KANEFSKY v. HONEYWELL INTERNATIONAL INC.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

DAVID KANEFSKY, Individually and Docket No.: 18-cv-15536 (WJM)

on Behalf of all Others Similarly Situated,

Plaintiff:

ainlls, OPINION

v.

HONEYWELL INTERNATIONAL INC,,

DARIUS ADAMCZYK, and THOMAS A,

SZLOSEK,

Defendants.

WILLIAM J. MARTINI, U.S.D.J.:

Presently before the Court in this securities fraud class action against Defendant

Honeywell International Inc. (“Honeywell” or the “Company”), Darius Adamezyk, and

Thomas A. Szlosek (collectively, “Defendants”) are two motions by Plaintiffs: 1) for final

approval of a class action settlement; and 2) for an award of attorneys’ fees and expenses

and compensatory awards for the lead Plaintiffs, Charles M. Francisco (“Francisco”) and

Iron Workers Local 580 — Joint Funds (“Iron Workers”) (collectively, “Plaintiffs”), ECF

No. 182. For the reasons stated below, the motions are GRANTED and the settlement is

finally APPROVED.

I. BACKGROUND

A. Facts and Procedural History

Honeywell is a multinational conglomerate that produces a wide range of consumer

and industrial products. ECF No. 80, Amended Compl. § 26, ECF No. 22. Defendant

Darius Adamezyk at all relevant times was the Company’s President and Chief Executive

Officer. Jd. at | 27. Defendant Thomas A. Szlosek served as the Company’s Senior Vice

President and Chief Financial Officer until his retirement on August 3, 2018. Jd. at § 28, In

1999, Honeywell acquired Bendix Friction Materials (“Bendix”). /d. at 2. As a result of

the Bendix acquisition, Honeywell faced substantial liabilities due to Bendix’s use of

asbestos in the automobile brakes it manufactured. /d. In this putative securities class

action, Plaintiffs contend that Honeywell materially understated its Bendix-related asbestos

liabilities and misrepresented its internal controls over financial reporting and public

disclosures in violation of §§ 10(b) and 20(a) of the Exchange Act and Rule 10b-5

promulgated thereunder. See id. at 1, 132-42.

A more detailed recitation of the factual allegations of this case need not be

reiterated here as they are set forth in the Court’s May 18, 2020 Opinion denying

Defendant’s motion to dismiss the amended complaint, the July 21, 2020 Order reopening

the Private Securities Litigation Reform Act (“PSLRA”) lead-plaintiff selection process,

and the December 3, 2020 Opinion granting Iron Workers’ motion to serve as co-lead

plaintiff and approving appointment of co-lead counsel. See ECF Nos. 106, 128, 146.

B. The Proposed Settlement

After more than three years of litigation, the parties agreed on the terms of a

settlement (the “Settlement”). See Stipulation of Settlement (“Stipulation”), ECF No. 175;

see also Settlement Term Sheet attached as Ex. A, ECF No. 172. On December 7, 2021,

the parties sought preliminary approval of the Settlement which would resolve all

outstanding claims and issues in this case for $10,000,000 (“Settlement Amount”) and

result in the voluntary dismissal, with prejudice, of this action. The Stipulation defines! the

Class as:

All those who purchased the common stock of Honeywell

International Inc. during the period from February 9, 2018,

through and including October 19, 2018 (the “Class Period”),

and were damaged thereby, excluding Defendants, officers and

directors of Honeywell, members of their immediate families

and their legal representatives, heirs, successors, or assigns,

and any entity in which Defendants have or had a controlling

interest.

Stipulation, {[ 1.17.

On January 18, 2022, this Court granted preliminary approval of the Settlement,

(“Preliminary Approval Order”), finding that it “resulted from arm’s-length negotiations

between highly experienced counsel and falls within the range of possible approval” and

“raises no obvious reasons to doubt its fairness and raises a reasonable basis for presuming

that it satisfies the requirements under Fed, R. Civ. P. 23 and due process.” Preliminary

Approval Order § 2, ECF No. 179. The Court also preliminarily certified the Class for

settlement purposes only and approved the proposed Settlement notice documents and

notice plan, Jd. at {ff 3, 6.

A hearing on the final approval of the Settlement (the “Fairness Hearing”) was held

on May 3, 2022.

capitalized terms not otherwise defined herein are defined in the Stipulation of Settlement.

C. Notice

As of March 30, 2022,” the Postcard Notice approved in the Preliminary Approval

Order was mailed or e-mailed to 494,035 potential Class Members. See Joseph Mahan

Supplemental Decl. (“Mahan Suppl. Decl.”), { 4 attached as Ex. A to Kim E, Miller Decl.

(“Miller Decl.”), ECF No. 182-4; Joseph Mahan Decl. (“Mahan Decl.”), 6 attached as

Ex. 1 to Vincent M. Giblin Decl. Regarding Mailing and Publication, ECF No, 180-1.

The Postcard Notice advises of the Settlement and includes a Settlement website

(www.honeywellsecuritieslitigation.,com) that provides detailed information concerning

the Settlement including access to downloadable copies of the Proof of Claim form, Notice

of Pendency, the Stipulation, the Preliminary Approval Order, and the Amended Complaint

in this Action. See Mahan Decl., Ex. A; Mahan Suppl. Decl., 7. The Postcard Notice also

includes a toll-free number, 1-855-604-1686, which was established and maintained to

respond to inquiries from Class Members regarding the Settlement. See Mahan Suppl.

Decl., § 6. Finally, on February 7, 2022, Summary Notice was also published in the

Investor’s Business Daily and over PR Newswire. See Mahan Decl., 10, Ex. B.

The deadline for any objections to the Settlement was set for April 4, 2022. Miller

Decl., 4 39. As of April 26, 2022, 97,825 Proofs of Claim forms were submitted by

potential Class Members, but no objections to the Settlement were filed. See Mahan April

Decl., ff] 18, 19. As of April 26, 2022, eleven requested opt-out from the Settlement. Jd. at

4] 16, Ex. A. Of those requests, only one is from a Class Member (Exclusion Request 10),

five are from Honeywell investors who did not purchase during the Class Period and thus

are not Class Members (Exclusion Requests 3, 5, 6, 7, 11), two are from administrators of

the same deceased investor’s estate (Exclusion Requests 1, 2), and three are from

individuals that did not provide transactional information as required to ascertain whether

they are Class Members (Exclusion Requests 4, 8, 9). /d, at Ex. A. At the Fairness Hearing,

Co-Lead Counsel stated that an additional opt-out request was received on May 2, 2022.

D. Plan of Allocation

The Plan of Allocation provides for the distribution of $10,000,000 cash Settlement

Amount and the interest earned thereon (the gross “Settlement Fund”), less all taxes and

approved costs, fees, and expenses (the “Net Settlement Fund”) to Members of the Class

who submit acceptable Claim Forms (“Authorized Claimants”). See Notice of Pendency at

12, attached as Ex, A-1 to Stipulation, ECF No. 175-2. The Net Settlement Fund is to be

2 Asot April 26, 2022, over 500,000 Postcard Notices were mailed to potential Class Members. See Mahan Decl. of

April 26, 2022 (‘Mahan April Decl.”), § 7 attached as Ex, A to Giblin Decl. in Further Support of Mot. for Final

Approval, ECF No, 183-2, Note, however, that the deadline for submitting any objections or exclusion requests was

April 4, 2022.

distributed to Authorized Claimants on a pro rata basis, calculated according to each

Authorized Claimant’s recognized loss attributable to the alleged fraud relative to the total

of all Authorized Claimants’ recognized losses. Le.

Il. DISCUSSION

Plaintiffs’ motion to approve settlement asks this Court to: (1) find that the notice

of the Settlement given to potential Class Members was adequate; (2) approve the

Settlement as fair, reasonable, and adequate; (3) certify the Class under Rule 23 to

effectuate the class settlement; and (3) approve the Plan of Allocation for the disbursement

of the proceeds among Class Members, Plaintiffs also request an award of attorneys’ fees,

expenses, and compensatory awards for the lead Plaintiffs. Each issue is addressed in turn.

A. Motion to Approve Settlement

1, Adequacy of Notice

Before approving the settlement of a class action, the Court must “direct notice in a

reasonable manner to all class members who would be bound by the proposal.” Fed. R.

Civ, P, 23(e)(1). Rule 23(c}(2) requires notice of: “(i)} the nature of the action; (ii) the

definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class

member may enter an appearance through an attorney ifthe member so desires; (v) that the

court will exclude from the class any member who requests exclusion; (vi) the time and

manner for requesting exclusion; and (vii) the binding effect of a class judgment on

members under Rule 23(c)(3).” In addition, notice of the settlement must be the best that

is “practicable under the circumstances,” and “clearly and concisely state in plain, easily

understood language.” Fed. R. Civ. P. 23(c)(2). The form and manner of the notice must

satisfy the requirements of due process, Shapiro v. Alliance MMA, Inc., No. 17-2583, 2018

WL 3158812, at *7 (D.N.J. June 28, 2018). Moreover, any proposed settlement agreement

in a securities action that ts published or otherwise disseminated to the class must also

comply with the requirements of PSLRA, 15 U.S.C. § 78u-4(aj(7).

Here, the notice provided to Class Members satisfies the requirements of Fed. R.

Civ, P. 23, the PSLRA, and due process. The notices were provided to Class Members by

a third-party claims administration under Co-Lead Counsel’s supervision and describe: (1)

the nature of the action and the legal and factual bases for the claims, 2) the definition of

the certified class, (3) the key terms of the Settlement, including the Settlement Amount,

the process for each Class Member to receive a Settlement payment, and the release of

claims against Honeywell, (4) the binding nature of the Settlement on each Class Member,

and (5) the rights of each Class Member to retain separate legal counsel, object to the

Settlement, opt-out of the Class, or appear at the Fairness Hearing, as well as the deadlines

by which to do so. See Miller Decl. at § 40; Stipulation and attached Exhibits, Such notice

“contain[ed] sufficient information to enable class members to make informed decisions

4

on whether they should take steps to protect their rights.” In re Baby Prods. Antitrust Litig.,

708 F.3d 163, 180 (3d Cir. 2013).

Likewise, the manner in which Members were notified was the best practicable

under the circumstances and also satisfies the requirements of Rule 23 and due process.

Potential Class Members were notified by mail, email, and publication in accordance

with the Court’s Preliminary Approval Order. See supra, LC.

2. Girsh and Prudential Considerations of Settlement

Fed. R. Civ, P. Rule 23(c) requires court approval of any proposed settlement of a

class action. A court may, in its discretion, approve a proposed class action settlement “only

on finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(c); In re Prudential

Ins. Co, Am. Sales Practice Litig. Agent Actions, (‘Prudential’), 148 F.3d 283, 299, 316

(3d Cir.1998), The law encourages and favors the settlement of civil actions in federal

court, particularly in complex class actions where, as here, the settlement is the result of

arm’s-length negotiations between experienced counsel after meaningful discovery. Jn re

Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., (“General Motors”), 55

F.3d 768, 784 (3d Cir.1995); see also In re Warfarin Sodium Antitrust Litig., 391 F.3d 516,

5335 (3d Cir, 2004) (“Warfarin”). However, notwithstanding the general presumption in

favor of a settlement in the class action context, the Court also “acts as a fiduciary who

must serve as a guardian of the rights of absent class members.” General Motors, 55 F.3d

at 785 (citations and quotations omitted).

The Third Circuit has identified nine factors for evaluating a class action settlement:

(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class

to the settlement; (3) the stage of the proceedings and the amount of discovery completed;

(4) the risks of establishing lability; (5) the risks of establishing damages; (6) the risks of

maintaining the class action through the trial; (7) the ability of the defendants to withstand

a greater judgment; (8) the range of reasonableness of the settlement fund in light of the

best possible recovery; and (9) the range of reasonableness of the settlement fund to a

possible recovery in light of all the attendant risks of litigation. Girsh v. Jepson, 531 F.2d

153, 187 (3d Cir.1975).

Beyond these nine Girsh factors, additional factors the Court may consider when

appropriate and relevant, include: the maturity of the underlying substantive issues; the

existence and probable outcome of claims by other classes and subclasses; the comparison

between the results achieved by the settlement for individual class or subclass members

and the results achieved-or likely to be achieved-for other claimants; whether class or

subclass members are accorded the right to opt out of the settlement; whether any

provisions for attorneys’ fees are reasonable; and whether the procedure for processing

individual claims under the settlement is fair and reasonable. Prudential, 148 F.3d at 323.°

> Rule 23(e)(2) was amended in 2018 to include a list of factors for courts to consider in evaluating a proposed

“These factors are a guide and the absence of one or more does not automatically render

the settlement unfair.” Jn re Am. Family Enters., 256 B.R. 377, 418 (D.N.J. 2000)

(quotations omitted). Instead, the Court “must look at all the circumstances of the case and

determine whether the settlement is within the range of reasonableness under Girsh.” In re

Valeant Pharms. Int'l Inc, Sec. Litig., No. 15-07658, 2020 WL, 3166456, at *7 (D.N.J. June

15, 2020) (“Valeant”). The Court addresses each Girsh factor, and, where appropriate,

Prudential factor, in turn.

i. The complexity, expense and likely duration of the litigation

Analysis of the first Girsh factor “captures the probable costs, in both time and

money, of continued litigation.” In re Nat'l Football League Players Concussion Injury

Litig., 821 F.3d 410, 437 (3d Cir. 2016) (NFL Players Litig.”). Here, the costs, complexity

and likely duration of this case strongly favor settlement. “Federal securities class actions

by definition involve complicated issues of law and fact.” Jn re Royal Dutch/Shell Transp.

Sec. Litig., No. 04-374, 2008 WL 9447623, at *17 CD.N.J. Dec. 9, 2008). This action is

even more complex as it involves thorny issues regarding the accounting for asbestos

liabilities. In the three years that this case has been pending, the parties have gone through

extensive discovery, participated in case management and discovery conferences, and

engaged in considerable motion practice. Nonetheless, significant expense and discovery

remain, including taking more than a dozen depositions, retaining multiple experts, and

producing expert reports on complex issues. The time and expense of a securities class

action trial is substantial and would very likely lead to post-trial motions and subsequent

appeals that could extend this case for several more years, particularly given the COVID-

19 pandemic, which has undeniably slowed the litigation process.

ii. The reaction of the class to the settlement

“The second Girsh factor ‘attempts to gauge whether members of the class support

the settlement.’” Warfarin, 391 F.3d at 536 (quoting Prudential, 148 F.3d at 318), The

absence of any objections by Class Members and the small number of opt-outs relative to

the apparent size of the Class strongly weigh in favor of approval of the Settlement. See

e.g., NEL Players Litig. 821 F.3d at 438; Little-King v. Hayt Hayt & Landau, No. 11-5621,

2013 WL 4874349, at *21 (D.N.J. Sept. 10, 2013) (collecting cases).

iii, The stage of the proceedings and the amount of discovery

completed

The third Girsh factor “captures the degree of case development that class counsel

have accomplished prior to the settlement. Through this lens, courts can determine whether

settlement of a class action. The Third Circuit has, however, continued to apply the Girsh and Prudential factors, See

Inve Google Inc. Cookie Placement Consumer Priv. Litig., 934 F.3d 316, 329 Gd Cir. 2019), Accordingly, this Court

likewise focuses its analysis on the appropriate Girsh and Prudential factors.

class counsel had an adequate appreciation of the merits of this case before negotiating.”

Inre Cendant Corp. Litig., 264 F.3d 201, 235 Gd Cir. 2001) (quotations omitted), As noted

above, this case has been pending and actively litigated before this Court for over three

years. By the time the Settlement was reached, the parties had ample opportunity to develop

thoughtful and thorough evaluations of the relative strengths and weaknesses of their

claims or defenses. This factor undoubtedly favors approval of the Settlement.

iv. The risks of establishing liability and damages

Together, the fourth and fifth Girsh factors “survey the potential risks and rewards

of proceeding to litigation in order to weigh the likelihood of success against the benefit of

an immediate settlement.” Warfarin, 391 F.3d at 537. In other words, the Court must

consider “what the potential rewards (or downside) of litigation might have been had class

counsel elected to litigate the claims rather than settle them.” General Motors, 55 F.3d at

814. The Court weighs the value of an immediate guaranteed settlement against the

challenges that remain in proceeding with litigation. Even if the class is certified, which

Defendants would likely oppose, and Plaintiffs survive a summary judgment motion, there

is no guarantee that Plaintiffs would be successful in convincing a jury to hold Honeywell

liable. Plaintiffs would need to present expert testimony of expensive financial economic

experts using complex methodologies and would face significant risks in trying to prove

falsity, materiality, scienter, loss causation, and damages. While Plaintiffs certainly may

ultimately succeed in establishing liability and damages at trial, there is no reasonable

certainty that such a result is likely. Even assuming a favorable trial outcome, Defendants

might appeal, further delaying any benefit to the Class. Accordingly, this factor also weighs

in favor of approving the Settlement.

v. The risks of maintaining the class action through the trial

The sixth Girsh factor “measures the likelihood of obtaining and keeping a class

certification if the action were to proceed to trial.” Warfarin, 391 F.3d at 537 (citations

omitted). Plaintiffs expect that Defendants would vigorously oppose class certification,

where mixed evidence of price impact could pose substantial challenges to establishing

market efficiency under Halliburton Co. v. Erica P. John Fund, Ine., 573 U.S. 258, 283

(2014), and would entail a battle of experts. Hence, since the class has yet to be certified,

this factor favors supporting the Settlement.

vi. The ability of the defendants to withstand a greater judgment

Neither party has suggested that the Settlement Amount was in any way related to

Honeywell’s ability to pay. Thus, this factor is not relevant to the Court’s analysis,

vii. The range of reasonableness of the settlement fund in light of the

best possible recovery and all attendant risks of litigation

The eighth and ninth Girsh factors analyze “whether the settlement represents a

good value for a weak case or a poor value for a strong case.” Warfarin, 391 F.3d at 538.

“The factors test two sides of the same coin: reasonabieness in light of the best possible

recoyery and reasonabieness in light of the risks the parties would face if the case went to

trial.” Jd. Here, the Settlement provides a guaranteed recovery of $10 million, which is

approximately 12% of the $80.5 million that Plaintiffs, after consulting with their experts,

believe is the largest probable recovery if they were to prevail at trial. This figure exceeds

the median settlement of class action cases with comparable damages in 2021 (7.4%) and

between 2012-2020 (4.9%). Laarni T. Bulan, and Laura E. Simmons, Cornerstone

Research, Securities Class Action Settlements — 2021 Review and Analysis, at 6,‘ (noting

that median settlement for securities class actions in 2021 was $8.3 million). In light of the

risks of proceeding with litigation discussed above, and the certainty of the benefits

provided by the Settlement, these factors weigh in favor of approving the Settlement.

viii. ‘The Prudential Factors

In addition to the Girsh factors, the relevant Prudential factors favor approving the

Settlement. As has already been determined under analysis of the Gash factors, during the

three years of active litigation, Plaintiffs have had the chance to make an informed decision

about the appropriate settlement value of their claims. Class Members have had ample

opportunity to object or opt-out of the Settlement and were provided clear instructions on

how to do so. The procedures for processing individual claims are entirely fair and

reasonable, requiring only the submission of a Proof of Claim and Release form. See Proof

of Claim attached as Ex. A-2 to Stipulation, ECF No, 175-3. Finally, as explained in more

detail below, the attorneys’ fees requested are also fair and reasonable. See infra ILB.1,

3. Plan of Allocation

“Approval of a plan of allocation of a settlement fund in a class action is governed

by the same standards of review applicable to approval of the settlement as a whole: the

distribution plan must be fair, reasonable, and adequate.” In re AremisSoft Corp. Sec. Litig.,

210 F.R.D. 109, 126 (D.N.J. 2002) (citing In re Computron, Inc., 6 F. Supp. 2d 313, 321

(D.N.J. 1998); see also In re Cendant Corp. See. Litig., 109 F. Supp. 2d 235, 264 (D.N.J.

2000), aff'd sub nom. In re Cendant Corp. Litig., 264 F.3d 201 Gd Cir. 2001). “In general,

a plan of allocation that reimburses class members based on the type and extent of their

injuries is reasonable.” Jn re Ikon Off Sols., Inc., Sec. Litig., 194 F.R.D. 166, 184 (E.D. Pa.

2000). The present plan, which was developed in consultation with an economic expert,

provides for each Authorized Claimant to be reimbursed based on a pro rata share of the

4 Available at: www.cornerstone.com/wp-content/iploads/2022/03/Securities-Class-Action-Settlements-2021-

Review-and-Analysis.pdf

Net Settlement Fund based upon each Claimant’s recognized loss. The allocation plan is

fair, reasonable, and adequate.

4, Class Certification

In order to approve a class settlement agreement as fair under Fed. R. Civ. P, 23(c),

the Court must additionally determine that the requirements for class certification under

Rules 23(a) and (b) are also met. fn re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 257

(3d Cir, 2009). Each Rule 23 requirement must be established by a preponderance of the

evidence. Jn re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir, 2015), While

the class certification analysis may “entail some overlap with the merits of the plaintiffs

underlying claim,” the court considers merits questions only to the extent they are relevant

to performing the “rigorous analysis” required to determine whether the Rule 23

prerequisites are met. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011).

i. Rule 23(a) Factors

Rule 23{a) provides that class may be certified if: (1) the class is so numerous that

joinder is impracticable (“numerosity”); (2) there are questions of law or fact common to

the class (“commonality”); () the claims or defenses of the representative parties are

typical of the claims or defenses of the class (“typicality”); and (4) the representative parties

will fairly and adequately protect the interests of the class (“adequacy”). In re Constar

Ine. Sec. Litig., 385 F.3d 774, 780 (3d Cir. 2009) (quoting Fed. R. Civ. P. 23(a)). As

discussed below, the Rule 23{a) requirements for class certification are satisfied.

a, Numerosity

Numerosity is satisfied when joinder of all putative class members is impracticable.

Fed. R. Civ. P. 23(a)(1). Where the number of potential plaintiffs exceed forty, the

numerosity requirement is generally fulfilled. Stewart v. Abraham, 275 F.3d 220, 227 Gd

Cir, 2001), Moreover, courts in this Circuit “have recognized a presumption that the

numerosity requirement is satisfied when a class action involves a nationally traded

security.” Pope v. Navient Corp., No. 17-8373, 2021 WL 926611, at *6 (D.N.J. Mar. 11,

2021) (internal quotation and cites omitted). Here, not only does the class action involve

nationally traded security, the proposed Class well exceeds forty members as evidenced by

the 97,825 Proofs of Claim that have been received. Numerosity is therefore satisfied.

b. Commonality

Commonality requires that the members of the class must dssert a common

contention that is capable of classwide resolution such that the “determination of its truth

or falsity will resolve an issue that is central to the validity of each one of the claims in one

stroke.” Mielo v. Steak ‘n Shake Operations, Inc., 897 F.3d 467, 489-90 3d Cir. 2018)

(quoting Dukes, 564 U.S. at 350); see also Marcus v. BMW of N. Am., LLC, 687 F.3d 583,

597 (3d Cir. 2012) (noting that the “commonality requirement ‘does not require identical

claims or facts among class member[s]” (citations omitted)). “{[C]ourts in this circuit ...

have recognized that securities fraud cases often present a paradigmatic common question

of law or fact of whether a company omitted material information or made

misrepresentations that inflated the price of its stock.” Bing Liv. Aeterna Zentaris, Inc.,

324 F.R.D. 331, 339 (D.N.J. 2018) (internal quotation and citation omitted), aff'd sub nom.

Vizirgianakis v. Aeterna Zentaris, Inc., 775 F, App’x 51 (3d Cir. 2019),

In this case, as in most securities class actions, the dispute involves common issues

relating to alleged violations of federal securities laws, specifically whether Defendants:

made misrepresentations and omissions of material fact to the market as a whole, acted

with scienter, artificially inflated Honeywell security prices, and damaged the Class.

Commonality is thus satisfied.

c. Typicality

“The concepts of commonality and typicality are broadly defined and tend to

merge.” Baby Neal ex rel. Kanter v. Casey, 43 F.3d 48, 56 (3d Cir. 1994) (citation omitted).

“The typicality inquiry centers on whether the interest of the named plaintiffs align with

the interests of the absent members.” Stewart, 275 F.3d at 227 (citation omitted). Thus, the

typicality requirement ensures “that the class representatives are sufficiently similar to the

rest of the class—in terms of their legal claims, factual circumstances, and stake in the

litigation—so that certifying those individuals to represent the class will be fair to the rest

of the proposed class.” In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 597 Gd

Cir, 2009). “Factual differences will not render a claim atypical ifthe claim arises from the

same event or practice or course of conduct that gives rise to the claims of the [absent]

class members, and if it is based on the same legal theory.” Stewart, 275 F.3d at 227-28

(quoting Hoxworth y. Blinder, Robinson & Co,, 980 F.2d 912, 923 Gd Cir. 1992)), For the

typicality inquiry, a court thus compares “the attributes of the plaintiff, the class as a whole,

and the similarity between the plaintiff and the class.” Marcus, 687 F.3d at 598.

Plaintiffs’ claims here are typical because both Plaintiffs and Class Members were

injured by the same common course of conduct by Defendants— misrepresentations and

omissions regarding Honeywell’s Bendix-related asbestos liabilities—and Plaintiffs assert

violations of §§ 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated

thereunder, just as Class Members would have. See Pope, 2021 WL 926611, at *7. Nor is

either Plaintiff “subject to a defense that is both inapplicable to many members of the class

and likely to become a major focus of the litigation.” Jn re Schering Plough Corp., 589

F.3d at 599. Thus, Plaintiffs stand in precisely the same position as the putative Class

Members. Accordingly, Plaintiffs meet the requirements of typicality.

d. Adequacy

Adequacy “encompasses two distinct inquiries designed to protect the interests of

absentee class members.” Prudential, 148 F.3d at 312. “First, [it] tests the qualifications

of the counsel to represent the class.” Jd, “Second, it ‘serves to uncover the conflicts of

interest between named parties and the class they seek to represent.’” /d. (quoting Amchem,

~ 10

521 U.S. at 625).

As this Court has previously noted, both firms selected by Plaintiffs - Kahn Swick

& Foti, LLC (“KSI”) and Pomerantz LLP (“Pomerantz”) are highly experienced. See Dec.

17, 2019 Op. at 3, ECF No. 75 (“KS&F is highly experienced and has previously

represented classes in asbestos-reserve litigation.”); see also Dec. 3, 2020 Op. at 4, ECF

No. 146 (“Pomerantz has substantial experience litigating class actions brought under the

federal securities laws.”). KSF and Pomerantz have served as lead counsel in securities

class actions in federal courts across the country and have each won substantial recoveries

for classes represented by their firms in other securities class actions and complex

litigation. See ECF Nos. 55-6 (XSF) and 136-2 (Pomerantz). Moreover, both are very

familiar with the applicable legal issues, and have devoted considerable resources to

advancing the Class’s interests. Plaintiffs’ counsel are qualified to represent the Class.

Regarding the second prong, there is no conflict of interest between the named

parties and the Class. Amchem, 521 U.S. 591, 625-26. Plaintiffs, having suffered the same

injury as the Class Members, possess the same interest and will adequately represent the

interests of the Class. Accordingly, the adequacy requirement is met.

ii. Rule 23{b)(3) Factors

Next, in addition to Rule 23(a), class certification requires that a plaintiff also meet

one of the requirements set forth in Rule 23(b), Plaintiffs here specifically seek certification

of a settlement class under Rule 23(b}\(3), which permits certification only if (1) questions

of law or fact common to class members predominate over individual questions

(“predominance”), and (2) a class action is the superior method for fairly and efficiently

adjudicating the controversy (“superiority”). Fed. R. Civ. P. 23(b)(3). To determine

predominance and superiority, the Court considers: “(A) the class members’ interests in

individually controlling the prosecution or defense of separate actions; (B) the extent and

nature of any litigation concerning the controversy already begun by or against class

members; (C) the desirability or undesirability of concentrating the litigation of the claims

in the particular forum; and (D) the likely difficulties in managing a class action.” Amechem

Prod., Inc. v. Windsor, 521 U.S. 591, 615-16 (1997). As set forth below, the predominance

and superiority requirements of Rule 23(b)(3) are satisfied.

a. Predominance

Predominance requires the court to evaluate whether “questions of law or fact

common to class members predominate over any questions affecting only individual

members.” Fed. R. Civ, P, 23(b)(3), The inquiry, while similar to the considerations under

Rule 23(a)’s commonality requirement, is a “far more demanding” standard that requires

the Court to determine if the proposed class is sufficiently cohesive that members of the

class may use the same evidence to make a prima facie showing of their claims and those

claims are subject to class-wide proof. Tyson Foods, Inc. v. Bouaphakeo, 136 8. Ct. 1036,

1045 (2016). “[T]he focus of the predominance inquiry is on whether the defendant’s

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conduct was common as to all of the class members, and whether all of the class members

were harmed by the defendant’s conduct.” Sullivan v. DB Invs., Inc., 667 F.3d 273, 298

(3d Cir, 2011); see also Warfarin, 391 F.3d at 528 (finding predominance in “broad-based”

campaign to deceive providers and patients regarding a generic equivalent). The mere

existence of individual questions does not preclude a finding of predominance, nor does

the possibility that some individualized inquiry as to damages may be required. Neale v.

Volvo Cars of North America, LLC, 794 F.3d 353, 371 (3d Cir. 2015), Rather, the Court

engages in a qualitative examination of both common and individual issues. /d. (citing

Amgen Ine. v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 468 (2013)).

Here, Defendants’ alleged omissions or misrepresentations provide the basis for

liability as to all potential Class Members. Damages will be calculated on a class-wide

basis. Thus, as in many securities fraud class actions, the predominance requirement is

“readily met.” Amchem, 521 U.S. at 625. No individual inquiry will be necessary regarding

Defendants’ liability to each Class Member. Predominance is satisfied.

b. Superiority

Finally, to establish superiority, a plaintiff must demonstrate that “a class action is

superior to other available methods for the fair and efficient adjudication of the

controversy.” Fed. R, Civ. P. 23(b)(3). This inquiry requires the Court to “balance, in terms

of fairness and efficiency, the merits of a class action against those of alternative available

methods of adjudication.” Danvers Motor Co. v. Ford Motor Co., 543 F.3d 141, 149 Gd

Cir, 2008) (citation omitted), Factors relevant to a finding of superiority include:

(A) the class members’ interests in individually controlling the prosecution

or defense of separate actions; (B) the extent and nature of any litigation

conceming the controversy already begun by or against class members; (C)

the desirability or undesirability of concentrating the litigation of the claims

in the particular forum; and (D) the likely difficulties in managing a class

action.

Fed. R. Civ. P. 23(b)@).

Here, many of the putative Class Members are individuals for whom prosecution of

a costly individual action for relatively minor damages is not a realistic or efficient

alternative. No Class Member has brought a separate claim, which would likely be

consolidated into this action anyway. Moreover, with respect to securities fraud claims,

without class actions, defrauded investors whose losses do not run into several millions of

dollars would have no practical recourse. See Phillips Petroleum Co. v. Shutts, 472 U.S,

797, 809 (1985) (“most of the plaintiffs would have no realistic day in court if a class action

were not available”). Litigating these claims separately would further unduly burden the

judicial system. Warfarin, 391 F.3d at 534. Fairness and efficiency accordingly weigh in

favor of a finding that a class action is the superior method of adjudicating these claims.

See In re Tropicana Orange Juice Mktg, & Sales Practices Litig., No. 11-07382, 2019 WL

2521958, at *6 (D.N.J. June 18, 2019). Hence, a class action is the superior method of

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adjudication in this matter.

5. Approval of Co-Lead Counsel as Class Counsel

A court that certifies a class must also appoint class counsel whose duty is to fairly

and adequately represent the interests of the class. See Fed. R, Civ, P. 23(g) and (d). In

determining class counsel, the Court must consider: (i) the work undertaken by counsel in

identifying or investigating the potential claims; (ii) counsel’s experience in handling class

actions, other complex litigation, and similar claims; (iif) counsel’s knowledge of the

applicable law; and (iv) the resources that counsel will commit to representing the class.

Fed. R. Civ, P. 23(g)(1)(A). Both firms selected by Plaintiffs - KSF and Pomerantz — have

actively advanced the Class’s claims, have committed considerable time, resources, and

skills to the successful representation of the Class, and as noted earlier, are qualified to

fairly and adequately represent the interests of the Class. KSF and Pomerantz are approved

as Class Counsel.

B. Motion for Attorneys’ Fees

Co-Lead Counsel request an award of attorneys’ fees of 29,2% of the total recovery

of $10,000,000 for a fee of $2,920,000, reimbursement of expenses in the amount of

$149,453.67 plus interest, compensatory awards of $10,000 to each of the two lead

Plaintiffs, and a limited award of attorneys’ fees and reimbursement of litigation expenses

for Franciso’s terminated counsel Levi & Korsinsky (““L&K”).

1. Attorney’s Fees for Co-Lead Counsel

Pursuant to Rule 23(h), the Court “may award reasonable attorney’s fees and

nontaxable costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P.

23(h). Although the decision to award attorneys’ fees and expenses is within the Court’s

discretion, the Court must carefully review the negotiated award to ensure that it is fair,

reasonable, and adequate. Little-King, 2013 WL 4874349, at *18; see also In re Rite Aid

Corp. Sec, Litig., 396 F.3d 294, 300 (3d Cir. 2005). In evaluating an award of attorneys’

fees, courts typically apply one of two methodologies: (1) the lodestar method in which the

number of hours worked by Class Counsel is multiplied by a reasonable hourly billing rate

for such services; or (2) the percentage-of-recovery method in which Class Counsel is

awarded a certain percentage of the Settlement Amount. Jn re AT&T Corp., Sec. Litig., 455

F.3d 160, 164 (3d Cir. 2006). Where, as here, the Settlement provides for the payment of

attorneys’ fees from the same source as the pool of settlement funds available to Class

Members, the arrangement “is, for practical purposes, a constructive common fund” that is

best analyzed using the percentage-of-recovery methodology. See Dewy v. Volkswagen

AG, 558 F. App’x 191, 197 (3d Cir. 2014); see also General Motors, 55 F.3d at 820-21.

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i. Percentage of Recovery Analysis

The Third Circuit has identified a number of factors for the Court to consider in

determining whether a fee award is reasonable under the percentage-of-recovery analysis:

(1) the size of the fund created and the number of persons benefitted; (2) the presence or

absence of substantial objections by members of the class to the settlement terms and/or

fees requested by counsel; (3) the skill and efficiency of the attorneys involved; (4) the

complexity and duration of the litigation; (5) the risk of nonpayment; (6) the amount of

time devoted to the case by plaintiffs’ counsel; and (7) the awards in similar cases. Gunter

v. Ridgewood Energy Corp., 223 F.3d 190, 195 n.1 (Gd Cir. 2000). In addition to these

seven factors, a court may evaluate these three additional factors: (8) the value of benefits

attributable to efforts of class counsel relative to the efforts of other groups, such as

government agencies conducting investigations; (9) the percentage fee that would have

been negotiated had the case been subject to a private contingent fee arrangement at the

time counsel was retained; and (10) any innovative terms of settlement. Jn re Diet Drugs

(Phentermine/Flenfuramine/Dexflenfuramine) Prods, Liab, Litig., 582 F.3d 524, 541 Gd

Cir, 2009).

Several of these factors overlap considerably with those already considered by the

Court in approving the Settlement as fair, reasonable, and adequate. For example, the Court

has already decided that the duration and complexity of this case (factor 4) were both

substantial. See supra, ILA.2.4. Similarly, the Court has already noted the lack of any

objections to the Settlement (factor 2), notice of which included specific information about

the fees and expenses requested by Co-Lead Counsel. See supra, IL.A.2.ii; Notice of

Pendency at 5, 9; see also Valeant, 2020 WL 3166456, at *12. Finally, the Court has

already analyzed the risk of nonpayment (factor 5) by noting the various risks, including

the risk of an unsuccessful trial or appeal, that would render Plaintiffs, and their

contingency-fee based counsel unable to recover anything at all. See supra, I.A.2.iv.; In

re Merck & Co., Inc. Vytorin ERISA Litig., No. 08-CV-285, 2010 WL 547613, at *11

(D.N.J. Feb. 9, 2010) CMerck”). Accordingly, as with the Settlement, each of these factors

weighs strongly in favor of approving the request for an award of attorneys’ fees and

expenses,

The remaining factors also support the award of attorneys’ fees and expenses. The

first factor supports the requested award because the $10 million Settlement Amount

benefits thousands of investors and is all cash.

Likewise, the third factor supports approving the requested fee award. This factor

measures the “quality of the result achieved, the difficulties faced, the speed and efficiency

of the recovery, the standing, experience and expertise of counsel, the skill and

professionalism with which counsel prosecuted the case and the performance and quality

of opposing counsel.” Valeant, 2020 WL 3166456, at *12 (quotations omitted). Here, as

already noted, the $10 million Settlement is immediate and substantially benefits the Class

particularly in light of the length of this case, the complex issues involved, and the zealous

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advocacy on both sides by Plaintiffs’ counsel and Defendants’ counsel, both highly

reputable firms with experience in complex class actions and civil litigation.

The sixth factor weighs in favor of approving the requested fee award. Over the

course of this complex litigation, Co-Lead Counsel have devoted a combined 6,129 hours

to this case. Miller Decl. { 63, Furthermore, Co-Lead Counsel will likely be expending

additional hours and resources assisting Class Members with the claims process.

In evaluating the reasonableness of a requested fee award, the seventh factor

requires the Court to compare the requested award to those approved in similar cases. The

Third Circuit has found that, in common fund cases such as this one in which the

percentage-of-recovery methodology is used, the fees typically awarded to class counsel

generally range between 19% to 45% of the settlement fund. General Motors, 55 F.3d at

822. Here, the total requested award of fees and expenses of $2,920,000 is exactly 29.2%

of the Settlement Amount. Thus, the requested award of attorneys’ fees and expenses is

well within the reasonable range of awards approved by the Third Circuit and is consistent

with similar class action settlements. Compare In re Ins. Brokerage Antitrust Litig., 297

F.R.D. 136, 155 (D.N.J, 2013) (approving fee award equal to 33.33% of $10.5 million

settlement); Merck, 2010 WL 547613, at *11 (approving fees equal to 33.33% of $41.5

oiillion settlement fund); Milliron v. T-Mobile USA, Inc., No. 08-4149, 2009 WL 3345762,

at *14 (D.NJ. Sept. 10, 2009) (approving fees equal to 33.33% of $13.5 million settlement

fund), Accordingly, this factor also supports approval of the requested fee award.

The eighth factor also weighs in favor of approving the requested award for

attorneys’ fees and expenses, The claims in this case were independent of any investigative

reports or enforcement actions by any governmental entity. Thus, the value of the

Settlement achieved is directly attributable to the efforts of Co-Lead Counsel and supports

the reasonableness of the requested fee award. See Valeant, 2020 WL 3166456, at *14.

The requested award of fees and expenses relative to the size of the recovery and

constructive common fund is also in line with contingent fees that are routinely negotiated

in the private marketplace. Merck, 2010 WL 547613, at *12 (citing cases). As such, the

ninth factor also supports approval of the requested award,

As to the final factor, Plaintiffs have not identified any innovative terms of the

Settlement for the Court to consider that weighs in favor of approving the requested award

of fees and expenses.

ik. Lodestar Cross-Check

Courts in this District are encouraged to “cross-check” the reasonableness of

percentage fee awards against the lodestar method. See Rite Aid Corp. Sec. Litig., 396 F.3d

at 305-06. Here, the total lodestar amount for Co-Lead Counsel is $3,484,777.50. Miller

Decl. 963, When combined with L&K’s requested fee of $243,544.37, see discussion infra,

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the lodestar multiplier is 0.78, which is below the reasonable range approved by the Third

Circuit and courts in this District. See Prudential, 148 F.3d at 341 (‘Multiples ranging from

one to four are frequently awarded in common fund cases when the lodestar method is

applied.” (quotations omitted)). The requested fee award is thus reasonable when cross-

checked under the lodestar method.

2, Expenses

In addition to the $2,920,000 fee award, Co-Lead Counsel request payment of

$149,453.67 (plus interest earned at the same rate as that earned by the Settlement Fund’),

which is the sum of all unreimbursed litigation expenses incurred as follows: 1) $93,972.67

by KSF, see Miller Decl., | 81; 2) $47,114.15 by Pomerantz, see Joshua B. Silverman

Decl., 5 attached as Ex. B to Miller Decl.; 3) $514.80 by Liaison Counsel DeCotiis,

Fitzpatrick, Cole & Giblin, see Vincent M. Giblin Decl. Regarding Fees and Expenses, 5

attached as Ex. C to Miller Decl.; and 4) $7,852.05 by L&K, see Adam M. Apton Decl.

(“Apton Decl.”), 5 attached as Ex. D to Miller Decl. Class Counsel is “entitled to

reimbursement of expenses that were adequately documented and reasonably and

appropriately incurred in the prosecution of the class action.” In re Safety Components, Inc.

See. Litig., 166 F. Supp. 2d 72, 108 (D.N.J. 2001). Here, Co-Lead Counsel have produced

an itemized list of expenditures, Miller Decl., 78, 81. These expenditures, which are for

expert or consultants, computer research, and travel, “are the type of expenses routinely

charged to hourly paying clients and, therefore, should be reimbursed out of the common

fund.” In re Ocean Power Techs., Inc., No. 14-3799, 2016 WL 6778218, at *29 (D.N.J.

Nov. 15, 2016). Moreover, no objections have been filed to the expense request.

Accordingly, Co-Lead Counsel’s request for reimbursement of $149,453.67 in expenses

plus interest is approved.®

3. Case Contributions to Representative Plaintiffs

Co-Lead Counsel seek an award of $10,000 for each of the two Co-Lead Plaintiffs

-- Charies Francisco and Iron Workers. The Court finds the requested case contribution

awards to be fair and reasonable, Both Co-Lead Plaintiffs devoted substantial time and

effort to prosecuting this litigation including: reviewing pleadings, motions, and other

documents; producing discovery documents and responses; communicating with counsel; □

and staying apprised of developments such as settlement discussions. Accordingly, the

Court approves the case contribution awards of $10,000 for each of the two named Class

representatives.

The Notice of Pendency states that Co-Lead Counsel may seek interest on reimbursement of expenses. Notice of

Pendency at 9.

Interest is calculated from the date of the final Opinion and Order rather than from the date of the Fairness Hearing,

although here those dates are the same. See i re Safety Components, 166 F. Supp. 2d at 109,

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4, Attorneys’ Fees for Terminated Counsel

Finally, Plaintiffs (through Co-Lead Counsel) do not contest L&K’s limited fee

request of $190,742.53, which is calculated as follows: 1) taking L&K’s total lodestar of

$243,544,38 (derived from the sum of $197,367.50 for work performed on dates prior to

May 12, 2019 plus $46,176.88, which is 50% of $92,353.75 for work performed from May

13, 2019 to August 18, 2019), see Apton Decl., J] 3,4; and 2) applying the same 0.78

multiplier applicable to Co-Lead Counsel to the L&K lodestar, Co-Lead Counsel do not

contest L&IK fees being awarded from its 29.2% fee request so that overall fees for all

counsel are within the fees identified in the notice to Class Members. This limited award

sought by L&I is reasonable and is therefore approved.

Ti. CONCLUSION

In sum, the Settlement, which has no objectors, is fair, reasonable, and adequate

under Fed, R. Civ. P. 23(c), notice was adequate, and certification of the proposed Class is

appropriate under Rules 23(a) and (b). Thus, Plaintiffs’ unopposed motion to certify the

Class, for approval of Co-Lead Counsel as Class Counsel, and for final approval of the

Class Action Settlement is GRANTED. Plaintiffs’ request for attorneys’ fees, expenses,

and awards for the lead Plaintiffs is also fair and reasonable, and accordingly, is also

GRANTED. An appropriate Order follows.

/sf William J. Martini

WILLIAM J. MARTINI, U.S.D.J.

Date: May 3, 2022

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