1 douglas caiafa, esq. (sbn 107747) douglas caiafa, a ......1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16...

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NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS

Douglas Caiafa, Esq. (SBN 107747) DOUGLAS CAIAFA, A Professional Law Corporation 11845 West Olympic Boulevard, Suite 1245 Los Angeles, California 90064 (310) 444-5240 - phone; (310) 312-8260 - fax Email: [email protected] Christopher J. Morosoff, Esq. (SBN 200465) LAW OFFICE OF CHRISTOPHER J. MOROSOFF 77-760 Country Club Drive, Suite G Palm Desert, California 92211 (760) 469-5986 - phone; (760) 345-1581 - fax Email: [email protected] Attorneys for Plaintiff STEVEN RUSSELL, et al.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

EASTERN DIVISION

STEVEN RUSSELL, et al.

Plaintiff,

vs. KOHL'S DEPARTMENT STORES, INC., et al.,

Defendants.

Case No. 5:15-cv-01143-RSK-SP CLASS ACTION PLAINTIFFS’ NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND UNOPPOSED MOTION FOR CERTIFICATION OF SETTLEMENT CLASS Courtroom: 850 Date: April 11, 2016 Time: 9:00 a.m. Judge: Hon. R. Gary Klausner

Case 5:15-cv-01143-RGK-SP Document 63 Filed 03/14/16 of 2 Page ID #:735

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NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE THAT on April 11, 2016, at 9:00 a.m., or as soon

thereafter as the matter may be heard, in Courtroom 850 of the United States District

Court for the Central District of California, located at 255 E. Temple Street, Los

Angeles, CA 90012, Plaintiffs Steven Russell and Donna Caffey (collectively

“Plaintiffs”) will, and hereby do, respectfully move this Honorable Court for an

order: (1) granting preliminary approval of the settlement agreement Plaintiffs have

executed with Defendant Kohl’s Department Stores, Inc. (“Kohl’s”) for $6,150,000

(cash and gift cards) pursuant to Fed. R. Civ. Proc. 23(e); and, (2) certifying a class

for settlement purposes pursuant to Fed. R. Civ. Proc. 23(b)(3).

This Motion is unopposed by Defendant and is based upon this Notice of

Motion; Plaintiff’s Memorandum of Points and Authorities In Support of Plaintiffs’

Motion for Preliminary Approval of Class Action Settlement and Certification of

Settlement Class; the Declaration of Plaintiff Steven Russell in support thereof; the

Declaration of Christopher J. Morosoff in support thereof; the Declaration of Douglas

Caiafa in support thereof; the Declaration of Carla Peak in support thereof; all filed

and served concurrently herewith; as well as the pleadings and papers on file in this

action, argument of counsel, any other material which may be submitted to the Court,

and any other evidence or argument the Court may consider.

Dated: March 14, 2016 Respectfully submitted,

LAW OFFICE OF CHRISTOPHER J. MOROSOFF

By: /s/ Christopher J. Morosoff Christopher J. Morosoff Attorneys for Plaintiffs STEVEN RUSSELL and DONNA CAFFEY

Case 5:15-cv-01143-RGK-SP Document 63 Filed 03/14/16 of 2 Page ID #:736

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MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS




EASTERN DIVISION


Plaintiff,


Defendants.

Case No. 5:15-cv-01143-RSK-SP CLASS ACTION MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND UNOPPOSED MOTION FOR CERTIFICATION OF SETTLEMENT CLASS Courtroom: 850 Date: April 11, 2016 Time: 9:00 a.m. Judge: Hon. R. Gary Klausner

Case 5:15-cv-01143-RGK-SP Document 63-1 Filed 03/14/16 Page 1 of 25 Page ID #:737

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i MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND

CERTIFICATION OF SETTLEMENT CLASS

TABLE OF CONTENTS

Page

I. INTRODUCTION .......................................................................................... 1

II. FACTUAL AND PROCEDURAL BACKGROUND ................................... 2

A. The Hinojos Action ........................................................................................ 2

B. The Chowning Action ..................................................................................... 2

C. The Instant Russell Action .............................................................................. 3

III. THE SETTLEMENT ...................................................................................... 4

A. Settlement Negotiations .................................................................................. 4

B. Terms of the Settlement .................................................................................. 5

1. Monetary Relief.................................................................................... 5

2. Injunctive Relief ................................................................................... 6

3. The Release .......................................................................................... 7

4. Notice and Claims Administration ....................................................... 7

IV. THE SETTLEMENT CLASS SHOULD BE CERTIFIED ........................... 8

V. THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED ........ 12

A. The Settlement is the Product of Informed, Arms-Length Negotiations ....... 13

B. The Amount Offered in Settlement is Fair and Reasonable........................... 14

C. The Settlement Does Not Improperly Grant Preferential

Treatment to the Class Representatives .......................................................... 16

D. The Proposed Settlement Has No Obvious Deficiencies ............................... 17

VI. THE PROPOSED NOTICE SHOULD BE APPROVED ............................. 18

A. The Proposed Form of Notice is Accurate and Adequately Informs Class

Members of their Rights ................................................................................. 18

B. The Proposed Method of Notice Provides for the Best Notice Practicable

Under the Circumstances ................................................................................ 19

VII. CONCLUSION .............................................................................................. 20


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TABLE OF AUTHORITIES

Page Nos.

FEDERAL CASES

Acosta v. Trans Union, LLC

243 F.R.D. 377 (C.D. Cal. 2007) ................................................................. 13

Amchem Products, Inc. v. Windsor

521 U.S. 591 (1997) ..................................................................................... 10

Amgen Inc. v. Conn. Ret. Plans & Trust Funds

__ U.S. __, 133 S. Ct. 1184, 185 L. Ed. 2d 308 (2013) ............................... 10

Bellinghausen v. Tractor Supply Co.

306 F.R.D. 245 (N.D. Cal. 2015) ................................................................. 17

Carter v. Anderson Merchandisers, LP

2010 WL 1946784 (C.D. Cal. May 11, 2010) .............................................. 13

Chavez v. Blue Sky Natural Beverage Co.

268 F.R.D. 365 (N.D. Cal. 2010) ................................................................. 11

Chowning, et al. v. Kohl’s Department Stores, Inc., et al.

(S.D.Cal.) 3:15-cv-01624-JAH-WVGx ........................................................ 3

Class Plaintiffs v. City of Seattle

955 F.2d 1268 (9th Cir. 1992) ...................................................................... 12

Comcast Corp. v. Behrend

-- US --, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013) ....................................... 11

Fulford v. Logitech, Inc.

2010 WL 807448 (N.D. Cal. Mar. 5, 2010) ................................................. 17

Hinojos, et al. v. Kohl’s Corporation, et al.

(C.D.Cal.) 2:10-cv-07590-ODW-AGRx ...................................................... 2

Hinojos v. Kohl’s Corporation,

718 F.3d 1098 (9th Cir. 2013) ................................................................... passim


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In re Online DVD-Rental Antitrust Litig.

779 F.3d 934 (9th Cir. 2015) ..................................................................... passim

In re Tableware Antitrust Litig.

484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) .......................................... 13

Keirsey v. eBay, Inc.

2014 WL 644697 (N.D. Cal. Feb. 14, 2014) ............................................. 19

Lane v. Facebook, Inc.

696 F.3d 811 (9th Cir. 2012) ..................................................................... 18

Leyva v. Medline Indus. Inc.

716 F.3d 510 (9th Cir. 2013) ........................................................................ 11

Linney v. Cellular Alaska Partnership

151 F.3d 1234, 1242 (9th Cir. 1998) ............................................................ 16

Negrete v. Allianz Life Ins.

238 F.R.D. 482 (C.D. Cal. 2006) ................................................................. 11

Officers for Justice v. Civil Service Commission,

688 F.2d 615 (9th Cir. 1982) ........................................................................ 12,14

Pereira v. Ralph’s Grocery Co.

2010 WL 6510338 (C.D. Cal. Mar. 24, 2010) ............................................. 12

Pulaski & Middlman, LLC v. Google, Inc.

802 F.3d 979 (9th Cir. 2015) ........................................................................ 15

Radcliffe v. Experian Info. Solutions, Inc.

715 F.3d 1157, 1165 (9th Cir. 2013) ............................................................ 17

Rodriquez v. W. Publ’g Corp.

563 F.3d 948, 965 (9th Cir. 2009) .......................................................... 13,14,18

Schaffer v. Litton Loan Servicing, LP

2012 WL 10274679 (C.D. Cal. Nov. 13, 2012) ........................................... 16

Silber v. Mabon

18 F.3d 1449 (9th Cir. 1994) ........................................................................ 19


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Spann v. JC Penney Corp.

307 F.R.D. 508 (C.D. Cal. 2015) .............................................................. passim

Tait v. BSH Home

2012 WL 6699247 (C.D. Cal. Dec. 20, 2012) ............................................. 10

Vasquez v. Coast Valley Roofing, Inc.

670 F. Supp. 2d 1114 (E.D. Cal. 2009) ........................................................ 7

Vizcaino v. U.S. Dist. Court for Western Dist. Of Washington

173 F.3d 713 (9th Cir. 1999) ........................................................................ 8

West v. Circle K Stores, Inc.

2006 WL 1652598 (E.D. Cal. June 13, 2006) .............................................. 12

Yokoyama v. Midland Nat. Life Ins. Co.

594 F.3d 1087 (9th Cir. 2010) ...................................................................... 11

STATE CASES

In re Tobacco Cases II

2015 WL 5673070 (Cal. App. Sept. 28, 2015) ............................................ 15

STATUTES AND RULES

Cal. Bus. & Prof. Code §17200 ........................................................................... passim

Cal. Bus. & Prof. Code §17500 ........................................................................... passim

Fed. R. Civ. Proc. 23 ............................................................................................ passim


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-1- MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND

CERTIFICATION OF SETTLEMENT CLASS

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION:

Plaintiffs Steven Russell (“Russell”) and Donna Caffey (“Caffey”)

(collectively “Plaintiffs”) and their counsel have achieved a settlement (the

“Settlement”) of this action with Defendant Kohl’s Department Stores, Inc.

(“Defendant”). The Settlement is the product of months of arms-length negotiations

between the parties, including mediation sessions with a highly experienced mediator,

Hon. Eugene F. Lynch (Ret.). Defendant has agreed to pay six million one-hundred

fifty thousand dollars ($6,150,000.00) in cash and cash equivalents for the benefit of

Settlement Class Members. (See Settlement Agreement, dated March 11, 2016

(“Agreement”), attached as Exhibit A to the Declaration of Christopher Morosoff

(“Morosoff Dec.”).1 Claimants will receive Gift Card Credits for the purchase of any

product sold by Kohl’s. In addition, and as a direct result of this litigation, Defendant

has agreed to implement changes in its pricing practices, including training and

auditing programs designed to ensure that it complies with California’s price

comparison advertising laws. As further detailed in the Agreement, Defendant has

also agreed to pay the costs of providing class notice and administering claims,

reasonable attorney’s fees and costs, and incentive awards to the representative

Plaintiffs. These amounts are to be deducted from the $6,150,000, with the

remainder to be divided by the Class Members who make claims on a pro-rata basis.

Through this Motion, Plaintiffs seeks an order: (1) certifying a Settlement

Class for settlement purposes; (2) granting preliminary approval of the Settlement

pursuant to Fed. R. Civ. Proc. 23(e); (3) approving the form and manner of Notice to

Settlement Class Members; (4) establishing a Qualified Settlement Fund (“QSF”);

and (5) setting a date for a final approval hearing. The Settlement satisfies the

standards for preliminary approval and should be approved – it is within the range of

1 All capitalized terms herein are defined in the Agreement, unless otherwise noted.


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possible approval to justify sending and publishing notice of the Settlement to Class

Members and scheduling final approval proceedings. See In re Online DVD-Rental

Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) (“In re Online DVD”).

II. FACTUAL AND PROCEDURAL BACKGROUND:

A. The Hinojos Action:

In August of 2010, a putative class action suit, alleging identical claims as here

but with a less inclusive proposed class, was filed against Kohl's in L.A. Superior

Court and later removed to the Central District of California on October 12, 2010

(Hinojos, et al. v. Kohl’s Corporation, et al. (C.D.Cal.) 2:10-cv-07590-ODW-AGRx

(“Hinojos”)). Hinojos, as here, raised claims against Defendant for false “regular” or

“original” price advertising in violation of California’s false advertising laws.

On December 1, 2010, the district court dismissed Hinojos’ UCL and FAL

claims for lack of standing. Plaintiff appealed. On May 21, 2013, the Ninth Circuit

reversed the order of dismissal and remanded the case back to the district court.

Hinojos v. Kohl’s Corporation, 718 F.3d 1098 (9th Cir. 2013). On November 6,

2013, Hinojos filed a motion for class certification. On March 6, 2014, after the

motion was taken under submission but before any formal ruling, and for reasons

known only to Hinojos and his counsel, plaintiff dismissed his entire action with

prejudice. (Hinojos, (ECF No. 151)). No class was certified. No benefit was

conferred on any putative class member. No class member was notified that the

action had been dismissed. Nearly five years of claims have since expired.

B. The Chowning Action:

Approximately 2 months after the filing of the instant action, counsel for

Hinojos filed a new putative class action against Kohl’s in the Southern District of

California, identical to the suit they had quietly dismissed just over a year earlier in

the Central District of California. (Chowning, et al. v. Kohl’s Department Stores,

Inc., et al. (S.D.Cal.) 3:15-cv-01624-JAH-WVGx). The only practical differences

between the new Chowning action and the previously dismissed Hinojos action are:


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(1) Chowning was filed in a different forum; and, (2) nearly five years of class

members’ claims in Hinojos were abandoned and have now been lost.

C. The Instant Russell Action:

Counsel for Russell determined that the claims of the class had been left

unaddressed by counsel for Hinojos. Realizing that the claims of the class in Hinojos

were still valid, but that counsel for Hinojos had obtained no benefit for the class, and

worse, that millions of otherwise valid claims had been lost by Hinojos silently

dismissing his case with no notice to any affected class member, Russell and his

counsel set out to salvage what valid claims might remain and bring claims on behalf

of a current class of Kohl’s customers.

Prior to filing this action on June 11, 2015, Plaintiffs’ counsel consulted with

Plaintiffs, investigated Defendant’s pricing practices and researched the law

applicable to Plaintiffs’ claims. (Morosoff Dec. at ¶7). In the operative First

Amended Complaint (“FAC”) filed on August 14, 2015 (ECF No. 14), Plaintiffs

allege that throughout the Class Period, Defendant has engaged in a deceptive

advertising scheme by which it advertised “sale” prices that were substantially lower

than advertised “regular” or “original” prices for the products sold in its California

department stores. Plaintiffs further allege that the higher “regular” and “original”

prices were deceptive because Defendant did not offer or sell its merchandise at those

prices. The FAC seeks restitution and injunctive relief under California’s Unfair

Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. (“UCL”), and False

Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq. (“FAL”).

Throughout the Litigation, Plaintiffs’ counsel engaged in extensive legal

research and analysis and conducted thorough class and merits discovery, including

interrogatories and document requests. (Morosoff Dec. at ¶8). Plaintiffs’ counsel

received, reviewed and analyzed Defendant’s written discovery responses, as well as

the documents that Defendant produced in the Litigation, including its voluminous

and detailed sales data for the tens of thousands of sales transactions. (Id.).


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Plaintiffs’ counsel also continuously monitored Defendant’s public filings, keeping a

close eye on Defendant’s financial status and pricing practices. (Id.).

On October 6, 2015, the Court denied Defendant’s Motion to Dismiss. (ECF

No. 32). On December 4, 2015, the Court granted Plaintiffs’ Motion for Class

Certification (ECF No. 52), and on January 15, 2016, after further briefing clarified

its Order certifying the Class (the “Certification Order”). (ECF No. 57). The Court

certified the following injunctive relief class under Fed. R. Civ. Proc. 23(b)(2): All persons who, while in the State of California and between June 11, 2011, and the present (the “Class Period”), purchased from Kohl’s one or more items at any Kohl’s store in the State of California at a discount of at least 30% off of the stated “original” or “regular” price, and who have not received a refund or credit for their purchase(s).

Certification Order at *1. (Morosoff Dec. at ¶9).

III. THE SETTLEMENT:

The Settlement here is a non-reversionary settlement. The entire amount of the

QSF will be distributed for the benefit of Settlement Class Members.

A. Settlement Negotiations:

Throughout the winter of 2015-2016, the parties engaged in extensive

negotiations concerning the possible structure of a class-wide settlement. (Morosoff

Dec. at ¶10). These negotiations led to private mediation, on January 29, 2016, with

Judge Lynch (Ret.) at JAMS. (Id.). At the conclusion of a full day of mediation, the

parties reached a tentative agreement with respect to some, but not all of the material

terms of the Settlement as reflected in the Agreement. (Id.). The parties remained at

an impasse with respect to certain terms. Three further conferences with the

assistance of Judge Lynch were required before final agreement was reached on all

terms. The parties subsequently negotiated, drafted and executed the comprehensive

Agreement that is currently before the Court. (Morosoff Dec., Exh. A).

/ / /

/ / /


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B. Terms of the Settlement:

The Agreement is intended to resolve the Litigation in its entirety, and is

conditioned on the Court certifying a Settlement Class, for settlement purposes only,

and granting final approval of the Settlement. (Ex. A at ¶¶2.1-2.4). The parties have

modeled the Agreement, to the extent possible, after the settlement agreement

approved by the Ninth Circuit in In re Online DVD. (Morosoff Dec. at ¶11).

1. Monetary Relief:

The Settlement provides that Defendant will make available a fixed sum of

$6,150,000.00 (the “Monetary Component”) for the benefit of the Class. (Ex. A at

¶3.1). Subject to Court approval, the Monetary Component will be used to pay for

Notice and Administration Costs (not to exceed $1,000,000) (Id. at ¶3.1.2),

reasonable Attorneys’ Fees and Costs (not to exceed 25% of the Class Settlement

Amount), and Class Representative Enhancement Payments (not to exceed $7,500).

(Id. at ¶¶3.1-3.1.4). The amount remaining after these payments shall be paid to

Settlement Class Members who submit a valid Claim Form. (Id.).

The required portions of the Monetary Component of the Agreement shall be

funded through and deposited into a QSF as reflected in the Agreement. (Id. at ¶¶3.2,

3.3, 9.1-9.8). The QSF will qualify as a “qualified settlement fund” under section

468B of the Internal Revenue Code and sections 1.468B-1, et seq. of the Treasury

Regulations, as: (1) the QSF is being established subject to approval of the Court, and

will be operated pursuant to the terms and conditions of the Agreement; (2) the QSF

will be subject to the continuing jurisdiction of the Court; (3) the QSF is being

established to resolve or satisfy claims of alleged tort or violation of law; and (4) the

QSF will be a trust, and its assets will be segregated from the general assets of the

trustee and/or administrator and deposited therein.

Claimants will receive their share of the Monetary Component as a Gift Card

Credit redeemable for purchases at any Kohl’s store or www.Kohls.com. Each Gift

Card Credit shall be fully transferable, stackable and may be used in connection with


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any promotional discounts that are otherwise available with the use of Gift Cards.

Gift Card Credits will have no expiration date and need not be used in full at any

time. They will maintain a running balance that will be depleted based only on use

until the Claimant’s balance is zero. (Ex. A, ¶¶1.13, 3.1.1). Claimants will have

ninety days from the date of Notice to submit a Claim Form either electronically

through a Settlement Website maintained by the Administrator, or via mail to the

Administrator. (Id. at ¶¶5.1, 5.2.2). Following the Settlement Effective Date, Gift

Card Credits will be made available to Claimants through a reasonable and cost

effective process to be designed by the parties with the assistance and cooperation of

the Administrator, and as approved by the Court. (Id. at ¶8.1.3.).

Like the gift cards offered in In re Online DVD, the Gift Card Credits here are

an alternative to cash, and are not “coupons” within the meaning of CAFA. They do

not expire, and may be used to purchase any product at a Kohl’s store or on

Defendant’s website. (Ex. A at ¶1.13). The Gift Card Credits here have many of the

same attributes as those in In re Online DVD, where the gift cards were found not to

be coupons because, among other things, they could be used to purchase any product

from defendant, were freely transferable and did not expire. Id. at 950-52.

2. Injunctive Relief:

As a direct result of this Litigation, Defendant has also agreed to implement

changes to its price-comparison advertising policies and agrees that, as of the date of

settlement, and continuing forward, it will not violate Federal or California law,

including California’s specific price-comparison advertising statutes. (Ex. A at ¶3.4).

Defendant has also agreed to enhance and expand programs intended to promote legal

compliance, including those requirements set forth in the Federal Trade

Commission's guidelines for the use of price comparisons in advertising (16 C.F.R.

233.1) and the relevant comparative advertising provisions within the UCL and FAL,

as well as California Civil Code Section 1770 (a)(13) (“CLRA”). Defendant’s

compliance program enhancements shall include the development and roll-out of


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enhanced pricing compliance computer systems. In addition, commencing within six

(6) months of the Settlement Effective Date and continuing for a period of at least

four (4) years, Defendant will also implement pricing compliance training targeted at

relevant buying office personnel, which shall be offered on a regular basis, no less

than annually, to ensure that new hires are also appropriately trained on price-

comparison advertising requirements. (Id.).

3. The Release:

Settlement Class Members who do not opt out will be deemed to have released

Defendant from claims related to the Litigation. (Ex. A at ¶¶1.23, 10.1-10.1.3). To

the extent possible, the release language in the Agreement follows the release

language approved by the Ninth Circuit in In re Online DVD. (Morosoff Dec. at

¶11). While it releases both known and unknown claims, the Release is limited to the

universe of facts, occurrences, transactions and claims alleged in the FAC. (Ex. A at

¶¶10.1-10.1.3). As a result, the Release is sufficiently limited in scope and should be

given preliminary approval. See Vasquez v. Coast Valley Roofing, Inc., 670 F. Supp.

2d 1114, 1126 (E.D. Cal. 2009).

4. Notice and Claims Administration:

After consulting with and receiving bids from multiple candidates, Class

Counsel retained KCC LLC (“KCC”) to serve as Claims Administrator. (Ex. A at

¶1.6). KCC is a highly experienced class action claims administration company.

(Declaration of Carla A. Peak (“Peak Dec.”) at ¶¶9-15). KCC estimates that all costs

of Notice and Administration will be approximately $921,681, and has provided a cap

of $1,000,000 for all such costs. (Id. at ¶8).

KCC will establish a toll-free number and web address from which Settlement

Class Members can obtain information about the Settlement. (Ex. A at ¶4.1-4.4; Peak

Dec. at ¶¶4,24). It will also establish a Settlement Website where Settlement Class

Members can: (1) view and download the Notice, Claim Form, Opt-Out Request


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Form, FAC and settlement Agreement; and, (2) fill out and submit Claim Forms.

(Ex. A at ¶4.4; Peak Dec. at ¶4).

Within 30 days following preliminary approval, KCC will send Email Notice

to the approximately 5,067,512 Settlement Class Members for whom the parties have

an email address. (Ex. A at ¶4.3; Peak Decl. at ¶18). Within 50 days following

preliminary approval, KCC will send, via first class mail, a Post-Card Notice to the

approximately 2,000,000 Settlement Class Members for whom the parties have only a

physical address, but no email address. (Ex. A at ¶4.3; Peak Dec. at ¶¶17-18).

Within 10 days of the Email and Post-Card Notices being sent, KCC will

commence an additional publication notice plan tailored to reach those Settlement

Class Members for whom the parties lack any contact information. (Ex. A at ¶4.3;

Peak Dec. at ¶¶17, 21-24). The publication notice will direct Settlement Class

Members to the Settlement Website where they can view the full Notice and obtain

further information about the Litigation and Settlement. (Ex. A at ¶4.1.2).

Upon Court approval, a QSF will be established to facilitate the transfer and

accounting of settlement proceeds, and it will ensure compliance with all applicable

IRS Code Sections and Treasury Regulations. (Ex. A at ¶¶9.1-9.8). KCC will also

process and audit Claims and Opt-Out Requests, and make Gift Card Credits

available to Claimants. (Ex. A at ¶8.1-8.2; Peak Dec. at ¶4).

IV. THE SETTLEMENT CLASS SHOULD BE CERTIFIED:

On December 4, 2015, the Court certified a Class pursuant to Fed. R. Civ.

Proc. 23(a) and (b)(2). (Certification Order, ECF Nos. 52 and 57). However, the

Settlement here is conditioned upon the Court expanding the Certification Order, for

settlement purposes only, by certifying a Settlement Class to pursue claims for

monetary, as well as injunctive, relief. (Ex. A at ¶2.4). The Settlement Class

definition will remain the same.

The Court is endowed with the authority to alter or amend a certification order

at any time before a decision on the merits. Fed. R. Civ. Proc. 23(c)(1)(C); Vizcaino


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v. U.S. Dist. Court for Western Dist. Of Washington, 173 F.3d 713, 721 (9th Cir.

1999). The requested modification should be granted because it is appropriate to

provide monetary (as well as injunctive) relief to Class Members who were exposed

to the pricing practices complained of in the FAC.

While the expanded class must satisfy the requirements of Rule 23, those

requirements are easily met here because the Parties seek only to provide monetary

relief to those people who are already members of the certified Class. The Court

previously found that the Class was sufficiently numerous under Rule 23(a)(1). (ECF

No. 57 at *2). The number of Class Members has not changed. Therefore, Rule

23(a)(1) is satisfied.

The Court also previously found that the Class was adequately represented,

(ECF No. 57 at *4). The Class remains adequately represented. The Class

Representatives and Class Counsel remain the same and are unaware of any conflicts

or interests antagonistic to members of the Settlement Class. Plaintiffs and their

counsel have continued to vigorously prosecute this action. (Morosoff Dec. at ¶10).

The Court’s prior analysis of commonality under Rule 23(a)(2), and typicality

under Rule 23(a)(3), also hold true with respect to the proposed Settlement Class.

(ECF No. 57 at *2-3). Plaintiffs’ claims continue to be based on the same facts and

legal theories as the claims of the certified Class because they are all based on

Defendant’s alleged use of deceptive price-comparisons. Thus, the same common

evidence that would prove claims on behalf of the previously certified Class would

also be used to prove the claims of the Settlement Class. As such, Plaintiffs

respectfully request that the Court certify Plaintiffs’ claims to proceed for settlement

purposes under Fed. R. Civ. Proc. 23(b)(3). “Certification under Rule 23(b)(3) is

proper ‘whenever the actual interests of the parties can be served by settling their

differences in a single action.’” Spann v. JC Penney Corp., 307 F.R.D. 508, 519

(C.D. Cal. 2015) (quoting Hanlon, 150 F.3d at 1022). The interests of the parties

here can best be served by settling their differences in this single action.


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In Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620-21 (1997), the

Supreme Court clarified the difference between certifying a litigation class under Fed.

R. Civ. Proc. 23(a) and (b) and certifying a settlement class under Rule 23(e). In

recognizing that “[s]ettlement is relevant to a class certification,” the Supreme Court

held that when “[c]onfronted with a request for settlement-only class certification, a

district court need not inquire whether the case, if tried, would present intractable

management problems,” because the proposal in a request to certify a class for

settlement purposes “is that there be no trial.” Id. at 620.

The focus here is “whether [the] proposed class has sufficient unity so that

absent members can fairly be bound by decisions of [the] class representatives.” Id.

at 621. Rule 23(b)(3) requires that common questions predominate over individual

questions. However, it is not necessary to show that each question will be answered

in favor of the Class, but only that there is a common methodology for proving

liability on behalf of the Class. Amgen Inc. v. Conn. Ret. Plans & Trust Funds, __

U.S. __, 133 S. Ct. 1184, 1191, 185 L. Ed. 2d 308 (2013) (“Amgen”). Under Rule

23(b)(3), the Court need only form a “reasonable judgment” on each certification

requirement “[b]ecause the early resolution of the class certification question requires

some degree of speculation[.]” Spann, 307 F.R.D. 508 at 514.

“District courts in California routinely certify consumer class actions arising

from alleged violations of the CLRA, FAL, and UCL.” Tait v. BSH Home, 2012 WL

6699247 at *12 (C.D. Cal. Dec. 20, 2012). In a similar false pricing case, the court in

Spann found that “[t]his case is one of those routine cases.” 307 F.R.D. at 518. The

overriding common question in this case is “whether defendant’s [price-comparison]

advertisements were likely to deceive a reasonable consumer.” Id. at 518. “Courts

often find that common questions predominate in FAL actions because they call for

analysis under an objective reasonable person test.” Id. at 523. As in Spann, “the

basic common question [here] – whether defendant’s price comparison scheme


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generated false advertisements that deceived consumers – predominates under the

UCL, CLRA, and §17500 of the FAL.” Id. at 529.

At this stage, Plaintiffs must merely “present a likely method for determining

class damages, though it is not necessary to show that their method will work with

certainty at this time.” Chavez v. Blue Sky Natural Beverage Co., 268 F.R.D. 365,

379 (N.D. Cal. 2010). “[T]he presence of individualized damages cannot, by itself,

defeat class certification under Rule 23(b)(3).” Leyva v. Medline Indus. Inc., 716

F.3d 510, 514 (9th Cir. 2013). Plaintiffs must simply show that damages “stemmed

from the defendant’s actions that created the legal liability.” Id. at 513.

Each of the alternative measures for calculating restitution proposed by

Plaintiffs throughout this litigation rests on simple, mathematical calculations using

Defendant’s objective sales data and class member receipts. Since these calculations

are purely mechanical, they do not prevent class certification. Negrete v. Allianz Life

Ins., 238 F.R.D. 482, 494 (C.D. Cal. 2006).

The Court has already determined in this case that any of the measures and

methods for determining restitution discussed in Spann may be appropriate here.

(Order Denying Defendant’s Motion to Dismiss (ECF No. 32) at *6). The measures

discussed in Spann, including “complete restitution” and “net profit” measures,

satisfy the standard set forth in Comcast Corp. v. Behrend, -- US --, 133 S.Ct. 1426,

185 L.Ed.2d 515 (2013), and do not prevent certification under Rule 23(b)(3). Spann,

307 F.R.D. at 530-531; see also, Yokoyama v. Midland Nat. Life Ins. Co., 594 F.3d

1087, 1094 (9th Cir. 2010) (“the amount of damages is invariably an individual

question and does not defeat class action treatment.”). Restitution here can be

calculated using a mechanical process without regard to individualized issues such as

the difference between an item’s sale price and its ARP, and thus there are no

individual issues that defeat certification.

Finally, the superiority requirement of Rule 23(b)(3) is satisfied because the

ultimate recovery by Settlement Class Members would be dwarfed by the cost of


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litigating on an individual basis, and any Member who wishes to opt out may do so

pursuant to the proposed notice plan. In this case, “each class member’s claim for

restitution involves a relatively small sum of money, and litigation costs would render

individual prosecution of such claims prohibitive.” Spann, 307 F.R.D. at 531. In

sum, Plaintiffs contend that the Court’s prior Rule 23(a) analysis applies with equal

force to the expanded Settlement Class, classwide monetary relief is appropriate here,

and the proposed Settlement Class should be certified as requested.

V. THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED:

The Court must determine whether the proposed settlement is fair, reasonable,

and adequate. Fed. R. Civ. Proc. 23(e)(2). However, there is a strong judicial policy

that favors settlements. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th

Cir. 1992). “[I]t must not be overlooked that voluntary conciliation and settlement

are the preferred means of dispute resolution.” Officers for Justice v. Civil Service

Commission, 688 F.2d 615, 625 (9th Cir. 1982), cert. denied, 459 U.S. 1217, 103 S.

Ct. 1219, 75 L. Ed. 2d 456 (1983).

The settlement approval process typically involves two steps. First, the Court

must determine whether the proposed settlement merits preliminary approval so that

notice can be issued to class members and a final fairness hearing can be scheduled.

See e.g., Pereira v. Ralph’s Grocery Co., 2010 WL 6510338, at *2 (C.D. Cal. Mar.

24, 2010) (noting that a full fairness analysis is unnecessary at the preliminary

approval stage). Second, at the final approval stage, the Court makes a complete

determination regarding the fairness, reasonableness, and adequacy of the settlement

and hears any objections of class members. West v. Circle K Stores, Inc., 2006 WL

1652598, at *2 (E.D. Cal. June 13, 2006).

“[P]reliminary approval and notice of the settlement terms to the proposed

class are appropriate where ‘[1] the proposed settlement appears to be the product of

serious, informed, non-collusive negotiations, [2] has no obvious deficiencies, [3]

does not improperly grant preferential treatment to class representatives or segments


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of the class, and [4] falls with the range of possible approval . . . .’ In re Tableware

Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) (emphasis added); see

also Acosta v. Trans Union, LLC, 243 F.R.D. 377, 386 (C.D. Cal. 2007) ("To

determine whether preliminary approval is appropriate, the settlement need only be

potentially fair, as the Court will make a final determination of its adequacy at the

hearing on Final Approval, after such time as any party has had a chance to object

and/or opt out.") (emphasis in original). The Court does not need to “specifically

weigh[] the merits of the class’s case against the settlement amount and quantif[y] the

expected value of fully litigating the matter.” Rodriquez v. W. Publ’g Corp., 563

F.3d 948, 965 (9th Cir. 2009). Rather, the Court need only evaluate whether the

Settlement is “the product of an arms-length, non-collusive” negotiations. Id.

A. The Settlement is the Product of Informed, Arms-Length Negotiations:

This case has been contentiously litigated from the start. (Morosoff Dec. at

¶21). The Settlement was reached after contested discovery, motion practice

(including resolution of a motion to dismiss and a motion for class certification), and

after protracted settlement negotiations. (Id.). Both parties were represented by

experienced class counsel, and Plaintiffs participated throughout the settlement

process. (Id. at ¶22). Moreover, the parties did not discuss or negotiate Class

Counsel’s attorneys’ fees and costs, or Plaintiffs’ proposed Enhancement Payments,

until after all other material terms, including the over $6 million monetary fund for

the Settlement Class, were agreed upon. (Id.).

A settlement negotiated by experienced attorneys and reached with the

assistance of an experienced mediator through a negotiating process supports a

determination that the process was not collusive. See e.g. Carter v. Anderson

Merchandisers, LP, 2010 WL 1946784, at *7 (C.D. Cal. May 11, 2010) (Settlement

is product of arms-length negotiation if it is reached through “formal mediation

sessions presided over by an experienced mediator.”). The mediator in this action,

Judge Lynch (Ret.), is one of the most well-respected mediators by both plaintiffs and


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defendants in complex and class action litigation. His credentials include: Judge,

United States District Court for the Northern District of California, 1982-1997; sat by

designation, Ninth Circuit Court of Appeal; Judge, San Francisco Superior Court,

1974-1982; Recognized as one of the “500 Leading Judges in America,” and as a Top

50 California Neutral, Daily Journal Extra, 2003.

At the time of negotiating the Settlement here, the Parties were fully versed

with the relevant facts and law, and were in a position to make an informed

evaluation of “the likelihood of a plaintiffs’ or defense verdict, the potential recovery,

and the chances of obtaining it[.]” Rodriquez, 563 F.3d at 965. The Settlement here

is the product of arms-length negotiations and there is no evidence to suggest that it is

“the product of fraud or overreaching by, or collusion between, the negotiating

parties[.]” Rodriguez, 563 F.3d at 965 (quoting Hanlon, 150 F.3d at 1027).

B. The Amount Offered in Settlement is Fair and Reasonable:

As the Ninth Circuit has noted, “the very essence of a settlement is

compromise, ‘a yielding of absolutes and an abandoning of highest hopes.’” Officers

for Justice, 688 F.2d at 624. “[I]t is the very uncertainty of outcome in litigation and

avoidance of wasteful and expensive litigation that induce consensual settlements.

The proposed settlement is not to be judged against a hypothetical or speculative

measure of what might have been achieved by the negotiators.” Id. at 625.

Here, the Class Settlement Amount of over $6 million, combined with the

injunctive relief, is substantial and falls well within a range of possible approval.

This is particularly true given the real and substantial risk that Plaintiffs could have

successfully proven liability at trial yet still recovered nothing because the

entitlement to and amount of restitution in this case are not certain.

While Plaintiffs firmly believe that their liability case is exceptionally strong,

Defendant has consistently argued that they are not entitled to any restitution because

restitution must be measured by the difference between the amount paid and value

received which, Defendant argues, equals zero. While Plaintiffs dispute this, and


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have proposed other alternative measures of restitution, the fact and amount of

restitution still remain hotly contested and subject to the Court’s discretion. Pulaski

& Middlman, LLC v. Google, Inc., 802 F.3d 979, 986 (9th Cir. 2015). Accordingly,

there is considerable uncertainty as to whether Plaintiffs could recover any restitution

even if they were able to prove liability at trial.

The recent decision in In re Tobacco Cases II, 2015 WL 5673070, at **5-9

(Cal. App. Sept. 28, 2015) (“Tobacco”), makes this clear, where the plaintiffs

established liability on their UCL and FAL claims but the trial court declined to

award any restitution because the plaintiffs failed to prove a difference between the

amount paid and value received. Id. In fact, the court in Tobacco ordered the

plaintiffs to pay the defendant’s litigation costs of almost $800,000. Id. The court of

appeals affirmed, holding that the trial court “lacked discretion to award restitution”

because the plaintiffs did not establish any price/value differential. Id. at *13.

Here, it is difficult to dispute that each class member received products with

some value. It could therefore be argued that restitution should be limited to the

difference between price paid and value received, which could conceivably result in

no monetary recovery. Id. While Plaintiffs believe their case is distinguishable from

Tobacco, and that alternative measures of restitution remain viable in this case, there

can be no doubt that Defendant would have renewed its argument concerning

Plaintiff’s entitlement to restitution if this case did not settle. Settlement negotiations

in this case took place with the Tobacco decision in mind. (Morosoff Dec. at ¶24).

In evaluating the Settlement, it is appropriate to consider the amount that

Settlement Class Members will actually recover. Here, Claimants will receive Gift

Card Credits, and the amount that they receive will depend on the number of Claims

submitted and the fees and costs awarded by the Court. (Ex. A at ¶3.1-3.1.4).

Assuming that Notice and Administration Costs equal KCC’s estimate of

$1,000,000, and assuming arguendo that the Court awards the full amount requested

for Attorneys Fees and Costs ($1,537,500), and Enhancement Payments ($15,000),


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there would be $3,597,500 remaining in the Monetary Component for distribution to

Claimants. (Morosoff Dec. at ¶25). From that, it is possible to calculate a range of

expected benefits to Settlement Class Members based on estimated claim rates.

For example, a 1% claim rate would provide a benefit of between $42.32 -

$51.40 for each Claimant; a 2% claim rate would provide a benefit of $21.16 - $25.70

per Claimant; a 3% claim rate would provide a benefit of $14.11 - $17.13; and, a 5%

claim rate would result in a minimum benefit of $8.46 - $10.28. (Id.).

Any evaluation of Plaintiffs’ theoretical recovery if they were to prevail at trial,

must also consider the additional costs and delay of trial and the risk that Plaintiffs

could prove liability yet still recover nothing. See e.g. Schaffer v. Litton Loan

Servicing, LP, 2012 WL 10274679, at *11 (C.D. Cal. Nov. 13, 2012) (“Estimates of a

fair settlement figure are tempered by factors such as the risk of losing at trial, the

expense of litigating the case, and the expected delay in recovery (often measured in

years).”); Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 1998)

(“The fact that a proposed settlement may only amount to a fraction of the potential

recovery does not . . . mean that the proposed settlement is grossly inadequate and

should be disapproved.”).

In sum, even if Plaintiffs successfully proved their case at trial, the amount of

restitution recovered, if any, could vary widely depending on a number of factors.

And, if anything were recovered, it could take years to secure, as Defendant would

undoubtedly appeal an adverse judgment. In comparison, the Settlement provides a

guaranteed, fixed, immediate and substantial recovery of over $6 million, plus

meaningful prospective remedial relief. The Settlement is therefore fair and

reasonable, and certainly within the range of possible final approval.

C. The Settlement Does Not Improperly Grant Preferential Treatment to the

Class Representatives:

The Agreement authorizes an Enhancement Payment for Plaintiffs in an

amount to be determined by the Court but not to exceed $7,500 each. (Ex. A at


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¶3.1.4). Incentive awards typically range from $2,000 to $10,000.” Bellinghausen v.

Tractor Supply Co., 306 F.R.D. 245, 267 (N.D. Cal. 2015) (collecting cases). In

evaluating incentive awards, the Court may consider whether there is a “significant

disparity between the incentive award[] and the payments to the rest of the class

members” such that it creates a conflict of interest. Radcliffe v. Experian Info.

Solutions, Inc., 715 F.3d 1157, 1165 (9th Cir. 2013). More importantly, however, are

“the number of class representatives, the average incentive award amount, and the

proportion of the total settlement that is spent on incentive awards.” In re Online

DVD, 779 F.3d at 947. Finally, the Court must evaluate whether the incentive award

was conditioned on the class representative’s approval and support of the Settlement.

Radcliffe, 715 F.3d at 1161. Here, it was not. (Morosoff Dec. at ¶26).

The $7,500 requested here does not rise to the level of unduly preferential

treatment. Indeed, courts have approved similar or greater disparities between

incentive awards and individual class member payments. See e.g. Fulford v.

Logitech, Inc., 2010 WL 807448, at *3 n.1 (N.D. Cal. Mar. 5, 2010) (collecting cases

awarding incentive award payments ranging from $5,000 to $40,000).

Here, there are only two class representatives who seek, at most, only two-

tenths of 1% (0.2%) of the $6,150,000 Class Settlement Amount. This amount is

reasonable considering how small the award is in relation to the full amount of the

settlement fund. See In re Online DVD, 779 F.3d at 947-948 (approving incentive

awards that “ma[d]e up a mere .17% of the total settlement fund.”). Finally, Plaintiffs

did not condition their approval and support of the Settlement on either of them

receiving an incentive award. (Morosoff Dec. at ¶26). Accordingly, Plaintiffs’

interests do not conflict with or diverge from the interests of the Settlement Class.

Radcliffe, 715 F.3d at 1161.

D. The Proposed Settlement Has No Obvious Deficiencies:

The Settlement guarantees a large amount of money plus remedial relief for the

benefit of Settlement Class Members. It is structured to be consistent with In re


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Online DVD, where settlement proceeds were allocated evenly regardless of specific

damages incurred by each claimant. 779 F.3d at 941. The Agreement provides that

the Monetary Component shall be funded through, and all disbursements shall come

from, a QSF, pursuant to Treasury Regulation §1.468B-1, 26 C.F.R. §1.468B-1. (Ex.

A at ¶¶9.1-9.8). It also provides that KCC, the Claims Administrator, shall serve as

the “administrator” of the QSF within the meaning of Treasury Regulation §1.468B-

2(k)(3), and the Parties intend for KCC to be appointed as Trustee of the QSF. (Id.).

Examination of the Settlement here reveals no obvious defects.

VI. THE PROPOSED NOTICE SHOULD BE APPROVED:

Rule 23(e) requires a notice describe “the terms of the settlement in sufficient

detail to alert those with adverse viewpoints to investigate and to come forward and

be heard.” In re Online DVD, at 946; see also Rodriguez, 563 F.3d at 962 (notice is

adequate when it describes “the aggregate amount of the settlement fund and the plan

for allocation.”). It “does not require detailed analysis of the statutes or causes of

action forming the basis for the plaintiff class’s claims, and it does not require an

estimate of the potential value of those claims.” Lane v. Facebook, Inc., 696 F.3d

811, 826 (9th Cir. 2012).

A. The Proposed Form of Notice is Accurate and Adequately Informs Class

Members of Their Rights:

The Email, Post-Card and Publication Notices, attached respectively as

Exhibits 3-5 to the Agreement, clearly meet these standards. Each describes the

Settlement Class and provides simple and straightforward information about the

nature of the action, what options Settlement Class Members have in the case, the

effect of their choices of action, and the need to check the Settlement Website for

more detail. Each also states the amount of the QSF, and explains that Claimants will

receive Gift Card Credits, and that the amount of Gift Card Credit will depend on the

amount of attorneys’ fees, costs and representative enhancements awarded, and on

the number of valid claims received. (Id.). The Notices further state the amount


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Class Counsel may seek in fees, expenses and Enhancement Payments, the fact that

Settlement Class Members will need to submit a Claim Form to obtain relief, the

deadline for objecting, opting out or submitting a claim, and the date, time and place

of the Final Approval hearing. (Id.). The Notices list a toll-free phone number and

website where Settlement Class Members can submit inquiries. (Id.). The Notices

are, therefore, adequate and satisfy due process. In re Online DVD, 779 F.3d at 946.

B. The Proposed Method of Notice Provides for the Best Notice Practicable

Under the Circumstances:

Rule 23(c)(2) requires the Court to direct to Class Members the “best notice

practicable” under the circumstances, including “individual notice to all members

who can be identified through reasonable effort.” Silber v. Mabon, 18 F.3d 1449,

1454 (9th Cir. 1994). Individual notice through email, or first class mail in situations

where email is not successful, is “clearly the ‘best notice practicable’” where the

names and email addresses of Class Members are easily ascertainable. See, e.g.

Keirsey v. eBay, Inc., 2014 WL 644697, at *1 (N.D. Cal. Feb. 14, 2014).

Here, KCC will send Email Notice to the 5,029,068 Settlement Class Members

for whom the parties have an email address. (Peak Dec. at ¶15). To the extent that

email addresses are not known, and for those Email Notices that are returned as

undeliverable, KCC will send Post-Card Notice via First Class Mail to all Settlement

Class Members for whom the parties have a physical mailing address. (Id. at ¶16). If

the Post-Card Notice is also returned as undeliverable, KCC will perform a skip-trace

to find the most current address and resend the Post-Card Notice. (Id. at ¶18). This

method of sending notice is anticipated to reach, conservatively, slightly over 70

percent of the Settlement Class. (Id. at ¶19). It is also designed to resemble, to the

extent possible, the method used and approved of by the Ninth Circuit in In re Online

DVD, 779 F.3d at 941; see also Id. at 946 (notice provided by both mail and email

was sufficient under the Constitution and Rule 23(e)). Finally, the parties have also

agreed to publish notice as reflected in Exhibit 5. This Notice will be published on


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the dedicated Settlement Website. To supplement the individual notice effort, a

quarter-page Summary Notice will appear once in the Los Angeles and San Francisco

regional editions of USA Today. (Peak Dec. at ¶¶4, 23).

In sum, the Parties have proposed a comprehensive notice campaign that is

reasonably calculated to provide notice that is consistent with court approved notice

programs in similar matters, and which is consistent with the Federal Judicial

Center’s guidelines concerning appropriate reach. (Peak Dec. at ¶¶27-29). The

Notice program therefore satisfies due process and should be approved.

VII. CONCLUSION:

The parties have negotiated a fair and valuable Settlement that provides

Settlement Class Members with ample financial compensation and important

prospective remedial relief. None of this would have happened but for the use of

class action procedures, dedicated and informed Class Representatives, and

experienced Class Counsel. Plaintiffs respectfully request that the Court certify the

Settlement Class as requested, preliminarily approve the Settlement, direct that

Notice be provided to Settlement Class Members, order the establishment of a QSF,

and set a Final Approval hearing date on November 7, 2016, or as soon thereafter as

the Court’s calendar permits.

Dated: March 14, 2016 Respectfully submitted,

LAW OFFICE OF CHRISTOPHER J. MOROSOFF

By: /s/ Christopher J. Morosoff Christopher J. Morosoff Attorneys for Plaintiffs STEVEN RUSSELL and DONNA CAFFEY


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DECLARATION OF MOROSOFF ISO MOTION FOR PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS




EASTERN DIVISION


Plaintiff,


Defendants.

Case No. 5:15-cv-01143-RSK-SP CLASS ACTION DECLARATION OF CHRISTOPHER J. MOROSOFF IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND UNOPPOSED MOTION FOR CERTIFICATION OF SETTLEMENT CLASS Courtroom: 850 Date: April 11, 2016 Time: 9:00 a.m. Judge: Hon. R. Gary Klausner


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DECLARATION OF MOROSOFF ISO MOTION FOR PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS

DECLARATION OF CHRISTOPHER J. MOROSOFF

I, Christopher J. Morosoff, declare as follows:

1. I am an attorney licensed to practice law before all the courts of the State of

California and before this Court.

2. I am the principal of the Law Office of Christopher J. Morosoff, attorney of

record and co-counsel with Douglas Caiafa, for plaintiffs herein before this

Court in the action Steven Russell, et al. v. Kohl's Department Stores, Inc. et al.

U.S.D.C., C.D. Cal. 5:15-cv-01143-RSK-SPx.

3. I submit this Declaration in Support of Plaintiffs' Motion for Preliminary

Approval of Class Action Settlement and Unopposed Motion for Certification

of Settlement Class.

4. I have been admitted to practice and have actively practiced in California

before both State and Federal Courts, including this one, for over 17 years and

have defended and prosecuted numerous complex, multi-party actions,

including over 25 class actions, and including multi-million dollar wage and

hour and consumer class action litigation and settlements.

5. I have been involved in and certified to act as class counsel in the

representation of Plaintiffs in more than 20 different class action lawsuits in

California and have successfully prosecuted and obtained significant recoveries

in numerous class actions.

6. I support this lawsuit, will vigorously pursue and protect the Plaintiffs and the

Class and believe that I am sufficiently qualified to act as class counsel in this

action.

7. Prior to filing this action, Mr. Caiafa and myself consulted with Plaintiffs,

investigated Defendant’s pricing practices and researched the law applicable to

Plaintiffs’ claims. After doing so, we filed an initial complaint on June 11,

2015, and the operative First Amended Complaint (“FAC”) adding plaintiff

Caffey on August 14, 2015. (ECF No. 14).


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DECLARATION OF MOROSOFF ISO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS

8. Throughout the Litigation, Mr. Caiafa and I engaged in extensive legal

research and analysis and conducted thorough class and merits discovery,

including interrogatories and document requests. In addition, we received,

reviewed and analyzed Defendant’s written discovery responses, as well as the

documents that Defendant produced in the Litigation, including its voluminous

and detailed sales data for tens of thousands of transactions entered into by the

certified Class. We also continuously monitored Defendant’s public filings,

keeping a close eye on Defendant’s financial status and pricing practices.

9. On October 6, 2015, the Court denied Defendant’s Motion to Dismiss. (ECF

No. 32). On December 4, 2015, the Court granted Plaintiffs’ Motion for Class

Certification (ECF No. 52), and on January 15, 2016, after further briefing,

clarified its Order certifying the Class (the “Certification Order”). (ECF No.

57). The Court certified the following injunctive relief class under Fed. R. Civ.

Proc. 23(b)(2):

All persons who, while in the State of California and between June 11,

2011, and the present (the “Class Period”), purchased from Kohl’s one or

more items at any Kohl’s store in the State of California at a discount of

at least 30% off of the stated “original” or “regular” price, and who have

not received a refund or credit for their purchase(s).

Certification Order at *1.

10. Throughout the winter of 2015-2016, the parties engaged in extensive

negotiations concerning the possible structure of a class-wide settlement.

These negotiations led to private mediation, on January 29, 2016, with the

Honorable Eugene F. Lynch (Ret.) at JAMS in San Francisco, California. At

the conclusion of a full day of mediation, the parties reached a tentative

agreement with respect to most of the material terms of the Settlement as

reflected in the Agreement. However, the parties remained at an impasse with


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respect to certain terms and further negotiations with the assistance of Judge

Lynch were required before a full and final agreement was reached on all

material terms. In all, the parties engaged in a full-day in person mediation,

and three (3) further telephonic conferences with Judge Lynch before reaching

final agreement. The parties subsequently negotiated, drafted and executed the

comprehensive Agreement that is currently before the Court. (A true and

correct copy of the Settlement Agreement, dated March 13, 2016

(“Agreement”), is attached hereto as Exhibit A).

11. The parties have modeled the Agreement, to the extent possible, after the

settlement agreement approved by the Ninth Circuit in In re Online DVD-

Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015).

12. The Settlement provides that Defendant will make available a fixed sum of

$6,150,000.00 (the “Monetary Component”), which, subject to Court approval,

will be used to pay for actual Notice and Administration Costs (estimated at

and not to exceed $1,000,000), reasonable Attorneys’ Fees and Costs (not to

exceed 25% of the Class Settlement Amount), and Class Representative

Enhancement Payments (not to exceed $7,500 (each)). The amount remaining

after these payments shall be paid to Settlement Class Members who submit a

valid Claim Form. The required portions of the Monetary Component of the

Agreement shall be deposited into the Qualified Settlement Fund as reflected in

the Agreement.

13. Claimants will receive their share of the Monetary Component as a Gift Card

Credit redeemable for purchases at any Kohl’s store or www.Kohls.com. Each

Gift Card Credit shall be fully transferable, stackable and may be used in

connection with any promotional discounts that are otherwise available with

the use of Gift Cards. Gift Card Credits will have no expiration date and need


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not be used in full at any time. They will maintain a running balance that will

be depleted based only on use until the Claimant’s balance is zero.

14. Plaintiffs and their counsel have also obtained relief beyond the Monetary

Component. As a direct result of the Litigation, Defendant has agreed to

implement changes to its price-comparison advertising policies and agrees that,

as of the date of settlement, and continuing forward, it will not violate Federal

or California law with respect to its price-comparison advertising, including

California’s specific price-comparison advertising statutes. (Ex. A at ¶3.4).

More specifically, Defendant has agreed to enhance and expand programs

intended to promote compliance with legal requirements, including those

requirements set forth in the Federal Trade Commission's guidelines for the use

of price comparisons in advertising (16 C.F.R. 233.1) and the relevant

comparative advertising provisions within California’s UCL and FAL, as well

as California Civil Code Section 1770 (a)(13) (“CLRA”). Defendant’s

compliance program enhancements shall include the development and roll-out

of enhanced pricing compliance computer systems. In addition, commencing

within six (6) months of the Settlement Effective Date and continuing for a

period of at least four (4) years, Defendant will also implement pricing

compliance training targeted at relevant buying office personnel, which shall

be offered on a regular basis, no less than annually, to ensure that new hires are

also appropriately trained on price-comparison advertising requirements.

15. The release language in the Agreement releases both known and unknown

claims, but is limited to the universe of facts, occurrences, transactions and

claims alleged in the FAC.

16. After consulting with and receiving bids from multiple candidates, we have

retained KCC LLC (“KCC”) to serve as Claims Administrator. (Ex. A at ¶1.6).

KCC is a highly experienced class action claims administration company. (See


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Declaration of Carla Peak (“Peak Dec.”) at ¶¶4-11). KCC estimates that all

costs of Notice and Administration will be approximately $950,000, and it has

provided a cap of $1,000,000 for all such costs.

17. On December 4, 2015, the Court certified a Class pursuant to Fed. R. Civ.

Proc. 23(a) and (b)(2). (Certification Order, ECF Nos. 52 and 57).

18. The proposed Settlement here is conditioned upon the Court expanding the

Certification Order, for settlement purposes only, by certifying a Settlement

Class to pursue claims for monetary, as well as injunctive, relief. (Ex. A at

¶2.1-2.4). The Settlement Class definition will remain the same as the

presently certified Class. The Settlement Class will simply be certified to

pursue claims for monetary relief in addition to claims for injunctive relief.

19. I believe that the requested modification should be granted because it is

appropriate to provide monetary relief to Class Members who were exposed to

the Defendant’s pricing practices complained of in the FAC and in order for

Defendant to buy and obtain peace with respect to all consumers who were

likely exposed to such practices, and the Settlement was negotiated with these

principles in mind. Moreover, the Parties seek only to provide monetary relief

to those people who are already members of the certified Class.

20. Plaintiffs and their counsel are unaware of any conflicts or interests

antagonistic to members of the Settlement Class and Mr. Caiafa and myself, as

well as Plaintiffs, have continued to vigorously prosecute this action, including

participating in mediation and additional negotiations related to the Settlement.

21. This case has been contentiously litigated from the start. The Settlement was

reached after contested discovery, motion practice (including resolution of a

motion to dismiss and a motion for class certification), and after protracted

settlement negotiations, including a full-day mediation and repeated follow-up

mediated negotiations with Judge Lynch.


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22. Both parties were represented by experienced class counsel, and both Plaintiffs

participated throughout the settlement process. Moreover, the parties did not

discuss or negotiate Class Counsel’s attorneys’ fees and costs, or Plaintiffs’

proposed Enhancement Payments, until after all other material terms, including

the over $6 million monetary fund for the Settlement Class, were agreed upon.

The Settlement presented to the Court here is the product of non-collusive,

arms-length negotiations.

23. Here, the Class Settlement Amount of over $6 million, combined with the

injunctive relief Plaintiffs obtained, is substantial and falls at least within a

range of possible approval. This is particularly true given the real and

substantial risk that Plaintiffs could have successfully proven liability at trial

yet still recovered nothing because the entitlement to and amount of restitution

in this case are not certain. (See, Pulaski & Middlman, LLC v. Google, Inc.,

802 F.3d 979, 986 (9th Cir. 2015); see also, In re Tobacco Cases II, 2015 WL

5673070, at **5-9 (Cal. App. Sept. 28, 2015) (“Tobacco”).

24. Here, it seems obvious that each Class Member received products with some

value. It could therefore be argued that restitution should be limited to the

difference between price paid and value received, which could conceivably

result in no monetary recovery. Id. While Plaintiffs believe their case is

distinguishable from Tobacco, and that alternative measures of restitution

remain viable in this case, there can be no doubt that Defendant would have

renewed its argument concerning Plaintiffs’ entitlement to restitution if this

case did not settle. Settlement negotiations in this case took place with the

Tobacco decision in mind.

25. As part of the Settlement here, only Claimants will receive Gift Card Credits,

and the amount that they receive will depend on the number of Claims

submitted and the fees and costs awarded by the Court. Assuming that Notice


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and Administration Costs equal KCC’s estimate of $1,000,000, and assuming

arguendo that the Court awards the full amount requested for Attorneys Fees

and Costs ($1,537,500), and Enhancement Payments ($15,000), there would be

$3,597,500 remaining in the Monetary Component for distribution to

Claimants. From that, it is possible to calculate a range of expected benefits to

Settlement Class Members based on estimated claim rates. For example, a 1%

claim rate is expected to provide a benefit of between $42.32 - $51.40 for each

Claimant. A 2% claim rate would provide a benefit of $21.16 - $25.70 per

Claimant. A 3% claim rate would provide a benefit of $14.11 - $17.13. A 5%

claim rate would result in a minimum benefit of $8.46 - $10.28.

26. The Agreement authorizes each named Plaintiff to seek an Enhancement

Payment in an amount to be determined by the Court but not to exceed $7,500

each. The Settlement is not conditioned on the Court’s approval of the full (or

any) amount of an Enhancement Payment, and Plaintiffs’ right to seek

Enhancement Payments was not a condition of their approval of the Settlement.

I declare under penalty of perjury that the forgoing is true and correct.

Executed this 14th day of March, 2016, at Palm Desert, California.

/s/ Christopher J. Morosoff Declarant, Christopher J. Morosoff



Exhibit A


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DOl!glas Caiafa, Es_q. (SBN 107747) DOUGLAS CAIAFA;.,.A Professional Law Corporation 11845 West OlYmpic Jjoulevard, Suite 1245 Los Angeles California 90064 (310) 444-5240 - phone; (310) 312-8260 - fax EmaIl: [email protected]

ChristoJ1her J. Moros9ff .. Es~ (SBN 200465) LA W OFFICE OF Ct1K1STOPHER J. MOROSOFF 77-760 Count\}' Club Drive, Suite G Palm Desert California 92211 (760) 46?-5986 -_phone; (760) 345-1581 - fax Ematl: [email protected]

Attorneys for Plaintiff STEVEN RUSSELL, et al.

Arnold & Porter LLP lames F. Speyer (SBN 133114) J!lmes.s I'eyerltllaporter .com E. Alex Beroiikliim (SBN 220722) [email protected] Ryan Light (SBN'193858) [email protected] 777 South'Figueroa Street, Fo~-Fourth Floor Los Angeles, California 90017-5844 Telephone: 213.243.4000 Fax: 213.243.4199

Attorneys for Defendant KOHL'S DEPARTMENT STORES, INC.



EASTERN DIVISION

21 STEVEN RUSSELL, et al. Case No. 5:15-cv-01143-RSK-SP

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35838707

Plaintiff,

vs.

KOHL'S DEPARTMENT STORES, INC., et aI.,

Defendants.

CLASS ACTION SETTLEMENT AGREEMENT

Courtroom: 850 Judge: Hon. R. Gary Klausner Action Filed: June 11,2015




2 This Class Action Settlement Agreement (the "Agreement") is made by and

3 between the Class Representatives, individually and on behalf of the Settlement

4 Class, and Defendant Kohl's Department Stores, Inc. (collectively, "Kohl's" or the

5 "Settling Defendant"). I The Class Representatives, the Settlement Class, and the

6 Settling Defendant are collectively referred to as the "Parties."

7 This Class Action Settlement Agreement supersedes in its entirety the

8 Settlement Agreement Term Sheet entered into and as exchanged as an executed

9 version on February 16,2016, by and between the Parties.

10 RECITALS

II WHEREAS, on June 11, 2015, Class Representatives Steven Russell and

12 Donna Caffey filed this class action against Kohl's in the United States District Court

13 for the Central District of California;

14 WHEREAS, Class Representatives filed their First Amended Complaint

15 ("FAC") on August 14,2015;

16 WHEREAS, the FAC alleges that Kohl's has deceived consumers by

17 "intlat[ing]" its "original" and/or "regular" prices in order to make its sale prices

18 appear more attractive. The Class Representatives claim that they and other consumers

19 relied on these allegedly "false and deceptive advertising, marketing and pricing

20 schemes" when purchasing products from Kohl's. Plaintiffs sued for monetary and

21 injunctive relief;

22 WHEREAS, on October 6, 2015, the Court denied Kohl's motion to dismiss

23 the FAC;

24 WHEREAS, on December 4,2015, the Court entered an order in which it

25 certified the following for class purposes of injunctive relief:

26 All persons who, while in the State of California, and

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28 I Capitalized terms in this Agreement are defined in Section I, below.

- 1 -CLASS ACTION SETTLEMENT AGREEMENT


between June 11,2011, and the present (the "Class

2 Period"), purchased from Kohl's one or more items at any

3 Kohl's store in the State of Cali fomi a at a discount of at

4 least 30% off of the stated "original" or "regular" price,

5 and who have not received a refund or credit for their

6 purchase( s).

7 WHEREAS, Class Representatives and their counsel have pursued this

8 litigation believing that it is meritorious. They have conducted a thorough

9 investigation into the facts of this case and have diligently pursued an investigation

10 of Kohl's price comparison advertising policies and practices, including, but not

II limited to, (i) researching the applicable law and the potential defenses;

12 (ii) reviewing and analyzing Kohl's public filings and internal documents

13 concerning its advertising, pricing and promotional practices, and reviewing and

14 analyzing Kohl's sales data; (iii) conducting in-store and online reviews to

15 determine and document Kohl's pricing practices; (iv) hiring and consulting with

16 experts; (v) developing arguments for class certification; (vi) briefing numerous

17 motions; (vii) obtaining class certification; (viii) attending an all-day in-person

18 mediation and conducting several follow up telephonic sessions; and (x) preparing

19 for pretrial litigation tasks and trial. Based on their own independent investigation

20 and evaluation, Class Counsel (defined below) is of the opinion that the Settlement

21 is fair, reasonable, and adequate and is in the best interests of the Settlement Class

22 Members as well as future California consumers, in light of all known facts and

23 circumstances, including the risk of significant delay, the defenses asserted by

24 Kohl's, trial risk and appellate risk;

25 WHEREAS, Kohl's denies liability and wrongdoing of any kind associated

26 with the claims alleged and contends that this Litigation is not appropriate for class

27 treatment. Kohl's continues to assert that the Class Representatives will not be able

28 to establish any monetary remedy or injunctive relief. Kohl's continues to assert

- 2-CLASS ACTION SETTLEMENT AGREEMENT


that it has complied with all applicable price comparison advertising laws. Kohl's

2 further states that despite its good faith belief that it is not liable for any of the

3 claims asserted, and despite its good faith belief that certification was not

4 appropriate, Kohl's will not oppose the District Court's certification of the

5 Settlement Class contemplated by this Agreement solely for purposes of

6 effectuating this Settlement. Kohl's agreement to certification of the Settlement

7 Class is without prejudice to Kohl's rights to oppose certification of a class or

8 oppose any other claim (i) in this Litigation, should the Agreement not be approved

9 or implemented for any reason; or (ii) in any other litigation, whether pending in

10 California or elsewhere;

II WHERAS, in the event the Agreement is not approved or is otherwise

12 terminated, this Agreement shall be deemed null and void and be of no further

13 force or effect and may not be used by any Party for any purpose in this Litigation

14 or any other action;

15 WHEREAS, the entry of Final Judgment in this Litigation shall dismiss with

16 prejudice all claims which were or which could have been alleged in the Litigation

17 by Settlement Class Members against Kohl's, with the exception of any individual

18 claims that might be retained by Settlement Class Members who exclude

19 themselves from the Settlement, ifany;

20 WHEREAS, the Parties agree to cooperate and take all reasonable steps

21 necessary and appropriate to obtain preliminary and final approval of this

22 Settlement, to effectuate its terms, and to dismiss this Litigation with prejudice.

23 1. Definitions

24 1.\ The term "Agreement" as used herein means this Class Action

25 Settlement Agreement.

26 1.2 The term "Attorneys' Fees and Costs" as used herein means the

27 attorneys' fees and costs to be requested by Class Counsel subject to Court approval

28 in accordance with the provisions below.

-3-CLASS ACTION SETTLEMENT AGREEMENT


1.3 The term "Claim" as used herein means a Claim submitted by way of a

2 Claim Form in accordance with this Agreement.

3 1.4 The term "Claim Form" as used herein means the Claim Form for the

4 Settlement Class attached hereto as Exhibit I, which is agreed to by the Parties

5 subject to Court approval as the method by which a Class Member may submit a

6 Claim. Only those Settlement Class Members who submit a Claim Form, in the

7 manner set forth in this Agreement, shall be eligible to recover a share ofthe

8 Settlement proceeds.

9 1.5 The term "Claimant" as used herein means any Settlement Class

10 Member who submits a Claim Form.

II 1.6 The term "Claims Administrator" as used herein means KCC LLC, or

12 another entity subsequently selected, which, subject to Court approval, shall

13 perform the duties of, among other things: (i) providing Notice, Claim Forms and

14 Opt-Out Request Forms to Settlement Class Members; (ii) publishing the

15 Publication Notice; (iii) providing notice as required by the Class Action Fairness

16 Act, 28 U.S.C. § 1715; (iv) tracking returned Claim Forms and Opt-Out Requests;

17 (v) notifying the Parties of determinations regarding submitted Claim Forms and

18 Opt-Out Requests consistent with this Agreement; (vi) distributing Gift Card

19 Credits; and (vii) other notice and administration duties in accordance with this

20 Agreement and the Court's orders.

21 I. 7 The term "Class Counsel" as used herein means the following counsel

22 who have appeared on behalf of the Class Representatives: DOUGLAS CAIAFA,

23 A Professional Law Corporation, and LAW OFFICE OF CHRISTOPHER J.

24 MOROSOFF.

25 1.8 The term "Class List" as used herein means the customers, and their

26 email or physical addresses as known, who purchased during the Settlement Class

27 Period from Kohl's one or more items at a discount of at least 30% off of the stated

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"original" or "regular" price, and who have not received a refund or credit for their

2 purchase(s).

3 1.9 The term "Class Representatives" as used herein means Steven Russell

4 and Donna Caffey.

5 1.10 The term "Class Representative Enhancement Payment" as used herein

6 means the amount Class Counsel shall request be paid as set forth below.

7 1.11 The term .. Email Notice" as used herein means a document

8 substantially in the form of attached hereto as Exhibit 3, which has been agreed to

9 by the Parties subject to Court approval and which will be sent to potential

10 Settlement Class Members as an email where an email exists on the Class List.

II 1.12 The term "Final Judgment" as used herein refers to the Final Judgment

12 and Order approving the Settlement and dismissing the Litigation with prejudice as

13 against Kohl's, which this Settlement contemplates will be entered and approved by

14 the District Court.

15 1.13 The term "Gift Card Credit" as used herein means a credit

16 redeemable for purchases at any Kohl's store or www.Kohls.com. Each Gift Card

17 Credit shall be fully transferable, stackable and may be used in connection with any

18 promotional discount(s) that are otherwise available with the use of Gift Cards.

19 Gift Card Credits have no expiration date and need not be used in full at any time.

20 They will maintain a running balance that is depleted based on use until the balance

21 is zero, but are not redeemable for cash.

22 1.14 The term "Litigation" means the underlying litigation between the

23 Parties as identified in the above caption.

24 1.15 The term "Monetary Component" as used herein means $6,150,000 to

25 be made available by Kohl's pursuant to this Settlement, which represents Kohl's

26 total monetary liability under this Agreement.

27 1.16 The term "Notice" as used herein means a document substantially in

28 the form of the Notice of Proposed Class Action Settlement Between Plaintiff and



Kohl's attached hereto as Exhibit 2, which has been agreed to by the Parties subject

2 to Court approval and which the Claims Administrator will make available through

3 the Settlement Website, explaining the terms of the Settlement and the Claims, Opt-

4 Out, and objection processes.

5 1.17 The term "Notice and Administration Costs" as used herein means the

6 costs to send notice and administer the Settlement as contemplated by this

7 Agreement.

8 1.18 The term "Opt-Out Request Form" as used herein means a form that

9 will be available for download on the Settlement Website, which can be used by

10 Settlement Class Members to Request to Opt Out. Settlement Class Members are

II not required to use the Opt-Out Request Form in order to communicate their desire

12 to opt out of the Settlement.

13 1.19 The term "Parties" as used herein means the Class Representatives, the

14 Settlement Class, and Settling Defendant.

15 1.20 The term "Postcard Notice" as used herein means a document

16 substantially in' the form attached hereto as Exhibit 4, which has been agreed to by

17 the Parties subject to Court approval and which will be sent to potential Settlement

18 Class Members in the U.S. mail where a physical address exists on the Class List

19 but an email address does not.

20 1.2) The term "Publication Notice" as used herein means a document

21 substantially in the form attached hereto as Exhibit 5, which has been agreed to by

22 the Parties subject to Court approval.

23 ) .22 The terms "Qualified Settlement Fund" or "QSF" as used herein means

24 the Qualified Settlement Fund to be set up in accordance with the terms below.

25 ) .23 The term "Releasing Settlement Class Members" as used herein means

26 the Class Representative and all Settlement Class Members, other than those who

27 submit Requests to Opt Out.

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1.24 The term "Requests to Opt Out" as used herein means requests sent by

2 any Settlement Class member not wishing to remain in the Settlement Class.

3 1.25 The term "Settlement" as used herein means the compromise and

4 settlement of the Litigation as contemplated by this Agreement.

5 1.26 The term "Settlement Class" as used herein means all persons who,

6 while in the State of California, and between June I I, 201 I, and the present (the

7 "Class Period"), purchased from Kohl's one or more items at a discount of at least

8 30% off of the stated "original" or "regular" price, and who have not received a

9 refund or credit for their purchase(s). Excluded from the Settlement Class are

10 Defendant, as well as its officers, employees, agents or affiliates, and any judge who

II presides over this action, as well as all past and present employees, officers and

12 directors of Kohl's.

13 1.27 The term "Settlement Class Member Released Claims" as used herein

14 means the claims, rights, penalties, demands, damages, debts, accounts, duties, costs

IS and expenses (other than those costs and expenses required to be paid pursuant to

16 this Settlement Agreement), liens, charges, complaints, causes of action,

17 obligations, or liabilities that are released, acquitted and discharged as described

18 below.

19 1.28 The term "Settlement Class Members," as used herein means the Class

20 Representatives and all members ofthe Settlement Class.

21 1.29 The term "Settlement Class Period" as used herein means the period of

22 time between June I 1,20 I I, and the present.

23 1.30 The term "Settlement Effective Date" as used herein means the first

24 day fol1owing the last of the following occurrences:

25 1.30. I The date the time to appeal or seek permission to appeal or seek

26 other judicial review of the entry of the Final Judgment approving the Settlement and

27 dismissing this Litigation with prejudice as to Kohl's has expired with no appeal or

28 other judicial review having been taken or sought; or



1.30.2 If an appeal or other judicial review has been taken or

2 sought, the latest of: (i) the date the Final Judgment is finally affirmed by an

3 appellate court with no possibility of subsequent appeal or other judicial review

4 therefrom; or (ii) the date the appeal(s) or other judicial review therefrom are finally

5 dismissed with no possibility of subsequent appeal or other judicial review; or (iii) if

6 remanded to the District Court following an appeal or other review, the date the Final

7 Judgment is entered by the District Court after remand and the time to appeal or

8 seek permission to appeal or seek other judicial review of the entry of that Final

9 Judgment has expired with no further appeal or other judicial review having been

10 taken or sought. If further appeal is sought after a remand, the time periods in this

II sub-section shall apply.

12 1.31 The term "Settlement Website" as used herein means an Internet

13 website maintained by the Claims Administrator containing the Notice, Claim Form,

14 Opt-Out Request Form, Settlement Class Member information about their individual

15 allocation of the Settlement, instructions on how to submit a Claim Form and/or

16 additional receipts providing evidence of additional qualifying purchases, and where

17 Gift Card Credits may be obtained.

18 1.32 The term "Verified Claims" as used herein means those Claims which

19 are approved by the Claims Administrator for payment after the deadline for audits

20 allowable has expired, or, if an audit or objection is made, after all audits or

21 objections have been resolved in accordance with the provisions below.

22 2. Settlement Class

23 2.1 The Parties agree that, for purposes ofthis Agreement only, Class

24 Representatives shall request, and Kohl's will not oppose, certification of the

25 Settlement Class (defined above) pursuant to Federal Rule of Civil Procedure

26 23(b)(3), to which Kohl's will provide settlement consideration and from which

27 Kohl's will obtain a release of claims, subject to the Court's preliminary approval of

28

- 8-CLASS ACTION SETILEMENT AGREEMENT


this Agreement, the provision of Notice to members of the Settlement Class, and the

2 Court' s final approval of the notice provided and this Agreement.

3 2.2 The Parties agree that, for purposes of this Agreement only, Class

4 Representatives shall request, and Kohl's will not oppose, the Court's appointment of

5 Class Counsel as counsel for the Settlement Class, and the appointment ofthe Class

6 Representatives as representatives of the Settlement Class.

7 2.3 The Parties further agree that, for purposes ofthis Agreement only, the

8 definition of the proposed class in the Litigation is amended to be the same as the

9 Settlement Class, and that the Court's orders preliminarily and finally approving the

10 Agreement shall so amend the operative complaint in the Litigation. The Parties also

II agree that the operative complaint in this Litigation can and shall be further amended

12 as necessary and/or as required by the Court to effectuate the terms of this

13 Agreement.

14 2.4 The Settlement is conditioned on the Court certifying the Settlement

15 Class. The Parties and Class Counsel agree that, if approved, certification of the

16 Settlement Class is a conditional certification for settlement purposes only, and if for

17 any reason the District Court does not grant final approval of the Settlement, or if

18 final approval is not granted following appeal of any order by the District Court, the

19 certification ofthe Settlement Class shall be deemed null and void, and each Party

20 shall retain all their respective rights as they existed prior to the execution of the

21 Settlement Agreement and the Settlement Agreement Term Sheet.

22 3. Settlement Consideration

23 Monetary Component for Class

24 3.1 Subject to the other terms and conditions of this Agreement, and

25 subject to Court approval, Kohl's will contribute $6,150,000 for the Monetary

26 Component of the settlement. This Monetary Component will be comprised of the

27 following:

28



3.1.1 Following approval of a final settlement agreement by the

2 Court and after the deductions described in Paragraphs 3.1.2 through 3. 1.4 below, the

3 remaining value of the Monetary Component will be distributed on a pro rata basis in

4 the form of Kohl's Gift Card Credits to members of the Settlement Class who submit

5 a valid Claim. The value of each Gift Card Credit shall be determined by dividing the

6 remaining value ofthe Monetary Component by the number of Class Members who

7 submit a valid Claim.

8 3.1.2 The actual Notice and Administration Costs incurred in

9 accordance with this Agreement, up to $1,000,000 ("Administrative Costs Portion").

10 The Administrative Costs Portion shall be deposited by Kohl's into the QSF for

II purposes of paying administrative costs within a reasonable time period following

12 preliminary approval of the Settlement by the District Court.

13 3.1.3 Class Counsel may apply to the Court for an award of

14 reasonable Attorneys' Fees and Costs not to exceed 25% of the Monetary Component

15 of the settlement. Kohl's will not oppose an application for a reasonable award of

16 Attorneys' Fees and Costs sought in accordance with this Agreement. In the event

17 that the Court does not approve the award of Attorneys' Fees and Costs requested by

18 Class Counsel, or if the Court awards Attorneys' Fees and Costs in an amount less

19 than that requested by Class Counsel, the amount that is not awarded will be available

20 for distribution to the Class, and the Court's decision shall not affect the validity and

21 enforceability of the Settlement and shall not be a basis for anyone to seek to void the

22 Settlement or for rendering the entire Settlement null, void, or unenforceable. Class

23 Counsel retain their right to appeal any decision by the Court regarding the Court's

24 award of Attorneys' Fees and Costs.

25 3.1.4 Class Counsel intends to seek $7,500 for the Class

26 Representatives as the Class Representative Enhancement Payment. Kohl's will not

27 oppose the application. Any request made by Class Counsel in accordance with this

28 Section is without prejudice to the Class Representative's right to fi Ie a Claim as a



Settlement Class Member. In the event that the Court does not approve the Class

2 Representative Enhancement Payment, or the Court awards an amount that is less

3 than sought, the amount that is not awarded will be available for distribution to the

4 Class and shall not affect the validity and enforceability of the Settlement and shall

5 not be a basis for anyone to seek to void the Settlement or for rendering the entire

6 Settlement null, void, or unenforceable.

7 3.2 The payments identified in Paragraphs 3.1.1 through 3.1.4 of this

8 Agreement shall be paid solely from the Monetary Component. The $6,150,000

9 Monetary Component as described above shall be the total amount owed by Kohl's in

10 settlement. Kohl's will not be obligated to pay any additional sums, and shall have

II no other monetary liability for any costs or expenses related to this Settlement,

12 including without limitation the costs of administering the Settlement, preparation of

13 Notice, oversight and reporting ofthe Notice program, establishing the appropriate

14 website, any escrow or QSF expenses, tax filing and distributions. All such costs

15 shall be included within and paid from the Administrative Costs Portion of the

16 Monetary Component. For clarity, all costs of the QSF, as described in Paragraphs

17 9.1 through 9.8 ofthis Agreement, shall be paid from said Monetary Component.

18 3.3 Each Claimant who receives any value paid in accordance with this

19 Agreement is responsible for any taxes associated with the monies received by that

20 recipient. If required by applicable law, the QSF shall issue 1099s to Class Counsel

21 (for payments of Attorneys' Fees and Costs awarded by the Court) and to the Class

22 Representative for any Class Representative Enhancement Payment authorized by the

23 Court.

24 Injunctive Relief

25 3.4 As a direct result of this Litigation, Kohl's agrees that its comparative

26 advertising and pricing practices, as of the date of this Settlement Agreement, and

27 continuing forward, will not violate Federal or California law, including California's

28 specific price-comparison advertising statutes. As a direct result of this Litigation,



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Kohl's shall continue to enhance and expand programs intended to promote pricing

compliance with legal requirements, including those requirements set forth in the

Federal Trade Commission's guidelines for the use of price comparisons in

advertising (16 C.F .R. 233.1) and the relevant comparative advertising provisions

within California's Business and Professions Code (Section 1750 I) and California

Civil Code Section 1770 (a)(13). More specifically, commencing within six (6)

months, Kohl's compliance program enhancements shall include the development

and roll-out of enhanced pricing compliance computer systems. In addition,

commencing within six (6) months and continuing for a period of at least four (4)

years from the date of this Settlement Agreement Kohl's will also implement pricing

compliance training targeted at relevant buying office personnel, which shall be

offered on a regular basis, no less than annually, to ensure that new hires are also

appropriately trained on price-comparison advertising requirements.

4. Notice to the Class

4.1 Given the expected size ofthe Settlement Class, the Parties agree that

direct notice via email is the best practicable notice for those Settlement Class

Members for which such information exists. Where only a mailing address is

available for a Settlement Class member, or for all Settlement Class members whose

Email Notice was not deliverable and a physical address is known, a Postcard Notice

shall be mailed by first class mail. Recognizing that there are Settlement Class

Members for whom neither email nor physical mailing addresses are available, notice

by print publication as agreed to by the Parties and authorized by the Court will be

used to supplement the Email and Postcard notices. Class Counsel agrees to use their

best efforts to obtain preliminary approval of a notice plan to achieve the best

practicable notice consistent with this section.

4.1.1 The Email and Postcard notices shall advise Settlement Class

Members of the deadline for SUbmitting Claim Forms, their right to opt out of the

Settlement or to object to the Settlement, the process by which such opt-outs or



objections must be made, and the date set by the District Court for a hearing on final

2 approval of the Settlement. Subject to Court approval, the Email and Postcard

3 Notices shall be substantially in the form attached hereto as Exhibits 3 and 4,

4 respectively.

5 4.1.2 Because some of the sales data during the Settlement Class

6 Period do not have corresponding customer names or addresses, the Parties agree that

7 notice by pUblication would be the best practicable notice for the balance of the

8 Settlement Class. This "Publication Notice" shall include instructions as to how to

9 access the Settlement Website and how to request a Claim Form and instructions on

10 how to submit it. The Publication Notice shall also advise Settlement Class Members

II of their right to opt out of the Settlement or to object to the Settlement, the process

12 and deadlines by which such opt-outs or objection must be made and the date set by

13 the Court for a hearing on final approval of the Settlement. Subject to Court

14 approval, the Publication Notice shall be substantially in the form attached hereto as

15 Exhibit 5.

16 4.2 Kohl's will provide the Class List to the Claims Administrator in

17 sufficient time for Notice to go out. Kohl's and Plaintiff agree that all Class List

18 information shall be treated as highly confidential proprietary information, and that

19 the contents of the Class List shall not be shared with third parties other than the

20 Claims Administrator and that the Claims Administrator shall be required to preserve

21 the confidentiality of the Class List.

22 4.3 The Email Notice shall be sent to Settlement Class Members within

23 thirty (30) days following the Court's preliminary approval of the Settlement,

24 provided that any challenges or other barriers to the use of Email Notice have been

25 resolved. The Postcard Notice shall be sent to Settlement Class Members within

26 fifty (50) days following the Court's preliminary approval of the Settlement. The

27 Publication Notice shall be published on the soonest practicable date after preliminary

28



approval, but in no event shall it commence more than ten (10) days after the

2 Postcard Notice is sent.

3 4.4 The Email and Postcard Notices, Claim Form, Opt-Out Request

4 Form, FAC, Settlement Agreement and other materials as agreed to by the Parties

5 shall be available on the Settlement Website. The Claims Administrator shall also

6 establish a toll-free phone line and an email box to respond to inquiries from

7 Settlement Class Members. The Settlement Website address, toll-free phone number,

8 and email box address will be included in all notices to the class.

9 5. Submission of Claims

10 5.1 In order to be eligible to receive a share ofthe Monetary Component, a

II Settlement Class Member must submit a completed Claim Form within ninety (90)

12 days from the date Notice is disseminated. Only those Settlement Class Members

I3 who submit an approved Claim Form shall be eligible to receive a Gift Card Credit.

14 In order for a Claim Form to be considered timely, the Claims Administrator must

15 receive the completed Claim Form by 11 :59 p.m. Pacific Time on the ninetieth (90th)

16 day from the date Notice is disseminated. These deadlines shall be set forth clearly in

17 the Notice.

18 5.2 In order for a Claim Form to be approved, the Claimant must meet the

19 following criteria:

20 5.2.1 Claim Forms shall be executed under penalty of perjury, but

21 need not be notarized.

22 5.2.2 Claimants will be directed to submit their Claim Forms

23 electronically on the Settlement Website, but also may submit them by regular mail.

24 5.3 Claim Forms and Opt-Out Request Forms shall be available on the

25 Settlement Website. The Email Notice, the Postcard Notice and Publication Notice

26 shall direct Settlement Class Members to the Settlement Website which shall contain

27 the Claim Forms, Opt-Out Request Form and other documentation concerning the

28 Litigation and Settlement.



5.4 Submission of more than one Claim Form, or submission of an

2 incomplete Claim Form, may render the Claim Form submitted by that Settlement

3 Class Member invalid. The Claims Administrator shall send to all Settlement Class

4 Members who have submitted an incomplete or duplicative Claim Form a notice of

5 deficiency with instructions on how to cure the deficiency. Settlement Class

6 Members will have thirty (30) days to cure deficiencies .

7 5.5 Within twenty (20) days after the deadline to submit Claim Forms,

8 the Claims Administrator shall provide a spreadsheet to Class Counsel and to

9 Kohl's that contains sufficient information for the Parties to determine the

10 number of approved Claims made by the members of the Settlement Class . The

II Claims Administrator shall also provide information regarding rejected Claims,

12 as well as the reasons why each Claim was rejected. The Claims Administrator

13 shall retain the originals of all Claim Forms (including any envelopes with the

14 postmarks) received from Claimants, and shall make copies or the originals

15 available to Kohl's or Class Counsel within three (3) business days upon

16 request.

17 5.6 Class Counsel and Kohl's shall each have the right to audit the

18 information provided in any Claim Form, and to challenge the Claims

19 Administrator's determinations regarding approval or denial of each Claim Form, in

20 accordance with the following procedures:

21 5.6.1 Within fourteen (14) days of having received the

22 information contemplated by Paragraph 5.5 of this Agreement, Class Counsel and

23 Kohl's counsel shall meet and confer regarding any issues that either Class Counsel

24 or Kohl's believes need to be raised with the Claims Administrator. Class Counsel

25 and Kohl's agree to use their best efforts to resolve any disputes. If Class Counsel

26 and Kohl's cannot resolve these issues within twenty-eight (28) days of having

27 received the information contemplated by Paragraph 5.5 ofthis Agreement, then

28 Class Counselor Kohl's may, within five (5) days of the expiration of the above



twenty-eight (28) day period, provide written notice of their intent to audit the Claims

2 Administrator's determinations with respect to a particular Claim or Claims.

3 5.6.2 If the audit is filed with the Claims Administrator, the

4 decision of the Claims Administrator may be appealed, within fourteen (14) days of

5 receipt of the Claims Administrator's decision, to the District Court. All decisions by

6 the District Court, or such person as the Court may direct, regarding audits shall be

7 made expeditiously and are binding, final decisions which shall not be subject to

8 appeal by any party. Ifa decision by the Claims Administrators is not presented to

9 the District Court or to such person as the Court may direct, within fourteen (14) days

10 of issuance, the decision of the Claims Administrator becomes a binding, final

II decision not subject to further appeal.

12 5.6.3 Class Counsel and Kohl's may invoke their rights under these

13 paragraphs by providing written notice to each other and to the Claims

14 Administrator. The notice shall identifY the Claims that are the subject of the audit,

15 and may be accompanied by supporting papers of no more than two (2) pages,

16 double-spaced, 12-point type (excluding exhibits).

17 5.6.4 Within fourteen (14) days of receipt of the notice and

18 supporting papers, the non-auditing party may submit a written response of no more

19 than two (2) pages, double-spaced, 12-point type (excluding exhibits).

20 5.6.5 Given the cost ofthe audit process relative to the size ofthe

21 individual claims, the Parties shall only appeal an audit decision to the Court, or to

22 such person as the Court may direct, if the audit decision affects at least 10,000

23 claims. Audit decisions by the Claims Administrator affecting less than 10,000

24 claims shall be final and non-appealable.

25 5.6.6 Notice of audits, any paperwork submitted in support of, or in

26 response to, any audit, and the decisions by the Claims Administrator may be served

27 bye-mail or United States Mail.

28



6. Opt-Out Process

2 6.1 A Settlement Class Member who wishes to exclude himself or herself

3 from this Settlement and from the release of claims pursuant to this Settlement shall

4 submit a Request to Opt Out. For a Request to Opt Out to be accepted, it must be

5 timely and valid. To be timely, it must be postmarked by the date which is ninety

6 (90) days after the last date Notice is disseminated. To be valid, the Request to Opt

7 Out must be signed and dated. Opt-Out Request Forms, substantially similar to the

8 attached Exhibit 6, shall be available for download from the Settlement Website and,

9 upon request by a Settlement Class Member, made available by the Claims

10 Administrator through First Class Mail.

II 6.2 A Settlement Class Member who submits a Request to Opt Out is not

12 eligible to recover a share of the Class Settlement Amount, except that if any

13 Settlement Class Member submits both a Request to Opt Out and a Claim Form, the

14 Request to Opt Out will be rejected, the Settlement Class Member will be treated as if

15 they are still a member of the class, and the Claim Form will be treated as valid and

16 processed.

17 6.3 The Claims Administrator shall maintain a list of persons who have

18 excluded themselves and shall provide such list to the Parties upon request. The

19 Claims Administrator shall retain the originals of all Requests to Opt Out (including

20 the envelopes with the postmarks) received from Settlement Class Members, and

21 shall make copies or the originals available to Kohl's or Class Counsel within three

22 (3) business days upon request.

23 6.4 Kohl's, at its sole discretion, has the right to terminate this Settlement

24 if more than 2% of the Settlement Class opt out, with the class size based on the

25 estimated number of California purchasers within the Settlement Class as provided

26 to Class Counsel during the Settlement negotiations.

27

28



7. Objection Process

2 7.1 A Settlement Class Member who wishes to object to the Settlement

3 must notity the District Court of his or her objection, in writing, within ninety (90)

4 days of the last date Notice is disseminated.

5 7.2 To be considered valid, an objection must be in writing, must

6 include the objector's name and address, and must include the basis for the objection

7 (including why the objector believes the Settlement is not in the best interests of the

8 Settlement Class), along with any and all documents that support the objection. The

9 objection must also indicate whether or not the objector intends to appear at the

10 hearing on the motion for final approval of the Settlement. The objection must be

II filed with the Court on or before the deadline. Additional instructions regarding how

12 to object to the Settlement are contained in the Notices.

13 7.3 Settlement Class Members who do not file a timely written objection in

14 accordance with the procedures set forth in this Agreement and the Notices shaH be

15 deemed to have waived any objections to the Settlement and shall forever be

16 foreclosed from making any objection (whether by appeal or otherwise) to the

17 Settlement, or any aspect of the Settlement, including, without limitation, the fairness,

18 reasonableness, or adequacy of the Settlement, or any award of Attorneys' Fees and

19 Costs, reimbursement of costs and expenses and/or the Class ~epresentative

20 Enhancement Payment.

8. Distribution Process 21

22 8.1 The Class Settlement Amount shall be funded through the QSF in

23 accordance with the provisions below. The timing of the payments by Kohl's to the

24 QSF shall be as follows:

25 8.1 .1 Within ten (10) business days following the date on which the

26 District Court enters an order granting Preliminary Approval of the Settlement, or

27 within ten (10) business days ofthe date on which the District Court enters an order

28 approving the QSF, whichever is later, Kohl's shall transfer to the QSF 75% of

- 18 -CLASS ACTION SETfLEMENT AGREEMENT


the Administrative Costs Portion of the Monetary Component of the Settlement.

2 Kohl's shall continue to periodically fund the QSF to cover additional Notice

3 and Administration Costs, if required, up to the amount provided in Paragraph

4 3.1.2. In the event that the Settlement Effective Date does not occur, any

5 amounts actually used by the Claim Administrator for notice and administration

6 shall not be refundable to Kohl's. If, however, Kohl's has paid into the QSF

7 monies for Notice and Administration, those amounts not used by the Claims

8 Administrator shall be refunded to Kohl's.

9 8.1.2 Within ten (IO) business days following the

10 Settlement Effective Date, Kohl's shall transfer to the QSF amounts sufficient

I I to cover that portion of the Monetary Component comprising the Attorneys'

12 Fees and Costs and Class Representative Enhancement Payment awarded by the

13 Court.

14 8.1.3 With the assistance of the Claims Administrator and to keep the

15 Administrative Costs Portion of the Monetary Component as low as possible, the

16 Parties shall agree on a reasonable and cost effective process to provide Gift Card

17 Credits to Claimants.

18 8.2 Distributions from the QSF shall be handled as follows:

19 8.2.1 Other than for purposes of paying invoices submitted by the

20 Claims Administrator, the QSF shall not distribute any payments required under this

2 I Agreement until after the Settlement Effective Date has occurred.

22 8.2.2 Attorneys' Fees and Costs awarded by the Court and the Class

23 Representative Enhancement Payment awarded by the Court shall be paid to the

24 individuals or entities specified by the Court.

25 9. Qualified Settlement Fund

26 9.1 At the times required by this Agreement, Kohl's shall transfer to a

27 trustee selected jointly by Class Counsel and Kohl's (the "Trustee") the required

28 portions of the Class Settlement Amount to be held in the QSF, which shall be a



separate trust organized and operated as a qualified settlement fund as described in

2 Treasury Regulation § 1.468B-I. Class Counsel and Kohl's jointly shall cause the

3 Trustee and the Claims Administrator, as applicable, to take such steps as

4 necessary to qualify the QSF as a qualified settlement fund under § 468B of the

5 Internal Revenue Code, 26 U.S.C. § 468B, and the regulations promulgated

6 pursuant thereto. Kohl's shall be considered the "transferor" within the meaning

7 of Treasury Regulation § 1.468B-I(d)(1). The Claims Administrator shall be the

8 "administrator" within the meaning of Treasury Regulation § 1.468B-2(k)(3). The

9 Parties shall cooperate in securing an order of the Court to establish the QSF in

10 accordance with the terms hereofin conjunction with its preliminary Approval of the

II Settlement and Notice.

12 9.2 The Court shall retain jurisdiction over the administration of the QSF.

13 Kohl's shall supply to the Claims Administrator the statement described in Treasury

14 Regulation § 1.468B-3(e)(2) no later than February 15 ofthe year following each

15 calendar year in which Kohl's makes a transfer to the QSF. In accordance with

16 Treasury Regulation § 1.468B-3( c), the transfers to the QSF will satisfy the "all

17 events test" and the "economic performance" requirement of § 1.461(h)(I) of the

18 Internal Revenue Code, and Treasury Regulation 1.461-I(a)(2). Accordingly,

19 Kohl's shall not include the income of the QSF in its income. Rather, in accordance

20 with Treasury Regulation § 1.468B-2, the QSF shall be taxed on its modified gross

21 income, excluding the sums transferred to it, and shall make payment of resulting

22 taxes from its own funds. In computing the QSF's modified gross income,

23 deductions shall be allowed for its administrative costs and other deductible expenses

24 incurred in connection with the operation of the QSF as permissible pursuant to

25 Treasury Regulation § 1.468B-2(b), including, without limitation, state and local

26 taxes, and legal, accounting, and other fees relating to the operation of the QSF.

27 9.3 Upon establishment of the QSF, the Trustee or Claims Administrator,

28 as appropriate, shall apply for an employer identification number for the QSF



utilizing Internal Revenue Service Form SS-4 and in accordance with Treasury

2 Regulation § 1.468B-2(k)( 4).

3 9.4 Ifrequested by either Kohl's or the Claims Administrator, the Claims

4 Administrator, the Trustee and Kohl's shall fully cooperate in filing a relation-back

5 election under Treasury Regulation § 1.468B-I U )(2) to treat the QSF as coming

6 into existence as a settlement fund as of the earliest possible date.

7 9.5 Following its deposits as described in this Agreement, Kohl's shall

8 have no responsibility, financial obligation, or liability whatsoever with respect to

9 the notifications to the Class required hereunder, the processing of Claims and Opt-

10 Out Requests, the allowance or disallowance of claims by Claimants, payments to

II Class Counsel, investment ofQSF funds, payment of federal, state, and local

12 income, employment, unemployment, excise, and other taxes imposed on the QSF

13 or its disbursements, or payment of the administrative, legal, accounting, or other

14 costs occasioned by the use or administration ofthe QSF, since it is agreed that such

15 deposits shall fully discharge Kohl's obligations to Claimants and Class Counsel

16 and for expenses of administration in respect to the disposition of the Monetary

17 Component hereunder. Rather, the Claims Administrator shall have sole authority

18 and responsibility for the administration of such funds and income thereon,

19 disbursement to Claimants and Class Counsel, and payment of taxes and

20 administrative costs in accordance with the provisions hereof, subject only to the

21 rights of Kohl's or Class Counsel to audit determinations of the Claims

22 Administrator in accordance with this Agreement or to seek redress for any breach

23 of the terms hereof.

24 9.6 The Claims Administrator shall cause to be timely and properly filed,

25 on behalf ofthe QSF, all required federal, state, and local tax returns, information

26 returns and tax withholdings statements in accordance with the provisions of

27 Treasury Regulation § 1.468B-2(k) and Treasury Regulation § 1.468B-2(1 )(2), as

28 well as the timely and proper payments of any federal, state, or local taxes



(including estimated taxes) and associated tax-related penalties and interest for

2 which the QSF may be liable. The Claims Administrator shall also be responsible

3 for the timely and proper response to any questions from, or audits regarding, such

4 taxes by the IRS or any state or local tax authority, as well as compliance with any

5 other tax-related requirements. The Claims Administrator may, at its own expense,

6 retain legal counsel and an independent, certified public accountant to consult with

7 and advise the Claims Administrator or the Trustee with respect to the preparation

8 and filing of such materials and the federal, state and local tax compliance ofthe

9 QSF. Either Kohl's or the Claims Administrator, independently or jointly, may, but

\0 are not required to, apply to the Internal Revenue Service and/or any applicable

II state taxing authority for an advance ruling as to any issue pertinent to the

12 qualification of the QSF under Internal Revenue Code § 468B and Treasury

13 Regulations promulgated thereunder, its tax status under applicable state law, and/or

14 its tax payment, reporting and withholding duties. Settlement Class Members shall

15 be responsible for payment of appropriate federal, state, and local income taxes on

16 any claim paid out pursuant to this Agreement. If, in any such ruling or otherwise,

17 it is determined that Kohl's has any responsibility whatsoever for payment of any

18 federal, state or local tax on any claim paid out pursuant to this Agreement, then

19 Kohl's shall have the right to terminate this Agreement. The Parties agree that no

20 portion of any distributions from the QSF to the Settlement Class Members is made

21 in satisfaction of any excluded liability as described in Treasury Regulation

22 § 1.468B- I (g) related to Qualified Settlement Funds. Notwithstanding any effort, or

23 failure, of the Parties, the Trustee or the Claims Administrator to treat the QSF as a

24 qualified settlement fund within the meaning of Treasury Regulation § I .468B- I,

25 any additional tax liability, interest, or penalties incurred by Kohl's resulting from

26 income earned by the QSF shall be reimbursed from the QSF in the amount of such

27 additional tax liability, interest or penalties upon Kohl's written request to the

28 Claims Administrator.



9.7 The taxable year of the QSF shall be the calendar year in accordance

2 with Treasury Regulation § 1.468B-20}. The QSF shall utilize the accrual method

3 of accounting within the meaning of § 446 (c) ofthe Internal Revenue Code.

4 9.8 The Claims Administrator may amend, either in whole or in part,

5 any administrative provision of this Section or the trust instrument through which

6 the QSF is established to maintain the qualification of the QSF pursuant to the

7 above described authorities provided that the rights and liabilities of the Parties

8 hereto and the Class are not altered thereby in any material respect.

9 10. Comprehensive Waiver, Release, and Dismissal

10 10.1 Settlement Class Member Released Claims - Released by Settlement

II Class Members:

12 10.1.1 Subject to final approval by the Court of the Settlement and

13 other than for those payments, costs and expenses required to be paid pursuant to this

14 Agreement, and for good and valuable consideration set forth herein, the receipt and

15 sufficiency of which is hereby acknowledged, all Releasing Settlement Class

16 Members do hereby irrevocably release, acquit, and forever discharge Kohl's (and all

17 affiliates, parents or subsidiaries, officers, employees, agents, and attorneys) against

18 any and all claims, rights, penalties, demands, damages, costs and expenses

19 (including attorneys' fees and costs, other than those costs and expenses required to

20 be paid pursuant to this Agreement), causes of action, or liability of any kind arising

21 out of or in connection with all ofthe claims or causes of action that were made or

22 could have been made in this Litigation or in any other forum relating, in whole or in

23 part, to the alleged acts, omissions, facts, matters, transactions, circumstances

24 asserted by in the Litigation, including assertions that Kohl's improperly inflated or

25 misstated its original and/or regular prices in order to make its sale prices appear

26 more attractive and thereby harmed consumers.

27 10.1.2 The Settlement Class Member Released Claims includes a

28 release of all claims for Attorneys' Fees and Costs incurred by Releasing Settlement



Class Members or by Class Counselor any other attorney in connection with the

2 Litigation and this Settlement.

3 10.1.3 Releasing Settlement Class Members understand and agree that

4 the release of the Settlement Class Member Released Claims is a full and final

5 general release applying to both those Settlement Class Member Released Claims that

6 are currently known, anticipated, or disclosed to Releasing Settlement Class Members

7 and to all those Settlement Class Member Released Claims that are presently

8 unknown, unanticipated, or undisclosed to any Releasing Settlement Class Members

9 arising out ofthe alleged facts, circumstances, and occurrences underlying: (i) the

10 claims set forth in the Litigation; or (ii) Kohl's conduct with respect to the Litigation.

II Releasing Settlement Class Members acknowledge that the facts could be different

12 than they now know or suspect to be the case, but they are nonetheless releasing all

13 such unknown claims. In exchange for the good and valuable consideration set forth

14 herein, all Releasing Settlement Class Members further waive any and all rights or

15 benefits that they as individuals or the class may now have as a result of the alleged

16 facts, circumstances, and occurrences underlying the claims set forth in the Litigation

17 under the terms of § 1542 of the California Civil Code (or similar statute in effect in

18 any other jurisdiction), which provides as follows:

19 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

20 WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

21 EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING

22 THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST

23 HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT

24 WITH DEBTOR.

25 10.2 Kohl's Released Claims - Release by Kohl's:

26 10.2.1 Subject to final approval by the Court of the Settlement, and for

27 good and valuable consideration set forth herein, the receipt and sufficiency of which

28 is hereby acknowledged, Kohl's does hereby irrevocably release, acquit, and forever



discharge all Releasing Settlement Class Members of and from any and all claims,

2 rights, penalties, demands, damages, debts, accounts, duties, attorneys' fees, costs and

3 expenses (other than those costs and expenses required to be paid pursuant to this

4 Agreement), liens, charges, complaints, causes of action, obligations, or liability that

5 could have been asserted but were not asserted as a compulsory counterclaim against

6 Releasing Settlement Class Members in this Litigation.

7 10.2.2 Kohl's understands and agrees that the release of the Kohl's

8 Released Claims is a full and final general release applying to both those Kohl's

9 Released Claims that are currently known, anticipated, or disclosed to Kohl's and to

10 all those Kohl's Released Claims that are presently unknown, unanticipated, or

II undisclosed to Kohl's arising out of the alleged facts, circumstances, and occurrences,

12 underlying any compulsory counterclaim that could have been asserted in the

13 Litigation. Kohl's acknowledges that the facts could be different than it now knows

14 or suspects to be the case, but it is nonetheless releasing all such unknown

15 counterclaims. In exchange for the good and valuable consideration set forth herein,

16 Kohl's further waives any and all rights or benefits that it may now have as a result of

17 the alleged facts, circumstances, and occurrences underlying such a potential

18 compulsory counterclaim under the terms of § 1542 (a) of the California Civil Code

19 (or similar statute in effect in any other jurisdiction), which provides as follows:

20 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

21 WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

22 EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING

23 THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST

24 HA VE MATERIALLY AFFECTED HIS OR HER SETTLEMENT

25 WITH DEBTOR.

26 10.3 The Parties acknowledge that this Settlement, including the releases

27 provided in this section, reflects a compromise of disputed claims.

28



10.4 The Final Judgment shall dismiss the Litigation with prejudice as to

2 Kohl's and shall incorporate the terms of this release.

3 11. Duties Of The Parties With Respect To Preliminary Court Approval

4 11.1 On or before March 14, 2016, or such other date as the Court approves,

5 Class Counsel shall apply to the District Court for the entry of an order granting

6 preliminary approval of the Settlement substantially in the following form:

7 11.1.1 Conditionally Certifying the Settlement Class;

8

9

11.1.2 Preliminarily approving the Settlement;

11.1.3 Approving as to form and content the proposed notices and

10 notice plan, including the Email, Postcard and Publication Notices, Claim Form and

11 Opt-Out Request Form;

12 11.1.4 Scheduling a fairness hearing on the question of whether the

13 proposed Settlement should be finally approved as fair, reasonable, and adequate as

14 to the Settlement Class;

15 11.1.5 Approving Steven Russell and Donna Caffey as Settlement

16 Class Representatives;

17 11.1.6 Approving DOUGLAS CAlAF A, A Professional Law

18 Corporation, and LAW OFFICE OF CHRISTOPHER J. MOROSOFF as Class

19 Counsel for the Settlement Class; and

20 11.1.7 Approving KCC LLC as Claims Administrator.

21 11.2 Kohl's shall cooperate with Class Counsel as reasonably necessary to

22 obtain Preliminary Approval.

23 12. Duties Of The Parties Following Preliminary Court Approval

24 12.1 Following preliminary approval by the District Court of the Settlement,

25 and prior to the final fairness hearing, Class Counsel will submit a proposed Final

26 Judgment that will be agreed to by the Parties. The proposed Final Judgment shall:

27 12.l.1 Approve the Settlement, adjudging the terms thereof to be fair,

28 reasonable, and adequate, and directing consummation of its terms and provisions;



12.1.2 Approve Class Counsel's application for an award of

2 Attorneys' Fees and Costs;

3

4

12.1.3 Approve the Class Representative Enhancement Payment;

12.1.4 Certity the Settlement Class for Settlement purposes in

5 accordance with applicable legal standards and this Agreement; and

6 12.1.5 Dismiss this Litigation between the Class Representatives and

7 the Settlement Class Members, on the one hand, and Kohl's on the other hand, on the

8 merits and with prejudice and permanently bar the Class Representatives, and all

9 Settlement Class Members (other than those who timely filed valid Opt-Out

10 Requests) from further prosecuting any ofthe Settlement Class Member Released

II Claims against Kohl's.

12 12.2 Kohl's shall cooperate with Class Counsel as necessary to obtain final

13 approval and the dismissal of the Litigation as to Kohl's.

14 12.3 The Final Judgment shall not be considered final until the occurrence

15 ofthe Settlement Effective Date.

16 13. Mutual Full Cooperation

17 13.1 The Parties agree to cooperate fully with each other to accomplish the

18 terms of this Settlement, including but not limited to execution of all necessary

19 documents, and to take such other action as may reasonably be necessary to

20 implement the terms of this Settlement. The Parties shall use their best efforts,

21 including all efforts contemplated by this Settlement and any other efforts that may

22 become necessary by order of the Court or otherwise, to effectuate the terms of this

23 Settlement. As soon as practicable after execution of this Settlement, Class Counsel

24 shall, with the assistance and cooperation of Kohl's and its counsel, take all necessary

25 steps to secure the Court's Final Judgment.

26 14. Statement of No Admission

27 14.1 Nothing contained in this Agreement shall be construed or deemed an

28 admission of liability, culpability, or wrongdoing. Kohl's expressly denies liability



for the claims asserted and specifically denies and does not admit any of the pleaded

2 facts not admitted in its pleadings in the Litigation. Nor shall this Agreement

3 constitute an admission by Kohl's as to any interpretation oflaws or as to the merits,

4 validity, or accuracy of any claims made against it in the Litigation. Likewise,

5 nothing in this Agreement shall be construed or deemed an admission by Class

6 Representatives or the Settlement Class with regard to the validity of any of Kohl's

7 defenses or affirmative defenses. Each of the Parties has entered into this Settlement

8 with the intention to avoid further disputes and litigation with the attendant

9 inconvenience and expenses.

10 14.2 This Agreement, and all related documents, including the Settlement

11 Agreement Term Sheet, the certification for settlement purposes entered pursuant to

12 this Agreement, and any Claim Forms, Requests to Opt-Out or Objections submitted

13 by Settlement Class Members and all other actions taken in implementation ofthe

14 Settlement, including any statements, discussions, or communications, and any

15 materials prepared, exchanged, issued, or used during the course of the negotiations

16 leading to this Agreement, are settlement documents and shall be inadmissible in

17 evidence and shall not be used for any purpose in this Litigation or any other

18 judicial, arbitral, administrative, investigative, or other court tribunal, forum, or

19 proceeding, or any other litigation against Kohl's, for any purpose, except in an

20 action or proceeding to approve, interpret, or enforce the terms of this

21 Agreement.

22 14.3 The Claim Forms, Opt-Out Requests or Objections, or other evidence

23 produced or created by any Settlement Class Member in connection with the claims

24 resolution procedures pursuant to this Settlement, and any actions taken by Kohl's in

25 response to such Claim Forms, Opt-Out Requests, Objections, or other evidence, do

26 not constitute, and will not be deemed to constitute an admission by Kohl's of any

27 violation of any federal, state, or local law, statute, ordinance, regulation, rule, or

28 executive order, or any obligation or duty at law or in equity.



15. Voiding The Agreement

2 15.1 In the event that this Settlement is not approved, or if for any reason

3 the Settlement Effective Date does not occur, the Settlement Agreement shall be

4 deemed null, void, and unenforceable and shall not be used nor shall it be admissible

5 in any subsequent proceedings either in this Court or in any other judicial, arbitral,

6 administrative, investigative, or other court, tribunal, forum, or other proceeding, or

7 other litigation against Kohl's.

8 15.2 In the event that the Court does not approve the Attorneys' Fees and

9 Costs in the amount request by Class Counsel, or in the event that the Attorneys' Fees

10 and Costs requested by Class Counsel are reduced, that finding shall not be a basis for

II rendering the entire Settlement Agreement null, void, or unenforceable. Class

12 Counsel retains their right to appeal any decision by the Court regarding the

13 Attorneys' Fees and Costs or Enhancement Award.

14 16. Authority To Execute

15 16.1 The respective signatories to this Agreement each represent that they

16 are fully authorized to enter into this Settlement on behalf of the respective Parties

17 for submission to the Court for preliminary and final approval.

18 17. No Prior Assignments

19 17.1 The Parties represent, covenant, and warrant that they have not directly

20 or indirectly, assigned, transferred, encumbered, or purported to assign, transfer, or

21 encumber, to any person or entity any portion of any liability, claim, demand, action,

22 cause of action, or right released and discharged in this Settlement.

23 18. Miscellaneous Provisions

24 18.1 Construction. The Parties agree that the tenns and conditions of this

25 Settlement are the result oflengthy, intensive anns-Iength negations between the

26 Parties and that this Settlement shall not be construed in favor of or against any party

27 by reason of the extent to which any party or her or his counsel participated in the

28 drafting of this Settlement.



18.2 Captions and Interpretations. Paragraph titles or captions contained in

2 this Agreement are a matter of convenience and for reference, and in no way define,

3 limit, extend, or describe the scope of this Settlement or any provision of this

4 Agreement. Each term of this Agreement is contractual and not merely a recital.

5 18.3 Modification. This Agreement may not be changed, altered, or

6 modified, except in a writing signed by the Parties and approved by the Court.

7 Notwithstanding the foregoing, the Parties agree that any dates contained in this

8 Agreement may be modified by agreement of the Parties without Court approval if

9 the Parties agree and cause exists for such modification. This Settlement may not be

10 discharged except by performance in accordance with its terms or by a writing signed

II by the Parties.

12 18.4 Integration Clause. This Agreement, the Exhibits hereto, and any other

13 documents delivered pursuant hereto contain the entire agreement between the Parties

14 relating to the resolution of the Litigation, and all prior or contemporaneous

15 agreements, understandings, representations, and statements, whether oral or written

16 and whether by a Party or such Party's legal counsel, are merged in this Agreement,

17 except that this Agreement supersedes in its entirety the Settlement Agreement Term

18 Sheet entered into and as exchanged as an executed version on February 16,2016, by

19 and between the Parties. No rights under this Settlement may be waived except in

20 writing and signed by the Party against whom such waiver is to be enforced.

21 18.5 Binding on Assigns. This Settlement shall be binding upon, and insure

22 to the benefit of, the Parties and their respective heirs, trustee, executors,

23 administrators, successors, and assigns.

24 18.6 Class Counsel Signatories. It is agreed that because the Settlement

25 Class Member are so numerous, it is impossible or impractical to have each

26 Settlement Class Member execute this Settlement. The Email, Postcard, and

27 Publication Notices will provide all Settlement Class Members with a summary of the

28 Settlement, and will advise all Settlement Class Members of the binding nature of the



release. Excepting only those Settlement Class Members who timely submit an Opt-

2 Out Request, the Email, Postcard, and Publication Notice shall have the same force

3 and effect as if this Settlement was executed by each Settlement Class Member.

4 18.7 Counterparts. This Agreement may be executed by facsimile

5 signature and in any number of counterparts, and when each party has signed and

6 delivered to each other at least one such counterpart, each counterpart shall be

7 deemed an original, and, when taken together with other signed counterparts, shall

8 constitute one and the same Agreement, which shall be binding upon and effective as

9 to all Parties.

10 18.8 Applicable Law. This Agreement shall be governed by California law

II without regard to its choice of law or conflicts of law principles or provisions.

12 19. Disputes

13 19.1 Mediation. The Parties agree that they will first attempt to resolve any

14 disagreements or disputes over the implementation of the terms ofthe Settlement, this

15 Agreement, or any other documents necessary to effectuate the Settlement through

16 mediation with Judge Eugene Lynch (Ret.) or through another mediator who is

17 mutually agreeable to the Parties. In the event that one or more of the Parties

18 institutes a legal action, arbitration or other proceeding against any other party or

19 parties to enforce the provisions of this Settlement or to declare rights and/or

20 obligations under this Settlement, they will bear their own costs, expenses and

21 attorney's fees.

22 20. Confidentiality

23 20.1 Any and all negotiations related to this Agreement (including the

24 negotiations related to the drafting ofthis Agreement, and any negotiations prior to

25 preliminary approval or between the time of preliminary and final approval) will

26 remain strictly confidential and shall not be discussed with anyone other than the

27 Class Representatives and Kohl's, their retained attorneys, their accountants and

28 financial or tax advisers, the retained consultants, the Court, and the mediator Hon.



Eugene Lynch and his staff, unless otherwise agreed to by Class Counsel and Kohl's

2 or unless otherwise ordered by the Court. The Parties will not issue any press release

3 or equivalent, nor will they respond to any press or media inquiry, other than to state

4 that the case has been settled and to direct any member ofthe press or media to the

5 Settlement Website, this Agreement, and the documents filed in the Litigation. This

6 provision does not prohibit the Parties from presenting to the Court as much

7 information about their settlement negotiations as they mutually agree is necessary, or

8 as the Court requires, to procure approval of this Settlement.

9 21. Documents And Discovery

10 21.1 Within thirty (30) days after a final, non-appealable Judgment is

II entered disposing of all claims in the Litigation, Class Counsel agrees to take steps

12 necessary to destroy or erase all documents and data provided by Kohl's in the

13 Litigation. Upon request from Kohl's, Class Counsel shall certify in writing to

14 Kohl's their compliance with this provision. Nothing in this provision or Agreement

15 shall prohibit Class Counsel from retaining a case file, including all pleadings, motion

16 papers, court filings, deposition transcripts, legal memoranda, correspondence, notes,

17 and work product, so long as any exhibits to such documents which contain

18 documents or data marked "CONFIDENTIAL" continue to be treated as such under

19 the Protective Order in this case.

20 /I

21 II

22 II

23 II

24 II

25 II

26 II

27 II

28



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FOR PLAINTIFFS AND THE PLAINTIFF CLASS

Dated: _______ _

Dated: _______ _

Dated: _______ __

Dated: _______ _

FOR DEFENDANT

Dated: ______ _

By: _______ _

Christopher J. Morosoff Law Office of Christopher J. Morosoff Counsel for the Class

By: _____________ __

Douglas Caiafa Douglas Caiafa, A Professional Law Corporation Counsel for the Class

By: _______ _

Steven Russell

By: _______ _

Donna Caffey

By: ______________ _

Kohl's Department Stores, Inc.

By: _____________ _

Its: _________ _



I~

Ii

Ii I , ,

'. /. I~ I '0 I 2' I "I

:5

,-- '

0:/, f\C!u l.o ('0.11-:-'..,..; UC::ln3 C;\ITI:~ CJ __ ~ <_I

FOP..l>EFEJ.,1)ANT

n~ted ' _____ __ _ fly ___ _

Kohl' ~ ,t)cl':u:mCI1I :)itllt:t. bolo

By _______ _

[,


FOR PLAINTIFFS AND THE PLAINTIFF CLASS 2

3 Dated: __________ __ By. ______________ __

4

5

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Dated: __________ _

Doted: ___________ __

Dated: ___________ _

FOR DEFENDANT

Dated: ________ _

Christopher J. Morosoff Law Office of Christopher J. Morosoff Counsel for the Closs

By: _______________ _

Douglas Caiafa Douglas Coiafa, A Professional Law Corporation Counsel for the Class

By: _______________ _

Steven Russell

By: _____________ __

Donna Caffey

By: ?"<),$o" -:r. l::'eI"':1

Its: Ev', G~I C"""",e I



EXHIBIT 1


Kohl's Settlement Claim Form

If you purchased one or more items from Kohl's while in California between June 11,20 II, and (DATE( that were advertised at a discount of at least 30% ofT of the stated "original" or "regular" price, and you have not received a refund or credit for your purchase, you may be eligible to receive benefits from a Settlement with Kohl's. You need to submit this Claim Form if you want to receive a credit that can be used to purchase items at Kohl's. The deadline to file a claim is [DATE].

The amount of the store credit will be determined based on the number of people who file a claim, as detailed in the Settlement Agreement and in the Notice of Class Action Settlement. Additional information regarding the formula and the Settlement can be found at www. ______ _

To claim a store credit you may submit the Claim Form online at www. ,or if you are unable to submit online, you may send by U.S. Mail. If submitting by U.S. Mail, print and complete this Claim Form and mail it to the following address postmarked on or before

Claims Administrator [Address]

Please Complete Each Section On The Following Page In The Space Provided


SECTION 1- CONTACT INFORMATION Name (First/Last) Street Address City, State, Zip Code Phone Numbers (primary) Current E-Mail Address

SECTION II: AWARD DELIVERY PROCESS

You will receive an electronic store credit delivered in an email to the email address provided as part of this process, unless you check the following box below to indicate that you prefer your store credit to be delivered through the U.S. Mail.

I prefer to receive my store credit though the U.S. Mail rather than by email: 0

SECTION III: AFFIRMATION

I hereby affirm, under penalty of perjury, that I purchased at least one item between June 11,2011, and [DA TEl from Kohl's while in California that were advertised at a discount of at least 30% off of the stated "original" or "regular" price, and that I have not received a refund or credit for my purchase. The information I have provided in this Claim Form is true and correct to the best of my knowledge and this is the only Kohl's Claim Form that I have submitted. I further understand, acknowledge, and agree that I am eligible to receive only ONE payment from this Settlement based on all my purchases from Kohl's. I further understand, acknowledge, and agree that the amount I will receive shall be calculated according to the terms of the Settlement Agreement and subject to the terms of the Settlement Agreement, including the release of claims.

Date: _____ _ Signature: _____________ _


EXHIBIT 2


LONG FORM NOTICE (WEBSITE)

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

If you made a purchase at Kohl's or Kohls.com while in California, your rights may be affected by

and you could receive a store credit from a class action settlement.

Afederal COllrl authorized this Notice_ This is not a solicilalionfrom a lawyer,

• A class action settlement has been reached in a lawsuit that alleges Kohl's Department Stores, Inc. ("Kohl's") used false "regular" and "original" prices in advertising its products. Kohl's denies that it used false price comparison advertising or that it has done anything wrong. The Court has not decided who is right.

• You may be included in the Settlement if you purchased one or more items from Kohl's while in California between June 11,2011, and [DATE) that were advertised at a discount of at least 30% off of the stated "original" or "regular" price, and you have not received a refund or credit for your purchase

• Your legal rights are affected whether you act or not. This Notice includes information on the Settlement and your rights. Please read the entire Notice carefully.

• The Court in charge of the case still has to decide whether to approve the Settlement with Kohl's.

Your nights and Option .... in this St'ttll'I1H .. 'nt:

FILE A CLAIM FORM This is the only option that allows you to get a store See Question _ credit if you quality.

OO.JECf Write to the Court with reasons why you do not like the See Question _ Settlement and why you do not think it should be approved.

Go TO A HEARING Go to a court hearing and ask to speak about the See Question _ Settlement.

ASK TO BE EXCLUDED This is the only option that allows you to be part of a See Question _ separate lawsuit against Kohl's for the claims resolved by this Settlement.

Do NOTIIING You will not get a store credit from this Settlement and See Question _ you will give up certain legal rights.


WHAT THIS NOTICE CONTAINS

BASIC INFORMATION ........................................................................................................................... 2

I. Why is this notice being provided? ........................................................................... ............... 2

2. What is the lawsuit about? ................................................................ ....................................... 3

3. What is a class action? ............................................................................................................. 3

4. Why is there a Settlement? ....................................................................................................... 3

THE SETTLEMENT CLASS - WHO IS INCLUDED ................................................................................. 3

5. How do I know if I am part of the Settlement? ........................................................................ 3

6. Are there exceptions to being included? .................................................................................. 3

7. What does the Settlement provide? ...................................................................... ....... ...... ..... .4

8. Tell me more about the Gill Card Credits ............................................................................... .4

9. How can I get benefits? ........................................................... ............................ ...... .............. .4

10. When will I get benefits? ....................................................................................... .. ............... .4

II. What am I giving up to get a store credit or to stay in the Settlement Class? ........ .......... ...... .4

12. What are the Released Claims? ................. ............... ......... .. ....... .............. ................................ 4

EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS .................................................................. 5

13. What if I don't want to be part of the Settlement? ........................ ........................................... 5

14. How do I exclude myself from the Settlement? ....................................................................... 5

15. If I exclude myself, can I still get a store credit from the Settlement? .................................... 5

16. If I do not exclude myself, can I sue Kohl's for the same thing later? .................................... 5

OBJECTING TO THE SETTLEMENT .................................................... .................................................. 6

17. How do I tell the Court if I disagree with part of the Settlement? ........................................... 6

18. What is the difference between objecting and excluding myself from the Settlement? .......... 6

IF You DO NOTHING ............................................•.............................................................. .. ............... 6

19. What happens if I do not do anything? .................................................................................... 6

THE LAWYERS REPRESENTING You .................................................................................................. 7

20. Do I have a lawyer in this case? ............................................................................................... 7

21. How will the lawyers get paid? ........................................... ...... .......................... ..................... 7

THE COURT'S FAIRNESS HEARING ............................................................................................ .. ....... 7

22. When and where wi II the Court decide whether to approve the Settlement? ............... ........... 7

23. Do I have to come to the hearing? ........................................................................................... 7

24. May I speak at the hearing? ..................................................................................................... 7

GETTING MORE INFORMATION .......................................................................................... ................ 8

25. How do I get more Information? ............................................................................................. 8

BASIC INFORMATION

Why is this notice being provided?

You have Ihe right to know about the lawsuit and about your legal rights and options before the Court decides whether to approve the Settlement.


The Court in charge of the case is the United States District Court for the Central District of California, and the case is called Steven Russell and Donna Caffey v. Kohl's Department Stores, Inc., Case No. 5: I 5-cv-0 I I 43-RGK-SP. The persons who sued are called the Plaintiffs, and the company they sued, Kohl ' s Department Stores, Inc. is called the Defendant or Kohl's.

For More Information: Call 1-800-000-0000 or Visit www. ______ .com

12. What is the lawsuIt about?

The lawsuit alleges that Kohl's engaged in false price comparison advertising by using false "original" and/or "regular" prices to advertise its products between June II, 20 II, and [DA TEl in violation of various California laws that prohibit false advertising and unfair competition. Kohl's denies: (I) that it used false price comparison advertising; (2) that it has done anything wrong; and (3) that the Plaintiffs or consumers have been harmed in any way. The Court has not decided who is right.

13. What is a class action?

In a class action, one or more people, called Class Representatives (in this case, Steven Russell and Donna Caffery) sue on behalf of people who have similar claims. All of the people with similar claims comprise the "Class" and are referred to as "Class Members," except for those who exclude themselves from the class. U.S. District Judge R. Gary Klausner in the United States District Court for the Central District of California is in charge of this class action.

14. Why is there a Settlement?

This case has been pending since June 2015. Kohl's is not admitting that it did anything wrong, but both sides want to avoid the cost and risk of further litigation. The Court has not decided the merits of the action in favor of the Plaintiffs or Kohl's. The Class Representatives and their attorneys think the Settlement is best for everyone who is affected. The Settlement provides the opportunity for benefits to Class Members.

THE SETTLEMENT CLASS - WUO IS INCLUDED

5. How do I know if I am part of the Settlement?

The Settlement Class includes the following persons: All persons who, while in the State of California, and between June 11,2011, and the present (the "Class Period"), purchased from Kohl's one or more items at a discount of at least 30% off of the stated "original" or "regular" price, and who have not received a refund or credit for their purchase(s).

6. Are there exceptions to being included?


Yes. Excluded from the Settlement Class are Defendant, as well as its officers, employees, agents or affiliates, and any judge who presides over this action, as well as all past and present employees, officers and directors of Kohl's.

17. What does the Settlement provide?

Class Members will receive Kohl's Gift Card Credit paid from what is remaining ofa $6,150,000 settlement fund after deducting the costs of administering the Settlement of up to $1,000,000, courtapproved attorneys' fees and costs of up to 25% of the settlement fund ($1,462,500 in fees and costs up to $75,000), and payments to the Class Representatives (up to $7,500 per Class Representative for a total of$15,000). The amount of the Kohl's Gift Card Credit will be based on the amount of money left in the settlement fund after making the deductions listed above and the total number of valid claims filed (see Question ->. 8. Tell me more about the Girt Card Credits.

Gift Card Credits can be used for anyon-line or in-store purchase where you could otherwise use a gift card. More than one Gift Card Credit may be used at a time and they may be used in conjunction with other promotional discounts that are otherwise available with the use of Gift Cards. Gift Card Credits do not expire. You may give your Gift Card Credit to someone else, but you cannot be resold or exchanged for cash.

19. How ean I get benefits?

To ask for benefits, you need to complete and submit or mail a Claim Form by (DATEJ. Claim Forms may be submitted online at www. .com or printed from the website and mailed to the address on the form. Claim Forms are also available by calling 1-800-000-0000. Please read the Claim Form instructions carefully.

110. When will I get benefits?

Benefits will be distributed to Class Members after the Court grants "final approval" of the Settlement and after any appeals are resolved. The final approval hearing is scheduled to occur on [DA TEl. If there are appeals to the final approval order, they can take time to resolve.

II. What am I giving up to get a store credit or to stay in the Settlement Class?

Unless you exclude yourself, you are staying in the Settlement Class. This means that you will no longer be able to sue, continue to sue, or be part of any other lawsuit against Kohl's about the claims made in this lawsuit and released by the Settlement Agreement. You will be legally bound by all of the Court's orders, as well as the "Released Claims" (see next question).

112. What are the Released Claims?

Released Claims means that all members of the Settlement Class who do not exclude themselves will irrevocably release, acquit, and forever discharge Kohl's (and all affiliates, parents or


subsidiaries, officers, employees, agents, and attorneys) against any and all claims, rights, penalties, demands, damages, costs and expenses (including attorneys' fees and costs, other than those costs and expenses required to be paid pursuant to this Agreement), causes of action, or liability of any kind arising out of or in connection with all of the claims or causes of action that were made or could have been made in this Litigation or in any other forum relating, in whole or in part, to the alleged acts, omissions, facts, matters, transactions, circumstances asserted by in the Litigation, including assertions that Kohl's improperly innated or misstated its stated "original" and/or "regular" prices in order to make its sale prices appear more attractive and thereby harmed consumers.

The Settlement Agreement, available at www .. ____ .comdescribestheReleasedClaimsand provides specific details about the Settlement.

EXCLUDING YOURSELF FROM TilE SETTLEMENT CLASS

13. Whal if I don't wanl to be part of the Settlement?

If you wish to keep your individual right to sue Kohl's about the claims in this case and released by this Settlement you must exclude yourself from the Settlement Class.

14. How do I exclude myselrrrom the Settlement?

To exclude yourselffrom the Settlement Class, you must complete an Opt-Out Form. Opt-Out Forms are available at www. .com or by calling 1-_ -_ -__ . You mail also send a letter by mai I stating:

• Your name, address, and telephone number, • The name of the case (Russell v. Kohl's), • A statement that you want to be excluded from this Settlement; and • Your signature and date.

Your Opt-Out For or letter must be mailed so it is postmarked no later than MonthOO,2016,to:

Kohl's Settlement Exclusions P.O. 0000 City, ST 00000

IS. If I exclude myself, can I still get a store credit from the Settlement?

No. If you exclude yourself, do not send in a Claim Form to ask for a Gift Card Credit. Once you exclude yourself, you are no longer eligible for the benefits that this Settlement provides. If you submit an Opt-Out Form or letter and a Claim Form your exclusion request will be rejected and your Claim Form will be processed.

16. If I do not exclude myself, can I sue Kohl'S for the same thing later?


No. Unless you exclude yourself, you give up any right to individually sue Kohl ' s for the claims made in this lawsuit and released by the Settlement Agreement.

OO.JECTING TO TilE SETTLEMENT

17. How do I tell the Court ifl disagree with part of the Settlement?

If you are a Class Member, you can object to the Settlement if you do not like it or a portion of it. You can give reasons why you think the Court should not approve the Settlement. The Court will consider your views before making a decision. To object, you must file a written objection with the Court. Your written objection must to include:

• Your name and address; • The name of the case (Russell v. Kohl 's); • The reasons why you object to the Settlement; • Copies of all documents that support your objection, if applicable; • A statement indicating whether you intend to appear at the Fairness Hearing (see Question);

and • Your signature.

Your objection must be postmarked no later than Month 00, 2016 and mailed to:

The United States District Court for the Central District of California Courtroom 850 255 East Temple Street Los Angeles, CA 90012

You cannot object to the Settlement if you exclude yourself from the Settlement Class.

18. What is the difference between ohjecting and excluding mysclffrom the Settlement?

Objecting is telling the Court that you do not like something about the proposed Settlement. Excluding yourself is telling the Court that you do not want to be part of the Class in this Settlement. If you exclude yourself, you have no basis to object or file a claim because the Settlement no longer applies to you.

IF You DO NOTHING

119. What happens if I do not do anything?

If you do nothing, you will not a Gift Card Credit from this Senlement. If the Court approves the Settlement, you will be bound by the Settlement Agreement and the Released Claims. This means, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Kohl 's about the issues resolved by this Settlement and released by the Settlement Agreement.


TilE LAWYERS REPRESENTING You

120. Do I have a lawyer in this case?

Yes. The Court has appointed Douglas Caiafa, of Douglas Caiafa, A Professional Law Corporation, and Christopher J. Morosoff, of the Law Office of Christopher J. Morosoffto represent you and all Class Members as "Class Counsel". You will not be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

121. How will the lawyers get paid?

Class Counsel will ask the Court to award them up to $1,462,500, plus their out-of-pocket costs and expenses of $75,000 for their work in this case (25% of the settlement fund). If approved, these amounts, as well as a $7,500 to each of the two Class Representatives will be paid out of Settlement fund before issuing Gift Card Credits to Class Members. Class Counsel's motion for Attorneys' Fees and Costs is available for viewing on the settlement website at www. ________ .com.

THE COURT'S FAIRNESS HEARtNG

22. When and where will the Court decide whether to approve the Settlement?

The Court will hold a Fairness Hearingat_: __ .m. on Month 00, 2016, at the United States District Court for the Central District of California, located at 255 East Temple Street, Los Angeles, California, in Courtroom 850. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. The Court will also consider how much to pay Class Counsel and the Class Representatives. If there are objections, the Court will consider them. After the hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions wi II take.

The hearing may be moved to a different date, time or location without additional notice, so it is a good idea to check www..com.

123. Do I have to come to the hearing?

No. Class Counsel will answer any questions the Court may have. But, you are welcome to come at your own expense. If you file an objection, you don't have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay another lawyer to attend, but it's not required.

124. May I speak at the hearing?

Yes. You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that it is your "Notice of Intention to Appear." Your letter must also include:


• Your name, address, and telephone number; • The name of the case (Russell v. Kohl's); • The name, address, and telephone number of any attorney(s) who will be appearing on

your behalf at the Fairness Hearing, if applicable; • A brief statement detailing what you will be presenting to the Court; and • Your signature.

You must mail your Notice of Intention to Appear postmarked no later than Month 00, 2016, to:

The United States District Court for the Central District of California Courtroom 850 255 East Temple Street Los Angeles, CA 90012

GETTING MORE INFORMATION

125. How do I get more Information?

The Notice summarizes the lawsuit and the proposed Settlement. You can get more information about the lawsuit and Settlement at www..com. You may also write with questions to: , P.O. Box 0000, City, State 00000, or by email at.com. You can also get a Claim Form or Opt-Out Request at the website, or by calling this toll free number, _________ _


EXHIBIT 3


SUMMARY NOTICE - EMAIL

To: From: administralor@ .com Subject: Kohl's Pricing Class Action Settlement

If you made a purchase at Kohl's or Kohls.com while in California, you could receive a store credit from a class action

settlement.

Para IIna notification en Espano/, /lamar [add phone nllmberjo visitar nllestro website [add website address j

A settlement has been reached in a class action alleging that Kohl's Department Stores, Inc. 's used false "regular" and "original" prices in advertising its products. Kohl's denies that it used false price comparison advertising or that it has done anything wrong. The Court has not decided who is right.

You are included in the settlement as a "Class Member" if, while in California, you purchased one or more items advertised as 30% or more off of the stated "original" or "regular" price from a Kohl's store or Kohls.com between June 11,20 II, and [DATE), and you have not received a refund or credit for that purchase. If you are eligible, you may be able to receive a store credit ("Gift Card Credit") that may be used toward purchases at any Kohl's store or at Kohls.com. More than one Gift Card Credit may be used at a time and they may be used in conjunction with other promotional discounts that are otherwise available with the use of Gift Cards. Gift Card Credits do not expire. You may give your Gift Card Credit to someone else, but they cannot be resold or exchanged for cash.

The Gift Card Credits will be paid from what remains ofa $6,150,000 settlement fund after deducting the costs of administering the settlement (up to $1,000,000), court-approved attorneys' fees and costs of up to 25% of the settlement fund ($1,462,500 in fees and costs up to $75,000), and payments to the Class Representatives (up to $7,500 per Class Representative for a total of $15,000). The amount of the Gift Card Credit will be determined by dividing the remainder of the settlement fund among the total number of Class Members who submit valid claims.

To receive the Gift Card Credit, you must file a claim by [DATE). Claim Forms may be submitted online at www..com.printed from the website and mailed to the address on the form, or obtained by calling 1-_ -_ -_ _ .

If you file a claim or do nothing and the Court approves the settlement, you will give up your right to sue Kohl's for any of the claims released by this settlement. If you don't want to receive a store credit, but you want to keep your right to sue Kohl's individually for the same claims resolved by this settlement, you must exclude yourself by [DATE). If you do not exclude yourself from the settlement, you may object and notify the Court that you or your lawyer intends to appear at the Court's fairness hearing. Objections and intentions to appear are due [DATE). For more information, including the Detailed Notice and Settlement Agreement, call or go to www .. ____ .com.


The Court will hold a hearing on [DATE] to determine whether to approve: the settlement; how much to award in fees and costs to Class Counsel; and how much to award the Class Representatives. You or your attorney may attend, but you don't have to. The date of the hearing may change without further notice, so please check www. .com for updates.

This is only a summary. The details regarding the settlement, your rights, the claim form, and scheduling information can be found at www..com. You may also call ______ _ or email .com with any questions.

The lawsuit is known as Russell. et al. v. Kohl's Department Stores, Inc., Case No. 5:15-cv-OI143-RGK-SP, pending in the U.S. District Court for the Central District of California.

PLEASE DO NOT TELEPHONE THE COURT OR THE COURT CLERK'S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.


EXHIBIT 4


SUMMARY NOTICE -- POSTCARD

LEGAL NOTICE

If you made a purchase at Kohl's or Kohls.com while in California, you

could receive a store credit from a class action settlement. Para una notification en &panol.

lIamar [add phone numberJo visilar nllestro website [addwebsile address]

1-800-000-0000 www •. _______ .• com

A selliement hus been reached In a class action nlleging thllt Kohl 's Department Stores. Inc's ("Kohl's") used false "regular" and "original" prices in advertising its products. Kohl's denies that it used false price comparison advertising or that It has done anything wrong. The Court has not decided who is right.

You arc included in the settlement as €I "Class Member" If, while in California, you purchuscd one or more items advertised as 30% or more olTthe stated "ongina'" or "regular" price from a Kohl's Siore or kohls,com between June 11,2011, nnd (DATE].Im..d. you have not received n refund or credit for that purchase

The settlement will provide store credit in the fonn of Gift Card Credits to eligible CIIlSS Members that submit a valid Claim Fonn. The Gift Card Credits will be paid from what remains of a S6,ISO,ooo settlement fund after deducting the costs of administering the settlement (up to SI .OOO,OOO), court-approved attorneys' fees and costs of up to 2S% of the settlement fund ($I,462,Soo in fees and costs up to S7S,OOO), and a S7,SOO payment for each Class Representative (Steven Russell and Donna Caffey). The amount of the Gift Card Credit will be detennmed by dividing the remamder of the settlement fund among Class Members ""flO submit valid claims. A Gift Card Credit is store credit that may be used toward purchases at any Kohl 's store or at Kohls,com. More than one Gift Card Credit may be used at a time and they may be used in conjunction with other promotional discounts that are otherwise available with the use of Gift Cards Gift Card Cred its do not expire You may give your Gift Card Credit to someone else, but they cannot be resold or exchanged for cash

To receive a Gift Card Credit, you must file a claim by (DATE(. Claim fonns may be tiled online, printed from the webSite and mailed to the address on the fonn. orobtamed by calling 1-_-_-__ If you file a claim or do nothing and the Court approves the settlement, you will give up your right to sue Kohl 's for any of the claims released m the settlement. If you don't want to participate In the settlement, you must exclude yoursclf by (DATEI . If you exclude yourself, you will not receive a Gin Card Credit, but you will kccp your right to sue Kohl's individually for the same claims resolved by this settlement. If you do not exclude yourself from the settlement. you may object and notify the Court that you or your lawyer intends to appear at the Court 's fa irness hearing. Objections are due (DATE( For more infonnation. including the Detailed Notice and Settlement Agreement. call or go to the website below

The US District Court for the Central District of California will hold a hearing in thiS casc, Russell, et 01. I'. Kohl's Deparlmenl Siores. Inc .• Case No S: IS-cv-01l43-RGK-SP. on [DATEI. At the hearing, the Court will detennine whether to approvc the settlement; attorneys' fees and costs; and payments to the Class Representatives. You or your attorney may attend. but you don ' t have to.

PLEASE DO NOT TELEPHONE THE COURT OR THE COURT CLERK'S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR TIlE CLAIM PROCESS. TIlEY CANNOT ANSWER ANY QUESTIONS_


EXHIBIT 5


SUMMARY NOTICE - PUBLICATION NOTICE


LEGAl· NmICE

If you made a purchase at Kohl's or Kohls.com while in California, you could receive a store credit from a class action

settlement. Para lma nOlification en Espal1ol. lIamar {add plrm,e numberJo visitor nlleslro website {add

website address].

A settlement has been reached in a class action alleging that Kohl's Depanment Stores, Inco's used false "regular" and "original" prices in advertising its products. Kohl's denies that it used false price comparison advenising or that it has done anything wrong. The Coun has not decided who is right. Who's included? You are included in the settlement as a "Class Member" if, while in California, you purchased one or more items advertised as 30% or more otT of the stated "original" or "regular" price from a Kohl's store or Kohls.com between June II, 20 II, and [DATE], and you have not received a refund or credit for your purchase. If you are eligible, you may be able to receive a store credit for use at any Kohl's store or on its e-commerce website ("Gift Card Credit"). Gift Card Credits do not expire. You may give your Gift Card Credit to someone else, but you cannot be resold or exchanged for cash. What does the settlement provide? ffyou are eligible, you may be able to receive a store credit ("Gift Card Credit") for use at any Kohl's store or Kohls.com. A Gift Card Credit is store credit that may be used toward purchases at any Kohl's store or at Kohls.com. More than one Gift Card Credit may be used at a time and they may be used in conjunction with other promotional discounts that are otherwise available with the use of Gift Cards. The Gift Card Credits will be paid from what remains ofa $6,150,000 settlement fund after deducting the costs of administering the settlement (up to $1,000,000), coun-approved attorneys' fees and costs of up to 25% ofth. settlement fund ($1,462,500 in fees and costs up to $75,000), and payments to the Class Representatives (up to $7,500 per Class Representative for a total of$15,OOO). The amount of the Gift Card Credit will be determined by dividing the remainder of the settlement fund among the total number of Class Members who submit valid claims. How to get a store credit_ To receive the Gift Card Credit, you must file a claim by [DATE]. Claim Forms may be submitted online at www..com. printed from the website and mailed to the address on the form, or obtained by calling 1-___ .

Your other options. If you file a claim or do nothing and the Coun approves the settlement, you will give up your right to sue Kohl's for any of the claims released in the settlement. (fyou don't want to receive a store credit, but you want to keep your right to sue Kohl's separately for the same claims resolved by this settlement, you must exclude yourselfby [DATE]. If you do not exclude yourself from the settlement, you may object and notifY the Coun that you or your lawyer intends to appear at the Court's fairness hearing. Objections and intentions to appear are due [DATE]. For more information, including the Detailed Notice and Settlement Agreement, call or go to www..com. The Coun will hold a hearing on [DATE] to determine whether to approve: the settlement; Class Counsels request for fees, costs and expenses; and payments to the Class Representatives. The lawsuit is known as Russell. et 01. v. Kohl's Department Stores, Inc., Case No.5: I 5-cv-0 I I 43-RGK-SP, pending in the U.S. District Coun for the Central District of California. Want more? This is only a summary. The details regarding the settlement (including the Settlement Agreement), your rights, the claim form, and scheduling information can be found at www..com. You may also call or email _______ .com with any questions.


EXHIBIT 6


United States District Court for the Central District of California STEVEN RUSSELL AND DONNA CHAFFEY v. KOHL'S DEPARTMENT STORES, INC.

Case No. S:lS-CV-01l43-RGK-SP

OPT-OUT FORM

I WISH TO BE EXCLUDED FROM THE SETTLEMENT CLASS IN THE CASE OF STEVEN RUSSELL AND DONNA CHAFFEY v. KOHL'S DEPARTMENT STORES, INC. CASE NO. S:IS-CV-OI143-RGK-SP. I UNDERSTAND THAT BY REQUESTING EXCLUSION FROM THE SETTLEMENT CLASS, I WILL NOT RECEIVE ANY SHARE OF THE SETTLEMENT BENEFITS. I confirm that I have received written notice of the proposed Settlement in this action. I have decided to exclude myself from the Settlement Class and not to participate in any portion of the proposed Settlement.

Date:

Signature:

Printed Name:

Street Address:

City, State, Zip Code:

THIS FORM MUST BE COMPLETED AND SENT VIA U.S. MAIL WITH A POSTMARK DATED NO LATER THAN TO:

CLAIMS ADMINISTRATOR ADDRESS

CITY, STATE ZIP

TOLL FREE TELEPHONE

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DECLARATION OF STEVEN RUSSELL ISO MOTION FOR PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT AND CERTIFICATION OF SETTLEMENT CLASS




EASTERN DIVISION


Plaintiff,


Defendants.

Case No. 5:15-cv-01143-RSK-SP CLASS ACTION DECLARATION OF STEVEN RUSSELL IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND UNOPPOSED MOTION FOR CERTIFICATION OF SETTLEMENT CLASS Courtroom: 850 Date: April 11, 2016 Time: 9:00 a.m. Judge: Hon. R. Gary Klausner


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DECLARATION OF STEVEN RUSSELL

I, Steven Russell, declare as follows:

1. I am one of the named plaintiffs herein before this Court in the action Steven

Russell, et al. v. Kohl's Department Stores, Inc. et al. U.S.D.C., C.D. Cal. 5:15-

cv-01143-RSK-SPx.

2. I submit this Declaration in Support of Plaintiffs' Motion for Preliminary

Approval of Class Action Settlement and Unopposed Motion for Certification

of Settlement Class.

3. I have purchased numerous products from Kohl’s at their La Quinta and Palm

Desert, California, stores throughout the past 4 years. Many of the items that I

have purchased from Kohl’s were advertised as selling for at least 30% less

than the advertised “Regular” or “Original” prices.

4. Some of the products I have purchased at Kohl’s in California throughout the

past 4 years that were advertised as selling for at least 30% less than the

advertised “Regular” or “Original” prices include, without limitation:

a. “Marc Anthony” men’s pants which I paid $34.99 for, and which had an

advertised “Original” price of $70.00;

b. “Axist” men’s pants which I paid $34.99 for, and which had an

advertised “Original” price of $60.00;

c. “Axist” men’s shirts which I paid $24.99 each for, and which had

advertised “Original” prices of $60.00;

d. “Lee” men’s jeans which I paid $31.99 for, and which had an advertised

“Original” price of $45.00;

e. “Arrow” men’s shirt which I paid $24.99 for, and which had an

advertised “Original” price of $50.00; and,

f. “Croft & Barrow” men’s shirt which I paid $19.99 for, and which had an

advertised “Original” price of $36.00.


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5. I have attached hereto as Exhibit A true and correct pictures of the products I

purchased at Kohl’s that are listed here in paragraph 4(a) through 4(f).

6. I purchased the products listed here in paragraph 4(a) – 4(f) with cash. I have

searched diligently, but have been unable to locate the receipts for the items

that are pictured in Exhibit A.

7. All of the items pictured in Exhibit A are currently still in my possession. I

took the pictures of those items at my home and with my camera.

I declare under penalty of perjury that the forgoing is true and correct.

Executed this 14th day of March, 2016, at Palm Desert, California.

Declarant, Steven Russell


EXHIBIT A


DECLARATION OF CARLA A. PEAK ON SETTLEMENT NOTICE PROCEDURES

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Douglas Caiafa, Esq. (SBN 107747) DOUGLAS CAIAFA, A Professional Law Corporation 11845 West Olympic Boulevard, Suite 1245 Los Angeles, California 90064 (310) 444-5240 - phone; (310) 312-8260 - fax Email: [email protected] Christopher J. Morosoff, Esq. (SBN 200465) LAW OFFICE OF CHRISTOPHER J. MOROSOFF 77-760 Country Club Drive, Suite G Palm Desert, California 92211 (760) 469-5986 - phone; (760) 345-1581 - fax Email: [email protected] Attorneys for Plaintiff STEVEN RUSSELL, et al. Arnold & Porter LLP James F. Speyer (SBN 133114) [email protected] E. Alex Beroukhim (SBN 220722) [email protected] Ryan Light (SBN 293858) [email protected] 777 South Figueroa Street, Forty-Fourth Floor Los Angeles, California 90017-5844 Telephone: 213.243.4000 Fax: 213.243.4199 Attorneys for Defendant KOHL’S DEPARTMENT STORES, INC.



EASTERN DIVISION STEVEN RUSSELL, et al.

Plaintiff,

vs. KOHL’S DEPARTMENT STORES, INC., et al.,

Defendants.

Case No. 5:15-cv-01143-RSK-SP DECLARATION OF CARLA A. PEAK ON SETTLEMENT NOTICE PROCEDURES Courtroom: 850 Judge: Hon. R. Gary Klausner Action Filed: June 11, 2015



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I, CARLA A. PEAK, declare as follows:

1. I have personal knowledge of the matters set forth herein, and I believe them to be

true and correct. I am a Vice President of Legal Notification Services at Kurtzman Carson

Consultants LLC (KCC). KCC is an experienced national class action notice provider and class

administrator with experience in administering class action settlements. KCC’s services include

settlement fund escrow and reporting, class member data management, legal notification, call

center support, and claims administration.

2. I specialize in the design and implementation of plain language legal notice

documents. I work with Gina M. Intrepido-Bowden, also a Vice President of Legal Notification

Services at KCC, who specializes in the design and implementation of legal notification

campaigns supported by evidence-based reach calculations relating to the adequacy of notice

distribution to the Class. Together, we assure that class members are adequately reached with

notices that capture their attention and are easily understood. Ms. Intrepido-Bowden and I have

been involved in many large and complex class action notice programs, including all aspects of

notice dissemination.

3. This declaration will describe our experience, as well as the notice program (the

“Notice Plan” or “Notice Program”) that we propose for this case, including how the Notice Plan

was developed and why we believe it will be effective.

OVERVIEW

4. KCC was retained by the parties to, among other tasks: (1) email and mail Notices

to Class Members with direct contact information; (2) develop and maintain a settlement website

that will provide general information about the settlement and include, among other things, a

detailed notice of the Settlement, answers to frequently asked questions, and allow class

members to file a claim online; (3) provide supplemental notice to Class Members via published

notice in regional editions of USA Today; (4) process Opt-Out Forms and objections; (5) provide

automated telephone support to Class Members; (6) process Claim Forms submitted via website

and received via postal mail; (7) email Gift Card Credits or mail postcard vouchers to eligible

claimants; and (8) establish a qualified settlement fund (the “QSF”).



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5. The QSF shall be a separate trust organized and operated as a qualified settlement

fund as described in Treasury Regulation § 1.468B-1. KCC shall take such steps as necessary to

qualify the QSF as a qualified settlement fund under § 468B of the Internal Revenue Code, 26

U.S.C. § 468B, and the regulations promulgated pursuant thereto. KCC shall be the

“administrator” within the meaning of Treasury Regulation § 1.468B-2(k)(3).

6. The Notice Program we developed utilizes individual notice to known Class

Members, supplemented with notice placements in a national newspaper, as well as on a variety

of websites. The individual notice effort alone is expected to reach at least 70.6% of the Class, as

explained below. Coverage will be further enhanced by paid notice placements in the Los

Angeles and San Francisco regional editions of USA Today.

7. We have worked with the parties to develop the various forms of Notice for Court

approval. The Notices have been designed to be noticeable, clear and concise, and written in

plain, easily understood language.

8. The estimated cost of the settlement administration, inclusive of the Notice

Program, processing of Claim Forms, opt-outs and objections, telephone and website support,

and voucher disbursements, is approximately $921,681.

EXPERIENCE RELEVANT TO THIS CASE

9. Our c.v., attached as Exhibit 1,1 identifies over a hundred cases Ms. Intrepido-

Bowden and I have been involved with, including the dissemination of notice around the globe in

more than 35 languages. It contains numerous judicial comments citing cases we have worked

on, as well as articles we have written and speaking engagements where we have discussed the

adequacy and design of legal notice efforts.

10. Ms. Intrepido-Bowden and I have been involved in many of the largest and most

significant cases in history, including Shames v. The Hertz Corporation, No. 3:07-cv-02174

(S.D. Cal.), a national antitrust settlement involving several million class members who rented

vehicles from a variety of car rental companies; In Re Uponor, Inc., F1807 Plumbing Fittings

Products Liability Litigation, No. 11-MD-2247 (D. Minn.), a national products liability

1 Includes work performed by Ms. Intrepido-Bowden and myself while employed at other firms.



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settlement providing reimbursement, repair, and replacement of affected plumbing components;

In re Trans Union Corp. Privacy Litigation, MDL No. 1350 (N.D. Ill.), a notice campaign

involving virtually every adult in the United States and informing them about their rights in the

$75 million data breach settlement; In re TJX Companies, Inc., Customer Data Security Breach

Litigation, MDL No. 1838 (D. Mass.), one of the largest U.S. and Canadian retail consumer

security breach notice programs; Grays Harbor Adventist Christian School v. Carrier Corp., No.

05-05437 (W.D. Wash.), Donnelly v. United Technologies Corp., No. 06-CV-320045CP (Ont.

S.C.J.) and Wener v. United Technologies Corp., 500-06-000425-088 (QC. Super. Ct.), product

liability class action settlements involving secondary heat exchangers in high efficiency gas

furnaces, affecting class members throughout the U.S. and Canada; and In re Residential Schools

Litigation, No. 00-CV-192059 (Ont. S.C.J.), a complex Canadian class action incorporating a

groundbreaking notice program to disparate, remote aboriginal persons qualified to receive

benefits in the multi-billion dollar settlement.

11. As noted in our c.v., we have written numerous articles, as well as presented

about notice and due process. We believe notice and due process depend upon clear

communication with the people affected. Our articles include: Carla Peak and Steven Weisbrot,

How to Design Your Notice to Minimize Professional Objectors, CLASS ACTION LAWSUIT

DEFENSE: CLASS ACTION DEFENSE NEWS, Developments and Commentary provided by

BAKERHOSTETLER (www.classactionlawsuitdefense.com) (2012); Carla Peak, Is your legal

notice designed to be noticed? WESTLAW JOURNAL CLASS ACTION Vol.18 Issue 10 (2011); John

B. Isbister, Todd B. Hilsee, & Carla A. Peak, Seven Steps to a Successful Class Action

Settlement, AMERICAN BAR ASSOCIATION, SECTION OF LITIGATION, CLASS ACTIONS TODAY 16

(2008); Todd B. Hilsee, Gina M. Intrepido & Shannon R. Wheatman, Hurricanes, Mobility and

Due Process: The “Desire to Inform” Requirement for Effective Class Notice is Highlighted by

Katrina, 80 TULANE L. REV. 1771 (June 2006); Gina M. Intrepido, Notice Experts May Help

Resolve CAFA Removal Issues, Notification to Officials, 6 CLASS ACTION LITIG. REP. 759

(2005); and Todd B. Hilsee, Shannon R. Wheatman & Gina M. Intrepido, Do You Really Want



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Me to Know My Rights? The Ethics Behind Due Process in Class Action Notice Is More Than

Just Plain Language: A Desire to Actually Inform, 18 GEO. J. LEGAL ETHICS 1359 (Fall 2005).

12. Our speaking engagements regarding notice include: Ethics in Legal Notification,

accredited CLE Program, presented by Gina Intrepido-Bowden in Radnor at Kessler Topaz

Meltzer & Check LLP (September 2015), Carla Peak & Patrick Ivie in Philadelphia at Class

Action Preservation Project (November 2014), Carla Peak & Robert DeWitte in Philadelphia at

Saltz, Mongeluzzi, Barrett & Bendesky, P.C. (August 2014), presented by Gina Intrepido-

Bowden and Patrick Ivie at the St. Regis Deer Valley Resort in Utah (March 2014), presented by

Gina Intrepido-Bowden, Carla Peak & Steven Weisbrot at Morgan Lewis & Bockius in New

York (December 2012); Big Shoulders and High Standards. Can Plaintiffs Scale the Third

Circuit’s New Ascertainability Wall? AMERICAN BAR ASSOCIATION 18th Annual National

Institute on Class Actions, Gina Intrepido-Bowden presenter/panelist (October 2014); The Ethics

of Class Action Settlements, Carla Peak, presenter, CHICAGO BAR ASSOCIATION, Class Action

Committee (June 2014); Pitfalls of Class Action Notice and Settlement Administration,

accredited CLE Program, presented by Carla Peak and Robert DeWitte at Harke Clasby &

Bushman LLP in Miami (March 2014), Gina Intrepido-Bowden and Robert DeWitte

presenters/panelists, PRACTISING LAW INSTITUTE (PLI), Class Action Litigation 2013 (July

2013); The Fundamentals of Settlement Administration, accredited CLE Program, presented by

Carla Peak and Steven Weisbrot at DLA Piper LLP in Philadelphia (August 2013), presented by

Carla Peak and Robert DeWitte at Locke Lord LLP in Chicago and broadcast to offices in

California, Georgia, New York, Texas and London (April 2013), presented by Gina Intrepido-

Bowden and Robert DeWitte at Skadden, Arps, Slate, Meagher & Flom LLP and Wexler

Wallace LLP in Chicago (January 2013), presented by Gina Intrepido-Bowden and Robert

DeWitte at Hinshaw & Culbertson LLP in Chicago (October 2012), and presented by Gina

Intrepido-Bowden and Rob Taylor-Manning at Spector Roseman Kodroff & Willis, P.C. in

Philadelphia (December 2011); Designing a Settlement and Notice Program to Minimize

Scrutiny and Objections, Gina Intrepido-Bowden presenter/panelist, AMERICAN CONFERENCE

INSTITUTE (ACI), 16th National Conference on Consumer Finance Class Actions & Litigation



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(July 2013); Class Action Settlement Administration Tips & Pitfalls on the Path to Approval,

accredited CLE program, presented by Carla Peak, Gina Intrepido-Bowden & Robert DeWitte at

Jenner & Block in Chicago and broadcast to offices in Washington DC, New York and Los

Angeles (October 2012); Perspectives from Class Action Claims Administrators: Innovations in

Notification, Gina Intrepido-Bowden, presenter/panelist, CLE INTERNATIONAL, 8th Annual Class

Actions Conference (May 2012); Innovations in Notification, Carla Peak, presenter, CHICAGO

BAR ASSOCIATION, Class Litigation Committee Spring Seminar (May 2012); Ethical

Considerations in Canadian Class Actions, accredited CLE Program, presented by Gina

Intrepido-Bowden and Robert Taylor-Manning at Rochon Genova, LLP in Toronto (April 2012);

Reaching Class Members & Driving Take Rates, Gina Intrepido-Bowden, presenter/panelist,

CONSUMER ATTORNEYS OF SAN DIEGO, 4th Annual Class Action Symposium (October 2011);

Legal Notice Ethics, accredited CLE Program, presented by Gina Intrepido-Bowden, Carla Peak,

and Elizabeth Grande at Heins Mills & Olson, P.L.C., Lockridge Grindal Nauen P.L.L.P., and

Chestnut Cambronne in Minneapolis (January 2011), at Berger & Montague, P.C., Anapol

Schwartz, Lundy Law and Dechert LLP, in Philadelphia, and broadcast to Dechert offices in

California, New Jersey, New York, North Carolina, Texas, Washington D.C., and London and

sent via video to their office in China (October 2010); Class Actions 101: Best Practices and

Potential Pitfalls in Providing Class Notice, CLE Program, presented by Brian Christensen, Gina

Intrepido, and Richard Simmons, to the KANSAS BAR ASSOCIATION (March 2009).

13. We have been recognized by courts for our opinion as to which method of

notification is appropriate for a given case and whether a certain method of notice represents the

best notice practicable under the circumstances. For example:

a. Honorable Lynn Adelman, Fond du Lac Bumper Exchange, Inc. v. Jui Li

Enterprise Co., Ltd. (Indirect Purchaser–Tong Yang Settlement), (January 14, 2016) No.

2:09-CV-00852 (E.D. Wis.):

The form, content, and methods of dissemination of Notice of the Settlements to the Settlement Class were reasonable, adequate, and constitute the best notice practicable under the circumstances. The Notice, as given, provided valid, due, and sufficient notice of the Settlements, the terms and conditions set forth in the Settlements, and these proceedings to all persons and entities entitled to such



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notice, and said notice fully satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure and due process requirements.

b. Honorable Mitchell D. Dembin, Lermin v. Schiff Nutrition International,

Inc., (November 3, 2015) No. 3:11-CV-01056 (S.D. Cal.):

The Court finds this notice (i) constituted the best notice practicable under the circumstances, (ii) constituted notice that was reasonably calculated, under the circumstances, to apprise the putative Class Members of the pendency of the action, and of their right to object and to appear at the Final Approval Hearing or to exclude themselves from the Settlement, (iii) was reasonable and constituted due, adequate, and sufficient notice to all persons entitled to be provided with notice, and (iv) fully complied with due process principles and Federal Rule of Civil Procedure 23.

c. Honorable Lynn Adelman, Fond du Lac Bumper Exchange, Inc. v. Jui Li

Enterprise Co., Ltd. (Direct Purchaser–Gordon Settlement), (May 5, 2015) No. 2:09-CV-

00852 (E.D. Wis.):

The Court approves the forms of the Notice of proposed class action settlement attached to the Declaration of Carla Peak (“Peak Decl.”) at Exhibit 1 (Long-Form Notice and Summary/Publication Notice). The Court further finds that the mailing and publication of the Notice in the manner set forth below and in the Peak Decl. is the best notice practicable under the circumstances; is valid, due and sufficient notice to all Settlement Class members; and complies fully with the requirements of Federal Rule of Civil Procedure 23 and the due process requirements of the Constitution of the United States. The Court further finds that the forms of Notice are written in plain language, use simple terminology, and are designed to be readily understandable by Settlement Class Members. The Notice Program set forth herein is substantially similar to the one set forth in the Court’s April 24, 2015 Order regarding notice of the Tong Yang Settlement (ECF. No. 619) and combines the Notice for the Tong Yang Settlement with that of the Gordon Settlement into a comprehensive Notice Program. To the extent differences exist between the two, the Notice Program set forth and approved herein shall prevail over that found in the April 24, 2015 Order.

d. Honorable Sara I. Ellis, Thomas v. Lennox Industries Inc., (July 9, 2015)

No. 1:13-CV-07747 (N.D. Ill.):

The Court approves the form and content of the Long-Form Notice, Summary Notice, Postcard Notice, Dealer Notice, and Internet Banners (the “Notices”) attached as Exhibits A-1, A-2, A-3, A-4 and A-5 respectively to the Settlement Agreement. The Court finds that the Notice Plan, included in the Settlement Agreement and the Declaration of Gina M. Intrepido-Bowden on Settlement Notice Plan and Notice Documents, constitutes the best practicable notice under the circumstances as well as valid, due and sufficient notice to all persons entitled thereto, and that the Notice Plan complies fully with the requirements of Federal



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Rule of Civil Procedure 23 and provides Settlement Class Members due process under the United States Constitution.

e. Honorable José L. Linares, Demmick v. Cellco Partnership, (May 1, 2015)

No. 2:06-CV-2163 (D. N.J.):

The Notice Plan, which this Court has already approved, was timely and properly executed and that it provided the best notice practicable, as required by Federal Rule of Civil Procedure 23, and met the “desire to actually inform” due process communications standard of Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)… The Court thus affirms its finding and conclusion in the November 19, 2014 Preliminary Approval Order that the notice in this case meets the requirements of the Federal Rules of Civil Procedure and the Due Process Clause of the United States and/or any other applicable law. All objections submitted which make mention of notice have been considered and, in light of the above, overruled.

14. Additional court comments referencing our work are included in our c.v.

15. In forming my opinions, I draw from my in-depth class action case experience. I

have been working in the class action notification field for over a decade, with my primary

responsibility focused around drafting plain language notice documents. The notices I design are

written in clear, concise plain language. They satisfy the plain language requirements of Rule 23

and adhere to the guidelines set forth in the Manual for Complex Litigation, Fourth and by the

Federal Judicial Center (FJC), as well as applicable state laws. I worked with the parties to

prepare the notice documents proposed in this case, ensuring that they are noticeable, concise,

and well understood.

NOTICE PLAN SUMMARY

16. We designed the Notice Plan to reach Class Members with noticeable Notices that

they will understand and be able to act upon if they so choose. The Notice Plan effectively

reaches the Class through an Email and Postcard Notice effort that will be sent directly to all

identifiable Class Members. The individual notice effort will be supplemented with notice

placements in the Los Angeles and San Francisco regional editions of USA Today.

Case Analysis

17. The following known factors were considered when determining our

recommendation: (1) the Class consists of all persons who, while in the State of California, and

between June 11, 2011, and the present (the “Class Period”), purchased from Kohl’s one or more



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items at a discount of at least 30% off of the stated “original” or “regular” price, and who have

not received a refund or credit for their purchase(s); (2) based on records maintained by Kohl’s,

direct contact information is available for approximately 6,978,424 Class Members (and even

this number is over-inclusive because it does not remove customers who may already have

received refunds for their qualifying purchases); (3) individual notice can be provided to these

Class Members; and (4) although it is not known how many other additional Class Members

exist for whom direct contact information is not available, it is our understanding that the total

Class size could be as big as 8,850,000.

Individual Notice

18. An Email Notice containing a summary of the settlement in the body of the email,

as well as a link to the settlement website will be sent to all available email addresses. It is our

understanding that email addresses are available for approximately 5,029,068 Class Members.

19. A Postcard Notice will be mailed to all Class Members for which only a postal

address is available, as well as to all email addresses that bounced back for which we have a

corresponding postal address.

20. Prior to the mailing, the addresses will be checked against the National Change of

Address (NCOA)2 database maintained by the United States Postal Service (USPS); certified via

the Coding Accuracy Support System (CASS);3 and verified through Delivery Point Validation

(DPV).4

21. Notices returned as undeliverable will be re-mailed to any address available

through postal service information. For example, such notices would be mailed to the address

provided by the USPS on returned pieces for which the automatic forwarding order has expired,

but is still within the period that the USPS returns the piece to us with a new address provided on

the forwarding order expiration sticker.

2 The NCOA database contains records of all permanent change of address submissions received by the USPS for the last four years. The USPS makes this data available to mailing firms and lists submitted to it are automatically updated with any reported move based on a comparison with the person’s name and last known address. 3 Coding Accurate Support System is a certification system used by the USPS to ensure the quality of ZIP+4 coding systems. 4 Records that are ZIP+4 coded are then sent through Delivery Point Validation to verify the address and identify Commercial Mail Receiving Agencies. DPV verifies the accuracy of addresses and reports exactly what is wrong with incorrect addresses.



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22. We expect the individual notice effort to reach at least 70.6% of Class Members.

This reach calculation is very conservative as it assumes the largest possible estimated class size

of 8.85 million without removing those shoppers who returned their product for a refund of the

full purchase price.

Supplemental Media Efforts

23. To supplement the individual notice effort, a quarter-page Summary Notice will

appear once in the Los Angeles and San Francisco regional editions of USA Today.

Case Website

24. An informational website will be established that will allow Class Members the

ability to obtain additional information and documents about the settlement. The website will

contain relevant case documents, important dates, answers to frequently asked questions, and

will allow Class Members to file a claim online. The website address will be prominently

displayed in all printed notice materials and accessible through an embedded hyperlink in the

email notice.

Toll-Free Number

25. A toll-free number will be established to allow a simple way for Class Members

to learn more about the settlement in the form of frequently asked questions and answers. It will

also allow Class Members to request to have more information mailed directly to them. The toll-

free number will be prominently displayed in all printed notice materials.

Reach

26. The individual notice effort alone is expected to reach at least 70.6% of the Class.

Coverage will be further enhanced by paid notice placements in the Los Angeles and San

Francisco regional editions of USA Today.

Notice Design

27. The Notices have been designed to be “noticed” and understood by Class

Members. They contain easy-to-read summaries of all of the key information affecting Class

Members’ rights and options. All information required by Federal Rule of Civil Procedure 23, as

well as the Manual for Complex Litigation, Fourth, has been incorporated into the notice



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documents. Many courts, as well as the FJC, have approved notices that have been written and

designed in a similar fashion.

CONCLUSION

28. The Notice Plan will effectively reach the vast majority of the Class by way of the

individual notice effort alone. This effort will be further enhanced by the supplemental media

efforts. The Notice Plan has been designed to deliver “noticeable” Notices that will capture Class

Members’ attention and provide them with information necessary to understand their rights and

options.

29. In my opinion, the Notice Plan is consistent with other effective notice programs.

It is the best notice practicable and meets the “desiring to actually inform” due process

communications standard set forth in Mullane v. Central Hanover Trust, 339 U.S. 306, 315

(1950).

30. At the conclusion of the Notice Plan, we will provide a final report verifying its

adequacy and effective implementation.



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I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct.

Executed this 14th day of March, 2016, at Sellersville, Pennsylvania.

Carla A. Peak © 2016 KCC


35830365v1

DECLARATION OF JAMES F. SPEYER IN SUPPORT OFPRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

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ARNOLD & PORTER LLPJames F. Speyer (Bar No. 133114)[email protected]. Alex Beroukhim (Bar No. 220722)[email protected] Light (SBN 293858)[email protected] Figueroa Street, 44th FloorLos Angeles, California 90017Telephone: (213) 243-4000Fax: (213) 243-4199

Attorneys for DefendantKohl’s Department Stores, Inc.



STEVEN RUSSELL, et al.,

Plaintiff,

v.

KOHL’S DEPARTMENT STORES,INC.,

Defendant.

))))))))))))))))))))))

CASE NO. 5:15-CV-01143-RGK-SP

DECLARATION OF JAMES F. SPEYERIN SUPPORT OF PRELIMINARYAPPROVAL OF CLASS ACTIONSETTLEMENT

Judge: Hon. R. Gary KlausnerCrtrm: 850Date: April 11, 2016Time: 9:00 a.m.

Action Filed: June 11, 2015


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- 1 -DECLARATION OF JAMES F. SPEYER IN SUPPORT OF

PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

DECLARATION OF JAMES F. SPEYER

I, James F. Speyer, hereby declare as follows:

1. I am a member of the Bar of this Court and a partner with Arnold &

Porter LLP. I make this declaration on behalf of defendant Kohl’s Department

Stores, Inc. (“Kohl’s”) in support of Plaintiffs’ Motion for Preliminary Approval of

Class Action Settlement.

2. As described more fully below, the parties in this action have reached a

comprehensive class-wide settlement that provides both monetary and injunctive

relief. This settlement is the result of extensive arms-length negotiations, and I

believe it to be a fair, reasonable, and adequate result for the parties, including the

proposed class.

3. I provide this declaration in support of the settlement, since “[o]ne of the

factors most courts consider is the fact that the settlement is supported by experienced

counsel.” Newberg on Class Actions § 13:53 (5th ed.) (“the settling parties will often

include affidavits or declarations from class and defendants’ counsel attesting to the

substantive strength of the settlement and the arms-length nature of the settlement

process”). I identify below information regarding my qualifications in class action

litigation, the facts surrounding the negotiations of the settlement, and why I believe

the settlement should be approved.

Background And Class Action Experience

4. I am a 1985 graduate of The George Washington University Law

School. After law school, I worked for five years at the law firm of Hughes Hubbard

& Reed in New York and Los Angeles. In 1991, I began working at Arnold & Porter

LLP, and I became a partner there in 1993. In 2005, I transferred to Heller Ehrman in

Los Angeles, where I served as Chair of the litigation practice group. I rejoined

Arnold & Porter in 2008.

5. Over the course of my career, I have defended dozens of class actions in

federal and state courts around the country. Most of these cases were either


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consumer class actions or franchisee class actions. As reflected in my attached

professional biography, I have written and spoken extensively on class action topics.

(See Exhibit A attached hereto.)

Hard Fought And Arm’s Length Settlement Negotiations

6. Plaintiffs filed their lawsuit on June 11, 2015, and filed their First

Amended Complaint (“FAC”) on August 14, 2015. The underlying basis for the

claims in the FAC is Plaintiffs’ allegation that Kohl’s improperly “inflated” its

“original” and/or “regular” prices in order to make its sale prices appear more

attractive to consumers.

7. Kohl’s moved to dismiss the FAC on August 31, 2015, arguing among

other things that Plaintiffs were not entitled to any monetary relief in this action

because they had not alleged (and could not allege) that any item they purchased was

worth less than what they paid for it.

8. On September 16, 2015, and while the motion to dismiss was pending,

Plaintiffs filed their class certification motion. Plaintiffs did not at that time seek

certification of a Rule 23(b)(3) class.

9. Before the Court ruled on either the motion to dismiss or the motion for

class certification, the California Court of Appeal issued its opinion in In re Tobacco

Cases II, 240 Cal. App. 4th 779 (September 28, 2015) (Tobacco II). There, the court

held that in circumstances where a plaintiff has obtained at least some value from his

purchase, the “price paid minus value received” formula constitutes “the proper

measure of restitution” under the Unfair Competition Law or False Advertising Law.

Id. at 794, 796 (emphasis added); see id. at 802 (holding that trial court “lacked

discretion to award restitution” because plaintiffs “did not establish any price/value

differential.”). The Tobacco II court made clear that restitution was unavailable

without a “showing of loss,” which it defined as a price/value differential, and that

restitution must take into account the value received by the plaintiff. Id. at 802. It

further held that where a plaintiff has received some value for his payment, an award


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of a full refund or profits would constitute an award of nonrestitutionary

disgorgement, which is impermissible under the UCL and FAL. Id. at 801.

10. The California Supreme Court denied the Tobacco II plaintiffs’ petition

for review and request for depublication on December 9, 2015. Tobacco II thus

stands as the definitive word on monetary relief under the UCL and FAL in false

advertising cases.

11. In Spann v. J.C. Penney, 2015 WL 1526559, CV 12–0215 FMO (RNBx)

(March 23, 2015, C.D. Cal.), which was decided before Tobacco II, the court

authorized “alternative measures” of restitution that would allow recovery under the

UCL and FAL without any “showing of loss” and without taking into account the

value received by the plaintiff. Id. at *5-8. This is irreconcilable with Tobacco II.

The Tobacco II court also expressly rejected the notion espoused in Spann that a full

refund or profits could be awarded in circumstances where the plaintiff has received

some value for his purchase. Tobacco II, 240 Cal. App. 4th at 801-02.

12. This Court denied Kohl’s motion to dismiss on October 6, 2015, noting

that “[w]hile it remains to be seen whether Plaintiffs can adduce sufficient evidence

of a measurable amount of restitution, such an inquiry [was] premature” at the

pleading stage. (Doc. 32 at 5-6.)

13. On December 4, 2015, the Court certified the class for purposes of

injunctive relief only. The Court did not address the propriety of certifying a class

seeking monetary relief under Rule 23(b)(3).

14. Against this backdrop, the parties began to explore the possibility of a

comprehensive settlement in December 2015.

15. Those discussions led to an agreement by the parties to attempt to reach

resolution through mediation. On January 29, 2016, the parties held an all-day

mediation session overseen by the Honorable Eugene F. Lynch (Ret.) at JAMS.

16. Pursuant to this mediation process, the parties exchanged information

(such as information regarding the potential size of the class, the particular purchases


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by the individual Plaintiffs, and Kohl’s pricing policies) and submitted detailed

mediation briefs. At the all-day mediation session, the parties made substantial

progress towards a settlement, but they were unable to finalize an agreement.

17. After the mediation, the parties continued to discuss settlement, both

directly and through several follow-up telephone calls with Judge Lynch.

18. The parties were eventually able to finalize a binding term sheet with all

material terms, and they exchanged signatures on February 16, 2016.

19. Judge Lynch has told the parties that he believes the settlement to be

appropriate, and he is willing to discuss the matter with the Court should the Court be

so inclined. Kohl’s waives its confidentiality rights under the mediation privilege for

the limited and sole purpose of communications between Judge Lynch and the Court.

20. Since February 16, the parties have worked diligently to convert the

material terms in the signed term sheet into a formal settlement agreement, which is

now being presented to the Court.

The Settlement Is Fair, Reasonable, and Adequate

21. In light of Tobacco II, it is highly unlikely that plaintiffs or members of

the putative class could recover any monetary relief if this case were litigated to its

conclusion. Under Tobacco II, the price/value differential “sets forth the proper

measure of restitution” in circumstances where plaintiff has obtained at least some

value for his payment. Tobacco II, 240 Cal. App. 4th at 794 (emphasis added).

There is no question here that plaintiffs have obtained some value for their payment.

The sole question then becomes whether plaintiffs can establish any price/value

differential. With respect to that question, it is significant that (1) plaintiffs have not

even alleged any price/value differential, and (2) plaintiff in the later-filed Chowning

copycat action was, in opposition to Kohl’s summary judgment motion, unable to

adduce any evidence of any price/value differential. This is not surprising, given that

plaintiffs’ theory of the case is simply not based on the proposition that they received

products worth less than the amount they paid. Nor could it be, given the excellent


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value that Kohl’s consistently provides to its customers. Moreover, even if plaintiffs

were able to show a price/value differential with respect to certain purchases, there is

no indication that they would be able to do this on the requisite common, class-wide

basis.

22. The material impact of Tobacco II has been recognized by plaintiffs’

counsel in the Spann case. These plaintiffs’ lawyers are the same lawyers who

represent the plaintiff in Chowning.

23. In Spann, the parties reached a settlement eighteen days before the

Tobacco II opinion was issued. (See Declaration of Matthew J. Zevin in Support of

Unopposed Motion for Modification of Class Certification Order; Preliminary

Approval of Settlement and Notice Program, ¶ 13 [Spann Docket # 246-2] (noting

that short form settlement agreement in Spann executed on September 10 and 11,

2015) (attached hereto as Exhibit B).) The parties agreed to settlement terms

knowing that the decision in Tobacco II was forthcoming. (Id. at ¶ 15.) The Spann

settlement approval papers acknowledge that the settlement negotiations took into

account the fact that the looming Tobacco II opinion might tip the balance of

negotiating power one way or the other. As the Spann plaintiffs put it in their brief in

support of preliminary approval of the settlement, “the Parties negotiated the

Settlement fully aware that the potentially pivotal Tobacco decision was

forthcoming,” and that a decision adverse to plaintiffs in Tobacco II could “result in

zero recovery” if the Spann case was litigated to its conclusion. (See Memorandum

of Points and Authorities in Support of Plaintiff’s Unopposed Motion for

Modification of Class Certification Order; Preliminary Approval of Settlement, at 21

[Spann Docket # 246-1] (excerpt attached hereto as Exhibit C).)

24. Tobacco II did indeed prove to be, in the words of the Chowning/Spann

plaintiffs’ counsel, “pivotal.” After Tobacco II, the balance of negotiating power

shifted decisively in favor of defendants in these types of cases.


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25. Kohl’s recognizes, however, that, as in any case, there is some risk that

Plaintiffs could prevail in this lawsuit, even in the face of Tobacco II.

26. Balancing all of this background and risk on both sides, the settlement

reached by the parties here is fair, reasonable, and adequate.

27. With respect to the monetary relief provided to the class, the parties have

agreed to a substantial settlement fund that will provide tangible economic benefit to

those class members who respond with valid claims using a simple form that requires

only that the person attest that he or she is a member of the settlement class. While

the exact amount each settlement class member will receive will not be determined

until after the notices are disbursed, the claims are processed, and the fees and costs

first deducted from the overall settlement fund, a reasonable estimate would be that

each settlement class member should receive the cash equivalent of $20 or more in

the form of a Kohl’s gift card.

28. Kohl’s is one of the nation’s largest department store chains, offering a

huge number of quality items at low prices. Many of those items are in the $5-20

range. Settlement class members who file a claim, each of whom has by definition

indicated that they are interested in the products offered by Kohl’s, will have many

ways to use their gift cards, either by buying a lower-priced item or by applying their

card towards the price of a higher-priced item. Particularly in light of the likelihood

that if litigated the putative class would receive no monetary relief at all, this result is

more than fair, reasonable, and adequate.

29. With respect to injunctive relief, the settlement class also is receiving a

material benefit. Kohl’s has committed that its comparative advertising and pricing

practices will comply with the law and that it will continue to enhance and expand

programs intended to promote pricing compliance with those legal requirements.

These programs will include the development and roll-out of enhanced pricing

compliance computer systems, as well as implementing pricing compliance training

targeted at relevant buying office personnel. This training will be offered on a


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regular basis to ensure that new hires are also appropriately trained. This is a

substantial benefit both for the settlement class and consumers going forward.

I declare under penalty of perjury under the laws of the United States that the

foregoing is true and correct, and that this declaration was executed at Los Angeles,

California, on March 14, 2016.

/s/ James F. SpeyerJames F. Speyer
