Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_02-cv-01227/USCOURTS-cand-5_02-cv-01227-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Federal Question: Other Civil Rights

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[PROPOSED] ORDER APPROVING LONG-FORM PLAN OF ALLOCATION AND DIRECTING DISTRIBUTION 

OF THE LONG-FORM FUND FROM THE NET SETTLEMENT FUND 1 

Case No. CV-02-01227-JF (PVT) 

 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

In re PayPal Litigation Case No. CV-02-01227-JF (PVT) 

[PROPOSED] 

ORDER APPROVING PROPOSED LONGFORM PLAN OF ALLOCATION AND 

DIRECTING DISTRIBUTION OF THE 

LONG-FORM FUND FROM THE NET 

SETTLEMENT FUND 

 On February 21, 2006, the District Court (Hon. Jeremy Fogel), issued an Order directing the 

parties to send the Long Form Notice to all Long Form claimants by electronic mail no later than 

February 28, 2006 and setting a hearing on March 24, 2006 at 9 a.m., to consider any comments 

from Long Form claimants received on or before March 17, 2006. The record shows that the Long 

Form Notice was send in substantially the same form and method approved and ordered by the 

Court. On or before March 17, 2006, the Court received four (4) comments from Long Form 

claimants (Schubert, Schecter, Wolf and Gallegos). 

Class Counsel had submitted a proposed Long-Form Plan of Allocation for allocating the 

Long-Form Fund created by the class action Settlement for distribution to Long-Form Claimants for 

the District Court’s review and approval. Supporting documents submitted by Class Counsel 

included the Settlement Agreement; Plan of Allocation for Net Settlement Fund; Order Approving 

**E-filed 4/27/06**

Case 5:02-cv-01227-JF Document 362 Filed 04/27/06 Page 1 of 4
[PROPOSED] ORDER APPROVING LONG-FORM PLAN OF ALLOCATION AND DIRECTING DISTRIBUTION 

OF THE LONG-FORM FUND FROM THE NET SETTLEMENT FUND 2 

Case No. CV-02-01227-JF (PVT) 

 

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Distribution of the Statutory Damage Fund and the Short-Form Fund from the Settlement Fund; 

Long-Form Claim Form; Initial Class Notice; Order Conditionally Approving Class Action 

Settlement; Notice to PayPal Class Action Long-Form Claimants of the Proposed Plan of Allocation 

of the Long-Form Settlement Fund; transcript of the September 24, 2004 hearing on final approval 

of the settlement, and Special Master’s Order Recommending Proposed Long-Form Plan Of 

Allocation. On March 22, 2006 Class Counsel also submitted their Memorandum In Support Of 

Long Form Plan Of Allocation And In Response To Objections To The Plan Of Allocation, which 

responded specifically to the Schubert and Schecter objections. The Court has received, reviewed 

and considered all of the documents and supporting materials provided to it by Class Counsel. 

On March 24, 2006, the District Court conducted a hearing on the matter. Class Counsel 

A. J. De Bartolomeo of Girard Gibbs & De Bartolomeo LLP and Robert Finkel of Wolf Popper LLP 

appeared by telephone, as did defense counsel Molly Lane of Morgan Lewis also appeared by 

telephone. None of the objectors appeared by telephone or in person. At the March 24, 2006 

hearing, it was discovered that the Court had received two objections (Wolf and Gallegos) that had 

not been served on Class Counsel or defense counsel. The Court continued the hearing until March 

31, 2006 to permit the parties an opportunity to respond to the Wolf and Gallegos objections, and to 

allow the Court an opportunity to review the arguments in response to the Wolf and Gallegos 

objections. 

On March 29, 2006, Class Counsel filed and served Plaintiffs’ Amended Memorandum In 

Further Support Of Long Form Plan Of Allocation And In Response To Objections To The Plan Of 

Allocation. The March 29, 2006 memorandum supersedes Plaintiffs’ March 22, 2006 memorandum, 

and responded to the four objections filed by Schubert, Schecter, Wolf, and Gallegos. The Court 

also received a response from Schubert to Plaintiffs’ March 22, 2006 Memorandum In Support Of 

The Long Form Plan Of Allocation. 

On March 31, 2006, the District Court reconvened the hearing on the proposed Long Form 

Plan of Allocation. As with the March 24, 2006 hearing, Class Counsel and defense counsel 

appeared by telephone. None of the objectors appeared. At the March 31, 2006 hearing, Class 

Case 5:02-cv-01227-JF Document 362 Filed 04/27/06 Page 2 of 4
[PROPOSED] ORDER APPROVING LONG-FORM PLAN OF ALLOCATION AND DIRECTING DISTRIBUTION 

OF THE LONG-FORM FUND FROM THE NET SETTLEMENT FUND 3 

Case No. CV-02-01227-JF (PVT) 

 

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Counsel advised the Court that they had spoken with Schubert and were undertaking with PayPal a 

review of the facts underlying Schubert’s claim. 

 After considering the proposed Long-Form Plan of Allocation, the arguments raised in the 

four objections to the proposed Long Form Plan of Allocation, Class Counsel’s written memoranda 

and submissions in support of the proposed Long Form Plan of Allocation, and oral presentations at 

the hearing, the District Court makes the following findings. 

1. The objections submitted by Schubert, Schecter, Wolf, and Gallegos are overruled. 

2. In accordance with the terms of the Settlement Agreement and Plan of Allocation for 

Net Settlement Fund, the proposed Long-Form Plan of Allocation considers the amount of damages 

claimed by each claimant, the nature of the injury complained of, the quality of proof submitted in 

support of the claim, the recoverable damages, the relative probability of success on the merits, and 

any other factors considered relevant to the claims administration process by the independent Claims 

Administrator and/or Class Counsel. 

3. The proposed Long-Form Plan of Allocation includes appropriate measures to guard 

against fraudulent claims or claims submitted by Class Members who may have misused the PayPal 

system. These safeguards were designed after consultation with PayPal representatives familiar with 

PayPal’s policies, procedures, and systems. 

4. PayPal has no objection to the proposed Long-Form Plan of Allocation. 

5. The Long-Form Plan of Allocation appears to be fair, reasonable, and adequate as 

required by applicable authority. See Class Plaintiffs v. Seattle, 955 F.2d 1268, 1284-1285 (9th Cir. 

1992). 

6. The proposed Notice to PayPal Class Action Long-Form Claimants of the Proposed 

Plan of Allocation of the Long-Form Settlement Fund, and the method of dissemination of that 

Notice by email to long-form claimants, is the best notice practicable under the circumstances and 

complies with due process. 

7. The District Court finds that the proposed Long-Form Plan of Allocation should be 

approved as it is found to be fair, reasonable and adequate. 

Case 5:02-cv-01227-JF Document 362 Filed 04/27/06 Page 3 of 4
[PROPOSED] ORDER APPROVING LONG-FORM PLAN OF ALLOCATION AND DIRECTING DISTRIBUTION 

OF THE LONG-FORM FUND FROM THE NET SETTLEMENT FUND 4 

Case No. CV-02-01227-JF (PVT) 

 

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8. The $2,300,000 Long-Form Fund, as defined in the Settlement Agreement, shall be 

distributed to the Class members who submitted valid claim forms and in accordance with the 

approved Long Form Plan Of Allocation. 

9. The Claims Administrator, the parties, counsel herein in any capacity in which they 

may act hereunder, and any employees or agents of such Settlement Agent, the parties, or counsel 

(including without limitation such persons’ employees who may furnish services in connection with 

the Settlement) shall not be liable for anything done or omitted to be done in connection with the 

Settlement and administration thereof except for their own willful misconduct. 

10. That after the Claims Administrator has made reasonable and diligent efforts to 

distribute the Long-Form Fund of the Net Settlement Fund to those Class members identified in the 

Long Form plan of allocation, any balance remaining in the Net Settlement Fund from the LongForm Fund one (1) year after the initial distribution shall be contributed to non-sectarian, not-forprofit 501(c)(3) organization(s) designated by and not affiliated with Co-Lead Counsel. 

11. This Court retains continuing jurisdiction over any further application or matter 

which may arise in connection with this action, including the resolution of Schubert’s claim. 

IT IS SO ORDERED.

DATED: THE HONORABLE JEREMY FOGEL UNITED STATES DISTRICT JUDGE 

4/27/06

Case 5:02-cv-01227-JF Document 362 Filed 04/27/06 Page 4 of 4