Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 1 of 29 PageID #: 10825
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`
`
`Hon. Sterling Johnson, Jr.
`
`15-cv-07381 (SJ) (LB)
`
`
`CHAIM LERMAN, ROSLYN WILLIAMS,
`and JAMES VORRASI, individually and on
`behalf of others similarly situated,
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`
`
`APPLE INC.,
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`
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`
`
`
`Plaintiffs,
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`
`
`v.
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`
`
`Defendant.
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`
`
`MEMORANDUM OF LAW IN SUPPORT OF
`PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY
`APPROVAL OF CLASS ACTION SETTLEMENT
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 2 of 29 PageID #: 10826
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`
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`I.
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`II.
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`TABLE OF CONTENTS
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`INTRODUCTION .............................................................................................................. 1
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`BACKGROUND ................................................................................................................ 3
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`A.
`
`B.
`
`Summary of the Litigation. ..................................................................................... 3
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`Settlement Negotiations and Mediation .................................................................. 4
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`III.
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`SUMMARY OF THE SETTLEMENT .............................................................................. 4
`
`A.
`
`B.
`
`The Settlement Class............................................................................................... 4
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`The Settlement Consideration and Release of Claims, Anticipated Class
`Recovery, and Potential Class Recovery ................................................................ 5
`
`C.
`
`Notice to the Settlement Class ................................................................................ 6
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`IV. ARGUMENT ...................................................................................................................... 8
`
`A.
`
`B.
`
`C.
`
`Conditional Class Certification of the Settlement Class is Warranted ................... 8
`
`The Court Should Preliminarily Approve the Settlement ....................................... 8
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`The Proposed Settlement Meets the Requirements of Rule 23(e)(2) ................... 11
`
`1.
`
`2.
`
`3.
`
`4.
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`Plaintiffs and Class Counsel Have Adequately
` Represented the Class .............................................................................. 11
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`The Settlement was Reached After Arm’s Length
`Negotiations and Private Mediation.......................................................... 13
`
`The Substantial Monetary Relief Provided for the
` Settlement Class is Adequate ................................................................... 14
`
`The Settlement Treats Class Members Equitably
`Relative to Each Other .............................................................................. 15
`
`D.
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`The Proposed Settlement Also Satisfies the Grinnell Factors .............................. 16
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
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`The Complexity, Expense, and Likely Duration of
`Litigation (Grinnell Factor No. 1) ............................................................. 16
`
`The Stage of the Proceedings and the Amount of
` Discovery Completed (Grinnell Factor No. 3) ........................................ 17
`
`The Risks of Establishing Liability, Damages and
` Maintaining the Class Action through Trial
`(Grinnell Factors Nos. 4, 5 and 6)............................................................. 18
`
`The Ability of the Defendant to Withstand a Greater
`Judgment (Grinnell Factor No. 7) ............................................................. 19
`
`The Range of Reasonableness of the Settlement Fund
`in Light of the Best Possible Recovery and in
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`i
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 3 of 29 PageID #: 10827
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`V.
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`Light of the Attendant Risks of Litigation
`(Grinnell Factor Nos. 8 and 9) .................................................................. 19
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`THIS COURT SHOULD APPOINT THE SETTLEMENT
` ADMINISTRATOR AGREED UPON BY THE PARTIES
`AND APPROVE THE PROPOSED NOTICE PLAN ..................................................... 21
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`VI.
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`CONCLUSION ................................................................................................................. 23
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`ii
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 4 of 29 PageID #: 10828
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`
`
`Cases
`
`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Amchem Prods., Inc. v. Windsor,
`521 U.S. 591 (1997) ...................................................................................................................5
`
`Banyai v. Mazur,
`2007 WL 927583 (S.D.N.Y. Mar. 27. 2007) ...........................................................................15
`
`Charron v. Wiener,
`731 F.3d 241 (2d Cir. 2013).......................................................................................................7
`
`Chen v. XpresSpa at Terminal 4 JFK LLC,
`2021 WL 4487835 (E.D.N.Y. Oct. 1, 2021) ..............................................................................7
`
`Chin v. RCN Corp.,
`2010 WL 1257586 (S.D.N.Y. Mar. 12, 2010) ...........................................................................5
`
`City of Detroit v. Grinnell Corp.,
`495 F.2d 448 (2d Cir. 1974)............................................................................................. passim
`
`Denney v. Deutsche Bank AG,
`443 F.3d 253 (2d Cir. 2006).......................................................................................................5
`
`Dupler v. Costco Wholesale Corp.,
`705 F. Supp. 2d 231 (E.D.N.Y. 2010) .....................................................................................13
`
`Elkind v. Revlon Consumer Prod. Corp.,
`2017 WL 9480894 (E.D.N.Y. Mar. 9, 2017) ...........................................................................10
`
`Frank v. Eastman Kodak Co.,
`228 F.R.D. 174 (W.D.N.Y. 2005) ..............................................................................................6
`
`Guevoura Fund Ltd. v. Sillerman,
`2019 WL 6889901 (S.D.N.Y. Dec. 18, 2019) ...........................................................................6
`
`Handschu v. Special Services Div.,
`787 F.2d 828 (2d Cir. 1986).....................................................................................................18
`
`In re Austrian & German Bank Holocaust Litig.,
`80 F. Supp. 2d 164 (S.D.N.Y. 2000)........................................................................................14
`
`In re Comverse Tech., Inc. Sec. Litig.,
`2010 WL 2653354 (E.D.N.Y. June 24, 2010) .........................................................................10
`
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`iii
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 5 of 29 PageID #: 10829
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`
`
`In re Global Crossing Sec. and ERISA Litig.,
`225 F.R.D. 436 (S.D.N.Y. 2004) ...............................................................................................8
`
`In re Grana y Montero S.A.A. Sec. Litig.,
`2021 WL 4173684 (E.D.N.Y. Aug. 13, 2021) ...........................................................................7
`
`In re Lehman Bros. Sec. & ERISA Litig.,
`2012 WL 1920543 (S.D.N.Y. May 24, 2012) ...........................................................................8
`
`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig.,
`330 F.R.D. 11 (E.D.N.Y. 2019) .........................................................................................6, 7, 9
`
`In re Petrobras Sec. Litig.,
`312 F.R.D. 354 (S.D.N.Y. 2016) ...............................................................................................9
`
`In re Sinus Buster Prods. Consumer Litig.,
`2014 WL 5819921 (E.D.N.Y. Nov. 10, 2014) .........................................................................16
`
`In re Warner Chilcott Ltd. Sec. Litig.,
`2008 WL 5110904 (S.D.N.Y. 2008) ..........................................................................................8
`
`Lizondro-Garcia v. Kefi LLC,
`300 F.R.D. 169 (S.D.N.Y. 2014) ...............................................................................................6
`
`McReynolds v. Richards-Cantave,
`588 F.3d 790 (2d Cir. 2009).....................................................................................................10
`
`Mikhlin v. Oasmia Pharm. AB,
`2021 WL 1259559 (E.D.N.Y. Jan. 6, 2021) ..............................................................................7
`
`Ortega v. Uber Technologies, Inc.,
`2018 WL 4190799 (E.D.N.Y. May 4, 2018) .............................................................................6
`
`Torres v. Gristede’s Oper. Corp.,
`2010 WL 5507892 (S.D.N.Y. Dec. 21, 2010) .........................................................................14
`
`Vargas v. Capital One Fin. Advisors,
`559 F. App’x 22 (2d Cir. 2014) ...............................................................................................18
`
`Viafara v. MCIZ Corp.,
`2014 WL 1777438 (S.D.N.Y. May 1, 2014) ...........................................................................16
`
`Victoria Perez v. Allstate Ins. Co.,
`2019 WL 1568398 (E.D.N.Y. Mar. 29, 2019) .......................................................................2, 6
`
`Wal-Mart Stores, Inc. v. Visa U.S.A., Inc.,
`396 F.3d 96 (2d Cir. 2005).............................................................................................6, 18, 19
`
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`iv
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 6 of 29 PageID #: 10830
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`Willix v. Healthfirst, Inc.,
`2011 WL 754862 (E.D.N.Y. Feb 18, 2011).................................................................15, 16, 17
`
`Statutes
`
`New Jersey Consumer Fraud Act ....................................................................................................1
`
`New York General Business Law ....................................................................................................1
`
`Rules
`
`Fed. R. Civ. P. 23 ................................................................................................................... passim
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`v
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 7 of 29 PageID #: 10831
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`I.
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`INTRODUCTION
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`Plaintiffs Chaim Lerman, Roslyn Williams and James Vorrassi (collectively “Plaintiffs”)
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`respectfully submit this Memorandum of Law in support of their Unopposed Motion for
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`Preliminary Approval of Class Action Settlement. Plaintiffs assert that Defendant Apple Inc.
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`(“Apple” or the “Company”) misrepresented how its iOS 9 operating system would perform on
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`the iPhone 4S. They bring class action claims for false advertising under the New York General
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`Business Law (“NYGBL”) and the New Jersey Consumer Fraud Act (“NJCFA”) based on Apple’s
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`representations that iOS 9 would enhance the performance of Plaintiffs’ iPhone 4S devices when
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`it allegedly slowed them down significantly. The proposed settlement of this action (the
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`“Settlement”) is the culmination of significant negotiations and debate regarding Plaintiffs’ claims
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`and was achieved through mediation before The Honorable Diane M. Welsh (Ret.). On May 3,
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`2022, the Parties entered into the Settlement Agreement and Release (the “Settlement Agreement,”
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`Exhibit 1 to the Declaration of Michael Grunfeld in Support of Plaintiffs’ Motion for Preliminary
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`Approval (“Grunfeld Decl.”)).1
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`After over six years of hard-fought litigation, counsel recognize the substantial risks the
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`Parties would face if the action progressed. The Parties have a comprehensive understanding of
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`the strengths and weaknesses of their positions, as they have litigated Apple’s Motion to Dismiss,
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`Plaintiffs’ Motion for Class Certification, and Apple’s Rule 23(f) Petition, and have engaged in
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`extensive discovery at both the class certification and merits stages of this action. Discovery in
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`this case has included over 48,000 documents that Apple produced spanning over 539,000 pages,
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`over 15 depositions (including of Plaintiffs, 11 Apple employees, and the Parties’ class
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`certification experts), expert reports totaling over 770 pages, and three motions to compel the
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`1 Terms not defined herein have the same meaning as in the Settlement Agreement.
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`1
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 8 of 29 PageID #: 10832
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`production of documents or information. The Settlement is the result of vigorous advocacy and
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`arms’-length negotiations by counsel for all parties, who are experienced in complex class actions
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`and litigation involving claims of false and deceptive advertising and unfair business practices.
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`See Grunfeld Decl. ¶ 1.
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`The Settlement provides significant economic consideration to the Settlement Class: $20
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`million to resolve this litigation. Under the terms of the Settlement, class members who submit
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`valid claims will receive $15 per eligible iPhone 4S device, which may vary on a pro rata basis
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`depending on how many valid claims are submitted. This is a favorable result because Apple
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`argued throughout the litigation that even if Plaintiffs succeeded in proving their claims, which
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`Apple vigorously contested, actual damages as measured by the secondary market price did not
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`exceed $15 per device.
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`On the other hand, if the Settlement is not approved, the Parties would resume complex,
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`costly, and time-consuming litigation. The parties would need to complete merits expert discovery,
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`brief summary judgment and related Daubert briefing, brief Apple’s contemplated motion to
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`decertify the Class, prepare for trial, conduct a complex trial, and prosecute appeals. These
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`litigation efforts would be costly, require significant judicial oversight, and take a substantial
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`amount of time. Plaintiffs would also risk obtaining a recovery for the Class that is less than the
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`Settlement amount, or even no recovery at all. The Settlement allows the Parties to avoid the costs,
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`delay, and risk of continuing to litigate this action.
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`Preliminary approval “requires only an ‘initial evaluation’ of the fairness of the proposed
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`settlement” that supports “submit[ting] the [settlement] proposal to class members and hold[ing]
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`a full-scale hearing as to its fairness.”’ Victoria Perez v. Allstate Ins. Co., 2019 WL 1568398 at *1
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`(E.D.N.Y. Mar. 29, 2019). Based on an informed evaluation of the facts and governing legal
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`2
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 9 of 29 PageID #: 10833
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`principles, and their recognition of the substantial risk and expense of continued litigation, the
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`Parties respectfully submit that the proposed Settlement is fair, reasonable, and adequate under
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`Rule 23, for the reasons explained fully below.
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`II. BACKGROUND
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`A. Summary of the Litigation.
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`Apple is a manufacturer and retailer of iPhones and its corresponding iOS operating
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`system. Plaintiffs represent a class of consumers in New York and New Jersey that updated their
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`iPhone 4S devices from Apple’s iOS 7 or iOS 8 operating system to iOS 9 and allege that they
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`subsequently suffered decreased performance on their devices. On December 29, 2015, the initial
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`class action complaint in this matter was filed by Plaintiff Chaim Lerman. On March 28, 2016,
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`Plaintiffs collectively filed the operative Complaint (“Complaint”) in this action alleging that the
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`Class was harmed when consumers downloaded iOS 9 onto their iPhone 4S devices after being
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`exposed to Apple’s allegedly false description of the new operating system. Plaintiffs contend that
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`Apple misrepresented that iOS 9 was compatible with the iPhone 4S and that it would improve or
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`“enhance performance” for its customers that downloaded the software update. Instead, Plaintiffs
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`contend, iOS 9 significantly slowed down the performance of their iPhone 4S devices.
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`As described more fully in the Grunfeld Declaration, this litigation has been pending for
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`more than six years and involves complex factual and legal issues. The Parties have investigated
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`the facts and analyzed the relevant legal issues regarding the claims and defenses asserted in this
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`action through briefing and decisions on Apple’s Motion to Dismiss, Plaintiffs’ Motion for Class
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`Certification and related Daubert briefing, Apple’s Rule 23(f) petition to the Second Circuit Court
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`of Appeals, and extensive facts and expert discovery at the class certification and merits phases of
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`this litigation. See Grunfeld Decl. ¶¶ 11-17.
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`3
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 10 of 29 PageID #: 10834
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`B. Settlement Negotiations and Mediation
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`Following service of Plaintiffs’ merits expert reports, and after more than six years of hard-
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`fought litigation, the Parties entered mediation to explore whether they could resolve this action.
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`The Parties engaged in a full day mediation on February 16, 2022, before the Honorable Diane M.
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`Welsh (Ret.). Following significant negotiations and debate regarding the veracity of Plaintiffs’
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`claims, the Parties reached a Settlement Agreement and executed a Settlement Term Sheet. See
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`Grunfeld Decl. ¶ 22.
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`III.
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`SUMMARY OF THE SETTLEMENT
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`A.
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`The Settlement Class
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`On October 6, 2020, the Court granted Plaintiffs’ Motion for Class Certification and
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`certified the following classes for monetary relief only (ECF No. 127, the “Class Certification
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`Order”): all individuals and entities in New York (Class One) and New Jersey (Class Two) who
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`currently own or have owned an iPhone 4S that was updated to any version of iOS 9 from any
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`version of iOS 7 or iOS 8.
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`Under the terms of the Settlement, the Settling Parties agreed to specify the definition of
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`the Settlement Classes as follows:
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`Class One: All individuals and entities in New York who currently own or have owned an
`iPhone 4S that was updated to any version of iOS 9 from any version of iOS 7 or iOS 8.
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`Class Two: All individuals and entities in New Jersey who currently own or have owned
`an iPhone 4S that was updated to any version of iOS 9 from any version of iOS 7 or iOS
`8.
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`This definition of the Settlement Class is the same as how the Court defined the Class in
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`the Class Certification Order, with the only difference being additional details in the Settlement
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 11 of 29 PageID #: 10835
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`Agreement that seek to further define the Classes for settlement purposes in terms of who is
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`excluded from the Class and what it means to “own” an iPhone 4S.
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`For purposes of the Settlement Class, the term “own” shall include all individuals or entities
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`that owned, purchased, leased, or otherwise received an iPhone 4S, and individuals who otherwise
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`used an iPhone 4S for personal, work, or any other purposes. See Settlement Agreement Exhibit F
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`(Preliminary Approval Order) at ¶4. Excluded from the Settlement Class are: (a) directors, officers,
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`and employees of Apple or its subsidiaries and affiliated companies, as well as Apple’s legal
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`representatives, heirs, successors, or assigns; (b) the Court, the Court staff, as well as any appellate
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`court to which this matter is ever assigned and its staff; (c) Defense Counsel, as well as their
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`immediate family members, legal representatives, heirs, successors, or assigns; (d) any other
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`individuals whose claims already have been adjudicated to a final judgment; and (e) those
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`individuals who timely and validly request exclusion. Settlement Agreement Section 1.34.
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`B.
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`The Settlement Consideration and Release of Claims, Anticipated Class
`Recovery, and Potential Class Recovery
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`The Settlement, as described more fully in the Settlement Agreement, releases Apple from
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`all claims based on the facts alleged in the Complaint in exchange for a non-reversionary common
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`fund of $20,000,000. Under the terms of the Settlement, members of the Settlement Class who
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`submit a declaration under the penalty of perjury that, to the best of their knowledge, (1) they
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`downloaded iOS 9, or any version thereof, onto their iPhone 4S; (2) they lived in New York or
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`New Jersey at the time that they first downloaded any version of iOS 9; and (3) their iPhone 4S
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`experienced a significant decline in performance as a result, are entitled to a payment of $15 per
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`applicable device (that may be pro rated). See Settlement Agreement at Section 6.3.
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`If the total amount of valid claims submitted by members of the Settlement Class results in
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`an amount below the Net Settlement Amount, the amount per device will increase on a pro rata
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 12 of 29 PageID #: 10836
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`basis, up to a cap of $150 per device.2 See Settlement Agreement at Section 5.3.1. If the total
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`amount of valid claims submitted by members of the Settlement Class exceeds the Net Settlement
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`Amount, the value of each valid claim (per applicable device) will be decreased on a pro rata basis.
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`Id. at Section 5.2. Additionally, if multiple Settlement Class Members submit Claims pertaining
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`to the same eligible device, the payment amount for that device shall be divided equally among
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`those submitting Approved Claims regarding that particular device. Id. at Section 5.1. If the
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`amount does not reach the Net Settlement Amount following the pro rata adjustment described
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`herein, the remaining Residual shall be distributed to the cy pres recipient to be selected by the
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`Parties before a hearing on final approval and approved by the Court. Id. at Section 5.3.2.
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`In making this Settlement, Class Counsel considered the risks of going to trial, including
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`the possibility that a trial could result in a smaller or zero recovery for the Class, the time and
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`resources that would be expended by the Parties and the Court, and the possibility of delay caused
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`by an appeal if Plaintiffs did prevail.
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`C. Notice to the Settlement Class
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`The Parties have negotiated and agreed upon a notice program which provides the best
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`practicable notice under the circumstances. Within thirty (30) days of the Court’s entry of the
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`Preliminary Approval Order, Apple agrees to provide the Settlement Administrator with the
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`following information for each Settlement Class Member: (1) names, (2) e-mail addresses, (3)
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`mailing addresses (where available), and (4) serial numbers (where available). No later than thirty
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`(30) days after receipt of the Settlement Class contact information from Apple, the Settlement
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`Administrator shall disseminate the appropriate notice by either (1) e-mail to the last known e-
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`2 Section 1.20 of the Settlement Agreement provides: “‘Net Settlement Amount’ means the Gross
`Settlement Amount, less any amounts paid for Class Counsel’s Attorneys’ Fees and Expenses,
`administrative and notice costs, any Named Plaintiff Service Awards, and any other costs associated with
`resolving the claims asserted against Apple.”
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`mail address of the Class Member; or (2) mail to the last known postal address of the Class
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`Member, if (i) the Class Member did not provide an e-mail address or (ii) the e-mail is
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`undeliverable. See Settlement Agreement at Section 6.2.3.
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`Additionally, the Settlement Administrator will create and maintain a website, which will
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`provide, among other things, a copy of the Class Notice, together with the Claim Form, the
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`Settlement Agreement, the Motion for Preliminary Approval and associated papers, and Court
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`orders pertaining to the Settlement. The Settlement Website will also have copies of the motions
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`for Final Approval and Final Judgment, Attorneys’ Fees and Expenses, and Named Plaintiff
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`Service Awards after those motions have been filed with the Court. In addition, the Settlement
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`Website will include a section for frequently asked questions and procedural information regarding
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`the status of the Court-approval process, such as an announcement when the Final Approval
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`Hearing is scheduled, deadlines for opting out and objecting, when the Final Order and Judgment
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`has been entered, and when the Effective Date is expected or has been reached. Also prior to the
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`Settlement Administrator’s dissemination of the notice, the Settlement Administrator shall set up
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`and operate a case-specific toll-free telephone number that will have recorded information
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`answering frequently asked questions about certain terms of the Settlement Agreement, including,
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`but not limited to, the claim process and instructions about how to request a Claim Form, Class
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`Notice, and/or Summary Notice. See Settlement Agreement at Section 6.2.
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`The Settlement Administrator will also be responsible for determining whether a submitted
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`Claim Form meets the requirements set forth in the Settlement Agreement. It will use best practices
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`and reasonable efforts and means to identify and reject duplicate and/or fraudulent claims. This
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`will ensure each member of the Settlement Class with valid claims receive the full reward they are
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`entitled to. See Settlement Agreement at Section 6.7.
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 14 of 29 PageID #: 10838
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`IV. ARGUMENT
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`A.
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`Conditional Class Certification of the Settlement Class is Warranted
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`Before granting preliminary approval of a class action settlement, the Court should
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`determine that the proposed Settlement Class is a proper class for settlement purposes. See
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`Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997); Denney v. Deutsche Bank AG, 443
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`F.3d 253, 270 (2d Cir. 2006).
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`Here, the Court already certified the Class described in its Class Certification Order. ECF
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`No. 127. The proposed Settlement Class is entirely consistent with the Class that has already been
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`certified, with the only difference being that the description of the Settlement Class adds more
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`detail to set out who is excluded from the Class and what it means to “own” an iPhone 4S. See
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`supra at Section III.A. (citing Settlement Agreement Section 1.34 and Exhibit F (Preliminary
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`Approval Order) ¶ 4). The individuals excluded from the Class are the standard types of parties
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`excluded from participating in class action settlements because of their personal involvement in
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`the litigation. Similarly, the definition of the term “own” that the Settlement provides is a common-
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`sense explanation of the plain meaning of the term. These clarifications of the Class definition
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`would not alter in any way the Court’s rigorous analysis in its Class Certification Order approving
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`of the Class that Plaintiffs proposed earlier in this litigation. The Court should therefore
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`conditionally certify the Settlement Class.
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`B.
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`The Court Should Preliminarily Approve the Settlement
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`The Court reviews proposed class action settlements in two stages. Preliminary approval
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`is “the first step in the settlement process, through which the district [court] determines ‘whether
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`notice of the proposed settlement pursuant to Rule 23(e) should be given to class members . . . and
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`an evidentiary hearing scheduled to determine the fairness and adequacy of the settlement.’” Chin
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`v. RCN Corp., 2010 WL 1257586 at *2 (S.D.N.Y. Mar. 12, 2010) (internal citation omitted).
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`8
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`Case 1:15-cv-07381-LB Document 155-1 Filed 05/03/22 Page 15 of 29 PageID #: 10839
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`“Fairness is determined upon review of both the terms of the settlement and the negotiating process
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`that led to such agreement. Frank v. Eastman Kodak Co., 228 F.R.D. 174, 184 (W.D.N.Y. 2005).
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`“A presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached
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`in arm’s-length negotiations between experienced, capable counsel after meaningful discovery.”
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`Id.; see also Victoria Perez, 2019 WL 1568398 at *1 (approving settlement that was “the result of
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`extensive arms’-length negotiations by counsel).
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`Preliminary approval “requires only an ‘initial evaluation’ of the fairness of the proposed
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`settlement” that supports “submit[ting] the [settlement] proposal to class members and hold[ing]
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`a full-scale hearing as to its fairness.”’ Victoria Perez, 2019 WL 1568398 at *1; see also Lizondro-
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`Garcia v. Kefi LLC, 300 F.R.D. 169, 179 (S.D.N.Y. 2014) (same). There is a “strong judicial policy
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`in favor of settlements, particularly in the class context” and “compromise” is “encouraged by the
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`courts and favored by public policy.” Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116-
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`117 (2d Cir. 2005); see also Ortega v. Uber Technologies, Inc., 2018 WL 4190799 at *2 (E.D.N.Y.
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`May 4, 2018) (“In evaluating the substantive fairness of the terms of a proposed settlement for
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`preliminary approval, the court should give weight to the parties’ consensual decision to settle
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`class action cases because they and their counsel are in unique positions to assess potential risks.”);
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`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 330 F.R.D. 11, 33 (E.D.N.Y.
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`2019) (applying amended Rule 23 but noting “Courts should remain mindful, however, of the
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`‘strong policy in favor of settlement, particularly in the class action context’” (citation omitted)).
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`Indeed, “absent evidence of fraud or overreaching, courts consistently have refused to act as
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`Monday morning quarterbacks in evaluating the judgment of counsel.” Guevoura Fund Ltd. v.
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`Sillerman, 2019 WL 6889901 at *5 (S.D.N.Y. Dec. 18, 2019) (citation omitted). Notice to a
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`proposed class should be directed by the Court “if giving notice is justified by the parties’ showing
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`that the court will likely be able to” approve the settlement under Rule 23(e)(2) and certify the
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`class for purposes of settlement. Fed R. Civ. P. 23(e)(1).
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`In deciding if a proposed settlement is “fair, reasonable and adequate,” the amended Rule
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`23(e)(2) requires that the Court consider whether:
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`(A) the class representatives and class counsel have adequately represented the
`class; (B) the proposal was negotiated at arm’s length; (C) the relief provided
`for the class is adequate, taking into account: (i) the costs, risks, and delay of
`trial and appeal; (ii) the effectiveness of any proposed method of distributing
`relief to the class, including the method of processing class-member claims; (iii)
`the terms of any proposed award of attorneys’ fees, including timing of
`payment; and (iv) any agreement required to be identified under Rule 23(e)(3);
`and (D) the proposal treats class members equitably relative to each other.
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`See also In re Payment Card Interchange 330 F.R.D. at 30 n.24 (holding the Court need not
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`“exhaustively consider the factors applicable to final approval” since “[c]ritical information as to
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`whether a proposed settlement is fair, reasonable, and adequate, will be obtained through the notice
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`and opt-out process, and the final fairness hearing).
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`Furthermore, the Second Circuit has articulated a “fair, reasonable, and adequate” standard
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`that effectively requires parties to show that a settlement is both procedurally and substantively
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`fair. Charron v. Wiener, 731 F.3d 241, 247 (2d Cir. 2013). This Court has routinely recognized
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`that the amendment to Rule 23(e) supplements rather than displaces the prior Second Circuit
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`jurisprudence. See Chen v. XpresSpa at Terminal 4 JFK LLC, 2021 WL 4487835 at *5 (E.D.N.Y.
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`Oct. 1, 2021) (finding that the Rule 23(e) factors supplement, rather than displace, the Second
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`Circuit’s Grinnell factors); see also In re Grana y Montero S.A.A. Sec. Litig., 2021 WL 4173684
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`at *15 (E.D.N.Y. Aug. 13, 2021), report and recommendation adopted, 2021 WL 4173170
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`(E.D.N.Y. Sept. 14, 2021); and Mikhlin v. Oasmia Pharm. AB, 2021 WL 1259559 at *3 (E.D.N.Y.
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`Jan. 6, 2021).
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`In determining whether the substantive terms of a settlement are fair, reasonable, and
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`adequate, courts in the Second Circuit routinely look to the Grinnell factors. See City of Detroit v.
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`Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974). The Grinnell factors, some of which overlap
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`with the Rule 23(e)(2) factors, are as follows:
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`(1) the complexity, expense and likely duration of the litigation, (2) the reaction
`of the class to the settlement, (3) the stage of the proceedings and the amount
`of discovery completed, (4) the risks of establishing liability, (5) the risks of
`establishing damages, (6) the risks of maintaining the class action through the
`trial, (7) the ability of the defendants to withstand a