 30, 1993) ... 6 Reiter v. MTA, 457 F.3d 224, 230 (2d Cir. 2006) ... 11 Roberts v. Texaco, Inc. No. 94-2015, 1997 U.S. Dist. LEXIS 23848 (S.D.N.Y. Mar. 21, 1997) ... 12 Rutstein v. Avis Rent-A-Car Sys. 211 F.3d 1228, 1237 (11th Cir. 2000) ... 9 Smith v. Nike Retail Services No. 03-9110 (N.D. Ill.) ... 12 Stallworth v. Shuler 777 F.2d 1431, 1435 (11th Cir. 1985) ... 13 Swift v. First USA Bank No. XXXXXXX, 1999 U.S. Dist. LEXIS 19474, at *17 (N.D. Ill. Dec. 14, 1999) ... 3 Taxman v. Bd. of Educ. 91 F.3d 1547, 1552 (3d Cir. 1996) ... 9 Williams v. Pharmacia 137 F.3d 944, 951-52 (7th Cir. 1998) ... 9 Zhang v. Am. Gem Seafoods, Inc. 339 F.3d 1020, 1044 (9th Cir. 2003) ... 9
TABLE OF CONTENTS

I. The Proposed Settlement Class Lacks An Adequate Class Representative ... 2
A. Ms. Curtis-Bauer Does Not Meet The Legal Requirements of Rule 23(a)(4) To Serve As A Class Representative ... 2
B. A Comparison Of Ms. Curtis-Bauer's Role In This Lawsuit To Other Named Plaintiffs And The Moore Group Illustrates Her Inadequacy ... 7
II. The Adverse Impact Of The Lack Of Adequate Class Representation ... 11
A. Plaintiff's Compensation Shortfall Analysis Of Aggregate Class Damages Does Not Adequately Capture Class Members' Losses ... 8
B. Releases Should be Limited To Claims in Compensation Shortfall Analysis ... 10
C. Programmatic Relief is Not a Fair Substitute For Monetary Relief ... 11
D. African-Americans and Latinos Should Not Be Joined Absent Sub-Classes ... 13
E. The Single Allocation Formula For The Common Settlement Fund Is Unfair ... 14
III. Conclusion ... 15
Before the Court is the Joint Motion of the Parties for Class Certification and Preliminary Approval of a Settlement. On December 12, 2007, following a hearing on the motion, this Court sought additional briefing from the parties. Specifically, the Court sought input from the parties on “how it can judge Ms. Curtis-Bauer's adequacy as a representative ... where Ms. Curtis-Bauer is receiving a significant additional payment in the form of settlement of her non-class claims, and she is relatively new to the suit.” Dec. 12, 2007 Order, Docket No. 130, at 3. Additionally, the Court requested information about plaintiff's computation of maximum class damages in order to judge the adequacy of the proposed monetary relief. Id. at 7-8. On behalf of themselves and absent class members, the Moore group seeks leave to participate in this additional briefing.
I. The Proposed Settlement Class Lacked An Adequate Class Representative
A. Ms. Curtis-Bauer Does Not Meet The Legal Requirements of Rule 23(a)(4) To Serve As A Class Representative
As a threshold matter, a class action may be maintained only if “the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement is “essential to meet due process standards, [and] must be satisfied at all stages of a class action, because the final judgment in a class action is binding on all those whom the court determines are members of the class.” Newberg on Class Actions, Sect. 3:21. “The importance of determining adequate representation cannot be understated. The rule that the representative must fairly and adequately

represent the class is one of constitutional magnitude.” Guenther v. Pacif. Telecom, Inc., 123 F.R.D. 341, 344 (D. Ore. 1987). Basic notions of fairness and justice dictate that absent class members have an effective voice in proceedings that may extinguish their claims. Id., citing 7A Wright & Miller, Fed. Prac. & Proc. § 1765 (1986).
The presence and involvement of class counsel during negotiations is not a substitute for the active representation of a named plaintiff, regardless of whether class counsel are experienced and able at their task. In re Cavanaugh, 306 F.3d 726, 733 (9th Cir. 2002) (“the court must keep firmly in mind that the inquiry is not into the adequacy or fitness of counsel but into the adequacy of plaintiff”). Similarly, class counsel cannot fairly and adequately serve as both class counsel and class representative. In re Chiron Corp. Securities Litigation, No. 04-4293, 2007 U.S. Dist. LEXIS 91140, *46 (N.D. Cal. Nov. 30, 2007) (“When class counsel are not effectively monitored by the class representative, the result is indistinguishable from the situation in which an attorney serves as both class counsel and class representative”).
Here, defense counsel, Mark Dichter, submitted a declaration to the Court affirming that the parties reached tentative agreement on a settlement on July 23, 2007 during mediation that day. Dichter Dec, Docket No. 107, at ¶ 9. Yet, plaintiff's counsel, Kelly Dermody, testifies in her declaration that a settlement in principle was reached in August, 2007. Dermody Dec, Docket No. 88, at ¶ 38. Ms. Curtis-Bauer now affirms that her own direct contributions in the negotiations were probably no more than for the week before the agreement in principle was finalized.[FN1] Curtis-Bauer Dec, Docket No. 138, at ¶ 15. There is no serious doubt that the Court's characterization of Ms. Curtis-Bauer as relatively new to the litigation is fair. Likewise, there can be no serious debate that prior to joining the suit, Ms. Curtis-Bauer did not serve as a fiduciary to the class or otherwise monitor class counsels' negotiations. Thus, the due process rights of class members were not protected by Ms. Curtis-Bauer or any other class fiduciary. During the heart of this litigation, the class had no effective voice and the due process standards codified in Rule 23 were not met.
FN1. This timeline is entirely consistent with the statements Ms. Curtis-Bauer made to Moore group members that she was contacted on a Friday and told she had only three days to think about her decision to serve as a class representative. By Tuesday of the following week, her name had been added to the Second Amended Complaint and her $125,000 special payment secured. See Ex. 2, Roy Dec, Ex. 3 Evans Dec, Ex. 4, Mabon Dec.
Since she joined the litigation, Ms. Curtis-Bauer's conduct has not instilled confidence among class members that she has made up for lost time and protected their rights. On the contrary, Ms. Curtis-Bauer has established that she is not an adequate representative because during the “no more than a week” of her “direct contributions to the negotiations,” Ms. Curtis-Bauer not only ratified the common fund, she and class counsel also secured a special payment of $125,000 to be paid to her from that fund for her “non-class claims.” These facts raise conflict and adequacy issues, and the law prevents Ms. Curtis-Bauer from being deemed an adequate representative if the facts create even an appearance of a conflict or that she is not zealously guarding the interests of the class.
Other class representatives were deemed inadequate under Rule 23 where a conflict of interest created “the appearance that they are not able to adequately investigate and prosecute this action on behalf of the absent members of the class.” In re Peregrine Systems, Inc. Securities Litigation, No. 02-870, 2002 U.S. Dist. LEXIS 27690, *37 (S.D. Cal. Oct. 9, 2002). Here, the disproportionately large, special payment of $125,000 to Ms. Curtis-Bauer relative to her small possible recovery under the class fund formula, in combination with her eleventh-hour assumption of the named plaintiff role, likewise create the appearance of a conflict of interest and bars Ms. Curtis-Bauer from serving as class representative. See also Swift v. First USA Bank, No. 98-8238, 1999 U.S. Dist. LEXIS 19474, *17 (N.D. Ill. Dec. 14, 1999) (proposed class representative was inadequate because she was “branded with the appearance of, and potential for impropriety, which is the primary” concern of the court, even though the court did not suppose that she would “change a mere appearance into an actual occurrence”); accord Kayes v. Pacif. Lumber Co., 51 F.3d 1449, 1465 (9th Cir. 1995) (affirming the district court's disqualification of class counsel due to the appearance of divided loyalties).

Under the apparent conflict standard, the underlying facts concerning Ms. Curtis-Bauer's negotiation of a substantial payment from the class common fund are particularly troubling given that her “non-class claims” are time-barred.[FN2] Ms. Curtis-Bauer left the employ of Morgan Stanley in November 2002, nearly five years before she first raised any legal claims against Morgan Stanley and joined the Jaffe lawsuit in August 2007.[FN3] The only non-class claims that Ms. Curtis-Bauer may have once been entitled to prosecute are now time-barred. Thus, without the class action, she would have no potential recovery on those “non-class” claims.
FN2. Ms. Curtis-Bauer may not attempt to revive her stale claims by relying on the standstill negotiated by the Moore group. First, the standstill applies to Moore's class claims, not Ms. Curtis-Bauer's non class claims. Second, the standstill does not revive claims that were barred as of August, 2006. Third, by filing her own action, Ms. Curtis-Bauer removed herself from the protection of the standstill and, in fact, violated the express terms of the standstill. Ex. 23 ¶ 5 (requiring 15 days written notice terminating standstill prior to initiation of legal action). Finally, if Ms. Curtis-Bauer is suggesting that she can intentionally elect to apply the Moore standstill only to herself while not protecting the rest of the class members with a class period that dates back to August, 2006, this is yet another example of impermissible self-dealing or at least an appearance of impropriety sufficient to disqualify her as a class representative.
FN3. Also significant is Morgan Stanley's agreement to extend the class period back to October 2002, thus capturing the end of Ms. Curtis-Bauer's tenure at Morgan Stanley. The limitations period under Section 1981 is four years, so the class period would seemingly begin four years prior to the January 23, 2007 effective date of the class standstill the parties executed in March 2007, that is on January 23, 2003, two months after Ms. Curtis-Bauer left Morgan Stanley, and outside the § 1981 statute of limitations and likely class period. See Agmt., Ex. A to Dichter Dec, Docket. No. 107, at 9-11; Sec. Am. Compl., Docket No. 81, at ¶ 15. Plaintiffs' counsel stated that Morgan Stanley agreed to set the class period four years prior to the date Denise Williams was added to the gender discrimination class action and alleged individual race claims in the First Amended Complaint on October 12, 2006. Dec. 3 Hearing Transcript, 66:20-67:7. But Ms. Williams's filing of individual claims would not toll the statute of limitations for any plaintiff except herself. As class counsel told this Court at the time, Ms. Williams's “race discrimination claims . . . have not been brought on behalf of anyone but Ms. Williams at this time . . . who brings certain individual race claims not previously alleged.” See Docket No. 32 at 1-2. Defendant's decision to abandon a limitations defense against the sole class representative is telling.
Further, based on a fund allocation formula that is heavily weighted towards tenure, Ms. Curtis-Bauer will likely receive a nominal award for her class claim. Had Ms. Curtis-Bauer been presented to the Court as an advocate for the settlement without the $125,000 favored treatment, an argument that she stood in the shoes of absent class members and protected their interests might be more compelling. However, Ms. Curtis-Bauer was not required to balance her low recovery from the common fund against the benefits of the diversity initiatives. The Court is left to wonder whether Ms. Curtis-Bauer would support the settlement without this favored treatment. And class members are left to wonder whether she leveraged the class litigation for an individual recovery on time-barred claims. Fortunately, the Court need not resolve either of these troubling issues against Ms. Curtis-Bauer to disqualify her as a class representative because the appearance of divided loyalties is enough to bar her from serving as a class representative under Rule 23.
A court may also test a named plaintiff's fulfillment of her fiduciary obligations to the class by examining her knowledge of the case and the work she has done to pursue a favorable outcome. District courts in this circuit have denied certification where the proposed representative failed to meet a minimum standard of knowledge and effort. In Burkhalter Travel Agency v. MacFarms International, Inc., 141 F.R.D. 144, 154 (N.D. Cal. 1991), the court denied certification to a class of plaintiffs in a price-fixing antitrust case. The court noted that the Burkhalter plaintiff was unsure, during his deposition, as to whether the class would include a nationwide group of plaintiffs or only those in his home state, id., just as Ms. Curtis-Bauer mistakenly told her friend Mary Evans that the class in this matter was restricted to Morgan Stanley FAs employed in California. Ex. 3, Evans Dec. ¶6a. The Burkhalter plaintiff likewise lacked “any significant understanding of price policies at his own firm or about” the industry in question as a whole. Id. Given this “alarming unfamiliarity” with the suit, the court could not “be certain that [the plaintiff] will adequately represent the proposed

class. Id. Plaintiff's counsel would be acting on behalf of an essentially unknowledgeable client, so certifying a class . . . would risk a denial of due process to the absent class members.” Id.
Similarly, because Ms. Curtis-Bauer worked for Morgan Stanley for only a few weeks in the class period, and was not involved in the investigation or prosecution of the claims, she lacks the required knowledge of the firm's practices and the injuries and wrongs suffered by class members during her five-year absence from its workforce. Linder v. Litton Systems, Inc., 81 F.R.D. 14 (D. Md. 1978) (dismissing employment discrimination class action due to inadequacy of class representative, who had been employed by defendant years prior to lawsuit and had little knowledge of challenged policies and practices); Krim v. PCORDER.Com, 210 F.R.D. 581, 587 (W.D. Tex. 2002) (denying class certification based on inadequacy of named plaintiffs due to lack of knowledge, involvement and interest in case).[FN4]
FN4. According to the Krim court, the Fifth Circuit holds that “the adequacy requirement mandate[s] an inquiry into ‘the willingness and ability of the representatives to take an active role in and control of the litigation and to protect the interests of the absentees' ... Representatives should understand the action in which they are involved, and their ‘understanding should not be limited to derivative knowledge acquired solely from counsel.’ ...The competency of class counsel is not enough on its own; the representatives themselves must be familiar with the case” (citations omitted). Krim, 210 F.R.D. at 587.
Courts have denied certification where, as here, the class representative's lack of action created doubts as to her willingness to fulfill her fiduciary obligations to the class. In re Quarterdeck Office Systems, Inc. Securities Litigation, No. 92-3970, 1993 U.S. Dist. LEXIS 19806, 16 (C.D. Cal. Sep. 30, 1993), defendants opposed certification due to the named plaintiffs' “abdication of their role as fiduciaries for the class to their attorneys.” Id. at *17. The court agreed, finding that the plaintiffs were “true ‘stand-in’ parties, selected by lawyers to fill a required role.” Id. at *17-18. Among other flaws, the plaintiffs were “not familiar with the changes in the various amended complaints filed on behalf of the class . . . and they relied on investigations by counsel to support their claims.” Id. at *17. One plaintiff even admitted --just as Ms. Curtis-Bauer admitted to Moore Group members -- that “she would leave the conduct of the litigation to her attorneys to vigorously pursue the case.” Id. See Declarations at Ex. 2 ¶¶5-6; Ex. 3 ¶6a; Ex. 4 ¶5f Further, Ms. Curtis-Bauer did not provide the Court with the opportunity to question her about this settlement because she elected not to appear at the preliminary approval hearing. On these facts, the Court cannot be certain that the sole class representative was sufficiently knowledgeable, willing or able to defend absent class members' rights.
B. A Comparison Of Ms. Curtis-Bauer's Role In This Lawsuit To Other Named Plaintiffs And The Moore Group Illustrates Her Inadequacy.
Ms. Curtis-Bauer's late arrival and passive role in the lawsuit stand in stark contrast to class representatives in other employment discrimination lawsuits and, notably, to the extensive work the Moore group devoted to this matter over the last year and one half.
In employment discrimination cases, active involvement by class representatives is crucial for informed, vigorous representation of the class. Linder v. Litton Systems, Inc., 81 F.R.D. 14 (D. Md. 1978) (sole class representative was “not adequate to undertake the grave fiduciary responsibility of representing any class of victims of defendant's alleged employment discrimination”). In contrast to the representatives in Linder, Judge Castillo credited the results achieved to the labors undertaken by the class representatives Cremin v. Merrill Lynch lawsuit,[FN5] which eliminated defendant's mandatory arbitration policy and created a claims resolution process that was modeled in part after a case before this Court, Kraszewski v. State Farm. See Ex. 12 Fairness Hearing Tr., at 38-39; Ex. 9, Brad Seligman Cremin Aff. The active role of the Cremin representatives in selecting and overseeing counsel and the litigation, from fact and expert discovery through the negotiation of a resolution, are described in their declarations at Exhibit 18.

FN5. This Court found Cremin unpersuasive precedent, in part, because Cremin class members risked no recovery from settlement. Docket. No. 130, at 7, n. 4. Respectfully, only one Cremin claimant of over 900 received no award, after rejecting a $600,000 settlement offer. Ex. 19 ¶3.
The Moore group has expended substantial time, effort, and resources in pursuing their claims against Morgan Stanley, as described in the declarations attached as Exhibits 5, 6, 7, 8 and 24. Members of the Moore group came together to discuss the racial discrimination they faced at Morgan Stanley and plan a response. They researched law firms and spent extensive time with the counsel they selected, explaining their experiences and Morgan Stanley's employment policies. See Exs. 7-8. Together with counsel, the Moore group drafted EEOC charges for the class they hoped to represent and standstill agreements to protect class members' rights.
To ensure that they understood the serious obligations they would assume if they pursued legal claims on behalf of a class, the Moore group convened in Chicago to learn the duties of class representatives, the differences between individual and class litigation, and various methods of proving and resolving these cases. See Exs. 5-8. Moore Group members also prepared for, traveled to, and participated in four days of mediations with Morgan Stanley and its representatives. Id. Ultimately, the Moore group filed suit on behalf of themselves and others in federal court in Chicago seeking to hold Morgan Stanley accountable for its systemic race discrimination and to achieve meaningful reform. Id.
In addition to pursuing their legal claims, members of the Moore group met with members of Congress and their staffs about discrimination on Wall Street and worked with the National Employment Lawyers Association to lobby for passage of civil rights legislation. Ex. 24. Moore group members also communicated with class representatives in analogous race discrimination lawsuits by FAs to work together towards change. Ex. 5 ¶8.
The Moore group's efforts to educate their counsel, become fully informed about the facts and law, and to discuss these issues would have enabled them to make a meaningful contribution to settlement negotiations. Their efforts, and the knowledge Moore group members gained thereby, form the basis of their objections to the proposed settlement. As described below, the lack of informed and interested class representatives deprived counsel of important information during settlement negotiations and left absent class members without adequate representation.
II. The Adverse Impact Of The Lack Of Adequate Class Representation
The Moore group provides the below examples of important issues that would have been raised by informed, engaged class representatives as part of negotiations with Morgan Stanley.
A. Plaintiff's Compensation Shortfall Analysis Of Aggregate Class Damages Does Not Adequately Capture Class Members' Losses
One factor in determining the adequacy of a common fund is the degree of compromise it represents from the maximum recoverable damages to the class. A settlement fund is not adequate if it represents too low a percentage of the recoverable damages such that the risk of litigation does not outweigh the advantages of settlement. Toward establishing the adequacy of the common fund, plaintiff's counsel argued: “[I]f we run the table, we get the class cert, we win on liability, we get all of the damages we're seeking we would get about $36 million.” Transcript, Docket No. 131, 13. Thus, plaintiff's counsel suggests that $16 million is a reasonable and fair recovery on liability capped at $36 million. Id. This argument is wholly dependent on the sufficiency of the class damages estimate. Plaintiff's counsel recently disclosed that its $36 million damages calculation was based on a “compensation shortfall” analysis. See Motion For Leave To File Under Seal, Docket No. 132, at 2-3; Finberg Dec, No. 133, at ¶¶ 2-3. A “compensation shortfall” analysis, however, does not capture the losses of class members or damages recoverable as a matter of law.

Governing law provides “make-whole” relief for victims of discrimination. Albermarle Paper v. Moody, 422 U.S. 405, 419 (1975). In order to further the goals of Title VII and Section 1981, backpay is presumptively due to prevailing plaintiffs. See EEOC v. O&G Spring, 38 F.3d at 880; 42 U.S.C. § 2000e-5(g)(1); Rutstein v. Avis Rent-A-Car Sys., 211 F.3d 1228, 1237 (11th Cir. 2000). Backpay is the sum of money owed to victims of discrimination from the date of judgment backwards to the earliest actionable date, in this case October 12, 2002. Section 1981 plaintiffs may seek unlimited damages for emotional distress and punitive damages. See, e.g. Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1044 (9th Cir. 2003); Merriweather v. Family Dollar Stores of Ind., 103 F.3d 576, 578 (7th Cir. 1996). Front pay is also allowed, as well as reputational injury. Williams v. Pharmacia, 137 F.3d 944, 951-52 (7th Cir. 1998). Wage losses also may include lost fringe benefits, retirement benefits, health insurance costs and other compensatory amounts. Taxman v. Bd. of Educ. 91 F.3d 1547, 1552 (3d Cir. 1996).
The proposed settlement requires class members to release termination claims due to low production, but the damages calculation does not include losses that result from termination.[FN6] As explained in the declaration of Professor Emeritus Jerry Goldman, an expert retained by the Moore group, the goal of a “compensation shortfall” analysis is to capture differences in wages for current employees. Ex. 1, at ¶¶ 9-10. It measures earnings disparities only for the period during which class members worked at the firm. A compensation shortfall analysis therefore omits post-employment losses, including post-employment backpay and front pay. Id.
FN6. The proposed Notice states that “[t]ermination and advancement into management claims for race and/or color discrimination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reduction-in-force, other production based performance related terminations and any claims for constructive discharge based on the same set of facts or circumstances shall be released but any other termination, advancement into management, constructive discharge or harassment claims shall not.” Docket No. 87-2, Notice at 13.
The undervalued losses from termination are acutely felt by African-American class members, who suffer a higher rate of attrition. To illustrate, the fifteen Moore group members all suffered devastating economic losses and career injuries. Only two of the fifteen remain employed by Morgan Stanley; the remaining thirteen were terminated or forced out of Morgan Stanley's employ due to the firm's discriminatory practices. See generally Exs. to Objns., Docket Nos. 95-2 through 95-9. Many struggled to find new employment, and suffered substantial post-employment losses.[FN7] See, e.g., Ex. 7, at ¶2. The Moore group believes their experiences are typical of African-Americans class members. See generally Docket Nos. 95-2 through 95-9.
FN7. Although most remain in the industry, they are working at small, independent firms where their earnings and opportunities do not approach what they should have earned at Morgan Stanley absent discrimination. Ex. 7.
The “compensation shortfall” analysis similarly undervalues the claims of currently employed African-American class members by excluding front pay. Due to the denial of resources and opportunities, African-American FAs who survive at Morgan Stanley are disproportionately grouped in the lower range of production and income levels as compared to Caucasians and Latinos. See, e.g., Ex. 6. African-Americans are nearly absent from the ranks of the firm's highest-earning FAs. Ex. 7. Therefore, a “compensation shortfall” analysis that ends in 2007 will not accurately determine the harm that will be suffered in the future by tenured African-American FAs.[FN8] Any damage model must include front pay to value the ongoing cumulative disadvantage to African-American FAs.
FN8. It does not appear that plaintiff's counsel attempted to value losses based on account distributions or transfers lost as a result of the firm's discriminatory account distribution and teaming practices, nor did they

value the loss of opportunities to join management. B. Releases Should be Limited To Claims in Compensation Shortfall Analysis
Plaintiff's counsel stated to the Court: “if we ... get all of the damages we ‘re seeking, we would get about $36 million” (emphasis added). If the class was only seeking damages for the limited wage claims captured by a “compensation shortfall” analysis, why does the settlement require class members to release termination claims and post-termination losses? If the Court relies upon the “compensation shortfall” analysis and approves the $16 million fund, class members should be required to release claims only for wage loss captured in the “compensation shortfall” analysis. Class members should not be required to release claims or damages not included in the “compensation shortfall” analysis, including claims for termination, emotional distress, punitive damages, front pay and others not sought by the class. The release must be rewritten to include only the claims captured by the compensation shortfall analysis.
C. Programmatic Relief is Not a Fair Substitute For Monetary Relief
The “compensation shortfall” analysis plainly does not measure the aggregate damages due to the class under law. Ex. 1. Plaintiff appears to suggest that the under-valuation of damages and under-compensation of class members is lawfully offset by the settlement's programmatic relief because this is a race discrimination case. Plaintiff's Reply, Docket No. 101, at 4.[FN9] This cannot be the outcome for a number of reasons. First, the programmatic relief will not benefit the overwhelming majority of African-American class members, who no longer work at the firm due to its systemic discrimination. Second, the bulk of the programmatic relief is already secure on account of the Augst-Johnson gender settlement. More importantly, the trade-off of inadequate monetary relief in exchange for injunctive relief is neither fair nor legally required. To the contrary, Congress provided for full, make-whole relief to serve the dual aims of Title VII to make whole the victims of discrimination and to achieve workplace reform. Reiter v. MTA, 457 F.3d 224, 230 (2d Cir. 2006). Indeed, as Congress contemplated, one of the most effective tools of reform is requiring an employer to redirect profits and make whole its victims. Allowing an employer to escape responsibility to fairly compensate victims of discrimination leaves victims with inadequate relief and undermines the business rationale to bring about change. Nor is any trade-off necessary with a defendant with the financial resources of Morgan Stanley.
FN9. Plaintiff contended that unlike other cases, which are measured by their monetary rewards, a race discrimination settlement is successful if “the agreed upon injunctive relief addresses the problems ... Judged by that measure, this proposed settlement is a success.” Id.
Victims of race discrimination should not be required to choose between change and make-whole relief for their losses. Settlements and verdicts in similar cases have not required class members to compromise make-whole relief. For example, in Kraszewski v. State Farm General Insurance Co., No. 79-1261 (N.D. Cal.), over $250 million was paid to women denied insurance agent positions at State Farm. See Ex. 9, Dec. of B. Seligman in Cremin v. Merrill Lynch, at ¶¶ 4, 14. According to press reports, after approximately 100 class members obtained relief through individual damages hearings, the defendant settled with the 814 remaining claimants for $157 million, or more than $192,000 each. Ex. 9, Seligman Aff. at ¶ 14; Ex. 10, Business People: The Woman Who Sued State Farm And Won, by Adam Bryant, New York Times, April 30, 1992. The lost opportunities at State Farm were less lucrative than those at issue here; veteran State Farm agents earned incomes of approximately $61,000 per year at the time of the suit. Kraszewski, No. 79-1261, 1985 U.S. Dist. LEXIS 20297, at *29-30 (N.D. Cal. 1985).
Similarly, in Roberts v. Texaco, Inc., No. 94-2015, 1997 U.S. Dist. LEXIS 23848 (S.D.N.Y. Mar. 21, 1997), a class of salaried African-American employees attained a settlement valued at over $193 million. Ex. 26. Roberts class members received average awards in excess of $63,000, along with pay equity corrections (i.e., raises) averaging more than 11%, a benefit valued at more than $4 million in the first year alone. Id. at *4. See also Ingram v. The Coca-Cola Co., 200 F.R.D. 685, 688 (N.D. Ga. 2001) (African-American salaried employees settled for overall value of $176 million and received guaranteed cash awards averaging $38,000 per class member, as well as $10 million bonus fund for class

members promoted during next ten-year period and a pay equity provision worth $43.5 million in employee raises); Ex. 27.[FN10]
FN10. Other recent cases involving hourly or part-time workers have resulted in higher per class member damage awards than this settlement offers MSDW FAs. See, e.g., Smith v. Nike Retail Services, No. 03-9110 (N.D. Ill.) http://www.nikediscrimination.com/NikeConsentDecree.pdf, at 25-26 (race discrimination class action settled in 2007 for $5 million). Taking the largest estimate of the class size, the average award was nearly $22,000 to hourly retail workers, many whom worked part-time. Smith, 234 F.R.D. 648, 659 (N.D. Ill. 2006).
Recent discrimination verdicts in similar cases in the financial services industry have brought average individual awards more than ten times larger than those contemplated here. See, e.g., Ex. 13, Sumner v. Merrill Lynch Arbitration Award ($2.2 million awarded to individual FA in sex discrimination case); Ex. 14, Hardin v. Merrill Lynch ($501,979 award); Ex. 15, Marcus v. Merrill Lynch ($558,000 award); Ex. 16, Twombly v. Merrill Lynch ($210,000 award); Ex. 17, Wyatt v. Merrill Lynch ($284,712 discrimination award). See also Ex. 22, Zubulake v. UBS Warburg LLC, No. 02-1243 (S.D.N.Y. 2005)(jury awarded $29 million in compensatory and punitive damages to equities broker terminated for reporting gender discrimination); Ex. 21, Sojaji v. Merrill Lynch & Co., (NASD panel awarded $400,000 in compensatory damages and $1.2 million in punitive damages to broker fired because of his race).
D. African-Americans and Latinos Should Not Be Joined Absent Sub-Classes
In its December 12, 2007 Opinion, the Court stated that “[t]here has been no showing that Ms. Curtis-Bauer is an unsuitable class representative for Latinos” and that “[t]here is no discernable conflict based on race.” Docket No. 130, at 3, 5. The Court relied upon plaintiff's allegations that the account transfer policies applied to and affected African-Americans and Latinos in the same way, as well as counsel's representation that its analysis of compensation data and representation rates demonstrated common patterns across the class. Id. at 4.
The Moore group respectfully submits that the challenged practices do not affect African-Americans and Latinos in the same way and that the working conditions and outcomes of the two groups at Morgan Stanley are very different. As set forth in the declarations attached as Exhibits 5-8, the Moore group believes that actual conflicts exist between African-American and Latino class members that should prevent a single class.[FN11] As described in their Motion for Discovery, the Moore group believes that these conflicts will be apparent from a review of the workforce data they have requested. Motion For Discovery, Docket No 125, at 6-9.
FN11. Plaintiff contends that a single class of Latinos and African-Americans is acceptable because both earn less than white men. Tr. at 17:11-17. White women, too, earn less than white men. Yet when African-American Denise Williams joined the lawsuit seeking to represent a class of female FAs in October 2002, she did not add class race discrimination claims or seek to also represent a class of African-Americans, despite her individual race claims. She undoubtedly recognized that such a class would not have been sufficiently cohesive to proceed and effectively represent the interests of both women and African-Americans, due to differences in their treatment and outcome, and that antagonism would exist if the two groups were joined in a single class. Due to the difference in treatment and outcomes between Latinos and African-Americans, similar conflicts exist that make a single class inappropriate.
Plaintiff's central allegation is that Morgan Stanley's system of transferring accounts harm both groups similarly. Plaintiff does not allege that she conducted a statistical analysis of account transfers for purposes of determining damages or the impact of the account transfer and teaming policies on African-Americans and Latinos. The Moore group would have insisted that such an analysis be performed and informed counsel that Latinos appear to fare better under the firm's account transfer practices, for a number of reasons. See, e.g., Ex. 5, ¶¶ 2-9.

First, unlike African-Americans, Latinos are not excluded from favorable teams. Id. at ¶6. Under the express terms of the “new” account distribution policy, assets from a departing partner are transferred to the remaining partner and not distributed to the other FAs in the office. Proposed Stlmt., Docket No.87-2, at 26. Nevertheless, accounts received from teams count toward an FA's points on the power ranking. Id. at 26-27. Thus, the exclusion of African 11 Americans from teams harms them as compared to both Latinos and Caucasians. The Moore would not have agreed to any resolution that did not effectively combat the exclusion of African-Americans from teams and the differential impact of teams by race on the power-ranking and account distribution policy. Ex. 5, ¶ 22; Ex. 6, ¶ 30; Ex. 7, ¶ 37; Ex. 8, ¶ 21.
Second, Latino FAs have access to and rely upon a large and lucrative client base of domestic and international Latino clients, which Morgan Stanley promotes and supports. See, e.g., http:// www.morganstanley.com/about/press/ articles/4281.html. The vast majority of Caucasian FAs do not, and cannot, compete for this market. As a result, many Latinos, and Latino teams, fare better on the power ranking, receive account transfer opportunities and otherwise fare better than African-Americans, who lack a similar market to combat the discrimination they face. Ex. 5, ¶8-9. While Latinos and African-Americans may not fare as well as Caucasians when competing for domestic accounts, Latinos appear to be favored under the account distribution system with respect to domestic and international Latino clients.
E. The Single Allocation Formula For The Common Settlement Fund Is Unfair
There was no debate between knowledgeable class members about allocating the settlement proceeds, so the formula applicable to both groups does not fairly allocate relief and disadvantages African-Americans relative to Latinos. See, e.g., Ex. 1, at ¶ 5.
Class members could have decided that given the composition or variation of the class, a single formula was not appropriate and instead looked to sub-classes and separate formulas, or to an individualized process to allocate damages to class members. An individualized hearing approach was taken after a Teamsters liability finding in a discrimination class action before this Court in Kraskwieski v. State Farm, to the benefit of class members. Ex. 9, Seligman Dec. In very similar discrimination class actions involving FAs at other brokerage firms, informed class representatives chose an individualized claims resolution process for damages as part of a settlement, again to the great benefit of class members. See discussion of Cremin v. Merrill Lynch, Case No. 96-3733 (N.D. Ill.), at Ex. 11 ($200 million paid to resolve claims of class members), Ex. 25 (Hughes Article) at App. A, 4; Martens v. Smith Barney, at Ex. 25, App. C, 3.
The settlement's allocation formula rewards longevity. Proposed Notice, Docket No. 87-2, at 13, ¶ 8. Due to their higher attrition rate, most African-American class members are likely to have worked at Morgan Stanley for far fewer weeks than their Latino counterparts and so will not fare as well in competing for a share of the common fund. As Dr. Goldman, an expert retained by the Moore group, explains in his declaration: [I]n the example of point calculation (p. 103) provided in the settlement document, about two-thirds of an 85% component (the “claim form survey”) of the allocation formula, or nearly 57%, is tied to this service time. The assumptions imply that service time would be smaller on the average for African-Americans than for Latinos, which would propagate to a smaller calculated award to these individuals whose earnings potential at the onset of hire was no less equal. Consequently, the number of weeks worked time of service component within the claim form completes a vicious circle tied to race. Ex. 1, at ¶ 6.
The substantial damages that result from termination are often career-ending and may eclipse disparities suffered by those who remain at the firm, even if they earn lower wages than whites.
Similarly, Plaintiffs' counsel confirmed that Latino FAs out-earn African-American FAs at Morgan Stanley. Dec. 3 Tr.

at 17:11-13. However, only a small portion of the allocation formula, 15%, is determined based on these disparities. Proposed Notice at 13, ¶ 8. Thus, although African-Americans were harmed the most by Morgan Stanley's discrimination, the terms of the proposed settlement may result in Latino FAs recovering a greater percentage of the common settlement fund and, frequently, larger awards than African-American class members. The Moore group would not have agreed to the single formula to allocate the common fund set forth in the proposed notice, to the disadvantage African-Americans as compared to Latinos. Instead, it is likely that subclasses would have been deemed appropriate.
For the above reasons and those in their Objections and Motion for Discovery, the Moore group asks the Court to deny the parties' motion for class certification and preliminary approval. Respectfully submitted on behalf of the Moore Group, STOWELL & FRIEDMAN LTD.
Mary Stowell (pro hac vice)
Linda D. Friedman (pro hac vice)
Suzanne E. Bish (pro hac vice)
STOWELL & FRIEDMAN LTD
321 S. Plymouth Court, Suite 1400
Chicago, Illinois 60604
(312) 431-0888 Robert Nelson /s/ NELSON LAW GROUP ROBERT S. NELSON (SBN# 220984) NELSON LAW GROUP 900 Cherry Avenue, Suite 300 San Bruno, CA 94066 (650) 794-2760 (phone) (650) 794-2761 (fax) rnelson@nelsonlawgroup.net

 
 Court: Case Title: Appeal From:
Date Filed:

US COURT OF APPEALS FOR THE NINTH CIRCUIT DAISY JAFFE, ET AL v. MORGAN STANLEY & CO., INC. U.S. DISTRICT COURT FOR NORTHERN CALIFORNIA, SAN FRANCISCO 12/01/2008 CASE INFORMATION

Case Number: Case Type: Case Subtype:
Nature of Suit: Key Nature of Suit:

08-17599 APPEALS CIVIL PRIVATE 3442 JOBS APPEALS (030) LOWER COURT INFORMATION

District: Lower Court Docket Number: Trial Judge(s): Court Reporter(s):
Date Filed: Date Order/Judgment: Date NOA Filed: Date COA Received:

0971-3 3:06-CV-03903-TEH THELTON E. HENDERSON, U.S. DISTRICT JUDGE SAHAR MCVICKAR DEBRA PAS JAMES JONATHAN YEOMANS 06/22/2006 10/22/2008 11/21/2008 11/28/2008
NAMES

Name:

DAISY JAFFE

Type: Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Firm Name: Firm Address:
Firm Phone: Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Firm Phone: Attorney: Attorney Phone: Firm Name: Firm Address:
Name: Type:

PLAINTIFF - APPELLEE ELIZABETH A. ALEXANDER, ESQUIRE 615-313-9000 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP SUITE 1650 150 FOURTH AVENUE NORTH NASHVILLE, TN 37219-2423 KELLY M. DERMODY 415-956-1000 LIEFF CABRASER HEIMANN & BERNSTEIN, LLP EMBARCADERO CENTER WEST 30TH FLOOR 275 BATTERY STREET SAN FRANCISCO, CA 94111-3339 JAMES MICHAEL FINBERG 415-421-7151 ALTSHULER BERZON LLP SUITE 300 177 POST STREET SAN FRANCISCO, CA 94108 PIPER HOFFMAN, ESQUIRE OUTTEN & GOLDEN, LLP 3 PARK AVENUE 29TH FLOOR NEW YORK, NY 10016 212-245-1000 EVE HEDY CERVANTEZ 415-421-7151 ALTSHULER BERZON LLP SUITE 300 177 POST STREET SAN FRANCISCO, CA 94108 ADAM T. KLEIN, ESQUIRE 212-245-1000 OUTTEN & GOLDEN LLP 29TH FLOOR 3 PARK AVENUE NEW YORK, NY 10016 JUSTIN M. SWARTZ, ESQUIRE 212-245-1000 OUTTEN & GOLDEN, LLP 3 PARK AVENUE 29TH FLOOR NEW YORK, NY 10016 212-245-1000 HEATHER HUYNH WONG, ESQUIRE 415-956-1000 LIEFF CABRASER HEIMANN & BERNSTEIN, LLP EMBARCADERO CENTER WEST 275 BATTERY STREET SAN FRANCISCO, CA 94111-3339 MARGARET BENAY CURTIS-BAUER PLAINTIFF - APPELLEE

Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone:

ELIZABETH A. ALEXANDER, ESQUIRE 615-313-9000 KELLY M. DERMODY 415-956-1000 JAMES MICHAEL FINBERG 415-421-7151 PIPER HOFFMAN, ESQUIRE EVE HEDY CERVANTEZ 415-421-7151 ADAM T. KLEIN, ESQUIRE 212-245-1000 JUSTIN M. SWARTZ, ESQUIRE 212-245-1000 JONATHAN GLOVER APPELLANT ERIC SATORU OTO 213-749-7540 LAW OFFICES OF ERIC S. OTO 1111 SOUTH GRAND AVENUE SUITE 517 LOS ANGELES, CA 90015 MARY STOWELL 312-431-0888 STOWELL & FRIEDMAN, LTD. SUITE 1400 321 S. PLYMOUTH COURT CHICAGO, IL 60604 SUZANNE ELAINE BISH 312-431-0228 STOWELL & FRIEDMAN, LTD. SUITE 1400 321 S. PLYMOUTH COURT CHICAGO, IL 60604 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 STOWELL & FRIEDMAN, LTD. SUITE 1400 321 S. PLYMOUTH COURT CHICAGO, IL 60604 LATRISSA GORDON APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARILYN WHITE APPELLANT ERIC SATORU OTO 213-749-7540

Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney:

MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 PETER MEME APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARSHELL MILLER APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 JEROME SENEGAL APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MICHAEL BARNETT APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 RONALD MOORE (-: REG. # 74483-011) APPELLANT ERIC SATORU OTO 213-749-7540 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR

Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type:

312-431-0888 ANTHONY BELL APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARY EVANS APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 JANICE GRANT APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARTIN DIXON APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 ERNEST DORSEY APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARK LEWERS APPELLANT

Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney:

ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 MARION TUCKER APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 HUBERT STALLING APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 LANTA EVANS-MOTT APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 CARLTON MCDOWELL APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 SARAH NYAMUSWA APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL

Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Attorney: Attorney Phone: Name: Type: Address:
Attorney: Attorney Status: Name: Type: Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:
Attorney: Attorney Phone: Firm Name: Firm Address:

312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 THERON CYRUS APPELLANT ERIC SATORU OTO 213-749-7540 MARY STOWELL 312-431-0888 SUZANNE ELAINE BISH 312-431-0228 LINDA DEBRA FRIEDMAN, SENIOR 312-431-0888 DENISE WILLIAMS APPELLANT 19207 W. HARBOUR VILLAGE DRIVE NORTHVILLE, MI 48167 DENISE WILLIAMS PRO SE MORGAN STANLEY & CO., INC. DEFENDANT - APPELLEE MARK S. DICHTER 215-963-5291 MORGAN, LEWIS & BOCKIUS LLP 1701 MARKET STREET PHILADELPHIA, PA 19103-2921 JAMES N. PENROD, ESQUIRE 415-442-1000 MORGAN LEWIS & BOCKIUS, LLP SPEAR STREET TOWER ONE MARKET STREET SAN FRANCISCO, CA 94105-1126 REBECCA D. EISEN 415-442-1000 MORGAN LEWIS & BOCKIUS, LLP SPEAR STREET TOWER ONE MARKET STREET SAN FRANCISCO, CA 94105-1126 KENT M. ROGER, ESQUIRE 415-442-0900 MORGAN LEWIS & BOCKIUS, LLP SPEAR STREET TOWER ONE MARKET STREET SAN FRANCISCO, CA 94105-1126 L. JULIUS M. TURMAN 415-442-1000 MORGAN LEWIS & BOCKIUS, LLP SPEAR STREET TOWER 28TH FLOOR ONE MARKET STREET SAN FRANCISCO, CA 94105-1126

Attorney: Firm Name: Firm Address: Firm Phone: Attorney: Firm Name: Firm Address:
ENTRY #: 24
23
22
21

KENNETH J. TURNBULL MORGAN LEWIS & BOCKIUS LLP 101 PARK AVE. NEW YORK, NY 10178 212-309-6000 GREGG PARIS YATES MORGAN LEWIS & BOCKIUS, LLP SPEAR STREET TOWER ONE MARKET STREET SAN FRANCISCO, CA 94105-1126 DOCKET PROCEEDINGS

DATE: 12/01/2009 11/27/2009 11/27/2009
11/25/2009

DESCRIPTION: RECEIVED 10 PAPER COPIES OF OPENING BRIEF [7144022-2] FILED BY THERON CYRUS, LANTA EVANS-MOTT, JONATHAN GLOVER, CARLTON MCDOWELL, PETER MEME, MARSHELL MILLER, SARAH NYAMUSWA, JEROME SENEGAL, HUBERT STALLING AND MARILYN WHITE. ONE COPY TO CASE FILES, THE REMAINDER TO RECORDS. [7148277] (SD)
FILED APPELLANTS' EXCERPTS OF RECORD IN 7 VOLUMES (VOL. 7 ONLY FILED UNDER SEAL WITH DISTRICT COURT ORDER PURSUANT TO CIRCUIT RULE 27-3). SERVED ON 11/25/2009. [7146256] (RT)
FILED CLERK ORDER: THE OPENING BRIEF [7144022-2] SUBMITTED BY THERON CYRUS, LANTA EVANS-MOTT, JONATHAN GLOVER, CARLTON MCDOWELL, PETER MEME, MARSHELL MILLER, SARAH NYAMUSWA, JEROME SENEGAL, HUBERT STALLING AND MARILYN WHITE IS FILED. WITHIN 5 WORKING DAYS OF THE FILING OF THIS ORDER, FILER IS ORDERED TO FILE 10 COPIES OF THE BRIEF IN PAPER FORMAT, WITH A BLUE COVER, ACCOMPANIED BY CERTIFICATION, ATTACHED TO THE END OF EACH COPY OF THE BRIEF, THAT THE BRIEF IS IDENTICAL TO THE VERSION SUBMITTED ELECTRONICALLY. [7144452] (GLS)
SUBMITTED (ECF) OPENING BRIEF FOR REVIEW. SUBMITTED BY APPELLANTS THERON CYRUS, LANTA EVANS-MOTT, JONATHAN GLOVER, LATRISSA GORDON, CARLTON MCDOWELL, PETER MEME, MARSHELL MILLER, SARAH NYAMUSWA, JEROME SENEGAL, HUBERT STALLING AND MARILYN WHITE. DATE OF SERVICE: 11/25/2009. [7144022] (SEB)

20

11/16/2009

FILED CLERK ORDER (DEPUTY

CLERK:LKK)APPELLANT???S MOTION FOR AN

EXTENSION OF TIME TO FILE THE OPENING BRIEF IS

GRANTED. THE OPENING BRIEF IS DUE NOVEMBER 25,

2009. THE ANSWERING BRIEF IS DUE JANUARY 14, 2010.

THE OPTIONAL REPLY BRIEF IS DUE 14 DAYS AFTER

SERVICE OF ANSWERING BRIEF. [7131433] (KKW)

19

11/09/2009

FILED (ECF) APPELLANTS THERON CYRUS, MARTIN

DIXON, LANTA EVANS-MOTT, JONATHAN GLOVER,

LATRISSA GORDON, CARLTON MCDOWELL, PETER

MEME, MARSHELL MILLER, SARAH NYAMUSWA,

JEROME SENEGAL, HUBERT STALLING AND MARILYN

WHITE MOTION TO EXTEND TIME TO FILE OPENING

BRIEF UNTIL 11/25/2009 AT 11:59 PM. DATE OF SERVICE:

11/09/2009. [7124647] (SEB)

18

10/28/2009

FILED ORDER MEDIATION (LJE): THE BRIEFING

SCHEDULE SET ON THE COURT???S ORDER FILED ON

OCTOBER 2, 2009 IS VACATED. THE FOLLOWING

BRIEFING SCHEDULE SHALL GOVERN THIS APPEAL:

APPELLANT SHALL FILE AN OPENING BRIEF ON OR

BEFORE NOVEMBER 13, 2009; APPELLEE SHALL FILE AN

ANSWERING BRIEF ON OR BEFORE JANUARY 4, 2010;

APPELLANT MAY FILE AN OPTIONAL REPLY BRIEF ON

OR BEFORE JANUARY 25, 2010. THE COURT HAS

DETERMINED THAT THIS APPEAL WILL NOT BE

SELECTED FOR INCLUSION IN THE MEDIATION

PROGRAM. ALL FURTHER INQUIRIES REGARDING THIS

APPEAL, INCLUDING REQUESTS FOR EXTENSIONS OF

TIME, SHOULD BE DIRECTED TO THE CLERK???S

OFFICE. APART FROM THE FOREGOING CHANGES, ALL

TERMS OF THE COURT???S ORDER OF OCTOBER 2, 2009

CONTINUE TO APPLY. [7110756] (KKW)

17

10/02/2009

FILED CLERK ORDER (DEPUTY CLERK:AMT): THIS

ORDER AMENDS THE ORDER OF THE COURT FILED

SEPTEMBER 18, 2009 AND VACATES THE ORDER OF THE

COURT FILED SEPTEMBER 30, 2009. THE MOTION OF

MARY STOWELL, LINDA D. FRIEDMAN, AND SUZANNE

E. BISH OF STOWELL & FRIEDMAN, LTD., AND ERIC S.

OTO OF THE LAW OFFICE OF ERIC S. OTO

(COLLECTIVELY ???COUNSEL???) TO WITHDRAW AS

COUNSEL FOR APPELLANT DENISE WILLIAMS IS

GRANTED. THIS ORDER SHALL BE PROVIDED TO

APPELLANT WILLIAMS, 19207 W. HARBOUR VILLAGE

DRIVE, NORTHVILLE, MI 48167; MY4@COMCAST.NET.

THE COURT???S RECORDS SHALL BE AMENDED TO

INDICATE APPELLANT WILLIAMS IS REPRESENTING

HERSELF. THE CLERK SHALL PROVIDE APPELLANT

WILLIAMS WITH A COPY OF THE PRO SE BRIEF FORM

ALONG WITH THIS ORDER. COUNSEL IS REMINDED

THAT THE TYPEFACE OF A MOTION MUST COMPLY

WITH THE REQUIREMENTS OF FEDERAL RULE OF

APPELLATE PROCEDURE 27(D)(1)(E). [7082337] (KKW)

16

09/30/2009

FILED CLERK ORDER (DEPUTY CLERK:AMT): THE

COURT???S SEPTEMBER 18, 2009 ORDER IS VACATED.

[7079497] (KKW)

15

09/18/2009

FILED CLERK ORDER (DEPUTY CLERK:AMT): THE

MOTION OF MARY STOWELL, LINDA D. FRIEDMAN,

AND SUZANNE E. BISH OF STOWELL & FRIEDMAN,

LTD., AND ERIC S. OTO OF THE THE LAW OFFICES OF

ERIC S. OTO (COLLECTIVELY ???COUNSEL???) TO

WITHDRAW AS COUNSEL FOR APPELLANT DENISE

WILLIAMS IS GRANTED. THIS ORDER SHALL BE

PROVIDED TO APPELLANT WILLIAMS, 19207 W.

HARBOUR VILLAGE DRIVE, NORTHVILLE, MI 48167;

MY4@COMCAST.NET. THE COURT???S RECORDS SHALL

BE AMENDED TO INDICATE APPELLANT WILLIAMS IS

REPRESENTING HERSELF. THE AMENDED BRIEFING

SCHEDULE IS AS FOLLOWS: THE OPENING BRIEF IS

DUE OCTOBER 26, 2009; THE ANSWERING BRIEF IS DUE

NOVEMBER 25, 2009; AND THE OPTIONAL REPLY BRIEF

IS DUE WITHIN 14 DAYS AFTER SERVICE OF THE

ANSWERING BRIEF. THE CLERK SHALL PROVIDE

APPELLANT WILLIAMS WITH A COPY OF THE PRO SE

BRIEF FORM ALONG WITH THIS ORDER. COUNSEL IS

REMINDED THAT THE TYPEFACE OF A MOTION MUST

COMPLY WITH THE REQUIREMENTS OF FEDERAL RULE

OF APPELLATE PROCEDURE 27(D)(1)(E). [7067061]

(KKW)

14

09/17/2009

FILED ORDER MEDIATION (LJE): ON SEPTEMBER 16,

2009, A TELEPHONE CONFERENCE WAS HELD WITH

CIRCUIT MEDIATOR LISA J. EVANS. THE BRIEFING

SCHEDULE PREVIOUSLY SET BY THE COURT IS RESET

AS FOLLOWS: APPELLANT SHALL FILE AN OPENING

BRIEF ON OR BEFORE OCTOBER 30, 2009; APPELLEE

SHALL FILE AN ANSWERING BRIEF ON OR BEFORE

DECEMBER 18, 2009; APPELLANT MAY FILE AN

OPTIONAL REPLY BRIEF ON OR BEFORE JANUARY 11,

2010. THE COURT HAS DETERMINED THAT THIS

APPEAL WILL NOT BE SELECTED FOR INCLUSION IN

THE MEDIATION PROGRAM. COUNSEL ARE

REQUESTED TO CONTACT THE UNDERSIGNED SHOULD

CIRCUMSTANCES DEVELOP THAT WARRANT FURTHER

SETTLEMENT DISCUSSIONS WHILE THE APPEAL IS

PENDING. [7064710] (KKW)

13

09/16/2009

FILED (ECF) APPELLANTS MICHAEL BARNETT,

ANTHONY BELL, THERON CYRUS, MARTIN DIXON,

ERNEST DORSEY, MARY EVANS, LANTA EVANS-MOTT,

JONATHAN GLOVER, LATRISSA GORDON, JANICE

GRANT, MARK LEWERS, CARLTON MCDOWELL, PETER

MEME, MARSHELL MILLER, RONALD MOORE, SARAH

NYAMUSWA, JEROME SENEGAL, HUBERT STALLING,

MARION TUCKER AND MARILYN WHITE MOTION TO

WITHDRAW AS COUNSEL. DATE OF SERVICE:

09/16/2009. [7063260] (SEB)

12

06/04/2009

FILED ORDER MEDIATION (LJE): ON JUNE 4, 2009, A

TELEPHONE CONFERENCE WAS HELD WITH CIRCUIT

MEDIATOR LISA J. EVANS. THE BRIEFING SCHEDULE

PREVIOUSLY SET BY THE COURT IS RESET AS

FOLLOWS: APPELLANTS SHALL FILE AN OPENING

BRIEF ON OR BEFORE SEPTEMBER 25, 2009; APPELLEES

SHALL FILE AN ANSWERING BRIEF ON OR BEFORE

NOVEMBER 20, 2009; APPELLANTS MAY FILE AN

OPTIONAL REPLY BRIEF ON OR BEFORE JANUARY 15,

2010.THE COURT WILL INITIATE A FURTHER

ASSESSMENT CONFERENCE BY TELEPHONE ON

SEPTEMBER 16, 2009, AT 11:00 A.M. PACIFIC (SAN

FRANCISCO) TIME. COUNSEL ARE REQUESTED TO

CONTACT THE UNDERSIGNED SHOULD

CIRCUMSTANCES DEVELOP THAT WARRANT FURTHER

DISCUSSIONS PRIOR TO THE NEXT SCHEDULED

CONFERENCE. (KKW)

11

05/08/2009

MAIL RETURNED ON 03/30/2009 ADDRESSED TO ERIC S.

OTO FOR MARION TUCKER, MARILYN WHITE, DENISE

WILLIAMS, RONALD MOORE, MICHAEL BARNETT,

ANTHONY BELL, JONATHAN GLOVER, LATRISSA

GORDON, PETER MEME, MARSHELL MILLER, JEROME

SENEGAL, MARY EVANS, JANICE GRANT, MARTIN

DIXON, ERNEST DORSEY, MARK LEWERS, HUBERT

STALLING, LANTA EVANS-MOTT, CARLTON

MCDOWELL, SARAH NYAMUSWA AND THERON CYRUS,

RE: MARCH 11, 2009 ORDER. RESENDING TO: 1111

GRAND AVE, SUITE 517, LA, CA 9001. (MT)

10

05/08/2009

MAIL RETURNED ON 05/04/2009 ADDRESSED TO ERIC S.

OTO FOR MARION TUCKER, MARILYN WHITE, DENISE

WILLIAMS, RONALD MOORE, MICHAEL BARNETT,

ANTHONY BELL, JONATHAN GLOVER, LATRISSA

GORDON, PETER MEME, MARSHELL MILLER, JEROME

SENEGAL, MARY EVANS, JANICE GRANT, MARTIN

DIXON, ERNEST DORSEY, MARK LEWERS, HUBERT

STALLING, LANTA EVANS-MOTT, CARLTON

MCDOWELL, SARAH NYAMUSWA AND THERON CYRUS,

RE: APRIL 20, 2009 ORDER. RESENDING TO: 1111 GRAND

AVE. , SUITE 517, LA, CA 90017. (MT)

9

04/20/2009

FILED ORDER MEDIATION (LJE): SCHEDULE A FURTHER

PRE-BRIEFING TELEPHONE CONFERENCE ON 06/04/2009

AT 11:00 AM (PACIFIC STANDARD TIME) (KKW)

8

04/13/2009

FILED CERTIFICATE OF RECORD ON APPEAL. RT FILED

IN DC 1/23/09 & 6/27/08 (MT)

7

03/11/2009

FILED ORDER MEDIATION (LJE): ON MARCH 11, 2009, A

TELEPHONE CONFERENCE WAS HELD WITH CIRCUIT

MEDIATOR LISA J. EVANS. THE COURT WILL INITIATE

A FURTHER ASSESSMENT CONFERENCE BY

TELEPHONE ON APRIL 16, 2009, AT 11:00 A.M. PACIFIC

(SAN FRANCISCO) TIME.COUNSEL ARE REQUESTED TO

CONTACT THE UNDERSIGNED SHOULD

CIRCUMSTANCES DEVELOP THAT WARRANT FURTHER

DISCUSSIONS PRIOR TO THE NEXT SCHEDULED

CONFERENCE. (KKW)

6

02/03/2009

FILED ORDER MEDIATION (LJE): SCHEDULE A FURTHER

PRE-BRIEFING TELEPHONE CONFERENCE ON 03/11/2009

AT 11:00 AM (PACIFIC STANDARD TIME); VACATING

PREVIOUSLY ESTABLISHED TIME SCHEDULE. NEW

SCHEDULE TO BE SET BY LATER ORDER. (KKW)

5

12/31/2008

FILED ORDER MEDIATION (EPM): CASE REFERRED TO

MEDIATION FOR ASSESSMENT CONFERENCE ONLY.

TELEPHONE CONFERENCE TO BE ON 02/02/2009 AT 11:00

AM. (PACIFIC STANDARD TIME) (KKW)

4

12/05/2008

FILED (ECF) COURTESY COPY OF TRANSCRIPT

DESIGNATION FORMS. DATE OF SERVICE: 12/05/2008.

[6730837] (SEB)

3

12/01/2008

FILED APPELLANTS MICHAEL BARNETT, ANTHONY

BELL, THERON CYRUS, MARTIN DIXON, ERNEST

DORSEY, MARY EVANS, LANTA EVANS-MOTT,

JONATHAN GLOVER, LATRISSA GORDON, JANICE

GRANT, MARK LEWERS, CARLTON MCDOWELL, PETER

MEME, MARSHELL MILLER, RONALD MOORE, SARAH

NYAMUSWA, JEROME SENEGAL, HUBERT STALLING,

MARION TUCKER, MARILYN WHITE AND DENISE

WILLIAMS CIVIL APPEALS DOCKETING STATEMENT.

SERVED ON 11/20/2008. (GR)

2

12/01/2008

FILED REPRESENTATION NOTICE OF MARY TOWELL,

LINDA D. FRIEDMAN, SUZANNE E. BISH, ERIC S. OTO.

(GR)

1

12/01/2008

DOCKETED CAUSE AND ENTERED APPEARANCES OF

COUNSEL. SEND CADS: NO. THE SCHEDULE IS SET AS

FOLLOWS: DESIGNATION OF RT FOR APPELLANT

MICHAEL BARNETT, ANTHONY BELL, THERON CYRUS,

MARTIN DIXON, ERNEST DORSEY, MARY EVANS,

LANTA EVANS-MOTT, JONATHAN GLOVER, LATRISSA

GORDON, JANICE GRANT, MARK LEWERS, CARLTON

MCDOWELL, PETER MEME, MARSHELL MILLER,

RONALD MOORE, SARAH NYAMUSWA, JEROME

SENEGAL, HUBERT STALLING, MARION TUCKER,

MARILYN WHITE AND DENISE WILLIAMS DUE

12/01/2008. DESIGNATION OF RT FOR APPELLEE

MARGARET BENAY CURTIS-BAUER, DAISY JAFFE AND

MORGAN STANLEY & CO., INC. DUE 12/11/2008.

TRANSCRIPT ORDER FOR APPELLANT MICHAEL

BARNETT, APPELLANT ANTHONY BELL, APPELLANT

THERON CYRUS, APPELLANT MARTIN DIXON,

APPELLANT ERNEST DORSEY, APPELLANT MARY

EVANS, APPELLANT LANTA EVANS-MOTT, APPELLANT

JONATHAN GLOVER, APPELLANT LATRISSA GORDON,

APPELLANT JANICE GRANT, APPELLANT MARK

LEWERS, APPELLANT CARLTON MCDOWELL,

APPELLANT PETER MEME, APPELLANT MARSHELL

MILLER, APPELLANT RONALD MOORE, APPELLANT

SARAH NYAMUSWA, APPELLANT JEROME SENEGAL,

APPELLANT HUBERT STALLING, APPELLANT MARION

TUCKER, APPELLANT MARILYN WHITE AND

APPELLANT DENISE WILLIAMS DUE 12/22/2008.

TRANSCRIPT DUE FOR COURT REPORTER SAHAR

MCVICKAR, COURT REPORTER, COURT REPORTER

DEBRA PAS, COURT REPORTER AND COURT REPORTER

JAMES YEOMANS, COURT REPORTER ON 01/20/2009.

CERTIFICATE OF RECORD DUE 12/29/2008. APPELLANT

MICHAEL BARNETT, APPELLANT ANTHONY BELL,

APPELLANT THERON CYRUS, APPELLANT MARTIN

DIXON, APPELLANT ERNEST DORSEY, APPELLANT

MARY EVANS, APPELLANT LANTA EVANS-MOTT,

APPELLANT JONATHAN GLOVER, APPELLANT

LATRISSA GORDON, APPELLANT JANICE GRANT,

APPELLANT MARK LEWERS, APPELLANT CARLTON

MCDOWELL, APPELLANT PETER MEME, APPELLANT

MARSHELL MILLER, APPELLANT RONALD MOORE,

APPELLANT SARAH NYAMUSWA, APPELLANT JEROME

SENEGAL, APPELLANT HUBERT STALLING, APPELLANT

MARION TUCKER, APPELLANT MARILYN WHITE AND

APPELLANT DENISE WILLIAMS OPENING BRIEF DUE

03/09/2009. APPELLEE MARGARET BENAY

CURTIS-BAUER, APPELLEE DAISY JAFFE AND

APPELLEE MORGAN STANLEY & CO., INC. ANSWERING

BRIEF DUE 04/07/2009. APPELLANT'S OPTIONAL REPLY

BRIEF IS DUE 14 DAYS AFTER SERVICE OF THE

ANSWERING BRIEF. (GR)

 
 United States Court of Appeals, Ninth Circuit. Daisy JAFFE and Margaret Benay Curtis-Bauer, Plaintiffs-Appellees,
v. Jonathan GLOVER, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert Stalling, Lanta Evans-Mott, Carlton McDowell, Sarah Nyamuswa and Theron Cyrus, Objectors-Appellants,
v. Morgan Stanley & Co., Inc., Defendant-Appellee.
No. 08-17599. November 25, 2009.
Appeal from a Decision of the United States District Court for the Northern District of California, No. 3:06-cv-03903-TEH • Honorable Thelton E. Henderson
Brief of Appellants
Linda D. Friedman, Esq., Suzanne E. Bish, Esq., Stowell & Friedman, Ltd., 321 South Plymouth Court, Suite 1400, Chicago, Illinois 60604, (312) 431-0888 Telephone, Attorneys for Objectors-Appellants, Jonathan Glover, et al.
CORPORATE DISCLOSURE STATEMENT
This statement is made pursuant to Fed. R. App. P. 26.1. Objectors-Appellants (hereinafter “Objectors”) are not, do not comprise, and/or are not a part of a corporate entity nor have any parent corporation(s), subsidiaries, or affiliates that have issued shares to the public.
TABLE OF CONTENTS
Corporate Disclosure Statement
Table of Authorities ... iv
Jurisdictional Statement ... 1
Ninth Circuit Local Rule 28-2.6 Statement ... 1
Issues Presented For Review ... 1
Statement Of The Case ... 3
Statement Of Facts And Procedural Background ... 5
I. The Evolution Of Jaffe v. Morgan Stanley Lawsuit From A Gender Class Action To Race Class Action ... 5

II. Plaintiffs' Lack of Involvement In The Settlement Of Their Lawsuit ... 10 III. Negotiations Between The Moore Group and Morgan Stanley ... 12 IV. Procedural Posture And Lower Court Proceedings ... 15 Summary Of Argument ... 20 Standard of Review ... 23 Argument ... 23 I. The Settlement Class Does Not Meet The Certification Requirements Of Rule 23 ... 23 A. The Class Was Not Adequately Represented and Was Denied Due Process ... 23 1. Curtis-Bauer Did Not Adequately Represent the Class. ... 25 a. Curtis-Bauer's Interests Conflict With Those of the Class. ... 26 b. Curtis-Bauer Cannot Represent the Latino Members of the Class. ... 29 c. Curtis-Bauer Lacks Adequate Knowledge to Represent the Class. ... 30 d. Curtis-Bauer Has Demonstrated A Lack of Interest In Performing Her Duties as Class Representative. ... 34 2. The Class Settlement Was Reached Without Client Approval ... 35 B. Curtis-Bauer's Claims Are Not Typical Of Those Of Class Members Because Of Her Special Payment For Non-Class Claims And The Conflict Between African American And Latino Class Members ... 37 II. The Settlement Did Not Meet The Standard For Preliminary Approval ... 39 A. The Record Establishes This Was A Settlement In Search of A Class Representative, Not An Arm's Length Negotiation Between Parties ... 40 B. No Formal Discovery Was Conducted And Morgan Stanley Proved Itself Unreliable By Misrepresenting Its Employment Practices And Failing To Disclose The Nature Of The Moore Group's Claims. ... 42

III. The Settlement Is Not Fair, Adequate or Reasonable ... 44
A. The Settlement Fund Does Not Provide Fair or Adequate Compensation To Class Members Harmed By Morgan Stanley's Race Discrimination ... 44
B. The “Programmatic Relief Is Not Fair or Adequate to Remedy Morgan Stanley's Race Discrimination And Will Serve To Perpetuate and Institutionalize This Discrimination ... 51
IV. The Court Erred in Denying Objectors' Request for Discovery To Assess The Class Settlement And In Reversing Its Own Order For An Evidentiary Hearing ... 54
A. Discovery Would Have Provided Necessary Information To The Class And The Court And Demonstrated That Rule 23 Was Not Met And That The Settlement Was Unfair And Inadequate ... 54
B. An Evidentiary Hearing Was Warranted And Would Have Demonstrated That The Class Was Not Adequately Represented ... 58
Conclusion And Relief Sought ... 59
Certificate of Compliance ... 60
Statement of Related Cases ... 61
Certificate of Service
TABLE OF AUTHORITIES
Cases
Acosta v. Trans Union LLC 243 F.R.D. 377 (C.D. CAL. 2007) ... 58
Albermarle Paper Co. v. Moody 422 U.S. 405 (1975) ... 48
Amchem Products, Inc. v. Windsor 521 U.S. 591 (1997) ... 30
Arreola v. Godinez, 546 F.3d 788 (7th Cir. Ill. 2008) ... 23

Augst-Johnson v. Morgan Stanley Case No. 06-1142 (D.D.C.) ... Passim Bartelson v. Dean Witter & Co. 86 F.R.D. 657 (E.D. Pa. 1980) ... 30, 37 Burkhalter Travel Agency v. MacFarms International, Inc. 141 F.R.D. 144 (N.D. Cal. 1991) ... 27, 32 Chiron Corp. Securities Litigation No. 04-4293, 2007 U.S. Dist. LEXIS 91140 (N.D. Cal. Nov. 30, 2007) ... 35 Dodson v. Morgan Stanley DW, Inc. No. 06-5669, 2007 U.S. Dist. LEXIS 85535 (W.D. Wa. Nov. 8, 2007) ... 45, 54 Domestic Air Transportation Antitrust Litig. 144 F.R.D. 421 (N.D. Ga. 1992) ... 55 EEOC v. O&G Spring 38 F.3d 872 (7th Cir. 1994) ... 48 EEOC/Schiefflin v. MSDW No. 01-8421 (S.D.N.Y.) ... 46 Guenther v. Pacif. Telecom, Inc. 123 F.R.D. 341 (D. Ore. 1987) ... 24 Hanlon v. Chrysler Corp. 150 F. 3d 1011 (9th C. 2008) ... 25 Hemphill v. San Diego Association of Realtors, Inc. 225 F.R.D. 616 (S.D. Cal. 2004) ... 55, 57 In re Cavanaugh 306 F.3d 726 (9th Cir. 2002) ... 34 In re Gen. Motors Corp. Engine Interchange Litig. 594 F.2d 1106 (7th Cir. 1979) ... 23, 55 In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig. 55 F. 3d 768 (3d Cir. 1995) ... 23 In re Quarterdeck Office Systems, Inc. Securities Litigation No. 92-3970, 1993 U.S. Dist. LEXIS 19806 (CD. Cal. Sep. 30, 1993) ... 34 Kayes v. Pacif. Lumber Co. 51 F.3d 1449 (9th Cir. 1995) ... 28 Krim v. PCORDER.Com 210 F.R.D. 581 (2002) ... 31, 35 Lerwill v. Inflight Motion Pictures, Inc. 582 F.2d 507 (9th Cir. 1978) ... 27

Linder v. Litton Systems, Inc. 81 F.R.D. 14 (D. Md. 1978) ... 31 Linney v. Cellular Alaska Partnership 151 F.3d 1234 (9th Cir. 1998) ... 44 Lipuma v. Am. Express Co. 406 F. Supp. 2d 1298 (S.D. Fla. 2005) ... 55 Livingston v. Toyota Motor Sales, USA, Inc. 1995 U.S. Dist. LEXIS 21757 (N. D. Cal. June 1, 1995) ... 39 Lorazepam and Clorazepate Antitrust Litig. 205 F.R.D. 24 (D.D.C. 2001) ... 55 O'Neal v. Wackenhut Servs. Inc. 2006 U.S. Dist. LEXIS 34634 (E.D. Tenn. May 25, 2006) ... 37 Ortiz v. Fibreboard Corp. 527 U.S. 815 (1999) ... 25 Payne v. Travenol Labs., Inc. 673 F.2d 798 (5th Cir. 1982) ... 25, 30, 38 Peregrine Systems, Inc. Securities Litigation No. 02-870, 2002 U.S. Dist. LEXIS 27690 (S.D. Cal. Oct. 9, 2002) ... 25, 28 Phillips v. Netblue Inc. No. 05-4401, 2007 U.S. Dist. LEXIS 11737 ... 24 Reynolds v. Beneficial Nat'l Bank 260 F. Supp. 2d 680 (N.D. Ill. 2003) ... 58 Simer v. Rios 661 F.2d 655 (7th Cir. 1981) ... 44, 56 Staton v. Boeing Co. 327 F.3d 938 (9th Cir. 2003) ... 20, 23, 27, 44 Swift v. First USA Bank No. 98-8238, 1999 U.S. Dist. LEXIS 19474 (N.D. Ill. Dec. 14, 1999) ... 28 Williams v. Pharmacia 137 F.3d 944 (7th Cir. 1998) ... 48 Wolf v. Toyota Motor Sales, USA, Inc. 1997 U.S. Dist. LEXIS 16457 (N.D. CAl. Sep. 24, 1997) ... 39 Wofford v. Safeway Stores, Inc. 78 F.R.D. 460 (N.D. Cal. 1978) ... 31 Zhang v. Am. Gem Seafoods, Inc. 339 F.3d 1020 (9th Cir. 2003) ... 48

Statutues
28 U.S.C. § 1291 ... 1
28 U.S.C. § 1331 ... 1
28 U.S.C. § 1343 ... 1
28 U.S.C. § 1367 ... 1
42 U.S.C. § 200e-5(g)(1) ... 48
42 U.S.C. § 2000e-5(f)(3) ... 1
Section 1981 ... 1, 8, 46, 48
Title VII ... 1, 8, 46
Rules
Fed. R. Civ. P. 23 ... 29, 35
Fed. R. Civ. P. 23(a) ... 37
Fed. R. Civ. P. 23(a)(4) ... 24
Other Authorities
“Morgan Stanley Private Wealth Management Hires Team to Further Develop Latin American Market”, Dated January 22, 2007, http:// www.morganstanley.com/about/press/articles/4281.html ... 38
JURISDICTIONAL STATEMENT
The United States District Court for the Northern District of California (“the District Court”) had jurisdiction over the Title VII, Section 1981, and state law claims brought in the lower court proceeding under 28 U.S.C. § 1331, 1343 and 1367 and 42 U.S.C. § 2000e-5(f)(3). The District Court granted class certification and approved the parties' settlement in an order dated October 22, 2009. Dkt. 249.[FN1] On November 21, 2008, Objectors-Appellants (“Objectors”) timely filed this appeal of the court's final order and judgment and preceding orders. ER 354-55. This Court has jurisdiction to entertain this appeal under 28 U.S.C. § 1291.

FN1. These docket numbers reflect docket entries in the district court case in the matter of Jaffe, et al. v. Morgan Stanley & Co., Inc., Case No. 06-03903 (N.D. Cal.). Docket entries to Jaffe v. Glover v. Morgan Stanley, Case No. 08-17599, shall be herein referred to as “App. Dkt. ___.”
NINTH CIRCUIT LOCAL RULE 28-2.6 STATEMENT
Objectors have no knowledge of any other pending cases before this Court related to the issues herein.
ISSUES PRESENTED FOR REVIEW
1. Whether counsel may negotiate and execute a settlement agreement on behalf of a class of plaintiffs when no lawsuit has been filed, no court has appointed class counsel, and the sole client and putative class representative opposes the settlement.
2. Whether a class of Latinos and African Americans is adequately represented or a conflict exists when the sole class representative, an African American employed for the first month of a five year class period, was solicited to serve as a class representative plaintiff only after a pre-filing settlement was reached and rejected by the original plaintiff and was offered and accepted a payment of $125,000 (many multiples of what any class member will receive from the class fund) to resolve her time-barred non-class claims, and when a single common fund is allocated to class members based on a single formula that disproportionately favors Latino FAs.
3. Whether given its procedural posture and history of negotiations, the settlement of this race discrimination class is fair and adequate when its “centerpiece” is injunctive relief nearly identical to that ordered to resolve a gender discrimination lawsuit and the District Court concedes its monetary relief is “low” compared to the earnings of class members and is based on a calculation that does not value claims that class members must release and damages recoverable as a matter of law.
4. Whether class members are entitled to the discovery and access to evidence submitted under seal and in camera necessary to assess class representation and the adequacy of the class settlement, when the settlement was settled before it was filed, over the objection and without the approval of a class representative who claims she was denied information and input, then ratified by a class member who received a special non-class payment, and the “centerpiece” of the settlement is injunctive relief largely copied and already court-ordered in a gender discrimination lawsuit and monetary relief based on a calculation excluding damages for certain claims released and damages plaintiffs are entitled to as a matter of law.
STATEMENT OF THE CASE
On June 22, 2006, Jaffe v. Morgan Stanley, Case No. 3:06-cv-03903, was filed in the District Court for the Northern District of California as a nationwide gender discrimination class action with Daisy Jaffe as the sole lead plaintiff. Compl. at ¶9, ER 1265. On October 10, 2006, the complaint was amended to add Denise Williams as a lead plaintiff, but the case remained a gender discrimination class action. See First Am. Compl., ER 1244. On August 2, plaintiff filed a motion for leave to amend the complaint and convert the case into a race and color discrimination class action. ER 1213. On the same day, the parties announced they had settled the race and color class claims. Id.
On August 17, 2007, plaintiffs filed their Second Amended Complaint, for the first time alleging classwide claims of race

and color discrimination, and adding named plaintiff Margaret Benay Curtis-Bauer. ER 1185-1186. On October 22, 2007, plaintiff's counsel sought class certification and preliminary approval of the proposed settlement. Dkt. Nos. 87, 88. Plaintiff's counsel did not inform the District Court that Williams had rejected the settlement terms. See Id.
Over twenty class members filed objections to class certification and preliminary settlement approval on November 9, 2007. Dkt. 95. On December 3, 2007, the District Court held a hearing, and afterward requested supplemental briefing by the settling parties about the adequacy of class representation and the terms of the proposed settlement. 12/3/07 Trans. ER 1-103. The District Court declined to accept or consider the Objectors' 15 page brief with additional evidence and law regarding the issues raised by the District Court. See Dkt. 259.
In a February 7, 2008 Order, the District Court granted provisional class certification and preliminary approval of the settlement and ordered notice to the class. ER 321-344. The District Court also denied Objectors' motions for discovery regarding the proposed settlement and for access to documents filed under seal and in camera by plaintiff's counsel. ER 322. By this time, thirty class members had submitted objections to the approval of the settlement. See, e.g. ER 948-974 (letters from Objectors); ER 537-573; 413-18; 465-68 (Declarations of Objectors).
After a fairness hearing, the District Court ordered an evidentiary hearing before the Magistrate Judge to “revisit [the Court's] provisional certification of the class and make further inquiry into whether absent class members have been adequately represented.” ER 222. The court also expressed doubt whether “as a matter of law or fact, there was adequate representation at crucial stages of litigation,” and “whether Miss Curtis Bauer's involvement as a representative was sufficient to cure any due process problems.” ER 317-318.
On July 23, 2008, plaintiff's counsel moved the District Court to reconsider its order for an evidentiary hearing. Dkt. Nos. 225, 226. The District Court granted the motion on October 22, 2008, and simultaneously certified the class and granted final approval to the class settlement. ER 104-129; 219-21. On November 21, 2008, Objectors petitioned this Court for appeal. ER 354-55.
STATEMENT OF FACTS AND PROCEDURAL BACKGROUND
I. Evolution of Jaffe v. Morgan Stanley From A Gender Discrimination Class Action To A Race And Color Discrimination Class Action
On June 22, 2006, two nearly identical gender discrimination class action lawsuits were filed against Morgan Stanley in federal courts. Daisy Jaffe (a Caucasian) sought to represent a nationwide class of female Morgan Stanley Financial Advisors (“FAs”) and Financial Advisor-Trainees (“FA-Trainees”). Compl. at ¶9; ER 1265. Her complaint did not include any individual or class claims of race or color discrimination. Id. Earlier that same day, six plaintiffs had filed a nearly identical putative class action in federal district court in Washington, D.C., Augst-Johnson et al. v. MSDW, Case No. 06-1142 (“Augst-Johnson”). See 1/19/07 Order, Dkt. 67, at 1. The Augst-Johnson lawsuit was filed after nearly eighteen months of settlement negotiations with Morgan Stanley. Id.
On October 12, 2006, the Jaffe complaint was amended to add an additional plaintiff, Denise Williams (an African American), who also sought to represent a class of female FAs. First Am. Compl at ¶1244. As plaintiff's counsel informed the District Court, “the central allegations of the complaint have not changed in any material respect. It remains a national gender discrimination class action challenging compensation and business allocation practices. Besides the new named plaintiff, the only change is that the amended complaint adds overlapping and identical gender claims under Michigan law....” ER 1238. Plaintiff Williams also brought “certain individual race discrimination claims, which” were not “brought on behalf of anyone but Ms. Williams.” Id. Indeed, plaintiff's counsel stated that “[c]ontrary to Defendant's

assertions, the recently-filed Amended Complaint merely adds one plaintiff, who brings certain individual race claims not previously alleged, but does not in any way modify the original allegations ....” ER 1237 (emphasis in original).
In January 2007, the District Court stayed the Jaffe proceedings because of ongoing settlement negotiations in Augst-Johnson. See Dkt. 67. On April 24, 2007, the Augst-Johnson parties moved for preliminary approval of a pre-certification settlement class of female FAs and FA-Trainees and a settlement agreement providing $46 million and programmatic relief to the class. ER 882; 896, Augst-Johnson et al. v. Morgan Stanley Settlement. By stipulation, the Jaffe stay was extended again at least three times, until August 6, 2007. See, e.g., Dkt. 77, at 1, 3; see also Dkt. Nos. 73, 74, 75. The Augst-Johnson court preliminarily approved the settlement on July 17, 2007. ER 1212.
On August 2, 2007, counsel for the Jaffe plaintiffs issued a press release announcing a settlement of unfiled class race and color discrimination claims for 1, 200 African Americans and Latinos as part of their dormant putative gender class action lawsuit. ER 1081. The Jaffe parties claimed to have reached a settlement of these class-wide race and color discrimination claims on August 2, 2007, despite the fact that no class race and color discrimination claims had been filed or prosecuted before August 2, 2007. Dkt. 87. The terms of the settlement were not disclosed. Id. Prior to August 2, 2007, no one informed the Jaffe court or the plaintiff class that the lawsuit was anything but a putative gender discrimination class action lawsuit.
On the same day the settlement was announced, Plaintiff's counsel sought leave to file a Second Amended Complaint that would transform the case from a gender class action to a race and color class action. ER 1213. Plaintiff's counsel sought to add another plaintiff, Margaret Benay Curtis-Bauer (“Curtis-Bauer”), an African American FA who left Morgan Stanley in November 2002, and to add, for the first time, class-wide race and color discrimination claims on behalf of a class of African American and Latino FAs and FA-Trainees from October 2002 to the present.[FN2] See Joint Stipulation Re: Filing of Sec. Am. Cmplt., ER 1208.
FN2. The class period was later defined as October 2002 through December 2007.
The Second Amended Complaint identified a single class that included both African American and Latino members, but both proposed class representatives were African American. For the first time, Ms. Williams was identified as a representative of African Americans (but not Latinos) for purposes of Title VII and Section 1981 claims. ER 1185-1186, counts 1, 2, 3, 4, 6, 8, 9. Curtis-Bauer was identified as a representative of both African Americans and Latinos, but solely for the Section 1981 claims. Id. The Complaint did not identify any Latino putative class representatives. ER 1186. On August 2, the Jaffe parties also informed the Court that the settlement in the Augst-Johnson gender class action had been preliminarily approved, notice had been sent to the class, and a fairness hearing date had been scheduled. ER 1213.
On August 30, 2007, before any further filing in or action by the Jaffe court with respect to the settlement, Morgan Stanley's Human Resources department sent an e-mail to Financial Advisors, entitled “A Message From Human Resources,” informing them of the “settlement of a race discrimination lawsuit filed on behalf of current and former African American and Latino” FAs and FA-Trainees. ER 1084. According to the e-mail, “details of the settlement will be made public upon the filing of the settlement papers with the U.S. District Court for the Northern District of California shortly.” Id. Morgan Stanley anticipated “a number of inquiries from FAs regarding participation in this settlement,” directed all such “inquiries to the attorneys who filed the case,” and provided full contact information for three sets of plaintiff's counsel. Id.
The Augst-Johnson settlement was approved by the D.C. Court on October 26, 2007. See e.g. ER 938. Days before, on October 22, 2007, plaintiff's counsel sought Class Certification and Preliminary Approval of the Jaffe proposed settlement. Dkt. Nos. 83, 85. The Jaffe proposed settlement included a fund of $16 million (to fund payments to class members, to the named plaintiff, for attorneys' fees, costs, and settlement expenses) and programmatic relief nearly

identical to that established by the Augst-Johnson gender class action settlement. Dkt 87-2 at 52 (Stlmt. at 36), ER 1106-19.
Named Jaffe plaintiff Denise Williams objected to the terms of the Jaffe race and color settlement and refused to serve as a class representative for African Americans and Latinos; she informed counsel of her intent to opt out and pursue her own discrimination claims. See Dkt. 87 at 2, n. 2. As a result, the sole representative of the class was Curtis-Bauer, an African American woman who was employed by Morgan Stanley for only the first month of the 5-year class period. See Jaffe Sec. Am. Cmplt., at 5.
II. Plaintiffs' Lack of Involvement In The Settlement Of Their Lawsuit
Morgan Stanley and plaintiff's counsel reached a settlement on July 23, 2007 during the final day of mediation, but no class representative or member knew of or consented to the terms. ER 850; ER 1374.
On July 30, 2007, Williams's lawyers e-mailed her a draft Second Amended Complaint that identified Williams as the only representative of the class of African Americans and Latinos. ER 420-421. After Williams received and reviewed the draft complaint, she informed her lawyers that she would not serve as a class representative for Latinos because she believed she had insufficient knowledge of the experiences of Latino FAs and believed that the two groups' interests were not aligned.[FN3] ER 415 at ¶17. Thereafter, the lawyers attempted to locate another class representative. Williams Dec. at ¶8, ER 1345; Dermody Dec. at ¶13, ER 1375. Indeed, on August 1, the day before the settlement was announced and the Second Amended Complaint filed, plaintiff's attorneys contacted Morgan Stanley FA and manager Mary Evans (Moore group member, see below) and others about the case. ER 1061-1062.
FN3. In response to Williams' refusal, the complaint was later re-drafted to eliminate Williams as a class representative for “minorities” and to limit her role as a representative for African American FAs. Compare ER 1185-1186, to ER 425.
Within a day or two, Williams's lawyers told her that they “had found someone else” to represent Latinos. ER 415. Thus, the Second Amended Complaint named Williams a class representative for an “African American class,” while Curtis-Bauer was added as a plaintiff and class representative for the “minority” class, which also included Latinos. See e.g. ER 1185-86.
Denise Williams did not participate in the negotiations of the settlement of the lawsuit that bore her name, and she rejected its terms. ER 416 at ¶10. Williams was not invited to attend any mediation sessions or allowed to participate in the negotiations of the class settlement. ER 414 at ¶5. Indeed, no class member attended any of the mediations or negotiation sessions that resulted in the settlement. ER 849-850.
As of August 2, 2007, Williams was not aware of the terms of any class settlement with Morgan Stanley. ER 415 at ¶ 6. Williams was also not aware of the participation of Curtis-Bauer, whom she has never met. Id.
Curtis-Bauer only became involved in the litigation after a settlement was reached, and her role was admittedly very limited. See, e.g., ER 517-35. On November 27, 2007, Curtis-Bauer spoke by telephone with Mary Evans, whom she considered a friend and had known for over ten years. ER 521-22. During two calls, Curtis-Bauer told Evans that an attorney from Lieff Cabraser called and pressured her to participate in the Jaffe lawsuit and told her she only had three days to file, or words to that effect. ER 523-24. Curtis-Bauer admitted that she was torn about her participation in the lawsuit because she did not believe the settlement went “far enough” to remedy Morgan Stanley's discrimination, a

sentiment she said she had shared with her lawyers. ER 524. Curtis-Bauer also told Evans that she thought the lawsuit only covered Morgan Stanley employees who worked in California. ER 523.
Curtis-Bauer gave her home phone number to Evans and asked that other members of the Moore Group call her, which a few did. Curtis-Bauer made the same admissions to Moore Group members Brian Roy and Maurice Mabon about her late involvement and how she became involved in the lawsuit. ER 517-19; 532-35. Curtis-Bauer told both men that she did not want to be an active participant but had agreed to lend her name to the lawsuit, or words to that effect. ER 519; 534 at ¶5f. Roy and Mabon attended the District Court's December 3, 2007 hearing, and Roy testified to the admissions made during his conversation with Curtis-Bauer. 12/3/07 ER 51-54. Curtis Bauer did not attend any of the court proceedings in this case, including the fairness hearing to approve the settlement. See generally 12/3/07 Tr.; ER 1-103; 6/16/08 Tr.; ER 236-320.
III. Negotiations Between The Moore Group and Morgan Stanley
On August 6, 2006 - nearly a year before Jaffe class counsel announced the existence and settlement of their new class race discrimination claims - a large group of African American current and former Morgan Stanley FAs (the “Moore Group”) informed the firm of their individual and class claims of race discrimination arising from Morgan Stanley's “nationwide pattern and practice of intentional race discrimination ... against African American Financial Advisors” and “employment practices that have a disparate impact on African Americans.” ER 1141.
The Moore Group indicated its willingness to assist Morgan Stanley in addressing its systemic race discrimination and in exploring the possibility of resolving their individual and class claims without full-blown litigation. ER 950-951, 954, 963, 966-67, 971. The fourteen members of the Moore Group represented a broad cross section of Morgan Stanley employees, including current and former Morgan Stanley FAs of varying levels of production and tenure, applicants and producing managers. ER 1158-63; ER 548 at ¶15; ER 561-62 at ¶24. Members of the Moore Group had worked at over ten different Morgan Stanley offices across the country for a number of different managers. Id. Collectively, the Moore Group had a wealth of knowledge about the Firm and the manner in which its policies and practices operate to disadvantage and exclude African Americans, and how to address these shortcomings. ER 549 at ¶16. Morgan Stanley claimed to be interested in proactively addressing its problems and entered into tolling agreements with the Moore Group's members so the parties could attempt to address these issues. See, e.g. ER 1150-1152.
On December 14, 2006, counsel for the Moore Group met with lawyers for Morgan Stanley in New York, including Jaffe and Augst-Johnson counsel Mark Dichter, in New York. Moore Compl, ER 1163-64 at ¶26. Additionally, between April 24, 2007 and June 26, 2007, the Moore Group mediated with Morgan Stanley representatives in Chicago and Washington D.C. regarding the systemic obstacles and patterns of discrimination facing African Americans at Morgan Stanley with the assistance of a well-respected professional neutral, Linda Singer. See, e.g. ER 547 at ¶9; ER 560 at ¶16.
Morgan Stanley led the Moore group to believe that the firm was interested in improving the condition of African Americans by reforming the policies, practices and hostile culture that disadvantaged African Americans and instituting meaningful, company-wide relief for African Americans. ER 951, 963, 966, 971. After Morgan Stanley settled the Augst-Johnson gender case, however, it began negotiating with the Jaffe lawyers to settle a yet unfiled class race discrimination claim as part of their dormant putative class action gender discrimination lawsuit. Mr. Dichter did not inform counsel for the Moore Group of its negotiations with the Jaffe plaintiff's counsel regarding class race discrimination claims until August 1, 2007, the day before the settlement was announced.
Due to the manner in which the Jaffe settlement was converted from a gender class and Morgan Stanley's conduct during their negotiations, the Moore Group was concerned that the Jaffe settlement would not benefit the putative class of African Americans. ER 951-952; 958; 966; 969; 971-73. None of the Moore Group were consulted during negotiation

of the claims of an entire class of African Americans or in crafting appropriate relief. ER 849-850. After learning of Morgan Stanley's duplicity, counsel for the Moore Group shared their concerns with counsel for the plaintiffs.
IV. Procedural Posture And Lower Court Proceedings
After learning of the proposed settlement, a group of over twenty class members (who ultimately grew to nearly thirty) sought to inform the District Court of their objections to the terms of the settlement and how it was reached and to gain additional information. See Dkt 95.
The Objectors filed objections to the certification of a class and preliminary approval of the proposed settlement because: the class was not adequately represented by an informed, conflict-free representative; the claims of the proposed class representative were not typical of those of the class; and the class settlement was not the result of informed, arms'-length negotiations. Id. The Objectors argued that the proposed settlement did not provide fair and adequate monetary or injunctive relief. Id. The Objectors also argued that the injunctive relief would actually harm African American class members and would make Morgan Stanley's discriminatory policies nearly impossible to challenge in the future. Id.
On December 3, 2007, the District Court held a preliminary hearing, during which it explained its own concerns with the proposed settlement, including Curtis-Bauer's adequacy and the large payment she was to receive, the terms of the proposed settlement, including Latinos and African Americans in the same lawsuit. ER 5-8.
The hearing was attended by counsel for the parties and for the Objectors. In addition, four of the Objectors, one current Morgan Stanley FA and three former Morgan Stanley FAs, traveled at their own expense to San Francisco from Chicago, Illinois and Los Angeles prepared to testify, explain the flaws of the settlement, and answer the Court's questions. See ER 548 at ¶13; ER 561 at ¶22; ER 38-50. The class representative, Curtis-Bauer, did not attend the hearing. Id.
The Court permitted testimony of two of the Objectors, Marion Tucker, a successful independent FA terminated by Morgan Stanley after a seven year career, and Brian Roy, a former Morgan Stanley FA and manager also terminated by Morgan Stanley. ER 38-54. Among other things, Mr. Tucker described his own experience, including his group's good-faith negotiations with Morgan Stanley that turned out to be a ruse, explained some of the shortcomings of the settlement, and testified that the fundamental problem facing the African American FAs was teams. Mr. Tucker was sharply questioned by the District Court.
Mr. Roy testified to his conversation with the sole class representative, Margaret Benay Curtis-Bauer. ER 51-54. The three Objectors who had spoken with Curtis-Bauer sought to testify or submit declarations regarding their separate conversations with Curtis-Bauer, during which she told them of her late involvement and recruitment by attorneys to the litigation, her own reservations regarding the settlement, her very limited involvement or interest with the settlement, and that she had not been an active participant and didn't want to be actively involved. See, e.g. ER 517-535. Curtis-Bauer told Ms. Evans that she did not understand that the settlement affected FAs outside California and that she had serious reservations about its efficacy. ER 522 at ¶6a; 524 at ¶6g. The District Court asked the Objectors for legal authority regarding why these hearsay statements should be admitted, which they provided after the hearing. See Dkt. 119.
The Objectors requested limited discovery to fully assess the terms of the settlement; to provide information essential to the court as part of its decision regarding class certification and the settlement; and to enable class members to consider their options and make informed decisions about the proposed settlement. See generally Dkt. 129. The Objectors sought discovery regarding the manner in which the settlement was negotiated, the terms of the programmatic relief, the materials that plaintiff's counsel had filed under seal, and workforce data in order to analyze and present

information regarding the conflict between African Americans and Latinos and a reasonable damages measure. See Id.
On December 12, 2007, the District Court issued an order accepting most of the parties' arguments in support of the settlement but did not grant preliminary approval, noting that some of the concerns it raised at the hearing were not assuaged. ER 346. The court therefore requested supplemental briefing and additional information in support of the settlement about (1) “how it can judge Curtis-Bauer's adequacy as a representative ... where Curtis-Bauer is receiving a significant additional payment in the form of settlement of her non-class claims, and she is relatively new to the suit,” (2) the value of the programmatic relief, and (3) plaintiff's computation of losses to the class. ER 347, 351-352.
The Objectors sought leave to file instanter a 15 page submission addressing these questions and providing new evidence and law. The District Court denied the Objectors' motion for leave to submit a supplemental brief and warned of sanctions if the Objectors filed further submissions. ER 321. The District Court accepted the parties' submissions, however, which consisted of additional declarations and additional information filed under seal that was not available to the Objectors and the putative class.
On February 7, 2008, the District Court issued an order certifying the class, preliminarily approving the settlement, and denying Objectors any of the discovery they sought on behalf of the class or access to any documents filed under seal. ER 329.
At the final approval stage, 24 class members opted out of the settlement and 9 remained in but filed objections. ER 112. One of the opt-out Objectors was Denise Williams, the sole named plaintiff at the time the settlement was negotiated. Williams submitted a declaration that described her lack of involvement in negotiating the settlement and objection to its terms, among other things. ER 413-418.
After extensive argument at the fairness hearing, the District Court ordered an evidentiary hearing into adequacy of representation. ER 222-235. The District Court determined that the question of whether “the Settlement suffered from lack of adequate class representation” was a mixed question of law and fact. Id. at 11-12. Class counsel filed a motion for reconsideration, submitting various documents under seal and in camera.
On October 22, 2008, the District Court reconsidered and vacated its order for an evidentiary hearing, certified the class, and issued final approval of the class settlement. The court acknowledged that “[t]he unfortunate and likely unique procedural history of this case (such as simultaneous expansion of the claims and settlement, and Curtis-Bauer's late involvement) had already raised hard questions...” ER 107.
The Objectors filed their notice of appeal of the District Court's rulings on November 21, 2008. ER 354-55.
SUMMARY OF ARGUMENT
Courts uniformly hold that pre-certification class settlements must be reviewed under heightened scrutiny. See, e.g., Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). The facts of this case underscore the wisdom of this precedent and highlight the dangers present in pre-filing class settlements. Among other issues, this case raises the important legal question of whether pre-filing, without court involvement and appointment of class counsel, a class settlement may be reached when the only class representative rejects the proposed agreement. The unusual procedural and factual posture of this case are undisputed:

• The Jaffe case was a dormant gender discrimination class action converted to a race and color discrimination class action more than one year after filing and only after it lost the right to proceed to an identical gender class action filed on the same day;
• The case was settled before it was filed as a race discrimination class action and before any discovery occurred;
• No class member approved of the settlement before it was reached;
• No class member attended mediations or meaningfully participated in the settlement negotiations;
• Morgan Stanley sought out and chose to negotiate with Jaffe counsel rather than with a group of fourteen current and former Morgan Stanley FAs and managers alleging systemic race discrimination and with whom it was simultaneously negotiating;
• Former named plaintiff and class representative Denise Williams rejected the settlement after learning of its terms, refused to serve as a class representative and opted out of the lawsuit in order to pursue her individual race discrimination claims;
• After Williams objected, class counsel sought to locate another class member to serve as a class representative;
• The sole class representative, Margaret Benay Curtis-Bauer (“Curtis-Bauer”), was only contacted after the settlement was reached and days before the settlement was announced;
• Curtis-Bauer was last employed by Morgan Stanley in November of 2002; thus she worked for the Firm for only the first month, at most, of a class period that exceeds five years;
• Curtis-Bauer will receive payments of $25,000 as a class bonus and $125,000 for racial harassment “non-class claims” that she did not previously pursue and are time-barred;
• Curtis-Bauer is serving as the fiduciary of a class of 1,300 African-Americans and Latinos; she is not Latino, indeed, the Jaffe settlement binds and releases the claims of Latinos, but no Latinos participated as a plaintiff, class representative, or in the negotiations of the settlement;
• Including Denise Williams, well over thirty class members expressed dissatisfaction with the Jaffe settlement, including twenty-four class members who opted out and nine who objected.
Based on the record and as explained herein, the sole class representative, Curtis-Bauer, is not an adequate representative because of her late and limited role in these proceedings, her conflict of interest with the class based on the additional payments of $150,000 she will receive from the common fund in exchange for serving as class representative and ratifying the settlement after it was reached, and lack the knowledge or willingness to serve as an informed and engaged class representative. Williams was not permitted to adequately represent the class because an agreement was reached without her knowledge or consent. As a result, the class should not have been certified, and there was no need to consider the proposed settlement.

The Objectors also submit that the settlement resulting from this lack of meaningful class representation is not fair, reasonable and adequate to class members, particularly under the heightened standard of review applied to pre-certification class settlements. The District Court concedes the $16 million common fund is “low” in light of the earnings of class members. Moreover, the programmatic relief offered as the centerpiece of the lawsuit is largely a duplication of the injunctive relief ordered by a gender class action settlement and so cannot serve as consideration for this lawsuit and fails to reform the unique obstacles faced by African American class members at Morgan Stanley.
Finally, because the Jaffe lawsuit was settled before it was filed, no discovery occurred, and class members and the District Court lacked the objective information typical in order to evaluate the representation of the class and terms of the settlement. The District Court's decision to deny the Objectors' motion for discovery and access to information submitted in support was erroneous, as was its reversal of its own ruling ordering an evidentiary hearing into class representation issues. These rulings denied the class and the District Court information necessary to fairly evaluate the adequacy of the class representation and of the settlement.
STANDARD OF REVIEW
The standard of review in evaluating a decision on class certification, and whether a class settlement is fair and adequate, is abuse of discretion. Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003) In Re GM Corp. Engine Interchange Litigation, 594 F.2d 1106, 1119 (7th Cir. 1979). Underlying rulings, questions of law, and applications of law to fact are reviewed de novo. Harper v. Sheriff, No. 08-3413, 2009 U.S. App. LEXIS 20057, *5 (7th Cir. Sept. 8, 2009); Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. Ill. 2008).
ARGUMENT
I. The Settlement Class Does Not Meet The Certification Requirements Of Rule 23
Rule 23 governs the rights and obligations of parties who desire to bind not only themselves but also to resolve the claims of others. To approve a precertification class settlement, therefore, a court must first ensure that the proposed class meets all of the requirements for Rule 23 certification. In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 794 (3d Cir. 1995). The settlement class should not have been certified because it was not adequately represented by a class representative with claims typical of the class.
A. The Class Was Not Adequately Represented and Was Denied Due Process
A class action may be maintained only if “the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement is “essential to meet due process standards, [and] must be satisfied at all stages of a class action, because the final judgment in a class action is binding on all those whom the court determines are members of the class.” Newberg on Class Actions, Sect. 3:21. “The importance of determining adequate representation cannot be understated. The rule that the representative must fairly and adequately represent the class is one of constitutional magnitude.” Guenther v. Pacif. Telecom, Inc., 123 F.R.D. 341, 344 (D. Ore. 1987). “A class action representative serves as a fiduciary to advance and protect the interests of those whom he purports to represent; their interests are entrusted to the fiduciary's diligence and successful protection of the class depends upon the named plaintiff.” In re: Peregrine Sys. Sec. Litig., Civil No. 02cv870-J, 2002 U.S. Dist. LEXIS 27690, *37-38 (S.D. Cal. 2002). Basic notions of fairness and justice dictate that absent class members have an effective voice in proceedings that may extinguish their claims. Id.

Due process “requires that the named plaintiff at all times adequately represent the interests of the absent class members.” Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985) (emphasis added); Dkt. 206 at 4. In a settlement context, courts are bound to protect the interests of absent class members and must apply heightened scrutiny and attention to class certification requirements, where, as here, the parties reach settlement without adversarial class certification proceedings. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 857 n.31 (1999) (“named representatives were not even ‘named’ [until] after the agreement in principle was reached . . . and they then relied on class counsel in subsequent settlement negotiations”); Dkt. 206 at 6.
1. Curtis-Bauer Does Not Adequately Represent The Class
Curtis-Bauer could not and did not adequately represent the class. In order to be considered adequate, a class representative must meet two fundamental requirements. First, her own interests must present neither an actual nor a potential conflict with those of the class. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 2008) (“Examination of potential conflicts of interest ... is especially critical when the class settlement is tendered along with a motion for class certification.”); see also Payne v. Travenol Labs., Inc., 673 F.2d 798, 810 (5th Cir. 1982) (“a putative representative cannot adequately protect the class if his interests are antagonistic to or in conflict with the objectives of those he purports to represent.”). Second, she must be willing and able to fulfill her fiduciary obligations to the class. Hanlon, 150 F.3d at 1020; In Re Penegrine, 2002 U.S. Dist. LEXIS 27690, *37. Curtis-Bauer cannot and did not meet these requirements for at least four reasons. First, Curtis-Bauer's personal interests, including the special payment to her of $125,000 for non-class, time-barred claims, create at least the appearance of a conflict with the interests of the class she purports to represent. Second, Curtis-Bauer is African American, not Latino, and therefore cannot adequately represent the particular interests of Latino class members. Third, Curtis-Bauer was employed for only the first month of the five-year class period, and she lacks adequate knowledge of the discriminatory practices challenged by the class. Fourth, Curtis-Bauer has demonstrated no willingness to fulfill her fiduciary obligations to the class.
a. Curtis-Bauer's Interests Conflict With Those Of The Class
Curtis-Bauer labors under an actual, and apparent, conflict of interest with the class she purports to represent. During the “no more than a week” of her “direct contributions to the [settlement] negotiations” (ER 774-775) Curtis-Bauer managed not only to ratify the common fund to compensate class members, but also to secure for herself a special payment of $125,000 for her “non-class claims.” The remaining class members, on the other hand, will receive an average of $12,000. ER 117. In addition, Curtis-Bauer's special payment is to be paid from the common fund, thereby reducing class members' recovery for class claims, even though the special payment is for “non-class claims.”
This special payment alone, without more, raises serious questions about Curtis-Bauer's adequacy as a class representative. In this settlement, however, there is more. Curtis-Bauer has not worked at Morgan Stanley since November 2002. Her discrimination claims expired four years later, in November 2006. Yet Curtis-Bauer stands to recover a special payment more than ten times greater than the recovery for other class members, despite the fact that her claims - unlike theirs - are time-barred. The size and nature of the additional relief granted to Curtis-Bauer in exchange for her after-the-fact ratification of the settlement precludes a finding of adequacy.
A class representative must not have interests antagonistic to or conflicting with the interests of unnamed class members. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978). In “considering the involvement and knowledge of a prospective class representative, the Court must feel certain that the class representative will discharge his fiduciary obligations by fairly and adequately protecting the interests of the class.” Burkhalter Travel Agency v. MacFarms International, Inc., 141 F.R.D. 144, 154 (N.D. Cal. 1991).

In Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003), this Court recognized that named plaintiffs have a stronger incentive to maximize their own recovery than to maximize the shared fund from which unnamed plaintiffs' awards will be drawn. Id. at 977. Where named plaintiffs receive special awards “in addition to their share of the recovery, they may be tempted to accept suboptimal settlements at the expense of class members whose interests they are appointed to guard.” Id at 977. Therefore, where, as here, the sole class representative negotiated a large and unique benefit for herself, it does not appear that the settlement is fair to all members of the class. Id. at 978 (reversing settlement approval because of “very large differential in the amount of damages awards between the named and unnamed class members”).
Furthermore, even if Curtis-Bauer has no actual conflict of interest, she cannot be an adequate representative if the facts create even an appearance to the contrary. A proposed class representative is inadequate under Rule 23 if the circumstances suggesting a conflict of interest create “the appearance that [she is] not able to adequately investigate and prosecute [the] action on behalf of the absent members of the class.” In re Peregrine Systems, Inc. Securities Litigation, No. 02-870, 2002 U.S. Dist. LEXIS 27690, *37 (S.D. Cal. Oct. 9, 2002). The disproportionately large special payment to Curtis-Bauer relative to her small possible recovery under the class fund formula, in combination with her eleventh-hour assumption of the named plaintiff role, creates the appearance of a conflict of interest and bar Curtis-Bauer from representing the class. See Kayes v. Pacif. Lumber Co., 51 F.3d 1449, 1465 (9th Cir. 1995) (affirming the District Court's disqualification of class counsel due to the appearance of divided loyalties); Swift v. First USA Bank, No. 98-8238, 1999 U.S. Dist. LEXIS 19474, at *17 (N.D. Ill. Dec. 14, 1999) (proposed class representative was inadequate because she was “branded with the appearance of, and potential for impropriety, which is the primary” concern of the court, even though the court did not assume that she would “change a mere appearance into an actual occurrence”).
Under the apparent conflict standard, Curtis-Bauer was not an adequate representative because she negotiated a $125,000 payment from the class fund for her “non-class” claims that are plainly time-barred. Without the class action, she would have no potential recovery on her untimely claims. Further, based on a fund allocation formula that is heavily weighted towards tenure, Curtis-Bauer, who was employed by Morgan Stanley for at most one month of the class period, will likely receive a nominal award for her class claim. If Curtis-Bauer had been presented as an advocate for the settlement without the extra $125,000 payment, plaintiff's counsel could have argued that she stood in the shoes of absent class members and made a decision for them that the diversity initiatives should be the centerpiece of the settlement. This did not happen, however. Unlike the class members, Curtis-Bauer was not required to balance her low recovery from the common fund against the benefits of the diversity initiatives, because she was guaranteed a large payment for her non-class, time-barred claims. This special payment is emblematic of the appearance of divided loyalties that is prohibited by Rule 23.
b. Curtis-Bauer Cannot Represent the Latino Members Of The Class
Curtis-Bauer cannot possibly represent Latino class members. She is African American, not Latino. In this case, it was essential that African Americans and Latinos have their voices heard and their interests and experiences represented at the negotiating table while monetary and programmatic relief were being designed. Given their unique experiences at Morgan Stanley (See e.g. Carter decl., ER 537-540), Latinos and African Americans were entitled to have their own representatives explain their respective concerns to class counsel and negotiate for their own, narrowly tailored relief. The lack of adequate representation by both Latinos and African Americans led to the unsound decisions to include both groups in a single class, rather than subclasses; to allocate a single common fund using a single, inequitable formula; and to establish programmatic relief not tailored to address the needs of each group. Thus, the absence of a Latino class representative in this case precludes a finding of adequacy of representation. Payne v. Travenol Labs., Inc., 673 F.2d 798, 810-11 (5th Cir. 1982)(black males and black females were not interchangeable, so a black female could not be the sole representative for a class including black males); see also Amchem Products, Inc. v. Windsor, 521 U.S. 591, 627 (1997); Bartelson v. Dean Witter & Co., 86 F.R.D. 657, 669 (E.D. Pa. 1980).
c. Curtis-Bauer Lacks Adequate Knowledge to Represent The Class

Curtis-Bauer was employed by Morgan Stanley for only the first month of a class period spanning more than five years, and she had no involvement in the investigation of the discrimination claims. Accordingly, she lacks knowledge of Morgan Stanley's practices during the vast majority of the class period and of the experiences of her fellow class members during that same time. As a result of her limited experience, she lacks sufficient knowledge of current practices necessary to critically assess whether the proposed injunctive relief is adequate to remedy the challenged discriminatory practices. A class representative is “not adequate to undertake the grave fiduciary responsibility of representing any class of victims of defendant's alleged employment discrimination” if she has been long absent from the defendant's employ and lacks knowledge of the practices at issue. See hinder v. Litton Systems, Inc., 81 F.R.D. 14, 19 (D. Md. 1978); see also Wofford v. Safeway Stores, Inc., 78 F.R.D. 460, 487 (N.D. Cal. 1978) (in employment discrimination cases “a court can and should insist on a named plaintiff who takes some active interest and has some ability to contribute to the action.”); Krim v. PCORDER.Com, 210 F.R.D. 581, 587-89 (W.D. Tex. 2002) (denying class certification based on named plaintiffs due to lack of knowledge, involvement and interest in case).
Indeed, Curtis-Bauer has demonstrated an alarming lack of familiarity with this litigation. For example, she informed a class member that the class in this matter was limited to Morgan Stanley Financial Advisors employed in the state of California. ER 522. In a similar case, the proposed class representative was held inadequate because, among other things, he was unsure whether the class would include a nationwide group of plaintiffs or only those in his home state. Burkhalter, 141 F.R.D. at 146. Like the Burkhalter court, the District Court here could not “be certain that [the plaintiff] will adequately represent the proposed class. As plaintiff's counsel would be acting on behalf of an essentially unknowledgeable client, certifying a class . . . would risk a denial of due process to the absent class members.” Id.
The need for a representative with knowledge of existing employment practices and their effect on class members is particularly crucial where, as here, no discovery has been conducted, plaintiff's counsel are relying on data and information selected by the alleged discriminator, and the settlement includes injunctive relief that purportedly would remedy future discrimination. Programmatic relief is the heart of civil rights enforcement, but this relief is severely compromised where the putative class representative lacks the knowledge or ability to fashion appropriate remedial measures to govern the discriminator's future conduct.
The District Court concluded that Curtis-Bauer was an adequate class representative in part because of her claim that she “suggested substantive changes that were ultimately incorporated in the settlement agreement.” ER 327. A closer examination of Curtis-Bauer's claim, however, illustrates her lack of awareness of Morgan Stanley's current practices. Curtis-Bauer claims she had “two suggestions for what [she] thought were important issues for the class that had not been addressed” and that she “confirmed were in the final settlement agreement.” ER 774 at ¶14. These were: First, I suggested that Branch Manager compensation should be affected to ensure compliance with the terms of the settlement because money is what motivates Branch Managers. Second, for accounts where the company does not follow the power ranking due to an “exception,” I suggested that the Branch Manager should be required to give other assets of equal value to the passed over broker to make up for the account that was redistributed. Id.
Morgan Stanley has included diversity-related performance measures in branch manager compensation since well before the filing of this lawsuit, however, so the settlement's vague language regarding manager compensation provides no value to the class. In addition, Curtis-Bauer's “suggestion” regarding power ranking exceptions was a provision included in the Augst Johnson settlement approved one year before the settlement approval in this case. Indeed, the settlement agreements in both cases contain verbatim provisions, neither of them prompted by Curtis-Bauer's suggestion. See Jaffe Settlement at VII.D.3.C (ER 157), and Augst-Johnson Settlement at VII.C.3.c. (ER 887)(both state “An individual financial advisor who does not receive a specific distribution as a result of an exception shall receive additional accounts in the same or subsequent distributions of approximately equal asset value”).
d. Curtis-Bauer Has Demonstrated A Lack of Interest In Performing Her Duties As Class Representative

Curtis-Bauer has exhibited no willingness to fulfill her fiduciary obligations to the class. She admitted to other class members that she had not been an active participant and did not want to be actively involved. ER 519, 526, Dec. of M. Evans, B. Roy, M. Mabon. Further, Curtis-Bauer did not provide the Court with any opportunity to question her about this settlement or her adequacy as a class representative because she elected not to appear before the court at any of the hearings on settlement approval. Curtis-Bauer's statements and lack of involvement in the case provide strong evidence that she is simply a “true ‘stand-in’ part[y], selected by lawyers to fill a required role.” In re Quarterdeck Office Systems, Inc. Securities Litigation, No. 92-3970, 1993 U.S. Dist. LEXIS 19806, *17-18 (C.D. Cal. Sep. 30, 1993).
Despite the competence of class counsel, the class is entitled to an adequate representative who will fulfill her fiduciary duties toward the class. This Court has cautioned that “the court must keep firmly in mind that the inquiry is not into the adequacy or fitness of counsel but into the adequacy of plaintiff.” In re Cavanaugh, 306 F.3d 726, 733 (9th Cir. 2002). Thus, the presence and involvement of competent class counsel during negotiations cannot substitute for the active representation of a named plaintiff. See In re Chiron Corp. Securities Litigation, No. 04-4293, 2007 U.S. Dist. LEXIS 91140 (N.D. Cal. Nov. 30, 2007) (“When class counsel are not effectively monitored by the class representative, the result is indistinguishable from the situation in which an attorney serves as both class counsel and class representative.”).[FN4]
FN4. “Representatives should understand the action in which they are involved, and their ‘understanding should not to limited to derivative knowledge acquired solely from counsel.’ ... The competency of class counsel is not enough on its own; the representatives themselves must be familiar with the case.” Krim, 210 F.R.D. at 587 (citations omitted).
Curtis-Bauer did not monitor counsel's conduct “throughout the litigation,” nor did she play any role in the investigation, litigation, or negotiation of key aspects of the class settlement, including the amount of the common fund and the method of distributing it. These facts provide none of the necessary assurances that Curtis-Bauer fulfilled her fiduciary duties to the class during the most critical phase of this short litigation.
2. The Class Settlement Was Reached Without Client Approval
This case presents a fundamental legal issue: whether due process and Rule 23 authorize lawyers to settle a class action lawsuit that has not been filed, without the consent of a client. The Objectors respectfully suggest that clients are essential to Rule 23 and that the class was irreparably and unconstitutionally short-changed when lawyers negotiated a settlement of class claims without the approval of their only client. To allow otherwise would sanction the wholesale settlement of claims without requiring a bargained-for exchange between the real parties in interest. Worse, it would create an incentive for defendants, in particular employers, to “shop” for class action lawyers in order to cheaply resolve important, valuable civil rights claims and immunize the defendants and their policies in the future.
It is undisputed that when the settlement was reached, no class member or representative knew of or approved its terms. At that time, Denise Williams was the only client and putative class representative, and she learned of the settlement terms after the fact. She objected and informed putative class counsel that she would not serve as a class representative. At that point, counsel had no client and no further authority to act on behalf of the putative class. The Objectors submit that pre-filing and pre-certification, there is no class counsel, there is only counsel for a single plaintiff. Where that plaintiff is not fully informed, and does not approve the settlement once she is informed, counsel is not permitted to enter into an agreement on behalf of a class over that client's objection and go in search of a new plaintiff. Putative class counsel lacked authority to settle class claims when neither their client nor any class member agreed to the terms. The District Court should not have accepted the after-the-fact ratification of the settlement.
Unable to find that Curtis-Bauer alone was an adequate class representative, given her late entry into the case, the District

Court found that the class was adequately represented by both Ms. Williams and Curtis-Bauer. ER 107-108. But neither of them could or did adequately represent the interests of the absent class members in this case. B. Curtis-Bauer's Claims Are Not Typical Of Those Of Class Members Because Of Her Special Payment For Non-Class Claims And The Conflict Between African American And Latino Class Members.
The settlement class does not meet Rule 23(a) typicality because Curtis Bauer's claims are not typical of those of the class for at least two reasons. First, the $125,000 payment that Ms. Curtis-Bauer is receiving from the class fund for her time-barred, non-class harassment claims is many times the average recovery class members will recover for their race discrimination class claims. Ms. Curtis-Bauer's “other” individual claims thus predominate over her race discrimination claims, so they cannot be typical of the class. See, e.g., O'Neal v. Wackenhut Servs. Inc., No. 03-397, 2006 U.S. Dist. LEXIS 34634, at *57 (E.D. Tenn. May 25, 2006) (refusing to certify a class because the named plaintiffs' claims were noticeably weaker than those of most class members and were therefore atypical).
Second, the race discrimination claims of Curtis-Bauer, an African-American, are not typical of the claims of Latino class members. See, e.g., Bartelson v. Dean Witter & Co., 86 F.R.D. 657, 669 (E.D. Pa. 1980) (denying class certification for minority class, white female class representative's claims were not typical of the claims of blacks and other minority groups); Payne v. Travenol Laboratories, Inc., 673 F.2d 798 (5th Cir. 1982).
The District Court found Curtis-Bauer to be a suitable representative for and her claims typical of those of Latinos because plaintiffs alleged that both Latinos and African Americans were subjected to the same discriminatory practices. ER 347-49.
The District Court dismissed out of hand the evidence presented by Objectors of antagonism between African Americans and Latinos on the impact of these practices, among other things. Indeed, class counsel conceded, upon court questioning, that Morgan Stanley's workforce data revealed African Americans suffered worse outcomes than Latinos in representation, compensation and attrition. ER 17. The Objectors submitted expert and class member declarations regarding how Morgan Stanley's challenged policies affected African Americans and Latinos differently and the effect of a single allocation formula from a single fund. See, e.g., ER 505-50; 511-15; 537-39; www.morganstanley.com/about/press/articles/4281.html.
Moreover, although the court was incorrect that Objectors had made “no showing” of a conflict or reasons why Latinos and African Americans should not receive identical treatment or be represented by Curtis-Bauer, the court denied Objectors the discovery they sought to demonstrate this conflict through Morgan Stanley's own policies and workforce data, as well as access to information submitted in camera on this topic. A proper analysis of this data and information would have revealed the divergent experiences of the two groups. Under these circumstances, typicality cannot be met in a single class of Latinos and African Americans.
II. The Settlement Did Not Meet The Standard For Preliminary Approval
To grant preliminary approval, a District Court must determine that a proposed settlement “is based upon findings that (a) the negotiations occurred at arm's length; (b) there was sufficient discovery; (c) the proponents of the settlement are experienced in similar litigation; and (d) only a small fraction of the class objected.” Livingston v. Toyota Motor Sales, USA, Inc., No. C-94-1377, 1995 U.S. Dist. LEXIS 21757, at *24 (N.D. Cal. June 1, 1995), adopted Wolf v. Toyota Motor Sales, USA, Inc., No. C-94-1377, 1997 U.S. Dist. LEXIS 16457, *4 (N.D. Cal. Sep. 17, 1997). The District Court erred in granting preliminary approval of the settlement where the negotiations did not occur at arms' length and no formal discovery took place, resulting in an inadequate and unfair settlement, to which a substantial number, over twenty at the preliminary approval stage, of class members objected. See e.g. ER 38-50; 316; 413-17; 470-73; 537-574; 949-74; 995.

A. The Record Establishes This Was A Settlement In Search of A Class Representative, Not An Arm's Length Negotiation Between Parties.
The record reveals that the settlement was not negotiated by interested, informed parties at arm's length. The Jaffe lawsuit was filed as a class action gender discrimination lawsuit, and converted to a race and color class case only after a competing lawsuit was certified and settled. The Jaffe settlement was announced the same day the parties sought to amend the complaint to first include class claims of race and color discrimination, some 14 months after the lawsuit was originally filed.
None of the putative class members or their representatives (other than counsel) participated in any negotiations of the Jaffe settlement, or authorized the lawyers' agreement with Morgan Stanley before a settlement was reached. When Denise Williams learned of the settlement reached by her lawyers, she objected, then counsel went in search of a new class representative to ratify the agreement. ER 1375. Williams' decision to relinquish her class representative status, lodge objections and opt out of her own lawusuit, foregoing a $125,000 guaranteed payment, casts doubt on the fairness of the negotiations and their result.
Curtis-Bauer, added after Williams received the draft complaint on July 30, played no role in the negotiations resolving the claims of the class she seeks to represent or the agreement reached July 23. And no Latino putative class member participated in the case at any time.
Other putative class members, including the sole class representative, were not contacted until the deal was done. For example, on August 1, 2007, the night before the Jaffe settlement was announced, Mary Evans, a Financial Advisor and Assistant Branch Manager of the Menlo Park Morgan Stanley office, received a phone call from a Lieff Cabreser attorney who appeared to be attempting to solicit her as a named plaintiff in the Jaffe case. ER 1061-1062. Curtis-Bauer, like Ms. Evans, was contacted only after the settlement was reached by Morgan Stanley and counsel for the Jaffe plaintiffs.
Morgan Stanley's decision to negotiate with the Jaffe plaintiffs' counsel rather than the Moore Group is unsurprising. Morgan Stanley was not interested in a fair resolution negotiated at arm's-length with actual class members that would benefit African Americans and result in meaningful change at the Firm. Morgan Stanley was well aware that the Moore group would not agree to one-sided terms and insufficient relief for African Americans, nor would they agree to release the rights of Latinos, and would litigate rather than accept relief that would not benefit other African Americans but would restrict their rights. Thus, Morgan Stanley therefore offered the Jaffe counsel the option of converting its the gender case into a race class actions ssettlement on virtually identical terms as the Augst-Johnson settlement.
Plaintiffs' counsel relied on Morgan Stanley to garner support for the settlement. After the Jaffe Settlement was reached, Morgan Stanley sent an e-mail to all class member employees with the names, firms and contact information of plaintiffs' attorneys and directed class members to call plaintiffs' counsel with questions.[FN5] ER 1084. The limited support by a few class members after the settlement was reached does not diminish the importance of the lack of class member involvement and approval during the negotiation of the settlement.
FN5. It is hard to imagine another circumstance under which an employer would willingly distribute contact information for three of the largest plaintiffs' law firms to a large group of employees.
After the Objectors objected to the settlement, plaintiffs' counsel continued its search for named class representative plaintiffs. On October 30, 2007, an attorney from Lieff Cabreser contacted class member Marshell Miller and asked whether he would be interested in serving as a class representative and on November 8, 2007, asked whether he would write a letter to the district court supporting the settlement. ER 465-68. Miller was not provided with complete

information or told about the Objectors or that one of the named plaintiffs rejected the settlement. ER 466. Miller declined to serve as a plaintiff and instead objected to the Settlement. ER 467; 971-74.
B. No Formal Discovery Was Conducted And Morgan Stanley Proved Itself Unreliable By Misrepresenting Its Employment Practices And Failing To Disclose The Nature Of The Moore Group's Claims.
The Jaffe Settlement was reached without any formal discovery and without any meaningful involvement of class members. Although the parties contend that Morgan Stanley provided certain information as part of the mediation process, including workforce data, this information was not produced under the Court's discovery rules or made available to class members. When combined with the lack of involvement of class members in the mediation and settlement process, this discovery failed to provide sufficient basis for an appropriate settlement.
Further, it does not appear that Morgan Stanley provided the Jaffe plaintiffs with meaningful information to make decisions on behalf of unnamed class members. For example, Morgan Stanley did not inform plaintiffs or their counsel about the existence of the Moore group or the nature of their claims.[FN6] Morgan Stanley also misrepresented its teaming policies to class counsel, which had a deleterious impact on the settlement. See discussion at IV.B. infra. Morgan Stanley's failure to disclose this information undermines the reliability of any information exchanged informally.
FN6. Objectors accept that class counsel was not aware that Morgan Stanley was negotiating with a large group of current and former African American FAs and managers prior to and during the period in which class counsel was negotiating the Jaffe class settlement. Objectors do not, however, understand why class counsel, after learning of Morgan Stanley's duplicity and that the Moore group had dedicated substantial time and effort to addressing Morgan Stanley's discriminatory policies and culture, would not want to interview and work with the Moore group to understand their experiences and perspectives on the programmatic relief and potentially improve the settlement.
III. The Settlement Is Not Fair, Adequate Or Reasonable
The District Court plays a critical role in ensuring the fairness and adequacy of proposed class action settlements. Thus, a class action settlement may be approved only when the Court finds that that the settlement's proponents have met their burden to show that it is fundamentally fair, adequate, and reasonable. Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 1998). Where a settlement was reached prior to class certification, the court must examine the settlement with special care and skepticism. Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Pre-certification settlements merit heightened judicial scrutiny because the court must protect the interests of class members who are not yet notified of the action and therefore lacked any opportunity to ensure that their voices were heard during negotiations. Simer v. Rios, 661 F.2d 655, 664-66 (7th Cir. 1981). Pre-certification settlements also warrant extra scrutiny because they present unique temptations and opportunities for collusion. See, e.g., In re General Motors Corp., 55 F.3d at 797 (requiring that settlement proponents show that the compromise met a higher standard of fairness where negotiations occurred before certification). Clearly, a settlement reached before a lawsuit was even filed merits the greatest possible judicial care to protect absent class members.
A. The Settlement Fund Does Not Provide Fair or Adequate Compensation To Class Members Harmed By Morgan Stanley's Race Discrimination
The District Court admitted that the Settlement's monetary relief to class members could “undoubtedly be greater” and is “not large considering the incomes involved.” ER 8; 334. Morgan Stanley seeks to release the claims of approximately 1,300 African American and Latino Financial Advisors and Trainees for a settlement fund of $16 million, which will not provide adequate compensation to the victims of the Firm's systemic racial discrimination.

The $16 million fund is substantially less than amounts recovered for class members in other cases in the retail brokerage industry,[FN7] including cases against Morgan Stanley. The Augst-Johnson v. MSDW gender discrimination class action was settled for $46 million. See also EEOC/Schiefflin v. MSDW, Case No. 01-cv-8421 (S.D.N.Y.) (class of 340 women recovered $54 million, with $40 million to be allocated to the class). Indeed, because of the high earnings and earnings potential in the financial services industry, even single plaintiff and non-class discrimination claims have been resolved for significantly higher settlements or resulted in substantial verdicts for discrimination plaintiffs. See e.g. Dodson v. Morgan Stanley, Case No. 06-cv-5669 (W.D.Wa.)($750,000 settlement in single plaintiff sex discrimination case); ER 730, Zubulake v. UBS Warburg LLC, No. 02-1243 (S.D.N.Y. 2005)(jury awarded $29 million in compensatory and punitive damages to equities broker terminated for reporting gender discrimination); ER 728, Sojaji v. Merrill Lynch & Co., (NASD panel awarded $400,000 in compensatory damages and $1.2 million in punitive damages to broker fired because of his race); ER 633-73 (discrimination awards for Merrill Lynch FAs ranging from $210,000 to $2.2 million).
FN7. See, e.g., Cremin v. Merrill Lynch, Case No. 96 C 3773 (N.D. Ill.) (900 claimants recovered over $225 million); Martens et al. v. Smith Barney, Case No. 96 C 3779 (S.D.N.Y.)(over $100 million)
The District Court found the settlement adequate in part because the per class member payouts were comparable in the Augst-Johnson and a more recent Smith Barney sex discrimination settlements. ER 117. But the race and color claims at issue in this lawsuit under Section 1981 have a longer class period and are more valuable than the Title VII gender discrimination claims in those lawsuits because Section 1981 has a longer statute of limitations (four years as compared to Title VII's 300 days) and no cap on compensatory damages. In addition, as class counsel conceded, the outcomes for African Americans at Morgan Stanley are worse than those for Latinos and whites. ER 17.
The inadequacy of the Settlement's financial provisions is also demonstrated by the actions of the named plaintiffs. One of the best tests of the fairness of a proposed settlement is whether the named plaintiffs and class representatives will agree, without added incentives or side-deals, to participate in the settlement on the same terms as other class members. Plaintiff Williams objected to the proposed settlement and concluded it would not provide sufficient relief for her legal claims. She lodged objections with the District Court and opted out of the Jaffe settlement's financial terms in order to individually pursue her claims of discrimination in a separate lawsuit in Michigan. Williams v. Morgan Stanley (E.D. Mich.); ER 413-418; 1344-48. Plaintiff Curtis-Bauer has not been forced to stand in the shoes of the class in order to gauge the fairness of the Settlement, as she will receive an additional $150,000 in payments from the fund that are not available to other class members. Without these additional payments, it is unlikely that Curtis-Bauer would have accepted this Settlement as fair to her or on behalf of absent class members.
The District Court found the monetary relief adequate based on class counsel's representation that the $16 million fund constituted 43% of the “maximum” of $36 million the class could recover if it prevailed on all of the class claims. ER 13,117,333.[FN8] The court reasoned that “a sizeable discount is to be expected in exchange for avoiding the uncertainties, risks, and costs that come with litigating a case to trial.” ER 334; 351. But the common fund is based on a damages calculation that does not measure claims class members must release or damages recoverable as a matter of law. A settlement fund is not adequate if it represents too low a percentage of the recoverable damages such that the risk of litigation does not outweigh the advantages of the settlement.
FN8. Class counsel represented to the court that “if we run the table, we get class cert, we win on liability, we get all of the damages we're seeking we would get about $36 million.” ER 13.
The civil rights laws provide full relief for victims of discrimination, including back pay, front pay, emotional distress, and punitive damages. See e.g. Albermarle Paper Co. v. Moody, 422 U.S. 405, 419 (1975); EEOC v. O&G Spring, 38 F.3d 872, 880 (7th Cir. 1994); Williams v. Pharmacia, 137 F.3d 944, 951-952.

Class counsel undervalued the damages to the class by relying on a compensation shortfall valuation that captured only wage differentials for current employees, thus measuring earnings disparities only for the period during which class members worked at the firm.[FN9] ER 779; ER 511-15. As a result, the damages model does not value class members' front pay losses, or emotional distress damages, which could have been substantial given that Section 1981 has no caps on emotional distress or punitive damages. See Zhang v. Am. Gem. Seafoods, Inc., 339 F.3d 1020, 1044 (9th Cir. 2003); 42 U.S.C. § 200e-5(g)(1)(same).
FN9. Objectors were denied discovery of class counsel's damages model or workforce data so they could prepare their own damages valuation but presented the declaration of statistician Dr. Jerry Goldman, as to the shortcomings of the shortfall analysis. See Goldman Dec. at ER 514-515.
Nor does the shortfall analysis value the claims of class members denied promotions or terminated as a result of discrimination, although they are required to release these claims under the settlement. ER 215. The District Court acknowledges that class members must release claims not measured the shortfall analysis, but claims they are eligible for bonus points in the claims process if they were terminated. ER 121. The weighting for these claims under the settlement formula is quite small compared to the overall point potential, however (see Dkt. 250-3 at 28), and does not address the more fundamental question that the potential recovery figure upon which overall reasonableness of the common fund was judged was undervalued by excluding these damages.
Finally, a single allocation formula for the common fund is unfair because it will lead to inequitable recovery for African American FAs. The Settlement calls for distribution of the common fund to both African American and Latino FAs pursuant to the same allocation formula. In an allocation formula that is based primarily on tenure, earnings and tenure disparities that exist among the two groups render the decision to base their recovery on the same formula wholly unfair given the inequities that will surely result. Again relying on information submitted under seal and not made available to the class, the District Court held that the earnings and other disparities between African Americans and Latinos was “not so great that it would have be unfair or inappropriate to treat them in a similar fashion for monetary relief” or to create a conflict of interest. Dkt. 158 at 13.
The District Court further held that any disparity could be cured through the earnings regression analysis portion of the settlement calculation.[FN10] However, only a small portion of the allocation formula, 15%, is determined based on these disparities. Dkt. 250-3 at 13, ¶8. Thus, although African Americans were harmed the most by Morgan Stanley's discrimination, the terms of the proposed settlement may result in Latino FAs recovering a greater percentage of the common settlement fund and, frequently, larger awards than African American class members.
FN10. The District Court made this fairness determination based on information that was filed in camera, and to which the class did not have access. See Dkt. 158 at 13.
The allocation formula largely rewards longevity and thus disadvantages African Americans, who have a much higher attrition rate than do Latinos. Notice, Dkt. No. 250-3, at 13, ¶ 8. Thus, most African American class members are likely to have worked at Morgan Stanley for far fewer weeks than their Latino counterparts and so will not fare as well in competing for a share of the common fund.
The substantial damages that result from termination are often career-ending and may eclipse disparities suffered by those who remain at the firm, even if they do earn lower wages than whites. As Objectors' expert Dr. Goldman explains in his declaration: [I]n the example of point calculation (p. 103) provided in the settlement document, about two-thirds of an 85% component (the “claim form survey”) of the allocation formula, or nearly 57%, is tied to this service time. The assumptions imply that service time would be smaller on the average for African Americans than for Latinos, which

would propagate to a smaller calculated award to these individuals whose earnings potential at the onset of hire was no less equal. Consequently, the number of weeks worked time of service component within the claim form completes a vicious circle tied to race. Dkt. 145-1, at ¶ 6.
B. Because Of The Lack Of Class Member Involvement, The “Programmatic Relief Is Not Fair And Adequate to Remedy Morgan Stanley's Race Discrimination But Will Perpetuate and Institutionalize This
Discrimination
Acknowledging that the common fund established by the settlement is low, the parties and the District Court focused on the programmatic relief as the “centerpiece” of the settlement. But the programmatic relief is not the product of arm's-length negotiations in this case, as it is “nearly identical” to the programmatic relief established in the Augst-Johnson gender discrimination settlement.[FN11] ER 328 (court calls Augst Johnson settlement “nearly identical”).[FN12] Indeed, under the Augst-Johnson consent decree, Morgan Stanley is legally obligated to implement the vast majority of this relief regardless of the outcome of the Jaffe case. See, e.g., ER 882-96; ER 151-167. As a result, the programmatic relief cannot serve as consideration to extinguish the claims of 1,300 African American and Latino class members.
FN11. See ER 7-8 (“From my reading of the settlement agreement and the party's papers, it seems to me that. . . this settlement does not add dramatically more relief [to the Augst Johnson settlement]”); See Dkt. 108, Dec. of Irwin Goldstein, at 3.
FN12. Almost all of the provisions simply changed the word “women” to “African Americans and Latinos.” Compare, e.g. Section VII.C.4.b. of the Augst-Johnson Settlement, ER 888 with Section VII.DAb. of the Jaffe Settlement, ER 158. Nevertheless, the District Court ultimately determined the Jaffe settlement was not a “carbon copy” of Augst-Johnson based on a few additions, which hardly warrant approval. ER 350. For example, one new provision relates to hiring practices, but does not require Morgan Stanley to hire a single African American, only to use its best efforts to improve; nor does this benefit the class, which did not bring a hiring claim. Similarly, Morgan Stanley commits to an undefined diversity component to management compensation, but this has long been a policy at the firm.
Moreover, the programmatic relief suffers from the same flaw that precludes class certification. It was not negotiated by or with the assistance of knowledgeable class members. Objectors respectfully submit that they would not have accepted the same injunctive relief designed for women but would have designed relief designed to address specific issues facing African Americans. The Objectors explained to the District Court many of the ways in which the settlement would have been different had a group of committed and informed class members been at the negotiating table, in their papers and during the Fairness Hearing. ER 47; see also e.g. Dkt. Nos. 95, 161.
Most notably, the Objectors would have insisted upon meaningful reform of Morgan Stanley's policies regarding teams or partnerships of FAs, the fundamental problem facing African Americans at Morgan Stanley. See ER 44 (Objector Marion Tucker stating that he would “make it mandatory for African Americans to be included in teams” in every Morgan Stanley branch office. The settlement not only fails to reform the Firm's teaming policies or ensure African-Americans inclusion in favorable teams, it aggravates the disparate impact of the teaming policies by codifying and prohibiting from challenge the cumulative advantage created by these segregated teams.[FN13]
FN13. The Settlement expressly codifies the discriminatory practices of (1) allowing accounts to transfer through partnerships rather than according to ranking or through the account distribution policy, ER158, and (2) allowing FAs to garner points under the Power Ranking system for assets received through partnerships,

and not developed from their own efforts, id. Because African-Americans do not receive these “gifts,” they are at a competitive disadvantage.
Because they lacked class member involvement, class counsel relied upon on Morgan Stanley's misrepresentations that there were no teaming policies and that nothing could be done about teams and tailored the Settlement accordingly. As class counsel explained to this Court: We looked at Injunctive relief in partnerships from the perspective of if we win what can we do about it? And what we concluded was it wasn't a company policy and we wouldn't be able to get direct injunctive relief about this. This isn't Shelly versus Kramer where the company giving approval, but they're saying you can't have a partnership with people of different colors. ... so we were cognizant of it, but we did what we thought we could, but still something that we don't think we could do if we litigate it. ER 95-96 (emphasis added).
Morgan Stanley did not provide accurate information about teams to class counsel. Teams are a firm-wide initiative promoted at the highest levels of Morgan Stanley. See, e.g., Docket 145-6, at ¶¶ 12-21; 145-7, at ¶¶ 19-28; 145-8, at ¶¶ 26-37; 145-9, at ¶¶ 18-20. FAs are strongly encouraged, and sometimes pushed, to be on teams, and managers are trained to facilitate the formation of teams. Id. Most importantly, all teams must be approved by management, which also presides over team dissolutions. Id. In the collective experience of the Objectors, management is intimately involved in the formation of, and frequently arranges, teams. Id.
The EEOC and at least one federal court have determined that Morgan Stanley does have teaming policies and that those policies may constitute discrimination under the civil rights laws. In July 26, 2006, after an investigation, the EEOC found reasonable cause to believe that Morgan Stanley's policy of allowing FAs to subjectively choose partners for lucrative agreements resulted in a female FA being unlawfully denied a partnership because of her sex. ER 460-463. In denying Morgan Stanley summary judgment, a federal court agreed that a jury could find the Firm's teaming practices discriminatory. Dodson v. Morgan Stanley DW, Inc., No. 06-5669, 2007 U.S. Dist. LEXIS 85535 (W.D. Wa. Nov. 8, 2007).
IV. The Court Erred In Denying Objectors' Request for Discovery To Assess The Class Settlement And In Reversing Its Own Order For An Evidentiary Hearing
A. Discovery Would Have Provided Necessary Information To The Class And The Court And Demonstrated That Rule 23 Was Not Met And That The Settlement Was Unfair And Inadequate
In order to provide the District Court and class members with crucial information necessary to fully assess the proposed class and settlement, Objectors moved the District Court to discover: additional information regarding the programmatic relief touted as “the centerpiece” of the lawsuit, including the actual power ranking filed under seal with the court; additional information regarding the involvement and claims of the class representative; and Morgan Stanley's workforce data provided to class counsel so that Objectors could assess the appropriateness of treating African Americans and Latinos, analyze how the proposed injunctive relief would affect class members, and prepare a reasonable damages estimate to assess the settlement's monetary relief.[FN14] See, e.g. ER 780-98.
FN14. Objectors submit that even the undisputed record required denial of class certification and approval of the settlement.
Numerous federal District Courts have permitted objectors to a proposed class settlement to seek additional discovery where, as here, that discovery is necessary for the court to properly assess the fairness of the settlement or for objectors to participate fully in fairness hearings. See, e.g., Hemphill v. San Diego Association of Realtors, Inc., 225 F.R.D. 616

(S.D. Cal. 2004); In re Domestic Air Transportation Antitrust Litig., 144 F.R.D. 421, 425 (N.D. Ga. 1992)(granting in part objectors' motion to compel additional discovery); In re Lorazepam and Clorazepate Antitrust Litig., 205 F.R.D. 24, 26-28 (D.D.C. 2001) (same); Lipuma v. Am. Express Co., 406 F. Supp. 2d 1298, 1309 (S.D. Fla. 2005) (intervenor-objectors to a proposed class settlement were allowed to conduct discovery, including depositions, for five months prior to the final fairness hearing); In re Gen. Motors Corp. Engine Interchange Litig., 594 F.2d 1106, 1124-25 (7th Cir. 1979) (court abused its discretion in refusing to allow objectors to conduct discovery into the class negotiation process where there was a credible concern that defendant had shopped for desirable class counsel). Additional discovery is consistent with the heightened scrutiny applied to pre-certification settlement classes to protect the interests of class members who were not notified of the action and therefore lacked the opportunity to be heard during negotiations. See, e.g., Simer, 661 F.2d at 664-66; In re General Motors Corp., 55 F.3d at 796.
The District Court denied this discovery, stating that Objectors “have had a meaningful participation in the settlement proceedings, the Court has sufficient facts before it to intelligently evaluate the settlement, and discovery would cause unnecessary delay.” ER 323. Respectfully, the District Court was mistaken. The District Court invited the parties to present additional information in support of the settlement, including information presented under seal and in camera, but rejected Objectors' attempts to submit relevant information and ignored or summarily dismissed most of the evidence they did submit. ER 321 at n.1; 333 (denying Objector's brief regarding questions posed by court. The discovery sought would have allowed meaningful understanding of the Settlement and how it was reached and provided information essential for the District Court to make a fully informed evaluation of the settlement. This discovery was readily available to the parties, and much of it had already been provided to class counsel. If necessary, the District Court could have promptly held an evidentiary hearing, complete with witness testimony.
The court's denied this discovery although the Objectors plainly met the factors set forth in the case upon which the court relied, Hemphill v. San Diego Assoc. of Realtors, Inc., 225 F.R.D. 616 (S.D. Ca. 2001). The Hemphill court held that the criteria “relevant to the court's decision of whether or not to permit discovery are the nature and amount of previous discovery, reasonable basis for the evidentiary requests, and the number and interests of objectors.” Id at 620. Each of these factors weighs in favor of discovery. First, no formal discovery occurred in the lawsuit settled before it was filed. Second, the Objectors explained in detail their well-founded basis for their discovery requests, based on the first-hand knowledge of and experience with Morgan Stanley and its policies by current and former employees and managers, admissions by the named plaintiff and counsel regarding the abbreviated and unusual settlement process, and counsel's experience with the retail brokerage industry and similar cases. Finally, the motion was supported by over 25 Objectors deeply interested in protecting the class of African American FAs, including fourteen who had engaged in extensive negotiations with Morgan Stanley on many of these same issues.
Under the heightened duty of review in a pre-filing settlement, the District Court erred in denying the Objectors discovery into the negotiations process and matters relevant to the settlement. Federal District Courts in California and elsewhere have denied preliminary approval of class settlements where the settlement was reached prior to class certification and discovery was inadequate to allow the court to evaluate the fairness of the settlement to all class members. See, e.g., Acosta v. Trans Union LLC, 243 F.R.D. 377, 397 (CD. Cal. 2007) (rejecting motion for preliminary approval, noting that “courts are inherently skeptical of pre-certification settlements, precisely because such settlements tend to be reached quickly before the plaintiffs' counsel has had the benefit of the discovery necessary to make an informed evaluation of the case and, accordingly, to strike a fair and adequate settlement.”); Reynolds v. Beneficial Nat'l Bank, 260 F. Supp. 2d 680, 695 (N.D. Ill. 2003) (refusing to approve a proposed class settlement where discovery was inadequate). The class and the court were entitled to full and accurate information in order to reach their respective decisions about class representation and the fairness of the settlement.
B. An Evidentiary Hearing Was Warranted And Would Have Demonstrated That The Class Was Not Adequately Represented
After former named plaintiff Denise Williams came forward and the record confirmed the settlement was lawyer-driven,

the District Court ordered an evidentiary hearing to assess the nature and extent of class member involvement. ER 234-35. The court reversed its order and certified the class based on information submitted in camera by class counsel, although it conceded that the materials submitted by Williams and her former counsel presented a factual dispute. ER 107-109. The District Court's decision to resolve these credibility issues in favor of class counsel and without an evidentiary hearing was in error.
CONCLUSION AND RELIEF SOUGHT
Objectors respectfully seek reversal of the District Court's orders denying Objectors discovery and access to materials filed under seal and in camera, granting preliminary and final certification of the proposed class and approval of the class settlement, and vacating its order for an evidentiary hearing into the involvement of class representatives in settlement negotiations.
Daisy JAFFE and Margaret Benay Curtis-Bauer, Plaintiffs-Appellees, v. Jonathan GLOVER, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert Stalling, Lanta Evans-Mott, Carlton McDowell, Sarah Nyamuswa and Theron Cyrus, Objectors-Appellants, v. Morgan Stanley & Co., Inc., Defendant-Appellee. 2009 WL 4921503 (C.A.9 ) (Appellate Brief )
END OF DOCUMENT

 
 United States Court of Appeals, Ninth Circuit. Daisy JAFFE; Margaret Benay Curtis-Bauer, Plaintiffs - Appellees,
v. Jonathan GLOVER; Latrissa Gordon; Marilyn White; Peter Meme; Marshell Miller; Jerome Senegal; Hubert
Stalling; Lanta Evans-Mott; Carlton McDowell; Sarah Nyamuswa; Theron Cyrus, Objectors - Appellants, v.
Morgan Stanley & Co. Incorporated, Defendant - Appellee. No. 08-17599.
January 28, 2010.
Appeal from Entry of Final Judgment by the United States District Court for the Northern District of California, D.C. No. 3:06-cv-03903-TEH, Entered on October 22, 2008
Brief of Defendant-Appellee Morgan Stanley & Co. Incorporated
Mark S. Dichter, Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103, L. Julius M. Turman, Thomas M. Peterson, Morgan, Lewis & Bockius LLP, One Market, Spear Street Tower, San Francisco, CA 94105, Attorneys for Defendant-Appellee Morgan Stanley & Co. Incorporated.
*iv TABLE OF CONTENTS
CERTIFICATE OF INTEREST ... i
I. STATEMENT OF ISSUES ... 1
II. STATEMENT OF THE CASE ... 2
A. The Settlement Approval Process ... 4
1. Preliminary Approval of Settlement of Second Amended Complaint And Class Certification ... 4
2. Final Settlement Approval ... 6
B. Race-Based Class Action Claims Have Long Been Part Of This Case and Were Settled After Extensive Negotiations ... 8
C. Defendants' Separate Mediation Of Individual, Non-Class Claims With The Moore Group ... 11
III. STANDARD OF REVIEW ... 12

IV. SUMMARY OF ARGUMENT ... 14
V. ARGUMENT ... 16
A. Objectors Impermissibly Submit In Their Excerpts And Rely On In Their Opening Brief Documents That Are Not Part Of The Record ... 16
B. The District Court Justifiably Concluded That The Terms Of The Settlement Are Fair, Adequate, And Reasonable; There Was No Abuse Of Discretion ... 16
1. The Record Supports The District Court's Findings That The Settlement's Programmatic Relief Is “Substantive, Meaningful, And Valuable To The Class” ... 17
a. The Programmatic Relief Goes Beyond The Relief Obtained By Plaintiffs In Morgan Stanley's Gender Class Action Settlement ... 18
*v b. The Record Supports The District Court's Finding That The Settlement's Programmatic Relief Is Highly Valuable ... 23
c. The Court's Settlement Approval Decision Is Supported By Comparison To Other Settlements That Achieved Less Significant Programmatic Relief ... 24
d. The Record Supports The District Court's Finding That The Settlement Properly Addresses Issues Related To Teams And Partnerships Among Financial Advisors ... 26
2. The Settlement's Monetary Relief Is Substantial And Meaningful ... 29
a. The Monetary Award Adequately Compensates Class Members Based On Potential Damages And The Court's Proper Finding That Plaintiffs Face Substantial Risks That They Would Not Prevail At Trial ... 29
b. The Monetary Award Is Even More Favorable to the Class Than Settlements In Other Comparable Cases ... 33
c. The Monetary Relief is Fair to All Members of the Class ... 37
3. The Vast Majority of Class Members Support The Settlement ... 38
C. The Record Supports The District Court's Exercise Of Discretion To Deny Further Discovery ... 40
VI. CONCLUSION ... 43

CERTIFICATE OF COMPLIANCE ... 45 LOCAL RULE 28-2.6 STATEMENT ... 46
*vi INDEX OF AUTHORITIES Cases Boyd v. Bechtel Corp., 485 F. Supp. 610 (N.D. Cal, Aug. 22 1979) ... 24 Class Plaintiffs v. Seattle, 955 F.2d 1268 (9th Cir. 1992) ... 12 Cremin v. Merrill Lynch, 371 F.3d 950 (7th Cir. 2004) ... passim Davis v. City & County of San Francisco, 890 F.2d 1438, (9th Cir. 1989) ... 12 Dodson v. Morgan Stanley DW, Inc., No. C06-5669RJB, 2007 WL 3348437 (W. D. Wash. Nov. 8, 2007) ... 28 Flinn v. FMC Corp., 528 F.2d 1169 (4th Cir. 1975) ... 40 Glass v. UBS, 2007 U.S. Dist. LEXIS 8476 (N.D. Cal. Jan. 26, 2007) ... 34 Glicken v. Bradford, 35 F.R.D. 144 (S.D.N.Y. 1964) ... 13 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) ... 12, 17, 38 Heit v. Van Ochten, 126 F.Supp.2d 487 (W.D. Mich. 2001) ... 40 Hemphill v. San Diego Assoc, of Realtors, Inc., 225 F.R.D 616 (S.D. Cal. 2005) ... 41 In re Mego Fin. Corp. Securities Litig., 213 F.3d 454 (9th Cir. 2000) ... 29 In re Pacific Enterprises Sec. Litig., 47 F.3d 373 (9th Cir. 1995) ... 12 In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922 (8th Cir. 2005) ... 33, 41 *vii Linney v. Cellular Alaska P'ship., 151 F.3d 1234 (9th Cir. 1998) ... 12

Lurns v. Russell Corp., 604 F.Supp. 1335 (D. Ala. 1984) ... 24 Martens v. Smith Barney, 1998 U.S. Dist. LEXIS 17666 (S.D.N.Y. 1998) ... 25, 26, 35 Martens v. Smith Barney, 190 F.R.D. 134 (S.D.N.Y. 1999) ... 40 Martens v. Smith-Barney, 2003 U.S. Dist. LEXIS 11587 (S.D.N.Y 2003) ... 35 Moore v. Morgan Stanley, No. 97C 5606, 2008 U.S. Dist. LEXIS 88300 (N.D. Ill. May 30, 2008) ... 11 Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615 (9th Cir. 1982) ... 12, 30 Olden v. Gardner, 294 Fed. Appx. 210 (6th Cir. 2008) ... 40 Plummer v. Chem. Bank, 579 F.Supp. 1364 (S.D. N.Y. 1984) ... 24 Thomas v. Christopher, 169 F.R.D 224 (D.D.C. 1996) ... 24 Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370 (9th Cir. 1993) ... 17 UAW v. CMC, 497 F.3d 615 (6th Cir. 2007) ... 13 United States v. Hinkson, 585 F.3d 1247, (9th Cir. 2009) ... 13 United States v. Oregon, 913 F.2d 576 (9th Cir. 1990) ... 13, 41 *viii Rules and Regulations Fed. R. App. 10(a)(1) ... 5 Other Authorities 4 Newberg on Class Actions §11:57 ... 13, 41 Manual for Complex Litigation (Fourth) §21.643 (2002) ... 13

I. STATEMENT OF ISSUES
One. Did Judge Henderson abuse his discretion by finding the Settlement of this class action race discrimination case “fundamentally fair, adequate, and reasonable,” where he referenced and applied governing Ninth Circuit precedent and the record supports each of his findings, including that:
(1) the parties' extensive negotiations were conducted at arms' length, without collusion, aided by both a respected neutral mediator and experienced counsel (ER 111; 332);[FN1]
FN1. Just as citations to “ER” refer to the Excerpts of Record submitted by Objectors on November 25, 2009, citations to “DSER” refer to Morgan Stanley's Supplemental Excerpts of Record, filed simultaneously with this brief on January 28, 2010. (2) Plaintiffs' counsel conducted “extensive investigation [and] analysis,” of claims and evidence before concluding settlement negotiations (ER 111; 332);
(3) the Settlement requires substantial changes in Morgan Stanley's business practices, not achieved in any other case, aimed at enhancing opportunities for African-Americans and Latinos (ER 112-13; 336);
(4) these changes are “substantive, meaningful, and valuable” to the class (ER 113; 336);
(5) these changes will “mitigate any further harm stemming from discrimination during the class period and beyond,” (ER 119);
(6) the Settlement's monetary fund of $16 million compares favorably with and often exceeds amounts paid in other, similar cases and will, when distributed, likely provide to class members more than 43% of the alleged “compensation shortfall” associated with their discrimination claims (ER 116-17; 333-34);
(7) the Settlement avoids the complexity, delay, risk, and expense of continuing with the litigation (ER 334); and
(8) the Settlement “produces a prompt, certain, and substantial recovery for the Plaintiff class,” which is significant because Plaintiffs “would face considerable risks were they to proceed to trial” (ER 111)?
Two. Did Judge Henderson abuse his discretion by denying discovery to the Objectors and finding, in accord with record evidence, that:
(1) he had enough information to evaluate the Settlement (ER 334);
(2) the requested discovery would have caused “unnecessary delay” (ER 323); and
(3) the Settlement was free of any collusion (ER 332; 350 n.2)?

II. STATEMENT OF THE CASE
From the time the parties filed their joint application for preliminary approval and continuing until the issuance of the final approval order approximately one year later, the Honorable Thelton E. Henderson, relying on his more than 27 years of experience evaluating class action cases and the law (ER 99), carefully considered the parties' Settlement, including twice receiving additional evidence and briefing on substantive points of law and fact. The Settlement ultimately approved by Judge Henderson is a fair, adequate, and reasonable settlement between Defendant-Appellee Morgan Stanley & Co. Incorporated (“Morgan Stanley”)[FN2] and Plaintiffs-Appellees (“Plaintiffs”), a class of present and former African-American and Latino Financial Advisors.
FN2. Morgan Stanley employs Financial Advisors and Registered Financial Advisor Trainees (“Financial Advisors”) in its Global Wealth Management Group (“MS-GWMG”). MS-GWMG is now a joint venture between Morgan Stanley and Citigroup Inc., known as Morgan Stanley Smith Barney Holdings LLC (“MSSBH”). Financial Advisors manage client investment accounts and are generally compensated by commissions they earn based on the revenue generated by the investments they manage. DSER 630. In their Second Amended Complaint, Plaintiffs claim that Morgan Stanley's account distribution practices disadvantage African-American and Latino Financial Advisors, thereby restricting their business opportunities, compensation, and other favorable employment conditions. ER 1182-1189. They allege violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§2000, et seq., 42 U.S.C. §1981, the California Fair Employment and Housing Act, Cal. Gov't Code §§12940, et seq., and Michigan's Elliot-Larsen Civil Rights Act, M.C.L.A. §§37.201, et seq. ER 1182.
In January 2007, Plaintiffs' counsel informed Morgan Stanley that Plaintiffs were prepared to file a class action complaint on behalf of African-American and Latino Financial Advisors. ER 848. The parties entered into settlement negotiations and after five months of extensive, and at times very contentious negotiations, under the guidance of an experienced mediator, the parties agreed on a settlement in principle which provides for extensive and comprehensive programmatic relief and very substantial monetary relief. ER 849-50.
After a full year of extensive evaluation of the terms of the parties' Settlement and of the negotiation process, and thorough consideration of the objections raised by the Objectors, the district court approved of the Settlement's monetary and programmatic relief addressing Plaintiffs' allegations.
A. The Settlement Approval Process
1. Preliminary Approval of Settlement of Second Amended Complaint And Class Certification.
Following the parties' joint application for preliminary settlement approval on October 22, 2007 (DSER 1140; DSER 977), the district court heard testimony from Settlement advocates and opponents, received evidence in written form, and considered both extensive briefings and oral arguments. ER 1-103. Before ruling, Judge Henderson ordered further briefing “from the parties only” and sought additional evidence directed at the involvement of the class representative, Margaret Benay Curtis-Bauer, in the litigation, settlement, and negotiation process, and substantiating the court's perception that the Settlement represented a healthy percentage of the monetary losses claimed by the class in the case. ER 347. Further briefs were filed, including privileged and confidential attorney work product filed under seal, regarding Plaintiffs' expert analysis of Morgan Stanley's workforce data, and details of Curtis-Bauer's individual claims. ER 778; ER 325-26.
Objectors to the Settlement represented by the same counsel for the Objector-Appellants here, submitted briefs, testimony and evidentiary materials before the court held its hearing on the issue of preliminary approval. See ER 948-1180; DSER

686. Both counsel for Objectors and some Objectors themselves orally addressed the court regarding their opposition to the Settlement.[FN3] ER 30-63; ER 86-92; ER 97-99.
FN3. Objectors to the Settlement also appeared, through counsel and in person, and addressed the court with arguments against final approval of the Settlement. ER 248-64; ER 282-306; ER 316. More than a month after Judge Henderson requested supplemental briefing from the parties, and after both parties had submitted their responses to Judge Henderson's request, Objectors tried to file unsolicited further briefing with extensive attachments. They also sought permission to conduct discovery, including deposing Curtis-Bauer and seeking all data provided to Plaintiffs during the mediation process. ER 481-770; ER 784; ER 787-88. The district court rejected the filing of Objectors' unsolicited brief and its attachments as repetitive of Objectors' earlier filings and arguments, and warned Objectors that “further repetitive submissions may subject them to sanctions.” ER 321. Judge Henderson denied Objectors' discovery requests because the court found that it had “sufficient facts before it to intelligently evaluate the settlement”; the requested discovery “would cause unnecessary delay”; and the Objectors, who had appeared through counsel and gave testimony themselves at the preliminary hearing, already had “meaningful participation in the settlement proceedings.” ER 323.[FN4]
FN4. Despite the fact that the district court rejected the unsolicited brief and attachments, and in direct contravention of Fed. R. App. 10(a)(1), Objectors included the rejected brief and attachments in their Excerpts of the Record and relied extensively on the rejected materials in their Opening Brief. Plaintiffs and Defendants have moved to strike the brief and attachments from the Excerpts of the Record and have asked the Court to strike the arguments in Objectors' Opening Brief which are based on this rejected material. See Morgan Stanley's Motion to Strike, filed simultaneously with this brief on January 28, 2010. After considering these submissions, the district court provisionally granted certification, approved Curtis-Bauer as the representative, and granted preliminary settlement approval, finding at that time that the Settlement was “the result of extensive, arms' length negotiations” with “no evidence of collusion between the Parties during the settlement process.” ER 332.[FN5] The court found that “the involvement of an experienced mediator in the settlement process and the submission of supplemental evidence concerning Plaintiffs' analysis of workforce data it received from Morgan Stanley confirm that the settlement was not collusive.” Id.
FN5. The court's rulings appear in two orders: an initial order filed December 12, 2007 (ER 345-53), that addresses most of the issues raised by the motions, and a second order filed February 7, 2008 (ER 321-44), after the court received from the parties the further evidence and briefing it had solicited. As for the Settlement terms, the district court found that the “substantial injunctive relief provided by the settlement is an expansion, rather than a dilution, of the relief provided in” any other case, and that the injunctive relief is “comparable to that found to be substantive and meaningful” in other race discrimination cases. ER 334-35. Regarding the Settlement's monetary relief, the court found, based on Plaintiffs' expert analysis of “extensive data,” that monetary payments under the Settlement represent approximately 43% of the total race-based compensation disparities claimed by the Plaintiff class and that it was reasonable for Plaintiffs and their counsel to focus in settlement negotiations on recovering money for such pay disparities. ER 334-35.
2. Final Settlement Approval
Notice of the settlement was sent to the class. DSER 426. “Of the over 1,300 class members, nine [chose] to remain class members but lodge objection, and only 24 [] opted out. By the close of the claim period, 422 class members had submitted claims, a participation rate of approximately 31%.” ER 112. These are “very high” levels of positive participation in the Settlement, as admitted even by Objectors' counsel. ER 59.
The parties then sought final settlement approval, and on June 16, 2008, Judge Henderson held a lengthy hearing, again allowing the parties and Objectors to participate. ER 236-320. Thereafter, Judge Henderson entered an order finding that

Curtis-Bauer had adequately represented the class (ER 222-23), but the court directed a magistrate judge to hold an evidentiary hearing to examine the level of involvement of other class members, including Denise Williams, in the settlement negotiation process before Curtis-Bauer became the class representative. ER 233. This order was in direct response to Objectors' counsel's (who at the time had assumed representation of Williams) submission of a declaration claiming that Williams had no meaningful participation in the settlement negotiations. ER 223-24.
In response, Plaintiffs' counsel moved for reconsideration of the order appointing a magistrate judge and submitted further evidence, including privileged communications between Plaintiffs' counsel and their clients, including Williams, filed under seal. ER 109; ER 1372; DSER 116; DSER 121. The district court then vacated as “ill-advised” its referral of proceedings to the magistrate judge, and granted final settlement approval. ER 107.
The district court's final approval order found that the parties “arrived at the terms of the settlement after months of active involvement in the case... and with the involvement and advice of class representatives.” ER 112. It also found that “[t]he plaintiffs would face considerable risks were they to proceed to trial” and that both the “thoughtful assessment of the terms of the settlement” by experienced class counsel, “particularly their considered and strong support for the efficacy of the proposed injunctive relief,” and the positive response of class members to the proposed Settlement “weigh[ed] in favor of approval.” ER 111-12. However, the “most important” factor for the court was “the strength of the injunctive and monetary relief the Settlement provides.” ER 112.
Judge Henderson found that “the Settlement Agreement provides substantial injunctive relief” that “represents an expansion of the relief provided in the settlement of a parallel gender discrimination case against Morgan Stanley, Augst-Johnson, []and is substantive, meaningful and valuable to the class.” ER 112-13.[FN6] Likewise, the court determined that the monetary relief was substantial. The district court found that the monetary relief “represent[ed] over 40% of the predicted disparity in compensation which Plaintiffs sought as damages,” and was “comparable to that approved by the District Court for the District of Columbia in settlement of the parallel Augst-Johnson case,” as well as to the settlement in another parallel gender discrimination case against Smith Barney. ER 116-17. Accordingly, Judge Henderson granted final certification to the class, final approval to the proposed Settlement, issued the Settlement Agreement as an order of the court, and entered final judgment. ER 123-28.
FN6. On the same day Plaintiffs filed their initial Complaint in this case alleging class-wide gender discrimination claims, separate plaintiffs also brought a gender class action in the United States District Court for the District of Columbia (Augst-Johnson v. Morgan Stanley, Case No. 06-1142). The gender claims in this case were stayed because of the 18 months of pre-filing settlement negotiations in the Augst-Johnson case, which eventually resolved the class-wide gender claims in both litigations. ER 855-58. B. Race-Based Class Action Claims Have Long Been Part Of This Case and Were Settled After Extensive Negotiations.
As the district court recognized, class action race discrimination claims were part of this case before efforts were made to settle such claims. ER 104-105. When Denise Williams, an African-American, was added, on October 12, 2006, as a named plaintiff and as an additional representative of the proposed class of women challenging Morgan Stanley's policies on the allotment of business opportunities, she also alleged individual claims of race discrimination. ER 1256-59.[FN7] Williams then submitted to the EEOC an amended Charge of Discrimination, asserting class-wide discrimination by Morgan Stanley against minorities, and she received a right-to-sue on December 5, 2006. DSER 1312-17.[FN8]
FN7. Williams' individual Title VII race claims were dismissed due to the failure to obtain an EEOC right-to-sue letter regarding those individual claims prior to filing of the complaint. DSER 1318-20.

FN8. Under the heading “IV. Class Claims,” Williams' amended EEOC charge expressly stated: It is my understanding and belief that MSDW has engaged in a continuing pattern and practice of discrimination against female and minority Financial Advisors with respect to compensation, business allocation, and other terms and conditions of employment in the Detroit, Michigan office and in other MSDW facilities. DSER 1313. Shortly thereafter, in January 2007, Plaintiffs' counsel advised Morgan Stanley that Plaintiffs would seek to amend their Complaint and allege class-wide race claims on behalf of “minorities.” ER 848. Thereafter, the parties agreed to toll the statute of limitations,[FN9] and Plaintiffs agreed to defer filing their class-wide race claims in court until after the parties attempted to negotiate a class-wide settlement. ER 848-49. They engaged Hunter Hughes, a well-respected and highly experienced mediator. ER 849.
FN9. As the January 2007 tolling agreement recognized, “Denise Williams asserts, and MSDW denies, that she has certain causes of action for race discrimination against MSDW, individually and on behalf of herself and all other similarly situated minority employees of MSDW.” ER 848-49; ER 854-58. Lengthy and difficult in-person mediation sessions were conducted in February, March, May, and July of 2007 (ER 849-50), along with scores of telephone conferences and other mediation communications. ER 850; DSER 624-25. In advance of the mediations, Plaintiffs' counsel requested, and Morgan Stanley provided, detailed and confidential information about its policies and practices, as well as extensive Morgan Stanley compensation and workforce data, and detailed information regarding its Power Ranking formula and diversity initiatives. ER 849-50; ER 784. Plaintiffs engaged experts to analyze this data, and investigated the strength of their claims. ER 849; DSER 624.
The rigor of the negotiation is shown by the fact that the parties nearly reached impasse on several occasions due to seriously conflicting settlement positions. DSER 625. Indeed, Plaintiffs cancelled a previously scheduled June 2007 mediation session as a result of their dissatisfaction with settlement terms proposed by Morgan Stanley. ER 849-50. According to Mediator Hunter Hughes:
[C]ounsel for the parties advocated their clients' positions vigorously and at arms' length. In fact, negotiations almost reached impasse on more than one occasion when one side or the other chose not to negotiate off what I considered principled positions. The proposed settlement that voluntarily was reached was the result of well-informed, non-collusive negotiations.
DSER 625.
At the conclusion of the mediation session with Mr. Hughes, on July 23, 2007, the parties reached a settlement in principle, which was then documented.[FN10] The Second Amended Complaint (ER 1181-1206) and subsequently the proposed Settlement were presented to the district court for approval. ER 850.[FN11]
FN10. The settlement agreement initially submitted to the district court was revised by the parties and resubmitted to the district court. References in this brief to the “Settlement Agreement” refer to the revised Agreement to which the district court granted final approval on October 22, 2008. ER 130-87.
FN11. Following the public announcement of the settlement of the Augst-Johnson case, Morgan Stanley's managers and Human Resources representatives received numerous inquiries from employees seeking information about that settlement, each of which they had to direct to plaintiffs' counsel in that case. DSER 628-29. In anticipation of and to alleviate the burden of responding to numerous individual requests on August 30, 2007, shortly after the public announcement and press reports of the Settlement in this case, Morgan Stanley's Human Resources group sent an e-mail to all African-American and Latino Financial Advisors informing them of the Settlement, reminding them of Morgan Stanley's non-retaliation policy and telling them

that they could direct any “inquiries ... regarding participation in this settlement” to Plaintiffs' counsel. DSER 632. Contrary to the allegation by the Objectors, there was nothing inappropriate or unusual about this email, and it certainly does not support the allegation that there were not arms' length negotiations between the parties. This communication occurred after the public announcement of the Settlement, which had already identified Plaintiffs' counsel. C. Defendants' Separate Mediation Of Individual, Non-Class Claims With The Moore Group.
Morgan Stanley never negotiated a possible settlement of class-wide race discrimination claims with any other group of Financial Advisors or their counsel. Three months after the Plaintiffs informed Morgan Stanley of their intent to bring class-wide claims and nearly two months after the parties began mediation sessions with Hunter Hughes, Morgan Stanley began separately mediating the individual, nonclass claims of a different group of current and former African-American Financial Advisors, represented by counsel for Objectors here (“the Moore Group”). ER 850-51; DSER 628. The mediation with the Moore Group concerned possible settlement of the individual, non-class discrimination claims of that group; it did not focus on a class-wide settlement. ER 851. These individual negotiations broke down over money (ER 851; DSER 628), well before the Settlement was reached in this case on July 23, 2007 (ER 850). The Moore Group members eventually filed suit in the Northern District of Illinois. Moore v. Morgan Stanley, No. 97C 5606, 2008 U.S. Dist. LEXIS 88300, *2-3, *14 (N.D. Ill. May 30, 2008). Although the Moore Group initially attempted to bring class claims,[FN12] the Moore litigation proceeded and each plaintiff settled on an individual basis. RJN Exh. A-D.
FN12. The class claims brought in the Moore case were alleged to be broader than those in this case, but the Moore case proceeded based on individual claims, and eventually settled on individual monetary bases, abandoning any class claims. Moore, 2008 U.S. Dist. LEXIS 88300 at *2-3, * 14; see Morgan Stanley's Request for Judicial Notice (“RJN”) Exh. A-D, filed simultaneously with this brief on January 28, 2010.
*12 III. STANDARD OF REVIEW
This Court will reverse a decision approving a class action settlement “only upon a strong showing that the district court's decision was a clear abuse of discretion.” Linney v. Cellular Alaska P'ship., 151 F.3d 1234, 1238 (9th Cir. 1998). A “strong judicial policy ... favors settlements, particularly where complex class action litigation is concerned” (ibid); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026-27 (9th Cir. 1998) (review of class action settlement is “extremely limited”); Officers for Justice v. Civil Serv. Comm'n 688 F.2d 615, 626 (9th Cir. 1982) (upholding the district court's approval of class settlement and noting the appellate court's “limited” review).
When a settlement is offered for approval at the same time a class is proposed for certification, courts require heightened judicial scrutiny to assure fairness. Hanlon, 150 F.3d at 1026. But if the record shows that the district court explored relevant factors and thereby approved a settlement, the appellate court will not overturn that decision even if it thinks settlement terms might have been better, or that it might have weighed the relevant settlement approval factors differently. Officers for Justice, 688 F.2d at 626; see also In re Pacific Enterprises Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (affirming settlement approval because judge “applied a proper legal standard and his findings of fact were not clearly erroneous”).
Thus, the judicial task on appeal “is a very limited one.” Class Plaintiffs v. Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). “Factual findings supporting the order approving the decree [or settlement] are accorded ‘great weight,’ and the appellate court will not substitute its notions of fairness for those of the district judge and the parties to the agreement.” Davis v. City & County of San Francisco, 890 F.2d 1438, 1445 (9th Cir. 1989). A district court's factual findings are reviewed for clear error; if *13 those findings fall within “any of the permissible choices the court could have made” based on the record, the court's findings are not clearly erroneous. United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc).
If a district court has identified and applied the correct legal rules, it abuses its discretion only if its “application of the

correct legal standard was (1) ‘illogical,’ (2) ‘implausible,’ or (3) ‘without support in inferences that may be drawn from facts in the record.’ ” Hinkson, 585 F.3d at 1262 (quoting Anderson v. City of Bessemer, N.C., 470 U.S. 564, 577 (1985)).
Furthermore, the district court has discretion to limit both the discovery or presentation of evidence by a settlement objector “to that which may assist it in determining the fairness and adequacy of the settlement.” 4 Newberg on Class Actions §11:57, at 184; see also Glicken v. Bradford, 35 F.R.D. 144 (S.D.N.Y. 1964); Manual for Complex Litigation (Fourth) §21.643, at 328 (2002) ( “Discovery [by objectors] should be minimal and conditioned on a showing of need, because it will delay settlement, introduce uncertainty, and might be undertaken primarily to justify an award of attorney fees to the objector's counsel”). The district court's decision to deny discovery requests should not be overturned absent an abuse of discretion. UAW v. CMC, 497 F.3d 615, 625 (6th Cir. 2007) (affirming settlement approval, including district court's denial of additional discovery requested by objectors); see also United States v. Oregon, 913 F.2d 576, 582 (9th Cir. 1990) (“[I]f the district court had sufficient facts to approve the plan intelligently, then ‘there is no reason to ... give appellants authority to renew discovery.”) (citing City of Detroit v. Grinnell Corp, 495 F.2d 448, 463 (2d Cir. 1974)).
IV. SUMMARY OF ARGUMENT
1. Judge Henderson did not abuse his discretion and was justified in concluding that the terms of the Settlement are fair, adequate and reasonable. For approximately one year, the district court reviewed the terms of the Settlement holistically, balancing the strength of the Plaintiffs' case; the risk, complexity and likely duration of further litigation; and the stage of the proceedings. Judge Henderson considered the experience and views of counsel, the reaction of class members to the proposed Settlement, and carefully considered the arguments of the Objectors before approving the Settlement. This Court should not disturb the district court's sound decision.
2. Judge Henderson did not abuse his discretion, as the record supports the finding that the programmatic relief is substantive, meaningful, and valuable to the class. The programmatic relief provides for unique and innovative programs geared specifically towards African-American and Latino Financial Advisors and extends the programmatic relief already provided to women under Augst-Johnson gender settlement to African Americans and Latinos. As a result of the settlement negotiations, changes were made to the Power Ranking formula originally negotiated in Augst-Johnson, to place even less emphasis on historical factors such as assets under management, specifically to address the concerns of African-American and Latino Financial Advisors.
To further support the soundness of its finding that the Settlement was meaningful and valuable to the class, the district court compared the programmatic relief to settlements in similar cases. The programmatic relief in this case exceeds that achieved in other race discrimination class action settlements by not only implementing new programs, but also by establishing a system for continuous evaluation of the programs and for recommending appropriate revisions to the programs to ensure their ongoing effectiveness.
3. The record fully supports the district court's exercise of discretion in deciding that the monetary award adequately compensates class members. To reach this conclusion, the district court compared the Settlement amount to Plaintiffs' estimated compensation if they prevailed at trial and determined that the amount was commensurate with the risk of proceeding. The court also compared the monetary Settlement amount to the amount awarded in similar cases, finding this Settlement to provide more relief than many other comparable cases. Finally, the record supports the district court's finding that the monetary award was fair to both African-American and Latino class members.
4. The district court properly exercised its discretion in denying Objectors' request for further discovery. The district court found that it had sufficient facts before it to intelligently approve the Settlement. Objectors have no absolute right to review all of the confidential materials provided to the court in chambers. The only questions are whether the court

had sufficient facts to evaluate the Settlement and whether Objectors were able to meaningfully participate in the settlement approval process without the information. Because the district court determined the answer to both questions to be affirmative, it properly denied Objectors' requests for further discovery. The district court's exercise of discretion should therefore not be disturbed.
*16 V. ARGUMENT
A. Objectors Impermissibly Submit In Their Excerpts And Rely On In Their Opening Brief Documents That Are Not Part Of The Record.
Objectors improperly offer and rely upon almost three hundred pages of documents (ER 481-770) that are not part of the district court record. ER 321. For the reasons discussed in the accompanying Motion to Strike, the Court should strike the documents improperly included in Objectors' Excerpts of Record as well as the referenced factual allegations they supposedly count on, and ignore those parts of Objectors' brief that rely on them.[FN13]
FN13. Improper excerpt materials are cited in support of arguments in Objectors' Opening Brief concerning: (1) Ms. Curtis-Bauer's role in settlement negotiations; (2) the Moore Group's supposed knowledge about Morgan Stanley and its policies; (3) the respective experiences of African-Americans and Latinos at Morgan Stanley (an assertion made in the declaration of one African-American employee in a South Florida Morgan Stanley office who “did not witness racial discrimination against Latinos”); and (4) the fairness of the Settlement's components. B. The District Court Justifiably Concluded That The Terms Of The Settlement Are Fair, Adequate, And
Reasonable; There Was No Abuse Of Discretion.
Judge Henderson applied Ninth Circuit precedent and took full and proper account of the record when he found, within his discretion, that this Settlement is “fair, adequate, and reasonable.” ER 111.
Objectors' arguments on appeal are legally erroneous, devoid of record support, inconsistent with the standard of appellate review, and reflect Objectors' preferences for different settlement terms rather than showing that this Settlement fails the test governing settlement approval. There is no basis to find any abuse of discretion by the district court.
*17 When reviewing a proposed class settlement, the courts must evaluate it as a whole. Hanlon, 150 F.3d at 1026. The district court “balance[s] a number of factors: the strength of the Plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.” Id. No one factor need be determinative though; sometimes, one factor alone will merit a settlement approval order. Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 376 (9th Cir. 1993).
1. The Record Supports The District Court's Findings That The Settlement's Programmatic Relief Is “Substantive, Meaningful, And Valuable To The Class”.
In approving the settlement, Judge Henderson did not abuse his discretion when he found that the programmatic relief provided is “substantive, meaningful, and valuable to the class” (ER 335-36), and does not duplicate relief obtained by the plaintiffs in the Augst-Johnson settlement. ER 350. As expressed in Judge Henderson's final appeal order: [T]he injunctive relief package is not simply a carbon copy of the relief Morgan Stanley had already agreed to in the

Augst-Johnson settlement. The programmatic relief set out in sections VII.B, VII.C, VII.D.2.d, VII.E and VII.G appears to represent a genuine expansion rather than a dilution of relief already ordered in Augst-Johnson. Counsel clarified that the industrial psychologists and diversity monitor provided for in the settlement will be devoting additional time, analysis, and resources to addressing race issues, and not displacing relief already agreed to in Augst Johnson.
ER 350.
*18 The record fully sustains such determinations. Thus, the district court did not abuse its discretion in approving the settlement based on these and other findings. As detailed below, the Settlement Agreement expands and provides relief distinct from the Augst-Johnson settlement. Further, the substantial value of the programmatic relief is evidenced by the declarations of Industrial Psychologists retained to assist in the administration of the settlement and Morgan Stanley's counsel. Moreover, the injunctive relief of the Settlement Agreement exceeds the injunctive relief approved by courts in similar cases.
a. The Programmatic Relief Goes Beyond The Relief Obtained By Plaintiffs In Morgan Stanley's Gender Class Action Settlement.
Objectors attempt to mislead this Court by claiming that the relief of the Jaffe Settlement Agreement is duplicative of and previously mandated by Morgan Stanley's settlement in the Augst-Johnson case, when in fact the Jaffe Settlement expands and extends the relief provided in the Augst-Johnson settlement of gender discrimination claims to a different class of persons - Latinos and African American Financial Advisors. The programmatic relief in Augst-Johnson addressed an entirely different group - women - and was specifically aimed at increasing female participation and performance in Morgan Stanley's workforce. ER 862-914. Nothing in the Augst-Johnson settlement bound Morgan Stanley to undertake any initiatives with respect to African-Americans or Latinos (ER 862-914); only this Settlement Agreement commits Morgan Stanley to do that. ER 130-218.
Specifically, the Jaffe Settlement provides for the development and implementation of unique and innovative policies and programs geared towards attracting and benefiting African-American and Latino Financial Advisors during all *19 phases of their careers with MS-GWMG. ER 151-67. These policies, programs, and initiatives address the recruitment, hiring, development, success, and retention of African-American and Latino Financial Advisors in meaningful ways. Id.
One way this settlement benefits minorities is by extending to them some programs and initiatives created for women in the Augst-Johnson settlement. But that fact does not make this settlement duplicative of the relief in the Augst-Johnson settlement. For example, as the Augst-Johnson settlement did for women, this Settlement provides for the use of the two Industrial Psychologists, Dr. Kathleen Lundquist and Dr. Irwin Goldstein, who were also retained as part of the Augst-Johnson settlement, to develop programs to aid African-American and Latino Financial Advisors. Specifically, as a result of the Jaffe Settlement, they are to: • identify and develop programs to attract qualified African-American and Latino Financial Advisors (ER 152); • recommend ways to increase African-American and Latino representation in the receipt of retiring Financial Advisors' books of business (ER 158); • provide advice for increasing participation of African-American and Latino Financial Advisors in partnerships with other Financial Advisors (ER 158); • develop workplace initiatives designed to retain African-American and Latino Financial Advisors and enhance their success (ER 161); • identify ways to increase the participation of African-American and Latino Financial Advisors in development opportunities (ER 161).
*20 Programs created for women in Augst-Johnson are extended through the Jaffe Settlement to African-Americans and

Latinos.
Beyond these extended initiatives, the Jaffe Settlement contains numerous provisions that have no counterpart whatsoever in the Augst-Johnson settlement. The Jaffe Settlement mandates Morgan Stanley to utilize the Industrial Psychologists to review annually the account distribution system, related compensation data, and the rankings of African-Americans and Latinos on each individual factor considered in the Power Ranking formula. ER 155-56; ER 171. Under the Jaffe Settlement, the Industrial Psychologists are also tasked with the new and unprecedented task of conducting a job analysis. ER 164. At the preliminary approval hearing, Plaintiffs' counsel explained the importance of this job analysis to decreasing turnover-an issue particularly applicable to African-American and Latino Financial Advisors. ER 16. The Industrial Psychologists have the additional task of recommending ways to increase the number of minority Financial Advisors, improve Series 7 passage rates, and decrease attrition. ER 164-65; ER 16. In fact, the Industrial Psychologists must study and recognize the differences encountered by African Americans, Latinos and women in the workplace, study Morgan Stanley programs and their differing effects on these diverse groups, and recommend changes that will increase access to opportunities for each separate group. ER 165-66.
In an effort to recruit more African-American and Latino Financial Advisors, Morgan Stanley will undertake targeted recruiting efforts, build relationships and network with many different organizations and schools, offer internships, and sponsor other programs. ER 151-52. Plaintiffs' counsel explained to the district court that their focus on Morgan Stanley's recruiting efforts was specifically geared to *21 counteract the decrease in the African-American trainee workforce. ER 15. At the preliminary approval hearing, class counsel elaborated on the value of these new recruiting provisions: The job analysis and the analysis of recruiting sources where you're likely to find people of color who are likely to be successful are very important components of this injunctive relief, that are above and beyond Augst-Johnson and will cost the company more, [and] regardless what it cost them, it will benefit these class members.
ER 16-17. Morgan Stanley confirmed that “the recruiting function is [a] whole new area not part of the Augst-Johnson case.” ER 27. Under the Jaffe Settlement Agreement, Morgan Stanley will dedicate a position within its Global Wealth Management Group whose primary function will be the “sourcing and recruitment” of qualified diverse candidates, reporting on recruitment efforts, and the identification and development of sourcing alternatives for qualified African-American and Latino Financial Advisors. ER 151-52. In order to provide more opportunities for African Americans and Latinos to move into management, Morgan Stanley will develop a computerized system to provide email notifications of new managementy job postings. ER 152. Morgan Stanley must conduct exit interviews and devote additional resources to assist trainees to obtain Series 7 registration. ER 161; ER 153. Also as a result of this Settlement alone, Morgan Stanley's diversity training will incorporate elements of the Implicit Association Test - an awareness building tool with respect to implicit bias. ER 153. These significant and meaningful programmatic relief provisions are far more than fair, adequate and reasonable - they are far reaching and, in many respects, ground breaking and innovative within the financial services industry.
*22 Furthermore, this Settlement provides for the appointment of a Diversity Monitor to perform additional tasks related to African Americans and Latinos. The Diversity Monitor, Fred Alvarez, Esq., will provide monthly reports to Plaintiffs' Counsel regarding complaints of race discrimination, the investigations of those complaints and their resolution; receive quarterly reports regarding offices where branch managers have filed exception reports reflecting deviations from the account distribution process; monitor account distribution data, exception reports, and any complaints related thereto; inform Morgan Stanley and Plaintiffs' counsel of areas of non-compliance; audit branch activities by reviewing documents and asking branch managers to provide explanations; review the diversity-related self assessment process for field sales management and the diversity component of branch manager compensation; monitor the bi-annual training of company management on equal employment opportunity policies; review how the Human Resources department handles investigations; and review annual results of exit interviews of African Americans and Latinos. ER 163-64. Given that these programs are distinct forms of programmatic relief associated with the Jaffe Settlement, the district court's decision that the settlement is not duplicative of Augst-Johnson is amply supported by the record and was not an abuse of discretion.

Additionally, the Power Ranking formula that governs the account distribution of departing Financial Advisors' books of business was significantly altered as a result of concerns raised by the Plaintiffs in this case. Although one version of the Power Ranking formula in the Augst-Johnson settlement was submitted for preliminary approval in that case, Morgan Stanley made changes to the formula as a direct result of the race-based concerns raised by the Jaffe Plaintiffs. ER 115. The formula *23 negotiated in Jaffe was the formula given final approval in Augst-Johnson. ER 851. Plaintiffs' counsel testified both at the preliminary and final approval hearings that Plaintiffs insisted on modifying the new Power Ranking formula to place less emphasis on historical factors, such as assets under management, specifically to address the concerns of African-American and Latino Financial Advisors. ER 12; ER 63; ER 265-66. See also ER 22-23. Morgan Stanley confirmed that Morgan Stanley agreed to a “meaningful change” in the Power Ranking formula as a result of settlement negotiations in this case. ER 93.
Based on the testimony of Plaintiffs' counsel and counsel for Morgan Stanley, the district court found, within its discretion, that in response to the race discrimination claims in Jaffe, Morgan Stanley changed the Power Ranking formula to de-emphasize past performance, tested the revised Power Ranking formula to see if it would have an adverse impact on minorities, and concluded that it did not. ER 115; ER 851; DSER 665-66.
b. The Record Supports The District Court's Finding That The Settlement's Programmatic Relief Is Highly Valuable.
Judge Henderson's settlement approval findings are supported by the testimony of Dr. Lundquist, one of the Industrial Psychologists who provided expert testimony that the programmatic relief would improve productivity, retention, and hiring of African-American and Latino Financial Advisors. ER 335-36, DSER 615. In addition, Judge Henderson recognized that Morgan Stanley estimates that it will spend $7.5 million on “diversity initiatives that are aimed squarely at class members in this case” as a result of the Settlement. ER 335-36; DSER 621; DSER 629.
*24 c. The Court's Settlement Approval Decision Is Supported By Comparison To Other Settlements That Achieved Less Significant Programmatic Relief.
The programmatic relief in the Settlement Agreement is comparable to or exceeds that achieved in other race discrimination class action settlements, which underscores the appropriateness of Judge Henderson's approval order. ER 335-36. See Thomas v. Christopher, 169 F.R.D 224, 232-33 (D.D.C. 1996) (approving settlement in race discrimination case which had far fewer innovative programs designed to enhance opportunities for class members); Plummer v. Chem. Bank, 579 F.Supp. 1364, 1374 (S.D. N.Y. 1984) (approving settlement and finding significant injunctive relief was provided by accelerating affirmative action goals, implementing dispute resolution procedure, and appointing a special master to hear complaints); Lums v. Russell Corp., 604 F.Supp. 1335, 1337 (D. Ala. 1984) (settlement that provides for backpay fund, scholarships, minority vendor program, and substantially increased opportunities for hiring, training, transfer and promotion, recruiting efforts and hiring goals provides for “broad and substantial benefits to class members”).
Each of the above cited settlements, upon which the district court properly relied as comparable race discrimination cases (ER 335-36), involved the implementation of programmatic changes for their employees. However, none of them went as far as the settlement in this case, which not only implements new programs, but also establishes a system for continuous evaluation and for recommendation of revisions to the programs, to ensure their effectiveness to meet the ongoing goal of successful employment for African American and Latino Financial Advisors. See also Boyd v. Bechtel Corp., 485 F. Supp. 610, 615-16 (N.D. Cal, Aug. 22 1979) (approving race discrimination class settlement providing for no *25 programmatic or injunctive relief and approximately $106 dollars in monetary relief per class member, assuming full participation).

The court also took judicial notice of the Amochaev et al. v. Citigroup Global Markets Inc. gender discrimination settlement approved by the Northern District of California (Case No. C-05-1298-PJH, August 13, 2008) as a settlement “which provided similar injunctive relief as this case. ER 117. And, as discussed above, while this settlement differs in many material respects from the one in Augst-Johnson, the court's approval of the Augst-Johnson settlement is further evidence of the adequacy of the programmatic relief provided for here. ER 862-914; ER 916-20; ER 938-47.
Even though Objectors assert that the court-approved settlements in two retail brokerage industry cases (Cremin v. Merrill Lynch, 371 F.3d 950 (7th Cir. 2004) (upholding a settlement reached in 1998) and Martens v. Smith Barney, 1998 U.S. Dist. LEXIS 17666 (S.D.N. Y. 1998)) were more favorable than the Jaffe Settlement Agreement, they actually provide far less extensive injunctive relief than the Settlement Agreement. To begin with, both Martens and Cremin require that the defendant implement and enforce the programmatic relief over a three-year period only, two years less than the five-year period to which the parties agreed in this case.
More significantly, the Settlement Agreement provides for the joint appointment of Industrial Psychologists who shall work with Morgan Stanley to develop innovative, meaningful, novel, state-of-the-art programs; monitor the implementation of the policies and initiatives that Morgan Stanley is obligated to undertake; and, on an annual basis, monitor the representation rates of African Americans and Latinos in the Registered Financial Advisor Trainee and Financial *26 Advisor positions. ER 164-67. The Settlement Agreement also requires the appointment of a Diversity Monitor with various and extensive monitoring and reporting duties. ER 162-64. See pages 17-23, supra.
By comparison, neither Cremin nor Martens, which were both negotiated by Objectors' counsel, include the appointment of industrial psychologists or external, independent monitors. See DSER 125-401. Thus, through both the Industrial Psychologist and Diversity Monitor appointments in the instant Settlement, there is far more participation and reporting by independent third parties than Objectors' counsel has previously required in their prior class action settlements.
d. The Record Supports The District Court's Finding That The Settlement Properly Addresses Issues Related To Teams And Partnerships Among Financial Advisors.
The district court found that teaming arrangements and partnerships among Financial Advisors are not controlled by Morgan Stanley, meaning Plaintiffs' counsel could properly conclude, as they did, that Plaintiffs would be unlikely to obtain any relief changing these teaming and partnership agreements even if they prevailed at trial. Despite this, the court also found that the settlement requires Morgan Stanley to make efforts to increase minority participation in teaming and partnership relationships among Financial Advisors. ER 115-16. Specifically, the Court stated: Even if the exclusion of minorities from teams and partnerships were attributable to Morgan Stanley, the fact that the Settlement Agreement still allows assets to transfer and credits to accrue through partnership is not fatal to the settlement. Again, the standard is not whether the settlement “could be better,” but whether it is fair, reasonable and adequate. The Settlement Agreement provides for some efforts to increase minority representation on teams and partnerships. Given the extensive programmatic and monetary relief the settlement provides to class members, the Parties' decision to focus on other issues is acceptable.
*27 ER 116.
As the record supports each of the district court findings, there is no basis to find an abuse of discretion. The court properly credited Plaintiffs' counsels' assessment, based on their factual investigation, that Plaintiffs would be unlikely to obtain any relief directed at teams and partnerships, even if successful at trial. ER 69-70, 81.
In addition, the Settlement itself addresses minority participation in teaming and partnership arrangements among

Financial Advisors. The Industrial Psychologists are to study these arrangements and develop ways to increase African-American and Latino participation. ER 158.
The Settlement requires that accounts be distributed through the revised Power Ranking formula which is subject to the various safeguards described above. An exception to this procedure exists for the accounts of departing or retiring Financial Advisors that were the subject of a teaming arrangement among Financial Advisors which had been in effect for more than twenty-four months. ER 158. This narrow exception is justified because Morgan Stanley is legitimately interested in distributing accounts to the colleagues of departing Financial Advisors who already have established business relationships with account holders.
Objectors' arguments that teams and the distribution of departing and retiring Financial Advisors are not fairly taken into account by the settlement rely on materials that are not part of the record (ER 481-770) and, thus, should be disregarded. Even if this Court considers these arguments, it should find that Objectors' position ignores that the Settlement Agreement does indeed address teams and account distributions, as referenced above.
*28 Objectors also misstate both an EEOC Determination and a district court summary judgment ruling in the single-plaintiff case of Dodson v. Morgan Stanley. Neither decision found a pattern or practice of discrimination with respect to teaming and partnership practices among Financial Advisors at Morgan Stanley. The EEOC only found “reasonable cause” to believe that one particular plaintiff may have been denied a potential partnership based on her sex because one senior colleague made that choice. The EEOC made no finding of discrimination and determined nothing about teaming practices in general. ER 463. When these events became the subject of judicial review, the district court dismissed the plaintiff's pattern and practice and disparate impact discrimination claims based on teaming practices among Financial Advisors, finding no evidence of a policy, pattern or practice of discriminatory teaming. See Dodson v. Morgan Stanley DW, Inc., No. C06-5669RJB, 2007 WL 3348437, *10, *12 (W. D. Wash. Nov. 8, 2007): Plaintiff provides no statistical support for her pattern and practice claim, including any evidence reflecting percentage comparisons of male and female partners with “lucrative” joint production agreements.... Plaintiff has offered no evidence supporting her claim that Morgan Stanley's policy of allowing financial advisors to subjectively choose partners discriminates against women.
Id.
Given the difficulties in obtaining any relief regarding teaming among Financial Advisors, and the fact that this Settlement nonetheless addresses minority participation on teams, the district court did not abuse its discretion in finding that the Settlement is fair and adequate.
*29 2. The Settlement's Monetary Relief Is Substantial And Meaningful.
a. The Monetary Award Adequately Compensates Class Members Based On Potential Damages And The Court's Proper Finding That Plaintiffs Face Substantial Risks That They Would Not Prevail At Trial.
Judge Henderson's settlement approval findings are sustained by the evidence that the amount of the Settlement bears a reasonable relationship to potential damages and the substantial risks Plaintiffs would face if they attempted to prevail at trial on their claims. ER 334.
Plaintiffs and their expert witnesses estimated that Plaintiffs' claims were worth, at most, $36 million in lost compensation if they prevailed at trial;[FN14] that means, as Judge Henderson concluded, that the settlement represents a “healthy 43%

of possible recovery.” ER352. Plaintiffs' counsel, well experienced in these matters, testified at the preliminary and final approval hearings that they believed the settlement was a “respectable number” compared to “many settlements” and taking into account the “risk of litigation.” ER 13.
FN14. This is based on Plaintiffs proving that the entire average compensation difference is attributable to race discrimination.
Courts may properly rely on plaintiffs' counsel's assessment of the strength and value of their case, especially when the court has found counsel to be highly experienced and to have conducted appropriate investigation of the claims at issue. See In re Mego Fin. Corp. Securities Litig, 213 F.3d 454, 459 (9th Cir. 2000) (approving district court comparison of settlement amount with parties' estimate of recoverable damages in the event of litigation success, and approving of settlement representing only one sixth of the estimated total potential recovery).
*30 In determining whether the settlement is fundamentally fair, adequate and reasonable, the court may consider any or all of the following factors, if applicable: the strength of Plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.
Officers for Justice, 688 F. 2d at 625.
The district court also found that Plaintiffs “would face considerable risk were they to proceed to trial.” ER 111. The record supports that assessment. Plaintiffs, who were employed as Financial Advisors, were not compensated by wages determined by Morgan Stanley; their compensation was based on commissions they earned from the financial services they provided to customers. See ER 1188. Plaintiffs would have difficulty proving that Morgan Stanley's “objectively neutral policies and procedures” improperly denied them equal access to accounts or business opportunities or caused them harm in compensation, terminations, or any other manner. Id. Among Plaintiffs' principal claims is that they were disadvantaged by Morgan Stanley's account distribution policy. However, as Plaintiffs' counsel explained at the preliminary approval hearing, it would be “very difficult” to prove causation because the account distribution policy is “objectively neutral.” ER 13; ER 267. Furthermore, “the percentage that we could have attributed to the account distribution formula was a highly debatable and contentious issue that would have been at the forefront of this litigation.” ER 13. Without a settlement, Plaintiffs would face the “substantial uncertainty and complexity” of trial and a “vigorous defense.” ER 111. Insofar as individual class members claimed lower compensation, or even *31 termination of employment, based on low revenue generation, they would each encounter the high hurdle of proving that these losses were caused by the discriminatory, adverse effects of Morgan Stanley policies, as opposed to their own personal performance and other related issues. ER 115-16 (citing to ER 69, 73, 81).
Acknowledging that Plaintiffs' counsel “have extensive expertise and experience not only with class action discrimination cases, but in litigating employment and discrimination cases against defendants in the financial services industry, including Morgan Stanley,” the court considered the terms of the Settlement in light of Plaintiffs' counsel's well-reasoned and substantiated determination that the issues in the litigation are complex and expensive: The factual and legal issues are complex, as demonstrated by the parties' years of hard-fought litigation and the terms of the Settlement Agreement itself. Any liability phase trial of plaintiffs' claims - which involve thousands of class members employed throughout Morgan Stanley would also be complex and would require substantial additional preparation and many fact and expert witnesses. Remedial phase proceedings would add to this complexity. All of the complex proceedings would be expensive and would result in significant delay before any potential recovery.

DSER 468. Plaintiffs' counsel also determined that further litigation would involve substantial risks to recovery. Litigating the case to trial also presents substantial risks ... it is clear that Morgan Stanley would put on a vigorous defense, and it would ultimately be up to the fact-finder to determine, for example, whether Morgan Stanley acted with a prohibited discriminatory impact that cannot be defended on job relatedness or business necessity grounds.
Id. In contrast to the complexity, delay, risk and expense of continuing litigation, the settlement “will yield a prompt, certain, and substantial recovery for class members.” Id. The amount of the Settlement properly “reflected the risk that plaintiffs would *32 lose at one or more stages of the proceeding or receive less in damages than they requested at trial.” DSER678.
Plaintiffs' counsel's evaluation of the claims was further buttressed by economic experts. In analyzing the claims, Plaintiffs' counsel had access to computerized compensation, as well as account distribution data, promotion, turnover, hiring and incumbency action (“HPJS data”) (ER11) from Morgan Stanley relating to Financial Advisors. Plaintiff engaged the services of a professional labor-economics firm, Econsult, to conduct an extensive analysis of all of the claims in this case, including whether African-American and Latino Financial Advisors were systematically disadvantaged by policies and practices. DSER 665.
Objectors claim Plaintiffs' counsel undervalued potentially recoverable damages by focusing on earnings disparities for current employees rather than potential front pay, emotional distress, denial of promotions, termination of employment, and punitive damages. But in making those arguments, Objectors never address the district court's findings that Plaintiffs would face significant hurdles at trial; that establishing wrongful termination claims would be especially difficult; and that it is appropriate for counsel to focus on the strongest claims when negotiating a settlement. ER 333. Furthermore, Plaintiffs' experts' predicted compensation disparity assumes that all of the disparity is attributable to discrimination and none of it attributable to class members' individual performance and success. Any objector was free to opt out of the settlement, sue, and go to trial if he or she believed a better outcome could thereby be achieved. What objectors may not do is deny class members the chance to participate in a fair and reasonable settlement based on their idiosyncratic beliefs that it could be better.
*33 Objectors further claim that they should have been granted access to all of the materials Plaintiffs' counsel analyzed to value potentially recoverable damages. Objectors, however, have no right to view all documents supporting the settlement. See In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 930-31 (8th Cir. 2005) (upholding class settlement and holding that the district court acted within its discretion by denying objectors access to materials viewed in camera by the court). As discussed further below, Judge Henderson acted within his discretion to protect confidential and privileged information and ruled that, consistent with applicable discovery standards, he had sufficient information before him (including Plaintiffs' expert analysis) without the Objectors' interpretation of Morgan Stanley's confidential data. ER 323. Furthermore, he found that the Objectors were able to meaningfully participate in the settlement approval process without access to the confidential data. Id. Indeed Objectors were able to, and did, express their concerns to the district court at both preliminary and final approval stages. ER 358-69; ER 382-411; DSER 686.
b. The Monetary Award Is Even More Favorable to the Class Than Settlements In Other Comparable Cases.
Judge Henderson's settlement approval findings are supported by court-approved settlements in other similar cases, most notably, those alleging the same type of discrimination and employment claims on behalf of Financial Advisors, with less favorable monetary terms than those here presented. Class members do better under this Settlement than their counterparts do in other cases. At least $14 million, plus accumulated interest, of the $16 million settlement fund in this case is available to be distributed to class members who submit claims, which, assuming full participation by all 1,300 class members, would award each class member on average a payment of *34 approximately $12,000.00. ER 168; ER 117. The actual average amount per claimant, given the 422 claimants and approximately $15.5 million fund, including interest, is over $36,000.

Judge Henderson's decision approving the settlement relied on two cases that sustain his exercise of discretion. The monetary relief here exceeds that in Amochaev v. Citigroup Global Markets, Inc., C-05-1298-PJH (N.D. Cal. August 13, 2008), a gender discrimination case, in which female financial advisors complained that their employer, Citigroup Global Markets, used a power ranking compensation system and distributed business opportunities in a manner that unfairly affected women. See Amochaev Dkt 186, p. 25. There, another Northern District of California district judge approved a $25 million settlement fund available to 2,400 class plaintiffs. At the time the settlement in Amochaev was negotiated and preliminarily approved, and assuming full participation by the entire class, that fund would have distributed to each member an average payment of $10,416.00. See ER 117; see Amochaev Dkt 186, p. 20.[FN15] Thus, the payment in the instant case exceeds that which was approved in Amochaev.
FN15. See also Glass v. UBS, 2007 U.S. Dist. LEXIS 8476, *15 (N.D. Cal. Jan. 26, 2007) (failure to pay overtime settlement; court approved an average per capita payment of $2,553.00).
In the Augst-Johnson case, where $32 million of a $46 million fund was available to 2,800 class members, assuming full class participation, the resulting per capita payment would have been approximately $11,400.00. ER 896; ER 939; see also ER 117. Thus, the per class member monetary relief in the instant case is higher.
*35 Objectors assert that the Cremin and Martens cases are comparable and were settled for a greater monetary amount. DSER 261; DSER 125. This is simply not true.
First, the Cremin and Martens settlements are not proper comparators because they were reached over a decade ago when the employment policies and practices at issue were very different. Moreover, those settlements did not provide automatic or formulaic settlement fund distribution for all class members who submitted claims. Rather, participating class members had to individually prove that they were victims of sex discrimination and/or sexual harassment in order to receive any money. See DSER 285-90; DSER 281-85.
Second, Objectors provide no evidence that Martens settled for “over $100 million.” Objectors' Brief 45. That settlement itself provided no set amount -- only a dispute resolution procedure. See DSER 281-85.
Third, even if Objectors' claim is true, that the Martens settlement resulted in a recovery of $100 million, that amount would only be $4,545 per class member (given the class of 22,000) (2003 U.S. Dist. LEXIS 11587, *3 (S.D.N.Y. 2003)) -- significantly less than the per capita $12,000 per class member here. See ER 112.
The settlement in EEOC/Schieffelin v. MSDW[FN16] is also not comparable. First, that case did not involve Morgan Stanley employees who are compensated on the basis of a facially neutral formula, like the commission-based system used for Financial Advisors. Unlike the present case, the highly paid institutional securities traders involved in EEOC/Schieffelin receive a salary and discretionary bonus, *36 determined by Morgan Stanley. See RJN Exh. G. Thus, the manner and means of compensation, and therefore the issues in the litigation, cannot be compared to the Jaffe Plaintiffs. Furthermore, EEOC/Schieffelin also included claims of gender discrimination with respect to promotion to officer positions. The risks in defending EEOC/Schieffelin were also far greater, because the compensation system was completely within Morgan Stanley's control and discretion (RJN Exh. G), the EEOC was itself a plaintiff (RJN Exh. E), and there were allegations of actual sexual harassment (RJN Exh. F). Also, the settlement was different because claimants had to have their claims favorably adjudicated by a special master before they could receive anything. RJN Exh. H. Unlike the EEOC/Schieffelin class members, clearly the Jaffe class members have received a substantial benefit in not having to prove their claims through a Special Master process in order to receive any monetary relief. And, finally, while the intervenor, Schieffelin, received a large payment, she was a successful bond seller, who earned more than $1.3 million a year at the time she first

complained that she had been denied a promotion to managing director because of her sex. She also claimed that she was terminated in retaliation for raising a discrimination claim. RJN Exh. G.
FN16. Objectors cite only to the docket of EEOC/Schiefflin, Case No. 01-cv-8421 (S.D.N.Y.) in their brief, but improperly include in the Excerpts of Record a press release regarding the settlement. ER 589-90. This press release should be stricken and Objectors' argument on this issue ignored. See Motion to Strike.
The remaining examples that Objectors cite are not properly before this Court because they are not part of the district court record, and are covered by the accompanying Motion to Strike. But even if these improperly submitted materials are considered, they provide no basis to find that Judge Henderson abused his discretion. The settlements in Zojaji and Zubulake, and the individual awards in Cremin, are not comparable. Each involved the claim of only a single plaintiff. See ER 633-73; ER 728; ER 730. Neither the Zojaji nor Zubulake cases were settled at all. In Zojaji, *37 an arbitration panel awarded a former Merrill Lynch employee $1.6 million after he complained of being fired because of his ethnicity. ER728. In Zubulake, a jury found sex discrimination and retaliation on the part of defendant UBS and awarded $29 million, including sizeable punitive damages. ER 730.
The individual awards in the Cremin-class cases, including the award to Cremin herself, are not comparable because in order for the individual plaintiffs in that class action case to receive settlement money, they had to establish their claims individually, at mini-trials before arbitrators, by presenting evidence. ER 634. No such process or evidentiary standards have been incorporated into the Jaffe Settlement. Absence of this extra administrative step requiring individuals to prove their claims benefits the entire class.
c. The Monetary Relief is Fair to All Members of the Class.
Judge Henderson's settlement approval findings are supported by evidence that the settlement treats African-American and Latino class members fairly. For example, the structure of the payment calculation formula under the Settlement supports the district court's decision. Length of employment at Morgan Stanley is a neutral element of the settlement formula, and is logically connected to the idea that those with longer periods of employment likely suffered greater effects from the practices at issue.
With regard to claims that particular African-American or Latino class members have experienced higher attrition rates or termination because of low productivity caused through account distribution disparities, these claimants may seek additional monetary relief through the claims process. ER 172.
*38 In addition, payments to individual class members can be further enhanced by the earnings regression component of the Settlement's monetary relief: additional funds are payable to those class members whose annual earnings during the covered period fell a certain percentage below a formula tied to the mean earnings of white Financial Advisors. ER 171-72. Further still, additional compensation may be awarded to class members who can show extreme emotional distress.
In short, the record supports the district court's decision. Far from establishing any abuse of discretion, Objectors improperly rely upon materials that were not before the district court, like the declaration of their retained expert, Jerry Goldman. Objectors' Brief 38 (citing to ER 511-15). They fail to articulate, even on appeal, why the record materials relied on by the district court do not sustain Judge Henderson's findings in light of the deferential standards of review governing this appeal.

3. The Vast Majority of Class Members Support The Settlement.
Judge Henderson's settlement approval findings are supported by the “reaction of the class members to the proposed settlement,” Hanlon, 150 F.3d at 1026, and what even Objectors' counsel termed as the “very high” level of acceptance of the settlement among class members. ER 112.
Here, out of approximately 1,300 class members, 422 -- roughly 31% of the class -- submitted claims forms, evidencing their desire to participate in the monetary recovery provided by the settlement, rather than pursue their own claims or seek larger recoveries by way of objection. ER 112. Of the remainder, “nine have chosen to remain class members but lodge objections, and only 24 have opted out.” ER 112; see also DSER 422.
*39 Just because 24 class members opted out does not mean they all opposed the settlement. People opt out of class settlements for all sorts of reasons, including that they want no part of the litigation of the claims they do not find meritorious. That so few class members have opted-out, objected, or filed individual lawsuits is a factor supporting Judge Henderson's decision and showing he did not abuse his discretion.
Despite the overwhelming support the Settlement received from the majority of the class members, Objectors attempt to attack the fairness of the negotiations leading to the Settlement, by speculating that Morgan Stanley manipulated the process by conducting sham negotiations with the Moore Group regarding class claims, while also negotiating with Plaintiffs. There is simply no evidence to support this unfounded allegation. As counsel for Plaintiffs informed the court, Williams filed an amended EEOC Charge in November of 2006, received a right-to-sue letter in December of 2006 and informed Morgan Stanley of class-wide claims in January of 2007. This chain of events led to the entry of a tolling agreement by the parties and the beginning of the mediation process in February of 2007, months prior to Morgan Stanley's negotiations with the Moore Group. ER 848. The record is further clear that Morgan Stanley agreed to mediation of only individual claims for each of the Moore Group members. ER 850-51. Morgan Stanley never mediated a class-wide settlement with the Moore Group. Indeed, the Moore/Morgan Stanley settlement negotiations centered around individual monetary relief only. ER 271-72. As the district court properly concluded upon review of this record evidence: [I]'m certainly at this point satisfied that the settlement is not the product of fraud or collusion. I base this conclusion on the declarations of the Jaffe parties' counsel, on the statement of the mediator Mr. Hughes and on the timing of the EEOC Charge and subsequent tolling agreement for class race discrimination claims.
*40 ER 6-7. Thus, the Moore Group is without a basis to challenge the court's finding or to invalidate this settlement by conjuring scenarios in which they claim to have been misled during settlement negotiations. None of Morgan Stanley's interactions with the Moore Group call into question the district court's findings regarding the fairness of the settlement.
Objectors also highlight the opt out of class representative Denise Williams as a reason the settlement is purportedly unfair. However, objections by class representatives do not automatically invalidate a settlement or call for its disapproval. See, e.g., Flinn v. FMC Corp., 528 F.2d 1169, 1174 (4th Cir. 1975) (no abuse of discretion in approving sex discrimination class action settlement where three of the original five plaintiffs objected); Olden v. Gardner, 294 Fed. Appx. 210, 216 (6th Cir. 2008) (affirming district court-approved settlement even though original class representatives did not oversee settlement negotiations and all were removed as representatives at class counsel's request); Heit v. Van Ochten, 126 F.Supp.2d 487, 494 (W.D. Mich. 2001) (proposed settlement approved after original class representative objected). In fact, the court in Martens v. Smith Barney, 190 F.R.D. 134 (S.D.N. Y. 1999), a case in which the class was represented by Objectors' counsel, approved the settlement agreement even after the named Plaintiff opted out of the class and challenged the settlement agreement. Id. at 138-39. For Objectors to point to Williams' objection as indicative of this settlement's unfairness is meritless.

C. The Record Supports The District Court's Exercise Of Discretion To Deny Further Discovery.
“The fundamental question” when deciding whether to permit settlement objectors to conduct discovery as part of a class action settlement approval process “is *41 whether the district judge has sufficient facts before him to intelligently approve or disapprove the settlement.” Hemphill v. San Diego Assoc. of Realtors, Inc., 225 F.R.D 616, 619-620 (S.D. Cal. 2005) (citing In re General Tire, 726 F.2d at 1084 n.6). When, as here, the existing record equips the district court to assess the proposed settlement, this Court will not disturb a decision to deny discovery to objecting parties. United States v. Oregon, 913 F.2d 576, 582 (9th Cir. 1990). As Hemphill explains, 225 F.R.D. at 619-620: Class members who object to a class action settlement do not have an absolute right to discovery; the Court may, in its discretion, limit the discovery or presentation of evidence to that which may assist it in determining the fairness and adequacy of the settlement.” Id. (citing, e.g., In re Domestic Air Transp. Antitrust Litig., 144 F.R.D. 421, 424 (N.D. Ga. 1992)). Objectors “are not automatically entitled to discovery or ‘to question and debate every provision of the proposed compromise.’ ” Id. (quoting In re General Tire & Rubber Co. Sec. Litig., 726 F.2d 1075, 1084 n.6 (6th Cir. 1984)). They should be allowed “meaningful participation in the fairness hearing without unduly burdening the parties or causing an unnecessary delay.” Id. (quoting In re Domestic Air, 144 F.R.D. at 424).
See also 4 Newberg on Class Actions §11:57 at 184 (4th ed. 2002) (when a class-member objector to a proposed settlement requests discovery, “it is within the Court's discretion to limit the proceedings to whatever is necessary to aid it in reaching an informed, just and reasoned decision”) (quoting Glicklen v. Bradford, 35 F.R.D. 144, 148 (S.D.N.Y. 1964)).
Objectors have no right to view all documents supporting settlement. In In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 930-31 (8th Cir. 2005), the court upheld the class settlement and held that the district court did not abuse its discretion by denying objectors an opportunity to review sensitive materials provided to the court in chambers.
*42 Discovery was properly denied based on Judge Henderson's findings that he had sufficient facts to evaluate the settlement and that the Objectors were already able to meaningfully participate[FN17] in the settlement approval process without more information. ER 323.[FN18] In fact, Judge Henderson permitted extensive testimony from the objectors at both the preliminary and final approval hearings.[FN19]
FN17. Of the pages of hearing transcript substantively addressing the settlement and settlement approval process, testimony on behalf of the Objectors accounts for nearly 40% of the preliminary approval hearing (ER 103) and approximately 60% of the final approval hearing (ER 236-320).
FN18. Objectors sought access to Morgan Stanley's confidential workforce and HRIS data (which was provided to Plaintiffs as part of the settlement negotiations); other confidential information regarding Morgan Stanley's diversity initiatives, details of its Power Ranking formula, and internal adverse impact studies; as well as the ability to cross examine Curtis-Bauer regarding her participation as a class representative and the details of her individual claims. ER 795-96.
FN19. After hearing Objectors' concerns, he determined not to entertain a discovery fishing expedition. At the preliminary approval stage, Objectors expressed that they could not articulate their objections to the settlement, but that they needed all discovery obtained by Plaintiffs' counsel in order to determine if they had any objections. ER 97-99. In his 27 years on the bench, Judge Henderson had never been asked by class settlement objectors, as he was in this case, to first provide them with all discovery obtained by class plaintiffs and then wait to hear the actual reasons for objection to the settlement. ER 99.

These issues are properly considered against the backdrop of the district court's findings: lack of a collusive settlement; arms'-length negotiation; and a class represented by able and experienced counsel. ER 331-32.
Based on declarations from Plaintiffs' counsel and the court's in camera inspection of the Plaintiffs' experts' analysis, the court reasonably found that the Objectors had no right to Morgan Stanley's confidential data. ER 333. Despite Objector's alleged need for the information in order to attack the Settlement Agreement's inclusion of both African Americans and Latinos in a settlement class, the court reasonably concluded that the groups were affected similarly enough with *43 respect to compensation to be fairly represented in one provisional settlement class. Id. It also evaluated the Settlement Agreement's provisions for awards to individual class members and concluded that they account for earnings differentials and potentially higher rates of terminations among African Americans as compared to Latinos. Id.
The district court also found, as discussed above, no evidence suggesting collusion during the settlement negotiations process to necessitate discovery regarding the details of the negotiations process. ER 321; ER 332. As a result of determining that it could evaluate the Settlement without the requested discovery, the court reasonably concluded that the discovery “would cause unnecessary delay” to the proceedings. ER 323.
VI. CONCLUSION
Judge Henderson properly exercised his discretion when he fully considered the fairness of the settlement negotiations, the competency of Plaintiffs' counsel, the risk of proceeding with the case to trial, and the reaction of class members to the Settlement terms before approving the Settlement Agreement. The record supports the district court's decision that the Settlement terms were reached as a result of a fair and adversarial process.
The district court thoroughly reviewed the programmatic relief, finding it to be substantive, meaningful and valuable. The record supports the district court's determination that the Settlement provides substantial and meaningful relief to African-American and Latino Financial Advisors, the benefit of which they would not have without this Settlement. The court carefully reviewed the monetary terms of the Settlement, comparing it to the amounts in similar cases and ensuring that the *44 recovery amount was proportionate to the maximum possible recovery. The record also fully supports the district court's decision that the monetary terms were fair and adequate to all class members, African Americans and Latinos alike.
Finally, Judge Henderson properly exercised his discretion in denying further discovery to Objectors who had meaningful participation in the settlement approval process, as the district court had sufficient facts before it to intelligently approve the Settlement. For these reasons, this Court should affirm Judge Henderson's decision in the district court.
Daisy JAFFE; Margaret Benay Curtis-Bauer, Plaintiffs - Appellees, v. Jonathan GLOVER; Latrissa Gordon; Marilyn White; Peter Meme; Marshell Miller; Jerome Senegal; Hubert Stalling; Lanta Evans-Mott; Carlton McDowell; Sarah Nyamuswa; Theron Cyrus, Objectors - Appellants, v. Morgan Stanley & Co. Incorporated, Defendant - Appellee. 2010 WL 685873 (C.A.9 ) (Appellate Brief )
END OF DOCUMENT

 
 United States Court of Appeals, Ninth Circuit. Daisy JAFFE; Margaret Benay Curtis-Bauer, Plaintiffs - Appellees,
v. Jonathan GLOVER; Latrissa Gordon; Marilyn White; Peter Meme; Marshell Miller; Jerome Senegal; Hubert
Stalling; Lanta Evans-Mott; Carlton McDowell; Sarah Nyamuswa; Theron Cyrus, Objectors - Appellants, v.
Morgan Stanley & Co., Inc., Defendants - Appellees. No. 08-17599.
January 28, 2010.
Appeal from Entry of Final Judgment by the United States District Court for the Northern District of California, D.C. No. 3:06-cv-03903-TEH, Entered on October 22, 2008
Brief of Plaintiffs - Appellees
James M. Finberg, Eve H. Cervantez, P. Casey Pitts, Altshuler Berzon LLP, 177 Post Street, Suite 300, San Francisco, CA 94108, T: (415) 421-7151, F: (415) 362-8064, jfinberg@altber.com, ecervantez@altber.com, cpitts @altber.com, Kelly M. Dermody, Lieff, Cabraser, Heimann & Bernstein LLP, Embarcadero Center West, 275 Battery Street, 29th Floor, San Francisco, CA, 94111-3339, Tel. (415) 956-1000, Fax. (415) 956-1008, kdermody@lchb.com, Adam T. Klein, Outten & Golden LLP, 3 Park Avenue, 29th Floor, New York, NY 10016, T: (212) 245-1000, F: (212) 977-4005, atk@outtengolden.com, Attorneys for Plaintiffs - Appellees.
*i TABLE OF CONTENTS
TABLE OF AUTHORITIES ... ii
JURISDICTION ... 1
LOCAL RULE 28-2.6 ... 1
ISSUES PRESENTED FOR REVIEW ... 1
STANDARD OF REVIEW ... 3
STATEMENT OF FACTS ... 4
I. The Comprehensive Remedy Afforded by the Settlement Addresses the Allegedly Discriminatory Practices at Morgan Stanley ... 6
II. The Experienced District Judge Carefully Examined All Aspects of the Proposed Settlement Before Certifying the Settlement Class and Granting Final Settlement Approval ... 9

SUMMARY OF ARGUMENT ... 20
ARGUMENT ... 22
I. The District Court Did Not Abuse its Discretion by Provisionally Approving a Settlement that Easily Fell Within the Range of Possible Settlement Approval ... 22
A. The Settlement Was the Result of Arms' Length Negotiations ... 23
B. Informal Discovery, Data Collection, Expert Analysis, and Class Member Interviews Established an Extensive Evidentiary Record in Support of the Settlement ... 27
II. The District Court Did Not Abuse its Discretion in Certifying the Class ... 28
A. The Class Representatives Adequately Represented the Interests of Absent Class Members ... 29
*ii 1. Ms. Curtis-Bauer's Interests Are Consistent with Those of the Class ... 30
2. Ms. Curtis-Bauer Adequately Represented Both African American and Latino Class Members ... 32
3. Ms. Curtis-Bauer Is an Engaged and Informed Class Representative ... 34
4. The Combined Participation of Ms. Williams And Ms. Curtis-Bauer Was More Than Sufficient To Satisfy Rule 23(a)(4) ... 38
B. Due Process and Rule 23 Did Not Require Ms. Williams' Approval of the Settlement ... 38
C. Ms. Curtis-Bauer's Claims Are Typical of the Class Claims ... 41
III. The District Court Did Not Abuse its Discretion in Granting Final Approval to the Settlement Agreement ... 43
A. The Settlement Was Reached After Arms' Length Negotiations, Plaintiffs Faced Considerable Risks at Trial, Experienced Class Counsel Considered the Settlement Proper, and Class Member Reaction Was Overwhelmingly Positive ... 44
B. The Injunctive Relief Is Substantial, Meaningful, and Valuable to the Class ... 45
C. The Monetary Relief Is Fair and Adequate ... 48

IV. The District Court Did Not Abuse its Discretion in Denying Objectors' Requests for Discovery ... 52 CONCLUSION ... 56
*iii TABLE OF AUTHORITIES FEDERAL CASES Acosta v. Trans Union LLC 243 F.R.D. 377 (C.D. Cal. 2007) ... 55 Alexander v. Gardner-Denver Co. 415 U.S. 36 (1974) ... 24 Amchem Products, Inc. v. Windsor 521 U.S. 591 (1997) ... 28, 33 In re Arizona 528 F.3d 652 (9th Cir. 2008) ... 4 Bartlelson v. Dean Witter & Co. 86 F.R.D. 657 (E.D. Pa. 1980) ... 33 Boyd v. Bechtel Corp. 485 F. Supp. 610 (N.D. Cal. 1979) ... 23 Culpepper v. Reynolds Metals Co. 421 F.2d 888 (5th Cir. 1970) ... 24 In re Domestic Air Transport Antitrust Litigation 144 F.R.D. 421 (N.D. Ga. 2004) ... 55 Dodson v. Morgan Stanley DW, Inc., No. C06-5669 RJB, 2007 WL 3348437 (N.D. Wash. Nov. 8, 2007) ... 48 Dondore v. NGK Metals Corp. 152 F. Supp. 2d 662 (E.D. Pa. 2001) ... 39 Dream Games of Arizona, Inc. v. PC Onsite 561 F.3d 983 (9th Cir. 2009) ... 12 Fleury v. Richemont North America, Inc. No. C-05-4525, 2008 U.S. Dist. LEXIS 64521 (N.D. Cal. July 3, 2008) ... 40 *iv Gaines v. Boston Herald Inc. 998 F. Supp. 91 (D. Mass. 1998) ... 34 General Building Contractors Ass'n, Inc. v. Penn. 458 U.S. 375 (1982) ... 44 In re General Motors Corp. Engine Interchange Litigation 594 F.2d 1106 (7th Cir. 1979) ... 55

In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768 (3d Cir. 1995) ... 25 General Telegraph Co. of Southwest v. Falcon 457 U.S. 147 (1982) ... 37 Glicken v. Bradford 35 F.R.D. 144 (S.D.N.Y. 1964) ... 52, 53 Gulf Oil Co. v. Bernard 452 U.S. 89 (2001) ... 24 Hanlon v. Chrysler 150 F.3d 1011 (9th Cir. 1998) ... 3, 41, 43 Hanon v. Dataproducts Corp. 976 F.2d 497 (9th Cir. 1992) ... 41 Heit v. Van Ochten 126 F. Supp. 2d 487 (N.D.Mich. 2001) ... 40 Hemphill v. San Diego Ass'n of Realtors, Inc. 225 F.R.D. 616 (S.D. Cal. 2005) ... 52, 54, 55 Ingrahm v. Coca-Cola Co. 200 F.R.D. 685 (N.D. Ga. 2001) ... 30 Jones v. Milwaukee County 68 F.R.D. 638 (E.D. Wis. 1975) ... 34 *v Knowles v. Mirzayance 129 S. Ct. 1411 (2009) ... 44 Krim v. pcOrder.com, Inc. 210 F.R.D. 581 (W.D. Tex. 2002) ... 36 Leonard v. Southtec, LLC No. 3:04-0072, 2005 WL 640 (E.D. Wis. 1975) ... 34 Local Joint Exec. Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152 (9th Cir. 2001) ... 35, 36 In re Lorazepam and Clorazepate Antitrust Litigation 205 F.R.D. 24 (D.D.C. 2001) ... 55 Lurns v. Russell Corp. 604 F. Supp. 1335 (M.D. Ala. 1984) ... 32 Macklin v. Spector Freight Systems, Inc. 478 F.2d 979 (D.C. Cir. 1973) ... 24 Martens v. Smith Barney, Inc., No. 96 Civ. 3779, 2003 U.S. Dist. LEXIS 11587 (S.D.N.Y. 2003) ... 49

In re McKesson HBOC, Inc. Sec. Litigation 126 F. Supp. 2d 1239 (N.D. Cal. 2000) ... 39 In re Mego Finance Corp. Sec. Litigation 213 F.3d 454 (9th Cir. 2000) ... 25, 30 Molski v. Gleich 318 F.3d 937 (9th Cir. 2003) ... 3 New Directions Treatment Services v. City of Reading 490 F.3d 293 (3d Cir. 2007) ... 35 N.O.W. v. Bank of California No. C-72-441 RFP, 1972 WL 246 (N.D. Cal. 1972) ... 34 Officers for Justice v. Civil Serv. Commission 688 F.2d 615 (9th Cir. 1982) ... passim *vi Olden v. LaFarge Corp. 472 F. Supp. 2d 922 (E.D.Mich. 2007) ... 40 Parker v. Anderson 667 F.2d 1204 (5th Cir. 1982) ... 39 Parra v. Bashas', Inc. 536 F.3d 975 (9th Cir. 2008) ... 28 Payne v. Travenol Laboratories, Inc. 673 F.2d 798 (E.D. Cal. 1980) ... 33 Reynolds v. Beneficial National Bank 260 F. Supp. 2d 680 (N.D. Ill. 2003) ... 55 Saylor v. Lindsley 456 F.2d 896 (2d Cir. 1972) ... 39, 40 Scardelletti v. Debarr 265 F.3d 195 (4th Cir. 2001) ... 22 S.E.C. v. Randolph 736 F.2d 525 (9th Cir. 1984) ... 25 Staton v. Boeing Co. 327 F.3d 938 (9th Cir. 2003) ... passim Swift v. First USA Bank No. 98 C8238, 1999 WL 1212561 (N.D. Ill. Dec. 15, 1999) ... 32 Tennie v. City of N.Y. Dep't. of Social Servs. No. 83 Civ. 0884 (MEL), 1987 WL 6156 (S.D.N.Y. 1987) ... 34 United States v. Hinkson 585 F.3d 1247 (9th Cir. 2009) ... passim

United States v. Oregon 913 F.2d 576 (9th Cir. 1990) ... 25 Wofford v. Safeway Stores, Inc. 78 F.R.D. 460 (N.D. Cal. 1978) ... 36 *vii FEDERAL STATUTES 28 U.S.C. § 1291 ... 1 28 U.S.C. § 1331 ... 1 28 U.S.C. § 1343 ... 1 28 U.S.C. § 1367 ... 1 42 U.S.C. § 2000e-5(f) ... 1 Fed. R. Civ. P. 23 ... passim Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4(a) ... 37 MISCELLANEOUS 4 New berg on Class Actions § 11:57 ... 52 8 Newberg on Class Actions § 24.129 ... 30, 42 8 Newberg on Class Actions§ 24.54 ... 34 Douglas R. Richmond, Class Actions and Ex Parte Communications: Can We Talk?, 68 Mo. L. Rev. 813 (2003) ... 39 Manual for Complex Litigation, Third, § 30.24 ... 39 Manual for Complex Litigation, Fourth,§ 21.643 ... 52 Stephen B. Murray & Linda S. Harang, Selection of Class Counsel: Is It a Selection of Counsel for the Class, or a Selection of Counsel with Class?, 74 Tul. L. Rev. 2089 (2000) ... 39

*1 JURISDICTION
The district court had jurisdiction under 28 U.S.C. §§ 1331, 1343, and 1367, and 42 U.S.C. § 2000e-5(f)(3). This Court has jurisdiction under 28 U.S.C. § 1291. The district court entered final judgment on October 22, 2008, and Objectors filed a timely notice of appeal. ER 104-218, 219-21, 354.
LOCAL RULE 28-2.6
Plaintiffs - Appellees have no knowledge of any other pending cases before the Court related to the issues herein.
ISSUES PRESENTED FOR REVIEW
1. Whether Judge Henderson abused his discretion by granting preliminary approval to a settlement of race discrimination claims, negotiated at arms' length by experienced counsel after filing a class charge of race discrimination with the EEOC and then conducting seven months of factual investigation and legal analysis, when the settlement, reached with the assistance of an experienced neutral mediator, provides strong injunctive and monetary relief, with relatively modest attorneys' fees, such that it easily falls within the range of possible settlement approval.
2. Whether Judge Henderson abused his discretion by certifying a settlement class of African-American and Latino Financial Advisors and Registered Financial Advisor Trainees affected in the same manner by a common policy, when the extensive evidence before him provided a solid basis for his express findings that all of the requirements of Rule 23 were satisfied, including that the class representative was adequate.
3. Whether Judge Henderson abused his discretion by granting final approval to a settlement providing comprehensive injunctive relief and $16 million in monetary relief to a class of approximately 1,300, when he applied the correct legal standard and expressly found that the factors enumerated by the Ninth Circuit all supported final approval:
a) “Plaintiffs would face considerable risks were they to proceed to trial” because Morgan Stanley's allegedly discriminatory policies were “objectively neutral,” and were, in any event, only one of a number of factors affecting compensation, ER 111;
b) “[t]he settlement was reached after extensive investigation, analysis, and arm's-length negotiation,” id.;
c) “Plaintiffs' counsel have extensive experience and experience not only with class action discrimination cases, but in litigating employment and discrimination cases against defendants in the financial services industry,” id.;
d) the reaction of the class members “weigh[ed] in favor of approval” because only 9 lodged objections and 24 opted out, while 422 submitted claims, ER 112;
e) the injunctive relief provided “represents an expansion of the relief provided in the settlement of a parallel gender discrimination case against Morgan Stanley ... and is substantive, meaningful, and valuable to the class,” ER 112-13; and

f) the monetary relief represented approximately 43% of the disparity in compensation that was the basis for the allegations in the complaint, and was comparable to, or greater than, monetary awards in similar discrimination suits against financial services firms, ER 117, 333.
4. Whether Judge Henderson abused his discretion by denying the nonparty objectors' motion for extensive, burdensome, time-consuming, and duplicative discovery, when “Objectors ... had meaningful participation in the settlement proceedings, the Court ha[d] sufficient facts before it to intelligently evaluate the settlement, and discovery would [have] cause[d] unnecessary delay.” ER 323.
STANDARD OF REVIEW
The “decision to approve or reject a [class] settlement is committed to the sound discretion of the trial judge because he is ‘exposed to the litigants and their strategies, positions, and proof.’ ” Hanlon v. Chrysler, 150 F.3d 1011, 1026 (9th Cir. 1998); Officers for Justice v. Civil Serv. Comm'n 688 F.2d 615, 625-26 (9th Cir. 1982). This Circuit “review[s] a district court's decision to approve a class action settlement for a clear abuse of discretion.” Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 2003). The district court's class certification is reviewed for an abuse of discretion. Id. at 946. Likewise, “district courts have wide latitude in *4 controlling discovery, which [this Court] review[s] for an abuse of discretion.” In re Arizona, 528 F.3d 652, 655 (9th Cir. 2008).
If a trial court has identified the correct legal rule, it abuses its discretion only if its “application of the correct legal standard was (1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from facts in the record.” United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc) (citations omitted). A district court's factual findings are reviewed for clear error and must be accepted if they fall within “any of the permissible choices the court could have made” based on the record. Id. at 1261-62.
STATEMENT OF FACTS
The Second Amended Complaint in this action alleges that the policies and practices through which Defendant Morgan Stanley distributed business opportunities, investment accounts, and sales support under its control to its Financial Advisors and Registered Financial Advisor Trainees (collectively “FAs”) had the effect of distributing accounts and other business opportunities to white FAs to the disadvantage of African-American and Latino FAs (“minority FAs”). Because FAs were generally paid by commission, those policies and practices substantially reduced the compensation of minority FAs. ER 1182-83.
The settlement in this case reduces the emphasis on historic factors, such as assets under management, in the formula used by Morgan Stanley to distribute the accounts of departing brokers, such that the formula no longer has a disparate impact on minorities. ER 851-52. The settlement also provides substantial additional injunctive relief, including providing assistance to FA Trainees in their efforts to pass the licensing exam, expanding recruitment of minority FA Trainees, studying the reasons why minority FAs leave the company, and monitoring whether managers take steps to improve opportunities for minority FAs. ER 151-67. The settlement provides $16 million in monetary relief; under the proposed settlement, the 422 persons who submitted claims will receive average awards of approximately $33,000.[FN1] The attorneys' fees of $800,000 for work done through entry of the Settlement Agreement were only 5% of the Settlement Fund obtained and were less than the lodestar value of class counsel's work, PSER 170, 222, 248; even with the payment of $150,000 a year to class counsel to monitor Morgan Stanley's compliance, the total attorneys' fees are less than 10% of the Settlement Fund. ER 168-78, 182.
FN1. The average recovery will in fact be greater because of the significant interest that has accrued since

February 2008. See infra note 3. The district court exercised an extraordinary degree of care in determining whether to approve the proposed settlement, twice postponing decisions until the parties had submitted additional evidence. ER 222, 233-34, 345-53. After preliminary approval, more than 31% of the approximately 1,300 class members submitted claims, while only 24 class members opted out and 9 lodged objections. ER 112. The district court subsequently granted final certification to the class and final approval to the class settlement. ER 107-08. Class members who objected to the proposed settlement but did not exercise their right to opt out (hereinafter “Objectors”) appeal the district court's certification of the class and its preliminary and final approval of the settlement.
I. The Comprehensive Remedy Afforded by the Settlement Addresses the Allegedly Discriminatory Practices at Morgan Stanley.
The Settlement Agreement negotiated between the parties and approved by the district court provides comprehensive injunctive relief and very substantial monetary relief.
Perhaps most important, the Settlement Agreement requires a comprehensive revision of the “Power Ranking” system used by Morgan Stanley to distribute the accounts of departing FAs. The old system disadvantaged minority FAs by relying largely on historical measures of performance, such as assets under management. Pursuant to the settlement, Morgan Stanley will revise the Power Ranking formula to reduce its reliance on historical factors.[FN2] ER 115, 154. Morgan Stanley will also inform each FA of his or her individual ranking whenever a distribution is made, and permit FAs to review the actual distribution of a departing FA's book. ER 155. The Settlement Agreement requires that Morgan Stanley review the account distribution system annually to evaluate its impact on minority FAs. ER 155-56.
FN2. The settlement of a gender discrimination action against Morgan Stanley, Augst-Johnson v. Morgan Stanley, was granted final approval by the District Court for the District of Columbia on October 26, 2007. ER 938. That settlement created a new Power Ranking formula to distribute the accounts of departing FAs. The new system reduced the use of historical factors in such assignments. Since the use of historical factors in the new formula still had an adverse impact on minorities, however, class counsel in this case successfully negotiated an even further reduction of reliance on historical factors in the Power Ranking formula. ER 115, 851. The Settlement Agreement also mandates a number of programs for training, re-education, and other developmental programs for minority FAs over its five-year term, including requiring that Morgan Stanley:
(a) maintain a dedicated position whose primary function is the sourcing and recruiting of qualified diverse candidates, and develop sourcing alternatives for qualified minority FAs, ER 152;
(b) develop initiatives to attract and retain minority FAs and to enhance their success, ER 161;
(c) include in Branch Manager compensation a meaningful diversity component designed to measure and reward efforts to diversify representation rates, and require a quarterly self-assessment of such efforts and monitoring of those efforts by an independent diversity monitor, ER 153-54;
(d) post available field sales management positions and their minimum requirements on an Internal Job Bank and provide email notifications to interested FAs, ER 152;
(e) provide diversity training to all management-level field personnel, and incorporate elements of the Implicit

Association Test or a similar tool into the diversity-related training provided to field sales branch management, ER 153;
(f) appoint an independent diversity monitor to evaluate Morgan Stanley's efforts to implement the settlement and appoint two named industrial psychologists to work with Morgan Stanley and class counsel to improve the representation and success rates of minority FAs at Morgan Stanley, ER 162-67;
(g) provide additional assistance to FA Trainees in passing the Series 7 licensing exam, ER 153; and
(h) interview FAs who leave Morgan Stanley and report the results to the industrial psychologists and the diversity monitor, ER 161.
To remedy the past effects of Morgan Stanley's policies and practices, the settlement establishes a Settlement Fund of $16 million plus 5% per annum interest from the date of Preliminary Approval until resolution of all appeals. ER 139-40, 168. In addition, Morgan Stanley will pay its share of payroll taxes and contributions on amounts designated as wages. ER 169. The portion of the Settlement Fund allocated to attorneys' fees of $1,550,000 (which includes $800,000 for time spent preparing the case through final settlement approval and $150,000 per year for five years of monitoring compliance with the terms of the Settlement Agreement) is relatively modest, less than 10% of the Settlement Fund amount. ER 182.
The net Settlement Fund of “well over $14,000,000” will be allocated among the 422 class members who submitted timely and valid claim forms.[FN3] ER 112, 171, 351. Eighty-five percent of the allocation formula is based upon a class member's response to questions in the claim form: Members are awarded 1 point for each week that they worked as an FA during the covered period, up to 50 additional points for extreme emotional distress, and up to 50 additional points for production-related terminations and related claims of constructive discharge. ER 172. The remaining 15% of the formula is allocated on the basis of an Earnings Regression Component, which provides additional funds to those class members whose annual earnings during the covered period fell below an earnings curve set two deviations above the mean earnings curve for white FAs. ER 171.
FN3. The net Settlement Fund is computed as follows: $16 million, plus interest, less the sum of (1) $1,550,000 in approved attorneys' fees and costs; (2) $25,000 in court-approved service payments; (3) a $125,000 payment to Curtis-Bauer to surrender her non-class claims; and (4) less than $50,000 in costs of notice and claims administration. ER 351. Because the settlement was preliminarily approved nearly two years ago, nearly $1.6 million interest has already accrued. The present net value of the Settlement Fund to be distributed to class members is therefore greater than $15.6 million. II. The Experienced District Judge Carefully Examined All Aspects of the Proposed Settlement Before Certifying the Settlement Class and Granting Final Settlement Approval.
The original Complaint in this action was filed by Daisy Jaffe, a white woman, in June 2006. ER 1263. That Complaint alleged that Morgan Stanley's account distribution policies and practices discriminated against female FAs on the basis of their gender. E.g., ER 1264. Denise Williams was added as a named plaintiff on October 10, 2006. ER 1243. The Amended Complaint alleged that Williams was discriminated against on the basis of her race. E.g., ER 1252-54.
On November 2, 2006, Williams, with the assistance of class counsel, filed an EEOC charge alleging class-wide discrimination against minority FAs at Morgan Stanley. PSER 797-99, 943. In January 2007, class counsel informed Morgan Stanley that Williams intended to pursue her claims of race discrimination on behalf of a class of minority FAs. ER 848. Williams and Morgan Stanley entered into a tolling and standstill agreement regarding class claims of race discrimination. ER 855-57.

In January 2007, the district court stayed the class gender discrimination claims in this action because of ongoing settlement negotiations in a parallel gender discrimination class action proceeding in the United States District Court for the District of Columbia, Augst-Johnson v. Morgan Stanley. ER 1212. On April 24, 2007, the parties to Augst-Johnson moved for preliminary approval of a gender discrimination class settlement. PSER 804. The district court in the Augst-Johnson case granted final approval to that settlement on October 26, 2007. ER 938.
From February 2007 through July 2007, the parties to this action engaged in arms' length settlement negotiations, with the assistance of an experienced neutral mediator, regarding class claims of race discrimination. ER 332. Plaintiffs' counsel “discussed settlement terms with Ms. Williams before even entering into settlement discussions” and, throughout the settlement negotiations, “Ms. Williams was kept informed of and consulted about the settlement process....” ER 109; see also ER 1374, 1377, 1380-81, 1383-87; PSER 854-56, 944-46, 951-52, 954, 957-61, 965, 968, 972.[FN4] The mediation was “difficult and time consuming.” PSER 468. Plaintiffs' counsel received a substantial number of documents from Morgan Stanley, including a vast amount of data, and hired experts to conduct numerous analyses of that data. PSER 468; PSER 537-40. The mediator reported, and the district court found, that the parties “advocated their clients' positions vigorously and at arms' length.” PSER 469; ER 332. “[N]egotiations almost reached impasse on more than one occasion when one side or the other chose not to negotiate off. . . principled positions.” PSER 468.
FN4. To avoid burdening this Court with two briefs, Plaintiffs - Appellees will not, unless this Court so requests, specifically discuss the contents of the material filed under seal in the district court and in this Court, but will simply cite those portions of the sealed material that support the district court's factual conclusions. In July 2007, class counsel became concerned about Williams' ability to represent the class adequately. See ER 1362, 1370, 1375-76; PSER 961-62. Margaret Benay Curtis-Bauer, who had contacted class counsel in May 2007, expressed interest in becoming a named plaintiff representing the class of minority FAs. ER 327; PSER 978-79. Curtis-Bauer, an African-American female, was an FA at Morgan Stanley for 13 years, from 1989 until 2002. ER 1185, 1193. As a class representative, Curtis-Bauer understood her duties to the class, evaluated the proposed settlement reached by the parties, and suggested particular provisions for inclusion in the settlement agreement. ER 327; PSER 978-79, 992-94. Specifically, Curtis-Bauer “suggested that Branch Manager compensation should be affected to ensure compliance with the terms of the settlement because money is what motivates Branch Managers” and opined that, “for accounts where the company does not follow the power ranking system due to an ‘exception,’ ... the Branch Manager should be required to give other assets of equal value to the passed over broker to make up for the account that was redistributed.” ER 774. Curtis-Bauer later “confirmed that these suggestions were included in the final settlement agreement.” Id.[FN5]
FN5. Objectors' false assertion that Curtis-Bauer was uninformed and unengaged is based upon declarations involving multiple levels of hearsay that the district court did not permit them to file and that are therefore not properly before this Court. See Plaintiffs - Appellees' Motion To Strike Certain Portions of Objectors Appellants' Excerpts Of Record (hereinafter “Motion To Strike”). Objectors' misrepresentations are directly contradicted by declarations from Curtis-Bauer, her former husband, and class counsel, PSER 422, 424, 978-79, 992-94, and are contrary to the district court's findings regarding Curtis-Bauer's participation, ER 327. This Court must accept the district court's factual findings absent clear error. Hinkson, 585 F.3d at 1260. Because Objectors have not argued that the district court's factual findings were clearly erroneous, that argument is waived. Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983, 994 (9th Cir. 2009). In any event, given the extensive evidentiary support for those findings, Objectors cannot demonstrate that they fell outside “any of the permissible choices the court could have made.” Hinkson, 585 F.3d at 1261. On August 2, 2007, Morgan Stanley and plaintiffs Williams and Curtis-Bauer announced a settlement in principle of the class-wide race and/or color discrimination claims, ER 1213, and stipulated to the filing of the Second Amended Complaint, ER 1207. The Complaint included class-wide claims of race and/or color discrimination, added Curtis-Bauer as a named plaintiff and representative of the class of minority FAs, and named Williams as representative of a class of African-American FAs. ER 1181-1206.
On October 22, 2007, Morgan Stanley and Plaintiffs sought preliminary approval of the proposed settlement and provisional certification of the class. PSER 657. Because Williams had chosen to opt out of the proposed settlement,

PSER 658 n.2, 961-62; ER 105, 109, 1362, 1375-76, Curtis-Bauer, rather than Williams, moved for settlement, class certification, and preliminary settlement approval.
On December 3, 2007, the district court held a several-hour long hearing on Curtis-Bauer's motion for certification of a settlement class and preliminary settlement approval. The district court heard extensive argument from counsel for 18 class members and two non-class members who objected to preliminary settlement approval.
On December 12, 2007, the district court issued an order rejecting many of Objectors' arguments. ER 347-49, 351. The court found that the settlement negotiations in this action were non-collusive and at arms' length: “[T]he Court finds no collusion.... [M]ediator Hunter Hughes submitted a detailed statement confirming that the negotiation of this settlement was at arm's length.” ER 350 n.2. The court also found that “[t]here has been no showing that Curtis-Bauer is an unsuitable class representative for Latinos,” concluding that an African American can represent a class of Latinos and African Americans where, as here, the challenged policies and practices affected both groups in the same manner. ER 347-48. As to the proposed injunctive relief, the court “[was] satisfied that the injunctive relief package is not simply a ‘carbon copy’ of the relief Morgan-Stanley has already agreed to in the Augst-Johnson settlement. The programmatic relief set out in sections VII.B., VII.C, VII.D.2.d, VII.E and VII.G appears to represent a genuine expansion rather than a dilution of relief already ordered in Augst-Johnson.” ER 350. As to monetary relief, the court rejected Objectors' arguments based on inapposite settlements involving arbitration proceedings, ER 351 n.4, and found that the $16 million provided in the proposed settlement was, according to statements of counsel, “a healthy 43% of the possible recovery.” ER 352. Instead of relying on statements of counsel, however, the court “invite[d] the Plaintiffs to submit some evidence in support of this statement, whether by declaration of counsel, a retained expert, or some other means, which will help the Court review the fairness of the monetary award.” ER 352. The court also requested supplemental submissions regarding “Ms. Curtis-Bauer's involvement in the litigation and review of the settlement, or any other evidence that can show her adequacy as a representative....” ER 347. The parties thereafter submitted additional briefs and declarations regarding Curtis-Bauer's involvement in the litigation, her review of the settlement, the settlement of her non-class claims, the value of the injunctive relief, and the potential value of the class claims were Plaintiffs to prevail at trial. See PSER 300-419, 984-1000.
The additional evidence, together with the parties' original submissions, gave the district court a firm evidentiary basis for the findings in its February 7, 2008 order certifying a settlement class and giving preliminary settlement approval. The district court found that the supplemental submissions “assuaged its concerns about both the adequacy of representation and the fairness of the settlement.” ER 322. The district court determined that it had “sufficient facts before it to evaluate the settlement.... which appears at this stage to be fundamentally fair, adequate and reasonable when viewed as a whole.” ER 322.
The district court then addressed, and made express and detailed findings about, each of the elements of Rules 23(a) and 23(b)(2). The court re-affirmed its finding that Curtis-Bauer's claims are typical of both African Americans and Latinos “because she was allegedly injured by the same discriminatory nationwide policies and practices with respect to account distribution ....” ER 325.
The court also re-affirmed its finding that Curtis-Bauer “could adequately represent Latino FAs and FA Trainees and Morgan Stanley employees with other levels of production or tenure.” Id.
The district court also explicitly found that Curtis-Bauer could vigorously represent the class despite her late involvement:
Her declaration explains that she is serving as a class representative primarily because she wants to effect systemic change at Morgan Stanley. Her first discussion with Plaintiffs' counsel about the case was in May 2007. She was not

presented with the settlement as a fait accompli before joining the suit; instead, she expressed interest in becoming a plaintiff, became a plaintiff, and then evaluated the proposed settlement. Her declaration shows that she was aware of her fiduciary duties to the class, felt capable of assessing the settlement and the approach of counsel, and found that approach appropriate to meeting the goals of the suit. She suggested substantive changes which were ultimately incorporated into the settlement agreement.
ER 327 (citations omitted).
Regarding the payment to Curtis-Bauer of $125,000 for releasing her nonclass claims, including potentially explosive claims for race harassment, the court noted that class counsel argued that Curtis-Bauer's non-class claims for race harassment were not time-barred, and recognized that, even if Morgan Stanley might ultimately prevail on a statute of limitations defense, it could reasonably choose to settle those claims to avoid the cost and adverse publicity of such litigation. ER 327-28. Most important, the court found that “there is no evidence that Ms. Curtis-Bauer did, in fact, fail to evaluate the settlement, sacrifice the interests of absent class members to her own, or accept an unfair settlement.... While Ms. Curtis-Bauer may or may not have been able to settle her non-class claims without the class action, there is no evidence that she has benefited at the expense of the class.” ER 328-29. The court concluded that “Ms. Curtis-Bauer's supplemental declaration provides this Court with sufficient facts to determine that she is an engaged representative, that she has taken her duties as a class representative seriously, that she has released distinct non-class claims, and that her interests are aligned with those of the class.” Id.
Pursuant to the order granting preliminary settlement approval, notice was mailed. The reaction of the class supported approval: 422 of the approximately 1,300 class members, over 31% of the class, submitted claims forms -- evidencing a desire to participate in the monetary recovery provided by the settlement. ER 112. Twenty-four class members opted out of the settlement; nine chose to remain in the class while lodging objections with the court. Id.
The parties jointly moved for final approval of the settlement and certification of the settlement class on May 12, 2008. PSER 296. The district court conducted a lengthy hearing on June 16, 2008, which included extensive presentations from counsel for the parties and Objectors. The court also invited Objectors to speak. On July 7, 2008, the district court referred the matter to a magistrate judge for an evidentiary hearing regarding issues raised by a declaration of Denise Williams submitted by Objectors. ER 233.
Plaintiffs sought leave to move for reconsideration of the court's order, and submitted with that motion extensive evidence fully addressing the court's concerns. ER 1372-89; PSER 15-50, 841-983. Plaintiffs filed under seal a number of documents involving “communications between former plaintiff Denise Williams and Class Counsel which [were] material to the representation and due process issues before th[e] [c]ourt.” PSER 1; see ER 1372-89; PSER 841-983. Because the documents “reveal[ed] both the strategies and mental impressions of Class Counsel and statements by Ms. Williams that could affect her ongoing individual litigation with Morgan Stanley,” the court found good cause for the documents to be sealed. PSER 2. The court noted that Plaintiffs' counsel had good cause to refrain from filing the materials earlier in the litigation. Id. n. 1. The court permitted Plaintiffs to file their motion for reconsideration and invited Objectors and Williams to respond. Id.
On October 22, 2008, the court withdrew its July 7, 2008 order, explaining that the order had been “ill-advised.” The additional material submitted by Plaintiffs for in camera review “assure[d] the Court that Ms. Williams was involved [in the] litigation and settlement process. Counsel spent many hours communicating with her. Her involvement, and that of Ms. Curtis-Bauer, were adequate by any standard to satisfy representation and due process requirements.” ER 107-08.
In determining whether final certification of the class was appropriate, the court reiterated its prior holding that Curtis-Bauer was an adequate representative, ER 109 (citing ER 325-29), and found that Plaintiffs had “presented

abundant evidence for in camera review to refute Ms. Williams' allegation that she was not involved in the litigation or settlement”:
Plaintiffs' counsel interviewed Ms. Williams thoroughly about her experiences at Morgan Stanley, gaining knowledge that informed their ability to craft an appropriate settlement. The Court is also convinced that counsel discussed settlement terms with Ms. Williams before even entering into settlement discussions. Ms. Williams was kept informed of and consulted about the settlement process.... Even though Ms. Williams ultimately rejected the settlement and her relationship with class counsel broke down, the extent of her involvement was sufficient, particularly given the subsequent review and approval of the settlement by Ms. Curtis-Bauer.
Id.
In its October 22, 2008 order, the district court granted final settlement approval, finding that the proposed settlement was fundamentally fair, adequate, and reasonable. The court explained that “[t]he plaintiffs would face considerable risks were they to proceed to trial” and that both the “thoughtful assessment of the terms of the settlement” by class counsel and the positive response of class members to the proposed settlement “weigh[ed] in favor of approval.” ER 111-12. The “most important” factor for the court was “the strength of the injunctive and monetary relief the Settlement provides.” ER 112. The court found that “the Settlement Agreement provides substantial injunctive relief that “represents an expansion of the relief provided in the settlement of a parallel gender discrimination case against Morgan Stanley, Augst-Johnson, [] and is substantive, meaningful and valuable to the class.” ER 112-13. Likewise, the court determined that the monetary relief was substantial; it “represent[ed] over 40% of the predicted disparity in compensation which Plaintiffs sought as damages,” and was “comparable to that approved by the District Court for the District of Columbia in settlement of the parallel Augst-Johnson case,” as well as to the settlement in another parallel gender discrimination case against Smith Barney. ER 117. Accordingly, the court granted final certification to the class and final approval to the settlement, issued the Settlement Agreement as an order of the court, and entered final judgment. ER 123-28.
SUMMARY OF ARGUMENT
“[V]oluntary conciliation and settlement are the preferred means of dispute resolution. This is especially true in complex class action litigation, and even more so where the subject matter is employment discrimination.” Officers for Justice, 688 F.2d at 625. Here, the district court, applying the proper legal standards and demonstrating an extraordinary degree of attention to the concerns raised by the unique and unlikely to recur procedural context of this case, determined that the class met the requirements for certification under Rule 23 and that the settlement was fundamentally fair, reasonable, and adequate. Objectors' challenges to the court's factual and legal conclusions come nowhere near establishing the abuse of discretion required for reversal.
The district court properly granted preliminary approval to the settlement after finding that there was no evidence of collusion and that the settlement followed extensive, arms' length negotiations between the parties. ER 332. Plaintiffs filed a class charge of race discrimination eight months before announcing the settlement and filing the Second Amended Complaint. The parties then engaged in extensive informal discovery, and Plaintiffs had access to extensive data from Morgan Stanley and expert analyses of that data, as well as a great deal of knowledge acquired through months of involvement in the case. ER 332; PSER 468, 537-40.
Likewise, the district court did not abuse its discretion in certifying the putative class of minority FAs. As the district court found, the involvement of Williams and Curtis-Bauer was adequate by any standard to satisfy Rule 23(a)(4) and due process. ER 108. The court's determination was based on its finding that class counsel consulted with Williams throughout the settlement negotiations, ER 109; that Curtis-Bauer was aware of her fiduciary duties to the class and evaluated the proposed settlement accordingly, ER 327; that Curtis-Bauer did not benefit at the expense of the class, ER

329; and that there were no discernable conflicts between African-American and Latino class members, ER 349. Curtis-Bauer also satisfied the typicality requirements of Rule 23(a)(3) because her claims were reasonably co-extensive with those of the absent African-American and Latino class members. As the district court found, all class members, be they African-American or Latino, experienced the same course of conduct and suffered similar injuries, and any disparities in compensation were not so great that it was unfair to treat African Americans and Latinos similarly. ER 333.
Final approval was also appropriate. The settlement was reached after arms' length negotiations; Plaintiffs faced considerable risks at trial; the settlement was endorsed by experienced class counsel; and the reaction of class members was overwhelmingly positive. The settlement provides injunctive relief that is valuable to the class and that expands upon the relief provided in the settlement of a parallel gender discrimination case against Morgan Stanley. ER 112-13. Likewise, the monetary relief amounts to over 40% of the compensation shortfall that Plaintiffs sought as damages, and is similar to, or higher than, monetary relief in settlements approved in comparable cases. ER 116-17.
The district court also did not err in denying Objectors' request for discovery or vacating its order mandating an evidentiary hearing. Objectors do not have an absolute right to discovery; a court may, in its discretion, limit objector discovery to that which will assist the court in evaluating the settlement. See, e.g., Scardelletti v. Debarr, 265 F.3d 195, 204 (4th Cir. 2001), rev'd on other grounds sub nom., Devlin v. Scardelletti, 536 U.S. 1 (2002). The district court here had before it a more than sufficient record, including a number of submissions specifically requested by the court, and Objectors have demonstrated no holes in the record requiring additional discovery or an evidentiary hearing.
ARGUMENT
I. The District Court Did Not Abuse its Discretion by Provisionally Approving a Settlement that Easily Fell Within the Range of Possible Settlement Approval.
Objectors contend that the settlement did not meet the standard for preliminary approval because it was not the result of an arms' length negotiation and because the evidentiary record was insufficient. Both contentions are contrary *23 to the record and to the district court's explicit findings. Because the settlement here was non-collusive and easily fell within the “range of possible approval,” Boyd v. Bechtel Corp., 485 F. Supp. 610, 615 (N.D. Cal. 1979), the district court acted well within its discretion in granting preliminary approval to the settlement. A. The Settlement Was the Result of Arms' Length Negotiations.
In granting preliminary approval, the district court found that “there was no evidence of collusion between the Parties during the settlement process,” and that “[t]he settlement and Settlement Agreement are the result of extensive, arms' length negotiations between the Parties” that included “the involvement of an experienced mediator....” ER 332. Its conclusion undoubtedly fell within “any of the permissible choices the court could have made” on the basis of the record before it. Hinkson, 585 F.3d at 1261. The record established that Williams, represented by class counsel, filed an EEOC charge including class-wide race discrimination claims in November 2006, notified Morgan Stanley of her intention to pursue class relief in January 2007, and shortly thereafter entered into a tolling agreement regarding class race discrimination claims. ER 350 n.2, 848-49, 855-57; PSER 797-99, 924-25. The parties thereafter engaged in extensive negotiations with the help of an experienced neutral mediator. The mediator reported that the mediation was “difficult and time-consuming,” involved in-person sessions in three different cities, as well as scores of telephonic conferences and the exchange of numerous proposals, and nearly reached impasse on multiple occasions. PSER *24 468-69. “Throughout the process, counsel for the parties advocated their clients' positions vigorously and at arms' length.” PSER 469.
Objectors contend that the simultaneous filing of the Second Amended Complaint and announcement of the settlement in principle demonstrates that the negotiations were not conducted at arms' length. By pursuing settlement negotiations

before filing the Amended Complaint, however, the parties simply heeded Title VII's “preference for voluntary settlement[] of disputes through the conciliation process.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 101 n.14 (2001). “[T]he central theme of Title VII is ‘private settlement’ as an effective end to employment discrimination,” Culpepper v. Reynolds Metals Co., 421 F.2d 888, 891 (5th Cir. 1970), and the very purpose of its requirement that aggrieved parties file a charge with the EEOC before bringing suit is to promote voluntary settlement in lieu of litigation. See Alexander v. Gardner-Denver Co., 415 U.S. 36, 44 (1974). Objectors' contention that the parties erred by pursuing pre-filing settlement negotiations is contrary to Title VII's “clearly defined policy of deferring action in federal court until a charge has been filed with the agency and an opportunity afforded ... to attempt private settlement.” Macklin v. Spector Freight Systems, Inc., 478 F.2d 979, 986 (D.C. Cir. 1973).
In accordance with the policies underlying Title VII, the parties here entered into a tolling agreement and pursued settlement negotiations before filing the Second Amended Complaint, thereby conserving resources while maintaining their *25 respective positions. Compare In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 790 (3d Cir. 1995). The procedure also saved Morgan Stanley adverse publicity about a pending race-discrimination class action. The parties' actions were entirely reasonable and in no way demonstrate that the subsequent six months of negotiations, which nearly reached impasse several times, were collusive or non-adversarial. Cf. S.E.C. v. Randolph, 736 F.2d 525, 527-28 (9th Cir. 1984).[FN6]
FN6. Objectors contend that an email sent by Morgan Stanley to its class member employees regarding the proposed settlement demonstrates that class counsel were “reifying] on Morgan Stanley to garner support for the settlement.” Objectors - Appellants' Opening Brief at 42. Morgan Stanley's email, however, simply directed employees to the appropriate source for information regarding the settlement. PSER 432-33.
Objectors' argument that the settlement was reached without sufficient discovery ignores the evidentiary record, which establishes that there was extensive informal discovery and exchange of information. Formal discovery is not required “where the parties have sufficient information to make an informed decision about settlement.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (citations omitted); cf. United States v. Oregon, 913 F.2d 576, 582 (9th Cir. 1990). As the district court found, the settlement was reached only after extensive investigation and analysis. ER 111. Numerous declarations established that Morgan Stanley produced extensive documents and statistical data requested by class counsel, ER 849; PSER 466, 468 -- informal discovery that was *26 coextensive with the formal discovery class counsel would have obtained in contested litigation. Class counsel then retained an expert to analyze the data. PSER 466. Since class counsel were fully informed of the strengths and weaknesses of their case, they were in a position to represent the interests of the class effectively. Requiring parties to conduct formal discovery, instead of informal investigation, would not only put form over substance and be contrary to existing precedent, but would also waste time and resources better spent on resolving the problem.
Finally, Objectors' contentions regarding the non-participation of certain class members during the settlement negotiations are irrelevant to determining whether the negotiations were conducted at arms' length. As the district court recognized, “[t]here is no requirement that the class representative, rather than class counsel, negotiate the terms of a settlement.” ER 347; see Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) (“The class members are not at the table; class counsel and counsel for the defendants are.”). Furthermore, Objectors' contentions are contrary to the record and to the district court's findings. Class counsel did not negotiate the settlement and then seek a class representative for purposes of ratification but, instead, added an additional class representative to ensure that the class would be adequately represented throughout the settlement proceedings. ER 1362, 1370, 1375-1377; PSER 961-62. *27 B. Informal Discovery, Data Collection, Expert Analyses, and Class Member Interviews Established an Extensive Evidentiary Record in Support of the Settlement.
The district court exercised unusual diligence in ensuring that the record was adequate to permit informed evaluation of the proposed settlement. The court not only held an extensive hearing on preliminary settlement approval, but also requested supplemental briefs and evidence. At the time of preliminary approval, the record before the court included

the Settlement Agreement; Morgan Stanley's Power Ranking formula; and expert analyses; as well as declarations from Curtis-Bauer; from three of Plaintiffs' attorneys, one of whom described in detail the estimated monetary value of the class claims; from two of Morgan Stanley's attorneys; and from two industrial psychologists. ER 331. This evidence provided the court with a comprehensive picture of Morgan Stanley's employment practices, the value of the settlement to the class, and the settlement negotiation process. The Court also considered the arguments and supporting evidence in Objectors' properly filed briefs, ER 948-1180, and the arguments at the preliminary hearing, including in-person statements from certain objectors. ER 38-54, 331-32.
Objectors nonetheless contend that the discovery in this case “failed to provide sufficient basis for an appropriate settlement.” Objectors - Appellants' Opening Brief (“AOB”) at 43. However, the material before the court did not need to be produced pursuant to formal discovery or made available to Objectors to permit intelligent evaluation of the settlement by the court. Objectors' assertion *28 that Morgan Stanley failed to inform class counsel of its negotiations with another group of minority FAs does not call the sufficiency of the record into question. Objectors point to no specific inadequacies in the record that rendered the court's decision uninformed or unintelligent. Their generalized assertions regarding the record's insufficiency do not establish that the court abused its discretion in granting preliminary approval on the basis of the extensive record compiled by the parties.
II. The District Court Did Not Abuse its Discretion in Certifying the Class.
A settlement class must comply with the requirements for class certification established by Rules 23(a) and (b). Amchem Products, Inc. v. Windsor, 521 U.S. 591, 621 (1997). The district court applied the proper legal standard established by Staton, 327 F.3d 938, which requires that courts “pay undiluted, even heightened, attention to class certification requirements” when a settlement is reached before class certification. Id. at 952 (citations omitted); ER 323 (citing Staton). Because the court applied the proper standard, this Court's review is limited to whether the district court made a “clear error of judgment” in finding that the class was adequately represented under Rule 23(a)(4), and that Curtis-Bauer's claims were “typical” under Rule 23(a)(3). Parra v. Bashas', Inc., 536 F.3d 975, 978 (9th Cir. 2008).[FN7]
FN7. Objectors do not challenge the court's conclusions as to the other provisions of Rules 23(a) and (b).
*29 A. The Class Representatives Adequately Represented the Interests of Absent Class Members.
Rule 23(a)(4) requires that the representative parties “fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). Here, the district court found that the involvement of Williams and Curtis-Bauer was “adequate by any standard to satisfy representation and due process requirements.” ER 108. That determination was based on the court's factual findings that class counsel interviewed Williams thoroughly, discussed settlement terms with Williams before entering into settlement discussions, and consulted with Williams throughout the settlement negotiations, ER 109; that Curtis-Bauer served as a class representative to effect systemic change at Morgan Stanley, was aware of her fiduciary duties, evaluated the proposed settlement, and suggested substantive provisions for inclusion in the settlement, ER 327; that, in receiving additional compensation for her non-class claims, Curtis-Bauer did not benefit at the expense of the class, ER 329; and that there were no conflicts between African-American and Latino FAs that would prevent Curtis-Bauer from adequately protecting the interests of African-American and Latino class members, ER 349. Those findings were supported by the record, and the conclusions based thereon were entirely within the court's discretion. *30 1. Ms. Curtis-Bauer's Interests Are Consistent with Those of the Class.
Objectors are incorrect that the payment received by Curtis-Bauer for settlement of her non-class claims of racial harassment rendered her an inadequate representative. The district court found that Curtis-Bauer “did not bargain away absent class members' claims in exchange for settlement of her non-class claims” and found “no evidence that she has benefited at the expense of the class.” ER 329.[FN8]

FN8. Objectors do not object to the $25,000 service payment to Curtis-Bauer. The district court's approval of that service payment was well within its discretion, see, e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d at 463, and is not challenged.
The district court was correct. Curtis-Bauer received the additional payment for the settlement of individual racial harassment, wrongful termination, and business interference claims. See PSER 997-98. Such a settlement of non-class claims by a class representative does not render a class representative atypical or inadequate. See Satchell v. FedEx Exp., No. C 03-2659 SI, 2006 WL 3507913, at *1 (N.D. Cal. Dec. 5, 2006) (plaintiff with non-class claims is not “non-typical”); 8 Newberg on Class Actions § 24.129, at 504-05 (4th ed. 2002); cf. Ingrahm v. Coca-Cola Co., 200 F.R.D. 685, 688, 694, 699 (N.D. Ga. 2001) (finding representation adequate where class representatives received $300,000 incentive awards in lieu of awards pursuant to the settlement's monetary relief provisions, which averaged $38,000). Although Objectors assert that Curtis-Bauer's non-class claims were *31 time-barred, Curtis-Bauer had grounds for arguing that they were timely when settled, based upon a broad tolling agreement covering the race discrimination claims of Morgan Stanley's African-American FAs. See ER 1163. Furthermore, as the court found, Morgan Stanley had a strong incentive to avoid the adverse publicity arising from litigation of Curtis-Bauer's racial harassment claims. ER 328.
Unlike in Staton, the Settlement Agreement here is favorable to all class members, and the settlement of Curtis-Bauer's non-class claims does not affect the injunctive relief or significantly diminish the amount of monetary relief available to the remainder of the class, since it is a relatively small sum (less than 1% of the monetary relief to the class) that can be paid from interest earned on the Settlement Fund. In Staton, by contrast, the settlement provided that more than half of a $7.3 million settlement would be awarded at class counsel's discretion to 237 “individually identified recipients” who received average awards of $16,500, while the remainder would be distributed to 3,400 other class members, with individual awards averaging $1,000. See Staton, 327 F.3d at 948. The Court found “no sufficient justification in the record for this differential in the amount of damage awards and the process for awarding them,” id. at 975, and suggested “that class counsel were simply rewarding ... those class members who had promised to contribute toward their costs during the pendency of the suit,” id. at 976. Here, the justification for the additional payment to Curtis-Bauer is readily apparent: She *32 released claims that were not released by other members of the class. There is no basis for reversing the court's finding that the payment to Ms. Curtis-Bauer created no conflict with the class. See, e.g., Lurns v. Russell Corp., 604 F. Supp. 1335, 1336 (M.D. Ala. 1984) (“Difference in treatment may be proper as long as it is based on legitimate considerations.”).[FN9]
FN9. In addition to lacking merit, Objectors' argument is misplaced. Notwithstanding the apparent self-dealing in Staton, the Staton court found adequate representation under Rule 23(a)(4), explaining that any preference in the settlement agreement for the named plaintiffs or for a particular subset of the class “is better dealt with as part of the substantive review of the settlement” rather than as a matter of adequate representation. Staton, 327 F.3d at 958. Objectors' “appearance of conflict” argument is similarly meritless. As the district court recognized, “there is no evidence and only Objectors' speculation that any improprieties have taken place.” ER 329. The cases cited by Objectors do not suggest that mere speculation by an objector regarding a named plaintiff's motives renders that plaintiff inadequate. Instead, all involved arrangements that inherently created a potential for conflict, such as a fee sharing agreement between class counsel and the class representative's husband. Swift v. First USA Bank, No. 98 C 8238, 1999 WL 1212561 (N. D. Ill. Dec. 15, 1999). The present case involves no such inherent conflict.
2. Ms. Curtis-Bauer Adequately Represented Both African-American and Latino Class Members.
The district court, after reviewing the relevant workforce data, found that, because there was no discernable conflict

between African-American and Latino class members, class representation was adequate notwithstanding the absence of a Latino class representative.[FN10]
FN10. Several Latinos submitted letters in support of the settlement. PSER 448, 450, 452, 454, 458, 462.
*33 Its decision was correct. African Americans and Latinos were similarly situated with regards to the harm caused by Morgan Stanley's practices and the relief provided in the settlement agreement. African-American and Latino FAs at Morgan Stanley were compensated less than white FAs, PSER 466, based in large part on Morgan Stanley's system of account distribution, which was weighted heavily toward historical factors such as assets under management and past production. Under the settlement, Morgan Stanley will de-emphasize those historical factors, allowing African-American and Latino FAs who may not have benefited under the prior compensation scheme to compete more favorably going forward. ER 154. Likewise, African Americans and Latinos are similarly situated in that both groups are hired into FA positions at lower rates than expected. PSER 466. The settlement requires Morgan Stanley to take specific steps to increase the representation of qualified African Americans and Latinos in FA positions. ER 151-52, 162-67. Finally, African Americans and Latinos are similarly situated with respect to turnover, in that both groups have substantially higher rates of turnover than whites. PSER 466. The proposed Settlement Agreement contains provisions designed to increase retention and decrease the turnover rates of minority FAs, ER 152-54, 162-67, thereby benefiting both African-American and Latino class members.
Unlike in Amchem; Payne v. Travenol Labs, Inc., 673 F.2d 798 (5th Cir. 1982); or Bartlelson v. Dean Witter & Co., 86 F.R.D. 657 (E.D. Pa. 1980), the class *34 members here do not have antagonistic or distinct interests requiring separate representation. Because there was no conflict between African-American and Latino class members and the groups were similarly situated with respect to both the harm of Morgan Stanley's discriminatory practices and the benefits of the proposed settlement, Curtis-Bauer was an adequate representative for both groups.[FN11]
FN11. Courts have repeatedly found in similar circumstances that a member of one minority group may adequately represent members of other minority groups who suffered similar discrimination. See, e.g., Gaines v. Boston Herald Inc., 998 F. Supp. 91, 112-16 (D. Mass. 1998); Jones v. Milwaukee County, 68 F.R.D. 638, 640-41 (E.D. Wis. 1975); Leonard v. Southtec, LLC, No. 3:04-0072, 2005 WL 2177013, at *10-*11 (M.D. Tenn. Sept. 8, 2005); N.O.W. v. Bank of California, No. C-72-441 RFP, 1972 WL 246, at *4 (N.D. Cal. 1972); Tennie v. City of N.Y. Dep't. of Social Servs., No. 83 Civ. 0884 (MEL), 1987 WL 6156, at *3 (S.D.N.Y. 1987); 8 Newberg on Class Actions § 24.54 (“[C]lasses have been certified in which African-Americans have represented Mexican-Americans, Chicanos, those with Spanish surnames, Native Americans, and Asians.”). The factual material cited by Objectors in support of their argument that Ms. Curtis-Bauer could not represent Latinos does not establish that the experiences of Latino class members were so “unique” as to preclude their representation by Ms. Curtis-Bauer. The cited declaration, which in any event is not properly before this Court, see Motion to Strike, recounts the experience of a single African-American FA in South Florida and is relevant, if at all, only to evaluating the fairness of the settlement to African Americans. The district court acted well within its discretion in crediting Plaintiffs' objective evidence regarding the impact of Morgan Stanley's policies on Latino and African-American FAs.
3. Ms. Curtis-Bauer Is an Engaged and Informed Class Representative.
Finally, Objectors attack Curtis-Bauer's knowledge of, and engagement with, the proceedings in this case. These unjustified attacks on Curtis-Bauer are *35 based on material not properly before this Court and are contrary to the district court's specific factual findings.
The district court found that Curtis-Bauer is “an adequate, engaged representative who can vigorously represent the

interests of the class....” ER 326. The court found that she served as a class representative to effect systemic change at Morgan Stanley; that she first discussed the case with class counsel in May 2007, months before the settlement in principle was reached; that she evaluated the proposed settlement with an understanding of her fiduciary duties to the class after becoming a class representative; that she felt capable of assessing the settlement and the approach of counsel and found that approach appropriate; and, finally, that she suggested substantive provisions for inclusion in the settlement agreement. ER 327. This was more than sufficient to satisfy Rule 23(a)(4), which requires only that a class representative “understand[] [her] duties and [be] currently willing and able to perform them.” Local Joint Executive Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 (9th Cir. 2001); see also New Directions Treatment Services v. City of Reading, 490 F.3d 293, 313 (3d Cir. 2007) (“A class representative need only possess a minimal degree of knowledge ....”).
Objectors' contrary arguments depend almost exclusively on declarations that are not properly before this Court, see Motion To Strike, and that do not establish any clear error in the district court's factual findings. The excluded declarations recount alleged conversations between Curtis-Bauer and other FAs, *36 but are contradicted by the declarations of Curtis-Bauer, her ex-husband, and class counsel. PSER 422, 424, 978-79, 992-94. The district court acted well within its discretion in crediting that testimony rather than the double and triple hearsay offered by Objectors.
Objectors' attack on Curtis-Bauer's knowledge of Morgan Stanley is also meritless. Curtis-Bauer was an FA at Morgan Stanley for thirteen years. Although she worked at Morgan Stanley during a relatively small portion of the period covered by the settlement agreement, many policies and practices at issue in this case existed from the beginning of her employment with Morgan Stanley. ER 1193-95. Although Rule 23(a)(4) does not require that a class representative possess any detailed knowledge of the case, see Las Vegas Sands, 244 F.3d at 1162, Curtis-Bauer's thirteen years of experience provided her with extensive knowledge that she used to assist class counsel in selecting appropriate relief.[FN12]
FN12. Curtis-Bauer's knowledge of Morgan Stanley's practices far exceeded the standards applied in the cases relied upon by Objectors. See, e.g., Wofford v. Safeway Stores, Inc., 78 F.R.D. 460, 487 (N.D. Cal. 1978) (requiring only “some minimal level of interest in the action, familiarity with the practices challenged, and ability to assist in decisionmaking as to the conduct of the litigation”); Krim v. pcOrder.com, Inc., 210 F.R.D. 581, 587 (W.D. Tex. 2002) (requiring only that representatives “know more than ‘they were involved in a bad business deal.’ ”) (citation omitted).
Objectors also challenge Curtis-Bauer's knowledge by arguing that her suggestions regarding the settlement agreement were of little value. In doing so, Objectors underestimate the value of the settlement's mandatory nature. Even if, *37 as Objectors contend, “Morgan Stanley has included diversity-related performance measures in branch manager compensation since well before the filing of this lawsuit,” AOB 33, the settlement agreement ensures that the component will be “meaningful,” and makes that component mandatory and subject to monitoring by the diversity monitor, senior management, and class counsel for a specific term. ER 153-54.
Finally, class counsel's experience must also be considered in evaluating the adequacy of representation. See General Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 157 n.13 (1982) (noting that the adequacy-of-representation requirement is concerned with “the competency of class counsel and conflicts of interest”). Class counsel here had extensive experience with class action discrimination cases and cases against defendants in the financial service industry, ER 111; PSER 542-609, 615-17, 626-55 -- experience more than sufficient to ensure that the class would receive adequate representation notwithstanding any alleged deficiencies of the named plaintiffs.[FN13]
FN13. Objectors reliance on Cavanaugh's statement that “the inquiry is not into the adequacy or fitness of counsel but into the adequacy of plaintiff,” 306 F.3d 726, 733 (9th Cir. 2002), is misplaced. Cavanaugh involved the selection of a lead plaintiff from among various class members competing for that position, as required by the Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4(a)(3), rather than the evaluation

of adequate representation under Rule 23(a)(4). Cavanaugh has no bearing whatsoever on the issue before this Court.
*38 4. The Combined Participation of Ms. Williams and Ms. Curtis-Bauer Was More Than Sufficient To Satisfy Rule 23(a)(4).
The combined representation provided by Williams and Curtis-Bauer was more than adequate to satisfy the applicable representation and due process standards. ER 108. The district court found that class counsel interviewed Williams thoroughly, discussed settlement terms with Williams prior to entering negotiations, and consulted and updated Williams during settlement negotiations. ER 109; see also ER 1374, 1377, 1380-81, 1383-87; PSER 854-56, 944-46, 951-52, 954, 957-61, 965, 968, 972. Through these discussions, class counsel acquired the information necessary to craft an appropriate settlement. ER 109. Months after Curtis-Bauer had become a named plaintiff, Williams rejected the settlement and chose to pursue her claims individually, see ER 1375-76; PSER 962, but until that time she acted as class representative for African-American FAs and was actively involved in the litigation. In determining whether the requirements of Rule 23(a)(4) were met in this case, her participation must be considered alongside that of Curtis-Bauer. B. Due Process and Rule 23 Did Not Require Ms. Williams' Approval of the Settlement.
Objectors separately contend, without authority, that due process and Rule 23 were violated because Williams eventually opted out of the settlement negotiated by class counsel. This Court has held otherwise: “[C]lass counsel ultimately owe their fiduciary responsibility to the class as a whole and are *39 therefore not bound by the views of the named plaintiffs regarding any settlement.” Staton, 327 F.3d at 960. Williams had no right to veto the settlement simply because she was a named plaintiff. “[A] contrary view would put too much power in a wishful thinker or a spite monger to thwart a result that is in the best interests” of the class as a whole. Saylor v. Lindsley, 456 F.2d 896, 899-900 (2d Cir. 1972).
Even if a formal attorney-client relationship does not exist, class counsel has a fiduciary duty to putative class members prior to class certification. Staton, 327 F.3d at 960; Dondore v. NGK Metals Corp., 152 F. Supp. 2d 662, 665 (E.D. Pa. 2001); In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245-46 (N.D. Cal. 2000).[FN14]
FN14. See also Manual for Complex Litigation, Third, § 30.24; Stephen B. Murray & Linda S. Harang, Selection of Class Counsel: Is It a Selection of Counsel for the Class, or a Selection of Counsel with Class?, 74 Tul. L. Rev. 2089, 2097 (2000); Douglas R. Richmond, Class Actions and Ex Parte Communications: Can We Talk?, 68 Mo. L. Rev. 813, 827 (2003).
Here, class counsel helped Williams file an EEOC charge in November 2006 on behalf of a class of minority FAs. From that point on, class counsel's duty ran to the class, not Williams alone, and class counsel had a duty to act in the best interests of the class. Where such a duty exists, courts hold that “named plaintiffs should not be permitted to hold the absentee class hostage by refusing to assent to an otherwise fair and adequate settlement in order to secure their individual demands.” Parker v. Anderson, 667 F.2d 1204, 1211 (5th Cir. 1982) (affirming *40 approval of Title VII settlement despite rejection by ten of eleven class representatives); Staton, 327 F.3d at 960; Saylor, 456 F.2d at 899-900.
Olden v. LaFarge Corp., 472 F. Supp. 2d 922 (E.D. Mich. 2007), aff'd, 294 Fed. Appx. 210 (6th Cir. 2008), is instructive. In Olden, there was “a breakdown of [class counsel's] attorney-client relationship that stem[med] from the desire of the class representatives to receive greater individual compensation in the form of banner awards at the expense of the class,” and the class representatives objected to the settlement. Id. at 937. The court explained that, “because class counsel's obligations run to the class as a whole, the class representatives' assent is neither a sufficient nor a necessary condition to judicial approval of a class settlement.” Id. at 931. Accordingly, class counsel could proceed with settlement notwithstanding the class representatives' objections, and a class representative substituted post-settlement was adequate. Id. See also Heit v. Van Ochten, 126 F. Supp. 2d 487, 494-95 (W.D. Mich. 2001) (granting motion to substitute new

named plaintiff post-settlement); Fleury v. Richemont North America, Inc., No. C-05-4525, 2008 U.S. Dist. LEXIS 64521, at *42-*45 (N.D. Cal. July 3, 2008).[FN15]
FN15. The only distinction between this case and Olden is that the settlement here was negotiated before the complaint was amended to include class-wide claims of race discrimination. That the amended complaint had not been filed did not, however, change class counsel's obligations to the class as a whole, especially where class counsel had already assisted the named plaintiff in filing an EEOC charge containing the class allegations. Objectors' proposed requirement that class counsel file a class complaint before pursuing settlement negotiations or face the possibility of a named plaintiff unreasonably rejecting a beneficial settlement would serve no purpose, would needlessly add to the costs of litigation, and would increase the ability of a named plaintiff to hold the class hostage to his or her own self-interest.
*41 Class counsel properly considered the interests of the class when negotiating the settlement and when adding Curtis-Bauer as a named plaintiff to protect those interests. As the district court found, Curtis-Bauer evaluated the proposed settlement and suggested substantive provisions for inclusion in the settlement agreement. ER 327; see also PSER 992-94. Where, as here, class representation was adequate under Rule 23(a)(4) and the proposed settlement was fair, reasonable, and adequate under Rule 23(e), due process required no more. C. Ms. Curtis-Bauer's Claims Are Typical of the Class Claims.
Under Rule 23(a)(3)'s “permissive standards,” representative claims are typical “if they are reasonably co-extensive with those of absent class members; they need not be substantially identical.” Hanlon, 150 F.3d at 1020; Staton, 327 F.3d at 957. “The purpose of the typicality requirement is to assure that the interest of the named representative aligns with the interests of the class.... The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citations omitted).
*42 The district court did not abuse its discretion in finding that Curtis-Bauer's claims were “reasonably co-extensive” with those of the class. Curtis-Bauer was subjected to the same discriminatory account distribution system at Morgan Stanley as the other minority FAs in the class, and her claims flowed from the same factual, legal, and remedial theories as those of the class as a whole. That Curtis-Bauer also settled separate, non-class claims against Morgan Stanley does not demonstrate that her claims were atypical; class settlements often include separate awards for a named plaintiff's unique claims. “Settlement agreements in employment discrimination class actions may contain provisions awarding monetary recoveries and other special benefits to named plaintiffs for their unique claims.” 8 Newberg on Class Actions § 24:129, at 505. Curtis-Bauer's individual claims of racial harassment do not undermine the typicality of her claims regarding Morgan Stanley's discriminatory account distribution system, because the latter are not different in kind or strength from those of the class. See, e.g., Satchell v. FedEx Exp., 2006 WL 3507913, at *1 (plaintiffs with non-class claims are not “non-typical”).
Similarly, the claims of African-American and Latino class members are reasonably co-extensive. The groups were similarly affected by Morgan Stanley's practices and policies for distributing accounts, compensation, business opportunities, and opportunities for advancement, ER 348; PSER 466; the remedies provided in the proposed settlement agreement will benefit all class *43 members in the same way; and any “disparities in compensation [were] not so great that it [was] unfair or inappropriate to treat African-Americans and Latinos in a similar fashion ....” ER 333. The minimal evidence on which Objectors rely is not properly before this Court, see Motion To Strike, and does not establish that the district court abused its discretion in determining, on the basis of the objective workforce data analyses provided by Plaintiffs, that the interests of African-American and Latino FAs were “reasonably co-extensive” for purposes of Rule 23(a)(3).
III. The District Court Did Not Abuse its Discretion in Granting Final Approval to the Settlement Agreement.

In determining whether to approve a proposed class settlement, the courts must give “proper deference to the private consensual decision of the parties,” and involve themselves only “to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” Hanlon, 150 F.3d at 1027.
This Court reviews the district court's decision to approve a class settlement for a “clear abuse of discretion,” according great weight to the views of the trial judge. Officers for Justice, 688 F.2d at 626. Because the courts must also defer to the parties' conclusion that a settlement is fair, adequate, and reasonable, this *44 Court's review of a district court's approval of such a settlement is “doubly deferential.” Cf. Knowles v. Mirzayance, 129 S.Ct. 1411, 1420 (2009). A. The Settlement Was Reached after Arm's Length Negotiations, Plaintiffs Faced Considerable Risks at Trial, Experienced Class Counsel Considered the Settlement Proper, and Class Member Reaction Was Overwhelmingly Positive.
The settlement in this case was reached after extensive investigation and arms' length negotiations. See supra Section LA. The district court properly considered this as a factor favoring final approval of the settlement. ER 111.
The district court also concluded that the risks faced by Plaintiffs at trial, the views of class counsel, and the reaction of the class all favored final approval of the settlement agreement. Objectors challenge none of these conclusions.
Any settlement must be evaluated with an understanding of the risks and benefits of going to trial. See Officers for Justice, 688 F.2d at 625. Here, the district court recognized the considerable risks Plaintiffs faced at trial, including difficulties in “proving that Morgan Stanley's objectively neutral policies and procedures caused the disparities in compensation and other harm, such as terminations based on low production.” ER 111. To succeed on their § 1981 claims, Plaintiffs were required to demonstrate both that the practices and policies in question had a discriminatory purpose, see General Bldg. Contractors Ass'n, Inc. v. Penn., 458 U.S. 375, 389 (1982), and that those practices and policies caused the injuries suffered by the class. “The uncertainty and complexity of *45 proceeding to trial would be substantial,” ER 111, while the settlement produced “a prompt, certain, and substantial recovery for the Plaintiff class,” id.
Furthermore, as the court found, class counsel “have extensive experience not only with class action discrimination cases, but in litigating employment discrimination cases against defendants in the financial services industry.” Id.; see also PSER 542-609, 615-17, 626-55. Class counsel's “considered and strong support for the efficacy of the proposed injunctive relief thus favored approval. ER 111.
Finally, the district court recognized that the reaction of the class to the settlement strongly favored approval. Of more than 1,300 class members, only nine lodged objections and only 24 opted out, while 422 submitted claims. ER 112. Counsel for Objectors below characterized this 31% participation rate as “very high.” ER 59, 112 n.3. The positive reaction of the class demonstrates that the settlement is fundamentally fair, adequate, and reasonable, and rebuts any negative inference that might be drawn from Williams' decision to opt out. B. The Injunctive Relief Is Substantial, Meaningful, and Valuable to the Class.
The district court also determined that “the Settlement Agreement provides substantial injunctive relief to the Plaintiff class.” ER 112. As the court explained, that relief “is substantive, meaningful, and valuable to the class.” ER 113.
*46 In challenging the district court's conclusion, Objectors first argue that the injunctive relief here is identical to the

relief in Augst-Johnson. However, the district court properly recognized that “the programmatic relief... represent[s] a genuine expansion of the relief already ordered in Augst-Johnson.” ER 350. The proposed settlement ensures that the policy changes and new programs implemented as part of the Augst-Johnson settlement will benefit minority FAs, not just female FAs. For example, the industrial psychologists and the diversity monitor “will be devoting additional time, analysis, and resources to addressing race issues, and not displacing relief already agreed to in Augst-Johnson” Id.
In addition, one of the most important provisions -- the new Power Ranking formula -- was specifically revised in response to concerns raised by class counsel here. After learning of those concerns, “Morgan Stanley changed the Power Ranking formula to de-emphasize past performance, tested the revised Power Ranking formula to see if it would have an adverse impact on minorities, and found that it did not.” ER 115. The development of a formula with no adverse impact on minorities resulted from settlement negotiations in both cases, not just Augst-Johnson.
This settlement also contains a number of provisions not found in the Augst-Johnson settlement. The settlement requires continuous monitoring of account distributions, compensation, and the Power Rankings of minority FAs, information that will be used to recommend changes. ER 155-56. The settlement also requires *47 that Morgan Stanley take a number of specific steps to increase the recruitment of qualified diverse candidates, ER 151-52; requires reporting on the success of those recruiting efforts, ER 154; requires that Morgan Stanley implement a number of measures to improve its retention rates for minority FAs, ER 153, 161, 164-66; requires that that field managers report upon their diversity efforts and that senior management hold field managers accountable for those efforts, including through a meaningful diversity component of their compensation, ER 153-54; and requires the implementation of diversity training incorporating a tool designed to measure implicit bias, ER 153.
Objectors contend that the settlement agreement should have required that minorities be included on teams. The material relied upon by Objectors in support of this contention is not properly before this Court, see Motion To Strike, and, in any event, the settlement's failure to mandate minority inclusion does not establish that the district court abused its discretion in determining that the settlement as a whole was fair, reasonable, and adequate. “The proposed settlement is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators.” Officers for Justice, 688 F.2d at 625. Here, “[t]he Settlement Agreement provides for some efforts to increase minority representation on teams and partnerships.” ER 116. For example, the industrial psychologists are specifically charged with developing programs to increase the participation of minority FAs in partnerships. ER 164-65. “Given the extensive *48 programmatic and monetary relief the settlement provides to class members,” ER 116, class counsel's decision not to require additional changes to Morgan Stanley's teams and partnerships did not deprive the settlement of its significant value to class members.[FN16]
FN16. The unpublished order cited by Objectors supports class counsel's conclusion because the court dismissed the plaintiff's claim that Morgan Stanley's team-formation policy involved a pattern and practice of discriminatory treatment. See Dodson v. Morgan Stanley DW, Inc., No. C06-5669RJB, 2007 WL 3348437, at *6-*7 (W. D. Wash. Nov. 8, 2007).
C. The Monetary Relief Is Fair, Reasonable, and Adequate.
“[W]here monetary relief is but one form of the relief requested by the plaintiffs[,] [i]t is the complete package taken as a whole, rather than the individual component parts, that must be examined for overall fairness.” Officers for Justice, 688 F.2d at 628. Nonetheless, when the monetary relief provided by the settlement here is examined on its own, it is clear that the district court acted within its discretion in approving the settlement.
The proposed settlement provides monetary relief in the amount of $16 million, plus interest at a rate of 5% per annum from the date of preliminary approval until ten days after resolution of all appeals. Because the district court granted

preliminary approval to the settlement more than 23 months ago, the value of the settlement fund has already increased by nearly $1.6 million -- an amount sufficient to cover the cost of claims administration, opt-out credits, and the payments to Curtis-Bauer, as well as a large portion of the attorneys' fees. After *49 deducting these costs and fees, over $15.5 million now remains for distribution to the 422 class members who submitted timely and valid claim forms.
Objectors challenge the value of the settlement by cataloging the awards in other cases. Those settlements, however, were reached in cases involving different claims, different companies, different facts, and much larger numbers of class members. Some of the cases did not involve settlement funds at all, but instead required class members to participate in additional adversarial proceedings to recover. Comparisons to cases involving such widely different claims and facts are not meaningful or useful; each case must be evaluated in terms of the particular claims involved and settled, as the district court did here.[FN17]
FN17. In the Martens case, which Objectors claim involved a $100 million recovery for class members, there was no settlement fund. The settlement instead provided an adversary arbitration proceeding to determine any particular individual's recovery. Only approximately 8% of the class members were willing to participate in this process. Martens v. Smith Barney, Inc., No. 96 Civ. 3779, 2003 U.S. Dist. LEXIS 11587, at *16 (S.D.N.Y. 2003). With a total class of approximately 23,000 persons, the total recovery per class member in Martens averaged $4,347 -- slightly over one third of the average recovery in this case, assuming 100% participation, and slightly less than one eighth of the average recovery using the actual participation rate.
The only comparable case cited by Objectors is the Augst-Johnson gender discrimination case against Morgan Stanley, which involved compensation discrimination claims arising out of Morgan Stanley's account distribution and compensation policies. As the district court recognized, “the monetary relief [in this case] is comparable to that approved by the District Court for the District of *50 Columbia in settlement of the parallel Augst-Johnson case.” ER 117. Likewise, a comparable settlement involving Smith Barney settled for a similar amount of money. See id.[FN18]
FN18. That Augst-Johnson involved Title VII rather than § 1981 does not reduce the value of that case relative to this case. Although Title VII has a shorter statute of limitations, the availability of a disparate impact theory of liability increases a plaintiff's likelihood of recovery in any case in which discriminatory intent will be difficult to prove.
Furthermore, the monetary relief provided in the settlement “represents over 40% of the predicted disparity in compensation which Plaintiffs sought as damages.” ER 117. Objectors challenge the measure used by class counsel to evaluate potential damages at trial, but do so by pointing to damages that are theoretically available under law rather than those likely to be awarded in this case. “Back pay, front pay, emotional distress, and punitive damages” may technically be available, but class counsel could reasonably determine that it would be extremely difficult to certify and prove pattern and practice disparate treatment claims warranting such damages. Given the difficulty of proving that the class was owed any of the theoretically available damages listed by Objectors, class counsel reasonably discounted their value and based the damages calculation on the most easily provable and measurable form of damages. As the district court found, “Compensation shortfalls can be readily calculated, and the Parties can choose to have monetary relief focus on pay disparities rather than on constructive or actual terminations as a means of compromising a complex set of claims.” ER 118.
*51 Finally, Objectors again challenge the uniform treatment of African-American and Latino FAs in the distribution formula. As before, the declaration on which Objectors rely is not properly before the court, see Motion To Strike, and does not establish an abuse of discretion. The district court reasonably determined that any disparities between the two groups were not so great that compensating African Americans and Latinos uniformly was unfair. Id. The Earnings Regression component of the formula minimizes any difference in recovery associated with the lower incomes of African-American FAs, ER 333, and any increased termination or attrition rate can be addressed through the termination

provisions of the allocation formula.[FN19] The district court did not abuse its discretion in determining that these provisions adequately accounted for any differences between the groups in terms of compensation and attrition rates, or in accepting class counsel's decision to base the monetary relief, in a case involving the compensation of minority FAs, on the amount of time that class members were receiving illegally reduced compensation while employed by Morgan Stanley.
FN19. Under the allocation formula, each week worked at Morgan Stanley is worth one point, and class members may receive up to 50 additional points if they were terminated and up to 50 additional points if they suffered extreme emotional distress. A class member's termination and emotional distress points are therefore as valuable in the allocation formula as up to two years of employment.
*52 IV. The District Court Did Not Abuse its Discretion in Denying Objectors' Request for Discovery.
“The objector does not have an absolute right to discovery and presentation of evidence. The court, in its discretion, may limit the discovery or presentation of evidence” by an objector “to that which may assist [the court] in determining the fairness and adequacy of the settlement.” 4 Newberg on Class Actions § 11:57, at 184; see also Glicken v. Bradford, 35 F.R.D. 144 (S.D.N.Y. 1964); Manual for Complex Litigation, Fourth, § 21.643 (“Discovery [by objectors] should be minimal and conditioned on a showing of need, because it will delay settlement, introduce uncertainty, and might be undertaken primarily to justify an award of attorney fees to the objector's counsel.”). “The fundamental question is whether the district judge ha[d] sufficient facts before him to intelligently approve or disapprove the settlement.” Hemphill v. San Diego Ass'n of Realtors, Inc., 225 F.R.D. 616, 619-20 (S.D.Cal. 2005). Here, the district court properly exercised its discretion in denying the discovery requested by Objectors on the basis of its determination that “the Objectors [] had meaningful participation in the settlement proceedings, the Court ha[d] sufficient facts before it to intelligently evaluate the settlement, and discovery would cause unnecessary delay.” ER 323.
Objectors sought the workforce data provided to Plaintiffs' counsel and used to generate its damages estimate, the Power Ranking formula and the adverse impact studies performed by Plaintiffs, the opportunity to depose or cross-examine *53 Curtis-Bauer, and responses from Morgan Stanley to several questions relating to the injunctive relief. On appeal, Objectors argue that this discovery “would have allowed meaningful understanding of the Settlement and how it was reached and provided information essential for the District Court to make a fully informed evaluation of the settlement.” AOB 56. However, Objectors point to no specific inadequacies in the record before the district court requiring additional discovery. In fact, most of the requested material -- such as Morgan Stanley's Power Ranking formula and Plaintiffs' studies of Morgan Stanley's workforce data -- was already before the court.
Objectors' desire to review that material for themselves does not establish that the record before the district court was inadequate. To the contrary, the record was far more extensive than necessary. See supra Section LB. The only arguably new evidence Objectors sought through discovery was Curtis-Bauer's testimony under cross-examination and Morgan Stanley's response to certain questions regarding the value of the injunctive relief. However, “Cross-examination of the affiants was not warranted; this [was] not a trial and the test of the evidence which the [c]ourt should receive on a settlement is whether the proffered proof is of a nature which will aid it in passing upon the essential fairness and equity of the settlement.” Glicken, 35 F.R.D. at 148. Similarly, the requested responses would have been of little additional value to the district court, which specifically *54 requested and received additional submissions from the parties regarding the value of the injunctive relief.
Objectors contend that the absence of formal discovery between the parties supported their request for discovery. However, the parties engaged in extensive informal discovery, generating a comprehensive factual record regarding the policies and practices at issue in the case. Contrary to Objectors' contention, Morgan Stanley did not select which data to provide to class counsel, but instead provided data specifically requested by class counsel. ER 849. Where, as here, “the evidence submitted in support of the settlement is the result of truly adversarial proceedings and where the

‘comprehensiveness' of the records developed by the proponents [is great], the objector has a greater burden to show the necessity of additional evidence.” Hemphill, 225 F.R.D. at 620. Given the extensive evidence before the district court, Objectors cannot meet that burden.
Objectors also assert that, under Hemphill, their “number and interests” supported their request for discovery. However, at the time of the court's decision, as now, the objectors represented a small percentage of the class -- less than two percent -- and the remaining class members had a strong interest in avoiding unnecessary delays. See id. at 620.
Finally, although Objectors assert that their request was well-founded, they identified no specific inadequacies in the record requiring additional discovery.
*55 None of the cases cited by Objectors remotely suggest that the district court abused its discretion in denying the requested discovery here. All involved specific inadequacies in the record that could only be remedied through additional discovery. In In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106 (7th Cir. 1979), the Seventh Circuit found that the record raised serious questions regarding the settlement negotiations and that the trial court had therefore “abused its discretion by failing to undertake a careful examination of the conduct of the settlement negotiations and by preventing the plaintiff-objectors from showing that the negotiations prejudiced the best interests of the class.” Id. at 1126, 1131. In Hemphill, the court granted the objectors' request for information that was relevant to the settlement and not in the record, 225 F.R.D. at 624, but denied the requests for information that was irrelevant or already in the record. In In re Lorazepam and Clorazepate Antitrust Litig., 205 F.R.D. 24 (D.D.C. 2001), the district court specifically refused to grant discovery comparable to that requested by Objectors -- namely, class counsel's damages analysis. See also In re Domestic Air Transp. Antitrust Litig., 144 F.R.D. 421 (N.D. Ga. 2004) (granting objectors' requests only as to information required for consideration of the settlement's fairness but not in the record).[FN20]
FN20. As the district court recognized, ER 334, this was not a case like Acosta v. Trans Union LLC, 243 F.R.D. 377, 397 (CD. Cal. 2007), or Reynolds v. Beneficial Nat'l Bank, 260 F. Supp. 2d 680 (N.D. Ill. 2003), in which class counsel engaged in almost no fact-finding and their performance fell below any objective standard of adequacy.
*56 Objectors' passing argument that the district court erred by failing to conduct an evidentiary hearing is similarly without merit. The only factual dispute discussed in the portion of the order cited by Objectors is a disagreement regarding Williams' “evolving reaction to the settlement terms.” ER 109. As explained above, however, Williams' rejection of the settlement did not undermine the adequacy of class representation because she was informed of and consulted about the settlement process. Id.[FN21] The district court, following the procedures recommended by the Manual for Complex Litigation in all respects, provided Objectors with the opportunity to present evidence and to be heard at both the preliminary and final approval stages of the settlement process. It was required to do no more.
FN21. Because Appellants' Opening Brief discusses no other alleged factual disputes, Objectors appear to concede that Plaintiffs adequately rebutted Ms. Williams' prior attempts to identify inconsistencies in the record. See PSER 847-49, 857-59.
CONCLUSION
For the reasons stated herein, Plaintiffs - Appellees respectfully ask this Court to affirm the District Court's orders denying Objectors' discovery requests, vacating its order for an evidentiary hearing, certifying the class of minority FAs, and granting preliminary and final approval to the class settlement.
Daisy JAFFE; Margaret Benay Curtis-Bauer, Plaintiffs - Appellees, v. Jonathan GLOVER; Latrissa Gordon; Marilyn

White; Peter Meme; Marshell Miller; Jerome Senegal; Hubert Stalling; Lanta Evans-Mott; Carlton McDowell; Sarah Nyamuswa; Theron Cyrus, Objectors - Appellants, v. Morgan Stanley & Co., Inc., Defendants - Appellees. 2010 WL 685874 (C.A.9 ) (Appellate Brief )
END OF DOCUMENT

 
 United States Court of Appeals, Ninth Circuit. Daisy JAFFE and Margaret Benay Curtis-Bauer, Plaintiffs-Appellees,
v. Jonathan GLOVER, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert
Stalling, Lanta Evans, Carlton McDowell, Sarah Nyamuswa, Theron Cyrus, Objectors-Appellants, v.
Morgan Stanley & Co., Inc., Defendant-Appellee. No. 08-17599. March 4, 2010.
Appeal from Entry of Final Judgment of the United States District Court for the Northern District of California • Entered on October 22, 2008 No. 3:06-cv-03903-TEH • Honorable Thelton E. Henderson
Reply Brief of Appellants
Mary Stowell, Esq., Linda D. Friedman, Esq., Suzanne E. Bish, Esq., Stowell & Friedman, Ltd., 321 South Plymouth Court, Suite 1400, Chicago, Illinois 60604, (312) 431-0888 Telephone, mstowell@sfltd.com, lfriedman @sfltd.com, sbish @sfltd.com; Eric S. Oto, Esq., Law Offices of Eric S. OTO, 1111 South Grand Avenue, Suite 517, Los Angeles, California 90015, (213) 749-7540 Telephone, eso @otoesq.com; Attorneys for Objectors-Appellants, Jonathan Glover, et al.
*ii TABLE OF CONTENTS
TABLE OF AUTHORITIES ... iii
LEGAL STANDARD ... 1
ARGUMENT ... 2
I. The District Court Was Correct To Order An Evidentiary Hearing On Its July 7, 2008 Order ... 5
II. The Class Did Not Meet The Standards Set Forth In The District Court's July 7, 2008 Order Or In Rule 23 For Adequate Class Representation ... 8
A. The Class Was Not Adequately Represented When A Settlement Was Reached Without The Knowledge and Over The Objection Of Plaintiff Denise Williams ... 8
B. Curtis-Bauer Is Not An Adequate Class Representative Because Of Her Late And Limited Involvement and Post-Hoc Ratification Of The Settlement Agreement ... 12
C. Curtis Bauer's Post-Hoc Ratification Of The Settlement In Exchange For A Disproportionate Payment From The Common Fund Creates An Irreconcilable Conflict Of Interest With The Class ... 18

III. Neither Law Nor Policy Supports the Legal Standard Advocated By Plaintiffs-Appellees Regarding The Pre-Filing Role Of Counsel And A More Limited Role For Class Representatives ... 22 CONCLUSION ... 26 CERTIFICATE OF COMPLIANCE ... 28 CERTIFICATE OF SERVICE ... 29
*iii TABLE OF AUTHORITIES Cases Armour v. Network Assoc. Inc. 171 F. Supp. 2d 1044 ... 19 Atari v. Superior Court 166 Cal. App. 3d 867, 212 Cal. Rptr. 773 (1985) ... 11 Babbitt v. Albertson's Inc. No. C-92-1883 SBA, 1993 U.S. Dist. LEXIS 18801 (N.D. Cal. Jan. 28, 1993) ... 11 Castaneda v. Burger King Corp. No. C 08-4262 WHA, 2009 U.S. Dist. LEXIS 69592 (N.D. Cal. July 31, 2009) ... 11 Dondore v. NGK Metals Corp. 152 F. Supp. 2d 662 (E.D. Pa. 2001) ... 10 EEOC v. UPS 424 F.3d 1060 (9th Cir. 2005) ... 2 Fonseca v. Sysco Food Srvcs. of Ariz., Inc. 473 F.3d 840 (9th Cir. 2004) ... 17 In re General Motors Corp. Engine Interchange Litigation 594 F.2d 1106 (7th Cir. 1974) ... 11, 26 In re McKesson HBOC, Inc. Sec. Litig. 126 F. Supp. 2d 1239 (N.D. Cal. 2000) ... 10, 11 In re Peregrine Systems, Inc. Securities Litigation No. 02-870, 2002 U.S. Dist. LEXIS 27690 (S.D. Cal. Oct. 9, 2002) ... 19 Ingrahm v. Coca-Cola Co. 200 F.R.D. 685 (N.D. Ga. 2001) ... 22

*iv Kayes v. Pacif. Lumber Co. 51 F.3d 1449 (9th Cir. 1995) ... 20
Satchell v. Federal Express No. C 03-2659 SI, 2006 WL 3507913 (N.D.Cal. Dec. 5, 2006) ... 22
Saylor v. Lindsley 456 F.2d 896, 904 (2d Cir. 1972) ... 11
Staton v. Boeing Co. 327 F.3d 938 (9th Cir. 2003) ... 10
Swift v. First USA Bank No. 98-8238, 1999 U.S. Dist. LEXIS 19474 (N.D. Ill. Dec. 14, 1999) ... 20
United States v. Boone 229 F.3d 1231(9th Cir. 2000) ... 17
United States v. Hinkson 585 F.3d 1247 (9th Cir. 2009) ... 1, 2, 15
United States v. McConney 728 F.2d 1195 (9th Cir. 1984) ... 1
United States v. Sayetsitty 107 F.3d 1405 (9th Cir. 1997) ... 17
*1 Objectors-Appellants (“Appellants”) respectfully submit this reply brief in support of their appeal. Appellants submit that the fundamental issue on appeal is a critically important but straightforward legal question about the proper role of plaintiffs and counsel prior to the filing of a class action lawsuit, about which the parties to this appeal have a fundamental disagreement, but which arises from largely undisputed facts.
LEGAL STANDARD
Appellees misstate the standard of review applicable to the issues presented by this appeal. Resolution of these issues largely involves the application of undisputed facts to law, most importantly to the adequacy of representation prong of Rule 23, which is designed to protect the constitutional due process rights of absent class members.[FN1] As such, this Court's review is de novo. United States v. McConney, 728 F.2d 1195, 1203 (9th Cir. 1984) (“The predominance of factors favoring de novo review is even more striking when the mixed question implicates constitutional rights”); United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir. 2009)(district court's application of fact to law that requires reference to values that “animate legal principles” or implicate constitutional rights must be reviewed *2 de novo “as if it were a legal finding”). In addition, as the district court explained, adequacy of representation is a “mixed question of law and fact” (ER 232-233), which also warrants de novo review. EEOC v. UPS, 424 F.3d 1060, 1068 (9th Cir. 2005).
FN1. The class was certified under both Fed. R. Civ. P. 23(b)(2) and (3). Class members were bound by and could not opt out of the Rule 23(b)(2) injunctive relief. For this reason, the Court allowed opt-out Objectors who were current employees to object to the settlement, recognizing that the 23(b)(2) settlement would extinguish significant rights of even these class members. ER 247.
Assuming arguendo that the review is not de novo, Appellants also contend that the district court abused its discretion in denying Objectors discovery and an opportunity to meaningfully participate and present necessary evidence to the

district court; in making factual findings regarding the adequacy of class representation and the resulting class settlement; in failing to conduct the evidentiary hearing it initially deemed necessary; and in certifying and approving the class settlement. Appellants respectfully submit that the district court's findings and rulings are an abuse of discretion and clearly erroneous because they are (1) “illogical,” (2) “implausible,” or (3) without “support in inferences that may be drawn from the facts in the record.” Hinkson, 585 F.3d at 1262.
ARGUMENT
Plaintiffs-Appellees' brief speaks eloquently to the parties' vastly different interpretations of the law regarding the duties and rights of clients and counsel seeking to act on behalf of a class prior to the filing of a class action lawsuit or reliance on that lawsuit by putative class members.
*3 Plaintiffs-Appellees' counsel argue that Denise Williams' (“Williams”) filing of a representative charge of sex and race discrimination before the Equal Employment Opportunity Commission (“EEOC”) rendered them fiduciaries to a class of individuals similarly situated to Williams, an African American. This “fiduciary role” apparently then authorized them to disregard their sole client (Williams) and to accept a settlement on behalf of a class of African Americans and Latinos, although Williams, objected to the settlement and informed them that she would not agree to serve as a class representative for Latino Financial Advisors (“FAs”). See, e.g., P. Resp. at 38-39.[FN2] Plaintiffs-Appellees' counsel claim this fiduciary role despite the fact that no race discrimination class action lawsuit had been filed, no discovery had been conducted, the EEOC had not investigated the claims, and no Latino class member or class representative had been involved in the settlement or as a class representative. Plaintiffs-Appellees' counsel claim they were permitted to solicit a new class representative, Margaret Benay Curtis-Bauer (“Curtis-Bauer”) willing to ratify the settlement agreement when Williams objected to the deal. See, e.g., P. Resp. at 39-41. They further find nothing problematic with coupling the search for a new class representative with an offer to Curtis-Bauer that should she agree to serve as a class representative and approve *4 their settlement, she would receive special payment from the class common settlement fund for her “non-class” and time-barred claims. See, e.g., P. Resp. at 30-32. Finally, the new class representative had not been employed by Morgan Stanley for five years when she supposedly approved the injunctive relief.
FN2. Reference to Plaintiffs-Appellees' Response brief in this appeal will be made as “P. Resp. at X.” Similarly, references to Defendant-Appellee Morgan Stanley's (“Morgan Stanley”) Response brief in this appeal will be made as “D. Resp. at X.”
After hearing Objectors' arguments, the district court initially ruled that an evidentiary hearing was necessary to explore the circumstances that led to the settlement and whether the class had been adequately represented. See generally ER 222-235. For reasons unclear to Appellants, the district court reconsidered that decision. In finding that the class was adequately represented, the district court accepted Plaintiffs-Appellees' approach, apparently agreeing that the role of the client in a pre-filing class action civil rights settlement is subordinate to counsel. See, e.g., ER 108-109.
Thus, this appeal presents important legal questions about the role of both Plaintiffs and lawyers pre-filing and prior to any notice to or reliance by similarly situated persons. It also raises questions about the proper legal standard for review of such agreements under Rule 23. Appellants respectfully submit that their position meets Rule 23 and due process and better serves the interests of both the legal community and civil rights litigants.
*5 I. The District Court Was Correct To Order An Evidentiary Hearing In Its July 7, 2008 Order
The district court conducted a fairness hearing on final approval of the settlement. See generally ER 236-320. Prior to the hearing, although the Court denied their request for discovery, Objectors submitted argument and evidence that the

class had not been adequately represented and the settlement was insufficient. See Dkt. 161;[FN3] ER 412-476.[FN4] Named plaintiff Denise Williams also submitted a detailed declaration that explained her exclusion from and lack of meaningful involvement in the settlement negotiations, principled refusal to represent Latino class members, and objection to the settlement. See ER 412-418. At the hearing, the district court heard argument from Objectors' counsel regarding, among other things, Curtis-Bauer's inadequacy as a class representative and other flaws and inadequacies of the settlement. See generally ER 248-64; 282-307. At the close of *6 these proceedings, the court expressed concern about “whether there was adequate representation at crucial stages of litigation,” and hesitancy regarding “whether Miss Curtis-Bauer's involvement as a representative was sufficient to cure any due process problems.” (ER 317-319)
FN3. Citations to the lower court docket will be referred to as “Dkt. X.” Citations to the Appellate Court docket will be referred to as “App. Dkt. X.”
FN4. Objectors incorporated by reference into their final objections their previous objections and submissions to the court, including a supplemental brief and exhibits (Dkt. Nos. 145 - 147), that the court initially denied them leave to file. The district court accepted, considered, and even relied on these incorporated filings. Indeed, in the order that followed the hearing on final approval, the district court cited directly to documents originally submitted as part of the supplemental briefing, but incorporated by reference in the final Objections. See ER 231, n. 10, citing to the declaration of Michael Barnett, Dkt. 145-6 at paragraphs 18-28. The supplemental briefing is included in Appellants' Excerpts of Record at 481-770, which Appellees have moved to strike. App. Dkt. Nos. 33, 36. As in Appellants' response to Appellees' motions (App. Dkt. 53), these documents are properly part of the appellate court record, and should be considered, not stricken, by this Court.
In a July 7, 2008 Order, the district court repeated its concerns and referred the case to a magistrate judge for an evidentiary hearing into whether the class had been adequately represented. The court explained that “there are some cases in which having a class representative's personal knowledge of the factual circumstances, and aid in rendering decisions' . . . at crucial stages of the litigation is necessary to ensure due process and adequate representation of absent class members.” (ER 232-33) (internal citations omitted).
The district set forth a list of nonexhaustive factors it deemed relevant to the question of whether the class representative was adequate: • how crucial the state of litigation is to the outcome of the case • whether the case is seeking to remedy objectively measurable harm or harm that can easily be monetized, as opposed to harm or conditions involving more subjective or complex issues where critical facts lie exclusively or primarily within the knowledge of class members alone; • the likelihood that the decisions or outcomes at the stage of the litigation in question would have been different had class members *7 been more involved by, for example, providing personal knowledge of critical facts; • whether any class member was involved at the stage of litigation at issue, and if so, to what extent; and • whether any decisions or outcomes from a stage of litigation in which an adequate representative did not participate were approved or ratified by a subsequently added representative and, if so, whether that approval was meaningful--in other words, whether it involved genuine scrutiny and a willingness and/or ability to revisit the earlier decision or outcome or cursory and perfunctory review. (ER 233)
Finally, the district court referred the case to a Magistrate Judge for a hearing to include testimony on the degree to which any class member, including Ms. Williams, was involved in settlement negotiations, developing settlement terms, or discussing settlement options; and on Ms. Curtis-Bauer's involvement in the suit and the settlement, her knowledge of the conditions and practices challenged in the suit and on her understanding of the terms of the Settlement Agreement and its consequences. See id.
The standard set forth by the court was thoughtful and constructive, and presented an analytical framework designed to

“hew to the Constitution and laws, and not to common practice.” (ER 225, n.4) After Plaintiffs-Appellees filed a motion for reconsideration and submitted materials in camera, the district court reversed this order. See ER 104-129. Because the submissions demonstrated *8 additional issues of disputed facts relevant to representation, it was error for the district court to reverse its order. Plaintiffs-Appellees' appellate brief again demonstrates that Plaintiffs-Appellees do not meet the district court's standards.
II. The Class Did Not Meet The Standards Set Forth In The District Court's July 7, 2008 Order Or In Rule 23 For Adequate Class Representation
A. The Class Was Not Adequately Represented When A Settlement Was Reached Without The Knowledge and Over The Objection Of Plaintiff Denise Williams
Denise Williams submitted sworn testimony that she was prevented from meaningful involvement in her own lawsuit and objected to the actions of counsel, including the settlement they reached without her consent. (ER 413-18; ER 1344-48) Williams also refused to serve as a class representative for Latino FAs and objected to her inclusion in a draft complaint sent to her on July 30, 2007. See ER 415. As a result, Plaintiffs-Appellees' counsel then admittedly went in search of a new class representative plaintiff who would agree to represent Latinos and approve the settlement counsel had reached without Williams' knowledge or consent. (ER 1374-75; ER 1375 at ¶13)
Rather than attempting to establish that Williams approved the Settlement, Plaintiffs-Appellees' counsel contend that adequate representation does not require a class representative to approve the terms of the settlement because class counsel owe their duties to the class and are not bound to abide by the class *9 representative's instructions.[FN5] Dkt. No. 223 at 13-14. In the context of this case, however, when the settlement was negotiated and reached, there was no class counsel. A race discrimination class action had not been filed, and the district court had not appointed class counsel. Plaintiffs-Appellees had a single client, Denise Williams. No class members were relying upon the action to preserve or protect their rights, and counsel had no duty, or rights, to the class.
FN5. In claiming the right to simply replace Williams, Plaintiff-Appellant cites Olden v. LaFarge, 472 F.Supp.2d 922 (E.D.Mich. 2007) and wrongly argues that wrongly argues that the “the only distinction ... is that the settlement [in Jaffe] was negotiated before the complaint was amended to include class-wide claims of race discrimination.” P.Resp. at 40. Unlike here, in Olden and their other cases, discovery had been conducted, classes had been certified; and litigation had been ongoing for years prior to settlement negotiations. Olden, 472 F.Supp.2d at 926-927 (class certified and litigation ongoing for over seven years pre-settlement); Heit v. Van Ochten, 126 F.Supp.2d 487, 488 and 491 (W.D.Mich. 2001) (class certified, “substantial discovery ... suggest [ing] that the parties arrived at a fair compromise based on their full understanding of both the factual and legal issues surrounding the case”); Fleury v. Richemont, No. C-05-4525, 2008 U.S. Dist. LEXIS 64521, *64 (N.D.Cal. 2008)(same). Nor are these employment cases, which the district court acknowledged require “a representative with certain knowledge and involvement.” Dkt. 206 at 10. Plaintiff-Appellees have not argued that Williams was not adequate, nor did they seek her removal as a class representative, unlike counsel in Olden and Heit. Indeed, Appellees did not make their concerns about Williams known to the district court until their motion for reconsideration. P.Resp. at 11; ER 1375-1376. Any claim that Williams was inadequate during the most crucial settlement negotiations period must result in a finding that the class was not adequately represented. See ER 222-235; ER 104-109 (linking Curtis-Bauer's adequacy to Williams' perceived involvement in settlement negotiations).
Thus, Plaintiffs-Appellees' argument is premised on its assertion that counsel assumes the duties and rights of class counsel as soon as it files a *10 representative charge of discrimination with the EEOC. This contention is unsupported by any law or common sense. Filing an EEOC charge is a confidential action that does not trigger notice to class members or reliance by any putative class. At that stage of the proceedings, the interests of absent class members are

protected by the EEOC. Importantly, the authority cited by Plaintiffs-Appellees involves fiduciary duties that may arise after filing of a class action lawsuit. None involve pre-filing activity or the filing of representative EEOC charges. See, e.g., Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003)(consolidated employment discrimination class action, where class certified prior to settlement discussions); Dondore v. NGK Metals Corp., 152 F. Supp. 2d 662, 665 (E.D. Pa. 2001)(toxic tort class action filed in state court, along with various individual federal suits which overlapped state class claims); In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245-46 (N.D. Cal. 2000)(securities class action, consolidated from 53 separate class action complaints).
A lawyer's fiduciary duties to the class arise when a class action is filed, and class members rely upon the action. See Staton, 327 F.3d at 960 (“Beyond their ethical obligations to their clients, class attorneys, purporting to represent a class, also owe the entire class a fiduciary duty once the class complaint is filed”); see also 2 NEWBERG & CONTE § 11.65 (“The general rule is that the named *11 plaintiff and counsel bringing the action stand as fiduciaries for the entire class, commencing with the filing of a class complaint”).[FN6]
FN6. Moreover, most courts hold that an attorney-client relationship is not established until the class is certified. See, e.g., In re McKesson HBOC, Inc. Secs. Litig., 126 F. Supp. 2d 1239, 1245 (N.D. Cal. 2000)(“The leading California case [Atari v. Superior Court, 166 Cal. App. 3d 867, 212 Cal. Rptr. 773 (1985)] makes clear that putative class members are not ‘represented,’ ” and “[w]hile lead counsel owes a generalized duty to unnamed class members, the existence of such a fiduciary duty does not create an inviolate attorney-client relationship with each and every member of the putative class”); see also Castaneda v. Burger King Corp., No. C 08-4262 WHA, 2009 U.S. Dist. LEXIS 69592 *19-20 (N.D. Cal. July 31, 2009); see also Babbitt v. Albertson's Inc., No. C-92-1883 SBA, 1993 U.S. Dist. LEXIS 18801, *10 (N.D. Cal. Jan. 28, 1993);.
The district court erred in finding that Williams' role in this litigation was sufficient to meet Rule 23(a)(4)'s adequacy standards. See Saylor v. Lindsley, 456 F.2d 896, 904 (2nd Cir. 1972) (reversing court's approval of settlement when class representative did not authorize the settlement and objected after learning its terms). Nothing in either parties' briefs demonstrates otherwise. Worse, the approach endorsed by the district court will encourage defendants to seek out and negotiate favorable settlements with lawyers, who could then go find a class member after the fact. See, e.g., In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106 (7th Cir. 1974) (explaining “attorney-shopping” as among dangers of unauthorized settlement negotiations). As such, this Court should determine the class was not adequately represented.
*12 B. Curtis-Bauer Is Not An Adequate Class Representative Because Of Her Late And Limited Involvement and Post-Hoc Ratification Of The Settlement Agreement
Likewise, Curtis-Bauer was not an adequate class representative. In an attempt to recast history, Plaintiffs-Appellees suggest that Curtis-Bauer approached plaintiff's counsel in May 2007 with her interest in becoming a class representative for minority FAs. (P. Resp. at 11) This is demonstrably false and contrary to testimony by Curtis-Bauer and other record evidence. In May 2007, no race discrimination lawsuit had been filed, as the Jaffe lawsuit was still a putative gender discrimination class action. See, e.g., Dkt. 25. As such, plaintiffs' counsel had set up a case website, entitled www.genderlawsuitagainstmorganstanley.co, to solicit information from potential female FA class members. See PSER 420. Curtis-Bauer's only “contact” with plaintiff's counsel in May was to submit contact information and a few lines in a form accessible on the case website on May 31, 2007 regarding the gender discrimination lawsuit. (ER 838 at ¶2; PSER 420; Dkt. 138 at 4.)
Plaintiffs-Appellees' counsel did not contact Curtis-Bauer nor discuss any potential race discrimination claims with her until late July at the earliest, only days before the case was converted to a race discrimination case and the settlement was presented to the district court, and only after the class settlement agreement had been reached by counsel for plaintiff Denise Williams without her knowledge *13 or approval of its terms. See Dkt. 138 at 4-5, ¶15 (Curtis-Bauer stating that

her own “direct contributions” were made “no more than a week before the agreement in principle had been finalized”); see also ER 838, 415-416, 1346-47; see also ER 347 (district court finding that Curtis Bauer became involved “presumably at least a few days before” public announcement of the settlement).
Although counsel reached a settlement agreement on July 23, 2007, (ER 850; ER 1374), Williams was not informed of the terms of the settlement prior to the agreement being reached nor did she approve them. (ER 415, 1346-47; 1374-75) On July 30, 2007, Williams' counsel sent her a draft complaint that did not include Curtis-Bauer as a named plaintiff because she was not then in the case. (ER 415, 420-21, 424) After Williams informed her lawyers that she would not serve as a representative for Latinos, she was told that they “had found someone else.” (ER 415 at ¶8, 1346) Even at that late date, Plaintiff's counsel did not inform Williams of the monetary settlement they had reached without her input, involvement or consent. (ER 414-15, 1347, 1374-75)
Williams' counsel then issued a mandate to the legal team to sign up a new plaintiff willing to ratify the agreement Williams would not approve or support. (ER 1375 at ¶ 13) Only then and for the first time did Plaintiffs' counsel contact Curtis-Bauer. (ER 1375) During this frantic search for a class representative, on *14 August 1, 2007, the same counsel contacted Moore Group member and Morgan Stanley manager and FA Mary Evans as well. (ER 1061-62; PSER 442)
Thus, as Curtis-Bauer affirms and her counsel concedes, Curtis-Bauer was involved in this lawsuit for less than one week before she was presented to the district court as a new plaintiff and class representative and advocate of the settlement. Dkt. 138 at 4-5, ¶15; ER 838.[FN7] During this time, Curtis Bauer claims that she carefully assessed counsel and their competency, was fully interviewed regarding her claims, agreed to become a plaintiff, learned and accepted the duties a class representative, reviewed counsel's negotiations and bases for resolving the lawsuit, reviewed the settlement agreement, made suggestions to that agreement that were then negotiated with Morgan Stanley, negotiated a substantial payment for herself, and approved the settlement agreement. (ER 838; Dkt. 138 at 4-5; ER 327-38) It is simply not credible that she performed all of these tasks in less than one week. The district court acknowledged that Curtis-Bauer “had not been participating all along” and was likely involved for “a few days.” ER 347-48. The district court's findings that Curtis Bauer could adequately perform these important *15 tasks in just a “few days” (ER 348) are “illogical” and “implausible” and as such an abuse of discretion. Hinkson at 1261-62.
FN7. This timeline is entirely consistent with the statements Ms. Curtis-Bauer made to Moore group members that she was contacted on a Friday and told she had only three days to think about her decision to serve as a class representative. By Tuesday of the following week, her name had been added to the Second Amended Complaint and her $125,000 special payment secured. See Ex. 2, ER 842-844, Roy Dec., Ex. 3, ER 448-458, Evans Dec., Ex. 4, Dkt. 161-7; ER 532-535. Mabon Dec.
The evidence squarely demonstrates that Curtis-Bauer is not an adequate representative because during the “no more than a week” of her “direct contributions to the negotiations,” Curtis-Bauer not only ratified the common fund, she and class counsel also secured a special payment of $125,000 to be paid to her from that fund for her “non-class claims.” These facts raise conflict and adequacy issues, and the law prevents Curtis-Bauer from being deemed an adequate representative.
In addition, Curtis-Bauer admitted during conversations with Moore Group members that she had little or no knowledge, involvement, or interest in the race discrimination class action. On the evening of November 27, 2007, Curtis-Bauer spoke twice by telephone with her friend, Mary Evans, and told her that she • did not know much about the Jaffe case and thought it involved a statewide rather than a nationwide class; • learned of a race discrimination case against Morgan Stanley when a Lieff Cabraser attorney contacted her on a Friday and told her she had to decide by the following Monday whether to become a class representative; • was pressured by the attorney to become a class representative; • felt that the remedies in the settlement did not go far enough, and

• was not told Curtis-Bauer about the Moore Group's objections or negotiations with Morgan Stanley.
*16 (ER 450-452) During lengthy phone conversations with other members of the Moore Group, Curtis-Bauer repeated the statements she had made to Evans. (ER 842-844) She told Maurice Mabon that she had “only one month” in the class period and had never filed a charge or claim of discrimination against Morgan Stanley. (Dkt. 1161-7 at 4; ER 534) As Curtis-Bauer told Brian Roy, she “was willing to lend her name” to the lawsuit, “but did not want to be actively involved” and “wanted to stay at arm's length.” (ER 844; ER 51-54)
Curtis-Bauer attended neither the preliminary nor the final settlement approval hearings. Instead, she submitted two declarations -- but neither of them denied the facts stated above. See ER 837-839; Dkt. 138 Curtis-Bauer admitted that her own contributions to the settlement negotiations “were probably no more than for the week before agreement in principle was finalized” (Dkt. 138 at 4-5) on August 2, 2007. Curtis-Bauer first spoke with a Lieff Cabraser attorney sometime in July 2007. (ER 838; Dkt. 138 at 4)
Plaintiffs-Appellees dismiss this evidence as hearsay that was excluded by the trial court and contradicted by other declarations submitted below. (P. Resp. at 35-36) Plaintiffs are incorrect on all counts. First, neither Curtis-Bauer nor any other party presented evidence to controvert the testimony by Evans, Roy, and Mabon recounted above. (See e.g., ER 837-39; Dkt. 138)
*17 Second, the trial court did not, in fact, exclude Roy's oral testimony or the declarations of Evans, Roy, or Mabon, and Objectors re-submitted the three declarations, without challenge by the parties, as part of their objections to final approval of the settlement. (ER 448-458; Dkt. 161-4; Dkt. 161-7), ER 532-535; ER 842-844, Dkt. 161-6. Without question, the testimony of these witnesses is properly part of the record on appeal.
Third, Curtis-Bauer's admissions to the Moore Group were admissible for at least three reasons. They are not hearsay because they were “statement[s] offered against a party and . . . the party's own statement[s].” Fed. R. Evid. 801(d)(2)(A); Fonseca v. Sysco Food Srvcs. of Ariz., Inc., 473 F.3d 840, 846 (9th Cir. 2004) (concluding “as a matter of law” that trial court erred in excluding declarations containing admissions by defendant's employees). They also qualify as statements reflecting Curtis-Bauer's “then existing state of mind [or] emotion . . . (such as intent, plan, motive, design, mental feeling . . .)” and as statements against Curtis-Bauer's interests in being approved as a class member and in receiving $125,000 for her time-barred individual claims under Rule 803(3) of the Fed. R. of Evid. 803(e), 804 (b)(3); United States v. Sayetsitty, 107 F.3d 1405, 1414-15 (9th Cir. 1997) (holding that statement from which intent could be inferred was admissible under “state of mind” exception to hearsay rule); United States v. Boone, 229 F.3d 1231, 1232 (9th Cir. 2000) (holding that inculpatory statements confided privately *18 to girlfriend carried “the circumstantial guarantee of reliability that underpins the hearsay exception for statements against interest”). The district court presumably acknowledged as much in not excluding the statements, which were submitted on multiple occasions.
Even if Curtis-Bauer's admissions could be deemed inadmissible hearsay, the trial court could and should have cured this defect by permitting the Moore Group to obtain her testimony. Given the extraordinary timing and circumstances under which plaintiffs' counsel recruited Curtis-Bauer as a class representative, the serious questions about her adequacy to serve in that role, and the district court's duty to ensure fairness, she should have informed the district court directly of her role and involvement in the settlement.
C. Curtis Bauer's Post-Hoc Ratification Of The Settlement In Exchange For A Disproportionate Payment From The Common Fund Creates An Irreconcilable Conflict Of Interest With The Class
In exchange for agreeing to ratify the settlement reached by counsel over the objection of the named plaintiff,

Curtis-Bauer will receive a class bonus of $25,000 and another payment of $125,000 to settle her non-class claims. P. Resp. at 9, n.3. The $125,000 payment represents nearly ten times the pro rata award negotiated for nearly 1,400 class members. See, e.g., ER 117. For her “work” of no less than one week in this lawsuit, Curtis-Bauer will receive a windfall for claims that she never pursued in the nearly five years since she left Morgan Stanley. It is clear that *19 Curtis-Bauer had no intention of pursuing these claims, nor could she, as they are plainly time-barred.[FN8] The district court acknowledged that Curtis-Bauer's non-class claims were likely time-barred and resulted in a substantial settlement as part of this lawsuit, but found no evidence she benefited at the expense of the class. (ER 328-29) This finding is clearly erroneous, as Curtis-Bauer's settlement comes from the common fund established for the class. (P. Resp. at 9, n. 3)
FN8. Appellees' contention that Curtis-Bauer was able to settle her time-barred claims for a substantial amount because they were race harassment claims that would have resulted in negative publicity for Morgan Stanley is not compelling. Prior to her being recruited as a named plaintiff, there was no risk of adverse publicity because she had abandoned any such rather stale allegations by not pursuing them in the nearly five years since she left Morgan Stanley. More importantly, it is difficult to understand why a committed class representative would agree to keep confidential racial harassment and culture that goes to the heart of the systemic claims of the class she seeks to represent. This, too, casts doubt on her commitment.
In reaching its decision, the district court ignored the line of cases holding that even an apparent conflict of interest is sufficient to defeat the adequacy of a proffered class representative. Under this authority, class representatives are inadequate where a conflict of interest creates “the appearance that they are not able to adequately investigate and prosecute this action on behalf of the absent members of the class.” In re Peregrine Systems, Inc. Securities Litigation, No. 02-870, 2002 U.S. Dist. LEXIS 27690, *37 (S.D. Cal. Oct. 9, 2002).[FN9] Here, the *20 disproportionately large, special payment of $125,000 to Ms. Curtis-Bauer relative to her small possible recovery under the class fund formula, in combination with her eleventh-hour assumption of the named plaintiff role, likewise create the appearance of a conflict of interest and bar Ms. Curtis-Bauer from serving as class representative. See also Swift v. First USA Bank, No. 98-8238, 1999 U.S. Dist. LEXIS 19474, *17 (N.D. Ill. Dec. 14, 1999) (proposed class representative was inadequate because she was “branded with the appearance of, and potential for impropriety, which is the primary” concern of the court, even though the court did not suppose that she would “change a mere appearance into an actual occurrence”); accord Kayes v. Pacif. Lumber Co., 51 F.3d 1449, 1465 (9th Cir. 1995) (affirming the district court's disqualification of class counsel due to the appearance of divided loyalties).
FN9. Plaintiff-Appellee is wrong that Private Securities Litigation Reform Act (PSLRA) cases are irrelevant, as the PSLRA requires courts to determine whether a proposed lead plaintiff is the most adequate representative. Armour v. Network Assoc. Inc., 171 F. Supp. 2d 1044 at 1048. The court must first decide whether the proposed lead plaintiff meets the threshold adequacy requirements of Rule 23, id., so PSLRA cases are applicable outside the PSLRA context insofar as they comment on the application of Rule 23.
Under the apparent conflict standard, the underlying facts concerning Ms. Curtis-Bauer's negotiation of a substantial payment from the class common fund are particularly troubling given that her “non-class claims” are time-barred.[FN10] *21 Without the class action, she would have no potential recovery on those “non-class” claims.
FN10. Contrary to Appellees' suggestion (P. Resp. at 31), Curtis-Bauer could not have revived her stale claims by relying on the standstill negotiated by the Moore group. First, neither class counsel nor Curtis-Bauer was aware of the standstill at the time they negotiated a $125,000 payment for her individual claims. In any event, the standstill applies to Moore's class claims, not Curtis-Bauer's non class claims, and does not revive claims that were barred as of August 2006. Finally, if Curtis-Bauer is suggesting that she can intentionally elect to apply the Moore standstill only to herself while not protecting the rest of the class members with a class period that dates back to August, 2006, this is another example of impermissible self-dealing or at least an appearance of impropriety sufficient to disqualify her as a class representative.

Based on a fund allocation formula that is heavily weighted towards tenure, Ms. Curtis-Bauer will likely receive a nominal award for her class claim. See ER 171-72. Because of her $125,000 special payment from the common fund, Ms. Curtis-Bauer was not required to stand in the shoes of class members and balance her low recovery from the common fund against the benefits of the diversity initiatives. Indeed, as a former employee, Curtis-Bauer will not benefit from the settlement's injunctive relief. Class members cannot be confident that Curtis-Bauer would support the settlement without this favored treatment. Thus, while Curtis-Bauer has an actual conflict of interest sufficient to disqualify her as a class representative, the appearance of divided loyalties is enough to bar her from serving as a class representative under Rule 23.
The cases cited by Plaintiffs-Appellees do not undercut the conflict presented by the non-class payment to Curtis-Bauer, as they relate to incentive payments for service as class representatives, and not payments for non-class, *22 time-barred claims from the common fund established for the class.[FN11] Moreover, these payments were made to class representatives in cases resolved after the suit was filed, after discovery occurred, and where there was clear evidence that the class representatives participated meaningfully in the litigation over an extended period of time, as opposed to one week.
FN11. For example, in Ingrahm v. Coca-Cola Co., 200 F.R.D. 685 (N.D. Ga. 2001), class representatives received substantial incentive awards due to their extraordinary participation in the investigation, prosecution and settlement of the case, a far cry from the $150,000 differential payment to Ms. Curtis-Bauer for the release of her time-barred non-class claims and few days of “work” that she allegedly contributed to the settlement. Moreover, the issue of payment of non-class claims did not specifically arise in Satchell v. Federal Express, No. C 03-2659 SI, 2006 WL 3507913, at*1 (N.D.Cal. Dec. 5, 2006). III. Neither Law Nor Policy Supports the Legal Standard Advocated By Plaintiffs-Appellees Regarding The
Pre-Filing Role Of Counsel And A More Limited Role For Class Representatives
Plaintiff-Appellees argue that the duties of class representatives are minimal and largely met by selecting competent counsel. They suggest that permitting class representative plaintiffs a more meaningful role, even in civil rights cases, would lead to a parade of horribles. To the contrary, this participation will ensure real reform fashioned by those who have experienced and understand the defendant's practices firsthand, as well as monetary relief and damages calculated with the assistance of those who suffered the losses.
This case underscores that there is no danger in requiring meaningful participation and approval by civil rights class representatives. This is not a *23 situation where there was a likelihood that the discrimination would go unremedied absent this case and this law firm. Had Williams' instructions been heeded and the settlement of Latinos and African Americans rejected, there were other class members who stood ready, willing and able to advocate for the class.
Most notably, in August 2006, well before Williams ever filed a representative EEOC charge, a much larger group of 14 current and former Morgan Stanley FAs and managers, the Moore Group, first raised individual and class claims of discrimination with Morgan Stanley. See ER 1154-1178. They negotiated a class standstill with Morgan Stanley as of August and worked diligently to address the systemic issues facing African Americans at Morgan Stanley. (ER 1141-52) They traveled across the country to prepare for and meet with Morgan Stanley representatives to discuss the firm's discriminatory practices and devise potential reforms, engaging a nationally respected mediator, Linda Singer of JAMS, to assist in the process. See, e.g., ER 963-964; 966-967. The Moore Group was willing, able and committed to achieving change at Morgan Stanley. Had Morgan Stanley's duplicity not been rewarded with a settlement agreement that was the product of double mediations, the Moore Group stood ready and was well prepared to represent the interests of class members, having filed a putative class action lawsuit in federal court in Chicago. See ER 949-992.
*24 Nor is there any reason to believe that even absent the Moore Group, other class members, represented by other law firms, would not have exercised their rights and raised their claims. Since the Cremin v. Merrill Lynch gender discrimination lawsuit, there has been no shortage of class lawsuits brought against Wall Street and retail brokerage

firms. African American could have prosecuted their claims to a successful resolution, either by litigation or settlement even without this case and the Jaffe counsel. Latino FAs may have even raised and filed their own lawsuits.
Similarly, the EEOC might have fully investigated and decided to pursue systemic claims against Morgan Stanley had Plaintiffs-Appellees' counsel not requested the right to sue shortly after amending Williams' charge to add representative race discrimination language. Indeed, as Morgan Stanley-Appellee points out, the EEOC had previously brought a groundbreaking class action against Morgan Stanley in the EEOC/Schieffelin v. Morgan Stanley matter. See Exs. 6 and 7 to Morgan Stanley's Motion Requesting Judicial Notice (App. Dkt. 36) There was therefore no need to rush to settlement over Williams' objection and without filing, without discovery, without the EEOC's involvement, and without the input and involvement of Latino class members.
Finally, the impact of this class action settlement made pursuing their race discrimination claims much more difficult for those who objected to the settlement *25 and opted out on principle to pursue their own claims. The inadequacy and terms of the settlement left many class members to fend for themselves and without access to any pattern or practice evidence or evidence developed by class counsel. As Morgan Stanley offers to the Court, fourteen of the opt-out plaintiffs were forced to litigate to the eve of trial after defeating summary judgment. See generally Moore v. Morgan Stanley, Case No. 07-cv-5606 (N.D.Ill.)(Conlon, J.); ER 1153-1178; Exs. 1-5 of Defendant's Request for Judicial Notice (App. Dkt. Nos. 36 and 39). Morgan Stanley was successful in segregating the claims of four other opt-out class member plaintiffs who filed lawsuits alleging they were harmed by the same firm-wide discriminatory practices challenged by this lawsuit. See McDowell v. Morgan Stanley, Case No. 08-cv-2966 (N.D.Ill.); Cyrus v. Morgan Stanley, Case No. 09-cv-2811 (N.D.Oh.); Nyamuswa v. Morgan Stanley, Case No. 2:09-cv-02288 -- JCM-PAL (D.Nev.); Evans v. Morgan Stanley, Case No. 09-cv-03226 (D.Md.).
Appellants respectfully submit that the real danger lies in not requiring meaningful class representative participation in civil rights cases and in authorizing lawyers to control discrimination class actions, particularly pre-filing, rather than clients who are the victims of that discrimination, particularly of race discrimination. Class settlements and the approval process must rely on the structural integrity of the adversarial process and on the role of both putative class *26 counsel and class representatives. Class members will never know what the outcome would have been of fully informed negotiations between informed, engaged and committed class members and Morgan Stanley. See, e.g., In Re GM.[FN12]
FN12. As the district court noted “at this point I'm simply not seeing the structural assurances of fair and adequate representative representation that I think I need to see to certify a settlement class.” The Seventh Circuit explained the importance of adequate class representation during the settlement negotiations process: No one can tell whether a compromise found to be “fair” might not have been “fairer” had the negotiating (attorney) possessed better information or been animated by undivided loyalty to the cause of the class. The court can reject a settlement that is inadequate; it cannot undertake the partisan task of bargaining for better terms. The integrity of the negotiating process is, therefore, important. In re GM, 594 F.2d at 1125 (internal citations omitted).
This was plainly not a case that warranted the extreme of hastily discarding one plaintiff in favor of another to ratify a settlement to which the first objected, as the district court noted that the monetary relief appeared low and the injunctive relief largely the same as what would be implemented in any event as part of the Augst-Johnson gender discrimination lawsuit consent decree. ER 6-8, 347, 351-52
CONCLUSION
As set forth in their opening brief, the record before the district court did not permit class certification or approval of a pre-filing settlement class as a matter of fact or law, and the district court's decisions should be reversed. At the least,

however, this case should be remanded to the district court with instructions to *27 grant Appellants the discovery they sought and to order that the evidentiary hearing contemplated by the district court proceed.
Daisy JAFFE and Margaret Benay Curtis-Bauer, Plaintiffs-Appellees, v. Jonathan GLOVER, Latrissa Gordon, Marilyn White, Peter Meme, Marshell Miller, Jerome Senegal, Hubert Stalling, Lanta Evans, Carlton McDowell, Sarah Nyamuswa, Theron Cyrus, Objectors-Appellants, v. Morgan Stanley & Co., Inc., Defendant-Appellee. 2010 WL 1436243 (C.A.9 ) (Appellate Brief )
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