# Appendix — Sprint Spectrum, L.P. v. Hesse > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2327%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2010 - **Citation:** 562 U.S. 1003 ## Text 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 ~ ( yN 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 ] T> e)} at 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 ° . ] law r usage in the ¢ I Ol h stat r } | ~ 7 { DQ | ~ | 7 ~ f 367, 373, 116 S. Ct. 873, 1384 L. Ed. 2d 6 (1996). But a see Matsushita Elec. Indus. Co. v. Epstein, 516 oR. j 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 t 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 f 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 it be improper for different re Iespecially relevant rminatior identical factual predicat the M3 (Like 1K) 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 y Linder Kansas law, a frit mber Chambre rie App ZU06 not Nwureau LOS]. LOS Missourl, Benne) Washington Plaintifl »\ irOorou 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 DISTRICT COURT FOR THE WESTERN DISTRI Ol WASHINGTON ATSEATTLI! DATED APEKIEL 1b, 200% UNITED STATES DISTRICT COL ta ESTERN DISTRICT OF WASHINGTO AT SEATTLI and Ve fendant S prlel Dkt. Ni £02 I, VM nic! was requested by the Court, together with relevant portions of the record, and ae Pe ee motion, as follows. I. BACKGROUND 1 ’ 7 thie »+ taf in LIIis t qT} 11iS \ LON, nerepy ENIES Plai hristopher Hes ~+itf hid an cahi 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 Ls Februar) Were barred by implementing order issued 1 In an Order issu ed on ind that these claims the settiement Te 2, ] 4 benneu osettiement Agreeme 1 yay _ aia lL, oy 4 1) 7 oe tS (,ourt ordered that it} | ialNUUIS Dkt. No. 188 D] +> +344 I alntiitS I rec > + ] argulng Tirst, tnat re nsiaeratl ass repre r if + t oth Y\ Wa \ i ] | oY ? } i | BL) ’ ~ \ is ( ) “‘s & Ti t > Cc, On ~ SS ( ( Se f ? sé] 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 1 ? 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 a {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 7 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) ee 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 a 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 PA we on ~~ 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. de 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. (c) The Court reserves the right to adjourn the date 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, V. 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 | } | Torry meti' MOM) iQ! i ( Lil r ] } ; rye?) LLiemen}! } ( f 1} Py ¢ qf enefit IPO! f ‘ ry) if ar ’ , > " 4 / ) ree. ‘ | 7a 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 penal [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2327%3A2. Public record. Not legal advice.