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Lowery v. Spotify - Ferrick Opposition To Consolidate PDF
Lowery v. Spotify - Ferrick Opposition To Consolidate PDF
Lowery v. Spotify - Ferrick Opposition To Consolidate PDF
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WESTERN DIVISION
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v.
Plaintiffs,
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Defendant.
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4280327v1/015144
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v.
Plaintiff,
Defendant.
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4280327v1/015144
TABLE OF CONTENTS
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I.
INTRODUCTION .............................................................................................................. 1
II.
BACKGROUND ................................................................................................................ 4
III.
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A.
B.
C.
Susman Godfrey and Gradstein & Marzano have the resources to best
represent the interests of the class ........................................................................... 9
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IV.
CONCLUSION ................................................................................................................. 11
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4280327v1/015144
TABLE OF AUTHORITIES
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Cases
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Biondi v. Scrushy,
820 A.2d 1148 (Del. Ch. 2003) ............................................................................. 8
Four In One Co., Inc. v. SK Foods,
2009 WL 747160 (E.D. Cal. 2009) ..................................................................... 10
In re Mun. Derivatives Antitrust Litig.,
252 F.R.D. 184 (S.D.N.Y. 2008) ......................................................................... 10
In re Processed Egg Products Antitrust Litig.,
302 F.R.D. 339 (E.D. Pa. 2014) ............................................................................ 6
Mendoza v. Casa de Cambio Delgado, Inc.,
No. 07CV2579(HB), 2008 WL 3399067 (S.D.N.Y. Aug. 12, 2008) ................... 6
Michelle v. Arctic Zero, Inc.,
No. 12CV2063-GPC NLS, 2013 WL 791145 (S.D. Cal. Mar. 1, 2013) ............ 8
Nowak v. Ford Motor Co.,
240 F.R.D. 355 (E.D. Mich. 2006) ............................................................... 3, 5, 8
Parkinson v. Hyundai Motor Am.,
Case No. CV 06-2553-AHS(MLGX), 2006 WL 2289801 (C.D. Cal. Aug. 7,
2006) ........................................................................................................................ 9
Wiener v. Dannon Co.,
255 F.R.D. 658 (C.D. Cal. 2009) .......................................................................... 7
Statutes
17 U.S.C. 301............................................................................................................ 9
Rules
Fed. R. Civ. P. 23 ........................................................................................................ 2
Fed. R. Civ. P. 23(g) .......................................................................................... passim
Fed. R. Civ. P. 23(g)(2) .......................................................................................... 2, 4
Fed. R. Civ. P. 23(g)(4) .............................................................................................. 2
Fed. R. Civ. P. 42(a) ............................................................................................... 7, 9
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I.
INTRODUCTION
alternative proposals for interim leadership in this class action. The first motion
was filed on April 4, 2016 and seeks appointment of two firms Susman Godfrey
L.L.P. (Susman) and Gradstein & Marzano, P.C. (G&M) as interim class
counsel for the class pursuant to Federal Rule of Civil Procedure 23(g). The
Susman/G&M proposed team would bring forward as interim lead counsel the
firms who have extensive and far-reaching experience in the underlying substantive
area of copyright infringement. And the proposed structure includes the only firms
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which have ever run a class action on behalf of plaintiffs, and the only firms which
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demonstrated record of achieving real benefit for class members and leading some
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of the largest and most significant cases. For example, in the landmark Toyota
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MDL, where Judge Selna appointed Susman Godfrey co-lead sua sponte and
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affirmed that appointment after over 50 firms applied, the Court commented: Class
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Motor Corp. Unintended Acceleration Mktg. Sales Practices, & Prods. Liab. Litig.,
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Case No. CV 10-ML-2151 (C.D. Cal.), Dkt. No. 3933 at 12. Judge McMahon in
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the Southern District of New York recently praised court appointed sole-lead
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counsel Susman Godfrey for achieving the best settlement pound for pound for the
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class that Ive ever seen. Fleisher, et al. v. Phoenix Life Ins. Co., Case No. CV 11-
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8405 (S.D.N.Y.) (Sept. 9, 2015 Tr. at 3). Judge Gutierrez appointed G&M as class
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owners of sound recordings fixed prior to February 15, 1972 exploited by Sirius
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XM in Flo & Eddie, Inc. v. Sirius XM Radio, Inc., Case No. CV 13-5693.
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(M&R) firms experience lies in defending class actions rather than representing
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(arguing that M&R has unsurpassed experience with class actions as defense
and obtained dismissal of class actions). According to its application, M&R has:
This case and the numerous absent class members affected by it are entitled
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underlying legal area of copyright law and in representing plaintiffs through the
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appropriate it will try to call upon Susman/G&M to advise it how to best handle
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a plaintiff side class action, see Cross-Motion at 2 n.1, that only underscores why
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To support its first ever class counsel appointment, M&R advances a series
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of arguments that do not bear on the proper inquiry under Rule 23 when
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of one of its named plaintiffs, David Lowery, and suggests he prefers M&R over
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however, addresses the appointment of interim lead counsel, not plaintiff. There is
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representatives, but the issue before the Court under Rule 23(g)(4) is which counsel
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will best represent the interests of the entire class, not any particular plaintiff. If
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more than one adequate applicant seeks appointment, the court must appoint the
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applicant best able to represent the interests of the class. Fed. R. Civ. P. 23(g)(2).
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Second, M&R notes that it was the first to file an action against Spotify by
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a mere 11 days, but [w]hether someone was first to file by itself has little to do
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with who is the best qualified to lead the case, and does not satisfy the requirements
of Rule 23(g). Nowak v. Ford Motor Co., 240 F.R.D. 355, 365 (E.D. Mich. 2006).
Consideration as to the best appointment of class counsel involves more than who
raced to the courthouse first to get on file. G&M has been investigating and
researching the allegations and legal theories in this case for years, long before
M&R. In 2013, G&M filed a novel, individual case on behalf of a songwriter and
copyright owner against MediaNet Digital. See Aimee Mann v. Medianet Digital,
Inc., Case No. CV 13-05269-GHK (FFMx) (the 2013 Action). For the Courts
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opposition as Exhibit 1.
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companies like MTV, Yahoo Music, Time Warner Cable, and others. See also id.,
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Nov. 27, 2013 Order (Dkt. 20) at 1. G&Ms 2013 Action alleged violations of the
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Copyright Act for the digital music services failure to pay mechanical rights
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which is the core set of allegations at issue here, and which eventually led to this
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litigation. The case was resolved on confidential terms in 2015. Id. (Dkt. 46-48).
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Later that year, it was widely reported in the press that Spotify was in a dispute
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with Victory Records over Spotifys failure to pay mechanical royalties. See, e.g.,
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Rolling Stone Magazine, Oct. 20, 2015, Spotify Drops Victory Records Catalog
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Over Disputed Royalties.1 G&M had numerous meetings and telephone calls with
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catalogue owners and their representatives to discuss filing a class action, and, as
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M&R acknowledges, met with Mr. Lowery as well. Mr. Lowery, in turn, then had
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unspecified charity that supports starving artists, subject to approval of the court.
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That, too, is not a factor under Rule 23(g). While it is laudable when anyone
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http://www.rollingstone.com/music/news/spotify-drops-victory-records-catalog-over-disputed-royalties-20151020
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that privately with their own compensation from whatever the source, it is not and
should not be a factor for determining the best qualified class counsel. In this
situation, when the Court is selecting who should be lead counsel for the class,
M&Rs proposal provides no benefit to the class and could undermine the incentive
to represent the class adequately. The reason a Court awards fees to lawyers in a
vigorously for the class. Charitable motive notwithstanding, a pledge to donate fees
paid for by the class is not relevant to whether M&R is the best firm to represent
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give all absent class members the plaintiff-side class action experience, skill, and
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attention that this case deserves, and because Susman/G&M are best able to
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II.
BACKGROUND
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Susman Godfrey and Gradstein & Marzano have a proven track record of
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success in plaintiff-side class action litigation and music industry litigation. From
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Eddie, Inc. v. Sirius XM Radio, Inc., Case No. CV 13-05693-PSG (RZx) action here
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in the Central District of California, Susman Godfrey and Gradstein & Marzano are
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sole credit for investigating the allegations at issue, in fact, M&R cited an article in
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its Complaint that highlighted Audiams investigation into how songwriters were
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being underpaid by Spotifys streaming services. See Dkt. 1 24. After this
uncovered a wealth of information that was not previously publicly known. For
rights organization that was ill-equipped to obtain licenses for all of the songs
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Neither Spotify nor HFA directly licensed or timely issued notices of intent for
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reproducing and distributing on a daily basis as part of the Service. Id. This
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Susman/G&M have vigorously prosecuted the case for the reasons already
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articulated in its opening motion, as a result of G&Ms work in the 2013 Action,
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scope of that discovery, in order for the class to be in the best position
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attention that the Ferrick action and Lowery action were pending in
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failed to take that basic step in its action, despite the continuing
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o filing the first and only request for a status conference and proposed
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III.
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A.
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Susman Godfrey and Gradstein & Marzano are uniquely equipped to serve as
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class counsel because both firms have significant experience representing plaintiffs
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litigation.
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experience in handling class actions, other complex litigation, and claims of the
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type asserted in the action. Other courts have considered whether a law firm
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applying to be lead counsel has litigated similar cases on behalf of plaintiffs. See
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3399067, at *7 (S.D.N.Y. Aug. 12, 2008) (finding class counsel to be adequate and
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Litig., 302 F.R.D. 339, 350 (E.D. Pa. 2014) (considering that counsel was a well-
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respected law firms in the plaintiffs class action bar in evaluating the 23(g)
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factors). See also Wiener v. Dannon Co., 255 F.R.D. 658, 672 (C.D. Cal. 2009)
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Appoint Interim Co-Lead Class Counsel Pursuant to Fed. R. Civ. P. 23(g). See
Ferrick, Dkt. 48. Both Susman Godfrey and Gradstein & Marzano have a wealth of
experience in litigating class actions on behalf of plaintiffs and are best equipped to
provide the class with the best possible representation to further the interests of the
class.
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B.
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Susman/G&M have invested substantial time and effort into researching the
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claims, analyzing Spotify, and determining the scope of the infringing conduct at
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issue. Before the first complaint was filed, counsel interviewed numerous industry
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participants to confirm the theory of the case, develop the allegations, and
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understand the industry. Indeed, the investigation went beyond the information that
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was published in publicly available articles and unearthed the role of HFA in
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obligations to HFA, which failed to license or issue timely notices of intent for the
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musical records that that Spotify was reproducing and distributing on a daily basis
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as part of the Service. See Ferrick, Dkt. 39 6. Given that Defendants actions
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alleged in this case pertains to its reproduction and distribution of music without a
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Susman/G&M have continued their investigation since the cases were filed. They
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have worked and consulted with a leading expert to study class member
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compensation and possible methods and data sources for assessing Spotifys
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Susman/G&M also have engaged Defendant in all steps required under the
Federal Rules of Civil Procedure, Local Rules, and Standing Orders of this Court.
protective order to govern production of documents in the action, and took the first
steps in the related actions by requesting a status conference and scheduling order
Counsel for Lowery argue in their motion they should be appointed lead
counsel because they were the first to file a complaint. Courts within the Ninth
Circuit have acknowledged the question of who was first to file should only be
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considered when the factors for class counsel do not tilt heavily in either direction
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and there is a need for an objective tie-breaker. See Michelle v. Arctic Zero, Inc.,
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(noting that the question of which law firm was first to file was not a relevant factor
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in selecting class counsel because one firm was better equipped to serve as class
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counsel). See also Biondi v. Scrushy , 820 A.2d 1148, 1159 (Del. Ch. 2003)
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(noting that the mere fact that a lawyer filed first for a representative client is
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scant evidence of his adequacy and may, in fact, support the contrary
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inference.); Nowak v. Ford Motor Co., 240 F.R.D. 355, 365 (E.D. Mich. 2006)
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([w]hether someone was first to file by itself has little to do with who is the best
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qualified to lead the case, and ... [t]o hold otherwise would further encourage a
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M&R also cites in support of its motion the request in its complaint for a
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mandatory injunction requiring that Spotify pay for the services of a third party
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auditor to identify the owners of Works at issue. Cross-Motion at 10. Rather than
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supporting their appointment, this request actually undermines their motion because
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members without obtaining a Court order requiring Spotify to pay for and hire an
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auditor to do so. That is not a prayer for relief that experienced, plaintiff-side class
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action counsel would allege. See also Anderson v. United States, 612 F.2d 1112,
1115 (9th Cir. 1979) (mandatory injunctions generally are not granted unless
extreme or very serious damage will result and are not issued in doubtful cases or
consistent with the results of the pre- and post-filing work that Susman/G&M
conducted. See, e.g., Ferrick, et al. Amended Complaint 25 (class members can
be readily located).
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alleged a state law claim for unfair business practices under Cal. Civil Code
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17200. Susman/G&M raised in its notice of related cases that the claim under
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California state law was preempted under 17 U.S.C. 301. (Ferrick Dkt. 6, filed
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1/8/16). Only after Susman/G&M raised this issue did M&R file a stipulation to
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dismiss the state law claim. (Lowery Dkt. 22, filed 2/12/16).
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C.
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Susman/G&M have more experience and greater resources, and are better
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Cases Pursuant to Fed. R. Civ. P. 42(a) and to Appoint Interim Co-Lead Class
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Counsel Pursuant to Fed. R. Civ. P. 23(g), Ferrick, Dkt. 48, Susman/G&M have the
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resources, to advance the classs interest efficiently and aggressively and to pursue
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structure equal to the challenges they will face in this litigation, while at the same
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time ensuring that the actions progress in the most efficient and professional
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manner.
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firms that collectively, have more experience and greater resources to commit to
M&R is a single firm. However, given the very substantial law firm and corporate
treasury arrayed against the class, the two firm structure proposed by Susman/G&M
will be best equipped to handle the case. See In re Mun. Derivatives Antitrust
Litig., 252 F.R.D. 184, 187 (S.D.N.Y. 2008) (appointing three firms as lead
Contrary to M&Rs
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suggestion otherwise, duplication of effort is not a concern when two co-lead firms
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are appointed to serve as class counsel. Four In One Co., Inc. v. SK Foods, 2009
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WL 747160 at *3 (E.D. Cal. 2009) (selecting two co-lead firms as class counsel).
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Susman/G&M have also agreed to assign primary responsibly for specific tasks to a
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specific firm. For example, a single firm will have primary responsibility for
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preparing each brief (or, as appropriate, major sections of a brief), and a single firm
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Susman/G&M will report their time and expenses on a monthly basis to each other,
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and those reports will be detailed in nature in conformance with the practice in
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other class action litigation, such as the Toyota unintended acceleration class action
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also agreed to the following additional measures to ensure the efficient and cost-
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No more than one lawyer from one of the plaintiffs co-lead law
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firms will attend discovery hearings, except where deemed necessary because of
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special circumstances.
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3.
No more than one lawyer from each co-lead firm will bill for
time to attend significant hearings, such as hearings on motions to dismiss, for class
certification, or summary judgment, except the lawyer taking the lead at the hearing
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These are similar case management billing proposals that Judge Koh adopted
when she appointed Susman Godfrey as co-lead with two other law firms in In re
Animation Workers Antitrust Litigation, Case No. CV 14-4062 (N.D. Cal.), Dkt. 54.
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IV.
CONCLUSION
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For the foregoing reasons, Susman Godfrey and Gradstein & Marzano
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interim class counsel, and respectfully request that the Court appoint Susman
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HENRY GRADSTEIN
MARYANN R. MARZANO
DANIEL LIFSCHITZ
GRADSTEIN & MARZANO, P.C.
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MARC M. SELTZER
STEVEN G. SKLAVER
KALPANA D. SRINIVASAN
KRYSTA KAUBLE PACHMAN
SUSMAN GODFREY L.L.P.
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