Petition for Writ of Certiorari — Xanadu Corp., et al., Petitioners v. Meor Adlin, et al.

APPENDIX TABLE OF CONTENTS

OPINIONS AND ORDERS

Memorandum Opinion, U.S. Court of Appeals for

the Ninth Circuit (February 27, 2024) .............. 2a

Order Granting Secondary Distribution of Funds,

U.S. District Court for the Northern District

of Califorina (January 19, 2023) ........................ 7a

Order Setting Hearing, U.S. District Court

for the Northern District of Califorina

(September 28, 2022)........................................ 20a

Order, U.S. District Court for the Northern

District of Califorina (February 3, 2022) ......... 22a

REHEARING ORDERS

Order Denying Motion for Reconsideration,

U.S. District Court for the Northern District

of Califorina (January 25, 2023) ...................... 27a

App.2a

MEMORANDUM* OPINION, U.S. COURT OF

APPEALS FOR THE NINTH CIRCUIT

(FEBRUARY 27, 2024)

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

________________________

IN RE: TRANSPACIFIC PASSENGER AIR

TRANSPORTATION ANTITRUST LITIGATION,

________________________

MEOR ADLIN; ET AL.,

Plaintiffs-Appellees,

v.

XANADU CORP.; DAVID GOULD,

Objectors-Appellants,

v.

ALL NIPPON AIRWAYS,

Defendant.

________________________

No. 23-15118

D.C. No. 3:07-cv-05634-CRB

* This disposition is not appropriate for publication and is not

precedent except as provided by Ninth Circuit Rule 36-3.

App.3a

Appeal from the United States District Court

for the Northern District of California

Charles R. Breyer, District Judge, Presiding

Argued and Submitted February 12, 2024

San Francisco, California

Before: BEA, HAMILTON,** and CHRISTEN,

Circuit Judges.

MEMORANDUM

Objectors-Appellants Xanadu Corp. and David

Gould appeal the district court’s orders granting

attorneys’ fees and a secondary distribution of settlement funds, and denying reconsideration. Because the

parties are familiar with the facts, we do not recount

them here. We have jurisdiction pursuant to 28 U.S.C.

§ 1291, and we affirm.

“Questions of standing are . . . reviewed de novo,

but underlying factual findings are reviewed for clear

error.” NEI Contracting & Eng’g, Inc. v. Hanson

Aggregates Pac. Sw., Inc., 926 F.3d 528, 531 (9th Cir.

2019) (omission in original) (citation omitted). We

review for abuse of discretion a district court’s approval

of a settlement distribution and award of fees to class

counsel. In re Google Inc. St. View Elec. Commc’ns

Litig., 21 F.4th 1102, 1110 (9th Cir. 2021).

1. The Objectors lack standing to object to Class

Counsel’s motion. “Every class member must have

Article III standing in order to recover individual

** The Honorable David F. Hamilton, United States Circuit Judge

for the U.S. Court of Appeals for the Seventh Circuit, sitting by

designation.

App.4a

damages,” and Objectors bear the burden of proving

standing. TransUnion LLC v. Ramirez, 594 U.S. 413,

430-31 (2021). To be a class member, Xanadu had to

have purchased tickets from a settling airline. See Ill.

Brick Co. v. Illinois, 431 U.S. 720, 746 (1977). The district court did not clearly err by implicitly finding that

Xanadu had not established any qualifying ticket

purchases. As such, Xanadu is not a class member

with standing to object to settlement proceedings.

Gould is a class member who received and cashed

his settlement distribution, but “[s]imply being a member of a class is not enough to establish standing[;]

[o]ne must be an aggrieved class member” to have

standing to object to a settlement-related order. In re

First Cap. Holdings Corp. Fin. Prods. Sec. Litig., 33

F.3d 29, 30 (9th Cir. 1994). Gould had actual notice of

the motion and stood to receive additional funds from

the secondary distribution. He has not articulated any

concrete and particularized injury arising from other

class members not receiving notice of the motion or

notice of their uncashed checks, and he did not object

to the amount of the fees or otherwise argue that he

should have received additional funds from the subsequent distribution. Gould therefore lacks Article III

standing to object to the order granting supplemental

distribution. See Lujan v. Defs. of Wildlife, 504 U.S.

555, 560-61 (1992).

Despite the Objectors’ lack of standing, the district court properly exercised its retained jurisdiction

over the distribution of the settlements, consistent

with its fiduciary duty to the entire class. “This duty

exists independent of any objection from a member of

the class.” In re Optical Disk Drive Prods. Antitrust

App.5a

Litig., 959 F.3d 922, 929 (9th Cir. 2020). We therefore

reach the merits of the district court’s orders.

2. The district court did not abuse its discretion

by approving notice of the motion for attorneys’ fees

and for secondary distribution of settlement funds.

Notice of a motion for attorneys’ fees “must be served

on all parties and, for motions by class counsel,

directed to class members in a reasonable manner.”

Fed. R. Civ. P. 23(h)(1). There is no analogous notice

requirement for redistribution or for class members

who do not cash their checks. Given the direct notices

of prior settlements and fee requests and the small

value of most of the uncashed checks, “it would be

difficult to say that due process requires a personal

. . . notice to be mailed to . . . class members who have

already received the . . . settlement notice.” In re

Gypsum Antitrust Cases, 565 F.2d 1123, 1127 (9th Cir.

1977). The court’s approval of the website-only notice

here was not an abuse of discretion.

The district court did not abuse its discretion by

approving the secondary distribution of settlement

funds rather than directing the funds to the state

treasuries associated with the last known address of

each intended recipient. Because jurisdiction in this

case is based on a federal question, federal law

governs the disposition of unclaimed funds and the

federal custodial escheat statute, 28 U.S.C. §§ 204142, would apply were the funds deposited with the

court. However, the district court has “broad discretionary powers” in distributing settlement funds, Six (6)

Mexican Workers v. Ariz. Citrus Growers, 904 F.2d

1301, 1307 (9th Cir. 1990), and the district court did

not abuse its discretion by approving the request for

supplemental distribution of settlement funds to class

App.6a

members who had participated by cashing their

checks.

AFFIRMED.

App.7a

ORDER GRANTING SECONDARY

DISTRIBUTION OF FUNDS, U.S. DISTRICT

COURT FOR THE NORTHERN

DISTRICT OF CALIFORINA

(JANUARY 19, 2023)

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF CALIFORNIA

________________________

IN RE TRANSPACIFIC PASSENGER AIR

TRANSPORTATION ANTITRUST LITIGATION,

This Document Relates to:

ALL ACTIONS

________________________

Case No. 07-cv-05634-CRB

Before: Charles R. BREYER,

United States District Judge.

ORDER GRANTING PLAINTIFFS’ MOTION

FOR SECONDARY DISTRIBUTION OF

REMAINING SETTLEMENT FUNDS AND

REQUEST FOR ATTORNEYS’ FEES AND

REIMBURSEMENT OF EXPENSES

This litigation has been completely settled since

December 2019, when the Court granted final approval

of the last settlement (ECF No. 1318) and entered a

final judgment as to the last Defendant (ECF No.

1319). In the approximately two years after that, the

claims administrator, Rust Consulting, Inc. (“Rust”),

App.8a

processed settlement class members’ claims to the

settlements and made an initial distribution of the net

settlement funds on March 17, 2022. Plaintiffs now

seek entry of an order authorizing a secondary

distribution of the remaining uncashed net settlement

funds, additional claims administration expenses, and

further attorneys’ fees and reimbursement of expenses in connection with settlement administration.

The Court, having reviewed Plaintiffs’ Notice of

Motion and Motion for Secondary Distribution of

Remaining Settlement Funds and Request for Attorneys’ Fees and Reimbursement of Expenses (“Motion”)

(ECF No. 1347), the objections by Corp Xanadu, David

Gould, and Kelly Overvold (together, “Objectors”) (ECF

Nos. 1353, 1357), Plaintiffs’ reply in support of the

Motion (ECF No. 1356), Plaintiffs’ notices regarding

Corp Xanadu’s claim, including Rust’s final determination as to Corp Xanadu’s claim (ECF Nos. 1370,

1371, 1374), and the Court’s files and records in this

matter, hereby finds that the relief requested is

almost entirely appropriate.

Accordingly,

DECREED that:

it

is

hereby

ORDERED

and

1. The Court authorizes a holdback of $50,000 for

Claimant Michael Chekian1;

2. The Court overrules the objections by Objector

Corp Xanadu, because Corp Xanadu did not establish

that it had any qualifying purchases. In failing to do

1 See Tr. of Remote Zoom Video Conference Proceedings 14:1718. 16:1-3 (Nov. 4, 2022) (ECF No. 1347). If Mr. Chekian is unable

to produce adequate support for his claim, the $50,000, or a

relevant portion thereof, will be subject to cy pres distribution.

App.9a

so, therefore, not only has it failed to establish that it

is entitled to share in the settlement proceeds, but it

has also failed to establish that it is a settlement class

member. Courts considering class action settlements

must verify that every class member has standing, and

it is the class member’s burden to establish standing.

In re Volkswagen “Clean Diesel” Mktg., No. 15- MD02672-CRB, 2022 WL 17730381, at *1 (N.D. Cal. Nov.

9, 2022) (citing TransUnion LLC v. Ramirez, 141 S. Ct.

2190, 2207-08 (2021)). Non-class members have no

standing to object to the settlement of a class action.

Clean Diesel, 2016 WL 6248426, at *22 (N.D. Cal. Oct.

25, 2016), aff’d sub nom. Clean Diesel, 895 F.3d 597

(9th Cir. 2018), and aff’d sub nom. Clean Diesel, 741

F. App’x 367 (9th Cir. 2018).

3. Corp Xanadu (claim number 0000144970) filed

a claim to the settlements in this litigation. Rust

audited Corp Xanadu’s claim because the audit

threshold established for businesses was 1,000 or

more tickets. Corp Xanadu did not support any of its

claimed ticket purchases with actual invoices or other

corporate records. Instead, Corp Xanadu’s alleged 1,337

claimed tickets are supported by a one-page Affidavit,

executed by the alleged Secretary of Corp Xanadu,

Carlos Suica, on October 2, 2020 in response to Rust’s

September 20, 2020 audit letter. On September 30,

2022, at the direction of the Court (ECF No. 1358) and

the request of Class Counsel, Rust requested additional documentation or information from Corp

Xanadu to establish the legitimacy of its claim.

4. Rust has now completed reviewing the documents and information that Corp Xanadu provided by

November 30, 2022 and has made a determination on

Corp Xanadu’s claim (ECF No. 1374). Specifically,

App.10a

Rust determined “there is $0 due in settlement

benefits” to Corp Xanadu based on numerous factors,

including, but not limited to:

(a) The 144 American Airlines itineraries that

Corp Xanadu provided for claimed ticket

purchases between the dates of July 2015

and August 2015 did not verify that Corp

Xanadu was the payor of the foregoing

claimed ticket purchases. Thus, even though

those purchases fell within a qualifying period

for the settlement classes, Corp Xanadu provided no documentation (e.g., bank statements) that it paid for such purchases2;

(b) During an interview with Rich Sutton, Corp

Xanadu’s CEO, Mr. Sutton informed Rust

that the documents used to determine the

number of tickets claimed for American Airlines and the other airlines were destroyed.

Without this information, Rust was unable

to verify the methodology used to determine

the number of ticket purchases claimed;

(c) Rust requested, but Corp Xanadu did not

provide, the date when the foregoing documents were destroyed and information to

explain the difference in the records maintained for the years 2002 – 2008 and 2009 –

2 Rust noted that Corp Xanadu redacted the name of the payor

from all itineraries that it provided to Rust, which the Court

finds to be inconsistent with Corp Xanadu’s obligation to demonstrate that it was the purchaser of these tickets. See Miller v.

Ghirardelli Chocolate Co., No. 12-CV-04936-LB, 2015 WL

758094, at *10 (N.D. Cal. Feb. 20, 2015) (holding that three

objectors lacked standing to challenge settlement because none

had purchased the defendant’s product and suffered injury).

App.11a

2015, including the names of the employees

that maintained the records for these two

time periods. Accordingly, Rust was not able

to verify that the documentation ever existed

to substantiate the ticket purchases claimed;

(d) Aside from the claimed purchases on American Airlines, Corp Xanadu provided no documentation of purchases for any travel on

other qualifying airlines to substantiate its

claim;

(e) Rust also asked Corp Xanadu to provide any

marketing material and/or magazine ads for

Corp Xanadu services to confirm the nature

of Corp Xanadu’s business, which Corp

Xanadu never provided; and

(f)

After Mr. Sutton represented that Corp

Xanadu never owned any property in the

United States, including vehicles, Rust asked

Corp Xanadu to explain why it filed a claim

and received a settlement payment in In re:

Parking Heaters Antitrust Litigation in 2019

(this indirect purchaser plaintiff settlement,

which Rust administered, paid monies to

those who purchased an aftermarket parking

heater for their commercial vehicles between

October 1, 2007 and December 31, 2012).

Corp Xanadu did not provide any explanation.

5. In summary, Rust determined that Corp

Xanadu is not a settlement class member because it

does not have any valid claim to the net settlement

funds. As Corp Xanadu is not a settlement class member, the Court need not consider its objections.

App.12a

6. The Court will nevertheless address the merits

of all objections raised. The Court overrules the

objections by Objectors Corp Xanadu, David Gould,

and Kelly Overvold for several reasons:

(a) First, the Objectors received notice of the

proposed secondary distribution and filed

objections, directly contradicting their argument that Plaintiffs and Rust failed to provide reasonable notice of such distribution.

Furthermore, Class Counsel already provided

notice of each of the three rounds of settlements, which the Court approved (ECF Nos.

1009, 1259-1, 1318). There is no authority for

the proposition that a comprehensive notice

program pursuant to Federal Rule of Civil

Procedure 23 is required when Class Counsel

and the Court are simply seeking to redistribute uncashed settlement funds as part of

the claims administration process. See, e.g.,

Six (6) Mexican Workers v. Arizona Citrus

Growers, 904 F.2d 1301, 1307 (9th Cir. 1990)

(“Federal courts have broad discretionary

powers in shaping equitable decrees for

distributing unclaimed class action funds.”);

Keepseagle v. Vilsack, 118 F. Supp. 3d 98,

117 (D.D.C. 2015) (noting that “as a general

matter, ‘a court’s goal in distributing class

action damages is to get as much of the

money to the class members in as simple a

manner as possible’”);

App.13a

(b) Second, the Objectors received notice of Plaintiffs’ request for attorneys’ fees and reimbursement of expenses and filed objections, directly

contradicting their argument that Plaintiffs

failed to provide reasonable notice of such

request. Moreover, Class Counsel already

provided reasonable notice to settlement class

members of their fee requests in connection

with each of the three rounds of settlements

(ECF Nos. 986, 1227, 1307), and the deadlines to object to these requests have long

passed. The pending request for attorneys’

fees and reimbursement of expenses relates

to Class Counsel’s lodestar and expenses in

connection with settlement administration

between August 1, 2019 and July 31, 2022.

Additionally, this Court invited Class Counsel

to submit this request. Hr’g Tr. at 9:12-16

(Jul. 6, 2022). The amount of fees requested

fall below the amount described in the settlement notice for the prior settlement round;3

(c)

Third, given the amount of the remaining uncashed settlement funds (i.e., $5,448,087.41),

the Objectors’ contention that such funds

should escheat to the states is unsupported

in the Ninth Circuit and in class actions gen-

3 Class Counsel requested attorneys’ fees of 33%, and the Court

granted 25% in connection with the third and final round net

settlement fund (ECF Nos. 1307 at 1 (motion), ECF No. 1314 at

14 (order)). The Court’s award here of additional attorneys’ fees

from the remaining settlement funds results in a fee award of

less than the 33% noticed.

App.14a

erally4—and is nowhere to be found in any of

the settlement agreements at issue. See

Hester v. Vision Airlines, Inc., No. 2:09-CV00117-RLH, 2017 WL 4227928, at *2 (D.

Nev. Sept. 22, 2017) (“[r]edistribution of

unclaimed class action funds to existing class

members is proper and preferred” because it

“ensures that 100% of the [settlement] funds

remain in the hands of class members” and

because “class settlements rarely ‘pay individual class members the full value of their

claims’”); William B. Rubenstein, Newberg

on Class Actions, § 12:30 (5th ed.)

(“Redistribution is more likely to bring the

class members closer to that value rather

than to be a windfall.”).

7. Having addressed the holdback for Mr.

Chekian and the objections by Corp Xanadu, David

Gould, and Kelly Overvold, the Court grants the

Motion.

8. The Court authorizes reimbursement of additional claims administration expenses totaling $125,

921.00 in connection with Rust’s anticipated work

through the secondary distribution and a cy pres

distribution, if necessary, at the end of the litigation.

4 In Six (6) Mexican Workers, 904 F.2d at 1307-09, the Ninth

Circuit recognized that permitting funds to escheat to the government could be appropriate in certain kinds of cases, like FLSA

wage damage cases. But Six (6) Mexican Workers by no means

held that allowing unclaimed funds to escheat was required in

all class action cases. Moreover, that opinion reiterated that

“Federal courts have broad discretionary powers in shaping

equitable decrees for distributing unclaimed class action funds.”

Id. at 1307.

App.15a

9. The Court authorizes reimbursement of incurred litigation expenses totaling $4,876.85 in connection with Class Counsel’s settlement administration

work from August 1, 2019 through July 31, 2022.

10. The Court awards attorneys’ fees in connection with Class Counsel’s settlement administration

work from August 1, 2019 through the secondary

distribution and a cy pres distribution, if necessary, at

the end of the litigation. While Class Counsel requests

an award of $1 million, the Court instead awards

$500,000, for the following reasons:

(a) Class Counsel is correct that they should be

awarded fees for their work since the last fee

award. See Motion for Fees in Third Round

(dkt. 1307) at 13 (explicitly only seeking fees

for work up to July 31, 2019). They explain

that they have “engaged in extensive motion

practice to ensure the accurate and timely

processing of claims and to guarantee the

fair and reasonable distribution of net

settlement funds across settlement class

members,” and that they are “actively overseeing and collaborating with Rust on

various

claims

administration

and

settlement distribution.” Motion at 10. In the

three years since the third round settlement

(from August 1, 2019 through July 31, 2022),

Class Counsel have spent 617.9 hours, for a

lodestar of $341,935.50. Id. at 3-4.

(b) Class Counsel is also correct that courts in

this Circuit can count anticipated future work

in calculating fee awards. Cf. In re Volkswagon “Clean Diesel” Mktg. Sales Practices,

and Prods. Liab. Litig., 746 F. App’x 655, 659

App.16a

(9th Cir. 2018) (no error in including

projected time in cross-check). They anticipate

“incurring additional lodestar through the

secondary distribution . . . a cy pres distribution, if necessary, at the end of the litigation,

any further motion practice by Mr. Chekian,

including an appeal, and a further notice of

post-distribution accounting.” Motion at 11.

They also assert that they “will not seek further attorneys’ fees in this litigation after this

motion.” Id. at 4.

(c) Class Counsel do not attempt to explain how

their anticipated work will add up to

$658,064.50 ($1 million minus the current

lodestar of $341, 935.50). One of the cases

they cite, Reyes v. Bakery & Confectionery

Union & Indus. Int’l Pension Fund, 281 F.

Supp. 3d 833, 856 (N.D. Cal. 2017), refers to

“125 anticipated future hours” based on

“time managing class members’ claims.” But

Plaintiffs here do not attempt any such

breakdown of anticipated time. Plaintiffs

make this choice because they are seeking a

percentage-of-recovery, not their exact lodestar. Mot. at 11. The Court awarded Class

Counsel a percentage-of-recovery in each of

the prior three rounds of settlements. See

generally Order Granting Attorneys’ Fees and

Expenses (dkt. 1314); see id. at 14 (awarding

25% of the round three net settlement fund).

Still, even a percentage-of-recovery analysis

would benefit from some estimate of the lodestar represented by the anticipated work, in

order to perform a cross-check on the per-

App.17a

centage. See id. at 9 (referencing importance

of lodestar cross-check).

(d) Class Counsel explain that their $1 million

request amounts to 18.355% of the remaining

settlement fund of $5,448,087.41. Mot. at 11.

They argue that 18.355% is modest not only

in terms of the remaining funds but also

given all of the work they have performed on

this case for the past 15 years. Id. They note

that they have received a cumulative

negative multiplier of -0.75 based on work

through July 31, 2019, which resulted in

unreimbursed lodestar of $10,987,873.85,

and that their unreimbursed lodestar has

only increased since then. Id. (citing Castillo

Decl. (dkt. 1347-2) ¶ 16). Class Counsel argue

that awarding Class counsel $1 million in

fees now would still result in a cumulative

negative multiplier of -0.77 based on their

work through July 31, 2022, and less than

that considering their anticipated work. Id.

(citing Castillo Decl. ¶ 17).

(e) The Court does not dispute that Class Counsel

has done an excellent job on this case for

many, many years. But, while 18% sounds

like a low number, the Court simply does not

believe that a percentage-of-recovery basis

for awarding fees is appropriate. The Court

already awarded Plaintiffs fees for all three

rounds of settlements—i.e., the total fund

amount of $104,388,254.38—that took into

account factors like the results achieved, the

risks of litigation, the skill and quality of the

work, the contingent nature of the fee, and

App.18a

awards made in similar cases. See, e.g.,

Order Granting Attorneys’ Fees and Expenses at 3, 5-8. But those factors are less

applicable at this stage. Before the Court is

not a new pot of money but a portion of the

original $104,388,254.38. The remaining

fund is $5,448,087.41 because that is how

much money the uncashed checks add up to.

If there were more uncashed checks and the

remaining fund was $10,000,000, or

$20,00,000, would Class Counsel be entitled

to 18% of that? More money left in the fund

is not tied to a better result by Class Counsel.

Nor does more money left in the fund seem

necessarily tied to more work left for Class

Counsel to do. At this phase—where Class

Counsel have already been compensated for

the recovery they achieved for the class—the

Court believes that fees should be aimed at

reimbursing Class Counsel for the work they

actually did, and will do, in effectuating

everything post-settlement. In that case, the

lodestar method is more appropriate. See

Vizcaino v. Microsoft Corp., 290 F.3d 1043,

1047 (9th Cir. 2002) (“Courts in the Ninth

Circuit award fees in common fund cases

under either the ‘percentage-of-recovery’

method or the ‘lodestar’ method.”).

(f)

Using the lodestar method, the Court will

approve an award of $500,000.00. This sum

represents the current lodestar of $341,

935.50, see Motion at 4, plus an additional

$158,064.50 for the work on this case that

Class Counsel has already done since seeking

App.19a

that $341,935.50 in August of 2022 (including the recent, very prompt, preparation of

the proposed order upon which this order is

based, see Proposed Order (dkt. 1377)), and

the anticipated work that Class Counsel will

continue to do to bring the case to its conclusion.

11. The Court directs Plaintiffs to pay the awarded fees and expenses from the remaining settlement

fund of $5,448,087.41.

12. The Court authorizes a secondary distribution

of the remaining settlement funds of $5,448.087.41,

less the holdback of $50,000 for Mr. Chekian, less the

additional claims administration expenses of $125,

921.00 for Rust and reimbursement of litigation expenses of $4,876.85 for Class Counsel authorized by the

Court above, and less the attorneys’ fees of $500,000

for Class Counsel awarded by the Court above.

13. If there are any further remaining settlement

funds after the secondary distribution, assuming such

funds will be economically infeasible to distribute,

Plaintiffs shall propose an appropriate cy pres recipient

with approval from the Court after the check void date

for this secondary distribution. At that time, Class

Counsel will also provide an update to the Court

regarding the final resolution of Mr. Chekian’s claims.

IT IS SO ORDERED.

/s/ Charles R. Breyer

United States District Judge

Dated: January 19, 2023

App.20a

ORDER SETTING HEARING, U.S. DISTRICT

COURT FOR THE NORTHERN

DISTRICT OF CALIFORINA

(SEPTEMBER 28, 2022)

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF CALIFORNIA

________________________

IN RE TRANSPACIFIC PASSENGER AIR

TRANSPORTATION ANTITRUST LITIGATION,

This Document Relates to:

ALL ACTIONS

________________________

Case No. 07-cv-05634-CRB

Before: Charles R. BREYER,

United States District Judge.

ORDER SETTING HEARING

The Court hereby sets a hearing for Friday, October 28, 2022 at 10:00 AM, via Zoom webinar. At that

hearing, the Court will hear argument on (1) Plaintiffs’ Motion for Secondary Distribution of

Remaining Settlement Funds (dkt. 1347) and (2) Mr.

Chekian’s claim.1 In the intervening time, Class

Counsel and Rust may audit/re-examine Corp. Xanadu’s

1 The Court previously gave Mr. Chekian until September 30 to

submit all of his documentation to Rust. The Court envisions that

Rust will make a determination regarding Mr. Chekian’s claim

by October 28.

App.21a

claim, consistent with their obligation to pay only

qualified claimants.

IT IS SO ORDERED.

/s/ Charles R. Breyer

United States District Judge

Dated: September 28, 2022

App.22a

ORDER, U.S. DISTRICT COURT FOR THE

NORTHERN DISTRICT OF CALIFORINA

(FEBRUARY 3, 2022)

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF CALIFORNIA

________________________

IN RE TRANSPACIFIC PASSENGER AIR

TRANSPORTATION ANTITRUST LITIGATION,

This Document Relates to:

ALL ACTIONS

________________________

Case No. 07-cv-05634-CRB

Before: Charles R. BREYER,

United States District Judge.

ORDER GRANTING PLAINTIFFS’ MOTION TO

DISTRIBUTE SETTLEMENT FUNDS AND

OVERRULING THE OBJECTION

This Court previously granted final approval of

class action settlements against 13 airline defendants,

finding that the notice plan for each settlement was

fair, adequate, and reasonable, satisfied due process

and Rule 23(c)(2) and 23(e)(l), and was the best

practicable under the circumstances. See Dkts. 1009,

1259-1, 1318. The settlements involved three separate

“Phases,” depending on which airline a claimant had

purchased her ticket(s) from and during which time

period. Phase 1 had a claims closing date of either Oct-

App.23a

ober 13, 2015 or April 3, 2018; Phase 2 had a claims

closing date of December 31, 2018; and Phase 3 had a

claims closing date of April 1, 2020. Botzet Decl. (dkt.

1322-1) ¶ 6. The total settlement fund available is

$104 million. Id. ¶ 24. 61,768 individuals and entities

have been authorized for payment. Id. ¶ 23. Plaintiffs

now move for authorization to distribute the net

settlement funds. Mot. (dkt. 1322). Plaintiffs have

submitted a detailed declaration by Joel K. Botzet, a

Program Manager for Rust Consulting, Inc., the courtappointed claims administrator. See Botzet Decl.

Financial Recovery Services (FRS), a corporation

that purports to represent 82 claimants excluded from

the distribution, objects. See Obj. (dkt. 1323). FRS

does not dispute that its clients’ Phase 1 and Phase 2

claims were “submitted after the Phase 1 and Phase 2

deadlines” and were therefore untimely. Id. at 2. But

FRS argues that the Court should use its inherent

equitable powers to include these claimants in the

distribution. Although FRS does not explain why its

clients failed to file timely Phase 1 and Phase 2 claims,

FRS insists that these earlier deadlines were “arbitrary” because all auditing and distribution was to

happen later anyway. Id. at 3-4.

Plaintiffs argue that processing untimely claims

now will prejudice timely claimants because it will

require “six to nine months and result in additional

claims administration expenses of at least $435,000.”

Reply (dkt. 1324) at 8 (citing Supp. Botzet Decl. (dkt.

1324-1) ¶ 19-20). FRS argues that this overstates the

delay, and that any delay falls on class counsel, who

have known of FRS’ objection since September 16,

2019 but neither processed the untimely claims nor

App.24a

brought the issue to the Court’s attention. Obj. at 12,

Supp. Obj. (dkt. 1325) at 7-8.

In determining whether to include untimely

claims in a class action settlement, courts use their

equitable powers under Federal Rule of Civil Procedure

23. See In re Orthopedic Bone Screw Prods. Liab.

Litig., 246 F.3d 315, 321 (3d Cir. 2001). In doing so,

courts balance four factors to determine whether a

claimant engaged in “excusable neglect”: (1) the

danger of prejudice to the non-movant; (2) the length

of the delay and its potential effect on judicial proceedings; (3) the reason for the delay, including whether it

was within the reasonable control of the movant; and

(4) whether the movant acted in good faith. Id. at 32223 (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs.

Ltd. P’ship, 507 U.S. 380, 395 (1993)). The third

factor—whether delay was within the movant’s

control—is typically most important. In re Oxford

Health Plans, Inc., 383 Fed. Appx. 43, 45 (2d Cir.

2010). Although the burden is on the untimely claimant

to show excusable neglect, this burden is not especially

demanding. See Late Claims, 4 William B. Rubenstein,

Newberg on Class Actions § 12:23 (5th ed.).

Assuming without deciding that FRS’ objections

are properly before the Court,1 the Court concludes

that FRS has not made a showing of excusable neglect

that would justify its clients’ inclusion in the

settlement fund. FRS does not appear to contest (1)

that its clients had notice of the dates on which Phases

1 and 2 concluded; or (2) that its clients missed those

1 Plaintiffs make several arguments as to why FRS’ objection is

procedurally invalid, but the Court expresses no view on those in

today’s order.

App.25a

deadlines. Yet FRS offers no excuse for its clients’

delay and does not argue it was outside their reasonable control. See Bone Screw, 246 F.3d at 322; Oxford,

383 Fed. Appx. at 45 (noting that this third factor is

most important); see 4 Newberg on Class Actions

§ 12:23. The Court also credits the claims

administrator’s statement that including untimely

claimants would result in an additional six to nine

month delay to timely claimants. See Supp. Botzet

Decl. ¶ 19-20. On these facts, the Court finds that

there was no excusable neglect.

Refraining the issue, FRS insists that the question

is not whether FRS’ clients have shown good cause for

not meeting the interim Phase 1 and 2 deadlines, but,

rather, whether those deadlines should be

enforced.” See Supp. Obj. at 4. This is not a real

distinction. The Court does not enforce deadlines

mindlessly, but it enforces them when claimants who

are aware of the deadlines miss them without an

explanation.

The Court therefore GRANTS the motion to authorize distribution of the net settlement funds, consistent with the process outlined in the declaration. The

claims administrator, in consultation with class

counsel, shall distribute the net settlement funds pro

rata. Pursuant to this district’s Procedural Guidance

on Class Action Settlements, within 21 days of this

order, class counsel will submit a Post-Distribution

Accounting detailing the status of distribution.

App.26a

IT IS SO ORDERED.

/s/ Charles R. Breyer

United States District Judge

Dated: February 3, 2022

App.27a

ORDER DENYING MOTION FOR

RECONSIDERATION, U.S. DISTRICT

COURT FOR THE NORTHERN

DISTRICT OF CALIFORINA

(JANUARY 25, 2023)

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF CALIFORNIA

________________________

IN RE TRANSPACIFIC PASSENGER AIR

TRANSPORTATION ANTITRUST LITIGATION,

This Document relates to:

ALL ACTIONS

________________________

Case No. 07-cv-05634-CRB

Before: Charles R. BREYER,

United States District Judge.

ORDER DENYING MOTION FOR

RECONSIDERATION

Before the Court is a motion for reconsideration

filed by Xanadu Corp. and David Gould (collectively,

“Xanadu”). As explained below, the Court denies the

motion.

I.

Background

In August of 2022, Plaintiffs moved for a secondary

distribution of the remaining settlement funds in this

App.28a

case. See Mot. for Secondary Distribution (dkt. 1347).

Xanadu filed an objection. See Xanadu Obj. (dkt.

1353). The objection argued that Class Counsel sought

too much money in fees,1 that Class Counsel should

have notified class members about their checks by

email, that Class Counsel should have posted notice

about their request for fees on the Chinese and

Japanese versions of the litigation website, and that

unclaimed funds should escheat to the state. Id. at 13, 5. The objection next complained that the claims

administrator, Rust Consulting, had already

approved Xanadu’s claim and that “decades after the

ticket purchases occurred, years after the claims were

submitted, and over one year since the issuance of

Xanadu’s Notice of Claim Final Determination, Class

Counsel wants to completely audit and relitigate

[Xanadu’s] approved claim because the claimant’s

postal mail was returned and the claimant wanted the

check reissued.” Id. at 7. Xanadu asserted: “There

exists no reason that the clamant should have to

relitigate the approved claim at this juncture.” Id. at

9. Plaintiffs responded, listing a number of reasons

why Xanadu’s claim aroused suspicion. See Reply (dkt.

1356).2 Those reasons amply justified re-auditing

1 It incorrectly accused Class Counsel of seeking 55% of the

remaining funds. Id. at 10. In fact, Class Counsel sought 18%.

See Order Granting Plaintiffs’ Motion for Secondary Distribution

two days later. See Order (dkt. 1378) at 7.

2 For example: Xanadu’s alleged 1,337 tickets are exclusively

supported with a one-page affidavit, id. at 2; this is “highly unusual

for a business, particularly one that purportedly purchased

tickets . . . for its own use,” id. at 4 (citing Castillo Decl. ¶ 7);

Rust sent a determination letter to Xanadu’s Wilshire Blvd. office

on August 24 2021, which USPS returned as undeliverable; Rust

emailed Corp. Xanadu, which confirmed that that address was

App.29a

Xanadu’s claim. Accordingly, the Court ordered that

“Class Counsel and Rust may audit/re-examine Corp.

Xanadu’s claim, consistent with their obligation to

pay only qualified claimants.” Order Setting Hearing

(dkt. 1358). The Court subsequently directed Class

Counsel to file an update on Rust’s audit of Xanadu’s

claim. See Order Directing Filing (dkt. 1368).

Class Counsel updated the Court repeatedly on

its review of Xanadu’s claim. See 11/8/22 Notice (dkt.

1370); 12/7/22 Further Notice (dkt. 1371); 1/16/23 Further Notice (dkt. 1374). The 1/16/23 Further Notice

included a detailed declaration from Joel Botzet, a

program manager for Rust, explaining Rust’s determination that “Xanadu did not provide the documentation needed to support its claim and is therefore

correct, id. at 3; Rust mailed a check to Corp. Xanadu’s Wilshire

Blvd. office on March 17, 2022, which USPS returned as

undeliverable, id.; on July 30, 2022, a Mr. Suica emailed Rust

indicating that Corp. Xanadu had not received a check, and providing a new mailing address on Santa Monica Blvd, id.; on

August 26, 2022, a Nicaragua-based attorney representing Corp.

Xanadu emailed Class Counsel threatening legal action because

Corp. Xanadu had not received a check, id. at 4; Class Counsel

could not find any online presence for Corp. Xanadu, including

on the California Secretary of State’s Business Search website,

id.; Class Counsel could find no records of actual employees for

Corp. Xanadu, id.; Class Counsel learned that the Wilshire Blvd.

and Santa Monica Blvd. addresses were both private rental

mailboxes, id. at 5; alleged representatives of Corp. Xanadu have

also referred to it as Xanadu Corp, id.; Corp. Xanadu appears to

lack an email system; the email provided for its claim was

corpxanadu@phreakmail.com, id.; Corp. Xanadu’s phone number

is a landline in Oregon and its use of a Nicaragua-based attorney

is unusual, id.; mail to Corp. Xanadu was returned, id.; Class

Counsel asked Corp. Xanadu for its company formation documents or to make a representative from Corp. Xanadu available,

and it refused to do so, id.

App.30a

due $0 in settlement benefits.” Botzet Decl. (dkt. 1375)

at ¶ 22; see also id. ¶¶ 18-23. Based on Botzet’s sworn

statement, the Court was persuaded that this was the

correct conclusion, reached after a lengthy and fair

process. Accordingly, the Court directed Class

Counsel to file an updated proposed order granting

the Motion for Secondary Distribution and reflecting

Rust’s conclusion as to Xanadu. See Order Directing

Filing of Proposed Order (dkt. 1376). Class Counsel

promptly complied. See Proposed Order (dkt. 1377).

The Court adopted the Proposed Order in large part,3

filing an Order Granting Plaintiffs’ Motion for

Secondary Distribution two days later. See Order (dkt.

1378).

Shortly thereafter, Xanadu filed both an Objection

to the 1/16/23 Further Notice and Proposed Order

(“PO Objections”) (dkt. 1379), and a Motion Pursuant

to Rules 59(b) and 60(b)(1) and (6) for Reconsideration

of the Court’s Order (“Mot. for Reconsideration”) (dkt.

1380)4; see also Reply re Mot. for Reconsideration (dkt.

1382); Exhibits (dkt. 1383). Plaintiffs oppose the

motion. See Opp’n to Mot. for Reconsideration (dkt.

1382); Sur-Reply re Mot. for Reconsideration (dkt.

1384).5

3 The Court awarded half of the attorneys’ fees that Class

Counsel requested. See id. ¶ 10.

4 Although Xanadu’s motion is called a Motion for Reconsideration, it does not rely on Civil Local Rule 7-9 (allowing parties to

file a motion for leave to file a motion to reconsider any interlocutory order on any ground in Civil Local Rule 7-9(b)). See Mot.

5 Plaintiffs request leave to file a sur-reply. Id. The Court grants

leave.

App.31a

II. Legal Standard

The Court presumes that Xanadu intends to

invoke Rule 59(e) of the Federal Rules of Civil Procedure, and not Rule 59(b).6 Rule 59(e) pertains to

motions to alter or amend judgments. However, “a

motion for reconsideration should not be granted,

absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law.” Orange St.

Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999).

The Court reviews the present motion for any clear

error that it committed in its original order. “The clear

error standard is significantly deferential and is not

met unless the reviewing court is left with a ‘definite

and firm conviction that a mistake has been committed.’” Cohen v. U.S. Dist. Ct. for N. Dist. of Cal.,

586 F.3d 703, 708 (9th Cir. 2009) (quoting Concrete

Pipe & Prods. v. Constr. Laborers Pension Tr., 508

U.S. 602, 623 (1993)). A mistake occurs when the

court’s prior decision is “illogical, implausible, or without

support in inferences that may be drawn from the facts

in the record.” United States v. Hinkson, 585 F.3d 1247,

1263 (9th Cir. 2009) (en banc). A clear error does not

exist solely because “another reasonable judicial body

‘would have arrived at a different result.’” J & J

Sports Prods., Inc. v. Juanillo, C-10-01801 WHA, 2011

WL 335342, at *1 (N.D. Cal. Feb. 1, 2011) (quoting All.

for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131

(9th Cir. 2011).

6 Rule 59(b) governs the time in which a motion for a new trial

must be filed. Fed. R. Civ. P. 59(b).

App.32a

Rule 60(b)(1) provides that a Court may relieve “a

party”7 from a final judgment, order, or proceeding in

the case of “mistake, inadvertence, surprise, or

excusable neglect.” “The ordinary meaning of the term

‘mistake’ in Rule 60(b)(1) includes a judge’s legal

errors.” Kemp v. United States, 142 S. Ct. 1856, 1862

(2022). Rule 60(b)(6) provides for the same relief for

“any other reason that justifies relief.” “Rule 60(b)(6)

has been used sparingly as an equitable remedy to

prevent manifest injustice.” United States v. Alpine

Land & Reservoir Co., 984 F.2d 1047, 1049 (9th Cir.

1993). “A movant seeking relief under Rule 60(b)(6)

must show extraordinary circumstances justifying the

reopening of a final judgment.” Henson v. Fidelity

Nat’l Fin., Inc., 943 F.3d 434, 443-44 (9th Cir. 2019)

(internal quotation marks omitted).

III. Discussion

Xanadu’s motion for reconsideration is quite

short but explains that “[t]he basis for the reconsideration is found” in its objections to the proposed order.

Mot. for Reconsideration at 2 (incorporating by reference the PO Objections).8 Xanadu’s objections do not

warrant reconsideration.

7 As Plaintiffs point out, Xanadu is not a party to this

litigation. See Opp’n to Mot. for Reconsideration at 3.

8 The motion also suggests as an additional ground that Xanadu

had inadequate time to respond to the 1/16/23 status update,

which deprived it of its procedural due process rights. Id. at 2;

see also Reply re Reconsideration at 4 (“Objectors have a due

process right to lodge a response to the ‘Notice.’”). Xanadu offers

no legal authority in support of this point, and the Court is

skeptical that a would-be class member indeed has a “due process

right” to respond to a status update. However, assuming that

App.33a

First, “a motion to reconsider is not a vehicle

permitting the unsuccessful party to ‘rehash’ arguments

previously presented.” Bailey v. Diaz, No. C 12-1414

CRB (PR), 2013 WL 6189183, at *1 (N.D. Cal. Nov. 25,

2013) (discussing Rule 59(e) motion). And simply

disagreeing with a court’s decision does not meet the

definition of “mistake, inadvertence, surprise, or

excusable neglect.” See Buckley v. BMW of N. Am., No.

20-56397, 2022 WL 16756341, at *1 (9th Cir. Nov. 8,

2022) (citing Lemoge v. United States, 587 F.3d 1188,

1192-99 (9th Cir. 2009)) (discussing Rule 60(b)(1)).

Many of the objections that Xanadu now makes to the

proposed order are simply rehashes of the objections

Xanadu made to the motion for secondary distribution.

Compare PO Objections at 3 (Rust already approved

Xanadu’s claim and then unfairly required Xanadu to

prove up its claim beyond what was required of other

claimants) with Xanadu Obj. at 7-10 (Class Counsel

wants to “relitigate the approved claim” and “treat

[Xanadu] differently than the other claimants who

went through Rust Consulting’s process”)9; PO

Xanadu has such a right, the Court has now received and

reviewed Xanadu’s objections. Moreover, as Xanadu represents

that “counsel was in the process of the final edit [of the Objections

to the PO] at the time this Court rendered the Order, which is

why they were uploaded a few minutes after the Order,” id. at 2,

the Court has confidence that it has the benefit of Xanadu’s

complete thoughts on the proposed order.

9 Xanadu complains repeatedly that Rust required more of

Xanadu than it did of other claimants. See PO Objections at 3, 4,

5, 6, 8-13. This is likely true. See, e.g., Sur-Reply re Mot. for

Reconsideration at 2 (“Rust’s conclusion as to Corp Xanadu’s

claim was based on Rust’s examination of Corp Xanadu’s claim

over several months, which included a Zoom interview with Corp

Xanadu’s CEO, Rich Sutton, on November 1, 2022, and all documents and information provided by Corp Xanadu by November

App.34a

Objections at 7 (“Rust merely placed a copy of the

motion on their website and did not place it on the

Chinese or Japanese language versions of the website. . . . Class Counsel could have simply sent an email

to Class Members”) with Xanadu Obj. at 2 (“Email

costs nothing. . . . Neither Rust Consulting nor Class

Counsel posted a notice on the Chinese or Japanese

version of the website”); PO Objections at 8 (“turning

over uncashed checks to the state is a preferred

method of dealing with it. . . . it will be permissible to

submit those funds to the unclaimed property funds of

those persons’ respective states”) with Xanadu Obj. at

5 (“any redistribution of funds without escheating

domestic claimants’ money violates public policy and

is unlawful.”). The Court has already analyzed those

arguments and disagreed with Xanadu’s position.

Second, to the extent that Xanadu’s objections

raise new issues, they do not change the Court’s view

of the motion for secondary distribution. For example,

Xanadu asserts that “Rust mismailed Xanadu’s check

reissuance,” PO Objections at 3, which was “concealed

until the filing,” id. at 4 (citing Botzet Decl. Ex. 4 (dkt.

1375-4)); see also Reply re Mot. for Reconsideration at 2

(“additional factual details came to light about the

uncashed checks”) (citing to Botzet Decl. Ex. 4).

Xanadu leaps from its own “mismailed” check to sug30, 2022.”). But Rust did not do so in a vacuum. It did so after a

number of irregularities raised suspicion about whether Xanadu

was actually a class member, see Reply, and after the Court

agreed that re-auditing Xanadu’s claim was appropriate, see

Order Setting Hearing. At that point, it would have been

meaningless for Rust to subject Xanadu only to the original

process in place for verifying claims. See Botzet Decl. (dkt. 13221) ¶¶ 15-20. Nor was Rust limited to the particular issues that

raised its alarm in the first place.

App.35a

gesting that “in reality, Rust’s checks”—plural—“were

mismailed (see Entry 1375-4) and over 25% of claimants did not receive or did not cash their checks.” PO

Objections at 13; id. at 14 (“Rust Consulting Acted

Negligently in Mailing Checks Using Faulty Software

which Explains the Large Percentage of Unpaid

Checks.”). This is an unwarranted leap, based on a

single check. Moreover, while the envelope for that

single check only shows the addressee’s names and

street address (cutting off the city, state, and zip code),

the envelope also shows that it was stamped

“RETURN TO SENDER - TEMPORARILY AWAY UNABLE TO FORWARD,” suggesting that the missing

city, state, and zip code were not the impediment to

delivery. See Botzet Decl. Ex. Ex. 4; see also Botzet

Decl. ¶ 12 (USPS returned due to no forwarding

address). Beyond that, whether or not Rust properly

addressed the envelope with the reissued payment,

Rust undertook a re-audit of Xanadu’s claim, with the

Court’s blessing, and reasonably concluded that

Xanadu had failed to provide the documentation

needed to support its claim. Xanadu’s additional accusation that Class Counsel was inappropriately

“enmesh[ed]” in the audit process, and motivated by

its desire for increased attorneys’ fees, is unsupported.

And while Xanadu apparently has a plausible response

to Rust’s suggestion that it acted improperly in the In

re: Parking Heaters settlement, see PO Objections at 56, the Court’s decision does not depend on Xanadu’s

actions in the In re: Parking Heaters settlement. See

Order ¶ 4 (listing six subparts supporting Rust’s con-

App.36a

clusion,10 of which the In re: Parking Heaters settlement was one).

Accordingly, Xanadu has failed to satisfy the

demanding standards of Rules 59(e), 60(b)(1), or

60(b)(6).

IV. Conclusion

For the foregoing reasons, the Court DENIES the

motion for reconsideration.

IT IS SO ORDERED.

/s/ Charles R. Breyer

United States District Judge

Dated: January 25, 2023

10 Xanadu repeatedly states that “this Court’s Order made findings of fact and conclusions of law,” Mot. for Reconsideration at

2, and that it appears “as if a full evidentiary hearing occurred

and that this Court is making findings,” PO Objections at 2. Not

so. The Court held that “Rust determined ‘there is $0 due in

settlement benefits’ to Corp Xanadu,” and it listed “numerous

factors” upon which Rust based its decision. See Order ¶ 4.