class action on sms spam: stonebridge settlement agreement

8/13/2019 Class action on SMS spam: Stonebridge Settlement Agreement

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Sean Reis (SBN 184044)

[email protected] Tomas Street, Suite 300Rancho Santa Margarita, California 92688Tel: 949.459.2124Fax: 949.459.2123

Ryan D. Andrews (Pro Hac Vice)John C. Ochoa (Pro Hac Vice)Edelson LLC

350 North LaSalle, Suite 1300Chicago, Illinois 60654Tel: 312.589.6370Fax: [email protected]@edelson.com

Attorneys for Plaintiff and the Class

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

JESSICA LEE, individually and on behalf of aClass of similarly situated individuals,

Plaintiff,

v.

STONEBRIDGE LIFE INSURANCECOMPANY, a Vermont corporation, and

TRIFECTA MARKETING GROUP LLC, aFlorida limited liability company,

Defendants.

No. CV 11-0043-RS

PLAINTIFFS NOTIC

AND MOTION FOR P

APPROVAL OF PART

ACTION SETTLEME

Date: December 12, 201

Time: 1:30 p.m.

Judge: Hon. Richard SeeMagistrate: Hon. Jacque

Case3:11-cv-00043-RS Document142 Filed10/23/13 Page1 of


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NOTICE OF MOTION

NOTICE IS HEREBY GIVENthat on December 12, 2013 at 1:30 p.m

time as may be set by the Court, Plaintiff will move the Court, pursuant to Fed

Procedure 23(e), to grant preliminary approval of the class action settlement r

and Defendant Trifecta Marketing Group LLC, and attached hereto as Exhibit

17th Floor, 50 Golden Gate Avenue, San Francisco, CA 94102, before the Ho

Seeborg.

The Motion is based on this Notice of Motion, the Memorandum of Po

oral argument of counsel, all documents in the record, and any other matter th

at the hearing.

Dated: October 23, 2013 Respectfully Submitted,

JESSICA LEE, individually andClass of similarly situated indivi

/s/ Ryan D. Andrews

RYAN ANDREWS (Pro Hac ViJOHN C. OCHOA (Pro Hac VicEdelson LLC350 North LaSalle, Suite 1300Chicago, Illinois 60654Tel: 312.589.6370

Fax: [email protected]@edelson.com



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I. INTRODUCTION................................................................................II. NATURE OF THE LITIGATION.....................................................

A. The TCPA.......................................................................................B. The Facts.........................................................................................

1. Stonebridge and its Marketing Partner Trifecta .........................

2. Trifecta creates an in-house SMS Platform to transmit text mes

inbound calls to its call centers to Promote Stonebridge Produc

C. The Litigation History...................................................................D. Trifectas Position..........................................................................

III. TERMS OF THE SETTLEMENT AGREEMENT..........................A. Class Definition...............................................................................B. Settlement Benefits.........................................................................

1. Injunctive Relief: ........................................................................

2. Full Cooperation and Provision of Evidence .............................

C. Release.............................................................................................IV. THE PROPOSED SETTLEMENT FALLS WITHIN THE RANG

POSSIBLE APPROVAL AND THUS WARRANTS PRELIMINAAPPROVAL.........................................................................................

A. The Settlement Is Fair, Reasonable, and Adequate Under the C1. The Settlement Provides Strong Injunctive Relief .....................

2. The Settlement Requires Trifecta to Aid Plaintiffs in Seeking F

Recovery from Stonebridge .......................................................

V. THE PROPOSED PLAN TO NOTIFY THE CLASS OF THE SETA Di t N ti



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VI. CONCLUSION.....................................................................................



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Table of Authorities

United States Supreme Court Cases:

Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) ..........................................

Mims v. Arrow Fin. Servs. LLC, 132 S. Ct. 740 (2012) .....................................

Protective Comm. for Indep. Stockholders v. Anderson, 390 U.S. 414(1968)..

United States Circuit Court of Appeals Cases:

Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) .................................

In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) .........

In re Pac. Enters. Sec. Litig., 47 F.3d 373 (9th Cir. 1995) ...............................

In re Syncor ERISA Litig., 516 F.3d 1095 (9th Cir. 2008) .................................

Officers for Justice v. Civil Serv. Commn, 688 F.2d 615 (9th Cir. 1982) .........

Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) .................

Waller v. Fin. Corp. of America, 828 F.2d 579 (9th Cir. 1987) ..............................

United States District Court Cases:

Aramburu v. Healthcare Fin. Servs., Inc.,No. 02CV6535, 2009 WL 1086938 (E.D.N.Y. Apr. 22, 2009) .............

Bruno v. Quten Research Inst., LLC, No. SACV1100173, 2013 WL 990495 (C.D. Cal. March 13, 2013) ..........................

Buckley v. Engle, No. 07CV254, 2010 WL 4064985 (D. Neb. Oct. 14, 2010) .......

Garner v. State Farm Mut. Auto. Ins. Co.,No. CV 08 1365 CW EMC, 2010 WL 1687832 (N.D. Cal. Apr. 22, 20

Gragg v. Orange Cab Co., Inc.,No. C-12-0576, 2013 WL 1788479 (W.D. Wash. Apr. 26, 2013) .........



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In re Packaged Ice Antitrust Litig.,No. 08MD01952, 2011 WL 717519 (E.D. Mich. Feb. 22, 2011) ...........

In re PNC Fin. Servs. Group, Inc., 440 F. Supp. 2d 421 (W.D. Pa. 2006).............

In re Processed Egg Prods. Antitrust Litig., 284 F.R.D. 278 (E.D. Pa. 2012) ........

In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078 (N.D. Cal. 2007) .........

Manfred v. Bennett Law, PLLC,

No. 12-CV-61548, 2012 WL 6102071 (S.D. Fla. Dec. 7, 2012) ...........

Mey v. Monitronics Intl, Inc.,

No. 11-CV-90, 2013 WL 4105430 (N.D. W. Va. Aug. 14, 2013) .........

Savanna Grp., Inc. v. Trynex, Inc., 10 C 7995, 2013 WL 4734004 (N.D. Ill. S

Schwarm v. Craighead, 814 F. Supp. 2d 1025 (E.D. Cal. 2011) .............................

Wehlage v. Evergreen at Arvin LLC,

No. 10cv05839, 2012 WL 2568151 (N.D. Cal. June 25, 2012) .............

Statutes:

Fed. R. Civ. P. 23 ...............................................................................................

28 U.S.C 1715 .................................................................................................

47 U.S.C. 227 ..................................................................................................

Miscellaneous:

Alba & Conte, 4 Newberg on Class Actions (4th ed. 2002) ..............................

In the Matter of the Joint Petition Filed by Dish Network, LLC, the United Sta& the States of California, Illinois, N. Carolina, & Ohio for Declarato

Concerning the Tel. Consumer Prot. Act (TCPA) Rules,2013 WL 1934349, 28 F.C.C.R. 6574 (May 9, 2013) ...........................

Manual for Complex Litigation (3d ed. 1995) ...................................................



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I. INTRODUCTION

Plaintiff has agreed to settle the Class Action with Trifectawho is un

a monetary settlement or withstand a judgmentin exchange for the entry of

injunction and its assistance in continuing to prosecute this case against its co

Stonebridge Life Insurance Companythe ultimate beneficiary of the text me

sent to the Class.

This proposed class action settlement arises after more than two-and-a

contentious and hard fought litigation between Jessica Lee (Plaintiff) and D

Stonebridge Life Insurance Company (Stonebridge) and Trifecta Marketing

(Trifecta) (collectively, Defendants) over the transmission of nearly 60,00

messages sent to Plaintiff and a Class of individuals like her that Defendants h

generate leads for the sale of Stonebridges life insurance products.

Plaintiff brought this Action alleging that Stonebridge contracted with

unsolicited text messages en massewith the use of an automated telephone di

(ATDS) to cell phones nationwideincluding Plaintiffs ownpromising i

Mart gift card[s] as bait to lure recipients into calling a toll-free telephone nu

Stonebridges products and services. Plaintiff is one of many persons who rec

message1and on February 12, 2013, the Court certified a Class consisting of

received a text message from telephone number 650-283-0793 from Novem

December 2, 2010. (Dkt. 97.) The Court also appointed Plaintiff Jessica Le

Representative, and appointed the undersigned counsel as Class Counsel.

After a failed attempt at reaching a global resolution at mediation and

i l di f T if b fil d T if h d



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satisfy a judgment against it or to fund a class settlement, and after extensive n

parties reached the Class Action Settlement Agreement, a copy of which is att

as Exhibit 1.

As detailed below, in exchange for a release from the Classs claims in

Trifecta has agreed to consent to the entry of an injunction against it and to co

Plaintiff in the continued prosecution of the Action against Stonebridge. In pa

agreed to produce documents and provide the testimony of its officers indicati

authorized the text messaging activities in which Trifecta was involved and th

were being used to bring Stonebridge leads for their insurance products. This

corroborate the documents Stonebridge itself has produced showing it had the

Trifectas use of text message marketing to generate these leads for Stonebrid

products at any time, but never did. Trifectas cooperation is of ever-increasi

and the Class, as Stonebridge has repeatedly taken the position with Class Cou

Court that it was completely unaware of Trifectas use of text message market

control Trifectas actions. Trifecta has also agreed to the entry of an injunctio

transmitting text messages for the next four years, unless it first obtains expre

from the recipients to do so by following rigorous standards that ensure its com

Given Trifectas financial insolubility (neither Plaintiff nor Class Cou

any payments under the Settlement) and the extreme importance of the inform

control to Plaintiffs case, Trifectas complete cooperation in providing docum

to Plaintiff is perhaps the most valuable benefit it could offer the Class. The i

Trifecta is providing to Plaintiff will maximize the chances that Plaintiff and t

d d h i d h TCPA f S b id



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II. NATURE OF THE LITIGATION

A. The TCPA

In enacting the TCPA, Congress sought to prevent intrusive nuisance

telephones that it determined were invasive of privacy. Mims v. Arrow Fin

Ct. 740, 744 (2012);2see also Satterfield v. Simon & Schuster, Inc., 569 F.3d

2009). The TCPA applies with equal force to text message calls as it does to

Satterfield, 569 F.3d at 954. The TCPA prohibits calls made with certain equi

automatic telephone dialing system (ATDS), which Congress defines as

has the capacity (A) to store or produce telephone numbers to be called, using

sequential number generator; and (B) to dial such numbers. 47 U.S.C. 227

clarified that equipment that dials a list of numbers is still an ATDS, because

of such dialing equipment is the samethe capacity to dial numbers withou

intervention. Gragg v. Orange Cab Co., Inc., C-12-0576, 2013 WL 1788479

Apr. 26, 2013) (citingRules and Regulations Implementing the Telephone Co

Act of 1991, 73 Fed.Reg. 6041, 6042 (Feb. 1, 2008)).

The FCC, the agency authorized by Congress to interpret the terms of

pronounced that a seller may be liable for violations by its representatives un

agency principles, including not only formal agency, but also principles of app

ratification. In the Matter of the Joint Petition Filed by Dish Network, LLC,

Am., & the States of California, Illinois, N. Carolina, & Ohio for Declaratory

the Tel. Consumer Prot. Act (TCPA) Rules, 2013 WL 1934349, at *9, 28 F.C.

(May 9, 2013). The FCC explained that incorporating broad agency principal



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important because allowing the seller to avoid potential liability by outsourci

activities to unsupervised third-parties would leave consumers in many cases

remedy for telemarketing intrusions. This would be so if the telemarketers we

. as is often the case. Id.at *12. Mey v. Monitronics Intl, Inc., 5:11-CV-90,

at *5 (N.D. W. Va. Aug. 14, 2013) (holding that the FCC's interpretation of th

under the TCPA to be reasonable and denying defendants' motion for summar

Savanna Grp., Inc. v. Trynex, Inc., 10 C 7995, 2013 WL 4734004, at *5 (N.D

(finding that the FCCDish Networkruling to be the controlling standard of lia

TCPA and denying in part defendant's motion for summary judgment).

The TCPA sets statutory damages in the amount of $500 per violation

injunctive relief prohibiting the further transmission of such messages. See47

227(b)(3)(A-B).

B. The Facts

1. Stonebridge and its Marketing Partner Trifecta

The relationship between Stonebridge and Trifecta extends well beyon

that Stonebridge was being provided with new potential customers from Trife

activities. In April 2010, Stonebridge began discussing possible marketing op

Trifecta. These discussions led to the formation of two contracts, the Call-Ba

entered into on August 18, 2010, as well as a May 27, 2010, Upsell Agreeme

between Trifecta and a Stonebridge affiliate called Stonebridge Benefit Servic

Stonebridge Life and Stonebridge Benefits marketing programs were discusse

the negotiations and performance of both contracts involved the same primary

S b id l 3

Case3:11-cv-00043-RS Document142 Filed10/23/13 Page10 o


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part of the campaigns arose frequently between Stonebridge and Trifecta. Th

text messaging between Stonebridge and Trifecta, which occurred in person, t

over the phone covered:

The use of text messages to drive in-bound calls to Trifectas Stonebridges products would be offered;

Potential text message content (or creative); Potential sources of SMS text messaging traffic from third-par

used to drive additional in-bound calls for Stonebridge produc

The use of Wal-Mart gift card vouchers as the incentive in theused to drive in-bound traffic to promote Stonebridge Benefits

Despite all the emails, meetings, and phone calls, no one at Stonebridge ever t

using text messages to generate in-bound calls to promote its products was for

different methods such as email or Internet banner ads should be used instead

confirmed through the settlement, Stonebridges position in this case that they

messages were being used to generate leads for its products is not grounded in

Stonebridge continued to accept leads generated from Trifecta with the full kn

Trifecta was using outbound text messaging to generate these leads.

While Stonebridge discussed with Trifecta how text messaging was us

performance of their contracts, its insertion into the telemarketing activities of

into other areas as well. For instance, Stonebridge made Trifecta meet deman

about the file format in which lead information was transmitted and how often

was transmitted. Stonebridge also aided in the drafting of all scripts read by T

use of its trademarked name in those scripts, was given access to recordings o

4 F l S b id d h f ll i d i Pl i if



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controlled when its offer would be presented to those who called Trifecta afte

message.

Starting October 16, 2010, in furtherance of the Call-Back Agreement,

messages to millions of individuals encouraging them to call a toll-free teleph

purportedly to receive a $100 Wal-mart gift card. Upon calling the number

to Trifecta telemarketers who offered the caller the opportunity to enter into a

being sponsored by Stonebridge if they agreed to receive a call-back from Sto

about Stonebridges insurance products. Recordings of these calls sometimes

asking the caller what is the cell phone that you received our text message on

provided Stonebridge with prospective customers via this contract through De

2. Trifecta creates an in-house SMS Platform to transmit tdrive inbound calls to its call centers to Promote Stoneb

Although Trifecta used incentive text messages to drive consumers to

text messages were initially sent by third-parties (such as ModernAd Media, T

OpenMarket) and also included Trifecta-licensed toll-free numbers. Use of th

message providers, however, was expensive and did not offer Trifecta the abilvolume of in-bound calls that it desired, so it decided to move its text messagi

house.

During the first few weeks of October 2010, approximately the same t

the Call-Back Agreement began, Trifecta began constructing its own SMS Pla

ordered the hardware components on-linemainly cellular telephone modem

connected them to several PCs and a SQL server database containing lists of c

had purchased. Trifecta simultaneously developed a proprietary software pro


C 3 11 00043 RS D 142 Fil d10/23/13 P 13


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numbers licensed to Trifecta during the Class period and may have offered dif

cards.

In order for the cellular modems to transmit text messages across vario

networks, they required Subscriber Identity Modules, more commonly known

SIM card is associated with a unique, 10-digit cellular telephone number. A T

purchased these SIM cards for use in the SMS Platform from T-Mobile.

Trifecta proceeded to run its SMS Platform in November and Decemb

inbound calls to its call center by sending text messages to the lists of consum

numbers it purchased. But unlike the third-party text message providers, who

messages using 5-digit shortcodes, Trifectas internal SMS Platform transm

using 10-digit telephone numbers, or longcodes. These text messages also

telephone numbers that would be answered at Trifectas call center.

C. The Litigation History

On November 30, 2010, Plaintiff Lee received a text message from lon

283-0793 that read as follows:

Thanks 4 visiting our website please call 877-711-5429 to clawalmart gift card voucher! reply stop 2 unsub

The toll-free telephone number in this text message was licensed exclusively b

the class period, Trifecta also had 299 other active toll-free numbers licensed.

desire nor consent to receive the above-referenced text message in any way. (

Ex. 14, at 12:24 13:7.)5 As a result, on January 4, 2011, Plaintiff filed this A

Stonebridge, on behalf of herself and the Class, in order to stop its ongoing pr

through unsolicited text messages in violation of the TCPA. (Dkt. 1.)


C 3 11 00043 RS D t142 Fil d10/23/13 P 14


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Trifecta as a party-defendant. (Dkt. 34.) Both Defendants filed their answers

complaint, and the Parties began the discovery process. (Dkts. 40, 44.) Plain

Trifecta resulted in the production of virtually no documentsas Trifecta ind

records had been destroyed. Plaintiffs discovery on Stonebridge was met wi

knowledge of Trifectas text-messaging and refusals to produce anything but

documents.

On August 29, 2012, Plaintiff moved for class certification. (Dkt. 69.)

ultimately granted on February 12, 2013. (Dkts. 78-79, 81, 85-86, 88-91, 97.)

is defined as follows:

All individuals that received a text message from telephone number 6

November 28, 2010 through December 2, 2010.

Plaintiff thereafter moved the Court to approve her plan to serve the required

certification on Class Members, and after briefing and some minor alterations

the Notice Plan. (Dkts. 101, 104, 106, 110.)6

After the Courts ruling on Class Certification and the March 7, 2013 C

Conference, Plaintiff propounded substantial merits-based discovery. Plaintif

third-party subpoenas for documents and depositions, and also issued several

interrogatories, requests to admit, and document requests on both Stonebridge

Due to both Stonebridge and Trifectas incomplete responses (in those

where they responded at all), Plaintiff has held multiple telephonic conference

Defendant to discuss discovery. Stonebridge ignored the scope of the docume

making nebulous objections to avoid providing documents relating to its deali

h l d SMS i Af Pl i iff i d l h d



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118.) After the execution of the MOU, Parties negotiated at arms length the

Agreement.

D. Trifectas Position

Trifecta denies any wrongdoing whatsoever, and believes that it has at

continues to deny that it committed, threatened, or attempted to commit, any o

or violations of law or duty that are alleged in the Action, and instead contend

properly. Nonetheless, taking into account the uncertainty and risks inherent

Trifecta has concluded that defense of the Action would be burdensome and e

is desirable and beneficial to fully and finally settle and terminate the Action a

manner and upon the terms and conditions set forth in the Stipulated Settleme

III. TERMS OF THE SETTLEMENT AGREEMENT

The key terms of the Stipulated Settlement Agreement are briefly sum

A. Class Definition:Plaintiff and Defendant Trifecta (the Settlin

into the Settlement Agreement with respect to the following Class definition,

Court (dkt. 97): All individuals that received a text message from telephone nu

0793 from November 28, 2010 through December 2, 2010.

B. Settlement Benefits

1. Injunctive Relief:

Trifecta agrees to consent to the entry of an injunction against it, desig

Trifectaas well as those parties with which it contractsfrom transmitting

text messages for no fewer than four (4) years. (Settlement Agreement, 2.1.)

injunction will require:

(1) Th T if h ll k i h h




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(2) That any contract Trifecta enters into regarding the transmi

messages must expressly require parties to the contract who obtain consumer

to keep documented proof of all such prior express consent received for no les

and

(3) That any such contract Trifecta enters into require that said

consent be obtained in writing, and that if any cell phone numbers are obtain

must require the clear and affirmative authorization on the part of the consume

telephone number may be sent any text messages from Trifecta or parties with

(Id.)

Moreover, any costs associated with this injunction will be paid in full

2.2.)

2. Full Cooperation and Provision of Evidence:

Trifecta agrees to provide Plaintiff and Class Counsel with its complet

cooperation in the continued prosecution of the Action against Stonebridge, in

any trial and through any appeals. In furtherance of its agreement to cooperat

specifically agreed to provide, without objection:

(1) Declarations, testimony and all others documents, truthfully

Stonebridge had knowledge of and authorized the text messaging that was per

Back Agreement, including the message sent to Plaintiff and the Class;

(2) Declarations, testimony and all others documents, truthfully

Trifectas causing to be sent the text messages to the Class for the Call-Back A

Stonebridge;

(3) D l i i d ll h d hf ll

Case3:11 cv 00043 RS Document142 Filed10/23/13 Page17 o



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(5) Declarations and all other documents related to Stonebridge

messaging campaigns (including the Call-Back Agreement) or that could be u

Stonebridges potential liability or its failure to produce documents to Plaintif

(6) Declarations and financial documents supporting Trifectas

it is financially unable to sustain a judgment or to significantly contribute to a

settlement with the Class; and

(7) Truthful sworn answers to Plaintiffs First Request to Adm

other discovery identified by Class Counsel. (Id.)

The Settlement provides that should Trifecta fail to fulfill its obligation

promised documents and testimony identified above, Plaintiff may terminate t

6.2.) Further, Trifecta has agreed to provide confirmatory discovery, includ

discovery, to confirm their material representations concerning its lack of app

coverage and financial condition that form the basis of this Agreement. (Id.

C. Release

The obligations incurred pursuant to this Settlement Agreement shall b

a final order approving this Settlement, a full and final disposition of the Actio

against Trifecta and each of its related affiliates and entities. (Id. 3.1.) Upo

Agreement is finally approved by the Court, the Plaintiff and Members of the

shall be deemed to have fully, finally, and forever released, relinquished, and

arising out of this Action, against Trifecta and each of its related affiliates and

The Agreement does not release Stonebridge, any of its affiliates, or any other

marketing partners.

Case3:11 cv 00043 RS Document142 Filed10/23/13 Page18 o



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range of possible approval. Newberg, 11.25 at 3839 (quotingManual for C

30.41 (3d ed. 1995));see also In re Tableware Antitrust Litig., 484 F. Supp. 2

Cal. 2007);In re Syncor ERISA Litig., 516 F.3d 1095, 1110 (9th Cir. 2008). T

fairness hearing. Id. Its purpose, rather, is to ascertain whether there is any re

class members of the proposed settlement and to proceed with a fairness heari

approval should be given and notice of a settlement should be sent where the

appears to be the product of serious, informed, non-collusive negotiations, has

deficiencies, does not improperly grant preferential treatment to class represen

of the class, and falls within the range of possible approval. In re Tableware

1079.

A strong judicial policy exists that favors the voluntary conciliation an

complex class action litigation. In re Syncor ERISA Litig., 516 F.3d 1095, 11

(citing Officers for Justice v. Civil Serv. Commn, 688 F.2d 615 (9th Cir. 1982

district court has discretion regarding the approval of a proposed settlement, it

deference to the private consensual decision of the parties. Hanlon v. Chrysl

1011, 1027 (9th Cir. 1998);see also Garner v. State Farm Mut. Auto. Ins. Co

CW EMC, 2010 WL 1687832, at *8 (N.D. Cal. Apr. 22, 2010). Further, whe

negotiated at arms length by experienced counsel, there is a presumption that

reasonable. In re Pac. Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995).9

Courts role is to ensure that the settlement is fundamentally fair, reasonable,

9Plaintiffs settlement with Trifecta is entitled to such a presumption hereby Class Counsel who have extensive experience in TCPA text messaging cla

i l i ll (S D l i f R D A d

g



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R. Civ. P. 23(e)(2);In re Syncor, 516 F.3d at 1100.

A. The Settlement Is Fair, Reasonable, and Adequate Under t

In light of Trifectas financial situation, the Settlement is demonstrably

adequate and is of considerable value to the Class. Basic to [analyzing a pro

every instance, of course, is the need to compare the terms of the compromise

rewards of the litigation.)Protective Comm. for Indep. Stockholders v. Ande

42425 (1968). If Trifecta and Stonebridgeare found to have violatedthe TCor vicariouslythey are jointly and severally liable for a statutory penalty of

as well as an injunction prohibiting any future transmission of such messages

227(b)(3)(A-B);In re Dish Network, 2013 WL 1934349, 28;see Manfred v.

12-CV-61548, 2012 WL 6102071 (S.D. Fla. Dec. 7, 2012). Plaintiffs Settlem

includes the statutory injunction provided for under the TCPA and provides fo

testimony that gives Plaintiff the means to obtain full monetary statutory dam

from Stonebridge.

1. The Settlement Provides Strong Injunctive Relief

Through the Settlement with Trifecta, the Class has obtained one of the p

sought by the Complaint: a comprehensive injunction designed to halt the transm

text messages. This injunction thus creates a substantial benefit for Class Membe

consumers nationwide. See, e.g., Wehlage v. Evergreen at Arvin LLC, No. 4:10

WL 2568151, at *1 (N.D. Cal. June 25, 2012) (holding that a stipulated injunctio

with a poor financial condition requiring that its practices comply with the law

value and obtains fair and adequate relief for the [c]lass); Schwarm v. Craighead

1025 1029 (E D C l 2011) ( l i i h h h [ ]l b



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Privacy Litig., No. 5:11CV00379 EJD, 2013 WL 1120801, at *5 (N.D. Cal. M

(holding that the value of the injunctive relief in a settlement weigh[ed] strong

approval). Here, the injunction consented to by Trifecta not only bars it from tra

message advertisements without first ensuring that prior express consent from the

is obtained, it creates detailed requirements for obtaining consent, and maintainin

express consent of those persons who gave it. (Settlement Agreement, 2.1.) M

requirements extend to any party with which Trifecta contracts, a restriction that

obtained if Plaintiff received a favorable judgment against Trifecta. (Id.) As suc

afforded by the Settlement supports finding Plaintiffs agreement with Trifecta to

range of possible approval.

2. The Settlement Requires Trifecta to Aid Plaintiffs In SeRecovery From Stonebridge

The other component to Plaintiffs Settlement with Trifecta is designe

Counsel with the evidence it needs to secure a full monetary statutory judgme

Stonebridge. Although Plaintiff and the Class would be entitled to recover m

damages directly from Trifecta should they prevail at summary judgment or tr

obtain funds that do not exist. (Settlement Agreement, at Recitals, Part C.) Th

judgment or settlement is a valid consideration in the negotiation and evaluati

agreement. See Wehlage, 2012 WL 2568151, at *1 (the [c]ollectability of a jud

the reasonableness of a settlement in relation to the defendants ability to withstan

(internal quotations omitted) (brackets in original);Aramburu v. Healthcare Fin.

CV6535 (MDG), 2009 WL 1086938, at *4 (E.D.N.Y. Apr. 22, 2009) ([a] relat

weighing in favor of settlement is defendants dire financial condition, which mak



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substantial benefit to the Class because the efficient provision of relevant informa

facilitates obtaining their monetary recovery from Stonebridge. (See Settlement A

Federal courts nationwide have recognized the value of similar covenants to coop

approval of past settlements. See,e.g.,In re Processed Egg Prods. Antitrust Litig

285 (E.D. Pa. 2012) (approving a settlement in which the only benefit to the class

agreement to cooperate with the [p]laintiffs preparation for and prosecution of t

against remaining defendants by providing relevant documents and witnesses);B

07CV254, 2010 WL 4064985, at *2 (D. Neb. Oct. 14, 2010) (approving a propo

[which] provides the important benefit of [defendant]s cooperation in pursuing r

nonsettling parties by providing testimony, documents and information regardi

claims, given the prospect that [defendant]s financial condition would make an

him difficult to collect); cf. In re Investors Fund Corp. of New York Sec. Litig., 9

(S.D.N.Y. 1981) (approving defendants stipulations in a partial settlement agreem

with plaintiffs in the prosecution of . . . actions against non-settling defendants a

relief); Waller v. Fin. Corp. of America, 828 F.2d 579, 580 (9th Cir. 1987) (same

Servs. Group, Inc., 440 F. Supp. 2d 421, 436 (W.D. Pa. 2006) (same);In re Pack

Litig., No. 08MD01952, 2011 WL 717519, at *3-4 (E.D. Mich. Feb. 22, 2011)

Through the Settlement, Trifecta is correcting several of its shortcomings

coming forward with testimony and evidence that Stonebridge has gone to great l

Namely, Trifecta has provided evidence and will provide testimony that the Ston

responsible for overseeing the Call-Back Agreement were fully aware of and con

of text messaging to generate in-bound calls where Stonebridge would be promot

T if b h d Cl C l i i i i



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produce.10 Trifectas agreement to provide information relevant to this case with

extremely valuable to the Class. Moreover, given the unfalteringly contentious d

have arisen out of Plaintiffs revelation that Defendants were concealing evidenc

absent this Agreement, Trifecta would continue to resist Plaintiffs requests, leavi

the information at issue would ultimately be produced at all. See In re Corrugate

F. Supp. 1117, 1147-1148 (S.D. Tex. 1982) (holding that a partial settlement prov

injunction and defendants cooperation with discovery was fair, reasonable and

allowed plaintiffs to secure, on a prompt basis, answers to questions and docum

been otherwise unobtainable). If not produced, Plaintiff would have needed to s

motion for spoliation of evidence against Trifecta11and obtain an adverse inferen

destroyed evidence said. Instead, Trifecta has agreed to testify about several of th

discarded after this litigation arose. Therefore, Trifectas agreement to cooperate

continued prosecution of this case against Stonebridge is a valuable concession to

supports the preliminary adequacy of the instant Settlement such that notice of th

proceed.

V. THE PROPOSED PLAN TO NOTIFY THE CLASS OF THE SET

On May 22, 2013, this Court approved, with minor modifications, Plai

provide notice to the Class of the certification of this case under Rule 23. (Dk

agreed to pay for notice and proposes to incorporate the requisite information

Settlement with Trifecta into the already approved certification notice and dis



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the class in an identical manner.12 Such combined notice is commonly approv

Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007). To

requirements of both Rule 23 and Due Processbe it for purposes of settleme

class certificationRule 23(c)(2)(B) provides that, [f]or any class certified u

the court must direct to class members the best notice practicable under the cir

including individual notice to all members who can be identified through reas

R. Civ. P. 23(c)(2)(B);Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (197

similarly advises that [t]he court must direct notice in a reasonable manner to

who would be bound by a proposed settlement, voluntary dismissal, or compr

P. 23(e)(1). As it pertains to the settlement with Trifecta, the parties have inc

previously approved notice (that describes the nature of the action, the definit

certified, and the class claims and defenses at issue) explanations about their r

settlement such as that class members may enter an appearance through couns

they request to be excluded from the settlement, how they can object to the ter

settlement, and that the effect of a class judgment shall be binding on all class

R. Civ. P. 23(c)(2)(B).

With the assistance of Kurtzman Carson Consultants (KCC), the par

the Settlement Agreement a modified version of the comprehensive notice pla

by the Court, which was designed to reach as many potential Class Members

(Settlement Agreement, 4.)13

As explained below, it is the best notice pract

circumstances and fully comports with Due Process. (See Declaration of Carl

26, 29, attached hereto as Exhibit 3.)



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A. Direct Notice

KCC will perform a reverse look-up on the list of 59,568 unique cel

the Class members obtained through discovery from cellular telephone carrier

obtain valid email addresses and U.S. mail addresses of Class Members direct

direct notice through First Class U.S. Mail and email to those addresses obtain

attached to the Settlement as Exhibit A. (Agreement, 4.1(a); Ex. A; Peak D

B. Internet Banner Notice

As in the original certification notice plan, KCC is going to supplemen

with internet banner ads. The Notice Administrator will cause to be posted a s

banner ads on the 24/7 Real Media Internet Network, which allows the advert

on over 4,000 premium websites. Depending on the percentage of Class mem

obtained through the reverse look-up, KCC will implement banner ads that wi

25 and 95 million unique impressions and run for a one-month period. (Id at

Decl. 21-23.)

C. Website Publication

Within 10 days of entry of the Order granting preliminary approval of

Agreement, traditional long form notice will be provided on the Settlement

www.LeeTextMsgCase.net, which shall be administered and maintained by th

Administrator. The long form notice describes the terms of the Settlement and

mechanism for the Class Members to download and review both the Settleme

several Court documents. (Id. at 4.1(c), ex. C; Peak Decl. 24.)

D. Press Release

KCC ill di ib l l l i l d di d



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and other required government officials, notice of the proposed settlement, wh

(1) a copy of the most recent complaint and all materials filed with the compla

to electronically access such materials; (2) notice of scheduled judicial hearing

all proposed forms of Notice; and (4) a copy of the Settlement Agreement. Th

Administrator shall serve upon the above-referenced government officials the

Members who reside in each respective state, or if not feasible, a reasonable e

number of Class Members residing in each state. (Agreement, 4.1(e).)

The format and language of each form of notice has been drafted so th

language, is easy to read, and will be readily understood by the Class Member

Accordingly, the proposed notice plan comports with Rule 23 and the requirem

Process and should be approved by this Court. (Id. 29.)

VI. CONCLUSION

For the foregoing reasons, Plaintiff Jessica Lee respectfully requests th

preliminary approval of the proposed Settlement Agreement, approve the form

notice described above, and grant such further relief the Court deems reasonab

Dated: October 23, 2013 Respectfully Submitted,

JESSICA LEE, individually andClass of similarly situated indivi

/s/ Ryan D. AndrewsOne of Plaintiffs Attorneys

Sean Reis (SBN 184044)[email protected] Tomas Street, Suite 300



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[email protected]@edelson.com

Attorneys for Plaintiff and the Class



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CERTIFICATE OF SERVICE

The undersigned certifies that on October 23, 2013, he caused this doc

electronically filed with the Clerk of the Court using the CM/ECF system, wh

notification of filing to counsel of record for each party.

Dated: October 23, 2013 EDELSON LLC

By: /s/ Ryan D. AndreRyan D. Andre

Case3:11-cv-00043-RS Document142-1 Filed10/23/13 Page1 o


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Exhibit 1



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CLASS ACTION SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (Agreement or Settlem

Settlement Agreement) is entered into by and among plaintiff Jessica Lee (Plaibehalf of the Class certifed in the Courts February 12, 2013 Order (dkt. 97) an

Marketing Group, Inc. (Trifecta) (together, the Parties or singularly Party). (otherwise specified, defined terms shall have the meanings set forth in the D

Section of this Settlement.) This Settlement is intended by the Parties to fully, fiforever resolve, discharge and settle all the claims specified below, subject to the

conditions herein.RECITALS

A. WHEREAS, on January 4, 2011, Plaintiff brought a putative claagainst Stonebridge Life Insurance Company in the United States District Cou

Northern District of California (Court), which was designated case number 11RS. On July 28, 2011, Plaintiff filed her Amended Complaint adding Trifecta as a D

Both the initial complaint and Amended Complaint (the Action) alleged that Stonebits marketing partner Trifecta violated the Telephone Consumer Protection Act, 47

227, et seq.(TCPA) by transmitting unsolicited text messages to consumers. In thPlaintiff sought statutory monetary damages and an injunction, amongst other relief

B. WHEREAS, Trifecta answered the Amended Complaint on Decemberdenying the material allegations of the Amended Complaint and setting forth seven a

defenses.

C. WHEREAS, Trifecta lacks the financial resources to satisfy any entered against it in the Action or to meaningfully fund any class settlement.

D. WHEREAS, on February 12, 2013, the Court granted Plaintiffs MClass Certification, certifying a class pursuant to Fed. R. Civ. P 23(b)(3) of All inthat received a text message from telephone number 650-283-0793 from Nove

2010 through December 2, 2010.

E. WHEREAS, on April 18, 2012 Plaintiff served Trifecta with her FiDocument Requests and First Set of Interrogatories on Trifecta. On June 5, 2012provided its responses and objections to this discovery.

F. WHEREAS, on March 14, 2013, Plaintiff served her Second Set of Requests and Second Set of Interrogatories on Trifecta.



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Plaintiff served Trifecta with its portion of a Joint Statement on a Motion to Compresponses to her First Set of discovery and on May 21, 2013, served its portion

Statement on a Motion to Compel responses to her Second Set of Discovery.

I. WHEREAS, as Plaintiff was preparing to file the first of the MCompel, the Parties, along with Stonebridge, agreed to a stay of discovery so that tattempt to resolve their dispute through mediation with a respected neutral at JAM

Francisco on June 21, 2013. The Action did not settle at mediation and the stay ofended.

J. WHEREAS, when litigation resumed after the stay, the Partidiscussing the possible resolution of this Action between themselves.

K. WHEREAS, after further arms-length negotiations, includindiscussions of evidence in possession of Trifecta and information about which Tri

willing to provide testimony, the Parties agreed to resolve the case, and on July executed a Memorandum of Understanding outlining the principle terms of their agr

L. WHEREAS, Trifecta denies any wrongdoing whatsoever, and it hand continues to deny that it committed, threatened, or attempted to commit, awrongful acts or violations of law or duty that are alleged in the Action, and insteadthat it has acted properly. In addition, Trifecta maintains that it believed that

messages sent by it or for it at all times went to Persons who had provided their creceive text messages. Nonetheless, taking into account the uncertainty and risks i

any litigation, Trifecta has concluded that defense of the Action would be burdenexpensive, and that it is desirable and beneficial to fully and finally settle and term

Action in the manner and upon the terms and conditions set forth in this Settlement.

M. WHEREAS, Plaintiff believes that the claims asserted in the Acmerit and believes the continued prosecution of this Action against Stonebridgebenefits obtained through this agreement is of significant value to the Class.

Plaintiff and Class Counsel recognize and acknowledge the risk, expense and continued prosecution of the Action against Trifecta through discovery disputes, d

motion practice, trial and any subsequent appeals. Plaintiff and Class Counsel

taken into account the uncertain outcome and risks of any litigation, especially inactions, as well as the difficulties and delays inherent in such litigation.

N. WHEREAS, therefore, Plaintiff and Class Counsel believe that it isthat the Released Claims be fully and finally compromised, settled, and resoprejudice, and barred pursuant to this Settlement. Based on their evaluation, Clas



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finally and fully compromised, settled, and resolved on the terms and conditions sethis Settlement, as a good faith, fair, reasonable, and adequate settlement.

AGREEMENT

1. DEFINITIONS

The following section defines terms that are not defined above. Some definterms that are defined later in this section:

1.1 Action means Lee v. Stonebridge Life Insurance Company andMarketing Group, LLC, Case No. 11-cv-00043 RS, pending in the United StateCourt for the Northern District of California.

1.2 Call Back Agreement means the August 18, 2010, contract enbetween Trifecta, Stonebridge, and Transamerica Life Insurance Company.

1.3 Class means All individuals that received a text message telephone number 650-283-0793 from November 28, 2010 through December 2,

certified in the Courts February 12, 2013 Order. (Dkt. 97.)

1.4 Class Counsel means Edelson LLC, including any successor entity1.5 Class Member means a Person who falls within the definition of

as set forth above and who has not submitted a valid request for exclusion.

1.6 Complaint means the putative class action complaint filed by PJanuary 4, 2011, the Amended Complaint filed on July 28, 2011, and any samendment thereto.

1.7 Court means the United States District Court for the Northern DCalifornia, the Honorable Richard Seeborg presiding, or any judge who shall succe

judge in this Action.

1.8 Defendant and Trifecta mean Trifecta Marketing Group, LLC,limited liability company.

1.9 Final means one business day following the latest of the followin(i) the date upon which the time expires for filing or noticing any appeal of the CouJudgment approving the Settlement Agreement; (ii) if there is an appeal or appeal

of completion in a manner that finally affirms and leaves in place the Final


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relinquished, to the fullest extent permitted by law, the provisions, rights and b 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMSWHICH THE CREDITOR DOES NOT KNOW OR

SUSPECT TO EXIST IN HIS OR HER FAVOR AT THETIME OF EXECUTING THE RELEASE, WHICH IF

KNOWN BY HIM OR HER MUST HAVE MATERIALLYAFFECTED HIS OR HER SETTLEMENT WITH THE

DEBTOR.

Upon the Effective Date, Plaintiffs and all other Persons and entities whose being released, also shall be deemed to have, and shall have, waived any and all prights and benefits conferred by any law of any state or territory of the United

principle of common law, or the law of any jurisdiction outside of the United Statessimilar, comparable or equivalent to 1542 of the California Civil Code.

acknowledge that they may discover facts in addition to or different from those thatknow or believe to be true with respect to the subject matter of this release, but that

intention to finally and forever to settle and release the Released Claims, notwithstaUnknown Claims they may have, as that term is defined in this Paragraph.

2. SETTLEMENT RELIEF2.1 Injunctive Relief. Trifecta agrees that it shall consent to the en

injunction, to be included as part of the Final Judgment, requiring that the follinstituted on or before the Effective Date and to remain in effect for a period o

years:

(a) Trifecta shall not make, or cooperate with others to make, calls to cellular phones unless each text-message recipient has given explicit prioconsent to receive such text messages (in a manner explained below);

(b) Trifecta shall require any contract it enters into for the pobtaining consumer cell phone numbers to transmit text messages, to provide tha

and each entity with whom it contracts to obtain consumer cell phone numbers sdocumented proof of all prior express consent received from the owners of said c

numbers for a period of four (4) years after said consent is obtained;

(c) Trifecta shall require any contract it enters into for the pobtaining consumer cell phone numbers to transmit text messages, to state



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200 pixels on a 100 PPI screen) from the telephone number field or submit buttotext of sufficient size and contrast to be clearly legible.

2.2 Injunction Costs. Trifecta will pay all costs associated implementation of the injunction.

2.3 Complete Cooperation. Upon Preliminary Approval, Trifecta provide Plaintiff and Class Counsel with its complete and full cooperation in the

prosecution of the Action against Stonebridge, including appearing at any trial anany appeals. In furtherance of its agreement to cooperate, Trifecta has specifically

provide without objection or raising of privilege:

(a) Declarations or other testimony, along with all others dtruthfully attesting that Stonebridge (and/or its related entities) had knowledgauthorized the text messaging that was performed for the Call Back Agreement;

(b) Declarations or other testimony, along with all others dtruthfully attesting to Trifectas causing to be sent the text messages to the Cla

Call Back Agreement with Stonebridge;

(c) Declarations or other testimony, along with all others dtruthfully attesting to Stonebridges involvement in the Call Back Agreement, all text messaging conducted pursuant to the that agreement;

(d) Declarations or other testimony confirming the authecertain documents produced in discovery for purposes of continued motion p

trial of the Action against Stonebridge;

(e) Declarations and all other documents involving Stonebridits related entities) related to text messaging campaigns, the Call Back Agreemecould be used to demonstrate Stonebridges potential liability or its failure to

documents to Plaintiff in discovery (including, if necessary, waiver of objections);

(f) Declarations and/or financial documents supporting representation that it is financial inability to sustain a judgment or to financially cto any monetary settlement to the class; and

(g) Truthful sworn answers to Plaintiffs First Request to Admand certain other discovery identified by Class Counsel.



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of them, shall be deemed to have, and by operation of the Final Judgment shall hafinally, and forever released, relinquished, and discharged all Released Claims a

Released Parties, and each of them.

4. NOTICE TO THE CLASS4.1 Plaintiff has agreed to pay for the costs of notice, to occur concurre

notice of class certification, substantially in the form and manner approved by the C

May 22, 2013 Order (Dkt. 110), but including the terms of the Parties settlemenrights of the Class regarding this Settlement. Notice will be disseminated to the

follows:

(a) Direct Notice. KCC will use the list of 59,568 unique cnumbers of the Class members obtained through discovery from cellular telephoT-Mobile U.S.A. to perform a reverse look-up to determine U.S. mailing a

addresses associated with those cell phone numbers. KCC estimates that the revup will obtain valid U.S. Mail and/or email addresses for 55.7% and 70.7% of

KCC will then send direct notice, substantially in the form attached hereto as Ethrough First Class U.S. Mail and email to the addresses obtained.

(b) Internet Banner Notice. KCC will supplement the directemail notice via Internet banner ads, substantially in the form attached hereto as

on the 24/7 Real Media Internet Network, which allows access to over 4,000websites. These ads will run for a one-month period. Depending on the perc

Class member addresses obtained through the reverse look-up, KCC will impInternet media campaign that will generate between 25 and 95 million unique im

which it has determined that, in combination with the other notice contemplatesection, will be sufficient to achieve notice reach to over 70% of the Class.

(c) Website Notice. Within ten (10) days following the entPreliminary Approval Order, Notice shall be provided on a we

www.LeeTextMsgCase.net, which shall be administered by the Notice AdmThe Notice on the Website shall be substantially in the form of Exhibit C hereto.

(d) Press Release. Within fourteen (14) days of the entrPreliminary Approval Order, the Notice Administrator shall distribute a preprepared by Class Counsel to local, national, and syndicated news orgdiscussing the terms of the Agreement in a manner that in no way disparages Tri

(e) CAFA Notice. Pursuant to 28 U.S.C. 1715, not later tha

Case3:11-cv-00043-RS Document142-1 Filed10/23/13 Page10


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names of Class members who reside in each respective state, or if not freasonable estimate of the number of Class members residing in each state.

4.2 The Notice shall be conducted jointly with the notice of class certificadvise the Class of their rights, including the right to be excluded from, comm

and/or object to the Settlement Agreement or its terms. The Notice shall specifyobjection to the Settlement Agreement, and any papers submitted in suppor

objection, shall be considered by the Court at the Final Approval Hearing onlybefore the Objection/Exclusion Deadline approved by the Court and specified in th

the Person making an objection files notice of his or her intention to do so and attime (a) files copies of such papers he or she proposes to submit at the Final

Hearing with the Clerk of the Court, (b) that any objection made by a Classrepresented by counsel must be filed through the Court's CM/ECF system, and

copies of such papers mail, hand, or overnight delivery service to Class CouTrifectas Counsel.

4.3 Any member of the Class who intends to object to this Agreeminclude in the objection his/her name and address, include all arguments, citat

evidence supporting the objection (including copies of any documents relied on), staor she is a Class Member, provide the cellular phone number that received the tex

from 650-283-0793 and provide a statement indicating whether the objector intendsat the Final Approval Hearing with or without counsel. Any Class Member wh

timely file a written objection with the Court and notice of his or her intent to appFinal Approval Hearing in accordance with the terms of this paragraph and as detai

Notice, and at the same time provide copies to designated counsel for the Parties, shpermitted to object to this Agreement at the Final Approval Hearing, and shall be f

from seeking any review of this Agreement by appeal or other means and shall be dhave waived his, her or its objections and be forever barred from making any such o

in the Action or any other action or proceeding. To be valid, the objection must bethe Court and sent to Class Counsel and Trifectas Counsel on or b

Objection/Exclusion Deadline approved by the Court and specified in the Notice.

4.4 A member of the Class may request to be excluded from the purposes of this Settlement, or the Class for purposes of certification and

prosecution of the Action against Stonebridge, or both, by sending a writtepostmarked on or before the Objection/Exclusion Deadline approved by the Cspecified on the Notice. In order to exercise the right to be excluded, a member of

must timely send a written request for exclusion to the Notice Administrator his/her name and address, the cellular phone number that received the text mess

650 283 0793 a signature the name and number of the case and a statement th



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excluded from this Agreement shall not: (i) be bound by any orders of the Final be entitled to relief under this Settlement Agreement; (iii) gain any rights by virt

Agreement; or (iv) be entitled to object to any aspect of this Agreement. The r

exclusion must be personally signed by the Person requesting exclusion. So-called "class" opt-outs shall not be allowed.

5. NOTICE AND SETTLEMENT ADMINISTRATION5.1 The Notice Administrator shall, under the supervision of the Court, a

the Notice in a rational, responsive, cost effective, and timely manner. Th

Administrator shall maintain reasonably detailed records of its activities u

Agreement. The Notice Administrator shall maintain all such records as are reapplicable law in accordance with its normal business practices, and such recordmade available to Class Counsel and Trifectas Counsel upon request. Th

Administrator shall also provide reports and other information to the Court as the Crequire. The Notice Administrator shall provide Class Counsel and Trifectas Cou

information concerning Notice, administration and implementation of the SAgreement, including testimony regarding the sufficiency of the Notice.

5.2 The Notice Administrator shall receive exclusion forms and othefrom the Class members for purposes of this Settlement, or the Class for pu

certification and continued prosecution of the Action against Stonebridge, or promptly provide to Class Counsel and Trifectas Counsel copies thereof upon rece

Notice Administrator receives any exclusion forms or other requests from the Clasdeadline for the submission of such forms and requests, the Notice Administr

promptly provide copies thereof to Class Counsel and Trifectas Counsel.

6. TERMINATION OF SETTLEMENT6.1 Subject to Paragraph 8 below, Plaintiff, on behalf of the Class, o

shall have the right to terminate this Agreement by providing written notice of the e

do so (Termination Notice) to all other Parties to this Agreement within twentydays, of any of the following events: (i) the Courts refusal to grant Preliminary Ap

this Agreement in any material respect; (ii) the Courts refusal to grant final approAgreement in any material respect; (iii) the Courts refusal to enter the Final Judgm

Action in any material respect; (iv) the date upon which the Final Judgment (as dSection 1.11) is modified or reversed in any material respect by the Court of Appe

Supreme Court; or (v) the date upon which an Alternative Judgment, as defined in 8.1 of this Agreement is modified or reversed in any material respect by the Court o

or the Supreme Court.



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7. PRELIMINARY APPROVAL ORDER AND FINAL APPROVAL ORD7.1 Promptly after the execution of this Settlement Agreement, Clas

shall submit this Agreement together with its Exhibits to the Court and shall movefor Preliminary Approval of the settlement set forth in this Agreement and for e

Preliminary Approval Order, which order shall set a Final Approval Hearing approve the Notice substantially in the form Exhibits A, B, and C hereto. Such Pr

Approval Order shall also authorize the Parties, without further approval from theagree to and adopt such amendments, modifications and expansions of the S

Agreement and its implementing documents (including all exhibits to this Agreelong as they are consistent in all material respects with the Final Judgment and do

the rights of the Class.

7.2 At the time of the submission of this Agreement to the Court as above, Class Counsel shall request that, after Notice is given, the Court holdApproval Hearing and approve the settlement of the Action as set forth herein.

7.3 After Notice is given, the Parties shall request and obtain from thFinal Judgment. The Final Judgment will (among other things):

(a) find that the Court has personal jurisdiction over all Class and that the Court has subject matter jurisdiction to approve the Agreement, inc

exhibits thereto;

(b) approve the Settlement Agreement and the proposed settlemereasonable and adequate as to, and in the best interests of, the Class Members; Parties and their counsel to implement and consummate the Agreement according to

and provisions; and declare the Agreement to be binding on, and have res judpreclusive effect in all pending and future lawsuits or other proceedings maintained

behalf of Plaintiff and Releasing Parties;

(c) find that the Notice implemented pursuant to the A(1) constitute the best practicable notice under the circumstances, (2) constitute notreasonably calculated, under the circumstances, to apprise the Class Membe

pendency of the Action, their right to object to or exclude themselves from the

Agreement, and to appear at the Final Approval Hearing, (3) are reasonable and due, adequate, and sufficient notice to all persons entitled to receive notice, and (4applicable requirements of the Federal Rules of Civil Procedure, the Due Process

the United States Constitution, and the rules of the Court;



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herein;

(g) permanently bar and enjoin all Class Members who haveproperly excluded from the Class from filing, commencing, prosecuting, intervenparticipating (as class members or otherwise) in, any lawsuit or other actio

jurisdiction based on the Released Claims;

(h) without affecting the finality of the Final Judgment for puappeal, retain jurisdiction as to all matters relating to administration, consuenforcement, and interpretation of the Settlement Agreement and the Final Judgmen

any other necessary purpose; and

(i) incorporate any other provisions, as the Court deems necejust.

8. CONDITIONS OF SETTLEMENT, EFFECT OF DISAPPROVAL,CANCELLATION OR TERMINATION.

8.1 If the Agreement does not become Final, or in the event that this Agrnot approved by the Court, or, in the event that the Court enters an order and finalin a form other than that provided above (Alternative Judgment), or the settlemen

in this Agreement is terminated or fails to become effective in accordance with its tethis Settlement Agreement shall be canceled and terminated subject to Paragraph

Class Counsel and Trifectas Counsel mutually agree in writing to proceed Agreement. If any Party is in willful material breach of the terms hereof, any ot

provided that it is in substantial compliance with the terms of this Agreement, maythis Agreement on notice to the other party.

9. CONFIRMATORY DISCOVERY9.1 In addition to the information and documents received as part of t

and to be provided pursuant to the Memorandum of Understanding and ParagTrifecta shall, to the extent available, provide to Class Counsel reasonable

discovery and information as is necessary to confirm the material representations ctheir lack of applicable insurance coverage and financial condition that form the ba

Agreement. Should the occasion arise, the Parties shall cooperate in seeking any ththat the Parties acknowledge are not under the control of Trifecta, discovery a

necessary and appropriate, and said additional discovery is to be completed prior toApproval Hearing.



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Settlement Agreement; and (b) agree, subject to their fiduciary and other legal obligcooperate to the extent reasonably necessary to effectuate and implement all t

conditions of this Agreement and to exercise their reasonable best efforts to accom

foregoing terms and conditions of this Agreement. Class Counsel and Trifectaagree to cooperate with one another in seeking Court approval of the Preliminary Order, the Settlement Agreement, and the Final Judgment, and promptly to agree

execute all such other documentation as may be reasonably required to obtain finaof the Agreement.

10.3 The Parties intend this Settlement Agreement to be a final and resolution of all disputes between them with respect to the Released Claims by Pla

the Class on the one hand, against the Released Parties on the other hand. AccordParties agree not to assert in any forum that the Action was brought by Plaintiff or

by Trifecta in bad faith or without a reasonable basis.

10.4 The Parties have relied upon the advice and representation of counseby them, concerning their respective legal liability for the claims hereby releaParties have read and understand fully the above and foregoing agreement and h

fully advised as to the legal effect thereof by counsel of their own selection and int

legally bound by the same.

10.5 Whether or not the Agreement becomes Final or the Settlement Agrterminated, neither this Agreement nor the settlement contained herein, nor

performed or document executed pursuant to or in furtherance of this Agreemesettlement:

(a) is, may be deemed, or shall be used, offered or received aReleased Parties, or each or any of them, as an admission, concession or evidenvalidity of any Released Claims, the truth of any fact alleged by the Plaintiff, the dof any defense that has been or could have been asserted in the Action, the violati

law or statute, the reasonableness of the settlement amount or the fee award, or of awrongdoing, liability, negligence, or fault of the Released Parties, or any of them;

(b) is, may be deemed, or shall be used, offered or receiveTrifecta as an admission, concession or evidence of any fault, misrepresentation or

with respect to any statement or written document approved or made by the Releaseor any of them;

(c) is, may be deemed, or shall be used, offered or received aReleased Parties, or each or any of them, as an admission or concession with resp


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complete set of original executed counterparts shall be filed with the Court if therequests.

10.14 This Settlement Agreement shall be binding upon, and inure to the bthe successors and assigns of the Parties hereto and the Released Parties.10.15 The Court shall retain jurisdiction with respect to implement

enforcement of the terms of this Agreement, and all Parties hereto submit to the ju

of the Court for purposes of implementing and enforcing the settlement embodiAgreement.

10.16 This Settlement Agreement shall be governed by and construed in awith the laws of the State of California.10.17 This Agreement is deemed to have been prepared by counsel for all

a result of arms length negotiations among the Parties. Whereas all Parties have c

substantially and materially to the preparation of this Agreement, it shall not be more strictly against one Party than another.

10.18 Where this Agreement requires notice to the Parties, such notice shato the undersigned counsel: Ryan D. Andrews, Edelson LLC, 350 North LaSalle Str1300, Chicago, Illinois 60654; Alexander E. Sklavos, Law Offices of Alexander EP.C., 375 North Boradway, Ste. 208, Jericho, NY 11753.

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