Appendix — Sprint Spectrum, L.P. v. Hesse

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APPENDIX A— OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

DECIDED MARCH 10, 2010

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHRISTOPHER W. HESSE; NATHANIEL OL:

»] 4

AY2 977 7TT ; DPE

PRINT CORPORATION, a foreign corporati:

SPRINT SPECTRUM LE;

doing business as Sprint PC

f Jet

ued and Submitted

Decided March 10, 2010

Before: Arthur L. Alarcon, Andrew J

Richard R. Clifton, Cireuit Judges. Opinion b

(‘liftton

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Appé ndix 1

CLIFTON, Circuit Judge:

This case requires us to consider whether a broad

release of claims in a nationwide settlement agreement

between Sprint and its customers precludes the present

class action involving a Washington state tax that Sprint

invoiced to its Washington customers. That nationwide

settlement arose out of a lawsuit that challenged Sprint's

billing of customers for certain federal regulatory fees.

Because we conclude that the Washington Plaintiffs’

interests were not adequately represented in the prior

action and that their claims are not “based on the

identical factual predicate as that underlying the claims

in the settled class action,” Williams v. Boeing Co., 517

F.3d 1120, 1133 (9th Cir. 2003), we hold that the prior

settlement did not release the claims at issue in this case,

and we vacate the district court’s grant of summary

judgment in favor of Sprint.

Background

The State of Washington imposes a business and

occupation tax (“B&O tax”) on every person engaged in

business activities in the state. Wash. Rev. Code

§ 82.04.220. Washington law specifies that the B&O

tax must be collected from a business as part of

its “operating overhead” rather than imposed as a

separate “tax |] upon the purchasers or customers.”

id. § 82.04.500 (the “B&O Tax Statute”). It is alleged

that Sprint passed the tax directly to its customers as a

separate line item labeled “Washington State B&O Tax

Surcharge” starting in April 2001.

Christopher Hesse and Nathaniel Olson ("the

Washington Plaintiffs”) filed separate class actions in

Washington state court alleging violations of the B&O

Tax Statute and the Washington Consumer Protection

Act (“CPA”). Wash. Rev. Code § 19.86.0830, as well as

common law breach of contract and unjust enrichment.

Sprint removed both cases to the United States District

Court for the Western District of Washington pursuant

to 28 U.S.C. § 1441 (a).

[he district court dismissed all claims predicated

on the B&O Tax Statute as preempted by the Federal

Communications Act (“FCA”), 47 U.S.C. § 332(c)(3)(A),

but. denied Sprint’s motion to dismiss insofar as it related

to “Plaintiffs’ other contract and CPA claims.” The

district court then certified a class of “all current and

former Washington state wireless service customers of

Sprint, who have been charged and paid to Sprint a

‘Washington State B&O Tax Surcharge’” with the

Washington Plaintiffs as class representative

After filing its answer to the Washington Plaintiff:

onsolidated complaint, Sprint moved for summary

judgment, arguing for the first time that the suit wa

barred by a class settlement between Sprint and 11

cu ‘tomers approved by a Kansas state court in 2006 (the

Benney Settlement”)

The benney Settlement re; ulted trom everal cla

ctions filed in 2002 in various state courts and then

dismissed and refiled in Kansa tate court in 2005 fo!

initiated in Missouri by Greg Benney (the “Lhenney ¢ F

Plaintiff”), who alleged that Sprint’s surcharges t

recoup federal regulatory fees violated consume}

protection laws, represented a breach of contract, ana

resulted in unjust enrichment. The relevant regulator)

fees were defined in the settlement agreement to include

only specified fees imposed to recover the cost of

compliance with federally mandated programs. The

Benney class was defined to consist of “all current and

former Sprint wireless customers in the United Stat

who were customers for any time during the period

December 1. 2000 to the Effective Date [of the

settlement in late 2006] and whi vere e¢narget

] The Henney y ttle ment pe at { that the iLeVvl

Fees” at issue in the benney Cla action included on!

i) the “USA Regulatory Obligations & lee fer

ircharge 07 subseriber invoices that Sprint charged

ibseribers for the cost of implementing federal)

mandated programs for Enhanced 911 (“E911

emergency calling Phase II and federal Unive

Service Fund contributions (“USF”); (i) “Fede

Telephone Number Pooling” fee or surcharge o

ub criber Invoices Lnal sprint enaree qd ub ('!

to recover costs of implementing the federall

mandated program for wirel number portabiit:

(ii) “Federal USE” “Federal £911” and “ede

Wireless Number Pooling and Portability cr

urcharges on subscriber invoices that sprint charge

wireless subscribers to recover costs of implement

re derally mandated program for wirele num

pooling and portability, federal Universal Service Fu

contributio ind Kynhanced YI mer}

Phase I]

> ila '

ettlement put that 1

laintiffs in the befor vere member

Benney cla | th; ( t ont

print LLied With Ui I @ plain

Vf luding the fs mney Cli n Kenrua OOH. ||

ettlement pro ided variou pene nceiudaing p!

eards and invoice credits on future bills, to membe}

rie wjou inela ( f the hen { ¢ }

tbmitted claim form print agreed paraprap

tled “Injunctive Relief as to Billin lvert

‘ractice Related to the Regulatory lee LO GISClO

rat least two vears that the reg Nator er ind othe!

iIrchnarygs LO recoup Lie Ost of Ci mpl ance Wil

rovernment provrams are not ta rr povernme!

mandated charves.” The tert f the Benney Settleme!

levant to print qaefense in tne nre nt ¢

‘aray? pil *2(a)t] mich purl rLer rm Use l

irom a eL ol potential clalm much pl der t Une

Ircnarye or federal rey |

nHNyvect 1tne soe j (

} nd ( 1] [ i

been, or in tn iture mign ere

mn tne | Benney | i‘ Ion | = s Al rif {

r procecdin vyhicn } ite in al

legati Liat rin alicd proper

scose or otne ise Improperly charypet

Ircnaryt mulator 0! ( e@ ta

the Benney Settlement because they are “claim

that... could have been... asserted... in [anJother

court or proceeding which relate . . . to allegations that

[Sprint] failed properly to disclose or otherwise

improperly charged for surcharges, regulatory fees or

excise taxes .... If this release were to operat

according to that interpretation, the Washington

Plaintiffs would have no recourse for their surcharge

related claims in federal court because “|c|laim

preclusion in federal court can be based on a state court

ettlement.”’ ee vy. America Online, Inc., 208 F.3d

741, 748 (9th Cir. 2000). We conclude, however, that the

release cannot binned the Washington Plaintiffs

claims because the Benney Class Plaintiff did not

adequately represent the Washington Plaintiffs and

beeause the Washington Plaintiffs’ claims are based on

a set of facts different from those underlying the claims

settled in the Bexney Settlement. For these two

independent reasons, we vacate the district court’s order

rranting summary judgment.

SL CALIVILAS. wiadbsdadld

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At the tnreacn id Nayprint an ntann t} { wen , {

mL LBS LAT Canuit, + scses CONMvEINUs llal We IllaV fhO

nquire into the ade quacy of representation in tne

Benney action because such an inquiry 1S al

impermissible collateral attack on the Kansas court

iudgment. The Full Faith and Credit Act general

requires us to afford the “judicial proceedings” of an)

' ce } .

state tne ime Tull fait ind eredit as the

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law r usage in the ¢ I Ol h stat

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367, 373, 116 S. Ct. 873, 1384 L. Ed. 2d 6 (1996). But a

see Matsushita Elec. Indus. Co. v. Epstein, 516 oR.

state court’s power to declare the preclusive effect of

its judgments is not without limit: “A State may not grant

preclusive effect in its own courts to a constitutionally

infirm judgment,” and we are “not required to accord

full faith and credit to such a judgment.” Aremer v

Chem. Constr. Corp., 456 U.S. 461, 482, 102 8. Ct. 1883,

72 L. Ed. 2d 262 (1982), quoted in Epstein v. MCA, Inc

(Epstein IIT), 179 F.3d 641, 645 (9th Cir. 1999).

In Matsushita, the Supreme Court reversed a

decision of our court that did not

aceord full faith and

credit as required by 28 U.S.C. § 17

38 to a state court

judgment approving a settlement that released

exclusively federal claims. 516 U.S. at 373, rev'g Epstern

vu. MCA, Inc. (Epstein I), 50 F.8d 644 (9th Cir. 1995).

The Supreme Court held that we must look to state law

in determining the preclusive effect of a state court

judgment releasing such claims. /d. at 374. Our court's

approach in Epstein I had failed to apply the Delaware

Supreme Court’s claim preclusion doctrine under which

a settlement could release even exclusively federal

On remand from the Supreme Court in Matsushita

the federal plaintitf class argued that the named

plaintiffs of the settled state court class did not

adequatel\ represent their interests as to the federal

claims in state court. Kpstein 1], 179 F.3d at 644. We

stated that while “broad collateral review of thi

idecuacy of representation IS not avallabdle ytte}

dppendix

Matsushita, “[llimited collateral review would be

appropriate . . . to consider whether the procedures in

the prior litigation afforded the party against whom the

earlier judgment is asserted a ‘full and fair opportunity’

to litigate the claim or issue.” /d. at 648-49 (quoting

Kremer, 456 U.S. at 480); see also Stephenson v. Dow

Chem. Co.. 273 F.3d 249, 258 & n.6 (2d Cir. 2001) (holding

that under the Epstein J] standard, collateral review is

permissible where the court that approved the

settlement did not address the adequacy of

representation as to a specific subset of a class “whose

injuries manifested after depletion of the settlement

funds”).

Normally we will satisfy ourselves that the part)

reeeived the requisite notice, opportunity to be heard,

and adequate representation by referencing the state

court’s findings. See Epstein 11, 179 F.3d at 648. In

Epstein I] we found no need to review collaterally the

Delaware Chancery Court’s decision because that court

expressly found that class representation was adequate

as to the relevant federal claims, 7d. at 643, 649-50, and

The case for adequate representation was much stronger

n, where the Delaware Chancery Court specifically

the federal claims at issue in the objectors’ action,

fa, 516 U.S. at 371-72, and both identical classes of

shareholders advanced claims “aris[ing] out of the

transaction” the tender offer by which their shares in a

corporation were sold. Nothing distinguished the subsequent

elass from the identical settled class except that the subsequent

ed fede) Claims 1n federal court and opnyectead lO

rt settlement, wnien 1 been predica

0 F 3d at 666: Epste li, 179

the Supreme Court’s decision in Matsushita was based

on its own conclusion that the Delaware judgment

satisfied due process. See id. at 645 (citing Matsushita,

516 U.S. at 379). In this case, however, the Kansas court

made no finding that the Benney Class Plaintiff’s

representation of the class was adequate as to the B&O

Tax Surcharge claims at issue in this case, and we are

faced with no Supreme Court decision premised on the

constitutional validity of the Kansas judgment.

The Kansas court’s findings are insufficient to

demonstrate that the Benney Class Plaintiff adequately

represented the Washington Plaintiffs. The Kansas

eourt found that the Benney Class Plaintiff’s Sprint bills

were typical of the other class members’ bills, but only

“in that each bill imposed the [defined] Regulatory Fees.”

The Kansas court also noted that the Benney Class

Plaintiff “paid the Regulatory Fees at issue in this case”

but did not make an explicit finding that the benney

Plaintiff was an adequate representative of the class,

much less that he was an adequate class representative

as to the B&O Tax Surcharge claims. Because that

question was not addressed with any specificity by the

Kansas court, it is a proper subject for collateral review.

Cf id. at 649 (relying on the Delaware court’s express

inding of “adequate representation” and “notice plus

an opportunity to be heard and participate in the

litigation.” (quoting Phillips Petroleum Co. v. SI

172 U.S. 797, 812, 105 S. Ct. 2965, 86 L. ]

{ 19885)))

Consistent with Epstein I7, we review the benney

Judgment only to determine whether, in the absence of

a specific finding by the Kansas court, its judgment

satisfies due process as to the claims at issue here, and

whether, under Kansas law, it precludes the Washington

Plaintiffs’ claims. See ?d. at 645.

Inadequate Class Representation

The Benney Class Plaintiff was not an adequate

representative for the claims asserted by the Washington

Plaintiffs. Without adequate representation, a court order

approving a claim-preclusive class action settlement

apreement cannot satisfy due process as to all members

of the class. See Shutts, 472 U.S. at 812 (“[T]he Due Process

Clause ... requires that the named plaintiff at all times

adequately represent the interests of the absent class

members.”); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020

(9th Cir. 1998) (“To satisfy constitutional due process

eoneerns, absent class members must be afforded

adequate representation before entry of a judgment which

binds them.”): Brown v. Ticor Title Ins. Co., 982 F.2d 386,

390 (9th Cir. 1992) (“{1]f the plaintiff was not adequately

represented in the prior action, or there was a denial of

due process, then the prior decision has no preclusive

effect.”)

Class representation is inadequate if the named

plaintiff fails to prosecute the action vigorously on behalf

f the entire class or has an insurmountable conflict of

interest with other eclass members. Se Hanlon

Chrusler Corp.. 150 FE 3d 1011, 1020 (9th Cir. 1998). ‘I he

}

{ppenaix A

Benney Class Plaintiff’s representation of the

Washington Plaintiffs was inadequate for both reasons.

First, the Benney Class Plaintiff did not share the

Washington Plaintiffs’ B&O Tax Surcharge claims, or

even pretend to prosecute those claims on their behalf.

The Benney Class Plaintiff was a resident of Missour1

who never paid the Washington B&O Tax Surcharge. It

is evident that the Benney Class Plaintiff did not

vigorously prosecute the claims relevant to this case.

His petition, the settlement agreement it induced, and

the judgment approving that settlement agreement all

confirm that the Benney class action was brought to

remedy a different set of injuries: Sprint’s nationwide

surcharges that shifted to its customers certain costs

imposed by the federal government.

Second, as a result of not possessing the same type

of claim as the Washington Plaintiffs, the Benney Class

Plaintiff had an insurmountable conflict of interest with

those members of the class. Conflicts of interest may

arise when one group within a larger class possesses a

claim that is neither typical of the rest of the class nor

shared by the class representative. See Amchem Prods.,

Inc. v. Windsor, 521 U.S. 591, 625-27, 117 8S. Ct. 223

138 L. Ed. 2d 689 (1997) (holding class representation

inadequate because of the conflict of interest between

class members manifesting asbestos injuries and those

with yet undiagnosed injuries). In this case, the benney

Class Plaintiff’s interest in settling his federal

Repulatory Fee claims, even at the cost of a broad

]

elease of other claims he did not possess, was In conflict

l4a

Appendix A

with the Washington Plaintiffs’ unrepresented interest

in prosecuting their B&O Tax Surcharge claims. The

Benney Class Plaintiff’s representation of the

Washington Plaintiffs was therefore inadequate as to

those claims.

The Benney Judgment would be constitutionally

infirm if it were interpreted, as Sprint contends it should

be, to preclude the B&O Tax Surcharge claims at issue

in this case, because the Benney Class Plaintiff’s

representation of the Washington Plaintiffs failed to

satisfy due process as to those claims.® Thus, even if

Kansas law — contrary to our interpretation of it below

— did allow the Benney Judgment to release the

Washington Plaintiffs’ claims related to the B&O Tax

Surcharge, we would not be bound to give the Benney

Judgment that effect.

2 Identical Factual Predicate

Even apart from due process concerns, a settlement

agreement’s bare assertion that a party will not be liable

for a broad swath of potential claims does not necessarily

make it so. See Williams, 517 F.3d at 1134 (“While Boeing

5. We do not set aside the Kansas court’s approval of the

settlement. Indeed, we accord that judgment full faith and

credit and presume that it is binding on all claims that it

properly released under Kansas law, including any claims of

the Washington Plaintiffs pertaining to the federal regulatory

fees at issue in Berney. We hold only that any release of the

B&O Tax Surcharge claims at issue in this case by the judgment

approving the benney Settlement would violate due process.

lSa

4 ppendix f

may have drafted the settlement agreement to include

as, broad a release as possible, the release would have

only been enforceable as to subsequent claims

depending upon the same set of facts.” (internal

quotations marks omitted)).

As a threshold matter, Sprint contends that we may

not consider the Washington Plaintiffs’ argument that

their claims have a different factual predicate from the

claims involved in the Benney Settlement because they

raised that argument for the first time in a motion for

reconsideration after the district court granted Sprint’s

motion for summary judgment, and the Washington

Plaintiffs did not amend their notice of appeal after the

district court denied their motion for reconsideration.

See Intercontinental Travel Mktg. v. FDIC, 45 F.3d 1278,

1286 (9th Cir. 1994) (“Raising an issue for the first time

in a motion to reconsider is not considered adequate

preservation of the issue at a Summary judgment

stage.’’).

We have discretion to consider an issue raised for

the first time on appeal “(1) where review Is necessary

to prevent a miscarriage of justice or to preserve the

integrity of the judicial process; (2) where there is a

change in the law creating a new issue; or (3) when the

issue presented is purely one of law and either does not

depend on the factual record developed below, or the

pertinent record has been fully developed.” Come dy

Club, Inc. v. Improv West Assocs., 553 E3d 1277, n.11

(9th Cir. 2009) (internal quotation marks omitted). We

exercise that discretion here. The Washington Plaintiffs’

l6a

App ndix A

“identical factual predicate” argument is a mixed

question of law and fact. They argue both that a

settlement must be based on the “identical factual

predicate” as a subsequent claim to preclude that claim,

and that the Benney claims and the B&O Tax Surcharge

claims do not share an identical factual predicate. We

are persuaded to consider this argument because it is

conceptually related to the arguments raised in

response to Sprint’s motion for summary Judgment In

which Sprint first put forward the theory that the

Benney Settlement released the Washington Plaintiffs’

claims, and the pertinent factual record regarding the

basis for the claims in both cases is fully developed.

A settlement agreement may preclude a party from

bringing a related claim in the future “even though the

claim was not presented and might not have been

presentable in the class action,” but only where the

released claim is “based on the identical factual

predicate as that underlying the claims in the settled

class action.” Williams v. Boeing Co., 517 F.3d 1120, 1133

(9th Cir. 2008); Class Plaintiffs v. City of Seattle, 955

F2d 1268, 1287 (9th Cir. 1992), quoted in Howard, 208

F.3d at 747. Thus, we have held that federal district

courts properly released claims not alleged in the

underlying complaint where those claims depended on

the same set of facts as the claims that gave rise to the

settlement. See Reyn’s Pasta Bella, LLC v. Visa USA,

Inc., 442 F.3d 741, 749 (9th Cir. 2006) (affirming dismissal

of a class action against credit card companies

predicated on the same price-fixing predicate and injury

as claims settled in an earlier class action, even though

{ ppendix A

the subsequent suit “posit[ed] a different theory of

ariticompetitive conduct”); Class Plaintiffs, 955 I\2d at

1286-91 (affirming approval of a settlement relating to

certain bond defaults that released claims by an identical

class of plaintiffs in a pending case that related to the

same bond defaults).

We applied the same reasoning to hold that a state

court’s approval of a settlement agreement could

release not only the state law fraudulent billing claims

before it, but also federal RICO claims arising from the

same billing practices. Howard, 208 F.3d at 746-48; see

also Epstein II, 179 F.3d at 644-45 (discussing the

Supreme Court’s holding that members of a settlement

class were bound by the Delaware Court of Chancery’s

release of federal claims) (citing Matsushita, 516 U.S

at 377, 379); Class Plaintiffs, 955 F.2d at 1288 (noting

with approval that “other circuits have held that a state

court was within its power to approve the release of a

federal claim. which could not have been brought in the

state court’).

Jecause the Benney Settlement was approved by

order of a Kansas state court, we apply Kansas law in

determining its preclusive effect. See Howard, 208 F.3d

at 748 (“The preclusive effect of a state court judgment

in federal court is based on state preclusion law.”).

Kansas courts have not explicitly applied the identical

factual predicate doctrine to determine the effect of

releases of liability in court-approved settlement

agreements, but claim preclusion doctrine in Kansas

does not appear to us to be substantially different from

the California and federal law applied in //oward and

Reyn’s Pasta Bella. In Kansas, “{a] voluntar) dismissal

of a case with prejudice, based on a settlement

agreement that is approved by the court and

journalized, is a final judgment on the merit |

Honeycutt v. City of Wichita, 251 Kan. 451, 886 I2d

1128, 1133 (Kan. 1992). Such a dismissal “is res judicata

and bars a later lawsuit on the same transaction 01

occurrence.” Jd. at 1134; see also Anderson v. kmployer

Mut. Cas. Ins. Co., 27 Kan. App. 2d 623, 6 P3d 918, 925

24 (Kan. Ct. App. 2000) (holding that a general releas:

does not bar claims against tortfeasors who

specifically named In the release). It appears to |

claim preclusion in Kansas is guided by the same

principles as in this circuit

. the claims in /eyn ta. Bella, Howa

Kpstein Il, and Class Plaintiffs, which were hel

have been validly released by earlier settlements ol!

related claims, the Washington Plaintiffs’ claims do not

share an identical factual predicate with the claim

resolved in the Benney Settlement. The claim

}

underlying the Benney Settlement dealt exclusive!

with specific nationwide surcharges to recoup the cost

of compliance with federal programs, wherea the clain

at issue in the present case involve Sprint's statewid

surcharge to recoup the cost of the Washington B&O

Tax allegedly in violation of a Washington statute Ph

superficial! similarity between the two cla action

insufficient to justify the release of the later claim

the settlement of the former. Both involy

Sprint improperly bill

}

el oO tT

! Hut tney deal

Im po ed to recoup dillerent

be improper for different re

Iespecially relevant rminatior

identical factual predicat

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ent tne Wa

Led TTi lack afl

bh ervation, noted above, that

Plaintiff did not adequately

Plaintiffs as to their B&O Tax Surcharge claim

Kan ‘la action statute, like Federal Rule

requires that a cla ‘epresentative posse

tl " and that ne

typical of the claim

of the ela

na adequately) protect tne

Stat. Ann. § 60-223(a)(3)-(4); Fed. R. Ci

a plaintiff “cannot repre

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Missourl, Benne)

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ly prosecute their ¢lal

etween their legal interest

eems to us unlikely that a plaintiff cla

1 the identical factual predicat

is of a third party who did not adequat 1

| We conclude Lnat the Cc

hington Plainti

LPPENDIA LB ORDER OF THE UNTEEED STATI

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was requested by the Court, together with relevant

portions of the record, and

ae Pe ee

motion, as follows.

I. BACKGROUND

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Nathaniel Olson, individually and on behalf of a similarly

situated class, allege that Defendant Sprint PCs

impermissibly billed a Washington B&O tax surcharge

to its Washington customers.

20. 2008, the Court fot

Februar)

Were barred by

implementing order issued 1

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the settiement

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lacked standing to assert any claim on behalf of

Washington consumers who paid a Washington state

B&O tax surcharge because he was not a Washington

consumer who paid a Washington state B&O tax

surcharge.” (Pls.’ Mot. for Reconsideration 1 (Dkt. No.

190).) Beeause he lacked “standing” to sue on behalf of

these Washington consumers, Plaintiffs argue, enforcing

the Benney Settlement Agreement to bar the claims

here violates due process. (/d. at 2.) In addition, in a

somewhat circular argument, Plaintiffs contend that,

[nJotice of the Benney settlement was not and

could not have been adequate to inform

Plaintiffs and Washington consumers that

their claims for recovery of a Washington B&O

tax surcharge were being release [sic] hecause

no such claim was before the court in Kansas,

the court lacked jurisdiction over any such

claim, the Complaint did not mention such a

claim, and the class representative was not an

adequate representative to pursue sucl

Il. LEGAL STANDARD

nied “in the absence of ash

"in the prior ruimmg OFr a SnNOwinys

authority whieh could not na

the Court Ss} attention eartl

reasonable diligence.” Local Rules W.D. Wash. CR 7(h).

Here, Plaintiffs do not argue that new facts or legal

authority justify their motion; rather, they argue that

the Court’s dismissal of their claims as precluded by the

Benney Settlement was “manifest error.” (Pls.’ Mot. for

Reconsideration 3 (Dkt. No. 190).) Motions to reconsider

are within the sound discretion of the trial judge. Navajo

Nation v. Confederated Tribes of Yakima Indian

Nation, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona

Enter, Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th

Cir. 2000)).

Hi. ANALYSIS

Plaintiffs’ argument is a collateral attack on the

Benney court’s review and approval of the benney

Settlement Agreement dressed up as a standing and

due process argument. It is undisputed that Plaintiffs

received notice of the settlement and failed to opt out

or otherwise object. That notice included an explanation

of the “Legal Effect of the Settlement (Release of

“ tas

Lilalms)

Upon the Court’s approval of the settlement

_.. the class members who do not properly

opt out of the proposed Settlement Classes,

regardless of whether or not a claim tor

benefits is filed, will release and forever

discharge Sprint... from any and all

claims, demands, debts, liabilities, actions,

. ~ . . . : , ih ei ] — ‘ WA |

causes of action of every kind and nacvure.

hlico: ; _ l. . ]

}

iosses. aha Costs.

gations, GamMa¥Zes,

whether known or unknown, actual or

potential, suspected or unsuspected, direct or

indirect, contingent or fixed, that have been,

could have been, or in the future might be

asserted in the Benney Lawsuit... or in any

other court or proceeding which relate in

any way to the allegations that defendants

failed to disclose or otherwise improperly

charged for surcharges, regulatory fees or

excise taxes

(Dkt. No. 178-6 at 8) (emphasis added). Plaintiffs

originally argued that this notice “was defective to the

extent it purports to cover the B&O tax charge” because

“nothing in the notice sent to Plaintiffs specified that

the Washington B&O tax surcharge... was being settled

in the Kansas court.” (Pls.’ Reply 3 n.3 (Dkt. No. 183).)

In rejecting this argument, the Court noted that

Plaintiffs cited no authority to support their position,

which carried to its logical end would have required each

and every surcharge, regulatory fee, or excise tax

potentially covered by the settlement to have been

specifically listed in the notice in order to effectively

release Sprint from liability for the claims brought in

the instant action. Now, Plaintiffs do a bit of an about

face and argue, instead, that the Notice was defective

as to the instant claims because “it purports to notif)

Plaintit ee t their claims for recovery of a biranion ts

B&O tax S ircharge would be extinguls shed, hen suc}

claim was never brought in Berney or Lundberg.

(Pls. Mot. for Reconsideration 12 Dkt. No. 190).) S

26a

Appendix B

was not specific enough to inform Plaintiffs that claims

relating to a Washington B&O tax surcharge would be

among those claims “which relate in any way to the

allegations that defendants failed to disclose or

otherwise improperly charged for surcharges,

regulatory fees or excise taxes,” (Did. No. 178-6 at 8),

now Plaintiffs appear to admit not only that the notice

covered such a claim, but that it was that very coverage

that made the notice so defective that it violated

Plaintiffs’ due process rights.

The Court’s conelusion, however, remains the same:

because the notice clearly informed Plaintiffs that their

claims would be precluded, if Plaintiffs wished to

maintain their claims, they should have either opted out

of the class, filed an objection, or appealed the order

approving settlement. While “[]]ack of jurisdiction may

be raised at any time, even after judgment has been

entered” (Pls.’ Mot. for Reconsideration 2 (Dkt. No.

190)). Plaintiffs cite nothing that supports their truly

radical position—that is, that any class plaintiff wh«

receives unequivocal notice, rightly or wrongly, that th

claims will be extinguished by a settlement agreement

and yet chooses not to opt out of the settlement class or

file an objection, may thereafter raise their objections

to the agreement in a different court when one party

seeks to enforce it. What, then, is left of the Full Faith

and Credit Act, 28 U.S.C. § 1738, under which judgments

of state courts in class action proceedings are to be given

the same preclusive effect in federal court that they

would be accorded in the courts of the rendering state?

See Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516

U.S. 367, 373-74 (1996). In fact, none of the cases

Plaintiffs cite in their Motion for Reconsideration stand

for such a position—all involve direct challenges to

settlement agreements or class certification decisions,

not, as Defendant points out, “attacks made collaterally

after the fact.” See, e.g., Amchem Prods., Inc. v.

Windsor, 521 U.S. 591, 597 (1997) (direct appeal on issue

of class certification); Wal-Mart Stores, Inc. v. Visa

U.S.A., Ine., 396 F.3d 96, 103 (2d Cir. 2005) (direct appeal

from order approving settlement by objecting class

members); Nat'l Super Spuds v. New York Mercantil

Exch., 660 F.2d 9, 16 (2d Cir. 1981) (direct appeal from

order approving settlement by objecting class member)

Plaintiffs argue that the Full Faith and Credit Act

does not preclude “jurisdictional” lonees by sister

courts, but ignores the explicit constraints the U.S.

Supreme Court has placed on such challenges. Plaintiffs

quote that Court for the proposition: “a judgment of a

court in one State is conclusive upon the merits in a

court in another State only if the court in the first State

had power to pass on the merits—had jurisdiction, that

is, to render the judgment.” Underwriters Natl

Assurance Co. v. North Carolina Life & Accide a

Health Ins. Guar. Ass’n., 455 U.S. 691, 704 (1982). In

this spirit, Plaintiffs auntend tiat “[t]he Kansas court

that approved the Benney settlement did not have

jurisdiction over Plaintiffs’ claims in this case because

Plaintiffs’ claims relating to the by shington State B&O

tax eh: irges were not before the Berney court,” thus, it

was manifest error to give ¢ ffeet to the Kansas eourt’:

1) } , : 1

jurisdle LO! la il \ { PeCLIVe ( [ a roving ne

{ppendix B

Settlement Agreement. (Pls.’ Mot. for Reconsideration

7-8 (Dkt. No. 190).)

However, the Kansas court most certainly had

jurisdiction to determine whether the Settlement

Agreement satisfied due process requirements. The

scope of review that one court may conduct to determine

whether a foreign court had jurisdiction to render a

challenged judgment is “limited”:

6é

tlhe

This Court has long recognized that “|

principles of res judicata apply to questions

of jurisdiction as well as to other issues”. . . .

“CA] judgment is entitled to full faith and

credit—even as to questions of jurisdiction

when the second court’s inquiry discloses that

those questions have been fully and fairly

litigated and finally decided in the court which

rendered the original judgment.”

Underwriters, 455 U.S. at 706 (internal citations

omitted). The Court further explained the reason for

this limitation:

The need for finality within our federal system

_ applies with equal force to questions of

jurisdiction. As this Court stated in Stoll v.

Gottlieb, 305 U.S. 165, 172 (1938): “After a

party has his day in court, with opportunity

to present his evidence and his view of the law,

a collateral attack upon the decision as to

jurisdiction there rendered merely retries the

issue previously determined. There 1:

reason to expect that the second decision \

be more satisfactory than the first

Id at 706 n.13. As discussed at length above and In thi

Court’s Order granting Defendant summary judgment

Plaintiffs were given effective notice of the proposed

settlement agreement. They make no argument that

they were not offered an opportunity to be heard® or

that issues of due process were not fully and fairl)

litigated in front of the Kansas court. That Plaintiff

disagree with the Kansas court’s approval of the releass

of claims in the Settlement Agreement is ni

appropriate “jurisdictional” inquir

LV. CONCLUSION

For the foregoing reason

Motior fol Recon erat

OORDERED

Coughens

Coughenour

Late Distr

40a

APPENDIX C — OPINION OF THE UNITED STATES

DISTRICT COURT FOR THE WESTERN DISTRICT

OF WASHINGTON AT SEATTLE

DECIDED AND FILED FEBRUARY 20, 2008

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

CASE NO. C06-0592-JCC

NATHANIEL OLSON and

CHRISTOPHER W. HESSE

PRINT SPECTRUM 1

d/b/a SPRINT PCS

ORDER

This matter comes before the Court on Plaintili

Motion for Partial Summary Judgment (Dkt. No. 179)

and Defendant’s Motion for Summary Judgment

(Dkt. No. 176), together with responses and replies to

each motion, and supporting affidavit and exhibit

4 iF

{ppendix |

Having carefully considered the papers filed, and

determined that oral argument is unnecessary, the

Court hereby GRANTS Defendant’s Motion (Dkt. No.

176) and DENIES Plaintiffs’ Motion (Dkt. No. 175), a

follows.

I BACKGROUND

In this action, Plaintiffs Christopher Hesse and

Nathaniel Olson, individually and on behalf of a similar]

situated class,! assert common law claims of breach of

contract and unjust enrichment and further allege that

Defendant Sprint? violated the Washington Consumer

Protection Act, WASH. REV. CODE 19.86.010 et seq

(Dkt. No. 118 at 9-10.) Plaintiffs’ allegations all relate to

a Washington B&O tax surcharge,® which they contend

Sprint impermissibly billed to its Washington customer

he cla I defined a a) current and former

Washington State wireless service customers of Sprint, who

have been charged and paid to Sprint a Washington B&O ta

reharge. (Order May 18, 2007 (Dkt. No. 1 17 at 1]

». Sprint PCS provides wirel and commercial mobile

dio services in Washington State. It is a limited partnership

organized under the laws of Delaware, with 1ts principal! pla

f business in Kansas. (See Dkt. No. 186 at ¢

}. Washington imposes a busin and Occupa

}eQO”) tax “for the act or pry ilege of « nyaping in busine

tivities” in the state. WASH. REV. CODE 82.04.2200. Thi

B&O tax is an excise tax. 1B KELLY KUNSCH ET AL

WASHINGTON PRACTIC! METHOD ‘KF PRACTIC!I

Plaintiffs originally broug!

actions. filed in state court In March and July

Sprint removed both actions to I deral court, wnere Une

were subsequently con olidated. The Court certified th

class on May 13, 2007; Plaintill Consolidate

Complaint was filed soon thereaiter on june

Sprint’s Answer followed on Jun

118, 121.) Sprint’s Answer a erted several affirmat

defenses, including 1 judicata (Dkt. No. 121 at 14

and more ;: pecifically app! i |

ettlement.” (/d. at 19

Meanwhile, in Februal O06

ettlement Apreem« ntvin a different Cla ACU)

had been pending in one 1orm OI! inowunel

Missouri and Kansas state cour (02. (D

17% > al 2-3.) ‘That Avreement reared | Od |

ettlement cla ¢ relevant ner f

ettlement Cla ynicn I

( i I |

tome! n tne nite {

istome}l 1O} | tee

iecembpe! ()0)t)

IS VI

igment ol

j ett } (

36a

Appendix ©€

quotation marks omitted). Judgments of state courts in

class action proceedings fall squarely within this

mandate and, as such, must be given the same

preclusive effect in federal court that they would be

accorded in the courts of the rendering state.

Matsushita Elec. Indus. Co., Lid., v. E’pste in, 516 US.

367, 373-74, 116 S. Ct. 873, 1384 L. Ed. 2d 6 (1996).

Whether the doctrine of claim preclusion applies is a

question of law, properly resolved on summary

judgment. See Stanfield v. Osborne Indus., Inc., 263

Kan. 388, 949 P2d 602, 608 (Kan. 1997).

II. ANALYSIS

A. Hesse and Olson Are Members of the Benney

Settlement Class

The Benney Settlement Class is comprised of all

Sprint wireless customers in the United States who;

(1) were customers for any time during the period

December 1, 2000 to March 8, 2007; and (2) were charged

“regulatory fees.” Regulatory fees are defined in the

Settlement Agreement as fees or surcharges on

subscriber invoices, specifically including “USA

Regulatory Obligations & Fees,” “Federal E911” and

“Federal Wireless Number Pooling and Portablility” fees

or surcharges. (Dkt. No. 178-3 at 83—4.)

That Plaintiffs are members of the benney

Settlement Class is evident. Plaintiffs attach to their

motion for partial summary judgment a Sprint PCS

wireless invoice addressed to Hesse for the billing period

ADpDpDe Max C

ending January 14, 2002, which includes an assessment

for “USA Regulatory Obligations & Fees.” (Dkt. No. 179-

2 at 50.) Similarly, Sprint submits a wireless invoice

addressed to Olson dated September 23, 2006, which

includes charges for “Federal Wireless peruse Pooling

and Portability,” and “Federal £911.” (Dkt. No. 72 at

10.) That the current action challenges the imposition

of a “surcharge” rather than a “regulatory fee” is

irrelevant to class membership—Plaintiffs cannot and

do not deny that at some point during the period

December 1, 2000 to March 8, 2007 they were charged

regulatory fees as defined in the Settlement Agreement.

B. Hesse and Olson Had Notice of the Benney

Settlement and Did Not Opt Out of the Class

Plaintiffs received notice of the proposec d Settlement

Agreement and failed to opt out of the settlement class.

Hesse was sent notice of the proposed settlement in a1

insert enclosed with his May 15, 2006 invoice, for =

Sprint received payment on or around June 11, 2006.

(Nevels Decl. 94 9, 10 (Dkt. No. 178).) That notice

defined the Benney Settlement Class as “all current and

former Sprint wireless telephone customers in the

United States who were customers for any time during

the period December 1, 2000 to the Effective Date, and

who were charged Regul: atory Fees.” (Dkt. No. 178-6 at

8.) It included an explanation of the “Legal Effect of

the Settlement (Release of Claims)”

Upon the Court's approval of the settlement

the class members who do not properly

38a

Appendix C

opt out of the proposed Settlement Classes,

regardless of whether or not a claim for

benefits is filed, will release and forever

discharge Sprint... from any and all claims,

demands, debts, liabilities, actions, causes of

action of every kind and nature, obligations,

damages, losses, and costs, Whether known or

unknown, actual or potential, suspected or

unsuspected, direct or indirect, contingent or

fixed, that have been, could have been, or in

the future might be asserted in the Benney

Lawsuit...orin any other court or proceeding

which relate in any way to the allegations that

defendants failed to disclose or otherwise

improperly charged for surcharges,

regulatory fees or excise taxes ....

(Id.) Similarly, Olson, who received electronic invoices,

was sent an e-mail containing an internet link to the

notice of proposed settlement on or around July 21,

2006. (Riley Deel. § 8 (Dkt. No. 179).) On July 24, 2006,

the recipient of that email clicked on the link to the

notice (id. at § 12), which defined the Bennrey Settlement

Class and explained the Legal Effect of the Settlement

precisely as the paper notice quoted above. (Dkt. No.

178-6 at 12, 19.)

[In approving the Settlement Agreement, Judge

Dunean found that Sprint had provided notice “far

exceed[ing] the minimum standard necessary’ to

potential settlement class members. (Dkt. No. 178-2 at

i3.) Nevertheless, Plaintiffs argue that “notice was

defective to the extent it purports to cover the B&O tax

charge” because “nothing in the notice sent to Plaintiffs

specified that the Washington B&O tax surcharge

was being settled in the Kansas court.” (Pls.’ Reply 3

n.3 (Dkt. No. 183).) Plaintiffs cite no authority to support

their assertion that, in order to effectively release Sprint

from liability for the claims brought in the instant action,

the Notice of Proposed Settlement had to have

specifically listed each and every surcharge, regulator)

fee, or excise tax potentially covered by the settlement.

Moreover, such a requirement would be impractical and

would certainly discourage settlement, which would run

contrary to the long standing policy of encouraging

settlement—a policy Judge Dunean emphasized in

approving the Settlement Agreement. (See Dkt. No. 178

? at 12.) Plaintiffs’ argument that notice was defective

is without merit.

C. Sprint Did Not Waive the Defense of Preclusion

Plaintiffs argue that Sprint waived any defens

based on the Benney Settlement by not raising it prior

to moving for summary judgment, and as such, shou

be estopped from raising it now. As evidence of waiver,

Plaintiffs cite several documents filed, and appearances

made, by Sprint, none of which mention the Benney

Settlement. Plaintiffs argue that these documents and

court appearances evidence Sprint’s intention to waive

any defense it may have had based on the Benney

Settlement. (Pls. Resp. 10 (Dkt. No. 185).) Moreover,

Plaintiffs argue that “[t]here is no reason why Sprint

eould not have asserted this defense earler, and

40a

Appendix C

Sprint’s failure to invoke the defense until now “has

wasted this Court’s time and prejudiced the Plaintiffs

and an entire class of Washington consumers.” (/d.)

Contrary to Plaintiffs’ assertion, Sprint’s Answer

to the Consolidated Complaint did assert a defense

based upon a prior settlement of claims. Among the

several affirmative defenses set forth in Sprint’s answer

were the defenses of res judicata (Dkt. No. 121 at 14),

and more specifically, “application of the doctrine of

settlement.” (/d. at 15.) Moreover, even if Sprint had

failed to include a preclusion defense in its Answer, in

the Ninth Circuit a defendant may raise an affirmative

defense for the first time—whether or not that defense

was specifically pled in the Answer—in a motion for

summary judgment, “at least where no prejudice results

to the plaintiff.” Healy Tibbitts Const. Co. v. Ins. Co. of

N. Am., 679 F.2d 803, 804 (9th Cir. 1982). Here, Plaintiffs

received notice of the proposed settlement (as detailed

above) in May and July of 2006, and were further put

on notice when Sprint included the defenses of res

judicata and settlement in its Answer. Any costs

thereafter incurred were at Plaintiffs’ peril.

Nor do the other documents filed and court

appearances made by Sprint, which Plaintiffs list in their

Opposition, suffice to waive this affirmative defense.

Because Sprint was well within its rights to assert the

defense for the first time upon motion for summary

judgment, its failure to, for example, raise it in an earlier

motion to dismiss, or mention it at a status conference,

or highlight it in its opposition to class certification,

{ppendix |

simply cannot be interpreted as definitive evidence of

Sprint’s “voluntary or intentional relinquishment” of its

right to assert the defense. See, e.g., Royal Air Props.,

lic. vu. Smith, 333 F.2d 568, 571 (9th Cir. 1964).

D. The Benney Scttlement Bars Plaintiffs’ Claims

Plaintiffs make several arguments that the release

in the order approving settlement is not applicable to

the claims at bar; none are persuasive. The November

8, 2006 Settlement Order released and discharged

Sprint:

from any liability to each and every benney Class

Plaintiff and Settlement Class members, with

the sole exception of those Settlement Class

members who timely excluded themselves from

the class by filing a request for exclusion by the

deadline set by the Court, arising trom or

relating toany and all claims that were or could

have been alleged in the Benney matter,

including but rot Limited to claims which relate

in any way to allegations that, on or before the

Effective Date as defined in the Settlement

Agreement, Sprint failed properly to disclose

or otherwise improperly charged for

surcharges, regulatory fees or excise taxes,

including but not limited to the Regulator)

Fees, as set forth in Paragraph 22(a)(1) of the

Settlement Agreement.

(Dkt. No. 178-2 at 18) (emphasis added). This release

became effective on March 8, 2007, when the final appeal

by an objector was dismissed. (Dkt. No. 178-5 at 2.)

42a

4{ppendix (

First. Plaintiffs contend that the Kansas court that

approved the Settlement Agreement “lacked subject

matter jurisdiction over a claim that Washington

consumers were improperly charged a Washington B&O

tax surcharge, which renders its judgment [approving

the Settlement Agreement] void.” (Pls.’ Reply 3 n.3

(Dkt. No. 183).) Plaintiffs make this argument in a

single, unsupported footnote, and it is without legal

basis. Even if the Kansas state court could not have

properly adjudicated Plaintiffs’ claims if, for example,

the claims at issue were within the exclusive jurisdiction

of the federal courts—the court nevertheless could have

effectively approved a settlement that released claims

that the court itself did not have jurisdiction to decide.

Matsushita, 516 U.S. at 369. In fact, the U.S. Supreme

Court flatly rejected Plaintiff’s argument when it

disapproved of a test applied by the Ninth Circuit

“under which the preclusive force of a state-court

settlement judgment is limited to those claims that

‘could... have been extinguished by the issue preclusive

effect of an adjudication of the state claims.’” /d. at 372.

The rule is clear: “Absent a partial repeal of the Full

Faith and Credit Act, by another federal statute, a

federal court must give the judgment the same effect

that it would have in the courts of the State in which it

was rendered.” Jd. at 369 (internal citations omitted).”

6. Although this argument is not before the Court, it is

worth noting that the language in the order approving the

Benney Settlement is not identical to the language in the release

at issue in Matsushita, and the Benney language could be read

to imply some limitation on the release. Specifically, the order

(Cont'd)

Perhaps Plaintiffs meant to argue that the Kansa

court lacked personal jurisdiction over them; however,

the Kansas Supreme Court has held that, in determining

whether a state court has jurisdiction over nonresident

plaintiffs in a class action, “[wJhat is important is that

the nonresident plaintiffs be given notice and an

opportunity to be heard and that their rights be justly

protected by adequate representation.” Shutts v

(Kan. 1977). The “minimum contacts” standard

applicable when determining whether a court has

personal jurisdiction over a nonresident defendant,

(Cont'd)

releases Sprint from claims “that were or could have been

alleged in the Berney matter.” (Dkt. No. 178-2 at 18.) In contrast,

the Matsushita settlement released “all claims arising out ol

the Matsushita-MCA acquisition,” the plain language thereby

not limiting release to only those [*17] claims that could have

been brought in the jurisdiction where the settlement

agreement was approved. See Matsushita, 516 U.S. at Oo”

However, the difference in language is of no moment here

Defendant Sprint PCS has its principal place of business in

Kansas: therefore, the Court is aware of no reason why a Kansas

state court would not have had jurisdiction over Plaintiffs’

claims, had Plaintiffs chosen to bring them there. See, e.g

Montgome ry v. Sprint Sp etrum. L.P, No. 07-2227, 2007 US

Dist. LEXIS 82608, 2007 WL 3274833, at *1 (D. Kan. Nov. 6,

2007) (Texas resident plaintiff filed a class action petition in

Kansas state court alleging that Sprint “has been and

deceptively and improperly charging her as a Sprint wireless

telephone customer a ‘Texas Margin Fee Reimbursement’ sinc

January 2007.”). Thus, Plaintiffs’ claims are sech that they could

have been alleged in the action which gave rise to the settlement,

and are encompassed by the language of the release

Appendix |

simply does not apply. /d. As discussed in depth ahove,

Plaintiffs were given effective notice of the proposed

settlement agreement. Plaintiffs make no argument

that they were not offered an opportunity to be heard,

and the fact that approximately 103 persons or entities

objected to the Settlement Agreement and roughly

twenty Sprint subscribers elected to opt out of the

Settlement Class belies such a position. (Dkt. No. 178-2

at 10.) Finally, Plaintiffs do not argue that their rights

were not justly protected by adequate representation

and there is no evidence before the Court that would

permit it to make such a finding. The Kansas Supreme

Court has pointed out the close relationship between

notice and the concept of “adequate representation:”

“Notice to absent members of the class... is the

greatest single safeguard against inadequate

representation.” Shutts, 567 P2d at 1314. Simply put, if

Plaintiffs did not believe the proposed settlement

appropriately addressed their interests, they should

have either objected to it, or opted out.

Next, Plaintiffs urge the Court to read the

Settlement Agreement and its implementing order to

encompass only claims related to a “regulatory fees”

surcharge, not implicating an excise tax surcharge such

as for Washington’s B&O tax. The reading Plaintiffs

press contradicts the plain language of the Agreement

and the order approving the settlement. The latter

releases Sprint from liability for “any and all claims that

were or could have been alleged in the benney matter,

including but not limited to claims which relate in any

way to allegations that ... Sprint failed properly to

45a

Appendix C

disclose or otherwise improperly charged for

surcharges, regulatory fees or excise taxes ss

(Dkt. No. 178-2 at 18) (emphasis added).

Finally, Plaintiffs argue that “the claims in the

Kansas case relate solely to collections prior to the

‘effective date’ of the settlement, which is alleged to be

in March 2007. Sprint continued to collected [sic] B&O

tax surcharges after that date.” (Pls.’ Reply 3 n.3 (DKt.

No. 183).) Plaintiffs cite no evidentiary or legal support

for this conclusory statement and it is simply insufficient

to rebut the case Sprint makes for summary judgment.

Moreover, the Court reads the plain language of the

order approving the Benney Settlement to make a

distinction between claims that arise after the effective

date and damages that accrue thereafter, but flow from

claims that arose prior to the effective date. The order

releases Sprint from liability for “claims which relate

in any way to allegations that, on or before the Effective

Date..., Sprint failed properly to disclose or otherwise

improperly charged for surcharges . . . .’ (Dkt. No. 178-

2 at 18) (emphasis added).

IV. CONCLUSION

Kor the roreygoing reusons. the Court find

Plaintiffs’ Claims are harred by the hFbenneyw settiement

Agreement ahd GRANTS Sprint’ Motion for Summat

Judgment. (Dkt. No. 176.) Plaintiffs’ claims at

DISMISSED jn their entirety and Plaintiffs’ Motion fot

Partial Summary, Judgment | secordingly DENIBD

MOOT. (Dkt. No. 175

SO ORDERED

APPENDIX D— ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUFI

DENYING PETITION FOR REHEARING

FILED APRIL 29, 2010

UNITED STATES COURT OF APPEAT

FOR THE NINTH CIRCUTI!

APPENDIX I ORDER OF THE DISTRI!

COURT OF WYANDOTTE COUNTY, KANSA

MIWENTY-NINTH JUDICIAL DISTRICT

DATEDAND FILED FEBRUARY 28, 2006

IN THE DISTRICT COURT OF

WYANDOTTE COUNTY, KANSA

IWENTY-NINTH JUDICIAL DISTRIC!

50a

Appendix E

Case No. 05CYV-1422

Division No. 3

Chapter 60

GREG BENNEY, et al.,

Plaintiffs,

SPRINT INTERNATIONAL

COMMUNICATIONS CORP, et al.,

Defendants.

ORDER GRANTING JOINT MOTION FOR

PRELIMINARY APPROVAL OF CLASS ACTION

SETTLEMENT, PROVISIONAL CLASS

CERTIFICATION AND AUTHORIZING

DISSEMINATION OF NOTICE TO

CLASS MEMBERS

The parties have reached a proposed settlement and

submitted a Joint Motion for Preliminary Approval of

Class Action Settlement, Provisional Class Certification

and Authorization to Disseminate Notice to Class

Members for the preliminary consideration of

this Court, together with the parties’ proposed

Settlement Agreement, containing a proposed plan for

dissemination of notice to the class members regarding

the litigation. All parties deem the proposed Settlement

Agreement to be in their best interest, and defendants

Sla

Appendix E

Sprint Nextel Corporation (formerly Sprint

Corporation), Sprint Spectrum, L.P., Sprint

International Communications Corp., and Sprint

Communications Company L.P, (collectively referred to

as “defendants”) do not oppose entry of this Order.

The Court has considered the submissions by and

presentations of counsel regarding the proposed

Settlement Agreement in light of the requirements of

K.S.A. 60-223. The Court finds that the proposed

Settlement Agreement meets the criteria for

preliminary approval because this Court’s “preliminary

evaluation of the proposed settlement does not disclose

grounds to doubt its fairness or other obvious

deficiencies, such as unduly preferential treatment of

class representations or of segments of the elass, or

excessive compensation for attorneys, and appears to

fall within the range of possible approval.” See Manual

for Complex Litigation, Third (Federal Judicial Center

1995), at § 30.41. Specifically, the Court finds the

proposed Settlement Agreement was reached after

arm’s-length negotiations between experienced

attorneys familiar with the legal and factual issues of

this case; that all class members are treated fairly under

the Settlement Agreement, and that the provisions in

the proposed Settlement Agreement regarding payment

of Class Counsels’ attorneys’ fees and costs are

reasonable. The Court also finds upon preliminary

evaluation that the proposed Settlement Agreement

substantially fulfills the purposes and objectives of this

consumer class action, and provides substantial relief

to class members, without the cost, risk or delays of

further litigation at the trial and appellate levels.

§2a

Appendix E

The Court further finds that class certification for

settlement purposes is appropriate here. Plaintiffs

satisfy all of the criteria for class certification set forth

in K.S.A. 60-223 in the context of settlement. Specifically,

the Court finds that the class members are readily

ascertainable and that they share a well-defined

community of interest in the questions of law and fact

at issue in this litigation. The numerosity requirement

is met because the proposed class members potentially

comprise millions of individuals throughout the United

States, and it is wholly impracticable, if not impossible,

to join individual members of a class of this size and

geographie dispersion. The commonality requirement

is also met; in the absence of class certification and

settlement, each individual Class Plaintiff would be

forced to litigate core common issues of law and fact,

which for settlement purposes collectively predominate

over issues relating solely to the individual Class

Plaintiffs, all relating to Defendants’ alleged common

course of conduct in the marketing, sale, provision and

billing of wireless telephone services. Because the Class

Representatives and Class Plaintiffs’ claims all arise

from the same alleged events and course of conduct,

and are based on the same asserted legal theories, the

typicality requirement is satisfied. The adequacy of

representation requirement is met here because the

named Class Representatives have the same interests

as the members of the Class, and are represented by

experienced and competent counsel.

The Court finds that elass treatment is superior to

other means of resolving the instant dispute, because

Appendix E

employing the class device here will not only achieve

economies of scale for the Class Plaintiffs with relatively

small individual claims, but will also conserve the

resources of the judicial system and preserve public

confidence in the integrity of the system by avoiding

the waste and delay of repetitive proceedings, and

prevent inconsistent adjudications of similar issues and

claims.

Finally, the Court finds that the notice plan, as

agreed to by the parties, meets the requirements of due

process, common law, and other applicable precedent.

Specifically, the Court finds that the proposed notice

program, which includes notice by direct mail to

members of the defined classes and subclasses for whom

Defendants have current computerized bill addressing

information, together with publication notice twice in a

daily edition of the USA Today®, once in the Wall Street

Journal, once in the national newspaper supplement

Parade Magazine, and in the Spanish language

newspaper supplement Vista, is reasonably calculated

under the circumstances to apprise Class Plaintiffs of

the pendency of this litigation and of the proposed

settlement’s terms, conditions and procedures, and shall

constitute due and sufficient notice to all persons entitled

thereto.

54a

Appendix E

IT IS THEREFORE ORDERED that:

lL. Preliminary Settlement Approval

The proposed Settlement Agreement between the

Class Plaintiffs and Defendants appears to be within the

range of reasonableness, is hereby granted preliminary

approval, and accordingly shall be submitted to class

members for their consideration and for a final fairness

hearing.

2. Provisional Class Certification

For purposes of settlement only, the Court

provisionally designates as Settlement Class

Representatives the named plaintiffs, Tom Lundberg,

Sandra Barnes, Donella Brigman, Lily Albaisa and Greg

Benney.

The Court provisionally appoints as Class Counsel:

Kdward D. Robertson, Jr., Mary D. Winter and Stephen

M. Gorny of Bartimus, Frickleton, Robertson & Obetz;

Timothy W. Van Ronzelen and Matthew A. Clement. of

Cook, Vetter, Doerhoff & Landwehr, PC.; Stephen B.

Morris of Morris and Associates; Charles Speer of the

Speer Law Firm; and Joe Whatley of Whatley Drake,

LLC.

The Settlement Agreement defines different classes

of customers in the United States during the period

beginning on or about January 1, 1997, through the

present. Based thereon, the Court provisionally certifies

the following Settlement Classes:

SSa

Appendix E

BENNEY SETTLEMENT CLASS. The Benney

Settlement Class shall consist of all current and former

Sprint-branded (“Sprint” or “Sprint PCS”) wireless

telephone customers in the United States who were

customers for any time during the period December 1,

2000 to the Effective Date, and who were charged

Regulatory Fees (as defined in the Settlement

Agreement). For purposes of settlement only, and for

no other purpose, the Berney Settlement Class shall

consist of the following subclasses:

BENNEY SUBCLASS 1

ALL CURRENTSPRINTSUBSCRIBERS AS

OF THE EFFECTIVE DATE WHO WERE

SUBSCRIBERS DURING ANY PART OF

THE PERIOD FROM DECEMBER 1, 2000

TO MAY 31, 2003.

BENNEY SUBCLASS 2

ALL CURRENT SPRINT SUBSCRIBERS AS

OF THE EFFECTIVE DATE, WHO

BECAME SUBSCRIBERS AFTER MAY 31,

2003.

BENNEY SUBCLASS 3

ALL FORMER SPRINT SUBSCRIBERS AS

OF THE EFFECTIVE DATE WHO WERE

SUBSCRIBERS DURING ANY PART OF

THE PERIOD FROM DECEMBER 1, 2000

TO MAY 31, 2003.

S6a

Appendix E

BENNEY SUBCLASS 4

ALL FORMER SPRINT SUBSCRIBERS

AS OF THE EFFECTIVE DATE WHO

BECAME SUBSCRIBERS AFTER MAY 31,

2003.

EXCLUDED FROM THE BENNEY SETTLEMENT

CLASS AND ALL BENNEY SUBCLASSES ARE

SPRINT AND THEIR PARENTS, SUBSIDIARIES,

AFFILIATES, SUCCESSORS, OR ANY CONTROL

PERSONS OF SPRINT, AS WELL AS OFFICERS,

DIRECTORS, AGENTS, ATTORNEYS, OR

EMPLOYEES, AND THE IMMEDIATE FAMILY

MEMBERS OF ANY SUCH PERSONS, AS WELL AS

ANY ATTORNEY FOR THE BENNEY CLASS OR ANY

JUDICIAL OFFICER WHO MAY HAVE WIRELESS

PHONE SERVICE THROUGH SPRINT. ALSO

EXCLUD&£D ARE PERSONS OR ENTITIES WHOSE

SUBSCRIBER STATUS WAS DEACTIVATED BY

SPRINT FOR NON-PAYMENT OR OTHER BREACH

OF THEIR (ITS) AGREEMENT WITH SPRINT.

PERSONS WHO ARE CURRENT SPRINT

CUSTOMERS AT THE DATE OF PRELIMINARY

APPROVAL OF THE SETTLEMENT, BUT WHO ARE

NO LONGER SPRINT CUSTOMERS AT THE TIME

OF THE EFFECTIVE DATE SHALL BE MEMBERS

OF BENNEY SUBCLASS 3 OR BENNEY SUBCLASS

4, DEPENDING UPON WHEN THEY FIRST

BECAME SUBSCRIBERS.

d/a

Appendix E

LUNDBERG SETTLEMENT CLASS. The

Lundberg Settlement Class shall consist of all current

and former Sprint wireless customers in the United

States who were customers any time during the period

January 1, 1997 to the Effective Date, and who have or

could have asserted claims relating to directory

assistance calls, Sprint’s practice of rounding minutes

up to the next whole minute, and/or Coverage and

Capacity Issues. For purposes of settlement only, and

for no other purpose, the Lundberg Settlement Class

shall consist of the following subclasses:

LUNDBERG SUBCLASS 1

ALL CURRENT SPRINT SUBSCRIBERS

AS OF THE EFFECTIVE DATE WHO

WERE SUBSCRIBERS ANYTIME PRIOR

TO JUNE 1, 2008.

LUNDBERG SUBCLASS 2

ALL CURRENT SPRINT SUBSCRIBERS

AS OF THE EFFECTIVE DATE WHO

BECAME SUBSCRIBERS ON JUNE J,

2003, OR LATER.

LUNDBERG SUBCLASS 3

ALL FORMER SPRINT SUBSCRIBERS

AS OF THE EFFECTIVE DATE WHO

WERE SUBSCRIBERS ANYTIME PRIOR

TO JUNE 1, 2008.

S&a

Appendix E

LUNDBERG SUBCLASS 4

ALL FORMER SPRINT SUBSCRIBERS

AS OF THE EFFECTIVE DATE WHO

BECAME SUBSCRIBERS JUNE 1, 2008,

OR LATER.

EXCLUDED FROM THE LUNDBERG

SETTLEMENT CLASS AND ALL LUNDBERG

SUBCLASSES ARE SPRINT AND THEIR PARENTS,

SUBSIDIARIES, AFFILIATES, SUCCESSORS, OR

ANY CONTROL PERSONS OF SPRINT, AS WELL AS

OFFICERS, DIRECTORS, AGENTS, ATTORNEYS, OR

EMPLOYEES, AND THE IMMEDIATE FAMILY

MEMBERS OF ANY SUCH PERSONS, AS WELL AS

ANY ATTORNEY FOR THE LUNDBERG CLASS OR

ANY JUDICIAL OFFICER WHO MAY HAVE

WIRELESS PHONE SERVICE THROUGH SPRINT.

ALSO EXCLUDED ARE PERSONS OR ENTITIES

WHOSE SUBSCRIBER STATUS WAS DEACTIVATED

BY SPRINT FOR NON-PAYMENT OR OTHER

BREACH OF THEIR (ITS) AGREEMENT WITH

SPRINT. PERSONS WHO ARE CURRENT SPRINT

CUSTOMERS AT THE DATE OF PRELIMINARY

APPROVAL OF THE SETTLEMENT, BUT WHO ARE

NO LONGER SPRINT CUSTOMERS AT THE TIME

OF THE EFFECTIVE DATE SHALL BE MEMBERS

OF LUNDBERG SUBCLASS 38 OR LUNDBERG

SUBCLASS 4, DEPENDING UPON WHEN THEY

FIRST BECAME SUBSCRIBERS.

59a

Appendix E

Should the proposed Settlement Agreement not

receive the Court’s final approval, should final approval

be reversed on appeal, or should the Settlement

Agreement otherwise fail to become effective, the

Court’s grant of provisional class certification shall be

vacated, and Plaintiffs would once again bear the burden

of establishing the propriety of class certification.

3. Notice and Notice-Related Dates and Deadlines

On or before 3 May ’06, Class members who are

current Sprint customers shall be notified of the

proposed Settlement Agreement by direct mail notice

included in Sprint’s monthly billing envelope during a

regular billing cycle or, at Defendants’ option, either by

separate similar mailing, or by e-mail to current

customers whom Sprint customarily and exclusively bills

by e-mail. For this purpose, the Court approves the

Notice of Pendency of Class Action, Proposed

Settlement, attached to the parties’ Settlement

Agreement as Exhibit A.

On or before 3 May ’06, class members who are

former customers of Sprint shall be notified of the

proposed Settlement Agreement by direct mail notice,

substantially in the form attached as Exhibit B tu this

Settlement Agreement, to be mailed by post card

(referencing website and toll-free numbers for more

information) to all class members who are former

customers for whom Sprint has in its files reasonably

sufficient address information.

60a

Appendix E

As additional notice, on or before 3 May ’06, Sprint

shall cause notice substantially in the form of Exhibit C

to the Settlement Agreement to be published at least

once each in The Wall Street Journal, the national

newspaper supplement Parade Magazine, and in the

Spanish language newspaper supplement Vista, and at

least twice in USA Today (including at least one

placement in a Friday/Weekend edition), at its expense.

Class Counsel shall also post notice substantially in the

form of Exhibit A (together with claim forms for both

current and former customers) on a website to be

selected and maintained by Class Counsel through the

date of Final Settlement (the address of which shall be

referenced in the notices mailed to class members who

are current and former customers). In addition, Class

Counsel shall obtain and maintain through the date of

Final Settlement a toll free telephone number, with

information including the website address maintained

by Class Counsel, and a contact address to write for

additional information and forms.

4. Final Approval

A hearing shall be held before this Court on 13 July

of 2006 at 1:30 p.m. to determine: (1) whether the

proposed Settlement Agreement is fair, reasonable and

adequate and should be finally approved by the Court;

(2) whether the Class should be finally certified;

(3) whether the named Class Representatives should

be finally designated to represent the Class; (4) whether

plaintiffs’ counsel of record should be finally designated

Class Counsel; and (5) whether any application of Class

6la

Appendix Ek

Counsel for an award of attorneys’ fees and expenses is

reasonable and should be approved.

5. Haclusions/Objections

All members of the Class shall have the option to be

excluded from the Settlement Classes and thereby elect

not to participate in the proposed Settlement

Agreement. All persons who properly file timely and

valid requests for exclusion from the Settlement Classes

shall not be class members of either the Benney

Settlement Class or the Lundberg Settlement Class (as

and to the extent that the Settlement as to either or

both received final approval from the Court) and shall

have no rights with respect to, and no interest in any

compensation under the Settlement Agreement

pertaining to such Settlement Class(es). To request

exclusion, persons must request to be excluded from

the Settlement Classes, and must sign a request for

exclusion personally or by legal counsel. If such a

request is made by a corporation or other entity, the

request for exclusion must be signed by an authorized

representative or legal counsel of the corporation or

other entity. The request must include: (1) customer’s

full name; (2) customer’s current address and applicable

wireless account number; (3) customer’s signature; and

(4) aspecific statement that “I want to be excluded from

the Settlement Classes.” A request for exclusion must

be made for each wireless telephone account that falls

within any subclass. Only those accounts referenced will

be excluded. The request for exclusion must be sent by

first class mail, postmarked on or before 12 June, 2006,

adaressed to:

62a

{ppendix I

speer Law Firm, PA

PO. Box 414963

Kansas City, MO 64141-49638

If the request is not postmarked on or before 12

June, 2006, the request for exclusion will be invalid, and

the person, corporation or entity making the request

will be included in the Settlement Class automatically.

If no such request is made, all members of the

Settlement Classes will be bound by the terms of the

Settlement approved by the Court, including without

limitation, the judgment ultimately rendered in either

or both Benney or Lundberg, and members of the

Settlement Classes will be barred from bringing any

claims which arise out of or relate in any way to Sprint’s

Regulatory Fees, Coverage and Capacity Issues, and

other claims that were brought in either Kenney or

Lundberg.

Any member of the Settlement Classes who object

to the approval of the proposed Settlement Agreement,

to entry of final judgment, to an award of attorneys’

fees and costs, or the adequacy of Class Counsel or Cla:

Representatives, or notice, and who properly objects to

the proposed Settlement Agreement may appear at the

hearing and show cause why the proposed Settlement

Agreement should not be approved as fair, adequate and

reasonable. Objections to the proposed Settlement

Agreement shall be heard and considered by the Court

only if such objectors serve upon Class Counsel and

counsel for Defendants by hand delivery or first-class

mail a written statement of objection, with copies of any

Ippendh j

upporting papers and briefs, delivered or postmarked

on or before 12 June ’06, and file the same written

documents with the Clerk of the Court. The objection

must be signed personally or by legal counsel, If an

objection is made by a corporation or other entity, the

objection must be signed by an authorized

representative or legal counsel of the corporation o1

other entity. The objection must include: (1) customer’

full name; (2) customer’s current address and applicable

wireless account number; (3) customer’s sivnature; and

(4) a statement that the objector is a member of the

settlement Classes. The objection must state why the

person, corporation or entity objects to the proposed

settlement and any reasons supporting that position

An objection must be made for each wireless telephone

account that falls within any subela Only those

accounts referenced will be considered as objecting to

(

the settlement. Any member of the Settlement Classe

who does not make an objection in the manner provided

hall be deemed to have waived such objection and shall

be foreclosed from making any objection to the fairne

or adequacy of the proposed Settlement Agreement, to

any final judgment that may be entered, and to the

award of attorneys’ fees and expenses to Class Counse!

unle otherwise ordered by the Court

6. further Mattes

Hu) Cla (counsel are authorized to respond to

Inquiries from class members concerning: the proposed

eltiement Avreement tn} (Orde) mad qt Tal

64a

Appendix E

(b) Pending final determination of whether the

Settlement Agreement should be approved, all

discovery and all proceedings in the litigation are

stayed, except for proceedings relating to the

Settlement Agreement.

of the final approval hearing without further notice to

the members of the Class and retains jurisdiction to

consider all further applications arising out of, or

connected with, the proposed Settlement Agreement.

IT ISSO ORDERED.

Date: 28 Feb. ’06 s/ Daniel A. Dunean

District Court Judge

Kansas City, Kansas

6Sa

Appendix E

Submitted By:

THE SPEER LAW FIRM

s/ Charles Speer

Charles Speer (#11198)

104 West 9th Street, Suite 305

Kansas City, MO 64105

(&16) 472-3560

(S16) 421-2150 (Facsimile)

STINSON MORRISON HECKER LLP

s/ Daniel D. Crabtree

Mark LD. Hinderks (#11293)

Daniel D. Crabtree (#10903)

William E. Hanna (#14480)

10975 Benson

12 Corporate Woods, Suite 550

Overland Park, KS 66210

(913) 451-8600

(913) 451-6352 (Facsimile)

ATTORNEYS FOR DEFENDANTS

66a

APPENDIX F — ORDER GRANTING FINAL

APPROVAL OF CLASS ACTION SETTLEMENT,

ATTORNEY FEES AND EXPENSES FILED

NOVEMBER 8, 2006

IN THE DISTRICT COURT OF WYANDOTTE

COUNTY, KANSAS TWENTY-NINTH

JUDICIAL DISTRICT

Case No. 02CV-4551

Division No. 3

Chapter 60

TOM LUNDBERG, et al.

Plaintiffs,

VS.

SPRINT CORPORATION, et al.,

Defendants.

Case No. 05CV-1422

Division No. 3

Chapter 60

GREG BENNEY, et al.,

Plaintiffs,

SPRINT INTERNATIONAL

COMMUNICATIONS CORP, et al.,

Defendants.

67a

Appendix F

ORDER GRANTING FINAL APPROVAL OF

CLASS ACTION SETTLEMENT, ATTORNEY

FEES AND EXPENSES

Plaintiffs and Defendants Sprint Nextel

Corporation (formerly Sprint Corporation), Sprint

Spectrum, L.P, Sprint International Communications

Corporation, and Sprint Communications Company, L.P.

(collectively referred to herein as “Sprint” or

“clefendants”), have submitted a Motion for Final

Approval of Class Action Settlement for the

consideration of this Court. All parties deem the

proposed Settlement Agreement! to be in their best

interest, and defendants do not oppose entry of this

Oirder. Plaintiffs make a separate motion for the award

of attorneys’ fees and expenses. The motions are hereby

GRANTED for the reasons explained below.

A. Plaintiffs’ Claims In Benney

1. On November 27, 2002, the named plaintiff in

Benney commenced the lawsuit styled Benney v. Sprint

Spectrum, L.P, et. al., in the Circuit Court of Cole

County, Missouri, Case No. 02CV326133, asserting

claims against Sprint related to Sprint’s marketing, sale

and billing of wireless telephone services, on behalf of a

nationwide class consisting of individuals who purchased

wireless telecommunications service from Sprint and

who were charged Regulatory Fees.

1. As used herein, capitalized terms have the meanings

set forth in the “Definitions” section of the Class Action

Settlement Agreement preliminarily approved by this Court.

68a

Appendix F

2. In his petition, plaintiff alleged, among other

things, that: (1) Sprint violated consumer protection laws

by making misleading and deceptive statements

regarding the Regulatory Fees, which Sprint has

charged its customers in the United States; (2) Sprint

breached contracts with himself and the class members

by charging the Regulatory Fees and by hiding a “rate

increase” in the monthly billing statement; and (3)

Sprint was unjustly enriched by collecting the

Regulatory Fees. The Berney Class Plaintiff alleges that

Sprint is liable for compensatory, statutory, and related

damages, punitive damages, and attorneys’ fees and

costs under various statutory and common law theories.

3. On the ground that plaintiff’s petition asserted

claims preempted by the Federal Communications Act

(“FCA”), 47 U.S.C. § 201, et seq., Sprint removed the

case pursuant to 28 U.S.C. § 1446 on or about December

11, 2002 to the United States District Court for the

Western District of Missouri, Case No. 02-4269. The

United States District Court remanded the case back

to the Circuit Court of Cole County, Missouri on or about

September 23, 2004. Sprint contended that Class

Plaintiffs factual and legal allegations are insufficient,

are not appropriate for class action certification, and

are subject to arbitration. In fact, Sprint responded to

the Benney Complaint by filing a motion to compel

arbitration, which was fully briefed, argued and pending

before the Cole County Cireuit Court at the time of

settlement discussions resulting in a settlement. Sprint

had suecessfully moved to compel arbitration in several

similar cases. Prior to any ruling on Sprint’s motion to

69a

Appendix F

compel arbitration in Benney, and in order to implement

the settlement agreement, Benney dismissed his lawsuit

without prejudice in Cole County, Missouri and refiled

it in the District Court of Wyandotte County, Kansas on

or about September 13, 2005.

B. Procedural History of Lundberg, Barnes,

Brigman and Albaisa

4. On October 30, 2002, a lawsuit ultimately styled

(following amendments to pleadings) Lundberg and

Barnes v. Sprint Corp., et al. was filed in the District

Court of Wyandotte County, Kansas, Case No. 02 CV-

4551, asserting claims against Sprint relating to its

marketing, sale and billing of wireless telephone

services, including claims that Sprint offered wireless

phone service without properly disclosing limitations on

the coverage, capacity and geographic seope of the

Sprint wireless network (ineluding, but not limited to,

the availability or claimed necessity of software

upgrades to phone handsets), as well as dropped

customer calls and the failure to connect customer calls

(hereinafter referred to as “Coverage and Capacity

Issues”).

5. Sprint removed this case on or about December

3, 2002 to the United States District Court of Kansas,

Case No. 02-CV-2598, pursuant to 28 U.S.C. § 1146. As

in Benney, the parties in Lundberg submitted

substantial briefing on the issue of whether the FCA

preempts plaintiff’s state law claims. The federal court

subsequently remanded the case back to the District.

70a

Appendix F

Court of Wyandotte, County, Kansas on or about May

22, 2003. After remand, Sprint successfully moved to

compel arbitration of the issues and claims raised in the

Lundberg lawsuit, and the parties in Lundberg initiated

arbitration proceedings.

6. In August, 2002, a lawsuit styled Albaisa v.

Sprint International Communications, et al., was filed

in California Superior Court, asserting claims against

Sprint relating to Sprint’s marketing, sale and billing

of wireless telephone services including alleged

misleading and deceptive statements regarding

Coverage and Capacity Issues. On December 22, 2004,

the Superior Court of California sustained Sprint’s

demurrer to plaintiff’s Petition, thereby dismissing the

ease. On January 11, 2005, the Albaisa plaintiff

commenced an appeal in the California Court of Appeal.

7. In addition, on May 12, 2005, a lawsuit styled

Brigman v. Sprint Corporation was filed in the Court

of Common Pleas of Richland County, South Carolina,

Case No. 2005CP4002229, asserting claims against

Sprint relating to Sprint’s marketing sale and billing of

wireless telephone services, including claims relating to

Coverage and Capacity Issues.

8. On September 138, 2005, and with Sprint’s

consent, counsel in Lundberg, Barnes, Brigman and

Albaisa filed a Third Amended Petition in the existing

Lundberg case against Sprint in Case No. 02C4551 in

the District Court of Wyandotte County, joining all of

their claims together in the Wyandotte County District

7la

Appendix F

Court (hereinafter referred to as the “Lundberg

Consolidated Action”).

C. The Settlement Agreement

9. The Settlement Agreement resolves all class

members’ claims, including attorneys’ fees and costs.

Attorneys’ fees are not payable from funds due Class

Members but are payable by Sprint alone.

10. The Settlement Agreement in both Benney and

Lundberg create different subclasses based upon when

class members became Sprint customers, and whether

they are current or former Sprint customers.

11. The Settlement Agreement defines different

classes of customers in the United States during the

period beginning on or about January 1, 1997, through

the present. Based thereon, the Court certifies the

following Settlement Classes referenced below.

12. BENNEY SETTLEMENT CLASS. The

benney Settlement Class consists of all current and

former Sprint-branded (“Sprint” or “Sprint PCS”)

wireless telephone customers in the United States who

were customers for any time during the period

December 1, 2000 to the Effective Date as defined in

the Settlement Agreement, and who were charged

Regulatory Fees (as defined in the Settlement

Agreement). The Benney Settlement Class consists of

the following subclasses:

72a

Appendix F

a. BENNEY SUBCLASS 1. ALL CURRENT

SPRINT SUBSCRIBERS AS OF THE

KFFECTIVE DATE WHO WERE

SUBSCRIBERS DURING ANY PART OF THE

PERIOD FROM DECEMBER 1, 2000 TO MAY

31, 2003.

b. BENNEY SUBCLASS 2. ALL CURRENT

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE, WHO BECAME

SUBSCRIBERS AFTER MAY 31, 2003.

c. BENNEY SUBCLASS 3. ALL FORMER

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO WERE

SUBSCRIBERS DURING ANY PART OF THE

PERIOD FROM DECEMBER 1, 2000 TO MAY

31, 2003.

d. BENNEY SUBCLASS 4, ALL FORMER

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO BECAME

SUBSCRIBERS AFTER MAY 31, 20038.

13. LUNDBERG SETTLEMENT CLASS. The

Lundberg Settlement Class consists of all current and

former Sprint wireless customers in the United States

who were customers any time during the period January

1, 1997 to the Effective Date (as defined in the

Settlement Agreement), and who have or could have

asserted claims relating to directory assistance calls,

Sprint’s practice of rounding minutes up to the next

73a

Appendix F

whole minute, and/or Coverage and Capacity Issues. The

Lundberg Settlement Class consists of the following

subclasses:

a. LUNDBERG SUBCLASS 1. ALL CURRENT

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO WERE

SUBSCRIBERS ANYTIME PRIOR TO JUNE 1,

2003.

b. LUNDBERG SUBCLASS 2. ALL CURRENT

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO BECAME

SUBSCRIBERS ON JUNE 1, 20038, OR LATER.

c. LUNDBERG SUBCLASS 3. ALL FORMER

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO WERE

SUBSCRIBERS ANYTIME PRIOR TO JUNE 1,

2003.

d. LUNDBERG SUBCLASS 4. ALL FORMER

SPRINT SUBSCRIBERS AS OF THE

EFFECTIVE DATE WHO BECAME

SUBSCRIBERS JUNE 1, 2003, OR LATER.

/4a

Appendix F

14. Pursuant to the approved settlement, Sprint

will provide the following benefits to the Settlement

Classes:

BENNEY SUBCLASS I

Those subclass 1 members who did not opt out of the

settlement will receive their choice of the following

benefits upon the timely submission of a claim form

reflecting their election of benefits:

(i) aseries of eight equal (as nearly as practicable)

quarterly invoice credits on future Sprint

wireless bills to their existing account in the

total amount of $19.00; or

(ii) an immediate invoice credit of $15.00, upon

their agreement to a two year contract for

Sprint wireless service; or

(iil) a Sprint long distance phone card in the face

amount of $14.00.

BENNEY SUBCLASS 2

Those subclass 2 members who did not opt out of the

settlement will receive the following benefit upon the

timely submission of a claim form:

(i) a Sprint long distance calling card in the fac

amount of $2.50.

75a

Appendix I

BENNEY SUBCLASS 3

Those subclass 8 members who did not opt out of the

settlement will receive their choice of the following

benefits upon the timely submission of a claim form

reflecting their election of benefits:

(i) a Sprint long distance phone card in the face

amount of $14.00; or

(ii) an immediate invoice credit of $15.00, upon

their agreement to a two-year contract for

Sprint wireless service.

BENNEY SUBCLASS 4

Those subclass 4 members who did not opt out of the

settlement will receive the following benefit upon the

timely submission of a claim form:

(G) a Sprint long distance phone card in the face

amount of $2.50.

LUNDBERG SUBCLASS 1

Those subclass 1 members who did not opt out of the

settlement will receive their choice of the following

oenefits upon the timely submission of a claim form

-eflecting their election of benefits:

(i) aseries of eight equal (as nearly as practicable)

quarterly invoice credits on future Sprint

wireless bills to their existing account in the

total amount of $7.00; or

ettliement will receive the follo

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Appendix

LUNDBERG SUBCLASS 4

Those subclass 4 members who did not opt out of the

settlement will receive the following: benefit, upon the

timely submission of a claim form:

(4) aSprint long distance phone card in the face

amount of $1.50.

lh. The Settlement Agreement for which the Court

orders Final Approval provides for additional, post

settlement discovery pursuant to the Kansas Rules of

Civil Procedure to permit Class Counsel to assure Class

Members and the Court that Sprint has provided the

benefits it has agreed to provide. The Settlement

Agreement also provides a financial incentive for Class

Counsel to obtain such assurances by withholdings

payment of 20% of Class Counsel’s fees until the

confirmatory discovery is completed and this Court

reveives a report from Class Counsel setting: out the

results of that confirmatory discovery

l6. The Settlement Agreement also provides for

binding resolution of disputes concerning claims by Class

Members that Sprint failed to provide class benefits.

The Settlement Agreement expressly appoints Orran

.. Brown, an independent individual, an attorney and

person experienced in major class action administration,

as the final arbiter of disputed claims

78a

Appendix F

17. The Settlement Agreement also requires Sprint

to extend the notification provisions of the Missouri

Attorney General Settlement on a nationwide basis. This

prospective relief is essentially what Plaintiffs requested

in their Complaint.

D. Dissemination of Notice to the Class Members,

Class Member Response, Fairness Hearing

18. Pursuant to the Court’s Order, Sprint mailed

the Notice of Pendency of Class Action, Proposed

Settlement, and Hearing to the last known address of

all Settlement Class members. Substantially all Notices

were sent by the Court’s deadlines. The Notice also was

published in national newspapers, including a Spanish

language newspaper. In addition, Class Counsel made a

toll-free number available for persons having questions

about the notice and the settlement and created an

internet web site that provided additional information

about the settlement and answered frequently asked

questions. Class Counsel also responded to e-mail

questions and comments sent to the e-mail address

provided class members on the web site and on the toll-

free telephone line.

19. The Court finds that at the time of the Fairness

Hearing there were approximately 425,000 current or

former Sprint customers who submitted claim forms and

that many of those claim forms were submitted on behalf

of, and obtaining benefits relating to, multiple customers

or phone numbers. The Court finds that approximately

103 persons or entities objected to the Settlement

79a

Appendix F

Agreement. Roughly twenty current or former Sprint

subscribers have elected to opt out of the Settlement

Class.

20. The Court conducted its Fairness Hearing on

September 12, 2006. At that hearing counsel]

representing Class Plaintiffs and counsel representing

Sprint presented arguments in support of final approval]

of the proposed class action settlement. Counsel for

several objectors made presentations to the Court. All

objectors were afforded the opportunity to present their

objections to the Court at the Fairness Hearing. At the

conclusion of the Fairness Hearing, the Court permitted

the filing of supplemental objections and responses

thereto by Class Plaintiffs and Sprint.

KE. Class Representatives

21. The Court finds that class representatives Tom

Lundberg, Sandra Barnes, Donella Bergman, Lily

Albaisa and Greg Benney were Sprint customers during

the relevant time periods.

22. The Court finds that class representatives’ bills

from Sprint were typical of the bills sent to Sprint

Customers who were charged the Regulatory Fees in

that each bill imposed the Regulatory Fees, and other

charges relating to directory assistance calls, the

practice of rounding minutes up to the next whole

minute, and also relate to issues involving the disclosure

of limitations on the coverage, capacity, and geographic

scope of the Sprint PCS wireless network (including,

80a

Appendix F

but not limited to, the availability or claimed necessity

for software upgrades to phone handsets); Coverage and

Capacity Issues; dropped customer ealls; and the

inability to connect customer calls.

23. The Court finds that class representatives paid

the Regulatory Fees at issue in this case during the

relevant time period, and also had Coverage and

Capacity Issues, and the other problems with wireless

phone service described above.

24. The Court further finds that Class Plaintiffs

were engaged in the conduct of the case, including

approving the negotiated settlement.

25. The Court has considered the submissions by

and presentations of counsel regarding the proposed

Settlement Agreement in light of the requirements of

K.S.A. 60-223. The Court finds that the proposed

Settlement Agreement meets the criteria for final

approval. Specifically, the Court finds that: (1) the

proposed Settlement Agreement was fairly and honestly

negotiated after arm’s-length negotiations between

experienced attorneys familiar with the legal and factual

issues of this case; (2) serious questions of law and fact

exist, placing the ultimate outcome of the litigation in

doubt; (8) the value provided in the Settlement

Agreement outweighs the mere possibility of future

relief after protracted and expensive litigation; and (4)

the Court recognizes that, in the judgment of the parties,

the settlement is fair and reasonable, and the Court

agrees with that judgment. In sum, the Court finds upon

Sla

Appendix F

evaluation that the Settlement Agreement substantially

fulfills the purposes and objectives of this consumer class

action, and provides substantial relief to class members,

without the cost, risk or delays of further litigation at

the trial and appellate levels or in arbitration

proceedings.

EF Standard of Review under K.S.A. 60-223

26. A class action shall not be dismissed or

compromised without the approval of the court. K.S.A.

60-223(e). Courts consider the following factors in

determining whether a settlement is fair, adequate and

reasonable: (1) whether the proposed settlement was

fairly and honestly negotiated; (2) whether serious

questions of law and fact exist, placing the ultimate

outcome of the litigation in doubt; (3) whether the value

of an immediate recovery outweighs the mere possibility

of future relief after protracted and expensive litigation;

and (4) the judgment of the parties that the settlement

is fair and reasonable. /d. (citing Jones v. Nuclear

Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984).*

2. Kansas’ class action statute was patterned after

Fed. R.Civ.P. 23. See Beaver v. Chaffee, 2 Kan. App. 2d 364, 371,

579 P2d 1217, 1223 (Kan. Ct. App. 1978). Accordingly, “Kansas

courts have ... consistently followed federal court interpretation

of FE. R.C.P Rule 23 in applying the Kansas Class Action Rule.”

Williams Food, 2001 WL 1298887 at *2 (citing Steele v. Security

Benefit Life Ins. Co., 226 Kan. 631, 636, 602 P2d 1305, 1309 (Kan.

1979).

82a

Appendix F

l. Settlements of Class Actions are Favored

under the Law.

27. This Court is well aware of the long policy of

encouraging settlement. “It is in the interests of the

courts and the parties that there should be an end to

litigation and the law favors the peaceful settlement of

controversies.” Jn re Dep't of Energy Stripper Well

Exemption Litig., 653 F. Supp. 108, 115 (D. Kan. 1986).

Indeed, “[p]articularly in class action suits, there is an

overriding public interest in favor of settlement”

because it “minimizes the litigation expenses of all

parties and reduces the strain on judicial resources.”

Williams Food, 2001 WL 1298887 at *2 (citations

omitted). Accordingly, “[t]he test is whether the

settlement is adequate and reasonable and not whether

a better settlement is conceivable.” /d. (citations

omitted).

28. In judging whether the proposed settlement is

fair, adequate and reasonable, the Court must compare

the value of the settlement against a realistic

assessment of the plaintiffs’ probability of suecess on

the merits. By any reasonable measure, the proposed

settlement is fair and appropriate and should be

approved,

83a

Appendix F

G. Proper Notice of the Class Action Settlement

Agreement Was Given

29. In this case, the Court approved individualized

notice by mail to the potential settlement class members’

last known address. Furthermore, for those who might

be missed by this undertaking, Sprint extensively

published the notice of the class action settlement in

national newspapers, including a Spanish-language

newspaper. The notice provided by Sprint pursuant to

the terms of the Proposed Settlement Agreement as

approved by this Court was the “best notice practicable”

and far exceeds the minimum standard necessary.

30. “While due process and [Fed. R. Civ. P] 23(e)

require notice of a settlement to be given, the content

and form of that notice are left to the court’s discretion.”

In re Integra Realty Res., Inc., 262 F.3d 1089, 1111 (10th

Cir. 2001). “The legal standards for satisfying Rule

23(c)(2)(B) and the constitutional guarantee of

procedural due process are coextensive and

substantially similar.” DeJulius v. New England Health

Care Employees Pension Fund, 429 F.3d 935, 944 (10th

Cir. 2005). Those standards simply require notice to be

“reasonably calculated, under all the circumstances, to

apprise interested parties of the pendency of the action

and afford them an opportunity to present their

objections.’” Jd. (quoting Mullane v. Cent. Hanover

Sank & Trust Co., 339 U.S. 306, 314 (1950)). The district

court should give “the best notice practicable under the

circumstances including individual notice to all members

who can be identified through reasonable effort.” /d.

84a

Appendix F

(quoting /ntegra Realty, 262 F.3d at 1110). The Supreme

Court has specifically held that individualized notice by

mail to the last known address was the “best notice

practicable” in a class action context. Fisen v. Carlisle

& Jacquelin, 417 U.S. 156, 175 (1974).

H. The Settlement is Fair, Reasonable, and Adequate

31. “The single most important factor in

determining whether a settlement is fair, reasonable,

and adequate is a balancing of the strength of the

plaintiff’s case against the terms of the settlement.”

Van Horn v. Trickey, 840 F.2d 604, 607 (8th Cir. 1988);

See also Petrovic v. Amoco Oil Co., 200 F.3d at 1140,

1148-49 (8" Cir. 1999).

1. The Merits of the Plaintiffs’ Case Balanced

Against Benefits of the Settlement

32. In essence, plaintiffs claim that Sprint’s use and

labeling of the Regulatory Fees is misleading and an

unfair practice in violation of Section 201(b) of the

Federal Communications Act. More specifically,

plaintiffs claim that the charge was misleading since it

was titled as a “federal” charge when, in fact, it was not

a federal charge, but a mere cost recovery measure

voluntarily imposed on Sprint’s customers by Sprint.

Plaintiffs claim that the title of the charge, along with

its placement on the customers’ bills under the “Taxes,

Fees, and Assessments” section led customers to believe

that this was a federally imposed charge akin to a tax.

Customers were damaged, plaintiffs theory goes, since

85a

Appendix F

they were led to believe that there was no use to go to

another cellular provider to avoid this charge since, as

a “federal” charge, all cellular providers would be

imposing it. Therefore, customers continued to pay the

charge without question or without leaving defendant

for another provider and, accordingly, lost a right to

terminate their contract.

33. Sprint counters with many defenses. First, they

claim that the FCC specifically provides that it is proper

to recover costs it is forced to endure for complying with

mandatory system upgrades like E911, and number

pooling. See In the Matter of Revision of the

Commission's Rules to Ensure Compatibility with

Enhanced 911 Emergency Calling Sys., 11 F-.C.C.R.

18676 at 111 (1996) and 14 F-C.C.R. 20850 at {1 20 (1999).

Second, Sprint argues that its labeling is appropriate

under the FCC’s Truth-in-Billing Format Order. See

14 F.C.C.R. 7492 at 155 (1999). In addition, Sprint claims

that it made full and complete disclosures about the

Regulatory Fees to its customers months before it was

implemented. This disclosure informed customers when

the Regulatory Fees were to begin, what they are going

to be used for, and in what amount it would be charged.

Sprint also has substantial defenses that its invoices

were and are not false or misleading in any way, and

that it fully and adequately disclosed all other challenged

practices, including the practice of rounding up minutes

to the next whole minute, limitations on the geographic

and other scope of its network and matters relating to

Coverage and Capacity Issues, including dropped and

blocked calls.

86a

Appendix F

34. When the Court balances the strengths of the

plaintiffs’ claim against the defenses of Sprint, the Court

finds that the outcome of the litigation would be far from

certain, costly, time consuming, extremely lengthy, and

expensive to both the plaintiffs and defendants. These

very real dangers that both the plaintiffs and Sprint

would face if this case were to go forward strongly

indicate that the value of this settlement is substantial

and brings real and immediate benefits to the settlement

class while they may well not get anything if the case

were to go forward or, if they did receive some benefits,

may well not receive anything until years into the future

after millions of dollars have been spent.

35. It is the surety of settlement that makes it a

favored policy in dispute resolution as compared to

unknown dangers and unforeseen hazards of litigation.

This is particularly the case when the value of the

benefits obtained for the majority of the Class Members

is or nearly equals their payments to Sprint.

2. The Benefits of the Settlement

36. The benefits of the settlement and the various

classes within the settlement relate to the relative

strengths and weakness of the legal claims of each class

and subclass.

37. Current and former customers both receive

substantial benefits from the settlement, including the

opportunity to obtain cash credits. Indeed, the benefits

provided in many cases meet or exceed the level of

damages that might be awarded to class members.

87a

Appendix F

38. The Court specifically finds that both current

and former Sprint subscribers receive substantial

benefits that are fair, reasonable and adequate.

39. In addition to the benefits mentioned above, this

Settlement Agreement adopts the prospective relief, on

a nationwide basis, contained in the aforementioned

Missouri Attorney General’s settlement that imposes

additional disclosure requirements in connection with

Sprint’s advertising and billing practices. The Missouri

Attorney General’s case alleged the same basic

allegations as this case at bar and was only brought after

this case was filed.

40. This Court therefore concludes that, comparing

the strength of the Plaintiffs’ case on the merits,

balanced against what is being offered in settlement,

favors final approval of the Settlement Agreement

because it is fair, reasonable, and adequate. Other

considerations also support this result.

I. Other Relevant Considerations Weigh in Favor

of Final Approval

1. The Number of Objectors is Small When

Compared to the Class as a Whole

41. Courts often consider the number of objectors

in determining whether the settlement is fair to the

entire class. See Reynolds v. National Football League,

584 F.2d 280, 287 (8th Cir. 1978).

88a

Appendix f

42. A court may consider whether the number of

objectors is large when compared to the class as a whole.

4 Newberg on Class Actions § 11:48 (4th ed. 2002). The

percentage of objectors in this case is minuscule. Only

approximately 103 out of the 42 million current and

former customers who were sent notice — representing

a miniscule percentage — have objected to the

settlement. Indeed, the number of Settlement Class

members opting out of the settlement - only 20,

compared to approximately 425,000 Settlement Class

members — is extremely small. These numbers are

strong indicators that the Settlement Agreement was

viewed as fair by an overwhelming majority of

Settlement Class members and weighs heavily in favor

of settlement.

J. The Complexity, Expense, and Likely Duration

of Litigation

43. The possible length and complexity of further

litigation is a relevant consideration to the trial court in

determining whether a class action settlement

agreement should be affirmed. This Settlement

Agreement also resolves numerous state court cases

currently pending around the country. If this Court were

to reject this Settlement Agreement, this single piece

of litigation would likely drag on for years, require the

expenditure of millions of dollars, all the while class

members would receive nothing. Sprint has numerous

and substantial legal and affirmative defenses that

would require full discovery, briefing and decision in the

multiple venues where cases are pending. In the absence

89a

Appendix F

of the Settlement Agreement, the parties also will need

to engage in further discovery and pre-trial work. Such

matters as class certification, expert discovery, and

summary judgment motions — to name a few — will have

to be litigated, followed by a trial and likely appeals, In

contrast to the delay and uncertainty attendant with

such litigation, the Settlement Agreement provides

substantial and immediate benefits. The Court

concludes this consideration weighs in favor of approval.

K. The Rest of the Objections as to the Fairness of

the Settlement are also Without Merit

44. A number of objectors make various objections

to the Settlement Agreement. This Court has considered

each of the objections properly made before this Court,

and concluded that they are without merit. Accordingly,

said objections are overruled.

45. The settlement as set forth in the Settlement

Agreement is approved as fair, reasonable and adequate.

Sprint is hereby directed to provide the settlement

benefits set forth in the Settlement Agreement within

the time provided therein.

L. Dismissal And Release

46. Sprint is hereby released and discharged from

any liability to each and every Benney Class Plaintiff

and Settlement Class members, with the sole exception

of those Settlement Class members who timely excluded

themselves from the class by filing a request for

90a

Appendix fk

exclusion by the deadline set by the Court, arising from

or relating to any and all claims that were or could have

been alleged in the Benney matter, including but not

limited to claims which relate in any way to allegations

that, on or before the Effective Date as defined in the

Settlement Agreement, Sprint failed properly to

disclose or otherwise improperly charped for

surcharges, regulatory fees or excise taxes, including

but not limited to the Regulatory Fees, as set forth in

Paragraph 22(a)(1) of the Settlement Agreement.

47. Sprint is hereby released and discharged from

any liability to each and every Lundberg Class Plaintiff

and Lundberg Settlement Class member, with the sole

exception of those Settlement Class members who timely

excluded themselves from the class by filing a request

for exclusion by the deadline set by the Court, arising

from or relating to any and all claims that were or could

have been alleged in the Lundberg matter, including but

not limited to claims that, on or before the Effective

Date, Sprint failed properly to disclose or otherwise

improperly charged for surcharges, regulatory fees or

excise taxes, including but not limited to the Regulatory

lees; for directory assistance calls; the practice of

rounding minutes up to the next whole minute; offered

service without properly disclosing limitations on the

coverage, capacity, and geographic scope of the Sprint

PCS wireless network (including, but not limited to, the

availability or claimed necessity for software upyrades

to phone handsets); Coverage and Capacity Issues;

dropped customer calls; or the failure to connect

customer calls, as set forth in Parayraph 22(a)(2) of the

Settlement Apreement.

Ola

fppendir A

48. The releases set forth in paragraphs 46 and 47

do not encompass claims alleyed in Garen Corbett and

Jeffrey Leamon v. Sprint Spectrum, LP, JAMS, JAMS

Reference No. 1220084325, as set forth in Exhibit A

attached or as amended for improper or illegal charging

of early termination fees,

44. Iexcept as deseribed in Paragraph 4%, Benney

and Lundberg Class Plaintiffs and members of the

settlement Classes who did not timely exclude

themselves from the classes by filing a request for

exclusion by the deadline, and the successors and

assigns of any of them, are hereby ordered to dismiss

any and all Claims (as defined in the Settlement

Agreement) currently pending against Sprint whether

in arbitration or court proceedings.

50. Accordingly, the Motion for I* inal Approval of

the Class Action Settlement is hereby GRANTED.

5). This Action is hereby DISMISSED WITH

PREJUDICK and without costs except as for attorneys’

fees and expenses as set forth below.

52. ‘This Court shall retain jurisdiction over this cause

Lo assure Implementation of the Settlement Apreement

and to resolve any issues that may arise with respect to

Lhe interpretation of the Settlement Avreement,

including: but not limited to the scope of the release

eontained therein as well as any issues involving the

decisions of the Claims Administrator

92a

Appendix F

M. Attorneys Fees and Expenses

53. The motion of Plaintiffs Tom Lundberg, Sandra

Barnes, Donella Brigman, and Lily Albaisa (the

“Lundberg Plaintiffs”) and Plaintiff Greg Benney (the

“Benney Plaintiffs”) for the award of attorneys fees and

expenses having been heard on September 12, 2006, the

Court having considered all pleadings and papers

submitted in support of and opposition to this motion

as well as the oral argument of counsel and evidence

presented at the hearing, and good cause appearing

therefore, it is hereby ordered that the motion is

GRANTED as follows:

54. As the Kansas Supreme Court recently held in

Johnson v. Westhoff Sand Co., 2006 Kan. LEXIS 358,

135 P3d 1 127 (Kan. 2006), under Kansas law the trial

court has very broad discretion as to the amount of

attorneys fees awarded:

While the awarding of attorney fees is

mandatory, the amount of such an award is

within the sound discretion of the district

court and will not be disturbed on appeal

absent a showing that the district court

abused that discretion. Link, Inc. v. City of

Hays, 268 Kan. 372, 381, 997 P2d 697 (2000).

Discretion is abused only where no reasonable

person would take the trial court’s view. State

ex rel. Stovall v. Alivio, 275 Kan. 169, 173, 61

Q3a

Appendix F

P3d 687 (2003). The burden is on the party

alleging the abuse. State v. Sanchez-Cazares,

276 Kan. 451, 454, 78 P3d 55 (2003).

2006 Kan. LEXIS 358 at * 18.

55. The district court is considered an expert on the

issue of attorney fees and “may apply its own knowledge

and professional experience in determining the value of

services rendered.” Jd. Johnson holds that the following

factors should be considered in determining reasonable

attorneys fees:

(1)

the time and labor required, the novelty and

difficulty of the questions involved, and the

skill requisite to perform the legal service

properly;

the likelihood, if apparent to the client, that

the acceptance of the particular employment

will preclude other employment by the lawyer;

the fee customarily charged in the locality for

similar legal services;

the amount involved and the results obtained:

the time limitations imposed by the client or

by the circumstances;

the nature and length of the professional

relationship with the client;

94a

Appendix F

(7) the experience, reputation, and ability of the

lawyer or lawyers performing the services;

and

8) whether the fee is fixed or contingent.

See 2006 Kan. LEXIS 353 at *20-*21.

56. Consideration of these factors supports the

award of attorneys fees of $5 million to Class counsel in

this case.

57. The Kansas Supreme Court first articulated the

factors to be considered in awarding attorneys fees in

class actions in Shutts v. Phillips Petroleum Co., 235

Kan. 195, 679 P2d 1159 (1984), aff'd in part, rev'd in

part 72 U.S. 797, 86 L. Ed. 2d 628, 105 S. Ct. 2965 (1985):

The amount of attorney fees awarded should be

within the sound discretion of the trial court based

upon guidelines established by this court. In 3B

Moore’s Federal Practice para. 23.91, the following

criteria are suggested to be considered by the trial

court in determining the size of attorney fees to be

awarded in a class action:

(1) the number of hours spent on the case by the

various attorneys and the manner in which they

were spent;

(2) the reasonable hourly rate for each attorney;

95a

Appendix F

(3) the contingent nature of success;

(4) the extent, if any, to which the quality of an

attorney's work mandates increasing or decreasing

[the] amount to which the court has found the

attorney reasonable entitled.

235 Kan. 195 at 223, 679 P2d at 1182.

58. Shutts held that in class action eases where

class counsels’ receipt of attorneys fees is contingent

on the successful resolution of the action a multiplier

enhancement to the lodestar is appropriate because (1)

the plaintiffs’ lawyer will not receive any compensation

until the lawsuit is concluded and then only if he has

been successful in securing a judgment for his clients,

(2) unless both of these conditions are met the attorney

will receive nothing for his efforts and will not be

reimbursed for his expenses, and (3) lawyers who actively

litigate class action cases largely depend on court

awarded fees for their economic survival. TA Wright &

Miller, Federal Practice.

59. Here, the declarations of Class Counsel establish

that together they devoted a total of 7,497 hours to these

?) &) ‘>

cases for a total lodestar of $2,383,968. The lodestar

includes 6404 attcrneys hours at rates ranging from $120

to $450 per hour and 1093 paralegal hours at rates

ranging from $50 to $120 per hour. The Court finds that

the number of hours spent by Class Counsel on these

cases is reasonable and that the hourly rates charged

by Class Counsel are within the range of rates charged

96a

Appendix F

by attorneys in the region for similar work. The

$5 million fee award represents a 2.1 multiplier on Class

Counsel’s lodestar which this Court finds to be

appropriate considering factors including the quality of

the attorneys work, the novelty and difficulty of the

issues, the complexity of the case, preclusion of other

work, the results achieved and the risks undertaken by

Class Counsel, including the risk that they would not

get paid at all if they failed to not achieve a successful

resolution.

60. The common fund approach also supports an

award of $5 million in attorneys fees See Gigot v. Cities

Service Oil Co., 241 Kan. 304, 737 P2d 18 (1987). Here,

the total value of the benefits made available to the Class

members exceeds $500 million and the $5 million fee

award represents less than 1% of that amount.

Accordingly, the Court finds the $5 million fee to be

reasonable in comparison to the overall value of the

benefits made available to the Class members. The Court

has considered all the objections that have been received

to the attorneys fee award and determined that none

have any merit.

61. The court also awards $416,124.80 to Class

Counsel for the expenses they reasonably incurred in

litigating these actions as set forth in Class Counsel’s

declarations.

Q7a

Appendix F

N. Service Awards to the Class Representative

62. The Court orders that each Class

Representative receive a service award of $10,000 to be

paid by Sprint in accordance with the Settlement

Agreement. “Because a named plaintiff is an essential

ingredient of any class action, a service award isn

appropriate inducement to an individual to participate

in the suit.” Cook v. Niedert, 142 F.3d 1004, 1016 (7th

Cir. 1998)(affirming $25,000 service award to class

representative in ERISA case). The service awards are

appropriate to compensate the Class Representatives

in this case for the time and effort they devoted to this

litigation.

ITIS SO ORDERED.

Date: s/ DANIEL A. DUNCAN

District Court Judge

Kansas City, Kansas

98a

{ppendix fF

Submitted By:

STINSON MORRISON HECKER LLP

s/ Mark D. Hinderks

Mark D. Hinderks

Daniel D. Crabtree

William E. Hanna

10975 Benson

12 Corporate Woods, Suite 550

Overland Park, KS 66210

(913) 451-8600

(913) 451-6352 (Facsimile)

ATTORNEYS FOR DEFENDANTS

SPEER LAW FIRM, PA.

By s/ Charles F. Speer

Charles F. Speer #11193

104 W. 9" Street, Suite 305

Kansas City, MO 64105

(816) 472-3560

(816) 421-2150 (Facsimile)

ATTORNEYS FOR PLAINTIFFS

99a

Appendix F

EXHIBIT “A”

Brian R. Strange, Cal. Bar No. 103252

Gretchen Carpenter, Cal. Bar No. 180525

Eugene Rome, Cal. Bar No. 232780

STRANGE & CARPENTER

12100 Wilshire Blvd., Suite 1900

Los Angeles, California 90025

Tel: (310) 207-5055

Fax: (310) 826-3210

barry L. Kramer, Cal. Bar No. 61772

LAW OFFICES OF BARRY L. KRAMER

11111 Santa Monica Blvd., Suite 1860

Los Angeles, California 90025-3352

Tel: (310) 235-9980

Fax: (310) 235-9982

Attorneys for Claimant

BEFORE JUDICIAL ARBITRATION

AND MEDIATION SERVICES

JAMS Reference No.

GAREN CORBETT and JEFFREY LEAMON,

individuals, on behalf of themselves and all others

similarly situated,

Claimants,

VS.

SPRINT SPECTRUM, L.P,

Respondent.

1QQa

Appendix F

CLASS ARBITRATION DEMAND FOR BREACH

OF CONTRACT AND UNFAIR, DECEPTIVE, OR

UNCONSCIONABLE ACTS OR PRACTICES

Claimants Garen Corbett and Jeffrey Leamon, on

behalf of themselves and all others similarly situated,

allege as follows:

I. CLASS REPRESENTATION ALLEGATIONS

A. NATURE OF THE ARBITRATION

1. This is a class arbitration by Claimants Garen

Corbett (“Corbett”) and Jeffrey Leamon (“Leamon”)

(collectively “Claimants”), on behalf of themselves and

all persons with billing addresses in the United States

of America who entered into cellular telephone service

contracts with Sprint Spectrum, L.P. (hereinafter,

“Respondent” or “Sprint”) and who incurred penalties

upon early termination of their contracts (or who

discontinued using the service but continued to incur

monthly charges during the remainder of the

contractual service commitment periods) after having

complained on more than one occasion to Respondent

about unsatisfactory service, where Respondent either

failed to investigate the complaint(s) or investigated the

complaint(s) and found a problem with the customer’s

service.

lOla

Appendix I

B. JURISDICTION

2. This Arbitration comes to Judicial Arbitration

and Mediation Services (“JAMS”) as a result of the

Circuit Court of the Nineteenth Judicial Circuit in and

for St. Lucie County, Florida, Civil Division’s granting

of Respondent’s Motion to Compe! Arbitration, due to

an Arbitration Clause in Respondent’s wireless service

customer contracts which provide for arbitration with

JAMS. (A true and correct copy of the Court’s Order

compelling arbitration is attached hereto as Exhibit A;

a true and correct copy of claimant Garen Corbett’s

wireless service contract is attached hereto as Exhibit

B; and a true and correct copy of claimant Jeffrey

Leamon’s wireless service contract is attached hereto

as Exhibit C.)

C. GENERAL ALLEGATIONS

3. This case involves Sprint’s practice of charging

penalties to its cellular telephone service customers who

terminate their contracts early due to dissatisfaction

with the quality of the service. The quality of cellular

service experienced is a matter over which the customer

has little or no control, and which lies almost entirely

within the service provider’s control. Furthermore, a

customer has no means of predicting whether the quality

of the service will improve, remain the same, or

deteriorate in the future.

1Q2a

Appendix |

4. Using incentives, promotions and other means,

Respondent encourages its customers to enter into

service commitments lasting one or more years. When

customers sign up for new service commitments, they

expect to find the quality of service reasonably

acceptable throughout the period of the contract, but

have no practical method of evaluating it before

becoming committed, or of knowing if it will deteriorate

during the commitment period.

5. Many of Respondent’s customers found the

quality of their cellular service to be unacceptable,

whether at the outset or at some subsequent time

during the commitment period, and complained on more

than one occasion to Respondent about the quality of

their cellular service. Their complaints included (but

were not limited to) such matters as gaps in the coverage

area, poor sound quality, dropped calls, difficulty in

making calls, missed incoming calls, and the unreliability

of Respondent’s ancillary services such as text

messaging, voicemail and data transmission. Despite the

inadequate service, these customers were charged early

termination penalties by Respondent, or were

compelled to continue paying monthly service charge:

in order to avoid such penalties when they discontinued

using Respondent’s cellular service during their

commitment periods

103a

Appendix I

D. CLASS ALLEGATIONS

6. Claimants bring this arbitration on behalf of

themselves and all others similarly situated, defined as

follows:

all persons with billing addresses in the

United States of America who entered into

cellular telephone service contracts with

Respondent and who incurred penalties upon

early termination of their contracts (or who

discontinued using the service but continued

to incur monthly charges during the

remainder of the contractual service

commitment periods), after having complained

on more than one occasion to Respondent

about unsatisfactory service, where

Respondent either failed to investigate the

complaint(s) or investigated the complaint(s)

and found a problem with the customer’s

service. (For purposes of this definition,

“complaints” include occasions when

customers cited dissatisfaction with the

quality of their service as a reason for

termination.)

104a

Appendix I

7. This arbitration has been brought and may

properly be maintained as a class arbitration satisfying

the numerosity, commonality, typicality, adequacy, and

superiority requirements, because:

a) Individual joinder of Class Members and

California subclass members would be impracticable.

Claimants are informed and believe and thereon allege

that the class consists of many thousands of persons.

b) Common questions of law and fact exist as to all

members of the Class that predominate over any

question that affects only individual Class Members

These common questions of law and fact include, without

limitation:

1) whether Respondent charged early termination

penalties to customers who complained of

unsatisfactory service and whose contracts were

terminated;

2) whether Respondent charged early termination

penalties to customers whose service quality

declined and whose contracts were terminated;

3) whether Respondent's customers were afforded

reasonable opportunities to evaluate the quality of

their service prior to entering into any

commitment;

A) whether Respondent’s contractual provision

repyarding carly termination penalties were unfair

or unconscionable;

1OSa

Ippe nai { /

5) whether Respondent had a policy of waiving the

early termination penalty when it failed to provide

a customer with satisfactory service;

6) whether Respondent monitors and maintain:

records pertaining to the quality of service it

provides in specific areas;

7) whether Respondent monitors and maintain

records pertaining to the quality of service

experienced by its customers;

%) whether Respondent maintains records of it

customers’ Complaints:

9) whether Respondent investipates its customer

complaints of unsatisfactory service;

10) whether Respondent maintains records of the

reasons yiven by its customers for terminating

their cellular telephone service;

11) whether Respondent is liable for breach of

contract for failing to provide acceptable service

and then assessing unwarranted early termination

penalties;

12) whether Clatmants and claimant ela

members suffered damayes in the form of

unwarranted early termination penalties as a

result of Respondent's actions:

106a

Appendix F

13) whether Claimants and claimant class members

suffered damages in the form of monthly charges

that they paid in order to avoid penalties for early

termination of a service that they had ceased to

utilize;

14) whether Claimants and claimant class members

suffered other damages as a result of Respondent’s

actions;

15) whether Respondent’s acts constituted unfair

or deceptive acts or practices; and

16) whether Respondent was unjustly enriched by

its business practices.

c) Claimants’ claims are typical of the claims of the

putative class because Claimants are persons who

entered into cellular telephone service contracts with

Respondent and who incurred penalties upon early

termination of their contracts, after having complained

on more than one occasion to Respondent about

unsatisfactory service, where Respondent either failed

to investigate their complaints or investigated their

complaints and found a problem with Claimants’ service.

d) Claimants are adequate representatives of the

claimant class because they share the same interest as

all claimant class members and because their claims and

losses are typical of those of the claimant class members.

Claimants have retained competent counsel who are

107a

Appendix F

experienced in class proceedings and who will fairly and

adequately protect the interests of claimant class

members.

e) A class arbitration is superior to other available

methods for the fair and efficient adjudication of this

controversy, since individual joinder of all persons who

had cellular service telephone contracts with

Respondent that were terminated in the circumstances

described herein would be impracticable. Most such

persons’ losses are modest in relation to the expense

and burden of individual prosecution of the claims

necessitated by the Respondent’s wrongful conduct. It

would be virtually impossible for claimant class members

to efficiently redress their wrongs individually. The

prosecution of separate claims by individual members

of the class would create a risk of inconsistent or varying

results concerning individual members of the class which

would establish incompatible standards of conduct for

Respondent, as well as create the potential for

inconsistent or contradictory awards. Individualized

arbitration would also magnify the delay and expense

to all parties. By contrast, the class arbitration device

presents far fewer management difficulties and provides

the benefit of comprehensive supervision by a single

arbitrator (or arbitrator panel), as well as economy of

scale and expense.

f) Respondent has acted or refused to act on

grounds generally applicable to all the members of the

class, thereby making final injunctive relief or

declaratory relief concerning the class as a whole

appropriate.

108a

Appendix F

FIRST CLAIM FOR RELIEF

FOR BREACH OF CONTRACT

(Asserted by Claimants, on behalf of all claimant

class members, against Respondent)

8. Claimants repeat, reiterate, and reallege each

and every allegation contained in the preceding

paragraphs.

9. Customers who enter into cellular telephone

service contracts have a reasonable expectation that

the service will be acceptable and that it will remain

acceptable during the period covered by the contract,

or at least that their complaints of unsatisfactory service

will be reasonably investigated and that they will be

permitted to cancel without penalty if the service is or

becomes inadequate. This is an implhed term of the

contract.

10. Respondent breached its contracts with class

members by failing to provide the level of service that

they reasonably expected, by failing to resolve their

complaints of unsatisfactory service, and by imposing

early termination penalties when they subsequently

terminated their contracts.

11. Asaresult of Respondent's failure to provide a

reasonably acceptable level of service, Claimants and

claimant class members discontinued use of

Respondent’s service prior to the end of their contract

periods.

109a

Appendix F

12. As aresult of Respondent’s aforesaid breaches

of contract, Claimants and claimant class members were

damaged by being charged early termination penalties

when their contracts were terminated, and/or by being

obliged to continue making monthly payments after

ceasing to use Kespondent’s service.

13. As a result of the above contractual breaches,

and each of them, Claimants are informed and believe

and thereon alleges that Respondent improperly

charged claimant class members millions of dollars in

excess charges, in an amount according to proof at trial.

SECOND CLAIM FOR RELIEF

FOR UNFAIR, DECEPTIVE, OR

UNCONSCIONABLE ACTS OR PRACTICES

(Asserted by Claimants on behalf of all claimant class

members, agairst Respondent)

14. Claimants repeat, reiterate, and reallege each

and every allegation contained in the preceding

paragraphs.

15. Claimants are informed and believe and thereon

allege that Respondent’s business practice of (1)

charging early termination penalties to customers who

complained on more than one occasion of unsatisfactory

service and whose contracts were terminated, and (2)

failing to investigate these complaints adequately, or at

all, is deceptive conduct which creates a likelihood of

confusion or misunderstanding, and therefore

110a

Appendix F

constitutes unfair, deceptive, or unconscionable acts or

practices.

16. As a result of Respondent’s aforesaid conduct,

Claimants and claimant class members were damaged

by being charged early termination penalties when their

contracts were terminated, and/or by being obliged to

continue making monthly payments after ceasing to use

Respondent’s service.

17. As a result of the above alleged acts and

practices, Claimants are informed and believe and

thereon allege that Respondent improperly charged

Claimants and claimant class members millions of dollars

in excess charges, in an amount according to proof at

the arbitration hearing.

18. Claimants are informed and believe and based

thereon allege that Respondent’s conduct was a willful

or knowing violation of law, and therefore, that enhanced

damages are appropriate.

19. Claimants and claimant class members are

entitled to equitable and injunctive relief, including an

order enjoining Respondent to desist from further

engaging in the practices described herein.

4 . } J

ip] < Nadi \ [

i i

‘ |

WHEREFORE, Claimants demand as follows

1. That this arbitration proceed as a class

arbitration;

2. That Claimants Garen Corbett and Jeffrey

Leamon be appointed as the class representatives;

3. That Strange & Carpenter and the Law Offic

of Barry L. Kramer be appointed as class counsel;

!. On all claims, for an award of damages in an

amount to be determined at the arbitration hearing, and

an award of prejudgment interest at the maximum rate

allowable by law;

» On the ser d elain r inijune e reli

t Oy n cond Clalm, for an award OI ennance

lamaves 1Nn anh amoul to Dé determined at LH

roitration nearin:

( oR costs oO] lt ineludit Dut ( Limite?

rneyvys tees: and

S. sl rand irl ej a [ iS! I

112a

Appendix |!

Dated: December 1, 2005

STRANGE & CARPENTER

s/ Gretchen Carpenter

SRIAN R. STRANGE

(JRETCHEN CARPENTER

“UGENE ROME

Attorneys for Claimants

l13a

APPENDIX G — PRELIMINARY OBJECTIONS OF

CLASS MEMBER TRENT ENGLAND TO THE

PROPOSED SETTLEMENT, ATTORNEYS’ FEES,

EXPENSES, AND COMPENSATION FOR CLASS

REPRESENTATIVES DATED JULY 12, 2006

IN THE DISTRICT COURT OF

WYANDOTTE COUNTY, KANSAS

TWENTY-NINTH JUDICIAL DISTRICT

Case No. 02CV-4551

Division No. 3

Chapter 60

TOM LUNDBERG, et al.,

Plaintiffs,

SPRINT CORPORATION, et al.,

Defendants.

11]4a

Appendix G

Case No. 05CV-1422

Division No. 3

Chapter 60

GREG BENNEY, et al.,

Plaintiffs,

SPRINT INTERNATIONAL

COMMUNICATIONS CORP, et al.,

Defendants.

PRELIMINARY OBJECTIONS OF CLASS

MEMBER TRENT ENGLAND TO THE

PROPOSED SETTLEMENT, ATTORNEYS’ FEES,

EXPENSES, AND COMPENSATION FOR

CLASS REPRESENTATIVES

Class member Trent England, 109 State Avenue,

Bremerton, WA 98337, hereby submits these

preliminary objections through his undersigned counsel

to the proposed settlement, attorneys’ fees, expenses,

and compensation payments in this class action case.!

1. A completed Claim Form signed by Mr. England, a

former Sprint wireless customer, 703-591-7047, has been timely

mailed to the Benney/Lundberg Settlement Administrator and

is attached hereto as Exhibit 1. Because he was Sprint customer

before May 31, 2003, Mr. England is a member of both the benney

Subclass 3 and Lundberg Subclass 3.

115a

Appendix G

Mr. England also reserves his right (1) to file additional

and supplemental objections following the submission

of the yet-to-be-filed motion by tne parties to approve

the settlement and the class counsel’s application for

attorneys’ fees, expenses, and compensation payments

for lead plaintiffs, and (2) to appear at the Fairness

Hearing currently scheduled for September 12, 2006.

INTRODUCTION

According to the proposed Class Action Settlement

Agreement, these consolidated class actions were filed

by Class Plaintiffs on behalf of class members who are

current and former wireless Sprint customers against

Defendants Sprint Corporation and related Sprint

companies or affiliates (“Sprint”). The Benney class

Plaintiffs allege that Sprint unlawfully charged for, and

was unjustly enriched by, certain Regulatory Fees and

also hid a “rate increase” in customers’ monthly billing

statements. The Lundberg class plaintiffs allege, inter

alia, that Sprint unlawfully charged for directory

assistance, failed to disclose that Sprint rounded

minutes up to the next whole minute, and failed to

disclose limitations of the coverage and capability of the

service. Plaintiffs allege that Sprint is liable for

unspecified compensatory, statutory, and related

damages, punitive damages, and attorneys’ fees and

costs under various statutory and common law theories.

Sprint denies all claims and liabilities.

The parties have decided to settle these cases

whereby class members who do not opt out may file a

ll6a

Appendix G

claim to receive either certain invoice credits to their

Sprint wireless accounts ranging from $5.00 to $19.00,

depending upon which Benney or Lundberg subclass

they belong to and whether they elect an immediate

credit or one spread out over a two-year period, or a

Sprint long distance calling card in the face amount that

ranges from $2.50 to $14.00, depending upon which

subclass(es) they belong to. However, in order to claim

an invoice credit to a customer’s account, a class

member must either continue to be a customer for at

least two more years for a series of eight quarterly

invoice credits, or agree to sign up for a two-year

contract for Sprint wireless service to claim the

immediate one-time credit.

In return for settling for noncash benefits of nominal

and questionable value, class counsel] will petition this

Court to approve an aggregate of $5 million in attorneys’

fees and up to $500,000 in costs ($4 million in fees for

class counsel in the Benney action and $250,000 in costs,

and $1 million in fees for the Lundberg action and

$250,000 in costs). In addition, class counsel are seeking

compensation of $10,000 for each of the five lead

plaintiffs in these cases. The parties have agreed that

100 percent of the costs and 80 percent of the fee:

requested must be paid within 10 days after the court’s

Final Order approving this settlement becomes a fina!

judgment, and that the remaining 20 percent of the fee

be paid after Class Counsel has verified the delivery of

117a

Appendi x G

the benefits to the class. Settlement Ayreement,

Il 13(a), 13(b).?

Sprint has agreed not to object to these fees,

expenses, and compensation, even though they may be

determined to be excessive inasmuch as class counsel

have yet to submit an application with supporting

documentation justifying their fees and expenses, and

it is not yet known how many class members have filed

claims or the aggregate value of the noncash benefits

that will be awarded to them. In short, it appears that

class counsel have “sandbagged” objecting class

members by requiring them to file objections before all

the relevant information has been provided, thereby

precluding them from making fully informed objections.

2. Although compensation for the class representatives of

$10,000 is listed in the heading of 9 13(a) and 13(b) of the

settlement Agreement as a separate and distinct item from

attorneys’ fees and expenses, there is no provision as to when

such compensation is to be paid. Objector England assume:

that class counsel probably intended class compensation to be

treated the same as their expenses, and thus, compensation to

lead plaintiffs Gf any is awarded) would be paid within 10 day:

after final judgment

H CLASS COUNSEL HAVE YET TO

DEMONSTRATE THAT THE SETTLEMENT

IS FAIR, ADEQUATE, AND REASONABLE

In order to protect the night Of] absent cla

members, “the court must assume a more active rol

than it typically plays in traditional litigation.” /psteimn

Vv. MCA, 50 F.3d 644, 667 (9th Cir. 1995) (emphasis added)

ven though, as a general proposition, settlements ar

viewed with favor, public policy requires that courts are

not to give a “rubber-stamp” approval in class action

and are not to rely merely on “the arguments and

recommendations of counsel.” /n re Matzo Food

Products Litig., 156 F.R.D. 600, 604 (DNL. 1994). In ri

Isrooktree Sec. Latig., 915 | supp. 193, 196 (S.D. Cal

1966) (“The court is in the position of a fiduciary witl

respect to the cla members, who are essentiallh

unrepresented’ ). Rather, courts are to determing

whether the interests of the cla “as a Whole are better

' ’

erved D\ the proposed ett ment

fhe burden is on the proponents to demonstrate

that the settlement ts far adeq mute, und reusonabl

Holmes v. Continental Can Co., 706 k-2d 1144, 1147 (1th

Cir. 1983). In determining whether the cla ettlement

is fair, Kansas courts generally apply the following

actors: (1) whether the propo ed settlement was tairl|

and honestly neyotiated; (2) whether questions of law

ind fact exist, placing the ultimate outcome of the

litigation in doubt; (3) whether the value of an immediat

recovery outweiphs the mere possibility of future relief

iter protracted and expen imiyatlion nad (4) Une

119%

Ippendix G

judgment of the parties that the settlement is fair and

reasonable. Sce Williams Foods, Ine. vo. Kastonan Chem

Co, 2001 WL 1298887 (Kan. Dist. Ct. Aug. &, 2001) (citing

Jones v. Nuclear Pharmacy, [ne., Tal k2d 822, 824 0th

(Cir. 1984)).

A. Class Counsel Have Not Provided Class

Members or the Court with Sufficient

Information ‘To Determine — the

Settlement Value of this Case.

The proposed Settlement Agreement provides very

little information to class members and the Court upon

Which to evaluate the adequacy, fairness, and

reasonableness of the settlement. As noted, the

Settlement Agreement states that the lawsuits raise

substantial claims for fraud and unjust enrichment

under various statutory and common law prounds, and

that the defendants deny the allegations. Yet all we have

is Class counsels’ self-serving and unadorned conclusion

that “this Settlement Ayvreement is fair, reasonable,

adequate, and in the best interests of their respective

Class Plaintiffs and the members of the respective

settlement Classes. Settlement Avreement, p. 6. While

an award of $10,000 in cush to each of the five lead Clas:

Plaintiffs would certainly be in therr best interests, the

same cannot be said for the proposed meayer noncash

Invoice credits and phone cards for absent clas:

members,

(Class counsel claim this settlement is in the best

interests of the class bused Upon “an independent

120a

Appendix G

assessment of the merits of the respective cases and

the likelihood of success at trial.” Settlement

Agreement, #1 5 at 18. Who conducted this

“independent” assessment and what is the likelihood of

success at trial? Is class counsel referring to the

mediator in this case? If class counsel hired an outside

expert to make this assessment, that fact should be

disclosed to class members and the court. If they have

not hired an outside expert, perhaps they should.’ At a

minimum, if class counsel refuses to explain with more

specificity in their forthcoming motions what they

believe is the likelihood of prevailing on the merits and

the amount of expected damages, the court should elicit

this basic information from counsel at the Final

Settlement hearing. For example, in Williams Foods,

the court was able to gauge whether the proposed

settlement was fair, adequate, and reasonable by

comparing it to results achieved in other similar cases.

William Foods, Inc., 2001 WL 1298887 at *4. In doing

so, the Kansas District Court court concluded:

3. For example, 7 Azizian v. Federated Dep't Stores, No.

4:03-CV-03359 SBA (N.D. Cal. 2005) (unreported), class counsel

hired an expert in an antitrust consumer class action case who

determined that the likelihood of prevailing at trial on lability

was only seven (7) percent, and used that figure to justify the

settlement in that case. Presumably. the settlement value of

that case was determined by multiplying seven percent times

the expected damages that likely would have been awarded at

trial. While not an exact science, at least this methodology

provides class members and the court with an idea of the ball

park settlement value of the case.

I2la

Appendix G

The monetary value of this Settlement...

exceeds the recoveries by indirect purchasers

of sorbates in other state and federal actions.

This is a very good recovery and, as stated

above, is at the high end of settlements in

antitrust cases brought on behalf of indirect

and direct sorbates purchasers in other states.

/d. (emphasis added). Class counsel must provide

substantially more information to class members and

the court upon which to assess the fairness, adequacy.

and reasonableness of the settlement.

Furthermore, class members in the instant case

receive no benefit unless they complete and mail a claim

form by July 12, 2006. Objector England and most other

class members were notified by posteard that they were

members of the class. Certainly, Sprint has a listing of

the names and addresses of their current and former

customers, and presumably, that information was used

to mail the posteard notice to class members. Because

it was relatively easy to mail the notification to class

members, it would be just as easy to mail to all the class

members who choose not to opt out a phone eard in an

amount that corresponds to their subclass (or a phone

eard of a single-determined value for all class members)

even if no claim form were submitted. In other words,

the notice could have simply stated that if a class member

does not make an election of benefits for either the

invoice eredits or prepaid phone ecard by July 12, 2006,

that class member will automatically receive a prepaid

phone card. Class members are certainly entitled to

}2?9q

Appendix G

some compensation in the form of invoice credits or

prepaid phone ecards; accordingly, one could assume that

if they misplaced the form, forgot about it, thought that

time and expense of completing and mailing the form

were not worth it, or were confused or misled by the

claim procedure and filing date,‘ then a “default” benefit

of a phone card would at least be something of value

and would constitute a benefit they were otherwise

entitled to receive.”

4. For example, the postcard Notice sent to class members

specified that objections may be filed “on or before July 12,

2006 about fairness of this settlement.” However, on the

separate heading and line entitled “How can I receive the

settlement benefits?”, the Notice simply states “You must

submit a Claim Form to get settlement benefits.” Although the

Notice easily could have and should have listed July 12, 2006 as

the deadline date on that line as it did for the time for filing

objections, it did not, leaving a casual reader to believe there

was no hard cutoff date for submitting a claim. See Exhibit 1.

Perhaps that was the intended result.

5. Alternatively, a conditional cy pres benefit could have

been easily established as it is in many other consumer class

action cases. Prepaid phone ecards worth a specified aggregate

dollar amount could be distributed to eharities, the value of

which would be inversely proportional to the number of eligible

class members who submitted claim forms and the aggregate

value of those benefits claimed.

23a

Appendix G

B. The Phone Card Benefit Is of Questionable

Value To Class Members

Because Objector England is a former Sprint

subscriber and does not wish to sign up for a new two-

year contract with Sprint, the only benefit available to

him is a Sprint prepaid phone card. As a subclass

member of both the Benney and Lundberg cases, he is

entitled to receive a phone card in the amount of $14.00

for the Benney class action, and another worth $3.00 as

for the Lundberg class action. The phone eards are valid

for two years. These prepaid phone cards are thus

analogous to coupons of questionable value that are

often awarded in other consumer class action cases. In

that regard, the true value of these phone card

“coupons” should not be based upon the face value of

the coupons claimed, but instead on the amount that

are redeemed or actually used by the end of the

redemption period, which in this case is two years.

In the first place, the value of phone cards to

Objector England and other former subscribers is

dubious inasmuch as they subseribe to other wireless

services that provide sufficient minutes for their long

distance calling needs. If they exceed those minutes,

the Sprint phone cards are of no value since they cannot

be used in conjunction with other wireless services.

Rather, they can be used by Objector England and other

similarly situated class members only if they use a pay

phone or a non-wireless phone where they would

otherwise be subject to long-distance calling fees.

124a

Appendix G

In addition to the doubtful benefit of the phone card

to Objector England, there is no way to assess the true

economie value of the card unless class members are

informed as to what the charge is per minute of usage.

Thus, a prepaid $14 phone card that charges ten cents

per minute of usage is worth only half as much as a $14

phone card that charges five cents per minute. The

Settlement Agreement does not disclose the per minute

charge for using the phone card. The market for long

distance prepaid phone cards is very competitive. Per

minute charges by various carriers can range from

approximately 2.5 cents to 20 cents per minute. Indeed,

even within the family of Sprint-sponsored prepaid

cards, charges vary considerably. For example, a Sprint/

K-Mart flat rate prepaid phone card charges no more

than $0.06 per minute; a Sprint/CVS Pharmacy prepaid

phone ecard charges no more than $0.09 per minute; and

an unaffiliated Sprint prepaid phone card charges up

to $0.18 per minute. See Exhibit 2. Thus, a Sprint/

K-Mart card is worth three times that of a Sprint card,

and a Sprint/CVS card is worth twice as much.° If the

6. According to the various Sprint prepaid plans provided

in Exhibit 2, it should be noted that using the prepaid phone

eard from a pay telephone triggers a $1.25 surcharge, and that

partial minutes are rounded up to the next whole minute. Thus,

a long distance call lasting 61 seconds will be charged as a two-

minute eall. Ironically, the Lundberg class action is based in

part on the failure of Sprint to fully disclose to its customers

that it rounds up partial minutes to the next whole minute, and

yet class counsel has failed to disclose this feature of the phone

eard benefit to class members, as well as the actual cost per

minute, thereby making it more difficult for class members to

properly evaluate their option of choosing the prepaid phone

ecard or invoice credits as compensation.

125a

Appendix G

Court approves the settlement that inciudes the

distribution of prepaid phone cards, the charge per

minute should be the lowest rate per minute that Sprint

has to offer.

Il. THE ATTORNEYS’ FEES SHOULD BE

LIMITED TO NO MORE THAN THE

LODESTAR OR 25% OF THE VALUE OF

THE BENEFITS CLAIMED, WHICHEVER

IS LESS.

The Kansas Supreme Court has explained that even

if there are no objections to the fees and expenses

requested, the Court must scrutinize the reasonableness

of the request because “it is the responsibility of the

court to determine the award to assure that the amount

awarded is reasonable.” Shutts v. Phillips Petroleum

Co., 235 Kan. 195, 228 (1984). See Skelton v. General

Motors Corp., 860 F.2d 250, 253 (7th Cir. 1988) (“Lt]he

court becomes fiduciary for the fund’s beneficiaries and

must carefully monitor disbursement to the attorneys

by serutinizing the fee applications.”).

The court’s examination of attorneys’ fees “guards

against the public perception that attorneys exploit the

class action device to obtain large fees at the expense of

the class.” Strong v. BellSouth Telecommunications,

Inc., 137 F.3d 844 (5th Cir. 1998); see also In re General

Motors Corp. Pick-Up Truck Fuel Tank Products Liab.

Litig., 55 F.3d 768, 820 (3d Cir. 1995). Careful judicial

scrutiny is required even where the fees and expenses

are to be paid by the defendants rather than from a

126a

Appendix G

common fund, and where, as here, the defendants have

agreed not to oppose the fee request — a situation often

described as a “clear sailing” agreement or “red carpet”

treatment of the fee request. That is true because there

is a divergence in financial incentives whenever lawyers

are faced with an opportunity to urge “a class settlement

at a low figure or on less-than-optimal basis in exchange

for red-carpet treatment of fees.”” Weinberger v. Great

N. Nekoosa Corp., 952 F.2d 518, 524 (1st Cir. 1991). See

also Prandini v. National Tea Co., 557 F.2d 1015, 1020

(3d Cir. 1977) (when fees are paid separately by

defendant, “the conflict between client and attorney may

not be as apparent [but] it is often present

nonetheless.”). This is especially true where, as here,

class members are to receive only noncash benefits, while

the attorneys and the lead plaintiffs request substantial

payments in cash, not phone cards.’

7. The publie’s disdain for the award of multi-million dollar

attorney fees to class counsel for settling class action cases with

coupons and noneash awards is also reflected in remedial

federal and state legislation. For example, Texas law provides

that “in a class action, if any portion of the benefits recovered

for the class are in the form of coupons or other noneash common

benefits, the attorney’s fees awarded in the action must be in

cash and noncash amounts in the same proportion as the

recovery for the class.” Tex. Civ.Prac. & Rem. Code § 26.0038

(2004). At the federal level, Congress, recognizing the abuses

inherent in class action lawsuits, recently enacted the Class

Action Fairness Act (“CAFA”), 28 U.S.C. § 1711, et seg. CAFA

mandates that “the portion of any attorneys’ fee award to class

counsel that is attributable to the award of coupons shall be

bused on the value to cluss members of the coupons that are

(Cont'd)

127a

Appendix G

Because there is no common ecash fund in this case,

the award of attorneys’ fees must be based upon the

lodestar method. Gigot v. Cities Services Oil Co., 241

Kan. 304, 317 (1987).° The lodestar is determined by

multiplying the number of hours reasonably spent on

the litigation times the reasonably hourly rate of

counsel. The yet-to-be filed fee application will no doubt

list the total hours expended by class counsel in this

case, but it is the duty of the court to “subtract from

that figure hours which were duplicative, unproductive,

excessive, or otherwise unnecessary.” Lipsett v. Blanco,

975 F.2d 934, 937 (1st Cir. 1992). See also Shutts v.

Phillips Petroleum Co., 235 Kan. at 223 (class counsel

should “produce detailed time records indicating time

expended by each lawyer and the nature of work done

by each to allow the court to determine, among other

things, the necessity for and quality of the work done.”).

(Cont’d)

redeemed.” 28 U.S.C. § 1712(a) (emphasis added). While neither

Texas nor federal law is controlling in this case, this Court should

nevertheless be mindful of the underlying rationale of these

statutes in determining a reasonable fee award.

8. See also Manual for Complex Litigation, § 2.71 at 337

Gf the benefit to the class is so speculative, courts “will use the

lodestar method rather than the common-fund method to

determine the amount of fees to which the attorneys are

entitled.”); see also Dunk v. Ford Motor Company, 48 Cal. App.

4th 1794, 1809-10 (1996) (a coupon settlement is “not the type

of settlement that lends itself to the common fund approach;

rather, the percentage method should be used, if at all, when

the common fund is “certain or an easily calculable sum of

money’).

128a

Appendix G

The Court should defer awarding any attorneys’ fee

until it has determined how many class members

participate in the settlement and the value of the payouts

to class members. Numerous courts have supported this

procedure in the awarding of reasonable attorneys’ fees

in class actions:

The relevant inquiry . . . focuses a court’s

attention on the benefits actually received

and caused by plaintiffs, [and] will determine

not only the often evident threshold question

of eligibility for fees, but it will also be critical

in determining the amount of a reasonable fee

award, in that the final award must depend

on a full assessment of the extent of the

benefits received by plaintiffs.

In re Prudential Ins. Co. America Sales Practice Litig.,

148 F.3d 283 n.116 (3d Cir. 1998) (emphasis added).

See also Goodrich v. H.F. Hutton Group, Tne.

(Del. Supr.), 681 A.2d 1039, 1049 (1996) (“By conditioning

the award of attorney’s fees upon the claims actually

submitted, the Court of Chancery exercised its

discretion equitably, to correlate the attorneys’

compensation with the structure of the settlement

benefits the attorney had negotiated for the class.”);

Wise v. Popoff 835 F. Supp. 977, 981 (&.D. Mich. 1993)

(“[OJne should nevertheless ask whether a rule of law

that would hold that there is an entitlement, on the part

of class counsel, to a legal fee fixed in relation to a

maximum available fund rather than benefits actually

realized by class members, would be a desirable general

129a

Appendix G

rule. ...In my opinion, the answer is certainly no.”)

(emphasis added). As one commentator explained,

“The application, briefing and hearing on the fee

request should not take place until after all claims are

filed, and the judge should be required to take into

account the actual benefit conferred on the class (as

demonstrated by the claims made)... .” Janet Cooper

Alexander, Contingent Fees in Class Actions, 47 DePAuL

L. Rev. 347, 360 (1998) (emphasis added).

In /n re Hacess Value Insurance Coverage Litig.,

No. M-21-84, MDL-13839 (S.D.N.Y. Nov. 2, 2005), a class

action was settled by United Parcel Service, Inc.,

(“UPS”), and related defendants with consumers who

purchased “excess value” shipping insurance offered by

UPS. A major portion of the settlement consisted of

coupon vouchers to the individual class members.

Plaintiffs moved for an award of attorneys’ fees and

expenses in the amount of $19.3 million. Class counsel]

predicted that the aggregate face value of the coupon

voucher program would be between $205 to $265 million.

Based upon this projection, the attorneys’ fees

requested by plaintiffs’ counsel would represent less

than 10% of the value of the settlement. At the close of

the coupon redemption period, however, the value of

goods and services for which the vouchers were

redeemed totaled only $4.8 million which was only 2.4%

of plaintiffs’ original estimate of voucher redemptions.

The district court ultimately awarded a fee of $2.4 million

to class counsel in the UPS case; that figure was 30

percent of the total settlement value of the case, and

was well below the lodestar request of $7 million.

130a

Appendix G

Objector England submits that as a cross-check to the

lodestar fee, the fee award in this case should be limited

to the lodestar or 25 percent of the total value of the

noncash benefits claimed by class members in this case,

whichever is less.

If the Court decides not follow the lead of court in

the UPS case and similar cases by delaying the award

of fees until the noncash benefits have been realized,

Objector England submits that the Court should

withhold 50 percent of the fee, rather than just 20

percent as proposed, until class counse! has verified

delivery of the benefits to the class. See Van Vranken v.

Atlantic Richfield Co., 901 F. Supp. 294, 300 (N.D. Cal.

1995) (class counsel paid half of fees awarded at

settlement and the remaining half after claims process

is completed).

Iii. Payment of Costs and Expenses Should Be

Carefully Scrutinized

The Settlement Agreement states that the Benney

and Lundberg class counsel will apply for up to $250,000

each, for an aggregate of $500,000 in expenses

However, there is no information in the notice or

settlement agreement with which to evaluate the

legitimacy of these expenses. Objectors cannot fully

comment on class counsel’s request for costs and

expenses unless that information is provided to class

members. While class counse! certainly possesses this

information, it has intentionally delayed providing it to

class members until well after the time set to file and

submit objections to the court.

I3la

Appendix G

Nevertheless, this Court has an obligation to

determine that the expenses are moderate and not

“unnecessary or extravagant.” /n re Armored Car

Antitrust Litig., 472 F. Supp. 1357, 1389 (N.D. Ga. 1979).

The Court should not award any costs until it has

“appropriate supporting documentation” from class

counsel. Hdelman v. PSI Assocs., Inc., 147 F-R.D. 217,

223 (C.D. Cal. 1993). Such documentation should be

specific and detailed, including the dates the costs were

incurred.

IV. The Proposed $10,000 Compensation Payments

to Each of the Representative Plaintiffs

Should Be Denied or Substantially Reduced

The Settlement Agreement provides that class

counsel may apply to the Court for an award of

“compensation to the Benney Class Representatives in

an amount not exceed $10,000 for each of the Benney

Class Representatives.” Settlement Agreement, {] 13(a).

The settlement similarly provides that class counsel will

seek up to $10,000 in compensation for each of the

Lundberg Class Representatives. /d. 1 13(b). There are

a total of five Class Representatives in these

consolidated cases: Tom Lundberg, Sandra Barnes,

Donella Brigman, Lily Albaisa and Greg Benney. See

Settlement Agreement, 4 1.4(d). Thus, the aggregate

amount that will be requested for compensation is

$50,000. Inasmuch us no such application has been made,

neither the Court nor any of the Objectors can

meaningfully assess the merits of any such application.

Accordingly, Objector England hereby opposes the

’

payment ol any such Compensation and reserve

rivnt Lo upplement n) QOVDPOSILION a PT ANDDIICALIO!

the payments are mad

In cla actions, Compensation or incentive payment

for cla repre entatives are sometime requested and

approved by the court depending upon tne factual

circumstances of each case to determine whethe

payments are even warranted, and if so, the amount that

is appropriate. In many cases, class representatives do

little if anything to help the entire class other than lend

their name as a ¢la representative vo the plaintill

attorne In addition, court huve been caretul te

examine the request and the efforts expended by thi

da representative hor example, in /m re Carbon

Diorvide Antitrust Litigation, 1996 | Dist. LEAL

13418 (M.D.1Ie1,), the Court rejected a request fo)

neent T) ! nit mr oul representat

tif ‘ ‘ tP.CPURt) hy |

represenvablve no parblicipavled

covery und $5.000 euch for the remainit

repre nvative re amed plainly

thier ay Poyrig 1 | eounse ay Ti

rd co ce t ourt that

ppropriat ha)

fg j j ;

/ 4 ;

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