In Re Regulus Therapeutics Inc. Securities Litigation ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 IN RE REGULUS Case No.: 3:17-cv-182-BTM-RBB THERAPEUTICS INC. Case No.: 3:17-cv-267-BTM-RBB 12 SECURITIES LITIGATION 13 ORDER GRANTING FINAL APPROVAL OF SETTLEMENT 14 . AND ATTORNEYS’ FEES 15 [ECF NOS. 46, 47] 16 17 The Court previously granted a motion for preliminary approval of the parties' 18 Class Action Settlement in this matter on May 27, 2020. (ECF No. 43.) As directed 19 by the Court's preliminary approval order, Plaintiffs filed their unopposed motion 20 for final settlement approval and motion for attorneys’ fees and costs. (ECF Nos. 21 46, 48.) The Court held a hearing on October 21, 2020. (ECF No. 52.) 22 Having considered the motion briefing, the terms of the Settlement 23 Agreement, the lack of any objections, the arguments of counsel, and the other 24 matters on file in this action, the Court GRANTS the motions for final approval and 25 attorneys’ fees and costs. 26 27 28 1 I. BACKGROUND 2 A. Procedural History 3 Plaintiffs filed the putative class action complaint on December 21, 2017 4 against Defendants Regulus Therapeutics Inc., Paul C. Grint, M.D., Joseph P. 5 Hagan, and Michael Huang, M.D., alleging Defendants made false and/or 6 misleading statements about adverse events relating to Regulus’s signature drug 7 RG-101, a hepatitis C treatment, in violation of the Securities Exchange Act of 8 1934 (“Exchange Act”). (ECF No. 1.) RG-101 was intended to cut hepatitis C 9 treatment time in half. Plaintiffs, however, allege that Defendants downplayed or 10 ignored a series of preclinical and nonclinical data and serious adverse events 11 indicating that RG-101 was prone to hepatoxicity (liver toxicity), which leads to 12 jaundice. 13 On February 20, 2017, Plaintiff Ji Lin filed a separate suit asserting the same 14 claims against Defendants. (Case No. 3:17-cv-267, ECF No. 1.) On October 26, 15 2017, the Court consolidated the two cases and appointed Levi & Korsinsky LLP 16 as Lead Counsel and Mark Appel and Michael Spitters as Co-Lead Plaintiffs. (ECF 17 No. 16.) Plaintiffs filed a consolidated complaint on December 12, 2017. (ECF 18 No. 19.) 19 On February 6, 2018, Defendants moved to dismiss the consolidated 20 complaint. (ECF No. 22.) The Court the Court granted Defendants' motion with 21 leave to amend because Plaintiffs failed to allege a specific link between RG-101, 22 liver toxicity, and the serious adverse events involving jaundice. (ECF No. 32.) 23 Without this link, the Court could not determine the preclinical or nonclinical 24 findings contradicted Defendants’ public statements or made them false or 25 misleading. (Id.) 26 On October 1, 2019, Plaintiffs filed an amended consolidated complaint. 27 (ECF No. 33.) Before Defendants could answer or respond to the amended 28 consolidated complaint, the parties reached a settlement. (ECF 38-2.) The Court 1 denied preliminary approval of the settlement because the release terms were 2 unclear and the notice procedures were deficient. (ECF No. 39.) 3 On February 7, 2020, the parties submitted an amended settlement 4 agreement (“Settlement Agreement”). (ECF No. 40.) The amended settlement 5 agreement defined the “Settlement Class” as: 6 all persons and entities that purchased or otherwise acquired shares of the publicly traded common stock of Regulus during the 7 Class Period who allege to have been damaged thereby. Excluded from the Settlement Class are (i) Defendants; (ii) members of the 8 immediate families of Defendants; (iii) any person who is or was an 9 officer or director of Regulus during or after the Class Period; (iv) any entity in which any of the Defendants had or has a controlling interest; 10 and (v) any legal representatives, agents, affiliates, heirs, beneficiaries, successors-in-interest, or assigns of any such excluded 11 party in their capacity as such. Also excluded from the Settlement Class is any Person who validly requests exclusion pursuant to the 12 requirements set forth in the Notice. 13 (ECF No. 40-2 (“Settlement Agreement”), 11:13–25 (¶ 1.34).) The Class Period 14 “means the period between February 17, 2016 and June 11, 2017, inclusive.” (Id. 15 at 5:14–15 (¶ 1.4).) 16 In its Preliminary Approval Order, the Court conditionally certified the 17 Settlement Class and provisionally appointed Levi & Korsinsky LLP as class 18 counsel and plaintiffs Mark Appel and Michael Spitters as class representative. 19 B. Terms of the Settlement Agreement 20 Under the terms of the Settlement Agreement, Defendants will pay $900,000 21 into a gross common settlement fund, without admitting liability. (Id. at 11:11–12 22 (¶ 1.33).) Of the $900,000, the Settlement Class will receive what remains after 23 subtracting the cost of any attorneys’ fees and expenses, notice and administration 24 costs, and Lead Plaintiff's service awards, and applicable taxes (the “Net 25 Settlement Fund”). (Id. at 7:17–20 (¶ 1.18).) 26 The Net Settlement Fund will be distributed among claimants on a pro rata 27 basis based on the Plan of Allocation. (Id. ¶ 1.21.) “The Plan of Allocation 28 generally measures the amount of loss that a Settlement Class member can claim 1 ||for purposes of making pro rata allocations of the Net Settlement Fund to 2 Settlement Class members who submit valid Proof of Claim and Release forms 3 “Authorized Claimants”). (ECF No. 46-5 (“Class Notice”), at 5 (§ 9).) For each 4 ||share of Regulus common stock purchased or otherwise acquired during the Class 5 ||Period, the amount of the claim will be: 6 SOLD 2/17/2016- | 6/28/2016- | 7/28/2016- | 1/30/2017 Sold on or 12 = 15 6/11/2017 16 || (/d. at 6.) 17 1. Attorneys’ Fees and Costs 18 Under the Settlement Agreement, Plaintiffs counsel agreed to seek no more 49 ||than 25 percent of the Settlement Amount, plus no more than $15,000 in litigation 20 ||costs and expenses. (Settlement Agreement, 23:25—24:10 (J 6.1); Class Notice, 21 9 (§ 18).) 22 2. Remainder 23 Any balance remaining in the Settlement Fund six months after the initial 24 || distribution shall be redistributed to Authorized Claimants who have cashed their 25 |\initial distributions, after payment of any unpaid costs or fees incurred in 26 administering the Setthement Fund for such redistribution if Lead Counsel, in 27 \\consultation with the Claims Administrator, determines that additional 28 || redistributions, after deduction of any additional fees and expenses that would be 1 incurred with respect to such redistribution, would be cost-effective. (Settlement 2 Agreement, 22:10–20 (¶ 5.5).) 3 4. Class Member Release 4 In exchange for the settlement awards, class members will release 5 defendant claims arising from the operative complaint. (Id. at 8:24–9:13 (¶ 1.25), 6 19:14–21 (¶ 4.2).) 7 C. Class Notice and Claims Administration 8 Pursuant to the Settlement Agreement, the Court appointed Analytics 9 Consulting LLC to administer the fund and to contact the class members in the 10 manner set forth in the Preliminary Approval Order. (ECF No. 43, 5 (¶ 10).) 11 II. FINAL APPROVAL OF SETTLEMENT 12 A. Legal Standard 13 A court may approve a proposed class action settlement of a class only “after 14 a hearing and on finding that it is fair, reasonable, and adequate,” and that it meets 15 the requirements for class certification. Fed. R. Civ. P. 23(e)(2). In reviewing the 16 proposed settlement, a court need not address whether the settlement is ideal or 17 the best outcome, but only whether the settlement is fair, free of collusion, and 18 consistent with plaintiff's fiduciary obligations to the class. See Hanlon v. Chrysler 19 Corp., 150 F.3d 1011, 1027 (9th Cir. 1998). The Hanlon court identified the 20 following factors relevant to assessing a settlement proposal: (1) the strength of 21 the plaintiff's case; (2) the risk, expense, complexity, and likely duration of further 22 litigation; (3) the risk of maintaining class action status throughout the trial; (4) the 23 amount offered in settlement; (5) the extent of discovery completed and the stage 24 of the proceeding; (6) the experience and views of counsel; (7) the presence of a 25 government participant; and (8) the reaction of class members to the proposed 26 settlement. Id. at 1026 (citation omitted); see also Churchill Vill., L.L.C. v. Gen. 27 Elec., 361 F.3d 566, 575 (9th Cir. 2004). 28 1 Settlements that occur before formal class certification also “require a higher 2 standard of fairness.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 3 2000). In reviewing such settlements, in addition to considering the above factors, 4 a court also must ensure that “the settlement is not the product of collusion among 5 the negotiating parties.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 6 946-47 (9th Cir. 2011). 7 B. Analysis 8 1. The Settlement Class Meets the Prerequisites for Certification 9 The Court concluded that these requirements were satisfied when it granted 10 preliminary approval of the class action settlement. (See ECF No. 43.) The Court 11 is not aware of any new facts which would alter that conclusion. However, the 12 Court reviews the Rule 23 requirements again briefly, as follows. 13 Although the precise number of Settlement Class Members is unknown, 14 there were approximately 5.15 million shares damaged by the alleged fraud, 15 making it so numerous that joinder of all members is impracticable. Rule 23(a)(1) 16 is therefore satisfied. 17 Rule 23(a)(2) commonality requires “questions of fact or law common to the 18 class,” though all questions of fact and law need not be in common. Hanlon, 150 19 F.3d at 1026. The focus of this action is common to all class members, namely 20 whether Defendants misrepresented material facts or omitted material facts 21 concerning Regulus in violation of the law and whether these alleged actions 22 artificially inflated Regulus’s stock price. Rule 23(a)(2) is therefore satisfied. 23 Rule 23(a)(3) requires that the plaintiff show that “the claims or defenses of 24 the representative parties are typical of the claims or defenses of the class.” Lead 25 Plaintiff’s claims are typical of those of the class, as they advance the same claims, 26 share identical legal theories, and allegedly experienced the same losses from 27 Regulus's alleged misrepresentations. Rule 23(a)(3) is therefore satisfied. 28 With respect to Rule 23(a)(4), the Court finds the representative parties and 1 class counsel have fairly and adequately represented the interests of the Class. 2 No conflicts of interest appear as between Lead Plaintiff and the members of the 3 Settlement Class. Class Counsel have demonstrated that they are skilled in this 4 area of the law and therefore adequate to represent the Settlement Class as well. 5 Rule 23(a)(4) is therefore satisfied. 6 The Settlement Class further satisfies Rule 23(b)(3) in that common issues 7 predominate and “a class action is superior to other available methods for fairly 8 and efficiently adjudicating” the claims here. 9 With respect to Rule 23(b)(3), the “predominance inquiry tests whether 10 proposed classes are sufficiently cohesive to warrant adjudication by 11 representation.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997). The 12 common questions in this case which would be subject to common proof include 13 whether Defendants misrepresented material facts or omitted material facts for 14 concerning Regulus in violation of the law, whether Defendants had a duty to 15 disclose alleged material omissions or acted with scienter, and whether the market 16 price of Regulus's common stock during the class period was artificially inflated 17 due to the alleged material omissions and/or misrepresentations. These questions 18 predominate. Moreover, given this commonality, and the number of potential class 19 members, the Court concludes that a class action is a superior mechanism for 20 adjudicating the claims at issue. 21 Accordingly, the Court concludes that the requirements of Rule 23 are met 22 and that certification of the class for settlement purposes is appropriate. Plaintiff 23 Michael Spitters is hereby appointed as class representative and Levi & Korsinsky 24 LLP is appointed class counsel. 25 2. The Settlement is Fundamentally Fair, Adequate, and Reasonable 26 A. Adequacy of Notice 27 “Adequate notice is critical to court approval of a class settlement under Rule 28 23(e). Hanlon, 150 F.3d at 1025. For the Court to approve a settlement, “[t]he 1 class must be notified of a proposed settlement in a manner that does not 2 systematically leave any group without notice.” Officers for Justice v. Civil Serv. 3 Comm'n of City & County of San Francisco, 688 F.2d 615, 624 (9th Cir. 1982) 4 (citation omitted). 5 The Court previously approved the parties' proposed notice procedures. 6 (ECF No. 43.) In the motion for final approval, Plaintiffs state that they followed 7 this approved notice plan. (ECF No. 46-1, 19:14–21.) The Claims Administrator 8 disseminated approximately 15,703 Notice Packets to potential Class members 9 and nominees. (ECF 46-4, ¶ 9.) In addition, the Claims Administrator published 10 the Summary Notice in Investor’s Business Daily, a national business newswire on 11 June 15, 2020, and maintained a website to field Regulus shareholder questions. 12 (Id. ¶¶ 10–11.) To-date, one class member requested exclusion and none have 13 objected to the Settlement. (Id. ¶¶ 13–14.) The notice informed the class 14 members of all key aspects of the Settlement, hearings, and the process for 15 objections. (See Class Notice.) 16 In light of these actions and the Court's prior order granting preliminary 17 approval, the Court finds that the parties have provided sufficient notice to the class 18 members. 19 B. Rule 23(e)/Hanlon Factors 20 Turning to the Rule 23(e) factors, the Court first considers whether “the class 21 representatives and class counsel have adequately represented the class” and 22 whether “the proposal was negotiated at arm's length.” Fed. R. Civ. P. 23(e)(2)(A)– 23 (B). These considerations overlap with certain Hanlon factors, such as the non- 24 collusive nature of negotiations, the extent of discovery completed, and the stage 25 of proceedings. See Hanlon, 150 F.3d at 1026. 26 As discussed above when certifying the class, the Court finds that both Lead 27 Plaintiff and Class Counsel have adequately represented the class. In its 28 Preliminary Approval Order, the Court found no evidence of a conflict between 1 class representatives or counsel and the rest of the class. (ECF No. 43 3–4 (¶ 5).) 2 No contrary evidence has emerged. Similarly, the Court finds that counsel has 3 vigorously prosecuted this action through its pre-filing investigation, expert 4 damages analysis, dispositive motion practice, and settlement negotiations. (ECF 5 No. 46-1, 7:12–8:15.) Counsel possessed sufficient information to make an 6 informed decision about the settlement, and its preliminary approval motion 7 included information regarding settlement outcomes of similar cases, further 8 indicating that counsel had adequate information from which to negotiate the 9 settlement. See Fed. R. Civ. P. 23 advisory committee’s note to 2018 amendment. 10 The Settlement was also the product of arm's length negotiations through 11 back-and-forth communications and bargaining of terms. (ECF No. 46-1, 8:18–26; 12 ECF 43, at 4 (¶ 6).). There is no evidence that the parties colluded here. Counsel's 13 fee request is proportionate to the settlement fund, and no funds revert to 14 Defendants. (See generally Settlement Agreement.) Further, the Court finds that 15 the requested fees are in fact reasonable, and will be discussed in greater detail 16 below. This factor weighs in favor of approval. 17 i. Strength of Plaintiffs' Case and Risk of Continuing Litigation 18 In assessing “the costs, risks, and delay of trial and appeal,” Fed R. Civ. P. 19 23(e)(2)(C)(i), courts in the Ninth Circuit evaluate “the strength of the plaintiffs' 20 case; the risk, expense, complexity, and likely duration of further litigation; [and] 21 the risk of maintaining class action status throughout the trial.” Hanlon, 150 F.3d 22 at 1026. The inherent risk of further litigation in this matter is known to all involved 23 with the case. Proceeding with this case presents very real risks regarding 24 additional pleading challenges, class certification, summary judgment, Daubert 25 and in limine motions, proving the necessary falsity, scienter, reliance and 26 damages if the case proceeded to trial, and a possible unfavorable decision on the 27 merits. See Fernandez v. Victoria Secret Stores, LLC, No. CV 06-04149 MMM 28 (SHx), 2008 WL 8150856, at *6 (C.D. Cal. July 21, 2008) (“Because both parties 1 face extended, expensive future litigation, and because both faced the very real 2 possibility that they would not prevail, this factor supports approval of the 3 settlement.”). While Plaintiff believes in the merits of his case, Defendants have 4 strong defenses to falsity, scienter, reliance and damages determinations, and 5 there is no guarantee that Plaintiff will prevail. The Court finds these risks weigh 6 in favor of settlement. 7 ii. Effectiveness of Distribution Method, Terms of Attorney's Fees, and 8 Supplemental Agreements 9 “Approval of a plan of allocation of settlement proceeds in a class action 10 under FRCP 23 is governed by the same standards of review applicable to 11 approval of settlement as a whole: the plan must be fair, reasonable and 12 adequate.” In re Oracle Sec. Litig., No. C-90-0931-VRW, 1994 WL 502054, at *1- 13 2 (N.D. Cal. June 16, 1994) (citing Class Pls. v. City of Seattle, 955 F.2d 1268, 14 1284-85 (9th Cir. 1992)). See also In re Heritage Bond Litig., No. 02-ML-1475 DT, 15 2005 WL 1594403 at 11 (C.D. Cal. 2005). The allocation formula used in a plan 16 of allocation “need only have a reasonable, rational basis, particularly if 17 recommended by experienced and competent counsel.” Maley v. Del Global Tech. 18 Corp., 186 F. Supp. 2d 358, 367 (S.D.N.Y. 2002) (citation omitted). A plan which 19 “fairly treats class members by awarding a pro rata share to every Authorized 20 Claimant, [even as it] sensibly makes interclass distinctions based upon, inter alia, 21 the relative strengths and weaknesses of class members' individual claims and the 22 timing of purchases of the securities at issue” should be approved as fair and 23 reasonable. In re MicroStrategy, Inc., Sec, Litig., 148 F. Supp. 2d 654, 669 (E.D. 24 Va. 2001) (citation omitted). 25 Here, as discussed, the Plan of Allocation treats all class members with 26 similar losses, based on the date of the purchase and sale, in the same way by 27 awarding pro rata shares. This factor weighs in favor of approval. 28 iii. Equitable Treatment of Class Members 1 Rule 23 also requires consideration of whether “the proposal treats class 2 members equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(C)(i). 3 Consistent with this instruction, the Court considers whether the proposal 4 “improperly grant[s] preferential treatment to class representatives or segments of 5 the class.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 6 2007) (citation omitted). Under the Settlement Agreement, class members who 7 have submitted timely claims will receive payments on a pro rata basis based on 8 the number of Regulus common stock shares purchased or otherwise acquired 9 during the Class Period. (Class Notice, at 5–6 (§ 9); Settlement Agreement, 6–8 10 (¶¶ 11–17.) 11 The Court finds that the allocation plan is equitable. Moreover, the service 12 award Lead Plaintiff seeks is reasonable and does not constitute inequitable 13 treatment of class members. See Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 14 958–59 (9th Cir. 2009). This factor weighs in favor of approval. 15 iv. Settlement Amount 16 “The relief that the settlement is expected to provide to class members is a 17 central concern,” though it is not enumerated among the factors of Rule 23(e). See 18 Fed. R. Civ. P. 23 advisory committee’s note to 2018 amendment. Thus, the Court 19 considers “the amount offered in the settlement.” Hanlon, 150 F.3d at 1026. 20 Crucial to the determination of adequacy is the ratio of “plaintiffs' expected 21 recovery balanced against the value of the settlement offer.” In re Tableware, 484 22 F. Supp. 2d at 1080. However, “[i]t is well-settled law that a cash settlement 23 amounting to only a fraction of the potential recovery does not per se render the 24 settlement inadequate or unfair.” Officers for Justice, 688 F.2d at 628. 25 Here, the $900,000 fund represents a respectable recovery for the class. 26 Experts have calculated that the maximum potential damages in this action at 27 $45,150,000. (ECF No. 46-1, 14:17–20.) The gross settlement amount thus 28 represents a recovery of 1.99% of total estimated damages. (Id., 14:20–25.) Other 1 courts have found similar recoveries to be fair and reasonable. (ECF 38-3, 2–3 (¶ 2 5); see Hicks v. Morgan Stanley & Co., No. 01-10071, 2005 WL 2757792, at *7 3 (S.D.N.Y. Oct. 24, 2005) (approving settlement representing 3.8% of plaintiffs’ 4 estimated damages); In re Prudential Sec., Inc. L.P. Litig., 1995 WL 798907 5 (S.D.N.Y. Nov. 20, 1995) (approving settlement of between 1.6% and 5% of 6 claimed damages). The Court has already dismissed the complaint and the 7 amended complaint may fare no better. Something is clearly better than nothing. 8 Accordingly, the settlement amount also weighs in favor of approval. 9 v. Counsel's Experience 10 The Court also considers “the experience and views of counsel.” Hanlon, 11 150 F. 3d at 1026. Levi & Korsinsky LLP has extensive experience representing 12 plaintiffs in securities and financial class action lawsuits. (ECF No. 46-2, 4 (¶ 5); 13 see generally ECF No. 46-3. (firm resume).) That such experienced counsel 14 advocate in favor of the settlement weighs in favor of approval. 15 vi. Objections 16 “[T]he absence of a large number of objections to a proposed class action 17 settlement raises a strong presumption that the terms of a proposed class 18 settlement action are favorable to the class members.” Omnivision, 559 F. Supp. 19 2d at 1043 (citation omitted). Here, Class Counsel and the Court received no 20 objections. (ECF No. 46-4, ¶ 13.) 21 Many potential class members are sophisticated institutional investors; the 22 lack of objections from such institutions indicates that the settlement is fair and 23 reasonable. See In re Citigroup Inc. Sec. Litig., 965 F. Supp. 2d 369, 382 (S.D.N.Y. 24 2013); In re Linerboard Antitrust Litig., 321 F. Supp. 2d 619, 629 (E.D. Pa. 2004). 25 Likewise, there was only one request for exclusion. (Id. ¶ 14.). The positive 26 response from the class confirms that the settlement is fair and reasonable. 27 Balancing the relevant factors, the Court finds the settlement fair and 28 reasonable under Rule 23(e) and Hanlon. 1 vii. Other Findings 2 Notice to Government Agencies: The parties provided the required notice 3 to federal and state attorneys general under the Class Action Fairness Act, 28 4 U.S.C. § 1715(b). (ECF No. 53, 1:8–13 (¶ 2).) Notice occurred more than 90 days 5 before the date of this order, as required by 28 U.S.C. § 1715(d). 6 viii. Certification Is Granted and the Settlement Is Approved 7 For the foregoing reasons, and after considering the record as a whole, the 8 Court finds that notice of the proposed settlement was adequate, the settlement 9 was not the result of collusion, and the settlement is fair, adequate, and 10 reasonable. Lead Plaintiff's Motion for Final Approval of the Settlement is 11 GRANTED. 12 III. MOTION FOR ATTORNEYS' FEES, COSTS, AND CLASS 13 REPRESENTATIVE AWARDS 14 “While attorneys' fees and costs may be awarded in a certified class action 15 where so authorized by law or the parties' agreement, Fed. R. Civ. P. 23(h), courts 16 have an independent obligation to ensure that the award, like the settlement itself, 17 is reasonable, even if the parties have already agreed to an amount.” In re 18 Bluetooth, 654 F.3d at 941. “Where a settlement produces a common fund for the 19 benefit of the entire class,” as here, “courts have discretion to employ either the 20 lodestar method or the percentage-of-recovery method” to determine the 21 reasonableness of attorneys' fees. Id. at 942. 22 Under the percentage-of-recovery method, the attorneys are awarded fees 23 in the amount of a percentage of the common fund recovered for the class. Id. 24 Courts applying this method “typically calculate 25% of the fund as the benchmark 25 for a reasonable fee award, providing adequate explanation in the record of any 26 special circumstances justifying a departure.” Id (internal quotation marks 27 omitted). However, “[t]he benchmark percentage should be adjusted, or replaced 28 1 by a lodestar calculation, when special circumstances indicate that the percentage 2 recovery would be either too small or too large in light of the hours devoted to the 3 case or other relevant factors.” Six (6) Mexican Workers v. Arizona Citrus 4 Growers, 904 F.3d 1301, 1311 (9th Cir. 2011). Relevant factors to a determination 5 of the percentage ultimately awarded include “(1) the results achieved; (2) the risk 6 of litigation; (3) the skill required and quality of work; (4) the contingent nature of 7 the fee and the financial burden carried by the plaintiffs; and (5) awards made in 8 similar cases.” Tarlecki v. bebe Stores, Inc., No. C 05-1777 MHP, 2009 WL 9 3720872, at *4 (N.D. Cal. Nov. 3, 2009). 10 Under the lodestar method, attorneys' fees are “calculated by multiplying the 11 number of hours the prevailing party reasonably expended on the litigation (as 12 supported by adequate documentation) by a reasonable hourly rate for the region 13 and for the experience of the lawyer.” In re Bluetooth, 654 F.3d at 941. This 14 amount may be increased or decreased by a multiplier that reflects factors such 15 as “the quality of representation, the benefit obtained for the class, the complexity 16 and novelty of the issues presented, and the risk of nonpayment.” Id. at 942. 17 In common fund cases, a lodestar calculation may provide a cross-check on 18 the reasonableness of a percentage award. Vizcaino v. Microsoft Corp., 290 F.3d 19 1043, 1050 (9th Cir. 2002). Where the attorneys' investment in the case “is 20 minimal, as in the case of an early settlement, the lodestar calculation may 21 convince a court that a lower percentage is reasonable.” Id. “Similarly, the lodestar 22 calculation can be helpful in suggesting a higher percentage when litigation has 23 been protracted.” Id. Thus, even when the primary basis of the fee award is the 24 percentage method, “the lodestar may provide a useful perspective on the 25 reasonableness of a given percentage award.” Id. “The lodestar cross-check 26 calculation need entail neither mathematical precision nor bean counting . . . 27 [courts] may rely on summaries submitted by the attorneys and need not review 28 actual billing records.” Covillo v. Specialtys Cafe, No. C-11-00594-DMR, 2014 WL 1 954516, at *6 (N.D. Cal. Mar. 6, 2014)(internal quotation marks and citation 2 omitted). 3 An attorney is also entitled to “recover as part of the award of attorney's fees 4 those out-of-pocket expenses that would normally be charged to a fee paying 5 client.” Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (internal quotation 6 marks and citation omitted). 7 2. Discussion 8 Plaintiffs seek an award of attorneys' fees totaling $225,000, which 9 represents 25% of the $900,000 gross Settlement Fund, as well as litigation 10 expenses and costs in the amount of $10,993.45. (ECF No. 47-1.) 11 Addressing expenses first, the Court does not hesitate to approve an award 12 in the requested amount of $10,993.45. Class Counsel have submitted an 13 itemized list of expenses by category of expense incurred through October 21, 14 2020, totaling $12,993.45, excluding Settlement Administration fees. (See ECF 15 No. 46-2, 5:1–13 (¶ 15). At the fairness hearing, Plaintiff’s counsel agreed to 16 exclude $2,000 in anticipated travel and lodging expenses, because the hearing 17 was held telephonically, resulting in $10,993.45 of total expenses. The Court has 18 reviewed the list and finds the expenses to be reasonable. 19 The Court likewise is satisfied that the request for attorneys' fees is 20 reasonable. Using the percentage-of-recovery method, the Court starts at the 25% 21 benchmark. See In re Bluetooth, 654 F.3d at 942. Plaintiffs requests 25%, given 22 the results achieved, the risks of the litigation, the efficiency of Class Counsel's 23 work, and the contingent nature of the fee. (ECF No. 47-1. 3:17–11:20.) Courts 24 have awarded comparable percentages in similar cases. Destefano v. Zynga, Inc., 25 No. 12-cv-04007-JSC, 2016 WL 537946, at *23 (N.D. Cal. Feb. 11, 2016) (25%); 26 Omnivision, 559 F. Supp. 2d at 1049 (28%). 27 Through August 2020, Levi & Korsinsky expended 374.70 hours litigating 28 this action. (ECF No. 46-2, 3:13–4:7 (¶¶ 9–10).). A lodestar cross-check confirms 1 the reasonableness of the requested fees, which amounts to a 0.94 multiplier of 2 the lodestar in the amount of $238,300.50. Id. Courts have found that “[m]ultipliers 3 of 1 to 4 are commonly found to be appropriate in common fund cases.” Aboudi 4 v. T-Mobile USA, Inc., No. 12-CV-2169-BTM, 2015 WL 4923602, at *7 (S.D. Cal. 5 Aug. 18, 2015); see also Petersen v. CJ Am., Inc., No. 14-CV-2570-DMS, 2016 6 WL 5719823, at *1 (S.D. Cal. Sept. 30, 2016) (awarding 1.12 multiplier and 7 recognizing that “the majority of fee awards in the district courts in the Ninth Circuit 8 are 1.5 to 3 times higher than lodestar”). Thus, a multiplier less than 1.0 is below 9 the range typically awarded by courts and is presumptively reasonable. 10 Lead Plaintiff's motion for attorneys' fees and expenses is GRANTED. Lead 11 Counsel is awarded $10,993.45 in expenses and $225,000.00 in attorneys' fees. 12 B. Incentive Award 13 Lead Plaintiff Michael Spitters requests $2,000 reimbursement of costs and 14 expenses incurred litigating this action. (ECF No. 46-8; ECF No. 47-1, 13:4–26.) 15 The Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(4), limits 16 a class representative's recovery to an amount “equal, on a per share basis, to the 17 portion of the final judgment or settlement awarded to all other members of the 18 class,” but also provides that “[n]othing in this paragraph shall be construed to limit 19 the award of reasonable costs and expenses (including lost wages) directly relating 20 to the representation of the class to any representative party serving on behalf of 21 a class.” Incentive awards “are discretionary . . . and are intended to compensate 22 class representatives for work done on behalf of the class, to make up for financial 23 or reputational risk undertaken in bringing the action, and, sometimes, to recognize 24 their willingness to act as a private attorney general.” Rodriguez, 563 F.3d at 958– 25 59 (internal citation omitted). 26 “Incentive awards typically range from $2,000 to $10,000.” Bellinghausen v. 27 Tractor Supply Co., 306 F.R.D. 245, 267 (N.D. Cal. 2015). Service awards as high 28 as $5,000 are presumptively reasonable in this judicial district. See, e.g., Lloyd v. 1 Navy Fed. Credit Union, No. 17-cv-1280-BAS-RBB, 2019 WL 2269958, at *15 2 (S.D. Cal. May 28, 2019). Lead Plaintiff expended approximately 15 hours 3 supervising and participating in the litigation and his requested award is directly 4 tied to his normal hourly rate. (ECF No. 46-8, 2:9–15.) Given the amount of time 5 and assistance Lead Plaintiff put into the case and the success of the recovery, an 6 incentive award in the amount of $2,000 is proportional to the class members' 7 recoveries. See Hayes v. MagnaChip Semiconductor Corp., No.14-cv-01160-JST, 8 2016 WL 6902856 at *10 (N.D. Cal. Nov. 21, 2016) (noting that $5,000 incentive 9 awards are presumptively reasonable in the 9th Circuit); In re Am. Apparel S'holder 10 Litig., No. CV 10-06352 MMM, 2014 WL 10212865, at *34 (C.D. Cal. July 28, 2014) 11 (awarding an incentive award of $6,600 in a securities class action). 12 The Court concludes that the requested $2,000.00 incentive award is 13 appropriate in this case. 14 IV. CONCLUSION 15 Based upon the foregoing, the motion for final approval of class settlement 16 is GRANTED. The motion for attorneys' fees, costs, and service awards is 17 GRANTED as follows: Class Counsel is awarded $225,000.00 in attorneys' fees 18 and $10,993.45 in litigation costs. Lead Plaintiff Michael Spitters is granted an 19 enhancement award of $2,000.00. 20 Without affecting the finality of this order in any way, the Court retains 21 jurisdiction of all matters relating to the interpretation, administration, 22 implementation, effectuation and enforcement of this order and the Settlement. 23 // 24 // 25 // 26 // 27 // 28 // 1 The parties shall file a post-distribution accounting no later than April 19, 2 ||2021. The Court SETS a compliance hearing on April 26, 2021 on the Court's 3 p.m. calendar. The parties shall submit a proposed judgment to the Court by 4 ||November 13, 2020. 5 ITIS SO ORDERED. 6 7 ||Dated: October 29, 2020 3 fs Fil Ligede 9 Hono ble Barry Ted Moskgwitz United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18