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Direct Purchaser Class Plaintiffs Memorandum of Points and

VIEWS: 11 PAGES: 14

									        Case3:07-md-01827-SI Document2251                 Filed12/27/10 Page1 of 14



 1   Richard M. Heimann (State Bar No. 63607)
     LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
 2   275 Battery Street, 29th Floor
     San Francisco, CA 94111-3339
 3   Telephone:     (415) 956-1000
     Facsimile:     (415) 956-1008
 4
     Bruce L. Simon (State Bar No. 96241)
 5   PEARSON, SIMON, WARSHAW & PENNY, LLP
     44 Montgomery Street, Suite 2450
 6   San Francisco, CA 94104
     Telephone:    (415) 433-9000
 7   Facsimile:    (415) 433-9008
 8   Co-Lead Counsel for the Direct Purchaser Class
     Plaintiffs
 9

10
                                    UNITED STATES DISTRICT COURT
11
                                 NORTHERN DISTRICT OF CALIFORNIA
12
                                        SAN FRANCISCO DIVISION
13

14
     IN RE: TFT-LCD (FLAT PANEL)                        Master File No. M 07-1827 SI
15   ANTITRUST LITIGATION
                                                        MDL No. 1827
16
                                                        DIRECT PURCHASER CLASS
17   This Document Relates to:                          PLAINTIFFS’ MEMORANDUM OF
                                                        POINTS AND AUTHORITIES IN SUPPORT
18   ALL DIRECT PURCHASER ACTIONS                       OF MOTION FOR THE ADVANCEMENT
                                                        OF LITIGATION EXPENSES FROM
19                                                      SETTLEMENT FUNDS

20                                                      Date:      February 17, 2011
                                                        Time:      4:00 p.m.
21                                                      Courtroom: 10, 19th Floor
                                                        The Honorable Susan Illston
22

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     905368.4                                                                   MASTER FILE NO. M 07-1827 SI
                     DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
        Case3:07-md-01827-SI Document2251                                 Filed12/27/10 Page2 of 14



 1                                                  TABLE OF CONTENTS
 2                                                                                                                                      Page
 3              I.     INTRODUCTION .................................................................................................. 1
                II.    THE COURT MAY ADVANCE LITIGATION EXPENSES FROM
 4                     PARTIAL SETTLEMENTS................................................................................... 2
 5              III.   THE CLASS WILL BENEFIT FROM ADVANCING LITIGATION
                       EXPENSES BECAUSE ADVANCED FUNDS WILL PROMOTE THE
 6                     CONTINUED VIGOROUS PROSECUTION OF THIS COMPLEX
                       CONSOLIDATED ACTION.................................................................................. 3
 7                     A.    This Case Requires Unusually Large, But Reasonable and
                             Necessary, Litigation Expenditures. ........................................................... 4
 8
                       B.    It is Reasonable to Expect that Additional and Substantial Expenses
 9                           Will Be Necessary for Class Counsel’s Continued Prosecution of
                             this Case ...................................................................................................... 6
10              IV.    ALL PARTIES AND CLASS MEMBERS HAVE NOTICE OF THIS
                       REQUEST FOR LITIGATION EXPENSES ......................................................... 7
11
                V.     PORTIONS OF THE LITIGATION EXPENSE ADVANCEMENT USED
12                     BY CLASS COUNSEL WILL BE DEDUCTED FROM A FINAL
                       REIMBURSEMENT OF EXPENSES, AND UNUSED PORTIONS WILL
13                     BE DISTRIBUTED TO THE CLASS.................................................................... 9
                VI.    CONCLUSION ..................................................................................................... 10
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     905368.4                                                       -i-                                   MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
         Case3:07-md-01827-SI Document2251                                          Filed12/27/10 Page3 of 14



 1                                                      TABLE OF AUTHORITIES
 2                                                                                                                                                 Page
 3                                                                        CASES
 4   Boeing Co. v. Van Gemert,
       444 U.S. 472 (1980)..................................................................................................................... 2
 5
     Eagle v. Star-Kist Foods, Inc.,
 6     812 F.2d 538 (9th Cir. 1987)........................................................................................................ 5
 7   In re Asbestos School Litigation,
        No.83-0268, 1988 WL 82853 (E.D.Pa. Aug. 5, 1988) ................................................................ 8
 8
     In re Bextra & Celebrex Mktg. Sales Practices & Prod. Liab. Litig.,
 9      M:05-cv-01699-CRB, MDL No. 1699, 2006 U.S. Dist. LEXIS 10902 (N.D. Cal. Feb. 27,
        2006) ............................................................................................................................................ 5
10
     In Re Brand Name Prescription Drug Litig.,
11      No. 94 C 897, MDL No. 997 (N.D. Ill. Feb. 18, 1998) ............................................................... 3
12   In re Dynamic Random Access Memory (DRAM) Antitrust Litig.,
        No. 02-md-01486, Dkt. No. 1315 (N.D.Cal. Feb. 14, 2007) ....................................................... 2
13
     In Re High Pressure Laminates Antitrust Litig.;
14      Master File No.: 00 MD 1368 (CLB) (S.D.N.Y. July 14, 2004) ................................................. 2
15   In re M.D.C. Holdings Securities Litig.,
        No. CV 89-0090, Fed. Sec. L. Rep. (CCH) ¶95,474 (S.D.Cal. Aug. 30, 1990) .......................... 9
16
     In re Media Vision Technology Secs. Litig.,
17      913 F. Supp. 1362 (N.D. Cal. 1995) ........................................................................................ 2, 5
18   James v. Stockham Valves & Fittings Co.,
       559 F.2d 310 (5th Cir. 1977).................................................................................................. 5, 10
19
     Minnesota Mining & Mfg. Co. v. New Jersey Wood Finishing Co.,
20     381 U.S. 311 (1965)..................................................................................................................... 5
21   Newby v. Enron Corp.,
       394 F.3d 296 (5th Cir. 2004)........................................................................................................ 2
22
                                                     STATUTES
23
     28 U.S.C. § 1920(2) ......................................................................................................................... 5
24                                                              RULES
25   Civil L.R. 54-3 (c)............................................................................................................................ 5
26   Fed. R. Civ. P.
       23(h) ......................................................................................................................................... 1, 2
27     54(d) ............................................................................................................................................. 1
28
     905368.4                                                              - ii -                                   MASTER FILE NO. M 07-1827 SI
                       DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                  IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
         Case3:07-md-01827-SI Document2251                                     Filed12/27/10 Page4 of 14



 1                                                    TABLE OF AUTHORITIES
                                                            (continued)
 2                                                                                                                                            Page
 3                                                                 TREATISES

 4   Alba Conte, Attorney Fee Awards,
       § 2:19 (3d. ed. 2004) .................................................................................................................... 3
 5     § 2:20 (3d. ed. 2004) ................................................................................................................ 2, 8

 6   Manual for Complex Litigation (Fourth)
      § 13.2 (2004) ................................................................................................................................ 2
 7

 8

 9

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     905368.4                                                           - iii -                                 MASTER FILE NO. M 07-1827 SI
                       DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                  IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
          Case3:07-md-01827-SI Document2251                 Filed12/27/10 Page5 of 14



 1   I.         INTRODUCTION
 2              Direct purchaser plaintiffs’ class counsel (“Class Counsel”) request an advance of

 3   $3,000,000 to be used for future litigation expenses incurred on behalf of the direct purchaser

 4   class plaintiffs (“plaintiffs”). This advance of funds will come from the $17,000,000 settlement

 5   fund (“Settlement Fund”) created if the Court grants final approval to two preliminarily-approved

 6   settlements, one with Chunghwa Picture Tubes, Ltd. (the “Chunghwa Settlement”) for

 7   $10,000,000, and the other with Epson Imaging Devices Corporation and Epson Electronics

 8   America, Inc. (the “Epson Settlement”) for $7,000,000. Plaintiffs noticed this Motion for the

 9   same date and time as these Settlements’ Fairness Hearings. If the Court grants the motion, Class

10   Counsel will withdraw money in small amounts, from time to time, to pay expenses incurred as

11   they prepare for and try this case. Any excess funds advanced to Class Counsel and not used will

12   remain in the Settlement Fund.

13              The Court has the authority to advance or to award interim costs to Class Counsel. See

14   Fed. R. Civ. P. 23(h) (“the court may award reasonable attorney’s fees and nontaxable costs that

15   are authorized by law or by the parties’ agreement”); Fed. R. Civ. P. 54(d) (allowing costs to

16   prevailing parties). Moreover, in its orders preliminarily approving the Chunghwa and Epson

17   Settlements, the Court retained exclusive jurisdiction over all matters arising out of or connected

18   with the settlements. Dkt. 1686 (preliminary approval of Chunghwa Settlement), ¶ 17; Dkt. 2078

19   (preliminary approval of Epson Settlement), ¶ 19. Courts regularly advance litigation expenses to

20   class counsel after partial settlements, and it is warranted under the circumstances of this case.

21              Assuming the Court grants final approval to the Chunghwa and Epson Settlements, it will

22   resolve plaintiffs’ claims as to only three defendants. The remaining defendants (the “Non-

23   Settling Defendants”) are some of the world’s largest conglomerates, defended by experienced

24   counsel. Although several of them already have pled guilty to the same price-fixing conduct

25   alleged by plaintiffs in this civil litigation, the parties are preparing for trial, presently scheduled

26   to begin on February 13, 2012. Based on costs incurred of over $3 million to date, and the nature

27   of this complex, multi-national case, Class Counsel reasonably anticipate the need to expend

28   substantial funds for a trial against the Non-Settling Defendants. So far, plaintiffs have relied
     905368.4                                         -1-                          MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
           Case3:07-md-01827-SI Document2251                  Filed12/27/10 Page6 of 14



 1   exclusively on Class Counsel’s ability and willingness to pay for the extraordinary costs
 2   associated with this case. But, with the case scheduled to continue for more than a year, the Court
 3   should grant this request to advance litigation funds.
 4   II.        THE COURT MAY ADVANCE LITIGATION EXPENSES FROM PARTIAL
                SETTLEMENTS
 5
                It is well-established that in class actions plaintiffs’ counsel representing the class may be
 6
     reimbursed for reasonable and necessary litigation costs from a common settlement fund
 7
     established for the benefit all class members. Fed. R. Civ. P. 23(h); Boeing Co. v. Van Gemert,
 8
     444 U.S. 472, 478 (1980) (explaining that this “common-fund doctrine” dates back to 1882); In re
 9
     Media Vision Technology Secs. Litig., 913 F. Supp. 1362, 1366 (N.D. Cal. 1995) (“Reasonable
10
     costs and expenses incurred by an attorney who creates or preserves a common fund are
11
     reimbursed proportionately by those class members who benefit by the settlement.”).
12
                Under this common-fund doctrine, courts have also “permitted class plaintiffs who have
13
     settled with fewer than all defendants to expend class-settlement monies, or a portion thereof, for
14
     litigation expenses to prosecute the action against remaining, nonsettling defendants.” Alba
15
     Conte, Attorney Fee Awards, § 2:20 (3d. ed. 2004) (citing cases). As the Manual for Complex
16
     Litigation explains, one reason that courts encourage partial settlements is because they “provide
17
     funds needed to pursue the litigation . . . .” Manual for Complex Litigation (Fourth) § 13.2
18
     (2004). Thus courts regularly advance to class counsel money from settlement funds for future
19
     expenses. See, e.g., Newby v. Enron Corp., 394 F.3d 296, 303 (5th Cir. 2004) (affirming approval
20
     of class settlement where $15 million of settlement proceeds were used to create a litigation
21
     expense fund); In re Dynamic Random Access Memory (DRAM) Antitrust Litig., No. 02-md-
22
     01486, Dkt. No. 1315 (N.D.Cal. Feb. 14, 2007) (Hamilton, J.) (authorizing disbursement of
23
     $2,000,000 from two settlement funds for the advancement of litigation expenses) (Fastiff Decl.,
24
     Exh. B); In Re High Pressure Laminates Antitrust Litig.; Master File No.: 00 MD 1368 (CLB)
25
     (S.D.N.Y. July 14, 2004) (upon final approval of partial settlements, granting $4 million
26
     distribution from a settlement fund to reimburse class counsel for “expenses incurred and to be
27
     incurred on behalf of the Class”) (Fastiff Decl., Exh. C); In re Cal. Micro Devices Sec. Litig.,
28
     905368.4                                           -2-                         MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
        Case3:07-md-01827-SI Document2251                     Filed12/27/10 Page7 of 14



 1   965 F. Supp. 1327, 1337 (N.D. Cal. 1997) (approving class counsel’s request for a $1.5 million
 2   litigation fund “[b]ecause the remainder of the case appears to have potential value for the class”);
 3   In Re Brand Name Prescription Drug Litig., No. 94 C 897, MDL No. 997 (N.D. Ill. Feb. 18,
 4   1998) (granting $6 million disbursement “for advancement of trial preparation expenses of Class
 5   Counsel”) (Fastiff Decl., Exh. D).
 6              The common-fund doctrine is an equitable doctrine. Its basic principle is that “an attorney
 7   who creates or preserves a common fund by judgment or settlement for the benefit of a class is
 8   entitled to receive reimbursement of reasonable fees and expenses involved.” Conte, Attorney
 9   Fee Awards, § 2:19. Courts typically find the following out-of-pocket expenses “reasonable,”
10   and therefore reimbursable: “(1) witness fees; (2) expert or specialist fees; (3) special master; (4)
11   transcripts of hearings and depositions; (5) copying charges; (6) travel; (7) long-distance and
12   conference telephone; (8) postage; (9) delivery services; (10) computerized legal research; [and]
13   (11) settlement administrative costs.” Id. (citing cases).
14   III.       THE CLASS WILL BENEFIT FROM ADVANCING LITIGATION EXPENSES
                BECAUSE ADVANCED FUNDS WILL PROMOTE THE CONTINUED
15              VIGOROUS PROSECUTION OF THIS COMPLEX CONSOLIDATED ACTION
16              This Motion is Class Counsel’s first request in this case for a fee or a litigation expense
17   award. Fastiff Decl., ¶ 6. Class Counsel are not asking for interim attorneys’ fees. Class
18   Counsel request only funds to cover the daily costs of prosecuting this case. Plaintiffs have been
19   prosecuting this massive, multi-national class action using Class Counsel’s own resources for
20   over three years. All Class Counsel have worked on behalf of the direct purchaser class strictly
21   on a contingency-fee basis. Class Counsel have undertaken substantial risks and made extensive
22   out-of-pocket expenditures in an effort to bring about a speedy resolution to this case that also
23   appropriately compensates class members for damages caused by defendants’ illegal actions
24   fixing prices for LCD panels and products. Unfortunately, Non-Settling Defendants—several of
25   which have pled guilty in parallel criminal actions—persist in denying any liability, and have
26   exhibited both a willingness and an ability to litigate nearly every procedural- and discovery-
27   related issue. Class Counsel already have spent over $3 million in reasonable and necessary costs
28   to prosecute this case. Fastiff Decl., ¶ 7. With a discovery cut-off, expert reports, and the trial
     905368.4                                           -3-                        MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
        Case3:07-md-01827-SI Document2251                       Filed12/27/10 Page8 of 14



 1   months away, Class Counsel likely will have to spend at least this much, if not more to bring the
 2   case to fruition. In light of these circumstances, as well as Class Counsel’s efforts that already
 3   have achieved two settlements, awarding an advance of future litigation expenses is fair and just
 4   to both Class Counsel and the direct purchaser class members.
 5              A.        This Case Requires Unusually Large, But Reasonable and Necessary,
                          Litigation Expenditures.
 6
                Several factors unique to this case have imposed a particularly heavy financial burden on
 7
     Class Counsel, making an advance of litigation expenses especially appropriate. For example,
 8
     most of the defendants in this case are Asia-based companies. Consequently, many if not most of
 9
     the depositions and documents produced have required Class Counsel to pay for interpretation
10
     and/or translation services. Fastiff Decl., ¶ 8. Many depositions have occurred overseas,
11
     resulting in high travel expenses. Id. Discovery meet-and-confer processes require more time
12
     because defense counsel must communicate with clients in different time zones. Id. Indeed, this
13
     case has been ongoing for four years. The number of documents produced by defendants in this
14
     litigation also has been extraordinary, totaling over 25 million pages, plus hundreds of thousands
15
     of data sets. Id.
16
                To adequately prosecute this case, Class Counsel have established, regularly contribute to,
17
     and regularly pay expenses from a Litigation Fund. To date, Class Counsel have contributed over
18
     $3 million to this Fund. Fastiff Decl., ¶ 7. Class Counsel have, and still do, use this Fund to pay
19
     for some, though not all, expenses. Some expenses Class Counsel pay individually. Expenses
20
     paid from the Litigation Fund to date include:
21
                •     Over $1.5 million for expert costs and fees, including analysis of the over one hundred
22
                      thousand data sets defendants produced, the global TFT-LCD market, the TFT-LCD
23
                      price-fixing conspiracy, the impact of the price-fixing conspiracy on class members,
24
                      and damages. Fastiff Decl., ¶ 10;
25
                •     Over $800,000 for database management system costs and fees, including to host and
26
                      maintain a document review database system for the purpose of reviewing, organizing,
27
                      and managing over 25 million pages of documents produced by the defendants.
28
     905368.4                                             -4-                       MASTER FILE NO. M 07-1827 SI
                         DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                    IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
         Case3:07-md-01827-SI Document2251                     Filed12/27/10 Page9 of 14



 1                    Fastiff Decl., ¶ 10; and
 2              •     Over $50,000 for transcript costs, including hearing and deposition transcripts. Fastiff
 3                    Decl., ¶ 10.
 4   Each of these expenses is reasonable and necessary for Class Counsel adequately and effectively
 5   to advance this litigation. See Media Vision, 913 F. Supp. at 1366-67, 1371 (recognizing the
 6   necessity for counsel to retain experts, and permitting reimbursement of necessary deposition
 7   costs); In re Bextra & Celebrex Mktg. Sales Practices & Prod. Liab. Litig., M:05-cv-01699-
 8   CRB, MDL No. 1699, 2006 U.S. Dist. LEXIS 10902, at *55 (N.D. Cal. Feb. 27, 2006) (ordering
 9   document depository expenses be reimbursed from a common fund).1
10              While the expenses paid from Class Counsel’s Litigation Fund alone have been a
11   significant financial burden on Class Counsel, they represent only a fraction of the total expenses
12   paid so far in this litigation. Other expenses that Class Counsel have paid separately, out-of-
13   pocket include: court fees, service of process both domestically and abroad, computer research,
14   costs for document production, photocopies, travel, lodging, and telephone costs. Fastiff Decl.,
15   ¶ 11.
16              Public policy also supports advancing funds to cover these reasonable future costs because
17   it promotes private actions as a means for enforcing antitrust laws. See Minnesota Mining & Mfg.
18   Co. v. New Jersey Wood Finishing Co., 381 U.S. 311, 318 (1965) (“Congress has expressed its
19   belief that private antitrust litigation is one of the surest weapons for effective enforcement of the
20   antitrust laws.”); Eagle v. Star-Kist Foods, Inc., 812 F.2d 538, 542 (9th Cir. 1987) (“The primary
21   legislative purpose underlying the Clayton Act was to make private attorneys general out of the
22   private parties who sought damages under section 4 of the Clayton Act.”). Cf. James v. Stockham
23   Valves & Fittings Co., 559 F.2d 310, 358-59 (5th Cir. 1977) (in private employment
24   discrimination case, advancing litigation expenses to “private Attorneys General”). In this case,
25   1
       Indeed, by statute or rule, some of these costs are specifically allowed as taxable costs. See,
     e.g., 28 U.S.C. § 1920(2) (“A judge or clerk of any court of the United States may tax as costs the
26   following: . . . (2) Fees of the court reporter for all or any part of the stenographic transcript
     necessarily obtained for use in the case”); Civil L.R. 54-3 (c) (“The cost of an original and one
27   copy of any deposition (including video taped depositions) taken for any purpose in connection
     with the case is allowable.”).
28
     905368.4                                            -5-                        MASTER FILE NO. M 07-1827 SI
                         DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                    IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
       Case3:07-md-01827-SI Document2251                   Filed12/27/10 Page10 of 14



 1   direct purchaser class members rely on Class Counsel to perform this role. The government is not
 2   seeking restitution for class members in its parallel criminal case.
 3              B.     It is Reasonable to Expect that Additional and Substantial Expenses Will Be
                       Necessary for Class Counsel’s Continued Prosecution of this Case
 4
                If past is prelude, then based on Class Counsel’s expenses incurred to date, their future
 5
     expenditures on this case will continue to be substantial. Future expenses, such as trial, will
 6
     likely exceed costs incurred to date. In addition, the Court might consider the probable duration
 7
     of this case. For the reasons discussed below, this case probably will not be fully resolved—
 8
     either by the Court’s order, a jury, or through party discussions—in the near future. Accordingly,
 9
     the Court should grant Class Counsel an advance of litigation expenses.
10
                This case likely will not be resolved in full within the next few months because defendants
11
     have shown little inclination, if any, to achieve a resolution outside of the courtroom. For
12
     example, certain defendants recently served plaintiffs with over 4,000 contention discovery
13
     requests, a quantity that far exceeds limits set in Federal Rule of Civil Procedure 33. See Special
14
     Master’s Order Re Motion for Protective Order Re Contention Discovery Requests, Dkt. 2114
15
     (paring down the contention requests significantly). Despite the fact that all but three defendants
16
     pled guilty to fixing prices for TFT-LCD panel and products, and one is the amnesty applicant,
17
     defendants’ contention requests challenged nearly every allegation in plaintiffs’ complaint. Id. at
18
     3 (finding that many requests “essentially tell DPP’s to ‘state your entire case’”). After
19
     defendants refused to modify the scope of these discovery requests, plaintiffs litigated this issue
20
     before both Special Master Quinn and this Court. These contention interrogatories not only show
21
     defendants’ persistent denial of any wrongdoing, but also show a strong likelihood that this case
22
     will continue to verdict. Defendants claimed to need plaintiffs’ responses to prepare for summary
23
     judgment and trial. Trials can be extremely costly, requiring additional expenses such as exhibits,
24
     experts, and jury consultants.
25
                Under the Court’s November 23, 2010 Order Re: Pretrial and Trial Schedule, significant
26
     cut-off dates are months away, and the trial date is over a year away (February 13, 2012),
27
     allowing defendants significantly more time to cause plaintiffs to litigate every possible issue.
28
     905368.4                                          -6-                        MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
         Case3:07-md-01827-SI Document2251                Filed12/27/10 Page11 of 14



 1   See Dkt. 2165 (setting discovery fact cut-off for class plaintiffs on May 11, 2010, and the last day
 2   for dispositive motions on September 2, 2011). Defendants, some of the world’s largest
 3   electronics manufacturers, have substantial financial resources to oppose this lawsuit indefinitely,
 4   and apparently are willing to do so. The protracted nature of this litigation weighs in favor of
 5   advancing litigation expenses to Class Counsel.
 6   IV.        ALL PARTIES AND CLASS MEMBERS HAVE NOTICE OF THIS REQUEST
                FOR LITIGATION EXPENSES
 7

 8              In compliance with Federal Rule of Civil Procedure 23(h), Class Counsel provided notice
 9   to all parties and class members of this litigation expense advancement request. First, pursuant to
10   this Court’s order granting preliminary approval to the Epson Settlement (Dkt. 2078), Class
11   Counsel distributed to class members either long- or short-form notices, or both, of the Chunghwa
12   and Epson Settlements by: (1) mailing or emailing direct notice to each class member who could
13   be identified by reasonable effort; (2) publishing a summary notice in the national edition of The
14   Wall Street Journal; and (3) posting notice on a public website maintained by the Class
15   Administrator, www.tftlcdclassaction.com.2 Fastiff Decl., Exh. A. The long-form notice states:
16              Chunghwa will pay $10,000,000 (plus interest) to the Chunghwa Settlement Class,
                and Epson will pay $7,000,000 (plus interest) to the Epson Settlement Class. The
17              attorneys will ask the Court to permit up to $3 million of the combined Settlement
                Fund to pay for costs incurred in the litigation.
18
                More details can be found in the Settlement Agreements themselves, which are
19              available at www.tftlcdclassaction.com.
20   Long-Form Notice, Page 6 (Question 13: “What do the settlements provide?”) (emphasis added).3
21   Fastiff Decl., Exh. A. Although the class notice does not specifically mention a request for future
22   expenses, the same principles of fair notice and reasonable costs apply to requests for
23   reimbursement of past expenditures. “Under the equitable/common-fund doctrine, in addition to
24   2
       The short-form notice refers class members to the www.tftlcdclassaction.com website, which
25   contains the long-form notice.
     3
       See also Long-Form Notice, Page 7, Question 21: “How will the lawyers be paid?” (“Class
26   Counsel will ask the Court at a later time for attorneys’ fees not to exceed one-third of the
     $17,000,000 Settlement Fund plus reimbursement of their costs and expenses, in accordance with
27   the provisions of the settlements. Class Counsel may seek additional attorneys’ fees from any
     settlement or recovery obtained.”).
28
     905368.4                                         -7-                        MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
         Case3:07-md-01827-SI Document2251                Filed12/27/10 Page12 of 14



 1   traditional awards for reasonable fees and cost reimbursement,” courts permit the use of partial
 2   settlement monies to continue prosecuting an action against remaining defendants. Conte,
 3   Attorney Fee Awards, § 2:20. See also In re Asbestos School Litigation, No. 83-0268, 1988 WL
 4   82853 (E.D.Pa. Aug. 5, 1988) (creating a future-expenses fund when class notice of the
 5   settlement agreements stated that the settlement funds may be used in part to “defray the costs of
 6   the litigation.”) (emphasis in original).
 7              Indeed, in plaintiffs’ application for preliminary approval of the Epson Settlement, Class
 8   Counsel confirmed they would make the exact request now made in this Motion. “Prior to the
 9   final approval hearing, Plaintiffs and their counsel will move for the creation of a litigation
10   expense fund in the amount of $3 million for the payment of litigation expenses that have been
11   incurred, and will be incurred, in prosecuting this case.” Direct Purchaser Plaintiffs’ Motion for
12   Preliminary Approval of the Epson Settlement (Dkt. 1850), at 9-10. Thus, Class Counsel’s
13   request for advancing litigation expenses is consistent with notice already given to class
14   members.
15              Notice to all parties and class members also appears in the Chunghwa and Epson
16   settlement agreements, which are publicly available on the website www.tftlcdclassaction.com.4
17   Both settlements state:
18              Class Counsel may submit an application or applications to the Court (the “Fee
                and Expense Application”) for distribution to them from the Settlement Fund, and
19              [Chunghwa/Epson Defendants] shall not oppose such application for: (i) an award
                of attorneys’ fees not in excess of one-third of the Settlement Fund; plus (ii)
20              reimbursement of expenses and costs incurred, or to be incurred, in connection
                with prosecuting the Action, plus interest on such attorneys’ fees, costs, and
21              expenses at the same rate and for the same period as earned by the Settlement
                Fund (until paid) as may be awarded by the Court (the “Fee and Expense Award”).
22              Class Counsel reserve the right to make additional applications for fees and
                expenses incurred[.]
23

24   LCD Direct Purchaser Class Action Settlement Agreement with Chunghwa, ¶23(a); LCD Direct
25   Purchaser Class Action Settlement Agreement with Epson, ¶23(a) (emphasis added for both).
26   Under the settlements, Class Counsel may request the Court grant expenses “to be incurred,” such
27   4
      All parties also received these settlement agreements via ECF when they were filed as part of
     Direct Purchaser Plaintiffs’ Motion for Preliminary Approval of Class Settlement, Dkt. 1850.
28
     905368.4                                          -8-                        MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
       Case3:07-md-01827-SI Document2251                  Filed12/27/10 Page13 of 14



 1   as the advance litigation funds now requested. See In re M.D.C. Holdings Securities Litig., No.
 2   CV 89-0090, Fed. Sec. L. Rep. (CCH) ¶95,474 (S.D.Cal. Aug. 30, 1990) (granting advancement
 3   of expenses when settlement agreement stipulated to establish a $1 million fund “to pay actual
 4   expenses incurred in the further prosecution of the Litigation against the Non-Settling
 5   Defendants”).
 6              Finally, by and through this Motion and Notice of Motion, Class Counsel is providing
 7   adequate notice to all parties and class members of this request for a litigation expense
 8   advancement. As stated in the Notice of Motion, this Motion will be made publicly available
 9   both through the Court’s ECF system, as well as posted on the www.tftlcdclassaction.com
10   website. The noticed hearing date and time—February 17, 2011 at 4:00 p.m.—provides adequate
11   time for any interested parties to learn of Class Counsel’s request. Furthermore, the noticed
12   hearing is the same date and time as scheduled for the Fairness Hearing on the Chunghwa and
13   Epson Settlements, which the Court set in its Order Granting Preliminary Approval of the Epson
14   Settlement (Dkt. 2078). The settlement notices previously distributed to class members informed
15   class members of this hearing. See Fastiff Decl., Exh. A (Long-Form Notice, Question 17).
16              Because all parties and class members have adequate notice of the timing and amount of
17   the litigation expenses requested by this Motion, Class Counsel’s request is fair and reasonable
18   and complies with Rules 23(h) and 54(d).
19   V.         PORTIONS OF THE LITIGATION EXPENSE ADVANCEMENT USED BY
                CLASS COUNSEL WILL BE DEDUCTED FROM A FINAL REIMBURSEMENT
20              OF EXPENSES, AND UNUSED PORTIONS WILL BE DISTRIBUTED TO THE
                CLASS
21
                Class Counsel do not request an unconditional assignment of funds to prosecute this case.
22
     Rather, they request an advancement of funds based on, and contingent upon, the Court’s final
23
     approval of the Chunghwa and Epson Settlements. Advanced funds will be used only to cover
24
     reasonable costs for the continued prosecution of this case. Class Counsel will fully account to
25
     this Court in camera, as frequently and with as much detail as the Court requests, for all litigation
26
     expenses incurred and paid.
27
                Furthermore, any advanced funds not used for litigation expenses will be distributed to the
28
     905368.4                                         -9-                        MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND
       Case3:07-md-01827-SI Document2251                  Filed12/27/10 Page14 of 14



 1   Class through the Settlement Fund. See Direct Purchaser Plaintiffs’ Motion for Preliminary
 2   Approval of the Epson Settlement (Dkt. 1850), at 10 (“Of course, any unused portion of [the $3
 3   million litigation expense fund] will be distributed to the class.”). Cf. James v. Stockham Valves
 4   & Fittings Co., 559 F.2d 310, 359 (5th Cir. 1977) (explaining that interim fees awarded to
 5   plaintiffs “will of course be subtracted from the sum finally awarded for attorneys' fees for the
 6   full course of the litigation.”).
 7   VI.        CONCLUSION
 8              For the foregoing reasons, the Court should grant Class Counsel’s request for an advance
 9   of $3,000,000 for future litigation expenses, to be withdrawn only as needed from any Settlement
10   Fund created after final approval of the Chunghwa and Epson Settlements.
11
                                              Respectfully submitted,
12
     Dated: December 27, 2010                 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
13

14                                            By:              /s/ Eric. B. Fastiff
                                                               Eric B. Fastiff
15
                                              Richard M. Heimann (State Bar No. 063607)
16                                            Joseph R. Saveri (State Bar No. 130064)
                                              Eric B. Fastiff (State Bar No. 182260)
17                                            Brendan Glackin (State Bar No. 199643)
                                              Jordan Elias (State Bar No. 228731)
18                                            Andrew S. Kingsdale (State Bar No. 255669)
                                              275 Battery Street, 29th Floor
19                                            San Francisco, CA 94111-3339
                                              Telephone:      (415) 956-1000
20                                            Facsimile:      (415) 956-1008

21                                            Bruce L. Simon (State Bar No. 96241)
                                              PEARSON, SIMON, WARSHAW & PENNY, LLP
22                                            44 Montgomery Street, Suite 2450
                                              San Francisco, CA 94104
23                                            Telephone:    (415) 433-9000
                                              Facsimile:    (415) 433-9008
24
                                              Co-Lead Counsel for the Direct Purchaser Plaintiffs
25

26

27

28
     905368.4                                         - 10 -                          MASTER FILE NO. M 07-1827 SI
                      DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
                 IN SUPPORT OF MOTION FOR ADVANCEMENT OF LITIGATION EXPENSES FROM SETTLEMENT FUND

								
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